EXHIBIT 10.1
CREDIT AGREEMENT
DATED AS OF NOVEMBER 26, 2003
AMONG
NORTH AMERICAN ENERGY PARTNERS INC.
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
ROYAL BANK OF CANADA,
as Administrative Agent
and
BNP PARIBAS SECURITIES CORPORATION
RBC CAPITAL MARKETS
as
Lead Arrangers and
Book Managers
and
BNP PARIBAS
as Syndication Agent
TABLE OF CONTENTS
Page No.
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Section 1. DEFINITIONS............................................................2
1.1 Certain Defined Terms..................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement.......................................................35
1.3 Other Definitional Provisions and Rules of Construction...............35
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS............................36
2.1 Commitments; Making of Loans; the Register............................36
2.2 Interest on the Loans.................................................43
2.3 Fees..................................................................46
2.4 Repayments; Voluntary and Mandatory Prepayments; Application of
Proceeds..............................................................47
2.5 Use of Proceeds.......................................................55
2.6 Increased Costs; Taxes; Capital Adequacy; Change in Law;
Illegality............................................................56
2.7 Statement of Lenders; Obligation of Lenders to Mitigate...............59
2.8 Replacement of a Lender...............................................59
2.9 Illegality............................................................60
Section 3. BANKERS' ACCEPTANCES..................................................61
3.1 Acceptance of Bankers' Acceptances; Form and Execution................61
3.2 Power of Attorney; Provision of Bankers' Acceptances to Lenders.......63
3.3 Mechanics of Issuance.................................................65
3.4 Rollover of Bankers' Acceptances......................................66
3.5 Conversion into Bankers' Acceptances..................................66
3.6 Conversion from Bankers' Acceptances..................................67
3.7 BA Equivalent Advances................................................67
3.8 Termination of Bankers' Acceptances...................................68
3.9 Stamping Fees.........................................................68
Section 4. LETTERS OF CREDIT.....................................................68
4.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein................................................68
4.2 Letter of Credit Fees.................................................71
4.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit....71
4.4 Obligations Absolute..................................................74
4.5 Nature of Issuing Lenders' Duties.....................................75
Section 5. SECURITY..............................................................76
5.1 Collateral Documents..................................................76
5.2 Registration..........................................................77
5.3 Sharing Collateral Documents..........................................78
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5.4 Form of Collateral Documents..........................................79
5.5 After-Acquired Property...............................................79
5.6 Continuing Collateral Documents.......................................80
5.7 Dealing with Collateral Documents.....................................80
5.8 Effectiveness.........................................................80
5.9 Release and Discharge of Collateral Documents.........................80
Section 6. CONDITIONS TO LOANS AND LETTERS OF CREDIT.............................81
6.1 Conditions to Term Loans and Initial Revolving Loans..................81
6.2 Conditions to All Loans...............................................89
6.3 Conditions to Letters of Credit.......................................90
6.4 Waiver................................................................90
Section 7. COMPANY'S REPRESENTATIONS AND WARRANTIES..............................90
7.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries..........................................................91
7.2 Authorization of Borrowing, etc.......................................91
7.3 Financial Condition...................................................92
7.4 No Material Adverse Change; No Restricted Junior Payments.............93
7.5 Title to Properties; Liens; Real Property; Intellectual Property......93
7.6 Litigation; Adverse Facts.............................................94
7.7 Payment of Taxes......................................................95
7.8 Performance of Agreements; Material Contracts.........................95
7.9 Benefit Plans.........................................................95
7.10 Certain Fees..........................................................96
7.11 Environmental Protection..............................................96
7.12 Employee Matters......................................................97
7.13 Solvency..............................................................97
7.14 Matters Relating to Collateral........................................97
7.15 Disclosure............................................................98
7.16 Related Documents.....................................................98
7.17 Accounts..............................................................99
7.18 Deemed Repetition.....................................................99
Section 8. COMPANY'S AFFIRMATIVE COVENANTS.......................................99
8.1 Financial Statements and Other Reports................................99
8.2 Existence, etc.......................................................105
8.3 Payment of Taxes and Claims; Tax.....................................105
8.4 Maintenance of Properties; Insurance; Application of Net Insurance
/Condemnation Proceeds...............................................105
8.5 Inspection Rights; Lender Meeting....................................108
8.6 Compliance with Laws, etc............................................108
8.7 Environmental Matters................................................109
8.8 First Priority Liens.................................................110
8.9 Execution of Subsidiary Guarantee and Personal Property Collateral
Documents After the Closing Date.....................................111
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Section 9. COMPANY'S NEGATIVE COVENANTS.........................................112
9.1 Indebtedness.........................................................112
9.2 Liens and Related Matters............................................113
9.3 Investments; Acquisitions............................................114
9.4 Contingent Obligations...............................................115
9.5 Restricted Junior Payments...........................................116
9.6 Financial Covenants..................................................117
9.7 Restriction on Fundamental Changes; Asset Sales......................120
9.8 Consolidated Capital Expenditures....................................121
9.9 Transactions with Shareholders and Affiliates........................122
9.10 Sales and Lease-Backs................................................123
9.11 Conduct of Business..................................................123
9.12 Amendments or Waivers of Certain Agreements..........................123
9.13 Fiscal Year..........................................................123
Section 00.XXXXXX OF DEFAULT....................................................124
10.1 Failure to Make Payments When Due....................................124
10.2 Default in Other Agreements..........................................124
10.3 Breach of Certain Covenants..........................................124
10.4 Breach of Warranty...................................................124
10.5 Other Defaults Under Loan Documents..................................125
10.6 Involuntary Bankruptcy; Appointment of Receiver, etc.................125
10.7 Voluntary Insolvency.................................................125
10.8 Judgments and Attachments............................................126
10.9 Dissolution..........................................................126
10.10 Seizure..............................................................126
10.11 Change in Control....................................................126
10.12 Invalidity of Loan Documents; Failure of Security; Repudiation of
Obligations..........................................................127
10.13 Conduct of Business By Holdings......................................127
10.14 Conduct of Business by Finance Co....................................127
10.15 Failure to Consummate Acquisition or Amalgamation....................128
10.16 Amendment of Certain Documents of Holdings...........................128
Section 11.ADMINISTRATIVE AGENT.................................................129
11.1 Appointment..........................................................129
11.2 Powers and Duties; General Immunity..................................130
11.3 Independent Investigation by Lenders; No Responsibility For
Appraisal of Creditworthiness........................................132
11.4 Right to Indemnity...................................................132
11.5 Successor Administrative Agent and Swing Line Lender.................132
11.6 Collateral Documents and Guarantees..................................133
11.7 Duties of Other Agents...............................................134
11.8 Administrative Agent May File Proofs of Claim........................134
Section 12.MISCELLANEOUS........................................................135
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12.1 Successors and Assigns; Assignments and Participations in Loans
and Letters of Credit................................................135
12.2 Expenses.............................................................139
12.3 Indemnity............................................................140
12.4 Set-Off; Security Interest in Deposit Accounts.......................142
12.5 Ratable Sharing......................................................142
12.6 Amendments and Waivers...............................................143
12.7 Independence of Covenants............................................145
12.8 Notices; Effectiveness of Signatures.................................145
12.9 Survival of Representations, Warranties and Agreements...............146
12.10 Failure or Indulgence Not Waiver; Remedies Cumulative................146
12.11 Marshalling; Payments Set Aside......................................147
12.12 Severability.........................................................147
12.13 Obligations Several; Independent Nature of Lenders' Rights; Damage
Waiver...............................................................147
12.14 Release of Subsidiary Guarantee......................................147
12.15 Release of Security Interest on Asset Disposition....................148
12.16 Applicable Law.......................................................149
12.17 Construction of Agreement; Nature of Relationship....................149
12.18 Consent to Jurisdiction and Service of Process.......................149
12.19 Waiver of Jury Trial.................................................150
12.20 Confidentiality......................................................150
12.21 Paramountcy..........................................................151
12.22 Counterparts; Effectiveness..........................................151
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/ROLLOVER
III FORM OF REQUEST FOR ISSUANCE
IV INTENTIONALLY LEFT BLANK
V FORM OF BA DISCOUNT NOTE
VI FORM OF BORROWING BASE CERTIFICATE
VII FORM OF COMPLIANCE CERTIFICATE
VIII INTENTIONALLY DELETED
IX FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
X FORM OF FINANCIAL CONDITION CERTIFICATE
XI FORM OF SUBSIDIARY GUARANTEE
XII FORM OF HOLDINGS GUARANTEE
XIII FORM OF DEBENTURE
XIV FORM OF HOLDINGS PLEDGE AGREEMENT
XV FORM OF COMPANY PLEDGE AGREEMENT
XVI FORM OF SUBSIDIARY PLEDGE AGREEMENT
XVII FORM OF DEPOSIT INSTRUMENT
XVIII FORM OF OPINION OF COMPANY COUNSEL
XIX FORM OF OPINION OF FINANCE CO. COUNSEL
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
6.1M EQUIPMENT CONTINUING TO BE HELD UNDER LEASES
7.1 SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP;
MANAGEMENT
7.5B REAL PROPERTY INTERESTS
7.5C MATERIAL SERIAL NUMBER EQUIPMENT
7.5D INTELLECTUAL PROPERTY
7.8 MATERIAL CONTRACTS
9.1 EXISTING INDEBTEDNESS
9.2 PERMITTED LIENS
9.3 EXISTING INVESTMENTS
9.4 CONTINGENT OBLIGATIONS
NORTH AMERICAN
ENERGY PARTNERS INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of November 26, 2003 and entered
into by and among NORTH AMERICAN ENERGY PARTNERS INC., a Canadian corporation
("Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(each individually referred to herein as a "Lender" and collectively as
"Lenders"), BNP PARIBAS, as syndication agent for Lenders (in such capacity,
"Syndication Agent"), and ROYAL BANK OF CANADA ("RBC"), as administrative agent
for Lenders (in such capacity, "Administrative Agent").
R E C I T A L S
WHEREAS, Parent (this and other capitalized terms used in these
recitals without definition being used as defined in subsection 1.1), its direct
wholly-owned Subsidiary, Holdings, Holding's direct wholly-owned Subsidiary,
Company, and Company's direct wholly-owned Subsidiaries, Acquisition Co. and
Finance Co., have been formed for the purpose of acquiring all of the
outstanding shares of Capital Stock of NACG and substantially all of the assets
of NAEL and assuming certain liabilities of NAEL;
WHEREAS, on or before the Closing Date, Sterling, its Affiliates and
other investors will purchase all of the outstanding Parent Common Stock for
cash consideration of at least Cdn.$92,500,000;
WHEREAS, on the Closing Date, Holdings will issue the Holdings
Preferred Stock to Sellers for 30 shares of common stock of NACG (the "Exchange
Shares");
WHEREAS, on the Closing Date, Parent will contribute Cdn.$92,500,000
received from the issuance of Parent Common Stock to Holdings, and Holdings will
contribute such amount and the Exchange Shares to Company;
WHEREAS, on or before the Closing Date, Company will issue and sell
not less than the U.S. Dollar equivalent of Cdn.$245,000,000 in aggregate
principal amount of Senior Notes;
WHEREAS, subject to the terms and conditions hereof, on the Closing
Date, at the request of Company, the Lenders will extend Cdn.$50,000,000 in Term
Loans to Company, drawn from the Term Loan Commitment established hereby;
WHEREAS, on the Closing Date, Company will loan approximately
Cdn.$400,000,000 and will contribute the Exchange Shares to Acquisition Co.;
WHEREAS, on the Closing Date, Company will endorse over to Finance Co.
a portion of such loan in the amount of Cdn.$92,500,000;
WHEREAS, on the Closing Date, (i) Acquisition Co. will apply the
proceeds of the Loans, the Senior Notes and the Parent Common Stock to fund the
Acquisition Financing Requirements and will purchase all of the remaining
outstanding shares of capital stock of NACG and substantially all of the assets
of NAEL, all pursuant to the Acquisition Agreement and (ii) immediately upon the
consummation of the Acquisition, Acquisition Co. will be amalgamated with NACG
pursuant to the Amalgamation, with Amalco being the resulting corporation;
WHEREAS, from and after the Closing Date, Lenders, at the request of
Company, have agreed to extend a Revolving Loan facility to Company, the
proceeds of which will be used to provide financing for working capital and
other general corporate purposes of Company and its Subsidiaries;
WHEREAS, Company desires to secure all of the Obligations hereunder
and under the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a Lien on all of its present and after acquired real and
personal property, including all of the capital stock of its Subsidiaries; and
WHEREAS, all of the Subsidiaries of Company have agreed to guarantee
the Obligations hereunder and under the other Loan Documents and to secure their
guarantees by granting to Administrative Agent, on behalf of Lenders, a Lien on
all of their real and personal property, including a pledge of all of the
capital stock of their Subsidiaries, and Holdings has agreed to guarantee the
Obligations hereunder, with recourse limited to a pledge by Holdings of the
capital stock of Company;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders, Syndication Agent,
Documentation Agent and Administrative Agent agree as follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Acquisition" means the transactions contemplated by the Acquisition
Agreement.
"Acquisition Agreement" means that certain Purchase Agreement among
Norama Ltd. and NAEL, as Sellers, Xxxxxx Xxxxx and Xxxxx Xxxxx, as Principals,
and NACG Preferred Corp. and Acquisition Co, as Buyers, entered into as of
October 31, 2003.
"Acquisition Co." means NACG Acquisition Inc., a Canadian corporation
as it exists prior to the Amalgamation.
2
"Acquisition Financing Requirements" means the aggregate of all
amounts necessary (i) to finance the purchase price payable in connection with
the Acquisition, and (ii) to pay Transaction Costs.
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 11.5A.
"Advisory Services Agreement" means the letter Advisory Services
Agreement dated November 21, 2003 among the Permitted Holders, the Company,
Acquisition Co., Parent, Holdings and each of their present and future direct
and indirect wholly-owned subsidiaries;
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"After-Acquired Property" has the meaning assigned to that term in
subsection 5.5.
"Agents" means Administrative Agent, Syndication Agent and
Documentation Agent.
"Agreement" means this Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time.
"Amalco" means North American Construction Group Inc., the Canadian
corporation resulting from the Amalgamation.
"Amalgamation" means the amalgamation of Acquisition Co. and NACG in
accordance with the terms of the Articles of Amalgamation, with Amalco being the
corporation resulting therefrom.
"Applicable Law" means any and all laws, regulations, ordinances, or
other legally binding rules, judgments, orders, decrees, permits, concessions,
grants, franchises or governmental restrictions issued or promulgated by a
Governmental Authority and applicable to the matter in question.
"Approved Fund" means a Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Articles of Amalgamation" means the Articles of Amalgamation to be
filed immediately following the Acquisition in connection with the amalgamation
of Acquisition Co.
3
and NACG, in the form delivered to Administrative Agent and Lenders prior to
their execution of this Agreement and as such articles may be amended from time
to time thereafter to the extent permitted under subsection 9.12.
"Asset Sale" means the sale by Company or any of its Subsidiaries to
any Person other than Company or any of its wholly-owned Subsidiaries that is a
Subsidiary Guarantor of:
(i) any of the Capital Stock of any of Company's Subsidiaries,
(ii) all or substantially all of the assets of any division or line of
business of Company or any of its Subsidiaries, or
(iii) any other assets (whether tangible or intangible) of Company or
any of its Subsidiaries other than:
(a) inventory sold in the ordinary course of business,
(b) sales, assignments, transfers or dispositions of accounts in
the ordinary course of business for purposes of collection,
(c) asset dispositions permitted by clauses (iii) (as to obsolete
and worn out property only), (v), (vi) or (vii) of subsection 9.7, and
(d) any such other assets to the extent that (I) the aggregate
value of such assets sold in any single transaction or related series
of transactions is equal to or less than Cdn. $5,000,000, (II) the
aggregate value of such assets sold in any consecutive 12 month period
is equal to or less than Cdn. $10,000,000, and (III) the aggregate
value of such assets sold from the Closing Date to the date of
determination is equal to or less than Cdn. $25,000,000, provided,
however, that if Company has provided an Officer's Certificate as
contemplated in subclause 2.4B(iii)(a)(2), and is otherwise in
compliance with clauses 2.4B(iii)(a) and 9.7(iv), such sale of assets
shall constitute an Asset Sale and shall not count against the amounts
set forth in this clause (d), in each case to the extent of the Net
Asset Sale Proceeds which are the subject of such Officer's
Certificate.
"Assignment Agreement" means an Assignment and Assumption Agreement in
substantially the form of Exhibit IX annexed hereto.
"BA Discount Note" means a non-interest bearing promissory note of
Company, denominated in Cdn. Dollars, issued by Company to a Non-Acceptance
Lender as part of an issuance of Bankers' Acceptances, and substantially in the
form attached as Exhibit V or such other form as may be agreed to by the
Administrative Agent, Company and such Non-Acceptance Lender.
"BA Discount Proceeds" means, in respect of any Bankers' Acceptance,
the amount obtained by multiplying (a) the aggregate face amount of such
Bankers' Acceptance by (b) the amount (rounded up or down to the fifth decimal
place with .000005 being rounded up)
4
determined by dividing one by the sum of one plus the product of (i) the BA
Discount Rate, and (ii) a fraction, the numerator of which is the number of days
in the BA Interest Period of such Bankers' Acceptance and the denominator of
which is 365.
"BA Discount Rate" means:
(i) in relation to a Bankers' Acceptance accepted by a Schedule I
Lender, the CDOR Rate;
(ii) in relation to a Bankers' Acceptance accepted by a Schedule II
Lender or Schedule III Lender, the lesser of:
(a) the average Discount Rate applicable to such issue as quoted
by the Schedule II Reference Lenders; and
(b) the CDOR Rate plus 0.10% per annum;
provided that if both such rates are equal, then the "BA Discount
Rate" applicable thereto shall be the rate specified in (ii)(a) above;
and
(iii) in relation to a BA Equivalent Advance:
(a) made by a Schedule I Lender, the CDOR Rate;
(b) made by a Schedule II Lender or Schedule III Lender, the rate
determined in accordance with subparagraph (ii) of this definition;
and
(c) made by any other Lender, the CDOR Rate plus 0.10% per annum.
"BA Equivalent Advance" means, in relation to a borrowing of,
Conversion into or Rollover of Bankers' Acceptances, a Loan in Cdn. Dollars made
by a Non-Acceptance Lender as part of such Loan, as provided in Section 3.7.
"BA Interest Period" means, with respect to each Bankers' Acceptance,
the period selected by Company hereunder and being of 1, 2, 3 or 6 months'
duration, subject to market availability (or, subject to the agreement of the
Lenders, a longer or shorter period) commencing on the date of borrowing,
Rollover or Conversion in respect thereof, provided that:
(i) the last day of each BA Interest Period shall be also the first
day of the next BA Interest Period in the case of a Rollover; and
(ii) the last day of each BA Interest Period shall be a Business Day.
"Bankers' Acceptance" means a non-interest bearing draft drawn by
Company in Cdn. Dollars, accepted by a Lender and issued for value pursuant to
this Agreement and includes a depository xxxx under the DBNA and a xxxx of
exchange under the Bills of Exchange Act (Canada).
5
"Bankruptcy Law" means (i) the Bankruptcy and Insolvency Act (Canada),
(ii) Title 11 of the United States Code entitled "Bankruptcy", and (iii) any
analogous laws relating to bankruptcy and insolvency, each as now and hereafter
in effect, or any successor statute.
"Benefit Plan" means any employee benefit plan, including pensions,
maintained by Company or any of its Subsidiaries that is mandated or governed by
any Applicable Law.
"Board of Directors" means, as to any Person, the board of directors
(or similar governing body) of such Person or any duly authorized committee
thereof. "Bonding Program" means one or more agreements with one or more bonding
companies under which bonding companies provide, for the account of Company
and/or its Subsidiaries, bid bonds, performance bonds, labour and material
payment bonds, maintenance bonds and other bonds used in the ordinary course of
business of Company and its Subsidiaries, as the same may be amended, modified
or replaced (including with another bonding company) from time to time.
"Borrowing Base" means, as at any date of determination, an aggregate
amount equal to:
(i) the lesser of (i) 55% of Consolidated PP&E, and (ii) Cdn.
$90,000,000, plus
(ii) 75% of the value of Eligible Accounts Receivable.
"Borrowing Base Certificate" means a certificate substantially in the
form of Exhibit XVI annexed hereto delivered to Administrative Agent by Company
pursuant to subsection 6.1L or subsection 8.1(xiv), with appropriate
attachments.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of Alberta or Ontario, or is a day on
which banking institutions located in either such province are authorized or
required by Applicable Law or other governmental action to close.
"Canadian Dollars", "Cdn. Dollars", "Cdn. $"and the sign "$" (unless
otherwise specified) mean the lawful money of Canada.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real or personal) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.
"Capital Stock" means the capital stock or other equity interests of a
Person.
"Cash" means money, currency or a credit balance in a Deposit Account.
6
"Cash Equivalents" means, as at any date of determination,
(i) marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the Government of Canada or the
United States Government, or (b) issued by any agency of the Canada or
United States, the obligations of which are guaranteed by the Government of
Canada or backed by the full faith and credit of the United States,
respectively, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any province of Canada or
state of the United States of America, or any political subdivision of
either, or any public instrumentality thereof, in each case maturing within
one year after such date and having, at the time of the acquisition
thereof, the highest rating obtainable from either Standard & Poor's
("S&P") or Xxxxx'x Investors Service, Inc. ("Moody's");
(iii) commercial paper maturing no more than one year from the date of
creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 from S&P, at least P-1 from Moody's, or at least R-1
high from Dominion Bond Rating Service Limited;
(iv) deposits at or financial instruments issued by any Canadian
chartered bank which has a long-term debt rating of at least A+ by S&P, A1
by Moody's or A(high) by Dominion Bond Rating Service Limited;
(v) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender, or by any
commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia, if such commercial bank (a)
is at least "adequately capitalized" (as defined in the regulations of its
primary federal banking regulator) and (b) has Tier 1 capital (as defined
in such regulations) of not less than U.S.$100,000,000; and
(vi) shares of any money market mutual fund that (a) has at least 95%
of its assets invested continuously in the types of investments referred to
in clauses (i) through (v) above, and (b) has net assets of not less than
Cdn. $500,000,000.
"CDOR Rate" means, on any date which Bankers' Acceptances are to be
issued pursuant hereto, the per annum rate of interest which is the rate
determined as being the arithmetic average of the annual yield rates applicable
to Cdn. Dollar bankers' acceptances having identical issue and comparable
maturity dates as the Bankers' Acceptances proposed to be issued by Company
displayed and identified as such on the display referred to as the "CDOR Page"
(or any display substituted therefor) of Reuters Monitor Money Rates Service as
at approximately 10:00 a.m. (Toronto time) on such day, or if such day is not a
Business Day, then on the immediately preceding Business Day (as adjusted by
Administrative Agent in good faith after 10:00 a.m. (Toronto time) to reflect
any error in a posted rate or in the posted average annual rate), provided if
such a rate does not appear on such CDOR Page, then the CDOR Rate, on any day,
shall be the Discount Rate quoted by Administrative Agent determined as of
7
10:00 a.m. (Toronto time) on such day which would be applicable in respect of an
issue of bankers' acceptances in a comparable amount and with comparable
maturity dates to the Bankers' Acceptances proposed to be issued by Company on
such day, or if such day is not a Business Day, then on the immediately
preceding Business Day.
"Change in Control" means any of the following:
(i) any Person or group (as such term is used in section 13(d) of the
Exchange Act) of Persons (other than a Permitted Holder and any entity
formed by a Permitted Holder solely for the purpose of owning Capital Stock
of Holdings) shall become the beneficial owner, directly or indirectly
(with beneficial ownership being as defined and calculated as set forth in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), of shares representing
more than 50% of the Capital Stock (measured by voting power rather than
number of shares) that is at the time entitled to vote for the election of
the Board of Directors of Holdings or the Company;
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company or Holdings (together with any new directors whose election by such
Board of Directors or whose nomination for election by the shareholders of
the Company or Holdings, as applicable, was approved by a vote of a
majority of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason (other than death) to
constitute a majority of the Board of Directors then in office;
(iii) the failure at any time of Holdings to legally and beneficially
own and control 100% of the issued and outstanding shares of capital stock
of Company or the failure at any time of Holdings to have the ability to
elect all of the Governing Body of Company; and
(iv) the occurrence of any "Change of Control" as defined in the
Senior Note Indenture.
As used herein, the term "beneficially own" or "beneficial ownership" shall have
the meaning set forth in clause (i) above.
Notwithstanding anything to the contrary contained in this definition of "Change
in Control", the transactions occurring on the Closing Date and the prior
acquisitions by Parent of Holdings and by Holdings of Company, shall not give
rise to, or be deemed to result in, a "Change in Control" for all purposes
hereunder.
"Class", as applied to Lenders, means each of the following two
classes of Lenders: (i) Lenders having Revolving Loan Exposure, and (ii) Lenders
having Term Loan Exposure.
8
"Clearing House" shall have the meaning ascribed thereto in the DBNA,
including for certainty The Canadian Depository For Securities Limited or its
nominee, CDS & Co.
"Closing Date" means the date on which the initial Loans are made.
"Closing Date Mortgaged Property" has the meaning set forth in
subsection 6.1K.
"Closing Date Mortgages" has the meaning set forth in subsection 6.1K.
"Collateral" means, collectively, all of the real and personal
property (including Capital Stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"Collateral Account" means an interest-bearing bank account in the
name of Administrative Agent, with all amounts on deposit therein being the
subject of a First Priority Lien in favour of the Administrative Agent pursuant
to the Debenture of the Company.
"Collateral Documents" means the Mortgages, the Deposit Instruments,
the Holdings Pledge Agreement, the Company Pledge Agreement, the Subsidiary
Pledge Agreements, and all other instruments or documents delivered by any Loan
Party pursuant to this Agreement or any of the other Loan Documents in order to
grant to Administrative Agent, on behalf of Lenders and Swap Lenders, a Lien on
any real or personal property of that Loan Party as security for the Obligations
and the Secured Swap Obligations.
"Commitments" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A, accept Bankers' Acceptances pursuant to subsection
3.1A and issue (or participate in) Letters of Credit pursuant to subsection 4.1.
"Company" has the meaning assigned to that term in recitals to this
Agreement.
"Company Pledge Agreement" means the Securities Pledge Agreement
executed and delivered by Company on or after the Closing Date, substantially in
the form of Exhibit XV annexed hereto, as such Company Pledge Agreement may
thereafter be amended, supplemented or otherwise modified from time to time in
accordance herewith, including by the further pledge of Capital Stock from time
to time in accordance herewith.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit VII annexed hereto.
"Confidential Information Memorandum" means the Confidential
Information Memorandum dated October, 2003 prepared by BNP Paribas and RBC
Capital Markets relating to the credit facilities evidenced by this Agreement.
"Consolidated Capital Expenditures" means, for any period, the sum of
the aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a
9
liability and including that portion of Capital Leases which is capitalized in
such period on the consolidated balance sheet of Company and its Subsidiaries)
by Company and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Company and its
Subsidiaries. For purposes of this definition, the purchase price of equipment
that is purchased (a) simultaneously with the trade-in of existing equipment, or
(b) with insurance proceeds, shall be included in Consolidated Capital
Expenditures only to the extent of the gross amount of such purchase price less
the credit granted by the seller of such equipment for the equipment being
traded in at such time or the amount of such proceeds, as the case may be.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period, excluding any interest expense
not payable in Cash (such as non-cash amortization and write-off of discount and
debt issuance costs).
"Consolidated Current Assets" means, as at any date of determination,
the total assets of Company and its Subsidiaries on a consolidated basis which
may properly be classified as current assets in conformity with GAAP, excluding
Cash and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, excluding the current portions of Funded Debt and Capital
Leases, and for certainty excluding other Indebtedness having a term to maturity
of one year or less, unless maturity is extendible at the sole option of the
Company or its Subsidiaries beyond one year.
"Consolidated EBITDA" means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv)
except for purposes of Section 9.6B, total depreciation expense, (v) total
amortization expense, and (vi) other non-cash items (other than any such
non-cash item to the extent it represents an accrual of or reserve for cash
expenditures in any future period), but only, in the case of clauses (ii)-(vi),
to the extent deducted in the calculation of Consolidated Net Income, less other
non-cash items added in the calculation of Consolidated Net Income (other than
any such non-cash item to the extent it will result in the receipt of cash
payments in any future period), all of the foregoing as determined on a
consolidated basis for Company and its Subsidiaries in conformity with GAAP,
provided, that, for purposes of calculating the Consolidated Leverage Ratio, the
Consolidated Senior Leverage Ratio and compliance with subsection 9.6E,
Consolidated EBITDA: (w) for the Fiscal Quarter ended June 30, 2003, shall be
deemed to be Cdn.$18,669,000, (x) for the Fiscal Quarter ended September 30,
2003, shall be deemed to be Cdn.$22,039,000, (y) for the calendar month ending
October 31, 2003, shall be deemed to be Cdn.$3,800,000, and (z) for the calendar
month ending November 30, 2003, shall be deemed to be Cdn.$4,700,000.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital
Adjustment minus (ii) the sum,
10
without duplication, of the amounts for such period of (A) voluntary and
scheduled repayments of Consolidated Total Debt (excluding repayments of
Revolving Loans except to the extent the Revolving Loan Commitments are
permanently reduced in connection with such repayments), (B) Consolidated
Capital Expenditures (net of any proceeds of any related financings with respect
to such expenditures other than Revolving Loans), (C) Consolidated Cash Interest
Expense, and (D) current taxes based on income of Company and its Subsidiaries
and paid in cash with respect to such period.
"Consolidated Fixed Charges" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Cash Interest
Expense, (ii) scheduled principal payments in respect of Consolidated Total
Debt, (iii) current taxes based on income of Company and its Subsidiaries and
paid in cash with respect to such period, (iv) Restricted Junior Payments and
(v) the aggregate amount of all rents paid or payable during that period under
all Capital Leases to which Company or any of its Subsidiaries is a party (for
certainty, excluding the interest portion to the extent included by (i) above),
all of the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, net costs under Interest Rate Agreements and amounts referred to in
subsection 2.3 payable to Administrative Agent and Lenders that are considered
interest expense in accordance with GAAP, but excluding any such amounts
referred to in subsection 2.3 payable on or before the Closing Date.
"Consolidated Leverage Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of (a) Consolidated Total Debt as at such day to (b)
Consolidated EBITDA for the consecutive four Fiscal Quarters ending on such day.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, provided
that there shall be excluded:
(i) the income (or loss) of any Person (other than a Subsidiary of
Company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except in the case of income to the
extent of the amount of dividends or other distributions actually paid to
Company or any of its Subsidiaries by such Person during such period,
(ii) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of Company or is merged into or consolidated with
Company or any of its Subsidiaries or that Person's assets are acquired by
Company or any of its Subsidiaries,
11
(iii) the income of any Subsidiary of Company that is not a Subsidiary
Guarantor to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its Organizational Documents or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary,
(iv) any after-tax gains or losses attributable to asset sales or
returned surplus assets of any pension plan,
(v) to the extent not included in clauses (i) through (iv) above, any
net extraordinary gains or net non-cash extraordinary losses, and
(vi) the impact of currency translation gains and losses and
xxxx-to-market gains and losses on any Hedge Agreement.
"Consolidated PP&E" means, as at any date of determination, the assets
(net of depreciation) of Company and its Subsidiaries on a consolidated basis
which may properly be classified as property, plant and equipment in conformity
with GAAP, excluding any assets subject to a Lien in favour of any Person other
than Administrative Agent for the benefit of the Lenders that ranks pari passu
with or ahead of the Liens created by the Collateral Documents, to the extent of
the lesser of the fair market value of such asset and the amount secured by such
Lien.
"Consolidated Senior Leverage Ratio" means, as of the last day of any
Fiscal Quarter the ratio of (a) Consolidated Total Senior Debt as at such day to
(b) Consolidated EBITDA for the consecutive four Fiscal Quarters ending on such
day.
"Consolidated Total Debt" means, as at any date of determination, the
sum of:
(i) the aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP (with the amount of any such Indebtedness incurred in
any currency other than Canadian Dollars, to the extent of the principal
amount hedged pursuant to a Currency Agreement, determined by reference to
the exchange rate between such currency and Canadian Dollars set forth in
such Currency Agreement as the basis for determining the respective parties
obligations thereunder), and
(ii) without duplication, the Letter of Credit Usage and reimbursement
obligations in respect of other letters of credit, surety bonds or similar
instruments in excess of the lesser of (a) Cdn.$30,000,000 and (b) the
maximum aggregate amount of Letters of Credit that are permitted to be
outstanding hereunder at the time of determination.
"Consolidated Total Senior Debt" means the principal amount of the
Obligations (including the face amount of Bankers' Acceptances and issued
Letters of Credit in excess of the lesser of (a) Cdn.$30,000,000 and (b) the
maximum aggregate amount of Letters of
12
Credit that are permitted to be outstanding hereunder at the time of
determination), and any other Indebtedness of Company or any of its Subsidiaries
that is secured by any Lien.
"Consolidated Working Capital" means, as at any date of determination,
the excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (but without
duplication):
(i) with respect to any Indebtedness, lease, dividend or other
obligation of another if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide assurance to the
obligee of such obligation of another that such obligation of another will
be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such obligation will be protected (in
whole or in part) against loss in respect thereof,
(ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for
reimbursement of drawings, or
(iii) under Hedge Agreements.
Contingent Obligations shall include (a) the direct or indirect guarantee,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the obligation
of another through any agreement (contingent or otherwise) (1) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(2) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any contract, undertaking, agreement, indenture, mortgage, deed of
trust or other instrument to which that Person is a party or by which it or any
of its properties is bound or to which it or any of its properties is subject,
or any provision of any Securities issued by that Person.
13
"Conversion" means the conversion or deemed conversion of a Loan to
another type of Loan in accordance with Section 2.2C and in the case of Bankers'
Acceptances, Section 3, in each case, or otherwise as occurs automatically
hereunder, but in any case under the same credit facility under which the
original Loan was made.
"Currency Agreement" means any foreign exchange contract, or any,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement, in each case to which Company or any of
its Subsidiaries is a party.
"DBNA" means the Depository Bills and Notes Act (Canada).
"Debenture" means a Fixed and Floating Charge Debenture executed and
delivered by the Company and each Subsidiary Guarantor, substantially in the
form of Exhibit XIII annexed hereto, as such Debenture may thereafter be
amended, supplemented or otherwise modified from time to time.
"Deposit Account" means a demand, time, savings, passbook or similar
account maintained with a Person engaged in the business of banking, including a
savings bank, savings and loan association, credit union or trust company.
"Deposit Instrument" means a deposit agreement in respect of each
Debenture executed and delivered by the Company and each Subsidiary Guarantor,
substantially in the form of Exhibit XVII annexed hereto, as such Deposit
Instrument may thereafter be amended, supplemented or otherwise modified from
time to time.
"Discount Rate" means, with respect to the issuance of a bankers'
acceptance in the Canadian bankers' acceptance market, the rate of interest per
annum, calculated on the basis of a year of 365 days (rounded upwards, if
necessary, to the nearest whole multiple of 1/100th of one percent) which is
equal to the discount exacted by a purchaser taking initial delivery of such
bankers' acceptance, calculated as a rate per annum and as if the issuer thereof
received the discount proceeds in respect of such bankers' acceptance on its
date of issuance and had repaid the respective face amount of such bankers'
acceptance on the maturity date thereof.
"Domestic Subsidiary" means any Subsidiary of Company that is
incorporated or organized under the laws of Canada or any province of territory
thereof.
"Eligible Accounts Receivable" means, with respect to Company and its
Subsidiaries, the accounts receivable of Company and its Subsidiaries acceptable
to Administrative Agent, acting reasonably, for inclusion in the calculation of
the Borrowing Base. In determining the amount to be so included, the face amount
of such accounts receivable shall be reduced by the amount of all returns,
discounts, deductions, claims, credits, charges, or other allowances. Unless
otherwise approved in writing by Administrative Agent, an account receivable
shall not be an Eligible Account Receivable if:
(i) it arises out of a sale made by such Loan Party to an Affiliate of
such Loan Party or any other Loan Party;
14
(ii) its payment terms are longer than 60 days from date of invoice,
(iii) it is unpaid more than 120 days from date of invoice;
(iv) it is from the same account debtor or its Affiliate and 25% or
more of all accounts receivable from that account debtor (and its
Affiliates) are ineligible under (iii) above;
(v) the account debtor for such account receivable is a creditor of
Company or any Subsidiary of Company and has asserted in writing a right of
setoff against Company or any Subsidiary of Company, or has disputed its
liability or otherwise has made any claim with respect to such account
receivable or any other account receivable which has not been resolved, in
each case to the extent of the amount of such asserted right of setoff, or
the amount of such dispute or claim, as the case may be;
(vi) the account debtor has filed a petition or commenced a voluntary
case under any applicable Bankruptcy Laws, as now constituted or hereafter
amended, or any similar law in any other jurisdiction or made an assignment
for the benefit of creditors, or if a decree or order for relief has been
entered by a court having jurisdiction over the account debtor in an
involuntary case under such Bankruptcy Laws, or if any other petition or
other application for relief under such Bankruptcy Laws has been filed by
or against the account debtor, or if the account debtor has failed,
suspended business, declared itself to be insolvent, is unable to pay its
debts as they become due (or has admitted same in writing) or has consented
to or suffered a receiver, receiver-manager, trustee, liquidator or
custodian to be appointed for it or any portion of its assets or affairs;
(vii) such account receivable is not payable in Canadian Dollars or
U.S. Dollars or the account debtor for such account receivable is located
outside the United States or Canada, unless such account receivable is
supported by an irrevocable letter of credit or accounts receivable
insurance satisfactory to Administrative Agent (as to form, substance and
issuer) and assigned to and directly drawable by Administrative Agent, or
is otherwise supported on terms acceptable to Administrative Agent in its
sole discretion;
(viii) the sale to the account debtor is on a xxxx-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment basis or
made pursuant to any other written agreement providing for repurchase or
return;
(ix) Administrative Agent determines by its own credit analysis that
collection of such account receivable is reasonably uncertain or that such
account receivable will likely not be paid (provided that for certainty,
Administrative Agent shall have no obligation to do so);
(x) the account debtor is a Canadian federal, provincial, municipal or
local government, governmental or public department, central bank, court,
commission, board, bureau, agency or instrumentality, unless such account
receivable has been assigned to Administrative Agent on behalf of the
Lenders in accordance with all Applicable Laws;
15
(xi) the goods giving rise to such account receivable have not been
shipped and delivered to and accepted by the account debtor, the services
giving rise to such account receivable have not been performed;
(xii) such account receivable does not comply with all requirements of
Applicable Law such that its enforceability is not assured;
(xiii) such account receivable is subject to any adverse security
deposit, progress payment or other similar advance made by or for the
benefit of the applicable account debtor; or
(xiv) such account receivable is not subject to a valid and perfected
First Priority Lien in favor of Administrative Agent or does not otherwise
conform to the representations and warranties contained in the Loan
Documents.
"Eligible Assignee" means:
(i) any Lender, any Affiliate of any Lender and any Approved Fund of
any Lender; and
(ii) (a) a commercial bank, insurance company or other financial
institution organized under the laws of the United States or any state
thereof, or under the laws of Canada; (b) a savings and loan association or
savings bank organized under the laws of the United States or any state
thereof; (c) a treasury branch or other financial institution carrying on
substantially the same business as a bank and organized under the laws of a
Province of Canada, or (d) a commercial bank organized under the laws of
any other country or a political subdivision thereof,
provided that, in any case, unless an Eligible Assignee has become an assignee
of Loans at a time when an Event of Default has occurred and is continuing,
Company shall have no obligation under Section 2.6A to gross-up for Taxes
withheld or paid solely because such Eligible Assignee is a non-resident of
Canada within the meaning of the Income Tax Act unless Company otherwise agrees
in writing to do so.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, designation, finding,
abatement order or other order or directive (conditional or otherwise), by any
Governmental Authority or any other Person, arising (i) pursuant to or in
connection with any actual or alleged violation of any Environmental Law, (ii)
in connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged damage,
injury, threat or harm to health, safety, natural resources or the environment.
"Environmental Laws" means any common law relating to environmental
matters and all current or future statutes, ordinances, orders, rules,
regulations, by-laws, judgments, Governmental Authorizations, or any other
binding requirements of any Governmental Authority relating to (i) environmental
matters, including those relating to any
16
Hazardous Materials Activity, (ii) the generation, use, storage, transportation,
recycling or disposal of Hazardous Materials, or (iii) occupational safety and
health, industrial hygiene, land use or the protection of the environment,
natural resources or human, plant or animal health, safety or welfare, in any
manner applicable to Company or any of its Subsidiaries or any Facility.
"Event of Default" means each of the events set forth in Section 10.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"Exchange Shares" has the meaning assigned to that term in the
recitals to this Agreement.
"Facilities" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Company or any of its Subsidiaries or any of
their respective predecessors or Affiliates.
"Finance Co." means NACG Finance LLC, a Delaware limited liability
company.
"Financial Plan" has the meaning assigned to that term in subsection
8.1(ix).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien is perfected and has priority over any other Lien on, or adverse claim
against, such Collateral, other than (for all purposes herein except the
definition of "Eligible Accounts Receivable") Liens created by the Company and
its Subsidiaries as permitted by subsection 9.2A, and (ii) such Lien is the only
Lien (other than Liens permitted pursuant to subsection 9.2A) to which such
Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Company and its Subsidiaries
ending on March 31 of each calendar year. For purposes of this Agreement, any
particular Fiscal Year may be designated by reference to the calendar year in
which such Fiscal Year ends.
"Fronting Bank" means, in respect of the issuance of Letters of
Credit, BNP Paribas (Canada) and any successor Fronting Bank appointed pursuant
to subsection 11.5C.
"Fund" means any Person (other than a natural Person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Funded Debt", as applied to any Person, means all Indebtedness of
that Person (including any current portions thereof) which by its terms or by
the terms of any instrument or agreement relating thereto matures more than one
year from, or is directly renewable or extendable at the option of that Person
to a date more than one year from (including an option of
17
that Person under a revolving credit or similar agreement obligating the lender
or lenders to extend credit over a period of one year or more from), the date of
the creation thereof.
"Funding and Payment Office" means:
(i) in the case of the Agent (a) the office of RBC as Administrative
Agent located at its Main Branch in Toronto, Ontario as advised by RBC to
Company and Lenders in writing or (b) such other office of Administrative
Agent and Swing Line Lender as may from time to time hereafter be
designated as such in a written notice delivered by Administrative Agent to
Company and each Lender, and
(ii) in the case of the Swing Line Lender (a) the office of RBC as
Swing Line Lender located at its Main Branch in Toronto, Ontario as advised
by RBC to Company and Lenders in writing or (b) such other office of Swing
Line Lender as may from time to time hereafter be designated as such in a
written notice delivered by Swing Line Lender to Company and each Lender.
"Funding Date" means the date of the funding of a Loan, or the
issuance of any Letter of Credit.
"GAAP" has the meaning assigned to that term in subsection 1.2.
"Governing Body" means the board of directors or other body having the
power to direct or cause the direction of the management and policies of a
Person that is a corporation, partnership, trust or limited liability company.
"Governmental Authority" means:
(i) any government, parliament or legislature, any municipal council
or authority, or any government regulatory or administrative authority,
agency, commission or board and any other statute, rule, regulation or
bylaw making entity in each case having jurisdiction in the relevant
circumstances;
(ii) any Person acting under the authority of any of the foregoing or
under a statute, rule, regulation or bylaw thereof; and
(iii) any judicial, administrative or arbitral court, authority,
tribunal or commission having jurisdiction in the relevant circumstances.
"Governmental Authorization" means any approval, certificate,
franchise, permit, license, registration, authorization, plan, directive,
consent, order or consent decree of or from, or notice to, any Governmental
Authority.
"Guarantees" means the Holdings Guarantee and the Subsidiary
Guarantee.
"Hazardous Materials" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes",
18
"hazardous materials", "hazardous recyclables", "extremely hazardous waste",
"acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to the
environment, natural resources, or human, plant or animal health safety or
welfare (including harmful properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity or words of similar
import under any applicable Environmental Laws); (ii) any oil, petroleum,
petroleum fraction or petroleum derived substance; (iii) any drilling fluids,
produced waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any flammable
substances or explosives; (v) any radioactive materials; (vi) any
asbestos-containing materials; (vii) urea formaldehyde foam insulation; (viii)
electrical equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls; (ix) pesticides; and (x) any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by any
Governmental Authority or which may or could pose a hazard to the environment,
natural resources or human, plant or animal health, safety or welfare or to the
health and safety of the owners, occupants or any Persons in the vicinity of any
Facility or to the indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
whether intentional or unintentional, including the use, manufacture,
possession, storage, holding, presence, existence, location, Release, threatened
Release, discharge, placement, generation, transportation, processing,
construction, treatment, abatement, removal, remediation, recycling, disposal,
disposition or handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.
"Holdings" means NACG Preferred Corp., a Canadian corporation.
"Holdings Certificate of Designations" means the provisions of
Holdings' Articles of Incorporation relating to the Holdings Preferred Stock, in
the form delivered to Administrative Agent and Lenders prior to their execution
of this Agreement and as such provisions may be amended from time to time
thereafter to the extent permitted under subsection 9.12.
"Holdings Guarantee" means the limited recourse Holdings Guarantee
executed and delivered by Holdings on the Closing Date substantially in the form
of Exhibit XII annexed hereto, as such Holdings Guarantee may thereafter be
amended, supplemented or otherwise modified from time to time in accordance
herewith.
"Holdings Pledge Agreement" means the Securities Pledge Agreement
executed and delivered by Holdings on the Closing Date, substantially in the
form of Exhibit XIV annexed
19
hereto, as such Holdings Pledge Agreement may thereafter be amended,
supplemented or otherwise modified from time to time in accordance herewith.
"Holdings Preferred Stock" means 35,000 shares of 8% Series A
Preferred Stock of Holdings with a liquidation preference of Cdn.$1000 per share
and with the other terms set forth in the Holdings Certificate of Designations
on the date hereof.
"Income Tax Act" means the Income Tax Act (Canada), and the
regulations promulgated thereunder.
"Indebtedness", as applied to any Person, means:
(i) all indebtedness for borrowed money,
(ii) that portion of obligations with respect to Capital Leases that
is properly classified as a liability on a balance sheet in conformity with
GAAP,
(iii) notes payable and drafts accepted representing extensions of
credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase
price of property or services which purchase price is (a) due more than six
months from the date of incurrence of the obligation in respect thereof or
(b) evidenced by a note or similar written instrument,
(v) Synthetic Lease Obligations, and
(vi) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person.
Obligations under Interest Rate Agreements and Currency Agreements constitute
(1) in the case of Hedge Agreements, Contingent Obligations, and (2) in all
other cases, Investments, and in neither case constitute Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term in
subsection 12.3.
"Indemnitee" has the meaning assigned to that term in subsection 12.3.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, software, know-how and processes used in or necessary
for the conduct of the business of Company and its Subsidiaries.
"Interest Payment Date" means with respect to any Prime Rate Loan, the
first Business Day of each month, commencing on the first such date to occur
after the Closing Date.
20
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.
"Internal Revenue Code" means the United States Internal Revenue Code
of 1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"Investment" means:
(i) any direct or indirect purchase or other acquisition by Company or
any of its Subsidiaries of, or of a beneficial interest in, any Securities
of any other Person (including any Subsidiary of Company),
(ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other
than Company or any of its Subsidiaries, of any equity Securities of such
Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts
and similar expenditures in the ordinary course of business) or capital
contribution by Company or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that other Person
that are not current assets or did not arise from sales or services to that
other Person in the ordinary course of business, or
(iv) Interest Rate Agreements or Currency Agreements not constituting
Hedge Agreements.
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment (other than adjustments for the repayment of, or the refund of
capital with respect to, the original principal amount of any such Investment).
"IP Collateral" means, collectively, the Intellectual Property that
constitutes Collateral under the Debenture.
"Issuing Lender", with respect to any Letter of Credit, means the
Revolving Lender that agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 4.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form.
"Lender" and "Lenders" means the Persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 12.1B, and the term "Lenders" shall
include Swing Line Lender unless the
21
context otherwise requires, provided that the term "Lenders", when used in the
context of a particular Commitment, shall mean Lenders having that Commitment.
"Lender Hedge Agreement" means a Hedge Agreement to which a Lender or
an Affiliate of a Lender is the counterparty.
"Letter of Credit" or "Letters of Credit" means Canadian Dollar
standby letters of credit issued or to be issued by Issuing Lenders for the
account of Company pursuant to subsection 4.1, for the purpose of supporting:
(i) Indebtedness of Company or any of its Subsidiaries in respect of
industrial revenue or development bonds or financings,
(ii) workers' compensation liabilities of Company or any of its
Subsidiaries,
(iii) the obligations of insurers of Company or any of its
Subsidiaries,
(iv) obligations with respect to Capital Leases or Operating Leases of
Company or any of its Subsidiaries, and
(v) performance, payment, deposit or surety obligations of Company or
any of its Subsidiaries (including under the Bonding Program), in any case
in the ordinary course of the Loan Parties' business.
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed out of the proceeds of Revolving
Loans pursuant to subsection 4.3B or otherwise reimbursed by Company.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Term Loans or Revolving
Loans or any combination thereof, and for certainty includes extensions of
credit made by way of Bankers' Acceptances.
"Loan Documents" means this Agreement, Bankers' Acceptances, BA
Discount Notes, Letters of Credit (and any applications for, or reimbursement
agreements or other documents executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Guarantees, and the Collateral
Documents.
22
"Loan Party" means each of Holdings, Company and any of Company's
Subsidiaries from time to time executing a Loan Document, and "Loan Parties"
means all such Persons, collectively.
"Management Fees" means fees payable pursuant to the Advisory Services
Agreement.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the United States Federal Reserve System as in
effect from time to time.
"Material Adverse Effect" means any of (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and its Subsidiaries taken as a whole, or
(ii) the impairment of the ability of the Loan Parties, taken as a whole, to
perform the Obligations in any material way, or (iii) the impairment of the
ability of Administrative Agent or Lenders to enforce the Obligations.
"Material Contract" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew, as at the
date of determination, could reasonably be expected to have a Material Adverse
Effect.
"Maximum Consolidated Capital Expenditures Amount" has the meaning
assigned to that term in subsection 9.8.
"Mortgage" means:
(i) each Debenture,
(ii) any other security document (whether designated as a debenture, a
deed of trust, a mortgage, a security agreement or any similar title)
executed and delivered by any Loan Party in such form as may be approved by
Administrative Agent in its sole discretion, in each case with such changes
thereto as may be recommended by Administrative Agent's local counsel based
on local laws or customary local mortgage or deed of trust practices, or
(iii) at Administrative Agent's option, in the case of After-Acquired
Property, an amendment or supplement to an existing Mortgage, in form
satisfactory to Administrative Agent, adding such After-Acquired Property
to any existing Mortgage in order to specifically describe it within the
fixed charges thereof, in either case as such security instrument or
amendment may be amended, supplemented or otherwise modified from time to
time.
"NACG" means North American Construction Group Inc., a Canadian
corporation, as it exists prior to the Amalgamation.
"NAEL" means North American Equipment Ltd., an Alberta corporation.
23
"Net Asset Sale Proceeds", with respect to any Asset Sale, means Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
(including professional fees and costs) incurred in connection with such Asset
Sale, including (i) income taxes reasonably estimated to be actually payable
within two years of the date of such Asset Sale as a result of any gain
recognized in connection with such Asset Sale and (ii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is secured by a Lien on the stock or
assets in question and that is required to be repaid under the terms thereof as
a result of such Asset Sale.
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
expropriation, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, in each
case net of any actual and reasonable documented costs incurred by Company or
any of its Subsidiaries in connection with the adjustment or settlement of any
claims of Company or such Subsidiary in respect thereof.
"Net Securities Proceeds" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses) from the (i) issuance
of Capital Stock of or incurrence of Indebtedness by Holdings, Company or any of
its Subsidiaries and (ii) capital contributions made by a holder of Capital
Stock of Holdings or Company.
"Non-Acceptance Lender" means (i) a Lender which ceases to accept
Bankers' Acceptances in the ordinary course of its business or (ii) in respect
of Lenders which are not Canadian chartered banks or Schedule III Lenders, a
Lender who, by notice in writing to Administrative Agent and Company, elects
thereafter to make BA Equivalent Advances in lieu of accepting Bankers'
Acceptances.
"Non-Consenting Lender" has the meaning assigned to that term in
subsection 2.8.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto.
"Notice of Conversion/Rollover" means a notice substantially in the
form of Exhibit II annexed hereto.
"Obligations" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal (including BA Equivalent Advances,
reimbursement of amounts paid under Bankers' Acceptances, and reimbursement of
drawings under Letters of Credit), interest, fees, expenses, indemnification or
otherwise.
24
"Officer" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.
"Officer's Certificate", as applied to any Person that is a
corporation, partnership or, trust or limited liability company, means a
certificate executed on behalf of such Person by one or more Officers of such
Person or one or more Officers of a general partner or a managing member if such
general partner or managing member is a corporation, partnership, trust or
limited liability company.
"Old System Issuer" means a Lender, other than a Non-Acceptance
Lender, who elects not to accept Bankers' Acceptances as depository bills under
the DBNA.
"Operating Lease", as applied to any Person, means any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real or personal) that is not a Capital Lease other than any
such lease under which that Person is the lessor.
"Organizational Documents" means the documents (including bylaws, if
applicable) pursuant to which a Person that is a corporation, partnership, trust
or limited liability company is organized.
"Parent" means NACG Holdings Inc., a Canadian corporation.
"Parent Common Stock" means the common stock of Parent.
"Participant" means a purchaser of a participation in the rights and
obligations under this Agreement pursuant to subsection 12.1C.
"Permitted Encumbrances" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims the
payment of which is not, at the time, required by subsection 8.3;
(ii) Liens imposed by law, such as statutory liens and deemed trusts,
carriers' liens, builders' liens, warehousemen's liens, mechanics' liens,
materialmen's liens and other liens, privileges or other charges of a
similar nature in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and that
(in the case of any such amounts overdue for a period in excess of 10 days)
are being contested in good faith by appropriate proceedings, so long as
(1) such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested amounts, and
(2) in the case of a Lien with respect to any portion of the Collateral,
such contest proceedings conclusively operate to stay the sale of any
portion of the Collateral on account of such Lien;
25
(iii) Liens constituted by the delivery of bonds issued under the
Bonding Program, or letters of credit, in any case provided in the ordinary
course of business to secure the performance of bids, trade contracts,
leases, government contracts, statutory obligations, and other similar
obligations (exclusive of obligations for the payment of borrowed money),
in any case so long as no other Liens are provided except as permitted
under subsection 9.2;
(iv) Liens provided in connection with workers' compensation,
unemployment insurance and other types of social security in the ordinary
course of business, so long as no foreclosure, sale or similar proceedings
have been commenced with respect thereto;
(v) Liens constituted by the delivery of an appeal bond posted with a
court in connection with litigation to which the Company or a Subsidiary is
subject, so long as no other Liens are provided except as permitted under
subsection 9.2;
(vi) any attachment or judgment Lien not constituting an Event of
Default under subsection 10.8;
(vii) Liens 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 (a) are not yet overdue or
(b) for amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of 10 days) are being contested in good
faith by appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have
been made for any such contested amounts, and (2) in the case of a Lien
with respect to any portion of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral on
account of such Lien;
(viii) 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 Company or
Subsidiary, provided that all such Liens only secure (a) amounts not yet
overdue or (b) amounts that are overdue and that (in the case of any such
amounts overdue for a period in excess of 10 days) are being contested in
good faith by appropriate proceedings, so long as (1) such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall
have been made for any such contested amounts, and (2) in the case of a
Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(ix) Liens granted pursuant to the Collateral Documents;
(x) Liens in favour of the Company or a Subsidiary Guarantor on assets
of any Subsidiary of the Company;
26
(xi) any interest or title of a lessor under any Capital Lease,
provided that such Liens do not extend to any property or assets which are
not leased property subject to such Capital Lease; and
(xii) Liens incidental to current operations which have not at such
time been filed pursuant to Applicable Law against the Company's or a
Subsidiary Guarantor's assets, or which relate to obligations not due or
delinquent.
"Permitted Holders" means The Sterling Group, L.P., Genstar Capital,
L.P., Perry Strategic Capital Inc., Xxxxxxxx Group, Inc., and their respective
Affiliates (in each case, other than portfolio companies thereof).
"Permitted Joint Venture Investment" means a Joint Venture in which
Company or a Subsidiary Guarantor (a) owns at least 30% of the ownership
interests, and (b) has the right to receive a percentage of the profits or
distributions at least equal to the percentage of its ownership interest.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subclauses thereof)
and agencies or other administrative or regulatory bodies thereof.
"Pledge Agreement" means the Holdings Pledge Agreement, the Company
Pledge Agreement, Subsidiary Pledge Agreement, and any other share pledge
agreement in substantially similar form executed and delivered from time to time
under this Agreement.
"Pledged Collateral" means, collectively, the "Pledged Collateral" as
defined in the Holdings Pledge Agreement, the Company Pledge Agreement, and the
Subsidiary Pledge Agreements.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Prime Rate" means, for any day, the greater of:
(i) the rate of interest per annum established from time to time by
Administrative Agent as the reference rate of interest for the
determination of interest rates that Administrative Agent will charge to
commercial customers in Canada for Cdn. dollar demand loans in Canada; and
(ii) the rate of interest per annum equal to the average annual yield
rate for one month Cdn. dollar Bankers' Acceptances (expressed for such
purpose as a yearly rate per annum ) which rate is shown on the display
referred to as the "CDOR Page" (or any display substituted therefor) of
Reuters Monitor Money Rates Service at 10:00 a.m.
27
(Toronto time) on such day or, if such day is not a Business Day, on the
immediately preceding Business Day, plus 1.0% per annum.
"Prime Rate Loans" means Loans in Canadian Dollars bearing interest at
rates determined by reference to the Prime Rate as provided in subsection 2.2A.
"Proceedings" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.
"Pro Rata Share" means
(i) with respect to all payments, computations and other matters
relating to the Term Loan Commitment or the Term Loans of any Lender, the
percentage obtained by dividing (x) the Term Loan Exposure of that Lender
by (y) the aggregate Term Loan Exposure of all Lenders,
(ii) with respect to all payments, computations and other matters
relating to the Revolving Loan Commitment or the Revolving Loans of any
Lender or any Letters of Credit issued or participations therein deemed
purchased by any Lender or any assignments of any Swing Line Loans deemed
purchased by any Lender, the percentage obtained by dividing (x) the
Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan
Exposure of all Lenders, and
(iii) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the Term Loan Exposure of
that Lender plus the Revolving Loan Exposure of that Lender by (y) the sum
of the aggregate Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders,
in any such case as the applicable percentage may be adjusted by assignments
permitted pursuant to subsection 12.1.
The initial Pro Rata Share of each Lender for purposes of each of
clauses (i), (ii), and (iii) of the preceding sentence is set forth opposite the
name of that Lender in Schedule 2.1 annexed hereto.
"RBC" has the meaning assigned to that term in the recitals to this
Agreement.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iii)(d).
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Federal Reserve Board, as in
effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 4.3B.
28
"Related Documents" means, collectively, the Acquisition Agreement,
the Advisory Services Agreement, the Articles of Amalgamation, the Holdings
Certificate of Designations and the Senior Note Indenture.
"Release" means any intentional or unintentional release, spill,
emission, leaking, pumping, pouring, injection, escaping, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Materials into
the indoor or outdoor environment (including the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the air,
soil, surface water or groundwater.
"Request for Issuance" means a request for the issuance of a Letter of
Credit substantially in the form of Exhibit III annexed hereto.
"Requisite Class Lenders" means, at any time of determination (i) for
the Class of Lenders having Revolving Loan Exposure, Lenders having or holding
more than 66-2/3% of the aggregate Revolving Loan Exposure of all Lenders, and
(ii) for the Class of Lenders having Term Loan Exposure, Lenders having or
holding more than 66-2/3% of the aggregate Term Loan Exposure of all Lenders.
"Requisite Lenders" means Lenders having or holding more than 50% of
the sum of the aggregate Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders.
"Restricted Junior Payment" means:
(i) any dividend or other distribution, direct or indirect, on account
of any shares of any class of stock of Company or its Subsidiaries now or
hereafter outstanding, except a dividend payable solely in shares of that
class of stock to the holders of that class,
(ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares
of any class of stock of Company or its Subsidiaries now or hereafter
outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of stock of Company or its Subsidiaries now or hereafter outstanding,
and
(iv) any voluntary or optional payment or prepayment of principal of,
premium, if any, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment by the
Company or its Subsidiaries unless it is with respect to (I) Indebtedness
that is included in Consolidated Total Senior Debt, or (II) Indebtedness
that is permitted by subclauses 9.1(ii), (iii), (v) and (vii),
29
other than in any case those made to the Company or a Subsidiary Guarantor. For
certainty, neither (A) the issuance of any exchange notes containing
substantially identical terms (except that such exchange notes will not contain
terms with respect to transfer restrictions or the accrual of liquidated
damages) to the Senior Notes exchanged for such exchange notes, as contemplated
by the Senior Note Indenture, nor (B) the acquisition and/or retirement of such
Senior Notes in connection with any such exchange (and not involving any payment
in cash), shall constitute a Restricted Junior Payment.
"Revolving Lender" means a Lender that has a Revolving Loan Exposure.
"Revolving Loan Commitment" means the commitment of a Revolving Lender
to make Revolving Loans to Company pursuant to subsection 2.1A(ii), and in the
case of the Swing Line Lender, to make Swing Line Loans pursuant to subsection
2.1A(iii), and in the case of each other Revolving Lender, to purchase
assignments of Swing Line Loans pursuant to subsection 2.1A(iii), and "Revolving
Loan Commitments" means such commitments of all Revolving Lenders in the
aggregate.
"Revolving Loan Commitment Termination Date" means November 26, 2008.
"Revolving Loan Exposure", with respect to any Revolving Lender,
means, as of any date of determination:
(i) prior to the termination of the Revolving Loan Commitments, that
Lender's Revolving Loan Commitment, and
(ii) after the termination of the Revolving Loan Commitments, the sum
of:
(a) the aggregate outstanding principal amount of the Revolving
Loans of that Lender, including the aggregate face amount of all
outstanding Bankers' Acceptances accepted by that Lender, and the
aggregate face amount of all outstanding BA Equivalent Advances, in
each case made by that Lender under the Revolving Loan Commitment,
plus
(b) in the event that Lender is an Issuing Lender, the aggregate
Letter of Credit Usage in respect of all Letters of Credit issued by
that Lender (in each case net of any participations purchased by other
Lenders in such Letters of Credit or in any unreimbursed drawings
thereunder), plus
(c) the aggregate amount of all participations purchased by that
Lender in any outstanding Letters of Credit or any unreimbursed
drawings under any Letters of Credit, plus
(d) in the case of Swing Line Lender, the aggregate outstanding
principal amount of all Swing Line Loans (net of any assignments
thereof purchased by other Revolving Lenders), plus
30
(e) the aggregate amount of all assignments purchased by that
Lender in any outstanding Swing Line Loans.
"Revolving Loans" means the Loans made by Revolving Lenders to Company
pursuant to subsection 2.1A(ii), by Swing Line Lender pursuant to subsection
2.1A(iii), and by Revolving Lenders in connection with Refunded Swing Line Loans
pursuant to subsection 2.1A(iii).
"Rollover" means, with respect to Bankers' Acceptances, the issuance
of new Bankers' Acceptances or the making of new BA Equivalent Advances (subject
to the provisions hereof) in respect of all or any portion of Bankers'
Acceptances (or BA Equivalent Advances made in lieu thereof) maturing at the end
of the BA Interest Period applicable thereto, all in accordance with Section
2.2C and Section 3, in each case, under the same credit facility under which the
maturing Loan was made.
"Schedule I Lender" means a Lender which is a Canadian chartered bank
listed on Schedule I to the Bank Act (Canada).
"Schedule II Lender" means a Lender which is a Canadian chartered bank
listed on Schedule II to the Bank Act (Canada).
"Schedule II Reference Lenders" means up to two Schedule II Lenders or
Schedule III Lenders which are designated as such by Administrative Agent and
Company from time to time (it being agreed that Administrative Agent and Company
may at any time terminate the designation of a Lender as a Schedule II Reference
Lender and designate another Schedule II Lender or Schedule III Lender as a
Schedule II Reference Lender in its place by delivery to the Lenders of a
written notification to such effect executed by Administrative Agent), provided
that if a Person ceases to be a Lender hereunder, then such Person shall
thereupon cease to be a Schedule II Reference Lender without further action.
"Schedule III Lender" means a Lender which is an authorized foreign
bank listed on Schedule III to the Bank Act (Canada).
"Secured Swap Obligations" means all indebtedness, obligations and
liabilities of Company or any Subsidiary Guarantor under any Hedge Agreements
entered into by Company or any Subsidiary Guarantor with any Lender or its
Affiliate at any time on or after the Closing Date (regardless of whether such
Lender ceases to be a Lender after such Lender Hedge Agreements are entered
into), but excluding, for certainty, any Lender Hedge Agreements entered into by
Company or any Subsidiary Guarantor with any Lender after such Lender's
Commitments have been fully cancelled in accordance with the terms hereof or
after such Lender has assigned all of its rights to the credit facilities
established hereby in accordance with subsection 12.1B.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness,
31
secured or unsecured, convertible, subordinated, certificated or uncertificated,
or otherwise, or in general any instruments commonly known as "securities" or
any certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Securities Act" means the United States Securities Act of 1933, as
amended from time to time, and any successor statute.
"Sellers" means Norama, Ltd. an Alberta corporation, and NAEL.
"Senior Note Indenture" means the indenture dated November 26, 2003
pursuant to which the Senior Notes are issued, as such indenture may be amended
from time to time to the extent permitted under subsection 9.12.
"Senior Notes" means the U.S.$200,000,000 in aggregate principal
amount of Senior Notes due 2011 of Company issued pursuant to the Senior Note
Indenture, and any exchange notes containing substantially identical terms
issued as contemplated in the Senior Note Indenture (except that such exchange
notes will not contain terms with respect to transfer restrictions or the
accrual of liquidated damages).
"Solvent", with respect to any Person, means that as of the date of
determination both:
(i) (a) the then fair saleable value of the property of such Person is
(1) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (2) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing
debts as they become absolute and due considering all financing
alternatives and potential asset sales reasonably available to such Person,
(b) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction, and (c) such Person
does not intend to incur, or believe (nor should it reasonably believe)
that it will incur, debts beyond its ability to pay such debts as they
become due; and
(ii) such Person is "solvent" within the meaning given that term and
similar terms under Applicable Laws (if any) relating to fraudulent
transfers and conveyances.
For purposes of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Sterling" means The Sterling Group, L.P., a Texas limited
partnership.
"Subject Lender" has the meaning assigned to that term in subsection
2.8.
"Subsidiary", with respect to any Person, means any corporation,
partnership, trust, limited liability company, association, Joint Venture or
other business entity of which more than 50% of the total voting power of shares
of stock or other ownership interests entitled
32
(without regard to the occurrence of any contingency) to vote in the election of
the members of the Governing Body is at the time owned or controlled, directly
or indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof. Unless the context indicates otherwise,
"Subsidiary" means a Subsidiary of Company.
"Subsidiary Guarantee" means the Subsidiary Guarantee executed and
delivered by Subsidiaries of Company on the Closing Date and to be joined by
additional Subsidiaries of Company from time to time thereafter in accordance
with subsection 8.9, substantially in the form of Exhibit XI annexed hereto, as
such Subsidiary Guarantee may hereafter be amended, supplemented or otherwise
modified from time to time.
"Subsidiary Guarantor" means Acquisition Co., NACG (and upon the
Amalgamation, Amalco), Finance Co., North American Construction Ltd., North
American Caisson Ltd., North American Engineering Inc., North American
Enterprises Ltd., North American Industries Inc., North American Maintenance
Ltd., North American Mining Inc., North American Pipeline Inc., North American
Road Inc., North American Services Inc., North American Site Services Inc.,
Xxxxxxxxx Pile Driving Inc., North American Site Development Ltd., and any other
Subsidiary of Company that executes and delivers a counterpart of, or joinder
agreement in respect of, the Subsidiary Guarantee on the Closing Date or from
time to time thereafter pursuant to subsection 8.9.
"Subsidiary Pledge Agreements" means the Securities Pledge Agreements
executed and delivered by any Subsidiary Guarantor on or after the Closing Date,
substantially in the form of Exhibit XVI annexed hereto, as such Subsidiary
Pledge Agreements may thereafter be amended, supplemented or otherwise modified
from time to time in accordance herewith.
"Supplemental Collateral Agent" has the meaning assigned to that term
in subsection 11.1B.
"Swap Lender" means any Lender or its Affiliate that enters into a
Lender Hedge Agreement at any time on or after the Closing Date (regardless of
whether such Swap Lender ceases to be a Lender after such Lender Hedge Agreement
is entered into), but excluding, for certainty, any Lender Hedge Agreement
entered into by a Lender or its Affiliate after its Commitments have been fully
cancelled in accordance with the terms hereof or after it has assigned all of
its rights under the credit facilities established hereby in accordance with
subsection 12.1B.
"Swing Line Account" has the meaning assigned to that term in
subclause 2.1A(iii)(b).
"Swing Line Lender" means RBC, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.
"Swing Line Loan Subcommitment" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(iii).
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"Swing Line Loans" means the Prime Rate Loans made by Swing Line
Lender to Company pursuant to subsection 2.1A(iii).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness for
borrowed money or Capital Leases of such Person (without regard to accounting
treatment).
"Taxes" means all taxes, levies, imposts, stamp taxes, duties, fees,
deductions, withholdings, charges, compulsory loans or restrictions or
conditions resulting in a charge which are imposed, levied, collected, withheld
or assessed by any country or political subdivision or taxing authority thereof
now or at any time in the future, together with interest thereon and penalties,
charges or other amounts with respect thereto, if any, and "Tax" and "Taxation"
shall be construed accordingly.
"Term Loan Commitment" means the commitment of a Lender to make a Term
Loan to Company pursuant to subsection 2.1A(i), and "Term Loan Commitments"
means such commitments of all Lenders in the aggregate.
"Term Loan Exposure", with respect to any Lender, means, as of any
date of determination:
(i) prior to the funding of the Term Loans, that Lender's Term Loan
Commitment, and
(ii) after the funding of the Term Loans, the aggregate outstanding
principal amount of the Term Loans of that Lender, including the aggregate
face amount of all outstanding Bankers' Acceptances accepted by that
Lender, and the aggregate face amount of all outstanding BA Equivalent
Advances, in each case made by that Lender under the Term Loan Commitment.
"Term Loans" means the Loans made by Lenders to Company pursuant to
subsection 2.1A(i), whether by way of Prime Rate Loans or Bankers' Acceptances.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the aggregate principal amount of all outstanding
Revolving Loans including, for certainty, the face amount of all outstanding
Bankers' Acceptances and BA Discount Notes made under the Revolving Loan
Commitment, and the Letter of Credit Usage.
"Transaction Costs" means the fees, costs and expenses payable by
Holdings, Company or Acquisition Co. on or before the Closing Date in connection
with the transactions contemplated by the Loan Documents and the Related
Documents.
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"U.S. Dollars" and the sign "U.S.$" mean the lawful money of the
United States of America.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement.
A. GAAP. Wherever in this Agreement reference is made to "generally
accepted accounting principles" or "GAAP", such reference shall be deemed to be
to the recommendations at the relevant time of the Canadian Institute of
Chartered Accountants, or any successor institute, applicable on a consolidated
basis (unless otherwise specifically provided or contemplated herein to be
applicable on an unconsolidated basis) as at the date on which such calculation
is made or required to be made in accordance with such principles. Where the
character or amount of any asset or liability or item of revenue or expense or
amount of equity is required to be determined, or any consolidation or other
accounting computation is required to be made for the purpose of this Agreement
or any other Loan Document, such determination or calculation shall, to the
extent applicable and except as otherwise specified herein or as otherwise
agreed in writing by the parties, be made in accordance with generally accepted
accounting principles applied on a consistent basis.
B. Consequential. Except as otherwise expressly provided in this Agreement,
all accounting terms not otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP. Financial statements and other
information required to be delivered by Company to Administrative Agent pursuant
to clauses 8.1(ii), 8.1(iii) and 8.1(ix) shall be prepared in accordance with
GAAP as in effect at the time of such preparation (and delivered together with
the reconciliation statements provided for in subsection 8.1(v)). Calculations
in connection with the definitions, covenants and other provisions of this
Agreement shall utilize GAAP as in effect on the date of determination, applied
in a manner consistent with that used in preparing the financial statements
referred to in subsection 7.3. If at any time any change in GAAP would affect
the computation of any financial ratio or requirement set forth in any Loan
Document, and Company, Administrative Agent or Requisite Lenders shall so
request, Administrative Agent, Lenders and Company shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of Requisite Lenders),
provided that, until so amended, such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein and Company shall
provide to Administrative Agent reconciliation statements provided for in
subsection 8.1(v).
1.3 Other Definitional Provisions and Rules of Construction.
A. Plural. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
B. Section References. References to "Sections" and "subsections" shall be
to Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Section and subsection headings in this Agreement are
included herein for convenience of
35
reference only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
C. Including. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register.
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein and in the
other Loan Documents set forth, (A) each Lender having a Term Loan Commitment
hereby severally agrees to make the Loans as described in subsections 2.1A(i),
(B) each Lender having a Revolving Loan Commitment hereby severally agrees to
make the Loans as described in subsection 2.1A(ii), (C) Swing Line Lender hereby
agrees to make the Swing Line Loans as described in subsection 2.1A(iii), and
(D) each Lender having a Revolving Loan Commitment hereby severally agrees to
make the Refunded Swing Line Loans as described in subsection 2.1A(iii)(d).
(i) Term Loans. Each Lender that has a Term Loan Commitment severally
agrees to lend to Company on the Closing Date an amount not exceeding its
Pro Rata Share of the aggregate amount of the Term Loan Commitments to be
used for the purposes identified in subsection 2.5A and to be available by
way of Prime Rate Loans and Bankers' Acceptances. The amount of each
Lender's Term Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate amount of the Term Loan Commitments is
Cdn.$50,000,000, provided that the Term Loan Commitments of Lenders shall
be adjusted to give effect to any assignments of the Term Loan Commitments
pursuant to subsection 12.1B. Each Lender's Term Loan Commitment shall
expire immediately and without further action on December 29, 2003 if Term
Loans are not made on or before that date. Company may make only one
borrowing under the Term Loan Commitments. Amounts borrowed under this
subsection 2.1A(i) and subsequently repaid or prepaid may not be
reborrowed.
(ii) Revolving Loans. Each Revolving Lender severally agrees, subject
to the limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend to
Company from time to time during the period from the Closing Date to but
excluding the Revolving Loan Commitment Termination Date an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the
Revolving Loan Commitments to be used for the purposes identified in
subsection 2.5B and to be available by way of Prime Rate Loans and Bankers'
Acceptances. The original amount of each Revolving Lender's Revolving Loan
36
Commitment is set forth opposite its name on Schedule 2.1 annexed hereto
and the aggregate original amount of the Revolving Loan Commitments is
Cdn.$70,000,000, provided that the Revolving Loan Commitments of Revolving
Lenders shall be adjusted to give effect to any assignments of the
Revolving Loan Commitments pursuant to subsection 12.1B, and shall be
reduced from time to time by the amount of any reductions thereto made
pursuant to subsection 2.4. Each Revolving Lender's Revolving Loan
Commitment shall expire on the Revolving Loan Commitment Termination Date
and all Revolving Loans and all other amounts owed hereunder with respect
to the Revolving Loans and the Revolving Loan Commitments, shall be paid in
full no later than that date, provided that each Revolving Lender's
Revolving Loan Commitment shall expire immediately and without further
action on December 29, 2003 if the Term Loans are not made on or before
that date. Amounts borrowed under this subsection 2.1A(ii) may be repaid
and reborrowed to but excluding the Revolving Loan Commitment Termination
Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan Commitments
shall be subject to the limitation that in no event shall the Total
Utilization of Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect.
(iii) Swing Line Loans.
(a) General Provisions. Swing Line Lender hereby agrees, subject
to the limitations set forth below with respect to the maximum amount
of Swing Line Loans permitted to be outstanding from time to time, to
make a portion of the Revolving Loan Commitments available to Company
from time to time during the period from the Closing Date to but
excluding the Revolving Loan Commitment Termination Date by making
Swing Line Loans to Company in an aggregate amount not exceeding the
amount of the Swing Line Loan Subcommitment to be used for the
purposes identified in subsection 2.5B, notwithstanding the fact that
such Swing Line Loans, when aggregated with Swing Line Lender's
outstanding Revolving Loans and Swing Line Lender's Pro Rata Share of
the Letter of Credit Usage then in effect, may exceed Swing Line
Lender's Revolving Loan Commitment. The original amount of the Swing
Line Loan Subcommitment is Cdn.$5,000,000, provided that any reduction
of the Revolving Loan Commitments made pursuant to subsection 2.4 that
reduces the aggregate Revolving Loan Commitments to an amount less
than the then current amount of the Swing Line Loan Subcommitment
shall result in an automatic corresponding reduction of the Swing Line
Loan Subcommitment to the amount of the aggregate Revolving Loan
Commitments, as so reduced, without any further action on the part of
Company, Administrative Agent or Swing Line Lender. The Swing Line
Loan Subcommitment shall expire on the Revolving Loan Commitment
Termination Date and all Swing Line Loans and all other amounts owed
hereunder with respect to the Swing Line Loans shall be paid in full
no later than that date, provided that the Swing Line Loan
Subcommitment shall expire immediately and without further action on
December 29, 2003 if the
37
Term Loans are not made on or before that date. Amounts borrowed under
this subsection 2.1A(iii) may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Swing Line Loans and the Swing Line Loan Subcommitment shall be
subject to the limitation that in no event shall the Total Utilization
of Revolving Loan Commitments at any time exceed the Revolving Loan
Commitments then in effect.
(b) Swing Line Account. Swing Line Lender will establish at its
Funding Branch of Account a Cdn. Dollar account of Company, referred
to herein as a "Swing Line Account". The Swing Line Account shall
record the day to day banking business of Company conducted through
the Swing Line Lender. If, at the end of any Business Day, the balance
in the Swing Line Account:
(1) is a credit in excess of Cdn.$100,000, Swing Line Lender
may apply the amount of the credit or any part thereof rounded
down to the nearest Cdn.$50,000, as applicable, as a repayment of
any Prime Rate Loans owing to the Swing Line Lender under the
Swing Line; or
(2) is a debit, the Swing Line Lender shall make available a
Swing Line Loan (to the extent that such Advance would not, when
added to the outstanding Swing Line Loans, exceed the Swing Line
Loan Commitment), in an amount rounded up to the nearest Cdn.
$50,000, as the case may be, to place Company in a minimum net
credit position of zero.
(c) Swing Line Loans by Request. In addition to the automatic
advance of Swing Line Loans pursuant to clause 2.1A(iii)(b)(2) above,
Swing Line Lender also agrees to make Swing Line Loans available
pursuant to a Notice of Borrowing delivered as provided herein.
(d) Swing Line Loan Prepayment with Proceeds of Other Revolving
Loans. With respect to any Swing Line Loans that have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing
Line Lender may, on the first Business Day of each week, and at any
other time in its sole and absolute discretion, deliver a notice to
the Lenders holding the Revolving Loan Commitments requiring Revolving
Lenders to make Revolving Loans that are Prime Rate Loans on such
Funding Date in an amount equal to the amount of such Swing Line Loans
(the "Refunded Swing Line Loans") outstanding on the date such notice
is given. Company hereby authorizes the giving of any such notice and
the making of any such Revolving Loans. Anything contained in this
Agreement to the contrary notwithstanding, (1) the proceeds of such
Revolving Loans made by Revolving Lenders other than Swing Line Lender
shall be immediately delivered by Administrative Agent to Swing Line
Lender (and not to
38
Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans by depositing such proceeds in the Swing Line
Account, and (2) on the day such Revolving Loans are made, Swing Line
Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan made by Swing
Line Lender, and such portion of the Swing Line Loans deemed to be so
paid shall no longer be outstanding as Swing Line Loans of Swing Line
Lender but shall instead constitute part of Swing Line Lender's
outstanding Revolving Loans. If any portion of any such amount paid
(or deemed to be paid) to Swing Line Lender should be recovered by or
on behalf of Company from Swing Line Lender in any bankruptcy
proceeding, in any assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared
among all Lenders in the manner contemplated by subsection 12.5.
(e) Swing Line Loan Assignments. If for any reason (1) Revolving
Loans are not made upon the request of Swing Line Lender as provided
in the immediately preceding paragraph in an amount sufficient to
repay any amounts owed to Swing Line Lender in respect of any
outstanding Swing Line Loans or (2) the Revolving Loan Commitments are
terminated at a time when any Swing Line Loans are outstanding, each
Revolving Lender shall be deemed to, and hereby agrees to, have
purchased an assignment of such outstanding Swing Line Loans in an
amount equal to its Pro Rata Share (calculated, in the case of the
foregoing clause (2), immediately prior to such termination of the
Revolving Loan Commitments) of the unpaid amount of such Swing Line
Loans together with accrued interest thereon. Upon one Business Day's
notice from Swing Line Lender, each Revolving Lender shall deliver to
Swing Line Lender an amount equal to its respective assignment in same
day funds at the Funding and Payment Office. In order to further
evidence such assignment (and without prejudice to the effectiveness
of the assignment provisions set forth above), each Revolving Lender
agrees to enter into an Assignment Agreement at the request of Swing
Line Lender in form and substance reasonably satisfactory to Swing
Line Lender. In the event any Revolving Lender fails to make available
to Swing Line Lender the amount of such Revolving Lender's assignment
as provided in this paragraph, Swing Line Lender shall be entitled to
recover such amount on demand from such Revolving Lender together with
interest thereon at the rate customarily used by Swing Line Lender for
the correction of errors among banks for three Business Days and
thereafter at the Prime Rate. In the event Swing Line Lender receives
a payment of any amount in which other Revolving Lenders have
purchased assignments as provided in this paragraph, Swing Line Lender
shall promptly distribute to each such other Revolving Lender its Pro
Rata Share of such payment.
(f) Revolving Lenders' Obligations. Anything contained herein to
the contrary notwithstanding, each Revolving Lender's obligation to
make Revolving Loans for the purpose of repaying any Refunded Swing
Line Loans pursuant to
39
subsection 2.1A(iii)(d) and each Revolving Lender's obligation to
purchase an assignment of any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph shall be absolute and unconditional
and shall not be affected by any circumstance, including (1) any
set-off, counterclaim, recoupment, defense or other right which such
Revolving Lender may have against Swing Line Lender, Company or any
other Person for any reason whatsoever; (2) the occurrence or
continuance of an Event of Default or a Potential Event of Default;
(3) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or
any of its Subsidiaries; (4) any breach of this Agreement or any other
Loan Document by any party thereto; or (5) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing.
(g) Indemnification. Each Revolving Lender agrees to indemnify
Swing Line Lender (to the extent not reimbursed by Company), rateably
according to its Pro Rata Share from and against any and all losses
and claims of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Swing Line Lender in any way
relating to or arising out of any Swing Line Loans, provided that no
Lender shall be liable for any portion of such losses or claims
resulting from the Swing Line Lender's gross negligence or willful
misconduct.
B. Borrowing Mechanics. Term Loans or Revolving Loans made on any Funding
Date by way of Prime Rate Loans (other than Swing Line Loans) or Bankers'
Acceptances (other than Revolving Loans made pursuant to a request by Swing Line
Lender pursuant to subsection 2.1A(iii)(d), or Revolving Loans made pursuant to
subsection 4.3C) shall be in an aggregate minimum amount of Cdn.$1,000,000 and
multiples of Cdn.$100,000 in excess of that amount.
Swing Line Loans made on any Funding Date pursuant to a Notice of
Borrowing shall be in an aggregate minimum amount of Cdn.$1,000,000 and
multiples of Cdn.$100,000 in excess of that amount. Swing Line Loans made
pursuant to subclause 2.1A(iii)(b) do not require a notice of Borrowing, and are
not subject to minimum amounts except as set out in that subclause.
Prime Rate Loans made by Revolving Lenders weekly (or at the request
of Swing Line Lender) pursuant to subclause 2.1A(iii)(d) shall be in minimum
amounts of Cdn.$500,000 and multiples of Cdn.$100,000 in excess thereof.
Whenever Company desires that Lenders make Term Loans or Revolving
Loans by way of Prime Rate Loans (other than Swing Line Loans), it shall deliver
to Administrative Agent a duly executed Notice of Borrowing no later than 11:00
a.m. (Toronto time) at least one Business Day in advance of the proposed Funding
Date.
Whenever Company desires that Lenders make Term Loans or Revolving
Loans by way of Bankers' Acceptances, it shall deliver to Administrative Agent a
duly executed Notice
40
of Borrowing no later than 11:00 a.m. (Toronto time) at least three Business
Days in advance of the proposed Funding Date.
Whenever Company desires that Swing Line Lender make a Swing Line Loan
pursuant to clause 2.1A(iii)(c), it shall deliver to Swing Line Lender, with a
copy to Administrative Agent, a duly executed Notice of Borrowing no later than
11:00 a.m. (Toronto time) on the proposed Funding Date (which for greater
certainty may be delivered by facsimile transmission).
In lieu of delivering a Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B, provided that such notice shall be
promptly confirmed in writing by delivery of a duly executed Notice of Borrowing
to Administrative Agent on or before the applicable Funding Date (which for
greater certainty may be delivered by facsimile transmission).
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by an Officer or
other person authorized to borrow on behalf of Company or for otherwise acting
in good faith under this subsection 2.1B or under subsection 2.2C, and upon
funding of Loans by Lenders, and upon Conversion or Rollover of the applicable
basis for determining the interest rate with respect to any Loans pursuant to
subsection 2.2C, in each case in accordance with this Agreement, pursuant to any
such telephonic notice Company shall have effected Loans or a Conversion or
Rollover, as the case may be, hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans requested by Company in the event that any of the matters to which Company
is required to certify in the applicable Notice of Borrowing is no longer true
and correct as of the applicable Funding Date. The acceptance by Company of the
proceeds of any Loans (including Swing Line Loans) shall constitute a
re-certification by Company, as of the applicable Funding Date, as to the
matters to which Company is required to certify in any Notice of Borrowing.
Except as set out in subsection 2.6C, a Notice of Borrowing for, or a
Notice of Conversion/Rollover for Conversion to, or Rollover of, Bankers'
Acceptances (or telephonic notice in lieu thereof) shall be irrevocable, and
Company shall be bound to make a borrowing or to effect a Conversion or Rollover
in accordance therewith.
Notwithstanding the foregoing provisions of this subsection 2.1B, no
Bankers' Acceptances may be made and no Prime Rate Loan may be converted into
Bankers' Acceptances until the earlier of the 30th day after the Closing Date
and the date specified by Administrative Agent to Company on which the primary
syndication of the Loans has been completed.
C. Disbursement of Funds. All Term Loans and Revolving Loans (other than
Swing Line Loans made by Swing Line Lender) shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares, it being
understood that neither Administrative Agent nor any Lender shall be responsible
for any default by any other Lender in that other Lender's obligation to make a
Loan requested hereunder nor shall the Commitment of
41
any Lender to make the particular type of Loan requested be increased or
decreased as a result of a default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder.
Promptly after receipt by Administrative Agent of a Notice of
Borrowing by way of Prime Rate Loans (other than Swing Line Loans) pursuant to
subsection 2.1B, or telephonic notice in lieu thereof, Administrative Agent
shall notify each Lender for that type of Loan of the proposed borrowing. Each
such Lender shall make the amount of its Loan available to Administrative Agent
not later than 12:00 noon (Toronto time) on the applicable Funding Date in same
day funds at the Funding and Payment Office. Except as provided in subsection
2.1A(iii) with respect to Revolving Loans used to repay Refunded Swing Line
Loans, or subsection 4.3B with respect to Revolving Loans used to reimburse any
Issuing Lender for the amount of a drawing under a Letter of Credit issued by
it, upon satisfaction or waiver of the conditions precedent specified in
subsections 6.1 (in the case of Loans made on the Closing Date) and 6.2 (in the
case of all Loans), Administrative Agent shall make the proceeds of such Loans
available to Company on the applicable Funding Date by causing an amount of same
day funds equal to the proceeds of all such Loans received by Administrative
Agent from Lenders to be credited to an account of Company maintained by Company
with Administrative Agent at the Funding and Payment Office by 12:00 noon on the
Funding Date, or as otherwise instructed by Company in writing and acceptable to
Administrative Agent.
After receipt by Swing Line Lender of a Notice of Borrowing by way of
Swing Line Loans pursuant to subsection 2.1A(iii)(c), or telephonic notice in
lieu thereof, Swing Line Lender shall make the amount of its Swing Line Loan
available to Company not later than 12:00 noon (Toronto time) on the applicable
Funding Date, in each case in same day funds to be credited to an account of
Company maintained by Company with Swing Line Lender at the Funding and Payment
Office of Swing Line Lender.
Unless Administrative Agent shall have been notified by any Lender
prior to a Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Prime Rate Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Prime Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Prime Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender
42
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Company may have against any Lender as a result of any default by
such Lender hereunder.
D. The Register. Administrative Agent shall maintain at its address
referred to in subsection 12.8 a register for the recordation of, and shall
record, the names and addresses of Lenders and the Term Loan Commitment,
Revolving Loan Commitment, Swing Line Loan Subcommitment, Term Loans, Revolving
Loans and Swing Line Loans of each Lender from time to time (the "Register").
Company, Administrative Agent and Lenders shall deem and treat the Persons
listed as Lenders in the Register as the holders and owners of the corresponding
Commitments and Loans listed therein for all purposes hereof; all amounts owed
with respect to any Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof; and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans. Each Lender shall record on its internal records the
amount of its Loans and Commitments and each payment in respect hereof, and any
such recordation shall be prima facie evidence of the contents thereof, absent
manifest error, subject to the entries in the Register, which shall, absent
manifest error, govern in the event of any inconsistency with any Lender's
records. Failure to make any recordation in the Register or in any Lender's
records, or any error in such recordation, shall not affect any Loans or
Commitments or any Obligations in respect of any Loans.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsection 2.6, each
Prime Rate Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Prime Rate.
Subject to the provisions of subsection 2.6, each Swing Line Loan
shall bear interest on the unpaid principal amount thereof from the date made
through maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Prime Rate.
The applicable basis for determining the rate of interest with respect
to any Term Loan or any Revolving Loan shall be selected by Company initially at
the time a Notice of Borrowing is given with respect to such Loan pursuant to
subsection 2.1B (subject to the last sentence of subsection 2.1B), and the basis
for determining the interest rate with respect to any Term Loan or any Revolving
Loan may be changed from time to time pursuant to subsection 2.2C (subject to
the last sentence of subsection 2.1B). If on any day a Term Loan or Revolving
Loan is outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Prime Rate.
43
(i) Subject to the provisions of subsections 2.2D, 2.2I and 2.6, the
Term Loans and the Revolving Loans shall bear interest or accrue fees
through maturity as follows:
(a) if a Prime Rate Loan (other than a Swing Line Loan), then
interest at the sum of the Prime Rate plus 2.0% per annum;
(b) if a Swing Line Loan, then interest at the sum of the Prime
Rate plus 1.5% per annum, for the sole account of Swing Line Lender;
and
(c) if a Bankers' Acceptance, then interest and fees as provided
in Section 3.
B. Interest Payments. Subject to the provisions of subsection 2.2D,
interest on each Prime Rate Loan (including Swing Line Loans) shall be payable
monthly in arrears on each Interest Payment Date in respect of the immediately
preceding calendar month based on the actual number of days in such month, upon
any prepayment of that Loan (to the extent accrued on the amount being prepaid),
and at maturity (including final maturity), provided that in the event any
Revolving Loans that are Prime Rate Loans are prepaid pursuant to subsection
2.4B(i), interest accrued on such Loans through the date of such prepayment
shall be payable on the next succeeding Interest Payment Date applicable to
Prime Rate Loans (or, if earlier, at final maturity).
C. Conversion or Rollover. Subject to the provisions of Section 3, Company
shall have the option:
(i) to convert at any time all or any part of its outstanding Term
Loans or Revolving Loans (other than Swing Line Loans) equal to
Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount from
Prime Rate Loans to an issue of Bankers' Acceptances, or from Bankers'
Acceptances to Prime Rate Loans;
(ii) upon the expiration of a BA Interest Period applicable to
Bankers' Acceptances, to rollover all or any portion of such Loan equal to
Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount as a
new issue of Bankers' Acceptances;
provided that an issue of Bankers' Acceptances may only be converted into a
Prime Rate Loan on the expiration date of the BA Interest Period applicable
thereto.
Company shall deliver a duly executed Notice of Conversion/Rollover to
Administrative Agent no later than 11:00 a.m. (Toronto time) at least one
Business Day in advance of the proposed Conversion date (in the case of a
Conversion to a Prime Rate Loan) and at least three Business Days in advance of
the proposed Conversion/Rollover date (in the case of a Conversion to, or a
Rollover of, Bankers' Acceptances). In lieu of delivering a Notice of
Conversion/Rollover, Company may give Administrative Agent telephonic notice by
the required time of any proposed Conversion/Rollover under this subsection
2.2C, provided that
44
such notice shall be promptly confirmed in writing by delivery of a duly
executed Notice of Conversion/Rollover to Administrative Agent on or before the
proposed Conversion/Rollover date (which for greater certainty may be delivered
by facsimile transmission). Administrative Agent shall notify each Lender of any
Loan subject to a Notice of Conversion/Rollover. A Conversion or Rollover shall
not be subject to the conditions to making a Loan set out in subsection 6.2.
D. Default Rate. Upon the occurrence and during the continuance of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by Applicable Law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under any Bankruptcy Laws) payable upon demand at a rate that is 2% per annum in
excess of the interest rate otherwise payable under this Agreement with respect
to the applicable Loans (or, in the case of any such fees and other amounts, at
a rate which is 2% per annum in excess of the interest rate otherwise payable
under this Agreement for Prime Rate Loans), provided that (i) in the case of
Bankers' Acceptances, upon the expiration of the BA Interest Period in effect at
the time any such increase in interest rate is effective such Bankers'
Acceptances shall thereupon become Prime Rate Loans and shall thereafter bear
interest payable upon demand at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Prime Rate Loans, and
(ii) subclause 4.3D(i) shall apply in respect of fees payable in respect of
Letters of Credit, and not this subclause 2.2D. Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2D is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.
E. Computation of Interest. Interest on the Loans shall be computed on the
basis of a 365-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of such Loan or, with respect to a Prime Rate Loan being converted
from Bankers' Acceptances, the date of Conversion to such Prime Rate Loan, as
the case may be, shall be included, and the date of payment of such Loan or,
with respect to a Prime Rate Loan being converted to Bankers' Acceptances, the
date of Conversion of such Prime Rate Loan, as the case may be, shall be
excluded, provided that if a Loan is repaid on the same day on which it is made,
one day's interest shall be paid on that Loan.
F. Prima Facie Evidence. Each determination by Administrative Agent (or by
the Issuing Lender as applicable) of the amount of interest, fees or other
amounts due from Company hereunder shall be prima facie evidence of the accuracy
of such determination.
G. Accrual. All interest, fees and other amounts payable by Company
hereunder shall accrue daily, be computed as described herein, and be payable
both before and after demand, maturity, default and judgment.
H. No Merger. To the extent permitted by Applicable Law, the covenant of
Company to pay interest at the rates provided herein shall not merge in any
judgment relating to any obligation of Company to the Lenders or Administrative
Agent and any provision of the
45
Interest Act (Canada) or Judgment Interest Act (Alberta) which restricts any
rate of interest set forth herein shall be inapplicable to this Agreement and to
the extent permitted by Applicable Law is hereby waived by Company.
I. Maximum Rate. No interest or fee to be paid hereunder or under the other
Loan Documents 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 credited to Company for application to any
other Obligations then due and owing (or if no other Obligations are then due
and owing, refunded to Company), so as to be payable at the highest rate
recoverable under Applicable Law. For the purposes of the application of the
Criminal Code (Canada), the effective annual rate of interest shall be
determined in accordance with generally accepted actuarial practices and
principles and in the event of any dispute, a certificate of a Fellow of the
Canadian Institute of Actuaries appointed by Administrative Agent shall be
conclusive for the purpose of such determination.
J. Interest Act Rate Conversion. Whenever a rate of interest hereunder is
calculated on the basis of a year (the "deemed year") which contains fewer days
than the actual number of days in the calendar year of calculation, such rate of
interest shall be expressed as a yearly rate for purposes of the Interest Act
(Canada) by multiplying such rate of interest by the actual number of days in
the calendar year of calculation and dividing it by the number of days in the
deemed year.
K. No Deemed Reinvestment. 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, 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.
2.3 Fees.
A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Revolving Lender in proportion to that Lender's Pro Rata
Share, commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the sum of (i) the
aggregate principal amount of outstanding Revolving Loans including for
certainty, the face amount of all Bankers' Acceptances and BA Discount Notes
outstanding under the Revolving Loan Commitment (but excluding any outstanding
Swing Line Loans) plus (ii) the Letter of Credit Usage, multiplied by .50% per
annum, such commitment fees to be calculated on the basis of a 365-day year and
the actual number of days elapsed and to be calculated quarterly in arrears for
the three month periods ending on March 31, June 30, September 30 and December
31 of each year, and payable on the first Business Day of the month immediately
following each such quarter, commencing on the first such Business Day to occur
after the Closing Date, and on the Revolving Loan Commitment Termination Date.
46
B. Other Fees. Company agrees to pay to Administrative Agent such fees in
the amounts and at the times separately agreed upon between Company and
Administrative Agent.
2.4 Repayments; Voluntary and Mandatory Prepayments; Application of
Proceeds.
A. Scheduled Payments of Term Loans. Company shall make principal payments
on the Term Loans in installments on the dates and in the amounts set forth
below:
-------------------------------------------------
Date Scheduled Repayment (Cdn.$)
-------------------------------------------------
February 29, 2004 $1,500,000
-------------------------------------------------
May 31, 2004 $1,500,000
-------------------------------------------------
August 31, 2004 $1,500,000
-------------------------------------------------
November 30, 2004 $1,500,000
-------------------------------------------------
February 28, 2005 $2,750,000
-------------------------------------------------
May 31, 2005 $2,750,000
-------------------------------------------------
August 31, 2005 $2,750,000
-------------------------------------------------
November 30, 2005 $2,750,000
-------------------------------------------------
February 28, 2006 $2,750,000
-------------------------------------------------
May 31, 2006 $2,750,000
-------------------------------------------------
August 31, 2006 $2,750,000
-------------------------------------------------
November 30, 2006 $2,750,000
-------------------------------------------------
February 28, 2007 $2,750,000
-------------------------------------------------
May 31, 2007 $2,750,000
-------------------------------------------------
August 31, 2007 $2,750,000
-------------------------------------------------
November 30, 2007 $2,750,000
-------------------------------------------------
February 29, 2008 $2,750,000
-------------------------------------------------
May 31, 2008 $2,750,000
-------------------------------------------------
August 31, 2008 $2,750,000
-------------------------------------------------
November 26, 2008 $2,750,000
-------------------------------------------------
provided that the scheduled installments of principal of the Term Loans set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans in accordance with subsection 2.4B(iv), and
provided further that the Term Loans and all other amounts owed hereunder with
respect to the Term Loans shall be paid in full no later than November 26, 2008,
and the final installment payable by Company in respect of the Term Loans on
such date shall be in an amount, if such amount is different from that specified
above, sufficient to repay all amounts owing by Company under this Agreement
with respect to the Term Loans.
B. Repayments and Prepayments; Reductions in Revolving Loan Commitments.
(i) Voluntary Repayments and Prepayments. Company may, upon written or
telephonic notice to Administrative Agent on or prior to 12:00 noon
(Toronto time)on
47
the date of repayment, which notice, if telephonic, shall be promptly
confirmed in writing (which for greater certainty may be delivered by
facsimile transmission), at any time and from time to time, repay without
premium or penalty any Swing Line Loan on any Business Day in whole or in
part in an aggregate minimum amount of Cdn.$1,000,000 and multiples of
Cdn.$100,000 in excess of that amount.
Company may, upon not less than one Business Day's prior written
or telephonic notice to Administrative Agent by 12:00 noon (Toronto time)
on the date required and, if given by telephone, promptly confirmed in
writing to Administrative Agent, who will promptly notify each Lender whose
Loans are to be prepaid of such prepayment, at any time and from time to
time prepay without premium or penalty any Term Loans or Revolving Loans
that are Prime Rate Loans (other than Swing Line Loans) on any Business Day
in whole or in part in an aggregate minimum amount of Cdn.$1,000,000 and
multiples of Cdn.$100,000 in excess of that amount.
Company may, upon not less than three Business Days' prior
written or telephonic notice to Administrative Agent by 12:00 noon (Toronto
time) on the date required and, if given by telephone, promptly confirmed
in writing to Administrative Agent, who will promptly notify each Lender
whose Loans are to be prepaid of such prepayment, at any time and from time
to time prepay, without premium or penalty, any Term Loans or Revolving
Loans that are Bankers' Acceptances on any Business Day in whole or in part
in an aggregate minimum amount of Cdn.$1,000,000 and multiples of
Cdn.$100,000 in excess of that amount, provided that Bankers' Acceptances
may only be prepaid on the expiration of the BA Interest Period.
Notice of repayment or prepayment having been given as aforesaid,
the principal amount of the Loans specified in such notice shall become due
and payable on the date specified for payment therein. Any such voluntary
payment shall be applied as specified in subsection 2.4B(iv).
(ii) Voluntary Reduction of Revolving Loan Commitments. Company
may, upon not less than three Business Days' prior written or telephonic
notice confirmed in writing to Administrative Agent (which for greater
certainty may be delivered by facsimile transmission), or upon such lesser
number of days' prior written or telephonic notice, as determined by
Administrative Agent in its sole discretion, at any time and from time to
time, terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction, provided that any such partial reduction of the Revolving Loan
Commitments shall be in an aggregate minimum amount of Cdn.$1,000,000 and
multiples of Cdn.$100,000 in excess of that amount. Company's notice to
Administrative Agent (who will promptly notify each Revolving Lender of
such notice) shall designate the date (which shall be a Business Day) of
such termination or reduction and the amount of any partial reduction, and
such termination or reduction of the Revolving Loan Commitments shall be
effective on the
48
date specified in Company's notice and shall reduce the Revolving Loan
Commitment of each Revolving Lender proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments; Mandatory Reductions of Revolving Loan
Commitments. The Loans shall be prepaid, and/or the Revolving Loan
Commitments shall be permanently reduced, in the amounts and under the
circumstances set forth below, all such prepayments and/or reductions to be
applied as set forth below or as more specifically provided in subsection
2.4B(iv) and subsection 2.4G:
(a) Prepayments and Reductions From Net Asset Sale Proceeds.
Promptly, but not later than 5 Business Days after the date of receipt
by Company or any of its Subsidiaries of any Net Asset Sale Proceeds
in respect of any Asset Sale, Company shall either:
(1) prepay the Loans and collateralize Bankers' Acceptances,
and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to such Net Asset Sale
Proceeds, or
(2) so long as no Potential Event of Default or Event of
Default shall have occurred and be continuing, deliver to
Administrative Agent an Officer's Certificate setting forth (x)
that portion of such Net Asset Sale Proceeds that Company or such
Subsidiary intends to reinvest in equipment or other productive
assets of the general type used in the business of Company and
its Subsidiaries within 270 days of such date of receipt and (y)
the proposed use of such portion of the Net Asset Sale Proceeds
and such other information with respect to such reinvestment as
Administrative Agent may reasonably request, and Company shall,
or shall cause one or more of its Subsidiaries to, diligently
apply such portion to such reinvestment purposes, provided that,
pending such reinvestment, such portion of the Net Asset Sale
Proceeds shall be applied to prepay outstanding Revolving Loans
(without a reduction in Revolving Loan Commitments) to the full
extent thereof. In addition, Company shall, no later than 270
days after receipt of such Net Asset Sale Proceeds that have not
theretofore been applied to the Obligations or that have not been
so reinvested as provided above, make an additional prepayment of
the Loans (and/or the Revolving Loan Commitments shall be
permanently reduced) in the full amount of all such Net Asset
Sale Proceeds not so applied or not so reinvested.
(b) Prepayments and Reductions from Net Insurance/Condemnation
Proceeds. No later than the first Business Day following the date of
receipt by Administrative Agent or by Company or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds that are
required to be applied as a prepayment pursuant to the provisions of
subsection 8.4C, Company shall prepay the Loans and collateralize
Bankers' Acceptances, and/or the Revolving Loan Commitments shall be
permanently reduced, as provided in subsection 2.4B(iv) and subsection
49
2.4G, as applicable, in an aggregate amount equal to the amount of
such Net Insurance/Condemnation Proceeds.
(c) Prepayments and Reductions Due to Issuance of Equity
Securities. On the date of receipt of the Net Securities Proceeds from
the issuance of any Capital Stock (i) of Holdings or from any capital
contribution to Holdings by any holder of Capital Stock thereof after
the Closing Date, in excess of $2,000,000 in any Fiscal Year, or (ii)
of Company or any of its Subsidiaries, Company shall prepay the Loans
and collateralize Bankers' Acceptances in an aggregate amount equal to
the amount of such Net Securities Proceeds (without reduction of the
Revolving Loan Commitments), all as provided in subsection 2.4B(iv)
and subsection 2.4G, as applicable.
(d) Prepayments and Reductions Due to Issuance of Indebtedness.
On the date of receipt of the Net Securities Proceeds from the
issuance of any Indebtedness of Company or any of its Subsidiaries
after the Closing Date, other than Indebtedness permitted pursuant to
subsection 9.1, Company shall prepay the Loans, and collateralize
Bankers' Acceptances, and/or the Revolving Loan Commitments shall be
permanently reduced, in an aggregate amount equal to the amount of
such Net Securities Proceeds, all as provided in subsection 2.4B(iv)
and subsection 2.4G, as applicable.
(e) Prepayments and Reductions from Consolidated Excess Cash
Flow. In the event that there shall be Consolidated Excess Cash Flow
for any Fiscal Year (commencing with Fiscal Year 2005), Company shall,
no later than 120 days after the end of such Fiscal Year, prepay the
Loans, and collateralize Bankers' Acceptances (without reduction of
the Revolving Loan Commitments), in an aggregate amount equal to 50%
of such Consolidated Excess Cash Flow, all as provided in subsection
2.4B(iv) and subsection 2.4G, as applicable.
(f) Calculations of Net Proceeds Amounts; Additional Prepayments
and Reductions Based on Subsequent Calculations. Concurrently with any
prepayment of the Loans, and collateralization of Bankers'
Acceptances, and/or reduction of the Revolving Loan Commitments
pursuant to subsections 2.4B(iii)(a)-(f), Company shall deliver to
Administrative Agent an Officer's Certificate demonstrating the
calculation of the amount of the applicable Net Asset Sale Proceeds,
Net Insurance/Condemnation Proceeds, Net Securities Proceeds, or
Consolidated Excess Cash Flow, as the case may be, that gave rise to
such prepayment, collateralization and/or reduction. In the event that
Company shall subsequently determine that the actual amount was
greater than the amount set forth in such Officer's Certificate,
Company shall promptly make an additional prepayment of the Loans, or
collateralization of Bankers' Acceptances, in an amount equal to the
amount of such excess, and shall reduce the Revolving Loan Commitments
accordingly, all as provided in subsection 2.4B(iv) and subsection
2.4G, as applicable, and Company shall concurrently therewith deliver
50
to Administrative Agent an Officer's Certificate demonstrating the
derivation of the additional amount resulting in such excess.
(g) Prepayments Due to Reductions of Revolving Loan Commitments
or Due to Insufficient Borrowing Base. Company shall from time to time
prepay first the Swing Line Loans, second the other Revolving Loans
(including collateralization of Bankers' Acceptances), and third,
collateralize Letters of Credit, to the extent necessary so that (A)
the Total Utilization of Revolving Loan Commitments shall not at any
time exceed the Revolving Loan Commitments then in effect, and (B) the
Total Utilization of Revolving Loan Commitments shall not at any time
exceed the Borrowing Base then in effect less the aggregate principal
amount of all outstanding Term Loans including, for certainty, the
face amount of all outstanding Bankers' Acceptances and BA Discount
Notes thereunder.
(iv) Application of Prepayments; Reduction of Revolving Loan
Commitments.
(a) Application of Voluntary Prepayments by Type of Loans and
Order of Maturity. Any voluntary prepayments pursuant to subsection
2.4B(i) shall be applied as specified by Company in the applicable
notice of prepayment, provided that in the event Company fails to
specify the Loans to which any such prepayment shall be applied, such
prepayment shall be applied:
(1) first, to repay outstanding Swing Line Loans to the full
extent thereof, without reduction of Commitments,
(2) second, to repay other outstanding Revolving Loans to
the full extent thereof, including cash collateralizing any
outstanding Bankers' Acceptances issued under the Revolving Loan
Commitments, without reduction of Commitments,
(3) third, to repay outstanding Term Loans to the full
extent thereof, and
(4) fourth, to collateralize Letters of Credit.
Any voluntary prepayments of the Term Loans pursuant to subsection
2.4B(i) shall be applied to reduce the scheduled installments of
principal of the Term Loans set forth in subsection 2.4A on a pro rata
basis (in accordance with the respective outstanding principal amounts
thereof) to each remaining scheduled installment of principal as set
forth in subsection 2.4A.
(b) Application of Mandatory Prepayments by Type of Loans. Except
as provided in subsection 2.4G, any amount required to be applied as a
mandatory prepayment of the Loans, collateralization of Bankers'
Acceptances or Letters of
51
Credit, and/or a reduction of the Revolving Loan Commitments, in any
case pursuant to subsections 2.4B(iii)(a)-(f), shall be applied:
(1) first, to prepay the Term Loans to the full extent
thereof, including cash collateralizing any outstanding Bankers'
Acceptances under the Term Loan Facility,
(2) second, to the extent of any remaining portion of such
amount, to prepay the Swing Line Loans to the full extent thereof
and, to the extent required by the applicable provision of
subsection 2.4B(iii), to permanently reduce the Revolving Loan
Commitments by the amount of such prepayment,
(3) third, to the extent of any remaining portion of such
amount, to prepay other Prime Rate Loans to the full extent
thereof and, to the extent required by the applicable provision
of subsection 2.4B(iii), to further permanently reduce the
Revolving Loan Commitments by the amount of such prepayment, and
(4) fourth, to the extent of any remaining portion of such
amount, to collateralize Bankers' Acceptances under the Revolving
Loan Facility to the full extent thereof and, to the extent
required by the applicable provision of subsection 2.4B(iii), to
further permanently reduce the Revolving Loan Commitments by the
amount so collateralized, effective the date of maturity of the
Bankers' Acceptances so collateralized.
Any mandatory reduction of Revolving Commitments pursuant to this
subsection 2.4 shall be in proportion to each Revolving Lender's Pro
Rata Share.
(c) Application of Mandatory Prepayments of Term Loans to the
Scheduled Installments of Principal Thereof. Any mandatory prepayments
of the Term Loans pursuant to subsection 2.4B(iii) shall be applied to
reduce the scheduled installments of principal of the Term Loans set
forth in subsection 2.4A on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof) to each scheduled
installment of principal of the Term Loans set forth in subsection
2.4A.
(d) Application of Prepayments to Prime Rate Loans and Bankers'
Acceptances. Considering Term Loans and Revolving Loans being prepaid
separately, any prepayment thereof shall be applied first to Prime
Rate Loans to the full extent thereof before application to
collateralization of Bankers' Acceptances or Letters of Credit,
provided that Company shall first deposit the remainder of such
prepayments not applied to prepay Prime Rate Loans in the Collateral
Account pursuant to subsection 2.4E to be applied thereafter to prepay
Bankers' Acceptances having BA Interest Periods expiring on a date or
dates
52
nearest the date of deposit in accordance with this subsection
2.4B(iv), upon expiration of such BA Interest Periods, and second (if
required) to the Collateral Account pursuant to subsection 2.4F to be
applied thereafter to reimburse the Issuing Lender for drawing on
Letters of Credit expiring on a date or dates nearest the date of
deposit in accordance with this subsection 2.4B(iv), upon expiration
of such Letters of Credit.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of principal,
interest, fees and other Obligations shall be made in Canadian Dollars in
same day funds, without defense, setoff or counterclaim, free of any
restriction or condition, and delivered to Administrative Agent not later
than 12:00 noon (Toronto time) on the date due at the Funding and Payment
Office for the account of Lenders; funds received by Administrative Agent
after that time on such due date shall be deemed to have been paid by
Company on the next succeeding Business Day. Notwithstanding the foregoing,
payments of amounts deposited in the Collateral Account pursuant to the
proviso to subsection 2.4B(iv)(d) shall be deemed to have been paid by
Company on the applicable date or dates such amounts are applied to prepay
Bankers' Acceptances or to reimburse drawings under Letters of Credit.
Company hereby authorizes Administrative Agent to charge its accounts with
Administrative Agent in order to cause timely payment to be made to
Administrative Agent of all principal, interest, fees and expenses due
hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(ii) Application of Payments to Principal and Interest. Except as
provided in subsection 2.2B, all payments in respect of the principal
amount of any Prime Rate Loan shall include payment of accrued interest on
the principal amount being repaid or prepaid, and all such payments shall
be applied to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate payments of principal and
interest shall be apportioned among all outstanding Loans to which such
payments relate, in each case proportionately to Lenders' respective Pro
Rata Shares. Administrative Agent shall promptly distribute to each Lender,
at the account specified in the payment instructions set forth below its
name on the appropriate signature page hereof or at such other account as
such Lender may request in subsequent payment instructions delivered to
Administrative Agent by such Lender, its Pro Rata Share of all such
payments received by Administrative Agent and the commitment fees and
letter of credit fees of such Lender, if any, when received by
Administrative Agent pursuant to subsection 2.3 and subsection 4.2.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may be.
53
D. Authorized Debit. Company authorizes and directs Administrative Agent to
automatically debit the Company's bank accounts for all amounts payable by
Company under this Agreement, including the repayment of principal and the
payment of interest and fees and all charges agreed to by Company for the
maintaining of the Company's accounts. Administrative Agent shall, as soon as is
practical after making any such debit, inform Company of the amount thereof and
provide reasonable details of the calculation thereof.
E. Collateralization of Bankers' Acceptances. With respect to the
prepayment or cash collateralization of unmatured Bankers' Acceptances to the
extent required hereunder (it being acknowledged that any requirement to pay or
prepay Bankers' Acceptances prior to their maturity shall be construed as a
requirement to provide cash collateral under this provision), Company shall
provide for the funding of such unmatured Bankers' Acceptances by paying to and
depositing with Administrative Agent cash collateral for each such unmatured
Bankers' Acceptances; such cash collateral deposited by Company shall be held by
Administrative Agent in the Collateral Account with interest to be credited to
Company at rates prevailing at the time of deposit for similar accounts with
Administrative Agent. Such Collateral Account shall be held by Administrative
Agent as security for the obligations of Company in relation to such Bankers'
Acceptances and the security of Administrative Agent thereby created shall rank
in priority to all other Liens and adverse claims against such cash collateral.
Such cash collateral shall be applied to satisfy pro tanto the obligations of
Company for such Bankers' Acceptances as they mature and Administrative Agent is
hereby irrevocably directed by Company to apply any such cash collateral to such
maturing Bankers' Acceptances. Amounts held in such Collateral Account may not
be withdrawn by Company; however, interest on such deposited amounts shall be
for the account of Company and may be withdrawn by Company so long as no
Potential Event of Default or Event of Default is then continuing. If after
maturity of the Bankers' Acceptances for which such funds are held and
application by Administrative Agent of the amounts in such Collateral Accounts
to satisfy the obligations of Company hereunder with respect to the Bankers'
Acceptances being repaid, any excess remains, such excess shall be promptly paid
by Administrative Agent to Company so long as no Potential Event of Default or
Event of Default is then continuing.
F. Collateralization of Letters of Credit. With respect to funding the cash
collateralization of unexpired Letters of Credit to the extent required
hereunder (it being acknowledged that any requirement to pay or prepay or
collateralize Letters of Credit prior to their expiry date shall be construed as
a requirement to provide cash collateral under this provision), it is agreed
that Company shall provide for the funding of such unexpired Letters of Credit
by paying to and depositing with the Administrative Agent for the benefit of the
Issuing Lender cash collateral for each such unexpired Letter of Credit; such
cash collateral deposited by Company shall be held by the Administrative Agent
for the benefit of the Issuing Lender in the Collateral Account with interest to
be credited to Company at rates prevailing at the time of deposit for similar
accounts with the Administrative Agent. Such Collateral Account shall be held by
Administrative Agent as security for the obligations of Company in relation to
such Letters of Credit and the security of the Administrative Agent and Issuing
Lender thereby created in such cash collateral shall rank in priority to all
other Liens and adverse claims against such cash collateral. Such cash
collateral shall be applied to satisfy the obligations of Company for
54
such Letters of Credit as payments are made thereunder and the Issuing Lender is
hereby irrevocably directed by Company to so apply any such cash collateral.
Amounts held in such Collateral Account may not be withdrawn by Company;
however, interest on such deposited amounts shall be for the account of Company
and may be withdrawn by Company so long as no Potential Event of Default or
Event of Default is then continuing. If after expiry of the Letters of Credit
for which such funds are held and application by the Administrative Agent and
Issuing Lender of the amounts in such Collateral Account to satisfy the
obligations of Company hereunder with respect to the Letters of Credit being
repaid, any excess remains, such excess shall be promptly paid by Administrative
Agent to Company so long as no Potential Event of Default or Event of Default is
then continuing.
G. Application of Proceeds after Event of Default. Upon the occurrence and
during the continuance of an Event of Default, if requested by Requisite Lenders
(a) all payments received on account of the Obligations, whether from Company,
from any Subsidiary Guarantor or otherwise, shall be applied by Administrative
Agent against the Obligations and (b) all proceeds received by Administrative
Agent in respect of any sale of, collection from, or other realization upon, all
or any part of the Collateral under any Collateral Document may, in the
discretion of Administrative Agent, be held by Administrative Agent as
Collateral for, and/or (then or at any time thereafter) applied in full or in
part by Administrative Agent against, the applicable Obligations and Secured
Swap Obligations, in each case in the following order of priority:
(i) to the payment of all costs and expenses of such sale, collection
or other realization, all other expenses, liabilities and advances made or
incurred by Administrative Agent in connection therewith, and all amounts
for which Administrative Agent is entitled to compensation (including the
fees described in subsection 2.3), reimbursement and indemnification under
any Loan Document and all advances made by Administrative Agent thereunder
for the account of the applicable Loan Party, and to the payment of all
costs and expenses paid or incurred by Administrative Agent in connection
with the Loan Documents, all in accordance with subsections 11.4, 12.2 and
12.3 and the other terms of this Agreement and the Loan Documents;
(ii) thereafter, to the payment of all other Obligations (including
the cash collateralization of outstanding Letters of Credit) and the
obligations under Secured Swap Obligations for the ratable benefit of the
holders thereof (subject, in the case of amounts to be applied to the
Obligations, to the provisions of subsection 2.4C(ii) hereof); and
(iii) thereafter, to the payment to or upon the order of such Loan
Party or to whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
2.5 Use of Proceeds.
A. Term Loans. On the Closing Date the proceeds of the Term Loans and the
proceeds of the debt and equity capitalization of Company described in
subsection 6.1O(iii),
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shall be loaned by Company to Acquisition Co., and Acquisition Co. shall apply
the aggregate amount of such proceeds to fund the Acquisition Financing
Requirements.
B. Revolving Loans; Swing Line Loans. The proceeds of any other Revolving
Loans shall be applied by Company for working capital and other general
corporate purposes, which may include the making of intercompany loans to any of
Company's wholly-owned Subsidiaries, in accordance with subsection 9.3, for
their own general corporate purposes.
2.6 Increased Costs; Taxes; Capital Adequacy; Change in Law; Illegality.
A. Taxes. Company shall make all payments required hereunder, whether by
way of principal, interest or otherwise, without regard to any defence,
counterclaim or right of set-off available to Company and without withholding
any Taxes (for the purposes of this subclause 2.6A, "Taxes" shall not include
Taxes on such Lender's overall income, and franchise taxes). If Company is
required by Applicable Law to deduct any withholding Taxes from or in respect of
any amounts payable under this Agreement (i) the amounts payable by Company
hereunder will be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.6A) Administrative Agent and the Lenders will receive an
amount equal to the sum they would have received had no such deductions been
made, (ii) Company will make such deductions, and (iii) Company will pay the
full amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with Applicable Law. Notwithstanding the foregoing,
unless a Person becomes a Lender as a result of an assignment of Loans at a time
when an Event of Default has occurred and is continuing, Company shall have no
obligation to gross-up for Taxes withheld or paid solely because such Lender is
a non-resident of Canada within the meaning of the Income Tax Act, unless
Company otherwise agrees in writing to do so.
B. Capital Adequacy Adjustment. If any Lender shall have determined, acting
reasonably, that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within 10 Business Days after receipt by Company from
such Lender of the statement referred to in subsection 2.7, Company shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such controlling corporation on an after-tax basis for such reduction.
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C. Market for Bankers' Acceptances. In the event that at any time
subsequent to the giving of a Notice of Borrowing or Notice of
Conversion/Rollover to Administrative Agent by Company with regard to any
requested Bankers' Acceptances, but before the date of the borrowing, Rollover
or Conversion, as the case may be, the Administrative Agent makes a
determination, which shall be conclusive and binding upon Company, absent
manifest error, that there no longer exists an active market for Bankers'
Acceptances accepted by the Lenders then:
(i) the right of Company to request Bankers' Acceptances or BA
Equivalent Advances from any Lender shall be suspended until Administrative
Agent determines that the circumstances causing such suspension no longer
exist, and so notifies Company;
(ii) any outstanding Notice of Borrowing requesting a Loan by way of
Bankers' Acceptances or BA Equivalent Advances shall (unless revoked by
Company before the Funding Date) be deemed to be a Notice of Borrowing
requesting a Loan by way of Prime Rate Loans in the amount specified in the
original Notice of Borrowing;
(iii) any outstanding Notice of Conversion/Rollover requesting a
Conversion of a Prime Rate Loan into Bankers' Acceptances or BA Equivalent
Advances shall be deemed to be revoked; and
(iv) any outstanding Notice of Conversion/Rollover requesting a
Rollover of Bankers' Acceptances or BA Equivalent Advances shall (unless
revoked by Company before the Funding Date) be deemed to be a Notice of
Conversion/Rollover requesting a Conversion of such Loans into Prime Rate
Loans.
The Agent shall promptly notify Company and the Lenders of any suspension of
Company's right to request Bankers' Acceptances or BA Equivalent Advances and of
any termination of any such suspension.
D. Change in Law. If, after the date hereof, the adoption of any Applicable
Law, regulation, treaty or official directive (whether or not having the force
of law) or any change therein or in the interpretation or application thereof by
any court or by any Governmental Authority or any other entity charged with the
interpretation or administration thereof or compliance by a Lender with any
request or direction (whether or not having the force of law) of any such
authority or entity hereafter:
(i) subjects such Lender to, or causes the withdrawal or termination
of a previously granted exemption with respect to, any Taxes (for the
purposes of this subclause 2.6D, "Taxes" shall not include Taxes on such
Lender's overall income, and franchise taxes), or changes the basis of
taxation of payments due to such Lender, or increases any existing Taxes on
payments of principal, interest or other amounts payable by Company to such
Lender under this Agreement;
(ii) imposes, modifies or deems applicable any reserve, liquidity,
special deposit, regulatory or similar requirement against assets or
liabilities held by, or deposits in or for the account of, or loans by such
Lender, or any acquisition of funds for loans or
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commitments to fund loans or obligations in respect of undrawn, committed
lines of credit or in respect of Bankers' Acceptances accepted by such
Lender;
(iii) imposes on such Lender or requires there to be maintained by
such Lender any capital adequacy or additional capital requirements
(including a requirement which affects such Lender's allocation of capital
resources to its obligations) in respect of any Loan, Letter of Credit or
obligation of such Lender hereunder, or any other condition with respect to
this Agreement; or
(iv) directly or indirectly affects the cost to such Lender of making
available, funding or maintaining any Loan, or issuing or participating in
any Letter of Credit or otherwise imposes on such Lender any other
condition or requirement affecting this Agreement or any Loan or any
obligation of such Lender hereunder;
and the result of (i), (ii), (iii) or (iv) above, in the sole determination of
such Lender acting in good faith, is:
(a) to increase the cost to such Lender of performing its
obligations hereunder with respect to any Loan or Letter of
Credit;
(b) to reduce any amount received or receivable by such Lender
hereunder or its effective return hereunder or on its capital in
respect of any Loan, Letter of Credit or any Commitment; or
(c) to cause such Lender to make any payment with respect to or
to forego any return on or calculated by reference to, any amount
received or receivable by such Lender hereunder with respect to
any Loan, Letter of Credit or any Commitment;
such Lender shall determine that amount of money which shall compensate the
Lender for such increase in cost, payments to be made or reduction in income or
return or interest foregone (herein referred to as "Additional Compensation").
Upon a Lender having determined that it is entitled to Additional Compensation
in accordance with the provisions of this Section, the Lender shall promptly so
notify Company and Administrative Agent. The relevant Lender shall provide
Company and Administrative Agent with a photocopy of the relevant law, rule,
guideline, regulation, treaty or official directive (or, if it is impracticable
to provide a photocopy, a written summary of the same) and a certificate of a
duly authorized officer of such Lender setting forth the Additional Compensation
and the basis of calculation therefor, which shall be conclusive evidence of
such Additional Compensation in the absence of manifest error. Company shall pay
to such Lender within 10 Business Days of the giving of such notice such
Lender's Additional Compensation. Each of the Lenders shall be entitled to be
paid such Additional Compensation from time to time to the extent that the
provisions of this Section are then applicable notwithstanding that any Lender
has previously been paid any Additional Compensation.
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Each Lender agrees that it will not claim Additional Compensation from
Company under this subsection 2.6D if it is not generally claiming similar
compensation from its other customers in similar circumstances or in respect of
a period greater than 90 days prior to notification of such claim unless, in the
latter case, the adopted change or other event or circumstance giving rise to
such claim for Additional Compensation is retroactive in effect.
2.7 Statement of Lenders; Obligation of Lenders to Mitigate.
A. Statements. Each Lender claiming compensation or reimbursement pursuant
to subsection 2.6 or 2.7B shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis of the calculation of such compensation or reimbursement, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
B. Mitigation. Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would entitle such Lender or Issuing Lender to receive
payments under subsections 2.6 or 2.9, use reasonable efforts to make, issue,
fund or maintain the Commitments of such Lender or Loans or Letters of Credit of
such Lender or Issuing Lender through another lending or letter of credit office
of such Lender or Issuing Lender, if (i) as a result thereof the additional
amounts which would otherwise be required to be paid to such Lender or Issuing
Lender pursuant to subsection 2.6 or 2.9 would be materially reduced, and (ii)
as determined by such Lender or Issuing Lender, acting reasonably, such action
would not otherwise be disadvantageous to such Lender or Issuing Lender,
provided that such Lender or Issuing Lender will not be obligated to utilize
such other lending or letter of credit office pursuant to this subclause 2.7B
unless Company agrees to pay all incremental expenses incurred by such Lender or
Issuing Lender as a result of utilizing such other lending or letter of credit
office in connection with such Loans or Letters of Credit as described above.
2.8 Replacement of a Lender.
If Company receives a statement of amounts due pursuant to subsection
2.7A from a Lender, a Revolving Lender defaults in its obligations to fund a
Revolving Loan pursuant to this Agreement, a Lender (a "Non-Consenting Lender")
refuses to consent to an amendment, modification or waiver of this Agreement
that, pursuant to subsection 12.6, requires consent of 100% of the Lenders or
100% of the Lenders with Obligations directly affected, or a Lender has,
pursuant to subsection 2.9, declared its obligations under this Agreement with
respect to certain Loans to be terminated (any such Lender, a "Subject Lender"),
so long as (i) no Potential Event of Default or Event of Default shall have
occurred and be continuing and Company has obtained a commitment from another
Lender or an Eligible Assignee to purchase at par the Subject Lender's Loans and
assume the Subject Lender's Commitments and all other obligations of the Subject
Lender hereunder, (ii) such Lender is not an Issuing Lender with respect to any
Letters of Credit outstanding (unless all such Letters of Credit are terminated
or arrangements acceptable to such Issuing Lender (such as a "back-to-back"
letter of credit) are made) and (iii), if applicable, the Subject Lender is
unwilling to withdraw the notice delivered to Company
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pursuant to subsection 2.7 and/or is unwilling to remedy its default upon 10
days prior written notice to the Subject Lender and Administrative Agent and/or
is unwilling to approve the applicable amendment, modification or waiver upon 5
days prior written notice to the Subject Lender and Administrative Agent,
Company may require the Subject Lender to assign all of its Loans and
Commitments to such other Lender, Lenders, Eligible Assignee or Eligible
Assignees pursuant to the provisions of subsection 12.1B, provided that, prior
to or concurrently with such replacement, (1) the Subject Lender shall have
received payment in full of all principal, interest, fees and other amounts
(including all amounts under subsections 2.6 and/or 2.7B (if applicable))
through such date of replacement and a release from its obligations under the
Loan Documents, (2) the processing fee required to be paid by subsection
12.1B(i) shall have been paid to Administrative Agent, (3) all of the
requirements for such assignment contained in subsection 12.1B including the
consent of Administrative Agent (if required) and the receipt by Administrative
Agent of an executed Assignment Agreement and other supporting documents, have
been fulfilled, and (4) in the event such Subject Lender is a Non-Consenting
Lender, each assignee shall consent, at the time of such assignment, to each
matter in respect of which such Subject Lender was a Non-Consenting Lender and
Company also requires each other Subject Lender that is a Non-Consenting Lender
to assign its Loans and Commitments.
2.9 Illegality.
If a Lender determines, in good faith, that the adoption of any
Applicable Law, regulation, treaty or official directive (whether or not having
the force of law) or any change therein or in the interpretation or application
thereof by any court or by any Governmental Authority or any other entity
charged with the interpretation or administration thereof or compliance by a
Lender with any request or direction (whether or not having the force of law) of
any such authority or entity, now or hereafter makes it unlawful or impossible
for any Lender to make, fund or maintain a Loan, issue a Letter of Credit or
maintain a Commitment, or to give effect to its obligations in respect of such a
Loan, Commitment or a Letter of Credit, such Lender may, by written notice
thereof to Company and to Administrative Agent (which shall include in
reasonable detail an explanation of its determination) declare its obligations
under this Agreement in respect of such Loan, Letter of Credit or Commitment to
be terminated whereupon the same shall, subject to subsection 2.7B, forthwith
terminate, and Company shall, subject to subsection 2.7B, within the time
required by such law (or at the end of such longer period as such Lender at its
discretion has agreed), either effect a Conversion of such Loan in accordance
with the provisions hereof (if such Conversion would resolve the unlawfulness or
impossibility) or prepay the principal of such Loan, and collateralize such
Letter of Credit, and pay accrued interest, such Additional Compensation as may
be applicable with respect to such Loan to the date of such payment. If any such
change shall only affect a portion of such Lender's obligations under this
Agreement which is, in the opinion of such Lender and Administrative Agent,
severable from the remainder of this Agreement so that the remainder of this
Agreement may be continued in full force and effect without otherwise affecting
any of the obligations of Administrative Agent, the other Lenders or Company
hereunder, such Lender shall only declare its obligations under that portion so
terminated.
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Section 3. BANKERS' ACCEPTANCES
3.1 Acceptance of Bankers' Acceptances; Form and Execution.
A. Bankers' Acceptances. Pursuant to subsection 2.1A, Company may request,
in accordance with the provisions of this subsection 3.1, from time to time
during the period from the Closing Date to but excluding the 30th day prior to
the Revolving Loan Commitment Termination Date (in the case of Lenders having a
Revolving Loan Commitment), and October 26, 2008 (in the case of Lenders having
a Term Loan Commitment), that the Lenders accept Bankers' Acceptances issued by
Company or make BA Equivalent Advances to Company. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, such Lenders shall accept such Bankers'
Acceptances, or make BA Equivalent Advances in lieu thereof, in accordance with
the provisions of this subsection 3.1, provided that:
(i) Company shall not request that any Lender having a Term Loan
Commitment accept such Bankers' Acceptances, or make BA Equivalent Advances
(and no Lender shall do so), except
(a) on the Closing Date to fund the advance of the Term Loan
Commitment, if so requested in the Notice of Borrowing therefor,
(b) as Rollovers of existing Bankers' Acceptances or BA
Equivalent Advances,
(c) as Conversions from Prime Rate Loans into Bankers'
Acceptances or BA Equivalent Advances,
in any case in subparagraph (b) or (c), involving no increase in
borrowing under the Term Loan Commitment; and
(d) Company shall not request that any Lender having a Revolving
Loan Commitment accept such Bankers' Acceptances, or make BA
Equivalent Advances (and no Lender shall do so) if, after giving
effect to such issuance a Bankers' Acceptance or BA Equivalent
Advance would have a term ending later than the Revolving Loan
Commitment Termination Date.
B. Applicable Provisions. The following provisions shall apply to each
Bankers' Acceptance hereunder:
(i) the face amount at maturity of each draft drawn by Company to be
accepted as a Bankers' Acceptance shall be Cdn. $100,000 and integral
multiples thereof;
(ii) each draft drawn by Company and presented for acceptance by a
Lender shall be drawn on the standard form of such Lender in effect at the
time, specifying the BA Interest Period, provided that Administrative Agent
may require the Lenders to use a
61
generic form of Bankers' Acceptance, in a form satisfactory to each Lender,
acting reasonably, provided by Administrative Agent for such purpose in
place of the Lenders' own forms;
(iii) subject to subparagraph 3.1B(iv), Bankers' Acceptances shall be
signed by duly authorized officers of Company or, in the alternative, the
signatures of such officers may be mechanically reproduced in facsimile
thereon and Bankers' Acceptances bearing such facsimile signatures shall be
binding on Company as if they had been manually executed and delivered by
such officers on behalf of Company. Notwithstanding that any person whose
manual or facsimile signature appears on any Bankers' Acceptance may no
longer be an authorized signatory for Company on the date of issuance of a
Bankers' Acceptance, such signature shall nevertheless be valid and
sufficient for all purposes as if such authority had remained in force at
the time of such issuance and any such Bankers' Acceptance shall be binding
on Company; and
(iv) in lieu of Company signing Bankers' Acceptances in accordance
with subparagraph 3.1B(iii), and, for so long as the power of attorney in
subparagraph 3.2A is in force with respect to a given Lender, such Lender
shall execute and deliver Bankers' Acceptances on behalf of Company in
accordance with the provisions thereof and, for certainty, all references
herein to drafts drawn by Company, Bankers' Acceptances executed by Company
or similar expressions shall be deemed to include Bankers' Acceptances
executed in accordance with a power of attorney, unless the context
otherwise requires.
If and for so long as the power of attorney referred to in subsection
3.2A is in force with respect to each Lender, it is intended that pursuant to
the DBNA, all Bankers' Acceptances accepted by the Lenders (other than Old
System Issuers) under this Agreement will be issued in the form of a "depository
xxxx" (as defined in the DBNA), and deposited with a Clearing House. In order to
give effect to the foregoing, Administrative Agent will, subject to the approval
of Company and the Lenders (other than Old System Issuers), establish and notify
Company and the Lenders of any additional procedures, consistent with the terms
of this Agreement and the DBNA, as are reasonably necessary to accomplish such
intention, including:
(a) any instrument held by Administrative Agent for the purposes
of Bankers' Acceptances will have marked prominently and legibly on
its face and within its text, at or before the time of issue, the
words "This is a depository xxxx subject to the Depository Bills and
Notes Act (Canada)";
(b) any reference to the authentication of the Bankers'
Acceptance will be removed; and
(c) any reference to the "bearer" will be removed and such
Bankers' Acceptances will not be marked with any words prohibiting
negotiation, transfer or assignment of it or of an interest in it.
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3.2 Power of Attorney; Provision of Bankers' Acceptances to Lenders.
A. Power of Attorney. As a condition precedent to each Lender's obligation
to accept Bankers' Acceptances hereunder, Company hereby appoints each Lender,
acting by any authorized signatory of the Lender in question, the attorney of
Company:
(i) to sign for and on behalf and in the name of Company as drawer,
drafts in such Lender's standard form which are depository bills as defined
in the DBNA, payable to a Clearing House ;
(ii) for drafts which are not depository bills, to sign for and on
behalf and in the name of Company as drawer and to endorse on its behalf,
Bankers' Acceptances drawn on the Lender payable to the order of such
Lender;
(iii) for BA Discount Notes, to sign for and on behalf and in the name
of Company as drawer and to endorse on its behalf BA Discount Notes payable
to the order of such Lender;
(iv) to fill in the amount, date and maturity date of such Bankers'
Acceptances (or BA Discount Notes as applicable); and
(v) to deposit and/or deliver such Bankers' Acceptances which have
been accepted by such Lender or such BA Discount Notes which are payable to
the order of such Lender,
provided that such acts in each case are to be undertaken by the Lender in
question strictly in accordance with instructions given to such Lender by
Company as provided in this Section. For certainty, signatures of any authorized
signatory of a Lender may be mechanically reproduced in facsimile on Bankers'
Acceptances (or BA Discount Notes as applicable) in accordance herewith and such
facsimile signatures shall be binding and effective as if they had been manually
executed by such authorized signatory of such Lender.
Instructions from Company to a Lender relating to the execution,
completion, endorsement, deposit and/or delivery by that Lender on behalf of
Company of Bankers' Acceptances (or BA Discount Notes as applicable) which
Company wishes to submit to the Lender for acceptance by the Lender shall be
communicated by Company in writing to Administrative Agent by delivery to
Administrative Agent of Notices of Borrowing and Notices of Conversion/
Rollover, as the case may be, in accordance with this Agreement which, in turn,
shall be communicated by Administrative Agent, on behalf of Company, to the
Lender.
The communication in writing by Company, or on behalf of Company by
Administrative Agent, to the Lender of the instructions set out
in the Notices of Borrowing and Notice of Conversion/Rollover Notices referred
to above shall constitute (a) the authorization and instruction of Company to
the Lender to sign for and on behalf and in the name of Company as drawer the
requested Bankers' Acceptances (or BA Discount Notes as applicable) and to
complete and/or endorse Bankers' Acceptances (or BA Discount Notes as
applicable) in
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accordance with such information as set out above, and (b) the request of
Company to the Lender to accept such Bankers' Acceptances and deposit the same
with a Clearing House or deliver the same, as the case may be, in each case in
accordance with this Agreement and such instructions. Company acknowledges that
a Lender shall not be obligated to accept any such Bankers' Acceptances except
in accordance with the provisions of this Agreement.
A Lender shall be and it is hereby authorized to act on behalf of
Company upon and in compliance with instructions communicated to that Lender as
provided herein if the Lender reasonably believes such instructions to be
genuine. If a Lender accepts Bankers' Acceptances pursuant to any such
instructions, that Lender shall confirm particulars of such instructions and
advise Administrative Agent that it has complied therewith by notice in writing
to Administrative Agent in accordance with the provisions hereof. A Lender's
actions in compliance with such instructions, confirmed and advised to
Administrative Agent by such notice, shall be prima facie evidence of having
been in accordance with the instructions of Company.
B. Revocation. The power of attorney in subsection 3.2A may be revoked by
Company with respect to any particular Lender at any time upon not less than 5
Business Days' prior written notice served upon the Lender in question and
Administrative Agent, provided that no such revocation shall reduce, limit or
otherwise affect the obligations of Company in respect of any Bankers'
Acceptance (or BA Discount Note as applicable) executed, completed, endorsed,
deposited and/or delivered in accordance herewith prior to the time at which
such revocation becomes effective. If the power of attorney is so revoked with
respect to any Lender, Company shall, from time to time as required by the
applicable Lenders, provide to Administrative Agent for delivery to each such
Lender drafts drawn in blank by Company (pre-endorsed and otherwise in fully
negotiable form, if applicable) in quantities sufficient for each such Lender to
fulfill its obligations hereunder. Any such pre-signed drafts which are
delivered by Company to Administrative Agent or a Lender shall be held in
safekeeping by Administrative Agent or such Lender, as the case may be, with the
same degree of care as if they were Administrative Agent's or such Lender's
property, and shall only be dealt with by the Lenders and Administrative Agent
in accordance herewith. No Lender shall be responsible or liable for its failure
to make its share of any Bankers' Acceptances required hereunder if the cause of
such failure is, in whole or in part, due to the failure of Company to provide
such pre-signed drafts to Administrative Agent (for delivery to such Lender) on
a timely basis.
C. Delivery of Drafts. By 11:00 a.m. (Toronto time) on the applicable
Funding Date, Conversion or Rollover date, Company shall (i) either deliver to
each Lender in Toronto, or, if previously delivered, be deemed to have
authorized each Lender to complete and accept, or (ii) where the power of
attorney in Section 3.2A is in force with respect to a Lender, be deemed to have
authorized each such Lender to sign on behalf of Company, complete and accept,
drafts drawn by Company on such Lender in a principal amount at maturity equal
to such Lender's share of the Bankers' Acceptances specified by Company in the
relevant Notice of Borrowing or Notice of Conversion/Rollover, as the case may
be, as notified to the Lenders by Administrative Agent.
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3.3 Mechanics of Issuance.
A. Apportionment. Upon receipt by Administrative Agent of a Notice of
Borrowing or Notice of Conversion/Rollover from Company requesting the issuance
of Bankers' Acceptances, Administrative Agent shall promptly notify the Lenders
thereof and advise each Lender of the aggregate face amount of Bankers'
Acceptances to be accepted and purchased by such Lender, the date of issue and
the BA Interest Period for such Loan; the apportionment among the Lenders of the
face amounts of Bankers' Acceptances to be accepted by each Lender shall be
determined by Administrative Agent by reference and in proportion to the
respective applicable Commitments of each Lender, provided that, when such
apportionment cannot be evenly made, Administrative Agent shall round
allocations amongst such Lenders consistent with Administrative Agent's normal
money market practices.
B. Rate Determination. On each date for borrowing, Rollover or Conversion
involving the issuance of Bankers' Acceptances:
(i) on or about 10:00 a.m. (Toronto time) on such date, Administrative
Agent shall determine the CDOR Rate and shall obtain quotations from the
Schedule II Reference Lenders in order to determine the BA Discount Rate
then applicable to Bankers' Acceptances accepted by such Schedule II Lender
and Schedule III Lender in respect of an issue of Bankers' Acceptances in a
comparable amount and with comparable maturity to the Bankers' Acceptances
proposed to be issued on such date;
(ii) on or about 10:00 a.m. (Toronto time) on such date,
Administrative Agent shall determine the BA Discount Rate applicable to
each Lender and shall advise each Lender of the BA Discount Rate applicable
to it;
(iii) each Lender shall complete and accept, in accordance with the
Notice of Borrowing or Notice of Conversion/Rollover delivered by Company
and advised by Administrative Agent in connection with such issue, its
share of the Bankers' Acceptances to be issued on such date and shall
purchase such Bankers' Acceptances for its own account at a purchase price
which reflects the BA Discount Rate applicable to such issue; and
(iv) in the case of a borrowing, each Lender shall, for same day value
on the Funding Date, remit the BA Discount Proceeds or advance the BA
Equivalent Advance, as the case may be, payable by such Lender (net of the
stamping fee payable to such Lender pursuant to Section 3.9) to
Administrative Agent for the account of Company; Administrative Agent shall
make such funds available to Company for same day value on such date.
C. Resale. Each Lender may at any time and from time to time hold, sell,
rediscount or otherwise dispose of any or all Bankers' Acceptances accepted and
purchased by it for its own account.
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3.4 Rollover of Bankers' Acceptances.
In order to satisfy the liability of Company to a Lender for the face
amount of maturing Bankers' Acceptances accepted by such Lender, such Lender
shall receive and retain for its own account the BA Discount Proceeds of new
Bankers' Acceptances issued on a Rollover, and Company shall on the maturity
date of the Bankers' Acceptances being rolled over pay to Administrative Agent
for the account of the Lenders an amount equal to the difference between the
face amount of the maturing Bankers' Acceptances and the BA Discount Proceeds
from the new Bankers' Acceptances, together with the stamping fees to which the
Lenders are entitled pursuant to Section 3.9.
3.5 Conversion into Bankers' Acceptances.
In respect of Conversions into Bankers' Acceptances, in order to
satisfy the liability of Company to the Lenders for the amount of the converted
Loan, each Lender shall receive and retain for its own account the BA Discount
Proceeds of the Bankers' Acceptances issued upon such Conversion, and Company
shall on the date for Conversion pay to Administrative Agent for the account of
the Lenders an amount equal to the difference between the principal amount of
the converted Loan and the aggregate BA Discount Proceeds from the Bankers'
Acceptances issued on such Conversion, together with the stamping fees to which
the Lenders are entitled pursuant to Section 3.9.
3.6 Conversion from Bankers' Acceptances.
In order to satisfy the liability of Company to the Lenders for an
amount equal to the aggregate face amount of the maturing Bankers' Acceptances
converted to another type of Loan, Administrative Agent shall record the
obligation of Company to the Lenders as a Loan of the type into which such
continuing liability has been converted.
3.7 BA Equivalent Advances.
Notwithstanding the foregoing provisions of this Article, a
Non-Acceptance Lender shall, in lieu of accepting Bankers' Acceptances, make a
BA Equivalent Advance. The amount of each BA Equivalent Advance shall be equal
to the BA Discount Proceeds which would be realized from a hypothetical sale of
those Bankers' Acceptances which, but for this Section, such Lender would
otherwise be required to accept as part of such a borrowing, Conversion or
Rollover of Bankers' Acceptances. To determine the amount of such BA Discount
Proceeds, the hypothetical sale shall be deemed to take place at the BA Discount
Rate for such Loan. Any BA Equivalent Advance shall be made on the relevant
Funding Date, or Rollover or Conversion date as the case may be and shall remain
outstanding for the term of the relevant Bankers' Acceptances. Concurrent with
the making of a BA Equivalent Advance, a Non-Acceptance Lender shall be entitled
to deduct therefrom an amount equal to the stamping fee which, but for this
Section, such Lender would otherwise be entitled to receive as part of such
Loan. Upon the maturity date for such Bankers' Acceptances, Company shall pay to
each Non-Acceptance Lender an amount equal to the face amount of the Bankers'
Acceptances which such Lender would have accepted as part of such Loan if it was
not a Non-Acceptance Lender.
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All references herein to "Loans" and "Bankers' Acceptances" shall,
unless otherwise expressly provided herein or unless the context otherwise
requires, be deemed to include BA Equivalent Advances made by a Non-Acceptance
Lender as part of a borrowing, Conversion or Rollover of Bankers' Acceptances.
3.8 Termination of Bankers' Acceptances.
If at any time a Lender ceases to accept Bankers' Acceptances in the
ordinary course of its business, such Lender shall be deemed to be a
Non-Acceptance Lender and shall make BA Equivalent Advances in lieu of accepting
Bankers' Acceptances under this Agreement.
3.9 Stamping Fees.
Upon the acceptance by a Lender of a Bankers' Acceptance, Company
shall pay to Administrative Agent for the account of such Lender a stamping fee
in Cdn. Dollars equal to 3.0% per annum calculated on the principal amount at
maturity of such Bankers' Acceptance and BA Equivalent Advances and for the
period of time from and including the date of acceptance or advance to but
excluding the maturity date of such Bankers' Acceptance or BA Equivalent Advance
and calculated on the basis of the number of days elapsed in a year of 365 days.
Section 4. LETTERS OF CREDIT
4.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.
A. Letters of Credit. In addition to Company requesting that Lenders make
Loans by way of Prime Rate Loans and Bankers' Acceptances pursuant to subsection
2.1A, Company may request, in accordance with the provisions of this subsection
4.1, from time to time during the period from the Closing Date to but excluding
the 30th day prior to the Revolving Loan Commitment Termination Date, that a
Revolving Lender issue Letters of Credit for the account of Company for the
purposes specified in the definition of Letters of Credit. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, any Lender may, but (except as provided
in subsection 4.1B(ii) in respect of the Fronting Bank) shall not be obligated
to, issue such Letters of Credit in accordance with the provisions of this
subsection 4.1, provided that Company shall not request that any Revolving
Lender issue (and no Revolving Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance, the
Letter of Credit Usage would exceed Cdn. $30,000,000 minus the amount of
any cash collateral provided by Company or its Subsidiaries pursuant to
subsection 9.2A(iv) then held by or for the benefit of the providors of the
Bonding Program as security therefor;
(ii) any Letter of Credit having an expiration date later than the
earlier of (a) 10 days prior to the Revolving Loan Commitment Termination
Date and (b) the date which is one year from the date of issuance of such
Letter of Credit, provided that the immediately preceding clause (b) shall
not prevent any Issuing Lender from agreeing that
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a Letter of Credit will automatically be extended for one or more
successive periods not to exceed one year each unless such Issuing Lender
elects not to extend for any such additional period; and provided further
that such Issuing Lender shall not extend such Letter of Credit if it has
knowledge that an Event of Default has occurred and is continuing (and has
not been waived in accordance with subsection 12.6) at the time such
Issuing Lender must elect whether or not to allow such extension; or
(iii) any Letter of Credit issued for the purpose of supporting trade
payables or indebtedness for borrowed money.
B. Mechanics of Issuance.
(i) Request for Issuance. Whenever Company desires the issuance of a
Letter of Credit, it shall deliver to Administrative Agent and the Fronting
Bank a Request for Issuance no later than 12:00 noon (Toronto time) at
least three Business Days, or such shorter period as may be agreed to by
the Issuing Lender in any particular instance, in advance of the proposed
date of issuance. The Issuing Lender, in its reasonable discretion, may
require changes in the text of the proposed Letter of Credit or any
documents described in or attached to the Request for Issuance, and may
require an application and/or indemnity of Company in such Issuing Lender's
customary form. In furtherance of the provisions of subsection 12.8, and
not in limitation thereof, Company may submit Requests for Issuance by
telefacsimile, and Administrative Agent and Issuing Lenders may rely and
act upon any such Request for Issuance without receiving an original signed
copy thereof. Unless the Issuing Lender otherwise agrees, no Letter of
Credit shall require payment against a conforming demand for payment to be
made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such demand
for payment is required to be presented is located) that such demand for
payment is presented if such presentation is made after 1:00 p.m. (in the
time zone of such office of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing Lender)
prior to the issuance of any Letter of Credit in the event that any of the
matters to which Company is required to certify in the applicable Request
for Issuance is no longer true and correct as of the proposed date of
issuance of such Letter of Credit, and upon the issuance of any Letter of
Credit, Company shall be deemed to have re-certified, as of the date of
such issuance, as to the matters to which Company is required to certify in
the applicable Request for Issuance.
(ii) Determination of Issuing Lender. Upon receipt by Administrative
Agent of a Request for Issuance pursuant to subsection 4.1B(i) requesting
the issuance of a Letter of Credit, in the event Fronting Bank elects to
issue such Letter of Credit, Administrative Agent shall promptly so notify
Company, and Fronting Bank shall be the Issuing Lender with respect
thereto. In the event that Fronting Bank, in its sole discretion, elects
not to issue such Letter of Credit, Fronting Bank shall promptly so
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notify Company and Administrative Agent, whereupon Company may request any
other Revolving Lender to issue such Letter of Credit by delivering to such
Revolving Lender a copy of the applicable Request for Issuance. Any
Revolving Lender so requested to issue such Letter of Credit shall promptly
notify Company, Fronting Bank and Administrative Agent whether or not, in
its sole discretion, it has elected to issue such Letter of Credit, and any
such Revolving Lender that so elects to issue such Letter of Credit shall
be the Issuing Lender with respect thereto, provided that if more than one
Revolving Lender so elects to issue such Letter of Credit, Company shall
determine which Revolving Lender shall be the Issuing Lender.
In the event that all other Revolving Lenders shall have declined
to issue such Letter of Credit, notwithstanding the prior election of
Fronting Bank not to issue such Letter of Credit, Fronting Bank shall be
obligated to issue such Letter of Credit and shall be the Issuing Lender
with respect thereto, notwithstanding the fact that the Letter of Credit
Usage with respect to such Letter of Credit and with respect to all other
Letters of Credit issued by Fronting Bank, when aggregated with Fronting
Bank's outstanding Revolving Loans, may exceed Fronting Bank's Revolving
Loan Commitment then in effect. If Fronting Bank has resigned as provided
in subclause 11.5C and no successor Fronting Bank has been appointed at the
time of a Request for Issuance, then each Revolving Lender shall issue or
cause to be issued a Letter of Credit as to its own Pro Rata Share of each
requested Letter of Credit, all of which taken together would aggregate the
amount requested in the Request for Issuance.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
accordance with subsection 12.6) of the conditions set forth in subsection
6.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(iv) Notification to Revolving Lenders. Upon the issuance of or
amendment to any Letter of Credit, the applicable Issuing Lender shall
promptly notify Administrative Agent and Company of such issuance or
amendment in writing and such notice shall be accompanied by a copy of such
Letter of Credit or amendment. Upon receipt of such notice (or, if
Administrative Agent is the Issuing Lender, together with such notice),
Administrative Agent shall notify each Revolving Lender in writing of such
issuance or amendment and the amount of such Revolving Lender's respective
participation in such Letter of Credit or amendment, and, if so requested
by a Revolving Lender, Administrative Agent shall provide such Lender with
a copy of such Letter of Credit or amendment.
C. Revolving Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
shall be deemed to, and hereby agrees to, have irrevocably purchased from the
Issuing Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Revolving Lender's Pro Rata Share of the
maximum amount that is or at any time may become available to be drawn
thereunder.
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4.2 Letter of Credit Fees.
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Letter of Credit, (a) a fronting fee, payable
directly to the applicable Issuing Lender for its own account, equal to the
greater of (X) Cdn.$500 and (Y) 0.25% per annum of the daily amount
available to be drawn under such Letter of Credit and (b) a letter of
credit fee, payable to Administrative Agent for the account of Revolving
Lenders, equal to 3.0% per annum plus, upon the occurrence and during the
continuance of an Event of Default, 2% per annum, multiplied by the daily
amount available to be drawn under such Letter of Credit, each such
fronting fee or letter of credit fee to be payable in arrears up to and
including each March 31, June 30, September 30 and December 31 of each year
and computed on the basis of a 365-day year for the actual number of days
elapsed, and payable on the first Business Day of the month immediately
following each such quarter;
(ii) with respect to the issuance, administration, amendment or
transfer of each Letter of Credit and each payment of a drawing made
thereunder (without duplication of the fees payable under clauses (i) and
(ii) above), documentary and processing charges payable directly to the
applicable Issuing Lender for its own account in accordance with such
Issuing Lender's standard schedule for such charges in effect at the time.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 4.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination.
4.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In the
event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "Reimbursement Date") in an amount in Cdn. Dollars and in same day
funds equal to the amount of such payment, provided that, anything contained in
this Agreement to the contrary notwithstanding, unless Company shall have
notified Administrative Agent and such Issuing Lender prior to 11:00 a.m.
(Toronto time) on the date such drawing is honored that Company intends to
reimburse such Issuing Lender for the amount of such payment with funds other
than the proceeds of Revolving Loans:
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(i) Company shall be deemed to have given a timely Notice of Borrowing
to Administrative Agent requesting Revolving Lenders to make Revolving
Loans that are Prime Rate Loans on the Reimbursement Date in an amount
equal to the amount of such payment, and
(ii) subject to satisfaction or waiver of the conditions specified in
subsection 6.2 (other than 6.2A), Revolving Lenders shall, on the
Reimbursement Date, make Revolving Loans that are Prime Rate Loans in the
amount of such payment, the proceeds of which shall be applied directly by
Administrative Agent to reimburse such Issuing Lender for the amount of
such payment;
and provided, further that if for any reason proceeds of Revolving Loans are not
received by such Issuing Lender on the Reimbursement Date in an amount equal to
the amount of such payment, Company shall reimburse such Issuing Lender, on
demand, in an amount in same day funds equal to the excess of the amount of such
payment by Issuing Lender over the aggregate amount of such Revolving Loans, if
any, which are so received. Nothing in this subsection 4.3B shall be deemed to
relieve any Revolving Lender from its obligation to make Revolving Loans on the
terms and conditions set forth in this Agreement, and Company shall retain any
and all rights it may have against any Revolving Lender resulting from the
failure of such Revolving Lender to make such Revolving Loans under this
subsection 4.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of Credit.
(i) Payment by Revolving Lenders. In the event that Company shall fail
for any reason to reimburse any Issuing Lender as provided in subsection
4.3B in an amount equal to the amount of any payment by such Issuing Lender
under a Letter of Credit issued by it, such Issuing Lender shall promptly
notify Administrative Agent, who shall promptly notify each Revolving
Lender of the unreimbursed amount of such honored drawing and of such other
Revolving Lender's respective participation therein based on such Revolving
Lender's Pro Rata Share. Each Revolving Lender (other than such Issuing
Lender) shall make available to Administrative Agent an amount equal to its
respective participation, in Cdn. Dollars, in same day funds, at the
Funding and Payment Office, not later than 12:00 noon (Toronto time) on the
first Business Day after the date notified by Administrative Agent, and
Administrative Agent shall make available to such Issuing Lender in Cdn.
Dollars, in same day funds, at the office of such Issuing Lender on such
Business Day the aggregate amount of the payments so received by
Administrative Agent. In the event that any Revolving Lender fails to make
available to Administrative Agent on such Business Day the amount of such
Revolving Lender's participation in such Letter of Credit as provided in
this subsection 4.3C, such Issuing Lender shall be entitled to recover such
amount on demand from such Revolving Lender together with interest thereon
at the rate customarily used by such Issuing Lender for the correction of
errors among banks for three Business Days and thereafter at the Prime
Rate. Nothing in this subsection 4.3C shall be deemed to prejudice the
right of Administrative Agent to recover, for the benefit of Revolving
Lenders, from any Issuing Lender any amounts made available to such Issuing
Lender pursuant to this subsection
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4.3C in the event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter of Credit
by such Issuing Lender in respect of which payments were made by Revolving
Lenders constituted gross negligence or willful misconduct on the part of
such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From Company.
In the event any Issuing Lender shall have been reimbursed by other
Revolving Lenders pursuant to subsection 4.3C for all or any portion of any
payment by such Issuing Lender under a Letter of Credit issued by it, and
Administrative Agent or such Issuing Lender thereafter receives any
payments from Company in reimbursement of such payment under the Letter of
Credit, to the extent any such payment is received by such Issuing Lender,
it shall distribute such payment to Administrative Agent, and
Administrative Agent shall distribute to each other Revolving Lender that
has paid all amounts payable by it under subsection 4.3C with respect to
such payment such Revolving Lender's Pro Rata Share of all payments
subsequently received by Administrative Agent or by such Issuing Lender
from Company. Any such distribution shall be made to a Revolving Lender at
the account specified in subsection 2.4C(iii).
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to
Administrative Agent, with respect to payments under any Letters of Credit
issued by any Issuing Lender, interest on the amount paid by such Issuing
Lender in respect of each such payment from the date a drawing is honored
to but excluding the date such amount is reimbursed by Company (including
any such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 4.3B) at a rate equal to (a) for the period from the date such
drawing is honored to but excluding the Reimbursement Date, the rate then
in effect under this Agreement with respect to Revolving Loans that are
Prime Rate Loans, and (b) thereafter, a rate which is 2% per annum in
excess of the rate of interest otherwise payable under this Agreement with
respect to Revolving Loans that are Prime Rate Loans. Interest payable
pursuant to this subsection 4.3D(i) shall be computed on the basis of a 365
day year for the actual number of days elapsed in the period during which
it accrues and shall be payable on demand or, if no demand is made, on the
date on which the related drawing under a Letter of Credit is reimbursed in
full.
(ii) Distribution of Interest Payments by Administrative Agent.
Promptly upon receipt by Administrative Agent of any payment of interest
pursuant to subsection 4.3D(i) with respect to a payment under a Letter of
Credit,
(a) Administrative Agent shall distribute to (x) each Revolving
Lender (including the Revolving Lender that paid such drawing)
out of the interest received by Administrative Agent in respect
of the period from the date such drawing is honored to but
excluding the date on which the applicable Issuing Lender is
reimbursed for the amount of such payment (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 4.3B), the amount that such Revolving
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Lender would have been entitled to receive in respect of the
letter of credit fee that would have been payable in respect of
such Letter of Credit for such period pursuant to subsection 4.2
if no drawing had been honored under such Letter of Credit, and
(y) such Issuing Lender the amount, if any, remaining after
payment of the amounts applied pursuant to clause (x), and
(b) in the event such Issuing Lender shall have been reimbursed
by other Revolving Lenders pursuant to subsection 4.3C(i) for all
or any portion of such payment, Administrative Agent shall
distribute to each Revolving Lender (including such Issuing
Lender) that has paid all amounts payable by it under subsection
4.3C(i) with respect to such payment such Revolving Lender's Pro
Rata Share of any interest received by Administrative Agent in
respect of that portion of such payment so made by Revolving
Lenders for the period from the date on which such Issuing Lender
was so reimbursed to but excluding the date on which such portion
of such payment is reimbursed by Company.
Any such distribution shall be made to a Revolving Lender at the account
specified in subsection 2.4C(iii).
4.4 Obligations Absolute.
The obligation of Company to reimburse each Issuing Lender for
payments under the Letters of Credit issued by it and to repay any Revolving
Loans made by Revolving Lenders pursuant to subsection 4.3B and the obligations
of Revolving Lenders under subsection 4.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right which
Company or any Lender may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Revolving Lender or
any other Person or, in the case of a Revolving Lender, against Company,
whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between Company or one of its Subsidiaries and the beneficiary for which
any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;
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(iv) payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
4.5 Nature of Issuing Lenders' Duties.
As between Company and any Issuing Lender, Company assumes all risks
of the acts and omissions of, or misuse of the Letters of Credit issued by such
Issuing Lender by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of Credit to comply
fully with any conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any act or
omission by a Governmental Authority, and none of the above shall affect or
impair, or prevent the vesting of, any of such Issuing Lender's rights or powers
hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 4.5, any action
taken or omitted by any Issuing
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Lender under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not put such Issuing Lender under any resulting liability to
Company.
Notwithstanding anything to the contrary contained in this subsection
4.5, Company shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
Section 5. SECURITY
5.1 Collateral Documents.
As continuing collateral security for the Obligations and the Secured
Swap Obligations, Company shall deliver to Administrative Agent on behalf of the
Lenders and the Swap Lenders the following Loan Documents on or before the
Closing Date (unless expressly indicated otherwise):
(i) the Holdings Guarantee;
(ii) the Subsidiary Guarantee executed by, or joined in by,
Acquisition Co. and NACG (prior to the Amalgamation), and each other
Subsidiary Guarantor;
(iii) a Debenture issued by Company, by Acquisition Co. and NACG
(prior to the Amalgamation), and by each other Subsidiary Guarantor,
together with a Deposit Instrument in respect of each;
(iv) the Holdings Pledge Agreement in respect of all issued and
outstanding stock of Company;
(v) the Company Pledge Agreement in respect of all issued and
outstanding stock of Acquisition Co. and Finance Co.;
(vi) a Subsidiary Pledge Agreement executed by Acquisition Co. in
respect of all issued and outstanding stock of NACG;
(vii) a Subsidiary Pledge Agreement executed by NACG in respect of all
issued and outstanding stock of its directly held Subsidiaries;
(viii) a guarantee by Company of Secured Swap Obligations of
Subsidiary Guarantors; and
(ix) following Closing, from time to time, all other Collateral
Documents hereafter provided as collateral security for the Obligations and
the Secured Swap Obligations in accordance with the provisions of this
Agreement, including pursuant to subsection 8.9.
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Upon consummation of the Amalgamation, Amalco shall (for certainty)
forthwith confirm, as its continuing liability, all obligations of Acquisition
Co. and NACG (as the amalgamating corporations) under the Subsidiary Guarantees
and Collateral Documents executed by Acquisition Co. and NACG as aforesaid, and
any other Loan Documents executed by them, and that the property of each of
Acquisition Co. and NACG immediately prior to the Amalgamation continues to be
subject to the Liens created by the Collateral Documents. In addition, Company
shall, upon consummation of the Amalgamation, forthwith deliver to the
Administration Agent the certificates representing all Capital Stock of Amalco,
and shall cause Amalco to execute an addition agreement to the Company Pledge
Agreement in its capacity as a corporation whose shares are subject to such
pledge, with the intent and effect that all issued and outstanding stock of
Amalco shall continue to be pledged to Administrative Agent pursuant to the
Company Pledge Agreement.
5.2 Registration.
Company shall, at its expense, and upon consultation with
Administrative Agent, register, file or record the Collateral Documents in all
offices where such registration, filing or recording is necessary or of
advantage to the creation, perfection and preservation of the security
applicable to it, provided that:
(i) registration against specific real property interests need only be
effected against those parcels identified in Schedule 7.5B, and
(ii) registration against specific vehicles or other equipment
(security in respect of which can be registered in a personal property
registry by way of serial number) need only be effected against those items
identified in Schedule 7.5C;
until Administrative Agent, at the direction of the Requisite Lenders otherwise
requests, which they may do at any time and from time to time.
Company shall, in consultation with Administrative Agent, amend and
renew such registrations, filings and recordings from time to time as and when
required to keep them in full force and effect or to preserve the priority
established by any prior registration, filing or recording thereof.
To facilitate such ongoing perfection of the Collateral Documents,
Company shall promptly notify Administrative Agent of:
(a) any change in the location of Company's or any Subsidiary's
Guarantor's chief executive office,
(b) any acquisition (whether by purchase, lease or otherwise) of
any property or assets which are intended to be used or kept
outside of Alberta, British Columbia, Saskatchewan, Manitoba,
Northwest Territories and Yukon Territory by Company or any
Subsidiary Guarantor,
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(c) any individual real properties, or any vehicles or other
equipment, security in respect of which can be registered in a
personal property registry by way of serial number (but that is
not already subject to a specific registration as provided in
this subsection 5.2), in which Company or its Subsidiaries has an
interest, where any such asset has a fair market value in excess
of Cdn.$2,000,000, in the case of real property interests, or in
excess of Cdn.$1,250,000, in the case of such vehicles or other
equipment, and
(d) any of Company or Subsidiary Guarantor acquiring (whether by
purchase, lease or otherwise) an interest in individual real
properties, or in vehicles or other equipment, security in
respect of which can be registered in a personal property
registry by way of serial number, and where any such asset has a
fair market value in excess of Cdn.$2,000,000, in the case of
real property interests, or in excess of Cdn.$1,250,000, in the
case of such vehicles or other equipment.
Company shall, at its expense, register, file or record the Collateral
Documents in all offices where such registration, filing or recording is
necessary or of advantage to the creation, perfection and preserving of the
security applicable to any interests that are the subject of clauses (c) and (d)
above.
5.3 Sharing Collateral Documents.
Company and the Lenders agree and acknowledge that the Collateral
Documents are being held by Administrative Agent to secure the Obligations and
the Secured Swap Obligations on a pari passu basis. For purposes of the above
sentence, pari passu basis means:
(i) with respect to the Lenders (other than the Issuing Lender),
proportional between (a) the Obligations owed to Lenders having Revolving
Loan Exposure and the Obligations owed to Lenders having Term Loan
Exposure, and (b) the aggregate of the Obligations plus the Secured Swap
Obligations;
(ii) with respect to each Issuing Lender, proportional between (a) the
Obligations to it on account of Letter of Credit Usage, and (b) the
aggregate of the Obligations plus the Secured Swap Obligations; and
(iii) with respect to the Swap Lenders, proportional between (a) the
Secured Swap Obligations and (b) the aggregate of the Obligations plus the
Secured Swap Obligations.
The Swap Lenders, as amongst themselves, will share their pro rata
allocation of the Collateral Documents, as determined in paragraph (iii) above,
based on a pro rata allocation of the aggregate outstanding Secured Swap
Obligations (determined, if netting is legally available to a Swap Lender, on a
net basis) owing to each Swap Lender.
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If requested by any of Administrative Agent, the Requisite Lenders, an
Issuing Lender or any Swap Lender, then each of Administrative Agent and the
Swap Lenders will enter into such further intercreditor agreements and
assurances as may be reasonably requested to further evidence the sharing
provisions of this subsection. The parties hereto agree, and such further
agreements shall confirm, that Swap Lenders shall be entitled to share in the
proceeds of realization as aforesaid, but shall have no vote in respect of
amounts owed to them, and shall not have the right to initiate the enforcement
of, or participate in any decisions in respect of the enforcement of, any of the
Loan Documents unless and until there is no Term Loan Exposure and no Revolving
Loan Exposure, and this Agreement has been terminated.
5.4 Form of Collateral Documents.
If Administrative Agent, acting reasonably, determines at any time and
from time to time that the form and nature of the then existing Collateral
Documents is deficient in any way or does not fully provide Administrative Agent
and the Lenders and the Swap Lenders with the security and priority to which
each is entitled hereunder, Company will forthwith execute and deliver or cause
to be executed and delivered to Administrative Agent, at Company's expense, such
amendments to the Collateral Documents or provide such new security as
Administrative Agent may reasonably request.
The forms of Collateral Documents shall have been or be prepared based
upon the laws Alberta and other Applicable Laws in effect at the date hereof.
Administrative Agent shall have the right to require that:
(i) any such Collateral Documents be amended to reflect any changes in
such laws, whether arising as a result of statutory amendments, court
decisions or otherwise, in order to confer upon Administrative Agent the
Collateral Documents intended to be created thereby, and
(ii) Company and the Subsidiary Guarantors execute and deliver to
Administrative Agent such other and further debentures, mortgages, trust
deeds, assignments and security agreements as may be reasonably required to
ensure Administrative Agent and the Lenders have and hold Liens on and
against all of the property and assets of Company and the Subsidiary
Guarantors.
5.5 After-Acquired Property.
All property acquired by or on behalf of Company or a Subsidiary
Guarantor after the date of execution of the Collateral Documents (hereinafter
collectively referred to as "After-Acquired Property"), will be subject to the
charges and security interests of the Debentures, without any further
conveyance, mortgage, pledge, charge, assignment or other act on the part of
such parties. Without limiting the effect of the preceding sentence, Company
will from time to time execute and deliver, or cause to be executed and
delivered, and in consultation with Administrative Agent will cause to be
registered, all at Company's expense, such instruments supplemental to the
Collateral Documents, in form and substance satisfactory to Administrative
Agent, acting reasonably, as may be necessary or desirable to ensure that the
Collateral
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Documents as amended and supplemented constitute in favour of Administrative
Agent and the Lenders and the Swap Lenders a valid Lien over such After-Acquired
Property as required hereunder.
5.6 Continuing Collateral Documents.
Each item or part of the Collateral Documents shall for all purposes
be treated as a separate and continuing collateral security and shall be deemed
to have been given in addition to and not in place of any other item or part of
the Collateral Documents or any other security now held or hereafter acquired by
Administrative Agent or the Lenders. No item or part of the Collateral Documents
shall be merged or be deemed to have been merged in or by this Agreement or any
documents, instruments or acknowledgements delivered hereunder, or any simple
contract debt or any judgment, and any realization of or steps taken under or
pursuant to any security, instrument or agreement shall be independent of and
not create a merger with any other right available to the Lenders or
Administrative Agent under any security, instruments or agreements held by it or
at law or in equity.
5.7 Dealing with Collateral Documents.
Administrative Agent, with the consent of Requisite Lenders to the
extent required by subsection 12.6, may grant extensions of time or other
indulgences, accept compositions, and otherwise deal with Company and other
parties as Administrative Agent may see fit, and may, subject to Section 5.3,
during the existence of an Event of Default apply all amounts received from
Company or others or from securities (including the Collateral Documents or any
part thereof) upon such part of the liabilities of Company hereunder or under
any of the Collateral Documents as Administrative Agent may think best, without
prejudice to or in any way limiting the liability of Company and its
Subsidiaries under this Agreement or under any of the Collateral Documents or
any other collateral security.
5.8 Effectiveness.
The Collateral Documents shall be effective, and the undertakings as
to the Collateral Documents herein or in any other Document shall be continuing,
whether any Loans or Letters of Credit are then outstanding or any amounts
thereby secured or any part thereof shall be owing before or after, or at the
same time as, the creation of such Collateral Documents or before or after or
upon the date of execution of any amendments to this Agreement.
5.9 Release and Discharge of Collateral Documents.
Except to the extent set forth in Section 11.6 and 12.14, 12.15,
Company and the Subsidiary Guarantors shall not be discharged from the
Collateral Documents or any part thereof except by a written release and
discharge signed by Administrative Agent with the prior written consent of all
Lenders. If all of the Obligations have been repaid, paid, satisfied and
discharged, as the case may be, in full and the credit facilities established
hereby have been fully cancelled, then the Collateral Documents shall be
released and discharged by Administrative Agent and the Lenders. Administrative
Agent, at the cost and expense of Company, shall from time to time do,
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execute and deliver, or cause to be done, executed and delivered, all such
agreements, instruments, certificates, financing statements, notices and other
documents and all acts, matters and things as may be reasonably requested by
Company to give effect to, establish, evidence or record the foregoing release
and discharge.
5.10 Transfer of Collateral Documents.
If RBC, in its capacity as Administrative Agent, or any successor
thereto, in its capacity as Administrative Agent ceases to be Administrative
Agent, such departing agent shall transfer and assign all of the Collateral
Documents to the replacement agent.
Section 6. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans (including the acceptance of
Bankers' Acceptances) and to issue Letters of Credit hereunder, are subject to
the satisfaction of the following conditions.
6.1 Conditions to Term Loans and Initial Revolving Loans.
The obligations of Lenders to make the Term Loans and any Revolving
Loans to be made on the Closing Date are, in addition to the conditions
precedent specified in subsection 6.2, subject to prior or concurrent
satisfaction of the following conditions:
A. Loan Party Documents. On or before the Closing Date, Company shall, and
shall cause each other Loan Party to, deliver to Administrative Agent (with
sufficient originally executed copies, where appropriate, for each Lender) the
following with respect to Company or such Loan Party, as the case may be, each,
unless otherwise noted, dated the Closing Date:
(i) copies of the Organizational Documents of such Person, certified
by the secretary or similar officer of the applicable Loan Party, together
with a good standing certificate issued by the applicable governmental
official for its jurisdiction of organization and each other jurisdiction
in which such Person is qualified to do business, each dated a recent date
prior to the Closing Date;
(ii) resolutions of the Governing Body of such Person approving and
authorizing the execution, delivery and performance of the Loan Documents
to which it is a party, certified as of the Closing Date by the secretary
or similar officer of such Person as being in full force and effect without
modification or amendment;
(iii) signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party;
(iv) executed originals of the Collateral Documents and each other
Loan Document to which such Person is a party; and
(v) such other documents as Administrative Agent may reasonably
request.
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B. Fees. Company shall have paid to Administrative Agent, for distribution
(as appropriate) to Administrative Agent and Lenders, the fees payable on the
Closing Date referred to in subsection 2.3.
C. Corporate and Capital Structure; Ownership.
(i) Corporate Structure. The corporate organizational structure of
Holdings and its Subsidiaries, both before and after giving effect to the
Acquisition and the Amalgamation, shall be as set forth on Schedule 7.1
annexed hereto.
(ii) Capital Structure and Ownership. The capital structure and
ownership of Holdings and its Subsidiaries, both before and after giving
effect to the Acquisition and the Amalgamation, shall be as set forth on
Schedule 7.1 annexed hereto.
(iii) Management; Employment Contracts. The management structure of
Holdings and its Subsidiaries after giving effect to the Acquisition and
the Amalgamation, shall be as set forth on Schedule 7.1 annexed hereto, and
Administrative Agent shall have received copies of, and shall be satisfied
with the form and substance of, all employment contracts, if any, with
senior management of any Loan Party.
D. Representations and Warranties; Performance of Agreements. Company shall
have delivered to Administrative Agent an Officer's Certificate, in form and
substance satisfactory to Administrative Agent, to the effect that the
representations and warranties in Section 7 are true, correct and complete in
all material respects on and as of the Closing Date to the same extent as though
made on and as of that date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in all material respects on and as of
such earlier date) and that Company shall have performed and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Closing Date except as otherwise disclosed to and agreed to in
writing by Administrative Agent, provided that, if a representation and
warranty, covenant or condition is qualified as to materiality, with respect to
such representation and warranty, covenant or condition the applicable
materiality qualifier set forth above shall be disregarded for purposes of this
condition.
E. Financial Statements; Pro Forma Balance Sheet. On or before the Closing
Date, Lenders shall have received from Company (i) audited financial statements
of Norama Ltd. and its Subsidiaries for Fiscal Years 2001, 2002 and 2003,
consisting of balance sheets and the related consolidated statements of income
and cash flows for such Fiscal Years, (ii) unaudited financial statements of
NAEL and NACG and its Subsidiaries as at September 30, 2003, consisting of a
balance sheet and the related consolidated statements of income and cash flows
for the 6-month period ending on such date, all in reasonable detail and
certified by the chief financial officer of Company that they fairly present the
financial condition of Norama Ltd. and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments, and (iii) estimated consolidated balance sheets of Company and its
Subsidiaries as at the Closing Date, prepared in accordance with GAAP and
reflecting the consummation of the
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Acquisition, the Amalgamation and the buyout of certain operating leases, the
related financings and the other transactions contemplated by the Loan Documents
and the Related Documents, which pro forma financial statements shall be in form
and substance satisfactory to Administrative Agent.
F. Opinions of Counsel to Loan Parties. Lenders shall have received
originally executed copies of one or more favorable written opinions of Xxxxxx
Xxxxxx Xxxxxxx LLP and Xxxxxxxxx & Xxxxxxxxx LLP, counsel for Loan Parties, in
form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Closing Date and setting forth substantially the
matters in the opinions designated in Exhibit XVIII and Exhibit XIX annexed
hereto, respectively, and as to such other matters as Administrative Agent
acting on behalf of Lenders may reasonably request (this Credit Agreement
constituting a written request by Company to such counsel to deliver such
opinions to Lenders).
G. Opinions of Counsel Delivered Under Related Documents. Administrative
Agent shall have received copies of each of the opinions of counsel delivered to
the parties under the Related Documents, together with a letter from each such
counsel (to the extent not inconsistent with such counsel's established internal
policies) authorizing Lenders to rely upon such opinion to the same extent as
though it were addressed to Lenders.
H. Evidence of Insurance. Company shall have in effect insurance policies
conforming to the requirement in subsection 8.4. Administrative Agent shall have
received from Company's insurance broker binder letters or certificates
evidencing the insurance maintained by the Company and its Subsidiaries, and
evidencing that Administrative Agent has been named as additional insured and/or
loss payee thereunder to the extent required under subsection 8.4, and shall
have also have received a certificate from Company confirming that such
insurance is in compliance with the requirements in subsection 8.4.
I. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Acquisition and the Amalgamation,
the other transactions contemplated by the Loan Documents and the Related
Documents and the continued operation of the business conducted by NACG and its
Subsidiaries in substantially the same manner as conducted prior to the Closing
Date, except in a case where the failure to obtain or maintain a Governmental
Authorization or consent, either individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. Each such
Governmental Authorization and consent shall be in full force and effect, except
in a case where the failure to obtain or maintain a Governmental Authorization
or consent, either individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. All applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority that would restrain, prevent or otherwise impose materially adverse
conditions on the Acquisition and the Amalgamation or the financing thereof. No
action, request for stay, petition for review or rehearing, reconsideration, or
appeal with respect to any of the foregoing shall be pending, and the time for
any applicable Governmental Authority to take action to set aside its consent on
its own motion shall have expired.
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J. Security Interests. Administrative Agent shall have received evidence
satisfactory to it that Holdings, Company and Subsidiary Guarantors shall have
taken or caused to be taken all such actions, executed and delivered or caused
to be executed and delivered all such agreements, documents and instruments, and
made or caused to be made all such filings and recordings (other than the filing
or recording of items described in clauses (ii), (iii) and (iv) below) that may
be necessary or, in the opinion of Administrative Agent, desirable in order to
create in favor of Administrative Agent, for the benefit of Lenders, a valid and
(upon such filing and recording) perfected Lien in all present and
after-acquired personal property Collateral. Such actions shall include the
following:
(i) Stock Certificates and Instruments. Delivery to Administrative
Agent of (a) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Administrative Agent) representing
all Capital Stock pledged pursuant to the Holdings Pledge Agreement, the
Company Pledge Agreement and the Subsidiary Pledge Agreements (if
applicable), and (b) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to Administrative
Agent) evidencing any Collateral;
(ii) Lien Searches and Financing Change Statements. Delivery to
Administrative Agent of:
(a) the results of a recent search, by a Person satisfactory to
Administrative Agent, of all effective financing statements and
fixture filings and all judgment and tax lien filings which may
have been made with respect to any property of any Loan Party,
together with copies of all such filings disclosed by such
search, and
(b) financing change statements duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be
necessary to terminate any effective financing statements or
fixture filings disclosed in such search (other than any such
financing statements or fixture filings in respect of Liens
permitted to remain outstanding pursuant to the terms of this
Agreement), or undertakings in respect of the foregoing executed
by applicable Persons and acceptable to Administrative Agent.
(iii) Financing Statements. Delivery to Administrative Agent of
confirmation of the filing of all financing statements in respect of each
applicable Loan Party (if required) with respect to all Collateral of such
Loan Party, for filing in all jurisdictions as may be necessary or, in the
opinion of Administrative Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Collateral Documents,
including the specific equipment referred to subsection 5.2;
(iv) Certificates of Registration, Etc. Delivery to Administrative
Agent of copies of certificates of registration (or other evidence of the
accuracy of serial number descriptions satisfactory to Administrative Agent
acting reasonably) with respect to the
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motor vehicles and other equipment of Loan Parties which are to be the
subject of the specific equipment registrations referred to subsection 5.2
and the taking of all actions necessary to cause Administrative Agent to be
noted as lienholder thereon or otherwise necessary to perfect the Lien
granted to Administrative Agent on behalf of Lenders in such equipment,
provided that certificates or other such evidence not available on the
Closing Date shall be provided to Administrative Agent within 60 days after
the Closing Date; and
(v) Opinions of Local Counsel. Delivery to Administrative Agent of an
opinion of counsel (which counsel shall be reasonably satisfactory to
Administrative Agent) under the laws of each jurisdiction in which any Loan
Party or Collateral is located with respect to the creation and perfection
of the security interests in favor of Administrative Agent in such
Collateral and such other matters governed by the laws of such jurisdiction
regarding such security interests as Administrative Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Administrative Agent.
K. Closing Date Mortgages; Closing Date Mortgage Opinions; Etc.
Administrative Agent shall have received from Company and each applicable
Subsidiary Guarantor:
(i) Closing Date Mortgages. Fully executed Mortgages (each a "Closing
Date Mortgage" and, collectively, the "Closing Date Mortgages"), in proper
form for recording in all appropriate places in all applicable
jurisdictions, encumbering each real property listed in Schedule 7.5B
annexed hereto (each a "Closing Date Mortgaged Property" and, collectively,
the "Closing Date Mortgaged Properties"), provided that Company or NACG
shall provide to the Administrative Agent as soon as it is commercially
reasonable to do so after the Closing Date and in any event no later than
60 days after the Closing Date, a real property report prepared by an
Alberta Land Surveyor, in good standing, confirming the legal description
of the lands under the lease (the "Spruce Grove Lease") dated December 1,
1997 between Xxxxxxx Properties Ltd. (as successor in title to Norama
Inc.), as landlord, and NACG, as tenant, as amended, and confirming that
the improvements occupied by NACG (and Amalco as its successor) are located
on and within the boundaries of such lands.
(ii) Opinions of Local Counsel. An opinion of counsel (which counsel
shall be reasonably satisfactory to Administrative Agent) in each
jurisdiction in which a Closing Date Mortgaged Property is located with
respect to the enforceability of the form(s) of Closing Date Mortgages to
be recorded in such jurisdiction and such other matters as Administrative
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to Administrative Agent.
L. Borrowing Base Certificate. On or before the Closing Date, Company shall
have delivered to Administrative Agent a Borrowing Base Certificate relating to
the Borrowing Base substantially in the form of Exhibit VI annexed hereto,
prepared as of a recent date prior to the Closing Date. After giving effect to
the Loans funded and any Letters of Credit issued on the
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Closing Date, the Borrowing Base on the Closing Date shall equal or exceed the
Total Utilization of Revolving Loan Commitments plus the principal amount of the
Term Loans (including for certainty the face amount of Bankers' Acceptances
accepted by Lenders having Term Loan Commitments).
M. Matters Relating to Existing Indebtedness and Existing Operating Leases
of Company and its Subsidiaries.
(i) Repayment of Existing Indebtedness; Release of Existing Liens. On
the Closing Date, NAEL, NACG and its Subsidiaries shall have (a) repaid in
full all of their respective existing outstanding Indebtedness, (b)
terminated any outstanding commitments to lend or make other extensions of
credit, (c) delivered to Administrative Agent all documents or instruments
necessary to release all Liens securing Indebtedness or other obligations
of NAEL, NACG and/or its Subsidiaries thereunder, and (d) made arrangements
satisfactory to Administrative Agent, acting reasonably, with respect to
the cancellation of any letters of credit outstanding or the issuance of
Letters of Credit to support the obligations of NAEL, NACG and/or its
Subsidiaries with respect thereto.
(ii) Purchase of Leased Equipment. Except for the equipment described
on Schedule 6.1M, all equipment utilized by NAEL, NACG or any of its
Subsidiaries on a lease basis immediately prior to the consummation of the
transactions contemplated by the Loan Documents, shall as of the Closing
Date, be owned outright by Company or its applicable Subsidiary, free and
clear of Liens and encumbrances (other than Liens permitted under
subsection 9.2).
N. Solvency Assurances. On the Closing Date, Administrative Agent shall
have received an Officer's Certificate of Company dated the Closing Date,
substantially in the form of Exhibit X annexed hereto and with appropriate
attachments, in each case demonstrating that, after giving effect to the
consummation of the transactions contemplated by the Loan Documents, Company and
each guaranteeing Subsidiary Guarantor taken as a whole will be Solvent.
O. Proceeds of Debt and Equity Capitalization of Holdings and Company.
(i) Equity Capitalization of Parent. On or before the Closing Date,
Sterling, its Affiliates and other investors shall have purchased all of
the outstanding Parent Common Stock for consideration of not less than
Cdn.$92,500,000 in cash.
(ii) Equity Capitalization of Holdings. On or before the Closing Date,
(a) Parent shall have contributed to Holdings, as common equity, at least
Cdn.$92,500,000 received by Parent from the sale of Parent Common Stock,
and (b) Holdings shall have issued the Holdings Preferred Stock for
consideration of the Exchange Shares.
(iii) Debt and Equity Capitalization of Company. On or before the
Closing Date, (a) Holdings shall have contributed to Company, as common
equity, the Exchange Shares and all amounts received as a capital
contribution from Parent pursuant to clause
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(ii)(a) above, and (b) Company shall have issued and sold not less than
U.S.$200,000,000 in aggregate principal amount of Senior Notes.
(iv) Use of Proceeds by Company. On the Closing Date, Company shall
have provided evidence satisfactory to Administrative Agent that the
proceeds of the debt and equity capitalization of Company described in the
immediately preceding clause (iii) have been irrevocably committed, prior
to the application of the proceeds of the Term Loans and any Revolving
Loans made on the Closing Date, to the payment of a portion of the
Acquisition Financing Requirements (by virtue of the loan or contribution
thereof to Acquisition Co., and Acquisition Co.'s irrevocable commitment to
satisfy the Acquisition Financing Requirements).
P. Related Documents.
(i) Related Documents. Administrative Agent shall have received a
fully executed or conformed copy of each Related Document and any documents
executed in connection therewith, each be satisfactory in form and
substance to Administrative Agent, and each shall be in full force and
effect, and no provision thereof shall have been modified or waived in any
respect determined by Administrative Agent to be material, in each case
without the consent of Administrative Agent.
(ii) Officer's Certificate. Administrative Agent shall have received
an Officer's Certificate from Company to the effect that:
(a) the representations and warranties in the Acquisition
Agreement made by each party thereto are true, correct and
complete in all material respects on and as of the Closing Date
to the same extent as though made on and as of that date,
(b) the Acquisition Agreement is in full force and effect and no
provision thereof has been modified or waived in any respect
without the consent of Administrative Agent, and
(c) each such party has complied with all agreements and
conditions contained in the Acquisition Agreement and any
agreements or documents referred to therein required to be
performed or complied with by each of them on or before the
Closing Date and no party is in default in performance or
compliance with any of the terms or provisions thereof,
provided that, as to parties to the Acquisition that are not Loan Parties,
such certificate shall be made to the best of such Officer's knowledge.
Q. Consummation of Acquisition and Amalgamation.
(i) All conditions to the closing of the Acquisition set forth in the
Acquisition Agreement shall have been satisfied (except for the actual
funding thereunder), or the
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fulfillment of any such conditions shall have been waived with the consent
of Administrative Agent.
(ii) Upon payment of the purchase price under the Purchase Agreement,
the Acquisition will thereupon be completed in accordance with the terms of
the Acquisition Agreement.
(iii) The Administrative Agent shall have received undertakings
satisfactory to Administrative Agent of counsel for Company to the effect
that:
(a) the Articles of Amalgamation will be filed forthwith upon
consummation of the Acquisition,
(b) the documents referred to in the last paragraph of subsection
5.1 shall be held in escrow by counsel for the Administrative
Agent, subject to no conditions on their release to the
Administrative Agent except confirmation of the Amalgamation, and
(c) a certified copy of the filed Articles of Amalgamation and
Certificate of Amalgamation resulting therefrom will be provided
to Administrative Agent forthwith upon it becoming available.
(iv) Administrative Agent shall be satisfied that, in the ordinary
course, and based on the aforementioned undertaking, the Amalgamation will
become effective in accordance with the terms of the Articles of
Amalgamation immediately following the closing of the Acquisition.
(v) The aggregate cash consideration paid to the Sellers in connection
with the Acquisition shall not exceed Cdn.$371,000,000, and Administrative
Agent shall have received evidence to its satisfaction to such effect.
(vi) Transaction Costs shall not exceed Cdn.$25,000,000, and
Administrative Agent shall have received evidence to its satisfaction to
such effect.
(vii) Administrative Agent shall have received an Officer's
Certificate of Company to the effect set forth in clauses (i), (ii), (v)
and (vi) above and confirming that, in all events, Company will cause the
Amalgamation to be completed immediately following the closing of the
Acquisition.
R. Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in
form and substance to Administrative Agent and such counsel, and Administrative
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably
request.
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S. Minimum Pro-Forma Consolidated EBITDA. On or before the Closing Date,
Company shall have delivered to Administrative Agent an Officer's Certificate,
executed by a senior Officer of Company, demonstrating in reasonable detail that
the Consolidated EBITDA of Company and its Subsidiaries, on a combined basis,
for the twelve-month period ending September 30, 2003, calculated on a pro-forma
basis in the manner set forth in the pro-forma financial statements referred to
in Section 4.7(a)(v)(C) of the Acquisition Agreement, as if the Acquisition, the
Amalgamation and the other transactions consummated on the Closing Date, had
occurred at the beginning of such period, is not less than Cdn.$75,000,000.
T. Credit Rating. Prior to the Closing Date, the Senior Notes shall have
received a credit rating no lower than B3 from Xxxxx'x and B- from S&P,
respectively, and as of the Closing Date each such rating shall be in full force
and effect.
6.2 Conditions to All Loans.
The obligations of Lenders to make Loans (including the acceptance of
Bankers' Acceptances) on each Funding Date are subject to the following further
conditions precedent:
A. Notice of Borrowing. Administrative Agent shall have received before
that Funding Date, in accordance with the provisions of subsection 2.1B, a
Notice of Borrowing, in each case signed by a duly authorized Officer of
Company.
B. Funding Condition. As of that Funding Date:
(i) after giving effect to the Revolving Loans and/or Letters of
Credit requested on such Funding Date, the Total Utilization of Revolving
Loan Commitments shall not exceed (1) the Revolving Loan Commitments then
in effect, or (2) the Borrowing Base then in effect, less the aggregate
principal amount of all outstanding Term Loans including, for certainty,
the face amount of all outstanding Bankers' Acceptances and BA Discount
Notes thereunder;
(ii) the representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date, provided, that, if
a representation and warranty is qualified as to materiality, with respect
to such representation and warranty, the materiality qualifier set forth
above shall be disregarded for purposes of this condition;
(iii) no event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event of
Default;
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(iv) each Loan Party shall have performed in all material respects all
agreements and satisfied all conditions (other than those already satisfied
or waived under subsection 6.1) which this Agreement provides shall be
performed or satisfied by it on or before that Funding Date; and
(v) no order, judgment or decree of any arbitrator or Governmental
Authority shall purport to enjoin or restrain any Lender from making the
Loans or issuing any Letter of Credit to be made by it on that Funding
Date.
6.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. Initial Loans. On or before the date of issuance of the initial Letter
of Credit pursuant to this Agreement, the initial Loans shall have been made.
B. Request for Issuance. On or before the date of issuance of such Letter
of Credit, Administrative Agent shall have received, in accordance with the
provisions of subsection 4.1B(i), an originally executed Request for Issuance
(or a facsimile copy thereof) in each case signed by a duly authorized Officer
of Company, together with all other information specified in subsection 4.1B(i)
and such other documents or information as the applicable Issuing Lender may
reasonably require in connection with the issuance of such Letter of Credit.
C. Funding Conditions. On the date of issuance of such Letter of Credit,
all conditions precedent described in subsection 6.2B shall be satisfied.
6.4 Waiver.
The conditions set forth in Sections 6.1, 6.2 and 6.3 are inserted for
the sole benefit of the Lenders and Administrative Agent and may be waived by
the Requisite Lenders (in the case of Section 6.2 and 6.3) and by all of the
Lenders (in the case of Section 6.1), in whole or in part (with or without terms
or conditions) without prejudicing the right of the Lenders or Administrative
Agent at any time to assert such waived conditions in respect of the making of
any subsequent Loan or Letter of Credit to the extent that it applies thereto.
Section 7. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lenders to issue Letters of Credit and to induce
Revolving Lenders to purchase participations therein, Company (and for purposes
of this Section, references to Company's Subsidiaries shall be deemed to include
NACG and Acquisition Co., and following the Amalgamation, Amalco) represents and
warrants (effective, in the case of representations and warranties given as of
the Closing Date only, immediately after the Acquisition and the Amalgamation,
and in all other cases, effective immediately after the Acquisition and the
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Amalgamation and at such other times as provided for herein) to Administrative
Agent and each Lender:
7.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each of Holdings and its Subsidiaries is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization as specified, both (i) as of the Closing Date and
immediately prior to the Amalgamation, and (ii) immediately after the
Amalgamation, in Schedule 7.1 annexed hereto. Each of Holdings and its
Subsidiaries has all requisite corporate or partnership power and authority to
own and operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and the Related
Documents to which it is a party and to carry out the transactions contemplated
thereby.
B. Qualification and Good Standing. Each of Holdings and its Subsidiaries
is qualified to do business and is in good standing in every jurisdiction in
which the location of its assets or the conduct of its business require it to be
so qualified and in good standing, except in jurisdictions where the failure to
be so qualified or in good standing has not had and could not reasonably be
expected to result in a Material Adverse Effect.
C. Conduct of Business. Holdings and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsections 9.11, 10.13
and 10.14.
D. Subsidiaries. All of the Subsidiaries of Company as of the Closing Date
and their jurisdictions of organization are identified in Schedule 7.1 annexed
hereto, as said Schedule 7.1 may be supplemented from time to time pursuant to
the provisions of subsection 8.1(xii). The Capital Stock of each of the
Subsidiaries of Company identified in Schedule 7.1 annexed hereto (as so
supplemented), is duly authorized, validly issued, fully paid and nonassessable
(in each case to the extent such legal concept is applicable to such type of
Capital Stock) and none of such Capital Stock constitutes Margin Stock. Schedule
7.1 annexed hereto (as so supplemented) correctly sets forth the ownership
interest of Company and each of its Subsidiaries in each of the Subsidiaries of
Company identified therein.
7.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Related Documents have been duly authorized by all
necessary action on the part of each Loan Party that is a party thereto.
B. No Conflict. The execution, delivery and performance by Loan Parties of
the Loan Documents and the Related Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents and the
Related Documents do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to Holdings or any of its
Subsidiaries, the Organizational Documents of Holdings or any of its
Subsidiaries or any order, judgment or decree of any court or other Governmental
Authority
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binding on Holdings or any of its Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Holdings or any of its Subsidiaries, (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of Holdings or any of its Subsidiaries (other than any
Liens created under any of the Loan Documents in favor of Administrative Agent
on behalf of Lenders), or (iv) require any approval of stockholders or any
approval or consent of any Person under any material Contractual Obligation of
Holdings or any of its Subsidiaries, except for such approvals or consents which
will be obtained on or before the Closing Date and disclosed in writing to
Lenders.
C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Documents to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and the Related Documents do not and will not require any Governmental
Authorization, except as have been obtained, or are being obtained and listed in
Schedule 7.2, or are registrations of the Collateral Documents being made
pursuant to Section 5.2.
D. Binding Obligation. Each of the Loan Documents and the Related Documents
has been duly executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Person, enforceable
against such Person in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
E. Valid Issuance of Parent Common Stock, Holdings Preferred Stock, and
Senior Notes.
(i) Parent Common Stock and Holdings Preferred Stock. The Parent
Common Stock and Holdings Preferred Stock to be sold on or before the
Closing Date, when issued and delivered, will be duly and validly issued,
fully paid and nonassessable. The issuance and sale of such Parent Common
Stock and Holdings Preferred Stock, upon such issuance and sale, will
either (a) have been registered or qualified under applicable securities
laws or (b) be exempt therefrom.
(ii) Senior Notes. Company has the corporate power and authority to
issue the Senior Notes. The Senior Notes, when issued and paid for, will be
legally valid and binding obligations of Company, enforceable against
Company in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles
relating to enforceability. The Senior Notes, when issued and sold, will
either (a) have been registered or qualified under applicable securities
laws or (b) be exempt therefrom.
7.3 Financial Condition.
Company has heretofore delivered to Administrative Agent, at Lenders'
request, the financial statements and information described in subsection 6.1E.
All such statements other
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than pro forma financial statements were prepared in conformity with GAAP and
fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit, absence of footnotes and normal year-end
adjustments. As of the Closing Date, neither Company nor any of its Subsidiaries
has (and immediately following the funding of the initial Loans will not have)
any Contingent Obligation, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not reflected
in the foregoing financial statements or the notes thereto and, as of any
Funding Date subsequent to the Closing Date, is not reflected in the most recent
financial statements delivered to Administrative Agent pursuant to subsection
8.1 or the notes thereto and that, in any such case, is material in relation to
the business, operations, properties, assets, condition (financial or otherwise)
or prospects of Company or any of its Subsidiaries (except to the extent
incurred after the period covered by such financial statements and such
incurrence is permitted by this Agreement and except for any such matter that
need not, in accordance with GAAP, be reflected in such financial statements and
which has been otherwise expressly disclosed to Administrative Agent in
writing).
7.4 No Material Adverse Change; No Restricted Junior Payments.
Since March 31, 2003, no event or change has occurred that has
resulted in or evidences, either in any case or in the aggregate, a Material
Adverse Effect that is continuing. Neither Company nor any of its Subsidiaries
has directly or indirectly declared, ordered, paid or made, or set apart any sum
or property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 9.5. Company and its Subsidiaries are in compliance with
all laws and regulations applicable to it where failure to be in compliance
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
7.5 Title to Properties; Liens; Real Property; Intellectual Property.
A. Title to Properties; Liens. Company and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in subsection 7.3 or in the most recent
financial statements delivered pursuant to subsection 8.1, in each case except
(A) for assets disposed of since the date of such financial statements in the
ordinary course of business, (B) as otherwise permitted under subsection 9.7, or
(C) where failure to have such title could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. Except as
permitted by this Agreement, all such properties and assets are free and clear
of Liens.
B. Real Property. As of the Closing Date, Schedule 7.5B annexed hereto
contains a true, accurate and complete list of (i) all fee interests in any real
property, and (ii) all leases, subleases or assignments of leases (together with
all amendments, modifications, supplements, renewals or extensions of any
thereof) in real property, regardless of whether a Loan Party is the landlord or
tenant (whether directly or as an assignee or successor in interest) under such
lease,
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sublease or assignment. Except as specified in Schedule 7.5B annexed hereto, as
of the Closing Date each agreement listed in clause (ii) of the immediately
preceding sentence is in full force and effect and no defaults by any Loan Party
currently exist thereunder, and Company does not have knowledge of any defaults
by any third party currently existing thereunder, in any case where any such
defaults could reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect. Each such agreement constitutes the legally valid and
binding obligation of each applicable Loan Party, enforceable against such Loan
Party in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.
C. Material Serial Number Equipment. As of the Closing Date, Schedule 7.5C
annexed hereto contains a true, accurate and complete list of (i) all interests
of any Loan Party in any vehicles or other equipment that can be registered in a
personal property registry by way of serial number, regardless of whether the
Loan Party is an owner or lessee thereof, and which vehicle or other equipment
individually has a fair market value of Cdn.$1,250,000 or more, and (ii) the
serial numbers of such vehicles or other equipment. As of the Closing Date each
lease agreement in respect of any vehicle or other equipment listed in Schedule
7.5C is in full force and effect and no defaults by any Loan Party currently
exist thereunder, and Company does not have knowledge of any defaults by any
third party currently existing thereunder, in any case where any such defaults
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. Each such agreement constitutes the legally valid and
binding obligation of each applicable Loan Party, enforceable against such Loan
Party in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.
D. Intellectual Property. As of the Closing Date, Company and its
Subsidiaries own or have the right to use all Intellectual Property used in the
conduct of their business, except where the failure to own or have such right to
use in the aggregate could not reasonably be expected to result in a Material
Adverse Effect. No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does Company
know of any valid basis for any such claim, except for such claims that in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect. The use of such Intellectual Property by Company and its Subsidiaries
does not infringe on the rights of any Person, except for such claims and
infringements that, in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect. All applicable registrations of and applications
for Intellectual Property, and all unregistered Intellectual Property, that are
owned or licensed by Company or any of its Subsidiaries on the Closing Date and
that are material to their respective operations are described on Schedule 7.5D
annexed hereto.
7.6 Litigation; Adverse Facts.
There are no Proceedings (whether or not purportedly on behalf of
Holdings or any of its Subsidiaries) before or by any court or other
Governmental Authority (including any
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Environmental Claims) that are, to the knowledge of Company, threatened or
pending against or by Holdings or any of its Subsidiaries or any property or
operations of Holdings or any of its Subsidiaries and that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect. Neither Company, Holdings nor any of its Subsidiaries (i) is in
violation of any Applicable Laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions or decrees of any court or other
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
7.7 Payment of Taxes.
Except to the extent permitted by subsection 8.3, all tax returns and
reports of Holdings and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other governmental charges upon Holdings
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises that are due and payable have been paid when due and
payable, except where failure to do so could not reasonably be expected to have
a Material Adverse Effect. Company knows of no proposed tax assessment against
Holdings or any of its Subsidiaries that is not being contested by Holdings or
such Subsidiary in good faith and by appropriate proceedings, provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
7.8 Performance of Agreements; Material Contracts.
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except in either case where the consequences, direct
or indirect, of such default or defaults, if any, could not reasonably be
expected to result in a Material Adverse Effect.
B. Schedule 7.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date.
C. All Material Contracts are in full force and effect and no material
defaults by any Loan Party currently exist thereunder, and Company does not have
knowledge of any material defaults by any third party currently existing
thereunder.
7.9 Benefit Plans.
Company and its Subsidiaries have made full payment when due of all
required contributions to any Benefit Plan except where failure to do so
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
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7.10 Certain Fees.
Except as provided in the Advisory Services Agreement, no broker's or
finder's fee or commission will be payable by any Loan Party with respect to
this Agreement or any of the transactions contemplated hereby, and Company
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
7.11 Environmental Protection.
(i) Neither Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
(ii) There are and, to Company's knowledge, have been no conditions,
occurrences, or Hazardous Materials Activities that could reasonably be
expected to form the basis of an Environmental Claim against Company or any
of its Subsidiaries that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
(iii) All Governmental Authorizations required by Environmental Law
for Hazardous Materials Activities of the Company or any of its
Subsidiaries have been obtained by the Company or its Subsidiaries, as the
case may be, and to the knowledge of the Company, are in full force and
effect and the Company and its Subsidiaries have not committed a breach or
default of any terms and conditions of such Governmental Authorizations
that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
(iv) Neither Company nor, to Company's knowledge, any of its
Subsidiaries, is aware of any event or circumstances which are reasonably
expected to result in any Governmental Authorizations for any Hazardous
Materials Activities not being renewed, extended or replaced in the
ordinary course by a Governmental Authority over the expiry of such
Governmental Authorizations, in any case where, individually or in the
aggregate, such non-renewal could reasonably be expected to result in a
Material Adverse Effect.
(v) Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would not,
individually or in the aggregate, be reasonably expected to result in a
Material Adverse Effect.
Except where any obligations or liabilities resulting therefrom,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, neither
95
Company's nor any of its Subsidiaries nor, to Company's knowledge, any
predecessor of Company or any of its Subsidiaries' operations or Facilities
involves or involved the generation, transportation, treatment, storage or
disposal of Hazardous Materials over any limits or quantities or in
concentrations in excess of limits, quantities or concentrations prescribed by
Environmental Laws or any applicable Governmental Authorizations.
7.12 Employee Matters.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to result in a Material Adverse Effect.
7.13 Solvency.
As of the Closing Date (after giving effect to the transactions
contemplated hereby on such date), Company is, and Company and its Subsidiaries
taken as a whole are, Solvent. As of each Funding Date, upon the incurrence of
any Loans by, or the issuance of Letters of Credit for the account of, any Loan
Party on such date, Company is, and Company and its Subsidiaries taken as a
whole are, Solvent.
7.14 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions that
have been taken, and (ii) the delivery to Administrative Agent of any Pledged
Collateral in accordance herewith, are effective to create in favor of
Administrative Agent for the benefit of Lenders, as security for the Obligations
and the Secured Swap Obligations, a valid Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect.
B. Governmental Authorizations. No authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority is required on
the part of or in respect of any Loan Party for either (i) the pledge or grant
by any Loan Party of the Liens purported to be created in favor of
Administrative Agent pursuant to any of the Collateral Documents or (ii) the
exercise by Administrative Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by Applicable Law), except for
filings or recordings contemplated by subsection 7.14A.
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Administrative Agent as contemplated by subsections 5.2 and 7.14A and
to evidence permitted lease obligations and other Liens permitted pursuant to
subsection 9.2A, (i) no effective financing statement, fixture filing, caveat,
encumbrance or other instrument similar in effect covering all or any part of
the Collateral is on file in any filing or recording office, and (ii) no
effective filing covering all or any part of the IP Collateral is on file in any
Canadian registry allowing or contemplating such filings.
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D. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
7.15 Disclosure.
As of the Closing Date, no representation or warranty of Holdings or
any of its Subsidiaries contained in the Confidential Information Memorandum, in
any Loan Document, Related Document or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to Company, in the case of any document not furnished by it
and not otherwise expressly disclosed in any other of the above-described
documents) necessary in order to make the statements contained herein or therein
not misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to Company (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
7.16 Related Documents.
A. Delivery of Related Documents. Company has delivered to Lenders complete
and correct copies of each Related Document and of all exhibits and schedules
thereto.
X. Xxxxxxx' Warranties. Except to the extent otherwise set forth herein or
in the schedules hereto, to Company's knowledge, each of the representations and
warranties given by Sellers to Company in the Acquisition Agreement is true and
correct in all material respects as of the date hereof (or as of any earlier
date to which such representation and warranty specifically relates) and will be
true and correct in all material respects as of the Closing Date (or as of such
earlier date, as the case may be), in each case subject to the qualifications
set forth in the schedules to the Acquisition Agreement.
C. Warranties of Company. Subject to the qualifications set forth therein,
each of the representations and warranties given by Company to Sellers in the
Acquisition Agreement is true and correct in all material respects as of the
date hereof and will be true and correct in all material respects as of the
Closing Date.
D. Survival. Notwithstanding anything in the Acquisition Agreement to the
contrary, the representations and warranties of Company set forth in subsections
7.16B and
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7.16C shall, solely for purposes of this Agreement, be deemed to be made in
favour of the Lenders and shall survive the Closing Date for the benefit of
Lenders.
7.17 Accounts.
Except as disclosed in the written information provided to
Administrative Agent and Lenders by Company, Administrative Agent may rely in
all material respects upon all statements, warranties, or representations made
in any Borrowing Base Certificate or other written report regarding accounts
receivable delivered hereunder by Company in determining which items of
Collateral are to be deemed Eligible Accounts Receivable.
7.18 Deemed Repetition.
On each Funding Date:
(i) Representations True: each of the representations and warranties
contained herein and in the other Loan Documents shall be true, correct and
complete in all material respects on and as of that Funding Date to the
same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date (provided that if a representation and warranty is qualified as to
materiality, with respect to such representation and warranty, the
materiality qualifier set forth above shall be disregarded for purposes of
this representation), and Company shall so confirm in the applicable Notice
of Borrowing; and
(ii) No Default: Company shall be deemed to have represented to
Administrative Agent and the Lenders that, except as has otherwise been
notified to Administrative Agent in writing and has been waived in
accordance herewith, no Potential Event of Default or Event of Default has
occurred and is continuing nor will any such event occur as a result of the
aforementioned borrowing.
Section 8. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations, the satisfaction of all Bankers' Acceptances and the
cancellation or expiration of all Letters of Credit, unless Requisite Lenders
shall otherwise give prior written consent, Company shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 8.
8.1 Financial Statements and Other Reports.
Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent, in sufficient copies
for delivery to all Lenders:
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(i) Events of Default, Filings, etc.: promptly upon any officer of
Company obtaining knowledge:
(a) of any condition or event that constitutes an Event of
Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to Administrative Agent) or
taken any other action with respect to a claimed Event of Default or
Potential Event of Default,
(b) that any Person has given any notice to Company or any of its
Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in subsection
10.2,
(c) of any condition or event that would be required to be
disclosed in a material change report filed by Company with the
Alberta Securities Commission if Company were required to file such
reports under the Securities Act (Alberta),
(d) of any default or claimed default under any lease of real
property that has an aggregate value in excess of Cdn. $2,000,000, or
any lease of vehicles or other equipment that has an aggregate value
in excess of Cdn. $1,250,000, in either case that would entitle the
lessor to terminate any lease in respect of such assets; or
(e) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse
Effect,
an Officer's Certificate specifying the nature and period of existence of
such condition, event or change, or specifying the notice given or action
taken by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action
Company has taken, is taking and proposes to take with respect thereto;
(ii) Monthly and Quarterly Financials: as soon as available and in any
event within 30 days after the end of each month and within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year,
(a) the consolidated balance sheet of Company and its
Subsidiaries as at the end of such fiscal period and the related
consolidated statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for such fiscal period and for the
period from the beginning of the then current Fiscal Year to the end
of such fiscal period, setting forth in each case in comparative form
the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the Financial
Plan for the current Fiscal Year, to the extent prepared for such
fiscal period, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as
at the dates
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indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and
normal year-end adjustments,
(b) a narrative report describing the operations of Company and
its Subsidiaries in the form prepared for presentation to senior
management for such fiscal period and for the period from the
beginning of the then current Fiscal Year to the end of such fiscal
period, and
(c) a listing of all Material Contracts entered into by a Loan
Party in such fiscal period, together with a copy of each such
Material Contract which is reasonably expected to generate gross
revenue to the Loan Parties in excess of Cdn.$50,000,000 over the term
of the contract and any expected renewals thereof.
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year:
(a) the consolidated balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Year and the related
consolidated statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for such Fiscal Year, setting forth in
each case in comparative form the corresponding figures for the
previous Fiscal Year and the corresponding figures from the Financial
Plan for the Fiscal Year covered by such financial statements, all in
reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated,
(b) a narrative report describing the operations of Company and
its Subsidiaries in the form prepared for presentation to senior
management for such Fiscal Year, and
(c) in the case of such consolidated financial statements, a
report thereon of one of the "Big 4" accounting firms or other
independent chartered accountants of recognized national standing
selected by Company and satisfactory to Administrative Agent, which
report shall be unqualified, shall express no doubts, assumptions or
qualifications concerning the ability of Company and its Subsidiaries
to continue as a going concern, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in
such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing
standards;
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(iv) Compliance Certificates: together with each delivery of financial
statements pursuant to subclauses (ii) and (iii) above,
(a) an Officer's Certificate of Company stating that the signers
have reviewed the terms of this Agreement and have made, or caused to
be made under their supervision, a review in reasonable detail of the
transactions and condition of Company and its Subsidiaries during the
accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the
existence as at the date of such Officer's Certificate, of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action Company has taken, is taking and proposes to take with respect
thereto; and
(b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods
with those covenants and restrictions contained in Section 9 set forth
on the form of Compliance Certificate attached hereto;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 7.3, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to subclauses (ii), (iii) or (xii) of this subsection 8.1 will
differ in any material respect from the consolidated financial statements
that would have been delivered pursuant to such subclauses had no such
change in accounting principles and policies been made, then
(a) together with the first delivery of financial statements
pursuant to subclause (ii), (iii) or (xii) of this subsection 8.1
following such change, consolidated financial statements of Company
and its Subsidiaries for (y) the current Fiscal Year to the effective
date of such change and (z) either (i) the two full Fiscal Years
immediately preceding the Fiscal Year in which such change is made, in
each case prepared on a pro forma basis as if such change had been in
effect during such periods or (ii) a written description, in form and
with detail reasonably satisfactory to Administrative Agent, of the
impact such change would have had on the previous two full Fiscal
Years if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant
to subclause (ii), (iii) or (xii) of this subsection 8.1 following
such change, if required pursuant to subsection 1.2, a written
statement of the chief accounting officer or chief financial officer
of Company setting forth the differences (including any differences
that would affect any calculations relating to the financial covenants
set forth in subsection 9.6) which would have resulted if such
financial statements had been prepared without giving effect to such
change;
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(vi) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Company by independent chartered accountants in connection
with each annual, interim or special audit of the financial statements of
Company and its Subsidiaries made by such accountants, including any
comment letter submitted by such accountants to management in connection
with their annual audit;
(vii) Securities Filings and Press Releases: promptly upon their
becoming available, copies of:
(a) all regular and periodic reports and all registration
statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Company or any of its Subsidiaries with
any securities exchange or with the Securities and Exchange
Commission, the Alberta Securities Commission or any other
governmental or private regulatory authority, and
(b) all press releases, notices of material changes, and other
statements that the Company or any of its Subsidiaries would be
required, if they were reporting issuers, to make available generally
concerning material developments in the business of Company or any of
its Subsidiaries.
(viii) Litigation or Other Proceedings: promptly upon any Officer of
Company obtaining knowledge of (1) the institution of any Proceeding
against Company or any of its Subsidiaries or any property of Company or
any of its Subsidiaries not previously disclosed in writing by Company to
Lenders, (2) the Release of Hazardous Materials in violation of
Environmental Laws or (3) any material development in any Proceeding that,
in any case:
(a) has a reasonable possibility of giving rise to a Material
Adverse Effect; or
(b) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters
(ix) Financial Plans: as soon as practicable and in any event no later
than 30 days prior to the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year (the "Financial Plan" for
such Fiscal Year), including (a) a forecasted consolidated balance sheet
and forecasted consolidated statements of income and cash flows of Company
and its Subsidiaries for such Fiscal Year, and an explanation of the
assumptions on which such forecasts are based, (b) forecasted consolidated
statements of income and cash flows of Company and its Subsidiaries for
each month of such Fiscal Year, together with an explanation of the
assumptions on which such
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forecasts are based, and (c) such other information and projections as
Administrative Agent may reasonably request;
(x) Insurance: as soon as practicable after any material change in
insurance coverage maintained by or for Company and its Subsidiaries notice
thereof to Administrative Agent specifying the changes and reasons
therefor;
(xi) Governing Body: with reasonable promptness, written notice of any
change in the Governing Body of Holdings or Company;
(xii) New Subsidiaries: promptly upon any Person becoming a Subsidiary
of Company, a written notice setting forth with respect to such Person (a)
the date on which such Person became a Subsidiary of Company and (b) all of
the data required to be set forth in Schedule 7.1 annexed hereto with
respect to all Subsidiaries of Company (it being understood that such
written notice shall be deemed to supplement Schedule 7.1 annexed hereto
for all purposes of this Agreement from and after the date delivery of such
notice);
(xiii) Material Contracts: promptly, and in any event within ten
Business Days after any Officer of the Company becomes aware that any
Material Contract is terminated, will not be renewed, or is amended in a
manner materially adverse to the Company and its Subsidiaries taken as a
whole, a written statement describing such event with copies of such
amendments (if applicable);
(xiv) Borrowing Base Certificates: as soon as available and in any
event within 10 Business Days after the last Business Day of each month
ending after the Closing Date, a Borrowing Base Certificate dated as of the
last Business Day of such month, together with any additional schedules and
other information as Administrative Agent may reasonably request, provided
that if and for so long as the Total Utilization of Revolving Loan
Commitments exceeds the Borrowing Base then in effect less the aggregate
principal amount of all outstanding Term Loans including, for certainty,
the face amount of all outstanding Bankers' Acceptances and BA Discount
Notes thereunder, then Company shall prepare and provide Borrowing Base
Certificates and related information on a weekly basis until Requisite
Lenders otherwise direct. In addition to such monthly Borrowing Base
Certificates, Company may from time to time deliver to Administrative Agent
and Lenders on any Business Day after the Closing Date a Borrowing Base
Certificate dated as of such Business Day, together with any additional
schedules and other information as Administrative Agent may reasonably
request, and the most recent Borrowing Base Certificate described in this
clause that is delivered to Administrative Agent shall be used in
calculating the Borrowing Base as of any date of determination; and
(xv) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent.
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8.2 Existence, etc.
Except as permitted under subsection 9.7, Company will, and will cause
each of its Subsidiaries to at all times preserve and keep in full force and
effect (i) its existence in the jurisdiction of organization specified on
Schedule 7.1 or any other jurisdiction in Canada, and (ii) all rights and
franchises material to its business, provided that neither Company nor any of
its Subsidiaries shall be required to preserve any such right or franchise if
the Governing Body of Company or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
Company or such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Company, such Subsidiary or Lenders.
8.3 Payment of Taxes and Claims; Tax.
A. Payment of Taxes. Except where failure to do so could reasonably be
expected to have a Material Adverse Effect, Company will, and will cause each of
its Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect of any of its
income, businesses or franchises before any penalty accrues thereon, and all
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable and that by Applicable Law have or may become a
Lien upon any of its properties or assets, prior to the time when any penalty or
fine shall be incurred with respect thereto, provided that in the case of a tax,
assessment, charge or claim that has or may become a Lien against any of the
Collateral, Company shall either pay the same, or shall be contesting the same
in good faith by appropriate proceedings promptly instituted and diligently
conducted, and in that regard shall have established such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP and
(ii) such proceedings shall be operating to stay the sale of any portion of the
Collateral to satisfy such charge or claim.
B. Consolidated Returns. Company will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Holdings or any of its Subsidiaries).
8.4 Maintenance of Properties; Insurance; Application of Net Insurance/
Condemnation Proceeds.
A. Maintenance of Properties. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.
B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, environmental insurance and casualty insurance
with respect to liabilities, losses or damage in respect of the assets,
properties and businesses of Company and its Subsidiaries as may customarily be
carried or maintained under similar circumstances by corporations of
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established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained replacement
value casualty insurance on the Collateral under such policies of insurance,
with such insurance companies, in such amounts, with such deductibles, and
covering such risks as are at all times satisfactory to Administrative Agent in
its commercially reasonable judgment. Each such policy of insurance shall (a)
name Administrative Agent for the benefit of Lenders as an additional insured
thereunder as its interests may appear and (b) in the case of each casualty
insurance policy, contain a loss payable clause or endorsement, satisfactory in
form and substance to Administrative Agent, that names Administrative Agent for
the benefit of Lenders as the loss payee thereunder for any covered loss in
excess of Cdn. $15,000,000 and provides for at least 30 days prior written
notice to Administrative Agent of any modification or cancellation of such
policy.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Company or any of
its Subsidiaries of any business interruption insurance proceeds
constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event
of Default or Potential Event of Default shall have occurred and be
continuing, Company or such Subsidiary may retain and apply such Net
Insurance/Condemnation Proceeds for working capital purposes, and (b) if an
Event of Default or Potential Event of Default shall have occurred and be
continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans, and/or collateralize
Letters of Credit (and/or the Revolving Loan Commitments shall be reduced)
as provided in subsection 2.4B;
(ii) Net Insurance/Condemnation Proceeds Received by Company. Upon
receipt by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds other than from business interruption
insurance,
(a) so long as no Event of Default or Potential Event of Default
shall have occurred and be continuing, Company shall, or shall
cause one or more of its Subsidiaries to, promptly and diligently
apply such Net Insurance/Condemnation Proceeds to pay or
reimburse the costs of repairing, restoring or replacing the
assets in respect of which such Net Insurance/Condemnation
Proceeds were received or, to the extent not so applied, to
prepay the Loans, including collateralizing Bankers' Acceptances
(and/or the Revolving Loan Commitments shall be reduced) as
provided in subsection 2.4B, and
(b) if an Event of Default or Potential Event of Default shall
have occurred and be continuing, Company shall apply an amount
equal to such Net Insurance/Condemnation Proceeds to prepay the
Loans, including
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collateralizing Bankers' Acceptances (and/or the Commitments
shall be reduced) as provided in subsection 2.4B.
(iii) Net Insurance/Condemnation Proceeds Received by Administrative
Agent. Upon receipt by Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee,
(a) if and to the extent Company would have been required to
apply such Net Insurance/Condemnation Proceeds (if it had
received them directly) to prepay the Loans ,collateralize
Bankers' Acceptances and/or reduce the Revolving Loan
Commitments, Administrative Agent shall, and Company hereby
authorizes Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans and
collateralize Bankers' Acceptances (and/or the Revolving Loan
Commitments shall be reduced) as provided in subsection 2.4B, and
(b) to the extent the foregoing clause (a) does not apply, and
(1) the aggregate amount of such Net Insurance/Condemnation
Proceeds received (and reasonably expected to be received) by
Administrative Agent in respect of any covered loss does not
exceed Cdn.$15,000,000, Administrative Agent shall deliver such
Net Insurance/Condemnation Proceeds to Company, and Company
shall, or shall cause one or more of its Subsidiaries to,
promptly apply such Net Insurance/Condemnation Proceeds to the
costs of repairing, restoring, or replacing the assets in respect
of which such Net Insurance/Condemnation Proceeds were received,
and (2) if the aggregate amount of Net Insurance/Condemnation
Proceeds received (and reasonably expected to be received) by
Administrative Agent in respect of any covered loss exceeds Cdn.
Cdn.$15,000,000, Administrative Agent shall hold such Net
Insurance/Condemnation Proceeds in the Collateral Account
pursuant to the terms of the Debenture and, so long as Company or
any of its Subsidiaries proceeds diligently to repair, restore or
replace the assets of Company or such Subsidiary in respect of
which such Net Insurance/Condemnation Proceeds were received,
Administrative Agent shall from time to time disburse to Company
or such Subsidiary from the Collateral Account, to the extent of
any such Net Insurance/Condemnation Proceeds remaining therein in
respect of the applicable covered loss, amounts necessary to pay
the cost of such repair, restoration or replacement after the
receipt by Administrative Agent of invoices or other
documentation reasonably satisfactory to Administrative Agent
relating to the amount of costs so incurred and the work
performed (including, if required by Administrative Agent, lien
releases and architects' certificates), provided that if at any
time Administrative Agent reasonably determines (A) that Company
or such Subsidiary is not proceeding diligently with such repair,
restoration or replacement or (B) that such repair, restoration
or replacement cannot be completed with the Net
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Insurance/Condemnation Proceeds then held by Administrative Agent
for such purpose, together with funds otherwise available to
Company for such purpose, or that such repair, restoration or
replacement cannot be completed within 270 days after the receipt
by Administrative Agent of such Net Insurance/Condemnation
Proceeds, Administrative Agent shall, and Company hereby
authorizes Administrative Agent to, apply such Net Insurance/
Condemnation Proceeds to prepay the Loans, including
collateralizing Bankers' Acceptances (and/or the Revolving Loan
Commitments shall be reduced) as provided in subsection 2.4B.
8.5 Inspection Rights; Lender Meeting.
A. Inspection Rights. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by
Administrative Agent to visit and inspect any of the properties of Company or of
any of its Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), and conduct financial audits, all upon reasonable notice
and at such reasonable times during normal business hours and as often as may
reasonably be requested.
At any time or from time to time following the occurrence and during
the continuance of an Event of Default, Company shall, and shall cause each of
its Subsidiaries to, permit such visits and inspections, extractions,
discussions, and audits, and shall further permit Administrative Agent to
conduct such other environmental or property inspections and audits as
Administrative Agent deems appropriate, at the expense of Company.
B. Lender Meeting. Company will, upon the request of Administrative Agent
or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's principal offices
(or at such other location as may be agreed to by Company and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.
8.6 Compliance with Laws, etc.
Company shall comply, and shall cause each of its Subsidiaries to
comply, with the requirements of all Applicable Laws, rules, regulations and
orders of any Governmental Authority (including all Environmental Laws),
noncompliance with which could reasonably be expected to result in, individually
or in the aggregate, a Material Adverse Effect.
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8.7 Environmental Matters.
A. Environmental Disclosure. Company will deliver to Administrative Agent
and Lenders:
(i) Environmental Audits and Reports. As soon as practicable following
receipt thereof, copies of all environmental audits, assessments, studies,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility that,
individually or in the aggregate, could reasonably be expected to result in
a Material Adverse Effect or with respect to any Environmental Claims that,
individually or in the aggregate, could reasonably be expected to result in
a Material Adverse Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon
the occurrence thereof, written notice describing in reasonable detail (a)
any Release required to be reported to any Governmental Authority or Person
under any applicable Environmental Laws the existence of which could
reasonably be expected to result in one or more Environmental Claims
having, individually or in the aggregate, a Material Adverse Effect, and
(b) any remedial action taken by Company or any other Person required by
Environmental Law or in response to (1) any Hazardous Materials Activities
the existence of which could reasonably be expected to result in one or
more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.
(iii) Written Communications Regarding Environmental Claims, Releases,
Etc. As soon as practicable following the sending or receipt thereof by
Company or any of its Subsidiaries, a copy of any and all written
communications to or from any Governmental Authority or Person with respect
to (a) any Environmental Claims that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, (b)
any Release required to be reported to any Governmental Authority or Person
that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, and (c) any request for information
from any Governmental Authority investigating whether Company or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity or violation of Environmental Laws that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to (1) expose Company or any
of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect, or (2) affect the ability of Company or any of its
Subsidiaries to maintain in full force and effect all material Governmental
Authorizations required under
108
any Environmental Laws for their respective operations and (b) any proposed
action to be taken by Company or any of its Subsidiaries to modify current
operations in a manner that could reasonably be expected to subject Company
or any of its Subsidiaries to any additional obligations or requirements
under any Environmental Laws that could reasonably be expected to result
in, individually or in the aggregate, a Material Adverse Effect.
B. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
Company shall, in compliance with all applicable Environmental Laws and
Governmental Authorizations, promptly undertake, and shall cause each of
its Subsidiaries promptly to undertake, any and all investigations,
studies, sampling, testing, abatement, cleanup, removal, remediation or
other response actions necessary to remove, remediate, clean up or xxxxx
any Hazardous Materials or Hazardous Materials Activity on, under or about
any Facility or which originated from any Facility that is in violation of
any Environmental Laws or Governmental Authorizations, and for which
Company or any of its Subsidiaries is responsible under Applicable Law, or
that presents a risk of giving rise to an Environmental Claim against
Company or any of its Subsidiaries, in any case where individually or in
the aggregate failure to do so could reasonably be expected to result in a
Material Adverse Effect.
(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. Company shall promptly take, and shall cause each of
its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws or Governmental
Authorizations by Company or its Subsidiaries that could reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect and (ii) make an appropriate response to any Environmental Claim
against Company or any of its Subsidiaries and discharge any obligations it
may have to any Person thereunder in any case where individually or in the
aggregate failure to do so could reasonably be expected to result in a
Material Adverse Effect.
8.8 First Priority Liens.
Company shall ensure that:
(i) subject only to subsection 8.9, all of its and its Subsidiaries'
present and after acquired property, both real and personal, is at all
times subject to the Liens constituted by the Collateral Documents, and
(ii) such Liens at all times constitute First Priority Liens with
respect to all such property, other than (A) property that is, in the
opinion of the Administrative Agent acting reasonably, immaterial, both
individually and in the aggregate, in terms of its value and its use in the
operations of Company and its Subsidiaries or (B) equipment which has
109
been purchased or leased by Company or a Subsidiary of Company but which
equipment has not yet entered the jurisdiction where the equipment will be
used in the business of Company or such Subsidiary, so long as Company or
such Subsidiary intends to bring such equipment into a jurisdiction where
the Administrative Agent would have a First Priority Lien in such
equipment, and Company or such Subsidiary does so as soon as practicable
following such acquisition by purchase or lease.
8.9 Execution of Subsidiary Guarantee and Personal Property Collateral
Documents After the Closing Date.
A. Execution of Subsidiary Guarantee and Personal Property Collateral
Documents. In the event that any Person becomes a Subsidiary of Company after
the date hereof, Company will promptly notify Administrative Agent of that fact
and cause such new Subsidiary to execute and deliver to Administrative Agent a
counterpart of, or joinder agreement in respect of, the Subsidiary Guarantee,
and to issue a new Debenture and to take all such further actions and execute
all such further documents and instruments (including actions, documents and
instruments comparable to those described in subsection 6.1K) as may be
necessary or, in the opinion of Administrative Agent, desirable to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and perfected
Lien on all of the personal property and assets of such Subsidiary. In addition,
(a) if the Capital Stock of such new Subsidiary is not owned directly by the
Company or by a Subsidiary that has previously provided a Subsidiary Pledge
Agreement that remains in effect, the Company shall cause the Subsidiary that
owns the Capital Stock of such new Subsidiary, to execute and deliver to
Administrative Agent a Subsidiary Pledge Agreement, (b) the Company shall
deliver, or cause the Subsidiary that owns the Capital Stock of the new
Subsidiary to deliver, to Administrative Agent all certificates representing the
Capital Stock of such new Subsidiary (accompanied by irrevocable undated stock
powers, duly endorsed in blank), and (c) the Company shall cause the new
Subsidiary to become a party to the Company Pledge Agreement or Subsidiary
Pledge Agreement, as applicable (in its capacity as the entity whose securities
are the subject of such Pledge Agreement), either by executing any new Pledge
Agreement or an addition agreement to any existing Pledge Agreement.
B. Subsidiary Organizational Documents, Legal Opinions, Etc. Company shall
deliver to Administrative Agent, together with the Loan Documents provided under
subsection 8.9A,
(i) certified copies of such Subsidiary's Organizational Documents,
together with a good standing certificate from the appropriate governmental
official of the jurisdiction of its organization and each other
jurisdiction in which such Person is qualified to do business, each to be
dated a recent date prior to their delivery to Administrative Agent,
(ii) a certificate executed by the secretary or similar officer of
such Subsidiary as to (a) the fact that the attached resolutions of the
Governing Body of such Subsidiary approving and authorizing the execution,
delivery and performance of such Loan Documents are in full force and
effect and have not been modified or amended and
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(b) the incumbency and signatures of the officers of such Subsidiary
executing such Loan Documents,
(iii) a favorable opinion of counsel to such Subsidiary, in form and
substance satisfactory to Administrative Agent, acting reasonably, as to
(a) the due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan
Documents, (c) the enforceability of such Loan Documents against such
Subsidiary and (d) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to such Loan
Documents) as Administrative Agent may reasonably request.
Section 9. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans,
the satisfaction of all Bankers' Acceptances and other Obligations and the
cancellation or expiration of all Letters of Credit, unless Requisite Lenders
shall otherwise give prior written consent, Company shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 9.
9.1 Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guarantee, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Domestic Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection 9.4
and, upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
(iii) Company and its Domestic Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases
aggregating not in excess of Cdn. $20,000,000 at any one time;
(iv) Company may become and remain liable with respect to Indebtedness
to any Subsidiary Guarantor, and any wholly-owned Domestic Subsidiary of
Company and Finance Co. may become and remain liable with respect to
Indebtedness to Company or any Subsidiary Guarantor, provided that (a) a
Lien on all such intercompany Indebtedness shall have been granted to
Administrative Agent for the benefit of Lenders, and (b) if such
intercompany Indebtedness is evidenced by a promissory note or other
instrument, such promissory note or instrument shall have been pledged to
Administrative Agent pursuant to a Debenture;
111
(v) Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness described in Schedule 9.1 annexed hereto;
(vi) Company may remain liable with respect to Indebtedness evidenced
by the Senior Notes in an aggregate principal amount not to exceed U.S.
$200,000,000; and
(vii) Company and its Domestic Subsidiaries may become and remain
liable with respect to other Indebtedness in an aggregate principal amount
not to exceed Cdn. $20,000,000 at any time outstanding.
9.2 Liens and Related Matters.
A. Prohibition on Liens. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, except:
(i) Permitted Encumbrances, provided that nothing in this Agreement
shall be construed as postponing or subordinating the Liens of the
Collateral Documents to any such Permitted Encumbrance;
(ii) Liens described in Schedule 9.2 annexed hereto;
(iii) other Liens securing obligations in an aggregate amount not to
exceed Cdn.$20,000,000 at any time outstanding, provided that in the case
of Liens securing the Bonding Program, to the extent that such obligations
are also secured by a Letter of Credit (or cash, to the extent permitted by
subclause (iv) below), the face amount of such Letter of Credit (or the
cash amount, as applicable) shall not count against the $20,000,000; and
(iv) Liens on cash as security for the Bonding Program in an amount
not to exceed Cdn.$30,000,000, but only if (a) at the time such Liens are
granted, there is no Fronting Bank, and there is no other Revolving Lender
or Revolving Lenders satisfactory to the providor(s) of the Bonding Program
that have agreed to provide all Letters of Credit to serve as security
therefor, and (ii) after giving effect to the granting of such Liens, the
sum of the amount of cash subject to such Liens plus the Letters of Credit
Usage shall not exceed Cdn.$30,000,000.
Company shall not, and shall not permit any of its Subsidiaries to,
permit to remain in effect for more than 30 days after it becomes aware of the
same, any financing statement or other similar registration with respect to any
property, asset, income or profits of any Loan Party under any security
recording or notice statute, except for Liens permitted by this subsection 9.2,
and filings or registrations in respect of interests that do not relate to
Liens.
112
B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 9.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured, provided that notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 9.2A.
C. No Further Negative Pledges. Neither Company nor any of its Subsidiaries
shall enter into any agreement (other than the Senior Note Indenture, or any
agreement prohibiting only the creation of Liens securing Indebtedness
subordinated in right of payment to the Obligations) prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired to secure Indebtedness under any senior credit facility,
including this Agreement, except with respect to specific property encumbered to
secure payment of particular Indebtedness or to be sold pursuant to an executed
agreement with respect to an Asset Sale.
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Company will not, and will not permit any of its wholly-owned
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's Capital Stock owned by Company or any other Subsidiary
of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to
Company or any other Subsidiary of Company, (iii) make loans or advances to
Company or any other Subsidiary of Company, or (iv) transfer any of its property
or assets to Company or any other Subsidiary of Company, except (a) as provided
in this Agreement, (b) as may be provided in an agreement with respect to an
Asset Sale, and (c) as provided in the Senior Note Indenture.
9.3 Investments; Acquisitions.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, or acquire, by purchase or otherwise, all or substantially all
the business, property or fixed assets of, or Capital Stock or other ownership
interest of any Person, or any division or line of business of any Person
except:
(i) Company and its Subsidiaries may make and own Investments in Cash
and Cash Equivalents;
(ii) Company and its wholly-owned Domestic Subsidiaries may make and
own additional equity Investments in their respective wholly-owned Domestic
Subsidiaries and Finance Co.;
(iii) Company and its Subsidiaries may make intercompany loans to the
extent permitted under subsection 9.1(iv);
113
(iv) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 9.8;
(v) Company and its Subsidiaries may continue to own the Investments
owned by them and described in Schedule 9.3 annexed hereto;
(vi) Company may acquire and hold obligations of one or more officers
or other employees of Company or its Subsidiaries in connection with such
officers' or employees' acquisition of shares of Holdings' common stock, so
long as no cash is actually advanced by Company or any of its Subsidiaries
to such officers or employees in connection with the acquisition of any
such obligations;
(vii) Company and its Subsidiaries may receive and hold promissory
notes and other non-cash consideration received in connection with any
Asset Sale permitted by subsection 9.7;
(viii) Company and its Subsidiaries may, in the ordinary course of
business, exchange accounts receivable that are excluded from Eligible
Accounts Receivable under clause (vi) thereof , for Investments;
(ix) Company may make and own Permitted Joint Venture Investments in
an aggregate amount not to exceed at any time Cdn.$10,000,000; and
(x) Company and its Domestic Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time
Cdn.$15,000,000.
For certainty, neither the acquisition nor the retirement of Senior
Notes in connection with any exchange of exchange notes therefor (containing
substantially identical terms (except that such exchange notes will not contain
terms with respect to transfer restrictions or the accrual of liquidated
damages) to the Senior Notes), as contemplated by the Senior Note Indenture,
shall constitute an Investment.
9.4 Contingent Obligations.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with respect
to Contingent Obligations in respect of the Subsidiary Guarantee;
(ii) Company may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit, and Company and its
Subsidiaries may become and remain liable with respect to Contingent
Obligations in respect of other letters of credit in an aggregate amount
not to exceed at any time Cdn. $10,000,000;
114
(iii) Company may become and remain liable with respect to Contingent
Obligations under Currency Agreements with respect to Indebtedness under
the Senior Notes;
(iv) Company may become and remain liable with respect to Contingent
Obligations under other Hedge Agreements with respect to Indebtedness in an
aggregate notional principal amount not to exceed at any time Cdn.
$30,000,000;
(v) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary indemnification
and purchase price adjustment obligations incurred in connection with Asset
Sales or other sales of assets;
(vi) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of any obligations of Company
or any Subsidiary Guarantors permitted by subsection 9.1;
(vii) Company and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 9.4 annexed
hereto;
(viii) Subsidiary Guarantors may become and remain liable with respect
to Contingent Obligations arising under their guarantees of the Senior
Notes;
(ix) Company and its Subsidiaries may become and remain liable for
Contingent Obligations under the Bonding Program; and
(x) Company and its Domestic Subsidiaries may become and remain liable
with respect to other Contingent Obligations, provided that the maximum
aggregate liability, contingent or otherwise, of Company and its Domestic
Subsidiaries in respect of all such other Contingent Obligations shall at
no time exceed Cdn. $10,000,000.
9.5 Restricted Junior Payments.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment, provided that Company may make Restricted Junior
Payments to Holdings:
(i) in an aggregate amount not to exceed Cdn. $1,000,000 in any Fiscal
Year, to the extent necessary to permit Holdings to pay general
administrative costs and expenses,
(ii) so long as no Event of Default or Potential Event of Default
shall have occurred and be continuing or shall be caused thereby, in an
aggregate amount not to exceed Cdn. $2,000,000 in any Fiscal Year, or Cdn.
$10,000,000 during the term of this Agreement, for distribution to Parent
to the extent necessary to permit Parent to repurchase shares of Parent
Common Stock (or options or warrants to acquire Parent Common Stock) from
employees of Company; and
115
(iii) so long as no Event of Default or Potential Event of Default
shall have occurred and be continuing or shall be caused thereby, to the
extent necessary to permit Holdings to discharge its tax liabilities, so
long as Holdings applies the amount of any such Restricted Junior Payment
for such purpose.
9.6 Financial Covenants.
A. Minimum Interest Coverage Ratio. Company shall not permit the ratio
of (i) Consolidated EBITDA to (ii) Consolidated Cash Interest Expense for (a)
the period of the Closing Date through March 31, 2004, to be less than
2.10:1.00, (b) the period of the Closing Date through June 30, 2004, to be less
than 2.25:1.00, (c) the period of the Closing Date through September 30, 2004,
to be less than 2.25:1.00, and (d) for any four-Fiscal Quarter period ending
during any of the periods set forth below to be less than the correlative ratio
indicated:
Minimum Interest
Period Coverage Ratio
------ ---------------
October 1, 2004 - December 31, 2004 2.5:1.00
January 1, 2005 - March 31, 2005 2.5:1.00
April 1, 2005 - June 30, 2005 2.5:1.00
July 1, 2005 - September 30, 2005 2.75:1.00
October 1, 2005 - December 31, 2005 3.00:1.00
January 1, 2006 - March 31, 2006 3.00:1.00
April 1, 2006 - June 30, 2006 3.00:1.00
July 1, 2006 - September 30, 2006 3.00:1.00
October 1, 2006 - December 31, 2006 3.00:1.00
January 1, 2007 - March 31, 2007 3.00:1.00
April 1, 2007 - June 30, 2007 3.00:1.00
July 1, 2007 - September 30, 2007 3.00:1.00
October 1, 2007 - December 31, 2007 3.00:1.00
January 1, 2008 - March 31, 2008 3.00:1.00
April 1, 2008 - June 30, 2008 3.00:1.00
July 1, 2008 - September 30, 2008 3.00:1.00
B. Minimum Fixed Charge Coverage Ratio. Company shall not permit the
ratio of (i) Consolidated EBITDA to (ii) Consolidated Fixed Charges for (a) the
period of the Closing Date through March 31, 2004, to be less than 1.10:1.00,
(b) the period of the Closing Date through June 30, 2004, to be less than
1.20:1.00, (c) the period of the Closing Date through September 30, 2004, to be
less than 1.25:1.00, and (d) any four-Fiscal Quarter period ending during any of
the periods set forth below to be less than the correlative ratio indicated:
Minimum Fixed
Period Charge Coverage Ratio
------ ---------------------
October 1, 2004 - December 31, 2004 1.25:1.00
116
Minimum Fixed
Period Charge Coverage Ratio
------ ---------------------
January 1, 2005 - March 31, 2005 1.25:1.00
April 1, 2005 - June 30, 2005 1.25:1.00
July 1, 2005 - September 30, 2005 1.25:1.00
October 1, 2005 - December 31, 2005 1.25:1.00
January 1, 2006 - March 31, 2006 1.25:1.00
April 1, 2006 - June 30, 2006 1.25:1.00
July 1, 2006 - September 30, 2006 1.25:1.00
October 1, 2006 - December 31, 2006 1.25:1.00
January 1, 2007 - March 31, 2007 1.25:1.00
April 1, 2007 - June 30, 2007 1.25:1.00
July 1, 2007 - September 30, 2007 1.25:1.00
October 1, 2007 - December 31, 2007 1.25:1.00
January 1, 2008 - March 31, 2008 1.25:1.00
April 1, 2008 - June 30, 2008 1.25:1.00
July 1, 2008 - September 30, 2008 1.25:1.00
C. Maximum Leverage Ratio. Company shall not permit the Consolidated
Leverage Ratio as of the last day of the most recently ended Fiscal Quarter
ending during any of the periods set forth below to exceed the correlative ratio
indicated:
Period Maximum Leverage Ratio
------ ----------------------
January 1, 2004 - March 31, 2004 4.25:1.00
April 1, 2004 - June 30, 2004 4.25:1.00
July 1, 2004 - September 30, 2004 4.25:1.00
October 1, 2004 - December 31, 2004 4.15:1.00
January 1, 2005 - March 31, 2005 4.00:1.00
April 1, 2005 - June 30, 2005 3.75:1.00
July 1, 2005 - September 30, 2005 3.75:1.00
October 1, 2005 - December 31, 2005 3.50:1.00
January 1, 2006 - March 31, 2006 3.50:1.00
April 1, 2006 - June 30, 2006 3.25:1.00
July 1, 2006 - September 30, 2006 3.25:1.00
October 1, 2006 - December 31, 2006 3.25:1.00
January 1, 2007 - March 31, 2007 3.25:1.00
April 1, 2007 - June 30, 2007 3.00:1.00
July 1, 2007 - September 30, 2007 3.00:1.00
October 1, 2007 - December 31, 2007 3.00:1.00
January 1, 2008 - March 31, 2008 2.75:1.00
April 1, 2008 - June 30, 2008 2.75:1.00
July 1, 2008 - September 30, 2008 2.75:1.00
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D. Maximum Senior Leverage Ratio. Company shall not permit the
Consolidated Senior Leverage Ratio as of the last day of the most recently ended
Fiscal Quarter ending during any of the periods set forth below to exceed the
correlative ratio indicated:
Maximum
Period Senior Leverage Ratio
------ ---------------------
January 1, 2004 - March 31, 2004 1.25:1.00
April 1, 2004 - June 30, 2004 1.25:1.00
July 1, 2004 - September 30, 2004 1.25:1.00
October 1, 2004 - December 31, 2004 1.25:1.00
January 1, 2005 - March 31, 2005 1.25:1.00
April 1, 2005 - June 30, 2005 1.25:1.00
July 1, 2005 - September 30, 2005 1.00:1.00
October 1, 2005 - December 31, 2005 1.00:1.00
January 1, 2006 - March 31, 2006 1.00:1.00
April 1, 2006 - June 30, 2006 1.00:1.00
July 1, 2006 - September 30, 2006 1.00:1.00
October 1, 2006 - December 31, 2006 1.00:1.00
January 1, 2007 - March 31, 2007 1.00:1.00
April 1, 2007 - June 30, 2007 1.00:1.00
July 1, 2007 - September 30, 2007 1.00:1.00
October 1, 2007 - December 31, 2007 1.00:1.00
January 1, 2008 - March 31, 2008 1.00:1.00
April 1, 2008 - June 30, 2008 1.00:1.00
July 1, 2008 - September 30, 2008 1.00:1.00
E. Minimum Consolidated EBITDA. Company shall not permit Consolidated
EBITDA for any four-Fiscal Quarter period ending during any of the periods set
forth below to be less than the correlative amount indicated:
Minimum
Period Consolidated EBITDA
------ -------------------
January 1, 2004 - March 31, 2004 $65,000,000
April 1, 2004 - June 30, 2004 $67,500,000
July 1, 2004 - September 30, 2004 $70,000,000
October 1, 2004 - December 31, 2004 $75,000,000
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Minimum
Period Consolidated EBITDA
------ -------------------
January 1, 2005 - March 31, 2005 $80,000,000
April 1, 2005 - June 30, 2005 $82,500,000
July 1, 2005 - September 30, 2005 $85,000,000
October 1, 2005 - December 31, 2005 $90,000,000
January 1, 2006 - March 31, 2006 $90,000,000
April 1, 2006 - June 30, 2006 $90,000,000
July 1, 2006 - September 30, 2006 $90,000,000
October 1, 2006 - December 31, 2006 $90,000,000
January 1, 2007 - March 31, 2007 $90,000,000
April 1, 2007 - June 30, 2007 $90,000,000
July 1, 2007 - September 30, 2007 $90,000,000
October 1, 2007 - December 31, 2007 $90,000,000
January 1, 2008 - March 31, 2008 $90,000,000
April 1, 2008 - June 30, 2008 $90,000,000
July 1, 2008 - September 30, 2008 $90,000,000
9.7 Restriction on Fundamental Changes; Asset Sales.
Company shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Company or any of its
Subsidiaries, or enter into any transaction of amalgamation, merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets (including its
notes or receivables or Capital Stock of a Subsidiary, whether newly issued or
outstanding), whether now owned or hereafter acquired, except:
(i) any Subsidiary of Company may be amalgamated or merged with or
into Company or any wholly-owned Subsidiary Guarantor, or be liquidated,
wound up or dissolved, provided that in such case Company or such
wholly-owned Subsidiary Guarantor shall be the continuing or surviving
Person; or all or any part of the business, property or assets of any
Subsidiary of Company may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to
Company or any wholly-owned Subsidiary Guarantor;
(ii) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales, provided that
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(iii) Company and its Subsidiaries may dispose of obsolete, worn out
or surplus property in the ordinary course of business;
119
(iv) Company and its Subsidiaries may make Asset Sales of assets
having a fair market value not in excess of $15,000,000 in any Fiscal Year,
provided that (a) the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof, (b) at least 75% of
the consideration received shall be cash, and (c) the proceeds of such
Asset Sales shall be applied as required by subsection 2.4B(iii)(a) or
subsection 2.4G;
(v) in order to resolve disputes (or to settle with non-paying account
debtors) that occur in the ordinary course of business, Company and its
Subsidiaries may discount or otherwise compromise for less than the face
value thereof, notes or accounts receivable;
(vi) Company or a Subsidiary may sell or dispose of shares of Capital
Stock of any of its Subsidiaries in order to qualify members of the
Governing Body of the Subsidiary if and to the extent required by
Applicable Law;
(vii) the Acquisition and the Amalgamation may occur in accordance
with the terms and conditions of the Acquisition Agreement and the Articles
of Amalgamation, respectively; and
(viii) except for clause (i) above, any Person may be merged with or
into Company or any Subsidiary of Company, and Company and/or Subsidiary of
Company may amalgamate with any such Person, if the acquisition of the
Capital Stock of such Person by Company or such Subsidiary would have been
permitted pursuant to subsection 9.3, provided that:
(a) in the case of a merger with or into Company, Company shall
be the continuing or surviving Person;
(b) in the case of any other merger, if a Subsidiary is not the
surviving or continuing Person, the surviving Person becomes a
Subsidiary of Company and complies with the provisions of subsection
9.9, and
(c) no Potential Event of Default or Event of Default shall have
occurred or be continuing immediately after giving effect thereto.
9.8 Consolidated Capital Expenditures.
Company shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any period indicated below, in an
aggregate amount in excess of the corresponding amount (the "Maximum
Consolidated Capital Expenditures Amount") set forth below opposite such period,
provided that the Maximum Consolidated Capital Expenditures Amount for any
period shall be increased by an amount equal to the excess, if any, of the
Maximum Consolidated Capital Expenditures Amount for the previous period
(without giving effect to any adjustment in accordance with this proviso) over
the actual amount of Consolidated Capital Expenditures for such previous period
and provided, further, that
120
Consolidated Capital Expenditures Amount for the previous period (without giving
effect to any adjustment in accordance with this proviso) over the actual amount
of Consolidated Capital Expenditures for such previous period and provided,
further, that Consolidated Capital Expenditures made or incurred in any period
shall be deemed to be made first in respect of amounts carried over from the
immediately preceding period pursuant to the foregoing proviso and second in
respect of the Consolidated Capital Expenditures Amount specified below for such
period:
Maximum Consolidated
Fiscal Year Capital Expenditures
----------- --------------------
Closing - March 31, 2004 $ 6,000,000
April 1, 2004 - March 31, 2005 $52,000,000
April 1, 2005 - March 31, 2006 $66,000,000
April 1, 2006 - March 31, 2007 $97,000,000
April 1, 2007 - March 31, 2008 $24,000,000
April 1, 2008 - March 31, 2009 $20,000,000
9.9 Transactions with Shareholders and Affiliates.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Parent or Holdings or with any Affiliate of Company or Holdings or of any such
holder:
(i) in the case of any agreement or arrangement pursuant to which any
Loan Party is obligated to pay any amounts to Permitted Holders or any of
their respective Affiliates, without the prior written consent of
Administrative Agent, and
(ii) in all other cases, on terms that are less favorable to Company
or that Subsidiary, as the case may be, than those that might be obtained
at the time from Persons who are not such a holder or Affiliate,
provided that the foregoing restriction shall not apply to:
(a) any transaction between Company and any of its wholly-owned
Subsidiaries or between any of its wholly-owned Subsidiaries,
(b) reasonable and customary fees paid to members of the
Governing Bodies of Company and its Subsidiaries,
(c) payments of fees to Permitted Holders and other equity
investors on the Closing Date not to exceed U.S. $6,000,000 and
reimbursement of expenses to Permitted Holders and other equity
investors on the Closing Date,
(d) so long as no Event of Default or Potential Event of Default
shall have occurred and be continuing or shall be caused thereby,
payments of Management Fees in accordance with the Advisory Services
Agreement and
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reimbursement of expenses of Permitted Holders as provided therein, in
each case so long as such payment is permitted under subsection 9.5,
and
(e) indemnification payments to officers or directors of Loan
Parties, and customary board of directors fees and expenses.
9.10 Sales and Lease-Backs.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real or personal), whether now owned or
hereafter acquired,
(i) that Company or any of its Subsidiaries has sold or transferred or
is to sell or transfer to any other Person (other than Company or any of
its Subsidiaries); or
(ii) that Company or any of its Subsidiaries intends to use for
substantially the same purpose as any other property that has been or is to
be sold or transferred by Company or any of its Subsidiaries to any Person
(other than Company or any of its Subsidiaries) in connection with such
lease;
provided that Company and its Subsidiaries may become and remain liable as
lessee, guarantor or other surety with respect to any such lease if and to the
extent that Company or any of its Subsidiaries would be permitted to enter into,
and remain liable under, such lease to the extent that the transaction would be
permitted under subsection 9.1, assuming the sale and lease back transaction
constituted Indebtedness in a principal amount equal to the gross proceeds of
the sale.
9.11 Conduct of Business.
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders.
9.12 Amendments or Waivers of Certain Agreements.
Neither Company nor any of its Subsidiaries will agree to any material
amendment to, or waive any of its material rights under, any Related Document
after the Closing Date without in each case obtaining the prior written consent
of Requisite Lenders.
9.13 Fiscal Year.
Company shall not change its Fiscal Year end from March 31.
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Section 10. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
10.1 Failure to Make Payments When Due.
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; failure by Company to collateralize any Bankers'
Acceptance or Letter of Credit when required hereunder; or failure by Company to
pay any interest on any Loan or any fee or any other amount due under this
Agreement, within five days after the date due; or
10.2 Default in Other Agreements.
(i) Failure of Company or any of its Subsidiaries to pay when due any
principal of or interest on one or more items of Indebtedness (other than
Indebtedness referred to in subsection 10.1) or Contingent Obligations in
an individual principal amount of Cdn.$5,000,000 or more or with an
aggregate principal amount of Cdn.$7,500,000 or more, in each case beyond
the end of any grace period provided therefor; or
(ii) breach or default by Company or any of its Subsidiaries with
respect to any other material term of (a) one or more items of Indebtedness
or Contingent Obligations in the individual or aggregate principal amounts
referred to in clause (i) above, or (b) any loan agreement, mortgage,
indenture or other agreement relating to such item(s) of Indebtedness or
Contingent Obligation(s), if the effect of such failure, breach or default
is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders)
to cause, that Indebtedness or Contingent Obligation(s) to become or be
declared due and payable prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be (upon the giving
or receiving of notice, lapse of time, both, or otherwise); or
10.3 Breach of Certain Covenants.
Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 8.2(i) or Section 9 of this Agreement; or
10.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by
Holdings, Company or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Holdings, Company or any of its
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made or
deemed made, provided that, if such false representation, warranty,
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certification or statement is capable of being corrected, and the applicable
Loan Party causes such representation, warranty, certification or statement to
be corrected by no later than 30 days after it is made or deemed made, the
falseness of such representation, warranty, certification or statement shall not
constitute an Event of Default; or
10.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 10, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an Officer of Company or such Loan Party becoming aware of such
default or (ii) receipt by Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
10.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
If any case, proceeding or other action shall be instituted in any
court of competent jurisdiction, against Holdings, Company or any Subsidiary
seeking in respect of such Person an adjudication in bankruptcy, reorganization
of its indebtedness, dissolution, winding up, liquidation, a composition,
proposal or arrangement with creditors, a readjustment of debts, the appointment
of a trustee, receiver, receiver and manager, interim receiver, custodian,
liquidator or any Person with similar powers with respect to such Person or of
all or any substantial part of its assets, or any other like relief in respect
of such Person under a Bankruptcy Law, the Companies' Creditors Arrangement Act
(Canada), the Winding Up Act (Canada), the Partnership Act (Alberta) or any
other bankruptcy, insolvency or analogous law and:
(i) such case, proceeding or other action results in an entry of an
order for relief or any such adjudication or appointment; or
(ii) if such case, proceeding or other action is being contested in
good faith and by appropriate proceedings, the same shall continue
undismissed, or unstayed and in effect, for any period of 45 days past the
commencement of such case, proceeding or action; or
10.7 Voluntary Insolvency.
If Company, Holdings or any Subsidiary:
(i) makes any assignment in bankruptcy or makes any other assignment
for the benefit of creditors;
(ii) makes any proposal under a Bankruptcy Law or any comparable law,
seeks relief under the Companies' Creditors Arrangement Act (Canada), the
Winding Up Act (Canada) or any other bankruptcy, insolvency or analogous
law, or files a petition or proposal to take advantage of any act of
insolvency;
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(iii) consents to or acquiesces in the appointment of a trustee in
bankruptcy, receiver, receiver and manager, interim receiver, custodian,
sequestrator or other person with similar powers of itself or of all or any
portion of its assets which is, in the opinion of the Requisite Lenders,
material;
(iv) files a petition or otherwise commences any proceeding seeking
any reorganization, arrangement, composition, administration or
readjustment under any applicable bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting creditors' rights;
(v) commits an act of bankruptcy under a Bankruptcy Law;
(vi) is adjudicated insolvent under a Bankruptcy Law, or admits in
writing its inability to pay its debts as they become due; or
(vii) consents to, or acquiesces in, the filing of such assignment,
proposal, relief, petition, proposal, appointment or proceeding or takes
any action to authorize or effect any of the foregoing; or
10.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of Cdn. $5,000,000 or
(ii) in the aggregate at any time an amount in excess of Cdn. $7,500,000 (in
either case not adequately covered by insurance of a solvent unaffiliated
insurance company that has not denied coverage in writing) shall be entered or
filed against Company or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of any
proposed sale thereunder); or
10.9 Dissolution.
Any order, judgment or decree of a court of competent jurisdiction
shall be entered against Holdings, Company or any of its Subsidiaries decreeing
the dissolution or split up of Holdings, Company or that Subsidiary and such
order shall remain undischarged or unstayed for a period in excess of 60 days;
or
10.10 Seizure.
If property and assets of Company or any Subsidiary having an
aggregate fair market value in excess of Cdn $5,000,000 is seized or otherwise
attached by anyone pursuant to any legal process or other means, including
distress, execution or any other step or proceeding with similar effect and such
attachment, step or other proceeding shall continue in effect and not be
released, discharged, bonded or stayed within 60 days; or
10.11 Change in Control.
A Change in Control shall have occurred; or
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10.12 Invalidity of Loan Documents; Failure of Security; Repudiation of
Obligations.
At any time after the execution and delivery thereof:
(i) any Loan Document or any provision thereof, for any reason other
than the satisfaction in full of all Obligations, shall cease to be in full
force and effect (other than in accordance with its terms),
(ii) any Loan Document or any provision thereof shall be declared by a
court of competent jurisdiction to be null and void,
(iii) Administrative Agent shall not have or shall cease to have a
valid and perfected First Priority Lien in Collateral purported to be
covered by the Collateral Documents which has a fair market value,
individually or in the aggregate, exceeding Cdn.$5,000,000, or
(iv) any Loan Party shall contest the validity or enforceability of
any Loan Document or any provision thereof in writing or deny in writing
that it has any further liability, including with respect to future
advances by Lenders, under any Loan Document or any provision thereof to
which it is a party;
unless, in the case of clause (i) above, such unenforceability is capable of
remedy and the applicable Loan Party remedies such unenforceability within 30
days of it being determined, or in the case of clause (ii) above such Loan Party
appeals such declaration and has it finally overturned within 30 days of such
declaration having been made, in which case the unenforceability, declaration or
failure shall not constitute an Event of Default.
10.13 Conduct of Business By Holdings.
Holdings shall (i) engage in any business other than entering into and
performing its obligations under and in accordance with the Loan Documents and
Related Documents to which it is a party, and its obligations to bonding
companies referred to in subclause (iii) below, (ii) own any assets other than
(a) the capital stock of Company, and (b) Cash and Cash Equivalents in an amount
not exceeding the amounts theretofore permitted to be distributed to Holdings
under subsection 9.5 plus the aggregate amount of Net Securities Proceeds from
the issuance of Capital Stock of Holdings or from any capital contribution to
Holdings by any holder of the Capital Stock thereof not required to be applied
to prepay the Loans pursuant to subsection 2.4B(iv)(c), or (iii) have any
Indebtedness or other liability other than its obligations under the Holdings
Guarantee or the Holdings Preferred Stock, or liabilities to bonding companies
in respect of any Bonding Program; or
10.14 Conduct of Business by Finance Co.
Finance Co. shall (i) engage in any business other than entering into
and performing its obligations under, in accordance with, and as contemplated
in, the Loan
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Documents, the Senior Notes, any guarantee related to the Senior Notes, and
Related Documents to which it is a party, or (ii) own any assets other than
Loans made to a Loan Party, and any notes evidencing the same.
10.15 Failure to Consummate Acquisition or Amalgamation.
The Acquisition or the Amalgamation shall not be consummated in
accordance with this Agreement and the applicable Related Documents concurrently
with the making of the initial Loans, or the Acquisition or the Amalgamation
shall be unwound, reversed or otherwise rescinded in whole or in part for any
reason; or
10.16 Amendment of Certain Documents of Holdings.
Holdings shall agree to any material amendment to, or waive any of its
material rights under, or otherwise change any material terms of, any of the
Acquisition Agreement, the Articles of Amalgamation or the Holdings Certificate
of Designations, in each case as in effect on the Closing Date, in a manner
adverse to Holdings or any of its Subsidiaries or to Lenders without the prior
written consent of Administrative Agent and Requisite Lenders:
then:
(i) upon the occurrence of any Event of Default described in
subsection 10.6 or 10.7, each of (a) the unpaid principal amount of and
accrued interest on the Loans, (b) an amount equal to the aggregate face
amount of all Bankers' Acceptances and the maximum amount that may at any
time be drawn under all Letters of Credit then outstanding (whether or not
any beneficiary under any such Letter of Credit shall have presented, or
shall be entitled at such time to present, the drafts or other documents or
certificates required to draw under such Letter of Credit), and (c) all
other Obligations shall automatically become immediately due and payable,
without presentment, demand, protest or other requirements of any kind, all
of which are hereby expressly waived by Company to the extent permitted by
Applicable Law, and the obligation of each Lender to make any Loan, the
obligation of Fronting Bank to issue any Letter of Credit and the right of
any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and
(ii) upon the occurrence and during the continuance of any other Event
of Default, Administrative Agent shall, upon the written request or with
the written consent of Requisite Lenders, by written notice to Company,
declare all or any portion of the amounts described in clauses (i)(a)
through (c) above to be, and the same shall forthwith become, immediately
due and payable, and the obligation of each Lender to make any Loan, the
obligation of Fronting Bank to issue any Letter of Credit and the right of
any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, provided that the foregoing shall not affect in any way the
obligations of Revolving Lenders under subsection 4.3C(i) or the
obligations of Revolving Lenders to purchase assignments of any unpaid
Swing Line Loans as provided in subsection 2.1A(iii).
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Any amounts described in clause (i)(b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of this Agreement and shall be applied as provided in subsection 2.4G.
Section 11. ADMINISTRATIVE AGENT
11.1 Appointment.
A. Appointment of Administrative Agent. RBC is hereby appointed
Administrative Agent hereunder and under the other Loan Documents. Each Lender
hereby authorizes Administrative Agent to act as its agent in accordance with
the terms of this Agreement and the other Loan Documents. Administrative Agent
agrees to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. Except for subsections 11.1B, 11.5 and
11.6, the provisions of this Section 11 are solely for the benefit of
Administrative Agent and Lenders and no Loan Party shall have rights as a third
party beneficiary of any of the provisions thereof. In performing its functions
and duties under this Agreement, Administrative Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Company or any
other Loan Party.
B. Appointment of Supplemental Collateral Agents. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "Supplemental Collateral Agent" and collectively as
"Supplemental Collateral Agents").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty, and each obligation, expressed or intended by this
Agreement or any of the other Loan Documents to be exercised by or vested in or
conveyed to Administrative Agent or to which the Administrative Agent is
subject, with respect to such Collateral shall be exercisable by and vest in
such Supplemental Collateral Agent to the extent, and only to the extent,
necessary to enable such Supplemental Collateral Agent to exercise such rights,
powers and privileges with respect to such Collateral as if such Supplemental
Collateral Agent were the Administrative Agent, and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Loan Documents and necessary to the exercise or performance thereof by and
against such Supplemental Collateral Agent shall run to and be enforceable by
and against either Administrative Agent or such Supplemental Collateral Agent,
and (ii) the provisions of this
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Section 11 and of subsections 12.2 and 12.3 that refer to Administrative Agent
shall inure to the benefit of such Supplemental Collateral Agent and all
references therein to Administrative Agent shall be deemed to be references to
Administrative Agent and/or such Supplemental Collateral Agent, as the context
may require.
Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by Applicable Law, shall vest in and
be exercised by Administrative Agent until the appointment of a new Supplemental
Collateral Agent.
C. Control. Each Lender and Administrative Agent hereby appoint each other
Lender as agent for the purpose of perfecting Administrative Agent's security
interest in assets that, in accordance with any governing legislation, can be
perfected by possession or control.
11.2 Powers and Duties; General Immunity.
X. Xxxxxx; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent may exercise such powers,
rights and remedies and perform such duties by or through its agents or
employees. Administrative Agent shall not have, by reason of this Agreement or
any of the other Loan Documents, a fiduciary relationship in respect of any
Lender or Company; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon Administrative Agent any obligations in respect of this Agreement or
any of the other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by such Agent to Lenders or by or on behalf of
Company to such Agent or any Lender in connection with the Loan Documents and
the transactions contemplated thereby or for the financial condition or business
affairs of Company or any other Person liable for the payment of any
Obligations, nor shall such Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or
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agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as to the existence
or possible existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.
C. Exculpatory Provisions. No Agent or any of its officers, directors,
employees or agents shall be liable to Lenders for any action taken or omitted
by such Agent under or in connection with any of the Loan Documents except to
the extent caused by such Agent's gross negligence or willful misconduct. An
Agent shall be entitled to refrain from any act or the taking of any action
(including the failure to take an action) in connection with this Agreement or
any of the other Loan Documents or from the exercise of any power, discretion or
authority vested in it hereunder or thereunder unless and until such Agent shall
have received instructions in respect thereof from Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
12.6) and, upon receipt of such instructions from Requisite Lenders (or such
other Lenders, as the case may be), such Agent shall be entitled to act or
(where so instructed) refrain from acting, or to exercise such power, discretion
or authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for
Company and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against an Agent as a result of such Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
12.6).
D. Agents Entitled to Act as Lender. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, an Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, an
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. An Agent and its Affiliates may accept deposits
from, lend money to, acquire equity interests in and generally engage in any
kind of commercial banking, investment banking, trust, financial advisory or
other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.
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11.3 Independent Investigation by Lenders; No Responsibility For Appraisal
of Creditworthiness.
Each Lender agrees that it has made its own independent investigation
of the financial condition and affairs of Company and its Subsidiaries in
connection with the making of the Loans and the issuance of Letters of Credit
hereunder and that it has made and shall continue to make its own appraisal of
the creditworthiness of Company and its Subsidiaries. No Agent shall have any
duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or issuance of any Letter of
Credit or at any time or times thereafter, and no Agent shall have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
11.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent and its officers, directors, employees, agents, attorneys,
professional advisors and Affiliates to the extent that any such Person shall
not have been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements on a solicitor and his own
client basis, and fees and disbursements of any financial advisor engaged by
Agents) or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against an Agent or and other such Persons in
exercising the powers, rights and remedies of an Agent or performing duties of
an Agent hereunder or under the other Loan Documents or otherwise in its
capacity as Agent in any way relating to or arising out of this Agreement or the
other Loan Documents, provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of an Agent resulting solely from such
Agent's gross negligence or willful misconduct as determined by a final judgment
of a court of competent jurisdiction. If any indemnity furnished to an Agent or
any other such Person for any purpose shall, in the opinion of such Agent, be
insufficient or become impaired, such Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished.
11.5 Successor Administrative Agent and Swing Line Lender.
A. Successor Administrative Agent. Any Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company.
Upon any such notice of resignation, Requisite Lenders shall have the right,
upon five Business Days' notice to Company, to appoint a successor
Administrative Agent, which must be a Lender, subject (if no Event of Default
exists) to the approval of Company. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, that
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent. Whether or not a successor is appointed, the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement
upon its resignation becoming effective in accordance with its notice of
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resignation. After any retiring Agent's resignation hereunder as an Agent, the
provisions of this Section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was an Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation of Administrative Agent
pursuant to subsection 11.5A shall also constitute the resignation of it or its
successor as Swing Line Lender, and any successor Administrative Agent appointed
pursuant to subsection 11.5A shall, upon its acceptance of such appointment,
become the successor Swing Line Lender for all purposes hereunder. In such event
Company shall prepay any outstanding Swing Line Loans made by the retiring or
removed Administrative Agent in its capacity as Swing Line Lender.
C. Successor Fronting Bank. The Fronting Bank may resign at any time by
giving 30 days' prior written notice thereof to Lenders and Company. Upon any
such notice of resignation, Requisite Lenders shall have the right, upon five
Business Days' notice to Company, to appoint a successor Fronting Bank, which
must be a Lender, subject (if no Event of Default exists) to the approval of
Company. Upon the acceptance of any appointment as Fronting Bank hereunder by a
successor Fronting Bank, that successor Fronting Bank shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Fronting Bank and the retiring Fronting Bank shall be discharged from
its duties and obligations under this Agreement. Whether or not a successor is
appointed, the retiring Fronting Bank shall be discharged from its duties and
obligations under this Agreement upon its resignation becoming effective in
accordance with its notice of resignation. After any retiring Fronting Bank's
resignation hereunder as Fronting Bank, the provisions of this Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was a Fronting Bank under this Agreement.
11.6 Collateral Documents and Guarantees.
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under any
other Loan Document other than this Agreement, and each Lender agrees to be
bound by the terms of each such Loan Document, provided that Administrative
Agent shall not:
(i) enter into or consent to any material amendment, modification,
termination or waiver of any provision contained in any such Loan Document,
or
(ii) release any Collateral,
except in compliance with subsection 12.6, and provided further that, without
further written consent or authorization from Lenders, Administrative Agent may
execute any documents or instruments necessary to:
(a) release any Lien encumbering any item of Collateral that is
the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented,
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(b) release any Subsidiary Guarantor from the Subsidiary
Guarantee if all of the Capital Stock of such Subsidiary Guarantor is
sold to any Person (other than an Affiliate of Company) pursuant to a
sale or other disposition permitted hereunder or to which Requisite
Lenders have otherwise consented, or
(c) subordinate the Liens of Administrative Agent, on behalf of
Lenders, to any Liens permitted by subsection 9.2;
so long as, in the case of a sale of such item of Collateral or Capital Stock
referred to in subclause (a) or (b), the requirements of subsections 12.14 and
12.15 are satisfied. Anything contained in any of the Loan Documents to the
contrary notwithstanding, Company, Administrative Agent and each Lender hereby
agree that:
(1) no Lender shall have any right individually to realize
upon any of the Collateral under any Collateral Document or to
enforce any Guarantee, it being understood and agreed that all
powers, rights and remedies under the Collateral Documents and
the Guarantees may be exercised solely by Administrative Agent
for the benefit of Lenders in accordance with the terms thereof,
and
(2) in the event of a foreclosure by Administrative Agent on
any of the Collateral pursuant to a public or private sale,
Administrative Agent or any Lender may be the purchaser of any or
all of such Collateral at any such sale and Administrative Agent,
as agent for and representative of Lenders (but not any Lender or
Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be
entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of
the Obligations as a credit on account of the purchase price for
any collateral payable by Administrative Agent at such sale.
11.7 Duties of Other Agents.
To the extent that any Lender is identified in this Agreement as a
"co-agent," documentation agent or Syndication Agent, such Lender shall not have
any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without limiting
the foregoing, none of such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender.
11.8 Administrative Agent May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Holdings, Company or any of the Subsidiaries of
Holdings or Company, Administrative Agent (irrespective of whether the principal
of any Loan shall then be due and payable as herein
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expressed or by declaration or otherwise and irrespective of whether
Administrative Agent shall have made any demand on Company) shall be entitled
and empowered, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Loans or Letters of Credit and
any other Obligations that are owing and unpaid and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of Lenders and Agents (including any claim for the reasonable
compensation, expenses, disbursements and advances of Lenders and Agents
and their agents and counsel and all other amounts due Lenders and Agents
under subsections 2.3 and 12.2) allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agents and their agents
and counsel, and any other amounts due Agents under subsections 2.3 and 12.2.
Nothing herein contained shall be deemed to authorize Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lenders or to authorize Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.
Section 12. MISCELLANEOUS
12.1 Successors and Assigns; Assignments and Participations in Loans and
Letters of Credit.
A. General. This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders (it being understood
that Lenders' rights of assignment are subject to the further provisions of this
subsection 12.1). Neither Company's rights or obligations hereunder nor any
interest therein may be assigned or delegated by Company without the prior
written consent of all Lenders (and any attempted assignment or transfer by
Company without such consent shall be null and void). No sale, assignment or
transfer or participation of any Letter of Credit or any participation therein
may be made separately from a sale, assignment, transfer or participation of a
corresponding interest in the Revolving Loan Commitment and the Revolving Loans
of the Revolving Lender effecting such sale, assignment, transfer or
participation. Anything contained herein to the contrary notwithstanding, except
as provided in subsection 2.1A(iii) and subsection 12.5, the Swing Line Loan
Subcommitment and the Swing Line Loans of Swing Line Lender may not be sold,
assigned or transferred as described below to
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any Person other than a successor Administrative Agent and Swing Line Lender to
the extent contemplated by subsection 11.5. Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Affiliates of each of Administrative
Agent and Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
B. Assignments.
(i) Amounts and Terms of Assignments. Any Lender may assign to one or
more Eligible Assignees all or any portion of its rights and obligations
under this Agreement, provided that:
(a) except (1) in the case of an assignment of the entire
remaining amount of the assigning Lender's rights and obligations
under this Agreement or (2) in the case of an assignment to a Lender
or an Affiliate of a Lender or an Approved Fund of a Lender, the
aggregate amount of the Revolving Loan Exposure or Term Loan Exposure,
as the case may be, of the assigning Lender and the assignee subject
to each such assignment shall not be less than Cdn. $1,000,000, in the
case of any assignment of a Revolving Loan Commitment or Cdn.
$1,000,000, in the case of any assignment of a Term Loan, unless each
of Administrative Agent and, so long as no Event of Default has
occurred and is continuing, Company otherwise consents (each such
consent not to be unreasonably withheld or delayed),
(b) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loan or the
Commitment assigned,
(c) the assignor and the assignee under each assignment shall
execute and deliver to Administrative Agent an Assignment Agreement,
together with a processing and recordation fee of $3,500 (unless the
assignee is an Affiliate or an Approved Fund of the assignor, in which
case no fee shall be required), and the Eligible Assignee, if it shall
not be a Lender, shall deliver to Administrative Agent information
reasonably requested by Administrative Agent), and
(d) except in the case of an assignment to another Lender, an
Affiliate of a Lender or an Approved Fund of a Lender, Administrative
Agent and, if no Event of Default has occurred and is continuing,
Company, shall have consented thereto (which consent shall not be
unreasonably withheld), and shall evidence such consent in writing on
request by any party to the Assignment Agreement.
Upon such execution, delivery and consent, from and after the effective
date specified in such Assignment Agreement, (y) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment Agreement,
shall have the rights and obligations of a Lender hereunder and
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(z) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which survive the
termination of this Agreement under subsection 12.9B) and be released from
its obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto, provided that, anything contained in any of the Loan
Documents to the contrary notwithstanding, if such Lender is an Issuing
Lender such Lender shall continue to have all rights and obligations of an
Issuing Lender until the cancellation or expiration of any Letters of
Credit issued by it and the reimbursement of any amounts drawn thereunder).
Other than as provided in subsection 2.1A(iii) and subsection 12.5, any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection 12.1B shall be treated
for purposes of this Agreement as a sale by such Lender of a participation
in such rights and obligations in accordance with subsection 12.1C.
(ii) Acceptance by Administrative Agent; Recordation in Register. Upon
its receipt of an Assignment Agreement executed by an assigning Lender and
an assignee representing that it is an Eligible Assignee, together with the
processing and recordation fee referred to in subsection 12.1B(i),
Administrative Agent shall, if Administrative Agent and Company have
consented to the assignment evidenced thereby (in each case to the extent
such consent is required pursuant to subsection 12.1B(i)), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided therein
(which acceptance shall evidence any required consent of Administrative
Agent to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company. Administrative
Agent shall maintain a copy of each Assignment Agreement delivered to and
accepted by it as provided in this subsection 12.1B(ii).
(iii) Deemed Consent by Company. If the consent of Company to an
assignment or to an Eligible Assignee is required hereunder (including a
consent to an assignment which does not meet the minimum assignment
thresholds specified in subsection 12.1B(i), but excluding any consent of
Company required for the sale of a participation set forth in subsection
12.1C), Company shall be deemed to have given its consent five Business
Days after the date notice thereof has been delivered by the assigning
Lender (through Administrative Agent) unless such consent is expressly
refused by Company on or prior to such fifth Business Day.
C. Participations. Any Lender may, without the consent of, or notice to,
Company or Administrative Agent, sell participations to one or more Persons
(other than a natural Person or Company or any of its Affiliates) in all or a
portion of such Lender's rights and/or obligations under this Agreement,
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Company, Administrative
Agent and Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender
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sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement, provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver directly affecting
(a) the extension of the regularly scheduled maturity of any portion of the
principal amount of or interest on any Loan allocated to such participation
(other than interest imposed by subsection 2.2D for a period not to exceed 60
days) or (b) a reduction of the principal amount of or the rate of interest
payable on any Loan allocated to such participation (other than interest imposed
by subsection 2.2D for a period not to exceed 60 days). Subject to the further
provisions of this subsection 12.1C, Company agrees that each Participant shall
be entitled to the benefits of subsection 2.6 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection 12.1B.
To the extent permitted by Applicable Law, each Participant also shall be
entitled to the benefits of subsection 12.4 as though it were a Lender, provided
such Participant agrees to be subject to subsection 12.5 and 12.20 as though it
were a Lender. A Participant shall not be entitled to receive any greater
payment under subsection 2.6 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant unless the
sale of the participation to such Participant is made with Company's prior
written consent.
Where payments to a Participant are subject to withholding tax
pursuant to Part XIII of the Income Tax Act, a Participant shall not be entitled
to the benefits of subsection 2.6 unless Company is notified of the
participation sold to such Participant and Company agrees to comply with
subsection 2.6 as though such Participant were a Lender.
D. Pledges and Assignments. Any Lender may at any time pledge or assign a
security interest in all or any portion of its Loans, and the other Obligations
owed to such Lender, to any banking or finance Governmental Authority to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to any Federal Reserve Bank, provided that (i) no Lender shall be
relieved of any of its obligations hereunder as a result of any such assignment
or pledge and (ii) in no event shall any assignee or pledgee be considered to be
a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. Information. Each Lender may furnish any information concerning Company
and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 12.20.
F. Agreements of Lenders. Each Lender listed on the signature pages hereof
hereby agrees, and each Lender that becomes a party hereto pursuant to an
Assignment Agreement shall be deemed to agree, (i) that it is an Eligible
Assignee described in clause (ii) of the definition thereof; (ii) that it has
experience and expertise in the making of or purchasing loans such as the Loans;
and (iii) that it will make or purchase Loans for its own account in the
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other securities
laws (it being understood that, subject to the provisions of this subsection
12.1, the disposition of such Loans or any interests therein shall at all times
remain within its exclusive control).
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12.2 Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly:
(i) all reasonable costs and expenses of the Agents incurred in
connection with the negotiation, preparation and execution of the Loan
Documents and any consents, amendments, waivers or other modifications
thereto;
(ii) all costs and expenses of furnishing all opinions by counsel for
Company (including any opinions requested by Agents or Lenders as to any
legal matters arising hereunder) and of Company's performance of and
compliance with all agreements and conditions on its part to be performed
or complied with under this Agreement and the other Loan Documents
including with respect to confirming compliance with environmental,
insurance and solvency requirements;
(iii) all reasonable fees, expenses and disbursements of counsel to
Administrative Agent on a solicitor and his own client basis (including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company;
(iv) all costs and expenses of creating and perfecting Liens in favor
of Administrative Agent on behalf of Lenders pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees and reasonable fees, expenses and
disbursements of counsel to Administrative Agent and of counsel providing
any opinions that Administrative Agent or Requisite Lenders may request in
respect of the Collateral Documents or the Liens created pursuant thereto;
(v) all costs and expenses (including the reasonable fees, expenses
and disbursements of any auditors, accountants or appraisers and any
environmental, engineering or other consultants, advisors and agents
employed or retained by Administrative Agent or its counsel) of obtaining
and reviewing any appraisals or any environmental audits or reports
provided for under this Agreement, provided that Administrative Agent shall
advise Company of Lenders' intent to obtain such information, although
failure to do so will not affect Company's obligations under this
subsection 12.2;
(vi) all costs and expenses incurred by Administrative Agent in
connection with the custody or preservation of any of the Collateral;
(vii) all other costs and expenses incurred by Agents in connection
with the syndication of the Commitments;
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(viii) all costs and expenses, including reasonable legal fees on a
solicitor and his own client basis (including allocated costs of internal
counsel) and fees, costs and expenses of accountants, advisors and
consultants, incurred by Administrative Agent and its counsel relating to
efforts to (a) evaluate or assess any Loan Party, its business or financial
condition and (b) protect, evaluate, assess or dispose of any of the
Collateral; and
(ix) all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel), fees, costs and expenses
of accountants, advisors and consultants and costs of settlement, incurred
by Administrative Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the
other Loan Documents (including in connection with the sale of, collection
from, or other realization upon any of the Collateral or the enforcement of
the Loan Documents) or in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy proceedings.
12.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 12.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Agents and Lenders (including Issuing Lenders),
and the officers, directors, employees, agents and Affiliates of Agents and
Lenders (collectively called the "Indemnitees"), from and against any and all
Indemnified Liabilities (as hereinafter defined), provided that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or xxxxx any Hazardous Materials or
Hazardous Materials Activity), expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of:
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(i) this Agreement, the other Loan Documents or the Related Documents
or the transactions contemplated hereby or thereby (including Lenders'
agreement to make the Loans hereunder or the use or intended use of the
proceeds thereof or the issuance of Letters of Credit hereunder or the use
or intended use of any thereof, the failure of an Issuing Lender to honor a
drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
Governmental Authority or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Guarantees)), and further
including:
(a) any cost or expense incurred by reason of the liquidation or
re-deployment in whole or in part of deposits or other funds required
by any Lender to fund any Bankers' Acceptance or to fund or maintain
any Loan as a result of Company's failure to complete a borrowing or
to make any payment, repayment or prepayment on the date required
hereunder or specified by it in any notice given hereunder;
(b) subject to permitted or deemed Rollovers and Conversions,
Company's failure to provide for the payment to Administrative Agent
for the account of the Lenders of the full principal amount of each
Bankers' Acceptance on its maturity date;
(c) Company's failure to pay any other amount, including any
interest or fee, due hereunder on its due date after the expiration of
any applicable grace or notice periods (subject, however, to the
interest obligations of Company hereunder for overdue amounts);
(d) the prepayment of any outstanding Bankers' Acceptance
otherwise than on the last day of its BA Interest Period;
(e) Company's failure to give any notice required to be given by
it to Administrative Agent or the Lenders hereunder;
(f) the failure of Company to make any other payment due
hereunder;
(g) any inaccuracy or incompleteness of Company's representations
and warranties contained herein;
(h) any failure of Company to observe or fulfill its covenants
contained herein;
(i) any failure of Company to observe or fulfill any other
Obligation not specifically referred to above; or
(j) the occurrence of any Default or Event of Default in respect
of Company;
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(ii) any liabilities described in the fifth to last paragraph of the
Commitment Letter from Syndication Agent to Sterling dated October 31,
2003; or
(iii) any Environmental Claim or any Hazardous Materials Activity
relating to or arising from, directly or indirectly, any past or present
activity, operation, land ownership, or practice of Company or any of its
Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 12.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
Applicable Law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
12.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under Applicable
Law and not by way of limitation of any such rights, during the existence of any
Event of Default (and with the approval of the Requisite Lenders prior to any
Loans becoming or being declared to be due under Section 10), each Lender is
hereby authorized by Company at any time or from time to time, without notice to
Company or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and to apply any and all deposits (general or
special, time or demand, provisional or final, including Indebtedness evidenced
by certificates of deposit, whether matured or unmatured, but not including
trust accounts) and any other Indebtedness at any time held or owing by that
Lender or any Affiliate of that Lender to or for the credit or the account of
Company and each other Loan Party against and on account of the Obligations of
Company or any other Loan Party to that Lender (or any Affiliate of that Lender)
or to any other Lender (or any Affiliate of any other Lender) under this
Agreement, the Letters of Credit and participations therein and the other Loan
Documents, including all claims of any nature or description arising out of or
connected with this Agreement, the Letters of Credit and participations therein
or any other Loan Document, irrespective of whether or not (i) that Lender shall
have made any demand hereunder or (ii) the principal of or the interest on the
Loans or any amounts in respect of the Letters of Credit or any other amounts
due hereunder shall have become due and payable pursuant to Section 10 and
although said obligations and liabilities, or any of them, may be contingent or
unmatured. Company hereby further grants to Administrative Agent and each Lender
a security interest in all deposits and accounts maintained with Administrative
Agent or such Lender as security for the Obligations.
12.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under a Bankruptcy Law, receive payment or reduction of a proportion
of the aggregate amount of principal, interest, amounts payable in respect of
Letters of Credit, fees and
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other amounts then due and owing to that Lender hereunder or under the other
Loan Documents (collectively, the "Aggregate Amounts Due" to such Lender) that
is greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase assignments (which it shall be deemed to have purchased from
each seller of an assignment simultaneously upon the receipt by such seller of
its portion of such payment) of the Aggregate Amounts Due to the other Lenders
so that all such recoveries of Aggregate Amounts Due shall be shared by all
Lenders in proportion to the Aggregate Amounts Due to them, provided that if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy,
receivership or reorganization of a Loan Party or otherwise, those purchases
shall be rescinded and the purchase prices paid for such assignments shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. Company expressly consents to the foregoing arrangement and
agrees that any purchaser of an assignment so purchased may exercise any and all
rights of a Lender as to such assignment as fully as if that Lender had complied
with the provisions of subsection 12.1B with respect to such assignment. In
order to further evidence such assignment (and without prejudice to the
effectiveness of the assignment provisions set forth above), each purchasing
Lender and each selling Lender agree to enter into an assignment agreement at
the request of a selling Lender or a purchasing Lender, as the case may be, in
form and substance reasonably satisfactory to each such Lender.
12.6 Amendments and Waivers.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Company therefrom, shall in
any event be effective without the written concurrence of Requisite Lenders,
provided that no such amendment, modification, termination, waiver or consent
shall:
(i) without the additional consent of each Lender with Obligations
directly affected:
(a) reduce the principal amount payable on account of any Loan,
(b) increase the maximum aggregate amount of Letters of Credit
available,
(c) postpone any installment date or the final maturity date of
any Loan,
(d) postpone the date on which any interest or any fees are
payable, other than interest imposed by subsection 2.2D for a
period not to exceed 60 days,
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(e) decrease the interest rate or stamping fee borne by any Loan
or the amount of any fees payable hereunder, other than interest
imposed by subsection 2.2D for a period not to exceed 60 days,
(f) reduce the amount or postpone the due date of any amount
payable in respect of any Letter of Credit,
(g) extend the expiration date of any Letter of Credit beyond the
Revolving Loan Commitment Termination Date,
(h) change in any manner the obligations of Revolving Lenders
relating to the purchase of participations in Letters of Credit,
or
(i) increase such Lender's Commitment;
(ii) without the consent of all Lenders:
(a) change in any manner the definition of "Class" or the
definition of "Pro Rata Share" or the definition of "Requisite
Class Lenders" or the definition of "Requisite Lenders" (except
for any changes resulting solely from an increase in Commitments
approved by Requisite Lenders),
(b) change in any manner any provision of this Agreement that, by
its terms, expressly requires the approval or concurrence of all
Lenders,
(c) increase the maximum duration of BA Interest Periods
permitted hereunder,
(d) release any Lien granted in favor of Administrative Agent
with respect to the Collateral, or release Holdings from its
obligations under the Holdings Guarantee, or release any of the
Subsidiary Guarantors from their obligations under the Subsidiary
Guarantee, in each case other than in accordance with the terms
of this Agreement and the other Loan Documents, including
subsections 12.14 and 12.15, or
(e) change in any manner or waive the provisions contained in
subsection 10.1 or this subsection 12.6.
In addition:
(1) no amendment, modification, termination or waiver of any
provision of subsection 2.1A(iii) or of any other provision of
this Agreement relating to the Swing Line Loan Subcommitment or
the Swing Line Loans shall be effective without the written
concurrence of Swing Line Lender,
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(2) no amendment, modification, termination or waiver of any
provision of Section 4 shall be effective without the written
concurrence of Fronting Bank (if any) and, with respect to
Letters of Credit, without the written concurrence of each
Issuing Lender that has issued an outstanding Letter of Credit or
has not been reimbursed for a payment under a Letter of Credit,
(3) no amendment, modification, termination or waiver of any
provision of Section 11 or of any other provision of this
Agreement which, by its terms, expressly requires the approval or
concurrence of Administrative Agent shall be effective without
the written concurrence of Administrative Agent, and
(4) notwithstanding subclause 12.6(i), no amendment,
modification, termination or waiver of any provision of
subsection 2.4 that has the effect of changing any interim
scheduled payments, voluntary or mandatory prepayments, or
Commitment reductions applicable to a Class in a manner that
disproportionately disadvantages one Class relative to any other
Class shall be effective without the written concurrence of
Requisite Class Lenders of such disadvantaged Class.
Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No notice to or demand on
Company in any case shall entitle Company to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 12.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Company, on Company and each Subsidiary Guarantor.
12.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
12.8 Notices; Effectiveness of Signatures.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, or sent by telefacsimile or Canadian mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile in complete and
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legible form, or three Business Days after depositing it in the Canadian mail
with postage prepaid and properly addressed, provided that notices to
Administrative Agent, Swing Line Lender and any Issuing Lender shall not be
effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent
and Company. Electronic mail and Internet and intranet websites may be used to
distribute routine communications, such as financial statements and other
information, provided that no signature with respect to any notice, request,
agreement, waiver, amendment or other document or any notice that is intended to
have binding effect may be sent by electronic mail.
Loan Documents and notices under the Loan Documents may be transmitted
and/or signed by telefacsimile. The effectiveness of any such documents and
signatures shall, subject to Applicable Law, have the same force and effect as
an original copy with manual signatures and shall be binding on all Loan
Parties, Agents and Lenders. Administrative Agent may also require that any such
documents and signature be confirmed by a manually-signed copy thereof, provided
that the failure to request or deliver any such manually-signed copy shall not
affect the effectiveness of any facsimile document or signature.
12.9 Survival of Representations, Warranties and Agreements.
A. Survive Execution. All representations, warranties and agreements made
herein shall survive the execution and delivery of this Agreement and the making
of the Loans and the issuance of the Letters of Credit hereunder.
B. Survive Termination. Notwithstanding anything in this Agreement or
implied by Applicable Law to the contrary, the agreements of Company set forth
in subsections 2.6, 12.2, 12.3, 12.4, 12.18 and 12.19 and the agreements of
Lenders set forth in subsections 11.2C, 11.4, 12.5, 12.19 and 12.20 shall
survive the payment of the Loans, the cancellation or expiration of the Letters
of Credit and the reimbursement of any amounts drawn thereunder, and the
termination of this Agreement.
12.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of an Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
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12.11 Marshalling; Payments Set Aside.
Neither any Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Agents or Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any similar official in respect
of a Loan Party under any Bankruptcy Law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
12.12 Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
12.13 Obligations Several; Independent Nature of Lenders' Rights; Damage
Waiver.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or
Lenders and Company, as a partnership, an association, a Joint Venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
To the extent permitted by Applicable Law, Company shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with or as a result of this
Agreement (including subsection 2.1C hereof), any other Loan Document, any
transaction contemplated by the Loan Documents, any Loan or the use of proceeds
thereof.
12.14 Release of Subsidiary Guarantee.
Upon the sale or other disposition of all of the Capital Stock of a
Subsidiary Guarantor to any Person (other than to an Affiliate of Company,
unless such sale or other disposition is permitted under subclause 9.7(i))
permitted by this Agreement, or termination of
146
the existence of a Subsidiary Guarantor in a transaction permitted by subclause
9.7(i), or to which Requisite Lenders have otherwise consented, for which a Loan
Party desires to obtain a release of the Subsidiary Guarantor from the
Subsidiary Guarantee, such Loan Party shall deliver an Officer's Certificate:
(i) specifying the Capital Stock being sold or otherwise disposed of
in the proposed transaction,
(ii) stating that the Capital Stock subject to such disposition is
being sold or otherwise disposed of in compliance with the terms hereof,
and
(iii) certifying that no Event of Default or Potential Event of
Default exists;
and upon the receipt of such Officer's Certificate, Administrative Agent shall,
at such Loan Party's expense (so long as Administrative Agent does not have
actual knowledge, without independent inquiry, that the facts stated in such
Officer's Certificate are not true and correct, execute and deliver a release of
the Subsidiary Guarantor from the Subsidiary Guarantee, as may be reasonably
requested by such Loan Party.
12.15 Release of Security Interest on Asset Disposition.
Upon the sale or other disposition of any Collateral that is permitted
by this Agreement or to which Requisite Lenders have otherwise consented and for
which a Loan Party desires to obtain a security interest release, such Loan
Party shall deliver an Officer's Certificate:
(i) specifying the Collateral being sold or otherwise disposed of in
the proposed transaction,
(ii) stating that the Collateral subject to such disposition is being
sold or otherwise disposed of in compliance with the terms hereof,
(iii) stating whether the sale or other disposition of such item of
Collateral constitutes an Asset Sale, and
(iv) certifying that no Event of Default or Potential Event of Default
exists.
Upon the receipt of such Officer's Certificate, Administrative Agent shall, at
such Loan Party's expense (so long as Administrative Agent does not have actual
knowledge, without independent inquiry, that the facts stated in such Officer's
Certificate are not true and correct, and if the sale or other disposition of
such item of Collateral or Capital Stock constitutes an Asset Sale,
Administrative Agent shall have received evidence satisfactory to it in its sole
discretion that satisfactory arrangements or undertakings have been made for
delivery of the Net Asset Sale Proceeds if and as required by subsection 2.4)
execute and deliver such releases of the security interests created by the
Collateral Documents in the Collateral which is the subject of such sale, as may
be reasonably requested by such Loan Party.
147
12.16 Applicable Law.
This Agreement and the rights and obligations of the Parties hereunder
shall be governed by, and shall be construed and enforced in accordance with,
the laws of the Province of Alberta, without regard to conflicts of laws
principles that would require application of another law.
12.17 Construction of Agreement; Nature of Relationship.
Each of the parties hereto acknowledges that (i) it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, (ii) it has had full and fair opportunity to review and revise the
terms of this Agreement, (iii) this Agreement has been drafted jointly by all of
the parties hereto, and (iv) neither Administrative Agent nor any Lender or
other Agent has any fiduciary relationship with or duty to Company arising out
of or in connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent, the other Agents and Lenders, on
one hand, and Company, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor. Accordingly, each of the parties hereto
acknowledges and agrees that the terms of this Agreement shall not be construed
against or in favor of another party.
12.18 Consent to Jurisdiction and Service of Process.
All judicial proceedings brought against Company arising out of or
relating to this Agreement or any other Loan Document, or any obligations
thereunder, may be brought in any court of competent jurisdiction in the
Province of Alberta. By executing and delivering this Agreement, Company, for
itself and in connection with its properties, irrevocably
(i) accepts generally and unconditionally the nonexclusive
jurisdiction and venue of such courts;
(ii) waives any defense of forum non conveniens;
(iii) agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Company at its address provided in accordance with subsection
12.8;
(iv) agrees that service as provided in clause (iii) above is
sufficient to confer personal jurisdiction over Company in any such
proceeding in any such court, and otherwise constitutes effective and
binding service in every respect; and
(v) agrees that Lenders retain the right to serve process in any other
manner permitted by Applicable Law or to bring proceedings against Company
in the courts of any other jurisdiction.
148
12.19 Waiver of Jury Trial.
Each of the Parties to this Agreement hereby agrees to waive its
respective rights to a jury trial of any claim or cause of action based upon or
arising out of this agreement or any of the other loan documents or any dealings
between them relating to the subject matter of this loan transaction or the
lender/borrower relationship that is being established. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. This waiver is irrevocable, meaning that it may
not be modified either orally or in writing (other than by a mutual written
waiver specifically referring to this subsection 12.19 and executed by each of
the parties hereto), and this waiver shall apply to any subsequent amendments,
renewals, supplements or modifications to this Agreement or any of the other
Loan Documents or to any other documents or agreements relating to the Loans
made or Letters of Credit issued hereunder.
12.20 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement that has been identified in writing as
confidential by Company in accordance with such Lender's customary procedures
for handling confidential information of this nature, it being understood and
agreed by Company that in any event a Lender may make disclosures:
(i) to its and its Affiliates' directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such information and instructed to
keep such information confidential),
(ii) to the extent requested by any Governmental Authority,
(iii) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder,
(iv) to the extent required by Applicable Law or by any subpoena or
similar legal process,
(v) to any other party to this Agreement,
(vi) subject to an agreement containing provisions substantially the
same as those of this subsection 12.20, to any Eligible Assignee of or
participant in, or any
149
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement,
(vii) with the consent of Company,
(viii) to the extent such information (i) becomes publicly available
other than as a result of a breach of this subsection 12.20 or (ii) becomes
available to Administrative Agent or any Lender on a nonconfidential basis
from a source other than Company, or
(ix) to the National Association of Insurance Commissioners or any
other similar organization or any nationally recognized rating agency that
requires access to information about a Lender's or its Affiliates'
investment portfolio in connection with ratings issued with respect to such
Lender or its Affiliates,
provided that, unless specifically prohibited by Applicable Law or court order,
each Lender shall notify Company of any request by any Governmental Authority or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such Governmental
Authority) for disclosure of any such non-public information prior to disclosure
of such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries. In addition, Administrative Agent and Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to Administrative Agent and Lenders.
Notwithstanding anything herein to the contrary, information required
to be treated as confidential by reason of the foregoing shall not include, and
Administrative Agent and each Lender may disclose to any and all Persons,
without limitation of any kind, any information with respect to income tax
treatment and income tax structure of the transactions contemplated hereby and
all materials of any kind (including opinions or other tax analyses) that are
provided to Administrative Agent or such Lender relating to such tax treatment
and tax structure.
12.21 Paramountcy
If there is any conflict or inconsistency between any provision of
this Agreement and any provision of any other Loan Document, the provisions of
this Agreement shall, to the extent necessary to resolve such conflict, govern.
12.22 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This
150
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
[Remainder of page intentionally left blank]
151
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
NORTH AMERICAN ENERGY PARTNERS INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
Notice Address:
Acheson Industrial Park #0
00000-Xxxxxxx 00,
Xxxxxx Xxxxx, Xxxxxxx X0X 0X0
LENDERS:
ROYAL BANK OF CANADA
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Signatory
Notice Address:
0000 Xxxxxxx Xxxx Xxxx
000-0xx Xxxxxx X.X.
Xxxxxxx, XX X0X 0X0
Attention: Corporate Credit Department
Fax: (000) 000-0000
1
BNP PARIBAS (Canada)
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Xxxx Xxxxxxxx
Vice-President, Leverage Finance
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxxx
Managing Director, Leveraged Finance &
Real Estate Finance
Notice Address:
Xx. Xxxxx Xxxxxx
BNP PARIBAS(Canada)
0000 XxXxxx Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxx
X0X 0X0
Xxxxxx
Phone: (000)000-0000
Fax: (000)000-0000
Email: xxxxx.xxxxxx@xxxxxxxx.xxxxxxxxxx.xxx
With copy to:
Merchant Banking Group
Xxx Xxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxxxxxxx XX 00000
Attention: Xxxxx Xxxxx, Director & Portfolio
Manager
Fax: (000)000-0000
AGENTS:
ROYAL BANK OF CANADA,
as Administrative Agent
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Manager, Agency
Notice Address:
X.X. Xxx 00, 000 Xxx Xxxxxx
Royal Bank Plaza
00xx Xxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X0X0
Attn: Manager, Agency
Agency Services Group
BNP PARIBAS, as Syndication Agent
By: /s/ Xxxxxxxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxxxxxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
Notice Address:
Merchant Banking Group
Xxx Xxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxxxxxxx XX 00000
Attention: Xxxxx Xxxxx, Director & Portfolio
Manager
Fax: (000)000-0000
2
EXHIBIT I
TO THE CREDIT AGREEMENT
FORM OF NOTICE OF BORROWING
TO: ROYAL BANK OF CANADA, as Administrative Agent
Re: Credit Agreement dated as of November 26th, 2003 among North American
Energy Partners Inc., as borrower (the "Company"), and the Persons party
thereto as lenders (collectively, the "Lenders"), and Royal Bank of Canada,
as administrative agent (the "Administrative Agent"), and the other Agents
(such Credit Agreement, as it may be amended, supplemented or otherwise
modified or restated from time to time, referred to as the "Credit
Agreement").
1. The Funding Date applicable to this Notice of Borrowing is the day
------
of , 200 .
-------------- --
2. Pursuant to Section 2.1 of the Credit Agreement, the undersigned hereby
requests that the following [Term/Revolving/Swing Line] Loan(s) be funded
on the Funding Date:
Type of Loan Principal Amount BA Interest Period
---------------------------- ---------------- ------------------
Prime Rate Loan
--------------
Bankers' Acceptances (or BA
-------------- --------------
Equivalent Advance)
3. The undersigned certifies to the Administrative Agent and to the Lenders
that as of the Funding Date:
(a) after giving effect to the Loan(s) requested on the Funding Date, the
Total Utilization of Revolving Loan Commitments will not exceed (1)
the Revolving Loan Commitments then in effect, or (2) the Borrowing
Base then in effect, less the aggregate principal amount of all
outstanding Term Loans including, for certainty, the face amount of
all Banker's Acceptances and BA Discount Notes thereunder;
(b) all representations and warranties contained in the Loan Documents are
true, correct and complete in all material respects on and as of the
Funding Date to the same extent as though made on such date, except to
the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties
were true, correct and complete in all material respects on and as of
such earlier date, provided, that, if a representation and warranty is
qualified as to materiality, with respect to such representation and
warranty, the materiality qualifier set forth above shall be
disregarded for purposes of this certification;
(c) no event shall have occurred and be continuing or will result from the
consummation of the borrowing contemplated by this Notice of Borrowing
that would constitute an Event of Default or a Potential Event of
Default; and
I-1
(d) each Loan Party has performed in all material respects all agreements
and satisfied all conditions (other than those already satisfied or
waived under subsection 6.1 of the Credit Agreement) which the Credit
Agreement provides shall be performed or satisfied by it on or before
the Funding Date.
4. Except as set out in Section 2.6C of the Credit Agreement, this Notice is
irrevocable.
5. Capitalized terms used herein and not otherwise defined herein have the
meanings given to them by the Credit Agreement.
DATED this day of , , xx x.x., Xxxxxxx, Xxxxxxx time.
---- ------- ---- ------
NORTH AMERICAN ENERGY
PARTNERS INC.
By:
--------------------------------
Name:
Title:
[If applicable] [cc: Swing Line Lender]
I-2
EXHIBIT II
TO THE CREDIT AGREEMENT
FORM OF NOTICE OF CONVERSION / ROLLOVER
TO: Royal Bank of Canada, as Administrative Agent
Re: Credit Agreement dated as of November 26th, 2003 among North American
Energy Partners Inc., as borrower (the "Company"), and the Persons party
thereto as lenders (collectively, the "Lenders"), and Royal Bank of Canada,
as administrative agent (the "Administrative Agent"), and the other Agents
(such credit Agreement, as it may be amended, supplemented or otherwise
modified or restated from time to time, referred to as the "Credit
Agreement").
1. Pursuant to Section 2.2C of the Credit Agreement, the undersigned hereby
notifies the Administrative Agent that it will be:
(a) rolling over part or all of an issue of Bankers Acceptances' under a
[Term Loan][Revolving Loan] described as:
Principal Amount/(1)/:
------------------------------------------
BA Interest Period:
---------------------------------------------
Maturity Date:
--------------------------------------------------
into another Loan of the same type made under the same Loan facility
described as:
BA Interest Period:
---------------------------------------------
Maturity Date:
--------------------------------------------------
Note:
(1) If only part of maturing Loan is rolled over, please indicate the
principal amount to be rolled over: Cdn. $
---------
or;
(b) converting part or all of a [Term Loan][Revolving Loan] described as:
Type of Loan:
---------------------------------------------------
Principal Amount/(1)/:
------------------------------------------
BA Interest Period (if applicable):
-----------------------------
Maturity Date (for BA):
-----------------------------------------
into a Loan made under such Loan facility described as:
Type of Loan:
---------------------------------------------------
Principal Amount/(1)/:
------------------------------------------
BA Interest Period (if applicable):
-----------------------------
Maturity Date (for BA):
-----------------------------------------
effective the day of , .
------ ------------------ -------
II-1
Note:
(1) If only part of maturing Loan is being converted, please indicate
the principal amount to be rolled over: Cdn. $ .
-------
2. Except as set out in Section 2.6C of the Credit Agreement, this Notice is
irrevocable.
3. Capitalized terms used herein and not otherwise defined herein have the
meanings given to them in the Credit Agreement.
w DATED this day of , at a.m. Toronto, Ontario time.
---- --------- ---- -----
NORTH AMERICAN ENERGY
PARTNERS INC.
By:
--------------------------------
Name:
Title:
[If applicable] [cc: Issuing Lender]
[If applicable] [cc: Swing Line Lender]
II-2
EXHIBIT III
TO THE CREDIT AGREEMENT
FORM OF REQUEST FOR ISSUANCE
REQUEST FOR ISSUANCE OF STANDBY LETTER OF CREDIT to be issued by BNP
Paribas as Fronting Bank, or another Issuing Lender, as the case may be,
pursuant to Article 4 of the Credit Agreement dated November 26th, 2003
among North American Energy Partners Inc. as borrower (the "Company"), and
the Persons party thereto as lenders (collectively, the "Lenders") and
Royal Bank of Canada, as administrative agent (the "Administrative Agent"),
and the other Agents (as amended, modified, varied, restated or replaced
from time to time the "Credit Agreement"). Capitalized terms used herein
and not otherwise defined herein have the meanings given to them in the
Credit Agreement.
Dated this day of , 200 at a.m., Toronto, Ontario time.
---- -------- -- -----
--------------------------------------------------------------------------------
1. Fronting Bank Transit and Branch Address
BNP Paribas
--------------------------------------------------------------------------------
2. PLEASE ISSUE AS PER ATTACHED SAMPLE on , which is not (i)
----------------
earlier than three Business Days after receipt of notice by Fronting Bank and
Administrative Agent and (ii) later than (and including) the thirtieth (30th)
day prior to the Revolving Loan Commitment Termination Date.
--------------------------------------------------------------------------------
3. FROM APPLICANT (Full Name and Address)
North American Energy Partners Inc.
Acheson Industrial Park #0
00000 - Xxxxxxx 00
Xxxxxx Xxxxx, Xxxxxxx X0X 0X0
--------------------------------------------------------------------------------
4. IN FAVOUR OF: [Insert Full Name and Address of Beneficiary]
--------------------------------------------------------------------------------
5. AMOUNT : [Insert amount in Cdn.$ only]
--------------------------------------------------------------------------------
6. PURPOSE: (Select one and provide details below)
a. [ ] Supporting Indebtedness of the Company or any of its Subsidiaries in
respect of industrial revenue or development bonds or financings;
b. [ ] Supporting workers' compensation liabilities of the Company or any of
its Subsidiaries;
c. [ ] Supporting the obligations of insurers of the Company or any of its
Subsidiaries;
d. [ ] Supporting obligations with respect to Capital Leases or Operating
Leases of the Company or any of its Subsidiaries, or
e. [ ] Supporting the performance, payment, deposit or surety obligations of
the Company or any of its Subsidiaries (including under the Bonding
Program), in any case in the ordinary course of the Loan Parties'
business.
Details:
-----------------------------------------------------------------------
--------------------------------------------------------------------------------
7. EXPIRY DATE: (Select One)
One year from date of issue, which expiry date shall be on or earlier than ten
(10) days prior to the Revolving Loan Commitment Termination Date.
On , which shall be no later than the earlier of (a) ten (10) days
-------------
prior to the Revolving Loan Commitment Termination Date and (b) the date which
is one year from the date of issuance of the Letter of Credit requested in this
notice.
--------------------------------------------------------------------------------
8. DELIVERY INSTRUCTIONS - BENEFICIARY INSIDE CANADA OR BNP PARIBAS, as
Fronting Bank
(Complete section 12. if Beneficiary outside Canada) (Select one)
Applicant
Beneficiary
Lender Branch in 1 above
Deliver by courier to BNP Paribas, as Fronting Bank and instruct BNP Paribas to
advise beneficiary (if applicable).
Other Instruction (Specify)
------------------------------------------
--------------------------------------------------------------------------------
9. DRAWINGS: (Select One)
Beneficiary can make
[ ] One demand for payment
[ ] Multiple demands for payment
(drawings)
--------------------------------------------------------------------------------
III-1
--------------------------------------------------------------------------------
10. DOCUMENTS REQUIRED FOR DRAWINGS (Optional)
Demand in writing
[ ] Sight Draft
[ ] Signed Beneficiary Certificate stating a default
[ ] Copy of Transport Document (Specify)
---------------------------------------------------------
[ ] Copy of Invoice
[ ] Document as per format attached
[ ] Other (Specify)
-----------------------------------------
--------------------------------------------------------------------------------
11. SPECIAL INSTRUCTIONS (optional)
--------------------------------------------------------------------------------
12. DELIVERY INSTRUCTIONS - BENEFICIARY OUTSIDE CANADA
(Complete Section 8. for beneficiary in Canada)
a. Method of Advice (Select One)
[ ] Telex to Foreign bank only
[ ] Airmail to
[ ] Foreign Bank
[ ] Beneficiary
[ ] Foreign Bank Name and Address (If provided)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[ ] Original to Lender Branch in 1. Above
b. Instruct your correspondent bank in country of beneficiary to (Select One)
[ ] Advise to beneficiary
[ ] Issue on your behalf and deliver to:
(Select one)
[ ] Our Administrative Agent (Name, address, phone no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[ ] Beneficiary
--------------------------------------------------------------------------------
13. The Company hereby represents and warrants as of the date hereof and as of
the date of issuance of this Letter of Credit to the following:
a. After giving effect to the issuance of the Letter of Credit requested in
this Request for Issuance, the Letter of Credit Usage will not exceed
Cdn.$30,000,000 , minus the amount of any cash collateral provided by the
Company or its Subsidiaries pursuant to subsection 9.2A(iv) of the Credit
Agreement then held by, or for the benefit of, the providers of the Bonding
Program as security therefor;
b. No Potential Event of Default or Event of Default has occurred and is
continuing or would occur as a result of the issuance of the requested
Letter of Credit (in each case that has not been waived in accordance with
Subsection 12.6 of the Credit Agreement);
c. All representations and warranties contained in the Loan Documents are
true, correct and complete in all material respects on and as of the date
hereof to the same extent as though made on such date, except to the extent
such representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date, provided, that, if a representation and warranty is qualified as to
materiality, with respect to such representation and warranty, the
materiality qualifier set forth above shall be disregarded for purposes of
this representation and warranty; and
d. Each Loan Party has performed in all material respects all agreements and
satisfied all conditions (other than those already satisfied or waived
under subsection 6.1 of the Credit Agreement) which the Credit Agreement
provides shall be performed or satisfied by it on or before the issuance of
the Letter of Credit.
--------------------------------------------------------------------------------
14. The Company hereby acknowledges, agrees and ratifies the following:
a. The terms and conditions set out in the Letter of Credit attached hereto,
as may be amended from time to time;
b. The Issuing Lender, in its reasonable discretion, may (i) require changes
in the text of the proposed Letter of Credit or any documents described in
or attached to this Request for Issuance, and/or (ii) require an
application and/or indemnity of Company in such Issuing Lender's customary
form;
c. The Letter of Credit requested in this Request for Issuance will not be
used for the purpose of supporting trade payables or indebtedness for
borrowing money; and
d. Unless the Issuing Lender otherwise agrees, no Letter of Credit shall
require payment against a conforming demand for payment to be made
thereunder on the same business day (under the laws of the jurisdiction in
which the office of the Issuing Lender to which such demand for payment is
required to be presented is located) that such demand for payment is
presented if such presentation is made after 1:00 p.m. (in the time zone of
such office of the Issuing Lender) on such business day.
NORTH AMERICAN ENERGY PARTNERS INC.
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
III-2
EXHIBIT IV
TO THE CREDIT AGREEMENT
[INTENTIONALLY LEFT BLANK]
V-1
EXHIBIT V
TO THE CREDIT AGREEMENT
FORM OF BA DISCOUNT NOTE
Cdn $ Date:
----------------------- ---------------------------------
FOR VALUE RECEIVED, the undersigned unconditionally promises to pay on
, 200 , to or to the order of [NAME OF NON-ACCEPTANCE
-------------------- ---
LENDER] ("Holder"), the sum of Cdn $ with no interest
---------------------------
thereon.
The undersigned hereby waives presentment, protest and notice of
every kind and waives any defences based upon indulgences which may be granted
by the holder hereof to any party liable hereon and any days of grace.
This promissory note evidences a BA Equivalent Advance, as defined in the
Credit Agreement dated as of November _, 2003 among North American Energy
Partners Inc. as borrower, and the persons party thereto as lenders, and Royal
Bank of Canada, as administrative agent, and the other Agents (such Credit
Agreement, as it may be amended, supplemented or otherwise modified or restated
from time to time, referred to as the "Credit Agreement") and constitutes
evidence of indebtedness to the holder arising from such BA Equivalent Advance.
Payment of this note shall be made at the account designated by the
administrative agent pursuant to the Credit Agreement.
NORTH AMERICAN ENERGY
PARTNERS INC.
By:
--------------------------------
Name:
Title:
V-1
EXHIBIT VI
TO THE CREDIT AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
TO: ROYAL BANK OF CANADA, as Administrative Agent
Re: Credit Agreement dated as of November 26th, 2003 among North American
Energy Partners Inc., as borrower (the "Company"), and the Persons party
thereto as lenders (collectively, the "Lenders") and Royal Bank of Canada,
as Administrative Agent (the "Administrative Agent"), and the other Agents
(such Credit Agreement, as it may be amended, supplemented or otherwise
modified or restated from time to time, referred to as the "Credit
Agreement").
1. This Borrowing Base Certificate is given pursuant to [Section 6.1L]
[Section 8.1(xiv)] of the Credit Agreement. Capitalized terms used herein
and not otherwise defined herein have the meanings given to them in the
Credit Agreement.
2. I am the duly appointed [_] of the Company and hereby certify in such
capacity for and on behalf of the Company and not in my personal capacity
and without assuming any personal liability whatsoever, after making due
inquiry:
(a) as of [ _/1/], the Borrowing Base is Cdn. $ _;
(b) /2/such Borrowing Base [equals] [exceeds][is less than] the Total
Utilization of Revolving Loan Commitments plus the principal amount of
the Term Loans (including, for certainty, the face amount of all
outstanding Bankers' Acceptances and BA Discount Notes thereunder),
being Cdn. $ _; and
attached hereto as Schedule 1 are detailed particulars of the manner in
which the Borrowing Base was calculated.
----------
/1/ Insert applicable date pursuant to the requirement of the Credit
Agreement(i.e.: recent date prior to the Closing Date pursant to Section 6.1L of
the Credit Agreement or the last Business Day of each month ending after the
Closing Date, the last Business Day of each week ending after the Closing Date,
and/or any other Business Day, all in accordance with Section 8.1(xiv) of the
Credit Agreement).
/2/ On the Closing Date add the following language: After giving effect to the
Loans to be funded and any Letters of credit to be issuied on the Closing Date,
VI-1
3. [Insert if Borrowing Base is insufficient] [Pursuant to Section
2.4B(iii)(g) of the Credit Agreement, [concurrent with the delivery of this
Borrowing Base Certificate][the Company has prepaid] [the Company hereby
covenants and agrees to prepay] Cdn. $_ of the Swing Line Loans [and Cdn.
$_ of the other Revolving Loans (including collaterization of Bankers'
Acceptances)] [and collaterialize Letters of Credit in an amount equal to
Cdn $_] so that the Total Utilization of Revolving Loan Commitments will no
longer exceed the Borrowing Base less the aggregate principal amount of all
outstanding Term Loans including, for certainty, the face amount of all
outstanding Bankers' Acceptances and BA Discount Notes thereunder.]
DATED this day of , 200 .
------ --------------------- ---
NORTH AMERICAN ENERGY
PARTNERS INC.
By:
---------------------------
Name:
Title:
VI-2
SCHEDULE 1
TO THE BORROWING BASE CERTIFICATE
CALCULATIONS
1. For the purpose of the Borrowing Base Certificate, the Borrowing Base has
been determined as follows:
1. Borrowing Base (as at any date of determination) = an aggregate amount
equal to (a) the lesser of (i) 55% of Consolidated PP&E, and (ii) Cdn.
$90,000,000, plus (b) 75% of the value of Eligible Accounts
Receivable.
_Consolidated PP&E
Assets (net of depreciation) of the Company and its Subsidiaries
on a consolidated basis classified as property, plant and
equipment in conformity with GAAP. Cdn. $
---------
less:
any such assets subject to a Lien in favour of any Person other
than the Administrative Agent for the benefit of the Lenders that
ranks pari passu with or ahead of the Liens created by the
Collateral Documents, to the extent of the lesser of the fair
market value of such asset and the amount secured by such Lien.
Cdn. $
---------
Consolidated PP&E Cdn. $
---------
55% of Consolidated PP&E Cdn. $
---------
Lesser of (i) 55% of Consolidated PP&E and Cdn. $ (A)
---------
(ii) Cdn. $90,000,000
_Eligible Accounts Receivable
Eligible Accounts Receivable of the Company
and its Subsidiaries. Cdn. $
---------
75% of Eligible Account Receivables Cdn. $ (B)
---------
Borrowing Base (sum of A + B) Cdn. $
---------
VI-3
2. Total Utilization of Revolving Loan Commitments
Aggregate principal amount of all outstanding Revolving Loans,
including, for certainty, the face amount of all outstanding Bankers'
Acceptance and BA Discount Notes made under the Revolving Loan
Commitment, and the Letter of Credit Usage. Cdn. $
---------
3. Principal Amount of Term Loans
Aggregate principal amount of all outstanding Term Loans (whether by
way of Prime Rate Loans or Bankers' Acceptances). Cdn. $
---------
Total Utilization of Revolving Loan Commitments plus Principal Amount of
Term Loans Cdn. $
---------
Excess (deficiency) of Borrowing Base over Total Utilization of Revolving
Loan Commitments plus Principal Amount of Term Loans Cdn. $
---------
[II. Company to provide a summary aged accounts receivable list identifying
those accounts receivable that are not Eligible Account Receivables and a
brief explanation as to the reasons therefor.]
VI-4
EXHIBIT VII
TO THE CREDIT AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
TO: ROYAL BANK OF CANADA, as Administrative Agent
Re: Credit Agreement dated as of November 26th, 2003 among North American
Energy Partners Inc., as borrower (the "Company"), and the Persons party
thereto as lenders (collectively, the "Lenders") and Royal Bank of Canada,
as Administrative Agent (the "Administrative Agent"), and the other Agents
(such Credit Agreement, as it may be amended, supplemented or otherwise
modified or restated from time to time, referred to as the "Credit
Agreement").
1. This Compliance Certificate is given pursuant to Section 8.1(iv)(b) of the
Credit Agreement. Capitalized terms used herein and not otherwise defined
herein have the meanings given to them in the Credit Agreement.
2. I am the duly appointed [_] of the Company and hereby certify in such
capacity for and on behalf of the Company and not in my personal capacity
and without assuming any personal liability whatsoever, after making due
inquiry:/3/
(a) that I have reviewed the terms of this Compliance Certificate and the
Credit Agreement and have made or caused to be made under my
supervision a review in reasonable detail of the transactions and
condition of the Company and its Subsidiaries during the [calendar
month ended _][Fiscal Quarter ended _][Fiscal Year ended _] and that
such review has not disclosed the existence during or at the end of
such period, and that I do not have knowledge of the existence as of
the date hereof, of any condition or event that constitutes an Event
of Default or Potential Event of Default[, except as described in
Schedule 1 hereto];
(b) as at the end of the four-Fiscal Quarters ended _ , the ratio of
Consolidated EBITDA to Consolidated Cash Interest Expense was _. The
required ratio of Consolidated EBITDA to Consolidated Cash Interest
Expense pursuant to Section 9.6A of the Credit Agreement as at such
date was _, and accordingly the Company was [not] in compliance with
such ratio at such time;
(c) as at the end of the four-Fiscal Quarters ended _, the ratio of
Consolidated EBITDA to Consolidated Fixed Charges was _. The required
ratio of Consolidated EBITDA to Consolidated Fixed Charges pursuant to
Section 9.6B of the Credit Agreement as at such date was _, and
accordingly the Company was [not] in compliance with such ratio at
such time;
----------
/3/ Insert applicable paragraph for the accounting period for which this
certificate is being given. For example, insert pargraphs (a) and (g) through
(p), for each monthly Compliance Certificate, paragraphs(a) through (p) for each
Fiscal Quarter Compliance Certificate, and paragraphs (a), and (f) through (t),
for each Fiscal Year Compliance certificate.
VII-1
(d) as at the end of the Fiscal Quarter ended _, the Consolidated Leverage
Ratio was _. The required Consolidated Leverage Ratio pursuant to
Section 9.6C of the Credit Agreement as at such date was _, and
accordingly the Company was [not] in compliance with such ratio at
such time;
(e) as at the end of the Fiscal Quarter ended _, the Consolidated Senior
Leverage Ratio was _. The required Consolidated Senior Leverage Ratio
pursuant to Section 9.6D of the Credit Agreement as at such date was
_, and accordingly the Company was [not] in compliance with such ratio
at such time;
(f) as at the end of the four-Fiscal Quarters ended _, the Consolidated
EBITDA for such period was _. The required Consolidated EBITDA as at
such date pursuant to Section 9.6E of the Credit Agreement was _, and
accordingly the Company was [not] in compliance with such ratio at
such time;
(g) pursuant to Section 9.1(iii) of the Credit Agreement, as at any time
during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
and its Domestic Subsidiaries had (directly or indirectly) become and
remained liable with respect to Indebtedness in respect of Capital
Leases in an aggregate amount not in excess of Cdn. $_. Section
9.1(iii) of the Credit Agreement prohibits the Company and its
Domestic Subsidiaries from (directly or indirectly) becoming and
remaining liable with respect to Indebtedness in respect of Capital
Leases in an aggregate amount in excess of Cdn. $20,000,000 at any one
time, and accordingly the Company was [not] in compliance with such
provision of the Credit Agreement during such period;
(h) pursuant to Section 9.1 (vi) of the Credit Agreement, as at any time
during the [month] [Fiscal Quarter] [Fiscal Year] ended _, the Company
had (directly or indirectly) become and remained liable with respect
to Indebtedness evidenced by the Senior Notes in an aggregate
principal amount not in excess of Cdn. $_. Section 9.1(vi) of the
Credit Agreement prohibits the Company from (directly or indirectly)
becoming and remaining liable with respect to Indebtedness evidenced
by the Senior Notes in an aggregate principal amount in excess of U.S.
$200,000,000 and, accordingly, the Company was [not] in compliance
with the provision of the Credit Agreement during such period;
(i) pursuant to Section 9.1(vii) of the Credit Agreement, as at any time
during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
and its Domestic Subsidiaries had (directly or indirectly) become and
remained liable with respect to Indebtedness (other than as permitted
pursuant to Section 9.1(i) through (vi) of the Credit Agreement) in an
aggregate amount not in excess of Cdn. $_. Section 9.1(vii) of the
Credit Agreement prohibits the Company and its Domestic Subsidiaries
from (directly or indirectly) becoming and remaining liable with
respect to such Indebtedness in an aggregate amount in excess of Cdn.
$20,000,000 at any time outstanding, and accordingly the Company was
[not] in compliance with such provision of the Credit Agreement during
such period;
(j) pursuant to Section 9.2A(iii) of the Credit Agreement, as at any time
during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
and its Subsidiaries had (directly or indirectly) created, incurred,
assumed or permitted to exist Liens (other than those described in
Sections 9.2(A)(i), (ii) and (iv) of the Credit Agreement) that did
not in the aggregate secure Indebtedness in excess of Cdn. $_. Section
9.2A(iii) of the Credit
VII-2
Agreement prohibits the Company from (directly or indirectly)
creating, incurring, assuming or permitting to exist any such Liens to
secure Indebtedness in an aggregate amount in excess of Cdn.
$20,000,000 at any time outstanding, and accordingly, the Company was
[not] in compliance with such provision of the Credit Agreement during
such period. Details of usage of Section 9.2(iii), including to secure
bonds outstanding under the Bonding Program, and Letters of Credit
securing the Bonding Program, are provided in Schedule 2 hereto;
(k) pursuant to Section 9.2(A)(iv) of the Credit Agreement, as at any time
during the [month] [Fiscal Quarter] [Fiscal Year] ended _, the Company
and its Subsidiaries had (directly or indirectly) created, incurred,
assumed or permitted to exist Liens on cash as security for the
Bonding Program in an amount not in excess of Cdn. $_ , and (i) at the
time such Liens were granted, there [was] [was not] a Fronting Bank
and there [was] [was not] any other Revolving Lender or Revolving
Lender(s) satisfactory to the providors of the Bonding Program that
agreed to provide all Letters of Credit to serve as security therefor,
and (ii) after giving effect to the granting of such Liens, the sum of
the amount of cash subject to such Liens plus the Letters of Credit
Usage then outstanding did not exceed Cdn. $_. Section 9.2(iv) of the
Credit Agreement permits the Company and its Subsidiaries to (directly
or indirectly) create, incur, assume or permit to exist Liens on cash
as security for the Bonding Program in an amount not to exceed Cdn.
$30,000,000, but only if (a) at the time such Liens are granted, there
is no Fronting Bank, and there are no other Revolving Lender or
Revolving Lenders satisfactory to the providors of the Bonding Program
that have agreed to provide all Letters of Credit to serve as security
therefor, and (ii) after giving effect to the granting of such Liens,
the sum of the amount of cash subject to such Liens plus the Letters
of Credit Usage then outstanding does not exceed Cdn. $30,000,000.
Accordingly, the Company was [not] in compliance with such provision
of the Credit Agreement during such period;
(l) pursuant to Section 9.3(ix) of the Credit Agreement, as at any time
during the [month] [Fiscal Quarter] [Fiscal Year] ended _, the Company
had (directly or indirectly) made and owned Permitted Joint Venture
Investments in an aggregate amount not in excess of Cdn. $_. Section
9.3(ix) of the Credit Agreement prohibits the Company from (directly
or indirectly) making and owning Permitted Joint Venture Investments
in an aggregate amount in excess of Cdn. $10,000,000 at any time, and
accordingly, the Company was [not] in compliance with such provision
of the Credit Agreement during such period;
(m) pursuant to Section 9.3(x) of the Credit Agreement, as at any time
during the [month] [Fiscal Quarter] [Fiscal Year] ended _, the Company
and its Domestic Subsidiaries had (directly or indirectly) made and
owned Investments (other than those permitted pursuant to Sections
9.3(i) through 9.3(ix) of the Credit Agreement) in an aggregate amount
not in excess of Cdn. $_. Section 9.3(x) of the Credit Agreement
prohibits the Company from (directly or indirectly) making and owning
such Investments in an aggregate amount in excess of Cdn. $15,000,000
at any time, and accordingly, the Company was [not] in compliance with
such provision of the Credit Agreement during such period;
(n) pursuant to Section 9.4(ii) of the Credit Agreement, as at any time
during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
had (directly or indirectly) become and remained liable with respect
to Contingent Obligations in respect of Letters of Credit, and the
Company and its Subsidiaries had (directly or indirectly) become and
remained liable with respect to Contingent Obligations in respect of
other letters of credit
VII-3
in an aggregate amount not in excess of Cdn. $_. Section 9.4(ii) of
the Credit Agreement prohibits the Company (and its Subsidiaries) from
(directly or indirectly) becoming liable with respect to such Letters
of Credit and other letters of credit in an aggregate amount in excess
of Cdn. $10,000,000 at any time, and accordingly, the Company was
[not] in compliance with such provision of the Credit Agreement during
such period;
(o) pursuant to Section 9.4(iv) of the Credit Agreement, as at any time
during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
had (directly or indirectly) become and remained liable with respect
to Contingent Obligations under other Hedge Agreements with respect to
Indebtedness in an aggregate notional principal amount not in excess
of Cdn. $_. Section 9.4(iv) of the Credit Agreement prohibits the
Company from (directly or indirectly) becoming and remaining liable
with respect to such Contingent Obligations under other Hedge
Agreements with respect to Indebtedness in an aggregate notional
principal amount in excess of Cdn. $30,000,000 at any time, and
accordingly, the Company was [not] in compliance with such provision
of the Credit Agreement during such period;
(p) pursuant to Section 9.4(x) of the Credit Agreement, as at any time
during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
and its Domestic Subsidiaries had (directly or indirectly) become and
remained liable with respect to Contingent Obligations (other than
those described in Section 9.4(i) through (ix) of the Credit
Agreement) in an aggregate amount not in excess of Cdn. $_. Section
9.4(x) of the Credit Agreement prohibits the Company and its Domestic
Subsidiaries from (directly or indirectly) becoming and remaining
liable with respect to such other Contingent x Obligations in an
aggregate amount in excess of Cdn. $10,000,000 at any time, and
accordingly, the Company was [not] in compliance with such provision
of the Credit Agreement during such period;
(q) pursuant to Section 9.5(i) of the Credit Agreement, as at the end of
the Fiscal Year ended _, the Company had (directly or indirectly) made
Restricted Junior Payments to Holdings in an aggregate amount not in
excess of Cdn. $_, to the extent necessary to permit Holdings to pay
general administrative costs and expenses. Section 9.5(i) of the
Credit Agreement prohibits the Company from making any such Restricted
Junior Payments to Holdings in an aggregate amount in excess of Cdn.
$1,000,000 in any Fiscal Year to the extent necessary to permit
Holdings to pay general administrative costs and expenses, and
accordingly, the Company was [not] in compliance with such provision
in the Credit Agreement at such time.
(r) pursuant to Section 9.5(ii) of the Credit Agreement, as at the end of
the Fiscal Year ended _, the Company had made Restricted Junior
Payments to Holdings that did not in the aggregate exceed Cdn. $_ in
such Fiscal Year or Cdn. $_ during the term of this Agreement, for
distribution to Parent to permit Parent to repurchase shares of Parent
Common Stock (or options or warrants to acquire Parent Common Stock)
from employees of the Company, all such Restricted Junior Payments
being made at such times as no Event of Default or Potential Event of
Default had occurred and was continuing or was caused thereby. Section
9.5(ii) of the Credit Agreement allows the Company to make such
Restricted Junior Payments to Holdings in an aggregate amount not in
excess of Cdn. $2,000,000 in any Fiscal Year and Cdn. $10,000,000
during the term of the Credit Agreement, provided that no Event of
Default or Potential Event of
VII-4
Default shall have occurred or shall be caused thereby, and
accordingly, the Company was [not] in compliance with such provision
in the Credit Agreement at such date;
(s) pursuant to Section 9.7(iv) of the Credit Agreement, as at the end of
the Fiscal Year ended _, the Company and its Subsidiaries had made
Asset Sales of assets having a fair market value not in excess of Cdn.
$_, of which (i) the total consideration received for such assets was,
or will be Cdn. $_ (of which _% was, or will be cash), and (ii) the
proceeds [were, or will be,][were not] applied as required by Section
2.4B(iii)(a) or Section 2.4G of the Credit Agreement. Section 9.7(iv)
of the Credit Agreement (i) prohibits the Company and its Subsidiaries
from making Asset Sales having a fair market value in excess of Cdn.
$15,000,000 in any Fiscal Year, (ii) requires that the consideration
received for such assets must be in an amount at least equal to the
fair market value thereof, (iii) requires that at least seventy five
percent (75%) of the consideration received be in cash, and (iv)
requires that the proceeds of such Asset Sales be applied as required
by subsection 2.4B(iii)(a) and subsection 2.4G of the Credit
Agreement, and accordingly, the Company was [not] in compliance with
such provision in the Credit Agreement at such time;
(t) pursuant to Section 9.8 of the Credit Agreement, as at the end of the
Fiscal Year ended _, the Company and its Subsidiaries have made or
incurred Consolidated Capital Expenditures in an aggregate amount not
in excess of Cdn. $_. Pursuant to Section 9.8 of the Credit Agreement,
the Company and its Subsidiaries are prohibited from making or
incurring Consolidated Capital Expenditures in such period in an
amount in excess of Cdn. $_ in such period, and accordingly, the
Company was [not] in compliance with such provision in the Credit
Agreement at such date;
and attached hereto in Schedule 2 are detailed particulars of the manner in
which the financial ratios described in paragraphs [(b) - (f)] above were
calculated and detailed particulars of the matters described in paragraphs
[(g) - (t)] above.
DATED this day of , 200 .
------ --------------------- ---
NORTH AMERICAN ENERGY
PARTNERS INC.
By:
--------------------------------
Name:
Title:
VII-5
SCHEDULE 1
TO THE COMPLIANCE CERTIFICATE
EVENT(S) OF DEFAULTS/POTENTIAL EVENT(S) OF DEFAULT
[Insert details of any Event of Default or Potential Event of Default, including
the nature and period of existence thereof and what action the Company has
taken, and proposes to take, with respect thereto.]
VII-6
SCHEDULE 2
TO THE COMPLIANCE CERTIFICATE
CALCULATIONS
I. For the purposes of this Compliance Certificate, the financial ratios in
Section 2[(b)-(f)] therein have been determined as follows, all on a
consolidated basis for the Company and its Subsidiaries in conformity with
GAAP:
1. Section 2(b): Consolidated EBITDA/Consolidated Cash Interest Expense
Consolidated EBITDA
Consolidated Net Income. Cdn. $
---------
plus:
Consolidated Interest Expense (to the extent
deducted in the calculation of
Consolidated Net Income). Cdn. $
---------
plus:
provisions for taxes based on income (to the extent
deducted in the calculation of
Consolidated Net Income). Cdn. $
---------
plus:
total depreciation expense (to the extent
deducted in the calculation of
Consolidated Net Income). Cdn. $
---------
plus:
total amortization expense (to the extent
deducted in the calculation of
Consolidated Net Income). Cdn. $
---------
plus:
other non-cash items (other than any such items to
the extent that it represents an accrual of or
reserve for cash expenditures in any future
period) (to the extent deducted in the calculation
of Consolidated Net Income). Cdn. $
---------
less:
other non-cash items added in the calculation of
Consolidated Net Income (other than any such items
to the extent it will result in the receipt of
cash payments in any future period). Cdn. $
---------
Consolidated EBITDA Cdn. $
---------
VII-7
Consolidated Cash Interest Expense
Consolidated Interest Expense for such period,
excluding any interest expense not payable in Cash
(such as non-cash amortization and write-off of
discount and debt issuance costs.) Cdn. $
---------
Consolidated Cash Interest Expense Cdn. $
---------
Consolidated EBITDA/Consolidated Cash Interest Expense =
$_/ Cdn. $_ ---------
2. Section 2(c): Consolidated EBITDA/Consolidated Fixed Charges
Consolidated EBITDA (calculated in accordance with
Item #1 above, except that total depreciation expense
shall be omitted from such calculation) Cdn. $
---------
Consolidated Fixed Charges
Consolidated Cash Interest Expense. Cdn. $
---------
plus:
Scheduled principal payments in respect of
Consolidated Total Debt. Cdn. $
---------
plus:
Current taxes based on income of the Company and its
Subsidiaries and paid in cash with respect to
such period. Cdn. $
---------
plus:
Restricted Junior Payments. Cdn. $
---------
plus:
Aggregate amount of all rents paid or payable
during the applicable period under all
Capital Leases to which the Company or any of
its Subsidiaries is a party (for certainty,
excluding the interest portion to the extent
included by Consolidated Cash Interest
Expense). Cdn. $
---------
Consolidated Fixed Charges Cdn. $
---------
Consolidated EBITDA / Consolidated Fixed Charges = Cdn $_/Cdn $_
---------
VII-8
3. Section 2(d): Consolidated Leverage Ratio
Consolidated Leverage Ratio = Consolidated Total
Debt/Consolidated EBITDA
Consolidated Total Debt
Aggregate stated balance sheet amount of all
Indebtedness of the Company and its Subsidiaries
(with the amount of any such Indebtedness incurred
in any currency other than Canadian Dollars, to
the extent of the principal amount hedged pursuant
to a Currency Agreement, determined by reference
to the exchange rate between such currency and
Canadian Dollars set forth in such Currency
Agreement as the basis for determining the
respective parties obligations thereunder). Cdn. $
---------
Plus:
Letter of Credit Usage and reimbursement
obligations in respect of other letters of credit,
surety bonds or similar instruments in excess of
the lesser of (a) Cdn. $30,000,000 and (b) the
maximum aggregate amount of Letters of Credit that
are permitted to be outstanding under the Credit
Agreement at the time of determination. Cdn. $
---------
Consolidated Total Debt Cdn. $
---------
Consolidated EBITDA [(calculated in accordance with
Item #1 above)] [(as deemed in accordance with
the definition thereof in the Credit Agreement.]) Cdn. $
--------
Consolidated Leverage Ratio = Cdn. $_/Cdn. $_
---------
4. Section 2(e): Consolidated Senior Leverage Ratio
Consolidated Senior Leverage Ratio = Consolidated
Total Senior Debt/Consolidated EBITDA
Consolidated Total Senior Debt
The principal amount of the Obligations (including
the face amount of Bankers' Acceptances and issued
Letters of Credit in excess of the lesser of (i)
Cdn. $30,000,000 and (b) the maximum aggregate
amount of Letters of Credit that are permitted to
be outstanding under the Credit Agreement at the
time of determination), and any other Indebtedness
of the Company or any of its Subsidiaries that is
secured by any Lien. Cdn. $
---------
Consolidated Total Senior Debt Cdn. $
---------
VII-9
Consolidated EBITDA [(calculated in accordance
with Item #1 above)] [(as deemed in accordance
with the definition thereof in the Credit
Agreement.)] Cdn. $
---------
Consolidated Senior Leverage Ratio = Cdn. $_/Cdn.
$_ ---------
5. Section 2(f): Consolidated EBITDA
[(calculated in accordance with Item #1
above)] [(as deemed in accordance with the
definition thereof in the Credit Agreement.]) Cdn. $
---------
II. Detailed Particulars of any matters described in Section 2[(g) - (t)]
of the Compliance Certificate
[Insert details]
VII-10
EXHIBIT VIII
TO THE CREDIT AGREEMENT
[INTENTIONALLY LEFT BLANK]
VIII-11
EXHIBIT IX
TO THE CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") is made as
of the _______ day of _, 200___.
BETWEEN:
_
(hereinafter referred to as the "Assignor")
OF THE FIRST PART
- and -
_
(hereinafter referred to as the "Assignee")
OF THE SECOND PART
[- and -]
[NORTH AMERICAN ENERGY PARTNERS INC., a corporation incorporated under
the laws of Canada (hereinafter referred to as the "Company")
OF THE THIRD PART]
[- and -]
[ROYAL BANK OF CANADA, in its capacity as administrative agent to the
Lenders (hereinafter referred to as the "Administrative Agent"),
OF THE FOURTH PART]
WHEREAS the Assignor is a Lender under the Credit Agreement dated as
of November 26th, 2003 among the Company, the Persons party thereto as lenders
(collectively, the "Lenders"), the Administrative Agent, and the other Agents,
as it may be amended, supplemented or otherwise modified or restated from time
to time, referred to as the "Credit Agreement");
IX-1
AND WHEREAS the Assignor has agreed to assign and transfer to the
Assignee certain rights under the Credit Agreement in compliance with the Credit
Agreement, and the Assignee has agreed to accept such rights and assume certain
obligations of the Assignor under the Credit Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration (the receipt and sufficiency of which are hereby
conclusively acknowledged), the parties hereby agree as follows:
1. Interpretation
(a) In this Agreement, including the recitals, capitalized terms used
herein, and not otherwise defined herein, shall have the same meanings
attributed thereto as set forth in the Credit Agreement. In addition,
the following terms shall have the following meanings:
(i) "Assigned Commitments" has the meaning set forth in Section 2
hereof;
(ii) "Assigned Interests" has the meaning set forth in Section 2
hereof;
(iii) "Assumed Obligations" has the meaning set forth in Section 4
hereof;
(iv) "Effective Date" means the date this Agreement is executed by all
parties hereto;
(v) "Indemnity Amount" has the meaning set forth in Section 3 hereof;
and
(vi) "Outstanding Assignor BA's" has the meaning set forth in Section
3 hereof.
(b) The division of this Agreement into Articles, Sections, paragraphs and
other subdivisions and the insertion of headings are for convenience
of reference only and shall not affect the construction or
interpretation hereof.
(c) In this Agreement:
(i) the terms "this Agreement", "hereof", "herein", "hereunder" and
similar expressions refer, unless otherwise specified, to this
Agreement taken as a whole and not to any particular section,
subsection or paragraph;
(ii) words importing the singular number or masculine gender shall
include the plural number or the feminine or neuter genders, and
vice versa; and
(iii) words and terms denoting inclusiveness (such as "include" or
"includes" or "including"), whether or not so stated, are not
limited by their context or by the words or phrases which precede
or succeed them.
(d) This Agreement shall be governed by and interpreted in accordance with
the laws of the Province of Alberta and the laws of Canada applicable
therein. The parties hereby irrevocably submit to the non-exclusive
jurisdiction of the courts of the Province of Alberta, without
prejudice to the rights of the parties to take proceedings in any
other jurisdictions.
(e) If any provision of this Agreement shall be invalid, illegal or
unenforceable in any respect in any jurisdiction, it shall not affect
the validity, legality or enforceability of any
IX-2
such provision in any other jurisdiction or the validity, legality or
enforceability of any other provision of this Agreement.
2. Assignment of Rights by Assignor
Effective as of the Effective Date, the Assignor hereby absolutely
assigns and transfers to the Assignee:
(a) subject to Section 3 hereof, [[all OR _% of all] of its right, title
and interest in, to and under each of the outstanding Term Loans]
[and] [[all or _% of all] of its right, title and interest in, to and
under each of the outstanding Revolving Loans, including the
corresponding right, title and interest in, to and under each of the
Letters of Credit or any participation therein issued pursuant to such
Revolving Loans] [and] [[all or _% of all] of its right, title and
interest in, to and under each of the outstanding Swing Line Loans4]
owing by the Company under the Credit Agreement; [and]
(b) [Cdn. $_ of the Assignor's Term Loan Commitment,] [and] [Cdn. $_ of
the Assignor's Revolving Loan Commitment, including the corresponding
right, title and interest in, to and under each of the Letters of
Credit or any participation therein issued pursuant to such Revolving
Loans] [and] [Cdn. $_ of the Assignor's Swing Line Loan Commitment]
(collectively, the "Assigned Commitments");
together with all of the Assignor's other rights and obligations under the
Credit Agreement and the other Loan Documents, provided that each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under the Credit Agreement with
respect to such Loan(s) or the Assigned Commitments (collectively, the "Assigned
Interests"). Effective as of the Effective Date, the Assignor shall, to the
extent of the Assigned Interests, relinquish its rights, (other than any rights
which survive the termination of the Credit Agreement under subsection 12.9A
thereof) and be released from its obligations under the Credit Agreement (and,
in the event that the Assigned Interests cover all or the remaining portion of
the Assignor's rights and obligations under the Credit Agreement, the Assignor
shall cease to be a party to the Credit Agreement, provided that anything
contained in any of the Loan Documents or this Agreement to the contrary
notwithstanding, if the Assignor is an Issuing Lender, the Assignor shall
continue to have all rights and obligations of an Issuing Lender until the
cancellation or expiration of any Letters of Credit issued by it and the
reimbursement of any amounts thereunder). [NOTE: Delete any particular Loans or
Commitments if not being assigned.]
3. Outstanding Assignor BAs
The parties hereto agree that the outstanding Bankers' Acceptances
accepted by the Assignor and described in Appendix I hereto (collectively, the
"Outstanding Assignor BAs") shall remain the liability and obligation of the
Assignor and the Assignor shall be entitled to all of the rights, titles and
benefits arising out of the Credit Agreement and the other Loan Documents with
respect to such Outstanding Assignor BAs (including reimbursement rights);
provided, however, that the Assignee shall indemnify the Assignor for the
respective amounts set forth under the heading "Indemnity Amount" in
----------
/4/ Note that except as provided in Section 2.1A(iii) and Section 11.5 of the
Credit Agreement, the Swing Line Loans and Swing Loan Subcommitment of Swing
Line Lender may not be sold, assigned or transfered to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contempleted
by Section 11.5 of the Credit Agreement.
IX-3
Appendix I in respect of such Outstanding Assignor BAs (other than losses or
costs with respect to such Indemnity Amounts which arise out of the negligence
or wilful misconduct of the Assignor).
4. Assumption of Obligations by Assignee
The Assignee assumes and covenants and agrees to be responsible for
all obligations relating to the Assigned Interests to the extent such
obligations arise or accrue on or after the Effective Date (collectively, the
"Assumed Obligations") and agrees that it will be bound by the Credit Agreement
and the other Loan Documents to the extent of the Assumed Obligations as fully
as if it had been an original party to the Credit Agreement.
5. Credit Agreement References; Notices
Effective as of the Effective Date:
(a) the Assignee shall be a Lender to the extent of its Assigned Interests
under the Credit Agreement and the other Loan Documents and all
references therein to "Lenders" or "a Lender" shall be deemed to
include the Assignee;
(b) the Commitments of the Assignee shall be the Assigned Commitments and
all references in the Credit Agreement to the Commitments of the
Assignee shall be deemed to be to the Assigned Commitments;
(c) any demand, notice or communication to be given to the Assignee in
accordance with Section 12.8 of the Credit Agreement shall be made or
given to the following address or telecopy number (until the Assignee
otherwise gives notice in accordance with such Section 12.8):
[Insert applicable address]
; and
(d) Schedule 2.1 to the Credit Agreement shall be deemed to be and is
hereby amended to the extent necessary to give effect to the
assignment of the Assigned Commitments contemplated hereby and to give
effect to Sections 5(b) and 5(c) hereof.
6. The Administrative Agent
Without in any way limiting the provisions of Section 4 hereof, the
Assignee irrevocably appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto, all in accordance with the provisions of the Credit
Agreement and the other Loan Documents.
7. No Entitlement to Prior Interest or Other Fees
Except as otherwise agreed in writing between the Assignor and the
Assignee, notwithstanding any provision of the Credit Agreement or other Loan
Documents or any other provision of this Agreement, the Assignee shall have no
right, title or interest in or to any interest or fees paid or to be paid to the
Assignor under, pursuant to or in respect of:
IX-4
(a) [the fees paid to the Assignor in respect of the establishment of the
Commitments and Loans;]
[NOTE: Insert 7(a) above, as applicable.]
(b) [the fees payable to the Administrative Agent for acting as
Administrative Agent under the Credit Agreement; or]
[NOTE: 7(b) above to be inserted for any assignment by the
Administrative Agent.]
(c) the Loans, the Commitments or the Credit Agreement for any period of
time or in respect of any event or circumstance prior to the Effective
Date.
8. [Consent of [Company] [and] [Administrative Agent]]/5/
[The Company and] the Administrative Agent hereby consent[s] to the
assignment of the Assigned Interests to the Assignee and the assumption of the
Assumed Obligations by the Assignee and, as and from the Effective Date,
agree[s] to recognize the Assignee as a Lender under the Credit Agreement as
fully (to the extent of its Assigned Interests) as if the Assignee had been an
original party to the Credit Agreement.
9. [Consent of Assignee]/6/
[The Assignee hereby agrees and acknowledges that (i) this assignment
and assumption is made pursuant to Section 2.8 of the Credit Agreement, and (ii)
the Assignor is a "Subject Lender" and "Non-Consenting Lender" as such terms are
defined therein. In furtherance thereof, Assignee hereby consents, as of the
date hereof, to [Insert details of proposed amendment, modification or waiver
requiring 100% of the Lenders or 100% of the Lenders with Obligations directly
affected thereby pursuant to which the Assignor refused to grant its consent].
10. Representations and Warranties
(a) Representations of each of Assignor and Assignee. Each of the Assignor
and the Assignee hereby represents and warrants to the other parties
to this Agreement as follows:
(i) it is validly subsisting under the laws of its governing
jurisdiction;
(ii) it has all necessary power and authority to enter into this
Agreement and to perform its obligations hereunder and under the
Credit Agreement and the other Loan Documents;
(iii) the execution, delivery, observance and performance on its part
of this Agreement has been duly authorized by all necessary
action and this Agreement
----------
/5/ Refer to Section 12.1B of the Credit Agreement regarding required consent,
if any, to the assignment contemplated herein.
/6/ To be inserted if the Assignor is a "Subject Lender" and "Non-Consenting
Lender" that is beign replaced pursuant to Section 2.8 of the Credit Agreement.
IX-5
constitutes a legal, valid and binding obligation of such party
enforceable against it in accordance with its terms;
(iv) all consents, authorizations and approvals of any Governmental
Authority, if any, required for the execution, delivery,
observance and performance by it of this Agreement, the Credit
Agreement and the other Loan Documents have been obtained and
remain in full force and effect, all conditions have been duly
complied with and no action by, and no notice to or other filing
with any Governmental Authority is required for such execution,
delivery, observance or performance; and
(v) [it is in compliance with the restrictions set forth in Section
12.1(B)(i)(a) of the Credit Agreement.]/7/
(b) Representations of Assignee. The Assignee further represents, warrants
and covenants that:
(i) it is an Eligible Assignee by virtue of [Insert particulars];
(ii) it is not a "non-resident" of Canada within the meaning of the
Income Tax Act (Canada);
(iii) [it is a [Lender][Affiliate of a Lender][Approved Fund of a
Lender];]
(iv) it has experience and expertise in the making of or purchasing
loans such as the Loans assigned hereunder; and
(v) it will make or purchase Loans for its own account in the
ordinary course of its business and without a view to
distribution of such Loans within the meaning of the Securities
Act (United States) or the Exchange Act (United States) or other
federal securities laws of the United States.
(c) Representations of Assignor. The Assignor further represents and
warrants to the Assignee that it has the right to sell to the Assignee
the Assigned Interests and that the same are free and clear of all
Liens.
(d) [Representations of the Company. The Company represents and warrants
to each of the Assignor and Assignee that it is concurrently requiring
each other Subject Lender that is a Non-Consenting Lender to assign
its Loans and Commitments under the Credit Agreement.]/8/
The representations and warranties set out in this Agreement shall
survive the execution and delivery of this Agreement and notwithstanding any
examinations or investigations which may be made by the parties or their
respective legal counsel.
----------
/7/ To be deleted if such provision has been waived by the Administrative Agent
and Company (if applicable) pursuant to Section 8 hereof.
/8/ To be inserted if the Assignor is a "Subject Lender" and "Non-Consenting
Lender" that is beign replaced pursuant to Section 2.8 of the Credit Agreement
IX-6
Except as expressly provided herein, the Assignee confirms that this
Agreement is entered into by the Assignee without any representations or
warranties by the Assignor or the Administrative Agent on any matter whatsoever,
including on the effectiveness, validity, legality, enforceability, adequacy or
completeness of the Credit Agreement or any other Loan Document delivered
pursuant thereto or in connection therewith or any of the terms, covenants and
conditions therein or on the financial condition, creditworthiness, condition,
affairs, status or nature of the Company.
11. Assignee Credit Decision
The Assignee acknowledges to the Assignor and the Administrative Agent
that the Assignee has itself been, and will continue to be, solely responsible
for making its own independent appraisal of and investigations into the
financial condition, creditworthiness, condition, affairs, status and nature of
the Company, all of the matters and transactions contemplated herein and in the
Credit Agreement and the other Loan Documents and all other matters incidental
to the Credit Agreement and the other Loan Documents. The Assignee confirms with
the Assignor and the Administrative Agent that it does not rely, and it will not
hereafter rely, on the Administrative Agent or the Assignor:
(a) to check or inquire on its behalf into the adequacy, accuracy or
completeness of any information provided by the Company or any other
Person under or in connection with the Credit Agreement and the other
Loan Documents or the transactions therein contemplated (whether or
not such information has been or is hereafter distributed to the
Assignee by the Administrative Agent); or
(b) to assess or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of the Company.
The Assignee acknowledges that a copy of the Credit Agreement (including a copy
of the schedules thereto) has been made available to it for review and further
acknowledges and agrees that it has received copies of such other Loan Documents
and such other information that it has requested for the purposes of its
investigation and analysis of all matters related to this Agreement, the Credit
Agreement, the other Loan Documents and the transactions contemplated hereby and
thereby. The Assignee acknowledges that it is satisfied with the form and
substance of the Credit Agreement and the other Loan Documents.
12. Payments
The Assignor and the Assignee acknowledge and agree that all payments
under the Credit Agreement in respect of the Assigned Interests from and after
the Effective Date received by the Administrative Agent on or after the
Effective Date and on behalf of the Assignee shall be the property of the
Assignee and the Administrative Agent shall be entitled to treat the Assignee as
solely entitled thereto.
13. Amendments and Waivers
Any amendment or modification or waiver of any right under any
provision of this Agreement shall be in writing (in the case of an amendment or
modification, signed by the parties) and any such waiver shall be effective only
for the specific purpose for which given and for the specific time period, if
any, contemplated therein. No failure or delay by any party in exercising any
right, power or privilege under this Agreement shall operate as a waiver thereof
and any waiver of any breach of the provisions of this Agreement shall be
without prejudice to any rights with respect to any other or further breach.
IX-7
14. General Provisions
(a) The parties hereto shall from time to time and at all times do all
such further acts and things and execute and deliver all such
documents as are required in order to fully perform and carry out the
terms of this Agreement.
(b) The provisions of this Agreement shall enure to the benefit of and
shall be binding upon the parties hereto and their respective
successors and permitted assigns.
(c) This Agreement may be executed and delivered in any number of
counterparts, each of which shall be deemed to be an original, and it
shall not be necessary in making proof of this Agreement to produce or
account for more than one full set of counterparts.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by its duly authorized representative(s) as of the date first above
written.
_, as Assignor
Per:
------------------------------------
Per:
------------------------------------
_, as Assignee
Per:
------------------------------------
Per:
------------------------------------
[NORTH AMERICAN ENERGY
PARTNERS INC.]
Per:
------------------------------------
Per:
------------------------------------
[ROYAL BANK OF CANADA, as
Administrative Agent]
Per:
------------------------------------
Per:
------------------------------------
IX-8
APPENDIX I
OUTSTANDING ASSIGNOR BAs
FACE AMOUNT ISSUE DATE MATURITY DATE INDEMNITY AMOUNT
----------- ---------- ------------- ----------------
[Insert details]
IX-9
EXHIBIT X
TO THE CREDIT AGREEMENT
FORM OF FINANCIAL CONDITION CERTIFICATE
This SOLVENCY CERTIFICATE (this "Certificate") is delivered in connection with
that certain Credit Agreement dated as of November 26th, 2003 by and among North
American Energy Partners Inc., as borrower (the "Company"), the Persons party
thereto as lenders (collectively, the "Lenders") and Royal Bank of Canada, as
administrative agent (the "Administrative Agent") and the other agents (such
Credit Agreement, as it may be amended, supplemented or otherwise modified or
restated from time to time, referred to as the "Credit Agreement"). Capitalized
terms used herein without definition have the same meanings as in the Credit
Agreement.
This Certificate is being delivered pursuant to subsection 6.1N of the Credit
Agreement. The undersigned is a director of Company and hereby further certifies
as of the date hereof, in his capacity as such, and without assuming any
personal liability whatsoever, as follows:
1. I have responsibility for (a) the management of the financial affairs of
Company and each Subsidiary Guarantor and the preparation of, or the
supervision of, financial statements of Company and each Subsidiary
Guarantor, and (b) reviewing the financial and other aspects of the
transactions contemplated by the Credit Agreement and other Loan Documents.
2. I have carefully prepared and/or reviewed the contents of this Certificate
and have conferred with counsel for Company and each Subsidiary Guarantor
for the purpose of discussing the meaning of any provisions hereof that I
desired to have clarified.
3. In preparation for the consummation of the transactions contemplated by the
Credit Agreement and other Loan Documents, I have prepared and/or reviewed
a pro forma balance sheet and related consolidated statements of income and
cash flows for the six month period ending on September 30, 2003 and pro
forma income estimates and pro forma cash flow estimates for each Fiscal
Year during the term of the Credit Agreement for Company and each of its
Subsidiaries on a consolidated basis, in each case after giving effect to
the consummation of the transactions contemplated by the Credit Agreement
and other Loan Documents. The pro forma balance sheets have been prepared
utilizing what I believe are reasonable estimates of the "fair value" and
"present fair saleable value" of the assets of Company and each of its
Subsidiaries. Although any projections may by necessity involve
uncertainties and approximations, the projections are based on good faith
estimates and assumptions believed by me to be reasonable.
4. Based upon the foregoing and to the best of my knowledge after due inquiry,
I have concluded, after giving effect to the consummation of the
transactions contemplated by the Loan Documents, that:
(a) The "fair value" and "present fair saleable value" of the assets of
Company and each Subsidiary Guarantor, taken as a whole, exceed: (x)
the total liabilities of Company and each Subsidiary Guarantor, taken
as a whole, (including their probable liabilities in respect of
contingent and unliquidated liabilities and their unmatured
liabilities), and (y) the amount required to pay such liabilities as
they become absolute and matured in the normal course of business.
(b) Company and each Subsidiary Guarantor, taken as a whole, have the
ability to pay their debts and liabilities (including their probable
liabilities in respect of contingent and
X-1
unliquidated liabilities and their unmatured liabilities) as they
become absolute and matured in the normal course of business.
(c) Company and each Subsidiary Guarantor do not have an unreasonably
small amount of capital with which to conduct their respective
businesses after giving due consideration to the industry in which
they are engaged.
(d) Neither Company nor any Subsidiary Guarantor has executed any Loan
Document or made any transfer or incurred any obligations thereunder,
with actual intent to hinder, delay or defraud either present or
future creditors.
In computing the amount of such contingent and unliquidated liabilities as of
the date hereof, such liabilities have been computed at the amount that, in the
light of all the facts and circumstances existing as of the date hereof,
represents the amount that can reasonably be expected to become an actual or
matured liability.
For the purpose of the above analysis, the values of Company's assets, and each
Subsidiary Guarantor's assets, have been computed by considering Company and
each Subsidiary Guarantor as a going concern entity.
I understand that the Administrative Agent and the Lenders are relying on this
Certificate in extending credit to Company pursuant to the Credit Agreement.
Dated as of the 26th day of November, 2003.
NORTH AMERICAN ENERGY
PARTNERS INC.
By:
------------------------------------
Name:
Title:
X-2
EXHIBIT XI
TO CREDIT AGREEMENT
FORM OF SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE
THIS GUARANTEE is made as of November 26, 2003 among NACG ACQUISITION INC.,
a corporation under the laws of Canada, NORTH AMERICAN CONSTRUCTION GROUP INC.,
a corporation under the laws of Canada, NORTH AMERICAN CONSTRUCTION LTD., a
corporation under the laws of Canada, NORTH AMERICAN CAISSON LTD., a corporation
under the laws of Alberta, NORTH AMERICAN ENGINEERING INC., a corporation under
the laws of Alberta, NORTH AMERICAN ENTERPRISES LTD., a corporation under the
laws of Alberta, NORTH AMERICAN INDUSTRIES INC., a corporation under the laws of
Alberta, NORTH AMERICAN MAINTENANCE LTD., a corporation under the laws of
Alberta, NORTH AMERICAN MINING INC., a corporation under the laws of Alberta,
NORTH AMERICAN PIPELINE INC., a corporation under the laws of Alberta, NORTH
AMERICAN ROAD INC., a corporation under the laws of Alberta, NORTH AMERICAN
SERVICES INC., a corporation under the laws of Alberta, XXXXXXXXX PILE DRIVING
INC., a corporation under the laws of Alberta, NORTH AMERICAN SITE DEVELOPMENT
LTD., a corporation under the laws of Alberta, and NORTH AMERICAN SITE SERVICES
INC., a corporation under the laws of Alberta, NACG FINANCE LLC, a limited
liability company under the laws of Delaware (together with each other
Subsidiary Guarantor who becomes a party hereto pursuant to a Joinder Agreement,
the "Guarantors" and each of them, a "Guarantor"), and the Guarantee
Beneficiaries.
Recitals
1. The Guarantee Beneficiaries have agreed to enter into the Credit Agreement
with North American Energy Partners Inc. (the "Borrower") on the condition
that the Guarantors provide this Guarantee; and
2. The Guarantors will derive significant benefit from the extension of credit
by the Guarantee Beneficiaries to Borrower;
NOW THEREFORE the parties agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Guarantee, unless something in the subject matter or context is
inconsistent therewith:
"Credit Agreement" means the Credit Agreement dated November 26, 2003 among
the Borrower, Royal Bank of Canada, as administrative agent, the other
agents, and the
XI-1
Persons party thereto as lenders, as amended, modified, supplemented or
restated from time to time.
"Guarantee Beneficiaries" means the Lenders, the Swap Lenders, and Royal
Bank of Canada, for itself and as agent for and on behalf of the Lenders
and the Swap Lenders from time to time.
"Guaranteed Obligations" means, collectively and at any time and from time
to time, all Obligations and the Secured Swap Obligations (present or
future, absolute or contingent, matured or not), whether the same are from
time to time reduced and thereafter increased or entirely extinguished and
thereafter incurred again.
"Joinder Agreement" means any joinder agreement in the form attached hereto
as Schedule A pursuant to which any Subsidiary of the Borrower created,
formed, or acquired after the date hereof becomes a Guarantor hereunder in
accordance with Section 8.9 of the Credit Agreement.
"Obligors" means, in respect of each Guarantor, (i) the Borrower and (ii)
each other Subsidiary Guarantor that is party to a Lender Hedge Agreement
from time to time, and "Obligor" means any one of them.
Capitalized words and phrases used in this Guarantee and the recitals and
preamble hereto without express definition herein shall, unless something in the
subject matter or context is inconsistent therewith, have the same defined
meanings as are ascribed to such words and phrases in the Credit Agreement. For
certainty, if the Credit Agreement ceases to be in force for any reason
whatsoever, then for all purposes hereof the aforementioned capitalized words
and phrases shall continue to have the same defined meanings set forth in the
Credit Agreement as if such agreement remained in force in the form immediately
prior to its ceasing to be in force.
1.2 Headings and Guarantee References
(a) The division of this Guarantee into Articles and Sections, and the
insertion of headings is for convenience of reference only and shall
not affect the construction or interpretation of this Guarantee.
(b) The terms "this Guarantee", "hereof", "hereunder" and similar
expressions refer to this Guarantee and not to any particular Article,
Section or other portion hereof, and include any amendments hereto.
Unless otherwise stated, references herein to Articles and Sections
are to Articles and Sections of this Guarantee.
ARTICLE 2
NO COLLATERAL AGREEMENTS
2.1 Acknowledgement
Each of the Guarantors confirms that its obligations under this Guarantee
are not subject to any promise or condition affecting or limiting its liability,
and no statement, representation, collateral agreement or promise on the part of
the Guarantee Beneficiaries or any officer, employee or agent thereof forms any
part of this Guarantee or has induced the making thereof or shall be deemed in
any way to affect such Guarantor's liability hereunder, unless expressly set
XI-2
out herein. It is the parties' intent that all conditions and limitations
relating to this Guarantee be expressly set out herein, failing which the
Guarantors expressly waive reliance thereon as a defence to or limitation of its
obligations hereunder.
ARTICLE 3
GUARANTEE
3.1 Guarantee
Each of the Guarantors hereby absolutely, unconditionally and irrevocably
guarantees to the Guarantee Beneficiaries the due and punctual payment,
discharge and full performance of all Guaranteed Obligations. Each of the
Guarantors covenants that the Guaranteed Obligations will be fully and
punctually paid and performed strictly in accordance with the terms of the
Credit Agreement, any other Loan Document or any Lender Hedge Agreement (as
applicable), whether the same become due on maturity, by mandatory prepayment,
by demand, acceleration or otherwise. Each of the Guarantors hereby indemnifies
the Guarantee Beneficiaries on demand against any loss or liability suffered by
them as a result of any Guaranteed Obligation being or becoming unenforceable,
invalid or illegal up to the amount of the Guaranteed Obligations. The covenants
and agreements on the part of the Guarantors herein contained shall be joint and
several obligations, and no Guarantor shall be released from liability hereunder
by reason of this Guarantee ceasing to be binding on any other Guarantor.
3.2 Continuing Guarantee
This Guarantee shall be a continuing guarantee, shall cover and secure any
ultimate balance owing to the Guarantee Beneficiaries hereunder, and shall be
operative and binding notwithstanding that at any time or times the Guaranteed
Obligations may equal zero or that any payments from time to time may be made to
the Guarantee Beneficiaries or any settlements of account effected or any other
thing whatsoever done, suffered or permitted, or any other action short of
actual and final payment to the Guarantee Beneficiaries of all Guaranteed
Obligations. In furtherance of the foregoing and without limiting the generality
thereof, each Guarantor agrees that: (a) this Guarantee is a guarantee of
payment when due and not collectibility; (b) the obligations of each Guarantor
hereunder are independent of the obligations of the Obligors under the Loan
Documents and the Lender Hedge Agreements and the obligations of any other
guarantor (including any Guarantor hereunder); and (c) a payment of a portion,
but not all, of the Guaranteed Obligations by one or more guarantors (including
any Guarantor hereunder) shall in no way limit, affect, modify or abridge the
liability of any Guarantor for any portion of the Guaranteed Obligations that
has not been paid.
3.3 Other Guarantors
This Guarantee shall be operative and binding regardless of whether or not
any proposed guarantor or any other Persons have executed or shall execute this
Guarantee or is or are or shall become in any other way responsible to the
Guarantee Beneficiaries for or in respect of the Guaranteed Obligations or any
part thereof, and regardless of whether or not any other Persons now or
hereafter liable to the Guarantee Beneficiaries for the Guaranteed Obligations
or any part thereof (whether under this Guarantee or otherwise) shall cease to
be so liable.
XI-3
3.4 Obligor's Identity
This Guarantee is to extend to the Persons for the time being and from time
to time carrying on the business now carried on by the Obligors notwithstanding
any change or changes in the name, business, powers, objects, membership,
directors, partners, shareholders, directorate, organization or management of
any Obligor, and notwithstanding any reorganization of any Obligor or the merger
or amalgamation of any Obligor with another or others (including with any
Guarantor, in which case the obligations of such Guarantor hereunder shall be
direct), or the sale or disposal of any of an Obligor's business in whole or in
part to another or others, or the surrender, forfeiture or termination of its
articles or charter, or the receivership, dissolution, insolvency, winding-up,
arrangement, reorganization, bankruptcy or liquidation of or in respect of any
Obligor, and no such event shall lessen, release or discharge the obligations of
any Guarantor under this Guarantee.
3.5 Acknowledgement of Continued Liability
The Guarantors shall from time to time forthwith on the reasonable request
of the Guarantee Beneficiaries deliver to them suitable acknowledgements of its
continued liability hereunder in such form as counsel for the Guarantee
Beneficiaries may advise, and in the event of the failure of any Guarantor to do
so, such Guarantor hereby irrevocably appoints any Guarantee Beneficiary the
attorney and agent of such Guarantor to make, execute and deliver such written
acknowledgements or other instruments as may from time to time become necessary
or advisable to fully maintain and keep in force the liability of such Guarantor
hereunder.
3.6 Guarantors to Pay; Interest; Currency
(a) If any Obligor shall default in payment or performance of the
Guaranteed Obligations or any part thereof strictly in accordance with
the provisions of the Credit Agreement, any other Loan Document or any
Lender Hedge Agreement (as applicable) as and when the same become
due, payable or performable, then each Guarantor shall, so often as
any such default happens, on demand by the Guarantee Beneficiaries,
forthwith pay to the Guarantee Beneficiaries the amount of the
Guaranteed Obligations then due and payable (including any accelerated
obligations), and perform any obligations which the Obligor is then
obligated to perform. The Guarantee Beneficiaries may enforce this
Guarantee in accordance herewith notwithstanding the existence of any
dispute between any Obligor and any Guarantee Beneficiary with respect
to the existence of such payment or performance default.
(b) If the Guarantee Beneficiaries make demand upon a Guarantor as
provided in this Section, such Guarantor shall thereupon be liable to
the Guarantee Beneficiaries for the amount demanded directly, as
principal, and not just as surety, and will not plead or assert to the
contrary in any proceeding taken by the Guarantee Beneficiaries in
enforcing this Guarantee.
(c) The Guarantors shall pay interest on those of the Guaranteed
Obligations that are payment obligations for which demand shall have
been made, computed from and after the date of demand until payment in
full, at the rate or rates provided in the Credit Agreement, any other
Loan Document or any Lender Hedge Agreement (as applicable) in respect
of the obligation so demanded, calculated and compounded
XI-4
in the same manner, but without duplication of interest which is
payable by the Guarantors where such interest forms part of the
Guaranteed Obligations.
(d) All Guaranteed Obligations that are payment obligations shall be paid
by the Guarantors in whichever currency or currencies in which they
are denominated.
3.7 Statement of Obligations
The statement in writing of the Guarantee Beneficiaries from time to time
of the indebtedness, obligations or liability of the Obligors to them shall be
prima facie evidence of the amount of the indebtedness, obligations or liability
forming the Guaranteed Obligations. Each Guarantor's right to question in any
way the Guarantee Beneficiaries' present or future method of dealing with the
Obligors, or with any Persons (other than such Guarantor) now or hereafter
liable to the Guarantee Beneficiaries for the Guaranteed Obligations or any part
thereof, is hereby waived. The Guarantors renounce all benefits of discussion
and division.
3.8 Not Bound to Exhaust Recourse
The Guarantee Beneficiaries shall not be bound to exhaust their recourse
against any Obligor or to pursue any rights or remedies they may have against
any Obligor or any other Persons, or to make any demand on or present any note
to any Obligor or any other Person, or file any proof of claim in any
insolvency, administration, arrangement, winding-up, liquidation or bankruptcy
before demanding or being entitled to payment from any Guarantor hereunder.
3.9 Authority
The Guarantee Beneficiaries shall not be concerned to see or enquire into
the powers of the Obligors or any of the directors, officers or agents of the
Obligors acting or purporting to act on their behalf, and all moneys, advances,
renewals and credits in fact borrowed or obtained in the professed exercise of
such powers shall be deemed to form part of the Guaranteed Obligations even if
irregularly, fraudulently, defectively or informally effected or in excess of
the powers of the Obligors or any of the directors, officers or agents thereof,
and notwithstanding any incapacity or disability of any thereof, and further
notwithstanding any actual or constructive notice of the powers (or the lack
thereof) of the Obligors or any of the directors, officers or agents thereof.
3.10 Reinstatement
Where any discharge (whether in respect of the obligations of the Obligors,
any security for such obligations or otherwise) is made in whole or in part or
any arrangement is made on the faith of any payment, security or other
disposition which is finally determined to be avoided or must in accordance with
Applicable Law or any order or judgment be repaid on insolvency, bankruptcy,
administration, arrangement, liquidation or otherwise, the liability of the
Guarantors under this Guarantee shall continue as if there had been no such
discharge or arrangement. The Guarantee Beneficiaries shall be entitled to
concede or compromise any claim that any such payment, security or other
disposition is liable to avoidance or repayment.
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3.11 Subrogation; No Competition with Guarantee Beneficiaries
None of the Guarantors shall exercise any rights which it may have acquired
by way of subrogation, indemnity or contribution under this Guarantee (by virtue
of any payment being made by it hereunder, any liability to make payment
hereunder, or otherwise), or exercise any right of contribution against any
other guarantor (including any other Guarantor hereunder), unless and until all
Guaranteed Obligations have been finally paid and performed in full. If any
amount shall be paid (including through any exercise of set-off rights) to any
Guarantor arising out of or based upon such right of subrogation, indemnity,
contribution at a time when the Guaranteed Obligations have not been paid and
performed in full, such amount (in the case of a set-off, an amount equal to
such set-off in fact exercised by it) shall be deemed to have been paid to such
Guarantor for the benefit of, and held by such Guarantor in trust for, the
Guarantee Beneficiaries and shall forthwith be paid to the Guarantee
Beneficiaries to be credited and applied to the Guaranteed Obligations, whether
matured or unmatured.
3.12 Appropriation
During the existence of an Event of Default (or prior to an Event of
Default if no appropriation is made by a Guarantor at the time of payment), the
Guarantee Beneficiaries shall be at liberty (without in any way prejudicing or
affecting their rights hereunder) to appropriate any payment made or monies
received to any portion of the Guaranteed Obligations whether then due or to
become due, and from time to time to revoke or alter any such appropriation, all
as the Guarantee Beneficiaries see fit.
3.13 Preservation of Rights
Until all Guaranteed Obligations have been irrevocably and permanently paid
and discharged in full (whether by the Obligors, the Guarantors or otherwise),
after a claim has been made pursuant to this Guarantee which has not been paid
in full, the Guarantee Beneficiaries may:
(a) refrain from applying or enforcing any other security, monies or
rights held or received by the Guarantee Beneficiaries, as the case
may be, in respect of (or capable of being applied in respect of) such
amounts or apply and enforce the same in such manner and order as the
Guarantee Beneficiaries see fit (whether against such amounts or
otherwise) and the Guarantors shall not be entitled to the benefit of
the same; and
(b) hold in a suspense account (with the obligation to pay interest on the
monies held therein at a reasonable rate available to it for deposits
made by it in the same currency on like terms and in like amounts) any
monies received from the Guarantors or on account of the Guarantors'
liability under this Guarantee.
3.14 Set-Off
In addition to any other rights any Guarantee Beneficiary may have under
law or in equity, if any amount shall at any time be due and owing by a
Guarantor to any Guarantee Beneficiary under this Guarantee, such Guarantee
Beneficiary is authorized at any time or from time to time, without notice (any
such notice being expressly waived), to set off and to appropriate and to apply
any and all deposits (general or special, including but not limited to
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indebtedness evidence by certificates of deposit, whether matured or unmatured)
and any other indebtedness of such Guarantee Beneficiary owing to a Guarantor
and any other property of such Guarantor held by a Guarantee Beneficiary to or
for the credit or the account of such Guarantor against and on account of the
Guaranteed Obligations and liabilities of such Guarantor to any Guarantee
Beneficiary under this Guarantee.
ARTICLE 4
OBLIGATIONS NOT RELEASED
4.1 Obligations Absolute
The obligations of the Guarantors hereunder shall be absolute and
unconditional, and shall not be released, diminished, discharged or in any way
lessened, abated, impaired or reduced by:
(a) the Guarantee Beneficiaries agreeing to any renewal, extension,
increased commitment, change, variation, alteration, restatement,
waiver, modification, the partial release or partial discharge in or
in respect of the Guaranteed Obligations or the Credit Agreement, any
other Loan Document or any Lender Hedge Agreement (as applicable), or
anything done, suffered or permitted by the Guarantee Beneficiaries in
relation to the Guaranteed Obligations or the Credit Agreement, any
other Loan Document or any Lender Hedge Agreement (as applicable),
including any amendment or change in the manner, time, place or
calculation of payment of the Guaranteed Obligations (including
increases or decreases in principal, interest rates, fees or other
obligations);
(b) time or any indulgence being given to any Obligor or any other Person
by the Guarantee Beneficiaries;
(c) the merging of the Credit Agreement, any other Loan Document or any
Lender Hedge Agreement (as applicable) or the Guaranteed Obligations
or other obligations of the Obligors in, or any alteration thereof by
virtue of, any subsequent agreement or amending agreement;
(d) the Guarantee Beneficiaries agreeing to (i) any compromise, partial
discharge, settlement, proposal, subordination, offer of performance
or substitution for or affecting any Guaranteed Obligation or any
agreement relating thereto, or (ii) any arrangement or plan of
reorganization affecting any Obligor or any other guarantor (including
any other Guarantor hereunder);
(e) the Guarantee Beneficiaries agreeing to (i) the release, exchange,
compromise, subordination, substitution or modification of any other
guarantee or any other guarantor (including any other Guarantor
hereunder) or any other Person liable directly or as surety or
otherwise for the Guaranteed Obligations or any part thereof, or (ii)
the addition of any guarantor, endorser or surety;
(f) the Guarantee Beneficiaries taking, failing or omitting to take, or
refraining from taking, any action to enforce the Credit Agreement,
any other Loan Document or any Lender Hedge Agreement (as applicable)
or any rights or remedies thereunder, or proving the claim or part of
the claim of the Guarantee
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Beneficiaries in any liquidation, bankruptcy, winding-up, compromise,
arrangement or other proceeding relating to any Obligor or any other
Person;
(g) the lack of validity, enforceability, provability or collectibility
(in whole or in part) for any reason of, or any informality, defect or
irregularity in or omission from, the Guaranteed Obligations or the
Credit Agreement, any other Loan Document or any Lender Hedge
Agreement (as applicable) or any impossibility, impracticability,
frustration, illegality, fraud, forgery, force majeure, act of
government or change in Applicable Laws, or the loans or advances
constituting the Guaranteed Obligations having been made in excess of
the power of the Guarantee Beneficiaries or any of them or in
contravention of any of their governing statutes or constating
documents;
(h) any common law or statutory bar on enforcement of the whole or any
part of the Guaranteed Obligations or the Credit Agreement, any other
Loan Document or any Lender Hedge Agreement (as applicable);
(i) any marshalling of assets and liabilities;
(j) any notice by a Guarantor purporting in any way to limit its liability
hereunder in respect of any Guaranteed Obligations, whether arising
prior or subsequent to such notice;
(k) any failure or lack of diligence on the part of the Guarantee
Beneficiaries to examine, inspect, investigate, monitor or take any
other steps in connection with the Obligors' obligations under the
Credit Agreement, any other Loan Document or any Lender Hedge
Agreement (as applicable), including in respect of environmental
matters;
(l) any limitation on the amount guaranteed by any other guarantor of the
Guaranteed Obligations; or
(m) any other event, circumstance, occurrence or contingency which might
otherwise constitute a legal or equitable defence available to, or
discharge of, any Obligor or any other guarantor (including any other
Guarantor hereunder) of or in respect of the Guaranteed Obligations
(except for the permanent payment in full of the Guaranteed
Obligations);
in each case regardless of how substantial, fundamental or material such event
or circumstance mentioned above may be, or however prejudicial it may be to the
Guarantors (or any one of them), and without any requirement for notice to the
Guarantors of any of such event or circumstance; but the obligations of the
Guarantors hereunder shall be released and discharged upon permanent payment in
full of all Guaranteed Obligations.
4.2 Security from the Obligors
(a) Without limiting the generality of Section 4.1, the Guarantee
Beneficiaries shall be at liberty (without exonerating in whole or in
part the Guarantors, without in any way affecting the validity or
enforceability of this Guarantee and without prejudicing or affecting
the Guarantee Beneficiaries' rights hereunder) from time
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to time to hold and receive such security for this Guarantee or the
Guaranteed Obligations (or any part thereof) as they may deem proper,
and may give up, vary, exchange, release, surrender, discharge, waive,
postpone, subordinate, compromise, abandon or otherwise deal with or
fail to deal with such security or any part thereof or property
covered thereby or allow the Obligors or others to deal with the
property covered thereby, all as the Guarantee Beneficiaries may
consider expedient or appropriate (with or without consultation).
(b) The Guarantee Beneficiaries may (without exonerating in whole or in
part the Guarantors, without in any way affecting the validity or
enforceability of this Guarantee and without prejudicing or affecting
the Guarantee Beneficiaries' rights hereunder) abstain from perfecting
or registering, or from continuing any such perfection or registration
of, or from taking advantage of, any security or the provisions of any
Applicable Laws relating thereto.
(c) The Guarantee Beneficiaries may (without exonerating in whole or in
part the Guarantors, without in any way affecting the validity or
enforceability of this Guarantee and without prejudicing or affecting
the Guarantee Beneficiaries' rights hereunder), when, and in such
manner, as the Guarantee Beneficiaries deem expedient, enforce,
realize or refrain from realizing upon any security, apply any
security now or hereafter held by or for the benefit of any Guarantee
Beneficiaries in respect of this Guarantee or the Guaranteed
Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that the Guarantee Beneficiaries,
or any of them, may have against any such security, as such Guarantee
Beneficiaries in their discretion may determine consistent with the
Credit Agreement, any Loan Document, any Lender Hedge Agreement or any
applicable security agreement, including foreclosure on any such
security pursuant to one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially
reasonable. To the extent permitted by law, each of the Guarantors
waives any right it may have to receive notice of any actions or
proceedings taken in respect thereof.
(d) None of (i) any loss of or in respect of any security or the property
covered thereby, whether occasioned by the fault, omission,
carelessness, negligence or recklessness of the Guarantee
Beneficiaries or otherwise (including improvident or improper
handling, collection or realization thereof or thereunder), (ii) the
failure by the Guarantee Beneficiaries, in whole or in part, to put or
keep themselves in a position to deliver the security or any of it to
any Guarantor on payment of the Guaranteed Obligations, or (iii) any
release, modification or waiver of, or failure, omission, delay,
neglect, refusal or lack of diligence to enforce, any right, benefit,
privilege or interest under any contract or agreement under which the
rights of any Obligor have been collaterally or absolutely assigned or
in which a security interest has been granted, shall in any way limit,
lessen or release or otherwise xxxxx the liability of the Guarantors
hereunder.
4.3 Dealing with the Obligors
It is the intent of the Guarantors and the Guarantee Beneficiaries that the
Guarantee Beneficiaries may discontinue, reduce, increase or otherwise vary the
credit of the Obligors and
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otherwise deal, in the broadest sense of that word, with the Obligors and
others, including any other guarantor, as the Guarantee Beneficiaries may see
fit, all without prejudice to or in any way limiting or lessening the
Guarantors' liability hereunder and without necessity for obtaining the consent
of or giving notice to any Guarantor.
4.4 Notices not Required
Except to the extent required to enforce the rights of the Guarantee
Beneficiaries under Section 3.6 hereof, no Guarantee Beneficiary nor any other
Person shall have any duty or obligation to notify, or timely notify, the
Guarantors of (i) any default, event of default or similar event (however
denominated) under the Credit Agreement, any other Loan Document or any Lender
Hedge Agreement (as applicable), any renewal, extension, supplement,
modification, rearrangement, amendment, restatement, replacement, cancellation,
rescission, revocation or reinstatement (whether or not material), (ii) any
release or exchange of any security, (iii) any action taken or not taken by any
Guarantee Beneficiary or any other Person against the Obligors or any other
Person, (iv) any new agreement between any Guarantee Beneficiary, any Obligor or
any other Person, or (v) any other event or circumstance whatsoever.
ARTICLE 5
REPRESENTATIONS AND COVENANTS
5.1 Representations
(a) Each of the Guarantors represents and warrants that: (i) it has
determined that its liability and obligation under this Guarantee may
reasonably be expected to substantially benefit such Guarantor
directly, and such Guarantor's Board of Directors has made that
determination, (ii) the Borrower and such Guarantor are mutually
dependent on each other in the conduct of their respective businesses
and are and do business together as an integrated business enterprise,
(iii) the maintenance and improvement of the Borrower's financial
condition is vital to sustaining the business of such Guarantor and
the transactions supported and secured by this Guarantee and the
security therefor produce distinct and identifiable financial and
economic direct benefits to such Guarantor; (iv) such Guarantor has
had full and complete access to the underlying papers relating to the
Guaranteed Obligations and all other papers executed by any other
Person in connection with the Guaranteed Obligations; (v) such
Guarantor is fully informed of all circumstances which bear upon the
risks of executing this Guarantee which a diligent inquiry would
reveal; and (vi) such Guarantor has adequate means to obtain from the
Borrower, on a continuing basis, information concerning the Borrower's
financial condition, and is not depending on any Guarantee Beneficiary
to provide such information, now or in the future.
(b) Each of the Guarantors further represents and warrants to the
Guarantee Beneficiaries that those representations and warranties
applicable to such Guarantor and set forth in Section 7 of the Credit
Agreement and in the Loan Documents to which it is a party will be
true, correct and complete in all material respects as of the Closing
Date (or on such earlier date as specified in the Credit Agreement),
and such Guarantor agrees that such representations and warranties
XI-10
shall survive the execution and delivery of this Guarantee in the
manner described in Section 7.18 of the Credit Agreement.
(c) Each of the Guarantors agrees that no Guarantee Beneficiary shall have
any obligation to advise or notify it or to provide it with any data
or information. Each of the Guarantors acknowledges receipt of a copy
of all Loan Documents (or recent versions thereof) and understands the
obligations of the Borrower thereunder.
5.2 Covenant
Each of the Guarantors covenants with the Guarantee Beneficiaries that it
shall:
(a) comply with and be bound by each covenant in the Credit Agreement and
the other Loan Documents that is applicable to such Guarantor;
(b) take all such action as may be reasonably necessary or appropriate in
order to cause and permit compliance by the Borrower with the terms
and provisions of the Credit Agreement and the other Loan Documents;
and
(c) not take any reasonable action or fail to take any reasonable action
which would result in the Borrower being in breach of any term or
provision of the Credit Agreement or any other Loan Document.
ARTICLE 6
WITHHOLDING TAXES
6.1 Payment Net of Withholding Taxes
The Guarantors shall make all payments required hereunder, whether by way
of principal, interest or otherwise, without regard to any defence, counterclaim
or right of set-off available to the Guarantors and without withholding any
Taxes (for the purposes of this clause, "Taxes" shall not include Taxes on a
Guarantee Beneficiary's overall income, and franchise taxes). If any Guarantor
is required by Applicable Law to deduct any withholding Taxes from or in respect
of any amounts payable under this Guarantee (i) the amounts payable by such
Guarantor hereunder will be increased by the amount necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 6.1), the Guarantee Beneficiaries will receive
an amount equal to the sum they would have received had no such deductions been
made, (ii) such Guarantor will make such deductions, and (iii) such Guarantor
will pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with Applicable Law. Notwithstanding the
foregoing, unless a Person becomes a Guarantee Beneficiary as a result of an
assignment of Loans at a time when an Event of Default has occurred and is
continuing, the Guarantors shall have no obligation to gross-up for Taxes
withheld or paid solely because such Guarantee Beneficiary is a non-resident of
Canada within the meaning of the Income Tax Act, unless the Guarantors otherwise
agree in writing to do so.
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ARTICLE 7
EXPENSES AND INDEMNITY
7.1 Expenses
The Guarantors shall pay to the Guarantee Beneficiaries all reasonable
out-of-pocket costs and expenses incurred by the Guarantee Beneficiaries from
time to time in the documentation, preparation, negotiation, printing,
execution, registration, delivery, enforcement, realization and collection of or
in respect of this Guarantee, including the reasonable fees of legal counsel for
the Guarantee Beneficiaries on a solicitor and his own client basis. All such
amounts shall be payable by the Guarantors on demand, shall bear interest at 2%
over the Prime Rate, calculated from the date incurred by the Guarantee
Beneficiaries to the date paid by the Guarantors, but without duplication of
interest which is payable by the Guarantors where such interest forms part of
the Guaranteed Obligations.
7.2 Indemnity
The Guarantors shall indemnify the Guarantee Beneficiaries and hold them
harmless against all losses, costs, expenses, liabilities, actions, suits,
claims or damages of any and every kind incurred by the Guarantee Beneficiaries,
up to the amount of the Guaranteed Obligations, as a result of:
(a) a default by any Guarantor in the payment of any Guaranteed
Obligations, and
(b) the failure by any Guarantor to comply with any of its covenants or
other obligations hereunder.
Without limiting the generality of the foregoing, this indemnity shall
extend to:
(i) reasonable legal fees on a solicitor and his own client basis,
including the costs of defending and/or counterclaiming or
claiming over against third parties in respect of any action or
matter, and
(ii) any amounts payable arising out of a settlement of any action
entered into between the Guarantee Beneficiaries or any of them
and any other Person with or without the consent of the
Guarantors.
A certificate of the Guarantee Beneficiaries as to the amount of any such
loss or expense shall be prima facie proof of the amount thereof. The amount
required to be paid by the Guarantors hereunder shall be payable by the
Guarantor on demand, shall bear interest at 2% over the Prime Rate calculated
from the date any indemnified outlay is made by the Guarantee Beneficiaries
hereunder to the date paid by the Guarantors, but without duplication of
interest which is payable by the Guarantors where such interest forms part of
the Guaranteed Obligations. The provisions of and undertakings and
indemnification set out in this Section shall survive the payment and
satisfaction of the Guaranteed Obligations.
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ARTICLE 8
SECURITY
8.1 Security
The obligations of the Guarantors hereunder shall be secured in the manner
provided in Section 5 of the Credit Agreement and, in respect of the Guarantors
and the Collateral granted or to be granted by the Guarantors as provided
therein and herein, the provisions of such Section 5 are incorporated herein,
with necessary changes, to the same extent as if repeated herein.
ARTICLE 9
GENERAL
9.1 Notice
Any notice, communication or demand to be made or given hereunder shall be
in writing and may be made or given by personal delivery or by facsimile or
other electronic means of communication addressed as follows:
To a Guarantor:
At the following address (or at any other address indicated in a
Guarantor's Joinder Agreement or other notice in writing):
Acheson Industrial Park #0
00000 - Xxxxxxx 00
Xxxxxx Xxxxx, Xxxxxxx X0X 0X0
Attention: President
Facsimile: (000) 000-0000
To the Guarantee Beneficiaries:
Royal Bank of Canada, as Administrative Agent
X.X. Xxx 00, 000 Xxx Xxxxxx
Royal Bank Plaza
12th Floor, South Tower
Toronto, Ontario M5J 2W7
Attention: Manager Agency
Facsimile: (000) 000-0000
or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a banking day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a banking day or by facsimile or
other electronic means of communication shall be deemed to have been given, on
the first banking day following the transmittal thereof.
XI-13
9.2 Governing Law and Jurisdiction
(a) THIS GUARANTEE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE
PROVINCE OF ALBERTA AND THE LAW OF CANADA APPLICABLE THEREIN.
(b) Each of the Guarantors agrees that the courts of Alberta shall have
jurisdiction to hear and determine any suit, action or proceeding and
to settle any disputes which may arise out of or in connection with
the aforesaid documents and it irrevocably submits to the
non-exclusive jurisdiction of such courts, without prejudice to the
rights of any Guarantee Beneficiary to take proceedings in any other
jurisdictions, whether concurrently or not.
(c) Each of the Guarantors agrees that final judgment in any such suit,
action or proceeding brought in such courts shall be conclusive and
binding upon it and may be enforced against it in the courts of Canada
(or any other courts to the jurisdiction of which it or its property
is subject) by a suit upon such judgment, provided that it does not
waive any right to appeal any such judgment, to seek any stay or
otherwise to seek reconsideration or review of any such judgment.
9.3 Payment on Stay
If:
(a) any Obligor or any Guarantor is prevented from making payment of any
of the Guaranteed Obligations when it would otherwise be required to
do so; or
(b) the Guarantee Beneficiaries are prevented from demanding payment of
the Guaranteed Obligations;
in each case because of a stay or other judicial proceeding or any other legal
impediment, all Guaranteed Obligations or other amounts otherwise subject to
demand, acceleration or payment shall nevertheless be payable by the Guarantors
as provided for hereunder.
9.4 Judgment Currency
If, for the purposes of obtaining or enforcing judgment against any
Guarantor in any court, or for any other related purpose hereunder, it is
necessary to convert an amount due under this Guarantee in the currency in which
it is due (the "Original Currency") into another currency (the "Second
Currency"), the rate of exchange applicable shall be the daily noon day rate
quoted by the Bank of Canada on the relevant date to purchase the Original
Currency with the Second Currency and includes any premium and costs of exchange
payable in connection with such purchase. Each of the Guarantors agrees that its
obligation in respect of any Original Currency due from it shall,
notwithstanding any judgment or payment in the Second Currency, be discharged
only to the extent that on the Business Day following the receipt of any sum so
paid or adjudged to be due hereunder in the Second Currency the payee may
purchase in the market the Original Currency with the amount of the Second
Currency so paid or so adjudicated to be due; and if the amount of the Original
Currency so purchased is less than the amount originally due in the Original
Currency, such Guarantor agrees that the deficiency shall be a
XI-14
separate obligation of it, independent from its obligations under this
Guarantee, and shall constitute in favour of the Guarantee Beneficiaries a cause
of action which shall continue in full force and effect notwithstanding any such
judgment or order to the contrary, and such Guarantor agrees, notwithstanding
any such payment or judgment, to indemnify the Guarantee Beneficiaries against
any such loss or deficiency.
9.5 Prohibited Rate
In no event shall any interest or fee to be paid hereunder exceed the
maximum rate permitted by Applicable Law. In the event any such interest rate or
fee exceeds such maximum rate, such rate shall be adjusted downward to the
highest rate (expressed as a percentage per annum) or fee that the parties could
validly have agreed to by contract on the date hereof under Applicable Law. It
is further agreed that any excess actually received by a Guarantee Beneficiary
shall be credited against the Guaranteed Obligations.
9.6 Assignment
(a) The Guarantee Beneficiaries may assign, or grant participation in,
this Guarantee (in whole or in part) to any Person to whom they are
entitled to assign any Guaranteed Obligations under the Credit
Agreement, any other Loan Document or any Lender Hedge Agreement (as
applicable).
(b) Except as permitted by the Credit Agreement, none of the Guarantors
shall assign its rights or obligations hereunder without the prior
written consent of the Guarantee Beneficiaries.
(c) Subject to paragraphs (a) and (b), this Guarantee shall enure to the
benefit of and be binding upon the Guarantors, the Guarantee
Beneficiaries, and their respective successors and assigns.
9.7 Severability
Any provision of this Guarantee which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.8 Whole Agreement
This Guarantee constitutes the whole and entire agreement between the
parties hereto and cancels and supersedes any prior agreements, undertakings,
declarations, commitments and representations, written or oral, in respect
thereof.
9.9 Amendments, Waivers and Consents
This Guarantee may only be amended by an agreement in writing between the
Guarantors and the Guarantee Beneficiaries, and provisions hereof may be waived
or matters consented to by the Guarantee Beneficiaries only if the Guarantee
Beneficiaries so agree in writing. Any waiver or consent by the Guarantee
Beneficiaries under any provision of this Guarantee may be
XI-15
given subject to any conditions thought fit by the Guarantee Beneficiaries. Any
waiver or consent shall be effective only in the specific instance and for the
purpose for which it is given.
9.10 Further Assurances
(a) Each party shall promptly cure any defect by it in the execution and
delivery of this Guarantee.
(b) Each of the Guarantors, at its expense, shall promptly execute and
deliver to the Guarantee Beneficiaries, upon request by the Guarantee
Beneficiaries in writing, all such other and further documents,
agreements, legal opinions, certificates and instruments in order to
give effect to the covenants and agreements of such Guarantor in this
Guarantee, and shall make any recording, file any notice or obtain any
consent in connection therewith, all as may be reasonably necessary or
appropriate.
9.11 Time of the Essence
Time shall be of the essence of this Guarantee.
9.12 Counterparts
This Guarantee may be executed in any number of counterparts, and by
facsimile, 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. It
shall not be necessary in making proof of this Guarantee to produce or account
for more than one full set counterparts.
9.13 Separate Action
In case of default hereunder, the Guarantee Beneficiaries may maintain an
action or separate successive actions upon this Guarantee against the Guarantors
(or any of them) whether or not any Obligor is joined therein or a separate
action is brought against any Obligor or any other guarantor (including any
other Guarantor hereunder) or any judgment obtained against any of them. The
Guarantee Beneficiaries' rights shall not be exhausted by the exercise of any of
the Guarantee Beneficiaries' rights hereunder or otherwise against any Guarantor
or by any number of successive actions until and unless all Guaranteed
Obligations have been fully paid and performed, and each of the Guarantors'
obligations hereunder has been fully performed.
9.14 Waiver and Acknowledgement
(a) To the extent permitted by Applicable Law, each of the Guarantors
hereby expressly waives:
(i) notice of acceptance of this Guarantee;
(ii) notice of the existence or creation of all or any of the
Guaranteed Obligations;
(iii) any right to require marshalling of assets and liabilities;
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(iv) presentment, notice of dishonour, protest, and all other notices
whatsoever; and
(v) all diligence in collection or protection of or realization upon
the Guaranteed Obligations or any thereof, any obligation
hereunder.
(b) Each of the Guarantors acknowledges the terms of the Credit Agreement
and the other Loan Documents and consents to and approves the same.
(c) Each of the Guarantors hereby acknowledges receipt of a true copy of
this Guarantee.
9.15 Amalgamation of Certain Subsidiaries
Each of NACG Acquisition Inc. and North American Construction Group Inc.
(the "Amalgamating Corporations") acknowledge and agree that (a) forthwith upon
consummation of the Acquisition and following execution of this Guarantee, the
Amalgamating Corporations will amalgamate, with the continuing corporation being
North American Construction Group Inc. ("Amalco"), and (b) immediately upon the
issuance of the Certificate of Amalgamation by Industry Canada, the obligations
of each of the Amalgamating Corporations under this Guarantee shall continue as
obligations of Amalco, Amalco shall be a Guarantor hereunder and a party hereto
for all purposes and this Guarantee shall remain in full force and effect.
IN WITNESS WHEREOF the undersigned have executed this Guarantee.
NACG ACQUISITION INC.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN CONSTRUCTION GROUP INC.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN CONSTRUCTION LTD.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN CAISSON LTD.
By:
-----------------------------------------
Name:
Title:
XI-17
NORTH AMERICAN ENGINEERING INC.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN ENTERPRISES LTD.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN INDUSTRIES INC.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN MAINTENANCE LTD.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN MINING INC.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN PIPELINE INC.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN ROAD INC.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN SERVICES INC.
By:
-----------------------------------------
Name:
Title:
XI-18
XXXXXXXXX PILE DRIVING INC.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN SITE DEVELOPMENT LTD.
By:
-----------------------------------------
Name:
Title:
NORTH AMERICAN SITE SERVICES INC.
By:
-----------------------------------------
Name:
Title:
NACG FINANCE LLC
By:
-----------------------------------------
Name:
Title:
ROYAL BANK OF CANADA, as Administrative Agent
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
XI-19
SCHEDULE A
TO THE SUBSIDIARY GUARANTEE
FORM OF JOINDER AGREEMENT
JOINDER AGREEMENT
This Joinder Agreement, dated as of , 200 , is between
--------------- --- --
[NAME OF NEW SUBSIDIARY GUARANTOR], a [corporation] under the laws of
(the "New Guarantor") in favour of the Guarantee Beneficiaries.
------------
The parties agree as follows:
1. Reference to the Credit Agreement; Definitions. Reference is made to (a) the
Credit Agreement dated as of November 26, 2003 among the Borrower, Royal Bank of
Canada, as administrative agent, the other agents and the persons party thereto
as lenders (as amended, modified, supplemented or restated from time to time,
the "Credit Agreement"), and (b) the Guarantee dated November 26, 2003 made
among NACG Acquisition Inc., North American Construction Group Inc., North
American Construction Ltd., North American Caisson Ltd., North American
Engineering Ltd., North American Enterprises Ltd., North American Industries
Inc., North American Maintenance Inc., North American Mining Inc., North
American Pipeline Inc., North American Road Inc., North American Services Inc.,
Xxxxxxxxx Pile Driving Inc., North American Site Development Ltd., North
American Site Services Inc., NACG Finance LLC and the Guarantee Beneficiaries
(together with each other Subsidiary Guarantor who has become a party thereto)
in favour of the Guarantee Beneficiaries (as amended, modified, supplemented or
restated from time to time, the "Guarantee"). Capitalized words and phrases used
in this Joinder Agreement and in the preamble hereto without express definition
herein shall, unless something in the subject matter or context is inconsistent
therewith, have the same defined meanings as are ascribed to such words and
phrases in the Guarantee.
2. Joinder. Effective as of , the ("Joinder Date") and
------------------ -----
pursuant to Section 8.9 of the Credit Agreement, the New Guarantor joins in and
becomes party (as fully as if the New Guarantor had been an original signatory
thereto) to the Guarantee as a Guarantor thereunder for all purposes thereof.
3. Representations and Warranties. The New Guarantor represents and warrants
that the representations and warranties contained in Article 5 of the Guarantee
are true and correct with respect to the New Guarantor as if fully set forth
herein and originally made as of the date hereof.
4. Conditions. The effectiveness of the joinder in Section 2 above shall be
subject to the satisfaction of the following conditions on or prior to the
Joinder Date.
4.1 Proper Proceedings. This Joinder Agreement shall have been authorized
by all necessary corporate or other proceedings. All necessary
consents, approvals and authorizations of any governmental or
administrative agency or any other person of any of the transactions
contemplated hereby shall have been obtained and shall be in full
force and effect.
XI-20
4.2 General. All legal and corporate proceedings in connection with the
transactions contemplated by this Joinder Agreement shall be
satisfactory in form and substance to the Administrative Agent, acting
reasonably, and the Administrative Agent shall have received copies of
all documents as required pursuant to Section 8.9 of the Credit
Agreement.
5. Further Assurances. The New Guarantor will, upon the request of the
Administrative Agent from time to time, execute, acknowledge and deliver, and
file and record, all such instruments, and take all such action, as the
Administrative Agent may reasonably request to carry out the intent and purpose
of this Joinder Agreement and the Guarantee.
6. Notices. Any notice or other communication to the New Guarantor in connection
with this Joinder Agreement and the Guarantee shall be deemed to be delivered if
in writing and addressed as follows:
[insert name and address]
Attention:
Facsimile:
7. General. This Joinder Agreement and the Guarantee constitute the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior and current understandings and agreements,
whether written or oral. Except to the extent specifically supplemented hereby,
the provisions of the Guarantee shall remain unmodified. The Guarantee, as
supplemented hereby, is confirmed as being in full force and effect. This
Joinder Agreement may be executed in any number of counterparts, which together
shall constitute one instrument, and shall bind and inure to the benefit of the
parties hereto, the Guarantee Beneficiaries and their respective successors and
assigns. This Joinder Agreement shall be governed by and construed in accordance
with the laws in effect in the Province of Alberta.
Each of the parties has executed this Joinder Agreement as of the date
first written above.
[NAME OF NEW GUARANTOR]
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
XX-00
XXXXX XXXX XX XXXXXX, as Administrative Agent
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
XI-22
EXHIBIT XII
TO CREDIT AGREEMENT
FORM OF HOLDINGS GUARANTEE
GUARANTEE
THIS GUARANTEE is made as of November 26, 2003 between NACG PREFERRED
CORP., a corporation under the laws of Canada (the "Guarantor"), and the
Guarantee Beneficiaries.
Recitals
1. The Guarantee Beneficiaries have agreed to enter into the Credit Agreement
with North American Energy Partners Inc. (the "Borrower") on the condition
that the Guarantor provide this Guarantee; and
2. The Guarantor will derive significant benefit from the extension of credit
by the Guarantee Beneficiaries to Borrower;
NOW THEREFORE the parties agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Guarantee, unless something in the subject matter or context is
inconsistent therewith:
"Credit Agreement" means the Credit Agreement dated November 26, 2003 among
the Borrower, Royal Bank of Canada, as administrative agent, and the other
agents and the Persons party thereto as lenders, as amended, modified,
supplemented or restated from time to time.
"Guarantee Beneficiaries" means the Lenders, the Swap Lenders, and Royal
Bank of Canada, for itself and as agent for and on behalf of the Lenders
and the Swap Lenders from time to time.
"Guaranteed Obligations" means, collectively and at any time and from time
to time, all Obligations and the Secured Swap Obligations (present or
future, absolute or contingent, matured or not), whether the same are from
time to time reduced and thereafter increased or entirely extinguished and
thereafter incurred again.
"Securities Pledge Agreement" means the Securities Pledge Agreement dated
as of November 26, 2003 among the Guarantor, as pledgor, Royal Bank of
Canada, as agent, and the Borrower.
XII-1
"Obligors" means (i) the Borrower and (ii) each of the Subsidiary
Guarantors that is party to a Lender Hedge Agreement from time to time, and
"Obligor" means any one of them.
Capitalized words and phrases used in this Guarantee and the recitals and
preamble hereto without express definition herein shall, unless something in the
subject matter or context is inconsistent therewith, have the same defined
meanings as are ascribed to such words and phrases in the Credit Agreement. For
certainty, if the Credit Agreement ceases to be in force for any reason
whatsoever, then for all purposes hereof the aforementioned capitalized words
and phrases shall continue to have the same defined meanings set forth in the
Credit Agreement as if such agreement remained in force in the form immediately
prior to its ceasing to be in force.
1.2 Headings and Guarantee References
(a) The division of this Guarantee into Articles and Sections, and the
insertion of headings is for convenience of reference only and shall
not affect the construction or interpretation of this Guarantee.
(b) The terms "this Guarantee", "hereof", "hereunder" and similar
expressions refer to this Guarantee and not to any particular Article,
Section or other portion hereof, and include any amendments hereto.
Unless otherwise stated, references herein to Articles and Sections
are to Articles and Sections of this Guarantee.
ARTICLE 2
NO COLLATERAL AGREEMENTS
2.1 Acknowledgement
Subject to Section 9.15, the Guarantor confirms that its obligations under
this Guarantee are not subject to any promise or condition affecting or limiting
its liability, and no statement, representation, collateral agreement or promise
on the part of the Guarantee Beneficiaries or any officer, employee or agent
thereof forms any part of this Guarantee or has induced the making thereof or
shall be deemed in any way to affect the Guarantor's liability hereunder, unless
expressly set out herein. It is the parties' intent that all conditions and
limitations relating to this Guarantee be expressly set out herein, failing
which the Guarantor expressly waives reliance thereon as a defence to or
limitation of its obligations hereunder.
ARTICLE 3
GUARANTEE
3.1 Guarantee
Subject to Section 9.15, the Guarantor hereby absolutely, unconditionally
and irrevocably guarantees to the Guarantee Beneficiaries the due and punctual
payment, discharge and full performance of all Guaranteed Obligations. The
Guarantor covenants that the Guaranteed Obligations will be fully and punctually
paid and performed strictly in accordance with the terms of the Credit
Agreement, any other Loan Document or any Lender Hedge Agreement (as
applicable), whether the same become due on maturity, by mandatory prepayment,
by demand, acceleration or otherwise. The Guarantor hereby indemnifies the
Guarantee Beneficiaries on demand against any loss or liability suffered by them
as a result of any Guaranteed Obligation
XII-2
being or becoming unenforceable, invalid or illegal up to the amount of the
Guaranteed Obligations.
3.2 Continuing Guarantee
Subject to Section 9.15, this Guarantee shall be a continuing guarantee,
shall cover and secure any ultimate balance owing to the Guarantee Beneficiaries
hereunder, and shall be operative and binding notwithstanding that at any time
or times the Guaranteed Obligations may equal zero or that any payments from
time to time may be made to the Guarantee Beneficiaries or any settlements of
account effected or any other thing whatsoever done, suffered or permitted, or
any other action short of actual and final payment to the Guarantee
Beneficiaries of all Guaranteed Obligations. In furtherance of the foregoing and
without limiting the generality thereof, the Guarantor agrees that: (a) this
Guarantee is a guarantee of payment when due and not collectibility; (b) the
obligations of the Guarantor hereunder are independent of the obligations of the
Obligors under the Loan Documents and the Lender Hedge Agreements and the
obligations of any other guarantor; and (c) a payment of a portion, but not all,
of the Guaranteed Obligations by one or more guarantors shall in no way limit,
affect, modify or abridge the liability of any other guarantor (including the
Guarantor hereunder) for any portion of the Guaranteed Obligations that has not
been paid.
3.3 Other Guarantors
This Guarantee shall be operative and binding regardless of whether or not
any proposed guarantor or any other Persons have executed or shall execute this
Guarantee or is or are or shall become in any other way responsible to the
Guarantee Beneficiaries for or in respect of the Guaranteed Obligations or any
part thereof, and regardless of whether or not any other Persons now or
hereafter liable to the Guarantee Beneficiaries for the Guaranteed Obligations
or any part thereof (whether under this Guarantee or otherwise) shall cease to
be so liable.
3.4 Borrower's Identity
This Guarantee is to extend to the Persons for the time being and from time
to time carrying on the business now carried on by the Obligors notwithstanding
any change or changes in the name, business, powers, objects, membership,
directors, partners, shareholders, directorate, organization or management of
any Obligor, and notwithstanding any reorganization of any Obligor or the merger
or amalgamation of any Obligor with another or others (including with the
Guarantor, in which case the obligations of the Guarantor hereunder shall be
direct), or the sale or disposal of any of an Obligor's business in whole or in
part to another or others, or the surrender, forfeiture or termination of its
articles or charter, or the receivership, dissolution, insolvency, winding-up,
arrangement, reorganization, bankruptcy or liquidation of or in respect of any
Obligor, and no such event shall lessen, release or discharge the obligations of
the Guarantor under this Guarantee.
3.5 Acknowledgement of Continued Liability
The Guarantor shall from time to time forthwith on the reasonable request
of the Guarantee Beneficiaries deliver to them suitable acknowledgements of its
continued liability hereunder in such form as counsel for the Guarantee
Beneficiaries may advise, and in the event of the failure of the Guarantor to do
so, it hereby irrevocably appoints any Guarantee Beneficiary the attorney and
agent of the Guarantor to make, execute and deliver such written
XII-3
acknowledgements or other instruments as may from time to time become necessary
or advisable to fully maintain and keep in force the liability of the Guarantor
hereunder.
3.6 Guarantor to Pay; Interest; Currency
(a) If any Obligor shall default in payment or performance of the
Guaranteed Obligations or any part thereof strictly in accordance with
the provisions of the Credit Agreement, any other Loan Document or any
Lender Hedge Agreement (as applicable) as and when the same become
due, payable or performable, then the Guarantor shall, so often as any
such default happens, on demand by the Guarantee Beneficiaries,
forthwith pay to the Guarantee Beneficiaries the amount of the
Guaranteed Obligations then due and payable (including any accelerated
obligations), and perform any obligations which the Obligor is then
obligated to perform. The Guarantee Beneficiaries may enforce this
Guarantee in accordance herewith notwithstanding the existence of any
dispute between any Obligor and any Guarantee Beneficiary with respect
to the existence of such payment or performance default.
(b) If the Guarantee Beneficiaries make demand upon the Guarantor as
provided in this Section, the Guarantor shall thereupon be liable to
the Guarantee Beneficiaries for the amount demanded directly, as
principal, and not just as surety, and will not plead or assert to the
contrary in any proceeding taken by the Guarantee Beneficiaries in
enforcing this Guarantee.
(c) The Guarantor shall pay interest on those of the Guaranteed
Obligations that are payment obligations for which demand shall have
been made, computed from and after the date of demand until payment in
full, at the rate or rates provided in the Credit Agreement, any other
Loan Document or any Lender Hedge Agreement (as applicable) in respect
of the obligation so demanded, calculated and compounded in the same
manner, but without duplication of interest which is payable by the
Guarantor where such interest forms part of the Guaranteed
Obligations.
(d) All Guaranteed Obligations that are payment obligations shall be paid
by the Guarantor in whichever currency or currencies in which they are
denominated.
3.7 Statement of Obligations
Subject to Section 9.15, the statement in writing of the Guarantee
Beneficiaries from time to time of the indebtedness, obligations or liability of
the Obligors to them shall be prima facie evidence of the amount of the
indebtedness, obligations or liability forming the Guaranteed Obligations. The
Guarantor's right to question in any way the Guarantee Beneficiaries' present or
future method of dealing with the Obligors, or with any Persons (other than the
Guarantor) now or hereafter liable to the Guarantee Beneficiaries for the
Guaranteed Obligations or any part thereof, is hereby waived. The Guarantor
renounces all benefits of discussion and division.
3.8 Not Bound to Exhaust Recourse
The Guarantee Beneficiaries shall not be bound to exhaust their recourse
against any Obligor or to pursue any rights or remedies they may have against
any Obligor or any other Persons, or to make any demand on or present any note
to any Obligor or any other Person, or
XII-4
file any proof of claim in any insolvency, administration, arrangement,
winding-up, liquidation or bankruptcy before demanding or being entitled to
payment from the Guarantor hereunder.
3.9 Authority
The Guarantee Beneficiaries shall not be concerned to see or enquire into
the powers of the Obligors or any of the directors, officers or agents of the
Obligors acting or purporting to act on their behalf, and all moneys, advances,
renewals and credits in fact borrowed or obtained in the professed exercise of
such powers shall be deemed to form part of the Guaranteed Obligations even if
irregularly, fraudulently, defectively or informally effected or in excess of
the powers of the Obligors or any of the directors, officers or agents thereof,
and notwithstanding any incapacity or disability of any thereof, and further
notwithstanding any actual or constructive notice of the powers (or the lack
thereof) of the Obligors or any of the directors, officers or agents thereof.
3.10 Reinstatement
Where any discharge (whether in respect of the obligations of the Obligors,
any security for such obligations or otherwise) is made in whole or in part or
any arrangement is made on the faith of any payment, security or other
disposition which is finally determined to be avoided or must in accordance with
Applicable Law or any order or judgment be repaid on insolvency, bankruptcy,
administration, arrangement, liquidation or otherwise, the liability of the
Guarantor under this Guarantee shall continue as if there had been no such
discharge or arrangement. The Guarantee Beneficiaries shall be entitled to
concede or compromise any claim that any such payment, security or other
disposition is liable to avoidance or repayment.
3.11 Subrogation; No Competition with Guarantee Beneficiaries
The Guarantor shall not exercise any rights which it may have acquired by
way of subrogation, indemnity or contribution under this Guarantee (by virtue of
any payment being made by it hereunder, any liability to make payment hereunder,
or otherwise), or exercise any right of contribution against any other
guarantor, unless and until all Guaranteed Obligations have been finally paid
and performed in full. If any amount shall be paid (including through any
exercise of set-off rights) to the Guarantor arising out of or based upon such
right of subrogation, indemnity, or contribution at a time when the Guaranteed
Obligations have not been paid and performed in full, such amount (in the case
of a set-off, an amount equal to such set-off in fact exercised by it) shall be
deemed to have been paid to the Guarantor for the benefit of, and held by the
Guarantor in trust for, the Guarantee Beneficiaries and shall forthwith be paid
to the Guarantee Beneficiaries to be credited and applied to the Guaranteed
Obligations, whether matured or unmatured.
3.12 Appropriation
During the existence of an Event of Default (or prior to an Event of
Default if no appropriation is made by the Guarantor at the time of payment),
the Guarantee Beneficiaries shall be at liberty (without in any way prejudicing
or affecting their rights hereunder) to appropriate any payment made or monies
received to any portion of the Guaranteed Obligations whether then due or to
become due, and from time to time to revoke or alter any such appropriation, all
as the Guarantee Beneficiaries see fit.
XII-5
3.13 Preservation of Rights
Until all Guaranteed Obligations have been irrevocably and permanently paid
and discharged in full (whether by the Obligors, the Guarantor or otherwise),
after a claim has been made pursuant to this Guarantee which has not been paid
in full, the Guarantee Beneficiaries may:
(a) refrain from applying or enforcing any other security, monies or
rights held or received by the Guarantee Beneficiaries, as the case
may be, in respect of (or capable of being applied in respect of) such
amounts or apply and enforce the same in such manner and order as the
Guarantee Beneficiaries see fit (whether against such amounts or
otherwise) and the Guarantor shall not be entitled to the benefit of
the same; and
(b) hold in a suspense account (with the obligation to pay interest on the
monies held therein at a reasonable rate available to it for deposits
made by it in the same currency on like terms and in like amounts) any
monies received from the Guarantor or on account of the Guarantor's
liability under this Guarantee.
3.14 Set-Off
In addition to any other rights any Guarantee Beneficiary may have under
law or in equity, if any amount shall at any time be due and owing by the
Guarantor to any Guarantee Beneficiary under this Guarantee, such Guarantee
Beneficiary is authorized at any time or from time to time, without notice (any
such notice being expressly waived), to set off and to appropriate and to apply
any and all deposits (general or special, including but not limited to
indebtedness evidence by certificates of deposit, whether matured or unmatured)
and any other indebtedness of such Guarantee Beneficiary owing to the Guarantor
and any other property of the Guarantor held by a Guarantee Beneficiary to or
for the credit or the account of the Guarantor against and on account of the
Guaranteed Obligations of the Guarantor to any Guarantee Beneficiary under this
Guarantee.
ARTICLE 4
OBLIGATIONS NOT RELEASED
4.1 Obligations Absolute
Subject to Section 9.15, the obligations of the Guarantor hereunder shall
be absolute and unconditional, and shall not be released, diminished, discharged
or in any way lessened, abated, impaired or reduced by:
(a) the Guarantee Beneficiaries agreeing to any renewal, extension,
increased commitment, change, variation, alteration, restatement,
waiver, modification, the partial release or partial discharge in or
in respect of the Guaranteed Obligations or the Credit Agreement, any
other Loan Document or any Lender Hedge Agreement (as applicable), or
anything done, suffered or permitted by the Guarantee Beneficiaries in
relation to the Guaranteed Obligations or the Credit Agreement, any
other Loan Document or any Lender Hedge Agreement (as applicable),
including any amendment or change in the manner, time, place or
XII-6
calculation of payment of the Guaranteed Obligations (including
increases or decreases in principal, interest rates, fees or other
obligations);
(b) time or any indulgence being given to any Obligor or any other Person
by the Guarantee Beneficiaries;
(c) the merging of the Credit Agreement, any other Loan Document or any
Lender Hedge Agreement (as applicable) or the Guaranteed Obligations
or other obligations of the Obligors in, or any alteration thereof by
virtue of, any subsequent agreement or amending agreement;
(d) the Guarantee Beneficiaries agreeing to (i) any compromise, partial
discharge, settlement, proposal, subordination, offer of performance
or substitution for or affecting any Guaranteed Obligation or any
agreement relating thereto, or (ii) any arrangement or plan of
reorganization affecting any Obligor or any other guarantor;
(e) the Guarantee Beneficiaries agreeing to (i) the release, exchange,
compromise, subordination, substitution or modification of any other
guarantee or any other guarantor or any other Person liable directly
or as surety or otherwise for the Guaranteed Obligations or any part
thereof, or (ii) the addition of any guarantor, endorser or surety;
(f) the Guarantee Beneficiaries taking, failing or omitting to take, or
refraining from taking, any action to enforce the Credit Agreement,
any other Loan Document or any Lender Hedge Agreement (as applicable)
or any rights or remedies thereunder, or proving the claim or part of
the claim of the Guarantee Beneficiaries in any liquidation,
bankruptcy, winding-up, compromise, arrangement or other proceeding
relating to any Obligor or any other Person;
(g) the lack of validity, enforceability, provability or collectibility
(in whole or in part) for any reason of, or any informality, defect or
irregularity in or omission from, the Guaranteed Obligations or the
Credit Agreement, any other Loan Document or any Lender Hedge
Agreement (as applicable) or any impossibility, impracticability,
frustration, illegality, fraud, forgery, force majeure, act of
government or change in Applicable Laws, or the loans or advances
constituting the Guaranteed Obligations having been made in excess of
the power of the Guarantee Beneficiaries or any of them or in
contravention of any of their governing statutes or constating
documents;
(h) any common law or statutory bar on enforcement of the whole or any
part of the Guaranteed Obligations or the Credit Agreement, any other
Loan Document or any Lender Hedge Agreement (as applicable);
(i) any marshalling of assets and liabilities;
(j) any notice by the Guarantor purporting in any way to limit its
liability hereunder in respect of any Guaranteed Obligations, whether
arising prior or subsequent to such notice;
XII-7
(k) any failure or lack of diligence on the part of the Guarantee
Beneficiaries to examine, inspect, investigate, monitor or take any
other steps in connection with the Obligors' obligations under the
Credit Agreement, any other Loan Document or any Lender Hedge
Agreement (as applicable), including in respect of environmental
matters;
(l) any limitation on the amount guaranteed by any other guarantor of the
Guaranteed Obligations; or
(m) any other event, circumstance, occurrence or contingency which might
otherwise constitute a legal or equitable defence available to, or
discharge of, the Guarantor, any Obligor or any other guarantor of or
in respect of the Guaranteed Obligations (except for the permanent
payment in full of the Guaranteed Obligations);
in each case regardless of how substantial, fundamental or material such event
or circumstance mentioned above may be, or however prejudicial it may be to the
Guarantor, and without any requirement for notice to the Guarantor of any of
such event or circumstance; but the obligations of the Guarantor hereunder shall
be released and discharged upon permanent payment in full of all Guaranteed
Obligations.
4.2 Security from the Obligors
(a) Without limiting the generality of Section 4.1, the Guarantee
Beneficiaries shall be at liberty (without exonerating in whole or in
part the Guarantor, without in any way affecting the validity or
enforceability of this Guarantee and without prejudicing or affecting
the Guarantee Beneficiaries' rights hereunder) from time to time to
hold and receive such security for this Guarantee or the Guaranteed
Obligations (or any part thereof) as they may deem proper, and may
give up, vary, exchange, release, surrender, discharge, waive,
postpone, subordinate, compromise, abandon or otherwise deal with or
fail to deal with such security or any part thereof or property
covered thereby or allow the Obligors or others to deal with the
property covered thereby, all as the Guarantee Beneficiaries may
consider expedient or appropriate (with or without consultation).
(b) The Guarantee Beneficiaries may (without exonerating in whole or in
part the Guarantor, without in any way affecting the validity or
enforceability of this Guarantee and without prejudicing or affecting
the Guarantee Beneficiaries' rights hereunder) abstain from perfecting
or registering, or from continuing any such perfection or registration
of, or from taking advantage of, any security or the provisions of any
Applicable Laws relating thereto.
(c) The Guarantee Beneficiaries (without exonerating in whole or in part
the Guarantor, without in any way affecting the validity or
enforceability of this Guarantee and without prejudicing or affecting
the Guarantee Beneficiaries' rights hereunder), when, and in such
manner, as the Guarantee Beneficiaries deem expedient, enforce,
realize or refrain from realizing upon any security, apply any
security now or hereafter held by or for the benefit of any Guarantee
Beneficiaries in respect of this Guarantee or the Guaranteed
Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that the Guarantee Beneficiaries in
their discretion may determine consistent with the Credit
XII-8
Agreement, any Loan Document, any Lender Hedge Agreement or any
applicable security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially
responsible. To the extent permitted by law, the Guarantor waives any
right it may have to receive notice of any actions or proceedings
taken in respect thereof.
(d) None of (i) any loss of or in respect of any security or the property
covered thereby, whether occasioned by the fault, omission,
carelessness, negligence or recklessness of the Guarantee
Beneficiaries or otherwise (including improvident or improper
handling, collection or realization thereof or thereunder), (ii) the
failure by the Guarantee Beneficiaries, in whole or in part, to put or
keep themselves in a position to deliver the security or any of it to
the Guarantor on payment of the Guaranteed Obligations, or (iii) any
release, modification or waiver of, or failure, omission, delay,
neglect, refusal or lack of diligence to enforce, any right, benefit,
privilege or interest under any contract or agreement under which the
rights of any Obligor have been collaterally or absolutely assigned or
in which a security interest has been granted, shall in any way limit,
lessen or release or otherwise xxxxx the liability of the Guarantor
hereunder.
4.3 Dealing with the Obligors
It is the intent of the Guarantor and the Guarantee Beneficiaries that the
Guarantee Beneficiaries may discontinue, reduce, increase or otherwise vary the
credit of the Obligors and otherwise deal, in the broadest sense of that word,
with the Obligors and others, including any other guarantor, as the Guarantee
Beneficiaries may see fit, all without prejudice to or in any way limiting or
lessening the Guarantor's liability hereunder and without necessity for
obtaining the consent of or giving notice to the Guarantor.
4.4 Notices not Required
Except to the extent required to enforce the rights of the Guarantee
Beneficiaries under Section 3.6 hereof, no Guarantee Beneficiary nor any other
Person shall have any duty or obligation to notify, or timely notify, the
Guarantor of (i) any default, event of default or similar event (however
denominated) under the Credit Agreement, any other Loan Document or any Lender
Hedge Agreement (as applicable), any renewal, extension, supplement,
modification, rearrangement, amendment, restatement, replacement, cancellation,
rescission, revocation or reinstatement (whether or not material), (ii) any
release or exchange of any security, (iii) any action taken or not taken by any
Guarantee Beneficiary or any other Person against the Obligors or any other
Person, (iv) any new agreement between any Guarantee Beneficiary, the Obligors
or any other Person, or (v) any other event or circumstance whatsoever.
ARTICLE 5
REPRESENTATIONS AND COVENANTS
5.1 Representations
(a) The Guarantor represents and warrants that: (i) it has determined that
its liability and obligation under this Guarantee may reasonably be
expected to substantially benefit the Guarantor directly, and the
Guarantor's Board of Directors has made that determination, (ii) the
Borrower and the Guarantor are mutually dependent on
XII-9
each other in the conduct of their respective businesses and are and
do business together as an integrated business enterprise, (iii) the
maintenance and improvement of the Borrower's financial condition is
vital to sustaining the business of the Guarantor and the transactions
supported and secured by this Guarantee and the security therefor
produce distinct and identifiable financial and economic direct
benefits to the Guarantor, (iv) the Guarantor has had full and
complete access to the underlying papers relating to the Guaranteed
Obligations and all other papers executed by any other Person in
connection with the Guaranteed Obligations, (v) the Guarantor is fully
informed of all circumstances which bear upon the risks of executing
this Guarantee which a diligent inquiry would reveal, and (vi) the
Guarantor has adequate means to obtain from the Borrower, on a
continuing basis, information concerning the Borrower's financial
condition, and is not depending on any Guarantee Beneficiary to
provide such information, now or in the future.
(b) The Guarantor further represents and warrants to the Guarantee
Beneficiaries that those representations and warranties applicable to
the Guarantor and set forth in Section 7 of the Credit Agreement and
in the Loan Documents to which it is a party will be true, correct and
complete in all material respects as of the Closing Date (or on such
earlier date as specified in the Credit Agreement), and the Guarantor
agrees that such representations and warranties shall survive the
execution and delivery of this Guarantee in the manner described in
Section 7.18 of the Credit Agreement.
(c) The Guarantor agrees that no Guarantee Beneficiary shall have any
obligation to advise or notify the Guarantor or to provide the
Guarantor with any data or information. The Guarantor acknowledges
receipt of a copy of all Loan Documents (or recent versions thereof)
and understands the obligations of the Borrower thereunder.
5.2 Covenant
The Guarantor covenants with the Guarantee Beneficiaries that it shall:
(a) comply with and be bound by each covenant in the Credit Agreement and
the other Loan Documents that is applicable to the Guarantor;
(b) take all such action as may be reasonably necessary or appropriate in
order to cause and permit compliance by the Borrower with the terms
and provisions of the Credit Agreement and the other Loan Documents;
and
(c) not take any reasonable action or fail to take any reasonable action
which would result in the Borrower being in breach of any term or
provision of the Credit Agreement or any other Loan Document.
XII-10
ARTICLE 6
WITHHOLDING TAXES
6.1 Payment Net of Withholding Taxes
The Guarantor shall make all payments required hereunder, whether by way of
principal, interest or otherwise, without regard to any defence, counterclaim or
right of set-off available to the Guarantor and without withholding any Taxes
(for the purposes of this clause, "Taxes" shall not include Taxes on a Guarantee
Beneficiary's overall income, and franchise taxes). If the Guarantor is required
by Applicable Law to deduct any withholding Taxes from or in respect of any
amounts payable under this Guarantee (i) the amounts payable by the Guarantor
hereunder will be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 6.1), the Guarantee Beneficiaries will receive an amount
equal to the sum they would have received had no such deductions been made, (ii)
the Guarantor will make such deductions, and (iii) the Guarantor will pay the
full amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with Applicable Law. Notwithstanding the foregoing,
unless a Person becomes a Guarantee Beneficiary as a result of an assignment of
Loans at a time when an Event of Default has occurred and is continuing, the
Guarantor shall have no obligation to gross-up for Taxes withheld or paid solely
because such Guarantee Beneficiary is a non-resident of Canada within the
meaning of the Income Tax Act, unless the Guarantor otherwise agrees in writing
to do so.
ARTICLE 7
EXPENSES AND INDEMNITY
7.1 Expenses
Subject to Section 9.15, the Guarantor shall pay to the Guarantee
Beneficiaries all reasonable out-of-pocket costs and expenses incurred by the
Guarantee Beneficiaries from time to time in the documentation, preparation,
negotiation, printing, execution, registration, delivery, enforcement,
realization and collection of or in respect of this Guarantee, including the
reasonable fees of legal counsel for the Guarantee Beneficiaries on a solicitor
and his own client basis. All such amounts shall be payable by the Guarantor on
demand, shall bear interest at 2% over the Prime Rate, calculated from the date
incurred by the Guarantee Beneficiaries to the date paid by the Guarantor, but
without duplication of interest which is payable by the Guarantor where such
interest forms part of the Guaranteed Obligations.
7.2 Indemnity
Subject to Section 9.15, the Guarantor shall indemnify the Guarantee
Beneficiaries and hold them harmless against all losses, costs, expenses,
liabilities, actions, suits, claims or damages of any and every kind incurred by
the Guarantee Beneficiaries, up to the amount of the Guaranteed Obligations, as
a result of:
(a) a default by the Guarantor in the payment of any Guaranteed
Obligations, and
(b) the failure by the Guarantor to comply with any of its covenants or
other obligations hereunder.
Without limiting the generality of the foregoing, this indemnity shall
extend to:
XII-11
(i) reasonable legal fees on a solicitor and his own client basis,
including the costs of defending and/or counterclaiming or
claiming over against third parties in respect of any action or
matter, and
(ii) any amounts payable arising out of a settlement of any action
entered into between the Guarantee Beneficiaries or any of them
and any other Person with or without the consent of the
Guarantor.
A certificate of the Guarantee Beneficiaries as to the amount of any such
loss or expense shall be prima facie proof of the amount thereof. The amount
required to be paid by the Guarantor hereunder shall be payable by the Guarantor
on demand, shall bear interest at 2% over the Prime Rate calculated from the
date any indemnified outlay is made by the Guarantee Beneficiaries hereunder to
the date paid by the Guarantor, but without duplication of interest which is
payable by the Guarantor where such interest forms part of the Guaranteed
Obligations. The provisions of and undertakings and indemnification set out in
this Section shall survive the payment and satisfaction of the Guaranteed
Obligations.
ARTICLE 8
SECURITY
8.1 Security
The obligations of the Guarantor hereunder shall be secured in the manner
provided in Section 5 of the Credit Agreement and, in respect of the Guarantor
and the Collateral granted or to be granted by the Guarantor as provided therein
and herein, the provisions of such Section 5 are incorporated herein, with
necessary changes, to the same extent as if repeated herein.
ARTICLE 9
GENERAL
9.1 Notice
Any notice, communication or demand to be made or given hereunder shall be
in writing and may be made or given by personal delivery or by facsimile or
other electronic means of communication addressed as follows:
To the Guarantor:
NACG Preferred Corp.
Xxxxxxx Industrial Park #0
00000 - Xxxxxxx 00
Xxxxxx Xxxxx, Xxxxxxx X0X 0X0
Attention: President
Facsimile: (000) 000-0000
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To the Guarantee Beneficiaries:
Royal Bank of Canada, as Administrative Agent
X.X. Xxx 00, 000 Xxx Xxxxxx
Royal Bank Plaza
12th Floor, South Tower
Toronto, Ontario M5J 2W7
Attention: Manager Agency
Facsimile: (000) 000-0000
or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a banking day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a banking day or by facsimile or
other electronic means of communication shall be deemed to have been given, on
the first banking day following the transmittal thereof.
9.2 Governing Law and Jurisdiction
(a) THIS GUARANTEE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE
PROVINCE OF ALBERTA AND THE LAW OF CANADA APPLICABLE THEREIN.
(b) The Guarantor agrees that the courts of Alberta shall have
jurisdiction to hear and determine any suit, action or proceeding and
to settle any disputes which may arise out of or in connection with
the aforesaid documents and it irrevocably submits to the
non-exclusive jurisdiction of such courts, without prejudice to the
rights of any Guarantee Beneficiary to take proceedings in any other
jurisdictions, whether concurrently or not.
(c) The Guarantor agrees that final judgment in any such suit, action or
proceeding brought in such courts shall be conclusive and binding upon
it and may be enforced against it in the courts of Canada (or any
other courts to the jurisdiction of which it or its property is
subject) by a suit upon such judgment, provided that it does not waive
any right to appeal any such judgment, to seek any stay or otherwise
to seek reconsideration or review of any such judgment.
9.3 Payment on Stay
If:
(a) Any Obligor or the Guarantor is prevented from making payment of any
of the Guaranteed Obligations when it would otherwise be required to
do so; or
(b) the Guarantee Beneficiaries are prevented from demanding payment of
the Guaranteed Obligations;
XII-13
in each case because of a stay or other judicial proceeding or any other legal
impediment, all Guaranteed Obligations or other amounts otherwise subject to
demand, acceleration or payment shall nevertheless be payable by the Guarantor
as provided for hereunder.
9.4 Judgment Currency
If, for the purposes of obtaining or enforcing judgment against the
Guarantor in any court, or for any other related purpose hereunder, it is
necessary to convert an amount due under this Guarantee in the currency in which
it is due (the "Original Currency") into another currency (the "Second
Currency"), the rate of exchange applicable shall be the daily noon day rate
quoted by the Bank of Canada on the relevant date to purchase the Original
Currency with the Second Currency and includes any premium and costs of exchange
payable in connection with such purchase. The Guarantor agrees that its
obligation in respect of any Original Currency due from it shall,
notwithstanding any judgment or payment in the Second Currency, be discharged
only to the extent that on the Business Day following the receipt of any sum so
paid or adjudged to be due hereunder in the Second Currency the payee may
purchase in the market the Original Currency with the amount of the Second
Currency so paid or so adjudicated to be due; and if the amount of the Original
Currency so purchased is less than the amount originally due in the Original
Currency, the Guarantor agrees that the deficiency shall be a separate
obligation of it, independent from its obligations under this Guarantee, and
shall constitute in favour of the Guarantee Beneficiaries a cause of action
which shall continue in full force and effect notwithstanding any such judgment
or order to the contrary, and the Guarantor agrees, notwithstanding any such
payment or judgment, to indemnify the Guarantee Beneficiaries against any such
loss or deficiency.
9.5 Prohibited Rate
In no event shall any interest or fee to be paid hereunder exceed the
maximum rate permitted by Applicable Law. In the event any such interest rate or
fee exceeds such maximum rate, such rate shall be adjusted downward to the
highest rate (expressed as a percentage per annum) or fee that the parties could
validly have agreed to by contract on the date hereof under Applicable Law. It
is further agreed that any excess actually received by a Guarantee Beneficiary
shall be credited against the Guaranteed Obligations.
9.6 Assignment
(a) The Guarantee Beneficiaries may assign, or grant participation in,
this Guarantee (in whole or in part) to any Person to whom they are
entitled to assign any Guaranteed Obligations under the Credit
Agreement, any other Loan Document or any Lender Hedge Agreement (as
applicable).
(b) Except as permitted by the Credit Agreement, the Guarantor shall not
assign its rights or obligations hereunder without the prior written
consent of the Guarantee Beneficiaries.
(c) Subject to paragraphs (a) and (b), this Guarantee shall enure to the
benefit of and be binding upon the Guarantor, the Guarantee
Beneficiaries, and their respective successors and assigns.
XII-14
9.7 Severability
Any provision of this Guarantee which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.8 Whole Agreement
This Guarantee constitutes the whole and entire agreement between the
parties hereto and cancels and supersedes any prior agreements, undertakings,
declarations, commitments and representations, written or oral, in respect
thereof.
9.9 Amendments, Waivers and Consents
This Guarantee may only be amended by an agreement in writing between the
Guarantor and the Guarantee Beneficiaries, and provisions hereof may be waived
or matters consented to by the Guarantee Beneficiaries only if the Guarantee
Beneficiaries so agree in writing. Any waiver or consent by the Guarantee
Beneficiaries under any provision of this Guarantee may be given subject to any
conditions thought fit by the Guarantee Beneficiaries. Any waiver or consent
shall be effective only in the specific instance and for the purpose for which
it is given.
9.10 Further Assurances
(a) Each party shall promptly cure any defect by it in the execution and
delivery of this Guarantee.
(b) The Guarantor, at its expense, shall promptly execute and deliver to
the Guarantee Beneficiaries, upon request by the Guarantee
Beneficiaries in writing, all such other and further documents,
agreements, legal opinions, certificates and instruments in order to
give effect to the covenants and agreements of the Guarantor in this
Guarantee, and shall make any recording, file any notice or obtain any
consent in connection therewith, all as may be reasonably necessary or
appropriate.
9.11 Time of the Essence
Time shall be of the essence of this Guarantee.
9.12 Counterparts
This Guarantee may be executed in any number of counterparts, and by
facsimile, 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. It
shall not be necessary in making proof of this Guarantee to produce or account
for more than one full set counterparts.
9.13 Separate Action
In case of default hereunder, the Guarantee Beneficiaries may maintain an
action or separate successive actions upon this Guarantee against the Guarantor
whether or not any
XII-15
Obligor is joined therein or a separate action is brought against any Obligor or
any other guarantor or any judgment obtained against any of them. The Guarantee
Beneficiaries' rights shall not be exhausted by the exercise of any of the
Guarantee Beneficiaries' rights hereunder or otherwise against the Guarantor or
by any number of successive actions until and unless all Guaranteed Obligations
have been fully paid and performed, and each of the Guarantor's obligations
hereunder has been fully performed.
9.14 Waiver and Acknowledgement
(a) To the extent permitted by Applicable Law, the Guarantor hereby
expressly waives:
(i) notice of acceptance of this Guarantee;
(ii) notice of the existence or creation of all or any of the
Guaranteed Obligations;
(iii) any right to require marshalling of assets and liabilities;
(iv) presentment, notice of dishonour, protest, and all other notices
whatsoever; and
(v) all diligence in collection or protection of or realization upon
the Guaranteed Obligations or any thereof, any obligation
hereunder.
(b) The Guarantor acknowledges the terms of the Credit Agreement and the
other Loan Documents and consents to and approves the same.
(c) The Guarantor hereby acknowledges receipt of a true copy of this
Guarantee.
9.15 Limited Recourse Guarantee
Notwithstanding anything to the contrary contained in this Guarantee or the
Securities Pledge Agreement, the recourse of the Guarantee Beneficiaries
pursuant to this Guarantee shall be limited to their rights to realize upon the
Collateral (as defined in the Securities Pledge Agreement) pursuant to the
Securities Pledge Agreement and to exercise their other rights and remedies as
provided in the Securities Pledge Agreement, and the Guarantee Beneficiaries
shall have no further recourse to the Guarantor or its assets for any deficiency
remaining after such realization has been effected. For certainty, nothing in
this Section shall in any way limit or affect the recourse of the Guarantor
Beneficiaries against any Person other than the Guarantor.
XII-16
IN WITNESS WHEREOF the undersigned have executed this Guarantee.
NACG PREFERRED CORP.
By:
----------------------------------------
Name:
Title:
ROYAL BANK OF CANADA,
as Administrative Agent
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
XII-17
EXHIBIT XIII
TO CREDIT AGREEMENT
FORM OF DEMAND DEBENTURE AND NEGATIVE PLEDGE
DEMAND DEBENTURE AND NEGATIVE PLEDGE
THIS DEBENTURE is issued as of _, 200___ by _, a
[corporation/partnership/______________] under the laws of _ (the "Debtor").
ARTICLE 1
PROMISE TO PAY: PRINCIPAL AND INTEREST
1.1 Principal
The Debtor, for value received, hereby acknowledges itself indebted and
promises to pay to or to the order of Royal Bank of Canada (who and whose
successors and assigns as holders of this Debenture are herein called the
"Holder"), for itself and as agent for and on behalf of the Lenders and the Swap
Lenders from time to time (collectively, the "Beneficiaries"), on demand (or on
such earlier date as the Obligations hereby secured may become payable in
accordance with Section 9.3) the principal amount of Three Hundred Million
Canadian Dollars (Cdn. $300,000,000) at the office of the Holder, 000 Xxx
Xxxxxx, Xxxxx Bank Plaza, 12th Floor, South Tower, Toronto, Ontario, M5J 2W7, or
at such other place as the Holder may designate from time to time by notice in
writing to the Debtor.
1.2 Interest
The Debtor shall pay to the Holder at the same place interest on the
Principal Amount at the rate of twenty-five percent (25%) per annum. Such
interest shall accrue on a daily basis and shall be calculated and payable
monthly in arrears on the first Business Day of each month in respect of the
immediately preceding calendar month, based on the actual number of days
elapsed. If payment of the Principal Amount is demanded or otherwise becomes
payable in accordance with Section 9.3, all accrued and unpaid interest shall
also be payable on the date for payment of the Principal Amount.
ARTICLE 2
DEFINITIONS AND INTERPRETATION
2.1 Definitions
In this Debenture, unless there is something in the subject matter or
context inconsistent therewith:
"Credit Agreement" means the Credit Agreement dated November 26, 2003 among
North American Energy Partners Inc., as borrower, Royal Bank of Canada, as
administrative agent, the other agents, and the Persons party thereto as
lenders, as amended, modified, supplemented or restated from time to time.
XIII-1
"Event of Default" means any event or circumstance enumerated in Section
9.2 of this Agreement.
"lease" includes sublease and any other agreements in the nature of a
lease.
"lien hereof" means the Liens created or expressed to be created or
required to be created by the Debtor pursuant to this Debenture.
"Mortgaged Property" means the property, assets and undertakings of the
Debtor which are subject to the lien hereof; such term shall be deemed to
refer to such property, assets and undertakings or any part thereof.
"Obligations" means all of the indebtedness, liabilities and obligations,
present and future, matured or not, of the Debtor under this Debenture,
including without limitation payment of the Principal Amount, interest
thereon and interest on overdue interest, payment of all other amounts
required to be paid hereunder, and observance and performance of all other
covenants, indemnities, terms, conditions, agreements and other
requirements herein contained, both monetary and non-monetary.
"PPSA" means the Personal Property Security Act (Alberta).
"Principal Amount" means the principal amount payable pursuant to Section
1.1 (or, subject to Section 3.2, so much thereof as remains from time to
time unpaid).
"Receiver" means any receiver or receivers of the Mortgaged Property
appointed by the Holder pursuant to this Debenture or by a court at the
request of the Holder; such term shall be deemed to include reference to a
receiver or receiver-manager.
Other capitalized terms used but not defined herein shall have the meanings
set forth in the Credit Agreement. Derivations of any of the foregoing defined
terms shall have a corresponding meaning.
2.2 Headings and References
(a) The division of this Debenture into Articles and Sections and the
insertion of headings is for convenience of reference only and shall
not affect the construction or interpretation of this Debenture.
(b) The terms "this Debenture", "hereof", "hereunder" and similar
expressions refer to this Debenture and not to any particular Article,
Section or other portion hereof and include any amendments or
supplements hereto. Unless otherwise stated, references herein to
Articles, Sections and Schedules are to Articles, Sections and
Schedules of this Debenture.
2.3 Number and Gender
Words importing the singular number shall include the plural and vice
versa, and words importing gender shall include the masculine, feminine and
neuter genders.
XIII-2
2.4 Per Annum Calculations; Currency; Time; "Including"
(a) Unless otherwise stated, interest specified as a rate "per annum"
shall be computed on the basis of a calendar year of 365 days or 366
days, as the case may be.
(b) The theory of "deemed reinvestment" shall not apply to the computation
of interest hereunder and no allowance, reduction or deduction shall
be made for the deemed reinvestment of interest in respect of any
payments hereunder. Calculation of interest hereunder shall be made
using the nominal rate method, and not the effective rate method, of
calculation.
(c) Unless otherwise stated, references herein to dollar amounts or $
shall be deemed to be references to Canadian dollars.
(d) Unless otherwise stated, references herein to time shall mean local
time in Calgary, Alberta.
(e) The word "including" shall not be construed to limit or restrict the
generality of the matter that precedes it.
2.5 Statute References
References herein to a statute include, unless otherwise stated,
regulations passed or in force pursuant thereto and any amendments to such
statute or to such regulations from time to time, and any legislation or
regulations substantially replacing the same or substantially replacing any
specific provision to which such reference is made.
2.6 Schedules
Schedule A (Real Property Descriptions) and Schedule B (Serial Number
Goods) are attached hereto and form an integral part of this Debenture.
ARTICLE 3
DEPOSIT OF DEBENTURE
3.1 Deposit of Debenture as Collateral Security
This Debenture may be issued, pledged, hypothecated or deposited by the
Debtor as collateral security for any indebtedness, liabilities or obligations
(direct or indirect, present or future, absolute or contingent, matured or not,
extended or renewed), and may only be cancelled by the Debtor when physically
redelivered by the Holder to the Debtor, which will occur upon satisfaction of
all such liabilities, indebtedness or obligations as set forth in Section 16.20.
While this Debenture is so issued, pledged, hypothecated or deposited it shall
not be redeemed by reason of the account of the Debtor having ceased to be in
debit, or by reason of the liabilities, indebtedness or obligations in respect
of which this Debenture is issued, pledged, hypothecated or deposited being
repaid or satisfied from time to time, and this Debenture shall only be
cancelled as aforesaid.
XIII-3
3.2 Debenture is Outstanding for Full Face Amount
The Debtor agrees and confirms that no payment by the Debtor to the Holder
or any Person for whom the Holder acts as agent hereunder on account of any of
the liabilities, indebtedness or obligations hereunder shall reduce the
principal amount owing under this Debenture unless such payment is specifically
and expressly in writing appropriated by the Debtor to this Debenture and
recorded as such in writing by the Holder on this Debenture.
3.3 Debenture Secures Revolving Line
This Debenture secures, among other things, a revolving line of credit up
to the amount of the Principal Amount, and both present and future advances, and
accordingly the Holder shall be entitled to all priorities and advantages
conferred pursuant to Section 104 of the Land Titles Act (Alberta) and the PPSA
and pursuant to equivalent sections of Applicable Law in other jurisdictions.
ARTICLE 4
SECURITY
4.1 Security for Obligations
As continuing security for the due payment, observance and performance of
all Obligations of the Debtor, but subject to the exception as to leaseholds
hereinafter contained, the Debtor hereby:
(a) real property (fixed charge): grants, assigns, conveys, transfers,
mortgages and charges as and by way of a fixed and specific mortgage
and charge to and in favour of the Holder, all of the Debtor's right,
title, estate and interest (whether freehold, leasehold, profit a
prendre or otherwise, and whether legal or equitable, corporeal or
incorporeal) in and to all real property described or referred to in
Schedule "A";
(b) real property (floating charge): grants, assigns, conveys, transfers,
mortgages and charges as and by way of a floating charge to and in
favour of the Holder, all of the Debtor's present and after-acquired
right, title, estate and interest (whether freehold, leasehold, profit
a prendre or otherwise, and whether legal or equitable, corporeal or
incorporeal) in and to all real property, buildings, structures,
improvements, expansions, erections, works and fixtures, wherever
located, other than the property validly subjected to the fixed charge
created by clause (a) above;
(c) personal property (security interest): grants, assigns, conveys,
transfers, mortgages and charges as and by way of a fixed and specific
mortgage and charge to and in favour of the Holder, and grants a
continuing security interest in, all of the Debtor's present and
after-acquired personal property including all present and
after-acquired intellectual property and rights thereto and therein,
all present and after-acquired electronic information and electronic
information storage and computer systems, all present and
after-acquired franchises, privileges, permits, grants, licences,
authorizations, contracts and agreements, and all present and
after-acquired goods (including without limitation the serial number
goods
XIII-4
described in Schedule B hereto and all accessories installed in or
affixed or attached or pertaining to such serial number goods),
chattel paper, securities, documents of title, instruments,
intangibles [(including the Collateral Account and all amounts
deposited therein)], and money (as such terms are defined in the
PPSA), wherever located; [Insert bracketed text in Borrower's
Debenture and, in Finance Co. Debenture, include specific reference to
Note]
(d) increases and additions: for certainty, grants, assigns, conveys,
transfers, mortgages and charges as and by way of a fixed and specific
mortgage and charge (in the case of property of the nature described
in clauses (a) and (c) above) and a first floating charge (in the case
of property of the nature described in clause (b) above), and to and
in favour of the Holder, and the Holder hereby takes a continuing
security interest in, all increases, additions, accretions,
attachments, parts, profits and accessions to any of the foregoing
property, together with all substitutions for and replacements and
renewals of any of the foregoing property; and
(e) proceeds: grants, assigns, conveys, transfers, mortgages and charges
and by way of a fixed and specific mortgage and charge (in the case of
property of the nature described in clauses (a) and (c) above) and a
first floating charge (in the case of property of the nature described
in clause (b) above), and to and in favour of the Holder, and the
Holder hereby takes a continuing security interest in, all proceeds
derived directly or indirectly from any dealing with any of the
foregoing property (or any dealing with such proceeds), whether or not
of the same type, class or kind as the original property, including
any right to an insurance payment or any other payment as indemnity or
compensation for loss or damage, and payments made in the total or
partial discharge of an intangible, chattel paper, an instrument, a
security, or a mortgage or charge in respect of an interest in land;
it being the intent hereof that the entire property, assets and undertaking of
the Debtor, real and personal, present and future, tangible and intangible, of
every nature and kind, and wheresoever located, shall be subject to the lien
hereof, subject only to Section 7.1, and shall constitute a First Priority Lien
as required under the Credit Agreement.
4.2 Habendum
The Holder shall have and hold the Mortgaged Property and the rights hereby
conferred on the Holder for the use and purpose and with the powers and
authorities herein expressed for the benefit of the Beneficiaries.
4.3 Holder Not Liable on Debtor's Agreements
Nothing contained in this Debenture shall be construed as rendering the
Holder liable, directly or indirectly, for any obligations of the Debtor under
any agreement, instrument, permit, lease, license or other document subject to
the lien hereof, or any judgment, decree or order of any Governmental Authority.
XIII-5
4.4 Charge Valid Irrespective of Advance of Moneys
The liens hereof shall be and be deemed to be effective whether or not the
moneys hereby secured or any part thereof shall be advanced before, upon or
after the date of execution and issuance of this Debenture.
4.5 Amalgamation
The Debtor acknowledges and agrees that in the event that it amalgamates or
merges with any other corporation or corporations, it is the intention of the
Debtor and the Holder that the term "Debtor" when used herein shall apply to
each of the amalgamating corporations and to the resulting amalgamated
corporation, such that the lien hereof will attach to all of the Mortgaged
Property owned by each corporation amalgamating with the Debtor and by the
amalgamated corporation at the time of the amalgamation, and shall attach to any
Mortgaged Property thereafter owned or acquired by the amalgamated corporation
when such becomes owned or acquired.
4.6 Acknowledgement
The Debtor, by executing this Debenture, hereby acknowledges and agrees
that:
(a) value has been given by the Holder;
(b) the Debtor has rights in the Mortgaged Property;
(c) there is no agreement to postpone the attachment of the lien hereof;
and
(d) notwithstanding that the mortgage, charge and security interest
created pursuant to clause 4.1(b) is stated to be a floating charge,
the time for attachment of the mortgage, charge and security interest
created pursuant to this Debenture has not been postponed and is
intended to attach when this Debenture is signed by the Debtor, and
attaches at that time to property in which the Debtor then has any
right, title or interest and attaches to property in which the Debtor
subsequently acquires any right, title or interest at the time when
the Debtor first acquires such right, title or interest.
4.7 Representations Regarding Place of Business or Chief Executive Office
The Debtor represents and warrants to the Holder that its place of business
as of the date hereof is at the address designated in Section 15.1 or, if the
Debtor has more than one place of business, the Debtor's chief executive office
as of the date hereof is at the address designated in Section 15.1.
ARTICLE 5
PROVISIONS APPLICABLE TO ASSIGNED ACCOUNTS
5.1 Assigned Accounts
The following provisions shall apply to all debts, accounts, claims,
moneys, receivables and other similar items of personal property assigned and
transferred to the Holder hereunder (in this Section called the "assigned
accounts"):
XIII-6
(a) collection: during the existence of an Event of Default the Holder may
collect, realize, sell or otherwise deal with the assigned accounts or
any part thereof in such manner, upon such terms and conditions and at
such time or times as may seem to it advisable and without notice to
the Debtor (except as otherwise required by Applicable Law);
(b) not bound to collect: the Holder shall not be liable or accountable
for any failure to collect, realize, sell or otherwise deal with or
obtain payment of the assigned accounts or any part thereof and shall
not be bound to institute proceedings for the purpose of collecting,
realizing, selling or otherwise dealing with or obtaining payment of
the same or for the purpose of preserving any rights of the Holder,
the Debtor or any other Person in respect of the same;
(c) application: all moneys collected or received by the Holder during the
existence of an Event of Default in respect of the assigned accounts
may be applied on account of such parts of the Obligations as the
Holder in its discretion determines or, in the discretion of the
Holder, may be held in a separate collateral account for such time as
the Holder sees fit, or released to the Debtor;
(d) trustee: during the existence of an Event of Default, all moneys
collected or received by the Debtor in respect of the assigned
accounts shall be held in trust by the Debtor for the benefit of the
Holder, and paid over to the Holder forthwith on demand;
(e) information: the Debtor shall from time to time forthwith on request
of the Holder furnish to the Holder any information relating to the
assigned accounts, and the Holder shall be entitled from time to time
to inspect any documents pertaining thereto and take temporary custody
thereof;
(f) notifications: the Holder may at any time during the existence of an
Event of Default notify any account debtor to make payment of the
assigned accounts to or to the order of the Holder; and
(g) control of proceeds: the Holder may during the existence an Event of
Default take control of any proceeds of the assigned accounts.
ARTICLE 6
POSSESSION AND USE UNTIL DEFAULT
6.1 Possession
Unless an Event of Default exists and the Holder has determined to enforce
any of its rights to the contrary under Section 10.1 hereof, the Debtor may,
subject to the express terms hereof:
(a) possess, operate, manage and use the Mortgaged Property and control
the conduct of its business, and take and use the incomes and profits
thereof, and
(b) exercise and enforce all of its rights and remedies under any
agreement (subject to the lien hereof).
XIII-7
Notwithstanding the foregoing, nothing in this Debenture shall be construed as
subordinating the lien hereof to any other present or future creditor of the
Debtor, or any other Person who may have an interest in connection with the
Mortgaged Property, whether secured or unsecured.
ARTICLE 7
LEASES; RESTRICTIONS ON ASSIGNMENT
7.1 Last Day of Term Excluded
The last day of the term of any lease, oral or written, or any agreement
therefor, now held or hereafter acquired by the Debtor shall be excepted from
the lien hereof and shall not form part of the Mortgaged Property, but the
Debtor shall stand possessed of such one day in trust for the Holder, and shall
assign and dispose of the same as the Holder or any assignee from the Holder of
such lease or agreement shall direct. The Holder may at any time after the
occurrence and during the continuance of an Event of Default remove the Debtor
as trustee and appoint another in its place.
7.2 Prohibitions on Assignment
If any lease, agreement, license or permit contains a clause which provides
in legal effect that it can not be encumbered in the manner herein provided
without the consent or approval of the other party thereto or the issuer
thereof, then the effectiveness of the lien hereof (vis-a-vis such party or
issuer only and in respect to such lease, agreement, license or permit only)
shall be conditional upon any such consent or approval having been obtained. The
Debtor shall use its best commercial efforts to obtain such consent or approval
forthwith, and the lien hereof, while effective as against the Debtor and all
other Persons immediately, shall be effective against such other party as soon
as the required consent or approval is given, or is deemed or required to be
given, whichever shall first occur.
7.3 Realization on Agreements
Nothing in Section 7.2 or elsewhere in this Debenture shall be construed as
limiting the rights of the Holder or any Receiver to rely upon provisions in any
agreement or instrument subject to the lien hereof where such provisions are
more favourable to the Holder or a Receiver than those contained herein
(notwithstanding any inconsistency herewith), nor as requiring the Holder or any
Receiver to comply with any restrictions of the nature referred to in Section
7.2 in connection with any realization on the Mortgaged Property where such
compliance is not otherwise required by Applicable Law relating to realization
of security.
ARTICLE 8
COVENANTS OF THE DEBTOR
8.1 General Covenants
The Debtor covenants and agrees with the Holder that it shall:
(a) registration: ensure that this Debenture is forthwith registered,
filed and recorded or notices, caveats, financing statements or other
registrations thereof made, as provided in the Credit Agreement;
XIII-8
(b) relocation of business: not move its place of business or chief
executive office, or any material assets comprised in the Mortgaged
Property, from the jurisdictions in which the same are now located to
any other jurisdiction unless and until (i) it has first given notice
to the Holder of its intention to do so together with full particulars
of such move, and (ii) thereafter the Holder has notified it that the
registrations necessary or advisable to protect and perfect the lien
hereof in the jurisdiction where such business or assets will be
located have been effected;
(c) name change: not change its name unless it has first given notice to
the Holder of its intention to do so, and within 5 Business Days after
such name change it shall provide certified copies of the certificate
and supporting documents effecting such name change sufficient to
allow the Holder to effect such amendments to registrations made in
connection with the lien hereof as the Holder deems necessary or
advisable;
(d) negative pledge: not create, assume, suffer to exist or otherwise have
outstanding any Lien except as expressly permitted by the Credit
Agreement; and
(e) dispositions of assets: not sell, lease, assign, exchange, transfer or
otherwise dispose of, including by way of a sale-leaseback, any
property except as expressly permitted by the Credit Agreement.
8.2 After-Acquired Property
(a) The Debtor shall, forthwith upon request by the Holder made subject to
and in accordance with Section 5.5 of the Credit Agreement, mortgage
and charge as and by way of a fixed and specific mortgage and charge
to and in favour of the Holder its entire right, title, estate and
interest in any or all property which it now owns or shall hereafter
acquire but which is subject only to the floating charge created by
Section 4.1(b), and execute all such deeds and documents as may be
reasonably required by the Holder in connection therewith and shall
constitute a First Priority Lien as required under the Credit
Agreement.
(b) The Debtor hereby irrevocably constitutes and appoints any officer of
the Holder at its address herein set out, or any Receiver appointed by
the court or the Holder as herein set out, the true and lawful
attorney of the Debtor with full power of substitution to do, make and
execute all such assignments, documents, acts, matters or things with
the right to xxx in the name of the Debtor whenever and wherever it
may be deemed necessary or expedient in connection with this Section,
if the Debtor does not comply with its obligation in Section 8.2(a) or
if an Event of Default exists.
ARTICLE 9
DEMAND; EVENTS OF DEFAULT
9.1 Obligations Payable on Demand
The Debtor agrees and acknowledges that the Obligations for the payment of
any money hereunder (including the Principal Amount and interest thereon) are
payable by the Debtor on demand by the Holder whether or not an Event of Default
has occurred or is continuing.
XIII-9
9.2 Events of Defaults
The happening of any of the following events or circumstances shall be an
"Event of Default":
(a) non-payment on demand: the Debtor shall fail to pay the Principal
Amount or interest thereon when demanded by the Holder; or
(b) involuntary insolvency: if any case, proceeding or other action shall
be instituted in any court of competent jurisdiction, against the
Debtor seeking an adjudication in bankruptcy, reorganization of its
indebtedness, dissolution, winding up, liquidation, a composition,
proposal or arrangement with creditors, a readjustment of debts, the
appointment of a trustee, receiver, receiver and manager, interim
receiver, custodian, liquidator or any Person with similar powers with
respect to the Debtor or of all or any substantial part of its assets,
or any other like relief in respect of the Debtor under a Bankruptcy
Law, the Companies' Creditors Arrangement Act (Canada), the Winding Up
Act (Canada), the Partnership Act (Alberta) or any other bankruptcy,
insolvency or analogous law and either:
(i) such case, proceeding or other action results in an entry of an
order for relief or any such adjudication or appointment; or
(ii) if such case, proceeding or other action is being contested in
good faith and by appropriate proceedings, the same shall
continue undismissed, or unstayed and in effect, for any period
of 45 days past the commencement of such case, proceeding or
action; or
(c) voluntary insolvency: if the Debtor makes any assignment in bankruptcy
or makes any other assignment for the benefit of creditors; makes any
proposal under a Bankruptcy Law or any comparable law, seeks relief
under the Companies' Creditors Arrangement Act (Canada), the Winding
Up Act (Canada) or any other bankruptcy, insolvency or analogous law,
or files a petition or proposal to take advantage of any act of
insolvency; consents to or acquiesces in the appointment of a trustee
in bankruptcy, receiver, receiver and manager, interim receiver,
custodian, sequestrator or other person with similar powers of itself
or of all or any portion of its assets which is, in the opinion of the
Holder, material; files a petition or otherwise commences any
proceeding seeking any reorganization, arrangement, composition,
administration or readjustment under any applicable bankruptcy,
insolvency, moratorium, reorganization or other similar law affecting
creditors' rights; commits an act of bankruptcy under a Bankruptcy
Law; is adjudicated insolvent under a Bankruptcy Law, or admits in
writing its inability to pay its debts as they become due; or consents
to, or acquiesces in, the filing of such assignment, proposal, relief,
petition, proposal, appointment or proceeding or takes any action to
authorize or effect any of the foregoing.
9.3 Automatic Acceleration
Upon the occurrence of an Event of Default in paragraphs 9.2(b) or 9.2(c),
all of the Obligations for the payment of any money hereunder (including the
Principal Amount and
XIII-10
interest thereon) shall automatically be and become immediately due and payable
without presentment, demand or notice of any kind, all of which are hereby
waived by the Debtor.
9.4 No Waiver
No delay by or omission of the Holder in exercising any right or power
accruing upon any Event of Default shall impair any such right or power or shall
be construed to be a waiver of any such default or acquiescence therein, and no
act or omission of the Holder shall extend to or be taken in any manner
whatsoever to affect any subsequent default hereunder or the rights resulting
therefrom.
9.5 Other Rights on Default
Nothing in this Article shall be construed as limiting any other rights or
remedies that the Holder may have against the Debtor for breach of any covenant,
representation or warranty contained in this Debenture.
ARTICLE 10
REMEDIES
10.1 Remedies
Upon the occurrence of an Event of Default, the lien hereof shall
immediately become enforceable without further notice or demand. If the lien
hereof becomes enforceable and the Holder has determined to enforce the same,
the Holder may itself (or through an agent) to the fullest extent permitted by
Applicable Law, and a Receiver appointed by the Holder pursuant to Section 10.2
hereof may:
(a) possession of Mortgaged Property and power of entry: take possession
of the Mortgaged Property at such place or places where it may be
situate to the exclusion of the Debtor and to that end the Debtor
agrees that the Holder or Receiver may at any time enter upon lands
and premises comprising the Mortgaged Property or where the Mortgaged
Property may be found for the purpose of taking possession of and/or
removing the Mortgaged Property, without being liable to the Debtor by
reason of such entry. In the event that the Holder or Receiver takes
possession of the Mortgaged Property, it shall have the right to
seize, repossess and maintain the same upon the premises on which the
Mortgaged Property may then be situate without removal to other
premises, and may dispose of the same from such premises;
(b) power of disposition: sell, lease or otherwise dispose of the
Mortgaged Property either as a whole or in separate parcels, units or
parts, by public sale (including public auction) or private or closed
tender or by private contract, with only those notices, if any, as are
required by Applicable Law, and with or without advertising and
without any other formality (except as otherwise required by
Applicable Law), and such sale, lease or disposition shall be on such
terms and conditions as to title, credit or deferred payment and
otherwise and as to upset or reserve bid or price as may seem
advantageous to the Holder or Receiver, and the Holder or Receiver
shall not be required to accept the highest or any bid or tender at
any public sale. If such sale, lease or disposition is made in whole
or in part on credit
XIII-11
or deferred payment, there need only be applied against the
Obligations the actual cash received from time to time. The Holder may
itself purchase or lease the Mortgaged Property free from any right of
redemption on the part of the Debtor, unless prohibited from doing so
by Applicable Law. The Holder or Receiver may rescind or vary any
contract for the sale, lease or other disposition of the Mortgaged
Property and may resell or re-lease without being answerable for any
loss occasioned thereby, and may delay any disposition of the
Mortgaged Property in whole or in part;
(c) carrying on business: carry on or concur in the carrying on, or cease
the carrying on, of all or any part of the business or undertaking of
the Debtor and receive all proceeds, rents, revenues, profits and any
other income thereof, and enter into any contract it deems reasonable,
and may to the exclusion of the Debtor enter upon, occupy and use all
or any of the premises, buildings, plants and undertakings of or
occupied or used by the Debtor and may use any or all of the
machinery, equipment, tools and other assets of the Debtor for such
time as the Holder or Receiver sees fit, free of charge from the
Debtor, to carry on the business of the Debtor and, if applicable, to
produce or manufacture or complete the production or manufacture of
any resources or products, to pack and ship or transport the resources
or products, to employ and discharge any Persons upon such terms and
remuneration as it deems appropriate, and generally to have the same
rights and powers as the Debtor would have in carrying on such
business were it not in default hereunder;
(d) pay encumbrances: pay all or any part of any indebtedness of the
Debtor, whether prior to or subordinate to the lien hereof, with any
such payment being included in the expenses of realization of the
Holder in (i) below;
(e) foreclosure: foreclose (by either an order for foreclosure or an order
for judicial sale) upon the Mortgaged Property pursuant to Applicable
Law;
(f) deal with Mortgaged Property: obtain, hold, maintain, release to third
parties, repair, replace, substitute, protect, preserve, process,
prepare, or otherwise deal with the Mortgaged Property in such manner,
upon such terms and conditions and at such time or times as may seem
advisable to the Holder or Receiver without notice to the Debtor
(except as otherwise required by Applicable Law);
(g) file proofs of claim: file such proofs of claim and other documents as
may be necessary or advisable in order to prove the claim of the
Holder in any bankruptcy, proposal, reorganization, arrangement,
winding-up or other proceeding relating to the Debtor or its property;
(h) commence actions: commence and proceed with any actions or judicial
proceedings seeking such legal and/or equitable remedies as the Holder
or Receiver deems advisable to protect and enforce its rights
hereunder and the Mortgaged Property;
(i) expenses of realization: charge on its own behalf and pay to others
amounts incurred (including reasonable legal fees on a solicitor and
his own client basis, and Receivers' and accounting fees) in or in
connection with any dealing with the
XIII-12
Mortgaged Property or acts in respect thereof referred to in the
preceding paragraphs, and in connection with the protection and
enforcement of its rights hereunder (including in connection with
advice with regard to any of the foregoing). The Holder or Receiver
may deduct such amounts from the proceeds of realization or may add
such amounts to the Obligations, whereupon the same shall be payable
by the Debtor to the Holder on demand and shall bear interest at the
rate set forth herein in respect of the Principal Amount calculated
from the date incurred by the Holder or Receiver to the date paid by
the Debtor and such amounts and such interest shall be secured by the
lien hereof;
(j) credit: purchase on credit, borrow money in the Debtor's name or
advance its own money on such terms and at such rates as it may deem
reasonable; and
(k) enforcement: otherwise enforce this Debenture by any method permitted
by Applicable Law.
To enable the Holder to exercise the powers granted to it hereunder, the
Debtor hereby irrevocably appoints the Holder as its attorney and on its behalf,
during the continuance of an Event of Default, to effect any sale, lease or
other disposition of the Mortgaged Property (including any real property subject
to the lien hereof), and to execute all instruments and deeds, and do all acts,
matters and things that may be necessary or advisable in the name of or on
behalf of the Debtor or otherwise. The power of attorney hereby granted shall be
effective upon the lien hereof becoming enforceable and the Holder having
determined to enforce the same. Any deed, lease, agreement or other instrument
required to be signed under seal and signed by the Holder under its seal
pursuant hereto shall have the same effect as if it were signed under the
corporate seal of the Debtor. The Holder shall have full power of substitution,
and may provide the Receiver with the power to exercise such rights as attorney
hereunder, and may at any time revoke any such substitution.
In exercising any of its powers under this Debenture, the Holder, and any
Receiver appointed pursuant to Section 10.2, may act through its officers,
employees, agents, solicitors, or substitute attorneys.
10.2 Private or Court-Appointed Receiver
(a) Private appointment: The Holder may, at any time after the lien hereof
has become enforceable and whether or not the Holder shall itself or
through its officers, employees, agents or solicitors have taken
possession of the Mortgaged Property or taken any other actions or
steps with regard thereto, appoint by instrument in writing a Receiver
over all or any portion of the Mortgaged Property. Any such Receiver
shall have all of the powers, remedies and rights set forth in Section
10.1, and the powers, remedies and rights of the Holder hereunder, in
addition to those possessed by a receiver or receiver-manager, as
applicable, at law or in equity, unless any of such powers, remedies
and rights are expressly limited in the instrument appointing the
Receiver or in amendments thereto. The Holder may appoint one or more
Receivers hereunder and may remove any such Receiver or Receivers and
appoint another or others in his or their stead from time to time. Any
Receiver so appointed may be an officer or employee of the Holder. Any
Receiver appointed by the Holder need not be
XIII-13
appointed or supervised in any way by a court, and may be appointed
with or without bond or security. The Holder may from time to time fix
the remuneration of every such Receiver, and direct the payment
thereof out of the Mortgaged Property or the proceeds thereof in
priority to payment of the Obligations.
(b) Receiver's certificates: A Receiver appointed pursuant to paragraph
(a) may, with the consent in writing of the Holder, borrow money for
the maintenance, protection or preservation of the Mortgaged Property
or for the carrying on of the business or undertaking of the Debtor,
and any Receiver may issue certificates (in this paragraph called
"Receiver's Certificates"), for such amounts as will in the opinion of
the Holder be sufficient for obtaining upon the security of the
Mortgaged Property the amounts from time to time required, and such
Receiver's Certificates may be payable either to order or bearer and
may be payable at such time or times as the Holder may consider
expedient, and shall bear such interest as shall therein be provided
and the Receiver may sell, deposit, pledge or otherwise dispose of the
same in such manner as the Holder may consider advisable and may pay
such commission on the sale thereof as the Receiver may consider
reasonable, and the amounts from time to time payable by virtue of
such Receiver's Certificates shall at the option of the Holder be
entitled to the security of the lien hereof in priority to the
Obligations.
(c) Indemnity: Any Receiver appointed pursuant to paragraph (a) shall so
far as concerns responsibility for its acts be deemed to be the agent
of the Debtor, and the Holder shall not be responsible for any
misconduct or negligence on the part of any such Receiver. The Debtor
shall indemnify and save harmless the Holder from and against any and
all costs, charges, demands, damages, liabilities, claims and actions
whatsoever and howsoever suffered or incurred by the Holder as a
result of the acts of any such Receiver, save and except those costs,
charges, demands, damages, liabilities, claims and actions arising out
of the wilful misconduct or gross negligence on the part of any such
Receiver.
(d) Court appointment: The Holder may, in its sole discretion, either
before or after the private appointment of a Receiver hereunder,
institute proceedings in any court of competent jurisdiction for the
appointment of a Receiver of the Mortgaged Property, and in such case
the Receiver shall have the powers expressed in the order appointing
it, as such order may be varied from time to time.
(e) Power of directors: Upon the appointment of any Receiver, all powers,
functions, rights and privileges of the directors of the Debtor with
respect to the Mortgaged Property shall cease unless specifically
continued by the written consent of the Holder.
10.3 Appointment of Consultant
If the Holder in good faith believes that (a) the prospect of payment or
performance of the Obligations by the Debtor is or is about to be impaired, or
(b) the Mortgaged Property or the lien hereof is or is about to be placed in
jeopardy, then, if an Event of Default exists, the Holder may (without prejudice
to any other remedies it may have from time to time), on 2 Business Days'
XIII-14
notice to the Debtor, engage a consultant or monitor for the purposes of
reviewing the Debtor's businesses, affairs and prospects, and reporting to the
Holder on any matter relating thereto. The Debtor hereby authorizes any such
consultant or monitor so appointed to enter onto the business premises of the
Debtor and any other premises in which the Debtor is entitled to enter onto, and
to inspect any of the Debtor's books, records, information systems or property
for such purpose, and the Debtor shall make available its senior officers and
employees to assist such consultant or monitor in performing its duties. The
reasonable costs and expenses of such consultant shall be for the account of the
Debtor and shall be payable by the Debtor to the Holder on demand and shall bear
interest at 2% over the Prime Rate, calculated from the date incurred by the
Holder to the date paid by the Debtor and such amounts and such interest shall
be secured by the lien hereof.
10.4 Dealing with Security
(a) The Holder may grant renewals, extensions of time and other
indulgences, take, release and give up securities, accept
compositions, grant releases and discharges, perfect or fail to
perfect any securities, release the Mortgaged Property to third
parties and otherwise deal or fail to deal with the Debtor, debtors of
the Debtor, guarantors, sureties and others and with the Mortgaged
Property and other securities as the Holder may see fit, all without
prejudice to the liability of the Debtor to the Holder or the Holder's
rights and powers under this Debenture.
(b) Nothing in this Debenture shall be construed as requiring the Holder
to exercise all or any of its possession or realization rights
hereunder in respect of all or any particular part of the Debtor's
property as the Holder may determine in its sole discretion, and the
Holder may specifically elect not to take possession or control over,
or appoint a Receiver in respect of, any such assets while exercising
any or all remedies available to it in respect of any other Mortgaged
Property. Without limiting the generality of the foregoing, the Holder
may elect to exercise its possession and realization rights against
the Debtor's personal property and not its real property, or any
particular portion of such real property, without prejudice to its
ability to subsequently assert such rights. The Holder may also, of
its own volition, release or discharge from the lien hereof any
Mortgaged Property that it desires to release to the Debtor, and the
Debtor covenants to accept such release and execute any
acknowledgements as the Holder may require in respect thereof.
10.5 Cash Collateral Account
The Holder may, in the course of enforcing the lien hereof, upon and during
the continuance of an Event of Default, when in its sole discretion it considers
doing so to be advantageous to it, retain any money in a cash collateral account
maintained by it, such cash collateral account to be subject to the lien hereof,
and amounts so retained ultimately to be applied (with any accrued interest) to
the Obligations.
10.6 Validity of Sale
No Person dealing with the Holder or any Receiver shall be concerned to
inquire whether the lien hereof has become enforceable or whether the powers
which the Holder or any Receiver is purporting to exercise have become
exercisable or whether any money remains due on the security of the Mortgaged
Property or as to the necessity or expedience of the stipulations and
XIII-15
conditions subject to which any sale, lease or other disposition shall be made
or otherwise as to the propriety or regularity of any sale or any other dealing
by the Holder with the Mortgaged Property or to see to the application of any
moneys paid to the Holder or Receiver.
10.7 Rights and Remedies in Addition
Each and every right, remedy and power conferred by this Article is in
supplement of and in addition to and not in substitution for any other right,
remedy or power the Holder or any Receiver may have from time to time under this
Article or elsewhere in this Debenture, or in any other agreement or under
Applicable Law at the time of the exercise of such right, remedy or power. The
Holder or Receiver may, when so entitled, proceed by way of any action, suit,
remedy or other proceeding at law or in equity (including specific performance
of any covenant and injunctions against violations of any covenant) and no such
remedy for the enforcement of the rights of the Holder or Receiver shall be
exclusive of or dependent on any other such remedy. Any one or more of such
remedies may from time to time be exercised separately or in combination and in
particular the power of sale and other realization remedies contained herein may
be exercised without the Holder entering into possession of or exercising
control over the Mortgaged Property. Notwithstanding the foregoing, the Holder
shall not be bound to deal with the Mortgaged Property, to exercise any right or
remedy as aforesaid, or to preserve rights against other Persons.
10.8 Automatic Crystallization; Restoration
(a) At any time after the floating charge security created by Section
4.1(b) becomes enforceable, the Holder may, by notice in writing to
the Debtor, to the extent permitted by Applicable Law, crystallize and
fix such floating charge (i) on all of the property subject thereto,
or (ii) if the notice so stipulates, on any part thereof described in
the said notice, without any requirement for further intervention by
the Holder (whether by the taking of possession, the appointment of a
Receiver or otherwise), but without in any way limiting the powers,
rights and remedies of the Holder hereunder in respect of the
Mortgaged Property.
(b) To the extent permitted by Applicable Law, but not in limitation of
any occurrences that at law cause a floating charge security to
crystallize or become fixed, the Debtor agrees that the floating
charge security created by Section 4.1(b) shall crystallize and become
fixed immediately and without any requirement for any notice or
intervention on the part of the Holder, if any Event of Default in
paragraphs 9.2(b) or 9.2(c) occurs.
(c) At any time after the floating charge security created by Section
4.1(b) is crystallized (whether by operation of law, by notice
pursuant to paragraph (a), automatically pursuant to paragraph (b), by
the intervention of the Holder or a Receiver or otherwise), the Holder
may, by notice to the Debtor in writing, to the extent permitted by
Applicable Law, restore (or, if a Receiver has been privately
appointed by the Holder, cause such Receiver to restore) to the Debtor
the Mortgaged Property which shall have become subject to a fixed
charge by reason of the crystallization of the floating charge freed
from such crystallized charge, whereupon such Mortgaged Property shall
again be subject to the floating charge security created by Section
4.1(b) as fully and to the same extent as though no
XIII-16
crystallization had occurred, without prejudice to the right of the
Holder to exercise any further or subsequent remedies in respect
thereof, including the crystallization of such floating charge to
which such property again became subject by virtue of this provision.
10.9 BIA Notice
Notwithstanding any period of time provided to the Debtor to remedy
Potential Events of Default, as provided in Section 10 of the Credit Agreement,
the Holder may, to the extent permitted by Applicable Law, contemporaneously
with or during any such period, give the Debtor the Notice of Intention to
Enforce Security required by the Bankruptcy and Insolvency Act (Canada), as
amended, it being the intention of the parties that, at the Holder's option, the
period to cure defaults, and then the 10-day period of the Notice of Intention
to Enforce Security, may run concurrently.
10.10 Trust During Stay
The Debtor acknowledges that if a stay of proceedings is issued against the
Debtor pursuant to the Bankruptcy and Insolvency Act (Canada), the Companies'
Creditors Arrangements Act (Canada) or any other similar law, the Holder would
be irreparably harmed and materially prejudiced if any proceeds of the Mortgaged
Property were used for any purpose other than the repayment of the debts secured
hereby, and the Debtor hereby acknowledges and agrees that any proceeds of the
Mortgaged Property received by the Debtor while such stay is in effect shall be
received and held by the Debtor in trust for the Holder.
ARTICLE 11
LIMITATION OF LIABILITY
11.1 Limitation of Liability
(a) Subject to paragraph (c), the Holder and any Receiver shall not be
liable, accountable or responsible for any loss or damage suffered or
incurred by the Debtor as a result of:
(i) the failure by the Holder or a Receiver to exercise any rights or
remedies provided for herein, or to exercise any right or remedy
in lieu of any other right or remedy; or
(ii) the taking and maintaining of possession by the Holder or a
Receiver of the Mortgaged Property pursuant to the terms of this
Debenture, or the carrying on of the business of the Debtor as
herein provided.
(b) Subject to paragraph (c), the Holder and any Receiver shall not be
liable, accountable or responsible:
(i) to account as mortgagee in possession or otherwise upon entry
into possession hereunder, other than for actual receipts;
(ii) to observe or perform, or to see to the observance or performance
by the Debtor of any agreements or obligations to which the
Debtor is a party or
XIII-17
by which it is bound, whether before or during any period when
the Holder or a Receiver has entered into possession hereunder;
(iii) for loss or damage to the Mortgaged Property while in the
possession of the Holder or a Receiver (except to the extent
caused by the gross negligence or wilful misconduct of the Holder
or a Receiver), the risk of which is hereby expressly agreed to
be on the Debtor;
(iv) to keep the Mortgaged Property identifiable or separate from
other property which it owns or holds, whether fungible or not,
while in the possession of the Holder or a Receiver; or
(v) in the case of chattel paper, a security or an instrument in the
possession of the Holder or Receiver, to take any steps to
preserve rights against other Persons.
(c) Notwithstanding any exclusion or limitation herein contained, to the
extent that the provisions of any statute impose a duty or onus upon a
Person or restrict his rights or remedies in relation hereto, and such
provisions are under Applicable Law incapable of waiver or variance by
the Debtor, the provisions of such Applicable Law shall govern and the
affected provisions hereof shall be deemed to be amended to the extent
necessary to give effect to such Applicable Law without in any way
affecting any other provision hereof.
ARTICLE 12
SET-OFF
12.1 Payment Free from Equities
The Obligations shall be paid by the Debtor, and may be assigned by the
Holder in accordance with the terms of the Credit Agreement, absolutely free and
clear of all equities, rights of set-off, claims, defences, counterclaims,
rights or other matters whatsoever, whether existing between the Holder or any
Person for whom the Holder acts as agent hereunder and the Debtor and/or any
third parties or intermediate holders, and whether now existing or hereafter
arising (before or after notice to the Debtor of any assignment) which could
impair or adversely affect in any way the entitlement of the Holder to enforce
the Obligations strictly in accordance with the terms and provisions hereof.
12.2 Set-off
Any indebtedness owing by the Holder to the Debtor (whether matured or not,
and in any currency) may, during the existence of an Event of Default, be
set-off and applied by the Holder against the Obligations without demand upon or
notice to any Person.
XIII-18
ARTICLE 13
EXPENSES AND INDEMNITY
13.1 Expenses
The Debtor shall pay to the Holder all reasonable out-of-pocket costs and
expenses, including all reasonable legal fees (on a solicitor and his own client
basis) and consultants' fees and other expenses incurred by the Holder from time
to time in the documentation, preparation, negotiation, execution, registration,
enforcement, realization and collection of or in respect of this Debenture
(including all charges incurred in respect of the Mortgaged Property and
obtaining any reports or evaluations in respect thereof and all costs and
expenses associated with considering the provision of consents, waivers or other
acknowledgements hereunder). All such amounts shall become part of the
Obligations, and shall be payable by the Debtor on demand, shall bear interest
at 2% over the Prime Rate calculated from the date incurred by the Holder to the
date paid by the Debtor, and such amounts and interest shall be secured by the
lien hereof. This provision shall not be construed to limit any other provisions
of this Debenture dealing with the charge-back to the Debtor of expenses
incurred by the Holder.
13.2 Indemnity
The Debtor shall indemnify the Holder against any loss, costs, claims,
actions, suits, damages, expenses or liabilities of any and every kind which the
Holder may sustain or incur (directly or indirectly) as a consequence of a
default by the Debtor in the payment or performance of any Obligations,
including any representation or warranty made herein by the Debtor being
incorrect at the time it was made or deemed to have been made, the failure by
the Debtor to comply with any of its covenants hereunder, or the occurrence of
any other default or Event of Default, except to the extent caused by the gross
negligence or wilful misconduct of the Holder. The indemnities in this
Debenture, including this Section, shall extend to the officers, directors,
employees, agents and assignees of the Holder and, for certainty, those for whom
the Holder acts as agent hereunder, and the Debtor will hold the benefit of
these indemnities in trust for such indemnified parties to the extent necessary
to give effect hereto. All such indemnities shall survive the discharge of this
Debenture.
ARTICLE 14
INTEREST ON OVERDUE AMOUNTS; CALCULATION OF INTEREST
14.1 Interest
(a) The Debtor shall pay interest on all unpaid amounts of principal and
interest hereunder (including interest on overdue interest), on
demand, from the date such unpaid amount is due until such unpaid
amount is paid in full, calculated at the same rate per annum provided
herein in respect of the Principal Amount. The Debtor shall pay
interest on all other unpaid amounts, on demand, from the date such
unpaid amount is due until such unpaid amount is paid in full,
calculated at 2% over the Prime Rate.
(b) In no event shall any interest or fee to be paid hereunder exceed the
maximum rate permitted by Applicable Law. In the event any such
interest rate or fee exceeds such maximum rate, such rate shall be
adjusted downward to the highest rate (expressed as a percentage per
annum) or fee that the parties could validly
XIII-19
have agreed to by contract on the date hereof under Applicable Law. It
is further agreed that any excess actually received by the Holder
shall be credited against the Principal Amount or, if the Principal
Amount shall have been or would thereby be paid in full, the remaining
amount shall be credited to the Debtor.
(c) All interest (including interest on overdue interest) payable by the
Debtor to the Holder hereunder shall accrue from day to day, computed
as provided herein, and shall be payable after as well as before
maturity, demand, default and judgment.
ARTICLE 15
EFFECTIVE NOTICE
15.1 Notice
Any notice, communication or demand to be made or given hereunder shall be
in writing and may be made or given by personal delivery or by facsimile or
other electronic means of communication addressed as follows:
To the Debtor:
Acheson Industrial Park #0
00000 - Xxxxxxx 00
Xxxxxx Xxxxx, Xxxxxxx X0X 0X0
Attention:President
Facsimile:(000) 000-0000
To the Holder:
Royal Bank of Canada
X.X. Xxx 00, 000 Xxx Xxxxxx
Royal Bank Plaza
12th Floor, South Tower
Toronto, Ontario M5J 2W7
Attention: Manager Agency
Facsimile: (000) 000-0000
or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a Business Day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a Business Day or by facsimile
or other electronic means of communication shall be deemed to have been given on
the first Business Day following the transmittal thereof.
XIII-20
ARTICLE 16
MISCELLANEOUS
16.1 No Merger
Neither the taking of any judgment nor the exercise of any power of seizure
or sale shall operate to extinguish the liability of the Debtor to make payment
of, or to satisfy the Obligations, nor shall the acceptance of any payment or
alternate security constitute or create any novation, and the taking of a
judgment or judgments under any of the covenants herein contained shall not
operate as a merger of such covenants.
16.2 No Discharges Unless Specifically Provided
No postponement or partial release or discharge of the lien hereof in
respect of the Mortgaged Property shall in any way operate or be construed to
release or discharge the security hereby constituted in respect of the Mortgaged
Property which is not released or discharged, or to release or discharge the
Debtor from its liability to the Holder to fully pay and satisfy the
Obligations.
16.3 Payments or Deliveries Due on Non-Business Days
(a) If any payment to be made by the Debtor hereunder shall become due and
payable on a day which is not a Business Day, such payment shall be
made on the immediately following day which is a Business Day, and any
extension of time shall in such case be included in computing interest
payable hereunder relating to such payment. All payments due hereunder
shall be made in immediately available funds before 12:00 p.m.,
Toronto time, on the due date, and if made after 12:00 p.m., Toronto
time, shall be deemed to have been made on the next Business Day.
(b) If any notice, certificate or other document is required to be
delivered by the Debtor hereunder on a day which is not a Business
Day, such delivery may be made on the immediately following day which
is a Business Day.
16.4 Governing Law
(a) THIS DEBENTURE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE
PROVINCE OF ALBERTA AND THE LAW OF CANADA APPLICABLE THEREIN.
(b) The Debtor agrees that the courts of Alberta shall have jurisdiction
to hear and determine any suit, action or proceeding and to settle any
disputes which may arise out of or in connection with the aforesaid
documents and it irrevocably submits to the non-exclusive jurisdiction
of such courts, without prejudice to the rights of the Holder to take
proceedings in any other jurisdictions, whether concurrently or not.
(c) The Debtor agrees that final judgment in any such suit, action or
proceeding brought in such courts shall be conclusive and binding upon
it and may be
XIII-21
enforced against it in the courts of Canada (or any other courts to
the jurisdiction of which it or its property is subject) by a suit
upon such judgment, provided that it does not waive any right to
appeal any such judgment, to seek any stay or otherwise to seek
reconsideration or review of any such judgment.
16.5 Assignment by Debtor
The Debtor shall not and cannot assign its Obligations under this
Debenture, or take any steps or enter into any transaction of any nature which
would have that effect (except as expressly permitted by the Credit Agreement
or, following termination of the Credit Agreement, any Lender Hedge Agreement),
without the prior written consent of the Holder, which may be arbitrarily
withheld. Subject thereto, all Obligations of the Debtor hereunder shall bind
the Debtor and its successors and assigns.
16.6 Time of Essence
Time is of the essence of this Debenture.
16.7 Copy Received
The Debtor acknowledges having received and retained a copy of this
Debenture.
16.8 Waiver of Right to Receive Copy of Statements
To the extent permitted by Applicable Law, the Debtor waives any right it
now has or hereafter may have to receive from the Holder a copy of any financing
statement in which the Debtor is named as a debtor, or a copy of statements used
by a personal property security registry to confirm registration of financing
statements.
16.9 Waiver of Presentment
Except as provided herein and to the extent permitted by Applicable Law,
the Debtor waives presentment of this Debenture for payment, diligence, notice
of non-payment, protest and notice of protest.
16.10 Severability
If one or more of the provisions of this Debenture is, or is adjudged to
be, invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby, and such invalid, illegal or unenforceable
provision shall, to the extent permitted at law, be severable.
16.11 Security in Addition
The security hereby constituted is not in substitution for any other
security for the Obligations, or for any other agreement between the parties
whether or not creating any Lien in the Mortgaged Property whether heretofore or
hereafter made, and such security and such agreement shall be deemed to be
continued and not affected hereby unless expressly provided to the contrary in a
writing signed by the Debtor and the Holder. The taking of any action or
proceedings or refraining from so doing, or any other dealing with any other
security for the Obligations or any part thereof shall not release or affect the
lien hereof and none of the creation
XIII-22
of this Debenture nor the taking of any proceedings hereunder or thereunder for
the realization of the security hereby constituted shall release or affect any
other security held by the Holder for the payment or performance of the
Obligations, but upon the permanent payment in full of the Obligations, this
Debenture shall be released and discharged.
16.12 Waivers and Consents
No waiver of any provision hereof, or consent to any action or inaction
shall be effective unless the same is in writing and signed by the party
granting the same. Such waivers and consents shall not extend to any matters
other than those in respect of which the same were given, and the same may be
subject to such conditions as the party giving the same may stipulate.
16.13 Further Assurances
(a) The Debtor shall promptly cure any defect by it in the execution and
delivery of this Debenture, upon demand by the Holder.
(b) The Debtor, at its expense, shall promptly deliver to the Holder, upon
request by the Holder in writing, all such other and further
documents, agreements, opinions, certificates and instruments
(executed, as necessary) in order to give effect to the covenants and
agreements of the Debtor in this Debenture, and shall make any
recording, file any notice or obtain any consent in connection
therewith, all as may be reasonably necessary or appropriate in
connection therewith.
16.14 Covenants Regarding Saskatchewan Laws
The Debtor agrees with the Holder that:
(a) the Land Contracts (Actions) Act (Saskatchewan) shall have no
application to any action as defined in such Act, with respect to any
mortgage given by the Debtor under this Debenture; and
(b) the Limitation of Civil Rights Act (Saskatchewan) shall have no
application to:
(i) this Debenture;
(ii) any indenture, instrument or agreement entered into by the Debtor
at any time hereafter, supplemental or ancillary to or in
implementation of this Debenture and involving the payment by the
Debtor of money, or the liability of the Debtor to pay money;
(iii) any Lien for the payment of money made, given or created by this
Debenture or by any indenture, instrument or agreement referred
to in paragraph (b)(ii);
(iv) any instrument or agreement entered into by the Debtor at any
time hereafter, renewing or extending or collateral to this
Debenture, renewing or extending or collateral to any indenture,
instrument or agreement
XIII-23
referred to in paragraph (b)(ii), or renewing or extending or
collateral to any Lien referred to in paragraph (b)(iii); or
(v) the rights, powers or remedies of the Holder under this Debenture
or under any Lien or indenture, instrument or agreement referred
to or mentioned in paragraphs (b)(i) to (iv), inclusive.
16.15 British Columbia Land Title Act
For all purposes, including any application to register a crystallized
floating charge under the Land Title Act (British Columbia) against any real
property, the floating charge created by this Debenture shall be crystallized
and become a fixed charge upon the earliest of:
(a) the occurrence of an event described in paragraphs 9.2(b) or 9.2(c)
hereof, or
(b) the Holder making any declaration for payment pursuant to paragraph
9.1 hereof, unless the Holder otherwise states at that time; or
(c) the Holder taking any action pursuant to this Debenture to enforce and
realize upon the lien hereof;
and in any event upon the appointment by the Holder of a Receiver pursuant to
this Debenture.
16.16 Land Titles Act (Alberta), Real Property Act (Manitoba), Land Titles Act,
2000 (Saskatchewan) and Equivalent Provisions of Other Applicable Law
Without limiting the provisions of this Debenture and for the better
securing to the Holder of this Debenture the repayment in manner aforesaid of
the principal amount and interest and other charges, money and Mortgaged
Property secured by this Debenture, the Debtor does hereby mortgage to the
Holder all the Debtor's estate and interest in the Mortgaged Property.
16.17 Composite Mortgage
This Debenture is a composite mortgage and security agreement covering the
property of the Debtor located in the various Provinces of Canada and elsewhere
and, as to portions of the property located in such separate jurisdictions, this
Debenture shall be a separate mortgage and security agreement enforceable
against the Debtor without regard to the application of this Debenture to
portions of the Mortgaged Property located in other jurisdictions. All
provisions hereof shall be applicable separately to the portions of the property
located in each separate jurisdiction with the same effect as if a separate
mortgage and security agreement with respect thereto had been executed and
delivered. Upon the reasonable request of the Holder, the Debtor shall prepare
at its expense a separate mortgage and security agreement covering the portion
of the property located in any such jurisdiction or jurisdictions, such separate
mortgage and security agreement to be substantially in the form of this
Debenture except for such modifications as shall be required by the fact that
such mortgage and security agreement relates only to the property of the Debtor
located in such jurisdiction or jurisdictions or as may be required by the
Holder in connection therewith. The Debtor hereby agrees to execute and deliver
to the Holder all such separate mortgage and security agreements which may be so
requested in form and substance satisfactory to the Holder, and at the request
of the Holder, but at the expense of the Debtor, the Debtor shall ensure the
recordation, registration and filing, and keep recorded, registered and
XIII-24
filed, such separate mortgage and security agreements to the extent required
hereby, so as to make the same valid, binding and enforceable obligations of the
Debtor and to make effective the Lien created hereby and thereby.
16.18 Holder Not Bound To Advance
Neither the execution and delivery nor the registration of this Debenture
shall in itself for any reason whatsoever obligate or bind the Holder to advance
any moneys or, having advanced a portion, in itself obligate the Holder in any
way to advance the balance or any portion thereof, but nevertheless the lien
hereof shall take effect forthwith upon execution of this Debenture and shall
operate as security for the Obligations.
16.19 Holder Exclusively Entitled
The Holder of this Debenture from time to time will be regarded as
exclusively entitled to the benefit of this Debenture, and all Persons may act
accordingly.
16.20 Discharge
Once the Debtor has permanently and indefeasibly satisfied all of the
Obligations, the Holder shall, at the written request and expense of the Debtor,
discharge the lien hereof and execute and deliver to the Debtor such deeds or
other instruments as shall be required to give effect to such discharge, other
than those Obligations which by the terms hereof survive such discharge and any
termination.
16.21 Debenture Lost Or Stolen
If this Debenture is mutilated, lost, stolen or destroyed, the Debtor
shall, upon being furnished with evidence satisfactory to it (acting reasonably)
of such mutilation, loss, theft or destruction, issue and deliver a new
Debenture of like date and tenor as the one mutilated, lost, stolen or
destroyed, in exchange for, in place of and upon cancellation of the mutilated
Debenture, or in lieu of or in substitution for the lost, stolen or destroyed
Debenture.
[Insert the following provision into the Debentures of NACG Acquisition Inc. and
North American Construction Group Inc.:
16.22 Amalgamation of Debtor
The Debtor acknowledges and agrees that (a) forthwith upon consummation of
the Acquisition and following execution of this Debenture, it will amalgamate
with [NACG Acquisition Inc./North American Construction Group Inc.], with the
continuing corporation being North American Construction Group Inc. ("Amalco"),
and (b) immediately upon the issuance of the Certificate of Amalgamation by
Industry Canada, the Debtor's obligations under this Debenture shall continue as
obligations of Amalco, and the property of the Debtor immediately prior to the
amalgamation shall continue to be the property of Amalco and subject to the lien
hereof, Amalco shall be the Debtor hereunder and a party hereto for all purposes
and this Debenture shall remain in full force and effect.
XIII-25
IN WITNESS WHEREOF the Debtor has executed this Debenture.
_
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
XIII-26
SCHEDULE "A" TO THE DEBENTURE
Real Property Descriptions
[insert legal descriptions, including leasehold and other interests in the
real property security]
XIII-27
SCHEDULE "B" TO THE DEBENTURE
Serial Number Goods Descriptions
[insert descriptions and serial numbers]
XIII-28
EXHIBIT XIV
TO CREDIT AGREEMENT
FORM OF SECURITIES PLEDGE AGREEMENT FOR HOLDINGS
SECURITIES PLEDGE AGREEMENT
THIS AGREEMENT made as of November 26, 2003
AMONG:
NACG PREFERRED CORP., a corporation under the laws of Canada
(hereinafter referred to as the "Pledgor")
- and -
ROYAL BANK OF CANADA, for itself and as agent for and on behalf of the
Lenders and the Swap Lenders (hereinafter referred to as the
"Administrative Agent")
- and -
NORTH AMERICAN ENERGY PARTNERS INC., a corporation under the laws of
Canada (hereinafter referred to as the "Company")
WHEREAS the Pledgor has agreed to pledge the Collateral in order to secure the
payment and performance of the Secured Obligations, for which purpose the
Beneficiaries have appointed and authorized the Administrative Agent to act as
their attorney and agent for purposes of holding certain security granted by the
Pledgor.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the foregoing
recitals, the covenants and agreements herein contained and for other good and
valuable consideration (the receipt and adequacy of which are hereby
conclusively acknowledged), the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, unless something in the subject matter or context
otherwise requires, capitalized terms used herein and not otherwise defined in
this Agreement (including the recitals and the preamble hereto) shall have the
meanings as are ascribed to such terms in the Credit Agreement and, in addition:
"Agreement" means this agreement, as amended, modified, supplemented or
restated from time to time in accordance with the provisions hereof.
XIV-1
"Beneficiaries" means Lenders, the Swap Lender and Royal Bank of Canada,
for itself and as agent for and on behalf of the Lenders and the Swap
Lenders from time to time.
"Certificates" means all certificates and instruments evidencing or
representing the Pledged Securities.
"Charge" means the Liens created hereunder.
"Collateral" has the meaning set forth in Section 2.1.
"Credit Agreement" means the Credit Agreement dated as of November 26, 2003
among the Company, as borrower, the Persons party thereto as lenders, Royal
Bank of Canada, as agent, and the other agents, as amended, supplemented or
otherwise modified or restated from time to time.
"Distribution" means:
(a) the declaration, payment or setting aside for payment of any dividend
or distribution on or in respect of any of the Collateral;
(b) the payment, distribution or return of any capital of the Company; or
(c) the redemption, retraction, purchase, retirement or other acquisition,
in whole or in part, of any interests in the capital of the Company or
any securities, instruments, or contractual rights capable of being
converted into, exchanged or exercised for interests in the capital of
the Company.
"Pledged Securities" means all of the shares, options, warrants, rights and
other securities and equity interests that the Pledgor now has or holds or
hereafter has, holds, acquires, possesses or becomes entitled to in the
capital of the Company or its successors.
"Pledgor Guarantee" means the Guarantee dated as of November 26, 2003 made
by the Pledgor in favour of the Beneficiaries, as amended, supplemented or
otherwise modified or restated from time to time.
"PPSA" means the Personal Property Security Act (Alberta), including the
regulations thereunder, as now enacted or as the same may from time to time
be amended, re-enacted or replaced.
"Secured Obligations" means, collectively and at any time and from time to
time, all of the obligations, indebtedness and liabilities (present or
future, absolute or contingent, matured or not) of the Pledgor to the
Beneficiaries or any of them under the Pledgor Guarantee, whether the same
are from time to time reduced and thereafter increased or entirely
extinguished and thereafter incurred again.
"Transfer Documents" means, with respect to the transfer of Certificates or
other Collateral, certificate transfers, powers of attorney or other
instruments of transfer, in each case, executed in blank and in form and
substance as may be required (from time to time) by the Administrative
Agent.
XIV-2
1.2 Personal Property Security Act Definitions
Unless something in the subject matter or context otherwise requires, all
terms defined in the PPSA which are used in this Agreement shall have the
meanings as are ascribed to such terms in the PPSA.
1.3 Interpretation
In this Agreement:
(a) words importing the masculine gender include the feminine and neuter
genders, corporations, partnerships and other Persons, and words in
the singular include the plural, and vice versa, wherever the context
requires;
(b) all references to designated Articles, Sections and other subdivisions
are, unless the context otherwise requires, to be designated Articles,
Sections and other subdivisions of this Agreement;
(c) any reference to a statute will include and will be deemed to be a
reference to the regulations made pursuant to it, and to all
amendments made to the statute and regulations in force from time to
time, and to any statute or regulation that may be passed which has
the effect of supplementing or superseding the statute referred to or
the relevant regulation;
(d) references herein to any document, instrument or agreement means such
document, instrument or agreement as originally executed, as modified,
amended, supplemented or restated from time to time;
(e) the word "include(s)" means "include(s), without limitation", and the
word "including" means "including, but not limited to";
(f) any reference to a Person will include and will be deemed to be a
reference to any Person that is a successor to that Person;
(g) "hereof', "hereto", "herein", and "hereunder" mean and refer to this
Agreement and not to any particular Article, Section or other
subdivision;
(h) the headings are for convenience of reference only, do not form part
of this Agreement and are not to be considered in the interpretation
of this Agreement; and
(i) any schedule hereto is incorporated by reference and shall be deemed
to be part of this Agreement.
ARTICLE 2
PLEDGE
2.1 Pledge
As collateral security for the prompt and complete payment and performance
when due of the Secured Obligations, the Pledgor does hereby pledge,
hypothecate, assign, charge, convey,
XIV-3
set over and transfer unto the Administrative Agent for the benefit of the
Beneficiaries and does hereby grant to the Administrative Agent for the benefit
of the Beneficiaries a continuing security interest in and to, and does hereby
deliver unto the Administrative Agent for the benefit of the Beneficiaries, all
of the right, title and interest of the Pledgor in, to and under the following,
whether now owned or hereafter held, possessed of, entitled to or acquired
(including by way of amalgamation or otherwise) and whether now existing or
hereafter coming into existence (all being collectively referred to herein as
the "Collateral"):
(a) the Pledged Securities;
(b) all Certificates;
(c) all Distributions, whether in shares, other securities, money or
property, received or receivable upon or in respect of the Pledged
Securities and all interest payments and money or other property paid
or payable on account of any return on, or repayment of, capital in
respect of the Pledged Securities or otherwise distributed or
distributable in respect thereof or that will in any way be charged
to, or be payable out of, the capital of the issuer of the Pledged
Securities in respect thereof;
(d) all securities issued in substitution for or in addition to any of the
foregoing, any Certificates representing or evidencing such
securities, and all cash, securities, distributions and other property
at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
foregoing;
(e) all other property that may at any time be received or receivable or
otherwise distributed or distributable to the Pledgor in respect of,
in substitution for, in addition to or in exchange for, any of the
foregoing; and
(f) to the extent not included in the foregoing, all cash and non-cash
proceeds in respect of the foregoing and all rights and interest of
the Pledgor in respect thereof or evidenced thereby including all
money received or receivable from time to time by the Pledgor in
connection with the sale of any of the foregoing (including all
proceeds received or receivable in connection with the redemption or
purchase for cancellation of any of the Pledged Securities).
2.2 Subsequently Acquired Certificates
Any additional Certificates at any time or from time to time after the date
hereof acquired or otherwise held by the Pledgor (by purchase, distribution or
otherwise) shall form part of the Collateral and the Pledgor will: (a) forthwith
deliver such Certificates to the Administrative Agent endorsed for transfer in
blank and/or accompanied by Transfer Documents duly executed in blank by the
Pledgor, and (b) ensure that all actions required to perfect the security
interest therein of the Administrative Agent under any requirement of law
(including under the PPSA or other Applicable Law) are promptly taken.
XIV-4
2.3 Delivery of Collateral; Registration in Name of the Administrative Agent
All Certificates shall be endorsed for transfer in blank and/or accompanied
by Transfer Documents duly executed in blank by the Pledgor, all as satisfactory
to the Administrative Agent, and shall be delivered immediately to the
Administrative Agent or its nominee. Such Certificates and the Pledged
Securities represented thereby shall, at the option of the Administrative Agent,
be registered in the name of the Administrative Agent or its nominee upon the
occurrence of an Event of Default.
2.4 Uncertificated Interests
Notwithstanding anything to the contrary contained in Sections 2.1 and 2.2
above, if any of the Pledged Securities (whether now owned or hereafter
acquired) is not evidenced by a Certificate, the Pledgor shall promptly notify
the Administrative Agent and shall promptly take all actions required to perfect
the Charge under Applicable Law (including under the PPSA). The Pledgor further
agrees to take such actions as the Administrative Agent, acting reasonably,
considers necessary or desirable to effect the foregoing and to permit the
Administrative Agent to exercise any of its rights and remedies hereunder, and
agrees to provide an opinion of counsel satisfactory to the Administrative
Agent, acting reasonably, with respect to any such pledge of uncertificated
interests upon the written request of the Administrative Agent.
2.5 Attachment
The Pledgor acknowledges that value has been given and agrees that the
security interest granted hereby shall attach when the Pledgor signs this
Agreement and the Pledgor has any rights in the Collateral.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties
The Pledgor represents and warrants to each of the Beneficiaries as at the
date hereof as follows:
(a) the Pledgor is the legal and beneficial owner of and has good title to
the Collateral free and clear of all Liens other than the Liens
constituted by the Collateral Documents (and other Permitted
Encumbrances) and all of the Pledged Securities have been validly
issued and are outstanding as fully paid and non-assessable shares;
(b) the Pledgor's entire interest in the capital of the Company as of the
date hereof is accurately described in Schedule A hereto;
(c) this Agreement creates a valid security interest in all of the
Pledgor's Collateral securing the payment of all the Secured
Obligations. The Pledged Securities pledged by the Pledgor hereunder
are, and any securities pledged in substitution therefor or in
addition thereto will be, duly and validly pledged hereunder in
accordance with Applicable Law;
XIV-5
(d) the Pledgor has the right to pledge the Collateral as herein provided;
and
(e) the Pledgor is not a party to any outstanding agreement, option or
contract to sell or otherwise dispose of all or any portion of the
Collateral.
The representations and warranties set out in this Agreement shall survive
the execution and delivery of this Agreement notwithstanding any investigations
or examinations which may be made by any of the Beneficiaries or their legal
counsel. Such representations and warranties shall survive until this Agreement
has been terminated and discharged in accordance with the Credit Agreement.
ARTICLE 4
DEALINGS WITH COLLATERAL AND ADDITIONAL COVENANTS
4.1 Rights and Duties of the Administrative Agent
(a) In the holding of the Collateral, the Administrative Agent and any
nominee on its behalf is only bound to exercise the same degree of
care as it would exercise with respect to similar property of its own
of similar value held in the same place. The Administrative Agent and
any nominee on its behalf will be deemed to have exercised reasonable
care with respect to the custody and preservation of the Collateral if
it takes such action for that purpose as the Pledgor reasonably
requests in writing, but failure of the Administrative Agent or its
nominee to comply with any such request will not of itself be deemed a
failure to exercise reasonable care, so long as the degree of care
required by the immediately preceding sentence has been exercised.
(b) The powers conferred on the Administrative Agent hereunder are solely
to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession as required under Section 4.1(a)
and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral and no such
duties shall be implied as arising hereunder.
4.2 Voting and Other Rights
(a) Subject to any restrictions in the Credit Agreement, unless an Event
of Default has occurred which is continuing, the Pledgor is entitled
to exercise, either directly or, if the Collateral is registered in
the name of the Administrative Agent or its nominee, by power of
attorney or proxy, all the rights and powers of a holder of such
securities including the voting rights from time to time exercisable
in respect of the Collateral and to give proxies, consents and waivers
in respect thereof. No such action may be taken if it would violate or
be inconsistent with this Agreement or any other Loan Document or,
unless otherwise consented to by the Administrative Agent, would have
the effect of imposing any restriction on the transferability of any
of the Collateral.
XIV-6
(b) Upon the occurrence of an Event of Default which is continuing, the
Administrative Agent may give the Pledgor a notice prohibiting the
Pledgor from exercising the rights and powers of a holder of such
securities including the voting rights in respect of the Collateral,
at which time all such rights of the Pledgor will cease immediately
and the Administrative Agent will have the right to exercise the
rights and powers related to such Collateral including the right to
vote.
4.3 Distributions
(a) Subject to any restrictions in the Credit Agreement, unless an Event
of Default has occurred which is continuing:
(i) the Pledgor is entitled to receive all Distributions or other
payments in respect of the Collateral; and
(ii) if the Collateral has been registered in the name of the
Administrative Agent or its nominee, the Administrative Agent
will execute and deliver (or cause to be executed and delivered)
to the Pledgor all directions and other instruments as the
Pledgor may request for the purpose of enabling the Pledgor to
receive the Distributions or other payments that the Pledgor is
authorized to receive pursuant to Section 4.3(a)(i) above.
(b) Upon the occurrence of an Event of Default which is continuing, all
rights of the Pledgor pursuant to Section 4.3(a) will cease and the
Administrative Agent will have the sole and exclusive right and
authority to receive and retain all payments that the Pledgor would
otherwise be authorized to retain pursuant to Section 4.3(a). All
money and other property received by the Administrative Agent pursuant
to the provisions of this Section 4.3(b) may be applied on account of
the Secured Obligations or may be retained by the Administrative Agent
as additional Collateral hereunder and be applied in accordance with
the provisions of this Agreement
4.4 Additional Covenants
The Pledgor agrees that it shall:
(a) not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged
Securities, (ii) create or suffer to exist any Lien upon or with
respect to any of the Pledged Securities, except for Permitted
Encumbrances, or (iii) permit the Company to merge or consolidate
except in accordance with the Credit Agreement and unless all of the
outstanding Securities of the surviving or resulting Person are, upon
such merger or consolidation, pledged hereunder and no cash,
Securities or other property is distributed in respect of the
outstanding Securities of any other constituent Person, unless the
Administrative Agent otherwise consents;
(b) cause the Company not to issue any Securities in addition to or in
substitution for the Pledged Securities issued by the Company, except
to Pledgor;
XIV-7
(c) at its expense (i) perform and comply in all material respects with
all terms and provisions of any agreement related to the Pledged
Securities required to be performed or complied with by it, and (ii)
maintain all such agreements in full force and effect;
(d) give Administrative Agent at least 30 days' prior written notice of
(i) any change in such Pledgor's name, identity or corporate structure
and (ii) any continuance or reorganization or other action that
results in a change of the jurisdiction of organization of Pledgor;
and
(e) promptly deliver to Administrative Agent all material written notices
received by it with respect to the Pledged Securities.
ARTICLE 5
REMEDIES AND REALIZATION
5.1 Remedies of Administrative Agent
(a) On and during the occurrence of an Event of Default that has not been
waived in writing by the Administrative Agent, the Administrative
Agent may, in addition to and without derogating in any way from its
other available rights and remedies provided by Applicable Law,
exercise all the rights and powers of a holder of the Collateral
including:
(i) transfer any part of the Collateral into the name of the
Administrative Agent or its nominee if it has not already done so
in accordance with Section 2.3;
(ii) take such steps as it considers desirable to maintain, preserve
or protect the Collateral;
(iii) exercise any and all rights and remedies of the Pledgor under or
in connection with the Collateral, including exercise voting
rights attaching to the Collateral (whether or not registered in
the name of the Administrative Agent or its nominee) and give or
withhold all consents and waivers in respect thereof;
(iv) exercise all rights of conversion, exchange or subscription, or
any other rights, privileges or options pertaining to any of the
Collateral;
(v) from time to time realize upon, collect, sell, transfer, assign,
give rights or options to purchase or otherwise dispose of and
deliver any Collateral in such manner as may seem advisable to
the Administrative Agent. For such purposes each requirement
relating thereto and prescribed by law or otherwise is hereby
waived by the Pledgor to the extent permitted by Applicable Law
and in any offer or sale of any of the Collateral the
Administrative Agent is authorized to comply with any limitation
or restriction in connection with such offer or sale as the
Administrative Agent may be advised by counsel is necessary in
order to avoid any violation of Applicable Law, or in order to
obtain any required approval of
XIV-8
the sale or of the purchase by any Governmental Authority. Such
compliance will not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner
nor will the Administrative Agent be liable or accountable to the
Pledgor for any discount allowed by reason of the fact that such
Collateral is sold in compliance with any such limitation or
restriction;
(vi) purchase any of the Collateral, whether in connection with a sale
made under the power of sale herein contained or pursuant to
judicial proceedings or otherwise;
(vii) subject to the requirements of Applicable Law, accept the
Collateral in satisfaction or partial satisfaction of the Secured
Obligations upon notice to the Pledgor of its intention to do so
in the manner required by law;
(viii) the Administrative Agent may charge on its own behalf and pay
to others all amounts for reasonable expenses incurred and for
services rendered in connection with the exercise of the rights
and remedies of the Beneficiaries hereunder, including reasonable
legal fees (on a solicitor and his own client basis), and
accounting fees and expenses, and in every such case the amounts
so paid together with all costs, charges and expenses incurred in
connection therewith, including interest thereon at a rate per
annum equal to the Prime Rate plus 2.0% per annum, shall be added
to and form part of the Secured Obligations hereby secured; and
(ix) the Administrative Agent may discharge any claim, Lien,
encumbrance or any rights of others that may exist or be
threatened against the Collateral, and in every such case the
amounts so paid together with all reasonable costs, charges and
expenses incurred in connection therewith shall be added to the
Secured Obligations hereby secured.
(b) The Administrative Agent and the other Beneficiaries may:
(i) grant extensions of time;
(ii) take and perfect or abstain from taking and perfecting security;
(iii) give up securities;
(iv) accept compositions or compromises;
(v) grant releases and discharges; and
(vi) release any part of the Collateral or otherwise deal with the
Pledgor, debtors and creditors of the Pledgor, sureties and
others and with the Collateral and other security as the
Administrative Agent sees fit,
without prejudice to the liability of the Pledgor to the
Administrative Agent and the other Beneficiaries or their rights
hereunder.
XIV-9
(c) The Beneficiaries shall not be liable or responsible for any failure
to seize, collect, realize, or obtain payment with respect to the
Collateral and shall not be bound to institute proceedings or to take
other steps for the purpose of seizing, collecting, realizing or
obtaining possession or payment with respect to the Collateral or for
the purpose of preserving any rights of the Administrative Agent, the
Pledgor or any other Person, in respect of the Collateral.
(d) The Administrative Agent shall apply any proceeds of realization of
the Collateral to payment of reasonable expenses in connection with
the preservation and realization of the Collateral as above described
and the Administrative Agent shall apply any balance of such proceeds
to payment of the Secured Obligations in accordance with the Credit
Agreement. Subject to the requirements of Applicable Law, any surplus
realized in excess of the Secured Obligations shall be paid over to
the Pledgor.
5.2 Power of Attorney
The Pledgor hereby appoints the Administrative Agent as attorney of the
Pledgor, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time in the Administrative
Agent's discretion at any time after the occurrence and during the continuance
of an Event of Default, to take any and all actions authorized or permitted to
be taken by the Administrative Agent under this Agreement or by Applicable Law
and to: (a) execute and deliver all instruments and other documents and do all
such further acts and things as may be reasonably required by the Administrative
Agent enforce the Charge and remedies provided hereunder or to better evidence
and perfect the Charge; and (b) take any action and execute any instrument which
the Administrative Agent, acting reasonably, may deem necessary or advisable to
accomplish the purposes of this Agreement, including, to ask for, demand,
collect, xxx for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in connection with the Collateral, to
receive, endorse, and collect any drafts or other instruments, documents and
chattel paper in connection therewith, and to file any claims or take any action
or institute any proceedings which the Administrative Agent may deem to be
necessary or desirable for the collection thereof. Such appointment of the
Administrative Agent as the Pledgor's attorney is coupled with an interest and
is irrevocable.
ARTICLE 6
GENERAL
6.1 Company as Signatory
The Company hereby consents to the granting of the Charge in and to the
Collateral to the extent required and hereby acknowledges all of the terms and
conditions of this Agreement and covenants and agrees that it shall not act in a
manner inconsistent herewith and shall execute and deliver all instruments and
other documents and do all such further acts and things as may be reasonably
required by the Administrative Agent to effectively carry out the full intent
and meaning of this Agreement, including, when required hereunder, to enforce
the Charge and remedies provided hereunder, or to better evidence and perfect
the Charge. The Company is executing this Agreement solely for the purposes set
forth in the immediately preceding sentence; the agreement of the Company shall
not be required for the amendment of this Agreement unless its obligations under
this Section 6.1 are affected thereby.
XIV-10
6.2 Benefit of the Agreement
This Agreement shall be binding upon the successors and permitted assigns
of the Pledgor and shall benefit the successors and permitted assigns of the
Administrative Agent and other Beneficiaries.
6.3 Conflict of Terms; Entire Agreement
This Agreement has been entered into as collateral security for the Secured
Obligations and is subject to all the terms and conditions of the Credit
Agreement and, if there is any conflict or inconsistency between the provisions
of this Agreement and the provisions of the Credit Agreement, the rights and
obligations of the Pledgor, the Administrative Agent and Beneficiaries shall be
governed by the provisions of the Credit Agreement. This Agreement together with
the Credit Agreement and the other Loan Documents constitute the entire
agreement between the Pledgor and the Administrative Agent with respect to the
subject matter hereof. There are no representations, warranties, terms,
conditions, undertakings or collateral agreements, express, implied or
statutory, between the Beneficiaries and the Pledgor except as expressly set
forth therein and herein.
6.4 Notices
Any demand, notice or other communication to be given in connection with
this Agreement shall be given in writing and may be given by personal delivery,
registered mail, facsimile or other electronic means, addressed to the recipient
as follows:
To the Pledgor:
NACG Preferred Corp.
Acheson Industrial Park #0
00000 - Xxxxxxx 00
Xxxxxx Xxxxx, Xxxxxxx X0X 0X0
Attention: President
Facsimile: (000) 000-0000
To the Administrative Agent:
Royal Bank of Canada, as Administrative Agent
X.X. Xxx 00, 000 Xxx Xxxxxx
Royal Bank Plaza
12th Floor, South Tower
Toronto, Ontario M5J 2W7
Attention: Manager Agency
Facsimile: (000) 000-0000
XIV-11
To the Company:
North American Energy Partners Inc.
Acheson Industrial Park #0
00000 - Xxxxxxx 00
Xxxxxx Xxxxx, Xxxxxxx X0X 0X0
Attention:President
Facsimile:(000) 000-0000
or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a Business Day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a Business Day or by facsimile
or other electronic means of communication shall be deemed to have been given on
the first Business Day following the transmittal thereof.
6.5 Modification; Waivers; Assignment
This Agreement may not be amended or modified in any respect except by
written instrument signed by the Pledgor and the Administrative Agent. No waiver
of any provision of this Agreement by the Administrative Agent shall be
effective unless the same is in writing and signed by the Administrative Agent,
and then such waiver shall be effective only in the specific instance and for
the specific purpose for which it is given. The rights of the Administrative
Agent (including those of any Beneficiary) under this Agreement may only be
assigned in accordance with the requirements of the Credit Agreement. The
Pledgor cannot assign its obligations under this Agreement. Any assignee of a
Beneficiary shall be bound hereby, mutatis mutandis.
6.6 Additional Continuing Security
This Agreement and the Charge granted hereby are in addition to and not in
substitution for any other security now or hereafter held by the Administrative
Agent or the other Beneficiaries and this Agreement is a continuing agreement
and security that shall remain in full force and effect until discharged by the
Administrative Agent.
6.7 Discharge
The Pledgor and the Collateral shall not, unless otherwise required by the
Credit Agreement, be discharged from the Charge or from this Agreement except by
a release or discharge in writing signed by the Administrative Agent upon the
permanent payment in full of the Secured Obligations.
6.8 No Release
Subject to Section 4.1(a), the loss, injury or destruction of any of the
Collateral shall not operate in any manner to release or discharge the Pledgor
from any of its liabilities to the Beneficiaries.
XIV-12
6.9 No Obligation to Act
Notwithstanding any provision of this Agreement or any other Loan Document
or the operation, application or effect hereof, the Administrative Agent, the
other Beneficiaries, or any representative or agent acting for or on behalf of
the foregoing, shall not have any obligation whatsoever to exercise or refrain
from exercising any right, power, privilege or interest hereunder or to receive
or claim any benefit hereunder.
6.10 Admit to Benefit
No Person other than the Pledgor and the Beneficiaries shall have any
rights or benefits under this Agreement, nor is it intended that any such Person
gain any benefit or advantage as a result of this Agreement nor shall this
Agreement constitute a subordination of any security in favour of such Person.
6.11 Time of the Essence
Time shall be of the essence with regard to this Agreement.
6.12 Waiver of Financing Statement, etc.
To the extent permitted by Applicable Law, the Pledgor hereby waives the
right to receive from the Administrative Agent or the other Beneficiaries a copy
of any financing statement, financing change statement or other statement or
document filed or registered at any time in respect of this Agreement or any
verification statement or other statement or document issued by any registry
that confirms or evidences registration of or relates to this Agreement.
6.13 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the Province of Alberta and the laws of Canada applicable therein.
6.14 Attornment
The Pledgor, the Administrative Agent and each of the other Beneficiaries
each hereby attorn and submit to the jurisdiction of the courts of the Province
of Alberta. For the purpose of all legal proceedings, this Agreement shall be
deemed to have been performed in the Province of Alberta and the courts of the
Province of Alberta shall have jurisdiction to entertain any action or
proceeding arising under this Agreement. Notwithstanding the foregoing, nothing
herein shall be construed nor operate to limit the right of the Pledgor, the
Administrative Agent or any other Beneficiary to commence any action or
proceeding relating hereto in any other jurisdiction, nor to limit the right of
the courts of any other jurisdiction to take jurisdiction over any action,
proceeding or matter relating hereto.
6.15 Executed Copy
The Pledgor hereby acknowledges receipt of a fully executed copy of this
Agreement.
XIV-13
6.16 Counterparts
This Agreement may be executed in any number of 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, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.
IN WITNESS WHEREOF the parties hereto have executed this Agreement
effective as of the date hereof.
PLEDGOR:
NACG PREFERRED CORP.
By:
---------------------------------------------
Name:
Title:
COMPANY:
NORTH AMERICAN ENERGY PARTNERS INC.
By:
---------------------------------------------
Name:
Title:
AGENT:
ROYAL BANK OF CANADA, as Administrative Agent
By:
---------------------------------------------
Name:
Title:
By:
---------------------------------------------
Name:
Title:
XIV-14
SCHEDULE A
TO THE SECURITIES PLEDGE AGREEMENT FOR HOLDINGS
DESCRIPTION OF PLEDGOR'S INTEREST IN COMPANY
--------------------------------------------------------------------------------
Name of Company:
--------------------------------------------------------------------------------
Issued Share Capital:
--------------------------------------------------------------------------------
Share Certificates and
Transfer Documents:
--------------------------------------------------------------------------------
XIV-15
EXHIBIT XV
TO CREDIT AGREEMENT
FORM OF SECURITIES PLEDGE AGREEMENT
FOR THE BORROWER
SECURITIES PLEDGE AGREEMENT
THIS AGREEMENT made as of November 26, 2003
AMONG:
NORTH AMERICAN ENERGY PARTNERS INC., a corporation under the laws of
Canada (the "Pledgor")
- and -
ROYAL BANK OF CANADA, for itself and as agent for and on behalf of the
Lenders and the Swap Lenders (hereinafter referred to as the
"Administrative Agent")
- and -
THE SUBSIDIARIES OF THE PLEDGOR WHO ARE OR FROM TIME TO TIME BECOME
PARTY HERETO
WHEREAS the Pledgor has agreed to pledge the Collateral in order to secure the
payment and performance of the Secured Obligations, for which purpose the
Beneficiaries have appointed and authorized the Administrative Agent to act as
their attorney and agent for purposes of holding certain security granted by the
Pledgor.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the foregoing
recitals, the covenants and agreements herein contained and for other good and
valuable consideration (the receipt and adequacy of which are hereby
conclusively acknowledged), the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, unless something in the subject matter or context
otherwise requires, capitalized terms used herein and not otherwise defined in
this Agreement (including the recitals and the preamble hereto) shall have the
meanings as are ascribed to such terms in the Credit Agreement and, in addition:
"Agreement" means this agreement, as amended, modified, supplemented or
restated from time to time in accordance with the provisions hereof.
XV-1
"Beneficiaries" means the Lenders, the Swap Lenders and Royal Bank of
Canada, for itself and as agent for and on behalf of the Lenders and the
Swap Lenders from time to time.
"Certificates" means all certificates and instruments evidencing or
representing the Pledged Securities.
"Charge" means the Liens created hereunder.
"Collateral" has the meaning set forth in Section 2.1.
"Credit Agreement" means the Credit Agreement dated as of November 26, 2003
among the Pledgor, as borrower, the Persons party thereto as lenders, Royal
Bank of Canada, as agent, and the other agents, as amended, supplemented or
otherwise modified or restated from time to time.
"Distribution" means:
(a) the declaration, payment or setting aside for payment of any dividend
or distribution on or in respect of any of the Collateral;
(b) the payment, distribution or return of any capital of any Subsidiary;
or
(c) the redemption, retraction, purchase, retirement or other acquisition,
in whole or in part, of any interests in the capital of any Subsidiary
or any securities, instruments, or contractual rights capable of being
converted into, exchanged or exercised for interests in the capital of
any Subsidiary.
"Pledged Securities" means all of the shares, options, warrants, rights and
other securities and equity interests that the Pledgor now has or holds or
hereafter has, holds, acquires, possesses or becomes entitled to in the
capital of its Subsidiaries or their successors.
"PPSA" means the Personal Property Security Act (Alberta), including the
regulations thereunder, as now enacted or as the same may from time to time
be amended, re-enacted or replaced.
"Secured Obligations" means, collectively and at any time and from time to
time, all of the Obligations and the Secured Swap Obligations (present or
future, absolute or contingent, matured or not), whether the same are from
time to time reduced and thereafter increased or entirely extinguished and
thereafter incurred again.
"Subsidiary" means, with respect to the Pledgor, any corporation,
partnership, trust, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power
of shares of stock or other ownership interests entitled (without regard to
the occurrence of any contingency) to vote in the election of the members
of the Governing Body is at the time owned or controlled, directly or
indirectly, by the Pledgor or one or more of the other Subsidiaries of the
Pledgor or a combination thereof;
XV-2
"Transfer Documents" means, with respect to the transfer of Certificates or
other Collateral, certificate transfers, powers of attorney or other
instruments of transfer, in each case, executed in blank and in form and
substance as may be required (from time to time) by the Administrative
Agent.
1.2 Personal Property Security Act Definitions
Unless something in the subject matter or context otherwise requires, all
terms defined in the PPSA which are used in this Agreement shall have the
meanings as are ascribed to such terms in the PPSA.
1.3 Interpretation
In this Agreement:
(a) words importing the masculine gender include the feminine and neuter
genders, corporations, partnerships and other Persons, and words in
the singular include the plural, and vice versa, wherever the context
requires;
(b) all references to designated Articles, Sections and other subdivisions
are, unless the context otherwise requires, to be designated Articles,
Sections and other subdivisions of this Agreement;
(c) any reference to a statute will include and will be deemed to be a
reference to the regulations made pursuant to it, and to all
amendments made to the statute and regulations in force from time to
time, and to any statute or regulation that may be passed which has
the effect of supplementing or superseding the statute referred to or
the relevant regulation;
(d) references herein to any document, instrument or agreement means such
document, instrument or agreement as originally executed, as modified,
amended, supplemented or restated from time to time;
(e) the word "include(s)" means "include(s), without limitation", and the
word "including" means "including, but not limited to";
(f) any reference to a Person will include and will be deemed to be a
reference to any Person that is a successor to that Person;
(g) "hereof', "hereto", "herein", and "hereunder" mean and refer to this
Agreement and not to any particular Article, Section or other
subdivision;
(h) the headings are for convenience of reference only, do not form part
of this Agreement and are not to be considered in the interpretation
of this Agreement; and
(i) any schedule hereto is incorporated by reference and shall be deemed
to be part of this Agreement.
XV-3
ARTICLE 2
PLEDGE
2.1 Pledge
As collateral security for the prompt and complete payment and performance
when due of the Secured Obligations, the Pledgor does hereby pledge,
hypothecate, assign, charge, convey, set over and transfer unto the
Administrative Agent for the benefit of the Beneficiaries and does hereby grant
to the Administrative Agent for the benefit of the Beneficiaries a continuing
security interest in and to, and does hereby deliver unto the Administrative
Agent for the benefit of the Beneficiaries, all of the right, title and interest
of the Pledgor in, to and under the following, whether now owned or hereafter
held, possessed of, entitled to or acquired (including by way of amalgamation or
otherwise) and whether now existing or hereafter coming into existence (all
being collectively referred to herein as the "Collateral"):
(a) the Pledged Securities;
(b) all Certificates;
(c) all Distributions, whether in shares, other securities, money or
property, received or receivable upon or in respect of the Pledged
Securities and all interest payments and money or other property paid
or payable on account of any return on, or repayment of, capital in
respect of the Pledged Securities or otherwise distributed or
distributable in respect thereof or that will in any way be charged
to, or be payable out of, the capital of the issuer of the Pledged
Securities in respect thereof;
(d) all securities issued in substitution for or in addition to any of the
foregoing, any Certificates representing or evidencing such
securities, and all cash, securities, distributions and other property
at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
foregoing;
(e) all other property that may at any time be received or receivable or
otherwise distributed or distributable to the Pledgor in respect of,
in substitution for, in addition to or in exchange for, any of the
foregoing; and
(f) to the extent not included in the foregoing, all cash and non-cash
proceeds in respect of the foregoing and all rights and interest of
the Pledgor in respect thereof or evidenced thereby including all
money received or receivable from time to time by the Pledgor in
connection with the sale of any of the foregoing (including all
proceeds received or receivable in connection with the redemption or
purchase for cancellation of any of the Pledged Securities).
2.2 Subsequently Acquired Certificates
Any additional Certificates at any time or from time to time after the date
hereof acquired or otherwise held by the Pledgor (by purchase, distribution or
otherwise), including any Certificates representing Pledged Securities of a
Subsidiary created, formed or acquired after the date hereof, shall form part of
the Collateral and the Pledgor will: (a) forthwith deliver such
XV-4
Certificates to the Administrative Agent endorsed for transfer in blank and/or
accompanied by Transfer Documents duly executed in blank by the Pledgor, and (b)
ensure that all actions required to perfect the security interest therein of the
Administrative Agent under any requirement of law (including under the PPSA or
other Applicable Law) are promptly taken.
2.3 Delivery of Collateral; Registration in Name of the Administrative Agent
All Certificates shall be endorsed for transfer in blank and/or accompanied
by Transfer Documents duly executed in blank by the Pledgor, all as satisfactory
to the Administrative Agent, and shall be delivered immediately to the
Administrative Agent or its nominee. Such Certificates and the Pledged
Securities represented thereby shall, at the option of the Administrative Agent,
be registered in the name of the Administrative Agent or its nominee upon the
occurrence of an Event of Default.
2.4 Uncertificated Interests
Notwithstanding anything to the contrary contained in Sections 2.1 and 2.2
above, if any of the Pledged Securities (whether now owned or hereafter
acquired) is not evidenced by a Certificate, the Pledgor shall promptly notify
the Administrative Agent and shall promptly take all actions required to perfect
the Charge under Applicable Law (including under the PPSA). The Pledgor further
agrees to take such actions as the Administrative Agent, acting reasonably,
considers necessary or desirable to effect the foregoing and to permit the
Administrative Agent to exercise any of its rights and remedies hereunder, and
agrees to provide an opinion of counsel satisfactory to the Administrative
Agent, acting reasonably, with respect to any such pledge of uncertificated
interests upon the written request of the Administrative Agent.
2.5 Attachment
The Pledgor acknowledges that value has been given and agrees that the
security interest granted hereby shall attach when the Pledgor signs this
Agreement and the Pledgor has any rights in the Collateral.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties
The Pledgor represents and warrants to each of the Beneficiaries as at the
date hereof as follows:
(a) the Pledgor is the legal and beneficial owner of and has good title to
the Collateral free and clear of all Liens other than the Liens
constituted by the Collateral Documents (and other Permitted
Encumbrances) and all of the Pledged Securities have been validly
issued and are outstanding as fully paid and non-assessable shares;
(b) the Pledgor's entire interest in the capital of each of the
Subsidiaries as of the date hereof is accurately described in Schedule
B hereto;
XV-5
(c) this Agreement creates a valid security interest in all of the
Pledgor's Collateral securing the payment of all the Secured
Obligations. The Pledged Securities pledged by the Pledgor hereunder
are, and any securities pledged in substitution therefor or in
addition thereto will be, duly and validly pledged hereunder in
accordance with Applicable Law;
(d) the Pledgor has the right to pledge the Collateral as herein provided;
and
(e) the Pledgor is not a party to any outstanding agreement, option or
contract to sell or otherwise dispose of all or any portion of the
Collateral.
The representations and warranties set out in this Agreement shall survive
the execution and delivery of this Agreement notwithstanding any investigations
or examinations which may be made by any of the Beneficiaries or their legal
counsel. Such representations and warranties shall survive until this Agreement
has been terminated and discharged in accordance with the Credit Agreement.
ARTICLE 4
DEALINGS WITH COLLATERAL AND ADDITIONAL COVENANTS
4.1 Rights and Duties of the Administrative Agent
(a) In the holding of the Collateral, the Administrative Agent and any
nominee on its behalf is only bound to exercise the same degree of
care as it would exercise with respect to similar property of its own
of similar value held in the same place. The Administrative Agent and
any nominee on its behalf will be deemed to have exercised reasonable
care with respect to the custody and preservation of the Collateral if
it takes such action for that purpose as the Pledgor reasonably
requests in writing, but failure of the Administrative Agent or its
nominee to comply with any such request will not of itself be deemed a
failure to exercise reasonable care, so long as the degree of care
required by the immediately preceding sentence has been exercised.
(b) The powers conferred on the Administrative Agent hereunder are solely
to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession as required under Section 4.1(a)
and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral and no such
duties shall be implied as arising hereunder.
4.2 Voting and Other Rights
(a) Subject to any restrictions in the Credit Agreement, unless an Event
of Default has occurred which is continuing, the Pledgor is entitled
to exercise, either directly or, if the Collateral is registered in
the name of the Administrative Agent or its nominee, by power of
attorney or proxy, all the rights and powers of a holder of such
securities including the voting rights from time to time exercisable
in respect of the Collateral and to give proxies, consents and waivers
in respect
XV-6
thereof. No such action may be taken if it would violate or be
inconsistent with this Agreement or any other Loan Document or, unless
otherwise consented to by the Administrative Agent, would have the
effect of imposing any restriction on the transferability of any of
the Collateral.
(b) Upon the occurrence of an Event of Default which is continuing, the
Administrative Agent may give the Pledgor a notice prohibiting the
Pledgor from exercising the rights and powers of a holder of such
securities including the voting rights in respect of the Collateral,
at which time all such rights of the Pledgor will cease immediately
and the Administrative Agent will have the right to exercise the
rights and powers related to such Collateral including the right to
vote.
4.3 Distributions
(a) Subject to any restrictions in the Credit Agreement, unless an Event
of Default has occurred which is continuing:
(i) the Pledgor is entitled to receive all Distributions or other
payments in respect of the Collateral; and
(ii) if the Collateral has been registered in the name of the
Administrative Agent or its nominee, the Administrative Agent
will execute and deliver (or cause to be executed and delivered)
to the Pledgor all directions and other instruments as the
Pledgor may request for the purpose of enabling the Pledgor to
receive the Distributions or other payments that the Pledgor is
authorized to receive pursuant to Section 4.3(a)(i) above.
(b) Upon the occurrence of an Event of Default which is continuing, all
rights of the Pledgor pursuant to Section 4.3(a) will cease and the
Administrative Agent will have the sole and exclusive right and
authority to receive and retain all payments that the Pledgor would
otherwise be authorized to retain pursuant to Section 4.3(a). All
money and other property received by the Administrative Agent pursuant
to the provisions of this Section 4.3(b) may be applied on account of
the Secured Obligations or may be retained by the Administrative Agent
as additional Collateral hereunder and be applied in accordance with
the provisions of this Agreement.
4.4 Additional Covenants
The Pledgor agrees that it shall:
(a) not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged
Securities, (ii) create or suffer to exist any Lien upon or with
respect to any of the Pledged Securities, except for Permitted
Encumbrances, or (iii) permit any Subsidiary to merge or consolidate
except in accordance with the Credit Agreement and unless all of the
outstanding Securities of the surviving or resulting Person are, upon
such merger or consolidation, pledged hereunder and no cash,
Securities or other property is
XV-7
distributed in respect of the outstanding Securities of any other
constituent Person, unless the Administrative Agent otherwise
consents;
(b) cause each Subsidiary not to issue any Securities in addition to or in
substitution for the Pledged Securities issued by such Subsidiary,
except to Pledgor;
(c) at its expense (i) perform and comply in all material respects with
all terms and provisions of any agreement related to the Pledged
Securities required to be performed or complied with by it, and (ii)
maintain all such agreements in full force and effect;
(d) give Administrative Agent at least 30 days' prior written notice of
(i) any change in such Pledgor's name, identity or corporate structure
and (ii) any continuance or reorganization or other action that
results in a change of the jurisdiction of organization of Pledgor;
and
(e) promptly deliver to Administrative Agent all material written notices
received by it with respect to the Pledged Securities.
ARTICLE 5
REMEDIES AND REALIZATION
5.1 Remedies of Administrative Agent
(a) On and during the occurrence of an Event of Default that has not been
waived in writing by the Administrative Agent, the Administrative
Agent may, in addition to and without derogating in any way from its
other available rights and remedies provided by Applicable Law,
exercise all the rights and powers of a holder of the Collateral
including:
(i) transfer any part of the Collateral into the name of the
Administrative Agent or its nominee if it has not already done so
in accordance with Section 2.3;
(ii) take such steps as it considers desirable to maintain, preserve
or protect the Collateral;
(iii) exercise any and all rights and remedies of the Pledgor under or
in connection with the Collateral, including exercise voting
rights attaching to the Collateral (whether or not registered in
the name of the Administrative Agent or its nominee) and give or
withhold all consents and waivers in respect thereof;
(iv) exercise all rights of conversion, exchange or subscription, or
any other rights, privileges or options pertaining to any of the
Collateral;
(v) from time to time realize upon, collect, sell, transfer, assign,
give rights or options to purchase or otherwise dispose of and
deliver any Collateral in such manner as may seem advisable to
the Administrative Agent. For such purposes each requirement
relating thereto and prescribed by law or
XV-8
otherwise is hereby waived by the Pledgor to the extent permitted
by Applicable Law and in any offer or sale of any of the
Collateral the Administrative Agent is authorized to comply with
any limitation or restriction in connection with such offer or
sale as the Administrative Agent may be advised by counsel is
necessary in order to avoid any violation of Applicable Law, or
in order to obtain any required approval of the sale or of the
purchase by any Governmental Authority. Such compliance will not
result in such sale being considered or deemed not to have been
made in a commercially reasonable manner nor will the
Administrative Agent be liable or accountable to the Pledgor for
any discount allowed by reason of the fact that such Collateral
is sold in compliance with any such limitation or restriction;
(vi) purchase any of the Collateral, whether in connection with a sale
made under the power of sale herein contained or pursuant to
judicial proceedings or otherwise;
(vii) subject to the requirements of Applicable Law, accept the
Collateral in satisfaction or partial satisfaction of the Secured
Obligations upon notice to the Pledgor of its intention to do so
in the manner required by law;
(viii) the Administrative Agent may charge on its own behalf and pay
to others all amounts for reasonable expenses incurred and for
services rendered in connection with the exercise of the rights
and remedies of the Beneficiaries hereunder, including reasonable
legal fees (on a solicitor and his own client basis), and
accounting fees and expenses, and in every such case the amounts
so paid together with all costs, charges and expenses incurred in
connection therewith, including interest thereon at a rate per
annum equal to the Prime Rate plus 2.0% per annum, shall be added
to and form part of the Secured Obligations hereby secured; and
(ix) the Administrative Agent may discharge any claim, Lien,
encumbrance or any rights of others that may exist or be
threatened against the Collateral, and in every such case the
amounts so paid together with all reasonable costs, charges and
expenses incurred in connection therewith shall be added to the
Secured Obligations hereby secured.
(b) The Administrative Agent and the other Beneficiaries may:
(i) grant extensions of time;
(ii) take and perfect or abstain from taking and perfecting security;
(iii) give up securities;
(iv) accept compositions or compromises;
(v) grant releases and discharges; and
XV-9
(vi) release any part of the Collateral or otherwise deal with the
Pledgor, debtors and creditors of the Pledgor, sureties and
others and with the Collateral and other security as the
Administrative Agent sees fit,
without prejudice to the liability of the Pledgor to the
Administrative Agent and the other Beneficiaries or their rights
hereunder.
(c) The Beneficiaries shall not be liable or responsible for any failure
to seize, collect, realize, or obtain payment with respect to the
Collateral and shall not be bound to institute proceedings or to take
other steps for the purpose of seizing, collecting, realizing or
obtaining possession or payment with respect to the Collateral or for
the purpose of preserving any rights of the Administrative Agent, the
Pledgor or any other Person, in respect of the Collateral.
(d) The Administrative Agent shall apply any proceeds of realization of
the Collateral to payment of reasonable expenses in connection with
the preservation and realization of the Collateral as above described
and the Administrative Agent shall apply any balance of such proceeds
to payment of the Secured Obligations in accordance with the Credit
Agreement. Subject to the requirements of Applicable Law, any surplus
realized in excess of the Secured Obligations shall be paid over to
the Pledgor.
5.2 Power of Attorney
The Pledgor hereby appoints the Administrative Agent as attorney of the
Pledgor, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time in the Administrative
Agent's discretion at any time after the occurrence and during the continuance
of an Event of Default, to take any and all actions authorized or permitted to
be taken by the Administrative Agent under this Agreement or by Applicable Law
and to: (a) execute and deliver all instruments and other documents and do all
such further acts and things as may be reasonably required by the Administrative
Agent enforce the Charge and remedies provided hereunder or to better evidence
and perfect the Charge; and (b) take any action and execute any instrument which
the Administrative Agent, acting reasonably, may deem necessary or advisable to
accomplish the purposes of this Agreement, including, to ask for, demand,
collect, xxx for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in connection with the Collateral, to
receive, endorse, and collect any drafts or other instruments, documents and
chattel paper in connection therewith, and to file any claims or take any action
or institute any proceedings which the Administrative Agent may deem to be
necessary or desirable for the collection thereof. Such appointment of the
Administrative Agent as the Pledgor's attorney is coupled with an interest and
is irrevocable.
ARTICLE 6
GENERAL
6.1 Subsidiaries as Signatories
Each of the Subsidiaries party hereto hereby consents to the granting of
the Charge in and to the Collateral to the extent required and hereby
acknowledges all of the terms and conditions of this Agreement and covenants and
agrees that it shall not act in a manner inconsistent
XV-10
herewith and shall execute and deliver all instruments and other documents and
do all such further acts and things as may be reasonably required by the
Administrative Agent to effectively carry out the full intent and meaning of
this Agreement, including, when required hereunder, to enforce the Charge and
remedies provided hereunder or to better evidence and perfect the Charge. The
Subsidiaries are executing this Agreement solely for the purposes set forth in
the immediately preceding sentence; the agreement of the Subsidiaries shall not
be required for the amendment of this Agreement unless its obligations under
this Section 6.1 are affected thereby.
6.2 New Subsidiaries
If the Pledgor creates, forms or acquires a Subsidiary that is not a party
to this Agreement, the Pledgor shall promptly after the new Subsidiary is
created, formed or acquired:
(a) deliver the Certificates representing the Pledged Securities of such
new Subsidiary, together with the appropriate Transfer Documents, to
the Administrative Agent and take such other action as required by
Section 2.2 hereof; and
(b) cause such new Subsidiary to become a party to and be bound by this
Agreement by executing and delivering to the Administrative Agent an
Addition Agreement substantially in the form of Schedule "A".
6.3 Benefit of the Agreement
This Agreement shall be binding upon the successors and permitted assigns
of the Pledgor and shall benefit the successors and permitted assigns of the
Administrative Agent and other Beneficiaries.
6.4 Conflict of Terms; Entire Agreement
This Agreement has been entered into as collateral security for the Secured
Obligations and is subject to all the terms and conditions of the Credit
Agreement and, if there is any conflict or inconsistency between the provisions
of this Agreement and the provisions of the Credit Agreement, the rights and
obligations of the Pledgor, the Administrative Agent and Beneficiaries shall be
governed by the provisions of the Credit Agreement. This Agreement together with
the Credit Agreement and the other Loan Documents constitute the entire
agreement between the Pledgor and the Administrative Agent with respect to the
subject matter hereof. There are no representations, warranties, terms,
conditions, undertakings or collateral agreements, express, implied or
statutory, between the Beneficiaries and the Pledgor except as expressly set
forth therein and herein.
6.5 Notices
Any demand, notice or other communication to be given in connection with
this Agreement shall be given in writing and may be given by personal delivery,
registered mail, facsimile or other electronic means, addressed to the recipient
as follows:
XV-11
To the Pledgor:
Xxxxxxx Industrial Park #0
00000 - Xxxxxxx 00
Xxxxxx Xxxxx, Xxxxxxx X0X 0X0
Attention:President
Facsimile:(000) 000-0000
To the Administrative Agent:
Royal Bank of Canada, as Administrative Agent
X.X. Xxx 00, 000 Xxx Xxxxxx
Royal Bank Plaza
12th Floor, South Tower
Toronto, Ontario M5J 2W7
Attention: Manager Agency
Facsimile: (000) 000-0000
To a Subsidiary:
At the Pledgor's address noted above (or at such other address indicated in
a Subsidiary's Addition Agreement provided pursuant to Section 6.2 or other
notice in writing)
or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a Business Day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a Business Day or by facsimile
or other electronic means of communication shall be deemed to have been given on
the first Business Day following the transmittal thereof.
6.6 Modification; Waivers; Assignment
This Agreement may not be amended or modified in any respect except by
written instrument signed by the Pledgor and the Administrative Agent. No waiver
of any provision of this Agreement by the Administrative Agent shall be
effective unless the same is in writing and signed by the Administrative Agent,
and then such waiver shall be effective only in the specific instance and for
the specific purpose for which it is given. The rights of the Administrative
Agent (including those of any Beneficiary) under this Agreement may only be
assigned in accordance with the requirements of the Credit Agreement. The
Pledgor cannot assign its obligations under this Agreement. Any assignee of a
Beneficiary shall be bound hereby, mutatis mutandis.
6.7 Additional Continuing Security
This Agreement and the Charge granted hereby are in addition to and not in
substitution for any other security now or hereafter held by the Administrative
Agent or the other
XV-12
Beneficiaries and this Agreement is a continuing agreement and security that
shall remain in full force and effect until discharged by the Administrative
Agent.
6.8 Discharge
The Pledgor and the Collateral shall not, unless otherwise required by the
Credit Agreement, be discharged from the Charge or from this Agreement except by
a release or discharge in writing signed by the Administrative Agent upon the
permanent payment in full of the Secured Obligations.
6.9 No Release
Subject to Section 4.1(a), the loss, injury or destruction of any of the
Collateral shall not operate in any manner to release or discharge the Pledgor
from any of its liabilities to the Beneficiaries.
6.10 No Obligation to Act
Notwithstanding any provision of this Agreement or any other Loan Document
or the operation, application or effect hereof, the Administrative Agent, the
other Beneficiaries, or any representative or agent acting for or on behalf of
the foregoing, shall not have any obligation whatsoever to exercise or refrain
from exercising any right, power, privilege or interest hereunder or to receive
or claim any benefit hereunder.
6.11 Admit to Benefit
No Person other than the Pledgor and the Beneficiaries shall have any
rights or benefits under this Agreement, nor is it intended that any such Person
gain any benefit or advantage as a result of this Agreement nor shall this
Agreement constitute a subordination of any security in favour of such Person.
6.12 Time of the Essence
Time shall be of the essence with regard to this Agreement.
6.13 Waiver of Financing Statement, etc.
To the extent permitted by Applicable Law, the Pledgor hereby waives the
right to receive from the Administrative Agent or the other Beneficiaries a copy
of any financing statement, financing change statement or other statement or
document filed or registered at any time in respect of this Agreement or any
verification statement or other statement or document issued by any registry
that confirms or evidences registration of or relates to this Agreement.
6.14 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the Province of Alberta and the laws of Canada applicable therein.
XV-13
6.15 Attornment
The Pledgor, the Administrative Agent and each of the other Beneficiaries
each hereby attorn and submit to the jurisdiction of the courts of the Province
of Alberta. For the purpose of all legal proceedings, this Agreement shall be
deemed to have been performed in the Province of Alberta and the courts of the
Province of Alberta shall have jurisdiction to entertain any action or
proceeding arising under this Agreement. Notwithstanding the foregoing, nothing
herein shall be construed nor operate to limit the right of the Pledgor, the
Administrative Agent or any other Beneficiary to commence any action or
proceeding relating hereto in any other jurisdiction, nor to limit the right of
the courts of any other jurisdiction to take jurisdiction over any action,
proceeding or matter relating hereto.
6.16 Executed Copy
The Pledgor hereby acknowledges receipt of a fully executed copy of this
Agreement.
6.17 Counterparts
This Agreement may be executed in any number of 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, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.
6.18 Amalgamation of Subsidiaries
The Pledgor acknowledges and agrees that (a) forthwith upon consummation of
the Acquisition and following execution of this Agreement, NACG Acquisition Inc.
and North American Construction Group Inc. will amalgamate, with the continuing
corporation being North American Construction Group Inc. ("Amalco"), and (b)
immediately upon the issuance of the Certificate of Amalgamation by Industry
Canada, all Securities of Amalco held by the Pledgor shall become Pledged
Securities hereunder and the Pledgor shall deliver to the Administrative Agent
all Certificates representing such Pledged Securities endorsed for transfer in
blank and/or accompanied by Transfer Documents duly executed in blank by the
Pledgor, and (c) Amalco shall be a Subsidiary hereunder and a party hereto for
all purposes and this Agreement shall remain in full force and effect.
XV-14
IN WITNESS WHEREOF the parties hereto have executed this Agreement effective as
of the date hereof.
PLEDGOR:
NORTH AMERICAN ENERGY PARTNERS INC.
By:
----------------------------------------------
Name:
Title:
SUBSIDIARIES:
NACG ACQUISITION INC.
By:
----------------------------------------------
Name:
Title:
NACG FINANCE LLC
By:
----------------------------------------------
Name:
Title:
AGENT:
ROYAL BANK OF CANADA, as Administrative Agent
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
XV-15
SCHEDULE A
TO THE SECURITIES PLEDGE AGREEMENT
FORM OF ADDITION AGREEMENT
ADDITION AGREEMENT
This Agreement is made as of _, 200_
BY:
[_], a corporation under the laws of _ (the "New Subsidiary").
IN FAVOUR OF:
ROYAL BANK OF CANADA, for itself and as agent for and on
behalf of the Lenders and the Swap Lenders (hereinafter
referred to as the "Administrative Agent")
WHEREAS pursuant to the Securities Pledge Agreement, the Pledgor is required to
cause any new Subsidiary to be added as a party to the Securities Pledge
Agreement by causing such new Subsidiary to execute this Addition Agreement;
AND WHEREAS the New Subsidiary has agreed to be bound by the Securities Pledge
Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the foregoing
recitals, the covenants and agreements herein contained and for other good and
valuable consideration (the receipt and adequacy of which are hereby
conclusively acknowledged), the New Subsidiary agrees as follows:
1. Reference to Securities Pledge Agreement
(a) This Addition Agreement relates to the Securities Pledge Agreement
dated as of November 26, 2003 among North American Energy Partners
Inc., as pledgor, the Administrative Agent, and the Subsidiaries party
thereto, as amended, modified, supplemented, restated or replaced in
accordance with the provisions thereof (the "Securities Pledge
Agreement").
(b) Capitalized terms used herein (including in the recitals and the
preamble hereto) and not otherwise defined herein shall have the same
meanings as are ascribed thereto in the Securities Pledge Agreement.
2. Addition
Effective as of _, 200_ (the "Addition Date"), the New Subsidiary shall
become a party to the Securities Pledge Agreement as fully as if it had
been an original signatory thereunder, and shall have all of the
obligations of a Subsidiary under the Securities
XV-16
Pledge Agreement, including those set forth in Section 6.1 of the
Securities Pledge Agreement.
3. Notice
Any notice or other communication to the New Subsidiary in connection with
this Agreement or the Securities Pledge Agreement shall be deemed to be
delivered if delivered in the manner set forth in Section 6.4 of the
Securities Pledge Agreement at the following address:
_
[address]
Attention: _
Facsimile: _
4. Governing Law
This Agreement shall be governed by and interpreted in accordance with the
laws of the Province of Alberta and the laws of Canada applicable therein
and shall be treated in all respects as an Alberta contract.
IN WITNESS WHEREOF the New Subsidiary has executed this Agreement as of the
date first written above.
_
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
XV-17
SCHEDULE B
TO THE SECURITIES PLEDGE AGREEMENT FOR THE BORROWER
DESCRIPTION OF PLEDGOR'S INTEREST IN SUBSIDIARIES
--------------------------------------------------------------------------------
Name of Subsidiary:
--------------------------------------------------------------------------------
Issued Share Capital:
--------------------------------------------------------------------------------
Share Certificates and
Transfer Documents:
--------------------------------------------------------------------------------
XV-18
EXHIBIT XVI
TO CREDIT AGREEMENT
FORM OF SECURITIES PLEDGE AGREEMENT
FOR SUBSIDIARIES OF THE BORROWER
SECURITIES PLEDGE AGREEMENT
THIS AGREEMENT made as of November 26, 2003
AMONG:
[INSERT NAME OF SUBSIDIARY], a corporation under the laws of _ (the
"Pledgor")
- and -
ROYAL BANK OF CANADA, for itself and as agent for and on behalf of the
Lenders and the Swap Lenders (hereinafter referred to as the
"Administrative Agent")
- and -
THE SUBSIDIARIES OF THE PLEDGOR WHO ARE OR FROM TIME TO TIME BECOME
PARTY HERETO
WHEREAS the Pledgor has agreed to pledge the Collateral in order to secure the
payment and performance of the Secured Obligations, for which purpose the
Beneficiaries have appointed and authorized the Administrative Agent to act as
their attorney and agent for purposes of holding certain security granted by the
Pledgor.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the foregoing
recitals, the covenants and agreements herein contained and for other good and
valuable consideration (the receipt and adequacy of which are hereby
conclusively acknowledged), the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, unless something in the subject matter or context
otherwise requires, capitalized terms used herein and not otherwise defined in
this Agreement (including the recitals and the preamble hereto) shall have the
meanings as are ascribed to such terms in the Credit Agreement and, in addition:
"Agreement" means this agreement, as amended, modified, supplemented or
restated from time to time in accordance with the provisions hereof.
XVI-1
"Beneficiaries" means the Lenders, the Swap Lenders and Royal Bank of
Canada, for itself and as agent for and on behalf of the Lenders and the
Swap Lenders from time to time.
"Certificates" means all certificates and instruments evidencing or
representing the Pledged Securities.
"Charge" means the Liens created hereunder.
"Collateral" has the meaning set forth in Section 2.1.
"Credit Agreement" means the Credit Agreement dated as of November 26, 2003
among North American Energy Partners Inc., as borrower, the Persons party
thereto as lenders, Royal Bank of Canada, as agent, and the other agents,
as amended, supplemented or otherwise modified or restated from time to
time.
"Distribution" means:
(a) the declaration, payment or setting aside for payment of any dividend
or distribution on or in respect of any of the Collateral;
(b) the payment, distribution or return of any capital of any Subsidiary;
or
(c) the redemption, retraction, purchase, retirement or other acquisition,
in whole or in part, of any interests in the capital of any Subsidiary
or any securities, instruments, or contractual rights capable of being
converted into, exchanged or exercised for interests in the capital of
any Subsidiary.
"Pledged Securities" means all of the shares, options, warrants, rights and
other securities and equity interests that the Pledgor now has or holds or
hereafter has, holds, acquires, possesses or becomes entitled to in the
capital of its Subsidiaries or their successors.
"Pledgor Guarantee" means the Guarantee dated as of November 26, 2003 made
by the Pledgor in favour of the Beneficiaries, as amended, supplemented or
otherwise modified or restated from time to time.
"PPSA" means the Personal Property Security Act (Alberta), including the
regulations thereunder, as now enacted or as the same may from time to time
be amended, re-enacted or replaced.
"Secured Obligations" means, collectively and at any time and from time to
time, all of the obligations, indebtedness and liabilities (present or
future, absolute or contingent, matured or not) of the Pledgor to the
Beneficiaries or any of them under the Pledgor Guarantee, whether the same
are from time to time reduced and thereafter increased or entirely
extinguished and thereafter incurred again.
"Subsidiary" means, with respect to the Pledgor, any corporation,
partnership, trust, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power
of shares of stock or other ownership interests
XVI-2
entitled (without regard to the occurrence of any contingency) to vote in
the election of the members of the Governing Body is at the time owned or
controlled, directly or indirectly, by the Pledgor or one or more of the
other Subsidiaries of the Pledgor or a combination thereof;
"Transfer Documents" means, with respect to the transfer of Certificates or
other Collateral, certificate transfers, powers of attorney or other
instruments of transfer, in each case, executed in blank and in form and
substance as may be required (from time to time) by the Administrative
Agent.
1.2 Personal Property Security Act Definitions
Unless something in the subject matter or context otherwise requires, all
terms defined in the PPSA which are used in this Agreement shall have the
meanings as are ascribed to such terms in the PPSA.
1.3 Interpretation
In this Agreement:
(a) words importing the masculine gender include the feminine and neuter
genders, corporations, partnerships and other Persons, and words in
the singular include the plural, and vice versa, wherever the context
requires;
(b) all references to designated Articles, Sections and other subdivisions
are, unless the context otherwise requires, to be designated Articles,
Sections and other subdivisions of this Agreement;
(c) any reference to a statute will include and will be deemed to be a
reference to the regulations made pursuant to it, and to all
amendments made to the statute and regulations in force from time to
time, and to any statute or regulation that may be passed which has
the effect of supplementing or superseding the statute referred to or
the relevant regulation;
(d) references herein to any document, instrument or agreement means such
document, instrument or agreement as originally executed, as modified,
amended, supplemented or restated from time to time;
(e) the word "include(s)" means "include(s), without limitation", and the
word "including" means "including, but not limited to";
(f) any reference to a Person will include and will be deemed to be a
reference to any Person that is a successor to that Person;
(g) "hereof', "hereto", "herein", and "hereunder" mean and refer to this
Agreement and not to any particular Article, Section or other
subdivision;
(h) the headings are for convenience of reference only, do not form part
of this Agreement and are not to be considered in the interpretation
of this Agreement; and
XVI-3
(i) any schedule hereto is incorporated by reference and shall be deemed
to be part of this Agreement.
ARTICLE 2
PLEDGE
2.1 Pledge
As collateral security for the prompt and complete payment and performance
when due of the Secured Obligations, the Pledgor does hereby pledge,
hypothecate, assign, charge, convey, set over and transfer unto the
Administrative Agent for the benefit of the Beneficiaries and does hereby grant
to the Administrative Agent for the benefit of the Beneficiaries a continuing
security interest in and to, and does hereby deliver unto the Administrative
Agent for the benefit of the Beneficiaries, all of the right, title and interest
of the Pledgor in, to and under the following, whether now owned or hereafter
held, possessed of, entitled to or acquired (including by way of amalgamation or
otherwise) and whether now existing or hereafter coming into existence (all
being collectively referred to herein as the "Collateral"):
(a) the Pledged Securities;
(b) all Certificates;
(c) all Distributions, whether in shares, other securities, money or
property, received or receivable upon or in respect of the Pledged
Securities and all interest payments and money or other property paid
or payable on account of any return on, or repayment of, capital in
respect of the Pledged Securities or otherwise distributed or
distributable in respect thereof or that will in any way be charged
to, or be payable out of, the capital of the issuer of the Pledged
Securities in respect thereof;
(d) all securities issued in substitution for or in addition to any of the
foregoing, any Certificates representing or evidencing such
securities, and all cash, securities, distributions and other property
at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
foregoing;
(e) all other property that may at any time be received or receivable or
otherwise distributed or distributable to the Pledgor in respect of,
in substitution for, in addition to or in exchange for, any of the
foregoing; and
(f) to the extent not included in the foregoing, all cash and non-cash
proceeds in respect of the foregoing and all rights and interest of
the Pledgor in respect thereof or evidenced thereby including all
money received or receivable from time to time by the Pledgor in
connection with the sale of any of the foregoing (including all
proceeds received or receivable in connection with the redemption or
purchase for cancellation of any of the Pledged Securities).
XVI-4
2.2 Subsequently Acquired Certificates
Any additional Certificates at any time or from time to time after the date
hereof acquired or otherwise held by the Pledgor (by purchase, distribution or
otherwise), including any Certificates representing Pledged Securities of a
Subsidiary created, formed or acquired after the date hereof, shall form part of
the Collateral and the Pledgor will: (a) forthwith deliver such Certificates to
the Administrative Agent endorsed for transfer in blank and/or accompanied by
Transfer Documents duly executed in blank by the Pledgor, and (b) ensure that
all actions required to perfect the security interest therein of the
Administrative Agent under any requirement of law (including under the PPSA or
other Applicable Law) are promptly taken.
2.3 Delivery of Collateral; Registration in Name of the Administrative Agent
All Certificates shall be endorsed for transfer in blank and/or accompanied
by Transfer Documents duly executed in blank by the Pledgor, all as satisfactory
to the Administrative Agent, and shall be delivered immediately to the
Administrative Agent or its nominee. Such Certificates and the Pledged
Securities represented thereby shall, at the option of the Administrative Agent,
be registered in the name of the Administrative Agent or its nominee upon the
occurrence of an Event of Default.
2.4 Uncertificated Interests
Notwithstanding anything to the contrary contained in Sections 2.1 and 2.2
above, if any of the Pledged Securities (whether now owned or hereafter
acquired) is not evidenced by a Certificate, the Pledgor shall promptly notify
the Administrative Agent and shall promptly take all actions required to perfect
the Charge under Applicable Law (including under the PPSA). The Pledgor further
agrees to take such actions as the Administrative Agent, acting reasonably,
considers necessary or desirable to effect the foregoing and to permit the
Administrative Agent to exercise any of its rights and remedies hereunder, and
agrees to provide an opinion of counsel satisfactory to the Administrative
Agent, acting reasonably, with respect to any such pledge of uncertificated
interests upon the written request of the Administrative Agent.
2.5 Attachment
The Pledgor acknowledges that value has been given and agrees that the
security interest granted hereby shall attach when the Pledgor signs this
Agreement and the Pledgor has any rights in the Collateral.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties
The Pledgor represents and warrants to each of the Beneficiaries as at the
date hereof as follows:
(a) the Pledgor is the legal and beneficial owner of and has good title to
the Collateral free and clear of all Liens other than the Liens
constituted by the Collateral Documents (and other Permitted
Encumbrances) and all of the Pledged Securities
XVI-5
have been validly issued and are outstanding as fully paid and
non-assessable shares;
(b) the Pledgor's entire interest in the capital of each of the
Subsidiaries as of the date hereof is accurately described in Schedule
B hereto;
(c) this Agreement creates a valid security interest in all of the
Pledgor's Collateral securing the payment of all the Secured
Obligations. The Pledged Securities pledged by the Pledgor hereunder
are, and any securities pledged in substitution therefor or in
addition thereto will be, duly and validly pledged hereunder in
accordance with Applicable Law;
(d) the Pledgor has the right to pledge the Collateral as herein provided;
and
(e) the Pledgor is not a party to any outstanding agreement, option or
contract to sell or otherwise dispose of all or any portion of the
Collateral.
The representations and warranties set out in this Agreement shall survive
the execution and delivery of this Agreement notwithstanding any investigations
or examinations which may be made by any of the Beneficiaries or their legal
counsel. Such representations and warranties shall survive until this Agreement
has been terminated and discharged in accordance with the Credit Agreement.
ARTICLE 4
DEALINGS WITH COLLATERAL AND ADDITIONAL COVENANTS
4.1 Rights and Duties of the Administrative Agent
(a) In the holding of the Collateral, the Administrative Agent and any
nominee on its behalf is only bound to exercise the same degree of
care as it would exercise with respect to similar property of its own
of similar value held in the same place. The Administrative Agent and
any nominee on its behalf will be deemed to have exercised reasonable
care with respect to the custody and preservation of the Collateral if
it takes such action for that purpose as the Pledgor reasonably
requests in writing, but failure of the Administrative Agent or its
nominee to comply with any such request will not of itself be deemed a
failure to exercise reasonable care, so long as the degree of care
required by the immediately preceding sentence has been exercised.
(b) The powers conferred on the Administrative Agent hereunder are solely
to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession as required under Section 4.1(a)
and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral and no such
duties shall be implied as arising hereunder.
XVI-6
4.2 Voting and Other Rights
(a) Subject to any restrictions in the Credit Agreement, unless an Event
of Default has occurred which is continuing, the Pledgor is entitled
to exercise, either directly or, if the Collateral is registered in
the name of the Administrative Agent or its nominee, by power of
attorney or proxy, all the rights and powers of a holder of such
securities including the voting rights from time to time exercisable
in respect of the Collateral and to give proxies, consents and waivers
in respect thereof. No such action may be taken if it would violate or
be inconsistent with this Agreement or any other Loan Document or,
unless otherwise consented to by the Administrative Agent, would have
the effect of imposing any restriction on the transferability of any
of the Collateral.
(b) Upon the occurrence of an Event of Default which is continuing, the
Administrative Agent may give the Pledgor a notice prohibiting the
Pledgor from exercising the rights and powers of a holder of such
securities including the voting rights in respect of the Collateral,
at which time all such rights of the Pledgor will cease immediately
and the Administrative Agent will have the right to exercise the
rights and powers related to such Collateral including the right to
vote.
4.3 Distributions
(a) Subject to any restrictions in the Credit Agreement, unless an Event
of Default has occurred which is continuing:
(i) the Pledgor is entitled to receive all Distributions or other
payments in respect of the Collateral; and
(ii) if the Collateral has been registered in the name of the
Administrative Agent or its nominee, the Administrative Agent
will execute and deliver (or cause to be executed and delivered)
to the Pledgor all directions and other instruments as the
Pledgor may request for the purpose of enabling the Pledgor to
receive the Distributions or other payments that the Pledgor is
authorized to receive pursuant to Section 4.3(a)(i) above.
(b) Upon the occurrence of an Event of Default which is continuing, all
rights of the Pledgor pursuant to Section 4.3(a) will cease and the
Administrative Agent will have the sole and exclusive right and
authority to receive and retain all payments that the Pledgor would
otherwise be authorized to retain pursuant to Section 4.3(a). All
money and other property received by the Administrative Agent pursuant
to the provisions of this Section 4.3(b) may be applied on account of
the Secured Obligations or may be retained by the Administrative Agent
as additional Collateral hereunder and be applied in accordance with
the provisions of this Agreement.
4.4 Additional Covenants
The Pledgor agrees that it shall:
XVI-7
(a) not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged
Securities, (ii) create or suffer to exist any Lien upon or with
respect to any of the Pledged Securities, except for Permitted
Encumbrances, or (iii) permit any Subsidiary to merge or consolidate
except in accordance with the Credit Agreement and unless all of the
outstanding Securities of the surviving or resulting Person are, upon
such merger or consolidation, pledged hereunder and no cash,
Securities or other property is distributed in respect of the
outstanding Securities of any other constituent Person, unless the
Administrative Agent otherwise consents;
(b) cause each Subsidiary not to issue any Securities in addition to or in
substitution for the Pledged Securities issued by such Subsidiary,
except to Pledgor;
(c) at its expense (i) perform and comply in all material respects with
all terms and provisions of any agreement related to the Pledged
Securities required to be performed or complied with by it, and (ii)
maintain all such agreements in full force and effect;
(d) give Administrative Agent at least 30 days' prior written notice of
(i) any change in such Pledgor's name, identity or corporate structure
and (ii) any continuance or reorganization or other action that
results in a change of the jurisdiction of organization of Pledgor;
and
(e) promptly deliver to Administrative Agent all material written notices
received by it with respect to the Pledged Securities.
ARTICLE 5
REMEDIES AND REALIZATION
5.1 Remedies of Administrative Agent
(a) On and during the occurrence of an Event of Default that has not been
waived in writing by the Administrative Agent, the Administrative
Agent may, in addition to and without derogating in any way from its
other available rights and remedies provided by Applicable Law,
exercise all the rights and powers of a holder of the Collateral
including:
(i) transfer any part of the Collateral into the name of the
Administrative Agent or its nominee if it has not already done so
in accordance with Section 2.3;
(ii) take such steps as it considers desirable to maintain, preserve
or protect the Collateral;
(iii) exercise any and all rights and remedies of the Pledgor under or
in connection with the Collateral, including exercise voting
rights attaching to the Collateral (whether or not registered in
the name of the Administrative Agent or its nominee) and give or
withhold all consents and waivers in respect thereof;
XVI-8
(iv) exercise all rights of conversion, exchange or subscription, or
any other rights, privileges or options pertaining to any of the
Collateral;
(v) from time to time realize upon, collect, sell, transfer, assign,
give rights or options to purchase or otherwise dispose of and
deliver any Collateral in such manner as may seem advisable to
the Administrative Agent. For such purposes each requirement
relating thereto and prescribed by Applicable Law or otherwise is
hereby waived by the Pledgor to the extent permitted by
Applicable Law and in any offer or sale of any of the Collateral
the Administrative Agent is authorized to comply with any
limitation or restriction in connection with such offer or sale
as the Administrative Agent may be advised by counsel is
necessary in order to avoid any violation of Applicable Law, or
in order to obtain any required approval of the sale or of the
purchase by any Governmental Authority. Such compliance will not
result in such sale being considered or deemed not to have been
made in a commercially reasonable manner nor will the
Administrative Agent be liable or accountable to the Pledgor for
any discount allowed by reason of the fact that such Collateral
is sold in compliance with any such limitation or restriction;
(vi) purchase any of the Collateral, whether in connection with a sale
made under the power of sale herein contained or pursuant to
judicial proceedings or otherwise;
(vii) subject to the requirements of Applicable Law, accept the
Collateral in satisfaction or partial satisfaction of the Secured
Obligations upon notice to the Pledgor of its intention to do so
in the manner required by law;
(viii) the Administrative Agent may charge on its own behalf and pay
to others all amounts for reasonable expenses incurred and for
services rendered in connection with the exercise of the rights
and remedies of the Beneficiaries hereunder, including reasonable
legal fees (on a solicitor and his own client basis), and
accounting fees and expenses, and in every such case the amounts
so paid together with all costs, charges and expenses incurred in
connection therewith, including interest thereon at a rate per
annum equal to the Prime Rate plus 2.0% per annum, shall be added
to and form part of the Secured Obligations hereby secured; and
(ix) the Administrative Agent may discharge any claim, Lien,
encumbrance or any rights of others that may exist or be
threatened against the Collateral, and in every such case the
amounts so paid together with all reasonable costs, charges and
expenses incurred in connection therewith shall be added to the
Secured Obligations hereby secured.
(b) The Administrative Agent and the other Beneficiaries may:
(i) grant extensions of time;
(ii) take and perfect or abstain from taking and perfecting security;
XVI-9
(iii) give up securities;
(iv) accept compositions or compromises;
(v) grant releases and discharges; and
(vi) release any part of the Collateral or otherwise deal with the
Pledgor, debtors and creditors of the Pledgor, sureties and
others and with the Collateral and other security as the
Administrative Agent sees fit,
without prejudice to the liability of the Pledgor to the
Administrative Agent and the other Beneficiaries or their rights
hereunder.
(c) The Beneficiaries shall not be liable or responsible for any failure
to seize, collect, realize, or obtain payment with respect to the
Collateral and shall not be bound to institute proceedings or to take
other steps for the purpose of seizing, collecting, realizing or
obtaining possession or payment with respect to the Collateral or for
the purpose of preserving any rights of the Administrative Agent, the
Pledgor or any other Person, in respect of the Collateral.
(d) The Administrative Agent shall apply any proceeds of realization of
the Collateral to payment of reasonable expenses in connection with
the preservation and realization of the Collateral as above described
and the Administrative Agent shall apply any balance of such proceeds
to payment of the Secured Obligations in accordance with the Credit
Agreement. Subject to the requirements of Applicable Law, any surplus
realized in excess of the Secured Obligations shall be paid over to
the Pledgor.
5.2 Power of Attorney
The Pledgor hereby appoints the Administrative Agent as attorney of the
Pledgor, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time in the Administrative
Agent's discretion at any time after the occurrence and during the continuance
of an Event of Default, to take any and all actions authorized or permitted to
be taken by the Administrative Agent under this Agreement or by Applicable Law
and to: (a) execute and deliver all instruments and other documents and do all
such further acts and things as may be reasonably required by the Administrative
Agent enforce the Charge and remedies provided hereunder or to better evidence
and perfect the Charge; and (b) take any action and execute any instrument which
the Administrative Agent, acting reasonably, may deem necessary or advisable to
accomplish the purposes of this Agreement, including, to ask for, demand,
collect, xxx for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in connection with the Collateral, to
receive, endorse, and collect any drafts or other instruments, documents and
chattel paper in connection therewith, and to file any claims or take any action
or institute any proceedings which the Administrative Agent may deem to be
necessary or desirable for the collection thereof. Such appointment of the
Administrative Agent as the Pledgor's attorney is coupled with an interest and
is irrevocable.
XVI-10
ARTICLE 6
GENERAL
6.1 Subsidiaries as Signatories
Each of the Subsidiaries party hereto hereby consents to the granting of
the Charge in and to the Collateral to the extent required and hereby
acknowledges all of the terms and conditions of this Agreement and covenants and
agrees that it shall not act in a manner inconsistent herewith and shall execute
and deliver all instruments and other documents and do all such further acts and
things as may be reasonably required by the Administrative Agent to effectively
carry out the full intent and meaning of this Agreement, including, when
required hereunder, to enforce the Charge and remedies provided hereunder, or to
better evidence and perfect the Charge. The Subsidiaries are executing this
Agreement solely for the purposes set forth in the immediately preceding
sentence; the agreement of the Subsidiaries shall not be required for the
amendment of this Agreement unless its obligations under this Section 6.1 are
affected thereby.
6.2 New Subsidiaries
If the Pledgor creates, forms or acquires a Subsidiary that is not a party
to this Agreement, the Pledgor shall promptly after the new Subsidiary is
created, formed or acquired:
(a) deliver the Certificates representing the Pledged Securities of such
new Subsidiary, together with the appropriate Transfer Documents, to
the Administrative Agent and take such other action as required by
Section 2.2 hereof; and
(b) cause such new Subsidiary to become a party to and be bound by this
Agreement by executing and delivering to the Administrative Agent an
Addition Agreement substantially in the form of Schedule "A".
6.3 Benefit of the Agreement
This Agreement shall be binding upon the successors and permitted assigns
of the Pledgor and shall benefit the successors and permitted assigns of the
Administrative Agent and other Beneficiaries.
6.4 Conflict of Terms; Entire Agreement
This Agreement has been entered into as collateral security for the Secured
Obligations and is subject to all the terms and conditions of the Credit
Agreement and, if there is any conflict or inconsistency between the provisions
of this Agreement and the provisions of the Credit Agreement, the rights and
obligations of the Pledgor, the Administrative Agent and Beneficiaries shall be
governed by the provisions of the Credit Agreement. This Agreement together with
the Credit Agreement and the other Loan Documents constitute the entire
agreement between the Pledgor and the Administrative Agent with respect to the
subject matter hereof. There are no representations, warranties, terms,
conditions, undertakings or collateral agreements, express, implied or
statutory, between the Beneficiaries and the Pledgor except as expressly set
forth therein and herein.
XVI-11
6.5 Notices
Any demand, notice or other communication to be given in connection with
this Agreement shall be given in writing and may be given by personal delivery,
registered mail, facsimile or other electronic means, addressed to the recipient
as follows:
To the Pledgor:
Acheson Industrial Park #0
00000 - Xxxxxxx 00
Xxxxxx Xxxxx, Xxxxxxx X0X 0X0
Attention: President
Facsimile: (000) 000-0000
To the Administrative Agent:
Royal Bank of Canada, as Administrative Agent
X.X. Xxx 00, 000 Xxx Xxxxxx
Royal Bank Plaza
12th Floor, South Tower
Toronto, Ontario M5J 2W7
Attention: Manager Agency
Facsimile: (000) 000-0000
To a Subsidiary:
At the Pledgor's address noted above (or at such other address indicated in
a Subsidiary's Addition Agreement provided pursuant to Section 6.2 or other
notice in writing)
or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a Business Day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a Business Day or by facsimile
or other electronic means of communication shall be deemed to have been given on
the first Business Day following the transmittal thereof.
6.6 Modification; Waivers; Assignment
This Agreement may not be amended or modified in any respect except by
written instrument signed by the Pledgor and the Administrative Agent. No waiver
of any provision of this Agreement by the Administrative Agent shall be
effective unless the same is in writing and signed by the Administrative Agent,
and then such waiver shall be effective only in the specific instance and for
the specific purpose for which it is given. The rights of the Administrative
Agent (including those of any Beneficiary) under this Agreement may only be
assigned in accordance with the requirements of the Credit Agreement. The
Pledgor cannot assign its
XVI-12
obligations under this Agreement. Any assignee of a Beneficiary shall be bound
hereby, mutatis mutandis.
6.7 Additional Continuing Security
This Agreement and the Charge granted hereby are in addition to and not in
substitution for any other security now or hereafter held by the Administrative
Agent or the other Beneficiaries and this Agreement is a continuing agreement
and security that shall remain in full force and effect until discharged by the
Administrative Agent.
6.8 Discharge
The Pledgor and the Collateral shall not, unless otherwise required by the
Credit Agreement, be discharged from the Charge or from this Agreement except by
a release or discharge in writing signed by the Administrative Agent upon the
permanent payment in full of the Secured Obligations.
6.9 No Release
Subject to Section 4.1(a), the loss, injury or destruction of any of the
Collateral shall not operate in any manner to release or discharge the Pledgor
from any of its liabilities to the Beneficiaries.
6.10 No Obligation to Act
Notwithstanding any provision of this Agreement or any other Loan Document
or the operation, application or effect hereof, the Administrative Agent, the
other Beneficiaries, or any representative or agent acting for or on behalf of
the foregoing, shall not have any obligation whatsoever to exercise or refrain
from exercising any right, power, privilege or interest hereunder or to receive
or claim any benefit hereunder.
6.11 Admit to Benefit
No Person other than the Pledgor and the Beneficiaries shall have any
rights or benefits under this Agreement, nor is it intended that any such Person
gain any benefit or advantage as a result of this Agreement nor shall this
Agreement constitute a subordination of any security in favour of such Person.
6.12 Time of the Essence
Time shall be of the essence with regard to this Agreement.
6.13 Waiver of Financing Statement, etc.
To the extent permitted by Applicable Law, the Pledgor hereby waives the
right to receive from the Administrative Agent or the other Beneficiaries a copy
of any financing statement, financing change statement or other statement or
document filed or registered at any time in respect of this Agreement or any
verification statement or other statement or document issued by any registry
that confirms or evidences registration of or relates to this Agreement.
XVI-13
6.14 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the Province of Alberta and the laws of Canada applicable therein.
6.15 Attornment
The Pledgor, the Administrative Agent and each of the other Beneficiaries
each hereby attorn and submit to the jurisdiction of the courts of the Province
of Alberta. For the purpose of all legal proceedings, this Agreement shall be
deemed to have been performed in the Province of Alberta and the courts of the
Province of Alberta shall have jurisdiction to entertain any action or
proceeding arising under this Agreement. Notwithstanding the foregoing, nothing
herein shall be construed nor operate to limit the right of the Pledgor, the
Administrative Agent or any other Beneficiary to commence any action or
proceeding relating hereto in any other jurisdiction, nor to limit the right of
the courts of any other jurisdiction to take jurisdiction over any action,
proceeding or matter relating hereto.
6.16 Executed Copy
The Pledgor hereby acknowledges receipt of a fully executed copy of this
Agreement.
6.17 Counterparts
This Agreement may be executed in any number of 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, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.
[Insert the following provision into the Securities Pledge Agreements for North
American Construction Group Inc.:
6.18 Amalgamation of Pledgor
The Pledgor acknowledges and agrees that (a) forthwith upon consummation of
the Acquisition and following execution of this Agreement, it will amalgamate
with NACG Acquisition Inc., with the continuing corporation being North American
Construction Group Inc. ("Amalco"), and (b) immediately upon the issuance of the
Certificate of Amalgamation by Industry Canada, the Pledgor's obligations under
this Agreement shall continue as obligations of Amalco, Amalco shall be the
Pledgor hereunder and a party hereto for all purposes and this Agreement shall
remain in full force and effect, and (c) the Pledged Securities held by the
Pledgor immediately prior to the amalgamation shall continue to be property of
Amalco subject to the pledge hereunder.
[Insert the following provision into the Securities Pledge Agreements for NACG
Acquisition Inc.:
6.19 Amalgamation of Pledgor
The Pledgor acknowledges and agrees that (a) forthwith upon consummation of
the Acquisition and following execution of this Agreement, it will amalgamate
with North American
XVI-14
Construction Group Inc., with the continuing corporation being North American
Construction Group Inc. ("Amalco"), and (b) immediately upon the issuance of the
Certificate of Amalgamation by Industry Canada, the Pledgor's obligations under
this Agreement shall continue as obligations of Amalco.
IN WITNESS WHEREOF the parties hereto have executed this Agreement effective as
of the date hereof.
PLEDGOR:
[INSERT NAME]
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
SUBSIDIARIES:
[insert signature blocks for Subsidiaries
existing on date of execution]
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
AGENT:
ROYAL BANK OF CANADA,
as Administrative Agent
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
XVI-15
SCHEDULE A
TO THE SECURITIES PLEDGE AGREEMENT
FORM OF ADDITION AGREEMENT
ADDITION AGREEMENT
This Agreement is made as of _, 200_
BY:
[_], a corporation under the laws of _ (the "New Subsidiary")
IN FAVOUR OF:
ROYAL BANK OF CANADA, for itself and as agent for and on behalf of the
Lenders and the Swap Lenders (hereinafter referred to as the
"Administrative Agent")
WHEREAS pursuant to the Securities Pledge Agreement, the Pledgor is required to
cause any new Subsidiary to be added as a party to the Securities Pledge
Agreement by causing such new Subsidiary to execute this Addition Agreement;
AND WHEREAS the New Subsidiary has agreed to be bound by the Securities Pledge
Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the foregoing
recitals, the covenants and agreements herein contained and for other good and
valuable consideration (the receipt and adequacy of which are hereby
conclusively acknowledged), the New Subsidiary agrees as follows:
1. Reference to Securities Pledge Agreement
(a) This Addition Agreement relates to the Securities Pledge Agreement
dated as of November 26, 2003 among North American Energy Partners
Inc., as pledgor, the Administrative Agent, and the Subsidiaries party
thereto, as amended, modified, supplemented, restated or replaced in
accordance with the provisions thereof (the "Securities Pledge
Agreement").
(b) Capitalized terms used herein (including in the recitals and the
preamble hereto) and not otherwise defined herein shall have the same
meanings as are ascribed thereto in the Securities Pledge Agreement.
2. Addition
Effective as of _, 200_ (the "Addition Date"), the New Subsidiary shall
become a party to the Securities Pledge Agreement as fully as if it had
been an original signatory thereunder, and shall have all of the
obligations of a Subsidiary under the Securities
XVI-16
Pledge Agreement, including those set forth in Section 6.1 of the
Securities Pledge Agreement.
3. Notice
Any notice or other communication to the New Subsidiary in connection with
this Agreement or the Securities Pledge Agreement shall be deemed to be
delivered if delivered in the manner set forth in Section 6.4 of the
Securities Pledge Agreement at the following address:
_
[address]
Attention: _
Facsimile: _
4. Governing Law
This Agreement shall be governed by and interpreted in accordance with the
laws of the Province of Alberta and the laws of Canada applicable therein
and shall be treated in all respects as an Alberta contract.
IN WITNESS WHEREOF the New Subsidiary has executed this Agreement as of the
date first written above.
_
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
XVI-17
SCHEDULE B
TO THE SECURITIES PLEDGE AGREEMENT
FOR SUBSIDIARIES OF THE BORROWER
DESCRIPTION OF PLEDGOR'S INTEREST IN SUBSIDIARIES
--------------------------------------------------------------------------------
Name of Subsidiary:
--------------------------------------------------------------------------------
Issued Share Capital:
--------------------------------------------------------------------------------
Share Certificates and
Transfer Documents:
--------------------------------------------------------------------------------
XVI-18
EXHIBIT XVII
TO CREDIT AGREEMENT
FORM OF DEPOSIT INSTRUMENT
DEPOSIT INSTRUMENT
THIS DEPOSIT INSTRUMENT is made _, 200 between _, a
---
[corporation/partnership/ ] under the laws of _ (the "Debtor") and
------------
Royal Bank of Canada (who and whose successors and assigns as holders of the
Debenture referred to below are herein called the "Holder"), for itself and as
agent for and on behalf of the Lenders and the Swap Lenders (collectively, the
"Beneficiaries").
WHEREAS:
The Debtor has, by Guarantee dated _, 200 (the "Guarantee"), guaranteed
---
the [Obligations and the Secured Swap Obligations;]
The Debtor has issued its Demand Debenture and Negative Pledge dated _,
200___ in the principal amount of Cdn. $300,000,000 (such debenture as amended,
supplemented or reissued is herein called the "Debenture");
The Debtor has agreed to deposit the Debenture with the Holder as general
and continuing collateral security for all present and future indebtedness,
obligations and liabilities of the Debtor to the Beneficiaries as set out
herein;
NOW THEREFORE in consideration of the premises and of the sum of $10.00 now
paid by the Holder to the Debtor, the receipt and sufficiency of which are
hereby acknowledged, the Debtor agrees with the Holder for the benefit of the
Beneficiaries as follows:
1. Definitions; Defined Terms; Headings
(a) In this Instrument, unless there is something in the subject matter or
context inconsistent therewith:
"Credit Agreement" means the Credit Agreement dated November 26, 2003
among North American Energy Partners Inc., as borrower, Royal Bank of
Canada, as agent, the other agents, and the Persons party thereto as
lenders, as amended, modified, supplemented or restated from time to
time.
"Liabilities" has the meaning set forth in Section 2.
(b) Terms and expressions which are defined in the Credit Agreement shall,
when used herein, and unless otherwise defined, have the meanings as
therein ascribed to them.
XVII-1
(c) The division of this Instrument into Sections and the insertion of
headings is for convenience of reference only and shall not affect the
construction or interpretation of this Instrument.
(d) The terms "this Instrument", "hereof", "hereunder" and similar
expressions refer to this Instrument and not to any particular Section
or other portion hereof and include any amendments or supplements
hereto. Unless otherwise stated, references herein to Sections are to
Sections of this Instrument.
(e) Words importing the singular number shall include the plural and vice
versa, and words importing gender shall include the masculine,
feminine and neuter genders.
(f) The word "including" shall not be construed to limit or restrict the
matter that precedes it.
2. Deposit of Debenture
The Debenture (together with all renewals thereof, substitutions therefor,
accretions thereto, interest thereon and proceeds thereof) is hereby delivered
to and deposited with the Holder to be held by the Holder as continuing
collateral security for the payment and performance by the Debtor of all
[Obligations and Secured Swap Obligations] [Guaranteed Obligations (as defined
in the Guarantee)] (present or future, direct or indirect, absolute or
contingent, matured or not, extended or renewed), wheresoever and howsoever
incurred and any ultimate unpaid balance thereof and whether the same is from
time to time reduced and thereafter increased or entirely extinguished and
thereafter incurred again and whether the Debtor be bound alone or with another
or others and whether as principal or surety (collectively, the "Liabilities").
[use first bracketed text for Borrower and second for Subsidiary Guarantors]
3. Rights as Holder to Enforce Debenture
The Holder is hereby authorized as the holder of the Debenture, and without
selling or purchasing the Debenture, to exercise any and all rights of a holder
of the Debenture as set forth in this section. During the existence of an Event
of Default (as defined in the Credit Agreement) or if the Credit Agreement is no
longer in effect, an "Event of Default" (or equivalent designation) in any
Lender Hedge Agreement (as applicable, an "Event of Default"), the Holder may
demand payment under the Debenture and enforce the security thereby constituted.
At any other time, the Holder of the Debenture may, as permitted thereunder,
exercise or cause to be exercised for its benefit all or any of the other rights
therein provided, including enforcing all other terms, covenants, provisions and
agreements therein contained, both (as permitted therein) before and after the
occurrence of an Event of Default. Except as provided in Section 7 hereof,
nothing herein shall be deemed to suspend or otherwise modify or affect the
obligations of the Debtor or the rights of a holder of the Debenture, all as
provided therein.
4. Realization by Sale
In addition to the foregoing rights and remedies, the Holder shall be
entitled, upon an Event of Default occurring and which is continuing, to sell or
otherwise dispose of the Debenture
XVII-2
by public sale (including public auction) or private or closed tender or by
private contract, with only those notices, if any, as are required by Applicable
Law, and with or without advertising and without any other formality (except as
otherwise required by Applicable Law), and such sale or disposition shall be on
such terms and conditions as to title, credit and otherwise and as to upset or
reserve bid or price as may seem advantageous to the Holder, and the Holder
shall not be required to accept the highest or any bid or tender at any public
sale. The Holder or any Beneficiary may itself purchase the Debenture unless
prohibited from doing so by Applicable Law. The Holder may rescind or vary any
contract for the sale or other disposition of the Debenture and may resell the
Debenture without being answerable for any loss occasioned thereby, and may
delay any sale or disposition of the Debenture in whole or in part.
5. Power of Attorney
To give full effect hereto, the Holder or any officer of the Holder is,
during the existence of an Event of Default, hereby irrevocably appointed
attorney of the Debtor, with full power of substitution, for and in the name of
the Debtor to sign and seal all documents and to fill in all blanks in signed
powers of attorney and transfers necessary in order to complete the transfer of
the Debenture to the Holder or its officers or to any purchaser.
6. Records of Holder
The records of the Holder as to payment of any Liabilities being in default
or of any demand for payment having been made will be prima facie evidence of
such default or demand.
7. Amount Secured
Notwithstanding the principal amount of the Debenture and the interest rate
provided therein on such principal amount, the indebtedness, liabilities and
obligations secured by the deposit thereof to the Holder pursuant hereto shall
not exceed the amount of the Liabilities.
8. Charges and Expenses
The Debtor shall pay to the Holder all reasonable out-of-pocket costs and
expenses, including all legal fees (on a solicitor and his own client basis) and
other expenses incurred by the Holder from time to time in the documentation,
execution, registration, enforcement, realization and collection of or in
respect of this Instrument. All such amounts shall become part of the
Liabilities, shall be payable by the Debtor on demand, shall bear interest at
the rate set forth in the Debenture in respect of the principal amount thereof
calculated from the date incurred by the Holder to the date paid by the Debtor,
and such amounts and interest shall be secured by the Debenture. This provision
shall not be construed to limit any other provisions of the Credit Agreement,
the Guarantee, the Debenture, any other Loan Document or any Lender Hedge
Agreement dealing with the charge-back to the Debtor of expenses incurred by a
Beneficiary.
9. Remedies Not Exclusive
Each and every right, remedy and power conferred by this Instrument is in
supplement of and in addition to and not in substitution for any other right,
remedy or power the Holder may
XVII-3
have from time to time under this Instrument, the Credit Agreement, the
Guarantee, the Debenture, any other Loan Document, any Lender Hedge Agreement,
or in any other agreement or under the law in force at the time of the exercise
of such right, remedy or power. The Holder may proceed when so entitled by way
of any action, suit, remedy or other proceeding at law or in equity and no such
remedy for the enforcement of the rights of the Holder shall be exclusive of or
dependent on any other such remedy. Any one or more of such remedies may from
time to time be exercised separately or in combination. Notwithstanding the
foregoing, the Holder shall not be bound to deal with the Debenture, to exercise
any right or remedy as aforesaid, or to preserve rights against other Persons.
10. Extensions
The Holder may grant renewals, extensions of time and other indulgences,
take, release and give up securities, accept compositions, grant releases and
discharges, perfect or fail to perfect any securities, and otherwise deal or
fail to deal with the Debtor, guarantors, sureties and others and with the
Debenture and other securities as the Holder may see fit, all without prejudice
to the liability of the Debtor or the Holder's rights and powers under this
Instrument or the Debenture.
11. Amendments or Supplemental Debentures
Any amendments or supplemental debentures to the Debenture shall, upon
execution by the Debtor and delivery to the Holder, be deemed to be deposited
hereunder and included in the term "Debenture" for the purposes hereof, unless
expressly provided otherwise.
12. No Merger
The Debenture and this Instrument shall not operate by way of merger of all
of the Liabilities and neither the taking of any judgment nor the exercise of
any power of sale shall operate to extinguish the liability of the Debtor to
make payment of, or to satisfy the Liabilities nor shall the acceptance of any
payment or alternate security constitute or create any novation, and it is
further agreed that the taking of a judgment or judgments under any of the
covenants herein contained shall not operate as a merger of such covenants.
13. Governing Law
(a) THIS INSTRUMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE
PROVINCE OF ALBERTA AND THE LAW OF CANADA APPLICABLE THEREIN.
(b) The Debtor agrees that the courts of Alberta shall have jurisdiction
to hear and determine any suit, action or proceeding and to settle any
disputes which may arise out of or in connection with the aforesaid
document and it irrevocably submits to the non-exclusive jurisdiction
of such courts, without prejudice to the rights of the Holder to take
proceedings in any other jurisdictions, whether concurrently or not.
XVII-4
(c) The Debtor agrees that final judgment in any such suit, action or
proceeding brought in such courts shall be conclusive and binding upon
it and may be enforced against it in the courts of Canada (or any
other courts to the jurisdiction of which it or its property is
subject) by a suit upon such judgment, provided that it does not waive
any right to appeal any such judgment, to seek any stay or otherwise
to seek reconsideration or review of any such judgment.
14. Assignment by Debtor
The Debtor shall not and cannot assign its obligations under this
Instrument, or take any steps or enter into any transaction of any nature which
would have that effect (except as expressly permitted by the Credit Agreement
or, following termination of the Credit Agreement, any Lender Hedge Agreement),
without the prior written consent of the Holder, which may be arbitrarily
withheld. Subject to the foregoing, all obligations of the Debtor hereunder
shall bind the Debtor and its successors and assigns.
15. Assignment by Holder
The Holder may at any time assign this Instrument as provided in the Credit
Agreement, or following termination of the Credit Agreement, any Lender Hedge
Agreement.
16. Copy Received
To the extent permitted by Applicable Law, the Debtor acknowledges having
received from the Holder a copy of this executed Instrument.
17. Waiver of Right to Receive Copy of Statements
The Debtor waives any right it now has or hereafter may have to receive
from the Holder a copy of any financing statement in which the Debtor is named
as a debtor, or a copy of statements used by a personal property security
registry to confirm registration of financing statements.
18. Severability
If one or more of the provisions of this Instrument is, or is adjudged to
be, invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby, and such invalid, illegal or unenforceable
provision shall, to the extent permitted at law, be severable.
19. Security in Addition
The rights hereby constituted are not in substitution for any other
security for the Liabilities, or for any other agreement between the parties
whether or not creating any security interest in all or part of the property of
the Debtor whether heretofore or hereafter made, and such security and such
agreement shall be deemed to be continued and not affected hereby unless
expressly provided to the contrary in a writing signed by the Debtor and the
Holder. The taking of any action or proceedings or refraining from so doing, or
any other dealing with any other
XVII-5
security for the Liabilities or any part thereof shall not release or affect
this Instrument and neither the taking of any proceedings hereunder or under the
Debenture for the realization of any security shall release or affect any other
security held by the Holder or any Beneficiary for the payment or performance of
the Liabilities.
20. Waivers and Consents
No waiver of any provision hereof, or consent to any action or inaction
shall be effective unless the same is in writing and signed by the party
granting the same. Such waivers and consents shall not extend to any matters
other than those in respect of which the same were given, and the same may be
subject to such conditions as the party giving the same may stipulate.
21. Further Assurances
(a) Each party shall promptly cure any defect by it in the execution and
delivery of this Instrument upon request of the other party hereto.
(b) The Debtor, at its expense, shall promptly deliver to the Holder, upon
request by the Holder in writing, all such other and further
documents, agreements, opinions, certificates and instruments
(executed, as necessary) in order to give effect to the covenants and
agreements of the Debtor in this Instrument, all as may be reasonably
necessary or appropriate in connection therewith.
22. Holder Not Bound to Advance
Neither the execution and delivery nor the registration of the Debenture
shall in itself for any reason whatsoever obligate or bind the Holder to advance
any moneys or, having advanced a portion, in itself obligate the Holder in any
way to advance the balance in any portion thereof; but nevertheless the
Debenture and the mortgages, charges and security interests thereby constituted
shall take effect forthwith upon execution of the Debenture and shall operate as
security for the Liabilities.
23. Effective Notice
Any and all notices or other communications required or permitted pursuant
to this Instrument shall be in writing and shall be given in the manner
stipulated in the Debenture.
24. Discharge
Upon the permanent payment in full of all of the Liabilities and
termination of the [Credit Agreement, the Guarantee and each Lender Hedge
Agreement] [the Guarantee and each Lender Hedge Agreement] secured by the
deposit of the Debenture hereunder, the Holder shall release and discharge the
Debenture and this Instrument, and shall redeliver the Debenture to the Debtor
for cancellation. [use first bracketed text for Borrower and second for
Subsidiary Guarantors]
XVII-6
[Insert the following provision into the Deposit Instruments of NACG Acquisition
Inc. and North American Construction Group Inc.:
25. Amalgamation of Debtor
The Debtor acknowledges and agrees that (a) forthwith upon consummation of
the Acquisition and following execution of this Instrument, it will amalgamate
with [NACG Acquisition Inc./North American Construction Group Inc.], with the
continuing corporation being North American Construction Group Inc. ("Amalco"),
and (b) immediately upon the issuance of the Certificate of Amalgamation by
Industry Canada, the Debtor's obligations under this Instrument shall continue
as obligations of Amalco, Amalco shall be the Debtor hereunder and a party
hereto for all purposes and this Instrument shall remain in full force and
effect.
IN WITNESS WHEREOF the undersigned have executed this Instrument.
_
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
ROYAL BANK OF CANADA,
as Administrative Agent
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
XVII-7
EXHIBIT XVIII
TO THE CREDIT AGREEMENT
FORM OF OPINION OF BORROWER'S COUNSEL
[FINAL FORM OF OPINION TO BE INSERTED]
XVIII-1
EXHIBIT XIX
TO THE CREDIT AGREEMENT
FORM OF OPINION OF FINANCE CO. COUNSEL
[FINAL FORM OF OPINION TO BE INSERTED]
XIX-1
SCHEDULES
SCHEDULE 2.1: LENDERS' COMMITMENTS AND PRO RATA SHARES
SCHEDULE 6.1M: EQUIPMENT CONTINUING TO BE HELD UNDER LEASES
SCHEDULE 7.1: SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
OWNERSHIP; MANAGEMENT
SCHEDULE 7.2: GOVERNMENT CONSENTS
SCHEDULE 7.5B: REAL PROPERTY INTERESTS
SCHEDULE 7.5C: MATERIAL SERIAL NUMBER EQUIPMENT
SCHEDULE 7.5D: INTELLECTUAL PROPERTY
SCHEDULE 7.8: MATERIAL CONTRACTS
SCHEDULE 9.1: EXISTING INDEBTEDNESS
SCHEDULE 9.2: PERMITTED LIENS
SCHEDULE 9.3: EXISTING INVESTMENTS
SCHEDULE 9.4: CONTINGENT OBLIGATIONS
S-1
SCHEDULE 2.1
LENDERS' COMMITMENTS AND PRO RATA SHARES
-----------------------------------------------------------------------
Lender Revolving Loans Term Loans Total Commitment
-----------------------------------------------------------------------
Royal Bank of Canada $35,000,000 $25,000,000 $60,000,000
-----------------------------------------------------------------------
BNP Paribas (Canada) $35,000,000 $25,000,000 $60,000,000
-----------------------------------------------------------------------
S-2
SCHEDULE 6.1M
EQUIPMENT UNDER LEASES
Unit Description Serial No. Lessor
MT334 Hitachi EH5000 402RDC76985 HSBC
MT335 Hitachi EH5000 402RDC76986 HSBC
S5576 Hitachi EX5500 18B00C00000508 Wajax
1019 2003, GMC 4 x 4 S/C 0XXXX00X00X000000 Transportaction
1020 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1021 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1022 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1023 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1024 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1025 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1026 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1027 Ford F350 Crew Cab 4x4 0XXXX00XX0XX00000 Transportaction
1028 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1029 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1030 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1031 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1032 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1033 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1035 GMC Savana 15 Passenger Van 0XXXX00X0X0000000 Transportaction
1036 F250 4X4 S/C 0XXXX00X00XX00000 Transportaction
1037 Ford F150 4x4 S/C 0XXXX00XX0XX00000 Transportaction
1038 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1039 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1040 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1041 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1042 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1043 Ford F450 0XXXX00X00XX00000 Transportaction
1034 GMC Envoy (Xxxx) 0XXXX00X000000000 Transportaction
959 GMC Sierra 4x4 (Fraser) 0XXXX00XX0X000000 Transportaction
897 GMC Sierra SLE 2WD 2GTEC10V11312917 Transportaction
1001 Toyota Xxxxxx (Xxxxx) 0XXXX000X0X000000 Transportaction
765 Toyota 0 Xxxxxx (Xxxx) XX0XX00X0XX000000 Transportaction
T0751 Cat Challenger CH75D 5AR00216 Cat Financial
1044 Xxxx - Water Truck 0X0XX00X0XX000000 Transportaction
1045 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1046 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1047 Kenworth Steam Truck 0XXXXX0X0XX000000 Transportaction
1048 Xxxx - Water Truck 0X0XX00X0XX000000 Transportaction
1049 Xxxx - Water Truck 0X0XX00X0XX000000 Transportaction
1050 Ford Passenger Van 1FBSSS31L93HB46551 Transportaction
1051 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1052 Ford F150 4x4 S/C 0XXXX00XX0XX00000 Transportaction
1053 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1055 Ford 15 Passenger Van 0XXXX00X00XX00000 Transportaction
1056 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1057 Ford F250 CC 4x4 0XXXX00X00XX00000 Transportaction
S-3
Unit Description Serial No. Lessor
1058 Fuel Truck Vehicle not yet received Transportaction
1059 Fuel Truck Vehicle not yet received Transportaction
1060 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1061 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1062 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1063 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1064 Fuel Truck Vehicle not yet received Transportaction
1065 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1066 Ford F350 Crew Cab 4x4 1FTSW31L64EA300095 Transportaction
1067 Ford F350 Crew Cab 4x4 1FTSW31L44EA300094 Transportaction
1068 Ford F350 Crew Cab 4x4 1FTSW31L24EA300093 Transportaction
1069 Ford F150 4x4 S/C 0XXXX00XX0XX00000 Transportaction
1070 Ford F150 4x4 S/C 0XXXX00X00XX00000 Transportaction
1071 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1072 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1073 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1074 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000 Transportaction
1075 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1076 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1077 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1078 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1079 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1080 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1081 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1082 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1083 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1084 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1085 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1086 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1087 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1088 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000 Transportaction
1089 Ford F150 4x4 S/C 0XXXX00000XX00000 Transportaction
1090 Ford F150 4x4 C/C 2FTPX18L83CA7S737 Transportaction
1091 Ford X000 000" XX XX, series Ext. Wagon XL 0XXXX00X00XX00000 Transportaction
1092 Ford X000 000" XX XX, series Ext. Wagon XL 0XXXX00X00XX00000 Transportaction
T91 Tridem Stepdeck, 53' 2J9W3A1FXK001010 Transportaction
T92 Tandem Flatdeck, 45' 0XXX00000XX000000 Transportaction
T93 Tandem Flatdeck, 45' 0X0X0X0XXX0000000 Transportaction
C0454 Crawler 450H 917171 Xxxxxx
E1002 Excavator 110 JD P00110X020272 Xxxxxx
L9083 Loader TC62H TC62H587641 Xxxxxx
L9084 Loader TC62H DWTC62H587595 Xxxxxx
CP041 Packer SD40D 164890 Coneco
CP051 Packer SD122D 170874 Coneco
CP052 Packer SD122D 171116 Coneco
CP053 Packer SD110D 162464 Coneco
AT370 Truck 400 8PS00768 Finning
AT371 Truck 300 7FN00652 Finning
S-4
Unit Description Serial No. Lessor
AT372 Truck 300 7FN00788 Finning
AT373 Truck 300 7FN00852 Finning
AT374 Truck 300 7FN00789 Finning
AT375 Truck 300 7FN00895 Finning
AT376 Truck 300 7FN00256 Finning
AT377 Truck 300 7FN00594 Finning
AT378 Truck 300 7FN00792 Finning
X0000 Xxxxxxxxxxx X0XXXX 0XX00000 Finning
C0979 Caterpillar D9R ABK00704 Finning
C0980 Caterpillar D9R ABK00708 Finning
CP040 Packer CS563D 9MW00589 Finning
L7083 Loader IT28G 8CR02939 Finning
--- Caterpillar 1455161 J22680-5 Finning
--- Caterpillar 1502568-K J2280-3 Finning
SS089 Skidsteer 85XT JAF0376220 Hammer
SS090 Skidsteer 85XT JAF0376242 Hammer
SS091 Skidsteer 95XT JAF0342492 Hammer
C0602 Crawler D6R xxx DMP00311 Xxxxxx
X0000 Xxxxxxx X0X XXX00X0XXXXX00000 Xxxxxx
ML001 Man Lift Manitou 178319 Xxxxxxx
E2089 Excavator ZX200LC ARH310224 Wajax
E3316 Excavator EX330LC 1H1P022610 Wajax
E3317 Excavator ZX330LC XXX0XX00X00000000 Wajax
E3318 Excavator ZX330LC XXX0XX00X00000000 Wajax
E3319 Hitachi Excavator ZX330LC HCM1HH00T0031396 Wajax
E3399 Hitachi Excavator ZX330LC XXX0XX00X000000 Xxxxx
MT336 Hitachi EH5000 402RDC76987 Wajax Finance
Xxx-Mar Equipment Sales
RB100 DL562, 20' stick 6X1993 & Services Ltd.
Xxx-Mar Equipment Sales
RB101 D6D Sideboom, 20' stick 6X1603 & Services Ltd.
--- OCE 7056-New 0705623019 Ikon Office Solutions Inc.
--- Xxxxx XX0000-Xxx Digital Copier NLV02947 Ikon Office Solutions Inc.
--- Canon IR5000 Digital Copier MPL36278 Ikon Office Solutions Inc.
--- Canon IR550-New Digital Copier NNT25868 Ikon Office Solutions Inc.
--- Canon IR330S Digital Copier NQJ19441 Ikon Office Solutions Inc.
--- Canon IRI330 Digital Copier MNS00339 Ikon Office Solutions Inc.
--- 2000 40x60 40200-40208 Cargo trailer 0000000000 Northgate Industries Ltd.
The leases in respect of the following assets are referred to as the "GE
Leases":
Unit# Description Serial No. Lessor
000 Xxxx*X Xx/Xxxx XX0000 0X0X000XXXX000000 GE Capital
688 Dodge *L 3500 CAB & CHASSIE 0X0XX0000XX000000 GE Capital
691 Ford *L F550 RC 4X F56B 0XXXX00X0XXX00000 GE Capital
692 GMC *L TOPKICK 0XXX0X0X0XX000000 GE Capital
704 GMC *L 1500 SLE SB SC 2WD 0XXXX00X0XX000000 GE Capital
705 CHEV *L 2500 SB SC 0XXXX00X0XX000000 GE Capital
710 DODGE *L 3500 WAGON 0X0XX00X0XX000000 GE Capital
S-5
711 DODGE *L 1500 SC 0X0XX00X0XX000000 GE Capital
712 FORD *L F550 0XXXX00X0XXX00000 GE Capital
713 DODGE *L 2500 0X0XX00XXXX000000 GE Capital
715 FORD F250 2500 CC SB 4X4 0XXXX00X0XXX00000 GE Capital
716 FORD F150 SC 2WD 0XXXX00X0XXX00000 GE Capital
717 CHEV 4X4 SC SB 2500 0XXXX00X0XX000000 GE Capital
720 Dodge 4X4 SC SB 1500 0X0XX00X0XX000000 GE Capital
723 Ford F150 SuperCab 2WD 1FTRX17WOXKB95762 GE Capital
724 Dodge 4X4 SC SB 2500 0X0XX00X0XX000000 GE Capital
725 Dodge 4X4 SC SB 2500 0X0XX00X0XX000000 GE Capital
730 Kenworth T800B 0XXXXX0X0XX000000 GE Capital
731 Dodge 4X4 SC SB 2500 0X0XX00X0XX000000 GE Capital
732 Ford F350 Crew Cab 0XXXX00X0XXX00000 GE Capital
733 Ford F350 Crew Cab 0XXXX00X0XXX00000 GE Capital
734 Chev Silverado 1500 0XXXX00X0XX000000 GE Capital
736 Ford F350 Crew Cab 0XXXX00X0XXX00000 GE Capital
737 Ford F350 Crew Cab 0XXXX00X0XXX00000 GE Capital
738 FORD F350 4X4 C/C 0XXXX00X0XXX00000 GE Capital
767 GMC TOPKICK 1GDL7H1COYJ502928 GE Capital
768 GMC TOPKICK 0XXX0X0X0XX000000 GE Capital
739 Ford F150 (Xxxxxxx) 0XXXX00X0XXX00000 GE Capital
--- Crane Equipment 00024196 GE Capital
Miscellaneous Equipment:
Other miscellaneous rental equipment on a short term basis from third parties,
including: jumping jacks, plate tampers, extension cords, insulated boots,
hoses, ladders, pumps, heaters, fuel tanks, offices, sleepers, shacks and
radios, at an approximate cost of $350,000 to $400,000 per month.
S-6
SCHEDULE 7.1
SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
OWNERSHIP; MANAGEMENT
Corporate structure - before Acquisition and Amalgamation:
[FLOWCHART]
S-7
SCHEDULE 7.1
SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
Corporate structure - after Acquisition and Amalgamation:
[FLOWCHART]
S-8
SCHEDULE 7.1
SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
OWNERSHIP; MANAGEMENT
Capital structure and ownership - before Acquisition and Amalgamation:
--------------------------------------------------------------------------
NAME NACG Preferred Corp. (Federal)
--------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL Unlimited Number of Common Shares
--------------------------------------------------------------------------
ISSUED SHARE CAPITAL 1 Common Share issued to NACG Holdings Inc.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
NAME North American Energy Partners Inc. (Federal)
--------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL Unlimited Number of Common Shares
--------------------------------------------------------------------------
ISSUED SHARE CAPITAL 1 Common Share issued to NACG Preferred Corp.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
NAME NACG Acquisition Inc. (Federal)
--------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL Unlimited Number of Common Shares
--------------------------------------------------------------------------
ISSUED SHARE CAPITAL 1 Common Share issued to North American Energy
Partners Inc.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
NAME NACG Finance LLC (Delaware)
--------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL N/A (Delaware LLC)
--------------------------------------------------------------------------
ISSUED SHARE CAPITAL 100% membership interest in LLC held by North
American Energy Partners Inc.
--------------------------------------------------------------------------
S-9
SCHEDULE 7.1
SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
OWNERSHIP; MANAGEMENT
Capital structure and ownership - after Acquisition and Amalgamation:
------------------------------------------------------------------------------
NAME NACG Preferred Corp. (Federal)
------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL Unlimited Number of Common Shares
Unlimited Number of Series A Preferred Shares
Unlimited Number of Series B Preferred Shares
------------------------------------------------------------------------------
ISSUED SHARE CAPITAL 1 Common Share issued to NACG Holdings Inc. 35,000
Series A Preferred Shares issued to Norama Ltd.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
NAME North American Energy Partners Inc. (Federal)
------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL Unlimited Number of Common Shares
------------------------------------------------------------------------------
ISSUED SHARE CAPITAL 1 Common Share issued to NACG Preferred Corp.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
NAME NACG Finance LLC (Delaware)
------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL N/A (Delaware LLC)
------------------------------------------------------------------------------
ISSUED SHARE CAPITAL 100% membership interest in LLC held by North
American Energy Partners Inc.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
NAME: North American Construction Group Inc.
------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of shares
------------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 200 Shares held by North American Energy Partners
Inc.
------------------------------------------------------------------------------
S-10
--------------------------------------------------------------------------------
NAME: North American Construction Ltd.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of each of: 100 Class A Voting
Non-Participating Common Shares; 1,000 Class B
Non-Voting Participating Common Shares and 100,000
Class C Redeemable Preferred Shares
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 100 Class A Non-Voting Participating Common Shares
and 200 Class B Non-Voting Participating Common
Shares issued to North American Construction Group
Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NAME: North American Caisson Ltd.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of Common Shares
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 2 Common Shares issued to North American
Construction Group Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NAME: North American Engineering Inc.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of each of: Class A Common Voting
Shares, Class B Common Non-Voting Shares and Class P
Preferred Shares
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 2 Class A Common Voting Shares issued to North
American Construction Group Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NAME: North American Enterprises Ltd.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of Common Shares
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 100 Common Shares issued to North American
Construction Group Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NAME: North American Industries Inc.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of each of: Class A Shares and
Class B Shares
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 2 Class A Shares issued to North American
Construction Group Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NAME: North American Maintenance Ltd.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of Shares of one class
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 100 Shares issued to North American
Construction Group Inc.
--------------------------------------------------------------------------------
S-11
----------------------------------------------------------------------------
NAME: North American Mining Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of Common Shares
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 100 Common Shares issued to North American
Construction Group Inc.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
NAME: North American Pipeline Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of Shares of one class
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 100 Shares issued to North American Construction
Group Inc.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
NAME: North American Road Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of Shares of one class
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 20 Shares issued to North American Construction
Group Inc.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
NAME: North American Services Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of Common Shares
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 100 Common Shares issued to North American
Construction Group Inc.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
NAME: Xxxxxxxxx Pile Driving Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of Shares of one class to be
designated as Common Shares
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 100 Common Shares issued to North American
Construction Group Inc.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
NAME: North American Site Development Ltd.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of Shares of one class
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 100 Shares issued to North American Construction
Group Inc.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
NAME: North American Site Services Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL: Unlimited number of Shares of one class to be
designated as Common Shares
----------------------------------------------------------------------------
S-12
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL: 100 Common Shares issued to North American
Construction Group Inc.
----------------------------------------------------------------------------
S-13
SCHEDULE 7.1
TO THE CREDIT AGREEMENT
SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
OWNERSHIP; MANAGEMENT
Officers & Directors:
The following table sets forth the names and positions held by the
directors and executive officers of NACG Preferred Corp., North American Energy
Partners Inc. and North American Construction Group Inc. after giving effect to
the Acquisition and Amalgamation:
Name Position
---- --------
Xxxxxx Xxxxxxxxxx.................................. President and Director
Xxxxxxx Xxxxxxx.................................... Vice President, Finance
Xxxxxxx Xxxxx...................................... Vice President, Operations
R. Xxxx Xxxxxxx.................................... Secretary
Xxxxxxx X. Xxxxxx.................................. Chairman
Xxxx X. Xxxxxxx.................................... Director
Xxxx-Xxxxxx X. Xxxxx............................... Director
Xxxxx Xxxxxxxxxxxx................................. Director
K. Xxxx Xxxxxx..................................... Director
Xxxx X. Xxxxxx..................................... Director
Xxx X. Xxxxxxxx.................................... Director
Xxxxxx X. Getty.................................... Director
Xxxxxx Xxxxx....................................... Director
Xxxx X. Xxxxxx..................................... Director
The following table sets forth the names and positions held by the
directors and executive officers of Subsidiaries of North American Construction
Group Inc. after giving effect to the Acquisition and Amalgamation:
Name Position
---- --------
Xxxxxx Xxxxxxxxxx.................................. President and Director
Xxxx X. Xxxxxxx.................................... Vice President/Secretary
and Director
Xxxxxxx Xxxxxxx.................................... Vice President
S-14
SCHEDULE 7.2
GOVERNMENT CONSENTS
1. In connection with the Acquisition, a notice is required to be filed under
the Investment Canada Act with Industry Canada following closing
2. In connection with the Senior Notes, a Form 45-501F1 under the Ontario
Securities Act and Form 45-103 under the Alberta Securities Act are
required to be filed following closing
3. In connection with the Amalgamation, Notices of Officers and Directors
(Form 3) and Notice of Registered Office (Form 6) are required to be filed
with Industry Canada
S-15
SCHEDULE 7.5B
REAL PROPERTY
(i) Fee interests:
Nil
(ii) Leasehold interests:
------------------------------------------------------------------------------------------------------------------
Location Legal Description Term Parties
------------------------------------------------------------------------------------------------------------------
Oil sands plant at Xxxx Meridian 4, Range 10, Expires Syncrude Canada Ltd., as landlord
Lake, Alberta Township 93, Section 8, North November 30, and North American Equipment
Half and South East, Regional 2009 Ltd., as tenant
Municipality of Wood Buffalo
Lease being assigned by North
American Equipment Limited to
NACG Acquisition Inc. before
closing
------------------------------------------------------------------------------------------------------------------
#2, 00000 Xxx. 00, Xxxx 7521620, Lot 3; Plan Expires Acheson Properties Ltd., as
Xxxxxx Xxxxx, Xxxxxxx 0000000, All that portion November 30, landlord and North American
taken for Extra Right of Way, 2007 Construction Group Inc., as
excepting thereout Plan tenant; North American Equipment
9720886, Railway; and Ltd., as subtenant
Descriptive Plan 9921104,
Xxxxx 0, Xxx 00, Xxxxxxxx
Xxxxxx
------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxxxxx Xxxxx, Xxx 0, Xxxxx/Xxx X, Xxxx Xxxxxxx Xxxxx 00, Xxxxxxx Properties Ltd., as
Xxxxxxxx Xxxxxxxxxx Xxxx, 00X-00000, Extension 0, 2008 landlord and North American
Regina, Sask. Municipality of Sherwood No. Construction Group Inc., as
159 tenant
------------------------------------------------------------------------------------------------------------------
2150 Steel Road, Prince Xxx 00, Xxxxxxxx Xxx 0000, Xxxxxxx March 31, Interior Industrial Constructors
Xxxxxx, B.C. Cariboo District Plan 27213 2004 Ltd. and North American
and Xxx X, Xxxxxxxx Xxx 0000, Xxxxxxxxxxxx Group, as tenant
Xxxxxxx Xxxxxxxx Xxxx 00000
------------------------------------------------------------------------------------------------------------------
2289 Alyth Place S.E., Plan 0211532, Block 1, Lot Expires Calgary Salvage Disposal Ltd., as
Calgary, Alta. 14, City of Calgary December 31, landlord and North American
2005 Construction Group Inc., as
tenant
------------------------------------------------------------------------------------------------------------------
4307 - 55th Street, Fort Xxx 0, Xxxxxxxx Xxx 0000, Xxxxxxx July 10, Xxxxxxx Properties Ltd., as
Xxxxxx, X.X. Peace River District, Plan 2008 landlord and North American
PGP46884 Construction Group Inc., as
tenant
------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxx, Xxxxx, Xxx 0, except: 1stly, west 75 (Note that the Xxxxxxxxx Pile Driving Inc., as
B.C. (Note that there is feet; 2ndly, Part subdivided mortgagee in tenant and Ocean Cloud
no actual lease for this by Plan 22258, District Lot possession has Investments Ltd., as Receiver in
location - the receiver, 132, Group 2, New served notice of Possession
acting for the mortgagee Westminster, District termination
Plan 826
------------------------------------------------------------------------------------------------------------------
S-16
------------------------------------------------------------------------------------------------------------------
Location Legal Description Term Parties
------------------------------------------------------------------------------------------------------------------
in possession, has District Plan 826 effective
recently proposed new December 31,
lease terms to the 2003)
tenant).
------------------------------------------------------------------------------------------------------------------
S-17
SCHEDULE 7.5C
MATERIAL SERIAL NUMBER EQUIPMENT
--------------------------------------------------------------------------
Type of Post-
Unit Number Asset Description Year Closing Interest Serial Number
--------------------------------------------------------------------------
MT300 Hitachi EH4500 2000 Ownership 402MDC76549
--------------------------------------------------------------------------
MT301 Hitachi EH4500 2000 Ownership 402MDC76550
--------------------------------------------------------------------------
MT302 Hitachi EH4500 2000 Ownership 402MDC76551
--------------------------------------------------------------------------
MT303 Hitachi EH4500 2000 Ownership 402MDC76662
--------------------------------------------------------------------------
MT304 Hitachi EH4500 2000 Ownership 402MDC76663
--------------------------------------------------------------------------
MT305 Hitachi EH4500 2001 Ownership 402MDC76664
--------------------------------------------------------------------------
MT306 Hitachi EH4500 2001 Ownership 402MDC76665
--------------------------------------------------------------------------
MT307 Hitachi EH4500 2001 Ownership 402MDC76705
--------------------------------------------------------------------------
MT331 Hitachi EH5000 2003 Ownership 402RDC76954
--------------------------------------------------------------------------
MT332 Hitachi EH5000 2003 Ownership 402RDC76983
--------------------------------------------------------------------------
MT333 Hitachi EH5000 2003 Ownership 402RDC76984
--------------------------------------------------------------------------
MT334 Hitachi EH5000 2003 Lease 402RDC76985
--------------------------------------------------------------------------
MT335 Hitachi EH5000 2003 Lease 402RDC76986
--------------------------------------------------------------------------
MT336 Hitachi EH5000 2003 Lease 402RDC76987
--------------------------------------------------------------------------
E1883 Hitachi EX1800 2001 Ownership 187P00532
--------------------------------------------------------------------------
E2576 Hitachi EX2500 2000 Ownership 184P000130
--------------------------------------------------------------------------
S5574 Hitachi EX5500 1998 Ownership 18AP000101
--------------------------------------------------------------------------
S5575 Hitachi EX5500 2000 Ownership 18AP000111
--------------------------------------------------------------------------
S5576 Hitachi EX5500 2003 Lease 18B00C00000508
--------------------------------------------------------------------------
S4006 O&K RH400 2002 Ownership 40006
--------------------------------------------------------------------------
S-18
SCHEDULE 7.5D
INTELLECTUAL PROPERTY
Alberta Trade Names
------------------------------------------------------------
Registration Number Current Declarant
------------------------------------------------------------
TN7326549 North American Construction Group Inc.
------------------------------------------------------------
TN7326556 North American Engineering Inc.
------------------------------------------------------------
TN7326606 North American Industries Inc.
------------------------------------------------------------
TN7326663 North American Pipeline Inc.
------------------------------------------------------------
TN7326713 North American Road Ltd.
------------------------------------------------------------
TN7326739 North American Services Ltd.
------------------------------------------------------------
TN7326754 North American Site Development Ltd.
------------------------------------------------------------
TN7326770 North American Construction Ltd.
------------------------------------------------------------
TN8774887 North American Services Inc.
------------------------------------------------------------
TN8774960 North American Enterprises Ltd.
------------------------------------------------------------
TN8775017 North American Mining Inc.
------------------------------------------------------------
S-19
SCHEDULE 7.8
MATERIAL CONTRACTS
1. project contract between Syncrude Canada Ltd. and North American
Enterprises Ltd. dated June 15, 2001 (Syncrude Canada Ltd. Upgrader
Expansion);
2. project contract between Syncrude Canada Ltd. and North American Mining
Inc. (Contract D1976-44) including change orders dated April 1, 1998;
3. Mining Services Agreement between Albian Sands Energy Inc. and North
American Mining Inc. dated March 1, 2002;
4. project contract with Encana - 2003 Pipeline Project (Data Room Index
reference 6.1.1.7);
5. project contract with Encana - Master Service and Supply Agreement (Data
Room Index reference 6.1.1.15);
6. Senior Note Indenture; and
7. Senior Notes.
S-20
SCHEDULE 9.1
EXISTING INDEBTEDNESS
1. Indebtedness related to the GE Leases.
2. Indebtedness relating to the following leases previously treated by the
Sellers as operating leases, but which will be treated as capital leases by
North American Construction Group Inc.:
--------------------------------------------------------------------------------
Unit Description Serial No.
--------------------------------------------------------------------------------
1019 2003, GMC 4 x 4 S/C 0XXXX00X00X000000
1020 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1021 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1022 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1023 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1024 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1025 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1026 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1027 Ford F350 Crew Cab 4x4 0XXXX00XX0XX00000
1028 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1029 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1030 Ford F150 4x4 S/C 0XXXX00X00XX00000
1031 Ford F150 4x4 S/C 0XXXX00X00XX00000
1032 Ford F150 4x4 S/C 0XXXX00X00XX00000
1033 Ford F150 4x4 S/C 0XXXX00X00XX00000
1035 GMC Savana 15 Passenger Van 0XXXX00X0X0000000
1036 F250 4X4 S/C 0XXXX00X00XX00000
1037 Ford F150 4x4 S/C 0XXXX00XX0XX00000
1038 Ford F150 4x4 S/C 0XXXX00X00XX00000
1039 Ford F150 4x4 S/C 0XXXX00X00XX00000
1040 Ford F150 4x4 S/C 0XXXX00X00XX00000
1041 Ford F150 4x4 S/C 0XXXX00X00XX00000
1042 Ford F150 4x4 S/C 0XXXX00X00XX00000
1043 Ford F450 0XXXX00X00XX00000
1044 Xxxx - Water Truck 0X0XX00X0XX000000
1045 Ford F150 4x4 S/C 0XXXX00X00XX00000
1046 Ford F150 4x4 S/C 0XXXX00X00XX00000
1047 Kenworth Steam Truck 0XXXXX0X0XX000000
1048 Xxxx - Water Truck 0X0XX00X0XX000000
1049 Xxxx - Water Truck 0X0XX00X0XX000000
1050 Ford Passenger Van 1FBSSS31L93HB46551
1051 Ford F150 4x4 S/C 0XXXX00X00XX00000
1052 Ford F150 4x4 S/C 0XXXX00XX0XX00000
1053 Ford F150 4x4 S/C 0XXXX00X00XX00000
1055 Ford 15 Passenger Van 0XXXX00X00XX00000
1056 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1057 Ford F250 CC 4x4 0XXXX00X00XX00000
1058 Fuel Truck Vehicle not yet received
S-21
1059 Fuel Truck Vehicle not yet received
1060 Ford F150 4x4 S/C 0XXXX00X00XX00000
1061 Ford F150 4x4 S/C 0XXXX00X00XX00000
1062 Ford F150 4x4 S/C 0XXXX00X00XX00000
1063 Ford F150 4x4 S/C 0XXXX00X00XX00000
1064 Fuel Truck Vehicle not yet received
1065 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1066 Ford F350 Crew Cab 4x4 1FTSW31L64EA300095
1067 Ford F350 Crew Cab 4x4 1FTSW31L44EA300094
1068 Ford F350 Crew Cab 4x4 1FTSW31L24EA300093
1069 Ford F150 4x4 S/C 0XXXX00XX0XX00000
1070 Ford F150 4x4 S/C 0XXXX00X00XX00000
1071 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1072 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1073 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1074 Ford F350 Crew Cab 4x4 0XXXX00X00XX00000
1075 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1076 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1077 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1078 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1079 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1080 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1081 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1082 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1083 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1084 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1085 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1086 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1087 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
1088 Ford F350 Crew Cab 4 x 4 0XXXX00X00XX00000
T91 Tridem Stepdeck, 53' 2J9W3A1FXK001010
T92 Tandem Flatdeck, 45' 0XXX00000XX000000
T93 Tandem Flatdeck, 45' 0X0X0X0XXX0000000
1089 Ford F150 4x4 S/C 0XXXX00000XX00000
1090 Ford F150 4x4 C/C 0XXXX00X00XX00000
0000 Xxxx X000 XX XX 0XXXX00X00XX00000
1092 Ford X000 XX XX 0XXXX00X00XX00000
--------------------------------------------------------------------------------
S-22
SCHEDULE 9.2
PERMITTED LIENS
Nil.
S-23
SCHEDULE 9.3
EXISTING INVESTMENTS
1. $25,000 will be invested by NACG Finance LLC in a public limited
partnership.
2. Joint venture: 49% equity interest in Noramac Ventures Inc., an Alberta
corporation, with the other 51% equity interest held by Fort XxXxx
Construction Ltd.
S-24
SCHEDULE 9.4
CONTINGENT OBLIGATIONS
None.
S-25
