EXHIBIT 10.1
EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
THE HOCKEY COMPANY
AND
SPORT MASKA INC.
(as Borrowers)
AND
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC
(as Agent and Lender)
AND
MONTREAL TRUST COMPANY
(as Paying Agent)
MARCH 14, 2001
TABLE OF CONTENTS
1. INTERPRETATION.............................................1
1.1 DEFINITIONS................................................1
1.2 HEADINGS AND TABLE OF CONTENTS............................13
1.3 ACCOUNTING TERMS..........................................13
1.4 CONVERSION TO OR FROM US DOLLARS..........................13
1.5 TIME......................................................13
1.6 GOVERNING LAW.............................................13
1.7 ABSENCE OF NOVATION.......................................13
2. THE CREDIT................................................14
2.1 OBLIGATION OF LENDERS AND TOTAL COMMITMENT................14
2.2 AVAILABILITY OF THE CREDIT................................14
2.3 COMMITMENT OF EACH LENDER.................................14
2.4 UTILIZATIONS PROPORTIONAL TO COMMITMENTS..................14
2.5 BORROWINGS UNDER THE CREDIT...............................15
2.6 NOTICES OF UTILIZATION....................................15
2.7 CONVERSIONS AND RENEWALS..................................15
2.8 USE OF PROCEEDS...........................................16
3. PROVISIONS APPLICABLE TO ACCEPTANCES AND BA LOANS.........16
3.1 PERIODS AND AMOUNTS.......................................16
3.2 DISCOUNT AND ACCEPTANCE FEE...............................17
3.3 SELECTION OF PERIODS......................................17
3.4 ACCEPTANCE FORMS..........................................17
3.5 AUTHORITY TO COMPLETE ACCEPTANCES.........................17
3.6 RECORDS RESPECTING ACCEPTANCES............................18
3.7 BA LOANS..................................................18
4. CONDITIONS PRECEDENT TO BORROWINGS........................18
4.1 CONDITIONS PRECEDENT......................................18
4.2 CONDITIONS PRECEDENT TO ALL BORROWINGS....................20
4.3 WAIVER OF CONDITIONS PRECEDENT............................21
4.4 RESTATEMENT OF REPRESENTATIONS AND WARRANTIES.............21
5. FEES AND INTEREST.........................................21
5.1 RESTRUCTURING FEE.........................................21
5.2 AGENCY FEE................................................21
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5.3 ACCEPTANCE FEES...........................................22
5.4 DOLLAR LOANS..............................................22
5.5 BA LOANS..................................................22
5.6 ADDITIONAL INTEREST ON FACILITY 2 LOANS AND ACCEPTANCES...22
5.7 CALCULATION OF RATES......................................23
5.8 INTEREST ON ARREARS.......................................23
6. REPAYMENTS................................................23
6.1 MANDATORY REPAYMENTS......................................23
6.2 OPTIONAL REPAYMENTS.......................................24
7. PLACE, MANNER, CURRENCY AND APPLICATION OF PAYMENTS.......24
7.1 PAYMENT TO LENDERS........................................24
7.2 PLACE.....................................................25
7.3 TIME......................................................25
7.4 CURRENCY OF PAYMENTS......................................25
7.5 PAYMENTS NET OF TAXES.....................................25
7.6 PAYMENTS TO PAYING AGENT ON BEHALF OF LENDERS.............27
7.7 APPLICATION OF PAYMENTS...................................27
7.8 JUDGMENT CURRENCY.........................................28
8. REPRESENTATIONS AND WARRANTIES............................28
8.1 CORPORATE EXISTENCE.......................................28
8.2 CORPORATE POWER...........................................28
8.3 CORPORATE ACTION..........................................29
8.4 COMPLIANCE WITH LAWS......................................29
8.5 ENVIRONMENTAL MATTERS.....................................29
8.6 ACCURACY OF INFORMATION...................................29
8.7 MATERIAL ADVERSE CHANGE...................................30
8.8 EFFECT OF THIS AGREEMENT..................................30
8.9 VALIDITY OF THIS AGREEMENT................................30
8.10 LITIGATION................................................31
8.11 DEFAULT...................................................31
8.12 FINANCIAL STATEMENTS......................................31
8.13 DEFECTS OF TITLE AND LIENS................................31
8.14 TAX RETURNS...............................................31
8.15 PENSIONS PLANS............................................31
8.16 INTELLECTUAL PROPERTY.....................................32
8.17 ASSETS OF JOFA HOLDING AB.................................33
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9. AFFIRMATIVE COVENANTS.....................................33
9.1 PAYMENT OF PRINCIPAL AND INTEREST.........................33
9.2 GOOD STANDING.............................................33
9.3 CONDUCT OF BUSINESS.......................................33
9.4 PAYMENT OF TAXES..........................................33
9.5 INSURANCE.................................................34
9.6 OBLIGATIONS UNDER CONTRACTS...............................34
9.7 TRANSACTIONS WITH AFFILIATES..............................34
9.8 BOOKS AND ACCOUNTS........................................35
9.9 REPORTING REQUIREMENTS....................................35
9.10 INSPECTIONS AND MONITORING................................36
9.11 COMPLIANCE WITH LAWS AND REGULATIONS......................37
9.12 APPROVALS.................................................37
9.13 REPRESENTATIONS AND WARRANTIES............................37
9.14 PERFECTION OF SECURITY....................................37
9.15 NOTIFICATION OF DEFAULT...................................37
9.16 HEDGING TRANSACTIONS......................................37
9.17 PENSION PLANS AND ERISA...................................38
9.18 BOARD REPRESENTATION......................................38
9.19 FIRPTA CERTIFICATION......................................38
9.20 SIGNATURE OF SALE AGREEMENT...............................38
10. NEGATIVE COVENANTS........................................38
10.1 NEGATIVE PLEDGE...........................................38
10.2 DISPOSITION OF ASSETS.....................................39
10.3 GUARANTEES................................................39
10.4 SUBSIDIARIES AND AMALGAMATIONS............................39
10.5 FISCAL YEAR...............................................40
10.6 INCURRENCE OF INDEBTEDNESS................................40
10.7 INSURANCE OF PREFERRED SHARES.............................40
11. FINANCIAL COVENANTS.......................................40
11.1 CAPITAL EXPENDITURES......................................41
11.2 DIVIDENDS.................................................41
11.3 INDEBTEDNESS TO EBITDA....................................41
11.4 SENIOR INDEBTEDNESS TO EBITDA.............................41
11.5 INTEREST COVERAGE RATIO...................................41
11.6 INTERCOMPANY DIVIDENDS....................................42
11.7 MINIMUM EBITDA............................................42
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12. SECURITY..................................................42
12.1 GRANTING OF SECURITY......................................42
12.2 PURPOSE OF THE SECURITY...................................42
12.3 RANKING OF THE SECURITY...................................42
12.4 EVIDENCE OF THE SECURITY..................................43
12.5 SECURITY BY FUTURE MATERIAL SUBSIDIARIES..................43
13. EVENTS OF DEFAULT.........................................43
13.1 EVENTS OF DEFAULT.........................................43
13.2 REMEDIES..................................................45
13.3 ADDITIONAL REMEDIES RESPECTING FACILITY 2.................46
13.4 NOTICE OF DEFAULT.........................................46
14. SHARING AND EQUALITY AMONG LENDERS.........................46
14.1 DISTRIBUTION AMONG LENDERS.................................46
14.2 EQUALITY AMONG THE LENDERS.................................47
14.3 OTHER SECURITY.............................................47
14.4 DIRECT PAYMENT TO A LENDER.................................47
14.5 ADJUSTMENTS AMONG LENDERS..................................47
15. THE AGENT AND THE LENDERS.................................47
15.1 APPOINTMENT OF THE AGENT AND PAYING AGENT.................47
15.2 ACTION BY AGENT...........................................48
15.3 LIABILITY OF THE AGENT AND THE PAYING AGENT...............48
15.4 NOTICES BY AGENT TO LENDERS...............................48
15.5 MANNER OF DISBURSEMENT....................................49
15.6 NON-CONTRIBUTION OF A LENDER..............................49
15.7 NOTICES OF DEFAULT........................................49
15.8 LIABILITY OF LENDERS......................................50
15.9 INDEMNIFICATION...........................................50
15.10 CREDIT DECISION...........................................50
15.11 LEGAL PROCEEDINGS AND ENFORCEMENT MEASURES................50
15.12 SHARING OF INFORMATION....................................51
15.13 NO ASSOCIATION AMONG LENDERS..............................51
15.14 SUCCESSOR AGENT AND PAYING AGENT..........................51
15.15 OPTION OF LENDERS TO REPLACE A LENDER.....................52
16. WAIVERS AND AMENDMENTS....................................52
16.1 AMENDMENTS AND WAIVERS WITH THE APPROVAL OF THE
MAJORITY LENDERS..........................................52
16.2 AMENDMENTS BY UNANIMOUS APPROVAL..........................52
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16.3 AMENDMENTS WITH THE APPROVAL OF THE AGENT.................53
16.4 BINDING EFFECT UPON LENDERS...............................53
16.5 FAILURE TO ACT............................................53
17. ASSIGNMENTS...............................................53
17.1 ASSIGNMENTS...............................................53
18. MISCELLANEOUS.............................................54
18.1 BOOKS AND ACCOUNTS........................................54
18.2 DETERMINATION.............................................55
18.3 NOTES.....................................................55
18.4 ORAL NOTICES OR INSTRUCTIONS..............................55
18.5 UNASSIGNABILITY BY BORROWER...............................55
18.6 EXPENSES..................................................55
18.7 COMPENSATION..............................................56
18.8 IRREVOCABILITY OF NOTICES OF UTILIZATION, CONVERSION,
RENEWAL OR REPAYMENT......................................56
18.9 IRREGULAR NOTICE OF UTILIZATION, CONVERSION, RENEWAL
OR REPAYMENT..............................................56
18.10 INDEMNIFICATION...........................................56
18.11 LIABILITY OF BORROWERS....................................58
18.12 PREVIOUS AGREEMENTS.......................................59
18.13 LANGUAGE..................................................59
18.14 SEVERABILITY..............................................59
19. NOTICES...................................................59
19.1 SENDING OF NOTICES........................................59
19.2 RECEIPT OF NOTICES........................................60
20. COUNTERPARTS.......................................................60
SCHEDULE "A".................................................................63
Commitments of Lenders.............................................63
SCHEDULE "B".................................................................64
Notice of Utilization (or Conversion or Renewal)...................64
SCHEDULE "C".................................................................65
Plans and Multiple Employer Plans..................................65
SCHEDULE "D".................................................................66
Intellectual Property..............................................66
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SCHEDULE "E".................................................................67
Officer's Certificate..............................................67
SCHEDULE "F".................................................................69
Intercompany Loans.................................................69
SCHEDULE "G".................................................................70
Certain Financial Tests............................................70
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AMENDED AND RESTATED CREDIT AGREEMENT entered into on the 14th day of March,
2001
AMONG THE HOCKEY COMPANY (formerly SLM
International, Inc.), a corporation
incorporated under the laws of Delaware and
SPORT MASKA INC., a corporation incorporated
under the laws of New Brunswick
(individually a "Borrower" and collectively
the "Borrowers");
AND CAISSE DE DEPOT ET PLACEMENT DU QUEBEC, a
corporation incorporated under the laws of
Quebec, acting as agent for the Lenders (in
such capacity, the "Agent");
AND MONTREAL TRUST COMPANY, a trust company
continued under the TRUST AND LOAN COMPANIES
ACT (Canada) (the "Paying Agent");
AND CAISSE DE DEPOT ET PLACEMENT DU QUEBEC, a
corporation incorporated under the laws of
Quebec, acting as a Lender ("Caisse").
WHEREAS the Borrowers, the Agent and Caisse entered into a
credit agreement dated November 19, 1998, as amended, pursuant to which
agreement a credit facility of $135,800,000 was made available to the Borrowers
(the "Existing Credit Facility");
WHEREAS the Borrowers, the Agent and Caisse wish to amend the
Existing Credit Facility to, INTER ALIA, extend the maturity date of the loans
made available thereunder, amend the rates of interest payable by the Borrowers
and provide for the issue of warrants to Caisse;
WHEREAS the parties wish to enter into this amended and
restated agreement to reflect such amendments.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement and the Schedules, as well as in all notices
pursuant to this Agreement, unless the context otherwise requires,
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1.1.1 "Acceptance" means, either a depository xxxx, as
defined in the Depository Bills and Notes Act
(Canada) or a xxxx of exchange, as defined in the
Bills of Exchange Act (Canada) drawn by a Borrower on
a Lender and accepted by such Lender;
1.1.2 "Affiliate" has the meaning ascribed to such term in
the Canada Business Corporations Act, as amended;
1.1.3 "Agent" means Caisse de depot et placement du Quebec
and any successor agent appointed pursuant to Section
15.14;
1.1.4 "Agreement" or "Credit Agreement" means this amended
and restated credit agreement and the schedules
attached hereto, as the same may be amended or
supplemented from time to time;
1.1.5 "Agreement and Plan of Reorganization" means the
agreement dated as of October 6, 1998 among THC (the
successor of SLM International, Inc.), Sport Maska
Inc., SLM Acquisition Corp., and Sports Holdings
Corp. providing for the purchase by Sport Maska Inc.
of the shares of Tropsport Acquisitions Inc. and the
reorganization by way of merger of Sports Holdings
Corp. and SLM Acquisition Corp.;
1.1.6 "BA Loan" means a Borrowing in Dollars with respect
to which interest is calculated in whole or in part
on the basis of the BA Loan Rate;
1.1.7 "BA Loan Rate" means, for each BA Loan, an interest
rate per annum equal to the average discount rate of
bankers' acceptances in Dollars having periods
identical to the period of such BA Loan as quoted on
Reuters Service page CDOR as of approximately 10:00
a.m. (Montreal time) on the date such BA Loan is
made;
1.1.8 "Borrowers" means THC and Sport Maska Inc. and
"Borrower" means either of them;
1.1.9 "Borrowings" means the Loans and the Acceptances
which are made available to the Borrowers pursuant to
this Agreement and includes any conversion or renewal
thereof in accordance with the terms of this
Agreement;
1.1.10 "Business Day" means a day on which banks and the
Paying Agent are open for normal business over the
counter in the City of Montreal, Province of
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Quebec, excluding Saturday and Sunday and any other
day which is a statutory holiday in such city;
1.1.11 "Caisse" means Caisse de depot et placement du
Quebec;
1.1.12 "Canadian Operating Credit" means the credit
agreement entered into on November 19, 1998 among
Sport Maska Inc. and Tropsport Acquisitions Inc., as
borrowers, General Electric Capital Canada Inc., as
agent and the lenders and credit parties referred to
therein, as same may be amended or supplemented from
time to time;
1.1.13 "Capital Expenditures" means, with respect to any
Person, all expenditures (by the expenditure of cash
or the incurrence of Indebtedness) by such Person for
any fixed assets or improvements or for replacements,
substitutions or additions thereto, that have a
useful life of more than one year and that are
required to be capitalized under GAAP, less any
amount of proceeds from any disposition of assets or
from property insurance to the extent that such
amount is used to make any such expenditure;
1.1.14 "Capitalized Interest" means additional interest
which will be calculated and capitalized at the end
of the period of the relevant Acceptance or BA Loan
in respect of which the Capitalized Interest has
accrued, or monthly on the first Business Day after
the end of each month in respect of Capitalized
Interest which has accrued on a Dollar Loan;
1.1.15 "Code" shall have the meaning provided in Section
8.14;
1.1.16 "Commitment" means, with respect to each Lender, its
obligation to make Borrowings available to the
Borrowers in an aggregate principal amount in Dollars
not exceeding its Lender's Proportion of the Facility
1 Commitment or the Facility 2 Commitment, as the
case may be;
1.1.17 "Credit" means the facilities provided by the Lenders
to the Borrowers pursuant to this Agreement;
1.1.18 "Default" means any event or circumstance which
constitutes an Event of Default or which, upon lapse
of time or the giving of a notice or both, would
constitute an Event of Default;
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1.1.19 "Discount" means, with respect to any Acceptance, the
amount equal to the face value of the Acceptance,
multiplied by the Discount Rate and by the actual
number of days in the period of such Acceptance and
divided by 365;
1.1.20 "Discount Rate" means, with respect to any Acceptance
being issued hereunder on any date, the average
discount rate of bankers' acceptances in Dollars
having periods identical to the period of such
Acceptance as quoted on Reuters Service page CDOR as
of approximately 10:00 a.m. (Montreal time) on such
day;
1.1.21 "Dollar" and the symbol "$" mean lawful money of
Canada;
1.1.22 "Dollar Loan" means a loan denominated in Dollars and
bearing interest solely at the Prime Rate, plus the
margin provided for in this Agreement;
1.1.23 "EBITDA" means for any fiscal period of THC:
(a) the consolidated net income (or net loss) of THC
and its Subsidiaries for such period, computed
and calculated in accordance with GAAP without
giving effect to any extraordinary or unusual
gains or losses, any gains or losses from the
sale or disposition of assets other than in the
ordinary course of business, or any
extraordinary, unusual or non-recurring expenses
or charges, including, without limitation,
restructuring charges (which restructuring
charges shall not exceed US$2,900,000 for fiscal
year 2001) and all fees paid to the consultant
appointed by the Agent pursuant to Section 9.10
PLUS (or MINUS),
(b) to the extent that any of the items referred to
in any of clauses (i) through (iii) below were
deducted (or added) in calculating such net
income:
i) consolidated interest expense
(including, without limitation,
amortization or charges of deferred
financing fees, amortization of the
Restructuring Fee, premiums or interest
rate protection agreements and original
issue discounts (including, without
limitation, discounts or Acceptances),
letter of credit fees, the portion of
any capital lease payments which are
allocated to interest expense and
interest paid in kind) of THC and its
Subsidiaries for such period;
ii) income, capital or large corporation
tax expense or benefit of THC and its
Subsidiaries for such period;
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iii) the consolidated amount of all
depreciation and amortization and all
non-cash charges of THC and its
Subsidiaries for such period, PLUS;
(c) all fixed and all calculable dividend payments
on preferred stock;
1.1.24 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued
thereunder;
1.1.25 "ERISA Event" means (a) (i) the occurrence of a
reportable event, within the meaning of Section
4043(c) of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event
has been waived by the PBGC or (ii) the requirements
of Section 4043 (b) of ERISA apply with respect to a
contributing sponsor, as defined in Section 4001 (a)
(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11) or (13) of Section 4043 (c)
of ERISA is reasonably expected to occur with respect
to such Plan within the following 30 days; (b) the
application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of
any Plan of a notice of intent to terminate such
Plan, pursuant to Section 4041 (a) (2) of ERISA
(including any such notice with respect to a plan
amendment referred to in Section 4041 (e) of ERISA);
(d) the cessation of operations at a facility of any
Borrower or any Material Subsidiary in the
circumstances described in Section 4062 (e) of ERISA;
(e) the withdrawal by any Borrower or any Material
Subsidiary from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as
defined in Section 4001 (a) (2) of ERISA; (f) the
conditions for imposition of a lien under Section 302
(f) of ERISA shall have been met with respect to any
Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan
pursuant to Section 307 of ERISA; or (h) the
institution by the PBGC of proceedings to terminate a
Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in
Section 4042 of ERISA that constitutes grounds for
the termination of, or the appointment of a trustee
to administer, such Plan, which in any such case
could reasonably be expected to have a Material
Adverse Effect;
1.1.26 "Event of Default" means any of the events or
circumstances set out in Section 13.1;
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1.1.27 "Facility 1" means the facility in the maximum amount
of $90,000,000 made available to the Borrowers by the
Lenders pursuant to Section 2.1;
1.1.28 "Facility 1 Commitment" means the aggregate amount of
the credit available under Facility 1 as may be
adjusted from time to time as a result of repayments
made pursuant to this Agreement;
1.1.29 "Facility 1 Loans" mean the aggregate of the Dollar
Loans and the BA Loans made available under Facility
1;
1.1.30 "Facility 1 Maturity Date" shall mean June 30, 2004;
1.1.31 "Facility 2" means the facility in the maximum
aggregate amount equal to $45,800,000 plus the total
amount of Capitalized Interest made available to the
Borrowers by the Lenders pursuant to Section 2.1;
1.1.32 "Facility 2 Commitment" means the aggregate amount of
the credit available under Facility 2 as may be
adjusted from time to time as a result of repayments
made pursuant to this Agreement;
1.1.33 "Facility 2 Loans" mean the aggregate of the Dollar
Loans and the BA Loans made available under Facility
2;
1.1.34 "Facility 2 Maturity Date" shall mean October 31,
2002;
1.1.35 "GAAP" means generally accepted accounting principles
in the United States of America;
1.1.36 "Guarantee" means, with respect to any Person,
without duplication, any obligation, contingent or
otherwise (other than an endorsement for collection
or deposit in the ordinary course of business or a
guarantee of the obligations of a Subsidiary of such
Person in respect of trade payables incurred in the
ordinary course of business or resulting from banking
cash management systems) directly or indirectly
guaranteeing the payment or other performance of any
indebtedness or obligation of any other Person or
protecting a creditor of such Person from a loss
resulting from the failure by such Person to pay or
perform such indebtedness or obligation;
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1.1.37 "Indebtedness" means, with respect to any Person,
without duplication: (i) indebtedness for monies
borrowed or raised, or for the purchase price of
property, goods or services more than 90 days past
due (but excluding such past due payables being
diligently contested in good faith or the non-payment
of which is being tolerated and for so long as such
tolerance lasts), and including obligations under
agreements relating to the issuance of letters of
credit or acceptance financing, (ii) obligations as
lessee under leases which shall have been or should
be recorded as capital leases in accordance with
GAAP, and (iii) obligations under Guarantees by such
Person in respect of liabilities and obligations
(contingent or otherwise) with respect to (i) and
(ii) above; for greater certainty, Indebtedness shall
not include trade debt incurred in the ordinary
course of business (except to the extent included in
(i) above) or monies borrowed or raised to the extent
of the amount of any letter of credit or guarantee of
any other Person which secures the repayment of such
monies and which is included in (i) above;
1.1.38 "Intercreditor Agreement" means, the agreement dated
as of November 19, 1998 and made among Caisse,
General Electric Capital Canada Inc., General
Electric Capital Corporation, the Borrowers and the
other parties named herein, as same may be amended or
supplemented from time to time;
1.1.39 "Interest Coverage Ratio" means, at any date of
determination, the ratio of (a) EBITDA to (b) net
interest expense (whether cash or non cash) of THC
and its Subsidiaries during the four consecutive
fiscal quarters most recently ended for which
financial statements are required to be delivered to
the Agent;
1.1.40 "Lenders" means Caisse, and the other lenders which
become parties hereto by way of an assignment made
pursuant to Section 17, in each case together with
their successors and permitted assigns, and "Lender"
means any of them;
1.1.41 "Lender's Proportion" means, with respect to each
Lender, its respective proportion of the Total
Commitment, the Facility 1 Commitment and the
Facility 2 Commitment as set out opposite its name in
Schedule "A", as may be adjusted from time to time as
a result of a repayment made pursuant to this
Agreement or an assignment made pursuant to Section
17.1;
1.1.42 "Loans" means the aggregate of the Dollar Loans and
the BA Loans;
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1.1.43 "Majority Lenders" means any group of Lenders whose
Commitments amount in the aggregate to at least 60%
of the Total Commitment;
1.1.44 "Material Adverse Effect" shall mean a material
adverse effect on the business, assets, property or
condition (financial or otherwise, including without
limitation any material adverse effect by virtue of
any environmental liability or occurrence, or the
receipt from any governmental authority of any
notice, compliant or order to that effect) of (a) THC
and its Subsidiaries taken as a whole, (b) Sport
Maska Inc., (c) KHF Finland Oy, or (d) Jofa AB or on
the ability of the Borrowers to perform their
obligations hereunder;
1.1.45 "Material Subsidiaries" means the following
corporations: Maska U.S., Inc., Sports Holdings
Corp., SLM Trademark Acquisition Corp., SLM Trademark
Acquisition Canada Corporation, KHF Finland Oy, WAP
Holdings Inc., Jofa Holding AB, Jofa AB, KHF Sports
Oy, and any other Subsidiary of a Borrower having
assets or gross annual income (on a four quarter
basis) in excess of $1,000,000, provided, however,
that any Subsidiary which ceases to possess such
assets or have such gross annual income shall
nonetheless remain a Material Subsidiary;
1.1.46 "Multiple Employer Plan" means a Plan which is a
"multiemployer plan" as defined in Section 4001(a)(3)
of ERISA;
1.1.47 "Paying Agent" shall mean Montreal Trust Company and
any successor paying agent appointed pursuant to
Section 15.4;
1.1.48 "Paying Agent's Branch of Account" means the office
of the Paying Agent located at the address opposite
its name on the signature pages hereto or the branch
as may be designated by the Paying Agent from time to
time by notice to the Agent and the Borrowers;
1.1.49 "PBGC" shall mean the Pension Benefit Guarantee
Corporation established under ERISA, or any successor
thereto;
1.1.50 "Permitted Encumbrances" means:
(i) deficiencies or defects in title, liens,
mortgages, hypothecs, charges, priorities,
charges and encumbrances, whether arising by
law or by
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contract, existing on the date of this
Agreement, or created, discovered or arising
subsequently and which do not result (except
as otherwise permitted under this Agreement)
from a voluntary act or the consent of THC
or of a Subsidiary of THC,
(ii) PMO's,
(iii) pledges or deposits made in the ordinary
course of business in connection with bids,
tenders, performance bonds, surety, appeal
or custom bonds, contracts (other than to
raise money or for the repayment of money
borrowed) or leases or to secure statutory
obligations,
(iv) liens or priorities arising by operation of
law and which have not become enforceable or
relate to obligations not due or delinquent
or are being contested diligently and in
good faith,
(v) minor encumbrances, including, without
limitation, easements, rights of way,
servitudes or other similar rights in land
granted to or reserved by other Persons, or
zoning or other restrictions as to the use
of real or immoveable properties, which
encumbrances do not, in the aggregate,
materially affect the value of the said
properties or materially impair their use in
the operation of the business of a Borrower
or of its Subsidiaries,
(vi) liens, mortgages, hypothecs, charges,
priorities and encumbrances, ranking junior
to the Security, whether by express
subordination or by operation of law,
incurred, created or assumed by a Borrower
or a Subsidiary of the Borrower and relating
to the leasing of any property, movable or
immovable,
(vii) the right reserved to or vested in any
municipality or governmental or other public
authority by the terms of any lease,
license, franchise, grant or permit or by
any statutory provision, to terminate any
such lease, license, franchise, grant or
permit, or to require annual or other
periodic payments as a condition of the
continuance thereof,
(viii) security given by THC or a Subsidiary of THC
in the ordinary course of its business to a
public utility or any municipality or
governmental or other
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public authority when required by such
utility or municipality or other authority
in connection with its operations,
(ix) the reservations, limitations, provisos and
conditions, if any, expressed in any
original grants from the Crown,
(x) the Security,
(xi) security granted by the Borrowers and their
Affiliates named in the Intercreditor
Agreement to secure the indebtedness and
other obligations under the Canadian
Operating Credit or the US Operating Credit
and the guarantees thereof, but, as to the
principal amount so secured or guaranteed,
only to the maximum aggregate amount of
US$70,000,000, and any renewal thereof,
provided that the principal amount secured
by any such renewal does not exceed the
unpaid principal amount of the indebtedness
which was secured by such security or
guarantees immediately before its renewal;
(xii) carriers', warehousemen's, suppliers' or
other similar possessory liens arising in
the ordinary course of business that are
unregistered and secure amounts that are not
yet due and payable;
(xiii) any attachment or judgment lien not
constituting an Event of Default under
Section 13.1.11 and which has not become
enforceable or is being contested diligently
and in good faith;
provided that, at the time when any Permitted
Encumbrance is created or granted, the maximum
aggregate amount of the indebtedness or obligations
secured by Permitted Encumbrances (exclusive of the
pledges and deposits referred to in paragraph (iii),
the liens or priorities referred to in paragraph
(iv), PMO's, the Security, the security referred to
in paragraph (xi), and liens or priorities arising by
operation of law and which have not become
enforceable or relate to obligations not due or
delinquent or are being contested diligently and in
good faith) shall not exceed US $5,000,000;
1.1.51 "Person" means and includes an individual, a
partnership, a corporation, a joint stock company, a
trust, an unincorporated association, a joint venture
or other entity or a government or any agency or
political subdivision thereof;
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1.1.52 "Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA covered by Title IV of
ERISA;
1.1.53 "PMO's" means Purchase Money Obligations;
1.1.54 "Prime Rate" means, on any day, the rate of interest
per annum that is equal to the greater of:
(i) the rate of interest publicly announced by
Royal Bank of Canada from time to time as
being its reference rate then in effect for
determining interest rates for commercial
loans in Dollars made by it in Canada; and
(ii) the annual rate of interest equal to the
average of the "BA 1 month" rates applicable
to bankers' acceptances in Dollars displayed
and identified as such on the "Reuters
Screen CDOR Page" (as defined in the
International Swap and Derivatives
Association, Inc. definitions, as modified
and amended from time to time) (the "CDOR
Rate") as at approximately 10:00 a.m. on
such day, or if such day is not a Business
Day then on the immediately preceding
Business Day, plus 1.0% per annum; provided
that if such rates do not appear on the
Reuters Screen CDOR Page as contemplated,
then the CDOR Rate on any day shall be
calculated as the arithmetic average of the
30-day discount rates applicable to bankers'
acceptances in Dollars quoted by three major
Canadian Schedule 1 chartered banks chosen
by the Paying Agent as of approximately
10:00 a.m. on such day, or if such day is
not a Business Day, then on the immediately
preceding Business Day;
1.1.55 "Purchase Money Obligations" means:
(i) any security interest, lien, mortgage,
hypothec, charge, encumbrances
(collectively, "Security Interest") created,
incurred or assumed by a Borrower or a
Subsidiary of a Borrower for indebtedness
incurred in connection with, or created to
provide a Borrower or a Subsidiary of a
Borrower with funds to pay, the purchase
price of any immoveable or moveable property
(including pursuant to a lease which is
capitalized in accordance with GAAP),
provided that such Security Interest is
limited to the property so acquired and is
created, incurred or assumed substantially
concurrently with the acquisition of such
property, and
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(ii) any renewal or extension of any such
Security Interest and any new Security
Interest created on the same property in
replacement of any such Security Interest
provided that the principal amount secured
by any such renewal, extension or new
Security Interest does not exceed the unpaid
principal amount of the indebtedness which
was secured by such Security Interest
immediately before its extension, renewal or
replacement,
up to a maximum aggregate outstanding amount at any
time of such secured debt of US$5,000,000;
1.1.56 "Related Agreements" means the Warrant Agreement
entered between THC and Caisse together with the
Warrant Certificates issued thereunder, the
Registration Rights Agreement entered into between
THC and Caisse, the Sale Agreement entered into among
THC, Xxxxxx, XX Acquisition LLC and certain
shareholders of THC and the Stockholders' Agreement
entered into among THC, Caisse and WS Acquisition
LLC, all of which agreements have been entered into
as of the date hereof;
1.1.57 "Restructuring Fee" shall have the meaning set forth
in Section 5.1
1.1.58 "Security" means any and all security and guarantees
to be provided to the Lenders pursuant to Article 12;
1.1.59 "Subsidiary" means, with respect to a Person, any
corporation of which at least a majority of the
outstanding shares to which there is attached voting
power under ordinary circumstances to elect a
majority of the board of directors of said
corporation, shall at the relevant time be owned
directly or indirectly by such Person, one or more
Subsidiaries of such Person, or any combination
thereof; for greater certainty the Subsidiaries of
THC shall be deemed to include Sports Holdings Corp.
and its Subsidiaries;
1.1.60 "THC" means The Hockey Company (formerly SLM
International, Inc.);
1.1.61 "Total Commitment" means the aggregate amount of the
Credit, as may be adjusted from time to time as a
result of a repayment made pursuant to this
Agreement;
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1.1.62 "US Operating Credit" means the credit agreement
entered into on November 19, 1998 among SHC Hockey,
Inc. and Maska U.S., Inc., as borrowers, General
Electric Capital Corporation, as agent, and the
lenders and credit parties referred to therein, as
same may be amended or supplemented from time to
time;
1.1.63 "Withdrawal Liability" means withdrawal liability as
determined in accordance with Title IV of ERISA.
1.2 HEADINGS AND TABLE OF CONTENTS
The headings and the Table of Contents are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
1.3 ACCOUNTING TERMS
Unless otherwise provided, (i) accounting terms and
expressions used herein shall have the meaning assigned to them under GAAP in
effect from time to time, provided that all calculations shall be made according
to the same principles utilized in the preparation of the financial statements
referred to in Section 8.12, and (ii) compliance with covenants shall be
determined on a consolidated basis.
1.4 CONVERSION TO OR FROM US DOLLARS
Where a Dollar amount has to be converted or expressed in US
dollars, or where its US dollar equivalent has to be determined (or vice-versa),
the calculation is made at the relevant date at the Bank of Canada rate as
displayed and identified as such on the Reuters Screen BOFC Page for US dollars
against Dollars (or vice-versa) at or around noon on such date.
1.5 TIME
Except where otherwise indicated in this Agreement, any
reference to a time shall mean local time in the City of Montreal, Province of
Quebec.
1.6 GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with laws of the Province of Quebec and the laws of Canada applicable
therein.
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1.7 ABSENCE OF NOVATION
The parties acknowledge and expressly agree that the
amendments to the Existing Credit Facility made pursuant to this Agreement do
not novate the Existing Loan Agreement and that all Security provided to the
Lenders pursuant to or in connection with the Existing Credit Facility shall
remain in full force and effect and continue to secure the credit made available
hereunder.
2. THE CREDIT
2.1 OBLIGATION OF LENDERS AND TOTAL COMMITMENT
Relying on each of the representations and warranties set out
herein and subject to the terms and conditions of this Agreement, the Lenders,
individually, and not solidarily (that is to say, not jointly and severally),
agree to make credit facilities (the "Credit") available to the Borrowers by way
of their respective Lender's Proportion of the Facility 1 Commitment and
Lender's Proportion of the Facility 2 Commitment. The Facility 1 Commitment
shall not exceed $90,000,000 and the Facility 2 Commitment shall not exceed the
aggregate of $45,800,000 plus the total amount of Capitalized Interest. The
Total Commitment for the Credit shall be $135,800,000 plus the total amount of
Capitalized Interest.
2.2 AVAILABILITY OF THE CREDIT
Facility 1 and Facility 2 shall not revolve and shall be
repayable as provided for herein and on the Facility 1 Maturity Date and the
Facility 2 Maturity Date, respectively. The Borrowers acknowledge that Facility
1 and Facility 2 have been fully utilized and that no new advances are to be
made under this Agreement
2.3 COMMITMENT OF EACH LENDER
Facility 1 and Facility 2 shall be made available to the
Borrowers by each Lender in the same proportion as the Commitment of each Lender
is to its respective Facility1 Commitment and Facility 2 Commitment.
2.4 UTILIZATIONS PROPORTIONAL TO COMMITMENTS
Any utilization of the Credit shall be made through the Paying
Agent and, to the extent reasonably possible, utilizations shall be, as to each
Lender and each Facility, in the same proportion as its Commitment is to its
respective Facility1 Commitment and Facility 2 Commitment. If it is not
practicable to allocate a Borrowing in such manner, or to allocate a Borrowing
by way of Acceptances or BA Loans
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so that the aggregate amount of Acceptances or BA Loans, as the case may be,
required to be accepted or made by a Lender is a whole multiple of $100,000, the
Paying Agent is authorized by the Borrowers and the Lenders to make such
allocations with respect to such Borrowings without amendment of the Facility1
Commitment or Facility 2 Commitment of each Lender as the Paying Agent, in its
sole discretion, determines to be equitable in the circumstances.
2.5 BORROWINGS UNDER THE CREDIT
The Borrowers may utilize Facility 1 and Facility 2 (and
re-utilize same as provided herein) pursuant to the following forms of
Borrowings or a combination thereof:
2.5.1 Dollar Loans,
2.5.2 BA Loans, and
2.5.3 Acceptances.
2.6 NOTICES OF UTILIZATION
Prior to each utilization of the Credit by a Borrower, such
Borrower shall give to the Agent and the Paying Agent a notice of utilization
specifying:
2.6.1 the selected form of Borrowing;
2.6.2 the amount of the Borrowing, which shall be in a
minimum amount of $10,000,000;
2.6.3 the date of the Borrowing, which shall be a Business
Day; and
2.6.4 to the extent applicable, the period of the
Borrowing, which shall comply with the provisions of
Article 3, in the case of a Borrowing by way of
Acceptances or BA Loans;
and the notice shall be given in writing in the form attached as Schedule "B" by
12:00 (noon) on the second Business Day prior to an issue of Acceptances or a BA
Loan, and the first Business Day prior to a Dollar Loan.
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2.7 CONVERSIONS AND RENEWALS
2.7.1 A Borrower may convert from Loans to Acceptances (and
vice versa) and renew Acceptances, provided a notice
of conversion or renewal is given to the Agent;
2.7.2 Section 2.6 shall apply to a conversion or a renewal;
2.7.3 Notwithstanding Section 2.7.1, Acceptances and BA
Loans may not be converted prior to the maturity of
their respective periods. In addition, unless they
converted or renewed, as the case may be, at the
maturity date of their respective periods,
Acceptances and BA Loans shall then become Dollar
Loans.
2.8 USE OF PROCEEDS
The proceeds of the utilizations shall be used to finance,
directly or indirectly, the completion of the transactions and the payment of
related fees provided in the Agreement and Plan of Reorganization.
3. PROVISIONS APPLICABLE TO ACCEPTANCES AND BA LOANS
3.1 PERIODS AND AMOUNTS
Acceptances
3.1.1 shall be for periods of one, two, three or six months
and shall mature on a Business Day;
3.1.2 shall be denominated in Dollars, in amounts of
$100,000 per Lender or multiples thereof;
3.1.3 shall be issued in whole multiples of $1,000,000,
with a minimum amount of $5,000,000 per issue;
3.1.4 shall form part of the Borrowings for their face
amount (whether they have been accepted by a Lender
or by a financial institution which is not a Lender);
3.1.5 do not carry any days of grace; and
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3.1.6 may be held by the Lenders for their own account or
may be sold to third parties.
3.2 DISCOUNT AND ACCEPTANCE FEE
3.2.1 The amount that shall be disbursed to a Borrower upon
an issue of Acceptances is the aggregate face amount
of the Acceptances so issued, less the Discount and
the acceptance fee applicable to such Acceptances.
3.2.2 In the case of a conversion into Acceptances or
renewal of Acceptances, the Borrower concerned shall
concurrently with the conversion or renewal pay to
the Paying Agent an amount equal to the aggregate
face amount of the Acceptances issued upon such
conversion or renewal; the amount so paid to the
Paying Agent shall be applied on the portion of the
Borrowings having been so converted, or, as the case
may be, on the Acceptances so renewed.
3.2.3 Except for Acceptances renewed or converted under
Section 3.2.2, and subject to Section 2.7.3, the
Borrower concerned shall pay to the Paying Agent the
face amount of each Acceptance issued by it on the
maturity date thereof.
3.3 SELECTION OF PERIODS
3.3.1 Periods of Acceptances shall be selected in order
that no mandatory repayments to be made under Section
6.1 shall result in a payment of Acceptances prior to
their maturity dates.
3.3.2 Periods of Acceptances shall be selected so that no
more than 10 different issues of Acceptances shall be
outstanding at the same time.
3.4 ACCEPTANCE FORMS
No notice of utilization, conversion or renewal in respect of
Acceptances shall be effective if a Lender which is a bank notifies the Agent
and the Paying Agent, on or before the expiry of the notice period referred to
in Section 2.6, that the Borrower concerned has not provided such Lender with
the Acceptances to be then issued by such Lender.
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3.5 AUTHORITY TO COMPLETE ACCEPTANCES
In accordance with the instructions given from time to time by
the Borrowers to the Agent and the Paying Agent for onward conveyance to the
Lenders, each Lender is authorized to complete Acceptance forms in the form
generally used by such Lender and to provide its acceptance thereon for the
purposes of giving effect to notices of utilizations by way of Acceptances.
Acceptances so completed, signed, endorsed and negotiated on behalf of a
Borrower by any Lender shall bind such Borrower as fully and effectively as if
those acts were performed by an authorized officer of such Borrower. Any
executed Acceptances which are held by any Lender need only be held in
safekeeping with the same degree of care as if they were that Lender's own
property and that Lender was keeping them at the place at which they are to be
held. Neither the Agent, the Paying Agent nor any Lender nor any of their
respective directors, officers, employees or representatives shall be liable for
any action taken or omitted to be taken by any of them under this Section 3.5
except for its own negligence or willful misconduct.
3.6 RECORDS RESPECTING ACCEPTANCES
Each Lender shall maintain a record with respect to
Acceptances accepted by it hereunder, cancelled at their respective maturities
or voided by it for any reason. Each Lender further agrees to retain the
foregoing records in the manner and for the statutory periods provided in the
various provincial or federal statutes and regulations which apply to such
Lender.
3.7 BA LOANS
Notwithstanding anything contained in this Agreement or any
other document, if a Lender is not a bank and accordingly is unable to issue
Acceptances pursuant to any notice of utilization, such Lender shall make
available to a Borrower prior to 12:00 (noon) on the applicable borrowing date,
a BA Loan in the principal amount equal to such Lender's Proportion of the
aggregate amount of Borrowings requested from the Lenders by way of Acceptances
pursuant to such notice of utilization. Such BA Loan shall have the same term as
the Acceptances for which it is a substitute and, for greater certainty, shall
permit such Lender to obtain the same effective yield as if such Lender had
accepted and purchased an Acceptance, a Borrower agreeing to pay to such Lender
an amount equal to the applicable acceptance fee and to prepay, on the date the
BA Loan is made, interest on such BA Loan at the rate provided in Section 5.5,
such interest payment to be made by such Lender deducting the amount of such
interest from the principal amount of such BA Loan. The net amount to be made
available by each Lender to a Borrower for a BA Loan shall be the same as the
amount that such Lender would have been required to make available to a Borrower
on such date had such Lender been a Lender that provided Borrowings through
Acceptances.
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4. CONDITIONS PRECEDENT TO BORROWINGS
4.1 CONDITIONS PRECEDENT
The obligation of the Lenders to continue to make available
the credit made pursuant to the Existing Credit Facility as amended hereunder is
conditional upon the delivery of the following to the Agent, in form and
substance reasonably satisfactory to all Lenders, and in sufficient copies for
distribution to each Lender:
4.1.1 a duly executed copy of this Agreement together with
a promissory note stated to be payable in accordance
with and subject to this Agreement in favour of any
Lender which so requests in the amount of its
aggregate Commitment hereunder;
4.1.2 a certified copy of the constating documents of the
Borrowers and each Material Subsidiary, if such
constating documents have changed in any material
respect since the date of the Existing Credit
Facility;
4.1.3 a duly certified copy of the resolution or
resolutions of the board of directors of each
Borrower relating to the authority of such Borrower
to execute and deliver, and to perform its
obligations under this Agreement and the instruments,
agreements, certificates and papers and other
documents provided for or contemplated herein, and
relating to the manner in which the foregoing
documents are to be executed and delivered;
4.1.4 a certificate of the secretary of each Borrower
setting forth specimen signatures of the individuals
authorized to sign on its behalf this Agreement and
the instruments, agreements, certificates, papers and
other documents provided for or contemplated herein;
4.1.5 a certificate of each Borrower to the effect that (i)
the representations and warranties contained herein
are true and accurate in all material respects and
that there is no Default or Event of Default, such
certificate to include, in the case of THC,
calculations showing compliance, on a consolidated
basis and as of December 31, 2000, with the financial
tests set forth in this Agreement and (ii) no
material adverse change has occurred in the business
or financial condition of THC and its Subsidiaries,
taken as a whole, since December 31, 2000;
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4.1.6 a report from THC providing details of all material
Permitted Encumbrances referred to in paragraphs (ii)
and (viii) of Section 1.1.50 which were not set out
in the Schedule to the Existing Credit Agreement;
4.1.7 a copy of all amendments to the Canadian Operating
Credit and the US Operating Credit;
4.1.8 copies of all regulatory approvals and consents which
are required to be obtained from any governmental
authority in order to complete the transactions
contemplated by the Agreement;
4.1.9 an executed copy of each of the Related Agreements
together with a copy of a Consent and Waiver from the
Estate of Xxxxxx Xxxxx;
4.1.10 a certificate of the Chief Operating Officer of THC
that the consolidated EBITDA of THC for the year
ended December 31, 2000 was not less than
US$18,000,000;
4.1.11 copy of the unaudited internal consolidated financial
statements of THC for the year ended December 31,
2000;
4.1.12 the favourable opinion of counsel to the Borrowers as
to corporate status and capacity, their authority and
legal right to enter into and perform their
respective obligations under this Agreement and the
Related Agreements, as to the validity, binding
effect and enforceability of this Agreement and the
Related Agreements;
4.1.13 a copy of all shareholder agreements between
Wellspring Acquisition, LLC and the shareholders of
THC, the terms of which shall be satisfactory to the
Agent;
4.1.14 the favourable opinion of counsel to the Lenders as
to the validity, binding effect and enforceability of
this Agreement and the Related Agreements; and
4.1.15 confirmation that the Borrowers have paid all fees
due to the Agent or the Lenders in respect of this
Agreement.
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4.2 CONDITIONS PRECEDENT TO ALL BORROWINGS
The Lenders shall not have any obligation to make any
Borrowings available to the Borrowers or to permit the Borrowers to convert
existing Borrowings into, or to renew, Acceptances if:
4.2.1 the Agent and the Paying Agent shall not have
received the timely notice of utilization (or
conversion or renewal) required pursuant to Section
2.6, or
4.2.2 if a Default shall have occurred and be continuing,
provided that Acceptances and BA Loans may become Dollar Loans pursuant to
Section 2.7.3 even after the occurrence of a Default.
4.3 WAIVER OF CONDITIONS PRECEDENT
The terms and conditions of Sections 4.1 and 4.2 are inserted
for the sole benefit of the Lenders and may be waived by the Agent in conformity
with Article 16 in whole or in part, with or without terms or conditions, in
respect of any Borrowings without affecting the rights of the Lenders against
the Borrowers and the Material Subsidiaries and without prejudicing the right of
the Agent to assert such terms and conditions in whole or in part in respect of
any other Borrowing.
4.4 RESTATEMENT OF REPRESENTATIONS AND WARRANTIES
Any request for Borrowings (including through a conversion or
a renewal) and any notice of utilization (or conversion or renewal) shall be
deemed to include a representation and warranty that the representations and
warranties contained herein, other than the representations made in Sections
8.6, 8.12, 8.15(i) and the first and last sentences of Section 8.16, are still
true and accurate in all material respects as at the date of the request or
notice.
5. FEES AND INTEREST
5.1 RESTRUCTURING FEE
The Borrowers shall pay to Caisse for its own account a
restructuring fee for the amount and payable in such manner as THC and Caisse
have agreed prior to the execution of this Agreement (the "Restructuring Fee").
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5.2 AGENCY FEE
The Borrowers shall pay to the Agent, for its own account, an
agency fee in the amount previously agreed to in writing between the Borrowers,
Caisse and the Agent. Such agency fee shall be paid on November 18 of each year,
provided that Borrowings remain outstanding hereunder. Such agency fee shall
include the annual fee payable by the Agent to the Paying Agent in the amount
and payable in such manner as the Agent and the Paying Agent have agreed prior
to the execution of this Agreement.
5.3 ACCEPTANCE FEES
The Borrowers shall pay concurrently with the issue of each
Acceptance an acceptance fee at the annual rate of 6% calculated on the face
amount of such Acceptance and for the number of days included in the period of
same. Such acceptance fees may be deducted from the proceeds of the issue of any
such Acceptance, as provided in Section 3.2.1.
5.4 DOLLAR LOANS
Any Dollar Loan shall bear interest at an annual rate equal to
the Prime Rate in effect from time to time, plus 5%. The interest shall be
payable monthly in arrears on the first Business Day after the end of each
month. Notwithstanding the foregoing, the Borrowers shall pay interest accrued
on Dollar Loans up to and including the date hereof on the Business Day after
the day on which this Agreement is executed.
5.5 BA LOANS
Any BA Loan shall bear interest at an annual rate equal to the
BA Loan Rate in effect from time to time plus 6%. The interest shall be
calculated on the amount of such BA Loan and for the number of days included in
the period of same. Such interest shall be payable in advance and may be
deducted from the amount of such BA Loan as provided in Section 3.7.
5.6 ADDITIONAL INTEREST ON FACILITY 2 LOANS AND ACCEPTANCES
In addition to the acceptance fees and interest payable
pursuant to Sections 5.3, 5.4 and 5.5, the face amount of Acceptances and Loans
outstanding under Facility 2 shall bear Capitalized Interest at the rates set
forth herein and shall be payable on the Facility 2 Maturity Date or the date on
which the Credit outstanding under Facility 2 is repaid in full. Capitalized
Interest shall accrue at the annual rate of 3.0% for the six months following
the date of this Agreement and 3.5% thereafter until the Facility 2 Maturity
Date, provided that Capitalized Interest shall accrue at the annual rate of 5.0%
after February 28,
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2002 if EBITDA for THC's fiscal year ending December 31, 2001 is less than
US$23,000,000 (excluding transaction fees related to this Agreement). For
greater certainty interest accruing and capitalized hereunder shall form part of
the principal amount outstanding under Facility 2 and shall be deemed to be
outstanding by way of Dollar Loan unless the Borrowers otherwise stipulate
pursuant to a notice of utilization.
5.7 CALCULATION OF RATES
5.7.1 Annual rates are calculated daily on the basis of a
365-day year.
5.7.2 For the purposes of the INTEREST ACT (Canada), the
yearly rate to which a rate calculated as specified
in Section 5.7.1 is equivalent, is equal to the rate
so calculated multiplied by the actual number of days
included in that year and divided by 365 days.
5.8 INTEREST ON ARREARS
Any amount (other than an amount in principal or interest due
under a Loan) which is not paid when due shall bear interest at the rate
(including the applicable margin) which would be applicable to a Dollar Loan
made on the date on which such payment became due, or, in the case of a payment
becoming due after the Maturity Date, on the Maturity Date. Any amount in
principal or interest payable under a Loan and which is not paid when due shall
bear interest at the annual rate which was applicable to the principal on the
date such payment became due. Interest on arrears is compounded monthly.
6. REPAYMENTS
6.1 MANDATORY REPAYMENTS
6.1.1 A Borrower shall make a repayment of Facility 1 in
the minimum amount of $5,000,000 on January 31, 2004.
The outstanding Borrowings under Facility 1, together
with all outstanding interest, shall also be repaid
on the Facility 1 Maturity Date.
6.1.2 The proceeds from the issuance of any equity or
subordinated debt of the Borrowers shall be applied
to the repayment of Facility 2 provided that a
Borrower shall provide five Business Days' prior
notice of such repayment. The outstanding Borrowings
under Facility 2 shall also be repaid on the Facility
2 Maturity Date.
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6.1.3 Other than sales permitted under Section 10.2 and
subject to the terms of the Intercreditor Agreement,
all proceeds of sales of assets shall be applied
first to the repayment of Facility 2 and then to the
repayment of Facility 1.
6.2 OPTIONAL REPAYMENTS
6.2.1 The Borrowers may at any time, and upon five Business
Days' notice, make repayments in principal additional
to the mandatory payments provided in Section 6.1.
However,
6.2.1.1 repayments shall not be made in respect of
Facility 1 until such time as the principal
and interest outstanding under Facility 2 is
repaid in full;
6.2.1.2 such repayments shall be made in minimum
amounts of $10,000,000 increased by whole
multiples of $1,000,000;
6.2.1.3 a written notice of repayment shall be given
to the Agent and the Paying Agent prior to
any such repayment specifying the amount of
the repayment and the Borrowings to be
repaid;
6.2.1.4 a Borrower shall pay a prepayment fee in
respect of optional repayments under
Facility 1 in the amount of 2% of the amount
repaid if such repayment is made prior to
June 30, 2002 or 1% of the amount repaid
under Facility 1 thereafter but prior to
June 30, 2003, and no prepayment fee on
repayments made on or after June 30, 2003
(it being understood that no prepayment fee
shall be payable in respect of prepayments
made in respect of Facility 2); and
6.2.1.5 notwithstanding Section 6.2.1 no such
optional repayment can be made on
Acceptances or BA Loans before the maturity
date of their respective periods unless the
Lenders are indemnified in accordance with
Section 18.10.2 concurrently with the
repayment.
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7. PLACE, MANNER, CURRENCY AND APPLICATION OF PAYMENTS
7.1 PAYMENT TO LENDERS
Unless otherwise specified, all payments to be made by the
Borrowers hereunder shall be made to the Paying Agent.
7.2 PLACE
Any payments to be made by the Borrowers to the Paying Agent
shall be made for value on the day such payment is due and at the Paying Agent's
Branch of Account.
7.3 TIME
If a payment is due on a day which is not a Business Day, this
payment may be made on the following Business Day.
7.4 CURRENCY OF PAYMENTS
Unless otherwise provided herein, all amounts payable under
this Agreement shall be paid in Dollars.
7.5 PAYMENTS NET OF TAXES
7.5.1 All payments made by each Borrower will be made
without setoff, counterclaim or other defence. Any
payment to the Paying Agent or the Agent shall be
made free and clear of, and without deduction or
withholding for, any present or future taxes or other
charges of whatever nature now or hereafter imposed
by any taxing authority in any jurisdiction with
respect to such payments (but excluding any tax or
other governmental charge imposed on or measured by
the net income or net profits of a Lender pursuant to
the laws of the jurisdiction in which it is organized
or the jurisdiction in which the principal office or
applicable lending office of such Lender is located)
and all interest, penalties or similar liabilities
with respect to such non-excluded taxes or other
governmental charge (collectively referred to herein
as "Taxes"). If any Taxes are so levied or imposed,
the relevant Borrower shall pay the full amount of
such Taxes to the relevant taxing authority in
accordance with applicable law and shall pay to the
Agent or the Paying Agent, as the case may be, such
additional amounts as may be necessary so that every
payment actually received by the Paying Agent, the
Agent or relevant Lender will not be less than the
amount which would otherwise have been received in
the absence of such levy or imposition of Taxes. Each
Borrower will furnish to the Agent or the Paying
Agent, as the case may be, within 45 days after the
date the payment of
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any Taxes is due pursuant to applicable law certified
copies of tax receipts, if any, or other evidence
reasonably acceptable to the Agent or the Paying
Agent, as the case may be, evidencing such payment by
such Borrower. Each Borrower agrees to indemnify and
hold harmless each Lender, and reimburse such Lender
upon its written request, for the amount of any Taxes
so levied or imposed and paid by such Lender, and for
any taxes, levies, imposts, duties or charges paid by
such Lender in respect of amounts paid to or on
behalf of such Lender pursuant to this Section 7.5.1,
other than penalties, additions to tax, interest and
expenses arising as a result of the willful
misconduct or gross negligence of such Lender, within
30 days after the date upon which such Lender makes
written demand therefor supported by a copy of any
written assessment thereof. Notwithstanding the
foregoing provisions of this Section 7.5.1, a
Borrower's obligations under this Section 7.5.1 shall
not apply in respect of a Lender to the extent that
such Lender has not complied with the provisions of
Section 7.5.2 to the extent it is legally able to do
so.
7.5.2 Each Lender that is not a United States person (as
such term is defined in Section 7701(a)(30) of the
Internal Revenue Code of 1986, as amended) and that
is entitled to an exemption from or reduction of
withholding tax under the law of the United States or
under a treaty to which the United States is a party,
with respect to payments under this Agreement shall,
to the extent it is legally able to do so, on or
prior to the date hereof, or in the case of a Lender
that is an assignee or transferee of an interest
under this Agreement pursuant to Section 17.1, on the
date of such assignment or transfer to such Lender,
and from time to time upon request from THC, deliver
to THC, accurate, properly completed and properly
executed documentation prescribed by applicable law
which is reasonably requested by THC (to the extent
that such documentation reasonably requested by THC
will not, in the reasonable judgment of such Lender,
be disadvantageous to such Lender), if the delivery
of such documentation will permit such payments to be
made without withholding or with withholding at a
reduced rate, as the case may be. THC agrees to
reimburse each Lender for any expense incurred by
reason of complying with this Section 7.5.2.
7.5.3 If a Borrower pays any additional amount under
Section 7.5.1 to a Lender and such Lender determines
in its sole discretion that it has actually received
or realized in connection therewith any refund and,
in the case of a Lender that is not exempt from tax,
any reduction of or credit against its tax
liabilities, with respect to the taxable year in
which the additional amount is paid, such Lender
shall pay to a
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Borrower an amount that such Lender shall, in its
sole discretion, determine is equal to the net
benefit, after tax, which was obtained by the Lender
in such year as a consequence of such refund. Such
amount shall be paid as soon as practicable after
receipt or realization by such Lender of such refund.
Nothing in this Section 7.5.3 shall require any
Lender to disclose or detail the basis of its
calculation of the amount of any refund or any other
information to any Borrower or any other Person.
7.6 PAYMENTS TO PAYING AGENT ON BEHALF OF LENDERS
Unless otherwise provided herein, all payments to be made to
the Paying Agent shall be for the account of the Lenders and any payment
received by the Paying Agent shall be deemed to have been received by the
Lenders.
7.7 APPLICATION OF PAYMENTS
7.7.1 Subject to the terms of the Intercreditor Agreement,
all payments made to the Paying Agent or the Agent
prior to a demand for payment pursuant to Section
13.2 shall be applied in the following order:
7.7.1.1 to amounts due pursuant to Sections 5.1 and
5.2, as and by way of fees;
7.7.1.2 to amounts due pursuant to Section 6.2;
7.7.1.3 to amounts due pursuant to Section 18.6, as
and by way of expenses;
7.7.1.4 to amounts due pursuant to Section 18.10, as
and by way of indemnity;
7.7.1.5 to amounts due pursuant to Section 5.8, as
and by way of default interest;
7.7.1.6 to amounts due pursuant to Sections 3.2.1,
5.3, 5.4, 5.5 and 5.6, as and by way of
accrued interest, acceptance fees and
Discount;
7.7.1.7 to amounts due, as and by way of principal;
and
7.7.1.8 in payment of any other amounts then due and
payable by a Borrower hereunder.
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7.7.2 After a demand for payment made pursuant to
Section 13.2, all payments made by the
Borrowers pursuant to this Agreement and all
sums received or realized on account of
amounts owing hereunder, shall be
appropriated and applied by the Paying Agent
towards the obligations of the Borrowers
hereunder as the Paying Agent may decide or
the Majority Lenders may direct, and any
such appropriation and application shall
override any appropriations or applications
made or requested by the Borrowers. For
greater certainty, any such decision shall
be consistent with the provisions of Article
14.
7.8 JUDGMENT CURRENCY
If a judgment is rendered against a Borrower for an amount
owed hereunder and if the judgment is rendered in a currency ("Other Currency")
other than Dollars, a Borrower shall pay, if applicable, at the date of payment
of the judgment, an additional amount equal to the difference between (i) the
said amount owed under this Agreement, expressed into the Other Currency as at
the date of payment of the judgment, and (ii) the amount of the judgment. For
the purposes of obtaining the judgment and making the calculation referred to in
(i), the exchange rate shall be 12:00 noon rate quoted on the Reuters Monitor
Screen (Page BOFC or on such other page, as may replace such page for the
purposes of displaying exchanges rates). Any additional amount owed under this
Section shall constitute a cause of action distinct from the cause of action
which gave rise to the judgment, and said judgment shall not constitute RES
JUDICATA in that respect.
8. REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to the Agent and each of
the Lenders that, as at the date hereof:
8.1 CORPORATE EXISTENCE
Each of the Borrowers and the Material Subsidiaries is a duly
organized, and validly subsisting corporation, it has filed all annual returns
and financial statements which it is required to file under applicable law and
is duly qualified to do business in the jurisdictions in which the nature of the
business transacted by it or the character of the properties owned or leased by
it requires such qualifications, except to the extent that the failure to be so
organized, subsisting or qualified, or to have made such filings, could not
reasonably be expected to have a Material Adverse Effect.
8.2 CORPORATE POWER
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Each of the Borrowers and the Material Subsidiaries has the
corporate power and authority to own its assets and to carry on its business as
presently conducted.
8.3 CORPORATE ACTION
Each of the Borrowers and the Material Subsidiaries has full
power and authority to enter into and perform its obligations provided for under
this Agreement, and this Agreement has been duly authorized by all necessary
corporate action.
8.4 COMPLIANCE WITH LAWS
Subject to Section 8.5, each of the Borrowers and their
Subsidiaries is not in violation of any law, regulation, or order applicable to
it within any jurisdiction in which it does business, the effect of which could
reasonably be expected to have a Material Adverse Effect.
8.5 ENVIRONMENTAL MATTERS
Except as disclosed to the Lenders in writing prior to the
execution of this Agreement and except to the extent that a Material Adverse
Effect could not reasonably be expected to result therefrom,
8.5.1 the assets and business of the Borrowers and their
Subsidiaries continue to be owned, possessed and
operated in compliance with all applicable
environmental laws and regulations;
8.5.2 to the best of the Borrowers' knowledge, there are no
apprehended, pending or threatened complaints,
inquiries or enforcement action with respect to any
alleged violation by the Borrowers and their
Subsidiaries of any applicable environmental law or
regulation;
8.5.3 the Borrowers and their Subsidiaries have been
issued, and are in compliance with, all permits,
authorizations and approvals relating to
environmental matters and necessary for their assets,
businesses and operations ; and
8.5.4 the Borrowers are not aware of any condition or
circumstance which could give rise to any liability
by the Borrowers and their Subsidiaries under any
applicable environmental law or regulation.
8.6 ACCURACY OF INFORMATION
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All written information delivered by the Borrowers to the
Lenders in connection with this Agreement is accurate in all material respects
and contains no material misstatement of fact nor does it omit a material fact
the omission of which would make such information misleading in light of the
circumstances in which the statements contained therein were made; the financial
forecasts contained in such information have been prepared on the basis of
reasonable assumptions and procedures and represent a good faith estimate of the
results contained therein, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as
facts or an assurance of performance and that actual results during the period
or periods covered by such financial information may differ from the forecasted
or projected results set forth therein.
8.7 MATERIAL ADVERSE CHANGE
Except as disclosed in writing to Caisse prior to the date
hereof, no material adverse change has occurred in the business and financial
condition of THC and its Material Subsidiaries, taken as a whole, since the date
of the most recent annual audited consolidated financial statements of THC.
8.8 EFFECT OF THIS AGREEMENT
Neither the execution and delivery of this Agreement nor
compliance with the terms and provisions hereof or with the terms and provisions
of the documents evidencing the Security will:
8.8.1 conflict with, violate, or result in a breach of any
of the terms, conditions or provisions of any law or
regulation applicable to each of the Borrowers and
the Material Subsidiaries, or any order of any court,
or administrative agency or tribunal applicable to
it, except to the extent such conflict, violation or
breach could not reasonably be expected to have a
Material Adverse Effect, or
8.8.2 conflict with, violate, result in a breach of, or
constitute a default under the articles or by-laws of
the Borrowers or the Material Subsidiaries or of any
agreement or instrument to which the Borrowers or the
Material Subsidiaries is a party or by which they are
bound, except to the extent such conflict, violation,
breach or default could not reasonably be expected to
have a Material Adverse Effect.
8.9 VALIDITY OF THIS AGREEMENT
This Agreement constitutes a legal, valid and binding
obligation of the Borrowers.
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8.10 LITIGATION
There is no litigation and there are no legal proceedings
pending, or, to the best of its knowledge, threatened, before any court or
administrative agency or tribunal which could reasonably be expected to have a
Material Adverse Effect.
8.11 DEFAULT
No Event of Default has occurred and is continuing.
8.12 FINANCIAL STATEMENTS
The financial statements delivered pursuant to Section 4.1.11
have been prepared in accordance with GAAP and present fairly, in all material
respects, the financial positions of THC and the results of the operations for
the fiscal period reported on.
8.13 DEFECTS OF TITLE AND LIENS
There is no deficiency or defect in the title of the Borrowers
and the Material Subsidiaries to any of their principal plants, properties or
assets which would reasonably be expected to have a Material Adverse Effect,
and, except for Permitted Encumbrances, the assets of the Borrowers and their
Subsidiaries are free and clear of any lien, priority, or security.
8.14 TAX RETURNS
Each of the Borrowers and the Material Subsidiaries has filed
all tax returns which were required to be filed and paid or made provision for
payment of all taxes which are due and payable, whether or not shown to be due
and payable on such returns, except to the extent that adequate accounting
reserves have been established in accordance with GAAP for the payment of any
tax the payment of which is being contested. Neither of the Borrowers is or ever
has been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code").
8.15 PENSIONS PLANS
Any Borrower or any Material Subsidiary that maintains or
contributes to a plan that provides retirement or health benefits for its
employees, has performed any material obligation provided in such plan in
accordance with the terms thereunder and in accordance with any statute, order,
rule or regulation applicable to such plan. In addition:
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(i) set forth on Schedule C hereto is a complete and accurate
list, as at the date hereof, of all Plans and Multiple
Employer Plans;
(ii) except with respect to the Bradford, Vermont facility and the
termination of not more than 15 employees at such location, no
ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan that has resulted in or is reasonably
expected to result in a Material Adverse Effect;
(iii) Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, copies of which have
been filed with the United States Internal Revenue Service and
furnished to the Agent, is complete and accurate and fairly
presents the funding status of such Plan, and since the date
of such Schedule B there has been no material adverse change
in such funding status;
(iv) neither the Borrowers nor any Subsidiary has incurred or is
reasonably expected to incur any Withdrawal Liability to any
Multiple Employer Plan, except with respect to the Bradford,
Vermont facility and the termination of not more than 15
employees at such location; and
(v) neither the Borrowers nor any Subsidiary has been notified by
the sponsor of a Multiple Employer Plan that such Multiple
Employer Plan is in reorganization or has been terminated,
within the meaning of Title IV of ERISA, and no such Multiple
Employer Plan is reasonably expected to be in reorganization
or to be terminated, within the meaning of Title IV of ERISA.
8.16 INTELLECTUAL PROPERTY
Set forth on Schedule D hereto is a list which includes, as
at the date hereof, all material patents, trademarks, industrial designs,
integrated circuit topographies, plant breeder rights, trade names, service
marks and copyrights, and all applications therefor and licenses thereof
(collectively, the "Intellectual Property"), of the Borrowers or their
Subsidiaries, showing, as applicable, as of the date hereof the jurisdiction in
which registered, the registration number, the date of registration and the
expiration date. None of such Intellectual Property is subject to any pending or
(to the best of the Borrowers' knowledge) threatened claim or litigation or any
licensing agreement or similar arrangement except as set forth therein. Each of
the Borrowers and its Subsidiaries owns or is licensed or otherwise has the
right to use all of the Intellectual Property that are reasonably necessary for
the operation of its business and, to the best of the Borrowers' knowledge, none
of such Intellectual Property infringes on or conflicts with any material
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Intellectual Property of any other Person in any material respect, and no other
Person's property infringes on or conflicts with any material Intellectual
Property of a Borrower and their Subsidiaries. The Intellectual Property
described on Schedule D constitutes, as at the date hereof, all of the material
property of such type necessary to the current and reasonably anticipated future
conduct of the business of the Borrowers and its Subsidiaries.
8.17 ASSETS OF JOFA HOLDING AB
The only asset of Jofa Holding AB consists of shares in the
capital stock of Jofa AB and Intellectual Property related to the business of
Jofa AB.
9. AFFIRMATIVE COVENANTS
Each of the Borrowers solidarily covenants and agrees that:
9.1 PAYMENT OF PRINCIPAL AND INTEREST
The Borrowers will duly and punctually pay the principal and
interest (including any interest on amounts in default) on the outstanding
Borrowings, as well as fees and other amounts due hereunder, on the dates, at
the places and in the manner mentioned herein.
9.2 GOOD STANDING
Each of the Borrowers and its Subsidiaries will do all things
necessary to preserve and keep in full force and effect its corporate existence
except as expressly permitted by Section 10.4, will file all annual returns and
financial statements as may be required pursuant to applicable law and will
remain duly qualified to do business in the jurisdictions in which the nature of
the business transacted by it or the character of the material properties owned
or leased by it will require such qualifications, except as would not reasonably
have a Material Adverse Effect.
9.3 CONDUCT OF BUSINESS
Each of the Borrowers and its Material Subsidiaries will carry
on and conduct its business in a prudent manner and will diligently maintain its
property and premises and corporate assets in good condition and use, reasonable
wear and tear excepted, where failure to so maintain would, in any material
respect, affect the conduct or carrying on of its business.
9.4 PAYMENT OF TAXES
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Each of the Borrowers and its Subsidiaries will pay all taxes,
levies and assessments, government fees, dues and other obligations to pay money
to the proper authorities which have been validly levied, assessed or imposed
upon it, or upon its assets or any part thereof, as and when the same become due
and payable, except to the extent and for so long as it shall contest in good
faith, diligently and by appropriate measures its obligation to do so, provided
that in such case, it shall reasonably satisfy the Agent that no such
contestation will involve forfeiture of any material part of the assets of the
Borrowers and its Subsidiaries or could reasonably be expected to have a
Material Adverse Effect.
9.5 INSURANCE
Each of the Borrowers and its Material Subsidiaries will
insure and keep insured its assets which are of an insurable nature, against
loss or damage by fire and against such other hazards, in such amount and in
such manner, to the extent available on commercially reasonable terms, as a
prudent administrator would do in the case of assets similarly situated and of
companies operating generally similar businesses and with reputable insurance
companies, will duly and punctually pay the premiums and other sums of money
payable for that purpose, will provide the Agent with evidence of the renewal of
any insurance policy prior to the expiry of same, and will, at the request of
the Agent, furnish to the Agent certificates of insurance relating to such
insurance carried by it.
9.6 OBLIGATIONS UNDER CONTRACTS
During the term of any lease, operating agreement, license,
concession or other contract or agreement in which the each of the Borrowers or
its Material Subsidiaries have an interest or to which it is a party, each of
the Borrowers and its Material Subsidiaries will faithfully observe, perform and
discharge the covenants, conditions and obligations relating to non-financial
aspects imposed on it thereby, except to the extent that failure to so observe,
perform and discharge, could not reasonably be expected to have a Material
Adverse Effect.
9.7 TRANSACTIONS WITH AFFILIATES
Each of the Borrowers shall conduct, and cause each of its
Subsidiaries to conduct, all transactions with any Subsidiary on terms that are
fair and reasonable and no less favourable to the Borrowers or the Subsidiaries
than would be obtained in a comparable arm's-length transaction with a Person
not a Subsidiary; provided, however, that (i) the Borrowers may make loans and
advances to their officers and employees in an amount not to exceed US $250,000
for any one officer or employee and in the aggregate amount outstanding at any
time of US $1,000,000, (ii) the Borrowers and its Material Subsidiaries may pay
reasonable directors fees to non-executive directors and may reimburse their
respective directors and any shareholders of THC for all out-of-pocket expenses,
including expenses of
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travel and lodging, incurred by such directors or shareholders in regard to
their participation in the management, business and affaires of the Borrowers
and their Subsidiaries, (iii) THC, directly or indirectly through any
Subsidiary, may provide indemnification to the directors, officers and employees
of THC and its Subsidiaries against all costs, charges and expenses incurred by
them by reason of any action taken in their capacity as such and (iv) the
Borrowers may pay Wellspring and its Associates (as defined in Section 13.1.10)
(x) management fees that do not exceed in any fiscal year US$200,000 in the
aggregate, and (y) industry standard fees for services rendered by them upon the
successful completion of any refinancing by the Borrowers of their Indebtedness
or the sale by them of all or a portion of their assets (which shall not at any
time exceed 1% of the amount of such refinancing or of the gross value of the
assets sold), provided that no such fee shall be paid if there exists a Default
or the payment would result in the occurrence of a Default.
9.8 BOOKS AND ACCOUNTS
Each of the Borrowers and its Subsidiaries will keep and
maintain proper books of account and other accounting records in accordance with
the applicable generally accepted accounting principles.
9.9 REPORTING REQUIREMENTS
The Borrowers or THC, as the case may be, will furnish to the
Agent in a sufficient number of copies for distribution to each of the Lenders:
9.9.1 within 45 days after the end of each fiscal quarter,
and within 30 days after the end of each month (other
than a month during which a fiscal quarter ends),
each fiscal year of THC or when made public by THC,
whichever is earlier, interim unaudited consolidated
financial statements of THC for such month, subject
to year-end audit adjustments, certified by the chief
financial officer of a Borrower;
9.9.2 within 120 days after the end of each fiscal year of
THC or when made public by THC, whichever is earlier,
annual audited consolidated financial statements of
THC and unaudited consolidating financial statements
of THC and each of its Subsidiaries for such year,
prepared in accordance with GAAP, consistently
applied, and accompanied by the external auditors'
report therein;
9.9.3 within 30 days after the end of each fiscal year of
THC, an annual budget and business plan for THC's
current fiscal year, presented on a consolidated and
consolidating basis; such annual budget shall include
balance sheets, income statements and cash flow
statements for THC together with the underlying
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principal assumptions; and such annual budget will
include proposed capital expenditures and dividends;
9.9.4 from time to time, any other report or information on
the financial condition, the operations and the
assets of a Borrower and its Subsidiaries as may
reasonably be required by the Agent;
9.9.5 within 45 days after the end of each fiscal quarter
and within 120 days of each fiscal year end, a
compliance certificate of the chief financial officer
of THC that he has reviewed this Agreement, and that
he has no knowledge of any Default or, if he has such
knowledge, specifying such Default, such certificate
to be substantially in the form and substance of
Schedule "E";
9.9.6 promptly upon transmission thereof, copies of all
statements, annual information forms, prospectuses,
offering circulars or similar materials filed by it
with any stock exchange, securities commission, or
similar entity;
9.9.7 a notice, upon knowledge of the occurrence of any
Material Adverse Effect or upon knowledge of a
Subsidiary becoming a Material Subsidiary;
9.9.8 any other information reasonably requested by the
Agent.
9.10 INSPECTIONS AND MONITORING
The Borrowers and the Material Subsidiaries shall allow the
Agent and any Person designated in writing by the Agent, on reasonable notice
and at such reasonable time or times as will not interfere with the normal
operations of the Borrowers and the Material Subsidiaries, to visit and inspect
any of the properties of the Borrowers and the Material Subsidiaries and to
discuss the affairs, finances and accounts of the Borrowers and the Material
Subsidiaries with its chief financial officer and its auditors, provided that
any such meeting with its auditors is scheduled by such chief financial officer.
In particular, the Agent shall have the right to appoint a consultant to monitor
THC's performance. Said consultant will be provided with access to management
information (including, INTER ALIA, production, distribution and financial
information) as may be reasonably requested and access to the senior operating
officers of THC in order to discuss the performance of THC on a weekly basis. As
well, the consultant will be provided with access to operational management of
the Borrowers as may be reasonably requested. The consultants shall report to
the Agent, and the cost of such consultant will be for THC's account. The right
of the Agent to have the consultant monitor THC's performance shall terminate on
the later of:
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(a) the date on which all amounts owing under Facility 2
are repaid in full; and
(b) the first anniversary of the execution of this
Agreement,
provided that no Default or Event of Default exists on any such date.
9.11 COMPLIANCE WITH LAWS AND REGULATIONS
Each of the Borrowers and its Subsidiaries shall own, possess
and operate its assets and business in compliance with applicable laws and
regulations (including environmental laws and regulations), except to the extent
that failure to so comply could not reasonably be expected to have a Material
Adverse Effect.
9.12 APPROVALS
Each of the Borrowers and its Subsidiaries will obtain,
maintain and renew all permits, authorizations and approvals required under
applicable laws and regulations (including environmental laws and regulations)
required for their operations, businesses and assets, except to the extent that
failure to so obtain, maintain and renew could not reasonably be expected to
have a Material Adverse Effect.
9.13 REPRESENTATIONS AND WARRANTIES
Each of a Borrower and the Material Subsidiaries will do all
things necessary to ensure that all representations and warranties made in
Article 8, other than in Sections 8.6, 8.12, 8.15(i) and in the first and last
sentences of Section 8.16, shall remain true and accurate during the whole term
of this Agreement and shall promptly notify the Agent of any event or
circumstances which would result in such representations ceasing to be true and
accurate in any respect which is material to a Borrower or any Material
Subsidiary and of the steps taken to remedy same.
9.14 PERFECTION OF SECURITY
Each of the Borrowers and the Material Subsidiaries will do
all things required in order that any Security granted pursuant to Article 12 be
constantly perfected on all property intended to be covered by the Security, as
reasonably requested by the Agent.
9.15 NOTIFICATION OF DEFAULT
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Each of the Borrowers shall promptly notify the Agent of the
occurrence of any Default known to it and of the steps being taken to remedy the
same.
9.16 HEDGING TRANSACTIONS
The Borrowers will not undertake derivative hedging
transactions of any nature except for normal business related and not
speculative purposes and the Borrowers may, as they deem appropriate, hedge
against currency and exchange risks resulting from the Borrowings.
9.17 PENSION PLANS AND ERISA
Any Borrower or any Material Subsidiary that maintains or
contributes to a plan that provides retirement or health benefits for its
employees, will perform any material obligation provided in such plan in
accordance with the terms thereunder and in accordance with any statute, order,
rule or regulation applicable to such plan, and, without limiting the generality
of the foregoing, shall comply with any material obligations to which it may be
subject under ERISA, or any plan governed thereby.
9.18 BOARD REPRESENTATION
For so long as the Borrowings have not been repaid in full,
Caisse shall be entitled to receive notice of and have its representative attend
as observer at all meetings of the board of directors of THC.
9.19 FIRPTA CERTIFICATION
Each Borrower and Material Subsidiary will, upon request of
Lender, inform Lender whether it is a United States real property holding
corporation within the meaning of Section 897 (c)(2) of the Code as required by
Treasury Regulations Section 1.897-2(h).
9.20 SIGNATURE OF SALE AGREEMENT
The Borrowers shall use their best commercial efforts to
obtain the signature by GE Capital Assurance Co. and the Northwestern Mutual
Life of the Sale Agreement dated March 14, 2001 among THC, Caisse and certain
shareholders of THC.
10. NEGATIVE COVENANTS
Each of the Borrowers covenants and agrees that:
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10.1 NEGATIVE PLEDGE
Each of the Borrowers and its Subsidiaries shall not grant,
create, assume or suffer to exist any security, mortgage, hypothec, charge,
security interest, lien or priority of any kind on their properties, assets or
other rights, other than Permitted Encumbrances.
10.2 DISPOSITION OF ASSETS
The Borrowers and their Subsidiaries shall not sell, transfer,
lease, convey or otherwise dispose of any of their property or assets other than
(a) to the Borrowers or Material Subsidiaries in the ordinary course of
business, (b) the sale of inventory to third parties in the ordinary course of
business, (c) the sale, transfer, conveyance or other disposition of property or
assets that are obsolete or no longer used or useful in a Borrower's business or
the business of a Material Subsidiary of a Borrower for an aggregate amount not
to exceed Cdn$400,000 in any fiscal year, or (d) other dispositions of assets
(other than inventory) in the ordinary course of business for an aggregate
amount not to exceed US $500,000 in any fiscal year. Subject to Section 6.1.3
the prohibitions set forth in this Section 10.2 shall not apply in respect of
the sale of the Mount Forest, Ontario and Bradford, Vermont facilities as set
forth in THC's 2001 budget and operating plan, provided that such sales are made
on an arm's length basis. With respect to any sale, transfer, conveyance or
other disposition permitted pursuant to this Section, Agent and Lenders agree to
release their Liens or such assets or property in order to permit such sale,
transfer, conveyance or disposition to be effected and shall execute and deliver
to such Borrower or Subsidiary, at a Borrower's or Subsidiary's expense,
appropriate releases as reasonably requested.
10.3 GUARANTEES
The outstanding liabilities (contingent or not) of a Borrower
and its Subsidiaries under Guarantees shall not at any time exceed the aggregate
amount of US$3,000,000 calculated on a consolidated basis, excluding Guarantees
required or contemplated by Article 12 and Guarantees of Indebtedness permitted
by Section 10.6.
10.4 SUBSIDIARIES AND AMALGAMATIONS
Except as provided in the Agreement and Plan of
Reorganization, each of the Borrowers and its Subsidiaries shall not merge or
amalgamate with or liquidate or wind up into any other Person (a "Transaction"),
save (a) for Transactions among wholly-owned Subsidiaries of the Borrowers or
between a Borrower and any wholly-owned Subsidiary of a Borrower, and (b) with
the consent of the Agent, not to be unreasonably withheld, only if at the time
thereof and immediately thereafter no Default or Event of Default shall have
occurred and be continuing, and if there shall not result therefrom any actual
or potential
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environmental liability, litigation or other contingent liability having a
material adverse effect on the affected Borrower or the affected Subsidiary or
Subsidiaries, and if, immediately prior to any such Transaction, the Agent is
provided with an opinion of legal counsel to THC in form and substance
satisfactory to the Agent acting reasonably, as to the effect, if any, of any
such Transaction upon the continuing validity and enforceability of the
Agreement and Security upon each of the Borrowers and the parties thereto. If a
Transaction permitted under the foregoing provisions involves a Material
Subsidiary, any Subsidiary issued from such Transaction or into which assets
have been transferred further to such Transaction shall be deemed to be a
Material Subsidiary.
10.5 FISCAL YEAR
Each of the Borrowers and the Material Subsidiaries shall not
change the date of its fiscal year end without the prior consent of the Agent,
not to be unreasonably withheld.
10.6 INCURRENCE OF INDEBTEDNESS
Each of the Borrowers and its Subsidiaries shall not incur,
assume, or suffer to exist any Indebtedness for money borrowed or raised, or
guarantee any such Indebtedness, other than Indebtedness to the Lenders
hereunder; Indebtedness under the Canadian Operating Credit or the U.S.
Operating Credit; Indebtedness under interest rate and currency hedging
arrangements; Indebtedness in the amount of US $ 49,054,012.08 and payable on
demand resulting from an intercompany advance made by THC to Sports Holdings
Corp. with the proceeds of Borrowings for the purpose of consummating the
transactions contemplated by the Agreement; Indebtedness in the form of loans
made by Sport Maska Inc. and Maska U.S., Inc. to THC that are payable on demand
for the purpose of paying all general and administrative fees, all regulatory
fees, the necessary fees and expenses to maintain THC's corporate existence, the
reasonable costs of its directors' and officers' insurance and their legal and
accounting fees to the extent such fees relate to legal and accounting services
provided directly to it by entities that are not its Affiliates; Indebtedness in
the form of loans made by Sport Maska Inc. to Maska U.S., Inc. that are payable
on demand and the proceeds of which are used for the purpose of paying trade
creditors of Maska U.S., Inc.; Indebtedness in the form of loans made by Sport
Maska Inc. and Maska U.S., Inc. to THC to the extent required to pay regularly
scheduled interest payments and prepayments of principal on the Borrowings;
other existing Indebtedness not exceeding US $150,000, or as otherwise permitted
or contemplated by Permitted Encumbrances.
10.7 INSURANCE OF PREFERRED SHARES
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Each of the Borrowers shall not issue preferred shares of its
capital stock without the prior written consent of the Agent except with respect
to the payment of dividends on preferred shares issued to Phoenix Home Life
Insurance Company.
11. FINANCIAL COVENANTS
THC covenants in favour of the Agent and the Lenders that it:
11.1 CAPITAL EXPENDITURES
Shall not incur Capital Expenditures in any fiscal year on a
consolidated basis which in the aggregate exceed the following amounts:
YEAR AMOUNT
2000 US$4,500,000
2001 US$3,500,000
2002 US$4,000,000
2003 US$4,000,000
2004 US$4,000,000
it being understood that an amount unutilized in a fiscal year after 2001 may be
carried forward and incurred in the immediately following fiscal year.
11.2 DIVIDENDS
Shall not pay dividends (other than stock dividends) on common
shares or preferred shares or undertake common share repurchase programs.
11.3 INDEBTEDNESS TO EBITDA
Shall maintain on a consolidated basis, calculated as of the
last day of each fiscal quarter, a ratio of Indebtedness to EBITDA not greater
than the ratios set forth in Schedule G.
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11.4 SENIOR INDEBTEDNESS TO EBITDA
Shall maintain on a consolidated basis, calculated as of the
last day of each fiscal quarter, a ratio of Senior Indebtedness to EBITDA not
greater than the applicable ratio set forth in Schedule G. For the purpose of
calculating compliance with this Section, "Senior Indebtedness" shall mean
Indebtedness less the amount outstanding in principal and Capitalized Interest
under Facility 2.
11.5 INTEREST COVERAGE RATIO
Shall maintain on a consolidated basis, calculated on the last
day of each fiscal quarter, an Interest Coverage Ratio of not less than:
11.5.1 1.25 to 1.00 from December 31,2000 to June 30, 2001;
11.5.2 1.30 to 1.00 from July 1, 2001 to September 30, 2001;
11.5.3 1.50 to 1.00 from October 1, 2001 to March 31, 2002;
11.5.4 1.70 to 1.00 from April 1, 2002 to June 30, 2003; and
11.5.5 2.00 to 1.00 from and after July 1, 2003.
11.6 INTERCOMPANY DIVIDENDS
Shall cause the Material Subsidiaries, from time to time, to
pay such dividends or make such inter-corporate payments, subject to applicable
laws, as to ensure the ability of the Borrowers to service their debt;
11.7 MINIMUM EBITDA
Shall maintain a minimum EBITDA in the amounts set forth in
Schedule G, calculated on a rolling four quarter basis on the last day of each
fiscal quarter.
12. SECURITY
12.1 GRANTING OF SECURITY
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Each of the Borrowers and the Material Subsidiaries shall (i)
provide security on all of their present and future, tangible and intangible,
assets and (ii) guarantee the performance of all obligations and liabilities
hereunder (collectively, the "Security"). The Lenders shall be named loss
payees, as their respective interests may appear, on all insurance policies
relating to the assets covered by the Security and such policies shall include
mortgage clauses.
12.2 PURPOSE OF THE SECURITY
The Security shall secure the indebtedness and obligations of
the Borrowers under this Agreement and the obligations of the Material
Subsidiaries under their respective guarantees.
12.3 RANKING OF THE SECURITY
The Security shall be perfected in all jurisdictions where
material property intended to be covered thereby is located and shall be first
ranking on the property covered thereby, subject to Permitted Encumbrances and
the terms of the Intercreditor Agreement.
12.4 EVIDENCE OF THE SECURITY
The Security, including all agreements and documents
evidencing same (including its perfection) and legal opinions in respect
thereof, shall be satisfactory to all Lenders both (i) at the time such Security
is granted, and (ii) pursuant to revisions under Article 9 of the Uniform
Commercial Code of the various States of the United States, on August 1, 2001.
Each Lender hereby appoints the Agent hereunder as its mandatary to execute on
its behalf said agreements and documents together with all releases and
discharges in respect of the Security.
12.5 SECURITY BY FUTURE MATERIAL SUBSIDIARIES
Security by a future Material Subsidiary shall be provided 45
days after the date the Person concerned shall have become a Material
Subsidiary.
13. EVENTS OF DEFAULT
13.1 EVENTS OF DEFAULT
Each of the following events or circumstance shall constitute
an Event of Default:
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13.1.1 if the Borrowers fail to pay when due the whole
or any part of the outstanding Borrowings or of
any interest, fee or other amount payable under
this Agreement;
13.1.2 if either Borrower or any Material Subsidiary
has acknowledged its insolvency or has been
declared insolvent or bankrupt or becomes
voluntarily subject to any law relating to
bankruptcy, insolvency or relief of debtors;
13.1.3 if all or a substantial portion of the assets
of either Borrower or any Material Subsidiary,
are seized in connection with any judgment and
such seizure is not released or stayed within
30 days or are subject to a taking of
possession by a creditor, or are placed under
sequestration, receivership or guardianship, or
if a liquidator is appointed in respect of any
of a Borrower and the Material Subsidiaries,
unless such proceedings are being actively and
diligently contested in good faith by a
Borrower or such Subsidiary and are dismissed
or stayed within 60 days;
13.1.4 subject to Section 10.4, if any proceedings for
the dissolution, liquidation or winding-up of
either Borrower or any Material Subsidiary or
for the suspension of its operations are
commenced, unless such proceedings are being
diligently contested in good faith by such
Borrower or such Material Subsidiary and are
dismissed or stayed within 60 days;
13.1.5 if any proceedings under any law relating to
bankruptcy, insolvency or relief of debtors is
commenced against any Borrower or any Material
Subsidiary and is not actively and diligently
contested in good faith and dismissed or stayed
within 60 days;
13.1.6 if any of the representations and warranties
made by the Borrowers in this Agreement or if a
document supplied by a Borrower or a Material
Subsidiary in connection with this Agreement
shall prove to have been erroneous or
inaccurate in any material respect concerning
any matter material to the Lenders as at the
date made or deemed to be made;
13.1.7 if any Borrower or any Material Subsidiary
otherwise fails to fulfill, in any material
respect, any of its obligations or covenants
under this Agreement, or any other agreement
evidencing or related to the Security and if
such failure is not remedied within 25 days of
the earlier of (i) a Borrower's becoming
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aware of such failure and (ii) notice of such
failure being given to a Borrower by the Agent;
13.1.8 if any Borrower or any Material Subsidiary is
in default to pay amounts when due (after the
expiry of any applicable grace periods) under
any Indebtedness (other than amounts due under
this Agreement) owed by it or them and
exceeding US $1,500,000 in the aggregate;
13.1.9 if any Borrower or any Subsidiary fails to
perform any obligation in respect of any
Indebtedness (other than amounts due under this
Agreement) owed by it or them and, as a result
of such failure, the payment of amounts
exceeding US $1,500,000 are accelerated;
13.1.10 if WS Acquisition, LLC ("Wellspring") and its
Associates, collectively, (i) no longer hold
the largest percentage interest (other than the
interest of Caisse, as the case may be) of the
outstanding capital stock of THC on a fully
diluted basis, or (ii) no longer control
(either directly or indirectly) not less than
50% of the number of seats on the board of
directors of THC (excluding the board seats
occupied by nominees of Caisse or a loss of
control in favour of Caisse). For the purpose
of this Section 13.1.10, an "Associate" of
Wellspring means any Person which, directly or
indirectly, is in control of, is controlled by,
or is under common control with, Wellspring. In
the preceding sentence, "control" means the
power, directly or indirectly, either to (a)
vote securities having 10% or more of the
ordinary voting power for the election of
directors (or Persons performing similar
functions) of a Person or (b) direct or cause
the direction of the management and policies of
such Person, whether by contract or otherwise;
13.1.11 if any judgment or order is rendered against
any Borrower or any Material Subsidiary which
requires the payment of monies in excess of US
$2,000,000, net of any proceeds of insurance
policies payable to such Borrower or Material
Subsidiary in relation thereto, and such
judgement or order shall remain undischarged or
unsatisfied and either:
(i) an enforcement proceeding shall have been
commenced by a creditor upon such judgment
or order if such judgement or order is
final and not appealable, or
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(ii) there shall have been a period of 30
consecutive days during which a stay
of enforcement of such judgment or
order, by reason of pending appeal or
otherwise, was not in effect;
13.1.12 if there is a material adverse change in the
financial condition, business or operations of
a Borrower or a Material Subsidiary; and
13.1.13 there is a default under any Related Agreement
and such default is not cured or waived within
five days of the occurrence of such default.
13.2 REMEDIES
If an Event of Default occurs and is continuing, the Agent
may, and if required by the Majority Lenders, shall:
13.2.1 terminate the Total Commitment and the right of the
Borrowers to make utilizations, conversions and
renewals;
13.2.2 declare all indebtedness of the Borrowers hereunder
to be immediately payable and demand immediate
payment of the whole or part of same; and
13.2.3 exercise all of the rights and remedies of the
Lenders, including realization on the Security.
13.3 ADDITIONAL REMEDIES RESPECTING FACILITY 2
In the event that Facility 2 is not repaid in full on the
Facility 2 Maturity Date, the Lenders under Facility 2 may, in addition to all
other rights and remedies they may have:
13.3.1 require THC to convert the outstanding amount
(consisting of the principal capital and Capitalized
Interest) owing under Facility 2 into, and issue and
deliver to such Lenders, Common Shares of THC (the
"Resultant Shares"). The number of Resultant Shares
shall be determined on the basis of five times the
EBITDA of THC for the previous fiscal year in
accordance with the formula attached in Schedule C to
the Sale Agreement between WS Acquisition LLC,
Caisse, THC and certain shareholders of THC; provided
that the number of Common Shares issued pursuant to
such conversion right shall be limited such that,
after exercising the conversion right and/or after
the exercise of the warrants held by Caisse which
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are exchangeable for Common Shares, Caisse shall not
own more than 50.1% of the issued and outstanding
voting shares of the capital stock of THC; and/or
13.3.2 subject to the terms and conditions of the
Intercreditor Agreement, require that THC proceed
with the sale of all or a portion of the assets of
THC and apply the proceeds of any such sale in
reduction of the indebtedness owing to the Lenders in
a manner consistent with the terms of the
Intercreditor Agreement.
13.4 NOTICE OF DEFAULT
The Borrowers shall be in default hereunder by the mere lapse
of time without the requirement of any notice or delay other than as expressly
provided herein.
14. SHARING AND EQUALITY AMONG LENDERS
14.1 DISTRIBUTION AMONG LENDERS
Any payment received by the Paying Agent to be applied to
indebtedness of the Borrowers hereunder, including any amount received through
the exercise of a right of set-off by any Lender and the realization of the
Security, shall be distributed among the Lenders proportionate to their pro rata
share of the indebtedness to which such payment is to be applied. Such
distribution shall be made forthwith but no later than two Business Days after
receipt of such payment by the Paying Agent.
14.2 EQUALITY AMONG THE LENDERS
All rights of the Lenders hereunder or under the Security
shall rank PARI PASSU, pro rata to their respective share of the indebtedness of
the Borrowers to the Lenders hereunder.
14.3 OTHER SECURITY
No Lender shall obtain any additional security for the payment
of the indebtedness of the Borrowers hereunder, unless such security forms part
of the Security.
14.4 DIRECT PAYMENT TO A LENDER
If a Lender receives otherwise than through the Paying Agent a
payment which must be applied to the indebtedness of the Borrowers hereunder
(including any payment received through the exercise of a right of set-off or
the realization of the Security), such Lender shall remit to the Paying Agent
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the payment so received, in order that such payment be applied by the Paying
Agent to the indebtedness of the Borrowers hereunder in accordance with the
provisions of this Agreement.
14.5 ADJUSTMENTS AMONG LENDERS
If, at any time after the Agent has made a demand for payment
pursuant to Section 13.2, the ratio of the aggregate indebtedness of the
Borrowers to any Lender under Facility 1 or Facility 2 to the aggregate
indebtedness of the Borrowers to the Lenders is not equal to its Lender's
Proportion of Facility 1 or Facility 2, as the case may be, all Lenders shall
make payments among themselves as may be necessary or appropriate in order that
the amounts due to each Lender shall be proportional to their respective
Lender's Proportion of Facility 1 and Facility 2.
15. THE AGENT AND THE LENDERS
15.1 APPOINTMENT OF THE AGENT AND PAYING AGENT
Each Lender irrevocably appoints the Agent and the Paying
Agent to exercise on its behalf such rights and powers as are delegated to the
Agent and the Paying Agent, respectively, by the terms of this Agreement and as
are reasonably incidental thereto. Whenever acting in such capacity, the Agent
and the Paying Agent shall represent and bind all Lenders as herein provided. No
Lender shall exercise individually any of the rights and powers delegated to the
Agent or the Paying Agent hereunder. Without limiting the foregoing, the Paying
Agent shall be responsible, INTER ALIA, for administering Borrowings and
payments made pursuant to this Agreement, including calculating interest payable
by the Borrowers in accordance with this Agreement and receiving funds from
Lenders for disbursement to the Borrowers.
15.2 ACTION BY AGENT
Except as expressly required by this Agreement, the Agent
shall not be required to take or refrain from taking any action which it is
empowered to take under this Agreement or the Security documents, unless the
Agent has been required by the Majority Lenders to take or refrain from taking
any such action. Notwithstanding the foregoing, the Agent shall in no event be
required to take or refrain from taking any action which it would be required to
take or refrain from taking by the Majority Lenders if in its judgment, such
action or omission is contrary hereto or to applicable law or exposes it to
personal liability in circumstances in which it determines that indemnity under
Section 15.9 may not be available or adequate.
15.3 LIABILITY OF THE AGENT AND THE PAYING AGENT
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Neither the Agent nor the Paying Agent shall be liable for any
action taken or omitted to be taken by it in the absence of gross negligence or
wilful misconduct, provided it has acted in accordance with the provisions of
this Agreement. In addition, but without limiting the generality of the
foregoing, neither the Agent nor the Paying Agent:
15.3.1 shall be liable for any action it takes or omits to
take in good faith in accordance with the advice of
legal counsel, experts or professional advisors;
15.3.2 shall incur liability by acting upon any
communication or document believed by it to be
genuine and to have been signed, sent or given by the
proper Person or Persons;
15.3.3 shall have duty to investigate whether a Default has
occurred or is continuing;
15.3.4 shall have duty to examine or comment on the
validity, genuineness, sufficiency or accuracy of any
document or information supplied by the Borrowers or
the Material Subsidiaries to the Lenders through the
Agent.
15.4 NOTICES BY AGENT TO LENDERS
Whenever a notice of utilization, conversion or renewal is
given by a Borrower to the Agent and the Paying Agent, the Paying Agent shall
promptly provide the Lenders with the details of the Borrowing which is the
subject matter of the notice, in order that the Lenders may make available to a
Borrower concerned, through the Paying Agent, or as the case may be, may fund,
their respective proportions of such Borrowing.
15.5 MANNER OF DISBURSEMENT
15.5.1 Any amount to be disbursed by a Lender pursuant to a
Borrowing under the Credit shall be made available to
the Paying Agent by such Lender at the Paying Agent's
Branch of Account, by 2:00 p.m. on the date the
Borrowing is to be effected.
15.5.2 Any amount so received by the Paying Agent shall be
made available to a Borrower concerned at places to
be agreed to from time to time between the Borrowers
and the Paying Agent.
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15.6 NON-CONTRIBUTION OF A LENDER
Unless previously notified in writing by a Lender no less than
two Business Day before a Borrowing is to be effected that such Lender does not
intend to make available to the Paying Agent its proportion of such Borrowing,
the Paying Agent may assume that such Lender will be making its proportion of
such Borrowing available to the Paying Agent on such date and the Paying Agent
may, but is not required to, in reliance upon such assumption, make available to
a Borrower concerned an amount corresponding to such Lender's proportion of the
Borrowing. If such Lender fails to make its proportion of the relevant Borrowing
available to the Paying Agent on the relevant date, the Paying Agent shall be
entitled to recover on demand the amount of such Lender's proportion of the
Borrowing, from such Lender or, failing recovery from such Lender, from a
Borrower concerned on one day's notice. Interest shall accrue on such amount
during the period prior to such recovery at a rate per annum equal to the rate
applicable to a Dollar Loan and shall be paid to the Paying Agent for its own
account.
15.7 NOTICES OF DEFAULT
The Paying Agent and the Agent shall be entitled to assume
that no Default has occurred and is continuing, unless the Paying Agent and the
Agent have been notified by the Borrowers or any of the Material Subsidiaries of
any such Default, or has been notified by a Lender that such Lender considers
that a Default has occurred and is continuing. In such a case, the Agent and the
Paying Agent, as the case may be, shall promptly notify the Lenders of the
Default, but the Agent shall incur no liability for its failure to do so if such
Default has been remedied.
15.8 LIABILITY OF LENDERS
No Lender (including the Agent) shall have any liability
whatsoever:
15.8.1 as a consequence of the failure of any other Lender
to perform its obligations under this Agreement;
15.8.2 as a consequence of the failure of any Borrower or
any Material Subsidiary to perform its obligations
under this Agreement or any of the Security
documents;
15.8.3
for the accuracy or completeness of any information,
representations or warranties contained herein or
made in connection herewith or provided pursuant to
this Agreement, or for the legality, validity,
enforceability, sufficiency or value of this
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Agreement, the Security documents or any other
document or instrument contemplated thereby.
15.9 INDEMNIFICATION
Each Lender shall indemnify the Agent and the Paying Agent in
the proportion its Commitment bears to the Total Commitment, to the extent not
reimbursed by the Borrowers or the Material Subsidiaries, from and against all
liabilities, losses, expenses, claims or disbursements of any kind or nature
whatsoever which may be incurred or imposed on them, relating to or arising out
of this Agreement, the Security or any action taken or omitted to be taken by
the Agent, except for any portion of such liabilities, losses, expenses, claims
or disbursements resulting from its negligence or wilful misconduct.
15.10 CREDIT DECISION
Each Lender acknowledges that it has been and will continue to
be solely responsible for making its own independent appraisal and investigation
of the financial condition, credit- worthiness, affairs and viability of the
Borrowers and the Material Subsidiaries and that it has not relied on the Agent
or any other Lender in the making of its decision to enter into this Agreement.
15.11 LEGAL PROCEEDINGS AND ENFORCEMENT MEASURES
Any legal proceedings and enforcement measures on behalf of
all Lenders shall be taken by the Agent, and upon the request of the Agent, all
Lenders shall join the Agent in such proceedings or enforcement measures.
15.12 SHARING OF INFORMATION
The Borrowers authorize the Agent, the Paying Agent and the
Lenders to share with each other and with prospective assignees of and
participants in the Borrowings, any information held by them regarding each of
the Borrowers and its Subsidiaries or relating to this Agreement, provided
however that any information held by the Lenders subject to a confidentiality
agreement shall only be shared on the condition that the recipient thereof
agrees to be bound by such confidentiality agreement. The Agent shall provide
the Paying Agent with timely notice of changes in the rate of Capitalized
Interest accruing pursuant to Section 5.6.
15.13 NO ASSOCIATION AMONG LENDERS
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Nothing contained in this Agreement and no action taken
pursuant to it shall, or shall be deemed to, constitute the Lenders a
partnership, association, joint venture or other similar entity.
15.14 SUCCESSOR AGENT AND PAYING AGENT
Subject to the appointment and acceptance of a successor agent
as provided in this Section 15.14, the Agent or the Paying Agent may resign at
any time by giving written notice thereof to the Lenders and THC. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
agent with the approval of THC (such approval not to be unreasonably withheld).
Any such successor agent or paying agent appointed under this Section 15.14
shall be a financial institution which has an office in Montreal, Province of
Quebec. If no successor agent shall have been appointed by the Majority Lenders
within 90 days after the retiring agent's giving of notice of resignation, then
the retiring agent may, on behalf of the Lenders and with the approval of THC
(such approval not to be unreasonably withheld), appoint a successor agent.
Notwithstanding the foregoing, Montreal Trust Company may resign as Paying Agent
and appoint as its successor Computershare Trust Company of Canada upon
providing ten Business Days prior notice to the Agent and THC. Upon the
appointment as Agent or Paying Agent of a successor agent, such successor agent
shall thereupon succeed to and become vested with all the rights, powers,
obligations and duties of the retiring agent and shall be deemed for the
purposes of this Agreement to be the Agent or Paying Agent, as the case may be,
and the retiring agent shall be discharged from its duties and obligations under
this Agreement. After any retiring agent's resignation hereunder as the Agent or
Paying Agent, the provisions of this Agreement shall continue in effect for its
benefit, for the benefit of the Lenders and for the benefit of THC in respect of
any actions taken or omitted to be taken by the retiring agent while it was
acting as the Agent or Paying Agent.
15.15 OPTION OF LENDERS TO REPLACE A LENDER
In the event that any Lender does not consent to any amendment
or waiver requiring the unanimous consent of the Lenders, the consenting Lenders
shall have the option, but not the obligation, to purchase the dissenting
Lender's interest in this Agreement. If the consenting Lenders do not exercise
such option for the total amount of such interest, the dissenting Lender shall
have the option of locating a new Lender to assume the dissenting Lender's
interest in this Agreement, such new lender to be acceptable to the Borrowers
and the Agent acting reasonably. The Borrowers shall reimburse the Agent for any
cost or expense incurred in respect of such assignment or proposed assignment.
16. WAIVERS AND AMENDMENTS
16.1 AMENDMENTS AND WAIVERS WITH THE APPROVAL OF THE MAJORITY
LENDERS
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Subject to the other Sections of this Article 16, the
provisions of this Agreement or of any of the Security documents may only be
amended or waived by an instrument in writing signed by the Agent, with the
approval of the Majority Lenders.
16.2 AMENDMENTS BY UNANIMOUS APPROVAL
The provisions of this Agreement relating to any of the
following matters may only be amended by an instrument in writing signed by the
Agent, with the prior consent of all the Lenders:
16.2.1 Any lengthening or shortening of the term of this
credit facility;
16.2.2 Any change in the amount of any principal amount
payable hereunder or in the time within which
principal must be repaid;
16.2.3 Any change in the interest rates, fees and Discounts
payable hereunder and in the manner in which they are
calculated or in the time within which they must be
paid;
16.2.4 Any subordination of the Security or of any amount
payable hereunder;
16.2.5 Any modification, amendment or release of the
Security, except as expressly permitted herein;
16.2.6 Any change in the conditions precedent provided in
Section 4.2, in Articles 13, 14, or 16, in the
definition of Majority Lenders, or in any matter
requiring the approval or consent of all Lenders.
16.3 AMENDMENTS WITH THE APPROVAL OF THE AGENT
No amendment to the provisions of this Agreement respecting
the duties, obligations and liabilities of the Agent shall be made without the
approval of the Agent.
16.4 BINDING EFFECT UPON LENDERS
Any extension, indulgence, amendment or waiver granted or made
in accordance with the provisions of this Article 16 shall be binding upon all
the Lenders.
16.5 FAILURE TO ACT
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No waiver and no failure or delay in the exercise of any right
or remedy shall preclude the further exercise of any of the rights and remedies
of the Agent and the Lenders hereunder. In addition no such failure or delay
shall be construed as a waiver of any of the provisions of this Agreement or the
Security documents.
17. ASSIGNMENTS
17.1 ASSIGNMENTS
17.1.1 Each Lender may assign, in whole or in part, its
rights and obligations in respect of the Credit to
any other financial institution with the prior
written consent of the Agent (which consent shall not
be unreasonably withheld), provided that, when no
Event of Default has occurred and is continuing, (i)
no such assignment (other than an assignment by
Caisse as Lender) shall have the effect of increasing
the Borrowers' cost of Borrowings hereunder without
the prior consent of THC and (ii) if Caisse as Lender
wishes to make any such assignment, Caisse shall use
its best efforts in order that the assignment shall
not have the effect of increasing the Borrowers' cost
of Borrowings hereunder. For greater certainty, the
expression "Borrowers' cost of Borrowings" shall
incude the cost to the Borrowers of making additional
payments as contemplated in Section 7.5.
17.1.2 No such assignment may be made if the aggregate
amount of the assigning Lender's Commitment following
such assignment, or the portion thereof which is
assigned, is not at least $10,000,000 and in integral
multiples of $1,000,000.
17.1.3 Any financial institution becoming an assignee of the
whole or part of the rights of a Lender and of its
obligations towards the Borrowers in accordance with
Section 17.1.1 shall become a Lender hereunder and
this Agreement and the Commitment of the assignor
shall be amended automatically.
17.1.4 A Lender which, in accordance with Section 17.1.1,
assigns all or any part of its rights or obligations
hereunder shall pay to the Agent on demand an
assignment fee of $2,500 and all expenses, including
but not limited to legal fees, incurred by the Agent
in connection with such transfer. If as a result of
such transfer, the Agent incurs any increased costs
or additional expenses in connection with the
performance of its duties hereunder, the assignee
shall upon demand from time to time pay to the Agent
such amount as shall compensate the Agent for any
such
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reasonable increased costs or additional expenses
(and the certificate of the Agent specifying the
amount of such compensation shall be conclusive in
the absence of manifest error).
17.1.5 For the purposes of this Article 17, Caisse, a
pension fund and organizations performing similar
functions shall be deemed to be financial
institutions to the extent that such entities are
authorized to make loans or purchase participations
of the nature contemplated in this Section 17 in the
ordinary course of business.
18. MISCELLANEOUS
18.1 BOOKS AND ACCOUNTS
The Agent shall keep books and accounts evidencing the
indebtedness of the Borrowers under the Credit and the transactions made in
respect thereof pursuant to this Agreement. Such books and accounts shall, in
the absence of manifest error, be deemed to represent accurately that
indebtedness and those transactions. The Borrowers acknowledge that the actual
recording of the amount of any Borrowing or repayment thereof under this
Agreement, and interest, fees, and other amounts due in connection with this
Agreement, in the accounts of the Borrowers maintained by the Agent shall
constitute PRIMA FACIE evidence of the Borrowers' indebtedness and liability
from time to time under this Agreement; provided that the obligation of the
Borrowers to pay or repay any indebtedness and liability in accordance with this
Agreement shall not be affected by the failure of the Agent to make such
recording.
18.2 DETERMINATION
In the absence of manifest error, any determination of fact
(other than the determination of Material Adverse Effect) made by the Agent in
accordance with this Agreement shall be final and binding upon the Borrowers,
the Material Subsidiaries and the Lenders.
18.3 NOTES
The Borrowings may, but need not be, evidenced by notes or
other instruments of indebtedness that the Borrowers undertake to execute upon
request from the Agent. Payment of those notes and instruments may only be
demanded in accordance with the provisions of this Agreement.
18.4 ORAL NOTICES OR INSTRUCTIONS
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If any Borrower or any of its agents or employees makes an
oral request or gives an oral notice to the Agent or the Paying Agent, the Agent
and Paying Agent shall be entitled to rely upon such oral instructions. The
Agent and the Paying Agent shall not incur any liability to the Borrowers or the
Material Subsidiaries or to the Lenders in acting upon oral instructions which
the Agent or the Paying Agent believes in good faith to have been given by a
Person authorized by a Borrower to give such instructions or to effect any
applicable transaction. In the event of a discrepancy between oral instructions
and any written confirmation in respect thereof, or in the absence of receiving
confirmation, the oral instructions as understood by the Agent or the Paying
Agent shall be deemed to be the controlling instructions.
18.5 UNASSIGNABILITY BY BORROWER
No Borrower may assign its rights or the amounts to be
received by it under this Agreement.
18.6 EXPENSES
The Borrowers shall pay the reasonable out-of-pocket expenses
incurred by Caisse or the Agent in connection with the preparation, negotiation,
execution, and administration of this Agreement, the Security and the Related
Agreements due diligence investigations, environmental audits or other studies
made in connection with or pursuant to this Agreement, the syndication and
pre-approved public announcement of the credit facility provided hereunder and
the exercise of the rights and remedies of Caisse or the Agent and the Lenders
under this Agreement and the Security, including the reasonable fees and
expenses of legal counsel, professional advisors and experts of the Agent or
Caisse. The Borrowers shall also pay the reasonable fees and expenses of legal
counsel to the Paying Agent incurred, as the case may be, pursuant to Section
15.3.1.
18.7 COMPENSATION
Subject to their respective obligations under Section 14.4,
each Lender is authorized (but not obligated) at any time or from time to time
after the occurrence of an Event of Default which is continuing, without notice
to the Borrowers or to the Material Subsidiaries to compensate and to apply any
and all deposits held for or in the name of any of the Borrowers or of any
Material Subsidiaries and any indebtedness at any time owing or payable by such
Lender to or for the credit of or the account of any of the Borrowers or of any
Material Subsidiaries against and on account of the obligations of the Borrowers
or the Material Subsidiaries payable to such Lender under this Agreement,
irrespective of currency and of whether or not such Lender has made any demand
under this Agreement and whether or not these
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obligations of the Borrowers have matured. The provisions of this Section 18.7
shall not restrict such rights as the Lenders may be entitled to without relying
upon the provisions of this Section 18.7.
18.8 IRREVOCABILITY OF NOTICES OF UTILIZATION, CONVERSION, RENEWAL
OR REPAYMENT
A Borrower may not cancel a notice of utilization, conversion,
renewal or repayment and shall indemnify the Lenders through the Agent for any
damage resulting from its failure to act in accordance with such a notice.
18.9 IRREGULAR NOTICE OF UTILIZATION, CONVERSION, RENEWAL OR
REPAYMENT
The Agent and the Paying Agent may consider of no effect any
notice of utilization, conversion, renewal or repayment if such notice or the
proposed utilization, conversion or renewal is not in compliance with the
provisions of this Agreement.
18.10 INDEMNIFICATION
18.10.1 If any future law, regulation, administrative
decision or guideline or decision of any Court
increases the cost for any Lender of its Commitments
or the cost for any Lender of, or reduces the income
receivable by any Lender from, the Borrowings
(including, without limitation, by reason of the
imposition of reserves, taxes or requirements as to
the capital adequacy of such Lender but excluding any
costs incurred as a result of tax increases of
general application), such Lender may send to the
Borrowers a statement indicating the amount of such
additional cost or reduction of income and its method
of calculation; in the absence of manifest error,
this statement shall be conclusive evidence of the
amount of such additional cost or reduction of income
and the Borrowers shall pay forthwith this amount to
such Lender. Each Lender agrees that, as promptly as
practicable after it becomes aware of any
circumstances referred to above which would result in
any such increased cost or reduction in income, the
affected Lender shall, to the extent not inconsistent
with such Lender's internal policies of general
application, use reasonable commercial efforts to
minimize such costs or reductions.
18.10.2 The Borrowers shall pay to any Lender the amount of
any and all losses suffered by the latter and
resulting from Acceptances having been converted or
repaid before the maturity dates of their respective
periods, whatever the
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cause for such conversion or repayment may be. The
affected Lender may send to the Borrowers a statement
indicating the amount of any such loss suffered by it
and its method of calculation; in the absence of
manifest error, this statement shall be conclusive
evidence of the amount of such loss and the Borrowers
shall pay forthwith this amount to the affected
Lender.
18.10.3 Each of the Borrowers and the Material Subsidiaries
permits the Agent, acting reasonably, to conduct
inspections and appraisals of all or any of its
records, business and assets at any time and from
time to time, upon one (1) Business Days' prior
notice, to verify compliance with applicable
environmental laws and, if the Agent has a reasonable
basis to believe that there may be a violation of
environmental law by any Borrower or Material
Subsidiary which could reasonably be expected to have
a Material Adverse Effect, the Agent may also appoint
experts or consultants to make any inspection or
appraisal and prepare reports on same. Any costs and
expenses incurred by the Agent as a result of the
foregoing shall be reimbursed by the Borrowers on
demand. If the Agent is required to expend any funds
in compliance with applicable environmental laws,
regulations, administrative or court order in respect
thereof or in connection with any recourse for
damages, the Borrowers shall indemnify the Agent in
respect of such expenditures.
18.10.4 The Borrowers shall, to the extent permitted by
applicable laws, indemnify the Lenders and the Agent,
and their respective directors, officers, employees,
and agents and shall hold each of them harmless from
and against any and all losses, liabilities damages,
costs, penalties, fines, expenses and claims
(including reasonable legal fees and costs) which at
any time or from time to time may be paid or incurred
by, or asserted against, any of them for, with
respect to or as a direct or indirect result of (i)
any environmental activity by the Borrowers or any of
their Subsidiaries or (ii) any failure on the part of
the Borrowers or any of their Subsidiaries to comply
with any environmental laws, and (iii) any
misrepresentation, breach of warranty or breach of
covenant on the part of the Borrowers or any of their
Subsidiaries with respect to environmental matters.
18.10.5 The Borrowers shall indemnify the Lenders, the Agent
and the Paying Agent and their respective directors,
officers, employees and agents and hold each
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of them harmless from and against all losses, costs,
expenses (including reasonable fees, charges and
disbursements of counsel) and liabilities including
those arising from any litigation or other
proceedings relating to or arising out of the
transactions contemplated by this Agreement and the
Related Agreements, provided that no Person
indemnified under this Section 18.10.5 shall be
indemnified for its own negligence or wilful
misconduct.
18.10.6 The Borrowers shall not assert, and hereby waive, 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, any Related Agreement or
any other agreement or instrument contemplated
hereby, any Borrowings or the use of the proceeds
thereof.
18.11 LIABILITY OF BORROWERS
18.11.1 Each Borrower shall be solidarily (that is, jointly
and severally) liable for the aggregate amount of
Borrowings and for all the obligations and
liabilities of the Borrowers hereunder. Each Borrower
hereby renounces to the benefits of division and
discussion. The liability of a Borrower hereunder
shall not be released, reduced or affected by reason
of any waiver or extension granted by the Lenders
without the consent of such Borrower or by reason of
any release of or stay of proceedings against the
other Borrower pursuant to any law or by reason of
any circumstance which might constitute a defence
available to a guarantor.
18.11.2 Each of the Borrowers irrevocably appoints the other
to act as its attorney for the purposes of exercising
the rights and performing the obligations of the
Borrowers hereunder and the Borrowers shall be bound
by all things done and documents executed by any
Borrower.
18.12 PREVIOUS AGREEMENTS
This Agreement amends and completely restates (thereby
superseding but not novating) any previous agreement in connection with the
credit facility provided for herein.
18.13 LANGUAGE
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This Agreement has been drawn up in English at the express
request of the parties. Cette convention a ete redigee en anglais a la demande
expresse des parties.
18.14 SEVERABILITY
If any provision of this Agreement is determined to be void,
voidable, illegal or unenforceable, in whole or in part, all other provisions of
this Agreement shall nevertheless remain in full force and effect, and all
provisions hereof are hereby declared and shall be deemed, unless otherwise
expressly provided, to be separate, severable and distinct.
19. NOTICES
19.1 SENDING OF NOTICES
Any demand, notice or other communication (hereinafter
referred to as a "Communication") to be given to a party in connection with this
Agreement shall be given in writing and shall be given by personal delivery, by
registered mail or by transmittal by facsimile addressed to the recipient at the
address indicated opposite its name on the signature pages hereto, or at such
other address as may be notified by such party to the others pursuant to this
Section 19.1.
19.2 RECEIPT OF NOTICES
Any Communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by registered mail, on the fifth Business Day following the
mailing thereof and, if given by facsimile on the day of transmittal thereof if
given during normal business hours of the recipient or on the next Business Day
if given after normal business hours on any day. If the party giving any
Communication knows or ought to know of any difficulties with the postal system
or facsimile transmission system which might affect the delivery of mail or
facsimile transmission, any such Communication shall be given by personal
delivery or by other methods of communication not affected by the said
difficulties.
20. COUNTERPARTS
This Agreement may be executed in any number or 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.
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
CAISSE DE DEPOT ET DE PLACEMENT DU
QUEBEC
c/o CDP Capital d'Amerique Inc.
0000 XxXxxx Xxxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxx
Suite 600 ----------------------------------
Montreal, Quebec Name: Xxxxx Xxxxxxx
H3A 1G1
Title: Duly authorized representative
Attention: Xxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000 By: /s/ Xxxxx XxXxxxxx
----------------------------------
Name: Xxxxx XxXxxxxx
Title: Duly authorized representative
000 Xxxxxxx Xxxx THE HOCKEY COMPANY
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxx By: /s/ Xxxxxxx Xxxxx
00000, X.X.X. ----------------------------------
Name: Xxxxxxx Xxxxx
Attention: President
Telecopier No.: (000) 000-0000 Title:__________________________________
Telephone No.: (000) 000-0000
0000 Xx Xxxxxxxxxxx Xxxx. Xxxx XXXXX XXXXX INC.
Xxxxx 000
Xxxxxxxxx, Xxxxxx By: /s/ Xxxxxxx Xxxxx
H3Z 3C1 ----------------------------------
Name: Xxxxxxx Xxxxx
Attention: President
Telecopier No.: (000) 000-0000 Title:
Telephone No.: (000) 000-0000 ----------------------------------
0000 XxXxxx Xxxxxxx Xxxxxx XXXXXXXX TRUST COMPANY
0xx Xxxxx
Xxxxxxxx, Xxxxxx By: /s/ Xxxxx Xxxxxxxx
H3A 3K9 ----------------------------------
Name: Xxxxx Xxxxxxxx
----------------------------------
Title:
----------------------------------
Attention: Corporate Trust Services
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000 By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
----------------------------------
Title:
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