EXHIBIT 10.3
------------
LOAN AGREEMENT
DATED AS OF MARCH 31, 2004
RIVERSIDE FOREST PRODUCTS LIMITED
as Borrower
- and -
THE NAMED LENDERS
as Lenders
- and -
BANK OF MONTREAL
as a Hedging Lender
- and -
HSBC BANK CANADA
as a Hedging Lender
- and -
BANK OF MONTREAL
as Agent
TABLE OF CONTENTS
1.0 DEFINITIONS..........................................................2
1.1 TERMS DEFINED...............................................2
1.2 CONSTRUCTION...............................................34
2.0 LOANS...............................................................35
2.1 MAXIMUM AMOUNT OF LOANS....................................35
2.2 COMMITMENT TO ADVANCE......................................36
2.3 CANCELLATION...............................................36
2.4 CONVERSION/ROLLOVER........................................36
2.5 PURPOSE OF BORROWING.......................................36
2.6 CLASSES AND TYPES OF LOANS AND BORROWINGS..................37
2.7 SWINGLINE LOANS............................................37
2.8 LETTERS OF CREDIT..........................................40
2.9 HEDGING PROGRAM............................................45
3.0 BORROWING...........................................................46
3.1 DRAW REQUEST...............................................46
3.2 BORROWING PROCEDURES.......................................47
3.3 FAILURE TO BORROW..........................................47
3.4 EVIDENCE OF BORROWING......................................47
3.5 BORROWINGS NOT TO EXCEED BORROWING BASE....................47
4.0 CONDITIONS PRECEDENT................................................48
4.1 GENERAL CONDITIONS.........................................48
4.2 CONDITIONS FOR BORROWING...................................49
5.0 REPAYMENT...........................................................51
5.1 REPAYMENT..................................................51
5.2 ALLOCATION OF REPAYMENT....................................51
5.3 CURRENCY...................................................51
6.0 PREPAYMENTS.........................................................51
6.1 VOLUNTARY PREPAYMENTS......................................51
6.2 IRREVOCABILITY.............................................52
6.3 BREAKAGE COSTS.............................................52
7.0 LIBOR LOAN INTEREST PERIODS.........................................52
7.1 SELECTION..................................................52
7.2 NO NOTICE..................................................52
7.3 EXTENSIONS.................................................53
7.4 CALENDAR DAYS..............................................53
7.5 OTHER ADJUSTMENTS..........................................53
7.6 MATURITY DATE..............................................53
8.0 INTEREST............................................................53
8.1 LIBOR RATES................................................53
8.2 LIBOR DUE DATES............................................53
8.3 CANADIAN DOLLAR RATES......................................54
8.4 U.S. DOLLAR RATES..........................................54
8.5 CANADIAN DOLLAR AND U.S. DOLLAR DUE DATES..................54
8.6 DETERMINING APPLICABLE MARGIN..............................54
8.7 DEFAULT INTEREST...........................................55
8.8 CURRENCY AND DEFAULT.......................................55
8.9 CERTIFICATION..............................................55
8.10 INTEREST ACT (CANADA)......................................55
9.0 CERTAIN COVENANTS CONCERNING BA LOANS...............................55
9.1 LENDERS' PURCHASE OF BANKERS ACCEPTANCES AND
MAKING OF BA EQUIVALENT LOANS..............................55
9.2 OTHER COVENANTS CONCERNING BA LOANS........................56
9.3 STAMPING FEE...............................................56
9.4 TERM AND PREPAYMENT........................................57
9.5 POWER OF ATTORNEY -- DEPOSITORY BILLS AND
DEPOSITORY NOTES...........................................57
10.0 COMMITMENT FEE......................................................58
11.0 SUBSTITUTE BASIS....................................................59
11.1 MARKET DISTURBANCE.........................................59
11.2 SUSPENSION OF LIBOR BORROWING..............................60
12.0 PAYMENTS............................................................60
12.1 PLACE AND TIME.............................................60
12.2 NET PAYMENTS...............................................61
12.3 REPAYMENT TO AGENT.........................................62
13.0 INCREASED COSTS.....................................................63
13.1 PAYMENT OF COMPENSATING AMOUNTS............................63
13.2 NOTICE OF PAYMENT OF COMPENSATING AMOUNT,
TIME OF PAYMENT AND ADJUSTMENT.............................64
13.3 ELECTION BY BORROWER IF COMPENSATING AMOUNT CLAIMED........65
13.4 REFUND OF COMPENSATING AMOUNT..............................65
13.5 LIMIT ON OBLIGATION TO PAY.................................65
14.0 ILLEGALITY..........................................................66
15.0 SECURITY............................................................66
15.1 DELIVERY OF SECURITY.......................................66
15.2 CERTAIN GENERAL AGREEMENTS RELATING TO SECURITY............66
16.0 REPRESENTATIONS AND WARRANTIES......................................68
16.1 GENERAL....................................................68
16.2 SURVIVING..................................................72
17.0 COVENANTS...........................................................72
17.1 DURATION...................................................72
17.2 GENERAL....................................................73
17.3 INSURANCE..................................................76
17.4 INFORMATION................................................77
17.5 NEGATIVE COVENANTS.........................................78
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17.6 PERFORMANCE BY LENDERS.....................................80
17.7 SUCCESSOR CORPORATION......................................81
18.0 DEFAULT.............................................................82
18.1 EVENTS OF DEFAULT..........................................82
18.2 ACCELERATION...............................................86
18.3 COMBINATION................................................88
18.4 INDEMNITIES................................................88
19.0 EXPENSES............................................................89
20.0 WAIVERS, REMEDIES CUMULATIVE........................................91
21.0 NOTICES.............................................................91
21.1 ADDRESS....................................................91
21.2 NON-BUSINESS DAYS..........................................92
22.0 ASSIGNMENTS.........................................................92
22.1 SUCCESSORS.................................................92
22.2 ASSIGNMENT BY BORROWER.....................................92
22.3 ASSIGNMENT AND PARTICIPATION BY LENDERS....................92
22.4 ASSIGNMENT BY HEDGING LENDER...............................94
22.5 DISCLOSURE.................................................94
23.0 AGENCY..............................................................95
23.1 DEFINITIONS................................................95
23.2 APPOINTMENT OF AGENT AND OTHER REGULATORY MATTERS..........95
23.3 INDEMNIFICATION AND REIMBURSEMENT OF AGENT.................97
23.4 RESIGNATION BY AND TERMINATION OF THE AGENT................98
23.5 CONSENTS AND ENFORCEMENT...................................99
23.6 ADVICE....................................................102
23.7 GENERAL...................................................102
23.8 SHARING INFORMATION.......................................103
23.9 ACKNOWLEDGMENT BY BORROWER................................104
23.10 AMENDMENTS TO SECTION 23.0................................104
24.0 CURRENCY INDEMNITY.................................................104
24.1 INDEMNITY.................................................104
24.2 INDEPENDENT OBLIGATION....................................105
25.0 NO PARTNERSHIP.....................................................105
26.0 TIME OF ESSENCE....................................................105
27.0 GOVERNING LAW AND JURISDICTION.....................................106
28.0 SEVERABILITY.......................................................106
29.0 COUNTERPARTS.......................................................107
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SCHEDULES:
Schedule A -- Borrowing Procedures
Schedule B -- Form of Officer's Certificate
Schedule C -- Bank Credit Facilities, Third Party Debt Instruments,
Letters of Credit and Hedging Contracts
Schedule D -- Address
Schedule E -- Form of Assignment and Transfer Agreement
Schedule F -- Material Subsidiaries
Schedule G -- Form of Guarantee of a Material Subsidiary
Schedule H -- Lenders' Revolving Facility Commitments and Percentage
Loan Commitments
Schedule I -- Form of Borrowing Base Certificate
Schedule J -- Forest Tenures and Real Property Interests
Schedule K -- Certain Existing Permitted Encumbrances
Schedule L -- Persons Excluded from Eligible Inventory and Eligible
Receivables
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LOAN AGREEMENT
THIS LOAN AGREEMENT made as of the 31st day of March, 2004
BETWEEN:
RIVERSIDE FOREST PRODUCTS LIMITED
(the "Borrower")
AND:
THE SEVERAL FINANCIAL INSTITUTIONS FROM TIME TO TIME NAMED AS
LENDERS ON THE SIGNATURE PAGES OF THIS AGREEMENT
(collectively, the "Lenders" and individually, a "Lender")
AND:
BANK OF MONTREAL, as a Hedging Lender
(in such capacity, a "Hedging Lender")
AND:
HSBC BANK CANADA, as a Hedging Lender
(in such capacity, a "Hedging Lender")
AND:
BANK OF MONTREAL, as Agent
(in such capacity, the "Agent")
BACKGROUND:
A. The Borrower has requested that the Lenders make available to the
Borrower a credit facility (the "REVOLVING FACILITY") of up to $60 million
Canadian Dollars for the general corporate purposes of the Borrower; and
B. The Borrower may further request that one or more of the Hedging
Lenders provide Hedging Program Contracts (as hereinafter defined) pursuant to a
program (the
"HEDGING PROGRAM") to reduce the risk to the Borrower of adverse fluctuations in
interest rates and currencies.
WITNESS THAT in consideration of the premises and of the agreements
hereinafter set forth and of other consideration the Borrower, the Lenders, the
Hedging Lenders and the Agent agree as follows:
1.0 DEFINITIONS
1.1 TERMS DEFINED In this Agreement:
"ACQUISITION" means the acquisition by the Borrower of the Lignum
Shares and the Vendor's Loans (as defined in the Share Purchase
Agreement) pursuant to the Share Purchase Agreement.
"AFFILIATE" means:
(a) with respect to a Person, any other Person who, directly or
indirectly, beneficially owns voting securities (or comparable
interests) of the first Person carrying more than 10% of the
voting rights attached to all voting securities (or comparable
interests) of the first Person for the time being outstanding;
(b) any director (or Person exercising similar powers) or officer
of the first Person; or
(c) any Person controlled, directly or indirectly, by any one or
more of the Persons set out in clause (a) or (b) of this
definition;
where, for the purposes of clause (c) of this definition, a Person is
"controlled" by another Person if the second Person has the right,
through the exercise of voting rights (whether attached to securities
of the first Person or by virtue of a membership interest in the first
Person or otherwise), by agreement or otherwise, to elect a majority of
the directors (or Persons exercising similar powers) of, or to control
the conduct or policies of, the first Person.
"AGREED CURRENCY" has the meaning given by Section 24.1.
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"ANNUAL BUSINESS PLAN" means a budget or forecast (including an income
statement, a balance sheet and a cash flow statement) prepared for a
fiscal year as to all of the expected activities, revenues and expenses
of the Borrower and Material Subsidiaries on a consolidated basis
setting out, on a quarterly basis, forecasts for capital expenditures
and the nature, estimated amount and timing of such expenditures. An
Annual Business Plan shall also set out all major assumptions
(including assumptions as to product prices, sales volumes and interest
and exchange rates) used in the preparation thereof and the proposed
sources of fibre of the Borrower and Material Subsidiaries.
"APPLICABLE MARGIN" means, with respect to each Type of Loan shown
below and the undrawn amount of the Revolving Facility Commitment, the
percentage rate or fee per annum set out below as applicable and
determined, where indicated, on a quarterly basis:
BA STAMPING FEE RATE,
LIBOR MARGIN
DEBT/ & US BASE RATE COMMITMENT FEE RATE
EBITDA RATIO LETTER OF CREDIT & (ON UNDRAWN REVOLVING
(QUARTERLY) FEE RATE PRIME RATE MARGIN FACILITY COMMITMENT)
------------- --------------------- ----------------- --------------------
From Closing Date to 3.00% 2.00% 0.75%
first anniversary thereof
(irrespective of ratio)
<2.5 2.00% 1.00% 0.50%
>2.5 and <3.5 2.25% 1.25% 0.625%
>3.5 and <4.5 2.75% 1.75% 0.75%
>4.5 3.50% 2.50% 0.875%
The Letter of Credit Fee Rate for any Documentary Letter of Credit
shall be as determined at the time of issue thereof by the Issuing Bank
or the Swingline Lender, as the case may be.
"ATTRIBUTABLE DEBT" means, as to any particular lease under which any
Person is at the time liable as lessee, and at any date as of which the
amount thereof is to be determined, the present value of the rent
required to be paid by the lessee during the remaining term thereof
(including any period for which such lease has been extended or may, at
the option of the lessor, be extended), excluding amounts required to
be paid on account of operating costs, maintenance and repairs,
insurance, taxes, assessments, water and other utility rates and
similar charges (such present value to be calculated from the
respective due dates of such rent to the date of determination at a
discount rate per annum equivalent to the rate inherent in such lease,
as determined in accordance with GAAP). In the case of
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any lease which is terminable by the lessee upon the payment of a
penalty, such rent shall also include the amount of such penalty, but
no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated. In the
case of any lease under which the amount of rent is indeterminate (for
example, where rent is based on sales or profits), the annual net
amount of rent required to be paid shall be the net amount of rent paid
during the preceding fiscal year.
"BA EQUIVALENT LOAN" means a loan, made at a discount, in Canadian
Dollars by a Lender that does not accept or stamp Bankers Acceptances,
such loan being equal to that Lender's Percentage Loan Commitment of
the face amount of the BA Loan requested by the Borrower. The amount
advanced for each BA Equivalent Loan shall equal the face amount
thereof, discounted by the BA Rate applicable to Schedule I Lenders or
Schedule II/III Lenders, as the case may be, and also deducting
therefrom the Stamping Fee that such Lender would have been entitled to
if it accepted Bankers Acceptances. Each BA Equivalent Loan shall
remain outstanding for the term of the Bankers Acceptances issued by
the Borrower and accepted and purchased by the other Lenders
concurrently therewith.
"BA LOAN" means a Loan made available to the Borrower by the Lenders by
way of a Bankers Acceptance or a BA Equivalent Loan.
"BA RATE" means, as determined by the Agent:
(a) in respect of a Bankers Acceptance to be accepted and
purchased by a Schedule I Lender or a BA Equivalent Loan to be
made by a Schedule I Lender:
(i) with a maturity date of one, two, three or six
months, the average banker's acceptance bid rate as
quoted on "Reuters Screen CDOR Page" (or such other
page as may from time to time replace such page on
that service for the purpose of displaying quotations
for banker's acceptances accepted by leading Canadian
financial institutions) at approximately 10:00 a.m.
on the day of a proposed Borrowing by way of a
Bankers Acceptance for a term co-extensive with that
Bankers Acceptance; or
(ii) with a maturity date other than one described in
paragraph (a)(i), the arithmetic average (expressed
to five decimal points) of the
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discount rate quoted from time to time by the Agent
as the discount rate for purchasing bills of exchange
in an amount substantially equal to the reference
amount (as defined below) at approximately 10:00 a.m.
on the day of a proposed Borrowing by way of a BA
Loan for a term co-extensive with that BA Loan.
(b) in respect of a Bankers Acceptance to be accepted and
purchased by a Schedule II/III Lender or a BA Equivalent Loan
to be made by a Schedule II/III Lender:
(i) with a maturity date of one, two, three or six
months, the lesser of:
(A) the average bankers' acceptance bid rate as
quoted on "Reuters Screen CDOR Page" (or such
other page as may from time to time replace
such page on that service for the purpose of
displaying quotations for banker's
acceptances accepted by leading Canadian
financial institutions) at approximately
10:00 a.m. on the day of a proposed Borrowing
by way of a BA Loan for a term co-extensive
with that BA Loan, to which bid rate figure
shall be added 0.10; and
(B) the respective discount rate quoted from time
to time by the Schedule II/III Lender as its
discount rate for purchasing its bills of
exchange in an amount substantially equal to
the reference amount (as defined below) at
approximately 10:00 a.m. on the day of a
proposed Borrowing by way of a BA Loan for a
term co-extensive with that BA Loan; or
(ii) with a maturity date other than one described in
paragraph (b)(i), the discount rate described in
paragraph (b)(i)(B).
For the purposes of this definition "reference amount" with respect to
any Lender and term of a Bankers Acceptance or a BA Equivalent Loan,
means the amount of that Lender's portion of the BA Loan being
requested by the Borrower by way of a Bankers Acceptance or a BA
Equivalent Loan for that term.
"BA STAMPING FEE RATE" means the rates so described in the definition
of Applicable Margin.
5
"BANKERS ACCEPTANCE" means a xxxx of exchange in Canadian Dollars in a
form approved by the Agent that:
(a) is drawn by the Borrower, and presented to and accepted by a
Lender, in accordance with the requirements of Section 9.0 and
Schedule A; and
(b) matures on a Business Day which is up to six months (or such
other period as the Lenders in their absolute discretion may
approve from time to time) after the date on which it is
presented to and accepted by a Lender.
"BORROWING" means the receiving of a Loan by the Borrower from the
Lenders or the Swingline Lender on a given date, or resulting from:
(a) a conversion pursuant to Section 2.4 on a given date;
(b) a rollover from one LIBOR Interest Period to a subsequent
LIBOR Interest Period;
(c) a rollover of a BA Loan to a new maturity date; or
(d) the issue of a Letter of Credit,
and other co-relative terms such as "BORROW" or "BORROWED" shall be
construed accordingly.
"BORROWING BASE" means, at any time, as disclosed in the most recent
Borrowing Base Certificate delivered to the Agent, the sum of the
following:
(a) 75% of Eligible Receivables;
(b) 50% of the value of Eligible Inventory (valued at the lower of
cost and net realizable value) minus the total amount of
Preferred Claims; and
(c) 100% of Eligible Tax Receivables,
provided that the amount determined under paragraph (b) cannot exceed
50% of the total amount of the Borrowing Base.
"BORROWING BASE CERTIFICATE" means a certificate of the Borrower, to be
delivered to the Agent pursuant to Section 17.4(e), substantially in
the form of
6
Schedule I hereto or such other form as may be acceptable to the Agent,
acting reasonably.
"BUSINESS DAY" means:
(a) any day, other than a Saturday, Sunday or statutory holiday,
on which the Agent's main branches in Vancouver, British
Columbia and Toronto, Ontario are open for the transaction of
banking business; and
(b) if such day relates to any transaction concerning U.S. Dollars
contemplated by this Agreement, also a day on which commercial
banks in New York, New York are open for the transaction of
banking business; and
(c) if such day relates to determining LIBOR as contemplated by
this Agreement, also a day on which dealings in U.S. Dollars
are carried on by and between banks in the London interbank
eurocurrency market;
unless the Agent has notified the Borrower that commercial banks will
not be open for the transaction of banking business on a particular day
in any of London, England, New York, New York, Toronto, Ontario or
Vancouver, British Columbia.
"CANADIAN DOLLARS" means the lawful currency for the time being of
Canada.
"CANADIAN DOLLAR LOAN" means a Loan made available to the Borrower by
the Lenders or by the Swingline Lender by way of direct advances in
Canadian Dollars and which the Borrower has elected, pursuant to the
provisions of this Agreement, to pay interest thereon based on the
Prime Rate.
"CAPITAL LEASE" means a lease under which all or a portion of the rents
or other amounts payable thereunder are required to be classified and
accounted for as capital lease obligations on a balance sheet prepared
in accordance with GAAP.
"CLASS", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are
Revolving Facility Loans or Swingline Loans.
"CLOSING DATE" means the date on which the conditions set out in
Section 4.2(a) have been satisfied.
7
"COMMITMENT FEE RATE" means the rates so described in the definition of
Applicable Margin.
"COMPENSATING AMOUNT" has the meaning given by Section 13.1.
"COMPENSATION FACILITY" has the meaning given by Section 13.1.
"CONSOLIDATED NET INCOME" means, for any period, the consolidated net
income of the Borrower and all Subsidiaries calculated in accordance
with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means "Shareholders' Equity" of the
Borrower as shown on the most recent consolidated balance sheet of the
Borrower delivered to the Agent pursuant to Sections 17.4(a) and (b)
less all amounts shown on such balance sheet for goodwill, deferred
assets (which, as of the date hereof, includes only deferred financing
charges), trade names, trademarks, patents, copyrights and other
similar intangible property.
"DBNA" means the DEPOSITORY BILLS AND NOTES ACT (Canada) as amended
from time to time.
"DEBT" means, without duplication:
(a) any obligation for borrowed money which under GAAP would be
shown on a balance sheet or a note thereto as a liability
(excluding reserves for deferred income taxes and other
reserves to the extent that they do not constitute an
obligation, but including the face amount of outstanding
Bankers Acceptances and the undrawn amount of any Letter of
Credit);
(b) the capitalized amount of all obligations under Capital Leases
(including those resulting from Sale and Leaseback
Transactions);
(c) indebtedness secured by any Lien existing on property subject
to such Lien, whether or not the indebtedness secured thereby
has been assumed;
(d) guarantees, endorsements (other than endorsements of
negotiable instruments for collection in the ordinary course
of business) and other contingent liabilities (whether direct
or indirect) in connection with the indebtedness for borrowed
money, shares or dividends of any Person;
8
(e) obligations under any contract providing for the making of
loans, advances or capital contributions to any Person, or for
the purchase of any property from any Person, in each case in
order to enable such Person primarily to maintain working
capital, net worth or any other balance sheet condition or to
pay debts, dividends or expenses;
(f) obligations under any contract for the purchase of materials,
supplies or other property if such contract (or any related
document) requires that payment for such materials, supplies
or other property shall be made regardless of whether or not
delivery of such materials, supplies or other property is ever
made or tendered, provided that base load obligations for
utilities used by the Borrower or any Subsidiary in the
ordinary course of business shall not be considered Debt;
(g) obligations under any contract to rent or lease (as lessee)
any real or personal property if such contract (or any related
document) provides that the obligation to make payments
thereunder is absolute and unconditional under conditions not
customarily found in commercial leases then in general use or
requires that the lessee purchase or otherwise acquire
securities or obligations of the lessor, provided that the
obligations under an operating lease, including an operating
lease resulting from a Sale and Leaseback Transaction (as
determined by GAAP), shall not be considered Debt;
(h) the amount of any obligations of the Borrower and any Material
Subsidiary that are convertible into shares, which amount is
classified as debt in accordance with GAAP; and
(i) obligations under any other contract that, in economic effect,
is substantially equivalent to any of the foregoing.
"DEBT/CAPITALIZATION RATIO" means, at the time of determination, the
ratio obtained by dividing Total Debt as at the end of the Borrower's
most recent fiscal quarter by Total Capitalization as at that date, in
each case taking into account FX Gain/Loss.
"DEBT/EBITDA RATIO" means, at the time of determination, the ratio
obtained by dividing Total Debt at the end of the Borrower's most
recent fiscal quarter by EBITDA for the four most recent quarters.
9
"DEPOSITORY XXXX" and "DEPOSITORY NOTE" have the meanings given by the
DBNA.
"DRAW REQUEST" means a written statement requesting a Loan containing
the information provided for by Section 3.1 and Schedule A signed by an
individual or individuals so designated from time to time in writing by
any two members of Senior Management for that purpose.
"EBITDA" means, for any particular period:
(a) sales revenues for such period, net of any duties, including
any duties imposed in connection with the export or import of
goods, such as countervailing duties and anti-dumping duties;
minus:
(b) cost of products sold for such period as calculated in
accordance with GAAP and reported on the Borrower's
consolidated statement of earnings and retained earnings for
such period; and
(c) selling and administration expenses for such period as
calculated in accordance with GAAP and reported on the
Borrower's consolidated statement of earnings and retained
earnings for such period;
plus:
(d) any amortization and depreciation in such costs of products
sold and selling and administration expenses as reported for
such period;
(e) net realized foreign exchange gain or loss from the sale of
forest products; and
(f) net cash gain or loss included in miscellaneous income from
the sale of forest products and reported on the Borrower's
Financial Statements as either miscellaneous or other income.
"ELIGIBLE INVENTORY" means, at any time, all Inventory owned by any of
the Obligants, but specifically excluding any Inventory that:
(a) is not located in Canada or the United States of America;
10
(b) is not subject to the applicable duly perfected first priority
Lien created by the Security;
(c) is subject to any Lien other than the Security, unless such
Lien is specifically subordinated to the Security in a form
acceptable to the Agent;
(d) is located in or on premises:
(i) leased to or otherwise occupied by an Obligant,
unless the lessor or applicable other Person has
entered into an agreement satisfactory to the Agent,
acting reasonably, by which it has, among other
things, waived its right to distrain against such
Inventory;
(ii) (other than premises described in (i) above) of, or
is in the possession of, any other Person unless the
applicable other Person has waived in writing all
Liens that may at any time be held by such other
Person in respect of the Inventory;
(iii) where the Inventory is commingled with the property
of another Person or is not capable of being
identified as belonging to an Obligant and no other
Person;
(iv) owned or controlled by a Person that is insolvent or
is the subject of any insolvency proceeding; or
(v) owned or controlled by such other Person as the
Borrower and the Agent, acting reasonably, may from
time to time agree is unacceptable, and who is named
in Schedule L;
or is a log located in or on premises that are not owned or
leased by an Obligant from a lessor that has entered into an
agreement described in subparagraph (i) above;
(e) is defective;
(f) has been delivered to any Person on consignment;
(g) has been dealt with by the Obligant in a manner which has
generated a Receivable;
11
(h) is subject to any licensing, patent, royalty, trademark, trade
name or copyright agreements with any third Persons which
would require any consent of any third Person upon sale or
disposition of that Inventory or the payment of any monies to
any third Person as a precondition of such sale or of a
disposition (other than any such Inventory where the inability
to obtain any such consent or waiver of any such payment would
give rise to an obligation on the part of a third Person to
purchase such Inventory at not less than cost);
(i) is a tree being grown as nursery stock or for a use other than
production of lumber and wood products or is intended to be
replanted in another location for the purpose of
reforestation;
(j) is standing timber; or
(k) the completion of manufacture, sale or other disposition
thereof by or on behalf of the Agent following an Event of
Default requires the consent of any Person or constitutes a
breach or default under any contract or agreement to which the
relevant Obligant is a party or to which such Inventory is
subject.
"ELIGIBLE RECEIVABLES" means, at any time, Receivables of the
Obligants, less any Receivable that:
(a) is not then subject to a duly perfected first priority Lien
created by the Security;
(b) is subject to any Lien other than Security, unless such Lien
is specifically subordinated to the Security in a form
acceptable to the Agent;
(c) is payable more than 60 days after the statement date of the
invoice, unless insured with an insurer acceptable to the
Agent, acting reasonably;
(d) has been outstanding for 60 days or more;
(e) is subject to any offset or counterclaim by the applicable
account debtor;
(f) is owed by any person whose principal place of business is
located in a jurisdiction outside Canada or the United States
of America (other than a
12
jurisdiction that has been approved by the Agent, with the
consent of the Majority Lenders) unless the payment thereof is
covered by insurance acceptable to the Agent;
(g) is payable in a currency other than Canadian Dollars or U.S.
Dollars (other than a currency approved by the Agent, with the
consent of the Majority Lenders);
(h) is owed by an Affiliate of any Obligant, or by one Obligant to
another, or any director, officer, employee, agent or
representative of any Obligant or of any such Affiliate or is
owed by a Governmental Body (unless such Receivable owed by
such Governmental Body is then subject to a duly perfected
first priority Lien created by the Security);
(i) with respect to which a cheque, note, draft or other payment
instrument has not been honoured in accordance with its terms;
(j) is owed by any Person that is insolvent, or is otherwise
doubtful of collection in the opinion of the Agent, acting
reasonably;
(k) is owed by such Person as the Borrower and the Agent, each
acting reasonably, may from time to time agree is
unacceptable, and who is named in Schedule L;
(l) is in respect of a consignment sale or other sale or
disposition of goods not owned by the Obligant; or
(m) represents finance charges.
For the purposes of this definition, Receivables shall not include the
credit balance in any bank account or any Duty Adjustment (as defined
in the Share Purchase Agreement) that results in an increase in the
Purchase Price (as defined in the Share Purchase Agreement).
"ELIGIBLE TAX RECEIVABLES" means amounts payable to an Obligant by the
Government of Canada in respect of goods and services tax or income
tax, or both, in the amount specified on any assessment, provided that:
(a) the payment of such amount is not being disputed by the
Government of Canada;
13
(b) such amount will not be subject to set-off; and
(c) the Borrower has provided to the Agent evidence of such
assessment.
"ENVIRONMENTAL LAWS" means all applicable national, federal,
provincial, state and local statutes, laws, bylaws, rules, regulations,
ordinances, orders and codes, and all decrees, judgments and orders,
relating to the protection of the environment, public health or
transportation of dangerous goods and, without restricting the
generality of the foregoing, includes those relating to the generation,
use, storage, transportation, treatment, disposal or cleanup of
Hazardous Materials, and the emission, discharge or release of
Hazardous Materials into the air, surface water, groundwater, land
surface or subsurface strata.
"EQUITY" means, as at the date of determination, "Shareholders' Equity"
of the Borrower as shown on the most recent consolidated balance sheet
of the Borrower delivered to the Agent pursuant to Sections 17.4(a) and
(b).
"ESCROW AND SECURITY AGREEMENT" means the agreement dated February 25,
2004 between the Borrower and the U.S. Trustee, in its capacity as
escrow agent and as trustee, pursuant to which the net proceeds of the
issue of the Senior Notes were deposited with the U.S. Trustee on the
conditions therein set out.
"EVENT OF DEFAULT" means any of the events set out in Section 18.1.
"FEDERAL FUNDS RATE" means, for any day, the rate of interest per annum
which is the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System in the United
States of America arranged by federal funds brokers, as published for
such day (or if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate
is not so published for any day which is a Business Day in New York,
the average of the quotations for such day in respect of such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
"FINANCIAL INSTRUMENT OBLIGATIONS" means obligations arising under:
(a) any interest swap agreement, forward rate agreement, floor,
cap or collar agreement, futures or options, insurance or
other similar agreement or
14
arrangement, or any combination thereof, entered into or
guaranteed by the Borrower where the subject matter of the
same is interest rates or the price, value, or amount payable
thereunder is dependent or based upon interest rates or
fluctuations in interest rates in effect from time to time
(but, for certainty, excluding conventional floating rate
debt);
(b) any currency swap agreement, cross-currency agreement, forward
agreement, floor, cap or collar agreement, futures or options,
insurance or other similar agreement or arrangement, or any
combination thereof, entered into or guaranteed by the
Borrower where the subject matter of the same is currency
exchange rates or the price, value or amount payable
thereunder is dependent or based upon currency exchange rates
or fluctuations in currency exchange rates in effect from time
to time; and
(c) any agreement for the making or taking of any commodity, any
commodity swap agreement, floor cap or collar agreement or
commodity future or option or other similar agreements or
arrangements, or any combination thereof, entered into or
guaranteed by the Borrower where the subject matter of the
same is any commodity or the price, value or amount payable
thereunder is dependent or based upon the price of any
commodity or fluctuations in the price of any commodity;
to the extent of the net amount due by, or accruing for the account of,
the Borrower thereunder (determined by marking to market the same in
accordance with market practice at the time).
"FINANCIAL STATEMENTS" means a balance sheet, statement of earnings
(operations) and retained earnings and a statement of cash flow, all
fairly presenting in all material respects the financial position of
the Person to whom they relate and all prepared in accordance with
GAAP. Financial Statements shall contain comparative information for
the preceding comparative period restated, if necessary, to conform to
GAAP for the current period.
"FOREST TENURE" means an agreement under Part 3 of the FOREST ACT
(British Columbia), including the agreements described in Schedule J.
"FRONTING FEE" means a fee equal to 0.20% per annum of the undrawn
amount of any Letter of Credit.
15
"FX GAIN/LOSS" means the unrealized gain or loss on Debt reported on
the Borrower's "Consolidated Statements of Operations and Retained
Earnings". In taking FX Gain/Loss into account, FX Gain shall be added
to Debt and subtracted from Equity, and FX Loss shall be subtracted
from Debt and added to Equity, in each case as calculated cumulatively
on a quarterly basis from such Statements, commencing with those for
the quarter ending March 31, 2004.
"GAAP" means generally accepted accounting principles, and policies and
standards that are provided for in the Canadian Institute of Chartered
Accountants Handbook from time to time.
"GOVERNMENTAL BODY" means any government, parliament, legislature,
regulatory authority, agency, tribunal, department, commission, board
or court or other law, regulation, or rule making entity (including a
Minister of the Crown) having jurisdiction on behalf of Canada or the
United States of America, or any province, state, municipality or
district, or any subdivision thereof.
"GUARANTEE" means a guarantee, substantially in the form of Schedule G,
given by a Material Subsidiary in accordance with provisions of Section
17.2(m).
"GUARANTOR" means any Material Subsidiary which has delivered to the
Agent a Guarantee and a security agreement over such Material
Subsidiary's Inventory and Receivables.
"HAZARDOUS MATERIALS" means all hazardous or toxic materials,
pollutants, effluents, contaminants, radioactive materials, flammable
explosives, chemicals known to cause cancer or reproductive toxicity,
emissions, washes and all other chemicals, materials and substances,
the handling, storage, release, transportation or disposal of which is
or becomes prohibited, limited or regulated by any Governmental Body,
or which, even if not so regulated, is or becomes known to pose a
hazard to the health and safety of any Person, including, without
limitation, asbestos, petroleum and petroleum by-products, urea
formaldehyde foam insulation, polychlorinated biphenyls, all substances
from time to time designated as a "contaminant" or "waste" under the
WASTE MANAGEMENT ACT (British Columbia) and all substances from time to
time designated as "contaminant", "waste", "hazardous substances",
"hazardous materials", "toxic substances" or a similar designation
under any Environmental Law.
"HEDGING LENDER" means any of Bank of Montreal, HSBC Bank Canada or any
Affiliate of either of them, only if such bank or Affiliate has a
Hedging Program
16
Contract, notwithstanding that Bank of Montreal and HSBC Bank Canada
are each defined as a "Hedging Lender".
"HEDGING PROGRAM" has the meaning given by Recital B.
"HEDGING PROGRAM CONTRACTS" means agreements or arrangements of the
type described in paragraphs (a) and (b) of the definition of Financial
Instrument Obligations, between the Borrower and a Hedging Lender.
"HEDGING PROGRAM SENIOR SECURED AMOUNT" means, at the time of
determination, the aggregate marked to market exposure (determined in
accordance with then current market practice) under all Hedging Program
Contracts up to a limit of 10% of the Borrowing Base in effect at such
time.
"HEDGING PROGRAM SUBORDINATED SECURED AMOUNT" means, at the time of
determination, the aggregate marked to market exposure (determined in
accordance with then current market practice) under all Hedging Program
Contracts which exceeds 10% of the Borrowing Base in effect at such
time.
"INTEREST COVERAGE RATIO" means, at the time of determination, the
ratio obtained by dividing EBITDA for the previous 12 months by
Interest Expense for that period.
"INTEREST EXPENSE" means, for any particular period:
(a) whether or not paid, all amounts that would, in accordance
with GAAP, be deducted in calculating Consolidated Net Income
on account of interest on Debt (after giving effect to Hedging
Program Contracts) including, without duplication, interest on
Subordinated Debt, imputed interest in respect of Capital
Leases and accrued interest, but excluding arrangement fees
and financing costs incurred in the ordinary course of
business in connection with the negotiation and documentation
of specific transactions under which Debt is incurred;
less:
(b) interest income earned in such period.
17
For greater certainty, Interest Expense includes "interest
expense/income" as reported in the Borrower's Financial Statements or
as included in "other income" on the Borrower's Financial Statements.
"INVENTORY" means inventory of an Obligant, including goods acquired or
held for sale or lease or furnished or to be furnished under contracts
of rental or service, all raw materials, work in process, finished
goods, returned goods, repossessed goods, and all packaging materials,
supplies and containers relating to or used or consumed in connection
with any of the foregoing.
"ISSUING BANK" means Bank of Montreal in its capacity as the issuer of
Letters of Credit under this Agreement or the Swingline Lender pursuant
to Section 2.7.6, and their respective successors in such capacity as
provided in Sections 2.7.5 and 2.8.9.
"LC DISBURSEMENT" means a payment made by the Issuing Bank or Swingline
Lender pursuant to a drawing under a Letter of Credit.
"LC EXPOSURE" means, at any time, the total of:
(a) the aggregate undrawn amount of all outstanding Letters of
Credit at such time; and
(b) the aggregate amount of all LC Disbursements that have not
then been reimbursed by or on behalf of the Borrower.
The LC Exposure of any Lender at any time shall be its Percentage Loan
Commitment for the Revolving Facility of the total LC Exposure at such
time.
"LENDERS" means the Persons defined as such on page 1 of this Agreement
and any other Person who becomes Lender pursuant to Section 22.3(a).
Unless the context otherwise requires, the term "Lenders" includes the
Issuing Bank and the Swingline Lender.
"LETTER OF CREDIT" means a letter of credit or guarantee, other than an
Excluded LC, in either Canadian Dollars or U.S. Dollars issued by the
Issuing Bank or the Swingline Lender under the Revolving Facility
pursuant to the terms of this Agreement. A "DOCUMENTARY LETTER OF
CREDIT" means a Letter of Credit that expires less than one year from
the date of its issue, concerns the import of goods by the Borrower or
a Subsidiary and qualifies as a "Trade-related Contingency"
18
under Guideline A - Part 1 - Capital Adequacy Requirements dated
January, 2001 of the Office of the Superintendent of Financial
Institutions (Canada) and any successor guidelines. An "EXCLUDED LC"
means any letter of credit or guarantee for which the Issuing Bank or
the Swingline Lender holds a credit balance in a bank account, a term
deposit or other similar instrument as security for the obligations of
an Obligant in respect thereof; for greater certainty, the issue of an
Excluded LC shall not constitute a Borrowing under the Revolving
Facility.
"LETTER OF CREDIT FEE" has the meaning given by Section 2.8.10.
"LETTER OF CREDIT FEE RATE" means the rates so described in the
definition of Applicable Margin.
"LIBOR" means, with respect to any LIBOR Interest Period, the rate of
interest (expressed as an annual rate) determined by the Agent to be
the arithmetic average (rounded up to the nearest 1/16%) of the annual
rates of interest published on the "Reuters Screen LIBO Page" at which
U.S. Dollars are offered for deposit at approximately 11:00 a.m.
London, England time on the second Business Day before the first day of
that LIBOR Interest Period in the London interbank eurocurrency market
for a deposit in U.S. Dollars for a term co-extensive with that LIBOR
Interest Period in an amount substantially equal to the respective
LIBOR Loan. If for any reason such rate does not appear on the "Reuters
Screen LIBO Page" as contemplated, then LIBOR shall be the rate of
interest quoted by the Agent as its LIBO rate for such LIBOR Interest
Period and the amount of such LIBOR Loan.
"LIBOR INTEREST PERIOD" means, in relation to each LIBOR Loan, subject
to availability, a period of one, two, three or six months, or such
other period as may be agreed to by the Lenders in their absolute
discretion, ascertained in accordance with Section 3.1 and Schedule A.
"LIBOR LOAN" means a Loan made available to the Borrower by the Lenders
by way of direct advances in U.S. Dollars, on which the Borrower has
elected, pursuant to the provisions of this Agreement, to pay interest
based on LIBOR.
"LIEN" means: any mortgage, lien, pledge, charge, security interest or
other encumbrance (including any judgment or attachment lien); any
interest or title of any vendor, lessor, consignor or lender to, or
other secured party of, a Person under any consignment, conditional
sale or other title retention agreement or lease, upon or with respect
to any property or asset of such Person; or any liens
19
for Taxes and any liens, trusts or deemed trusts in favour of any
Governmental Body of any kind whatsoever, including those relating to
any Taxes and any amounts withheld from employees' payrolls for
remittance to a taxing authority.
"LIGNUM" means Lignum Limited.
"LIGNUM SHARES" means all of the issued and outstanding shares in the
capital of Lignum.
"LOAN" means the principal amount of each Borrowing by the Borrower
hereunder whether by way of a Canadian Dollar Loan, a LIBOR Loan, a
U.S. Dollar Loan, a BA Loan, a Swingline Loan or the issue of a Letter
of Credit, or (as the context requires) the principal and face and
undrawn amounts thereof from time to time outstanding hereunder.
"LOAN DOCUMENTS" means this Agreement, all Guarantees, all Security and
all other agreements and documents contemplated hereby or thereby.
"MAJORITY LENDERS" means, if there are two or fewer lenders, then all
such lenders and, if there are more than two Lenders, then the Lenders
from time to time holding 66?% or more of the Revolving Facility
Commitment.
"MATERIAL ADVERSE EFFECT" means any event, condition or occurrence that
has, or is reasonably likely to result in, a material adverse effect
on:
(a) the business, condition (financial or otherwise), results of
operations, prospects, assets or liabilities of the Borrower
and all Subsidiaries taken as a whole;
(b) the ability of the Borrower or any Subsidiary to observe or
perform any of their respective obligations under the Loan
Documents; or
(c) the validity or enforceability (in the sense of there being
adequate legal remedies) of the principal terms of any Loan
Document.
"MATERIAL SUBSIDIARY" means:
(a) Lignum, RFP Timber Ltd. and RFP Power Ltd.;
20
(b) any Subsidiary to which any Material Subsidiary transferred
any material property or assets (either in a single or a
series of transactions); and
(c) any other Subsidiary of the Borrower, the total assets or net
sales (as determined in accordance with GAAP) of which for any
quarter constituted more than 5% of the Borrower's
consolidated total assets and net sales, respectively,
provided that each Material Subsidiary named in (a) above shall in no
case cease to be a Material Subsidiary.
"NOTE INDENTURE" means the note indenture dated February 25, 2004
between the Borrower, certain Guarantors and the U.S. Trustee and any
renewal, extension, modification, replacement or restatement thereof,
provided that the Agent is satisfied with the subordination provisions
thereof.
"NOTE PURCHASE AGREEMENT" means the agreement dated February 17, 2004,
among the Borrower, certain Guarantors and the "Initial Purchasers" as
defined therein, pursuant to which the Initial Purchasers purchased
U.S. $150 million in aggregate principal amount of the Senior Notes.
"OBLIGANT" means each of the Borrower and the Guarantors and, for
greater certainty, includes any successor of the Borrower and Lignum
arising from any amalgamation of the two.
"OFFERING MEMORANDUM" means the offering memorandum of the Borrower
dated February 17, 2004, pursuant to which the Borrower offered to sell
the Senior Notes.
"OFFICER'S CERTIFICATE" means a certificate signed by a member of
Senior Management of the Borrower in the form of Schedule B.
"PAYMENT CURRENCY" has the meaning given by Section 24.1.
"PENSION PLAN" means:
(a) a "registered pension plan" (as defined in the INCOME TAX ACT
(Canada)) which is subject to the funding requirements of
applicable benefits legislation in any jurisdiction of Canada
applicable to employees resident in Canada of the Borrower or
any Subsidiary;
21
(b) any employee pension benefit plan subject to the provisions of
Title IV or Section 302 of the EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974 (United States) or Section 4.01 of the
INTERNAL REVENUE CODE OF 1986 (United States); or
(c) any other pension benefit plan, retirement compensation
arrangement, post-retirement benefit plan or other similar
arrangement applicable to employees of the Borrower or any
Subsidiary.
"PERCENTAGE LOAN COMMITMENT" means that percentage that a Lender's
Revolving Facility Commitment is of the aggregate Revolving Facility
Commitment of all Lenders under the Revolving Facility, taken as a
whole, and designated as such and set forth opposite the name of that
Lender in Schedule H (as amended or deemed to be amended from time to
time), or in the agreement pursuant to which such Lender shall have
assumed its Revolving Facility Commitment, as applicable, subject to
adjustment as provided by this Agreement.
"PERMITTED BUSINESS" means any business conducted by the Borrower or
any Material Subsidiary on the date of this Agreement and any business
reasonably related, ancillary or complementary to, or reasonable
extensions of, such business.
"PERMITTED ENCUMBRANCES" means, as at any particular time, any of the
following Liens or other rights:
(a) liens or privileges for Taxes, assessments or governmental
charges or levies which:
(i) are not at the time due or delinquent; or
(ii) are due or delinquent but the validity of which is
being contested in good faith at the time;
(b) liens, claims, privileges or charges filed or registered or
judgments rendered against a Person, which:
(i) are being contested in good faith at the time or for
which a stay of execution has been procured; or
22
(ii) are not, either individually or in the aggregate,
prejudicial to the business, operations, property or
assets of such Person;
(c) undetermined or inchoate liens, privileges and charges arising
or potentially arising under statutory provisions which have
not at the time been filed or registered in accordance with
applicable law or of which written notice has not been duly
given in accordance with applicable law or which, although
filed or registered, relate to obligations not due or
delinquent;
(d) restrictions, easements, rights-of-way, servitudes or other
similar rights in land (including, without in any way limiting
the generality of the foregoing, party wall agreements and
easements, rights-of-way and servitudes for railways, sewers,
xxxxx, drains, steam, gas and oil pipe lines, gas and water
mains, electric light and power and telephone or telegraph
lines or cables for television and other forms of
communication, conduits, cables, wires and other incidental
equipment) granted to, or reserved or taken by, other persons
which will not, either individually or in the aggregate,
materially and adversely impair or interfere with the use of
the property for the purposes for which it is held and
mortgages of and other liens and encumbrances against such
easements, rights-of-way, servitudes or other similar rights
in land;
(e) the rights reserved to or vested in municipalities or
governmental or other public authorities or agencies, by any
statutory provision or by the terms of leases, licences,
franchises, grants or permits that affect any land, to
terminate the leases, licences, franchises, grants or permits
or to require annual or other periodic payments as a condition
to the continuance thereof;
(f) restrictive covenants affecting the uses to which any land may
be put, that do not, either individually or in the aggregate,
materially and adversely impair or interfere with the use of
the property for the purposes for which it is held, provided
that such covenants are complied with;
(g) reservations in any original grants from the Crown of any land
or interests therein, statutory exceptions to title, and
reservations of mineral rights (including coal, oil and
natural gas) in any grants from the Crown or from any other
predecessors in title;
23
(h) securities to public utilities or to any municipalities or
governmental or other public authorities when required by the
utility, municipality, governmental or other public authority
in connection with the supply of services or utilities or the
operations of the Borrower or a Material Subsidiary but not in
connection with indebtedness for borrowed money or the
guarantee thereof;
(i) any builder's, mechanic's, architect's, supplier's of
material, labourer's, materialman's or other similar liens or
privileges incidental to the construction, improvement or
maintenance of any property or the furnishing of materials or
supplies, where the action to enforce the same has not
proceeded to a final judgment and is being defended in good
faith;
(j) warehousemen's, carrier's and other similar common law or
statutory liens or privileges, not subject to an action to
enforce or where the action to enforce the same is being
defended in good faith;
(k) liens or deposits in connection with bids, tenders or
contracts or to secure workers' compensation, unemployment
insurance or other similar statutory assessments, or to secure
cost of litigation when required by law, and surety or appeal
bonds;
(l) any other liens or privileges or other encumbrances of a
nature similar to the foregoing which are of a minor nature
and will not individually or in the aggregate materially and
adversely impair or interfere with the use of the property for
the purposes for which it is held or the operation on or value
of any business conducted therein;
(m) any Lien on any assets acquired after the date hereof
(including the assets of any acquired Subsidiary) or any Lien
to secure the whole or any part of the cost of constructing or
installing fixed improvements on property; provided that:
(i) each such Lien shall at all times be confined solely
to the assets so acquired or such improvements;
(ii) the principal amount of Debt secured by each such
Lien shall at no time exceed the cost of the assets
or improvements (including the principal amount of
the Debt secured thereby), whether or not the
24
mortgagor thereunder has any personal liability with
respect to the assets so acquired; and
(iii) such acquisition, including any Debt incurred or to
be incurred in connection therewith, does not
otherwise create a breach of any provision of this
Agreement;
(n) any Lien created for the sole purpose of renewing or refunding
any Lien referred to in paragraphs (m), (p), (q) or (r);
provided that the Debt secured thereby shall not exceed the
principal amount of Debt so secured at the time of such
renewal or refunding and that such renewal or refunding Lien
shall be limited to all or any part of the same property and
improvements and additions to improvements thereon that
secured the Lien renewed or refunded;
(o) any arrangement with any bank, insurance company or other
lender or investor providing for the leasing of any property
(except a lease for a temporary period not to exceed three
years by the end of which it is intended that the use of such
property by the lessee will be discontinued), that has been or
is to be sold or transferred by the Borrower or any Material
Subsidiary to such lender or investor or to any Person to whom
funds have been or are to be advanced by such lender or
investor on the security of such property (a "SALE AND
LEASEBACK TRANSACTION"), provided that:
(i) immediately prior to the entering into of such
arrangement, such arrangement could be created
pursuant to paragraph (m) (without regard to when the
property in question was acquired) on such property
to secure Debt in an amount equal to the Attributable
Debt with respect to such Sale and Leaseback
Transaction; and
(ii) contemporaneously with or immediately after the sale
or transfer, the person incurring the liability
applies an amount equal to the fair market value of
the property so sold and leased back at the time of
entering into such Sale and Leaseback Transaction (as
determined by that Person) to the prepayment (other
than mandatory prepayment) of Debt of that Person;
25
(p) any Lien existing as of the date of this Agreement (including
those described in Schedule K) or granted or issued thereafter
pursuant to a contractual commitment entered into prior to the
date of this Agreement;
(q) any Lien in favour of the Borrower or a Material Subsidiary
that secures Debt owing by a Person dealing at arm's length
with the Borrower or such Subsidiary;
(r) any Lien on property of a corporation which exists at the time
such corporation is merged into, or amalgamated or
consolidated with, the Borrower or any Material Subsidiary or
on property of a corporation at the time it becomes a Material
Subsidiary;
(s) any Lien on a credit balance in a bank account, a term
deposit, or other similar instrument that secures Excluded LCs
(including those described in Schedule K), up to an aggregate
amount at any one time of $1 million;
(t) the Escrow and Security Agreement; and
(u) the Security.
"PERSON" means, as the context requires, an individual, a partnership,
a corporation, a trust, a joint venture or other unincorporated
association, a body corporate, a cooperative association, a
Governmental Body and a combination of any of the foregoing.
"POTENTIAL DEFAULT" means any event which with the giving of notice or
lapse of time (or any combination thereof), all as provided in Section
18.1, would constitute an Event of Default; except that, if any such
event arises as a result of the Borrower's or a Material Subsidiary's
failure to observe or perform its obligations under Section 17.2(a), so
long as the Borrower is diligently proceeding to rectify the situation
in question and a Material Adverse Effect would not likely result, any
such event shall not be a Potential Default.
"PREFERRED CLAIMS" means, at the time of determination, the total
amount accrued to such time of any statutory rights, claims and
preferences, which have or may have priority over the Security,
including any right, claim or preference under the following federal
statutes:
(a) CANADA PENSION PLAN ACT;
26
(b) EMPLOYMENT INSURANCE ACT;
(c) EXCISE TAX ACT; and
(d) INCOME TAX ACT;
and the following British Columbia statutes:
(e) CORPORATION CAPITAL TAX ACT;
(f) EMPLOYMENT STANDARDS ACT;
(g) FOREST ACT;
(h) FOREST AND RANGE PRACTICES ACT;
(i) FOREST PRACTICES CODE OF BRITISH COLUMBIA ACT;
(j) INCOME TAX ACT;
(k) LOGGING TAX ACT;
(l) SOCIAL SERVICE TAX ACT;
(m) WOODWORKER LIEN ACT; and
(n) WORKERS COMPENSATION ACT.
"PRIME RATE" means, for any day, the floating annual rate of interest
equal to the greater of:
(a) the annual rate of interest so designated from time to time by
the Agent as its prime rate for loans in Canadian Dollars to
borrowers in Canada; and
(b) the 30-day BA Rate plus 1.00%.
"PROCEEDS" means any account, money or other property or asset received
or generated upon the sale, exchange, collection or other disposition
of any property or asset.
"QUARTER" means any of the three-month periods in any calendar year
commencing on the first day of the months of January, April, July and
October.
"RECEIVABLES" means all debts, amounts, claims, demands, monies, and
choses in action which now are, or which may at any time hereafter be,
due and owing to or owned by an Obligant arising from the sale of
Inventory, including accounts
27
owing by sales agents to an Obligant in connection with the sale of
Inventory and also including Proceeds of such accounts and Proceeds of
Inventory which are accounts.
"REVOLVING FACILITY" has the meaning given by Recital A.
"REVOLVING FACILITY AVAILABILITY PERIOD" means the period from the date
of this Agreement to the date which is one day prior to the Revolving
Facility Maturity Date.
"REVOLVING FACILITY COMMITMENT" means, at the time of determination,
the initial aggregate amount of $60 million, less the amount by which
the Revolving Facility has been cancelled or reduced pursuant to this
Agreement, up to such time that the Lenders (including the Swingline
Lender and the Issuing Bank) have agreed to lend under the Revolving
Facility and, with respect to each Lender, the commitment, if any, of
such Lender to make the Revolving Facility Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder,
expressed as an amount representing the maximum aggregate amount of
such Lender's Revolving Facility Exposure hereunder, as such commitment
may be reduced or cancelled from time to time. The initial amount of
each Lender's Revolving Facility Commitment is set forth in Schedule H
(as amended or deemed to be amended from time to time), or in the
agreement pursuant to which such Lender shall have assumed its
Revolving Facility Commitment, as applicable.
"REVOLVING FACILITY EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's
Revolving Facility Loans and its LC Exposure and Swingline Exposure at
such time.
"REVOLVING FACILITY MATURITY DATE" means March 31, 2007.
"REVOLVING FACILITY MAXIMUM AMOUNT" means, at any time, the lesser of
the Revolving Facility Commitment and the amount of the Borrowing Base.
"SAME DAY FUNDS" means:
(a) in the case of U.S. Dollars, U.S. Dollar funds settled through
the New York Clearing House Interbank Payments System or such
other funds for payment in U.S. Dollars as the Agent shall
specify as being customary at
28
the time for the settlement of international transactions in
New York City of the type contemplated by this Agreement; and
(b) in the case of Canadian Dollars, immediately available funds
in lawful money of Canada.
"SCHEDULE I LENDER" means a Lender that is listed in Schedule I to the
BANK ACT (Canada).
"SCHEDULE II/III LENDER" means a Lender that is listed in Schedule II
or III to the BANK ACT (Canada).
"SECURITIZATION" means the process by which current assets of the
Borrower or any Material Subsidiary are sold on a revolving basis to an
arm's length third party as a means of raising working capital or
repaying the Revolving Facility.
"SECURITY" means all present and future security held by or on behalf
of the Lenders or the Hedging Lenders securing or intending to secure,
the obligations of the Borrower under this Agreement and any Hedging
Program, including the security described in Section 15.1.
"SENIOR LONG-TERM DEBT" means debt for borrowed money (excluding for
greater certainty any Capital Leases), with an original term to
maturity of more than one year, that is not Subordinated Debt.
"SENIOR MANAGEMENT" means any Person from time to time holding any of
the following positions with the Borrower and whose name and true
signature has been furnished to the Agent by the Borrower:
(a) Chairman;
(b) President;
(c) Chief Executive Officer;
(d) Vice Chairman;
(e) Chief Operating Officer;
(f) Secretary;
(g) Treasurer;
(h) Chief Financial Officer; and
(i) Executive Vice-President.
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"SENIOR NOTES" means the 7.875% Senior Notes due 2014, issued pursuant
to the Note Indenture.
"SERIES B-D NOTES" means the Borrower's:
(a) U.S. $10,000,000 Series B, 8.64% Senior Fixed Rate Notes, due
May 30, 2004;
(b) U.S. $10,000,000 Series C, 8.86% Senior Fixed Rate Notes, due
May 30, 2004; and
(c) U.S. $25,000,000 Series D, 8.80% Senior Fixed Rate Notes, due
July 17, 2007,
all issued pursuant to the Amended and Restated Note Purchase
Agreement dated as of May 27, 1999, between the Borrower and
the respective purchasers named therein.
"SHARE PURCHASE AGREEMENT" means the agreement dated February 1, 2004
among the Borrower, Xxxxxx X. Xxxx Ltd., Xxxx X. Xxxx and Xxxxxxx X.
Xxxx concerning the purchase of the Lignum Shares and Vendor's Loans.
"SINKING FUND" means a sinking fund established by the Borrower on
terms acceptable to the Lenders, acting reasonably, for the exclusive
purpose of reserving funds for the repayment of Senior Long-Term Debt.
The Lenders may require terms concerning what investments can be made
with the amount of such fund, and the identity of the independent
trustee of such fund.
"SPOT RATE OF EXCHANGE" means, in the case of Canadian Dollars and U.S.
Dollars, for any relevant date, the Bank of Canada's noon spot rate of
exchange for such date for purchasing such currency with the other
currency.
"STAMPING FEE" means the "BA Stamping Fee Rate" multiplied by the face
amount of a BA Loan, multiplied by the number of days to its maturity
(including the day of acceptance or issuance but excluding the day of
maturity) and divided by 365, or 366 days in the case of a leap year.
"SUBORDINATED DEBT" means Debt that either, according to its terms, or
according to an agreement between the holder of such Debt and the Agent
(such agreement
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to be on terms acceptable to the Agent, acting reasonably), is
subordinated to the prior payment in full of all indebtedness and
liability of the Borrower and each Material Subsidiary under the Note
Indenture or the Loan Documents.
"SUB-PARTICIPANT" has the meaning given by Section 22.3(b).
"SUB-PARTICIPATION" has the meaning given by Section 22.3(b).
"SUBSIDIARY" means:
(a) any corporation organized under the laws of any state of the
United States of America, Canada or any province of Canada of
which at least 50% of the total combined voting power of all
classes of Voting Shares shall, at the time as of which any
determination is being made, be owned by the Borrower either
directly or through Subsidiaries; or
(b) any Person (other than a corporation) in which the Borrower,
either directly or through Subsidiaries, has at least a
majority ownership and power to direct the policies,
management and affairs of such Person.
"SUCCESSOR CORPORATION" has the meaning given by Section 17.7(a).
"SUSPENSION NOTICE" has the meaning given by Section 11.1.
"SWINGLINE EXPOSURE" means, at any time, the aggregate principal amount
(including the undrawn amount of any Letter of Credit issued by the
Swingline Lender) of all Swingline Loans outstanding at such time. The
Swingline Exposure of any Lender at any time is its Percentage Loan
Commitment for the Revolving Facility of the total Swingline Exposure
at such time.
"SWINGLINE LENDER" means, initially, HSBC Bank Canada and, otherwise,
the Lender from time to time designated by the Borrower as the lender
of Swingline Loans, provided that the Agent has been notified of such
designation.
"SWINGLINE LOAN" means:
(a) a loan made available to the Borrower by the Swingline Lender
by way of direct advances in Canadian Dollars or U.S. Dollars
pursuant to Section 2.7 and on which interest is based on the
Prime Rate or the U.S. Base Rate, as the case may be;
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(b) LC Exposure for Letters of Credit issued by the Swingline
Lender pursuant to Section 2.7.6; and
(c) the maximum credit (the "MAXIMUM SUPPLEMENTARY LIMIT") made
available to an Obligant by the Swingline Lender for any
corporate credit card.
"TAXES" means all present and future taxes, levies, imposts,
deductions, charges, and withholdings whatsoever together with interest
thereon and penalties with respect thereto, if any, and any payments
made on or in respect thereof, including, without limitation and
notwithstanding the remaining part of this definition, taxes and
withholdings levied or imposed or due pursuant to Part XIII of the
INCOME TAX ACT (Canada), but shall not include franchise taxes, branch
profits taxes and taxes imposed on or measured by a Lender's income or
receipts or minimum tax in lieu thereof, taxes imposed on or measured
by a Lender's capital, federal large corporations tax levied or
assessed against a Lender or other taxes of general application levied
or assessed against a Lender and interest thereon and penalties with
respect thereto.
"30-DAY BA RATE" means, on any day, the annual rate of interest which
is determined as being the "BA 1 month" rate applicable to Canadian
Dollar banker's acceptances of the Agent displayed and identified as
such on the "Reuters Screen CDOR Page" (as defined in the International
Swap Dealers Association, Inc. definitions, as modified or amended from
time to time) 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 (as adjusted by the Agent after 10:00 a.m. to reflect any error in
a posted rate of interest); provided that, if such rate does not appear
on the "Reuters Screen CDOR Page" as contemplated, then the 30-Day BA
Rate shall be calculated as the 30-day discount rate for Canadian
Dollar banker's acceptances quoted by the Agent from time to time as of
10:00 a.m. on such day or the immediately preceding Business Day.
"TOTAL CAPITALIZATION" means, as at the date of determination, the sum
of Total Debt and Equity.
"TOTAL DEBT" means, as at the date of determination:
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(a) for the purposes of the Debt/EBITDA Ratio:
(i) that portion of Debt (taking into account FX
Gain/Loss) of the Borrower and all Subsidiaries on a
consolidated basis as shown on a balance sheet (and
not notes thereto) as an obligation for borrowed
money and the capitalized amount of all obligations
under Capital Leases (including those resulting from
Sale and Leaseback Transactions);
less:
(ii) the amount of cash or cash equivalents held by the
trustee under the Sinking Fund, or by the U.S.
Trustee under the Note Indenture, adjusted, as
appropriate, for unrealized foreign exchange gains or
losses; and
(b) for all other purposes, the total Debt of the Borrower and
Subsidiaries on a consolidated basis.
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the LIBOR Rate, Prime
Rate or the U.S. Base Rate or whether the Loan is by way of a BA Loan
or a Letter of Credit.
"U.S. BASE RATE" means, for any day, the floating annual rate of
interest equal to the greater of:
(a) the annual rate of interest so designated from time to time by
the Agent as its base rate for loans in U.S. Dollars to
borrowers in Canada; and
(b) the Federal Funds Rate plus 1.00%.
"U.S. DOLLARS" and "U.S.$" means the lawful currency for the time being
of the United States of America.
"U.S. DOLLAR LOAN" means a Loan made available to the Borrower by the
Lenders or the Swingline Lender by way of direct advances in U.S.
Dollars on which the Borrower has elected, pursuant to the provisions
of this Agreement, to pay interest based on the U.S. Base Rate.
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"U.S. TRUSTEE" means Xxxxx Fargo Bank, National Association.
"VOTING SHARES", when used with respect to any Subsidiary, means any
shares or interest of such Subsidiary having general voting power under
ordinary circumstances to elect the board of directors or other
governing body of such Subsidiary (irrespective of whether or not at
the time shares or interest of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).
1.2 CONSTRUCTION
(a) Unless the context otherwise requires, words importing the
singular include the plural and vice versa and words importing
any gender include every gender. The words "include",
"includes" and "including" shall be deemed to be followed by
the phrase ", without limitation,". The word "will" shall be
construed to have the same meaning and effect as the word
"shall".
(b) The headings of the sections of this Agreement have been
inserted for reference only and do not define, limit, alter or
enlarge the meaning of any provision of this Agreement.
(c) References to the Lenders, Hedging Lenders and the Agent
shall, where relevant and unless otherwise specified, be
deemed to be references to or to include, as appropriate, each
and every one of their respective successors and assigns.
(d) Unless otherwise specified, all references to Sections or
Schedules are to Sections and Schedules of or to this
Agreement and such Sections and Schedules shall form part of
this Agreement.
(e) References herein to any agreement (including this Agreement)
or document shall (without prejudice to paragraph (f) below
and to any other express restriction contained herein relating
thereto) be deemed to include references to such agreement or
document as amended, changed, varied, supplemented, replaced
or restated from time to time.
(f) Where a term is defined in this Agreement by reference to any
other document, such term shall, unless the Lenders otherwise
agree in writing, continue to have the meaning ascribed
thereto in such other document as at the date hereof
notwithstanding the fact that such other document may be
amended, changed,
34
varied, supplemented, replaced or restated or may cease to be
in force at any time after the date hereof.
(g) Unless otherwise specified, all dollar amounts referred to in
this Agreement are in Canadian Dollars. In this Agreement a
reference to a minimum amount or an integral multiple of an
amount in connection with a Borrowing, a prepayment or a
cancellation is a reference to such amount or multiple in
Canadian Dollars or U.S. Dollars, or both.
(h) Notwithstanding any other provision of this Agreement, unless
otherwise specified, all accounting expressions, whether or
not specifically defined in this Agreement, shall be construed
and determined in accordance with GAAP in effect from time to
time and shall be calculated on a consolidated basis,
consistently applied.
(i) Unless otherwise specified, whenever anything is to be done or
to occur under this Agreement on a day which is not a Business
Day, the date such thing is to be done or to occur shall be
extended to the next Business Day. During any extension of the
due date for payment of any Loan, interest shall be payable on
such Loan at the applicable rate.
(j) All times referred to in this Agreement and the Schedules are
Xxxxxxx, Xxxxxxx times unless otherwise specifically stated.
(k) Any change in the Prime Rate or the U.S. Base Rate due to a
change in the Agent's prime rate or base rate or a change in
the 30-Day BA Rate or the Federal Funds Rate shall be
effective from and including the effective date of such change
whether or not the Borrower has notice thereof.
(l) For the purposes of this Agreement, Loans and Borrowings may
be classified and referred to by Class (e.g., a "Revolving
Facility Loan/Borrowing") or by Type (e.g., a "LIBOR
Loan/Borrowing") or by Class and Type (e.g., a "Revolving
Facility LIBOR Loan/Borrowing).
2.0 LOANS
2.1 MAXIMUM AMOUNT OF LOANS
Except as expressly set out in this Agreement, at no time shall the
maximum amount of the Revolving Facility Loans available hereunder exceed the
Revolving Facility Maximum Amount.
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2.2 COMMITMENT TO ADVANCE
2.2.1 Subject to the provisions of this Agreement, up to and including the
last day of the Revolving Facility Availability Period, the Borrower may Borrow,
and each Lender severally agrees to make Loans, up to its Percentage Loan
Commitment for the Revolving Facility and in total for all Lenders up to the
Revolving Facility Maximum Amount.
2.2.2 The commitments of the Lenders are several and all Borrowings shall be
made on the basis of the Percentage Loan Commitment for the Revolving Facility
of each Lender. Failure by any Lender to make available its portion of a Loan
does not relieve any other Lender of its obligations under this Agreement, but
no Lender has any responsibility or liability for the failure by another Lender
to fulfil its obligations under this Agreement.
2.3 CANCELLATION
2.3.1 At any time during the Revolving Facility Availability Period, the
Borrower may, on not less than five Business Days' prior written notice to the
Agent, cancel the undrawn portion of the Revolving Facility in whole or in part,
but, if in part, in a minimum of $5 million and in integral multiples of $1
million.
2.3.2 Any notice by the Borrower hereunder of cancellation of the undrawn
portion of the Revolving Facility or any part thereof shall be irrevocable and
cannot be withdrawn by the Borrower.
2.4 CONVERSION/ROLLOVER
Subject to the provisions of this Agreement, up to and including the
Business Day immediately prior to the Revolving Facility Maturity Date, the
Borrower may convert or rollover Loans in a particular Class from Loans
available in one Type to Loans available in the same or another Type in that
Class.
2.5 PURPOSE OF BORROWING
Loans are available for the general corporate purposes of the Borrower.
After the first Borrowing thereunder, a Borrowing (other than a Borrowing
resulting from a Swingline Loan or the issuance of a Letter of Credit) under the
Revolving Facility shall first be used to repay any outstanding Swingline Loans
or LC Disbursements. The Borrower shall not, without the prior written consent
of the Agent, be entitled to Borrow if the proceeds of any Borrowing are to be
used, directly or indirectly, to acquire all or a portion of the property,
assets or
36
undertaking of a Person or all or a portion of the shares of a Person if such
Person is opposed to such acquisition or if the transaction becomes known as a
"hostile" or "unfriendly" acquisition.
2.6 CLASSES AND TYPES OF LOANS AND BORROWINGS
Each Loan (other than a Swingline Loan) shall be made as part of a
Borrowing consisting of Loans of the same Class and Type made by the Lenders
rateably in accordance with their Percentage Loan Commitment.
2.7 SWINGLINE LOANS
2.7.1 Subject to the terms and conditions set forth herein, the Swingline
Lender agrees to make Swingline Loans to the Borrower from time to time during
the Revolving Facility Availability Period, in an aggregate principal amount at
any time outstanding that will not result in:
(a) the aggregate principal amount of outstanding Swingline Loans
(including the undrawn amount of any Letter of Credit issued
by the Swingline Lender) exceeding $10 million; or
(b) the total Revolving Facility Exposures exceeding the total
Revolving Facility Commitments; or
(c) the total Revolving Facility Exposure of the Swingline Lender
exceeding the total Revolving Facility Commitment of the
Swingline Lender.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and re-borrow Swingline Loans under the
Revolving Facility. The Maximum Supplementary Limit shall be deemed to be fully
advanced at all times. The Borrower hereby confirms all of its obligations in
respect of the Maximum Supplementary Limit as described in the documents listed
in Section II.C. of Schedule C.
2.7.2 The procedures for making and repaying Swingline Loans will be arranged
between the Borrower and the Swingline Lender. In any event, the Swingline
Lender will advise the Agent by noon each Business Day of the amount of
Swingline Loans outstanding at the close of business on the previous Business
Day and will provide on the first Business Day of each month a written record of
the daily outstanding amount of Swingline Loans for the previous month.
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2.7.3 The Swingline Lender may, by written notice given to the Agent not
later than noon on any Business Day, require the Lenders to acquire
participations, based on their Percentage Loan Commitments, on such Business Day
in all of the Swingline Loans outstanding or in a portion thereof which is a
multiple of $1 million. Such notice shall specify the aggregate amount of
Swingline Loans in which Lenders will participate. Promptly upon receipt of such
notice, the Agent will give notice thereof to each Lender, specifying in such
notice such Lender's percentage of such Swingline Loan or Loans. Each Lender
hereby absolutely and unconditionally agrees, upon receipt of notice as provided
above, to pay to the Agent, for the account of the Swingline Lender, such
Lender's Percentage Loan Commitment of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this section is absolute and unconditional, shall
not be affected by any circumstance whatsoever, including the occurrence and
continuance of a Potential Default, Event of Default or reduction or termination
of the Revolving Facility Commitment, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. Each Lender
shall comply with its obligation under this section by wire transfer of Same Day
Funds, in the same manner as provided in Section 12.3 with respect to Loans made
by such Lender (and Section 12.3 shall apply, MUTATIS MUTANDIS, to the payment
obligations of the Lenders), and the Agent shall promptly pay to the Swingline
Lender the amounts so received by it from the Lenders. The Agent shall notify
the Borrower of any participations in any Swingline Loan acquired pursuant to
this section, and thereafter payments in respect of such Swingline Loan shall be
made to the Agent and not to the Swingline Lender. Any amounts received by the
Swingline Lender from the Borrower (or other party on behalf of the Borrower) in
respect of a Swingline Loan after receipt by the Swingline Lender of the
proceeds of a sale of participations therein shall be promptly remitted to the
Agent; any such amounts received by the Agent shall be promptly remitted by the
Agent to the Lenders that shall have made their payments pursuant to this
section and to the Swingline Lender, as their interests may appear. The purchase
of participations in a Swingline Loan pursuant to this section shall not relieve
the Borrower of any default in the payment thereof.
2.7.4 If at any time outstanding Swingline Loans, excluding the Maximum
Supplementary Limit, exceed $6 million for three consecutive Business Days, the
Swingline Lender will be deemed to have given notice pursuant to Section 2.7.3
to require the other Lenders to acquire participations in $4 million of the
Swingline Loans in the manner provided in Section 2.7.3.
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2.7.5 The Swingline Lender may be replaced at any time by written agreement
among the Borrower, the Agent, the replaced Swingline Lender and the successor
Swingline Lender. The Agent shall notify the Lenders of any such replacement of
the Swingline Lender and of the initial Swingline Lender. At the time any such
replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced Swingline Lender. From and after the
effective date of any such replacement:
(a) the successor Swingline Lender shall have all the rights and
obligations of the replaced Swingline Lender under this
Agreement with respect to all outstanding Swingline Loans and
those made thereafter; and
(b) references herein to the term "Swingline Lender" shall be
deemed to refer to such successor or to any previous Swingline
Lender, or to such successor and all previous Swingline
Lenders, as the context shall require.
After the replacement of a Swingline Lender hereunder, the replaced Swingline
Lender may remain a party hereto, but shall not be required to make new
Swingline Loans except as a participating Lender pursuant to Section 2.7.3.
2.7.6 Any Letter of Credit having a face amount of $50,000 or less may be
issued by the Swingline Lender as a Swingline Loan. All Letters of Credit having
a face amount in excess of $50,000 shall be issued by the Issuing Bank pursuant
to Section 2.8. The outstanding Letters of Credit described in Schedule C issued
by HSBC Bank Canada, including any extensions of the expiry date provided for in
such Letters of Credit, shall be deemed to be Letters of Credit issued by the
Swingline Lender, regardless of the amount, as a Swingline Loan. The Borrower
hereby assumes all obligations of Lignum and RFP Power Ltd. relating to or
arising out of those Letters of Credit described in Schedule C, and any
extensions of the maturity dates thereof, issued on behalf of Lignum or RFP
Power Ltd. Except as set out above, the provisions of Section 2.8 shall apply
MUTATIS MUTANDIS to Letters of Credit issued by the Swingline Lender.
2.7.7 If there is any conflict between the provisions of this Agreement and
those of any other document relating to the Swingline Loans, then the provisions
of this Agreement shall prevail.
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2.8 LETTERS OF CREDIT
2.8.1 GENERAL
Subject to the terms and conditions set forth in this Agreement, the
Borrower may request the issuance of Letters of Credit under the Revolving
Facility for its own account, in a form reasonably acceptable to the Issuing
Bank, at any time and from time to time during the Revolving Facility
Availability Period. Except in connection with a Permitted Business, and then up
to an undrawn amount at any time of $2 million, Letters of Credit shall not be
used for the purpose of guaranteeing the obligations of any Person. In the event
of any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with,
the Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall prevail. Such terms and conditions of any such application
shall not, in any event, contain any operating covenants or restrictions,
provide for any collateral not provided under the Loan Documents or provide for
the imposition of fees (other than customary charges). The undrawn amount of
Letters of Credit shall at no time exceed $10 million.
2.8.2 NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION, CERTAIN CONDITIONS
To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank, with a copy to the Agent, (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with Section 2.8.3), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension, the total Revolving Facility Exposures does not exceed the total
Revolving Facility Commitments.
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2.8.3 EXPIRATION DATE
Each Letter of Credit shall expire at or prior to the close of business
on the earlier of:
(a) the date one year after the date of the issuance of such
Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension); and
(b) the Revolving Facility Maturity Date.
2.8.4 PARTICIPATIONS
By the issuance of a Letter of Credit (or an amendment to a Letter of
Credit increasing the amount thereof) and without any further action on the part
of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each
Lender, and each Lender hereby acquires from the Issuing Bank, a participation
in such Letter of Credit equal to such Lender's Percentage Loan Commitment of
the aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Agent, for the account of the Issuing
Bank, such Lender's Percentage Loan Commitment of each LC Disbursement made by
the Issuing Bank and not reimbursed by the Borrower on the date due as provided
in Section 2.8.5, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this section in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Potential Default, Event
of Default or reduction or termination of the Revolving Facility Commitment, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
2.8.5 REIMBURSEMENT
If the Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to
the Agent an amount equal to such LC Disbursement not later than 2:00 p.m. on:
(a) the date that the Borrower shall have received notice of such
LC Disbursement, if such notice is received prior to noon on
such date; or
41
(b) the Business Day immediately following the day that the
Borrower receives such notice, in all other cases,
provided that the Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 3.1 that such payment be financed
with the proceeds of a Loan under the Revolving Facility or a request in
accordance with Section 2.7 that such payment be financed with the proceeds of a
Swingline Loan in an equivalent amount and to the extent so financed, the
Borrower's obligation to make such payment shall be discharged and replaced by
the resulting Borrowing. If the Borrower fails to make such payment when due,
the Issuing Bank shall notify the Agent, which in turn shall notify each Lender,
of the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof and such Lender's Percentage Loan Commitment thereof. Promptly
following receipt of such notice, each Lender shall pay to the Agent its
Percentage Loan Commitment of the payment then due from the Borrower, in the
same manner as provided in Section 12.3 with respect to Loans made by such
Lender (and Section 12.3 shall apply, MUTATIS MUTANDIS, to the payment
obligations of the Lenders), and the Agent shall promptly pay the Issuing Bank
the amounts so received by it from the Lenders. Promptly following receipt by
the Agent of any payment from the Borrower pursuant to this section, the Agent
shall distribute such payment to the Issuing Bank or, to the extent that Lenders
have made payments pursuant to this section to reimburse the Issuing Bank, then
to such Lenders and the Issuing Bank as their interests may appear. Any payment
made by a Lender pursuant to this section to reimburse the Issuing Bank for any
LC Disbursement (other than the funding of Borrowings or a Swingline Loan as
contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.
2.8.6 OBLIGATIONS ABSOLUTE
The Borrower's obligation to reimburse LC Disbursements as provided in
Section 2.8.5 shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever and irrespective of:
(a) any lack of validity or enforceability of any Letter of Credit
or this Agreement, or any term or provision therein or herein;
(b) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any
respect;
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(c) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; or
(d) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the
provisions of this section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the
Borrower's obligations hereunder.
None of the Agent, the Lenders and the Issuing Bank shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that the foregoing shall
not be construed to excuse the Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or wilful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised care
in each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.
2.8.7 DISBURSEMENT PROCEDURES
The Issuing Bank shall, promptly following its receipt thereof, examine
all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether the
Issuing Bank has made or will make an
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LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.
2.8.8 INTERIM INTEREST
If the Issuing Bank shall make any LC Disbursement, then, unless the
Borrower shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that the Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to Canadian Dollar Loans or US Dollar Loans depending upon
the currency of the LC Disbursement. If the Borrower fails to reimburse such LC
Disbursement when due pursuant to Section 2.8.5, then Section 8.7 shall apply.
Interest accrued pursuant to this section shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Lender pursuant to Section 2.8.5 to reimburse the Issuing Bank shall be for
the account of such Lender to the extent of such payment.
2.8.9 REPLACEMENT OF THE ISSUING BANK
The Issuing Bank may be replaced at any time by written agreement among
the Borrower, the Agent, the replaced Issuing Bank and the successor Issuing
Bank. The Agent shall notify the Lenders of any such replacement of the Issuing
Bank. At the time any such replacement shall become effective, the Borrower
shall pay all unpaid fees accrued for the account of the replaced Issuing Bank.
From and after the effective date of any such replacement:
(a) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with
respect to Letters of Credit to be issued thereafter; and
(b) references herein to the term "ISSUING BANK" shall be deemed
to refer to such successor or to any previous Issuing Bank, or
to such successor and all previous Issuing Banks, as the
context shall require.
After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank
shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit or to extend any existing Letters of Credit
issued by it hereunder.
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2.8.10 LETTER OF CREDIT FEES
As a condition to issuance, the Borrower shall pay to the Agent for the
benefit of the Lenders, or directly to the Swingline Lender in the case of a
Letter of Credit issued and outstanding as a Swingline Loan, in respect of each
Letter of Credit at the time of issue thereof and thereafter quarterly in
advance on the first day of each calendar quarter and on the date of renewal
thereof, a fee (the "LETTER OF CREDIT FEE"), in the currency of the Letter of
Credit, equal to the maximum amount that the Issuing Bank or the Swingline
Lender, as the case may be, may be called upon to disburse under such Letter of
Credit multiplied by the applicable Letter of Credit Fee Rate and by a fraction
the numerator of which is the number of days remaining to the end of the then
current calendar quarter, or to the maturity date of such Letter of Credit, as
the case may be, and the denominator of which is 365 (or 366 in a leap year).
Except with respect to Letters of Credit issued and outstanding as Swingline
Loans, the Borrower shall also pay to the Agent, for the benefit of the Issuing
Bank, the Fronting Fee calculated on the same basis and payable at the same time
as the Letter of Credit Fee. In addition, the Borrower will pay to the Issuing
Bank, forthwith upon receipt of the Issuing Bank's invoice therefor, the Issuing
Bank's standard and prevailing administrative and other charges for amending,
advising, transferring or drawing under any Letter of Credit.
2.9 HEDGING PROGRAM
2.9.1 GENERAL
The Borrower may enter into a Hedging Program with a Hedging Lender for
the purpose of entering into Hedging Program Contracts. The terms and conditions
of such Program shall be determined from time to time by the Borrower and such
Hedging Lender, provided that the provisions of this Agreement concerning a
Hedging Program shall govern any such Hedging Program and, if the terms and
conditions of any such Hedging Program, or of any agreements entered into in
respect thereof, conflict with the provisions of this Agreement, then the
provisions of this Agreement shall prevail.
2.9.2 XXXX TO MARKET
As part of a Hedging Program, the Borrower and each Hedging Lender
shall establish a practice whereby the net amount that would be due by the
Borrower under all Hedging Program Contracts with such Hedging Lender is
calculated as at the end of each quarter, "marked to market" in accordance with
the market practice in effect at such time.
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2.9.3 NO OBLIGATION
Notwithstanding that the Hedging Lenders are parties to this Agreement
and notwithstanding the references in this Agreement to them and to Hedging
Programs and Hedging Program Contracts, neither Bank of Montreal nor HSBC Bank
Canada is under any obligation to establish a Hedging Program or enter into any
Hedging Program Contract with the Borrower. Until a Hedging Program is
established and a Hedging Program Contract entered into, this Agreement shall be
read and construed as if there were no references to a Hedging Program or
Hedging Program Contract and no consent, agreement or waiver of any kind shall
be requested of, or required from, a Hedging Lender.
3.0 BORROWING
3.1 DRAW REQUEST
(a) Subject to Sections 2.7.2 and 2.8, whenever it is desired to
Borrow hereunder the Borrower shall, subject to the terms
hereof, give a Draw Request to the Agent specifying, among
other things, in respect of the proposed Borrowing:
(i) the date of the Borrowing (such date must be a
Business Day), the Class and Type of Loan or Loans;
(ii) the amount of the Borrowing;
(iii) in the case of a Borrowing by way of a LIBOR Loan,
the maturity date of the LIBOR Interest Period for
such Borrowing or in the case of a Borrowing by way
of a BA Loan, the maturity date of the Bankers
Acceptances;
(iv) the account or accounts and the financial institution
or institutions to which the proceeds of such
Borrowing are to be credited; and
(v) in the case of a Borrowing by way of a Letter of
Credit, the information required by Section 2.8.2.
(b) Subject to the terms of this Agreement, including, without
limitation, Section 11.2(a), each such Draw Request shall be
irrevocable and the Borrower shall be bound to Borrow in
accordance with such Draw Request unless the Lenders in their
absolute discretion agree otherwise.
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3.2 BORROWING PROCEDURES
Subject to Sections 2.7.2 and 2.8, the procedures for any Borrowing are
set out in Schedule A, the provisions of which are deemed to be incorporated
herein and to form part hereof.
3.3 FAILURE TO BORROW
If for any reason (other than default by a Lender or the issuance of a
Suspension Notice), including the failure to satisfy the conditions set out in
Section 4.0, any Loan is not Borrowed by the Borrower hereunder after a Draw
Request for such Borrowing has been given pursuant to Sections 2.7.2, 2.8 or 3.1
and the Lenders have not agreed under Section 3.1 that the Borrowing will not
occur:
(a) the Borrower will pay to each Lender any unwinding or
termination costs incurred by it and resulting from such
failure;
(b) a Lender shall provide the Agent and the Borrower with such
evidence of such costs as may be reasonably required; and
(c) the Borrower shall pay any amount required under this Section
3.3 within 30 days of receipt by the Borrower of a demand for
payment by the Agent and such evidence.
3.4 EVIDENCE OF BORROWING
The Agent shall maintain at its main branch in Toronto, Ontario, and
the Swingline Lender shall maintain at its main branch, books and records (in
each case electronic or otherwise as the Agent or the Swingline Lender, as the
case may be, may determine) of the date and amount of any Borrowings (including,
in the case of the Agent, only the monthly amount of Swingline Loans to the
extent such information is provided by the Swingline Lender), of all LIBOR
Interest Periods, of all BA Loans and Letters of Credit issued and cancelled and
of any payments of principal and interest and all other amounts from time to
time due or owing under this Agreement. Such books and records constitute PRIMA
FACIE evidence of the foregoing and all indebtedness of the Borrower under this
Agreement.
3.5 BORROWINGS NOT TO EXCEED BORROWING BASE
(a) If at any time the Loans outstanding under the Revolving
Facility exceed the Borrowing Base, the Borrower shall
immediately prepay Loans, to the extent
47
required, so that the outstanding Loans owed by the Borrower
will not exceed the Borrowing Base.
(b) If, on any five consecutive Business Days as a result of
exchange fluctuations, the amount of Loans then outstanding
for the Revolving Facility, including the face amount of BA
Loans then issued but not matured, the undrawn amount of
Letters of Credit and LC Disbursements, calculated using the
average Spot Rate of Exchange for such days for any amount in
U.S. Dollars, exceeds the Revolving Facility Maximum Amount by
an amount greater than $1 million, the Borrower shall, at the
request of the Agent:
(i) within five Business Days of such request, repay any
Canadian Dollar Loans or U.S. Dollar Loans to the
extent of the excess; and
(ii) to the extent that any amount paid under paragraph
(i) above is insufficient to fully reduce the excess,
or if there are no Canadian Dollar Loans or U.S.
Dollar Loans outstanding, on the earlier of 90 days
from the date of such request and the expiry of the
necessary LIBOR Interest Periods or maturity of
sufficient Bankers Acceptances, repay Loans to the
extent of the balance of the excess.
(c) Any payment made pursuant to paragraph (b) shall not be or be
construed as being, to the extent of the payment of any such
excess, a prepayment or repayment and, notwithstanding Section
2.2, the Borrower shall be able to re-Borrow the amount of any
excess so paid provided that the Revolving Facility Maximum
Amount is not exceeded. If there are more than 15 days until
such repayment, the Borrower shall pledge cash collateral, in
the amount of the excess, to the Agent for the benefit of the
Lenders.
4.0 CONDITIONS PRECEDENT
4.1 GENERAL CONDITIONS
(a) The obligations of the Lenders hereunder are subject to the
conditions set out in this Agreement, including the conditions
precedent set out in each of the remaining sections of this
Section 4.0, but the Lenders may in writing waive any one or
more of all such conditions for any Borrowing.
(b) On the date of execution and delivery of this Agreement the
Agent shall have received the balance of the upfront fee, a
duly executed Guarantee from each
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Material Subsidiary, the Security and all of the following in
form and substance satisfactory to it:
(i) a copy of the constating documents of the Borrower
and each such Material Subsidiary;
(ii) a certified copy of resolutions of the Board of
Directors of the Borrower and each such Material
Subsidiary concerning authority to enter into and to
execute the Loan Documents to which each is a party
and all documents contemplated thereby;
(iii) an Officer's Certificate to the effect that no Event
of Default or Potential Default has occurred; and
(iv) all other documents, agreements and information as
the Agent may reasonably require, including, without
limitation, evidence of insurance required pursuant
to Section 17.3.
4.2 CONDITIONS FOR BORROWING
(a) The obligation of the Lenders to permit the first Borrowing
under the Revolving Facility is subject to the following
additional conditions that, on the date thereof:
(i) no Event of Default or Potential Default shall have
occurred and be continuing;
(ii) the Agent shall have received a Draw Request and an
Officer's Certificate (including in such Certificate
a statement that the representations and warranties
set out in Section 16.1 are true and correct as of
the date thereof);
(iii) the Lenders shall have received projected financial
statements of the Borrower and its Subsidiaries for
the three-year period 2004-2007 and shall be
satisfied with such projected statements;
(iv) all fees then due to the Agent and the Lenders shall
have been paid and the Agent and the Lenders shall
have been reimbursed for all expenses incurred and
invoiced by them to that date;
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(v) no event or circumstance shall have occurred since
September 30, 2003 which would result in a Material
Adverse Effect;
(vi) the Agent shall have received, in form and substance
satisfactory to it, acting reasonably, a legal
opinion from Bull, Housser & Xxxxxx, counsel to the
Borrower, and a legal opinion from Fraser Xxxxxx
Casgrain LLP, counsel to the Lenders and the Agent;
(vii) all bank credit facilities of the Borrower and its
Material Subsidiaries, other than as described in
Schedule C, and the Series B-D Notes shall have been
repaid and cancelled, or arrangements for repayment
and cancellation satisfactory to the Agent shall have
been made;
(viii) all steps, proceedings and registrations reasonably
required by counsel for the Agent in connection with
the Loan Documents shall have been satisfactorily
completed;
(ix) the Agent shall have received, in form and substance
satisfactory to it, all agreements that it requires
from any landlord of the Borrower and of any Material
Subsidiary;
(x) the Agent shall have received all other documents and
agreements as the Agent may reasonably require.
(b) The obligations of the Lenders to permit subsequent Borrowings
are subject to the following additional conditions that, on
the date thereof:
(i) no Event of Default or Potential Default shall have
occurred and be continuing;
(ii) the representations and warranties set out in Section
16.1 (and Section 16.1(d) shall be read as if it
referred to the most recent Financial Statements
delivered to the Agent pursuant to Sections 17.4(a)
and (b)) are true and correct; and
(iii) the aggregate of the amounts outstanding of all Loans
and the amount of the requested Borrowing (including
in each case, Loans outstanding and requested as
Swingline Loans, BA Loans and as Letters of Credit)
shall not exceed the Revolving Facility Maximum
Amount.
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5.0 REPAYMENT
5.1 REPAYMENT
On the Revolving Facility Maturity Date the Borrower shall repay all
outstanding Revolving Facility Loans and all other amounts outstanding under
this Agreement.
5.2 ALLOCATION OF REPAYMENT
Subject to Section 5.3(b), the Borrower may allocate any repayment
among the Loans outstanding for the Revolving Facility. If the Borrower fails to
do so, the Agent may make the allocation.
5.3 CURRENCY
(a) All repayments or prepayments of a Loan under this Agreement
shall be made in the currency in which such Loan is
denominated on the due date. If the Borrower is prohibited by
law from making any payment under this Agreement required to
be made in U.S. Dollars then the Borrower shall pay to the
Lenders the Canadian Dollar equivalent, calculated using the
Spot Rate of Exchange on the date payment is required to be
made, of such payment.
(b) The amount of any repayment or prepayment in one currency
shall be applied to Loans outstanding in that currency and any
excess shall be converted, at the Spot Rate of Exchange on the
date of payment, to the other currency and applied to Loans
outstanding under the other currency.
(c) The Borrower waives any right it may have in any jurisdiction
to pay any amount under this Agreement in a currency other
than that in which it is expressed to be payable hereunder.
6.0 PREPAYMENTS
6.1 VOLUNTARY PREPAYMENTS
As provided for by Section 2.2, the Revolving Facility is a revolving
credit facility. The Revolving Facility shall be permanently reduced by any
repayment only if such repayment is accompanied by written notice from the
Borrower that this is to be the case. Except in respect of BA Loans and Letters
of Credit, the Borrower may cancel the Revolving Facility at any time upon five
Business Days' written notice to the Agent and upon payment of all amounts owing
by the Borrower under the Loan Documents. The Borrower may only cancel BA Loans
and LC Exposure if it makes the payment described in Section 18.2.3. That
section shall apply MUTATIS MUTANDIS to this section.
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6.2 IRREVOCABILITY
Any notice of prepayment given by the Borrower pursuant to Section 6.1
shall be irrevocable and the Borrower shall be bound to prepay and the Revolving
Facility shall be reduced, as the case may be, in accordance with such notice
unless all of the Lenders in their absolute discretion agree otherwise.
6.3 BREAKAGE COSTS
(a) If any repayment or prepayment of any LIBOR Loan is made
otherwise than on the last day of a LIBOR Interest Period
relative to such LIBOR Loan, the Borrower shall pay, on demand
by the Agent, such additional amount as may be necessary to
compensate any Lender for any loss (including loss of profit)
or expense on account of funds borrowed, contracted for or
utilized to fund the amount so repaid or prepaid and for
re-employing such amount.
(b) A Lender shall provide the Borrower and the Agent with such
evidence of the Lender's loss or expense as the Borrower may
reasonably require.
(c) The Borrower shall pay any amount required pursuant to this
Section 6.3 within 30 days of receipt by the Borrower of a
demand for payment by the Agent and such evidence.
(d) The obligations of the Borrower under this Section 6.3 apply
to any repayment or prepayment, including one resulting from a
Suspension Notice, a written notice from the Agent in respect
of the payment of a Compensating Amount or a notice under
Section 14.0 arising in connection with the prepayment of a
LIBOR Loan.
7.0 LIBOR LOAN INTEREST PERIODS
7.1 SELECTION
Each LIBOR Interest Period shall commence on the Borrowing of the LIBOR
Loan concerned or, in the case of a rollover, on the expiry of the preceding
LIBOR Interest Period relative thereto and shall, subject to the following
provisions of this Section 7.0, be of a duration selected by the Borrower in
accordance with Section 3.1 and Schedule A.
7.2 NO NOTICE
If the Borrower fails to give a Draw Request to select a LIBOR Interest
Period for an expiring LIBOR Loan or for a conversion of an expiring LIBOR Loan
into a U.S. Dollar
52
Loan, the amount of the LIBOR Loan with respect thereto shall be automatically
converted to a U.S. Dollar Loan on the expiry of the applicable LIBOR Interest
Period.
7.3 EXTENSIONS
Subject to Section 7.4, if any LIBOR Interest Period would end on a day
which is not a Business Day, such LIBOR Interest Period shall end on the next
Business Day unless such next Business Day is in another calendar month, in
which case such LIBOR Interest Period shall end on the next preceding Business
Day.
7.4 CALENDAR DAYS
If any LIBOR Interest Period commences on a Business Day in a calendar
month for which there is no corresponding day in the calendar month in which
that LIBOR Interest Period is to end, then it shall end on the last Business Day
in such calendar month.
7.5 OTHER ADJUSTMENTS
The Agent, after consultation with the Lenders, and the Borrower may
enter into such other arrangements as they may agree for the consolidation or
splitting of LIBOR Loans or the adjustment of LIBOR Interest Periods.
7.6 MATURITY DATE
Notwithstanding any provision of this Agreement, the Borrower shall not
request and the Lenders are not obliged to accept a LIBOR Interest Period that
extends beyond the Revolving Facility Maturity Date.
8.0 INTEREST
8.1 LIBOR RATES
The rate of interest applicable to each LIBOR Loan for each LIBOR
Interest Period relative thereto shall be the rate per annum determined to be
the aggregate of LIBOR for such LIBOR Interest Period plus the Applicable Margin
in effect for each LIBOR Loan on each day during that LIBOR Interest Period.
8.2 LIBOR DUE DATES
Save as otherwise provided in this Agreement, accrued interest in
relation to each LIBOR Loan for each LIBOR Interest Period relative thereto
shall be payable by the Borrower on the last day of that LIBOR Interest Period
and also, in the case of LIBOR Interest Periods of more than three months'
duration (otherwise than by reason of Section 7.3), at the end of the first
53
three months thereof and each succeeding three-month period. Interest applicable
to each LIBOR Loan shall accrue from day to day and shall be computed on the
basis of a year of 360 days and for the actual number of days elapsed.
8.3 CANADIAN DOLLAR RATES
The rate of interest applicable to each Canadian Dollar Loan shall be
the daily rate equivalent to the per annum rate determined to be the aggregate
of the Prime Rate plus the Applicable Margin in effect on each day during which
that Canadian Dollar Loan is outstanding.
8.4 U.S. DOLLAR RATES
The rate of interest applicable to each U.S. Dollar Loan shall be the
daily rate equivalent to the per annum rate determined to be the aggregate of
the U.S. Base Rate plus the Applicable Margin in effect on each day during which
that U.S. Dollar Loan is outstanding.
8.5 CANADIAN DOLLAR AND U.S. DOLLAR DUE DATES
Save as otherwise provided in this Agreement, accrued interest in
relation to each Canadian Dollar Loan and each U.S. Dollar Loan shall be
calculated for each day of each and every month on the principal amount of
Canadian Dollar Loans and U.S. Dollar Loans, as the case may be, remaining
unpaid from time to time and on the basis of the actual number of days elapsed
during that month divided by 365 (or 366 in a leap year) and aggregated for that
month. Such interest shall be payable by the Borrower on the first Business Day
of the next month.
8.6 DETERMINING APPLICABLE MARGIN
8.6.1 The Applicable Margin shall be determined from time to time based on
the most recently delivered Officer's Certificate, except as set out in this
Section
8.6.2 If the Borrower delivers an Officer's Certificate in respect of a
fiscal quarter, any change in the Applicable Margin shall be effective from the
46th day following the end of such fiscal quarter.
8.6.3 If the Borrower fails to deliver an Officer's Certificate for any
fiscal quarter, the Agent may, at its option, determine the Applicable Margin
for such quarter based on information available to the Agent. In such event, any
change in the Applicable Margin shall be effective from the 46th day following
the end of such fiscal quarter.
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8.7 DEFAULT INTEREST
The Borrower agrees to pay on demand from time to time by the Agent
interest calculated for each day on the balance of overdue interest (whether in
Canadian Dollars or U.S. Dollars) outstanding and owing by it on each such day
for any Canadian Dollar Loans, U.S. Dollars Loan or LIBOR Loans, at daily rates
equivalent to the interest rates in effect from time to time for such Loans,
plus a further 2%, to be compounded monthly.
8.8 CURRENCY AND DEFAULT
Interest shall be payable in the currency in which the relevant amount
in respect of which it is payable is denominated. Interest is payable both
before and after maturity, demand, default and judgment.
8.9 CERTIFICATION
Each determination of a rate of interest by the Agent hereunder shall,
in the absence of manifest error, be conclusive and binding upon all parties
hereto and shall be promptly notified to the Borrower and the Lenders.
8.10 INTEREST ACT (CANADA)
(a) For the purpose of the INTEREST ACT (Canada), the yearly rate
of interest to which interest calculated on the basis of a
year of 360, 365 or 366 days, as the case may be, is
equivalent, is the rate of interest determined as herein
provided multiplied by the number of days in such year divided
by 360, 365 or 366, as the case may be.
(b) In this Agreement all interest shall be calculated using the
nominal rate method and not the effective rate method and the
"deemed re-investment principle" shall not apply to such
calculations.
9.0 CERTAIN COVENANTS CONCERNING BA LOANS
9.1 LENDERS' PURCHASE OF BANKERS ACCEPTANCES AND MAKING OF BA EQUIVALENT
LOANS
The Lenders shall, in accordance with their respective Percentage Loan
Commitments, purchase Bankers Acceptances issued by them under this Agreement or
make BA Equivalent Loans, as the case may be, at the face amount thereof
discounted at the applicable BA Rate in effect on the date of any Borrowing.
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9.2 OTHER COVENANTS CONCERNING BA LOANS The Borrower agrees that:
(a) on or before the maturity date of a BA Loan it will:
(i) provide the Agent with a Draw Request for either a
conversion or a rollover; or
(ii) provide the Agent with a notice to debit an account
with the Agent designated by the Borrower with the
amount required to pay any BA Loan on maturity and to
apply, to the extent necessary, the credit balance in
such account against the amount so debited;
whether or not a BA Loan may be held by a Lender in its own
right at its maturity;
(b) if the Borrower fails to deliver any of the notices specified
in Section 9.2(a) or if the credit balance in the account
designated pursuant to Section 9.2(a)(ii) is insufficient, the
amount of such BA Loan shall be automatically converted to a
Canadian Dollar Loan on the maturity date of such BA Loan;
(c) it shall not, and hereby waives any right to, claim from a
Lender any days of grace for the payment at maturity of any BA
Loan; and
(d) if at any time the Agent's interpretation of general market or
other conditions so requires, the Agent, at its discretion,
may give notice to the Borrower and, concurrently with or
after such notice, the Lenders may cease accepting Bankers
Acceptances or making BA Equivalent Loans or limit the
aggregate amount or term of Bankers Acceptances that they will
accept and BA Equivalent Loans that they will make for so long
as such conditions continue.
9.3 STAMPING FEE
On the date of presentment and acceptance of a Bankers Acceptance or
the making of a BA Equivalent Loan, the Stamping Fee will be deducted by each
Lender from the proceeds of a Bankers Acceptance or BA Equivalent Loan. If, at
the end of each quarter prior to the maturity date of a BA Loan, the Debt/EBITDA
Ratio is higher than that in effect on the date of presentment and acceptance of
a Bankers Acceptance or the making of a BA Equivalent Loan, and if such higher
ratio would attract a higher Stamping Fee in accordance with the definition of
"Applicable Margin", the Borrower will pay to the Agent, for the benefit of each
Lender, a
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further Stamping Fee for such BA Loan based on the difference between the
Stamping Fee in effect for such higher ratio at the end of such quarter and that
in effect on the date of presentment and acceptance or making, as the case may
be, multiplied by the face amount of such BA Loan and further multiplied by the
number of remaining days to its maturity divided by 365, or 366 in the case of a
leap year. The Borrower will pay such further Stamping Fee within five Business
Days of notification thereof by the Agent. If, at the end of each quarter prior
to the maturity date of a BA Loan, the Debt/EBITDA Ratio is lower than that in
effect on the date of presentment and acceptance of a Bankers Acceptance or the
making of a BA Equivalent Loan, and if such lower ratio would attract a lower
Stamping Fee in accordance with the definition of "Applicable Margin", each
Lender will pay to the Agent, which in turn shall forward such amounts to the
Borrower, an amount equal to its Percentage Loan Commitment of the difference
between the Stamping Fee in effect on the date of presentment and acceptance or
making, as the case may be, and the Stamping Fee in effect for such lower ratio
at the end of such quarter multiplied by the face amount of such BA Loan and
further multiplied by the number of remaining days to its maturity divided by
365, or 366 in the case of a leap year. The Lenders will pay such amount within
five Business Days of notification thereof by the Agent.
9.4 TERM AND PREPAYMENT
Notwithstanding any provision of this Agreement:
(a) the Borrower shall not request and the Lenders are not obliged
to make a BA Loan having a maturity date after the Revolving
Facility Maturity Date; and
(b) the Borrower shall not, without the prior consent of the
Lenders, be entitled to prepay the principal amount of any BA
Loan.
9.5 POWER OF ATTORNEY -- DEPOSITORY BILLS AND DEPOSITORY NOTES
(a) The Borrower hereby appoints each Lender, acting by its
authorized signing officers, for the time being, the attorney
of the Borrower:
(i) to sign for and on behalf and in the name of the
Borrower as drawer, drafts or notes in each Lender's
standard form which are Depository Bills or
Depository Notes payable to the "clearing house"
under the DBNA or its nominee, originally or by
endorsement, for deposit by each Lender with the
"clearing house" after acceptance thereof by each
Lender; and
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(ii) to fill in the amount, date and maturity date of such
Depository Bills and Depository Notes;
provided that such acts in each case are to be undertaken by a
Lender in accordance with instructions given to the Agent by
the Borrower as provided in this Agreement and by this Section
9.5.
(b) The Borrower agrees to indemnify each Lender and its
directors, officers, employees, affiliates and Agent and to
hold it and them harmless from and against any loss,
liability, expense or claim of any kind or nature whatsoever
incurred by any of them as a result of any action or inaction
in any way relating to or arising out of the power of attorney
created by this Section 9.5 or the acts contemplated hereby
including the deposit of any Depository Xxxx or Depository
Note with the "clearing house"; provided that this indemnity
shall not apply to any such loss, liability, expense or claim
which results from the gross negligence or willful misconduct
of a Lender or any of its directors, officers, employees,
affiliates or Agent or from a Lender or any of its directors,
officers, employees, affiliates or Agent failing to use the
same standard of care in the custody of such Depository Xxxx
or Depository Note as the Lender uses in the custody of its
own property of a similar nature.
(c) The power of attorney created by this Section 9.5 may not be
revoked by the Borrower at any time. The power of attorney
created by this Section 9.5 may be terminated by a Lender at
any time upon not less than five Business Days' written notice
to the Borrower (with a copy to the Agent).
(d) Any revocation or termination of the power of attorney created
by this Section 9.5 shall not affect the rights of a Lender
and the obligations of the Borrower with respect to the
indemnities of the Borrower above stated with respect to all
matters arising prior in time to any such revocation or
termination.
10.0 COMMITMENT FEE
10.1 The Borrower agrees to pay to the Lenders a commitment fee, calculated
for each day from and after the date of execution and delivery of this
Agreement, on the difference between the Revolving Facility Commitment and the
amount of Loans (including the face amount of BA Loans issued but not matured,
the undrawn amount of Letters of Credit and Swingline Loans) outstanding under
the Revolving Facility (for amounts in U.S. Dollars, calculated using the Spot
Rate of Exchange on the first Business Day of a month), on each day multiplied
by the per annum Commitment Fee Rate from time to time in effect, and aggregated
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for each month based on a year of 365 days (or 366 days as applicable) and the
number of days in the calculation period.
10.2 The commitment fee shall be paid on the first Business Day of each
month for the previous month or part thereof, as the case may be.
10.3 If pursuant to Section 14.0 no Loans of any Type are available to the
Borrower then, for the period that such is the case, no commitment fee shall be
payable.
10.4 Each determination by the Agent of the amount of the commitment fee due
from time to time shall, in the absence of manifest error, be conclusive and
binding upon all parties hereto.
10.5 The provisions of Section 8.6 concerning determining the Applicable
Margin shall apply MUTATIS MUTANDIS to the calculation of the commitment fee.
10.6 As between the Lenders, the Agent shall apportion the commitment fee
for any month according to the difference between each Lender's average
Revolving Facility Commitment during such month and each Lender's Revolving
Facility Exposure during such month, including the Swingline Exposure in the
Revolving Facility Exposure of the Swingline Lender.
11.0 SUBSTITUTE BASIS
11.1 MARKET DISTURBANCE
Notwithstanding anything to the contrary herein contained, if the
Agent, after consultation with the Lenders to the extent practicable, shall have
determined in good faith (which determination shall be conclusive and binding
upon the Borrower provided that it was made in good faith) that:
(a) by reason of circumstances affecting the London interbank
eurocurrency market adequate and fair means do not exist for
ascertaining the rate of interest applicable to a LIBOR Loan
during the LIBOR Interest Period applicable thereto; or
(b) deposits in U.S. Dollars of equal duration to a LIBOR Interest
Period may not be readily available to the Lenders in the
London interbank eurocurrency market in sufficient amounts in
the ordinary course of business to fund a LIBOR Loan for a
LIBOR Interest Period; or
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(c) by reason of any change in applicable law or regulation or
regulatory requirement or in their interpretation by any
relevant authority charged with the administration thereof or
of any change in national or international financial or
economic conditions, the Lenders are unable to fund or to
continue to fund a LIBOR Loan during the LIBOR Interest Period
applicable thereto by deposits obtained in the London
interbank eurocurrency market;
the Agent will promptly give written notice (herein called a "SUSPENSION
NOTICE") of such determination to the Borrower.
11.2 SUSPENSION OF LIBOR BORROWING
(a) If a Suspension Notice relates to a LIBOR Loan which has not
yet been Borrowed hereunder, the Agent will so notify the
Borrower by 11:00 a.m. two Business Days prior to the date of
the Borrowing and the Lenders will not be obliged to allow a
Borrowing of such LIBOR Loan and, at the option of the
Borrower, either the Borrowing shall not be made or the
Borrowing shall be made as a U.S. Dollar Loan or a LIBOR Loan
with a different LIBOR Interest Period selected by the
Borrower, all as may be notified by the Borrower to the Agent
prior to the times set out in Schedule A.
(b) A Suspension Notice concerning an outstanding LIBOR Loan can
only be given in the circumstances described in Section
11.1(c). If such a Suspension Notice is given, the amount of
the LIBOR Loan will automatically be converted into a U.S.
Dollar Loan with effect from the date of the Suspension
Notice.
12.0 PAYMENTS
12.1 PLACE AND TIME
12.1.1 Subject to the provisions of Sections 2.7.3 and 2.8.5 and except for
the Issuing Bank's customary letter of credit administrative charges referred to
in Section 2.8.10, all payments to be made by the Borrower hereunder (including
interest on Swingline Loans) shall be made to the Agent for the account of the
Lenders not later than 1:00 p.m. on the date upon which the relevant payment is
due in Same Day Funds sent to the Agent's applicable account described in
Section 7 of Schedule A or to such other account as the Agent may designate in
Canada or, with the consent of the Borrower (such consent not to be unreasonably
withheld), in any other country.
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12.1.2 All payments of principal, interest, fees and other monies payable
under this Agreement received by the Agent from the Borrower shall be
distributed in Same Day Funds to the Lenders in accordance with the Percentage
Loan Commitment of each Lender or as otherwise may be applicable in accordance
with the circumstances.
12.1.3 The Borrower irrevocably directs the Agent to distribute payments in
accordance with Section 12.1.2, and the Borrower and the Lenders agree that:
(a) any such distribution in accordance with the irrevocable
direction will be effective as if the payments had been
distributed by the Borrower in the proportions required by
this Agreement; and
(b) the amount of any payment made by a Lender to another Lender
in order to ensure distribution in accordance with the
foregoing paragraph will not reduce the indebtedness,
liability and obligation of the Borrower to such paying Lender
by the amount so paid, but will reduce the indebtedness,
liability and obligation to the Lender receiving such payment.
12.2 NET PAYMENTS
(a) All payments to be made by the Borrower hereunder shall be
made:
(i) without set-off or counterclaim; and
(ii) free and clear of and without deduction for or on
account of all Taxes unless the Borrower is compelled
by law to make payment subject to such Taxes.
(b) All Taxes in respect of matters relating to or arising out of
any Loan Documents and any amounts paid or payable thereunder
shall be paid by the Borrower or, if the Tax is payable
pursuant to Part XIII of the INCOME TAX ACT (Canada), a Lender
when due and in any event prior to the date on which penalties
attach thereto. The Borrower will indemnify each Lender in
respect of all such Taxes. In addition, if any Taxes or
amounts in respect thereof must be:
(i) deducted or withheld from any amounts payable or paid
by the Borrower hereunder; or
(ii) paid by a Lender pursuant to Part XIII of the INCOME
TAX ACT (Canada);
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then the Borrower shall pay such additional amounts as may be
necessary to ensure that after all required deductions,
withholdings or payments (including deductions, withholdings
and payments resulting from any additional amounts required to
be paid by reason of this Section 12.2(b)) each Lender
receives a net amount equal to the full amount which it would
have received had payment not been made subject to such Tax.
Any amount required to be paid by the Borrower to a Lender
pursuant to this Section 12.2(b) shall be paid within five
Business Days of receipt of the notice given pursuant to
paragraph (d) below.
(c) The Borrower will deliver to the Agent evidence satisfactory
to the Agent (including all relevant Tax receipts) that each
payment by the Borrower hereunder of Tax or in respect of
Taxes in respect of matters relating to or arising out of this
Agreement or any amount paid or payable hereunder, has been
duly remitted to the appropriate authority, within 10 days of
receipt of a written request by the Agent to do so.
(d) If a Lender is required to pay any Tax pursuant to Part XIII
of the INCOME TAX ACT (Canada) then such Lender shall provide
written notice thereof to the Borrower and the Agent at least
30 days prior to the date any such Tax is required to be paid.
12.3 REPAYMENT TO AGENT
(a) Unless the Agent has been notified in writing by the Borrower
at least one Business Day prior to the date on which any
payment to be made by the Borrower under this Agreement is due
that the Borrower does not intend to remit such payment, the
Agent may, in its discretion, assume that the Borrower has
remitted such payment when so due and the Agent may, in its
discretion and in reliance on such assumption, make available
to each Lender on such payment date an amount equal to each
Lender's Percentage Loan Commitment of such assumed payment.
If the Borrower does not in fact remit such payment to the
Agent, without affecting the obligation of the Borrower to
make such payment, the Agent will promptly notify each Lender
and each Lender will forthwith on demand repay to the Agent
the amount of such assumed payment made available to each
Lender, together with interest thereon until the date of
repayment thereof at a rate determined by the Agent (such rate
to be conclusive and binding on each Lender) in accordance
with the Agent's usual banking practice for such advances to
financial institutions of like standing to each Lender, but in
any event at a rate no
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greater than the usual interbank offered rate for the sale of
deposits in the applicable currency.
(b) Unless the Agent has been notified in writing by a Lender at
least one Business Day prior to a Borrowing that such Lender
does not intend to make available its Percentage Loan
Commitment of any Loan, the Agent may, in its discretion,
assume that each Lender has remitted funds to the Agent and
the Agent may, in its discretion and in reliance on such
assumption, make available to the Borrower on the date of a
Borrowing an amount equal to each Lender's Percentage Loan
Commitment of such Loan. If a Lender does not in fact remit
such funds to the Agent, without affecting the obligation of
such Lender to make such funds available, the Agent will
promptly notify each of the other Lenders and the Borrower,
and the Borrower will forthwith on demand repay to the Agent
the amount made available by the Agent on behalf of such
Lender, together with interest thereon until the date of
repayment thereof at the rate payable under this Agreement for
a Canadian Dollar Loan or a U.S. Dollar Loan, as the case may
be.
13.0 INCREASED COSTS
13.1 PAYMENT OF COMPENSATING AMOUNTS
If, with respect to any Loan (including any LC Exposure) (each such
Loan in this Section 13.1 referred to as a "COMPENSATION FACILITY") and as a
result of the introduction or coming into effect after the date of this
Agreement of, or any change in, any laws, regulations, rules or orders or any
change in their interpretation or administration or by reason of any compliance
with any guideline, request or requirement from any fiscal, monetary or other
authority (whether or not having the force of law), including any regulatory
capital requirements introduced or proposed to be introduced by the Bank for
International Settlements and adopted in Canada:
(a) a Lender incurs a cost (which it would not otherwise have
incurred) or becomes liable to make a payment (calculated with
reference to the amount outstanding under a Compensation
Facility) with respect to continuing to provide or maintain a
Compensation Facility (other than franchise taxes, branch
profits taxes and taxes imposed on or measured by a Lender's
income or receipts or minimum tax in lieu thereof, taxes
imposed on or measured by a Lender's capital, federal large
corporations tax levied or assessed against a Lender or other
taxes of general application levied or assessed against a
Lender);
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(b) any reserve, special deposit or similar requirement is imposed
or increased (whether or not with the force of law) with
respect to a Compensation Facility increasing the cost thereof
to a Lender; or
(c) a Lender suffers or will suffer a reduction in the rate of
return on its overall capital (other than a reduction by
reason of any increase in the taxes referred to in paragraph
(a) above) as a result of the amount of capital that a Lender
is required or expected to maintain being increased or of any
change in the manner in which a Lender is required to allocate
its capital resources;
then and in each such case the Borrower shall, subject to the terms and
conditions of this Section 13.0, pay to such Lender such amount (herein called
the "COMPENSATING AMOUNT") as will compensate such Lender for, and the Borrower
will indemnify such Lender against, such incurring of and increases in costs or
reductions in rates of return with respect to Compensation Facilities. The
period for which a Compensating Amount shall be payable shall commence on the
date the first notice required pursuant to Section 13.2(a) has been given.
13.2 NOTICE OF PAYMENT OF COMPENSATING AMOUNT, TIME OF PAYMENT AND
ADJUSTMENT
(a) As soon as practicable a Lender will notify the Borrower and
the Agent of an event having the effect set out in Section
13.1(a), (b) or (c) entitling such Lender to the payment of a
Compensating Amount. If such Lender determines to claim such
Compensating Amount, within 60 days after such notice it will
provide to the Borrower and the Agent a certificate setting
out in reasonable detail a calculation of the Compensating
Amount claimed. Such Lender agrees to use reasonable efforts
(in a manner consistent with its usual banking practices
which, at a minimum, shall not require such Lender to expend
its own funds, suffer any economic hardship or take any action
detrimental to its interests) to minimize the amount of any
Compensating Amount. The certificate of a Lender with respect
to a Compensating Amount shall be PRIMA FACIE evidence of such
Compensating Amount in the absence of manifest error.
(b) The Borrower will within 30 days of receipt of such
certificate from a Lender pay to such Lender the Compensating
Amount. The obligation to pay such a Compensating Amount for
subsequent periods will continue, subject as herein provided,
until the earlier of the termination of the Compensation
Facility affected by the event referred to in the notice given
by a Lender to the Borrower or the lapse or cessation of the
event giving rise to the Compensating Amount. If the Borrower
so requests and if such Lender and the Agent agree that the
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Compensating Amount can be satisfied by an increase in the
interest rates or fees chargeable instead of payment of the
Compensating Amount, then such interest rates or fees shall be
adjusted from the date of the first notice under paragraph (a)
above with respect to such Compensating Amount.
13.3 ELECTION BY BORROWER IF COMPENSATING AMOUNT CLAIMED
The Borrower may notify the Lenders and the Agent that it elects to
repay a Compensation Facility (other than a Borrowing by way of an unmatured BA
Loan or a Letter of Credit) and with respect to which a Compensating Amount is
or may be claimed and if such election is made the Borrower shall, 10 Business
Days after the giving of the notice of election, either repay to all Lenders the
Borrowing applicable to such Compensation Facility (other than by way of an
unmatured BA Loan or a Letter of Credit) or replace the Lender to which any
Compensating Amount is payable with a financial institution acceptable to the
Agent, all without prejudice to the obligation of the Borrower to pay any
Compensating Amount applicable thereto calculated to the date of such repayment.
13.4 REFUND OF COMPENSATING AMOUNT
If the Borrower has paid a Compensating Amount and it is later
established by a court of competent jurisdiction or other authority, or a Lender
determines (acting reasonably), that the circumstances giving rise to the
payment of a Compensating Amount (as opposed to the calculation thereof) either
did not occur or, if they did occur, the effect thereof was different from that
originally believed resulting in an incorrect calculation of the Compensating
Amount, each Lender will refund to the Borrower the whole or a portion, as the
case may be, of the Compensating Amount paid by the Borrower to such Lender with
interest at the rate paid by such Lender on demand deposits unless a Lender has
paid the Compensating Amount to a third Person who refunds it with interest to
such Lender in which case such Lender will refund such interest to the Borrower.
The Borrower has the right to take proceedings in the Courts of British Columbia
to determine whether or not such circumstances occurred.
13.5 LIMIT ON OBLIGATION TO PAY
The Borrower shall have no obligation to pay a Compensating Amount in
respect of any penalty or other charges payable by a Lender due to its failure
to pay, or delay in paying, any amount required to be paid by it under Section
13.1(a).
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14.0 ILLEGALITY
If any change in or introduction of any law, regulation, treaty,
enactment, order, rule, regulatory requirement or official directive or request
(whether or not having the force of law but in respect of which it is customary
for a financial institution to comply) or any change (in respect of which it is
customary for a financial institution to comply) in the interpretation or
application thereof shall make it unlawful or contrary to such directive or
request in any jurisdiction applicable to a Lender for it to make available or
fund or maintain any Loan (including any LC Exposure) or to give effect to its
obligations as contemplated hereby, such Lender may, by written notice thereof
to the Borrower and the Agent, declare that such Lender's obligations to that
extent shall be terminated forthwith whereupon the Borrower will, at its option,
either prepay forthwith such Loan (together with interest thereon accrued to the
date of prepayment), convert such Loan into another Type of Loan provided for
hereunder or do or cause to be done such acts or thing as may be necessary to
render lawful (or not contrary to such directive or request) the making
available, funding or maintaining of such Loan or the fulfillment of such
obligation. In addition, if such unlawfulness can be cured by a transfer by a
Lender of its Revolving Facility Commitment to another branch then such Lender
shall use reasonable efforts (in a manner consistent with its usual banking
practices, which, at a minimum, shall not require a Lender to expend its own
funds, suffer any economic hardship or take any action detrimental to its
interests) to do so.
15.0 SECURITY
15.1 DELIVERY OF SECURITY
The Borrower confirms that it has delivered to the Agent, for and on
behalf of the Lenders and the Hedging Lenders:
(a) a security agreement of the Borrower concerning the property
and assets of the Borrower as therein set out; and
(b) a Guarantee from each Material Subsidiary listed in Schedule F
and a security agreement from each such Material Subsidiary
concerning its property and assets as therein set out.
15.2 CERTAIN GENERAL AGREEMENTS RELATING TO SECURITY
(a) The Security is in addition to and not in substitution for any
other security or securities now or hereafter held by or on
behalf of the Lenders and the Hedging Lenders from the
Borrower, any Material Subsidiary or from any other Person
66
whomsoever and shall be general and continuing security for
the payment of all indebtedness and liability of the Borrower
to the Agent, the Lenders and the Hedging Lenders, and each of
them, relating to or arising out of the Loan Documents and all
Hedging Program Contracts, present and future, absolute or
contingent, joint or several, direct or indirect, matured or
unmatured, extended or renewed, and any ultimate balance
thereof, including all advances on current or running account,
future advances and re-advances, and for the performance of
all obligations of the Borrower and any Material Subsidiary to
the Agent, the Lenders, the Hedging Lenders, and each of them,
relating to or arising out of the Loan Documents and all
Hedging Program Contracts.
(b) The Lenders and the Hedging Lenders may grant time, renewals,
extensions, indulgences, releases and discharges to, take and
give up securities to, may abstain from taking securities from
or perfecting securities of, may accept compositions from, and
may otherwise make arrangements and deal with, the Borrower,
any Material Subsidiary and all other Persons and securities
as the Lenders and the Hedging Lenders may see fit without
prejudice to the liability of the Borrower and any Material
Subsidiary to the Lenders and the Hedging Lenders or the
Lenders' and the Hedging Lenders' right to hold, deal with and
realize on the security of the Security.
(c) The Security shall not operate so as to create any merger or
discharge of the liabilities and obligations of the Borrower
and any Material Subsidiary to the Lenders and the Hedging
Lenders under the Loan Documents and all Hedging Program
Contracts or otherwise, or of any assignment, transfer,
guarantee, lien, contract, promissory note, xxxx of exchange
or security of any form held or which may hereafter be held by
or on behalf of the Lenders and the Hedging Lenders from the
Borrower, any Material Subsidiary or from any other Person
whomsoever.
(d) Notwithstanding that any of the Security is expressed to be
payable upon demand, the Lenders will not make demand under
the Security unless an Event of Default has occurred and the
Hedging Lenders will not make demand unless an Event of
Default occurs or an event occurs under a Hedging Program
Contract giving a Hedging Lender the right to do so.
(e) If there is any conflict between the provisions of this
Agreement and those of any of the Securities, then the
provisions of this Agreement shall prevail.
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16.0 REPRESENTATIONS AND WARRANTIES
16.1 GENERAL
The Borrower represents and warrants to the Lenders and the Hedging
Lenders that:
(a) it and each Material Subsidiary was duly incorporated,
amalgamated, continued or constituted, as the case may be, and
is existing and in good standing with respect to any necessary
filings of annual returns under the laws of the jurisdiction
in which it was incorporated, amalgamated, continued or
constituted, as the case may be;
(b) it and each Material Subsidiary has all requisite power and
capacity to carry on its business as now conducted and as
presently proposed to be conducted;
(c) it and each Material Subsidiary is duly qualified to carry on
its business and is in good standing with respect to any
necessary filings of annual returns in each jurisdiction in
which the failure to be so qualified or in good standing would
have or result in a Material Adverse Effect;
(d) the consolidated financial statements for the period ended
September 30, 2003 delivered by the Borrower to the Agent were
prepared in accordance with GAAP and fairly present in all
material respects the Borrower's financial position as at such
date;
(e) there has been no change in the Borrower's consolidated
financial position since September 30, 2003 except as
disclosed to the Agent or as publicly disclosed which would
have a Material Adverse Effect;
(f) neither it nor any Material Subsidiary is in breach or
violation of or in default under:
(i) any law, statute or regulation (including, to the
best of its knowledge, having made due and diligent
inquiry, any Environmental Laws) of any jurisdiction
where it carries on business applicable to or binding
on it; or
(ii) any agreement or instrument to which it is a party or
by which it is bound,
in any way which would have or result in a Material Adverse
Effect;
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(g) except as disclosed to the Agent, there are no actions or
proceedings pending (including appeals or applications for
review), or to its knowledge overtly threatened in writing,
before any arbitrator or Governmental Body which are likely to
be determined against the Borrower or any Material Subsidiary
and which if so determined would have or result in a Material
Adverse Effect;
(h) each of the Borrower and each Material Subsidiary, as the case
may be, has all requisite power and capacity to create,
execute and deliver the Loan Documents and the Share Purchase
Agreement to which it is a party and the documents
contemplated thereby;
(i) each of the Loan Documents and the Share Purchase Agreement to
which it and each Material Subsidiary is a party has been duly
and validly authorized, executed and delivered by the Borrower
and each Material Subsidiary, as the case may be;
(j) neither the execution and delivery of any of the Loan
Documents and the Share Purchase Agreement nor performance in
accordance therewith will:
(i) constitute a default or breach under:
(A) any law, statute or regulation of British
Columbia or Canada or of any other
jurisdiction where the Borrower or any
Material Subsidiary carries on business,
applicable to or binding on it;
(B) its or any Material Subsidiary's constating
documents; or
(C) any order, injunction, judgment or decree to
which it or any Material Subsidiary is
subject unless the same is being contested
in good faith by appropriate proceedings and
for which a stay of execution has been
procured; or
(ii) constitute a default or breach under any agreement or
instrument to which it or any Material Subsidiary is
a party or by which any of them is bound in any way
which would have or result in a Material Adverse
Effect;
(k) the Borrower and each Material Subsidiary has complied with
all taxation laws in all jurisdictions in which it is subject
to taxation and has paid all Taxes due and payable by it (save
in each case for those which it or they, as the case may be,
are in good faith contesting and for which an adequate reserve
has been set aside) that failure to comply with or pay would
have or result in a Material Adverse Effect;
69
(l) the Borrower and each Material Subsidiary possesses all, and
is not in violation of, any franchises, certificates,
licenses, permits, approvals, tenures (including the Forest
Tenures described in Schedule J under the heading Forest
Tenures), and other authorizations from any Governmental Body
which:
(i) when considered in relation to the Borrower's ongoing
enterprise as a whole, are necessary in any material
respect for the ownership, maintenance and operation
of such enterprise; and
(ii) the failure to possess or the violation of which
would have or result in a Material Adverse Effect;
(m) the Borrower and each Material Subsidiary has good title to or
other interests in its properties and assets (including those
described in Schedule J under the heading Real Property -
Owned) which are necessary for the business-like operation of
its businesses;
(n) the Borrower and each Material Subsidiary has title to its
property and assets free and clear of all Liens other than
Permitted Encumbrances;
(o) the Borrower and each Material Subsidiary has the right to
enjoy and enjoys peaceful and undisturbed possession under all
leases necessary in any material respect for the operation of
its businesses (including those leases described in Schedule J
under the heading Real Property - Leased) and all such leases
are valid and subsisting and are in full force and effect
except where the failure to enjoy such right would not have or
result in a Material Adverse Effect;
(p) no filing, registration or qualification with any Governmental
Body in British Columbia or Canada, which has not been made,
is required to authorize, or is otherwise required for the
execution, delivery or validity of, any of the Loan Documents,
the Share Purchase Agreement or the Acquisition;
(q) no approvals or consents, which have not been given, are
required from any Person to enable the Borrower and any
Material Subsidiary to enter into the Loan Documents to which
it is a party, or to enable the Borrower and the other parties
to enter into the Share Purchase Agreement and to complete the
Acquisition and to observe and perform their respective
obligations thereunder;
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(r) except as disclosed to the Agent, there are no labour disputes
or strikes pending or threatened in respect of the businesses
carried on by the Borrower and each Material Subsidiary;
(s) the corporations listed in Schedule F are the only Material
Subsidiaries as of the date hereof, and each is a wholly-owned
Subsidiary of the Borrower;
(t) during the 12-consecutive-month period before the date of the
execution and delivery of this Agreement and before the date
of any Borrowing hereunder:
(i) no steps have been taken to terminate any Pension
Plan (wholly or in part), which could result in the
Borrower or any Subsidiary being required by
applicable law to make an additional contribution to
a Pension Plan in excess of $50,000;
(ii) no contribution failure has occurred with respect to
any Pension Plan sufficient to give rise to a lien or
charge under any applicable pension benefits laws of
any jurisdiction that, individually or in the
aggregate, would reasonably be expected to result in
a Material Adverse Effect;
(iii) no condition exists and no event or transaction has
occurred with respect to any Pension Plan which might
result in the incurrence by the Borrower or any
Subsidiary of any liability (other than a liability
to pay benefits in accordance with a Pension Plan),
fine or penalty in; and
(iv) except as disclosed in the financial statements
required to be provided pursuant to this Agreement or
as otherwise disclosed in writing from time to time
to the Agent, neither the Borrower nor any Subsidiary
has any contingent liability with respect to any
post-retirement benefit under any medical, health,
hospitalization, insurance or other employee benefit
or welfare plan, agreement or arrangement that,
individually or in the aggregate, could reasonably be
expected to cause a Material Adverse Effect; and
(u) each Pension Plan is in compliance in all material respects
with all applicable pension benefits and tax laws and:
(i) all contributions (including employee contributions
made by authorized payroll deductions or other
withholdings) required to be made to the appropriate
funding agency in accordance with all applicable laws
and the
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terms of each Pension Plan have been made in
accordance with all applicable laws and the terms of
each Pension Plan;
(ii) all liabilities under each Pension Plan which are
required by applicable law to be funded are fully
funded, on a going concern and solvency basis, in
accordance with the terms of the respective Pension
Plans, the requirements of applicable pension
benefits laws and of applicable regulatory
authorities and the most recent actuarial report
filed with respect to the Pension Plan; and
(iii) no event has occurred and no conditions exist with
respect to any Pension Plan that has resulted or
could reasonably be expected to result in any Pension
Plan having its registration revoked or refused for
the purposes of any applicable pension benefits or
tax laws or being placed under the administration of
any relevant pension benefits regulatory authority or
being required to pay any taxes or penalties under
any applicable pension benefits or tax laws, except
for any exceptions to clauses (i) through (iii) above
that, individually or in the aggregate, could not
reasonably be expected to cause a Material Adverse
Effect.
16.2 SURVIVING
The representations and warranties set out in Section 16.1 shall
survive the execution and delivery of this Agreement and each Borrowing
notwithstanding any investigations or examinations made or to be made by the
Agent or the Lenders, or any of them, or their respective counsel and each of
such representations and warranties shall be deemed to be repeated on the date
of any Borrowing and on the last day of each quarter, with reference to the
facts and circumstances then subsisting, as if made at each such time. The
representation and warranty set out in Section 16.1(d) shall be read as if it
referred to the most recent Financial Statements delivered to the Agent pursuant
to Sections 17.4(a) and (b).
17.0 COVENANTS
17.1 DURATION
Subject to Section 17.2(i), the covenants in this Section shall remain
in force from and after the date hereof and so long as any amount is or may be
owing hereunder or all or any part of the Revolving Facility Commitment is
outstanding.
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17.2 GENERAL
The Borrower agrees with the Lenders that it will and, in the case of
paragraphs (a) through (h) and (j) through (n) below, will cause each Material
Subsidiary to:
(a) maintain its valid existence and good standing with respect to
any necessary filings of annual returns in the jurisdiction of
its organization (which jurisdiction shall be Canada or a
Province of Canada) with power and capacity to carry on its
business and duly qualified to carry on business in each
jurisdiction in which the failure to be so qualified would
have or result in a Material Adverse Effect;
(b) carry on and conduct its business in a proper and
business-like manner consistent with standard industry
practice;
(c) keep proper books of account and records in conformity with
GAAP;
(d) maintain in good order and repair its assets and undertaking
which are necessary for the efficient operation of its
business (including practising responsible silviculture)
unless the failure to so maintain or repair does not have or
result in a Material Adverse Effect;
(e) observe and perform:
(i) its obligations under all agreements and instruments
to which it is a party or by which it is bound; and
(ii) its obligations under all leases, licences, permits,
concessions, franchises and tenures;
save to the extent that:
(iii) it in good faith contests its obligations to so
observe and perform; or
(iv) such failure to observe and perform does not have or
result in a Material Adverse Effect;
(f) take all necessary steps to renew all existing leases
(including those described in Schedule J), unless the failure
to do so does not have or result in a Material Adverse Effect;
73
(g) punctually pay all Taxes and other assessments, rates, duties,
levies, government fees and dues lawfully levied, assessed or
imposed upon it unless:
(i) it in good faith contests its obligations to so pay
and sets aside adequate reserves; or
(ii) such failure to pay does not have or result in a
Material Adverse Effect;
(h) comply with every statute, bylaw, rule and regulation,
including all Environmental Laws, of every Governmental Body
having jurisdiction over it or its property and assets, or
both, unless such failure to comply does not have or result in
a Material Adverse Effect;
(i) indemnify the Lenders and the Agent, and their respective
officers, directors, employees, Agent and shareholders, in
their capacities as such, and hold each of them harmless from
and against any and all losses, liabilities, damages, costs,
expenses and claims of any and every kind whatsoever,
including, without limitation:
(i) the cost, liability or damage arising out of
defending, counterclaiming or claiming over against
third parties in respect of any action or matter;
(ii) any cost, liability or damage arising out of a
settlement of any action or proceeding entered into
by the Lenders or the Agent; and
(iii) the costs of complying with any lawful and legally
binding order, direction or request of any
governmental or regulatory authority having
jurisdiction;
which at any time or from time to time may be paid, incurred
or asserted against any of them for, with respect to or as a
result of:
(iv) the presence on or under or the escape, seepage,
leakage, spillage, discharge, emission or release
from the property belonging to the Borrower or any
Subsidiary or into or upon any land, the atmosphere
or any watercourse, body of water or wetland of any
Hazardous Material where it has been proven that the
source of the Hazardous Material is the property of
the Borrower or any Subsidiary; and
(v) any matter concerning Environmental Laws;
74
provided that:
(vi) the Lenders and the Agent shall consult in good faith
with the Borrower on any of the matters described in
subparagraphs (i), (ii) and (iii) above before making
any decision in respect of the matters described
therein; and
(vii) the Borrower is entitled to offer suggestions to the
Lenders and the Agent as to any defence,
counterclaim, claim over, settlement or compliance
but the final decision on any matter is at the sole
discretion of the Lenders and the Agent acting
reasonably.
Notwithstanding Section 17.1, this Section 17.2(i) shall
survive the repayment of all indebtedness to the Lenders and
all other amounts owing under and the satisfaction of all
obligations under the Loan Documents and shall continue in
full force and effect so long as any possibility of any such
liability, claim or loss exists and shall apply
notwithstanding any knowledge which any of the foregoing
persons may have concerning such liabilities, claims or losses
either now or in the future, provided that neither the
Borrower nor any Subsidiary shall be liable for any activity
of any successor-in-interest to any property of the Borrower
or any Subsidiary, which activity has not been caused by or
contributed to by the Borrower or any Subsidiary;
(j) for the purposes of inspection, permit the Lenders and the
Agent and their respective representatives, at all reasonable
times, access to all its property, assets or undertaking and
to all its books of account and records and render all
assistance necessary for such inspection;
(k) only enter into Financial Instrument Obligations of the kind
described in paragraphs (a) and (b) of the definition thereof
and then only in accordance with sound financial practices and
customary risk management in the conduct of the business of
the Borrower and not for speculative purposes, and will not
permit any Subsidiary (other than Lignum) to enter into any
Financial Instrument Obligations with any Person;
(l) if the Borrower or any Material Subsidiary creates or assumes
any Lien upon any of its properties and assets, whether now
owned or hereafter acquired, other than Permitted Encumbrances
and Liens to which the Lenders and any Hedging Lenders have
given their prior written consent, make or cause to be made
effective provisions whereby the obligations of the Borrower
and such Material
75
Subsidiary under the Loan Documents and any Hedging Program
Contracts will be secured equally and rateably with any and
all other Debt thereby secured for so long as any such other
Debt is so secured; but the securing of such obligations shall
not prevent the violation of Sections 17.5(d) and (g) from
constituting a Potential Default or Event of Default;
(m) cause each Person which becomes a Material Subsidiary to
deliver to the Agent, in form and substance satisfactory to
it, within 30 days of becoming a Material Subsidiary:
(i) a Guarantee and a security agreement over the
property and assets of such Material Subsidiary to
the same extent as those delivered pursuant to
Section 15.1;
(ii) resolutions and certificates similar to those
described in Section 4.1(b) in respect of such
Material Subsidiary; and
(iii) an opinion of counsel to the Borrower concerning each
such new Material Subsidiary; and
(n) execute and do all deeds, documents and things which in the
reasonable opinion of the Agent are necessary for the purpose
of giving effect to the Loan Documents.
17.3 INSURANCE
The Borrower agrees with the Lenders that:
(a) it will, in respect of the Borrower and each Subsidiary,
maintain insurance for its property, assets and undertaking
with financially sound and reputable insurers, to the extent
and against risks customary for corporations in similar
businesses, except that if, in the reasonable opinion of the
Borrower, an insurer ceases to be financially sound or
reputable, then, so long as the Borrower is diligently
proceeding to replace that insurer and the Borrower's and each
Material Subsidiary's ability to observe and perform their
respective obligations under the Loan Documents are not
materially adversely affected, the Borrower shall not be in
breach of this subparagraph;
(b) such insurance shall show the Agent as loss payee in respect
of Inventory and any Receivables covered by such insurance,
and shall contain a "mortgage clause" approved by the
Insurance Bureau of Canada; and
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(c) it will at least once each year deliver certificates of the
insurers or one or more insurance brokers acceptable to the
Agent confirming the insurance coverage described in this
Section 17.3.
17.4 INFORMATION
The Borrower agrees with the Lenders that it will furnish to the Agent:
(a) a copy of its consolidated audited and unaudited consolidating
year-end Financial Statements and notes thereto within 120
days of the end of its fiscal year;
(b) a copy of its consolidated unaudited quarterly Financial
Statement within 45 days of the end of each of its fiscal
quarters, together with an Officer's Certificate;
(c) prompt advice of:
(i) any event or circumstance which has or could result
in a Material Adverse Effect and the steps or
proceedings being taken to rectify the same;
(ii) any Event of Default or Potential Default and the
steps or proceedings being taken to rectify the same;
(iii) any decision or notice to terminate, suspend or
materially impair any of the items described in
Section 16.1(l) or the Borrower's or any Material
Subsidiary's right to them, which has or could result
in a Material Adverse Effect;
(iv) any litigation or administrative proceedings claiming
an amount of $20 million or more or which has or
could result in a Material Adverse Effect and provide
a copy of all pleadings; and
(v) any violation of any applicable statutes, bylaws,
rules and regulations, including all Environmental
Laws, which has or could result in a Material Adverse
Effect, and the steps taken or to be taken to correct
the same and promptly provide the Agent with any
environmental assessment required by any regulatory
or other authority having jurisdiction over the
Borrower or any Material Subsidiary or their
respective properties and assets;
(d) within 60 days of the beginning of each fiscal year of the
Borrower, an Annual Business Plan for such year;
77
(e) within 15 days of each month-end, a Borrowing Base
Certificate, calculated as at such month-end;
(f) if and to the extent not available on "SEDAR", promptly upon
transmission thereof, a copy of all Financial Statements,
proxy statements, notices and reports that it sends to its
public shareholders and a copy of all registration statements
(without exhibits), prospectuses and reports which it files
with the Ontario Securities Commission, the British Columbia
Securities Commission, The Toronto Stock Exchange and the
Securities and Exchange Commission or any governmental
department, bureau, commission or agency succeeding to the
functions of any of them or with any other national,
provincial or state securities commission or exchange;
(g) forthwith, notification of any change in the list of Material
Subsidiaries; and
(h) upon request by the Agent, such other information as it may
from time to time reasonably require.
17.5 NEGATIVE COVENANTS
The Borrower agrees with the Lenders that it will not, without the
prior written consent of the Lenders:
(a) except for Permitted Encumbrances or if the Borrower or a
Material Subsidiary complies with the provisions of Section
17.2(l), create, assume, incur or permit to exist, or permit
any Material Subsidiary to create, assume, incur or permit to
exist, any Lien upon any of its property or assets, whether
now owned or hereafter acquired;
(b) either in a single transaction or a series of transactions,
sell, lease, transfer or otherwise dispose of, or permit any
Material Subsidiary to sell, lease or otherwise dispose of,
property having a value in excess of $10 million in aggregate
for the Borrower and all Material Subsidiaries in any fiscal
year, unless:
(i) such sale, lease, transfer or other disposition is of
Inventory sold in the ordinary course of business; or
(ii) such sale, lease or other disposition is of other
property, if:
(A) such property is obsolete or not required
for the purposes of the businesses of the
Borrower and any Material Subsidiary;
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(B) such property is replaced with property of
equal or greater value within 360 days; or
(C) the net proceeds thereof are used within 360
days of receipt:
(1) to make capital expenditures;
(2) to acquire all or substantially all
of the assets or shares of a
Permitted Business; or
(3) for the permanent reduction of
Senior Long-Term Debt or for deposit
to the Sinking Fund;
(c) either in a single transaction or a series of transactions,
enter into, or permit any Material Subsidiary to enter into,
any Securitization program;
(d) create, grant, incur or assume any Debt or enter into any
agreement for the provision of Debt, or permit any Material
Subsidiary to do so, except or unless, subject to Section
17.5(g):
(i) for trade debt incurred in the ordinary course of
business;
(ii) for Debt owed to the Borrower by a Material
Subsidiary, to a Material Subsidiary by the Borrower
or by one Material Subsidiary to another;
(iii) if such Debt is unsecured and does not mature prior
to the date that is the first anniversary of the
Revolving Facility Maturity Date; and
(iv) for Debt secured by a Permitted Encumbrance;
(e) exchange Senior Notes except in accordance with the
Registration Rights Agreement (as defined in the Note
Indenture);
(f) declare or pay any dividends in any fiscal year in an amount
exceeding the Borrower's Consolidated Net Income for such
fiscal year;
(g) for each fiscal quarter permit:
(i) the Interest Coverage Ratio at the end of the quarter
to be less than 2.00:1;
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(ii) the Debt/Capitalization Ratio as at the end of the
quarter to be more than 0.60:1 up to the quarter
ending March 31, 2006 and thereafter 0.55:1; and
(iii) Consolidated Tangible Net Worth as at the end of the
quarter to be less than $160 million plus an amount
equal to 50% of positive Consolidated Net Income
earned after September 30, 2003 and up to the end of
such quarter; and
(h) purchase or redeem (including pursuant to any Asset Sale
Offer, Change of Control Offer, Legal Defeasance or Covenant
Defeasance) any of the Senior Notes or otherwise repay any
principal outstanding under the Senior Notes except in
accordance with the terms for repayment set out in the Note
Indenture, but nothing in this paragraph (h) shall be
construed as permitting any such repayment if an Event of
Default or Potential Default would result therefrom.
17.6 PERFORMANCE BY LENDERS
If the Borrower fails to perform any of its obligations under this
Agreement, then, after notice to the Borrower from the Agent specifying such
failure and the Borrower further failing to perform any such obligation within
10 Business Days thereafter or, if the obligation is not reasonably capable of
being performed within 10 Business Days, failing to proceed diligently to so
perform, the Lenders may, but are not obliged to, perform any or all of such
obligations on behalf of the Borrower and all reasonable costs, charges,
expenses, fees (including legal fees and expenses), outlays and premiums
incurred by the Lenders in connection with such performance will:
(a) be payable by the Borrower to the Lenders, forthwith upon
demand by the Agent, with interest thereon from the date
incurred by the Lenders at the rate per annum equal to the
Prime Rate or the U.S. Base Rate (depending upon the currency
of such cost, charge, expense, fee, outlay or premium) plus
the Applicable Margin in effect from time to time, with the
provisions of Section 8.7 applying, (as if the amount payable
was a Canadian Dollar Loan or a U.S. Dollar Loan, as the case
may be) calculated and payable, and bearing interest on
overdue interest, in the same manner, MUTATIS MUTANDIS, as
interest on Canadian Dollar Loans or U.S. Dollar Loans, as the
case may be; and
(b) with such interest, reduce the amount of the Revolving
Facility Commitment until the Lenders are paid for the costs
incurred and interest thereon.
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17.7 SUCCESSOR CORPORATION
(a) The Borrower shall not, or permit any Material Subsidiary to,
enter into any transaction or series of transactions, whether
by way of reconstruction reorganization, recapitalization,
consolidation, amalgamation, merger, transfer, sale or
otherwise, whereby all or substantially all of its or any
Material Subsidiary's undertaking, property and assets would
become the property of any other corporation or continuing
corporation or other person (a "SUCCESSOR CORPORATION"),
unless:
(i) the Successor Corporation is a corporation
incorporated under the laws of Canada or any Province
thereof;
(ii) prior to or substantially contemporaneously with the
consummation of such transaction the Borrower or a
Material Subsidiary, as the case may be, and the
Successor Corporation shall have executed such
instruments and done such things as, in the opinion
of counsel to the Agent, are necessary or advisable
to establish that upon the consummation of such
transaction the Successor Corporation will be bound
by all the covenants and obligations (present and
future) of the Borrower or a Material Subsidiary, as
the case may be, under the Loan Documents (each
Lender and Hedging Lender hereby appoints the Agent
as its agent to execute and deliver on its behalf any
such instrument or other document in connection with
such transaction.);
(iii) such transaction shall, to the satisfaction of the
Lenders, any Hedging Lenders and their counsel,
acting reasonably, be upon such terms as
substantially to preserve and not impair or prejudice
any of the rights, powers and interests of the
Lenders, any Hedging Lender and the Agent under the
Loan Documents;
(iv) except in the case of any such transaction or series
of transactions involving only the Borrower and one
or more Subsidiaries, the Agent has received a copy
of correspondence from both Xxxxx'x Investors Service
Inc. and Standard & Poor's Rating Services to the
effect that such transaction shall not result in the
downgrading of their credit ratings for the
Borrower's Senior Long-Term Debt in effect
immediately prior to such transaction; and
81
(v) no condition or event exists, either at the time of
such transaction or immediately after the
reconstruction, reorganization, recapitalization,
consolidation, amalgamation, merger, transfer, sale
or other transaction and after giving full effect
thereto or immediately after the Successor
Corporation complying with the provisions of
subparagraph (ii) above, that would result in the
occurrence of an Event of Default or Potential
Default.
(b) Whenever the conditions of paragraph (a) above shall have been
duly observed and performed, the Successor Corporation shall
possess and from time to time may exercise each and every
right and power of the Borrower or a Material Subsidiary, as
the case may be, under the Loan Documents in the name of the
Borrower or a Material Subsidiary, as the case may be, or
otherwise and any act or proceeding by any provision hereof
required to be done or performed by any directors or officers
of the Borrower or a Material Subsidiary, as the case may be,
may be done and performed with like force and effect by all
like directors or officers of the Successor Corporation.
18.0 DEFAULT
18.1 EVENTS OF DEFAULT
Each of the events set out below is an Event of Default (whether or not
caused by any reason whatsoever outside the control of the Borrower, any
Material Subsidiary or any other Person):
(a) the Borrower fails to pay when due the principal amount
payable by it under this Agreement, or fails to pay when due
any other amount payable by it hereunder within three Business
Days of the Borrower receiving written notice thereof from the
Agent; or
(b) the Borrower or any Material Subsidiary fails to comply with
any other provision of the Loan Documents, and such failure is
not cured:
(i) in the case of a breach of any Environmental Law
which could have or has a Material Adverse Effect,
within 90 days or, if such breach is not reasonably
capable of being rectified within 90 days, then, for
so long as the Borrower or such Material Subsidiary
is proceeding diligently to rectify the breach and,
provided that the provisions of Sections 18.1(l) or
(n) are not applicable, within such longer period to
which the Lenders may agree;
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(ii) in the case of the failure to deliver a Borrowing
Base Certificate as required by Section 17.4(e),
within 5 Business Days; and
(iii) in any other case, within 30 days,
of the earlier of any member of Senior Management first having
knowledge, or being in a position to have knowledge, of such
failure or the Borrower receiving written notice thereof from
the Agent; or
(c) any representation and warranty contained in the Loan
Documents or any other instrument or document delivered
pursuant thereto or contemplated thereby is found to be untrue
or incorrect in any material respect when made; or
(d) any certificate (including, without limitation, any Officer's
Certificate), statement, report, notice or opinion delivered
under or in connection with the Loan Documents is untrue or
incorrect in any material respect at the date thereof; or
(e) except as set out in Section 17.7, any order is made or
resolution passed or other action taken for the suspension of
payments in general or dissolution, termination of existence,
liquidation or winding-up of the Borrower or any Material
Subsidiary; or
(f) a moratorium in respect of all or any indebtedness, liability
or obligation of the Borrower or any Material Subsidiary or a
compromise, composition or any arrangement with creditors of
the Borrower or any Material Subsidiary or any similar
proceeding by which the property and assets of the Borrower or
any Material Subsidiary are submitted to the control of its
creditors is applied for by the Borrower or any Material
Subsidiary, as the case may be, ordered or declared; or
(g) a liquidator, trustee, administrator, receiver, manager or
similar officer is appointed in respect of the Borrower or any
Material Subsidiary or in respect of all or substantially all
of their respective properties or assets and the appointment
of such person remains unstayed and in effect for more than 30
days, provided that if a stay of such appointment is granted
and is then lifted the default created by this paragraph (g)
shall be immediate; or
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(h) the Borrower or any Material Subsidiary declares itself, or is
declared, insolvent or is unable, or admits in writing its
inability, to pay its debts as they fall due or becomes
insolvent within the terms of any applicable law; or
(i) except as set out in Section 17.7, the Borrower or any
Material Subsidiary ceases, or threatens to cease, to carry on
all or substantially all of its business; or
(j) the Borrower or any Material Subsidiary makes a proposal or
files a petition in voluntary bankruptcy or seeks relief under
any provision of any bankruptcy, insolvency, creditors'
arrangement, readjustment of debt or liquidation law or
consents to the filing of a petition under such law or to the
appointment of a liquidator, trustee, receiver, manager or
similar officer over it or all or substantially all of its
property, assets and undertaking; or
(k) pursuant to a judgment for the payment of money in excess of
$20 million any writ, execution, sequestration, order or any
other process of any court becomes enforceable against, or an
attachment, a distress or analogous process is levied upon,
the Borrower or any Material Subsidiary, and remains unstayed
and in effect for more than 30 days, provided that if a stay
of such writ, execution, sequestration, order, attachment,
distress is granted and is then lifted the default created by
this paragraph (k) shall be immediate; or
(l) any franchise, certificate, licence, permit, approval, tenure
or other authorization from any Governmental Body which:
(i) when considered in relation to the Borrower's ongoing
enterprise as a whole is necessary in any material
respect for the ownership, maintenance and operation
of such enterprise; and
(ii) the failure to possess would have or result in a
Material Adverse Effect;
is withdrawn, terminated or cancelled and is not replaced
within 90 days; or
(m) without limiting any other paragraph of this Section 18.1, any
event or condition occurs under any agreement for borrowed
money in an amount of $20 million or more that results in a
debt of the Borrower or any Material Subsidiary becoming due
prior to its scheduled maturity or that enables or permits
(with or without the giving of notice, but only after the
lapse of time, if any, required to constitute an event of
default) the holder or holders of such debt or any trustee or
agent on its
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or their behalf to cause such debt to become due, or to
require the prepayment or repayment thereof, prior to its
scheduled maturity; or
(n) an order is made or an action or proceeding commenced by a
Governmental Body or legislation enacted for the
expropriation, confiscation, involuntary purchase, sale or
other taking, whether or not with compensation, of all or
substantially all of the property, assets and undertaking of
the Borrower and any Subsidiary, unless and to the extent that
the same is contested in good faith by the Borrower or any
Subsidiary, as the case may be, and by appropriate proceedings
within 30 days after such order is made, action or proceeding
commenced or legislation enacted, provided that if the
Borrower or any Subsidiary, as the case may be, is
unsuccessful in any such contestation the default created by
this paragraph (n) shall be immediate; or
(o) a change of control occurs. For the purposes of this paragraph
(o), "change of control" means:
(i) any transaction or series of transactions (including
any reconstruction, reorganization, recapitalization,
amalgamation, merger or consolidation) by which any
Person, including any Affiliate of such Person and
any Person related to such Person by blood, marriage
or adoption, becomes the beneficial owner, directly
or indirectly, of more than 50% of the voting shares
in the capital of the Borrower, measured by voting
power rather than number of shares; provided,
however, that it is not a "change of control" if,
pursuant to such transaction, all of the voting
shares of the Borrower are changed into or exchanged
for securities of a parent corporation that, after
such transaction, owns all of the issued and
outstanding capital of the Borrower and no Person,
including any Affiliate of such Person and any Person
related to such Person by blood, marriage or
adoption, has become the beneficial owner, directly
or indirectly, of more than 50% of the voting shares
in the capital of such parent corporation; or
(ii) the first day on which a majority of the board of
directors, or any committee thereof duly authorized
to act on behalf of such board, of the Borrower (the
"BOARD OF DIRECTORS") ceases to be made up of a
combination of directors (the "CONTINUING DIRECTORS")
who were either:
(A) members of the Board of Directors on the
Closing Date; or
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(B) nominated for election with the approval of
a majority of the Continuing Directors who
were members of the Board of Directors at
the time of such nomination.
Notwithstanding the foregoing, it is not a "change of control"
if any one or more of Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, any
Person related to either of them by blood, adoption or
marriage, trustees of a trust solely for the benefit of any
one or more of the foregoing Persons and any corporation over
which any one or more of the foregoing Persons possesses,
directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation,
whether through the ownership of voting securities, by
contract or otherwise, becomes the owner, directly or
indirectly, of more than 50% of the voting shares in the
capital of the Borrower, but only if the Borrower's shares
continue to be traded on The Toronto Stock Exchange.
18.2 ACCELERATION
18.2.1 If an Event of Default occurs and is not waived, the Agent, upon the
written request of the Majority Lenders, shall do any one or more of the
following:
(a) declare, by notice in writing to the Borrower, that all or any
of the obligations of the Lenders hereunder and the Revolving
Facility Commitment shall be cancelled forthwith whereupon the
same shall be so cancelled forthwith;
(b) declare, by notice in writing to the Borrower, all the Loans
(including, without limitation, BA Loans issued but not
matured and LC Exposure) immediately due and payable whereupon
the same shall become immediately due and payable together
with all interest accrued thereon and all other amounts
payable hereunder, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly
waived by the Borrower; and
(c) provided that notice has been given pursuant to paragraph (b)
above, without further notice to or demand upon the Borrower,
which is hereby expressly waived by the Borrower, enforce and
realize upon the Loan Documents and take such other actions
and proceedings as are permitted by law or equity.
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18.2.2 If an Event of Default occurs and is not waived, a Hedging Lender may
do any one or more of the following:
(a) declare, by notice in writing to the Borrower, that all or any
of the obligations of such Hedging Lender hereunder and under
any Hedging Program shall be cancelled forthwith whereupon the
same shall be so cancelled forthwith;
(b) declare, by notice in writing to the Borrower, that all
Hedging Program Contracts to which such Hedging Lender is a
party are terminated and any amount due resulting from the
termination (early or otherwise) of a Hedging Program Contract
shall become immediately due and payable together with all
interest accrued thereon and all other amounts payable
thereunder, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived
by the Borrower; and
(c) provided that notice has been given pursuant to paragraph (b)
above, without further notice to or demand upon the Borrower,
which is hereby expressly waived by the Borrower, enforce and
realize upon all such Hedging Program Contracts and, if the
Agent is realizing upon the Loan Documents pursuant to Section
18.2.1(c), the Security and take such other actions and
proceedings as are permitted by law or equity.
The foregoing shall not preclude, or affect the right of, a Hedging Lender from
terminating a Hedging Program Contract in accordance with the provisions
thereof.
18.2.3 If any Event of Default shall occur and be continuing, on the Business
Day that the Borrower receives notice from the Agent demanding payment pursuant
to this section, the Borrower shall pay to the Agent, for the benefit of the
Lenders, an amount equal to the total of the face amount of unmatured BA Loans
and LC Exposure as of such date plus any accrued and unpaid interest thereon,
provided that the obligation to make such payment shall become effective
immediately, and such payment shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
described in Sections 18.1(e) through (j). All such payments are irrevocable and
the funds in respect thereof shall become the property of the Agent, for the
benefit of the Lenders, and under its exclusive dominion and control. Payments
received by the Agent pursuant to this Section 18.2.3 shall be applied by the
Agent to reimburse the Issuing Bank or the Lenders, as applicable, for LC
Disbursements which have not been reimbursed, the face amount of unmatured BA
Loans and, to the extent not so applied, shall be used to satisfy the
reimbursement obligations of the
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Borrower for the LC Exposure at such time or for BA Loans or, if the maturity of
the Loans has been accelerated, be applied to satisfy other obligations of the
Borrower under this Agreement or the other Loan Documents. Within three Business
Days after all Events of Default have been cured or waived or after the Lenders
are under no further obligation in respect of any BA Loans and there is no LC
Exposure and outstanding LC Disbursements, to the extent not applied as
aforesaid, the Agent shall pay to the Borrower an amount equal to the balance,
if any, of any funds paid by the Borrower pursuant to this Section 18.2.3.
18.2.4 In the case of a payment or receipt of less than the amount required to
be paid under Sections 18.2.1(b), 18.2.2(b) and 18.2.3, the Agent may
appropriate such payment or receipt towards such of the obligations of the
Borrower under this Agreement as the Lenders determine. Any such appropriation
shall override any appropriation made by the Borrower.
18.3 COMBINATION
If any amount payable under this Agreement is not paid as and when due
and the appropriate grace period therefor, if any, has expired and if the
Majority Lenders have given their concurrence pursuant to Section 23.5(f), the
Borrower hereby authorizes each Lender and the Agent to proceed, to the fullest
extent permitted by applicable law, without further prior notice, by right of
combination, set-off, consolidation, banker's lien or counteraction, against any
assets of the Borrower in any currency that may at any time be in the possession
of each Lender and the Agent at any branch or office to the full extent of all
amounts payable to all Lenders hereunder. Any Lender that so proceeds shall
forthwith give notice to the Agent and the Borrower. Nothing in this Section
18.3 shall limit or affect any netting or set-off rights of a Hedging Lender
under a Hedging Program Contract.
18.4 INDEMNITIES
(a) In addition to any other obligation of the Borrower under this
Agreement, the Borrower agrees to indemnify and save harmless
the Agent and each Lender from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted
against any of them which relate to or arise out of or result
from any failure by the Borrower to satisfy its obligations
under this Agreement when due or fulfil any of its other
obligations under this Agreement, including, without
limitation:
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(i) any cost or expense incurred by reason of the
liquidation or re-employment in whole or in part of
deposits or other funds required by any Lender to
fund any BA Loan or LIBOR Loan;
(ii) the Borrower's failure to provide for the payment to
the Agent or the Issuing Bank, as the case may be,
for the account of each of the Lenders, of the full
principal amount of each BA Loan on its maturity date
or of any LC Disbursement;
(iii) the Borrower's failure to give any notice required to
be given by it to the Agent hereunder; or
(iv) the failure of the Borrower to make any other payment
due under this Agreement on its due date, including,
without limitation, any interest or fees.
(b) In addition to any other obligation of the Borrower under this
Agreement, the Borrower agrees to indemnify and save harmless
the Agent and each Lender from and against all losses, costs,
claims, damages, liabilities, expenses and obligations (other
than expenses of the Agent of the nature described in Section
19.1) which any of them may sustain or incur or which may be
asserted against them in connection with the extension of
credit contemplated by this Agreement and their duties under
the Loan Documents other than those arising as a consequence
of their gross negligence or willful misconduct, and except
those amounts which the Borrower is not obliged to pay, as
provided in Section 22.3(c).
19.0 EXPENSES
19.1 The Borrower shall reimburse the Agent, the Lenders and any Hedging
Lender for all reasonable costs and expenses (together with value added, goods
and services, business transfer or sales tax or any similar tax thereon and
including the reasonable fees, disbursements and expenses of legal and other
advisers reasonably engaged) incurred by the Agent, the Lenders and any Hedging
Lender in connection with:
(a) the negotiation, preparation, execution and registration of
the Loan Documents and any documents under any Hedging Program
and any other documents referred to therein or contemplated
thereby;
(b) the negotiation, preparation, execution and registration of
all consents, waivers, amendments and variations in relation
to the Loan Documents and any documents
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under any Hedging Program and any other documents referred to
therein or contemplated thereby; and
(c) the due diligence performed by or on behalf of the Agent and
the Lenders in respect of the extension of credit contemplated
by the Loan Documents.
19.2 The Borrower shall reimburse the Lenders, the Agent and any Hedging
Lender for all costs and expenses (together with value added, goods and
services, business transfer or sales tax or any similar tax thereon and
including the fees, disbursements and expenses of legal and other advisers
reasonably engaged) incurred by any of the Lenders, the Agent and any Hedging
Lender in connection with the enforcement of, or the preservation of any rights
under, the Loan Documents and any documents under a Hedging Program and any
other documents referred to therein or contemplated thereby.
19.3 In addition, the Borrower shall pay or indemnify the Lenders, the Agent
and any Hedging Lender against any and all stamp, registration and similar taxes
which may be payable in connection with the entry into, the performance of and
the enforcement of the Loan Documents and any documents under a Hedging Program.
19.4 The Borrower agrees that the Agent or the Swingline Lender shall have
the authority to debit the account of the Borrower with the Agent or the
Swingline Lender so designated by the Borrower for any amount due pursuant to
this Section 19.0 but, prior to any Event of Default, only if the Borrower has
not paid any amount so due within 10 days of notice thereof except in the case
of an amount due pursuant to Section 19.2 above when no notice shall be
required.
19.5 Amounts due pursuant to this Section 19.0 shall be payable in the
currency in which they were incurred by the Lenders, any Hedging Lender and the
Agent, as the case may be.
19.6 The Borrower will pay interest on all unpaid amounts due pursuant to
this Section 19.0 at the Prime Rate or U.S. Base Rate, as the case may be, plus
2% per annum.
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20.0 WAIVERS, REMEDIES CUMULATIVE
(a) Subject to Section 23.5, any party may from time to time and
at any time:
(i) waive in whole or in part the benefit to it of any of
the provisions of any section in the Loan Documents;
or
(ii) waive in whole or in part its rights on any default
under any section in the Loan Documents which is to
its benefit;
but any such waiver by any party of any such benefit or right
on any occasion shall be deemed not to be a waiver of the
benefit of or right under any such section thereafter or of
any other section or of any subsequent default, as the case
may be.
(b) Failure to exercise or delay in exercising on the part of the
Lenders, the Agent or any Hedging Lender any right, power or
privilege under the Loan Documents or under any documents
relating to a Hedging Program, as the case may be, shall not
operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other
right, power or privilege. No waiver by the Lenders shall be
effective unless it is in writing signed by the Agent. No
waiver by a Hedging Lender shall be effective unless it is in
writing signed by that Hedging Lender.
(c) All rights and remedies of the Lenders set out in the Loan
Documents and of any Hedging Lender under any document
relating to a Hedging Program Contract are cumulative and no
right or remedy contained therein is intended to be exclusive
but each is in addition to every other right or remedy
contained therein or in any future agreement, or now or
hereafter existing at law, in equity or by statute, or
pursuant to any other agreement between the Borrower or a
Material Subsidiary and the Lenders, the Agent or any Hedging
Lender that may be in effect from time to time.
21.0 NOTICES
21.1 ADDRESS
Except as otherwise stated herein, all written notices or other written
communications to any party under any Loan Document shall be deemed to be duly
given or made when delivered (in the case of personal delivery) and when
transmitted (in the case of telecopy) to such party addressed to it at its
address set forth in Schedule D or at such other
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address as such party may hereafter specify for such purpose to the others by
notice in writing. A written notice includes a notice by telecopy.
21.2 NON-BUSINESS DAYS
A notice or other communication received on a non-Business Day or after
4:30 p.m. in the place of receipt shall be deemed to have been received on the
next following Business Day in such place.
22.0 ASSIGNMENTS
22.1 SUCCESSORS
This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective permitted successors and assigns.
22.2 ASSIGNMENT BY BORROWER
Other than in accordance with the provisions of Section 17.7, neither
the Borrower nor any Material Subsidiary may assign or transfer all or any part
of its rights or obligations under the Loan Documents without the prior written
consent of the Lenders.
22.3 ASSIGNMENT AND PARTICIPATION BY LENDERS
(a) Subject to paragraph (b) below, with the prior written consent
of the Agent, the Issuing Bank and the Borrower (such consent
not to be unreasonably withheld, it being agreed that the
Borrower would not be unreasonably withholding its consent if
the reason for doing so is that the Borrower would incur
increased financing costs as a result of any particular
assignment), any Lender may at any time assign the whole or
any part (but only in minimum amounts of $5 million) of its
rights and obligations under the Loan Documents to another
lender or financial institution capable of fulfilling the
obligations of a Lender thereunder. Any assignee shall enter
into an agreement substantially in the form set forth in
Schedule E prior to the assignment taking effect. Each of the
Lenders, other than the one assigning, hereby appoints the
Agent as its agent to execute and deliver on behalf of each
such Lender such assignment agreement. On any such assignment
being made:
(i) the Lender making the same shall be relieved of its
obligations to the extent of the assignment of such
obligations; and
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(ii) to the extent of such assignment:
(A) the Borrower and each Material Subsidiary
shall be directly obligated in the
performance of its respective obligations to
the assignee; and
(B) the assignee shall have the same rights and
benefits against the Borrower and each
Material Subsidiary;
as if the assignee were originally a Lender under the
Loan Documents.
Notwithstanding the foregoing paragraph, if the Lenders have
made demand pursuant to Section 18.2, or if an Event of
Default has occurred and is continuing or if the proposed
assignment is to an affiliate of a Lender capable of
performing the obligations of a Lender under the Loan
Documents (including an assignment resulting from the
conversion of a Lender from a bank under Schedule II of the
BANK ACT to a bank under Schedule III of the BANK ACT), the
prior written consent of the Borrower is not required for any
assignment by a Lender of its rights and obligations under the
Loan Documents, nor is there any minimum amount applicable to
such assignment.
(b) Notwithstanding paragraph (a) above, no consent shall be
required for a Lender to enter into an arrangement (herein
called a "SUB-PARTICIPATION") with another Person (herein
called a "SUB-PARTICIPANT") whereby a Sub-Participant agrees
with such Lender to make funds available to such Lender to
meet its Revolving Facility Commitment and it is intended that
such Sub-Participant not become a Lender hereunder and not
assume the Revolving Facility Commitment of such Lender. In
the event of a Sub-Participation a Sub-Participant shall have
no right to approve, consent to or waive any matter provided
for in the Loan Documents and generally the Sub-Participant
shall not have any rights under the Loan Documents or any
other document concerning the transactions contemplated
thereby (a Sub-Participant's rights against such Lender in
respect of such Sub-Participation to be those set forth in the
agreement executed by such Lender with a Sub-Participant) and
all amounts payable by the Borrower and any Material
Subsidiary under the Loan Documents shall be determined as if
such Lender had not entered into such a Sub-Participation. Any
Lender entering into a Sub-Participation pursuant to this
paragraph shall notify the Agent of the amount thereof and of
the name of the Sub-Participant. A Sub-Participation does not
reduce a Lender's Revolving Facility Commitment and
obligations to fund.
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(c) Notwithstanding Section 19.1(a), any Lender making an
assignment pursuant to paragraph (a) above or entering into a
Sub-Participation pursuant to paragraph (b) above, shall
reimburse the Borrower and the Agent for all costs and
expenses (together with value added, goods and services,
business transfer or sales tax or any similar tax thereon and
including the fees, disbursements and expenses of legal and
other advisers reasonably engaged) incurred by any of them in
connection with such assignment or Sub-Participation. In
addition, any assignee shall pay the Agent a processing and
recording fee of $3,500.
(d) Paragraph (c) above does not apply to the general syndication
by the Agent or an assignment of the whole of a Lender's
rights and obligations under the Loan Documents resulting from
the conversion of a Lender from a bank under Schedule II of
the BANK ACT to a "bank" under Schedule III of the BANK ACT.
22.4 ASSIGNMENT BY HEDGING LENDER
(a) If a Lender ceases to be a Lender then such Lender or an
Affiliate of such Lender, in its capacity as a Hedging Lender,
shall not be entitled to the benefit of the Security.
(b) If a Hedging Lender assigns or transfers all of its rights and
obligations under a Hedging Program Contract, then such
Hedging Lender and, if such assignee is not a Lender, the
assignee of such Hedging Program Contract shall not be
entitled to the benefit of the Security in respect of such
Hedging Program Contract.
22.5 DISCLOSURE
A Lender may disclose to a proposed assignee, pursuant to Sections
22.3(a) or 22.4, as the case may be, such information in the possession of such
Lender relating to the Borrower and any Subsidiary that is available to the
public and, on a confidential basis, such information concerning the Loan
Documents, as such Lender sees fit. A Lender may disclose to a proposed
Sub-Participant pursuant to Section 22.3(b) only such information in the
possession of such Lender that is available to the public, a copy of the Loan
Documents and details of Loans outstanding. Without the prior written consent of
the Borrower (such consent not to be unreasonably withheld) no Lender shall
disclose any other information concerning the Borrower or any Subsidiary given
by it or them to the Lenders.
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23.0 AGENCY
23.1 DEFINITIONS
In this Section 23.0 the following expressions have the following
meanings:
(a) "ACTION" means a demand for payment, or any action or
proceeding to enforce payment, of the Indebtedness (as defined
below), or any part or parts thereof, or to commence
enforcement proceedings in respect of any rights under the
Loan Documents or any other documents or instruments taken or
given pursuant to the Loan Documents, except that "Action"
shall not include the exercise by a Hedging Lender of any of
its rights and remedies under a Hedging Program Contract,
including the rights of termination, early termination,
set-off and netting, but not including the right to enforce a
Security.
(b) "INDEBTEDNESS" means all and every indebtedness, liability and
obligation, present and future, direct and indirect, absolute
and contingent, matured and unmatured, of the Borrower and any
Material Subsidiary to:
(i) the Lenders, and each of them, relating to or arising
out of the Loan Documents, including principal,
interest and fees and all costs and expenses of the
Lenders and the Agent, and each of them, in
connection with recovering or enforcing payment
thereof; and
(ii) the Hedging Lenders relating to or arising out of all
Hedging Program Contracts and all costs and expenses
of all Hedging Lenders in connection with recovering
or enforcing payment thereof.
(c) "NOTICE OF DEFAULT" has the meaning given in Section 23.5(g).
(d) Notwithstanding any other provision contained in the Loan
Documents, the Agent is only the agent for the Hedging Lenders
for the purposes of holding, or taking any remedial action in
connection with, the Security.
23.2 APPOINTMENT OF AGENT AND OTHER REGULATORY MATTERS
(a) Each Lender and each Hedging Lender hereby appoints and
authorizes the Agent to exercise on its behalf the powers, if
any, specifically delegated to it in the Loan Documents and
all other powers incidental thereto. Nothing in any such
document or in any other document shall be deemed to
constitute the Agent a trustee or a fiduciary for any Lender
or Hedging Lender or to impose on the
95
Agent any obligations (fiduciary or otherwise) other than
those for which express provision is made in such documents.
(b) Notwithstanding the foregoing, with respect to the rights and
obligations of the Agent as a Lender or a Hedging Lender, the
Agent shall have the same rights and obligations and may
exercise the same rights and powers of a Lender or a Hedging
Lender as though it were not performing the duties of Agent.
The expressions Majority Lenders, Lenders, Lender, Hedging
Lenders, Hedging Lender or any similar expression shall,
unless the context clearly otherwise indicates, include the
Agent in its individual capacity as a Lender or a Hedging
Lender, as the case may be.
(c) The Agent may accept deposits from, lend money to and
generally engage in any kind of banking or other business with
the Borrower or any Subsidiaries as if it were not performing
the duties of Agent specified in the Loan Documents, and may
accept fees and other consideration from the Borrower and any
Subsidiaries for services in connection with the Loan
Documents without having to account for the same to the
Lenders (including the Fronting Fee as long as the Agent and
the Issuing Bank are the same) except in respect of the
Stamping Fees, the Fronting Fee (if the Agent and the Issuing
Bank are not the same) and the commitment fee provided for in
Section 10.0 and paid to the Agent.
(d) Neither the Agent nor any director, officer, employee or agent
of any of them shall have any responsibility for:
(i) any failure of the Borrower or any Material
Subsidiary to fulfil any obligation under the Loan
Documents, a Hedging Program or of any other Person
under any other agreement or document contemplated by
or delivered pursuant to the Loan Documents or a
Hedging Program;
(ii) the truth of any representation or warranty made by
the Borrower or any Material Subsidiary; or
(iii) the validity or enforceability of the Loan Documents
or any other agreement or document contemplated by or
delivered pursuant to the Loan Documents.
(e) The Agent shall be entitled to rely in good faith on any
document believed by it to be genuine and to have been sent or
signed by the proper person and on the opinions and statements
of any independent legal counsel or other professional
96
advisors selected by it and shall not be liable to any Lender
or Hedging Lender for any consequence of any such reliance.
(f) Unless a Loan Document provides that a Person is to deliver a
notice or document directly to a Lender, the Agent shall
promptly deliver or transmit to each Lender each notice or
other document received by it pursuant to the Loan Documents
addressed to, or calling for action by, a Lender.
(g) The Agent shall be under no obligation to inquire as to the
performance by the Borrower, any Material Subsidiary or any
other Person of its obligations under the Loan Documents;
provided, however, that the Agent shall give prompt notice to
each Lender of any event of which it receives actual notice in
its capacity as agent that constitutes an Event of Default or
a Potential Default.
(h) The Agent may treat each Lender as the holder of each Bankers
Acceptance delivered for that Lender pursuant to the Loan
Documents for all purposes whatsoever unless and until the
Agent receives notice of a transfer or assignment thereof.
(i) If the Agent shall require instructions from the Lenders with
respect to any act or action (including failure to act) in
connection with the Loan Documents or any other document, the
Agent shall be entitled to refrain from such act or taking
such action unless and until the Agent shall have received
instructions from the Lenders and the Agent shall not incur
liability to any Lender or any other Person by reason of so
refraining. Without limiting the foregoing, no Lender or any
Hedging Lender shall have any right of action whatsoever
against the Agent as a result of the Agent acting or
refraining from acting under the Loan Documents or under any
other document in accordance with the instructions of the
Lenders.
23.3 INDEMNIFICATION AND REIMBURSEMENT OF AGENT
To the extent that the Agent is not reimbursed and indemnified by the
Borrower, the Lenders will reimburse and indemnify the Agent, in accordance with
the Percentage Loan Commitment of each to, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in performing its duties
as agent, and not as a Lender, under the Loan Documents or under any other
document contemplated by the Loan Documents; provided that no Lender shall be
liable for:
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(a) any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or
willful misconduct; or
(b) any fee to be paid by the Borrower to the Agent that the Agent
is not required to share with the Lenders.
23.4 RESIGNATION BY AND TERMINATION OF THE AGENT
(a) The Agent may resign from the performance of all its functions
and duties under the Loan Documents at any time by giving 30
days' prior written notice to the Borrower and the Lenders.
Such resignation shall take effect upon the appointment of a
successor agent pursuant to paragraph (c) or (d) below or as
otherwise provided below.
(b) The Majority Lenders may terminate the appointment of the
Agent and its performance of all its functions and duties
under the Loan Documents and all other documents at any time
by giving 30 days' prior written notice to the Agent and the
Borrower. Such termination shall take effect upon the
appointment of a successor agent pursuant to paragraph (c) or
(d) below or as otherwise provided below.
(c) Upon any such notice of resignation or termination the Lenders
shall appoint a successor agent hereunder reasonably
acceptable to the Borrower.
(d) If a successor agent shall not have been appointed within such
30-day period, the Agent, with the consent of the Borrower,
shall then appoint a successor who shall serve as Agent under
the Loan Documents and other documents until such time, if
any, as the Lenders appoint a successor agent.
(e) If no successor agent has been appointed pursuant to paragraph
(c) or (d) above by the 60th day after the date such notice of
resignation or termination was given by the Agent or the
Lenders, as the case may be, the Agent's resignation or
termination shall become effective, the Agent shall be
released from all obligations as Agent and the Lenders shall
thereafter perform all the duties of the Agent under the Loan
Documents until such time, if any, as the Lenders appoint a
successor agent as provided above.
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23.5 CONSENTS AND ENFORCEMENT
(a) Subject to paragraph (b) below, the Agent, on the written
instructions of the Majority Lenders, may on behalf of the
Lenders grant waivers, consents, vary the terms of the Loan
Documents, make demand and give notices under Section 18.0,
but not Section 18.2.2, of this Agreement and under the
Guarantees, enforce the Loan Documents and do or omit to do
all such acts and things in connection herewith or therewith.
(b) Notwithstanding paragraph (a) above, but subject to paragraph
(c) below, only all of the Lenders may authorize the Agent to
agree to or grant:
(i) any extension of the date or alteration in the
amount, currency or mode of calculation or
computation of any payment under this Agreement;
(ii) any extension of the Revolving Facility Maturity
Date;
(iii) any change in the provisions of Sections 2.1, 2.2,
2.5, 2.7, 2.8.4, 5.1, 17.2(l), 17.2(m), 18.0 or 23.5
of this Agreement or the part of Section 2.8.5 after
the first sentence and any amendment to this
Agreement which would result in a decrease of the
discount and interest rates and fees determined
hereunder;
(iv) any change in the definition of the Revolving
Facility Commitment, Revolving Facility Maximum
Amount, Majority Lenders, Percentage Loan Commitment,
Swingline Exposure or Borrowing Base;
(v) the release of the Borrower or any Material
Subsidiary from any of its indebtedness, liabilities
and obligations under the Loan Documents; and
(vi) the release of any Security granted by the Borrower
or any Material Subsidiary.
(c) For greater certainty, the consent of a Hedging Lender shall
not be required for the matters described in paragraphs (a)
and (b) above, except that, subject to paragraph (f) below,
all Hedging Lenders must consent to any proposed amendment or
modification to the Loan Documents that adversely affects the
Security or their enjoyment of the benefit of the Security.
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(d) If the Borrower or a Material Subsidiary requests that the
Lenders or Hedging Lenders consent or agree to any matter
under the Loan Documents or to waive any Event of Default, it
shall give written notice to the Agent and, within 15 Business
Days (or such greater or lesser number of days as the Lenders
or Hedging Lenders may agree upon) after the date of receipt
of such notice from the Agent, each Lender and Hedging Lender
shall advise the Agent, in writing, whether or not it
consents, agrees or waives, as the case may be.
(e) If, within the period specified in paragraph (d) above, any
Lender or Hedging Lender fails to advise the Agent in writing
that it does not consent, agree or waive, as the case may be,
then that Lender or Hedging Lender shall be deemed not to have
consented, agreed or waived, as the case may be.
(f) Except as provided for in this Agreement, no Lender shall take
any Action without the concurrence of the Majority Lenders.
The consent of a Hedging Lender shall not be required for any
Action.
(g) If an Event of Default has occurred and is continuing then,
upon becoming aware of the same, the Agent shall give written
notice (the "NOTICE OF DEFAULT") to the Lenders, requesting
their concurrence in taking any Action within a period of not
less than 15 Business Days (or such greater or lesser number
of days as the Lenders may agree upon) from the date of
receipt by them of the Notice of Default.
(h) A Lender shall, within the period specified in the Notice of
Default, give written notice to the Agent of its concurrence
or refusal to concur in the Action described in the Notice of
Default.
(i) If, within the period specified in the Notice of Default, any
Lender fails to give written notice to the Agent that it does
or does not concur, that Lender shall be deemed to have
concurred in the taking of the Action described in the Notice
of Default.
(j) Each Lender and Hedging Lender shall do such things and
execute such instruments as may be reasonably necessary to
carry out an Action, if any, or to give effect to any other
matter provided for in the Loan Documents.
100
(k) The aggregate of all amounts received by the Lenders and all
Hedging Lenders:
(i) from enforcing or realizing upon the Loan Documents
and the Hedging Program Contracts;
(ii) by way of combination, counterclaim, set-off or lien
in respect of the Indebtedness, but in the case of
any such amounts received by all Hedging Lenders,
only if the Lenders and all Hedging Lenders are
enforcing and realizing on the Securities; and
(iii) on any insolvency, winding-up, liquidation,
bankruptcy or receivership of the Borrower or any
Material Subsidiary;
shall be applied as follows:
(A) firstly, in payment in full of all costs and
expenses incurred in connection with
recovering or enforcing payment of the
Indebtedness or any part or parts thereof or
preserving or enforcing the Loan Documents
and all Hedging Program Contracts;
(B) secondly, the balance, if any, in payment in
full to each of the Lenders and each Hedging
Lender in proportion to the amount of the
Indebtedness to each under the Revolving
Facility and in respect of the Hedging
Program Senior Secured Amount, as the case
may be, bears to the total of such
Indebtedness; and
(C) thirdly, the balance, if any, in payment in
full, pro rata, to all Hedging Lenders of
the total of Hedging Program Subordinated
Secured Amounts.
(l) If any Lender or Hedging Lender at any time receives payment
of all or any portion of the Indebtedness owing to it other
than pursuant to or in accordance with Sections 2.7.3, 2.8.5
or 12.1 of this Agreement, paragraph (k) above or pursuant to
a Hedging Program Contract, that Lender or Hedging Lender will
forthwith give notice to that effect to the Agent, which will
forward such notice to the other Lenders and Hedging Lenders.
Any such Lender or Hedging Lender shall be deemed to have
received such amount as trustee for the other Lenders and
Hedging Lenders and will forthwith pay that amount to the
Agent, and the Agent will apply and distribute that amount
pursuant to the provisions of this Agreement
101
as if it were a payment made by the Borrower or a Material
Subsidiary, as the case may be.
23.6 ADVICE
If any Lender receives from the Borrower or any Material Subsidiary any
information, notice or certificate delivered pursuant to or in compliance with
the Loan Documents, then, unless it is clear that such information, notice or
certificate has been delivered to the other Lenders, such Lender will forthwith
deliver to the Agent and the Agent will forthwith deliver to the other Lenders,
as the case may be, all such information, notices and certificates.
23.7 GENERAL
(a) Each of the Lenders has exercised and will continue to
exercise its independent credit judgment on any matter
relating to the Loan Documents and the financial condition and
the affairs of the Borrower and its Subsidiaries, and has not
relied on and will not hereafter rely on any of the other
Lenders or the Agent:
(i) to check or inquire on its behalf into the adequacy,
accuracy or completeness of any information provided
by any Person under or in connection with the Loan
Documents or the transactions contemplated thereby,
whether or not such information has been or is
hereafter distributed to a Lender by one or more of
the other Lender or the Agent;
(ii) to assess or keep under review on its behalf the
financial condition, creditworthiness, business,
affairs or nature of the Borrower and its
Subsidiaries or any other credit or banking matters
relative to the Loan Documents; and
(iii) as to the due execution, legality, effectiveness,
validity or enforceability of the Loan Documents or
any other documentation or information delivered by
the Borrower, a Material Subsidiary, a Lender, a
Hedging Lender or the Agent in connection therewith
or for the performance thereof by any party thereto
or for the financial condition of the Borrower and
its Subsidiaries. Any representation, warranty or
condition express or implied by law or otherwise is
hereby excluded.
(b) Copies of the Loan Documents and all documents contemplated
thereby have been made available to each of the Lenders and
the Agent for review by them
102
and each Lender and the Agent is satisfied with the form and
substance of such documents.
(c) If the Majority Lenders vote to determine that it is necessary
for the Agent to expend money on collecting, recovering or
enforcing payment of the Loans or enforcing the Loan Documents
or protecting and preserving the Loan Documents, the cost
thereof shall be shared among the Lenders and the Hedging
Lenders in accordance with the Indebtedness owed to each.
(d) Each of the Lenders acknowledges to and agrees with each of
the other Lenders and the Agent that, except as otherwise
provided in this Agreement:
(i) each Lender is entitled to exercise its rights,
remedies and discretion under the Loan Documents in
its sole best interests as it may determine;
(ii) no Lender has any duty or obligation to any other
Lender, express or implied, in tort or otherwise, and
shall not be liable to any other Lender, and the
Agent shall not be liable to any of the Lenders for
anything whatsoever (including gross negligence or
willful misconduct) except for those duties and
obligations expressly set out in the Loan Documents,
but a Lender that fails to make its Revolving
Facility Commitment for any Borrowing shall indemnify
and hold harmless the other Lenders from all claims,
demands, actions and causes of actions relating to or
arising out of such failure;
(iii) each Lender is acting independently under the Loan
Documents; and
(iv) nothing in the foregoing acknowledgment shall entitle
a Lender to prevent or restrict the Agent from
exercising rights or performing its obligations in
accordance with the Loan Documents.
23.8 SHARING INFORMATION
The Agent and the Lenders may share among themselves, by electronic
means or otherwise, any information they may have from time to time concerning
the Borrower and its Subsidiaries whether or not such information is
confidential, but shall have no obligation to do so (except for any obligations
of the Agent to provide information as required in the Loan Documents). Neither
the Agent nor any Lender shall be responsible to the other or to the Borrower
for any error, omission, interruption, loss or delay in transmission or delivery
of any information delivered under the Loan Documents.
103
23.9 ACKNOWLEDGMENT BY BORROWER
The Borrower acknowledges notice of the terms of the provisions of this
Section 23.0 and agrees to be bound hereby to the extent of its obligations
hereunder, and further agrees not to make any payments, take any action or omit
to take any action which could result in the non-compliance by any Lender, any
Hedging Lender or Agent with its obligations hereunder. Except under Section
23.4, nothing in this Section 23.0 shall confer or be deemed to confer any
right, benefit or advantage on any Obligant.
23.10 AMENDMENTS TO SECTION 23.0
The Borrower consents to the Agent and the Lenders entering into any
agreement among themselves which has the effect of amending the rights and
obligations of the Agent and the Lenders under this Section 23.0, provided that
the substantive rights of the Borrower and its Subsidiaries are not materially
adversely affected thereby.
24.0 CURRENCY INDEMNITY
24.1 INDEMNITY
If:
(a) any amount payable under, or in connection with any matter
relating to or arising out of, the Loan Documents, is received
by the Agent or a Lender in a currency (herein called the
"PAYMENT CURRENCY") other than that agreed to be payable
thereunder (herein called the "AGREED Currency"), whether
voluntarily or pursuant to an order, judgment or decision of
any court, tribunal, arbitration panel or administrative
agency or as a result of any bankruptcy, receivership,
liquidation or other insolvency type proceedings or otherwise;
and
(b) the amount so produced by converting the Payment Currency so
received into the Agreed Currency is less than the relevant
amount of the Agreed Currency;
then:
(c) the amount so received shall constitute a discharge of the
liability of each Obligant under or in connection with the
Loan Documents only to the extent of the amount received
following the conversion described in paragraph (b) above; and
104
(d) the Borrower shall indemnify and save the Lenders harmless
from and against such deficiency and any loss or damage
arising as a result thereof.
Any conversion pursuant to this Section 24.1 shall be made, if between Canadian
Dollars and U.S. Dollars, at the Spot Rate of Exchange and otherwise at such
prevailing rate of exchange on the date the Payment Currency is received by the
Agent and in such market as is determined by the Agent, acting in accordance
with normal banking procedures, as being the most appropriate for such
conversion. The Borrower shall in addition pay the reasonable costs of such
conversion.
24.2 INDEPENDENT OBLIGATION
The indemnity set out in Section 24.1:
(a) is an obligation of the Borrower which is separate and
independent from all other obligations of the Borrower under
the Loan Documents;
(b) gives rise to a separate and independent cause of action;
(c) applies irrespective of any indulgence granted by or on behalf
of the Lenders or the Agent; and
(d) continues in full force and effect notwithstanding, and does
not merge with, any order, judgment or decision of any court,
tribunal, arbitration panel or administrative agency or as a
result of any bankruptcy, receivership, liquidation or other
insolvency type proceeding or otherwise as to any amount due
under the Loan Documents or in connection therewith.
25.0 NO PARTNERSHIP
Each Lender is acting individually under the Loan Documents and nothing
in the Loan Documents or any action taken by the Lenders, any Hedging Lender or
the Agent shall constitute or be construed as constituting any of them or the
Borrower or any of its Subsidiaries or any other Person, a partnership, an
association, a joint venture or any other entity or group.
26.0 TIME OF ESSENCE
Time is of the essence of this Agreement.
105
27.0 GOVERNING LAW AND JURISDICTION
27.1.1 This Agreement shall be governed by and construed in accordance with
the laws of British Columbia and for the purpose of legal proceedings this
Agreement shall be deemed to have been made in such Province and to be performed
there.
27.1.2 The Courts of British Columbia shall have non-exclusive jurisdiction
over all disputes which may arise under this Agreement, provided always that
nothing contained in this Agreement shall prevent the Lenders (but not the
Borrower) from proceeding at their election in the Courts of any other Province
and the Borrower hereby irrevocably submits to each such jurisdiction,
acknowledges the competence of each and the convenience and propriety of the
venue thereof and agrees to be bound by any judgment thereof and hereby waives
any and all objections which it may have to each such jurisdiction.
28.0 SEVERABILITY
28.1.1 If, in any jurisdiction, any section or any part of any section of this
Agreement is held to be unenforceable or otherwise invalid such holding shall
not in any way affect the enforceability or validity of the remaining sections
or the remainder of such section of this Agreement in that jurisdiction or
affect their enforceability or validity in any other jurisdiction.
28.1.2 The unenforceability or invalidity of the whole or any part of this
Agreement against one of the parties hereto shall not in any way affect the
enforceability or validity of the whole or any part of this Agreement against
any of the other parties hereto or in any way affect, limit or restrict the
rights, remedies, duties or obligations of any of the other parties against any
of them.
106
29.0 COUNTERPARTS
This Agreement may be executed in any number of counterparts and by
facsimile signature and all of such counterparts taken together shall be deemed
to constitute one and the same instrument and a facsimile signature shall have
the same force and effect as if it were an original.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
EXECUTED BY RIVERSIDE FOREST PRODUCTS LIMITED
Per:
-----------------------------------
LENDERS:
EXECUTED BY BANK OF MONTREAL
Per: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Xxxxxxx Xxxxxx, Director
EXECUTED BY HSBC BANK CANADA
Per:
-----------------------------------
Per:
-----------------------------------
HEDGING LENDERS:
EXECUTED BY BANK OF MONTREAL
Per: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Xxxxxxx Xxxxxx, Director
107
EXECUTED BY HSBC BANK CANADA
Per:
-----------------------------------
Per:
-----------------------------------
AGENT:
EXECUTED BY BANK OF MONTREAL
in its capacity as Agent
Per: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Xxxxxxx Xxxxxx, Director
108
SCHEDULE A
BORROWING PROCEDURES
1. Any Draw Request made by the Borrower pursuant to Section 3.1 if made
prior to the applicable times set out in paragraph 3 of this Schedule A shall be
deemed to be made on the Business Day on which it was made and, if made after
such applicable times, shall be deemed to be made on the next Business Day.
2. The minimum amount and integral multiples of any:
(a) Canadian Dollar Loan and U.S. Dollar Loan is $200,000 and
$100,000, respectively;
(b) BA Loan is $1,000,000 and $200,000, respectively;
(c) LIBOR Loan is U.S. $1,000,000 and U.S. $100,000, respectively;
and
(d) Swingline Loan will be as agreed upon by the Borrower and the
Swingline Lender.
3. (a) Except in the case of a Swingline Loan, the Agent must receive
a Draw Request by 12:00 noon one Business Day prior to the day
of a Canadian Dollar Loan, U.S. Dollar Loan and a Borrowing by
way of a BA Loan.
(b) The Agent must receive a Draw Request by 10:30 a.m. three
Business Days prior to a LIBOR Loan Borrowing.
(c) In the case of a Letter of Credit, the Issuing Bank must
receive a notice requesting the issuance of a Letter of
Credit, together with any other information required pursuant
to Section 2.8.2 by noon three days prior to the requested
issuance date, or by such other time as has been previously
agreed to by the Borrower and the Issuing Bank.
(d) The Swingline Lender will determine the notice for a Swingline
Loan.
4. By 4:00 p.m. on the date of receipt of the Draw Request, the Agent will
notify each Lender in writing of the amount of the Percentage Loan Commitment of
each Lender in any
Borrowing, the date of the Borrowing, the Prime Rate and the U.S. Base Rate, as
the case may be. The Agent is authorized by the Borrower and each Lender to
allocate amongst the Lenders the Loans which are the subject of the Draw Request
in such manner and amounts as the Agent may, in its sole and unfettered
discretion acting reasonably, consider necessary and equitable, rounding up or
down, so as to ensure that no Lender has a participation with respect to a BA
Loan for a fraction of $100,000 and in such event the amount of each Lender's
Percentage Loan Commitment in any such Borrowing by way of Bankers Acceptances
shall be altered accordingly.
5. By 10:00 a.m. on the date of a Borrowing of a BA Loan the Agent will,
if necessary, contact the Schedule II/III Lenders and obtain their respective
discount rates for the purposes of computing the BA Rate for the term specified
by the Borrower.
6. By 11:00 a.m. two Business Days prior to the date of a Borrowing of a
LIBOR Loan or 11:00 a.m. on the date of a Borrowing of a BA Loan the Agent will
notify the Lenders of the applicable LIBOR or the BA Rate, as the case may be.
7. No later than 1:00 p.m. on the date of a Borrowing, each Lender will
make available to the Agent:
(a) in the case of Canadian Dollars, pay through:
S.W.I.F.T. BIC Code: XXXXXXX0 Bank of Montreal International
Banking Head Office Montreal, Quebec
ACCOUNT WITH:
Bank of Montreal
First Canadian Place
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx, X0X 0X0, Transit 0002
BENEFICIARY: Account No. 00021455151
(Reference Internal Loan Agency Account)
2
and:
(b) in the case of U.S. Dollars, pay through:
S.W.I.F.T. Code PNBPUS3NNYC Xxxxxxxx XX Xxx Xxxx XXX#
0000-0000-0
BENEFICIARY'S BANK:
S.W.I.F.T. Code: XXXXXXX0 Bank of Montreal GPS Canada ACCOUNT
NUMBER: 0000000000000 BENEFICIARY: Account No. 00024681014
(Reference Internal Loan Agency Account)
or any other office of account designated by the Agent, for the Borrower's
account, in Same Day Funds the principal amount of such Lender's Percentage Loan
Commitment in the Borrowing, or for BA Loans the discounted amount less Stamping
Fee, for such Lender, as the case may be.
8. Upon receipt of the principal amounts or, for BA Loans, the discounted
amount less Stamping Fee, the Agent will transfer the amounts thereof to the
accounts designated by the Borrower in the Draw Request no later than 3:00 p.m.
on the date of the Borrowing. The Agent will provide all necessary particulars
to each Lender to permit it to complete BA Loans as aforesaid.
9. At the request of the Agent, the Borrower will furnish each Lender with
a supply of Bankers Acceptances, and with the dates, name of payee, principal
amounts, the currency, rates of interest (if applicable), places of payment and
maturity dates left blank, which have been executed in the name of and on behalf
of the Borrower by authorized signatories. The safekeeping and proper completion
of each Bankers Acceptance shall be the responsibility of the Lender holding it.
The Borrower will deliver sufficient Bankers Acceptances as advised by the Agent
from time to time. Upon termination of the Loan Agreement each Lender will
deliver back to the Borrower all unaccepted Bankers Acceptances then in its
possession.
10. Each Lender is hereby authorized to fill in dates, names of payees,
principal amounts, the currency, the places of payment, maturity dates and
interest rates to reflect the Percentage Loan Commitment of such Lender in
respect of each Borrowing in accordance with
3
telephone instructions from the Agent, which will in all instances be confirmed
in writing by the Agent.
11. All Bankers Acceptances when completed as aforesaid or when completed
in accordance with the provisions of the power of attorney shall constitute
legal, valid and binding obligations of the Borrower.
12. In the event any officer of the Borrower who has signed a Bankers
Acceptance shall cease to be an officer before such Bankers Acceptance is
delivered to or by a Lender such Bankers Acceptance nevertheless may be
completed by such Lender, unless the Agent has received from any two members of
Senior Management notice of same, with the same force and effect as if such
officer signing had not ceased to be an officer of the Borrower and such Bankers
Acceptance, when completed by a Lender in accordance herewith, will become and
be a legal, valid and binding obligation of the Borrower.
13. The responsibility of each Lender and the Agent is limited to loss
arising by reason of negligence or default or willful misconduct of such Lender
or the Agent, as the case may be, its officers or employees, and no Lender nor
the Agent shall have any liability or obligation in any respect whatsoever as to
Bankers Acceptances completed upon instructions received in accordance with the
Agreement, and shall not be responsible for instructions so received, and the
Borrower hereby agrees to indemnify and hold harmless the Lenders and the Agent
from any claims, demands, actions or causes of actions with respect to any
Bankers Acceptances completed by the Lenders as herein provided.
4
SCHEDULE B
OFFICER'S CERTIFICATE
---------------------
On behalf of Riverside Forest Products Limited (the
"Borrower"), and without personal liability, I, , hereby certify that:
1. I am the of the Borrower.
2. I am familiar with and have examined the provisions of the agreement
(the "Loan Agreement") dated March 31, 2004, among the Borrower, the Several
Financial Institutions from time to time named as Lenders on the signature page
thereto, Bank of Montreal as Hedging Lender, HSBC Bank Canada as Hedging Lender
and Bank of Montreal, as Agent. (Expressions used in this Certificate shall have
the meanings given by the Loan Agreement).
3. I have made reasonable investigations of corporate records and
inquiries of other officers and senior personnel of the Borrower and based on
the foregoing and as of the date of this certificate:
(a) to the best of my knowledge, no Event of Default or Potential
Default has occurred and is continuing which has not been
previously disclosed in writing to the Agent or the Lenders;
(If the above is not correct state the nature of such Event of
Default or Potential Default and the appropriate reference in
the Loan Agreement and provide particulars of steps being
taken to remedy or cure the Event of Default or Potential
Default.)
(b) based on the Borrower's quarterly interim Financial
Statements, in respect of the quarter ending immediately prior
to the date of this certificate (the "Quarter"):
(i) Consolidated Net Income and Interest Expense for the
Quarter were $ and $, respectively;
(ii) EBITDA for the Quarter and for the most recent four
quarters were $ and $, respectively;
(iii) Consolidated Tangible Net Worth as at the end of the
Quarter was $;
(iv) FX Gain/Loss as at the end of the Quarter was $, and
since the quarter ending March 31, 2004, is $.;
(v) Total Debt as at the end of the Quarter was $;
(vi) the Interest Coverage Ratio at the end of the Quarter
was ; and
(vii) the Debt/EBITDA Ratio for the most recent four
quarters was ;
(viii) the Debt/Capitalization Ratio as at the end of the
Quarter was $,
(c) for the Quarter:
(i) consolidated Debt of the Borrower and its Material
Subsidiaries secured by Permitted Encumbrances at the
end of the Quarter was $;
(ii) the value of property of the Borrower and its
Subsidiaries sold except as permitted by Section
17.5(b) during such Quarter was $; and
(iii) Debt permitted by Section 17.5(d)(iii) outstanding at
the end of the Quarter was $;
(Attached is an Addendum and the working papers showing the calculations and
details for paragraphs (b) and (c).)
I give this certificate in my capacity as an officer of the
Borrower and not in my personal capacity.
DATED at __________, British Columbia, this ____ day of
_______________, 20.
--------------------------------
Title:
2
ADDENDUM TO OFFICER'S CERTIFICATE DATED _____________
QUARTER ENDING: 12/31/03 03/31/04 06/30/04 09/30/04 12/31/04 03/31/05
-------- -------- -------- -------- -------- --------
(C$,000) Example
INTEREST COVERAGE RATIO Only
-----------------------
Net Sales $174,044
less: Cost of Products Sold -$143,287
Selling & Administration Expense -$7,688
plus: amortization & depreciation included above $0
realized FX gains (losses) from forest
products operations $2,419
other cash gains (losses) from forest
products operations
--------------------------------------------------------------------------------
EBITDA for the quarter $0 $0 $0 $0 $0 $0
--------------------------------------------------------------------------------
EBITDA for the last 12 months $25,488 $25,488 $25,488 $25,488 $0 $0
--------------------------------------------------------------------------------
$4,112
Interest on long term debt (as reported)
All other interest expense
less: interest income -$438
--------------------------------------------------------------------------------
Interest Expense for the quarter $3,674 $0 $0 $0 $0 $0
--------------------------------------------------------------------------------
Interest Expense for the last 12 months $3,674 $3,674 $3,674 $3,674 $0 $0
INTEREST COVERAGE RATIO 6.94X 6.94X 6.94X 6.94X #DIV/0! #DIV/0! #DIV
Covenant >2.00X >2.00X >2.00X >2.00X >2.00X >2.00X >2.0
TOTAL DEBT/TOTAL CAPITALIZATION
-------------------------------
Short Term Debt $0
Current Portion Long Term Debt $25,032
Long Term Debt $34,942
Capital Leases $0
Mortgages $0
Guarantees $0
Outstanding Letters of Credit / BA's $0
Other contingent liabilities
33 Add unrealized FX GAIN on debt (1)
34 Add PREVIOUS cumulative total unrealized FX
Gains
35 Deduct unrealized FX LOSS on debt (1)(enter
as a negative)
36 Deduct PREVIOUS cumulative total unrealized
FX Loss
--------------------------------------------------------------------------------
Total Debt $59,974 $0 $0 $0 $0 $0
Shareholders' Equity (as reported) $183,445
--------------------------------------------------------------------------------
Deduct cumulative unrealized FX GAIN on debt
(1)(2) -$8,121
--------------------------------------------------------------------------------
Add cumulative unrealized FX LOSS on debt
(1)(3) $0
--------------------------------------------------------------------------------
Equity $175,324
--------------------------------------------------------------------------------
Total Capitalization $243,419 $0 $0 $0 $0 $0
TOTAL DEBT/TOTAL CAPITALIZATION 28.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Covenant <60.0% <60.0% <60.0% <60.0% <60.0% <60.0% <60.0%
CONSOLIDATED TANGIBLE NET WORTH
-------------------------------
Net Earnings (loss) $17,501
Shareholders' Equity $183,445
less: Deferred Financing Costs -$404
Goodwill $0
Other Deferred Assets $0
Other Intangibles $0
--------------------------------------------------------------------------------
CONSOLIDATED TANGIBLE NET WORTH $183,041 $0 $0 $0 $0 $0
Covenant $168,751 $168,751 $168,751 $168,751 $168,751 $168,751
DEBT/EBITDA (FOR APPLICABLE MARGIN)
-----------------------------------
Short Term Debt
Current Portion Long Term Debt
Long Term Debt
Add cumulative unrealized FX GAIN on debt
(1)(4)
Deduct cumulative unrealized FX LOSS on debt
(1)(5)
less: Balance in Sinking Fund (appropriately
adjusted)
Debt
EBITDA for the last 12 months (as calculated
above)
DEBT/EBITDA
QUARTER ENDING: 06/30/05 09/30/05 12/31/05 03/31/06 06/30/06 09/30/06
(C$,000)
INTEREST COVERAGE RATIO
-----------------------
Net Sales
less: Cost of Products Sold
Selling & Administration Expense
plus: amortization & depreciation included above
realized FX gains (losses) from forest
products operations
other cash gains (losses) from forest
products operations
--------------------------------------------------------------------------------
EBITDA for the quarter $0 $0 $0 $0 $0 $0
--------------------------------------------------------------------------------
EBITDA for the last 12 months $0 $0 $0 $0 $0 $0
--------------------------------------------------------------------------------
Interest on long term debt (as reported)
All other interest expense
less: interest income
--------------------------------------------------------------------------------
Interest Expense for the quarter $0 $0 $0 $0 $0 $0
--------------------------------------------------------------------------------
Interest Expense for the last 12 months $0 $0 $0 $0 $0 $0
INTEREST COVERAGE RATIO #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Covenant 0X >2.00X >2.00X >2.00X >2.00X >2.00X
TOTAL DEBT/TOTAL CAPITALIZATION
-------------------------------
Short Term Debt
Current Portion Long Term Debt
Long Term Debt
Capital Leases
Mortgages
Guarantees
Outstanding Letters of Credit / BA's
Other contingent liabilities
33 Add unrealized FX GAIN on debt (1)
34 Add PREVIOUS cumulative total unrealized FX
Gains
35 Deduct unrealized FX LOSS on debt (1)(enter
as a negative)
36 Deduct PREVIOUS cumulative total unrealized
FX Loss
--------------------------------------------------------------------------------
Total Debt $0 $0 $0 $0 $0 $0
Shareholders' Equity (as reported)
--------------------------------------------------------------------------------
Deduct cumulative unrealized FX GAIN on debt
(1)(2)
--------------------------------------------------------------------------------
Add cumulative unrealized FX LOSS on debt
(1)(3)
--------------------------------------------------------------------------------
Equity
--------------------------------------------------------------------------------
Total Capitalization $0 $0 $0 $0 $0 $0
TOTAL DEBT/TOTAL CAPITALIZATION #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Covenant <60.0% <60.0% <60.0% <55.0% <55.0% <55.0%
CONSOLIDATED TANGIBLE NET WORTH
-------------------------------
Net Earnings (loss)
Shareholders' Equity
less: Deferred Financing Costs
Goodwill
Other Deferred Assets
Other Intangibles
--------------------------------------------------------------------------------
CONSOLIDATED TANGIBLE NET WORTH $0 $0 $0 $0 $0 $0
Covenant $168,751 $168,751 $168,751 $168,751 $168,751 $168,751
DEBT/EBITDA (FOR APPLICABLE MARGIN)
-----------------------------------
Short Term Debt
Current Portion Long Term Debt
Long Term Debt
Add cumulative unrealized FX GAIN on debt
(1)(4)
Deduct cumulative unrealized FX LOSS on debt
(1)(5)
less: Balance in Sinking Fund (appropriately
adjusted)
--------------------------------------------------------------------------------
Debt $0 $0 $0 $0 $0 $0
--------------------------------------------------------------------------------
EBITDA for the last 12 months (as calculated
above) $0 $0 $0 $0 $0 $0
DEBT/EBITDA #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
(1) Per Statement of Operations and Retained Earnings, starting with quarter
ending March 31, 2004
(2) Total of rows 33 and 34, multiplied by -1
(3) Total of rows 35 and 36, multiplied by -1
(4) Total of rows 33 and 34
(5) Total of rows 35 and 36
SCHEDULE C
BANK CREDIT FACILITIES,
THIRD PARTY DEBT INSTRUMENTS,
LETTERS OF CREDIT AND HEDGING CONTRACTS
---------------------------------------
I. CREDIT FACILITIES TO BE CANCELLED ON CLOSING DATE
A. RIVERSIDE FOREST PRODUCTS LIMITED
1. Series B-D Notes: US $30,111,102 plus interest and a "make-whole"
premium.
2. US $25 million loan facility with HSBC Bank Canada.
B. RFP POWER LTD.
1. $25 million loan facility with HSBC Bank Canada.
C. LIGNUM LIMITED ("LIGNUM")
1. $500,000 overdraft facility with The Bank of Nova Scotia.
2. HSBC facilities:
(a) $28 million loan facility with HSBC Bank Canada.
(b) $500,000 demand loan facility with HSBC to finance capital
expenditures (no outstanding balance).
(c) Foreign Exchange Facility (no outstanding contracts).
(d) $6 million non-revolving demand loan to fund a special
dividend ($4,445,387.34 balance outstanding)
II. CREDIT FACILITIES TO REMAIN AFTER CLOSING DATE
A. EXISTING LETTERS OF CREDIT
1. Issued on Behalf of
THE BORROWER BY HSBC BANK CANADA
HSBC Bank Canada currently holds indemnities for each Letter of Credit
described below and a trade finance general agreement. The provisions
of the Loan Agreement shall prevail over these documents. In all other
respects, they are hereby confirmed by Riverside Forest Products
Limited and HSBC Bank Canada.
TYPE CCY O/S AMOUNT START DUE
---- --- ---------- ----- ---
GTE CAD 496.05 02 Mar 04 01 Mar 05
GTE CAD 20,000.00 15 Mar 04 14 Mar 05
GTE CAD 5,000.00 15 Mar 04 14 Mar 05
GTE CAD 25,000.00 15 Mar 04 14 Mar 05
GTE CAD 181,700.00 15 Mar 04 14 Mar 05
GTE CAD 72,633.00 01 Apr 03 31 Mar 05
GTE CAD 84,901.00 01 Apr 03 31 Mar 05
GTE CAD 37,280.00 01 Apr 03 31 Mar 05
GTE CAD 36,820.00 01 Apr 03 31 Mar 05
GTE CAD 19,517.00 01 Apr 03 31 Mar 05
GTE CAD 41,025.00 01 Apr 03 31 Mar 05
GTE CAD 90,000.00 01 Apr 03 31 Mar 05
GTE CAD 55,000.00 01 Apr 03 31 Mar 05
GTE CAD 15,000.00 01 Apr 03 31 Mar 05
GTE CAD 9,139.00 01 Apr 03 31 Mar 05
GTE CAD 5,786.00 01 Apr 03 31 Mar 05
GTE CAD 27,478.00 01 Apr 03 31 Mar 05
2. Issued on Behalf of
RFP POWER LTD. BY HSBC BANK CANADA
TYPE CCY O/S AMOUNT START DUE
---- --- ---------- ----- ---
GTE CAD $290,400.00 07 Jul 03 06 Jul 04
3. Issued on Behalf of
LIGNUM BY HSBC BANK CANADA
TYPE CCY O/S AMOUNT START DUE
---- --- ---------- ----- ---
GTE CAD $368,700.00 10 May 01 10 May 04
2
B. HEDGING CONTRACTS
1. Existing Hedging Program Contracts -- Riverside Forest Products
Limited / HSBC Bank Canada
2. Existing Unsecured Financial Instrument Obligations -- Lignum / The
Bank of Nova Scotia
C. CORPORATE CREDIT CARD
1. Indemnity Agreement between HSBC Bank Canada and Riverside Forest
Products Limited, dated November 22, 1999.
2. $250,000 limit.
3
SCHEDULE D
ADDRESSES
---------
BORROWER AND MATERIAL SUBSIDIARIES:
Riverside Forest Products Limited
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
ATTENTION: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LIGNUM LIMITED, RFP POWER LTD. OR RFP TIMBER LTD.:
c/o Riverside Forest Products Limited
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
ATTENTION: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDERS:
Bank of Montreal
Suite 1800, 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
ATTENTION: Vice-President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
HSBC Bank Canada
Xxxxx 000, 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
ATTENTION: Vice-President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGENT:
Bank of Montreal
Global Distribution Canada, Financial Services
00xx Xxxxx, Xxxxx Xxxxxxxx Xxxxx
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
ATTENTION: Manager/Officer, Global Distribution Servicing
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
FOR FINANCIAL DISTRIBUTION:
Bank of Montreal
Global Distribution Canada, Financial Services
0xx Xxxxx, Xxxxx Xxxxxxxx Xxxxx
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
ATTENTION: Deal Specialist, Global Distribution Servicing
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
HEDGING LENDERS:
Bank of Montreal
Suite 1800, 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
ATTENTION: Vice-President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
HSBC Bank Canada
Suite 500, 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
ATTENTION: AVP Treasury
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
2
SCHEDULE E
ASSIGNMENT AGREEMENT
--------------------
THIS ASSIGNMENT AGREEMENT made as of the ___ day of __________ , 20__
BETWEEN:
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME NAMED AS LENDERS ON THE
SIGNATURE PAGE OF A CERTAIN LOAN AGREEMENT DATED MARCH 31, 2004,
BETWEEN THEM, THE BORROWER, THE HEDGING LENDERS AND THE AGENT
(collectively the "Lenders" and individually a "Lender")
AND:
______________________________________________________
(the "Assignor")
AND:
______________________________________________________
(the "Assignee")
AND:
BANK OF MONTREAL, as administrative agent
(in such capacity the "Agent")
WHEREAS:
A. Riverside Forest Products Limited (the "Borrower"), the Hedging Lenders
(as defined herein), the Lenders (including the Assignor) and the Agent entered
into an agreement (hereinafter called the "Loan Agreement") dated March 31,
2004, pursuant to which the Lenders agreed to make available to the Borrower a
credit facility of up to $60 million Canadian Dollars on the terms and
conditions therein set out; and
B. Pursuant to Section 22.3 of the Loan Agreement the Assignor wishes to
assign (all/a portion) of its Revolving Facility Commitment and Percentage Loan
Commitment to the Assignee.
WITNESSES THAT in consideration of the premises and of the agreements
hereinafter set forth and of other consideration, (the receipt and sufficiency
of which is hereby acknowledged) the parties agree as follows:
1. Terms and expressions used in this Agreement which are defined in the
Loan Agreement have the meaning given therein.
2. The Assignor hereby assigns and transfers to the Assignee all of the
Assignor's rights and obligations under the Loan Documents to the extent of Cdn.
$ of its Revolving Facility Commitment and % of its Percentage Loan Commitment
(such assigned rights and obligations being hereinafter called the "Assigned
Rights").
3. The Assignee hereby accepts the assignment and transfer of the Assigned
Rights from the Assignor and hereby acquires and assumes as its Revolving
Facility Commitment and Percentage Loan Commitment the following:
Revolving Facility Commitment Cdn. $________
Percentage Loan Commitment _____%
4. Contemporaneously herewith the Assignee shall be deemed to have
executed and to have been named on the signature pages of the Loan Agreement and
any other Loan Document executed by the Lenders and Schedule H to the Loan
Agreement shall be deemed to have been amended accordingly.
5. The Assignee agrees to be bound by all of the terms of the Loan
Documents and, to the extent of its Revolving Facility Commitment and Percentage
Loan Commitment, hereby assumes all of the obligations of the Assignor under the
Loan Documents as at the date hereof, including, without limitation, the
appointment of the Agent as agent for the Assignee with the rights, duties and
responsibilities set out in the Loan Documents.
6. The Assignee agrees to pay to the Agent the fee specified in Section
22.3(d) of the Loan Agreement.
7. Without limiting the generality of this Agreement, the Lenders, other
than the Assignor, the Agent and the Assignee, in the case of the Loan
Documents, hereby assume obligations and acquire rights in respect of each other
which differ from the Assigned Rights
2
only insofar as the obligations assumed and the rights acquired are owed to, and
constituted by claims against, the Assignee and not the Assignor.
8. The Agent, the Lenders, other than the Assignor, and the Assignee
acknowledge and agree that they shall have the same rights and obligations among
themselves that they would have acquired and assumed had the Assignee been an
original party to the Loan Documents with the additional obligations assumed and
rights acquired as a result of the assignment and transfer provided for herein.
9. The Assignee acknowledges and confirms that it has not relied upon, and
that none of the Agent nor any other Lender has made, any representation or
warranty whatsoever as to the due execution, legality, effectiveness, validity
or enforceability of the Loan Documents or any other documentation or
information delivered by the Assignor or the Agent to the Assignee in connection
therewith or for the performance thereof by any party thereto or for the
financial condition of the Borrower and any Subsidiary. All representations,
warranties and conditions expressed or implied by law or otherwise are hereby
excluded.
10. The Assignee represents and warrants to the other parties hereto that
it has the power and capacity to enter into this Agreement and to observe and
perform its obligations arising herefrom and that the execution and delivery of
this Agreement and the observance and performance of such obligations has been
duly authorized.
As from the date of this Agreement the Assignee shall be and shall be
deemed to be for all purposes a Lender under the Loan Documents as if it had
been an original party thereto.
12. This Agreement shall be governed by and construed in accordance with
the laws of British Columbia and for the purpose of legal proceedings this
Agreement shall be deemed to have been made in such Province and to be performed
there.
13. This Agreement may be executed in any number of counterparts and by
facsimile signature and all such counterparts taken together shall be deemed to
constitute one and the same instrument and a facsimile signature shall have the
same force and effect as an original signature.
14. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their permitted successor and assigns.
3
IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto.
EXECUTED by the LENDERS, by their agent
the Agent pursuant to Section 22.3 of
the Loan Agreement on the ____ day
of _______________, 20__.
Per:
---------------------------------
EXECUTED by (INSERT NAME OF ASSIGNOR) on
the ____ day of _____________, 20__.
Per:
---------------------------------
EXECUTED by (INSERT NAME OF ASSIGNEE) on
the ____ day of _____________, 20__.
Per:
---------------------------------
EXECUTED by BANK OF MONTREAL in its
capacity as Agent on the _____ day
of _______________, 20__.
Per:
---------------------------------
4
SCHEDULE F
MATERIAL SUBSIDIARIES
---------------------
Lignum Limited
RFP Power Ltd.
RFP Timber Ltd.
SCHEDULE G
FORM OF GUARANTEE
FROM MATERIAL SUBSIDIARY
------------------------
THIS AGREEMENT dated the day of , 20.
BETWEEN:
_____, _____, V_____
Facsimile No. (___) _______________
(the "Guarantor")
AND:
THE SEVERAL PERSONS FROM TIME TO TIME NAMED AS LENDERS PURSUANT TO THAT
CERTAIN LOAN AGREEMENT DATED MARCH 31, 2004 between them, Riverside
Forest Products Limited, Bank of Montreal in its capacity as a Hedging
Lender, HSBC Bank Canada in its capacity as a Hedging Lender and Bank
of Montreal, in its capacity as Agent
(the "Lenders")
AND:
BANK OF MONTREAL, as a Hedging Lender
(in such capacity, a "Hedging Lender")
AND:
HSBC BANK CANADA, as a Hedging Lender
(in such capacity, a "Hedging Lender")
AND:
BANK OF MONTREAL, Global Distribution Canada, Financial Services, 00xx
Xxxxx, Xxxxx Xxxxxxxx Xxxxx, 000 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx,
X0X 0X0, in its capacity as Agent Facsimile No. (000) 000-0000
(the "Agent")
BACKGROUND:
A. Pursuant to an agreement (the "Loan Agreement") dated March 31, 2004,
the Lenders agreed to make available to Riverside Forest Products Limited (the
"Debtor") a credit facility (the "Credit Facility") of up to $60 million;
B. The Hedging Lenders may (but are under no obligation to) make available
a Hedging Program (as defined in the Loan Agreement); and
C. The Lenders agreed to make available the Credit Facility on condition,
among other things, that the Guarantor execute and deliver this Agreement.
WITNESSES that in consideration of the matters mentioned in the
Recitals and of other consideration (the receipt and sufficiency of which is
hereby acknowledged by the Guarantor), the parties agree as follows:
1.0 INTERPRETATION
1.1 In this Agreement, unless otherwise defined or unless the context
otherwise requires:
"AGREEMENT" means this guarantee agreement as amended, modified,
varied, supplemented, restated or replaced from time to time.
"DEBTOR'S OBLIGATIONS" has the meaning given by Section 2.1.
"GUARANTOR INDEBTEDNESS" means all indebtedness and liabilities,
present and future, direct and indirect, absolute or contingent,
whether principal or interest, royalties, fees or otherwise, of the
Debtor to the Guarantor.
"GUARANTOR OBLIGATIONS" has the meaning given by Section 3.1.
"GUARANTOR SECURITIES" means any and all security now or hereafter
taken or held by the Guarantor or any person on its behalf from the
Debtor or any other person in connection with the Guarantor
Indebtedness and includes any mortgage, charge, lien, pledge, security
interest or encumbrance and any amendment, variation, replacement or
supplemental thereto or renewal thereof and also includes the real or
personal property (if any) to which the security relates.
2
"LENDERS" includes the Issuing Bank and the Swingline Lender, each as
defined in the Loan Agreement.
"LOAN AGREEMENT" has the meaning given in Recital A.
"LOAN DOCUMENTS" has the meaning given by the Loan Agreement.
"SECURITIES" means any and all security now or hereafter taken or held
by the Lenders or the Hedging Lenders or any person on their behalf
from the Guarantor or the Debtor or any other person in connection with
the Debtor's Obligations and includes any mortgage, charge, lien,
pledge, security interest or encumbrance and any amendment, variation,
replacement or supplemental thereto or renewal thereof and also
includes the real or personal property (if any) to which the security
relates.
"TAXES" means all present and future taxes, levies, imposts,
deductions, charges, and withholdings whatsoever together with interest
thereon and penalties with respect thereto, if any, and any payments
made on or in respect thereof, including, without limitation and
notwithstanding the remaining part of this definition, taxes and
withholdings levied or imposed or due pursuant to Part XIII of the
INCOME TAX ACT (Canada), but shall not include franchise taxes, branch
profits taxes and taxes imposed on or measured by a Lender's or a
Hedging Lender's income or receipts or minimum tax in lieu thereof,
taxes imposed on or measured by a Lender's or a Hedging Lender's
capital, federal large corporations tax levied or assessed against a
Lender or a Hedging Lender or other taxes of general application levied
or assessed against a Lender or a Hedging Lender and interest thereon
and penalties with respect thereto.
1.2 References to the Guarantor and the Debtor include their respective
successors and permitted assigns.
1.3 References to the Lenders, the Hedging Lenders and the Agent include
their respective successors and assigns.
1.4 References to winding-up or bankruptcy include winding-up, liquidation,
dissolution and the placing of the corporation or person under official
management or receivership, order, arrangement, proposal or other similar
proceedings.
3
1.5 References to facilities and financial accommodation (including,
without limitation, the Credit Facility, a Hedging Program and the Loan
Documents) include such facilities and financial accommodation as may be
amended, varied, consolidated, replaced, renewed, restated, extended, increased
or decreased from time to time.
1.6 References to Sections, subsections and paragraphs are references to
sections, subsections and paragraphs of this Agreement.
1.7 Unless the context otherwise requires, words, importing the singular
include the plural and vice versa and words importing any gender include every
gender.
2.0 GUARANTEE
2.1 The Guarantor hereby unconditionally guarantees to the Lenders and the
Agent:
(a) the due and punctual payment by the Debtor of every
indebtedness and liability, present and future, direct or
indirect, absolute or contingent, matured or unmatured, of the
Debtor to the Lenders, the Hedging Lenders and the Agent, and
each of them, relating to or arising out of the Credit
Facility, a Hedging Program and the Loan Documents, as the
case may be, with the intent that should the Debtor default in
the due and punctual payment of such indebtedness or liability
or any part or parts thereof, the Guarantor shall pay such
indebtedness and liability immediately on demand to the
Lenders, the Hedging Lenders and the Agent, and each of them,
as the case may be; and
(b) the due and punctual observance and performance by the Debtor
of all its other liabilities, obligations and agreements,
present and future, direct or indirect, absolute or
contingent, matured or unmatured, to the Lenders, the Hedging
Lenders and the Agent, and each of them, relating to or
arising out of the Credit Facility, a Hedging Program and the
Loan Documents, as the case may be, which cannot be performed
by payment under paragraph (a) above with the intent that
should the Debtor make default or fail in the performance or
observance of any such liabilities, obligations and
agreements, the Guarantor shall indemnify the Lenders, the
Hedging Lenders, and the Agent, and each of them, as the case
may be, against all losses, damages, costs and expenses which
may be incurred, suffered or sustained by the Lenders, the
Hedging Lenders and the Agent and each of them, as the case
may be, by reason of such default or failure on the part of
the Debtor and shall pay to the Lenders, the Hedging Lenders
and the Agent and each of them, as the case may be, on demand
all such losses, damages, costs
4
and expenses which the Lenders, the Hedging Lenders and the
Agent, and each of them, as the case may be, may incur, suffer
or sustain as a result thereof, including, without limitation,
any funding losses, indemnities and fees and expenses of
counsel whenever and as often as such default or failure shall
occur,
(all of which indebtedness, liabilities, obligations and agreements specified in
this Section 2.1 are hereinafter referred to as the "Debtor's Obligations").
2.2 The guarantee of the Debtor's Obligations pursuant to Section 2.1 is a
continuing guarantee and shall be irrevocable and remain in full force and
effect until the whole of the Debtor's Obligations have been paid or satisfied.
3.0 GUARANTOR OBLIGATIONS
3.1 Notwithstanding anything herein to the contrary and without prejudice
to the rights or remedies of the Lenders, the Hedging Lenders and the Agent, as
the case may be, against the Debtor as principal debtor, as between the
Guarantor on the one hand and the Lenders, the Hedging Lenders and the Agent, as
the case may be, on the other, the Guarantor's guarantee of the Debtor's
Obligations pursuant to Section 2.1 (hereinafter referred to as the "Guarantor
Obligations") is a principal obligation and not merely the obligation of a
surety and the Lenders, the Hedging Lenders and the Agent, as the case may be,
shall not be required to proceed against the Debtor, exhaust any remedies they
may have against the Debtor or enforce any of the Securities but shall be
entitled to demand and receive payment and performance from the Guarantor when
any payment or performance is due under this Agreement.
3.2 If an Event of Default (as defined in the Loan Agreement) occurs, and
if (a) the Agent shall make demand for payment of the Debtor's Obligations or
(b) the Agent shall declare the Debtor's Obligations to be due and payable, the
Guarantor as a primary obligor and not merely as surety shall forthwith, on
demand by the Agent, pay to the Agent, for and on behalf of the Lenders, the
Hedging Lenders and the Agent the full amount of the Debtor's Obligations due
and payable (by acceleration or otherwise) by the Debtor. Any and all such
payments shall be final and shall be free from any claim, counterclaim or
defence of the Guarantor against the Lenders, the Hedging Lenders and the Agent.
The guarantee of the Debtor's Obligations pursuant to Section 2.1 is a guarantee
of payment and not merely of collection. The Guarantor hereby waives all
defences of a surety to which it may be entitled by statute or otherwise.
5
3.3 Notwithstanding anything herein to the contrary, the obligations of the
Guarantor under this Agreement shall be absolute and unconditional in any and
all circumstances and the liability of the Guarantor under this Agreement shall
not be abrogated, prejudiced, discharged or otherwise affected by any fact,
circumstance or thing whatsoever which, but for the provisions of this
Agreement, would or might operate to abrogate, prejudice, discharge or otherwise
affect the obligations of the Guarantor under this Agreement, including, without
limitation, any one or more of the following (whether or not any such matter,
fact or thing was or should have been known to the Lenders, the Hedging Lenders
and the Agent, or any of them, before any of the Debtor's Obligations were
incurred):
(a) any release, discharge, relinquishment, amendment, increase,
decrease, compounding, abandonment, transfer, assignment,
waiver or other variation of the Debtor's Obligations, the
Loan Documents or the Securities or other arrangements now or
from time to time hereafter in force between the Lenders, the
Hedging Lenders, the Agent and the Debtor or the replacement
of any such obligations or arrangements with new obligations
or arrangements, whether with or without the consent of the
Guarantor, including, without limitation, any increase in the
amount of the Debtor's Obligations (including an increase in
the authorized amount of the Credit Facility or a Hedging
Program), the variation in the time or method of payment, the
increase or variation in any fee or interest rate, the
variation of the method of calculation of any fee or interest
rate, or any increase in costs, fees, expenses or outgoings;
or
(b) the granting of time, credit or any other indulgence or
concession to the Debtor by the Lenders, the Hedging Lenders
or the Agent, whether with or without the consent of the
Guarantor; or
(c) any judgment or rights which the Lenders or the Agent may have
or exercise against the Debtor; or
(d) the whole or any part of the Credit Facility, a Hedging
Program, the Loan Documents or any of the Securities being or
becoming wholly or partially illegal, void, voidable or
unenforceable, whether by reason of any statute (including but
not limited to any statute of limitation) or for any other
reason whatsoever; or
(e) the Lenders, the Hedging Lenders or the Agent becoming a party
to or becoming bound by any compromise of debts, assignments
of property, scheme of arrangement or scheme of reconstruction
by or relating to the Debtor or the
6
Guarantor or their respective affairs or the acceptance by the
Lenders, the Hedging Lenders or the Agent of any sum of money
thereunder; or
(f) the insolvency, winding-up or bankruptcy of the Debtor or the
Guarantor or the reconstruction, reorganization, amalgamation,
merger or absorption of the Debtor or the Guarantor; or
(g) the failure by the Lenders, the Hedging Lenders or the Agent
to take or obtain any security from the Debtor, the Guarantor
or any other person whether in respect of the Debtor's
Obligations or the Guarantor Obligations or otherwise; or
(h) any assignment or transfer by any Lender or the Agent of the
benefit of and rights under this Agreement, the Credit
Facility, the Loan Documents or the Securities; or
(i) the granting of any security by the Guarantor, the Debtor or
any other person to the Lenders, the Hedging Lenders or the
Agent or the fact that any negotiable or other instrument is
still in circulation or outstanding; or
(j) the fact that any of the Securities may be issued after the
execution of this Agreement; or
(k) the Lenders, the Hedging Lenders or the Agent failing to
perfect, register or maintain perfection or registration of
any of the Securities; or
(l) in the event the Debtor or the Guarantor is a trustee, a
breach of trust by the same; or
(m) the fact that the Debtor may enter into transactions with or
incur obligations to the Lenders, the Hedging Lenders or the
Agent without the consent of or notice to the Guarantor; or
(n) any person becoming or not becoming a guarantor of the
Debtor's Obligations or any part thereof; or
(o) any change in the membership of any partnership or firm of
which the Debtor or the Guarantor is a member; or
(p) the failure by any Lender to make an advance under the Credit
Facility or by a Hedging Lender to enter into a Hedging
Program or a Hedging Program Contract.
7
3.4 The obligations of the Guarantor under this Agreement are in addition
to and not in substitution for the Securities and such security may be treated
as being independent of this Agreement and may be enforced by the Lenders and
the Hedging Lenders in their absolute discretion without first having recourse
to this Agreement.
3.5 The Lenders and the Hedging Lenders may release or otherwise deal with
any of the Securities without releasing or affecting the obligations of the
Guarantor under this Agreement and the Guarantor shall not hold the Lenders, the
Hedging Lenders or the Agent responsible or liable for any loss or damage
howsoever suffered by the Guarantor as a result of any such release or dealing
(including, without limitation, any prejudice to or loss of any rights of
subrogation) or for any loss by the Lenders, the Hedging Lenders or the Agent of
any such security or by the Lenders, the Hedging Lenders or the Agent failing or
neglecting to recover, by the realization of any such security or otherwise, any
monies owing or to become owing to the Lenders, the Hedging Lenders or the Agent
by the Debtor or by any negligence, laches or mistakes on the part of the
Lenders, the Hedging Lenders or the Agent.
3.6 This Agreement shall not prejudicially affect or be prejudicially
affected by any other security now or hereafter held by the Lenders, the Hedging
Lenders or the Agent, for and on behalf of the Lenders and the Hedging Lenders
for the Debtor's Obligations.
3.7 The obligations of the Guarantor under this Agreement shall continue to
be effective or shall be reinstated, as the case may be, if at any time payment
of any of the Debtor's Obligations or of any monies payable under this Agreement
are avoided or must be repaid or restored, either in whole or in part, by the
Lenders, the Hedging Lenders or the Agent to the Debtor or to the Guarantor by
reason of preference or for any other reason whatsoever and the obligations of
the Guarantor under this Agreement shall extend to all such monies and any such
payment shall be deemed not to have discharged the Debtor's Obligations or the
Guarantor Obligations and the Lenders, the Hedging Lenders and the Agent shall
have the same rights against the Guarantor as if such payment had not been made.
8
4.0 INDEMNITY
4.1 Notwithstanding anything herein to the contrary, if the whole or any
part of the Debtor's Obligations are not or may not be recovered from the Debtor
by the Lenders, the Hedging Lenders and the Agent for any reason whatsoever,
including, without limitation, by reason of:
(a) any legal limitation, disability or incapacity of or affecting
the Debtor personally or in the capacity in which it was or is
purporting to act;
(b) any of the transactions relating to the Debtor's Obligations
or the whole or any part of any of the Loan Documents or any
documents under a Hedging Program being or becoming wholly or
partially illegal, void, voidable or unenforceable for any
reason whatsoever (whether or not any of the matters or facts
relating thereto have been or ought to have been within the
knowledge of any of the Lenders, the Hedging Lenders or the
Agent); or
(c) any other fact, matter or thing whereby the whole or any part
of the Debtor's Obligations are not recoverable by the
Lenders, the Hedging Lenders or the Agent from the Guarantor
as surety,
then, and in any such case, the Guarantor, as a separate and additional
obligation under this Agreement, hereby agrees to indemnify the Lenders, the
Hedging Lenders and the Agent, and each of them, in respect of the amount of
monies (whether present or future, direct or indirect, absolute or contingent,
matured or unmatured) which, if the Debtor's Obligations had been recoverable,
would be due to the Lenders, the Hedging Lenders and the Agent, and each of
them, as the case may be, by the Debtor and the Guarantor agrees with the
Lenders, the Hedging Lenders and the Agent to pay to the Lenders, the Hedging
Lenders and the Agent, and each of them, as the case may be, on demand an amount
equal to such monies.
5.0 SUBORDINATION
5.1 The Guarantor hereby postpones and subordinates the Guarantor
Indebtedness to and in favour of the Debtor's Obligations to the extent provided
for in this Agreement.
5.2 If an Event of Default occurs the Guarantor shall not accept or receive
payment of any amount of the Guarantor Indebtedness from the Debtor, from
realization of the Guarantor Securities or from any other source unless and
until the Lenders, the Hedging Lenders and the Agent have received payment in
full of the Debtor's Obligations.
9
5.3 Until the Lenders, the Hedging Lenders and the Agent have received one
hundred cents on the dollar in respect of the Debtor's Obligations, the
Guarantor shall not, on any grounds whatsoever, either directly or indirectly:
(a) prove or claim in competition to the Lenders, the Hedging
Lenders and the Agent so as to diminish any distribution,
dividend or payment which, but for such proof or claim, the
Lenders, the Hedging Lenders and the Agent would be entitled
to receive pursuant to the winding-up or bankruptcy of the
Debtor and the receipt of any such distribution, dividend or
other payment by the Lenders and the Agent pursuant to any
such winding-up or bankruptcy shall not prejudice the right of
the Lenders, the Hedging Lenders and the Agent to recover the
whole of the Debtor's Obligations from the Guarantor; and
(b) claim or receive the benefit of any distribution, dividend or
payment arising out of or relating to the winding-up or
bankruptcy of the Debtor.
5.4 If winding-up or bankruptcy proceedings are commenced against the
Debtor, the Guarantor authorizes the Agent to:
(a) prove for all monies for which the Debtor is liable to the
Guarantor, including any monies which the Guarantor has paid
hereunder, and
(b) retain and carry on a separate account and appropriate at the
Agent's discretion any distribution, dividend or payment
received until the Lenders, the Hedging Lenders and the Agent
have, with the aid thereof, been paid in full in respect of
the Debtor's Obligations.
5.5 In the event the Guarantor receives any amount in respect of the
Guarantor Indebtedness from the Debtor, from realization of the Guarantor
Securities or from any other source, in each case contrary to the provisions of
this Agreement, the Guarantor shall pay such amount over to the Agent unless, at
the time of receipt thereof by the Guarantor, the Debtor's Obligations have been
paid in full.
5.6 The Guarantor shall not take any Guarantor Securities.
5.7 Notwithstanding any provision of the Guarantor Securities or otherwise,
the Guarantor shall not, without the prior written consent of the Agent,
commence any legal or other
10
proceedings to collect or recover the Guarantor Indebtedness or commence
realization of the Guarantor Securities until the Debtor's Obligations have been
paid in full. Without limiting the foregoing, the Guarantor shall not, without
the prior written consent of the Agent, commence a suit against the Debtor,
effect the issue of a petition in bankruptcy against the Debtor or a proposal or
arrangement in respect of the Debtor's debts and liabilities, appoint a receiver
or receiver manager of all or any part of the property and assets of the Debtor
or apply to a Court for the appointment of a receiver or receiver manager of all
or any part of the property and assets of the Debtor until the Debtor's
Obligations have been paid in full. The Agent shall not unreasonably withhold
such consent if the Lenders and the Hedging Lenders have then commenced any
action or taken any proceedings against the Debtor to collect or recover the
Debtor's Obligations or to realize on the Securities.
5.8 The Guarantor shall not take any action to challenge or otherwise
prejudice the rights and benefits of the Lenders, the Hedging Lenders and the
Agent under the Loan Documents, a Hedging Program or Securities, or the priority
thereof.
5.9 The Guarantor shall not, without the prior written consent of the
Agent, assign the Guarantor Indebtedness or the Guarantor Securities, or any
part or parts of either, to any Person and, in any event, unless such assignee
first agrees with the Agent, by an agreement in form and substance satisfactory
to it, to comply with and be bound by the provisions of this Agreement.
Notwithstanding any such assignment the Guarantor shall not be relieved of its
obligations under this Agreement.
5.10 The provisions of this Agreement, including, without limitation, the
subordination and postponements contained herein, shall not be prejudiced or
affected by the respective dates:
(a) on which the Debtor's Obligations or the Guarantor
Indebtedness, or any part of either, were incurred or notice
thereof was given in any manner;
(b) of execution, delivery, registration or perfection of the
Securities and the Guarantor Securities; or
(c) of default in payment of the Debtor's Obligations and the
Guarantor Indebtedness or the respective dates of commencement
of realization of the Securities and the Guarantor Securities,
including the respective dates of crystallization of any
floating charge contained in the Securities or the Guarantor
Securities.
11
5.11 The Lenders, the Hedging Lenders and the Agent shall be under no
obligation to xxxxxxxx in favour of the Guarantor any of the Securities or any
funds or assets that the Lenders, the Hedging Lenders and the Agent may be
entitled to receive or have a claim upon.
5.12 The Guarantor shall not be entitled, on any grounds whatsoever, to
claim the benefit of, or to participate in, any of the Securities until the
whole of the Debtor's Obligations have been paid or satisfied and the Guarantor
shall not be entitled to call on the Lenders, the Hedging Lenders or the Agent,
to xxx or take proceedings against the Debtor or the Guarantor, whether or not
the whole of the Debtor's Obligations have been paid or satisfied.
5.13 The Guarantor shall not be entitled to recover or make any claim for
any amount paid under this Agreement or to enforce rights which may accrue to it
(whether by way of indemnity, set-off, counterclaim, subrogation or otherwise)
until the whole of the Debtor's Obligations have been paid or satisfied. All
monies actually received by the Lenders and the Agent and which the Lenders, the
Hedging Lenders and the Agent retain without there being any arguable claim
thereto and charged by the Lenders, the Hedging Lenders and the Agent in
reduction or on account of the Debtor's Obligations shall be regarded as
payments in gross and the Guarantor shall not be entitled to stand in the place
of the Lenders, the Hedging Lenders and the Agent in respect of or to claim the
benefit of any money so received until the whole of the Debtor's Obligations
have been paid or satisfied.
6.0 PAYMENTS AND COSTS
6.1 The Guarantor shall pay to the Agent on demand all costs and expenses
(including reasonable legal fees and expenses) which may be incurred by the
Lenders, the Hedging Lenders and the Agent, or any of them, in the preservation
of the Guarantor Obligations and the enforcement by the Lenders, the Hedging
Lenders or the Agent, as the case may be, of any of their respective rights and
powers under this Agreement.
6.2 The Guarantor agrees that a certificate signed by or on behalf of the
Agent stating the amount or amounts due by the Debtor or the Guarantor on any
account whatsoever shall be PRIMA FACIE evidence of the facts stated therein.
6.3 All payments to be made by the Guarantor hereunder shall be made:
(a) without set-off or counterclaim; and
12
(b) free and clear of and without deduction for or on account of
any present or future Taxes unless the Guarantor is compelled
by law to make payment subject to such Taxes.
6.4 All Taxes in respect of matters relating to or arising out of this
Agreement and any amounts paid or payable hereunder shall be paid by the
Guarantor when due and in any event prior to the date on which penalties attach
thereto. The Guarantor will indemnify each of the Lenders, the Hedging Lenders
and the Agent in respect of all such Taxes. In addition, if any Taxes or amounts
in respect thereof must be deducted from any amounts payable or paid by the
Guarantor under this Agreement, the Guarantor shall pay such additional amounts
as may be necessary to ensure that after all required deductions or withholdings
(including the deductions or withholdings resulting from the additional amounts
payable by reason of this Section 6.4) the Lenders, the Hedging Lenders and the
Agent receive a net amount equal to the full amount which they would have
received had payment not been made subject to such Tax. Notwithstanding the
foregoing, unless an Event of Default has occurred the Guarantor shall not be
required to indemnify a Lender or a Hedging Lender or pay a Lender or a Hedging
Lender for any Taxes deducted or withheld by reason of the fact that a Lender is
a non-resident of Canada.
6.5 The Guarantor shall deliver to the Agent evidence satisfactory to it
(including all relevant Tax receipts) that any payment by the Guarantor of or in
respect of Taxes in respect of matters relating to or arising out of this
Agreement has been duly remitted to the appropriate authority, within 10 days of
receipt of a written request by the Agent to do so.
6.6 If any amount payable under this Agreement or in connection with the
Securities is not paid as and when due the Guarantor authorizes each of the
Agent and each Lender and the Hedging Lender to proceed, to the fullest extent
permitted by applicable law, without prior notice, by right of combination,
set-off, consolidation, banker's lien or counteraction, against any assets of
the Guarantor in any currency that may at any time be in the possession of a
Lender and a Hedging Lender or an Agent at any branch or office, to the full
extent of all amounts payable to the Lenders and the Hedging Lenders hereunder.
Any Lender or Hedging Lender that so proceeds shall forthwith give notice to the
Agent and the Guarantor.
7.0 SUCCESSOR CORPORATION
7.1 The Guarantor shall not enter into any transaction or series of
transactions whether by way of reconstruction, reorganization, recapitalization,
consolidation, amalgamation, merger, transfer, sale or otherwise, whereby all or
substantially all of its undertakings, property and assets would become the
property of
13
any other person (hereinafter called a "Successor Person"), unless:
(a) the Successor Person is the Debtor or a wholly-owned
subsidiary of the Debtor;
(b) prior to or contemporaneously with the consummation of such
transaction the Guarantor and the Successor Person shall have
executed such instruments and done such things as are
satisfactory to the Agent, in the opinion of counsel to the
Agent, or necessary or advisable to establish that upon the
consummation of such transaction the Successor Person will
have assumed all the covenants and obligations (present and
future) of the Guarantor under this Agreement and under any
Security given by the Guarantor;
(c) such transaction shall, to the satisfaction of the Agent and
its counsel, acting reasonably, be upon such terms as
substantially to preserve and not impair or prejudice any of
the rights, powers and interests of the Lenders, the Hedging
Lenders and the Agent under this Agreement and under any
Security given by the Guarantor; and
(d) no condition or event exists either at the time of such
transaction or immediately after the reconstruction,
reorganization, recapitalization, consolidation, amalgamation,
merger, transfer, sale or other transaction and after giving
full effect thereto or immediately after the Successor Person
complies with the provisions of Section 7.1(b) which would
result in the occurrence of an Event of Default or Potential
Default (each as defined in the Loan Agreement).
7.2 Whenever the conditions of Section 7.1 hereof shall have been duly
observed and performed the Successor Person shall possess and from time to time
may exercise each and every right and power of the Guarantor under this
Agreement in the name of the Guarantor or otherwise and any act or proceeding by
any provision hereof required to be done or performed by any directors or
officers of the Guarantor may be done and performed with like force and effect
by all like directors or officers of the Successor Person.
8.0 WAIVER AND ENFORCEMENT OF RIGHTS
8.1 Any party may from time to time and at any time:
(a) waive in whole or in part the benefit to it of any of the
provisions of any Section in this Agreement; or
14
(b) waive in whole or in part its rights on any default under any
Section in this Agreement which is to its benefit,
but any such waiver by any party of such benefit or right on any occasion shall
be deemed not to be a waiver of the benefit of or right under any such Section
thereafter or of any other Section or of any subsequent default, as the case may
be.
8.2 Failure to exercise or delay in exercising on the part of any of the
Lenders, the Hedging Lenders or the Agent any right, power or privilege under
this Agreement, under any Loan Document, under any agreement with the Debtor or
under any of the Securities shall not operate as a waiver hereof or thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. No waiver by the Lenders, the Hedging Lenders or the Agent shall
be effective unless it is in writing signed by the Agent or the Hedging Lenders,
as the case may be.
8.3 All rights and remedies of the Lenders, the Hedging Lenders and the
Agent set out in this Agreement, the Loan Documents and the Securities and in
any other agreement between the Lenders or the Hedging Lenders and the Debtor or
the Guarantor or any other person whomsoever are cumulative and no right or
remedy contained herein or therein is intended to be exclusive but each is in
addition to every other right or remedy contained herein or therein, or now or
hereafter existing at law, in equity or by statute, or pursuant to any other
agreement between the Debtor and the Lenders or the Hedging Lenders that may be
in effect from time to time.
8.4 The Guarantor hereby waives in favour of the Lenders and the Hedging
Lenders all rights whatsoever against the Lenders, the Hedging Lenders, the
Agent, the Debtor and any other corporation, person, estate and assets so far as
necessary to give effect to anything contained in this Agreement.
8.5 The Guarantor hereby waives protest, presentment, demand for payment
(except as specified in Sections 2.1, 3.1, 3.2 and 4.0 hereof), notice of
default or non-payment and notice of dishonour, and any and all notices of every
kind and description which may be required to be given by statute or otherwise.
15
8.6 If:
(a) any amount payable by the Guarantor under, or in connection
with any matter relating to or arising out of, this Agreement
is received by the Lenders, the Hedging Lenders or the Agent,
as the case may be, in a currency (herein called the "Payment
Currency") other than that agreed to be payable hereunder
(herein called the "Agreed Currency"), whether voluntarily or
pursuant to an order, judgment or decision of any court,
tribunal, arbitration panel or administrative agency or as a
result of any bankruptcy, receivership, liquidation or other
insolvency type proceedings or otherwise; and
(b) the amount so produced by converting the Payment Currency so
received into the Agreed Currency is less than the relevant
amount of the Agreed Currency;
then:
(c) the amount so received shall constitute a discharge of the
liability of the Guarantor under or in connection with this
Agreement only to the extent of the amount produced pursuant
to the conversion described in paragraph (b) above; and
(d) the Guarantor shall indemnify and save the Lenders, and the
Hedging Lenders and each of them, and the Agent, and each of
them, harmless from and against such deficiency and any loss
or damage arising as a result thereof.
Any conversion pursuant to this Section 8.6 shall be made, if between Canadian
Dollars and U.S. Dollars, at the Spot Rate of Exchange (as defined in the Loan
Agreement) and otherwise at such prevailing rate of exchange on the date the
Payment Currency is received and in such market as is determined by the Agent,
acting in accordance with normal banking procedures, as being the most
appropriate for such conversion. The Guarantor shall in addition pay the costs
of such conversion.
The indemnity set out in the foregoing paragraph:
(i) is an obligation of the Guarantor which is separate and
independent from all other obligations of the Guarantor under
this Agreement;
(ii) gives rise to a separate and independent cause of action;
16
(iii) applies irrespective of any indulgence granted by or on behalf
of the Lenders, the Hedging Lenders or the Agent; and
(iv) continues in full force and effect notwithstanding, and does
not merge with, any order, judgment or decision of any court,
tribunal, arbitration panel or administrative agency or as a
result of any bankruptcy, receivership, liquidation or other
insolvency type proceeding or otherwise as to any amount due
under this Agreement or in connection herewith.
All payments by the Guarantor of the Debtor's Obligations shall be made in
Canadian or US Dollars as required under the Loan Agreement or a Hedging
Program. The Guarantor waives any right which it might have in any jurisdiction
to pay any amount under this Agreement in a currency other than that in which it
is expressed to be payable hereunder and thereunder.
9.0 ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR
The Guarantor acknowledges and agrees with the Lenders, the Hedging
Lenders and the Agent that the Guarantor has not executed this Agreement as a
result of, by reason of, or in reliance upon, any promise, representation,
statement or information of any kind or nature whatsoever given, or offered to
the Guarantor, by or on behalf of the Lenders, the Hedging Lenders and the Agent
whether in answer to any enquiry by or on behalf of the Guarantor or not. The
Lenders, the Hedging Lenders and the Agent were not, prior to the execution by
the Guarantor of this Agreement, and are not thereafter, under any duty to
disclose to the Guarantor or any other person any information, matter or thing
(material or otherwise) relating to the Debtor, its affairs or its transactions
with the Lenders, the Hedging Lenders and the Agent, including, without
limitation, any information, matter or thing which puts or may put the Debtor in
a position which the Guarantor would not naturally expect or any unexpected
facts or unusual features which, whether known or unknown to the Guarantor, are
present in any transaction between the Debtor and the Lenders, the Hedging
Lenders and the Agent, and the Lenders, the Hedging Lenders and the Agent were
not and are not under any duty to do or execute any matter, thing or document
relating to the Debtor, its affairs or its transactions with the Lenders, the
Hedging Lenders and the Agent.
10.0 AMENDMENTS
This Agreement shall only be deemed to be amended or varied if amended
or varied by an instrument in writing signed by the Guarantor, the Lenders, the
Hedging Lenders and the Agent.
17
11.0 NOTICES
11.1 Except as otherwise set out in this Agreement, all written notices or
other written communications hereunder to any party hereto shall be deemed to be
duly given or made when delivered, in the case of personal delivery, and when
dispatched, in the case of telecopy, to such party addressed to it at its
address set forth on the first page of this Agreement or at such other address
as such party may hereafter specify for such purpose to the other by notice in
writing. A written notice includes a notice by telecopy.
11.2 A notice or other communication received on a non-Business Day or after
4:30 p.m. in the place of receipt shall be deemed to have been received on the
next following Business Day in such place.
12.0 ASSIGNMENT
The Lenders, the Hedging Lenders and the Agent may assign or transfer
the whole or any part of the benefit of this Agreement and their respective
rights hereunder in accordance with the Loan Agreement. The Guarantor shall not
assign or novate any of its rights or obligations hereunder without the prior
written consent of the Agent.
13.0 SEVERABILITY
If, in any jurisdiction, any Section or any part of any Section of this
Agreement is held to be unenforceable or otherwise invalid such holding shall
not in any way affect the enforceability or validity of the remaining Sections
or the remainder of such Section in that jurisdiction or affect their
enforceability in any other jurisdiction.
14.0 LAWS AND JURISDICTION
14.1 This Agreement shall be governed by and construed in accordance with
the laws of British Columbia and for the purpose of legal proceedings this
Agreement shall be deemed to have been made in such province and to be performed
there.
14.2 The Courts of British Columbia shall have non-exclusive jurisdiction
over all disputes which may arise under this Agreement, provided always that
nothing herein contained shall prevent the Lenders, the Hedging Lenders or the
Agent (but not the Guarantor) from proceeding at their election in the Courts of
any other jurisdiction and the Guarantor hereby irrevocably submits to all such
jurisdictions, acknowledges the competence of each and the convenience and
propriety of the venue thereof and agrees to be bound by any judgment thereof
18
and not to seek, and hereby waives, any review of the merits of such a judgment
by the Courts of any such jurisdiction and also hereby waives any and all
objections which the Guarantor may have to each such jurisdiction.
15.0 INTEREST
15.1 All amounts payable by the Guarantor pursuant to this Agreement shall
bear interest from the date or dates of demand for payment of the same at a rate
equal to the rates of interest designated from time to time for the Debtor's
Obligations. Such interest shall be calculated on the basis of the number of
days elapsed from the date of demand divided by the number of days in the year.
15.2 In this Agreement all interest shall be calculated using the nominal
rate method and not the effective rate method and the "deemed reinvestment
principle" shall not apply to such calculations.
IN WITNESS WHEREOF the Guarantor has executed this Agreement as of the
day and year written above.
[___________________________]
By: _________________________________
Authorized Signatory
19
SCHEDULE H
LENDERS REVOLVING FACILITY COMMITMENTS
AND PERCENTAGE LOAN COMMITMENTS
-------------------------------
REVOLVING PERCENTAGE
LENDER FACILITY COMMITMENT LOAN COMMITMENT
------ ------------------- ---------------
1. BANK OF MONTREAL $30,000,000 50%
2. HSBC BANK CANADA $30,000,000 50%
SCHEDULE I
FORM OF
BORROWING BASE CERTIFICATE
--------------------------
For the certificate in respect of the month in which a fiscal quarter ends,
provide details of specific receivables, excluded receivables, itemized
inventory, excluded inventory, tax receivables and Preferred Claims.
This Borrowing Base Certificate (including all Exhibits hereto) is
submitted as of , (INSERT LAST DAY OF PREVIOUS MONTH) under and pursuant to the
Loan Agreement, dated for reference March 31, 2004 among Riverside Forest
Products Limited, as Borrower, the Lenders, and the Hedging Lenders (as defined
therein) and Bank of Montreal, as Agent (as it may be amended, supplemented or
otherwise modified or restated from time to time, referred to as the "Loan
Agreement"), and is tendered for the purpose of inducing the Lenders to advance
funds to the Borrower under the Revolving Facility and is certified to be true
and correct in all particulars and, without limiting the generality of the
foregoing, Eligible Receivables, Eligible Inventory and Eligible Tax Receivables
set forth below represent "Eligible Receivables", "Eligible Inventory" and
"Eligible Tax Receivables" pursuant to the terms of the Loan Agreement. All
amounts in this Certificate and the Exhibits hereto are in Canadian Dollars.
Capitalized terms used herein and not otherwise defined shall have the meanings
to such terms in the Loan Agreement.
1. Gross Receivables $_________
2. deduct Excluded Receivables ($_________)
3. Aggregate Eligible Receivables Margined $_________
(line 1 minus line 2) x 75%
4. Gross Inventory (lower of cost and net realizable value) $_________
5. deduct Excluded Inventory ($_________)
6. Aggregate Eligible Inventory margined $_________
(line 4 minus line 5) x 50%
7. deduct Preferred Claims ($_________)
8. Net Inventory (line 6 minus line 7) $_________
9. Eligible Tax Receivables $_________
10. Provisional Borrowing Base $_________
(lines 3+8+9)
11. Line 10 minus line 8 $_________
12. Line 11 / (1 - Inventory Cap) $_________
INVENTORY CAP = 0.50
13. BORROWING BASE (lesser of line 10 and line 12) $_________
14. Outstanding Loans (include Swingline Loans, $_________
BA's and undrawn Letters of Credit but not Excluded LCs)
15. Revolving Facility Availability (line 12 minus line 13 $_________
up to a limit of $60 million)
BORROWING BASE CERTIFICATE
PAGE 2
MEMO
A. Hedging Program Contracts
(list Hedging Lender, contracts, dates and
marked to market value of each)
-----------------------------------------
-----------------------------------------
-----------------------------------------
B. Total credit balances in bank accounts:
(list accounts and balances -- not for
margining purposes)
-----------------------------------------
-----------------------------------------
-----------------------------------------
DATED at ______________, British Columbia, this ____ day
of ______________, 200__.
RIVERSIDE FOREST PRODUCTS LIMITED
Per:
---------------------------
Authorized Signatory
SCHEDULE J
FOREST TENURES AND REAL PROPERTY INTERESTS
FOREST TENURES
--------------
FOREST TENURES -- LIGNUM LIMITED
--------------------------------
------------------------------------------------------------------------------------------------------------------------------------
REPLACEABLE OR COMMENCEMENT
DESCRIPTION LOCATION NON-REPLACEABLE OF TERM TERM OF LICENCE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
1. Forest Licence 100 Mile House Replaceable November 1, 1998 15 years Replaces Forest Licence
A20003 Timber Supply A20003 dated
Area ("TSA") November 1, 1993
------------------------------------------------------------------------------------------------------------------------------------
2. Forest Licence Xxxxxxxx Lake TSA Replaceable November 1, 1998 15 years Replaces Forest Licence
A20018 A20018 dated
November 1, 1993
------------------------------------------------------------------------------------------------------------------------------------
3. Forest Licence Xxxxxxxx Lake TSA Non-Replaceable January 1, 2002 extended to December Entered into to allow
A55901 31, 2006 for the harvest of
insect damaged lodgepole
pine.
------------------------------------------------------------------------------------------------------------------------------------
FOREST TENURES -- RIVERSIDE FOREST PRODUCTS LIMITED
---------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
REPLACEABLE OR COMMENCEMENT
DESCRIPTION LOCATION NON-REPLACEABLE OF TERM TERM OF LICENCE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
1. Tree Farm Licence Various lots in Replaceable July 1, 2000 25 years Replaces Tree Farm
No. 49 the Okanagan Licence No. 49,
dated July 1, 1995
------------------------------------------------------------------------------------------------------------------------------------
2. Forest Licence Okanagan TSA Replaceable November 15, 1998 15 years Replaces Forest Licence
A18667 No. A18667,
dated July 20, 1993
------------------------------------------------------------------------------------------------------------------------------------
3. Forest Licence Kamloops TSA Replaceable November 15, 1998 15 years Replaces Forest Licence
A18689 No. A18689,
dated July 20, 1988
------------------------------------------------------------------------------------------------------------------------------------
4. Forest Licence Xxxxxxx TSA Replaceable November 15, 1998 15 years Replaces Forest Licence
A18697 No. A18697,
dated November 22, 1988
------------------------------------------------------------------------------------------------------------------------------------
5. Forest Licence Arrow TSA Replaceable November 15, 1998 15 years Replaces Forest Licence
A20191 No. A20191,
dated November 15, 1988
------------------------------------------------------------------------------------------------------------------------------------
6. Timber Sale Licence Boundary TSA Replaceable December 1, 2002 10 years Licence granted to
A20170 Crown Forest
Industries Limited.
------------------------------------------------------------------------------------------------------------------------------------
7. Forest Licence Xxxxxxxx Lake Replaceable November 1, 1998 15 years
A20019 TSA
------------------------------------------------------------------------------------------------------------------------------------
8. Forest Licence Xxxxxxxx Lake Non-replaceable January 1, 1997 Expires
A54417 TSA December 31, 2006
------------------------------------------------------------------------------------------------------------------------------------
9. Forest Licence Quesnel TSA Non-replaceable December 1, 2001 Expires "Dry licence" -
A67547 December 31, 2006 Salvage - beetle kill
------------------------------------------------------------------------------------------------------------------------------------
10. Timber Sale Licence Quesnel TSA Replaceable November 1, 1996 10 years
A19993
------------------------------------------------------------------------------------------------------------------------------------
2
------------------------------------------------------------------------------------------------------------------------------------
REPLACEABLE OR COMMENCEMENT
DESCRIPTION LOCATION NON-REPLACEABLE OF TERM TERM OF LICENCE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
11. Timber Licence T0467 June 25, 1981 44 3/12 years Licence granted to
Crown Zellerbach Canada
Limited (transferred to
Riverside November 19,
1992)
------------------------------------------------------------------------------------------------------------------------------------
12. Timber Licence T0451 June 25, 1981 44.5 years Licence granted to
Crown Zellerbach Canada
Limited (transferred to
Riverside November 19,
1992)
------------------------------------------------------------------------------------------------------------------------------------
13. Timber Licence T0816 December 2, 1981 50 years Licence granted to
Crown Zellerbach Canada
Limited (transferred to
Riverside November 19,
1992)
------------------------------------------------------------------------------------------------------------------------------------
3
FOREST TENURES -- RFP TIMBER LTD.
---------------------------------
------------------------------------------------------------------------------------------------------------------------------------
REPLACEABLE OR COMMENCEMENT
DESCRIPTION LOCATION NON-REPLACEABLE OF TERM TERM OF LICENCE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
1. Forest Licence Xxxxxxxx Lake Replaceable November 1, 1998 15 years Original Licensee was
A20015 TSA Xxxxxxxx Bros. Forest
Products Ltd. Riverside
and Xxxxxxxx amalgamated
in 1995.
Replaces Xxxxxx Xxxxxxx
Xx. X00000, dated
November 1, 1993
------------------------------------------------------------------------------------------------------------------------------------
2. Forest Licence Xxxxxxxx Lake Replaceable November 1, 1998 15 years Original Licensee was
A20016 TSA Xxxxxxxx Bros. Forest
Products Ltd. Riverside
and Xxxxxxxx amalgamated
in 1995.
Replaces Xxxxxx Xxxxxxx
Xx. X00000, dated
November 1, 1993
------------------------------------------------------------------------------------------------------------------------------------
3. Forest Licence Xxxxxxxx Lake Non-Replaceable March 1, 1997 Extended Expires on December
A55904 TSA 31, 2006.
Entered into to allow for
the harvest of insect
damaged lodgepole pine.
------------------------------------------------------------------------------------------------------------------------------------
4
REAL PROPERTY OWNED
-------------------
REAL PROPERTY OWNED -- LIGNUM LIMITED
-------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
LOCATION PID LEGAL DESCRIPTION
------------------------------------------------------------------------------------------------------------------------------------
1. Cariboo 000-000-000 The Xxxxx Xxxx0/0xx Xxxxxxxx Xxx 0000 Xxxxxxx Xxxxxxxx, Except Parcel A (2858M)
------------------------------------------------------------------------------------------------------------------------------------
REAL PROPERTY OWNED -- RIVERSIDE FOREST PRODUCTS LIMITED
--------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
LOCATION PID LEGAL DESCRIPTION
------------------------------------------------------------------------------------------------------------------------------------
1. Kelowna 000-000-000 Xxx 0 Xxxxxxxx Xxx 0 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx 0000
(Kelowna Mill)
------------------------------------------------------------------------------------------------------------------------------------
2. Kelowna 000-000-000 Lot A District Xxx 0 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx 00000
(Kelowna Mill)
------------------------------------------------------------------------------------------------------------------------------------
3. Kelowna 000-000-000 Lot A Section 11 Township 20 Osoyoos Division Xxxx Xxxxxxxx Xxxx XXX00000
(Winfield Bin
Manufacturing)
------------------------------------------------------------------------------------------------------------------------------------
4. Kelowna 000-000-000 Lot B Section 11 Township 20 Osoyoos Division Xxxx Xxxxxxxx Xxxx XXX00000
(Winfield Bin
Manufacturing)
------------------------------------------------------------------------------------------------------------------------------------
5. Kelowna 000-000-000 Lot D District Xxx 000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx XXX00000
------------------------------------------------------------------------------------------------------------------------------------
6. Kelowna 000-000-000 District Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxxxx (1) parcel A on Plan
(part of TFL49) B957 (2) Plan KAP71029
------------------------------------------------------------------------------------------------------------------------------------
7. Kelowna 000-000-000 Parcel A on Plan B957 District Lot 3860 Osoyoos Division Yale District Except
(part of TFL49) Plan KAP71029
------------------------------------------------------------------------------------------------------------------------------------
5
------------------------------------------------------------------------------------------------------------------------------------
LOCATION PID LEGAL DESCRIPTION
------------------------------------------------------------------------------------------------------------------------------------
8. Kelowna 000-000-000 District Lot 3856 Osoyoos Division Yale District Except Plan KAP71029
(part of TFL49)
------------------------------------------------------------------------------------------------------------------------------------
9. Kelowna 000-000-000 District Lot 3797 Osoyoos Division Yale District Except Plan KAP71029
(part of TFL49)
------------------------------------------------------------------------------------------------------------------------------------
10. Kelowna 000-000-000 Parcel A (DD 175791F) of District Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx
(xxxx of TFL49) Except Plan KAP72665
------------------------------------------------------------------------------------------------------------------------------------
11. Kelowna 000-000-000 District Lot 3750 Osoyoos Division Yale District Except Plan KAP72665
(part of TFL49)
------------------------------------------------------------------------------------------------------------------------------------
12. Kelowna 000-000-000 The West1/2of District Lot 3861 Osoyoos Division Yale District Except Part
(part of TFL49) described as follows: Commencing at the Northwest corner of said District Lot
thence Southerly along the West Boundary a distance of 466 Feet 8 Inches,
thence Easterly and parallel to the North Boundary of said District Lot a
distance of 466 Feet 8 Inches; thence Northerly and parallel to the said West
Boundary a distance of 466 Feet 8 Inches to the North Boundary of District
Lot; thence Westerly along the said North Boundary a distance of 466 Feet 8
Inches to point of Commencement described in DD 10279, Except Plan KAP72665
------------------------------------------------------------------------------------------------------------------------------------
13. Kelowna 000-000-000 Xxx 0 Xxxxxxxx Xxxx 0000, 0000 and 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx
XXX00000
------------------------------------------------------------------------------------------------------------------------------------
14. Kelowna 000-000-000 District Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Except Plan 4110
(part of TFL49)
------------------------------------------------------------------------------------------------------------------------------------
15. Kelowna 000-000-000 District Lot 3789 Osoyoos Division Xxxx Xxxxxxxx Xxxxxx Xxxx X00000
(part of TFL49)
------------------------------------------------------------------------------------------------------------------------------------
16. Kelowna 000-000-000 District Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx
(xxxx xx XXX00)
------------------------------------------------------------------------------------------------------------------------------------
17. Kelowna 000-000-000 District Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx
(xxxx xx XXX00)
------------------------------------------------------------------------------------------------------------------------------------
18. Kelowna 000-000-000 Xxx 0 Xxxxxxxx Xxx 0 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Plan KAP62263
------------------------------------------------------------------------------------------------------------------------------------
6
------------------------------------------------------------------------------------------------------------------------------------
LOCATION PID LEGAL DESCRIPTION
------------------------------------------------------------------------------------------------------------------------------------
19. Kelowna 000-000-000 Lot A District Xxxx 000 xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx 00000
------------------------------------------------------------------------------------------------------------------------------------
20. Kelowna 000-000-000 Lot B District Xxx 000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx 00000
------------------------------------------------------------------------------------------------------------------------------------
21. Kelowna 000-000-000 Lot C District Xxx 000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx 00000
------------------------------------------------------------------------------------------------------------------------------------
22. Kelowna 000-000-000 Parcel A (DD 138112F and Plan B6471) Of District Lot 2926 Osoyoos Division
Yale District
------------------------------------------------------------------------------------------------------------------------------------
23. Vernon 000-000-000 Xxx 0 Xxxxxxxx Xxx 00 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx 00000
------------------------------------------------------------------------------------------------------------------------------------
24. Vernon 000-000-000 The South1/2of the Northeast 1/4 of Section 26 Township 43 Osoyoos Division
Yale District
------------------------------------------------------------------------------------------------------------------------------------
25. Vernon 000-000-000 District Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
26. Vernon 000-000-000 The North 1/2 of the Southeast 1/4 of Section 26 Township 43 Osoyoos Division
Yale District
------------------------------------------------------------------------------------------------------------------------------------
27. Vernon 000-000-000 The West 1/2 of the Southeast 1/4 of Section 35 Township 43 Osoyoos Division
Yale District
------------------------------------------------------------------------------------------------------------------------------------
28. Vernon 000-000-000 District Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
29. Vernon 000-000-000 District Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
30. Penticton 000-000-000 District Xxx 0000X Xxxxxxxxxxx Xxxxxxxx Xxxx Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
31. Penticton 000-000-000 The South 1/2of District Lot 3859 Similkameen Division Yale District
(part of TFL49)
------------------------------------------------------------------------------------------------------------------------------------
32. Penticton 000-000-000 The North 1/2of District Lot 3859 Similkameen Division Yale District
(part of TFL49)
------------------------------------------------------------------------------------------------------------------------------------
33. Peachland 000-000-000 Xxx 00 Xxxxxxxx Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Plan 410
------------------------------------------------------------------------------------------------------------------------------------
34. Peachland 000-000-000 Xxx 00 Xxxxxxxx Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Plan 410
------------------------------------------------------------------------------------------------------------------------------------
35. Peachland 000-000-000 Xxx 00 Xxxxxxxx Xxx 0000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Plan 410
------------------------------------------------------------------------------------------------------------------------------------
7
------------------------------------------------------------------------------------------------------------------------------------
LOCATION PID LEGAL DESCRIPTION
------------------------------------------------------------------------------------------------------------------------------------
36. Peachland 000-000-000 Parcel A (DD 178904F) of Xxx 00 Xxxxxxxx Xxx 0000 Xxxxxxx Xxxxxxxx
Xxxx Xxxxxxxx Plan 410
------------------------------------------------------------------------------------------------------------------------------------
37. Cariboo 000-000-000 District Xxx 000 Xxxxxxxx Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
38. Cariboo 000-000-000 District Xxx 0000 Xxxxxxxx Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
39. Cariboo 000-000-000 Xxxxxxxx Xxx 00000 Xxxxxxx Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
40. Cariboo 000-000-000 Xxxxxxxx Xxx 00000 Xxxxxxx Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
41. Cariboo 000-000-000 District Xxx 0000 Xxxxxxx Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
42. Cariboo 000-000-000 District Xxx 0000 Xxxxx 0 Xxxxx Xxxxxxxx Xxxxxx Xxxx 00000
------------------------------------------------------------------------------------------------------------------------------------
43. Cariboo 000-000-000 District Xxx 0000 Xxxxx 0 Xxxxx Xxxxxxxx Xxxxxx Xxxx 00000
------------------------------------------------------------------------------------------------------------------------------------
44. Kamloops 000-000-000 Xxx 0 Xxxxxxx 00 Xxxxxxxx 00 Xxxxx 00 Xxxx of the 6th Meridian Kamloops
Division Yale District Plan 7631 Except Plan KAP65557
------------------------------------------------------------------------------------------------------------------------------------
45. Kamloops 000-000-000 That Part of Parcel A of the Southeast 1/4 of Section 15, Township 18, Range
14, West of the 6th Meridian, Lying to the East of the Canadian Northern
Pacific Railway Shown on Plan A305 Kamloops Division Yale District Except Plan
2734
------------------------------------------------------------------------------------------------------------------------------------
46. Kamloops 000-000-000 Xxx 0 Xxxxxxx 00 Xxxxxxxx 00 Xxxxx 00 West of the 6th Meridian and of
(part of TFL49) District Xxx 000 Xxxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx 0000
------------------------------------------------------------------------------------------------------------------------------------
47. Kamloops 000-000-000 Xxx 0 Xxxxxxx 00 Xxxxxxxx 00 Xxxxx 00 Xxxx of the 6th Meridian
Kamloops Division Xxxx Xxxxxxxx Xxxx 00000
------------------------------------------------------------------------------------------------------------------------------------
48. Kamloops 000-000-000 District Xxx 0000 Xxxxxxxx Xxxxxxxx Xxxx Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
49. Kamloops 000-000-000 That Part of the South1/2of District Lot 475 Lying East of the Canadian
Northern Pacific Railway shown on Plan A305; Kamloops Division Yale District
Except Plans 2734, M52, 7631, 7993 and H16539
------------------------------------------------------------------------------------------------------------------------------------
8
------------------------------------------------------------------------------------------------------------------------------------
LOCATION PID LEGAL DESCRIPTION
------------------------------------------------------------------------------------------------------------------------------------
50. Kamloops 000-000-000 Lot A Township 18 Range 14 West of the 6th Meridian Kamloops Division
Yale District Plan 2734
------------------------------------------------------------------------------------------------------------------------------------
51. Kamloops 000-000-000 That Part of the Fractional North East 1/4 of Section 10 as shown on Plan of
the South East 1/4 of said Township dated at Ottawa 27th August, 1919 Lying
East as shown on Plan A325; Township 18 Range 14 West of the 6th Meridian
Kamloops Division Yale District
------------------------------------------------------------------------------------------------------------------------------------
52. Spallumcheen 000-000-000 North West1/4of Section 18 Township 4 Osoyoos Division Yale District
------------------------------------------------------------------------------------------------------------------------------------
53. Spallumcheen 000-000-000 Parcel A (DD 131613F) of the north east 1/4 Section 13 Township 7 Osoyoos
(Xxxxxxxxx Mill) Division Xxxx Xxxxxxxx Xxxxxx Xxxx X0000
------------------------------------------------------------------------------------------------------------------------------------
54. Spallumcheen 000-000-000 Xxx 0 Xxxxxxx 00 Xxxxxxxx 0 Osoyoos Division Yale District Plan 3733 Except
(Xxxxxxxxx Mill) Plan 5303
------------------------------------------------------------------------------------------------------------------------------------
55. Spallumcheen 000-000-000 That part south 1/2 of the north east 1/4 Section 13 Township 7 Osoyoos
Division Yale (Xxxxxxxxx Mill) District described as follows: the point of
commencement being 11 and 1/2 chains northerly from the south west corner of
the said 1/4 section; thence northerly along the west boundary of said 1/4
section 8 and 3/4 chains; thence east 34 and 2/7ths chains more or less;
thence south 8 and 3/4 chains more or less; thence west 34 and 2/7ths chains
more or less to the point of commencement except Plan 2917.
------------------------------------------------------------------------------------------------------------------------------------
56. Spallumcheen 000-000-000 Xxx 0 Xxxxxxx 00 Xxxxxxxx 0 Osoyoos Division Xxxx Xxxxxxxx Xxxx 00000 Xxxxxx
(Xxxxxxxxx Mill) Plans H762 and H10007
------------------------------------------------------------------------------------------------------------------------------------
57. Spallumcheen 000-000-000 Xxx 0 Xxxxxxx 00 Xxxxxxxx 0 Osoyoos Division Yale District Plan 2917
(Xxxxxxxxx Mill)
------------------------------------------------------------------------------------------------------------------------------------
58. Lumby 000-000-000 Xxx 0 Xxxxxxxx Xxx 00 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Plan 26041
(Scale Building
and "B Yard")
------------------------------------------------------------------------------------------------------------------------------------
59. Lumby 000-000-000 Xxx 0 Xxxxxxxx Xxxx 00 00 and 000 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx 00000
(Veneer Plant
VATS A Yard)
------------------------------------------------------------------------------------------------------------------------------------
9
------------------------------------------------------------------------------------------------------------------------------------
LOCATION PID LEGAL DESCRIPTION
------------------------------------------------------------------------------------------------------------------------------------
60. Lumby 000-000-000 Xxx 0 Xxxxxxxx Xxx 00 Osoyoos Division Yale District Plan 8003
(Bone Yard)
------------------------------------------------------------------------------------------------------------------------------------
61. Lumby 000-000-000 Xxx 0 Xxxxxxxx Xxx 00 Osoyoos Division Yale District Plan 8003
(Bone Yard)
------------------------------------------------------------------------------------------------------------------------------------
62. Lumby 000-000-000 Lot A District Xxx 00 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx 00000
(Parking Lot)
------------------------------------------------------------------------------------------------------------------------------------
63. Lumby 000-000-000 Lot B District Xxxx 00 xxx 00 Xxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxx 00000
(Wmill, Planer
Shop, Kiln, Lumber
Storage Burner)
------------------------------------------------------------------------------------------------------------------------------------
64. Ashcroft 000-000-000 That Part of the Fractional Legal Subdivision 13 Section 36 Lying East of the
(Tie Treating Xxxxxxxx River Township 20 Range 24 West of the 6th Meridian Kamloops Division
Facility) Yale District Except Plan 203
------------------------------------------------------------------------------------------------------------------------------------
65. Ashcroft 000-000-000 Legal Subdivision 14 Section 36 Township 20 Range 24 West of the 6th Meridian
(Tie Treating Kamloops Division Yale District Except Plan 203
Facility)
------------------------------------------------------------------------------------------------------------------------------------
66. Ashcroft 000-000-000 That Part Of Legal Subdivision 4 Section 1 Lying South of the Xxxxxxxx River
(Tie Treating Township 21 Range 24 West of the 6th Meridian Kamloops Division Yale District
Facility)
------------------------------------------------------------------------------------------------------------------------------------
67. Ashcroft 000-000-000 That Part of the Fractional Legal Subdivision 3 Section 1 Lying South of the
(Tie Treating Xxxxxxxx River Township 21 Range 24 West of the 6th Meridian Kamloops Division
Facility) Yale District Except Plan 203
------------------------------------------------------------------------------------------------------------------------------------
68. Ashcroft 000-000-000 That Part of the Fractional West 1/2 of Fractional Legal Subdivision 2
(Tie Treating Section 1 Lying South of the Xxxxxxxx River Township 21 Range 24 West of the
Facility) 6th Meridian Kamloops Division Yale District Except Plan 203
------------------------------------------------------------------------------------------------------------------------------------
10
REAL PROPERTY -- LEASED
-----------------------
REAL PROPERTY LEASED -- LIGNUM LIMITED
--------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
COMMENCEMENT EXPIRY
LESSOR DESCRIPTION OF PROPERTY OF TERM OF TERM ACREAGE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
1. BCR Properties Ltd. PID 000-000-000 January 1, 1999 30 years 72.53 Lease with rights of renewal and
(PS18800) right of first refusal to purchase.
Xxx X Xxxxxxxx Xxx 00 Minimum Volume Commitment to ship
Cariboo District 900 via BC Rail carloads of lumber
Plan PGP 45932 per year.
Mill Site
------------------------------------------------------------------------------------------------------------------------------------
2. BCR Properties Ltd. PID 000-000-000 September 1, 1994 20 years unknown Co-tenant with Xxxxxxxxx
Xxx X Xxxxxxxx Xxx 0000 Truck Wash Facility
Xxxxxxx Xxxxxxxx
Xxxx XXX00000
------------------------------------------------------------------------------------------------------------------------------------
3. Mottistone Holdings PID 000-000-000 September 1, 2002 5 years N/A Head Office
Ltd.
Xxx 0 Xxxxx 0 Xxxxxxxx
Xxx 000 Xxxx 92
------------------------------------------------------------------------------------------------------------------------------------
4. Mottistone Holdings PID 000-000-000 September 1, 2002 5 years N/A Head Office
Ltd.
Xxx 0 Xxxxx 0 Xxxxxxxx
Xxx 000 Plan 92
------------------------------------------------------------------------------------------------------------------------------------
11
REAL PROPERTY LEASED -- RIVERSIDE FOREST PRODUCTS LIMITED
---------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
COMMENCEMENT EXPIRY
LESSOR DESCRIPTION OF PROPERTY OF TERM OF TERM ACREAGE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
1. BCR Properties Ltd. PID 000-000-000 September 1, 1994 20 years 3.064 Forest Products Manufacturing Plant
(Assignment PJ41173,
Lease PJ1071) Automatic renewal at end of term
as a year to year lease for ten
Parcel 1 District Lot 71 years
Cariboo District
Plan PGP39526
------------------------------------------------------------------------------------------------------------------------------------
2. BC Rail Ltd. PID 000-000-000 September 1, 1994 20 years 66.43 Forest Products Manufacturing Plant
(Lease PJ1072, Assignment
PJ41174) Automatic renewal at end of term
as a year to year lease for ten
Xxx X Xxxxxxxx Xxx 00 years
Cariboo District
Plan PGP38261
------------------------------------------------------------------------------------------------------------------------------------
3. BCR Properties Ltd. PID 000-000-000 September 1, 1994 20 years Co-tenant with Lignum
(Lease No. PN46053)
Truck Wash Facility
Xxx X Xxxxxxxx Xxx 0000
Xxxxxxx Xxxxxxxx
Plan PGP38141
------------------------------------------------------------------------------------------------------------------------------------
4. BCR Properties Ltd. PID 000-000-000 December 1, 1996 10 years 22.2 ha Forest Products Manufacturing Plant
(Lease No. 2422) (Assignment PL35720,
Lease PL 30835)
Assigned from Timberwest Forest
District Lots 8844, 8845, Limited to Riverside
11660 Xxx 0 Xxxx 00000
Except Plans 23038,
31215, PGP36696 and
PGP35410
------------------------------------------------------------------------------------------------------------------------------------
12
------------------------------------------------------------------------------------------------------------------------------------
COMMENCEMENT EXPIRY
LESSOR DESCRIPTION OF PROPERTY OF TERM OF TERM ACREAGE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
5. BCR Properties Ltd. That portion of District August 1, 1990 yearly 29.06 The lease is for land at Soda Creek
(Lease No. 1407) Xxx 00 Xxxxxxx Xxxxxxxx acres which is part of the log yard.
Plan PGP 35292
Except PGP 36696 Assigned from Timberwest Forest
comprising 29.06 acres. Limited to Riverside, 1997.
PID 000-000-000 The lease is for a portion of land
and is therefore not enforceable
(unregistered) according to s. 73 of the LAND
TITLE ACT and the British Columbia
Court of Appeal decision in
INTERNATIONAL PAPER INDUSTRIES
LTD. v. TOPLINE INDUSTRIES INC.
There is a prior registered lease
to Weldwood of Canada Ltd.
------------------------------------------------------------------------------------------------------------------------------------
6. BCR Properties Ltd. PID 000-000-000 December 1, 1996 10 years 56.6 Forest Products Manufacturing Plant
(Lease Xx. 0000)
Xxx X, Xxxxxxxx Xxx 0000 Assigned from Timberwest Forest
Cariboo District Plan Limited to Riverside
23038
------------------------------------------------------------------------------------------------------------------------------------
13
------------------------------------------------------------------------------------------------------------------------------------
COMMENCEMENT EXPIRY
LESSOR DESCRIPTION OF PROPERTY OF TERM OF TERM ACREAGE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
7. BCR Properties Ltd. That portion of District November 1, 1996 3 years 0.78 ha The lease is for land at Soda
(Lease No. 1445) Lot 8845 Cariboo District Creek, specifically the Vedan Yard
except Plans 18018, below the Xxxx Xxxxxx millsite,
18019, 19381 and 22947 which is used for storage of
comprising 0.78 ha. railway ties and as a loading area
for BCR.
(unregistered)
Assigned from Timberwest Forest
Limited to Riverside, 1997.
Right of first refusal to match
any offer to lease the premises
given by a third party.
The lease is for a portion of
land and is therefore not
enforceable according to s. 73 of
the LAND TITLE ACt and the
British Columbia Court of Appeal
decision in INTERNATIONAL PAPER
INDUSTRIES LTD. v. TOPLINE
INDUSTRIES INC.
------------------------------------------------------------------------------------------------------------------------------------
8. BCR Properties Ltd. That portion of Lot A December 1, 1996 1 year 0.08 ha The lease is for land at Soda
(Lease No. 2814) Xxxxxxxx Xxx 00 Xxxxxxx Xxxxx. Assigned from Xxxxxxxxxx
Xxxxxxxx Xxxx 00000 (year-to- Forest Limited to Riverside, 1997
except Plans PGP35292, year)
PGP36696, PGP35410 and The lease is for a portion of land
PGP40145 comprising 0.08 and is therefore not enforceable
ha. according to s. 73 of the LAND
(unregistered) TITLE ACT and the British Columbia
Court of Appeal decision in
INTERNATIONAL PAPER INDUSTRIES LTD.
v. TOPLINE INDUSTRIES INC.
------------------------------------------------------------------------------------------------------------------------------------
14
------------------------------------------------------------------------------------------------------------------------------------
COMMENCEMENT EXPIRY
LESSOR DESCRIPTION OF PROPERTY OF TERM OF TERM ACREAGE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
9. BCR Properties Ltd. That portion of District November 1, 1996 3 years 0.72 ha the lease is for land at Soda
(Lease No. 1446) Lot 8845 Cariboo Creek, specifically the Vedan
District except Plans Yard below the Xxxx Xxxxxx
18018, 18019, 19381 and millsite, which is used for storage
2947 comprising 0.72 ha. of railway ties and as a loading
area for BCR.
(unregistered)
Assigned from Timberwest Forest
Limited to Riverside, 1997
Right of first refusal to match any
offer to lease the premises given
by a third party.
The lease is for a portion of land
and is therefore not enforceable
according to s. 73 of the LAND
TITLE ACt and the British Columbia
Court of Appeal decision in
INTERNATIONAL PAPER INDUSTRIES LTD.
v. TOPLINE INDUSTRIES INC.
------------------------------------------------------------------------------------------------------------------------------------
15
REAL PROPERTY LEASED -- RFP POWER LTD.
--------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
COMMENCEMENT EXPIRY
LESSOR DESCRIPTION OF PROPERTY OF TERM OF TERM ACREAGE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
1. Riverside Forest PID: 000-000-000 February 15, 2001 25 years Xxxxxxxxx co-gen plant
Products Limited
Xxx 0 Xxxxxxx 00 Xxxxxxxx 0
Osoyoos Division Yale District
Plan 12175 Except Plans H762
and H10007
----------------------------------------------------------------------------------------------------------------------------------
2. Riverside Forest PID: 000-000-000 February 15, 2001 25 years Xxxxxxxxx co-gen plant
Products Limited
Xxx 0 Xxxxxxx 00 Xxxxxxxx 0
Osoyoos Division Yale District
Plan 2917
------------------------------------------------------------------------------------------------------------------------------------
3. Riverside Forest PID: 000-000-000 February 15, 2001 25 years Xxxxxxxxx co-gen plant
Products Limited
That part south 1/2 of the north
east 1/4 Section 13 Township 7
Osoyoos Division Yale District
described as follows: the point
of commencement being 11 and 1/2
chains northerly from the south
west corner of the said 1/4
section; thence northerly along the
west boundary of said 1/4 section 8
and 3/4 chains; thence east 34 and
2/7ths chains more or less; thence
south 8 and 3/4 chains more or
less; thence west 34 and 2/7ths
chains more or less to the point
of commencement except Plan 2917
------------------------------------------------------------------------------------------------------------------------------------
4. Riverside Forest PID: 000-000-000 February 15, 2001 25 years Xxxxxxxxx co-gen plant
Products Limited
Xxx 0 Xxxxxxx 00 Xxxxxxxx 0
Osoyoos Division Yale District
Plan 3733 Except Plan 5303
------------------------------------------------------------------------------------------------------------------------------------
16
SCHEDULE K
CERTAIN EXISTING PERMITTED ENCUMBRANCES
---------------------------------------
A. LIENS OVER $500,000
Nil.
B. The lien created by the "Safekeeping Agreement" dated February 3, 2000,
among Her Majesty the Queen in Right of the Province of British Columbia, HSBC
Bank Canada and Riverside Forest Products Limited, pursuant to which HSBC Bank
Canada holds approximately $515,000 as security for the obligations of Riverside
in connection with a sanitary landfill site in Xxxxxxxx Lake.
C. EXCLUDED LCS
TYPE CCY O/S AMOUNT START DUE
---- --- ---------- ----- ---
GTE CAD $22,887.19 09 Jul 03 08 Jul 04
GTE CAD 3,000.00 17 Jul 03 16 Jul 04
GTE CAD 32,560.66 01 Aug 03 03 Aug 04
GTE CAD 28,610.06 26 Jun 03 25 Jun 04
GTE CAD 52,551.66 30 Sep 03 29 Sep 04
GTE CAD 8,856.90 28 May 03 27 May 04
GTE CAD 9,346.90 21 Nov 03 23 Nov 04
GTE CAD 31,297.69 22 Jul 03 21 Jul 04
GTE CAD 16,898.56 01 Dec 03 30 Nov 04
GTE CAD 12,019.02 02 Jul 03 02 Jul 04
GTE CAD 14,134.44 08 Jul 03 07 Jul 04
GTE CAD 51,210.00 23 Jul 03 22 Jul 04
GTE CAD 22,045.46 13 Aug 03 12 Aug 04
GTE CAD 17,316.07 02 Oct 03 01 Oct 04
GTE CAD 14,055.75 23 Oct 03 22 Oct 04
GTE CAD 30,869.68 04 Sep 03 03 Sep 04
GTE CAD 62,060.08 14 Nov 03 12 Nov 04
GTE CAD 30,441.28 14 Nov 03 12 Nov 04
GTE CAD 41,603.11 13 Jan 04 12 Jan 05
GTE CAD 26,600.40 19 Feb 03 18 Feb 05
GTE CAD 51,597.63 26 Feb 03 25 Feb 05
GTE CAD 26,886.39 07 Oct 03 06 Oct 04
GTE CAD 35,134.98 28 Oct 03 27 Oct 04
GTE CAD 31,163.20 17 Oct 03 18 Oct 04
GTE CAD 61,597.27 10 Dec 03 09 Dec 04
GTE CAD 35,994.88 06 Jan 04 05 Jan 05
SCHEDULE L
PERSONS EXCLUDED FROM
ELIGIBLE INVENTORY AND ELIGIBLE RECEIVABLES
-------------------------------------------
Chasyn Wood Technologies Inc.
Jackpine Forest Products Ltd.
Jackpine Engineered Wood Products Inc.
Redwood Value Added Products Inc.
