CREDIT AGREEMENT
among
MERISEL CANADA INC.
as Borrower
- and -
CITIBANK CANADA
CANADIAN IMPERIAL BANK OF COMMERCE
NBD BANK, CANADA
as Banks
- and -
CITIBANK CANADA
as Administrative Agent
January 4, 1995
Tory Xxxx XxxXxxxxxxx & XxXxxxxx, Xxxxxxxx
Xxxxxxxxxx Toronto,Ontario
Toronto, Ontario Solicitors for the
Solicitors for the Banks Borrower
TABLE OF CONTENTS
Page
ARTICLE 1
INTERPRETATION
1.1 Definitions 1
1.2 Gender and Number 12
1.3 Certificate of the Administrative Agent as to Rates, etc. 12
1.4 Interest Act 12
1.5 Invalidity, etc. 12
1.6 Headings, etc. 13
1.7 Governing Law 13
1.8 Attornment 13
1.9 Currency 13
1.10 This Agreement to Govern 13
1.11 Generally Accepted Accounting Principles 14
1.12 Determination of Amount of Loans 14
1.13 Actions on Days Other Than Banking Days 14
1.14 Oral Instructions 14
1.15 Incorporation of Schedules 15
ARTICLE 2
CREDIT FACILITY
2.1 Establishment of Credit Facility 15
2.2 Revolving Nature of Credit Facility 15
2.3 Repayment 16
2.4 Voluntary Reduction in Credit Facility 16
2.5 Extension of Credit Facility 16
2.6 Advances 17
2.7 Selection of Interest Periods and BA Periods 17
2.8 Rollover and Conversion 18
2.9 Mandatory Repayment for Currency Excess 19
2.10 Payments Generally 19
2.11 Overdraft Facility 19
ARTICLE 3
GENERAL PROVISIONS RELATING TO THE CREDIT FACILITY
3.1 Disturbance of Libor Market 21
3.2 Payments - No Deduction 21
3.3 Change in Circumstances 23
3.4 Illegality 25
3.5 General Indemnity 25
3.6 Environmental Indemnity 26
3.7 Evidence of Indebtedness 26
3.8 Individual Obligations 27
ARTICLE 4
BANKERS' ACCEPTANCES
4.1 Procedure Relating to Bankers' Acceptances 27
ARTICLE 5
LETTERS OF CREDIT
5.1 Procedures Relating to Letters of Credit 30
5.2 Reimbursement 30
5.3 Banks Not Liable 30
5.4 Letter of Credit Fees 31
5.5 Overdue Amounts 32
5.6 Acceleration 32
5.7 Conflict 33
ARTICLE 6
INTEREST AND FEES
6.1 Interest Rates 33
6.2 Calculation and Payment of Interest 33
6.3 Determination of Reference Rates 34
6.4 Commitment Fee 34
6.5 Structuring Fee 35
6.6 Agency Fee 35
6.7 Payment of Costs and Expenses 35
6.8 Interest on Overdue Amounts 35
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 Representations and Warranties 36
7.2 Survival of Representations and Warranties 38
ARTICLE 8
COVENANTS
8.1 Affirmative Covenants 38
8.2 Banks Entitled to Perform Covenants 40
8.3 Negative Covenants 41
ARTICLE 9
CONDITIONS PRECEDENT
9.1 Conditions
Precedent to Initial Advance 42
9.2 Conditions Precedent to Subsequent Advances 43
ARTICLE 10
EVENTS OF DEFAULT AND REMEDIES
10.1 Events of Default 44
10.2 Remedies Upon Default 46
10.3 Set-Off 47
10.4 Distributions 47
ARTICLE 11
THE ADMINISTRATIVE AGENT AND THE ADMINISTRATION OF
THE CREDIT FACILITIES
11.1 Appointment and Authorization 47
11.2 Duties and Obligations of Administrative Agent 48
11.3 Prompt Notice to the Banks 49
11.4 Administrative Agent's Authority to Deal with Borrower 49
11.5 Dealings by Borrower with Administrative Agent 49
11.6 Independent Credit Decisions 49
11.7 Indemnification 50
11.8 Successor Administrative Agent 50
11.9 Action by and Consent of Banks; Waiver and Amendments 51
11.10 Funding of Advances 52
11.11 Remittance of Payments 53
11.12 Redistribution of Payments 53
11.13 Notification of Default 54
11.14 Taking and Enforcement of Remedies 54
11.15 Adjustments to Reflect Rateable Portions 55
11.16 No Partnership 56
ARTICLE 12
GENERAL
12.1 Reliance and Non-Merger 56
12.2 No Set-Off by the Borrower 56
12.3 Notices 56
12.4 Time 58
12.5 Further Assurances 59
12.6 Assignment 59
12.7 Exchange of Information 61
12.8 Currency Conversion and Indemnity 61
12.9 Counterparts 61
12.10 Entire Agreement 61
THIS AGREEMENT is made as of January 4, 1995
AMONG:
MERISEL CANADA INC., as Borrower
- and -
CITIBANK CANADA, CANADIAN IMPERIAL BANK
OF COMMERCE and NBD Bank, Canada, as Banks
- and -
CITIBANK CANADA, as Administrative Agent
RECITALS:
A. The Borrower has requested the Banks to make available a
Credit Facility to accommodate the Borrower's short term cash
needs;
B. The Banks have agreed to provide the Credit Facility to the
Borrower on the terms and conditions herein set forth and in
reliance upon the Guarantee;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in
consideration of the covenants and agreements herein contained,
the parties hereto agree as follows:
C. INTERPRETATION
C.(a) Definitions
For the purposes of this Agreement:
"Acceptance Fee" means, in respect of each Bankers'
Acceptance accepted by a Bank, a fee calculated on the basis
of a 365 day year on the face amount of such Bankers'
Acceptance at a rate per annum for the actual number of days
in the relevant BA Period equal to the BA Base Rate plus the
Applicable Margin;
"Advance" means any utilization of the Credit Facility by
the Borrower (other than by way of Rollover or Conversion of
a Loan already outstanding), whether by way of advance of a
Prime Rate Loan, Base Rate Loan or Libor Loan or by way of
issuance of Bankers' Acceptances or a Letter of Credit;
"Administrative Agent" means Citibank Canada in its capacity
as administrative agent hereunder or any successor
administrative agent as provided in section 11.8;
"Affiliate" means, in respect of any corporation, any Person
which, directly or indirectly, controls or is controlled by
or is under common control with the corporation; and for the
purpose of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under
common control with") means the power to direct, or cause to
be directed, the management and policies of a corporation
whether through the ownership of Voting Shares or by
contract or otherwise;
"Aggregate Commitment" means, at any time, Cdn. $50,000,000
or the U.S. Dollar Equivalent, as adjusted to give effect to
all reductions effected from time to time pursuant to
sections 2.2, 2.4, 2.12, 3.2.5, 3.3 or 3.4;
"Agreement" means this agreement and all schedules attached
to this agreement, in each case as they may be amended or
supplemented from time to time, and the expressions
"hereof", "herein", "hereto", "hereunder", "hereby" and
similar expressions refer to this Agreement as a whole and
not to any particular article, section, schedule or other
portion hereof;
"Applicable Law" means, in respect of any Person, property,
transaction or event, all applicable laws, statutes, rules,
by-laws and regulations, and all applicable official
directives, orders, judgments and decrees of Governmental
Bodies (and, in the case of section 3.4, whether or not
having the force of law);
"Applicable Margin" means, for any period and type of Loan
set forth below, the percentage set forth in the table
below:
Xxxxx 0 Xxxxxx Xxxxx 0 Xxxxxx Xxxxx 3 Period Level 4 Period
Prime Rate Loans nil nil nil nil
Base Rate Loans nil nil nil nil
Libor Loans .50 .675 .75 1.25
Bankers' Acceptance .50 .675 .75 1.25
Loans
"Average BA Discount Rate" means, for any day, the average,
rounded upwards to the nearest whole multiple of one-
hundredth of one percent (if already not such a multiple),
of the BA Discount Rates which, subject to section 6.3.2,
each of the Banks has quoted for that day to the
Administrative Agent, pro rated on the basis of each Bank's
Rateable Portion;
"BA Discount Rate" means, in respect of Canadian dollar
banker's acceptances accepted by a Bank on a particular day
for a particular BA period, the market bid rate quoted
therefor by such Bank at or about 10:00 a.m. (Toronto time)
on such day on a 365-day yield basis;
"BA Base Rate" means, at any time, the rate, expressed as a
rate per annum, which the Administrative Agent establishes
at its principal office in Toronto as the reference rate to
determine fees it will charge at such time for accepting
Canadian dollar bankers' acceptances drawn by its customers
in Canada, such rate to be adjusted automatically and
without the necessity of any notice to the Borrower upon
each change to such rate;
"BA Period" means, with respect to a Bankers' Acceptance,
the duration thereof as selected by the Borrower in
accordance with the provisions hereof, in each case
commencing on the date the Bankers' Acceptance is accepted
and expiring on a Banking Day not less than 30 nor more than
180 days thereafter;
"Bankers' Acceptance" means a xxxx of exchange drawn by the
Borrower and accepted by a Bank in accordance with the
provisions of Article 4;
"Bankers' Acceptance Loan" means, at any time, any Loan
which at such time is outstanding by way of one or more
Bankers' Acceptances and, for greater certainty, refers to
the aggregate face amount of such Bankers' Acceptances, and
"Bankers' Acceptance Loans" means, at any time, all Bankers'
Acceptance Loans at such time;
"Banking Day" means a day on which (i) for all purposes
other than in connection with a Base Rate Loan or Libor
Loan, banks are generally open for business in Toronto,
Ontario and Los Angeles, California; (ii) in connection with
a Base Rate Loan, banks are generally open for business in
Toronto, Ontario, Los Angeles, California and New York, New
York; and (iii) in connection with a Libor Loan, banks are
generally open for business and on which dealings in foreign
currency and exchange between banks may be carried on in
Toronto, Ontario, Los Angeles, California, New York, New
York and London, England and on which dealings in U.S.
dollar deposits are transacted in the London interbank
market;
"Banks" means Citibank Canada, Canadian Imperial Bank of
Commerce, NBD Bank, Canada and any financial institution
which takes an assignment in accordance with section 12.7
from a Bank, so long as any of the Obligations are owed to
them or they have any obligation hereunder, and "Bank" means
any one of them;
"Base Rate" means, at any time, the annual rate of interest
which the Administrative Agent establishes at its principal
office in Toronto as the reference rate of interest in order
to determine interest rates it will charge at such time for
demand loans in U.S. dollars made to its customers in Canada
and which it refers to as its "U.S. Base Rate", such rate to
be adjusted automatically and without the necessity of any
notice to the Borrower upon each change to such rate;
"Base Rate Loan" means, at any time, any Loan which is
outstanding at such time and in respect of which interest is
to be calculated based on the Base Rate and "Base Rate
Loans" means, at any time, all Base Rate Loans at such time;
"Borrower" means Merisel Canada Inc., a corporation
incorporated under the laws of the Province of Ontario, and
its successors and permitted assigns;
"Borrowing Date" means any Banking Day on which an Advance
is made;
"Borrowing Notice" means a notice substantially in the form
of Schedule B;
"Branch of Account" means the Administrative Agent's branch
located at Citibank Place, 000 Xxxxx Xxxxxx Xxxx, Xxxxxxx,
or such other branch of the Administrative Agent as the
Administrative Agent may designate in writing to the
Borrower;
"Canadian Dollar Value" means, in relation to any particular
amount of money at any time, the value thereof at such time
in Canadian dollars, determined as follows:
(a) for that portion of such amount which is Canadian
dollars, the face amount thereof; and
(b) for that portion of such amount which is U.S.
dollars, the Canadian dollar equivalent thereof
converted for such purposes at the Conversion Rate;
"Canadian Taxes" means all Taxes imposed, levied, collected,
withheld or assessed by any Governmental Body of or within
Canada or any political subdivision thereof;
"Commitment", means, in respect of each Bank at any time,
the amount set forth opposite the name of such Bank in
Schedule A, as adjusted to give effect to such Bank's
Rateable Portion of all reductions effected from time to
time pursuant to sections 2.2, 2.4, 2.12, 3.2.5, 3.3 or 3.4;
"Conversion" means, in respect of any Loan, the conversion
of the method for calculating interest or fees on such Loan
from one method to another, and includes a conversion to or
from a Bankers' Acceptance Loan;
"Conversion Date" means, in respect of any Loan, the Banking
Day on which a Conversion thereof is made;
"Conversion Rate" means, in relation to the conversion of
one Currency to another on a particular day, the rate of
exchange quoted by the Administrative Agent as its spot rate
of exchange for the conversion of the one Currency to the
other at 10:00 a.m. (Toronto time) or shortly thereafter on
such day;
"Credit Facility" means the revolving credit facility made
available to the Borrower by the Banks pursuant to section
2.1.1;
"Currency" means either Canadian dollars or U.S. dollars;
"Default" means any event which, but for the lapse of time,
giving of notice or both, would constitute an Event of
Default;
"Discount Proceeds" means the net cash proceeds which are
realized on the sale of a Bankers' Acceptance, which amount
shall be calculated by discounting the face amount of such
Banker's Acceptance at the Average BA Discount Rate;
"Due Date" means that date which is 364 days from the date
hereof or such later date to which the Credit Facility has
been extended pursuant to section 2.5;
"Event of Default" has the meaning attributed to such term
in section 10.1;
"Excluded Taxes" means any Canadian Taxes which are imposed
on the Administrative Agent or a Bank as a result of the
Administrative Agent or such Bank:
(a) having a permanent establishment in Canada,
(b) being organized under the laws of Canada or any
political subdivision thereof, or
(c) being resident in Canada by virtue of its domicile
or place of management being in Canada;
"Governmental Body" means any government, parliament,
legislature, or any regulatory authority, agency, commission
or board of any government, parliament or legislature, or
any court or (without limitation to the foregoing) any other
law, regulation or rule-making entity (including, without
limitation, any central bank, fiscal or monetary authority
or authority regulating banks), having or purporting to have
jurisdiction in the relevant circumstances, or any Person
acting or purporting to act under the authority of any of
the foregoing (including, without limitation, any
arbitrator);
"Guarantee" means the unconditional guarantee by the
Guarantor of all the Obligations substantially in the form
of Schedule C, as amended or supplemented from time to time;
"Guarantor" means Merisel Americas, Inc., a corporation
incorporated under the laws of Delaware, and its successors
and permitted assigns;
"Indebtedness" means, at any time with respect to the
Borrower or the Guarantor, as the case may be, the
following:
(a) indebtedness for money borrowed and indebtedness
represented by notes payable and drafts accepted
representing extensions of credit;
(b) all obligations (whether or not with respect to
the borrowing of money) which are evidenced by bonds,
debentures, notes or other similar instruments or not
so evidenced but which would be considered to be
indebtedness for borrowed money in accordance with
generally accepted accounting principles;
(c) all indebtedness upon which interest charges are
customarily paid;
(d) principal obligations as lessee under capital
leases and all other indebtedness issued or assumed as
full or partial payment for property or services or by
way of capital contribution; and
(e) any guarantee (other than by endorsement of
negotiable instruments for collection or deposit in the
ordinary course of business) relating to an obligation
of a type referred to in (a) to (d) above, and any
contingent liability in respect of letters of credit,
letters of guarantee and surety bonds;
of the Borrower or the Guarantor, as the case may be, at
such time, including (without limitation) the aggregate of
all Loans at such time; for greater certainty, trade
payables (including, without limitation, amounts owing under
inventory flooring agreements with suppliers), expenses
accrued in the ordinary course of business, customer advance
payments and deposits received in the ordinary course of
business and any obligations under or resulting from any
agreement for the securitization of accounts receivable
(provided that the Agent on behalf of the Banks shall have
received, not less than 5 days prior to the date of such
securitization, an opinion from a firm of chartered
accountants acceptable to the Banks that the sale of
accounts receivable pursuant to such securitization
constitutes a sale for accounting purposes, which opinion
shall be substantially in the form of a schedule to be
agreed upon by the parties hereto by February 28, 1995 and
to be attached to this Agreement) shall not constitute
Indebtedness;
"Interest Period" means, with respect to each Libor Loan,
the period selected by the Borrower in accordance with the
provisions hereof and being of a duration of one, two, three
or six months, commencing on the Borrowing Date, Rollover
Date or Conversion Date (as the case may be) of such Loan;
"Letter of Credit" means a letter of credit or letter of
guarantee issued by the Administrative Agent on behalf of
the Banks in accordance with the provisions hereof;
"Letter of Credit Fee" means, at any time, in respect of
each Letter of Credit, a fee calculated on the basis of a
365 day year for the period from the date of issue thereof
to the expiry date thereof, at a rate per annum which the
Administrative Agent establishes at its principal office in
Toronto as the reference rate to determine the fee it will
charge at such time to its customers in Canada for issuing
irrevocable documentary letters of credit denominated in
Canadian dollars or U.S. dollars (as the case may be and
which it refers to as its "commission fee"), such fee to be
adjusted automatically and without the necessity of any
notice to the Borrower upon each change to such fee;
"Level 1 Period", "Level 2 Period", "Level 3 Period" and
"Level 4 Period" means a period of time during which the
Consolidated Debt/Capital Ratio of Merisel Parent is as set
forth in the table below:
Ratio Period
equal to or less than .55:1.00 Level 1
greater than .55:1.00 but equal Level 2
to or less than .60:1.00
greater than .60:1.00 but equal Level 3
to or less than .625:1.00
greater than .625:1.00 Xxxxx 0
For purposes of this definition, (a) "Consolidated
Debt/Capital Ratio" means the ratio described in respect of
Merisel Parent in section 7.01(g) of the U.S. Credit
Agreement, as set out in the financial statements of the
Guarantor; (b) each change in such ratio shall be deemed to
have occurred as of the date of the most recent financial
statements delivered by the Guarantor to the Banks pursuant
to section 8.1 of the Guarantee; and (c) any change in the
Applicable Margin shall be calculated and applied
prospectively from the first day of the month following the
month in which financial statements of the Guarantor
reflecting such a change were delivered to the Banks (or
were required by the Guarantee to have been so delivered);
"Libor" means, in respect of a particular Libor Loan and
Interest Period, the interest rate which, pursuant to
section 6.3.1, the Administrative Agent has determined, at
or about 11:00 a.m. (Toronto time) on the day which is two
Banking Days prior to the first day of such Interest Period,
is the rate at which it is prepared to offer deposits to
leading banks in the London interbank eurocurrency market in
U.S. dollars in an amount approximately equal to the amount
of the particular Libor Loan for substantially the same
number of days as such Interest Period for delivery on the
first day of such Interest Period;
"Libor Loan" means, at any time, any Loan which is
outstanding at such time in U.S. dollars and in respect of
which interest is to be calculated based on Libor, and
"Libor Loans" means, at any time, all Libor Loans at such
time;
"Lien" means any mortgage, lien, pledge, assignment, charge,
security interest, lease intended as security (but
specifically not including operating leases), title
retention agreement, right reserved in any Governmental
Body, hypothec, levy, execution, seizure, attachment,
garnishment or other similar encumbrance and includes any
contractual restriction which, if contravened, may give rise
to an encumbrance;
"Loan" means, at any time, the principal amount of all
Obligations then outstanding under the Credit Facility
pursuant to the same availment option, denominated in the
same Currency, and,
(a) in the case of a Bankers' Acceptance Loan,
relating to all Bankers' Acceptances accepted in
respect of a single Borrowing Notice;
(b) in the case of a Libor Loan, pursuant to an
Advance, Rollover or Conversion made on the same date
and having the same Maturity Date; and
(c) in the case of a Letter of Credit, relating to a
single Letter of Credit;
and "Loans" means, at any time, all Loans then outstanding
under the Credit Facility at such time;
"Loan Documents" means this Agreement, the Guarantee and any
other agreements, instruments and documents delivered from
time to time (both before and after the date of this
Agreement) to the Administrative Agent on behalf of the
Banks or to the Banks by the Borrower, the Guarantor or any
other Person in connection with this Agreement or the
Guarantee, other than opinions of counsel, in each case as
amended or supplemented from time to time, and "Loan
Document" means any one of them;
"Majority Banks" means, at any time, such of the Banks which
are owed principal amounts under the Credit Facility or the
Overdraft Facility aggregating at least 66 2/3% of the
aggregate of the Loans under the Credit Facility and the
maximum amount of the Overdraft Facility pursuant to section
2.11.1 or, if no Loans are then outstanding, such of the
Banks having or having made available, as the case may be,
at least 66 2/3% of the aggregate of the Aggregate
Commitment and the maximum amount of the Overdraft Facility
pursuant to section 2.11.1. For purposes of this
definition, the principal amount owed and the amount having
been made available under the Overdraft Facility at any time
shall be deemed to be the maximum amount thereof pursuant to
section 2.11.1;
"Maturity Date" means the last day of an Interest Period, BA
Period or Letter of Credit term (as applicable);
"Merisel Parent" means Merisel, Inc., a corporation
incorporated under the laws of Delaware, and its successors;
"Obligations" means all indebtedness (including any
operating account debit balances in favour of any Bank),
liabilities and other obligations of the Borrower to the
Administrative Agent and the Banks or any of them hereunder
and of the Borrower or the Guarantor under any other Loan
Document (including any amendments or supplements thereto),
whether actual or contingent, direct or indirect, matured or
not, now existing or arising hereafter, including, for
greater certainty, obligations to the Overdraft Bank in
respect of the Overdraft Facility;
"Overdraft Bank" means Citibank Canada;
"Overdraft Facility" means the overdraft facility made
available to the Borrower by the Overdraft Bank pursuant to
section 2.11;
"Permitted Encumbrances" means:
(a) Liens for taxes, assessments or governmental
charges incurred in the ordinary course of business
that are not yet due and payable or the validity of
which is being actively and diligently contested in
good faith by the Borrower;
(b) construction, mechanics', carriers',
warehousemen's and materialmen's Liens and Liens in
respect of vacation pay, workers' compensation,
unemployment insurance or similar statutory
obligations, provided the obligations secured by such
Liens are not yet due and payable and, in the case of
construction Liens, which have not yet been filed or
for which the Borrower has not received written notice
of a Lien;
(c) deposits to secure public or statutory obligations
or in connection with any matter giving rise to a Lien
described in (b) above;
(d) Liens arising from court or arbitral proceedings,
provided that any such Lien has not resulted in an
Event of Default;
(e) good faith deposits made in the ordinary course of
business to secure the performance of bids, tenders,
contracts (other than for the repayment of borrowed
money), leases, surety, customs, performance bonds and
other similar obligations;
(f) utility easements, rights of way, servitudes,
building restrictions, title defects and irregularities
and other such Liens against real property as are of a
nature generally existing with respect to properties of
a similar character and which do not in any material
way affect the marketability of the same or interfere
with the use thereof in the business of the Borrower;
(g) Purchase Money Security Interests, provided the
aggregate principal amount of the obligations secured
in respect of Purchase Money Security Interests which
are not in respect of inventory flooring agreements at
no time exceeds $1,000,000;
(h) capital leases, provided the aggregate principal
amount thereof does not at any time exceed $10,000,000;
(i) any other Lien which the Banks approve in writing
as a Permitted Encumbrance;
(j) any other Liens provided that the aggregate
principal amount secured thereby at any time does not
exceed $100,000; and
(k) Liens in respect of accounts receivable (and in
property securing or otherwise supporting accounts
receivable) in connection with agreements for the
securitization of accounts receivable (or interests
therein), provided that the Agent on behalf of the
Banks shall have received, not less than 5 days prior
to the date of such securitization, an opinion from a
firm of chartered accountants acceptable to the Banks
that the sale of accounts receivable pursuant to such
securitization constitutes a sale for accounting
purposes, which opinion shall be substantially in the
form of a schedule to be agreed upon by the parties
hereto by February 28, 1995 and to be attached to this
Agreement;
"Person" means any individual, partnership, limited
partnership, joint venture, syndicate, sole proprietorship,
company or corporation with or without share capital,
unincorporated association, trust, trustee, executor,
administrator or other legal personal representative or
Governmental Body;
"Prime Rate" means, at any time, the annual rate of interest
which the Administrative Agent establishes at its principal
office in Toronto as the reference rate of interest to
determine interest rates it will charge at such time for
demand loans in Canadian dollars made to its customers in
Canada and which it refers to as its "prime rate of
interest", such rate to be adjusted automatically and
without the necessity of any notice to the Borrower upon
each change to such rate;
"Prime Rate Loan" means, at any time, any Loan which is
outstanding at such time and in respect of which interest is
to be calculated based on the Prime Rate and "Prime Rate
Loans" means, at any time, all Prime Rate Loans at such
time;
"Purchase Money Security Interest" means any Lien given,
assumed or arising by operation of law to provide or secure,
or to provide the obligor with funds to pay, the whole or
any part of the consideration for the acquisition of
property where the principal amount of the obligation
secured by such Lien (i) is not in excess of the cost
(including, without limitation, taxes, delivery and
transaction costs) to the obligor of the property encumbered
thereby and (ii) is secured only by the property being
acquired by the obligor, and includes the renewal or
refinancing of any such Lien upon the same property provided
that the indebtedness secured and the security therefor are
not increased thereby, and also includes, for greater
certainty, Liens in respect of inventory flooring agreements
with suppliers;
"Rateable Portion" means in respect of each Bank at any
time, the proportion that its Commitment at such time bears
to the Aggregate Commitment at such time, and the terms
"rateable" and "rateably" shall have the corresponding
meanings;
"Responsible Officer" means, in respect of the Borrower, any
of the Chief Executive Officer and the Chief Financial
Officer;
"Rollover" means, in respect of a Libor Loan or Bankers'
Acceptance Loan, the continuation of such Loan or any
portion thereof for a succeeding Interest Period or BA
Period, as the case may be, in accordance with the
provisions hereof;
"Rollover Date" means, in respect of a Libor Loan or
Bankers' Acceptance Loan, a Banking Day on which a Rollover
of all or a portion thereof is made;
"Subsidiary" means, with respect to any Person at any time,
any corporation of which at least a majority of the Voting
Shares are at the time, directly or indirectly, owned by
such Person, and includes any corporation in like
relationship to a Subsidiary;
"Taxes" means all taxes of any kind or nature whatsoever
including, without limitation, income taxes, sales or value-
added taxes, levies, stamp taxes, royalties, duties, and all
fees, deductions and withholdings imposed, levied,
collected, withheld or assessed as of the date hereof or at
any time in the future, by any Governmental Body of or
within Canada or any other jurisdiction whatsoever having
power to tax, together with penalties, fines, additions to
tax and interest thereon;
"U.S. Credit Agreement" means the revolving credit agreement
dated as of December 23, 1993 among the Guarantor and
Merisel Europe, Inc. as co-borrowers, Merisel Parent as
guarantor, and the lenders and other parties listed therein,
as amended to the date hereof;
"U.S. Dollar Equivalent" means, in relation to any
particular amount of money in Canadian dollars at any
particular time, the value thereof at such time in U.S.
dollars determined at the Conversion Rate; and
"Voting Shares" means capital stock of any class of a
corporation which carries voting rights under any
circumstances, provided that shares which carry the right to
vote conditionally upon the happening of an event shall not
be considered Voting Shares until the occurrence of such
event and then only during the continuance of such event.
C.(b) Gender and Number
Words importing the singular include the plural and
vice versa and words importing gender include all genders.
C.(c) Certificate of the Administrative Agent as to
Rates, etc.
A certificate of the Administrative Agent certifying
the amount of the Applicable Margin, the BA Base Rate, the
Average BA Discount Rate, the Base Rate, the Prime Rate, the
Acceptance Fee, the Letter of Credit Fee or Libor at any
particular time in respect of any Loan made or maintained or to
be made or maintained by the Banks or any of them hereunder or
the Conversion Rate in respect of any calculation hereunder shall
be binding and conclusive for all purposes, absent manifest
error. A certificate of a Bank certifying the amount of the BA
Discount Rate quoted by it on any particular day, as notified by
it to the Administrative Agent for the purposes hereof, shall be
binding and conclusive for all purposes, absent manifest error.
No provision hereof shall be construed so as to require the
Administrative Agent or any Bank to issue a certificate at any
particular time.
C.(d) Interest Act
For purposes of the Interest Act (Canada), where in any
Loan Document (i) a rate of interest is to be calculated on the
basis of a year of 360 days, the yearly rate of interest to which
the 360 day rate is equivalent is such rate multiplied by the
number of days in the year for which such calculation is made and
divided by 360, or (ii) an annual rate of interest is to be
calculated during a leap year, the yearly rate of interest to
which such rate is equivalent is such rate multiplied by 366 and
divided by 365.
C.(e) Invalidity, etc.
Each of the provisions contained in any Loan Document
is distinct and severable and a declaration of invalidity,
illegality or unenforceability of any such provision or part
thereof by a court of competent jurisdiction shall not affect the
validity or enforceability of any other provision of such Loan
Document or of any other Loan Document. Without limiting the
generality of the foregoing, if any amounts on account of
interest or fees or otherwise payable by the Borrower to the
Administrative Agent or the Banks hereunder exceed the maximum
amount recoverable under Applicable Law, the amounts so payable
hereunder shall be reduced to the maximum amount recoverable
under Applicable Law.
C.(f) Headings, etc.
The division of a Loan Document into articles, sections
and clauses, the inclusion of a table of contents and the
insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of such Loan
Document.
C.(g) Governing Law
The Loan Documents, other than the Guarantee, shall be
governed by and construed in accordance with the laws of the
Province of Ontario and the laws of Canada applicable therein.
The Guarantee shall be governed by and construed in accordance
with the laws of the State of California.
C.(h) Attornment
The parties hereto irrevocably submit and attorn to the
non-exclusive jurisdiction of the courts of the Province of
Ontario for all matters arising out of or in connection with this
Agreement and the other Loan Documents.
C.(i) Currency
Except as otherwise specifically provided herein, all
monetary amounts in this Agreement are stated in Canadian
dollars.
C.(j) This Agreement to Govern
If there is any inconsistency between the terms of this
Agreement and the terms of any other Loan Document, the
provisions hereof shall prevail to the extent of the
inconsistency, but the
foregoing shall not apply to limit or restrict in any way the rights and
remedies of the Administrative Agent or the Banks under the terms of
the Loan Documents.
C.(k) Generally Accepted Accounting Principles
Except as otherwise specifically provided herein, all
accounting terms shall be applied and construed in accordance
with generally accepted accounting principles consistently
applied. References herein to "generally accepted accounting
principles" mean, for all principles stated from time to time in
the Handbook of the Canadian Institute of Chartered Accountants,
such principles so stated.
C.(l) Determination of Amount of Loans
For the purpose of determining the amount of Loans or
any Loan at any time, there shall be deemed to be outstanding and
advanced in addition to amounts outstanding and directly
advanced, without duplication and without affecting other
provisions hereof regarding the basis for the calculation of
interest or fees, (i) the face amount of all Bankers' Acceptances
then outstanding, and (ii) the maximum amount of all contingent
liabilities of the Banks pursuant to Letters of Credit then
outstanding. Where any amount denominated in U.S. dollars is or
is deemed to be outstanding, the applicable rate of exchange for
purposes of calculating the total Canadian dollar amount of the
Loans or any Loan at any time shall be the then most recently
available Conversion Rate.
C.(m) Actions on Days Other Than Banking Days
Except as otherwise specifically provided herein, where
any payment is required to be made or any other action is
required to be taken on a particular day and such day is not a
Banking Day and, as a result, such payment cannot be made or
action cannot be taken on such day, then this Agreement shall be
deemed to provide that such payment shall be made or such action
shall be taken on the first Banking Day after such day; provided
that if such deferral would cause such payment to be made or such
action to be taken in the following calendar month, such payment
shall be made or such action shall be taken on the next preceding
Banking Day and interest and fees shall be calculated
accordingly.
C.(n) Oral Instructions
Notwithstanding any other provision herein regarding
the delivery of notices, including Borrowing Notices, by the
Borrower, the Administrative Agent shall in its sole discretion
be entitled to act upon the oral instructions of the Borrower, or
any Person reasonably believed by the Administrative Agent to be
a Person authorized by the Borrower to give instructions,
regarding any request for an Advance, Rollover, Conversion,
completion and issuance of Bankers' Acceptances or issuance of
Letters of Credit. All such oral instructions shall be at the
risk of the Borrower and must be confirmed in writing by the
Borrower prior to the time the Administrative Agent is required
to act on such oral instructions. The Administrative Agent shall
not be responsible for any error or omission in such instructions
or in the performance thereof except in the case of negligence or
wilful misconduct by the Administrative Agent.
C.(o) Incorporation of Schedules
The following schedules annexed hereto shall, for all
purposes hereof, form part of this Agreement:
Schedule A - Commitments (1.1)
Schedule B - Borrowing Notice (2.6)
Schedule C - Guarantee (9.1.3.5)
Schedule D - Opinion of Borrower's Counsel
(9.1.3.7)
Schedule E - Opinion of Guarantor's Counsel
(9.1.3.8)
D. CREDIT FACILITY
D.(a) Establishment of Credit Facility
D.(a)(i) Subject to the terms and conditions of this
Agreement, the Banks hereby severally establish a revolving
credit facility (the "Credit Facility") in favour of the Borrower
in the amount of their respective Commitments.
D.(a)(ii) The Credit Facility shall be available, at the
option of the Borrower, by way of Advances of: (i) Prime Rate
Loans in Canadian dollars; (ii) Base Rate Loans in U.S. dollars;
(iii) Bankers' Acceptances in Canadian dollars; (iv) Libor Loans
in U.S. Dollars; and (v) Letters of Credit in Canadian or U.S.
dollars.
D.(a)(iii) Notwithstanding any other provision of this
Agreement, no Bank shall be obligated to make its Rateable
Portion of any Advance (and the Borrower shall not request any
Advance to be made) to the extent that on any relevant Borrowing
Date, after giving effect to any Advance requested: (i) the
Canadian Dollar Value of the aggregate principal amount of such
Bank's Rateable Portion of all Loans would exceed its Commitment
at such time; or (ii) the Canadian Dollar Value of the aggregate
principal amount of all Loans would exceed the Aggregate
Commitment at such time.
D.(b) Revolving Nature of Credit Facility
The Borrower may, until the Due Date, increase or
decrease the Obligations under the Credit Facility by making
drawdowns, repayments and further drawdowns up to the amount of
the Aggregate Commitment from time to time. The Aggregate
Commitment and each of the Commitments shall be automatically
reduced to nil on the Due Date, and the Borrower shall repay to
the Administrative Agent for the account of the Banks on the Due
Date all Obligations then outstanding.
D.(c) Repayment
The Borrower may from time to time (without bonus or
penalty) on any Banking Day repay to the Administrative Agent,
for the account of the Banks, Prime Rate Loans or Base Rate Loans
or portions thereof provided that any such repayment made by the
Borrower on any particular day shall (unless such payment is
required to be made under any particular provision hereof) only
be effected if notice of such repayment is provided to the
Administrative Agent by (i) in the case of a repayment of under
$5,000,000, 12:00 noon, and (ii) in the case of a repayment of
$5,000,000 or more, 11:00 a.m., in each case on such day, which
notice, once given, shall in each case be irrevocable and binding
upon the Borrower. The Borrower shall repay Bankers' Acceptance
Loans and Libor Loans in accordance with the provisions of
section 2.8.2.
D.(d) Voluntary Reduction in Credit Facility
The Borrower shall have the right at any time and from
time to time, by giving at least three Banking Days' notice to
the Administrative Agent which notice, once given, shall be
irrevocable and binding upon the Borrower, to reduce the then
applicable Aggregate Commitment to a lower amount which is not
less than the principal amount of all Obligations then
outstanding. Such notice shall specify the amount of the
reduction, which shall be in an integral multiple of $5,000,000.
The amount of any such reduction so made by the Borrower shall be
permanent and irrevocable and each Bank's Commitment shall be
reduced rateably.
D.(e) Extension of Credit Facility
The Borrower may, by written request to the
Administrative Agent at least 30 days prior to the end of each
successive 6 month period commencing from the date hereof,
request that the Credit Facility be extended for a further period
of 6 months from the Due Date at such time. The Administrative
Agent shall forthwith notify each Bank of such request and the
Banks may, in their sole discretion and regardless of whether or
not there is any Default hereunder, approve or decline such
request (approval being deemed to have been given only if all of
the Banks give such approval). The Administrative Agent shall,
not later than 6 months prior to the Due Date at such time,
notify the Borrower whether or not such extension has been
granted and, if such extension has been granted, confirm the new
Due Date. If no request for an extension of the Credit Facility
is received from the Borrower or if such request is not approved
by all of the Banks, the Credit Facility shall terminate on the
then current Due Date.
D.(f) Advances
D.(f)(i) Other than in the case of Advances made pursuant
to section 2.11, each request by the Borrower for an Advance
under the Credit Facility shall be made by the delivery of a duly
completed and executed Borrowing Notice to the Administrative
Agent at its Branch of Account:
D.(f)(i)(A) in the case of Advances of Prime Rate Loans
and Base Rate Loans, not later than 10:30 a.m. (Toronto time) on
the proposed Borrowing Date;
D.(f)(i)(B) in the case of Advances of Libor Loans or
Bankers' Acceptance Loans, not later than 11:00 a.m. (Toronto
time) on the second Banking Day prior to the proposed Borrowing
Date; and
In the case of Advances of Letters of Credit, the Borrower
shall deliver a duly completed and executed Borrowing Notice
to the Agent at its Branch of Account and the Agent shall,
as soon as reasonably practicable, prepare and provide to
the Borrower a draft of the Letter of Credit. The Borrowing
Date in respect of the Letter of Credit shall be not sooner
than the fifth Banking Day following the receipt by the
Agent of written notice from the Borrower that the form of
the draft Letter of Credit is acceptable to the Borrower.
D.(f)(ii) Any notice in respect of a proposed Advance shall
be irrevocable and binding on the Borrower.
D.(f)(iii) Subject to section 2.11, all Advances shall
be in an amount which is an integral multiple of $100,000 (or
U.S. $100,000 in the case of an Advance in U.S. dollars) and, in
the case of Advances of Bankers' Acceptance Loans, shall also be
in a minimum amount of $500,000.
D.(g) Selection of Interest Periods and BA Periods
Notwithstanding any other provision hereof:
D.(g)(i) the Borrower may not select any Interest Period or
BA Period with a Maturity Date which is later than the Due Date;
and
D.(g)(ii) the number of Interest Periods and BA Periods in
effect at any time shall not exceed 40 in the aggregate.
D.(h) Rollover and Conversion
D.(h)(i) Subject to the terms and conditions of this
Agreement and provided that no declaration or demand has been
made by the Administrative Agent under section 10.2, the Borrower
may from time to time request that a Loan or any portion thereof
be rolled over or converted to another form of Loan in accordance
with the provisions hereof.
D.(h)(ii) The Borrower shall repay to the Administrative
Agent for the account of the Banks the full amount of each
Bankers' Acceptance Loan and Libor Loan on the Maturity Date of
the BA Period or Interest Period applicable thereto, in
accordance with the provisions hereof governing repayment and
prepayment, unless such Loan shall be rolled over or converted to
another form of Loan on such Maturity Date in accordance with the
provisions hereof.
D.(h)(iii) Each request by the Borrower for a Rollover
or Conversion shall be made by the delivery of a duly completed
and executed Borrowing Notice to the Administrative Agent at the
Branch of Account, and the provisions of section 2.6 shall apply
to the Rollover or Conversion as if such Rollover or Conversion
were an Advance.
D.(h)(iv) Each Rollover or Conversion of a Libor Loan or
Bankers' Acceptance Loan shall be made effective as of the
Maturity Date of the Interest Period or BA Period applicable
thereto.
D.(h)(v) If the Borrower does not deliver a Borrowing
Notice at or before the time required by section 2.8.3 and
D.(h)(v)(A) in the case of a Bankers' Acceptance Loan,
fails to pay to the Administrative Agent for the account of the
Banks the face amount thereof on the Maturity Date of the
relevant BA Period, or
D.(h)(v)(B) in the case of a Libor Loan, fails to pay to
the Administrative Agent for the account of the Banks the
principal amount thereof on the Maturity Date of the relevant
Interest Period,
the Borrower shall be deemed to have requested a Conversion
of such Loan to a Prime Rate Loan (if the maturing Loan is a
Bankers' Acceptance Loan) or a Base Rate Loan (if the
maturing Loan is a Libor Loan), and all of the provisions
hereof applicable to Prime Rate Loans and Base Rate Loans,
as the case may be, shall apply thereto.
D.(h)(vi) A Rollover or Conversion shall not constitute a
repayment of the relevant Loan but shall result in a change in
the basis of calculation of interest or fees (as the case may be)
for such Loan and, where applicable, the Currency of the Loan, in
accordance with the provisions hereof.
D.(i) Mandatory Repayment for Currency Excess
The Administrative Agent shall, on such dates as it may
select in its sole discretion, determine the Canadian Dollar
Value of the principal amount of all Obligations then
outstanding. If the Canadian Dollar Value of the principal
amount of all such Obligations exceeds the Aggregate Commitment,
the Administrative Agent shall notify the Borrower of the amount
of the excess (the "Excess Borrowing") and the Borrower shall,
within five Banking Days of the giving of such notice, repay the
amount of the Excess Borrowing in Canadian dollars to the
Administrative Agent on behalf of the Banks.
D.(j) Payments Generally
All payments (in respect of principal, interest, fees
or otherwise) shall be made by the Borrower to the Administrative
Agent (on behalf of the Banks) no later than 12:00 noon (Toronto
time) on the due date thereof to the account specified therefor
by the Administrative Agent at its Branch of Account or to such
other accounts as may be specified by the Administrative Agent to
the Borrower from time to time. Any payments received after such
time shall be considered for all purposes as having been made on
the next following Banking Day unless the Administrative Agent
otherwise agrees in writing. All payments shall be made in
immediately available funds in the same Currency as the Currency
of the Loan to which such payments relate.
D.(k) Overdraft Facility
D.(k)(i) Subject to the terms and conditions of this
Agreement, the Overdraft Bank agrees to establish an overdraft
facility (the "Overdraft Facility") in favour of the Borrower in
an amount up to $10,000,000. The Overdraft Facility is subject
to cancellation in whole or in part by the Overdraft Bank at any
time and the amount available thereunder shall automatically be
reduced to nil on the Due Date, and the Borrower shall repay to
the Overdraft Bank on the earlier of the date of such
cancellation and the Due Date all Obligations then outstanding
thereunder. The Borrower may, until the earlier of the
cancellation of the Overdraft Facility and the Due Date, increase
or decrease the Obligations under the Overdraft Facility by
making drawdowns, repayments and further drawdowns up to the
maximum amount available thereunder from time to time.
D.(k)(ii) The Borrower shall open and maintain with the
Overdraft Bank at the Branch of Account at least one Canadian
dollar and one U.S. dollar operating account (each such operating
account herein called an "operating account"). The Borrower
shall execute the Overdraft Bank's standard operation of account
agreements and other necessary account documents. Availment
under the Overdraft Facility may be made by the Overdraft Bank
honouring cheques of the Borrower drawn on an operating account
on the terms set out in section 2.11.3. Overdrafts in the
Canadian dollar operating account and the U.S. dollar operating
account shall bear interest at the rate applicable to Prime Rate
Loans and Base Rate Loans, respectively.
D.(k)(iii) The Borrower authorizes the Overdraft Bank,
daily or otherwise as and when determined by the Overdraft Bank
from time to time, to ascertain the net position between the
Borrower and the Overdraft Bank in respect of all operating
accounts. If such net position is a debit in excess of
$10,000,000 (or the U.S. Dollar Equivalent) in favour of the
Overdraft Bank, the Overdraft Bank shall forthwith notify the
Administrative Agent of the amount of such debit position.
Receipt of such notice shall be deemed to be receipt by the
Administrative Agent of a Borrowing Notice from the Borrower
under the Credit Facility requesting an Advance of a Prime Rate
Loan (or, if the Borrower so advises the Administrative Agent in
sufficient time prior to the Advance, a Base Rate Loan) in the
amount of $10,000,000 (or the U.S. Dollar Equivalent), and the
provisions of this Agreement applicable to such Advance shall
thereupon apply, except that the Administrative Agent shall
credit the Overdraft Bank with the amount of such Advance (which
the Overdraft Bank shall in turn credit to the relevant operating
account or accounts).
D.(k)(iv) The provisions of sections 3.5, 3.7, 6.2.1, 6.2.2,
6.4, 6.7, 6.8, 8.1, 8.3, 9.1 and 10.2 of this Agreement shall
apply to the Overdraft Facility, mutatis mutandis. For greater
certainty, in applying such sections to the Overdraft Facility,
all references therein to Loans shall be deemed to be references
to amounts outstanding under the Overdraft Facility; all
references to the Credit Facility shall be deemed to be
references to the Overdraft Facility; all references to Prime
Rate Loans and Base Rate Loans shall be deemed to be references
to Canadian dollar overdrafts or U.S. dollar overdrafts,
respectively; all references to the Administrative Agent and/or
the Banks shall be deemed to be references to the Overdraft Bank;
and all references to the Aggregate Commitment shall be deemed to
be references to the maximum amount available under the Overdraft
Facility at such time.
D.(k)(v) Subject to section 2.11.3, the Overdraft Bank shall
be solely responsible for the funding and administration of the
Overdraft Facility, and all interest, fees and other amounts
payable by the Borrower in respect of the Overdraft Facility
shall be for the account of the Overdraft Bank.
E. GENERAL PROVISIONS RELATING TO THE CREDIT FACILITY
E.(a) Disturbance of Libor Market
Notwithstanding any other provision hereof, if at any
time prior to the commencement of an Interest Period in respect
of any proposed Libor Loan, any Bank determines in good faith
(which determination shall be conclusive and binding), and
provides a certificate to the Administrative Agent with respect
to such determination, that with respect to such Libor Loan:
E.(a)(i) Libor will not adequately and fairly reflect the
cost to such Bank of funding such Libor Loan for the relevant
Interest Period, or
E.(a)(ii) deposits in U.S. dollars are not available to such
Bank in the London interbank market in sufficient amounts in the
ordinary course of business, or
E.(a)(iii) by reason of circumstances affecting the
London interbank market, adequate and fair means do not exist for
ascertaining Libor for the relevant Interest Period;
then the Administrative Agent shall forthwith (but in any case
not later than the Banking Day on which such Libor Loan was to be
made) give notice of such determination to the Borrower, and from
and after the date of commencement of such Interest Period and
for so long as such conditions shall continue to exist the
Borrower shall not have the right to obtain such Libor Loan and
the Borrowing Notice received by the Administrative Agent in
respect of such Libor Loan shall be deemed to be a request of the
Borrower for a Base Rate Loan (unless the Borrower notifies the
Administrative Agent, within the time periods required by section
2.6.1, that it wishes another type of Loan (other than a Libor
Loan)).
E.(b) Payments - No Deduction
E.(b)(i) All payments made by the Borrower to the
Administrative Agent or any of the Banks under this Agreement
shall be made in full, without set-off or counterclaim, and free
of and without deduction or withholding for or on account of any
present or future Canadian Taxes (other than Excluded Taxes)
provided that, if the Borrower shall be required by law to deduct
or withhold any Canadian Taxes (other than Excluded Taxes) from
or in respect of any payment or sum payable to the Administrative
Agent or the Banks, the payment or sum payable shall be increased
as may be necessary so that after making all required deductions
or withholdings (including deductions or withholdings applicable
to additional amounts paid under this section 3.2) the
Administrative Agent or the Banks receive an amount equal to the
sum they would have received if no deduction or withholding to
the relevant taxation or other authority in accordance with
Applicable Law.
E.(b)(ii) The Borrower shall indemnify the Administrative
Agent and the Banks (any of the same being an "Indemnified
Person") in respect of:
E.(b)(ii)(A) the full amount of Canadian Taxes (other than
Excluded Taxes) imposed or levied upon any such Indemnified
Person in respect of any payment received or receivable by it
hereunder from or on behalf of the Borrower or from the Guarantor
as guarantor of the Obligations of the Borrower, whether or not
such Canadian Taxes (other than Excluded Taxes) were correctly or
legally asserted; and
E.(b)(ii)(B) any net Taxes imposed by any jurisdiction on
any increased amounts payable under section 3.2.1 after taking
into account any refund, credit, allowance, remission or
deduction from income otherwise determined or tax otherwise
payable available to such Indemnified Person in respect of the
Canadian Taxes deducted or withheld as contemplated by section
3.2.1 (whether or not claimed by such Indemnified Person).
Payment under this indemnification shall be made within ten
Banking Days from the date the relevant Indemnified Person
makes written demand therefor accompanied by a certificate
of the relevant Indemnified Person stating the amount of the
relevant Taxes and the calculation thereof. Provided that
payment in full shall have been made to the relevant
Indemnified Person in accordance with this section, the
Borrower shall have the sole right to determine whether and
to what extent the assessment shall be objected to, appealed
or otherwise contested or a refund sought of all or part of
any amount paid to any Canadian taxing authority under the
assessment and to take any proceedings in respect of such
contestation or refund in the name of the Indemnified Person
and to obtain and instruct counsel of its choice, all for
the sole account and at the sole expense of the Borrower.
E.(b)(iii) As soon as practicable after receipt of each
payment made pursuant to sections 3.2.1 or 3.2.2, the relevant
Indemnified Person shall take all reasonable steps to obtain any
refund, credit, allowance, remission or deduction from income
otherwise determined or tax otherwise payable, to which it may be
entitled from the taxation authorities of any relevant taxing
jurisdictions in respect of any payment of Canadian Taxes
referred to in section 3.2.1 or any payment of Taxes referred to
in section 3.2.2. If any such refund shall be received or due
payment of tax reduced by reason of such refund, credit,
allowance, remission or deduction, such Indemnified Person shall,
to the extent that it can do so without prejudice to its ability
to retain the amount of such refund, credit, allowance, remission
or deduction, forthwith notify the Borrower and simultaneously
account to it for an amount equal to the refund received or
credit, allowance, remission or deduction given (to the extent
the same shall not already have been taken into account under
section 3.2.2.2).
E.(b)(iv) Nothing contained in this section 3.2 shall
interfere with the right of a Bank to arrange its tax affairs in
whatever manner it may think fit and, in particular, it shall not
be under any obligation to claim relief from its tax liability in
respect of its payments, deductions or withholdings in priority
to any other claims, reliefs, credits or deductions available to
it.
E.(b)(v) If an Indemnified Person shall demand payment from
the Borrower under this Section 3.2, the Borrower may, upon
giving two Banking Days' notice to the Administrative Agent and
to such Indemnified Person within 30 Banking Days after receiving
such notice from the Indemnified Person requiring such payment,
elect to prepay to such Indemnified Person all or such part of
the amount of the Loans owing to such Indemnified Person as may
be specified by the Borrower in such notice. Any such notice so
given shall be irrevocable and the Borrower shall, on the second
Business Day after the giving of such notice, prepay to such
Indemnified Person the amount of the Loans required to be paid
pursuant to the giving of such notice together with all interest
accrued thereon and all amounts payable to such Indemnified
Person in connection with such prepayment pursuant to Section
3.5. Such Indemnified Person's Commitment so required to be
prepaid shall be correspondingly permanently reduced or
terminated (as the case may be) on the second Banking Day after
the giving of such notice (and, for greater certainty, no other
Indemnified Person shall be responsible therefor), and the
Aggregate Commitment shall be reduced by the amount and at the
time of any prepayments so required to be made.
E.(c) Change in Circumstances
If the introduction of or any change, subsequent to the
initial Borrowing Date, in any Applicable Law relating to any
Bank, or any change, subsequent to the initial Borrowing Date, in
the interpretation or application thereof by any Governmental
Body or compliance by any Bank with any request or direction of
any Governmental Body:
E.(c)(i) subjects such Bank to, or causes the withdrawal or
termination of a previously granted exemption with respect to,
any Taxes or changes the basis of taxation of payments due to any
Bank or increases any existing Taxes on payments of the
Obligations (other than Taxes of application to the overall
income of such Bank);
E.(c)(ii) imposes, modifies or deems applicable any reserve,
liquidity, cash margin, capital, special deposit, deposit
insurance or assessment, or any other regulatory or similar
requirement against assets held by, or deposits in or for the
account of, or loans by, or any other acquisition of funds for
loans by, such Bank;
E.(c)(iii) imposes any Taxes on reserves or deemed
reserves in respect of the undrawn portion of such Bank's
Rateable Portion of the Credit Facility;
E.(c)(iv) imposes on such Bank or requires there to be
maintained by such Bank any capital adequacy or additional
capital requirement (including, without limitation, a requirement
which affects such Bank's allocation of capital resources to its
obligations) in respect of such Bank's obligations hereunder or
imposes any other condition or requirement with respect to the
maintenance by such Bank of a contingent liability with respect
to any Bankers' Acceptance issued by it hereunder; or
E.(c)(v) imposes on such Bank any other condition or
requirement with respect to this Agreement (other than Taxes of
application to the overall income of such Bank);
and such occurrence has the effect of:
E.(c)(vi) increasing the cost to such Bank of agreeing to
make or making, maintaining or funding the Credit Facility, any
Advance, any Loan or any portion thereof;
E.(c)(vii) reducing the amount of the Obligations;
E.(c)(viii) directly or indirectly reducing the effective
return to such Bank under this Agreement or on its overall
capital as a result of entering into this Agreement or as a
result of any of the transactions or obligations contemplated by
this Agreement (other than a reduction resulting from a higher
rate of income tax being imposed on such Bank's overall income);
or
E.(c)(ix) causing such Bank to make any payment or to forego
any interest, fees or other return on or calculated by reference
to any sum received or receivable by such Bank hereunder;
then such Bank shall so advise the Administrative Agent, and the
Administrative Agent shall in each case forthwith advise the
Borrower accordingly and the Borrower shall promptly upon demand
by the Administrative Agent pay to the Administrative Agent on
behalf of such Bank such additional amounts as shall be
sufficient to fully indemnify such Bank for such additional cost,
reduction, payment, foregone interest or other return. A
certificate of such Bank documenting the relevant calculations
and submitted to the Borrower by the Administrative Agent shall
be conclusive and binding for all purposes, absent manifest
error. If the Administrative Agent shall demand payment of
additional amounts by the Borrower under this section in respect
of any Bank, the Borrower may, upon giving 2 Banking Days' notice
to the Administrative Agent within 30 Banking Days after
receiving notice from the Administrative Agent requiring payment
of such additional amounts, elect to prepay all such or part of
the amount of the Loans owing to such Bank as may be specified by
the Borrower in such notice. Any such notice so given shall be
irrevocable and the Borrower shall, on the second Banking Day
after the giving of such notice, prepay to such Bank the amount
of the Loans required to be paid pursuant to the giving of such
notice together with all interest accrued thereon and all amounts
payable to such Bank in connection with such prepayment pursuant
to section 3.5. Such Bank's Commitment so required to be prepaid
shall be correspondingly permanently reduced or terminated (as
the case may be) on the second Banking Day after the giving of
such notice (and, for greater certainty, no other Bank shall be
responsible therefor), and the Aggregate Commitment shall be
reduced by the amount and at the time of any prepayments so
required to be made.
E.(d) Illegality
If the introduction of or change, subsequent to the
initial Borrowing Date, to any present or future Applicable Law,
or any change, subsequent to the initial Borrowing Date, in the
interpretation or application thereof by any Governmental Body,
shall make it unlawful for any Bank to make or maintain any Loan
or any relevant portion thereof or to give effect to its
obligations in respect of such Loan as contemplated hereby, such
Bank may, by notice to the Borrower and to the Administrative
Agent, declare that its obligations hereunder in respect of such
Loan shall be terminated, and thereupon the Borrower shall prepay
to such Bank forthwith (or at the end of such period to which the
Bank shall in its discretion have agreed) all of the Obligations
to such Bank in respect of such Loan including all amounts
payable in connection with such prepayment pursuant to section
3.5. Such Bank's Commitment so required to be prepaid shall be
correspondingly permanently reduced or terminated (as the case
may be) on the giving of such notice (and, for greater certainty,
no other Bank shall be responsible therefor) and the Aggregate
Commitment shall be reduced by the amount and at the time of any
prepayments so required to be made. If there are any types of
Loans hereunder that are not so affected, the Borrower may
convert the Loans which are affected into one of the types of
Loans that are not affected.
E.(e) General Indemnity
The Borrower shall indemnify each Bank for all losses
(excluding lost profits), costs, expenses, damages and
liabilities (including, without limitation, any loss, cost,
expense, damage or liability sustained by such Bank in connection
with the liquidation or re-employment in whole or in part of
deposits or funds borrowed or acquired by it to make its Rateable
Portion of any Loan), which such Bank may sustain or incur: (i)
if for any reason a utilization does not occur on a date
specified therefor in any Borrowing Notice, (ii) if the Borrower
fails to give any notice required to be given by it hereunder, in
the manner and at the time specified herein, (iii) if for any
reason any payment of any Libor Loan or Bankers' Acceptance Loan,
or any portion thereof, occurs on a date which is not a Maturity
Date in respect thereof, or (iv) as a consequence of any other
default by the Borrower to repay any Obligations when required by
the terms of this Agreement, other than, in each case, as a
result of such Bank's gross negligence or wilful misconduct. A
certificate of the relevant Bank setting forth the amounts
necessary to indemnify such Bank in respect of such losses,
costs, expenses, damages or liabilities shall be prima facie
evidence of the amounts owing under this section 3.5.
E.(f) Environmental Indemnity
The Borrower shall indemnify the Administrative Agent
and each of the Banks and their respective officers, directors,
employees, agents and shareholders and shall hold each of them
harmless from and against any and all losses, liabilities,
damages, costs, expenses and claims (including legal fees on a
solicitor and his own client basis) in respect of (a) any
Applicable Law relating to the environment, including the
assertion of any Lien thereunder, (b) the presence of any
hazardous substance affecting the Borrower's property or any
adjacent real estate, or (c) the release of any hazardous
substance into the environment, other than as a result of the
gross negligence or wilful misconduct of the Agent or any of the
Banks. The Borrower's obligations and indemnification under this
section 3.6 shall survive the payment and satisfaction of all
Obligations and the termination of this Agreement. The
Administrative Agent and the Banks shall hold the benefit of this
indemnity in trust for those indemnified parties who are not
parties to this Agreement.
E.(g) Evidence of Indebtedness
E.(g)(i) The Administrative Agent shall maintain and
keep, at its Branch of Account, accounts showing the amount of
all Loans advanced by each of the Banks, including all Bankers'
Acceptances accepted by each of the Banks, from time to time and
the dates thereof and the interest, fees and other charges
accrued thereon or applicable thereto from time to time, and all
payments of principal (including prepayments), interest and fees
and other payments made by the Borrower to the Administrative
Agent from time to time. Such accounts maintained by the
Administrative Agent on behalf of itself and each of the Banks
shall, at all times and for all purposes, constitute prima facie
evidence, in the absence of manifest error, of the matters
recorded therein.
E.(g)(ii) The Obligations owing by the Borrower shall be
evidenced by a non-negotiable promissory note or other evidence
of obligation if, as and when required by the Administrative
Agent at the request of any Bank in accordance with its customary
practice, such promissory note to be duly executed and delivered
by the Borrower and to be in form and substance satisfactory to
such Bank. In the event that any such promissory note or other
evidence of obligation contains provisions which are inconsistent
with the terms of this Agreement, the provisions hereof shall
prevail to the extent of the inconsistency.
E.(h) Individual Obligations
The obligations of each Bank under this Agreement are
several. No Bank shall be responsible for any failure or alleged
failure on the part of any other Bank to duly perform its
obligations under the terms of this Agreement, nor shall the
obligations of the Borrower to any Bank be diminished or affected
by any failure or alleged failure on the part of any other Bank
to duly perform its obligations under the terms of this
Agreement.
F. BANKERS' ACCEPTANCES
F.(a) Procedure Relating to Bankers' Acceptances
Subject to the terms and conditions of this Agreement,
the Banks shall accept Bankers' Acceptances of the Borrower
denominated in Canadian dollars on the following terms and
conditions:
F.(a)(i) each Bankers' Acceptance presented by the Borrower
for acceptance by a Bank shall be properly drawn and executed on
the appropriate form of such Bank in amounts of $100,000 or
integral multiples thereof and shall mature on a Banking Day.
The Borrower shall be deemed to have presented Bankers'
Acceptances for acceptance by a Bank in any case where a
Borrowing Notice requesting a Bankers' Acceptance Loan has been
duly given to the Administrative Agent, provided such Bank has
drafts duly endorsed in blank by the Borrower in quantities
sufficient for such Bank to fulfil its obligations in respect of
the relevant Advance, Rollover or Conversion hereunder;
F.(a)(ii) the face amount of each draft of a Bankers'
Acceptance to be accepted by the Banks in connection with a
Bankers' Acceptance Loan shall be determined by the
Administrative Agent on a rateable basis as amongst the Banks,
except that if a draft that would otherwise be accepted by a Bank
would not have a face amount of $100,000 or an integral multiple
thereof, such face amount shall be reduced or increased at the
discretion of the Administrative Agent to an integral multiple of
$100,000;
F.(a)(iii) each draft of a Banker's Acceptance to be
accepted by the Banks in respect of a single Bankers' Acceptance
Loan shall have an identical BA Period;
F.(a)(iv) the Borrower shall not claim any days of grace for
the payment at maturity of any Bankers' Acceptance;
F.(a)(v) upon acceptance of any draft by a Bank as a
Bankers' Acceptance, the Borrower shall pay to such Bank the
Acceptance Fee applicable to such Bankers' Acceptance. Payment of
such fee shall be effected by such Bank deducting the amount
thereof from the Discount Proceeds realized by the purchase by
such Bank of such Banker's Acceptance;
F.(a)(vi) on each Borrowing Date, Rollover Date or
Conversion Date on which a Bankers' Acceptance Loan is to be
made, the Administrative Agent shall in accordance with section
6.3.2 advise the Borrower and each Bank of the Average BA
Discount Rate, and shall at the same time advise each Bank of the
amount of the Discount Proceeds in respect of the draft of the
Borrower to be accepted by it on such date;
F.(a)(vii) all Bankers' Acceptances accepted by a Bank
shall be purchased by such Bank. Upon the fulfilment of all
applicable conditions set out herein on the Borrowing Date, the
Bank shall accept the relevant draft of the Borrower as a
Bankers' Acceptance and shall, in case of an Advance of a
Bankers' Acceptance Loan, credit the appropriate account of the
Administrative Agent with an amount equal to the Discount
Proceeds, less the applicable Acceptance Fee. The Administrative
Agent shall make available to the Borrower in full the amounts so
credited for value on the same date;
F.(a)(viii) each Bank may at any time or from time to
time hold, sell, rediscount or otherwise dispose of any or all
Bankers' Acceptances purchased by it;
F.(a)(ix) in the case of a Rollover of a Bankers' Acceptance
Loan or portion thereof, each Bank accepting and purchasing a
Banker's Acceptance shall receive for its own account the
Discount Proceeds applicable to the new Bankers' Acceptance in
order to satisfy the continuing liability of the Borrower to such
Bank for the face amount of the maturing Bankers' Acceptance, and
the Borrower shall on the Maturity Date of the maturing Bankers'
Acceptance pay to the Administrative Agent for the account of
such Bank an amount equal to the difference between the face
amount of the maturing Bankers' Acceptance and the Discount
Proceeds from the new Bankers' Acceptance, together with the
Acceptance Fee applicable to the new Bankers' Acceptance;
F.(a)(x) in the case of a Conversion of a Loan to a
Bankers' Acceptance Loan, each Bank accepting and purchasing a
Bankers' Acceptance shall receive for its own account the
Discount Proceeds applicable to the Bankers' Acceptance in order
to satisfy the liability of the Borrower to such Bank for the
amount of its Rateable Portion of the converted Loan, and the
Borrower shall on the Conversion Date pay to the Administrative
Agent for the account of such Bank an amount equal to the
difference between the amount of such Bank's Rateable Portion of
the converted Loan and the Discount Proceeds from the Bankers'
Acceptance, together with the Acceptance Fee applicable to the
Bankers' Acceptance;
F.(a)(xi) upon the Administrative Agent making a declaration
or demand under section 10.2, the maximum amount of the
contingent liability of the Banks under all outstanding Bankers'
Acceptances shall immediately become due and payable by the
Borrower to the Administrative Agent for the account of the Banks
notwithstanding that the Banks have not at such date been
required to make payment under any such Bankers' Acceptances.
Any such amount paid to the Administrative Agent on behalf of the
Banks shall be held by the Administrative Agent in a separate
collateral account of the Borrower for set-off against future
indebtedness owing by the Borrower to the Banks in respect of
such Bankers' Acceptances and, pending such application, any
amounts paid to the Administrative Agent for the account of the
Banks shall bear interest at the rate established by the
Administrative Agent from time to time as that payable for
deposits of comparable size and having a term approximating the
period to the Maturity Date of such Bankers' Acceptance;
F.(a)(xii) to facilitate the acceptance of Bankers'
Acceptances, the Borrower shall from time to time as required
provide to each Bank instruments duly endorsed in blank by
authorized signatories of the Borrower, in quantities sufficient
for each such Bank to fulfil its obligations hereunder. Each
Bank shall use reasonable efforts to notify the Administrative
Agent, which shall in turn notify the Borrower, at any time such
Bank determines that it is holding an insufficient quantity of
drafts of the Borrower for the purposes hereof. No Bank shall be
responsible or liable for its failure to accept a Bankers'
Acceptance if the cause of such failure is, in whole or in part,
due to the failure of the Borrower to provide such instruments to
such Bank on a timely basis nor shall any Bank be liable for any
damage, loss or other claim arising by reason of any loss or
improper use of any such instrument except a loss or improper use
arising by reason of the gross negligence or wilful misconduct of
such Bank. In case any authorized signatory of the Borrower
whose signature shall appear on any draft shall cease to have
such authority before the acceptance of such draft, such
signature shall nevertheless be valid and sufficient for all
purposes as if such authority had remained in force at the time
of such acceptance;
F.(a)(xiii) the Borrower shall execute and deliver a
Bank's customary banker's acceptance reimbursement agreement upon
request of such Bank. To the extent that the provisions set
forth in such Bank's standard form bankers' acceptance
documentation are inconsistent with those set out herein, the
provisions of this Agreement shall prevail;
F.(a)(xiv) if, in the reasonable judgment of the Banks,
at any time or from time to time there no longer exists an active
market for bankers' acceptances accepted by the Banks, the Banks
shall not be obliged to accept drafts of the Borrower presented
under this Article 4, and, upon the making of such determination,
the Administrative Agent shall (at the direction of the Banks)
notify the Borrower thereof and the Bankers' Acceptance availment
option shall thereupon terminate.
G. LETTERS OF CREDIT
G.(a) Procedures Relating to Letters of Credit
G.(a)(i) Each Letter of Credit shall be issued by the
Administrative Agent in its name on behalf of all of the Banks in
accordance with their respective Rateable Portions.
G.(a)(ii) Notwithstanding any other provision hereof, the
Borrower may not request the issuance of any Letter of Credit
having a term which would extend beyond the Due Date.
G.(b) Reimbursement
G.(b)(i) The Borrower unconditionally and irrevocably
authorizes the Administrative Agent on behalf of the Banks to pay
the amount of any demand made on the Administrative Agent under
and in accordance with the terms of any Letter of Credit on
demand without requiring proof of the Borrower's agreement that
the amount so demanded was due and notwithstanding that the
Borrower may dispute the validity of any such demand or payment.
G.(b)(ii) The Borrower shall reimburse the Administrative
Agent (for the account of the Banks) on demand for any amounts
paid by it from time to time as contemplated by section 5.2.1
and, without limiting the foregoing, the Borrower shall indemnify
and save the Administrative Agent and the Banks harmless on
demand from and against any and all other losses (other than lost
profits), costs, damages, expenses, claims, demands or
liabilities which any of them may suffer or incur arising in any
manner whatsoever in connection with the making of any such
payments (including, without limitation, in connection with
proceedings to restrain the Administrative Agent from making, or
to compel the Administrative Agent to make, any such payment).
G.(c) Banks Not Liable
G.(c)(i) Neither the Administrative Agent nor any Bank
shall have any responsibility or liability for, or duty to
inquire into, the authorization, execution, signature,
endorsement, correctness, genuineness or legal effect of any
certificate or other document presented to the Administrative
Agent pursuant to any Letter of Credit and the Borrower fully and
unconditionally assumes all risks with respect to the same and,
without limiting the generality of the foregoing, all risks of
the acts or omissions of any beneficiary of any Letter of Credit
with respect to the use by any beneficiary of any Letter of
Credit. Neither the Administrative Agent nor any Bank shall not
be responsible:
G.(c)(i)(A) for the validity of certificates or other
documents delivered under or in connection with any Letter of
Credit that appear on their face to be in order, even if such
certificates or other documents should in fact prove to be
invalid, fraudulent or forged;
G.(c)(i)(B) for errors, omissions, interruptions or
delays in transmission or delivery of any messages by mail,
cable, telegraph, telefax or otherwise, whether or not they are
in code;
G.(c)(i)(C) for errors in translation or for errors in
interpretation of technical terms or for errors in the
calculation of amounts demanded under any Letter of Credit;
G.(c)(i)(D) for any failure or inability of the
Administrative Agent or any other Person to make payment under
any Letter of Credit as a result of any Applicable Law or by
reason of any control or restriction rightfully or wrongfully
exercised by any Person asserting or exercising governmental or
paramount powers; or
G.(c)(i)(E) for any other consequences arising in respect
of a failure by the Administrative Agent to honour a Letter of
Credit due to causes beyond the control of the Administrative
Agent;
and none of the above shall affect or impair any of the
rights or powers of the Banks hereunder or the obligations
of the Borrower under section 5.2.2. In furtherance and not
in limitation of the foregoing provisions, it is agreed that
any payment made by the Administrative Agent in good faith
under and in accordance with the terms of a Letter of Credit
shall be binding upon the Borrower and shall not result in
any liability of the Administrative Agent or any of the
Banks to the Borrower and shall not lessen the obligations
of the Borrower under section 5.2.2.
G.(c)(ii) Notwithstanding the provisions of this section
5.3, the Borrower shall not be responsible for, and neither the
Administrative Agent nor any Bank shall be relieved of
responsibility for, any wilful misconduct or gross negligence of
or by the Administrative Agent or any Bank.
G.(d) Letter of Credit Fees
The Borrower shall pay the Letter of Credit Fee to the
Administrative Agent for the account of the Banks in accordance
with their respective Rateable Portions in advance (i) in the
case of a Letter of Credit having a term of 3 months or less, for
the period from and including the date of issuance of the Letter
of Credit to and including the stated expiry date thereof, on the
date of issuance of the Letter of Credit, and (ii) in the case of
a Letter of Credit having a term longer than 3 months, on the
date of issuance of the Letter of Credit for the initial 3 month
period, and thereafter not later than the first Banking Day of
each subsequent 3 month period for such 3 month period (or lesser
period remaining in the term of such Letter of Credit), in each
case on an amount equal to the stated amount of the Letter of
Credit. Such Letter of Credit Fee shall be payable in the
Currency in which the applicable Letter of Credit is denominated.
The Borrower shall be entitled to a full pro rata rebate of the
Letter of Credit Fee paid if a Letter of Credit is cancelled
prior to the end of the period in respect of which the Letter of
Credit Fee has been paid. Any rebate shall be remitted to the
Agent by the issuing Bank promptly on demand and shall be
forwarded by the Agent to the Borrower promptly on receipt by the
Agent.
G.(e) Overdue Amounts
Without limiting any other provision of this Agreement,
if the Borrower shall fail to reimburse the Administrative Agent
on behalf of the Banks in respect of any payments made by the
Administrative Agent under a Letter of Credit as contemplated in
section 5.2.2, the Administrative Agent may at any time
thereafter notify the Banks of such failure and such notification
shall be deemed to have been delivery of a Borrowing Notice in
the amount and Currency of such payments on and subject to the
terms hereof. Each Bank shall forthwith credit the account of
the Administrative Agent with such Bank's Rateable Portion of
such payments, the amount of such payments shall be deemed to
constitute a Prime Rate Loan (if such payments were made in
Canadian dollars) or a Base Rate Loan (if such payments were made
in U.S. dollars) and, without limiting the terms and conditions
applicable to such Prime Rate Loan or Base Rate Loan, shall be
due and payable when such Prime Rate Loan or Base Rate Loan is
due and payable in accordance with the provisions hereof.
G.(f) Acceleration
Upon the Administrative Agent making a declaration or
demand under section 10.2, the maximum amount of the contingent
liability of the Administrative Agent and the Banks under any
Letter of Credit which is then outstanding shall immediately
become due and payable notwithstanding that the Administrative
Agent has not at such date been required to make payment on
behalf of the Banks under any such Letter of Credit. Any such
amount paid to the Administrative Agent for the account of the
Banks shall be held by the Administrative Agent for the account
of the Banks in a separate collateral account of the Borrower as
security for the repayment of future indebtedness of the Borrower
to the Banks in respect of Letters of Credit which are drawn
down, and, pending the expiry of all outstanding Letters of
Credit, any amounts paid to the Administrative Agent for the
account of the Banks shall bear interest at the rate established
by the Administrative Agent from time to time as that payable in
respect of 30 day deposits for similar amounts.
G.(g) Conflict
Each Letter of Credit shall be subject to the
Administrative Agent's customary letter of credit terms and
procedures from time to time in effect and shall be in a form
acceptable to the Administrative Agent and the Borrower. The
Borrower shall execute and deliver such standard form
indemnities, bonds and other assurances as the Administrative
Agent or any of the Banks may reasonably require from time to
time with respect to Letters of Credit. A Letter of Credit shall
in no event contain provisions requiring the Administrative Agent
to satisfy itself, prior to payment thereunder, as to any
conditions for a drawing thereunder other than the presentation
of prescribed documents. If the provisions set forth in the
Administrative Agent's customary letter of credit documentation
set forth terms of availability or cross-collateralization of
security beyond or inconsistent with that set forth herein, the
provisions of this Agreement in respect thereof shall prevail.
H.
INTEREST AND FEES
H.(a) Interest Rates
H.(a)(i) Prime Rate Loans shall bear interest at the Prime
Rate plus the Applicable Margin.
H.(a)(ii) Base Rate Loans shall bear interest at the Base
Rate plus the Applicable Margin.
H.(a)(iii) Libor Loans shall bear interest at Libor plus
the Applicable Margin.
H.(b) Calculation and Payment of Interest
H.(b)(i) Interest on Prime Rate Loans shall accrue from day
to day, shall be calculated on the basis of the actual number of
days elapsed and on the basis of a year of 365 or 366 days, as
the case may be, and shall be payable to the Administrative Agent
for the account of the Banks in Canadian dollars in arrears on
the last Banking Day of each calendar month (or, if not a Banking
Day, on the immediately preceding Banking Day). For greater
certainty, where the rate applicable to a Prime Rate Loan is
changed, interest shall be charged for the day on which such
change is effective on the basis of the new rate.
H.(b)(ii) Interest on Base Rate Loans shall accrue from day
to day, shall be calculated on the basis of the actual number of
days elapsed and on the basis of a year of 365 or 366 days, as
the case may be days, and shall be payable to the Administrative
Agent for the account of the Banks in U.S. dollars in arrears on
the last Banking Day of each calendar month (or, if not a Banking
Day, on the immediately preceding Banking Day). For greater
certainty, where the rate applicable to a Base Rate Loan is
changed, interest shall be charged for the day on which such
change is effective on the basis of the new rate.
H.(b)(iii) Interest on Libor Loans shall accrue from day
to day, shall be calculated on the basis of the actual number of
days elapsed and on the basis of a year of 360 days, and shall be
payable to the Administrative Agent for the account of the Banks
in U.S. dollars in arrears (i) on the last day of the relevant
Interest Period, and (ii) if any Interest Period is longer than
three months, the last Banking Day of each three month period
during such Interest Period.
H.(c) Determination of Reference Rates
H.(c)(i) The Administrative Agent shall, at or about 12:00
noon (Toronto time) on the second Banking Day prior to the first
day of each Interest Period, determine Libor for such Interest
Period, and as soon thereafter as is reasonably practicable
notify the Borrower and each Bank of Libor as determined by the
Administrative Agent on such date.
H.(c)(ii) The Administrative Agent shall, at or about 10:00
a.m. (Toronto time) on the first day of each BA Period, contact
each Bank in order to ascertain its BA Discount Rate for such day
for the purposes of determining the Average BA Discount Rate;
provided that if one or more of the Banks does not furnish a
quotation of its BA Discount Rate to the Administrative Agent for
any BA Period, the Average BA Discount Rate for such BA Period
shall be based upon any quotations furnished to the
Administrative Agent by the other Banks or Bank. The
Administrative Agent shall as soon thereafter as is reasonably
practicable on the first day of each BA Period notify the
Borrower and each Bank of the Average BA Discount Rate as
determined by the Administrative Agent on such date.
H.(c)(iii) Notices required to be given by the
Administrative Agent to the Borrower and the Banks from time to
time of Libor under subsection 6.3.1 and of the Average BA
Discount Rate under subsection 6.3.2 shall be deemed to be duly
given if given in accordance with Section 12.4.
H.(d) Commitment Fee
From and after the date of this Agreement, the Borrower
shall pay to the Administrative Agent for the account of the
Banks on the last Banking Day of each calendar month, in arrears,
a commitment fee equal to one-quarter percent (0.25%) per annum
calculated daily (and based on a year of 365 days) on the amount
by which the Aggregate Commitment exceeds the Canadian Dollar
Value of the Loans outstanding on each day in such month.
H.(e) Structuring Fee
The Borrower shall pay a structuring fee of $75,000 to
the Administrative Agent for the account of the Banks upon
execution of this Agreement.
H.(f) Agency Fee
The Borrower shall pay to the Administrative Agent, in
consideration for its services as Administrative Agent hereunder
and for its own account, an agency fee at the times, in the
amounts and in the manner set forth in the letter agreement
between the Borrower and the Administrative Agent dated the date
hereof.
H.(g) Payment of Costs and Expenses
Whether or not the Borrower takes advantage of the
Credit Facility, the Borrower shall pay to the Administrative
Agent and each of the Banks on demand all costs and expenses of
the Administrative Agent, the Banks, their respective agents,
officers, employees and representatives and any receiver or
receiver-manager appointed by any of them or by a court in
connection with this Agreement or the Credit Facility, including,
without limitation:
H.(g)(i) the preparation of any of the Loan Documents, any
actual or proposed amendment or modification hereof or thereof or
any waiver hereunder or thereunder and all instruments
supplemental or ancillary thereto; and
H.(g)(ii) the defence, establishment, protection or
enforcement of any of the rights or remedies of the
Administrative Agent or any of the Banks under any of the Loan
Documents including, without limitation, all costs and expenses
of establishing the validity and enforceability of, or of
collection of amounts owing under, any of the Loan Documents;
including, without limitation, all of the fees, expenses and
disbursements of counsel to the Banks, on a solicitor and his own
client basis, incurred in connection therewith, and including all
sales or value-added taxes payable by the Administrative Agent or
any of the Banks (whether refundable or not) on all such costs
and expenses.
H.(h) Interest on Overdue Amounts
The Borrower acknowledges that if any Obligations
become overdue it shall be in the best interests of both the
Banks and the Borrower for the Banks to fund such overdue
Obligations on a floating rate basis, notwithstanding that the
Obligations may not have been floating rate obligations before
becoming due. Therefore, all overdue amounts owing or deemed to
be owing hereunder ("overdue amounts"), whether in respect of
principal, interest, fees, expenses or otherwise, both before and
after judgment, and in the case of expenses from the date which
is 20 days after the date on which an invoice in respect of such
expenses is submitted to the Borrower, shall bear interest at a
rate per annum determined on a daily basis that is equal to the
Prime Rate (in the case of overdue amounts denominated in
Canadian dollars) or the Base Rate (in the case of overdue
amounts denominated in U.S. dollars) plus (in each case) 3%, in
each case calculated on the basis of the actual number of days
elapsed in a year of 365 days or 366 days in the case of a leap
year. Such interest on overdue amounts shall accrue from day to
day, be payable in arrears on demand and shall be compounded
monthly on the last Banking Day of each calendar month.
I. REPRESENTATIONS AND WARRANTIES
I.(a) Representations and Warranties
The Borrower represents and warrants to the
Administrative Agent and the Banks as follows:
I.(a)(i) Incorporation and Status. It is duly incorporated
and validly existing under the laws of its jurisdiction of
incorporation and has the corporate power and capacity to own its
properties and assets and to carry on its business as presently
carried on by it;
I.(a)(ii) Power and Capacity. It has the corporate power
and capacity to enter into, and perform its obligations under,
each of the Loan Documents to which it is a party;
I.(a)(iii) Due Authorization. It has taken all
necessary corporate action to authorize the execution, delivery
and performance of each of the Loan Documents to which it is a
party;
I.(a)(iv) No Contravention. The execution and delivery of
this Agreement and the other Loan Documents and the performance
by the Borrower of its obligations thereunder (i) does not and
will not contravene, breach or result in any default under the
articles or by-laws of the Borrower or under any agreement,
instrument, license or permit to which the Borrower is a party or
to which the Borrower is subject or under any Applicable Law,
except to the extent that any contravention or breach of or
default under such agreement, instrument, license, permit or
Applicable Law would not, in the aggregate, have a material
adverse effect on the ability of the Borrower to perform its
obligations under the Loan Documents, and (ii) will not result in
or permit the acceleration of the maturity of any indebtedness,
liability or obligation of the Borrower;
I.(a)(v) No Consents Required. No authorization, consent
or approval of, or filing with or notice to, any Person
(including any Governmental Body) is required in connection with
the execution, delivery or performance of any of the Loan
Documents by the Borrower;
I.(a)(vi) Enforceability. Each of the Loan Documents to
which the Borrower is a party constitutes, or upon execution and
delivery will constitute, a valid and binding obligation of the
Borrower enforceable against it in accordance with its terms;
I.(a)(vii) Title. Subject only to Permitted
Encumbrances, the Borrower has good and marketable title to its
real and personal property, free and clear of any Liens;
I.(a)(viii) Financial Statements. The unaudited
financial statements of the Borrower dated as of and for the
period ending September 30, 1994, in the form delivered by the
Borrower to the Banks, have been prepared in accordance with
generally accepted accounting principles (subject to the absence
of footnotes, to normal year-end adjustments and to the fact that
the financial statements may not conform with generally accepted
accounting principles in respect only of presentation) and fairly
present the financial condition of the Borrower and the financial
information presented therein for the period and as at the date
thereof. Since the date of the last financial statements
delivered to the Banks there has been no development which has
had or will have a material adverse effect upon the business,
property, financial condition or prospects of the Borrower;
I.(a)(ix) No Litigation. There is no court, administrative,
regulatory or similar proceeding (whether civil, quasi-criminal,
or criminal); arbitration or other dispute settlement procedure;
investigation or enquiry by any Governmental Body; or any similar
matter or proceeding (collectively "proceedings") against or
involving the Borrower (whether in progress or threatened) which,
if determined adversely to the Borrower, would materially
adversely affect its business, property, financial condition or
prospects; no event has occurred which might give rise to any
proceedings and there is no judgment, decree, injunction, rule,
award or order of any Governmental Body outstanding against the
Borrower which has or may have a material adverse affect on its
business, property, financial condition or prospects;
I.(a)(x) No Default. The Borrower is not in default or
breach under any material commitment or obligation and there
exists no state of facts which, after notice or the passage of
time or both, would constitute such a default or breach;
I.(a)(xi) All Material Information Supplied. As of the date
hereof, the Borrower has provided to each of the Banks all
material financial information relating to the financial
condition, business and prospects of the Borrower and the
Guarantor (other than projections) and all such information is
true, accurate and complete in all material respects and omits no
material fact necessary to make such information not misleading.
With respect to all projections furnished by or on behalf of the
Borrower and made available to the Banks relating to the
business, prospects, properties, financial condition or
operations of the Borrower or the Guarantor: (i) all facts
stated as such therein were true and complete in all material
respects as of the date of such projections, (ii) all facts upon
which the projections therein contained are based were true and
complete in all material respects as of the date of such
projections and no material fact was omitted from that basis, and
(iii) all estimates and assumptions made on that basis were made
in good faith and believed to be reasonable at the time made, it
being recognized by the Banks that such projections as to future
events are not to be viewed as facts and that actual results
during the period or periods covered thereby may differ from such
projections;
I.(a)(xii) Authorized and Issued Capital. No Person has
any agreement, right or option to acquire any shares or
securities convertible into, or other rights to acquire, shares
in the capital stock of the Borrower. As of the date hereof, the
Borrower has no Subsidiaries.
I.(b) Survival of Representations and Warranties
The Borrower covenants that the representations and
warranties made by it in this Article 7 shall be true and correct
on the date that this Agreement is signed, on each Borrowing Date
and on each date of an availment by the Borrower under the
Overdraft Facility with the same effect as if such
representations and warranties had been made and given on and as
of such day, notwithstanding any investigation made at any time
by or on behalf of the Administrative Agent or any of the Banks;
except that if any such representation and warranty is
specifically given in respect of a particular date or particular
period of time and relates only to such date or period of time,
then such representation and warranty shall continue to be given
as at such date or for such period of time.
J. COVENANTS
J.(a) Affirmative Covenants
So long as any Obligations remain outstanding or so
long as the Borrower has the right to utilize the Credit
Facility, the Borrower covenants and agrees to and in favour of
the Administrative Agent and the Banks that:
J.(a)(i) Punctual Payment. The Borrower shall pay or cause
to be paid all Obligations falling due hereunder on the dates and
in the manner specified herein;
J.(a)(ii) Conduct of Business. The Borrower shall do or
cause to be done all things necessary or desirable to maintain
its corporate existence in its present jurisdiction of
incorporation, to maintain its corporate power and capacity to
own its properties and assets, and to carry on its business in a
commercially reasonable manner in accordance with normal industry
standards;
J.(a)(iii) Compliance with Applicable Law and Contracts.
The Borrower shall comply with the requirements of all Applicable
Law, all obligations which, if contravened, could give rise to a
Lien, other than a Permitted Encumbrance, over any of its
property, and all insurance policies and all contracts to which
it is a party or by which it or its properties are bound, in each
case non-compliance with which would, singly or in the aggregate,
have a material adverse effect upon its business, property,
financial condition or prospects;
J.(a)(iv) Maintenance of Property. The Borrower shall
maintain its property in good repair, working order and condition
(reasonable wear and tear excepted);
J.(a)(v) Inspections. The Borrower shall permit each of
the Banks and their authorized employees, representatives and
agents, upon giving at least 24 hours' prior notice, to (i) visit
and inspect its properties during normal business hours, (ii)
inspect and make extracts from and copies of its books and
records, and (iii) discuss with management of the Borrower its
businesses, property, financial condition and prospects;
J.(a)(vi) Notice of Litigation and Other Matters. The
Borrower shall, as soon as practicable after a Responsible
Officer shall become aware of the same, give notice to the
Administrative Agent of the following events:
J.(a)(vi)(A) the commencement of any action, proceeding,
arbitration or investigation against or in any other way relating
adversely to the Borrower or any of its properties or assets
which, if adversely determined, could singly or when aggregated
with all other such actions, proceedings, arbitrations and
investigations have a material adverse effect on its business,
property, financial condition or prospects;
J.(a)(vi)(B) any development which has had or will have a
material adverse effect upon its business, property, financial
condition or prospects; and
J.(a)(vi)(C) any Default or Event of Default, or the
occurrence or non-occurrence of any event which constitutes, or
which with the passage of time or giving of notice or both would
constitute, a material default under any other agreement to which
the Borrower is a party or by which it or any of its properties
may be bound, giving in each case the details thereof and
specifying the action proposed to be taken with respect thereto;
J.(a)(vii) Interim Financial Statements. The Borrower
shall, as soon as practicable and in any event within 50 days
after the end of each of the first three quarters of each fiscal
year, deliver to the Administrative Agent (in a sufficient number
of copies to permit delivery thereof to each of the Banks) the
interim unaudited financial statements of the Borrower;
J.(a)(viii) Annual Financial Statements. The Borrower
shall, as soon as practicable and in any event within 100 days
after the end of each fiscal year, deliver to the Administrative
Agent (in a sufficient number of copies to permit delivery
thereof to each of the Banks) the annual unaudited financial
statements of the Borrower;
J.(a)(ix) Officers' Certificate. The Borrower shall deliver
to the Administrative Agent (in a sufficient number of copies to
permit delivery to each of the Banks), together with the
financial statements in sections 8.1.7 and 8.1.8, an officers'
certificate certifying (i) that such financial statements were
prepared in accordance with generally accepted accounting
principles (subject to the absence of footnotes, to normal year-
end adjustments in the case of interim unaudited financial
statements and to the fact that the financial statements may not
conform with generally accepted accounting principles in respect
only of presentation) and fairly present the financial condition
of the Borrower and the financial information presented therein
for the period and as at the date thereof, and (ii) that no
Default or Event of Default has occurred hereunder or, if any
Default or Event of Default has occurred, specifying the relevant
particulars and the period of existence thereof and the action
taken or proposed to be taken by the Borrower with respect
thereto;
J.(a)(x) Other Financial Information. As soon as
practicable following a request therefor from the Administrative
Agent, the Borrower shall furnish to the Administrative Agent and
each of the Banks such other financial information and
projections as the Administrative Agent may reasonably request
from time to time;
J.(a)(xi) Insurance. The Borrower shall keep its
properties and assets insured with reputable insurers, in amounts
not less than the replacement cost thereof and against such
losses as the Administrative Agent (at the direction of the
Banks) shall reasonably require or, in the absence of such
requirement, against such losses as are insured against by
comparable corporations engaged in comparable businesses. The
Borrower shall maintain public liability insurance in such
amounts and against such risks as is normally carried by
comparable corporations engaged in comparable businesses. The
Borrower shall, on request, provide the Administrative Agent with
copies of all insurance policies.
J.(b) Banks Entitled to Perform Covenants
If the Borrower fails to perform any covenant contained
in section 8.1, or in any other provision of any Loan Document,
and an Event of Default has occurred and is continuing, the
Administrative Agent or any Bank may, in its discretion, perform
any such covenant capable of being performed by it and if any
such covenant requires the payment of money it may make such
payment. All sums so expended by the Administrative Agent or any
Bank shall be deemed to be a Prime Rate Loan payable by the
Borrower on demand. If no Event of Default has occurred and is
continuing, the Administrative Agent shall first give the
Borrower five Banking Days' prior notice in writing of such
failure to perform any covenant before it makes any payment to
remedy such default.
J.(c) Negative Covenants
So long as any Obligations remain outstanding or so
long as the Borrower has the right to utilize the Credit
Facility, the Borrower covenants and agrees to and in favour of
the Administrative Agent and the Banks that it shall not:
J.(c)(i) Encumber Property. create, grant, assume or
suffer to exist any Lien upon any of its properties or assets
other than Permitted Encumbrances;
J.(c)(ii) Amalgamations, etc. enter into any transaction by
way of reorganization, consolidation, amalgamation, liquidation,
or transfer or sale in connection with such reorganization,
consolidation, amalgamation or liquidation whereby all or any
material portion of the property and assets of the Borrower would
become the property of any other Person or, in the case of any
such amalgamation, of the continuing corporation resulting
therefrom;
J.(c)(iii) Indebtedness. create, incur, assume, or
otherwise become directly or indirectly liable upon or in respect
of, or suffer to exist, Indebtedness ranking or purporting to
rank prior to the Obligations, other than Indebtedness secured by
Permitted Encumbrances; or
J.(c)(iv) Disposition of Assets. sell, lease, consign or
otherwise dispose of, or agree to sell, lease, consign or dispose
of, any assets out of the ordinary course of business, other than
(i) assets which are worn out, unserviceable, obsolete or no
longer required in the operation of the Borrower's business, (ii)
accounts receivable disposed of pursuant to a securitization
thereof in respect of which the Agent shall have received, not
less than 5 days prior to the date of such securitization, an
opinion from a firm of chartered accountants acceptable to the
Banks that the sale of accounts receivable pursuant to such
securitization constitutes a sale for accounting purposes, which
opinion shall be substantially in the form of a schedule to be
agreed upon by the parties hereto by February 28, 1995 and to be
attached to this Agreement, and (iii) other assets to the extent
such dispositions do not, in the aggregate, have a material
adverse effect on the ability of the Borrower to perform its
obligations under the Loan Documents.
K. CONDITIONS PRECEDENT
K.(a) Conditions Precedent to Initial Advance
The obligations of the Banks to make available the
Credit Facility or any part thereof to the Borrower are subject
to compliance, on or before the initial Borrowing Date, with each
of the following conditions precedent, which conditions precedent
are for the sole and exclusive benefit of the Banks and may be
waived in writing by the Administrative Agent (at the direction
of all of the Banks in their sole discretion):
K.(a)(i) the representations and warranties set out in
Article 7 shall be true and correct on the initial Borrowing Date
as if made on and as of such date;
K.(a)(ii) no Default or Event of Default shall have occurred
and be continuing nor shall there be any Default or Event of
Default after giving effect to the proposed Advance on the
initial Borrowing Date;
K.(a)(iii) the Administrative Agent shall have received
the following in form and substance satisfactory to the Banks:
K.(a)(iii)(A) a Borrowing Notice;
K.(a)(iii)(B) officers' certificates dated the initial
Borrowing Date certifying that attached thereto are true and
correct copies of the following documents, and that such
documents are in full force and effect, unamended:
K.(a)(iii)(B)(I) the articles or other charter documents
and by-laws of the Borrower and the Guarantor;
K.(a)(iii)(B)(II) certificates of incumbency including
sample signatures of officers and directors of the Borrower and
the Guarantor who have executed any of the Loan Documents; and
K.(a)(iii)(B)(III) the resolutions or other documentation
evidencing that all necessary action, corporate or otherwise,
has been taken by each of the Borrower and the Guarantor to
authorize the execution, delivery and performance of the Loan
Documents to which it is a party;
K.(a)(iii)(C) a certificate of status, certificate of good
standing or similar certificate with respect to the jurisdiction
of incorporation of the Borrower and the Guarantor;
K.(a)(iii)(D) an officers' certificate of the Borrower
dated the initial Borrowing Date confirming sections 9.1.1 and
9.1.2;
K.(a)(iii)(E) the Guarantee;
K.(a)(iii)(F) promissory notes, if requested by any Bank;
K.(a)(iii)(G) an opinion of counsel acceptable to the Banks
as to matters relating to the Borrower in the form set out in
Schedule D dated the initial Borrowing Date;
K.(a)(iii)(H) an opinion of counsel to the Guarantor,
Xxxxxxx & XxXxxxxx of Los Angeles, California, as to matters
relating to the Guarantor in the form set out in Schedule E dated
the initial Borrowing Date;
K.(a)(iii)(I) such other documentation or information as
the Administrative Agent shall have reasonably requested;
K.(a)(iv) the Administrative Agent shall have received
payment in full of all fees payable by the Borrower on or prior
to the initial Borrowing Date hereunder or under any other Loan
Document; and
K.(a)(v) the Borrower shall have executed the letter
agreement referred to in section 6.6 and shall have delivered the
same to the Administrative Agent.
K.(b) Conditions Precedent to Subsequent Advances
The obligation of the Banks to make any subsequent
Advances under the Credit Facility is subject to compliance, on
or before the relevant Borrowing Date, with each of the following
conditions precedent, which conditions precedent are for the sole
and exclusive benefit of the Banks and may be waived in writing
by the Administrative Agent (at the direction of the Majority
Banks in their sole discretion):
K.(b)(i) the representations and warranties set out in
Article 7 shall be true and correct on the relevant Borrowing
Date as if made on and as of such date;
K.(b)(ii) no Default or Event of Default shall have occurred
and be continuing nor shall there be any Default or Event of
Default after giving effect to the proposed Advance;
K.(b)(iii) the Administrative Agent shall have received
a Borrowing Notice and an officers' certificate of the Borrower,
dated as of the relevant Borrowing Date, confirming sections
9.2.1 and 9.2.2 and such other documentation or information as
the Administrative Agent shall have reasonably requested.
L. EVENTS OF DEFAULT AND REMEDIES
L.(a) Events of Default
The occurrence of any of the following events shall
constitute an Event of Default:
L.(a)(i) default by the Borrower in payment (i) when due of
any principal amount of any Loans or (ii) within three days of
the due date of any interest or any other amounts due under this
Agreement;
L.(a)(ii) default by the Borrower in the observance of the
covenant in section 8.3.1;
L.(a)(iii) default by the Borrower or the Guarantor in
the performance or observance of any other covenant, condition or
obligation contained in any Loan Document to which it is a party
unless such default is remedied within 10 days after notice
thereof by the Administrative Agent to the Borrower or the
Guarantor, as the case may be;
L.(a)(iv) any representation or warranty made by the
Borrower or the Guarantor herein or in any other Loan Document is
found to be false or incorrect in any way so as to make it
materially misleading when made or deemed to have been made;
L.(a)(v) the Borrower or the Guarantor fails to pay to any
Person any Indebtedness (other than Obligations or obligations
under the U.S. Credit Agreement, as hereafter amended,
supplemented or restated from time to time, or under any
replacement of such agreement pursuant to which one or more of
the current lenders under such agreement lends or agrees to lend
money to the Guarantor or an Affiliate of the Guarantor) in
excess of $5,000,000 in aggregate when due (whether at scheduled
maturity or by required prepayment, acceleration, demand or
otherwise) and such failure continues after any applicable grace
period;
L.(a)(vi) the Borrower or the Guarantor admits its inability
to pay its debts generally as they become due or otherwise
acknowledges its insolvency;
L.(a)(vii) the Borrower or the Guarantor institutes any
proceeding or takes any corporate action or executes any
agreement to authorize its participation in or commencement of
any proceeding:
L.(a)(vii)(A) seeking to adjudicate it a bankrupt or
insolvent, or
L.(a)(vii)(B) seeking liquidation, dissolution, winding up,
reorganization, arrangement, protection, relief or composition of
it or any of its property or debt or making a proposal with
respect to it under any law relating to bankruptcy, insolvency,
reorganization or compromise of debts or other similar laws
(including, without limitation, any application under the
Companies' Creditors Arrangement Act (Canada) or any
reorganization, arrangement or compromise of debt under the laws
of its jurisdiction of incorporation);
L.(a)(viii) any proceeding is commenced against or
affecting the Borrower or the Guarantor:
L.(a)(viii)(A) seeking to adjudicate it a bankrupt or
insolvent;
L.(a)(viii)(B) seeking liquidation, dissolution, winding up,
reorganization, arrangement, protection, relief or composition of
it or any of its property or debt or making a proposal with
respect to it under any law relating to bankruptcy, insolvency,
reorganization or compromise of debts or other similar laws
(including, without limitation, any reorganization, arrangement
or compromise of debt under the laws of its jurisdiction of
incorporation); or
L.(a)(viii)(C) seeking appointment of a receiver, trustee,
agent, custodian or other similar official for it or for any
substantial part of its properties and assets;
and such proceeding is not being contested in good faith by
appropriate proceedings promptly initiated and diligently
conducted by the Borrower or the Guarantor, as the case may
be;
L.(a)(ix) any creditor of the Borrower or the Guarantor, or
any other Person, shall privately appoint a receiver, trustee or
similar official for any substantial part of the properties and
assets of the Borrower or the Guarantor, and such appointment is
not being contested in good faith by appropriate proceedings
promptly initiated and diligently conducted by the Borrower or
the Guarantor, as the case may be;
L.(a)(x) any execution, distress or other enforcement
process, whether by court order or otherwise, becomes enforceable
against any substantial property of the Borrower or the Guarantor
and remains unsatisfied for such period as would permit such
property to be sold thereunder, unless such process is being
contested in good faith by appropriate proceedings promptly
initiated and diligently conducted by the Borrower or the
Guarantor, as the case may be;
L.(a)(xi) if there is any material adverse change in the
business, earnings, properties, condition (financial or
otherwise) or operations of the Guarantor and its Subsidiaries,
taken as a whole;
L.(a)(xii) if, at any time after execution and delivery
thereof, this Agreement or the Guarantee ceases to be in full
force and effect (unless within five days of notice of the same
being given by the Administrative Agent to the Borrower such Loan
Document again has full force and effect as if it had always had
full force and effect) or if this Agreement or the Guarantee is
declared by a court or tribunal of competent jurisdiction to be
null and void or the validity or enforceability thereof is
contested by the Borrower or the Guarantor, or the Borrower or
the Guarantor denies in writing that it has any or further
liability or obligations thereunder;
L.(a)(xiii) the Guarantor ceases to beneficially own,
directly or indirectly, at least 51% of the issued and
outstanding Voting Shares of the Borrower; or
L.(a)(xiv) an event of default or any other event which
entitles a lender to accelerate payment of amounts outstanding
occurs and is not waived under the U.S. Credit Agreement, as
hereafter amended, supplemented or restated from time to time or
under any replacement of such agreement pursuant to which one or
more of the current lenders under such agreement lends or agrees
to lend money to the Guarantor or an Affiliate of the Guarantor.
L.(b) Remedies Upon Default
Upon the occurrence of any Event of Default, the
Administrative Agent may, and at the direction of the Banks
shall, by notice given to the Borrower or the Guarantor, as the
case may be:
L.(b)(i) declare the unutilized portion (if any) of the
Aggregate Commitment to be terminated;
L.(b)(ii) declare all Obligations to be immediately due and
payable;
L.(b)(iii) demand payment under the Guarantee;
L.(b)(iv) demand that funds in the aggregate face amounts
and the applicable Currency of all outstanding Bankers'
Acceptances and Letters of Credit be forthwith deposited by the
Borrower into a cash collateral account established with the
Administrative Agent on behalf of the Banks on terms and
conditions satisfactory to the Administrative Agent; and
L.(b)(v) take such actions and commence such proceedings as
may be permitted at law or in equity (whether or not provided for
herein or in the Loan Documents) at such times and in such manner
as the Administrative Agent (at the direction of the Banks in
their sole discretion) may consider expedient,
all without, except as may be required by Applicable Law, any
additional notice, presentment, demand, protest, notice of
protest, dishonour or any other action. The rights and remedies
of the Administrative Agent and the Banks hereunder are
cumulative and are in addition to and not in substitution for any
other rights or remedies provided by Applicable Law or by any of
the Loan Documents.
L.(c) Set-Off
Upon the occurrence of an Event of Default and a
declaration or demand by the Administrative Agent pursuant to
section 10.2, each Bank is hereby authorized by the Borrower at
any time and from time to time without notice to the Borrower to
combine, consolidate and merge all or any of the Borrower's
accounts with, and liabilities to, such Bank and to set off,
appropriate and apply any and all deposits by or for the benefit
of the Borrower with any branch of such Bank, general or special,
matured or unmatured, and any other indebtedness and liability of
such Bank to the Borrower, matured or unmatured, against and on
account of the Obligations when due, notwithstanding that the
balances of the accounts, deposits or Obligations may or may not
be expressed in the same Currency.
L.(d) Distributions
All distributions under or in respect of any of the
Loan Documents shall be held by the Administrative Agent on
account of the Obligations without prejudice to any claim by the
Administrative Agent and the Banks for any deficiency after such
distributions are received by the Administrative Agent and the
Borrower shall remain liable for any such deficiency. All such
distributions shall be applied promptly to such part of the
Obligations as is determined by the Banks in their sole
discretion or, in the event the Banks fail to advise the
Administrative Agent of their determination, by the
Administrative Agent. The Banks may at any time change any
appropriation of any such distributions or other moneys received
by the Administrative Agent and may reapply the same to any other
part of the Obligations as the Banks may from time to time in
their absolute discretion determine.
M. THE ADMINISTRATIVE AGENT AND THE ADMINISTRATION OF
THE CREDIT FACILITIES
M.(a) Appointment and Authorization
M.(a)(i) Each Bank hereby irrevocably appoints and
authorizes the Administrative Agent to be its attorney in its
name and on its behalf to exercise such rights or powers granted
to such Bank under this Agreement and the other Loan Documents on
the terms hereof and thereof, together with such powers as are
reasonably incidental thereto.
M.(a)(ii) As to any matters not expressly provided for by
this Agreement or the Loan Documents (including, without
limitation, enforcement thereof), the Administrative Agent shall
not be required to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting) upon
the instructions of the Majority Banks, and such instructions
shall be binding upon all of the Banks. The Administrative Agent
shall not be required to take any action which exposes the
Administrative Agent to liability in such capacity, which could
result in the Administrative Agent's incurring any costs and
expenses not contemplated by this Agreement or which is contrary
to this Agreement or Applicable Law.
M.(b) Duties and Obligations of Administrative Agent
Neither the Administrative Agent nor any of its
directors, officers, agents or employees (and, for purposes
hereof, the Administrative Agent shall be deemed to be
contracting as agent for and on behalf of such Persons) shall be
liable to any Bank for any action taken or omitted to be taken by
it or them under or in connection with this Agreement or any of
the other Loan Documents except for its or their own gross
negligence or wilful misconduct. Without limiting the generality
of the foregoing, the Administrative Agent:
i. may assume that there has been no assignment or transfer by
any Bank of its rights hereunder unless and until all of the
requirements of section 12.7 have been complied with;
ii. may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants
or experts;
iii. shall incur no liability under or in respect of this
Agreement or any of the other Loan Documents by acting upon any
notice, consent, certificate or other instrument or writing
(which may be by facsimile or other means of electronic
communication) believed by it to be genuine and signed or sent by
the proper party or parties or by acting upon any representation
or warranty of the Borrower made or deemed to be made hereunder
or thereunder;
iv. may assume that no Default or Event of Default has occurred
and is continuing unless it has actual knowledge to the contrary;
v. may rely as to any matters of fact which might reasonably be
expected to be within the knowledge of any Person upon a
certificate signed by or on behalf of such Person;
vi. does not make any warranty or representation to any Bank nor
shall it be responsible to any Bank for the accuracy or
completeness of the data made available to any of the Banks in
connection with the negotiation of this Agreement, or for any
statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement;
vii. shall not have any duty to ascertain or to enquire as to the
performance or observance of any of the terms, covenants or
conditions of this Agreement or any of the other Loan Documents
on the part of the Borrower or the Guarantor or to inspect the
property (including the books and records) of the Borrower or the
Guarantor; and
viii. shall not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any of the other Loan
Documents or any instrument or document furnished pursuant hereto
or thereto.
M.(c) Prompt Notice to the Banks
The Administrative Agent shall provide to the Banks
copies of all information, notices and reports given to the
Administrative Agent by the Borrower or the Guarantor as soon as
possible after receipt of the same, except information, notices
and reports (i) relating solely to the role of Administrative
Agent hereunder, (ii) distributed directly by the Borrower or the
Guarantor to the Banks as required by the Loan Documents, or
(iii) otherwise considered by the Administrative Agent to be
irrelevant or immaterial to the Banks.
M.(d) Administrative Agent's Authority to Deal with Borrower
With respect to its own participation in the Credit
Facility, the Administrative Agent shall have the same rights and
powers under this Agreement as any other Bank and may exercise
the same as though it were not the Administrative Agent. The
Administrative Agent may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower and
its Affiliates and any Person which may do business with any of
them, all as if the Administrative Agent were not the
Administrative Agent hereunder and without any duties to account
therefor to the Banks or to any other Person.
M.(e) Dealings by Borrower with Administrative Agent
Unless otherwise specifically provided herein, the
Borrower shall deal with the Administrative Agent in lieu of the
Banks for all purposes of this Agreement. The Borrower may rely,
and shall be fully protected in so relying, without any
obligation to inquire into the correctness thereof, upon any
action taken, notice, direction, waiver, consent, determination,
communication or agreement by the Administrative Agent purporting
to be on behalf of the Majority Banks or the Banks hereunder, as
the case may be, any of which shall, as regards the Borrower, be
deemed to be an action, notice, direction, waiver, consent,
determination, communication or agreement of the Majority Banks
or the Banks, as applicable.
M.(f) Independent Credit Decisions
It is understood and agreed by each Bank that it has
itself been, and will continue to be, solely responsible for
making its own independent appraisal of and investigations into
the financial condition, creditworthiness, condition, affairs,
status and nature of the Borrower and the Guarantor.
Accordingly, each Bank confirms with the Administrative Agent
that is has not relied, and will not hereafter rely, on the
Administrative Agent (i) to check or enquire on its behalf into
the adequacy, accuracy or completeness of any information
provided by the Borrower or any other Person under or in
connection with this Agreement or the transactions herein
contemplated (whether or not such information has been or is
hereafter distributed to such Bank by the Administrative Agent),
or (ii) to assess or keep under review on its behalf the
financial condition, creditworthiness, condition, affairs, status
or nature of the Borrower or the Guarantor.
M.(g) Indemnification
Each Bank hereby agrees to indemnify the Administrative
Agent (to the extent not reimbursed by the Borrower), in
accordance with its Rateable Portion, from 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 Administrative Agent in any way
relating to or arising out of this Agreement or any of the other
Loan Documents or any action taken or omitted by the
Administrative Agent hereunder or thereunder or in respect hereof
or thereof; provided that no Bank shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's gross negligence or
wilful misconduct. Without limiting the generality of the
foregoing, each Bank agrees to reimburse the Administrative Agent
promptly upon demand for its Rateable Portion of any out-of-
pocket expenses (including counsel fees) incurred by the
Administrative Agent in connection with the preservation of any
rights of the Administrative Agent or the Banks as against the
Borrower under, or the enforcement of, or legal advice in respect
of rights or responsibilities under, this Agreement and the other
Loan Documents, to the extent that the Administrative Agent is
not reimbursed for such expenses by the Borrower.
M.(h) Successor Administrative Agent
The Administrative Agent may, as hereinafter provided,
resign at any time by giving written notice thereof to the Banks
and the Borrower. Upon any such resignation, the Banks shall
have the right to appoint a successor agent (the "Successor
Administrative Agent") which shall be one of the Banks. If no
Successor Administrative Agent shall have been so appointed by
the Banks and shall have accepted such appointment within 30 days
after the retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on
behalf of the Banks, appoint a Successor Administrative Agent
from among the Banks acceptable to the Borrower acting
reasonably. Upon the acceptance of any appointment as
Administrative Agent hereunder by a Successor Administrative
Agent, such Successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall thereupon be discharged
from its further duties and obligations as Administrative Agent
under this Agreement. The retiring Administrative Agent shall
cooperate with the Successor Administrative Agent in the
performance of its duties for a reasonable period of time after
such resignation. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of
this Article 11 shall continue to enure to its benefit as to any
actions taken or omitted to be taken by it while it was
Administrative Agent hereunder.
M.(i) Action by and Consent of Banks; Waiver and Amendments
M.(i)(i) Subject to section 11.9.3, where the terms of this
Agreement or any of the other Loan Documents refer to any action
to be taken hereunder or thereunder by the Banks or to any such
action that requires the consent or other determination of the
Banks, the action taken by and the consent or other determination
given or made by the Majority Banks shall, except to the extent
that this Agreement expressly provides to the contrary,
constitute the action or consent or other determination of the
Banks herein or therein referred to, and the Administrative Agent
may exercise its powers under section 11.1 based upon such
action, consent or other determination.
M.(i)(ii) Subject to section 11.9.3, this Agreement and any
other Loan Document may be amended only if the Borrower and the
Majority Banks so agree in writing, any consent under this
Agreement or any other Loan Document shall be given only by the
Administrative Agent (at the direction of the Majority Banks) in
writing, and any Event of Default may be waived before or after
it occurs only if the Administrative Agent (at the direction of
the Majority Banks) so agrees in writing. Any amendment, consent
or waiver so made shall be binding upon all of the Banks.
M.(i)(iii) Any amendment or waiver which changes or
relates to:
(a) the amount, term or Currency of the Loans
available hereunder or any Bank's Commitment;
(b) the amount or dates of payment of principal or interest;
(c) the amount or dates of payment of any fees;
(d) the Currency of any payment;
(e) the release in whole or in part of the Guarantee;
(f) the definition of "Majority Banks"; or
(g) this section 11.9;
shall require the agreement of all of the Banks and also (in
the case of an amendment) of the Borrower. An amendment or
waiver which changes or relates to the rights and/or
obligations of the Administrative Agent shall also require
the agreement of the Administrative Agent thereto.
M.(i)(iv) Any waiver and any consent by the Administrative
Agent or any Bank under any provision of this Agreement or any
other Loan Document may be given subject to any conditions
thought fit by the Person giving that waiver or consent. Any
waiver or consent shall be effective only in the instance and for
the purpose for which it is given.
M.(j) Funding of Advances
M.(j)(i) Upon receipt of a Borrowing Notice, the
Administrative Agent shall forthwith notify each Bank of the
proposed Borrowing Date, Rollover Date or Conversion Date, as the
case may be, the principal amount of the relevant Advance,
Rollover or Conversion, as the case may be, each Bank's Rateable
Portion of any Advance (or, in the case of a Bankers' Acceptance
Loan, the face amount of the draft to be accepted by such Bank as
determined in accordance with section 4.1.2,), the account of the
Administrative Agent to be credited by such Bank (if applicable)
and all other relevant particulars thereof.
M.(j)(ii) Each Bank shall, not later than 12:00 noon
(Toronto time) on the relevant Borrowing Date (or, in the case of
a Bankers' Acceptance Loan, upon fulfilment of all applicable
conditions set out in Article 4), credit the Administrative
Agent's account specified in the Administrative Agent's notice
given under this section with such Bank's Rateable Portion of
each Advance in immediately available funds. The Administrative
Agent will, as soon as reasonably practicable after receiving
such funds from the Banks and upon fulfilment of all applicable
conditions set forth in this Agreement, make the full amount of
such funds available to the Borrower by crediting the Borrower's
account maintained with the Administrative Agent at the Branch of
Account (or causing such account to be credited).
M.(j)(iii) Unless the Administrative Agent has been
notified by a Bank prior to 12:00 noon (Toronto time) on the
Borrowing Date of any Loan requested by the Borrower that such
Bank will not make available to the Administrative Agent its
Rateable Portion of such Loan, the Administrative Agent may
assume that such Bank has made such portion of the Loan available
to the Administrative Agent on the Borrowing Date in accordance
with the provisions hereof and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent such Bank
shall not have so made its Rateable Portion of a Loan available
to the Administrative Agent, such Bank agrees to pay to the
Administrative Agent forthwith on demand such Bank's Rateable
Portion of the Loan and all reasonable costs and expenses
incurred by the Administrative Agent in connection therewith
together with interest thereon (at the rate payable hereunder by
the Borrower in respect of such Loan) for each day from the date
such amount is made available to the Borrower until the date such
amount is paid to the Administrative Agent, provided, however,
that notwithstanding such obligation if such Bank fails to so
pay, the Borrower shall, without prejudice to any rights the
Borrower may have against such Bank, repay such amount to the
Administrative Agent forthwith after demand therefor by the
Administrative Agent. The amount payable to the Administrative
Agent pursuant hereto shall be as set forth in a certificate
delivered by the Administrative Agent to such Bank and the
Borrower (which certificate shall contain reasonable details of
how the amount payable is calculated) and shall be conclusive and
binding for all purposes, absent manifest error. If such Bank
makes the payment to the Administrative Agent required herein,
the amount so paid (otherwise than in respect of such costs,
charges and expenses of the Administrative Agent) shall
constitute such Bank's Rateable Portion of the Loan for purposes
of this Agreement. If the Administrative Agent has been notified
by a Bank that such Bank will not make available to the
Administrative Agent its Rateable Portion of any Loan, the
Administrative Agent shall have no obligation to make available
such amount to the Borrower under any provision of this
Agreement.
M.(j)(iv) The failure of any Bank to funds its Rateable
Portion of a Loan shall not relieve any other Bank of its
obligation, if any, hereunder to fund its Rateable Portion of the
Loan on the relevant Borrowing Date.
M.(k) Remittance of Payments
M.(k)(i) As soon as practicable after receipt of any notice
of payment by the Borrower hereunder, the Administrative Agent
shall give notice to each Bank of the amount of the payment to be
made to it on such day and all other relevant particulars of such
payment. Subject to section 11.15, as soon as practicable after
receipt of any repayment or prepayment of any Loans or any
payment of interest or any other amount payable by the Borrower
hereunder, the Administrative Agent shall remit to each Bank its
Rateable Portion of such payment or prepayment and its respective
entitlement, if any, to any other amount payable by the Borrower
hereunder.
M.(k)(ii) If the Administrative Agent, on the assumption
that it will receive on any particular date a payment of
principal, interest or fees hereunder, remits any amount to the
relevant Banks and the Borrower fails to make such payment, each
such Bank agrees to repay to the Administrative Agent forthwith
on demand the amount so received by it together with all
reasonable costs and expenses incurred by the Administrative
Agent in connection therewith (to the extent not reimbursed by
the Borrower) and interest thereon at the rate and calculated in
the manner applicable to the Loan in respect of which such
payment was made for each day from the date such amount is
remitted to the relevant Bank. The amount payable to the
Administrative Agent pursuant hereto shall be as set forth in a
certificate delivered by the Administrative Agent to each such
Bank, which certificate shall be conclusive and binding for all
purposes, absent manifest error.
M.(l) Redistribution of Payments
A Bank (a "Remitting Bank") which obtains any payment
(whether voluntary, involuntary, by way of set-off or otherwise)
on account of its portion of a Loan which has not been repaid to
the other Banks in accordance with their respective Rateable
Portions shall, and the Borrower hereby irrevocably authorizes
any such Bank to, remit such payment or portion thereof to the
Administrative Agent for redistribution to the Banks in
accordance with their respective Rateable Portions. In any such
case, the Remitting Bank, upon such payment by it to the
Administrative Agent, shall be deemed for all purposes not to
have received from the Borrower that payment so remitted to the
Administrative Agent, and the Bank or Banks (the "Receiving
Banks") receiving such payment or portions thereof upon a
redistribution thereof by the Administrative Agent shall be
deemed for the purposes hereof to have received such payment or
portion thereof (as the case may be) from the Borrower. If all
or part of any such payment made by such Remitting Bank shall be
recovered by the Borrower from such Remitting Bank, such amount
so paid by such Remitting Bank to the Administrative Agent shall
forthwith be repaid by the Receiving Banks to the Administrative
Agent (for the benefit of the Remitting Bank). The Borrower
shall and does hereby waive any defence, counterclaim or right of
set-off which it may have against any Bank with respect to any
such payment so received by any such Bank.
M.(m) Notification of Default
Each Bank shall promptly notify the Administrative
Agent, and the Administrative Agent shall promptly notify each of
the Banks, of any event of which it has actual notice which
constitutes a Default or an Event of Default.
M.(n) Taking and Enforcement of Remedies
M.(n)(i) Each of the Banks hereby acknowledges that, to the
extent permitted by Applicable Law, the remedies provided
hereunder and under the other Loan Documents to the Banks are for
the benefit of the Banks collectively and acting together and not
severally and further acknowledges that its rights hereunder and
thereunder are to be exercised collectively by the Administrative
Agent upon the instructions of the Majority Banks. Accordingly,
notwithstanding any of the provisions contained herein or
therein, each of the Banks hereby covenants and agrees that it
shall not be entitled to take any action with respect to the
Credit Facility, including, without limitation, any election of
remedies in respect of an Event of Default hereunder, but that
any such action shall be taken only by the Administrative Agent
upon the instructions of the Majority Banks as provided herein.
Notwithstanding the foregoing, in the absence of instructions
from the Majority Banks (or, to the extent section 11.9.3 is
applicable, all of the Banks) where the Administrative Agent has
requested instructions and in its sole opinion the exigencies of
the situation warrant such action, the Administrative Agent may
without notice to or consent of the Banks take such action on
behalf of the Banks as it deems appropriate or desirable in the
interests of the Banks. Each of the Banks further covenants and
agrees, that, upon any such instructions being given to the
Administrative Agent by the Majority Banks, it shall cooperate
fully with the Administrative Agent to the extent requested by
the Administrative Agent in any collective realization hereunder
including, without limitation, the appointment of a receiver and
manager to act for their collective benefit. Each Bank covenants
and agrees to do all acts and things and to make, execute and
deliver all agreements and other instruments, including, without
limitation, any instruments necessary to effect any
registrations, so as to fully carry out the intent and purposes
of this section 11.14.1.
M.(n)(ii) Each Bank hereby covenants and agrees that it has
not heretofore sought, taken, accepted or received and shall not
hereafter seek, take, accept or receive any security for any of
the obligations and liabilities of the Borrower hereunder or
under the other Loan Documents or under any other document,
instrument, writing or agreement ancillary hereto or thereto
other than such security as is provided hereunder or thereunder
and shall not enter into any agreement with any of the parties
hereto or thereto relating in any manner whatsoever to the Credit
Facility, unless all of the Banks shall at the same time obtain
the benefit of any such security or agreement.
M.(n)(iii) Each of the Banks and the Borrower further
covenants and agrees that all proceeds from the exercise of the
rights and remedies provided hereunder and under the Loan
Documents, to the extent permitted by Applicable Law, are held
for the benefit of all of the Banks and, after deduction
therefrom of all costs of realization, shall be shared among the
Banks proportionately based upon the respective aggregate amounts
of the Obligations which are outstanding to each of the Banks at
the relevant time or times of sharing. To the extent any Bank
receives or is entitled to receive any amount hereunder in excess
of the amount of the Obligations owed to it hereunder it shall
hold such excess in trust on behalf of and for the benefit of the
other Banks entitled thereto.
M.(n)(iv) Each of the Banks agrees with each of the other
Banks that if it exercises any right of set-off in accordance
with section 10.3 hereof in connection with any Obligations, it
shall promptly so advise the Administrative Agent and each of the
other Banks and, to the extent permitted by Applicable Law, the
Banks shall share all such set-offs in accordance with the
provisions of section 11.14.3 hereof, provided that none of the
Banks shall be liable hereunder to any of the other Banks by
reason of failure to exercise or validly exercise any right of
set-off or by reason of any restriction upon any such sharing.
M.(o) Adjustments to Reflect Rateable Portions
All Loans shall be maintained as between the Banks
according to their respective Rateable Portions, except to the
extent that the Administrative Agent deems any variations
therefrom to be immaterial. The Administrative Agent shall
determine all adjustments to amounts required to be advanced by
the Banks or to amounts of payments to which the respective Banks
are entitled to reflect as nearly as practicable the respective
Rateable Portions of the Banks.
M.(p) No Partnership
Nothing contained in this Agreement and no action taken
by the Banks pursuant hereto shall be deemed to constitute the
Banks a partnership, association, joint venture or other
collective entity.
N. GENERAL
N.(a) Reliance and Non-Merger
All covenants, agreements, representations and
warranties of the Borrower made herein or in any other Loan
Document or in any certificate or other document signed by any of
its directors or officers and delivered by or on behalf of either
of them pursuant hereto or thereto are material, shall be deemed
to have been relied upon by the Administrative Agent and each
Bank notwithstanding any investigation heretofore or hereafter
made by the Administrative Agent, the Banks or their counsel or
any employee or other representative of any of them and shall
survive the execution and delivery of this Agreement and the
other Loan Documents until the Borrower shall have satisfied and
performed all of its obligations hereunder and shall have no
further ability to utilize the Credit Facility.
N.(b) No Set-Off by the Borrower
The amounts payable by the Borrower hereunder shall not
be subject to any deduction, withholding, set-off or counterclaim
by the Borrower for any reason whatsoever.
N.(c) Notices
N.(c)(i) Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be
given by prepaid first-class mail, by facsimile or other means of
electronic communication or by hand-delivery as hereinafter
provided. Subject to section 12.4.2, any such notice, if mailed
by prepaid first-class mail, shall be deemed to have been
received on the fourth Banking Day after the post-marked date
thereof, or if sent by facsimile or other means of electronic
communication, shall be deemed to have been received on the day
of sending, or if delivered by hand shall be deemed to have been
received at the time it is delivered to the applicable address
noted below either to the individual designated below or to a
senior employee of the addressee at such address (and, in the
case of the Administrative Agent or any Bank, at the same
department within such Bank) with responsibility for matters to
which the information relates, provided in each case that if such
day is not a Banking Day such notice shall be deemed to have been
received on the next succeeding Banking Day. Notice of change of
address shall also be governed by this section. In the event of
a general discontinuance of postal service due to strike, lock-
out or otherwise, notices or other communications shall be
delivered by hand or sent by facsimile or other means of
electronic communication only. Notices and other communications
shall be addressed as follows:
N.(c)(ii)
i. if to the Borrower:
Merisel Canada Inc.
000 Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Vice President, Finance
Facsimile number: (000) 000-0000
with a copy to:
Merisel Americas, Inc.
000 Xxxxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, Xxxxxxxxxx
X.X.X. 00000-0000
Attention: Treasurer
Facsimile number: (000) 000-0000
ii. if to the Administrative Agent:
Citibank Canada
Citibank Place
17th Floor
000 Xxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Customer Service Representative
Facsimile number: (000) 000-0000
iii. if to the Banks:
Citibank Canada
Citibank Place
17th Floor
000 Xxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Vice-President, Corporate Finance
Facsimile Number: (000) 000-0000
Canadian Imperial Bank of Commerce
0xx Xxxxx
Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Managing Director
Facsimile number: (000) 000-0000
NBD Bank, Canada
Canada Trust Tower
BCE Place
000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Trading Room
Facsimile Number: (000) 000-0000
N.(c)(ii) Where any notice or other communication required
or permitted to be given by the Borrower hereunder (including
without limitation, a Borrowing Notice) on any date is required
to be given by a stipulated time on such date, it must be given
by such time in order to be considered effective on such date,
unless the Administrative Agent otherwise agrees. Any notice
actually given after that time will be deemed to be given on the
immediately following Banking Day.
N.(d) Time
Time is of the essence of the Loan Documents.
N.(e) Further Assurances
Whether before or after the happening of an Event of
Default, the Borrower shall at its own expense do, make, execute
or deliver, or cause to be done, made, executed or delivered by
other Persons, all such further acts, documents and things in
connection with the Credit Facility and the Loan Documents as the
Administrative Agent may reasonably require from time to time for
the purpose of giving effect to the Loan Documents, all forthwith
upon the request of the Administrative Agent.
N.(f) Assignment
N.(f)(i) This Agreement and the other Loan Documents shall
enure to the benefit of and be binding on the parties hereto and
thereto, their respective successors (including any successor
Administrative Agent appointed pursuant to the provisions hereof)
and any assignee or transferee of some or all of the parties'
rights or obligations under this Agreement and the other Loan
Documents as permitted under this section 12.7.
N.(f)(ii) The Borrower shall not assign or transfer all or
any part of its rights or obligations under this Agreement or any
of the other Loan Documents without the prior written consent of
all of the Banks.
N.(f)(iii) Any Bank (a "Grantor") may grant
participations in all or part of its rights and obligations in
respect of the Credit Facility and the Loan Documents at such
times and upon such terms as it may deem fit to any Person with
the prior written consent of the Borrower (which consent shall
not be unreasonably withheld and shall be provided as soon as
practicable), (any such Person, a "Participant"), provided in
each case that:
(a) the Grantor shall remain fully liable
for all of its obligations and responsibilities
hereunder to the same extent as if such
participation had not been granted; and
(b) the Grantor shall administer the
participation of the Participant and neither the
Participant nor the Borrower shall have any rights
against or obligations to, or deal directly with,
each other in respect of the participation of the
Participant.
N.(f)(iv) Any Bank (an "Assignor") may assign or transfer
all or part of its rights in respect of the Credit Facility and
the Loan Documents to, and may have its corresponding obligations
in respect thereof assumed by, (i) any other Bank at such times
and upon such terms as it may deem fit, without any obligation to
obtain any consent of the Borrower, or (ii) any other Person with
the prior written consent of the Borrower (which consent shall
not be unreasonably withheld and shall be provided as soon as
practicable), provided in each case that:
(a) the Assignor shall obtain from the
assignee or transferee (the "Assignee") an
undertaking (the "Undertaking") of the Assignee,
addressed to the parties to this Agreement (as the
same may be constituted at such time) and in form
and substance satisfactory to the Administrative
Agent and the Assignor, whereby the Assignee
agrees to be bound by this Agreement and all Loan
Documents relating to the obligations of the Banks
in the place and stead of the Assignor to the
extent that the rights and obligations of the
Assignor shall have been assigned to and assumed
by the Assignee;
(b) the assignment or transfer to the
Assignee executing such Undertaking shall be
effective upon the date provided in the assignment
agreement between the Assignor and the Assignee
(which shall not be earlier than the date the
Undertaking is delivered to the Administrative
Agent), and the Assignee shall thereafter be and
be treated as a Bank for all purposes of this
Agreement and the other Loan Documents and shall
be entitled to the full benefit hereof and thereof
to the extent of such benefits as are transferred
to it by the Assignor and subject to the
obligations of the Assignor to the same extent as
if the Assignee were an original party in respect
of the rights and obligations transferred to and
assumed by it, and the Assignor in respect of such
assignment shall be released and discharged
accordingly; and
(c) the Administrative Agent shall notify
the Borrower of the identity of the Assignee
substituted for such Bank and the rights and
obligations assigned or transferred to the
Assignee prior to the assignment or transfer
becoming effective and shall prepare and
distribute to the Banks and to the Borrower an
amendment to Schedule A reflecting the adjustments
to the Commitments after such transfer or
assignment, to which amendment the Borrower hereby
agrees and the Borrower shall, upon request made
by the Administrative Agent, execute and deliver
such assurances as may be reasonably requested by
the Administrative Agent to confirm the release
and discharge provided for in clause (b) above.
N.(f)(v) the Borrower and each of the Banks hereby consent
to each and every assignment or transfer which may be made on or
after the date hereof in accordance with the terms of section
12.7.4 and to the release and discharge of every Assignor
provided for in clause (b) thereof;
N.(f)(vi) any assignment, transfer or grant by a Bank as
contemplated by this section 12.7 will not constitute a repayment
by the Borrower to the Grantor or Assignor, as the case may be,
of the assigned or participated portion of the Credit Facility,
nor an Advance to the Borrower by the Assignee or Participant, as
the case may be, and the parties acknowledge that the Borrower's
obligations hereunder with respect to the assigned, transferred
or participated portion of Loans will continue and not constitute
new obligations.
N.(g) Exchange of Information
Each Bank may provide to any proposed assignee or
participant approved by the Borrower such information concerning
the financial position and the operations of the Borrower and the
Guarantor as, in the opinion of such Bank, may be relevant or
useful in connection with
the Credit Facility or any portion thereof proposed to be
acquired by such assignee or participant, provided that each
recipient of such information agrees in writing not to disclose
such information to any other Person.
N.(h) Currency Conversion and Indemnity
If, in connection with any action or proceeding brought
in connection with this Agreement or any of the Loan Documents or
any judgment or order obtained as a result thereof, it becomes
necessary to convert any amount due hereunder in one Currency
(the "first Currency") into another Currency (the "second
Currency"), then the conversion shall be made at the Conversion
Rate on the first Banking Day prior to the day on which payment
is received.
If the conversion is not able to be made in the manner
contemplated by the preceding paragraph in the jurisdiction in
which the action or proceeding is brought, then the conversion
shall be made at the Conversion Rate on the day on which the
judgment is given.
If the Conversion Rate on the date of payment is
different from the Conversion Rate on such first Banking Day or
on the date of judgment, as the case may be, the Borrower shall
pay such additional amount (if any) in the second Currency as may
be necessary to ensure that the amount paid on such payment date
is the aggregate amount in the second Currency which, when
converted at the Conversion Rate on the date of payment, is the
amount due in the first Currency, together with all costs,
charges and expenses of conversion. Any additional amount owing
by the Borrower to the Banks pursuant to the provisions of this
section shall be due as a separate debt and shall give rise to a
separate cause of action and shall not be affected by or merged
into any judgment obtained for any other amounts due under or in
respect of this Agreement or any of the other Loan Documents.
N.(i) Counterparts
This Agreement may be signed in any number of
counterparts, each of which shall be deemed to be an original,
but all such separate counterparts shall together constitute one
and the same instrument.
N.(j) Entire Agreement
The Loan Documents constitute the entire agreement
between the parties hereto pertaining to the matters therein set
forth and supersede and replace any prior understandings or
arrangements pertaining to the Credit Facility. There are no
warranties, representations or
agreements between the parties with such matters
except as specifically set forth or referred to in the Loan
Documents.
IN WITNESS WHEREOF this Agreement has been executed by
the parties hereto as of the date first written above.
MERISEL CANADA INC.
By:
Title:
CITIBANK CANADA, AS ADMINISTRATIVE AGENT
By:
Title:
By:
Title:
CITIBANK CANADA
By:
Title:
By:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
By:
Title:
NBD BANK, CANADA
By:
Title:
SCHEDULE A
Commitments
(section 1.1)
Bank Commitment
Citibank Canada Cdn.$10,000,000
Canadian Imperial Bank of Commerce Cdn.$30,000,000
NBD Bank, Canada Cdn.$10,000,000
Cdn. $50,000,000
(or the U.S. Dollar Equivalent in each case)
SCHEDULE B
Borrowing Notice
(section 2.6)
TO: Citibank Canada, as Administrative Agent (the
"Administrative Agent")
Re: Merisel Canada Inc.
Reference is made to a credit agreement (the "Credit
Agreement") dated as of January 4, 0000 xxxxxxx Xxxxxxx Xxxxxx
Inc., as Borrower, the Banks and the Administrative Agent. All
terms used in this Borrowing Notice which are defined in the
Credit Agreement have the meanings attributed thereto in the
Credit Agreement.
The Borrower hereby requests a Loan as follows:
1. Type of Loan:
2. Amount of Loan:
3. Currency of Loan:
4. Borrowing Date:
5. Interest Period,
BA Period or Letter
of Credit term, as
applicable:
6. Payment instructions (if any):
7. If Rollover or Conversion of another Loan, provide
details of other Loan:
i. Type:
ii. Amount:
iii. Maturity Date:
All of the representations and warranties of the
Borrower in Article 7 of the Credit Agreement are true and
correct on the date hereof as if made on and as of the date
hereof.
No Default or Event of Default has occurred and is
continuing nor will any Default or Event of Default occur after
giving effect to the aforementioned Loan.
DATED this 4TH day of January, 1995.
MERISEL CANADA INC.
By: c/s
Title:
