CREDIT AGREEMENT
THIS AGREEMENT made as of the 30th day of January, 1998.
B E T W E E N:
THE TORONTO-DOMINION BANK, a Canadian chartered bank
(herein called the "Bank"),
- and -
CERIDIAN CANADA LTD., a corporation incorporated under the laws of
Canada
(herein called the "Borrower").
WHEREAS the Borrower has requested the Bank to establish a reducing, revolving
credit facility to be used to finance the acquisition by the Borrower of all of
the issued and outstanding shares in the capital stock of 3454916 Canada Inc.
("Newco") a corporation established by the Bank to acquire the the Bank's
Payroll Business, and for other general corporate purposes;
AND WHEREAS the Bank is willing to provide such a reducing, revolving credit
facility to the Borrower for the aforesaid purposes upon the terms and
conditions contained herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual
covenants and agreements herein contained and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto covenant and agree as follows:
ARTICLE 1
INTERPRETATION
1.01 Defined Terms. The defined terms set forth in Appendix A shall for all
purposes of this agreement, or any amendment hereto, have the respective
meanings set forth therein unless the context otherwise specifies or requires or
unless otherwise defined herein.
1.02 Applicable Law. This agreement and all documents delivered pursuant
hereto shall be governed by and construed and interpreted in accordance with the
laws of the Province of Ontario and
the laws of Canada applicable therein and the parties hereto do hereby attorn to
the non-exclusive jurisdiction of the courts of the Province of Ontario.
1.03 Amount of Credit. Any reference herein to the amount of credit
outstanding shall mean, at any particular time:
(a) in the case of a Prime Rate Loan, the principal amount thereof;
(b) in the case of a LIBO Loan or Base Rate Canada Loan, the Canadian
Dollar Equivalent of the principal amount of such Loan;
(c) in the case of a Bankers' Acceptance, the face amount of the
Bankers' Acceptance.
1.04 Canadian Dollars. All amounts referred to herein shall refer to lawful
currency of Canada, unless otherwise stated.
ARTICLE 2
CREDIT FACILITY
2.01 Establishment of Credit Facility. Subject to the terms and conditions
hereof, the Bank hereby establishes in favour of the Borrower a reducing,
revolving term credit facility (the "Credit Facility") in the amount of the
Facility Limit.
ARTICLE 3
GENERAL PROVISIONS RELATING TO CREDITS
3.01 Types of Credit Availments. The Borrower may obtain credit under the
Credit Facility by way of one or more Prime Rate Loans, Base Rate Canada Loans,
LIBO Loans (subject in all cases to availability), and Bankers' Acceptances.
3.02 Loan Advances and Payments. Each Loan advance and each payment by the
Borrower hereunder shall be made prior to 12:00 noon (Toronto time) on the
relevant date by deposit to the Designated Account. The Bank shall be entitled
to withdraw the amount of any payment due to it hereunder from such account on
the day specified for payment.
3.03 (a) Bankers' Acceptances. To facilitate the drawing of Bankers
Acceptances hereunder, the Borrower shall execute and deliver to the Bank a
supply of drafts executed by the Borrower, which the Bank shall hold in
safekeeping. The Bank shall not be responsible for its failure to accept a
draft as required hereunder if the cause of the failure is, in whole or in part,
due to the failure of the Borrower to provide such drafts to the Bank on a
timely basis. The Bank agrees to use its best efforts to advise the Borrower in
a timely manner when it requires additional executed drafts. If executed but
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incomplete drafts are delivered to the Bank, the Bank may complete the same on
behalf of the Borrower following receipt of a drawdown notice from the Borrower
to accept drafts pursuant to Sec. 3.06 herein.
(b) No Obligation to Purchase. The Bank shall not be obligated to
purchase or discount any Bankers' Acceptances. The Borrower shall be
responsible for arranging the purchase or discounting of any such Bankers'
Acceptances by a money market dealer or the Bank, and if a money market dealer
is used to facilitate settlement, the details of such purchase or discounting
shall be advised promptly by the Borrower to the Bank, by telephone or facsimile
transmission.
3.04 Timing of Credit Availments. No Bankers' Acceptance or LIBO Loan may
have an Interest Period which would exceed the Maturity Date.
3.05 Evidence of Indebtedness. The Bank shall open and maintain accounts
wherein the Bank shall record the amount of outstanding credit, each payment of
principal and interest on account of each Loan, each Bankers' Acceptance
accepted and cancelled and all other amounts becoming due to and being paid to
the Bank hereunder, including Stamping Fees. The Bank's accounts constitute, in
the absence of manifest error, prima facie evidence of the indebtedness of the
Borrower to the Bank pursuant to this agreement.
3.06 Notice Periods. Each notice of a drawdown, rollover, prepayment,
repayment or conversion from one type of credit availment to another hereunder
shall be irrevocable and shall be given to the Bank in the forms attached hereto
as Appendix "B" :
(a) prior to 10:30 a.m. (Toronto time) on the third Banking Day prior
to the date of a drawdown of, rollover of, conversion into,
conversion of, prepayment of or repayment of a LIBO Loan;
(b) prior to 10:30 am (Toronto time) on the second Banking Day prior
to the date of drawdown or conversion into a Bankers' Acceptance;
(c) prior to 10:30 a.m. (Toronto time) on the first Banking Day prior
to the date of a drawdown of, conversion into, conversion of,
prepayment of or repayment of a Prime Rate Loan in a principal
amount exceeding Cdn. $10,000,000 or a Base Rate Canada Loan in a
principal amount exceeding U.S. $10,000,000; and
(d) prior to 10:30 a.m. (Toronto time) on the Banking Day of any other
drawdown, rollover, conversion, prepayment or repayment.
3.07 Absence of Instructions. In the absence of written notice from the
Borrower within the appropriate time periods referred to herein, a maturing LIBO
Loan shall be automatically converted
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into a Base Rate Canada Loan and a maturing Bankers' Acceptance shall be
automatically converted into a Prime Rate Loan.
3.08 Reimbursement Obligation. The Bank shall, on the maturity date of a
Bankers' Acceptance, pay to the holder thereof the face amount of such Bankers'
Acceptance and the Borrower shall fully reimburse the Bank on such date for the
amount of any such payment.
ARTICLE 4
INTEREST AND FEES
4.01 Interest Rates. The Borrower shall pay to the Bank interest and fees on
the outstanding principal amount from time to time of each Loan from time to
time, at the rate per annum equal to the following rates or equal to the
following fees, as the case may be:
(a) in the case of each Prime Rate Loan, the Prime Rate;
(b) in the case of each Base Rate Canada Loan, the Alternate Base Rate
Canada;
(c) in the case of each LIBO Loan, the LIBO Rate plus 47.5 basis
points; and
(d) in the case of Banker's Acceptances, the Stamping Fee at 47.5
basis points per annum.
4.02 Calculation and Payment of Interest.
(a) Interest on the outstanding principal amount from time to time of each
Loan and on the amount of overdue interest thereon from time to time shall
accrue from day to day (both before and after maturity and as well after as
before judgment) and shall be calculated on the basis of the actual number of
days elapsed divided by the actual number of days in the year in the case of a
Prime Rate Loan or Base Rate Canada Loan or divided by 360 in the case of a LIBO
Loan.
(b) Accrued interest shall be paid,
(i) in the case of interest on Prime Rate Loans and Base Rate Canada
Loans, monthly in arrears on the last Banking Day of each calendar
month; and
(ii) in the case of interest on LIBO Loans, on the last day of the
applicable Interest Period.
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4.03 General Interest Rules.
(a) For the purposes hereof, whenever interest is calculated on the basis of
a year of 360 days, each rate of interest determined pursuant to such
calculation expressed as an annual rate for the purposes of the Interest Act
(Canada) is equivalent to such rate as so determined multiplied by the actual
number of days in the calendar year in which the same is to be ascertained and
divided by 360.
(b) Following the occurrence of an Event of Default, the Borrower shall pay
interest on amounts outstanding (as well after as before judgment) at the rate
per annum, calculated and compounded monthly, which is equal to the Prime Rate
plus 2%. Such interest on overdue amounts shall become due and be paid on
demand made by the Bank.
4.04 Stamping Fees. Upon the acceptance of any draft of the Borrower
pursuant hereto, the Borrower shall pay to the Bank, in advance, the Stamping
Fee calculated at the rate per annum, on the basis of the actual number of days
in the year, equal to 47.5 basis points per annum on the face amount of such
Bankers' Acceptance for its term, being the actual number of days in the period
commencing on the date of acceptance of the Borrower's draft and ending on but
excluding the maturity date of the Bankers' Acceptance.
4.05 Stand-by Fee. On the first Banking Day of each calendar quarter
commencing April 1, 1998, and on the Maturity Date, the Borrower shall pay to
the Bank, in arrears, a Stand-by Fee calculated on the basis of a year of 365
days or 366 days in the case of a leap year at 12.5 basis points per annum, on
the daily average of the unused portion of the Credit Facility, such fee to
accrue daily from, and including the first day of the previous calendar quarter
(or the date hereof, if later) to and including the last day of the previous
calendar quarter, and in the case of the final payment, up to the Maturity Date.
4.06 Arrangement Fee. On or prior to the date of execution of this
Agreement, the Borrower shall pay to the Bank an arrangement fee in an amount
equal to $40,000.
ARTICLE 5
REPAYMENTS AND PREPAYMENTS
5.01 Repayments under Credit Facility. The Borrower will repay all amounts
outstanding hereunder to ensure that the amount outstanding does not exceed the
Facility Limit, and to ensure that all amounts outstanding are repaid in full on
or before the Maturity Date, or earlier, if the Bank demands repayment following
the occurrence of an Event of Default.
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5.02 Facility Limit. The Facility Limit shall reduce in accordance with the
following repayment schedule:
Date Facility Limit*
July 31, 1998 $40,000,000 Cdn
July 31, 1999 $40,000,000 Cdn
July 31, 2000 $40,000,000 Cdn
July 31, 2001 $35,000,000 Cdn
July 31, 2002 $0
(* Canadian dollars or the U.S. Dollar Equivalent thereof)
5.03 Repayments of Credit Excess. The Borrower shall also repay to the Bank
automatically, and without the necessity of demand, the Credit Excess from time
to time, whether such Credit Excess results from the calculation by the Bank
each day of the Canadian Dollar Equivalent of amounts outstanding in U.S.
dollars, or otherwise.
5.04 Prepayments. The Borrower shall be entitled to prepay all or any
portion of the amount outstanding under the Credit Facility at any time upon
notice given to the Bank in accordance with Section 3.06, provided that:
(i) if the Borrower pays a LIBO Loan prior to expiry of the Interest Period
applicable to that LIBO Loan the Borrower will pay to the Bank all costs and
expenses of re-employing the amounts so repaid and the Borrower will comply with
paragraph 7.01(i) in connection with such prepayment, and
(ii) Bankers' Acceptances may not be repaid prior to the expiry of the Interest
Period of such Bankers' Acceptance.
Prior to the Maturity Date, all amounts which are prepaid as aforesaid may be
reborrowed up to the Facility Limit.
5.05 Cancellation. The Borrower may permanently cancel all or any portion of
the Credit Facility upon 30 days prior written notice to the Bank.
5.06 Withholding Tax. All payments made by the Borrower to the Bank will be
made free and clear of all present and future taxes (excluding the Bank's income
or capital taxes), withholdings or deductions of whatever nature. If these
taxes, withholdings or deductions are required by applicable law and are made,
the Borrower, shall, as a separate and independent obligation, pay to the Bank
all additional amounts as shall fully indemnify the Bank from any such taxes,
withholding or deduction.
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5.07 Waiver of Set-Off. The Borrower agrees to make all payments due
hereunder without set-off or counterclaim. In addition, the Borrower shall make
all payments hereunder free and clear of, and without deduction for, any amount
owed to the Borrower and the Guarantor by the Bank, pursuant to or in connection
with, the Share Purchase Agreement, or otherwise in connection with the purchase
by the Borrower of the Shares. The Borrower hereby waives any right to set-off
any and all amounts owing to the Borrower or the Guarantor by the Bank against
any and all amounts owing by the Borrower to the Bank.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties. To induce the Bank to enter into this
agreement, the Borrower hereby represents and warrants to the Bank as follows
and acknowledges and confirms that the Bank is relying upon such representations
and warranties in extending credit hereunder:
(a) Status and Power. The Borrower is a corporation duly incorporated and
organized and validly subsisting under the laws of the jurisdiction of
its incorporation and is duly qualified, registered or licensed in all
jurisdictions where such qualification, registration or licensing is
required to the extent that it is material. The Borrower has all
requisite corporate capacity, power and authority to own, hold under
licence or lease its properties, to carry on its business as now
conducted and to otherwise enter into, and carry out the transactions
contemplated by, this agreement.
(b) Authorization and Enforcement of Documents. All necessary action,
corporate or otherwise, has been taken to authorize the execution,
delivery and performance of this agreement by the Borrower and the
Borrower has duly executed and delivered this agreement. This agreement
is a legal, valid and binding obligation of the Borrower, enforceable
against the Borrower by the Bank in accordance with its terms.
(c) Compliance with Other Instruments. The execution, delivery and
performance of this agreement and the consummation of the transactions
contemplated herein do not and will not conflict with, result in any
breach or violation of, or constitute a default under, the terms,
conditions or provisions of the constating documents or by-laws of the
Borrower or of any law, regulation, judgment, decree or order binding on
or applicable to the Borrower or by which the Borrower benefits or to
which any of its property is subject or of any material agreement,
lease, licence, permit or other instrument to which the Borrower is a
party or is otherwise bound or by which the Borrower benefits or to
which any of its property is subject and do not require the consent or
approval of any other party or any governmental body, agency or
authority.
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(d) Litigation. There are no actions, suits, inquiries, claims or
proceedings pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower before any government, parliament,
legislature, regulatory authority, agency, commission, board or court or
before any private arbitrator, mediator or referee which in any case or
in the aggregate may result in any material adverse change in the
ability of the Borrower to perform its obligations under this agreement.
(e) Compliance with Laws. The Borrower is not in violation of any mortgage,
franchise, licence, judgment, decree, order, statute, rule or regulation
relating in any way to the Borrower, to the operation of its business or
to its property or assets where such violation might reasonably be
expected to result in a material adverse change in the business,
financial condition or operations of the Borrower.
(f) Taxes. All of the remittances required to be made by the Borrower to
the federal, provincial and municipal governments have been made and are
currently up to date. Without limiting the foregoing, all employee
source deductions (including income taxes, unemployment insurance and
Canada pension plan), sales taxes (both provincial and federal),
corporate income taxes, payroll taxes and workmen's compensation dues
are currently paid and up to date, except for such taxes which are being
contested in good faith by proper proceedings with appropriate reserves
having been set aside.
(g) Environmental.
(i) The condition and use of any of the Borrower's properties and any
prior use by the Borrower of such properties is in material
compliance with all applicable environmental, health and safety
laws and standards.
(ii) None of the Borrower's properties, or any part thereof, is subject
to any remedial control, action, direction, order, or
investigation (which is material) by the Ministry of the
Environment or any authority having jurisdiction over matters
involving the environment.
(h) Financial Statements
The audited financial statements for the Guarantor last delivered to the
Bank present fairly its financial position in all material respects, as
of the date shown on such financial statements, and have been prepared
in accordance with generally accepting accounting principles,
consistently applied. Since such date no material adverse change in the
business or financial position, operation, property or assets of the
Borrower or the Guarantor has occurred, other than has
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been disclosed in writing to the Bank and in filings with the United
States Securities and Exchange Commission prior to the date hereof
relating to (i) charges incurred by the Guarantor in the third and
fourth quarters of 1997; (ii) the sale of Guarantor's detense
electronics business and (iii) the repurchase by the Guarantor of its
stock.
(i) Guarantor.
The address of the Guarantor's corporate head office and chief executive
office and the office at which the Guarantor's primary corporate and
business records are maintained is 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxxxx,
XX, XXX 00000.
6.02 Survival of Representations and Warranties. All of the
representations and warranties of the Borrower contained in Section 6.01 shall
survive the execution and delivery of this agreement notwithstanding any
investigation made at any time by or on behalf of the Bank and shall be deemed
to be repeated on the date of each Advance hereunder.
ARTICLE 7
COVENANTS
7.01 Covenants. The Borrower hereby covenants and agrees with the Bank that,
so long as any amount is outstanding hereunder or so long as the Bank shall have
any commitment hereunder, unless the Bank otherwise expressly consents in
writing:
(a) Punctual Payment. The Borrower will pay all amounts outstanding
hereunder and all interest thereon and all fees and other amounts
required to be paid by it hereunder in the manner and at the times
specified hereunder.
(b) Financial Reporting. The Borrower shall furnish the Bank with the
following statements, reports and certificates:
(i) within 120 days after the end of each fiscal year of the Borrower,
copies of the Borrower's annual financial statements with respect
thereto;
(ii) upon delivery of the financial statements, a certificate of a
senior officer of the Borrower certifying that no Default related
to the Borrower has occurred and is continuing; and
(iii) such other statements, reports and information as the Bank may
reasonably request from time to time.
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(c) Corporate Existence. Subject to section 7.01(s), the Borrower shall
maintain its corporate existence in good standing and shall not take
part in any dissolution, reorganization, amalgamation, merger or any
similar proceeding or arrangement without the Bank's prior written
consent, not to be unreasonably withheld.
(d) Material Adverse Change. The Borrower shall promptly notify the Bank of
any material adverse change in the financial condition of the Borrower
or in the ability of the Borrower to satisfy its obligations hereunder.
(e) Costs and Expenses. The Borrower shall pay all reasonable costs, fees,
and expenses, (including outside legal fees) incurred by the Bank (i)
for services rendered by outside counsel in connection with the
preparation of this Agreement and the Guarantee and with the
establishment of the Credit Facility, but in no event shall such costs,
fees and expenses to be paid by the Borrower and Guarantor pursuant to
section 6.11 of the Guarantee exceed $20,000 Cdn.; and (ii) in
connection with the enforcement of this Agreement and the collection of
amounts outstanding hereunder and outstanding under the Guarantee.
(f) Notice of Default. The Borrower shall promptly notify the Bank of the
occurrence of any Default or Event of Default and shall concurrently
deliver to the Bank a detailed statement of a senior officer of the
Borrower of the steps, if any, being taken to cure or remedy such
Default or Event of Default.
(g) Negative Pledge. Other than Permitted Liens, the Borrower will not
create, issue, incur, assume or permit to exist any security interest,
lien, charge or other encumbrance of any kind on or in respect of any of
its assets or undertakings.
(h) Change of Circumstances. If the introduction or adoption of any law,
regulation, guideline, request or directive (whether or not having the
force of law) of any governmental authority, central bank or comparable
agency ("Restraint") or any change therein or in the application thereof
to the Borrower or to the Bank or in the interpretation or
administration thereof or any compliance by the Bank therewith shall
impose or require any reserve, special deposit requirements or tax
(excluding taxes measured with reference to the net income or capital of
the Bank), shall establish an appropriate amount of capital to be
maintained by the Bank or shall impose any other requirement or
condition which results in an increased cost to the Bank of extending or
maintaining a credit or obligation hereunder or reduces the amount
received or receivable by the Bank with respect to the Credit Facility
under this agreement or reduces the Bank's effective return hereunder or
on its capital or causes the Bank to make any payment or to forego any
return based on any amount received or receivable hereunder, then,
provided that
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there has been notification to the Borrower by the Bank, the Borrower
shall pay to the Bank such amounts as shall fully compensate the Bank
for all such increased costs, reductions, payments or foregone returns
which accrue after the 100th day following such notification. The Bank
shall notify the Borrower of any actual increased or imposed costs,
reductions, payments or foregone returns forthwith on becoming aware of
same and shall concurrently provide to the Borrower a certificate of an
officer of the Bank setting forth the amount of compensation to be paid
to the Bank and the basis for the calculation of such amount.
(i) Indemnity. Upon notice from the Bank (which notice shall be accompanied
by a detailed calculation of the amount to be paid by the Borrower), the
Borrower shall pay to the Bank such amount or amounts as will compensate
the Bank for any loss, cost or expense incurred by it in the liquidation
or re-deposit of any funds acquired by the Bank to fund or maintain any
portion of a LIBO Loan as a result of:
(i) the failure of the Borrower to borrow or make repayments on the
dates specified under this agreement or in any notice from the
Borrower to the Bank; or
(ii) the repayment or prepayment of any amounts on a day other than the
payment dates prescribed herein.
(j) Existence and Conduct of Business. The Borrower shall maintain its
existence in good standing (subject to section 7.01(s)) and do or cause
to be done all things necessary to keep in full force and effect all
rights, franchises, licenses, contracts and agreements which are
necessary to own its assets and carry on its business. The Borrower
will maintain its assets in good repair and working condition and will
carry on only the type of businesses carried on by the Guarantor at the
date hereof . The Borrower shall conduct its business in such a manner
so as to comply in all material respects with all applicable laws and
regulations.
(k) Further Assurances. The Borrower shall, at the Bank's request, and at
the Borrower's expense, perform such acts as may be necessary or
advisable to carry out the intent of this Agreement.
(l) Litigation, etc. The Borrower shall give the Bank prompt written notice
of any material litigation involving the Borrower or proceeding which
might reasonably be considered to materially adversely affect the
Borrower's financial status or the operation of its business.
(m) Insurance. The Borrower shall maintain in force with reputable insurers
insurance with respect to losses of or damage to its assets from such
risks, casualties and contingencies and of such
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types and in such amounts and subject to such deductible amounts as are
customary in the case of persons engaged in the same or similar business
with similar assets.
(n) Rights of Inspection. At any reasonable time and from time to time upon
reasonable prior notice, which in any event shall not be less than 3
Banking Days, the Borrower will, within the limits of its powers and the
law, permit the Bank or any authorized representative thereof, at the
expense of the Bank, to inspect its assets and properties and to examine
and make copies of any financial information in its possession relating
to its records and books of account. In exercising the Bank's rights
under this section, the Bank will take all reasonable steps to minimize
the disruption to the ordinary course of operation of the Borrower's
business.
(o) No Sale. The Borrower will not, sell, assign, transfer, convey, or
otherwise dispose of or permit or acquiesce in the sale, assignment,
transfer, conveyance or other disposition of its assets other than in
the ordinary course of business and other than the sale of obsolete
assets or assets no longer used in the business of the Borrower, sold in
a commercially reasonable manner, for value.
(p) Pari Passu Ranking. The Borrower will not take, or permit any action to
be taken, or suffer to exist any event, which results or would result in
the amounts due or to become due hereunder ceasing to rank pari passu,
equally, and rateably with all other unsubordinated obligations of the
Borrower.
(q) Payment of Taxes and Claims. The Borrower will pay and discharge
before the same become delinquent:
(i) all material taxes, assessments and governmental charges or levies
imposed upon it or upon its assets; and
(ii) all lawful claims which, if unpaid, might become a lien upon its
assets, except for any such tax or claim which is being contested
in good faith by proper proceedings with appropriate reserves
having been set aside.
(r) No Dividends. The Borrower shall not declare or pay any dividends,
purchase, redeem or retire or otherwise acquire for value any of the Borrower's
capital stock now or hereafter outstanding or, except in the ordinary course of
its business, make any loans or advances to any entity, including without
limitation, the Guarantor or any affiliate of the Borrower or the Guarantor.
(s) Amalgamation. The Borrower shall, as soon as possible after completion
of the transactions and agreements under the Share Purchase Agreement,
amalgamate with Newco pursuant to the laws of Canada and shall cause Amalco to
(i) execute such acknowledgements, assumptions, or other
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agreements as shall be reasonably required by the Bank to ensure that Amalco
shall be bound by this Agreement, (ii) provide a certificate of a senior officer
of Amalco setting forth the specimen signatures of the individuals authorized to
sign documents referred to in (i) above, and (iii) provide an opinion of counsel
to Amalco addressed to the Bank, in a format acceptable to the Bank.
ARTICLE 8
CONDITIONS PRECEDENT
8.01 Conditions Precedent to Effectiveness of Agreement. This agreement
shall become effective upon the fulfillment of the following conditions
precedent:
(a) the conditions precedent set forth in Section 8.02 have been
fulfilled or have been waived by the Bank;
(b) the parties shall have entered into, and all conditions precedent
to the transaction contemplated by, the Share Purchase Agreement
shall have been satisfied or waived;
(c) the Borrower has filed the Articles of Amalgamation to form
Amalco, which Articles of Amalgamation will not become effective
until after the purchase by the Borrower of the Shares;
(d) the Bank and its counsel shall be satisfied that all necessary
approvals, acknowledgments and consents have been given and all
relevant laws have been complied with as concerns all agreements
and transactions referred to herein; and
(e) the Bank has received, in form and substance satisfactory to the
Bank,
(i) certificates of a senior officer of each of the Obligors
setting forth specimen signatures of the individuals
authorized to sign this agreement, and the documents
referred to in Section 7.01(s), certified copies of the
resolutions or other corporate proceedings of the Obligors
authorizing the transactions under this Agreement and other
corporate and factual matters relevant to the transactions
under this Agreement;
(ii) an opinion of counsel to the Borrower, addressed to the
Bank, in the form annexed hereto as Appendix "C"
(iii) the Guarantee and an opinion of counsel to the Guarantor,
addressed to the Bank, in the form annected hereto as
Appendix "D".
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(iv) an opinion of United States counsel to the Bank, addressed
to the Bank, in the form annexed hereto as Appendix "E".
8.02 Conditions Precedent to All Credit. The obligation of the Bank to
extend credit hereunder by means of drawdown, rollover or conversion from one
type of credit availment to another is subject to fulfillment of the following
conditions precedent on the date such credit is extended:
(a) no Default has occurred and is continuing or would arise as a
result of such extension of credit; and
(b) the representations and warranties of the Borrower contained in
Section 6.01, the representations and warranties of the Guarantor
contained in Article V of the Guarantor Credit Agreement, and the
representations of the Guarantor contained in the Guarantee shall
be true and correct in all material respects on and as of the date
such credit is obtained as if such representations and warranties
were made on such date, except to the extent they refer to filings
made by the Guarantor with the United States Securities and
Exchange Commission ("SEC"), in which case they shall be deemed
amended to include all filings made by the Guarantor with the SEC
to the date hereof.
8.03 Waiver. The terms and conditions of Section 8.02 are inserted for the
sole benefit of the Bank and the Bank may waive them in whole or in part, with
or without terms or conditions, in respect of any extension of credit, without
prejudicing the Bank's right to assert them in whole or in part in respect of
any other extension of credit.
ARTICLE 9
DEFAULT AND REMEDIES
9.01 Events of Default. Upon the occurrence of any one or more of the
following events:
(a) the non-payment of any amount due hereunder within three Banking
Days after notice of non-payment has been given to the Borrower by
the Bank;
(b) the permanent suspension of substantially all of the operations of
the Borrower;
(c) the Borrower shall (i) become insolvent or generally not pay its
debts as such debts become due, (ii) admit, in writing, its
inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; (iii) file a notice of
intention to file a
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proposal under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors; (iv) institute or have
instituted against it any proceeding seeking:
(i) to adjudicate it a bankrupt or insolvent,
(ii) a liquidation, winding-up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or
(iii) the entry of any order for relief or the appointment of a
receiver, trustee or custodian for it or for any substantial
part of its assets,
and, in the case of any such proceeding instituted against it (but
not instituted by it) the proceedings have not been discharged
within 30 days from the commencement of such proceedings;
(d) any representation or warranty made by the Borrower in this
agreement or any representation and warranty made by the Guarantor
in the Guarantor Credit Agreement or any information furnished in
writing to the Bank by the Borrower or by the Guarantor proves to
have been incorrect in any material respect when made or
furnished;
(e) the breach or failure of due observance or performance by the
Borrower of any covenant or provision of this agreement, other
than those heretofore dealt with in this Section 9.01, or of any
other document, agreement or instrument delivered pursuant hereto
or referred to herein which is not remedied by the Borrower within
ten Banking Days after the earlier of (i) the time that the
Borrower becomes aware of the default or (ii) the time of the
giving of notice from the Bank to the Borrower of the occurrence
of such breach;
(f) if there shall be an action, suit, inquiry, claim or proceeding
against or affecting the Borrower before any governmental,
parliament, legislature, regulatory authority, agency, commission,
board or court or before any private arbitrator, mediator or
referee which in any case or in the aggregate would reasonably be
expected to result in the inability of the Borrower to perform its
obligations hereunder;
(g) if a receiver, receiver manager, liquidator or other person with
like powers is appointed with respect to, or if an encumbrancer
takes possession of any substantial part of the properties or
assets of the Borrower and such encumbrancer continues to be in
possession thereof for a period of thirty (30) days;
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(h) if one or more final judgments or orders for the payment of money
in excess of $1,000,000 be rendered against the Borrower which is
not appealed or discharged within 30 days from the imposition of
such judgment;
(i) if an event or condition shall occur which constitutes an event of
default under any other agreement or instrument relating to
indebtedness of the Borrower exceeding $1,000,000 or which would
permit the acceleration of such indebtedness;
(j) if an Event of Default (as defined in the Guarantor Credit
Agreement) shall occur under the Guarantor Credit Agreement, it
being agreed that if the Guarantor Credit Agreement provides that
a specified event of default may not occur until a period of time
has elapsed following the giving of notice by the Agent (under and
as defined in the Guarantor Credit Agreement) then such notice may
be provided by the Bank, for the purpose of this Agreement;
(k) if the Guarantor shall breach any of the Financial Covenants and
such breach shall continue unremedied for a period of 20 days,
whether or not the lenders under the Guarantor Credit Agreement
shall have waived compliance with such Financial Covenants and
whether or not such lenders shall have agreed that such default
shall not be an Event of Default;
(l) if the Guarantor shall breach any of the representations,
warranties or, covenants set out in the Guarantee (and in the case
of a breach of the representations, warranties or covenants set
out in the Guarantor Credit Agreement which are incorporated by
reference in the Guarantee, such breach constitutes an Event of
Default under the Guarantor Credit Agreement) including without
limitation, if the indebtedness and liability of the Guarantor
under the Guarantee shall no longer rank pari passu, equally, and
rateably with all of the present and future indebtedness and
liability of the Guarantor;
(m) if the Guarantor shall no longer directly or indirectly, own a
majority of the issued and outstanding voting shares of the
Borrower;
(n) if all or any part of the Guarantee is invalid, unenforceable or
terminated in any respect, or if the Guarantor denies all or any
of its obligations under the Guarantee,
then, without limitation to the Bank's rights and remedies at law or in equity,
the right of the Borrower to obtain any further credit hereunder and all of the
obligations of the Bank hereunder to extend such further credit shall
automatically terminate and the Bank may, by notice to the Borrower, declare all
indebtedness of the Borrower to the Bank pursuant to this agreement (including
the present value of
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the face amount of all Bankers' Acceptances issued and outstanding hereunder
based on their respective maturity dates, the present value to be calculated
using a discount rate equal to the yield of bills of exchange accepted by the
Bank and having a similar maturity date) to be immediately due and payable
whereupon all such indebtedness shall immediately become and be due and payable
without further demand or other notice of any kind, all of which are expressly
waived by the Borrower. Upon the payment by the Borrower to the Bank of the
present value of the face amount of all Bankers' Acceptances issued and
outstanding hereunder, the Borrower shall have no further liability to the Bank
with respect to such Bankers' Acceptances.
9.02 Automatic Acceleration. If the Borrower is adjudged or declared
bankrupt or insolvent or any of the proceedings referred in the event of default
set out at Section 9.01(c) above shall be voluntarily instituted by the
Borrower, or the Borrower indicates its consent to, approval of, or
acquiescence in, any such proceeding for it or for any substantial part of its
property, or consents to the appointment of any receiver or trustee (which
events shall be included in the list of events of default set out above), then,
without limiting the Bank's rights and remedies at law, equity, or otherwise
under this Agreement, all indebtedness of the Borrower to the Bank in connection
with the agreement will be automatically accelerated and will be required to be
paid by the Borrower, without the necessity of notice or otherwise and, any
right of the Borrower to any further utilization the Credit Facility shall
automatically terminate.
9.03 Remedies Cumlative. The rights and remedies of the Bank under this
Agreement are cumlative and are in addition to and not in substitution for any
other rights or remedies provided by law.
ARTICLE 10
MISCELLANEOUS
10.01 Waivers and Amendments. No failure or delay by the Bank in exercising
any right hereunder shall operate as a waiver of such right nor shall any single
or partial exercise of any power or right hereunder preclude its further
exercise or the exercise of any other power or right. Any waiver by the Bank of
the strict observance, performance or compliance with any term, covenant or
condition of this agreement is not a waiver of any subsequent default and any
indulgence by the Bank with respect to any failure to strictly observe, perform
or comply with any term, covenant or condition of this agreement is not a waiver
of the entire term, covenant or condition or any subsequent default. Any term,
covenant, agreement or condition of this agreement may only be amended with the
consent of the Borrower and the Bank or compliance therewith may only be waived
(either generally or in a particular instance and either retroactively or
prospectively) by the Bank.
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10.02 Notices. All notices and other communications provided for herein
shall be in writing and shall be personally delivered to an officer or other
responsible employee of the addressee or sent by telefacsimile or other direct
written electronic means, charges prepaid, at or to the applicable addresses or
telefacsimile numbers, as the case may be, set opposite the party's name on a
signature page hereof or at or to such other address or addresses or
telefacsimile number or numbers as either party hereto may from time to time
designate to the other party in such manner. Any communication which is
personally delivered as aforesaid shall be deemed to have been validly and
effectively given on the date of such delivery if such date is a Banking Day and
such delivery was made during normal business hours of the recipient; otherwise,
it shall be deemed to have been validly and effectively given on the Banking Day
next following such date of delivery. Any communication which is transmitted by
telefacsimile or other direct written electronic means as aforesaid shall be
deemed to have been validly and effectively given on the date of transmission if
such date is a Banking Day and such transmission was made during normal business
hours of the recipient; otherwise, it shall be deemed to have been validly and
effectively given on the Banking Day next following such date of transmission.
10.04 Successors and Assigns. This agreement shall enure to the benefit of
and shall be binding upon the parties hereto and their respective successors and
permitted assigns.
10.05 Assignment. Neither this agreement nor the benefit thereof may be
assigned by the Borrower. The rights and obligations of the Bank hereunder may
be assigned or participated by the Bank in whole or in part without the prior
written consent of the Borrower provided that, prior to the occurence of an
Event of Default:
(a) in the case of any such assignment, the assignee must be a
resident of Canada for the purposes of the Income Tax Act
(Canada); and
(b) no such assignment or participation shall impose any liabilities
or obligations on the Borrower or the Guarantor other than those
owed to the Bank by the Borrower and the Guarantor under this
agreement and the Guarantee.
10.06 Entire Agreement. This agreement and the agreements referred to herein
and delivered pursuant hereto constitute the entire agreement between the
parties hereto relating to the Credit Facility and supersede any prior
agreements, undertakings, declarations, representations and understandings, both
written and verbal, in respect of the subject matter hereof.
10.07 Foreign Currency Obligations. The Borrower shall make payment of all
amounts owing hereunder in the currency (the "Original Currency") in which the
Borrower is required to pay such obligation. If the Borrower makes payment
relative to any obligation to the Bank in a currency (the
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Other Currency") other than the Original Currency (whether voluntarily or
pursuant to an order or judgment of a court or tribunal of any jurisdiction)
such payment shall constitute a discharge of the Borrower's liability hereunder
in respect of such obligation only to the extent of the amount of the Original
Currency which the Bank is able to purchase at its main branch in the
jurisdiction where the loans to the Borrower are recorded, with the amount it
receives on the date of receipt in accordance with its normal practice. If the
amount of the Original Currency which the Bank is able to purchase is less than
the amount of such currency originally due to the Bank in respect to the
relevant obligation, the Borrower shall indemnify and save the Bank harmless
from and against any loss or damage arising as a result of such deficiency.
This indemnity shall constitute an obligation contained in this Agreement, shall
give rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by the Bank and shall continue in full
force and effect notwithstanding any judgment or order in respect of any amount
due hereunder or under any judgment or order.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
THE TORONTO-DOMINION BANK
P.O. Box 1
Toronto Dominion Centre
00 Xxxx Xx. Xxxx & Xxx Xx.
0xx Xxxxx, TD Tower
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Manager
Credit Administration
Telefax: (000) 000-0000
Telephone: (000) 000-0000
c.c. TD New York
By:
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Title:
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By:
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Title:
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