AMENDED AND RESTATED
--------------------
EXTENDIBLE REVOLVING TERM CREDIT FACILITY
-----------------------------------------
This Agreement amends and restates in full the Loan Agreement dated
April 19, 1995 and the Amended and Restated Extendible
Revolving Term Credit Facility dated July 2, 1996
between the Borrower and the Lender.
June 9, 1997
BORROWER: Norcen Energy Resources Limited (Norcen).
---------
FACILITY: Extendible Revolving Term-Credit Facility.
---------
AMOUNT: Cdn. $50,000,000 or the U.S. dollar equivalent.
-------
PURPOSE: For general corporate purposes, including commercial paper
------- backstop, capital expenditures, short term working capital
needs, refinancing existing bank indebtedness and for
Permitted Acquisitions.
LENDER: ABN AMRO Bank Canada ("ABN")
-------
AVAILABILITY
------------
PERIOD: The Facility will revolve and fluctuate for a period of
------- 364 days ("Revolving Period"), subject to renewal as provided
below, followed by a 2 year non-revolving term loan ("Term
Period") with a bullet payment at the end of the Term
Period.
REPAYMENT: Revolving Period
---------- ----------------
The Revolving Period ends June 8, 1998. The Revolving Period
may be extended from time to time at the Lender's sole
discretion for up to 364 days, within 30 days after the
Borrower's request which may not be made more than twice in
any 12 month period. The Borrower's request for extension will
include a restatement of the Representations and Warranties.
No response from the Lender within 30 days of the request
shall mean that an extension is not granted.
2
Term Period
-----------
The Term Period commences on the day after the last day of the
Revolving Period and ends on that date which is the first
Business Day following the expiration of two years from the
date of commencement of the Term Period, at which point all
amounts then outstanding under this Facility are immediately
due and payable by the Borrower. Any undrawn portion of the
Facility will be canceled at the end of the Revolving Period.
Any prepayment during the Term Period will constitute a
permanent reduction of the Facility. For greater certainty,
the rollover of a B/A or Libor Loan does not constitute a
prepayment during the Term Period.
RANKING: All amounts outstanding under the Facility will be senior
-------- unsecured obligations of the Borrower ranking pari passu with
all existing and future Senior Debt of the Borrower, other
than indebtedness secured by Permitted Encumbrances which
under applicable law ranks in priority thereto. The Facility
will at all times rank senior to any existing or future
Subordinated Indebtedness.
AVAILMENTS: The Facility will be available by way of the following:
-----------
o Canadian dollar prime loans ("Cdn. Prime Rate Loans");
o US dollar base rate loans ("USBR Loans")'
o Canadian dollar bankers' acceptances ("B/A's);
o US dollar London interbank offer rate loans ("Libor
Loans"); and
o US dollar or Canadian dollar letters of credit or
guarantee.
CURRENCY EXCESS: If at any time the Canadian dollar equivalent of all
---------------- outstanding advances based on the noon (Toronto time) Bank of
Canada exchange rate exceeds the available facility amount (a
"Currency Excess"), the Borrower will repay forthwith Cdn.
Prime Rate Loans or USBR Loans until such time as the Currency
Excess is
3
eliminated. If a Currency Excess remains after repayment of
all Cdn. Prime Rate Loans or USBR Loans, then the Borrower
will:
1) collateralize dollar for dollar the Currency Excess with
Canadian or US dollar deposits, or
2) repay any Libor Loans, as well as any expenses associated
with breaking a Libor Loan, prior to maturity; or
3) any combination of the foregoing.
BORROWING
AND NOTICE
PROVISIONS: A) The Borrower may borrow as follows:
-----------
o Cdn. Prime Rate Loans in minimum amounts of C$1
million and multiples of $ 100,000 thereafter;
o USBR Loans in minimum amounts of US$1 million and
multiples of $ 100,000 thereafter;
o advances of B/A's will, subject to availability, be
issued for periods of 30, 60, 90, 120 or 180 days, or
such other period as is agreed to by the Lender, in
minimum amounts of C$1 million and multiples of
C$100,000 thereafter unless otherwise determined by
the market for B/A's; and
o Libor Loans, with maturities of 1, 2, 3 or 6 months,
or such other period as is agreed to by the Lender, in
minimum amounts of US$1 million and multiples thereof.
B) The following notice provisions will apply to drawdowns,
repayments, rollovers and conversions:
Prime Rate/USBR Loans
o up to $20,000,000: same Business Day 10:00 a.m.
(Calgary time) notice is required; and
o over $20,000,000: 10:00 a.m. (Calgary time) one
Business Day prior notice is required.
4
B/A's
To the extent that the Borrower markets the B/A's, no
notice is required. Should the Borrower request the Lender
to market the B/A's then the following notice provisions
shall apply:
o up to $20,000,000: same Business Day 10:00 a.m.
(Calgary time) notice is required; and
o over $20,000,000: 10:00 a.m. (Calgary time) one
Business Day prior notice is required.
LIBOR Loans
o 3 banking days (in London and Calgary) prior notice.
The Borrower may repay any part of the outstanding amount
without penalty subject to applicable notice periods and
provided that B/A's and Libor Loans may be repaid on
maturity dates only, unless, in the case of Libor Loans,
the Borrower pays the expenses associated with breaking
the Libor Loan prior to maturity.
INTEREST RATES: The Borrower shall pay interest or fees on all borrowings
--------------- hereunder at the following rates:
During Revolving Period: - Libor + 40 bp
- BA Rate + 40 bp
- ABN USBR
- ABN Canadian Prime
Letters of Credit ("L/C")
and Letters of Guarantee
("L/G"): - Financial L/C or L/G - 50 bp
- Non-Financial or Performance
L/C and L/G - 25 bp.
- All L/C and L/Gs may be
renewed annually at the
discretion of the
5
Lender for an additional 1
year term.
During Term Period: - All rates increase by 12.5 bp
Interest based on Cdn. Prime Rate and USBR Loans will be
calculated on a 365 or 366 day year, as applicable, and
payable monthly in arrears on the last banking day of the
month.
B/A fees are payable at the time of endorsement and are
calculated based on a 365-day or 366-day year.
Interest on Libor Loans will be based on the Telerate
screen #3750 rate two days prior to funding and on a
360-day year. Interest is payable on rollover dates, or if
the period of advance exceeds 3 months, interest will
accrue and be payable on the day which is 3 months after
the first day of such period, and on the last day of the
Libor Loan.
Any interest rate based on a period less than a year
expressed as an annual rate for purposes of the Interest
Act (Canada) is equivalent to such determined rate
multiplied by the actual number of days in the calendar
year in which same is to be ascertained and divided by the
number of days in the period upon which it is based.
The Borrower will pay interest on all overdue amounts
(including overdue interest) at the Interest Rate
specified in the Facility plus 1% per annum. All overdue
interest is calculated on a daily basis and will be
payable both before and after default, maturity and
judgement.
FEES: Standby Fees of 10 bp will be paid quarterly in arrears on
----- the undrawn portion of the Facility during the Revolving
Period. For these purposes, the amount of borrowings
outstanding in US Dollars will be notionally converted to
Cdn. Dollars at the exchange rate in effect on the
business Day prior to the due date for payment of Standby
Fees.
EXPENSES: The Borrower will pay all reasonable costs and expenses
--------- (including legal fees) incurred in connection with the
review and preparation of the Facility Documents, the
preservation and/or enforcement of any of the rights of
the Lender under the Facility, and loss or expenses
(including legal fees) incurred by the Lender
6
as a consequence of any failure to pay any stamp,
registration or other tax to which the Facility may be
subject.
CONDITIONS
PRECEDENT: A) Conditions precedent to implementation of the terms
---------- and conditions herein contained are the following:
1) officer's certificate stating that the
Representations and Warranties are true and
accurate in all material respects; and
2) internal legal opinion stating that this Facility
Agreement is valid, binding and legally
enforceable.
B) Conditions precedent to subsequent drawdowns,
rollovers and conversions will be as follows:
1) receipt of applicable notice; and
2) no Event of Default or Potential Event of Default
has occurred or would occur as a result of such
drawdown, rollover or conversion.
REPRESENTATIONS
AND WARRANTIES: Representations and Warranties are the following:
---------------
1) corporate existence of the Borrower;
2) corporate power and legal capacity of the Borrower to
carry on business and own assets;
3) corporate power and authorization of the Borrower to
execute and deliver the Facility Documents and to
perform covenants under the Facility Documents;
4) Facility Documents have been duly executed and
delivered by the Borrower;
5) Facility Documents create legal, valid, binding and
enforceable obligations of the Borrower;
6) the most recent audited consolidated financial
statements of the Borrower (initially December 31,
1996), fairly present the consolidated financial
condition of the Borrower, as at such date and the
results of operations for the year ended, in
7
accordance with GAAP consistently applied, and since
the most recent audited financial statements of the
Borrower, there has been no material adverse change in
the consolidated financial position or business
operations of the Borrower;
7) the Borrower has in full force and effect such
insurance policies in amounts covering the properties
and operations of the Borrower as are customarily held
by similar corporations engaged in the same or similar
businesses in the localities where the Borrower's
properties and operations are located;
8) no pending or threatened action, suit, litigation,
judgment or proceeding that has a reasonable
likelihood of materially adversely affecting the
Borrower's ability to repay or perform its obligations
under the Facility Documents other than as disclosed
in writing by the Borrower on or prior to the
execution of the Facility Documents;
9) no known material environmental liability, actual or
contingent which has not been provided for in the
financial statements of Borrower in accordance with
GAAP; compliance with environmental laws in all
material respects; all necessary material permits,
licenses and other consents required under
environmental laws have been received and are in good
standing, and properties are not the subject of any
outstanding or threatened order or judgement alleging
violation of Environmental Laws which if enforced
against the Borrower would have a material adverse
effect on the financial condition, operations or
business of the Borrower;
10) unencumbered ownership and clear title to assets
except for Permitted Encumbrances;
11) all amounts outstanding under the Facility rank at
least pari passu in right of payment with the
Borrower's other most senior unsecured Indebtedness,
other than Indebtedness which is a preferred claim
arising by operation of law or a Permitted
Encumbrance;
12) no Event of Default or Potential Event of Default has
occurred and is continuing; and,
8
13) neither the execution and delivery of the Facility
Documents nor compliance with the terms and
provisions thereof will conflict with, result in a
breach of, or constitute a default under any law or
regulation, any court order, judgment or decree, or
any agreement or instrument binding upon the
Borrower.
GENERAL COVENANTS: The Borrower will:
------------------
1) pay all amounts owing under the Facility when due;
2) perform its obligations under the Facility Documents;
3) maintain its corporate existence;
4) supply to the Lender on a regular basis:
a) annual audited consolidated financial statements
of the Borrower prepared in accordance with GAAP,
as soon as available but in any event within 120
days of the end of each fiscal year;
b) quarterly unaudited consolidated financial
statements of the Borrower prepared in accordance
with GAAP, as soon as available but in any event
within 90 days of the end of the first 3 fiscal
quarters of each fiscal year, in all cases stating
comparative figures for the corresponding date and
period in the previous fiscal year;
c) a compliance certificate as per Exhibit A within
120 days of the fiscal year end and within 90 days
of the end of the first 3 quarters of each fiscal
year showing the calculation of all Financial
Ratios and including an officer's certificate
stating that no Event of Default or Potential
Event of Default has occurred;
d) Annual information forms or notices of material
change which are required to be filed by the
Borrower with any regulatory authority or
securities exchange;
5) maintain the Interest Coverage Ratio and the Senior
Debt to Capital Ratio (the "Financial Ratios") as
follows:
9
a) Interest Coverage Ratio on a rolling 4 quarter
basis to be greater than 2.50 times;
b) Senior Debt to Total Capital Ratio to be
maintained below .60:1,
all Financial Ratios to be calculated quarterly on a
consolidated basis, in accordance with GAAP;
6) carry on and conduct its business in a proper and
efficient manner and in compliance with applicable
laws in all material respects;
7) maintain insurance policies covering its material
properties and operations as is customarily maintained
by similar corporations engaged in the same or similar
business;
8) not liquidate, dissolve or wind-up or take any steps
or proceedings in connection therewith,
9) not permit a merger with or into, or a consolidation
or amalgamation with, or transfer all or substantially
all its assets to, another entity, other than a merger
or amalgamation between the Borrower and a
Wholly-Owned Subsidiary, or between Wholly-Owned
Subsidiaries:
a) if an Event of Default or Potential Event of
Default exists or would occur and be continuing
immediately before and after giving effect to the
transaction; and
b) unless the successor corporation:
i) agrees to be bound by the Facility Documents;
ii) acknowledges the continuing validity and
enforceability of the Facility Documents;
iii) represents and warrants that the transaction
will not adversely affect the rights and
benefits afforded the Lender under the
Facility Documents;
iv) represents that the creditworthiness of the
resulting, surviving or transferee entity is
not materially weaker than the Borrower prior
to such action; and
10
v) provides legal opinions confirming the
matters set forth in paragraphs i), ii), and
iii) above.
10) not permit any lien, mortgage, charge, hypothec,
pledge or any other security interest or encumbrance
on its property or assets, except for Permitted
Encumbrances, unless at the same time or prior to
securing any other Indebtedness, the Borrower grants
security for this Facility which ranks equally and
rateably with the other Indebtedness.
11) Borrower will promptly inform Lender of occurrence of
any Event of Default or Potential Event of Default.
EVENTS OF DEFAULT: Events of Default are as follows:
------------------
1) nonpayment of principal when due;
2) nonpayment of interest or stamping fees due to the
Lender for 5 days after the due date and non-payment
of standby fees or other fees due to the Lender in
either case for 5 days after notice of nonpayment.
3) nonpayment of other amounts under the Facility within
30 days after notice from the Lender;
4) breach of covenant under the Facility which remains
unremedied for 30 days after notice;
5) materially incorrect or misleading representation or
warranty under the Facility when given;
6) cross default to any defaulted Indebtedness of the
Borrower in excess of C$25 million and any applicable
period of grace has expired;
7) bankruptcy, insolvency, cessation of business or other
dissolution proceedings of the Borrower (30 day cure
period if involuntary bankruptcy applies);
8) final judgement or order in excess of C$25 million is
rendered against the Borrower which is not, within 60
days after entry thereof, bonded, discharged or stayed
pending appeal, or is not discharged within 60 days
after the expiration of such stay; or
11
9) a lien or security interest in excess of $25 million
is enforced against the property of the Borrower or a
Wholly-Owned Subsidiary.
Upon the occurrence and continuance of an Event of
Default: the Lender may declare all Indebtedness under the
Facility to be due and payable, and the Lender will have
no obligation to make further advances, rollovers or
conversions; the Lender will have right of set off upon
the occurrence and continuance of an Event of Default; all
Labor Loans and USBR Loans may, at the Lender's sole
discretion, be converted to Cdn Prime Rate Loans at any
time and B/A's and letters of credit must be
collateralized by the Borrower in an escrow account;
additional interest will be calculated at the default rate
of 1% above the Applicable Credit Spread; and, upon the
occurrence and continuance of an Event of Default the
Lender may arrange for an environmental audit at the
expense of the Borrower.
INCREASED COSTS
AND CHANGE OF
-------------
LAW: Increased costs and compensation for reduced return to the
---- Lender in providing and maintaining the Facility including
those costs arising from capital adequacy requirements and
change of law to be for the account of the Borrower. The
Lender will not be obliged to provide advances if rendered
illegal.
ASSIGNMENT: The Lender reserves the right to sell, assign, transfer
----------- or grant participation in the Facility, in whole or in
part, with the consent of the Borrower (such consent not
to be unreasonably withheld) provided that consent of the
Borrower will not be required after an Event of Default or
Potential Event of Default. Assignments will be permitted
in minimum amounts equal to the lesser of (i)
C$10,000,000; and (ii) the remaining commitment of the
Lender.
The Borrower agrees to execute such further documentation
as the Lender may request for the purpose of any
assignment, sale or transfer of the Facility.
CANCELLATION: The undrawn portion of the Credit Facility may be
------------- cancelled without penalty upon three Business Days notice.
12
GOVERNING LAW: Governing law will be the laws of the Province of Alberta
-------------- and Canada applicable therein.
In witness whereof the parties hereto, by executing this document, are agreeable
to the terms and conditions as presented herein; Dated on 10th day of June,
1997.
ABN AMRO BANK CANADA
Per: /s/ Xxxx Xxxx
------------------------
Xxxx Xxxx
Vice President
Per: /s/ X.X. Xxxx
------------------------
X.X. Xxxx
Vice President, Credit
NORCEN ENERGY RESOURCES LIMITED
Per: /s/ Xxxxxx X. Xxxxxx
------------------------
Xxxxxx X. Xxxxxx
Treasurer
Per: /s/ ?
------------------------
13
DEFINITIONS
-----------
"Applicable Credit Spread" means:
- with respect to Canadian Prime Rate Loans....nil
- with respect to USBR Loans...................nil
- with respect to Labor Loans..................40 bp
- with respect to B/A's........................40 bp (the stamping fee)
"B/A Rate" means the discount rate at which the Lender's B/A's are purchased by
the Lender or sold into the market by the Borrower.
"Business Day" is a day, other than a Saturday or Sunday, on which the Lender is
open for business in Xxxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxxx and New York, New York,
and with respect to Labor Loans, in London England.
"Cashflow" means, in respect of the Borrower, the aggregate of Consolidated
Net Earnings, Consolidated Interest Expense, Taxes and Non-Cash Items, all
without duplication and determined in accordance with GAAP.
"Cdn. Prime" means the rate of interest per annum, based on a 365 day year,
established and reported by the Lender to the Bank of Canada from time to time
as its reference rate of interest for determination of interest rates which the
Lender charges to customers of varying degrees of creditworthiness in Canada for
Canadian dollar loans made by it in Canada. For purposes of this Facility, the
Cdn. Prime will be the higher of the stated rate by the Lender or CDOR plus the
Applicable Credit Spread.
"CDOR" means the average yield to maturity for bankers' acceptances which is
quoted on Xxxxxx'x Canadian Discount Offer Rate screen at 10:00 a.m. Toronto
time on the applicable date of advance for B/A's having a term to maturity of 1
month.
"Consolidated Interest Expense" means consolidated interest, whether expensed or
capitalized, in respect of Indebtedness determined in accordance with GAAP.
"Consolidated Net Earnings" means consolidated net income or loss as reported on
the Borrower's consolidated statement of earnings excluding income from
discontinued operations determined in accordance with GAAP.
"Consolidated Tangible Net Worth" means, on a consolidated basis determined in
accordance with GAAP, at any time, the sum of:
a) the Borrower's total shareholder equity, and
b) Subordinated Indebtedness;
less:
c) any amounts of goodwill attributable to the Borrower.
14
"Facility Documents means:
a) this letter agreement between the Borrower and the Lender; and,
b) such other documents and certificates which in the opinion of the
Lender, acting reasonably, are required to fully document or satisfy
the terms and conditions herein contained.
"Fed Funds Rate" means, for any day, the rate set forth in the Federal Reserve
Bank of New York's weekly statistical release designated at H.15(519), opposite
the caption "Federal Funds (Effective)" for that day, or (if that day is not a
Business Day) for the next preceding Business Day.
"Funded Debt" means, all Indebtedness payable more than one year from the date
of creation thereof including current maturities of such Indebtedness and
Indebtedness which by its terms is renewable to a due date beyond one year;
excluding Subordinated Indebtedness.
"GAAP" means generally accepted accounting principles which are in effect from
time to time in Canada.
"Guarantees" means an undertaking to become liable for indebtedness for borrowed
money as presented on consolidated financial statements of Borrower.
"Hostile Acquisition" means an offer to acquire shares of a corporation, which
is required to be reported to an applicable securities regulatory authority,
where the board of directors of the target corporation has not approved such
offer nor recommended to the shareholders of the corporation that they sell
their shares pursuant to the proposed offer.
"Indebtedness" means all items in the consolidated financial statements of the
Borrower classified as liabilities for money borrowed in accordance with GAAP
(and will include capitalized leases, and Guarantees or endorsements (other than
of notes, bills and cheques presented to banks for collection or deposit in the
ordinary course of business) of indebtedness of others by the Borrower or
Subsidiaries, to the extend required by GAAP).
"Interest Coverage Ratio" means Cashflow divided by Consolidated Interest
Expense.
"Labor" means the rate of interest per annum, based on a 360 day year at which
the Lender makes available United States dollars which are obtained by the
Lender in the Interbank Euro Currency Market, London, England at approximately
11:00 a.m. (London time) on the second Business Day before the first day of, and
in an amount similar to, and for the period similar to the interest period of
such advance.
"Non-Cash Items" means depreciation, depletion, amortization, foreign exchange
translation gains or losses and other non-cash items included in the calculation
of Consolidated Net Earnings as
15
reported on the Borrower's consolidated statement of earnings as determined in
accordance with GAAP.
"Permitted Acquisition" means a direct or indirect acquisition by the Borrower
which is not a Hostile Acquisition.
"Permitted Encumbrances" means:
a) any security interest, except on fixed assets or on shares of any
Subsidiary or affiliate, given in the ordinary course of business to
any bank or other financial institution, to secure indebtedness
payable on demand or maturing within 12 months of the date that such
indebtedness is originally incurred provided that the total
indebtedness so secured does not exceed $25 million;
b) any Purchase Money Mortgage;
c) Risk Management Liens where the aggregate value of all cash and
securities will not at any time exceed $25 million;
d) any security interest on any petroleum and natural gas right, tangible
assets associated therewith or the products derived therefrom or the
proceeds of sale of such products, to secure production payments,
royalties, carried interests and similar obligations or to secure
obligations in connection with or necessarily incidental to
commitments or purchase and sale of, or the transportation or
distribution of, products derived from the petroleum and natural gas
right, including without limitation forward sales;
e) any security interest on any resource property of the Borrower that
has not been in commercial production during the 12-month period
ending on the date hereof, or has not been in commercial production
during the 12-month period ending at the time of the imposition of
such security to secure any indebtedness incurred for the development
or improvement thereof or the development or improvement of any other
resource property of the Borrower that has not been in commercial
production during the 12-month period ending on the date hereof or has
not been in commercial production during the 12-month period ending at
the time of the imposition of such security;
f) any security interest in favour of the government of any country in
which the Borrower owns assets or carries on business or the
government of any province, state, municipality or other political
subdivision in any such country, or any department or agency of any
such government, given pursuant to a contract, concession, lease,
license, franchise, grant, permit or other instrument pertaining to
such assets or business or required by applicable laws;
16
g) liens for taxes, assessments or other governmental charges not yet due
or, if due, the validity of which is being contested in good faith,
and liens for the excess of the amount of any past due taxes for which
a final assessment has not been received over the amount of such taxes
as estimated and paid by the Borrower;
h) unless it constitutes an Event of Default, the lien of any judgement
rendered or claim filed against the Borrower, which is being contested
in good faith by the Borrower;
i) undetermined or inchoate liens and charges (including builders',
mechanics', warehousemen's carriers' and other similar liens)
incidental to construction or current operations which relate to
obligations not due or delinquent or which are being contested in good
faith by the Borrower;
j) liens incurred or created in the ordinary course of business on any
particular petroleum and natural gas right and or on any tangible
assets associated therewith as security, in favour of any other person
who is conducting the exploration, exploitation, development or
operation of the property or asset to which such petroleum and natural
gas right relates, to secure payment by the Borrower of its proportion
of the costs and expenses of such exploration, exploitation,
development or operation incurred by such other person;
k) any security interest given by the Borrower to a public utility or
municipality or governmental or other public authority when required
by such utility or municipality or other authority in connection with
utility or municipal services required for the operations of the
Borrower in the ordinary course of its business;
1) any security interest on a lease or other instrument permitting the
extraction of substances other than crude oil, natural gas, natural
gas liquids and related products by the Borrower, provided that any
such lease does not interfere with the enjoyment by the Borrower of
any petroleum and natural gas right;
m) any renewal, refunding or extension of any security interest or
encumbrance referred to in the foregoing clauses a) or 1) or of any
security interest or encumbrance on any property in existence at the
time of acquisition thereof, in which the indebtedness thereby secured
after such renewal, refunding or extension is not increased and the
security interest or encumbrance is limited in its recourse to the
property originally subject thereto and any improvements thereon; and
n) any security interest or encumbrance, other than those referred to in
the foregoing clauses a) to m), created by the Borrower if, after
giving effect to the creation of such security interest or
encumbrance, the aggregate principal amount of the indebtedness
secured thereby would not be greater than C$25,000,000.
17
"Potential Event of Default" means an event that would constitute an Event of
Default with the giving of notice, lapse or time or both.
"Purchase Money Mortgage" means any mortgage, charge, hypothec, pledge or other
security or encumbrance created upon any real or personal property acquired by
the Borrower after the date hereof (or previously acquired and substantially
unimproved) to secure or securing the whole or any part of the purchase price of
such property (or, in the case of previously acquired and substantially
unimproved property, the cost of the improvement thereof) or the repayment of
money borrowed to pay the whole or any part of such purchase price or cost, or
any vendor's privilege or lien on such property securing all or any part of such
purchase price or cost, including title retention agreements and leases in the
nature of title retention agreements.
"Risk Management Liens" means liens on cash or marketable securities of the
Borrower granted in connection with any interest rate, foreign exchange or
commodity risk management arrangements provided:
a) the Borrower reasonably expects to produce sufficient commodities
of the type in question in the ordinary course of business to fulfill
such contracts; and
b) the obligations secured by such liens are not due and delinquent.
"Senior Debt" means all Funded Debt that ranks senior to Subordinated
Indebtedness.
"Senior Debt to Total Capital Ratio" means, Senior Debt divided by Total
Capital.
"Subordinated Indebtedness" means Indebtedness that is subordinate in all
circumstances including bankruptcy, in right of payment to Indebtedness under
this Facility and Senior Debt.
"Subsidiary" means any corporation a majority of the shares carrying voting
rights of which are at the time owned or controlled directly or indirectly by
the Borrower.
"Taxes" means income taxes on the Borrower's consolidated statement of earnings
determined in accordance with GAAP.
"Total Capital" means Senior Debt plus Consolidated Tangible Net Worth.
"USBR" or "US Base Rate" means the rate of interest per annum, based on a 365
day year, established by the Lender from time to time as a reference rate for
the determination of interest rates that the Lender charges to customers of
varying degrees of creditworthiness for US dollar loans made by it in Canada.
For purposes of this Facility, the US Base Rate will be the higher of the stated
rate by the Lender or the Fed Funds Rate plus 1%.
"Wholly-Owned Subsidiary" means any Subsidiary in which all of the issued and
outstanding voting shares of each class of its capital are owned directly or
indirectly by the Borrower except that director's qualifying shares need not be
so owned.
