EXHIBIBIT 10(b)
AMENDED AND RESTATED CREDIT AGREEMENT
Made as of March 1, 1998
Between
BURTEK SYSTEMS INC.
as Borrower
and
FIRST CHICAGO NBD BANK, CANADA
as Lender
and
XXXXXXXXXX ELECTRONICS, LTD.
as Guarantor
TABLE OF CONTENTS
SECTION 1 - INTERPRETATION . . . . . . . . . . . . . . . . Page 2
1.1 Certain Defined Terms . . . . . . . . . . . . . . Page 2
1.2 Headings and Table of Contents . . . . . . . . . . .Page 13
1.3 References . . . . . . . . . . . . . . . . . . . .Page 13
1.4 Number and Gender . . . . . . . . . . . . . . . .Page 13
1.5 Time of Day . . . . . . . . . . . . . . . . . . . .Page 13
1.6 Governing Law . . . . . . . . . . . . . . . . . . .Page 13
1.7 Entire Agreement . . . . . . . . . . . . . . . . . .Page 13
1.8 Conflict . . . . . . . . . . . . . . . . . . . . . .Page 13
1.9 Severability . . . . . . . . . . . . . . . . . . . .Page 14
1.10 Currency . . . . . . . . . . . . . . . . . . . . . .Page 14
1.11 Time . . . . . . . . . . . . . . . . . . . . . . . .Page 14
1.12 GAAP . . . . . . . . . . . . . . . . . . . . . . . .Page 14
1.13 Schedules . . . . . . . . . . . . . . . . . . . . .Page 14
SECTION 2 - REPRESENTATIONS AND WARRANTIES . . .Page 14
2.1 Representations and Warranties . . . . . . . . . .Page 14
2.2 Deemed Repetition . . . . . . . . . . . . . . . .Page 16
SECTION 3 - CREDIT FACILITIES . . . . . . . . . . . . . . .Page 16
3.1 Revolving Credit Facility . . . . . . . . . . . . .Page 16
3.2 Term Credit Facility . . . . . . . . . . . . . . . .Page 17
SECTION 4 - PROVISIONS APPLICABLE TO BORROWINGS. . . . . .Page 17
4.1 Notice of Borrowing . . . . . . . . . . . . . . . .Page 17
4.2 Prime and US Prime Loans . . . . . . . . . . . . . .Page 18
4.3 BA Equivalent Loans . . . . . . . . . . . . . . . .Page 18
4.4 Substitute Basis of Borrowing . . . . . . . . . . .Page 19
4.5 Letters of Credit . . . . . . . . . . . . . .Page 19
4.6 Conversion Option . . . . . . . . . . . . . . . .Page 20
4.7 Reliance on Oral Instructions . . . . . . . . . . .Page 21
4.8 Evidence of Indebtedness . . . . . . . . . . . . . .Page 21
SECTION 5 - INTEREST, FEES AND EXPENSES. . . . . . . . . .Page 21
5.1 Payment of Interest on Prime Loans . . . . . . . . .Page 21
5.2 Payment of Interest on US Prime Rate Loans . . . .Page 21
5.3 Applicable Margin . . . . . . . . . . . . . . . . .Page 22
5.4 BA Equivalent Loans . . . . . . . . . . . . . . .Page 23
5.5 Letters of Credit Fee . . . . . . . . . . . . . . .Page 23
5.6 Payment of Interest on Libor Loans . . . . . . . . .Page 23
5.7 Interest on Overdue Amounts . . . . . . . . . . . .Page 24
5.8 Interest Act . . . . . . . . . . . . . . . . . . . .Page 24
5.9 Arrangement Fee . . . . . . . . . . . . . . . . . .Page 24
5.10 Administration Fee . . . . . . . . . . . . . . . .Page 24
5.11 Facility Fee . . . . . . . . . . . . . . . . . . .Page 24
5.12 Limit on Rate of Interest . . . . . . . . . . . . .Page 24
5.13 Change in Circumstances . . . . . . . . . . . . . .Page 25
5.14 Payment of Portion . . . . . . . . . . . . . . . .Page 26
5.15 Illegality . . . . . . . . . . . . . . . . . . . . .Page 26
5.16 Indemnity . . . . . . . . . . . . . . . . . . . . .Page 27
SECTION 6 - PAYMENTS AND REDUCTIONS OF COMMITMENTS . . . .Page 27
6.1 Payments Generally . . . . . . . . . . . . . . . .Page 27
6.2 No Set-Off . . . . . . . . . . . . . . . . . . . . .Page 28
6.3 Application of Payments Before Exercise of Rights .Page 28
6.4 Application of Payments After Exercise of Rights . .Page 28
6.5 Reduction of Commitment . . . . . . . . . . . . . .Page 29
SECTION 7 - COVENANTS . . . . . . . . . . . . . . . . . . .Page 29
7.1 Covenants of the Borrower . . . . . . . . . . . . .Page 29
7.2 Accounting, Financial Statements and Other Information Page 31
SECTION 8 - ENVIRONMENTAL MATTERS. . . . . . . . . . . . .Page 32
8.1 Representations and Warranties . . . . . . . . . . .Page 32
8.2 Covenants . . . . . . . . . . . . . . . . . . . . .Page 32
8.3 Indemnity . . . . . . . . . . . . . . . . . . . . .Page 33
8.4 Scope of Indemnity . . . . . . . . . . . . . . . .Page 33
8.5 Interest . . . . . . . . . . . . . . . . . . .Page 34
SECTION 9 - DEFAULT AND ENFORCEMENT . . . . . . . . . .Page 34
9.1 Events of Default . . . . . . . . . . . . . . . . .Page 34
9.2 Rights upon Default . . . . . . . . . . . . . . .Page 36
9.3 Waiver of Default . . . . . . . . . . . . . . . . .Page 36
SECTION 10 - REMEDIES . . . . . . . . . . . . . . . . . . .Page 36
10.1 Remedies Cumulative . . . . . . . . . . . . . . . .Page 36
10.2 Remedies Not Limited . . . . . . . . . . . . . . . .Page 37
10.3 Set-Off, etc. . . . . . . . . . . . . . . . . . . .Page 37
10.4 Lender May Perform Covenants . . . . . . . . . . . .Page 37
SECTION 11 - MISCELLANEOUS . . . . . . . . . . . . . . . .Page 37
11.1 Amendments and Waivers . . . . . . . . . . . . . . .Page 37
11.2 Notice . . . . . . . . . . . . . . . . . . . . . .Page 37
11.3 Judgment Currency . . . . . . . . . . . . . . . .Page 38
11.4 Further Assurances . . . . . . . . . . . . . . . .Page 38
11.5 Reimbursement of Expenses . . . . . . . . . . . . .Page 38
11.6 Survival . . . . . . . . . . . . . . . . . . . . . .Page 39
11.7 Attornment . . . . . . . . . . . . . . . . . . . . .Page 39
11.8 Successors and Assigns . . . . . . . . . . . . . . .Page 39
11.9 Counterparts . . . . . . . . . . . . . . . . . . . .Page 39
AMENDED AND RESTATED CREDIT AGREEMENT
This Agreement is made as of March 1, 0000
X X X X X X X:
BURTEK SYSTEMS INC.
as Borrower
and
FIRST CHICAGO NBD BANK, CANADA
as Lender
and
XXXXXXXXXX ELECTRONICS, LTD.
as Guarantor
WHEREAS:
A. First Chicago NBD Bank, Canada (the "Lender") entered
into a credit agreement made as of February 18, 1997 (the "Credit
Agreement") with Xxxxxxxxxx Electronics Acquisition Corp., the
partial purpose of which was to finance the acquisition by
Xxxxxxxxxx Electronics Acquisition Corp. of all the capital stock
of Burtek Systems Inc. ("Old Burtek")
B. Subsequent to the execution of the Credit Agreement,
Xxxxxxxxxx Electronics Acquisition Corp. acquired all the capital
stock of Old Burtek. By articles of Amalgamation filed effective
May 31, 1997, Xxxxxxxxxx Electronics Acquisition Corp.
amalgamated with Old Burtek to continue as the Borrower.
C. The Lender and the Borrower entered into a first
amending agreement made as of August 14, 1997 (the "First
Amending Agreement") amending the terms of the Credit Agreement.
D. The Lender and the Borrower entered into a second
amending agreement made as of August 22, 1997 (the "Second
Amending Agreement") further amending the terms of the Credit
Agreement.
E. As further amendments to the Credit Agreement are
required, the Borrower and the Lender have agreed to enter into
this Amended and Restated Credit Agreement to provide for such
further amendments.
NOW THEREFORE, for value received the parties agree as follows:
SECTION 1 - INTERPRETATION
1.1 Certain Defined Terms. The terms defined herein shall have,
for all purposes of this Agreement, the following meanings unless
the context expressly or by necessary implication otherwise
requires:
"Accounts" means the accounts and records established by the
Lender to record the Borrower's liability to the Lender in
respect of the Borrowings made available to the Borrower.
"Additional Compensation" has the meaning ascribed to it in
Section 5.13(c).
"Administration Fee" has the meaning ascribed to in Section
5.10.
"Affected Borrowing" has the meaning ascribed to it in
Section 5.14.
"Affiliate" has the meaning established in the Canada
Business Corporations Act in effect on the date hereof.
"Agreement" means this agreement, including the Schedules,
as the same may be amended, varied, supplemented, restated,
renewed or replaced at any time and from time to time.
"Applicable Law" means, in respect of any Person, property,
transaction or event, all present or future applicable laws,
statutes, regulations, treaties, orders, judgments and decrees
and all applicable official directives, rules, guidelines, orders
and policies of any governmental bodies having authority over any
of the foregoing.
"Applicable Margin" means, at any date of determination
thereof, the rate per annum calculated in accordance with Section
5.3.
"Arrangement Fee" has the meaning ascribed to in Section
5.9.
"Associate" has the meaning established in the Canada
Business Corporations Act in effect on the date hereof.
"Auditors" means Ernst & Young Inc. or such other major
Canadian accountancy firm appointed by the Guarantor.
"Available Asset Value" means the book value of the assets
of the Consolidated Guarantor determined in accordance with GAAP
less the amount of all Indebtedness, other than Subordinated
Claims, secured by Liens against such assets.
"BA Equivalent Loan" means a loan or advance under this
Agreement which is denominated in Canadian Dollars and in respect
of which the Borrower is obligated to pay in accordance with
Section 5.4.
"BA Interest Date" means the last day of each BA Interest
Period.
"BA Interest Period" means, with respect to a BA Equivalent
Loan, the term of days as selected by the Borrower in accordance
with Section 4.3(b), commencing on the Drawdown Date or
Conversion Date, as applicable, of such BA Equivalent Loan and
expiring on a Business Day, which term shall not be less than 30
days or more than 180 days thereafter, in each case subject to
availability.
"BA Rate" means, in respect of any BA Equivalent Loan, the
annual rate of interest which is the rate determined as being the
rate of the Lender applicable to Canadian Dollar bankers'
acceptances for the applicable BA Interest Period.
"Banking Day" means a Business Day on which dealings in US
Dollar deposits by and between banks in the London interbank
market may be conducted.
"Borrower" means Burtek Systems Inc.
"Borrower's Account" means:
(1) for all payments in Canadian Dollars, the
following account maintained by the Borrower
with the Lender at the Branch of Account to
which payments and transfers are to be
effected:
First Chicago NBD Bank, Canada, transit #0012-270,
account #100431-001,
or such other account as the Borrower and the Lender
may agree in writing, and
(2) for all payments in US Dollars, the following
account maintained by the Borrower with the
Lender at the Branch of Account to which
payments and transfers are to be effected:
First Chicago NBD Bank, Canada, transit #0012-270,
account #100431-010,
or such other account as the Borrower and Lender may
agree in writing.
"Borrowings" means an extension of credit hereunder by the
Lender to the Borrower by way of advances of Loans and Letters of
Credit Advances.
"Branch of Account" means, with respect to the Lender, its
branch at BCE Place, 000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxx, X0X 0X0 or such other branch in Canada as the Lender and
Borrower may agree in writing.
"Burtek" means Burtek Systems Inc.
"Business Day" means a day on which the Lender is open for
money market dealings in Xxxxxxx, Xxxxxxx, but excludes Saturday,
Sunday and any other day which is a statutory holiday in Toronto,
Ontario and with respect to a Libor Loan, such a day is a
Business Day only if it is also a Banking Day.
"Canadian Dollars" and the symbols "CAD" and "$" each means
lawful money of Canada.
"Capitalized Lease" of a Person means any lease of Property
by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which
would be shown as a liability on a balance sheet of such Person
prepared in accordance with GAAP.
"Closing Date" means March 2, 1998 or such other date as the
Borrower and the Lender may agree.
"Commercial Letter of Credit" means a commercial letter of
credit issued by the Lender to a beneficiary at the request of
and for the account of the Borrower.
"Commitment" means:
(a) until and including February 28, 1998, the sum of
CAD16,335,610; and
(b) after February 28, 1998, the sum of CAD13,835,310,
or the Equivalent Amount in US Dollars, to the extent not
cancelled, reduced or terminated hereunder.
"Compliance Certificate" means a compliance certificate
signed by the Chief Financial Officer or Treasurer of the
Consolidated Guarantor, substantially in the form attached to the
U.S. Loan Agreement showing the calculations necessary to
determine compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status thereof.
"Consolidated Guarantor" means the Guarantor as consolidated
with the Borrower in accordance with applicable GAAP.
"Contaminant" means any pollutants, hazardous materials or
contaminants, dangerous, toxic or hazardous substances, waste of
any description whatsoever except non-hazardous waste of the kind
generated by the Borrower in the normal course of its operations,
including any of the foregoing as defined in any Environmental
Law.
"Conversion Date" means the date of which the Lender has
been notified by the Borrower at the Branch of Account as being
the date on which the Borrower has elected to convert a Borrowing
or a portion of a Borrowing pursuant to Section 4.7.
"Credit Facilities" means collectively, the Revolving Credit
Facility and Term Credit Facility and individually, either one of
them.
"Default" means an event, circumstance or omission which
constitutes an Event of Default or which, with the giving of
notice or lapse of time, or both, would constitute an Event of
Default.
"Documents" means this Agreement and all certificates and
other documents delivered or to be delivered to the Lender
pursuant hereto or thereto and, when used in relation to any
Person, the term "Documents" shall mean and refer to those
Documents executed and delivered by such Person.
"Drawdown Date" means a Business Day on which a Borrowing is
to be made by way of Loan.
"Environmental Activity" means any activity, event or
circumstance in respect of a Contaminant, including, without
limitation, its storage, use, holding, collection, purchase,
accumulation, assessment, generation, manufacture, construction,
processing, treatment, stabilization, disposition, handling or
transportation or its Release into the natural environment
including movement through or in the air, soil, subsoil, surface
water or groundwater.
"Environmental Laws" means any and all federal, provincial,
municipal and local statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, grants, licences,
agreements or other governmental restrictions of Canada, its
provinces, and of all applicable municipalities thereof relating
to the environment, health and safety, health protection or any
Environmental Activity.
"Equivalent Amount" of one currency means, on any date, the
amount of a second currency into which the first currency may be
converted at the spot rate at which the Lender would, on such
date at or about 12:00 noon (Toronto time), be prepared to sell
the same amount of such second currency in Toronto, and if such
date is not a Business Day, on the immediately preceding Business
Day, or at such other rate as may have been agreed by the
Borrower and the Lender.
"Event of Default" means any of the events or circumstances
specified in Section 9.1;
"Facility Fee" has the meaning ascribed to it in Section
5.11.
"Facility Termination Date" means March 1, 2001 or any
earlier date on which the Commitment is reduced to zero or
otherwise terminated pursuant to the terms hereof.
"Financial Assistance" by any Person means:
(a) any loan, guarantee, sale with recourse, endorsement
(other than for collection or deposit in the ordinary
course of business) or other obligation (contingent or
other) to pay, purchase, repurchase or otherwise
acquire or become liable upon or in respect of any
Indebtedness of another; and
(b) without limiting the generality of the foregoing, any
obligation (contingent or other) to make a payment on
behalf of another for goods, property of services
regardless of the non-delivery or nonfurnishing
thereof, or to make an investment in another, or to
maintain the capital, working capital, solvency or
general financial condition of another (other than for
the purchase of Marketable Securities), or to indemnify
another Person against and hold such Person harmless
from damage, loss or liability, all under circumstances
intended to enable another to incur or pay any
Indebtedness or to comply with agreement relating
thereto or otherwise to assure or protect creditors
against less in respect of Indebtedness.
The amount of any Financial Assistance shall be the amount
of all Indebtedness of the obligor to which the Financial
Assistance relates, unless the Financial Assistance is
limited to a determinable amount in which case the amount of
such Financial Assistance shall be deemed to be such
determinable amount.
"Fiscal Year" means the fiscal year of the Borrower which
currently runs from June 1 to May 31.
"GAAP" means generally accepted accounting principles in
effect from time to time in Canada applicable to the relevant
Person, applied in a consistent manner from period to period.
"Government Approvals" means, with respect to any Person,
all material licences, permits, consents, authorizations and
approvals from any and all Governmental Authorities required for
the conduct of that Person's business as presently conducted.
"Governmental Authority" means the government of any nation,
state, province, municipality or other political subdivision
thereof, and any entity exercising executive, legislative,
regulatory or administrative functions, and any corporation or
other entity owned or controlled in any manner by any of the
foregoing.
"Guarantor" means Xxxxxxxxxx Electronics, Ltd.
"Indebtedness" of a Person means:
(a) any obligation, contingent and other, which should be
classified upon such Person's balance sheet as a
liability in accordance with GAAP,
(b) any obligation secured by any Lien existing on property
owned or acquired by such Person subject to such Lien
whether or not the obligation secured thereby shall
have been assumed,
(c) any debt or liability of such Person representing the
deferred acquisition cost of property or assets created
or arising under any conditional sale agreement or
other title retention agreement even though the rights
and remedies of the seller under such agreement in the
event of default are limited to repossession or sale of
property or assets covered thereby,
(d) any liabilities under indemnities given in respect of
any bankers' acceptance, letter of credit or letter of
guarantee, and
(e) any Financial Assistance by such Person,
and, for greater certainty, does not include equity.
"Interest Determination Date" means: (i) with respect to a
BA Equivalent Loan, the date which is 2 Banking Days prior to the
first day of the BA Interest Period applicable to such BA
Equivalent Loan, (ii) with respect to a Libor Loan, the date
which is 2 Banking Days prior to the first day of the Libor
Interest Period applicable to such Libor Loan.
"Interest Expense" means, for any period of calculation, all
interest expense on Indebtedness calculated for such period for
the Consolidated Guarantor on a consolidated basis in accordance
with GAAP.
"Interest Payment Date" means the last Business Day of each
month.
"Letter of Credit" means a Commercial Letter of Credit and a
Standby Letter of Credit.
"Letter of Credit Advances" means a Borrowing by way of the
issuance of a Letter of Credit pursuant to this Agreement.
"Letters of Credit Agreement" means the agreement entered
into between the Borrower and the Lender whereby the Lender
agrees to issue Letters of Credit upon the application of the
Borrower, including any recitals and schedules to such agreement,
as amended, supplemented or restated from time to time.
"Level I Status" exists at any date if the Senior Funded
Debt to Cash Flow Ratio is greater than or equal to 2.01:1.00.
"Level II Status" exists at any date if the Senior Funded
Debt to Cash Flow Ratio is greater than or equal to 1.51:1.0 but
less than 2.01:1.00.
"Level III Status" exists at any date if the Senior Funded
Debt to Cash Flow Ratio is greater than or equal to 1.00:1.00 but
less than 1.51:1.00.
"Level IV Status" exists at any date if none of Level I
Status, Level II Status or Level III Status exists at such date.
"Libor" means with respect to each Libor Loan the annual
rate of interest for a period approximately equal to the Libor
Interest Period applicable to such Libor Loan displayed on page
3750 of the Telerate service as at approximately 11:00 a.m.
(London time) on the Interest Determination Date; provided,
however, if such rate does not appear on the Telerate screen page
as contemplated, the Libor shall be such other rate or rates as
the parties may agree.
"Libor Interest Date" means the last day of each Libor
Interest Period.
"Libor Interest Period" means, with respect to a Libor Loan,
the initial period (subject to availability) of approximately one
month (or longer whole multiples of 30, 60, 90 or 180 days as
agreed from time to time) commencing with the date on which a
Libor Loan is made and thereafter each successive period of 30
days (or longer whole multiples of 30, 60, 90 or 180 days as
agreed from time to time) commencing on the last day of the
immediately prior Libor Interest Period.
"Libor Loan" means a loan or advance under this Agreement
which is denominated in US Dollars and in respect of which the
Borrower is obliged to pay interest in accordance with Section
5.6.
"Lien" means any mortgage, charge, lien, hypothec, trust,
encumbrance, charge, pledge, assignment, security interest,
financing statement, title retention, or any other security
arrangement of whatsoever nature or kind.
"Loan" means a Prime Loan, US Prime Rate Loan, BA Equivalent
Loan or Libor Loan.
"Material Adverse Effect" means, when used with reference to
any event or circumstance and any Person, an event or
circumstance which has or may have a material adverse effect on
(1) the business, operations, property or financial or other
condition of that Person, (2) the ability of that Person to
perform and discharge its obligations under this Agreement or any
of the other Documents, or (3) the Lender's ability to enforce
its rights under this Agreement or any of the other Documents.
"Net Income" shall mean, for any period, the net income (or
loss), after provision for taxes, of the Consolidated Guarantor
on a consolidated basis for such period taken as a single
accounting period but excluding any unrealized losses and gains
for such period resulting from xxxx-to-market Rate Hedging
Agreements.
"Notice of Borrowing" has the meaning ascribed to it in
Section 4.1.
"Outstanding Borrowings" means, at any time, the aggregate
of all accrued interest and unpaid fees payable hereunder which
at such time are due and payable, the principal amount of all
Loans and the aggregate amount payable by the Lender to the
holder of all outstanding Letters of Credit.
"Permitted Liens" means, with respect to the Borrower or any
of its subsidiaries, any:
(a) Liens in connection with workers compensation,
unemployment insurance or other social security
obligations in respect of obligations which are not yet
due or which are being contested in good faith;
(b) Liens now or hereafter made or incurred in the ordinary
course of business to secure the performance of bids,
tenders, contracts (other than for the borrowing of
money), leases, statutory obligations or surety and
performance bonds;
(c) mechanics', worker's, materialmen's or other like
Liens, arising in connection with construction or in
the ordinary course of business, in respect of
obligations which are not due or which are being
contested in good faith;
(d) Liens for Taxes not due or being contested in good
faith;
(e) Liens in respect of judgments or awards against the
Borrower with respect to which the Borrower at the time
shall in good faith be processing an appeal or
proceedings for review and with respect to which the
Borrower shall have secured a stay of execution pending
such appeal or review;
(f) Liens now or hereafter created or assumed by the
Borrower on existing assets as permitted or not
prohibited under existing agreements with lenders or,
in connection with the acquisition or construction
subsequent to the date hereof of property, whether real
or personal (other than current assets), purchase money
pledges of or purchase money mortgages or Liens or
security interests created upon such acquired property
to the extent it secures Indebtedness in an amount up
to 100% of the lesser of the cost and fair market value
of the property; and extensions, renewals or
replacements thereof upon such property if the amount
of Indebtedness secured thereby is not increased;
(g) minor imperfections of title and encumbrances, if any
which are not substantial in amount, and do not
materially detract from the value of the properties
subject thereto or materially impair the Borrower's
ability to carry on its business;
(h) licences or leases of patents, trademarks or trade
names made in the ordinary course of business; and
(i) other existing and future Liens incidental to the
conduct of its business or the ownership of its
property and assets.
"Person" means any individual, partnership, limited
partnership, limited liability company, joint venture, syndicate,
sole proprietorship, company or corporation with or without share
capital, unincorporated association, trust, trustee, executor,
administrator or other legal personal representative, regulatory
body or agency, government or governmental agency, authority or
entity however designated or constituted.
"Prime Loan" means a loan or advance made under this
Agreement which is denominated in Canadian Dollars and in respect
of which the Borrower is obliged to pay interest in accordance
with Section 5.1.
"Prime Rate" means the annual rate of interest in effect
from time to time equal to the greater of (i) the annual rate of
interest publicly announced from time to time by the Lender as
being its reference rate then in effect for determining interest
rates on Canadian Dollar denominated commercial loans made by the
Lender in Canada; and (ii) the BA Rate plus 1.00%. Any change in
the Prime Rate shall be effective on the date such change becomes
effective generally.
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person,
or other assets owned, leased or operated by such Person.
"Rate Hedging Agreement" means an agreement, device or
arrangement providing for payments which are related to
fluctuations of interest rates, exchange rates or forward rates,
including, but not limited to, dollar-denominated or cross-currency
interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts
and warrants.
"Release" means, with respect to any Contaminant, the method
by which such Contaminant comes to be in the environment at large and includes,
without limitation, discharging, spraying, injection,
abandonment, depositing, spilling, leaking, seeping, pouring,
emission, emptying, throwing, dumping, placing and exhausting,
and when used as a noun has a similar meaning.
"Revolving Commitment" means,
(a) until and including February 28, 1998, the sum of
CAD13,400,000; and
(b) after February 28, 1998, the sum of CAD10,900,000
or the Equivalent Amount in US Dollars, to the extent not
cancelled, reduced or terminated hereunder.
"Revolving Credit Facility" means the revolving credit
facility referred in Section 3.1.
"Revolving Credit Facility Maturity Date" means (i) March 1,
2001 or (ii) such other date as may be agreed upon between the
Borrower and the Lender from time to time.
"Senior Funded Debt" means the sum of all Indebtedness of
the Consolidated Guarantor that is (i) not Subordinated Debt and
(ii) interest bearing, including, but not limited to, Capitalized
Lease Obligations and the Outstanding Borrowings hereunder.
"Senior Funded Debt to Cash Flow Ratio" means, as at any
date of determination thereof, the ratio of (i) Senior Funded
Debt to (ii) Total Cash Flow, in each case calculated as at such
date of determination for the Consolidated Guarantor, and in each
case calculated for the period of four consecutive fiscal
quarters ending on or most recently ended prior to such date of
determination.
"Standby Letter of Credit" means a standby letter of credit
issued by the Lender to a beneficiary at the request of and for
the account of the Borrower.
"Status" means, at any date of determination, whichever of
Level I Status, Level II Status, Level III Status or Level IV
Status exists at such time.
"Subordinated Claims" means, at any time and from time to
time, all claims of any Person in respect of Indebtedness owing
by the Borrower which rank subordinate to the claims of the
Lender in respect of the Outstanding Borrowings and other
Indebtedness of the Borrower to the Lender hereunder.
"Subordinated Debt" means any unsecured Indebtedness of the
Consolidated Guarantor (a) no part of the principal of which is
required to be paid (whether by way of mandatory sinking fund,
mandatory redemption, mandatory prepayment or otherwise) prior to
the Revolving Credit Facility Maturity Date or Term Credit
Facility Maturity Date and the payment of the principal of and
interest on which and other obligations of the Consolidated
Guarantor in respect thereof are subordinated to the prior
payment in full of principal and interest on all other
obligations and liabilities of the Consolidated Guarantor to the
Lender hereunder on terms and conditions first approved in
writing by the Lender and (b) otherwise containing terms,
covenants and conditions satisfactory in form and substance to
the Lender, as evidenced by their prior written approval thereof.
"Subsidiary" means a subsidiary of the Borrower as defined
in the Canada Business Corporations Act.
"Tax" includes all present and future taxes, levies,
imposts, stamp taxes, duties, charges to tax, fees, deductions,
withholdings and any restrictions or conditions resulting in a
charge to tax and all penalty, interest and other payments on or
in respect thereof.
"Term Commitment" means CAD2,935,310.36 to the extent not
cancelled, reduced or terminated hereunder.
"Term Credit Facility" means the non-revolving term credit
facility referred in Section 3.2.
"Term Credit Facility Maturity Date" means (i) July 31,
2001, or (ii) such other date as may be agreed upon between the
Borrower and the Lender from time to time.
"Total Cash Flow" means, as at any date of determination
thereof, the sum of Net Income, Interest Expense, taxes,
depreciation and amortization in each case calculated as at such
date of determination for the Consolidated Guarantor. Neither
cash nor non-cash charges reflecting extraordinary terms, unusual
items, or one time charges will be added back for the purpose of
Total Cash Flow calculation.
"Unmatured Default" means an event which but for the lapse
of time or the giving of notice, or both, would constitute a
Default.
"US Dollars" and the symbol "USD" each means the lawful
money of the United States of America.
"U.S. Guaranty" means that certain Guaranty dated as of
March 1, 1998, executed by the Guarantor in favour of the Lender
with respect to the indebtedness and liability of the Borrower to
the Lender, as the same may be amended or modified and in effect
from time to time.
"U.S. Loan Agreement" means that certain Loan Agreement made
as of March 1, 1998, between Xxxxxxxxxx Electronics, Ltd.,
various lending institutions, and American National Bank and
Trust Company of Chicago, as agent, as it may be amended or
modified and in effect from time to time.
"U.S. Loan Documents" has the meaning attributed to the term
"Loan Documents" in the U.S. Loan Agreement.
"US Prime Rate" means, with respect to a US Prime Rate Loan,
the annual rate of interest in effect from time to time equal to
the annual rate of interest publicly announced from time to time
by the Lender as being its reference rate then in effect for
determining rates on US Dollar denominated commercial loans made
by the Lender in Canada. Any change in the US Prime Rate shall
be effective on the date such change becomes effective generally.
"US Prime Rate Loan" means a loan or advance made under this
Agreement which is denominated in US Dollars and in respect of
which the Borrower is obliged to pay interest in accordance with
Section 5.2.
"Written" or "in writing" includes printing, typewriting, or
any electronic means of communication capable of being legibly
reproduced at the point of reception.
1.2 Headings and Table of Contents. The insertion of headings
and the provision of a table of contents are for convenience of
reference only and shall not affect the construction or
interpretation of this Agreement.
1.3 References. Unless otherwise specified, all references to
Sections and Schedules are to Sections of, and Schedules to this
Agreement. The words "hereto", "herein", "hereof", "hereunder"
and similar expressions refer to this Agreement and not to any
particular Section or other provision of this Agreement.
1.4 Number and Gender. Unless otherwise specified, words
importing the singular include the plural and vice versa and
words importing gender include all genders.
1.5 Time of Day. Unless otherwise specified, any reference to a
time of day means local time in Toronto, Ontario.
1.6 Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the
Province of Ontario and of Canada applicable therein.
1.7 Entire Agreement. This Agreement, including all Schedules
and all documents contemplated hereby, constitutes the entire
agreement among the parties with respect to the subject matter
and supersedes all prior negotiations, undertakings,
representations and understandings including, without limitation,
the letter agreement dated November 28, 1996 (the "Proposal
Letter") between the Guarantor and the Lender and correspondence
between the parties dated prior to the date hereof.
1.8 Conflict. If there is a conflict or inconsistency between
the provisions of this Agreement and any other document
including, without limitation, the Documents and the agreements
and correspondence between the Lender and the Borrower referred
to in Section 1.7, the provisions of this Agreement shall
prevail.
1.9 Severability. Any provision of this Agreement which is
illegal, invalid or unenforceable in any jurisdiction shall not
affect the legality, validity or enforceability of the remaining
provisions and any such illegality, invalidity or
unenforceability in any jurisdiction shall not affect the
legality, validity or enforceability of such provision in any
other jurisdiction.
1.10 Currency. Unless otherwise specified, all amounts are
stated in Canadian Dollars.
1.11 Time. Time shall be of the essence in all provisions of
this Agreement.
1.12 GAAP. Unless otherwise provided, all accounting terms used
in this Agreement shall be interpreted and all financial
information prepared in accordance with GAAP, consistently
applied.
1.13 Schedules. The following Schedules are attached to and form
part of this Agreement:
Schedule 2.1(i) - Litigation
Schedule 4.1 - Notice of Borrowing
Schedule 4.3 (b) - Notice of Rollover of BA Equivalent Loan
Schedule 4.3(c) - Notice of Rollover of Libor Loan
Schedule 4.6 - Notice of Conversion
Schedule 7.1(i)2 - Form of Promissory Notes
Schedule 7.1(i)4 - Form of Guaranty
Schedule 7.1(i)6 - Opinion of legal counsel to the Borrower
Schedule 8.1(d) - Particulars of environmental inquiries
SECTION 2 - REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties. The Borrower, represents
and warrants to the Lender, all of which shall survive the
execution and delivery of this Agreement, as follows:
(a) Existence, Power and Conduct of Business. The Borrower is a
corporation duly organized and validly existing under the laws of
Canada, being its jurisdiction of incorporation, except as
disclosed in writing to the Lender, is up to date in all material
filings required under Applicable Laws of relevance to this
transaction and the business conducted by it and the properties
and assets owned or leased by it, has the requisite power and
authority to own and lease its properties and assets and to
conduct its businesses in which it is presently engaged and
except in jurisdictions where failure to register does not
materially affect it or its business or except as disclosed in
writing to the Lender, is duly qualified to conduct its
businesses in all jurisdictions where the nature of its assets or
its businesses makes such qualification necessary.
(b) Power and Authority. The execution, delivery and
performance by the Borrower of this Agreement and all other
Documents are within its powers, have been duly authorized by all
necessary corporate action and do not conflict with, result in a
breach or violation of, or constitute a material default under,
its constating documents, any unanimous shareholders agreement,
any Applicable Law or any agreement or other document to which it
is a party or by which it is bound and do not result in the
creation of any Lien upon any of its assets.
(c) Execution and Delivery and Binding Effect. Each of this
Agreement and all other Documents has been duly executed and
delivered by the Borrower and constitutes a legal, valid and
binding obligation of the Borrower, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting
creditors' rights generally, the fact that specific performance
and injunctive relief may be given at the discretion of the
courts, and the equitable or statutory powers of the courts to
stay proceedings before them and to stay the execution of
judgments.
(d) No Approvals Required. No further registration, order,
permit, filing, consent, licence, decree or approval of, from or
with any Governmental Authority is necessary or advisable in
order to ensure the legality, validity, binding effect and
enforceability of this Agreement or any other Document as against
the Borrower.
(e) Financial Statements. Its most recent annual and quarterly
financial statements, copies of which have been furnished to the
Lender, have been prepared in accordance with GAAP, present
fairly its financial position and the results of its operations
as at the date of such financial statements.
(f) Title to Assets and Liens. Except as disclosed in writing
and consented to by the Lender, it has good and marketable title
to all of its assets and properties free and clear of any Liens
other than Permitted Liens.
(g) No Default. There exists to its knowledge no Event of
Default which has not been waived and no Default of which the
Lender has not previously been notified in writing.
(h) Compliance. The Borrower is in material compliance with its
constating documents, its franchises and licences, and all
Applicable Laws including, without limitation, health, safety and
employment standards and labour codes and, to the best knowledge
of the Borrower, with Environmental Laws of all applicable
Governmental Authorities.
(i) Litigation. Except as set out in Schedule 2.1(i), to
Borrower's knowledge, no material litigation (including, without
limitation, derivative actions), arbitration proceedings,
governmental proceedings or investigations or regulatory
proceedings are pending or threatened against the Borrower
(except as previously disclosed by notice to the Lender), which,
if adversely determined, would have a Material Adverse Effect
upon the Borrower, nor does the Borrower know of any basis for
any of the foregoing. In addition, there are no inquiries,
formal or informal, which might give rise to such actions,
proceedings or investigations.
(j) Full Disclosure. Neither the financial statements referred
to in Section 2.1(e) nor any other statement furnished by the
Borrower or on its behalf to the Lender in connection with the
negotiation of this Agreement contain any untrue statement of a
material fact, or omit a material fact necessary to make such
statements not misleading, and all such statements, taken as a
whole, together with this Agreement, do not contain any untrue
statement of a material fact or omit a material fact necessary to
make such statements not misleading. All expressions of
expectation, intention, belief and opinion were honestly made by
the Borrower on reasonable grounds after due and careful inquiry
by it and any other Person who furnished such material. There is
no fact within the knowledge of the Borrower which has not been
disclosed to the Lender in writing which has or which the
Borrower could reasonably expect to have a Material Adverse
Effect.
(k) Tax Returns. The Borrower has filed or caused to be filed
all tax returns which, to its knowledge are required to have been
filed, and has paid all Taxes shown to be due and payable on such
returns or on any assessments made against it and all other
Taxes, fees or other charges imposed on it by any Governmental
Authority, other than those the amount or validity of which is
currently being contested in good faith by appropriate
proceedings and with respect to which reserves have been provided
in its books. No Liens for Taxes have been filed and, to its
knowledge, no claims are being asserted with respect to any such
Taxes, fees or other charges.
(l) Material Change. Save as disclosed in writing and consented
to by the Lender, there has been no material adverse change in
the financial condition of the Borrower or any material
litigation since the date of the most recent audited or unaudited
financial statements (as the case may be) of the Borrower
delivered under this Agreement.
(m) Liabilities. As of the date of the most recent financial
statements delivered to the Lender under this Agreement, the
Borrower has no debts, liabilities or obligations to any Person,
whether direct or indirect, absolute or contingent, matured or
not, or other obligations for the payment of money which,
according to GAAP, are material and which are not disclosed
(1) in its most recent financial statements delivered to the
Lender under this Agreement and the notes to those financial
statements or (2) in writing to the Lender.
(n) Security Service International SSI Inc. The Borrower has
not assumed any liabilities of Security Service International SSI
Inc. or of Security Service International SSI Group Inc. and all
assets of Security Service International SSI Inc. and Security
Service International SSI Group Inc. have been assumed by the
Borrower free and clear of any Liens. The Borrower has acquired
such assets of Security Service International SSI Inc. and
Security Service International SSI Group Inc. in accordance with
the provisions of the order dated August 21, 1997 of Xx. Xxxxxxx
Xxxxxxxx X. Xxxxxxxxx of the Superior Court of the District of
Montreal sitting in bankruptcy matters providing for the sale of
such assets to the Borrower.
2.2 Deemed Repetition. The representations and warranties made
in Section 2.1 shall continue in effect until payment and
performance of all debts, liabilities and obligations referred to
in this Agreement and any Document and shall be deemed to be
repeated on each Drawdown Date, Acceptance Date and Conversion
Date as if made on each such date, in each case subject to minor
changes which, individually or in the aggregate, do not have a
material effect.
SECTION 3 - CREDIT FACILITIES
3.1 Revolving Credit Facility.
(a) Establishment. Subject to this Agreement, the Lender hereby
confirms its establishment in favour of the Borrower of a
revolving credit facility in the principal amount of the
Revolving Commitment (the "Revolving Credit Facility") available
to the Borrower by way of advances of Loans and Letter of Credit
Advances (up to an aggregate amount not to exceed a sub-limit of
CAD1,000,000). The parties acknowledge that, as of the date
hereof, the Borrower is indebted to the Lender under the
Revolving Commitment in the amount of CAD10,890,000.
(b) Revolving Nature of Revolving Credit Facility. Subject to
this Agreement, the Borrower may, from time to time, increase or
reduce the amount of its Borrowings under the Revolving Credit
Facility by borrowing, repaying and reborrowing Prime Loans, US
Prime Rate Loans, BA Equivalent Loans and Libor Loans and by the
issuance of Letters of Credit.
(c) Repayment. All Outstanding Borrowings under the Revolving
Credit Facility shall be repayable by the Borrower upon the
earliest of (i) Revolving Credit Facility Maturity Date (ii)
demand at any time by the Lender following the occurrence of an
Event of Default, and (iii) in the event that the Guarantor
arranges financing with another lender to repay the Borrower's
indebtedness under the Revolving Credit Facility.
(d) Purpose. The proceeds of Borrowings under the Revolving
Credit Facility shall be used to (i) refinance the indebtedness
of the Borrower, for the Borrower's general corporate purposes
and the financing of its day to day working capital requirements,
whether directly or indirectly through its subsidiary and (ii) to
acquire certain assets of the security equipment distribution
business operated by Security Service International SSI Inc. and
Security Service International SSI Group Inc.
3.2 Term Credit Facility.
(a) Establishment. Subject to this Agreement, the Lender hereby
confirms its establishment in favour of the Borrower of a term
non-revolving credit facility in the principal amount of the Term
Commitment (the "Term Credit Facility") available to the Borrower
by way of two advances of a Loan. The parties agree that, as of
the date hereof, the Lender has already made the two advances
under the Term Commitment in the aggregate amount of
CAD3,650,000, and no further advances will be made.
(b) Repayment. All Outstanding Borrowings under the Term Credit
Facility shall be repayable by the Borrower upon the earlier of
(i) the Term Credit Facility Maturity Date; (ii) demand at any
time by the Lender following the occurrence of an Event of
Default; provided that prior to any such demand, the Borrower
shall repay the Outstanding Borrowings under the Term Credit
Facility in 48 equal monthly payments of CAD71,592.92 each on
account of principal commencing August 31, 1997 with the balance
due or accruing on the Term Credit Facility Maturity Date; and
(iii) in the event the Guarantor refinances the Borrower's
indebtedness under the Term Credit Facility.
(c) Purpose. The proceeds of Borrowings under the Term Credit
Facility have been used to finance the acquisition of certain
assets of the security equipment distribution business operated
by Security Service International SSI Inc. and Security Service
International SSI Group Inc.
SECTION 4 - PROVISIONS APPLICABLE TO BORROWINGS
4.1 Notice of Borrowing.
Subject to the terms and conditions hereof, the Borrower may
borrow by way of Loans and Letters of Credit Advances upon giving
to the Lender at the Branch of Account:
(1) in the case of Prime Loans and US Prime Rate Loans,
irrevocable telephone notice by 5:00 p.m. two Business
Day prior to the Drawdown Date, and
(2) in the case of BA Equivalent Loans, Libor Loans and
Letters of Credit Advances, irrevocable telephone
notice by 5:00 p.m. three Business Days prior to the
Drawdown Date,
in each case followed by written confirmation on the same day
substantially in the form of Schedule 4.1 (a "Notice of
Borrowing").
4.2 Prime and US Prime Loans.
Amounts of Borrowing. Each Borrowing by way of a Prime Loan
or a US Prime Loan shall be in the minimum amount of CAD or
USD100,000 and thereafter in increments of CAD or USD10,000.
4.3 BA Equivalent Loans and Libor Loans.
(a) Amounts of Borrowing. Each Borrowing by way of a BA
Equivalent Loan shall be in the minimum amount of CAD1,000,000
and thereafter in increments of CAD100,000. Each Borrowing by
way of Libor Loan shall be in the minimum amount of USD1,000,000
and thereafter in increments of USD100,000.
(b) Rollover of BA Equivalent Loan. With respect to each
BA Equivalent Loan which is an outstanding Borrowing, at or
before 5:00 p.m. three Business Days before the applicable
Interest Determination Date, the Borrower shall notify the Lender
at the Branch of Account by irrevocable telephone notice followed
by written confirmation on the same day in form and substance
substantially as attached as Schedule 4.3(b) either of (1) the
next BA Interest Period which it has selected as applicable to
the BA Equivalent Loan, which new BA Interest Period shall
commence on and include the last day of the prior BA Interest
Period, or (2) the intention of the Borrower to repay or convert
such BA Equivalent Loan at the end of the relevant Libor Interest
Period. If the Borrower fails to select and to notify the Lender
at the Branch of Account of the BA Interest Period applicable to
the BA Equivalent Loan, or its intention to repay or convert the
Borrower shall be deemed to have converted the BA Equivalent Loan
into a Prime Rate Loan as of the last day of the applicable BA
Interest Period.
(c) Rollover of Libor Loans. With respect to each Libor
Loan which is an outstanding Borrowing, at or before 5:00 p.m.
three Business Days before the applicable Interest Determination
Date, the Borrower shall notify the Lender at the Branch of
Account by irrevocable telephone notice followed by written
confirmation on the same day in form and substance substantially
as attached as Schedule 4.3(c) either of (1) the next Libor
Interest Period which it has selected as applicable to the Libor
Loan, which new Libor Interest Period shall commence on and
include the last day of the prior Libor Interest Period, or (2)
the intention of the Borrower to repay or convert such Libor Loan
at the end of the relevant Libor Interest Period. If the
Borrower fails to select and to notify the Lender at the Branch
of Account of the Libor Interest Period applicable to the Libor
Loan, or its intention to repay or convert the Borrower shall be
deemed to have converted the Libor Loan into a US Prime Rate Loan
as of the last day of the applicable Libor Interest Period.
4.4 Substitute Basis of Borrowing. If at any time during the
term of this Agreement, the Lender determines in good faith
(which determination shall be final, conclusive and binding upon
the Borrower) that:
(a) adequate and fair means do not exist for ascertaining
the rate of interest on a Libor Loan,
(b) Libor does not accurately reflect the effective cost to
the Lender of making, funding or maintaining a Libor Loan and the
costs to the Lender are increased or the income receivable by the
Lender is reduced in respect of a Libor Loan,
(c) the making or the continuance of a Libor Loan or a
portion of a Libor Loan by the Lender has become impracticable by
reason of circumstances which materially and adversely affect the
London interbank market, or
(d) deposits in US Dollars are not available to the Lender
in the London interbank market in sufficient amounts in the
ordinary course of business for the applicable Libor Interest
Period to make, fund or maintain a Libor Loan during such Libor
Interest Period,
then the Lender shall promptly notify the Borrower in writing of
such determination setting forth the basis of such determination
and each outstanding Libor Loan will automatically be converted
into a US Prime Rate Loan on the expiry of its then current Libor
Interest Period. The Lender will not be obligated to make any
further Libor Loans available pursuant to this Agreement, so long
as the circumstances referred to in this Section 4.4 continue.
4.5 Letters of Credit.
(a) Letter of Credit Period. Letters of Credit shall have
terms of not greater than 365 days and shall mature on a Business
Day but not to extend beyond the Facility Termination Date.
(b) Refusal to Issue. The Lender may refuse to issue
Letters of Credit on the Borrower's behalf at any time in the
Lender's sole discretion.
(c) Letter of Credit Agreement. Each Letter of Credit
shall be governed by the terms and conditions of the Letter of
Credit Agreement or other specific agreement relative to such
instruments between the Borrower and the Lender and each Letter
of Credit shall be governed by the terms and conditions of the
applicable Letter of Credit Agreement in the event of a conflict
with this agreement.
(d) Retirement of Letter of Credit. A Letter of Credit may
only be retired on its maturity date (i) unless and to the extent
it has been honoured or (ii) unless the written consent of the
beneficiary of such instrument has been obtained and the original
Letter of Credit has been returned to the Lender.
(e) Charging of Letter of Credit. Each drawing under a
Letter of Credit shall be charged to the Borrower's Account.
4.6 Conversion Option.
(a) Notice for and Conditions of Conversion. Subject to
this Agreement, the Borrower may, during the term of this
Agreement, effective on any Business Day, convert, in whole or in
part, Outstanding Borrowings into another basis of Borrowing
permitted under the Credit Facilities, upon giving to the Lender
at the Branch of Account prior irrevocable telephone notice at or
before 5:00 p.m. three Business Days in advance, followed by
written confirmation on the same day substantially in the form of
Schedule 4.6, provided that:
(i) no Default has occurred and is continuing,
(ii) each conversion to a Borrowing by way of a Prime
Loan or a US Prime Loan shall be for a minimum
aggregate amount of CAD or USD100,000,
(iii) each conversion to a Borrowing by way of
BA Equivalent Loan shall be for a minimum
aggregate amount of CAD1,000,000,
(iv) each conversion to a Borrowing by way of Libor
Loan shall be for a minimum aggregate amount of
USD1,000,000,
(v) a conversion to a Borrowing by way of Libor Loans
shall only be made to the extent that the
conditions outlined in Section 4.4 shall not exist
on the relevant Conversion Date,
(vi) each conversion of a Borrowing by way of a Libor
Loan may be converted to another basis of
Borrowing only on the last day of the relevant
Libor Interest Period and, provided that, if less
than all of such Libor Loan is converted, then
after such conversion not less than USD1,000,000
(or increments of USD100,000 in excess thereof)
shall remain as a Libor Loan, and
(vii) each conversion of a Borrowing by way of a
BA Equivalent may be converted to another
basis of Borrowings only on the last day
of the relevant BA Interest Period and
provided that, if less than all such BA
Equivalent Loan is converted, then after
such conversion not less than CAD1,000,000
(or increments of CAD100,000 in excess
thereof) shall remain as a BA Equivalent
Loan.
(b) Mandatory Conversion. If an Event of Default, or an
event or circumstance which with notice or lapse of time or both
would constitute an Event of Default, has occurred and is
continuing, the Borrower shall be required to convert (i) its
Borrowings by way of Libor Loans to Borrowings by way of US Prime
Rate Loans on the applicable Libor Interest Date, and (ii) its
Borrowings by way of BA Equivalent to Borrowings by way of Prime
Loans on the applicable BA Interest Date.
(c) Conversion Not Repayment. The conversion of any
Borrowing to another type of Borrowing in an equal amount, as
provided in this Section 4.6, shall not be deemed to constitute a
repayment of any Borrowing or a new advance of funds.
(d) Determination Final. With respect to all matters
referred to in this Section 4.6, the determination by the Lender
shall, prima facie, be final and binding on the Borrower.
4.7 Reliance on Oral Instructions. The Lender shall be entitled
to act upon the oral instructions of any Person who the Lender,
acting reasonably, believes has been identified by the Borrower
in written instructions to the Lender as someone authorized to
give oral instructions regarding the drawdown or issuance of
Borrowings, and the Lender 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
Lender or its employees. Any such oral instructions so given
shall be immediately confirmed in writing by the Borrower to the
Lender.
4.8 Evidence of Indebtedness. The Lender shall open and
maintain at the Branch of Account, accounts and records
evidencing the liability of the Borrower to the Lender with
respect to Borrowings and record therein by appropriate entries
all amounts of Indebtedness of the Borrower to the Lender arising
under or in connection with this Agreement and all payments on
account thereof. Such accounts and records will constitute,
prima facie, conclusive evidence of the Indebtedness of the
Borrower to the Lender from time to time, the date each Borrowing
was made and the amounts the Borrower has paid from time to time
on account of such Indebtedness.
SECTION 5 - INTEREST, FEES AND EXPENSES
5.1 Payment of Interest on Prime Loans.
Rate. The Borrower shall pay interest on Prime Loans in
Canadian Dollars at a rate per annum equal to the Prime Rate.
Each change in the fluctuating interest rate for a Prime Loan
will take place simultaneously with the corresponding change in
the Prime Rate.
Calculation. Interest on Prime Loans shall be payable
monthly in arrears on each Interest Payment Date for the period
up to but not including such Interest Payment Date and shall be
calculated on a daily basis on the principal amount of the Prime
Loans remaining unpaid from time to time and on the basis of the
actual number of days elapsed and a year of 365 days or 366 days,
as the case may be.
5.2 Payment of Interest on US Prime Rate Loans.
Rate. The Borrower shall pay interest on US Prime Rate
Loans in US Dollars at a rate per annum equal to the US Prime
Rate. Each change in the fluctuating interest rate for a US
Prime Rate Loan will take place simultaneously with the
corresponding change in the US Prime Rate.
Calculation. Interest on US Prime Rate Loans shall be
payable monthly in arrears on each Interest Payment Date for the
period up to but not including such Interest Payment Date and
shall be calculated on a daily basis on the principal amount of
the US Prime Rate Loans remaining unpaid from time to time and on
the basis of the actual number of days elapsed and a year of 365
days or 366 days, as the case may be.
5.3 Applicable Margin
Calculation. The Applicable Margin shall be subject to
adjustment (upwards or downwards, as appropriate) based on the
Status of the Consolidated Guarantor as at the end of each fiscal
quarter in accordance with the table set forth below. The Status
of the Consolidated Guarantor as at the last day of each fiscal
quarter shall be based on the Senior Funded Debt to Cash Flow
Ratio of the Consolidated Guarantor determined from the then most
recent annual or quarterly financial statements of the
Consolidated Guarantor delivered pursuant to Section 7.2(a) and
the Compliance Certificate delivered pursuant to Section
7.2(b)(ii). Any adjustment to the Applicable Margin shall be
effective commencing five (5) days after the delivery to the
Lender of such financial statements and Compliance Certificate.
In the event that the Consolidated Guarantor shall at any time
fail to furnish to the Lender such financial statements and
Compliance Certificate within the time limitations specified by
Section 7.2(b), then the maximum Applicable Margin shall apply
from the date of such failure until the fifteenth (15th) day
after such financial statements and Compliance Certificate are so
delivered. Notwithstanding anything to the contrary contained
herein, the Status of the Consolidated Guarantor from the date of
this Agreement to and including May 30, 1998, shall be deemed to
be Level II Status. Notwithstanding anything to the contrary
contained herein, the Status of the Consolidated Guarantor from
the date of this Agreement to and including the later of (i) May
30, 1998 and (ii) five (5) days after the delivery to the Lenders
of the May 31, 1998 annual financial statements of the
Consolidated Guarantor accompanied by a current Compliance
Certificate, shall be deemed to be Level II Status.
Applicable Margin Table
Status Applicable Margin
Level I 1.5%
Level II 1.25%
Level III 1.0%
Level IV 0.75%
Changes in Interest Rate, etc. Each Prime Loan or US
Prime Rate Loan shall bear interest on the outstanding principal
amount thereof, for each day from and including the date such
Prime Loan or US Prime Rate Loan is made or is converted from a
Libor Loan into a Prime Loan or US Prime Rate Loan pursuant to
Section 4.6 to but excluding the date it becomes due or is
converted into a Libor Loan pursuant to Section 4.6 at a rate per
annum equal to the Prime Rate or US Prime Rate for such day.
Changes in the rate of interest on that portion of any Borrowings
maintained as a Prime Loan or US Prime Rate Loan will take effect
simultaneously with each change in such applicable rate. Each
Libor Loan shall bear interest on the outstanding principal
amount thereof from and including the first day of the Libor
Interest Period applicable thereto to (but not including) the
last day of such Libor Interest Period at the interest rate
determined as applicable to such Libor Loan.
Rates Applicable After Default. During the continuance of
a Default or Unmatured Default the Lender may, at their option,
by notice to the Borrower, declare that no Borrowings may be made
as, converted into or continued as a Libor Loan, declare that (i)
each Libor Loan shall bear interest for the remainder of the
applicable Libor Interest Period at the rate otherwise applicable
to such Libor Interest Period plus, to the extent permitted by
law, 2% per annum and (ii) each Prime Loan or US Prime Rate Loan
shall bear interest at a rate per annum equal to the Prime Rate
or US Prime Rate otherwise applicable to the Prime Loan or US
Prime Loan plus, to the extent permitted by law, 2% per annum,
provided that, during the continuance of a Default under Section
9.1 the interest rates set forth in clauses (i) and (ii) above
shall be applicable to all Borrowings without any election or
action on the part of the Lender.
5.4 BA Equivalent Loans.
Rate. The Borrower shall pay interest on each BA Equivalent
Loan in Canadian Dollars for the period commencing on and
including the first day of the BA Interest Period applicable to
such BA Equivalent Loan up to but not including the BA Interest
Date, at the rate per annum determined by the Lender to be equal
to the sum of BA Rate plus the Applicable Margin. Each such
determination of the rate of interest applicable to a BA Interest
Period shall, prima facie, be final, and binding upon the
Borrower. Upon determination of the rate of interest applicable
to a BA Interest Period applicable to a BA Equivalent Loan, the
Lender shall promptly notify the Borrower of such rate.
Calculation. Interest on each BA Equivalent Loan shall be
payable on each BA Interest Date with respect to such BA
Equivalent Loan and shall be calculated on a daily basis and on
the basis of the actual number of days elapsed and a year of 365
days or 366 days, as the case may be; provided however, that in
the event that a relevant BA Interest Period is greater than 90
days, interest shall be due and payable not less frequently than
every 90 days.
5.5 Letters of Credit Fee.
Fees. The Borrower shall pay to the Lender, at the time the
Lender issues (or renews) a Commercial Letter of Credit, an
issuance fee at the Lender's standard rates calculated on the
maximum face amount of each such Commercial Letter of Credit.
The Borrower shall pay to the Lender, at the time the Lender
issues (or renews) a Standby Letter of Credit, an issuance fee
equal to the greater of (i) CAD$300 and (ii) the Applicable
Margin of the maximum face amount of such Standby Letter of
Credit. The calculation of the amount of such annual fees shall
be based on the term of such Letter of Credit (or the term of
such renewal) and shall be based on a 365 or 366 day year, as the
case may be.
5.6 Payment of Interest on Libor Loans.
Rate. The Borrower shall pay interest on each Libor Loan in
US Dollars for the period commencing on and including the first
day of the Libor Interest Period applicable to such Libor Loan up
to but not including the Libor Interest Date, at the rate per
annum determined by the Lender to be equal to the sum of Libor
plus the Applicable Margin. Each such determination of the rate
of interest applicable to a Libor Interest Period shall, prima
facie, be final, and binding upon the Borrower. Upon
determination of the rate of interest applicable to a Libor
Interest Period applicable to a Libor Loan, the Lender shall
promptly notify the Borrower of such rate.
Calculation. Interest on each Libor Loan shall be payable
on each Libor Interest Date with respect to such Libor Loan and
shall be calculated on a daily basis and on the basis of the
actual number of days elapsed and a year of 360 days; provided
however, that in the event that a relevant Libor Interest Period
is greater than 90 days, interest shall be due and payable not
less frequently than every 90 days.
5.7 Interest on Overdue Amounts. Upon a default in the payment
of principal, interest or other amounts due under this Agreement,
the Borrower shall pay interest on such overdue amount both
before and, where permitted by law, after judgment at a rate per
annum equal to the rate of interest as is applicable to the
relevant Borrowing prior to default (calculated on the same
basis) plus 2.0% for so long as such amount remains overdue.
Such interest shall be payable upon demand made by the Lender and
shall be compounded on each Interest Payment Date, BA Interest
Date or Libor Interest Date, as applicable.
5.8 Interest Act. For the purposes of the Interest Act
(Canada), where in this Agreement a rate of interest is to be
calculated on the basis of a year of 360 or 365 days, as
applicable (the "first rate"), the yearly rate of interest to
which the first rate is equivalent is the first rate multiplied
by the actual number of days in the year for which such
calculation is made and divided by 360 or 365 (as applicable).
5.9 Arrangement Fee. The Borrower has paid the Lender
arrangement fees of CAD18,750 and CAD22,500 (the "Arrangement
Fee"), the receipt of which are hereby acknowledged by the
Lender.
5.10 Administration Fee. The Borrower will pay the Lender an
administration fee of CAD1,000 (the "Administration Fee") payable
quarterly in arrears on the last Business Day of each February,
May, August and November, for the daily monitoring and
administration of operating draws and pay downs.
5.11 Facility Fee. The Guarantor will pay to the order of
American National Bank and Trust Company of Chicago as agent for
the Lender, an annual facility fee equal to the product of (a)
one-eighth of one percent (0.125%) and (b) the Commitment,
payable in quarterly installments on the last Business Day of
each February, May, August, and November. Such Facility Fee
shall in no circumstances be refundable to the Borrower or
Guarantor.
5.12 Limit on Rate of Interest.
(a) No Payment shall exceed Lawful Rate. Notwithstanding any
other term of this Agreement, the Borrower shall not be obliged
to pay any interest or other amounts under or in connection with
this Agreement in excess of the amount or rate permitted under or
consistent with Applicable Laws. In particular but without
limiting the generality of the foregoing, the Borrower shall not
be obliged to pay any interest or other amounts which would
result in the receipt by the Lender of interest on credit
advanced at a rate in excess of the rate permitted under the
Criminal Code (Canada). For purposes of this Section, "interest"
and "credit advanced" have the meanings ascribed in the Criminal
Code (Canada), and the "effective annual rate of interest" shall
be calculated in accordance with generally accepted actuarial
principles and practices.
(b) Payment at Highest Lawful Rate. If, as a result of Section
5.13(a), the Borrower is not obliged to make a payment which it
would otherwise be required to make, the Borrower shall make such
payment to the maximum extent permitted by or consistent with
Applicable Law.
5.13 Change in Circumstances.
(a) Reduction in Rate of Return. If at any time the Lender
determines, acting reasonably, that (1) any change in any
Applicable Law or any interpretation thereof after the date of
execution hereof, or (2) compliance by the Lender with any
direction, requirement or request from any regulatory authority
given after the date of execution hereof, whether or not having
the force of law provided that if not having the force of law,
the Lender's decision to comply therewith is reasonable, prudent
and in good faith, has or would have, as a consequence of the
Lender's obligation under this Agreement and taking into
consideration the Lender's policies with respect to capital
adequacy, the effect of reducing the rate of return on the
Lender's capital to a level below that which the Lender could
have achieved but for such change or compliance, then from time
to time, upon demand of the Lender, the Borrower shall pay to the
Lender such additional amounts as may be determined by the Lender
as will compensate the Lender for such reduction provided that
the Lender is similarly requiring payment of compensating amounts
from other Borrowers whose credit facilities with the Lender are
similarly effected.
(b) Taxes, Reserves, Capital Adequacy, etc. If, after the
date of execution hereof, any introduction of any Applicable Law
or any change or introduction of a change in any Applicable Law
(whether or not having the force of law) provided that if not
having the force of law, the Lender's decision to comply
therewith is reasonable, prudent and in good faith or in the
interpretation or application thereof by any court or by any
Governmental Authority, central bank or other authority or entity
charged with the administration thereof or any change in the
compliance of the Lender therewith now or hereafter:
(i) subjects the Lender to, or causes the withdrawal
or termination of a previously granted exemption
with respect to, any Tax or changes the basis of
taxation, or increases any existing Tax, on
payments of principal, interest, fees or other
amounts payable by the Borrower to the Lender
under this Agreement (except for taxes on the
overall net income of the Lender),
(ii) imposes, modifies or deems applicable any reserve,
special deposit, deposit insurance or similar
requirement against assets held by, or deposits in
or for the account of or loans by or any other
acquisition of funds by, an office of the Lender,
or
(iii) imposes on the Lender or expects there to
be maintained by the Lender any capital
adequacy or additional capital requirement
in respect of any Borrowing or any other
condition with respect to this Agreement,
and the result of any of the foregoing, in the sole determination
of the Lender acting reasonably, shall be to increase the cost
to, or reduce the amount received or receivable by, the Lender
hereunder or its effective rate of return hereunder in respect of
making, maintaining or funding a Borrowing hereunder, the Lender
shall, acting reasonably, determine that amount of money which
shall compensate the Lender for such increase in cost or
reduction in income. The Lender shall make reasonable efforts to
limit the incidence of any Additional Compensation, as defined
below.
(c) Payment of Additional Compensation. Upon the Lender
having determined that it is entitled to compensation in
accordance with the provisions of Sections 5.13(a) or 5.13(b)
(herein referred to as "Additional Compensation"), the Lender
shall promptly so notify the Borrower and shall provide to the
Borrower a photocopy of the relevant Applicable Law or direction,
requirement or request, as applicable, and a certificate of a
duly authorized officer of the Lender setting forth the
Additional Compensation and the basis of calculation thereof,
which shall be prima facie evidence of such Additional
Compensation. The Borrower shall pay to the Lender within 30
Business Days of the giving of such notice the Additional
Compensation calculated and accruing from the date of such
notification. The Lender shall be entitled to be paid such
Additional Compensation from time to time to the extent that the
provisions of this Section 5.13 are then applicable
notwithstanding that Lender has previously been paid any
Additional Compensation.
(d) International Settlements Capital Rules. For greater
certainty, the term "Applicable Law" for the purposes of this
Section 5.13 includes any law relating in any way to
international convergence of capital measurement and capital
standards developed by the Bank for International Settlements.
5.14 Payment of Portion. Notwithstanding any other term or
condition of this Agreement, if the Lender gives the notice
provided for in Section 5.13 with respect to any Borrowing (an
"Affected Borrowing"), the Borrower may at its option, upon 10
Business Days notice to that effect given to the Lender (which
notice shall be irrevocable) unless such prepayment causes an
Event of Default hereunder, prepay in full without penalty such
Affected Borrowing outstanding together with accrued and unpaid
interest on the principal amount so prepaid up to the date of
such prepayment and pay such Additional Compensation as may be
applicable to the date of such payment and all costs, losses and
expenses incurred by the Lender by reason of the liquidation or
re-employment of deposits or other funds or for any other reason
whatsoever resulting from the repayment of such Affected
Borrowing or any part thereof. Upon its receipt of such
prepayment, the Lender shall refund a proportionate share of the
Arrangement Fee.
5.15 Illegality. If any Applicable Law, or any change therein or
in the interpretation or application thereof by any court or by
any Governmental Authority or central bank or comparable agency
or any other entity charged with the interpretation or
administration thereof or compliance by the Lender with any
request or direction (whether or not having the force of law
provided that if not having the force of law, the Lender's
decision to comply therewith is reasonable, prudent and in good
faith) of any such Governmental Authority, central bank or
comparable agency or entity, now or hereafter makes it unlawful
or impossible for the Lender to make, fund or maintain a
Borrowing or to perform its obligations under this Agreement, the
Lender may, by written notice thereof to the Borrower terminate
its obligations to make further advances under this Agreement,
and the Borrower, if required by the Lender, shall repay
forthwith (or at the end of such longer period as the Lender at
its discretion has agreed) the principal amount of such Borrowing
together with accrued interest (without penalty or bonus), along
with such Additional Compensation as may be applicable to the
date of such payment and all costs, losses and expenses incurred
by the Lender by reason of the liquidation or re-deployment of
deposits or other funds or for any other reason whatsoever
resulting from the repayment of such Borrowing or any part
thereof. If any such change shall only affect a portion of the
Lender's obligations under this Agreement which is, in the
opinion of the Lender acting reasonably, severable from the
remainder of this Agreement so that the remainder of this
Agreement may be continued in full force and effect without
otherwise affecting any of the obligations of the Lender or the
Borrower hereunder, the Lender shall, after allowing the Borrower
the option to convert its Loan, only declare its obligations
under that portion so terminated.
5.16 Indemnity.
(a) General. The Borrower shall indemnify the Lender
against all losses, reasonable expenses and liabilities which the
Lender may sustain or incur as a consequence of (1) any Default
by the Borrower under this Agreement, (2) any material
misrepresentation by the Borrower contained in any writing
delivered to the Lender in connection with this Agreement, or (3)
any material failure by the Borrower to comply with any
Applicable Law.
(b) Libor Loans. For greater certainty, but without
limitation, if the Borrower repays, prepays or cancels a Libor
Loan on a day other than a Libor Interest Date falling on the
last day of a Libor Interest Period, the Borrower shall indemnify
the Lender for any loss or expense suffered or incurred by the
Lender including, without limitation, any loss or expenses which
the Lender incurs by reason of the liquidation or re-deployment
of deposits or other funds acquired by the Lender to maintain the
Libor Loan and any interest or other charges payable to lenders
of funds borrowed by the Lender in order to maintain the Libor
Loan together with any other charges, costs or expenses incurred
by such Lender relative thereto.
(c) Telephone Instructions. The Borrower shall indemnify
the Lender for any loss or expense suffered or incurred by the
Lender as a consequence of the Lender acting in accordance with
prudent banking standards upon instructions given or agreements
made over the telephone or by electronic transmission of any type
with Persons who the Lender, acting reasonably, believes to have
been acting on the Borrower's behalf and who have been identified
in writing by the Borrower as Persons authorized to give such
instructions, provided this indemnity shall not apply to losses
or expenses incurred or suffered by the Lender as a result of its
own gross negligence or wilful misconduct.
(d) Certificate. A certificate of the Lender setting out
the basis for the determination of the amount necessary to
indemnify the Lender pursuant to this Section 5.16 shall be,
prima facie, conclusive evidence of the correctness of such
determination.
SECTION 6 - PAYMENTS AND REDUCTIONS OF COMMITMENTS
6.1 Payments Generally. Each payment to the Lender under this
Agreement shall be paid in the currency in which the relevant
Borrowing is outstanding and all other amounts owing hereunder
shall be paid in Canadian Dollars except as otherwise herein
required or contemplated. Each such payment shall be made for
value at or before 12:00 noon (Toronto time) on the day such
payment is due, provided that, if any such day is not a Business
Day, such payment shall be deemed for all purposes of this
Agreement to be due on the Business Day next following such day
(and any such extension shall be taken into account for purposes
of the computation of interest and fees payable under this
Agreement).
6.2 No Set-Off. All payments to be made by the Borrower shall
be made without set-off or counterclaim and without any deduction
of any kind.
6.3 Application of Payments Before Exercise of Rights. All
payments made by or on behalf of the Borrower under this
Agreement before the exercise by the Lender of any rights arising
under Section 9.2 shall be applied in each instance in the
following order:
(a) firstly, in payment of any amounts due and payable as
and by way of recoverable expenses hereunder;
(b) secondly, in payment of any fees, interest, or default
interest then due and payable on or in respect of the
Borrowings;
(c) thirdly, in repayment of any principal amounts
outstanding on account of the Borrowings; and
(d) fourthly, in payment of any other amounts then due and
payable by the Borrower hereunder.
6.4 Application of Payments After Exercise of Rights. All
payments made by or on behalf of the Borrower under this
Agreement after the exercise by the Lender of any rights arising
under Section 9.2 shall be applied in each instance in the
following order, unless the Lender otherwise determines in its
sole and absolute discretion:
(a) firstly, in payment of the reasonable costs and
expenses of any realization, including the out-of-pocket expenses of
the Lender and the reasonable fees
and out-of-pocket expenses of counsel employed in
connection therewith, and to the payment of all
reasonable funds made available by the Lender for the
account of the Borrower in connection with such
realization and the payment of all reasonable out-of-pocket costs
and expenses incurred by the Lender in
connection with the administration and enforcement of
this Agreement or the other Documents, to the extent
that such funds, costs and expenses shall not have been
reimbursed to the Lender;
(b) secondly, in payment of any unpaid fees payable
hereunder to and including the date of such
application;
(c) thirdly, in payment of principal and then to the
payment of any other Indebtedness (other than on
account of interest) outstanding under this Agreement
and under any other agreement applicable to the
Outstanding Borrowings, and then to the payment of
accrued and unpaid interest thereunder to and including
the date of such application; and
(d) fourthly, in payment of the balance, if any, of such
proceeds to the Borrower or such other person or
persons who may be entitled at law to such proceeds or,
in each case, their respective successors or assigns,
or as a court of competent jurisdiction may otherwise
direct.
6.5 Reduction of Commitment. The Borrower may reduce or cancel
the amount of the Commitment at any time upon not less than five
Business Days prior irrevocable written notice to the Lender
without bonus or penalty; provided that on or prior to the
effective date of such reduction or cancellation all Outstanding
Borrowings in excess of the Commitment, as reduced or cancelled,
together with interest accrued thereon and fees outstanding in
respect thereof is paid in full.
SECTION 7 - COVENANTS
7.1 Covenants of the Borrower. While any amount owing hereunder
remains unpaid or the Lender has any obligations hereunder, the
Borrower covenants with the Lender, that it will:
(a) Corporate Existence and Franchises. except as
otherwise expressly permitted in this Agreement, maintain in full
force and effect its separate existence and all rights, licenses,
leases and franchises reasonably necessary to the conduct of its
business.
(b) Books, Records and Inspections. maintain complete and
accurate books and records, permit the Lender to have reasonable
access to the Borrower's books and records, and permit the Lender
to inspect the Borrower's properties and operations at reasonable
times.
(c) Insurance. maintain insurance to such extent and
against such hazards and liabilities as may be required by law
and as is commonly maintained by companies similarly situated or
as the Lender may reasonably request from time to time.
(d) Taxes and Liabilities. promptly pay when due all
taxes, duties, assessments and other liabilities, except such
taxes, duties, assessments and other liabilities as the Borrower
is diligently contesting in good faith and by appropriate
proceedings or which the failure to pay would not have a Material
Adverse Effect; provided that the Borrower has provided for and
is maintaining adequate reserves with respect thereto in
accordance with GAAP.
(e) Liens. not create or permit to exist any Lien with
respect to any of the properties or assets of the Borrower or any
Subsidiary, whether nor owned or hereafter acquired, including,
without limitation, accounts or inventory now owned or hereafter
acquired, except the following Liens (a) Permitted Liens; (b)
Liens which arise in the ordinary course of business for sums not
due or sums which the Borrower is contesting in good faith and by
appropriate proceedings and with respect to which the Borrower
has provided for and is maintaining adequate reserves in
accordance with GAAP, but which do not involve any deposits or
advances or borrowed money or the deferred purchase price of
property or services; and (c) any other Lien in respect of which
the Lender has provided its prior written consent.
(f) Prohibition of Negative Pledge. not, nor will it permit
any of its Subsidiaries to agree, covenant, warrant, represent,
pledge or otherwise commit with or to any entity other than the
Lender, to not incur, create, assume or permit to exist, any
mortgage, pledge, lien charge or other encumbrance of any nature
whatsoever on all or any of its assets now or hereafter owned,
except for such pledge made directly in connection with the
purchase of inventory in the ordinary course of business, with a
value of such inventory owned by the Borrower and its
Subsidiaries not exceeding $2,500,000.00 in the aggregate at any
time.
(g) Other Agreements. not enter into any agreement which
would have a Material Adverse Effect on the Borrower containing
any provision which would be violated or breached by the
performance of its obligations hereunder or under any instrument
or document delivered or to be delivered by it hereunder or in
connection herewith or which would violate or breach any
provision hereof or of any such instrument or document.
(h) Compliance with Applicable Laws. comply with the
requirements of all Applicable Laws, rules, regulations, and
orders of all Governmental Authorities (Federal, state,
provincial, local or foreign, and including, without limitation,
environmental laws, rules, regulations and orders), except for
failures to comply with such statutes, rules and regulations
which in the aggregate would not materially and adversely affect
the Borrower's business, credit, operations, financial condition
or prospects, except where the Borrower is contesting an alleged
breach in good faith and by proper proceedings and for which the
Borrower is maintaining adequate reserves in accordance with
GAAP.
(i) Delivery of Documents. on or before the Closing Date
(except as otherwise noted), the Borrower shall execute, or cause
to be executed, and delivered to the Lender, in form and
substance satisfactory to it acting reasonably, the following:
1. a certificate of an officer on behalf of the Borrower
dated as of the Closing Date certifying:
(i) the names and specimen signatures of the Persons
authorized to sign the Documents to be executed
and delivered by the Borrower;
(ii) that the constating documents and by-laws of the
Borrower attached thereto are complete and correct
copies, have not been amended, modified or
supplemented except as described in the
certificate and are in full force and effect,
except that, to the extent that the Borrower has
provided the Lender within the previous 8 months
with a copy of its constating documents or by-laws,
instead of providing a new copy it may
provide the Lender with a certificate of one of
its officers to the effect that such documents are
complete and correct copies of the originals
thereof which originals have not been amended,
modified or supplemented and are in full force and
effect;
(iii) that attached thereto is the resolution of
the Borrower and all other authorizations
necessary to authorize the execution and
delivery and performance of the Documents
executed and delivered by it;
2. promissory note(s) given by the Borrower in favour of
the Lender evidencing the Outstanding Borrowings
substantially in the form set out in Schedule 7.1(i)2.
3. Letter of Credit Agreement given by the Borrower in
favour of the Bank with respect to the issuance of
Letters of Credit.
4. unlimited guarantee and postponement of claim given by
the Guarantor in favour of the Lender with respect to
the indebtedness of the Borrower to the Lender
substantially in the form set out in Schedule 7.1(i)4;
5. acknowledgements by the Guarantor and the domestic
senior lenders of the Guarantor that the said guarantee
shall be held by the Lender on a pari passu basis;
6. opinions of legal counsel to the Borrower and the
Guarantor, addressed to the Lender substantially in the
form set out in Schedule 7.1(i)6; and
7. such other documents related to the foregoing as the
Lender may reasonably request.
7.2 Accounting, Financial Statements and Other Information.
General. The Borrower shall maintain a system of accounting
established and administered in accordance with GAAP consistently
applied and shall set aside on its books all proper reserves.
Reports. The Borrower shall provide to the Lender each of
the following:
(a) Audit Report. on or before the 90th day after each of
the Guarantor's fiscal years, a copy of an annual audit
report of the Guarantor prepared in conformity with
GAAP, duly certified by its Auditors, together with a
certificate from such Auditors containing a computation
of, and showing compliance with, each of the financial
ratios and restrictions contained in this Agreement.
(b) Interim Reports. on or before the 45th day after the
end of each of the Borrower's fiscal quarters, (i) a
copy of unaudited financial statements of the Borrower
prepared in a manner consistent with the financial
statements referred to above, signed by a senior
financial officer of the Borrower and consisting of, at
least, balance sheets as at the close of such month and
statements of earnings for such quarter and for the
period from the beginning of such fiscal quarter to the
close of such quarter, and (ii) a Compliance
Certificate of the Chief Financial Officer or Treasurer
of the Consolidated Guarantor substantially in the form
attached to the U.S. Loan Agreement.
(c) Notice of Default and Litigation. forthwith upon
learning of the occurrence of any of the following
written notice thereof which describes the same and the
steps being taken by the Borrower with respect thereto:
(i) the occurrence of an Event of Default or Default,
(ii) the institution of, or any adverse determination
in, any litigation, arbitration proceedings or
governmental proceeding in which any injunctive relief
is sought or in which money damages in excess of
$1,000,000.00 are sought.
(d) Other Information. such other information concerning
the Borrower as the Lender may reasonably request from
time to time.
SECTION 8 - ENVIRONMENTAL MATTERS
8.1 Representations and Warranties. The Borrower represents and
warrants to the Lender, all of which shall survive the execution
and delivery of this Agreement, as follows:
(a) Compliance. Subject to Section 8.1(d) below, to the
best knowledge of the Borrower, the property, assets, activities
and operations of the Borrower and those of any prior owner,
lessee, licensee or other occupant thereof comply in all material
respects with all Environmental Laws and with any authorization,
permit, grant, licence, consent, right, privilege, registration,
filing, commitment, order, approval, judgment, direction,
ordinance or decree issued or granted by law or by any
Governmental Authority and are not subject to any judicial,
governmental, regulatory or other investigations, proceedings,
inquiries or notices; save and except to the extent disclosed in
writing to the Lender and in respect of which, to the extent
possible, adequate remedial action has been undertaken. To the
best knowledge of the Borrower, none of the Borrower, and any
present or prior owner, lessee, licensee or occupant or any
Person having the charge, management or control of any of their
respective properties has filed any notice or report under any
Environmental Law with any Governmental Authority.
(b) Presence of Contaminant. Subject to Section 8.1(d)
below, to the best knowledge of the Borrower, there neither is
nor has been, any Environmental Activity at, upon, under, over,
within or with respect to their properties with the exception of
the handling, use or storage in accordance with Environmental
Laws, of electrical and/or hydraulic equipment that may contain
PCBs or related substances, which equipment is of a kind normally
used in premises similar to the properties of the Borrower.
(c) Liability. Subject to Section 8.1(d) below, to the
best knowledge of the Borrower, none of the Borrower and any
present or prior owner, lessee, licensee or occupant of any of
their respective properties has been, nor is it, involved in any
operations at, or with respect to their properties which could
lead to the imposition of liability on the Borrower or Person who
has or will have the charge, management or control of any such
property or the creation of a Lien thereon under any
Environmental Law; save and except to the extent disclosed in
writing to the Lender and in respect of which to the extent
possible adequate remedial action has been undertaken.
(d) Inquiry. The representations and warranties provided
in Sections 8.1(a)(b) and (c) are given after limited inquiry by
the Borrower, the details of which are provided in Schedule
8.1(d).
8.2 Covenants. While any amount owing hereunder remains unpaid
or the Lender has any obligations hereunder, the Borrower
covenants with the Lender as follows:
(a) Compliance. It shall comply in all material respects
with the requirements of any Environmental Law.
(b) Notification. It shall notify the Lender within 10
days of becoming aware of any Release or within 15 days of any
other discovery of any Contaminant at, upon, under, over, within
or with respect to any of its property or any contiguous real or
immovable property. It shall promptly thereafter forward to the
Lender copies of all orders, notices, permits, applications or
other communications and reports in connection with any
Environmental Law affecting or relating to any of its property or
its operations and activities.
8.3 Indemnity. The Borrower shall at all times indemnify and
hold harmless the Lender from and against any and all claims,
suits, actions, debts, damages, costs, losses, obligations,
judgments, charges, and expenses, of any nature whatsoever (in
this Section 8.3, a "Claim") suffered or incurred by the Lender,
whether upon realization of any security, or as a lender to the
Borrower, or as successor to or assignee of any right or interest
of the Borrower or as a result of any order, investigation or
action by any Governmental Authority relating to the Borrower, or
the business or property of the Borrower as privileged or
hypothecary creditor or mortgagee in possession of property or as
successor or successor-in-interest as a result of any taking of
possession of all or any property or by foreclosure deed or deed
in lieu of foreclosure or by any other means relating to the
Borrower, under or on account of any breach of Environmental Law
(except as a result of the negligence or wilful misconduct of the
Lender), or the assertion of any Lien thereunder, with respect
to:
(a) the Release of a Contaminant, the threat of the Release
of any Contaminant, or the presence of any Contaminant
affecting any of their respective properties,
(b) the Release of a Contaminant owned by, or under the
charge, management or control of, the Borrower,
(c) any costs incurred by any Governmental Authority or any
other Person or damages from injury to, destruction of,
or loss of natural resources in relation to, any such
property or personal property located thereon,
including reasonable costs of assessing such injury,
destruction or loss incurred pursuant to any
Environmental Laws,
(d) liability for personal injury or property damage
arising by reason of any civil law offences or
quasi-offences or under any statutory or common law
tort or similar theory, including, without limitation,
damages assessed for the maintenance of a public or
private nuisance or for the carrying on of a dangerous
activity at, or with respect to its property, and/or
(e) any other environmental matter affecting any property
or the operations and activities of the Borrower within
the jurisdiction of any federal, provincial, municipal
or local environmental agency.
8.4 Scope of Indemnity. The Borrower acknowledges that the
Lender has agreed to make the Credit Facilities available in
reliance upon the representations, warranties, and covenants in
this Section 8.4. For this reason, it is the intention of the
Borrower and the Lender that the provisions of this Section 8
shall supersede any other provisions in this Agreement or in any
Document which in any way limit the liability of the Borrower and
that the Borrower shall be liable for any obligations arising
under this Section 8 even if the amount of the liability incurred
exceeds the amount outstanding under this Agreement. The
obligations arising under this Article are absolute and
unconditional and shall not be affected by any act, omission or
circumstance whatsoever, except in respect of negligence or
wilful misconduct by the Lender. The obligations of the Borrower
arising under this Section 8 shall survive the repayment of the
Borrowings and shall survive the transfer of any or all right,
title and interest in and to any property to any party, whether
or not affiliated with the Borrower.
8.5 Interest. If the Lender incurs any obligations, costs or
expenses under this Section 8 or in respect of any Environmental
Activity covered by this Section 8, the Borrower shall pay the
same to the Lender immediately on demand, and if such payment is
not received within 10 days, such amount will be treated as a
Prime Loan and the Borrower will pay interest thereon on demand,
but otherwise calculated as set out in Section 5.1.
SECTION 9 - DEFAULT AND ENFORCEMENT
9.1 Events of Default. Upon the occurrence of any one or more
of the following events the Lender may, by written notice to the
Borrower, declare an Event of Default:
(a) Non-payment of Principal. The Borrower fails to make when
due, whether by acceleration or otherwise, any payment of
principal required to be made by the Borrower hereunder and such
default continues for more than one (1) Business Day.
(b) Non-payment of Interest, Fees and Other Amounts. The
Borrower fails to make when due, whether by acceleration or
otherwise, any payment of interest, fees or any other payment
hereunder not referred to in Section 9.1(a) and such failure
continues for 5 Days of such due date.
(c) Covenants. The Borrower fails to perform or observe to any
material extent any other term, condition, covenant or
undertaking contained in any Document. Except as regards breaches
of covenants contained in Sections 7.1(a) and 7.2(a) in respect
of which the Lender may immediately declare an Event of Default,
the Borrower shall have 30 days after the occurrence of such
event to remedy such failure. Only if the Borrower does not
remedy such failure within that time shall the Lender become
entitled to declare an Event of Default on the basis of such
failure.
(d) Cross-Defaults. The occurrence of any "Default", as defined
in the U.S. Loan Agreement, the U.S. Guaranty or any other U.S.
Loan Documents or the breach of any of the terms or provision of
the U.S. Loan Agreement, the U.S. Guaranty or any other U.S. Loan
Documents, which default or breach continues beyond any period of
grace therein provided and has not been waived.
(e) Nonpayment of Other Indebtedness. The Borrower or the
Guarantor defaults in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise,
of any other Indebtedness in the principal amount in excess of
$500,000 of, or guaranteed by, the Borrower or the Guarantor or
defaults in the performance or observance of any obligation or
condition with respect to any such other Indebtedness if the
effect of such default is to accelerate the maturity of any such
Indebtedness or to permit the holder or holders thereof, or any
trustee or agent for such holders, to cause such Indebtedness to
become due and payable prior to its expressed maturity, and
continuation thereof after the Lender gives notice to the
Borrower or the Guarantor that such default is an Event of
Default.
(f) Representation and Warranties. Any material representation,
warranty or statement which is made by the Borrower in any
Document or which is contained in any certificate, written
statement or written notice provided under or in connection with
any Document is untrue or incorrect in any material adverse
respect when made and such default continues for 30 days.
(g) Execution. A distress or execution or any similar process
is levied or enforced against any material property or assets of
the Borrower or any of its Subsidiaries with an aggregate fair
market value in excess of an amount equal to 3% of the Borrower's
shareholders equity.
(h) Invalidity and Contestation. This Agreement or any of the
other Documents shall at any time after execution and delivery
and for any reason (other than in accordance with its terms)
cease to be in full force and effect or shall be declared to be
null and void, or the legality, validity, binding nature or
enforceability of this Agreement or any other Document or any
term or provision thereof shall be contested by the Borrower or
any other party thereto, or the Borrower or any other such party
shall deny that it has any or further liabilities or obligations
thereunder.
(i) Government Approval. Any material Government Approval
required to enable the Borrower or any of its Subsidiaries to
conduct its business substantially as presently conducted or to
perform its obligations under any Document is not obtained or is
withdrawn or ceases to be in full force and effect and such
required Government Approval cannot be acquired or reinstated
within 60 days of the date on which the Borrower or such
Subsidiary knew or ought to have known such Government Approval
was required or withdrawn or, if capable of acquisition or
reinstatement within such 60-day period, the Borrower or such
Subsidiary has not proceeded diligently to obtain or reinstate
such Government Approval within such 60-day period.
(j) Voluntary Proceedings. The commencement by or acquiescence
of the Borrower or any of its Subsidiaries of or to proceedings
for substantive relief with respect to the Borrower or a
Subsidiary in any bankruptcy, insolvency, debt restructuring,
reorganization, readjustment of debt, dissolution, liquidation or
other similar proceedings (including, without limitation,
proceedings under the Bankruptcy and Insolvency Act (Canada), the
Winding-up Act (Canada), the Companies' Creditors Arrangement Act
(Canada), or similar legislation in the United States of America,
the corporation statute under which any of them is organized or
other similar legislation) including, without limitation, the
filing of a proposal or plan of arrangement or a notice of
intention to file same, or proceedings for the appointment of a
trustee, interim receiver, receiver, receiver and manager,
custodian, liquidator, provisional liquidator, administrator,
sequestrator or other like official with respect to the Borrower
or any of its Subsidiaries or all or any material part of their
respective assets, or any similar relief.
(k) Involuntary Proceedings. If a petition or any other
proceeding or case shall be filed, instituted or commenced with
respect to the Borrower or any of its Subsidiaries under any
bankruptcy, insolvency, debt restructuring, reorganization,
incorporation, readjustment of debt, dissolution, liquidation,
winding-up or similar law, now or hereafter in effect, seeking
the bankruptcy, liquidation, reorganization, dissolution,
winding-up, composition or readjustment of debts of the Borrower
or any of its Subsidiaries, the appointment of a trustee, interim
receiver, receiver, receiver and manager, custodian, liquidator,
provisional liquidator, administrator, sequestrator or other like
official for the Borrower or any of its Subsidiaries or all or
any material part of their respective assets, or any similar
relief.
(l) Receiver. Any Person including, without limitation, a
receiver, receiver and manager, or other similar official whether
appointed privately or judicially, is appointed for the Borrower
or any of its Subsidiaries or takes possession of the properties
or assets of the Borrower or any of its Subsidiaries with an
aggregate fair market value in excess of an amount equal to 3% of
the Borrower's shareholders equity.
(m) Act of Bankruptcy. The Borrower or any of it Subsidiaries
is unable to pay debts generally as such debts become due, is
adjudged or declared to be bankrupt or commits an act of
bankruptcy.
9.2 Rights upon Default. Upon the occurrence of an Event of
Default, the Lender may, on written notice to the Borrower,
declare that the entire principal amount of the Outstanding
Borrowings, all unpaid accrued interest and all fees and other
amounts required to be paid by the Borrower hereunder are
immediately due and payable without the necessity of presentment
for payment, notice of non-payment and of protest (all of which
are hereby expressly waived to the fullest extent permitted by
Applicable Law) and proceed to exercise any and all rights and
remedies hereunder and under any other Document. From and after
the issuance of any declaration referred to in this Section 9.2,
the Lender shall not be required to honour any cheque or other
instrument presented to it regardless of the date of issue or
presentation. Immediately upon receipt of such declaration, the
Borrower shall pay to the Lender all amounts referred to therein.
9.3 Waiver of Default. No express or implied waiver by the
Lender of any Event of Default shall in any way be or be
construed to be a waiver of any future or subsequent Event of
Default. To the extent permitted by Applicable Law, the Borrower
hereby waives any rights now or hereafter conferred by statute or
otherwise which may limit or modify any of the Lender's rights or
remedies under this Agreement. The Borrower acknowledges and
agrees that the exercise by the Lender of any rights under any
Document without having declared an acceleration shall not in any
way alter, affect or prejudice the right of the Lender to make a
declaration pursuant to the provisions of Section 9.2 at any time
and, without limiting the foregoing, shall not be construed as or
deemed to constitute a waiver of any rights under Section 9.3.
SECTION 10 - REMEDIES
10.1 Remedies Cumulative. For greater certainty, the rights and
remedies of the Lender under this Agreement are cumulative and
are in addition to and not in substitution for any rights or
remedies provided by law. Any single or partial exercise by the
Lender, of any right or remedy for a default or breach of any
term, covenant, condition or agreement herein contained shall not
be deemed to be a waiver of or to alter, affect or prejudice any
other right or remedy or other rights or remedies to which the
Lender may be lawfully entitled for the same default or breach,
and any waiver by the Lender of the strict observance,
performance or compliance with any term, covenant, condition or
agreement herein contained, and any indulgence granted thereby,
shall be deemed not to be a waiver of any subsequent default.
10.2 Remedies Not Limited. The Lender may, to the extent
permitted by Applicable Law, bring suit at law, in equity or
otherwise for any available relief or purpose including but not
limited to (a) the specific performance of any covenant or
agreement contained in this Agreement or in any other Document,
(b) an injunction against a violation of any of the terms of this
Agreement or any other Document, (c) in aid of the exercise of
any power granted by this Agreement or any other Document or by
law, or (d) the recovery of any judgment for any and all amounts
due in respect of the Borrowings or amounts otherwise due
hereunder or under any Document.
10.3 Set-Off, etc. Upon and after the declaration of any Event
of Default pursuant to Section 9.2, the Lender and each of its
branches and offices and any sub-participants are hereby
authorized by the Borrower, at any time and from time to time,
without notice, (a) to set off and apply any and all amounts
owing by the Lender or any such branch or office or any sub-participants
to the Borrower (whether payable in Canadian Dollars
or any other currency, whether matured or unmatured, and in the
case of deposits, whether general or special, time or demand and
however evidenced) against and on account of the obligations and
liabilities of the Borrower due to the Lender and any sub-participants
under this Agreement or any other agreement
delivered under or in connection with this Agreement including,
without limitation, the Documents, (whether such obligations or
liabilities are payable in Canadian Dollars or any other
currency, and whether such obligations or liabilities are
unmatured or contingent), (b) to hold any such amounts owing by
the Lender as collateral to secure the obligations and
liabilities of the Borrower under this Agreement to the extent
such amounts may be required to satisfy any contingent or
unmatured obligations or liabilities of the Borrower to the
Lender or sub-participants hereunder, and (c) to return as unpaid
for insufficient funds any and all cheques and other items drawn
against any deposits so held as the Lender in its sole discretion
may elect.
10.4 Lender May Perform Covenants. If the Borrower shall fail to
perform any of its obligations under any covenant contained in
this Agreement or any other Document, the Lender may (but has no
obligation to), upon notice to the Borrower, if the Lender,
acting reasonably, believes it necessary to do so to protect or
preserve its rights and remedies hereunder perform any such
covenant capable of being performed by it and, if any such
covenant requires the payment or expenditure of money, it may
make such payment or expenditure with its own funds. All amounts
so paid by the Lender hereunder shall be repaid by the Borrower
on demand therefor, and shall bear interest at the rate
applicable to a Prime Loan from and including the date paid by
the Lender hereunder to but excluding the date such amounts are
irrevocably repaid in full by the Borrower.
SECTION 11 - MISCELLANEOUS
11.1 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or consent to any departure by the
Borrower from any provision of this Agreement will in any event
be effective unless it is in writing and then the amendment,
modification, waiver or consent will be effective only in the
specific instance, for the specific purpose and for the specific
length of time for which it is given by the Lender.
11.2 Notice. Any notice, request or other communication to be
given under this Agreement, except as otherwise specifically
stated, shall be in writing and shall be either delivered
personally or sent by telecopier or by prepaid mail to the
mailing address, or telecopier number applicable, of a party
stated beside the name of the party at the foot of this Agreement
and to the attention of the Person or to such other mailing or
telecopier number as the party may notify to the other from time
to time under this provision. Any such notice, request or other
communication if delivered or mailed, shall be deemed to have
been given when received and, if telecopied before 4:30 p.m. on a
Business Day, shall be deemed to have been received on that day,
and if telecopied after 4:30 p.m. on a Business Day, shall be
deemed to have been received on the Business Day next following
the date of transmission.
11.3 Judgment Currency. If for the purposes of obtaining
judgment in any court in any jurisdiction with respect to this
Agreement, it becomes necessary to convert into the currency of
such jurisdiction ("Judgment Currency") any amount due hereunder
in the currency in which such amount is payable in accordance
with this Agreement (the "Agreed Currency"), then conversion
shall be made at the rate of exchange prevailing on the Business
Day before the day on which judgment is given. For this purpose,
"Rate of Exchange" means the spot rate at which the Lender would,
on the relevant date at or about 12:00 noon (Toronto time), be
prepared to purchase the Judgment Currency with the amount
applicable in the Agreed Currency in Xxxxxxx, Xxxxxxx. In the
event that there is a change in the rate of exchange prevailing
between the Business Day before the day on which the judgment is
given and the date of payment of the amount due, the Borrower
will, on the date of payment, pay such additional amounts (if
any) or be entitled to receive reimbursement of such amount, if
any, as may be necessary to ensure that the amount paid on such
date is the amount in the Judgment Currency which when converted
at the rate of exchange prevailing on the date of payment is the
amount then due under this Agreement in the Agreed Currency. Any
additional amount due from the Borrower under this Section 11.3
will be due as a separate debt and shall not be affected by
judgment being obtained for any other sums due under or in
respect of this Agreement.
11.4 Further Assurances. The Borrower shall from time to time
promptly upon the reasonable request of the Lender take such
action, and execute and deliver such further documents, as may be
reasonably necessary or appropriate to fully give effect to the
provisions and intent of this Agreement.
11.5 Reimbursement of Expenses. The Borrower shall, on demand,
pay to the Lender all of the reasonable legal fees of the Lender,
out-of-pocket documentation costs and other out-of-pocket
expenses, all reasonably incurred:
(a) in the negotiation, preparation and execution of this
Agreement and the other Documents; and
(b) in connection with the administration of this
Agreement.
In addition, the Borrower shall pay all reasonable legal fees,
and other out-of-pocket expenses reasonably incurred by the
Lender in connection with the determination or preservation of
any rights, or the enforcement of or legal advice in respect of
rights or responsibilities, of the Lender under this Agreement or
the other Documents.
11.6 Survival. Without prejudice to the survival or termination
of any other agreement of the Borrower under this Agreement, the
obligations of the Borrower under Sections 5.16, 8.3 and 11.5
shall survive the repayment of all the Borrowings.
11.7 Attornment. Each of the parties irrevocably attorns to the
non-exclusive jurisdiction of the courts of Ontario.
11.8 Successors and Assigns.
(a) Enurement. This Agreement shall be binding upon and
enure to the benefit of the Borrower, the Lender and their
respective successors and assigns, except that the Borrower may
not assign or transfer all or any part of its rights and
obligations under this Agreement without the Lender's prior
written consent.
(b) Amalgamation. The Lender acknowledges and consents to
the amalgamation of the Borrower with Old Burtek provided that
the Lender receives, in form and substance satisfactory to it,
acknowledgements and confirmations from the Guarantor and the
amalgamated party as to the continued validity, effect and
applicability of the Documents.
(c) Assignment By Lender. The Lender may at any time
assign all or any part of its rights or obligations hereunder to
another Person with the Borrower's prior written consent, which
consent not to be unreasonably withheld or delayed. The Lender
will only assign the Documents to a Person to the extent the
Lender's rights and obligations hereunder have been assigned to
that Person; provided that any such assignment shall be to a
financial institution which is a Canadian resident and the
Borrower shall not be liable for, or obligated to pay any
increased costs, fees, interest or other amounts as a result of
any assignment.
(d) Sub-Participations. The Lender may grant one or more
sub-participations in its rights and obligations hereunder to
another bank or financial institution with the Borrower's prior
written consent, which consent not to be unreasonably withheld or
delayed; provided that following any such sub-participation, the
Borrower shall not be liable for, or obligated to pay any
increased costs, fees, interest or other amounts as a result of
any such sub-participation and the Borrower shall be entitled to
continue to deal with Lender notwithstanding the sub-participation.
(e) Disclosure to Assignee or Sub-Participant. The Lender
may disclose to an assignee or sub-participant or proposed
assignee or sub-participant information in the possession of the
Lender relating to the Borrower or its Subsidiaries and furnished
to it in connection herewith, provided that the Lender shall
require such assignee, sub-participant, proposed assignee or
proposed sub-participant to enter into an agreement in form
satisfactory to the Borrower acting reasonably whereby it agrees
to maintain such information confidential.
11.9 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original and all of
which shall constitute one and the same agreement.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first above written.
THE BORROWER: BURTEK SYSTEMS INC.
Address: 00X000 Xxxxxxxxx Xx. By:_________________________
Xx Xxx, Xxxxxxxx 00000 Name:
U.S.A. Title:
Fax: (000) 000-0000 By:_________________________
Name:
Phone: (000) 000-0000 Title:
THE LENDER: FIRST CHICAGO NBD BANK, CANADA
Address: First Chicago NBD Bank, Canada By:_________________________
000 Xxx Xxxxxx, Xxxxx 0000 Name:
Toronto, Ontario Title:
X0X 0X0
By:_________________________
Name:
Title:
Fax: (000) 000-0000
Phone: (000) 000-0000
The undersigned acknowledges that the undersigned executed a
guarantee dated as of February 28, 1997 (the "Guarantee") in
favour of the Lender with respect to the indebtedness and
liabilities of Xxxxxxxxxx Electronics Acquisition Corp. (the
"Original Borrower") to the Lender under a credit agreement dated
as of February 18, 1997 (the "Credit Agreement").
The undersigned further acknowledges that, pursuant to an
amalgamation effective May 31, 1997, the Original Borrower
amalgamated with Old Burtek (Burtek Systems Inc.) to continue as
the Borrower.
The undersigned further acknowledges that the Lender and the
Borrower entered into a first amending agreement made as of
August 14, 1997 amending the terms of the Credit Agreement; and a
second amending agreement made as of August 22, 1997 further
amending the terms of the Credit Agreement.
The undersigned acknowledges and agrees that the Guarantee shall
constitute, and shall be held by the Lender as a general and
continuing guarantee of the payment and fulfilment of all of the
debts, liabilities and obligations, present or future, direct or
indirect, contingent or not, matured or not of the Borrower to
the Lender including, without limitation, pursuant to the Credit
Agreement, as amended or modified.
XXXXXXXXXX ELECTRONICS, LTD.
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
SCHEDULE 7.1(i)2
FORM OF PROMISSORY NOTES
Term CAD
Promissory Note Toronto, Ontario
March 1, 1998
FIRST CHICAGO NBD BANK (CANADA)
First Chicago NBD Bank, Canada
BCE Place, P.O. Box 613
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
FOR VALUE RECEIVED the undersigned promises to pay to or to the
order of FIRST CHICAGO NBD BANK (CANADA) (the "Bank") at its BCE
Place, P.O. Box 613, 161 Bay Street, Suite 4240, Xxxxxxx,
Xxxxxxx, X0X 0X0 branch, the amount of principal of TWO MILLION
NINE HUNDRED AND THIRTY FIVE THOUSAND THREE HUNDRED AND TEN
DOLLARS AND THIRTY SIX CENTS (CDN$2,935,310.36) DOLLARS in lawful
money of Canada.
This term note is issued under and subject to the terms of the
Amended and Restated Credit Agreement dated as of March 1, 1998
(the "Credit Agreement") entered into between the Bank and the
undersigned. Unless otherwise defined, capitalized terms used
herein shall have the meaning ascribed thereto in the Credit
Agreement.
The amount of principal is to be repayable as follows:
The undersigned shall pay outstanding
borrowings by way of 48 equal monthly
instalments of CAD$71,592.92 plus interest,
commencing August 31, 1997 with the final
installment due on July 31, 2001, at which
time the entire balance of unpaid principal
plus accrued interest shall be due and
payable immediately.
The undersigned further promises to pay monthly and
contemporaneously with the instalments of the above-mentioned
principal, the accrued interest on the unpaid principal daily
computed at a rate per annum equal to the Bank's Prime Rate per
annum in effect from time to time up to and after maturity and
until complete payment, at the said branch. At the date of this
note, such Prime Rate is 6.5% per annum.
Upon default in payment when due of any installment of principal
or interest, or any other term or condition of the Credit
Agreement, the whole amount of this note shall fall due.
BURTEK SYSTEMS INC.
By:_________________________________C/S
Name:
