THIRD AMENDED AND RESTATED CREDIT AGREEMENT
BETWEEN
THE BANK OF NOVA SCOTIA
AS AGENT
AND
THE BANK OF NOVA SCOTIA,
LAURENTIAN BANK OF CANADA
AND JPMORGAN CHASE BANK, N.A.
AND OTHER FINANCIAL INSTITUTIONS
AS LENDERS
AND
VITRAN CORPORATION INC.,
VITRAN EXPRESS CANADA INC.
AND VITRAN CORPORATION
AS BORROWERS
DATED AS OF SEPTEMBER 20, 2006
(FASKEN XXXXXXXXX LOGO)
00 XXXXXXXXXX XXXXXX XXXX
XXXXX 0000, P.O. BOX 20
TORONTO DOMINION XXXX XXXXX
XXXXXXX-XXXXXXXX XXXXXX
XXXXXXX, XXXXXXX X0X 0X0
TABLE OF CONTENTS
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ARTICLE 1 INTERPRETATION................................................. 2
1.1 Defined Terms.................................................... 2
1.2 Other Usages..................................................... 22
1.3 Plural and Singular.............................................. 22
1.4 Headings......................................................... 22
1.5 Currency......................................................... 22
1.6 Applicable Law................................................... 22
1.7 Time of the Essence.............................................. 22
1.8 Non Banking Days................................................. 22
1.9 Consents and Approvals........................................... 23
1.10 Amount of Credit................................................. 23
1.11 Schedules........................................................ 24
1.12 Extension of Credit.............................................. 24
1.13 Joint and Several Obligations.................................... 24
1.14 Paramountcy...................................................... 24
1.15 Statute References............................................... 24
1.16 Meaning of Include............................................... 24
ARTICLE 2 CREDIT FACILITIES.............................................. 24
2.1 Establishment of Credit Facilities............................... 24
2.2 Credit Restrictions.............................................. 24
2.3 Lenders' Commitments............................................. 25
2.4 Reduction of Credit Facilities................................... 25
2.5 Termination of Credit Facilities................................. 25
ARTICLE 3 GENERAL PROVISIONS RELATING TO CREDITS......................... 26
3.1 Types of Credit Availments....................................... 26
3.2 Funding of Loans................................................. 26
3.3 Failure of Lender to Fund Loan................................... 27
3.4 Funding of Bankers' Acceptances.................................. 28
3.5 BA Rate Loans.................................................... 30
3.6 Inability to Fund U.S. Dollar Advances in Canada................. 30
3.7 Inability to Fund LIBOR Loan in the United States................ 31
3.8 Timing of Credit Availments...................................... 32
3.9 Time and Place of Payments....................................... 32
3.10 Remittance of Payments........................................... 32
3.11 Evidence of Indebtedness......................................... 33
3.12 Notice Periods................................................... 34
3.13 Overdraft Loans.................................................. 34
3.14 General Provisions Relating to All Letters....................... 36
3.15 Agent's Discretion to Allocate................................... 37
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(continued)
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ARTICLE 4 DRAWDOWN....................................................... 38
4.1 Drawdown Notice.................................................. 38
ARTICLE 5 ROLLOVERS...................................................... 38
5.1 Bankers' Acceptances............................................. 38
5.2 LIBOR Loans...................................................... 39
5.3 Rollover Notice.................................................. 39
ARTICLE 6 CONVERSIONS.................................................... 40
6.1 Converting Loan to Other Type of Loan............................ 40
6.2 Converting Loan to Bankers' Acceptances.......................... 40
6.3 Converting Bankers' Acceptances to Loan.......................... 40
6.4 Conversion Notice................................................ 40
6.5 Absence of Notice................................................ 41
6.6 Conversion After Default......................................... 41
ARTICLE 7 INTEREST AND FEES.............................................. 41
7.1 Interest Rates................................................... 41
7.2 Calculation and Payment of Interest.............................. 42
7.3 General Interest Rules........................................... 42
7.4 Selection of Interest Periods.................................... 43
7.5 Acceptance Fees.................................................. 43
7.6 Standby Fees..................................................... 43
7.7 Waiver........................................................... 44
7.8 Maximum Rate Permitted by Law.................................... 44
7.9 Letter Fees...................................................... 44
ARTICLE 8 RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS................. 45
8.1 Conditions of Credit............................................. 45
8.2 Change of Circumstances.......................................... 45
8.3 Assignment as a Result of Change of Circumstances................ 47
8.4 Indemnity Relating to Credits.................................... 47
8.5 Indemnity for Transactional and Environmental Liability.......... 48
8.6 Gross-Up for Taxes............................................... 49
ARTICLE 9 REPAYMENTS AND PREPAYMENTS..................................... 55
9.1 Repayment under Credit Facility 1................................ 55
9.2 Repayment under Revolving Facilities............................. 56
9.3 Voluntary Prepayments............................................ 56
9.4 Mandatory Prepayments under the Credit Facilities................ 56
9.5 Repayments of Credit Excess...................................... 56
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TABLE OF CONTENTS
(continued)
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9.6 Reimbursement or Conversion on Presentation of Letters........... 57
9.7 Letters Subject to an Order...................................... 58
9.8 Reimbursement Obligation for Maturing Bankers' Acceptances....... 58
9.9 Currency of Repayment............................................ 58
ARTICLE 10 REPRESENTATIONS AND WARRANTIES................................ 58
10.1 Representations and Warranties................................... 58
10.2 Survival of Representations and Warranties....................... 63
ARTICLE 11 COVENANTS..................................................... 64
11.1 Affirmative Covenants............................................ 64
11.2 Restrictive Covenants............................................ 69
ARTICLE 12 CONDITIONS PRECEDENT.......................................... 72
12.1 Conditions Precedent to All Credit............................... 72
12.2 Conditions Precedent to Effectiveness of Agreement............... 72
12.3 Conditions Precedent to Each Extension of Credit Under Credit
Facility 3....................................................... 74
12.4 Waiver........................................................... 75
ARTICLE 13 DEFAULT AND REMEDIES.......................................... 75
13.1 Events of Default................................................ 75
13.2 Bankers' Acceptances............................................. 78
13.3 Letters.......................................................... 78
13.4 Refund of Overpayments........................................... 78
13.5 Remedies Cumulative.............................................. 78
13.6 Set Off.......................................................... 79
ARTICLE 14 THE AGENT..................................................... 79
14.1 Appointment and Authorization of Agent........................... 79
14.2 Interest Holders................................................. 80
14.3 Consultation with Counsel........................................ 80
14.4 Documents........................................................ 80
14.5 Agent as Lender.................................................. 80
14.6 Responsibility of Agent.......................................... 80
14.7 Action by Agent.................................................. 80
14.8 Notice of Events of Default...................................... 81
14.9 Responsibility Disclaimed........................................ 81
14.10 Indemnification.................................................. 81
14.11 Credit Decision.................................................. 82
14.12 Successor Agent.................................................. 82
14.13 Delegation by Agent.............................................. 83
14.14 Waivers and Amendments........................................... 83
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(continued)
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14.15 Determination by Agent Conclusive and Binding.................... 84
14.16 Redistribution of Payment........................................ 84
14.17 Adjustments among Lenders after Acceleration..................... 84
14.18 Distribution of Notices.......................................... 85
14.19 Decision to Enforce Security..................................... 85
14.20 Enforcement...................................................... 85
14.21 Application of Cash Proceeds of Realization...................... 85
14.22 Security Documents............................................... 86
14.23 Discharge of Security............................................ 86
ARTICLE 15 GUARANTEE OF BORROWERS........................................ 86
15.1 Guarantee........................................................ 86
15.2 Nature of Guarantee.............................................. 86
15.3 Liability Not Lessened or Limited................................ 86
15.4 Agent not Bound to Exhaust Recourse.............................. 88
15.5 Enforcement...................................................... 88
15.6 Guarantee in Addition to Other Security.......................... 88
15.7 Reinstatement.................................................... 88
15.8 Waiver of Notice, etc............................................ 88
15.9 Subrogation Rights............................................... 88
15.10 Postponement and Subordination of Claims......................... 88
15.11 Advances After Certain Events.................................... 88
ARTICLE 16 MISCELLANEOUS................................................. 88
16.1 Waivers.......................................................... 88
16.2 Notices.......................................................... 88
16.3 Severability..................................................... 89
16.4 Counterparts..................................................... 89
16.5 Successors and Assigns........................................... 89
16.6 Participations and Assignments................................... 89
16.7 Entire Agreement................................................. 91
16.8 Further Assurances............................................... 91
16.9 Judgment Currency................................................ 91
16.10 Waivers of Jury Trial............................................ 92
16.11 USA Patriot Act.................................................. 92
SCHEDULE A PRICING GRID
SCHEDULE B INDIVIDUAL COMMITMENTS
SCHEDULE C COMPLIANCE CERTIFICATE
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TABLE OF CONTENTS
(continued)
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SCHEDULE D FORM OF ASSIGNMENT
SCHEDULE E FORM OF DRAWDOWN/ROLLOVER/CONVERSION NOTICE
SCHEDULE F LITIGATION
SCHEDULE G PERMITTED LIENS
SCHEDULE H FREEHOLD PARCELS
SCHEDULE I LEASEHOLD PARCELS
SCHEDULE J PLEDGED CAPITAL
SCHEDULE K BORROWING BASE CERTIFICATE
SCHEDULE L DISCLOSURE SCHEDULE
SCHEDULE M-1 ORGANIZATIONAL CHART PRE-TRANSACTION
SCHEDULE M-2 ORGANIZATIONAL CHART POST-TRANSACTION
SCHEDULE N SECURITY DOCUMENTS
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS AGREEMENT made as of the 20th day of September, 2006.
BETWEEN:
THE BANK OF NOVA SCOTIA, a Canadian chartered bank
(herein, in its capacity as agent of the Lenders, called the "AGENT")
- and -
THE BANK OF NOVA SCOTIA, LAURENTIAN BANK OF CANADA, JPMORGAN CHASE
BANK, N.A. and one or more financial institutions to whom any of the
foregoing or their assigns may from time to time assign an undivided
interest in the Loan Documents (as defined herein) and who agree to be
bound by the terms hereof as a Lender (as defined herein)
- and -
VITRAN CORPORATION INC., a corporation incorporated under the laws of
the Province of Ontario
(herein called "VITRAN")
- and -
VITRAN EXPRESS CANADA INC., a corporation continued and amalgamated
under the laws of the Province of Ontario
(herein called "VITRAN EXPRESS" and, together with Vitran, the
"CANADIAN BORROWERS")
- and -
VITRAN CORPORATION, a corporation incorporated under the laws of the
State of Nevada
(herein called the "U.S. BORROWER")
WHEREAS certain of the Lenders established in favour of the Canadian
Borrowers a certain revolving/non revolving term credit facility and a certain
revolving term credit facility pursuant to a credit agreement made as of the
13th day of October, 1999 between the Agent, the Lenders and the Canadian
Borrowers (as amended, the "ORIGINAL CREDIT AGREEMENT");
AND WHEREAS the Original Credit Agreement was amended and restated pursuant
to an amended and restated credit agreement made as of January 31, 2002 between
the Agent, the
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Lenders and the Canadian Borrowers (as amended, the "FIRST AMENDED AND RESTATED
CREDIT AGREEMENT");
AND WHEREAS the First Amended and Restated Credit Agreement was amended and
restated pursuant to a second amended and restated credit agreement made as of
May 1, 2006 between the Agent, the Lenders and the Canadian Borrowers (as
amended, the "SECOND AMENDED AND RESTATED CREDIT AGREEMENT");
AND WHEREAS the parties hereto wish to amend and restate the Second Amended
and Restated Credit Agreement upon the terms and conditions contained herein for
the purpose of, inter alia, adding the U.S. Borrower, as a borrower hereunder
and adding JPMorgan Chase, N.A., as a lender hereunder;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual
covenants and agreements herein contained and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto covenant and agree to amend and restate the Second Amended
and Restated Credit Agreement as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINED TERMS. The following defined terms shall for all purposes of this
agreement, or any amendment, substitute, supplement, replacement or addition
hereto, have the following respective meanings unless the context otherwise
specifies or requires or unless otherwise defined herein:
"ACCOUNTS" of a particular U.S. Guarantor means all accounts, contract
rights, instruments, documents, chattel papers, certified and uncertified,
certificates and general intangibles, whether secured or unsecured, now
existing or hereafter created or owned by such U.S. Guarantor, together
with any and all proceeds of any of the foregoing.
"ACQUISITION" means, as to any Person, (i) any purchase or other
acquisition of all of the securities of any other Person, and (ii) any
purchase or other acquisition of all or substantially all of the assets of
any other Person or of assets consisting of a line of business of any other
Person.
"AFFECTED LENDER" shall have the meaning ascribed thereto in Section 8.3.
"AFFILIATE" when used with respect to a Person, means any other Person
which directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such Person. The term
"control" (including the correlative term "CONTROLLED") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting stock, by contract and otherwise.
"AGGREGATE CONSIDERATION" means, in relation to an Acquisition, the total
value of the consideration paid or liability assumed by the purchaser
making such Acquisition and, for
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the purposes of Section 11.2(h), less (x) cash on hand of any Person that
is the subject of an Acquisition; (y) the value of equity issued by a
purchaser which is issued as part of the purchase price for such
Acquisition; and (z) such purchaser's cash on hand immediately prior to the
Acquisition which will be used to pay all or part of the purchase price for
such Acquisition.
"ALTERNATE BASE RATE CANADA" means, for any particular day, the variable
rate of interest per annum, calculated on the basis of a 360-day year,
which is equal to the greater of (a) the Base Rate Canada for such day and
(b) the aggregate of (i) the Federal Funds Effective Rate for such day and
(ii) 1/2 of 1% per annum.
"ALTERNATE BASE RATE NEW YORK" means, at any particular time, the variable
rate of interest per annum, calculated on the basis of a 360-day year,
which is equal to the greater of (a) the Base Rate New York at such time
and (b) the aggregate of (i) the Federal Funds Effective Rate at such time
and (ii) 1/2 of 1% per annum.
"APPLICABLE LAW" means all public laws, statutes, ordinances, decrees,
judgments, codes, standards, acts, orders, by-laws, rules, regulations,
Official Body consents, permits, binding policies and guidelines, and
requirements of all Official Bodies, which now or hereafter may be lawfully
applicable to and enforceable against any Company or its property or any
part thereof.
"APPLICABLE MARGIN" means the applicable margin set forth in Schedule A
hereto. Changes in Applicable Margin are effective from the date on which
Vitran is required to deliver the compliance certificate certifying the
Debt to EBITDA Ratio for the most recently completed Fiscal Quarter.
"ASSET PURCHASE AGREEMENT" means the real estate purchase agreement between
Woodhurst Realty, LLC and Northridge Enterprises, L.P., as sellers, and the
Target, as purchaser, pursuant to which the Target proposes to purchase the
Target Properties from such sellers, substantially on the terms set out in
the draft #1 of such real estate purchase agreement dated September 19,
2006, a copy of which has been provided to the Agent, or as otherwise
agreed to by the Lenders.
"AVAILABLE CREDIT" means, at any particular time and with respect to a
particular Revolving Facility, the aggregate amount, if any, by which the
amount of such Revolving Facility at such time exceeds the aggregate amount
of credit outstanding under such Revolving Facility at such time less, in
the case of Credit Facility 2, the aggregate principal amount of
outstanding Overdraft Loans.
"BA DISCOUNTED PROCEEDS" means, in respect of any Bankers' Acceptances to
be accepted by a Lender on any day, an amount (rounded to the nearest whole
cent and with one-half of one cent being rounded up) calculated on such day
by multiplying:
(a) the aggregate face amount of such Bankers' Acceptances; by
(b) the price, where the price is determined by dividing one by the sum of
one plus the product of:
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(i) the BA Rate which is applicable to such Bankers' Acceptance
(expressed as a decimal); and
(ii) a fraction, the numerator of which is the number of days
remaining in the term of such Bankers' Acceptances and the
denominator of which is 365;
with the price as so determined being rounded up or down to the fifth
decimal place and .000005 being rounded up.
"BA PROCEEDS" means, with respect to a particular Bankers' Acceptance, the
BA Discounted Proceeds with respect thereto less the amount of the
acceptance fees in respect of such Bankers' Acceptance calculated in
accordance with Section 7.5.
"BA RATE" means, with respect to an issue of Bankers' Acceptances with the
same maturity date to be accepted by a Lender hereunder, the discount rate
per annum, calculated on the basis of a year of 365 days, (i) equal to, as
determined by the Agent, the arithmetic average (rounded upwards to the
nearest multiple of 0.01%) of the discount rates of the Reference Lenders
that appear on the Reuters Screen CDOR Page for the Reference Lenders at or
about 10:00 a.m. (Toronto time) on the date of issue and acceptance of such
Bankers' Acceptances, for bankers' acceptances having a comparable face
value and an identical maturity date to the face value and maturity date of
such issue of Bankers' Acceptances or (ii) if such rate does not appear on
such Page for any Reference Lender, equal to the rate per annum for
Canadian dollar bankers' acceptances having such term which is quoted by
such Reference Lender at such time.
"BA RATE LOANS" shall have the meaning ascribed thereto in Section 3.5.
"BANKERS' ACCEPTANCE" means a depository xxxx or xxxx of exchange (a) drawn
by a Canadian Borrower and accepted by a Canadian Lender, (b) denominated
in Canadian dollars, (c) having a term of 30 to 180 days, (d) issued and
payable only in Canada and (e) having a face amount of at least CDN$200,000
and otherwise in an integral multiple of CDN$1,000.
"BANKING DAY" means, when used in respect of Prime Rate Loans, Bankers'
Acceptances and Letters, any day other than a Saturday or a Sunday on which
banks generally are open for normal banking business in Toronto, Ontario
and, when used in respect of LIBOR Loans, means any day other than a
Saturday or a Sunday on which banks generally are open for normal banking
business in Toronto, Ontario, New York, New York, and London, England and,
on which transactions may be undertaken in the London interbank market and
when used in respect of all other Loans, means any day other than a
Saturday or Sunday on which banks generally are open for normal banking
business in Toronto, Ontario and New York, New York.
"BASE RATE CANADA" means the variable rate of interest per annum,
calculated on the basis of a 360-day year for the actual number of days
elapsed, equal to the rate of interest determined by the Agent from time to
time as the base rate of the Agent for United States dollar loans made by
the Agent in Canada from time to time, being a variable per annum reference
rate of interest adjusted automatically upon change by the Agent.
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"BASE RATE CANADA LOAN" means monies lent by the Canadian Lenders to a
Canadian Borrower hereunder in United States dollars and upon which
interest accrues at a rate referrable to the Alternate Base Rate Canada.
"BASE RATE NEW YORK" means the variable rate of interest per annum
determined by the Agent from time to time as its base rate for United
States dollar loans made by the Agent in the United States from time to
time, being a variable per annum reference rate of interest adjusted
automatically upon change by the Agent, calculated on the basis of a year
of 360 days.
"BASE RATE NEW YORK LOAN" means monies lent by the U.S. Lenders to the U.S.
Borrower and upon which interest accrues at a rate referable to the
Alternate Base Rate New York.
"BORROWERS" MEANS THE CANADIAN BORROWERS AND THE U.S. BORROWER AND
"BORROWER" means any of the Borrowers.
"BORROWING BASE" means, at any time, the aggregate of (a) 75% of
Receivables Value and (b) 50% of Inventory Value, less the value of all
Prior Claims, all as reported on the most recent Borrowing Base Certificate
delivered pursuant to Section 11.1.
"BORROWING BASE CERTIFICATE" means a certificate in the form attached as
Schedule K hereto.
"BRANCH OF ACCOUNT" means the Canadian Branch of Account in the case of the
Canadian Borrowers and or the U.S. Branch of Account in the case of the
U.S. Borrower.
"BUSINESS" means the business of the Borrowers and the Subsidiaries, being
the provision of freight and distribution services and ancillary services
thereto carried on by the Borrowers and the Subsidiaries in Canada and the
United States.
"CANADIAN BRANCH OF ACCOUNT" means the Toronto Main branch of The Bank of
Nova Scotia located at Scotia Plaza, 00 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx
or such other branch or office of the Agent located in Canada as the
Canadian Borrowers and the Agent may agree upon.
"CANADIAN DOLLAR EQUIVALENT" means the Exchange Equivalent in Canadian
dollars of any amount of United States dollars.
"CANADIAN LENDERS" means the financial institutions set out and described
as such in Schedule B as amended from time to time and their successors and
permitted assigns.
"CANADIAN QUALIFIED LENDER" means a Person which (i) is not a
"non-resident" within the meaning of the Tax Act, or (ii) is an "authorized
foreign bank" within the meaning of the Tax Act, but only in respect of an
amount payable with respect to any outstanding credit or portion thereof
that is paid or credited in respect of its "Canadian banking business"
within the meaning of the Tax Act.
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"CAPITAL EXPENDITURES" means, for any particular period, the amount which
would, in accordance with generally accepted accounting principles and on a
consolidated basis, be considered to be capital expenses of Vitran for such
period (specifically including those financed through capital leases but
specifically excluding capital expenses of up to (i) ___________ or the
Canadian Dollar Equivalent thereof incurred in the aggregate to acquire
land and undertake any construction thereon in Canada, and (ii) ___________
incurred in the United States), net any proceeds of disposition of capital
assets during such period up to a maximum of ___________ per annum or the
Canadian Equivalent thereof for any fiscal year.
"CASH COLLATERAL ACCOUNT" means a special purpose deposit account
established by the Borrowers with the Agent to deal with prepayments of
outstanding Letters hereunder in the manner set forth herein.
"CASH PROCEEDS OF REALIZATION" means the aggregate of (i) all Proceeds of
Realization in the form of cash and (ii) all cash proceeds of the sale or
disposition of non-cash Proceeds of Realization, in each case expressed in
U.S. dollars.
"CDN$" means the lawful currency of Canada.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 of the United States, as amended by the Superfund
Amendments and Reauthorization Act and as further amended from time to
time, and any successor statute and including all regulations issued under
all such statutes.
"CODE" means the Internal Revenue Code of 1986 of the United States, as
amended from time to time, and any successor statute and including all
regulations issued under all such statutes.
"COMPANIES" means the Borrowers and the Subsidiaries.
"CONVERSION NOTICE" shall have the meaning ascribed thereto in Section 6.4.
"CREDIT EXCESS" means, as at a particular date and with respect to a
particular Credit Facility, the amount, if any, by which the aggregate
amount of credit outstanding under such Credit Facility as at the close of
business on such date exceeds the amount of such Credit Facility (as such
amount may be reduced from time to time pursuant to the terms hereof) as at
the close of business on such date.
"CREDIT FACILITIES" means Credit Facility 1, Credit Facility 2 and Credit
Facility 3 and "Credit Facility" means any of the Credit Facilities.
"CREDIT FACILITY 1" means the non-revolving term credit facility
established by the Lenders in favour of the Borrowers pursuant to Section
2.1(a).
"CREDIT FACILITY 2" means the revolving term credit facility established by
the Lenders in favour of the Borrowers pursuant to Section 2.1(b).
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"CREDIT FACILITY 3" means the revolving term acquisition credit facility
established by the Lenders in favour of the Borrowers pursuant to Section
2.1(c).
"DEBT" means, at any particular time, with respect to any Company, the
aggregate of the amounts which would, in accordance with generally accepted
accounting principles, be classified on the consolidated balance sheet of
such Company at such time as indebtedness for borrowed money of such
Company (including all obligations of such Company in respect of bankers'
acceptances issued or created for the account of such Company and then
outstanding and in respect of letters of credit and letters of guarantee
issued for the account of such Company and then outstanding) and as capital
leases of such Company.
"DEBT TO EBITDA RATIO" means, for a particular Fiscal Quarter, the ratio of
(i) Debt of Vitran as at the last day of such Fiscal Quarter to (ii)
Rolling EBITDA for such Fiscal Quarter.
"DEFAULT" means any event which is or which, with the passage of time, the
giving of notice or both, would be an Event of Default.
"DEFAULTING LENDER" shall have the meaning ascribed thereto in Section 3.3.
"DESIGNATED ACCOUNT" means, with respect to transactions in a particular
currency under the Credit Facilities, the account of a particular Borrower
maintained by the Agent at the relevant Branch of Account for the purposes
of transactions in such currency under the Credit Facilities.
"DRAFT" means any draft, xxxx of exchange, receipt, acceptance, demand or
other request for payment drawn or issued under or in respect of a Letter.
"DRAWDOWN NOTICE" shall have the meaning ascribed thereto in Section 4.1.
"EBITDA" means, for any particular period, Net Income (excluding, in the
calculation of Net Income, any dividends other than cash dividends received
in the ordinary course from entities in which such Person has an equity
interest which are not directly or indirectly subsidiaries of such Person
provided that such cash dividend amount shall be limited to a maximum of
10% of the EBITDA calculated only in respect of any Person) for such period
plus, to the extent deducted in determining Net Income, the aggregate of
(a) Interest Expenses for such period, (b) consolidated income tax expenses
of Vitran for such period, (c) consolidated depletion, depreciation and
amortization expenses and other non cash expenses of Vitran for such
period, and, provided that for purposes of calculating EBITDA for any
period, the EBITDA during such period attributable to any Acquisition by a
Borrower or any Subsidiary during such period shall be included on a pro
forma basis for such period (assuming the consummation of such Acquisition
and the incurrence or assumption of any Debt in connection therewith
occurred on the first day of such period) provided that such Borrower shall
have provided to the Agent and the Lenders, prior to the completion of the
Acquisition, (i) the most recently available consolidated balance sheet of
the Person that is the subject of such Acquisition (and its consolidated
Subsidiaries) and (ii) the most recently available consolidated statements
of
-8-
income and of cash flows and all such financial statements have been
reviewed and reported on by independent accountants or are otherwise in
form and substance acceptable to the Agent.
"EBITDA TO CAPITAL EXPENDITURES AND INTEREST EXPENSES RATIO" means, for a
particular Fiscal Quarter, the ratio of (i) Rolling EBITDA for such Fiscal
Quarter to (ii) the aggregate of Rolling Interest Expenses and Rolling
Capital Expenditures for such Fiscal Quarter.
"ENVIRONMENTAL LAWS" means all Applicable Law relating in full or in part
to the protection of the environment or human health or relating to the
manufacture, processing, management, distribution, use, collection,
treatment, storage, generation, release, spill, leak, pumping, pouring,
emitting, adding, emptying, injection, escape, leaching, throwing, placing,
exhausting, dumping, spraying, burial, abandonment, incineration, seepage,
placement, emission, deposit, issuance, discharge or disposal, transport,
transfer or handling of any contaminant, pollutant, waste of any nature,
hazardous or toxic substance or material or dangerous good as defined,
judicially interpreted or identified in any Environmental Law or any
substance that causes or may cause harm or degradation to the environment
or injury to human health and includes any condition, circumstance,
pollutant, contaminant, waste, hazardous waste, deleterious, toxic or
hazardous substance or dangerous good present in such quantity or state
that it contravenes any Environmental Laws or gives rise to any losses,
claims, liability or obligation under any Environmental Law.
"ENVIRONMENTAL ORDER" means any order, judgment, ruling, variance, decree,
publication or declaration of or by any Official Body pursuant to any
Environmental Law.
"ENVIRONMENTAL PERMIT" means any authorization, consent, approval, license,
permit, concession, certification, exemption or filing by or with any
Official Body pursuant to any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974 of the
United States, as amended from time to time, and any successor statute and
including all regulations issued under all such statutes.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which any Borrower is a member
and which group is treated as a single employer under Section 414(b) or (c)
of the Code or Section 4001 of ERISA.
"ERISA COMPANIES" means the Borrowers and the ERISA Affiliates and "ERISA
Company" means any of the ERISA Companies.
"EQUITY" means, at any particular time, the amount which would, in
accordance with generally accepted accounting principles, be classified
upon the consolidated balance sheet of Vitran at such time as shareholders'
equity of Vitran.
"EVENT OF DEFAULT" means any one of the events set forth in Section 13.1.
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"EXCHANGE EQUIVALENT" means, as of any particular date, with reference to
any amount (the "ORIGINAL AMOUNT") expressed in either Canadian or United
States dollars (the "ORIGINAL CURRENCY"), the amount expressed in the other
currency which would be required to buy the original amount of the original
currency using the noon spot rate of exchange for Canadian interbank
transactions applied in converting the other currency into the original
currency published by the Agent for such date.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any particular day, the variable
rate of interest per annum, calculated on the basis of a 360-day year and
for the actual number of days elapsed, equal to the weighted average of the
rates on overnight federal funds transactions in United States dollars with
members of the Federal Reserve System arranged by United States federal
funds brokers as published for such day (or, if such day is not a Banking
Day, for the next preceding Banking Day) by the Federal Reserve Bank of New
York or, for any Banking Day on which such rate is not so published by the
Federal Reserve Bank of New York, the average of the quotations for such
day for such transactions received by the Agent from three United States
federal funds brokers of recognized standing selected by the Agent.
"FEE LETTER" means the fee letter dated August 30, 2006 between the Lenders
and the Borrowers and pursuant to which the Borrowers agree to pay certain
fees to the Agent and the Lenders.
"FINANCE PARTIES" means the Agent and the Lenders.
"FINANCIAL STATEMENTS" means the audited consolidated financial statements
of Vitran for the Fiscal Year ending on or about December 31, 2005 and the
unaudited consolidated financial statements of Vitran for the six-month
period ending on or about June 30, 2006.
"FINANCING LEASE" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with generally accepted accounting principles to be capitalized on the
balance sheet of the lessee (including, without limitation, any such lease
forming part of a sale-leaseback transaction).
"FISCAL QUARTER" means any of the three-month periods ending on the last
day of March, June, September or December in each year.
"FISCAL YEAR" means any of the twelve-month periods ending on the last day
of December in each year.
"F.R.S. BOARD" means the Board of Governors of the Federal Reserve System
of the United States or any successor thereto.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means generally accepted
accounting principles in effect in the United States of America from time
to time.
"GUARANTEE" means the second amended and restated guarantee agreement
entered into as of the date hereof by the Guarantors in favour of the Agent
and the Lenders, as the
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same may be amended, modified, supplemented or replaced from time to time,
and pursuant to which the Guarantors jointly and severally guaranteed the
payment and performance of the Secured Obligations of the Borrowers.
"GUARANTORS" means, collectively, Vitran Logistics Limited (formerly The
Freight Connection Canada Inc.), Expediteur T.W. Ltee., 1124708 Ontario
Inc., 1124709 Ontario Inc., Can-Am Logistics Inc., 1098304 Ontario Inc.,
Xxxxx Holdings Inc., Rout-Way Express Lines Ltd./Les Services Routiers
Express Rout Ltee, Southern Express Lines of Ontario Limited, Vitran
Environmental Systems Inc., TW Express, Inc., Borcross LTL Freight Services
Corporation, Vitran Express, Inc., Frontier Transport Corporation, Vitran
Logistics, Inc., Vitran Logistics Corp. (formerly The Freight Connection
Inc.), X.X. Xxxxxxxxxxx, Inc., Kansas Motor Freight Corp., 2022219 Ontario
Inc., Vitran Express West, Inc. and, upon completion of the Transaction,
Target and its Subsidiaries (but only after execution and delivery of an
instrument of adhesion to the Guarantee referred to in Section 11.1(t)(i))
and otherwise any Subsidiaries who become Guarantors pursuant to Section
11.1(o), and "GUARANTOR" means any one of the foregoing.
"HAZARDOUS MATERIALS" means:
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act of the United States, as amended from time to time, or
any successor statute;
(c) any petroleum product, asbestos, polychlorinated biphenyl (PCB),
natural gas, natural gas liquids, liquified natural gas or synthetic
gas usable for fuel;
(d) any material defined as "hazardous waste" pursuant to 40 Code of
Federal Regulations Part 261 or any "hazardous chemical" as defined
pursuant to 29 Code of Federal Regulations Part 1910; or
(e) any pollutant or contaminant or hazardous or toxic chemical, material
or substance within the meaning of any applicable federal, state,
provincial or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or
imposing liability or standards of conduct concerning any hazardous or
toxic waste, substance or material or concerning the environment or
public health, all as in effect on the applicable date.
"INDIVIDUAL COMMITMENT" means, with respect to a particular Lender and a
particular Credit Facility, the amount set forth in Schedule B attached
hereto, as reduced or amended from time to time pursuant to Sections 2.3,
8.3 and 16.6, as the individual commitment of such Lender under such Credit
Facility.
"INTEREST EXPENSES" means, for any period, the amount which would, in
accordance with generally accepted accounting principles, be classified on
the consolidated statement of earnings of Vitran for such period as the
cash interest expense of Vitran (including, without limitation, interest on
amounts under capital leases).
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"INTEREST PERIOD" means, in the case of any LIBOR Loan, the applicable
period for which interest on such Loan shall be calculated pursuant to
Article 7.
"INVENTORY VALUE" means, as of the date of the applicable Borrowing Base
Certificate, the value expressed in Canadian Dollars (or the Exchange
Equivalent thereof) of all inventory owned by the Obligors and held by the
Obligors for sale in the ordinary course of business, valued on the basis
of Vitran's inventory and receivables statement dated as of the month end
that the relevant Borrowing Base Certificate references, prepared in
accordance with generally accepted accounting principles, but in any event
valued at the lower of the Obligors', net purchase cost (FIFO) or
prevailing market value, excluding, however, the value of an inventory of
the Obligors which consists of:
(a) any inventory located outside of the United States or Canada other
than on a temporary basis for testing or promotional purposes;
(b) any inventory (other than inventory in transit) located outside of a
state, province or other jurisdiction in which the Agent has properly
perfected the liens of the Agent on its behalf and on behalf of the
other Lenders under the Security other than on a temporary basis for
testing or promotional purposes;
(c) any inventory which is subject to Liens other than Permitted Liens;
(d) any inventory not in the actual possession of, or in transit to or
from, an Obligor other than on a temporary basis for testing or
promotional purposes;
(e) any inventory in the possession of a bailee, warehouseman, consignee,
processor or similar third party unless the Agent has received a
waiver and consent from such party;
(f) any inventory located on premises leased or rented to an Obligor or
otherwise not owned by an Obligor, unless: (i) the Agent has received
a waiver and consent from the lessor, landlord and/or owner; (ii) such
inventory is located in the Province of Quebec and the landlord of
such premises does not have a legal or conventional hypothec with
respect to such inventory or the relevant Obligor and the Agent has
received a waiver and consent from such landlord in form and substance
satisfactory to the Agent; (iii) a rent reserve representing three
months rent for such premises is deducted from the Inventory Value; or
(iv) the aggregate value of all such inventory not within (i) to (iii)
above represents less than 25% of the total value of inventory, with
"value" being determined as the lower of the relevant Obligor's net
purchase cost (FIFO) or the prevailing market value of the inventory;
(g) any inventory, the sale or other disposition of which has given rise
to an account receivable;
(h) any inventory which is not in good condition or is obsolete or is
defective and unmerchantable;
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(i) following the occurrence of an Event of Default that is continuing,
any inventory which the Agent determines in its reasonable credit
judgment to be ineligible because the Agent and the Lenders feel it
may be impaired or their ability to realize such value may be
insecure; and
(j) inventory in respect of which any of the representations and
warranties set forth in the Security Documents with respect to
inventory is not true and correct in all material respects on such
date.
"ISSUING LENDER" means The Bank of Nova Scotia or any other Lender selected
by the Agent and acceptable to the Borrowers who assumes in writing with
Borrowers, the Lenders and the Agent the obligation of issuing Letters
under Credit Facility 2 on behalf of the Lenders.
"LENDERS" means the Canadian Lenders and the U.S. Lenders and "LENDER"
means any of the Lenders.
"LETTERS" means standby and documentary letters of credit issued by the
Issuing Lender (i) at the request, and on the credit, of the Borrower and
(ii) on behalf of the Borrower and, if applicable, a Subsidiary of the
Borrower, each being denominated in Canadian or United States dollars
having a term of not more than three years, being issued to a named
beneficiary and being otherwise in a form satisfactory to the Issuing
Lender.
"LIBOR" means the interest rate per annum, calculated on the basis of a
360-day year, determined by the Agent for a particular Interest Period to
be the rate of interest per annum, which appears on the Telerate Page 3750
at approximately 11:00 a.m. (London time) two Banking Days before the first
day of such Interest Period for borrowings in United States dollars for a
period comparable to such Interest Period and in an amount approximately
equal to the amount of the LIBOR Loan to be outstanding during such
Interest Period.
"LIBOR LOAN" means monies lent by the Lenders to the Borrowers hereunder in
United States dollars and upon which interest accrues at a rate referrable
to LIBOR.
"LIEN" means any deed of trust, mortgage, charge, hypothec, assignment,
pledge, lien, vendor's privilege, supplier's right of reclamation or other
security interest or encumbrance of whatever kind or nature, regardless of
form and whether consensual or arising by law (statutory or otherwise),
that secures the payment of any indebtedness or liability or the observance
or performance of any obligation.
"LOAN DOCUMENTS" means this agreement, the Fee Letter, the Guarantee and
the Security Documents.
"LOANS" means LIBOR Loans, Base Rate Canada Loans, Base Rate New York
Loans, Prime Rate Loans and BA Rate Loans.
"MAJORITY LENDERS" means, at any particular time, such group of at least
two Lenders which, in the aggregate, have extended at least two-thirds of
the total amount of credit
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outstanding under the Credit Facilities at such time or, if no credit is
then outstanding, such group of at least two Lenders which, in the
aggregate, have Individual Commitments which are equal to at least
two-thirds of the total amount of the Individual Commitments of all of the
Lenders at such time.
"MATERIAL ADVERSE CHANGE" means any change of circumstances or any event
which would have a Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means an adverse effect on the financial
condition or operations of the Borrowers on a consolidated basis which,
individually or as part of a series of adverse effects, would have a
material adverse effect on the ability of the Borrowers to perform any of
their payment obligations hereunder.
"MATERIAL SUBSIDIARIES" means any Subsidiary whose total assets (as
recorded on its consolidated balance sheet in accordance with generally
accepted accounting principles) exceed 5% of the total assets of Vitran and
its Subsidiaries on a consolidated basis (as recorded on Vitran's
consolidated balance sheet in accordance with generally accepted accounting
principles).
"MATURITY DATE" means September 30, 2009.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any ERISA Company is making or accruing an
obligation to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make contributions.
"NATIONAL CITY BANK INDEBTEDNESS" means the Indebtedness of the Target to
National City Bank of Pennsylvania with respect to a U.S.$4,187,000 secured
term loan maturing September 1, 2010 to be provided by National City Bank
of Pennsylvania to the Target and otherwise on terms satisfactory to the
Lenders.
"NATIONAL CITY BANK LOAN DOCUMENTS" means the credit, guarantee and
security documentation which evidences the National City Bank Indebtedness
and the guarantees thereof and the security therefor, in form and substance
satisfactory to the Lenders.
"NET INCOME" means, for any period, the amount which would, in accordance
with generally accepted accounting principles, be classified on the
consolidated statement of earnings of Vitran for such period as the net
income of Vitran, before extraordinary or unusual items.
"OBLIGORS" means, collectively but without duplication, the Borrowers and
the Guarantors.
"OFFICIAL BODY" means any national government or government of any
political subdivision thereof, or any agency, authority, board, central
bank, monetary authority, commission, department or instrumentality
thereof, or any court, tribunal, grand jury, mediator or arbitrator,
whether foreign or domestic, or any non-governmental regulating
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authority to the extent that the rules, regulations and orders of such body
have the force of law.
"ORDER" means an order, judgment, injunction or other determination by an
Official Body restricting payment by the Issuing Lender under and in
accordance with a Letter or extending the Issuing Lender's liability under
a Letter beyond the expiration date stated therein.
"OVERDRAFT LENDER" means The Bank of Nova Scotia or any other Lender
selected by the Agent and acceptable to the Borrowers who assumes in
writing with the Borrowers, the Lenders and the Agent the obligation of
making Overdraft Loans under Credit Facility 2.
"OVERDRAFT LOAN" shall have the meaning ascribed thereto in Section
3.13(a).
"PBGC" means Pension Benefit Guaranty Corporation.
"PERMITTED DEBT" means, with respect to the Companies:
(a) indebtedness of the Borrowers under this agreement;
(b) accounts payable and accrued liabilities incurred by the Companies in
the ordinary course of business;
(c) indebtedness of the Companies which is secured by a Permitted Lien;
(d) indebtedness of any Company to an affiliate of such Company;
(e) until September 1, 2010, the National City Bank Indebtedness in a
principal amount not exceeding U.S.$4,200,000; and
(f) other indebtedness of any of the Companies approved by the Lenders.
"PERMITTED DISPOSITION" means (i) any sale, lease or other disposition of
the shares or assets of ___________________________________________________
or (ii) the sale, lease or other disposition by Vitran Express of the lands
described in Certificate of Title Nos. 1360918, 1357053 and 1357051 of the
Winnipeg Land Titles Office in respect of which the Agent has been granted
a mortgage in form and substance satisfactory to the Lenders, (iii) the
sale, lease or other disposition by the Target of any of the Surplus
Properties at fair market value and (iv) any other disposition of assets of
any of the Companies out of the ordinary course of business which is
expressly consented to in writing by all of the Lenders.
"PERMITTED LIENS" means any one or more of the following with respect to
the assets of the Companies:
(a) inchoate or statutory Liens for Taxes, assessments and other
governmental charges or levies which are not delinquent (taking into
account any relevant grace
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periods) or the validity of which are currently being contested in
good faith by appropriate proceedings and in respect of which there
shall have been set aside a reserve (segregated to the extent required
by generally accepted accounting principles) in an amount which is
adequate therefor;
(b) inchoate or statutory Liens of contractors, subcontractors, mechanics,
workers, suppliers, materialmen, carriers and others in respect of
construction, maintenance, repair or operation of assets of the
Companies, provided that such Liens are related to obligations not due
or delinquent (taking into account any applicable grace or cure
periods), are not registered as encumbrances against title to any
assets of the Companies and adequate holdbacks are being maintained as
required by applicable legislation or such Liens are being contested
in good faith by appropriate proceedings and in respect of which there
shall have been set aside a reserve (segregated to the extent required
by generally accepted accounting principles) in an amount which is
adequate with respect thereto and provided further that such Liens do
not in the aggregate materially detract from the value of the assets
of the Companies encumbered thereby or materially interfere with the
use thereof in the operation of the business of the Companies;
(c) easements, rights-of-way, servitudes, restrictions and similar rights
in real property comprised in the assets of the Companies or interests
therein granted or reserved to other persons, provided that such
rights do not in the aggregate materially detract from the value of
the assets of the Companies subject thereto or materially interfere
with the use thereof in the operation of the business of the
Companies;
(d) title defects or irregularities which are of a minor nature and which
do not in the aggregate materially detract from the value of the
assets of the Companies encumbered thereby or materially interfere
with the use thereof in the operation of the business of the
Companies;
(e) Liens incidental to the conduct of the business or the ownership of
the assets of the Companies (other than those described in clauses (f)
and (g) of this definition) which were not incurred in connection with
the borrowing of money or the obtaining of advances or credit
(including, without limitation, unpaid purchase price), and which do
not in the aggregate materially detract from the value of the assets
of the Companies encumbered thereby or materially interfere with the
use thereof in the operation of the business of the Companies;
(f) Liens securing appeal bonds and other similar Liens arising in
connection with court proceedings (including, without limitation,
surety bonds, security for costs of litigation where required by law
and letters of credit) or any other instruments serving a similar
purpose;
(g) attachments, judgments and other similar Liens arising in connection
with court proceedings; provided, however, that such Liens are in
existence for less than 30 days after the entry therefor or the
execution or other enforcement of such Liens is
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effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(h) the reservations, limitations, provisos and conditions, if any, (i)
expressed in any original grant from the Crown of any real property or
(ii) any interest therein or in any comparable grant in jurisdictions
other than Canada;
(i) Liens, charges or other security interests given to a public utility
or any municipality or governmental or other public authority when
required by such utility or other authority in connection with the
operation of the business or the ownership of the assets of the
Companies, provided that such Liens do not in the aggregate reduce the
value of the assets of the Companies or materially interfere with the
use thereof in the operation of the business of the Companies;
(j) servicing agreements, development agreements, site plan agreements,
and other agreements with governmental or public authorities
pertaining to the use or development of any of the assets of the
Companies, provided same are complied with including, without
limitation, any obligations to deliver letters of credit and other
security as required;
(k) applicable municipal and other governmental restrictions, including
municipal by-laws and regulations, affecting the use of land or the
nature of any structures which may be erected thereon, provided such
restrictions have been complied with;
(l) Purchase Money Obligations arising in the ordinary course of business
and in an aggregate outstanding principal amount not exceeding
US$15,000,000 or the Canadian Dollar Equivalent thereof, where
"Purchase Money Obligations" means any Lien created, issued or assumed
by the Companies to secure indebtedness assumed as part of, or issued
or incurred to pay or provide funds to pay, all or a part of the
purchase price of any property, provided that such Lien is limited to
the property so acquired and is created, issued or assumed
substantially concurrently with the acquisition of such property and
provided that such property is not a replacement of a similar asset
owned or held by a Company prior to the date of such acquisition;
(m) Liens identified in Schedule G hereto;
(n) the right reserved to or vested in any Official Body by any statutory
provision, or by the terms of any lease, licence, franchise, grant or
permit of any of the Companies, to terminate any such lease, licence,
franchise, grant or permit, or to require annual or other payments as
a condition to the continuance thereof;
(o) Liens existing on any asset at the time of its acquisition provided
that such asset is not a replacement of a similar asset owned or held
by a Company prior to the date of such acquisition;
(p) the Security;
-17-
(q) Financing Leases of the Target which exist as of the completion of the
Transaction in an aggregate amount not exceeding US$25,000,000; and
(r) the extension, renewal or refinancing of any of the foregoing
Permitted Liens, unless specifically provided otherwise and provided
that the amount so secured does not exceed the original amount secured
immediately prior to such extension, renewal or refinancing.
"PERSON" means any natural person, corporation, firm, partnership, joint
venture, joint stock company, incorporated or unincorporated association,
government, governmental agency or any other entity, whether acting in an
individual, fiduciary or other capacity.
"PRIME RATE" means the greater of (a) the variable rate of interest per
annum equal to the rate of interest determined by the Agent from time to
time as the prime rate of the Agent for Canadian dollar loans made by the
Agent in Canada from time to time, being a variable per annum reference
rate of interest adjusted automatically upon change by the Agent,
calculated on the basis of a year of 365 days or 366 days in the case of a
leap year and (b) the sum of (i) the average rate per annum for Canadian
dollar bankers' acceptances for Reference Lenders having a term of 30 days
that appears on the Reuters Screen CDOR Page as of 10:00 a.m. (Toronto
time) on the date of determination, as reported by the Agent and (ii) 5/8
of 1% per annum.
"PRIME RATE LOAN" means monies lent by the Canadian Lenders to a Canadian
Borrower hereunder in Canadian dollars and upon which interest accrues at a
rate referrable to the Prime Rate.
"PRIOR CLAIMS" means, at any time, all obligations secured by Liens created
by or arising under Applicable Law which rank, or are capable of ranking,
prior to or pari passu with the Security against all or part of the
Security including any such amounts owing in respect of vacation pay,
employee deductions and contributions, retail and other sales taxes, goods
and services taxes, Quebec corporate taxes, business taxes, realty taxes,
workers' compensation levies, pension plan or fund obligations and overdue
rents (to the extent, in the case of rents, that such rents are not already
the subject of a reserve pursuant to the definition of Inventory Value).
"PRO RATA SHARE" means (i) at any particular time with respect to a
particular Lender and referable to a particular Credit Facility, the ratio
of the Individual Commitment of such Lender with respect to such Credit
Facility at such time to the aggregate of the Individual Commitments of all
of the Lenders with respect to such Credit Facility at such time or (ii) at
any particular time with respect to a particular Lender but not referable
to a particular Credit Facility, the ratio of the aggregate of the
Individual Commitments of such Lender with respect to all Credit Facilities
at such time to the aggregate of the Individual Commitments of all of the
Lenders with respect to all Credit Facilities at such time.
"PROCEEDS OF REALIZATION" means all cash and non-cash proceeds derived from
any sale, disposition or other realization of the Secured Assets (i) after
any notice by the Agent to the Borrowers pursuant to Section 13.1 declaring
all indebtedness of the Borrowers
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hereunder to be immediately due and payable, (ii) upon any dissolution,
liquidation, winding-up, reorganization, bankruptcy, insolvency or
receivership of any of the Obligors (or any other arrangement or
marshalling of the Secured Assets that is similar thereto) or (iii) upon
the enforcement of, or any action taken with respect to, any of the
Security Documents or the Guarantee. For greater certainty, prior to the
Security becoming enforceable (x) insurance proceeds derived as a result of
the loss or destruction of any of the Secured Assets or (y) cash or
non-cash proceeds derived from any expropriation or other condemnation of
any of the Secured Assets shall not constitute Proceeds of Realization.
"PROPERTY" means all of the property owned, operated or used by the
Companies.
"PURCHASE AGREEMENTS" means the Asset Purchase Agreement and the Share
Purchase Agreement.
"QUALIFIED ENVIRONMENTAL CONSULTANT" means an environmental consultant
which is qualified and recognized as such in the geographic area in which
the related property is located.
"RECEIVABLES VALUE" means, as of the date of the applicable Borrowing Base
Certificate, the amount expressed in Canadian Dollars (or the Exchange
Equivalent thereof) of the invoice amounts owing on each account of an
Obligor valued on the basis of an Obligor inventory and receivables
statement dated as of the month end that the relevant Borrowing Base
Certificate references, prepared in accordance with generally accepted
accounting principles, and for which each of the following statements is
accurate:
(a) such amount is a binding and valid obligation of the obligor
thereunder and is in full force and effect;
(b) such account is genuine on its face or is represented in the books and
records of the relevant Obligor;
(c) such account is free from valid and asserted claims regarding set-off,
holdback, rescission, cancellation or avoidance, whether by operation
of law or otherwise provided that if such account is not free from
such claims it shall only be excluded to the extent of any such
claims;
(d) (x) payment of such account is due and is less than 90 days past the
issuance date of the invoice therefor or (y) such account is an
account described in clause (h)(z) of this definition;
(e) such account is an asset of the relevant Obligor and the Agent, on
behalf of itself and the other Lenders, has a first-priority perfected
lien on such account;
(f) such amount arose in the ordinary course of business of the relevant
Obligor;
(g) the obligor on such account is not the subject of, or made a party to,
any bankruptcy or insolvency proceeding, has not had a trustee or
receiver appointed
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for it or any part of its property, has not made an assignment for the
benefit of creditors, has not admitted its inability to pay its debts
as they mature, has not suspended its business and has not become
insolvent;
(h) (x) the obligor of such account is subject to the jurisdiction of
federal, state or provincial courts in Canada or the United States or
(y) such account is supported by a letter of credit issued by a Person
with a minimum credit rating of A- from Standard & Poor's or the
equivalent rating from Xxxxx'x Investors Service, Inc. or by insurance
provided by Export Development Corporation, Export-Import Bank of the
United States or any similar agencies approved from time to time by
the Lenders, in each case in a form that is acceptable to the Agent
acting reasonably;
(i) in the case of the sale of goods, the subject goods have been sold to
an obligor on a true sale basis on open account, or subject to
contract, and not on consignment, or approval or on a "sale or return"
basis or subject to any other repurchase or return agreement, no
material part of the subject goods has been returned, rejected, loss
or damaged, and such account is not evidenced by an instrument of any
kind unless such instrument has been pledged by way of delivery to the
Agent; and
(j) each of the representations and warranties set forth in the Security
Documents with respect to such account is true and correct in all
material respects on such date.
"RECEIVER" means a receiver, receiver and manager or other Person having
similar powers or authority appointed by the Agent or by a court at the
instance of the Agent in respect of the Secured Assets or any part thereof.
"REFERENCE LENDERS" means The Bank of Nova Scotia.
"RELEASE" means a "release", as such term is defined in CERCLA.
"REVOLVING FACILITIES" means, collectively, Credit Facility 2 and Credit
Facility 3 and "REVOLVING FACILITY" means either one of the foregoing.
"ROLLING CAPITAL EXPENDITURES" means, for any Fiscal Quarter, the aggregate
of Capital Expenditures for such Fiscal Quarter and for each of the three
immediately preceding Fiscal Quarters.
"ROLLING EBITDA" means, for any Fiscal Quarter, the aggregate of EBITDA for
such Fiscal Quarter and for each of the three immediately preceding Fiscal
Quarters.
"ROLLING INTEREST EXPENSES" means, for any Fiscal Quarter, the aggregate of
Interest Expenses for such Fiscal Quarter and for each of the three
immediately preceding Fiscal Quarters.
"ROLLOVER NOTICE" shall have the meaning ascribed thereto in Section 5.3.
-20-
"SECOND AMENDED AND RESTATED CREDIT AGREEMENT" shall have the meaning
ascribed thereto in the third recital hereto.
"SECURED ASSETS" means the present and future property, assets and
undertakings of the Obligors.
"SECURED OBLIGATIONS" shall mean all indebtedness, obligations and
liabilities, present or future, absolute or contingent, matured or not, at
any time owing by any of the Obligors to the Agent and the Lenders, or
remaining unpaid to the Agent and the Lenders, under or in connection with
any of the Loan Documents and Secured Obligations of a particular Obligor
shall mean all indebtedness, obligations and liabilities, present or
future, absolute or contingent, matured or not, at any time owing by such
Obligor to the Agent and the Lenders, or remaining unpaid to the Agent and
the Lenders, under or in connection with any of the Loan Documents to which
such Obligor is a party.
"SECURITY" means the collateral security constituted by the Security
Documents.
"SECURITY DOCUMENTS" shall mean the security documents (as the same may be
amended, modified, supplemented, restated or replaced from time to time)
which, in the reasonable opinion of the Agent, are required to be entered
into from time to time by the Obligors in favour of the Agent for the
benefit of the Lenders in order to grant directly or indirectly to the
Agent a Lien on the Secured Assets as continuing collateral security for
the payment and performance of the Secured Obligations, such security
documents to be in form and substance satisfactory to the Agent and to
include, without limitation, the security documents described in Schedule
N.
"SHARE PURCHASE AGREEMENT" means the share purchase agreement to be entered
into between the shareholders of the Target named therein, as seller, and
the U.S. Borrower, as purchaser, and Vitran and pursuant to which the U.S.
Borrower proposes to purchase all of the issued and outstanding shares in
the capital of the Target substantially on the terms set out in the draft
of such share purchase agreement dated September 19, 2006, a copy of which
has been provided to the Agent, or as otherwise agreed to by the Lenders.
"SUBSIDIARIES" means any corporation, partnership, joint venture, or other
entity of which more than 50% of the outstanding voting capital stock or
other ownership interest (irrespective of whether or not at the time
capital stock or other equity interest of any other class or classes of
such corporation, partnership, joint venture, or other entity shall or
might have voting power upon the happening of any contingency) is at the
time owned directly or indirectly by any of the Borrowers; provided that no
corporation shall be deemed a Subsidiary until the applicable Borrower
directly or indirectly acquires more than 50% of the outstanding voting
stock thereof and has elected a majority of its board of directors.
"SURPLUS PROPERTIES" means the lands and buildings of Target located at the
following municipal addresses and the corresponding lands and buildings, if
applicable, of the U.S. Borrower located at the following corresponding
municipal addresses:
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PROPERTIES OF TARGET PROPERTIES OF THE U.S. BORROWER
-------------------- -------------------------------
0000 Xxxxx Xxxx Xxxx, X/X
Xxxxxxxxxxxx, XX 00000
0000 Xxxxxxx Xxxxxx, 0000 X. 000xx Xxxxxx,
Xxxxxxxxx, XX 00000 Xxxxx Xxxx, XX 00000
00000 Xxxxx Xxxx, 0000 Xxxxxxxxx,
Xxxxxxxxx, XX 00000 Xxxxxx, XX 00000
0000 Xxxxxxx Xxxxx, 000 Xxxxxx Xxxxxx,
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
0000 Xxxxxxxxxx Xxxx, 0000 Xxxx Xxxx,
Xxxxxxxxxx, XX 00000 Xxxxxxxxxxxxxx, XX 00000
0000 Xxxxxxxx Xxxxx, X/X
Xxxx Xxxxx, XX 00000
provided that upon the sale, lease or other disposition of a Surplus
Property, the corresponding property, if applicable, shall thereupon cease
to be a Surplus Property.
"TARGET" means PJAX, Inc., a corporation incorporated under the laws of the
Commonwealth of Pennsylvania.
"TARGET PROPERTIES" means the properties listed on Schedule H under the
heading "Target".
"TAX ACT" means the Income Tax Act (Canada), as amended from time to time,
and regulations promulgated thereunder.
"TAXES" means all taxes, charges, fees, levies, imposts and other
assessments, including all income, sales, use, goods and services, value
added, capital, capital gains, alternative, net worth, transfer, profits,
withholding, payroll, employer health, excise, real property and personal
property taxes, and any other taxes, customs duties, fees, assessments, or
similar charges in the nature of a tax including Canada Pension Plan and
provincial pension plan contributions, unemployment insurance payments and
workers' compensation premiums, together with any instalments with respect
thereto, and any interest, fines and penalties with respect thereto,
imposed, levied, collected, withheld or assessed by any Official Body
(including federal, state, provincial, municipal and foreign Official
Bodies), and whether disputed or not.
"TRANSACTION" means the purchase of all of the issued and outstanding
shares in the capital of the Target by the U.S. Borrower pursuant to the
Share Purchase Agreement and, immediately thereafter, the purchase of the
Target Properties by the Target pursuant to the Asset Purchase Agreement.
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"TRANSFEREE" shall have the meaning ascribed thereto in Section 16.6(d).
"US$" means the lawful currency of the United States of America.
"U.S. BRANCH OF ACCOUNT" means the Atlanta Agency of the Agent located at
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, or such
other office of the Agent located in the United States as the U.S. Borrower
and the Agent may agree upon.
"U.S. DOLLAR EQUIVALENT" means the Exchange Equivalent in United States of
any amount of Canadian dollars.
"U.S. LENDERS" means the financial institutions set out and described as
such in Schedule B, as amended from time to time, and their successors and
permitted assigns.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E or Title IV of ERISA.
1.2 OTHER USAGES. References to "this agreement", "the agreement", "hereof",
"herein", "hereto" and like references refer to this Amended and Restated Credit
Agreement and not to any particular Article, Section or other subdivision of
this agreement. Any references herein to any agreements (including, without
limitation, this agreement) or documents shall mean such agreements or documents
as amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms hereof and thereof.
1.3 PLURAL AND SINGULAR. Where the context so requires, words importing the
singular number shall include the plural and vice versa.
1.4 HEADINGS. The division of this agreement into Articles and Sections and the
insertion of headings in this agreement are for convenience of reference only
and shall not affect the construction or interpretation of this agreement.
1.5 CURRENCY. Unless otherwise specified herein, all statements of or references
to dollar amounts in this agreement shall mean lawful money of the United States
of America.
1.6 APPLICABLE LAW. This agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein. Any legal action or proceeding with respect to this
agreement may be brought in the courts of the Province of Ontario and, by
execution and delivery of this agreement, the parties hereby accept for
themselves and in respect of their property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts. Each party irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such party to the address prescribed by
Section 16.2, such service to become effective when received. Nothing herein
shall limit the right of any party to serve process in any manner permitted by
law or to commence legal proceedings or otherwise proceed against any other
party in any other jurisdiction.
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1.7 TIME OF THE ESSENCE. Time shall in all respects be of the essence of this
agreement.
1.8 NON BANKING DAYS. Subject to Section 7.4(c), whenever any payment to be made
hereunder shall be stated to be due or any action to be taken hereunder shall be
stated to be required to be taken on a day other than a Banking Day, such
payment shall be made or such action shall be taken on the next succeeding
Banking Day and, in the case of the payment of any amount, the extension of time
shall be included for the purposes of computation of interest, if any, thereon.
1.9 CONSENTS AND APPROVALS. Whenever the consent or approval of a party hereto
is required in a particular circumstance, unless otherwise expressly provided
for herein, such consent or approval shall not be unreasonably withheld or
delayed by such party.
1.10 AMOUNT OF CREDIT. Any reference herein to the "amount of credit
outstanding" or "outstanding amount of credit" or any similar phrase shall mean,
at any particular time:
(a) in the case of a Prime Rate Loan or a BA Rate Loan, the U.S. Dollar
Equivalent of the principal amount thereof;
(b) in the case of a Bankers' Acceptance, the U.S. Dollar Equivalent of
the face amount of the Bankers' Acceptance;
(c) in the case of a Base Rate Canada Loan, a Base Rate New York Loan or a
LIBOR Loan, the principal amount thereof;
(d) in the case of a Letter denominated in Canadian dollars, the U.S.
Dollar Equivalent of the contingent liability of the Issuing Lender
thereunder at such time; and
(e) in the case of a Letter denominated in United States dollars, the
contingent liability of the Issuing Lender thereunder at such time.
1.11 SCHEDULES. Each and every one of the schedules which is referred to in this
agreement and attached to this agreement shall form a part of this agreement.
1.12 EXTENSION OF CREDIT. For the purposes hereof, each drawdown, rollover and
conversion shall be deemed to be an extension of credit to the Borrowers
hereunder.
1.13 JOINT AND SEVERAL OBLIGATIONS. All obligations hereunder which are stated
to be obligations of the Borrowers or either one of them shall, to the extent
permitted by applicable law, be joint and several obligations of the Borrowers.
1.14 PARAMOUNTCY. In the event of any conflict or inconsistency between the
provisions of this agreement and the provisions of any other Loan Document, the
provisions of this agreement shall prevail and be paramount. If any covenant,
representation, warranty or event of default contained in any other Loan
Document is in conflict with or is inconsistent with a provision of this
agreement relating to the same specific matter, such covenant, representation,
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warranty or event of default shall be deemed to be amended to the extent
necessary to ensure that it is not in conflict with or inconsistent with the
provision of this agreement relating to the same specific matter.
1.15 STATUTE REFERENCES. Any reference in this agreement to any statute or any
section thereof shall, unless otherwise expressly stated, be deemed to be a
reference to such statute or section as amended, restated or re-enacted from
time to time.
1.16 MEANING OF INCLUDE. The words "include", "includes" and "including", when
used in this agreement, shall be deemed to be followed by the phrase "without
limitation".
ARTICLE 2
CREDIT FACILITIES
2.1 ESTABLISHMENT OF CREDIT FACILITIES. Subject to the terms and conditions
hereof, the Lenders hereby establish in favour of the Borrowers:
(a) a non-revolving term credit facility ("CREDIT FACILITY 1") in the
amount of US$80,000,000 or the Canadian Dollar Equivalent thereof;
(b) a revolving term credit facility ("CREDIT FACILITY 2") in the amount,
from time to time, equal to the lesser of US$60,000,000 or the
Canadian Dollar Equivalent thereof and the Borrowing Base; and
(c) a revolving term acquisition facility ("CREDIT FACILITY 3") in the
amount, from time to time, equal to US$20,000,000 or the Canadian
Dollar Equivalent thereof.
2.2 CREDIT RESTRICTIONS. Notwithstanding any other provision hereof, (i) the
Borrowers shall be entitled to obtain credit by way of LIBOR Loans or Bankers'
Acceptances only in such amounts so as to ensure that the Lenders are not
required to make a LIBOR Loan for a principal amount other than US$200,000 or an
integral multiple of US$100,000 in excess thereof or to accept a Bankers'
Acceptance having a face amount other than CDN$500,000 or an integral multiple
of CDN$1,000 in excess thereof and (ii) the U.S. Borrower shall not, with
respect to any particular Credit Facility, be entitled to avail itself of
anymore than 90.625% of the applicable limit set forth in Section 2.1 in respect
of any such particular Credit Facility.
2.3 LENDERS' COMMITMENTS. Subject to the terms and conditions hereof, the
Lenders severally agree to extend credit to the Borrowers hereunder from time to
time provided that the aggregate amount of credit extended by each Lender under
the Credit Facilities shall not at any time exceed the Individual Commitment of
such Lender and further provided that the aggregate amount of credit outstanding
under the Credit Facilities shall not at any time exceed the amount of the
Credit Facilities referred to in Section 2.1 as the same may be reduced pursuant
to Section 2.4. All credit requested under the Credit Facilities by a particular
Borrower shall be made available to such Borrower contemporaneously by all of
the Lenders who have made an Individual Commitment with respect to such Credit
Facility. Each such Lender shall provide to the applicable Borrower its Pro Rata
Share of each credit under such Credit Facility, whether such credit is extended
by way of drawdown, rollover or conversion. No Lender shall be responsible for
any default by any other Lender in its obligation to provide its Pro Rata Share
of
-25-
any credit nor shall the Individual Commitment of any Lender with respect to any
of the Credit Facilities be increased as a result of any such default of another
Lender. The failure of any Lender to make available to a Borrower its Pro Rata
Share of any credit shall not relieve any other Lender of its obligation
hereunder to make available to such Borrower its Pro Rata Share of such credit.
Notwithstanding any other provision hereof, the Agent is authorized by the
Borrowers and the Lenders to allocate amongst the Lenders the Bankers'
Acceptances to be issued and the LIBOR Loans to be advanced under the Credit
Facilities in such manner and amounts as the Agent may, in its sole and
unfettered discretion acting reasonably, consider necessary, rounding up or
down, so as to ensure that no Lender is required to accept a Bankers' Acceptance
for a fraction of CDN$100,000 or advance a LIBOR Loan for a fraction of
US$200,000 and, in such event, the Lenders' Pro Rata Shares with respect to such
Bankers' Acceptances and LIBOR Loans shall be adjusted accordingly. It is
acknowledged that such rounding may result in a Lender's Pro Rata Share with
respect to such Bankers' Acceptances and LIBOR Loans exceeding its Individual
Commitment.
2.4 REDUCTION OF CREDIT FACILITIES. The Borrowers may, from time to time and at
any time, by 5 Banking Days notice in writing to the Agent, permanently reduce
any Credit Facility to the extent it is not utilized, provided, however, that
any such permanent reduction of the amount of such Credit Facility shall be by
an amount of no less than US$2,000,000 and otherwise in multiples of US$500,000.
The amount of Credit Facility 1 will be permanently reduced at the time of and
by the amount of each scheduled repayment pursuant to Section 9.1 and any
prepayment pursuant to Sections 9.3 and 9.4. Any prepayment of a Revolving
Facility shall not cause a reduction in the amount of such Credit Facility. Any
repayment of outstanding credit which forms part of any conversion from one type
of credit to another type of credit under Article 3 or Article 6 shall not cause
any reduction in the amount of the applicable Credit Facility. Upon any
reduction in the amount of any Credit Facility, the Individual Commitment of
each Lender with respect to such Credit Facility shall thereupon be reduced by
an amount equal to such Lender's Pro Rata Share of the amount of such reduction
in the amount of such Credit Facility.
2.5 TERMINATION OF CREDIT FACILITIES.
(a) A Credit Facility shall terminate upon the earliest to occur of:
(i) the Maturity Date;
(ii) the termination of such Credit Facility in accordance with
Section 13.1; and
(iii) the date on which the relevant Credit Facility has been
permanently reduced to zero pursuant to Section 2.4.
(b) Upon the termination of any Credit Facility, the right of the
Borrowers to obtain or maintain credit under such Credit Facility and
all of the obligations of the Lenders to make credit available under
such Credit Facility shall automatically terminate.
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ARTICLE 3
GENERAL PROVISIONS RELATING TO CREDITS
3.1 TYPES OF CREDIT AVAILMENTS. Subject to the terms and conditions hereof:
(a) each Canadian Borrower may obtain credit under the Credit Facility 1
and Credit Facility 3 from the Canadian Lenders through the Canadian
Branch of Account by way of one or more Prime Rate Loans, BA Rate
Loans, Base Rate Canada Loans, LIBOR Loans and Bankers' Acceptances;
(b) each Canadian Borrower may obtain credit under the Credit Facility 2
from the Canadian Lenders through the Canadian Branch of Account by
way of one or more Prime Rate Loans, BA Rate Loans, Base Rate Canada
Loans, LIBOR Loans, Bankers' Acceptances and Letters;
(c) the U.S. Borrower may obtain credit under Credit Facility 1 and Credit
Facility 3 from the U.S. Lenders through the U.S. Branch of Account by
way of one or more Base Rate New York Loans and LIBOR Loans; and
(d) the U.S. Borrower may obtain credit under Credit Facility 2 from the
U.S. Lenders through the U.S. Branch of Account by way of one or more
Base Rate New York Loans, LIBOR Loans and U.S. dollar denominated
Letters.
Any extension of credit hereunder by way of one or more Letters shall not exceed
in the aggregate US$20,000,000 or the Exchange Equivalent thereof.
3.2 FUNDING OF LOANS. Each Lender which has made an Individual Commitment under
a particular Credit Facility shall make available to the Agent its Pro Rata
Share of the principal amount of each Loan under such Credit Facility, in the
appropriate currency, prior to 11:00 a.m. (Toronto time) on the date of the
extension of credit. The Agent shall, upon fulfilment by the Borrowers of the
terms and conditions set forth in Article 12, make such funds available to the
applicable Borrower on the date of the extension of credit by crediting the
relevant Designated Account (or causing such account to be credited) unless
otherwise irrevocably authorized and directed in the Drawdown Notice. Unless the
Agent has been notified by a Lender at least two Banking Days prior to the date
of the extension of credit that such Lender will not make available to the Agent
its Pro Rata Share of such Loan, the Agent may assume that such Lender has made
such portion of the Loan available to the Agent on the date of the extension of
credit in accordance with the provisions hereof and the Agent may, in reliance
upon such assumption, make available to the applicable Borrower on such date a
corresponding amount. If the Agent has made such assumption, to the extent such
Lender shall not have so made its Pro Rata Share of the Loan available to the
Agent, such Lender agrees to pay to the Agent, forthwith on demand, such
Lender's Pro Rata Share of the Loan and all reasonable costs and expenses
incurred by the Agent in connection therewith together with interest thereon at
the rate payable hereunder by such Borrower in respect of such Loan for each day
from the date such amount is made available to such Borrower until the date such
amount is paid or repaid to the Agent; provided, however, that notwithstanding
such obligation, if such Lender fails so to pay, such Borrower shall, without
prejudice to any rights that such Borrower
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might have against such Lender, repay such amount to the Agent forthwith after
demand therefor by the Agent. The amount payable to the Agent pursuant hereto
shall be set forth in a certificate delivered by the Agent to such Lender and
the Borrowers (which certificate shall contain reasonable details of how the
amount payable is calculated) and shall constitute prima facie evidence of such
amount payable. If such Lender makes the payment to the Agent required herein,
the amount so paid shall constitute such Lender's Pro Rata Share of the Loan for
purposes of this agreement and shall entitle the Lender to all rights and
remedies against the Borrowers in respect of such Loan. The failure of any
Lender to make available to the Agent its Pro Rata Share of a Loan shall not
relieve any other Lender of its obligation hereunder to make available to the
Agent its Pro Rata Share of the Loan on the date of the credit.
3.3 FAILURE OF LENDER TO FUND LOAN. If any Lender fails to make available to the
Agent its Pro Rata Share of any Loan as required (such Lender being herein
called the "DEFAULTING LENDER") and the Agent has not funded pursuant to Section
3.2, the Agent shall forthwith give notice of such failure by the Defaulting
Lender to the Borrowers and the other Lenders. The Agent shall then forthwith
give notice to the other Lenders that any Lender may make available to the Agent
all or any portion of the Defaulting Lender's Pro Rata Share of such Loan (but
in no way shall any other Lender or the Agent be obliged to do so) in the place
and stead of the Defaulting Lender. If more than one Lender gives notice that it
is prepared to make funds available in the place and stead of a Defaulting
Lender in such circumstances and the aggregate of the funds which such Lenders
(herein collectively called the "CONTRIBUTING LENDERS" and individually called
the "CONTRIBUTING LENDER") are prepared to make available exceeds the amount of
the advance which the Defaulting Lender failed to make, then each Contributing
Lender shall be deemed to have given notice that it is prepared to make
available its pro rata share of such advance based on the Contributing Lenders'
relative commitments to advance in such circumstances. If any Contributing
Lender makes funds available in the place and stead of a Defaulting Lender in
such circumstances, then the Defaulting Lender shall pay to any Contributing
Lender making the funds available in its place and stead, forthwith on demand,
any amount advanced on its behalf together with interest thereon at the rate
applicable to such Loan from the date of advance to the date of payment, against
payment by the Contributing Lender making the funds available of all interest
received in respect of the Loan from the Borrowers. In addition to interest as
aforesaid, the Borrowers shall pay all amounts owing by the Borrowers to the
Defaulting Lender hereunder to the Contributing Lenders until such time as the
Defaulting Lender pays to the Contributing Lenders all amounts advanced by the
Contributing Lenders on behalf of the Defaulting Lender.
3.4 FUNDING OF BANKERS' ACCEPTANCES.
(a) If the Agent receives from a Canadian Borrower a Drawdown Notice,
Rollover Notice or Conversion Notice requesting a drawdown of, a
rollover of or a conversion into Bankers' Acceptances under a
particular Credit Facility, the Agent shall notify each of the
Canadian Lenders which has made an Individual Commitment under such
Credit Facility prior to 11:00 a.m. (Toronto time) on the second
Banking Day prior to the date of such extension of credit of such
request and of each Canadian Lender's Pro Rata Share of such extension
of credit. The Agent shall also at such time notify the Canadian
Borrowers of each Canadian Lender's Pro Rata Share of such extension
of credit. Each Canadian Lender shall,
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not later than 11:00 a.m. (Toronto time) on the date of each extension
of credit by way of Bankers' Acceptance, accept drafts of the
applicable Canadian Borrower which are presented to it for acceptance
and which have an aggregate face amount equal to such Canadian
Lender's Pro Rata Share of the total extension of credit being made
available by way of Bankers' Acceptances on such date, as advised by
the Agent. Each Canadian Lender shall purchase the Bankers'
Acceptances which it has accepted for a purchase price equal to the BA
Discounted Proceeds therefor. Each Canadian Lender may at any time and
from time to time hold, sell, rediscount or otherwise dispose of any
and all Bankers' Acceptances accepted and purchased by it.
(b) The Canadian Borrowers shall provide for payment to the accepting
Lenders of the face amount of each Bankers' Acceptance at its
maturity, either by payment of such amount or through an extension of
credit hereunder or through a combination of both. The Canadian
Borrowers hereby waive presentment for payment of Bankers' Acceptances
by the Canadian Lenders and any defence to payment of amounts due to a
Lender in respect of a Bankers' Acceptance which might exist by reason
of such Bankers' Acceptance being held at maturity by the Canadian
Lender which accepted it and agrees not to claim from such Canadian
Lenders any days of grace for the payment at maturity of Bankers'
Acceptances.
(c) In the case of a drawdown by way of Bankers' Acceptance, each Canadian
Lender shall, forthwith after the acceptance of drafts of the
applicable Canadian Borrower as aforesaid, make available to the Agent
the BA Proceeds with respect to the Bankers' Acceptances accepted by
it. The Agent shall, upon fulfilment by the Canadian Borrowers of the
terms and conditions set forth in Article 12, make such BA Proceeds
available to the applicable Canadian Borrower on the date of such
extension of credit by crediting the Designated Account. In the case
of a rollover of or conversion into Bankers' Acceptances, each
Canadian Lender shall retain the Bankers' Acceptance accepted by it
and shall not be required to make any funds available to the Agent for
deposit to the Designated Account; however, forthwith after the
acceptance of drafts of the applicable Canadian Borrower as aforesaid,
the Canadian Borrowers shall pay to the Agent on behalf of such
Canadian Lenders an amount equal to the aggregate amount of the
acceptance fees in respect of such Bankers' Acceptances calculated in
accordance with Section 7.5 plus the amount by which the aggregate
face amount of such Bankers' Acceptances exceeds the aggregate BA
Discounted Proceeds with respect thereto.
(d) Any Bankers' Acceptance may, at the option of a particular Canadian
Borrower, be executed in advance by or on behalf of such Canadian
Borrower (as otherwise provided herein), by mechanically reproduced or
facsimile signatures of any two officers of such Canadian Borrower who
are properly so designated and authorized by such Canadian Borrower
from time to time. Any Bankers' Acceptance so executed and delivered
by such Canadian Borrower to the Canadian Lenders shall be valid and
shall bind such Canadian Borrower and may be dealt with by the
Canadian Lenders to all intents and purposes as if the Bankers'
Acceptance had been signed in the executing officers' own handwriting.
-29-
(e) Each Canadian Borrower shall notify the Canadian Lenders as to those
officers whose signatures may be reproduced and used to execute
Bankers' Acceptances in the manner provided in Section 3.4(d) Bankers'
Acceptances with the mechanically reproduced or facsimile signatures
of designated officers may be used by the Canadian Lenders and shall
continue to be valid, notwithstanding the death, termination of
employment or termination of authorization of either or both of such
officers or any other circumstance until such time as such Canadian
Borrower shall otherwise notify the Canadian Lenders.
(f) The Canadian Borrowers hereby indemnify and agree to hold harmless the
Canadian Lenders against and from all losses, damages, expenses and
other liabilities caused by or attributable to the use of the
mechanically reproduced or facsimile signature instead of the original
signature of an authorized officer of the applicable Canadian Borrower
on a Banker's Acceptance prepared, executed, issued and accepted
pursuant to this agreement, except to the extent determined by a court
of competent jurisdiction to be due to the negligence or wilful
misconduct of the Canadian Lenders.
(g) Each of the Canadian Lenders agrees that, in respect of the
safekeeping of executed depository bills of the Canadian Borrowers
which are delivered to it for acceptance hereunder, it shall exercise
the same degree of care which it gives to its own property, provided
that it shall not be deemed to be an insurer thereof.
(h) All Bankers' Acceptances shall be issued in the form of depository
bills made payable originally to and deposited with The Canadian
Depository for Securities Limited pursuant to the Depository Bills and
Notes Act (Canada).
(i) In order to facilitate the issuance of Bankers' Acceptances pursuant
to this agreement, each Canadian Borrower hereby authorizes each
Canadian Lender, and appoints each Canadian Lender as such Canadian
Borrower's attorney, to complete, sign and endorse drafts or
depository bills (each such executed draft or xxxx being herein
referred to as a "BA DRAFT") on its behalf in handwritten form or by
facsimile or mechanical signature or otherwise in accordance with the
applicable Drawdown Notice, Rollover Notice or Conversion Notice and,
once so completed, signed and endorsed to accept them as Bankers'
Acceptances under this agreement and then if applicable, purchase,
discount or negotiate such Bankers' Acceptances in accordance with the
provisions of this agreement. BA Drafts so completed, signed, endorsed
and negotiated on behalf of a Canadian Borrower by such Canadian
Lender shall bind such Canadian Borrower as fully and effectively as
if so performed by an authorized officer of such Canadian Borrower.
Each draft of a Bankers' Acceptance completed, signed or endorsed by a
Canadian Lender shall mature on the last day of the term thereof.
3.5 BA RATE LOANS. If, in the sole judgement of a Canadian Lender, such Canadian
Lender is unable to extend credit by way of Bankers' Acceptances in accordance
with this agreement, such Canadian Lender shall give an irrevocable notice to
such effect to the Agent and the Canadian Borrowers prior to 10:00 a.m. (Toronto
time) on the date of the requested credit
-30-
extension and shall make available to the applicable Canadian Borrower prior to
11:00 a.m. (Toronto time) on the date of such requested credit extension a
Canadian dollar loan (a "BA RATE LOAN") in the principal amount equal to such
Canadian Lender's Pro Rata Share of the total credit to be extended by way of
Bankers' Acceptances, such BA Rate Loan to be funded in the same manner as a
Loan is funded pursuant to Section 3.2 and 3.3. Such BA Rate Loan shall have the
same term as the Bankers' Acceptances for which it is a substitute and shall
bear such rate of interest per annum throughout the term thereof as shall permit
such Canadian Lender to obtain the same effective rate as if such Canadian
Lender had accepted and purchased a Bankers' Acceptance at the same acceptance
fee and pricing at which the Reference Lenders would have accepted and purchased
such Bankers' Acceptance at approximately 11:00 a.m. (Toronto time) on the date
such BA Rate Loan is made, on the basis that, and the Canadian Borrowers hereby
agree that, for such a BA Rate Loan, interest shall be payable in advance on the
date of the extension of credit by the Canadian Lender deducting the interest
payable in respect thereof from the principal amount of such BA Rate Loan. All
BA Rate Loans shall be evidenced by a promissory note in the form of a
depository note made payable originally to and deposited with The Canadian
Depository for Securities Limited pursuant to the Depository Bills and Notes Act
(Canada).
3.6 INABILITY TO FUND U.S. DOLLAR ADVANCES IN CANADA. If a Canadian Lender
determines in good faith, which determination shall be final, conclusive and
binding on the Canadian Borrowers, and the Agent notifies the Canadian Borrowers
that (i) by reason of circumstances affecting financial markets inside or
outside Canada, deposits of United States dollars are unavailable to such
Canadian Lender in Canada, (ii) adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided in the
definition of LIBOR or Alternate Base Rate Canada, as the case may be, (iii) the
making or continuation of United States dollar advances in Canada has been made
impracticable by the occurrence of a contingency (other than a mere increase in
rates payable by such Canadian Lender to fund the advance) which materially and
adversely affects the funding of the advances at any interest rate computed on
the basis of LIBOR or the Alternate Base Rate Canada, as the case may be, or by
reason of a change in any applicable law or government regulation, guideline or
order (whether or not having the force of law but, if not having the force of
law, one with which a responsible bank would comply) or in the interpretation
thereof by any Official Body affecting such Lender or any relevant financial
market, which results in LIBOR or the Alternate Base Rate Canada, as the case
may be, no longer representing the effective cost to such Lender of deposits in
such market for a relevant Interest Period, or (iv) any change to present law or
any future law, regulation, order, treaty or official directive (whether or not
having the force of law but, if not having the force of law, one with which a
responsible bank would comply) or any change therein or any interpretation or
application thereof by any Official Body has made it unlawful for such Canadian
Lender to make or maintain or give effect to its obligations in respect of
United States dollar advances in Canada as contemplated herein, then
(a) the right of the Canadian Borrowers to obtain any affected type of
credit from such Canadian Lender shall be suspended until such
Canadian Lender determines that the circumstances causing such
suspension no longer exist and the Agent so notifies the Canadian
Borrowers and the other Canadian Lenders;
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(b) if any affected type of credit is not yet outstanding, any applicable
Drawdown Notice, Rollover Notice or Conversion Notice shall be
cancelled and the advance requested therein shall not be made;
(c) if any LIBOR Loan is already outstanding at any time when the right of
the Canadian Borrowers to obtain extension of credit by way of a LIBOR
Loan is suspended, it shall, subject to the Canadian Borrowers having
the right to obtain credit by way of a Base Rate Canada Loan at such
time, be converted on the last day of the Interest Period applicable
thereto (or on such earlier date as may be required to comply with any
applicable law) to a Base Rate Canada Loan in the principal amount
equal to the principal amount of the LIBOR Loan or, if the Canadian
Borrowers do not have the right to obtain credit by way of a Base Rate
Canada Loan at such time, such LIBOR Loan shall be converted on the
last day of the Interest Period applicable thereto (or on such earlier
date as may be required to comply with any applicable law) to a Prime
Rate Loan in the principal amount equal to the Canadian Dollar
Equivalent of the principal amount of such LIBOR Loan; and
(d) if any Base Rate Canada Loan is already outstanding at any time when
the right of the Borrowers to obtain credit by way of a Base Rate
Canada Loan is suspended, it shall, subject to the Canadian Borrowers
having the right to obtain extension of credit by way of a LIBOR Loan
at such time, be immediately converted to a LIBOR Loan in the
principal amount equal to the principal amount of the Base Rate Canada
Loan and having an Interest Period of one month or, if the Canadian
Borrowers do not have the right to obtain credit by way of a LIBOR
Loan at such time, it shall be immediately converted to a Prime Rate
Loan in the principal amount equal to the Canadian Dollar Equivalent
of the principal amount of the Base Rate Canada Loan.
If the Canadian Borrowers are notified by the Agent as aforesaid, then the
Canadian Borrowers may indicate to the Agent in writing that they desire to
replace the aforesaid Canadian Lender and, in such event, the provisions of
Section 8.3 shall apply mutatis mutandis to such Canadian Lender as if such
Canadian Lender were the Affected Lender.
3.7 INABILITY TO FUND LIBOR LOAN IN THE UNITED STATES. If a U.S. Lender
determines in good faith, which determination shall be final, conclusive and
binding on the U.S. Borrower, and the Agent notifies the U.S. Borrower that (i)
adequate and fair means do not exist for ascertaining the interest rate on the
basis provided in the definition of LIBOR, (ii) the making or continuation of
LIBOR Loans in the United States has been made impracticable by the occurrence
of a contingency (other than a mere increase in rates payable by such U.S.
Lender to fund the advance) which materially and adversely affects the funding
of the advances at any interest rate computed on the basis of LIBOR, or by
reason of a change since the date hereof in any applicable law or government
regulation, guideline or order (whether or not having the force of law but, if
not having the force of law, one with which a responsible U.S. commercial bank
would comply) or in the interpretation thereof by any Official Body affecting
such Lender or any relevant financial market, which results in LIBOR no longer
representing the effective cost to such Lender of deposits in such market for a
relevant Interest Period, or (iii) any change to
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present law or any future law, regulation, order, treaty or official directive
(whether or not having the force of law but, if not having the force of law, one
with which a responsible U.S. commercial bank would comply) or any change
therein or any interpretation or application thereof by any Official Body has
made it unlawful for such U.S. Lender to make or maintain or give effect to its
obligations in respect of LIBOR Loans in the United States as contemplated
herein, then:
(a) the right of the U.S. Borrower to obtain any credit in United States
dollars by way of LIBOR Loans, shall be suspended until such U.S.
Lender determines, acting reasonably, that the circumstances causing
such suspension no longer exist and such U.S. Lender so notifies the
U.S. Borrower;
(b) if any credit in United States dollars by way of LIBOR Loans is not
yet outstanding, any applicable Drawdown Notice shall be cancelled and
the advance requested therein shall not be made; and
(c) if any LIBOR Loan is already outstanding at any time when the right of
the U.S. Borrower to obtain credit by way of a LIBOR Loan is
suspended, it shall, subject to the U.S. Borrower having the right to
obtain credit by way of a Base Rate New York Loan at such time, be
converted to a Base Rate New York Loan on the last day of the Interest
Period applicable thereto (or on such earlier date as may be required
to comply with any applicable law).
If the U.S. Borrower is notified by the Agent as aforesaid, then the U.S.
Borrower may indicate to the Agent in writing that it desires to replace the
aforesaid U.S. Lender and, in such event, the provisions of Section 8.3 shall
apply mutatis mutandis to such U.S. Lender as if such U.S. Lender were the
Affected Lender.
3.8 TIMING OF CREDIT AVAILMENTS. No Bankers' Acceptance, LIBOR Loan or BA Rate
Loan under any Credit Facility may have a maturity date later than the Maturity
Date or that would, with respect to Credit Facility 1, prevent the Borrowers
from paying the scheduled instalments under Credit Facility 1 pursuant to
Section 9.1.
3.9 TIME AND PLACE OF PAYMENTS. Except as otherwise provided herein, the
Borrowers shall make all payments pursuant to this agreement or pursuant to any
document, instrument or agreement delivered pursuant hereto by deposit to the
applicable Designated Account before 1:00 p.m. (Toronto time) on the day
specified for payment and the Agent shall be entitled to withdraw the amount of
any payment due to the Agent or the Lenders from such account on the day
specified for payment. Any such payment received on the day specified for such
payment but after 1:00 p.m. (Toronto time) shall be deemed to have been received
prior to 1:00 p.m. (Toronto time) on the Banking Day immediately following such
day specified for payment.
3.10 REMITTANCE OF PAYMENTS. Forthwith after the withdrawal from the applicable
Designated Account by the Agent of any payment of principal, interest, fees or
other amounts for the benefit of the relevant Lenders pursuant to Section 3.9,
the Agent shall, subject to Sections 3.3 and 8.3, remit to each relevant Lender,
in immediately available funds, such Lender's Pro
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Rata Share of such payment (except to the extent such payment results from a
Loan with respect to which a Lender had failed, pursuant to Section 3.3, to make
available to the Agent its Pro Rata Share and, where any other Lender has made
funds available in the place and stead of a Defaulting Lender); provided that if
the Agent, on the assumption that it will receive, on any particular date, a
payment of principal (including, without limitation, a prepayment), interest,
fees or other amount under a particular Credit Facility, remits to each relevant
Lender its Pro Rata Share of such payment and the relevant Borrower fails to
make such payment, each relevant Lender agrees to repay to the Agent, forthwith
on demand, to the extent that such amount is not recovered from the relevant
Borrower on demand and after reasonable efforts by the Agent to collect such
amount (without in any way obligating the Agent to take any legal action with
respect to such collection), such Lender's Pro Rata Share of the payment made to
it pursuant hereto together with interest thereon at the then prevailing
interbank rate for each day from the date such amount is remitted to the
relevant Lenders until the date such amount is paid or repaid to the Agent, the
exact amount of the repayment required to be made by the relevant Lenders
pursuant hereto to be as set forth in a certificate delivered by the Agent to
each relevant Lender, which certificate shall constitute prima facie evidence of
such amount of repayment. Notwithstanding the foregoing, with respect to any
standby fees paid to the Agent for the benefit of the U.S. Lenders pursuant to
Section 7.6, the Pro Rata Share with respect to each U.S. Lender which has a
related Canadian Lender shall be calculated on the basis that (i) such Lender's
Individual Commitment with respect to Credit Facility 2 shall be the amount of
such Lender's Individual Commitment with respect to Credit Facility 2 otherwise
determined hereunder less the amount of outstanding credit extended to the
Canadian Borrowers hereunder by the related Canadian Lender and (ii) the Total
Commitment Amount with respect to the Credit Facility 2 shall be adjusted
accordingly.
3.11 EVIDENCE OF INDEBTEDNESS.
(a) The Agent shall open and maintain accounts wherein the Agent shall
record the amount and type of credit outstanding, each advance and
each payment of principal and interest on account of each Loan, each
Bankers' Acceptance accepted and cancelled and all other amounts
becoming due to and being paid to the Lenders or the Agent under a
particular Credit Facility. The Agent's accounts constitute, in the
absence of manifest error, prima facie evidence of the indebtedness of
the Borrowers to the Lenders and the Agent under the applicable Credit
Facility.
(b) The Overdraft Lender shall open and maintain accounts wherein it shall
record the amount and currency of each Overdraft Loan, each payment of
principal and interest on account of each Overdraft Loan and all other
amounts becoming due to and being paid to the Overdraft Lender. The
Overdraft Lender's accounts constitute, in the absence of manifest
error, prima facie evidence of the indebtedness of the Borrowers to
the Overdraft Lender.
(c) The Issuing Lender shall open and maintain accounts wherein it shall
record the amount and currency of each Letter issued and drawn upon
and all other amounts becoming due to and being paid to the Issuing
Lender. The Issuing Lender's
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accounts constitute, in the absence of manifest error, prima facie
evidence of the indebtedness of the Borrowers to the Issuing Lender.
3.12 NOTICE PERIODS. Each Drawdown Notice, Rollover Notice and Conversion Notice
shall be given to the Agent
(a) prior to 11:00 a.m. (Toronto time) on the third Banking Day prior to
the date of drawdown of, rollover of or conversion into a LIBOR Loan;
(b) prior to 11:00 a.m. (Toronto time) on the second Banking Day prior to
the date of a drawdown of or conversion into a Base Rate Canada Loan,
Base Rate New York Loan or a Prime Rate Loan or a drawdown of,
rollover of or conversion into a Bankers' Acceptance; and
(c) prior to 11:00 a.m. (Toronto time) on the first Banking Day prior to
the date of any other drawdown, rollover or conversion.
3.13 OVERDRAFT LOANS.
(a) Subject to the following provisions of this Section, overdrafts
arising from clearance of cheques or drafts drawn on the accounts of
the Borrowers maintained with the Overdraft Lender, and designated by
the Overdraft Lender for such purpose, shall be deemed to be
outstanding as extensions of credit to the respective Borrowers from
the Overdraft Lender under Credit Facility 2 (each, an "OVERDRAFT
LOAN") as follows:
(i) in the case of overdrafts in Canadian dollars, as Prime Rate
Loans; and
(ii) in the case of overdrafts in United States dollars, as Base Rate
New York Loans.
For certainty, notwithstanding Section 4.1, no Drawdown Notice need be
delivered by the Borrowers in respect of Overdraft Loans.
(b) Except as otherwise specifically provided herein, all references to
Prime Rate Loans and Base Rate New York Loans shall include Overdraft
Loans made in Canadian and United States dollars, respectively.
(c) Overdraft Loans shall be made by the Overdraft Lender alone, without
assignment to or participation by the other Lenders other than
pursuant to Section 3.13(h).
(d) The aggregate principal amount of the outstanding Overdraft Loans
shall not exceed the lesser of:
(i) US$7,500,000 or the Canadian Dollar Equivalent thereof; and
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(ii) the amount, if any, by which the amount of Credit Facility 2
exceeds the aggregate amount of credit outstanding under Credit
Facility 2 other than by way of Overdraft Loans.
(e) The Borrowers may make repayments of Overdraft Loans (together with
accrued interest thereon) from time to time without penalty.
(f) All interest payments and principal repayments of or in respect of
Overdraft Loans shall be solely for the account of the Overdraft
Lender. Subject to Section 3.13(g), all costs and expenses relating to
the Overdraft Loans shall be solely for the account of the Overdraft
Lender.
(g) Notwithstanding anything to the contrary herein contained, or the
contrary provisions of Applicable Law, (i) if an Event of Default
occurs or (ii) if the Overdraft Lender so requires (and the Overdraft
Lender agrees to so require if there have been outstanding Overdraft
Loans for seven consecutive days), and there are then outstanding any
Overdraft Loans, then, effective on the day of notice to that effect
from the Overdraft Lender to the Lenders who have made Individual
Commitments under Credit Facility 2, the Borrowers shall be deemed to
have requested, and hereby request, extensions of credit by way of
drawdown of an amount of Loans under Credit Facility 2, in the
currency or currencies of the Overdraft Loans, sufficient to repay the
Overdraft Loans and accrued and unpaid interest in respect thereof,
and on the day of receipt of such notice, each of such Lenders shall
disburse to the Overdraft Lender its respective Pro Rata Share of such
amounts and such amounts shall thereupon be deemed to have been
advanced by such Lenders to the Borrowers and to constitute Loans
under Credit Facility 2 (by way of Base Rate New York Loans if the
Overdraft Loans were so denominated or Prime Rate Loans if the
Overdraft Loans were so denominated, or both). Such Loans under Credit
Facility 2 shall be deemed to be comprised of principal and accrued
and unpaid interest in the same proportions as the corresponding
Overdraft Loans.
(h) If for any reason Base Rate New York Loans or Prime Rate Loans are not
made pursuant to Section 3.13(g) in an amount sufficient to repay any
amounts owed to the Overdraft Lender in respect of any outstanding
Overdraft Loans on or before the third Banking Day after demand for
payment thereof by the Overdraft Lender, each Lender having an
Individual Commitment with respect to Credit Facility 2 shall be
deemed to, and hereby agrees to, have purchased a participation in
such outstanding Overdraft Loans in an amount equal to its Pro Rata
Share of the applicable unpaid amount together with accrued interest
thereon. Upon one Banking Day's notice from the Overdraft Lender, each
Lender holding an Individual Commitment with respect to Credit
Facility 2 shall deliver to the Overdraft Lender an amount equal to
its respective participation in the applicable unpaid amount in same
day funds in the relevant currency as directed by the Overdraft
Lender. In the event that any Lender holding an Individual Commitment
with respect to Credit Facility 2 fails to make available to the
Overdraft Lender the amount of such Lender's participation as provided
in this
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Section 3.13(h), the Overdraft Lender shall be entitled to recover
such amount from such Lender on demand together with interest thereon
at the then prevailing interbank rate.
(i) Notwithstanding anything contained herein to the contrary, each
Lender's obligation to make Base Rate New York Loans or Prime Rate
Loans pursuant to Section 3.13(g) or each Lender's obligation to
purchase a participation in any unpaid Overdraft Loans pursuant to
Section 3.13(h), as the case may be, shall be absolute and
unconditional and shall not be affected by any circumstance, including
(i) any set-off, counterclaim, recoupment, defence or other right that
such Lender may have against the Overdraft Lender or any other Person
for any reason whatsoever, (ii) the occurrence or continuation of a
Default or an Event of Default, (iii) any Material Adverse Change, or
(iv) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
3.14 GENERAL PROVISIONS RELATING TO ALL LETTERS.
(a) The Borrowers shall indemnify and save harmless the Lenders, the
Issuing Lender and the Agent against all claims, losses, costs,
expenses or damages to the Lenders, the Issuing Lender and the Agent
arising out of or in connection with any Letter, the issuance thereof,
any payment thereunder or any action taken by the Lenders, the Issuing
Lender or the Agent or any other person in connection therewith,
including, without limitation, all costs relating to any legal process
or proceeding instituted by any party restraining or seeking to
restrain the Issuing Lender from accepting or paying any Draft or any
amount under any such Letter.
(b) The Borrowers hereby acknowledge and confirm to the Issuing Lender
that the Issuing Lender shall not be obliged to make any inquiry or
investigation as to the right of any beneficiary to make any claim or
Draft or request any payment under a Letter and payment by the Issuing
Lender pursuant to a Letter shall not be withheld by the Issuing
Lender by reason of any matters in dispute between the beneficiary
thereof and the relevant Borrower. The sole obligation of the Issuing
Lender with respect to Letters is to cause to be paid a Draft drawn or
purporting to be drawn in accordance with the terms of the applicable
Letter and for such purpose the Issuing Lender is only obliged to
determine that the Draft purports to comply with the terms and
conditions of the relevant Letter.
(c) The Issuing Lender shall not have any responsibility or liability for
or any duty to inquire into the form, sufficiency (other than to the
extent provided in the preceding paragraph), authorization, execution,
signature, endorsement, correctness (other than to the extent provided
in the preceding paragraph), genuineness or legal effect of any Draft,
certificate or other document presented to it pursuant to a Letter and
the Borrowers unconditionally assume all risks with respect to the
same. The Borrowers agree that they assume all risks of the acts or
omissions of the beneficiary of any Letter with respect to the use by
such beneficiary of the relevant Letter.
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(d) The obligations of the Borrowers hereunder with respect to Letters
shall be absolute, unconditional and irrevocable and shall not be
reduced by any event or occurrence including, without limitation, any
lack of validity or enforceability of any such Letter, or any Draft
with respect thereto paid or acted upon by the Issuing Lender or any
of its correspondents being fraudulent, forged, invalid or
insufficient in any respect, or any claims which the Borrowers may
have against any beneficiary or transferee of any such Letter;
provided, however, that nothing herein shall adversely affect the
rights of the Borrowers to commence any proceeding against the Issuing
Lender for any wrongful payments made by the Issuing Lender under a
Letter as a result of acts or omissions constituting gross negligence
or wilful misconduct on the part of the Issuing Lender. The
obligations of the Borrowers hereunder with respect to Letters shall
remain in full force and effect and shall apply to any amendment to or
extension of the expiration date of any such Letter.
(e) Any action, inaction or omission taken or suffered by the Issuing
Lender or any of the Issuing Lender's correspondents under or in
connection with a Letter or any Draft made thereunder, if in good
faith and in conformity with foreign or domestic laws, regulations or
customs applicable thereto, shall be binding upon the Borrowers and
shall not place the Issuing Lender or any of its correspondents under
any resulting liability to the Borrowers. Without limiting the
generality of the foregoing, the Issuing Lender and its correspondents
may receive, accept or pay as complying with the terms of a Letter,
any Draft thereunder, otherwise in order which may be signed by, or
issued to, the administrator or any executor of, or the trustee in
bankruptcy of, or the receiver for any property of, or other person or
entity acting as the representative or in the place of, such
beneficiary or its successors and assigns. The Borrowers covenant that
they will not take any steps, issue any instructions to the Issuing
Lender or any of its correspondents or institute any proceedings
intended to derogate from the right or ability of the Issuing Lender
or its correspondents to honour and pay any Draft or Drafts.
(f) The Borrowers agree that the Lenders, the Issuing Lender and the Agent
shall have no liability to them for any reason in respect of or in
connection with any Letter, the issuance thereof, any payment
thereunder, or any other action taken by the Lenders, the Issuing
Lender or the Agent or any other person in connection therewith, other
than on account of the Issuing Lender's gross negligence or wilful
misconduct and other than to the extent not in compliance with (b)
above.
(g) Save to the extent expressly provided otherwise in this Section 3.14,
the rights and obligations between the Issuing Bank and each Borrower
with respect to each Letter shall be determined in accordance with the
applicable provisions of the (i) Uniform Customs and Practice for
Documentary Credits (1993 Revision), ICC Publications 500 or (ii) the
International Standby Practices - ISP98, ICC Publication No. 590, as
applicable.
3.15 AGENT'S DISCRETION TO ALLOCATE. Notwithstanding the provisions of Sections
3.2, 3.4(a) and 9.6(b) with respect to the funding of Loans and Bankers'
Acceptances and
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reimbursing with respect to Letters in accordance with each relevant Lender's
Pro Rata Share, the Agent shall be entitled to reallocate the funding or
reimbursement obligations among the relevant Lenders in order to ensure, to the
greatest extent practicable, that after such funding the aggregate amount of
credit extended hereunder by each Lender coincides with such Lender's Pro Rata
Share of the aggregate amount of credit extended under a particular Credit
Facility by all of the relevant Lenders, provided that no such allocation shall
result in the aggregate amount of credit extended hereunder by any Lender
exceeding such Lender's Individual Commitment under such Credit Facility.
ARTICLE 4
DRAWDOWN
4.1 DRAWDOWN NOTICE. Subject to Sections 3.1, 3.6 and 3.7 and provided that all
of the applicable conditions precedent set forth in Article 12 have been
fulfilled by the Borrowers or waived in accordance with Section 14.14, the
Borrowers may have credit extended to them hereunder by giving to the Agent an
irrevocable notice ("DRAWDOWN NOTICE") in substantially the form of Schedule
ERROR! REFERENCE SOURCE NOT FOUND. hereto and specifying:
(a) the applicable Borrower;
(b) the Credit Facility under which the Credit is to be extended;
(c) the date the credit is to be extended;
(d) whether the credit is to be extended by way of a Prime Rate Loan, a
Base Rate Canada Loan, a Base Rate New York Loan, a LIBOR Loan or a
Bankers' Acceptance;
(e) if the credit is to be extended by way of a Loan, the principal amount
of the Loan;
(f) if the credit is to be extended by way of a LIBOR Loan, the applicable
Interest Period;
(g) if the credit is to be extended by way of Bankers' Acceptances, the
aggregate face amount of the Bankers' Acceptances to be issued and the
term of the Bankers' Acceptances;
(h) if the credit is to be obtained by way of Letter, the date of issuance
of the Letter, whether the Letter is to be a letter of credit or a
letter of guarantee, the named beneficiary of the Letter, the maturity
date and amount of the Letter, the currency in which the Letter is to
be denominated and all other terms of the Letter; and
(i) the details of any irrevocable authorization and direction pursuant to
Section 3.2.
ARTICLE 5
ROLLOVERS
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5.1 BANKERS' ACCEPTANCES. Subject to Section 3.4 and provided that the
applicable Canadian Borrower has, by giving notice to the Agent in accordance
with Section 5.3, requested the Canadian Lenders to accept its drafts to replace
all or a portion of outstanding Bankers' Acceptances as they mature, each
Canadian Lender shall, on the maturity of such Bankers' Acceptances and
concurrent with the payment by the Canadian Borrowers to such Canadian Lender of
the face amount of such Bankers' Acceptances or the portion thereof to be
replaced, accept such Canadian Borrower's draft or drafts having an aggregate
face amount equal to its Pro Rata Share of the aggregate face amount of the
matured Bankers' Acceptances or the portion thereof to be replaced.
5.2 LIBOR LOANS. Subject to Sections 3.6 and 3.7 and provided that the
applicable Borrower has, by giving notice to the Agent in accordance with
Section 5.3, requested the Lenders to continue to make credit available by way
of LIBOR Loans to replace all or a portion of an outstanding LIBOR Loan at the
end of its Interest Period, each Lender shall, at the end of the Interest Period
of such LIBOR Loan, continue to make credit available to such Borrower by way of
a LIBOR Loan (without a further advance of funds to such Borrower) in the
principal amount equal to its Pro Rata Share of the principal amount of the
LIBOR Loan to be replaced or the portion thereof to be replaced.
5.3 ROLLOVER NOTICE. The notice to be given to the Agent pursuant to Section 5.1
or 5.2 ("ROLLOVER NOTICE") shall be irrevocable, shall be given in accordance
with Section 3.12, shall be substantially in the form of Schedule
ERROR! REFERENCE SOURCE NOT FOUND. hereto and shall specify:
(a) the applicable Borrower;
(b) the relevant Credit Facility;
(c) the maturity date of the maturing Bankers' Acceptances or the expiry
date of the Interest Period of the LIBOR Loan to be replaced, as the
case may be;
(d) the face amount of the maturing Bankers' Acceptances or the principal
amount of the LIBOR Loan to be replaced, as the case may be, and the
portion thereof to be replaced; and
(e) the aggregate face amount of the new Bankers' Acceptances and the term
or terms of the new Bankers' Acceptances or the principal amount of
the new LIBOR Loans, as the case may be, and the Interest Period or
Interest Periods of the new LIBOR Loans.
ARTICLE 6
CONVERSIONS
6.1 CONVERTING LOAN TO OTHER TYPE OF LOAN. Subject to Sections 3.1, 3.6 and 3.7
and provided that the applicable Borrower has, by giving notice to the Agent in
accordance with Section 6.4, requested that all or a portion of an outstanding
Loan of a particular type be converted into another type of Loan, each Lender
shall, on the date of conversion (which, in the case of the conversion of all or
a portion of an outstanding LIBOR Loan, shall be the last day of
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the Interest Period of such Loan), continue to make credit available to such
Borrower by way of the type of Loan into which the outstanding Loan or a portion
thereof is converted (with a repayment and a subsequent advance of funds to such
Borrower) in the aggregate principal amount equal to its Pro Rata Share of the
principal amount as provided in the Conversion Notice.
6.2 CONVERTING LOAN TO BANKERS' ACCEPTANCES. Subject to Sections 3.1 and 3.4 and
provided that the applicable Canadian Borrower has, by giving notice to the
Agent in accordance with Section 6.4, requested the Canadian Lenders to accept
its drafts to replace all or a portion of an outstanding Loan and, if a LIBOR
Loan or a BA Rate Loan is to be replaced, the date of conversion is the date on
which such Loan matures, each Canadian Lender shall, on the date of conversion
and concurrent with the payment by the Canadian Borrowers to each Canadian
Lender of the principal amount of such outstanding Loan or the portion thereof
which is being converted, accept such Canadian Borrower's draft or drafts having
an aggregate face amount as provided in the Conversion Notice.
6.3 CONVERTING BANKERS' ACCEPTANCES TO LOAN. Each Canadian Lender shall, on the
maturity date of a Bankers' Acceptance which such Canadian Lender has accepted,
pay to the holder thereof the face amount of such Bankers' Acceptance. Subject
to Sections 3.1, 3.6 and 3.7 and provided that the applicable Canadian Borrower
has, by giving notice to the Agent in accordance with Section 6.4, requested the
Canadian Lenders to convert all or a portion of outstanding maturing Bankers'
Acceptances into a particular type of Loan, each Canadian Lender shall, upon the
maturity date of such Bankers' Acceptances and the payment by such Canadian
Lender to the holders of such Bankers' Acceptances of the aggregate face amount
thereof, make credit available to such Canadian Borrower by way of the Loan into
which the matured Bankers' Acceptances or a portion thereof are converted in the
aggregate principal amount as provided in the Conversion Notice. Where a
particular Canadian Lender has funded the Canadian Borrowers by way of a BA Rate
Loan rather than by way of Bankers' Acceptances, the provisions of this Section
6.3 as they relate to Bankers' Acceptances shall apply mutatis mutandis to such
BA Rate Loan.
6.4 CONVERSION NOTICE. The notice to be given to the Agent pursuant to Section
6.1, 6.2, or 6.3 ("CONVERSION NOTICE"), shall be irrevocable, shall be given in
accordance with Section 3.12, shall be substantially in the form of Schedule
ERROR! REFERENCE SOURCE NOT FOUND. hereto and shall specify:
(a) the applicable Borrower;
(b) the relevant Credit Facility;
(c) whether an outstanding Loan or Bankers' Acceptances are to be
converted and, if an outstanding Loan is to be converted, the type of
Loan to be converted;
(d) the date on which the conversion is to take place;
(e) the face amount of the Bankers' Acceptances or the portion thereof
which is to be converted or the principal amount of the Loan or the
portion thereof which is to be converted;
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(f) the type and amount of the Loan or Bankers' Acceptances into which the
outstanding Loan or Bankers' Acceptances are to be converted;
(g) if outstanding extension of credit is to be converted into a LIBOR
Loan, the applicable Interest Period; and
(h) if an outstanding Loan is to be converted into Bankers' Acceptances,
the aggregate face amount of the new Bankers' Acceptances to be
issued, the term or terms of the new Bankers' Acceptances.
6.5 ABSENCE OF NOTICE. Subject to Sections 3.6 and 3.7, in the absence of a
Rollover Notice or Conversion Notice within the appropriate time periods
referred to herein, a maturing Bankers' Acceptance or BA Rate Loan shall be
automatically converted to a Prime Rate Loan and a maturing LIBOR Loan shall be
automatically converted to a Base Rate New York Loan as though a notice to such
effect had been given in accordance with Section 6.4.
6.6 CONVERSION AFTER DEFAULT. Subject to Sections 3.6 and 3.7, if an Event of
Default has occurred and is continuing at 10:00 a.m. (Toronto time) on the third
Banking Day prior to the maturity date of a Bankers' Acceptance, BA Rate Loan or
a LIBOR Loan, such Bankers' Acceptances or BA Rate Loan shall be automatically
converted to a Prime Rate Loan and such LIBOR Loan shall be automatically
converted to a Base Rate New York Loan as though a notice to such effect had
been given in accordance with Section 6.4.
ARTICLE 7
INTEREST AND FEES
7.1 INTEREST RATES. The Borrowers shall pay to the Agent for the account of the
relevant Lenders, in accordance with Section 3.9, interest on the outstanding
principal amount from time to time of each Loan (other than a BA Rate Loan) and
on overdue interest thereon, at the rate per annum equal to:
(a) in the case of each Prime Rate Loan, the Prime Rate plus the
Applicable Margin;
(b) in the case of each Base Rate Canada Loan, the Alternate Base Rate
Canada plus the Applicable Margin;
(c) in the case of each Base Rate New York Loan, the Alternate Base Rate
New York plus the Applicable Margin; and
(d) in the case of each LIBOR Loan in favour of a Borrower, LIBOR plus the
Applicable Margin.
7.2 CALCULATION AND PAYMENT OF INTEREST.
(a) Interest on the outstanding principal amount from time to time of each
Prime Rate Loan and on overdue interest thereon shall accrue from day
to day from and including the date on which credit is made available
by way of such Loan or on which such overdue interest is due, as the
case may be, to but excluding the date
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on which such Loan or overdue interest, as the case may be, is repaid
in full (both before and after maturity and before and after judgment)
and shall be calculated on the basis of the actual number of days
elapsed divided by 365 or 366 in the case of a leap year.
(b) Interest on the outstanding principal amount from time to time of each
LIBOR Loan, Base Rate New York Loan and Base Rate Canada Loan and on
overdue interest thereon shall accrue from day to day from and
including the date on which credit is made available by way of such
Loan or on which such overdue interest is due, as the case may be, to
but excluding the date on which such Loan or overdue interest, as the
case may be, is repaid in full (both before and after maturity and
before and after judgment) and shall be calculated on the basis of the
actual number of days elapsed divided by 360.
(c) Accrued interest shall be paid,
(i) in the case of interest on Prime Rate Loans, Base Rate New York
Loans and Base Rate Canada Loans, quarterly in arrears on the
last Banking Day of each Fiscal Quarter, on the date of each
scheduled instalment under Section 9.1 and on the termination of
the applicable Credit Facility; and
(ii) in the case of interest on LIBOR Loans, on the last day of the
applicable Interest Period and, where the Interest Period is
longer than three months, three months after the beginning of
such Interest Period and on the termination of the applicable
Credit Facility.
7.3 GENERAL INTEREST RULES.
(a) For the purposes hereof, whenever interest is calculated on the basis
of a year of 360 or 365 days, each rate of interest determined
pursuant to such calculation expressed as an annual rate for the
purposes of the Interest Act (Canada) is equivalent to such rate as so
determined multiplied by the actual number of days in the calendar
year in which the same is to be ascertained and divided by 360 or 365,
as the case may be.
(b) Interest on each Loan and on overdue interest shall be payable in the
currency in which such Loan is denominated during the relevant period.
(c) If any Borrower fails to pay any interest, fee or other amount of any
nature payable by it to the Agent or the Lenders hereunder (other than
principal) on the due date therefor or under any document, instrument
or agreement delivered pursuant hereto on the due date therefor, such
Borrower shall pay to the Agent interest on such overdue amount in the
same currency as such overdue amount is payable from and including
such due date to but excluding the date of actual payment (as well
after as before judgment) at the rate per annum, calculated and
compounded monthly, which is equal to:
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(i) the Alternate Base Rate Canada plus 3% per annum in the case of
overdue amounts denominated in U.S. dollars; and
(ii) the Prime Rate plus 3% per annum in the case of all other overdue
amounts.
7.4 SELECTION OF INTEREST PERIODS. With respect to each LIBOR Loan, the
Borrowers shall specify in the Drawdown Notice, Rollover Notice or Conversion
Notice, the duration of the Interest Period provided that:
(a) no LIBOR Loan may have an Interest Period that would end after the
Maturity Date;
(b) Interest Periods for LIBOR Loans shall have a duration of one, two,
three or six months;
(c) the first Interest Period for a LIBOR Loan shall commence on and
include the day on which credit is made available by way of such Loan
and each subsequent Interest Period applicable thereto shall commence
on and include the date of the expiry of the immediately preceding
Interest Period applicable thereto; and
(d) if any Interest Period would end on a day which is not a Banking Day,
such Interest Period shall be extended to the next succeeding Banking
Day unless such next succeeding Banking Day falls in the next calendar
month, in which case such Interest Period shall be shortened to end on
the immediately preceding Banking Day.
7.5 ACCEPTANCE FEES. With respect to each draft of the Canadian Borrowers
accepted pursuant hereto, such Canadian Borrower shall pay to the Canadian
Lenders, in advance, an acceptance fee calculated at the applicable rate per
annum, on the basis of a year of 365 days, set forth in Schedule
ERROR! REFERENCE SOURCE NOT FOUND. hereto, on the face amount of such Bankers'
Acceptance for its term, being the actual number of days in the period
commencing on the date of acceptance of the applicable Canadian Borrower's draft
and ending on but excluding the maturity date of the Bankers' Acceptance. Such
acceptance fees shall be non-refundable and shall be fully earned when due.
7.6 STANDBY FEES. Upon the first Banking Day immediately following the
completion of each Fiscal Quarter and on the termination of a particular
Revolving Facility, the Borrowers shall pay, in accordance with Section 3.9, to
the U.S. Lenders (to the extent such U.S. Lenders are not also Canadian Lenders)
and otherwise to the Canadian Lenders, in arrears, a standby fee on the
Available Credit with respect to such Revolving Facility, calculated and
accruing daily from the date of the execution and delivery of this agreement at
the rate per annum equal to the Applicable Margin pertaining to such Revolving
Facility set forth in Schedule ERROR! REFERENCE SOURCE NOT FOUND. hereto,
calculated on the basis of a year of 365 days during such Fiscal Quarter or
other period as the case may be. For certainty, any such fees payable by the
Canadian Borrowers shall be payable to the Canadian Lenders and any such fees
payable by the U.S. Borrower shall be payable to the U.S. Lenders.
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7.7 WAIVER. To the extent permitted by Applicable Law, the covenant of the
Borrowers to pay interest at the rates provided herein shall not merge in any
judgment relating to any obligation of the Borrowers to the Lenders and any
provision of the Interest Act (Canada) which restricts any rate of interest set
forth herein shall be inapplicable to this agreement and is hereby waived by the
Borrowers.
7.8 MAXIMUM RATE PERMITTED BY LAW. No interest or fee to be paid hereunder shall
be paid at a rate exceeding the maximum rate permitted by Applicable Law. In the
event that such interest or fee exceeds such maximum rate, such interest or fees
shall be reduced or refunded, as the case may be, so as to be payable at the
highest rate recoverable under Applicable Law.
7.9 LETTER FEES.
(a) The relevant Borrower shall pay to the Agent for the account of the
relevant Lenders (ie. a Canadian Borrower shall pay to the Canadian
Lenders and the U.S. Borrower shall pay to the U.S. Lenders) an
issuance fee (in the currency which the Letter is denominated) in
advance on the date each Letter is issued or renewed calculated at a
rate per annum equal to the Applicable Margin and on the amount of
each such Letter for the number of days in the term of such Letter in
the year of 365 or 366 days, as the case may be, in which the Letter
is issued or renewed. In addition, with respect to all Letters, the
Borrowers shall from time to time pay to the Agent for the account of
the Issuing Lender its usual and customary fees (at the then
prevailing rates) for the amendment, delivery and administration of
letters of credit and letters of guarantee such as the Letters. Each
such payment is non-refundable and fully earned when due.
(b) The Borrowers shall pay to the Agent for the account of the Issuing
Lender a fee (in the currency in which the Letter is denominated) in
advance on the date each Letter is issued or renewed and calculated at
a rate of 0.125% per annum on the amount of each such Letter for the
number of days in the term of such Letter in the year of 365 or 366
days, as the case may be, in which the Letter is issued or renewed.
Each such payment is non-refundable and fully earned when due.
ARTICLE 8
RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS
8.1 CONDITIONS OF CREDIT. The obtaining or maintaining of credit hereunder shall
be subject to the terms and conditions contained in this Article 8.
8.2 CHANGE OF CIRCUMSTANCES.
(a) If, after the date hereof, the introduction of or any change in or in
the interpretation of, or any change in its application to any Lender
of, any law or any regulation or guideline issued by any Official
Body, including, without limitation, any reserve or special deposit
requirement or any tax (other than tax on a Lender's general income)
or any capital requirement, has, due to a Lender's compliance, the
effect, directly or indirectly, of (i) increasing the cost to such
Lender of
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performing its obligations hereunder; (ii) reducing any amount
received or receivable by such Lender hereunder or its effective
return hereunder or on its capital; or (iii) causing such Lender to
make any payment or to forego any return based on any amount received
or receivable by such Lender hereunder, then the Lender shall deliver
to the Borrowers a certificate stating that such costs have been
incurred because of the existence of this Agreement or the Loans and
setting out the reason for and the calculation of the relevant amount
and shall document that such costs are generally being charged by such
Lender to other similarly situated Borrowers under similar credit
facilities and, upon demand from time to time, the Borrowers shall pay
such amount as shall compensate such Lender for any such cost,
reduction, payment or foregone return (but no earlier than the amount
to which it pertains would have been required to be paid hereunder)
provided that the Borrowers shall be obligated under this Section
8.2(a) to compensate such Lender for capital adequacy requirements
measured against its outstanding obligations hereunder only to the
extent such capital adequacy requirements are in excess of the capital
adequacy requirements as of the date hereof. Any certificate of a
Lender in respect of the foregoing will be conclusive and binding upon
the Borrowers, except for manifest error, provided that such Lender
shall determine the amounts owing to it in good faith using any
reasonable averaging and attribution methods.
(b) Each Lender agrees that, as promptly as practicable after it becomes
aware of the occurrence of an event or the existence of a condition
that would cause it to seek additional amounts from the Borrowers
pursuant to Section 8.2(a), it will use reasonable efforts to make,
fund or maintain the affected credit through another lending office or
take such other actions as it deems appropriate if as a result thereof
the additional moneys which would otherwise be required to be paid in
respect of such credit pursuant to Section 8.2(a) would be reduced and
if, as determined by such Lender in its sole discretion, the making,
funding or maintaining of such credit through such other lending
office or the taking of such other actions would not otherwise
adversely affect such credit or such Lender and would not, in such
Lender's sole discretion, be commercially unreasonable.
(c) Notwithstanding Section 8.2(a), the Borrowers shall not be liable to
compensate a Lender for any such cost, reduction, payment or foregone
return:
(i) resulting from any law, regulation or guideline now in effect;
(ii) occurring more than 60 days before receipt by the Borrowers of
the certificate described in Section 8.2(a); or
(iii) if such compensation is not being claimed as a general practice
from customers of such Lender who by agreement are liable to pay
such or similar compensation.
In determining the amount of compensation payable by the Borrowers under Section
8.2(a), such Lender shall use all reasonable efforts to minimize the
compensation payable by the Borrowers
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including, without limitation, using all reasonable efforts to obtain refunds or
credits, and any compensation paid by the Borrowers which is later determined
not to have been properly payable or in respect of which a refund, credit or
compensation has been received shall forthwith be reimbursed by such Lender to
the Borrowers.
8.3 ASSIGNMENT AS A RESULT OF CHANGE OF CIRCUMSTANCES. If any Lender but not all
of the Lenders seeks additional compensation pursuant to Section 8.2(a) (the
"AFFECTED LENDER"), then the Borrowers may indicate to the Agent in writing that
they desire the Affected Lender to be replaced with one or more of the other
Lenders, and the Agent shall then forthwith give notice to the other Lenders
that any Lender or Lenders may, in the aggregate, assume all (but not part) of
the Affected Lender's Individual Commitment and obligations hereunder and
acquire all (but not part) of the rights of the Affected Lender and assume all
(but not part) of the obligations of the Affected Lender under each of the other
agreements and instruments delivered pursuant hereto (but in no event shall any
other Lender or the Agent be obliged to do so). If one or more Lenders shall so
agree in writing (herein collectively called the "ASSENTING LENDERS" and
individually called an "ASSENTING LENDER") with respect to such acquisition and
assumption, the Individual Commitment and the obligations of such Assenting
Lender under this agreement and the rights and obligations of such Assenting
Lender under each of the other agreements and instruments delivered pursuant
hereto shall be increased by its respective pro rata share (based on the
relative Individual Commitments of the Assenting Lenders) of the Affected
Lender's Pro Rata Share of outstanding credit and Individual Commitment and
obligations under this agreement and rights and obligations under each of the
other agreements and instruments delivered pursuant hereto on a date mutually
acceptable to the Assenting Lenders and the Borrowers. On such date, the
Assenting Lenders shall pay to the Affected Lender the amount of the outstanding
credit which it has made available to the Borrowers and the Affected Lender
shall cease to be a "Lender" for purposes of this agreement and shall no longer
have any obligations hereunder. Upon the assumption of the Affected Lender's
Individual Commitment as aforesaid by an Assenting Lender, Schedule
ERROR! REFERENCE SOURCE NOT FOUND. hereto shall be deemed to be amended to
increase the Individual Commitment of such Assenting Lender by the respective
amounts of such assumption. If there are no Assenting Lenders, the Borrowers may
designate to the Agent by written notice a Canadian chartered bank which is not
a Lender and, for all purposes of this Section 8.3, such bank shall be the sole
Assenting Lender.
8.4 INDEMNITY RELATING TO CREDITS. Upon notice from the Agent to the Borrowers
(which notice shall be accompanied by a detailed calculation of the amount to be
paid by the Borrowers), the Borrowers shall pay to the Agent or the Lenders such
amount or amounts as will compensate the Agent or the Lenders for any loss, cost
or expense incurred by them:
(a) in the liquidation or redeposit of any funds acquired by the Lenders
to fund or maintain any portion of a LIBOR Loan or a BA Rate Loan as a
result of:
(i) the failure of any Borrower to borrow or make repayments on the
dates specified under this agreement or in any notice from any
Borrower to the Agent; or
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(ii) the repayment or prepayment of any amounts on a day other than
the payment dates prescribed herein or in any notice from any
Borrower to the Agent; or
(b) with respect to any Bankers' Acceptance, arising from claims or legal
proceedings, and including reasonable legal fees and disbursements,
respecting the collection of amounts owed by a Canadian Borrower
hereunder in respect of such Bankers' Acceptance or the enforcement of
the Agent's or Lenders' rights hereunder in respect of such Bankers'
Acceptance including, without limitation, legal proceedings attempting
to restrain the Agent or the Lenders from paying any amount under such
Bankers' Acceptance; or
(c) in converting United States dollars into Canadian dollars or Canadian
dollars into United States dollars as a result of the failure of the
Borrowers to make repayments of outstanding credit hereunder in the
currency in which such outstanding credit was denominated.
8.5 INDEMNITY FOR TRANSACTIONAL AND ENVIRONMENTAL LIABILITY.
(a) The Borrowers hereby agree to indemnify, exonerate and hold the Agent
and each Lender and each of their respective officers, directors and
agents (collectively, the "INDEMNIFIED PARTIES") free and harmless
from and against any and all claims, demands, actions, causes of
action, suits, losses, costs (including, without limitation, all
documentary, recording, filing, mortgage or other stamp taxes or
duties), liabilities (other than contingent liabilities and/or related
accounts) and damages, and expenses in connection therewith
(irrespective of whether such Indemnified Party is a party to the
action for which indemnification hereunder is sought), and including,
without limitation, reasonable legal fees and out of pocket
disbursements (collectively, in this Section 8.5(a), the "INDEMNIFIED
LIABILITIES"), paid, incurred or suffered by the Indemnified Parties
or any of them as a result of, or arising out of, or relating to (i)
any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any extension of credit
obtained hereunder, or (ii) the execution, delivery, performance or
enforcement of this agreement and any instrument, document or
agreement executed pursuant hereto, except for any such Indemnified
Liabilities that a court of competent jurisdiction determined arose on
account of the relevant Indemnified Party's gross negligence or
willful misconduct.
(b) Without limiting the generality of the indemnity set out in Section
8.5(a), the Borrowers hereby further agree to indemnify, exonerate and
hold the Indemnified Parties free and harmless from and against any
and all claims, demand, actions, causes of action, suits, losses,
costs, liabilities (other than contingent liabilities and/or related
accounts) and damages, and expenses in connection therewith,
including, without limitation, reasonable legal fees and out of pocket
disbursements, of any and every kind whatsoever (collectively, in this
Section 8.5(b), the "INDEMNIFIED LIABILITIES"), paid, incurred or
suffered by the Indemnified Parties or any of them for, with respect
to, or as a direct or indirect
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result of, (i) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission or release from, any Property
of any Hazardous Material or (ii) the breach or violation of any
Environmental Law by any of the Companies, except for any such
Indemnified Liabilities that a court of competent jurisdiction
determined arose on account of the relevant Indemnified Party's gross
negligence or willful misconduct.
(c) All obligations provided for in this Section 8.5 shall survive any
termination of the Credit Facilities or this agreement and shall not
be reduced or impaired by any investigation made by or on behalf of
the Agent or any of the Lenders.
(d) The Borrowers hereby agree that, for the purposes of effectively
allocating the risk of loss placed on the Borrowers by this Section
8.5, the Agent and each of the Lenders shall be deemed to be acting as
the agent or trustee on behalf of and for the benefit of its officers,
directors and agents.
(e) If, for any reason, the obligations of the Borrowers pursuant to this
Section 8.5 shall be unenforceable, the Borrowers agree to make the
maximum contribution to the payment and satisfaction of each
obligation that is permissible under applicable law, except to the
extent that a court of competent jurisdiction determines such
obligations arose on account of the gross negligence or willful
misconduct of any Indemnified Party.
8.6 GROSS-UP FOR TAXES.
(a) Any and all payments made by any Borrower hereunder or under any other
Loan Document (any such payment being hereinafter referred to as a
"PAYMENT") to or for the benefit of the Agent or any Lender shall be
made without set-off or counterclaim, and free and clear of, and
without deduction or withholding for, or on account of, any and all
present or future Taxes, except to the extent such deduction or
withholding is required by law or the administrative practice of any
Official Body. If any Borrower shall be so required to deduct or
withhold any Taxes from or in respect of any Payment made to or for
the benefit of the Agent or any Lender, such Borrower shall:
(i) promptly notify the Agent of such requirement;
(ii) pay to the Agent or such Lender, as the case may be, in addition
to the Payment to which the Agent or such Lender is otherwise
entitled, such additional amount as is necessary to ensure that
the net amount actually received by the Agent or such Lender
(free and clear of, and net of, any such Taxes, including the
full amount of any Taxes required to be deducted or withheld from
any additional amount paid by such Borrower under this Section
8.6(a), whether assessable against such Borrower, the Agent or
such Lender) equals the full amount the Agent or such Lender, as
the case may be, would have received had no such deduction or
withholding been required;
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(iii) make such deduction or withholding;
(iv) pay to the relevant Official Body in accordance with applicable
law the full amount of Taxes required to be deducted or withheld
(including the full amount of Taxes required to be deducted or
withheld from any additional amount paid by such Borrower to the
Agent or such Lender under this Section 8.6(a)), within the time
period required by applicable law; and
(v) as promptly as possible thereafter, forward to the Agent or such
Lender, as the case may be, an original official receipt (or a
certified copy), or other documentation reasonably acceptable to
the Agent and such Lender, evidencing such payment to such
Official Body.
(b) If the Agent or any Lender is subject to Taxes under Part XIII of the
Tax Act (or any successor part) in respect of any Payment made by any
Borrower but such Taxes are not levied by way of deduction or
withholding (all such Taxes being "NON-WITHHELD PART XIII TAXES"),
such Borrower shall pay to the Agent or such Lender, as the case may
be, at the time such Borrower makes such Payment and in addition to
such Payment, such additional amount as is necessary to ensure that
the total amount received by the Agent or such Lender, as the case may
be, is equal to the Payment plus the amount of the Non-Withheld Part
XIII Taxes exigible in respect of the aggregate of the Payment and the
additional amount payable under this Section 8.6(b).
(c) In addition, the Borrowers agree to pay any and all present or future
stamp or documentary taxes or excise or property taxes, charges or
levies of a similar nature, which arise from any Payment or from the
execution, delivery or registration of, or otherwise with respect to,
the Loan Documents and the transactions contemplated thereby (any such
amounts being hereinafter referred to as "OTHER TAXES").
(d) Each Borrower hereby indemnifies and holds harmless the Agent and each
Lender, on an after-Taxes basis, for the full amount of Taxes and
Other Taxes, including Non-Withheld Part XIII Taxes, interest,
penalties and other liabilities, levied, imposed or assessed against
(and whether or not paid directly by) the Agent or such Lender, as
applicable, and for all expenses, resulting from or relating to any
Borrower's failure to:
(i) remit to the Agent or such Lender the documentation referred to
in Section 8.6(a)(v);
(ii) pay any Taxes in accordance with Section 8.6(a)(iv) or Other
Taxes in accordance with Section 8.6(c) when due to the relevant
Official Body (including, without limitation, any Taxes imposed
by any Official Body on amounts payable under this Section 8.6
above)); or
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(iii) pay to the Agent or applicable Lender any Non-Withheld Part XIII
Taxes in accordance with Section 8.6(b) above,
whether or not such Taxes or Other Taxes were correctly or legally
assessed. The Agent or any Lender who pays any Taxes or Other Taxes
(other than Non-Withheld Part XIII Taxes), and the Agent or any Lender
who pays any Non-Withheld Part XIII Taxes in excess of the amount (if
any) paid by a Borrower on account thereof under Section 8.6(b) above,
shall promptly notify such Borrower of such payment, provided,
however, that failure to provide such notice shall not detract from,
or compromise, the obligations of the Borrowers under this Section 8.6
above. Payment pursuant to this indemnification shall be made within
30 days from the date the Agent or the relevant Lender, as the case
may be, makes written demand therefor accompanied by a certificate as
to the amount of such Taxes or Other Taxes and the calculation
thereof, which calculation shall be prima facie evidence of such
amount.
(e) If any Borrower determines in good faith that a reasonable basis
exists for contesting any Taxes for which a payment has been made
under this Section 8.6 above, the relevant Lender or the Agent, as
applicable, shall, if so requested by such Borrower, cooperate with
such Borrower in challenging such Taxes at such Borrower's expense.
(f) If any Lender or the Agent, as applicable, receives a refund of, or
credit for, Taxes for which a payment has been made by any Borrower
under this Section 8.6 above, which refund or credit in the good faith
judgment of such Lender or the Agent, as the case may be, is
attributable to the Taxes giving rise to such payment made by such
Borrower, then such Lender or the Agent, as the case may be, shall
reimburse such Borrower for such amount (if any, but not exceeding the
amount of any payment made under this Section 8.6 above that gives
rise to such refund or credit), net of out-of-pocket expenses of such
Lender or the Agent, as the case may be, which the Agent or such
Lender, as the case may be, determines in its absolute discretion will
leave it, after such reimbursement, in no better or worse position
than it would have been in if such Taxes had not been exigible. Any
such Borrower, upon the request of the Agent or any Lender, agrees to
repay the Agent or such Lender, as the case may be, any portion of any
such refund or credit paid over to such Borrower that the Agent or
such Lender, as the case may be, is required to pay to the relevant
Official Body and agrees to pay any interest, penalties or other
charges paid by such Lender or the Agent, as the case may be, as a
result of or related to such payment to such Official Body. Neither
the Agent nor any Lender shall be under any obligation to arrange its
tax affairs in any particular manner so as to claim any refund or
credit.
(g) Each Borrower also hereby indemnifies and holds harmless the Agent and
each Lender, on an after-Taxes basis, for any additional taxes on net
income that the Agent or such Lender may be obliged to pay as a result
of the receipt of amounts under this Section 8.6 above.
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(h) Any Lender that is entitled to an exemption from or reduction of
withholding tax or Non-Withheld Part XIII Taxes under the law of the
jurisdiction in which any Borrower is resident for tax purposes, or
any treaty to which such jurisdiction is a party, with respect to
Payments shall, at the request of such Borrower, deliver to such
Borrower (with a copy to the Agent), at the time or times prescribed
by applicable law or reasonably requested by such Borrower or the
Agent, such properly completed and executed documentation prescribed
by applicable law (if any) as will permit such payments to be made
without withholding or at a reduced rate of withholding or a reduced
rate of Non-Withheld Part XIII Taxes. In addition, (i) any Lender, if
requested by any Borrower or the Agent, shall deliver such other
documentation prescribed by applicable law (if any) or reasonably
requested by any Borrower or the Agent as will enable such Borrower or
the Agent to determine whether or not such Lender is subject to
withholding or information reporting requirements, and (ii) any Lender
that ceases to be, or to be deemed to be, resident in Canada for
purposes of Part XIII of the Tax Act or any successor provision
thereto in respect of Payments shall within five Business Days thereof
notify such Borrower and the Agent in writing. Notwithstanding the
foregoing, no Lender shall be required to deliver any documentation
pursuant to this Section 8.6(h) that such Lender is not legally able
to deliver or that reflects any facts or statements that are
inaccurate.
(i) Neither any Lender nor the Agent shall be under any obligation to
arrange its tax affairs in any particular manner or be obliged to
disclose any information regarding its tax affairs or computations to
the Borrowers or any other Person in connection with this Section 8.6
above.
(j) Additional amounts payable under Section 8.6(a) and Non-Withheld Part
XIII Taxes payable under Section 8.6(b) have the same character as the
Payments to which they relate. For greater certainty, for example,
additional amounts payable under Section 8.6(a) or Non-Withheld Part
XIII Taxes payable under Section 8.6(b), in respect of interest
payable under a Loan Document, shall be payments of interest under
such Loan Document. All payments made under this Section 8.6 above
shall be subject to the provisions of this Section 8.6 above.
(k) All Loans, advances and extensions of credit made to any Canadian
Borrower under the Credit Facilities shall be made only by a Lender
that is a Canadian Qualified Lender, unless such Lender became a
Lender:
(i) at the written request of or with the written consent of Vitran;
or
(ii) in accordance with Section 16.6 following the occurrence of and
during the continuance of an Event of Default.
For greater certainty, neither Canadian Borrower shall be required to
pay any amount under this Section 8.6 above in respect of any Payment
to any Person that is not a Canadian Qualified Lender unless that
Person ceased to be a Canadian
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Qualified Lender because of a change in law or unless that Person is
receiving such Payment because:
(iii) that Person became a Lender at the written request of or with
the written consent of Vitran;
(iv) that Person acquired any interest under the Loan Documents or
became a Participant pursuant to Section 16.6 following the
occurrence of and during the continuance of an Event of Default;
or
(v) the relevant Canadian Borrower is making the Payment in its
capacity as a joint and several obligor or guarantor under
Section 1.13 following the occurrence of and during the
continuance of an Event of Default.
For the purposes of this agreement, the term "Canadian Qualified
Lender" means a Lender which:
(vi) is not a "non-resident" within the meaning of the Tax Act; or
(vii) is an "authorized foreign bank" within the meaning of the Tax
Act and receives all payments from the relevant Canadian Borrower
under the Credit Facilities in respect of its "Canadian banking
business" within the meaning of the Tax Act.
(l) All Loans, advances and extensions of credit made to the U.S. Borrower
under the Credit Facilities shall be made only by a Lender that is a
U.S. Qualified Lender unless such Lender became an Lender:
(i) at the written request of or with the written consent of Vitran;
or
(ii) in accordance with Section 16.6 following the occurrence of and
during the continuance of an Event of Default.
For greater certainty, the U.S. Borrower shall not be required to pay
any amount under this Section 8.6 in respect of any Payment to any
Person that is not a U.S. Qualified Lender unless that Person ceased
to be a U.S. Qualified Lender because of a change in law or unless
that Person is receiving such Payment because:
(iii) that Person became a Lender at the written request of or with
the written consent of Vitran;
(iv) that Person acquired any interest under the Loan Documents or
became a Participant pursuant to Section 16.6 following the
occurrence of and during the continuance of an Event of Default;
or
(v) the U.S. Borrower is making the Payment in its capacity as a
joint and several obligor under Section 1.13 following the
occurrence of and during the continuance of an Event of Default.
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For the purposes of this agreement, the term "U.S. Qualified Lender"
means a Lender which:
(vi) is a corporation, partnership or other entity created, organized
or incorporated under the laws of the United States or a State
thereof (including the District of Columbia) (any such entity
being hereinafter referred to as a "UNITED STATES PERSON")
provided, however, that in the case of any Lender other than a
corporation, such Lender is not subject to "backup withholding"
under Code Section 3406;
(vii) is not a United States Person but is acting through a lending
office located in the United States in a manner that results in a
zero rate of withholding on any U.S. source payments made to such
Lender by a resident of the United States; or
(viii) is not a United States Person but is a "qualified resident"
under an income tax convention between the United States and the
country of residence of such Lender and such convention provides
for a zero rate of withholding on any U.S.-source Payments made
to such Lender by a resident of the United States,
and in the case of a Lender referred to in (vi) through (viii) above:
(ix) there has been no determination that such Lender is a "conduit
entity" within the meaning of section 1.881-3(a)(4) of the United
States Treasury Regulations with respect to Loans, advances and
extensions of credit to the U.S. Borrower and that it is
participating as a Lender pursuant to a "tax avoidance plan"; and
(x) such Lender has properly completed and timely filed with the U.S.
Borrower all documentation required under the Code in order to
entitle such Lender to a complete exemption from withholding of
any and all United States federal income taxes on all Payments
made to such Lender in connection with such Loans, advances and
extensions of credit.
(m) To the extent of any conflict or inconsistency between this Section
8.6 and any provision of any other Loan Document, this Section 8.6
shall to the extent of such conflict or inconsistency override such
other provision and prevail.
(n) Each Borrower's obligations under this Section 8.6 shall survive
without limitation the termination of the Credit Facilities and this
agreement and all other Loan Documents and the permanent repayment of
the outstanding credit and all other amounts payable hereunder.
ARTICLE 9
REPAYMENTS AND PREPAYMENTS
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9.1 REPAYMENT UNDER CREDIT FACILITY 1. The credit outstanding under Credit
Facility 1 as of the date hereof shall be repaid by the Borrowers to the Lenders
in the amounts on the dates set forth below and the balance of credit
outstanding under Credit Facility 1 owing after June 30, 2009 shall be repaid in
full on the Maturity Date:
AMOUNT DATE
------ ----
US$2,000,000 December 31, 2006
US$2,000,000 March 31, 2007
US$2,000,000 June 30, 2007
US$2,000,000 September 30, 2007
US$2,000,000 December 31, 2007
US$2,000,000 March 31, 2008
US$2,000,000 June 30, 2008
US$2,000,000 September 30, 2008
US$2,000,000 December 31, 2008
US$2,000,000 March 31, 2009
US$2,000,000 June 30, 2009
Amounts which are repaid as aforesaid may not be reborrowed.
9.2 REPAYMENT UNDER REVOLVING FACILITIES. The aggregate credit outstanding under
the Revolving Facilities, together with all accrued and unpaid interest thereon
and all accrued and unpaid fees with respect thereto, shall be repaid by the
Borrowers to the Lenders on the Maturity Date. Amounts which are repaid as
aforesaid may not be re-borrowed. As concerns any Letter which, on the Maturity
Date, has an expiry date later than the Maturity Date, the Borrowers shall pay
to the Agent for deposit to the Cash Collateral Account, on the Maturity Date,
the then contingent liability of the Issuing Lender thereunder; following such
deposit by the Borrowers to the Cash Collateral Account, the Agent shall apply
funds in the Cash Collateral Account to (a) satisfy any reimbursement
obligations of the Borrowers to the Issuing Lender under Section 9.6, or (b)
refund to the Borrowers any amounts payable by the Issuing Lender to the
Borrowers under Section 13.4.
9.3 VOLUNTARY PREPAYMENTS. The Borrowers shall be entitled, at their option and
on five Banking Days notice to the Agent, to prepay all or any portion of the
outstanding credit under any Credit Facility without penalty; provided that (i)
Section 8.4(b) shall be complied with in connection with any such prepayment and
(ii) any such prepayment of all or any portion of any outstanding Loan shall be
in an amount of no less than US$300,000 and otherwise in multiples of
US$100,000. Amounts under Revolving Facilities which have been prepaid as
aforesaid may be re-borrowed. Amounts under Credit Facility 1 which have been
prepaid as aforesaid may not be re-borrowed. Any such prepayments under Credit
Facility 1 shall be applied in inverse order of maturity.
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9.4 MANDATORY PREPAYMENTS UNDER THE CREDIT FACILITIES. Subject to the following
sentence, at any time during which (i) the Debt to EBITDA Ratio for the most
recently completed Fiscal Quarter is greater than 2.25 to 1 and (ii) the
proceeds of any Permitted Disposition exceeds US$3,000,000, 50% of the proceeds
of any Permitted Disposition (net of all expenses of disposition and all taxes
related thereto) shall be applied as a mandatory prepayment of Credit Facilities
on the completion of such Permitted Disposition. The proceeds from the
disposition of the Surplus Properties shall not be subject to this Section 9.4.
All credit advanced to the Borrowers under Credit Facility 1 between the date
hereof and October 16, 2006 shall be immediately repaid in full if the
Transaction is not completed by October 16, 2006. Any such prepayments shall be
applied firstly to the prepayment of outstanding credit under Credit Facility 1
in inverse order of maturity, secondly, if no credit remains outstanding under
Credit Facility 1, to the prepayment of outstanding credit under Credit Facility
3 and lastly, if no credit remains outstanding under Credit Facility 3, to the
prepayment of outstanding credit under Credit Facility 2. Amounts which are
prepaid under the Revolving Facilities as aforesaid may be re-borrowed. Amounts
which are prepaid under Credit Facility 1 as aforesaid may not be re-borrowed.
9.5 REPAYMENTS OF CREDIT EXCESS. In the event that the Credit Excess with
respect to a particular Credit Facility at any time exceeds 3% of the aggregate
amount of credit outstanding under such Credit Facility at such time, the
Borrowers shall repay to the relevant Lenders, upon the demand of the Agent, the
amount of the Credit Excess with respect to such Credit Facility at such time.
Each such repayment that is referable to a particular Credit Facility shall be
applied against credit outstanding under such Credit Facility. Each such
repayment that is not referable to a particular Credit Facility shall be
applied, firstly, against credit outstanding under Credit Facility 1 in inverse
order of maturity and, secondly, if no credit remains outstanding under Credit
Facility 1 against credit outstanding under Credit Facility 3 and lastly, if no
credit remains outstanding under Credit Facility 3 against credit outstanding
under Credit Facility 2. Each such repayment shall first be applied to repay
outstanding Prime Rate Loans, Base Rate New York Loans and Base Rate Canada
Loans under the relevant Credit Facility as selected by the relevant Borrower
and, to the extent that the amount of such repayment exceeds the aggregate
amount of credit outstanding by way of such Loans which have been repaid, shall
then be deposited by the Agent in a segregated account and held in trust for the
Lenders to be applied to repay outstanding LIBOR Loans under the relevant Credit
Facility or to satisfy reimbursement obligations with respect to outstanding
Bankers' Acceptances or Letters under the relevant Credit Facility as such Loans
or Bankers' Acceptances mature or as such Letters are drawn upon, as the case
may be.
9.6 REIMBURSEMENT OR CONVERSION ON PRESENTATION OF LETTERS.
(a) On presentation of a Letter and payment thereunder by the Issuing
Lender, the Borrowers shall forthwith pay to the Agent for the account
of the Issuing Lender, and thereby reimburse the Issuing Lender for,
all amounts paid by the Issuing Lender pursuant to such Letter;
failing such payment, the Borrowers shall be deemed to have effected a
conversion of such Letter into: (i) a Prime Rate Loan in the case of a
Letter denominated in Canadian dollars or (ii) a Base Rate New York
Loan, in the case of a Letter denominated in United States dollars, in
each case to the extent of the payment of the Issuing Lender
thereunder.
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(b) (i) If the Issuing Lender makes payment under any Letter and the
Borrowers do not fully reimburse the Issuing Lender on or before the
date of payment, then Section 9.6(a) shall apply to deem a Loan to be
outstanding to the relevant Borrower under this agreement in the
manner therein set out. Each Lender shall, on request by the Issuing
Lender, immediately pay to the Issuing Lender an amount equal to such
Lender's Pro Rata Share of the amount paid by the Issuing Lender such
that each Lender is participating in the deemed Loan in accordance
with its Pro Rata Share;
(ii) Each Lender shall immediately on demand indemnify the Issuing
Lender to the extent of such Lender's Pro Rata Share of any amount
paid or liability incurred by the Issuing Lender under each Letter
issued by it to the extent that the Borrower does not fully reimburse
the Issuing Lender therefor.
(iii) For certainty, the obligations in this Section 9.6(b) shall
continue as obligations of the Persons who were Lenders at the time
each such Letter was issued notwithstanding that such Lender may
assign its rights and obligations hereunder, unless the Issuing Lender
specifically releases such Lender from such obligations in writing.
9.7 LETTERS SUBJECT TO AN ORDER. The Borrowers shall pay to the Agent for
deposit to the Cash Collateral Account an amount equal to the maximum amount
available to be drawn under any unexpired Letter which becomes the subject of
any Order; payment in respect of each such Letter shall be due forthwith upon
demand in the currency in which such Letter is denominated. The Agent shall
apply funds in the Cash Collateral Account to (a) satisfy any reimbursements
obligations of the Borrowers to the Issuing Lender under Section 9.6, or (b)
refund to the Borrowers any amounts payable by the Issuing Lender to the
Borrowers under Section 13.4.
9.8 REIMBURSEMENT OBLIGATION FOR MATURING BANKERS' ACCEPTANCES. Each Canadian
Borrower hereby unconditionally agrees to pay to the Canadian Lenders on the
maturity date (whether at stated maturity, by acceleration or otherwise) of each
Bankers' Acceptance drawn by such Canadian Borrower the undiscounted face amount
of such then-maturing Bankers' Acceptance. The obligation of the relevant
Canadian Borrower to reimburse the Canadian Lenders for then-maturing Bankers'
Acceptances may be satisfied by such Canadian Borrower by:
(a) paying to the Canadian Lenders, in accordance with Section 3.9, on the
maturity date of such Bankers' Acceptances an amount equal to the
aggregate undiscounted face amount thereof, provided that such
Canadian Borrower shall notify the Agent of its intention to reimburse
the Canadian Lenders in such manner prior to 10:00 a.m. (Toronto time)
on such maturity date;
(b) replacing the maturing Bankers' Acceptances with new Bankers'
Acceptances in accordance with Section 5.1; or
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(c) converting the maturing Bankers' Acceptances into a Loan in accordance
with Section 6.3, 6.5 or 6.6.
In no event shall either Canadian Borrower claim from the Canadian Lenders any
grace period with respect to the aforesaid obligation of such Canadian Borrower
to reimburse the Canadian Lenders.
9.9 CURRENCY OF REPAYMENT. All payments and repayments of outstanding credit
hereunder shall be made in the currency of such outstanding credit.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 REPRESENTATIONS AND WARRANTIES. To induce the Lenders and the Agent to
enter into this agreement and to make credit available to the Borrowers
hereunder from time to time, the Borrowers hereby represent and warrant to the
Lenders and the Agent, as at the date hereof and, as at the date of each
extension of credit as set forth in Article 12 as follows and acknowledge and
confirm that the Lenders and the Agent are relying upon such representations and
warranties in executing this agreement and in extending credit hereunder
(a) STATUS AND POWER. Each Company is a corporation duly incorporated or
amalgamated and organized and validly existing under the laws of its
respective jurisdiction of incorporation or amalgamation. Each Company
is duly qualified, registered or licensed in all jurisdictions where
such qualification, registration or licensing is required for such
Company to carry on its business, except where failure to do so could
not reasonably be expected to have a Material Adverse Effect. Each
Company has all requisite capacity, power and authority to own, hold
under licence or lease its properties, to carry on its business and to
otherwise enter into, and carry out the transactions contemplated by,
the Loan Documents to which it is a party. None of the Obligors is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(b) AUTHORIZATION AND ENFORCEMENT OF LOAN DOCUMENTS. All necessary action,
corporate or otherwise, has been taken to authorize the execution,
delivery and performance by each Company of the Loan Documents to
which it is a party. Each Company has duly executed and delivered the
Loan Documents to which it is a party. The Loan Documents to which
each Company is a party are legal, valid and binding obligations of
such Company, enforceable against such Company by the Agent and the
Lenders in accordance with their respective terms, except to the
extent that the enforceability thereof may be limited by (i)
applicable bankruptcy, insolvency, moratorium, reorganization and
other laws of general application limiting the enforcement of
creditors' rights generally and (ii) the fact that the courts may deny
the granting or enforcement of equitable rights.
(c) COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance by each Company of the Loan Documents to which it is a
party, and the consummation of the transactions contemplated herein
and therein, do not and
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will not conflict with, result in any breach or violation of, or
constitute a default under the terms, conditions or provisions of the
articles of incorporation or by-laws of the Companies, any Applicable
Law, the Purchase Agreements upon their execution and delivery or any
agreement, lease, licence, permit or other instrument to which any
Company is a party or is otherwise bound or by which any Company
benefits or to which its property is subject and do not require the
consent or approval of any Official Body or any other Person except as
has been obtained. Each Company has complied with all Applicable Law
in respect of the Loan Documents and the transactions contemplated
herein.
(d) COMPLIANCE WITH LAWS. None of the Companies are in violation of any
agreement, employee benefit plan, pension plan, mortgage, franchise,
licence, judgment, decree, order, statute, rule or regulation relating
in any way to itself, to the operation of its business or to its
property or assets and which could reasonably be expected to have a
Material Adverse Effect.
(e) LITIGATION. Except as disclosed in Schedule F hereto, there are no
actions, suits, investigations, claims or proceedings which have been
commenced or have been threatened in writing against or affecting any
of the Companies before any Official Body in respect of which there is
a reasonable possibility of a determination adverse to the relevant
Company and which, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.
(f) ENVIRONMENTAL COMPLIANCE.
(i) All facilities and property (including underlying groundwater)
owned, leased, used or operated by the Companies have been, and
continue to be, owned, leased, used or operated by the Companies
in compliance with all Environmental Laws in effect at the time
and from time to time of such ownership, leasing or usage, except
where failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(ii) There are no pending or threatened (in writing):
(A) claims, complaints, notices or requests for information
received by the Companies with respect to any alleged
violation of any Environmental Law, except such as could not
reasonably be expected to have a Material Adverse Effect, or
(B) complaints, notices or inquiries to the Companies regarding
potential liability under any Environmental Law which
liability could reasonably be expected to have a Material
Adverse Effect;
(iii) There has been no escape, seepage, leakage, spillage, discharge,
emission or release of Hazardous Materials at, on, under or from
any property now or previously owned, leased, used or operated by
the Companies that, singly or in the aggregate, have, or could
reasonably be expected to have, a Material Adverse Effect.
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(iv) The Companies have been issued and are in compliance with all
Environmental Permits, except where failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(v) No conditions exist at, on or under any property now or
previously owned, leased, used or operated by the Companies
which, with the passage of time, or the giving of notice or both,
would give rise to liability under any Environmental Law in
effect at the time, which liability could reasonably be expected
to have a Material Adverse Effect.
(vi) The Companies have not within the immediately preceding 10 years
been convicted of an offence for non-compliance with any
Environmental Laws, Environmental Permits or Environmental Orders
or been fined or otherwise sentenced or settled such prosecution
short of conviction.
(vii) The Companies have in effect a management structure and policies
and procedures that will permit them to effectively management
environmental risk and respond in a timely manner in compliance
with the Environmental Laws, Environmental Orders and
Environmental Permits in the event of Release of Hazardous
Materials in, on or under their property.
(g) FINANCIAL STATEMENTS. The Financial Statements were prepared in
accordance with generally accepted accounting principles consistently
applied in accordance with past practice. The balance sheets contained
in the Financial Statements fairly present the consolidated financial
condition of the Borrowers as at the respective dates thereof and the
statements of income contained in the Financial Statements fairly
present the consolidated results of operations of the Borrowers during
the respective fiscal periods covered thereby.
(h) SUBSIDIARIES AND PARTNERSHIPS. There are no Subsidiaries other than
the Guarantors, Vitran Vrt (Hungary) (formerly, Vitran Rt (Hungary)),
Vitran Spain Holdings S.L. and those which have become Subsidiaries
pursuant to Section 11.1(o) and no Company is a member of, or a
partner or participant in, any partnership, joint venture or
syndicate. All of the Subsidiaries are wholly-owned Subsidiaries.
(i) OUTSTANDING DEFAULTS. No event has occurred which constitutes or
which, with the giving of notice, lapse of time or both, would
constitute a default under or in respect of any agreement, undertaking
or instrument under which any of the Companies have outstanding
indebtedness.
(j) SOLVENCY PROCEEDINGS. None of the Companies has:
(i) admitted its inability to pay its debts generally as they become
due or failed to pay its debts generally as they become due;
(ii) in respect of itself, filed an assignment or petition in
bankruptcy or a petition to take advantage of any insolvency
statute;
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(iii) made an assignment for the benefit of its creditors;
(iv) consented to the appointment of a receiver of the whole or any
substantial part of its assets;
(v) filed a petition or answer seeking a reorganization, arrangement,
adjustment or composition in respect of itself under applicable
bankruptcy laws or any other applicable law or statute of Canada
or any subdivision thereof; or
(vi) been adjudged by a court having jurisdiction a bankrupt or
insolvent, nor has a decree or order of a court having
jurisdiction been entered for the appointment of a receiver,
liquidator, trustee or assignee in bankruptcy of such Company
with such decree or order having remained in force and
undischarged or unstayed for a period of thirty days.
(k) FREEHOLD INTERESTS. None of the Borrowers or Guarantors own any
freehold interest in any real estate other than the parcels which are
described by their municipal addresses in Schedule H hereto.
(l) LEASEHOLD INTERESTS. None of the Borrowers or Guarantors own any
leasehold interest in any real estate other than the parcels which are
described by their municipal addresses in Schedule I hereto.
(m) PLEDGED CAPITAL. The classes and numbers of and the registered owners
of the issued and outstanding shares of each of the Companies which
have been pledged to the Agent pursuant to the Security Documents as
of the date hereof is as set forth in Schedule J hereto.
(n) NO OMISSIONS. None of the representations and statements of fact set
forth in this Section 10.1 omits to state any material fact necessary
to make such representation or statement of fact not misleading in any
material respect.
(o) INSURANCE. Each Obligor has contracted for the insurance coverage
described in Section 11.1(h).
(p) FRENCH FORM OF CORPORATE NAME. The French form of the corporate name
of each Obligor, if applicable, is as set forth in Schedule L.
(q) LOCATION FOR PURPOSES OF PPSA. For the purposes of Section 7(4) of the
PPSA, each Obligor is located as set out in Schedule L hereto.
(r) DEPOSIT ACCOUNTS AND OTHER DEPOSITS. Each bank or other financial
institution in which any Obligor maintains a deposit account or other
deposit (other than with the Agent or the Lenders and whether general
or special, time or demand, provisional or final) and the details of
each such deposit account or other deposit are as set forth in
Schedule L hereto.
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(s) ORGANIZATIONAL CHART. Schedule M-1 contains a complete and accurate
corporate organizational chart of the Companies prior to completion of
the Transaction and Schedule M-2 contains a complete and accurate
corporate organizational chart of the Companies subsequent to the
Transaction and such Schedule shall be deemed to be updated with each
revised organizational chart delivered by Vitran pursuant to Section
11.1(a)(iii).
(t) SOLVENCY AFTER DRAWDOWN. On an unconsolidated basis,
(i) the assets of the U.S. Borrower exceed its liabilities, including
contingent liabilities at a fair valuation;
(ii) the capital of the U.S. Borrower is not reasonably small to
conduct its business; and
(iii) the U.S. Borrower does not intend to incur debts, nor does it
believe that it would incur debts, beyond its respective ability
to pay such debts as they mature.
(u) EMPLOYEE BENEFIT PLANS. Each of the ERISA Companies has fulfilled in
all material respects its obligations under the minimum funding
standards of Section 302 of ERISA and Section 412 of the Code with
respect to each Plan and is in material compliance with all other
applicable provisions of ERISA. The U.S. Borrower has not nor has any
ERISA Affiliate incurred any Withdrawal Liability that could
reasonably expected to have a Material Adverse Effect. None of the
ERISA Companies has received any notification that any Multiemployer
Plan is in reorganization or has been terminated within the meaning of
Title IV of ERISA.
(v) REGULATION U OR X. None of the Borrowers is engaged in the business of
extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any credit obtained hereunder shall be used
for a purpose which violates, or would be inconsistent with, F.R.S.
Board Regulation U or X. Terms for which meanings are provided in
F.R.S. Board Regulation U or X or any regulations substituted
therefor, as from time to time in effect, are used in this Section
with such meanings.
(w) FOREIGN ASSETS CONTROL REGULATIONS. Neither the execution and delivery
of this agreement nor the relevant Borrowers' use of the proceeds of a
Credit Facility will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating
thereto. Without limiting the foregoing, no Obligor nor any of its
Subsidiaries (a) is or will become a Person whose property or
interests in property are blocked pursuant to Section 1 of Executive
Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001) or (b)
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engages or will engage in any dealings or transactions, or be
otherwise associated, with any such Person. Each Obligor and its
Subsidiaries are in compliance, in all material respects, with the
Title III of Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act
(USA Patriot Act of 2001). No part of the proceeds from a Credit
Facility will be used, directly or indirectly, for any payment to any
governmental official or employee, political party, official of a
political party, candidate for political office or anyone else acting
in an official party capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.
(x) QUEBEC ASSETS. Rout-Way Express Line Ltd./Les Services Routiers
Express Rout Ltee and Southern Express Lines of Ontario Limited do not
own any assets which are located in the Province of Quebec.
10.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties of the Borrowers contained in Section 10.1 shall survive the
execution and delivery of this agreement and shall continue (with reference to
the actual dates at which such representations and warranties are made) until
all outstanding credit hereunder has been repaid and the Credit Facilities have
been terminated notwithstanding any investigation made at any time by or on
behalf of the Agent or any of the Lenders.
ARTICLE 11
COVENANTS
11.1 AFFIRMATIVE COVENANTS. The Borrowers hereby covenant and agree with the
Agent and the Lenders that, until all outstanding credit hereunder has been
repaid in full and the Credit Facilities have been terminated, and unless the
Lenders otherwise expressly consent in writing in accordance with Section 14.14.
(a) FINANCIAL REPORTING. The Borrowers shall furnish the Agent with the
following documents, statements and reports:
(i) within 120 days after the end of each Fiscal Year, a copy of the
audited consolidated financial statements of Vitran and the
auditors' certification thereof and unaudited financial
statements of each of the Material Subsidiaries prepared in
accordance with generally accepted accounting principles;
(ii) within 60 days after the end of each Fiscal Quarter, a copy of
the unaudited consolidated financial statements of Vitran and
each of the Material Subsidiaries with respect thereto prepared
in accordance with generally accepted accounting principles;
(iii) concurrently with the delivery of the financial statements of
Vitran and the Material Subsidiaries pursuant to (i) and (ii)
above, a compliance certificate of Vitran in the form of Schedule
C hereto and, where the
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information in Schedule M has changed as of such date, an updated
Schedule M;
(iv) within 15 days of the end of each calendar month, a Borrowing
Base Certificate as at the end of such month substantially in the
form of Schedule K; and
(v) such additional financial or operating reports or statements as
the Agent on the instructions of any Lender may, from time to
time, reasonably require.
(b) DEBT TO EBITDA RATIO. Vitran shall at all times maintain the Debt to
EBITDA Ratio for each Fiscal Quarter as follows:
(i) at less than or equal to ______________ for each Fiscal Quarter
from and including the Fiscal Quarter ending June 30, 2006 to and
including the Fiscal Quarter ending June 30, 2007;
(ii) at less than or equal to _____________ from and including the
Fiscal Quarter ending September 30, 2007 to and including the
Fiscal Quarter ending June 30, 2008; and
(iii) for each Fiscal Quarter thereafter, at _____________.
(c) EBITDA TO CAPITAL EXPENDITURES AND INTEREST EXPENSES RATIO. Vitran
shall, for each Fiscal Quarter, maintain the EBITDA to Capital
Expenditures and Interest Expenses Ratio at greater than or equal to
__________.
(d) EQUITY. Equity shall at all times exceed the aggregate of:
(i) ________________ at all times prior to the date on which the
Transaction is completed and at all times thereafter,
__________________; and
(ii) the aggregate of ____% of positive Net Income for each Fiscal
Quarter beginning December 31, 2006 and for each Fiscal Quarter
thereafter which has been completed on or before the date of
determination and, if Net Income for any such Fiscal Quarter is a
negative amount, it shall be deemed to be equal to zero for such
Fiscal Quarter.
(e) CORPORATE EXISTENCE. The Borrowers shall, and shall cause each of the
Subsidiaries to, maintain their corporate existence in good standing
and shall, and shall cause each of the Subsidiaries to, qualify and
remain duly qualified to carry on business and own property in each
jurisdiction in which such qualification is necessary to the extent
that a failure to so qualify could reasonably be expected to have a
Material Adverse Effect; provided that nothing herein shall prohibit
the merger, consolidation, wind up or amalgamation of any Subsidiary
into any another Subsidiary or into the Borrowers or the
discontinuance of the operations
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of any Subsidiary if such merger, consolidation or discontinuance
could not reasonably be expected to have a Material Adverse Effect.
(f) CONDUCT OF BUSINESS. The Borrowers shall, and shall cause each of the
Subsidiaries to, conduct their business in such a manner so as to
comply in all respects with all Applicable Laws, so as to observe and
perform all its obligations under leases, licences and agreements
necessary for the proper conduct of its business and so as to preserve
and protect its property and assets and the earnings, income and
profits therefrom (including, without limitation, Environmental Laws
and laws relating to the discharge, spill, disposal or emission of
Hazardous Materials) to the extent that such non-compliance,
non-observance or non-performance could reasonably be expected to have
a Material Adverse Effect. The Borrowers shall, and shall cause each
of the Subsidiaries to, obtain and maintain all material licenses,
certificates of approval, consents, registrations, permits, government
approvals, franchises, authorizations and other rights necessary for
the operation of their business to the extent that a failure to do so
could reasonably be expected to have a Material Adverse Effect.
(g) USE OF PROCEEDS. The Borrowers shall apply all of the proceeds of the
credit obtained under (i) Credit Facility 1, to refinance existing
Debt and to partially finance the Transaction, (ii) Credit Facility 2,
to finance the working capital requirements of the Borrowers, and
(iii) Credit Facility 3, to finance Acquisitions permitted hereunder.
(h) INSURANCE. The Borrowers shall, and shall cause each of the
Subsidiaries to, maintain insurance with reputable insurers with
respect to their properties and business against loss or damage of the
kind customarily insured against by companies engaged in the same or
similar business, of such types and in such amounts as are customarily
carried under such circumstances by such other companies.
(i) TAXES. The Borrowers shall, and shall cause each of the Subsidiaries
to, file all tax returns and tax reports required by law to be filed
by them and pay all material taxes, rates, government fees and dues
levied, assessed or imposed upon them and upon their property or
assets or any part thereof, as and when the same become due and
payable (except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with generally accepted accounting
principles shall have been set aside on its books), where the failure
to file such tax returns and tax reports or to pay such taxes, rates,
government fees or duties could reasonably have a Material Adverse
Effect.
(j) REIMBURSEMENT OF EXPENSES. The Borrowers shall reimburse the Agent, on
demand, for all reasonable out-of-pocket costs, charges and expenses
incurred by or on behalf of the Agent (including, without limitation,
travel costs and the reasonable fees and out-of-pocket disbursements
of its counsel) in connection with:
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(i) the development, negotiation, preparation, execution,
syndication, delivery, interpretation and enforcement of this
agreement and all other documentation ancillary to the completion
of the transactions contemplated hereby and any amendments hereto
or thereto and any waivers of any provisions hereof or thereof
(whether or not consummated or entered into); and
(ii) any lien search fees relating to the transactions contemplated
hereby;
and the Borrowers may contest the reasonableness of such costs,
charges and expenses in good faith. The Borrowers shall also reimburse
each Lender for reasonable fees and out-of-pocket disbursements of its
counsel in connection with the enforcement of this agreement.
(k) BOOKS AND RECORDS. The Borrowers shall, and shall cause each of the
Subsidiaries to, keep proper books of account and records covering all
their business and affairs on a current basis, make full, true and
correct entries in all material respects of their transactions in such
books, set aside on their books from their earnings all such proper
reserves as required by generally accepted accounting principles and
permit representatives of the Agent to inspect such books of account,
records and documents and to make copies therefrom during reasonable
business hours and upon reasonable notice and to discuss the affairs,
finances and accounts of the Companies with the officers of the
Companies and their auditors during reasonable business hours and upon
reasonable notice.
(l) NOTICE OF LITIGATION. The Borrowers shall promptly notify the Agent of
any actions, suits, inquiries, claims or proceedings (whether or not
purportedly on behalf of any of the Companies) commenced or threatened
in writing against or affecting any of the Companies before any
government, parliament, legislature, regulatory authority, agency,
commission, board or court or before any private arbitrator, mediator
or referee which in any case or in the aggregate could reasonably be
expected to have a Material Adverse Effect.
(m) ENVIRONMENTAL MATTERS. The Borrowers shall, as soon as practicable and
in any event within 30 days, notify the Agent and provide copies upon
receipt of all written claims, complaints, notices or inquiries from
an Official Body relating to the condition of the facilities and
properties of the Companies or compliance with Environmental Laws,
which claims, complaints, notices or inquiries relate to matters which
would have, or may reasonably be expected to have, a Material Adverse
Effect, and shall, and shall cause each of the Subsidiaries to,
proceed diligently to resolve any such claims, complaints, notices or
inquiries relating to compliance with Environmental Laws and provide
such information and certifications which the Agent may reasonably
request from time to time to evidence compliance with this provision.
(n) NOTICE OF DEFAULT OR EVENT OF DEFAULT. Upon the occurrence of a
Default or an Event of Default, the Borrowers shall promptly deliver
to the Agent a notice
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specifying the nature and date of occurrence of such Default or Event
of Default and the action which the Borrowers propose to take with
respect thereto.
(o) FUTURE SUBSIDIARIES TO BECOME GUARANTORS. The Borrowers will cause any
Person becoming a Subsidiary after the date hereof to (i) execute and
deliver counterparts to the Guarantee thereby becoming a Guarantor
thereunder and to (ii) grant to the Agent a security interest in all
of its present and future undertaking and assets. In addition, in
connection therewith, each such new Subsidiary will be required to
execute and deliver, or cause to be executed and delivered, all other
relevant documentation (including opinions of counsel and corporate
organizational and authorizing documents) as the Agent shall
reasonably request.
(p) PROMPT PAYMENT. The Borrowers shall, and shall cause each Guarantor
to, duly and punctually pay or cause to be duly and punctually paid to
the Agent and the Lenders all amounts payable by the Obligors under
the Loan Documents to which each is a signatory at the times and
places and in the currency and manner mentioned therein.
(q) CHANGE IN SCHEDULED INFORMATION. If any of the information contained
in Schedule L shall change, the Borrowers shall promptly notify the
Agent in writing of the details of such change and Schedule L shall
thereupon be deemed to be amended accordingly.
(r) SECURITY. The Secured Obligations of the Obligors under the Loan
Documents shall at all times be collaterally secured by the Security.
(s) ERISA. The Borrowers shall, and shall cause each ERISA Affiliate to,
furnish to the Agent:
(i) promptly after receipt thereof (but in no event later than 30
days after such receipt), a copy of any notice any ERISA Company
receives after the date of this agreement from the PBGC relating
to the intention of the PBGC to terminate any Plan or Plans or to
appoint a trustee to administer any Plan or Plans, if such
termination or appointment would result in a Material Adverse
Effect;
(ii) within 10 days after the due date for filing with the PBGC
pursuant to Section 412(n) of the Code of a notice of failure to
make a required instalment or other payment with respect to a
Plan, a statement of a financial officer setting forth details as
to such failure and the action proposed to be taken with respect
thereto, together with a copy of such notice given to the PBGC,
but only if such failure to make a required instalment would
result in a Material Adverse Effect; and
(iii) promptly and in any event within 30 days after receipt thereof
by any ERISA Company from the sponsor of a Multiemployer Plan, a
copy of each notice received by any ERISA Company concerning (A)
the imposition of any Withdrawal Liability or (B) a determination
that a
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Multiemployer Plan is, or is expected to be, terminated or in
reorganization, in each case within the meaning of Title IV of
ERISA, but only if the imposition of such withdrawal liability,
in the case of clause (A), or such termination or reorganization,
in the case of clause (B), would result in a Material Adverse
Effect.
(t) TRANSACTION. On or before October 16, 2006, the Borrowers shall cause
the Target and each of its Subsidiaries to,
(i) enter into an instrument of adhesion to the Guarantee in form and
substance satisfactory to the Agent;
(ii) enter into the Security Agreements listed in Section III of
Schedule N in form and substance satisfactory to, and in favour
of, the Agent for the purpose of charging all of their respective
real and personal property which are not subject to a Permitted
Lien as collateral security their respective obligations under
the Guarantee;
(iii) deliver opinions of legal counsel to the Target and its
Subsidiaries with respect to, inter alia, each such entity, the
enforceability of the afore-mentioned Guarantee and Security
Agreements and as to such other matters as the Agent may
reasonably request, and otherwise in form and substance
satisfactory to the Agent;
(iv) deliver a duly certified resolution of the board of directors of
the Target and each of its Subsidiaries authorizing each to
execute, deliver and perform its obligations under the
aforementioned Guarantee and Security Agreements;
(v) deliver a certificate of a senior officer of the Target and each
of its Subsidiaries setting forth specimen signatures of the
individuals authorized to sign on behalf their respective behalf;
(vi) deliver a certificate of status or good standing for the Target
and each of its Subsidiaries issued by the appropriate
governmental body or agency of the jurisdiction in which such
entity is incorporated or formed;
(vii) permanently repay all outstanding Debt (other than Permitted
Debt) of the Target and its Subsidiaries and all guarantees and
security therefor shall be released and discharged;
(u) CERTIFIED DOCUMENTS. Forthwith upon completion of the Transaction, the
Borrowers shall deliver to the Agent true certified copies of the
National City Bank Loan Documents and the Purchase Agreements.
(v) TITLE TO EXPEDITEUR PROPERTY. On or before October 23, 2006, the
Borrowers shall deliver to the Administrative Agent a title opinion or
title insurance, in form
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and substance reasonably satisfactory to the Lenders, with respect to
the property of Expediteur T.W. Ltee located at 0000 Xxxxxx Xxxxxxxx,
Xxxxxxx, XX X0X 0X0.
11.2 RESTRICTIVE COVENANTS. The Borrowers hereby covenant and agree with the
Agent and the Lenders that, until all outstanding credit hereunder has been
repaid in full and the Credit Facilities have been terminated, and unless the
Lenders otherwise expressly consents in writing in accordance with Section
14.14:
(a) ENCUMBRANCES. The Borrowers shall not, and shall not suffer or permit
any of the Subsidiaries to, enter into or grant, create, assume or
suffer to exist any Lien affecting any of their property, assets or
undertaking, save and except only for the Permitted Liens.
(b) CORPORATE EXISTENCE. The Borrowers shall not, and shall not suffer or
permit any of the Subsidiaries to, take part in any amalgamation,
merger, winding-up, dissolution, capital or corporate reorganization
or similar proceeding or arrangement, except that any of them may
amalgamate or merge with any Subsidiary which is a direct or indirect
wholly-owned subsidiary of the Borrowers and any Subsidiary may wind
up into any other Subsidiary or any Borrower if it is a wholly-owned
subsidiary of the entity or entities into which it is winding up and
any of them may transfer any or all of its assets to any Subsidiary
which is a direct or indirect wholly-owned subsidiary of the
Borrowers.
(c) DEBT. The Borrowers shall not, and shall not suffer or permit any of
the Subsidiaries to, incur or permit or suffer to exist any Debt other
than Permitted Debt.
(d) INVESTMENTS. The Borrowers shall not, and shall not suffer or permit
any of the Subsidiaries to, (i) invest in any other entity or
entities, singly or in the aggregate, by way of equity investment or
otherwise or (ii) provide any financial assistance (by way of loan,
guarantee or otherwise) to any other entity, in an aggregate amount
greater than US$2,000,000 or the Canadian Dollar Equivalent thereof,
other than by way of investments in or financial assistance to any of
the Subsidiaries. Nothing in this Section 11.2(d) shall prevent any
Borrower nor any Subsidiary from making any Acquisition as permitted
by Section 11.2(h).
(e) DIVIDENDS. Vitran shall not pay dividends in an amount greater than
10% of Net Income for the period of four consecutive Fiscal Quarters
immediately preceding the date of such payment.
(f) FINANCE SUBSIDIARIES. The Borrowers shall not suffer or permit Vitran
Vrt (Hungary) or Vitran Spain Holding S.L. (Spain) to own any assets
other than assets of nominal value, to incur any liabilities other
than nominal liabilities or to carry on any business.
(g) DISPOSITIONS OF ASSETS. The Borrowers shall not, and shall not suffer
or permit any of the Subsidiaries to, sell, assign, transfer, convey,
lease (as lessor) or
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otherwise dispose of any of their respective assets out of the
ordinary course of business other than Permitted Dispositions.
(h) RESTRICTIONS ON ACQUISITIONS. Except for the Transaction, no Borrower
nor any Subsidiary shall make any Acquisition unless no Default or
Event of Default has occurred which is continuing and no such event
shall occur as a result of making such Acquisition, and if:
(i) the assets or entity being purchased will be used to carry on the
Business in Canada or the United States;
(ii) the purchase would not result in a breach of any of the
representations, warranties or covenants contained herein,
including financial covenants on a pro forma basis, after giving
effect to such Acquisition, as evidenced by a certificate which
contains financial covenant calculations in reasonable detail and
which has been delivered to the Agent and the Lenders, and is in
a form satisfactory to them acting reasonably;
(iii) during the term of the Credit Facilities, the Aggregate
Consideration of any Acquisition does not exceed US$15,000,000 or
the Exchange Equivalent thereof individually, or US$25,000,000 or
the Exchange Equivalent thereof in the aggregate per Fiscal Year,
unless the prior written consent of the Majority Lenders has been
obtained;
(iv) for any real property (whether owned or, if the property
previously has been used other than as office space, leased,
occupied, managed, used or controlled) that is the subject of any
purchase, lease or other agreement, by any Borrower or the entity
being acquired by such Borrower shall have delivered to the Agent
a recent phase I environmental assessment conducted by a
Qualified Environmental Consultant and a phase II environmental
assessment conducted by a Qualified Environmental Consultant, if
so requested by the Agent upon (i) consultation with the relevant
Borrower and (ii) if recommended in the phase I environmental
assessment, together with a plan of remediation, satisfactory to
the Agent acting reasonably, if any remediation required by
Environmental Law is recommended in such assessments;
(v) in the case of an Acquisition of shares, the purchase must be
"friendly" (i.e., not hostile) and, for certainty, shall not
include an offer to acquire securities which has not been
recommended by the board of directors of the targeted
corporation; and
(vi) the target corporation shall comply with Section 11.1(o) if such
target corporation would be a Subsidiary and its shares shall be
pledged to the Agent pursuant to the Security Documents.
provided that nothing in this subsection shall restrict any Borrower's
or any Subsidiary's ability to make any investment permitted by
Section 11.2(d).
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(i) CAPITAL OF COMPANIES. Vitran shall not suffer or permit any of the
other Companies to issue further equity securities, unless such equity
securities are issued to (i) the existing equity holder or (ii) a
Company which has executed and delivered to the Agent a Security
Document.
(j) FURTHER EQUITY SECURITIES TO BE PLEDGED WITH AGENT UPON REQUEST.
Notwithstanding any inconsistent term and conditions contained in the
Security Documents, within 5 Banking Days of a written request of the
Agents, the certificates representing further equity securities issued
pursuant to the conditions contained in Subsection (i) of this section
shall be deposited in the pledge with the Agent.
(k) RELATED PARTY TRANSACTIONS. The Borrowers shall not, and shall not
permit any Guarantor to, enter into related party transactions,
except:
(i) on arm's length terms in the ordinary course of business, or
(ii) between Obligors.
(l) REGULATION U OR X. The Borrowers shall not, and shall not suffer or
permit any Subsidiary to, engage in the business of extending credit
for the purpose of purchasing or carrying margin stock. The Borrowers
shall not use any of the proceeds of any credit extended hereunder to
"purchase" or "carry" any "margin stock" as defined in Regulation U of
the F.R.S. Board.
(m) NATIONAL CITY BANK LOAN DOCUMENTS. The Borrowers shall not suffer or
permit Target to amend, modify, supplement or restate the National
City Bank Loan Documents without the prior written consent of the
Lenders.
ARTICLE 12
CONDITIONS PRECEDENT
12.1 CONDITIONS PRECEDENT TO ALL CREDIT. The obligation of the Lenders to extend
credit hereunder is subject to fulfilment of the following conditions precedent
at the time such credit is made available:
(a) no Default has occurred and is continuing or would arise immediately
after giving effect to or as a result of such extension of credit;
(b) the Borrowers shall have complied with the requirements of Article 4,
Article 5 or Article 6, as the case may be, in respect of the relevant
extension of credit; and
(c) the representations and warranties of the Borrowers contained in
Section 10.1 and of the Obligors under the Guarantee and the Security
Documents shall be true and correct in all material respects on the
date such credit is made available as if such representations and
warranties were made on such date.
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12.2 CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT. The effectiveness of
this agreement is subject to fulfilment of the following conditions precedent:
(a) the conditions precedent set forth in Section 12.1 have been
fulfilled;
(b) the Fee Letter shall have been executed and delivered by the parties
thereto and the Borrowers shall have paid the fees due thereunder;
(c) each Guarantor shall have executed and delivered to the Agent the
Guarantee;
(d) each Obligor shall have executed and delivered to the Agent a
confirmation that the Security Documents listed in Section I of
Schedule N to which each is a signatory collaterally secures its
respective Secured Obligations;
(e) the Security Documents listed in Section II of Schedule N and any
documents in connection therewith as the Agent may require shall have
been executed and delivered to the Agent in form and substance
satisfactory to the Agent;
(f) an amending agreement, in form and substance satisfactory to the
Agent, shall have been entered into by X.X. Xxxxxxxxxxx, Inc., Kansas
Motor Freight Corp., Vitran Express West, Inc. and Vitran Corporation
in respect of each Security Document to which each is a party;
(g) the Agent has received, in form and substance satisfactory to the
Agent:
(i) a duly certified resolution of the board of directors of each
Obligor authorizing it to execute, deliver and perform its
obligations under the Loan Documents to which it is a signatory;
(ii) a certificate of a senior officer of each Obligor setting forth
specimen signatures of the individuals authorized to sign on
their respective behalf;
(iii) a certificate of status or good standing for each Obligor issued
by the appropriate governmental body or agency of the
jurisdiction in which such Obligor is incorporated or formed;
(iv) a certificate of a senior officer of each Borrower certifying
that no Default has occurred and is continuing or would occur or
continue immediately after this agreement becoming effective;
(v) opinions of the Obligors' legal counsel with respect to, inter
alia, each Obligor, the enforceability of this agreement, and the
documents referenced in Sections 12.2(b), (c), (d), (e) and (f)
and as to such other matters as the Agent may reasonably request,
and otherwise in form and substance satisfactory to the Agent;
and
(vi) insurance binders, certificates of insurance and statements of
coverage with respect to all insurance required to be maintained
by the Obligors
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hereunder, with the Agent named as loss payee or additional
insured, as applicable.
(h) the Agent and its counsel shall be satisfied that all Applicable Laws
have been complied with, all material agreements have been entered
into and all necessary governmental, corporate and other third party
consents and approvals have been obtained with respect to this
agreement and the transactions contemplated herein;
(i) all documents and instruments shall have been properly registered,
recorded and filed in all places which, searches shall have been
conducted in all jurisdictions which, and deliveries of all consents,
approvals, acknowledgments, undertakings, directions, negotiable
documents of title and other documents and instruments to the Agent
shall have been made which, in the opinion of the Agent's counsel, are
necessary to make effective the Security created or intended to be
created by the Companies pursuant to the Security Documents and to
ensure the perfection and the intended first ranking priority (subject
to Permitted Liens) of such security;
(j) no Material Adverse Change has occurred;
(k) the Agent shall have completed, to its satisfaction in its sole
discretion, a due diligence review with respect to the assets,
liabilities (including, for certainty, any environmental liability)
and capitalization of Vitran, its financial condition and prospects,
and the transactions contemplated herein;
(l) the Lenders shall have completed, to their satisfaction in their sole
and absolute discretion, a due diligence review of all financial,
business, legal, tax, accounting and environmental matters with
respect to the Obligors and the transactions contemplated hereby
including (i) the assets and operations of Target, (ii) drafts of the
Purchase Agreements and the Transaction, (iii) the Financial
Statements, (iv) Vitran's consolidated pro forma balance sheet after
giving effect to the Transaction, (v) the unaudited consolidated
financial statements of Target for the six month period ended June 30,
2006, (vi) the audited consolidated financial statements of Target for
the Fiscal Year ended December 31, 2005, (vii) a three-year pro forma
consolidated financial forecast of the U.S. Borrower (after giving
effect to the Transaction), (viii) the financing of the Transaction,
and (ix) the National City Bank Loan Documents; and
(m) the Lenders shall be satisfied that Target's trailing twelve-month
EBITDA, as at June 30, 2006, is not less than US$18,000,000.
12.3 CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT UNDER CREDIT FACILITY 3.
The obligation of the Lenders to extend credit under Credit Facility 3 is
subject to fulfilment of the following conditions precedent at the time such
credit is extended:
(a) the Lenders shall be satisfied, in their sole and absolute discretion,
that the restrictions set forth in Section 11.2(h), in respect of the
subject Acquisition, shall have been complied with;
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(b) no Default has occurred and is continuing or would arise immediately
after giving effect to or as a result of such extension of credit or
completion of the subject Acquisition;
(c) there shall be no litigation, investigation or governmental proceeding
outstanding, pending or threatened in writing which would have the
effect of enjoining or restricting the completion of the subject
Acquisition or the extension of credit hereunder or which could
reasonably be expected to have a Material Adverse Effect;
(d) the Agent shall have received a duly executed and completed compliance
certificate, in the form attached as Schedule C hereto and calculated
on a pro forma basis after giving effect to the subject Acquisition,
evidencing compliance with the terms of this agreement; and
(e) the Debt to EBITDA Ratio, after giving effect to the subject
Acquisition, shall be less than 2.25 to 1.0.
12.4 WAIVER. The terms and conditions of Sections 12.1, 12.2 and 12.3 are
inserted for the sole benefit of the Agent and the Lenders and the Agent with
the approval of the Lenders in accordance with Section 14.4 may waive such terms
and conditions in whole or in part, with or without terms or conditions, in
respect of any extension of credit, without prejudicing their right to assert
them in whole or in part in respect of any other extension of credit.
ARTICLE 13
DEFAULT AND REMEDIES
13.1 EVENTS OF DEFAULT. Upon the occurrence of any one or more of the following
events, unless expressly waived in accordance with Section 14.4:
(a) the Borrowers default in payment of any amount which is payable by the
Borrowers under the Loan Documents when the same is due and payable;
(b) the commencement by any Company of proceedings for the dissolution,
liquidation or winding-up of such Company or any such proceedings are
commenced against any Company by a third party and such proceedings
commenced by a third party are not being contested in good faith and
by appropriate proceedings or, if so contested, such proceedings
continue, without being stayed, for more than 20 Banking Days;
(c) any Company ceases or threatens to cease to carry on its business or
is adjudged or declared bankrupt or insolvent or admits its inability
to pay its debts generally as they become due or fails to pay its
debts generally as they become due or files an assignment or petition
in bankruptcy or a petition to take advantage of any insolvency
statute or makes an assignment for the general benefit of its
creditors, petitions or applies to any tribunal for, or consents to,
the appointment of a receiver or trustee for it or for any part of its
property (or such a receiver or trustee is appointed for it or any
part of its property), or files a notice of intention
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to file a proposal, or commences (or any other Person commences) any
proceedings relating to it under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction whether now or hereafter in effect
(provided that, if such proceedings are commenced by another Person,
such proceedings are being diligently defended and have not been
discharged, vacated or stayed within 20 Banking Days after
commencement), or by any act indicates its consent to, approval of, or
acquiescence in, any such proceeding for it or for any part of its
property, or suffers the appointment of any receiver or trustee,
sequestrator or other custodian;
(d) any representation or warranty made by any Company in any Loan
Document or in any other document, agreement or instrument delivered
pursuant hereto or referred to herein proves to have been incorrect in
any material respect when made or furnished;
(e) a writ, execution, attachment or similar process is issued or levied
against all or any portion of any property or asset of any Company in
connection with any judgment against such Company in an amount
exceeding US$3,000,000 or the Canadian Dollar Equivalent thereof and
such writ, execution, attachment or similar process is not released,
bonded, satisfied, discharged, vacated or stayed;
(f) the breach or failure of due observance or performance by any Company
of any covenant or provision of any of the Loan Documents, other than
those heretofore or hereafter dealt with in this Section 13.1, which
is not remedied within five Banking Days after written notice of such
breach or failure has been given by the Agent to the Borrowers;
(g) one or more encumbrancers, lienors or landlords take possession of any
property, assets or undertaking of any Company having a fair market
value in excess of US$3,000,000 or the Canadian Dollar Equivalent
thereof or enforce their security or other remedies against any part
of the assets, property and undertaking of any Company having a fair
market value in excess of US$3,000,000 or the Canadian Dollar
Equivalent thereof and such action is not being contested in good
faith and by appropriate proceedings or, if so contested, such
possession or enforcement proceedings continue, without being
discharged, vacated or stayed, for more than 20 Banking Days;
(h) an event of default (after the giving of all applicable notices or the
expiry of all applicable grace periods) under any one or more
agreements, indentures or instruments under which any Company has
outstanding Debt in excess of US$3,000,000 or the Canadian Dollar
Equivalent thereof or under which Debt in excess of US$3,000,000 or
the Canadian Dollar Equivalent thereof is outstanding which is
guaranteed by any Company shall happen and be continuing, or Debt of
or guaranteed by any Company in excess of US$3,000,000 or the Canadian
Dollar Equivalent thereof which is payable on demand is not paid on
demand;
(i) the occurrence of a Material Adverse Change;
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(j) any one or more of the Loan Documents is determined by a court of
competent jurisdiction not to be a legal, valid and binding obligation
of the Company which is a party thereto, enforceable by the Agent
against such Company and such Loan Document has not been replaced by a
legal, valid, binding and enforceable document which is equivalent in
effect to such Loan Document, assuming such Loan Document had
originally been legal, valid, binding and enforceable, in form and
substance acceptable to the Agent, within 30 days of such
determination, provided, however, that such grace period shall only be
provided if the applicable Company actively cooperates with the Agent
to so replace such Loan Document;
(k) Vitran Express or any of the Guarantors ceases to be a Subsidiary;
(l) any Person or group of Persons acting in concert acquires beneficial
ownership of shares of Vitran having attached thereto at least 20% of
the voting rights attached to all of the shares of Vitran; or
(m) any one or more of the Security Documents is determined by a court of
competent jurisdiction not to be valid and enforceable by the Agent or
the Lenders, as the case may be, against the relevant Obligor, and any
such document has not been replaced by a valid and enforceable
document and equivalent in effect to such document, assuming such
document had originally been valid and enforceable, in form and
substance acceptable to the Agents, within thirty (30) days of such
determination, provided, however, that such grace period shall only be
provided if the relevant Obligor actively cooperates with the Agent to
so replace such document.
the Agent, at the direction of the Majority Lenders, by notice to the Borrowers
and subject to Section 14.8, may terminate the Credit Facilities and, by such
notice or by further notice, may declare all indebtedness of the Borrowers to
the Lenders pursuant to this agreement (including all accrued and unpaid
interest and fees hereunder) to be immediately due and payable whereupon all
such indebtedness shall immediately become and be due and payable and the
Security shall immediately become enforceable without further demand or other
notice of any kind, all of which are expressly waived by the Borrowers to the
extent permitted by Applicable Laws (provided, however, that the Credit
Facilities shall terminate and all such indebtedness of the Borrowers to the
Lenders shall automatically become due and payable, without notice of any kind,
upon the occurrence of an event described in clause (b) or (c) above). The
repayment of the aforesaid indebtedness shall include, without limitation, the
prepayment of all outstanding Bankers' Acceptances and Letters.
13.2 BANKERS' ACCEPTANCES. If any repayment or prepayment by the Borrowers
hereunder shall require the prepayment of a Bankers' Acceptance on any day other
than the last day of its term, the amount of such repayment or prepayment of a
Bankers' Acceptance shall be the present value of the face amount of such
Bankers' Acceptance based on its maturity date, such present value to be
calculated using a discount rate equal to the yield of Government of Canada
treasury bills having a similar maturity date. Upon the payment by the Borrowers
to the Lenders of the present value of the face amount of all Bankers'
Acceptances issued and
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outstanding hereunder as aforesaid, the Borrowers shall have no further
liability to the Lenders with respect to such Bankers' Acceptances.
13.3 LETTERS. If any repayment or prepayment by the Borrowers hereunder shall
require the prepayment of a Letter on any day other than the day of payment
thereunder by the Issuing Lender, the amount of such repayment or prepayment of
a Letter shall be the then contingent liability of the Issuing Lender
thereunder. Upon the payment by the Borrowers to the Agent of the then
contingent liability of the Issuing Lender under all outstanding Letters, the
Agent shall deposit such payment to the Cash Collateral Account and shall apply
funds in the Cash Collateral Account to (a) satisfy any reimbursement
obligations of the Borrowers to the Issuing Lender under Section 9.6 or (b)
refund to the Borrowers any amounts payable by the Issuing Lender to the
Borrower under Section 13.4.
13.4 REFUND OF OVERPAYMENTS. With respect to each Letter for which the Issuing
Lender has been paid all of its contingent liability pursuant to Section 9.2,
9.7 or 13.1 and provided that all amounts due by the Borrowers to the Agent
under Section 9.2, 9.7 or 13.1 have been paid, the Issuing Lender agrees to pay
to the Borrowers, upon the earlier of:
(a) the date on which either the original counterpart of such Letter is
returned to the Issuing Lender for cancellation or the Issuing Lender
is released by the beneficiary thereof from any further obligations in
respect of such Letter;
(b) the expiry of such Letter; and
(c) the Issuing Lender is permanently enjoined by a court of competent
jurisdiction from honouring such Letter pursuant to a final Order;
an amount equal to any excess of the amount received by the Issuing Lender
hereunder in respect of its contingent liability under such Letter over the
total of amounts applied to reimburse the Issuing Lender for amounts paid by it
under or in connection with such Letter (the Issuing Lender having the right to
so appropriate such funds).
13.5 REMEDIES CUMULATIVE. The Borrowers expressly agree that the rights and
remedies of the Agent and the Lenders under this agreement are cumulative and in
addition to and not in substitution for any rights or remedies provided by law.
Any single or partial exercise by the Agent or any of the Lenders of any right
or remedy for a default or breach of any term, covenant or condition in this
agreement does not waive, alter, affect or prejudice any other right or remedy
to which the Agent or such Lender may be lawfully entitled for the same default
or breach. Any waiver by the Agent with the approval of the Majority Lenders of
the strict observance, performance or compliance with any term, covenant or
condition of this agreement is not a waiver of any subsequent default and any
indulgence by the Lenders with respect to any failure to strictly observe,
perform or comply with any term, covenant or condition of this agreement is not
a waiver of the entire term, covenant or condition or any subsequent default.
13.6 SET OFF. In addition to any rights now or hereafter granted under
applicable law, and not by way of limitation of any such rights, after the
occurrence of an Event of Default which is continuing, the Agent and each Lender
is authorized, without notice to the Borrowers or to any other person, any such
notice being expressly waived by the Borrowers, to set off,
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appropriate and apply any and all deposits, matured or unmatured, general or
special, and any other indebtedness at any time held by or owing by the Agent or
such Lender, as the case may be, to or for the credit of or the account of any
Borrower against and on account of the obligations and liabilities of such
Borrower which are due and payable to the Agent or such Lender, as the case may
be, under this agreement.
ARTICLE 14
THE AGENT
14.1 APPOINTMENT AND AUTHORIZATION OF AGENT.
(a) Each Lender hereby appoints and authorizes, and hereby agrees that it
will require any assignee of any of its interests herein (other than
the holder of a participation in its interests herein) to appoint and
authorize the Agent to take such actions as agent on its behalf and to
exercise such powers hereunder as are delegated to the Agent by such
Lender by the terms hereof, together with such powers as are
reasonably incidental thereto. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable to any of the
Lenders for any action taken or omitted to be taken by it or them
hereunder or in connection herewith, except for its own gross
negligence or wilful misconduct and each Lender hereby acknowledges
that the Agent is entering into the provisions of this Section 14.1 on
its own behalf and as agent and trustee for its directors, officers,
employees and agents.
(b) Without prejudice to the provisions of Section 14.1(a) or under any
other Loan Document and to the extent applicable, each of the Lenders
hereby acknowledges that the Agent (or a collateral agent designated
by the Agent) shall, for the purposes of holding any security granted
any Obligor on the property of such Obligor pursuant to the laws of
the Province of Quebec, be the holder of an irrevocable power of
attorney (fonde de pouvoir) (within the meaning of Article 2692 of the
Civil Code of Quebec) for all present and future Lenders and in
particular for all present and future holders of any bond issued an
Obligor to the Agent and secured by a hypothec granted by such Obligor
pursuant to the laws of the Province of Quebec. Each of the Lenders
hereby irrevocably constitutes, to the extent necessary, the Agent (or
such designated collateral agent) as the holder of such irrevocable
power of attorney (fonde de pouvoir) (within the meaning of Article
2692 of the Civil Code of Quebec) in order to hold security granted by
such Obligor in the Province of Quebec. Each Transferee shall be
deemed to have confirmed and ratified the constitution of the Agent as
the holder of such irrevocable power of attorney (fonde de pouvoir) by
execution of the relevant form of assignment. Notwithstanding the
provisions of Section 32 of An Act respecting the Special Powers of
Legal Persons (Quebec), the Borrowers, for and on their own behalf on
behalf of the Guarantors, and the Lenders irrevocably agree that the
Agent may acquire and be the holder of any bond issued by an Obligor
and secured by a hypothec granted by the such Obligor pursuant to the
laws of the Province of Quebec at any time and from time to time. The
Borrowers, for and on their own behalf on behalf of the Guarantors,
hereby
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acknowledge that any such bond constitutes a title of indebtedness, as
such term is used in Article 2692 of the Civil Code of Quebec.
14.2 INTEREST HOLDERS. The Agent may treat each Lender set forth in Schedule
ERROR! REFERENCE SOURCE NOT FOUND. hereto or the person designated in the last
notice delivered to it under Section 16.6 as the holder of all of the interests
of such Lender hereunder.
14.3 CONSULTATION WITH COUNSEL. The Agent may consult with legal counsel
selected by it as counsel for the Agent and the Lenders and shall not be liable
for any action taken or not taken or suffered by it in good faith and in
accordance with the advice and opinion of such counsel.
14.4 DOCUMENTS. The Agent shall not be under any duty to the Lenders to examine,
enquire into or pass upon the validity, effectiveness or genuineness of this
agreement or any instrument, document or communication furnished pursuant to or
in connection herewith and the Agent shall, as regards the Lenders, be entitled
to assume that the same are valid, effective and genuine, have been signed or
sent by the proper parties and are what they purport to be.
14.5 AGENT AS LENDER. With respect to those portions of the Credit Facilities
made available by it, the Agent shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not the Agent.
The Agent and its affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrowers and their affiliates
and persons doing business with the Borrowers and/or any of their affiliates as
if it were not the Agent and without any obligation to account to the Lenders
therefor.
14.6 RESPONSIBILITY OF AGENT. The duties and obligations of the Agent to the
Lenders hereunder are only those expressly set forth herein. The Agent shall not
have any duty to the Lenders to investigate whether a Default or an Event of
Default has occurred. The Agent shall, as regards the Lenders, be entitled to
assume that no Default or Event of Default has occurred and is continuing unless
the Agent has actual knowledge or has been notified by the Borrowers of such
fact or has been notified by a Lender that such Lender considers that a Default
or Event of Default has occurred and is continuing, such notification to specify
in detail the nature thereof.
14.7 ACTION BY AGENT. The Agent shall be entitled to use its discretion with
respect to exercising or refraining from exercising any rights which may be
vested in it on behalf of the Lenders by and under this agreement; provided,
however, that the Agent shall not exercise any rights under Section 13.1 or
expressed to be on behalf of or with the approval of the Majority Lenders
without the request, consent or instructions of the Majority Lenders.
Furthermore, any rights of the Agent expressed to be on behalf of or with the
approval of the Majority Lenders shall be exercised by the Agent upon the
request or instructions of the Majority Lenders. The Agent shall incur no
liability to the Lenders hereunder with respect to anything which it may do or
refrain from doing in the reasonable exercise of its judgment or which may seem
to it to be necessary or desirable in the circumstances, except for its gross
negligence or wilful misconduct. The Agent shall in all cases be fully protected
in acting or refraining from acting hereunder in accordance with the
instructions of the Majority Lenders and any action taken or failure to act
pursuant to such instructions shall be binding on all Lenders. In respect of any
notice by or
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action taken by the Agent hereunder, the Borrowers shall at no time be obliged
to enquire as to the right or authority of the Agent to so notify or act.
14.8 NOTICE OF EVENTS OF DEFAULT. In the event that the Agent shall acquire
actual knowledge or shall have been notified of any Default or Event of Default,
the Agent shall promptly notify the Lenders and shall take such action and
assert such rights under Section 13.1 of this agreement as the Majority Lenders
shall request in writing and the Agent shall not be subject to any liability by
reason of its acting pursuant to any such request. If the Majority Lenders shall
fail for five Banking Days after receipt of the notice of any Default or Event
of Default to request the Agent to take such action or to assert such rights in
respect of such Default or Event of Default, the Agent may, but shall not be
required to, and subject to subsequent specific instructions from the Majority
Lenders, take such action or assert such rights (other than rights under Section
13.1 of this agreement and other than giving an express waiver of any Default or
any Event of Default) as it deems in its discretion to be advisable for the
protection of the Lenders except that, if the Majority Lenders have instructed
the Agent not to take such action or assert such rights, in no event shall the
Agent act contrary to such instructions unless required by law to do so.
14.9 RESPONSIBILITY DISCLAIMED. The Agent shall be under no liability or
responsibility whatsoever as agent hereunder:
(a) to the Borrowers or any other person as a consequence of any failure
or delay in the performance by, or any breach by, any other Lender or
Lenders of any of its or their obligations hereunder;
(b) to any Lender or Lenders as a consequence of any failure or delay in
performance by, or any breach by, the Borrowers of any of their
obligations hereunder; or
(c) to any Lender or Lenders for any statements, representations or
warranties herein or in any other documents contemplated hereby or in
any other information provided pursuant to this agreement or any other
documents contemplated hereby or for the validity, effectiveness,
enforceability or sufficiency of this agreement or any other document
contemplated hereby.
14.10 INDEMNIFICATION. The Lenders agree to indemnify the Agent (to the extent
not reimbursed by the Borrowers) pro rata according to the Pro Rata Share of
each of them from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this agreement or any
other document contemplated hereby or any action taken or omitted by the Agent
under this agreement or any document contemplated hereby, except that no Lender
shall be liable to the Agent for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful misconduct of the
Agent.
14.11 CREDIT DECISION. Each Lender represents and warrants to the Agent that:
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(a) in making its decision to enter into this agreement and to make its
Pro Rata Share of an extension of credit available to the Borrowers,
it is independently taking whatever steps it considers necessary to
evaluate the financial condition and affairs of the Borrowers and that
it has made an independent credit judgment without reliance upon any
information furnished by the Agent; and
(b) so long as any portion of the Credit Facilities is being utilized by
the Borrowers, it will continue to make its own independent evaluation
of the financial condition and affairs of the Borrowers.
14.12 SUCCESSOR AGENT.
(a) Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by giving 30 days
written notice thereof to the Lenders. Upon any such resignation, the
Majority Lenders shall have the right to appoint a successor Agent who
shall be one of the Lenders unless none of the Lenders wishes to
accept such appointment. If no successor Agent shall have been so
appointed and shall have accepted such appointment by the time of such
resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent which shall be a bank listed in Schedule 1
to the Bank Act (Canada) which has an office in Toronto. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges, duties and obligations of the
retiring Agent (in its capacity as Agent but not in its capacity as a
Lender) and the retiring Agent shall be discharged from its duties and
obligations hereunder (in its capacity as Agent but not in its
capacity as a Lender). After any retiring Agent's resignation or
removal hereunder as the Agent, provisions of this Article 14 shall
continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
(b) The Lenders (other than the Agent in its capacity as Lender) shall
have the right, upon unanimous agreement of such Lenders, to terminate
by notice in writing to the Agent the appointment of the Agent
hereunder in the event of the wilful misconduct or gross negligence by
the Agent of its obligations as Agent hereunder. Upon such
termination, such Lenders may appoint a successor Agent in the same
manner as set out in Section 14.12(a) above.
14.13 DELEGATION BY AGENT. With the prior approval of the Majority Lenders, the
Agent shall have the right to delegate any of its duties or obligations
hereunder as Agent to any affiliate of the Agent so long as the Agent shall not
thereby be relieved of such duties or obligations.
14.14 WAIVERS AND AMENDMENTS.
(a) Subject to Sections 14.14(b) and (c), any term, covenant or condition
of this agreement may only be amended with the consent of the
Borrowers and the
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Majority Lenders or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively) by the Majority Lenders and in any such event the
failure to observe, perform or discharge any such covenant, condition
or obligation, so amended or waived (whether such amendment is
executed or such consent or waiver is given before or after such
failure), shall not be construed as a breach of such covenant,
condition or obligation or as a Default or Event of Default.
(b) Notwithstanding Section 14.14(a), without the prior written consent of
each Lender, no such amendment or waiver shall directly:
(i) increase the amount of any Credit Facility or the amount of the
Individual Commitment of any Lender;
(ii) extend the Maturity Date;
(iii) extend the time for the payment of the interest on any Loan,
forgive any portion of principal thereof, reduce the amount of
any instalment under Section 9.1, reduce the stated rate of
interest thereon or amend the requirement of pro rata application
of all amounts received by the Agent in respect thereof;
(iv) change the percentage of the Lenders' requirement to constitute
the Majority Lenders or otherwise amend the definition of
Majority Lenders;
(v) reduce the stated amount of any fees to be paid pursuant to
Article 7 of this agreement;
(vi) permit any subordination of the indebtedness hereunder;
(vii) release a Guarantee or any Security Documents in whole or in
part;
(viii) alter the terms of this Section 14.14, or
(ix) for so long as there are three or fewer Lenders, amend or waive
any of Sections 11.1(b) - (d).
(c) Without the prior written consent of the Agent, no amendment to or
waiver of Sections 14.1 through 14.13 or any other provision hereof to
the extent it affects the rights or obligations of the Agent shall be
effective.
(d) Without the prior written consent of the Issuing Lender, no amendment
to or waiver of Article 14 or any other provision hereof to the extent
it affects the rights or obligations of the Issuing Lender shall be
effective.
(e) Notwithstanding Section 14.14(b)(vii), the Agent shall be entitled,
without the consent of any Lender, to execute and deliver a release or
discharge of any
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Security over any assets of the Obligors at the time of any Permitted
Disposition with respect to such assets.
14.15 DETERMINATION BY AGENT CONCLUSIVE AND BINDING. Any determination to be
made by the Agent on behalf of or with the approval of the Lenders or the
Majority Lenders under this agreement shall be made by the Agent in good faith
and, if so made, shall be binding on all parties, absent manifest error.
14.16 REDISTRIBUTION OF PAYMENT. If a Lender shall receive payment of a portion
of the aggregate amount of principal and interest due to it under the Credit
Facilities which is greater than the proportion received by any other Lender in
respect of the aggregate amount of principal and interest due in respect of the
Credit Facilities (having regard to the respective Individual Commitments of the
Lenders with respect to the Credit Facilities), the Lender receiving such
proportionately greater payment shall purchase a participation (which shall be
deemed to have been done simultaneously with receipt of such payment) in that
portion of the aggregate outstanding credit of the other Lender or Lenders under
the Credit Facilities so that the respective receipts shall be pro rata to their
respective participation in the extensions of credit under the Credit
Facilities; provided, however, that if all or part of such proportionately
greater payment received by such purchasing Lender shall be recovered from the
Borrowers, such purchase shall be rescinded and the purchase price paid for such
participation shall be returned by such selling Lender or Lenders to the extent
of such recovery, but without interest.
14.17 ADJUSTMENTS AMONG LENDERS AFTER ACCELERATION.
(a) The relevant Lenders agree that, at any time after all indebtedness of
the Borrowers to such Lenders pursuant hereto has become immediately
due and payable pursuant to Section 13.1 or after the cancellation or
termination of a Credit Facility, they will at any time or from time
to time upon the request of any relevant Lender through the Agent
purchase portions of the availments made available by the other
relevant Lenders which remain outstanding, and make any other
adjustments which may be necessary or appropriate, in order that the
amounts of the availments made available by the respective Lenders
which remain outstanding, as adjusted pursuant to this Section 14.17,
will be in the same proportions as their respective Pro Rata Shares
thereof with respect to such Credit Facility immediately prior to such
acceleration, cancellation or termination.
(b) The relevant Lenders agree that, at any time after all indebtedness of
the relevant Borrowers to such Lenders pursuant hereto has become
immediately due and payable pursuant to Section 13.1 or after the
cancellation or termination of a Credit Facility, the amount of any
repayment made by such Borrowers under this agreement, and the amount
of any proceeds of the exercise of any rights or remedies of such
Lenders under the Loan Documents, which are to be applied against
amounts owing hereunder as principal, will be so applied in a manner
such that to the extent possible, the availments made available by the
respective Lenders which remain outstanding, after giving effect to
such application, will be in the same proportions as their respective
Pro Rata Shares thereof with respect to
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such Credit Facility immediately prior to the cancellation of
termination thereof immediately prior to such acceleration,
cancellation or termination.
(c) For greater certainty, the Lenders acknowledge and agree that without
limiting the generality of the provisions of Section 14.17(a) and
14.17(b), such provisions will have application if and whenever any
Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, compensation, or
otherwise) on account of any monies owing or payable by a Borrower to
it under the Loan Documents in excess of its pro rata share of
payments on account of monies owing by such Borrower to all Lenders
hereunder.
(d) Each Borrower agrees to be bound by and to do all things necessary or
appropriate to give effect to any and all purchases and other
adjustments made by and between the Lenders pursuant to this Section
14.17.
14.18 DISTRIBUTION OF NOTICES. Within one Banking Day of receipt by the Agent of
any notice or other document which is delivered to the Agent hereunder on behalf
of the Lenders, the Agent shall provide a copy of such notice or other document
to each of the Lenders
14.19 DECISION TO ENFORCE SECURITY. The Security shall become enforceable as
provided in Article 13. Upon the Security becoming enforceable as aforesaid, the
Agent shall promptly so notify each of the Lenders. Any Lender may thereafter
provide the Agent with a written request to enforce the Security. Forthwith
after the receipt of such a request, the Agent shall seek the instructions of
the Majority Lenders as to whether the Security should be enforced and the
manner in which the Security should be enforced. In seeking such instructions,
the Agent shall submit a specific proposal to the Lenders. The Agent shall
promptly notify the Lenders of all instructions and approvals of the Majority
Lenders.
14.20 ENFORCEMENT. The Agent reserves the sole right to enforce, or otherwise
deal with, the Security and to deal with the Obligors in connection therewith;
provided, however, that the Agent shall so enforce, or otherwise deal with, the
Security as the Majority Lenders shall instruct.
14.21 APPLICATION OF CASH PROCEEDS OF REALIZATION.
(a) All Proceeds of Realization not in the form of cash shall be forthwith
delivered to the Agent and disposed of, or realized upon, by the Agent
in such manner as the Majority Lenders may approve so as to produce
Cash Proceeds of Realization.
(b) Subject to the claims, if any, of secured creditors of the Obligors
whose security ranks in priority to the Security, all Cash Proceeds of
Realization shall be applied and distributed, and the claims of the
Lenders shall be deemed to have the relative priorities which would
result in the Cash Proceeds of Realization being applied and
distributed, as follows:
(i) firstly, to the payment of all reasonable costs and expenses
incurred by or on behalf of the Agent (including, without
limitation, all legal fees and disbursements) in the exercise of
all or any of the powers granted to it
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hereunder or under the Security Documents or the Guarantee and in
payment of all of the remuneration of any Receiver and all costs
and expenses properly incurred by such Receiver (including,
without limitation, all legal fees and disbursements) in the
exercise of all or any powers granted to it under the Security
Documents;
(ii) secondly, in payment of all amounts of money borrowed or advanced
by the Agent or such Receiver pursuant to the Security Documents
and any interest thereon;
(iii) thirdly, to the payment or prepayment of the Secured Obligations
(including holding as cash collateral to be applied against
Secured Obligations which have not then matured) to the Finance
Parties pro rata in accordance with the relative amount of the
Secured Obligations owing to each of them; and
(iv) the balance, if any, to the Borrowers or otherwise in accordance
with Applicable Law.
14.22 SECURITY DOCUMENTS. As continuing collateral security for the Secured
Obligations, the Borrowers shall and shall cause the Guarantors to, execute and
deliver the Guarantee and the Security Documents. The Guarantee and the Security
Documents shall be entered into in favour of the Agent for the rateable benefit
of the Finance Parties. The Agent declares that it shall hold the Security, the
Secured Assets charged by the Security Documents and the rights granted to it
under the Loan Documents for its own benefit and in its capacity as agent for
the rateable benefit of each Finance Party.
14.23 DISCHARGE OF SECURITY.
(a) To the extent a sale or other disposition of the Secured Assets is
permitted pursuant to the provisions hereof, the Lenders hereby
authorize the Agent, at the cost and expense of the Borrowers, to
execute such discharges and other instruments which are necessary for
the purposes of releasing and discharging the security interest of the
Lenders and the Agent therein or for the purposes of recording the
provisions or effect thereof in any office where the Security
Documents may be registered or recorded or for the purpose of more
fully and effectively carrying out the provisions of this Section
14.23.
(b) The Security shall terminate when the Credit Facilities have
terminated and the Secured Obligations have been fully satisfied. Upon
the Security terminating, the Agent shall execute and deliver, at the
sole expense of the Borrowers, all such discharges and releases as the
Borrowers may reasonably require to give effect thereto.
ARTICLE 15
GUARANTEE OF BORROWERS
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15.1 GUARANTEE. Each of the Borrowers hereby unconditionally, absolutely and
irrevocably guarantees the full and punctual payment to the Finance Parties as
and when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all of the Secured Obligations of the
other Borrowers in the same currency as the currency of the Secured Obligations
of such other Borrowers, whether for principal, interest, fees, expenses,
indemnities or otherwise.
15.2 NATURE OF GUARANTEE. The agreement of each Borrower under Section 15.1
shall in all respects be a continuing, absolute, unconditional and irrevocable
guarantee of payment when due and not of collection, and shall remain in full
force and effect until all Secured Obligations of the other Borrowers have been
paid in full, all obligations of such Borrower under this Article 15 have been
paid in full and any and all commitments, actual or contingent, of the Finance
Parties to the other Borrowers have been permanently terminated. Each of the
Borrowers guarantees that the Secured Obligations of the other Borrowers will be
paid strictly in accordance with their respective terms, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Finance Parties with respect thereto
(provided the Borrowers shall not be in breach of any such law, regulation or
order by doing so).
15.3 LIABILITY NOT LESSENED OR LIMITED. Subject to the provisions hereof, the
liability of the Borrowers under this Article 15 shall be absolute,
unconditional and irrevocable irrespective of, and without being lessened or
limited by:
(a) any lack of validity, legality, effectiveness or enforceability of any
of the agreements or instruments evidencing any of the Secured
Obligations of the Borrowers;
(b) the failure of any Finance Party:
(i) to assert any claim or demand or to enforce any right or remedy
against the Borrowers or any other Person (including any other
guarantor) under the provisions of any of the agreements or
instruments evidencing any of the Secured Obligations of the
Borrowers, or otherwise, or
(ii) to exercise any right or remedy against any other guarantor of,
or collateral securing, any of the Secured Obligations of the
Borrowers;
(c) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Secured Obligations of the Borrowers, or
any other extension, compromise, indulgence or renewal of any Secured
Obligations of the Borrowers;
(d) any reduction, limitation, variation, impairment, discontinuance or
termination of the Secured Obligations of the Borrowers for any reason
(other than by reason of any payment which is not required to be
rescinded), including any claim of waiver, release, discharge,
surrender, alteration or compromise, and shall not be subject to (and
the Borrowers hereby waive any right to or claim of) any defence or
setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability
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of, or any other event or occurrence affecting, the Secured
Obligations of the Borrowers or otherwise (other than by reason of any
payment which is not required to be rescinded);
(e) any amendment to, rescission, waiver or other modification of, or any
consent to any departure from, any of the terms of any of the
agreements or instruments evidencing any of the Secured Obligations of
the Borrowers or any other guarantees or security;
(f) any addition, exchange, release, discharge, renewal, realization or
non-perfection of any collateral security for the Secured Obligations
of the Borrowers or any amendment to, or waiver or release or addition
of, or consent to departure from, any other guarantee held by any
Finance Party as security for any of the Secured Obligations of the
Borrowers;
(g) the loss of or in respect of or the unenforceability of any other
guarantee or other security which any Finance Party may now or
hereafter hold in respect of the Secured Obligations of the Borrowers,
whether occasioned by the fault of any Finance Party or otherwise;
(h) any change in the name of any Borrower, the articles of incorporation,
capital structure, capacity or constitution of any Borrower, the
bankruptcy or insolvency of any Borrower, the sale of any or all of
the business or assets of any Borrower or any Borrower being
consolidated, merged or amalgamated with any other Person;
(i) any payment received on account of the Secured Obligations of the
Borrowers by any Finance Party that it is obliged to repay pursuant to
any applicable law or for any other reason; or
(j) any other circumstance which might otherwise constitute a defence
available to, or a legal or equitable discharge of, the Borrowers, any
surety or any guarantor.
15.4 AGENT NOT BOUND TO EXHAUST RECOURSE. The Agent shall not be bound to pursue
or exhaust its recourse against any Borrower or others or any security or other
guarantees it may at any time hold before being entitled to payment under this
Article 15 from the other Borrowers or to enforce its rights against any
Borrower under the Security Documents to which such Borrower is a party.
15.5 ENFORCEMENT. Upon any of the Secured Obligations of any Borrower becoming
due and payable, each other Borrower shall, upon demand by the Agent, forthwith
pay to the Agent in immediately available funds at the address of the Agent set
forth herein the total amount of the Secured Obligations of such Borrower and
the Agent may forthwith enforce its rights against each Borrower under the
Security Documents to which such Borrower is a party and the Agent shall apply
the sums so paid and realized in such manner as provided for herein. A written
statement of the Agent as to the amount of the Secured Obligations of any
Borrower remaining unpaid to the Finance Parties at any time shall be prima
facie evidence against each
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other Borrower, absent manifest error, as to the amount of the Secured
Obligations of such Borrower remaining unpaid to the Lenders at such time.
15.6 GUARANTEE IN ADDITION TO OTHER SECURITY. The guarantee contained in this
Article 15 shall be in addition to and not in substitution for any other
guarantee or other security which the Agent may now or hereafter hold in respect
of the Secured Obligations of the Borrowers, and the Agent shall be under no
obligation to marshal in favour of the Borrowers any other guarantee or other
security or any moneys or other assets which the Agent may be entitled to
receive or may have a claim upon.
15.7 REINSTATEMENT. The guarantee contained in this Article 15 and all other
terms of this Article 15 shall continue to be effective or shall be reinstated,
as the case may be, if at any time any payment (in whole or in part) of any of
the Secured Obligations of any Borrower is rescinded or must otherwise be
returned or restored by any Finance Party by reason of the insolvency,
bankruptcy or reorganization of such Borrower or for any other reason not
involving the gross negligence or wilful misconduct of any Finance Party, all as
though such payment had not been made.
15.8 WAIVER OF NOTICE, ETC. To the extent permitted by Applicable Law, each
Borrower hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Secured Obligations of each other Borrower and
this agreement.
15.9 SUBROGATION RIGHTS. Until satisfaction in full of all of the Secured
Obligations of a particular Borrower and the termination of all commitments,
actual or contingent, of the Finance Parties to such Borrower, all dividends,
compositions, proceeds of security or payments received by any Finance Party
from any other Borrower or any other Person in respect of the Secured
Obligations of such particular Borrower shall be regarded for all purposes as
payments in gross without any right on the part of the other Borrowers to claim
the benefit thereof in reduction of their liability under this agreement. Except
to the extent necessary to preserve their rights, none of the Borrowers will
exercise any rights which it may acquire by way of subrogation under this
agreement, by any payment made hereunder or otherwise, until the prior
satisfaction in full of all of the Secured Obligations of the Borrowers. Any
amount paid to any Borrower on account of any such subrogation rights prior to
the satisfaction in full of all Secured Obligations of the Borrowers shall be
held in trust for the benefit of the Finance Parties and shall immediately be
paid to the Agent and credited and applied against the Secured Obligations of
such Borrower, whether matured or unmatured; provided, however, that if:
(a) any Borrower has made payment to the Agent of all or any part of the
Secured Obligations of the other Borrowers, and
(b) all Secured Obligations of the other Borrowers have been paid in full
and all commitments of the Finance Parties to the Borrowers have been
permanently terminated,
the Agent agrees that, at such Borrower's request, the Agent will execute and
deliver to such Borrower appropriate documents (without recourse and without
representation or warranty)
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necessary to evidence the transfer by subrogation to such Borrower of an
interest in the Secured Obligations of the other Borrowers resulting from such
payment by such Borrower.
15.10 POSTPONEMENT AND SUBORDINATION OF CLAIMS. If and for so long as an Event
of Default has occurred and is continuing, each Borrower agrees to postpone any
and all claims it may have against the other Borrowers or any Guarantor
(collectively, the "DEBTORS") to the claims of the Finance Parties against the
Debtors, and agrees to refrain from taking any action or commencing any
proceeding against the Debtors or their respective successors or assigns,
whether in connection with a bankruptcy proceeding or otherwise, to recover any
amounts in respect of payments made hereunder to the Agent, although the
Borrowers may take such actions as may be necessary to preserve their claims
against the Debtors. Each Borrower agrees that, if and for so long as an Event
of Default has occurred and is continuing, all indebtedness and liabilities
owing by any Debtor to such Borrower shall be subordinate and junior in right of
payment to the payment in full, in cash or cash equivalents of all of the
Secured Obligations of the Borrowers. In the event any payments are made by a
particular Debtor in contravention of the preceding sentences, the relevant
Borrower shall hold the amount so received in trust for the Finance Parties and
shall forthwith pay such amount to the Agent.
15.11 ADVANCES AFTER CERTAIN EVENTS. All advances, renewals and credits made or
granted by the Finance Parties to or for any Borrower hereunder after the
bankruptcy or insolvency of such Borrower, but before the Finance Parties have
received notice thereof, shall be deemed to form part of the Secured Obligations
of the Borrowers, and all advances, renewals and credits obtained from the
Finance Parties by or on behalf of the Borrowers hereunder shall be deemed to
form part of the Secured Obligations of the Borrowers, notwithstanding any lack
or limitation of power, incapacity or disability of such Borrower or of the
directors or agents thereof and notwithstanding that such Borrower may not be a
legal entity and notwithstanding any irregularity, defect or informality in the
obtaining of such advances, renewals or credits, whether or not the Finance
Parties have knowledge thereof.
ARTICLE 16
MISCELLANEOUS
16.1 WAIVERS. No failure or delay by the Agent, the Lenders or the Majority
Lenders in exercising any remedy, right or power hereunder or otherwise shall
operate as a waiver thereof, except a waiver which is specifically given in
writing by the Agent, and no single or partial exercise of any power, right or
privilege hereunder will preclude any other or further exercise thereof or the
exercise of any other power, right or privilege.
16.2 NOTICES. Subject to Section 1.5, all notices, demands and other
communications provided for herein shall be in writing and shall be personally
delivered to an officer or other responsible employee of the addressee or sent
by telefacsimile, charges prepaid, at or to the applicable addresses or
telefacsimile numbers, as the case may be, set opposite the party's name on the
signature page hereof or at or to such other address or addresses or
telefacsimile number or numbers as any party hereto may from time to time
designate to the other parties in such manner (except in the case of the giving
of the copies of Drawdown Notices, Rollover Notices and Conversion Notices by
the Agent to the Lenders which shall be effected in accordance with instructions
given by the Lenders to the Agent). Notwithstanding the foregoing, any Drawdown
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Notice, Rollover Notice or Conversion Notice may be given by the Borrowers to
the Agent verbally by telephone provided that such verbal notice is promptly
confirmed in writing, such confirmation to be provided in accordance with this
Section 16.2. Any communication which is personally delivered as aforesaid shall
be deemed to have been validly and effectively given on the date of such
delivery if such date is a Banking Day and such delivery was made during normal
business hours of the recipient; otherwise, it shall be deemed to have been
validly and effectively given on the Banking Day next following such date of
delivery. Any communication which is transmitted by telefacsimile as aforesaid
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Banking Day and such transmission was made during
normal business hours of the recipient; otherwise, it shall be deemed to have
been validly and effectively given on the Banking Day next following such date
of transmission.
16.3 SEVERABILITY. Any provision hereof which is prohibited or unenforceable
shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof.
16.4 COUNTERPARTS. This agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original and all of which taken together
shall be deemed to constitute one and the same instrument.
16.5 SUCCESSORS AND ASSIGNS. This agreement shall enure to the benefit of and
shall be binding upon the parties hereto and their respective successors and
permitted assigns.
16.6 PARTICIPATIONS AND ASSIGNMENTS.
(a) Neither the Loan Documents nor the benefit hereof may be assigned by
the Borrowers.
(b) Subject to the consent of the Borrowers, such consent not to be
unreasonably withheld (which consent is not required if an Event of
Default exists), a Lender may at any time sell to one or more other
persons ("PARTICIPANTS") participating interests in any extension of
credit outstanding hereunder, any commitment of the Lender hereunder
or any other interest of the Lender under the Loan Documents. In the
event of any such sale by a Lender of a participating interest to a
Participant, the Lender's obligations under this agreement to the
Borrowers shall remain unchanged, the Lender shall remain solely
responsible for the performance thereof and the Borrowers shall
continue to be obligated to the Lender in connection with the Lender's
rights under this agreement. The Borrowers agree that if amounts
outstanding under this agreement are due and unpaid, or shall have
been declared to be or shall have become due and payable further to
the occurrence of an Event of Default, each Participant shall be
deemed to have the right of setoff in respect of its participating
interest in amounts owing under this agreement to the same extent as
if the amount of its participating interest were owing directly to it
as the Lender under this agreement. The Borrowers also agree that each
Participant shall be entitled to the benefits of Section 8.6 with
respect to its participation hereunder; provided, that no Participant
shall be entitled to receive any greater amount pursuant to such
Section than the Lender would have
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been entitled to receive in respect of the amount of the participation
transferred by the Lender to such Participant had no such transfer
occurred.
(c) Subject to the consent of the Borrowers, such consent not to be
unreasonably withheld, and the consent of the Issuing Lender, which
consent may be arbitrarily withheld, a Lender may at any time sell all
or any part of its rights and obligations under the Credit Facilities
to one or more persons ("PURCHASING LENDERS") provided that (i) such
sale must be in a minimum amount of US$5,000,000 (or the sale of a
lesser amount if it represents all of such Lender's rights and
obligations under the Credit Facilities), (ii) immediately after such
sale, the aggregate Individual Commitments of such Lender must be
either nil or at least US$5,000,000 and (iii) the consent of the
Borrowers shall not be required if an Event of Default has occurred
and is continuing or if such sale is to an affiliate of such Lender.
Upon such sale, the Lender shall, to the extent of such sale, be
released from its obligations under the Credit Facilities and each of
the Purchasing Lenders shall become a party hereto to the extent of
the interest so purchased. Upon such sale, such Lender shall pay to
the Agent an assignment fee in the amount of US$2,500 for each
Purchasing Lender. Any such assignment by a Lender shall not be
effective unless and until the assignee has executed an instrument
substantially in the form of Schedule D hereto whereby such assignee
has agreed to be bound by the terms hereof as a Lender and has agreed
to a specific Individual Commitment with respect to the Credit
Facilities and a specific address and telefacsimile number for the
purpose of notices as provided in Section 16.2. A copy of a fully
executed copy of such instrument shall be promptly delivered to each
of the Agent and the Borrowers by the Purchasing Lender. Upon any such
assignment becoming effective, Schedule D hereto shall be deemed to be
amended to include the assignee as a Lender with the specific
Individual Commitment, address and telefacsimile number as aforesaid
and the Individual Commitment of the Lender making such assignment
shall be deemed to be reduced by the amount of the Individual
Commitment of the assignee. The Borrowers also agree that each
Purchasing Lender shall be entitled to the benefits of Section 8.6
with respect to its purchase hereunder; provided that no Purchasing
Lender shall otherwise be entitled to receive any greater amount
pursuant to such Section then the Lender would have been entitled to
receive in respect of the amount sold by the Lender to such Purchasing
Lender had no such sale occurred.
(d) The Borrowers authorize the Agent and the Lenders to disclose to any
Participant or Purchasing Lender (each, a "TRANSFEREE") and any
prospective Transferee and authorizes each of the Lenders to disclose
to any other Lender any and all financial information in their
possession concerning the Borrowers (other than information which the
Borrowers have designated as confidential) which has been delivered to
them by or on behalf of the Borrowers pursuant to this agreement or
which has been delivered to them by or on behalf of the Borrowers in
connection with their credit evaluation of the Borrowers prior to
becoming a party to this agreement, so long as any such Transferee
agrees not to disclose any confidential, non-public information to any
person other than its non-brokerage affiliates, employees, accountants
or legal counsel, unless required by law, regulation,
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subpoena or similar legal process, in connection with the exercise of
any remedies hereunder or the enforcement of rights under the Loan
Documents, or as requested by regulatory authorities.
16.7 ENTIRE AGREEMENT. This agreement and the agreements referred to herein and
delivered pursuant hereto constitute the entire agreement between the parties
hereto and supersede any prior agreements, commitment letters, fee letters,
undertakings, declarations, representations and understandings, both written and
verbal, in respect of the subject matter hereof.
16.8 FURTHER ASSURANCES. The Borrowers shall from time to time and at all times
hereafter, upon every reasonable request of the Agent, make, do, execute, and
deliver or cause to be made, done, executed and delivered all such further acts,
deeds, assurances and things as may be necessary in the opinion of the Agent for
more effectually implementing and carrying out the true intent and meaning of
this agreement or any agreement delivered pursuant thereto as the Agent may from
time to time request, in form and substance satisfactory to the Agent.
16.9 JUDGMENT CURRENCY.
(a) If, for the purpose of obtaining or enforcing judgment against any
Borrower in any court in any jurisdiction, it becomes necessary to
convert into a particular currency (such currency being hereinafter in
this Section 16.9 referred to as the "JUDGMENT CURRENCY") an amount
due in another currency (such other currency being hereinafter in this
Section 16.9 referred to as the "INDEBTEDNESS CURRENCY") under this
agreement, the conversion shall be made at the rate of exchange
prevailing on the Banking Day immediately preceding:
(i) the date of actual payment of the amount due, in the case of any
proceeding in the courts of the Province of Ontario or in the
courts of any other jurisdiction that will give effect to such
conversion being made on such date; or
(ii) the date on which the judgment is given, in the case of any
proceeding in the courts of any other jurisdiction (the date as
of which such conversion is made pursuant to this Section
16.9(a)(ii) being hereinafter in this Section 16.9 referred to as
the "JUDGMENT CONVERSION DATE").
(b) If, in the case of any proceeding in the court of any jurisdiction
referred to in Section 16.9(a)(ii), there is a change in the rate of
exchange prevailing between the Judgment Conversion Date and the date
of actual payment of the amount due, the Borrowers shall pay to the
appropriate judgment creditor or creditors such additional amount (if
any, but in any event not a lesser amount) as may be necessary to
ensure that the amount paid in the Judgment Currency, when converted
at the rate of exchange prevailing on the date of payment, will
produce the amount of the Indebtedness Currency which could have been
purchased with the amount of Judgment Currency stipulated in the
judgment or judicial order at the rate of exchange prevailing on the
Judgment Conversion Date.
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(c) Any amount due from the Borrowers under the provisions of Section
16.9(b) shall be due to the appropriate judgment creditor or creditors
as a separate debt and shall not be affected by judgment being
obtained for any other amounts due under or in respect of this
agreement.
(d) The term "rate of exchange" in this Section 16.9 means the noon spot
rate of exchange for Canadian interbank transactions applied in
converting the Indebtedness Currency into the Judgment Currency
published by the Bank of Canada for the day in question.
16.10 Waivers of Jury Trial.
THE BORROWERS, THE LENDERS AND THE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY COUNTERCLAIM
THEREIN.
16.11 USA PATRIOT ACT. Each Lender hereby notifies the Borrowers that pursuant
to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the "ACT"), it is required to obtain, verify and
record information that identifies each Obligor, which information includes the
name and address of each Obligor and other information that will allow such
Lender to identify such Obligor in accordance with the Act.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF the parties hereto have executed this agreement.
Vitran Corporation Inc. VITRAN CORPORATION INC.
000 Xxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, XX X0X 0X0 By: /s/ Xxxxxxx X. Xxxxx
Attention: President and CEO ------------------------------------
Telefax: (000) 000 0000 Name: Xxxxxxx X. Xxxxx
Title: President and CEO
Vitran Express Canada Inc. VITRAN EXPRESS CANADA INC.
000 Xxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, XX X0X 0X0 By: /s/ Xxxxxxx X. Xxxxx
Attention: President and CEO ------------------------------------
Telefax: (000) 000 0000 Name: Xxxxxxx X. Xxxxx
Title: CEO
Vitran Corporation VITRAN CORPORATION
000 Xxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, XX X0X 0X0 By: /s/ Xxxxxxx X. Xxxxx
Attention: President and CEO ------------------------------------
Telefax: (000) 000 0000 Name: Xxxxxxx X. Xxxxx
Title: CEO
The Bank of Nova Scotia THE BANK OF NOVA SCOTIA, AS AGENT
Corporate Banking - Loan Syndications
Xxxxxx Xxxxx, 00xx Xxxxx
00 Xxxx Xxxxxx West By: /s/ Xxx Xxxxxxxx
Xxxxxxx, XX X0X 0X0 ------------------------------------
Attention: Managing Director & Unit Name: Xxx Xxxxxxxx
Head Title: Director
Telefax: (000) 000 0000
By: /s/ Xxxxx Xx
------------------------------------
Name: Xxxxx Xx
Title: Associate
-00-
Xxx Xxxx xx Xxxx Xxxxxx THE BANK OF NOVA SCOTIA, AS
Corporate Banking - Industrial CANADIAN LENDER
Products
Xxxxxx Xxxxx, 00xx Xxxxx
00 Xxxx Xxxxxx West By: /s/ Xxxxx Xxxx
Xxxxxxx, XX X0X 0X0 ------------------------------------
Attention: Managing Director & Unit Xxxxx Xxxx
Head Director
Telefax: (000) 000 0000
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Associate
The Bank of Nova Scotia THE BANK OF NOVA SCOTIA, AS U.S. LENDER
Atlanta Agency
000 Xxxxxxxxx Xxxxxx X.X.
Xxxxx 0000 By: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000 ------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
JPMorgan Chase Bank, N.A. JPMORGAN CHASE BANK, N.A. (TORONTO
(Toronto Branch) BRANCH), AS CANADIAN LENDER
Xxxxx 0000, Xxxxx Xxxx Xxxxx
Xxxxx Xxxxx, 000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0 By: /s/ Xxxxxxx Xxxxxxx
Attention: Xx. Xxxxxxxxxxx Xxxxxx ------------------------------------
Telefax: (000) 000-0000 Name: /s/ Xxxxxxx Xxxxxxx
Title: Vice-President
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
JPMorgan Chase Bank, N.A. JPMORGAN CHASE BANK, N.A., AS
Suite 1800, Royal Bank Plaza U.S. LENDER
South Tower, 000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xx. Xxxxxxxxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
Telefax: (000) 000-0000 ------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice-President
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Laurentian Bank of Canada LAURENTIAN BANK OF CANADA, AS
000 Xxxxx Xxxx Xxxx XXXXXXXX LENDER
Suite 303
Mississauga, ON L5T 2J8
Attention: Xxxxxxx Xxxxxxxxx By: /s/ Xxxxxxxx Xxxxxxx
Telefax: (000) 000 0000 ------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Senior Manager
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Manager
