EXHIBIT 4.2
THIS CREDIT AGREEMENT is made as of the 29th day of January, 1999.
B E T W E E N:
3578275 CANADA INC.
(the "Borrower")
- and -
THE LENDERS LISTED ON SCHEDULE 1
TO THIS AGREEMENT, INCLUDING
CANADIAN IMPERIAL BANK OF COMMERCE
(the "Lenders")
- and -
CANADIAN IMPERIAL BANK OF COMMERCE
in its capacity as Administrative Agent
(the "Agent")
RECITALS:
A. The Borrower has requested the Lenders to provide credit facilities of
up to a maximum aggregate amount of Cdn. $37,000,000.00 as follows:
(a) a Term Loan of Cdn. $22,000,000.00; and,
(b) a Revolving Loan of Cdn. $15,000,000.00, or the U.S. dollar
equivalent thereof;
B. The Lenders have each agreed to provide their respective commitments
to Borrower subject to the terms and conditions of this Agreement;
C. The parties are entering into this Agreement to provide for the terms
of the credits;
D. The Borrower is a wholly owned, indirect subsidiary of Omega Cabinets,
Ltd., a Delaware corporation, who shall be guaranteeing the Borrower's
obligations herein to the Agent on behalf of the Lenders;
E. Immediately following its acquisition of all of the issued and
outstanding shares in the capital of Kitchen Craft of Canada Ltd., the Borrower
will amalgamate with that corporation to form Kitchen Craft of Canada Ltd., and
all references to "Borrower" herein shall include the amalgamated Kitchen Craft
of Canada Ltd., as the context may require;
NOW THEREFORE, for value received, and intending to be legally
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bound by this Agreement, the parties agree as follows:
ARTICLE I
DEFINED TERMS
1.1 DEFINED TERMS
As used in this Agreement the following terms shall have the following
respective meanings (and such meanings shall be equally applicable to both the
singular and plural form of the terms defined, as the context may require):
"ADVANCE" means an availment of a Credit by the Borrower by way of
Prime Rate Advance, Base Rate Advance, Bankers' Acceptances, L/C,
including deemed Advances and conversions, renewals and rollovers of
existing Advances, and any reference relating to the amount of
Advances shall mean the sum of all outstanding Prime Rate Advances and
Base Rate Advances, plus the face amount of all outstanding Bankers'
Acceptances and the undrawn face amount of all L/Cs.
"AGENT" means CIBC in its role as administrative agent for the
Lenders, and any successor administrative agent appointed in
accordance with this Agreement.
"AGREEMENT, "HEREOF, "HEREIN", "HERETO, "HEREUNDER" or similar
expressions mean this Agreement and any Schedules hereto, as amended,
supplemented, restated and replaced from time to time.
"ACQUISITION" has the meaning ascribed thereto in Section 3.3 herein;
"ACQUISITION CLOSING DATE" means January 29/th/, 1999, or such other
date as may be proposed by the Borrower and agreed to by the Lenders
on which all of the conditions in the Acquisition Documents have been
satisfied or (with the consent of all Lenders) waived.
"ACQUISITION DOCUMENTS" means the Purchase Agreement, and all other
agreements, instruments, certificates and other documents executed and
delivered pursuant to or in connection therewith, as the same may be
supplemented, amended or otherwise modified.
"ALLOCABLE SHARE" means as of any date of determination, the ratio of
the outstanding principal balance of the Term Loan A, Term Loan B (as
those terms are defined in the Omega Credit Agreement), or Credit B,
as applicable, to the aggregate principal amount of all
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outstanding Indebtedness of the borrowers under the Term Loans (as
defined in the Omega Credit Agreement) and Credit B.
"AMALGAMATION" means the proposed amalgamation of 3578275 Canada Inc.
and Kitchen Craft of Canada Ltd.;
"APPLICABLE MARGIN" means, with respect to the period beginning five
days after the day the financial statements and compliance certificate
required by Sections 5.1(c) and (d) of the Omega Credit Agreement with
respect to a month are delivered to the Agent as required herein and
ending on the date five days after the date such financial statements
and compliance certificate for the next month are actually delivered
(unless such financial statements are not delivered when required, in
which case ending on the date such delivery was required), shall mean
the percentage specified as applicable to Prime Rate Advances, Base
Rate Advances, BA Fees or L/C Fees, as appropriate, for the Cash Flow
Leverage Ratio calculated for the twelve months ending as of the end
of the month to end immediately prior to the date of determination:
CREDIT A
--------
PRIME RATE ADVANCE
BA FEE OR OR BASE RATE
CASH FLOW LEVERAGE RATIO L/C FEE ADVANCE
Less than or equal to 2.50:1 1.50% 0.50%
Greater than 2.50:1 but less than or equal
to 3.5:1 2.00% 1.00%
Greater than 3.50:1 but less than 4.5:1 2.50% 1.50%
Greater than or equal to 4.5:1 2.75% 1.75%
CREDIT B
--------
CASH FLOW LEVERAGE RATIO BA FEE PRIME RATE ADVANCE
Less than or equal to 2.50:1 1.50% 0.50%
Greater than 2.50:1 but less than or equal 2.00% 1.00%
to 3.5:1
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Greater than 3.50:1 but less than 4.5:1 2.50% 1.50%
Greater than or equal to 4.5:1 2.75% 1.75%
Notwithstanding the foregoing, however, during the period beginning on
the Closing Date and ending on the date five days after the financial
statements and compliance certificate for the period ending June 30,
1999 are delivered pursuant to Sections 5.1(c) and (d) of the Omega
Credit Agreement, and for any subsequent period beginning on a day the
financial statements and compliance certificate required by Sections
5.1(c) and (d) of the Omega Credit Agreement with respect to a month
are required to be but are not delivered and ending five days after
the date such financial statements and compliance certificate are
delivered, the Applicable Margin shall be as specified for a Cash Flow
Leverage Ratio greater than or equal to 4.5:1.
"ASSIGNMENT AGREEMENT" means an agreement in the form of Schedule
1.1.1 to this Agreement.
"BA PROCEEDS" means, in respect of any Bankers' Acceptance, an amount
calculated on the applicable Drawdown Date which is (rounded to the
nearest full cent, with one-half of one cent being rounded up) equal
to the face amount of such Bankers' Acceptance multiplied by the
price, where the price is calculated by dividing one by the sum of one
plus the product of (i) the BA Rate applicable thereto expressed as a
decimal fraction multiplied by (ii) a fraction, the numerator of which
is the term of such Bankers' Acceptance and the denominator of which
is 365, which calculated price will be rounded to the nearest multiple
of 0.001%.
"BA RATE" means, (a) with respect to any Bankers' Acceptance accepted
by a Lender named on Schedule I to the Bank Act (Canada), the rate
determined by the Agent as being the arithmetic average (rounded
upward to the nearest multiple of 0.01 %) of the discount rates, that
appear on the Reuters CDOR page for CIBC calculated on the basis of a
year of 365 days and determined in accordance with normal market
practice at or about 10:00 a.m. (Toronto time) on the applicable
Drawdown Date and, (b) in respect of any other Lender named on
Schedule II to the Bank Act (Canada), the lesser of the rate quoted by
such Lender as of 10:00 am (Toronto time) on the applicable Drawdown
Date, or the rate in (a) above plus 0.075%.
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"BANKERS' ACCEPTANCE" means a depository xxxx as defined in the
Depository Bills and Notes Act (Canada) in Canadian Dollars that is in
the form of an order signed by the Borrower and accepted by a Lender
pursuant to this Agreement or, for Lenders not participating in
clearing services contemplated in that Act, a draft or xxxx of
exchange in Canadian Dollars that is drawn by the Borrower and
accepted by a Lender pursuant to this Agreement. Orders that become
depository bills, drafts and bills of exchange are sometimes
collectively referred to in this Agreement as "orders".
"BANKERS' ACCEPTANCE FEE" means the amount calculated by multiplying
the face amount of each Bankers' Acceptance by the rate for the
Bankers' Acceptance Fee specified in Sections 2.6 and 3.5, and then
multiplying the result by a fraction, the numerator of which is the
duration of its term on the basis of the actual number of days to
elapse from and including the date of acceptance of a Bankers'
Acceptance by the Lender up to but excluding the maturity date of the
Bankers' Acceptance and the denominator of which is the number of days
in the calendar year in question.
"BASE RATE" means, at any time of reference, the variable reference
interest rate per year based on a 365 or 366 day year, as the case may
be, as declared by CIBC from time to time to be its base rate for US
Dollar loans made by CIBC in Canada.
"BASE RATE ADVANCE" means an Advance in US Dollars bearing interest
based on the Base Rate and includes deemed Base Rate Advances provided
for in this Agreement.
"BORROWER" means 3578275 Canada Inc., a corporation existing under the
Canada Business Corporations Act and its successors, including without
limitation Kitchen Craft of Canada Ltd. following the Amalgamation.
"BRANCH OF ACCOUNT" means CIBC, Xxxxxxxxx and Xxxxxxxx xxxxxx,
Winnipeg, Manitoba, or such other Winnipeg branch as may be designated
from time to time by the Agent and the Borrower.
"BUSINESS DAY" means a day of the year, other than Saturday or Sunday,
on which the Agent is open for business at its executive offices in
Xxxxxxx, Xxxxxxx, and at the Branch of Account.
"CIBC" means Canadian Imperial Bank of Commerce.
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"CANADIAN DOLLARS", "CDN. DOLLARS", "CDN. $" and "$" mean lawful money
of Canada.
"CAPITAL EXPENDITURE" has the meaning as defined in the Omega Credit
Agreement.
"CAPITAL STOCK" means, with respect to any Person, any and all present
and future shares, partnership or other interests, participations or
other equivalent rights in the Person's capital, however designated
and whether voting or non-voting.
"CAPITALIZED LEASE" has the meaning as defined in the Omega Credit
Agreement.
"CAPITALIZED LEASE OBLIGATIONS" has the meaning as defined in the
Omega Credit Agreement.
"CASH FLOW LEVERAGE RATIO" has the meaning as defined in the Omega
Credit Agreement.
"CLOSING DATE" means January 29, 1999, or such other date as is
mutually agreed between the parties hereto.
"COLLATERAL" means cash, a bank draft or a letter of credit issued by
a Canadian chartered bank, all in a form satisfactory to the Lenders,
acting reasonably.
"COMMITMENT" means in respect of each Lender from time to time, the
covenant to make Advances to the Borrower in the Lender's
Proportionate Share of the maximum amount of the Credits and, where
the context requires, the maximum amount of Advances which the Lender
has covenanted to make.
"COMPLIANCE CERTIFICATE'' means the compliance certificates as
referenced in Sections 5.1(c) and (d) of the Omega Credit Agreement.
"CONSOLIDATED FINANCIAL STATEMENTS" means the consolidated financial
statements of Omega and its Subsidiaries referred to in Sections
5.1(a) and (c) of the Omega Credit Agreement.
"CONSTATING DOCUMENTS" means, with respect to each of the Borrower and
each Guarantor, its articles or certificate of incorporation,
amalgamation or continuance, memorandum of
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association, by-laws, partnership agreement, limited liability company
agreement or other similar document, and all unanimous shareholder
agreements, other shareholder agreements, voting trust agreements and
similar arrangements.
"CONTRACTS" means agreements, franchises, leases, easements,
servitudes, privileges and other rights, other than Permits.
"CONTRIBUTING LENDER" shall have the meaning defined in Section
10.3.2.
"CREDIT A" means the credit in the amount of up to Cdn. $15,000,000.00
or the US Dollar equivalent thereof in favour of the Borrower which is
established by this Agreement as a revolving credit facility.
"CREDIT B" means the credit of up to Cdn. $22,000,000.00 thereof in
favour of the Borrower which is established by this Agreement as a
term loan.
"CREDITS" means Credit A and Credit B, and "CREDIT" means either of
them.
"CREDIT DOCUMENTS" means this Agreement, the Security and all other
documents relating to the Credits, or any of them.
"DEFAULTING LENDER" has the meaning defined in Section 10.3.2.
"DESIGNATED ACCOUNT" means, in respect of any Advance, the account or
accounts maintained by the Borrower at a branch of the Agent in
Winnipeg that the Borrower designates in its notice requesting an
Advance.
"DRAWDOWN DATE" means the date, which shall be a Business Day, of any
Advance.
"EBITDA" has the meaning as defined in the Omega Credit Agreement.
"ENCUMBRANCE" means any mortgage, debenture, pledge, hypothec, lien,
charge, assignment by way of security, consignment, lease,
hypothecation, security interest or other security agreement, trust or
arrangement having the effect of security for the payment of any debt,
liability or obligation, and "ENCUMBRANCES",
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"ENCUMBRANCER", "ENCUMBER" and "ENCUMBERED" shall have
corresponding meanings.
"EVENT OF DEFAULT" has the meaning as set forth in Section 9.1.
"EXCESS CASH FLOW" has the meaning as defined in the Omega Credit
Agreement.
"EXCHANGE RATE" means, on any day, with respect to the exchange of
either of Canadian Dollars or US Dollars (the "First Currency") into
the other of those currencies (the "Other Currency"), the spot buying
rate quoted by the Agent for purchases of the First Currency with the
Other Currency at noon (Toronto time) on such day, or if such rate is
not or has not yet been quoted on such day, such rate on the last day
on which it was quoted by the Agent except that, if the Exchange Rate
is required to determine the outstanding amount of Advances for a
purpose that does not involve the purchase of Canadian Dollars or US
Dollars, the Exchange Rate shall be the noon spot rate of the Bank of
Canada on that day.
"EXCLUDED TAXES" means any Taxes now or hereafter imposed, levied,
collected, withheld or assessed on a Lender by Canada or any other
jurisdiction in which that Lender is subject to Tax as a result of the
Lender (i) carrying on a trade or business in such jurisdiction or
being deemed to do so, or having a permanent establishment in such
jurisdiction; (ii) being organized under the laws of such
jurisdiction; (iii) being resident or deemed to be resident in such
jurisdiction or (iv) not dealing at arm's length with the Borrower or
any other Lender; but does not include any sales, goods or services
Tax payable under the laws of any such jurisdiction with respect to
any goods or services made available by a Lender to the Borrower under
this Agreement or any withholding tax payable under the laws of
Canada.
"FEE AGREEMENT" means the letter from Canadian Imperial Bank of
Commerce to Xxxxxx Capital Corp. and U.S. Bank National Association
dated January 13, 1999, which is hereby acknowledged and accepted by
the Borrower, to the extent that it provides for fees payable by the
Borrower to CIBC in connection with the Credits, as the letter is
amended, supplemented, restated and replaced from time to time.
"FISCAL YEAR END" has the meaning as defined in the Omega Credit
Agreement.
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"FIXED CHARGE COVERAGE RATIO" has the meaning as defined in the Omega
Credit Agreement.
"GAAP", has the meaning as defined in the Omega Credit Agreement.
"GLOBAL LENDERS" means collectively all of the Lenders, and all of the
US Banks.
"GUARANTORS" means Omega, Kitchen Craft Cabinetry Ltd. and any other
Subsidiary (other than the Transitory Subsidiary) of the Borrower now
or hereafter existing or acquired.
"HAZARDOUS MATERIALS" means any hazardous substance or any pollutant
or contaminant, toxic or dangerous waste, substance or material, as
defined in or regulated by any applicable law, regulation or
governmental authority from time to time, including, without
limitation, friable asbestos and poly-chlorinated biphenyls.
"HOLDINGS" has the meaning as defined in the Omega Credit Agreement.
"INDEBTEDNESS" has the meaning as defined in the Omega Credit
Agreement.
"INTELLECTUAL PROPERTY" means all data bases, patents, trademarks,
trade names, copyrights, technology, know-how and processes used in or
necessary for the conduct of the Borrower's business as currently
conducted that are material to the financial condition, business or
operations of the Borrower;
"INTERBANK REFERENCE RATE" means the interest rate expressed as a
percentage per annum which is customarily used by the Agent when
calculating interest due by it or owing to it arising from correction
of errors between it and other Canadian chartered Lenders.
"INTERCOMPANY LOAN OBLIGATIONS" means all present and future debts,
liabilities and obligations of any kind owing or remaining unpaid by
the Borrower to any of its Subsidiaries or to Omega or any of its
Subsidiaries, or to the Borrower by any of its Subsidiaries or Omega
or any of its Subsidiaries, in respect of loans or advances made.
"INTERCOMPANY OBLIGATIONS" means all present and future debts,
liabilities and obligations of any kind owing or remaining unpaid by
the
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Borrower to any of its Subsidiaries or to Omega or any of its
Subsidiaries, or to the Borrower by any of its Subsidiaries or Omega
or any of its Subsidiaries, including but not limited to Intercompany
Loan Obligations and indebtedness for goods and services supplied.
"INTERCREDITOR AGREEMENT" has the meaning as defined in the Omega
Credit Agreement.
"INTEREST COVERAGE RATIO" has the meaning as defined in the Omega
Credit Agreement.
"INTEREST EXPENSE" has the meaning as defined in the Omega Credit
Agreement.
"INTEREST PAYMENT DATE" means (in connection with Prime Rate Advances
and Base Rate Advances) the 1/st/ day of each calendar month or if
that day is not a Business Day, the Business Day next following.
"L/C" means a standby letter of credit, letter of guarantee or
commercial letter of credit in a form satisfactory to CIBC, issued by
CIBC at the request of the Borrower in favour of a third party to
secure the payment or performance of an obligation of the Borrower or
one of its Subsidiaries to the third party.
"LENDERS" means CIBC, First Chicago NBD Bank, Canada and other lenders
that agree from time to time to become Lenders in accordance with
Article XI of this Agreement, and "Lender" means any one of the
Lenders.
"LIEN" has the meaning as defined in the Omega Credit Agreement.
"LOAN DOCUMENTS" means this Agreement and the Security contemplated
thereby.
"MAJORITY GLOBAL LENDERS" means "Majority Lenders" as defined in the
Intercreditor Agreement.
"OBLIGATIONS" means all monetary obligations of the Borrower to the
Lenders under or in connection with this Agreement, including but not
limited to all debts and liabilities (including those arising from
indemnities of any nature of type), present or future, direct or
indirect, absolute or contingent, matured or not, at any time owing by
the Borrower to the Lenders in any currency or remaining unpaid by the
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Borrower to the Lenders in any currency under or in connection with
this Agreement, whether arising from dealings between the Lenders and
the Borrower, and wherever incurred, and whether incurred by the
Borrower alone or with another or others and whether as principal or
surety, and all interest, fees, legal and other costs, charges and
expenses payable by the Borrower to the Lenders under or pursuant to
this Agreement. In this definition, "the Lenders" shall be interpreted
as "the Lenders, or any of them."
"OMEGA" means Omega Cabinets, Ltd. a Delaware corporation.
"OMEGA CREDIT AGREEMENT" means the First Amended and Re-Stated Credit
Agreement dated as of January 29/th/, 1999 among Omega, Panther
Transport, Inc., the U.S. Banks, and U.S. Bank National Association as
agent for the U.S. Banks and First National Bank of Chicago as
documentation agent for the U.S. Banks.
"PENDING EVENT OF DEFAULT" means An event which, with the giving of
notice (whether such notice is required under Article 9.1 or under
some other provision of this Agreement, or otherwise) or lapse of
time, or both, would constitute an Event of Default.
"PENSION PLAN" means a pension plan or benefit plan which is subject
to the funding requirements of applicable pension benefits legislation
in any jurisdiction and is applicable to employees of any Person.
"PERMITS" means governmental licenses, authorizations, consents,
registrations, exemptions, permits and other approvals required by
law.
"PERMITTED ENCUMBRANCES" means, with respect to any Person, the
following:
(a) Encumbrances for taxes, rates, assessments or other governmental
charges or levies not yet due, or for which installments have
been paid based on reasonable estimates pending final
assessments, or if due, the validity of which is being contested
diligently and in good faith by appropriate proceedings by that
Person;
(b) undetermined or inchoate Encumbrances, rights of distress and
charges incidental to current operations which have not at such
time been filed or exercised and of which none of the
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Lenders has been given notice, or which relate to obligations not
due or payable or if due, the validity of which is being
contested diligently and in good faith by appropriate proceedings
by that Person;
(c) reservations, limitations, provisos and conditions expressed in
any original grants from the Crown or other grants of real or
immovable property, or interests therein, which do not materially
affect the use of the affected land for the purpose for which it
is used by that Person;
(d) licenses, easements, rights-of-way and rights in the nature of
easements (including, without limiting the generality of the
foregoing, licenses, easements, rights-of-way and rights in the
nature of easements for sidewalks, public ways, sewers, drains,
gas, steam and water mains or electric light and power, or
telephone and telegraph conduits, poles, wires and cables) and
zoning, land use and building restrictions, by-laws, regulations
and ordinances of federal, provincial, municipal and other
governmental authorities, which will not materially impair the
use of the affected land for the purpose for which it is used by
that Person;
(e) title defects, encroachments or irregularities which are of a
minor nature and which in the aggregate will not materially
impair the use of the affected property for the purpose for which
it is used by that Person;
(f) the right reserved to or vested in any municipality or
governmental or other public authority by the terms of any lease,
license, franchise, grant or permit acquired by that Person or by
any statutory provision to terminate any such lease, license,
franchise, grant or permit, or to require annual or other
payments as a condition to the continuance thereof;
(g) the Encumbrance resulting from the deposit of cash or securities
in connection with contracts, tenders or expropriation
proceedings, or to secure workers' compensation, unemployment
insurance, surety or appeal bonds, costs of litigation when
required by law, liens and claims incidental to current
construction, mechanics', warehousemen's, carriers' and other
similar liens, and public, statutory and other like obligations
incurred in the ordinary course of business;
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(h) security given to a public utility or any municipality or
governmental authority when required by such utility or authority
in connection with the operations of that Person in the ordinary
course of its business;
(i) the Security;
(j) the Encumbrance created by a judgment of a court of competent
jurisdiction, as long as the judgment is being contested
diligently and in good faith by appropriate proceedings by that
Person and does not result in an Event of Default;
(k) the interest of any lessor under any Capitalized Lease entered
into after the Closing Date or purchase money Encumbrances on
property acquired after the Closing Date; provided that (i) the
Indebtedness secured thereby is otherwise permitted by this
Agreement, (ii) such Encumbrances are limited to the property
acquired and do not secure Indebtedness other than the related
Capitalized Lease Obligations or the purchase price of such
property, and (iii) the aggregate amount of Indebtedness secured
by such Encumbrances outstanding at any time, together with all
other indebtedness secured by Liens permitted pursuant to 6.14(j)
of the Omega Credit Agreement, does not exceed $3,000,000 U.S.
(l) other Encumbrances agreed to in writing by CIBC.
(m) encumbrances identified in the title opinion of Xxxxxxxx Xxxxxxx
Xxxxxxxx dated January 29, 1999.
"PERMITTED OBLIGATIONS" means the following:
(a) the Obligations;
(b) Intercompany Obligations;
(c) other debts, liabilities and obligations secured by Permitted
Encumbrances, other than the Security;
(d) accounts payable not more than 60 days past due, accrued expenses
and other similar debts, liabilities and obligations
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incurred in the ordinary course of business which are not for
borrowed money;
(e) deferred taxes;
(f) obligations and liabilities incurred in the ordinary course of
business which do not constitute Indebtedness;
(g) obligations arising from guarantees by the Borrower or its
Subsidiary of debts, liabilities and obligations of any of its
Subsidiaries that are themselves Permitted Obligations;
(h) other debts, liabilities and obligations expressly permitted
under this Agreement or consented to by the Majority Global
Lenders in writing.
"PERSON" has the meaning as described in the Omega Credit Agreement.
"PRIME RATE" means, at any time of reference, the rate of interest
expressed as a percentage per annum, expressed on the basis of a year
of 365 or 366 days, as the case may be, announced by CIBC as being its
reference rate for commercial loans made by it in Canada in Canadian
Dollars, at the relevant time.
"PRIME RATE ADVANCE" means an Advance in Canadian Dollars bearing
interest based on the Prime Rate and includes deemed Prime Rate
Advances provided for in this Agreement.
"PROPERTY" means, with respect to any Person, any or all of its
undertaking, property and assets.
"PROPORTIONATE SHARE" means, with respect to any Lender, at any time,
the ratio expressed as a percentage of:
(a) such Lender's commitment at such time to;
(b) the aggregate Commitments of all of the Lenders at such
time
as set out on Schedule 1.1.3, which shall be amended and distributed
to all parties by the Agent from time to time as other Persons become
Lenders.
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"PURCHASE AGREEMENT" means a Master Transaction Agreement dated as of
January 29/th/, 1999 between the Borrower, as purchaser, Omega
Holdings, Inc., Xxxx Rademaber, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxxx, HEB2
Holdings Ltd., Xxxxxxx Xxxxxx, Xxxx Xxxxxx, MEB2 Holdings, Ltd., MEB
Family Trust, JWB2 Holdings, Ltd., JWB Family Trust, PCB2 Holdings
Ltd., PBC Family Trust, DHB2 Holdings, Ltd., DHB Family Trust, Xxxx
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx Xxxxxx and Xxxxx Bulleras in effect on
the date hereof, and as the same may be supplemented, amended or
otherwise modified after the date hereof.
"REGISTER" has the meaning defined in Section 11.2.3.
"REQUIREMENT OF LAW" means, as to any Person, any law, treaty,
regulation, ordinance, decree, judgment, order or similar requirement
made or issued under sovereign or statutory authority and applicable
to or binding upon that Person, or to which that Person or any of its
Property is subject.
"RESPONSIBLE OFFICER" has the meaning as described in the Omega Credit
Agreement.
"SCHEDULE" means the designated schedule of this Agreement.
"SECTION" means the designated section of this Agreement.
"SECURITY" means the security held from time to time by the Lenders or
the Agent on behalf of the Lenders, securing or intended to secure
repayment of the Obligations, including without limitation the
security described in Section 4.1.
"SUBSIDIARY" has the meaning as defined in the Omega Credit Agreement.
"SUCCESSOR AGENT" has the meaning defined in Section 10.11.
"SYSTEMS" means all computer software, hardware and other products
incorporating embedded software or microcode, owned or leased by the
Borrower, which are used in operating Property or carrying on
business, including but not limited to financial, production and order
processing systems.
"TAXES" means all taxes, levies, imposts, stamp taxes, duties,
deductions, withholdings and similar impositions payable, levied,
collected, withheld or assessed as of the date of this Agreement or at
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any time in the future, and "Tax" shall have a corresponding meaning.
"TRANSITORY SUBSIDIARY" means Kitchen Craft of Canada Ltd. (prior to
the Amalgamation).
"U.S. BANKS" means the banks which are signatories to the Omega Credit
Agreement or which become a party thereto pursuant to section 9.6
thereof or pursuant to any amendment thereto, including without
limitation U.S. Bank National Association, as agent for such banks;
"US DOLLARS" and "US $" mean lawful money of the United States of
America.
"U.S. LOAN DOCUMENTS" means collectively, the Omega Credit Agreement,
and all related documents, as the same may hereafter be amended,
supplemented, extended, restated or otherwise modified from time to
time.
1.2 OMEGA CREDIT AGREEMENT
The parties hereto acknowledge and agree that all or a portion of
Credit B (at the Borrower's discretion) is to be advanced for the purpose of
assisting with and/or concluding the acquisition by the Borrower of Kitchen
Craft of Canada Ltd. and its business. The Credits are, subject as herein
provided, being granted to the Borrower upon concurrent terms with those
provided for from the U.S. Banks to Omega pursuant to the Omega Credit
Agreement. Where capitalized terms used in this Agreement are not otherwise
defined herein, they shall be deemed to have the same meaning as such
capitalized terms used in the Omega Credit Agreement. A true copy of the Omega
Credit Agreement is attached hereto as Schedule 1.2.
1.3 COMPUTATION OF TIME PERIODS
In this Agreement, in the computation of a period of time from a
specified date to a later specified date, unless otherwise stated the word
"from" means "from and including" and the word "to" or "until" each means "to
but excluding".
1.4 OTHER DEFINITIONAL TERMS
The words "hereof", "herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. References to sections, Schedules,
exhibits, and like references are to this Agreement unless otherwise expressly
provided. The words "include", "includes" and "including" shall be deemed to be
followed by
17
pharse "without limitation".
ARTICLE II
CREDIT A
2.1 AMOUNT AND AVAILMENT OPTIONS
Upon and subject to the terms and conditions of this Agreement, the
Lenders agree to provide a credit for the use of the Borrower in the amount of
up to Cdn. $15,000,000.00 or the US Dollar equivalent thereof. At the option of
the Borrower, Credit A may be used by requesting Prime Rate Advances to be made
by the Lenders, by requesting Base Rate Advances to be made by the Lenders or by
presenting orders to a Lender for acceptance as Bankers' Acceptances, or by
requesting that L/Cs be issued by CIBC on behalf of all Lenders. The aggregate
face amount of L/Cs outstanding under Credit A at any time shall not, however,
exceed Cdn. $500,000.00.
2.2 REVOLVING CREDIT
Credit A is a revolving credit and the principal amount of any Advance
under Credit A that is repaid may be reborrowed, if the Borrower is otherwise
entitled to an Advance under Credit A.
2.3 USE OF CREDIT A
Credit A shall be used:
(a) to finance the general corporate requirements of the Borrower;
(b) in connection with the Acquisition; and,
(c) to make the Employee Loans.
2.4 TERM AND REPAYMENT
Credit A shall be repaid in full and cancelled on December 26, 2003,
unless it is extended on or before that date at the discretion of the Lenders.
2.5 OPTIONAL REDUCTION OR TERMINATION OF CREDIT A
The Borrower may from time to time, by giving not less than two
Business Days express written notice to the Agent and paying all accrued and
unpaid standby fees relating to the amount of the Credit being cancelled or
reduced to the effective date of cancellation or reduction, irrevocably notify
the Agent of the cancellation of Credit A or of the permanent reduction of the
committed amount of Credit A by an amount which shall be a minimum of
$1,000,000.00 or, if more, in an
18
integral multiple of $250,000.00; provided however, that the Borrower may not
reduce the committed amount of Credit A below the total amount outstanding under
Credit A as at the effective date of such reduction. The Borrower shall have no
right to any increase in the committed amount of Credit A thereafter. Upon
termination of the Credit A Commitment pursuant to this section, the Borrower
shall pay to the Agent for the account of the Lenders the full amount of all
outstanding Advances under Credit A, all accrued and unpaid interest thereon,
all unpaid fees accrued to the date of such termination, and all other unpaid
obligations of the Borrower to the Agent and the Lenders hereunder in respect of
Credit A. The Borrower covenants and agrees that any optional reduction of
Credit A or termination of Credit A hereunder, or any optional reduction or
termination of Revolving Commitment Amounts pursuant to the U.S. Loan Documents,
shall be made ratably between Credit A hereunder and the outstanding Revolving
Commitments under the U.S. Loan Documents.
2.6 INTEREST RATES AND FEES
Interest rates, Bankers' Acceptance Fees and L/C Fees will be adjusted
based on the Cash Flow Leverage Ratio and will be as follows:
(a) Each Prime Rate Advance shall bear interest on the unpaid principal
amount thereof at a varying rate per annum equal to the sum of (i)
the Prime Rate, and (ii) the Applicable Margin.
(b) Each Base Rate Advance shall bear interest on the unpaid principal
amount thereof at a varying rate per annum equal to the sum of (i) the
Base Rate, and (ii) the Applicable Margin.
(c) The Bankers' Acceptance Fee for any Bankers' Acceptance shall be equal
to the Applicable Margin therefor.
(d) The fee for any L/C issued shall be equal to the Applicable Margin
therefor.
Interest and fees shall be promptly distributed by the Agent to the
Lenders based on their respective Proportionate Shares. In addition, a fronting
fee of 0.25% per annum on the amount of each L/C shall be payable to CIBC for
its own account. Notwithstanding anything to the contrary contained herein,
fees relating to Bankers' Acceptances advanced before the effective date of an
increase or decrease of the Applicable Margin will not be adjusted.
2.7 STANDBY FEES
The Borrower shall pay a standby/commitment fee on the daily
19
unadvanced portion of Credit A at a rate of 0.50% per annum. The
standby/commitment fee shall be calculated daily beginning on the Closing Date
and shall be payable on the days principal payments are scheduled for Credit B
loans. Upon final payment of the Obligations under Credit A, the Borrower shall
also pay the accrued standby fee for the elapsed portion of the quarter in which
the final payment is made. Standby fees shall be promptly distributed by the
Agent to the Lenders based on their respective Proportionate Shares.
2.8 AGENT FEES
The Borrower hereby acknowledges and agrees for its own account to be
bound by the Fee Agreement. For avoidance of doubt, the Borrower shall pay or
shall have arranged for payment to the Agent, for the Agent's own account, an
annual agent's fee in the amount provided in the Fee Agreement. This fee shall
be payable to the Agent annually in advance, commencing on the Closing Date and
on each anniversary thereafter. No Lender (other than the Agent) shall be
entitled to any portion of such agent's fee.
On the Closing Date, the Borrowers shall pay to the Agent, for the
Agent's own account, an up front fee in the amount provided in the Fee
Agreement. No Lender (other than the Agent) shall be entitled to any portion of
such agent's fee.
ARTICLE III
CREDIT B
3.1 AMOUNT AND AVAILMENT OPTIONS
Upon and subject to the terms and conditions of this Agreement, the
Lenders agree to provide a credit for the one-time single draw-down use of the
Borrower in the amount of up to Cdn. $22,000,000.00 (provided that the Advance
made in connection with such drawdown may be converted or rolled over into
another Prime Rate Advance). Credit B may be used by requesting Prime Rate
Advances to be made by the Lenders, or by presenting orders to a Lender for
acceptance as Bankers' Acceptances. In no event will the Advance under Credit B
be made after February 15, 1999. Credit B may be prepaid at any time on 3 days
notice.
3.2 NON-REVOLVING CREDIT
Credit B is a non-revolving credit and the principal amount of any
Advance under Credit B that is repaid (other than in connection with a rollover
or conversion of an Advance) may not be reborrowed.
20
3.3 USE OF CREDIT B
Proceeds of the Credit B Advance shall be used in connection with the
acquisition of Kitchen Craft of Canada Ltd. by the Borrower, and to refinance
the existing Indebtedness of the Borrower and Kitchen Craft of Canada Ltd. (the
"Acquisition").
3.4 TERM AND REPAYMENT
The principal amount of Credit B shall be payable in equal quarterly
installments as follows:
(a) on each of April 3, 1999, July 2, 1999, October 1, 1999, and December
31, 1999, $425,000.00;
(b) on each of March 31, 2000, June 30, 2000, September 29, 2000, and
December 29, 2000, $525,000.00;
(c) on each of March 30, 2001, June 29, 2001, September 28, 2001, and
December 28, 2001, $612,500.00;
(d) on each of March 29, 2002, June 28, 2002, September 25, 2002, and
December 27, 2002, $750,000.00;
(e) on each of March 28, 2003, June 27, 2003, September 26, 2003, and
December 26, 2003, $912,500.00;
(f) on each of March 31, 2004, June 30, 2004, September 30, 2004, and
December 31, 2004, $2,275,000.00; and
(g) on December 31, 2004, any other amount then remaining unpaid with
respect to Credit B.
Provided, however, that if the aggregate principal amount outstanding
under Credit B as of the date any principal payment is due is less than the
amount specified for such date in the table above, then the principal amount
payable on such date shall be such amount outstanding.
3.5 INTEREST RATES AND FEES
Interest rates and Bankers' Acceptance fees for Credit B will be
adjusted based on the Cash Flow Leverage Ratio and will be as follows:
(a) Each Prime Rate Advance shall bear interest on the unpaid principal
amount thereof at a varying rate per annum equal to the sum of (i) the
21
Prime Rate, and (ii) the Applicable Margin.
(b) The Bankers' Acceptance Fee for any Bankers' Acceptance shall be
equal to the Applicable Margin therefor.
Interest and fees shall be promptly distributed by the Agent to the
Lenders based on their respective Proportionate Shares. Notwithstanding
anything to the contrary contained herein, fees relating to Bankers' Acceptances
advanced before the effective date of an increase or decrease of the Applicable
Margin will not be adjusted.
3.6 MANDATORY PREPAYMENTS
(a) The Borrower shall cause Omega, on the Borrower's behalf, to make a
capital contribution through its Subsidiaries to the Borrower, to be
used by the Borrower to prepay Credit B, in the event of a prepayment
being made by Omega to the U.S. Banks pursuant to sections 2.6(d),
(e), (f) or 2.7(a) of the Omega Credit Agreement, such that in the
aggregate such prepayment will reduce the Commitments of the U.S.
Banks and the Lenders based upon their Allocable Shares.
(b) Any mandatory prepayments pursuant to this Section 3.6 shall be
applied to Credit B until Credit B is paid in full and then to Credit
A. Any mandatory prepayments of Credit B shall be applied to the
installments due thereunder pro rata to the amount of each such
installment. Any prepayments that are applied to Credit A shall reduce
the Credit A Commitment by the same amount. Amounts prepaid on Credit
B under this Section 3.6, or prepaid under Credit A and resulting in a
reduction of the Credit A Commitment under this Section 3.6, may not
be reborrowed.
(d) Amounts paid or prepaid on Credit A under this Section 3.6 shall be
made to the Agent for the account of each Lender in proportion to its
share of the outstanding amount of Credit A. Amounts paid or prepaid
on Credit B under this Section 3.6 shall be made to the Agent for the
account of each Lender in proportion to its share of the outstanding
amount under Credit B.
(e) In any event of mandatory prepayment pursuant to this Section 3.6, all
amounts prepaid hereunder shall be made ratably between the
outstanding Term Loans owing pursuant to the Omega Credit Agreement
and the outstanding amount of Credit B based upon the parties'
Allocable Shares. In the event of a mandatory prepayment
22
being required by the Borrower pursuant to Section 3.6(a), it is
acknowledged that the Allocable Share of such prepayment to be applied
to the U.S. Banks' loans shall be contributed by the Borrower to Omega
by way of repayment of its Intercompany Loan Obligations in order that
Omega may use such funds to reduce its debt to the U.S. Banks. All
funds which may be received by Borrower from Omega under Section 2.6
and 2.7 of the Omega Credit Agreement shall be applied by Borrower or
paid to Agent for use in the manner specified in Section 3.6.
(f) Notwithstanding the foregoing, the Borrower acknowledges that Bankers'
Acceptances may not be prepaid or repaid in whole or in part until
maturity thereof. In the event that any prepayment or repayment is
required to be made by the Borrower or Omega on the Borrower's behalf
in accordance with the foregoing provisions of this Agreement that
would otherwise require a payment to reduce an unmatured Bankers'
Acceptance, such payment shall be deposited with the Agent as
Collateral against such payment until maturity of the Bankers'
Acceptances. The Borrower shall be entitled to interest upon any such
deposit in accordance with Section 12.15.
ARTICLE IV
SECURITY AND EXCHANGE RATE FLUCTUATIONS
4.1 SECURITY
The Security hereunder shall include without limitation the following,
all in form and substance and duly registered and perfected and satisfactory to
the Lenders and subject only to Permitted Encumbrances:
(a) security over all present and future Property of the Borrower
(including but not limited to a fixed charge over the real property in
Winnipeg, Manitoba that will be owned by the Borrower following the
Amalgamation) in the form of a $37,000,000.00 Debenture and a General
Security Agreement in the form annexed hereto as Schedule 4.1(a)
(Debenture) and 4.1(a) (GSA) by the Borrower in favour of the Agent
for the benefit of the Lenders;
(b) unconditional guarantees of the monetary Obligations of the Borrower
from each of the Subsidiaries of the Borrower (other than the
Transitory Subsidiary) wheresoever incorporated or otherwise created
substantially in the form annexed hereto as Schedule 4.1(b);
(c) General Security Agreement substantially in the form annexed
hereto
23
as Schedule 4.1(a) in favour of the Agent for the benefit of the
Lenders in support of the guarantees referred to in (b) above;
(d) an unconditional guarantee of the monetary Obligations of the Borrower
from Omega in the form annexed hereto as Schedule 4.1(d), which shall
be unlimited;
(e) any security in favour of the Collateral Agent as defined in the
Intercreditor Agreement taken pursuant to the U.S. Loan Documents in
support of the unconditional guarantee of Omega as referred to in (d)
above;
If at any time hereafter the Borrower owns, establishes or acquires an
interest in a Subsidiary directly or indirectly, the Borrower shall, within 60
days of that establishing or acquiring, cause that Subsidiary to deliver a
guarantee substantially in the form annexed hereto as Schedule 4.1(b) and a
general security agreement substantially in the form annexed hereto as Schedule
4.1(c), which shall become part of the Security. The Borrower shall also cause
the delivery of legal opinions, opining on the valid existence of such
Subsidiary, its due authorization, execution and delivery of such guarantee and
general security agreement and the enforceability of these documents and other
supporting documents as the Agent may reasonably require.
4.2 EXCHANGE RATE FLUCTUATIONS
If fluctuations in rates of exchange in effect between Canadian
Dollars and US Dollars cause the amount of Advances (expressed in Canadian
Dollars based on the Exchange Rate in effect from time to time) to the Borrower
under any Credit to exceed the maximum amount of that Credit permitted herein by
five (5%) percent or more then fifteen (15) days after demand by Agent, the
Borrower shall pay the Agent on behalf of the Lenders such amount as is
necessary to repay the excess.
ARTICLE V
DISBURSEMENT CONDITIONS
5.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE
At or before the time of the first Advance under this Agreement, the
Agent, for and on behalf of the Lenders, shall have received the following, each
in full force and effect and in form and substance satisfactory to the Lenders,
acting reasonably (unless delivery has been waived in accordance with Section
10.7.2):
(a) all conditions precedent to the loans to be advanced to
Omega
24
by the U.S. Banks as referenced in Article [3] of the Omega
Credit Agreement are satisfied and completed in full to the
satisfaction of the Agent, and that duplicate original executed
copies of all certificates and other documents to be provided by
Omega to the U.S. Banks as provided in Article [3] of the Omega
Credit Agreement are provided to the Agent;
(b) evidence satisfactory to the Agent that all debts, liabilities
and obligations owing under Kitchen Craft of Canada Ltd.'s
existing credit arrangements with CIBC and any other debt not
forming part of the Permitted Obligations will be paid in full
concurrently with the initial Advance;
(c) a letter of undertaking from Omega that duplicate original copies
of all deliveries to be made to the U.S. Banks pursuant to
section [5.1] of the Omega Credit Agreement shall be concurrently
made and delivered to the Agent during the term of this
Agreement, such letter to be in the form attached hereto as
Schedule 5.1(c);
(d) certified copies of the Constating Documents of the Borrower and
all of its Subsidiaries (other than the Transitory Subsidiary),
and certificates of good standing from the jurisdictions in which
each of them carries on business;
(e) certified copies of the corporate proceedings taken by the
Borrower and all of its Subsidiaries (other than the Transitory
Subsidiary) and Omega, authorizing them to execute, deliver and
perform their respective obligations under the Credit Documents;
(f) an incumbency certificate showing the names and titles and
bearing copies of the signatures of the officers of the Borrower
authorized to execute the Credit Documents and to request
Advances, certified as of the Closing Date by the Secretary or
Assistant Secretary of the Borrower;
(g) duly executed copies of this Agreement and the Security,
(h) certificates of insurance with loss payable to the Agent on
behalf of the Lenders, or other evidence that the covenants and
conditions of the Credit Documents concerning insurance coverage
are being complied with;
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(i) phase 1 environmental assessment reports (or other evidence
satisfactory to the Lenders concerning environmental matters) in
respect of material real property owned or occupied by the
Borrower that are in the possession of the Borrower;
(j) releases, discharges and postponements (in registerable form
where appropriate) covering all Encumbrances affecting the
collateral Encumbered by the Security which are not Permitted
Encumbrances, and all statements and acknowledgments that are
required in respect of other security interests affecting the
Property of the Borrower and its Subsidiaries or other parties
delivering Security to confirm that the collateral Encumbered by
those Encumbrances does not include the collateral Encumbered by
the Security or is a Permitted Encumbrance;
(k) title opinions satisfactory to the Lenders covering all mortgages
of freehold real property in Canada;
(l) the opinion of Messrs. Xxxxxxxx Xxxxxxx Xxxxxxxx, counsel to the
Borrower, addressed to the Lenders in form satisfactory to the
Lenders' counsel, acting reasonably;
(m) the opinion of Messrs. Ropes & Xxxx, counsel to Omega in the
United States addressed to the Lenders in form satisfactory to
the Lenders' counsel, acting reasonably;
(n) An Intercreditor Agreement by and among the Agent, the Lenders,
U.S. Bank and the other banks party to the U.S. Loan Documents
(collectively, the "Creditors") in form and substance acceptable
to the Agent and the Lenders, executed by a duly authorized
officer of each of the Creditors and dated on or prior to the
Closing Date;
(o) An Order to Pay from the Borrower directing the Agent as to the
disbursement of the Credits;
(p) A solvency certificate and such other assurances as the Agent may
require from each of the Borrower, its Subsidiaries and Omega so
as to address the matter of financial assistance between such
Persons;
(q) True copies of the U.S. Loan Documents, all of which shall be in
form and substance acceptable to the Agent and the
26
Majority Global Lenders; and
In addition to the foregoing, the following conditions shall be
required to be satisfied on or before the Closing Date:
(r) the conditions referenced in section 3.1(b) of the Omega Credit
Agreement shall have been satisfied;
(s) the Agent shall have received for itself and for the account of
the Lenders all fees and other amounts due and payable by the
Borrower on or prior to the Closing Date, including the fees
payable on the Closing Date pursuant to Section 2.8, and the
reasonable fees and expenses of counsel to the Agent payable
pursuant to Section 8.7;
(t) the Borrowers shall have performed and complied with all
agreements, terms and conditions contained in this Agreement
required to be performed or complied with by the Borrowers prior
to or simultaneously with the Closing Date; and,
(u) The Agent shall have received satisfactory evidence that all
conditions to the making of the initial U.S. loan advances
thereunder have been satisfied.
Notwithstanding Section 5.1(h) the Lenders may, in their sole
discretion, agree to advance all or part of Credit A and/or Credit B prior to
completion of registration of the Security, upon terms and conditions
satisfactory to the Lenders, and if such advance is made and the Lenders'
conditions are not satisfied by the Borrower within 30 days of the date of the
Advance, an Event of Default shall be deemed to have occurred entitling the
Lenders to demand full payment of all Credits and to exercise all enforcement
rights available to them pursuant to any of the Credit Documents.
5.2 CONDITIONS PRECEDENT TO ALL ADVANCES
The obligation of the Lenders to make any Advance is subject to the
conditions precedent that:
(a) no Event of Default or Pending Event of Default has occurred and
is continuing on the Drawdown Date, or would result from making
the Advance;
27
(b) the Agent has received timely notice as required under Section
6.4;
(c) all other terms and conditions of this Agreement upon which the
Borrower may obtain an Advance are fulfilled.
ARTICLE VI
ADVANCES
6.1 LENDERS' OBLIGATIONS RELATING TO L/CS
Notwithstanding that L/Cs under Credit A are issued by CIBC, it is the
intention of the parties that the ultimate credit risk and exposure of any
Lender be in accordance with its overall Proportionate Share of Credit A. Each
Lender shall (and hereby absolutely, unconditionally and irrevocably agrees to)
indemnify CIBC for that Lender's Proportionate Share of any payment made by CIBC
in respect of an L/C for which CIBC is not immediately reimbursed by the
Borrower, and shall do all such things, including delivery of indemnity
agreements and assignments to other Lenders of Advances made by CIBC, as shall
be required to ensure that result. Any such action on the part of the Lenders
shall be binding on the Borrower.
CIBC shall not issue any L/C's unless the conditions precedent set out
in 5.2 hereof at the applicable time, are met.
Similarly, it is the intention of the parties that the ultimate credit
risk and exposure of any Lender in respect of all Credits be in accordance with
its Proportionate Share of the entire amount of all Credits. Accordingly, upon
the Obligations becoming due and payable under Section 9.2, each Lender shall
(and hereby absolutely, unconditionally and irrevocably agrees to) do all such
things, including delivery of indemnity agreements and assignments to other
Lenders of Advances made by CIBC as shall be required to ensure that result.
Any such action on the part of the Lenders shall be binding on the Borrower.
If any Lender fails to take the actions required under this Section,
the Agent may, without prejudice to the other rights of the Lenders, make such
adjustments to the payments to the defaulting Lender under this Agreement as are
necessary to compensate the other Lenders for the defaulting Lender's failure.
6.2 EVIDENCE OF INDEBTEDNESS
The Obligations resulting from Prime Rate Advances and Base Rate
Advances made by the Lenders shall be evidenced by records maintained by the
Agent, and by each Lender concerning those Advances it has made. The Agent
shall also maintain records of the Obligations resulting from Advances by way of
28
Bankers' Acceptances and L/Cs, and each Lender shall also maintain records
relating to Bankers' Acceptances that it has accepted. The records maintained
by the Agent shall constitute, in the absence of manifest error, prima-facie
evidence of the Obligations and all details relating thereto. The failure of
the Agent or any Lender to correctly record any such amount or date shall not,
however, adversely affect the obligation of the Borrower to pay the Obligations
in accordance with this Agreement.
6.3 CONVERSIONS
Subject to the other terms of this Agreement, the Borrower may from
time to time convert all or any part of the outstanding amount of any Advance
into another form of Advance permitted by this Agreement; provided, however that
the Borrower may only convert a maturing Bankers' Acceptance into a Prime Rate
Advance if:
(a) the sum of the BA Rate plus the Banker's Acceptance Fee;
is less than
(b) the sum of the Prime Rate plus the Applicable Margin to Prime Rate
Advances;
on that maturity date.
6.4 NOTICE OF ADVANCES AND PAYMENTS
The Borrower shall give the Agent irrevocable written notice, in the
form attached as Schedule 6.4 to this Agreement, of any request for any Advance
to it under the Credits. The Borrower shall also give the Agent irrevocable
written notice in the same form of any payment by it (whether resulting from
repayment, prepayment, rollover or conversion) of any Advance under the Credits.
Notice shall be given on the Business Day prior to the date of any
Advance, except that notice shall be given in respect of an Advance by way of
L/C at such earlier time not exceeding two Business Days as CIBC may reasonably
require so that it has sufficient time to review the proposed form of L/C.
Notices shall be given not later than 1:00 p.m. (Winnipeg time) on the
date for notice. Payments (other than those being made solely from the proceeds
of rollovers and conversions) must be made prior to 1:00 p.m. (Winnipeg time) on
the date for payment. If a notice or payment is not given or made by those
times, it shall be deemed to have been given or made on the next Business Day,
unless all Lenders affected by the late notice or payment agree, in their sole
discretion, to
29
accept a notice or payment at a later time as being effective on the date it is
given or made.
6.5 PREPAYMENTS AND REDUCTIONS
Subject to giving notice required by section 6.4, and further subject
to the restrictions upon repayment of Bankers' Acceptances contained in Section
3.6 (f) and restrictions upon conversion of Bankers' Acceptances contained in
Section 6.3, the Borrower may from time to time repay Advances outstanding under
any Credit without penalty.
6.6 PRIME RATE AND BASE RATE ADVANCES
Upon timely fulfillment of all applicable conditions as set forth in
this Agreement, the Agent, in accordance with the procedures set forth in
Section 6.7, will make the requested amount of a Prime Rate Advance or Base Rate
Advance available to the Borrower on the Drawdown Date requested by the Borrower
by crediting the Designated Account with such amount. Each Prime Rate Advance or
Base Rate Advance shall be in an aggregate minimum amount of Cdn. $250,000.00
for Prime Rate Advances or US $250,000.00 for Base Rate Advances and in whole
multiples of Cdn. $50,000.00 or US $50,000.00, respectively. The Borrower shall
pay interest to the Agent for the account of the Lenders at the Branch of
Account on any such Advances outstanding to it from time to time hereunder at
the applicable rate of interest specified in Sections 2.6 and 3.5.
Interest on Prime Rate Advances and Base Rate Advances shall be
payable monthly on each Interest Payment Date. All interest shall accrue from
day to day and shall be payable in arrears for the actual number of days elapsed
from and including the date of Advance or the previous date on which interest
was payable, as the case may be, to but excluding the date on which interest is
payable, both before and after maturity, default and judgment, with interest on
overdue interest at the same rate payable on demand.
Interest calculated with reference to the Prime Rate and Base Rate
shall be calculated daily on the basis of a calendar year. Each rate of
interest which is calculated with reference to a period (the "deemed interest
period") that is less than the actual number of days in the calendar year of
calculation is, for the purposes of the Interest Act (Canada), equivalent to a
rate based on a calendar year calculated by multiplying such rate of interest by
the actual number of days in the calendar year of calculation and dividing by
the number of days in the deemed interest period.
6.7 CO-ORDINATION OF PRIME RATE AND BASE RATE ADVANCES
Each Lender shall advance its Proportionate Share of each Prime
30
Rate and Base Rate Advance in accordance with the following provisions:
(a) the Agent shall advise each Lender of its receipt of a notice
from the Borrower pursuant to Section 6.4 on the day such notice
is received and shall, as soon as possible, advise each Lender of
such Lender's Proportionate Share of any Advance requested by
the notice;
(b) each Lender shall deliver its Proportionate Share of the Advance
to the Agent not later than 11:00 a.m. (Winnipeg time) on the
Drawdown Date;
(c) if the Agent determines that all the conditions precedent to an
Advance specified in this Agreement have been met, it shall
advance to the Borrower the amount delivered by each Lender by
crediting the Designated Account prior to 3:00 p.m. (Winnipeg
time) on the Drawdown Date, but if the conditions precedent to
the Advance are not met by 3:00 p.m. (Winnipeg time) on the
Drawdown Date, the Agent shall return the funds to the Lenders or
invest them in an overnight investment as orally instructed by
each Lender until such time as the Advance is made; and
(d) if the Agent determines that a Lender's Proportionate Share of an
Advance would not be a whole multiple of Cdn. $25,000.00, in the
case of an Advance in Canadian currency, or US $25,000.00 in the
case of an Advance in U.S. currency, the amount to be advanced by
that Lender may be increased or reduced by the Agent in its sole
discretion to the extent necessary to reflect the requirements of
this sub-paragraph.
6.8 FORM OF BANKERS' ACCEPTANCES
To facilitate the acceptance of Bankers' Acceptances hereunder, the
Borrower hereby appoints each Lender as its attorney to sign and endorse on its
behalf, as and when considered necessary by the Lender, an appropriate number of
orders in the form prescribed by that Lender.
Each Lender may, at its option, execute any order in handwriting or by
the facsimile or mechanical signature of any of its authorized officers, and the
Lenders are hereby authorized to accept or pay, as the case may be, any order of
the Borrower which purports to bear such a signature notwithstanding that any
such individual has ceased to be an authorized officer of the Lender. Any such
order or Bankers' Acceptance shall be as valid as if he or she were an
authorized officer at
31
the date of issue of the order or Bankers' Acceptance.
Any order or Bankers' Acceptance signed by a Lender as attorney for
the Borrower, whether signed in handwriting or by the facsimile or mechanical
signature of an authorized officer of a Lender may be dealt with by the Agent or
any Lender to all intents and purposes and shall bind the Borrower as if duly
signed and issued by the Borrower.
The receipt by the Agent of a request for an Advance by way of
Bankers' Acceptances shall be each Lender's sufficient authority to execute, and
each Lender shall, subject to the terms and conditions of this Agreement,
execute orders in accordance with such request and the advice of the Agent given
pursuant to Section 6.7, and the orders so executed shall thereupon be deemed to
have been presented for acceptance.
6.9 SALE OF BANKERS' ACCEPTANCES
It shall be the responsibility of each Lender to arrange, in
accordance with normal market practice, for the sale on each Drawdown Date of
the Bankers' Acceptances issued by the Borrower and to be accepted by that
Lender, failing which such Lender shall purchase such Bankers' Acceptances.
In accordance with the procedures set forth in Section 6.11, the Agent
will make the net proceeds of the requested Advance by way of Bankers'
Acceptances received by it from the Lenders available to the Borrower on the
Drawdown Date no later than 3:00 p.m. (Winnipeg time) by crediting the
Designated Account with such amount.
Notwithstanding the foregoing, if in the determination of the Agent
acting reasonably, by reason of circumstances affecting the Canadian money
market, a market for Bankers' Acceptances does not exist at any time, then upon
at least four days written notice by the Agent to the Borrower, the Borrower's
right to request Advances by way of Bankers' Acceptances shall be and remain
suspended until the Agent notifies the Borrower that such circumstances causing
such determination no longer exists.
6.10 SIZE AND MATURITY OF BANKERS' ACCEPTANCES AND ROLLOVERS
Each Advance of Bankers' Acceptances shall be in a minimum amount of
Cdn. $1,000,000.00 and each Bankers' Acceptance shall be in the amount of Cdn.
$100,000.00 Canadian or whole multiples thereof. Each Bankers' Acceptance shall
have a term which is not less than 30 days nor more than 180 days after the date
of acceptance of the order by a Lender, but no Bankers' Acceptance may mature on
a date which is not a Business Day or on a date which
32
is later than the date on which the principal amount of any Credit is required
to be reduced (in whole or in part) if that would adversely affect the
Borrower's ability to cause the reduction of the Credit in question. The face
amount at maturity of a Bankers' Acceptance may be renewed as a Bankers'
Acceptance or converted into another form of Advance permitted by this
Agreement.
6.11 CO-ORDINATION OF BA ADVANCES
Each Lender shall advance its Proportionate Share of each Advance by
way of Bankers' Acceptances in accordance with the provisions set forth below.
6.11.1 The Agent, promptly following receipt of a notice from the Borrower
pursuant to Section 6.4 requesting an Advance by way of Bankers' Acceptances,
shall advise each Lender of the aggregate face amount and term(s) of the
Bankers' Acceptances to be accepted by it, which term(s) shall be identical for
all Lenders. The aggregate face amount of Bankers' Acceptances to be accepted
by a Lender shall be determined by the Agent by reference to the respective
Commitments of the Lenders, except that, if the face amount of a Bankers'
Acceptance would not be Cdn. $100,000.00 or a whole multiple thereof, the face
amount shall be increased or reduced by the Agent in its sole discretion to the
nearest whole multiple of Cdn. $100,000.00.
6.11.2 Each Lender shall transfer to the Agent at the Branch of Account for
value on each Drawdown Date immediately available Cdn. Dollars in an aggregate
amount equal to the BA Proceeds of all Bankers' Acceptances accepted and sold or
purchased by the Lender on such Drawdown Date net of the applicable Bankers'
Acceptance Fee and net of the amount required to pay any of its previously
accepted Bankers' Acceptances that are maturing on the Drawdown Date or any of
its other Advances that are being converted to Bankers' Acceptances on the
Drawdown Date. Provided that no costs in excess of costs associated with
payment at the Branch of Account would be incurred by the Borrower or any of the
Lenders, the Agent may designate such other offices in Canada as it may see fit
for the purposes referred to in the preceding sentence.
6.11.3 If the Agent determines that all the conditions precedent to an
Advance specified in this Agreement have been met, it shall advance to the
Borrower the amount delivered by each Lender by crediting the Designated Account
prior to 3:00 p.m. (Winnipeg time) on the Drawdown Date, but if the conditions
precedent to the Advance are not met by 3:00 p.m. (Winnipeg time) on the
Drawdown Date, the Agent shall return the funds to the Lenders or invest them in
an overnight investment as orally instructed by each Lender until such time as
the Advance is made.
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6.11.4 Notwithstanding any other provision hereof, for the purpose of
determining the amount to be transferred by a Lender to the Agent for the
account of the Borrower in respect of the sale of any Bankers' Acceptance issued
by the Borrower and accepted by such Lender, the proceeds of sale thereof shall
be deemed to be an amount equal to the BA Proceeds calculated with respect
thereto. Accordingly, in respect of any particular Bankers' Acceptance accepted
by it, a Lender in addition to its entitlement to retain the applicable Bankers'
Acceptance Fee for its own account (i) shall be entitled to retain for its own
account the amount, if any, by which the actual proceeds of sale thereof exceed
the BA Proceeds calculated with respect thereto, and (ii) shall be required to
pay out of its own funds the amount, if any, by which the actual proceeds of
sale thereof are less than the BA Proceeds calculated with respect thereto.
6.12 PAYMENT OF BANKERS' ACCEPTANCES
The Borrower shall provide for the payment to the Agent at the Branch
of Account for the account of the applicable Lenders of the full face amount of
each Bankers' Acceptance on the earlier of (i) the date of maturity of a
Bankers' Acceptance and (ii) the date on which any Obligations become due and
payable pursuant to Section 9.2. The Lenders shall be entitled to recover
interest from the Borrower at a rate of interest per annum equal to the rate
applicable to Prime Rate Advances under Credit A, compounded monthly, upon any
amount payment of which has not been provided for by the Borrower in accordance
with this Section. Interest shall be calculated from and including the date of
maturity of each Bankers' Acceptance up to but excluding the date such payment,
and all interest thereon, both before and after demand, default and judgment, is
provided for by the Borrower.
If the Borrower provides cash in response to any Obligations becoming
due and payable under Section 9.2, the Borrower shall be entitled to receive
interest on the cash provided in accordance with Section 12.15 as long as the
cash is held as Collateral.
6.13 DEEMED ADVANCE - BANKERS' ACCEPTANCES
Except for amounts which are paid from the proceeds of a rollover of a
Bankers' Acceptance or for which payment has otherwise been funded by the
Borrower, any amount which a Lender pays to any third party on or after the date
of maturity of a Bankers' Acceptance in satisfaction thereof or which is owing
to the Lender in respect of such a Bankers' Acceptance, shall be deemed to be a
Prime Rate Advance to the Borrower under this Agreement. Each Lender shall
forthwith give notice of the making of such a Prime Rate Advance to the Borrower
and the Agent (which shall promptly give similar notice to the other Lenders).
34
6.14 WAIVER
The Borrower shall not claim from a Lender any days of grace for the
payment at maturity of any Bankers' Acceptances presented and accepted by the
Lender pursuant to this Agreement. The Borrower waives any defence to payment
which might otherwise exist if for any reason a Bankers' Acceptance shall be
held by a Lender in its own right at the maturity thereof, and the doctrine of
merger shall not apply to any Bankers' Acceptance that is at any time held by a
Lender in its own right.
6.15 DEGREE OF CARE
Any executed orders to be used as Bankers' Acceptances which are
delivered to a Lender shall be held in safekeeping with the same degree of care
as if they were the Lender's own property, and shall be kept at the place at
which such orders are ordinarily held by such Lender.
6.16 INDEMNITY
The Borrower shall indemnify and hold the Lenders, and each of them,
harmless from any loss, cost, damage or expense with respect to any Bankers'
Acceptance dealt with by the Lenders, or any of them, but shall not be obliged
to indemnify a Lender for any loss, cost, damage or expense caused by the
negligence or wilful misconduct of that Lender
6.17 OBLIGATIONS ABSOLUTE
The obligations of the Borrower with respect to Bankers' Acceptances
under this Agreement shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including without limitation, the following circumstances:
(i) any lack of validity or enforceability of any order accepted by a
Lender as Bankers' Acceptance; or
(ii) the existence of any claim, set-off, defence or other right which the
Borrower may have at any time against the holder of a Bankers'
Acceptance, a Lender or any other Person or entity, whether in
connection with this Agreement or otherwise.
6.18 SHORTFALL ON DRAWDOWNS, ROLLOVERS AND CONVERSIONS
The Borrower agrees that:
(a) the amount, if any, by which the amount of the maturing Bankers'
Acceptance exceeds the actual proceeds of the
35
Bankers' Acceptance being issued;
(b) the amount, if any, by which the amount required to repay any
Advance which is being converted to a Banker's Acceptance exceeds
the actual proceeds of the Bankers' Acceptance being issued.
shall be funded and paid by the Borrower from its own resources, by 3:00p.m. on
the day of the Advance or may be advanced as a Prime Rate Advance under a Credit
if the Borrower is otherwise entitled to an Advance under the Credit.
6.19 PROHIBITED USE OF BANKERS' ACCEPTANCES AND L/CS
The Borrower shall not enter into any agreement or arrangement of any
kind with any Person to whom Bankers' Acceptances have been delivered whereby
the Borrower undertakes to replace such Banker's Acceptances on a continuing
basis with other Bankers' Acceptances, nor shall the Borrower directly or
indirectly take, use or provide Bankers' Acceptances or L/Cs as security for
loans or advances from any other Person.
6.20 ISSUANCE AND MATURITY OF L/CS
A request for an Advance by way of L/C shall be made by the Borrower
in accordance with Section 6.4. The Agent shall promptly notify the Lenders of
the receipt of the request, but L/Cs shall only be issued by CIBC as fronting
bank for all Lenders. A request shall include the details of the L/C to be
issued. CIBC shall promptly notify the Borrower of any comment concerning the
form of the L/C requested by the Borrower and shall, if the Borrower is
otherwise entitled to an Advance, issue the L/C to the Borrower at the branch
where its account is maintained on the Drawdown Date or as soon thereafter as
CIBC is satisfied with the form of L/C to be issued.
Each L/C issued under this Agreement shall have a term which is not
more than one year after its issuance date or renewal date. An L/C may be
renewed by the Borrower subject to complying with the terms of this Agreement
applicable to an Advance by way of L/C. No L/C shall be issued which would
mature past the term of this Agreement as set out in 2.4 hereof.
6.21 PAYMENT OF L/C FEES
Payment of L/C fees shall be made to the Agent for the account of the
Lenders (other than the fronting fee payable to CIBC under Credit A which shall
be solely for CIBC's account) at the Branch of Account and shall be made at the
time of issuance or renewal of al L/C. L/C fees shall be calculated at the rate
specified in Section 2.6 on the face amount of each L/C for the duration of its
term on the
36
basis of the actual number of days to elapse from and including the date of
issuance or renewal by CIBC to but not including the expiry date of the L/C. L/C
fees shall be calculated on the basis of a 365 or 366 day year, as the case may
be. The Borrower shall be entitled to a pro rata refund of fees paid in
connection with any L/C that is terminated as a result of payment or otherwise
before its expiry.
6.22 PAYMENT OF L/CS
The Borrower shall provide for the payment to CIBC at the branch where
the L/C was issued (for the account of the Lenders) of the full face amount of
each L/C (or the amount actually paid in the case of a partial payment) on the
earlier of (i) the date on which CIBC makes a payment to the beneficiary of an
L/C, and (ii) the date on which any Obligations become due and payable pursuant
to Section 9.2. The Lenders shall be entitled to recover interest from the
Borrower at a rate of interest per annum equal to the rate applicable to Prime
Rate Advances (in the case of Canadian Dollar L/C's) or Base Rate Advances (in
the case of US Dollar L/C's).
The obligation of the Borrower to reimburse the Lenders for a payment
to a beneficiary of an L/C shall be absolute and unconditional, except for
matters arising from a Lender's wilful misconduct or negligence, and shall not
be reduced by any demand or other request for payment of an L/C (a "Demand")
paid or acted upon in good faith and in conformity with laws, regulations or
customs applicable thereto being invalid, insufficient, fraudulent or forged,
nor shall the Borrower's obligation be subject to any defence or be affected by
any right of set-off, counterclaim or recoupment which the Borrower may now or
hereafter have against the beneficiary, the Lender or any other Person for any
reason whatsoever, including the fact that CIBC paid a Demand or Demands (if
applicable) aggregating up to the amount of the L/C notwithstanding any contrary
instructions from the Borrower to CIBC or the occurrence of any event including,
but not limited to, the commencement of legal proceedings to prohibit payment by
CIBC of a Demand. Any action, inaction or omission taken or suffered by CIBC
under or in connection with an L/C or any Demand, if in good faith and in
conformity with laws, regulations or customs applicable thereto shall be binding
on the Borrower and shall not place any Lender under any resulting liability to
the Borrower. Without limiting the generality of the foregoing, CIBC may
receive, accept, or pay as complying with the terms of the L/C, any Demand
otherwise in order which may be signed by, or issued to, any administrator,
executor, trustee in bankruptcy, receiver or other Person or entity acting as
the representative or in place of, the beneficiary.
If the Borrower provides cash in response to any Obligations becoming
due and payable under Section 9.2, it shall be entitled to receive interest on
the cash provided in accordance with Section 12.15 as long as the cash is held
37
as Collateral.
6.23 DEEMED ADVANCE - L/CS
Except for amounts which have been funded by the Borrower, any amount
which CIBC pays to any third party in respect of an L/C in satisfaction or
partial satisfaction hereof shall also be deemed to be a Prime Rate Advance in
the case of Canadian Dollar L/Cs or a Base Rate Advance in the case of US Dollar
L/Cs, in each case under Credit A. CIBC shall forthwith give notice of the
making of such an Advance to the Borrower and the Agent (which shall promptly
give similar notice to the other Lenders). Interest shall be payable on such
Advances in accordance with the terms applicable to such Advances.
6.24 PROHIBITED RATES OF INTEREST
Notwithstanding any other provisions of this Agreement or any other
Credit Document, the Borrower shall not be obliged to make any payment of
interest or other amounts payable to the Lenders or the Agent under this
Agreement or under any other Credit Document in an amount or at a rate that
would be prohibited by law or would result in the receipt by the Lenders or the
Agent of interest at a criminal rate, as the terms "interest" and "criminal
rate" are defined under the Criminal Code (Canada), or that would contravene any
local usury laws which may be applicable to any obligations of the Borrower to
the Lenders or the Agent under or in connection with this Agreement. In any
such case, any payment, collection or demand for interest in excess of the
maximum permitted rate shall be deemed to have been made by mutual mistake of
the Borrower, Agent and Lenders, any excess payment shall be refunded to the
Borrower and the amount or rate otherwise payable under the terms of any Credit
Document shall be reduced to the maximum amount or rate payable in accordance
with applicable law. For the purposes of this Agreement, the effective annual
rate of interest shall be determined in accordance with generally accepted
actuarial practices and principles and in the event of any dispute, a
certificate of a Fellow of the Canadian Institute of Actuaries appointed by the
Agent shall be conclusive for the purpose of such determination.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to advance the
Credits hereunder and to induce CIBC to issue L/C's, the Borrower represents and
warrants to the Lenders that:
(a) it is a duly incorporated and validly existing corporation, and
has the power and authority, and all material Permits required
38
as of the date hereof, to enter into and perform its obligations
under any Credit Documents to which it is or will be a party, to
own its Property and to carry on the business in which it is
engaged;
(b) the entering into and the performance by it of the Credit
Documents to which it is or will be a party (i) have been duly
authorized by all necessary corporate action on its part, and
(ii) do not and will not violate its Constating Documents, any
Requirement of Law, or any Contract to which it is a party;
(c) its Constating Documents do not restrict the power of its
directors to borrow money or to encumber any or all of its
present and future Property to secure the Obligations, except for
restrictions under any Constating Document which have been
complied with in connection with the Credit Documents and the
Permitted Obligations;
(d) the Credit Documents to which it is or will be a party have been
or will be duly executed and delivered by it and constitute
legal, valid and binding obligations enforceable against it in
accordance with their respective terms, subject to the
availability of equitable remedies and the effect of bankruptcy,
insolvency and similar laws affecting the rights of creditors
generally;
(e) as of the date of execution of this Agreement, there are no
litigation, arbitration or administrative proceedings outstanding
and, to its knowledge after having made reasonable inquiry, there
are no proceedings pending or threatened, against it which, in
either case, could materially and adversely affect its ability to
perform its obligations under the Credit Documents, except as
disclosed on Schedule 7.1(e);
(f) no Event of Default or Pending Event of Default has occurred and
is continuing;
(g) it is not in violation of any term of its Constating Documents,
and to its knowledge after having made reasonable inquiry, is not
in violation of any Requirement of Law or Contract, the violation
of which would materially and adversely affect its ability to own
its Property and conduct its business, nor will its execution,
delivery and performance of any Credit Documents
39
to which it is a party result in any such violation;
(h) from and after the date on which the relevant Security is
delivered, the Agent on behalf of the Lenders will have legal,
valid and enforceable security upon all of its present and future
Property (as to which it has a good and marketable title as owner
or lessee) subject only to Permitted Encumbrances, the
availability of equitable remedies, and the effect of bankruptcy,
insolvency and similar laws affecting the rights of creditors
generally;
(i) it is not in default under any of the Permitted Encumbrances;
(j) its Property (other than accounts receivable) and its places of
business are located only in the respective places specified on
Schedule 7.1(j), and its accounts receivable are billed from and
payment thereof is customarily received only in the respective
places specified on Schedule 7.1(j);
(k) to its knowledge having made all due inquiry of those employees
or officers or agents who are responsible therefore or who would
ordinarily have knowledge or conduct of such matters, (i) there
are no Hazardous Materials located on, above or below the surface
of any land which it occupies or controls (except those being
stored, used or otherwise handled in substantial compliance with
applicable laws) or contained in the soil or water constituting
such land except those being in substantial compliance with
applicable law, guideline or policy of applicable regulatory
authority and (ii) no reportable release, spill, leak, emission,
discharge, leaching, dumping or disposal of Hazardous Materials
has occurred on or from such land which, as to either (i) or
(ii), would materially and adversely affect its financial
condition, its Property or operations or its ability to perform
its obligations under the Credit Documents to which it is or will
be a party;
(l) except as noted in Schedule 7.1(l), to its knowledge, having made
all due inquiry of those employees or officers or agents who are
responsible therefore or who would ordinarily have knowledge or
conduct of such matters, (i) its business and assets are being
operated in substantial compliance with applicable laws intended
to protect the environment (including, without limitation, laws
respecting the disposal or emission of
40
Hazardous Materials), (ii) there are no breaches thereof and no
enforcement actions in respect thereof are threatened or pending
which materially and adversely affect its ability to perform its
obligations under the Credit Documents to which it is or will be
a party;
(m) there is no fact that it has not disclosed to the Agent and the
Lenders in writing that materially adversely affects its ability
to perform its obligations under the Credit Documents to which it
is or will be a party. Neither this Agreement nor any other
Credit Document, report, instrument or certificate delivered by
the Borrower or Omega hereunder contains any untrue statement of
a material fact or omits to state any material fact necessary in
order to make the statements contained therein not misleading;
(n) it has (i) duly filed on a timely basis all material tax returns,
elections and reports required to be filed by it and has paid,
collected and remitted all material Taxes due and payable,
collectible or remittable by it, and (ii) made adequate provision
for material Taxes payable by it for the current period and any
previous period for which tax returns are not yet required to be
filed and, except as disclosed in writing to the Agent from time
to time, there are no actions, proceedings or claims pending or,
to its knowledge, threatened, against it in respect of material
Taxes (it being agreed that, for purposes of this paragraph, the
amount of a Tax is material if it equals or exceeds Cdn.
$500,000.00 or the equivalent thereof in another currency);
(o) it has (i) withheld from each payment made to any of its past or
present employees, officers or directors, and to any non-resident
of the country in which it is resident, the amount of all
material Taxes and other deductions required to be withheld
therefrom and has paid the same to the proper tax or other
receiving officers within the time required under any applicable
legislation, and (ii) collected and remitted to the appropriate
tax authority when required by law to do so all material amounts
collectible and remittable in respect of goods and services tax
and similar provincial or state Taxes, and has paid all such
material amounts payable by it on account of sales Taxes
including goods and services and value-added taxes (it being
agreed that, for purposes of this paragraph, the
41
amount of a Tax is material if it equals or exceeds Cdn.
$500,000.00 or the equivalent thereof in another currency);
(p) during the twelve-consecutive-month period before the date of the
execution and delivery of this Agreement and before the date of
any Advance hereunder, (i) no contribution failure has occurred
with respect to any Pension Plan under any applicable pension
benefits laws of any jurisdiction, (ii) no condition exists and
no event or transaction has occurred with respect to any Pension
Plan which might result in the incurrence by the Borrower or any
Subsidiary, or to their knowledge, Omega, of any liability, fine
or penalty in excess of $100,000.00, and (iii) except as
disclosed in the financial statements required to be provided
pursuant to this Agreement or as otherwise disclosed in writing
from time to time to the Agent, the Borrower has no contingent
liability with respect to any post-retirement benefit of any
nature or type;
(q) (i) each Pension Plan of the Borrower or any Subsidiary, or to
their knowledge, Omega, is in compliance in all material respects
with all applicable pension benefits and tax laws, (ii) all
contributions (including employee contributions made by
authorized payroll deductions or other withholdings) required to
be made to the appropriate funding agency in accordance with all
applicable laws and the terms of each Pension Plan have been made
in accordance with all applicable laws and the terms of each
Pension Plan, (iii) all liabilities under each Pension Plan are
fully funded, on a going concern and solvency basis, in
accordance with the terms of the respective Pension Plans, the
requirements of applicable pension benefits laws and of
applicable regulatory authorities and the most recent actuarial
report filed with respect to the Pension Plan, and (iv) no event
has occurred and no conditions exist with respect to any Pension
Plan that has resulted or could reasonably be expected to result
in any Pension Plan having its registration revoked or refused
for the purposes of any applicable pension benefits or tax laws
or being placed under the administration of any relevant pension
benefits regulatory authority or being required to pay any taxes
or penalties under any applicable pension benefits or tax laws,
except for any exceptions to clauses (ii) through (iv) above
that, individually or in the aggregate, could not reasonably be
expected to have
42
a material adverse effect on the Borrower;
(r) the Borrower owns, has the right to use, or otherwise has the
rights to, its Intellectual Property, and, as of the Closing
Date, all patented or registered Intellectual Property and patent
applications and applications for registration of any
Intellectual Property are identified on Schedule 7.1(r). As of
the Closing Date, all patented or registered Intellectual
Property is duly and properly registered, filed or issued in the
appropriate office and jurisdictions and for such registrations,
filing or issuances. Except as disclosed in Schedule 7.1(r), to
the best of the Borrower's knowledge, no material claim has been
asserted by any Person challenging or questioning the use,
validity or effectiveness of any Intellectual Property. Except as
disclosed in Schedule 7.1(r), to the best of the Borrower's
knowledge, the use of such Intellectual Property by Holdings and
the Borrower does not infringe the rights of any Person except to
the extent such infringement (including, but not limited to, any
damages that may be payable to the opposing party of the Borrower
in an infringement action) is not reasonably expected to have a
material adverse effect upon the financial condition, business,
operations or prospects of the Borrower;
(s) Schedule 7.1(s) sets forth as of the date of this Agreement a
list of all Subsidiaries of the Borrower and the number and
percentage of the shares of each class of shares in the capital
stock of each such Subsidiary owned beneficially or of record by
the Borrower or any Subsidiary therein, and the jurisdiction of
incorporation of each Subsidiary;
(t) as of the Closing Date, the Borrower has capital sufficient to
carry on its business and transactions and all businesses and
transactions in which it is about to engage and is solvent and
able to pay its debts as they mature and the Borrower owns
property the fair saleable value of which is greater than the
amount required to pay the Borrower's Indebtedness. No transfer
of property is being made and no Indebtedness is being incurred
in connection with the transactions contemplated by this
Agreement with the intent to hinder, delay or defraud either
present or future creditors of the Borrower;
(u) except as disclosed on Schedule 7.1(u), as of the Closing Date,
the Borrower has not assumed corporate names or
43
business names and the Borrower is not doing business under any
corporate or business name other than 3578275 Canada Inc.;
(v) Schedule 7.1(v) sets forth a complete and accurate description of
all policies of insurance that will be in effect as of the
Closing Date for the Borrower and its Subsidiaries, all of which
shall provide that the Agent be named as first loss payee and,
where applicable, as an additional named insured. As of the
Closing Date, the Borrower and its Subsidiaries are adequately
insured under such policies, no notice of cancellation has been
received with respect to such policies and the Borrower and its
Subsidiaries are in compliance with all conditions contained in
such policies;
(w) The Borrower owns no property outside of Canada, save and except
for accounts receivable and the property described in Schedule
7.1.(j) and except as noted on Schedule 7.1(w); and,
(x) all representations and warranties made by Omega and other
"Borrowers" (as that term is defined in the Omega Credit
Agreement) to the U.S. Banks are true and correct at all material
times;
(y) Borrower and its Subsidiaries have reviewed and assessed their
respective business operations and Systems and applications to
address the "Year 2000 Problem" (that is whether or not the
computer applications, equipment and systems used by Borrower and
Subsidiaries and directly or indirectly through third parties may
be unable to properly perform date sensitive functions before,
during and after January 1, 2000). Based on that review and
assessment, the Borrower and its Subsidiaries reasonably believe
that the Year 2000 problem will not result in a material adverse
effect on the Borrower and Omega taken as a whole.
7.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Unless expressly stated to be made as of a specific date, the
representations and warranties in this Agreement shall survive the execution of
this Agreement and all other Credit Documents, and shall be deemed to be
repeated as of the date of each Advance (including any deemed Advance) and as of
the date of delivery of each Compliance Certificate, subject to modifications
made by the
44
Borrower to the Lenders in writing and accepted by the Lenders. The Lenders
shall be deemed to have relied upon such representations and warranties at each
such time as a condition of making an Advance hereunder or continuing to extend
the Credits hereunder.
ARTICLE VIII
COVENANTS AND CONDITIONS
8.1 INTERCOMPANY OBLIGATIONS
8.1.1 The Borrower acknowledges that, under the terms of the Security
given, all Intercompany Obligations owing to it are or may be assigned as
security for the benefit of the Lenders to the Agent. The assignment as
security shall not prevent the Borrower from receiving payment of Intercompany
Obligations unless an Event of Default or Pending Event of Default has occurred
and is continuing.
8.1.2 Intercompany Obligations owed to the Borrower assigned to the Agent
under the Security shall be paid free of any set-off, counterclaim or defence.
8.2 AFFIRMATIVE COVENANTS
Until any obligation of the Lender hereunder to make Credit A and
Credit B available and of the Agent to issue L/C's shall have expired or been
terminated and all of the other Obligations (except for contingent indemnity and
other contingent Obligations not yet due and payable) have been paid in full and
all outstanding L/C's shall have expired or the liability of the Agent thereon
shall have otherwise been discharged, unless the Majority Global Lenders shall
otherwise consent in writing, the Borrower shall:
(a) duly and punctually pay the Obligations at the times and places
and in the manner required by the terms thereof;
(b) operate its businesses in accordance with sound business practice
and in compliance in all material respects with all applicable
Requirements of Law;
(c) permit any Person designated by the Agent at the request of any
Lender, to visit and inspect any of the properties, corporate
books and financial records of the Borrower and its Subsidiaries,
to examine and to make copies of the books of accounts and other
financial records of the Borrower, and each Subsidiary of
Borrower, and to discuss the affairs, finances
45
and accounts of the Borrower and each Subsidiary of Borrower
with, and to be advised as to the same by, the officers of the
Borrower and each Subsidiary of Borrower at such reasonable times
and intervals as the Agent or Lenders may designate. The first
visit, inspection or examination by the Agent during each
calendar year shall be at the Borrower's expense. Except as
provided in the previous sentence, so long as no Event of Default
exists, the expenses of the Agent or the Lenders for such visits,
inspections and examinations shall be at the expense of the Agent
and the Lenders, but any such visits, inspections and
examinations made while any Event of Default is continuing shall
be at the expense of the Borrower;
(d) Borrower shall maintain, and shall cause each Subsidiary of
Borrower to maintain, with financially sound and reputable
insurance companies such insurance as may be required by law, by
any Mortgage executed by such Borrower, and such other insurance
in such amounts and against such hazards as is customary in the
case of reputable firms engaged in the same or similar business
and similarly situated and to cause policies of insurance
referred to above to contain a standard mortgage clause and other
customary endorsements for the benefit of lenders, all in a form
acceptable to the Lenders acting reasonably;
(e) whenever reasonably requested in writing by the Agent cause
certified copies of the policies of insurance carried pursuant to
this Section to be delivered to the Agent;
(f) obtain, as and when required, all permits and licenses to permit
it to acquire, own, operate and maintain its business and
Property and perform its obligations under the Credit Documents
to which it is or will be a party, the failure of which to comply
could reasonably be expected to have a material adverse effect,
and preserve and maintain those permits and licenses and all such
permits and licenses now held by it in good standing, except
where the failure to preserve and maintain such permits and
licenses could not reasonably be expected to have a material,
adverse effect.;
(g) pay all Taxes as they become due and payable unless they are
being contested in good faith by appropriate proceedings;
46
(h) immediately notify the Lenders of any Event of Default or Pending
Event of Default, or of any material default by Borrower or any
Subsidiary of Borrower under any contract, permit, license, or
contract or of any event which, with or without the giving of
notice, lapse of time or any other condition subsequent, would be
expected to have a material adverse effect on the financial
condition, business operations or prospects of the Borrower and
Omega, taken as a whole;
(i) promptly notify the Agent on becoming aware of the occurrence of
any litigation, dispute, arbitration, proceeding or other
circumstance affecting it, the result of which if determined
adversely would have a material and adverse effect on its ability
to perform its obligations under this Agreement, or the Credit
Documents to which it is or will be a party and from time to time
provide the Lenders with all reasonable information requested by
any of the Lenders concerning the status thereof;
(j) promptly notify the Agent upon (i) learning of the existence of
Hazardous Materials located on, above or below the surface of any
land which it occupies or controls (except those being stored,
used or otherwise handled in substantial compliance with
applicable Requirements of Law), or contained in the soil or
water constituting such land ( except those being in substantial
compliance with the Requirements of Law) and (ii) the occurrence
of any reportable release, spill, leak, emission, discharge,
leaching, dumping or disposal of Hazardous Materials that has
occurred on or from such land which, as to either (i) or (ii),
would materially and adversely affect its ability to perform its
obligations under the Credit Documents to which it is or will be
a party;
(k) withhold from each payment made to any of its past or present
employees, officers or directors, and to any non-resident of the
country in which it is resident, the amount of all Taxes and
other deductions required to be withheld therefrom and pay the
same to the proper tax or other receiving officers within the
time required under any applicable Requirement of Law;
(l) collect from all Persons the amount of all Taxes required to be
collected from them and remit the same to the proper tax or other
receiving officers within the time required under any
47
applicable Requirement of Law;
(m) provide such evidence of on-going compliance with Requirements of
Law relating to Hazardous Materials as the Agent or any Lender
may reasonably require from time to time including, without
limitation, if so requested by the Agent or any Lender, acting
reasonably upon reasonable cause, having conducted one or more
environmental site assessment and/or compliance audits (each
consisting of a non-intrusive phase I environmental assessment
and recommendations with respect to the findings described
therein and such other audits or investigations recommended in
each such phase I environmental assessment, including, without
limitation, an intrusive phase II environmental assessment) and
reports thereon by an independent consultant engaged by the
Borrower and acceptable to the Agent or any Lender, acting
reasonably;
(n) provide notice to the Agent and copies of all relevant
documentation promptly upon becoming aware of (i) the institution
of any steps by the Borrower or any applicable regulatory
authority to terminate any Pension Plan (wholly or in part) which
could result in the Borrower being required to make an additional
contribution to the Pension Plan in excess of $500,000.00, (ii)
the failure to make a required contribution to any Pension Plan
if such failure is sufficient to give rise to a lien or charge
under any applicable pension benefits laws of any jurisdiction,
(iii) the taking of any action with respect to a Pension Plan
which could reasonably be expected to result in the requirement
that the Borrower furnish a bond or other security to such
Pension Plan or any applicable regulatory authority in excess of
$500,000.00, or (iv) the occurrence of any event with respect to
any Pension Plan which could reasonably be expected to result in
the incurrence by the Borrower of any material liability, fine or
penalty, or any increase in the contingent liability of the
Borrower in excess of $500,000.00 with respect to any post-
retirement benefit;
(o) promptly upon request by the Agent or any Lender, the Borrower
shall promptly correct, and cause its Subsidiaries to correct,
any defect or error that may be discovered in any Credit Document
to which it or they are a party or in the execution,
acknowledgment or recordation thereof. Promptly
48
upon request by the Agent or any Lender, the Borrower also shall
do, execute, acknowledge, deliver, record, re-record, file, re-
file, register and re-register, any and all deeds, conveyances,
mortgages, deeds of trust, trust deeds, assignments, estoppel
certificates, financing statements and continuations thereof,
notices of assignment, transfers, certificates, assurances and
other instruments, as the Agent or any Lender may reasonably
require from time to time in order: (a) to perfect and maintain
the validity, effectiveness and priority of any security
interests intended to be created by the Credit Documents to which
it is a party including, without limitation, the delivery of a
landlord waiver from any landlord required by the Agent or any
Lender; and (b) to assure, convey, grant, assign, transfer,
preserve, protect and confirm unto the Lender the rights granted
now or hereafter intended to be granted to the Lender under any
Credit Document or under any other instrument executed in
connection with any Credit Document or that the any Borrower may
be or become bound to convey, mortgage or assign to the Agent for
the benefit of the Lenders in order to carry out the intention or
facilitate the performance of the provisions of any Credit
Document. The Borrower shall furnish to the Lender evidence
satisfactory to the Agent or Lender of every such recording,
filing or registration.
8.3 REPORTING REQUIREMENTS
In this Section "Borrowers", "Kitchen Craft", "Loan Documents",
"Fiscal Year End", "High Yield Subordinated Permanent Loan Documents", ,
"Holdings", "Default" and "Event of Default" have the meanings as defined in the
Omega Credit Agreement, but all other capitalized terms shall otherwise have the
meanings ascribed to them in this Agreement.
During the term of this Agreement and for so long as any Obligations
remain unpaid, the Borrower shall furnish to the Lenders
(a) each of the financial statements and other documents required by
Section 5.1 of the Omega Credit Agreement to be furnished to the
U.S. Banks contemperaneously with the furnishings of such
statements and other documents to the U.S. Banks.
(b) Promptly upon the transmission or receipt thereof by Borrowers or
Holdings, copies of all notices, certificates and
49
reports sent by or to any of the Borrowers, Holdings or Kitchen
Craft under any of the High Yield Subordinated Permanent Loan
Documents, or under any other agreement relating to Indebtedness
for money borrowed or any Capitalized Lease if the aggregate
unpaid principal amount with respect to such Indebtedness or
Capitalized Lease is equal to or greater than $750,000.
8.4 NEGATIVE COVENANTS
8.4.1 Until any obligation of the Lender hereunder to make Credit A and
Credit B available and of the Agent to issue L/C's shall have expired or been
terminated and all of the other Obligations (except for contingent indemnity and
other contingent Obligations not yet due and payable) have been paid in full and
all outstanding L/C's shall have expired or the liability of the Agent thereon
shall have otherwise been discharged, unless the Majority Global Lenders shall
otherwise consent in writing:
(a) except for the Amalgamation, the Borrower will not amalgamate,
merge or consolidate or enter into any analogous reorganization
or transaction with any Person or liquidate, windup or dissolve
itself (or suffer any liquidation or dissolution);
(b) the Borrower will not create, incur or assume or suffer to exist
or cause or permit any Encumbrance upon or in respect of any of
its Property, except for Permitted Encumbrances; or
(c) the Borrower will not do or permit anything to adversely affect
the ranking or validity of the Security except by incurring a
Permitted Encumbrance.
8.4.2 During the term of this Agreement, the Borrower shall not, without the
prior written consent of the Majority Global Lenders, which shall not be
unreasonably withheld:
(a) create, incur, assume or permit any debts or liabilities of any
kind to remain outstanding, other than Permitted Obligations;
(b) prepay, redeem, defease, repurchase or make other payments in
respect of any of its Indebtedness for borrowed money, other
than:
(i) the Obligations;
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(ii) the purchase money and other obligations contemplated in
item (k) of the definition of "Permitted Encumbrances;"
(iii) Intercompany Loan Obligations, provided that the proceeds
of principal payments of the Kitchen Craft Note (as defined
in the Omega Credit Agreement) are used to prepay
obligations of the Borrowers under the Omega Credit
Agreement;
(c) effect any material change in its business, being the
manufacturing, distribution and sale of kitchen, bath and home
cabinetry and related products, and other activities incidental
thereto;
(d) make loans to any other Person, guarantee, endorse or otherwise
become liable for any debts, liabilities or obligations of any
other Person, or give other financial assistance of any kind to
any other Person, except for:
(i) the guarantees given as part of the Security;
(ii) loans and advances resulting in Intercompany Loan
Obligations;
(e) change its name without providing the Lenders with prior written
notice thereof and promptly taking other steps, if any, as the
Lenders reasonably request to permit the Agent to perfect the
Security with respect to the change in name;
(f) permit its chief executive office to be located out of the
respective jurisdictions specified on Schedule 8.4.2(g) without
providing the Agent with prior written notice thereof and
promptly taking other steps, if any, as the Lenders reasonably
request to permit the Agent to perfect the Security with respect
to the change in location;
8.5 USE OF INSURANCE PROCEEDS
8.5.l Unless otherwise specified in this Section, all proceeds of insurance
required to be maintained by the Borrower under the terms of this Agreement
shall be paid to the Agent to be applied by it on account of the Obligations.
8.5.2 Proceeds of liability insurance shall be paid to the Person to whom
the
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Borrower is liable. Proceeds of insurance covering loss of or damage to property
in an amount of less than $100,000.00 per claim may be paid by the insurer
directly to the Borrower unless, if an Event of Default or Pending Event of
Default has occurred and is continuing, the Agent requires that payment be made
to the Agent to be applied by it on account of the Obligations.
8.5.3 Proceeds of insurance covering loss of or damage to property in an
amount of $100,000.00 per claim or more shall be paid to the Agent provided that
so long as no Event of Default exists, the Borrower shall be entitled to all
insurance proceeds with respect to its property, provided further that any
proceeds received in excess of the said $100,000.00 threshold in respect of
equipment, inventory, buildings, structures and fixtures, shall be applied to
the cost of replacement of such equipment, inventory, buildings, structures and
fixtures and the Lenders are satisfied, acting reasonably, that such proceeds of
insurance, together with other resources available to the Borrower are
sufficient to fully repair or replace the equipment, inventory, buildings,
structures and fixtures in respect of which the insurance proceeds are payable
within the remaining term of the then outstanding credits or within 365 days,
whichever is less.
8.5.4 The proceeds of business interruption insurance shall be paid to the
Agent to be applied by it on account of the Obligations and any other
obligations secured by the Security (payment of which is permitted in accordance
with this Agreement) as the same fall due from time to time (including as a
result of any demand for payment of the Obligations) and, to the extent of any
surplus, shall be used to repay Credit A without prejudice to the Borrower's
rights to further Advances under Credit A.
8.5.5 All insurance proceeds held by the Agent shall, unless and until the
same are applied to payment of the Obligations or released to the Borrower, be
held as part of the Security. The Agent shall place all such funds in an
interest-bearing account with the interest thereon to accrue to the benefit of
the Borrower.
8.6 EXPENSES
Whether or not the transactions contemplated hereby are consummated,
the Borrower shall to reimburse the Agent upon demand for all reasonable out-of-
pocket expenses paid or incurred by the Agent (including filing and recording
costs and reasonable fees and expenses of Xxxxxx XxXxxxxxx, counsel to the
Agent) in connection with the negotiation, preparation, approval, review,
execution, delivery, administration, amendment, modification and interpretation
of this Agreement and the other Credit Documents and any commitment letters or
term sheets relating thereto. The Borrower shall also reimburse the Agent and
each Lender upon demand for all reasonable out-of-
52
pocket expenses (including reasonable expenses of legal counsel) paid or
incurred by the Agent or any Lender in connection with the collection under and
enforcement of this Agreement and any other Credit Document. The obligations of
the Borrower under this Section shall survive any termination of this Agreement.
8.7 OWNERSHIP OF THE BORROWER
During the term of this Agreement, there shall not, without the prior written
consent of the Majority Global Lenders (which shall not be unreasonably
withheld), be any change in the ownership or control of the Borrower from that
described in Schedule 8.7.
ARTICLE IX
DEFAULT
9.1 EVENTS OF DEFAULT
Each of the following events shall constitute an Event of Default
under this Agreement:
(a) the Borrower fails to pay any amount of principal or interest
(including any amount relating to a Bankers' Acceptance or L/C)
within three days of when due or, to pay fees or other
Obligations (apart from principal and interest) within five days
of when due; or
(b) any representation or warranty made by the Borrower (other than
representations or warranties made to the knowledge of the
Borrower) under any of the Credit Documents which is incorrect or
incomplete in any material respect when made or deemed to be
made, it being agreed that an incorrect representation that there
is no Pending Event of Default shall not result in the Borrower
being disentitled to any cure period otherwise associated with
the Pending Event of Default; or
(c) the Borrower ceases or threatens to cease to carry on its
business, or admits its inability or fails to pay its debts
generally; or
(d) the Borrower permits any default under one or more agreements or
instruments relating to its Indebtedness other than the
Obligations or permits any other event to occur and to continue
after any applicable grace period specified in such agreements or
instruments, if the effect of one or more of such
53
events is to accelerate, or to permit (in accordance with any
applicable inter-creditor and subordination arrangements) the
acceleration of, the date on which such Indebtedness becomes due
(whether or not acceleration actually occurs); or
(e) the Borrower is adjudged a bankrupt (voluntarily or
involuntarily); or becomes subject to any proceeding seeking
liquidation, arrangement, relief of creditors or the appointment
of a receiver or trustee over, or any judgment or order which has
or would have a material and adverse effect on, any material part
of its Property, and such proceeding, if instituted against the
Borrower, or such judgment or order, is not contested diligently,
in good faith and on a timely basis and dismissed or stayed
within 60 days of its commencement or issuance; or
(f) the Borrower denies, to any material extent, its obligations
under the Credit Documents or claims any of the Credit Documents
to be invalid or withdrawn in whole or in part; or any of the
Credit Documents is invalidated by any act, regulation or
governmental action or is determined to be invalid by a court or
other judicial entity and such determination has not been stayed
pending appeal; or
(g) a final judgment, writ of execution, garnishment or attachment or
similar process is issued or levied for the payment of moneys in
excess of $150,000.00 against any of the Property of the Borrower
and such judgment, writ, execution, garnishment, attachment or
similar process is not released, bonded, satisfied, discharged,
vacated or stayed within 60 days after its entry, commencement or
levy, to the satisfaction of the Agent; or
(h) an Encumbrancer takes possession of all or a substantial portion
of the Property of the Borrower by appointment of a receiver,
receiver and manager, or otherwise; or
(i) there is a breach of any other covenant, term, condition,
representation, warranty or provision of any of the Credit
Documents and such breach is not corrected or otherwise satisfied
within 30 days after the Agent, for and on behalf of the Lenders,
gives written notice thereof; or
54
(j) Omega ceases to control the Borrower; or
(k) any Event of Default (as that term is defined in the Omega Credit
Agreement) occurs on the part of Omega or any of its Subsidiaries
pursuant to the provisions of the Omega Credit Agreement, unless
such Event of Default shall also be waived in writing by the
Majority Global Lenders; or
(l) there occurs any failure on the part of Omega to ensure that:
(i) any mandatory or optional prepayment of Loans under sections
2.6 and 2.7 of the Omega Credit Agreement is made in
accordance therewith, such that in the aggregate such
prepayment will reduce the Commitments of the U.S. Banks and
the Lenders based upon their Allocable Shares; or
(ii) any reduction of Revolving Commitments pursuant to section
2.16 of the Omega Credit Agreement is made ratably between
the Lenders and the U.S. Banks as required by this Agreement
and the Omega Credit Agreement; or
(m) there is any change, modification or amendment to the Omega
Credit Agreement without the prior consent of the Majority Global
Lenders.
9.2 ACCELERATION AND TERMINATION OF RIGHTS
During the continuance of an Event of Default, no Lender shall be
under any further obligation to make Advances or to accept orders as Bankers'
Acceptance and the Majority Global Lenders may instruct the Agent to give notice
to the Borrower (i) declaring the Lenders' obligations to make Advances to be
terminated, whereupon the same shall forthwith terminate, (ii) declaring the
Obligations or any of them to be forthwith due and payable, whereupon they shall
become and be forthwith due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower, and/or (iii) demanding that the Borrower deposit forthwith with the
Agent for the Lenders' benefit Collateral equal to the full principal amount at
maturity of all Bankers' Acceptances and L/Cs then outstanding for its account.
Notwithstanding the preceding paragraph, if there is an Event of
Default under 9.1(e) hereof, then without prejudice to the other rights of the
Lenders as a result of any such event, without any notice or action of any kind
by the Agent
55
or the Lenders, and without presentment, demand or protest, the Lenders'
obligation to make Advances shall immediately terminate, the Obligations shall
immediately become due and payable and the Borrower shall be obligated to
deposit forthwith with the Agent for the Lenders' benefit Collateral equal to
the full principal amount at maturity of all Bankers' Acceptances and L/Cs then
outstanding for its account.
9.3 PAYMENT OF BANKERS' ACCEPTANCES AND L/CS
Immediately upon any Obligations becoming due and payable under
Section 9.2, the Borrower shall, without necessity of further act or evidence,
be and become thereby unconditionally obligated to deposit forthwith with the
Agent for the Lenders' benefit Collateral equal to the full principal amount at
maturity of all Bankers' Acceptances and L/Cs then outstanding for its account
and the Borrower hereby unconditionally promises and agrees to deposit with the
Agent immediately upon such demand Collateral in the amount so demanded. The
Borrower authorizes the Lenders, or any of them, to debit its accounts with the
amount required to pay such L/Cs, and to pay such Bankers' Acceptances,
notwithstanding that such Bankers' Acceptances may be held by the Lenders, or
any of them, in their own right at maturity. Amounts paid to the Agent pursuant
to such a demand in respect of Bankers' Acceptances and L/Cs shall be applied
against, and shall reduce, pro rata among the Lenders, to the extent of the
amounts paid to the Agent in respect of Bankers' Acceptances and L/Cs,
respectively, the obligations of the Borrower to pay amounts then or thereafter
payable under Bankers' Acceptances and L/Cs, respectively, at the times amounts
become payable thereunder.
9.4 REMEDIES
Upon the occurrence of any event by which any of the Obligations
become due and payable under Section 9.2, the Security shall become immediately
enforceable and the Majority Global Lenders may instruct the Agent to take such
action or proceedings on behalf of the Lenders as the Majority Global Lenders in
their sole discretion deem expedient to enforce the same, all without any
additional notice, presentment, demand, protest or other formality, all of which
are hereby expressly waived by the Borrower except as may be prohibited by law.
9.5 SAVING
The Lenders shall not be under any obligation to the Borrower or any
other Person to realize any collateral or enforce the Security or any part
thereof or to allow any of the collateral to be sold, dealt with or otherwise
disposed of. The Lenders shall not be responsible or liable to the Borrower or
any other Person for any loss or damage upon the realization or enforcement of,
the failure to realize or enforce the collateral or any part thereof or the
failure to allow any of the collateral to be sold, dealt with or otherwise
disposed of or for any act or omission on their
56
respective parts or on the part of any director, officer, agent, servant or
advisor in connection with any of the foregoing, except that a Lender may be
responsible or liable for any loss or damage arising from the wilful misconduct
or negligence of that Lender.
9.6 PERFORM OBLIGATIONS
If an Event of Default has occurred and is continuing and if the
Borrower has failed to perform any of its covenants or agreements in the Credit
Documents, the Majority Global Lenders, may, but shall be under no obligation
to, instruct the Agent on behalf of the Lenders to perform any such covenants or
agreements in any manner deemed fit by the Majority Global Lenders without
thereby waiving any rights to enforce the Credit Documents. The reasonable
expenses (including any legal costs) paid by the Agent and/or the Lenders in
respect of the foregoing shall be secured by the Security.
9.7 THIRD PARTIES
No Person dealing with the Lenders or any agent of the Lenders shall be
concerned to inquire whether the Security has become enforceable, or whether the
powers which the Lenders are purporting to exercise have become exercisable, or
whether any Obligations remain outstanding upon the security thereof, or as to
the necessity or expediency of the stipulations and conditions subject to which
any sale shall be made, or otherwise as to the propriety or regularity of any
sale or other disposition or any other dealing with the collateral charged by
such Security or any part thereof.
9.8 POWER OF ATTORNEY
Effective upon occurrence of an Event of Default, the Borrower hereby
irrevocably constitutes and appoints any Vice-President or more senior officer
of the Agent as its due and lawful attorney with full power of substitution in
its name and on its behalf, during the continuance of an Event of Default, to
enforce any right, title or interest of the Lenders in, to or under the Security
or any part thereof or any obligation to the Borrower or remedy available to the
Borrower. This appointment is irrevocable to the maximum extent permitted by
applicable law.
9.9 REMEDIES CUMULATIVE
The rights and remedies of the Lenders under the Credit Documents are
cumulative and are in addition to and not in substitution for any rights or
remedies provided by law. Any single or partial exercise by the Lenders of any
right or remedy for a default or breach of any term, covenant, condition or
agreement herein contained shall not be deemed to be a waiver of or to alter,
affect, or prejudice any other right or remedy or other rights or remedies to
which the Lenders may be lawfully entitled for the same default or breach. Any
waiver by the Lenders
57
of the strict observance, performance or compliance with any term, covenant,
condition or agreement herein contained, and any indulgence granted by the
Lenders shall be deemed not to be a waiver of any subsequent default.
9.10 SET-OFF OR COMPENSATION
In addition to and not in limitation of any rights now or hereafter granted
under applicable law, if the Obligations become due and payable pursuant to
Section 9.2, the Lenders, or any of them, may at any time and from time to time
without notice to the Borrower or any other Person, any notice being expressly
waived by the Borrower, set-off and compensate and apply any and all deposits,
general or special, time or demand, provisional or final, matured or unmatured,
and any other indebtedness at any time owing by the Lenders, or any of them, to
or for the credit of or the account of the Borrower against and on account of
the Obligations notwithstanding that any of them are contingent or unmatured.
ARTICLE X
THE AGENT AND THE LENDERS
10.1 AUTHORIZATION OF AGENT AND RELATIONSHIP
Each Lender hereby appoints CIBC as Agent and CIBC hereby accepts such
appointment. The appointment may only be terminated as expressly provided in
this Agreement. Each Lender hereby authorizes the Agent to take all action on
its behalf and to exercise such powers and perform such duties under this
Agreement as are expressly delegated to the Agent by its terms, together with
all powers reasonably incidental thereto. The Agent shall have only those
duties and responsibilities which are of a solely mechanical and administrative
nature and which are expressly specified in this Agreement, and it may perform
such duties by or through its agents or employees, but shall not by reason of
this Agreement have a fiduciary duty in respect of any Lender. As to any
matters not expressly provided for by this Agreement, the Agent is not required
to exercise any discretion or to take any action, but is required to act or to
refrain from acting (and is fully protected in so acting or refraining from
acting) upon the instructions of the Lenders or the Majority Global Lenders, as
the case may be. Those instructions shall be binding upon all Lenders, but the
Agent is not required to take any action which exposes the Agent to personal
liability or which is contrary to this Agreement or applicable law.
Without limiting the foregoing, each of the Lenders hereby grants to
the Agent a power of attorney, for the purposes of laws applicable to the
Security from time to time, to sign documents comprising the Security from time
to time (as the party accepting the grant of the security), and also grants to
the Agent the right to delegate its authority as attorney to any other Person,
whether or not an officer or employee of the Agent.
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10.2 DISCLAIMER OF AGENT
The Agent makes no representation or warranty, and assumes no
responsibility with respect to the due execution, legality, validity,
sufficiency, enforceability or collectability of this Agreement or any other
Credit Document. The Agent assumes no responsibility for the financial
condition of the Borrower or Guarantors, or for the performance of the
obligations of the Borrower or Guarantors under this Agreement or any other
Credit Document. The Agent assumes no responsibility with respect to the
accuracy, authenticity, legality, validity, sufficiency or enforceability of any
documents, papers, materials or other information furnished by the Borrower or
Guarantors to the Agent on behalf of the Lenders. The Agent shall not be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained herein or
as to the use of the proceeds of the Credits or (unless the officers or
employees of the Lender acting as Agent active in their capacity as officers or
employees on the Borrower's accounts have actual knowledge thereof, or have been
notified thereof in writing by the Borrower or a Lender) of the existence or
possible existence of any Event of Default or Pending Event of Default. Neither
the Agent nor any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them as Agent under
or in connection with the Agreement except for its or their own negligence or
wilful misconduct. With respect to its own Commitment, the Lender acting as
Agent shall have the same rights and powers hereunder as any other Lender, and
may exercise the same as though it were not performing the duties and functions
delegated to it as Agent hereunder.
10.3 FAILURE OF LENDER TO FUND
10.3.1 Unless the Agent has actual knowledge that a Lender has not made or
will not make available to the Agent for value on a Drawdown Date the applicable
amount required from such Lender pursuant to Article VI, the Agent shall be
entitled to assume that such amount has been or will be received from such
Lender when so due and the Agent may (but shall not be obliged to), in reliance
upon such assumption, make available to the Borrower a corresponding amount. If
such amount is not in fact received by the Agent from such Lender on such
Drawdown Date and the Agent has made available a corresponding amount to the
Borrower on such Drawdown Date as aforesaid, such Lender shall pay to the Agent
on demand an amount equal to the product of (i) the Interbank Reference Rate per
annum multiplied by (ii) the amount that should have been paid to the Agent by
such Lender on such Drawdown Date and was not, multiplied by (iii) a fraction,
the numerator of which is the number of days that have elapsed from and
including such Drawdown Date to but excluding the date on which the amount is
received by the Agent from such Lender and the denominator of which is 365. A
certificate of the Agent containing details of the amount owing by a Lender
under this Section
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shall be binding and conclusive in the absence of manifest error. If any such
amount is not in fact received by the Agent from such Lender on such Drawdown
Date, the Agent shall be entitled to recover from the Borrower, on demand, the
related amount made available by the Agent to the Borrower as aforesaid together
with interest thereon at the applicable rate per annum payable by the Borrower
hereunder.
10.3.2 Notwithstanding the provisions of Section 10.3.1, if any Lender
wrongfully fails to make available to the Agent its Proportionate Share of any
Advance (such Lender being herein called the "Defaulting Lender"), the Agent
shall forthwith give notice of such failure by the Defaulting Lender to the
Borrower 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 Proportionate Share of such Advance (but in
no way shall any other Lender or the Agent be obliged to do so) in the place of
the Defaulting Lender. If more than one Lender gives notice that it is prepared
to make funds available in the place 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 Proportionate 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 of a Defaulting Lender in
such circumstances, then the Defaulting Lender shall pay to any Contributing
Lender making the funds available in its place, forthwith on demand, any amount
advanced on its behalf together with interest thereon at the rate applicable to
such Advance 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 Advance from the Borrower. The failure of any Lender to make
available to the Agent its Proportionate Share of any Advance as required herein
shall not relieve any other Lender of its obligations to make available to the
Agent its Proportionate Share of any Advance as required herein.
10.4 PAYMENTS BY THE BORROWER
All payments made by or on behalf of the Borrower pursuant to this
Agreement shall be made to and received by the Agent and shall be distributed by
the Agent to the Lenders as soon as possible upon receipt by the Agent. Except
as required to make payments as otherwise provided in this Agreement (including
without limitation Sections 6.1 and 10.5), the Agent shall distribute:
(a) payments of interest in accordance with each Lender's
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Proportionate Share of the relevant Credit;
(b) repayments of principal in accordance with each Lender's
Proportionate Share of the relevant Credit; or
(c) all other payments received by the Agent including, without
limitation, amounts received upon the realization of Security, in
accordance with each Lender's Proportionate Share of the relevant
Credit provided, however, that with respect to proceeds of
realization, no Lender shall receive an amount in excess of the
amounts owing to it in respect of the Obligations.
If the Agent does not distribute a Lender's share of a payment made by the
Borrower to that Lender for value on the later of the day that payment is made
or the day it is deemed to have been made to the Agent, the Agent shall pay to
the Lender on demand an amount equal to the product of (i) the Interbank
Reference Rate per annum multiplied by (ii) the Lender's share of the amount
received by the Agent from the Borrower and not so distributed, multiplied by
(iii) a fraction, the numerator of which is the number of days that have elapsed
from and including the date of receipt of the payment by the Agent to but
excluding the date on which the payment is made by the Agent to such Lender and
the denominator of which is 365.
10.5 PAYMENTS BY AGENT
10.5.1 For greater certainty, the following provisions shall apply to any and
all payments made by the Agent to the Lenders hereunder:
(a) the Agent shall be under no obligation to make any payment
(whether in respect of principal, interest, fees or otherwise) to
any Lender until an amount in respect of such payment has been
received by the Agent from the Borrower;
(b) if the Agent receives less than the full amount of any payment of
principal, interest, fees or other amount owing by the Borrower
under this Agreement, the Agent shall have no obligation to remit
to each Lender any amount other than such Lender's Proportionate
Share of that amount which is the amount actually received by the
Agent;
(c) if any Lender advances more or less than its Proportionate Share
of a Credit, such Lender's entitlement to such payment shall be
increased or reduced, as the case may be, in proportion to the
amount actually advanced by such Lender;
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(d) if a Lender's Proportionate Share of an Advance has been
advanced, or a Lender's Commitment has been outstanding, for less
than the full period to which any payment (other than a payment
of principal) by the Borrower relates, such Lender's entitlement
to such payment shall be reduced in proportion to the length of
time such Lender's Proportionate Share of the relevant Credit or
such Lender's Commitment, as the case may be, has actually been
outstanding;
(e) the Agent acting reasonably and in good faith shall, after
consultation with the Lenders in the case of any dispute,
determine in all cases the amount of all payments to which each
Lender is entitled and such determination shall, in the absence
of manifest error, be binding and conclusive; and
(f) upon request, the Agent shall deliver a statement detailing any
of the payments to the Lenders referred to herein.
10.5.2 Unless the Agent has actual knowledge that the Borrower has not made
or will not make a payment to the Agent for value on the date in respect of
which the Borrower has notified the Agent that the payment will be made, the
Agent shall be entitled to assume that such payment has been or will be received
from the Borrower when due and the Agent may (but shall not be obliged to), in
reliance upon such assumption, pay the Lenders corresponding amounts. If the
payment by the Borrower is in fact not received by the Agent on the required
date and the Agent has made available corresponding amounts to the Lenders, the
Borrower shall, without limiting its other obligations under this Agreement,
indemnify the Agent against any and all liabilities, obligations, losses,
damages, penalties, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on or incurred by the Agent as a result, except
for those arising from the Agent's negligence or willful misconduct. A
certificate of the Agent with respect to any amount owing by the Borrower under
this Section shall be prima facie evidence of the amount owing in the absence of
manifest error. If the payment is not received by the Agent from the Borrower
within a reasonable time following the disbursement to the Lenders by the Agent,
the Lenders shall return the amounts received by them to the Agent with interest
at the Interbank Reference Rate.
10.6 DIRECT PAYMENTS
The Lenders agree among themselves that, except as otherwise provided
for in this Agreement (including but not limited to Sections 12.13 and 12.14),
except as necessary to adjust for Advances that are not in each Lender's
Proportionate Share under the Credits, all sums received by a Lender relating to
this
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Agreement or by virtue of the Security, whether received by voluntary
payment, by the exercise of the right of set-off or compensation or by
counterclaim, cross-action or as proceeds of realization of any Security or
otherwise, shall be shared by each Lender in its Proportionate Share under the
Credits and each Lender undertakes to do all such things as may be reasonably
required to give full effect to this Section, including without limitation, the
purchase from other Lenders of such notes or a portion thereof by the Lender who
has received an amount in excess of its Proportionate Share under the Credits as
shall be necessary to cause such purchasing Lender to share the excess amount
ratably in its Proportionate Share under the Credits with the other Lenders. If
any sum which is so shared is later recovered from the Lenders who originally
received it, the Lender shall restore its Proportionate Share under the Credits
of such sum to such Lenders, without interest. If any Lender shall obtain any
payment of moneys due under this Agreement as referred to above, it shall
forthwith remit such payment to the Agent and, upon receipt, the Agent shall
distribute such payment in accordance with the provisions of Section 10.5.
10.7 ADMINISTRATION OF THE CREDITS
10.7.1 Unless otherwise specified herein, the Agent shall perform the
following duties under this Agreement:
(a) prior to an Advance, ensure that all conditions precedent have
been fulfilled in accordance with the terms of this Agreement,
subject to Section 10.8.2 and any other applicable terms of this
Agreement;
(b) take delivery of each Lender's Proportionate Share of an Advance
and make all Advances hereunder in accordance with the procedures
set forth in Article VI hereof;
(c) use reasonable efforts to collect promptly all sums due and
payable by the Borrower pursuant to this Agreement;
(d) make all payments to the Lenders in accordance with the
provisions hereof;
(e) hold the Security on behalf of the Lenders and take all necessary
steps to comply with registration requirements so that the
Security remains perfected under applicable laws, but each Lender
shall notify the Agent of any circumstance that might affect the
perfection of the Security of which the Lender becomes aware;
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(f) hold all legal documents relating to the Credits, maintain
complete and accurate records showing all Advances made by the
Lenders, all remittances and payments made by the Borrower to the
Agent, all remittances and payments made by the Agent to the
Lenders and all fees or any other sums received by the Agent and,
except for accounts, records and documents relating to the fees
payable under the Fee Agreement, allow each Lender and their
respective advisors to examine such accounts, records and
documents at their own expense, and provide any Lender, upon
reasonable notice, with such copies thereof as such Lender may
reasonably require from time to time at the Lender's expense;
(g) except as otherwise specifically provided for in this Agreement,
promptly advise each Lender upon receipt of each notice and
deliver to each Lender, promptly upon receipt, all other written
communications furnished by the Borrower to the Agent on behalf
of the Lenders pursuant to this Agreement, including without
limitation copies of financial reports and certificates which are
to be furnished to the Agent;
(h) forward to each of the Lenders, upon request and at the expense
of the Lender so requesting (other than customary record books
which shall be provided at the expense of the Borrower), copies
of this Agreement, the Security and other Credit Documents other
than the Fee Agreement;
(i) promptly forward to each Lender, upon request, an up-to-date loan
status report; and
(j) upon learning of same, promptly advise each Lender in writing of
the occurrence of an Event of Default or Pending Event of Default
or the occurrence of any event, condition or circumstance which
would have a material adverse effect on the Borrower's ability to
comply with this Agreement or the Security or of any material
adverse information coming to the attention of the Agent (using
reasonable efforts) relative to the Security or of the occurrence
of any material adverse change in the financial condition or
property of the Borrower, provided that, except as aforesaid, the
Agent shall be under no duty or obligation whatsoever to provide
any notice to the Lenders and further provided that each Lender
hereby agrees to notify the Agent of any Event of Default or
Pending Event of Default of
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which it may reasonably become aware.
10.7.2 The Agent may take the following actions only with the prior consent
of the Majority Global Lenders, unless otherwise specified in this Agreement:
(a) subject to Section 10.7.3, exercise any and all rights of
approval conferred upon the Lenders by this Agreement;
(b) give written notice to the Borrower in respect of any matter in
respect of which notice may be required, permitted, necessary or
desirable in accordance with or pursuant to this Agreement,
promptly after receiving the consent of the Lenders, except that
the Agent shall, without direction from the Lenders, immediately
give the Borrower notice of any payment that is due or overdue
under the terms of this Agreement unless the Agent considers that
it should request the direction of the Lenders, in which case the
Agent shall promptly request that direction;
(c) subject to 10.7.3amend, modify or waive any of the terms of this
Agreement, including waiver of an Event of Default or Pending
Event of Default;
(d) give notice of or declare an Event of Default, accelerate the
amount outstanding under the Credits or take action to enforce
performance of the Obligations of the Borrower and to realize
upon the Security including the appointment of a receiver, the
exercise of powers of distress, lease or sale given by the
Security or by law and take foreclosure proceedings and/or pursue
any other legal remedy necessary; and
(e) pay insurance premiums, taxes and any other sums as may be
reasonably required to protect the interests of the Lenders.
10.7.3 Notwithstanding any provisions to the contrary herein, any term of
this Agreement may be amended with the written consent of the Borrower; provided
that no amendment, modification or waiver of any provision of this Agreement or
any other Loan Document or consented to any departure therefrom by any Borrower
or other party thereto shall in any event be effective unless the same shall be
in writing and consented to by the Majority Global Lenders, and then such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the purpose for which given. (The Agent may enter
into amendments or modifications of, and grant consents and waivers to departure
from the provisions
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of, those Loan Documents to which the Lenders are not signatories without the
Lenders joining therein, provided the Agent has first obtained the separate
prior written consent to such amendment, modification, consent or waiver from
the Majority Global Lenders.) Notwithstanding the forgoing, no such amendment,
modification, waiver or consent shall:
(a) Reduce the rate or extend the time of payment of interest
thereon, or reduce the amount of the principal thereof without
the consent of such Lender; or
(b) Increase the amount or extend the time of any Commitment of any
Lender, without the consent of such Lender; or
(c) Reduce the rate or extend the time of payment of any fee payable
to a Lender, without the consent of the Lender affected; or
(d) Except as may otherwise be expressly provided in any of the other
Loan Documents, release any material portion of collateral
securing, or any guaranties for, all or any part of the
Obligations without the consent of all the Lenders; or
(e) Amend the definition of Majority Global Lenders or otherwise
reduce the percentage of the Lenders required to approve or
effectuate any such amendment, modification, waiver, or consent,
without the consent of all the Lenders; or
(f) Amend any of the foregoing Sections 9.1 (a) through (e) or this
Section 9.1 (f) without the consent of all the Lenders; or
(g) Amend any provision of this Agreement relating to the Agent in
its capacity as Agent without the consent of the Agent; or
(h) Amend any provision of this Agreement relating to the issuance of
Letters of Credit without the consent of the Agent.
10.7.4 Whether or not the transactions contemplated hereby are consummated,
the Borrowers agree to reimburse the Agent upon demand for all reasonable out-
of-pocket expenses paid or incurred by the Agent (including filing and recording
costs and reasonable fees and expenses of Xxxxxx XxXxxxxxx, counsel to the
Agent) in connection with the negotiation, preparation, approval, review,
execution, delivery, administration, amendment, modification and interpretation
of this Agreement and the other Loan Documents and any
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commitment letters or term sheets relating thereto. The Borrowers shall also
reimburse the Agent and each Lender upon demand for all reasonable out-of-pocket
expenses (including reasonable expenses of legal counsel) paid or incurred by
the Agent or any Lender in connection with the collection and enforcement of
this Agreement and any other Loan Document. The obligations of the Borrowers
under this Section shall survive any termination of this Agreement.
10.7.5 Notwithstanding Sections 10.7.2, the Agent may, without the consent
of the Lenders, make amendments to the Credit Documents that are for the sole
purpose of curing any immaterial or administrative ambiguity, defect or
inconsistency, but shall immediately notify the Lenders of any such action. The
Agent may also discharge any Security to the extent necessary to allow the
Borrower to complete any sale or other disposition of Property not prohibited
by this Agreement.
10.7.6 As between the Borrower, on the one hand, and the Agent and the
Lenders, on the other hand:
(a) all statements, certificates, consents and other documents which
the Agent purports to deliver on behalf of the Lenders or the
Majority Global Lenders shall be binding on each of the Lenders,
and the Borrower shall not be required to ascertain or confirm
the authority of the Agent in delivering such documents;
(b) all certificates, statements, notices and other documents which
are delivered by the Borrower to the Agent in accordance with
this Agreement shall be deemed to have been duly delivered to
each of the Lenders;
(c) all payments which are delivered by the Borrower to the Agent in
accordance with this Agreement shall be deemed to have been duly
delivered to each of the Lenders;
(d) unless an Event of Default or Pending Event of Default has
occurred and is continuing, the Borrower's consent to the
appointment of any Successor Agent must be obtained, but the
Borrower's consent shall not be unreasonably withheld.
10.8 RIGHTS OF AGENT
10.8.1 In administering the Credits, the Agent may retain, at the expense of
the Lenders if such expenses are not recoverable from the Borrower, such
solicitors, counsel, auditors and other experts and agents as the Agent may
select,
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in its sole discretion, acting reasonably and in good faith after consultation
with the Lenders.
10.8.2 The Agent shall be entitled to rely on any communication, instrument
or document believed by it to be genuine and correct and to have been signed by
the proper individual or individuals, and shall be entitled to rely and shall be
protected in relying as to legal matters upon opinions of independent legal
advisors selected by it. The Agent may also assume that any representation made
by the Borrower is true and that no Event of Default or Pending Event of Default
has occurred unless the officers or employees of the Lender acting as Agent,
active in their capacity as officers or employees responsible for the Borrower's
account have actual knowledge to the contrary or have received notice to the
contrary from any other party to this Agreement.
10.8.3 Except in its own right as a Lender, the Agent shall not be required
to advance its own funds for any purpose, and in particular, shall not be
required to pay with its own funds insurance premiums, taxes or public utility
charges or the cost of repairs or maintenance with respect to the assets which
are the subject matter of the Security, nor shall it be required to pay with its
own funds the fees of solicitors, counsel, auditors, experts or agents engaged
by it as permitted hereby.
10.8.4 The Agent shall be entitled to receive a fee for acting as Agent as
agreed in the Fee Agreement or as otherwise agreed between the Agent and the
Borrower from time to time.
10.9 ACKNOWLEDGEMENTS, REPRESENTATIONS AND COVENANTS OF LENDERS
10.9.1 It is acknowledged and agreed by each Lender that it has itself been,
and will continue to be, solely responsible for making its own independent
appraisal of and investigations into the financial condition, creditworthiness,
property, affairs, status and nature of the Borrower and Guarantors.
Accordingly, each Lender confirms to the Agent that it has not relied, and will
not hereafter rely, on the Agent (a) to check or inquire on its behalf into the
adequacy or completeness of any information provided by the Borrower or
Guarantors under or in connection with this Agreement or the transactions herein
contemplated (whether or not such information has been or is hereafter
distributed to such Lender by the Agent) or (b) to assess or keep under review
on its behalf the financial condition, creditworthiness, property, affairs,
status or nature of the Borrower or Guarantors.
10.9.2 Each Lender represents and warrants that it has the legal capacity to
enter into this Agreement pursuant to its charter and any applicable legislation
and has not violated its charter, constating documents or any applicable
legislation by
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so doing.
10.9.3 Each Lender agrees to indemnify the Agent (to the extent not
reimbursed by the Borrower), ratably according to its Proportionate Share from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of the Credit Documents or the
transactions therein contemplated, provided that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's negligence or wilful misconduct. Without limiting the generality of the
foregoing, each Lender agrees to reimburse the Agent for its Proportionate Share
of any out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preservation of any rights of the Agent or the Lenders
under, or the enforcement of, or legal advice in respect of rights or
responsibilities under this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Borrower. The obligation of the Lenders to
indemnify the Agent shall survive the termination of this Agreement and shall be
performed by the Lenders promptly upon demand by the Agent.
10.9.4 Each of the Lenders acknowledges and confirms that in the event that
the Agent does not receive payment in accordance with this Agreement, it shall
not be the obligation of the Agent to maintain the Credits in good standing nor
shall any Lender have recourse to the Agent in respect of any amounts owing to
such Lender under this Agreement.
10.9.5 Each Lender acknowledges and agrees that its obligation to advance its
Proportionate Share of Advances in accordance with the terms of this Agreement
is independent and in no way related to the obligation of any other Lender
hereunder.
10.9.6 Each Lender hereby acknowledges receipt of a copy of this Agreement
and the Security (to the extent that the Security has been delivered) and
acknowledges that it is satisfied with the form and content of such documents.
10.10 COLLECTIVE ACTION OF THE LENDERS
Each of the Lenders hereby acknowledges that to the extent permitted
by applicable law, the Security and the remedies provided under the Credit
Documents to the Lenders are for the benefit of the Lenders collectively and
acting together and not severally and further acknowledges that its rights
hereunder and under the Security are to be exercised not severally, but by the
Agent upon the decision of the Majority Global Lenders or Lenders as required by
this Agreement.
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Accordingly, notwithstanding any of the provisions contained herein or in the
Security each of the Lenders hereby covenants and agrees that it shall not be
entitled to take any action hereunder or thereunder including, without
limitation, any declaration of default hereunder or thereunder but that any such
action shall be taken only by the Agent with the prior written agreement of the
Majority Global Lenders. Each of the Lenders hereby further covenants and agrees
that upon any such written agreement being given by the Majority Global Lenders,
it shall co-operate fully with the Agent to the extent requested by the Agent.
Notwithstanding the foregoing, in the absence of instructions from the Lenders
and where in the sole opinion of the Agent, acting reasonably and in good faith,
the exigencies of the situation warrant such action, the Agent may without
notice to or consent of the Lenders take such action on behalf of the Lenders as
it deems appropriate or desirable in the interest of the Lenders.
10.11 SUCCESSOR AGENT
Subject to the appointment and acceptance of a Successor Agent as
provided in this Section, and subject to Section 10.7.5(d), the Agent may resign
at any time by giving 30 days' written notice thereof to the Lenders and the
Borrower, and may be removed at any time by the Majority Global Lenders upon 30
days' written notice. Upon receipt of notice by the Lenders of the resignation
of the Agent, or upon giving notice of termination to the Agent, the Majority
Global Lenders may, within 21 days, appoint a successor from among the Lenders
or, if no Lender is willing to accept such an appointment, from among other
Lenders to which the Bank Act (Canada) applies, which each have combined capital
and reserves in excess of $250,000,000, and which have offices in Winnipeg and
Toronto (the "Successor Agent"). If no Successor Agent has been so appointed
and has accepted such appointment within 21 days after the retiring Agent's
giving of notice of resignation or receiving of notice of termination, then the
retiring Agent may, on behalf of the Lenders, appoint a Successor Agent. Upon
the acceptance of any appointment as Agent hereunder by a Successor Agent, the
retiring Agent shall pay the Successor Agent any unearned portion of any fee
paid to the Agent for acting as such, and the Successor Agent shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its further
duties and obligations as Agent under this Agreement and the other Credit
Documents. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article shall continue to inure to its benefit and be binding
upon it as to any actions taken or omitted to be taken by it while it was Agent
hereunder.
10.12 PROVISIONS OPERATIVE BETWEEN LENDERS AND AGENT ONLY
Except for the provisions of Sections 10.7.5, 10.9.2, 10.9.5, 10.10,
10.11 and 10.12, the provisions of this Article relating to the rights and
obligations
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of the Lenders and the Agent inter se shall be operative as between the Lenders
and the Agent only, and the Borrower or Guarantors shall not have any rights or
obligations under or be entitled to rely for any purpose upon such provisions.
ARTICLE XI
ADDITIONAL LENDERS,
SUCCESSORS AND ASSIGNS
11.1 SUCCESSORS AND ASSIGNS
11.1.1 The Credit Documents shall be binding upon and inure to the benefit of
the Agent, each Lender, the Borrower and their respective successors and
permitted assigns, except that the Borrower shall not assign any rights or
obligations with respect to this Agreement or any of the other Credit Documents
without the prior written consent of each Lender.
The collective rights and obligations of the Lenders under this Agreement are
assignable in whole or in part (pro rata) and any Lender shall be entitled to
assign in whole or in part its individual rights and obligations hereunder or to
permit other financial institutions to participate in the Credits, all in
accordance with the provisions of Section 11.2 and the other terms of this
Agreement. The Borrower hereby consents to the disclosure of any information
relating to the Borrower and Guarantors to any potential Lender or participant
provided that the potential Lender or participant agrees in writing to keep the
information confidential.
Each assignment shall be of a uniform, and not a varying, percentage
of all rights and obligations of the assignor(s) under or in respect of the
Credits. No assignment may result in the Commitment of any Lender, determined as
of the effective date of the Assignment Agreement with respect to such
assignment, being less than $5,000,000.00, unless the assignment deals with the
Lenders entire interest in which case it may be assigned if under $5,000,000.00.
Notwithstanding any other provisions of this Agreement, each Lender
agrees that it shall not offer to assign or assign or offer to sell or sell
participations in any portion of its rights and obligations under this Agreement
including, without limitation, any portion of its Commitment without the prior
written consent of the Agent and, unless an Event of Default has occurred and is
continuing, the Borrower. The consents of the Agent and the Borrower shall not
be unreasonably withheld. The Lenders agree that the Borrower's consent shall
not be considered to be unreasonably withheld if the proposed assignment or
participation would result in any material additional cost being incurred by the
Borrower, including but not limited to any gross-up for withholding tax under
Section 12.14, but excluding any increase in the interest rate applicable to
Bankers' Acceptances of the proposed assignee
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compared to the assignor.
11.1.2 A participation by a Lender of its interest (or a part thereof)
hereunder or a payment by a participant to a Lender as a result of the
participation will not constitute a payment hereunder to the Lender or an
Advance to the Borrower. A payment made by an assignee to an assigning Lender
in order for the assignee to assume its Proportionate Share of Advances made by
the assigning Lender will reduce the Advances owing by the Borrower to the
assigning Lender and will be deemed to be Advances by the assignee to the
Borrower as of the date that the payment is made, excluding in each case the
effect of any premium or discount.
11.2 ASSIGNMENTS
11.2.1 Subject to Section 11.1 and the other terms of this Agreement, the
Lenders collectively or individually may assign to one or more assignees all or
a portion of their respective rights and obligations under this Agreement
(including, without limitation, all or a portion of their respective
Commitments). The parties to each such assignment shall execute and deliver an
Assignment Agreement to the Agent, for its consent and recording in the Register
and, except in the case of an assignment by the Lenders collectively or an
assignment by a Lender to an affiliate of that Lender, shall pay a processing
and recording fee of $3,000.00 to the Agent. After such execution, delivery,
consent and recording (i) the assignee thereunder shall be a party to this
Agreement and, to the extent that rights and obligations hereunder have been
assigned to it, have the rights and obligations of a Lender hereunder and (ii)
the assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment Agreement,
relinquish its rights and be released from its obligations under this Agreement,
other than obligations in respect of which it is then in default and liabilities
arising from its actions prior to the assignment. In the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto.
11.2.2 The agreements of an assignee contained in an Assignment Agreement
shall benefit the assigning Lender thereunder, the other Lenders and the Agent
in accordance with the terms of the Assignment Agreement.
11.2.3 The Agent shall maintain at its address referred to herein a copy of
each Assignment Agreement delivered to and acknowledged by it and a register for
recording the names and addresses of the Lenders and the Commitment under the
Credits of each Lender from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error. The Borrower, the Agent and each of the Lenders may treat each Person
whose
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name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement, and need not recognize any Person as a Lender unless it is
recorded in the Register as a Lender. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
11.2.4 Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee and approved by the Borrower and the Agent, the Agent
shall, if the Assignment Agreement has been completed and is in the required
form with such immaterial changes as are acceptable to the Agent:
(a) record the information contained therein in the Register; and
(b) give prompt notice thereof to the Borrower and the other Lenders,
and provide them with an updated version of Schedule 1.1.3.
11.3 PARTICIPATIONS
Each Lender may (subject to the provisions of Section 11.1) sell
participations to one or more financial institutions or other Persons in or to
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment), but the participant
shall not become a Lender and:
(a) the Lender's obligations under this Agreement (including,
without limitation, its Commitment) shall remain unchanged;
(b) the Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations;
(c) the Borrower, the Agent and the other Lenders shall continue to
deal solely and directly with the Lender in connection with the
Lender's rights and obligations under this Agreement;
(d) no participant shall have any right to approve any amendment or
waiver of any provision of this Agreement, or any consent to any
departure by any Person therefrom.
Notwithstanding the foregoing, each participant shall have the same
benefit, as if it was a Lender, with respect to the rights provided to the
Lenders in Section 12.15. Each participant shall also have the right to be
provided by the Lender from whom it has obtained its participation with all
information relating to the Borrower or any Guarantor which is provided to any
Lender. Without limiting the
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foregoing, no participant shall have the benefit of Section 12.14 except to the
extent that the Lender from whom it has obtained its participation is itself
entitled to compensation under that Section.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 CONSENT
Notwithstanding any other provision contained herein or in the other
Credit Documents, the Lenders hereby consent to the Acquisition, the Employee
Loans, the Amalgamation and all other transactions contemplated by the Purchase
Agreement including the redemption/retraction of Class B shares in the capital
of the Borrower and no such transaction shall be prohibited by such provisions.
12.2 HEADINGS AND TABLE OF CONTENTS
The headings of the Articles and Sections and the Table of Contents
are inserted for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
12.3 ACCOUNTING TERMS
Each accounting term used in this Agreement, unless otherwise defined
herein, has the meaning assigned to it under GAAP.
12.4 CAPITALIZED TERMS
All capitalized terms used in any of the Credit Documents (other than
this Agreement) which are defined in this Agreement shall have the meaning
defined herein unless otherwise defined in the other document.
12.5 SEVERABILITY
Any provision of this Agreement which is or becomes prohibited or
unenforceable in any relevant jurisdiction shall not invalidate or impair the
remaining provisions hereof which shall be deemed severable from such prohibited
or unenforceable provision and any such prohibition or unenforceability in any
such jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. Should this Agreement fail to provide for any relevant
matter, the validity, legality or enforceability of this Agreement shall not
thereby be affected.
12.6 NUMBER AND GENDER
Unless the context otherwise requires, words importing the singular
number shall include the plural and vice versa, words importing any gender
include all genders and references to agreements and other contractual
instruments shall
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be deemed to include all present or future amendments, supplements, restatements
or replacements thereof or thereto.
12.7 AMENDMENT, SUPPLEMENT OR WAIVER
No amendment, supplement or waiver of any provision of the Credit
Documents, nor any consent to any departure by the Borrower therefrom, shall in
any event be effective unless it is in writing, makes express reference to the
provision affected thereby and is signed by the Agent for and on behalf of the
Lenders or the Majority Global Lenders, as the case may be, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. No waiver or act or omission of the Agent, the
Lenders, or any of them, shall extend to or be taken in any manner whatsoever to
affect any subsequent Event of Default or breach by a Restricted Party of any
provision of the Credit Documents or the rights resulting therefrom.
12.8 GOVERNING LAW
Each of the Credit Documents, except for those which expressly provide
otherwise, shall be conclusively deemed to be a contract made under, and shall
for all purposes be governed by and construed in accordance with, the laws of
the Province of Manitoba and the laws of Canada applicable in Manitoba. Each
party to this Agreement hereby irrevocably and unconditionally attorns to the
non-exclusive jurisdiction of the courts of Manitoba and all courts competent to
hear appeals therefrom.
12.9 THIS AGREEMENT TO GOVERN
In the event of any conflict between the terms of this Agreement and the terms
of any other Credit Document, the provisions of this Agreement shall govern to
the extent necessary to remove the conflict, provided however, that as between
U.S. Banks and the Lenders, the Intercreditor Agreement will govern.
12.10 PERMITTED ENCUMBRANCES
The designation of an Encumbrance as a Permitted Encumbrance is not,
and shall not be deemed to be, an acknowledgment by the Lenders that the
Encumbrance shall have priority over the Security.
12.11 CURRENCY
All payments made hereunder shall be made in the currency in respect
of which the obligation requiring such payment arose. Unless the context
otherwise requires, all amounts expressed in this Agreement in terms of money
shall refer to Canadian Dollars.
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Except as otherwise expressly provided in this Agreement, wherever
this Agreement contemplates or requires the calculation of the equivalent in
Canadian Dollars of an amount expressed in US Dollars, or vice versa, the
calculation shall be made on the basis of the Exchange Rate at the effective
date of the calculation.
12.12 LIABILITY OF LENDERS
The liability of the Lenders in respect of all matters relating to
this Agreement and the other Credit Documents is several and not joint or joint
and several. Without limiting that statement, the obligations of the Lenders to
make Advances is limited to their respective Proportionate Shares of any Advance
that is requested, and, in the aggregate, to their respective Proportionate
Shares of the total amounts of the Credits.
12.13 EXPENSES AND INDEMNITY
All statements, reports, certificates, opinions, and other documents
or information required to be furnished to the Lenders, the Agent, or any of
them, by the Borrower or any Guarantor under this Agreement shall be supplied
without cost to the Lenders, the Agent, or any of them. The Borrower shall pay
on demand all reasonable third party costs and expenses of the Lenders, or any
of them (including, without limitation, the reasonable fees and expenses of
counsel for the Lenders and the Agent collectively, but not separately for
individual Lenders and the Agent, on a solicitor and own client basis), incurred
in connection with (i) the preparation, execution, delivery, administration,
periodic review and enforcement of the Credit Documents; (ii) obtaining advice
as to their rights and responsibilities in connection with the Credits and the
Credit Documents; (iii) reviewing, inspecting and appraising the collateral that
is the subject of the Security at reasonable intervals; and (iv) other matters
relating to the Credits, excluding any assignment or participation of an
interest in the Credits following the initial Advance under this Agreement.
Such costs and expenses shall be payable whether or not an Advance is made under
this Agreement.
The Borrower shall indemnify the Lenders, the Agent, and each of them,
against any liability, obligation, loss or expense which any of them may sustain
or incur as a consequence of (i) any representation or warranty made herein by
the Borrower which was incorrect at the time it was made or deemed to have been
made, (ii) a default by the Borrower in the payment of any sum due from it under
or in connection with the Credit Documents (irrespective of whether an Advance
is deemed to be made to the Borrower to pay the amount that it has failed to
pay), including, but not limited to, all sums (whether in respect of principal,
interest or any other amount) paid or payable to lenders of funds borrowed by
the Lenders, the Agent, or any of them, in order to fund the amount of any such
unpaid
amount to the extent the Lenders, the Agent, or any of them, are not reimbursed
pursuant to any other provisions of this Agreement, (iii) the failure of the
Borrower to complete any Advance or make any payment after notice therefor has
been given under this Agreement, (iv) any breach by the Borrower of its
representations and covenants in this Agreement relating to Hazardous Materials
and other environmental matters, (v) any other default by the Borrower
hereunder, and (vi) generally, the Lenders and the Agent having entered into
this Agreement and the other Credit Documents and made Advances to the Borrower.
A certificate of a Lender or the Agent as to the amount of any such loss or
expense shall be prima-facie evidence as to the amount thereof, in the absence
of manifest error provided that the Lender determines the amount owing to it in
good faith using any reasonable method and provides a detailed description of
its calculation of the amount owing to it.
The agreements in this Section shall survive the termination of this
Agreement and repayment of the Obligations.
12.14 MANNER OF PAYMENT AND TAXES
All payments to be made by or on behalf of the Borrower (or in the
case of upfront fees and indemnity fees, by the Agent or any Lender to another
Lender or to an assignee of an interest in the Credits) in connection with the
Credit Documents are to be made without set-off, compensation or counterclaim,
free and clear of and without deduction for or on account of any Tax, including
but not limited to withholding taxes, other than Excluded Taxes, except if such
deduction is required by law or the administration thereof. If any Tax, other
than Excluded Taxes, is deducted or withheld from any payments under the Credit
Documents (including the remittance provided for in this Section), the Borrower
making payment shall promptly remit to the Agent for the Lenders' benefit in the
currency in which such payment was made, the equivalent of the amount of Tax so
deducted or withheld together with the relevant receipt issued by the taxing or
other receiving authority. If any Borrower is prevented by operation of law or
otherwise from paying, causing to be paid or remitting such Tax, the interest or
other amount payable under the Credit Documents will be increased to such rates
as are necessary to yield and remit to the Lenders the principal sum advanced or
made available together with interest at the rates specified in the Credit
Documents after provision for payment of such Tax.
If any Lender or the Agent becomes liable for any tax in the
jurisdiction in which the Person making a payment under the Credit Documents is
located as a result of a payment being made without the required tax in that
jurisdiction having been deducted or withheld, the payer shall indemnify the
Lender or the Agent, as the case may be, for such tax and any interest and
penalties thereon, and the
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indemnity payment shall be increased as necessary so that after the imposition
of any tax in that jurisdiction on the indemnity payment (including tax in
respect of any such increase in the indemnity payment), the Lender or the Agent
shall receive the full amount of taxes, interest and penalties for which it is
liable in that jurisdiction.
12.15 INCREASED COSTS ETC.
If the introduction of or any change in or in the interpretation of, or any
change in the application to the Borrower or any Lender of, any law or any
regulation or guideline from any central bank or other governmental authority
that is binding on the Borrower or any Lender (whether or not having the force
of law), including but not limited to any reserve or special deposit requirement
or any Tax (other than Excluded Taxes) or any capital requirement, has due to
the Lenders' compliance therewith the effect, directly or indirectly, of (i)
increasing the cost to the Lenders, or any of them, of performing their
respective obligations hereunder; (ii) reducing any amount received or
receivable by the Lenders, or any of them, hereunder or its effective return
hereunder or on its capital; or (iii) causing the Lenders, or any of them, to
make any payment or to forego any return based on any amount received or
receivable by the Lenders, or any of them, hereunder, then upon demand from time
to time the Borrower shall pay such amount as shall compensate the Lenders for
any such cost, reduction, payment or foregone return that is not fully offset by
an increase in the applicable interest rate or rates or fees hereunder. Any
certificate of a Lender in respect of the foregoing will be prima facie evidence
of the foregoing, except for manifest error, provided that the Lender determines
the amounts owing to it in good faith using any reasonable averaging and
attribution methods and provides a detailed description of its calculation of
the amounts owing to it.
12.16 INTEREST ON MISCELLANEOUS AMOUNTS
If the Borrower fails to pay any amount payable hereunder (other than
principal, interest thereon or interest upon interest which is payable as
otherwise provided in this Agreement) on the due date, the Borrower shall, on
demand, pay interest on such overdue amount to the Agent from and including such
due date up to but excluding the date of actual payment, both before and after
demand, default or judgment, at a rate of interest per annum equal to the sum of
the Prime Rate plus 2.5 % per annum, compounded monthly.
If the Borrower deposits cash as Collateral pursuant to a requirement
under this Agreement, the Lender or Lenders holding the cash shall pay the
Borrower interest on the cash while it continues to be held as Collateral at the
rate offered by the relevant Lenders from time to time for deposits in the
relevant currency of comparable size and term.
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12.17 CURRENCY INDEMNITY
In the event of a judgment or order being rendered by any court or
tribunal for the payment of any amounts owing to the Lenders or any of them
under this Agreement or for the payment of damages in respect of any breach of
this Agreement or under or in respect of a judgment or order of another court or
tribunal for the payment of such amounts or damages, such judgment or order
being expressed in a currency ("the Judgment Currency) other than the currency
payable hereunder or thereunder ("the Agreed Currency"), the party against whom
the judgment or order is made shall indemnify and hold the Lenders harmless
against any deficiency in terms of the Agreed Currency in the amounts received
by the Lenders arising or resulting from any variation as between (i) the
Exchange Rate at which the Agreed Currency is converted into the Judgment
Currency for the purposes of such judgment or order, and (ii) the Exchange Rate
at which each Lender is able to purchase the Agreed Currency with the amount of
the Judgment Currency actually received by the Lender on the date of such
receipt. The indemnity in this Section shall constitute a separate and
independent obligation from the other obligations of the Borrower hereunder,
shall apply irrespective of any indulgence granted by the Lenders, and shall be
secured by the Security.
12.18 ADDRESS FOR NOTICE
Notice to be given under the Credit Documents shall, except as
otherwise specifically provided, be in writing addressed to the party for whom
it is intended and, unless the law deems a particular notice to be received
earlier, a notice shall not be deemed received until actual receipt thereof by
the other party. The addresses of the parties hereto for the purposes hereof
shall be the addresses specified beside their respective signatures to this
Agreement or on any Assignment Agreement, or such other mailing or telecopier
addresses as each party from time to time may notify the other as aforesaid.
12.19 TIME OF THE ESSENCE
Time shall be of the essence in this Agreement.
12.20 FURTHER ASSURANCES
The Borrower shall, at the request of the Agent acting on the
instructions of the Majority Global Lenders, do all such further acts and
execute and deliver all such further documents as may, in the reasonable opinion
of the Majority Global Lenders, be necessary or desirable in order to fully
perform and carry out the purpose and intent of the Credit Documents.
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12.21 TERM OF AGREEMENT
Except as otherwise provided herein, this Agreement shall remain in
full force and effect until the payment and performance in full of all of the
Obligations.
12.22 PAYMENTS ON BUSINESS DAY
Whenever any payment or performance under the Credit Documents would
otherwise be due on a day other than a Business Day, such payment shall be made
on the following Business Day, unless the following Business Day is in a
different calendar month, in which case the payment shall be made on the
preceding Business Day.
12.23 COUNTERPARTS AND FACSIMILE
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be deemed to be an original, and such
counterparts together shall constitute one and the same agreement. For the
purposes of this Section, the delivery of a facsimile copy of an executed
counterpart of this Agreement shall be deemed to be valid execution and delivery
of this Agreement, but the party delivering a facsimile copy shall deliver an
original copy of this Agreement as soon as possible after delivering the
facsimile copy.
12.24 ENTIRE AGREEMENT
This Agreement and the Fee Agreement constitute the entire agreement
between the parties hereto concerning the matters addressed in this Agreement,
and cancel and supersede any prior agreements, undertakings, declarations or
representations, written or verbal, in respect thereof.
12.25 DATE OF AGREEMENT
This Agreement may be referred to as being dated the _____ day of
______________, 1999 notwithstanding the actual date of execution.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their authorized representatives or officers in that regard, as of the date
first above written.
3578275 CANADA INC. CANADIAN IMPERIAL BANK OF
COMMERCE
Per: /s/ Xxxxxx X. Xxxxx Per: /s/ signature appears here
----------------------------- -----------------------------
Per: Per: /s/ signature appears here
----------------------------- -----------------------------
FIRST CHICAGO NBD BANK, CANADA
Per: /s/ signature appears here
-----------------------------
Per:
-----------------------------
TABLE OF CONTENTS
ARTICLE I DEFINED TERMS............................................ 2
1.1 Defined Terms............................................... 2
1.2 Omega Credit Agreement...................................... 15
1.3 Computation of Time Periods................................. 15
1.4 Other Definitional Terms.................................... 16
ARTICLE II CREDIT A................................................ 16
2.1 Amount and Availment Options................................ 16
2.2 Revolving Credit............................................ 16
2.3 Use of Credit A............................................. 16
2.4 Term and Repayment.......................................... 16
2.5 Optional Reduction or Termination of Credit A............... 17
2.6 Interest Rates and Fees..................................... 17
2.7 Standby Fees................................................ 18
2.8 Agent Fees.................................................. 18
ARTICLE III CREDIT B............................................... 18
3.1 Amount and Availment Options................................ 18
3.2 Non-Revolving Credit........................................ 18
3.3 Use of Credit B............................................. 19
3.4 Term and Repayment.......................................... 19
3.5 Interest Rates and Fees..................................... 19
3.6 Mandatory Prepayments....................................... 20
ARTICLE IV SECURITY AND EXCHANGE RATE FLUCTUATIONS................. 21
4.1 Security.................................................... 21
4.2 Exchange Rate Fluctuations.................................. 22
ARTICLE V DISBURSEMENT CONDITIONS.................................. 22
5.1 Conditions Precedent to Initial Advance..................... 22
5.2 Conditions Precedent to all Advances........................ 25
ARTICLE VI ADVANCES................................................ 25
6.1 Lenders' Obligations Relating to L/Cs....................... 25
6.2 Evidence of Indebtedness.................................... 26
6.3 Conversions................................................. 26
6.4 Notice of Advances and Payments............................. 27
6.5 Prepayments and Reductions.................................. 27
6.6 Prime Rate and Base Rate Advances........................... 27
6.7 Co-ordination of Prime Rate and Base Rate Advances.......... 28
6.8 Form of Bankers' Acceptances................................ 29
6.9 Sale of Bankers' Acceptances................................ 29
6.10 Size and Maturity of Bankers' Acceptances and Rollovers..... 30
6.11 Co-ordination of BA Advances................................ 30
6.12 Payment of Bankers' Acceptances............................. 31
6.13 Deemed Advance - Bankers' Acceptances....................... 31
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6.14 Waiver...................................................... 32
6.15 Degree of Care.............................................. 32
6.16 Indemnity................................................... 32
6.17 Obligations Absolute........................................ 32
6.18 Shortfall on Drawdowns, Rollovers and Conversions........... 32
6.19 Prohibited Use of Bankers' Acceptances and L/Cs............. 33
6.20 Issuance and Maturity of L/Cs............................... 33
6.21 Payment of L/C Fees......................................... 33
6.22 Payment of L/Cs............................................. 34
6.23 Deemed Advance - L/Cs....................................... 35
6.24 Prohibited Rates of Interest................................ 35
ARTICLE VII REPRESENTATIONS AND WARRANTIES......................... 35
7.1 Representations and Warranties.............................. 35
7.2 Survival of Representations and Warranties.................. 41
ARTICLE VIII COVENANTS AND CONDITIONS.............................. 41
8.1 Intercompany Obligations.................................... 41
8.2 Affirmative Covenants....................................... 42
8.3 Reporting Requirements...................................... 45
8.4 Negative Covenants.......................................... 46
8.5 Use of Insurance Proceeds................................... 48
8.6 Expenses.................................................... 48
8.7 Ownership of the Borrower................................... 49
ARTICLE IX DEFAULT................................................. 49
9.1 Events of Default........................................... 49
9.2 Acceleration and Termination of Rights...................... 51
9.3 Payment of Bankers' Acceptances and L/Cs.................... 52
9.4 Remedies.................................................... 52
9.5 Saving...................................................... 52
9.6 Perform Obligations......................................... 53
9.7 Third Parties............................................... 53
9.8 Power of Attorney........................................... 53
9.9 Remedies Cumulative......................................... 53
9.10 Set-Off or Compensation..................................... 54
ARTICLE X THE AGENT AND THE LENDERS................................ 54
10.1 Authorization of Agent and Relationship..................... 54
10.2 Disclaimer of Agent......................................... 54
10.3 Failure of Lender to Fund................................... 55
10.4 Payments by the Borrower.................................... 56
10.5 Payments by Agent........................................... 57
10.6 Direct Payments............................................. 58
10.7 Administration of the Credits............................... 59
10.8 Rights of Agent............................................. 63
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10.9 Acknowledgements, Representations and Covenants of Lenders.. 64
10.10 Collective Action of the Lenders............................ 65
10.11 Successor Agent............................................. 65
10.12 Provisions Operative Between Lenders and Agent Only......... 66
ARTICLE XI ADDITIONAL LENDERS, SUCCESSORS AND ASSIGNS.............. 66
11.1 Successors and Assigns...................................... 66
11.2 Assignments................................................. 67
11.3 Participations.............................................. 68
ARTICLE XII MISCELLANEOUS PROVISIONS............................... 69
12.1 Consent..................................................... 69
12.2 Headings and Table of Contents.............................. 69
12.3 Accounting Terms............................................ 69
12.4 Capitalized Terms........................................... 69
12.5 Severability................................................ 69
12.6 Number and Gender........................................... 70
12.7 Amendment, Supplement or Waiver............................. 70
12.8 Governing Law............................................... 70
12.9 This Agreement to Govern.................................... 70
12.10 Permitted Encumbrances...................................... 70
12.11 Currency.................................................... 70
12.12 Liability of Lenders........................................ 71
12.13 Expenses and Indemnity...................................... 71
12.14 Manner of Payment and Taxes................................. 72
12.15 Increased Costs etc......................................... 73
12.16 Interest on Miscellaneous Amounts........................... 73
12.17 Currency Indemnity.......................................... 73
12.18 Address for Notice.......................................... 74
12.19 Time of the Essence......................................... 74
12.20 Further Assurances.......................................... 74
12.21 Term of Agreement........................................... 74
12.22 Payments on Business Day.................................... 74
12.23 Counterparts and Facsimile.................................. 75
12.24 Entire Agreement............................................ 75
12.25 Date of Agreement........................................... 75
