TD COMMERCIAL BANKING
Pine Valley Commercial Banking Centre
0000 Xxx. #0 & Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
September 24, 2001
Ontario Power Contracting Limited
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxx
Dear Sir:
The following amending agreement (the "Amending Agreement") amends the terms and
conditions of the credit facilities (the "Facilities") provided to the Borrower
as per the Agreement dated July 27, 2001:
BORROWER ONTARIO POWER CONTRACTING LIMITED (the "Borrower")
POSITIVE
COVENANTS So long as any amounts remain outstanding and unpaid under
this Agreement or so long as any commitment under this
Agreement remains in effect, the Borrower will and will
ensure that its subsidiaries and each of the Guarantors will
observe the Standard Positive Covenants set out in Schedule
"A" and in addition will:
1. Provide signed Review Level financial statements within
120 days of fiscal year end.
2. Provide management prepared interim statements within
45 days of each quarter end, together with a signed
compliance certificate.
3. Provide a construction program, satisfactory to the
Bank, within 45 days of each quarter end.
4. Provide signed aged accounts receivable, accounts
payable and holdback lists within 20 days of month end.
Same are to identify all related accounts receivable,
lienable payables and contra accounts. To be submitted
together with a signed compliance certificate.
5. Ensure that shareholders/guarantors infuse sufficient
funds to rectify all financial covenant default(s) upon
the Bank's request.
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FINANCIAL
COVENANTS The Borrower agrees at all times to:
1. Ensure that direct borrowings, plus L/Cs, plus L/Gs, do
not exceed 80% of accounts receivable, less over 90
days accounts, related accounts, contra accounts,
lienable payables and holdbacks and accounts from
Osler Paving and 1212700 Ontario Ltd. Related accounts
include, but are not limited to, Century Brick,
Rexdale Brick and Xxxxxxxxx Xxxx Products.
2. Maintain a minimum Effective Net Worth of $800,000 to
increase to $1,000,000 by September 30, 2001.
Effective Net Worth is defined as shareholders' equity,
plus amounts owing to shareholders/related parties,
less amounts owing by shaeholders/related parties, less
related receivables, inclusive of, but not limited to,
Rexdale Brick, Century Brick and Xxxxxxxxx Xxxx
Products Ltd., less intangibles (goodwill, organization
expenses, etc.) Accounts receivable from Osler Paving
and 1212700 Ontario Ltd. are to be fully deducted from
Effective Net Worth. To be tested quarterly with year
to date earnings to include an adjustment for taxes as
follows: 25% of earnings from $0 to $300,001 and up.
3. Maintain a maximum Total Debt to Effective Net Worth
Ratio of 4.0:1. Total Debt is defined as current
liabilities, plus long-term debt, less amounts owing to
shareholders/related parties, less deferred taxes.
Effective Net Worth is defined above. To be tested
quarterly with year to date earnings to include an
adjustment for taxes as follows: 25% of earnings from
$0 to $300,000 and 50% from $300,001 and up.
4. Maintain a minimum Current Ratio of 1.25:1. Current
Ratio is defined as current assets, less related
accounts receivable and receivables from Osler Paving
and 1212700 Ontario Ltd., less advances to
shareholders/related parties, divided by current
liabilities, less deferred taxes. To be tested
quarterly with year to date earnings to include an
adjustment for taxes as follows: 25% of earnings from
$0 to $300,000 and 50% from $300,001 and up.
SCHEDULE "A"
STANDARD
TERMS AND
CONDITIONS Schedule "A" sets out the Standard Terms and Conditions
("Standard Terms and Conditions") which apply to these
credit facilities. The Standard Terms and Conditions,
including the defined terms set out therein, form part of
this Agreement, unless this letter states specifically that
one or more of the Standard Terms and Conditions do not
apply or are modified.
All other terms and conditions remain unchanged. We ask that you acknowledge
your agreement to these amendments by signing and returning the attached
duplicate copy of this Amending Agreement to the undersigned. The amendments
will not come into force unless the duplicate of this Amending Agreement is
received by the Bank on or before OCTOBER 5, 2001.
Yours truly,
THE TORONTO-DOMINION BANK:
/s/ XXXXX XXXXX W198 /S/ XXXXXXXX XXXX U647
-------------------- ---- ----------------- -----
Xxxxx Xxxxx Signing Xxxxxxxx Xxxx Signing
Vice-President No. Relationship Manager No.
Commercial Banking
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