CREDIT AGREEMENT
Cdn$30,000,000
Revolving Term Credit Facility
Dated as of December 19, 1996
Between
INTER-CITY PRODUCTS CORPORATION (CANADA)
as Borrower
X.X. XxXXXXXX SUPPLY LIMITED
as a Loan Party
and
THE LENDER OR LENDERS PARTY THERETO
and
GENERAL ELECTRIC CAPITAL CANADA INC.
as Agent
XxXxxxxx Binch
BARRISTERS & SOLICITORS
TABLE OF CONTENTS
RECITALS............................................................1
SECTION 1 AMOUNT AND TERMS OF CREDIT..............................1
1.1 Revolving Credit Advances...................................1
1.2 Rollover of BA Rate Loans...................................3
1.3 Conversion of Revolving Credit Advances.....................4
1.4 Repayment; Termination of Commitment........................4
1.5 Use of Proceeds.............................................5
1.6 Interest....................................................5
1.7 Eligible Accounts and Eligible Inventory....................8
1.8 Fees........................................................8
1.9 Cash Management System......................................9
1.10 Receipt of Payments.........................................9
1.11 Pro Rata Treatment..........................................9
1.12 Application and Allocation of Payments.....................10
1.13 NonReceipt of Funds by Agent...............................11
1.14 Sharing of Payments, etc...................................11
1.15 Accounting.................................................12
1.16 Indemnity..................................................13
1.17 Access.....................................................13
1.18 Taxes......................................................15
1.19 Additional Costs...........................................16
1.20 Currency Matters...........................................17
1.21 Notices of Revolving Credit Advance, Conversion,
Rollover.................................................17
SECTION 2 CONDITIONS PRECEDENT...................................17
2.1 Conditions to the Initial Advance..........................17
2.2 Further Conditions to Each Advance, Rollover
and Conversion...........................................22
SECTION 3 REPRESENTATIONS AND WARRANTIES.........................23
3.1 Corporate Existence; Compliance with Law...................24
3.2 Chief Executive Offices; Collateral Locations;
Corporate or Other Names.................................24
3.3 Corporate Power; Authorization;
Enforceable Obligations..................................24
3.4 Financial Statements and Projections.......................25
3.5 Material Adverse Change, Restricted Payments...............25
3.6 Ownership of Property; Liens...............................25
3.7 Restrictions; No Default; Material Contracts...............26
3.8 Labour Matters.............................................27
3.9 Ventures, Subsidiaries and Equity Investments;
Outstanding Stock and Indebtedness.......................27
3.10 Taxes......................................................27
3.11 No Foreign Business........................................28
3.12 Benefit and Pension Plans..................................28
3.13 No Litigation..............................................29
3.14 Brokers....................................................29
3.15 Intellectual Property......................................29
3.16 Full Disclosure............................................30
3.17 Environmental Matters......................................31
3.18 Insurance Policies.........................................33
3.19 Bank Accounts and Lock Boxes...............................33
3.20 Solvency...................................................33
3.21 Inventory..................................................34
3.22 Corporate Structure........................................34
3.23 Government Contracts.......................................34
3.24 Customer and Trade Relations...............................34
3.25 Agreements and Other Documents.............................34
3.26 ICP Indebtedness...........................................35
3.27 Xxxxxxx Indebtedness.......................................35
3.28 Collateral.................................................35
SECTION 4 FINANCIAL STATEMENTS AND INFORMATION...................36
4.1 Reports and Notices........................................36
4.2 Communication with Accountants.............................36
SECTION 5 AFFIRMATIVE COVENANTS..................................36
5.1 Maintenance of Existence and Conduct of Business...........36
5.2 Payment of Obligations, Charges and Claims.................37
5.3 Books and Records..........................................38
5.4 Litigation.................................................38
5.5 Insurance, Damage to or Destruction of Collateral..........38
5.6 Compliance with Laws.......................................41
5.7 Agreements.................................................41
5.8 Supplemental Disclosure....................................42
5.9 Environmental Matters......................................42
5.10 Canadian Benefit and Pension Plans.........................44
5.11 Landlord's, Warehouseman/Bailee and Mortgagee
Agreements..............................................46
5.12 Certain Obligations Respecting Subsidiaries................47
5.13 Report to Other Creditors; Letters of Credit
and Foreign Exchange Contracts..........................47
5.14 Intellectual Property......................................47
5.15 Bank Act Security..........................................49
5.16 New Locations..............................................49
5.17 Leased and Other Locations of Collateral
that are Not Owned......................................49
5.18 Security...................................................50
5.19 Inventory Reporting and Tracking...........................50
5.20 MOEE Search Results........................................50
SECTION 6 NEGATIVE COVENANTS.....................................50
6.1 Mergers, Subsidiaries, Etc.................................50
6.2 Investments................................................51
6.3 Indebtedness...............................................51
6.4 Affiliate and Employee Loans and Transactions..............52
6.5 Capital Structure and Business.............................52
6.6 Guaranteed Indebtedness....................................53
6.7 Liens......................................................53
6.8 Sale of Assets.............................................54
6.9 Material Contracts.........................................54
6.10 ERISA......................................................54
6.11 Canadian Benefit and Pension Plans.........................54
6.12 Financial Covenants........................................55
6.13 Sale-Lease-backs, Etc......................................55
6.14 Cancellation of Indebtedness...............................55
6.15 Restricted Payments........................................56
6.16 Leases.....................................................56
6.17 Lock Boxes and Bank Accounts...............................56
6.18 No Speculative Transactions................................56
6.19 Limitation on Negative Pledge Clauses, Etc.................56
6.20 Sale of Stock..............................................57
6.21 Accounting Changes.........................................57
6.22 Fiscal Year................................................57
6.23 Changes Relating to ICP Indebtedness and
Xxxxxxx Indebtedness....................................57
6.24 Cash Management............................................58
6.25 0000 Xxxx-Xxxxxx Xxxxxx and Collateral Located
outside of Quebec and Ontario...........................58
SECTION 7 TERM...................................................58
7.1 Duration...................................................58
7.2 Survival of Obligations....................................58
SECTION 8 EVENTS OF DEFAULT; RIGHTS AND REMEDIES.................59
8.1 Events of Default..........................................59
8.2 Remedies...................................................62
8.3 Waivers by Loan Parties....................................63
8.4 Application of Proceeds....................................64
SECTION 9 AGENT..................................................65
9.1 Appointment, Powers and Immunities.........................65
9.2 Reliance by Agent..........................................65
9.3 Defaults...................................................66
9.4 Rights as a Lender.........................................66
9.5 Indemnification............................................66
9.6 Non-Reliance on Agent and Other Lenders....................67
9.7 Failure to Act.............................................67
9.8 Successor Agent............................................68
9.9 Consents under Loan Documents..............................68
9.10 Collateral Matters.........................................69
9.11 Non-Funding Lender; Actions by Lenders.....................69
9.12 Settlement Procedures......................................70
SECTION 10 SUCCESSORS AND ASSIGNS................................72
10.1 Successors and Assigns.....................................72
10.2 Assignments and Participations.............................72
SECTION 11 MISCELLANEOUS.........................................75
11.1 Complete Agreement; Modification of Agreement..............75
11.2 Fees and Expenses..........................................75
11.3 No Waiver..................................................77
11.4 Remedies...................................................77
11.5 Severability...............................................77
11.6 Conflict of Terms..........................................77
11.7 Right of Setoff............................................77
11.8 Judgment Currency..........................................78
11.9 Notices....................................................79
11.10 Section Titles.............................................81
11.11 Counterparts...............................................81
11.12 Time of the Essence........................................81
11.13 Confidentiality............................................81
11.14 Governing Law..............................................82
11.15 Further Assurances.........................................83
CREDIT AGREEMENT
This Agreement is dated as of December 19, 1996, between INTERCITY
PRODUCTS CORPORATION (CANADA), a Canada corporation, ("Borrower"),
X.X.XxXXXXXX SUPPLY LIMITED, an Ontario corporation, each of the lenders
listed on the signature pages hereof or which pursuant to Section 10.2
becomes a "Lender" hereunder (each individually, a "Lender" and collectively,
"Lenders"), and GENERAL ELECTRIC CAPITAL CANADA INC., a Canada corporation,
as agent hereunder for the Lenders (in such capacity, together with its
successors in such capacity, "Agent").
RECITALS
A. Borrower desires to borrow up to $30,000,000 in Canadian Dollars in
the aggregate from Lenders, and Lenders are willing to make a secured
revolving loan in favour of Borrower of up to such amount upon the terms and
conditions set forth herein.
B. Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings ascribed to them in Annex A and, for purposes of
this Agreement and the other Loan Documents, the rules of construction set
forth in AnnexA shall govern. Unless otherwise indicated, all references in
this Agreement to articles, sections, subsections, schedules, annexes,
exhibits, and attachments shall refer to the corresponding articles,
sections, subsections, schedules, annexes, exhibits, and attachments of or to
this Agreement. All schedules, annexes, exhibits and attachments hereto, or
expressly identified to this Agreement, are incorporated herein by reference,
and taken together, shall constitute but a single agreement. Unless
otherwise expressly set forth herein, or in a written amendment referring to
such schedules and annexes, all schedules and annexes referred to herein
shall mean the schedules and annexes as in effect as of the Closing Date.
These recitals shall be construed as part of this Agreement.
FOR VALUE RECEIVED, the parties agree as follows:
SECTION 1 AMOUNT AND TERMS OF CREDIT
1.1 Revolving Credit Advances.
(a) Upon and subject to the terms and conditions hereof, each
Lender severally agrees to make available, from time to time until the
Commitment Termination Date, for Borrower's use and upon the request of
Borrower therefor to Agent, advances (each, a "Revolving Credit Advance") in
Canadian Dollars in an aggregate principal amount at any time outstanding up
to but not exceeding the Revolving Credit Commitment of such Lender, provided
that in no event shall the aggregate principal amount of the Revolving Credit
Loan exceed the lesser of:
(1) Maximum Revolving Credit Commitment; and
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(2) the Borrowing Base.
Revolving Credit Advances shall be available by way of Prime Rate Loans and
BA Rate Loans. Each BA Rate Loan shall be in a minimum principal amount of
$1,000,000 and multiples of $500,000 in excess thereof. No Interest Period
shall extend beyond the Commitment Termination Date. Not more than four (4)
Interest Periods shall be in effect at any time with respect to the Revolving
Credit Loan. Borrower may from time to time borrow, repay and reborrow
Revolving Credit Advances under this Section 1.1 so long as it is in
compliance with all terms and conditions described hereunder. BA Rate Loans
will only be available to Borrower if at the time of request the Revolving
Credit Loan then outstanding equals or exceeds $3,000,000 and, for the
duration of the Interest Period selected by Borrower, is reasonably
anticipated to continue to equal or exceed $3,000,000.
(b) Borrower shall give Agent (which shall promptly notify Lenders)
notice of each borrowing requested by Borrower hereunder, as provided in
Section 1.1(c) (a "Notice of Revolving Credit Advance"), and, subject to
Section 1.15, on the date specified for such borrowing each Lender shall make
available the amount of the Revolving Credit Advance to be made by it to
Agent to such account of Agent as Agent may designate, in immediately
available funds, for the account of Borrower. Agent shall, before 2:00 p.m.
(Toronto time) on the date specified for such borrowing, wire transfer in
immediately available funds to the Disbursement Account specified by
Borrower, the aggregate amount of the Revolving Credit Advances so made
available by Lenders to Agent.
(c) Each Notice of Revolving Credit Advance shall be given in
writing (by telecopy or hand delivery) to Agent at its address at 0000
Xxxxxxxxxx Xxxx., Xxxxxxxxxxx, Xxxxxxx X0X 0X0, to the attention of Xxxx
Xxxxxxxx or such other Person as may be designated in writing by Agent to
Borrower, Telephone No. (000) 0000000, Telecopy No. (000) 0000000, with a
copy to General Electric Capital Corporation, 000 Xxxx Xxxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, to the attention of Account Manager InterCity, or
such other Person as may be designated in writing by Agent to Borrower,
Telephone No. (000) 0000000, Telecopy No. (000) 0000000, in each case given
no later than:
(1) 12:00 p.m. (Toronto time) on the Business Day of the proposed
Revolving Credit Advance by way of Prime Rate Loan; and
(2) 12:00 p.m. (Toronto time) on the Business Day that is two
Business Days prior to the proposed Revolving Credit advance by
way of BA Rate Loan.
Each Notice of Revolving Credit Advance shall be substantially in the form of
Exhibit 1.1(c), specifying therein the requested date, the type, the amount
and the term of the Interest Period (if applicable) of such Revolving Credit
Advance and such other information as may be required by Agent.
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(d) The Revolving Credit Advances made by each Lender to Borrower
shall be evidenced by a single promissory note of Borrower for such Lender
substantially in the form of Exhibit 1.1(d) (collectively the "Revolving
Credit Notes"), dated the Closing Date, payable to such Lender in a maximum
principal amount equal to the amount of its Revolving Credit Commitment as
originally in effect and otherwise duly completed. The parties hereto
expressly acknowledge, confirm and agree that notwithstanding any provision
to the contrary contained herein or in the Revolving Credit Notes, the
Revolving Credit Notes that shall be executed by Borrower in favour of any
Lender do not constitute titles of indebtedness under the Civil Code of
Quebec. The date, the type and the amount of each Revolving Credit Advance
made by each Lender to Borrower, the dates of the commencement and the
termination of each Interest Period (as applicable) and each payment of
principal and interest with respect thereto and all other amounts becoming
due from the Loan Parties to such Lender and to Agent for the account of such
Lender or Agent shall be recorded on the books and records of Agent, which
books and records shall constitute prima facie evidence of the accuracy of
the information therein recorded and of the indebtedness of the Loan Parties
to such Lender and Agent. All Obligations shall be immediately due and
payable on the Commitment Termination Date.
(e) Borrower shall furnish to Agent a Borrowing Base Certificate
substantially in the form of Exhibit 1.1(e), completed and signed by the
Senior Vice President, Canadian Operations or Director of Finance of
Borrower, which sets forth a calculation of the Borrowing Base at the times
and for the periods set forth in Annex E. In making any Revolving Credit
Advance to Borrower hereunder, Borrower agrees that Agent and each Lender
shall be entitled to rely upon the most recent Borrowing Base Certificate
delivered by Borrower to Agent and on other information available to Agent.
Borrower further agrees that if Borrower shall have failed to deliver a
Borrowing Base Certificate to Agent by the time specified in Annex E, Lenders
shall be under no obligation to make any further Revolving Credit Advances to
Borrower until such time as such Borrowing Base Certificate is delivered to
Agent.
1.2 Rollover of BA Rate Loans. Provided that the provisions of Section
2.2 and the other terms of this Agreement have been satisfied, Borrower may
give to Agent notice substantially in the form of Exhibit 1.2 (a "Notice of
Rollover") at or before 12:00 p.m. (Toronto time) two (2) Business Days
before the last day of the Interest Period applicable thereto that Borrower
does not intend to repay such BA Rate Loan on its then current maturity date
and of the duration of the next Interest Period applicable to such BA Rate
Loan, which new Interest Period shall commence on and include the last day of
the prior Interest Period. Interest for such last day shall be calculated
solely by reference to the interest rate applicable to such new Interest
Period and not the interest rate applicable to the Interest Period ending on
such date. If Borrower fails to give such notice, such maturing BA Rate Loan
shall be deemed to be converted on its maturity date into a Prime Rate Loan
in an amount equal to the principal amount of such maturing BA Rate Loan.
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1.3 Conversion of Revolving Credit Advances. Provided that the
provisions of Section 2.2 and the other terms of this Agreement have been
satisfied, Borrower may elect to convert, in whole or in part, an outstanding
Prime Rate Loan into a BA Rate Loan by giving notice to Agent substantially
in the form of Exhibit 1.3 (a "Notice of Conversion") no later than 12:00
noon (Toronto time) on the Business Day that is two (2) Business Days prior
to the proposed conversion date, provided that, each conversion to a BA Rate
Loan shall be for a minimum aggregate amount of $1,000,000 and multiples of
$500,000 in excess thereof.
1.4 Repayment; Termination of Commitment.
(a) Borrower hereby promises to pay to Agent, for the account of
each Lender, the entire outstanding principal amount of the Revolving Credit
Loan and unless otherwise payable hereunder, all other Obligations and the
Revolving Credit Loan shall mature, on the Commitment Termination Date.
(b) If the Revolving Credit Loan exceeds the lesser of (1) the
Borrowing Base, and (2) the Maximum Revolving Credit Commitment, Borrower
shall immediately repay to Agent the Revolving Credit Loan in the amount of
such excess; provided that the excess balance shall nevertheless constitute
Obligations that are secured by the Collateral and entitled to all the
benefits thereof and of the Loan Documents and shall be deemed to be
evidenced by the Revolving Credit Notes.
(c) Unless Agent otherwise agrees with the consent of Required
Lenders, Borrower shall make payments to Agent on the outstanding principal
amount of the Revolving Credit Loan in an amount equal to one hundred percent
(100%) of the Net Proceeds of each sale or other disposition of any property
of any Loan Party contemporaneously with each such sale or disposition. Such
payments shall be applied, without premium or penalty (except as provided in
Section 1.6(g)), against outstanding amounts under the Revolving Credit Loan,
and then to the other Obligations in such manner and order as Agent shall
determine (or if all Lenders determine otherwise, as Lenders so determine).
The foregoing shall not constitute a consent by Agent or any Lender to any
sale or other disposition not otherwise expressly permitted hereunder. For
greater certainty, payments made to Agent in accordance with this Section
1.4(c) shall not reduce the Revolving Credit Commitments.
(d) Borrower shall have the right at any time, upon 30 days' prior
written notice to Agent, to terminate voluntarily the Revolving Credit
Commitments of all (but not less than all) Lenders (in whole but, subject to
Section 1.4(e), not in part) without premium or penalty other than payment to
Agent of the Termination Fee. Upon termination of the Revolving Credit
Commitments under this Section 1.4(d), Borrower's right to receive Revolving
Credit Advances shall simultaneously terminate and Borrower's obligation to
pay the NonUse Fee shall terminate, and notwithstanding anything to the
contrary contained herein or in any Revolving Credit Note, the entire balance
of the Obligations shall be immediately due and payable. On the date of such
termination, Borrower shall pay to Agent for value on that date all of the
Obligations, including the Termination Fee and any accrued and unpaid
interest.
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(e) Borrower shall have the right at any time after the first
anniversary of the Closing Date, upon 30 days prior written notice to the
Agent, to reduce the Maximum Revolving Credit Commitment to $10,000,000,
without premium or penalty, in minimum increments of $5,000,000, provided
that no other source of financing is used, directly or indirectly, to make or
permit such reduction. Upon any such reduction, each Lender's Revolving
Credit Commitment would be reduced proportionately.
(f) If the principal amount of any BA Rate Loan is reduced by
payment, prepayment or otherwise prior to the last day of the Interest Period
applicable thereto, then the amounts specified in Section 1.6(g) shall be due
and payable.
1.5 Use of Proceeds. Borrower shall use the proceeds of Revolving Credit
Advances for,
(a) the payment of costs and expenses of the financing
transactions contemplated by this Agreement that are payable
by Borrower;
(b) to repay Indebtedness of the Borrower under the Existing
Credit Agreement as provided in Section 2.1(d); and
(c) for financing ordinary working capital and general corporate
purposes of Borrower not prohibited by the terms of this
Agreement and the other Loan Documents.
1.6 Interest.
(a) Borrower shall pay to Agent interest for the rateable benefit
of Lenders on the aggregate outstanding balance of the Revolving Credit
Advances:
(1) made by way of Prime Rate Loans until paid in full at a
floating rate equal to the sum of the Prime Rate in effect
from time to time plus 1.00% per annum; and
(2) made by way of BA Rate Loans equal to the sum of the BA Rate
(as in effect for the Interest Period for each BA Rate Loan)
plus 2.00% per annum.
(b) Borrower shall pay to Agent for the account of each Lender
interest on the Revolving Credit Advances at the following times:
(1)with respect to Prime Rate Loans, in arrears for the preceding calendar
month or for the period from the last day to which interest has been paid, as
applicable, on the first day of each calendar month, commencing on the first
day of the month following the month in which the first Revolving Credit
Advance is made;
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(2) with respect to BA Rate Loans, in arrears on the last day of
the Interest Period therefor;
(3) if not otherwise paid in full under clause (b)(1) or (2) above
because the Commitment Termination Date occurs on a date other
than on the first day of a calendar month or the last day of
an Interest Period, on the Commitment Termination Date; and
(4) if any interest accrues or remains payable after the
Commitment Termination Date, upon demand.
Whenever any payment to be made hereunder or under any other Loan
Document shall be stated to be due and payable, or whenever the last day of
any Interest Period would otherwise occur, on a day which is not a Business
Day, such payment shall be made, and the last day of such Interest Period
shall occur, on the next succeeding Business Day and such extension of time
shall in such case be included in computing interest on such payment.
(c) Interest shall be calculated by Agent daily on the daily
outstanding principal balance on the basis of a three hundred sixty-five
(365) day year, in each case for the actual number of days occurring in the
period for which such interest is payable. Each determination by Agent of an
interest rate hereunder shall be conclusive absent manifest error.
(d) Upon the occurrence and during the continuation of any Event
of Default:
(1) the interest rate applicable to principal on the Revolving
Credit Advances may, in the sole discretion of Agent or
Required Lenders, be increased to the Default Rate; and
(2) interest on interest and other Obligations (excluding the
principal amount of the Revolving Credit Advances) in default
may, in the sole discretion of Agent or Required Lenders, be
charged at the Default Rate and shall be payable on demand;
provided, that upon the occurrence of an Event of Default specified in
Section 8.1(g), 8.1(h) or 8.1(i), the interest rate applicable to principal
on the Revolving Credit Advances shall be increased automatically to the
Default Rate and interest on interest and other Obligations (excluding
principal on the Revolving Credit Advances) in default shall automatically be
charged and payable at the Default Rate as aforesaid and both before and
after judgment, without the necessity of any action on the part of Agent or
the Required Lenders.
(e) During any time that the Obligations are secured by a mortgage
on real property, then Section 1.6(d) shall not apply in respect of interest
payable on overdue principal and overdue interest and this Section 1.6(e)
shall apply in that regard. Upon a default in the payment of principal due
under this Agreement, Borrower shall pay interest on all principal, both
before and after
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judgment, at a rate per annum equal to the interest rate equal to the
interest rate which would otherwise be applicable to such principal if it
were not in default. Upon a default in the payment of interest due under
this Agreement or any of the other Loan Documents to which Borrower is a
party, Borrower shall pay interest on such overdue interest, both before and
after judgment, at a rate per annum equal to the rate of interest payable
under this Section 1.6(a) on the principal amount to which such overdue
interest relates.
(f) If any provision of this Agreement or any of the other Loan
Documents would oblige Borrower to make any payment of interest or other
amount payable to any Lender in an amount or calculated at a rate which would
be prohibited by law or would result in a receipt by that Lender of interest
at a criminal rate (as such terms are construed under the Criminal Code
(Canada)), then notwithstanding such provision, such amount or rate shall be
deemed to have been adjusted with retroactive effect to the maximum amount or
rate of interest, as the case may be, as would not be so prohibited by law or
so result in a receipt by that Lender of interest at a criminal rate, such
adjustment to be effected, to the extent necessary, as follows:
(1) firstly, by reducing the amount or rate of interest required
to be paid to the affected Lender under this Section 1.6; and
(2) thereafter, by reducing any fees, commissions, premiums and
other amounts required to be paid to the affected Lender which
would constitute interest for purposes of Section 347 of the
Criminal Code (Canada).
Notwithstanding the foregoing and after giving effect to all adjustments
contemplated thereby, if any Lender shall have received an amount in excess
of the maximum permitted by that section of the Criminal Code (Canada), then
Borrower shall be entitled, by notice in writing to the affected Lender, to
obtain reimbursement from that Lender in an amount equal to such excess, and
pending such reimbursement, such amount shall be deemed to be an amount
payable by that Lender to Borrower. Any amount or rate of interest referred
to in this Section 1.6(f) shall be determined in accordance with generally
accepted actuarial practices and principles as an effective annual rate of
interest over the term that any Revolving Credit Advance remains outstanding
on the assumption that any charges, fees or expenses that fall within the
meaning of "interest" (as defined in the Criminal Code (Canada)) shall, if
they relate to a specific period of time, be prorated over that period of
time and otherwise be prorated over the period from the Closing Date to the
Termination Date.
(g) In order to induce Lenders to fund and maintain any BA Rate
Loan at a BA Rate on the terms provided herein, and in consideration of the
entering into by Lenders of funding arrangements from time to time in
contemplation thereof, if any BA Rate Loan is repaid in whole or in part on
any day other than the last day of the Interest Period therefor (whether any
such repayment is made pursuant to any provision of this Agreement or any
other Loan Document or is the result of acceleration, by operation of law or
otherwise), Borrower shall indemnify and hold harmless
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each Lender from and against and in respect of any and all losses, costs and
expenses resulting from, or arising out of or imposed upon or incurred by
such Lender by reason of the liquidation or reemployment of funds acquired or
committed to be acquired by such Lender to fund or maintain such BA Rate Loan
at the BA Rate elected by Borrower, pursuant to such Lender's customary
funding arrangements. Such indemnification shall include any loss (including
loss of margin) or expense arising from the reemployment of funds obtained by
it or from fees payable to terminate deposits from which such funds were
obtained. For the purpose of calculating amounts payable to a Lender under
this subsection, each Lender shall be deemed to have actually funded its
relevant BA Rate Loan through the purchase of a deposit bearing interest at
the BA Rate in an amount equal to the amount of that BA Rate Loan and having
a maturity comparable to the relevant Interest Period; provided, however,
that each Lender may fund each of its BA Rate Loans in any manner it sees
fit, and the foregoing assumption shall be utilized only for the calculation
of amounts payable under this subsection. This covenant shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower with its written
calculation of all amounts payable pursuant to this Section 1.6(g) and such
calculation shall be binding on the parties hereto unless Borrower shall
object in writing within ten (10) Business Days of receipt thereof,
specifying the basis for such objection in detail.
(h) For purposes of disclosure pursuant to the Interest Act
(Canada), the annual rates of interest or fees to which the rates of interest
or fees provided in this Agreement and the other Loan Documents (and stated
herein to be computed on the basis of a 365 day year) are equivalent to the
rates so determined multiplied by the actual number of days in the applicable
calendar year and divided by 365.
1.7 Eligible Accounts and Eligible Inventory. Based on the most recent
Borrowing Base Certificate delivered by Borrower to Agent and on other
information available to Agent, Agent shall, in its reasonable credit
judgement, determine which Accounts of the Loan Parties shall be deemed to be
"Eligible Accounts" and which Inventory of the Loan Parties shall be deemed
to be "Eligible Inventory", for purposes of determining the amounts, if any,
to be advanced under the Revolving Credit Loan. Agent reserves the right at
any time and from time to time after the Closing Date, in the exercise of its
reasonable credit judgment:
(a) to adjust any eligibility criteria set forth in the
definitions of Eligible Account and Eligible Inventory or to
establish new eligibility criteria; and
(b) to establish reserves against Revolving Credit Availability.
1.8 Fees. As compensation for Agent's and Lenders' costs, skills, services
and efforts incurred and expended in making the Revolving Credit Loan
available to Borrower, Borrower agrees to pay to Agent or GE Capital Canada,
as applicable, for its own account certain fees charges and expenses pursuant
to the Fee Agreement, and, to Agent for the account of Lenders the fees set
forth in Annex D.
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1.9 Cash Management System. On or prior to the Closing Date, each Loan
Party will establish and maintain until the Termination Date the cash
management system described in Annex B.
1.10 Receipt of Payments. Borrower shall make each payment under this
Agreement not later than 1:30p.m. (Toronto time) on the day when due in
immediately available funds to the Collection Account. For purposes of
computing interest and Fees and determining the Revolving Credit
Availability:
(a) all payments (including cash sweeps) consisting of cash, wire,
or electronic transfers in immediately available funds shall
be deemed received by Agent upon deposit for value in the
Agent's Collection Account; and
(b) all payments consisting of cheques, drafts, or similar noncash
items shall be deemed received upon receipt for value of good
funds following deposit in the Agent's Collection Account.
Subject to Section 1.14, each payment received by Agent under this Agreement
or any Revolving Credit Note for the account of any Lender shall be paid by
Agent promptly to such Lender, in the same funds received, for application to
the applicable Revolving Credit Loan or other Obligation in respect of which
such payment is made. Receipt for value by Agent for the account of each
Lender shall constitute payment by Borrower to each such Lender of the
amounts so received.
1.11 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each Revolving Credit Advance shall be incurred and made by
Lenders pro rata according to the amounts that their respective
Revolving Credit Commitments represent of the Maximum Revolving
Credit Commitment;
(b) each payment or prepayment of principal of a Revolving Credit
Loan shall be made to Agent for the account of Lenders, pro
rata in accordance with the respective unpaid principal amounts
of such Revolving Credit Loan held by Lenders;
(c) each payment of interest on each Revolving Credit Loan shall be
made to Agent for the account of Lenders pro rata in accordance
with the amounts of interest on such Revolving Credit Loan then
due and payable to Lenders; and
(d) each payment of NonUse Fees and payments of the Termination Fee
shall be made to Agent for the account of Lenders, pro rata
according to the amounts that their respective Revolving Credit
Commitments represent of the Maximum Revolving Credit
Commitment.
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1.12 Application and Allocation of Payments. Subject to Section 8.4, each
Loan Party irrevocably waives the right to direct the application of any and
all payments at any time or times hereafter received by Agent or any Lender
from or on behalf of any Loan Party, and each Loan Party irrevocably agrees
that Agent and Lenders shall have the continuing exclusive right to apply any
and all such payments against the then due and payable Obligations and in
repayment of the Revolving Credit Advances owing by Borrower as Lenders may
deem advisable provided that, the payments required under Section 1.4(c)
shall be applied in the manner described in such Section. In the absence of
a specific determination by all Lenders as to application of payments or
unless otherwise expressly provided herein, the same shall be applied to the
amounts then due and payable in the following order:
(a) Fees, expenses and other Obligations (including Revolving
Credit Advances made by Agent in its capacity as Agent) owing
by Borrower to Agent;
(b) Fees and expenses of Lenders owing by Borrower to Lenders;
(c) interest payments owing by Borrower to Lenders;
(d) Obligations other than Fees, expenses and interest and
principal payments; and
(e) principal payments on the Revolving Credit Loan;
provided that if any such payments are received from or on behalf of any Loan
Party other than Borrower, or if an Event of Default shall occur and be
continuing, such payments shall be applied to the Obligations in such manner
and order as Agent shall determine (or if all Lenders determine otherwise, as
all Lenders so determine). Agent, on behalf of Lenders, is authorized to,
and at its option may, make or cause to be made Revolving Credit Advances by
Lenders on behalf of Borrower for payment of all Fees, expenses, charges,
costs, principal, interest, or other Obligations then due and payable by
Borrower under this Agreement or any of the Loan Documents, even if the
making of such Revolving Credit Advance causes the Revolving Credit Loan to
exceed (1) the Maximum Revolving Credit Commitment or (2) the Borrowing Base,
in which case the terms of Section 1.4(b) shall apply. If Agent or any
Lender receives any payment in USD (the "USD Amount") on account of the
Obligations, the USD Amount shall constitute a repayment of the Obligations
only to the extent of the amount of Canadian Dollars into which the USD
Amount can be converted at the GE Rate in effect at the time of such receipt.
If Agent or any Lender receives any payment in a currency other than Canadian
Dollars or USD on account of the Obligations, Agent is authorized to convert
the payment into Canadian Dollars using the normal procedures of the Agent
then in effect for buying Canadian Dollars and the amount of Canadian Dollars
so purchased shall constitute a repayment of the Obligations only to the
extent of the amount of Canadian Dollars so purchased.
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1.13 NonReceipt of Funds by Agent. Unless Agent shall have been notified
by a Lender or Borrower (in either case, "Payor") one (1) Business Day prior
to the date on which such Payor is to make payment to Agent of (in the case
of a Lender) the proceeds of a Revolving Credit Advance to be made by such
Lender hereunder or (in the case of Borrower) a payment to Agent for account
of Lenders hereunder (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt by Agent, that such
Payor does not intend to make the Required Payment to Agent, Agent may assume
that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available
to the intended recipient(s) (Borrower or Lenders, as applicable) on such
date. If such Payor has not in fact made the Required Payment to Agent, the
recipient(s) of such payment (Borrower or Lenders, as applicable) shall, on
demand, repay to Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date (the
"Advance Date") such amount was so made available by Agent until the date
Agent recovers such amount, at a rate per annum equal to the Prime Rate in
effect from time to time plus 1.00%, and, if such recipient(s) shall fail
promptly to make such payment, Agent shall be entitled to recover such
amount, on demand, from such Payor, together with interest as aforesaid.
Nothing in this Section 1.13 or elsewhere in this Agreement or the other Loan
Documents shall be deemed to require Agent to advance funds on behalf of any
Lender or to relieve any Lender from its obligation to fulfill its Revolving
Credit Commitment hereunder or to prejudice any rights that Borrower may have
against any Lender (including the Agent in its capacity as a Lender) as a
result of any default by such Lender hereunder.
1.14 Sharing of Payments, etc.
(a) Each Loan Party agrees that, in addition to (and without
limitation of) any right of setoff, banker's lien or counterclaim a Lender
may otherwise have, each Lender shall be entitled, at its option (but
subject, as between Lenders, to the provisions of Section 9.11(b)), to setoff
balances held by it for the account of such Loan Party at any of its offices,
in any currency (at the conversion rate at which it would be prepared to sell
such currency in Toronto, Ontario against the currency in which the
obligation is denominated), against any principal of or interest on any of
such Lender's pro rata portion of the Revolving Credit Loan (including any
Revolving Credit Advances deemed made by such Lender under Section 9.12(b))
or any other amount payable to such Lender hereunder, that is not paid when
due (regardless of whether such balances are then due to Borrower), in which
case it shall promptly notify Borrower and Agent thereof; provided, that such
Lender's failure to give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain from any Loan Party payment of any
principal of or interest on the pro rata portion of the Revolving Credit Loan
owing to it or payment of any other amount under this Agreement, any
Revolving Credit Note held by it, or any other Loan Document through the
exercise of any right of setoff, banker's lien or counterclaim or similar
right (other than from Agent as provided herein), and, as a result of such
payment, such Lender shall have received a greater percentage of the
principal of or interest on such Revolving Credit Loan or such other
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amounts then due hereunder or thereunder by such Loan Party to such Lender
than the percentage received by any other Lender, it shall promptly pay to
Agent, for the benefit of Lenders, the amount of such excess and
simultaneously purchase from such other Lenders a participation in (or, if
and to the extent specified by such Lender, direct interests in) the
Revolving Credit Loan or such other amounts, respectively, owing to such
other Lenders (or in interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all Lenders shall share the benefit of such excess
payment (net of any expenses that may be incurred by such Lender in obtaining
or preserving such excess payment) pro rata in accordance with the unpaid
principal of and/or interest on the Revolving Credit Loan or such other
amounts, respectively, owing to each of Lenders. Amounts received by Agent
under this Section 1.14(b) shall be treated as a payment by the Loan Party
under Section 1.12. To such end all Lenders shall make appropriate
adjustments among themselves (by the resale of any participation or
assignment sold or otherwise) if such payment is rescinded or must otherwise
be restored.
(c) Each Loan Party agrees that any Lender so purchasing such a
participation (or direct interest) may exercise, in a manner consistent with
Section 1.14(a), all rights of setoff, banker's lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of the Revolving Credit Loan or other amounts (as the case may
be) owing to such Lender in the amount of such participation. Any Lender
which so exercises any right of setoff shall notify Borrower and Agent of
such exercise; provided, that the failure to do so shall not affect the
validity of such setoff.
(d) Nothing contained herein shall require any Lender to exercise
any right as against any Loan Party as described in this Section 1.14 or
shall affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or
obligation of any Loan Party. If, under any Insolvency Statute, any Lender
receives a secured claim in lieu of a setoff or right as against any Loan
Party to which this Section 1.14 applies, such Lender shall, to the extent
practicable, assign such rights to Agent for the benefit of Lenders and, in
any event, exercise its rights in respect of such secured claim in a manner
consistent with the rights of Lenders entitled under this Section 1.14 to
share in the benefits of any recovery on such secured claim.
1.15 Accounting. Agent will provide to Borrower a monthly accounting of
transactions under the Revolving Credit Loan. Each and every such accounting
shall (absent manifest error) be deemed final, binding and conclusive upon
each Loan Party in all respects as to all matters reflected therein, unless
Borrower, within thirty (30) days after the date of receipt of any such
accounting, shall notify Agent in writing of any objection which Borrower may
have to any such accounting, describing the basis for such objection with
specificity. In that event, only those items (the "disputed items")
expressly objected to in such notice shall be deemed to be disputed by
Borrower. Agent's determination, based upon the facts available, of any
disputed item shall be presumed correct.
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1.16 Indemnity. Each Loan Party shall jointly and severally indemnify and
hold harmless each of Agent, Lenders and their respective Affiliates, and
each such Person's respective officers, directors, employees, legal counsel
(excluding Agent's and each Lender's legal counsel in respect of any suits or
actions instituted or asserted by Agent or any Lender, Affiliate of Agent or
any Lender or any Loan Party against such counsel where, in the case of any
such suits or actions so instituted by any Loan Party, such Loan Party is
successful in such suit or action after all possible appeals have been
exhausted), agents and representatives (each, an "Indemnified Person"), from
and against any and all suits, actions, proceedings, claims, damages, losses,
liabilities and expenses (including attorneys' fees and disbursements and
other costs of investigation or defense, including those incurred upon any
appeal) which may be instituted or asserted against or incurred by any such
Indemnified Person as the result of credit having been extended, suspended or
terminated under this Agreement and the other Loan Documents and the
administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or
failures to act in connection therewith, including any and all environmental
liabilities and legal costs and expenses arising out of or incurred in
connection with disputes between or among any parties to any of the Loan
Documents (collectively, "Indemnified Liabilities"); provided, that no such
Loan Party shall be liable for any indemnification to an Indemnified Person
to the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results solely from that Indemnified Person's gross
negligence or willful misconduct, as finally determined by a court of
competent jurisdiction. No Indemnified Person shall be responsible or liable
to any other party to any Loan Document, any successor, assignee or third
party beneficiary of such person or any other person asserting claims
derivatively through such party, for indirect, punitive, exemplary or
consequential damages which may be alleged as a result of credit having been
extended, suspended or terminated under any Loan Document or as a result of
any other transaction contemplated hereunder or thereunder.
1.17 Access. Each Loan Party shall at such Person's expense:
(a) provide access during normal business hours to Agent and each
Lender and any of their respective officers, employees,
representatives, consultants and agents, as frequently as Agent
or any Lender determines to be appropriate, upon reasonable
advance notice (unless a Default shall have occurred and be
continuing, in which event no notice shall be required and
Agent and each Lender shall have access at any and all times),
to the properties, facilities, advisors and employees
(including officers) of each Loan Party, such access to be made
through the senior management of the Loan Party (unless a
Default shall have occurred and be continuing, in which event
access need not be through such senior management);
(b) permit Agent and each Lender and any of their officers,
employees, representatives, consultants and agents to inspect,
audit and make extracts from all of each Loan Party's records,
files and books of account; and
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(c) permit Agent on behalf of Lenders or any representatives,
consultants or agents of Agent to conduct audits to inspect,
review and evaluate the Collateral, provided, however, so long
as no Default or Event of Default shall have occurred and be
continuing, Agent shall not conduct more than two (2)
Collateral audits in any calendar year at the expense of the
Loan Parties. Each Loan Party shall render to Agent and each
Lender and their representatives, consultants and agents such
clerical and other assistance as may be reasonably requested
with regard thereto. For greater certainty, Agent shall have
the right to perform (or retain an independent auditor to
perform) the collateral audits contemplated hereunder;
alternatively, Agent may request that Borrower retain a
collateral auditor, and upon such request, Borrower shall
deliver to Agent the audit report of such auditor indicating
that, based upon a review by such auditor of the Inventory of
the Loan Parties (including verification as to the value,
location and respective types) and the Accounts of the Loan
Parties (including verification as to amount, aging, indemnity
and credit of the respective account debtors and the billing
practices of the Loan Parties), the information set forth in
the Borrowing Base Certificates relating to the periods
covered by the audit is accurate and complete in all respects.
Representatives of Lenders may attend collateral audits at no
charge to the Loan Parties.
Each Loan Party shall make available to Agent (including its counsel),
as quickly as practicable under the circumstances, originals or copies
(provided that with respect to original documents where possession of the
original is not necessary to protect the interests of the Agent and Lenders
the only obligation of a Loan Party shall be to provide access to the
original document at the premises of the Loan Party or, at the option of the
Agent, Lender or their respective counsel, to deliver a copy of the original
document to the Agent, Lender or counsel) of all books, records, board
minutes, contracts, insurance policies, environmental audits, business plans,
files, financial statements (actual and pro forma), Tax Returns and other
filings with any Governmental Body, and other instruments and documents which
Agent or any Lender may request. Borrower represents and warrants to Agent
and Lenders that as of the Closing Date a duplicate copy of all
electronically recorded data relating to Collateral (by way of computer tapes
or discs) is located at the locations set out in Schedule 1.17.
Borrower shall ensure that a duplicate copy (by way of computer tapes or
discs) of all data electronically recorded after the Closing Date (as updated
weekly) and relating to Collateral is delivered weekly to and maintained at
such location. Each Loan Party shall deliver any document or instrument
reasonably necessary for Agent or any Lender, as it may from time to time
request, to obtain records from any service bureau or other Person which
maintains records for such Loan Party, and shall maintain duplicate records
or supporting documentation on any media, including computer tapes and discs
owned by such Loan Party. Each Loan Party shall instruct the Accountants and
its banking and other financial institutions to make available to Agent and
each Lender such information and records as Agent and each Lender may
reasonably request.
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1.18 Taxes.
(a) Subject to Section 1.18(c), any and all payments by any Loan
Party under this Agreement, the Revolving Credit Notes or any of the other
Loan Documents shall be made, in accordance with this Section 1.18, free and
clear of and without deduction for any and all present or future Taxes,
excluding Taxes imposed on or measured by the net income or capital of Agent
or Lender by the jurisdictions under the laws of which they are organized or
carry on business. If any Loan Party shall be required by law to deduct any
such Taxes from or in respect of any sum payable hereunder, under the
Revolving Credit Notes or under any other Loan Documents,
(1) the sum payable shall be increased as much as shall be necessary
so that after making all required deductions (including
deductions applicable to additional sums payable under this
Section 1.18) Agent or Lenders, as applicable, receive an amount
equal to the sum they would have received had no such deductions
been made,
(2) the applicable Loan Party shall make such deductions, and
(3) the applicable Loan Party shall pay the full amount deducted to
the relevant taxing or other authority in accordance with
applicable law.
Within 30 days after the date of any payment of such Taxes, Borrower shall
furnish to Agent the original or a certified copy of a receipt evidencing
payment thereof.
(b) Borrower shall indemnify and, within ten (10) days of demand
therefor, pay Agent and each Lender for the full amount of such Taxes
(including any Taxes imposed by any jurisdiction on amounts payable under
this Section 1.18) paid by Agent or such Lender, as appropriate, and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes were correctly or legally
asserted.
(c) The Agent and each Lender party hereto on the date hereof
represents and warrants that it is not a nonresident of Canada under the ITA.
If the Agent or a Lender hereunder loses its status as a resident of Canada
for tax purposes, other than due solely to a change in Applicable Laws or the
interpretation or application thereof, so that withholding Taxes become
payable in respect of payments to the Agent or such Lender, Borrower shall
not be required to comply with Section 1.18(a) and shall be entitled to
withhold such Taxes from payments due to the Agent or such Lender in
accordance with Applicable Laws and remit only the balance of such payments
remaining after such withholding to the Agent or such Lender.
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1.19 Additional Costs.
(a) If at any time, any Lender determines, acting reasonably and
with appropriate diligence, that (1) any Regulatory Change, or (2) compliance
by such Lender with any direction, requirement or request from any central
bank or other regulatory authority given after the date of execution hereof,
whether or not having the force of law, has or would have, as a consequence
of such Lender's obligation under this Agreement, and taking into
consideration such Lender's policies with respect to capital adequacy, the
effect of reducing the rate of return on such Lender's capital to a level
below that which such Lender could have achieved under this Agreement but for
such change or compliance, such Lender shall determine the amount of such
additional amounts as will compensate such Lender for such reduction.
(b) If after the date of execution hereof, any introduction of any
Applicable Law or any Regulatory Change or any change in the compliance of
any Lender therewith now or hereafter:
(1) subjects any Lender to, or causes the withdrawal or termination
of a previously granted exemption with respect to, any Tax or
changes the basis of taxation, or increases any existing Tax, on
payments of principal, interest, fees or other amounts payable
by Borrower to such Lender under this Agreement (except for
Taxes imposed on or measured by the net income or capital of
such Lender);
(2) imposes, modifies or deems applicable any reserve, special
deposit, deposit insurance or similar requirement against assets
held by, or deposits in or for the account of or loans by or any
other acquisition of funds by, an office of such Lender, in
connection with Revolving Credit Advances or such Lender's
Revolving Credit Commitment;
(3) imposes or holds applicable on such Lender, or expects there to
be maintained by such Lender any capital adequacy or additional
capital requirement in respect of Revolving Credit Advances or
its Revolving Credit Commitment or any other condition with
respect to this Agreement; or
(4) imposes any Tax on reserves or deemed reserves with respect to
the undrawn portion of its Revolving Credit Commitment;
and the result of any of the foregoing, in the determination of
Lender acting reasonably and with appropriate diligence, shall
be to increase the cost to, or reduce the amount of principal,
interest or other amount received or receivable by such Lender
hereunder or its effective return hereunder in respect of
making, maintaining or funding Revolving Credit Advances
hereunder, such Lender shall, acting reasonably, determine that
amount of money which shall compensate such Lender for such
increase in cost or reduction in income (herein referred to as
"Additional Compensation").
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(c) Upon a Lender having determined that it is entitled to
additional amounts in accordance with the provisions of Section 1.19(a) or to
Additional Compensation in accordance with the provisions of Section 1.19(b),
such Lender shall promptly so notify Agent and shall provide to Agent a
photocopy of the relevant Regulatory Change or Applicable Law (if any, in
either case) and a certificate of a duly authorized officer of such Lender
setting forth the additional amounts or Additional Compensation, as
applicable, and the basis of calculation thereof, which shall be prima facie
evidence of such additional amounts or Additional Compensation, as
applicable. Agent shall promptly notify Borrower and Borrower shall pay to
Agent for the account of such Lender within 10 Business Days of the giving of
such notice such Lender's compensation (that is, additional amounts or
Additional Compensation, as applicable) for such costs as are incurred or
reductions as are suffered as to which such notification relates. Each
Lender shall be entitled to be paid such additional amounts or Additional
Compensation, as applicable, from time to time to the extent that the
provisions of this Section 1.19 are then applicable notwithstanding that such
Lender has previously been paid any additional amounts or Additional
Compensation.
1.20 Currency Matters. Principal, interest, reimbursement obligations,
fees and all other amounts payable under this Agreement and the other Loan
Documents to the Agent and the Lenders shall be payable in Canadian Dollars
except as expressly stated otherwise in the Loan Documents. All
calculations, comparisons, measurements or determinations under this
Agreement shall be made in Canadian Dollars.
1.21 Notices of Revolving Credit Advance, Conversion, Rollover. Agent and
Lenders shall be entitled to rely upon and shall be fully protected under
this Agreement in relying upon any Notice of Revolving Credit Advance, Notice
of Rollover or Notice of Conversion believed by Agent to be genuine and to
assume that the persons executing and delivering the same were duly
authorized unless the responsible individual acting thereon for Agent shall
have actual knowledge to the contrary.
SECTION 2 CONDITIONS PRECEDENT
2.1 Conditions to the Initial Advance. Notwithstanding any other
provision of this Agreement and without affecting in any manner the rights of
Agent or any Lender hereunder, none of the Loan Parties shall have any rights
under this Agreement (but each of the Loan Parties shall have all applicable
obligations hereunder), and Agent and Lenders shall not be obligated to make
any Revolving Credit Advance or to take, fulfil, or perform any other action
hereunder, until the following conditions have been fulfilled to the
satisfaction of Agent (and to the extent specified below, of Lenders):
(a) this Agreement or counterparts thereof shall have been duly
executed by, and delivered to, each Loan Party, Agent and each
Lender; and
(b) Agent shall have received such documents, instruments,
certificates, opinions and agreements as Agent shall request
in connection with the transactions contemplated by this
Agreement and
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the other Loan Documents, including all documents,
instruments, agreements and other materials listed in the
Schedule of Closing Documents attached as Annex C, each in
form and substance satisfactory to Agent, together with
evidence of the completion of all necessary or appropriate
recordings and filings of the foregoing in order to give Agent
first ranking Liens (subject to the other Liens permitted by
Section 6.7) created thereby in the Collateral together with
collateral releases and discharges in form and substance
satisfactory to Agent from all of the existing creditors of
each Loan Party except to the extent such creditors are
permitted to have Liens under Section 6.7;
(c) Agent shall have received evidence satisfactory to Agent that
all Liens upon any of the property of each Loan Party have
been terminated and released except to the extent such Liens
are permitted under Section 6.7;
(d) Agent shall have received evidence satisfactory to Agent that
all Indebtedness and other obligations of the Loan Parties
under the Existing Credit Agreements (as in effect immediately
prior to the Closing Date) will be performed and paid in full
from the proceeds of the initial Revolving Credit Advance and
all Liens upon any of the property (including any cash
collateral) of each Loan Party in favour of the lender
thereunder shall be terminated and released immediately upon
such payment and Agent and to that end, on or prior to the
Closing Date such lender shall have provided discharges in
form and substance satisfactory to Agent providing for the
discharge, release and termination of all such Liens,
termination of the Existing Credit Agreements and
acknowledgment of payment in full of all outstanding
Indebtedness and other obligations under or relating to the
Existing Credit Agreements;
(e) Agent shall have received:
(1) evidence satisfactory to Agent that the Loan Parties have
obtained all required consents, licences, permits, waivers,
approvals and acknowledgments of all Persons, including all
requisite Governmental Approvals, to the execution and delivery
of this Agreement and the other Loan Documents, the consummation
of the transactions contemplated hereby and thereby and the
continued operation by each Loan Party, or
(2) an officer's certificate in form and substance satisfactory to
Agent affirming that no such consents, licences, permits,
waivers, approvals or acknowledgements are required;
(f) Agent shall be satisfied that, as of the Closing Date, each
Loan Party and the transactions contemplated by this Agreement
shall be in compliance in all material respects with all
material
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agreements and all Applicable Laws, and there shall be no
legal impediment to any of Lenders making loans or other
extensions of credit contemplated by this Agreement in any
applicable jurisdiction;
(g) Agent shall have received evidence satisfactory to Agent that
the insurance policies provided for in Section 3.18 and Annex
F are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured
clauses and/or mortgage clauses or endorsements, as
appropriate, in favour of Agent for Agent and Lenders and in
form and substance satisfactory to Agent. All policies of
insurance shall have been issued by insurers acceptable to
Agent and contain provisions to the effect that 30 days' prior
notice will be provided to Agent if any cancellation,
nonrenewal or amendment thereof;
(h) Borrower shall have paid in immediately available funds to
Agent for its account and the account of Lenders, as the case
may be, all Fees required to be paid on the Closing Date and
all fees, costs, and expenses of closing (including reasonable
fees and expenses of consultants and counsel to Agent and any
Lender presented as of the Closing Date);
(i) as of the Closing Date, the Agent shall be satisfied that:
(1) no Restricted Payments shall have been made by Borrower since
September 30, 1996, other than as contemplated by Schedule 3.5;
and
(2) no material adverse change shall have occurred in the results of
operations of any of the Loan Parties on a consolidated basis,
for the period commencing September 30, 1996 and ending on the
Closing Date from the projected results of the Loan Parties'
operations for such period contained in the Projections;
(3) since September 30, 1996 no litigation, action, proceeding,
investigation, audit, regulation or legislation shall have been
instituted, threatened or proposed before any Governmental Body:
(A) which, if successful, would have a Material Adverse
Effect, or
(B) to enjoin, restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of, this
Agreement, or any of the other Loan Documents or the
consummation of the transactions contemplated hereby or
thereby and which, in Agent's sole judgment, would make
it inadvisable to consummate the transactions
contemplated by this Agreement, or any of the other Loan
Documents;
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(j) Agent shall be reasonably satisfied with the corporate,
capital, tax, management compensation, legal and management
structure and cash management systems of each Loan Party, and
shall be satisfied, in its sole judgment, with the nature and
status of all material contractual obligations, senior
management confidentiality, stock repurchase and
noncompetition rights and obligations, securities, labour,
tax, employee benefit, environmental, health and safety
matters, the funding of pension obligations, in each case,
involving or affecting each Loan Party. In connection
therewith, Agent shall have completed, with results reasonably
satisfactory to Agent and Lenders, such business and legal
due diligence of each Loan Party and ICP, CHL, and ICP (USA)
as Agent may require including, without limitation,
satisfactory review by Agent's field examiners or counsel, as
applicable, of each Loan Party's Accounts, assets, Inventory,
financial controls and records, contracts (including, without
limitation, shareholder agreements, licenses and debt and
equity agreements), leases, pension funds, management
compensation and equity incentive programs, management
noncompetition provisions, organizational or governing
documents, environmental compliance, indebtedness, legal and
capital structure, liabilities, tax position and a liquidation
analysis. Agent shall have had reasonable and continuing
access to any material it deems necessary to monitor the loans
to be made hereunder, including access to each Loan Party's
Accountants. Agent shall be satisfied with the structure and
the tax effects of the transactions contemplated by this
Agreement and other Loan Documents and the terms of the Loan
Documents;
(k) as of the Closing Date, Borrower shall have provided to
Lenders copies of any existing environmental reviews and
audits, including any environmental audit requested by Agent
which shall be in form and substance, and by an environmental
engineering firm, satisfactory to Agent, as well as other
information pertaining to actual or potential environmental
claims with respect to each Loan Party;
(l) the Eligible Accounts and the Eligible Inventory supporting
the initial Revolving Credit Advance and the amount of the
reserves to be established on the Closing Date shall, after
giving effect to the initial Revolving Credit Advance and the
consummation of the Related Transactions (on a pro forma basis
after payment of all costs and fees and without deterioration
in trade payables or working capital), be sufficient in value,
as determined by Agent, to provide Revolving Credit
Availability of at least $3,000,000;
(m) Agent shall have received Financials and Projections updated
to 1997;
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(n) on the Closing Date, the total Indebtedness of the Loan
Parties (excluding any Indebtedness owing by Borrower to any
of its Affiliates) less any cash on hand shall not exceed
$40,000,000; Agent shall have received evidence that Borrower
has received from ICP (USA) a minimum of USD998,575.36
(converted to approximately $1,361,572) in cash for certain
export inventory sold to ICP (USA);
(p) Agent shall have received evidence of the receipt by Borrower
of not less than $1,355,000 in payment of an account
receivable owing by ICP;
(q) Borrower's Accountants shall have agreed to provide annually
to Agent a letter in which the Accountants agree to respond to
questions given to them in writing by Agent regarding the
business and financial condition of the Loan Parties based
solely on their audit of the Loan Parties;
(r) Agent shall have received a letter from CH2M Gore& Storrie
Limited confirming that Agent and Lenders shall be entitled to
review and rely upon the certain environmental reports
prepared for Borrower by CH2M Xxxx & Xxxxxxx Limited;
(s) Agent and Lenders shall have the unqualified right to use all
Intellectual Property owned by any Loan Party or by ICP (USA)
(in the case of ICP (USA) such use shall be as provided in the
ICP (USA) Acknowledgement and Consent) in any way associated
with or relating to the Collateral for the purpose of
exercising their rights and remedies under the Collateral
Documents in respect of the Collateral, which rights and
remedies may not be adversely affected by any event,
including, without limitation, the bankruptcy, insolvency or
reorganization of any Loan Party or any Affiliate of any Loan
Party or any other Person;
(t) Xxxxxxx and each Affiliate of any Loan Party to whom any Loan
Party owes any indebtedness (other than for trade credit)
shall have entered into an intercreditor agreement in form and
substance satisfactory to the Agent, which shall include,
without limitation, that the Loan Party's obligations to
Xxxxxxx or to any of the Loan Party's Affiliates (including,
without limitation, the Indebtedness owing by Borrower to
ICP), and Xxxxxxx'x security for the Loan Party's obligations
to Xxxxxxx, are subordinate to the Obligations and the Agent's
and the Lenders' security on the Collateral and that neither
Xxxxxxx nor any such Affiliate shall request, demand, xxx for,
take or receive all or any part of any Indebtedness owing to
Xxxxxxx or any such Affiliate by any Loan Party, Xxxxxxx shall
not exercise any rights of setoff or any of its rights or
remedies in respect of any security for such Indebtedness, and
Xxxxxxx and each such Affiliate of any Loan Party shall waive
all of their rights and remedies at law in respect of such
Indebtedness and
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security until all the Obligations have been irrevocably paid
and discharged in full and the Revolving Credit Facility has
been terminated. Upon the exercise by Agent of any of its
rights and remedies under the Collateral Documents to realize
on Collateral located in the Province of Quebec Xxxxxxx shall
agree to discharge its security on such Collateral so that the
Agent's and the Lenders' realization on the Collateral located
in the Province of Quebec shall not be subject to Xxxxxxx'x
security. The Agent and the Lenders shall agree that the
proceeds of the Collateral remaining after all the Obligations
have been irrevocably paid and discharged in full and the
Revolving Credit Facility has been terminated may be available
to Xxxxxxx. Xxxxxxx and each Affiliate of each Loan Party
shall agree to vote or to abstain from voting, as directed by
the Agent, in any reorganization proceeding involving any Loan
Party. If Xxxxxxx has registered any security on any real
property of any Loan Party, Xxxxxxx shall execute and deliver
to Agent a registrable postponement that incorporates the
foregoing terms of this Section 2.1(t). Xxxxxxx shall agree
that Borrower's Indebtedness to Xxxxxxx and all security
therefor shall be automatically extinguished upon CHL,
Borrower and ICP (USA) ceasing to be under the common control
of ICP;
(u) Agent shall have been provided with details of management
compensation and equity incentive programs of the Loan Parties
and Agent shall be satisfied with the form and substance of
the provisions regarding noncompetition for members of senior
management of the Loan Parties;
(v) the Closing Date shall have occurred on or before December 31,
1996; and
(w) Agent shall have received an operating plan for the Loan
Parties, certified by Borrower's Senior Vice President,
Canadian Operations, in form acceptable to Agent, which shall
include a capital expenditures budget and operating profit and
cash flow projections for each year until the Commitment
Termination Date and for each month in the immediately
following year.
The making of the initial Revolving Credit Advance to Borrower shall
constitute confirmation that the conditions set out in Section 2.1 have been
fulfilled to satisfaction of Agent (and, to the extent specified above, to
satisfaction of Lenders).
2.2 Further Conditions to Each Advance, Rollover and Conversion. It shall
be a further condition to the funding of the initial and each subsequent
Revolving Credit Advance and to each rollover of or conversion to a BA Rate
Loan in accordance with Section 1.2 or Section 1.3, respectively, that the
following statements shall be true on the date of each such funding, advance,
rollover or conversion, as the case may be:
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(a) each Loan Party's representations and warranties contained
herein or in any of the Loan Documents shall be true and
correct on and as of the Closing Date and, subject to Section
5.8, the date on which each such Revolving Credit Advance,
rollover or conversion is made, as though made on or incurred
on and as of such date, except to the extent that any such
representation or warranty expressly relates solely to an
earlier date, in which case such representation and warranty
shall have been true and correct on such date, and except for
changes permitted or contemplated by this Agreement;
(b) no event shall have occurred and be continuing, or would
result from the making of any Revolving Credit Advance,
rollover or conversion, which constitutes a Default or an
Event of Default;
(c) after giving effect to any such Revolving Credit Advance,
rollover or conversion, the Revolving Credit Loan shall not
exceed the Borrowing Base and there shall be no requirement
under Section 1.4(b) to prepay any Revolving Credit Advance;
(d) there shall not have occurred a Material Adverse Effect which
shall not have been cured or waived in writing by Required
Lenders;
(e) Agent shall have received a Notice of Revolving Credit
Advance, Notice of Rollover or Notice of Conversion in
accordance with Section 1.1(c), Section 1.2 or Section 1.3,
respectively.
The request and acceptance or retention on a rollover or conversion by
Borrower of the proceeds of any Revolving Credit Advance shall be deemed to
constitute, as of the date of such request:
(1) a representation and warranty by each Loan Party that the
conditions in this Section 2.2 have been satisfied; and
(2) a reaffirmation by McDonald of the McDonald Guarantee and a
confirmation by each Loan Party of the granting and continuance of
Agent's and Lenders' Liens pursuant to the Collateral Documents.
SECTION 3 REPRESENTATIONS AND WARRANTIES
To induce Agent and Lenders to enter into this Agreement, Borrower makes the
following representations and warranties to Agent and Lenders with respect to
itself and each other Loan Party, and each other Loan Party makes the
following representations and warranties to Agent and Lenders with respect to
itself and each other Loan Party (which representations and warranties shall
be renewed as provided in Section 2.2 until the Termination Date unless
stated therein to be made as of a specific time):
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3.1 Corporate Existence; Compliance with Law. Each Loan Party:
(a) is a corporation duly organized and validly existing under the
laws of the jurisdiction of its incorporation and is duly
qualified to do business under the laws of each jurisdiction
where its ownership or lease of property or the conduct of its
business requires such qualification;
(b) has the requisite corporate power and authority and the legal
right to own, pledge, mortgage or otherwise encumber and
operate its properties, to lease the property it operates
under lease, and to conduct its business as now, heretofore
and proposed to be conducted;
(c) has all Governmental Approvals and has made all filings with,
and has given all notices to, all Governmental Bodies having
jurisdiction, to the extent required for such ownership,
operation and conduct;
(d) is in compliance with its articles or certificate of
incorporation, bylaws and other organizational documents; and
(e) is in compliance in all material respects with all Applicable
Laws, provided, however, each Loan Party is in compliance in
all respects with all Applicable Laws regarding the
withholding, collection, payment and/or deposit, as
applicable, of employees' income, unemployment and health
insurance and other benefits and social security.
3.2 Chief Executive Offices; Collateral Locations; Corporate or Other
Names. The current location of each Loan Party's chief executive office,
principal place of business, other corporate offices, leased premises,
warehouses and other premises within or on which any Collateral is stored or
located, and the locations of all of each Loan Party's records concerning the
Collateral are set forth in Schedule 3.2. Each Loan Party's corporate name
is set forth in Schedule 3.2. Except as set forth in Schedule 3.2, none of
the Loan Parties has been known as or used any corporate, fictitious or trade
name.
3.3 Corporate Power; Authorization; Enforceable Obligations. The
execution, delivery and performance by each Loan Party of this Agreement and
the other Loan Documents to which it is a party and the creation by each Loan
Party of all Liens provided for herein and therein:
(a) are within the applicable Loan Party's corporate power;
(b) have been duly authorized by all necessary corporate and
shareholder action;
(c) are not in contravention of any provision of any Loan Party's
articles or certificate of incorporation or bylaws or other
organizational documents;
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(d) will not violate any Applicable Laws;
(e) will not conflict with or result in the breach or termination
of, constitute a default under or accelerate any performance
required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which any Loan Party is a
party or by which any Loan Party or any of its respective
property is bound;
(f) will not result in the creation or imposition of any Lien upon
any of the property of any Loan Party other than those in
favour of Agent or Lenders, all pursuant to the Loan Documents;
and
(g) do not require the consent or approval of any Governmental Body
or any other Person, except those referred to in Section
2.1(e), all of which will have been duly obtained, made or
complied with prior to the Closing Date and which are in full
force and effect.
Each of the Loan Documents has been duly executed and delivered by each
Loan Party that is a party thereto, and each constitutes a legal, valid and
binding obligation of each such Loan Party, enforceable against each such
Loan Party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally.
3.4 Financial Statements and Projections. Borrower has delivered the
Financials and Projections identified in Schedule 3.4 (which Projections are
attached hereto as Exhibit 3.4), and each of such Financials and Projections
complies with the description thereof contained in Schedule 3.4.
3.5 Material Adverse Change, Restricted Payments. Except as set forth in
Schedule 3.5, from September 30, 1996 through to the Closing Date, none of
the Loan Parties has any material obligations, contingent liabilities, or
liabilities for Charges, longterm leases or unusual forward or longterm
commitments which are not reflected in the audited consolidated December 31,
1995 balance sheet of Borrower. As of the Closing Date, there has been no
material deviation from the Projections delivered under Section 3.4. Except
as set forth in Schedule 3.5, no Restricted Payment has been made by a Loan
Party since September 30, 1996, and no shares of Stock of any Loan Party have
been, or are now required to be, redeemed, retired, purchased or otherwise
acquired for value by any Loan Party. Since September 30, 1996 no event has
occurred which, alone or together with other events, could reasonably be
expected to have or result in a Material Adverse Effect.
3.6 Ownership of Property; Liens. As of the Closing Date, the real estate
listed in Parts 1(a) and 1(b) of Schedule 3.6 constitutes all of the real
property owned or leased by any Loan Party, or used in any Loan Party's
business (the "Real Property"). Except as set out in Parts 1(a) and 1(b) of
Schedule 3.6, each Loan Party owns (a) good and marketable title to all of
the real property
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described in Part 1(a) of Schedule 3.6, (b) legal, valid and binding
leasehold interests in all Leases (either as lessee, sublessee or assignee)
as described in Part 1(b) of Schedule 3.6, and (c) good title to, or valid
leasehold interests in, all of its other properties and assets. None of the
properties and assets of any Loan Party is subject to any Liens, except Liens
permitted by Section 6.7. As of the Closing Date, except as set out in Part
2 of Schedule 3.6, each Loan Party has received all deeds, assignments,
waivers, consents (including landlord waivers and consents and bailee
agreements), nondisturbance and recognition or similar agreements (including
mortgagee agreements), bills of sale and other documents, and duly effected
all recordings, filings and other actions necessary to establish, protect and
perfect its right, title and interest in and to all Real Property and its
other assets or property. Except as set out in Part 3 of Schedule 3.6, none
of the Loan Parties, nor to any Loan Party's knowledge, any other party to
any Lease is in default of its monetary obligations or any other of its
material obligations thereunder or has delivered or received any notice of
default under any such Lease, and no event has occurred which, with the
giving of notice, the passage of time, or both, would constitute any such
default under any such Lease. Except as set out in Part 3 of Schedule 3.6,
none of the Loan Parties owns or holds, or is obligated under or a party to,
any option, right of first refusal or any other contractual right to
purchase, acquire, sell, assign or dispose of any real property. Except as
set out in Part 3 of Schedule 3.6, no portion of the Real Property has
suffered any material damage by fire or other casualty loss which has not
heretofore been completely repaired and restored to its original condition.
All Governmental Approvals required to have been issued or appropriate to
enable the Real Property to be lawfully occupied and used for all of the
purposes for which it is currently occupied and used, have been lawfully
issued and are, as of the Closing Date, in full force and the absence of any
Governmental Approval so required could not have a Material Adverse Effect.
3.7 Restrictions; No Default; Material Contracts. No contract, lease,
agreement or other instrument to which any Loan Party is a party or by which
it or any of its properties or assets are bound or affected and no provision
of any charter, corporate restriction or Applicable Laws has resulted in or
will result in a Material Adverse Effect. None of the Loan Parties is in
default and, to each Loan Party's knowledge, no third party is in default,
under or with respect to any Material Contract. No Default or Event of
Default has occurred and is continuing. Schedule 3.7, as supplemented from
time to time by written disclosures to Agent, sets forth a complete and
accurate list of all Material Contracts. Each Loan Party is in compliance
with:
(a) all licence agreements to which it is a party or bound by;
(b) its obligations to make royalty payments to other Persons;
(c) all Material Contracts; and
(d) the terms and conditions of its insurance coverage and
policies therefor.
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3.8 Labour Matters. Except as set forth in Schedule 3.8, there are no
strikes or other labour disputes against any Loan Party that are pending or,
to any Loan Party's knowledge, threatened. Hours worked by and payment made
to employees of each Loan Party have not been in violation of any Applicable
Laws which would have a Material Adverse Effect. All payments due from any
Loan Party on account of worker's compensation, Canada Pension Plan, Quebec
Pension Plan, employee health plans, social security and employee insurance
of every kind and employee income tax source deductions and vacation pay have
been paid or accrued as a liability on the books of the applicable Loan
Party. Except as set forth in Schedule 3.8, none of the Loan Parties has any
obligation under any collective bargaining agreement, consulting or
management agreement, or any employment agreement requiring payment in excess
of $250,000 in any Fiscal Year, and a correct and complete copy of each
agreement listed on Schedule 3.8 has been provided to Agent. Each Loan Party
is in compliance in all material respects with the terms and conditions of
all such collective bargaining agreements, consulting agreements, management
agreements, employment agreements and other labour agreements. There is no
organizing activity involving any Loan Party pending or, to any Loan Party's
knowledge, threatened by any labour union or group of employees. Except as
set forth in Schedule 3.13, no labour organization or group of employees has
made a pending demand for recognition, and, there are no complaints or
charges against any Loan Party pending or threatened to be filed with any
Governmental Body or arbitrator based on, arising out of, in connection with,
or otherwise relating to the employment or termination of employment by any
Loan Party of any individual.
3.9 Ventures, Subsidiaries and Equity Investments; Outstanding Stock and
Indebtedness. No Loan Party has any Subsidiaries other than those
Subsidiaries set forth on Schedule 3.9 and, except as set forth in Schedule
3.9, none of the Loan Parties is engaged in any joint venture or partnership
with any other Person or has any equity interest in any other Person. None
of the Loan Parties is a party to or is bound by any shareholder agreement.
The Stock of each Loan Party owned by each of the stockholders thereof named
in Schedule 3.9 constitutes all of the issued and outstanding Stock of such
Persons and all such Stock is duly and validly issued, fully paid and
nonassessable. Except as set forth in Schedule 3.9, there are no outstanding
rights to purchase options, warrants or similar rights, agreements or plans
pursuant to which any Loan Party may be required to issue, sell or purchase
any Stock. Schedule 3.9 lists all Indebtedness of each Loan Party as of the
Closing Date (including, in the case of reimbursement obligations incurred by
any of the Loan Parties in respect of letters of credit issued for the
account of any of the Loan Parties, the applicant, the issuer's name, the
amount, the currency, the expiry date and beneficiary (e.g. Inventory
supplier)).
3.10 Taxes. All Tax Returns required to be filed by or on behalf of each
Loan Party have been accurately prepared, duly executed and filed within the
prescribed period. All information provided in such Tax Returns pertaining
to each Loan Party is true, complete and accurate. All Taxes attributable to
each Loan Party that were due and payable have been paid (except Taxes being
contested pursuant to Section 5.2) and adequate provision has been made on
the books of
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each Loan Party in accordance with GAAP for all Taxes payable for the current
or a prior year which are not yet due to the extent that such Loan Party is
aware of the amount of such Taxes. Except as set out in Schedule 3.10, none
of the Loan Parties has received any notice of assessment of additional taxes
or any other claim or notice of any nature whatsoever that any Tax or
additional Tax is due which has not been paid or otherwise finally settled or
satisfied. Except as set out in Schedule 3.10, there are no actions, suits,
proceedings, investigations, audits or claims, threatened or pending in
respect of any Taxes of any Loan Party, nor are there any matters under
discussion with any Governmental Body relating to any Taxes asserted by any
such body. Each Loan Party has withheld from its employees, customers and
any other applicable payees (and timely paid to the appropriate Governmental
Body) the proper and accurate amount of all Taxes and other amounts required
to be withheld or collected and remitted in compliance with all Applicable
Laws. There are no Liens for Taxes on the assets of any Loan Party except
for Liens for Taxes not yet due. None of the Loan Parties have executed or
filed with Revenue Canada or any other Governmental Body any agreement,
waiver or other document extending or having the effect of extending the
period for assessment, reassessment or collection of any Taxes or the filing
of any Tax Returns.
3.11 No Foreign Business. None of the Loan Parties carries on any
business, employs any employees or owns any material assets outside Canada.
3.12 Benefit and Pension Plans. Schedule 3.12 sets forth all Canadian
Benefit Plans and Canadian Pension Plans adopted by each Loan Party. The
Canadian Pension Plans are duly registered under the ITA and all other
Applicable Laws which require registration and no event has occurred which is
reasonably likely to cause the loss of such registered status. All material
obligations of each Loan Party (including fiduciary, funding, investment and
administration obligations) required to be performed in connection with the
Canadian Pension Plans and the funding agreements therefor have been
performed in a timely fashion. There have been no improper withdrawals or
applications of the assets of the Canadian Pension Plans or the Canadian
Benefit Plans. There are no outstanding disputes concerning the assets held
under the funding agreements for the Canadian Pension Plans or the Canadian
Benefit Plans. Each of the Canadian Pension Plans is fully funded both on an
ongoing basis and on a solvency basis (using actuarial methods and
assumptions which are consistent with the valuations last filed with the
applicable Governmental Bodies and which are consistent with generally
accepted actuarial principles). No promises of benefit improvements under
the Canadian Pension Plans or the Canadian Benefit Plans have been made
except where such improvement could not have a Material Adverse Effect and in
any event no such improvements will result in a solvency deficiency or going
concern unfunded liability in the affected Canadian Pension Plans. All
contributions or premiums required to be made or paid by each Loan Party to
the Canadian Pension Plans or the Canadian Benefit Plans have been made or
paid in a timely fashion in accordance with the terms of such plans and all
Applicable Laws. All employee contributions to the Canadian Pension Plans or
the Canadian Benefit Plans by way of authorized payroll deduction or
otherwise have been properly withheld or collected by each Loan Party and
fully paid into such plans in a timely manner. The pension fund under each
Canadian Pension Plan is exempt from the payment of any income tax and there
are no
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taxes, penalties or interest owing in respect of any such pension fund. All
material reports and disclosures relating to the Canadian Pension Plans
required by such plans and any Applicable Laws to be filed or distributed
have been filed or distributed in a timely manner. None of the Loan Parties
is a party to, employs any employees who are participants in, or has taken
any action which may have the effect of acknowledging, accepting or creating
any liability whatsoever under or in respect of, any employee benefit plan
which is governed by ERISA. None of the Loan Parties is subject to any Lien
in favour of the PBGC or any other Person in connection with any liability
under or in connection with ERISA. All payments and contributions of any
nature or kind required to be made by any Loan Party in connection with the
Canadian Pension Plans are fully reflected in the Projections.
3.13 No Litigation. Except as set forth in Schedule 3.13, no litigation,
action, claim or proceeding is now pending or, to the knowledge of any Loan
Party, threatened against any Loan Party, at law, in equity or otherwise,
before any Governmental Body:
(a) which challenges any such Person's right, power, or competence
to enter into or perform any of its obligations under the Loan
Documents, or the validity or enforceability of any Loan
Document or any action taken thereunder; or
(b) which if determined adversely, could have or result in a
Material Adverse Effect.
To the knowledge of each Loan Party, there does not exist a state of facts
which is reasonably likely to give rise to such proceedings.
3.14 Brokers. No broker or finder acting on behalf of any Loan Party brought
about the obtaining, making or closing of the credit extended pursuant to
this Agreement or the transactions contemplated by the Loan Documents or the
transactions contemplated thereby and no Loan Party has any obligation to any
Person in respect of any finder's or brokerage fees in connection therewith.
3.15 Intellectual Property.
(a) Except as set out in Schedule 3.15, each Loan Party owns or is
licensed to use all Intellectual Property necessary to continue to conduct
its business as heretofore conducted by it, now conducted by it and proposed
to be conducted by it. Each of such Intellectual Properties that each Loan
Party actually uses to conduct its business, now conducted by it or proposed
to be conducted by it, is listed (by type of property; for example,
trademark, tradename, industrial design, computer software or right to use
the same, and if none of the Loan Parties owns the trademark, tradename,
industrial design, computer software or other type of property and owns the
right to use the same (for example, by way of licence), the owner of the
applicable Intellectual Property is listed), together with applicable
Canadian and United States application or registration numbers, as
applicable, in Schedule 3.15, which Schedule may be amended without
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the consent of Agent to include any changes permitted by Section 5.14. All
Intellectual Property owned by each Loan Party, and each applicable
registration thereof, is valid, subsisting and enforceable. Except as set
out in Schedule 3.15, each Loan Party conducts business without infringement
or claim of infringement of any Intellectual Property of others. To each
Loan Party's knowledge, except as set out in Schedule 3.15, there is no
infringement or claim of infringement by others of any Intellectual Property
used by any Loan Party. Each Loan Party's use of Intellectual Property does
not contravene any Applicable Law. Set out on Schedule 3.15 is a complete
list of all Licence Agreements to which each Loan Party is a party. Except
as set forth on Schedule 3.15, all Licence Agreements are in full force and
effect unamended. There have not been any material defaults under or any
breaches of any of the Licence Agreements; provided that, there has not been
any default under or any breach of any of the Licence Agreements where such
default or breach could have a Material Adverse Effect. Except as set forth
on Schedule 3.15, none of the Licence Agreements under which any Loan Party
obtains rights or an option to acquire rights to use any Intellectual
Property contains any restriction on that Loan Party's ability to assign or
to encumber its rights or option to acquire rights to use such Intellectual
Property or is terminable upon the occurrence of any of the events described
under Sections 8.1(g), 8.1(h) or 8.1(i). Agent and Lenders have the
unqualified right to use all Intellectual Property owned by any Loan Party or
by ICP (USA) (in the case of ICP (USA) such use shall be as provided in the
ICP (USA) Acknowledgement and Consent) in any way associated with or relating
to the Collateral for the purpose of exercising their rights and remedies
under the Collateral Documents in respect of the Collateral which rights and
remedies may not be adversely affected by any event, including, without
limitation, the bankruptcy, insolvency or reorganization of any Loan Party or
any Affiliate of any Loan Party or any other Person.
(b) Borrower is the sole legal and beneficial owner of and has
good title or the licence to use all of the computer software (other than
operating systems software) running on Borrower's IBM AS/400, Model E35
computer systems (the "AS/400 Software"), free and clear of all Liens
whatsoever. No royalty or other fee is required to be paid by Borrower to
any other Person in respect of the use of any of the AS/400 Software.
Borrower has the right to use all of the AS/400 Software and has not granted
any licence or other rights to any other Person in respect of the AS/400
Software. There are no restrictions on the ability of Borrower or any
successor to or assignee from Borrower to use and exploit all rights of
Borrower in the AS/400 Software. The use of the AS/400 Software does not
infringe, and Borrower has not received any notice, complaint, threat or
claim (1) that any AS/400 Software may infringe on any rights owned, held or
claimed by any other Person; or (2) that there is pending or threatened any
claim or litigation against Borrower contesting the right of Borrower to use
any such AS/400 Software. No other Person has any right to disclosure or use
of any proprietary technology or rights of Borrower relating to the AS/400
Software, present or future.
3.16 Full Disclosure. No information contained in this Agreement, the
other Loan Documents, the Financials or any written statement furnished by or
on behalf of any Loan Party or any
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Affiliate thereof pursuant to the terms of this Agreement or any other Loan
Document, which has previously been delivered to Agent or any Lender,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made. With
respect to all business plans and other forecasts and projections (including
the Projections) furnished by or on behalf of any Loan Party and made
available to Agent or any Lender relating to the financial condition,
operations, business, properties or prospects of such Loan Party:
(a) all material facts stated as such therein are true and
complete in all respects;
(b) all material facts upon which the forecasts or projections
therein contained are based are true and complete in all
respects and no material fact was omitted therefrom;
(c) all material assumptions made on that basis are reasonable
under the circumstances and are disclosed therein; and
(d) the forecasts or projections are reasonably based on those
facts and assumptions.
With respect to any such business plans, forecasts or projections made
available to Agent or any Lender after the Closing Date, the foregoing
clauses (a) through (d) shall be true and correct in all respects as of the
date of such business plans, projections or forecasts.
3.17 Environmental Matters. Except as disclosed in Schedule 3.17:
(a) all Facilities and the Undertaking have been, and continue to
be, owned, leased, managed, controlled or operated, and have
been and are now in compliance with all Environmental Laws;
(b) each Loan Party has obtained all Governmental Approvals which
are required under Environmental Laws in respect of the
Facilities and the Undertaking. The Undertaking has been
conducted in compliance with all such Governmental Approvals
and all such Governmental Approvals are valid and in full
force and effect;
(c) none of the Loan Parties has received any notice, or is aware
of any proposal, to amend, revoke or replace any Governmental
Approval under Environmental Laws, or requiring the issue of
any such additional Governmental Approval in respect of the
Facilities or the Undertaking;
(d) each Loan Party and, to each Loan Party's actual knowledge
(without conducting any due diligence or other investigation)
their respective predecessors in title, have carried on or are
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carrying on, as the case may be, the Undertaking in a manner
which would permit the issue, maintenance, renewal or reissue
of all Governmental Approvals required under the Environmental
Laws in respect of the Facilities and the Undertaking;
(e) no notice, citation, summons or order has been issued, no
complaint has been filed, no administrative or legal
proceedings have been instituted and no penalty has been
assessed and no environmental investigation or review is
pending or threatened by any Governmental Body with respect to
any alleged:
(1) violation by any Loan Party of any Environmental Law with respect
to the Facilities or the Undertaking, or
(2) failure by any Loan Party to have any Governmental Approval which
any of them is required to have under Environmental Laws in
respect of the Facilities or the Undertaking, or
(3) violation of or failure by any Loan Party to comply with any
Governmental Approval which any of them is required to have under
Environmental Laws in respect of the Facilities or the
Undertaking;
(f) none of the Loan Parties nor, to each Loan Party's actual
knowledge (without conducting any due diligence or other
investigation), none of their respective predecessor's in
title, is or has been on notice of, or subject to, a claim,
administrative order or other demand either to take
decontamination or restoration or other action under any
Environmental Laws, or to reimburse any Person who has taken
such action, in connection with a Facility or other property
or is or has been the object of any stop order, control order,
directive, order, programme approval, certificate or
depollution programme relating to an Environmental Activity or
any other environmental matter which mandates any work,
repairs, construction, modifications, capital expenditures or
any preparation of contingency plans binding upon any Loan
Party;
(g) none of the Loan Parties nor, to each Loan Party's actual
knowledge (without conducting any due diligence or other
investigation), any of their respective predecessors in title,
has, contrary to any Environmental Laws, used, generated,
treated, stored, recycled, reused or Discharged any
Contaminant in, on, under, or from any property now or
previously owned, operated, leased or occupied by any Loan
Party or any of their respective predecessors in title or on
any adjoining premises;
(h) each Loan Party and, to each Loan Party's actual knowledge
(without conducting any due diligence or other investigation),
their respective predecessors in title, has reported promptly
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to appropriate Governmental Bodies the occurrence of any
Environmental Activity or any other event where required to do
so by Environmental Laws in respect of any of the Facilities
and the Undertaking;
(i) there are no environmental Liens or registrations under any
Environmental Laws on any Facility and no actions have been
taken which could subject any Facility to such environmental
Liens or registrations;
(j) there is no fact, condition or circumstance relating to the
Facilities or the Undertaking that could result in any
liability under any Environmental Laws;
(k) none of the Loan Parties has any liability or contingent
liability under any Environmental Laws in connection with the
Facilities or the Undertaking (whether or not such contingent
liability is required under GAAP to be reflected in the
financial statements of any Loan Party or any Subsidiary);
(l) there are no unauthorized locations in Canada and the United
States to which Contaminants have been shipped or disposed of
by any Loan Party;
(m) all facilities and all transporters and handlers engaged by
any Loan Party to transport or dispose of any Contaminants
had, at the time of shipment or disposal, all required
Governmental Approvals; and
(n) Borrower has provided to Agent copies of all environmental
reports, reviews and audits prepared within the past five
years and all reasonably available and current information
pertaining to actual or potential environmental liabilities,
in each case, relating to each Loan Party.
3.18 Insurance Policies. Schedule 3.18 lists all insurance of any nature
maintained for current occurrences by each Loan Party, as well as a summary
of the terms of such insurance. Such insurance complies with the standards
set forth in Annex F.
3.19 Bank Accounts and Lock Boxes. Schedule 3.19 lists all banks and other
financial institutions at which each Loan Party maintains deposits and/or
other accounts and lock boxes, including the Disbursement Accounts, the
Blocked Accounts and the Lock Boxes, and such Schedule correctly identifies
the name, address and telephone number of each such financial institution,
the name in which the account is held, a description of the purpose of the
account, and the complete account number. None of the Loan Parties maintains
any post office or other type of lock box.
3.20 Solvency. Each Loan Party is solvent and will not become insolvent
after giving effect to the transactions contemplated by this Agreement and
the other Loan Documents. Each Loan Party, after giving effect to the
transactions contemplated by this Agreement and the other Loan
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Documents, will have an adequate amount of capital to conduct its business
until the Commitment Termination Date.
3.21 Inventory. All Inventory purchased by each Loan Party is purchased
free and clear of any and all adverse claims other than unpaid suppliers'
rights to repossess goods under Section 81.1 of the Bankruptcy and Insolvency
Act (Canada) and such suppliers' substantially similar rights under the Civil
Code of Quebec.
3.22 Corporate Structure. Borrower is a wholly owned Subsidiary of ICP and
McDonald is a wholly owned Subsidiary of Borrower. Borrower has no
Subsidiaries other than McDonald. McDonald has no Subsidiaries.
3.23 Government Contracts. The aggregate amount of the Accounts of all
Loan Parties that are subject to the Financial Administration Act (Canada) or
any other similar Applicable Law does not exceed $150,000 in any Fiscal Year.
3.24 Customer and Trade Relations. As of the Closing Date, there exists no
actual or threatened termination or cancellation of, or any material adverse
modification or change in:
(a) the business relationship of any Loan Party with any customer
or group of customers whose purchases during the preceding
twelve (12) months caused them to be ranked among the ten
largest customers of any Loan Party; or
(b) the business relationship of any Loan Party with any supplier
material to its operations.
Except as set out in Schedule 3.24, none of the Loan Parties purchases
Inventory from any Affiliate of any Loan Party other than from another Loan
Party.
3.25 Agreements and Other Documents. As of the Closing Date, each Loan
Party has provided to Agent or its counsel accurate and complete copies of
all of the following agreements or documents to which it or any of its
properties is subject and each of which is listed on Schedule 3.25:
(a) supply agreements and purchase agreements not terminable by any
Loan Party within sixty (60) days following written notice
issued by such Loan Party and involving transactions in excess
of $50,000 per annum;
(b) any lease of Equipment requiring aggregate rental and other
payments in excess of $50,000 per annum;
(c) all material licenses and permits held by any Loan Party
necessary for the conduct of each Loan Party's business;
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(d) instruments (including guarantees) or documents evidencing
Indebtedness of any Loan Party or Affiliate Corporation and any
security interest granted by any Loan Party with respect
thereto;
(e) all licence agreements and collective agreements and other
material agreements to which any Affiliate Corporation is a
party or any of their property is bound;
(f) any lease of Real Property; and
(g) instruments and agreements relating to equity securities,
rights, options, or warrants of any Loan Party.
3.26 ICP Indebtedness. As of the Closing Date, Borrower has delivered to
Agent a complete and correct copy of all documents evidencing or delivered in
connection with the ICP Indebtedness and there is no other Indebtedness of
any Loan Party to any Affiliate of any Loan Party other than trade credit
permitted under Section 6.4. Borrower has the corporate power and authority
to incur the ICP Indebtedness. All Obligations, including the Obligations to
pay principal of and interest on the Revolving Credit Loan, rank in all
respects in priority to the ICP Indebtedness as provided in the ICP
Postponement and Subordination Agreement. Each Loan Party acknowledges that
Agent and each Lender are entering into this Agreement and are extending the
Revolving Credit Commitments in reliance upon the provisions of the ICP
Postponement and Subordination Agreement.
3.27 Xxxxxxx Indebtedness. As of the Closing Date, Borrower has delivered
to Agent a complete and correct copy of all documents evidencing or delivered
in connection with the Xxxxxxx Indebtedness. Borrower has the corporate
power and authority to incur the Xxxxxxx Indebtedness. All Obligations,
including the Obligations to pay principal of and interest on the Revolving
Credit Loan, rank in all respects in priority to the Xxxxxxx Indebtedness as
provided in the Xxxxxxx Postponement, Subordination and Assignment Agreement.
Each Loan Party acknowledges that Agent and each Lender are entering into
this Agreement and are extending the Revolving Credit Commitments in reliance
upon the provisions of the Xxxxxxx Postponement, Subordination and Assignment
Agreement.
3.28 Collateral.
(a) The Liens granted to Agent, on behalf of Agent and Lenders,
pursuant to the Collateral Documents will be, at the Closing Date, fully
perfected first priority Liens in and to the Collateral described therein,
subject only to any Liens permitted by Section 6.7.
(b) As of the Closing Date, each Loan Party has used reasonable
commercial efforts to deliver or cause to be delivered to Agent a landlord
waiver and consent or bailee agreement, as applicable, each in form and
substance acceptable to Agent, duly executed by each lessor of each leased
property of each Loan Party on which Collateral is located on the Closing
Date or each processor, customer, agent, warehouseman or consignee on whose
property Collateral is located on the
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Closing Date, as applicable. Each Loan Party has delivered to Agent on or
before the Closing Date all landlord waivers and consents and landlord
consents and acknowledgements (in any form) received by any Loan Party from
any landlord of such Loan Party.
SECTION 4 FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices. Each Loan Party covenants and agrees that from
and after the Closing Date and until the Termination Date, it shall deliver
to Agent, in sufficient numbers for Agent and each Lender, the applicable
financial statements, projections and notices at the times and in the manner
set forth in Annex E.
4.2 Communication with Accountants. Each Loan Party authorizes Agent to
communicate directly with its Accountants and authorizes or will arrange for
authorization for those Accountants to make available to Agent any and all
financial statements and other supporting financial documents and schedules,
including copies of any management letter with respect to its business,
financial condition and other affairs. At or before the Closing Date and
annually thereafter, the Loan Parties shall deliver to Agent a letter from
the Accountants (the "Accountant's Letter"), addressed to Agent and Lenders,
in which the Accountants agree to respond to questions given to them in
writing by Agent regarding the business and financial condition of the Loan
Parties based solely on their audit of the Loan Parties. After the Closing
Date, if any Loan Party engages the services of accountants other than the
Accountants, such Loan Party shall deliver to Agent from such accountants and
a letter addressed to Agent and Lenders containing the same terms and
provisions as the Accountant's Letter.
SECTION 5 AFFIRMATIVE COVENANTS
Each Loan Party jointly and severally covenants and agrees that, unless Agent
shall otherwise consent in writing with the agreement of the Required
Lenders, from and after the date hereof and until the Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each Loan Party
shall:
(a) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its
rights and franchises;
(b) continue to conduct its business substantially as now
conducted or as otherwise permitted hereunder;
(c) at all times maintain, preserve and protect all of its
Intellectual Property, and keep, maintain and preserve its
Equipment, fixtures and all the remainder of its property, in
use or useful in the conduct of its business and keep the same
in good repair, working order and condition (taking into
consideration ordinary wear and tear) and from time to time
make, or cause to be made, all
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necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices, so
that the business carried on in connection therewith may be
properly and advantageously conducted at all times; and
(d) not change its legal name or transact business under
additional business style names in addition to those set forth
in Schedule 3.2 unless Agent is given notice at least 30 days
prior to any change in its legal name or the transaction of
business under any such business style name.
5.2 Payment of Obligations, Charges and Claims. Each Loan Party shall pay
and discharge in accordance with the terms thereof,
(a) all of its Indebtedness, Obligations and obligations
represented by rental or lease payments payable in respect of
any location at which Collateral is located at any time or in
respect of any computer software of hardware rented or leased
by any Loan Party at any time, in each case, as and when due
and payable;
(b) all Charges imposed upon it or its income and profits, or
any of its property (real, personal or mixed); and
(c) all lawful claims for labour, materials, supplies and
services or otherwise, which if unpaid might by law become a
Lien on its property;
provided, that none of the Loan Parties shall be required to pay any such
Charge or claim which is being contested in good faith by proper legal
actions or proceedings, so long as at the time of commencement of any such
action or proceeding and during the pendency thereof:
(1) no Default or Event of Default shall have occurred and be
continuing,
(2) adequate reserves with respect thereto are established and are
maintained in accordance with GAAP,
(3) such contest operates to suspend collection of the contested
Charges or claims and is maintained and prosecuted continuously
with diligence,
(4) none of the Collateral would be subject to forfeiture or loss or
any Lien by reason of the institution or prosecution of such
contest,
(5) no Lien, except for Permitted Encumbrances, shall exist, be
imposed or be attempted to be imposed for such Charges or claims
during such action or proceeding unless the full amount of such
Charge or claim is covered by insurance satisfactory in all
respects to Agent, and
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(6) Agent has not advised Borrower in writing that Agent reasonably
believes that nonpayment or nondischarge thereof could have or
result in a Material Adverse Effect.
The applicable Loan Party shall promptly pay or discharge such
contested Charges and all additional charges, interest, penalties and
expenses, if any, and shall deliver to Agent evidence acceptable to Agent of
such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to that Loan Party or the conditions set forth in this
Section 5.2 are no longer satisfied.
5.3 Books and Records. Each Loan Party shall keep adequate records and
books of account with respect to its business activities, in which proper
entries, reflecting all financial transactions, are made in accordance with
GAAP and on a basis consistent with the Financials.
5.4 Litigation. Each Loan Party shall notify Agent in writing, promptly
upon learning thereof, of any litigation, action, claim or proceeding being
commenced or threatened against any Loan Party at law, in equity or otherwise
and of the institution against any such Person of any litigation, action,
claim or proceeding which:
(a) may involve an amount in excess of $100,000, or the Equivalent
Amount thereof, individually or in the aggregate;
(b) if determined adversely, could have or result in a Material
Adverse Effect;
(c) seeks injunctive relief;
(d) alleges any criminal misconduct on the part of any Loan Party;
or
(e) challenges any Loan Party's right, power or competence to
enter into or perform any of its obligations under the Loan
Documents, or the validity or enforceability of any Loan
Document or any action taken thereunder.
5.5 Insurance, Damage to or Destruction of Collateral.
(a) Each Loan Parties shall, at its sole cost and expense, maintain
the policies of insurance in such amounts and as otherwise described in Annex
F in form and with insurers recognized as adequate by Agent. If any Loan
Party at any time or times hereafter shall fail to obtain or maintain any of
the policies of insurance required above or to pay all premiums relating
thereto, Agent may at any time or times thereafter obtain and maintain such
policies of insurance and pay such premiums and take any other action with
respect thereto which Agent deems advisable. Agent shall have no obligation
to obtain insurance for any Loan Party or pay any premiums therefor. By
doing so, Agent shall not be deemed to have waived any Default or Event of
Default arising from any Loan Party's failure to maintain such insurance or
pay any premiums therefor. All
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sums so disbursed, including attorneys' fees, court costs and other charges
related thereto, shall be payable on demand by Borrower to Agent and shall be
additional Obligations hereunder secured by the Collateral.
(b) Agent reserves the right at any time, upon review of any Loan
Party's risk profile (including any change in the product mix maintained by
any Loan Party or any laws affecting the potential liability of such Loan
Party), to require additional forms and limits of insurance to, in Agent's
opinion, adequately protect both Agent's and Lender's interests in all or any
portion of the Collateral and to ensure that each Loan Party is protected by
insurance in amounts and with coverage customary for its industry. If
requested by Agent, each Loan Party shall deliver to Agent from time to time
a report of a reputable insurance broker, satisfactory to Agent, with respect
to its insurance policies.
(c) Each Loan Party shall deliver to Agent, in form and substance
satisfactory to Agent, endorsements to all of its (1) "All Risk" and business
interruption insurance naming Agent, on behalf of itself and Lenders, as loss
payee, and (2) general liability and other liability policies naming Agent,
on behalf of itself and Lenders, as additional insured. Each Loan Party
irrevocably makes, constitutes and appoints Agent (and all officers,
employees or agents designated by Agent), so long as any Default or Event of
Default shall have occurred and be continuing or the anticipated insurance
proceeds exceed $250,000, as such Loan Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims
under such "All Risk" policies of insurance, endorsing the name of such Loan
Party on any cheque or other item of payment for the proceeds of such "All
Risk" policies of insurance and for making all determinations and decisions
with respect to such "All Risk" policies of insurance. Agent shall have no
duty to exercise any rights or powers granted to it pursuant to the foregoing
power of attorney. Borrower shall promptly notify Agent of any loss, damage,
or destruction to the Collateral in the amount of $100,000 or more, whether
or not covered by insurance. Each Loan Party agrees that it will not settle
or adjust any claim under such "All Risk" policies of insurance where the
anticipated insurance proceeds exceed $500,000 without the prior written
consent of Agent. Agent is hereby authorized to directly collect all
insurance proceeds relating to the Collateral, so long as any Default or
Event of Default shall have occurred and be continuing or the anticipated
insurance proceeds exceed $500,000. After deducting from such proceeds the
reasonable expenses, if any, incurred by Agent in the collection or handling
thereof, Agent may, at its option, apply such proceeds to the reduction of
the Obligations in accordance
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with Section 1.12, or permit the relevant Loan Party to use such money, or
any part thereof, to replace, repair, restore or rebuild the Collateral in a
diligent and expeditious manner with materials and workmanship of
substantially the same quality as existed before the loss, damage or
destruction. So long as no Default or Event of Default shall have occurred
and be continuing, if the casualty giving rise to such insurance proceeds
would not reasonably be expected to have a Material Adverse Effect or such
insurance proceeds do not exceed $500,000 in the aggregate, Agent shall
permit each Loan Party to replace, restore, repair or rebuild the property;
provided that if the relevant Loan Party has not completed or entered into
binding agreements to complete such replacement, restoration, repair or
rebuilding within 180 days of such casualty, Agent may apply such insurance
proceeds to the Obligations in accordance with Section 1.12. All insurance
proceeds which are to be made available to a Loan Party to replace, repair,
restore or rebuild the Collateral shall be applied by Agent to reduce the
outstanding principal balance of the Revolving Credit Loan (which application
shall not result in a permanent reduction of the Revolving Loan Commitment)
and upon such application, Agent shall establish a reserve against the
Borrowing Base in an amount equal to the amount of such proceeds so applied.
Thereafter, such funds shall be made available to Borrower to provide funds
to replace, repair, restore or rebuild the Collateral as follows: (A)
Borrower shall request a Revolving Loan Advance in the amount requested to be
released; (B) so long as the conditions set forth in Section 2.2 have been
met, Lenders shall make such Revolving Loan Advance; and (C) the reserve
established with respect to such insurance proceeds shall be reduced by the
amount of such Revolving Loan Advance. To the extent not used to replace,
repair, restore or rebuild the Collateral, such insurance proceeds shall be
applied in accordance with Section 1.12.
(d) Each Loan Party shall, promptly upon such Loan Party learning
of the institution of any proceeding for the expropriation or other taking of
any Collateral, notify Agent of the pendency of such proceeding, and agrees
that Agent may participate in any such proceeding and such Loan Party from
time to time will deliver to Agent all instruments reasonably requested by
Agent to permit such participation. Agent shall (and is hereby authorized
to) collect any and all awards, payments or other proceeds of any such
expropriation or taking. If all amounts collected are less than $250,000 and
no Default or Event of Default has occurred and is continuing, the applicable
Loan Party shall be entitled to use such amounts, within 180 days of receipt
by the Agent, to replace, such expropriated or taken Collateral as provided
in Section 5.5(g). Otherwise, Agent may apply such amounts to the reduction
of the Obligations in the manner set forth in Section 1.12 or, at Agent's
option in its sole discretion, permit the applicable Loan Party to use such
amounts, or any part thereof, to replace, such Collateral as provided in
Section 5.5(g).
(e) If, notwithstanding the provisions hereof which require that
Agent be the sole loss payee with respect to the Collateral, a cheque or
other instrument from an insurer is made payable to any Loan Party solely or
jointly with Agent, Agent may endorse such Person's name thereon and take
such other action as Agent may elect to obtain the proceeds thereof. After
deducting from such proceeds the reasonable expenses, if any, incurred by
Agent in the collection or handling thereof, Agent may apply such proceeds to
the reduction of the Obligations in the manner set forth in Section 1.12.
If, notwithstanding that all proceeds of insurance in respect of any
Collateral shall be payable to Agent, any Loan Party receives any proceeds of
insurance in respect of any
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Collateral in respect of the policies required to be maintained under this
Agreement, such proceeds shall be held in trust by that Loan Party for Agent
and, unless Agent otherwise permits,
such proceeds shall be forthwith deposited in accordance with the cash
management system described in Annex B.
(f) Subject to the terms and conditions hereof (including Section
2.2), after application of the proceeds of any loss or taking of any
Collateral to the reduction of the Obligations pursuant to Section 5.5(e)
Borrower may borrow Revolving Credit Advances for the purpose of replacing,
repairing or restoring any Collateral subject to such loss or taking in
accordance with Section 5.5(g).
(g) Any Collateral which is to be replaced, repaired or restored
pursuant to this Section 5.5 shall be replaced, repaired or restored pursuant
to such terms and conditions as Agent may require and with materials and
workmanship of substantially as good a quality as existed before such loss or
taking, and each Loan Party shall commence such replacement, repair or
restoration as soon as practicable and proceed diligently with it until
completion to Agent's satisfaction. Borrower shall provide to Agent written
progress reports, other information and evidence of compliance with the
foregoing.
(h) Before or contemporaneously with the amendment,
supplementation or other modification of any Loan Party's insurance coverage
under which Agent is to be named as a loss payee under the terms of this
Agreement, Borrower agrees to deliver to Agent:
(1) an Assignment of Monies Payable Under Insurance Policies duly
executed by the applicable Loan Party;
(2) a duly executed confirmation of the applicable insurer
confirming the receipt of the transfer and assignment and
authorization provided for in such Assignment of Monies Payable
Under Insurance Policies and the duly executed agreement of the
applicable insurer to pay all proceeds of insurance in
accordance with the same; and
(3) a legal opinion of counsel acceptable to Agent in form and
substance acceptable to Agent as to the Assignment of Monies
Payable Under Insurance Policies being enforceable against the
applicable Loan Party.
5.6 Compliance with Laws. Each Loan Party shall comply in all material
respects with all Applicable Laws; provided that, each Loan Party shall
comply in all respects with all Applicable Laws regarding the withholding,
collection, payment and deposit of employee's income, unemployment and health
insurance or other benefits and social security.
5.7 Agreements. Each Loan Party shall perform and comply with, within all
required time periods in all material respects, all of its obligations and
enforce all of its rights under each agreement, contract, instrument or other
document to which it is a party, including any Material Contracts, leases,
licences and customer contracts to which it is a party provided that, each
Loan Party shall perform and comply with, within all required time periods,
all of its obligations and enforce all of its rights thereunder where the
failure to so perform and enforce could have or result in a Material Adverse
Effect. Each Loan Party shall take such actions or omit to take such actions
so as not to cause a breach of the representations and warranties hereunder
and under the other Loan Documents.
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5.8 Supplemental Disclosure. On the request of Agent or upon becoming
aware of an event that causes a Material Adverse Effect or a Default or an
Event of Default, and in any event not less frequently than once each Fiscal
Quarter, Borrower will supplement (or cause to be supplemented) each Schedule
hereto, or representation herein or in any other Loan Document with respect
to any matter hereafter arising which, if existing or occurring at the date
of this Agreement or at the time the representations and warranties are
renewed as provided in Section 2.2, would have been required to be set forth
or described in such Schedule or as an exception to such representation or
which is necessary to correct any information in such Schedule or
representation which has been rendered inaccurate by such matter; provided,
that with respect to the requirement to provide supplements once each Fiscal
Quarter, such Schedule, representation or warranty shall not be deemed to be
inaccurate pending delivery of such supplements and provided further (a) no
such supplement to any such Schedule or representation shall be or be deemed
a waiver by Agent or Lenders of any Default or Event of Default resulting
from the matters disclosed in such supplement except as consented to in
writing by Agent (with the consent of the Required Lenders) and (b) no
supplement shall be required as to representations and warranties that relate
solely to the Closing Date. Each Loan Party shall, if so requested by Agent,
furnish to Agent and Lenders as often as they reasonably request, statements
and schedules further identifying and describing the Collateral and such
other reports in connection with the Collateral as Agent may reasonably
request, all in reasonable detail, and each Loan Party shall advise Agent and
Lenders promptly, in reasonable detail, of:
(1) any Lien, other than as permitted pursuant to Section 6.7,
attaching to or asserted against any of the Collateral;
(2) any material change in the composition of the Collateral; and
(3) the occurrence of any other event which would have a Material
Adverse Effect upon the Collateral and/or Agent's and/or
Lenders' Lien thereon.
Any supplement or other information provided hereunder which combines
existing information with new information or deleted information shall be
presented in such a manner that the new information or deleted information is
identifiable.
5.9 Environmental Matters.
(a) Each Loan Party:
(1) shall be at all times in compliance with all Environmental
Laws; and
(2) shall similarly ensure that the Facilities and the Undertaking
are in compliance with all Environmental Laws and that no
Contaminants are, contrary to any Environmental Laws,
Discharged, generated, used, stored, transported or otherwise
dealt with.
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(b) Borrower shall deliver to Agent promptly following the
completion thereof a copy of any environmental assessments or audits that it
or any other Loan Party conducts or has conducted by a third party. If Agent
requests, in its reasonable discretion, in connection with Agent's monitoring
and the protection of the Collateral, an Environmental Assessment, Borrower
shall, upon the request of Agent, provide to Agent an Environmental
Assessment concerning any Facility or element of the Undertaking, which
Environmental Assessment must prove satisfactory to Agent, acting reasonably.
If Borrower does not initiate such Environmental Assessment within 30 days of
Agent's request and diligently proceed with such Environmental Assessment
thereafter, Agent may, but is not required to, retain an independent,
qualified engineer or environmental consultant to conduct the Environmental
Assessment. Each Loan Party shall grant full and complete access to the
Facilities, including, but not limited to, the right to enter upon,
investigate, and collect air, surface water, groundwater, and soil samples,
provided, that such entry, investigation and sampling shall not unduly
interfere with the normal business and operations of such Loan Party. All
costs of such an Environmental Assessment will be paid by Borrower upon
demand.
(c) Borrower shall promptly, and in any event within five Business
Days of the receipt by Borrower, notify Agent of any written notice or
communication received by any Loan Party of the following:
(1) any report to a Governmental Body pursuant to any applicable
Environmental Laws or Governmental Approvals of any
Environmental Activity relating to the Facilities or the
Undertaking, made by or known to any Loan Party;
(2) any notification to any Loan Party by a Governmental Body to
the effect that:
(A) it intends to cancel, suspend or refuse to renew a
Governmental Approval relating to Environmental Laws or
has so cancelled, suspended or refused to renew the same,
(B) it intends to impose or has imposed terms, provisions,
conditions or limitations in a Governmental Approval
relating to Environmental Laws,
(C) it has imposed or intends to impose any order,
requirement, directive, program approval or certificate
relating to Environmental Laws which mandates any work,
repairs, construction, standby equipment, modifications
or capital expenditure,
(D) it has imposed or intends to impose any stop order or
control order under an Environmental Law relating to any
Loan Party, or
(E) a Loan Party may be liable, in whole or in part, for any
remedial action, including decontamination or restoration
work;
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(3) any investigation, inquiry, search (whether effected pursuant
to a search order, search warrant or powers conferred by
statute), characterization work, sampling, excavation or
drilling by a Governmental Body relating to any Environmental
Activity or other environmental matter concerning any Loan
Party, but not including routine and periodic inspections or
site visits by members of a Governmental Body dealing with
pollution abatement;
(4) any administrative or judicial complaint or order filed against
any Loan Party alleging violation of any Environmental Laws or
Governmental Approval;
(5) any injunction, prosecution, action, charge or proceeding,
whether before a court or a regulatory body, dealing with
Environmental Laws;
(6) any request or order by a Governmental Body that any Loan Party
perform any evaluation, assessment, characterization work,
study or test relating to any Environmental Activity;
(7) any change in Governmental Approvals issued to any Loan Party
applicable to the generation, transportation, storage or
disposal by such Loan Party of Contaminants; and
(8) any process, investigation or order which could result in
liability to any Loan Party for any cleanup or remedial action,
including decontamination or restoration work, associated with
any Environmental Activity relating to any Facility or the
Undertaking or for any damages resulting from such
Environmental Activity.
(d) Borrower shall, upon receiving a written request therefor from
Agent, within 20 days of delivering to Agent a notice mentioned in Section
5.9(c), deliver to Agent a written estimate, prepared by an independent
environmental consulting firm and in form and substance satisfactory to
Agent, of the cost of the action, works or measures required pursuant to an
Environmental Law and mentioned in such notice.
(e)Borrower shall promptly, and in any event within 10 days, forward to Agent
a copy of any Government Approval or application obtained or filed by any
Loan Party under any Environmental Laws to the extent that failure to hold or
apply for the same could have a Material Adverse Effect.
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5.10 Canadian Benefit and Pension Plans.
(a) For each existing Canadian Pension Plan set forth in Schedule
3.12, each Loan Party shall:
(1) use its best efforts to ensure that such plan retains its
registered status under and is administered in a timely manner
in all respects in accordance with the applicable pension plan
text, funding agreement, the ITA and all other Applicable
Laws; and
(2) cause all reports and disclosures relating to such plan that
are required by such plan or any Applicable Laws to be filed
or distributed are filed or distributed in a timely manner.
(b) For each Canadian Pension Plan hereafter adopted by any Loan
Party which is required to be registered under the ITA or any other
Applicable Laws, that Loan Party shall:
(1) use its best efforts to seek and receive confirmation in
writing from the applicable Governmental Bodies to the effect
that such plan is unconditionally registered under the ITA or
such other Applicable Laws;
(2) from and after the adoption of any Canadian Pension Plan, use
its best efforts to ensure such plan retains its registered
status under and is administered in all respects in accordance
with the applicable pension plan text, funding agreement, the
ITA and all other Applicable Laws; and
(3) cause all reports and disclosures relating to such plan that
are required by such plan or any Applicable Laws to be filed
or distributed are filed or distributed in a timely manner.
(c) For each existing Canadian Pension Plan and Canadian Benefit
Plan set forth in Schedule 3.12 or hereafter adopted, each Loan Party shall
in a timely fashion:
(1) perform all obligations (including fiduciary, funding,
investment and administration obligations) required to be
performed in connection with such plan and the funding media
therefor;
(2) make all contributions and pay all premiums required to be
made or paid by that Loan Party to such plan in accordance
with the terms of such plan and all Applicable Laws;
(3) withhold by way of authorized payroll deductions or otherwise
collect and pay into such plan all employee contributions
required to be withheld or collected by that Loan Party in
accordance with the terms of such plan and all Applicable
Laws; and
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(4) ensure that such plan is fully funded both on an ongoing basis
and on a solvency basis using actuarial methods and
assumptions which are consistent with the valuations last
filed with the applicable Governmental Bodies and which are
consistent with generally accepted actuarial principles.
(d) Borrower shall deliver to Agent:
(1) promptly after the filing thereof by any Loan Party with any
applicable Governmental Body, copies of each annual and other
return, report or valuation with respect to each Canadian
Pension Plan;
(2) promptly after receipt thereof, a copy of any direction,
order, notice, ruling or opinion that any Loan Party may
receive from any applicable Governmental Body with respect to
any Canadian Pension Plan; and
(3) notification within 30 days of any increases in the benefits
of any existing Canadian Pension Plan or Canadian Benefit
Plan, or the establishment of any new Canadian Pension Plan or
Canadian Benefit Plan, or the commencement of contributions to
any such plan to which any Loan Party was not previously
contributing.
(e) Without limiting Section 5.10(d) above, Borrower shall cause
any actuarial valuation required by Applicable Law with respect to any of the
Canadian Pension Plans as of any specified date to be completed, filed with
the applicable Government Body and delivered to the Agent all within 100 days
of such specified date.
5.11 Landlord's, Warehouseman/Bailee and Mortgagee Agreements. Each Loan
Party shall, unless otherwise agreed to by Agent in writing, use reasonable
commercial efforts to obtain or cause to be obtained a landlord agreement or
warehouseman/bailee agreement, each in form and substance acceptable to Agent
with the lessor of each present or future leased premises of that Loan Party
or the warehouseman or bailee of each present or future warehouse or other
location at which any Collateral is located at any time, as applicable.
After the Closing Date, if within 10 Business Days following notification
from Borrower to Agent that a Loan Party proposes to keep, maintain or store
Collateral at any new location (that is, a location at which Collateral is
not kept, maintained or stored as of the Closing Date), Agent requests a
landlord waiver and consent or a bailee agreement, as applicable, Borrower
shall use reasonable commercial efforts to deliver
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to Agent such landlord waiver and consent or bailee agreement requested in
form and substance satisfactory to Agent before any Collateral is kept,
maintained or stored at any such location. For greater certainty, with
respect to each location at which Inventory of any Loan Party is located, if
Borrower is unable to deliver to Agent a landlord waiver and consent or a
bailee agreement, as applicable, under which Agent is granted access to the
Collateral located at such location and containing a waiver of all rights of
distraint against such Collateral and otherwise in form and substance
satisfactory to Agent, acting reasonably, Eligible Inventory at that location
may be subject to a reserve determined by Agent in the exercise of its
reasonable credit judgment for purposes of calculating Revolving Credit
Availability. The reserve provided for in the immediately preceding sentence
shall not exceed (a) the aggregate amount of arrears of rent payable (if any)
in respect of all locations at which Collateral is located plus (b) Agent's
reasonable estimate of the aggregate amount of rent that would be payable
during the period that Agent reasonably estimates could be necessary to
permit Agent and Lenders to exercise their rights and remedies in respect of
Collateral located at any and/or all locations, including sales of Collateral
at such locations or removal of Collateral from such locations to other
locations and storage and eventual sales of Collateral at such other
locations; plus (c) in all cases, all costs and expenses ancillary thereto.
5.12 Certain Obligations Respecting Subsidiaries. Borrower shall take such
action from time to time as shall be necessary to ensure that McDonald is a
direct wholly-owned Subsidiary of Borrower and is owned directly only by
Borrower.
5.13 Report to Other Creditors; Letters of Credit and Foreign Exchange
Contracts. Borrower shall provide to Agent copies of any statement or report
provided to any other party by any Loan Party pursuant to the terms of each
contract or agreement relating to Indebtedness of any Loan Party and not
otherwise required to be provided to Agent pursuant to this Agreement
promptly following the provision to such other party. Borrower shall deliver
to Agent concurrently with the application by any Loan Party for a letter of
credit a copy of such application and concurrently with the entry by any Loan
Party into a foreign exchange contract a copy of such foreign exchange
contract.
5.14 Intellectual Property. If before the Termination Date, any Loan Party
shall:
(a) obtain rights to any new Intellectual Property; or
(b) become entitled to the benefit of any Intellectual Property,
Borrower shall give to Agent prompt written notice thereof.
In addition, each Loan Party shall:
(1) prosecute diligently each Intellectual Property registration
application pending as of the Closing Date or thereafter until
the Termination Date, as is appropriate in its best interests;
(2) make applications to register its Intellectual Property, as is
appropriate in its best interests;
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(3) use its best efforts to preserve and maintain all rights in
its Intellectual Property, as is appropriate in its best
interests, and to ensure that Agent and Lenders have the
unqualified right to use all Intellectual Property in any way
associated with or relating to the Collateral for the purpose
of exercising their rights and remedies in respect of the
Collateral which rights and remedies may not be adversely
affected by any event, including without limitation the
bankruptcy, insolvency or reorganization of any Loan Party or
any Affiliate of any Loan Party or any other Person;
(4) Borrower shall duly comply with all requirements of any
Governmental Body applicable to any Intellectual Property
owned or used by Borrower and with all covenants, terms or
conditions upon which any such Intellectual Property is owned
or used; and
(5) Borrower shall notify Agent in writing:
(A) forthwith of the failure of any licensee or other
Person to pay or perform any obligations due to
Borrower in respect of any Intellectual Property owned
or licensed by Borrower;
(B) forthwith of any proceedings before any court,
administrative board or other tribunal which could
materially adversely affect Borrower or any
Intellectual Property and of any action or proceeding
that may affect Borrower's rights in the Intellectual
Property and of each allegation that the Intellectual
Property infringes upon or violates the rights of any
Person; and
(C) at least thirty (30) days prior to any change of name
of Borrower, any transfer or license of the
Intellectual Property or any part thereof or any
change in the location of the Intellectual Property or
any part thereof.
Each Loan Party shall, and Borrower shall instruct the solicitor or agent
prosecuting or filing any Intellectual Property applications of a Loan Party
to, take all necessary steps to perfect Agent's security in the Intellectual
Property that is the subject of such applications and to deliver to Agent as
soon as practically possible a legal opinion from counsel, in form and
substance satisfactory to Agent, stating that Agent's security is enforceable
and duly perfected. With respect to each Loan Party's options to acquire
rights or rights to use any Intellectual Property acquired after the Closing
Date, Borrower shall deliver to Agent a copy of each Licence Agreement
evidencing such options or rights, as applicable, (other than any Licence
Agreement relating solely to non-customized commercial software that is
available for sale to the general public and such Licence Agreement is the
owner's standard pre-printed agreement used for selling such software to the
general public) and an agreement duly executed by each owner and (in the case
of rights sublicensed to each Loan Party) each licensor of such Intellectual
Property, in form and substance satisfactory to Agent, together with a legal
opinion relating to such security from counsel, and
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in form and substance, satisfactory to Agent. None of the Loan Parties shall
abandon any right to file or register any Intellectual Property material to
its business without the consent of Agent. At any time after the occurrence
and during the continuance of an Event of Default, Agent shall have the
right, but shall in no way be obligated, to bring suit in its own name, on
its behalf and on behalf of Lenders, to enforce all Intellectual Property of
each Loan Party and, if Agent shall determine that it shall commence any such
suit, each Loan Party shall do any and all lawful acts and execute any and
all proper documents required by Agent in aid of such enforcement and
Borrower hereby indemnifies Agent and Lenders and shall, promptly, upon
demand from Agent, reimburse Agent for all costs and expenses incurred by
Agent in the exercise of its rights under this Section 5.14.
5.15 Bank Act Security. If at any time, any Lender is a bank to which the
Bank Act (Canada) applies, each Loan Party shall, upon any request from Agent
on behalf of such Lender, execute and deliver to Agent on behalf of such
Lender security under Section 427 of the said Act including, without
limitation, a notice of intention to give security, a promise to give
security and an assignment, containing terms substantially similar to the
existing Collateral Documents charging or creating a security interest in
Inventory of such Loan Party and, otherwise in form and substance
satisfactory to Agent, together with a legal opinion and report, from a
Person or Persons acceptable to Agent, with respect to the execution,
delivery and enforceability of such documentation and its proper
registration, all in form and substance satisfactory to Agent.
5.16 New Locations. Borrower shall advise Agent in writing not less than
30 days before any Loan Party:
(a) changes the location of its chief executive office or
principal places of business or the location of its records or
acquiring any new such locations from those listed in Schedule
3.2; or
(b) keeps, maintains or stores Inventory at any location other
than the locations listed in Schedule 3.2;
provided, in each case, that any such new location must be within Canada.
Before changing any such location or acquiring another such location (whether
by purchase, lease or otherwise), the applicable Loan Party shall provide
Agent and Lenders with such financing statements, charges, assignments,
hypothecs, security interests, other Loan Documents, landlord agreements,
warehouseman/bailee agreements and agreements (as contemplated under Section
5.11) and legal opinions as Agent may reasonably require in order to assure
and maintain a first priority, perfected Lien on the Collateral, subject only
to Liens permitted by Section 6.7, and to assure access thereto.
5.17 Leased and Other Locations of Collateral that are Not Owned. Each
Loan Party shall timely and fully pay their respective monetary obligations
and otherwise perform their respective
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material obligations under all leases and other agreements with respect to
each leased location or public warehouse or other location that is not owned
by such Loan Party where any Collateral may be located. Borrower shall
promptly deliver to Agent copies of:
(a) each default notice received under or with respect to any such
leased location or public warehouse or other location; and
(b) such other notices or documents as Agent may request in its
reasonable discretion.
5.18 Security. Each Loan Party shall defend the Lien granted pursuant to
the Loan Documents against claims and demands of all Persons whomsoever.
Each Loan Party shall maintain the Collateral so as not to be commingled with
the assets of any other Person thereby becoming indistinguishable from that
of another Person (other than another Loan Party). Each Loan Party will
advise Agent in writing of any material change to Collateral or acquisition
of Collateral out of the ordinary course within one (1) Business Day of such
change or acquisition. Upon the request of Agent, Borrower will furnish to
Agent statements and schedules further identifying and describing Collateral.
Prior to any Loan Party purchasing any Inventory from any Affiliate (other
than another Loan Party), Borrower shall use reasonable commercial efforts to
deliver to Agent a Supplier Waiver and Assignment duly executed by that
Affiliate, together with a legal opinion of counsel, and in form and
substance, acceptable to Agent as to such Supplier Waiver and Assignment
being duly authorized, executed and delivered by that Affiliate.
5.19 Inventory Reporting and Tracking. Each Loan Party shall at all times
maintain a perpetual inventory system which is updated on a daily basis,
keeping correct and accurate records itemizing and describing the kind, type,
quality and quantity of Inventory and of Eligible Inventory, its cost
therefor and daily withdrawals therefrom and additions thereto, all of which
records shall be available during the Loan Party's usual business hours at
the request of any of the Agent's officers, employees or agents.
5.20 MOEE Search Results. Within 90 days after the Closing Date, Borrower
shall provide to Agent in writing the results of a review of the records of
the Ministry of Energy and Environment pertaining to the Facilities and the
Undertaking.
SECTION 6 NEGATIVE COVENANTS
Each Loan Party jointly and severally covenants and agrees that,
without the prior written consent of Agent and the Required Lenders, from and
after the date hereof and until the Termination Date:
6.1 Mergers, Subsidiaries, Etc. No Loan Party shall, directly or
indirectly, by operation of law or otherwise, amalgamate or merge with,
consolidate with, acquire all or substantially all of the
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assets or shares of, or otherwise combine with, any Person or form or acquire
any Subsidiary.
6.2 Investments. No Loan Party shall, directly or indirectly, make,
maintain any Investment except:
(a) as otherwise permitted by Sections 6.3, 6.4 or 6.6;
(b) Investments outstanding on the date hereof and listed in
Schedule 6.2, but not any additional Investment therein;
(c) Cash Equivalents acquired, made or renewed only when there
are no Obligations in respect of Revolving Credit Loans
against which amounts deposited to the Collection Accounts
can be applied; and
(d) demand deposit accounts maintained in the ordinary course of
business and in accordance with Annex B and in which the
aggregate amount on deposit in all such accounts does not at
any time exceed the amount referred to in Section 6.24.
6.3 Indebtedness. No Loan Party shall create, incur, assume or permit to
exist any Indebtedness, except:
(a) the Obligations;
(b) deferred Taxes as shown on the Financials;
(c) Capital Lease Obligations and Purchase-Money Indebtedness
permitted under clause (d) of Section 6.7;
(d) the ICP Indebtedness and any accrued but unpaid interest
thereon;
(e) the Xxxxxxx Indebtedness and any accrued but unpaid interest
thereon;
(f) other Indebtedness set forth in Schedule 3.9, but not any
increase in the amount of any thereof, and any amendment,
refinancing or refunding of any thereof shall be on terms no
less favourable than the terms in existence on the Closing
Date (as determined by Agent) to any Loan Party, the Agent or
any Lender; and
(g) trade credit incurred by Borrower in favour of ICP (USA) in
accordance with Section 6.4.
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6.4 Affiliate and Employee Loans and Transactions. None of the Loan
Parties shall, directly or indirectly, enter into, assume or permit to exist
any lending, borrowing or other commercial transaction with any of its
Affiliates (other than another Loan Party) or employees, including payment of
any management, consulting, servicing, advisory or similar fee, unless such
transaction or series of related transactions is in accordance with
Applicable Law (including financial assistance restrictions thereunder) and
provided that:
(a) if such transaction or series of related transactions is with
any Affiliate of a Loan Party,
(1) such transaction or series of related transactions is
permitted by Section 6.15; or
(2) such transaction or series of related transactions is
on terms set out in writing that are no less
favourable to the applicable Loan Party than those
that could be obtained in a comparable arm's length
transaction with an entity that is not an Affiliate of
such Loan Party and, if such transaction or series of
related transactions, other than transactions
involving trade accounts incurred in the normal course
of business, involves aggregate payments in excess of
$250,000, or the Equivalent Amount, Borrower has
provided to Agent the documentation evidencing such
transaction or series of related transactions; and
(b) if such transaction or series of related transactions is with
any employee of any Loan Party,
(1) such transaction or series of related transactions is
permitted by Section 6.15; or
(2) such transaction or series of related transactions
consists of loans to such employee that are evidenced
in writing and are made on an arm's length basis in
the ordinary course of business for travel expenses
and relocation expenses up to $50,000, or the
Equivalent Amount, for any single employee and
$500,000, or the Equivalent Amount, in the aggregate
for all such employees of all Loan Parties at any one
time outstanding.
6.5 Capital Structure and Business. Except as permitted under Section
5.1, no Loan Party shall:
(a) make any changes in its business objectives, purposes, or
operations which could in any way adversely affect the
repayment of the Obligations or have or result in a Material
Adverse Effect;
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(b) make any change in its capital structure as described in
Schedule 3.9 (including the issuance or recapitalization of
any shares of Stock or other securities convertible into Stock
or any revision of the terms of its outstanding Stock) other
than the issuance of additional stock by McDonald to Borrower
which shall be subject to the Borrower Pledge Agreement;
(c) amend its articles of incorporation, or other constating
documents; or
(d) engage in any business other than the business currently
engaged in by such Person.
6.6 Guaranteed Indebtedness. No Loan Party shall create, incur, assume or
permit to exist any Guaranteed Indebtedness except:
(a) by endorsement of instruments or items of payment for deposit
to the general account of such Person;
(b) the Obligations; and
(c) the Xxxxxxx Indebtedness.
6.7 Liens. No Loan Party shall create or permit to exist any Lien on any
of its properties or assets except for:
(a) presently existing or hereafter created Liens in favour of
Agent or Lenders to secure the Obligations;
(b) Liens set forth in Schedule 6.7 existing on the Closing Date,
but not any increase in the amount secured by any such Liens;
(c) Permitted Encumbrances;
(d) Liens created after the Closing Date by conditional sale or
other title retention agreements (including Capital Leases) in
connection with Purchase-Money Indebtedness with respect to
Equipment acquired by any Loan Party in the ordinary course of
business to secure (and not to exceed) the purchase price of
such Equipment or to secure Indebtedness or Capital Lease
Obligations incurred solely for the purpose of financing the
acquisition of such Equipment, in a maximum aggregate amount
outstanding not to exceed:
(1) $500,000 outstanding at any time,
(2) $250,000 incurred in any Fiscal Year, and
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(3) $250,000 per obligation without the prior written
approval of the Agent;
and so long as such Equipment is not a component, part or
accessory installed on, or an accession, addition or
attachment to, any other Equipment or other property (other
than computer hardware components) of any Loan Party on which
a Lien exists in favour of Agent or Lenders; and
(e) the Xxxxxxx Xxxx.
6.8 Sale of Assets. No Loan Party shall sell, transfer, convey, assign or
otherwise dispose of any of its assets or properties, including any
Collateral; provided, that the foregoing shall not prohibit:
(a) the sale of Inventory in the ordinary course of business;
(b) the sale or disposition of any assets which have become
obsolete or surplus to the business of any Loan Party where
the Net Proceeds thereof are less than or equal to $250,000 in
the aggregate for any Fiscal Year; and
(c) the sale of all of the issued and outstanding shares of
McDonald or all or substantially all of its assets, provided
in each case the Net Proceeds thereof are, upon receipt by the
relevant Loan Party paid to Agent in repayment of the then
outstanding Obligations.
6.9 Material Contracts. No Loan Party shall cancel or terminate any
Material Contract or amend or otherwise modify any Material Contract, or
waive any default or breach under any Material Contract, or take any other
action in connection with any Material Contract that would have a Material
Adverse Effect.
6.10 ERISA. No Loan Party shall carry on any business, employ any
employees or own any assets outside Canada. No Loan Party shall become a
party to, employ any employees who are or who may become participants in, or
take any action which may have the effect of acknowledging, accepting or
creating any liability whatsoever under or in respect of, any employee
benefit plan which is governed by ERISA. No Loan Party shall create, assume
or incur, or suffer to be created, assumed or incurred or to exist, any Lien
in favour of the PBGC or any other Person in connection with any liability
under or in connection with ERISA.
6.11 Canadian Benefit and Pension Plans. No Loan Party shall, directly or
indirectly:
(a) terminate or cause to terminate, in whole or in part, or
initiate the termination of, in whole or in part, any Canadian
Pension Plan so as to result in any liability to any Loan
Party which could have a Material Adverse Effect;
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(b) permit to exist any event or condition in respect of any
Canadian Pension Plan which presents the risk of liability to
any Loan Party which could have a Material Adverse Effect;
(c) enter into any new Canadian Pension Plan or Canadian Benefit
Plan or modify any such existing plans so as to increase its
obligations thereunder which could result in any liability to
any Loan Party and which could have a Material Adverse Effect;
(d) permit the greater of the going concern unfunded liability and
the solvency deficiency under each Canadian Pension Plan, but
only to the extent they are permitted to remain unfunded under
Applicable Laws, to exceed, in the aggregate, taking into
account all Canadian Pension Plans of all Loan Parties,
$300,000;
(e) fail to make minimum required contributions to amortize any
funding deficiencies under a Canadian Pension Plan within the
time period set out in Applicable Laws;
(f) fail to make a required contribution under any Canadian
Pension Plan or Canadian Benefit Plan which could result in
the imposition of a Lien upon the assets of any Loan Party
within 30 days after the date such payment becomes due, unless
such payment is being contested pursuant to Section 5.2;
(g) make any improper withdrawals or applications of assets of a
Canadian Pension Plan or Canadian Benefit Plan;
(h) accept payment of any amount from any Canadian Pension Plan;
or
(i) merge any Canadian Pension Plan with any other pension plan.
6.12 Financial Covenants. Borrower shall not breach or fail to comply with
any of the financial covenants set forth in Annex G, each of which shall be
calculated in accordance with GAAP consistently applied (and based upon the
financial statements delivered hereunder).
6.13 Sale-Leasebacks, Etc. No Loan Party shall engage in any sale-
leaseback, synthetic lease or similar transaction involving any of its
property or assets.
6.14 Cancellation of Indebtedness. No Loan Party shall cancel any claim or
Indebtedness owing to it, except for reasonable consideration negotiated on
an arm's length basis and in the ordinary course of its business, or directly
or indirectly, voluntarily prepay, redeem, defease or repurchase any
principal of, interest on or other amount payable in respect of Indebtedness
(other than the Obligations).
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6.15 Restricted Payments. No Loan Party shall make any Restricted Payment
to any Person, other than (a) Restricted Payments to Affiliates who are
individuals and serve as directors, officers or employees of any Loan Party
consisting of reasonable compensation or indemnification of such Affiliates
in the ordinary course and consistent with past practice and Applicable Laws;
(b) so long as no Default or Event of Default has occurred and is continuing
and after receipt by Agent of the audited consolidated financial statements
of Borrower referred to in Annex E for a Fiscal Year of Borrower, Restricted
Payments by Borrower to ICP not exceeding 50% of the Net Income of Borrower
for such Fiscal Year based on such audited financial statements, excluding
from the calculation of Net Income extraordinary noncash income,
extraordinary noncash losses and current tax expense to the extent of any
retained earnings adjustment; (c) payments by Borrower to Xxxxxxx on account
of the Xxxxxxx Indebtedness to the extent permitted by the Xxxxxxx
Postponement, Subordination and Assignment Agreement; and (d) payments by any
Loan Party on account of any other Indebtedness (not mentioned above) of that
Loan Party to the extent permitted under Section 6.3.
6.16 Leases.
(a) No Loan Party shall enter into any Lease after the date of
this Agreement if after entering into such Lease the aggregate
of all payments by all Loan Parties in any Fiscal Year would
exceed $100,000 under all such Leases to which one or more
Loan Parties is a party or has an obligation.
(b) No Loan Party shall enter into any operating lease after the
date of this Agreement for equipment or personal property if
after entering into any such lease the aggregate of all
payments by all Loan Parties in any Fiscal Year would exceed
$100,000 under all such leases to which one or more Loan
Parties is a party or has an obligation.
6.17 Lock Boxes and Bank Accounts. None of the Loan Parties shall maintain
any lock boxes, deposit, operating or other bank accounts except for those
accounts identified in Schedule 3.19.
6.18 No Speculative Transactions. No Loan Party shall engage in any
speculative transaction, including, without limitation any speculative
transaction involving commodity options, futures contracts or interest rate
or currency hedging.
6.19 Limitation on Negative Pledge Clauses, Etc. No Loan Party shall,
directly or indirectly, enter into any agreement with any Person which
prohibits or limits the ability of any Loan Party to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, other than the agreements with Agent
or Lenders pursuant to a Loan Document and other than Lien restrictions in a
Capital Lease or other purchase-money financing arrangement permitted
hereunder relating to the asset financed thereunder. No Loan Party shall
enter into, after the date of this Agreement, any indenture, agreement,
instrument or other arrangement that, directly or indirectly, prohibits or
restrains, or
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has the effect of prohibiting or restraining, or imposes adverse conditions
upon, the incurrence or payment of Indebtedness, the granting of Liens, the
declaration or payment of dividends or other Restricted Payments, the making
of loans, advances or Investments or the sale, assignment, transfer or other
disposition of any property or assets.
6.20 Sale of Stock. No Loan Party shall sell (whether in a public or
private offering or otherwise) any of its Stock other than the sale by
McDonald of its stock to Borrower which Stock shall be subject to the
Borrower Pledge Agreement.
6.21 Accounting Changes. No Loan Party shall make any significant change
in accounting treatment and reporting practices except for changes concurred
in by their Accountants.
6.22 Fiscal Year. No Loan Party shall change its Fiscal Year from December
31 in each year.
6.23 Changes Relating to ICP Indebtedness and Xxxxxxx Indebtedness. No
Loan Party shall change or amend the terms of the ICP Indebtedness or the
Xxxxxxx Indebtedness (or any indenture or agreement in connection therewith)
if the effect of such amendment is to:
(a) increase the interest rate on any of the ICP Indebtedness or
the Xxxxxxx Indebtedness;
(b) change the dates upon which payments of principal or interest
are due on any of the ICP Indebtedness or the Xxxxxxx
Indebtedness, other than to extend such dates;
(c) change any default or event of default, other than to delete
or make less restrictive any default provision therein, or add
any covenant with respect to any of the ICP Indebtedness or
the Xxxxxxx Indebtedness;
(d) change the redemption or prepayment provisions of any of
the ICP Indebtedness or Xxxxxxx Indebtedness, other than to
extend the term therefor or to reduce the premiums payable in
connection therewith;
(e) grant any security or collateral to secure payment of any of
the ICP Indebtedness or the Xxxxxxx Indebtedness (other than
the subordinate security held by Xxxxxxx from Borrower as of
the date hereof and assigned by Xxxxxxx to the Agent and the
Lenders pursuant to the Xxxxxxx Postponement, Subordination
and Assignment Agreement); or
(f) change or amend any other term if such change or amendment
would materially increase the obligations of the Loan Party or
confer additional material rights on any Affiliate or Xxxxxxx
in a manner adverse to Agent or any Lender.
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6.24 Cash Management. No Loan Party shall accumulate or maintain cash in
the Disbursement Accounts as of any date of determination in an aggregate
amount more than $250,000 in the aggregate in excess of cheques outstanding
against such accounts as of that date and amounts necessary to meet minimum
balance requirements.
6.25 0000 Xxxx-Xxxxxx Xxxxxx and Collateral Located outside of Quebec and
Ontario. No Loan Party shall keep, maintain or store Inventory, equipment or
other tangible personal property at 0000 Xxxx-Xxxxxx Xxxxxx, Xxxxx, Xxxxxx.
No Loan Party shall keep, maintain or store Inventory, equipment or other
tangible personal property at any location outside the Provinces of Quebec
and Ontario if the aggregate book value of such property at all such
locations exceeds $1,000,000 unless the Loan Party has notified the Agent in
writing and Agent has confirmed to Loan Party in writing that either it has
obtained a first ranking Lien on such property subject only to Prior Claims
that have not been filed, recorded or registered and in respect of which no
other action has been taken to make the Prior Claim enforceable by the holder
thereof, or it has decided for the time being not to obtain such a first
ranking Lien.
SECTION 7 TERM
7.1 Duration. The financing arrangements contemplated hereby shall be in
effect until the Commitment Termination Date. On the Commitment Termination
Date, the Revolving Credit Commitments shall terminate and the Revolving
Credit Loan and all other Obligations shall immediately become due and
payable in full, in immediately available funds.
7.2 Survival of Obligations. Except as otherwise expressly provided for
in the Loan Documents, no termination or cancellation (regardless of cause or
procedure) of any financing arrangement under this Agreement shall in any way
affect or impair the Obligations, duties, indemnities, and liabilities of any
Loan Party, or the rights of Agent or any Lender relating to any Obligations,
due or not due, liquidated, contingent or unliquidated or any transaction or
event occurring prior to such termination, or any transaction or event, the
performance of which is not required until after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon any Loan Party, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate
or expire, but rather shall survive such termination or cancellation and
shall continue in full force and effect until the Termination Date, provided
that any indemnity obligations of any Loan Party contained in the Loan
Documents and the provisions contained in Section 11 hereof shall survive the
Termination Date.
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SECTION 8 EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:
(a) any Loan Party shall fail to make any payment in respect of
any Obligations hereunder or under any of the other Loan
Documents when due and payable or declared due and payable,
including any payment of principal of, or interest on, or Fees
in respect of, the Revolving Credit Loan;
(b) any Loan Party shall fail or neglect to perform, keep or
observe any of the provisions of Section 1.5, Section 1.9,
Section 4.1, Section 5.1(d), Section 5.5, Section 5.16,
Section 5.18 or Section 6, including any of the provisions set
forth in Annex B, Annex E, Annex F or Annex G;
(c) any Loan Party shall fail or neglect to perform, keep or
observe any term or provision of this Agreement or of any of
the other Loan Documents (other than any such term or
provision referred to in paragraph (a) or (b) above), and the
same shall remain unremedied for a period ending on the first
to occur of ten (10) days after any Loan Party shall receive
written notice of any such failure from Agent or any Lender or
ten (10) days after any Loan Party shall become aware thereof;
(d) a default shall occur under the documents governing the terms
and conditions of the ICP Indebtedness or the Xxxxxxx
Indebtedness, other than the failure to pay interest provided
that neither ICP, in the case of the ICP Indebtedness, nor
Xxxxxxx, in the case of the Xxxxxxx Indebtedness, has taken
any step, action or proceeding whatsoever to collect such
interest;
(e) a default shall occur under any other agreement, document or
instrument in respect of borrowed money or Guaranteed
Indebtedness to which any Loan Party or Affiliate Corporation
is a party or by which any such Person or its property is
bound, and such default:
(1) involves the failure to make any payment (whether of
principal, interest or otherwise) due and owed
(whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) in respect of any
Indebtedness of such Person in an aggregate amount
exceeding $250,000 or the Equivalent Amount thereof,
or
(2) causes (or permits any holder of such Indebtedness or
a trustee to cause) such Indebtedness, or a portion
thereof in an aggregate amount exceeding $250,000, or
the Equivalent Amount thereof, to become due prior to
its stated maturity or before its regularly scheduled
date of payment, regardless of whether such default is
waived or such right is exercised by such holder or
trustee;
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(f) any Borrowing Base Certificate shall be untrue or incorrect in
any respect, or any representation or warranty herein or in
any other Loan Document or in any written statement pursuant
thereto or hereto, or in any report, financial statement or
certificate made or delivered to Agent or any Lender by any
Loan Party shall be untrue or incorrect in any material
respect as of the date when made or deemed made (including
those made or deemed made pursuant to Section 2.2);
(g) assets of any Loan Party, with a value of more than $100,000
shall be attached, seized, levied upon or subjected to a writ,
execution, distress warrant, or similar process, or come
within the possession of any administrator, receiver, trustee,
custodian, assignee or bailiff for the benefit of creditors of
such Person and shall remain unstayed or undismissed for 30
consecutive days; or any Person, other than a Loan Party,
shall apply for the appointment of an administrator, receiver,
trustee, custodian, assignee, bailiff or similar official for
any assets of any Loan Party and shall remain unstayed or
undismissed for 30 consecutive days; or any Loan Party shall
have concealed, removed or permitted to be concealed or
removed, any part of its property, with intent to hinder,
delay or defraud its creditors or any of them or made or
suffered a transfer of any of its property or the incurring of
an obligation which may be fraudulent under any Insolvency
Statute, fraudulent conveyance or other similar law by
whatever name called and in whatever jurisdiction;
(h) the commencement of a case or proceeding, or the presentation
of a petition, against any Loan Party or Affiliate Corporation
in or to a court having competent jurisdiction seeking a
decree or order:
(1) under any Insolvency Statute,
(2) appointing a custodian, administrator, receiver,
liquidator, assignee, trustee or sequestrator (or
similar official) for any Loan Party or Affiliate
Corporation or for all or any substantial part of its
properties or assets, or
(3) ordering the winding up or liquidation of the affairs
of any Loan Party or Affiliate Corporation,
and such case or proceeding shall remain undismissed or
unstayed for 30 consecutive days or such court shall enter a
decree or order granting the relief sought in such case or
proceeding;
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(i) any Loan Party or Affiliate Corporation shall:
(1) suspend or threaten to suspend or cease to carry on
its business,
(2) commence a proceeding, (including, without limitation,
the filing of a petition or an assignment or a
proposal or a notice of intention to make a proposal)
under any Insolvency Statute,
(3) consents to the institution of proceedings under any
Insolvency Statute or to the filing of any such
petition or to the appointment of or taking possession
by a custodian, administrator, receiver, liquidator,
assignee, trustee, bailiff or sequestrator (or similar
official) of any Loan Party or Affiliate Corporation
or of any substantial part of the property of any Loan
Party or Affiliate Corporation,
(4) be unable to meet its liabilities generally as they
become due, or is, or is adjudged or declared to be,
or admits to being, bankrupt or insolvent under any
Insolvency Statute or otherwise;
(5) shall take any corporate action in furtherance of any
of the foregoing action;
(j) final judgment or judgments (after the expiration of all times
to appeal therefrom) for the payment of money in excess of
$100,000, or the Equivalent Amount thereof, in the aggregate
shall be rendered against any Loan Party, unless the same
shall be vacated, stayed, bonded, paid or discharged within a
period of 30 days from the date of such judgment;
(k) there shall occur any event which causes a Material Adverse
Effect which shall not have been cured (or waived by Required
Lenders) within ten (10) days of notice thereof from Agent or
the Required Lenders to Borrower;
(l) any provision of any Loan Document shall for any reason cease
to be valid, binding and enforceable in accordance with its
terms, or any Loan Party, Xxxxxxx or ICP shall challenge the
enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has
ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms; or any Lien created
under any Collateral Document shall cease to be a valid and
perfected Lien having the first priority in any of the
Collateral purported to be covered thereby (except to the
extent otherwise permitted herein or by any Collateral
Documents);
(m) there shall occur a Change in Control;
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(n) the amount of trade credit made available by ICP (USA) to
Borrower as of the date of this Agreement shall be directly or
indirectly cancelled, reduced or otherwise restricted in any
manner whatsoever or the term of such trade credit, being net
60 days, shall be shortened;
(o) at any time 80% of the sum of the book values of the Accounts
and Inventory of Borrower, based on Borrower's financial
statements provided to Agent for the most recent Fiscal Month,
less the amount of the Obligations outstanding at such time,
is less than Cdn$20,550,000 which amount shall be permanently
reduced from time to time to the extent the principal amount
of the CHL Obligations falls below Cdn$20,550,000 when
converted from USD to Cdn$ at an exchange rate of Cdn$1.37 for
each USD1.00; or
(p) at any time the sum of the book values of the Cash, Accounts
and Inventory of Borrower, based on Borrower's financial
statements provided to Agent for the most recent Fiscal Month,
divided by the sum of the amounts of the Obligations
outstanding at such time and the current liabilities of
Borrower (excluding non-trade indebtedness owing to Affiliates
of Borrower), all based on such financial statements, is less
than the ratio of 1:1.
With respect to Sections 8.1(o) and 8.1(p), if Borrower does not provide to
Agent and Xxxxxxx the financial statements referred to therein within 60 days
after the close of a Fiscal Month, an Event of Default under such Sections
shall be deemed to have occurred on the expiry of such 60 day period.
8.2 Remedies.
(a) If any Default or Event of Default shall have occurred and be
continuing, Agent may, or if requested by Required Lenders, shall without
notice:
(1) suspend or terminate this facility with respect to any
obligations of the Lenders to make further Revolving Credit
Advances, whereupon, subject to Section 1.1(a), any further
Revolving Credit Advances shall be made in Agent's sole
discretion or Required Lenders' sole discretion (if
termination occurred at the request of Required Lenders);
and/or
(2) increase the rate of interest applicable to the Revolving
Credit Loan and other Obligations to the Default Rate as
provided in Section 1.6(d) or 1.6(e), as applicable, effective
as of the date of occurrence of the Default;
provided that, if such Default is remedied before becoming an Event of
Default, Agent and Required Lenders' rights under this Section 8.2(a) shall
cease in respect of such Default upon such remediation.
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(b) If any Event of Default shall have occurred and be continuing,
Agent may, or if requested by the Required Lenders, shall, without notice,
take any one or more of the following actions:
(1) terminate the Revolving Credit Commitments whereupon Lenders'
obligations to make further Revolving Credit Advances shall
terminate;
(2) declare all or any portion of the Obligations to be forthwith
due and payable, including the Revolving Credit Loan,
whereupon such Obligations shall become and be immediately due
and payable without presentment, demand or protest of any kind
by or to any Person, all of which are expressly waived by the
Loan Parties;
(3) exercise any rights and remedies provided to Agent or Lenders
under the Loan Documents and/or at law or equity,
provided, that upon the occurrence of an Event of Default specified in
Sections 8.1(g), 8.1(h) or 8.1(i) the rate of interest applicable to all
Obligations shall automatically be increased to or charged at, as
appropriate, the Default Rate as provided in Section 1.6(d) or 1.6(e), as
applicable, and the Revolving Credit Commitments of each Lender shall
immediately terminate and the Obligations shall become immediately due and
payable, in each case, without declaration, presentment, demand or protest of
any kind by or to any Person, all of which are expressly waived by each Loan
Party.
8.3 Waivers by Loan Parties. Except as otherwise provided for in this
Agreement and under Applicable Laws, to the full extent permitted by
Applicable Laws, each Loan Party waives:
(a) presentment, demand and protest and notice of presentment,
dishonour, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all
Loan Documents, notes, commercial paper, accounts, contract
rights, documents, instruments, chattel paper and guarantees
at any time held by Agent or any Lender on which any Loan
Party may in any way be liable, and each Loan Party hereby
ratifies and confirms whatever Agent or any Lender may do in
this regard;
(b) all rights to notice and a hearing before Agent's or Lenders'
taking possession or control of, or to Agent's or Lenders'
replevy, attachment or levy upon, the Collateral or any bond
or security which might be required by any court before
allowing Agent or Lenders to exercise any of their remedies;
and
(c) the benefit of any right of redemption and all valuation,
appraisal, marshalling and exemption laws.
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Each Loan Party acknowledges that it has been advised by counsel of its
choice with respect to this Agreement, the other Loan Documents and the
transactions contemplated by this Agreement and the other Loan Documents.
8.4 Application of Proceeds. After the occurrence of an Event of Default
and acceleration of the Obligations, the proceeds of the Collateral shall be
applied by Agent to payment of the Obligations in the following order, unless
Lenders otherwise agree in writing or a court of competent jurisdiction shall
otherwise direct:
(a) FIRST, to payment of all costs and expenses of Agent and
Lenders incurred in connection with the preservation,
collection and enforcement of the Obligations, or of any of
the Liens granted to Agent pursuant to the Collateral
Documents or otherwise, including, without limitation, any
amounts advanced by Agent or Lenders to protect or preserve
the Collateral;
(b) SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest and fees and
indemnities payable under Section 1 and Annex D in accordance
with the proportion which the accrued interest and fees and
indemnities payable under Section 1 and Annex D constituting
the Obligations owing to Agent and each such Lender at such
time bears to the aggregate amount of accrued interest and
fees and indemnities payable under such Section 1 and Annex D
constituting the Obligations owing to the Agent and all
Lenders at such time until such interest, fees and indemnities
shall be paid in full;
(c) THIRD, to payment of the principal of the Obligations, ratably
amongst Lenders in accordance with the proportion which the
principal amount of the Obligations owing to each such Lender
bears to the aggregate principal amount of the Obligations
owing to all Lenders until such principal of the Obligations
shall be paid in full;
(d) FOURTH, to the payment of all other Obligations, ratably
amongst Lenders in accordance with the proportion which the
amount of such other Obligations owing to each such Lender
bears to the aggregate principal amount of such other
Obligations owing to all Lenders until such other Obligations
shall be paid in full; and
(e) FIFTH, the balance, if any, after all of the Obligations have
been satisfied, shall, except as otherwise provided in any
Loan Document, be paid over to such other secured or
unsecured Person or Persons as may be required by law.
Each Loan Party acknowledges and agrees that it shall remain liable to
the extent of any deficiency between the amount of the proceeds of the
Collateral and the aggregate amount of the sums referred to in the first
through fourth clauses above.
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SECTION 9 AGENT
9.1 Appointment, Powers and Immunities. Each Lender hereby irrevocably
appoints and authorizes GE Capital Canada to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated
to Agent by the terms of this Agreement and of the other Loan Documents,
together with such other powers as are reasonably incidental thereto. As
between the Agent and the Lenders, Agent (which term as used in this sentence
and in Section 9.5 and the first sentence of Section 9.6 shall include
reference to its affiliates and its own and its affiliates' officers,
directors, employees and agents):
(a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and in the other Loan
Documents, and shall not by reason of this Agreement or any
other Loan Document be a trustee or fiduciary for any Lender;
(b) shall not be responsible to Lenders for any recitals,
statements, representations or warranties contained in this
Agreement or in any other Loan Document, or in any certificate
or other document referred to or provided for in, or received
by any of them under, this Agreement or any other Loan
Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement
or any other Loan Document or any other document referred to
or provided for herein or therein or for any failure by any
Loan Party or any other Person to perform any of its
obligations hereunder or thereunder;
(c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan
Document;
(d) shall not be responsible to Lenders for any action taken or
omitted to be taken by it hereunder or under any other Loan
Document or under any other document or instrument referred to
or provided for herein or therein or in connection herewith or
therewith, except for its own gross negligence or willful
misconduct as determined by a final judgment of a court of
competent jurisdiction (after all possible appeals have been
exhausted). Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of
any such agents or attorneys-in-fact selected by it in good
faith.
9.2 Reliance by Agent. Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by Agent. As to any
matters not expressly provided for by this Agreement or any other Loan
Document, Agent shall in all cases be fully protected in acting, or in
refraining
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from acting, hereunder or thereunder in accordance with instructions given by
Required Lenders or all Lenders (or in the absence of such instructions so
requested by Agent), as is required in such circumstance, and such
instructions of such Lenders and any action taken or failure to act pursuant
thereto shall be binding on all Lenders.
9.3 Defaults. Agent shall not be deemed to have knowledge or notice of
the occurrence of a Default or an Event of Default (other than the nonpayment
of principal of or interest on the Revolving Credit Loan or of Fees) unless
Agent has received notice from a Lender or Borrower specifying such Default
or Event of Default and stating that such notice is a "Notice of Default" or
"Notice of Event of Default". If Agent receives such a notice of the
occurrence of a Default or Event of Default, Agent shall give prompt notice
thereof to Lenders (and shall give each Lender prompt notice of each such
nonpayment). Agent shall (subject to Section 9.7) take such action with
respect to such Default or Event of Default as shall be directed by Required
Lenders; provided, that unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of Lenders except to
the extent that this Agreement expressly requires that such action be taken,
or not be taken, only with the consent or upon the authorization of Required
Lenders or all Lenders, as is required in such circumstance.
9.4 Rights as a Lender. With respect to the Revolving Credit Commitment
of GE Capital Canada and all Revolving Credit Advances made by GE Capital
Canada (and any successor acting as Agent), GE Capital Canada (and any
successor 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 acting as
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include Agent in its individual capacity. GE Capital Canada (and
any successor acting as Agent) and its affiliates may (without having to
account therefor to any Lender) lend money to, make investments in and
generally engage in any kind of business with any Loan Party (and any of its
Subsidiaries or Affiliates) as if it were not acting as Agent, and GE Capital
Canada and its affiliates may accept fees and other consideration from any
Loan Party or any Affiliate thereof for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.
9.5 Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Borrower hereunder and without limiting the obligations of
Borrower hereunder) promptly following demand therefore ratably in accordance
with the aggregate principal amount of the Revolving Credit Advances held by
Lenders (or, if no Revolving Credit Advances are at the time outstanding,
ratably in accordance with their respective Revolving Credit Commitments),
for any and all Claims of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against Agent (including by any Lender) arising
out of or by reason of any investigation in or in any way relating to or
arising out of this Agreement or any other Loan Document or any other
documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including the costs and expenses
that any Loan Party is obligated to pay
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hereunder) or the enforcement of any of the terms hereof or thereof or of any
such other documents; provided, that no Lender shall be liable for any of the
foregoing to the extent they arise solely from the gross negligence or
willful misconduct of the party to be indemnified as determined by a final
judgment of a court of competent jurisdiction (after all possible appeals
have been exhausted). Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly after demand for its rateable share of out-of-pocket
expenses (including counsel fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment and
enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement and each other Loan Document (to the extent that Agent is not
reimbursed by Borrower hereunder and without limiting the obligations of any
Loan Party hereunder).
9.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that it
has, independently and without reliance on Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made
its own credit analysis of each Loan Party and decision to enter into this
Agreement and that it will, independently and without reliance upon Agent or
any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions
in taking or not taking action under this Agreement or any of the other Loan
Documents. Agent shall not be required to keep itself informed as to the
performance or observance by any Loan Party of this Agreement or any of the
other Loan Documents or any other document referred to or provided for herein
or therein or to inspect the properties or books of any Loan Party. Agent
will use reasonable efforts to provide Lenders with any information received
by Agent from Borrower which is required to be provided to Lenders hereunder,
with any notice of a Default or Event of Default received by Agent from
Borrower and with any notice of a Default or Event of Default delivered by
Agent to Borrower; provided, that Agent shall not be liable to any Lender for
any failure to do so, except to the extent that such failure is attributable
to Agent's gross negligence or willful misconduct, as determined by a final
judgment of a court of competent jurisdiction (after all possible appeals
have been exhausted). Agent shall not have any duty or responsibility to
provide any Lender with any other credit or other information concerning the
affairs, financial condition or business of any Loan Party (or any of their
Affiliates) that may come into the possession of Agent or any of its
affiliates nor to update or correct any information previously given which
becomes incorrect or which Agent learns is incorrect.
9.7 Failure to Act. Except for action expressly required of Agent
hereunder and under the other Loan Documents, Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder:
(a) if such action would, in the opinion of Agent, be contrary to
law or the terms of this Agreement or any other Loan Document,
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(b) if such action would, in the opinion of Agent, expose Agent to
environmental liabilities, or
(c) if Agent shall not first be indemnified to its satisfaction
against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take such
action.
9.8 Successor Agent. Agent may resign at any time by giving written
notice thereof to Lenders and Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation or receipt of notice of removal, then
the retiring Agent may, on behalf of Lenders, appoint a successor Agent, that
shall be a Lender (and satisfy the criteria set out in Section 10.2(a)).
Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent (retiring by reason of its resignation or removal) shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of this
Section 9 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.
9.9 Consents under Loan Documents. Except as otherwise provided in
Section 11.1 with respect to this Agreement, Agent may, with the prior
consent of Required Lenders (but not otherwise), consent to any modification,
supplement or waiver under any of the Loan Documents; provided, that without
the prior consent of each Lender, Agent shall not (except as provided herein
or in the Collateral Documents) release any material portion of the
Collateral or otherwise terminate any Lien under any Collateral Document with
respect to any material portion of the Collateral, or agree to additional
obligations being secured by such Collateral, except that no such consent
shall be required, and Agent is hereby authorized and instructed, to release
any Lien covering Collateral:
(a) which is the subject of a disposition permitted hereunder;
(b) which secures Indebtedness to the extent permitted under
Section 6.3;
(c) to which Required Lenders have consented (except as otherwise
provided in Section 11.1); or
(d) the value of which does not exceed $100,000, or the Equivalent
Amount thereof, in any Fiscal Year.
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9.10 Collateral Matters.
(a) Except as otherwise expressly provided for in this Agreement,
Agent shall have no obligation whatsoever to any Lender or any other Person
to investigate, confirm or assure that the Collateral exists or is owned by
any Loan Party or is cared for, protected or insured or has not been
encumbered, or that any particular items of Collateral meet the eligibility
criteria applicable in respect of the relevant borrowing base, or whether any
particular reserves are appropriate, or that the Liens granted to Agent
herein or pursuant hereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise at all or in any particular manner or under any duty
or care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to Agent in this
Agreement or in any of the other Loan Documents, it being understood and
agreed that:
(1) in respect of the Collateral, or any act, omission or event
related thereto, Agent may act in any manner it may deem
appropriate, in its sole discretion, given Agent's own
interest in the Collateral as a Lender; and
(2) that Agent shall have no duty or liability whatsoever to any
other Lender, other than liability solely resulting from its
own gross negligence or willful misconduct as determined by a
final judgment of a court of competent jurisdiction (after all
possible appeals have been exhausted).
(b) Each Lender hereby appoints each other Lender as agent for the
purpose of perfecting Lenders' security interests in assets which can be
perfected by possession and which are so perfected. Should any Lender (other
than Agent) obtain possession of any such Collateral, such Lender shall
notify Agent thereof and, promptly upon Agent's request therefor, shall
deliver such Collateral to Agent or in accordance with Agent's instructions.
9.11 Non-Funding Lender; Actions by Lenders.
(a) The failure of any Lender (such Lender, a "Non-Funding
Lender") to make any Revolving Credit Advance to be made by it on the date
specified therefor shall not relieve any other Lender (each such other
Lender, an "Other Lender") of its obligation to make its Revolving Credit
Advance, on such date, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make a Revolving
Credit Advance to be made by such Non-Funding Lender, and no Non-Funding
Lender shall have any obligation to Agent or any Other Lender for the failure
by such Non-Funding Lender. Notwithstanding anything set forth herein to the
contrary, a Non-Funding Lender shall not have any voting or consent rights
under or with respect to any Loan Document or constitute a "Lender" (or be
included in the calculation of "Required Lenders" hereunder) for any voting
or consent rights under or with respect to any Loan Document.
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(b) Anything in this Agreement to the contrary notwithstanding,
each Lender hereby agrees with each other Lender that no Lender shall take
any action to protect or enforce its rights arising out of this Agreement,
the Revolving Credit Notes or the other Loan Documents (including exercising
any rights of offset) without first obtaining the prior written consent of
Agent and Required Lenders, it being the intent of Lenders that any such
action to protect or enforce rights under this Agreement, the Notes or the
other Loan Documents shall be taken in concert and at the direction or with
the consent of Agent and Required Lenders and not individually by a single
Lender.
9.12 Settlement Procedures.
(a) The Revolving Credit Loan balance may fluctuate from day to
day due to Agent's disbursement of funds to, and receipt of funds from,
Borrower. In order to minimize the frequency of transfers of funds between
Agent and Lenders, Revolving Credit Advances may be made by Agent and
payments in respect thereof will be settled according to the procedures set
forth in this Section 9.12. Notwithstanding these procedures, each Lender's
obligation to fund its portion of any Revolving Credit Advance will commence
on the date such Revolving Credit Advance is made. Such payments will be
made by each Lender without setoff, counterclaim or reduction of any kind.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Agent may elect, at its sole option, to fund the entire amount of
any Revolving Credit Advance requested by Borrower. If Agent makes such
election, such Revolving Credit Advance made by Agent shall be deemed, and
shall constitute, as of the date of making thereof, a Revolving Credit
Advance made by each Lender to Borrower in an amount equal to such Lender's
pro rata share thereof, and each Lender shall be obligated to deliver to
Agent such share of such Revolving Credit Advance on the Weekly Settlement
Date in accordance with the procedure for weekly settlement set forth in
Section 9.12(c) or as otherwise provided in Section 9.12(a). Notwithstanding
anything to the contrary contained in this Agreement, for purposes of
calculating interest payable to any Lender:
(1) Agent shall be deemed a "Lender" with respect to any
outstanding Revolving Credit Advances funded by Agent; and
(2) the amount of Revolving Credit Advances of any Lender that are
outstanding on any day shall be equal to the amount of such
Lender's Revolving Credit Advances outstanding on such day:
(A) excluding any Revolving Credit Advances that have been
funded entirely by Agent with respect to which such
Lender has not funded its pro rata share, and
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(B) including Revolving Credit Advances of such Lender
which have been repaid by Borrower to Agent but not
yet received by such Lender from Agent.
(c) Each Lender shall settle with Agent, upon Agent's request, on
the second Business Day of each week (or on such other day of the week as may
be designated from time to time by Agent) in each successive week (the
"Weekly Settlement Date"), on the net Revolving Credit Advances and payments
since the date of the last settlement. On each Weekly Settlement Date,
before 12:00 noon, Agent shall notify each Lender by telephone or telecopy or
other form of electronic transmission, of such Lender's pro rata share of the
outstanding Revolving Credit Advances and the amount of the payment necessary
to adjust such Lender's outstanding Revolving Credit Advances to such
Lender's pro rata share of such Revolving Credit Advances as of such Weekly
Settlement Date (on a net basis taking into account any funds in the
Collection Account which Agent determines are available). Any such payment
shall be made by the party from which such payment is due to the other party,
in same day funds, not later than 1:00 p.m. on such Weekly Settlement Date.
If any Lender shall, for any reason, not settle with Agent within one (1)
Business Day after the Weekly Settlement Date, such Lender agrees to pay and
Borrower agrees to repay (assuming Borrower has received such funds from the
Agent), severally, to Agent forthwith on demand the amount due Agent on such
Weekly Settlement Date together with interest thereon for each day from such
Weekly Settlement Date until the day such amount is paid to Agent, at:
(1) in the case of such Lender, the Prime Rate in effect for the
first three (3) days for which such amount remains unpaid and
thereafter at the rate then in effect with respect to the
applicable type of Revolving Credit Advances pursuant to
Section 1.6, and
(2) in the case of Borrower, the rate then in effect with respect
to Revolving Credit Advances pursuant to Section 1.6.
If such Lender shall pay to Agent such corresponding amount, such amount so
paid shall constitute such Lender's Revolving Credit Advance and, if both
such Lender and Borrower shall have paid and repaid, respectively, such
corresponding amount, Agent shall promptly pay over to Borrower such
corresponding amount in same day funds, but Borrower shall remain obligated
for all interest thereon at the rate then in effect with respect to Revolving
Credit Advances pursuant to Section 1.6.
(d) As an alternative to the weekly settlement provided for in
Section 9.12(c), Agent may elect at its sole option, to use the following
same day settlement procedure for borrowings of Revolving Credit Advances.
Before 12:00 noon on any date specified for a borrowing of a Revolving Credit
Advance in a Notice of Revolving Credit Advance, Agent may notify each Lender
by telephone, telecopy or other form of electronic transmission, of the
requested Revolving Credit Advance. Not later than 1:00 p.m. on the date of
such proposed Revolving Credit Advance, each Lender shall make available to
Agent, in same day funds, to such account as Agent may designate, such
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Lender's pro rata share of such Revolving Credit Advance. Notwithstanding
the foregoing, to the extent that there are available funds in the Collection
Account, Agent may, at Agent's discretion, notify each Lender that such
Lender's obligation to make available to Agent same day funds as provided in
the preceding sentence shall be satisfied to the extent of its pro rata share
out of such funds in the Collection Account, or such portion of such funds as
Agent shall indicate are to be applied to fund such Revolving Credit Advance.
SECTION 10 SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of each Loan Party, Agent,
Lenders, and their respective successors and assigns, except as otherwise
provided herein or therein. No Loan Party may assign, delegate, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
hereunder or under any of the Loan Documents without the prior express
written consent of Agent and all Lenders. Any such purported assignment,
transfer, hypothecation or other conveyance by any Loan Party without such
prior express written consent shall be void. The terms and provisions of
this Agreement and the other Loan Documents are for the purpose of defining
the relative rights and obligations of each Loan Party, Agent and Lenders
with respect to the transactions contemplated hereby and there shall be no
third party beneficiaries of any of the terms and provisions of this
Agreement or any of the other Loan Documents.
10.2 Assignments and Participations.
(a) Each Lender may, with the prior written consent of Agent,
resell (through syndication, assignment or participation) all or a portion of
its rights and obligations under this Agreement (including all or a part of
its Revolving Credit Advances, Revolving Credit Commitments and Revolving
Credit Note), in minimum increments of $5,000,000, to any other Person;
provided that, after giving effect to such resale, the selling Lender, if it
retains any Revolving Credit Commitments, shall have retained Revolving
Credit Commitments in an amount at least equal to $5,000,000 and; provided
further that, if any Lender sells, transfers or assigns all or any portion of
its rights and obligations under this Agreement to a nonresident of Canada
for purposes of the ITA, the purchaser shall not be entitled to the benefit
of Section 1.18 if such section would not be applicable had the sale,
transfer or assignment been made to a resident of Canada for purposes of the
ITA.
(b) In the case of an assignment by any Lender under this Section
10.2, the purchaser shall have, to the extent of such assignment, the same
rights, benefits and obligations as it would if it were a Lender hereunder;
provided, that each such assignment shall be of a constant, and not a
varying, percentage of the selling Lender's rights and obligations under this
Agreement. Upon execution by the assignor and the assignee of an instrument
pursuant to which the assignee assumes such rights and obligations, payment
by such assignee to such assignor of an amount equal to the purchase price
agreed between such assignor and assignee and delivered to Agent and Borrower
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of an executed copy of such instrument, together with payment to Agent of a
processing fee of $5,000, such assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights and benefits
as it would have if it were a Lender hereunder and the assignor shall be, to
the extent of such assignment (unless otherwise provided therein) released
from its obligations under this Agreement. Each Loan Party hereby
acknowledges and agrees that any assignment will give rise to a direct
obligation of each of the Loan Parties to the assignee and that the assignee
shall be considered to be a "Lender" hereunder and under the other Loan
Documents. In all instances, each Lender's liability to make Revolving
Credit Advances shall be several and not joint and shall be limited to such
Lender's pro rata share thereof. Upon any such assignment, Borrower, at its
own expense, shall execute and deliver to Agent in exchange for the
surrendered Revolving Credit Note of the assignor Lender a new Revolving
Credit Note to the order of the assignor Lender in an amount equal to the
Revolving Credit Commitment assumed by such assignee Lender, and if the
assignor Lender has retained a Revolving Credit Commitment hereunder, a new
Revolving Credit Note to the order of the assignor Lender in an amount equal
to such retained Revolving Credit Commitment. Such new Revolving Credit Note
shall be dated the Closing Date and shall otherwise be in the form of the
Revolving Credit Note replaced thereby. The Revolving Credit Note
surrendered to Agent shall be returned by Agent to Borrower marked
"cancelled".
(c) In the case of a participation by any Lender under this
Section 10.2,
(1) all amounts payable by Borrower hereunder shall be determined
as if that Lender had not sold such participation and the
participating Lender shall remain a "Lender" for all purposes
under this Agreement;
(2) any such grant of a participation will be made in compliance
with all Applicable Laws; and
(3) such Lender shall not grant any participation under which the
participant shall have rights to approve any amendment to or
waiver of this Agreement or the Loan Documents, except to the
extent such amendment or waiver would:
(A) extend the final maturity date for payment of the
Revolving Credit Loan,
(B) reduce the interest rate or the amount of principal or
Fees applicable to the Revolving Credit Loan, or
(C) release all or substantially all of the Collateral,
except as expressly provided herein or in the Loan
Documents.
In those cases in which a Lender grants rights to its participants to approve
any amendment to or waiver of this Agreement or the other Loan Documents
respecting the matters described in the
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foregoing clauses (A) through (C), the relevant participation agreements
shall provide for a voting mechanism whereby a majority of the amount of the
participating Lender's portion of the Revolving Credit Loan (irrespective of
whether held by such Lender or participated), shall control the vote for all
of such Lender's portion of the Revolving Credit Loan. In the case of any
participation, the participant shall not have any rights under this Agreement
or any of the other Loan Documents entered into in connection herewith (the
participant's right against such Lender in respect of such participation to
be those set forth in the participation or other agreement executed by such
Lender and the participant relating thereto) and all amounts payable to any
Lender hereunder shall be determined as if such Lender had not sold such
participation, provided, that with respect to Sections 1.16, 1.18, 1.19 and
11.7, participants shall be deemed to have the rights of a Lender.
(d) Except as otherwise provided in this Section 10.2, no Lender
shall, as between Borrower and that Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the
Revolving Credit Loan or other Obligations owed to such Lender. Subject to
Section 11.13 any Lender permitted to sell assignments and participations
under this Section 10.2 may furnish any information concerning any Loan Party
in the possession of that Lender from time to time to assignee and
participants (including prospective assignees and participants).
(e) Each Loan Party shall assist each Lender permitted to sell
assignments or participations under this Section 10.2 in whatever manner
necessary in order to enable or effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes,
confirmations of Obligations, and other documents and instruments as shall be
reasonably requested and the preparation and delivery of informational
materials, appraisals or other documents for, and the participation of
relevant management in meetings with, potential assignees or participants.
Each Loan Party shall certify the correctness, completeness and accuracy as
at the date thereof of all descriptions of the Loan Parties and their
respective affairs contained in any selling materials and all information to
the extent such descriptions and information are provided by it and included
in such materials and approved by it. No Loan Party shall have any
obligation in respect of any selling material or information included therein
unless such materials shall have been submitted to it for approval and such
approval obtained before any use or distribution thereof by Agent or any
Lender. The Loan Parties shall not be entitled to receive any reimbursement
for any out-of-pocket costs or expenses that any Loan Party incurs as a
result of providing such assistance in connection with any sale of
participations or assignments and shall not have any obligations in respect
of Agent's or any Lender's costs or expenses incurred in connection with any
sale of participations or assignments.
(f) Each Lender that resells (through syndication, assignment or
participation) all or a portion of its rights and obligations under this
Agreement shall advise Agent and Borrower of the identity of the purchaser.
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SECTION 11 MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. This Agreement and the
other Loan Documents constitute the complete agreement between the parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements, commitments, understandings or inducements (oral or written,
expressed or implied), including the Commitment Letter. Neither this
Agreement nor any other Loan Document nor any terms hereof or thereof may be
changed, waived, discharged or terminated unless such change, waiver,
discharge or termination is in writing signed by the Required Lenders;
provided, that no such change, waiver, discharge or termination shall,
without the consent of each affected Lender and Agent:
(a) extend the scheduled final maturity of the Revolving Credit
Loan, or any portion thereof, or reduce the rate or extend the
time of payment of interest (other than as a result of waiving
the applicability of any post-Default or Event of Default
increase in interest rates) thereon or Fees, or reduce the
principal amount thereof, or increase the Revolving Credit
Commitment of such Lender over the amount thereof then in
effect (it being understood that a waiver of any Default or
Event of Default shall not constitute a change in the terms of
any Revolving Credit Commitment of any Lender);
(b) release Collateral with a fair market value of more than
$250,000, or the Equivalent Amount in any year;
(c) amend, modify or waive any provision of this Section, or
Section 1.11, 1.16, 9.5, 11.2 or 11.7;
(d) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders; or
(e) consent to the assignment or transfer by any Loan Party of any
of its rights and obligations under this Agreement.
No provision of Section 9 may be amended without the prior written consent of
Agent.
11.2 Fees and Expenses.
Borrower shall reimburse Agent on demand for all out-of-pocket
expenses incurred in connection with the preparation, negotiation, execution,
delivery and registration of the Commitment Letter and of the Loan Documents
(including the reasonable fees and expenses of its counsel, advisors,
consultants and auditors retained in connection with the Loan Documents and
advice in connection therewith). Borrower shall reimburse Agent (and, with
respect to clauses (d) and (e) below, all Lenders) for all reasonable fees,
costs and expenses, including the fees, costs and expenses of counsel or
other advisors (including environmental and management consultants and
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appraisers) for advice, assistance, or other representation in connection
with:
(a) the forwarding to Borrower or any other Person on behalf of
Borrower by Agent of the proceeds of the Revolving Credit Advances;
(b) currency conversion transaction costs (if any);
(c) any amendment, modification or waiver of, consent with respect
to, or interpretation of, any of the Loan Documents or advice in connection
with its rights hereunder or thereunder;
(d) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, any Loan Party or any other Person)
in any way relating to the Collateral, any of the Loan Documents or any other
agreement to be executed or delivered in connection therewith or herewith,
whether as party, witness, or otherwise, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review thereof,
in connection with a case commenced by or against any Loan Party or any other
Person that may be obligated to Agent by virtue of the Loan Documents;
including any such litigation, contest, dispute, suit, proceeding or action
arising in connection with any workout or restructuring of the Revolving
Credit Loan during the pendency of one or more Events of Default; provided
that in the case of reimbursement of counsel for Lenders other than Agent,
such reimbursement shall be limited to one counsel for all such Lenders;
(e) any enforcement of any remedies of Agent or any Lender under
any of the Loan Documents against any or all of the Loan Parties or any other
Person that may be obligated to Agent or any Lender by virtue of any of the
Loan Documents; including any enforcement of any such remedies in the course
of any workout or restructuring of the Revolving Credit Loan during the
pendency of one or more Events of Default; provided that in the case of
reimbursement of counsel for Lenders other than Agent, such reimbursement
shall be limited to one counsel for all such Lenders;
(f) any workout or restructuring of the Revolving Credit Loans
during the pendency of one or more Events of Default;
(g) efforts to (1) monitor the Revolving Credit Loan or any of the
other Obligations, (2) evaluate, observe or assess any of the Loan Parties or
their respective affairs, and (3) verify, protect, evaluate, assess,
appraise, collect, sell, liquidate or otherwise dispose of any of the
Collateral;
including all legal counsel's and other professional and service providers'
fees arising from such services, including those in connection with any
appellate proceedings; and all expenses, costs, charges and other fees
incurred by such counsel and others in any way or respect arising in
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connection with or relating to any of the events or actions described in this
Section 11.2 shall be payable, on demand, by Borrower to Agent. Without
limiting the generality of the foregoing, such expenses, costs, charges and
fees may include: reasonable fees, costs and expenses of accountants,
environmental advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or telecopy charges;
secretarial overtime charges; and reasonable expenses for travel, lodging and
food paid or incurred in connection with the performance of such legal or
other advisory services.
11.3 No Waiver. No failure on the part of Agent or Lenders, at any time or
times, to require strict performance by any Loan Party, of any provision of
this Agreement or any of the other Loan Documents shall waive, affect or
diminish any right of Agent or Lenders thereafter to demand strict compliance
and performance therewith. Any suspension or waiver of a Default or Event of
Default shall not suspend, waive or affect any other Default or Event of
Default, whether the same is prior or subsequent thereto, and whether of the
same or of a different type. None of the undertakings, agreements,
warranties, covenants and representations of any Loan Party contained in this
Agreement or any of the other Loan Documents and no Default or Event of
Default by any Loan Party shall be deemed to have been suspended or waived by
Lenders, unless such waiver or suspension is by an instrument in writing
signed by an officer of or other authorized employee of Agent and Required
Lenders or all Lenders if required hereunder and directed to Borrower or
other Loan Party specifying such suspension or waiver.
11.4 Remedies. The rights and remedies of Agent and Lenders under this
Agreement shall be cumulative and nonexclusive of any other rights and
remedies which Agent or any Lender may have under any other agreement,
including the Loan Documents, by operation of law or otherwise. Recourse to
the Collateral shall not be required.
11.5 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
Applicable Laws, but if any provision of this Agreement shall be prohibited
by or invalid under Applicable Laws, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
11.6 Conflict of Terms. Except as otherwise provided in this Agreement or
any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement is
in conflict with, or inconsistent with, any provision in any of the other
Loan Documents, the provisions contained in this Agreement shall govern and
control; provided, however, that any provision contained in this Agreement
shall not be in conflict with, or be inconsistent with, any provision in any
of the other Loan Documents unless the relevant Loan Party cannot comply with
both provisions.
11.7 Right of Setoff. Subject to Sections 1.14 and 9.11, upon the
occurrence and during the continuance of any Event of Default, each Lender is
hereby authorized at any time and from time
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to time, to the fullest extent permitted by law, to setoff and apply any and
all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of any Loan Party against any and all of the
Obligations now or hereafter existing irrespective of whether or not such
Lender shall have made any demand under this Agreement or any other Loan
Document and although such Obligations may be unmatured. Each Lender agrees
promptly to notify Agent and the applicable Loan Party after any such setoff
and application made by such Lender; provided, that the failure to give such
notice shall not affect the validity of such setoff and application. The
rights of each Lender under this Section are in addition to the other rights
and remedies (including other rights of setoff) which such Lender may have.
11.8 Judgment Currency.
(a) If, for the purpose of obtaining or enforcing judgment against
any Loan Party in any court in any jurisdiction, it becomes necessary to
convert into any other currency (such other currency being hereinafter in
this Section 11.8 referred to as the "Judgment Currency") an amount due under
any Loan Document in any currency (the "Obligation Currency") other than the
Judgment Currency, the conversion shall be made at the rate of exchange
prevailing on the Business Day immediately preceding:
(1) the date of actual payment of the amount due, in the case of
any proceeding in the courts of the Province of Ontario or in
the courts of any other jurisdiction that will give effect to
such conversion being made on such date; or
(2) the date on which the judgment is given, in the case of any
proceeding in the courts of any other jurisdiction (the
applicable date as of which such conversion is made pursuant
to this Section 11.8(a) being hereinafter in this Section 11.8
referred to as the "Judgment Conversion Date").
(b) If, in the case of any proceeding in the court of any
jurisdiction referred to in Section 11.8(a), there is a change in the rate of
exchange prevailing between the Judgment Conversion Date and the date of
actual receipt of the amount due in immediately available funds, the
applicable Loan Party shall pay such additional amount (if any, but in any
event not a lesser amount) as may be necessary to ensure that the amount
actually received in the Judgment Currency, when converted at the rate of
exchange prevailing on the date of payment, will produce the amount of the
Obligation Currency, as the case may be, which could have been purchased with
the amount of the Judgment Currency stipulated in the judgment or judicial
order at the rate of exchange prevailing on the Judgment Conversion Date.
(c) Any amount due from a Loan Party under Section 11.8(b) shall
be due as a separate debt and shall not be affected by judgment being
obtained for any other amounts due under or in respect of any of the Loan
Documents.
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(d) The term "rate of exchange" in this Section 11.8 means the
12:00 noon rate of exchange quoted on any Business Day on Telerate News
Service (Page 3194 or such other Page as may replace such Page on such Screen
for the purpose of displaying currency exchange rates) for the sale of
Canadian Dollars against the Judgment Currency.
11.9 Notices. Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or
other communication shall or may be given to or served upon one party by the
other party, or whenever one party desires to give or serve upon the other
party any communication with respect to this Agreement, each such notice,
demand, request, consent, approval, declaration or other communication shall
be in writing and shall be deemed to have been validly served, given or
delivered:
(a) upon transmission, when transmission occurs at or before 5:00
p.m. on any Business Day, or, if a transmission occurs after
such time on the Business Day immediately following such
Business Day, when sent by telecopy or other similar facsimile
transmission (with such telecopy or facsimile promptly
confirmed by delivery of a copy by personal delivery as
otherwise provided in this Section 11.9);
(b) when delivered, if hand-delivered by messenger or courier
service, all of which shall be addressed to the party to be
notified and sent to the address or facsimile number
indicated below or to such other address (or facsimile number)
as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies
of any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than any Loan Party, Agent or any Lender)
designated below to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration
or other communication:
(1) Communications with Agent (and with GE Capital Canada
in its capacity as Lender hereunder) under this
Section 11.9 shall be addressed as follows:
General Electric Capital Canada Inc.
000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Vice President, InterCity Account
Telecopier No.: (000) 000-0000
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with a copy to:
General Electric Capital Corporation
000 Xxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx
XXX 00000
Attention: Account Manager, InterCity Account
Telecopier No.: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Regional Counsel, InterCity Account
Telecopier No.: (000) 000-0000
(2) communications with each Lender (other than GE Capital
Canada) shall be addressed to the address of such
Lender set forth under its name on the signing pages
of this Agreement, with a copy, in each case, to Agent
and each Person to whom copies of communications with
Agent are to be given or served under Section 11.9;
(3) communications with Borrower under this Section 11.9
shall be addressed as follows:
InterCity Products Corporation (Canada)
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Director of Finance
Telecopier No.: (000) 000-0000
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(4) communications with McDonald under this Section 11.9
shall be addressed as follows:
X.X. XxXxxxxx Supply Limited
c/o InterCity Products Corporation (Canada)
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Director of Finance
Telecopier No.: (000) 000-0000
11.10 Section Titles. The Section titles and Table of Contents contained
in this Agreement are and shall be without substantive meaning or content of
any kind whatsoever and are not a part of this Agreement.
11.11 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall, collectively and separately,
constitute one agreement.
11.12 Time of the Essence. Time is of the essence of this Agreement and
each of the other Loan Documents.
11.13 Confidentiality.
(a) Each Loan Party agrees that it shall not (and shall not permit
any of its Subsidiaries to) issue any news release or make any public
announcement pertaining to the transactions contemplated by the Loan
Documents without the prior written consent of Agent.
(b) Agent and each Lender agree to use commercially reasonable
efforts (equivalent to the efforts Agent or such Lender applies to maintain
the confidentiality of its own confidential information) to maintain as
confidential all confidential information provided to them by the Loan
Parties and designated as confidential for a period of three (3) years
following receipt thereof, except that Agent and each Lender may disclose
such information (1) to Persons employed or engaged by Agent or such Lender
in evaluating, approving, structuring or administering the Revolving Credit
Loan and the Revolving Credit Commitment; (2) to any actual or potential
assignee or participant that has agreed to comply with the covenant contained
in this Section 11.13 (and any such bona fide assignee or participant may
disclose such information to Persons employed or engaged by them as described
in clause (1) above); (3) as required or requested by any Governmental Body
or reasonably believed by Agent or such Lender to be compelled by any court
decree, subpoena or legal or administrative order or process; (4) as, in the
opinion of Agent's or such Lender's counsel, required by law; (5) in
connection with the exercise of any right or remedy under the Loan Documents
or in connection with any action, claim, lawsuit, demand, investigation or
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proceeding before any Governmental Body to which Agent or such Lender is a
party; or (6) which ceases to be confidential through no fault of Agent or
such Lender.
(c) The Loan Parties have furnished and will furnish to Agent
certain information concerning the Loan Parties which is non-public,
proprietary or confidential in nature ("Confidential Information"). Agent
and each Lender confirm to the Loan Parties that it is Agent's and such
Lender's policy and practice to maintain in confidence all Confidential
Information which is provided to it under agreements providing for the
extension of credit, and that it will protect the confidentiality of
Confidential Information submitted to it with respect to any Loan Party under
this Agreement, commensurate with its efforts to maintain the confidentiality
of its own Confidential Information, provided, however, that (1) nothing
contained herein shall prevent Agent or any Lender from disclosing
Confidential Information (A) to Persons employed or engaged by Agent or such
Lender in evaluating, approving, structuring or administering the Revolving
Credit Loan and the Revolving Credit Commitment on the condition that such
information not be further disclosed except in compliance with this Section
11.13(c); (B) as required or requested by any Governmental Body or reasonably
believed by Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (C) as, in the opinion
of Agent's or such Lender's counsel, required by law; (D) to any actual or
potential assignee of or participant in any Lender's rights and obligations
under this Agreement pursuant to Section 10.2 to the extent such actual or
potential assignee or participant has agreed to maintain such information in
confidence on the basis set forth in this Section 11.13(c) (and any such bona
fide assignee or participant may disclose such information to Persons
employed or engaged by them as described in clause (1) above) and (E) in
connection with the exercise of any of its rights and remedies under this
Agreement or any of the other Loan Documents or in connection with any
action, claim, lawsuit, demand, investigation or proceeding before any
Governmental Body to which Agent or such Lender is a party; (2) the terms of
this Section 11.13(c) shall be inapplicable to any information provided to
Agent or such Lender which is in its possession prior to the delivery to it
of such information by any Loan Party or otherwise has been obtained by it on
a nonconfidential basis, or which was or becomes available to the public or
otherwise part of the public domain (other than as a result of Agent's or
such Lender's failure or any prospective participant's or assignee's failure
to abide hereby), or which was not non-public, proprietary or confidential
when a Loan Party delivered it to Agent; and (3) the determination by Agent
or any Lender as to the application of any of the circumstances described in
the foregoing clauses (1) and (2) will be presumed correct if made in good
faith.
(d) Notwithstanding paragraphs (a) and (b) above, each Loan Party
consents to Agent publishing a tombstone or similar advertising material
relating to the financing transaction contemplated by this Agreement.
11.14 Governing Law. Except as otherwise expressly provided in any of the
Loan Documents, in all respects, including all matters of construction,
validity and performance, this Agreement and the Obligations arising
hereunder shall be governed by, and construed and enforced in
-82-
accordance with, the laws of the Province of Ontario applicable to contracts
made and performed in such province, and any laws of Canada applicable
therein without reference to principles of conflicts of law, except that,
with respect to registration, perfection and enforcement of hypothecs,
charges, assignments and security interests on, of or in Collateral located
in jurisdictions other than the Province of Ontario, to the extent required
by the law of such jurisdictions, such law shall govern. Borrower hereby
covenants and agrees that the courts located in the Province of Ontario shall
have nonexclusive jurisdiction to hear and determine any claims or disputes
pertaining to the Loan Documents or to any matter arising out of or related
to any of the Loan Documents; provided, however, that nothing in the Loan
Documents shall be deemed or operate to preclude the Agent from bringing suit
or taking other legal action in any other jurisdiction to collect amounts
owing under any of the Loan Documents, to realize on the Collateral or any
other security for the Obligations, or to enforce a judgement or other court
order in favour of the Agent.
11.15 Further Assurances. Each Loan Party shall, from time to time, upon
each request from Agent, at Borrower's cost and expense, make, do, execute
and cause to be made, done and executed, all such further and other lawful
acts, documents and assurances whatsoever which Agent determines in its
reasonable opinion may be necessary in order to give effect to the
provisions, purposes and intent of this Agreement and the other Loan
Documents and to complete the transactions contemplated by this Agreement and
the other Loan Documents.
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IN WITNESS WHEREOF, the parties have executed this Agreement.
INTERCITY PRODUCTS CORPORATION (CANADA)
By:
-------------------------------------
Name:
Title:
X.X. XxXXXXXX SUPPLY LIMITED
By:
-------------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL
CANADA INC, as Agent
By:
--------------------------------------
Name:
Title:
Lenders:
Revolving Credit Commitment:
Cdn$30,000,000
GENERAL ELECTRIC CAPITAL
CANADA INC.
By:
---------------------------------------
Name:
Title:
-84-
ANNEXES, SCHEDULES AND EXHIBITS
TO
CREDIT AGREEMENT
Dated as of December 19, 1996
between
INTERCITY PRODUCTS CORPORATION (CANADA)
as Borrower
and
X.X. XxXXXXXX SUPPLY LIMITED
as a Loan Party
THE LENDER OR LENDERS PARTY THERETO
and
GENERAL ELECTRIC CAPITAL CANADA INC.
as Agent
INDEX OF ANNEXES, SCHEDULES AND EXHIBITS
Annex A - Definitions; Rules of Construction
Annex B - Cash Management System
Annex C - Schedule of Closing Documents
Annex D - Schedule of Certain Fees
Annex E - Financials, Projections and Notices
Annex F - Insurance Requirements
Annex G - Financial Covenants
Schedule 1.17 - Location of Electronically Recorded Data
Schedule 3.2 - Chief Executive Office; Collateral Locations;
Corporate Names
Schedule 3.4 - Financials and Projections
Schedule 3.5 - Material Adverse Changes and Restricted Payments
Schedule 3.6 - Real Property and Leases
Schedule 3.7 - Material Contracts
Schedule 3.8 - Labour Matters
Schedule 3.9 - Ventures, Subsidiaries and Affiliates; Outstanding
Stock and Indebtedness
Schedule 3.10 - Taxes
Schedule 3.12 - Canadian Benefit and Pension Plans
Schedule 3.13 - Litigation
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Environmental Matters
Schedule 3.18 - Insurance Policies
Schedule 3.19 - Bank Accounts and Lock Boxes
Schedule 3.24 - Customer and Trade Relations
Schedule 3.25 - Agreements and Other Documents
Schedule 6.2 - Investments
Schedule 6.7 - Liens
Exhibit 1.1(c) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(d) - Form of Revolving Credit Note
Exhibit 1.1(e) - Form of Borrowing Base Certificate
Exhibit 1.2 - Form of Notice of Rollover
Exhibit 1.3 - Form of Notice of Conversion
Exhibit 3.4 - Projections
Exhibit A - Form of Compliance Certificate
Exhibit B - Form of Supplier Waiver and Assignment
Annex A to Credit Agreement
DEFINITIONS: RULES OF CONSTRUCTION
1. Definitions. Capitalized terms used in this Agreement and the other
Loan Documents have (unless otherwise provided elsewhere in this Agreement
and the other Loan Documents) the following respective meanings:
ACCOUNT DEBTOR means, as to any Person, any other Person who is or who
may become obligated to such Person under, with respect to, or on account of,
an Account.
ACCOUNTANTS means, with respect to each Loan Party, Price Waterhouse,
or such other chartered public accountants who shall be a nationally
recognized accounting firm.
ACCOUNTANT'S LETTER has the meaning given to it in Section 4.2.
ACCOUNTS means all "accounts", as such term is defined in the PPSA
(Ontario), now owned or hereafter acquired by any Loan Party, including,
without limitation:
(a) all accounts receivable, other receivables, book debts and
other forms of obligations (other than forms of obligations
evidenced by Chattel Paper or Instruments or a security) now
owned or hereafter received or acquired by or belonging or
owing to any Loan Party, whether arising out of goods sold or
services rendered by it or from any other transaction;
(b) all of each Loan Party's rights in, to and under all purchase
orders or receipts now owned or hereafter acquired by it for
goods or services;
(c) all of Borrower's or any other Loan Party's rights to any
goods represented by any of the foregoing (including unpaid
sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or
repossessed goods);
(d) all monies due or to become due to any Loan Party under all
purchase orders and contracts for the sale or lease of goods
or the performance of services or both by any Loan Party or in
connection with any other transaction (whether or not yet
earned by performance on the part of any Loan Party) now or
hereafter in existence, including, without limitation, the
right to receive the proceeds of said purchase orders and
contracts; and
(e) all collateral security and guarantees of any kind, now or
hereafter in existence, given by any Person with respect to
any of the foregoing.
ADDITIONAL COMPENSATION means has the meaning given to it in Section
1.19.
ADVANCE DATE has the meaning given to it in Section 1.13.
Affiliate means, with respect to any Person,
(a) each Person that, directly or indirectly, owns or controls,
whether beneficially, or as a trustee, guardian or other
fiduciary, five percent (5%) or more of the Stock having
ordinary voting power in the election of directors of such
Person;
(b) each Person that controls, is controlled by or is under common
control with such Person; or
(c) each of such Person's officers, directors, joint ventures and
partners.
For the purpose of this definition, "control" of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of
voting securities, by contract or otherwise; provided that when used in
reference to any Loan Party, the term Affiliate shall specifically exclude
Agent and each Lender.
AFFILIATE CORPORATION means any of ICP, CHL or ICP (USA).
AGENT has the meaning given to it in the first paragraph of this
Agreement or any successor thereto pursuant to Section 9.8.
AGENT'S COLLECTION ACCOUNTS means Agent's Canadian Dollar account
number 0000000 in the name of GE Capital Canada at Royal Bank of Canada, 000
Xxx Xxxxxx, 00xx Xxxxx, Xxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxx, transit number
00002, or such other account as may be designated by Agent.
AGREEMENT means the Credit Agreement to which this Annex A is attached
and of which it forms a part, including all Annexes, Schedules, and Exhibits
attached or otherwise identified thereto, all restatements, modifications and
supplements hereof or hereto, and any appendices, attachments, exhibits or
schedules to any of the foregoing, and shall refer to this Agreement as the
same may be in effect at the time such reference becomes operative; provided,
that any reference to the Schedules to this Agreement shall be deemed a
reference to the Schedules as in effect as of the Closing Date, unless
otherwise provided in a written amendment thereto.
APPLICABLE LAWS means, with respect to any Person, property,
transaction or event, all applicable laws, statutes, regulations, treaties,
judgments and decrees and (whether or not having the force of law) and all
applicable official directives, rules, consents, approvals, authorizations,
guidelines,
orders and policies of any Governmental Body having authority over such
Person, except that wherever the term "Applicable Laws" is used in Sections
3, 5 and 6, the term shall be read as requiring all elements thereof to have
the force of law.
ASSIGNMENT OF RENTS AND BENEFITS means each assignment of rents and
benefits between any Loan Party and Agent, for the benefit of Agent and
Lenders, in form and substance satisfactory to Agent, including all
amendments, restatements, modifications and supplements thereto, in form and
substance satisfactory to Agent, and shall refer to each Assignment of Rents
and Benefits as the same may be in effect at the time such reference becomes
operative.
ASSIGNMENTS OF MONIES PAYABLE UNDER INSURANCE POLICIES means each
assignment of monies which may become payable under insurance policies to be
executed by each Loan Party in favour of Agent, for the benefit of Agent and
Lenders, including all restatements, amendments, modifications and
supplements thereto, and shall refer to the Assignments of Monies Payable
Under Insurance Policies as the same may be in effect at the time such
reference becomes operative.
BA RATE means, in respect of any Interest Period applicable to a BA
Rate Loan, the rate of interest per annum determined by Agent by reference to
the average rate (rounded upwards to the nearest basis point) quoted on
Telerate News Service (Page 3197, or such other Page as may replace such Page
on such Screen for the purpose of displaying Canadian interbank bid rates for
Canadian Dollar bankers' acceptances) applicable to Canadian Dollar bankers'
acceptances with a term comparable to such Interest Period as of 10:00 a.m.
(Toronto time) two Business Day before the first day of such Interest Period.
If for any reason the Telerate News Service rates are unavailable, BA Rate
means the rate of interest determined by Agent which is equal to the
arithmetic mean of the rates quoted by The Bank of Nova Scotia, Royal Bank of
Canada, and Canadian Imperial Bank of Commerce, in respect of Canadian Dollar
bankers' acceptances with a term comparable to such Interest Period as of
10:00 a.m. two Business Day before the first day of such Interest Period.
BA RATE LOAN means a loan that bears interest at a rate based on the
BA Rate.
BANK ACT SECURITY has the meaning given to it in Section 5.15.
BLOCKED ACCOUNT has the meaning given to it in Annex B.
BLOCKED ACCOUNTS AGREEMENT means each blocked accounts agreement to be
executed by each Loan Party in favour of Agent, for the benefit of Agent and
Lenders, in form and substance satisfactory to Agent, including all
restatements, amendments, modifications and supplements thereto, in form and
substance satisfactory to Agent, and shall refer to each Blocked Accounts
Agreement as the same may be in effect at the time such reference becomes
operative.
BLOCKED CONCENTRATION ACCOUNT has the meaning given to it in Annex B.
BLOCKED CONCENTRATION ACCOUNT BANK has the meaning given to it in
Annex B.
BORROWER has the meaning given to it in the first paragraph of this
Agreement.
BORROWER PLEDGE AGREEMENT means the pledge agreement dated as of
December 19, 1996 between Borrower and Agent, for the benefit of Agent and
Lenders, pledging all of the issued shares of McDonald to Agent, including
all restatements, amendments, modifications and supplements thereto, and
shall refer to the Borrower Pledge Agreement, as the same may be in effect at
the time such reference becomes operative.
BORROWING BASE means, at any time, an amount determined by Agent to be
equal to the sum at such time of:
(a) eighty five percent (85%) of Eligible Accounts (based on the
lower of the accounts receivable aging or the general ledger
value),
plus
(b) fifty percent (50%) of Eligible Inventory, valued on a
firstin, firstout basis (at the lower of (x) market or (y) the
lower of cost from the general ledger of the Borrower or from
the perpetual ledger of the Borrower), and
minus
(c) the amount of any reserves, including, without limitation, in
respect of Prior Claims and, in the case of Eligible
Inventory, a revaluation reserve and excess/obsolete reserve,
(if any), as Agent may, from time to time, determine
appropriate, in its reasonable credit judgement.
BORROWING BASE CERTIFICATE means a certificate in substantially the
form attached hereto as Exhibit 1.1(e).
BUSINESS DAY means any day that is not
(a) a Saturday, a Sunday or a day on which banks are required or
permitted to be closed in the State of Illinois or the
Province of Ontario; or
(b) a day on which Agent is not open for business.
CANADIAN BENEFIT PLANS means all material employee benefit plans
maintained or contributed to by any Loan Party that are not Canadian Pension
Plans including, without limitation, all profit
sharing, savings, supplemental retirement, retiring allowance, severance,
pension, deferred compensation, welfare, bonus, incentive compensation,
phantom stock, legal services, supplementary unemployment benefit plans or
arrangements and all life, health, dental and disability plans and
arrangements in which the employees or former employees of Borrower or any of
its Subsidiaries employed in Canada participate or are eligible to
participate but excluding all stock option or stock purchase plans.
CANADIAN DOLLARS AND CDN$ means lawful money of Canada.
CANADIAN PENSION PLANS means each plan which is considered to be a
pension plan for the purposes of any applicable pension benefits standards
statute and/or regulation in Canada established, maintained or contributed to
by Borrower or any of its Subsidiaries for its or any of its Subsidiaries'
employees or former employees.
CAPITAL EXPENDITURES shall mean, with respect to any period, all
payments of Borrower and its Subsidiaries during such period for any fixed
assets or improvements, or for replacements, substitutions or additions
thereto, that have a useful life of more than one year and that are required
to be capitalized under GAAP, and, in any event, shall include Capital Lease
Obligations and all asset purchases giving rise to a Lien securing Purchase-
Money Indebtedness.
CAPITAL LEASE means any lease of any property (whether real, personal
or mixed) by any Person as lessee that, in accordance with GAAP, either would
be required to be classified and accounted for as a capital lease on a
balance sheet of such Person or otherwise be disclosed as such in a note to
such balance sheet.
CAPITAL LEASE OBLIGATION means, as of any date, the amount of the
obligation of the lessee under a Capital Lease.
CASH EQUIVALENTS means:
(a) securities with maturities of 30 days or less from the date of
acquisition, issued or fully guaranteed or insured by the
governments of Canada or the United States of America or any
agency thereof;
(b) certificates of deposit, overnight bank deposits and bankers'
acceptances issued by commercial banks incorporated under the
laws of Canada or the United States of America, each having
capital and surplus in excess of Cdn$500,000,000, or the
Equivalent Amount thereof, having maturities of 30 days or
less from the date of acquisition; and
(c) commercial paper of an issuer rated at least A1 by Standard &
Poor's Corp. or at least P1 by Moody's Investors Services,
Inc., or carrying an equivalent rating by a nationally
recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments, with
maturities of not more than 30 days from the date acquired.
CHANGE IN CONTROL means the time when:
(a) any Loan Party has sold, transferred, conveyed, assigned or
otherwise disposed of all or substantially all of its assets;
(b) ICP ceases to be the beneficial owner and registered holder of
all of the issued and outstanding shares of Borrower;
(c) Borrower ceases to be the beneficial owner and registered
holder of all of the issued and outstanding shares of McDonald
unless the Net Proceeds of any sale of such shares are, upon
receipt by Borrower, paid to Agent in repayment of the then
outstanding Obligations; or
(d) with respect to ICP,
(1) any Person or group of Persons acting jointly or in
concert shall have acquired beneficial ownership of,
or the power to exercise control or direction over,
20% or more of the issued and outstanding shares of
any class of shares in the capital Stock of ICP having
the right to vote for the election of directors of ICP
under ordinary circumstances, excluding the
acquisition by any Person or group of Persons of all
or any part of the shares of ICP owned at the date of
this Agreement by The Mortgage Insurance Company of
Canada ("MICC") (it being represented by Borrower that
at the date of this Agreement MICC is the registered
owner of approximately 32% of such issued and
outstanding shares of ICP); or
(2) during any period of twelve consecutive calendar
months, individuals who at the beginning of such
period constituted the board of directors of ICP
(together with any new directors whose election by the
board of directors of ICP or whose nomination for
election by the stockholders of ICP was approved by a
vote of at least two-thirds of the directors then
still in office who either were directors at the
beginning of such period or whose elections or
nomination for election was previously so approved)
cease for any reason other than death or disability to
constitute a majority of the directors then in office,
excluding, for purposes of calculating such majority,
any directors who are nominees or representatives of
MICC.
CHARGES means all Taxes or Liens in respect of Taxes upon or relating
to:
(a) the Collateral;
(b) the Obligations;
(c) the employees, payroll, income or gross receipts of any Loan
Party;
(d) the ownership or use by any Loan Party of any of its assets;
or
(e) any other aspect of any Loan Party's business.
CHATTEL PAPER means all "chattel paper", as such term is defined in
the PPSA (Ontario), now owned or hereafter acquired by Borrower, wherever
located.
CHL means CHL Holdings, Inc.
CHL OBLIGATIONS means all indebtedness, liabilities and obligations of
CHL under a credit agreement between CHL and Suntrust Bank, Nashville, N.A.
dated as of December 19, 1996.
CLAIM has the meaning given to it in Section 1.16.
CLOSING DATE means the Business Day on which the conditions precedent
set forth in Section 2 have been satisfied, in Agent's sole discretion, or
waived in writing by Agent, and on which the initial Revolving Credit Advance
shall be made (which date shall in any event be on or before December 31,
1996).
CLOSING FEE has the meaning ascribed to it in Annex D.
COLLATERAL means the property covered by the Collateral Documents and
any other property, real or personal, tangible or intangible, now existing or
hereafter acquired, that may at any time be or become subject to a Lien in
favour of Agent or Lenders to secure any or all of the Obligations.
COLLATERAL DOCUMENTS means the Security Agreements, the Hypothecs, the
Debentures, the Debenture Delivery Agreement, the General Assignments of Book
Debts, the Intellectual Property Security Agreements, Supplier Waivers and
Assignments, the Assignments of Rents and Benefits, the Blocked Accounts
Agreements, the Assignments of Monies Payable Under Insurance Policies, the
McDonald Guarantee, the Borrower Pledge Agreement, the ICP Postponement and
Subordination Agreement, and the Xxxxxxx Postponement, Subordination and
Assignment Agreement and all other instruments and agreements now or
hereafter securing the whole or any part of the Obligations or the
obligations of McDonald under the McDonald Guarantee.
COLLATERAL EXAMINATION CHARGE has the meaning given to it in Annex D.
COLLATERAL MANAGEMENT FEE has the meaning given to it in Annex D.
COMMITMENT LETTER means the Commitment Letter, dated October 10, 1996
made by GE Capital Canada and agreed to and accepted on behalf of the
Borrower on October 15, 1996, together with the appendix attached thereto.
COMMITMENT TERMINATION DATE means the earliest of:
(a) the third anniversary of the Closing Date;
(b) the date of termination of the Revolving Credit Commitments
pursuant to Section 8.2; and
(c) the date of termination of the Revolving Credit Commitments in
accordance with the provisions of Section 1.4.
COMPLIANCE CERTIFICATE means a certificate in the form attached hereto
as Exhibit A.
CONTAMINANT means any substance, solid, liquid or gaseous matter, fuel
(including, without limitation, petroleum or petroleum products, crude oil,
natural gas, natural gas liquid, liquified natural gas, synthetic fuel or any
combination of the above), microorganism, sound, vibration, ray, heat, odour,
radiation, energy vector, plasma, organic or inorganic matter, whether or not
animate or inanimate, container, transient reaction intermediate, nuclear
material or any combination of the above deemed hazardous, toxic, a
pollutant, a deleterious substance, a hazardous material, a waste, a
hazardous waste, a contaminant or a source of pollution or contamination
under any Environmental Laws or the presence of which in the Environment is
likely to affect adversely the quality of the Environment in any way,
including, without limitation, affecting adversely the life, health, safety,
welfare or comfort of human beings, or causing damage to or otherwise
impairing the quality of the soil, vegetation, wildlife or property.
DEBENTURE means each agreement between each Loan Party and Agent, for
the benefit of Agent and Lenders, in form and substance satisfactory to
Agent, including all amendments, restatements, modifications and supplements
thereto, in form and substance satisfactory to Agent, and shall refer to each
Debenture as the same may be in effect at the time such reference becomes
operative.
DEFAULT means any event which, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
DEFAULT RATE means:
(a) with respect to principal owing on Revolving Credit Advances,
a rate per annum equal to:
(1) two percent (2%),
plus
(2) the rate or rates of interest otherwise in effect
hereunder from time to time therefor; and
(b) with respect to interest on other Obligations (excluding
principal on the Revolving Credit Advances), a rate per annum
equal to:
(1) the Prime Rate in effect from time to time,
plus
(2) two and one quarter (2.25%).
DEPRECIATION AND AMORTIZATION EXPENSE shall mean, with respect to any
fiscal period of Borrower, all depreciation or amortization expenses of
Borrower on a consolidated basis for such period.
DISBURSEMENT ACCOUNTS has the meaning given to it in Annex B.
DISCHARGE means the emission, deposit, issue, discharge, release,
escape, leaching, dispersal, migration, spraying, spill, leakage or seepage
of a Contaminant into the Environment.
EBITDA shall mean, with respect to any fiscal period of Borrower:
(a) Net Income,
plus
(b) Interest Expense to the extent deducted or added in
determining Net Income;
plus
(c) Tax Expense to the extent deducted or added in determining Net
Income;
plus
(d) Depreciation and Amortization Expense to the extent deducted
or added in determining Net Income;
minus
(e) to the extent added in determining Net Income, extraordinary,
nonrecurring or nonoperating gains of Borrower and its
Subsidiaries on a consolidated basis;
plus
(f) to the extent deducted in determining Net Income,
extraordinary, nonrecurring or nonoperating losses of Borrower
and its Subsidiaries on a consolidated basis.
ELIGIBLE ACCOUNT means the gross outstanding balance of Accounts of
each Loan Party denominated in Canadian Dollars or USD, which Agent, in
accordance with Section 1.7, shall from time to time deem eligible, less, all
finance charges, late fees, other fees that are unearned, and all allowances,
rebates and discounts for volume, advertising, defective returns, markdown
allowances, cash payment and booking discounts, credit card payments, for the
account of an Account Debtor, warehouse delivery and booking discounts and
such other amounts as Agent, in its sole discretion, shall from time to time
deem appropriate. Without in any way limiting the discretion given to Agent
hereunder to deem an Account of any Loan Party ineligible or to change the
following eligibility criteria, an Account of any Loan Party shall not be an
Eligible Account if:
(a) (1) such Account is owing by an Account Debtor which is
unable to pay its debts as such debts become due, or
is, or is adjudged or declared to be, or admits to
being, bankrupt or insolvent, or makes, or files a
notice of intention to make, a proposal under any
Insolvency Statute; or
(2) any notice of intention is filed or any voluntary case
or involuntary case or proceeding is commenced under
any Insolvency Statute, or incorporation or other law,
now or hereinafter in effect, for the
(i) bankruptcy, liquidation, windingup,
dissolution or suspension of general
operations of such Account Debtor,
(ii) composition, reorganization, arrangement or
readjustment of, or other relief from, or stay
of proceedings to enforce, some or all of the
debts of such Account Debtor,
(iii) appointment of a trustee, receiver, receiver
and manager, liquidator, custodian or other
similar official for, or for all or a
substantial part of the assets of, such
Account Debtor, or
(iv) possession, foreclosure or retention, or sale
or other disposition of, or other proceedings
to enforce security over, all or a substantial
part of the assets of such Account Debtor;
(b) the Accounts originated outside of Canada;
(c) the Account originated in provinces in which each Loan Party
has not made such filings necessary to enable each Loan Party
to sustain an action for collection;
(d) in the case of an Account subject to a volume rebate, such
Account shall be deemed ineligible to the extent of the amount
of the volume rebate;
(e) the Account is owing by an Affiliate of any Loan Party or by
any other person related to or operating at non-arm's length
to any Loan Party;
(f) the Account is represented by invoices for goods or services
which have not been provided in the ordinary course of
business of any Loan Party;
(g) the Account is due from an obligor whose indebtedness to any
Loan Party exceeds the credit limit specified by such Loan
Party for such obligor;
(h) any warranty, representation or covenant contained in this
Agreement or any of the other Loan Documents applicable either
to Accounts of any Loan Party in general or to any such
specific Account has been breached with respect to such
Account in any material respect;
(i) such Account has remained unpaid after the earlier to occur
of:
(1) 60 days after the date on which payment is specified
to be due in the original applicable invoice, and
(2) 120 days after the date of such original applicable
invoice provided that such period may be up to 150
days after the date of the original applicable invoice
under Borrower's booking program for room air
conditioners, provided in each case that such terms
are consistent with the terms in effect on the date of
this Agreement;
(j) such Account is payable by an Account Debtor which is a
supplier or creditor of any Loan Party to the extent that any
Loan Party is indebted to such Account Debtor;
(k) Accounts represented by invoices for goods or services which
have not been delivered and accepted or fully performed, as
the case may be;
(l) the sale represented by such Account is on a xxxx-and-hold,
undelivered sale, guaranteed sale, sale or return,
consignment, or sale on approval basis;
(m) Agent believes, in its reasonable discretion, that the
collection of such Account is insecure or that such Account
may not be paid;
(n) such Account is subject to any claim by or dispute with the
Account Debtor, to the extent of such claim or dispute;
(o) such Account is subject to any right of setoff by the Account
Debtor, to the extent of such right;
(p) Agent does not have a perfected first ranking Lien in and to
such Account, subject to no Lien other than (1) Prior Claims
(that have not been filed, recorded or registered and in
respect of which no other action has been taken to make the
Prior Claim enforceable by the holder thereof) that secure
amounts that are not yet due and payable and (2) the Xxxxxxx
Xxxx which is subordinated under the Xxxxxxx Postponement,
Subordination and Assignment Agreement;
(q) such Account is not evidenced by an invoice or other writing
in form acceptable to Agent in its reasonable discretion;
(r) such Account is an Account owing by a Governmental Body;
(s) in order to be entitled to collect it, any Loan Party is
required to perform any additional service for, or perform or
incur any additional obligation to, Account Debtor;
(t) such Account is owing by an Account Debtor whose Indebtedness
to any Loan Party on Accounts which are otherwise ineligible
exceeds 50% of such Account Debtor's total Indebtedness to any
Loan Party;
(u) such Account is an Account in respect of which Account Debtor
takes a deduction or credit not authorized or otherwise agreed
to by any Loan Party to the extent of such unauthorized
deduction or credit;
(v) Accounts due from an Account Debtor to the extent that the
Account Debtor's total Indebtedness to the Loan Parties
exceeds 15% of the aggregate amount of all Accounts of the
Loan Parties; or
(w) Accounts due on account of loans or other financial assistance
made or provided by any Loan Party.
ELIGIBLE INVENTORY means such Inventory of any Loan Party that
consists of finished goods and which Agent, in its discretion, shall from
time to time deem eligible. Without in any way limiting the discretion given
to Agent hereunder to deem Inventory of any Loan Party ineligible or to
change the following eligibility criteria, Inventory of any Loan Party shall
not be Eligible Inventory if:
(a) it is placed by any Loan Party on consignment or held by any
Loan Party on consignment from another Person;
(b) it is Inventory not located in the Provinces of Quebec or
Ontario;
(c) it is Inventory in transit;
(d) it is Inventory held on or at any leased premises unless:
(1) the Inventory at any one location has a value of more
than $50,000,
(2) the Inventory is identifiable as a Loan Party's
Inventory, and
(3) the landlord of such premises has executed a landlord
agreement, in form and substance satisfactory to Agent
and that remains effective at all times;
(e) it is Inventory in the possession or control of a bailee,
warehouseman, processor, converter, finisher or other Person
other than any Loan Party, unless:
(1) the Inventory at any one location has a value of more
than $50,000,
(2) the Inventory is identifiable as a Loan Party's
Inventory, and
(3) Agent is in possession of such agreements, instruments
and documents as Agent may require (each in form and
content acceptable to Agent and duly executed, as
appropriate by the bailee, warehouseman, processor,
converter or other Person in possession or control of
such Inventory, as applicable) including warehouse
receipts in Agent's name covering such Inventory;
(f) it is not insured in accordance with insurance requirements of
Annex F;
(g) Agent does not have a perfected first ranking Lien in and to
such Inventory, subject to no prior ranking Lien other than
(1) Prior Claims (that have not been filed, recorded or
registered and in respect of which no other action has been
taken to make the Prior Claim enforceable by the holder
thereof) that secure amounts that are not yet due and payable
and (2) the Xxxxxxx Xxxx which is subordinated under the
Xxxxxxx Postponement, Subordination and Assignment Agreement;
(h) it does not meet all standards imposed by any Applicable Law
or promulgated by any Governmental Body including, without
limitation, all Applicable Laws governing product labelling,
care labelling and country of origin labelling;
(i) it is not owned by any Loan Party free and clear of all Liens
and rights of others, except (1) first priority Liens in
favour of Agent, (2) Prior Claims (that have not been filed,
recorded or registered and in respect of which no other action
has been taken to make the Prior Claim enforceable by the
holder thereof) that secure amounts that are not yet due and
payable and (3) and the Xxxxxxx Xxxx which is subordinated
under the Xxxxxxx Postponement, Subordination and Assignment
Agreement;
(j) it in any material respect fails to meet or violates any
warranty, representation or covenant contained in this
Agreement or any other Loan Document;
(k) it is Inventory in respect of which any Loan Party does not
maintain adequate records satisfactory to Agent;
(l) it is not sold in the ordinary course of a Loan Party's
business;
(m) it consists of display items, samples, packaging and shipping
materials, defective goods or goods which have been returned
by buyers;
(n) it is covered by a negotiable document of title which has not
been delivered to Agent on terms satisfactory to Agent;
(o) such Inventory is subject to a distribution agreement, licence
or similar agreement with a third party which could restrict
Agent, Lenders and/or their agents from exercising their
rights and remedies in respect of such Inventory and Agent
does not hold an agreement duly executed by such third party
and in form and substance satisfactory to Agent under which
that third party consents to Agent, Lenders and/or their
agents exercising Agent's and Lenders' rights and remedies
under the Collateral Documents in respect of such Inventory;
or
(p) it is not otherwise acceptable to Agent in its reasonable
credit judgment.
EMERSON means Xxxxxxx Electric Co., a corporation formed and existing
under the laws of the State of Missouri.
EMERSON GUARANTEE means the guarantee agreement dated as of December
19, 1996 executed by Borrower in favour of Emerson in respect of the
indebtedness, liabilities and obligations of ICP
under a reimbursement agreement dated as of December 19, 1996 executed by ICP
in favour of Xxxxxxx and shall refer to the Xxxxxxx Guarantee, as the same
may be in effect at the time such reference becomes operative.
XXXXXXX INDEBTEDNESS means all debts, liabilities and obligations of
Borrower to Xxxxxxx under the Xxxxxxx Guarantee.
XXXXXXX XXXX means the second ranking Lien, subordinated to the Lien
of the Agent and the Lenders constituted by the Loan Documents as provided in
the Xxxxxxx Postponement, Subordination and Assignment Agreement, in all
Collateral of Borrower to secure the Xxxxxxx Indebtedness.
XXXXXXX POSTPONEMENT, SUBORDINATION AND ASSIGNMENT AGREEMENT means the
agreement dated as of December 19, 1996 between Xxxxxxx, Agent, Borrower and
ICP, including all restatements, amendments, modifications and supplements
thereto, postponing the Xxxxxxx Indebtedness to the Obligations,
subordinating the security for the Xxxxxxx Indebtedness to the security for
the Obligations and assigning the Xxxxxxx Indebtedness and the security
therefor to the Agent, for the benefit of Agent and Lenders, as security for
the Obligations, and shall refer to the Xxxxxxx Postponement, Subordination
and Assignment Agreement as the same may be in effect at the time such
reference becomes operative.
ENVIRONMENT means all components of the Earth, including, all layers
of the atmosphere, air, land (including, all underground spaces and cavities
and all land submerged under water), soil, water (including surface and
underground water), all organic and inorganic matter and living organisms,
animal life, vegetation, and the interacting natural systems that include
components referred to above in this definition.
ENVIRONMENTAL ACTIVITY means any past, present or future activity,
event or circumstance in respect of a Contaminant (including, without
limitation, its storage, holding, collection, purchase, accumulation,
assessment, generation, manufacture, construction, processing, treatment,
stabilization, disposition, handling, transportation, deposit, recycling,
elimination, sale, distribution, import or export or its Discharge into the
Environment) or which is otherwise regulated by Environmental Laws.
ENVIRONMENTAL ASSESSMENT means an environmental audit conducted by a
Person approved in writing by Agent in respect of any or all of the
Facilities.
ENVIRONMENTAL LAWS means all applicable federal, state, provincial,
national, and local laws, including treaties, statutes, regulations,
directives, ordinances, codes, orders, rules, subordinate legislation,
Governmental Approvals and other governmental actions, restrictions and
requirements, and all judgments, orders, instructions and awards of any court
of competent
authority and all codes of practice and guidance, from time to time, having
the force of law, relating to environmental matters (including Environmental
Activities or occupational health and safety), including, the Environmental
Protection Act (Ontario), the Occupational Health and Safety Act (Ontario),
the Canadian Environmental Protection Act (Canada), the Fisheries Act
(Canada), the Transportation of Dangerous Goods Act (Canada) and the
Hazardous Materials Information Review Act (Canada), all as amended, and
includes all regulations made under such statutes.
EQUIPMENT means all equipment as such term is defined in the PPSA
(Ontario), and, in any event, shall include all machinery, equipment,
furnishings, fixtures and vehicles and any and all additions, accessions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
EQUIVALENT AMOUNT means, on any date, with respect to obligations or
valuations denominated in one currency (the "First Currency") the amount of
the First Currency which is required to purchase a fixed amount in another
currency (the "Other Currency") on any Business Day at the 12:00 noon rate
quoted on Telerate News Service (Page 3194 or such other Page as may replace
such Page on such Screen for the purpose of displaying currency exchange
rates) on the Business Day immediately preceding such date of determination,
or at such other rate as may have been agreed in writing between Borrower and
Agent.
ERISA means the United States Employee Retirement Income Security Act
of 1974 (or any successor legislation thereto), as amended from time to time,
and any regulations promulgated thereunder.
EVENT OF DEFAULT has the meaning given to it in Section 8.1.
EXISTING CREDIT AGREEMENTS means the loan agreement between Borrower
and The Toronto-Dominion Bank dated as of March 19, 1990 as amended by
amending agreements dated as of December 23, 1992, March 11, 1993, March 22,
1994, March 31, 1995 and letter agreements dated February 21, 1996 and
February 22, 1996 as further amended by an amending agreement made as of July
19, 1996 and the letter loan agreement between X.X.XxXxxxxx Supply Limited
and The Toronto-Dominion Bank dated February 25, 1995.
FACILITIES means the moveable, personal, immoveable and real
properties (including buildings, equipment, machinery and lands) from time to
time, owned, leased, managed, controlled or operated by Borrower or any of
its Subsidiaries.
FEES means the fees due to Agent and Lenders as set forth in Annex D,
and any other fees due to Agent or Lenders pursuant to the Loan Documents.
FINANCIALS means the financial statements referred to in Section 3.4.
FISCAL MONTH means each of the monthly accounting periods adopted by
Borrower before the Closing Date.
FISCAL QUARTER means each of four consecutive accounting periods in
each Fiscal Year consisting of three Fiscal Months.
FISCAL YEAR shall mean the annual accounting period ending on December
31 in each year.
GAAP means, subject to Section 2.(a) of this Annex A, with respect to
each Loan Party, generally accepted accounting principles in Canada in effect
from time to time, applied on a consistent basis.
GE CAPITAL means General Electric Capital Corporation, a corporation
organized under the banking laws of the State of New York.
GE CAPITAL CANADA means General Electric Capital Canada Inc., a Canada
corporation, having an office at 0000 Xxxxxxxxxx Xxxx., Xxxxxxxxxxx, Xxxxxxx,
X0X0X0.
GE RATE with respect to any calendar month means the rate of exchange
announced by GE Capital Canada to its customers before the beginning of such
calendar month as the rate of exchange GE Capital Canada will use throughout
such calendar month to convert USD to Cdn$.
GENERAL ASSIGNMENT OF BOOK DEBTS means each general assignment of
debts to be executed by each Loan Party in favour of Agent, for the benefit
of Agent and Lenders, in form and substance satisfactory to Agent, including
all restatements, amendments, modifications and supplements thereto, in form
and substance satisfactory to Agent, and shall refer to each General
Assignment of Book Debts as the same may be in effect at the time such
reference becomes operative.
GOVERNMENTAL APPROVAL means any authorization, certificate,
attestation, permit, approval, grant, licence, consent, right, privilege,
registration, filing, commitment, order, judgment, direction, ordinance or
decree issued or granted by or under law or by any Governmental Body as well
as any acquired or vested right required or recognized pursuant to
Environmental Laws.
GOVERNMENTAL BODY means any government, parliament, legislature,
regulatory authority, agency, tribunal, department, commission, board,
arbitrator or panel of arbitrators or court or other law, regulation or rule
making entity (including a Minister of the Crown), having or purporting to
have jurisdiction on behalf of any nation, state, province, municipality or
district, or any subdivision thereof.
GUARANTEED INDEBTEDNESS means, as to any Person, any obligation of
such Person guaranteeing any indebtedness, lease, dividend, or other
obligation ("primary obligation") of any other Person (the "primary obligor")
in any manner, including any obligation or arrangement of such Person:
(a) to purchase or repurchase any such primary obligation;
(b) to advance or supply funds:
(1) for the purchase or payment of any such primary
obligation, or
(2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet condition of the
primary obligor;
(c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such
primary obligation; or
(d) to indemnify the owner of such primary obligation against loss
in respect thereof.
The amount of any Guaranteed Indebtedness at any time shall be deemed to be
an amount equal to the lesser at such time of (x) the stated or determinable
amount of the primary obligation in respect of which such Guaranteed
Indebtedness is made or (y) the maximum amount for which such Person may be
liable pursuant to the terms of the instrument embodying such Guaranteed
Indebtedness; or, if not stated or determinable, the maximum reasonably
anticipated liability (assuming full performance) in respect thereof.
HYPOTHEC means the hypothec to be executed by each Loan Party, Agent
and Lenders in favour of Lenders, including all restatements, amendments,
modifications and supplements thereto, and shall refer to each Hypothec, as
the same may be in effect at the time such reference becomes operative.
ICP means InterCity Products Corporation, a corporation incorporated
and subsisting under the laws of Canada.
ICP (USA) means InterCity Products Corporation (USA), a corporation
formed under the laws of the State of Delaware.
ICP (USA) ACKNOWLEDGEMENT AND CONSENT means the acknowledgement and
consent dated as of December 19, 1996 between ICP (USA) and Agent, for the
benefit of Agent and Lenders, with respect to the Intellectual Property owned
by ICP (USA) including all restatements, amendments, modifications and
supplements thereto, and shall refer to the ICP (USA) Acknowledgement and
Consent, as the same may be in effect at the time such reference becomes
operative.
ICP INDEBTEDNESS means the Indebtedness advanced to Borrower by ICP in
an amount not less than $37,900,000 and subordinated on terms set out in the
ICP Postponement and Subordination Agreement.
ICP POSTPONEMENT AND SUBORDINATION AGREEMENT means the postponement
and subordination agreement dated as of December 19, 1996 between ICP and
Agent postponing and subordinating the ICP Indebtedness to the Obligations,
including all restatements, amendments, modifications and supplements
thereto, and shall refer to the ICP Postponement and Subordination Agreement,
as the same may be in effect at the time such reference becomes operative.
INDEBTEDNESS of any Person means:
(a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services payment for
which is deferred six (6) months or more, but excluding
obligations to trade creditors incurred in the ordinary course
of business that are not overdue by more than six (6) months
unless being contested in good faith, (including reimbursement
and all other obligations with respect to surety bonds,
letters of credit and bankers' acceptances, whether or not
matured, but not including obligations to trade creditors
incurred in the ordinary course of business);
(b) all obligations evidenced by notes, bonds, debentures or
similar instruments;
(c) all indebtedness created or arising under any conditional sale
or other title retention agreements with respect to property
acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property);
(d) all Capital Lease Obligations;
(e) all Guaranteed Indebtedness;
(f) all Indebtedness referred to in clause (a), (b), (c), (d) or
(e) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien upon or in property (including
accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the
payment of such Indebtedness; and
(g) in respect of the Borrower, the Obligations.
INDEMNIFIED PERSON has the meaning given to it in Section 1.16.
INSOLVENCY STATUTE means either of the Bankruptcy and Insolvency Act
(Canada) or the Companies' Creditors Arrangement Act (Canada), each as now
and hereafter in effect, any successors to such statutes and any other
applicable insolvency or other similar law of any jurisdiction.
INSTRUMENTS means all "instruments", as such term is defined in the
PPSA (Ontario), now owned or hereafter acquired by Borrower, wherever
located.
INTELLECTUAL PROPERTY means, all intellectual and industrial property,
including, without limitation, all patents, industrial designs, copyrights,
trademarks, trade names, trade secrets, and options and rights to use any of
the foregoing and, when the context permits, all registrations and
applications that have been made or shall be made or filed in any office in
any jurisdiction in respect of the foregoing, and all reissues, extensions
and renewals thereof.
INTELLECTUAL PROPERTY SECURITY AGREEMENT means each agreement between
each Loan Party and Agent, for the benefit of Agent and Lenders, in form and
substance satisfactory to Agent, including all amendments, restatements,
modifications and supplements thereto, in form and substance satisfactory to
Agent, and shall refer to each Intellectual Property Security Agreement as
the same may be in effect at the time such reference becomes operative.
INTEREST EXPENSE shall mean with respect to any fiscal period of
Borrower, interest expense of Borrower on a consolidated basis for such
period, including amortization of original issue discount on any Indebtedness
and of all fees payable in connection with the incurrence of such
Indebtedness other than the Obligations, including, without limitation, the
interest portion of any deferred payment obligation and the interest
component of any Capital Lease Obligation.
INTEREST PERIOD means with respect to any BA Rate Loan bearing
interest at a fixed rate, a period of 30, 60 or 90 days commencing on the day
of the month specified by Borrower in its Notice of Revolving Credit Advance,
Notice of Rollover or Notice of Conversion with respect to such BA Rate Loan
delivered to Agent in accordance with Section 2.2.
INVENTORY means, as to any Person, all goods, wares and merchandise
manufactured, produced or purchased for resale or lease by such Person, and
all goods, wares and merchandise used in or procured for the packing or
packaging of goods, wares and merchandise so manufactured, produced or
purchased for resale or lease.
INVESTMENT means, for any Person:
(a) the acquisition (whether for cash, property, services or
securities or otherwise) of shares, bonds, notes, debentures,
partnership or other debt instruments or ownership interests
or other securities of any other Person or any agreement to
make any such acquisition;
(b) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the
purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell
such property to such Person); and
(c) the entering into of any Guaranteed Indebtedness of, or other
contingent obligation with respect to, Indebtedness or other
liability of any other Person and (without duplication) any
amount committed to be advanced, lent or extended to such
Person.
ITA means the Income Tax Act (Canada), as amended, and any successor
thereto, and any regulations promulgated thereunder.
JUDGMENT CONVERSION DATE has the meaning given to it in Section 11.8.
JUDGMENT CURRENCY has the meaning given to it in Section 11.8.
LEASES means all of those leasehold estates in real property now owned
or hereafter acquired by any Loan Party, as lessee or sublessee.
LENDER and LENDERS have the meanings provided in the first paragraph
of this Agreement.
LICENCE AGREEMENTS means all agreements pursuant to which a Loan Party
has obtained rights or an option to acquire rights or has granted to a Person
rights or an option to acquire rights to use any Intellectual Property owned
by a Person or a Loan Party, respectively.
LIEN means any mortgage, deed to secure debt or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement, deemed trust, garnishment rights or preferential arrangement of
any kind or nature whatsoever (including any lease or title retention
agreement, any financing lease having substantially the same economic effect
as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Applicable Laws
of any jurisdiction) whether or not filed, recorded or otherwise perfected
under such Applicable Laws.
LOAN DOCUMENTS mean this Agreement, the Revolving Credit Notes, the
Collateral Documents and all agreements, instruments, documents and
certificates in favour of Agent and/or Lenders executed in connection with
the transactions contemplated by this Agreement, including, without
limitation, those that are identified in the Schedule of Closing Documents
attached as Annex C, and including all other pledges, powers of attorney,
consents, assignments, contracts, notices, and
other written matter whether heretofore, now or hereafter executed by or on
behalf of any Loan Party and delivered to Agent and/or Lenders in connection
with this Agreement or the financing transactions contemplated hereby.
LOAN PARTY means Borrower or McDonald.
LOCK BOX has the meaning given to it in Annex B.
MATERIAL ADVERSE EFFECT means:
(a) a material adverse effect on:
(1) the business, assets, operations, prospects, or
financial or other condition of any Loan Party or the
industry within which any Loan Party operates other
than a material adverse effect generally affecting
such industry,
(2) Borrower's ability to pay or perform the Obligations
in accordance with the terms thereof or any other Loan
Party's ability to perform its obligations under any
Loan Document to which it is a party,
(3) the Collateral or Agent's or Lenders' Liens on the
Collateral or the priority of any such Liens, or
(4) the rights and remedies of Agent and Lenders under
this Agreement and the other Loan Documents; or
(b) the incurrence by any Loan Party of any liability, contingent
or liquidated, that has an actual or estimated incurrence of
liability, or exposure or loss, greater than $1,500,000 as of
any date of determination or the Equivalent Amount thereof
(net of any tax effect) to any Loan Party.
MATERIAL CONTRACT means each contract to which any Loan Party is now
or hereafter a party which:
(a) involves aggregate consideration payable to or by any Loan
Party, contingent or otherwise, in excess of $250,000 payable
in any five year period, or the Equivalent Amount thereof,
except contracts as to which the remaining consideration
payable to or by any Loan Party is less than $250,000 payable
in any five year period, or the Equivalent Amount thereof; or
(b) is otherwise material to the business or operations of any
Loan Party.
MAXIMUM REVOLVING CREDIT COMMITMENT means, on any date, an amount
equal to $30,000,000, as reduced or terminated in accordance with the terms
of this Agreement.
MCDONALD means X.X.XxXxxxxx Supply Limited, a corporation formed and
subsisting under the laws of the Province of Ontario.
MCDONALD GUARANTEE means the guarantee agreement to be executed by
McDonald in favour of Agent, for the benefit of Agent and Lenders, including
all restatements, amendments, modifications and supplements thereto, and
shall refer to the McDonald Guarantee, as the same may be in effect at the
time such reference becomes operative.
NET INCOME shall mean, with respect to any fiscal period of Borrower,
the aggregate net income (or loss) of Borrower on a consolidated basis from
continuing operations for such period.
NET PROCEEDS means (a) with respect to any asset disposition (other
than sales of Inventory of any Loan Party in the ordinary course of business
which shall be subject to the cash management system required under Section
1.9) permitted by Section 6.8 ("Asset Disposition"), the sum of cash or
readily marketable cash equivalents received (including by way of a cash
generating sale or discounting of a note or receivable, but excluding any
other consideration received in the form of assumption by the acquiring
Person of debt or other obligations relating to the assets so disposed of or
received in any other noncash form) therefrom, whether at the time of such
disposition or subsequent thereto, or (b) with respect to any sale or
issuance of any Stock of any Loan Party after the Closing Date, cash or
readily marketable cash equivalents received (but excluding any other noncash
form) therefrom, whether at the time of such disposition or subsequent
thereto, net, in either (a) or (b) above, of all legal, title and recording
tax expenses, underwriting discounts, commissions and other reasonable fees,
costs and expenses incurred and all Taxes required to be accrued as a
liability as a consequence of such transactions and, in the case of an Asset
Disposition, net of all payments made on any Indebtedness which is secured by
such assets pursuant to a permitted Lien upon or with respect to such assets
or which must by the terms of such Lien, or in order to obtain a necessary
consent to such Asset Disposition, or by Applicable Law, be repaid out of the
proceeds from such Asset Disposition.
NON-FUNDING LENDER has the meaning given to it in Section 9.11.
NON-USE FEE has the meaning given to it in Annex D.
NOTICE OF CONVERSION has the meaning given to it in Section 1.3.
NOTICE OF REVOLVING CREDIT ADVANCE has the meaning given to it in
Section 1.1(b).
NOTICE OF ROLLOVER has the meaning given to it in Section 1.2.
OBLIGATIONS means all loans, advances, debts, liabilities and
obligations for the performance of covenants, tasks or duties or for payment
of monetary amounts (whether or not such performance
is then required or contingent, or amounts are liquidated or determinable)
owing by one or more Loan Parties to Agent or any Lender, and all covenants
and duties regarding such amounts, of any kind or nature, present or future,
whether or not evidenced by any note, agreement or other instrument, arising
under any of the Loan Documents. This term includes all principal, interest
(including interest which accrues after the commencement of any case or
proceeding referred to in Section 8.1(h) or 8.1(i)), all Fees, Charges,
Claims, expenses, counsel fees and any other sum chargeable to Borrower or
any other Loan Party under any of the Loan Documents.
OTHER LENDER has the meaning given to it in Section 9.11.
PAYOR has the meaning given to it in Section 1.13.
PBGC means the Pension Benefit Guaranty Corporation or any successor
thereto.
PERMITTED ENCUMBRANCES means the following encumbrances:
(a) Liens for Taxes (that have not been filed, recorded or
registered and in respect of which no other action has been
taken to make the Lien enforceable by the holder thereof)
either not yet due and payable or to the extent that
nonpayment thereof is permitted by the terms of Section 5.2 of
this Agreement;
(b) Liens (that have not been filed, recorded or registered and in
respect of which no other action has been taken to make the
Lien enforceable by the holder thereof) securing obligations
not yet due and payable under unemployment insurance, workers'
compensation or similar legislation;
(c) pledges or deposits securing bids, tenders, contracts (other
than contracts for the payment of money) or leases to which
any Loan Party is a party as lessee made in the ordinary
course of business;
(d) deposits or other security securing public or statutory
obligations of any Loan Party, or given to a public utility or
any governmental or public authority when required in
connection with the operations of any Loan Party;
(e) inchoate or statutory workers', mechanics', suppliers',
construction or similar liens arising in the ordinary course
of business; provided, that such liens are not registered
against the title to any real or personal property or are
being contested in good faith by appropriate proceedings and
in respect of which there shall have been set aside a reserve
(segregated to the extent required by GAAP) in an amount which
is reasonably adequate with respect thereto;
(f) carriers', warehousemen's or other similar possessory liens
arising in the ordinary course of business and securing
Indebtedness not yet due and payable in an outstanding
aggregate amount not in excess of $50,000, at any time;
(g) easements, servitudes, rights of way, licences, encroachments,
restrictions, agreements, notices, orders, deposits, covenants
and other rights in real property, statutory exceptions to
title, reservations, limitations, provisions and conditions,
if any, expressed in any original grant from the Crown or
zoning or other restrictions on the use of real property or
other minor defects or irregularities in title (including
leasehold title) thereto, so long as the same do not
materially impair the use, value or marketability of such real
property, leases or leasehold estates;
(h) any applicable municipal bylaws, regulations or ordinances and
any registered restrictions in each case applicable to the
zoning or use of any real property;
(i) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Loan Party is a party;
(j) any attachment or judgment lien which does not cause a Default
or Event of Default under Section 8.1(j);
(k) the Xxxxxxx Xxxx;
(l) Liens arising under the Loan Documents or any other security
in favour of Agent or the Lenders;
(m) the Liens listed in Schedule 6.7 hereto; and
(n) any right of expropriation, access or use or similar rights
conferred or reserved by or in any statute, laws or
regulations or other governmental enactments;
PERSON means any individual, sole proprietorship, partnership, joint
venture, trust, trustee, executor, administrator or other legal
representative, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or Governmental Body.
PPSA (ONTARIO) means the Personal Property Security Act (Ontario) as
the same may, from time to time, be in effect in the Province of Ontario.
PRIME RATE means, at any date, the greater of:
(a) the annual rate of interest determined by Agent which is equal
to the then current highest annual prime rate of interest
announced from time to time by any of The Bank of Nova Scotia,
Royal Bank of Canada and Canadian Imperial Bank of Commerce,
as being its reference rate in effect on such date (or if such
date is not a Business Day, on the Business Day immediately
preceding such date) for determining interest rates on
Canadian Dollar denominated commercial
loans made by it in Canada (commonly referred to by each bank
as its "prime rate"), in each case regardless of whether any
of such banks actually charges such rate of interest in
connection with extensions of credit in Canadian dollars to
debtors; and
(b) the BA Rate in respect of an Interest Period of thirty (30)
days starting on such date plus one (1%) percent.
PRIME RATE LOAN means a loan that bears interest at a rate based on
the Prime Rate.
PRIOR CLAIMS means, at any time, all Liens created by Applicable Laws
which rank, or are capable of ranking, prior to or pari passu with Agent's
security against all or part of the Collateral including, without limitation,
for amounts owing for wages, employee deductions, goods and services taxes,
sales taxes, income taxes, employer health taxes, municipal taxes, workers'
compensation, government royalties, pension fund obligations and overdue
rents.
PROJECTIONS means the projections referred to in paragraph 2 of
Schedule 3.4 and any other projections required to be delivered by Borrower
to Agent or any Lender under this Agreement.
PURCHASE-MONEY INDEBTEDNESS means, with respect to any Person, all
obligations of such Person:
(a) consisting of the deferred purchase price of any property,
conditional sale obligations, obligations under any title
retention agreement (but excluding trade accounts payable
arising in the ordinary course of business) and other purchase
money obligations, in each case, where the maturity of such
obligation does not exceed the anticipated useful life of the
property being financed; and
(b) incurred to finance the acquisition or construction of such
property, including additions and improvements;
provided, however, any Lien arising in connection with any such Indebtedness
shall be limited to the specified asset being financed, including additions
or improvements to such asset.
REAL PROPERTY has the meaning given to it in Section 3.6.
RELATED TRANSACTIONS means the initial Revolving Credit Advance, the
repayment of all obligations under the Existing Credit Agreements, the
payment of all Fees, costs and expenses associated with the foregoing and the
execution and delivery of all agreements and documents necessary to
consummate all such transactions.
REGULATORY CHANGE means, with respect to any Lender, any change after
the date of this Agreement in Applicable Law or the adoption or making after
such date of any interpretation,
directive or request applying to a class of lenders including such Lender of
or under any Applicable Law (whether or not failure to comply therewith would
be unlawful) by any court or Governmental Body or monetary authority charged
with the interpretation or administration thereof.
RELATIONSHIP BANKS has the meaning given to it in Annex B.
REQUIRED LENDERS means, at any time, Lenders holding more than 50% of
the aggregate of the Revolving Credit Commitments of all Lenders at such time
(or, if the Commitment Termination Date has occurred, in lieu of the
Revolving Credit Commitments, the Revolving Credit Loan then outstanding).
REQUIRED PAYMENT has the meaning given to it in Section 1.13.
RESTRICTED PAYMENT means, with respect to any Person:
(a) the declaration or payment of any dividend or the occurrence
of any liability to make any other payment or distribution of
cash or other property or assets in respect of such Person's
Stock;
(b) any payment on account of the purchase, redemption, defeasance
or other retirement of such Person's Stock or any other
payment or distribution made in respect thereof, either
directly or indirectly;
(c) any payment, loan, contribution, or other transfer of funds or
other property to any holder of Stock of such Person;
(d) any payment, purchase, redemption, retirement or other
acquisition for value or setting apart of any money for a
sinking or other analogous fund for the purchase, redemption,
retirement or other acquisition of, or to obtain the surrender
of, or any payment (scheduled, voluntary or other) of
principal of or interest on, or any other amount owing in
respect of Indebtedness; or
(e) any payment of a claim for the rescission of the purchase or
sale of, or for material damages arising from the purchase or
sale of any Stock of such Person, or of a claim for
indemnification or contribution arising out of or relating to
any such claim for damages or rescission.
REVOLVING CREDIT ADVANCE has the meaning given to it in Section
1.1(a).
REVOLVING CREDIT AVAILABILITY means, at any time, the amount equal to:
(a) the lesser of:
(1) the Borrowing Base at such time, and
(2) the Maximum Revolving Credit Commitment at such time;
minus
(b) the Revolving Credit Loan at such time.
REVOLVING CREDIT COMMITMENT means, as to each Lender, the commitment
of such Lender to make Revolving Credit Advances to Borrower pursuant to
Section 1.1 in the aggregate principal amount outstanding not to exceed the
amount set forth opposite such Lender's name on the signature pages of this
Agreement or specified in any amendment hereto or any assignment hereof
pursuant to Section 10.2 hereof, as such amount may be reduced or terminated
in accordance with the terms of this Agreement.
REVOLVING CREDIT LOAN means, at any time, an amount equal to the
aggregate of the principal amount of Revolving Credit Advances outstanding at
such time.
REVOLVING CREDIT NOTES means the promissory notes provided for by
Section 1.1(d) and all promissory notes delivered in substitution or exchange
therefor, in each case as the same may be restated, amended, modified and
supplemented and in effect from time to time.
ROLLING PERIOD shall mean, as of the end of any Fiscal Quarter of
Borrower, the immediately preceding four Fiscal Quarters, including the
Fiscal Quarter then ending.
SECURITY AGREEMENT means each general security agreement to be
executed by each Loan Party in favour of Agent, for the benefit of Agent and
Lenders, including all restatements, amendments, modifications and
supplements thereto, and shall refer to such Security Agreement, as the same
may be in effect at the time such reference becomes operative.
SHAREHOLDERS EQUITY means, at any time, the shareholders equity of
Borrower and its Subsidiaries on a consolidated basis, determined in
accordance with GAAP.
STOCK means all shares, options, warrants, general or limited
partnership interests, participation or other equivalents (regardless of how
designated) of or in a corporation, partnership or equivalent entity, whether
voting or non voting.
SUBSIDIARY means, with respect to any Person:
(a) any corporation of which an aggregate of more than 50% of the
outstanding Stock having ordinary voting power to elect a
majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other
class or classes of such corporation shall
have or might have voting power by reason of the happening of
any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person and/or one or more
Subsidiaries of such Person, or with respect to which any such
Person has the right to vote or designate the vote of more
than 50% of such Stock whether by proxy, agreement, operation
of law or otherwise; and
(b) any partnership in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in
the form of voting or participation in profits or capital
contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general
partner.
SUPPLIER WAIVER AND ASSIGNMENT means each agreement to be executed by
each Affiliate supplier of a Loan Party (other than another Loan Party) in
favour of Agent in respect of the Affiliates rights under Section 81.1 of the
Bankruptcy and Insolvency Act (Canada) or similar Applicable Laws, for the
benefit of Agent and Lenders, substantially in the form of Exhibit D,
including all amendments, restatements, modifications and supplements
thereto, in form and substance satisfactory to Agent, and shall refer to each
Supplier Waiver and Assignment as the same may be in effect at the time such
reference becomes operative.
TANGIBLE NET WORTH means the aggregate of Shareholders Equity,
retained earnings and the principal amount of the ICP Indebtedness, minus
intangible assets.
TAX EXPENSE shall mean, with respect to any fiscal period of Borrower,
provision for Taxes (excluding sales, use or like taxes) of Borrower on a
consolidated basis for such period.
TAX and TAXES includes all present and future taxes, surtaxes, duties,
levies, imposts, rates, fees, assessments, withholdings and other charges of
any nature (including income, corporate, capital (including large
corporations), net worth, sales, consumption, use, transfer, goods and
services, value-added, stamp, registration, franchise, withholding, payroll,
employment, health, education, excise, business, school, property,
occupation, customs, anti-dumping and countervail taxes, surtaxes, duties,
levies, imports, rates, fees, assessments, withholdings and other charges)
imposed by any Governmental Body, together with any fines, interest,
penalties or other additions on, to, in lieu of, for non-collection of or in
respect of those taxes, surtaxes, duties, levies, imposts, rates, fees,
assessments, withholdings and other charges.
TAX RETURNS means all reports, estimates, information statements and
returns relating to, or required to be filed in connection with, any Taxes
pursuant to the statutes, laws, rules and regulations of any federal,
provincial, state, municipal or foreign governmental taxing authority and
"Tax Return" shall mean any one thereof.
TERMINATION DATE means the date on which:
(a) the Revolving Credit Commitments have been terminated in full,
and Lenders shall have no further obligation to make any
credit extensions or financial accommodations hereunder; and
(b) all Obligations have been indefeasibly paid in full in
immediately available funds.
TERMINATION FEE has the meaning given to it in Annex D.
UNDERTAKING means the business, undertaking and operations of Borrower
and its Subsidiaries and of their predecessors in title.
USD means lawful money of the United States of America.
WEEKLY SETTLEMENT DATE has the meaning given to it in Section 9.12(c).
2. Certain Matters of Construction.
(a) Any accounting term used in the Agreement or the other Loan
Documents shall have, unless otherwise specifically provided therein, the
meaning customarily given such term in accordance with GAAP, and all
financial computations shall be computed on a consolidated basis in
accordance with GAAP consistently applied. That certain items or
computations are explicitly modified by the phrase "in accordance with GAAP"
shall in no way be construed to limit the foregoing. If any "Accounting
Changes" (as defined below) occur and such changes result in a change in the
standards or terms used in this Agreement, then Borrower, Lenders and Agent
agree to enter into negotiations in order to amend such provisions of this
Agreement so as equitably to reflect such Accounting Changes with the desired
result that the criteria for evaluating Borrower's financial condition shall
be the same after giving effect to such Accounting Changes as if such
Accounting Changes had not been made. "Accounting Changes" means:
(1) changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the
Canadian Institute of Chartered Accountants (or successor
thereto or any agency with similar functions), and
(2) changes in accounting principles concurred in by Borrower's
Accountants.
If the parties to this Agreement shall have agreed upon any such required
amendment, then, after such amendment has been evidenced in writing and the
underlying Accounting Change with respect thereto has been implemented, any
reference to GAAP contained in this Agreement shall, only to the extent of
such Accounting Change, refer to GAAP, consistently applied after giving
effect to the implementation of such Accounting Change. If the parties to
this Agreement cannot agree upon any required amendment within thirty (30)
days following the date of implementation of any Accounting Change, then all
financial statements delivered in accordance with Annex E
to this Agreement and all standards, terms and covenants used in this
Agreement shall be prepared, used and calculated without regard to the
underlying Accounting Change, except that the annual audited financial
statements of the Borrower and its Subsidiaries may be prepared giving effect
to the Accounting Change provided that it is accompanied by a report of the
Auditors, in form and substance acceptable to the Agent, indicating
appropriate adjustments to be made to the annual financial statements if such
statements were to disregard the Accounting Change.
(b) Unless otherwise specified, all references to dollar amounts
in this Agreement or the other Loan Documents shall mean Canadian Dollars.
(c) Unless otherwise specified, any reference to a time of day
means local time in the City of Toronto, Province of Ontario, Canada.
(d) The words "herein", "hereof" and "hereunder" or other words of
similar import refer to this Agreement as a whole, including the annexes,
exhibits and schedules hereto, as the same may from time to time be restated,
amended, modified or supplemented, and not to any particular section,
subsection or clause contained in this Agreement.
(e) For purposes of this Agreement and the other Loan Documents,
the following additional rules of construction shall apply:
(1) wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the
singular and the plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, the
feminine and the neuter;
(2) the term "including" shall not be limiting or exclusive,
unless specifically indicated to the contrary;
(3) all references to statutes and related regulations shall
include any amendments of same and any successor statutes and
regulations; and
(4) all references to any instruments or agreements, including
references to any of the Loan Documents, shall include any and
all modifications thereto and any and all extensions or
renewals thereof.
Annex B to Credit Agreement
CASH MANAGEMENT SYSTEM
Each Loan Party shall, and shall cause its Subsidiaries to, establish
and maintain the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination Date,
each Loan Party shall (i) establish lock boxes ("Lock Boxes") at one or more
of the banks set forth on Attachment I and shall request in writing and
otherwise take such reasonable steps to ensure that all Account Debtors
forward payment directly to such Lock Boxes, and (ii) deposit and cause its
Subsidiaries to deposit or cause to be deposited promptly, and in any event
no later than the second Business Day after the date of receipt thereof, all
cash, cheques, notes, drafts, electronic funds remittances or other similar
items of payment relating to or constituting payments made in respect of any
and all Collateral (whether or not otherwise delivered to a Lock Box) into
bank accounts in such Loan Party's name or any such Subsidiary's name
(collectively, the "Blocked Accounts") at banks set forth on Attachment I
(each, a "Relationship Bank"). On or before the Closing Date, each Loan
Party shall have established a concentration account in its name (the
"Blocked Concentration Account") at the bank which shall be designated as the
Blocked Concentration Account bank for such Loan Party on Attachment I (the
"Blocked Concentration Account Bank") which bank shall be satisfactory to
Agent.
(b) On or before the Closing Date (or such later date as Agent
shall consent to in writing), the Blocked Concentration Account Bank, each
bank where a Disbursement Account is located and all other Relationship
Banks, shall have entered into tri-party blocked account agreements with
Agent, for the benefit of itself and Lenders, and each Loan Party and
Subsidiaries thereof, as applicable, in form and substance acceptable to
Agent (the "Blocked Account Agreements"), which shall become operative on or
prior to the Closing Date. Each such Blocked Account Agreement shall
provide, among other things, that (i) all items of payment deposited in the
Blocked Account subject to such Blocked Account Agreement and proceeds
thereof deposited in the Blocked Concentration Account are held by such bank
as agent or bailee-in-possession for Agent, on behalf of Lenders, (ii) the
bank executing such agreement has no rights of setoff or recoupment or any
other claim against such Blocked Account, as the case may be, other than for
payment of its service fees and other charges directly related to the
administration of such account and for returned cheques or other items of
payment, and (iii) from and after the Closing Date (A) with respect to banks
at which a Blocked Account is located, such bank agrees to forward
immediately all amounts in each Blocked Account to the Blocked Concentration
Account Bank and to commence the process of daily sweeps from such Blocked
Account into the Blocked Concentration Account and (B) with respect to the
Blocked Concentration Account Bank, such bank agrees to immediately forward
all amounts received in the Blocked Concentration Account to the Agent's
Collection Account through daily sweeps from such Blocked Concentration
Account into the Agent's Collection Account. No Loan Party shall, nor shall
it cause or permit any Subsidiary thereof to, accumulate or maintain cash in
disbursement or payroll accounts as of any date of determination in an
aggregate amount more than $250,000 in excess of cheques outstanding against
such accounts as of that date and amounts necessary to meet minimum balance
requirements.
(c) So long as no Default or Event of Default has occurred and is
continuing, each Loan Party may amend Attachment I to add or replace a
Relationship Bank, Lock Box or Blocked Account or to replace any Blocked
Concentration Account or any Disbursement Account; provided, however, that
(i) Agent shall have consented in writing in advance to the opening of such
account or Lock Box with the relevant bank and (ii) prior to the time of the
opening of such account or Lock Box, such Loan Party and/or the Subsidiaries
thereof, as applicable, and such bank shall have executed and delivered to
Agent a tri-party Blocked Account Agreement, in form and substance
satisfactory to Agent. Each Loan Party shall close any of its accounts (and
establish replacement accounts in accordance with the foregoing sentence)
promptly and in any event within thirty (30) days of notice from Agent that
the creditworthiness of any bank holding an account is no longer acceptable
in Agent's reasonable judgment, or as promptly as practicable and in any
event within thirty (30) days of notice from Agent that the operating
performance, funds transfer and/or availability procedures or performance
with respect to accounts or lockboxes of the bank holding such accounts or
Agent's liability under any triparty Blocked Account Agreement with such bank
is no longer acceptable in Agent's reasonable judgment.
(d) The Lock Boxes, Blocked Accounts, Disbursement Accounts and
the Blocked Concentration Account shall be cash collateral accounts, with all
cash, cheques and other similar items of payment in such accounts securing
payment of the Loans and all other Obligations, and in which each Loan Party
and each Subsidiary thereof shall have granted a Lien to Agent, on behalf of
itself and Lenders, pursuant to the Collateral Documents.
(e) All amounts deposited in the Agent's Collection Account shall
be deemed received by Agent in accordance with Section 1.10 of the Agreement
and shall be applied (and allocated) by Agent in accordance with Section 1.12
of the Agreement. In no event shall any amount be so applied unless and
until such amount shall have been credited in immediately available funds to
the Agent's Collection Account.
(f) Each Loan Party may maintain, in its name, an account (each a
"Disbursement Account" and collectively, the "Disbursement Accounts") at a
Relationship Bank acceptable to Agent into which Agent shall, from time to
time, deposit proceeds of Revolving Credit Advances made to Borrower pursuant
to Section 1.1 for use by Borrower solely in accordance with the provisions
of Section 1.5. All the Disbursement Accounts as of the Closing Date are
listed under the heading "Disbursement Accounts" in Attachment I hereto.
(g) Each Loan Party shall and shall cause its Affiliates,
officers, employees, agents, directors or other Persons acting for or in
concert with any Loan Party (each a "Related Person") to (i) hold in trust
for Agent, for the benefit of itself and Lenders, all checks, cash and other
items of payment received by any Loan Party or any such Related Person, and
(ii) within one (1) Business Day after receipt by each Loan Party or any such
Related Person of any checks, cash or other items or payment, deposit the
same into a Blocked Account. Each Loan Party and each Related Person thereof
acknowledges and agrees that all cash, checks or items of payment
constituting proceeds of Collateral are the property of Agent and Lenders.
All proceeds of the sale or other disposition of any Collateral, shall be
deposited directly into Blocked Accounts.
(h) Each Loan Party hereby constitutes and irrevocably appoints
Agent its true and lawful attorney, with full power of substitution, to
demand, collect, receive and, following an Event of Default that is
continuing, xxx for all amounts which may become due or payable under any
account (including any Blocked Account or Disbursement Account), to receive
all payments and other documents or instruments delivered to the Lock Box,
and to execute all withdrawal receipts or other orders for such Loan Party,
in its own name or in such Loan Party's name or otherwise, which Agent deems
necessary or appropriate to protect and preserve its right, title and
interest in such accounts.
(i) Upon the request of Agent, each Loan Party shall forward to
Agent, on a daily basis, evidence of the deposit of all items of payment
received by any Loan Party into its Blocked Accounts and copies of all such
cheques and other items, together with a statement showing the application of
those items relating to payments on Collateral and a collection report with
regard thereto in form and substance satisfactory to Agent and such other
documentation and information that Agent may reasonably request in connection
with any Lock Box, Blocked Account, the Blocked Concentration Account or any
Disbursement Account.
ATTACHMENT I TO ANNEX B
LIST OF BLOCKED ACCOUNT, BLOCKED CONCENTRATION ACCOUNT, DISBURSEMENT ACCOUNTS
AND LOCK BOX
1. Blocked Accounts.
(a) *
Account No.: *
Branch, bank and transit number: *
(b) *
Account No.: *
2. Blocked Concentration Account
(a) *
Account No.: *
Branch, bank and transit number: *
3. Disbursement Account.
(a) *
Account No.: *
Branch, bank and transit number: *
4. Lock Box
*
No.: *
Annex C to Credit Agreement
SCHEDULE OF CLOSING DOCUMENTS
In addition to this Agreement, duly executed by Borrower, as required
by Section 2.1(a), Agent and Lenders shall have received the following, each,
unless otherwise specified below or agreed to by Agent, dated the Closing
Date, in form and substance satisfactory to Agent, Lenders and their counsel,
unless otherwise specified below:
1. PRINCIPAL LOAN DOCUMENTS.
(a) Revolving Credit Note. A duly executed Revolving Credit Note
denominated in Canadian Dollars payable to the order of each Lender.
(b) Borrowing Base Certificate. An original Borrowing Base
Certificate, duly executed by the Senior Vice President, Canadian Operations
of Borrower.
(c) Notice of Revolving Credit Advance. An original Notice of
Revolving Credit Advance, duly executed by an authorized officer of Borrower
requesting the initial Revolving Credit Advance.
(d) Compliance Certificate. An original Compliance Certificate,
prepared as of the Closing Date, duly executed by the Senior Vice President,
Canadian Operations of Borrower.
2. COLLATERAL DOCUMENTS.
(a) Security Agreement. The Security Agreement, duly executed by
each Loan Party.
(b) Hypothec. The Hypothec, duly executed by each Loan Party and
Lenders.
(c) Assignments of Monies payable Under Insurance Policies. The
Assignments of Monies Payable Under Insurance Policies, duly executed by each
Loan Party.
(d) McDonald Guarantee. The McDonald Guarantee, duly executed by
McDonald.
(e) Borrower Pledge Agreement. The Borrower Pledge Agreement,
duly executed by Borrower.
(f) Intellectual Property Security Agreements. The Intellectual
Property Security Agreements, duly executed by Borrower.
(g) Debenture. The Debentures, duly executed by each Loan Party,
as applicable.
(h) ICP (USA) Acknowledgement and Consent. The ICP (USA)
Acknowledgement and Consent, duly executed by ICP (USA).
(i) Assignment of Rents and Benefits. Assignment of Rents and
Benefits, duly executed by Borrower.
(j) General Assignment of Book Debts. The General Assignment of
Book Debts, duly executed by Borrower.
(k) Supplier Waiver and Assignment. The Supplier Waiver and
Assignment, duly executed by ICP (USA) of each Loan Party selling Inventory
to any Loan Party.
(l) ICP Postponement and Subordination Agreement. The ICP
Postponement and Subordination Agreement, duly executed by ICP.
(m) Financing Statements. Copies of proper financing statements
or other applicable notices or registration documents (the "Financing
Statements") duly filed under the PPSA (Ontario) and in proper form for
filing under other applicable statutes or laws, of all jurisdictions as may
be necessary or, in the reasonable opinion of Agent, desirable, to perfect
the Liens created by the Collateral Documents referred to in paragraphs (a)
through (g) inclusive above.
(n) Lien Searches. Certified copies of searches or other evidence
satisfactory to Agent, listing the Financing Statements referred to in
paragraph (l) above and all other effective financing statements or other
applicable registration documents which name any Loan Party (under its
present name, any previous name or any trade name or name under which it does
business) as debtor and which are filed in the jurisdictions referred to in
paragraph (h) above, together with copies of such other financing statements
or other applicable registration documents (none of which shall cover the
Collateral purported to be covered by any Collateral Documents except for
those financing statements or other applicable registration documents with
respect to Liens permitted by this Agreement to exist after the Closing Date
but only to the extent the Collateral covered thereby is so permitted to be
covered thereby under this Agreement).
(o) Recordings. Evidence of the completion of all other
recordings and filings as may be necessary or, in the opinion of and at the
request of Agent acting reasonably, desirable to perfect the Liens created by
each Collateral Document.
(p) Other Collateral Documents. Such other Collateral Documents
duly executed by the Loan Parties as Agent may reasonably require in order
that Agent shall have received a Lien in all property of each Loan Party
contemplated by this Agreement to secure the payment of all of the
Obligations or any guarantee thereof, together with such documents,
instruments, certificates and opinions related thereto as Agent may
reasonably require.
3. THIRD PARTY AGREEMENTS.
(a) Xxxxxxx Postponement, Subordination and Assignment Agreement.
The Xxxxxxx Postponement, Subordination and Assignment Agreement, duly
executed by Xxxxxxx.
(b) Insurance. Evidence that the insurance required by the terms
of this Agreement and the Collateral Documents is in full force and effect.
(c) Cash Management System. Duly executed Blocked Accounts
Agreements as contemplated by Annex B.
(d) Warehouseman/Bailee Agreements, Landlord's Agreements and
Mortgagees' Consents and Agreements. Bailee letters from each bailee,
warehouseman, processor, converter, finisher or other Person (other than any
Loan Party) in possession or control of Inventory owned by any Loan Party,
and a landlord agreement from each landlord with respect to each leased
location at which Collateral owned by any Loan Party is located.
4. DOCUMENTS DELIVERED BY LOAN PARTIES.
(a) Board Resolutions and Incumbency Certificates. A certificate
of the Secretary or an Assistant Secretary of each Loan Party and of each of
the Affiliate Corporations which is a party to a Loan Document certifying:
(i) the resolutions adopted by the Board of Directors of
such Loan Party or Affiliate Corporation, as the case
may be, approving each Loan Document to which it is a
party and the transactions contemplated thereby;
(ii) all documents evidencing other necessary corporate
action by such Loan Party or Affiliate Corporation, as
the case may be, and required governmental and third
party approvals with respect to each such Loan
Document; and
(iii) the names and true signatures of the authorized
officers of such Loan Party or Affiliate Corporation.
(b) Articles or Certificate of Incorporation; ByLaws and Good
Standing Certificates. Each of the following documents:
(i) the articles or certificate of incorporation of each
Loan Party as in effect on the Closing Date, and the
bylaws of such Loan Party as in effect on the Closing
Date, each certified by the Secretary, Assistant
Secretary or other appropriate officer or director of
such Loan Party; and
(ii) certificates of status or compliance for each Loan
Party from the jurisdiction where such Loan Party is
incorporated and from the jurisdictions in which such
Loan Party is required to qualify as a foreign
corporation authorized to transact business, in each
instance, as of a date no more than five days before
the Closing Date.
(c) Financials. Copies of the Financials described in Section 3.4
in form and substance satisfactory to Agent.
(d) Projections. Copies of the Projections described in Schedule
3.4 in form and substance satisfactory to Agent.
(e) Officer's Certificates. A certificate of the Senior Vice
President, Canadian Operations of Borrower affirming that the conditions set
forth in Section 2.2 have been satisfied as of the Closing Date.
(f) Payment Instructions. Payment instructions from Borrower
providing for the payment in full of:
(i) all Fees payable to Agent and Lenders on the Closing
Date,
(ii) the reasonable fees and expenses of XxXxxxxx Binch,
special counsel to Agent, and of each local counsel to
Agent in connection with the transactions contemplated
by this Agreement.
5. LEGAL OPINIONS.
(a) An opinion of Osler, Xxxxxx & Harcourt, counsel to each of the
Loan Parties and the Affiliate Corporations, in form and substance
satisfactory to Agent.
(b) Such opinions of local counsel to the Loan Parties which are
acceptable to Agent as Agent may reasonably request.
6. Such other reports, statements and reconciliations with respect to the
Borrowing Base or Collateral of any or each Loan Party as Agent shall from
time to time request in its reasonable discretion.
Annex D to Credit Agreement
SCHEDULE OF CERTAIN FEES
1. Closing Fee. Borrower shall pay to Agent a closing fee in the
amount of $225,000 (the "Closing Fee") on the earlier of (a) the Closing
Date, (b) the acceptance by Borrower of financing from another lender and (c)
Borrower's termination of Agent's efforts to complete the financing provided
for in the Commitment Letter (and for greater certainty, if the conditions
precedent to closing of the Revolving Credit Facility set out in the Credit
Agreement are not satisfied by December 31, 1996, such event shall constitute
Borrower's termination under this clause), which fee is fully earned and non-
refundable at the time it becomes due and payable as aforesaid, against which
shall be credited any portion of the commitment fee paid concurrently with
the acceptance of the Commitment Letter and the remaining balance of the
underwriting deposit set forth in the Commitment Letter after deducting all
expenses payable by Borrower under the Credit Agreement..
2. Non-Use Fee. Borrower shall pay to Agent, for the account of
Lenders, an unused facility fee (the "Non-Use Fee"), equal to 0.375% per
annum on the unused daily balance of the Maximum Revolving Credit Commitment,
payable monthly in arrears (a) for the preceding calendar month, on the first
Business Day of the succeeding calendar month, commencing December 1, 1996,
and (b) on the Commitment Termination Date. All computations of the Non-Use
Fee shall be made by Agent on the basis of a three hundred sixty five (365)
day year, and for the actual number of days occurring in the period for which
such fee is payable.
3. Termination Fee. Borrower shall pay to Agent, for the account
of Lenders, a prepayment fee (the "Termination Fee") if, before the
Commitment Termination Date, Borrower terminates the Revolving Credit
Commitments, whether voluntarily or by reason of a default, in an amount
equal to (a) 2% of the Revolving Credit Commitment if the termination occurs
on or before the first anniversary of the Closing Date and (b) 1% of the
Revolving Credit Commitment if the termination occurs after the first
anniversary of the Closing Date and before the date which is 180 days before
the Commitment Termination Date.
4. Collateral Examination Charge. Borrower shall pay to Agent,
for Agent's own account, a collateral examination charge of $875 per day per
individual, plus all travel and living expenses and other reasonable actual
out-of-pocket expenses incurred, in connection with any field examination
conducted by Agent (the "Collateral Examination Charge") payable on the
Closing Date or as incurred after the Closing Date.
5. Collateral Management Fee. Borrower shall pay to Agent, for
Agent's own account, a collateral management fee of $40,000 per annum payable
in arrears in quarterly installments at the end of each Fiscal Quarter
commencing December 31, 1996 for so long as any Obligations are
outstanding or the Revolving Credit Commitment has not been terminated (the
"Collateral Management Fee"). If the Revolving Credit Commitment is
cancelled under the terms of the Credit Agreement, Borrower shall pay to
Agent the Collateral Management Fee for the entire Fiscal Quarter in which
such cancellation occurs.
Annex E to Credit Agreement
FINANCIAL STATEMENTS, PROJECTIONS AND NOTICES
The following (each to be in form and substance acceptable to
Agent) shall be delivered to the Agent:
1. Within two (2) Business Days after the close of each week or
more frequently if requested by the Agent, a Borrowing Base Certificate as of
the last day of such week or relevant period if shorter.
2. Within nine (9) Business Days after the close of each Fiscal
Month:
(a) a Borrowing Base Certificate as of the last day of such Fiscal
Month;
(b) an accounts receivable report of the Loan Parties setting out
the aging of the total outstanding balances of Accounts of each Loan Party,
and a schedule detailing ineligible Accounts of the Loan Parties, as of the
last day of such Fiscal Month;
(c) a report on Inventory of the Loan Parties by product line and
a schedule detailing ineligible Inventory of the Loan Parties as of the last
day of such Fiscal Month;
(d) an accounts payable report of the Loan Parties setting out the
aging of the total outstanding balances of the accounts payable of the Loan
Parties, as of the last day of such Fiscal Month; and
(e) such other information as the Agent determines appropriate for
monitoring the Revolving Credit Loan and the Collateral; and
in each case above accompanied by such supporting detail and documentation as
Agent may reasonably request.
3. Within 30 days after the close of each Fiscal Month and Fiscal
Quarter:
(a) an internally prepared consolidated and consolidating income
statement and statement of retained earnings and cash flows for Borrower and
its Subsidiaries for such Fiscal Month and that portion of the current Fiscal
Year ending as of the close of such Fiscal Month, and a consolidated and a
consolidating balance sheet of Borrower and its Subsidiaries as at the end of
such Fiscal Month, which financial and other information shall provide
comparisons to the Projections and the prior year, both on a monthly and
year-to-date basis;
(b) reports of Borrower executed on its behalf by its Senior Vice
President, Canadian Operations setting forth management's discussion and
analysis of all current income statement, balance sheet and cash flow
financial trends;
(c) certificate of the Senior Vice President, Canadian Operations
or Director of Finance of Borrower that all such financial statements are
complete and do not contain any error, misstatement or omission and present
fairly in accordance with GAAP (subject to normal yearend adjustments) the
financial position and the results of operations and the cash flows of
Borrower as at the end of such Fiscal Month or Fiscal Quarter, as the case
may be, and for the period then ended, and that to his or her knowledge there
was no Default or Event of Default in existence as of such time or specifying
those Defaults or Events of Default of which he or she was aware and
accompanied by a Compliance Certificate.
4. Within 30 days after the close of each Fiscal Quarter, a
statement in reasonable detail showing the calculations used in determining
Borrower's compliance with the financial covenants set forth in Annex G,
accompanied by a Compliance Certificate.
5. Within 90 days after the close of each Fiscal Year:
(a) copies of the annual audited consolidated and consolidating
financial statements of Borrower and its Subsidiaries, in each case
consisting of a balance sheet, income statement and statement of retained
earnings and cash flow, setting forth in comparative form the figures for the
previous Fiscal Year, which financial statements shall be prepared in
accordance with GAAP, certified without qualification by the Accountants, and
accompanied by a statement in reasonable detail from such accountants showing
the calculations used in determining Borrower's compliance with the financial
covenants set forth in Annex G;
(b) reports of Borrower executed on its behalf by its Senior Vice
President, Canadian Operations setting forth management's discussion and
analysis of all current income statement, balance sheet and cash flow
financial trends; and
(c) certificates of Borrower executed on its behalf by its Senior
Vice President, Canadian Operations that all such financial statements are
complete and correct and present fairly in accordance with GAAP the financial
position, the results of operations and the changes in financial position of
Borrower as at the end of such Fiscal Year and for the period then ended, and
that there was no Default or Event of Default in existence as of such time or
specifying those Defaults or Events of Default of which he or she was aware
and accompanied by a Compliance Certificate.
6. Not later than 30 days after the last day of each Fiscal Year,
a consolidated and consolidating operating plan approved by the Senior Vice
President, Canadian Operations of Borrower for the
next succeeding Fiscal Year which shall include monthly financial projections
(including a Capital Expenditures budget) for Borrower and its Subsidiaries
acceptable to Agent for the following Fiscal Year (similar in form and
content to the Projections) approved by Borrower's Board of Directors and, in
each case, which includes projected balance sheets, cash flow statements and
income statements of Borrower for the following Fiscal Year, on a monthly
basis and for each year thereafter until the Commitment Termination Date, on
an annual basis, together with a description of major assumptions used in
generating such balance sheets, cash flows and income statements, and other
appropriate supporting details as requested by Agent.
7. Within 45 days after completion of Borrower's annual physical
count of Inventory, a report in a form and with such specificity as may be
satisfactory to Agent concerning such physical count of the Inventory.
8. As soon as practicable, but in any event within two (2)
Business Days after a Loan Party becomes aware of the existence of any
Default or Event of Default, or any development or other information that
would have a Material Adverse Effect, written notice specifying the nature of
such Default or Event of Default or development or information, including the
anticipated effect thereof.
9. Upon Agent's request, copies of all Tax Returns, reports and
statements, (excluding sales, use or like taxes) filed by each Loan Party.
10. As soon as practicable, but in any event within two (2)
Business Days after Borrower decides to make a filing or after the filing
thereof with any securities regulatory authority, whichever is sooner, a copy
of each material report, notice or other filing, if any, made by any Loan
Party with such regulatory authority and promptly after receipt or delivery,
a copy of each material written communication received by any Loan Party from
or delivered by any Loan Party to any securities regulatory authority.
11. Promptly following provision to any other party, copies of any
statement or report provided to any other party by any Loan Party pursuant to
the terms of each contract or agreement relating to Indebtedness of any Loan
Party and not otherwise required to be provided to Agent pursuant to this
Agreement.
12. Upon the occurrence of a Default or an Event of Default, at
the request of Agent and at Borrower's expense, a report of an independent
collateral auditor (which may be, or be affiliated with, Agent and/or a
Lender) with respect to the Eligible Inventory and the Eligible Accounts
included in the Borrowing Base, which report shall indicate that, based upon
a review by such auditors of the Inventory of each Loan Party (including
verification as to the value, location and respective types), Accounts of
each Loan Party (including verification as to amount, aging, indemnity and
credit of the respective account debtors and the billing practices of each
Loan
Party), the information set forth in the Borrowing Base Certificates relating
to the periods covered by the audit is accurate and complete in all respects.
Agent shall have the right to perform (or obtain an independent auditor to
perform) the foregoing collateral audit; alternatively, Agent may request
Borrower obtain such a collateral auditor and, upon such request, Borrower
shall deliver to Agent the report of such auditor contemplated hereby within
30 days of Agent's request therefor.
13. Upon the occurrence of a Default or an Event of Default, at
the request of Agent and at Borrower's expense, a report of an appraiser
(which may be, or be affiliated with, Agent and/or a Lender) with respect to
all or any part of the Collateral. Agent shall have the right to perform (or
obtain an independent appraiser to perform) the foregoing appraisals;
alternatively, Agent may request Borrower obtain such appraisals and, upon
such request, Borrower shall deliver to Agent the report of such appraisers
contemplated hereby within 30 days of Agent's request therefor.
14. Such other reports and information respecting any Loan Party's
business, financial condition or prospects as Agent may, from time to time,
reasonably request.
Annex F to Credit Agreement
INSURANCE REQUIREMENTS
1. Coverage Requirements. The insurance policies maintained by the Loan
Parties shall provide for, without limitation, the following insurance
coverage:
(a) "all risk" physical damage insurance on all of the Loan
Parties' tangible real and personal property and assets,
wherever located, including Inventory located at premises not
owned or leased by any Loan Party and covers, without
limitation, fire and extended coverage, boiler and machinery
coverage, flood, earthquake, environmental, liquids, theft,
burglary, explosion, collapse, business interruption and all
other hazards and risks ordinarily insured against by owners
or users of such properties in similar businesses. All
policies of insurance on such real and personal property
contain an endorsement, in form and substance acceptable to
Agent, showing loss payable to Agent, as its interests may
appear, and extra expense and business interruption
endorsements. Such endorsement, or an independent instrument
furnished to Agent, provides that the insurance companies will
give Agent at least 30 days prior written notice before any
such policy or policies of insurance shall be altered or
cancelled and that no act or default of any Loan Party or any
other Person shall affect the right of Agent to recover under
such policy or policies of insurance in case of loss or damage
(that is, the standard mortgage clause);
(b) comprehensive general liability insurance on an "occurrence
basis" against claims for personal injury, bodily injury and
property damage with a minimum limit of $1,000,000 per
occurrence and $2,000,000 in the aggregate. Such coverage
includes premises/operations, broad form contractual
liability, underground, explosion and collapse hazard,
independent contractors, broad form property coverage,
products and completed operations liability;
(c) statutory limits of workers' compensation insurance;
(d) automobile liability insurance for all owned, non-owned or
hired automobiles against claims for personal injury, bodily
injury and property damage with a minimum combined single
limit of $1,000,000 per occurrence;
(e) umbrella insurance of $10,000,000 per occurrence and
$10,000,000 in the aggregate; and
(f) crime insurance with respect to employee dishonesty in an
amount not less than $5,000,000.
Each such policy (1) shall have deductibles acceptable to Agent; (2)
shall provide that Agent will be notified by written notice at least 30 days
prior to such policy's cancellation or modification; (3) is in full force and
effect; (4) is in form and with insurers recognized as adequate by Agent
(insurers with an A.M. Best rating lower than "A" will not be considered
adequate); (5) covering property and physical damage shall contain the
standard mortgage clause approved by the Insurance Bureau of Canada for use
in Canada; and (6) provide coverage of such risks and for such amounts as is
customarily maintained for businesses of the scope and size of the Loan
Parties and as otherwise acceptable to Agent. Borrower has delivered to Agent
a certificate of insurance that Borrower represents and warrants evidences
the existence of each policy of insurance, payment of all premiums therefor
and compliance with all provisions of this Agreement.
Annex G to Credit Agreement
FINANCIAL COVENANTS
1. Financial Covenants. Borrower shall not breach or fail to comply with
any of the following financial covenants:
(a) Minimum Operating Cash Flow to Interest Expense Ratio.
Borrower shall maintain (or cause to be maintained), as of the end of each
Fiscal Quarter ending from and after December 31, 1996, for each Rolling
Period, a ratio of:
(1) EBITDA in respect of such Rolling Period, minus Capital
Expenditures made during such Rolling Period, to
(2) Interest Expense during such Rolling Period,
of not less 1.25:1.
(b) Minimum Tangible Net Worth. Borrower shall maintain (or cause
to be maintained), at all times, Tangible Net Worth of not less than
(1) $16,000,000 in respect of the period from the Closing Date to
December 31, 1996,
(2) in respect of the period from January 1, 1997 to December 31,
1997, the Tangible Net Worth required under (1) above plus 70%
of Borrower's positive net income plus retained earnings
adjustment, if any, related to tax credits of Borrower, shown
on the audited consolidated balance sheet of Borrower for the
Fiscal Year ending December 31, 1996 less the amount of any
Restricted Payments permitted under Section 6.15 and actually
made by Borrower in respect of such Fiscal Year;
(3) in respect of the period from January 1, 1998 to December 31,
1998, the Tangible Net Worth required under (2) above plus 70%
of Borrower's positive net income plus retained earning
adjustment, if any, related to tax credits of Borrower, shown
on the audited consolidated balance sheet of Borrower for the
Fiscal Year ending December 31, 1997 less the amount of any
Restricted Payments permitted under Section 6.15 and actually
made by Borrower in respect of such Fiscal Year; and
(4) in respect of the period from January 1, 1999 to December 31,
1999, the Tangible Net Worth required under (3) above plus 70%
of Borrower's positive net income plus retained earning
adjustment, if any, related to tax credits of Borrower, shown
on the audited consolidated balance sheet of Borrower for the
Fiscal Year ending December 31, 1998 less the amount of any
Restricted Payments permitted under Section 6.15 and actually
made by Borrower in respect of such Fiscal Year.
(c) Capital Expenditures. Borrower on a consolidated basis shall
not make or commit to make Capital Expenditures exceeding $1,250,000 in the
aggregate in respect of any Fiscal Year of Borrower.
Schedule 1.17 to Credit Agreement
LOCATION OF ELECTRONICALLY RECORDED DATA
1. in respect of Borrower,
The Toronto-Dominion Bank
Vaughan East Commercial Banking Centre
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X0X0
Attention: Xxxxxxx Xxxxxxxx (Accounting Officer)
Telephone No: (000) 0000000
Telecopier No: (000) 0000000
2. in respect of LincolnBarriere (a division of Borrower),
Brocourt Data Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xx. Xxxxxxx, Xxxxxx
X0X 0X0
3. in respect of McDonald,
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
Schedule 3.2 to Credit Agreement
CHIEF EXECUTIVE OFFICES, COLLATERAL
LOCATIONS, CORPORATE OR OTHER NAMES
InterCity Products Corporation (Canada)
Corporate Name: InterCity Products Corporation (Canada)
Corporation Produits InterCite (Canada)
Registered office: 00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
Chief Executive Office and
Principal place of business: 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Leased Premises: 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0XX
0000 Xxxxxxxxx Xxxxxxxxxx
Xxxxx, Xxxxxx
X0X 0X0
0000 Xxx. Xxxx Xxxxxx
Xxxxx, Xxxxxx
X0X 0X0
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx
X0X 0X0
(This location has been subleased).
Warehouses re: inventory
locations: 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxx
X0X 0X0
0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxx
X0X 0X0
0000 Xxxxxxxxx Xxxxxxxxxx
Xxxxx, Xxxxxx
X0X 0X0
Transplex International Distributors Centers
000 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxxxxx
X0X 0X0
Guardian Overseas Shipping
0000 Xxxxxxx Xxxxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Canamex International Distribution
0000 Xxxxx Xxxxxx Xxx
Xxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Xxxx 00 Xxxxxxxx Xxxxx
Xxxxx Xx. Xxxxxxx, Xxxxxx Xxxxxxx
Records concerning collateral: 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
and
InterCity Products
Lincoln Barriere Division
0000 Xxxxxxxxxx Xxxx.
Xxxxx, Xxxxxx
X0X 0X0
Trade Names: Xxxx Heating & Cooling Products
HVAC Supply (Ontario)
business names:
Xxxx Heating & Cooling Products
HVAC Supply (West)
HVAC Supply (East)
Fournisseur pour HVAC (Est)
HVAC Supply (Ontario)
trade names:
Xxxx Heating and Cooling Products
KeepRite Optima 2S
High Flyers
FAST & design
KeepRite
Tempstar & Design
Zoneaire & Design
Longlife
Comfortmaker
Arcoaire
Airquest
X. X. XxXxxxxx Supply Limited
Corporate Name: X. X. XxXxxxxx Supply Limited
Registered office: X.X. Xxx 000
360 Elgin Street
Brantford, Ontario
N3T 5N3
Principal place of business: X.X. Xxx 000
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
Leased Premises: X.X. Xxx 000
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx
X0X 0X0
Warehouses re: inventory
locations: X.X. Xxx 000
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx
X0X 0X0
Records concerning collateral: X.X. Xxx 000
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
Trade Names: First Name Fireplace Distribution
Schedule 3.4 to Credit Agreement
FINANCIALS AND PROJECTIONS
1. Financial Statements. All of the following balance sheets and
statements of operations and cash flows of the Loan Parties, copies of which
have been furnished by Borrower to Agent and Lenders prior to the date of
this Agreement, have been, except as noted therein, prepared in conformity
with GAAP and present fairly respective the financial positions of the Loan
Parties, as appropriate, in each case as at the dates thereof, and the
results of operations and cash flows for the periods then ended (as to the
unaudited interim financial statements, subject to normal yearend audit
adjustments and the absence of footnotes):
(a) the audited and certified balance sheet of Borrower at
December 31, 1995 and the income statements and statements of
retained earnings and cash flows for the Fiscal Year then
ended, with the unqualified opinion thereon of the
Accountants;
(b) the unaudited balance sheet of Borrower as at the Closing Date
and the interim income statement and statements of retained
earnings and cash flows for the period from September 30, 1996
to the Closing Date; and
(c) the unaudited balance sheet of the Loan Parties as at the
Closing Date after giving proforma effect to the transactions
contemplated on or before the Closing Date under this
Agreement.
2. Projections. The projections of (a) a capital budget
(including planned capital expenditures), (b) operating profit and loss, (c)
cash flows, and (d) balance sheets, in each case on a monthly basis for the
period ending on December 31, 1997 and on an annual basis until the
Commitment Termination Date (collectively, the "Projections"), each of which
is included in an operating plan approved by the Senior Vice President,
Canadian Operations of Borrower and copies of which have been previously
delivered by Borrower to Agent and Lenders, updated, in a manner acceptable
to Agent in both form and substance, to reflect the capital and debt
structure of Borrower after giving effect to and the credit facilities
provided for under this Agreement. The projections shall be made in
compliance with the full disclosure requirements set out in Section 3.16.
Schedule 3.5 Credit Agreement
MATERIAL ADVERSE CHANGES AND RESTRICTED PAYMENTS
InterCity Products Corporation (Canada)
Nil
X. X. XxXxxxxx Supply Limited
Nil
Schedule 3.6 to Credit Agreement
REAL PROPERTY AND LEASES
PART 1
InterCity Products Corporation (Canada)
Part 1 (a) Owned Property
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
(36 Elgin Street and
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
are now part of
00 Xxxxx Xxxxxx)
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
Part 1 (b) Leased Property
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0XX
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx
X0X 0X0
(This location has been subleased).
LincolnBarriere (a division of Borrower)
Part 1 (a) Owned Property
0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxx
X0X 0X0
0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxx
X0X 0X0
Part 1 (b)Leased Property
0000 Xxxxxxxxx Xxxxxxxxxx
Xxxxx, Xxxxxx
X0X 0X0
0000 Xxx. Xxxx Xxxxxx
Xxxxx, Xxxxxx
X0X 0X0
PART 2
All deeds, landlord waivers etc. have been renewed and registrations effected
as required by Section 3.6 except:
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
0000 Xxxxxxxxx Xxxxxxxxxx
Xxxxx, Xxxxxx
X0X 0X0
0000 Xxx. Xxxx Xxxxxx
Xxxxx, Xxxxxx
X0X 0X0
PART 3
Defaults of material obligations under any lease
Nil
Contractual rights to purchase or sell real property
Nil
Material damage to Real Property that has not been fully repaired
Nil
PART 1
X. X. XxXxxxxx Supply Limited
Part 1 (a) Owned Property
Nil
Part 1 (b) Leased Property
000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx
X0X 0X0
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
PART 2
All deeds, landlord waivers etc. have been renewed and registrations effected
as required by Section 3.6. except:
000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx
X0X 0X0
PART 3
Defaults of material obligations under any lease
Nil
Contractual rights to purchase or sell real property
Nil
Material damage to Real Property that has not been fully repaired
Nil
Schedule 3.7 to Credit Agreement
MATERIAL CONTRACTS
InterCity Products Corporation (Canada)
1. Lease for real property located at 000 Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx between 760749 Ontario Ltd., as landlord and InterCity
Products Corporation (Canada), as tenant dated December 15, 1995.
2. Lease for real property located at 0000 Xxxxxxxxx Xxxxxxxxxx, Xxxxx,
Xxxxxx.
3. Lease for real property located at 000 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx between Xxxxx Trade & Industrial Park Inc., as landlord and
InterCity Products Corporation (Canada), as tenant dated January 30,
1992.
4. Lease for real property located at 0000 Xxx. Xxxx-Xxxxxx, Xxxxx,
Xxxxxx.
5. Collective Agreement between InterCity Products Corporation (Canada)
and ICP Workers' Independent Union ratified September 26, 1996 and
effective from October 1, 1996 to September 30, 1999.
6. Collective Agreement between Lincoln Barriere (Division de:
Corporation Produits InterCite (Canada)) and Metallurgistes Unis
d'Amerique Local 7625 effective until October 31, 1997.
7. Pension Trust Agreement between InterCity Gas Corporation and Canada
Trust Company dated October 1, 1986.
8. Trademark Licence Agreement between HeilQuaker Corporation and
KeepRite Inc. dated November 1, 1988.
9. Trademark Licence Agreement InterCity Products Corporation (Canada)
and National Refrigeration and Air Conditioning Products, Inc. dated
September 26, 1996.
10. Sales Representative Agreement between InterCity Products Corporation
(Canada) and Temacon Sales & Engineering Ltd. dated September 11,
1996.
11. Sales Representative Agreement between InterCity Products Corporation
(Canada) and AirTech Sales of Ottawa dated July 1, 1996.
12. Letter of Understanding in respect of a proposed Supply Agreement
between Applied Comfort Products Inc. and InterCity Products
Corporation (Canada).
13. AS/400 Software License Agreement and Addendum between Information
Systems Development, Inc. and InterCity Products Corporation (Canada)
dated June 5, 1992.
14. Sales Agreement between InterCity Products Corporation (Canada),
formerly "KeepRite Inc." and White Consolidated Industries Inc. acting
through its division Frigidaire Company, Home Comfort Products made as
of December 18, 1992.
15. Employee Benefit Plans.
16. Retirement Plan for Brantford Hourly Employees of InterCity Products
Corporation (Canada) (formerly KeepRite Inc.).
17. Retirement Plan for Salaried Employees of InterCity Products
Corporation (Canada).
18. Agreement with Revenue Canada regarding Release of Goods from Customs
prior to Payment of Duties dated August 27, 1996.
X. X. XxXxxxxx Supply Limited
1. Lease for real property located at 000 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx between Xxxxxx-Xxxxxx XxXxxxxx and Xxxxxxxxx XxXxxxxx, as
landlord, and X. X. XxXxxxxx Supply Limited, as tenant dated July 3,
1992.
2. Lease for real property located at 000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxx
between Olmar Investments Inc., as landlord, and X. X. XxXxxxxx Supply
Limited, as tenant dated April 1, 1996.
Schedule 3.8 to Credit Agreement
LABOUR MATTERS
InterCity Products Corporation (Canada)
Pending or Threatened Strikes or Labour Disputes
Nil
Collective Bargaining, Consulting and Management Agreements Requiring
Payments in Excess of $250,000 in any Fiscal Year
Nil (except for Collective Bargaining Agreements referred to below)
Pending Demands for Recognition and Charges re: termination of employment
Nil
Collective Bargaining Agreements
1. Collective Bargaining Agreement between InterCity Products Corporation
(Canada) and ICP Workers' Independent Union ratified September 26,
1996 and effective from October 1, 1996 to September 30, 1999.
2. Collective Bargaining Agreement between Lincoln Barriere (Division de:
Corporation Produits InterCite (Canada)) and Metallurgistes Unis
d'Amerique Local 7625 effective until October 31, 1997.
X. X. XxXxxxxx Supply Limited
Pending or Threatened Strikes or Labour Disputes
Nil
Collective Bargaining, Consulting and Management Agreements Requiring
Payments in Excess of $250,000 in any Fiscal Year
Nil
Pending Demands for Recognition and Charges re: termination of employment
Nil
Collective Bargaining Agreements
Nil
Schedule 3.9 to Credit Agreement
VENTURES, SUBSIDIARIES, AND AFFILIATES;
OUTSTANDING STOCK AND INDEBTEDNESS
InterCity Products Corporation (Canada) ("Borrower")
1. Subsidiaries, Joint Ventures, Partnerships and Affiliates:
X. X. XxXxxxxx Supply Limited, a wholly owned subsidiary
2. Issued and Outstanding Stock of Borrower:
* 3,053,790 common shares with no par value registered in the name
of ICP
3. Outstanding Purchase Options, Warrants or Similar Plans
Nil
4. Outstanding Indebtedness of Borrower:
* Amounts owing to The Toronto-Dominion Bank under the Existing
Credit Agreement to be fully repaid and cancelled on the
Closing Date
* Longterm, non-interest bearing subordinated loan from ICP in an
amount of not less than $37,900,000
* Obligations arising under a guarantee of Borrower in favour of
ICP under which Borrower guarantees the obligations of ICP to
Xxxxxxx under a reimbursement agreement in respect of the
indebtedness of CHL to SunTrust Bank
X. X. XxXxxxxx Supply Limited ("McDonald")
1. Subsidiaries, Joint Ventures, Partnerships and Affiliates:
Nil
2. Issued and Outstanding Stock of McDonald:
693,116 common shares registered in the name of Borrower as evidenced
by share certificate number 21
3. Outstanding Purchase Options, Warrants or Similar Plans
Nil
4. Outstanding Indebtedness of McDonald:
* Uncommitted operating credit facility in the amount of $2,700,000
provided by The Toronto-Dominion Bank, to be repaid and cancelled
on the Closing Date
Schedule 3.10 to Credit Agreement
TAXES
InterCity Products Corporation (Canada) ("Borrower")
1. Actions, suits, proceedings, investigations, audits or claims,
threatened or pending against Borrower:
Nil
2. Notices of Assessments:
* A Quebec CSST reassessment has been received. An amount equal to
approximately $270,000 has been fully accrued.
X. X. XxXxxxxx Supply Limited ("McDonald")
1. Actions, suits, proceedings, investigations, audits or claims,
threatened or pending against McDonald:
Nil
2. Notices of Assessments:
Nil
Schedule 3.12 to Credit Agreement
CANADIAN BENEFIT AND PENSION PLANS
InterCity Products Corporation (Canada)
1. Canadian Benefit Plans
(a) Benefits for Salaried Employees. The benefits provided under
this Plan include:
(i) Disability Benefits
(ii) Death Benefits
(iii) Optional Benefits
(iv) Medical Dental Benefits
(v) Employee Share Ownership Plan
(vi) Retirement Income (Pension Plan)
(b) Benefits for Hourly Employees contained in the Collective
Agreement which include:
(i) Life and Accidental Death and Dismemberment Insurance
(ii) Group Sickness and Accident Indemnity
(iii) Hospital, Medical, Drug and Dental
(iv) Longterm Disability
(v) Family Income Protection Plan
(vi) Short Week Work Benefit Plan
2. Canadian Pension Plans
(a) Retirement Plan for Brantford Hourly Employees of InterCity
Products Corporation (Canada) (formerly KeepRite Inc.)
(b) Retirement Plan for Salaried Employees of InterCity Products
Corporation (Canada)
3. ERISA Liability
Nil
X. X. XxXxxxxx Supply Limited
1. Canadian Benefit Plans
(a) Group Insurance Plan provided by Empire Life Insurance
Company. The benefits provided under this Plan include:
(i) Life Insurance
(ii) Dependent Life Insurance
(iii) Weekly Indemnity Benefit
(iv) Extended Health Care Benefit
(v) Dental Care
2. Canadian Pension Plans
Nil
3. ERISA Liability
Nil
Schedule 3.13 to Credit Agreement
LITIGATION
InterCity Products Corporation (Canada)
Please see the attached chart.
X. X. XxXxxxxx Supply Limited
Nil
INTER-CITY PRODUCTS CORPORATION (CANADA)
LITIGATION SCHEDULE
Schedule 3.15 to
Credit Agreement
INTELLECTUAL PROPERTY
InterCity Products Corporation (Canada):
1. PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES:
Patents:
Nil
Trademarks:
Trademark
(Country) Serial No. Filing Issue No. Issue Renewal
---------- ---------- Date --------- Date Date
------ ----- -------
AUTOSWEEP 469,714 05/08/81 264,944 12/11/81 12/11/96
(Canada)
CLIMATIZER A368256 11/17/81 11/17/02
(Australia)
CLIMETTE A368258 11/17/81 11/17/02
(Australia)
CLIMETTE 81/2561 06/24/83 06/24/00
(Barbados)
CLIMETTE 13895 07/06/87 02/20/97
(Trinidad/Tobago)
CLIMETTE 578,649 01/21/86 1,410,368 09/23/86 09/23/06
(United States)
COMFORT YOU 546,978 07/31/85 332,230 09/25/87 09/25/02
CAN COUNT ON
(Canada)
ENERFLO 500,795 03/24/83 288,285 02/24/84 02/24/99
(Canada)
HI/RE/LI 478,058 11/10/81 273,702 11/12/82 11/12/97
(Canada)
Trademark
(Country) Serial No. Filing Issue No. Issue Renewal
---------- ---------- Date --------- Date Date
------ ----- -------
HIGH FLYERS 752,932 05/06/94 450,165 11/17/95 11/17/10
(Canada)
HIGH FLYERS DESIGN 752,933 05/06/94 Pending
(Canada)
HVAC SUPPLY & DESIGN 721,876 02/03/93 421,640 12/24/93 12/24/08
(Canada)
INTERCITY PRODUCTS 662,415 07/18/90 418,064 10/15/93
INTERCITY PRODUCTS 672,741 12/19/90 417,767 10/08/93
& DESIGN
PRODUITS INTERCITE 670,020 11/07/90 412,255 05/14/93
KEEPRITE B343843 03/13/80 03/13/01
(Australia)
KEEPRITE 81/2560 06/24/83 06/24/00
(Barbados)
KEEPRITE B 13896 11/17/87 02/20/97
(Trinidad/Tobago)
LIMITROL 77,373 07/09/59 708,406 12/13/60 12/13/00
(United States)
LINCOLN 231/488 07/06/55 107,200 07/05/57 07/05/02
(Canada)
LINCOLN (stylized) 615,451 09/19/88 361,075 10/27/89 10/27/04
(Canada)
LINCOLN & DESIGN 231,313 06/29/55 111,417 09/05/90 09/05/03
(Canada)
TRIANGLES DESIGN 721,877 02/03/93 421,287 12/17/93 12/17/08
(Canada)
Trademark
(Country) Serial No. Filing Issue No. Issue Renewal
---------- ---------- Date --------- Date Date
------ ----- -------
NORTHERN 455,961 08/09/80 279,212 05/06/83 05/06/98
(Canada)
PRECIPITRON 173,053 03/30/38 UCA09809 03/30/38 03/30/98
(Canada)
QUALITY YOU 546,977 07/31/85 335,336 12/18/87 12/18/02
CAN COUNT ON
(Canada)
SEASONALL A368257 11/17/81 11/17/02
(Australia)
THE COMFORTING 633,619 06/06/89 402,495 09/11/92 09/11/07
CHOICE FOR
CANADIAN HOMES
(Canada)
VAPORMATIC 427,814 07/25/78 242,507 04/03/80 04/03/10
(Canada)
KEEPRITE 2,006,709 01/04/95 08/29/96 01/04/05
(Great Britain)
KEEPRITE 74/574,501 09/16/94 1,917,814 09/12/95 09/12/05
(United States)
KEEPRITE DESIGN 443,746 08/27/79 250,142 08/29/80 08/29/10
(Canada)
KEEPRITE OPTIMA 729,988 05/28/93 Pending
2-S & DESIGN
(Canada)
KEEPRITE 442,836 08/01/79 244,332 05/02/80 05/02/10
(Canada)
KEEPRITE 760,436 07/29/94 455,332 03/15/96
REFRIGERATION
(Canada)
Trademark
(Country) Serial No. Filing Issue No. Issue Renewal
---------- ---------- Date --------- Date Date
------ ----- -------
KEEPRITE 2,006,708 01/04/95 04/09/96 01/04/05
REFRIGERATION
(Great Britain)
KEEPRITE 74/574,502 09/16/94 1,917,815 09/12/95 09/12/05
REFRIGERATION
(United States)
CLIMETTE 361,833 06/30/92 208,717 08/08/75 08/08/05
(Canada) renewed
08/08/00
Pending
KEEPRITE 46,911 06/12/89 06/13/09
CLASS 00
(Xxxxxxxx Xxxxxxxx)
LINCOLN & Design 802,991 08/16/96 Pending
(Canada)
Copyrights:
Nil
2. INFRINGEMENTS OF INTELLECTUAL PROPERTY:
Nil
3. LICENSE AGREEMENTS:
Licensee Licence Agreements
1. Licence Agreement dated March, 1982 between KeepRite Inc. (now
InterCity Products Corporation (Canada) and Electrohome Limited with
respect to the names "Electrohome", and "Frost Guard" and the stylized
"E" owned by Electrohome Limited.
2. License Agreement dated November 1, 1988 between HeilQuaker
Corporation (now InterCity Products Corporation (USA)) and KeepRite
Inc. (now InterCity Products Corporation (Canada)) with respect to
HeilQuaker being the owner of trademarks in connection with the
manufacture and sale of heating and cooling equipment. The trademarks
which InterCity Products Corporation (Canada) ("InterCity") is
licensed to use under this agreement are:
(a) TEMPSTAR, (registered in the US and Canada)
(b) TEMPSTAR (with design) (registered in the US and Canada)
(c) all other trademark registrations and applications for the
trademark TEMPSTAR and TEMPSTAR (with design) in all countries
for these classes of goods
3. A licensing arrangement between InterCity and InterCity Products
Corporation (USA) ("InterCity (USA)") whereby InterCity (USA) grants
InterCity a license to use the trademarks "ARCOAIRE", "COMFORTMAKER"
and "XXXX".
4. Software License Agreement and Addendum dated June 5, 1992 between
InterCity Products Corporation (Canada) and Information Systems
Development, Inc. in connection with distribution management system
including order entry/invoicing, A/R, inventory management,
production, purchasing, sales analysis, A/P and G/L.
Licensor Licence Agreements
1. A license agreement between InterCity Products Corporation (Canada)
("InterCity") and National Refrigeration and Air Conditioning Products
Inc. ("NRAC") dated September 26, 1996 whereby InterCity has granted
to NRAC a license to use the trademark "KEEPRITE REFRIGERATION" and
other stylistic variations thereof.
Restrictions on Borrower's ability to assign or encumber rights re:
Intellectual Property
Nil
X. X. XxXxxxxx Supply Limited:
1. PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES:
Patents:
Nil
Trademarks:
Nil
Copyrights:
Nil
2. INFRINGEMENTS OF INTELLECTUAL PROPERTY:
Nil
3. LICENSE AGREEMENTS:
Nil
Restrictions on McDonald's ability to assign or encumber rights re:
Intellectual Property
Not applicable
Schedule 3.17 to Credit Agreement
ENVIRONMENTAL MATTERS
InterCity Products Corporation (Canada)
Nil
X. X. XxXxxxxx Supply Limited
Nil
Schedule 3.18 to Credit Agreement
INSURANCE POLICIES
InterCity Products Corporation (Canada)
POLICY NO.
(Expiry Date) ISSUED BY COVERING
------------- --------- --------
#6065179 Royal Insurance Company Canadian Commercial
(August 1, 1997) of Canada General Liability
* products and completed
operations;
* non-owned
automobiles;
* employee benefits and
medical payments;
* property damage and
bodily injury;
* tenants legal liability;
and
* damage to hired vehicles
#25001766 Royal Insurance Company Canadian Automobile
25001767 (Quebec) of Canada * third party liability
(August 1, 1997) * accident benefits; and
* physical damage
#KC960039 Northfield Insurance Primary Umbrella Liability
(August 1, 1997) Company * commercial general
liability and automobile
liability (US and
Canada)
* employers liability
#79731203 Federal Insurance First Excess Liability
(January 29, 1997) Company (CHUBB) (FEL)
#EUO3660964-01 Zurich Insurance Company Second Excess Liability
(January 29, 1997)
#XXK0095616348 Fireman's Fund Insurance Third Excess Liability
(January 29, 1997) Co.
#WB24561 Fireman's Fund Insurance Ocean Marine Cargo
(August 1, 1997) Company * any one vessel, aircraft
or conveyance
#613801-96 The Protection Mutual Property
(February 1, 1999) Insurance Company (Blanket Limit -
$792,865,000)
* contemplates reduced
amounts for flood,
earthquake, transit,
floater, etc.
#8127-85-19-DCCG Federal Insurance Crime and Fiduciary
(August 1, 1997) Company (CHUBB) (covers fiduciary loss,
employee dishonesty,
premises, transit, funds
transfer fraud, depositors
forgery)
#4490807 American Home Assurance Directors' and Officers'
(August 1, 1997) Company Liability
X. X. XxXxxxxx Supply Limited
POLICY NO.
(Expiry Date) ISSUED BY COVERING
------------- --------- --------
#60286310/R Royal Insurance Company * Commercial Building,
(December 11, 1997) of Canada Equipment and Stock
* Rent or Rental Value
(Broad Form)
* Office Contents
* Liability (Commercial,
General and SPF No. 6
- Standard Non-owned
Automobile Policy
Schedule 3.19 to Credit Agreement
BANK ACCOUNTS AND LOCK BOXES
InterCity Products Corporation (Canada)
1. Blocked Accounts
(a) Canadian Account
Account No.: 18900316893
Branch, bank and transit number: Toronto-Dominion Bank
Pine Valley Commercial Banking Centre
0000 Xxxxxxx 0 xx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #18902
(b) US Account
Account No.: 18907302710
Branch, bank and transit number: Toronto-Dominion Bank
Pine Valley Commercial Banking Centre
0000 Xxxxxxx 0 xx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #18902
2. Blocked Concentration Account
(a) Canadian Account
Account No.: 18900317253
Branch, bank and transit number: Toronto-Dominion Bank
Pine Valley Commercial Banking Centre
0000 Xxxxxxx 0 xx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #18902
(b) US Account
Account No.:18907302842
Branch, bank and transit number: Toronto-Dominion Bank
Pine Valley Commercial Banking Centre
0000 Xxxxxxx 0 xx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #18902
3. Disbursement Account
(a) Canadian Account
Account No.: 14660524166
Branch, bank and transit number: Toronto-Dominion Bank (Vaughan East)
0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #14662
(b) US Account
Account No.: 14667371751
Branch, bank and transit number: Toronto-Dominion Bank (Vaughan East)
0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #14662
4. Lock Box
(a) Canadian Account
No.: T6216
Bank and address: Xxxxxxx-Xxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx Xxxxxxx "F"
Xxxxxxx, Xxxxxxx
X0X 0X0
(b) US Account
No.: T6216U
Bank and address: Xxxxxxx-Xxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx Xxxxxxx "F"
Xxxxxxx, Xxxxxxx
X0X 0X0
5. Benefit Account
(a) Canadian Account
Account No.: 21680302026
Branch, bank and transit number: Toronto-Dominion Bank
Brantford Commercial Banking Centre
00 Xxxxxx Xxxxxx
Xxx 000
Xxxxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #21682
6. Payroll Accounts
(a) Canadian Account
Salary Payroll Account No.: 0000000
Hourly Payroll Account No.: 0000000
Branch, bank and transit number: Royal Bank of Canada
00 Xxxxxx Xxxxxx Branch
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #00522
LincolnBarriere, Division of InterCity Products Corporation (Canada)
1. Blocked Accounts
(a) Canadian Account
Account No.: 18900316818
Branch, bank and transit number: Toronto-Dominion Bank
Pine Valley Commercial Banking Centre
0000 Xxxxxxx 0 xx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #18902
(b) US Account
Account No.: 18907302753
Branch, bank and transit number: Toronto-Dominion Bank
Pine Valley Commercial Banking Centre
0000 Xxxxxxx 0 xx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #18902
2. Blocked Concentration Account
(a) Canadian Account
Account No.: 18900317253
Branch, bank and transit number: Toronto-Dominion Bank
Pine Valley Commercial Banking Centre
0000 Xxxxxxx 0 xx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #18902
(b) US Account
Account No.:18907302842
Branch, bank and transit number: Toronto-Dominion Bank
Pine Valley Commercial Banking Centre
0000 Xxxxxxx 0 xx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 0000000
Transit #18902
3. Disbursement Account
(a) Canadian Account
Account No.: 44400626488
Branch, bank and transit number: Toronto-Dominion Bank
Laval Commercial Banking Centre
0000 Xxxx Xx Xxxxxxxxx
Xxxxx, Xxxxxx
X0X 0X0
(000) 000-0000
Transit #44401
(b) US Account
Account No.: 44407300168
Branch, bank and transit number: Toronto-Dominion Bank
Laval Commercial Banking Centre
0000 Xxxx Xx Xxxxxxxxx
Xxxxx, Xxxxxx
X0X 0X0
(000) 000-0000
Transit #44401
4. Lock Box
(a) Canadian Account
No.: M2092
Bank and address: Toronto-Dominion Bank
C.P. 00000
Succursale CentreVille
Xxxxxxxx, Xxxxxx
X0X 0X0
(b) US Account
No.: M2092U
Bank and address: Toronto-Dominion Bank
C.P. 00000
Succursale CentreVille
Xxxxxxxx, Xxxxxx
X0X 0X0
X. X. XxXxxxxx Supply Limited
1. Blocked Accounts
(a) Canadian Account
Account No.: 18900316796
Branch, bank and transit number: Toronto-Dominion Bank
Pine Valley Commercial Banking Centre
0000 Xxxxxxx 0 xx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #18902
2. Blocked Concentration Account
(a) Canadian Account
Account No.: 18900317253
Branch, bank and transit number: Toronto-Dominion Bank
Pine Valley Commercial Banking Centre
0000 Xxxxxxx 0 xx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #18902
3. Disbursement Account
(a) Canadian Account
Account No.:00000000000
Branch, bank and transit number: Toronto-Dominion Bank
Brantford Commercial Banking Centre
00 Xxxxxx Xxxxxx
Xxx 000
Xxxxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #21682
(a) US Account
Account No.: 21687316753
Branch, bank and transit number: Toronto-Dominion Bank
Brantford Commercial Banking Centre
00 Xxxxxx Xxxxxx
Xxx 000
Xxxxxxxxx, Xxxxxxx
X0X 0X0
(000) 000-0000
Transit #21682
4. Lock Box
(a) Canadian Account
No.: T6231
Bank and address: Xxxxxxx-Xxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx Xxxxxxx "F"
Xxxxxxx, Xxxxxxx
X0X 0X0
Schedule 3.24 to Credit Agreement
CUSTOMER AND TRADE RELATIONS
Affiliates (other than McDonald) from whom InterCity Products Corporation
(Canada)
purchases Inventory:
ICP (USA)
Affiliates (other than Borrower) from whom X. X. XxXxxxxx Supply Limited
purchases
Inventory:
Nil
Schedule 3.25 to Credit Agreement
AGREEMENTS AND OTHER DOCUMENTS
InterCity Products Corporation (Canada)
(a) Supply and Purchase Agreements
1. Sales Agreement between White Consolidated Industries, Inc.,
acting through its Division, Frigidaire Company, Home Comfort
Products and InterCity Products Corporation (Canada) made as
of December 18, 1992.
2. Letter of Understanding in respect of a proposed Supply
Agreement between Applied Comfort Products Inc. and InterCity
Products Corporation (Canada).
(b) Equipment Leases
1. IBM Total System Lease #0132 dated December 9, 1994
2. IBM Total System Lease #0133 dated February 21, 1995
(c) Licenses and Permits
1. Canada Customs Bond Number TM0003001714 effective June 17,
1996 in the amount of $65,000 deposited with Revenue Canada
for the release of goods from Customs prior to payment of
duties.
(d) Documents evidencing Indebtedness and Security Interests Granted
1. Existing Credit Agreement as defined in Annex A
2. ICP Indebtedness as defined in Annex A
(e) Real Property Leases
1. Lease for real property located at 000 Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx between 760749 Ontario Ltd., as landlord and
InterCity Products Corporation (Canada), as tenant dated
December 15, 1995.
2. Lease for real property located at 000 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx between Xxxxx Trade & Industrial Park Inc.,
as landlord and InterCity Products Corporation (Canada), as
tenant dated January 30, 1992.
3. Lease for real property located at 0000 Xxxxxxxxx Xxxxxxxxxx,
Xxxxx, Xxxxxx.
4. Lease for real property located at 0000 Xxx. Xxxx-Xxxxxx,
Xxxxx, Xxxxxx.
5. Lease for real property located at 0000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx (fully subleased).
(f) Securities, Rights, Options or Warrants Agreements
Nil
X. X. XxXxxxxx Supply Limited
(a) Supply and Purchase Agreements
Nil
(b) Equipment Leases
Nil
(c) Licenses and Permits
1. Vendor Permit No. 25911406 dated September 17, 1996 pursuant
to the Retail Sales Tax Act.
(d) Documents evidencing Indebtedness and Security Interests Granted
1. Uncommitted operating credit facility in the amount of
$2,700,000 provided by The Toronto-Dominion Bank, to be repaid
and cancelled on the Closing Date.
(e) Real Property Leases
1. Lease for real property located at 000 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx.
2. Lease for real property located at 000 Xxxxx Xxxxx, Xxxxxxxx,
Xxxxxxx.
(f) Securities, Rights, Options or Warrants Agreements
Nil
Schedule 6.2 to Credit Agreement
INVESTMENTS
InterCity Products Corporation (Canada)
* Ownership of all of the issued and outstanding shares in the capital
stock of X. X. XxXxxxxx Supply Limited
* Obligations arising under a guarantee of Borrower in favour of ICP
under which Borrower guarantees the obligations of ICP to Xxxxxxx
under a reimbursement agreement in respect of the indebtedness of CHL
to SunTrust Bank
X. X. XxXxxxxx Supply Limited
Nil
Schedule 6.7 to Credit Agreement
LIENS
Inter-City Products Corporation (Canada)
Inter-City Products Corporation (Canada)
Corporation Produits Inter-Cite (Canada)
----------------------------------------
Reference File No. &
Secured Collateral General Collateral Registration
Party(ies) Classification Description Number(s)
----------------------------------------------------------------------------
IBM Canada Equipment, 424906146-
Limited Accounts, 921009 1451 0043 4705
Other (5 years)
Toronto- Inventory, 007889139-
Dominion Equipment, 900402 1104 0043 9563
Bank of Accounts, Other, (25 years)
Canada Motor Vehicles
The Toronto- Inventory, 007889166-
Dominion Bank Equipment, 900402 1104 0043 9561
Accounts, Other, (25 years)
Motor Vehicles
Inter-City Products Corporation (Canada)
----------------------------------------
Reference File No. &
Secured Collateral General Collateral Registration
Party(ies) Classification Description Number(s)
----------------------------------------------------------------------------
IBM Canada Equipment, 811027503-
Ltd Accounts, Other 941206 2155 1529 3383
(7 years)
QE Financial Equipment, Other 2 Canon Laser Class 5500 075584349-
Services Inc. fax with accessories 941130 1441 0024 8534
2 Canon Laser Class 7500 (4 years)
fax with accessories c/n
584759 1/n 605666
Reference File No. &
Secured Collateral General Collateral Registration
Party(ies) Classification Description Number(s)
----------------------------------------------------------------------------
National Accounts Absolute assignment of 075126663-
Refrigeration certain accounts 941011 1115 0020 2999
& Air receivable from Inter- (5 years)
Conditioning City Products Corporation
Products, Inc. (Canada)/Corporation
Produits Inter-Cite
(Canada) to National
Refrigeration & Air
Conditioning Products, Inc.
Xerox Canada Equipment, Other Xerox equipment 065618901-
Ltd/Ltee 940304 0802 00882967
(5 years)
Xerox Canada Equipment, Other Xerox equipment 065618919-
Ltd/Ltee 940304 0801 0088 2926
(3 years)
Environmental Accounts Absolute assignment from 804991437-
Technologies Inter-City Products 931220 0000 0000 0000
International Corporation (Canada) to (5 years)
Inc. Environmental
Technologies Internatinal
Inc. of an account
receivable from CFC-TEK Inc.
(sic)
Xerox Canada Equipment, Other Xerox equipment 058953465-
Ltd/Ltee 930624 0819 0088 2002
(5 years)
The Toronto- Accounts, Other 069124875-
Dominion Bank 930624 1017 0043 0429
(10 years)
IBM Canada Equipment, Accounts, 424906146-
Limited Other 921009 1451 0043 4705
(5 years)
The Toronto Inventory, Equipment, 007889139-
Dominion Bank Accounts, Other, 90402 1104 0043 9563
Motor Vehicles (25 years)
The Toronto- Inventory, Equipment, 007889166-
Dominion Bank Accounts, Other, 900402 1104 0043 9561
Motor Vehicles (25 years)
Corporation Produits Inter-Cite (Canada)
----------------------------------------
Reference File No. &
Secured Collateral General Collateral Registration
Party(ies) Classification Description Number(s)
----------------------------------------------------------------------------
National Accounts Absolute assignment of 07512663-
Refrigeration certain accounts 941011 1115 0020 2999
& Air receivable from Inter- (5 years)
Conditioning City Products Corporation
Products, Inc. (Canada)/Corporation
Produits Inter-Cite
(Canada) to National
Refrigeration & Air
Conditioning Products, Inc.
IBM Canada Equipment, 424906146-
Limited Accounts,Other 921009 1451 0043 4705
(5 years)
The Toronto- Inventory, 007889139-
Dominion Bank Equipment, 900402 1104 0043 9563
Accounts, Other, (25 years)
Motor Vehicles
The Toronto- Inventory, 007889166-
Dominion Bank Equipment, 900402110400439561
Accounts, Other, (25 years)
Motor Vehicles
KeepRite Inc.
-------------
Reference File No. &
Secured Collateral General Collateral Registration
Party(ies) Classification Description Number(s)
----------------------------------------------------------------------------
GE Capital Equipment, 4 specific motor 431765694-
Quebec Other, Motor vehicles were 920506 0837 0043 0428
Acquisitions Vehicles identified and boites (6 years)
Inc. de camion aluminium 26'
long x 96" haut x
102" large two units
The Toronto- Inventory, 007889139-
Dominion Bank Equipment, 900402 1104 0043 9563
Accounts, Other, (25 years)
Motor Vehicles
The Toronto- Inventory, 007889166-
Dominion Bank Equipment, 900402 1104 0043 9561
Accounts, Other, (25 years)
Motor Vehicles
X.X. XxXxxxxx Supply Limited
X.X. XxXxxxxx Supply Limited
----------------------------
Reference File No. &
Secured Collateral General Collateral Registration
Party(ies) Classification Description Number(s)
----------------------------------------------------------------------------
GMAC Leaseco Equipment, Other, 96 Pontiac Trans Sport 825547815-
Limited Motor Vehicles VIN#0XXXX00X0XX000000 961010 1636 1737 1963
(3 years)
GMAC Leaseco Equipment, Other, 96 Pontiac Trans Sport 825039855-
Limited Motor Vehicles VIN#0XXXX00X0XX000000 960919 1624 1737 6941
(3 years)
GMAC Leaseco Equipment, Other, 96 GMC Sierra 821765484-
Limited Motor Vehicles VIN#2GETC19WXT1SI692I 960508 1627 1737 4672
(4 years)
GMAC Leaseco Equipment, Other, 96 Pontiac Trans Sport 821765493-
Limited Motor Vehicles VIN#IGMDU06ESTT2I249S 960508 1627 1737 4673
(3 years)
GMAC Leaseco Equipment, Other, 96 Pontiac Trans Sport 821765502-
Limited Motor Vehicles VIN#IGMDU06EZIT2I2714 960508 1627 1737 4674
(3 years)
GMAC Leaseco Equipment, Other, 96 Pontiac Trans Sport 821765511-
Limited Motor Vehicles VIN#JGMDU06E7TT2O1479 960508 1627 1737 4675
(3 years)
Teletech Equipment, Other 814686273-
Financial 950614 1859 1529 8207
Corporation (6 years)
Forbes Bros. Consumer Goods, 94 Chevrolet 068324841-
Inc. Motor Vehicle 3/4 Ton Pick Up 940603 1544 0043 8496
VIN#0XXXX00X0XX000000 (4 years)
The Toronto- Inventory, General Security 940557204-
Dominion Bank Equipment, Agreement
Accounts, Other,
Motor Vehicles
The Toronto- Inventory, 956265804-
Dominion Bank Equipment, 800507 1419 05 8224
Accounts, Other,
Motor Vehicles
The Toronto Accounts, Other 956096028-
Dominion Bank 760617 1048 05 1555
In addition, the following registration was made under the Corporation
Securities Registration Act (the "CSRA") or a predecessor statute:
1. CSRA Number: 048191
Reference File Number: 900481914
Parties: X. X. XxXxxxxx Supply Limited
The Toronto-Dominion Bank
Instrument: Demand Debenture
Date of Execution: May 5, 1980
Principal Amount: $500,000.00
Exhibit 1.1(c) to Credit Agreement
NOTICE OF REVOLVING CREDIT ADVANCE
Date:
--------------------------
To: GENERAL ELECTRIC CAPITAL CANADA INC.
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Vice President, Commercial Finance
Telecopier No.: (000) 000-0000
And To: GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 0000000
Attention: Vice President, InterCity Account Manager
Dear Sirs:
Reference is made to the credit agreement dated as of December 19,
1996 between InterCity Products Corporation (Canada), as borrower (the
"Borrower"), McDonald, each of the lenders named therein (the "Lenders") and
General Electric Capital Canada Inc., as agent for the Lenders (as amended,
restated, supplemented and otherwise modified, the "Credit Agreement"). All
capitalized terms used in this Notice and not defined herein have the
meanings given to them in the Credit Agreement.
Notice is hereby given by Borrower of its request for a Revolving
Credit Advance under Section 1.1(c) of the Credit Agreement as follows:
(a) Proposed Borrowing Date:
---------------------------
(b) Amount of proposed Revolving Credit Advance: $
----------------
(c) Type of Proposed Revolving Credit Advance:
-------------------
(d) The term of the Interest Period (if applicable) is
-----------
- days.
(e) The proceeds of the proposed Revolving Credit Advance are to
be deposited into the Disbursement Account
------------------
(f) The principal amount of the Revolving Credit Loan (after
giving effect to the proposed Revolving Credit Advance) will
be $
---------------------
(g) The Borrowing Base, as calculated in the Borrowing Base
Certificate dated being the most
------------------
recent Borrowing Base Certificate that we have delivered to
the Agent pursuant to Annex E to the Credit Agreement), is
$
----------------------
Borrower hereby certifies and represents that the following statements
are true on the date hereof, and will be true on the date of the proposed
Revolving Credit Advance as to which this Notice is made:
(a) each Loan Party's representations and warranties contained in
the Credit Agreement or in any other Loan Document were true
and correct on and as of the Closing Date and are true and
correct before and after giving effect to the proposed
Revolving Credit Advance and the application of the proceeds
thereof, with the same effect as though made on and as of the
date of the proposed Revolving Credit Advance (unless such
representation and warranty expressly relates solely to an
earlier date, in which case such representation and warranty
was true and correct on such date, and except for changes
permitted or contemplated by the Credit Agreement);
(b) no event has occurred and is continuing, or would result from
the making of the proposed Revolving Credit Advance, which
constitutes or would constitute a Default or an Event of
Default;
(c) after giving effect to the Revolving Credit Advance requested
hereunder, the aggregate principal amount of the Revolving
Credit Loan shall not exceed the Borrowing Base and there shall
be no requirement under Section 1.4(b) to repay any Revolving
Credit Advance; and
(d) a Material Adverse Effect is not continuing.
Yours truly,
INTERCITY PRODUCTS CORPORATION (CANADA)
By:
-----------------------------------
Name:
Title:
Exhibit 1.1(d) to Credit Agreement
FORM OF REVOLVING CREDIT NOTE
Cdn$30,000,000.00 Date:_________________
FOR VALUE RECEIVED, INTERCITY PRODUCTS CORPORATION (CANADA), a Canada
corporation (the "Borrower"), hereby promises to pay to or to the order of
GENERAL ELECTRIC CAPITAL CANADA INC., as agent (together with any successor
agent which may be appointed from time to time and its assigns, the "Agent")
at the offices of the Agent at 0000 Xxxxxxxxxx Xxxx., Xxxxxxxxxxx, Xxxxxxx
X0X 0X0, or at such other place as the Agent may designate from time to time
in writing, in lawful money of Canada and in immediately available funds, the
principal amount of THIRTY MILLION CANADIAN DOLLARS, or such lesser principal
amount as shall then constitute the Revolving Credit Loan, together with
interest on the unpaid principal amount of this Revolving Credit Note
outstanding from time to time from the Closing Date at the rates and times
provided in the Credit Agreement (as hereafter defined).
All capitalized terms, unless otherwise defined herein, shall have the
meanings given to them in the Credit Agreement (as the same may be restated,
amended, modified or supplemented, the "Credit Agreement"), dated as of
December 19, 1996, between the Agent, on its own behalf and on behalf of the
financial institutions or other entities (each, a "Lender" and collectively,
the "Lenders") who may become parties to the Credit Agreement, the Lenders,
the Borrower and McDonald. This Revolving Credit Note is issued pursuant to
the Credit Agreement, is the Revolving Credit Note referred to therein, and
is entitled to the benefit and security of the Loan Documents provided for
therein, to which reference is hereby made for a statement of all of the
terms and conditions under which the loans evidenced hereby are made. All of
the terms, covenants and conditions of the Credit Agreement (including,
without limitation, the terms of payment and prepayment) and all other
instruments evidencing or securing the indebtedness hereunder, including,
without limitation, the Loan Documents, are hereby made a part of this
Revolving Credit Note and are deemed incorporated herein in full.
The principal amount of the indebtedness from time to time evidenced
hereby shall be payable in the amounts and on the dates specified in the
Credit Agreement, and if not sooner paid in full, on the Commitment
Termination Date. Interest on the outstanding principal amount of this
Revolving Credit Note shall be paid until such principal amount is paid in
full at such interest rates, including the Default Rate, if applicable, and
at such times as are specified in the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default,
this Revolving Credit Note may be declared, and upon such declaration
immediately shall become, or upon certain circumstances set forth in the
Credit Agreement may become without declaration, due and payable in full as
provided in the Credit Agreement.
Wherever possible, each provision of this Revolving Credit Note shall
be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Revolving Credit Note shall be prohibited
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity without invalidating the remainder
of such provision or remaining provisions of this Revolving Credit Note.
Notwithstanding any provision to the contrary in the Credit Agreement
or in this Revolving Credit Note, this Revolving Credit Note does not
constitute a title of indebtedness under the Civil Code of Quebec.
Time is of the essence of this Revolving Credit Note. To the fullest
extent permitted by applicable law, Borrower waives: (a) presentment, demand
and protest, and notice of presentment, dishonour, intent to accelerate,
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all Loan Documents, notes,
commercial paper, accounts, contract rights, documents, instruments, chattel
paper, other collateral and guarantees at any time held by the Agent or any
Lender on which the Borrower or any other person may in any way be liable,
and hereby ratifies and confirms whatever the Agent or any Lender may do in
this regard; (b) all rights to notice and a hearing prior to the Agent's
taking possession or control of, or to the Agent's replevy, attachment or
levy upon, the Collateral or any bond or security which might be required by
any court prior to allowing the Agent to exercise any of its remedies; (c)
all rights to receive notices from the Agent or any Lender with respect to,
or otherwise sent to, any other person; and (d) the benefit of all valuation,
appraisal and exemption laws.
INTERCITY PRODUCTS CORPORATION (CANADA)
By:
------------------------------------
Name:
Title:
Exhibit 1.1(e) to Credit Agreement
BORROWING BASE CERTIFICATE
Reference is made to the credit agreement dated as of December 19,
1996 between InterCity Products Corporation (Canada), as borrower (the
"Borrower"), McDonald, each of the lenders named therein (the "Lenders") and
General Electric Capital Canada Inc., as agent for the Lenders ("Agent")(as
amended, restated, supplemented and otherwise modified, the "Credit
Agreement"). All capitalized terms used herein and not defined herein have
the meanings given to them in the Credit Agreement.
Borrower hereby certifies that this Borrowing Base Certificate,
including Schedules A and B hereto, is a true and complete statement
regarding the status of Borrower's Eligible Accounts and Eligible Inventory
and that the amounts set forth in Schedule A are in compliance with the
provisions of the Credit Agreement. Borrower acknowledges that the Advances
under the Revolving Credit Loan made to Borrower shall be based upon the
Agent's reliance on the information contained therein and herein.
Borrower hereby certifies, represents and warrants that Borrower has
been in compliance with the Borrowing Base throughout the period subsequent
to the delivery of the Borrowing Base Certificate most recently delivered
prior to this Borrowing Base Certificate.
Date: INTERCITY PRODUCT CORPORATION (CANADA)
------------------------
By:
---------------------------------------
Name:
Title:
SCHEDULE A
INTERCITY PRODUCTS CORPORATION (CANADA)
BORROWING BASE CERTIFICATE
ACCOUNTS
Total Accounts $__________ (1)
Less: Ineligible Accounts $__________ (2)
Eligible Accounts [(1) - (2)] $__________ (3)
85% of Eligible Accounts [.85 X (3)] $__________ (4)
INVENTORY
Total Inventory $___________ (5)
Ineligible Inventory $___________ (6)
Eligible Inventory $___________ (7)
50% of Eligible Inventory [.50 X 7] $___________ (8)
RESERVES
Prior Claims $___________ (9)
Landlord Reserve $___________ (10)
Other Reserves $___________ (11)
Total Reserves $___________ (12)
Borrowing Base [(4) + (8) - (12)] $___________ (13)
This Schedule A is completed on the basis of Schedule B attached to this
Borrowing Base Certificate, as amended from time to time by Agent in the
exercise of its reasonable credit judgment.
SCHEDULE B
INTER-CITY PRODUCTS CORPORATION (CANADA)
AVAILABILITY SCHEDULE AS AT DECEMBER 19, 1996
Exhibit 1.2 to Credit Agreement
FORM OF NOTICE OF ROLLOVER
Date: [ ]
To: GENERAL ELECTRIC CAPITAL CANADA INC.
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Vice President, Commercial Finance
Telecopier No.: (000) 000-0000
And To: GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Vice President, InterCity Account Manager
Dear Sirs:
Reference is made to the credit agreement dated as of December 19,
1996 between InterCity Products Corporation (Canada), as borrower (the
"Borrower"), McDonald, each of the lenders named therein (the "Lenders") and
General Electric Capital Canada Inc., as agent for the Lenders (as amended,
restated, supplemented and otherwise modified, the "Credit Agreement"). All
capitalized terms used in this Notice and not defined herein have the
meanings given to them in the Credit Agreement.
Notice is hereby given by Borrower under Section 1.2 of the Credit
Agreement that its Revolving Credit Advance that is outstanding as a BA Rate
Loan, with an Interest Period ending on _______________, is not to be repaid
or converted into an Prime Rate Loan on such date. The next Interest Period
applicable to this BA Rate Loan commences on _______________ and ends on
_______________.
Borrower hereby certifies and represents that the following statements
are true on the date hereof, and will be true as of the first day of the next
Interest Period applicable to the BA Rate Loan as to which this Notice is
made:
(a) each Loan Party's representations and warranties contained in
the Credit Agreement or in any other Loan Document were true
and correct on and as of the Closing Date and are true and
correct on and as of the first day of the next Interest
Period applicable to the BA Rate Loan as to which this Notice
is made, with the same effect as though made on and as of such
day (unless such representation and warranty expressly relates
solely to an earlier date, in which case such representation
and warranty was true and correct on such date, and except for
changes permitted or contemplated by the Credit Agreement);
(b) no event has occurred and is continuing, or would result from
the continuation of the BA Rate Loan as to which this Notice
is made, which constitutes or would constitute a Default or an
Event of Default;
(c) after giving effect to the continuation of the BA Rate Loan in
respect of which this Notice is made, the aggregate principal
amount of the Revolving Credit Loan shall not exceed the
Borrowing Base and there shall be no requirement under Section
1.4(b) to repay any Revolving Credit Advance; and
(d) a Material Adverse Effect is not continuing.
Yours truly,
INTERCITY PRODUCTS (CORPORATION) (CANADA)
By:
-------------------------------------
Name:
Title:
Exhibit 1.3 to Credit Agreement
FORM OF NOTICE OF CONVERSION
Date: [ ]
To: GENERAL ELECTRIC CAPITAL CANADA INC.
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Vice President, Commercial Finance
Telecopier: (000) 000-0000
And To: GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Vice President, InterCity Account Manager
Telecopier: (000) 000-0000
Dear Sirs:
Reference is made to the credit agreement dated as of December 19,
1996 between InterCity Products Corporation (Canada), as borrower (the
"Borrower"), McDonald, each of the lenders named therein (the "Lenders") and
General Electric Capital Canada Inc., as agent for the Lenders (as amended,
restated, supplemented and otherwise modified, the "Credit Agreement"). All
capitalized terms used in this Notice and not defined herein have the
meanings given to them in the Credit Agreement.
Notice is hereby given by Borrower of its request for conversion of a
Prime Rate Loan under Section 1.3 of the Credit Agreement.
Borrower has outstanding $__________________ by way of Prime Rate
Loan. Please convert $__________________ [amount equal to or greater than
$1,000,000 and multiples of $500,000 in excess thereof] outstanding by way of
Prime Rate Loan into a BA Rate Loan on the ___ day of ____________, 19__.
The Interest Period of the proposed BA Rate Loan will end on
________________________________.
Borrower hereby certifies and represents that the following statements
are true on the date hereof, and will be true on the date of the first day of
the Interest Period of the BA Rate Loan as to which this Notice is made:
(a) each Loan Party's representations and warranties contained in
the Credit Agreement or in any other Loan Document were true
and correct on and as of the Closing Date and are true and
correct after giving effect to the proposed BA Rate Loan and
the application of the proceeds thereof, with the same effect
as though made on and as of the date of the proposed Revolving
Credit Advance (unless such representation and warranty
expressly relates solely to an earlier date, in which case
such representation and warranty was true and correct on such
date, except for changes permitted or contemplated by the
Credit Agreement);
(b) no event has occurred and is continuing, or would result from
the making of the proposed BA Rate Loan, which constitutes or
would constitute a Default or an Event of Default;
(c) after giving effect to the BA Rate Loan requested hereunder,
the aggregate principal amount of the Revolving Credit Loan
shall not exceed the Borrowing Base and there shall be no
requirement under Section 1.4(b) of the Credit Agreement to
repay any Revolving Credit Advance; and
(d) a Material Adverse Effect is not continuing.
Yours truly,
INTERCITY PRODUCTS CORPORATION (CANADA)
By:
-----------------------------------
Name:
Title:
EXHIBIT 3.4
FOR THE YEAR END - DECEMBER 31, 1997
INTER-CITY PRODUCTS CORPORATION (CANADA)
FORECASTED BALANCE SHEET
AS AT DECEMBER 31, 1997
(CDN $ 000'S)
INTER-CITY PRODUCTS CORPORATION (CANADA)
FORECASTED DEFICIT SHEET
AS AT DECEMBER 31, 1997
(CDN $ 000'S)
INTER-CITY PRODUCTS CORPORATION (CANADA)
FORECASTED STATEMENT OF EARNINGS
AS AT DECEMBER 31, 1997
(CDN $ 000'S)
EXHIBIT A
INTER-CITY PRODUCTS CORPORATION (CANADA)
COMPLIANCE CERTIFICATE
This Certificate is being made and delivered to the Agent and the
Lenders pursuant to Section 3(c) or Section 5(c) of Annex E of the Credit
Agreement dated as of December 19, 1996 (the "Credit Agreement") between
InterCity Products Corporation (Canada) (the "Borrower"), McDonald, the
Lenders and the Agent.
Capitalized terms not defined herein shall have the meanings given to
them in the Credit Agreement. Fiscal Month shall mean the Fiscal Month of
Borrower ending (the "Effective Date") and, where the Effective Date is also
the last day of a Fiscal Quarter, Fiscal Quarter shall mean the Fiscal
Quarter ending on the Effective Date and Rolling Period shall mean the
Rolling Period.
I, ______________________________, being the duly elected, qualified
and acting [Senior Vice President, Canadian Operations] [Chief Financial
Officer] of Borrower, and authorized by the board of directors of Borrower to
sign on behalf of Borrower, hereby certify on behalf of Borrower, and not in
my personal capacity, as follows:
1. I am fully familiar with all of Borrower's business and financial
affairs, including, without limitation, all of the matters hereinafter
described.
2. I have read the provisions of the Credit Agreement which are relevant
to this Compliance Certificate and have made such examination or
investigation as is reasonably necessary to enable me to express an informed
opinion on the matters contained in this Compliance Certificate.
3. The representations and warranties of each Loan Party contained in the
Credit Agreement and each other Loan Document are true and correct in all
material respects on and as of the date hereof.
4. No event has occurred and is continuing, which constitutes or would
constitute a Default or an Event of Default.
5. There has not occurred a Material Adverse Effect which has not been
cured or waived in writing by the Required Lenders.
6. [Note: Complete this paragraph 6 only in respect of a month end which
coincides with the ending of a Fiscal Quarter] As of the end of the Fiscal
Quarter, the ratio of (a) the EBITDA in respect of the Rolling Period minus
Capital Expenditures made during the Rolling Period (being Cdn$____________)
to (b) Interest Expense during the Rolling Period (being Cdn$_______________)
was not less than 1.25:1 (Actual ____:1).
7. As of the Effective Date, Tangible Net Worth of Borrower was not less
than Cdn$_______________ (Actual Cdn$_____________).
8. As of the Effective Date, Borrower has not made aggregate Capital
Expenditures in excess of Cdn$1,250,000 (Actual Cdn$_____________) for the
applicable Fiscal Year.
9. I hereby acknowledge and agree that the Agent and Lenders (as defined
in the Credit Agreement) have relied upon this Certificate in making the
loans and other financial accommodations provided for in the Credit
Agreement.
DATED: *.
INTERCITY PRODUCTS CORPORATION (CANADA)
By:
-----------------------------------
Name: Title:
EXHIBIT B
SUPPLIER WAIVER, ASSIGNMENT AND AGREEMENT
