EXHIBIT 4.8
LOAN AGREEMENT
This Agreement is made as of April 30, 2003, between TECSTAR MANUFACTURING
CANADA LIMITED as Borrower and COMERICA BANK, a Michigan banking corporation and
authorized foreign bank under the Bank Act (Canada) through its Canadian Branch
carrying on business under the name Comerica Bank, Canada Branch, as Lender.
RECITALS
A. WHEREAS the Borrower has requested that the Lender extend a revolving
credit facility to the Borrower up to Five Million U.S. Dollars (U.S.$5,000,000)
in the aggregate for the purposes of (a) providing working capital finance to
the Borrower (including letter of credit requirements), and (b) paying certain
fees and expenses associated with the Credit Facility; and for these purposes,
the Lender is willing to make certain loans and other extensions of credit to
the Borrower of up to such amount upon the terms and conditions set forth
herein;
B. AND WHEREAS it is a condition of providing such credit facility that the
Borrower execute this Agreement;
FOR VALUE RECEIVED, the parties agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions
In this Agreement:
Account for Payments shall mean the accounts maintained by the Lender for
all payments for and by the Borrower set out opposite the Lender's name on
Schedule 1 or such other accounts as the Lender may from time to time advise the
Borrower in writing.
Additional Compensation shall have the meaning given to it in Section
4.6(3) of this Agreement.
Adjusted Liabilities shall mean as of any applicable date of determination,
all items of indebtedness, obligation or liability of a Person, whether matured
or unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, that should be classified as liabilities in
accordance with GAAP, excluding, however, the long term portion of any mortgage
indebtedness of a Person incurred to acquire real estate.
Advance Formula Agreement shall mean the Advance Formula Agreement dated as
of the date hereof between the Borrower and the Lender, as amended, varied,
supplemented, restated, renewed or replaced at any time from time to time.
Affected Borrowing shall have the meaning given to it in Section 4.7 of
this Agreement.
Affiliate shall have the meaning given to it in the Business Corporations
Act (Ontario), as in effect on the Closing Date.
Agreed Currency shall have the meaning given to it in Section 13.18 of this
Agreement.
Agreement shall mean this agreement, including the Schedules hereto, as
amended, varied, supplemented, restated, renewed or replaced at any time from
time to time.
Applicable Law shall mean, in respect of any Person, property, transaction
or event, all present and future laws, statutes, regulations, treaties,
judgments and decrees applicable to that Person, property, transaction or event
(whether or not having the force of law with respect to regulatory matters
applicable to the Lender) and all applicable requirements, requests, official
directives, consents, approvals, authorizations, guidelines, rules, orders and
policies of any Governmental Authority having or purporting to have authority
over any the Person, property, transaction or event.
Applicable Margin shall mean, with respect to Prime Rate Loans, as of any
date of determination, the applicable interest rate margin determined in
accordance with the provisions of Section 4.1 by reference to the appropriate
columns in the pricing matrix attached to this Agreement as Schedule 2.
Borrower shall mean Tecstar Manufacturing Canada Limited, a Nova Scotia
limited company, together with its successors and permitted assigns.
Borrower's Accounts shall mean, in respect of the Borrower, a U.S. Dollar
account of the Borrower maintained at the Branch of Account of the Lender in
Canada, particulars of which the Borrower has advised the Lender in writing.
Borrowing Base shall mean the amount determined pursuant to the advance
formula contained in the Advance Formula Agreement.
Branch of Account shall mean the branch of the Lender at the address set
out opposite the Lender's name on Schedule 3 or such other branch as the Lender
may advise the Borrowers in writing.
Business Day shall mean any day on which commercial banks are open for
domestic and international business (including dealings in foreign exchange) in
Toronto.
Canadian Benefit Plans shall mean all material employee benefit plans or
arrangements maintained or contributed to by the Loan Parties that are not
Canadian Pension Plans, including 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 the Loan Parties participate or are eligible to participate but
excluding all stock option or stock purchase plans.
Canadian Dollars and the symbol "C$" shall mean lawful money of Canada.
Canadian Pension Plans shall mean all plans and arrangements which are
considered to be pension plans for the purposes of any applicable pension
benefits standard statute and/or regulation in Canada established, maintained or
contributed to by each Loan Party for its employees or former employees.
Capital Expenditures shall mean, without duplication, any amounts accrued
or paid in respect of any purchase or other acquisition for value of fixed or
capital assets; provided that, in no event shall Capital Expenditures include
amounts expended in respect of normal repair and maintenance of plant
facilities, machinery, fixtures and other like capital assets utilized in the
ordinary conduct of business (to the extent such amounts would not be
capitalized in preparing a balance sheet determined in accordance with GAAP).
Capital Lease shall mean, with respect to any Person, any lease or other
arrangement relating to property or assets which would be required to be
accounted for as a capital lease on a balance sheet of that Person in accordance
with GAAP. The amount of any Capital Lease at any date shall be the amount of
the obligation in respect thereof which would be included on the balance sheet.
Capital Stock shall mean, with respect to any Person, any and all shares,
share capital, interests, participations, warrants, options or other equivalents
(however designated) of capital stock of a corporation and any and all
equivalent ownership interests in a Person (other than a corporation), in each
case whether now outstanding or hereafter issued.
Claim shall have the meaning given to it in Section 4.9(1) of this
Agreement.
Closing Date shall mean April __, 2003.
Collateral shall mean all of the existing and after acquired real and
personal, tangible and intangible assets of the Loan Parties, including, without
limitation, all cash, cash equivalents, bank accounts, accounts, other
receivables, chattel paper, contract rights (including a specific assignment of
insurance policies), inventory (wherever located), instruments, documents,
negotiable instruments, warehouse receipts and similar documents of title
relating to inventory, securities (whether or not marketable), equipment,
fixtures, real property interests, franchise rights, patents, trade names,
trademarks, copyrights, intellectual property, general intangibles, investment
property and all substitutions, accessions and proceeds of the foregoing
(including insurance proceeds).
Compliance Certificate shall mean a compliance certificate substantially in
the form attached as Schedule 4 signed by the chief financial officer of the
Borrower or other officer acceptable to the Lender.
Contract Period shall mean the period selected by the Borrower in
accordance with Section 3.1 commencing on the Drawdown Date or Rollover Date, as
applicable, and expiring on a Business Day, subject to the terms of Section
2.1(6) with respect to Letters of Credit.
Credit Facility shall mean the Revolving Facility.
Current Assets shall mean with respect to any Person, as of any applicable
date of determination, all cash, non-affiliated customer receivables, trade
receivables from Affiliates and unbilled receivables, United States government
securities, income tax refunds, tooling and inventories.
Debt shall mean, with respect to any Person, without duplication (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services as of such date, but excluding obligations to
trade creditors incurred in the ordinary course of business and payable in
accordance with customary practices, (b) all reimbursement and other obligations
with respect to letters of credit, bankers' acceptances and surety bonds,
whether or not matured, (c) all obligations evidenced by notes, bonds,
debentures or similar instruments, (d) all indebtedness created or arising under
any conditional sale or other title retention agreement 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), (e) all Capital Lease obligations and the present
value (discounted at the Prime Rate as in effect on the effective date of this
Agreement) of future rental payments under all synthetic leases, (f) all
obligations of such Person under commodity purchase or option agreements or
other commodity price hedging arrangements, in each case whether contingent or
matured, (g) all obligations of such Person under any foreign exchange contract,
currency swap agreement, interest rate swap, cap or collar agreement or other
similar agreement or arrangement designed to alter the risks of that Person
arising from fluctuations in currency values or interest rates, in each case
whether contingent or matured, (h) all Debt referred to above secured by (or for
which the holder of such Debt has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Debt, (i) all Guarantee
Obligations, and (j) any obligation contingent or other required to be
classified in accordance with GAAP upon such Person's balance sheet as a
liability.
Default shall have the meaning given to it in Section 8.24 of this
Agreement.
Documents shall mean this Agreement, the Security Documents, and all
certificates, instruments, agreements and other documents delivered, or to be
delivered, to the Lender (or its agent) under this Agreement or any other
Document and, when used in relation to any Person, the term Documents means the
Documents executed and delivered by the Person.
Drawdown Date shall mean a Business Day on which a Loan is made or deemed
to be made.
Environmental Laws shall mean all Canadian and United States federal,
provincial, state and local laws including statutes, regulations, ordinances,
codes, rules, and other governmental restrictions and requirements, relating to
environmental pollution, contamination or other impairment of any nature, any
hazardous or other toxic substances of any nature, whether liquid, solid and/or
gaseous, including smoke, vapour, fumes, soot, acids, alkalis, chemicals,
wastes, by- products and recycled materials.
Environmental Liabilities shall mean, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of
or related to any claim, suit, action, administrative order, investigation,
proceeding or demand by any Person, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute or common law,
including any arising under or related to any Environmental Laws, Environmental
Permits, or in connection with any Release or threatened Release or presence of
a Hazardous Material whether on, at, in, under, from or about or in the vicinity
of any real or personal property.
Environmental Permits shall mean all permits, licenses, written
authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Laws.
Equipment shall mean all of the Borrower's now owned and hereafter acquired
equipment, machinery, computers and computer hardware and software (whether
owned or licensed), vehicles, tools, furniture, fixtures, all attachments,
accessions and property now or hereafter affixed thereto or used in connection
therewith, and substitutions and replacements thereof, wherever located.
Equivalent Amount shall mean, on any date of determination, with respect to
obligations or valuations denominated in one currency (the "first currency"),
the amount of another currency (the "second currency") which would result from
the conversion of the relevant amount of the first currency into the second
currency at the 12:00 noon rate quoted on the Reuters Monitor Screen (Page BOFC
or such other Page as may replace such Page for the purpose of displacing such
exchange rates) on such date or, if such date is not a Business Day, on the
Business Day immediately preceding such date of determination, or at such other
rate as may have been agreed in writing between the Borrowers and the Lender.
ERISA shall mean the United States Employee Retirement Income Security Act
of 1974, as amended, or any successor act or code.
Event of Default shall have the meaning ascribed to it in Section 8.24 of
this Agreement.
Excluded Taxes has the meaning given to it in Section 5.4(4) of this
Agreement.
GAAP shall mean (i) in respect of the Borrower, generally accepted
accounting principles in effect from time to time in Canada as applied in a
consistent manner from period to period including, without limitation, the
accounting recommendations published in the Handbook of the Canadian Institute
of Chartered Accountants, and (ii) in respect of Tecstar, LLC, generally
accepted accounting principles in effect from time to time in the United States
as applied in a consistent manner from period to period.
Government Approvals shall mean, with respect to any Person, all licences,
permits, consents, authorizations and approvals from any and all Governmental
Authorities required for the conduct of that Person's business as presently
conducted.
Governmental Authority shall mean any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government. Guarantee Obligation shall mean, with
respect to any Person (the "guaranteeing person"), (a) any obligation of the
guaranteeing person or (b) any obligation of another person (including, without
limitation, any bank under any letter of credit), the creation of which was
induced by a reimbursement, counter-indemnity or similar obligation issued by
the guaranteeing person, in either case guaranteeing or in effect guaranteeing
any Debt, leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether directly
or indirectly, including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) 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 of the primary
obligor, (iii) 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 (iv) otherwise
to assure or hold harmless the owner of any such primary obligation against loss
in respect thereof; provided, however, that the term Guarantee Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Lenders.
Hazardous Material shall mean any substance, material or waste which is
regulated by or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance which is (a) defined as
a "solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"dangerous good", "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, (b)
petroleum or any fraction or by-products thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
Indemnified Person shall have the meaning given to it in Section 4.9(1) of
this Agreement.
Interest Payment Date shall mean the last Business Day of each month.
Issuance Date shall mean the date on which a Letter of Credit is issued by
the Lender in favour of a third party at the request of the Borrower.
ITA shall mean the Income Tax Act (Canada), as amended, and any successor
thereto, and any regulations promulgated thereunder, as in effect on the Closing
Date.
L/C Agreement shall have the meaning given to it in Section 2.1(6)(c) of
this Agreement.
L/C Obligations shall mean, with respect to the Borrower, at any time, an
amount equal to the sum of (A) the aggregate then undrawn and unexpired amount
of all then outstanding Letters of Credit and (B) the aggregate amount of
drawings under all Letters of Credit which have not been reimbursed by the
Borrower.
Leases shall have the meaning given to it in Section 8.8(1) of this
Agreement.
Lender shall mean Comerica Bank, a Michigan banking corporation and
authorized foreign bank under the Bank Act (Canada) through its Canadian branch
carrying on business under the name Comerica Bank, Canada Branch, and its
successors and assigns.
Letter of Credit shall mean a standby letter of credit issued by the Lender
for the account of the Borrower.
Lien means any mortgage, charge, lien, hypothec or encumbrance, whether
fixed or floating on, or any security interest in, any property, whether real,
personal or mixed, tangible or intangible, any pledge or hypothecation of any
property, any deposit arrangement, priority, conditional sale agreement, other
title retention agreement or equipment trust, Capital Lease or other security
arrangement of any kind.
Loan shall mean a Prime Rate Loan or an extension of credit by issuance of
Letters of Credit under the Revolving Facility, and Loans means any combination
of them.
Loan Party shall mean each Person, including the Borrower and Tecstar,
providing a Security Document to the Lender, as security for, or a guarantee of,
the obligations of the Borrower hereunder.
Obligations means all loans, advances, debts, liabilities and obligations
for the performance of covenants, tasks or duties or for the payment of monetary
amounts (whether or not performance is then required or contingent, or those
amounts are liquidated or determinable) owing by the Borrower or any Loan Party
to the Lender under any or all of the Documents and all covenants and duties
regarding those amounts, of any kind or nature, present or future, whether or
not evidenced by any agreement or other instrument, owing under any or all of
the Documents including, without limitation, all obligations owed by the
Borrower to the Lender under the Credit Facility.
Permitted Liens shall mean, with respect to the Loan Parties:
(i) Liens for taxes not yet due and payable or which are being contested
in good faith by appropriate proceedings diligently pursued, provided
that such provision for the payment of all such taxes has been made on
the books of such Person as may be required by generally accepted
accounting principles, consistently applied;
(ii) mechanics', materialmen's, carriers', warehousemen's and similar Liens
and encumbrances arising in the ordinary course of business and
securing obligations of such Person that are not overdue or are being
contested in good faith by appropriate proceedings diligently pursued,
provided that in the case of any such contest (i) any proceedings
commenced for the enforcement of such Liens and encumbrances shall
have been duly suspended; and (ii) such provision for the payment of
such Liens and encumbrances has been made on the books of such Person
as may be required by GAAP;
(iii)Liens arising in connection with worker's compensation, unemployment
insurance, old age pensions and social security benefits and similar
statutory obligations which are not overdue or are being contested in
good faith by appropriate proceedings diligently pursued, provided
that in the case of any such contest (i) any proceedings commenced for
the enforcement of such Liens shall have been duly suspended; and (ii)
such provision for the payment of such Liens has been made on the
books of such Person as may be required by GAAP;
(iv) Liens incurred or deposits made in the ordinary course of business to
secure the performance of statutory obligations, bids, leases, fee and
expense arrangements with trustees and fiscal agents and other similar
obligations (exclusive of obligations incurred in connection with the
borrowing of money, any lease-purchase arrangements or the payment of
the deferred purchase price of property), provided that full provision
for the payment of all such obligations has been made on the books of
such Person as may be required by GAAP;
(v) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which do not materially interfere with the
business of such Person;
(vi) purchase money security interests in inventory and equipment to secure
the indebtedness referred to in Section 10.5(c) hereof, provided that
such security interest is created contemporaneously with the
acquisition of such asset and does not extend to any property other
than the asset so purchased; and
(vii)Liens of such Person under the Security Documents securing the
Obligations.
Person shall mean an individual, corporation, partnership, trust,
incorporated or unincorporated organization, joint venture, joint stock company,
or a government or any agency or political subdivision thereof or other entity
of any kind.
PPSA shall mean the Personal Property Security Act (Ontario) and the
Regulations thereunder, as from time to time in effect, provided, however, if
attachment, perfection or priority of the security interests of the Lender (or
its agent) in any collateral are governed by the personal property security laws
of any jurisdiction other than Ontario, PPSA shall mean those personal property
security laws in such other jurisdiction for the purposes of the provisions
hereof relating to such attachment, perfection or priority and for the
definitions related to such provisions.
Prime Rate shall mean the per annum interest rate established by the Lender
and publicly announced as its prime rate for U.S. Dollar denominated commercial
loans to its borrowers as such rate may vary from time to time, which rate may
not be the Lender's lowest rate for loans to its commercial borrowers.
Prime Rate Loan shall mean a loan denominated in U.S. Dollars made by the
Lender to the Borrower which bears interest calculated with reference to the
Prime Rate.
Real Properties shall have the meaning given to it in Section 8.7(1) of
this Agreement.
Release shall mean any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape. injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
Revolving Facility shall have the meaning given to it in Section 2.1(1) of
this Agreement.
Revolving Loan shall mean an extension of credit by the Lender to the
Borrower made available under the Revolving Facility by way of Prime Rate Loans
(and for greater certainty, when reference is made to the outstanding amount of
all Revolving Loans, such amount shall include all outstanding L/C Obligations).
Revolving Maturity Date shall mean April 1, 2004.
Revolving Commitment shall mean U.S. $5,000,000, as cancelled, reduced or
terminated under this Agreement.
Rollover means the rollover of a Loan made by way of Letter of Credit for
an additional Contract Period under Section 2.1(6)(g).
Rollover Date means the Business Day on which a Rollover occurs.
Schedules means the schedules attached to and forming part of this
Agreement.
Security Documents shall mean each of the documents listed in Schedule 5
together with all other security documents provided by the Loan Parties from
time to time in accordance with the terms hereof.
Subordinated Debt shall mean all indebtedness subordinated on terms
satisfactory to the Lender.
Subsidiary shall mean any corporation, association, limited liability
company, joint stock company, business trust limited liability company or any
other business entity of which more than fifty percent (50%) of the outstanding
voting stock, share capital, membership or other interests, as the case may be,
is owned either directly or indirectly by any Person or one or more of its
Subsidiaries, or the management of which is otherwise controlled, directly, or
indirectly through one or more intermediaries, or both, by any Person and/or its
Subsidiaries.
Tangible Net Worth of any Person shall mean the excess of (i) the net book
value of the assets of such Person (excluding from assets however, amounts due,
if any, from affiliated corporations, and patents, patent rights, trademarks,
trade names, franchises, copyrights, licenses, good will and similar intangible
assets) after all appropriate deductions determined in accordance with GAAP
(including, without limitation, reserves for doubtful receivables, obsolescence,
etc.), over (ii) Total Debt of such Person.
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, employment insurance, pension, excise, business, school, property,
occupation, customs, anti-dumping and countervail taxes, surtaxes, duties,
levies, imposts, rates, fees, assessments, withholdings and other charges)
imposed by any governmental authority, 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.
Tecstar shall mean Tecstar, LLC, an Indiana limited liability company and
its successors and assigns.
Total Debt shall mean for any Person, as of any applicable date of
determination, all items of indebtedness, obligation or liability of such
Person, whether matured or unmatured, liquidated or unliquidated, direct or
indirect, absolute or contingent, joint or several, that should be classified as
liabilities in accordance with GAAP, excluding, however, any mortgage
indebtedness of such Person incurred to acquire real estate.
U.S. Dollars, $ and U.S. $ shall mean lawful currency of the United States
of America.
Working Capital shall mean for any Person, as of any applicable date of
determination, Current Assets of such Person less Adjusted Liabilities of such
Person.
SECTION 2
CREDIT FACILITIES
2.1 Revolving Facility
(1) Establishment of Revolving Facility. Subject to the terms and
conditions of this Agreement, the Lender hereby establishes in favour
of the Borrower a revolving term credit facility (the "Revolving
Facility") in the aggregate amount of the Revolving Commitment. The
Lender agrees to make available until the Revolving Maturity Date the
Revolving Commitment in U.S. Dollars by way of Prime Rate Loans.
Subject to Section 2.1(6) below, the Lender also agrees to make
available the Revolving Commitment by way of issuance of Letters of
Credit at the request of the Borrower.
(2) Lender's Obligations. Notwithstanding any provision of this Agreement,
the Lender shall not be obligated to make available to the Borrower a
Revolving Loan if after giving effect to such Loan the aggregate
outstanding amount of all Revolving Loans made available to the
Borrower would exceed the Revolving Commitment.
(3) Availability of Revolving Facility. Notwithstanding any other
provision of this Agreement, the aggregate amount of the Revolving
Loans made to the Borrower shall not exceed the lesser of (A) the
Revolving Commitment, and (B) the Borrowing Base.
(4) Revolving Feature. Subject to the provisions of this Agreement, the
Borrower may increase or reduce the Revolving Loans outstanding under
the Revolving Facility by borrowing, repaying and reborrowing Prime
Rate Loans and causing the issue and re-issue of Letters of Credit.
(5) Purpose. The proceeds of the Revolving Loans shall be used to fund the
working capital needs of the Borrower and other general corporate
purposes, and support letter of credit requirements of the Borrower.
(6) Letters of Credit.
(a) L/C Commitment. Subject to the terms and conditions of this
Agreement and the L/C Agreement, the Lender agrees to make
Revolving Loans by the issue of standby Letters of Credit on any
Business Day prior to the Revolving Maturity Date in such form as
may be approved from time to time by the Lender, provided that
the Lender shall have no obligation to issue any Letter of
Credit, if after giving effect to such issuance the aggregate L/C
Obligations of both Borrowers outstanding to the Lender would
exceed U.S. $500,000.
(b) Currency. Each Letter of Credit shall be issued in U.S. Dollars.
(c) Other Documentation. The issue of a Letter of Credit is subject
to the execution and delivery of an application and agreement or
other specific agreement relative to the instrument in form and
substance satisfactory to the Lender acting reasonably ("L/C
Agreement"). In the event of a conflict between the terms and
conditions of the L/C Agreement and this Agreement, this
Agreement shall prevail.
(d) Retirement. A Letter of Credit may only be retired on its
maturity date which must be a Business Day unless and to the
extent it has been honoured or unless the written consent of the
beneficiary of the instrument has been obtained and the original
instrument has been returned to the Lender.
(e) Drawings. The Borrower shall by no later than 12:00 (noon) on any
day which a drawing is made under a Letter of Credit, pay to the
Lender an amount equal to the amount of such drawing, failing
which the amount of such drawing shall be a Prime Rate Loan.
(f) Term. No Contract Period shall extend beyond the Revolving
Maturity Date.
(g) Rollover. Before the maturity date of any Letter of Credit, the
Borrower shall notify the Lender at its Branch of Account by
notice substantially in the form attached as Schedule 2.1(6)(g)
if it wishes the issue of a replacement Letter of Credit on the
maturity date. If the Borrower fails to provide the foregoing
notice, the maturing Letter of Credit shall expire on its
maturity date.
SECTION 3
BORROWING PROCEDURES
3.1 Borrowing Procedures -General
(1) Notice of Borrowing. All Loans under this Agreement require notice. To
request a Loan, the Borrower shall give the Lender written notice
substantially in the form attached as Schedule 3.1(1), indicating the
details of the requested Loan, at or before the time set out below
opposite the type of Loan that the Borrower wishes to request:
Type of Loan Time of Notice
Prime Rate Loans Before 10:00 a.m. one (1) Business Day
prior to the Drawdown Date
Letters of Credit Before 10:00 a.m. three (3) Business
Days prior to the requested Drawdown Date
Each notice given in respect of a Loan to be made by way of Prime Rate
Loan shall indicate the amount of the required Loan and the date funds
are required. Each notice given in respect of a Loan to be made by way
of Letters of Credit shall indicate the amount of the Letter of Credit
to be issued, the applicable Contract Period, the beneficiary, the
terms of draw under the requested Letter of Credit and all other
relevant information
(2) Interest Determination. Each determination by the Lender of the Prime
Rate shall, in the absence of manifest error, be final, conclusive and
binding on the Borrower.
3.2 [Intentionally Left Blank]
3.3 Reliance on Oral Instructions
The Lender shall be entitled to act upon the oral instructions of any
Person who the Lender, acting reasonably, believes is a Person authorized by the
Borrower to act on the Borrower's behalf. The Lender shall not be responsible
for any error or omission in those instructions or in the performance thereof
except in the case of gross negligence or wilful misconduct by the Lender or its
employees. Any instructions so given shall be confirmed in writing by the
Borrower to the Lender on the same day. The Borrower shall indemnify the Lender
for any loss or expense suffered or incurred by the Lender as a consequence of
the Lender acting upon instructions given or agreements made over the telephone
or by electronic transmission of any type with Persons reasonably believed by
the Lender to have been acting on the Borrower's behalf.
3.4 Deposit of Proceeds of Loans
The Lender shall credit to the Borrower's Account on the applicable
Drawdown Date the proceeds of each Loan.
3.5 Evidence of Obligations
The Lender shall open and maintain at its Branch of Account, accounts and
records evidencing the Obligations of the Borrower to the Lender with respect to
Loans made available by the Lender. The Lender shall record in those accounts by
appropriate entries all amounts on account of those Obligations and all payments
on account thereof. Those accounts and records will constitute, in the absence
of manifest error, prima facie evidence of those Obligations from time to time,
the date each Loan was made and the amounts that the Borrower has paid from time
to time on account of those Obligations.
SECTION 4
INTEREST, FEES AND EXPENSES
4.1 Interest on Prime Rate Loans
(1) Rate. The Borrower shall pay to the Lender interest on Prime Rate
Loans at the applicable Account for Payments at a rate per annum equal
to the Prime Rate plus the Applicable Margin.
(2) Change in Rate. Each change in the fluctuating interest rate
applicable to each Prime Rate Loan will take place simultaneously with
the corresponding change in the Prime Rate without the necessity for
any notice to the Borrower.
(3) Calculation. Interest on Prime Rate Loans shall be payable monthly in
arrears on every Interest Payment Date and on the Revolving Maturity
Date for the period from and including, as the case may be, the
Drawdown Date or the immediately preceding Interest Payment Date to
but excluding the first-mentioned Interest Payment Date or the
Revolving Maturity Date, as applicable, and shall be calculated on a
daily basis on the principal amount of the Prime Rate Loans remaining
unpaid on the basis of the actual number of days elapsed in a year of
365 days.
(4) Adjustments in the Applicable Margin shall be implemented on a
quarterly basis as provided in this Section 4.1(4) based on the
Tangible Net Worth of the Loan Parties on a combined basis. Such
adjustments shall be given prospective effect only, and shall be given
effect on the first day of the first month following the required date
of delivery of the financial statements under Section 9.1 hereunder,
in each case establishing applicability of the appropriate adjustment.
From the date of execution of this Agreement until the required date
of delivery under Section 9.1 of the financial statements for the
fiscal quarter ending March 31, 2003, the margin shall be that set
forth under the Level II column of the pricing matrix attached to this
Agreement as Schedule 2.
4.2 Letter of Credit Fees
Upon the issue of a standby Letter of Credit by the Lender, the Borrower
shall pay to the Lender a fee at a rate equal to two percent (2%) per annum.
Issuance fees shall be calculated on the face amount of the Letter of Credit and
shall be payable to the Lender annually in advance. Issuance fees shall be
calculated on the basis of the number of days in the Contract Period in respect
of the Letter of Credit and a year of 365 days. Each determination by the Lender
of the issuance fee applicable to a Letter of Credit shall, in the absence of
manifest error, be final, conclusive and binding upon the applicable Borrower.
4.2A Unused Fees
The Borrower shall pay to the Lender an unused fee equal to one quarter of
one percent (1/4%) per annum multiplied by the average daily amount by which
Five Million Dollars (U.S.$5,000,000) exceeds the aggregate amount of
outstanding Loans. The unused fee shall be payable quarterly in arrears on the
first day of each calendar quarter (commencing on April 1, 2003) and on the
Revolving Maturity Date. Such fee shall be calculated in the same manner as
interest is calculated hereunder.
4.3 Interest on Overdue Amounts
Upon the occurrence and during the continuation of any Default or Event of
Default and at the election of the Lender confirmed by written notice to the
Borrower, the interest rates applicable to Loans and Letter of Credit fees shall
be increased by 3.00% per annum above the rates or fees otherwise applicable
hereunder (the "Default Rate") and all outstanding Obligations shall bear
interest at the Default Rate applicable thereto. Interest and fees at the
Default Rate shall be payable upon demand made by the Lender and shall be
compounded on each Interest Payment Date.
4.4 Interest Act
For purposes of the Interest Act (Canada), where in this Agreement a rate
of interest is to be calculated on the basis of a year of 365 days, the yearly
rate of interest to which the rate is equivalent is the rate multiplied by the
number of days in the year for which the calculation is made and divided by 365.
4.5 Limit on Rate of Interest
(1) Adjustment. If any provision of this Agreement or any of the other
Documents would obligate the Borrower to make any payment of interest
or other amount payable to the Lender in an amount or calculated at a
rate which would be prohibited by law or would result in a receipt by
the Lender of interest at a criminal rate (as construed under the
Criminal Code (Canada)), then notwithstanding that provision, that
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 result in a receipt by the
Lender of interest at a criminal rate, the adjustment to be effected,
to the extent necessary, as follows:
(a) firstly, by reducing the amount or rate of interest required to
be paid to the Lender under this Section 4; and
(b) thereafter, by reducing any fees, commissions, premiums and other
amounts required to be paid to the Lender which would constitute
interest for purposes of Section 347 of the Criminal Code
(Canada).
(2) Reimbursement. Notwithstanding Section 4.5(1), and after giving
effect to all adjustments contemplated thereby, if the Lender
shall have received an amount in excess of the maximum permitted
by the Criminal Code (Canada), then the Borrower shall be
entitled, by notice in writing to the Lender, to obtain
reimbursement from the Lender in an amount equal to the excess,
and pending reimbursement, the amount of the excess shall be
deemed to be an amount payable by the Lender to the Borrower.
(3) Actuarial Principles. Any amount or rate of interest referred to in
this Section 4.5 shall be determined in accordance with generally
accepted actuarial practices and principles as an effective annual
rate of interest over the term that any Loan 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 pro-rated over that
period of time and otherwise be pro-rated over the period from the
Closing Date to the Revolving Maturity Date and, in the event of a
dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries appointed by the Lender shall be conclusive for the purposes
of that determination.
4.6 Change in Circumstances
(1) Reduction in Rate of Return. If at any time the Lender determines,
acting reasonably, that any change in any Applicable Law or any
interpretation thereof after the date of this Agreement, or compliance
by the Lender with any direction, requirement, guidelines or policies
or request from any regulatory authority given after the date of this
Agreement, whether or not having the force of law, has or would have,
as a consequence of the Lender's obligation under this Agreement, and
taking into consideration the Lender's policies with respect to
capital adequacy, the effect of reducing the rate of return on the
Lender's capital to a level below that which the Lender would have
achieved but for the change or compliance, then from time to time,
upon demand of the Lender, the Borrower shall pay the Lender such
additional amounts as will compensate the Lender for the reduction.
(2) Taxes, Reserves, Capital Adequacy, etc. If, after the date of this
Agreement, the introduction of any Applicable Law or any change or
introduction of a change in any Applicable Law (whether or not having
the force of law) or in the interpretation or application thereof by
any court or by any Governmental Authority, central bank or other
authority or entity charged with the administration thereof, or any
change in the compliance of the Lender therewith now or hereafter:
(a) subjects the Lender to, or causes the withdrawal or termination
of a previously granted exemption with respect to, any Tax or
changes the basis of taxation, or increases any existing Tax on
payments of principal, interest, fees or other amounts payable by
the Borrower to the Lender under or by virtue of this Agreement
(except for Excluded Taxes);
(b) imposes, modifies or deems applicable any reserve, special
deposit, deposit insurance or similar requirement against assets
held by, or deposits in or for the account of, or loans by or any
other acquisition of funds by, an office of the Lender in respect
of any Loan or any other condition with respect to this
Agreement; or
(c) imposes any Tax on reserves or deemed reserves with respect to
the undrawn portion of the commitment of the Lender hereunder;
and the result of any of the foregoing, in the sole determination
of the Lender acting reasonably, shall be to increase the cost
to, or reduce the amount received or receivable by the Lender or
its effective rate of return in respect of making, maintaining or
funding a Loan hereunder, the Lender shall, acting reasonably,
determine that amount of money which shall compensate the Lender
for the increase in cost or reduction in income.
(3) Payment of Additional Compensation. Upon the Lender having determined
that it is entitled to compensation in accordance with the provisions
of this Section 4.6 ("Additional Compensation"), the Lender shall
promptly so notify the Borrower and shall provide to the Borrower a
photocopy of the relevant Applicable Law or request, as applicable,
and a certificate of an officer of the Lender setting forth the
Additional Compensation and the basis of calculation thereof, which
shall be conclusive evidence of the Additional Compensation in the
absence of manifest error. The Borrower shall pay to the Lender within
30 Business Days of the giving of notice the Additional Compensation
for the account of the Lender accruing from the date of the
notification. The Lender shall be entitled to be paid Additional
Compensation from time to time to the extent that the provisions of
this Section 4.6 are then applicable notwithstanding that the Lender
has previously been paid Additional Compensation.
(4) Commercially Reasonable. If it is commercially reasonable in the
opinion of the Lender receiving Additional Compensation under this
Section 4.6, the Lender shall make reasonable efforts to limit the
incidence of that Additional Compensation, including seeking recovery
for the account of the Borrower following the Borrower's request and
at the Borrower's expense, if the Lender, in its sole determination,
would suffer no appreciable economic, legal, regulatory or other
disadvantage as a result.
4.7 Payment of Portion
Notwithstanding any other term or condition of this Agreement, if the
Lender gives the notice provided for in Section 4.6 with respect to any Loan (an
"Affected Borrowing"), the Borrower may, at its option, upon 30 Business Days
notice to the Lender (which notice shall be irrevocable), repay to the Lender in
full the Affected Borrowing outstanding together with accrued and unpaid
interest on the principal amount so repaid up to the date of repayment, together
with such Additional Compensation as may be applicable to the date of payment.
4.8 Illegality
If any Applicable Law, or any change therein or in the interpretation or
application thereof by any court or by any Governmental Authority or central
bank or comparable agency or any other entity charged with the interpretation or
administration thereof, or compliance by the Lender with any request or
direction (whether or not having the force of law) of any Governmental
Authority, central bank or comparable agency or other entity, now or hereafter
makes it unlawful for the Lender to make, fund or maintain a Loan or to perform
its obligations under or by virtue of this Agreement, the Lender may, by written
notice thereof to the Borrower, terminate its obligations to make further Loans
under this Agreement, and the Borrower, if required by the Lender, shall repay
forthwith (or at the end of such longer period as the Lender in its discretion
has agreed) the principal amount of the Loan together with accrued interest
without penalty or bonus and such Additional Compensation as may be applicable
to the date of payment and all other outstanding Obligations to the Lender. If
any change shall only affect a portion of the Lender's obligations under this
Agreement which is, in the opinion of the Lender, severable from the remainder
of this Agreement so that the remainder of this Agreement may be continued in
full force and effect without otherwise affecting any of the obligations of the
Lender or the Borrower under this Agreement, the Lender shall only declare its
obligations under that portion so terminated.
4.9 Indemnity
(1) General. The Borrower shall indemnify the Lender and its directors,
officers, employees, attorneys and agents (each, an "Indemnified
Person") against all suits, actions, proceedings, claims, losses
(other than loss of profits), expenses (including reasonable fees,
charges and disbursements of counsel), damages and liabilities
including, without limitation, liabilities arising under Environmental
Laws (each, a "Claim") that the Lender may sustain or incur as a
consequence of (a) any default by the Borrower under this Agreement or
any other Document, or (b) any misrepresentation (misrepresentation
meaning untrue when made) by the Borrower contained in any writing
delivered to the Lender in connection with this Agreement, or (c) the
Lender entering into this Agreement, or (d) the use of proceeds of the
Credit Facility by the Borrower in contravention of the terms of this
Agreement, or (e) the operations of the Borrower in contravention of
the terms of this Agreement, except that no Indemnified Person will be
indemnified for any Claim resulting from its own gross negligence or
wilful misconduct.
(2) Certificate. A certificate of the Lender setting out the basis for the
determination of the amount necessary to indemnify the Lender pursuant
to this Section 4.9 shall be conclusive evidence, absent manifest
error, of the correctness of that determination.
(3) Survival. It is the intention of the Borrower and the Lender that
Section 3.3 and this Section 4.9 shall supersede any other provisions
in this Agreement which in any way limit the liability of the Borrower
and that the Borrower shall be liable for any obligations arising
under Section 3.3 and this Section 4.9 even if the amount of the
liability incurred exceeds the amount of the other Obligations. The
obligations of the Borrower under these Sections are absolute and
unconditional and shall not be affected by any act, omission or
circumstance whatsoever, whether or not occasioned by the fault of the
Lender, except in respect of gross negligence or wilful misconduct by
it. The obligations of the Borrower under Section 3.3 and this Section
4.9 shall survive the repayment of the other Obligations and the
termination of the Credit Facility.
4.10 Closing Fee
The Borrower shall pay to the Lender on the Closing Date a non-refundable
closing fee in the amount of U.S. $25,000.
SECTION 5
PAYMENTS, REDUCTIONS AND CANCELLATION
5.1 Repayment of the Revolving Facility
All Revolving Loans and other amounts outstanding under the Revolving
Facility shall be paid including, without limitation, principal, interest and
fees, and the Revolving Facility shall be cancelled, on the Revolving Maturity
Date.
5.2 Prepayment
From time to time, prior to the Revolving Maturity Date, the Borrower may
(a) in addition to any other prepayment rights it may have under this Agreement,
prepay, without penalty, in whole or in part, the Loans outstanding under the
Credit Facility provided that all accrued interest with respect to the amount to
be prepaid shall have been paid, and/or (b) reduce and cancel the unused
Revolving Commitment. Reductions and cancellations shall be in a minimum amount
of U.S. $100,000 or whole multiples thereof. The Borrower shall give ten (10)
Business Days' prior notice to the Lender of its desire to make any prepayment,
reduction or cancellation substantially in the form attached hereto as Schedule
5.2. Any prepayment shall be applied in accordance with Section 5.6.
5.3 Payments Generally
All amounts owing in respect of the Credit Facility, whether on account of
principal, interest or fees or otherwise, shall be paid in U.S. Dollars. Each
payment under this Agreement shall be made for value on the day the payment is
due, provided that if that day is not a Business Day, the payment shall be due
on the Business Day next following such day, unless the Business Day next
following the day is in the next following month, in which event the payment
shall be made on the immediately preceding Business Day. All interest and other
fees shall continue to accrue until payment has been received by the Lender.
Each payment shall be made at the Account for Payments at or before 1:00 p.m. on
the day the payment is due.
5.4 Taxes
(1) Payments. All payments to be made by or on behalf of the Borrower
under or with respect to this Agreement or any other Document are to
be made free and clear of and without deduction or withholding for, or
on account of, any present or future Taxes, unless such deduction or
withholding is required by Applicable Law. If the Borrower is required
to deduct or withhold any Taxes from any amount payable to the Lender
(a) the amount payable shall be increased as may be necessary so that,
after making all required deductions or withholdings (including
deductions and withholdings applicable to, and taking into account all
Taxes on, or arising by reason of the payment of, additional amounts
under this Section 5.4), the Lender receives and retains an amount
equal to the amount that it would have received had no such deductions
or withholdings been required, (b) the Borrower shall make such
deductions or withholdings, and (c) the Borrower shall remit the full
amount deducted or withheld to the relevant taxing authority in
accordance with Applicable Laws. Notwithstanding the foregoing, the
Borrower shall not be required to pay additional amounts in respect of
Excluded Taxes.
(2) Indemnity. The Borrower shall indemnify the Lender for the full amount
of any Taxes (other than Excluded Taxes) imposed by any jurisdiction
on amounts payable by the Borrower under this Agreement or any other
Document and paid by the Lender and any liability (including
penalties, interest and reasonable expenses) arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally
asserted, and any Taxes levied or imposed with respect to any
indemnity payment made under this Section 5.7. The Borrower shall
also, indemnify the Lender for any Taxes (other than Excluded Taxes)
that may arise as a consequence of the execution, sale, transfer,
delivery or registration of, or otherwise with respect to this
Agreement or any other Document. The indemnifications contained in
this Section 5.4(2) shall be made within 30 days after the date on
which the Lender makes written demand therefor.
(3) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes by the Borrower, the Borrower shall furnish to the
Lender the original or a certified copy of a receipt evidencing
payment by the Borrower of any Taxes with respect to any amount
payable to the Lender hereunder.
(4) Excluded Taxes. For the purpose of Section 4.6(2)(a) and this Section
5.4, "Excluded Taxes" means, in relation to the Lender, any Taxes
imposed on the net income or capital of the Lender by any Governmental
Authority as a result of the Lender (a) carrying on a trade or
business or having a permanent establishment in any jurisdiction or
political subdivision thereof, (b) being organized under the laws of
such jurisdiction or any political subdivision thereof, or (c) being
or being deemed to be resident in such jurisdiction or political
subdivision thereof.
(5) Survival. The Borrower's obligations under this Section 5.4 shall
survive the termination of this Agreement and the payment of all
amounts payable under or with respect to this Agreement.
5.5 No Set-Off
All payments to be made by the Borrower under any Document shall be made
without set- off or counterclaim and without any deduction of any kind.
5.6 Application of Payments Before Exercise of Rights
Subject to the provisions of this Agreement, all payments made by or on
behalf of the Borrower before the exercise of any rights arising under Section
12.3, or otherwise, shall be paid to the Lender and applied to the Obligations
as the Lender may deem advisable in its sole discretion.
5.7 Application of Payments After Exercise of Rights Under Section 12
All payments made by or on behalf of the Borrower after the exercise of any
rights arising under Section 12 (including proceeds of any enforcement action
taken with respect to the Collateral) shall be paid to the Lender and applied to
the Obligations as the Lender may deem advisable in its sole discretion.
SECTION 6
SECURITY
6.1 Further Assurances -Security
Each Loan Party shall, forthwith and from time to time on demand, execute
and do or cause to be executed and done all assurances and things which in the
opinion of the Lender may reasonably be required to give the Lender (or its
agent) (so far as may be possible under any relevant laws) a security interest,
charge or similar Lien satisfactory to the Lender over all of the property and
assets of the Loan Parties.
6.2 Registration and Perfection
Forthwith after execution and delivery of the Security Documents and from
time to time, each Loan Party shall, at the Lender's request and at the expense
of the Borrower register, file or record the same (or instruments granting at
least equivalent security) in all offices where such registration, filing or
recording is in the opinion of the Lender necessary or of advantage to the
creation or perfection of the Security Documents and the Liens created thereby
or intended so to be including, without limitation, any land registry offices;
and the applicable Loan Party shall deliver to the Lender on demand certificates
establishing such registration, filing or recording, and will, at the Lender's
request, do, observe and perform all matters and things necessary or expedient
to be done, observed and performed for the purpose of creating, maintaining and
preserving as valid and effective security the Liens constituted by the Security
Documents and creating, maintaining and preserving the priority thereof.
SECTION 7
CONDITIONS PRECEDENT
7.1 Closing Documentation
The Borrower agrees to furnish the Lender on the Closing Date prior to the
initial Loan under this Agreement, all in form and substance satisfactory to the
Lender:
(a) this Agreement duly executed by all parties thereto;
(b) each Security Document and all other Documents duly executed by all
the parties thereto;
(c) opinions of legal counsel to the Loan Parties;
(d) officer's certificates of each Loan Party certifying (a) copies of
resolutions of the board of directors or members of each Loan Party
evidencing approval of the borrowing hereunder or guarantee thereof;
(b) copies of the articles of incorporation and bylaws or other
constituent documents, together with all amendments thereto, of each
Loan Party; and (c) the incumbency and specimen signatures of those
Persons authorized by resolutions of each Loan Party to execute this
Agreement and all documents and instruments related thereto;
(e) certificates of status (or its equivalent) in respect of each Loan
Party from the jurisdiction of incorporation of such Loan Party;
(f) all registrations, recordings and filings of or with respect to the
Security Documents and other consents, acknowledgements, waivers or
discharges from third parties as necessary, in the opinion of the
Lender, to grant to the Lender (or its agent), a first priority
perfected security interest and Lien in the Collateral;;
(g) duly executed payout letter together with the release, discharge and
termination of all Liens and registrations of creditors in respect of
refinanced short term and long term indebtedness of the Borrower;
(h) certificate(s) of insurance (i) evidencing the insurance requirements
under this Agreement, and (ii) showing the Lender (or its agent) as
loss payee on all property insurance and as additional insured on all
liability policies (such certificates to contain a standard mortgage
clause and a 30 day notice of cancellation/termination clause);
(i) a certificate of the chief executive officer of each of the Borrowers,
that as of the Closing Date, there will have been (i) since the
December 31, 2002 audited financial statements of each Loan Party, no
material adverse change in the business, financial or other condition
of any of the Loan Parties, the industry in which any Loan Party
operates, or the Collateral which will be subject to the Security
Documents or in the prospects or projections of any of the Loan
Parties, (ii) no litigation threatened or commenced which, if
successful, would have a material adverse impact on a Loan Party, its
business, or its ability to repay the Loans, or which would challenge
the transactions under consideration, and (iii) since the December 31,
2002 audited financial statements of each Loan Party, no material
increase in the liabilities, liquidated or contingent, of each such
Loan Party, or a material decrease in the assets of each such Loan
Party;
(j) Lien search results in form and substance satisfactory to the Lender,
including bankruptcy and insolvency, bank act, executions and personal
property search results evidencing no Liens ranking in priority to the
security of the Lender (or its agent);
(k) such other documents as the Lender may reasonably request.
7.2 Fees and Expenses
Prior to the making of any Loan under this Agreement, the Borrower shall
have paid or caused to be paid all fees and expenses of the Lender hereunder
including, without limitation, payment of legal fees and expenses and the
upfront fee in the amount of U.S.$25,000 required under the terms of Lender's
commitment letter to the Borrower.
7.3 Conditions Precedent to All Loans
The obligation of the Lender to make a Loan hereunder is subject to
fulfillment of the following conditions precedent on the date such Loan is made:
(a) no Default or Event of Default has occurred and is continuing or would
arise as a result of making such a Loan; and
(b) the representations and warranties of the Borrower contained in
Section 8 shall be true and correct in all respects on the date such
Loan is obtained as if such representations and warranties were made
on such date.
SECTION 8
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants the following to the Lender, which
representations and warranties shall be deemed to be continuing representations
and warranties during the entire life of this Agreement and which
representations and warranties shall be deemed to be repeated on each Drawdown
Date, mutatis mutandis:
8.1 Existence, Power and Qualification; Location of Offices and Collateral
The Borrower is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
qualified and authorized to do business in each jurisdiction in which failure to
so qualify would materially impair the Borrower's financial condition or the
ability of the Borrower to carry on its business; the execution, delivery and
performance of this Agreement, and any other documents and instruments required
under this Agreement are within the corporate power and capacity of the
Borrower, have been duly authorized, are not in contravention of any law
applicable to the Borrower or the terms of either of the articles of
incorporation or bylaws of the Borrower, and do not require the consent or
approval of any governmental body, agency or authority; and this Agreement and
any other documents and instruments required under this Agreement, when executed
or issued and delivered under this Agreement and appropriate registration
statements are filed, will constitute valid, binding and enforceable obligations
in accordance with their terms (subject to limitation or enforcement, if any, by
equitable principles, or by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting creditors rights generally). The chief
executive office and principal place of business of the Borrower and the
location of all inventory, records concerning accounts receivable and all other
Collateral subject to the Security Documents, are located as set forth in
Schedule 8.1 for the Borrower.
8.2 Corporate Name
The Borrower's corporate name is exactly as set forth in the signature
pages of this Agreement and the Borrower has not changed its corporate name,
purchased any substantial assets or Capital Stock of any entity, or merged or
amalgamated with any other entity, nor has it used an assumed name(s) or any
business names or trade names.
8.3 Authorizations and Approvals
The execution, delivery and performance of this Agreement, the Security
Documents and any other Documents by the Borrower, (i) are not in contravention
of the unwaived terms of any indenture, agreement or undertaking to which the
Borrower is a party or by which the Borrower is bound, the violation of which
could materially impair the Borrower's financial condition or ability to carry
on its business; (iii) do not violate any law or regulation, or any order or
decree of any Governmental Authority; (iv) do not conflict with or result in the
breach or termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Person is a party or
by which such Person or any of its property is bound; (v) do not contravene any
provision of the Borrower's constating documents; (vi) do not require the
consent or approval of any Governmental Authority or any other Person, except
those that have been duly obtained, made or complied with prior to the effective
date of this Agreement; and (vii) do not result in or require the creation or
imposition of any Lien of any nature whatsoever upon any property or assets of
such party, other than in favour of the Lender (or its agent).
8.4 Litigation
No material litigation or other proceeding before any court or
administrative agency is pending, or to the knowledge of the officers of the
Borrower are threatened against any Loan Party.
8.5 Title to Assets and Liens
The Borrower has good and marketable title to all of the properties and
assets reflected on the balance sheet referred to in Section 8.12 hereof and
there are no Liens on any assets of the Borrower, except Permitted Liens. The
Borrower does not own any interest in (1) any patents or have any patent
applications pending, or (2) any trademarks, trademark registrations or
tradenames or has any trademark or tradename applications pending. The Borrower
has all rights to use all trade names, trademarks, patents and other
intellectual and industrial property in any way associated with or relating to
the Collateral and to assign such rights to the Lender (or its agent) on an
unqualified basis for the purposes of exercising its rights and remedies in
respect of the Collateral, which rights and remedies shall not be adversely
affected by any event, including, without limitation, the bankruptcy, insolvency
or reorganization of any Affiliate of the Borrower or of any other Person.
8.6 Perfection of Security
The security interests granted by the Security Documents will upon filing
of appropriate financing statements in the appropriate jurisdictions and with
the appropriate public offices constitute valid and continuing first priority
liens on, and first priority perfected security interest in, the Collateral in
favour of the Lender (or its agent), prior to all Liens except Permitted Liens.
8.7 Real Properties
(1) Schedule 8.7(1) lists all real or immovable property owned (the "Owned
Properties") or leased (the "Leased Properties") by the Borrower and
sets forth the municipal addresses thereof ( collectively, the "Real
Properties").
(2) The Borrower is the absolute legal and beneficial owner of, and has
good and marketable title in fee simple to, the Owned Properties
(including all buildings and structures thereon or appurtenant
thereto), free and clear of any and all Liens other than Permitted
Liens.
(3) There are no agreements, options, contracts or commitments to sell,
transfer or otherwise dispose of the Owned Properties or which would
restrict the ability of the Borrower to transfer the Owned Properties.
8.8 Leases and Leased Properties
(1) Schedule 8.7(1) describes all leases or agreements to lease under
which the Borrower leases the Leased Properties (collectively, the
"Leases"). The names of the payees under the Leases, the description
of the Leased Properties (all of which are included in the Real
Properties), the term, rent and other amounts payable under the Leases
are accurately described in Schedule 8.7(1).
(2) The Borrower is exclusively entitled to all rights and benefits as
lessee under the Leases, and the Borrower has not sublet, assigned,
licensed or conveyed any rights in the Leased Properties or in the
Leases to any other Person.
(3) All rental and other payments and other obligations required to be
paid and performed by the Borrower pursuant to the Leases have been
duly paid and performed. The Borrower is not in default of any of its
obligations under the Leases.
(4) The terms and conditions of the Leases will not be affected by, nor
will any of the Leases be in default as a result of the completion of
the transactions contemplated herein.
8.9 Authorized and Issued Capital
The authorized and issued capital (including all shares, options, warrants,
general or limited partnership interests or other equivalents of or in a
corporation, partnership, limited partnership or equivalent entity) of the
Borrower, Subsidiaries of the Borrower and Affiliates of the Borrower and the
registered holders of such capital are as set forth in Schedule 8.9 hereto
(together with a corporate chart) and all of the issued and outstanding shares
and securities are issued and outstanding as fully-paid and non-assessable and
no Person has any option or right to acquire any shares in the capital of the
Borrower, Subsidiaries of the Borrower and Affiliates of the Borrower except as
set forth in such Schedule. No capital of the Borrower has been issued in
violation of any Applicable Law, the articles of incorporation, by- laws or
other constating documents of the Borrower or the terms of any shareholders'
agreement or any other agreement to which the Borrower is a party or by which it
is bound.
8.10 ERISA
The Borrower does not maintain or contribute to any employee pension
benefit plan subject to Title IV of the "Employee Retirement Income Security Act
of 1974" (herein called "ERISA").
8.11 Canadian Benefit and Pension Plans
Schedule 8.11 sets forth all Canada Benefit Plans and Canada Pension Plans
adopted by the Borrower as of the date hereof. 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. The Borrower does not make any contributions in
respect of a multi-employer pension plan. All material obligations of the
Borrower (including fiduciary, funding, investment and administration
obligations) required to be performed in respect of the Canadian Pension Plans
and the Canadian Benefit 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 of the Canadian
Pension Plans or the Canadian Benefit Plans. The most recent actuarial report
respecting each of the Canadian Pension Plans has been filed with all applicable
regulatory authorities in a timely fashion and has been delivered to the Lender.
8.12 Financial Statements
To the best of the Borrower's knowledge, the internal financial statements
of each of the Loan Parties dated December 31, 2002 and the most recent
financial statements of each of the Loan Parties, previously furnished to the
Lender, are complete and correct and fairly present the financial condition of
the Loan Parties and the results of their operations as required by GAAP; since
said dates there have been no material adverse changes in the financial
condition of any Loan Party; no Loan Party has contingent obligations (including
any liability for taxes) not disclosed by or reserved against in the financial
statements, and at the present time there are no material unrealized or
anticipated losses from any present commitment of any Loan Party required by
GAAP to be disclosed.
8.13 Tax Returns
All Tax returns and Tax reports of each Loan Party, required by law to be
filed, have been duly filed or extensions obtained, and all Taxes (other than
those presently payable without penalty and those currently being contested in
good faith for which adequate reserves have been established) upon the Loan
Parties (or any of their properties) which are due and payable have been paid.
The charges, accruals and reserves on the books of the Loan Parties in respect
of Taxes for all periods are adequate.
8.14 No Default
To the best of the Borrower's knowledge, there exists no default under the
provision of any instrument evidencing any Debt of any Loan Party or of any
agreement relating thereto.
8.15 Compliance with Laws
Each Loan Party is in the conduct of its business, in compliance in all
material respects with all applicable Canadian and United States federal, state,
provincial or local laws, statutes, ordinances and regulations applicable to
them. Each Loan Party has all approvals, authorizations, consents, licenses,
orders and other permits of all governmental agencies and authorities, whether
Canadian or United States federal, state or local, required to permit the
operation of its business as presently conducted, except for any such as may be
obtained in the ordinary course of business and lack of which has no material
adverse effect on the business as presently conducted.
8.16 Full Disclosure
No representation or warranty by a Loan Party in this Agreement or any
Security Document, nor any statement or certificate (including financial
statements) furnished or to be furnished to the Lender pursuant hereto contains
or will contain any untrue statement of any fact or omits or will omit to state
a fact necessary to make such representation, warranty, statement or certificate
not misleading when made; provided, as to financial statements, this
representation is based on the best knowledge of the Borrower.
8.17 Environmental Litigation
No Loan Party is a party to any litigation or administrative proceeding,
nor is any litigation or administrative proceeding threatened against any Loan
Party, which in either case (A) asserts or alleges that a Loan Party violated
Environmental Laws, (B) asserts or alleges that a Loan Party is required to
clean up, remove or take remedial or other response action due to the disposal,
depositing, discharge, leaking or other release of any hazardous substances or
materials, or (C) asserts or alleges that a Loan Party is required to pay all or
a portion of the cost of any past, present or future cleanup, removal or
remedial or other response action which arises out of or is related to the
disposal, depositing, discharge, leaking or other release of any hazardous
substances or materials.
8.18 Environmental Conditions
To the best knowledge of the Borrower, there are no conditions existing
currently or likely to exist during the term of this Agreement which would
subject a Loan Party to damages, penalties, injunctive relief or cleanup costs
under any applicable Environmental Laws or which require or are likely to
require cleanup, removal, remedial action or other response pursuant to
applicable Environmental Laws by such Loan Party.
8.19 Environmental Laws
No Loan Party is subject to any judgment, decree, order or citation related
to or arising out of applicable Environmental Laws and no Loan Party has been
named or listed as a potentially responsible party by any governmental body or
agency in a matter arising under any applicable Environmental Laws.
8.20 Environmental Approvals
To the best knowledge of the Borrower, each Loan Party has all permits,
licenses and approvals required under applicable Environmental Laws.
8.21 Margin Stock
No Loan Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, and no part of the proceeds of any loan
hereunder will be used, directly or indirectly, to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock or for any other purpose which might violate the provisions of
Regulation G, T, U or X of the said Board of Governors. No Loan Party owns any
margin stock.
8.22 Insurance
The Borrower maintains insurance coverage in compliance with the
requirements of Section 9.5 particulars of which are set out in Schedule 8.22
hereto.
8.23 Labour Matters
To the best knowledge of the Borrower, as of the Closing Date (1) no
strikes or other material labour disputes against any of the Loan Parties are
pending or threatened; (2) all payments due from any Loan Party for employee
health and welfare insurance have been paid or accrued as a liability on the
books of such Loan Party; (3) except as set forth in Schedule 8.23, no Loan
Party is a party to or bound by any collective bargaining agreement, management
agreement, consulting agreement or any employment agreement (and true and
complete copies of any agreements described on Schedule 8.23 have been delivered
to the Lender); and (4) there is no organizing activity involving any Loan Party
pending or threatened by any labour union or group of employees.
8.24 No Event of Default
To the best knowledge of the Borrower, no event of default listed in
Section 12.1 ("Event of Default") has occurred and is continuing and no event
that, with the lapse of time and/or giving of notice or both, would become an
Event of Default ("Default") has occurred and is continuing.
SECTION 9
AFFIRMATIVE COVENANTS
Except as otherwise specified, the Borrower covenants and agrees that it
will, so long as the Lender is committed to make any Loans under this Agreement
and so long as any indebtedness remains outstanding under this Agreement:
9.1 Financial and Other Information
Furnish to the Lender:
(a) as soon as available and in any event within ninety (90) days after
the end of each fiscal year annual audited individual and consolidated
financial statements for each Loan Party, including a balance sheet as
of the end of such fiscal year and the related statements of income,
retained earnings and cashflows for such fiscal year, each prepared in
accordance with GAAP and audited by independent certified public or
chartered accountants reasonably acceptable to the Lender and a
reliance letter from independent auditors in favour of the Lender;
(b) as soon as available and in any event within thirty (30) days after
the end of each month, a copy of the management prepared individual
financial statements for each Loan Party, including a balance sheet
and related statements of income, retained earnings and cashflows for
such month, prepared in accordance with GAAP, each certified (subject
to year-end adjustments) by an officer of the applicable Loan Party;
(c) within twenty (20) days after and as of the end of each month (and at
such other times as the Lender may request) (i) a Borrowing Base
Certificate for the previous month, (ii) agings of trade receivables
and payables (aged as of invoice date), (iii) agings of the Accounts
and a schedule identifying each Eligible Account (not previously so
identified), and (iv) reports as to the amount of Eligible Inventory,
(for the purpose of this paragraph 9.1(e), each capitalized term used
in this paragraph and not defined herein shall have the meaning given
to it in the Advance Formula Agreement);
(d) within seven (7) days after and as of the end of each week, a
Borrowing Base Certificate in form and detail satisfactory to Lender;
and
(e) from time to time, such further information regarding the business
affairs and financial condition of any Loan Party, as the Lender may
reasonably request.
9.2 Claims and Taxes
Pay and discharge all Taxes and all contractual obligations calling for the
payment of money, before any interest or penalty for non-payment thereof becomes
payable, unless and to the extent only that such payment is being contested in
good faith and with adequate reserves.
9.3 Access and Audits
Permit the Lender, through its authorized attorneys, accountants and
representatives, to examine the books, accounts, records, ledgers and assets of
every kind and description of the Borrower at all reasonable times during normal
business hours upon oral or written request of the Lender. Notwithstanding the
foregoing, the Lender may, at the expense of the Borrower, arrange for an annual
(or more frequently, if required by the Lender) account receivables and
inventory audits in form and substance satisfactory to the Lender.
9.4 Notice of Default or Material Adverse Change
Promptly notify the Lender of any condition or event of which the Borrower
becomes aware which constitutes a Default or Event of Default and promptly
inform the Lender of any material adverse change in the financial condition of
any Loan Party.
9.5 Insurance
Maintain, and shall cause each of its Subsidiaries to maintain, insurance
coverage, adequate fire and extended risk coverage, business interruption,
workers' compensation, public liability and such other insurance coverages as
are customarily carried by companies which are engaged in the same or similar
business to the business of the Borrower or as may be required by the Lender.
All insurance policies shall be in such amounts, upon such terms, and be in form
acceptable to the Lender, and shall be carried with insurers acceptable to the
Lender. The Borrower shall provide the Lender with a binder of insurance or
other evidence satisfactory to the Lender of all insurance coverages and that
the policies are in full force and effect, and (a) all property and business
interruption insurance coverages upon the Collateral shall name the Lender (or
its agent) as a loss payee and include the standard non-contributory "mortgagee"
or "secured party" clause approved by the Insurance Bureau of Canada, and
provide that no cancellation, reduction in amount or change in coverage thereto
shall be effective until at least thirty (30) days after receipt by the Lender
(or its agent) of written notice thereof and shall be endorsed to require thirty
(30) days advance written notice to the Lender (or its agent) of any
cancellation of coverage, and (b) all general liability and other liability
insurance shall name Lender (or its agent) as additional insured. If the
Borrower or any Subsidiary thereof fails to maintain insurance as provided in
this Agreement, such failure shall be a default under Section 12 and the Lender
may obtain insurance but shall have no obligation to do so; all amounts so
expended by the Lender shall be added to the obligations of the Borrower
hereunder or shall be payable on demand at the Lender's option.
9.6 Corporate Existence
Preserve and maintain the legal existence of the Borrower and such of its
rights, licenses and privileges as are material to its business and operations;
and qualify and remain qualified to do business in each jurisdiction in which
such qualification is material to its business and operations or the ownership
of its properties. The Borrower shall keep adequate books and records of account
with respect to its business activities, in which proper entries, reflecting all
of its financial transactions, are made in accordance with GAAP.
9.7 Compliance with Laws
Comply in all material respects with all applicable laws, rules,
regulations and orders of any governmental authority.
9.8 Advance Formula Agreement
Maintain the formula set forth in the Advance Formula Agreement and in the
event that indebtedness shall at any time exceed such formula including, without
limitation, due to exchange rate fluctuations, then the Borrower shall forthwith
pay to the Lender sufficient sums to reduce the indebtedness thereunder to
comply with said formula.
9.9 ERISA Compliance
Comply in all respects with all requirements imposed by ERISA as presently
in effect or hereafter promulgated and promptly notify the Lender if the
Borrower commences to maintain or contribute to any employee pensions benefit
plan subject to ERISA and to provide the Lender with such further disclosure as
it may request with respect thereto.
9.10 Canada Benefit and Pension Plans
For each existing Canadian Pension Plan, the Borrower shall 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. For each Canadian
Pension Plan hereafter adopted or contributed to by the Borrower which is
required to be registered under the ITA or any other applicable laws, the
Borrower shall use its best efforts to seek and receive confirmation in writing
from the applicable regulatory authorities to the effect that such plan is
unconditionally registered under the ITA and such other applicable laws. For
each existing Canadian Pension Plan and Canadian Benefit Plan hereafter adopted
or contributed to by the Borrower, the Borrower shall in a timely fashion
perform in all material respects all obligations (including fiduciary, funding,
investment and administration obligations) required to be performed in
connection with such plan and the funding therefor.
9.11 Financial Covenants
The Borrower shall maintain at all times on a combined basis with Tecstar:
(a) A ratio of Total Debt to Tangible Net Worth of not more than the
following amounts during the periods specified below:
December 31, 2002 through September 29, 2003 10.0 to 1.0
September 30, 2003 through March 30, 2004 6.0 to 1.0
March 31, 2004 and thereafter 5.0 to 1.0
(b) A Tangible Net Worth of not less than the following amounts during the
periods specified below:
December 31, 2002 through March 30, 2003 $1,000,000
March 31, 2003 through June 29, 2003 $1,500,000
June 30, 2003 through September 29, 2003 $2,000,000
September 30, 2003 through December 30, 2003 $2,500,000
December 31, 2003 through March 30, 2004 $2,750,000
March 31, 2004 and thereafter $3,000,000
(c) Working Capital of not less than the following amounts during the
periods specified below:
December 31, 2002 through March 30, 2003 ($2,500,000)
March 31, 2003 through June 29, 2003 ($2,250,000)
June 30, 2003 through September 29, 2003 ($2,000,000)
September 30, 2003 through December 30, 2003 ($1,750,000)
December 31, 2003 through March 30, 2004 ($1,500,000)
March 31, 2004 and thereafter ($1,250,000)
9.12 Compliance Certificate
The Borrower shall furnish to the Lender concurrently with the delivery of
each of the financial statements required by Section 9.1(a) and 9.1(b) hereof, a
statement prepared and certified by the chief financial officer of the Borrower
(a) setting forth all computations necessary to show compliance with the
financial covenants set forth in Section 9.11 as of the date of such financial
statements, (b) stating that as of the date thereof, no condition or event which
constitutes a Default or an Event of Default hereunder has occurred and is
continuing, or if any such event or condition has occurred and is continuing or
exists, specifying in detail the nature and period of existence thereof and any
action taken with respect thereto taken or contemplated to be taken by the Loan
Parties and (c) stating that the signer has personally reviewed this Agreement
and that such certificate is based on an examination sufficient to assure that
such certificate is accurate.
9.13 Banking Relationship
The Borrower shall maintain all bank accounts with the Lender.
9.14 Further Assurances
At any time or from time to time, upon the request of the Lender, and at
the sole expense of the Borrower, the Borrower shall execute and deliver or
cause to be executed and delivered such further documents and do such other acts
and things as the Lender may reasonably request in order to effect fully the
purpose of this Agreement and other agreements contemplated hereby and to
provide for payment of and security for the Loans made hereunder and the rights
and powers granted herein in accordance with the terms of this Agreement,
including, without limitation, the filing of any financing or continuation
statements under the relevant personal property security legislation with
respect to the liens and security interests granted in the Security Documents,
transferring collateral a security interest in which is perfected by possession
to Lender's (or its agent's) possession, and using its best efforts to obtain
waivers from landlords and mortgagees. The Borrower also hereby authorizes the
Lender (or its agent) to file any financing or continuation statements without
the signature of such Loan Party, as applicable, to the extent permitted by
applicable law.
SECTION 10
NEGATIVE COVENANTS
Except as otherwise specified, the Borrower covenants and agrees that so
long as the Lender is committed to make any Loans under this Agreement and
thereafter so long as any indebtedness remains outstanding under this Agreement,
the Borrower will not, and will cause its Subsidiaries not to, without the prior
written consent of the Lender:
10.1 Changes in Capital Structure
Purchase, acquire or redeem any of its Capital Stock or make any material
change in its capital structure, organizational documents or general business
objects or purposes.
10.2 Fundamental Change
Fundamentally change the nature of its business, enter into any
amalgamation, merger, consolidation, reorganization or recapitalization, or
reclassify its Capital Stock or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution), or convey, sell, assign, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or
substantially all of its business, property or assets, whether now owned or
hereafter acquired, or acquire by purchase or otherwise all or substantially all
the business, property or assets, of any Person or any shares of stock of any
Person except in connection with a corporate restructuring of the Loan Parties
which has been approved by the Lender in writing.
10.3 Dispositions
Sell, assign, transfer, convey or otherwise dispose of its assets, whether
now owned or hereafter acquired, except sales of inventory in the ordinary and
usual course of business and sales or other dispositions of machinery and
equipment to the extent not exceeding market value of C$100,000 or the
Equivalent Amount thereof during any single fiscal year.
10.4 Guarantees
Guarantee or otherwise in any way become or be responsible for the
obligations of any other Person (whether by agreement or otherwise) to purchase
the indebtedness of any other Person through the purchase of goods, supplies or
services, or by way of stock purchase, capital contribution, advance or loan for
the purpose of paying or discharging the indebtedness of any other Person, or
otherwise, except guarantees in favor of the Lender and except as listed in
Schedule 10.4.
10.5 Indebtedness
Incur, create, assume or permit to exist any Debt, except:
(a) current unsecured trade, utility or non-extraordinary accounts payable
arising in the ordinary course of business;
(b) all the Loans and other Obligations hereunder;
(c) purchase money indebtedness and Capital Leases in respect of machinery
and equipment, not to exceed C$250,000, or the Equivalent Amount
thereof in the aggregate at any time outstanding;
(d) existing indebtedness described in attached Schedule 10.5(d).
10.6 Dividends
Declare or pay any dividends on, or make any other distribution (whether by
reduction of capital or otherwise) with respect to, any shares of any of its
capital stock.
10.7 Investments
Purchase or hold beneficially any stock or other securities of, or make any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, or acquire any
interest whatsoever in, any other Person or entity, except for existing loans
and advances described in attached Schedule 10.7 and loans and advances
permitted by Section 10.11.
10.8 Liens and Encumbrances
Create, incur, assume or suffer to exist any Lien upon any of its property
or assets, whether now owned or hereafter acquired, except for Permitted Liens.
10.9 Business Activity
Engage in any business other than the business in which the Borrower or
such Subsidiary is engaged as of the date hereof or any businesses or activities
substantially similar or related thereto or take any material action except in
the ordinary and usual course of business of the Borrower or such Subsidiary.
10.10 Change of Name; Business Offices
Change its name, identity, jurisdiction of incorporation or relocate its
chief executive office or any of its business locations unless the Borrower
shall have given the Lender at least thirty (30) days prior written notice
thereof and shall have taken all action (or made arrangements to take such
action substantially simultaneously with such change if it is impossible to take
such action in advance) necessary or reasonably requested by the Lender to
maintain the perfection and priority of the Lender's (or its agent's) Lien in
the Collateral and to amend any financing statements, continuation statements or
other documents so that such statements or documents are not seriously
misleading.
10.11 Extension of Credit
Make any loans, advances of credit or extension of credit to any Person,
except sales on open account or in the ordinary course of business.
10.12 ERISA
Directly or indirectly, enter into, maintain or make contributions to any
employee pension plan that is subject to Title IV or ERISA.
10.13 Canada Benefit and Pension Plans
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; (b) permit to exist any event or condition in respect of any Canadian
Pension Plan which presents the risk of liability to the Borrower; (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; (d) 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; (e)
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
the Borrower or any of its Subsidiaries within thirty (30) days after the date
such payment becomes due, unless such payment is being contested in good faith;
(f) make any improper withdrawals or applications of assets of a Canadian
Pension Plan or Canadian Benefit Plan; (g) accept payment of any amount from any
Canadian Pension Plan; or (h) merge any Canadian Pension Plan with any other
pension plan.
10.14 Subsidiaries
Create or acquire any Subsidiary.
10.15 Subordination of Indebtedness
Subordinate any indebtedness due to any Loan Party.
10.16 Capital Expenditures
Make or become obligated to make Capital Expenditures in excess of
C$500,000 or the Equivalent Amount thereof in the aggregate for each fiscal
year.
10.17 Accounting Practices
Make any significant change in accounting treatment and reporting practices
except for changes concurred in by their accountants and the Lender.
10.18 Hedging Activities
Enter into or engage in any transaction involving interest rate, currency
or commodity options, swaps, futures contracts or similar transactions.
10.19 Sale -Leasebacks
Engage in any sale-leaseback, synthetic lease or similar transaction
involving any of its assets.
10.20 Operating Leases
Enter into any operating lease of equipment or real estate (with any third
party), if the aggregate for all such operating lease payments payable in any
year for the Loan Parties and their Subsidiaries on a consolidated basis would
exceed C$500,000 or the Equivalent Amount thereof.
10.21 Fiscal Year End
Make any change to its fiscal year-end without the prior written consent of
the Lender.
SECTION 11
ENVIRONMENTAL PROVISIONS
11.1 Compliance with Environmental Laws
The Borrower shall comply with all applicable Environmental Laws in a
timely manner.
11.2 Environmental Notices
The Borrower shall provide to the Lender, immediately upon receipt, copies
of any correspondence, notice, pleading, citation, indictment, complaint, order,
decree or other document from any source asserting or alleging a circumstance or
condition which requires or may require a financial contribution by the Borrower
or a cleanup, removal, remedial action or other response by or on the part of
the Borrower under applicable Environmental Laws or which seeks damages or
civil, criminal or punitive penalties from the Borrower for an alleged violation
of Environmental Laws.
11.3 Environmental Conditions
The Borrower shall promptly notify the Lender in writing as soon as the
Borrower becomes aware of any condition or circumstance which makes the
environmental warranties or representations in this Agreement incomplete or
inaccurate as of any date.
11.4 Environmental Consultant
In the event of any condition or circumstance that makes any environmental
warranty, representation and/or agreement incomplete or inaccurate as of any
date, the Borrower shall, at its sole expense, retain an environmental
professional consultant, reasonably acceptable to the Lender, to conduct a
thorough and complete environmental audit regarding the changed condition and/or
circumstance and any environmental concerns arising from that changed condition
and/or circumstance. A copy of the environmental consultant's report will be
promptly delivered to the Lender upon completion.
11.5 Environmental Audit
At any time the Borrower, directly or indirectly through any professional
consultant or other representative, determines to undertake an environmental
audit, assessment or investigation, the Borrower, shall promptly provide the
Lender with written notice of the initiation of the environmental audit, fully
describing the purpose and intended scope. Upon receipt, the Borrower will
promptly provide to the Lender copies of all final findings and conclusions of
any such environmental investigation. Preliminary findings and conclusions shall
be provided if final reports have not been completed and delivered to the Lender
within sixty (60) days following completion of the preliminary findings and
conclusions.
11.6 Indemnity
The Borrower hereby indemnifies and holds the Lender, its agents and any of
their past, present and future officers, directors, shareholders and employees
harmless from any and all loss, damages, suits, penalties, costs, liabilities
and expenses (including but not limited to reasonable investigation,
environmental audit and legal expenses) arising out of any claim, loss or damage
of any property, injuries to or death of persons, contamination of or adverse
affects on the environment, or any violation of any applicable Environmental
Laws, due to any acts of the Borrower, its officers, directors, shareholders,
employees, consultants and/or representatives. In no event shall the Borrower be
liable hereunder for any loss, damages, suits, penalties, costs, liabilities or
expenses arising from any act of gross negligence of the Lender or its agents or
employees. It is expressly understood and agreed that (A) the indemnifications
granted herein are intended to protect the Lender and its past, present and
future officers, directors, shareholders, employees, agents, consultants and
representatives from any claims that may arise by reason of the security
interest, liens and/or mortgages granted to the Lender (or its agent), or under
any other document or agreement given to secure repayment of any indebtedness
from any Loan Party, whether or not such claims arise before or after the Lender
has foreclosed upon and/or otherwise become the owner of any such property; (B)
all obligations of indemnity as provided hereunder shall be secured by the
Security Documents; and (C) the provisions hereof shall be continuing and shall
survive the repayment of any indebtedness from the Borrower to the Lender.
11.7 Environmental Approvals
The Borrower shall maintain all permits, licenses and approvals required
under applicable Environmental Laws.
SECTION 12
DEFAULTS
12.1 Events of Default
Upon occurrence of any of the following events of default:
(a) non-payment by the Borrower of any principal, interest, fees or other
amounts due under the terms of this Agreement or any Document when due
in accordance with the terms thereof;
(b) default in the observance or performance of any of the conditions,
covenants or agreements of the Borrower set forth in Sections 9.1(c),
(d), 9.3, 9.4, 9.5, 9.8, 9.11, 9.13 or Section 10;
(c) default in the observance or performance of any of the conditions,
covenants or agreements of the Borrower set forth in Section 9.1(a) or
(b) or 9.12 and continuance for ten (10) days;
(d) default in the observance or performance of any of the other
conditions, covenants or agreements of any Loan Party under any
Document herein set forth and continuance of such default for a period
of thirty (30) days following the occurrence of such event;
(e) any representation or warranty made by any Loan Party herein or in any
instrument submitted pursuant hereto proves to have been untrue in any
material respect when made;
(f) default in the payment when due of any Debt (other than in clause (a))
of any Loan Party or in the observance or performance of any
conditions, covenants or agreements related or given with respect
thereto beyond any applicable grace period;
(g) judgment(s) for the payment of money in excess of the sum of CS$25,000
or the Equivalent Amount thereof in the aggregate shall be rendered
against any Loan Party, and such judgment(s) shall remain unpaid,
unvacated, unbonded or unstayed by appeal or otherwise for a period of
thirty (30) consecutive days from the date of its/their entry;
(h) [intentionally left blank];
(i) any loss or destruction of the property and/or the assets of a Loan
Party; (j) any Environmental Liability incurred by any of the Loan
Parties which is in excess of the sum of CS$25,000 or the Equivalent
Amount thereof in the aggregate;
(k) any order, judgment or decree shall be entered against any Loan Party
or any of its Subsidiaries decreeing the dissolution or division of it
and such order shall remain unpaid, undischarged or unstayed for a
period in excess of thirty (30) days;
(l) the Loan Parties and any of its Subsidiaries cease to conduct all or
any material part of their business or is enjoined, restrained or in
any way prevented by any Governmental Authority from conducting all or
any material part of its business affairs and the same is not
discharged within thirty (30) business days thereafter;
(m) any statement, report, financial statement, or certificate made or
delivered by any of the Loan Parties or any of its Subsidiaries, or
any of their officers, employees or agents, to the Lender (or its
agent) is not true and correct in any material respect when made;
(n) a writ, execution or attachment or similar process is issued or levied
against all or any part of the property of any of the Loan Parties in
connection with any judgment against such Loan Party in an amount
exceeding C$25,000 or the Equivalent Amount thereof and such writ,
execution, attachment or similar process is not lifted, stayed or
terminated within thirty (30) days of notice of such being received by
such Loan Party.
(o) the commencement or acquiescence of any Loan Party of or in
proceedings for substantive relief with respect to such Loan Party in
any bankruptcy, insolvency, debt restructuring, reorganization,
readjustment of debt, dissolution, liquidation or other similar
proceedings (including, without limitation, proceedings under the
Bankruptcy and Insolvency Act (Canada), the Winding-up and
Restructuring Act (Canada), the Companies' Creditors Arrangement Act
(Canada), or other similar federal, provincial or foreign legislation)
including, without limitation, the filing of a proposal or plan of
arrangement or a notice of intention to file same, or proceedings for
the appointment of a trustee, interim receiver, receiver, receiver and
manager, custodian, liquidator, provisional liquidator, administrator,
sequestrator or other like official with respect to such Loan Party or
all or any substantial part of the assets of such Loan Party, or any
similar relief;
(p) petition or any other proceeding or case shall be filed, instituted or
commenced with respect to any Loan Party under any bankruptcy,
insolvency, debt restructuring, reorganization, incorporation,
readjustment of debt, dissolution, liquidation, winding-up or similar
law, now or hereafter in effect, seeking the bankruptcy, liquidation,
reorganization, dissolution, winding-up, composition or readjustment
of debts of any Loan Party, the appointment of a trustee, interim
receiver, receiver, receiver and manager, custodian, liquidator,
provisional liquidator, administrator, sequestrator or other like
official for any Loan Party or all or any substantial part of the
assets of any Loan Party, or any similar relief, unless such
proceedings are commenced by a party other than the Loan Parties and
are being diligently contested by such Loan Party, as applicable, and
are stayed within thirty (30) days from the date of notice of such
proceeding being received by such Loan Party, as applicable, of their
commencement and continue to be diligently contested by such Loan
Party, as applicable, and stayed until such proceedings are dismissed,
vacated or otherwise discharged; and
(q) any Person including, without limitation, a receiver, receiver and
manager, or other similar official whether appointed privately or
judicially, is appointed for any Loan Party or takes possession of all
or part of its properties or assets unless such appointment is made on
the application or by the act of a party other than the Loan Parties
without notice to the Loan Parties and is being diligently contested
by the Loan Parties and is stayed within thirty (30) days after such
appointment and continues to be contested by the Loan Parties, as
applicable and stayed until such appointment is dismissed, vacated or
otherwise discharged,
(r) if there shall occur any change in the management, ownership or
control of the Borrower which in the sole judgment of Bank is
reasonably likely to have a material adverse effect on the Borrower,
then, or at any time thereafter, unless such default is first remedied, the
Lender may give notice to the Borrower (a) declaring that its commitment to make
further Loans under the Credit Facility has expired or (b) declaring all
outstanding indebtedness hereunder to be due and payable, whereupon all
indebtedness then outstanding hereunder shall immediately become due and payable
without further notice and demand, as the case may be; provided that upon the
occurrence of any event specified in Section 12.1(n) to Section 12.1(q) above,
the Obligations then outstanding hereunder become immediately due and payable
and the Lender's commitment to make further Loans under this Agreement shall
automatically terminate.
Immediately upon receipt of a declaration under this Section 12.1, the
Borrower shall pay to the Lender all amounts outstanding hereunder including,
without limitation, the maximum amount payable to the Lender under all
outstanding Letters of Credit which are unmatured or unexpired, which amounts
shall be held by the Lender as collateral security for the Borrower's
obligations with respect to those Letters of Credit. The Borrower shall execute
such security documents with respect to those Letters of Credit and any amounts
paid in respect thereof as the Lender shall require.
12.2 Waiver of Default
No express or implied waiver by the Lender of any default hereunder shall
in any way be or be construed to be a waiver of any future or subsequent
default. The Borrower hereby waives any rights now or thereafter conferred by
statute or otherwise which may limit or modify any of the Lender's (or its
agent's) rights or remedies hereunder or under any documents made in connection
herewith. The Borrower acknowledge and agree that the exercise by the Lender (or
its agent) of any rights or remedies hereunder or under any documents made in
connection herewith without having declared an acceleration shall not in any way
alter, affect or prejudice the right of the Lender to make such a declaration
hereunder at any time.
12.3 Rights Upon Default
Upon the occurrence of a Default or Event of Default hereunder, the Lender
is hereby authorized by the Borrower from time to time, without notice to: (a)
set off and apply any and all amounts owing by the Lender to the Borrower
against and on account of the obligations outstanding hereunder; (b) hold any
amounts owing by the Lender as collateral to secure payment of the obligations
outstanding hereunder to the extent that those amounts may be required to
satisfy any contingent or unmatured obligations; and (c) return as unpaid for
insufficient funds any and all cheques and other items drawn against any
deposits so held as the Lender in its sole discretion may elect.
12.4 Lender May Debit Accounts
THE BORROWER AUTHORIZES AND DIRECTS THE LENDER, IN THE LENDER'S DISCRETION,
TO DEBIT AUTOMATICALLY, BY MECHANICAL, ELECTRONIC OR MANUAL MEANS, ANY BANK
ACCOUNT OF THE BORROWER MAINTAINED WITH THE LENDER FOR ALL AMOUNTS PAYABLE BY
THE BORROWER UNDER THIS AGREEMENT OR ANY OTHER DOCUMENTS, INCLUDING THE
REPAYMENT OF PRINCIPAL AND THE PAYMENT OF INTEREST, FEES AND ALL CHARGES FOR THE
KEEPING OF THAT BANK ACCOUNT. THE LENDER SHALL NOTIFY THE APPLICABLE BORROWER AS
TO THE PARTICULARS OF THOSE DEBITS IN THE NORMAL COURSE.
SECTION 13
MISCELLANEOUS
13.1 Headings and Table of Contents
The division of this Agreement into Sections, the insertion of headings and
the provision of a table of contents are for convenience of reference only and
are not to affect the construction or interpretation of this Agreement.
13.2 Number and Gender
Unless otherwise specified, words importing the singular include the plural
and vice versa and words importing gender include all genders.
13.3 References
Unless otherwise specified, references in this Agreement to Sections and
Schedules are to sections of, and schedules to, this Agreement.
13.4 Severability
If any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, the illegality, invalidity or
unenforceability of that provision will not affect:
(a) the legality, validity or enforceability of the remaining provisions
of this Agreement; or
(b) the legality, validity or enforceability of that provision in any
other jurisdiction.
13.5 Currency
All amounts referred to herein are in U.S. Dollars, unless the context
otherwise requires.
13.6 Binding Effect
This Agreement shall be binding upon and shall inure to the benefit of each
of the parties signatory hereto and their respective successors and permitted
assigns.
13.7 Assignment, Syndication or Participation
The Lender may, upon written notice to the Borrower, resell (through
syndication, assignment or participation) all or a portion of its rights and
obligations under this Agreement to any other Person. The Borrower may not
assign, delegate or transfer all or any portion of its rights and obligations
under this Agreement without the prior written consent of the Lender.
13.8 Remedies
The Lender (or its agent) may bring suit at law, in equity or otherwise,
for any available relief or purpose including, but not limited to: (A) the
specific performance of any covenant or agreement contained in this Agreement or
in any other document; (B) an injunction against a violation of any of the terms
of this Agreement or any other document; (C) in aid of the exercise of any power
granted by this Agreement or any other document or by law; or (D) the recovery
of any judgment for any and all amounts due in respect of the Loans.
13.9 Cumulative and Non-Exclusive Rights
No delay or failure of the Lender (or its agent) in exercising any right,
power or privilege hereunder shall affect such right, power or privilege, nor
shall any single or partial exercise thereof preclude any further exercise
thereof, or the exercise of any other power, right or privilege. The rights of
the Lender under this Agreement are cumulative and not exclusive of any rights
or remedies which the Lender would otherwise have.
13.10 Notices
Except as expressly provided otherwise in this Agreement, all notices and
other communications provided to any party hereto under this Agreement shall be
in writing and shall be given by personal delivery, by mail, by reputable
overnight courier or by facsimile and addressed or delivered to it at its
address set forth below or at such other address as may be designated by such
party in a notice to the other parties that complies as to delivery with the
terms of this Section 13.10. Any notice, if personally delivered or if mailed
and properly addressed with postage prepaid and sent by registered or certified
mail, shall be deemed given when received; any notice, if given to a reputable
overnight courier and properly addressed, shall be deemed given one (1) Business
Day after the date on which it was sent, unless it is actually received sooner
by the named addressee; and any notice, if transmitted by telex or facsimile,
shall be deemed given when received (receipt confirmed in the case of
telecopies). The Lender may, but shall not be required to, take any action on
the basis of any notice given to it by telephone, but the Company shall promptly
confirm such notice in writing or by facsimile, and such notice will not be
deemed to have been received until such confirmation is deemed received in
accordance with the provisions of this Section set forth above. If such
telephonic notice conflicts with any such confirmation, the terms of such
telephonic notice shall control.
To the Borrower:
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx
Fax No.:
To the Lender:
000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Middle Market Corporate Banking-Xxxxxxx X. Xxxxx
Fax No.: (000) 000-0000
and
Suite 2210, South Tower
Royal Xxxx Xxxxx
X.X. Xxx 00
Xxxxxxx, Xxxxxxx
Xxxxxx
Attention: Xxxxxx X. Xxxxx
Fax No.:
13.11 Remedial Action
Upon the occurrence of any Event of Default or Default as described in this
Agreement, the Lender may, without notice to anyone (except as otherwise
provided herein), declare the Obligations of the Borrower due forthwith, take
all action (remedial and otherwise) as provided herein or in the Security
Documents or any other document, instrument or agreement of security or of
collateral, and collect, deal with and dispose of all or any part of any
security without notice in any manner permitted or authorized by the PPSA or
other applicable law.
13.12 Governing Law
This Agreement and all related documents and agreements shall be governed
by and construed and enforced in accordance with laws of the Province of Ontario
and the laws of Canada applicable therein. Each of the parties irrevocably
submits to the non-exclusive jurisdiction of the courts of the Province of
Ontario. 13.13 Further Assurances
The Borrower shall from time to time promptly, upon the request of the
Lender, take such action, and execute and deliver such further documents as may
be reasonably necessary or appropriate to give effect to the provisions and
intent of this Agreement.
13.14 Costs and Expenses
The Borrower shall pay all closing costs and expenses, including (by way of
description and not limitation) reasonable outside attorney fees, title policy
fees and lien search fees incurred by the Lender in connection with the
commitment, consummation and closing of this Agreement. All costs, including
reasonable attorney fees (but excluding any costs arising from the wrongful
conduct of the Lender), incurred by the Lender in reviewing, revising,
protecting or enforcing the Lender's rights against any Loan Party or defending
the Lender from any claims or liabilities by any party or otherwise incurred by
the Lender in connection with an Event of Default or the enforcement of this
Agreement or the related documents, including (by way of description and not
limitation) such charges in any court or bankruptcy proceedings or arising out
of any claim or action by any person against the Lender which would not have
been asserted were it not for the Lender's relationship with the Loan Parties
hereunder or otherwise, shall also be paid by the Borrower.
13.15 Amendments
No amendments or waivers of any provision of this Agreement nor any consent
to any departure by the Loan Parties therefrom shall in any event be effective
unless the same shall be in writing and signed by the Lender, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No amendment, waiver or
consent with respect to any provision of this Agreement shall affect any other
provision of this Agreement.
13.16 Entire Agreement
This Agreement and all Documents constitute the entire agreement between
the parties with respect to the subject matter and supersede all prior
agreements, negotiations, discussions, undertakings, representations, warranties
and understandings, whether written or oral.
13.17 Effectiveness
This Agreement shall become effective upon the execution hereof by the
Lender and the Borrower.
13.18 Judgment Currency
If for the purpose of obtaining judgment in any court it is necessary to
convert any amount owing or payable to the Lender under this Agreement from the
currency in which it is due (the "Agreed Currency") into a particular currency
(the "Judgment Currency"), the rate of exchange applied in that conversion shall
be that at which the Lender, in accordance with its normal procedures, could
purchase the Agreed Currency with the Judgment Currency at or about noon on the
Business Day immediately preceding the date on which judgment is given. The
obligation of the Borrower in respect of any amount owing or payable under this
Agreement to the Lender in the Agreed Currency shall, notwithstanding any
judgment and payment in the Judgment Currency, be satisfied only to the extent
that the Lender, in accordance with its normal procedures, could purchase the
Agreed Currency with the amount of the Judgment Currency so paid at or about
noon on the next Business Day following that payment; and if the amount of the
Agreed Currency which the Lender could so purchase is less than the amount
originally due in the Agreed Currency, the Borrower shall, as a separate
obligation and notwithstanding the judgment or payment, indemnify the Lender
against any loss.
13.19 Counterparts
This Agreement may be executed and delivered by way of facsimile and in any
number of counterparts, each of which when executed and delivered is an original
but all of which taken together constitute one and the same instrument.
13.20 Waiver of Jury Trial
THE LENDER AND THE BORROWER, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY
TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. NONE OF
THE LENDER AND THE BORROWER SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR
OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE
LENDER AND THE BORROWER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
13.21 Business Days
Whenever any payment to be made hereunder or under any other Security
Document shall be stated to be due and payable on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall be computed in computing interest on such payment.
The parties have executed this Agreement.
Xxxxx 0000, Xxxxx Xxxxx XXXXXXXX XXXX, XXXXXX BRANCH,
Royal Bank Plaza as Lender
X.X. Xxx 00
Xxxxxxx, Xxxxxxx
X0X 0X0 By:/s/ Xxxxxx Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Telephone: (000) 000-0000 (ext. 242 or 222) Title: Vice President
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx
TECSTAR MANUFACTURING
CANADA LIMITED
___________________________
___________________________
___________________________ By:/s/ Xxxxxxx X. Xxxxxxxxxx
Telephone:__________________ -------------------------
Facsimile:___________________ Name: Xxxxxxx X. Xxxxxxxxxx
Title: Secretary, Treasurer
Attention:___________________
Name:
Title: