SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF APRIL 1, 1999
FIRSTSERVICE CORPORATION
AS CANADIAN BORROWER
AND
FIRSTSERVICE (USA), INC. AND
FIRSTSERVICE DELAWARE, LP
AS U.S. BORROWERS
AND
THE WHOLLY-OWNED SUBSIDIARIES
NAMED ON THE EXECUTION PAGES HEREOF
AS UNLIMITED GUARANTORS
AND
DRESDNER BANK CANADA
AS LEAD ARRANGER
AND
FIRST CHICAGO NBD BANK, CANADA,
SOCIETE GENERALE (CANADA) AND
THE TORONTO-DOMINION BANK
AS CO-ARRANGERS
AND
ROYAL BANK OF CANADA,
CANADIAN IMPERIAL BANK OF COMMERCE AND
THE BANK OF NOVA SCOTIA
AS MANAGERS
AND
THE BANKS NAMED ON THE EXECUTION PAGES HEREOF
AS LENDERS
AND
DRESDNER BANK CANADA
AS COLLATERAL AGENT
AND
DRESDNER BANK CANADA
AS CANADIAN ADMINISTRATIVE AGENT
AND
DRESDNER BANK CANADA
AS U.S. ADMINISTRATIVE AGENT
XXXXXXX XXXXXX FOGLER XXXXXXXX
LENDERS' COUNSEL BORROWERS' CANADIAN COUNSEL
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS..............................................................................4
1.1 DEFINITIONS.....................................................................4
1.2 REFERENCES.....................................................................25
1.3 INTERPRETATION.................................................................25
1.4 HEADINGS AND TABLE OF CONTENTS.................................................26
1.5 ACCOUNTING TERMS...............................................................26
1.6 RECITALS.......................................................................26
1.7 PRECEDENCE.....................................................................26
ARTICLE II
FACILITIES..............................................................................27
2.1 FACILITIES.....................................................................27
2.2 NOTICE AND REVOLVING NATURE OF CERTAIN BORROWINGS..............................27
2.3 CONVERSION.....................................................................28
2.4 MAKING BORROWINGS..............................................................29
2.5 PARTICIPATION OF EACH LENDER...................................................30
2.6 BANKERS' ACCEPTANCES...........................................................30
2.7 ACCEPTANCE DATE PROCEDURE......................................................31
2.8 PURCHASE OF BANKERS' ACCEPTANCES...............................................32
2.9 PAYMENT OF BANKERS' ACCEPTANCES................................................33
2.10 SET-OFF AND NETTING............................................................33
2.11 LETTERS OF CREDIT..............................................................34
ARTICLE III
REPAYMENT AND ACCOUNTS..................................................................38
3.1 REPAYMENT......................................................................38
3.2 ACCOUNTS KEPT BY THE CANADIAN ADMINISTRATIVE AGENT.............................38
3.3 ACCOUNTS KEPT BY THE U.S. ADMINISTRATIVE AGENT.................................38
3.4 ACCOUNTS KEPT BY EACH CANADIAN LENDER..........................................39
3.5 ACCOUNTS KEPT BY U.S. LENDERS..................................................39
3.5A PROMISSORY NOTES...............................................................39
3.6 EXCESS RESULTING FROM EXCHANGE RATE CHANGE.....................................40
3.7 CURRENCY.......................................................................40
3.8 EXTENSION OF FINAL MATURITY DATE...............................................40
ARTICLE IV
INTEREST AND ACCEPTANCE FEE.............................................................43
4.1 INTEREST ON LIBOR LOANS........................................................43
4.2 INTEREST ON COF LOANS..........................................................44
4.3 INTEREST ON PRIME LOANS........................................................44
4.4 INTEREST ON ALTERNATE BASE RATE LOANS..........................................45
4.5 LIBOR INTEREST PERIODS OR COF INTEREST PERIODS.................................46
4.6 INTEREST ON OVERDUE AMOUNTS....................................................46
4.7 ACCEPTANCE FEE.................................................................47
4.8 PRICING PERIODS................................................................47
ARTICLE V
CONDITIONS PRECEDENT....................................................................47
5.1 CONDITIONS PRECEDENT...........................................................47
5.2 CONDITIONS PRECEDENT TO BORROWINGS UNDER THE ACQUISITION FACILITIES............50
5.3 WAIVER.........................................................................52
5.4 HOSTILE TAKEOVER...............................................................52
ARTICLE VI
PREPAYMENT, CANCELLATION, MANDATORY
APPLICATION OF CASH PROCEEDS............................................................52
6.1 PREPAYMENT AND CANCELLATION....................................................52
6.2 NOTICE.........................................................................53
6.3 STATUS OF LENDER...............................................................53
6.4 FEES...........................................................................54
6.5 MANDATORY APPLICATION OF CASH PROCEEDS.........................................54
ARTICLE VII
SPECIAL LIBOR, COF AND INCREASED COST PROVISIONS........................................54
7.1 SUBSTITUTE RATE OF BORROWING...................................................54
7.2 INCREASED COST.................................................................55
7.3 ILLEGALITY.....................................................................56
7.4 INDEMNITY......................................................................57
7.5 OTHER INCREASED COSTS OR REDUCTIONS IN RETURN..................................57
7.6 ADDITIONAL COST IN RESPECT OF TAX..............................................59
7.7 CLAIMS UNDER SECTION 7.6.......................................................60
7.8 TAX RECEIPTS...................................................................60
7.9 INTERNAL REVENUE SERVICE FORMS.................................................61
ARTICLE VIII
REPRESENTATIONS, WARRANTIES & COVENANTS.................................................62
8.1 REPRESENTATIONS AND WARRANTIES.................................................62
8.2 COVENANTS......................................................................66
ARTICLE IX
EVENTS OF DEFAULT.......................................................................76
9.1 EVENTS OF DEFAULT..............................................................76
9.2 SECURITY.......................................................................80
9.3 REMEDIES NOT EXCLUSIVE.........................................................80
9.4 SET-OFF........................................................................80
ARTICLE X
PAYMENTS................................................................................81
10.1 PAYMENTS TO AGENTS.............................................................81
10.2 PAYMENTS BY LENDERS TO AGENTS..................................................81
10.3 PAYMENTS BY AGENTS TO BORROWERS................................................82
10.4 DISTRIBUTION TO LENDERS AND APPLICATION OF PAYMENTS............................82
10.5 NO SET-OFF OR COUNTERCLAIM.....................................................82
10.6 NON-RECEIPT BY AGENTS..........................................................82
10.7 WHEN DUE DATE NOT SPECIFIED....................................................83
10.8 AGENTS' AUTHORITY TO DEBIT.....................................................83
ARTICLE XI
EXPENSES................................................................................83
11.1 PAYMENT OF EXPENSES............................................................83
11.2 SURVIVAL.......................................................................84
11.3 ENVIRONMENTAL INDEMNITY........................................................84
ARTICLE XII
FEES....................................................................................86
12.1 COMMITMENT FEES................................................................86
ARTICLE XIII
THE AGENTS AND THE LEAD ARRANGER........................................................87
13.1 AGENTS.........................................................................87
13.2 AGENTS' RESPONSIBILITY.........................................................88
13.3 AGENTS' DUTIES.................................................................89
13.4 PROTECTION OF AGENTS, LEAD ARRANGER, CO-ARRANGERS AND MANAGERS.................90
13.5 INDEMNIFICATION OF AGENTS......................................................91
13.6 TERMINATION OR RESIGNATION OF AGENT............................................91
13.7 RIGHTS OF AN AGENT AS LENDER...................................................92
13.8 AUTHORIZED WAIVERS, VARIATIONS AND OMISSIONS...................................92
13.9 FINANCIAL INFORMATION CONCERNING THE BORROWERS OR GUARANTORS...................93
13.10 KNOWLEDGE OF FINANCIAL SITUATION OF BORROWERS..................................93
13.11 LEGAL PROCEEDINGS..............................................................93
13.12 CAPACITY AS AGENT..............................................................93
13.13 CAPACITY AS ARRANGERS..........................................................94
13.14 DEPOSITS OR LOANS RESPECTING THE BORROWERS.....................................94
ARTICLE XIV
ASSIGNMENTS AND TRANSFERS...............................................................94
14.1 BENEFIT OF AGREEMENT...........................................................94
14.2 ASSIGNMENTS AND TRANSFERS BY A BORROWER OR AN UNLIMITED GUARANTOR..............94
14.3 ASSIGNMENTS AND TRANSFERS BY A LENDER..........................................94
14.4 TRANSFER CERTIFICATE...........................................................95
14.5 NOTICE.........................................................................96
14.6 SUB-PARTICIPATIONS.............................................................96
14.7 DISCLOSURE.....................................................................97
14.8 ASSIGNMENT TO FEDERAL RESERVE BANK.............................................97
ARTICLE XV
GOVERNING LAW, COURTS AND JUDGMENT CURRENCY.............................................97
15.1 GOVERNING LAW..................................................................97
15.2 COURTS.........................................................................97
15.3 JUDGMENT CURRENCY..............................................................98
ARTICLE XVI
GUARANTORS' OBLIGATIONS.................................................................99
16.1 GUARANTEE......................................................................99
ARTICLE XVII
MISCELLANEOUS..........................................................................101
17.1 EQUAL RANKING OF LENDERS......................................................101
17.2 SHARING OF INFORMATION........................................................101
17.3 SEVERABILITY..................................................................101
17.4 REMEDIES AND WAIVERS..........................................................102
17.5 DIRECT OBLIGATION.............................................................102
17.6 NOTICES.......................................................................102
17.7 COUNTERPARTS..................................................................103
17.8 LIMIT ON RATE OF INTEREST.....................................................103
SCHEDULES
"A" Call Price Formulae
"B" Net Proceeds of Bankers' Acceptances
"C" Security
"D" Shareholders' Agreements
"E" Transfer Certificate
"F" Form of Undertaking
"G" Form of Conversion Notice
"H" Form of Bankers' Acceptance
"I" Details of Issue
"J" Form of Officer's Certificate
"K" Intentionally Deleted
"L" Intentionally Deleted
"M" Intentionally Deleted
"N" Form of Officer's Certificate Re: Acquisition Facility
"O" Calculations - Available Acquisition Amount
"P" Permitted Encumbrances Re: Real Property
"Q" Form of Promissory Note
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF APRIL 1, 1999
AMONG:
FIRSTSERVICE CORPORATION, a corporation duly
organized and existing under the laws of Ontario,
AND:
FIRSTSERVICE (USA), INC., a corporation duly organized and
existing under the laws of the State of Delaware and
FIRSTSERVICE DELAWARE, LP, a limited partnership duly
organized and existing under the laws of the State of
Delaware,
AND:
THE WHOLLY-OWNED SUBSIDIARIES NAMED ON THE
EXECUTION PAGES HEREOF
AND:
DRESDNER BANK CANADA, as the lead arranger,
AND:
FIRST CHICAGO NBD BANK, CANADA, SOCIETE GENERALE
(CANADA) AND THE TORONTO-DOMINION BANK, as co-arrangers
AND:
ROYAL BANK OF CANADA, CANADIAN IMPERIAL BANK
OF COMMERCE AND THE BANK OF NOVA SCOTIA, as
managers
AND:
THE BANKS NAMED ON THE EXECUTION PAGES
HEREOF, as lenders
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AND:
DRESDNER BANK CANADA, as collateral agent,
AND:
DRESDNER BANK CANADA, as Canadian administrative
agent
AND:
DRESDNER BANK CANADA, as U.S. administrative agent
WHEREAS, the Canadian Borrower, the Unlimited Guarantors,
Dresdner Bank Canada, The Toronto-Dominion Bank, First Chicago NBD Bank Canada,
the Lead Arranger and Dresdner Bank Canada as Agent entered into a Credit
Agreement dated as of December 16, 1996 (the "Original Credit Agreement");
AND WHEREAS, the Original Credit Agreement was amended as of
August 7, 1997, September 30, 1997, January 8, 1998, January 12, 1998 and May
13, 1998;
AND WHEREAS the Original Credit Agreement so amended was
amended and restated by way of an amended and restated credit agreement dated as
of June 1, 1998 (the "First Amended and Restated Credit Agreement");
AND WHEREAS, the parties hereto desire to amend and restate
the terms of the First Amended and Restated Credit Agreement;
WHEREAS the Borrowers have requested that the Lead Arranger,
the Co- Arrangers and the Managers arrange for the Lenders to grant:
(a) a revolving senior secured credit facility (including the Cdn.
Overdraft Facility as hereinafter defined) in an aggregate
amount not exceeding Cdn. $7,000,000 or the Equivalent Amount
thereof in U.S. Dollars to be made available to the Canadian
Borrower by the Canadian Lenders (the "Canadian Revolving
Facility") to finance working capital needs and capital
expenditures of the Canadian Borrower and its Subsidiaries;
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(b) a revolving senior secured credit facility (including the U.S.
Overdraft Facility as hereinafter defined) in an aggregate
amount not exceeding U.S. $19,000,000 to be made available to
the U.S. Borrowers by the U.S. Lenders (the "U.S. Revolving
Facility") to finance working capital needs and capital
expenditures of Subsidiaries of the Canadian Borrower located
in the United States.
(c) a revolving senior secured acquisition credit facility in an
aggregate amount not exceeding Cdn. $50,000,000 less amounts
outstanding under the Canadian Revolving Facility or the
Equivalent Amount thereof in U.S. Dollars to be made available
to the Canadian Borrower by the Canadian Lenders (the
"Canadian Acquisition Facility") to refinance existing debt
under the Acquisition Facility (as defined in the First
Amended and Restated Credit Agreement) and finance future
acquisitions by the Canadian Borrower and its Subsidiaries;
and
(d) a revolving senior secured acquisition credit facility in an
aggregate amount not exceeding U.S. $130,000,000 less amounts
outstanding under the U.S. Revolving Facility to be made
available to the U.S. Borrowers by the U.S. Lenders to finance
the purchase by the U.S. Borrowers of certain loans made by
the Canadian Borrower to its Subsidiaries and to finance loans
to be made by the U.S. Borrowers to Subsidiaries of the
Canadian Borrower to finance acquisitions by such Subsidiaries
(the "U.S. Acquisition Facility");
(the Canadian Revolving Facility and the U.S. Revolving Facility, referred to
herein collectively as the Revolving Facilities, the Canadian Acquisition
Facility and the U.S. Acquisition Facility referred to herein collectively as
the "Acquisition Facilities", the Cdn. Overdraft Facility and the U.S. Overdraft
Facility referred to herein collectively as the "Overdraft Facilities" and the
Revolving Facilities, Overdraft Facilities and the Acquisition Facilities
referred to herein collectively as the "Facilities");
AND WHEREAS the Lead Arranger, the Co-Arrangers and the
Managers have made such arrangements and the Lenders are willing to grant such
Facilities upon and subject to the following terms and conditions;
NOW THEREFORE in consideration of the respective covenants of
the parties contained herein and other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged) the parties amend and
restate with effect as and from the Effective Date the terms of the First
Amended and Restated Credit Agreement and the parties agree as follows:
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ARTICLE I
DEFINITIONS
1.1 DEFINITIONS
In this Agreement, unless the context otherwise requires, the terms
defined in the introduction of the parties and the recitals shall have, as
herein used, the same meanings and:
"30 DAY BA REFERENCE RATE" means, in respect of a Prime Loan, the rate
calculated from time to time by the Canadian Administrative Agent as
the Reference Bankers' Acceptance Discount Rate applicable for bankers'
acceptances having 30 day terms and a face value equal to or in excess
of Cdn. $300,000 during the Quarter preceding an Interest Date.
"ACCEPTANCE DATE" means any Business Day on which a Bankers' Acceptance
is or is requested to be issued hereunder.
"ACCEPTANCE FEE" means in respect of any Bankers' Acceptance
outstanding at any time:
(a) prior to June 1, 2000, at any time during:
(i) a Low Pricing Period or a Mid Pricing Period: 1.25%
per annum; and
(ii) a Higher Pricing Period: 1.50% per annum; and
(b) on or after June 1, 2000, at any time during:
(i) a Low Pricing Period: 1.00% per annum;
(ii) a Mid-Pricing Period: 1.25% per annum; and
(iii) a Higher Pricing Period: 1.50% per annum.
"ACCOMMODATION" has the meaning attributed thereto in Section 7.5 (a).
"ACCOUNT BANK" means (a) in respect of the Canadian Borrower and its
Subsidiaries which carry on business in Canada, a Schedule I Canadian
chartered bank acceptable to the Lenders, and (b) in respect of each of
the U.S. Borrowers and any Subsidiaries of the Canadian Borrower which
carry on business in the United States of America, a United States
financial institution acceptable to the Lenders, and (c) any other bank
or other financial institution appointed in replacement thereof under
Section 13.3 (c), in any case,
- 5 -
at which a Borrower has established one or more accounts which shall be
debited by the Agents in accordance with Section 10.8.
"ACCOUNTS" means the accounts kept by the Canadian Administrative Agent
or the U.S. Administrative Agent, as the case may be, pursuant to
Section 3.2 and 3.3 to record the Borrowers' liabilities to the Agents
and each Lender under this Agreement.
"ACQUISITION ENTITY" means an Eligible Business acquired by the
Canadian Borrower or a Subsidiary thereof as permitted under this
Agreement.
"ACQUISITION FACILITIES" has the meaning attributed thereto in the
recitals.
"ADDITIONAL COMPENSATION" has the meaning attributed thereto in Section
7.2.
"ADDITIONAL OTHER COMPENSATION" has the meaning attributed thereto in
Section 7.5.
"ADJUSTED EBITDA" means, in respect of any 12 month period, EBITDA of
the Canadian Borrower on a consolidated basis for such period adjusted
to include the EBITDA of all applicable Acquisition Entities for such
period as demonstrated by the Canadian Borrower to the satisfaction of
the Majority Lenders, including pro forma trailing EBITDA for a period
of 12 consecutive calendar months for each such Acquisition Entity and
a full year impact of the cost savings readily identifiable and which
can be immediately implemented such as elimination of salaries for
redundant employees and elimination of various administrative functions
which will, in the reasonable opinion of the Canadian Borrower,
satisfactory to the Majority Lenders, become unnecessary or otherwise
more cost effectively performed.
"ADVANCE" means an advance of money under the Facilities.
"AFFECTED SUBSIDIARY" means any Subsidiary other than the Wholly-Owned
Subsidiaries, Nutrilawn International Inc., F.C.L.S. Inc. or Sidea
Corporation (unless the Majority Lenders shall at any time advise the
Borrowers in writing that F.C.L.S. Inc. or Sidea Corporation is not to
be excluded).
"AFFILIATE" means, in respect of any Person (the "first Person"), any
Person which, directly or indirectly, controls or is controlled by or
is under common control with the first Person; and for the purpose of
this definition, "control" (including, with correlative meanings, the
terms "controlled by" and "under common control with") means the power
to direct, or cause to be directed, the management and policies of a
Person whether through the ownership of voting shares or by contract or
otherwise.
- 6 -
"AGENTS" means collectively the Canadian Administrative Agent, the
Collateral Agent and the U.S. Administrative Agent and "Agent" means
any one of the Canadian Administrative Agent, the Collateral Agent or
the U.S. Administrative Agent.
"AGREEMENT" means this Second Amended and Restated Credit Agreement
dated as of April 1, 1999 and any future amendments or supplements to
it.
"ALTERNATE BASE RATE" means for any day and with respect to all
Alternate Base Rate Loans, a fluctuating interest rate per annum equal
to the greater of the base rate most recently announced by the
Alternate Base Rate Reference Bank as its reference rate or the Federal
Funds Rate plus 1/2% per annum. The Alternate Base Rate is not
necessarily the lowest rate of interest offered by the Alternate Base
Rate Reference Bank for extensions of credit.
"ALTERNATE BASE RATE LOANS" mean Loans, or any portion thereof, made
available by the Canadian Lenders to the Canadian Borrower or by the
U.S. Lenders to the U.S. Borrowers outstanding from time to time which
are drawndown in U.S. Dollars and in respect of which interest is
payable in accordance with Section 4.4.
"ALTERNATE BASE RATE MARGIN" means, in respect of an Alternate Base
Rate Loan, or portion thereof outstanding:
(a) prior to June 1, 2000, at any time during:
(i) a Low Pricing Period or a Mid-Pricing Period: 1.25%
per annum, and
(ii) a Higher Pricing Period: 1.50% per annum; and
(b) on or after June 1, 2000, at any time during:
(i) a Low Pricing Period: 1.00% per annum,
(ii) a Mid-Pricing Period: 1.25% per annum, and
(iii) a Higher Pricing Period: 1.50% per annum.
"ALTERNATE BASE RATE REFERENCE BANK" means the U.S. Administrative
Agent with respect to determination of the Alternate Base Rate under
U.S. Facilities other than the U.S. Overdraft Facility, the Canadian
Administrative Agent with respect to the determination of the Alternate
Base Rate under the Canadian Facilities other than the Canadian
Overdraft Facility, FNBC with respect to the determination of the
Alternate Base Rate under the U.S. Overdraft Facility and TD with
respect to the determination of the Alternate Base Rate for the Cdn.
Overdraft Facility or such other Canadian Lender
- 7 -
or U.S. Lender, as the case may be, appointed in replacement thereof
under Section 13.3(c).
"AMOUNT" has the meaning attributed thereto in Section 9.1.
"AUTHORIZED SIGNATORY" in relation to a Borrower and any communication
to be made or document to be executed or certified by it, means at any
time a Person who is at such time duly appointed as such by such
Borrower in a manner acceptable to the Canadian Administrative Agent or
the U.S. Administrative Agent, as the case may be, acting reasonably.
"AVAILABLE PROCEEDS" has the meaning ascribed to it in Section
2.7(b)(iv).
"B/A MATURITY DATE", in respect of a Bankers' Acceptance, means the
date on which such Bankers' Acceptance matures.
"BANKERS' ACCEPTANCE" means a xxxx of exchange or a depository note,
duly completed and accepted by a Canadian Lender under either the
Canadian Revolving Facility or the Canadian Acquisition Facility
pursuant to this Agreement.
"BORROWERS" means the Canadian Borrower and the U.S. Borrowers and
"Borrower" means either the Canadian Borrower or either of the U.S.
Borrowers.
"BORROWERS' CANADIAN COUNSEL" means Fogler, Xxxxxxxx or any other firm
of solicitors selected by the Borrowers and acceptable to the Canadian
Administrative Agent, acting reasonably.
"BORROWERS' U.S. COUNSEL" means Xxxxxxxx & Associates or any other firm
of attorneys selected by the Borrowers and acceptable to the U.S.
Administrative Agent, acting reasonably.
"BORROWING" means a utilization of a Facility by way of Loans, by the
issue of Bankers' Acceptances or by the issue of Letters of Credit.
"BUSINESS DAY" means
(a) in respect of Borrowings available to a Borrower by way of
Libor Loans and payments in connection therewith, a day (other
than Saturday or Sunday) which is a day for trading by and
between banks in U.S. Dollar deposits in the London interbank
market which is also a day on which banks are generally open
for business in New York City and Toronto;
- 8 -
(b) in respect of Borrowings available to a Borrower by way of
Alternate Base Rate Loans or Letters of Credit denominated in
U.S.$, a day (other than Saturday or Sunday) on which banks
are generally open for business in New York City and Toronto;
and
(c) for all other purposes of this Agreement, a day (other than
Saturday or Sunday) on which banks are generally open for
business in Toronto.
"BUSINESS VALUE" means, in respect of any period, (i) the product
obtained by multiplying (a) Adjusted EBITDA for such period by (b) 4.5
less (ii) the Cash Amount.
"BUSINESS VALUE/TOTAL DEBT RATIO" means, in respect of any period, the
quotient obtained by dividing (a) Business Value for such period (as
numerator) by (b) Total Debt for such period (as denominator).
"CALL OPTION TRIGGERING EVENT" means, in respect of any Affected
Subsidiary:
(a) the 61st day following the commencement of any actions or
proceedings against such Subsidiary or against any of the
property thereof before any court, governmental agency or
arbitrator which, if determined adversely, may have a material
adverse effect on the financial condition or operations of
such Subsidiary unless the Canadian Borrower shall have
satisfied the Majority Lenders that such Subsidiary shall not
be materially and adversely affected by such action or
proceeding or the consequences arising therefrom; or
(b) the 31st day following the receipt by such Subsidiary of any
Violation Notice which, if same were enforced, may have a
material adverse effect on the financial condition or
operations of such Subsidiary, unless the Canadian Borrower
shall have satisfied the Majority Lenders that such Subsidiary
shall not be materially and adversely affected by such
Violation Notice or the consequences arising therefrom; or
(c) the EBITDA of such Subsidiary for any period of 4 consecutive
Quarters ended (the "Relevant 4 Quarter Period") is at least
50% less than such Subsidiary's EBITDA for the period of 4
consecutive Quarters ending immediately prior to the
commencement of the Relevant 4 Quarter Period.
"CALL OPTION TRIGGERING EVENT NOTICE" means a written notice from the
Collateral Agent to the Canadian Borrower requiring the Canadian
Borrower to cause an Affected Subsidiary in respect of which a Call
Option Triggering Event shall have occurred to become a Direct
Guarantor.
"CALL PRICE FORMULAE" means the call price formulae described on
Schedule "A".
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"CANADIAN ACQUISITION FACILITY" has the meaning ascribed thereto in the
recitals.
"CANADIAN ADMINISTRATIVE AGENT" means Dresdner Bank Canada and its
successors and assigns duly appointed in accordance with Section 13.6.
"CANADIAN ASSIGNEE" has the meaning ascribed to it in Section 14.3(a).
"CANADIAN BORROWER" means FirstService Corporation.
"CANADIAN DOLLARS" means the lawful money of Canada and "CDN $" has a
corresponding meaning.
"CANADIAN FACILITIES" means, collectively, the Canadian Revolving
Facility and the Canadian Acquisition Facility.
"CANADIAN LENDERS" means the Lenders identified as Canadian Lenders on
the execution pages hereof having a Commitment to lend or when such
Commitment shall have terminated, having Borrowings outstanding to the
Canadian Borrower under the Canadian Facilities.
"CANADIAN REVOLVING FACILITY" has the meaning ascribed thereto in the
recitals.
"CAPITALIZATION" means, at any time, the sum of (a) Total Debt and (b)
Total Shareholders' Equity at such time.
"CASH AMOUNT" means, for the purposes of Schedule "O" referred to in
Subsection 5.2(i)(D) hereof, that portion of the consideration payable
in cash in respect of any purchase of shares by the Canadian Borrower
in the capital stock of any Subsidiary pursuant to the exercise of any
call option right in favour of such Borrower under the terms of any
Shareholders Agreement in respect of such Subsidiary.
"COF INTEREST PERIOD" means, with respect to each COF Loan, the period
selected by the Canadian Borrower hereunder and being 30, 60, 90 or 180
days (as selected by the Canadian Borrower and notified to the Canadian
Administrative Agent pursuant to Section 4.5 and subject to
availability) commencing on the applicable Drawdown Date.
"COF LOAN" means a Loan denominated in Cdn.$ made by the Canadian
Lenders to the Canadian Borrower outstanding from time to time and on
which interest is to be paid in accordance with Section 4.1(b).
"COF MARGIN" means in respect of a COF Loan or portion thereof
outstanding:
(a) prior to June 1, 2000, at any time during:
- 10 -
(i) a Low Pricing Period or a Mid Pricing Period: 1.25%
per annum, and
(ii) a Higher Pricing Period: 1.50% per annum; and
(b) on or after June 1, 2000, at any time during:
(i) a Low Pricing Period: 1.00% per annum,
(ii) a Mid-Pricing Period: 1.25% per annum, and
(iii) a Higher Pricing Period: 1.50% per annum.
"COF RATE" means, for the COF Interest Period of each COF Loan, the
rate of interest per annum equal to the annual rate of interest quoted
on the Business Day prior to the first day of such Interest Period in
the case of COF Loans in Cdn $, by the Canadian Administrative Agent as
being its rate of interest for cost of funds loans in Cdn.$ for a face
amount similar to the amount of the applicable COF Loan and for a term
equivalent to the applicable COF Interest Period.
"COF RATE DETERMINATION DATE" means any date when the Canadian
Administrative Agent determines the COF Rate for a COF Interest Period.
"CDN. GAAP" means generally accepted accounting principles applied in
Canada.
"CDN. OVERDRAFT FACILITY" means that portion of the Canadian Revolving
Facility in an aggregate amount not to exceed the lesser of the unused
amount of the Canadian Revolving Facility and Cdn.$4,000,000 or the
Equivalent Amount in U.S. Dollars made available to the Canadian
Borrower in accordance with Section 2.12.
"CO-ARRANGERS" means First Chicago NBD Bank, Canada, Societe Generale
(Canada) and The Toronto-Dominion Bank and their successors and
assigns.
"CODE" means the Internal Revenue Code (U.S.) of 1986, as amended or
any successor statute.
"COLLATERAL AGENT" means Dresdner Bank Canada and its successors and
assigns acting in the capacity of Collateral Agent with respect to the
Security.
"COMMITMENT" (a) in relation to a Canadian Lender means, except as
otherwise provided herein, the amount set opposite its name on the
execution pages hereof as its Commitment to the Canadian Facilities,
and (b) in relation to a U.S. Lender, except as otherwise provided
herein, the amount set opposite its name on the execution pages hereof
as its Commitment to the U.S. Facilities.
- 11 -
"CONVERSION" means the conversion of a Borrowing or any portion thereof
in accordance with Section 2.3.
"CONVERSION DATE" means the date a Borrower has notified the Canadian
Administrative Agent or the U.S. Administrative Agent, as the case may
be, to be the date on which it has elected to convert a Borrowing or a
portion thereof pursuant to Section 2.3.
"CURRENT ASSETS" has the meaning attributed thereto under Cdn. GAAP.
"CURRENT LIABILITIES" has the meaning attributed thereto under Cdn.
GAAP.
"DIRECT GUARANTOR" means (a) the Unlimited Guarantor, Prime Management
Group Inc., Prime Management Inc., Prime Pest Control Inc., Prime
Realty Associates Inc. and Prime Services Inc.; and (b) each other
Subsidiary of the Canadian Borrower, of which the Canadian Borrower
shall at any time directly or indirectly own and control 100% of the
issued and outstanding shares, equity or other ownership interests
which shall have executed and delivered to the Collateral Agent the
Direct Security.
"DIRECT SECURITY" means the Security designated as Direct Security in
Schedule "C".
"DRAWDOWN" means a drawdown of a Borrowing by a Borrower.
"DRAWDOWN DATE" means any Business Day when a Borrower makes a Drawdown
or a Conversion Date with respect to any Borrowing or portion thereof.
"EBITDA" means, in respect of any period, earnings before interest,
taxes, depreciation and amortization.
"EFFECTIVE DATE" means April 15, 1999.
"ELIGIBLE BUSINESS" means, in respect of any business to be acquired by
the Canadian Borrower or its Subsidiaries, a business which:
(a) is substantially similar to the "core" businesses currently
conducted by the Canadian Borrower and its Subsidiaries, taken
as a whole, in the reasonable opinion of the Canadian
Borrower; which "core" businesses of the Canadian Borrower and
its Subsidiaries are as follows:
(i) the security business,
(ii) the property management business,
(iii) the property maintenance business,
- 12 -
(iv) the service franchise business,
(v) landscape, lawn-care and lawn maintenance business,
(vi) the interior or exterior pest control businesses,
(vii) business out-sourcing, and
(viii) residential and commercial cleaning and/or
maintenance business;
(b) does not include (i) manufacturing, fabrication or similar
processes or (ii) retail business;
(c) does not include any business that carries on a material part
of its business outside of Canada or the United States of
America;
(d) if such business is out-sourcing, then it shall have easily
recognizable features or characteristics which complement or
otherwise add value to the businesses of such nature currently
conducted by the Canadian Borrower and its Subsidiaries, taken
as a whole, in the reasonable opinion of the Canadian
Borrower, satisfactory to the Majority Lenders;
(e) if such business is a security services business, then at all
times after completion of such acquisition, the proportion of
sales and consolidated EBITDA derived from all the security
businesses of the Canadian Borrower and its Subsidiaries,
taken as a whole, of the total sales and consolidated EBITDA
of the Canadian Borrower and its Subsidiaries taken as a
whole, shall not exceed either (i) 40% of the total sales or
(ii) 33% of consolidated EBITDA of the Canadian Borrower and
its Subsidiaries, taken as whole.
"ENVIRONMENTAL LAWS" means all laws, statutes, codes, ordinances,
orders, decrees, rules, regulations, guidelines, standards, judgements,
or instruments, in each case having the force of law, of any authority
having jurisdiction relating in whole or in part to the environment or
its protection.
"EQUIVALENT AMOUNT" means on any date, as the case may be, the amount
of Cdn. Dollars into which an amount of U.S. Dollars may be converted
or the amount of U.S. Dollars into which an amount of Cdn. Dollars may
be converted at the Canadian Administrative Agent's spot buying rate in
Toronto as at approximately 12:00 noon, on such date.
"ERISA" has the meaning ascribed to it in Section 8.1(n).
- 13 -
"EVENT" has the meaning attributed thereto in Section 7.5(b).
"EVENT OF DEFAULT" has the meaning ascribed to it in Section 9.1.
"EXTENSION DATE" has the meaning ascribed to it in Section 3.8(a).
"EXTENSION REQUEST" has the meaning ascribed to it in Section 3.8(a).
"FACILITIES" has the meaning ascribed to such term in the recitals and
"FACILITY" means any one of the Facilities.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to (a) the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or (b) if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the applicable Alternate Base Rate Reference
Bank from three federal funds brokers of recognized standing selected
by it.
"FINAL MATURITY DATE" means June 1, 2004 unless extended in accordance
with the terms hereof.
"FINANCIAL CONTRACT OBLIGATIONS" means all obligations, present and
future, direct or indirect, contingent or absolute, of a Borrower
and/or its Subsidiaries in respect of:
(a) a currency or interest rate swap agreement;
(b) a swap, future, forward or other foreign exchange agreement;
(c) a forward rate agreement;
(d) any derivative, combination or option in respect of, or
agreement similar to, an agreement or contract referred to in
paragraphs (a) to (c);
(e) any master agreement in respect of any agreement or contract
referred to in paragraphs (a) to (c); or
(f) a guarantee of the liabilities under an agreement or contract
referred to in paragraphs (a) to (c).
- 14 -
"FIRST AMENDED AND RESTATED CREDIT AGREEMENT" has the meaning
attributed thereto in the recitals.
"FISCAL YEAR" means a fiscal year of the Canadian Borrower; currently
the Fiscal Year ends on March 31.
"FIXED CHARGE COVERAGE RATIO" means, in respect of any period, the
quotient obtained by dividing (a) the amount (as numerator) obtained by
subtracting (i) capital expenditures (other than acquisition
expenditures) for such period from (ii) Adjusted EBITDA for such
period, by (b) the sum (as denominator) of (i) interest expense on
Total Debt for such period, (ii) scheduled principal repayments and
capital lease payments for such period, (iii) scheduled payments
required to be made as of the date of this Agreement with respect to
any purchase price balance or the refinancing of any purchase price
balances of any assets, and (iv) payments required to be made with
respect to any purchase price balance or the refinancing of any
purchase price balances of any assets in connection with acquisitions
made after the date hereof which exceed availability under the
Acquisition Facilities. In calculating such interest expense, there
shall be included a 12 month interest burden, so as to reflect the
incremental debt drawn down to effect a Permitted Acquisition,
calculated at the average rate of interest incurred by the Canadian
Borrower on its Total Debt during such period.
"FNBC" means The First National Bank of Chicago.
"FS (USA)" means FirstService (USA), Inc.
"FSLLC" means FirstService Delaware, LLC.
"FSLP" means FirstService Delaware, LP.
"GAAP" means Cdn. GAAP until such time as the Canadian Borrower
notifies the Canadian Administrative Agent in writing that it has
converted to U.S. GAAP and thereafter all references to GAAP shall mean
U.S. GAAP.
"GUARANTOR" means any Person, including an Unlimited Guarantor and a
Direct Guarantor, which shall have provided a guarantee of a Borrower's
obligations hereunder in favour of the Collateral Agent and/or the
Lenders.
"GUARANTEED OBLIGATIONS" means the Canadian Borrower's Guaranteed
Obligations, (as such term is defined in Section 16.1(a)) and/or the
Unlimited Guarantor's Guaranteed Obligations (as such term is defined
in Section 16.1(b)).
"HAZARDOUS MATERIAL" means any substance, waste, solid, liquid, or
gaseous matter, petroleum or petroleum derived substance,
micro-organism, sound, vibration, ray, heat,
- 15 -
odour, radiation, energy vector, plasma, organic or inorganic matter,
whether animate or inanimate, transient reaction intermediate or any
combination of the foregoing deemed hazardous, hazardous waste, solid
waste, or pollutant, a deleterious substance, or a contaminant under
any Environmental Law.
"HEDGING AGREEMENTS" means one or more interest rate and/or currency
hedge agreements entered into between the Canadian Borrower and a
Canadian Lender from time to time to a maximum aggregate notional
amount of Cdn. $50,000,000 for all Canadian Lenders and between a U.S.
Borrower and a U.S. Lender from time to time to a maximum aggregate
notional amount of U.S. $130,000,000 for all U.S. Lenders.
"HIGHER PRICING PERIOD" means a Quarter next following a Quarter when
the Canadian Borrower is maintaining:
(a) a Total Debt/Adjusted EBITDA Ratio equal to or greater than 3
to 1; or
(b) an Interest Coverage Ratio of less than 3.5 to 1.
"INITIAL ADVANCE" means, in respect of a Facility, the Borrowing, or
where more than one Borrowing may be made thereunder, the first
Borrowing, contemplated to be made thereunder pursuant to this
Agreement.
"INTEREST COVERAGE RATIO" means, in respect of any period, the quotient
obtained by dividing (a) the amount (as numerator) obtained by
subtracting (i) capital expenditures (other than acquisition
expenditures) for such period from (ii) Adjusted EBITDA for such period
by (b) the sum of interest expense on Total Debt for such period. In
calculating such interest expense, there shall be included a 12 month
interest burden, so as to reflect the incremental debt drawn down to
effect a Permitted Acquisition, calculated at the current rate of
interest incurred by the Canadian Borrower on its Total Debt for such
period.
"INTEREST DATE" means (a) in respect of a Prime Loan or an Alternate
Base Rate Loan and Article XII, the 1st Business Day of each Quarter
and (b) in respect of a COF Loan or a Libor Loan, the last day of the
applicable Interest Period and, where any Interest Period is longer
than 90 days or 3 months, as the case may be, the 90th day or, as the
case may be, the last Business Day of such Interest Period.
"INTEREST PERIOD" means a COF Interest Period or a Libor Interest
Period, as applicable.
"ISSUING BANK" means, in the case of Letters of Credit issued under the
Canadian Facilities, a Canadian Lender which is a designated Schedule I
Canadian chartered bank as may be agreed to by the Canadian Lenders
and, in the case of Letters of Credit issued under the U.S. Facilities,
a U.S. Lender so designated by the U.S. Lenders, in any case,
- 16 -
which issues Letters of Credit hereunder. As of the Effective Date the
Issuing Bank for Letters of Credit issued under the Canadian Revolving
Facility is TD and the Issuing Bank for Letters of Credit issued under
the U.S. Revolving Facility is FNBC.
"LEAD ARRANGER" means Dresdner Bank Canada and its successors and
assigns.
"LENDERS" means the Canadian Lenders and the U.S. Lenders and their
respective successors and assigns. "Lender" means any Canadian Lender
or U.S. Lender, as the case may be.
"LENDERS' COUNSEL" means Xxxxxxx Xxxxxx or any other firm of solicitors
selected by the Majority Lenders.
"LETTER OF CREDIT" means a Standby Letter of Credit or a Trade Letter
of Credit issued by an Issuing Bank at the request of a Borrower in an
amount not to exceed the unused portion of the applicable Revolving
Facility.
"LETTER OF CREDIT FEE" means a monthly fee equivalent to the following
annual returns on each Lender's Participation in the average daily
balance of the face amount of Letters of Credit outstanding:
(a) prior to June 1, 2000, at any time during:
(i) a Low Pricing Period or a Mid-Pricing Period, 1.25%
per annum, and
(ii) a Higher Pricing Period, 1.50% per annum;
(b) on or after June 1, 2000, at any time, during:
(i) a Low Pricing Period: 1.00% per annum,
(ii) a Mid-Pricing Period: 1.25% per annum; and
(iii) a Higher Pricing Period: 1.50% per annum.
"LIBOR" means, with respect to any Libor Interest Period, the rate of
interest per annum, rounded upwards, if necessary, to the nearest whole
multiple of 1/16%, established by the Canadian Administrative Agent or
the U.S. Administrative Agent, as the case may be, to be the average of
the rates at which the Libor Reference Bank, in accordance with their
normal practice, would be prepared to offer deposits in U.S. Dollars to
leading banks in the London Interbank Market, for delivery on the first
day of the relevant Libor Interest Period, as determined at or about
11:00 a.m. (London time) 2 Business Days before the first day of such
Libor Interest Period for a period equal to
- 17 -
such Libor Interest Period in an amount substantially equal to the
amount of such Libor Loan.
"LIBOR DETERMINATION DATE" means any date on which the Canadian
Administrative Agent or the U.S. Administrative Agent, as the case may
be, determines LIBOR for a Libor Interest Period.
"LIBOR INTEREST PERIOD" means with respect to any Borrowing by way of a
Libor Loan, the period of 1, 2, 3 or 6 months (as selected by the
Canadian Borrower and notified to the Canadian Administrative Agent or
selected by a U.S. Borrower and notified to the U.S. Administrative
Agent, as the case may be, pursuant to Section 4.5 and subject to
availability) commencing with the applicable Drawdown Date.
"LIBOR LOAN" means a Loan made available by the U.S. Lenders to a U.S.
Borrower or by the Canadian Lenders to the Canadian Borrower, as the
case may be, outstanding from time to time and denominated in U.S.
Dollars and on which interest is to be paid in accordance with Section
4.1.
"LIBOR MARGIN" means in respect of a Libor Loan or portion thereof
outstanding:
(a) prior to June 1, 2000, at any time during:
(i) a Low Pricing Period or a Mid-Pricing Period: 1.25%
per annum, and
(ii) a Higher Pricing Period: 1.50% per annum; and
(b) on or after June 1, 2000, at any time during:
(i) a Low Pricing Period: 1.00% per annum,
(ii) a Mid-Pricing Period: 1.25% per annum, and
(iii) a Higher Pricing Period: 1.50% per annum.
"LIBOR REFERENCE BANK" means the Canadian Administrative Agent with
respect to Libor Loans made to the Canadian Borrower and the U.S.
Administrative Agent with respect to Libor Loans made to a U.S.
Borrower and or any other Lender or Affiliate thereof appointed as such
in replacement thereof under Section 13.3 (c).
"LIEN" means with respect to the property or assets of any Person, a
mortgage, pledge, hypothecation, encumbrance, lien (statutory or
other), charge or other security interest of any kind in or with
respect to such property or assets (including, without limitation, any
conditional sale or other title retention agreement, and any financing
lease under
- 18 -
which such Person is lessee having substantially the same economic
effect as any of the foregoing).
"LOANS" means collectively, that portion of any Borrowing outstanding
from time to time by way of Libor Loans, COF Loans, Prime Loans,
Alternate Base Rate Loans or, as the context may require, all Loans
outstanding at any time. "Loan" means, at any time, any Libor Loan, COF
Loan, Prime Loan, or Alternate Base Rate Loan, as the case may be.
"LOW PRICING PERIOD" means a Quarter next following a Quarter when the
Canadian Borrower is maintaining:
(a) a Total Debt/Adjusted EBITDA Ratio of less than 2.5 to 1; and
(b) an Interest Coverage Ratio of equal to or greater than 4 to 1.
"MAJORITY LENDERS" means 2 or more Lenders having at least 66-2/3% of
the Total Commitments or, if the Commitments have terminated, of total
Borrowings outstanding at such time. For purposes of this definition
each U.S. Lender and its related Canadian Lender (which may be the same
institution in certain cases) shall be considered one Lender and the
Commitments (or Borrowings) of each such related U.S. and Canadian
Lender shall be aggregated for purposes of determining the requisite
percentage.
"MANAGERS" means Royal Bank of Canada, Canadian Imperial Bank of
Commerce and The Bank of Nova Scotia and their successors and assigns.
"MATERIAL CONTINGENT OBLIGATION" means, in respect of the Canadian
Borrower or its Subsidiaries, a contingent obligation or liability of
Cdn.$1,000,000 (or the Equivalent Amount thereof in U.S.$) or more or
which is otherwise required to be disclosed to securities regulators or
exchanges or the public.
"MAXIMUM ACQUISITION TOTAL DEBT/ADJUSTED EBITDA RATIO" means, in
respect of any proposed acquisition of a Target Acquisition Entity, the
Total Debt/Adjusted EBITDA Ratio calculated as at the time of
completion of such acquisition, on the basis that Adjusted EBITDA shall
be adjusted to include pro forma trailing EBITDA for a period of 12
consecutive calendar months for the Target Acquisition Entity including
a full year impact of the cost savings readily identifiable and which
can be immediately implemented such as elimination of salaries for
redundant employees and elimination of various administrative functions
which will, in the reasonable opinion of the Canadian Borrower,
satisfactory to the Majority Lenders, become unnecessary or otherwise
more cost effectively performed.
- 19 -
"MAXIMUM TOTAL DEBT/ADJUSTED EBITDA RATIO" means for each period of 4
consecutive Quarters or 12 consecutive calendar months, a Total
Debt/Adjusted EBITDA Ratio of:
(a) not more than: 3.5 to 1; or
(b) if the Interest Coverage Ratio is less than 3.0 to 1 after
April 1, 2000, not more than: 3.25 to 1; or
(c) if the Interest Coverage Ratio is less than 3.0 to 1 after
April 1, 2001, not more than: 3.0 to 1;
for the purposes of calculating a Total Debt/Adjusted EBITDA Ratio,
Total Debt is measured as at the date of calculation.
"MAXIMUM TOTAL DEBT/CAPITALIZATION RATIO" means, at any time, a Total
Debt/Capitalization Ratio of not more than .75 to 1.
"MID-PRICING PERIOD" means a Quarter next following a Quarter when the
Canadian Borrower is maintaining:
(a) a Total Debt/Adjusted EBITDA Ratio of less than 3 to 1 and
greater than or equal to 2.5 to 1; and
(b) an Interest Coverage Ratio equal to or greater than 3.5 to 1
and less than 4 to 1.
"MINIMUM BUSINESS VALUE/TOTAL DEBT RATIO" means a Business Value/Total
Debt Ratio of at least 1.25 to 1.
"MINIMUM FIXED CHARGE COVERAGE RATIO" means a Fixed Charge Coverage
Ratio of at least 1.5 to 1.
"MINIMUM INTEREST COVERAGE RATIO" means an Interest Coverage Ratio of
at least 2.5:1.
"MINIMUM WORKING CAPITAL RATIO" means a Working Capital Ratio of at
least 1.1 to 1.
"NET PROCEEDS", in respect of any Bankers' Acceptance, means the amount
obtained by applying the Reference Bankers' Acceptance Discount Rate to
the Principal Amount of such Bankers' Acceptance in accordance with the
formula set out in Schedule "B".
"NON-CONSENTING LENDER" has the meaning ascribed to it in Section
3.8(e).
- 20 -
"NON-EXTENDING LENDERS CONVERSION DATE" has the meaning ascribed to it
in Section 3.8(e).
"NON-EXTENSION CONVERSION DATE" has the meaning ascribed to it in
Section 3.8(d).
"NSULC" means FirstService Nova Scotia Corp.
"ORIGINAL CREDIT AGREEMENT" has the meaning attributed thereto in the
recitals.
"OWNERSHIP AND CONTROL" has the meaning attributed thereto in Section
8.1(k).
"PARTICIPATION" of a Lender means the percentage of the Commitment
indicated opposite its name on the execution pages hereof in relation
to, in the case of a U.S. Lender, the Total U.S. Commitments and in the
case of a Canadian Lender, the Total Cdn. Commitments or, at such time
as the Commitments have terminated, the percentage of Advances made by
such U.S. Lender or Canadian Lender of all Advances then outstanding
under the U.S. Facilities or the Canadian Facilities, respectively.
"PERMITTED ENCUMBRANCES" has the meaning ascribed to it in Section
8.2(n).
"PERMITTED LOANS" has the meaning ascribed to it in Section 8.2(k)(ii).
"PERMITTED VTBS" has the meaning ascribed to it in Section 8.2(n).
"PERSON" means any individual, firm, company, corporation, entity,
joint venture, joint-stock company, trust, unincorporated organization,
government or state entity or any association or a partnership (whether
or not having separate legal personality) of two or more of the
foregoing.
"PREPAID BANKERS' ACCEPTANCES" has the meaning attributed thereto in
Section 7.5 (c).
"PRICING PERIOD" means a Low Pricing Period, a Mid-Pricing Period or a
Higher Pricing Period.
"PRIME LOANS" means the Loans, or portion of them, made available by
the Canadian Lenders to the Canadian Borrower outstanding from time to
time which are drawn down in Canadian Dollars and in respect of which
interest is payable in accordance with Section 4.3.
- 21 -
"PRIME MARGIN" means in respect of a Prime Loan or portion thereof
outstanding:
(a) prior to June 1, 2000 at any time during:
(i) a Low Pricing Period or a Mid-Pricing Period, .50%
per annum; and
(ii) a Higher Pricing Period, .75% per annum; and
(b) on or after June 1, 2000, at any time during:
(i) a Low Pricing Period, .25% per annum;
(ii) a Mid-Pricing Period, .50%; and
(iii) a Higher Pricing Period, .75% per annum.
"PRIME RATE" means, at any time, the greater of (a) the floating annual
rate of interest calculated from time to time by the Canadian
Administrative Agent as the base rate, calculated on the basis of a
year of 365 or 366 days, as the case may be, which the Prime Reference
Bank uses to determine rates of interest on Canadian Dollar loans to
customers in Canada and designates as its prime rate and (b) the rate
expressed as an annual percentage equal to the sum of (x) .75% per
annum and (y) the 30 Day BA Reference Rate.
"PRIME REFERENCE BANK" means the Canadian Administrative Agent or any
other Canadian Lender appointed as such in replacement thereof in
accordance with the provisions of Section 13.3(c).
"PRINCIPAL AMOUNT" means (a) for a Bankers' Acceptance or a Letter of
Credit, the face amount thereof and (b) for a Loan, the principal
amount thereof.
"QUARTER" means a fiscal quarter of any Fiscal Year.
"REFERENCE BANK" means the Libor Reference Bank, the Prime Reference
Bank, the Alternate Base Rate Reference Bank or the Reference Bank for
Bankers' Acceptances, as the context requires.
"REFERENCE BANKERS' ACCEPTANCE DISCOUNT RATE" means the rate,
calculated on the basis of a year of 365 days, determined from time to
time by the Canadian Administrative Agent as the discount rate for
Bankers' Acceptances, based on the discount rate reported to the
Canadian Administrative Agent by the Reference Bank for Bankers'
Acceptances, established in accordance with its normal practices at or
about 9:30 a.m. on the Acceptance Date, for bankers' acceptances
accepted by such Reference Bank having a
- 22 -
face value equal to or in excess of Cdn. $300,000 and an identical term
to that of the proposed Bankers' Acceptances to be purchased on such
day.
"REFERENCE BANK FOR BANKERS' ACCEPTANCES" means the Canadian
Administrative Agent or any other Canadian Lender appointed as such in
replacement thereof under Section 13.3 (c).
"REPAYMENT DATE" means a day, other than the Final Maturity Date, on
which a Borrower repays all or part of a Loan pursuant to Section 2.2.
"REVOLVING FACILITIES" has the meaning attributed thereto in the
recitals.
"SECURITY" means the security described in Schedule "C".
"SHAREHOLDERS' AGREEMENTS" means the shareholders' agreements described
in Schedule "D".
"STANDBY LETTER OF CREDIT" means a standby letter of credit issued by
any Issuing Bank pursuant to Section 2.11 or a letter of guarantee
issued by an Issuing Bank which is a Canadian Lender.
"SUBSIDIARY" of any Person means any corporation or other entity of
which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or of others
performing similar functions are directly or indirectly owned or
controlled by such Person.
"TD" means The Toronto-Dominion Bank.
"TARGET ACQUISITION ENTITY" means an Eligible Business to be acquired
by the Canadian Borrower or a Subsidiary thereof as permitted under
this Agreement.
"TAX" includes all present and future taxes, levies, imposts, stamp
taxes, duties, withholdings and all penalty, interest and other
payments on or in respect thereof.
"TOTAL CDN. COMMITMENTS" means the aggregate of the Canadian Lenders'
Commitments for the Canadian Facilities from time to time.
"TOTAL COMMITMENTS" means the aggregate for all Facilities from time to
time of the Lenders' Commitments from time to time.
"TOTAL U.S. COMMITMENTS" means the aggregate of the U.S. Lenders'
Commitments for the U.S. Facilities from time to time.
- 23 -
"TOTAL DEBT" shall include the obligations under this Agreement,
Financial Contract Obligations, guaranteed obligations, capital leases,
vendor-take-back financing and subordinated debt of the Canadian
Borrower on a consolidated basis and shall be determined in accordance
with Cdn. GAAP after deduction of cash-on-hand.
"TOTAL DEBT/ADJUSTED EBITDA RATIO" means, at any time, the quotient
obtained by dividing (a) Total Debt at such time (as numerator) by (b)
Adjusted EBITDA for the period of the 4 consecutive Quarters or, in the
case of the calculation of the Maximum Acquisition Total Debt/Adjusted
EBITDA Ratio, 12 consecutive calendar months, most recently ended (as
denominator).
"TOTAL DEBT/CAPITALIZATION RATIO" means, at any time, the quotient
obtained by dividing (a) Total Debt (as numerator) by (b)
Capitalization (as denominator).
"TOTAL SHAREHOLDERS' EQUITY" has the meaning attributed thereto under
Cdn. GAAP.
"TRADE LETTER OF CREDIT" means a trade letter of credit or letter of
guarantee acceptable to the Majority Lenders, acting reasonably, issued
by an Issuing Bank pursuant to Section 2.11.
"TRANSFER CERTIFICATE" means a certificate substantially in the form
set out in Schedule "E" signed by a Lender and a Transferee.
"TRANSFEREE" means a bank or other financial institution to which a
Lender seeks to assign or transfer all or part of such Lender's rights
and obligations hereunder in accordance with Article XIV.
"TYPE" means, with respect to any Loan, a Prime Loan, a COF Loan, an
Alternate Base Rate Loan or a LIBOR Loan and otherwise , with respect
to any Borrowing or portion thereof, Bankers' Acceptances or Letters of
Credit.
"U.S. ACQUISITION FACILITY" has the meaning ascribed thereto in the
recitals.
"U.S. ADMINISTRATIVE AGENT" means Dresdner Bank Canada and its
successors and assigns duly appointed in accordance with Section 13.6.
"U.S. ASSIGNEE" has the meaning ascribed to it in Section 14.3(a).
"U.S. BORROWERS" means, collectively, FS (USA) and FSLP and each of
such U.S. Borrowers being a "U.S. Borrower".
"U.S. DOLLARS" means the lawful money of the United States of America
and "U.S. $" has a corresponding meaning.
- 24 -
"U.S. FACILITIES" means, collectively, the U.S. Revolving Facility
(including the U.S. Overdraft Facility) and the U.S. Acquisition
Facility.
"U.S. GAAP" means generally accepted accounting principles applied in
the United States.
"U.S. LENDERS" means the Lenders identified as U.S. Lenders on the
execution pages hereof having a Commitment to lend or when such
Commitment shall have terminated, having Borrowings outstanding to the
U.S. Borrower under the U.S. Facilities.
"U.S. OVERDRAFT FACILITY" means that portion of the U.S. Revolving
Facility in an aggregate amount not to exceed the lesser of the unused
amount of the U.S. Revolving Facility and U.S. $4,000,000 made
available to the U.S. Borrowers in accordance with Section 2.13.
"U.S. REVOLVING FACILITY" has the meaning ascribed thereto in the
recitals.
"UNDERTAKING TO SECURE" means the Undertaking to be provided by
Subsidiaries of the Canadian Borrower, other than Subsidiaries that are
Wholly-Owned Subsidiaries as of the date of this Agreement,
substantially in the form set out in Schedule "F".
"UNLIMITED GUARANTOR" means FirstService GP Inc.
"VIOLATION NOTICE" means any notice received by a Borrower or any of
its Subsidiaries from any governmental or regulatory body or agency
under any Environmental Law that such Borrower or any of its
Subsidiaries is in non-compliance with the requirements of any
Environmental Law.
"WHOLLY-OWNED SUBSIDIARY" means any corporation or other entity of
which 100% of the securities or other ownership interests are owned
directly or indirectly by a Borrower.
"WORKING CAPITAL RATIO" means at any time the quotient obtained by
dividing (a) Current Assets of the Canadian Borrower at such time (as
numerator) by (b) Current Liabilities of the Canadian Borrower at such
time (as denominator).
"YEAR 2000 PROBLEM" means the risk that principal computer applications
used in connection with a Borrower's business or the business of any
Subsidiary of a Borrower may be unable to recognize and perform
properly date sensitive functions involving certain dates prior to or
any date after December 31, 1999.
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1.2 REFERENCES
Any reference made in this Agreement to:
(a) Any of the "Canadian Administrative Agent", the "U.S.
Administrative Agent", the "Collateral Agent", the "Lenders"
or a "Lender" shall so be construed as to include its or their
respective successors and permitted assigns.
(b) A time of day is, unless otherwise stated, a reference to
Toronto time.
(c) Sections, Articles or Schedules is, unless otherwise
indicated, to Sections and Articles of this Agreement and to
Schedules to this Agreement, as the case may be. The
provisions of each Schedule shall constitute provisions of
this Agreement as though repeated at length herein.
(d) A "month" is a reference to a period starting on one day in a
calendar month to but excluding the numerically corresponding
day in the next calendar month except that, where any such
period would otherwise end on a day other than a Business Day,
it shall end on the next Business Day, unless that day falls
in the calendar month succeeding that in which it would
otherwise have ended, in which case it shall end on the next
preceding Business Day in a calendar month or if there is no
numerically corresponding day in the month in which that
period ends, that period shall end on the last Business Day in
that later month (and references to "months" (other than
"calendar months") shall be construed accordingly).
1.3 INTERPRETATION
In this Agreement:
(a) the singular includes the plural and vice-versa;
(b) "in writing" or "written" includes printing, typewriting, or
any electronic means of communication capable of being visibly
reproduced at the point of reception, including telex,
telecopy and telegraph and, as between an Agent and the
Lenders (but only when so directed by an Agent), Reuters
screen or equivalent means of communication;
(c) a document, notice, note, xxxx of exchange or other instrument
shall be considered to have been validly signed or executed,
if it has been signed by either an original signature or a
facsimile signature or stamp affixed by an Authorized
Signatory, provided that this Agreement, all collateral
documents contemplated hereby, any promissory notes required
by a Lender and the bills of exchange or depository notes to
be deposited pursuant to Section 2.6 shall be considered to be
validly
- 26 -
signed or executed only if signed by an original signature of
an Authorized Signatory; and
(d) all calculations of interest under this Agreement are to be
made on the basis of the stated rates set out herein and not
on the basis of the effective yearly rates determined on any
basis which gives effect to the principle of deemed
reinvestment.
1.4 HEADINGS AND TABLE OF CONTENTS
The headings, the table of contents, the Articles and the Sections are
inserted for convenience only and are to be ignored in construing this
Agreement.
1.5 ACCOUNTING TERMS
All accounting terms not defined in this Agreement shall be interpreted
in accordance with GAAP unless otherwise expressly indicated. Unless otherwise
indicated, references to accounting terms, ratios or financial tests applicable
to the Canadian Borrower hereunder shall be references to such terms, ratios or
tests, calculated and determined on a consolidated basis.
1.6 RECITALS
The recitals to this Agreement form part hereof.
1.7 PRECEDENCE
In the event that any provisions of the Security contradict or are
otherwise incapable of being construed in conjunction with the provisions of
this Agreement, the provisions of this Agreement shall take precedence over
those contained in the Security and, in particular, if any act of a Borrower or
a Guarantor is expressly permitted under this Agreement but is prohibited under
the Security, any such act shall be permitted under this Agreement and shall be
deemed to be permitted under the Security.
- 27 -
ARTICLE II
FACILITIES
2.1 FACILITIES
(a) Subject to the terms of this Agreement, (i) the Canadian
Lenders shall extend credit to the Canadian Borrower by way of
(A) the Canadian Revolving Facility and (B) the Canadian
Acquisition Facility; and (ii) the U.S. Lenders shall extend
credit to the U.S. Borrowers by way of the (A) the U.S.
Revolving Facility and (B) the U.S. Acquisition Facility.
(b) The proceeds of Borrowings shall be used by the Borrowers,
subject to the terms and conditions of this Agreement, for the
purposes set out in the recitals.
2.2 NOTICE AND REVOLVING NATURE OF CERTAIN BORROWINGS
(a) The Canadian Borrower may, subject to the terms of this
Agreement, upon giving the Canadian Administrative Agent prior
written notice:
(i) by not later than 10:00 a.m. on the 3rd Business Day
prior to the Drawdown Date for each Advance which is
a Libor Loan;
(ii) by not later than 10:00 a.m. on the 2nd Business Day
prior to the Drawdown Date or Repayment Date or
Acceptance Date, as the case may be, for any
Borrowing or Conversion under the Canadian Revolving
Facility or the Canadian Acquisition Facility (other
than a Libor Loan);
borrow, repay and/or reborrow or convert in accordance with
Section 2.3 under the Canadian Revolving Facility or the
Canadian Acquisition Facility, (A) in respect of Prime Loans,
COF Loans denominated in Cdn.$ or Bankers' Acceptances issued
by it, in initial minimum tranches of Cdn. $300,000 and
thereafter in multiples of Cdn. $100,000 and (B) in respect of
Alternate Base Rate Loans or Libor Loans in initial minimum
tranches of U.S.$300,000 and thereafter in multiples of U.S.
$100,000, provided further, however, that repayment of COF
Loans and Libor Loans shall be made on the last day of the
applicable Interest Period.
(b) Notwithstanding the provisions of Section 2.2(a), the Canadian
Administrative Agent shall use its best efforts to make
Advances by way of Prime Loans under the Canadian Revolving
Facility available to the Canadian Borrower on the Business
Day following the receipt by the Canadian Administrative Agent
of a Drawdown Notice for a Prime Loan.
- 28 -
(c) The U.S. Borrowers may, subject to the terms of this
Agreement, upon giving the U.S. Administrative Agent prior
written notice:
(i) by not later than 10:00 a.m. on the 3rd Business Day
prior to the Drawdown Date for each Advance which is
a Libor Loan;
(ii) by not later than 10:00 a.m. on the 2nd Business Day
prior to the Drawdown Date or Repayment Date, as the
case may be, for any Borrowing or Conversion under
the U.S. Revolving Facility or the U.S. Acquisition
Facility (other than a Libor Loan);
borrow, repay and/or reborrow or convert in accordance with
Section 2.3, under the U.S. Revolving Facility or the U.S.
Acquisition Facility, (A) in respect of Alternate Base Rate
Loans in initial minimum tranches of U.S. $300,000 and
thereafter in multiples of U.S. $100,000 and (B) in respect of
Libor Loans in initial minimum tranches of U.S. $1,000,000 and
thereafter in multiples of U.S. $100,000, provided further,
however, that repayment of Libor Loans shall be made on the
last day of the applicable Interest Period.
2.3 CONVERSION
A Borrower may, upon giving prior written notice to the Canadian
Administrative Agent and/or the U.S. Administrative Agent, as the case may be,
in accordance with Section 2.2 containing the information set out in Schedule
"G" effective on any Business Day during the term of this Agreement (a
"Conversion"), convert on the Conversion Date Advances outstanding from one Type
to another Type to the extent such Type is available hereunder, provided that:
(a) a Libor Loan or a COF Loan may be converted to another Type
only on the last day of the Interest Period applicable to that
Libor Loan or COF Loan, as the case may be;
(b) Borrowings or any portion thereof comprising Bankers'
Acceptances may be converted to another Type only on the
applicable B/A Maturity Date; and
(c) the conditions precedent set out in Section 5.1 have been
fulfilled.
The Conversion of any Advances shall not reduce any amount available under the
Total Commitments.
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2.4 MAKING BORROWINGS
(a) If the Canadian Borrower gives prior written notice to the
Canadian Administrative Agent of its intention to draw down a
Borrowing, including Bankers' Acceptances, a COF Loan, a Prime
Loan, an Alternate Base Rate Loan or Libor Loan or a
Conversion in accordance with Section 2.2 or 2.3, the Canadian
Administrative Agent shall on the same day it receives the
notice notify each Canadian Lender by telephone or in writing
of the amount of the COF Loan, Prime Loan, Alternate Base Rate
Loan, Libor Loan or Bankers' Acceptance and such Canadian
Lender's portion thereof, and
(i) each Canadian Lender shall, not later than 12:00
noon. on the Drawdown Date, make, or procure to be
made, its Participation in such Bankers' Acceptances,
COF Loan, Prime Loan, Libor Loan or Alternate Base
Rate Loan, as the case may be, available to the
Canadian Administrative Agent in accordance with
Article X; and
(ii) the Canadian Administrative Agent shall, not later
than 4:00 p.m. on the Drawdown Date, make such
Bankers' Acceptances, COF Loan, Prime Loan, Libor
Loan or Alternate Base Rate Loan, as the case may be,
available to the Canadian Borrower, in accordance
with Article X.
(b) If a U.S. Borrower gives prior written notice to the U.S.
Administrative Agent of its intention to draw down a
Borrowing, including an Alternate Base Rate Loan or a Libor
Loan, or a Conversion of an Alternate Base Rate Loan or a
Libor Loan in accordance with Section 2.2 or 2.3, the U.S.
Administrative Agent shall on the same day it receives the
notice notify each U.S. Lender by telephone or in writing of
the amount of the COF Loan or Libor Loan and such U.S.
Lender's portion thereof, and
(i) each U.S. Lender shall, not later than 12:00 noon. on
the Drawdown Date, make, or procure to be made, its
Participation in the Alternate Base Rate Loan or
Libor Loan, as the case may be, available to the U.S.
Administrative Agent in accordance with Article X;
and
(ii) the U.S. Administrative Agent shall, not later than
4:00 p.m. on the Drawdown Date, make such Alternate
Base Rate Loan or Libor Loan, as the case may be,
available to the U.S. Borrower, in accordance with
Article X.
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2.5 PARTICIPATION OF EACH LENDER
(a) The amount of the Participation of each Lender in any COF
Loan, Libor Loan, Prime Loan, or Alternate Base Rate Loan or
issue of Bankers' Acceptances shall be determined by the
Canadian Administrative Agent or the U.S. Administrative
Agent, as the case may be, by reference, subject to the
Canadian Administrative Agent's authority pursuant to
paragraph (b) of this Section 2.5, to each such Lender's
Participation.
(b) The Canadian Administrative Agent is authorized by the
Canadian Borrower and each Canadian Lender to allocate amongst
the Canadian Lenders the Bankers' Acceptances to be issued and
purchased in such manner and amounts as the Canadian
Administrative Agent may, in its sole and unfettered
discretion consider necessary and equitable, rounding up or
down, so as to ensure that no Canadian Lender is required to
accept and purchase a Bankers' Acceptance for a fraction of
Cdn. $100,000; provided however the Canadian Administrative
Agent shall seek to allocate such Bankers' Acceptances in such
amounts and for such terms, over time, as to maintain the
Participations of all such Canadian Lenders in substantially
the relative amounts and percentages set out on the execution
pages for such Lenders. To the extent, if any, necessary to
maintain each such Participation as the result of the
foregoing, the Canadian Administrative Agent shall allocate a
lesser or greater amount of other Advances to each Canadian
Lender.
(c) At the time of making any Loan, the Canadian Administrative
Agent or the U.S. Administrative Agent, as the case may be,
shall, if appropriate, re-allocate amounts made available to
the Borrowers under any of the Loans to give effect to the
Participation of each Lender, determined immediately prior to
the making of a Loan.
2.6 BANKERS' ACCEPTANCES
(a) Upon execution of this Agreement, the Canadian Borrower shall
deliver to the Canadian Lenders depository notes and/or bills
of exchange, in the form for Bankers' Acceptances of each
Canadian Lender, executed in blank by its Authorized
Signatories in sufficient quantity and thereafter shall, from
time to time upon request from the Canadian Administrative
Agent, deliver to such Canadian Lenders further quantities of
such bills of exchange and/or depository notes (on such
Canadian Lender's forms) so executed, and the Canadian Lenders
shall hold such bills of exchange and/or depository notes in
safekeeping. The form of Bankers' Acceptances shall be as set
out in Schedule "H".
- 31 -
(b) The Canadian Borrower hereby agrees to indemnify each such
Canadian Lender against any cost, expense (including
reasonable counsel fees and disbursements) claim, demand,
action, loss or liability (except to the extent resulting from
the gross negligence or wilful misconduct of such Canadian
Lender) that such Lender may suffer or incur in connection
with the deposit, safekeeping or completion in accordance with
Section 2.8 of such bills of exchange and/or depository notes.
Each Canadian Lender is hereby appointed attorney-in-fact for
such completion and to execute any endorsement necessary in
connection with the transactions contemplated by this
Agreement with respect to Bankers' Acceptances. These
agreements shall survive the termination of this Agreement and
shall remain in full force and effect after termination of
this Agreement.
(c) With respect to any such bills of exchange and/or depository
notes deposited in accordance with this Section 2.6, the
Canadian Borrower shall furnish to each Canadian Lender
accepting such drafts, in form and substance satisfactory to
such Lender, (i) evidence of the authority of any officers or
other representatives authorized to sign and to act with
respect to such drafts, (ii) if such Lender shall so request,
a formal power of attorney authorizing it to take all actions
contemplated hereby with respect to Bankers' Acceptances as
provided herein, and (iii) such other documents as such
Canadian Lender or its counsel may reasonably request.
(d) When the Canadian Borrower wishes to make a Borrowing by way
of Bankers' Acceptances it shall give the Canadian
Administrative Agent the notice required pursuant to Section
2.2. Bankers' Acceptances shall have terms of at least 30 days
and not more than 180 days excluding days of grace (and which
shall, in no event, end on a date after the Final Maturity
Date).
(e) On the same day it receives such notice, the Canadian
Administrative Agent shall notify by telephone or in writing
all the Canadian Lenders of the details of the proposed issue,
specifying, for each Canadian Lender:
(i) the Principal Amount of the Bankers' Acceptances to
be accepted and purchased by such Canadian Lender;
and
(ii) the term of such Bankers' Acceptances.
2.7 ACCEPTANCE DATE PROCEDURE
On the Acceptance Date, the following provisions shall apply:
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(a) At or about 9:30 a.m. on the Acceptance Date, the Canadian
Administrative Agent shall promptly determine the Reference
Bankers' Acceptance Discount Rate.
(b) Forthwith, and in any event not later than 10:30 a.m. that
same day, the Canadian Administrative Agent shall indicate to
each Canadian Lender:
(i) the Reference Bankers' Acceptance Discount Rate;
(ii) the amount of the Acceptance Fee applicable to those
Bankers' Acceptances to be accepted by such Canadian
Lender on such Acceptance Date, such Canadian Lender
being authorized by the Canadian Borrower to collect
such Acceptance Fee out of the Net Proceeds of those
Bankers' Acceptances mentioned in subsection (iii);
(iii) the Net Proceeds of those Bankers' Acceptances to be
accepted and purchased by such Canadian Lender on
such Acceptance Date; and
(iv) the amount obtained (the "Available Proceeds") by
subtracting the Acceptance Fee mentioned in
subsection (ii) from the Net Proceeds mentioned in
subsection (iii).
(c) Not later than 12:00 noon that same day, each Canadian Lender
shall make available to the Canadian Administrative Agent its
Available Proceeds.
(d) Not later than 4:00 p.m. that same day, the Canadian
Administrative Agent shall transfer all such Available
Proceeds so made available to it to the Canadian Borrower in
accordance with Section 10.3 and shall notify the Canadian
Borrower on such day either by telex or telephone (to be
confirmed subsequently by letter) of the details of the issue,
substantially in the form set out in Schedule "I".
2.8 PURCHASE OF BANKERS' ACCEPTANCES
Before giving value to the Canadian Borrower, the Canadian Lenders
shall, on the Acceptance Date, accept the Bankers' Acceptances, by inserting the
appropriate Principal Amount, Acceptance Date and maturity date thereof in
accordance with the Canadian Borrower's notice relating thereto and affixing
their acceptance stamps thereto, and shall purchase same. The Principal Amount
so accepted and purchased by any such Canadian Lender shall not exceed such
Canadian Lender's unutilized Commitment.
- 33 -
2.9 PAYMENT OF BANKERS' ACCEPTANCES
The Bankers' Acceptances shall be payable in accordance with the
following provisions:
(a) The Canadian Borrower shall pay to the Canadian Administrative
Agent for the account of the Canadian Lenders an amount equal
to the Principal Amount of the Bankers' Acceptances on their
respective B/A Maturity Dates.
(b) In the event the Canadian Borrower fails to notify the
Canadian Administrative Agent verbally (or at the discretion
of the Canadian Borrower, in writing), not later than 10:00
a.m. (such notice, if verbal, to be confirmed to the Canadian
Administrative Agent in writing later the same day, but not
necessarily by 10:00 a.m.), 2 Business Days prior to any B/A
Maturity Dates of a Bankers' Acceptance, that the Canadian
Borrower intends to pay with its own funds the Principal
Amount of the Bankers' Acceptances due on such B/A Maturity
Dates, the Canadian Borrower shall be deemed, for all
purposes, to have given the Canadian Administrative Agent
notice to convert the Principal Amount of such Bankers'
Acceptances into a COF Loan denominated in Cdn.$ having a COF
Interest Period of 30 days and the provisions of Section 2.3
shall apply mutatis mutandis save that:
(i) such B/A Maturity Date shall be considered to be the
Drawdown Date of such COF Loan;
(ii) the proceeds of such COF Loan shall be used to pay
the Principal Amount of the Bankers' Acceptances due
on such B/A Maturity Date; and
(iii) on such B/A Maturity Date, each Canadian Lender,
instead of making its Participation in such COF Loan
available to the Canadian Administrative Agent, shall
first directly apply its Participation in such COF
Loan in payment of its Participation in the Principal
Amount of the Bankers' Acceptances accepted,
purchased and issued by such Canadian Lender and due
on such B/A Maturity Date.
2.10 SET-OFF AND NETTING
On any Acceptance Date, Drawdown Date or Repayment Date, the Canadian
Administrative Agent or the U.S. Administrative Agent, as the case may be, shall
be entitled to set-off and net amounts payable on such date by the Canadian
Administrative Agent or the U.S. Administrative Agent, as the case may be, to a
Lender for the account of any Borrower against amounts payable on such date by
such Lender to the Canadian Administrative Agent or the U.S. Administrative
Agent, as the case may be, in connection with transactions conducted in the same
basis of borrowing, for the account of such Borrower. Similarly, on any
Acceptance Date,
- 34 -
Drawdown Date or Repayment Date, each Lender shall be entitled to set-off and to
net amounts payable on such date by such Lender to a Borrower (by payment to the
Canadian Administrative Agent or the U.S. Administrative Agent, as the case may
be), against amounts payable on such date by such Borrower to such Lender, in
accordance with the Canadian Administrative Agent's or the U.S. Administrative
Agent's, as the case may be, calculations.
2.11 LETTERS OF CREDIT
(a) Subject to the notice provisions of Sections 2.2 and 2.3 and
upon the terms and subject to the conditions hereof the
applicable Issuing Bank shall, at the request of a Borrower,
issue under the applicable Revolving Facility one or more
irrevocable Letters of Credit in such Issuing Bank's usual
form (or such other form as may be required by such Borrower
and is acceptable to the Issuing Bank acting reasonably),
expiring no later than, in the case of Standby Letters of
Credit, 365 days from the date of issuance and, in the case of
Trade Letters of Credit, 270 days from the date of issuance
and in no case later than 3 Business Days before the Final
Maturity Date, provided that the maximum amount payable under
all Letters of Credit shall not, at the time of issue of each
Letter of Credit, exceed Cdn.$5,000,000 or the Equivalent
Amount thereof in U.S. Dollars.
(b) In the event that an Issuing Bank is called upon by a
beneficiary to honour a Letter of Credit, such Issuing Bank
shall forthwith give notice thereof to the applicable
Borrower. Unless such Borrower has made other arrangements
with the Issuing Bank with respect to payment to the Issuing
Bank of an amount sufficient to permit the Issuing Bank to
discharge its obligations under the Letter of Credit plus that
amount equal to any and all charges and expenses which the
Issuing Bank may pay or incur relative to such Letter of
Credit, any such payment so payable in Canadian Dollars with
respect to the Canadian Revolving Facility shall be deemed to
be a Drawdown of a Prime Loan under the Canadian Revolving
Facility and any amount so payable in U.S. Dollars with
respect to a Letter of Credit issued on behalf of the Canadian
Borrower shall be deemed to be a Drawdown by way of an
Alternate Base Rate Loan under the Canadian Revolving
Facility, and any such amount so payable with respect to a
Letter of Credit issued on behalf of a U.S. Borrower shall be
deemed to be a Drawdown by way of an Alternate Base Rate Loan
under the U.S. Revolving Facility provided that the provisions
of Section 2.2 regarding notices shall not apply to such
Loans.
(c) Any Issuing Bank shall notify the Canadian Administrative
Agent or the U.S. Administrative Agent, as the case may be, of
each issuance or amendment of any Letter of Credit on the day
upon which such issuance or amendment occurs and the Issuing
Bank shall provide the Canadian Administrative Agent or the
U.S. Administrative Agent, as the case may be, with monthly
reports setting out the face amount of Letters of Credit
outstanding on each day of the preceding month.
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Each of the Lenders, other than an Issuing Bank, shall be
deemed to have purchased from such Issuing Bank its
Participation of the face amount of each Letter of Credit
issued by such Issuing Bank. Each of the Canadian Lenders
agrees to indemnify the Issuing Bank issuing Letters of Credit
under the Canadian Facilities and each of the U.S. Lenders
agrees to indemnify the Issuing Bank issuing Letters of Credit
under the U.S. Facilities, in each case as to such Lender's
Participation of any amount paid by the Issuing Bank under any
Letter of Credit plus that amount equal to any and all
payments, losses, costs, charges and expenses which such
Issuing Bank may pay or incur relative to such Letter of
Credit.
(d) The Borrowers shall indemnify the Issuing Banks against any
and all actions, proceedings, costs, damages, expenses, taxes
(other than taxes on overall net income, assets or capital),
claims and demands which the Issuing Banks may incur or
sustain by reason of or arising in any way whatsoever in
connection with the opening, establishing or paying of the
amounts payable under Letters of Credit issued at the request
of a Borrower or arising in connection with any amounts
payable by any Issuing Bank thereunder.
(e) Each Borrower for which a Letter of Credit has been issued on
its behalf shall pay to the Canadian Administrative Agent or
U.S. Administrative Agent, as the case may be, for the account
of the Canadian Lenders or the U.S. Lenders, as the case may
be, each month that Letters of Credit issued on behalf of such
Borrower are outstanding, the applicable Letter of Credit Fee.
(f) Each Borrower for which a Letter of Credit has been issued on
its behalf shall pay to the Canadian Administrative Agent or
the U.S. Administrative Agent, as the case may be, for the
account of the applicable Issuing Bank, sundry charges and
out-of-pocket expenses payable in respect of Letters of Credit
which the Issuing Bank issues pursuant to a request of such
Borrower.
2.12 CDN. OVERDRAFT FACILITY
(a) In order to facilitate the Canadian Borrower's cash management
requirements, TD in its capacity as a Lender agrees to make
available to the Canadian Borrower the Cdn. Overdraft Facility
as part of its Participation under the Canadian Revolving
Facility in accordance with Section 2.1. The Cdn. Overdraft
Facility shall form part of the Canadian Revolving Facility
and shall be used by the Canadian Borrower to fund amounts
which would otherwise be drawn down by the Canadian Borrower
by way of Prime Loans or Alternate Base Rate Loans under the
Canadian Revolving Facility pursuant to Section 2.2 but for
such amounts not being, in the case of Prime Loans, in a
minimum principal amount of Cdn.$300,000 and multiples of
Cdn.$100,000 thereafter and in the case of
- 36 -
Alternate Base Rate Loans in a minimum principal amount of
U.S.$300,000 and multiples of U.S.$100,000 thereafter.
Notwithstanding any other provision hereof, drawdowns under
the Cdn. Overdraft Facility are not subject to any minimum
amount. Any Borrowings under the Cdn. Overdraft Facility may
be drawn down by the Canadian Borrower without notice to TD by
way of presentment to TD of cheques and other bills of
exchange issued by the Canadian Borrower.
(b) TD shall provide the Canadian Administrative Agent with
monthly reports setting out the outstanding balance of the
Cdn. Overdraft Facility on each day of the preceding month.
(c) At any time and from time to time in its discretion, TD may
notify the Canadian Administrative Agent that TD wishes each
of the Canadian Lenders to provide its Participation in
Advances made under the Cdn. Overdraft Facility, in which case
the Canadian Administrative Agent shall forthwith notify each
of the Canadian Lenders of such Participation and each
Canadian Lender shall thereupon provide to the Canadian
Administrative Agent, for the account of TD, such Canadian
Lender's Participation under the Cdn. Overdraft Facility;
PROVIDED HOWEVER no such Participation shall cause any such
Canadian Lender to exceed its Commitment for the Canadian
Revolving Facility. The amounts so provided by the Canadian
Lenders in respect of the Cdn. Overdraft Facility shall be
deemed to be Prime Loans or Alternate Base Rate Loans
denominated in Cdn$ or U.S.$, as the case may be, under the
Canadian Revolving Facility in accordance with the provisions
of this Agreement (and for such purposes any notice provisions
or minimum amounts of such Loans otherwise required under this
Agreement shall be disregarded except for the proviso of this
Section 2.12(c)). The aggregate of the amounts paid by the
Canadian Lenders to the Canadian Administrative Agent in
respect of the Cdn. Overdraft Facility shall be paid by the
Canadian Administrative Agent to TD and applied by TD to
reduce the then outstanding Loans under the Cdn. Overdraft
Facility.
(d) (i) The Canadian Borrower shall pay interest payable on
Advances made under the Cdn. Overdraft Facility
directly to TD unless TD otherwise directs the
Canadian Borrower to make such payments to the
Canadian Administrative Agent; and
(ii) For purposes of determining the Prime Rate or the
Alternate Base Rate, as the case may be, for Advances
made under the Cdn. Overdraft Facility, TD shall be
the Alternate Base Rate Reference Bank or the Prime
Reference Bank, as the case may be.
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2.13 U.S. OVERDRAFT FACILITY
(a) In order to facilitate each U.S. Borrower's cash management
requirements, FNBC in its capacity as a U.S. Lender agrees to
make available to the U.S. Borrowers the U.S. Overdraft
Facility as part of its Participation under the U.S. Revolving
Facility in accordance with Section 2.1. The U.S. Overdraft
Facility shall form part of the U.S. Revolving Facility and
shall be used by the U.S. Borrowers to fund amounts which
would otherwise be drawn down by the U.S. Borrowers under the
U.S. Revolving Facility pursuant to Section 2.2 but for such
amounts not being, in a minimum principal amount of
U.S.$300,000 and multiples of U.S. $100,000 thereafter.
Notwithstanding any other provision hereof, Drawdowns under
the U.S. Overdraft Facility are not subject to any minimum
amount. Any Borrowings under the U.S. Overdraft Facility may
be drawn down by way of Alternate Base Rate Loans by the U.S.
Borrowers by providing notice to FNBC before 3:00 p.m. on the
date of the request for drawdown.
(b) FNBC shall provide the U.S. Administrative Agent with monthly
reports setting out the outstanding balance of the U.S.
Overdraft Facility on each day of the preceding month.
(c) At any time and from time to time in its discretion, FNBC may
notify the U.S. Administrative Agent that FNBC wishes each of
the U.S. Lenders to provide its Participation in Advances made
under the U.S. Overdraft Facility, in which case the U.S.
Administrative Agent shall forthwith notify each of the U.S.
Lenders of such Participation and each U.S. Lender shall
thereupon provide to the U.S. Administrative Agent, for the
account of FNBC, such U.S. Lender's Participation under the
U.S. Overdraft Facility; PROVIDED HOWEVER, no such
Participation shall cause any such U.S. Lender to exceed its
Commitment. The amounts so provided by the U.S. Lenders in
respect of the U.S. Overdraft Facility shall be deemed to be
Alternate Base Rate Loans denominated in U.S.$ under the U.S.
Revolving Facility in accordance with the provisions of this
Agreement (and for such purposes any notice provisions or
minimum amounts of such Loans otherwise required under this
Agreement shall be disregarded except for the proviso to this
Section 2.13(c)). The aggregate of the amounts paid by the
U.S. Lenders to the U.S. Administrative Agent in respect of
the U.S. Overdraft Facility shall be paid by the U.S.
Administrative Agent to FNBC and applied by FNBC to reduce the
then outstanding Loans under the U.S. Overdraft Facility.
(d) (i) The U.S. Borrowers shall pay interest on Advances
made under the U.S. Overdraft Facility directly to
FNBC unless FNBC otherwise directs the U.S.
Borrowers to make such payments to the U.S.
Administrative Agent; and
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(ii) For purposes of determining the Alternate Base Rate
for Advances made under the U.S. Overdraft Facility,
FNBC shall be the Alternate Base Rate Reference Bank.
ARTICLE III
REPAYMENT AND ACCOUNTS
3.1 REPAYMENT
The Principal Amount of all Borrowings outstanding under all of the
Facilities shall be repaid in full by the Borrowers on the Final Maturity Date
and the Commitments in respect of such Facilities shall terminate on such date.
3.2 ACCOUNTS KEPT BY THE CANADIAN ADMINISTRATIVE AGENT
The Canadian Administrative Agent shall keep in its books Accounts for
the Letters of Credit, the Prime Loans, Alternate Base Rate Loans, Libor Loans,
COF Loans, Bankers' Acceptances and other amounts payable by the Canadian
Borrower under this Agreement. The Canadian Administrative Agent shall make
appropriate entries showing, as debits, the amount of the indebtedness of the
Canadian Borrower in respect of the Letters of Credit, the Prime Loans,
Alternate Base Rate Loans, Libor Loans, COF Loans, and Bankers' Acceptances, as
the case may be, the amount of all accrued interest, and any other amount due to
the Canadian Lenders or the Agents pursuant hereto, according to the respective
Participation of each Lender, and showing, as credits, each payment or repayment
of principal and interest made in respect of such indebtedness, as well as any
other amount paid to the Canadian Lenders or the Agents pursuant hereto,
according to the respective Participation of each. Such Accounts shall
constitute (in the absence of manifest error) prima facie evidence of their
content against the Canadian Borrower and the Canadian Lenders. The Canadian
Administrative Agent shall supply any Canadian Lender and the Canadian Borrower,
upon request, with statements of such Accounts.
3.3 ACCOUNTS KEPT BY THE U.S. ADMINISTRATIVE AGENT
The U.S. Administrative Agent shall keep in its books Accounts for the
Letters of Credit, the Alternate Base Rate Loans and Libor Loans and other
amounts payable by the U.S. Borrowers under this Agreement. The U.S.
Administrative Agent shall make appropriate entries showing, as debits, the
amount of the indebtedness of the U.S. Borrowers in respect of the Alternate
Base Rate Loans and Libor Loans, as the case may be, the amount of all accrued
interest, and any other amount due to the U.S. Lenders or the Agents pursuant
hereto, according to the respective Participation of each Lender, and showing,
as credits, each payment or repayment of principal and interest made in respect
of such indebtedness, as well as any other
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amount paid to the U.S. Lenders or the Agents pursuant hereto, according to the
respective Participation of each. Such Accounts shall constitute (in the absence
of manifest error) prima facie evidence of their content against the U.S.
Borrowers and the U.S. Lenders. The U.S. Administrative Agent shall supply any
U.S. Lender and either U.S. Borrower, upon request, with statements of such
Accounts.
3.4 ACCOUNTS KEPT BY EACH CANADIAN LENDER
Each Canadian Lender shall keep in its books, in respect of its
Participation, accounts for the Letters of Credit, the Prime Loans, Alternate
Base Rate Loans, the COF Loans, Libor Loans, Bankers' Acceptances and other
amounts payable by the Canadian Borrower under this Agreement. Each Canadian
Lender shall make appropriate entries showing, as debits, the amount of the
indebtedness of the Canadian Borrower towards it in respect of the Letters of
Credit, the Prime Loans, Alternate Base Rate Loans, COF Loans, Libor Loans, and
Bankers' Acceptances, as the case may be, the amount of all accrued interest and
any other amount due to such Lender pursuant hereto and, as credits, each
payment or repayment of principal and interest made in respect of such
indebtedness as well as any other amount paid to such Lender pursuant hereto.
These accounts shall constitute (in the absence of manifest error or of
contradictory entries in the Accounts), prima facie evidence of their content
against the Canadian Borrower.
3.5 ACCOUNTS KEPT BY U.S. LENDERS
Each U.S. Lender shall keep in its books, in respect of its
Participation, accounts for the Letters of Credit, Alternate Base Rate Loans,
Libor Loans, and other amounts payable by the U.S. Borrowers under this
Agreement. Each U.S. Lender shall make appropriate entries showing, as debits,
the amount of the indebtedness of the U.S. Borrower towards it in respect of the
Letters of Credit, Alternate Base Rate Loans, Libor Loans, as the case may be,
the amount of all accrued interest and any other amount due to such Lender
pursuant hereto and, as credits, each payment or repayment of principal and
interest made in respect of such indebtedness as well as any other amount paid
to such Lender pursuant hereto. These accounts shall constitute (in the absence
of manifest error or of contradictory entries in the Accounts), prima facie
evidence of their content against the U.S. Borrowers.
3.5A PROMISSORY NOTES
At the request of any Lender, each Borrower under the Facilities
applicable to such Lender shall execute and deliver to such Lender a promissory
note substantially in the form attached hereto as Schedule "Q".
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3.6 EXCESS RESULTING FROM EXCHANGE RATE CHANGE
Any time that, following one or more fluctuations in the exchange rate
of the Cdn. Dollar against the U.S. Dollar, the sum of:
(a) the Borrowings in Cdn. Dollars under the Canadian Facilities;
and
(b) the Equivalent Amount in Canadian Dollars of the Borrowings in
U.S. Dollars under the Canadian Facilities;
exceeds the Total Commitments under the Canadian Facilities then in
effect, the Canadian Borrower shall, within 10 days thereafter, either:
(c) make the necessary payments or repayments to the Canadian
Administrative Agent to reduce such sum to an amount equal to
or less than the Total Commitments under the Canadian
Facilities then in effect; or
(d) maintain or cause to be maintained with the Canadian
Administrative Agent deposits of U.S. Dollars in an amount
equal to or greater than the amount by which such sum exceeds
the Total Commitments under the Canadian Facilities then in
effect, such deposits to be maintained in such form and upon
such terms as are acceptable to the Canadian Administrative
Agent. Until such time as such sum shall no longer exceed the
Total Commitments under the Canadian Facilities, the Canadian
Administrative Agent shall invest the deposits, in such manner
and form of investment as shall be mutually acceptable to the
Canadian Borrower and the Canadian Administrative Agent, and
income earned thereon shall be received by the Canadian
Administrative Agent for the Canadian Borrower's account and
paid to the Canadian Borrower. Without in any way limiting the
foregoing provisions, the Canadian Administrative Agent shall,
on each Acceptance Date, Drawdown Date, Interest Date and B/A
Maturity Date make the necessary exchange rate calculations to
determine whether any such excess exists on such date and, if
there is an excess, it shall so notify the Canadian Borrower.
3.7 CURRENCY
Borrowings and payments in respect thereof are payable in the currency
in which they are denominated.
3.8 EXTENSION OF FINAL MATURITY DATE
(a) June 1, 2000 or, if such date shall be extended as provided
herein, any subsequent June 1 following any extension provided
herein, shall be an "Extension Date". Subject to the terms of
this Agreement, not earlier than 90 days but not later than
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60 days prior to the next pending Extension Date, the
Borrowers collectively may request, in writing to the Canadian
Administrative Agent and the U.S. Administrative Agent, an
extension of the Final Maturity Date for all but not less than
all Facilities to a date which is one year after the Final
Maturity Date then in effect (an "Extension Request").
(b) Upon receipt of an Extension Request, the Canadian
Administrative Agent shall advise the Canadian Lenders and the
U.S. Administrative Agent shall advise the U.S. Lenders of
such Extension Request and each Lender shall advise their
respective Agent within 30 days of receipt thereof whether
such Lender consents to the Extension Request.
(c) Unless the Majority Lenders agree to any Extension Request the
Final Maturity Date shall not be extended by any Lender.
(d) In the event that either the Majority Lenders have not agreed
to an Extension Request or the Borrowers do not provide the
Canadian Administrative Agent and the U.S. Administrative
Agent with an Extension Request as provided in Section 3.8(a),
the next pending Extension Date shall become a "Non-Extension
Conversion Date" and the Lenders' Commitments under the
Acquisition Facilities will convert to four-year reducing
revolving facilities and the Acquisition Facilities and
Revolving Facilities shall be reduced and/or repaid, as
follows:
(i) on or before the first anniversary of the
Non-Extension Conversion Date, the amount necessary
to reduce (A) the Canadian Lenders' Commitments with
respect to the Canadian Acquisition Facility by Cdn
$5,000,000 and the Commitments of the Canadian
Lenders with respect to the Canadian Acquisition
Facility shall be reduced by Cdn $5,000,000; and (B)
the amount necessary to reduce the U.S. Lenders
Commitments with respect to the U.S. Acquisition
Facility by U.S. $13,000,000; and the Commitments of
the U.S. Lenders with respect to the U.S. Acquisition
Facility shall be reduced by U.S. $13,000,000.
(ii) on or before the second anniversary of the
Non-Extension Conversion Date, the amount necessary
to reduce (A) the Canadian Lenders' Commitments with
respect to the Canadian Acquisition Facility by Cdn
$12,500,000; and the Commitments of the Canadian
Lenders with respect to the Canadian Acquisition
Facility shall be reduced by Cdn $12,500,000; and
(B) the amount necessary to reduce the U.S. Lenders
Commitments with respect to the U.S. Acquisition
Facility by U.S. $32,500,000; and the Commitments of
the U.S. Lenders with respect to the U.S. Acquisition
Facility shall be reduced by U.S. $32,500,000.
- 42 -
(iii) on or before the third anniversary of the
Non-Extension Conversion Date, the amount necessary
to reduce (A) the Canadian Lenders' Commitments with
respect to the Canadian Acquisition Facility by Cdn
$12,500,000; and the Commitments of the Canadian
Lenders with respect to the Canadian Acquisition
Facility shall be reduced by Cdn $12,500,000; and (B)
the amount necessary to reduce the U.S. Lenders
Commitments with respect to the U.S. Acquisition
Facility by U.S. $32,500,000; and the Commitments of
the U.S. Lenders with respect to the U.S. Acquisition
Facility shall be reduced by U.S. $32,500,000.;
(iv) on or before the fourth anniversary of the
Non-Extension Conversion Date, the amount necessary
to reduce the Lenders' Commitments under the
Acquisition Facilities and the Revolving Facilities
to zero; and the Commitments of the Lenders with
respect to the Acquisition Facilities and the
Revolving Facilities shall be cancelled.
(e) If the Majority Lenders have consented to an Extension Request
but one or more Lenders (each a "Non-Consenting Lender") do
not consent to the Extension Request, the Canadian
Administrative Agent shall so advise the Canadian Borrower and
the U.S. Administrative Agent shall so advise the U.S.
Borrowers and the Canadian Borrower, with respect to a
Non-Consenting Lender which is a Canadian Lender, or the U.S.
Borrowers with respect to a Non-Consenting Lender which is a
U.S. Lender, as the case may be, may (i) elect to have one or
more Lenders assume all or a ratable portion of the
Commitments of such Non-Consenting Lender, or (ii) prepay the
portion of Facilities outstanding to Non-Consenting Lenders
and accordingly the Commitments of such Non-Consenting Lenders
shall be cancelled or (iii) the Extension Date shall become a
"Non-Extending Lenders Conversion Date", and the
Non-Extending Lenders' Commitments under the Acquisition
Facilities shall convert to four-year reducing revolving
facilities and the Non-Extending Lenders' Commitments shall be
reduced and/or repaid as follows:
(A) on or before the first anniversary of the
Non-Extending Lenders Conversion Date, the amount
necessary to reduce the Non-Consenting Lenders'
Commitments to the extent of such Non-Consenting
Lenders' Participations in Cdn $5,000,000 in the case
of the Canadian Lenders and U.S. $13,000,000 in the
case of the U.S. Lenders of the Acquisition
Facilities (the "Year 1 Repayment"); and the
Commitments of such Non-Consenting Lenders with
respect to the Acquisition Facilities shall be
reduced by the Year 1 Repayment;
(B) on or before the second anniversary of the
Non-Extending Lenders Conversion Date, the amount
necessary to reduce the Non-Consenting
- 43 -
Lenders' Commitments to the extent of such
Non-Consenting Lenders' Participations in Cdn
$12,500,000 in the case of the Canadian Lenders and
U.S. $32,500,000 in the case of the U.S. Lenders of
the Acquisition Facilities (the "Year 2 Repayment");
and the Commitments of such Non-Consenting Lenders
with respect to the Acquisition Facilities shall be
reduced by the Year 2 Repayment;
(C) on or before the third anniversary of the
Non-Extending Lenders Conversion Date, the amount
necessary to reduce the Non-Consenting Lenders'
Commitments with respect to such Non-Consenting
Lenders' Participations in Cdn $12,500,000 in the
case of the Canadian Lenders and U.S. $32,500,000 in
the case of the U.S. Lenders of the Acquisition
Facilities (the "Year 3 Repayment") and the
Commitments of such Non-Consenting Lenders with
respect to the Acquisition Facilities shall be
reduced by the Year 3 Repayment; and
(D) on or before the fourth anniversary of the
Non-Extending Lenders Conversion Date, the amount
necessary to reduce the Non-Consenting Lenders'
Commitments to zero and the Commitments of such
Non-Consenting Lenders with respect to the
Acquisition Facilities and the Revolving Facilities
shall be cancelled.
ARTICLE IV
INTEREST AND ACCEPTANCE FEE
4.1 INTEREST ON LIBOR LOANS
(a) The U.S. Borrowers shall pay, on each applicable Interest
Date, to the U.S. Administrative Agent for the account of the
U.S. Lenders interest on each Libor Loan in U.S. Dollars drawn
down by the U.S. Borrowers for each Libor Interest Period at
that rate per annum determined by the U.S. Administrative
Agent to be equal to the sum of the applicable Libor Margin
plus LIBOR. Each determination by the U.S. Administrative
Agent of the rate of interest applicable to a Libor Interest
Period shall, in the absence of manifest error, be final,
conclusive and binding upon the U.S. Borrowers and the U.S.
Lenders. Upon determination of the rate of interest applicable
on the Libor Determination Date, the U.S. Administrative Agent
shall notify the U.S. Borrowers and the U.S. Lenders of such
rate. Such interest shall be calculated daily on the basis of
the actual number of days elapsed divided by 360.
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(b) The Canadian Borrowers shall pay, on each applicable Interest
Date, to the Canadian Administrative Agent for the account of
the Canadian Lenders interest on each Libor Loan in U.S.
Dollars drawn down by the Canadian Borrowers for each Libor
Interest Period at that rate per annum determined by the
Canadian Administrative Agent to be equal to the sum of the
applicable Libor Margin plus LIBOR. Each determination by the
Canadian Administrative Agent of the rate of interest
applicable to a Libor Interest Period shall, in the absence of
manifest error, be final, conclusive and binding upon the
Canadian Borrowers and the Canadian Lenders. Upon
determination of the rate of interest applicable on the Libor
Determination Date, the Canadian Administrative Agent shall
notify the Canadian Borrowers and the Canadian Lenders of such
rate. Such interest shall be calculated daily on the basis of
the actual number of days elapsed divided by 360.
(c) The yearly rate of interest to which the rate determined in
accordance with the foregoing provisions of this Section 4.1
is equivalent, is the rate so determined multiplied by the
actual number of days in that year and divided by 360.
4.2 INTEREST ON COF LOANS
The Canadian Borrower shall pay, on each applicable Interest Date, to
the Canadian Administrative Agent for each COF Interest Period at that rate per
annum determined by Canadian Administrative Agent to be equal to the sum of the
COF Margin plus the COF Rate. Each determination by the Canadian Administrative
Agent of the rate of interest applicable to a COF Interest Period shall, in the
absence of manifest error, be final, conclusive and binding upon the Canadian
Borrower and the Canadian Lenders. Upon determination of the rate of interest
applicable on the applicable COF Rate Determination Date, the Canadian
Administrative Agent shall notify the Canadian Borrower and the Canadian Lenders
of such rate. Such interest shall be calculated daily on the basis of the actual
days elapsed divided by 365 or 366, as the case may be. The yearly rate of
interest to which the rate determined in accordance with the foregoing
provisions of this Section 4.2 applicable to COF Loans is the rate so determined
multiplied by the actual number of days in that year and divided by 365 or 366,
as the case may be.
4.3 INTEREST ON PRIME LOANS
(a) The Canadian Borrower shall pay the Canadian Administrative
Agent for the account of the Canadian Lenders in Canadian
Dollars interest on each Prime Loan as evidenced by the
Accounts at a rate per annum equal to the sum of (i) the Prime
Margin and (ii) the Prime Rate. Each change in the fluctuating
interest rate
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for a Prime Loan will take place simultaneously with the
corresponding change in the Prime Rate.
(b) This interest is payable quarterly in arrears on each Interest
Date for the period up to and including the last day of the
previous Quarter and shall be calculated daily on the basis of
the actual number of days elapsed in a year of 365 or 366
days, as the case may be.
4.4 INTEREST ON ALTERNATE BASE RATE LOANS
(a) The U.S. Borrowers shall pay to the U.S. Administrative Agent
for the account of the U.S. Lenders in U.S. Dollars, interest
on each Alternate Base Rate Loan as evidenced by the Accounts
at a rate per annum equal to the sum of:
(i) the Alternate Base Rate Margin; and
(ii) the Alternate Base Rate.
Each change in the fluctuating rate for an Alternate Base Rate
Loan will take place simultaneously with a corresponding
change in the Alternate Base Rate.
(b) The Canadian Borrower shall pay to the Canadian Administrative
Agent for the account of the Canadian Lenders in U.S. Dollars,
interest on each Alternate Base Rate Loan as evidenced by the
Accounts at a rate per annum equal to the sum of:
(i) the Alternate Base Rate Margin; and
(ii) the Alternate Base Rate.
Each change in the fluctuating rate for an Alternate Base Rate
Loan will take place simultaneously with a corresponding
change in the Alternate Base Rate.
(c) The yearly rate of interest to which the rate determined in
accordance with the foregoing provisions of this Section 4.4
is equivalent, is the rate so determined multiplied by the
actual number of days in that year and divided by 360.
(d) This interest is payable quarterly in arrears on each Interest
Date for the period up to and including the last day of the
previous Quarter and shall be calculated daily on the basis of
the number of days elapsed divided by 360.
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4.5 LIBOR INTEREST PERIODS OR COF INTEREST PERIODS
If a U.S. Borrower or the Canadian Borrower is borrowing by way of a
Libor Loan or the Canadian Borrower is borrowing by way of a COF Loan or if a
U.S. Borrower elects to convert into a Libor Loan pursuant to Section 2.3, the
applicable Borrower shall, prior to the expiration or beginning of each Libor
Interest Period or COF Interest Period, as applicable, select and notify the
Canadian Administrative Agent and/or the U.S. Administrative Agent, as the case
may be, at least 3 Business Days prior to:
(a) the last day of the current Libor Interest Period for such
Libor Loan;
(b) the last date of the current COF Interest Period for such COF
Loan; or
(c) the Conversion Date, as the case may be, of the next or new,
as the case may be, Libor Interest Period applicable to such
Libor Loan, or COF Interest Period applicable to such COF
Loan, which new Libor Interest Period or COF Interest Period,
as applicable, shall commence on and include the day following
the expiration of the prior Libor Interest Period or COF
Interest Period, as applicable. If a Borrower fails to select
and to notify the Canadian Administrative Agent or the U.S.
Administrative Agent, as the case may be, of the Libor
Interest Period applicable to a Libor Loan or COF Interest
Period applicable to such COF Loan, such Borrower shall be
deemed to have selected a Libor Interest Period, or a COF
Interest Period, of one month or 30 days, as the case may be.
In any event, no Libor Interest Period or COF Interest Period shall end on a
date falling after the Final Maturity Date. The Borrowers shall ensure, when
selecting an Interest Period, that no Libor Loan or COF Loan shall be required
to be prepaid in order for the Borrowers to perform their obligations under
Section 3.1.
4.6 INTEREST ON OVERDUE AMOUNTS
The Canadian Borrower shall pay to the Canadian Administrative Agent
for the account of the Canadian Lenders and the U.S. Borrowers shall pay to the
U.S. Administrative Agent for the account of the U.S. Lenders, on demand,
interest on all overdue payments in connection with this Agreement, at a rate
per annum which is equal to 2% per annum in excess of (a) the applicable rates
of interest (inclusive of Libor Margin or COF Margin) payable under Section 4.1
in the case of payments of principal or interest on Libor Loans or Section 4.2
in the case of payments of principal and interest on COF Loans or (b) the
applicable rates of interest (inclusive of Prime Margin or Alternate Base Rate
Margin) payable under Sections 4.3 or 4.4 in the case of any other payments in
Cdn.$ or U.S.$, as applicable.
- 47 -
4.7 ACCEPTANCE FEE
An Acceptance Fee shall be:
(a) payable by the Canadian Borrower to the Canadian
Administrative Agent for distribution to the Canadian Lenders
on the Acceptance Date for each Bankers' Acceptance issued;
and
(b) calculated on the Principal Amount of each Bankers' Acceptance
for the number of days in the term of such Bankers' Acceptance
and based on a year of 365 days.
4.8 PRICING PERIODS
Notwithstanding any other provision of this Agreement, in the event
that a Pricing Period comes into effect which would require a downward
adjustment to the rates applicable to any Borrowings outstanding by way of
Bankers' Acceptances, Letters of Credit, COF Loans and/or LIBOR Loans such rates
shall not be adjusted downward prior to:
(a) in the case of Bankers' Acceptances, the applicable B/A
Maturity Date;
(b) in the case of Letters of Credit, the applicable expiry date;
(c) in the case of Libor Loans, the end of the applicable Libor
Interest Period; and
(d) in the case of COF Loans, the end of the applicable COF
Interest Period.
and in any event no rates shall be adjusted downward until such time as the
Canadian Borrower notifies the Canadian Administrative Agent and a U.S. Borrower
notifies the U.S. Administrative Agent in writing that a Pricing Period which
would require a downward adjustment to the applicable rates has come into
effect.
ARTICLE V
CONDITIONS PRECEDENT
5.1 CONDITIONS PRECEDENT
The Lenders' and Issuing Banks' obligations to make available any
Borrowings under the Facilities on any Drawdown Date or Acceptance Date (other
than in respect of a Conversion pursuant to Section 2.3) or date of issuance of
a Letter of Credit is subject to and conditional upon the satisfaction of each
of the following conditions:
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(a) The Canadian Administrative Agent and the U.S. Administrative
Agent, as the case may be, shall have received a notice of the
requested Borrowing or Conversion in accordance with Section
2.2 or 2.3, as applicable, and with respect to Letters of
Credit, the Issuing Bank shall have received an application
therefor and any other documents it may require, all in form
and substance satisfactory to such Issuing Bank.
(b) on each Drawdown Date or Acceptance Date or date of issuance
of a Letter of Credit:
(i) there shall exist no Event of Default and no
condition, event or act which, with the giving of
notice or lapse of time, or both, would constitute an
Event of Default and the Collateral Agent shall have
received a certificate (without personal liability)
from the applicable Borrower's president, chief
financial officer or treasurer to such effect,
substantially as in Schedule "J"; and
(ii) the representations and warranties set out in Section
8.1 would, if made on such date, be true and accurate
in all material respects on each such Drawdown Date
or Acceptance Date or date of issuance of a Letter of
Credit;
(c) the Collateral Agent has received, in sufficient quantities to
provide 1 copy to each Lender, on or prior to the first
Drawdown Date or Acceptance Date or date of issuance of a
Letter of Credit and in form and substance satisfactory to the
Collateral Agent and Lenders' Counsel and in the case of
clause (iv) of this paragraph (c), in form and substance
satisfactory to the U.S. Lender referred to therein:
(i) this Agreement duly executed by the Borrowers, the
Unlimited Guarantors, the Lead Arranger, the
Co-Arrangers, the Managers, the Lenders, the Canadian
Administrative Agent, the U.S. Administrative Agent
and the Collateral Agent;
(ii) certified copies of the articles and certificate of
incorporation of each of the Borrowers and the
Unlimited Guarantors, their respective borrowing
by-laws, if any, and resolutions of their respective
boards of directors authorizing the execution,
delivery and performance of this Agreement and the
Security by them respectively;
(iii) the certificate (without personal liability) of the
president, the chief financial officer or treasurer
of each of the Borrowers and the Unlimited Guarantor
confirming, in all material respects, the veracity of
the
- 49 -
representations and warranties set out in Section
8.1, substantially as set out in Schedule "J"
supplemented by all such certificates as Lenders'
Counsel may require;
(iv) promissory note(s) requested by a U.S. Lender; and
(v) incumbency certificates setting forth the signatures
and titles of Authorized Signatories for each
Borrower, certifying their authority to sign this
Agreement and any documents contemplated hereby or
provided in connection herewith.
(d) the Collateral Agent shall have received, on or prior to the
first Drawdown Date or Acceptance Date or date of issuance of
a Letter of Credit, in form and substance acceptable to the
Collateral Agent and Lenders' Counsel, as security for
repayment of all Borrowings, payment of all interest and other
amounts due hereunder and the performance of all other
obligations of the Borrowers under this Agreement, all
Security required to be delivered as of the Effective Date;
(e) on or prior to the initial Drawdown Date or Acceptance Date or
date of issuance of a Letter of Credit:
(i) the Collateral Agent shall have received the opinions
in form and substance satisfactory to the Collateral
Agent, the Lenders and the Lenders' Counsel of each
of Borrowers' Canadian Counsel, Borrowers' U.S.
Counsel, and counsel to the Borrowers or its or their
applicable Subsidiaries in British Columbia, Alberta,
New York, Florida, Massachusetts, Illinois and
Pennsylvania, each addressed to the Canadian
Administrative Agent, the U.S. Administrative Agent,
the Collateral Agent, the Lenders and Lenders'
Counsel;
(ii) the Collateral Agent shall have received opinions of
Lenders' Counsel addressed to the Canadian
Administrative Agent, the U.S. Administrative Agent,
the Collateral Agent and Lenders in form and
substance satisfactory to the Collateral Agent, the
Lenders and Lenders' Counsel;
(iii) all registrations and filings in respect of the
Security shall have been made to the satisfaction of
Lenders' Counsel in such jurisdictions as Lenders'
Counsel shall determine to be necessary or
appropriate;
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(iv) there shall not have occurred any event, act or thing
which would have a material adverse effect on the
business, operations or properties of the Borrowers
or any Guarantor or the rights and Security of the
Lenders or on the ability of any Borrower or any
Guarantor to perform all its obligations under this
Agreement or any Security;
(v) the Collateral Agent shall have received and be
satisfied with the insurance policies of the
Borrowers and the Guarantors and the terms and extent
of coverage thereunder (such policies to include,
without limitation, the standard mortgagee clause);
(vi) the Lenders shall have received and be satisfied with
a list disclosing all of the Borrowers' Subsidiaries
in existence on the initial Acceptance Date or
Drawdown Date or date of issuance of a Letter of
Credit, and shall have completed and be satisfied
with the results of their due diligence review of the
Borrowers and the Guarantors including review of
audited and unaudited intercompany debt arrangements,
the Shareholders' Agreements, call options,
non-competition agreements with key management
personnel, compliance with environmental regulations,
leases and outstanding material litigation;
(vii) the Collateral Agent, the Canadian Administrative
Agent, the U.S. Administrative Agent, the Lead
Arranger, the Co-Arrangers, the Managers and Lenders'
Counsel shall have received payment of all fees or
other amounts then due and payable to them in
connection with this Agreement; and
(viii) the Collateral Agent shall have received a list
disclosing, in sufficient detail, all Material
Contingent Obligations of the Borrowers and any of
their Subsidiaries.
5.2 CONDITIONS PRECEDENT TO BORROWINGS UNDER THE ACQUISITION FACILITIES
The Lenders' obligations to make available any Borrowings under the
Acquisition Facilities on any Drawdown Date or Acceptance Date (other than in
respect of a Conversion pursuant to Section 2.3) are subject to and conditional
upon the satisfaction of each of the following conditions (in addition to the
conditions set out in Section 5.1):
(a) at least 10 Business Days' prior to such Drawdown Date or
Acceptance Date the Canadian Administrative Agent or the U.S.
Administrative Agent, as the case may be, shall have received:
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(i) a certificate from the Canadian Borrower's president,
chief financial officer or treasurer, substantially
as in Schedule "N", to the following effect:
(A) the proposed Borrowing shall be used to
assist a Borrower in financing the
acquisition of an Eligible Business;
(B) in the opinion of the Canadian Borrower or,
where the Canadian Borrower has identified
the existence of potentially Hazardous
Materials, a third party environmental
consultant engaged by the Canadian Borrower
of experience and reputation reasonably
satisfactory to such Agent certifying that
such Eligible Business has been and can
continue to be conducted in compliance with
any applicable Environmental Laws and that
no material adverse change in the earnings
of the applicable Acquisition Entity or the
Canadian Borrower shall result therefrom;
(C) that following completion of such
acquisition the Maximum Acquisition Total
Debt/Adjusted EBITDA Ratio of the Canadian
Borrower shall not exceed the Maximum Total
Debt/Adjusted EBITDA Ratio; and
(D) the proposed Borrowing is within the amount
available to be drawn down under the
Commitments in relation to the applicable
Acquisition Facility (the "Available
Acquisition Amount"), such Available
Acquisition Amount to be calculated in
accordance with Schedule "O"; and
(ii) (A) in the case where the Canadian Borrower has
engaged a third party environmental
consultant, a copy of such third party
consultant's environmental report and
opinion; and
(B) pro forma financial projections supporting
the statement in (i) (C) above; and
(C) a copy of Schedule "O" setting out the
calculation of the Available Acquisition
Amount; and
(b) in the case where the Maximum Acquisition Total Debt/Adjusted
EBITDA Ratio is equal to or greater than 3.25 to 1, the
Canadian Borrower and the Majority Lenders, acting reasonably,
shall be satisfied that there shall not then exist and shall
not occur, following completion of the acquisition, a material
adverse
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change in the financial condition of the Canadian Borrower and
its Subsidiaries, taken as a whole.
5.3 WAIVER
The terms and conditions of Sections 5.1 and 5.2 are inserted for the
sole benefit of the Lenders. The Lenders may, in writing only, waive the terms
and conditions of Section 5.1 and the Majority Lenders may, in writing only,
waive the terms and conditions of Section 5.2 (other than Section 5.2 (a)(i)(D)
which shall only be waived with the consent of all Lenders in writing) in each
case in whole or in part and with or without terms or conditions in respect of
any Borrowing, without prejudicing the Lenders' rights to assert them in whole
or in part in respect of any other Borrowing.
5.4 HOSTILE TAKEOVER
Notwithstanding any other provision of this Agreement, if any portion
of the Facilities are to be used to fund a hostile takeover, any Lender may
refuse to fund its Participation with respect to such hostile takeover if the
Lender reasonably determines, by providing such funding, that it may be placed
in a conflict of interest.
ARTICLE VI
PREPAYMENT, CANCELLATION, MANDATORY
APPLICATION OF CASH PROCEEDS
6.1 PREPAYMENT AND CANCELLATION
(a) The Borrowers may at any time prepay, in whole or in part,
Borrowings outstanding under the Facilities and thereby reduce
or cancel, as the case may be, corresponding Commitments by
the amount of such prepayment upon giving the Canadian
Administrative Agent and/or the U.S. Administrative Agent, as
the case may be, at least 3 Business Days' prior written
notice, in the case of the Canadian Facilities, in minimum
amounts of Cdn.$10,000,000 and multiples of Cdn. $1,000,000
thereafter (or the Equivalent Amount thereof in U.S.$) and in
the case of the U.S. Facilities, in minimum amounts of U.S.
$10,000,000 and multiples of U.S. $1,000,000 thereafter. Any
such prepayment of Borrowings outstanding under the Facilities
shall be applied against reductions of Commitments and related
repayment instalments required to be made under Section 3.8,
as applicable, in inverse order of maturity.
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For greater certainty repayments made under a Revolving Facility or an
Acquisition Facility pursuant to Section 2.2 and repayments made under an
Acquisition Facility under Section 6.5 do not constitute prepayments under this
Section 6.1.
(b) The Borrowers may, at any time, reduce or cancel any unused
portion of the Commitments, provided that to the extent any
such reduction shall cause any Borrowings outstanding to
exceed the Commitments so reduced or cancelled such Borrowers
shall prepay any such excess in accordance with paragraph (a)
above.
(c) Any prepayment and reduction or cancellation relating to
Bankers' Acceptances, COF Loans or Libor Loans shall be made
subject to the Borrowers' obligations under Section 7.4.
(d) Any such prepayment and reduction shall reduce the Commitments
of the Lenders pro rata according to their respective
Participations.
6.2 NOTICE
Each notice of prepayment and reduction or cancellation given pursuant
to this Article shall be irrevocable, and shall specify the date upon which such
prepayment and reduction or cancellation is to be made. A Borrower may not
thereafter give a notice of prepayment and reduction or cancellation of such
part of the Facilities for a date other than the date so specified in any
previous such notice.
6.3 STATUS OF LENDER
If, at any time:
(a) the Commitment of any Lender is, in accordance with the terms
of this Agreement, permanently reduced to zero;
(b) all indebtedness owed to such Lender by the Borrowers
hereunder or in connection herewith or under any Hedging
Agreements has been finally and indefeasibly satisfied in
full; and
(c) such Lender is under no further actual or contingent
obligation hereunder;
then such Lender shall cease to be a party hereto and a Lender for the purposes
hereof; provided however that all indemnities and provisions of this Agreement
for the benefit of such Lender shall survive termination for the benefit of such
Lender.
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6.4 FEES
Upon cancellation of the Facilities in accordance with this Article VI,
all accrued and unpaid fees for the Facilities as provided in Section 12.1
hereof shall be paid in full on and to such cancellation date.
6.5 MANDATORY APPLICATION OF CASH PROCEEDS
Each Borrower shall apply, in permanent reduction of availability under
the applicable Acquisition Facility, 100% of the net cash proceeds which are
derived from the sale or disposition of assets by it or any of its Subsidiaries,
other than in the ordinary course of business, towards repayment of the
Principal Amount of Borrowings outstanding from time to time under the
Acquisition Facilities, except to the extent that such net proceeds are
reinvested, within 12 months of receipt thereof, in the businesses of the
Borrowers and their Subsidiaries and except to the extent that such net proceeds
are less than Cdn.$5,000,000 in the aggregate.
ARTICLE VII
SPECIAL LIBOR, COF AND INCREASED COST PROVISIONS
7.1 SUBSTITUTE RATE OF BORROWING
If, on any Libor Determination Date or COF Rate Determination Date
during the term of this Agreement, any Reference Bank, reasonably determines
(which determination is final, conclusive and binding upon the Borrowers and the
Lenders) and advises the Canadian Administrative Agent or the U.S.
Administrative Agent, as the case may be, that:
(a) adequate and fair means do not exist for ascertaining the rate
of interest on a Libor Loan or a COF Loan,
(b) the making or the continuing of a loan bearing interest
substantially similar to a Libor Loan or a COF Loan by such
Reference Bank has become impracticable by reason of
circumstances which materially and adversely affect, in the
case of a Libor Loan, the London interbank market or, in the
case of a COF Loan, the Canadian or United States, as the case
may be, financial market, or
(c) deposits in U.S. Dollars are not available to such Reference
Bank, in the case of a Libor Loan, in the London interbank
market or, in the case of a COF Loan, the Canadian or United
States, as the case may be, financial market, in sufficient
amounts in the ordinary course of business for the applicable
Interest Period to make, fund or maintain a loan bearing
interest substantially similar to a Libor Loan or a COF Loan
during such Interest Period,
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then, the Canadian Administrative Agent or the U.S. Administrative Agent, as the
case may be, shall promptly notify the applicable Borrower in writing and such
Borrower shall (if so notified), promptly and, in any event, no later than by
close of business on the day it receives such notification, advise such Agent of
the Type into which the Borrower wishes to convert such Libor Loan or COF Loan,
as applicable. Should a Borrower fail to advise such Agent, the Borrower shall
be deemed to have given such Agent notice to convert (a) any such Libor Loan or
COF Loan to the Canadian Borrower denominated in U.S.$, into an Alternate Base
Rate Loan, and any such Libor Loan or COF Loan, as applicable, will be deemed to
be an Alternate Base Rate Loan for all purposes under this Agreement, (b) any
such Libor Loan to a U.S. Borrower, into an Alternate Base Rate Loan, and any
such Libor Loan will be deemed to be an Alternate Base Rate Loan for all
purposes under this Agreement and (c) any such COF Loan to the Canadian Borrower
denominated in Cdn.$, into a Prime Loan, and any such COF Loan will be deemed to
be a Prime Loan for all purposes under this Agreement.
With a view to returning to the normal operation of the Facilities, the
Canadian Administrative Agent or the U.S. Administrative Agent, as the case may
be, shall, after having consulted with the applicable Borrowers, the Lenders and
the Reference Banks, examine the situation at least weekly to determine if the
circumstances described in Section 7.1 (a), (b) or (c) still prevail.
7.2 INCREASED COST
If the introduction of, or any change in, applicable law, regulation,
treaty or official directive or regulatory requirement now or hereafter in
effect (whether or not having the force of law) or in the interpretation or
application thereof by any court or by any judicial or governmental authority
charged with the interpretation or administration thereof, or if compliance by a
Lender with any request from any central bank or other fiscal, monetary or other
regulatory authority (other than a change in the relative credit rating or
borrowing ability of a Lender) (whether or not having the force of law):
(a) subjects any Lender to any Tax, or changes the basis of
taxation of payments due to such Lender or increases any
existing Tax, on payments of principal, interest or other
amounts payable by a Borrower to such Lender under this
Agreement (in each case, except for Taxes on the net income or
capital of such Lender),
(b) imposes, modifies or deems applicable any reserve, special
deposit, regulatory, capital or similar requirement against
assets held by or deposits in or for the account of, or loans
bearing interest at a rate fixed on the basis of the London
interbank market rates by, or any other acquisition of funds
for loans bearing interest at a rate fixed on the basis of the
London interbank market rates or any commitments or
authorizations in respect thereof by any Lender or an office
of any Lender, or
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(c) imposes on any Lender any other condition with respect to this
Agreement (except for Taxes on the net income or capital of
such Lender),
and the result of Sections 7.2 (a), (b) or (c) is to increase the cost to any
Lender or to reduce the income receivable by such Lender in respect of a Libor
Loan or COF Loan by any amount, the applicable Borrower shall pay to the
Canadian Administrative Agent or the U.S. Administrative Agent, as the case may
be, for the account of any such Lender, that amount which compensates such
Lender for such additional cost or reduction in income ("Additional
Compensation") arising and calculated as and from a date which shall not be
earlier than the 30th day preceding the date the applicable Borrower receives
the notice referred to in the following sentence. Upon any Lender having
determined that it is entitled to Additional Compensation, it shall promptly
notify the Canadian Administrative Agent or the U.S. Administrative Agent, as
the case may be, and such Agent shall promptly notify the applicable Borrower. A
certificate by any manager of such Lender setting forth the amount of the
Additional Compensation and the basis for it shall be submitted by such Lender
to such Agent and forwarded by such Agent, to the applicable Borrower and,
absent manifest error, shall be prima facie evidence of the amount of the
Additional Compensation and the applicable Agent shall debit, from the
applicable Borrower's accounts, the amount stipulated as Additional Compensation
in such certificate in accordance with Section 10.8.
If an Agent notifies a Borrower pursuant to this Section 7.2, such
Borrower shall have the right, upon written irrevocable notice to that effect
delivered to such Agent at least 10 Business Days prior to the end of such
Interest Period, to repay or convert such Lender's Participation in any such
Libor Loan or COF Loan in full, together with payment of accrued interest and
the Additional Compensation to the date of payment, to COF Loans which do not
suffer the same defect or Alternate Base Rate Loans, as the case may be,
denominated in U.S.$.
7.3 ILLEGALITY
If the introduction of, or any change in, applicable law, regulation,
treaty or official directive, or regulatory requirement (whether or not having
the force of law) or in the interpretation or application thereof by any court
or by any governmental authority charged with the administration thereof, makes
it unlawful, or prohibited for any Lender to make, to fund or to maintain Libor
Loans, such Lender may, by written notice to the Canadian Administrative Agent
or the U.S. Administrative Agent, which notice shall be promptly communicated by
such Agent to the applicable Borrower terminate its obligations to make, to fund
or to maintain Libor Loans and the applicable Borrower shall prepay or convert
such Lender's Participation in the Libor Loans forthwith (or at the end of any
applicable Interest Period as such Lender in its discretion agrees) together
with payment of all additional amounts as may be applicable to the date of
payment, to COF Loans which do not suffer the same defect or Alternate Base Rate
Loans, as the case may be, denominated in U.S.$.
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7.4 INDEMNITY
If a Borrower prepays or converts, whether pursuant to Section 6.1,
7.2, 7.3 or 7.5 or otherwise repays pursuant to Section 6.5, a Libor Loan or a
COF Loan on a day other than the last day of an Interest Period, such Borrower
shall indemnify the Lenders for any loss, cost or expense (except that in the
case of prepayment or conversion pursuant to Section 7.3, such loss, cost or
expense shall be restricted to actual costs incurred by the Lenders) incurred in
maintaining or redeploying deposits obtained by the Lenders to fund such Libor
Loan or COF Loan, as applicable. The provisions of Section 11.1(d) shall apply
to such indemnification mutatis mutandis.
7.5 OTHER INCREASED COSTS OR REDUCTIONS IN RETURN
(a) If, with respect to any accommodation of any kind or nature
provided by the Lenders under this Agreement, whether by way
of Bankers' Acceptances or otherwise (each accommodation being
in this Section 7.5 referred to as an "Accommodation") and as
a result of the introduction of or any change in any law,
regulation, rule or order or in its interpretation or
administration or by reason of any compliance with any
guideline, request or requirement from any fiscal, monetary or
other authority (other than a change in the relative credit
rating or borrowing ability of a Lender with respect to such
Accommodation) (whether or not having the force of law) which
it is customary for a bank or other lending institutions to
comply with in respect of all its loans or facilities of
similar type in Canada or the U.S. as the case may be, in
relation to Facilities made available to the Borrowers:
(i) any Lender incurs a cost (which it would not
otherwise have incurred) or becomes liable to make a
payment (calculated with reference to the Borrowings
outstanding under an Accommodation) with respect to
continuing to provide or maintain an Accommodation
(other than Taxes imposed on the net income or
capital of such Lender);
(ii) any reserve, special deposit or similar requirement
is imposed or increased with respect to an
Accommodation increasing the cost thereof to any
Lender; or
(iii) any Lender suffers a reduction in its effective
return on the date hereof, on the transactions
contemplated under this Agreement (as determined by
such Lender after taking into account any reduction
in the rate of return (before Tax) on its overall
capital arising as a consequence of compliance with
any such guideline, request or requirement as
aforesaid);
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then the Borrowers shall, subject to the terms and conditions
hereof, pay to such Lender such amount (the "Additional Other
Compensation") as will compensate the Lender for and will
indemnify the Lender against such increase in costs or
reduction of rate of return with respect to the Facilities
(arising and calculated as and from a date which shall not be
earlier than the 30th day preceding the date a Borrower
receives notice from the Canadian Administrative Agent or the
U.S. Administrative Agent, as the case may be, pursuant to
Section 7.5 (b) below).
(b) The Lender shall, forthwith, after incurring a cost as set out
in Section 7.5 (a)(i), suffering an increase in cost as set
out in Section 7.5 (a) (ii) or suffering a reduction in its
effective return as set out in Section 7.5 (a) (iii) (each
being in this Section referred to as an "Event") entitling the
Lender to the payment of Additional Other Compensation and the
Lender determining to claim such Additional Other
Compensation, shall give notice to the Canadian Administrative
Agent or the U.S. Administrative Agent, as the case may be, of
the Additional Other Compensation claimed with details of the
Event giving rise thereto and the Agent shall promptly provide
a copy of such notice to the applicable Borrower. Such Lender
shall at that time or within 20 days thereafter provide to
such Agent a certificate setting out in reasonable detail a
compilation of the Additional Other Compensation claimed (and
where appropriate the Lender's reasonable allocation to a
Facility of Additional Other Compensation with respect to the
aggregate of such similar facilities granted by the Lender
affected by such Event) or, if the Lender is then unable to
determine the Additional Other Compensation or the method of
compilation thereof, an estimate of such Additional Other
Compensation and/or the method or the basis on which the
Lender estimates the calculation will be made which estimate
will be confirmed or adjusted by the aforesaid certificate.
The Agent shall promptly provide a copy of such certificate to
the applicable Borrower. The certificate of the Lender with
respect to the Additional Other Compensation shall , absent
manifest error, constitute prima facie evidence of the amount
payable. The Borrower shall, within 60 days of receipt of such
notice from the Lender, pay to such Agent, for the account of
the Lender, the Additional Other Compensation (or the
estimated Additional Other Compensation) claimed but if the
Additional Other Compensation claimed and paid is greater or
lesser than the Additional Other Compensation as finally
determined, the Lender or the Borrower, as the case may be,
shall pay to the other the amount required to adjust the
payment to the Additional Other Compensation required to be
paid. The obligation to pay such Additional Other Compensation
for subsequent periods will continue, subject as herein
provided, until the earlier of the termination of the
Accommodation affected by the Event referred to in the notice
given by the Lender to the Agent or the lapse or cessation of
the Event giving rise to the Additional Other Compensation.
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(c) Within 120 days of receipt of the above-mentioned notice from
the Agent, the Borrower may notify such Agent that it elects
to repay or cancel, as the case may be, an Accommodation with
respect to which Additional Other Compensation is claimed, or
such Lender's Participation therein, and, if such election to
repay or cancel is made, the Borrower shall 45 days after the
giving of the notice of election to repay or cancel to such
Agent (for distribution to the Lenders or to such Lender, as
the case may be) such Accommodation or Participation, as the
case may be, pay or cancel the same, together with payment of
accrued interest, if any, and the Additional Other
Compensation (or the estimated Additional Other Compensation)
applicable thereto calculated to the date of such repayment or
cancellation. If any such repayment constitutes a prepayment
of Bankers' Acceptances, the Canadian Borrower shall deposit
with the Canadian Administrative Agent (for the benefit of the
Canadian Lenders involved) an amount equal to the face amount
of all Bankers' Acceptances then outstanding which are to be
prepaid (the "Prepaid Bankers' Acceptances"). The Canadian
Administrative Agent shall, upon maturity of the Prepaid
Bankers' Acceptances, apply the sum so deposited against
payment of the Prepaid Bankers' Acceptances and remit to the
Canadian Borrower the interest earned on the sum deposited.
(d) For greater certainty, the costs referred to in Section 7.5(a)
which may be included in Additional Other Compensation shall
not include costs (i) which have already been factored into
the Prime Rate or the Alternate Base Rate, as the case may be
or (ii) which are attributable to staff time and related
administrative costs incurred in the preparation and
submission of compliance reports.
7.6 ADDITIONAL COST IN RESPECT OF TAX
(a) Each payment to be made by a Borrower or an Unlimited
Guarantor hereunder or in connection herewith to any other
party hereto shall be made free and clear of and without
deduction for or on account of Tax (except for Taxes on the
net income or capital of a Lender or Taxes resulting from such
Lender changing its residency for tax purposes) unless a
Borrower or such Unlimited Guarantor is required to make such
a payment subject to the deduction or withholding of Tax, in
which case the sum payable by such Borrower or such Unlimited
Guarantor in respect of which such deduction or withholding is
required to be made shall be increased to the extent necessary
to ensure that, after the making of such deduction or
withholding, such other party hereto receives and retains
(free from any liability in respect of any such deduction or
withholding) a net sum equal to the sum which it would have
received and so retained had no such deduction or withholding
been made or required to be made.
(b) If any Lender or any Agent, on behalf of such Lender or on its
own behalf, is required by law to make any payment on account
of Tax (except for Taxes on the
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overall net income or capital of such Lender or Agent or Taxes
resulting from such Lender or Agent changing its residency for
tax purposes) on or in relation to any sum received or
receivable hereunder by such Lender or such Agent, or any
liability in respect of any such payment is asserted, imposed,
levied or assessed against such Lender or such Agent, the
applicable Borrower and the Unlimited Guarantors, as
applicable will, upon demand of such Lender or Agent, promptly
indemnify such Lender or Agent (as the case may be) against
such payment or liability, together with any interest,
penalties and expenses payable or incurred in connection
therewith. If a Lender or Agent has paid over on account of
Tax (other than Taxes excepted above) an amount paid to such
Lender or Agent by a Borrower or an Unlimited Guarantor
pursuant to the foregoing indemnification and the amount so
paid over is subsequently refunded to such Lender or Agent, in
whole or in part, such Lender shall promptly remit such amount
refunded to such Borrower or Unlimited Guarantor, as the case
may be.
7.7 CLAIMS UNDER SECTION 7.6
A Lender or Agent intending to make a claim pursuant to Section 7.6
shall deliver to the Canadian Administrative Agent or the U.S. Administrative
Agent, as the case may be, reasonably promptly after becoming aware of the
circumstances giving rise to the claim, a certificate to that effect specifying
the event by reason of which it is entitled to make such claim and setting out
in reasonable detail the basis and computation of such claim. Such Agent shall
promptly deliver to the applicable Borrower a copy of such certificate.
7.8 TAX RECEIPTS
If at any time a Borrower is required by law to make any deduction or
withholding from any sum payable by it hereunder or in connection herewith (or
if thereafter there is any change in the rates at which or the manner in which
such deductions or withholdings are calculated) such Borrower shall promptly
notify the Canadian Administrative Agent or the U.S.
Administrative Agent, as the case may be, thereof.
If a Borrower makes any payment hereunder or in connection herewith in
respect of which it is required by law to make any deduction or withholding it
shall pay the full amount to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under applicable law
and shall deliver to such Agent within 30 days after it has made such payment to
the applicable authority:
(a) a receipt issued by such authority; or
(b) other evidence reasonably satisfactory to such Agent
evidencing the payment to such authority of all amounts so
required to be deducted or withheld from such payment.
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7.9 INTERNAL REVENUE SERVICE FORMS
(a) Each U.S. Lender and each of their respective successors and
assigns, shall provide each of the U.S. Borrowers (with copies
to the U.S. Administrative Agent), with (x) Internal Revenue
Service Form 1001, Form 4224 or Form W-9, as appropriate, or
any successor Forms prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a
party which exempts such Lender from United States withholding
tax or certifying that the income receivable by it pursuant to
this Agreement is effectively connected with the conduct of a
trade or business in the United States or certifying that such
Lender is a U.S. Person as defined by Section 7701(a)(30) of
the Code or (y) solely if such Lender is claiming exemption
from United States withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8, or any successor form prescribed by the
Internal Revenue Service, and a certificate representing that
such Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code) of the U.S. Borrower and
is not a controlled foreign corporation related to a U.S.
Borrower (within the meaning of Section 864(d)(4) of the
Code).
(b) For any period with respect to which a U.S. Lender has failed
to provide the U.S. Borrower or the U.S. Administrative Agent
with the appropriate form referred to in Section 7.9(a)
(unless such failure is due to a change in treaty, law or
regulation occurring after the date on which such form
originally was required to be provided), such Lender shall not
be entitled to indemnification under Section 7.6 with respect
to Taxes imposed by the United States; provided that if a
Lender, that is otherwise exempt from or subject to a reduced
rate of withholding tax, becomes subject to Taxes because of
its failure to deliver a form required hereunder, the
applicable Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such
Taxes.
(c) If a Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this Section as a result
of a change in law or treaty occurring after such Lender first
became a party to this Agreement, then such Lender will, at
the Borrower's request, change the jurisdiction of its
applicable lending office if, in the judgment of such Lender,
such change (i) will eliminate or reduce any such additional
payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Lender.
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ARTICLE VIII
REPRESENTATIONS, WARRANTIES & COVENANTS
8.1 REPRESENTATIONS AND WARRANTIES
Each Borrower and each Unlimited Guarantor represents and warrants to
each of the Agents and each of the Lenders as of the date of this Agreement, all
of which representations and warranties shall survive the execution and delivery
of this Agreement, that:
(a) each of the Borrowers and the Guarantors which is a
corporation is duly incorporated, validly existing and in good
standing in all material respects as a corporation under the
laws of its jurisdiction of incorporation and has full
corporate power, authority and capacity to own its properties
and conduct its business and each of the Borrowers and the
Guarantors which are corporations has the full corporate
power, authority and capacity to execute, deliver and perform
its obligations to be performed under, in the case of each
Borrower and each Unlimited Guarantor which are corporations,
this Agreement and under the Security provided or to be
provided by it, and, in the case of each of the other
Guarantors, its guarantee and the Security to be provided by
it;
(b) FSLP is a limited partnership, duly organized and existing
under the laws of the State of Delaware and has full power,
authority and capacity to execute, deliver and perform its
obligations to be performed under this Agreement and under the
Security provided or to be provided by it;
(c) all acts, conditions and things required to be done and
performed by each Borrower, or to have occurred prior to the
execution, delivery and performance, in the case of each
Borrower and each Unlimited Guarantor of this Agreement and
the Security provided or to be provided by it and, in the case
of each of the other Guarantors, its guarantee and the
Security provided or to be provided by it to constitute it a
binding obligation of such party enforceable against it in
accordance with its terms, have been done and performed, and
have occurred in due compliance with all applicable laws;
(d) the execution, delivery and performance, in the case of each
of the Borrowers and each Unlimited Guarantor of this
Agreement and the Security provided or to be provided by it
and, in the case of each of the other Guarantors, its
guarantee and the Security provided or to be provided by it
has been duly authorized by all necessary corporate and other
action and does not:
(i) violate any provision of law or any provision of the
articles of incorporation or other instrument of
formation of such party, or
- 63 -
(ii) result in a breach of, a default under, or the
creation of any Lien (other than those in favour of
the Agents and the Lenders) on the properties and
assets of any Borrower or Guarantor, as the case may
be, under any material agreement or instrument to
which it is a party or by which its properties and
assets may be bound or affected;
(e) this Agreement in the case of the Borrowers and each Unlimited
Guarantor and the Security provided or to be provided by it
and, in the case of each of the other Guarantors, its
guarantee and the Security provided or to be provided by it
constitutes, when executed and delivered, binding, direct
obligations of such party, enforceable in accordance with its
terms, subject to:
(i) applicable bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting
creditors' rights generally and statutes limiting
creditors' rights, including the Personal Property
Security Act (Ontario);
(ii) the equitable and statutory powers of the courts of
appropriate jurisdiction to stay proceedings before
them, to stay the execution of judgments and to award
costs;
(iii) the discretion of such courts as to the granting of
the remedies of specific performance and injunction;
and
(iv) the restriction that Canadian courts can only render
judgments in Canadian currency;
(f) other than as disclosed to the Agents and the Lenders in
writing prior to the date hereof there is no litigation and
there are no legal proceedings pending, or to the best of its
knowledge, threatened against any of the Borrowers or any
Guarantor or any Affiliate of a Borrower or any Guarantor
before any court or administrative agency of any jurisdiction
which is likely to affect materially and adversely the
financial condition, assets or operations of a Borrower or any
Guarantor;
(g) no event has occurred which constitutes or which, with the
giving of notice, the lapse of time or both, would constitute
a default under or in respect of any material agreement,
undertaking or instrument to which any of the Borrowers or any
Guarantor is a party or to which any of their respective
properties or assets may be subject which is likely to affect
materially and adversely, the financial conditions, assets or
operations of a Borrower or any Guarantor;
(h) other than as disclosed to the Agents and the Lenders in
writing prior to the date hereof each of the Borrowers and the
Guarantors is not in violation in any
- 64 -
material respect of any term of their respective incorporating
instruments or by-laws, and, to the best of each Borrower's
and each Unlimited Guarantor's knowledge, none of the
Borrowers and the Guarantors is in violation of any material
mortgage, franchise, license, judgment, decree, order,
statute, rule or regulation which is likely to affect
materially and adversely the financial condition, assets or
operations of a Borrower or any Guarantor;
(i) each Borrower and each Guarantor has filed all tax returns
which were required to be filed, paid all Taxes (including
interest and penalties) which are due and payable by such
Borrower or such Guarantor and provided adequate reserves for
payment of any Tax the payment of which is being contested;
(j) each of the Direct Guarantors is a Wholly-Owned Subsidiary of
the Canadian Borrower, FS (USA) is a Wholly-Owned Subsidiary
of the Canadian Borrower and each of the other Guarantors is a
Subsidiary of the Canadian Borrower or a shareholder of a
Subsidiary thereof;
(k) the Canadian Borrower's shares are owned and controlled as
follows:
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
PRINCIPAL SHAREHOLDERS SHARES OF SHARES OF TOTAL SHARES VESTED PERCENT
MULTIPLE SUBORDINATED OPTIONS TO
VOTING VOTING JANUARY 31,
CAPITAL CAPITAL STOCK 1999
STOCK (1)
----------------------------------------------------------------------------------------------
MANAGEMENT/DIRECTOR %
SHAREHOLDERS
----------------------------------------------------------------------------------------------
Xxx X. Xxxxxxx 662,847 885,081 1,547,928 411,805 10.70
----------------------------------------------------------------------------------------------
D. Xxxxx Xxxxxxxxx 0 203,600 203,600 178,500 1.41
----------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx 0 22,500 22,500 23,500 0.15
----------------------------------------------------------------------------------------------
Xxxx Xxxxxxxxxxxx 0 30,000 30,000 9,000 0.21
----------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 0 227,035 227,035 34,000 1.57
----------------------------------------------------------------------------------------------
Management Options 0 1,637,437 1,637,437 11.32
(55 persons, including
officers named above)
----------------------------------------------------------------------------------------------
Other 10,795,692 10,795,692 74.64
----------------------------------------------------------------------------------------------
TOTAL 662,847 13,801,345 14,464,192 100
---------- ---------- ---------- -----
---------- ---------- ---------- -----
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
(1) Multiple Voting Capital Stock has 20 votes per share
("Ownership and Control");
- 65 -
(l) there exists no Event of Default and no condition, event or
act which, with the giving of notice, lapse of time, or both,
would constitute an Event of Default;
(m) other than as provided under the applicable incorporating or
formation statute of any Borrower or any Guarantor, none of
the Borrowers nor any Guarantor is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment
Company Act of 1940 or to any U.S. or Canadian federal, state
or provincial statute or regulation limiting its ability to
incur indebtedness for money borrowed;
(n) none of the Borrowers nor any Guarantor is by itself, nor is
it by virtue of its being under "common control" with any
other Person within the meaning of Section 414 (b) or (c) of
the Internal Revenue Code of 1986 (the "Code"), an "employer"
within the meaning of Section 3 (5) of the Employee Retirement
Income Security Act of 1974 of the United States of America,
as amended from time to time ("ERISA"), in respect of any
employee pension benefit plan covered by Title IV of ERISA or
subject to the minimum funding standards under the Code;
(o) no part of the proceeds of the Borrowings will be used for any
purpose that violates the provisions of any of Regulation T, U
or X of the Board of Governors of the Federal Reserve System
or any other regulation of such Board of Governors; none of
the Borrowers nor any Guarantor is engaged in the business of
extending credit for the purpose of purchasing or carrying
margin stock within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System; none of the
Borrowers nor any Guarantor owns any such "margin stock";
(p) since September 30, 1998 to the best of its knowledge, there
has been no material adverse change in the business,
operations, properties, prospects or condition (financial or
otherwise) of the Canadian Borrower or its Subsidiaries;
(q) on the basis of a review and assessment undertaken by the
Borrowers of their computer applications, the Borrowers
reasonably believe that the Year 2000 Problem will not result
in a material adverse effect on the business, operations or
properties of the Canadian Borrower or its Subsidiaries.
(r) none of the Borrowers nor any Guarantor has received any
notice, or has any knowledge, that the operations of a
Borrower or any Guarantor are not in compliance in all
material respects with all applicable Environmental Laws; and
(s) each Borrower and all its Subsidiaries have valid title to
their respective assets and, without limitation, own or
possess or are licensed or otherwise have the right to use all
material licenses, permits and other governmental approvals
and
- 66 -
authorizations, patents, trademarks, service marks, trade
names, copyrights, franchises, authorizations and other rights
that are reasonably necessary for the operations of their
respective businesses, without, to the best of the knowledge
of the Borrowers and the Unlimited Guarantors, conflict with
the rights of any other Person with respect thereto.
8.2 COVENANTS
Each Borrower covenants with each of the Agents and with each of the
Lenders that so long as there shall remain any Borrowings or any other
obligations of or affecting any party to this Agreement:
(a) it will pay duly and punctually all sums of money due by it
under this Agreement at the times and places and in the manner
provided for herein and will cause each Guarantor to do
likewise under its Guarantee;
(b) it will maintain, and cause each Guarantor to maintain, its
existence, corporate and otherwise, in good standing;
(c) it will, on a timely basis:
(i) take all necessary and appropriate steps to address
the Year 2000 Problem such that there does not occur
any material adverse effect on the business,
operations or properties of the Borrowers or their
Subsidiaries as a consequence thereof; and
(ii) provide the Canadian Administrative Agent or the U.S.
Administrative Agent, as the case may be, with
disclosure of its measures to deal with the Year 2000
Problem as well as any updates of such measures,
(d) it will not, without the Majority Lenders' prior written
consent (which consent shall not be unreasonably withheld),
sell, transfer or otherwise dispose of its control, direct or
indirect, of any of its Subsidiaries and it will not, nor will
it permit any of its Subsidiaries to, without the Majority
Lenders' prior written consent, sell, lease, assign, transfer,
convey or otherwise dispose of any of its properties or assets
whether now owned or hereafter acquired (including, without
limitation, receivables and leasehold interests, patents and
intellectual property rights) BUT EXCLUDING:
(i) inventory disposed of in the ordinary course of
business;
(ii) property no longer used or useful in its business
provided that the net book value of such property
sold, leased, assigned, transferred, conveyed or
- 67 -
otherwise disposed of shall not exceed Cdn $100,000
per transaction and Cdn. $500,000 in the aggregate in
any Fiscal Year of the Canadian Borrower;
(iii) property which is, substantially contemporaneously
with the disposition thereof, replaced by property
(of substantially the same kind or nature) of at
least equivalent value; and
(iv) entering into sale/leaseback transactions with
respect to property having a net book value of not
more than Cdn. $100,000 per transaction and Cdn.
$500,000 in the aggregate in any Fiscal Year of the
Canadian Borrower; provided, however, that it or any
one or more of its Subsidiaries may, without such
consent, sell, lease, assign, transfer, convey or
otherwise dispose of such control, properties or
assets, so long as:
(A) the aggregate book value of the
Subsidiaries, assets and properties subject
to all such sales, leases, assignments,
transfers, conveyances or other dispositions
by the Borrowers and/or their Subsidiaries
made in any Fiscal Year (or at any time
during such Fiscal Year) without such
consent (other than as permitted under (i),
(ii) or (iii) above) do not exceed
Cdn.$5,000,000 or the Equivalent Amount
thereof in U.S.$ in any Fiscal Year of the
Canadian Borrower;
(B) it gives the Canadian Administrative Agent
or the U.S. Administrative Agent, as the
case may be, prior written notice of each
sale, lease, assignment, transfer,
conveyance or other disposition involving
one or more properties or assets having
either a realization value or a book value
of Cdn.$500,000 or the Equivalent Amount
thereof in U.S.$ or more, and
(C) no Event of Default or any event which, with
notice and/or lapse of time, or both, would
become an Event of Default shall exist after
giving effect to any such sale, lease,
assignment, transfer, conveyance or other
disposition and the application of the
proceeds thereof;
(e) it will carry on diligently and conduct its business in a
proper and efficient manner so as to preserve and protect its
properties, assets and income in a prudent manner consistent
with usual industry practice and the preservation of its
business and assets, and it will cause its Subsidiaries to do
the same in respect of their respective businesses and assets
and, in particular, without limiting the foregoing, it will
not alter its business plan so as to change materially the
nature
- 68 -
or scope of business, operations or activities currently
carried on by it or its Subsidiaries or to shift or
transfer same from a Borrower or any such Subsidiaries to
other of its Subsidiaries, without obtaining the prior
written consent of the Majority Lenders (which consent
shall not be unreasonably withheld);
(f) it will maintain or cause to be maintained, with responsible
and reputable insurers, insurance with respect to its
properties, assets and business and the respective properties,
assets and businesses of its Subsidiaries against such
casualties and contingencies (including public liability) and
in such types and in such amounts and with such deductibles
and other provisions as are customarily maintained or caused
to be maintained by persons engaged in the same or similar
businesses in the same territories under similar conditions;
it will ensure that the Collateral Agent is an additional
named loss payee under all policies of insurance, as its
interest may appear, and that such policies are not
cancellable without at least 30 days' prior written notice
being given by the insurers to the Collateral Agent;
(g) it will do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged or delivered all such other acts,
agreements, instruments and assurances in law as the
Collateral Agent or Lenders' Counsel shall reasonably require
for the better accomplishing and effectuating of the
intentions and provisions of this Agreement and the Security;
(h) it will do, observe and perform all material matters and
things necessary or expedient to be done, observed or
performed under any law of Canada, the United States of
America, any province or state or municipality thereof or of
any other jurisdiction for the purpose of carrying on and
conducting its business and owning and possessing its
properties and assets and, without limitation, it will
maintain at all times in full force and effect all material
certificates, permits, licenses and other approvals required
to operate its business and it will cause its Subsidiaries to
do the same in respect of their respective businesses,
properties and assets; for greater certainty and without in
any way limiting the generality of the foregoing:
(i) each Borrower and each Guarantor shall be at all
times in compliance in all material respects with all
applicable Environmental Laws; and
(ii) each Borrower shall ensure that each of the real
properties or premises owned, leased or occupied by
it or any of its Subsidiaries is free from
contamination by a release, discharge or emission of
any Hazardous Material;
(i) it will promptly pay or cause to be paid all Taxes levied,
assessed or imposed upon it and/or its Subsidiaries, and/or
its properties and assets or those of its
- 69 -
Subsidiaries or any part thereof and/or upon its income and
profits or that of its Subsidiaries, as and when the same
shall become due and payable save when and so long as any
such Taxes are in good faith contested by it or those of
its Subsidiaries as may be affected thereby;
(j) it will furnish to the Canadian Administrative Agent and the
U.S. Administrative Agent, in sufficient quantities to provide
1 copy to each Lender and such Agent:
(i) as soon as available and in any event within 45 days
(or 60 days in the case of the last Quarter in each
Fiscal Year) after the end of each Quarter of each
Fiscal Year of the Canadian Borrower and each
Subsidiary (A) the unaudited consolidated (and
unconsolidated) financial statements of the Canadian
Borrower or Subsidiary, as the case may be, prepared
in substantially the same manner and containing
substantially comparable information to the financial
statements which were delivered to the Canadian
Administrative Agent prior to the date of this
Agreement, as of the end of such Quarter to be
prepared in accordance with GAAP, accompanied by a
confirmation (without personal liability) from the
president, the chief financial officer or treasurer
of the Canadian Borrower confirming that such
financial statements have not been prepared in a
manner, and do not contain any statement, which is
inconsistent with GAAP, certified (without personal
liability), subject to audit and year-end adjustment,
by the president, chief financial officer or
treasurer of the Canadian Borrower and containing
sufficient information to permit each Lender to
determine whether the financial covenants contained
in Section 8.2(p) are being maintained and, (B) such
officer's certificate to the effect that, as of the
last day of such Quarter, and, to the best knowledge
of such officer, as of the date of such certificate,
no event has occurred and is continuing which
constitutes an Event of Default or which would
constitute an Event of Default with the giving of
notice and/or the lapse of time or both;
(ii) as soon as practicable and in any event within 90
days after the end of each Fiscal Year of the
Canadian Borrower, (A) a copy of the consolidated
(and unconsolidated) financial statements of the
Canadian Borrower as of the end of such Fiscal Year,
such financial statements of the Canadian Borrower
and its Subsidiaries to be prepared in accordance
with GAAP, (a) the consolidated financial statements
of the Canadian Borrower to be accompanied by a
report thereon by independent auditors of recognized
standing confirming, without qualification, that such
financial statements of the Canadian Borrower have
been prepared in accordance with GAAP and (b) copies
of such auditors' recommendations, if any,
(following completion of their audit to be provided)
together with (B) a certificate
- 70 -
(without personal liability) of the president,
chief financial officer or treasurer of the
Canadian Borrower containing sufficient
information to permit each Lender to determine
whether the financial covenants contained in
Section 8.2(p) are being maintained and the
information required to determine amounts to be
paid under Section 6.5 and to the effect that, as
of the last day of such Fiscal Year, and to the
best of the knowledge of such officer, as of the
date of such certificate, no event has occurred
and is continuing which constitutes an Event of
Default or which would constitute an Event of
Default with the giving of notice and/or the lapse
of time or both;
(iii) as soon as possible and in any event within 10
Business Days after any Borrower or any of its
Subsidiaries receives (A) notice of the commencement
thereof, notice of any actions or proceedings against
it or any of its Affiliates or against any of the
property of a Borrower or any of its Subsidiaries
before any court, governmental agency or arbitrator,
which, if determined adversely, would have a material
adverse effect on the financial condition or
operations of any Borrower or its Subsidiaries, taken
as a whole and (B) a copy of any Violation Notice
received by a Borrower or any of its Subsidiaries;
(iv) within 30 days of the beginning of each Fiscal Year
of the Canadian Borrower, the Canadian Borrower's
annual business plan and financial projections,
including projected capital expenditures for the
Fiscal Year then begun;
(v) promptly upon request, such other information
concerning the financial affairs or operations of any
Borrower or any of its Subsidiaries as the Canadian
Administrative Agent or the U.S. Administrative
Agent, as the case may be, may reasonably request
from time to time including for greater certainty
financial statements of the U.S. Borrowers, NSULC,
FSLLC and FSLP;
(k) it will not, nor will it permit any Subsidiary to, without the
Majority Lenders' prior written consent, make any advances to
or for the benefit of, or guarantee (other than under
Permitted VTBS) the indebtedness or liabilities of, or
otherwise become liable for, any Person or any business or
project of any Person save and except:
(i) the endorsement of cheques and other negotiable
instruments for deposit in the ordinary course of
business;
- 71 -
(ii) advances and accounts between one or more of a
Borrower and any of its Subsidiaries which shall be
on commercially reasonable terms; provided that such
advances and accounts are secured by means of
security agreements in form and substance
satisfactory to the Collateral Agent, are assigned to
the Collateral Agent and form part of the Security
(hereinafter referred to as "Permitted Loans"); and
(iii) liabilities, indebtedness and obligations which would
otherwise constitute Permitted Encumbrances hereunder
but for the lack of a lien to secure such
liabilities, indebtedness and obligations.
(l) it will permit from time to time to the Canadian
Administrative Agent and the U.S. Administrative Agent or
their representatives or advisers access to its premises,
assets, records and meetings of directors and/or of
shareholders upon reasonable (both as to timing and advance
notice) request of such Agent;
(m) it will give to the Canadian Administrative Agent or the U.S.
Administrative Agent prompt notice of any Event of Default or
any event, of which it is aware, which, with the giving of
notice and/or the lapse of time or both, would constitute an
Event of Default;
(n) it will not, and it will not permit any of its Subsidiaries
to, without the Majority Lenders' prior written consent,
incur, create, assume or permit to exist any Lien on any of
its or any of its Subsidiaries' property or assets, whether
owned at the date hereof or hereafter acquired, except that
the following shall be permitted (the "Permitted
Encumbrances"):
(i) Liens incurred and pledges and deposits made in
connection with workers' compensation, unemployment
insurance, old-age pensions and similar legislation
(other than ERISA);
(ii) Liens securing the performance of bids, tenders,
leases, contracts (other than for the repayment of
borrowed money), and statutory obligations of like
nature, incurred as an incident to and in the
ordinary course of business;
(iii) statutory Liens of landlords, undetermined or
inchoate Liens and other Liens imposed by law, such
as carriers', warehousemens', mechanics',
construction and materialmen's Liens, incurred in
good faith in the ordinary course of business
provided that the aggregate amount of any carriers',
warehousemens', mechanics', construction or
materialmens' Liens shall at no time exceed an
aggregate amount of Cdn. $500,000 or
- 72 -
the Equivalent Amount thereof in U.S.$ and the amount
thereof shall be paid when same shall become due;
(iv) Liens securing the payment of Taxes, assessments and
governmental charges or levies, either (i) not
delinquent or (ii) being contested in good faith by
appropriate proceedings;
(v) permits, right-of-way, zoning restrictions,
easements, licenses, reservations, restrictions on
the use of real property or minor irregularities or
minor title defects incidental thereto which do not
in the aggregate materially detract from the value of
the property or assets of a Borrower or any of its
Subsidiaries or materially impair the operation of
the business of a Borrower or any of its
Subsidiaries;
(vi) Liens arising out of the leasing of personal property
by it or any of its Subsidiaries in the ordinary
course of business up to an amount not exceeding in
the aggregate Cdn.$9,000,000 for all Borrowers and
their Subsidiaries or the Equivalent Amount thereof
in U.S. $;
(vii) Liens, subordinate in priority to the Liens created
under the Security, incurred in the ordinary course
of business for the purposes of securing the payment
of any purchase price balance or the refinancing of
any purchase price balances not greater than in the
aggregate Cdn.$15,000,000 or the Equivalent Amount in
U.S. $ of any assets (other than current assets)
acquired by a Borrower or any of its Subsidiaries
provided that any such Liens are restricted to the
assets so acquired ("Permitted VTBS");
(viii) reservations, conditions, limitations and exceptions
contained in or implied by statute in the original
disposition from the Crown and grants made by the
Crown of interests so reserved or accepted;
(ix) security given in the ordinary course of business by
a Borrower, or any of its Subsidiaries to a public
utility or any municipality or governmental or public
authority in connection with operations of a
Borrower, or any of its Subsidiaries, (other than in
connection with borrowed money) securing not more
than an aggregate amount equal to Cdn. $500,000 for
all Borrowers and their Subsidiaries or the
Equivalent Amount thereof in U.S.
$;
(x) liens in respect of Permitted Loans;
- 73 -
(xi) the Security and any additional or further security
granted to the Collateral Agent and/or the Lenders by
a Borrower, a Guarantor or any future Subsidiary of a
Borrower; and
(xii) the encumbrances described on Schedule "P" with
respect to real property owned by Prime Management
Group Inc. and the Canadian Borrower.
(o) it will not, without the prior written consent of the Majority
Lenders:
(i) declare dividends, whether in cash or in specie, or
make payments thereof;
(ii) make or permit any distributions or returns of
capital (whether by retirement, redemption,
repurchase, cancellation or otherwise); or
(iii) make or permit any withdrawals or any other payments
of money or equivalents thereof whatsoever
(including, without limitation, royalties, management
fees, etc.) (which are not otherwise expressly
permitted by the terms of this Agreement) by or to
the shareholders of the Canadian Borrower, its
Affiliates or any creditors ranking junior to the
Lenders and it will cause its Subsidiaries to do
likewise save and except for:
(A) interest dividend payments, distributions
and/or returns of capital made, directly or
indirectly to any Borrower;
(B) normal course distributions to other
shareholders of such Subsidiaries as
contemplated in the Canadian Borrower's
annual business plan and within limits
approved by the Majority Lenders annually;
(C) normal course issuer bids of the Canadian
Borrower up to an aggregate amount not
exceeding Cdn. $2,000,000;
(D) payments upon exercise of the put options
under the Shareholders' Agreements;
(E) payments upon exercise of the call options
under the Shareholders' Agreements;
(F) payments on account of retirement,
termination, death or disability,
redemptions; and
(G) payments on account of Permitted VTBS;
- 74 -
(p) the Canadian Borrower will, at all times, maintain on a
consolidated and rolling 4 Quarters basis:
(i) the Maximum Total Debt/Adjusted EBITDA Ratio;
(ii) the Maximum Total Debt/Capitalization Ratio;
(iii) the Minimum Fixed Charge Coverage Ratio;
(iv) the Minimum Working Capital Ratio;
(v) the Minimum Business Value/Total Debt Ratio; and
(vi) the Minimum Interest Coverage Ratio;
(q) it will not, nor will it permit any of its Subsidiaries to,
without the Majority Lenders' prior written consent (which
shall not be unreasonably withheld), enter into a merger or
consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution),
or, except as permitted under Section 8.2(d), convey, sell,
lease, transfer or otherwise dispose of, in one transaction or
a series of transactions, all or a substantial part of its or
such Subsidiary's business, properties or assets;
(r) it will not, nor will it permit any of its Subsidiaries to,
incur any other indebtedness (including senior and
subordinated debt), loans or financing of any kind or nature
whatsoever (whether in the form of capital leases or
sale-leaseback transactions or otherwise) or incur any
contingent obligations or liabilities (including guarantees)
other than trade payables incurred in the ordinary course of
business and indebtedness or contingent obligations or
liabilities secured by Permitted Encumbrances and Permitted
Liens, without obtaining the prior written consent of the
Majority Lenders;
(s) it will not, nor will it permit any of its Subsidiaries to:
(i) other than:
(A) in the ordinary course of business; or
(B) in connection with the acquisition of an
Eligible Business which satisfies the
conditions of Section 5.2 (whether or not
Borrowings are being requested under an
Acquisition Facility),
- 75 -
make any acquisition of, or investment in, properties, assets,
businesses, shares, Persons or effectively related series of
such acquisitions or investments; or
(ii) establish, incorporate otherwise form, charter or
create any new Subsidiary other than in connection
with the acquisition of an Eligible Business which
satisfies the conditions of Section 5.2 (whether or
not Borrowings are being requested under an
Acquisition Facility), without obtaining the prior
written consent of the Majority Lenders;
(t) it will ensure that all Security granted to the Collateral
Agent, and/or the Lenders continues to be perfected and
preserve the first priority thereof;
(u) it will not make, or permit the making of, any change or
modification to the Shareholders' Agreements, without the
prior written consent of the Majority Lenders;
(v) it will cause any entity which after the date hereof shall
become a Subsidiary of a Borrower (such entity, a "New
Subsidiary") to execute and deliver in favour of the
Collateral Agent and the Lenders either (i) the Direct
Security or (ii) an Undertaking to Secure, together with
favourable supporting legal opinions, in either case, as soon
as reasonably practicable after becoming a Subsidiary and no
later than (A) in the case of an Acquisition Entity where the
acquisition has been financed, wholly or partially, by way of
Borrowings under an Acquisition Facility, on the date of
completion of the acquisition, or (B) in any other case within
10 Business Days following the date of completion of the
acquisition or creation of the New Subsidiary, as the case may
be; and
(w) it will not, without the prior written consent of the Majority
Lenders, terminate or replace Xxx Xxxxxxx as Chairman and
Chief Executive Officer of the Canadian Borrower, and, in the
event that due to any other reason, Xxx Xxxxxxx ceases to be
Chairman and Chief Executive Officer or to perform his duties
as such, it will not appoint a successor or new Chairman
and/or Chief Executive Officer unless such Person shall be
reasonably acceptable to the Majority Lenders.
For greater certainty, with respect to the covenants contained in this
Section 8.2, the ordinary courses of business of:
(a) FSLP is limited to holding the shares of NSULC;
(b) NSULC is limited to holding the units of FSLLC;
(c) FSLLC is limited to making loans to Subsidiaries of the
Canadian Borrower and taking security for such loans; and
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(d) FS USA is limited to making loans to Subsidiaries of the
Canadian Borrower and taking security for such loans.
ARTICLE IX
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT
Upon the occurrence of any one or more of the following events (an
"Event of Default"):
(a) the non-payment by a Borrower when due, whether by
acceleration or otherwise, of any payment of principal due
under the Facilities, or otherwise hereunder;
(b) the non-payment by a Borrower when due (or within 3 Business
Days thereafter) whether by acceleration or otherwise, of any
payment (other than a payment of principal) due under the
Facilities or otherwise hereunder;
(c) the commencement of proceedings by or against a Borrower, any
Guarantor or any of their Subsidiaries for the dissolution,
merger, amalgamation, liquidation or winding-up of any of a
Borrower or any Guarantor or any of their Subsidiaries or for
the suspension of the operations of any of a Borrower or any
Guarantor or any of their Subsidiaries, unless, in the case of
proceedings against a Borrower, any Guarantor or any of their
Subsidiaries, such proceedings are being actively and
diligently contested by the Borrower, or Guarantor or such
Subsidiary, as the case may be, in good faith to the
satisfaction of the Majority Lenders;
(d) a Borrower or any Guarantor or any of their Subsidiaries is
adjudged or declared bankrupt or insolvent or makes an
assignment for the benefit of creditors, or petitions or
applies to any tribunal for the appointment of a receiver,
custodian or trustee for a Borrower, any Guarantor or any such
Subsidiary or for any substantial part of its property, or
commences any proceedings relating to it under any
reorganization, arrangement, readjustment of debt, dissolution
or liquidation law or statute of any jurisdiction whether now
or hereafter in effect relating to or governing debtors or
such proceedings are commenced against it (unless, in the case
of proceedings commenced against it, such proceedings are
being actively and diligently contested by such Borrower, such
Guarantor or such Subsidiary in good faith to the satisfaction
of the Majority Lenders), or by any act indicates its consent
to, approval of, or acquiescence in, any such proceeding for a
Borrower, any Guarantor or any such Subsidiary or for any
substantial part of its property, or suffers the appointment
of any receiver, custodian or trustee and any such appointment
continues undischarged and in effect for a period of 30 days;
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provided that during such 30 day period such appointment is
being actively and diligently contested by such Borrower or
Guarantor or Subsidiary in good faith to the satisfaction of
the Majority Lenders and in the case of a Borrower such
receiver, custodian or trustee shall not have taken possession
of or otherwise enforced its rights over the property in
respect of which it has been appointed;
(e) any material representation or warranty made in this Agreement
or any Security by a Borrower, the Unlimited Guarantor, or any
of their Subsidiaries or any information furnished in writing
to an Agent or Lender by a Borrower, any Guarantor or any such
Subsidiary proves to have been incorrect in any material
respect when made or furnished save that if any such
materially incorrect representation or warranty is capable of
being corrected and none of the Agents and the Lenders has
been prejudiced by such materially incorrect representation or
warranty, then the Borrowers shall have 30 days after written
notice to do so by the Collateral Agent to take such action to
make the representation or warranty true and correct at such
time, in which case such representation or warranty shall be
deemed to have been true and correct when originally made or
furnished;
(f) a writ, execution or attachment or similar process is issued
or levied against all or a substantial portion of the property
of a Borrower, any Guarantor or any of their Subsidiaries in
connection with any judgment against a Borrower, any Guarantor
or any of their Subsidiaries in any amount which materially
affects the assets of a Borrower, any Guarantor or its
Subsidiaries, and such writ, execution, attachment or similar
process is not released, bonded, satisfied, discharged,
vacated or stayed within 30 days after its entry, commencement
or levy; provided that during such 30 day period such process
if being actively and diligently contested by such Borrower or
Guarantor or Subsidiary in good faith to the satisfaction of
the Majority Lenders;
(g) the breach or failure of due performance by a Borrower or any
Guarantor of any covenant or provision of this Agreement,
other than those heretofore dealt with in this Section 9.1,
which is not remedied by such Borrower, or Guarantor within 30
days, after written notice to do so by the Collateral Agent or
any Lender; provided that such breach or failure is capable of
being remedied and during such 30 day period the Borrower or
Guarantor is proceeding actively and diligently in good faith
to remedy such breach or failure to the satisfaction of the
Majority Lenders;
(h) demand by any Person (including, without limitation, any
Lender) is made on a Borrower, any Guarantor or any of their
Subsidiaries in respect of indebtedness, in an aggregate
amount of:
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(i) Cdn. $3,000,000 (or the Equivalent Amount thereof in
U.S.$) but less than Cdn. $5,000,000 (or the
Equivalent Amount thereof in U.S. $) and such demand
is not withdrawn within 30 days; or
(ii) Cdn. $5,000,000 (or the Equivalent Amount thereof in
U.S.$) or more,
payable on demand by such Borrower, such Guarantor or such
Subsidiary and such Borrower, such Guarantor or such
Subsidiary has not, when due and payable, made payment of the
amount so demanded or contested the validity of such demand in
good faith or a Borrower, any Guarantor or any of their
Subsidiaries is in default under any term or provision of any
agreement, deed, indenture or instrument (other than this
Agreement) between such Borrower, such Guarantor or such
Subsidiary as the case may be, and any Person (including,
without limitation, any Lender) shall have accelerated or
shall have the right to accelerate any indebtedness (including
Financial Contract Obligations) in an aggregate amount of:
(iii) Cdn. $3,000,000 (or the Equivalent Amount thereof in
US$) but less than Cdn. $5,000,000 (or the Equivalent
Amount thereof in U.S.$) and such acceleration or
right to accelerate is not withdrawn within 30 days;
or
(iv) Cdn. $5,000,000 (or the Equivalent Amount thereof in
U.S.$) or more,
of a Borrower, such Guarantor or such Subsidiary, as the case
may be;
(i) a writ, execution or attachment or similar process is issued
or levied against all or a substantial portion of the property
of a Borrower, any Guarantor or any of their Subsidiaries in
connection with any judgment against a Borrower, any Guarantor
or any of their Subsidiaries in any amount which materially
affects the assets of a Borrower, any Guarantor or its
Subsidiaries, and such writ, execution, attachment or similar
process is not released, bonded, satisfied, discharged,
vacated or stayed within 30 days after its entry, commencement
or levy provided during such 30 day period such process if
being actively and diligently contested by such Borrower or
Guarantor or Subsidiary in good faith to the satisfaction of
the Majority Lenders;
(j) a Borrower, any Guarantor or any of their Subsidiaries ceases
or threatens to cease to carry on all or a substantial part
of the business currently carried on by such Borrower, such
Guarantor or such Subsidiary;
(k) there is any change in Ownership and Control which results in
Xxx Xxxxxxx, his spouse, descendants and ascendants and any
entities controlled by any of them or trusts established by,
or for the benefit of, any of them, ceasing to own, directly
or indirectly, more voting shares of the Canadian Borrower
than any other
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shareholder or group of related or affiliated shareholders
without the prior written consent of the Majority Lenders; or
(l) a Borrower shall have failed within 30 days of the giving of a
Call Option Triggering Event Notice to have caused an Affected
Subsidiary to become a Direct Guarantor;
the Collateral Agent shall, if so instructed by the Majority Lenders, by written
notice to the Borrowers declare the Borrowings, including accrued interest
thereon, and all other indebtedness of the Borrowers to any of the Lenders
and/or the Agents in connection with this Agreement to be due and payable,
whereupon:
(i) any right of the Borrowers to any further utilization
of the Facilities terminates; and
(ii) all Borrowings and other indebtedness of the
Borrowers to any of the Lenders and/or to the Agents
in connection with this Agreement are,
notwithstanding anything in this Agreement to the
contrary, immediately due and payable without further
demand or other notice of any kind, all of which are
expressly waived by the Borrowers and Guarantors, and
the Borrowers shall immediately:
(A) pay to the Canadian Administrative Agent
and/or the U.S. Administrative Agent, as the
case may be, the amount so declared to be
due and payable (except for the Principal
Amount of the Bankers' Acceptances then
issued and outstanding);
(B) pay to the Canadian Administrative Agent, a
sum of money in Cdn. $ equal to such amount
which the Canadian Administrative Agent
shall establish as being the amount which if
invested in certificates of deposit or
similar money market instruments issued by
the Canadian Administrative Agent will,
together with the yield derived from such
investments (the sum of such amount and such
yield the "Amount"), equal the Principal
Amount of all Bankers' Acceptances then
issued and outstanding. The Canadian
Administrative Agent shall, promptly upon
receipt of the Amount distribute among the
Lenders the Amount or the applicable portion
thereof for such Bankers' Acceptances; and
(C) if so requested by the Canadian
Administrative Agent or the U.S.
Administrative Agent, as the case may be,
pay to such Agent an amount in immediately
available funds (which funds shall be held
as collateral pursuant to arrangements
satisfactory to such Agent)
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equal to the aggregate amount available for
drawing under all Letters of Credit then
outstanding.
9.2 SECURITY
(a) Upon the occurrence of an Event of Default, the Security held
by the Collateral Agent and/or any Lender shall become
immediately enforceable and the Majority Lenders may, in their
absolute discretion, instruct the Collateral Agent or, in
respect of any Security held by any Lender directly, such
Lender, to take any and all steps in order to enforce and
realize upon the Security, in whole or in part.
(b) The Borrowers' obligations and liabilities under this
Agreement are in no way affected or diminished in the event of
any such enforcement of or realization upon any Security by
the Collateral Agent or any such Lender.
9.3 REMEDIES NOT EXCLUSIVE
The Borrowers and the Guarantors expressly agree that the rights and
remedies of the Agents and the Lenders under this Agreement and the Security are
cumulative and in addition to, and not in substitution for, any rights or
remedies provided by law; any single or partial exercise by an Agent or any
Lender of any right or remedy for a default or breach of any term, covenant,
condition or agreement in this Agreement does not affect its or their rights and
does not waive, alter, affect, or prejudice any other right or remedy to which
an Agent or the Lenders may be lawfully entitled for the same default or breach.
Any waiver by an Agent or any of the Lenders of the strict observance of,
performance of or compliance with any term, covenant, condition or agreement of
this Agreement, and any indulgence by any Agent or any of the Lenders is not a
waiver of that or any subsequent default.
9.4 SET-OFF
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, each of the Lenders is
authorized during an Event of Default which is continuing, without notice to the
Borrowers, any Guarantor or to any other Person, any such notice being expressly
waived by the Borrowers and each Guarantor, to set-off and to appropriate and to
apply any and all deposits, matured or unmatured, general or special and any
other indebtedness at any time held by or owing by each of the Lenders to or for
the credit of or the account of any of the Borrowers or any Guarantor against
and on account of the obligations and liabilities of the Borrowers and the
Guarantors due and payable to each of the Lenders under this Agreement,
including without limitation, all claims of any nature or description arising
out of or connected with this Agreement.
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ARTICLE X
PAYMENTS
10.1 PAYMENTS TO AGENTS
(a) All payments to be made by the Canadian Borrower in connection
with this Agreement shall be made in funds having same day
value to the Canadian Administrative Agent, for its own
account or for the account of the Canadian Lenders, at
Canadian Imperial Bank of Commerce, International, Toronto, in
favour of Dresdner Bank Canada, Toronto, Account No. 650-0811
for CDN$, at Xxxxxxxx Xxxx XX, Xxx Xxxx, X0X 143039, in favour
of Dresdner Bank Canada for US$, or at any other office or
account designated by the Canadian Administrative Agent. Any
such payment shall be made on the date upon which such payment
is due, in accordance with the terms hereof, no later than
10:00 a.m. Any such payment shall be a good discharge to the
Canadian Borrower for such payment and, if any such payment is
for the account of the Lenders, the Canadian Administrative
Agent shall hold the amount so paid "in trust" for the Lenders
until distributed to them in accordance with this Agreement.
(b) All payments to be made by the U.S. Borrowers in connection
with this Agreement shall be made in funds having same day
value to the U.S. Administrative Agent, for the account of the
U.S. Lenders, at Dresdner Bank AG, New York, U1D 143039, or at
any other office or account designated by the U.S.
Administrative Agent. Any such payment shall be made on the
date upon which such payment is due, in accordance with the
terms hereof, no later than 10:00 a.m. Any such payment shall
be a good discharge to the U.S. Borrowers for such payment
and, if any such payment is for the account of the U.S.
Lenders, the U.S. Administrative Agent shall hold the amount
so paid "in trust" for the U.S. Lenders until distributed to
them in accordance with this Agreement.
(c) Whenever a payment is due on a day which is not a Business
Day, the day for payment is the following Business Day.
10.2 PAYMENTS BY LENDERS TO AGENTS
All payments to be made by any Lender to an Agent in connection with
Borrowings shall be made in funds having same day value to such Agent, for the
applicable Borrower's applicable Cdn. $ or U.S. $ account (unless otherwise
specified), at the branch, office or account mentioned in or designated under
Section 10.1 (a) or (b) and by the time designated therein.
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10.3 PAYMENTS BY AGENTS TO BORROWERS
Any payment received by an Agent for the account of a Borrower shall be
paid in funds having same day value to such Borrower by such Agent on the date
of receipt or, if such date is not a Business Day, on the next Business Day, to
the Canadian Borrower's Operating Accounts or each U.S. Borrower's Operating
Account, as the case may be, at the same branch, or to such other accounts as a
Borrower may designate.
10.4 DISTRIBUTION TO LENDERS AND APPLICATION OF PAYMENTS
(a) Except as otherwise indicated herein, all payments made to an
Agent by a Borrower for the account of the Lenders in
connection herewith shall be distributed the same day by such
Agent in funds having same day value among the Lenders to the
accounts last designated in writing by such Lenders
respectively to such Agent pro rata, in accordance with their
respective Participations with respect to the Loans, Bankers'
Acceptances or Letters of Credit in respect of which any such
payment is made.
(b) Any amounts so distributed shall be applied by the Lenders as
follows:
(i) to amounts due pursuant to Articles VII or XI;
(ii) to amounts due pursuant to Articles XII;
(iii) to amounts due pursuant to Article IV; and
(iv) to any other amounts due pursuant to this Agreement.
10.5 NO SET-OFF OR COUNTERCLAIM
All payments by a Borrower or any Guarantor shall be made free and
clear of and without any deduction for or on account of any set-off or
counterclaim.
10.6 NON-RECEIPT BY AGENTS
Where a sum is to be paid hereunder to an Agent for the account of
another party hereto, such Agent shall not be obliged to make the same available
to that other party hereto until it has been able to establish that it has
actually received such sum, but if it does pay out a sum and it proves to be the
case that it had not actually received the sum it paid out, then the party
hereto to whom such sum was so made available shall on request ensure that the
amount so made available is refunded to such Agent and shall on demand indemnify
such Agent against any cost or loss it may have suffered or incurred by reason
of its having paid out such sum prior to its having received such sum.
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10.7 WHEN DUE DATE NOT SPECIFIED
Whenever this Agreement does not provide a date when any
amount payable hereunder shall be due and payable such amount shall be due and
payable on the 5th Business Day following written notice or demand for payment
thereof by an Agent or any Lender save that nothing hereinbefore provided shall
in any way affect or alter the rights and remedies available to the Agents and
any Lender under Article IX.
10.8 AGENTS' AUTHORITY TO DEBIT
In respect of all amounts payable by a Borrower under this
Agreement, the Borrowers and each Unlimited Guarantor hereby authorize and
instruct the Agents, as applicable, to debit, from time to time when such
amounts are due and payable, the account or accounts designated pursuant to
Section 10.3 and all other accounts of the applicable Borrower or Unlimited
Guarantor, whether such accounts are maintained with an Agent, an Account Bank
or otherwise, for the purpose of satisfying payment thereof.
ARTICLE XI
EXPENSES
11.1 PAYMENT OF EXPENSES
Whether or not an Event of Default exists, the Borrowers
shall, jointly and severally:
(a) pay (i) all reasonable out-of-pocket expenses of the
Agents and the Lead Arranger incurred in the
preparation, negotiation, execution and delivery of
this Agreement, the Security and all other documents
relating hereto including, without limitation, legal
fees and out-of-pocket expenses of Lenders' Counsel
and their agents and (ii) all other reasonable
out-of- pocket expenses of the Agents, the Lead
Arranger, the Co-Arrangers and the Managers incurred
in connection with the establishment and maintenance
of the Facilities including, without limitation,
environmental and other consultants' fees and
expenses;
(b) pay all reasonable out-of-pocket expenses of the
Agents incurred in the amendment or modification of
this Agreement or documents (including waivers or
consents) relating thereto at a Borrower's request
(whether or not any such amendment or modification is
actually consummated) including without limitation,
legal fees and out-of-pocket expenses of Lenders'
Counsel and their agents;
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(c) pay all reasonable out-of-pocket expenses of the
Agents and the Lenders incurred in the enforcement
and preservation of any of their rights under this
Agreement or any Security, including, without
limitation, legal fees and out-of-pocket expenses of
Lenders' Counsel or other counsel and their agents;
and
(d) indemnify the Agents and the Lenders from all losses,
costs, damages, out-of-pocket expenses and
liabilities which any Agent or any Lender sustains or
incurs (including, without limitation, any loss of
profit or expenses any Lender incurs by reason of the
liquidation or redeployment of deposits or other
funds acquired by such Lender to maintain Borrowings
or any interest or other charges payable by such
Lender to other lenders of funds borrowed in order to
make, to fund or to maintain the Loans or to maintain
any amount in default) as a consequence of (I) any
prepayment (it being understood that the mandatory
repayments to be made pursuant to Section 3.1 do not
constitute prepayments), (II) any acceleration of the
payment of Borrowings pursuant to Section 9.1 or 17.8
or (III) any default by a Borrower under any of the
provisions of this Agreement including, without
limitation, a failure to borrow on a Drawdown Date or
to issue Bankers' Acceptances on an Acceptance Date,
a failure to pay interest on, or principal amounts
of, the Loans on the dates due, the failure to make a
payment on the specified date or the failure to make
a payment in accordance with this Agreement or any
misrepresentation by a Borrower contained in or
delivered in writing in connection with this
Agreement. The certificate of an officer or manager
of any Agent or any such Lender setting forth the
amount of any such losses, damages, expenses and
liabilities shall constitute, absent manifest error,
prima facie evidence of any such amount and any Agent
shall debit, from any Borrower's accounts, the amount
stipulated in the certificate in accordance with
Section 10.8. The affected Agent or Lender shall also
provide to the affected Borrower a statement setting
out the basis for the calculation of such amount.
11.2 SURVIVAL
Without prejudice to the survival or termination of any other
agreement of the Borrowers under this Agreement, the obligations of the
Borrowers under Section 11.1 survive the repayment of all the Borrowings and the
termination of the Commitments.
11.3 ENVIRONMENTAL INDEMNITY
(a) Subject to the limitations in this Section 11.3, the
Borrowers agree to and do hereby, jointly and
severally, indemnify and save harmless the Agents
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and the Lenders and their officers, directors,
employees, agents and shareholders in such capacities
(the "Indemnified Parties") from and against any and
all losses, damages, costs and expenses of any and
every nature and kind whatsoever which at any time or
from time to time may be paid by or incurred by them
(without duplication and net of Tax Recoveries by any
of the Indemnified Parties) for, with respect to, or
as a direct or indirect result of the disposal,
refining, generation, manufacture, production,
storage, handling, presence, treatment, transfer,
release, processing or transportation of any
Hazardous Material in, on or under any property of
whatsoever nature or kind of a Borrower, or any
Subsidiary thereof, or the discharge, emission, spill
or disposal from such property into or upon any land,
the atmosphere or any watercourse, body of water or
wetland of any Hazardous Material where it has been
proven that the source of the Hazardous Material is
the said property to the extent that such losses,
damages, costs and expenses arise out of the
relationship between the Indemnified Parties and a
Borrower reflected herein including,without
limitation:
(i) the cost of defending and/or counterclaiming
or claiming over against third parties in
respect of any action or matter referred to
above;
(ii) any cost, liability or damage arising out of
any settlement of any action referred to
above to which any Indemnified Party is a
party; and
(iii) costs of any cleanup in connection with any
matter referred to above.
(b) In the event that any claim, action, order, suit or
proceeding, including, without limiting the
generality of the foregoing, any inquiry or
investigation (whether formal or informal) is brought
or instituted against any Indemnified Party, the
Indemnified Party shall promptly notify the Borrowers
and the Borrowers shall promptly retain counsel who
shall be reasonably satisfactory to the Indemnified
Parties to represent the Indemnified Parties in such
claim, action, order, suit or proceeding and the
Borrowers shall pay all of the reasonable fees and
disbursements of such counsel relating to such claim,
action, order, suit or proceeding.
(c) In any such claim, action, order, suit or proceeding,
the Indemnified Parties shall have the rights to
retain other counsel to act on their behalf, provided
that the fees and disbursements of such other counsel
shall be paid by the Indemnified Parties unless: (i)
the Borrowers and the
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Indemnified Parties shall have mutually agreed to the
retention of such other counsel; or (ii) the named
parties to any such claim, action, order, suit or
proceeding (including any added, third or impleaded
parties) include the Borrowers and the Indemnified
Parties and representation of all such parties by the
same counsel would be inappropriate due to actual or
potential differing interests between them (such as
the availability of different defences).
(d) Notwithstanding anything contained in this Section
11.3, none of the Indemnified Parties shall agree to
any settlement of any such claim, action, order, suit
or proceeding unless the Borrowers shall have
consented in writing thereto, and the Borrowers shall
not be liable for any settlement of any such claim,
action, order, suit or proceeding unless they have
consented in writing thereto. The Borrowers shall be
entitled to settle any such claim, action, order,
suit or proceeding on any terms it deems appropriate.
(e) The provisions of this Section 11.3 shall survive the
Final Maturity Date and the repayment of all
Borrowings hereunder and the satisfaction by the
Borrowers of all other obligations hereunder.
(f) For the purposes of this Section 11.3, "Tax
Recoveries" of any Person in respect of a payment or
outlay made or incurred by such Person means the
Taxes that would be saved or recovered by such Person
and the creation or increase of a loss or credit for
Tax purposes which may be used to reduce Taxes
payable by such Person.
ARTICLE XII
FEES
12.1 COMMITMENT FEES
(a) From and including the date hereof to and including
the Final Maturity Date, the Canadian Borrower shall
pay to the Canadian Administrative Agent, for the
account of the Canadian Lenders to be allocated among
and paid to such Lenders pro rata in accordance with
such Lenders' respective Commitments, a commitment
fee equal to .375% per annum on the daily average
unutilized portion of the Commitments in respect of
the Canadian Acquisition Facility for each Quarter.
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(b) From and including the date hereof to and including
the Final Maturity Date, the U.S. Borrowers shall pay
to the U.S. Administrative Agent, for the account of
the U.S. Lenders to be allocated among and paid to
such Lenders pro rata in accordance with such
Lenders' respective Commitments, a commitment fee
equal to .375% per annum on the daily average
unutilized portion of the Commitments in respect of
the U.S. Acquisition Facility for each Quarter.
(c) Such fees referred to in Section 12.1(a) and (b)
shall be debited, in the case of the Canadian
Borrower by the Canadian Administrative Agent from
the Canadian Borrower's Cdn. $ account designated
under Section 10.3 on the first Business Day of each
Fiscal Quarter and in the case of the U.S. Borrowers
by the U.S. Administrative Agent from each such U.S.
Borrower's Operating Account designated under Section
10.3 on the first Business Day of each Fiscal
Quarter. The Canadian Administrative Agent or the
U.S. Administrative Agent, as the case may be, shall
furnish to the respective Borrowers written notice
thereof setting out the details of such calculation
on or before the 10th Business Day following the end
of each Quarter.
ARTICLE XIII
THE AGENTS AND THE LEAD ARRANGER
13.1 AGENTS
Each Lender hereby appoints each Agent to act as its agent, as
specified hereunder, in connection with this Agreement and any matter
contemplated hereunder and authorizes irrevocably each Agent for the duration of
such appointment to exercise such rights, powers and discretions as are
delegated to such Agent pursuant to this Agreement and the Security together
with all such rights, powers and discretions as are incidental hereto or
thereto. Each Agent shall have only those duties and responsibilities which are
expressly specified in this Agreement and the Security, and it may perform such
duties by or through its agents or employees. This Agreement and the Security
shall not place any Agent under any fiduciary duties in respect of any Lender.
Each Agent and any other Person to whom an Agent may delegate duties or
responsibilities as permitted under Section 13.2 (h) shall enjoy the same
benefits, rights and protections as those provided to the Agents under this
Article "mutatis mutandis".
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13.2 AGENTS' RESPONSIBILITY
Each Agent may:
(a) assume, until it is notified in writing or has actual notice
or actual knowledge to the contrary, that:
(i) any representation made by a Borrower or any of its
Subsidiaries in or in connection with any of this
Agreement, any notice or other document, instrument
or certificate is true;
(ii) no Event of Default has occurred; and
(iii) each Borrower or a Subsidiary of a Borrower is not in
breach of or in default under, its obligations under
any of this Agreement or the Security;
and each Agent may also:
(b) unless such Agent has actual knowledge or actual notice to the
contrary, assume that each Lender's address is that identified
with its signature below until it has received from such
Lender a notice designating some other office of such Lender
as its address and act upon any such notice until the same is
superseded by a further such notice;
(c) engage and pay for the advice or services of any lawyers,
accountants or other experts whose advice or services may to
it seem necessary, expedient or desirable and rely upon any
advice so obtained;
(d) unless such Agent has actual knowledge or actual notice to the
contrary, rely as to matters of fact which might reasonably be
expected to be within the knowledge of a Borrower or any
Subsidiary of a Borrower upon a statement signed by or on
behalf of a Borrower or any Subsidiary of a Borrower;
(e) unless such Agent has actual knowledge or actual notice to the
contrary, rely upon any communication or document believed by
it to be genuine;
(f) refrain from exercising any right, power or discretion vested
in it under this Agreement or any Security unless and until
instructed by the Majority Lenders as to whether or not such
right, power or discretion is to be exercised and, if it is to
be exercised, as to the manner in which it should be
exercised;
(g) refrain from exercising any right, power or discretion vested
in it which would or might in its opinion be contrary to any
law of any jurisdiction or any directive or
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otherwise render it liable to any Person, and may do anything
which is in its opinion necessary to comply with any such law
or directive;
(h) retain for its own benefit, and without liability to account
for, any fee or other sum receivable by it for its own
account;
(i) accept deposits from, lend money to, provide any advisory or
other services to or engage in any kind of banking or other
business with any party (including any Affiliate thereof) to
this Agreement; and
(j) refrain from acting in accordance with any instructions of the
Majority Lenders to begin any legal action or proceeding
arising out of or in connection with any of this Agreement or
any Bankers' Acceptance, or take any steps to enforce or
realize upon any Security, until it shall have received such
security as it may require (whether by way of payment in
advance or otherwise) against all costs, claims, expenses
(including legal fees) and liabilities which it will or may
expend or incur in complying with such instruction.
13.3 AGENTS' DUTIES
Each Agent shall:
(a) promptly upon receipt thereof, inform each Lender of the
contents of any notice, document, request or other information
received by it in its capacity as an Agent hereunder from a
Borrower or any Subsidiary of a Borrower;
(b) promptly notify each Lender of the occurrence of any Event of
Default or any default (of which a Borrower is aware which,
with the giving of notice or passage of time or both, would
constitute an Event of Default) by a Borrower or a Guarantor
in the due performance of its obligations under this
Agreement, any Security or any document incidental thereto to
which it is expressed to be a party and of which the Agent has
actual knowledge or actual notice;
(c) with the prior consent of the Borrowers (such consent not to
be unreasonably withheld or delayed) and the Majority Lenders,
(i) appoint a Lender or Affiliate of a Lender as a Reference
Bank in replacement of any Reference Bank which ceases to be a
Lender or an Affiliate of a Lender and (ii) with the prior
consent of the Borrowers (such consent not to be unreasonably
withheld or delayed) appoint a bank or financial institution
as an Account Bank in replacement of an existing Account Bank;
(d) each time the Borrowers request the prior written consent of
the Majority Lenders, use its best efforts to obtain and
communicate to the Borrowers the
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response of the Majority Lenders in a reasonable and timely
manner having due regard to the nature and circumstances of
the request;
(e) subject to the foregoing provisions of this Section 13.3, act
in accordance with any instructions given to it by the
Majority Lenders and, in particular, only take steps to
enforce or realize upon Security in accordance with the
instructions or delegated authority of the Majority Lenders;
and
(f) if so instructed by the Majority Lenders, refrain from
exercising any right, power or discretion vested in it under
this Agreement, the Security or any document incidental
thereto.
13.4 PROTECTION OF AGENTS, LEAD ARRANGER, CO-ARRANGERS AND MANAGERS
Notwithstanding anything to the contrary expressed or implied herein,
each of the Agents, the Lead Arranger, the Co-Arrangers and the Managers shall
not:
(a) be bound to enquire as to:
(i) whether any representation made by a Borrower, a
Guarantor or any of their Subsidiaries in or in
connection with this Agreement, the Security or any
document incidental thereto is true;
(ii) the occurrence or otherwise of any Event of Default;
(iii) the performance by a Borrower, a Guarantor or any of
their Subsidiaries of its obligations under any of
this Agreement, the Security or any document
incidental thereto;
(iv) any breach of or default by a Borrower, a Guarantor
or any of their Subsidiaries of or under its
obligations under this Agreement, the Security or any
document incidental thereto; or
(v) the use or application by a Borrower of any of the
proceeds of the Facilities;
(b) be bound to account to any Lender for any sum or the profit
element of any sum received by it for its own account;
(c) be bound to disclose to any Person any information relating to
a Borrower or a Guarantor if such disclosure would or might in
its opinion constitute a breach of any law or regulation or be
otherwise actionable at the suit of any Person; or
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(d) accept any responsibility for the accuracy and/or completeness
of any information supplied in connection herewith or for the
legality, validity, effectiveness, adequacy or enforceability
of this Agreement, any Bankers' Acceptance or any document
incidental hereto or thereto and no Agent shall be under any
liability to any Lender as a result of taking or omitting to
take any action in relation to this Agreement, any Bankers'
Acceptance, the Security or any document incidental hereto or
thereto save in the case of gross negligence or wilful
misconduct, and each of the Lenders agrees that it will not
assert or seek to assert against any director, officer,
employee or agent of any Agent or the Lead Arranger, any Co-
Arranger or any Manager any claim it might have against any of
them in respect of the matters referred to in this Section
13.4.
13.5 INDEMNIFICATION OF AGENTS
Each Lender shall, on demand by an Agent, indemnify such Agent pro rata
in accordance with such Lender's Participation at the time of such demand
against any and all costs, claims, reasonable expenses (including legal fees)
and liabilities which such Agent may incur (and which have not been reimbursed
by a Borrower), otherwise than by reason of its own gross negligence or wilful
misconduct, in acting in its capacity as an Agent under this Agreement, any
Bankers' Acceptance, the Security or any document incidental hereto or thereto.
13.6 TERMINATION OR RESIGNATION OF AGENT
(a) Notwithstanding the appointment of an Agent, the Majority
Lenders may (with the consent of the Canadian Borrower prior
to an Event of Default and without requiring such consent
after the occurrence of an Event of Default which is
continuing; such consent not to be unreasonably withheld or
delayed), upon giving an Agent 90 days prior written notice to
such effect, terminate an Agent's appointment hereunder.
(b) An Agent may resign its appointment hereunder at any time
without assigning any reason therefor by giving written notice
to such effect to each of the other parties hereto.
(c) In the event of any such termination or resignation, the
Majority Lenders shall appoint a successor Agent (with the
consent of the Canadian Borrower prior to an Event of Default
and without requiring such consent after the occurrence of an
Event of Default which is continuing, such consent not to be
unreasonably withheld or delayed). The Canadian Administrative
Agent or the U.S. Administrative Agent, as the case may be,
(if it is the Agent being replaced) shall deliver copies of
the Accounts to such successor and the retiring Agent shall be
discharged from any further obligation hereunder but shall
remain entitled to the benefit of the provisions of this
Article XIII and the Agent's successor and each
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of the other parties hereto shall have the same rights and
obligations among themselves as they would have had if such
successor originally had been a party hereto as an Agent.
13.7 RIGHTS OF AN AGENT AS LENDER
With respect to its Commitment and its Participation, and to Bankers'
Acceptances and Letters of Credit, an Agent shall have the same rights and
powers under this Agreement and any Bankers' Acceptances as any other Lender,
and it may exercise such rights and powers as though it were not performing the
duties and functions delegated to it as an Agent hereunder, and the term
"Lender" or any other similar term shall, unless the context otherwise requires,
include any Agent in its capacity as a Lender.
13.8 AUTHORIZED WAIVERS, VARIATIONS AND OMISSIONS
If so authorized in writing by the Majority Lenders, the Collateral
Agent may grant waivers, consents, vary the terms of this Agreement and do or
omit to do all acts and things in connection herewith or therewith. Except with
the prior written agreement of all the Lenders, nothing in this Section 13.8
shall authorize:
(a) any decrease in the Acceptance Fee, the COF Margin, the Libor
Margin, the Letter of Credit Fee, the Prime Margin, the
Alternate Base Rate Margin or the Commitment Fees;
(b) any extension of the date for, or alteration in the amount,
currency or mode of calculation or computation of any payment
of principal or interest or other amount;
(c) any increase in the Commitment of a Lender or subject any
Lender to any additional obligations hereunder;
(d) any amendments to Section 3.8;
(e) any change in the terms of Article IX;
(f) any change in the definition of Majority Lenders;
(g) the release or discharge of a Borrower or a Guarantor;
provided however and notwithstanding the foregoing, the
Collateral Agent may, without the consent of the Lenders,
grant partial releases and discharges of the Security in
connection with any sale, lease, transfer, assignment,
disposition or conveyance by the Canadian Borrower and/or any
of its Subsidiaries of properties or assets permitted under
Section 8.2(d) hereof; or
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(h) any amendments to this Section 13.8.
13.9 FINANCIAL INFORMATION CONCERNING THE BORROWERS OR GUARANTORS
Subject to Section 13.3 (a), no Agent nor the Lead Arranger shall have
any duty or responsibility either initially or on a continuing basis to provide
any Lender with any credit or other information with respect to the financial
condition and affairs of the Borrowers or Guarantors.
13.10 KNOWLEDGE OF FINANCIAL SITUATION OF BORROWERS
Each of the Lenders represents and warrants to the Agents, the Lead
Arranger, the Co- Arrangers and the Managers that it has made its own
independent investigation of the financial condition and affairs of the
Borrowers and each Guarantor in connection with the making and continuation of
its Participation in this Agreement and that it has not relied on any
information provided to it by any Agent, the Lead Arranger, any Co-Arranger or
any Manager in connection herewith or therewith, and each represents and
warrants to the Agents and the Lead Arranger, the Co-Arrangers and the Managers
that it shall continue to make its own appraisal of the creditworthiness of the
Borrowers and the Guarantors from time to time.
13.11 LEGAL PROCEEDINGS
No Agent shall be obligated to take any legal proceedings against a
Borrower or any other Person for the recovery of any amount due under this
Agreement or under any Bankers' Acceptances. No Lender shall bring legal
proceedings against a Borrower, any Guarantor or Subsidiary hereunder or in
connection herewith, or exercise any right arising hereunder or in connection
herewith over the property and assets of a Borrower, any Guarantor or any
Subsidiary, without the prior written consent of the Majority Lenders.
13.12 CAPACITY AS AGENT
In performing its functions and duties under this Agreement, each Agent
shall act solely as the agent of the Lenders and shall not assume, and shall not
be deemed to have assumed, any obligation as agent or trustee for a Borrower or
any other Person. No Agent shall be under any liability or responsibility of any
kind to the Borrowers, the Lenders or to any other Person arising out of or in
relation to any failure or delay in performance or breach by any Lender or
Lenders or, as the case may be, by the Borrowers, any Guarantor or any other
Person (other than such Agent in respect of its own gross negligence or wilful
misconduct) pursuant to or in any way in connection with this Agreement.
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13.13 CAPACITY AS ARRANGERS
The Borrowers, each Lender and each Agent hereby agree and confirm that
the Lead Arranger, the Co-Arrangers and the Managers have performed their
functions and duties in connection with the arrangement of the Facilities and
shall not be under any liability or responsibility of any kind from and after
the date hereof to the Borrowers, the Guarantors, the Lenders, the Agents or any
of them arising out of or in relation to the arrangement of the Facilities or
this Agreement.
13.14 DEPOSITS OR LOANS RESPECTING THE BORROWERS
Each Agent and each of the Lenders may accept deposits from, lend money
to and generally engage in any kind of banking or other business with the
Borrowers or the Guarantors without liability to account to any Agent or any
Lender.
ARTICLE XIV
ASSIGNMENTS AND TRANSFERS
14.1 BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each
party hereto and its successors and permitted assigns.
14.2 ASSIGNMENTS AND TRANSFERS BY A BORROWER OR AN UNLIMITED GUARANTOR
No Borrower nor the Unlimited Guarantor shall be entitled to assign or
transfer all or any of its rights, benefits and obligations hereunder.
14.3 ASSIGNMENTS AND TRANSFERS BY A LENDER
(a) Subject to Section 14.4, any Lender may, at its cost, assign or
transfer, with:
(i) the consent of the Canadian Administrative Agent with
respect to a Canadian Lender and the U.S.
Administrative Agent with respect to a U.S. Lender
(which consents shall not be unreasonably withheld or
delayed); and
(ii) (unless there exists an Event of Default) the consent
of the Canadian Borrower (which shall not be
unreasonably withheld or delayed)
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and upon such terms and conditions as such Lender shall determine, all
or any portion of its rights, benefits and/or obligations hereunder in
relation to a portion of such Lender's Commitment of not less than,
with respect to the Canadian Facilities, Cdn.$1,000,000 and with
respect to the U.S. Facilities, U.S. $10,000,000, to an assignee or a
transferee which in the case of assignments by a Canadian Lender is a
recognized financial institution resident in Canada (a "Canadian
Assignee") and in the case of assignments by a U.S. Lender, is a Person
which can comply with the provisions of Section 7.9(a) of this
Agreement and provides evidence thereof satisfactory to the U.S.
Borrowers acting reasonably and is in the business of making loans (a
"U.S. Assignee"); provided that in the case of an assignment or
transfer by a Canadian Lender there is a corresponding assignment or
transfer by the related U.S. Lender (which may, in certain
circumstances be the same institution) to a U.S. Assignee related to
the Canadian Assignee (which may in certain circumstances be the same
institution) of an amount which bears the same proportion to the
related U.S. Lender's Commitment as the amount assigned or transferred
by the Canadian Lender bears to the Canadian Lender's Commitment, and
vice versa in the case of an assignment or transfer by a U.S. Lender.
(b) Where obligations of any Lender are so assigned or
transferred, the assignee or transferee shall confirm in
writing to the Borrowers and the Canadian Administrative Agent
and the U.S. Administrative Agent, as the case may be, prior
to such assignment or transfer taking effect, that it shall be
bound towards the Borrowers and the Agents by the terms hereof
relating to such obligations. On the assignment and transfer
being made and such written confirmation, as aforesaid, being
delivered to the Borrowers and such Agent, such Lender shall
be relieved of its obligations to the extent of such
assignment or transfer thereof and such assignee or transferee
shall become a Lender for all purposes of this Agreement and
the related documents and transactions provided herein or
contemplated thereby to the extent of such assigned or
transferred interest.
14.4 TRANSFER CERTIFICATE
If any Lender wishes to assign or transfer all or any of its rights,
benefits and obligations hereunder in accordance with Section 14.3, then such
assignment or transfer shall be effected by the delivery by such Lender to the
Canadian Administrative Agent and the U.S. Administrative Agent and the
Borrowers of a duly completed and executed Transfer Certificate whereupon, to
the extent that in such Transfer Certificate the Lenders party thereto seeks to
assign or transfer its rights and obligations hereunder:
(a) the applicable Borrower(s) and such Lender shall each be
released from further obligations to the other hereunder, and
their respective rights against each other shall be cancelled
(such rights and obligations being referred to in this Section
14.4 as "discharged rights and obligations");
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(b) the applicable Borrower(s) and the Transferee party thereto
shall each assume obligations towards and acquire rights in
respect of each other which differ from the discharged rights
and obligations only insofar as the obligations so assumed and
the rights so acquired by the Borrowers are owed to and
constituted by claims against such Transferee and not such
Lender, so that the Borrowers and the Transferee shall have
the same rights and obligations towards each other which they
would have acquired had the Transferee been an original party
hereto;
(c) the Agents, the Transferee and the other Lenders shall acquire
the same rights and assume the same obligations between
themselves as they would have acquired and assumed had the
Transferee been an original party hereto with the obligations
assumed and the rights acquired by it as a result of such
assignment or transfer.
(d) the amounts payable by any Borrower under this Agreement shall
not increase, whether in respect of withholding on account of
taxes or otherwise, as a result of any such assignment or
transfer to a Lender which is, or is deemed to be (i) in the
case of the Canadian Facilities, not resident in Canada for
the purposes of the Income Tax Act (Canada) with respect to
any such Transferee becoming a Canadian Lender or (ii) in the
case of the U.S. Facilities, is not a resident of the U.S. for
the purpose of the Code with respect to any such Transferee
becoming a U.S. Lender.
14.5 NOTICE
The Canadian Administrative Agent or the U.S. Administrative Agent, as
the case may be, shall notify promptly the appropriate parties hereto of the
receipt by it of any Transfer Certificate, and shall promptly deliver a copy of
such Transfer Certificate to the Borrowers.
14.6 SUB-PARTICIPATIONS
Any Lender may, at its own cost, grant one or more sub-participations
in all or any portion of its rights, benefits and/or obligations hereunder to
third parties, without the consent of the Borrowers, and upon such terms and
conditions as such Lender shall determine, provided that, notwithstanding any
such sub-participation, such Lender shall remain, in so far as the other parties
hereto are concerned, entitled to its rights and benefits hereunder and bound by
its obligations hereunder and the Borrowers, the other Lenders and the Agents
shall not be obliged to recognize any such third party as having the rights
against any of them which it would have if it had been a party hereto, and
provided further that in the case of any sub-participation by a Canadian Lender
to a Canadian participant (a "Canadian Participant"), there shall be a
corresponding sub-participation by the related U.S. Lender (which may in certain
circumstances be the same institution) to a U.S. participant (a "U.S.
Participant") related to the Canadian Participant of an amount which has the
same proportion to the related U.S. Lender's Commitment as the amount
sub-participated by the Canadian Lender has to the Canadian
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Lender's Commitment, and vice versa in the case of sub-participation by a U.S.
Lender. For greater certainty, the Borrowers shall not be obligated to pay, in
respect of any rights, benefits and/or obligations in which a Lender has granted
one or more such sub-participations, to such Lender or to any sub-participant
thereof any amount(s) pursuant to Article VII of this Agreement which is (are)
greater than the amount(s), if any, which the Borrowers would otherwise have
been obligated to pay in respect of such rights, benefits and/or obligations to
such Lender, had such sub-participation(s) not been granted.
14.7 DISCLOSURE
Each Lender is hereby authorized by the Borrowers and each Unlimited
Guarantor to disclose to any proposed assignee, Transferee or sub-participant
information in such Lender's possession relating to the Borrowers and each
Unlimited Guarantor provided that such proposed assignee, transferee or
sub-participant shall have executed and delivered to such Lender a written
undertaking to keep confidential any such information which is not publicly
available.
14.8 ASSIGNMENT TO FEDERAL RESERVE BANK
Notwithstanding anything to the contrary provided herein, without
seeking or obtaining the consent of any party, any U.S. Lender may at any time
assign and transfer all or any portion of its rights under this Agreement and
any promissory notes issued to such U.S. Lender hereunder to a Federal Reserve
Bank in the United States. No such assignment shall release such Lender from its
obligations hereunder.
ARTICLE XV
GOVERNING LAW, COURTS AND JUDGMENT CURRENCY
15.1 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
15.2 COURTS
Any legal action or proceeding with respect to this Agreement or any
Security against a Borrower or the Unlimited Guarantor may be brought in the
courts of the Province of Ontario, which courts the parties hereto acknowledge
irrevocably to be a convenient forum for the resolution of any such legal action
or proceeding. Each Borrower and each Unlimited Guarantor hereby accepts, for
itself and in respect of its assets and revenues, generally and unconditionally
the non-exclusive jurisdiction of the aforesaid courts.
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Each Unlimited Guarantor and each of the U.S. Borrowers hereby
irrevocably designates and appoints the Canadian Borrower (the "Process Agent")
at its registered office from time to time and of which the Canadian
Administrative Agent shall have been notified, which office is currently located
at 0000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx, X0X 0X0, as the authorized
agent of each of the U.S. Borrowers and each Unlimited Guarantor upon which
process may be served in any suit or proceeding arising out of or in connection
with this Agreement or any Security or other documents relating hereto or
thereto which may be instituted in the Province of Ontario and agrees that
service of process on the Process Agent together with written notice of such
service to such U.S. Borrower or such Unlimited Guarantor by the Person serving
the same shall, to the extent permitted by law, be deemed in every respect to be
effective service of process on such U.S. Borrower or such Unlimited Guarantor,
as the case may be. Notwithstanding the address noted on the execution pages
hereof, process may be served on a Borrower at its registered office. However,
nothing in this Section 15.2 shall affect the right of any Agent or Lender to
serve legal process in any other manner permitted by law or affect the right of
any Agent or Lender to bring any action or proceeding against a Borrower or the
Unlimited Guarantor or their properties in the courts of any other jurisdiction
including, without limitation the State of New York.
15.3 JUDGMENT CURRENCY
(a) If for the purpose of obtaining judgment in any court it is
necessary to convert an amount due hereunder in the currency
in which it is due (the "Original Currency") into another
currency (the "Second Currency"), the rate of exchange applied
shall be that at which, in accordance with normal banking
procedures, a Lender could purchase, in the Toronto foreign
exchange market, the Original Currency with the Second
Currency on the date 2 Business Days preceding that on which
judgment is given. Each Borrower and each Unlimited Guarantor
agrees that its obligation in respect of any Original Currency
due from it to any Lender hereunder shall, notwithstanding any
judgment or payment in such other currency, be discharged only
to the extent that, on the Business Day following the date
such Lender receives payment of any sum so adjudged to be due
hereunder in the Second Currency such Lender may, in
accordance with normal banking procedures, purchase, in the
Toronto foreign exchange market the Original Currency with the
amount of the Second Currency so paid; and if the amount of
the Original Currency so purchased or could have been so
purchased is less than the amount originally due in the
Original Currency, each Borrower and each Unlimited Guarantor
agrees as a separate obligation and notwithstanding any such
payment or judgment to indemnify such Lender against such
loss.
(b) The term "rate of exchange" in this Section 15.3 means the
spot rate at which the Lender in accordance with normal
practices is able on the relevant date to purchase the
Original Currency with the Second Currency and includes any
premium and costs of exchange payable in connection with such
purchase.
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ARTICLE XVI
GUARANTORS' OBLIGATIONS
16.1 GUARANTEE
(a) The Canadian Borrower, as primary obligor and not as a surety
merely, hereby unconditionally and irrevocably guarantees to
each of the Agents and each of the Lenders the punctual
payment when due in accordance with the terms hereof of all
obligations, of whatever kind and description, of the U.S.
Borrowers and each of them to the Agents and each of the
Lenders now or hereafter existing, whether direct or indirect,
absolute or contingent, matured or unmatured, secured or
unsecured joint, several or independent pursuant to or arising
out of or under this Agreement and the Security (all such
obligations so guaranteed are referred to herein as the
"Canadian Borrower's Guaranteed Obligations").
(b) The Unlimited Guarantor hereby:
(i) unconditionally and irrevocably guarantees; and
(ii) is jointly and severally liable and obligated with
the Canadian Borrower to each of the Agents and the
Lenders for;
(A) the due and punctual payment of amounts of
principal, interest or fees in respect of
all Borrowings and all other amounts payable
to the Agents or the Lenders by the Canadian
Borrower under this Agreement, or any
portion thereof; and
(B) all other obligations of the Canadian
Borrower to the Agents or the Lenders under
this Agreement
(collectively the "Unlimited Guarantor's Guaranteed Obligations").
(c) Without in any way limiting the foregoing, each of the
Canadian Borrower and the Unlimited Guarantor hereby
unconditionally and irrevocably agrees and covenants with the
Agents and the Lenders that:
(i) the Guaranteed Obligations shall be a guarantee of
payment and not merely of collection and shall be a
primary obligation of each of the Canadian Borrower
and the Unlimited Guarantor.
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(ii) it will pay duly and punctually all its Guaranteed
Obligations under the terms of this Agreement;
(iii) its Guaranteed Obligations shall not be affected by
any act, omission or circumstances which but for this
provision might operate to release or otherwise
exonerate it from such Guaranteed Obligations or
limit or reduce or otherwise affect such Guaranteed
Obligations including without limitation and whether
or not known to it or the Lenders, or an Agent or the
Lead Arranger:
(A) any time or indulgence granted to or
composition with any Borrower or any other
Person;
(B) the variation, extension, compromise,
renewal or release of, or refusal or neglect
to perfect or enforce, any terms of this
Agreement, the Borrowings, the Security or
any rights or remedies against, or security
granted by, any Borrower or any other
Person; or
(C) any irregularity or unenforceability of any
obligations of any Borrower or any other
Person under this Agreement, the Borrowings,
any Guaranteed Obligations or any present or
future law or order of any government or
authority (whether of right or in fact)
purporting to reduce or otherwise affect any
of such obligations, it being the intent
that its Guaranteed Obligations under this
Agreement shall remain in full force and
this Agreement shall be construed
accordingly as if there were no such
irregularity, unenforceability, law or
order;
(iv) it waives any right it may have of first requiring
any Agent or any Lender, before enforcing its rights
against it, to proceed against or claim payment from
a Borrower or any other Person or enforce any
Security; and
(v) if any claim is made by an Agent or any Lender
against it under this Agreement and is not entirely
and irrevocably paid and discharged, it shall not
have the right to rank as a creditor in competition
with any Agent or any Lender in the bankruptcy,
liquidation or dissolution of a Borrower and shall
not attempt to do so until payment in full of all
indebtedness and liabilities which may be owing by
such Borrower to any Agent or Lender under this
Agreement and all Borrowings.
(vi) The Guaranteed Obligations shall survive the
repayment thereof and shall be reinstated as to any
Guaranteed Obligations incurred prior to the
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termination hereof if any payment of any Guaranteed
Obligation is at any time rescinded or must otherwise
be returned as a result of the bankruptcy, insolvency
or reorganization of any of the U.S. Borrowers,
Canadian Borrower and/or the Unlimited Guarantor, all
as though such payment had not been made.
ARTICLE XVII
MISCELLANEOUS
17.1 EQUAL RANKING OF LENDERS
The Lenders, and to the extent necessary the Borrowers, agree that any
indebtedness of a Borrower towards any of the Agents and any of the Lenders:
(a) hereunder; and
(b) under Hedging Agreements,
shall be secured by the Security and shall be recoverable by the Agents
in accordance with the terms of this Agreement and the Security and all
such obligations shall rank equally without preference or distinction
with the indebtedness of a Borrower towards any Lender hereunder or
under any Hedging Agreements.
17.2 SHARING OF INFORMATION
Each Borrower and the Unlimited Guarantor agree that the Agents and the
Lenders may share amongst themselves any information which any of them may
possess concerning any Borrower or the Unlimited Guarantor, as the case may be,
in respect of a Borrower's or the Unlimited Guarantor's undertakings,
obligations or indebtedness towards any Lender pursuant to this Agreement as
well as any payment received from a Borrower or the Unlimited Guarantor by any
Lender pursuant to this Agreement.
17.3 SEVERABILITY
If any of the provisions of this Agreement, any Article, any Section or
any Bankers' Acceptance shall be unenforceable or invalid in any jurisdiction,
the validity and enforceability of such provisions in any other jurisdiction
shall not be impaired thereby nor shall the enforceability and validity of any
other provisions of this Agreement, any Article, any Section or any Bankers'
Acceptance be impaired thereby.
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17.4 REMEDIES AND WAIVERS
No failure to exercise, and no delay in exercising, on the part of the
Agents or the Lenders or any of them, any right or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right or remedy prevent any further or other exercise thereof or the exercise of
any other right or remedy. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
17.5 DIRECT OBLIGATION
Notwithstanding any other provision hereof, the Borrowers shall be
obligated directly towards the Agents and each of the Lenders in respect of the
Participation of each of the Lenders which are made available to such Borrower
as well as any other amounts which may be payable by the Borrowers pursuant to
or in connection with this Agreement or any Borrowings. The obligations of each
of the Lenders are independent from one another, are not joint and several, and
may not be increased, reduced, extinguished or otherwise affected due to the
default of another Lender pursuant hereto. Any default of any party hereto in
the performance of its obligations shall not release any of the other parties
hereto from the performance of any of its respective obligations.
17.6 NOTICES
The following provisions shall govern in respect of notices or
communications contemplated hereunder:
(a) unless otherwise stated, each communication to be made
hereunder shall be made in writing;
(b) all communications or notices to be made to:
(i) any Borrower, shall be made to the Canadian Borrower,
as provided in Section 17.6 (c); and
(ii) an Unlimited Guarantor, shall be made to such
Unlimited Guarantor with a copy to the Canadian
Borrower, as provided in Section 17.6 (c);
(c) subject to Section 17.6 (b) and to an Agent's irrevocable
right to deliver communications or notices to the Canadian
Borrower's address specified in Section 15.2, any written
communication or document to be made or delivered by one party
to another pursuant to this Agreement shall (unless otherwise
specified herein or that other party has by notice to the
Agent specified another address or facsimile number) be made
or delivered to that other Person at the address or facsimile
number identified with its signature below and shall in any
event be
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deemed to have been made or delivered or (in the case of any
other form of written communication) when left at that address
or otherwise received or, as the case may be, 10 days after
being deposited in the post first class postage prepaid in an
envelope addressed to it at that address, provided that any
communication or document to be made or delivered to any Agent
shall be effective only when received by such Agent; it is
agreed that parties shall not send communications by mail or
postal service when there is an actual or likely pending
strike or similar disruption of mail or postal services;
(d) subject to Section 17.6 (b), where any provision of this
Agreement specifically contemplates telephone communication,
such communication shall (unless otherwise specified herein or
that other party has by written notice to the Agents specified
another telephone number) be made to that other party at the
telephone number identified with its signature below; each
such telephone communication shall be expressed to be for the
attention of the officer whose name has been identified with
its signature below; and
(e) each party hereto shall confirm promptly by writing any
telephone communication made by it to another party pursuant
to this Agreement, however the absence of such confirmation
shall not affect the validity of such communication.
17.7 COUNTERPARTS
This Agreement may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument.
17.8 LIMIT ON RATE OF INTEREST
(a) Notwithstanding any provision contained in this Agreement, the
Borrowers shall not be obliged to make any payments of
interest or other amounts payable to a Lender hereunder in
excess of the amount or rate which would be prohibited by
applicable law or would result in the receipt by a Lender of
interest at a criminal rate (as such terms are construed under
the Criminal Code (Canada) or other applicable law).
(b) In the event that any such payments are limited or prohibited
as provided in Section 17.8 (a), the Lenders shall have no
further obligation to make any Borrowings available hereunder
and the entire amount of Borrowings then outstanding shall
become immediately due and payable.
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17.9 NO MERGER OR NOVATION
All guarantees and Security provided to an Agent and/or the Lenders
prior to the date hereof in connection with the Original Credit Agreement, the
First Amended and Restated Credit Agreement or the indebtedness of the Canadian
Borrower thereunder remain in full force and effect, there being no novation or
merger of the Original Credit Agreement, the First Amended and Restated Credit
Agreement, such guarantees or the Security.
AS WITNESS the hands of the duly authorized representatives of
the parties hereto on the execution pages hereof as of the day and year first
before written.
