CREDIT AGREEMENT Made as of November 6, 2008 Among MANULIFE FINANCIAL CORPORATION as Borrower and BANK OF MONTREAL, CANADIAN IMPERIAL BANK OF COMMERCE, NATIONAL BANK OF CANADA, ROYAL BANK OF CANADA, THE BANK OF NOVA SCOTIA AND THE TORONTO-DOMINION...
EXECUTION
COPY
Made as
of November 6, 2008
Among
MANULIFE FINANCIAL CORPORATION
as
Borrower
and
BANK
OF MONTREAL, CANADIAN IMPERIAL BANK OF COMMERCE, NATIONAL BANK OF CANADA, ROYAL
BANK OF CANADA,
THE
BANK OF NOVA SCOTIA AND THE TORONTO-DOMINION BANK
and
Each of the Financial Institutions and Other Entities
From
Time to Time Parties Hereto
as
Lenders
TABLE
OF CONTENTS
DEFINITIONS
|
1
|
|
1.1
|
Defined
Terms
|
1
|
1.2
|
Other
Definitional Provisions
|
14
|
SECTION 2
–
|
THE
CREDIT FACILITY
|
15
|
2.1
|
Establishment
of Credit Facility
|
15
|
2.2
|
Purpose
of Credit Facility
|
16
|
SECTION 3
–
|
LOANS
|
16
|
3.1
|
Procedure
for Prime Rate Loan Borrowing
|
16
|
3.2
|
Bankers’
Acceptances
|
16
|
3.3
|
Conversion
Option
|
19
|
3.4
|
Acceptance
Notes
|
20
|
SECTION 4
-
|
GENERAL
PROVISIONS
|
20
|
4.1
|
Fees
|
20
|
4.2
|
Repayment
of Loans; Evidence of Debt
|
20
|
4.3
|
Optional
and Mandatory Prepayments
|
21
|
4.4
|
Interest
Rates and Payment Dates
|
22
|
4.5
|
Computation
of Interest and Fees
|
23
|
4.6
|
Pro
Rata Treatment and Payments
|
24
|
4.7
|
Yield
Protection
|
24
|
4.8
|
Taxes
|
25
|
4.9
|
Mitigation
Obligations; Replacement of Lenders
|
26
|
4.10
|
Illegality
|
27
|
4.11
|
Inability
to Determine Rates etc.
|
28
|
SECTION 5
-
|
REPRESENTATIONS
AND WARRANTIES
|
28
|
5.1
|
Financial
Condition
|
28
|
5.2
|
No
Change
|
29
|
5.3
|
Ratings
|
29
|
5.4
|
Regulatory
Compliance
|
29
|
5.5
|
Corporate
Existence
|
29
|
5.6
|
Corporate
Power; Authorization; Enforceable Obligations
|
30
|
5.7
|
No
Material Litigation
|
30
|
5.8
|
Compliance
with Laws and Contracts; NAIC Tests
|
30
|
5.9
|
Securities
Laws
|
31
|
5.10
|
No
Default
|
31
|
5.11
|
Ownership
of Property; Liens
|
32
|
5.12
|
Taxes
|
32
|
5.13
|
Accuracy
of Information
|
32
|
5.14
|
Subsidiaries
|
32
|
5.15
|
ERISA
|
32
|
5.16
|
Canadian
Pension Compliance
|
33
|
5.17
|
Foreign
Pension Compliance
|
34
|
5.18
|
Ranking
|
34
|
5.19
|
Anti-Money
Laundering/Patriot Act
|
34
|
SECTION 6
-
|
CONDITIONS
PRECEDENT
|
34
|
6.1
|
Effectiveness
of Agreement
|
34
|
6.2
|
Conditions
Precedent to all Loans
|
36
|
SECTION 7
-
|
AFFIRMATIVE
COVENANTS
|
37
|
7.1
|
Financial
Statements
|
37
|
7.2
|
Certificates;
Other Information
|
38
|
7.3
|
Notices
|
39
|
7.4
|
Payment
of Taxes
|
40
|
7.5
|
Conduct
of Business and Maintenance of Existence
|
40
|
SECTION 8
–
|
FINANCIAL
COVENANTS
|
41
|
SECTION 9
-
|
NEGATIVE
COVENANTS
|
42
|
9.1
|
Limitation
on Liens
|
42
|
9.2
|
Limitation
on Sale of Assets, Mergers, etc.
|
43
|
9.3
|
Acquisitions
|
43
|
9.4
|
Continuance
as Company
|
43
|
9.5
|
Distributions
|
44
|
9.6
|
Ratings
Downgrade Transaction
|
44
|
9.7
|
Distribution
|
44
|
SECTION 10
-
|
EVENTS
OF DEFAULT
|
44
|
SECTION 11
-
|
THE
LENDERS
|
46
|
11.1
|
Lenders
Bound by Decision to Exercise Remedies
|
46
|
11.2
|
Acknowledgement
of Lenders
|
46
|
11.3
|
Relations
with the Borrower
|
47
|
11.4
|
Copy
of Notice
|
47
|
11.5
|
Amendments,
Waivers, etc.
|
47
|
11.6
|
No
Partnership
|
48
|
11.7
|
Adjustments
Among Lenders
|
48
|
11.8
|
Lenders
May Debit Accounts
|
49
|
SECTION 12
-
|
MISCELLANEOUS
|
49
|
12.1
|
Notices;
Effectiveness; Electronic Communications
|
49
|
12.2
|
No
Waiver; Cumulative Remedies
|
50
|
12.3
|
Survival
of Representations and Warranties
|
51
|
12.4
|
Expenses;
Indemnity; Damage Waiver
|
51
|
12.5
|
Successors
and Assigns
|
52
|
12.6
|
Right
of Set-off
|
54
|
12.7
|
Sharing
of Payment by Lenders
|
55
|
12.8
|
Counterparts;
Integration; Effectiveness; Electronic Execution
|
55
|
12.9
|
Severability
|
56
|
12.10
|
Entire
Agreement
|
56
|
12.11
|
Governing
Law
|
56
|
12.12
|
Acknowledgements
|
56
|
12.13
|
Treatment
of Certain Information; Confidentiality
|
57
|
Schedule
1.1(2) – Acceptance Note
Schedule
1.1(8) – Applicable Margin
Schedule
1.1(29) – Commitment
Schedule
0 – Rollover Notice
Schedule
0 – Conversion Notice
Schedule
0 – Lender Payment Information
Schedule
5.14 – Subsidiaries
Schedule
7.2(a) – Compliance Certificate
Exhibit
A – Assignment and Assumption Agreement
This
Agreement is made as of November 6, 2008, among
as
Borrower
and
BANK
OF MONTREAL, CANADIAN IMPERIAL BANK OF COMMERCE, NATIONAL BANK OF CANADA, ROYAL
BANK OF CANADA, THE BANK OF NOVA SCOTIA AND THE TORONTO-DOMINION
BANK
and
each of the Financial Institutions and Other Entities From Time to Time Parties
Hereto
as
Lenders
RECITALS
A. The
Borrower has requested that the Lenders make the Credit Facility
available.
B. Each
Lender is prepared to make its Commitment available to the Borrower, subject to
the terms and conditions of this Agreement.
FOR THE
VALUE RECEIVED, the parties agree as follows:
SECTION 1 –
DEFINITIONS
1.1 Defined
Terms
The terms
defined below shall have the indicated meanings unless the context expressly
requires otherwise:
(1) Acceptance
Fee means a fee payable by the Borrower in C$ to each Lender with respect
to the acceptance of Bankers’ Acceptances under this Agreement, as computed in
accordance with Section 3.2(4).
(2) Acceptance
Note means a non-interest bearing promissory note denominated in C$
substantially in the form of Schedule 1.1(2) issued
by the Borrower to an Acceptance Note Lender.
(3) Acceptance Note
Lender means a Lender (other than a Schedule I Lender) that cannot or
does not as a matter of policy issue bankers’ acceptances.
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(4) Affiliate
means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by
or is under common Control with the Person specified.
(5) Agreement
means this Credit Agreement, including the Schedules hereto as amended, varied,
supplemented, restated, received, replaced or otherwise modified from time to
time.
(6) Applicable BA
Discount Rate means, on any day, with respect to an issue of Bankers’
Acceptances with the same maturity date,
|
(a)
|
for
a Lender which is a Schedule I Lender, CDOR Rate;
and
|
|
(b)
|
for
an Acceptance Note Lender, the lesser of (i) the arithmetic average of the
actual discount rates for Bankers’ Acceptances for such term accepted by
the Schedule II Reference Lenders and (ii) the rate determined pursuant to
clause (a) of this definition in connection
with the relevant issuance of Bankers’ Acceptances plus 20 basis points
per annum.
|
(7) Applicable
Law means (i) any domestic or foreign statute, law (including common
and civil law), treaty, code, ordinance, rule, regulation, restriction or by-law
(zoning or otherwise); (ii) any judgement, order, writ, injunction,
decision, ruling, decree or award; (iii) any regulatory policy, practice,
guideline or directive including and without limitation any insurance or banking
law; or (iv) any franchise, licence, qualification, authorization, consent,
exemption, waiver, right, permit or other approval of any Governmental
Authority, binding on, applicable to or affecting the Person referred to in the
context in which the term is used or binding on, applicable to or affecting the
property of such Person, in each case whether or not having the force of
law.
(8) Applicable
Margin means, with respect to Prime Loans and Acceptance Fees, as
applicable, the percentages as set out in Schedule 1.1(8).
(9) Approved Fund
means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity
that administers or manages a Lender.
(10) Assignee
has the meaning given to it in Section 12.5(3).
(11) Assignment and
Assumption means an assignment and assumption entered into by a Lender
and an Eligible Assignee, in substantially the form of Exhibit A or any other
form approved by the Required Lenders.
(12) Availability
Period has
the meaning given to it in Section 2.1.
(13) BA Discount
Proceeds means in respect of any Bankers’ Acceptance issued hereunder on
any day, an amount (rounded to the nearest whole Canadian cent, and with
one-half of one Canadian cent being rounded up) calculated on such day by
multiplying:
|
(a)
|
the
face amount of such Bankers’
Acceptance
|
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|
|
by
|
|
(b)
|
the
quotient obtained by dividing (1) one by (2) the sum of one plus the
product of:
|
|
(i)
|
the
Applicable BA Discount Rate applicable to the Bankers’
Acceptance
|
and
|
(ii)
|
a
fraction, the numerator of which is the applicable term of the Bankers’
Acceptance and the denominator of which is
365
|
with the
quotient being rounded up or down to the fifth decimal place and .000005 being
rounded up.
(14) Bankers’
Acceptance and B/A each
means a xxxx of exchange, including a depository xxxx issued in accordance with
the Depository Bills and Notes
Act (Canada), denominated in C$, drawn by the Borrower and accepted by a
Lender; provided that, to the extent the context shall require, each Acceptance
Note shall be deemed to be a Bankers’ Acceptance.
(15) Borrower
means Manulife Financial Corporation, a corporation formed under the laws
of Canada and its successors.
(16) Borrowing
Date means any Business Day on which a Loan is made or is deemed to be
made hereunder.
(17) Business
Day means a day on which banks are open for business in Xxxxxxx, Xxxxxxx,
excluding Saturday, Sunday and any other day which is a statutory holiday in
Xxxxxxx, Xxxxxxx.
(18) C$ Equivalent
means on any date of determination, with respect to any amount in US$,
the equivalent in C$ of such amount, determined by a Lender using the US$
Exchange Rate then in effect.
(19) Canadian
Anti-Terrorism Laws means the Criminal Code (Canada)
(insofar as it relates to anti-terrorism), the Proceeds of Crime (Money Laundering)
and Terrorist Financing Act (Canada), the United Nations Suppression of
Terrorism Regulations and the Anti-terrorism Act (Canada)
and all regulations and orders made thereunder.
(20) Canadian Benefit
Plans means any plan, fund, program, or policy, whether oral or written,
formal or informal, funded or unfunded, insured or uninsured, providing employee
benefits, including medical, hospital care, dental, sickness, accident,
disability, life insurance, pension, retirement or savings benefits, under which
the Borrower or any of its Subsidiaries has any liability with respect to any
employee or former employee, but excluding any Canadian Pension
Plans.
(21) Canadian Dollars
and the symbol C$ each
means lawful money of Canada.
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(22) Canadian Pension
Plan Event means (a) either (i) the termination in whole or in part of a
Canadian Pension Plan or (ii) the cessation of participation of the Borrower or
any of its Material Subsidiaries (or any affiliate or other related party
thereto with whom there is statutory joint and several liability under pension
standards legislation) in any Canadian Pension Plan, including a multi-employer
pension plan (within the meaning of applicable pension standards legislation),
for any reason and which event gives rise or might give rise to an obligation on
such entity to make contributions in respect of any past service unfunded
liability of such plan, (b) the issuance of a notice (or a notice of intent to
issue such a notice) to terminate in whole or in part any Canadian Pension Plan
with a defined benefit provision or the receipt of a notice of intent from a
Governmental Authority to require the termination in whole or in part of any
Canadian Pension Plan, revoking the registration of same or appointing a new
administrator of such a plan, (c) an event or condition which constitutes
grounds under applicable pension standards or tax legislation for the issuance
of an order, direction or other communication from any Governmental Authority or
a notice of an intent to issue such an order, direction or other communication
requiring the Borrower or any affiliate to take or refrain from taking any
action in respect of a Canadian Pension Plan, (d) the issuance of either any
order (including an order to remit delinquent contributions to the Pension
Benefits Guarantee Fund of Ontario (the “PBGF”)) or charges which may
give rise to the imposition of any fines or penalties to or in respect of any
Canadian Pension Plan or the issuance of such fines or penalties, or
(e) the receipt of any notice from an administrator, a trustee or other
funding agent or any other person or entity that the Borrower or any of its
Material Subsidiaries or any affiliate thereof has failed to remit any
contribution to a Canadian Pension Plan or a similar notice from a Governmental
Authority relating to a failure to pay any fees or other amounts (including
payments in respect of the PBGF).
(23) Canadian Pension
Plans means each pension plan required to be registered under Canadian
federal or provincial law that is maintained or contributed to by any Credit
Party for its employees or former employees, but does not include the Canada
Pension Plan or the Quebec Pension Plan as maintained by the Government of
Canada or the Province of Quebec, respectively.
(24) Capital
Stock means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants or options to purchase any of the foregoing.
(25) CDOR Rate
means, on any date, the annual rate of interest which is the arithmetic average
of the rates applicable to Canadian Dollar bankers’ acceptances having the
appropriate term identified as such on the Reuters Screen CDOR Page at
approximately 10:00 A.M., Local Time, on such day (as adjusted by the
Lender after 10:00 A.M., Local Time, to reflect any error in any posted rate or
in the posted average annual rate). If the rate does not appear on
the Reuters Screen CDOR Page as contemplated above, then the CDOR Rate on any
day shall be calculated as the arithmetic average of the discount rates
applicable to Canadian Dollar bankers’ acceptances having the applicable term
of, and as quoted by, the Schedule I Reference Lenders, who accept Bankers’
Acceptances, as of 10:00 A.M., Local Time, on the day, or if the day is not
a Business Day, then on the immediately preceding Business Day.
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(26) Change in Law
means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any Applicable Law,
(b) any change in any Applicable Law or in the administration,
interpretation or application thereof by any Governmental Authority or
(c) the making or issuance of any Applicable Law by any Governmental
Authority.
(27) Change of
Control means, if the Minister of Finance exercises its discretion to
allow a person to acquire “control” of the Borrower within the meaning of
section 3(1) of the ICA (as in effect on the Closing Date), or such act is
amended such that no such ministerial exercise of discretion is required in such
circumstances, and in either such case, a Person acquires control of the
Borrower within the meaning of section 3(1) of the ICA (as in effect on the
Closing Date) without consent of each of the Lenders.
(28) Closing
Date means November 6, 2008.
(29) Commitment
means as to any Lender and the several obligation of such Lender to make
Loans to the Borrower hereunder in an amount not to exceed the amount
set forth opposite such Lender’s name on Schedule 1.1(29) (or, if applicable, in the relevant Assignment
and Acceptance).
(30) Commonly
Controlled Entity means an entity, whether or not incorporated, which is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group which includes the Borrower and which is treated as
a single employer under Section 414 of the Internal Revenue Code of the United
States.
(31) Company Action
Level RBC means the so named risk based capital standard established by
the NAIC.
(32) Confidential
Information means with respect to any Lender having notice thereof, any
information delivered to such Lender (or to counsel to the Lenders at the date
hereof) by the Borrower or any of its Subsidiaries or their respective advisors
or independent accountants pursuant to or in connection with this Agreement
other than information (a) that was publicly known, or otherwise already
known to such Lender, at the time of disclosure, or (b) that subsequently
becomes publicly known through no act or omission of such Lender including
without limitation the Confidential Information as defined in the Non-Disclosure
Agreements.
(33) Consolidated
Funded Debt means the aggregate of long term senior and subordinated debt
(except for debt raised for operational leverage as recognized by S&P),
trust preferred securities issued by the Borrower’s Subsidiaries, innovative
Tier 1 capital instruments, preferred shares (except for non cumulative
preferred shares of the Borrower which may be redeemed only at the Borrower’s
option), all as reported and included in the consolidated financial statements
of the Borrower.
(34) Contractual
Obligation means as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is
bound.
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6 -
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(35) Control
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise. Controlling
and Controlled
have corresponding meanings.
(36) Credit
Facility has the meaning given to it in Section 2.1.
(37) DBRS means
DBRS Limited.
(38) Default
means any event or condition that constitutes an Event of Default or that would
constitute an Event of Default except for satisfaction of any condition
subsequent required to make the event or condition an Event of Default,
including giving of any notice, passage of time, or both.
(39) Drafts has
the meaning given to it in Section 3.2(2)(e).
(40) Eligible Assignee
means a Lender, an Affiliate of a Lender or an Approved Fund in respect
of a Lender, or any other Person, in respect of which any consent that is
required by Section 12.5(2)(c) has been obtained or
for which consent is not required under Section 12.5(2)(c) but, not, in any event including a natural
person, the Borrower or any Affiliate of the Borrower.
(41) ERISA
means the Employee Retirement
Income Security Act of 1974 of the United States, as amended from time to
time.
(42) Event of
Default means any of the events specified in Section 10.
(43) Excluded
Taxes means, with respect to any Lender or any other recipient of any
payment to be made by or on account of any obligation of the Borrower hereunder,
(a) taxes imposed on or measured by its net income, and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes or any similar tax imposed by any jurisdiction in which the Lender
is located and (c) in the case of a Foreign Lender (other than (i) an
assignee pursuant to a request by the Borrower under Section 4.9(2), (ii) an assignee pursuant to an
Assignment and Assumption made when an Event of Default has occurred and is
continuing or (iii) any other assignee to the extent that the Borrower has
expressly agreed that any withholding tax shall be an Indemnified Tax), any
withholding tax that (A) is not imposed or assessed in respect of a Loan
that was made on the premise that an exemption from such withholding tax would
be available where the exemption is subsequently determined, or alleged by a
taxing authority, not to be available and (B) is required by Applicable Law
to be withheld or paid in respect of any amount payable hereunder or under any
Loan Document to such Foreign Lender at the time such Foreign Lender becomes a
party hereto (or designates a new lending office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in
Law) to comply with Section 4.8(5), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such
withholding
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tax
pursuant to Section 4.8(1). For greater
certainty, for purposes of item (c) above, a withholding tax includes any Tax
that a Foreign Lender is required to pay pursuant to Part XIII of the Income Tax Act (Canada) or
any successor provision thereto.
(44) Fee Agreement
means the fee agreement dated the date hereof entered into between the
Borrower and the Lenders in relation to the fees payable under this
Agreement.
(45) Financial
Statements has the meaning given to it in Section 5.1.
(46) Financing
Lease means any lease of property, real or personal, the obligations of
the lessee in respect of which are required in accordance with GAAP to be
capitalized on a balance sheet of the lessee.
(47) Foreign
Lender means any Lender that is not organized under the laws of the
jurisdiction in which the Borrower is resident for tax purposes and that is not
otherwise considered or deemed in respect of any amount payable to it hereunder
or under any Loan Document to be resident for income tax or withholding tax
purposes in the jurisdiction in which the Borrower is resident for tax purposes
by application of the laws of that jurisdiction. For purposes of this definition
Canada and each Province and Territory thereof shall be deemed to constitute a
single jurisdiction and the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single
jurisdiction.
(48) Fund means
any Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.
(49) GAAP means
generally accepted accounting principles in effect from time to time in Canada
applied in a consistent manner from period to period including, without
limitation, the accounting recommendations published in the Handbook of the
Canadian Institute of Chartered Accountants, as modified by OSFI
requirements.
(50) Governmental
Authority means the government of Canada or any other nation, or of any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, including any
supra-national bodies such as the European Union or the European Central Bank
and including a Minister of the Crown, Superintendent of Financial Institutions
or other comparable authority or agency.
(51) Guarantee
Obligation means as to any Person (the “guaranteeing person”),
(a) any obligation of the guaranteeing person or (b) any obligation of
another Person (including, without limitation, any bank under any letter of
credit) incurred as a result, in whole or in part, of the guaranteeing person
having issued a reimbursement, counterindemnity or similar financial obligation,
in either case guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the “primary obligations”) of any
third Person (the “Primary
obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such
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primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made, (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith and (c) the greater of the amount of such obligation as determined in
accordance with GAAP and the accounting requirements of OSFI; provided that, in
each case, the amount of any Guarantee Obligation shall be limited to the
maximum amount permitted by applicable law.
(52) ICA means
the Insurance Companies Act
(Canada) as amended from time to time.
(53) Implied
Rating means the rating by Xxxxx’x of the senior unsecured debt of MLI
adjusted downward two notches.
(54) Indebtedness
means of any Person at any date (determined, in the case of any calculation of
the amount thereof, without duplication), (a) all indebtedness of such Person
for borrowed money and any other indebtedness of such Person which is evidenced
by a note, bond, debenture or similar instrument, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (c) all obligations of such
Person under Financing Leases, (d) all obligations of such Person in respect of
bankers acceptances issued or created for the account of such Person, (e) all
obligations (contingent or otherwise) of such Person as an account party in
respect of outstanding letters of credit (whether or not drawn), provided that
all obligations of such Person as an account party in respect of outstanding
letters of credit (to the extent undrawn) which support ordinary course of
business obligations of such Person shall be excluded from this definition, (f)
all liabilities secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the payment
thereof and (g) all Guarantee Obligations of such Person in respect of any of
the obligations described in clauses (a) through (f) of this
definition.
(55) Indemnified
Taxes means Taxes other than Excluded Taxes.
(56) Insurance
Licences has the meaning given to it in Section 5.8.
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(57) Interest Payment
Date means as to any Prime Rate Loan, the last Business Day of each
calendar month.
(58) IRIS Tests
means the ratios and other financial measurements developed by NAIC under its
Insurance Regulatory Information System or, in lieu thereof, any successor
thereto, replacement thereof, substitute therefor or other system or other
similar guidelines intended to measure the financial performance of companies in
the life and health insurance industry, as the same shall be in effect from time
to time.
(59) ITA means
the Income Tax Act
(Canada) as amended from time to time.
(60) JHLICO
means Xxxx Xxxxxxx Life Insurance Company and its successors.
(61) JHUSA
means Xxxx Xxxxxxx Life Insurance Company (U.S.A.) and its
successors.
(62) Lenders
means, collectively, the financial institutions listed on the signature pages
hereof as Lenders, and any Person who may become a Lender pursuant to the terms
hereof, and their respective successors and permitted assigns, and, in the
singular, any one of them.
(63) Lending
Office means as to each Lender, the office in Canada specified as the
“Lending Office” of such Lender on Schedule 1.1(29)
or in an Assignment and Assumption or such other office in Canada as may be
designated by such Lender by written notice to the Borrower and the other
Lenders.
(64) Lien means
any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement and any Financing Lease); provided that (i) any security interest
securing the obligations of the Borrower or any Subsidiary thereof under an
insurance contract the liabilities in respect of which would in any event rank
prior to the Obligations and (ii) any assets or properties placed in trust or
deposited with governmental regulators or their nominees in the ordinary course
of business as a condition of the Borrower maintaining its necessary licenses
and registrations, shall in each case be excluded from this
definition.
(65) Loan
Documents means this Agreement, the Fee Agreement and any document,
agreement or certificate executed or delivered in connection
herewith.
(66) Loans
means the collective reference to Prime Rate Loans and Bankers’
Acceptances.
(67) Local GAAP
means in respect of a Material Subsidiary not formed under the laws of Canada or
any province or territory thereof, the generally accepted accounting principles
of the jurisdiction in which such Material Subsidiary maintains its books and
records.
(68) Local Time
means Eastern Standard Time or Eastern Daylight Time, as
applicable.
(69) Management Plan
shall have the meaning attributed thereto in the Fee
Agreement.
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(70) Material Adverse
Effect means a material adverse effect on: (a) on the condition,
financial or otherwise, or the results of operations, business affairs or
business prospects of the Borrower and its Subsidiaries taken as a whole,
(b) the ability of the Borrower to perform its obligations under the Loan
Documents or (c) the validity or enforceability of the Loan Documents or
the rights or remedies of the Lenders thereunder.
(71) Material
Subsidiary means at any date, each Subsidiary of the Borrower that has
(determined on a consolidated basis at such Subsidiary) assets or revenues that
is greater than or equal to 2% of the Borrower’s consolidated Total Assets or
revenues, respectively, all as shown on the most recent financial statements of
the Borrower delivered to the Lenders hereunder.
(72) MCCSR Guideline
means the Minimum Continuing Capital and Surplus Requirements for Life
Insurance Companies guideline issued by OSFI, as amended or replaced, from time
to time.
(73) MCCSR Ratio
means the ratio of capital available to capital required, calculated
under the MCCSR Guideline.
(74) MLI means
The Manufacturers Life Insurance Company and its successors.
(75) Moody’s
means Xxxxx’x Investor Services Inc.
(76) Multiemployer
Plan means a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
(77) NAIC means
the National Association of Insurance Commissioners or any successor thereto, or
in lieu thereof, any other association, agency or other organization performing
advisory, coordination or other like functions among insurance departments,
insurance commissions and similar Governmental Authorities of the various states
of the United States toward the promotion of uniformity in the practices of such
Governmental Authorities.
(78) Net Proceeds
means, with respect to any disposition of assets or shares or issuance of
debt or equity, the aggregate fair market value of proceeds of such transaction
(whether such proceeds are in the form of cash or other property or part cash
and part other property) net of (i) reasonable, bona fide direct transaction
costs and expenses incurred in connection with such transaction, including
reasonable legal fees and disbursements, (ii) the customary fees of agents or
brokers payable in connection with such transaction, (iii) sale or other
transaction taxes paid or payable as a result thereof, (iv) holdbacks and
escrowed amounts until actually received, and (v) amounts required to be applied
to repay Indebtedness secured by a Lien on the assets which are the subject of
such disposition.
(79) Non-Disclosure
Agreements means the six confidentiality letter agreements between the
Borrower and each of the Lenders executed in connection herewith prior to the
Closing Date.
(80) Obligations
means with respect to the Borrower, the unpaid principal of and interest on the
Loans made to the Borrower (including, without limitation, interest accruing
after the maturity of such Loans and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower,
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whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding) and all other obligations and liabilities of the Borrower to the
Lenders or to any Lender, whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement or any other Loan Document
made, delivered or given in connection herewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel (including the allocated costs of internal counsel) to the Lenders or to
any Lender that are required to be paid by the Borrower pursuant to this
Agreement) or otherwise.
(81) OSFI means
the Office of the Superintendent of Financial Institutions of
Canada.
(82) Other Taxes
means all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made hereunder or under any other Loan Document or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
(83) Outstanding,
when used with respect to any Loans at any time, refers to the then aggregate
outstanding principal amount thereof.
(84) Participant
has the meaning given to it in Section 12.5.
(85) Patriot Act
has the meaning given to it in Section 5.19.
(86) PBGC means
the Pension Benefit Guaranty Corporation established pursuant to Subtitle A
of Title IV of ERISA.
(87) Permitted
Financings mean (i) Specified Debt; (ii) equity offerings that are
being made for the purpose of making (and concurrent with the completion of) a
Strategic Acquisition; (iii) any financing used either to refinance
existing senior indebtedness maturing within 6 months of the date of such
financing or to replace capital currently existing by way of subordinated debt
with third parties or by way of the outstanding “Manulife Financial Capital
Securities” or “MaCS” so long as such subordinated debt or “MaCS” is in fact
repaid or redeemed, respectively, within 6 months of raising the
replacement capital therefor; (iv) issuing new letters of credit in connection
with implementing the Proceeds Utilization Transactions; and (v) ordinary
course of business operational cash management and funding activities which
include (a) repo transactions, (b) utilizations of existing bank lines and
existing letters of credit, (c) deposit notes issued by Manulife Bank of Canada,
(d) product offerings by way of “Signature Notes” and “Market Valuation
Adjustment” programs and (e) appropriate reinsurance
transactions.
(88) Person
means any natural person, corporation, limited liability company, unlimited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
(89) Plan means
at a particular time, any employee benefit plan which is covered by Title IV of
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such
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plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be)
an “employer” as defined in Section 3(5) of ERISA.
(90) Prime Rate
means, with respect to any Prime Rate Loan, on any date, a rate per annum equal
to the greater of (i) the rate which the Lender quotes, publishes and refers to
as its “prime rate” and which is its reference rate of interest for commercial
loans in C$ in Canada; and (ii) the CDOR Rate for one month B/As plus
1.00.
Any
change in the Prime Rate shall be effective on the date the change becomes
effective generally.
(91) Prime Rate
Loan means a loan which is denominated in Canadian Dollars and in respect
of which the Borrower is obligated to pay interest in accordance with Section 4.4.
(92) Pro Rata
Share means as to any Lender at any time, the percentage which such
Lender’s Commitment then constitutes of the aggregate Commitments, or, at any
time after the Availability Period, the percentage which the Outstanding amount
of such Lender’s Loans then constitutes of the Outstanding amount of the
Loans.
(93) Proceeds
Utilization Transactions has the meaning given to it in the Fee
Agreement.
(94) Reference
Lenders means the collective reference to the Schedule I Reference
Lenders and the Schedule II Reference Lenders.
(95) Refunding
Bankers’ Acceptance shall have the meaning given in Section 3.2(3).
(96) Related Parties
means, with respect to any Person, such Person’s Affiliates and the
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.
(97) Reportable
Event means any of the events set forth in Section 4043 of ERISA, other
than those events as to which the thirty day notice period is waived under
applicable PBGC Regulations.
(98) Required
Lenders means at any date, Lenders holding at least 75% of the aggregate
Commitments, and after the Availability Period, Lenders holding at least 75% of
the Outstanding amount of the Loans.
(99) Responsible
Officer means, with respect to any Person, any of the chief financial
officer, chief investment officer, treasurer or general counsel of the Borrower
or such other officer as approved by the Lenders.
(100) Reuters Screen
CDOR Page means the display designated as page CDOR on the Reuters
Monitor Money Rates Service or other page as may, from time to time, replace
that page on that service for the purpose of displaying bid quotations for
bankers’ acceptances accepted by leading Canadian banks.
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(101) S&P
means Standard & Poor’s Rating Services, a division of the
XxXxxx-Xxxx Companies, Inc.
(102) Schedule I
Lender means any Lender named on Schedule I to the Bank Act
(Canada).
(103) Schedule I
Reference Lenders means at least one but no more than two banks named on
Schedule I to the Bank
Act (Canada) as agreed by the Lenders and the Borrower and initially
shall be each Lender party hereto as of the Closing Date.
(104) Schedule II
Reference Lenders means at least one but no more than two banks named on
Schedule II or Schedule III to the Bank Act (Canada) as agreed
by the Lenders on consultation with the Borrower.
(105) Single Employer
Plan means any Plan which is covered by Title IV of ERISA, but which is
not a Multiemployer Plan.
(106) Specified
Debt shall mean Indebtedness that is being incurred for the purpose of
making (and concurrent with the completion of) a Strategic Acquisition provided
all such Specified Debt does not exceed an aggregate principal amount greater
than C$3 billion.
(107) Strategic
Acquisition means the acquisition, whether by way of purchase of equity
or assets of, or by way of amalgamation, merger, plan of arrangement or similar
transaction with, a Person or Persons which conducts business in substantially
the same or similar line of business as is currently conducted by the Borrower
and its Material Subsidiaries for aggregate consideration of C$2 billion or
more.
(108) Subsidiary
means, in relation to any Person, a corporation, partnership or other entity of
which the Voting Capital Stock required to elect a majority of the board of
directors or other equivalent managers of such corporation, partnership or other
entity are at the time owned, directly or indirectly (through one or more
subsidiaries), by such Person (other than an investment fund, as that term is
defined in the Securities Act (Ontario), and an issuer that does invest for the
purpose of exercising effective control, seeking to exercise effective control,
or being actively involved in the management of the issuers in which it invests
and would otherwise be a non-redeemable investment fund, as that term is defined
in the Securities Act (Ontario)). Unless otherwise qualified, all
references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
(109) Taxes
means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.
(110) Termination
Date means the date which is five (5) years after the Closing
Date.
(111) Total Assets
means the consolidated total assets of the Borrower from time to time as
shown on its most recent consolidated balance sheet (excluding, for greater
certainty, segregated funds net assets to the extent included therein), which,
for example, was approximately C$180 billion as of June 30,
2008.
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(112) Total
Capital means the aggregate of long-term senior and subordinated debt
(except for debt raised for operational leverage as recognized by S&P or
Xxxxx’x), non-controlling interest, trust preferred securities issued by
Subsidiaries, innovative Tier 1 capital instruments, preferred shares,
participating policyholders’ equity, common shares, contributed surplus,
retained earnings, and accumulative other comprehensive income (loss), all as
reported and included in the consolidated audited financial statements of the
Borrower.
(113) Total
Commitment means C$3,000,000,000.
(114) Type
means, as to any Loan, its nature as a Prime Rate Loan or a Bankers’
Acceptance.
(115) United
States means the United States of America.
(116) US Dollars and
US$ means dollars in lawful currency of the United States.
(117) US$ Equivalent
means on any date of determination, with respect to any amount in C$, the
equivalent in US$ of such amount, determined by a Lender using the US$ Exchange
Rate then in effect.
(118) US$ Exchange
Rate means on a particular date, the rate at which US$ may be exchanged
into C$, determined by reference to the Bank of Canada noon rate as published on
the Reuters Screen page BOFC on the immediately preceding Business
Day. In the event that such rate does not appear on such Reuters
page, the “US$ Exchange Rate” shall be determined by reference to any other
means (as selected by the Lenders) by which such rate is quoted or published
from time to time by the Bank of Canada (in each case as in effect at or about
12:00 Noon, Local Time, on the Business Day immediately preceding the relevant
date of determination); provide that if at the time of any such determination,
for any reason, no such exchange rate is being quoted or published, the Lenders
may use any reasonable method as each such Lender deems applicable to determine
such rate, and such determination shall be conclusive absent manifest
error.
(119) US
Subsidiary/Branch means any branch or Subsidiary of the Borrower
authorized or organized, as the case may be, under the laws of the United States
or any jurisdiction thereof.
(120) Voting Capital
Stock means securities or other ownership interests of a corporation,
partnership or other entity having by the terms thereof ordinary voting power to
vote in the election of the board of directors or other Persons performing
similar functions of such corporation, partnership or other entity (without
regard to the occurrence of any contingency).
1.2 Other
Definitional Provisions
(1) Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto.
(2) All
accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in accordance with
GAAP. No change in such accounting principles used in the preparation
of any financial statement hereafter adopted by the Borrower
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shall be
given effect for purposes of measuring compliance with any provisions of Section 8(2) unless the Borrower, and the
Required Lenders agree to modify such provisions to reflect such changes in GAAP
and, unless such provisions are modified, all financial statements, compliance
certificates and similar documents provided hereunder shall be provided together
with a reconciliation between the calculations and amounts set forth therein
before and after giving effect to such change in GAAP.
(3) If
there is any conflict between any provision of this Agreement and any provision
of another document contemplated or delivered under or in connection with this
Agreement, the relevant provision of this Agreement is to prevail.
(4) Except
as otherwise expressly provided herein, any amounts denominated in C$ shall be
deemed to equal the US$ Equivalent thereof. In determining any amount
which is comprised of amounts denominated in both US$ and C$, the Lenders shall
convert US$ to C$ or C$ to US$, as applicable, by using the US$ Exchange
Rate.
(5) The
definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine
and neuter forms. The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition
of or reference to any agreement, instrument or other document herein (including this Agreement) shall be construed as referring to
such agreement, instrument or other document as from time to time amended,
supplemented, restated or otherwise modified (subject to any restrictions on
such amendments, supplements, restatements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and permitted
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) any reference to any law or regulation herein
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time and (e ) the words
“asset” and “property” shall be construed
to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities,
accounts and contract rights.
(6) The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.
SECTION 2 –
THE CREDIT FACILITY
2.1 Establishment
of Credit Facility
Subject
to the terms and conditions of this Agreement, the Lenders hereby establish in
favour of the Borrower a committed non-revolving term credit facility (the
“Credit Facility”) in
the amount of the Total Commitment. The Credit Facility is available
by way of loans in the form of Prime Rate Loans and Bankers’ Acceptances of a
period of ten (10) Business Days (“Availability Period”) after
the Closing Date by way of three or more draws with no single draw exceeding C$1
billion. The amount of the Total Commitment not drawn by the end of
the
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Availability
Period shall be cancelled. The amount of any Loan which is repaid may
not be reborrowed.
2.2 Purpose of Credit Facility
The
proceeds of the Loans made under the Credit Facility shall be used by the
Borrower for the sole purpose of funding the Proceeds Utilization
Transactions.
SECTION 3 –
LOANS
3.1 Procedure
for Prime Rate Loan
Borrowing
The
Borrower may borrow Prime Rate Loans provided that the Borrower shall
give the Lenders irrevocable notice (which notice must be received by each
Lender prior to 10:00 A.M., Local Time, on the requested Borrowing Date for
amounts equal to or less than C$10,000,000 per Lender and in all other cases by
12:00 Noon, Local Time, one (1) Business Day prior to the requested Borrowing
Date), specifying (a) the total amount to be borrowed; (b) the pro rata share of
each Lender; and (c) the requested Borrowing Date. Each borrowing of
Prime Rate Loans shall be in an amount equal to C$10,000,000 and in whole
multiples of C$1,000,000 thereafter. Each Lender will make the amount
of its pro rata share of each such borrowing available to the Borrower prior to
12:00 Noon, Local Time, on the Borrowing Date requested by the Borrower in
immediately available funds crediting by wire to the account specified by
Borrower in the draw notice.
3.2 Bankers’
Acceptances
(1) Availability. The
Borrower may issue Bankers’ Acceptances denominated in C$, for acceptance and,
at the Borrower’s option, purchase by the Lenders, each in accordance with the
provisions of this Section 3.2.
(2) Procedures
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(a)
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Notice.
The Borrower shall notify each Lender by irrevocable written notice by
12:00 Noon, Local Time, two (2) Business Days prior to the Borrowing
Date in respect of any borrowing by way of Bankers’ Acceptances including
the aggregate amount of Bankers’ Acceptances, the amount of Bankers’
Acceptances to be accepted by each Lender and the term of such Bankers’
Acceptances.
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(b)
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Minimum
Borrowing Amount. Each borrowing by way of Bankers’ Acceptances
shall be in a minimum aggregate face amount of C$10,000,000 or larger
whole multiples of C$1,000,000 in excess
thereof.
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(c)
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Face
Amounts. The face amount of each Bankers’ Acceptance shall be
C$1,000 or any whole multiple
thereof.
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(d)
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Term.
Bankers’ Acceptances shall be issued and shall mature on a Business Day.
Each Bankers’ Acceptance shall have a term of (i) one month, or
(ii) subject to availability of each Lender, two months or three
months, shall mature on or
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before
the Termination Date and shall be in form and substance reasonably
satisfactory to each Lender.
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(e)
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Bankers’
Acceptances in Blank. To facilitate the acceptance of Bankers’
Acceptances under this Agreement, the Borrower shall, upon becoming a
party hereto and from time to time as required, provide to each Lender
drafts (“Drafts”),
in form satisfactory to such Lender, duly executed and endorsed in blank
by the Borrower, in quantities sufficient for each Lender to fulfil its
obligations hereunder. Each Lender is hereby authorized to
accept such Bankers’ Acceptances endorsed in blank in such face amounts as
may be determined by such Lender provided that the aggregate amount
thereof is equal to the aggregate amount of Bankers’ Acceptances required
to be accepted by such Lender. No Lender shall be responsible
or liable for its failure to accept a Bankers’ Acceptance if the cause of
such failure is, in whole or in part, due to the failure of the Borrower
to provide duly executed and endorsed Drafts to such Lender on a timely
basis, nor shall any Lender be liable for any damage, loss or other claim
arising by reason of any loss or improper use of any such instrument
except loss or improper use arising by reason of the gross negligence or
wilful misconduct of such Lender, its officers, employees, agents or
representatives. Each Lender shall exercise such care in the
custody and safekeeping of Drafts as it would exercise in the custody and
safekeeping of similar property owned by it. Each Lender shall
maintain a record with respect to Bankers’ Acceptances (i) received by it
in blank hereunder, (ii) voided by it for any reason, (iii) accepted by it
hereunder, (iv) purchased by it hereunder and (v) cancelled at their
respective maturities. Each Lender further agrees to retain
such records in the manner and for the statutory periods provided in the
various Canadian provincial or federal statutes and regulations which
apply to such Lender.
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(f)
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Power of
Attorney for the Execution of Bankers’ Acceptances. To facilitate
availment of the Loans by way of Bankers’ Acceptances, the Borrower hereby
appoints each Lender or its agent as its attorney to sign and endorse on
its behalf, in handwriting or by facsimile or mechanical signature as and
when deemed necessary by such Lender, blank forms of Bankers’
Acceptances. In this respect, it is each Lender’s
responsibility to maintain, or cause to be maintained, an adequate supply
of blank forms of Bankers’ Acceptances for acceptance under this
Agreement. The Borrower recognizes and agrees that all Bankers’
Acceptances signed and/or endorsed on its behalf by a Lender or its agent
shall bind the Borrower as fully and effectually as if signed in the
handwriting of and duly issued by the proper signing officers of the
Borrower. Each Lender is hereby authorized to issue, or cause
to be issued, such Bankers’ Acceptances endorsed in blank in such face
amounts as may be determined by such Lender; provided that the aggregate
amount thereof is equal to the aggregate amount of Bankers’ Acceptances
required to be accepted and purchased by such Lender. No Lender
shall be liable for any damage, loss or other claim arising by reason of
any loss or improper use of any such instrument except the gross
negligence or wilful misconduct of the Lenders or its officers, employees,
agents or representatives. Each Lender shall maintain, or cause
to be maintained, a record with respect
to
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Bankers’
Acceptances held by it or its agent in blank hereunder, voided by it for
any reason, accepted and purchased by it hereunder, and cancelled at their
respective maturities. Each Lender agrees to provide such
records to the Borrower at the Borrower’s expense upon
request.
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(g)
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Execution
of Bankers’ Acceptances. Drafts of the Borrower to be accepted as
Bankers’ Acceptances hereunder shall be duly executed on behalf of the
Borrower. Notwithstanding that any Person whose signature
appears on any Bankers’ Acceptance as a signatory for the Borrower may no
longer be an authorized signatory for the Borrower at the date of issuance
of a Bankers’ Acceptance, such signature shall nevertheless be valid and
sufficient for all purposes as if such authority had remained in force at
the time of such issuance, and any such Bankers’ Acceptance so signed
shall be binding on the Borrower.
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(h)
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Acceptance
of Bankers’ Acceptances. Each Bankers’ Acceptance to be
accepted by a Lender shall be accepted at such Lender’s Lending
Office.
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(i)
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Purchase of
Bankers’ Acceptances. If the Borrower shall have specified in its
notice of borrowing by way of Bankers’ Acceptances delivered pursuant to
Section 3.2(2)(a) that it wishes the
borrowing to be made on the related Borrowing Date to be accomplished by
purchases of Bankers’ Acceptances by the Lenders, each Lender shall be
required to purchase (subject to the commercial availability of a resale
market in the case of Bankers’ Acceptances with a term of one month, two
months or three months) from the Borrower on such Borrowing Date, at the
Applicable BA Discount Rate, the Bankers’ Acceptances accepted by it on
such Borrowing Date and to provide to the Borrower the BA Discount
Proceeds thereof not later than 12:00 Noon, Local Time, on such Borrowing
Date for the account of the Borrower. The Acceptance Fee
payable by the Borrower to such Lender under Section 3.2(4) in respect of each Bankers’ Acceptance
accepted and purchased by such Lender from the Borrower shall be set off
against the BA Discount Proceeds payable by such Lender under this Section
3.2(2)(i).
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(j)
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Sale of
Bankers’ Acceptances. Each Lender may at any time and from time to
time hold, sell, rediscount or otherwise dispose of any or all Bankers’
Acceptances accepted and purchased by
it.
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(k)
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Waiver of
Presentment and Other Conditions. The Borrower waives presentment
for payment and any other defense to payment of any amounts due to a
Lender in respect of a Bankers’ Acceptance accepted by it pursuant to this
Agreement which might exist solely by reason of such Bankers’ Acceptance
being held, at the maturity thereof, by such Lender in its own right, and
the Borrower agrees not to claim any days of grace if such Lender as
holder sues the Borrower on the Bankers’ Acceptances for payment of the
amount payable by the Borrower
thereunder.
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(3) Roll Over of
Maturing Bankers’ Acceptances. With respect to each Bankers’
Acceptance, the Borrower shall give irrevocable written notice (in the form of
Schedule 3.2(3) or
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such
other method of notification as may be agreed upon between the Lenders and the
Borrower) to each Lender at or before 12:00 Noon, Local Time, two (2) Business
Days prior to the maturity date of such Bankers’ Acceptance followed by written
confirmation electronically transmitted to each Lender on the same day, of the
Borrower’s intention to issue a Bankers’ Acceptance on such maturity date (a
“Refunding Bankers’
Acceptance”) to provide for the payment of such maturing Bankers’
Acceptance (it being understood that payments by the Borrower and fundings by
the Lenders in respect of each maturing Bankers’ Acceptance and the related
Refunding Bankers’ Acceptance shall be made on a net basis reflecting the
difference between the face amount of such maturing Bankers’ Acceptance and the
BA Discount Proceeds (net of the applicable Acceptance Fee) of such Refunding
Bankers’ Acceptance) provided that if an Event of Default has occurred and is
continuing, Refunding Bankers’ Acceptances may not be issued. Any
repayment of Bankers’ Acceptances must be made at or before 12:00 Noon, Local
Time, on the respective maturity dates of such Bankers’
Acceptances. If the Borrower fails to give such notice, the Borrower
shall be deemed to have requested that such maturing Bankers’ Acceptances be
repaid with the proceeds of Prime Rate Loans (without any requirement
to give notice with respect thereto), commencing on the maturity date of such
maturing Bankers’ Acceptances.
(4) Acceptance
Fees. An Acceptance Fee shall be payable by the Borrower to
each Lender in advance (in the manner specified in Section 3.2(2)(i), as the case may be) upon the issuance of a
Bankers’ Acceptance to be accepted by such Lender calculated at the rate per
annum equal to the Applicable Margin, such Acceptance Fee to be calculated on
the face amount of such Bankers’ Acceptance and to be computed on the basis of
the number of days in the term of such Bankers’ Acceptance.
(5) Cash
Collateral. If at any time a Bankers’ Acceptance is required
to be repaid prior to its maturity for any reason (including as a result of
notice given by the Borrower pursuant to Section 4.3(1)), the Borrower shall deposit cash with each
Lender in an amount equal to the applicable Bankers’ Acceptance issued by such
Lender in an account to be maintained by such Lender (bearing interest at such
Lender’s rates as may be applicable in respect of other deposits of similar
amounts for similar terms), to be held as collateral by the Lenders to be
applied to satisfy the reimbursement obligations of the Borrower upon the
maturity of such Bankers’ Acceptances.
3.3 Conversion Option
Subject
to the provisions of this Agreement, the Borrower may, prior to the Termination
Date, effective on any Business Day, convert, in whole or in part, Prime Rate
Loans into Bankers’ Acceptances or vice versa upon giving to
each Lender prior irrevocable telephone or written notice within the notice
period and in the form which would be required to be given to the Lenders in
respect of the Type of Loan into which the outstanding Loan is to be converted
in accordance with the provisions of Section 3.1 or
3.2, as applicable, followed, in the case of
telephone notice, by written confirmation (in the form of Schedule 3.3) on the same day, provided that:
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(a)
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no
Prime Rate Loan may be converted into a Bankers’ Acceptance when any Event
of Default has occurred and is
continuing;
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(b)
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each
conversion to Bankers’ Acceptances shall be for an aggregate amount of
C$10,000,000 (and whole multiples of C$1,000,000 in excess thereof), and
each conversion to Prime Rate Loans shall be in a minimum aggregate amount
of C$10,000,000; and
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(c)
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Bankers’
Acceptances may be converted only on the maturity date of such Bankers’
Acceptances and, provided that, if less than all Bankers’ Acceptances are
converted, then after such conversion not less than C$10,000,000 (and
whole multiples of C$1,000,000 in excess thereof) shall remain as Bankers’
Acceptances.
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3.4 Acceptance
Notes
(1) Acceptance
Notes. It is understood that from time to time certain Lenders
that are not Schedule I Lenders may not be authorized to or may, as a
matter of general corporate policy, elect not to accept Drafts (each, an “Acceptance Note Lender”);
accordingly, any such Lender may instead purchase Acceptance Notes of the
Borrower in accordance with the provisions of Section 3.4(2) in lieu of creating Bankers’ Acceptances for
its account.
(2) Procedure. In
connection with any request by the Borrower for the creation of Bankers’
Acceptances, the Borrower shall deliver to each Acceptance Note Lender an
Acceptance Note of the Borrower having the same maturity as the Bankers’
Acceptances to be created and in an aggregate principal amount equal to the
aggregate amount of the Bankers’ Acceptances that would otherwise have been
required to be accepted by such Lender. Each such Lender hereby
agrees that, whether or not the other Lenders shall be required pursuant to
Section 3.2(2)(i) to purchase Bankers’
Acceptances on such date, it will purchase Acceptance Notes from the Borrower at
the Applicable BA Discount Rate which would have been applicable if a Draft had
been accepted by it (less any Acceptance Fee which would have been paid pursuant
to Section 3.2(4) if such Lender had created a
Bankers’ Acceptance) and deliver the proceeds thereof to the Borrower no later
than 12:00 Noon, Local Time, on such date of purchase, and such Acceptance Notes
shall be governed by the provisions of this Section as if they were Bankers’
Acceptances.
SECTION 4 -
GENERAL PROVISIONS
4.1 Fees
(1) Upfront
Fee. The Borrower
shall pay the fees as set forth in the Fee Agreement at the times specified
therein.
(2) Payment in
Canadian Dollars. The fees payable in the Fee Agreement shall
be paid in Canadian Dollars by the Borrower to the Lenders.
4.2 Repayment of Loans; Evidence of
Debt
(1) Repayment on the
Termination Date. The Borrower hereby unconditionally promises
to pay to each Lender all outstanding Loans and other Obligations owing to the
Lenders on the Termination Date or, in each case, such earlier date on which the
Loans become due and payable pursuant to Section 10. The Borrower hereby
further agrees to pay interest on the unpaid
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principal
amount of the Loans made to it from time to time outstanding from the date
hereof until payment in full thereof at the rates per annum, and on the dates as
set forth in Section 4.4.
(2) Lender’s Evidence
of Indebtedness. Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of the
Borrower to such Lender resulting from each Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement. The entries made in
the accounts maintained pursuant to this Section 4.2(2) shall, to the extent permitted by Applicable
Law and absent manifest error, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Lender to maintain any such account,
or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Loans made to the Borrower by
such Lender in accordance with the terms of this Agreement.
4.3 Optional and Mandatory Prepayments
(1) Optional
Prepayments. The Borrower may prepay the Loans made to it, in
whole or in part, without premium or penalty, upon at least three (3) Business
Days’ irrevocable notice to the Lenders, specifying the date and amount of
prepayment, the pro rata share of each Lender of such prepayment and the Type of
Loan to be prepaid. If any such notice is given, the amount specified
in such notice shall be due and payable on the date specified therein, together
with accrued interest thereon and any amounts payable pursuant to Section 4.9. Partial prepayments shall be in an
aggregate principal amount of at least C$10,000,000, as the case may
be.
(2) Mandatory
Prepayments.
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(a)
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The
Borrower shall repay Loans under the Credit Facility in an amount equal to
100% of the Net Proceeds received by the Borrower or any of its
Subsidiaries from all capital markets debt and equity offerings (whether
public or private capital markets debt or equity offerings) and all
syndicated bank financings (in each case other than Permitted Financings)
such repayment to be made within two (2) Business Days after receipt
thereof.
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(b)
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The
Borrower shall repay Loans under the Credit Facility in an amount equal to
100% of all Net Proceeds received by the Borrower or any of its
Subsidiaries from each sale of any portion of the Borrower’s consolidated
business (regardless of whether the business is conducted in the Borrower
or in a direct or indirect Subsidiary of the Borrower) that is outside the
ordinary course of business but only where the individual sale or series
of related sales is in excess of C$500,000,000. Such repayment
to be made within two (2) Business Days of receipt of such
proceeds.
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(c)
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The
Borrower shall on April 30, 2009 repay Loans in an amount equal to the
proceeds of the Loans drawn by the Borrower which have not been invested
in MLI by way of regulatory capital on or before such
date.
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4.4
|
Interest
Rates and Payment
Dates
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(1) Prime Rate
Loans. Each Prime Rate Loan shall bear interest at a rate per
annum equal to the Prime Rate plus the Applicable Margin.
(2) Interest on
Overdue Amount. If all or a portion of the Obligations
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at the Prime
Rate plus the Applicable Margin plus 2% until repaid. After an Event
of Default, the Applicable Margin shall, upon written notice by the Lenders to
the Borrower, be increased by 2% until such Event of Default or such increase is
waived in writing.
(3) Payment of
Interest. Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant to Section 4.4(2) shall be payable from time to time on
demand.
(4) Limits on Rate of
Interest. If any provision of this Agreement or any other Loan
Document would obligate the Borrower to make any payment of interest or other
amount payable to any Lender in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt by such Lender of interest at a
criminal rate (as such terms are construed under the Criminal Code (Canada)), then
notwithstanding such provision, such amount or rate shall be deemed to have been
adjusted with retroactive effect to the maximum amount or rate of interest, as
the case may be, as would not be so prohibited by law or so result in a receipt
by such Lender of interest at a criminal rate, such adjustment to be effected,
to the extent necessary, as follows:
(x) firstly,
by reducing the amount or rates of interest required to be paid under this
Section 4.4; and
(y) thereafter,
by reducing any fees, commissions, premiums and other amounts which would
constitute interest for purposes of Section 347 of the Criminal Code
(Canada).
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(a)
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Reimbursement.
If, notwithstanding the provisions of clause (i) of this Section 4.4(4), and after giving effect to all
adjustments contemplated thereby, if any Lender shall have received an
amount in excess of the maximum permitted by such clause, then the
Borrower shall be entitled, by notice in writing to such Lender, to obtain
reimbursement from such Lender of an amount equal to such excess, and,
pending such reimbursement, such amount shall be deemed to be an amount
payable by such Lender to the
Borrower.
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(b)
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Actuarial
Principles. Any amount or rate of interest referred to
in this Section 4.4 shall be determined in
accordance with generally accepted actuarial practices and principles as
an effective annual rate of interest over the term of any Loan on the
assumption that any charges, fees or expenses that fall within the meaning
of “interest” (as defined in the Criminal Code (Canada))
shall, if they relate to a specific period of time, be prorated over that
period of time and otherwise be prorated over the period from the (Closing
Date to the Termination Date and,
in
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the
event of dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries appointed by the Lenders shall be conclusive for the purposes of
such determination absent manifest
error.
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4.5 Computation of Interest and Fees
(1) Computation of
Interest and Fees. Acceptance Fees, interest and other fees
payable hereunder shall be calculated on the basis of a 365- or 366- day year,
as the case may be, for the actual days elapsed.
(2) Change in
Interest Rates. Any change in the interest rate on a Loan
resulting from a change in the Prime Rate shall become effective as of the
opening of business on the day on which such change becomes
effective. Each Lender shall as soon as practicable notify the
Borrower of the effective date and the amount of each such change in interest
rate.
(3) Determination of
Interest Rate by each Lender. Each determination of an
interest rate by each Lender pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower in the absence of manifest
error. Each determination by a Reference Lender of a rate to be
notified to the Lenders pursuant to the definition of “Applicable BA Discount
Rate” or “CDOR Rate” shall be conclusive and binding on the Borrower and the
Lenders in the absence of manifest error. Each Lender shall, at the
request of the Borrower, deliver to the Borrower a statement showing any
quotations given by the relevant Reference Lenders and the computations used by
such Lender in determining any Applicable BA Discount Rate or CDOR
Rate.
(4) Interest
Act. For purposes of the Interest Act (Canada),
whenever any interest or fee under this Agreement is calculated using a rate
based on a number of days less than a full year, such rate determined pursuant
to such calculation, when expressed as an annual rate, is equivalent to (x) the
applicable rate, (y) multiplied by the actual number of days in the calendar
year in which the period for which such interest or fee is payable ends, and (z)
divided by the number of days based on which such rate is calculated. The
principle of deemed reinvestment of interest does not apply to any interest
calculation under this Agreement. The rates of interest stipulated in this
Agreement are intended to be nominal rates and not effective rates or
yields.
(5) Reference
Lenders. If any Reference Lender’s Commitment shall terminate
(otherwise than on termination of all the Commitments) or, as the case may be,
the Loans made by it hereunder are assigned, or prepaid or repaid (otherwise
than on the prepayment or repayment of the Loans among the Lenders) for any
reason whatsoever, such Reference Lender shall thereupon cease to be a Reference
Lender, and if, as a result of the foregoing, there shall be no Reference Lender
of a particular category remaining, then the Lenders (after approval by the
Borrower) shall, as soon as practicable thereafter, by notice to the Borrower,
designate another Lender that is willing to act as a Reference Lender so that
there shall at all times be at least one Reference Lender of each
category.
(6) Notice of
Interest Rate. If any of the Reference Lenders shall be unable
or shall otherwise fail to provide notice of a rate to the Lenders upon their
request, the Applicable BA Discount Rate or the CDOR Rate, as the case may be,
shall be determined on the basis of the average of the rates provided in notices
of the remaining relevant Reference Lenders.
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4.6 Pro
Rata Treatment and Payments
(1) Pro Rata
Treatment of Lenders. Except as otherwise provided herein,
(i) each borrowing of Loans from the Lenders hereunder shall be requested
by the Borrower pro rata according to the respective Pro Rata Shares of the
Lenders and (ii) each payment (including each prepayment) on account of
principal of and interest on the Loans and any other Obligations shall be made
pro rata according to each Lender’s respective Pro Rata Share. All
payments (including prepayments) to be made by the Borrower hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without
set-off or counterclaim and shall be made prior to 11:00 A.M., Local Time,
on the due date thereof to the Lenders, at the relevant Lending Office, as the
case may be, in Canadian Dollars, as the case may be, and in immediately
available funds in accordance with the payment instructions in Schedule 4.6(1) or as otherwise notified by a Lender to the
Borrower in writing. If any payment hereunder becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such
extension.
(2) Funding of
Requested Loans. Each Lender severally agrees to provide its
Commitment. No Lender shall be required to make Loans on behalf of
any other Lender.
4.7 Yield Protection
(1) Increased
Costs. If
any Change in Law shall:
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(a)
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impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any
Lender;
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(b)
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subject
any Lender to any Tax of any kind whatsoever with respect to this
Agreement or any Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof, except for Indemnified Taxes
or Other Taxes covered by Section 4.8 and the
imposition, or any change in the rate, of any Excluded Tax payable by such
Lender; or
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(c)
|
impose
on any Lender or any applicable interbank market any other condition, cost
or expense affecting this Agreement or Loans made by such
Lender;
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and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Loan (or of maintaining its obligation to make any
such Loan), or to increase the cost to such Lender, or to reduce the amount of
any sum received or receivable by such Lender hereunder (whether of principal,
interest or any other amount), then upon request of such Lender the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered provided
that such Lender has implemented a policy to recover such amounts
generally.
(2) Capital
Requirements. If
any Lender determines that any Change in Law affecting such Lender or any
lending office of such Lender or such Lender’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such
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Lender’s
capital or on the capital of such Lender’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by such Lender, to a level below that which such Lender or its holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of its holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or its holding
company for any such reduction suffered provided that such Lender has
implemented a policy to recover such amounts generally.
(3) Certificates for
Reimbursement. A
certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified
in Subsections 4.7(1) or (2), including reasonable detail of the basis of
calculation of the amount or amounts, and delivered to the Borrower shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt
thereof.
(4) Delay in
Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s right to demand such compensation, except that the Borrower shall not
be required to compensate a Lender pursuant to this Section for any increased
costs incurred or reductions suffered more than nine months prior to the date
that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s intention to claim
compensation therefore, unless the Change in Law giving rise to such increased
costs or reductions is retroactive, in which case the nine-month period referred
to above shall be extended to include the period of retroactive effect
thereof.
4.8 Taxes
(1) Payments Subject
to Taxes. If
the Borrower or any Lender is required by Applicable Law to deduct or pay any
Indemnified Taxes (including any Other Taxes) in respect of any payment by or on
account of any obligation of the Borrower hereunder or under any other Loan
Document, then (i) the sum payable shall be increased by the Borrower when
payable as necessary so that after making or allowing for all required
deductions and payments (including deductions and payments applicable to
additional sums payable under this Section), the Lender receives an amount equal
to the sum it would have received had no such deductions or payments been
required, (ii) the Borrower shall make any such deductions required to be
made by it under Applicable Law and (iii) the Borrower shall timely pay the
full amount required to be deducted to the relevant Governmental Authority in
accordance with Applicable Law.
(2) Payment of Other
Taxes by the Borrower. Without limiting the provisions of
Subsection 4.8(1) above, the Borrower shall timely
pay any Other Taxes to the relevant Governmental Authority in accordance with
Applicable Law.
(3) Indemnification
by the Borrower. The Borrower shall indemnify each Lender,
within 10 days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by such Lender and any penalties, interest and reasonable
CREDIT
AGREEMENT
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expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender shall be conclusive absent
manifest error.
(4) Evidence of
Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the applicable Lender the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the applicable Lender.
(5) Status of
Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall, at the request of the Borrower, deliver to the Borrower, at
the time or times prescribed by Applicable Law or reasonably requested by the
Borrower, such properly completed and executed documentation prescribed by
Applicable Law as will permit such payments to be made without withholding or at
a reduced rate of withholding. In addition, (a) any Lender, if requested by
the Borrower, shall deliver such other documentation prescribed by Applicable
Law or reasonably requested by the Borrower as will enable the Borrower to
determine whether or not such Lender is subject to withholding or information
reporting requirements, and (b) any Lender that ceases to be, or to be
deemed to be, resident in Canada for purposes of Part XIII of the Income Tax Act (Canada) or
any successor provision thereto shall within five days thereof notify the
Borrower in writing.
(6) Treatment of
Certain Refunds and Tax Reductions. If a Lender determines, in
its sole discretion, that it has received a refund of any Taxes or Other Taxes
as to which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section or that, because
of the payment of such Taxes or Other Taxes, it has benefited from a reduction
in Excluded Taxes otherwise payable by it, it shall pay to the Borrower an
amount equal to such refund or reduction (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
with respect to the Taxes or Other Taxes giving rise to such refund or
reduction), net of all out-of-pocket expenses of such Lender, as the case may
be, and without interest (other than any net after-Tax interest paid by the
relevant Governmental Authority with respect to such refund). The
Borrower, upon the request of such Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to such Lender if such Lender is required to
repay such refund or reduction to such Governmental Authority. This paragraph
shall not be construed to require any Lender to make available its tax returns
(or any other information relating to its taxes that it deems confidential) to
the Borrower or any other Person, to arrange its affairs in any particular
manner or to claim any available refund or reduction.
4.9 Mitigation Obligations; Replacement of
Lenders
(1) Designation of a
Different Lending Office. If any Lender requests compensation
under Section 4.7, or requires the Borrower to pay
any additional amount to any Lender or any
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Governmental
Authority for the account of any Lender pursuant to Section 4.8, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
Section 4.7 or 4.8, as
the case may be, in the future and (ii) would not subject such Lender to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or
assignment.
(2) Replacement of
Lenders. If any Lender provides a notice under Section 4.11 or requests compensation under Section 4.7 or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 4.8, if any Lender's
obligations are suspended pursuant to Section 4.10
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon 10 days’ notice to such
Lender, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 12.5), all of its interests,
rights and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:
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(a)
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the
assigning Lender receives payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder and under the other Loan Documents
(including any breakage costs and amounts required to be paid under this
Agreement as a result of prepayment to a Lender) from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other
amounts);
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(b)
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(c)
|
such
assignment does not conflict with Applicable
Law.
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A Lender
shall not be required to make any such assignment or delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to
apply.
4.10 Illegality
If any
Lender determines that any Applicable Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable lending office to make or maintain any Loan (or to maintain its
obligation to make any Loan), or to determine or charge interest rates based
upon any particular rate, then, on notice thereof by such Lender to the
Borrower, any obligation of such Lender with respect to the activity that
is
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unlawful
shall be suspended until such Lender notifies the Borrower that the
circumstances giving rise to such determination no longer exist. Upon
receipt of such notice, the Borrower shall, upon demand from such Lender, prepay
or, if conversion would avoid the activity that is unlawful, convert any Loans,
in order to avoid the activity that is unlawful. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted. Each Lender agrees to use a different
lending office if such use will avoid the need for such notice and will not, in
the good faith judgment of such Lender, otherwise be materially disadvantageous
to such Lender.
4.11 Inability to Determine Rates etc.
If a
Lender determines that for any reason a market for Bankers’ Acceptances does not
exist at any time or such Lender cannot for other reasons, after reasonable
efforts, readily sell Bankers’ Acceptances or perform its other obligations
under this Agreement with respect to Bankers Acceptances, such Lender will
promptly so notify the Borrower and each other Lender. From and after
the receipt of such notice by the Borrower, all Loans made by such Lender shall
bear interest at an annual rate equal to such Lender’s cost of funds as
determined in good faith by such Lender plus the Applicable Margin for Bankers’
Acceptance until such time as the condition causing such determination no longer
exists.
SECTION 5 -
REPRESENTATIONS AND WARRANTIES
To induce
the Lenders to enter into this Agreement and to make the Loans, the Borrower
hereby represents and warrants, to each Lender all of which shall survive the
execution and delivery of this Agreement.
5.1 Financial Condition
The
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at December 31, 2007 and the related consolidated statements of income,
retained earnings and cash flows for the fiscal year ended on such date,
reported on by Ernst & Young LLP and the unaudited consolidated statements
of income, retained earnings and cash flows of the Borrower for the fiscal
quarter ending September 30, 2008, (collectively, “Financial Statements”), copies
of which have been or will be furnished to each Lender, present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such dates, and the consolidated results of their operations
and their consolidated cash flows for the fiscal year or fiscal quarter then
ended. Such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP, including the
accounting requirements of OSFI, applied consistently throughout the periods
involved (except as approved by such accountants or Responsible Officer, as the
case may be, and as disclosed therein).
Other
than as disclosed in the Financial Statements, there are no material off-balance
sheet transactions, arrangements, obligations (including contingent obligations)
or other relationships of the Borrower or any of its Subsidiaries with
unconsolidated entities or other persons that may have a material current or
future effect on the financial condition, changes in financial condition,
results of operations, liquidity, capital expenditures, capital resources,
or
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significant
components of revenues or expenses of the Borrower or any of its Material
Subsidiaries.
Except as
publicly disclosed, none of the Borrower or any of its Subsidiaries has any
contingent liabilities, in excess of the liabilities that are either reflected
or reserved against in the Financial Statements in accordance with GAAP, which
are material to the business, assets, property, capital, operations or condition
(financial or otherwise) of the Borrower or any of its Material
Subsidiaries.
5.2 No Change
As of the
Closing Date, there has been no development or event subsequent to
December 31, 2007 which has had or could reasonably be expected to have a
Material Adverse Effect other than has been disclosed publicly or as has been
disclosed to the Lenders in writing pursuant to the Non-Disclosure
Agreements.
5.3 Ratings
Based
upon discussions between the Borrower and its Subsidiaries with S&P, Xxxxx’x
and DBRS, the Borrower does not anticipate that, after drawing the Credit
Facility in full and after giving effect to the Proceeds Utilization
Transactions, any rating action will be taken in the near term by any of such
rating agencies with respect to their respective ratings of the Borrower and its
Subsidiaries.
5.4 Regulatory Compliance
To the
best of the Borrower’s knowledge and belief, the Borrower and all of its
Subsidiaries was in compliance in all material respects with all regulatory
requirements of Applicable Laws of all jurisdictions in which the Borrower or
its Subsidiaries operate and of any Governmental Authority of such jurisdictions
to which the Borrower or any of its Subsidiaries is subject including, without
limitation, those with respect to maintenance of regulatory capital (or
equivalent or similar regulatory requirements) at the most recent reporting
dates required by such Governmental Authorities and remains in compliance at the
date hereof and the Borrower expects the same to be the case on the next
applicable date when such capital is required to be measured in accordance with
Applicable Law. No insurance or financial services regulator of the Borrower or
of any of its Subsidiaries has issued within the past 60 days any notice, order,
letter or other form of communication to the effect that the Borrower or any of
its Subsidiaries is not in compliance with Applicable Law or is not expected to
be in compliance with Applicable Law at the next reporting
date. Based upon discussions between the Borrower and its
Subsidiaries with OSFI, it is the Borrower’s understanding that OSFI is
satisfied with the Credit Facility and the use of proceeds to fund the Proceeds
Utilization Transactions.
5.5 Corporate Existence
The
Borrower and each of its Subsidiaries has been duly incorporated or formed and
organized and is validly existing under the laws of its jurisdiction of
organization, is duly qualified to carry on its business in each jurisdiction in
which the conduct of its business or the ownership, leasing or operation of its
property and assets requires such qualification except to
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the
extent that the failure to so qualify would not reasonably be expected to have a
Material Adverse Effect and has all requisite power and authority (corporate and
other) to conduct its businesses, and to own, lease and operate its properties
and assets except where failure to do so would not reasonably be expected to
have Material Adverse Effect and in the case of the Borrower, to execute,
deliver and perform its obligations hereunder and to complete the Proceeds
Utilization Transactions. The Borrower is an insurance company with
common shares under the ICA.
5.6 Corporate Power; Authorization; Enforceable
Obligations
No
consent or authorization of any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents or the
completion of the Proceeds Utilization Transactions except such consents or
authorizations as have been obtained or will be obtained prior to the
implementation of the Proceeds Utilization Transactions. Each Loan
Document has been duly authorized, executed and delivered on behalf of the
Borrower and constitutes a legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyances, reorganization or similar laws affecting creditors’
rights generally and by general principles of equity and subject to the
qualifications that equitable remedies may only be granted in the discretion of
a court of competent jurisdiction and except that rights of indemnity,
contribution and waiver of contribution may be limited under Applicable
Law.
5.7 No Material Litigation
There is
no action, suit, proceeding (including any proceeding to revoke or deny renewal
of any Insurance Licence), inquiry or investigation before or brought by any
court or any federal, provincial, state, municipal or other governmental
department, commission, board, agency or body, domestic or foreign, now pending,
or, to the knowledge of the Borrower, threatened, against or affecting the
Borrower or any Subsidiary, which if determined adversely to the Borrower or
such Subsidiary may reasonably be expected to result in a Material Adverse
Effect, or which materially and adversely affects or may affect the consummation
of the transactions contemplated in the Loan Documents or the Proceeds
Utilization Transactions or the performance by the Borrower of its obligations
hereunder or which questions the validity of the Loan Documents or of any action
taken or to be taken by the Borrower pursuant to the Loan
Documents.
5.8 Compliance
with Laws and Contracts; NAIC Tests
Each of
the Borrower and its Subsidiaries has conducted and is conducting its business
in compliance in all respects with all Applicable Laws of each jurisdiction in
which its business is carried on and holds all licences, permits, approvals,
consents, certificates, registrations and authorizations (whether governmental,
regulatory or otherwise), including insurance licences from the relevant
regulatory or governmental authority in all such jurisdictions in which the
Borrower or its Subsidiaries conduct insurance business (the “Insurance Licences”) to enable
its business to be carried on as now conducted and its property and assets to be
owned, leased and operated, except in each case where the failure to be in such
compliance or to hold such licence,
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permit,
approval, consent, certificate, registration or authorization (including any
Insurance Licence) would not have a Material Adverse Effect and all such
licences, permits, approvals, consents, certificates, registrations and
authorizations are in good standing and in effect and none of the same contains
any term, provision, condition or limitation which will have a Material Adverse
Effect and the Borrower and its Subsidiaries are not aware of any fact or matter
which would reasonably result in the material impairment, or material adverse
modification or termination of or material adverse change in any such licence,
permit, approval, consent, certificate, registration or
authorization.
Neither
the Borrower nor any Material Subsidiary is in breach or violation of, or will
after giving effect to the Loan Documents and the Proceeds Utilization
Transactions, be in breach of violation of:
|
(a)
|
any
of the terms, conditions or provisions of the by-laws, constating
documents or resolutions of the shareholders or directors (or any
committee thereof) of the Borrower or any Material
Subsidiary;
|
|
(b)
|
any
licence, permit, approval, consent, certificate, registration or
authorization (whether governmental, regulatory or otherwise) issued to
the Borrower or any Subsidiary or any Contractual Obligation, except for
breaches or violations which would not have a Material Adverse Effect;
or
|
|
(c)
|
any
statute, regulation or rule applicable to the Borrower or any Subsidiary,
or any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Borrower or any Subsidiary, except for
breaches or violations which would not have a Material Adverse
Effect.
|
The IRIS
Tests for each US Subsidiary/Branch was, at the required reporting dates, within
the usual range for each such IRIS Test, except as could not reasonably be
expected to have a Material Adverse Effect, and each Material Subsidiary
(organized under the laws of the United States or any jurisdiction thereof) has,
at the required reporting dates, satisfied the Company Action Level
RBC. No officer or director of the Borrower has a substantial
investment (as defined in the ICA) in the Borrower or in any Person which
Controls the Borrower.
5.9 Securities Laws
The
Borrower (i) is a reporting issuer within the meaning of the Securities Act (Ontario) and
the comparable provisions of the applicable securities laws in each of the other
jurisdictions in Canada in which it has issued public securities, (ii) is
subject to the reporting obligations of the U.S. Securities Exchange Act of
1934, as amended, and (iii) is not in default under any requirement of
any such Applicable Laws.
5.10 No
Default
No
Default or Event of Default has occurred and is continuing or would result after
giving effect to the Proceeds Utilization Transactions.
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5.11 Ownership of Property; Liens
The
Borrower and each of its Material Subsidiaries has good title to, or a valid
leasehold interest in, all its properties (other than any defect in title or
interest which could not reasonably be expected to have a Material Adverse
Effect), and none of such property is subject to any Lien, except as permitted
by Section 9.1.
5.12 Taxes
Each of
the Borrower and each of its Material Subsidiaries has filed or caused to be
filed all Tax returns which, to the knowledge of the Borrower, are required to
be filed and has paid all Taxes shown to be due and payable on said returns or
on any assessments made against it or any of its property and all other Taxes,
fees or other charges imposed on it or any of its property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP or Local GAAP have been provided on the books
of the Borrower or its Subsidiaries, as the case may be), except, in each case,
as could not reasonably be expected to have a Material Adverse Effect; no Lien
in respect of Tax has been filed, and, to the knowledge of the Borrower, no
claim is being asserted, with respect to any such Tax, fee or other charge,
except as could not reasonably be expected to have a Material Adverse
Effect.
5.13 Accuracy
of Information
No
statement or information contained in this Agreement or any other document,
certificate or statement furnished to the Lenders or any of them, by or on
behalf of the Borrower for use in connection with the transactions contemplated
by this Agreement including, without limitation, the Confidential Information
(other than projections and pro forma financial information), contained as of
the date such statement, information, document or certificate was so furnished
any untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained herein or therein, in light of the
circumstances under which they were made, not materially
misleading. The projections and pro forma financial information
contained in the materials referenced above were prepared in good
faith. There is no fact known to the Borrower that would reasonably
be expected to have a Material Adverse Effect that has not been expressly
disclosed herein or in such other documents, certificates and statements
furnished to the Lenders hereunder for use in connection with the transactions
contemplated hereby.
5.14 Subsidiaries
The
Subsidiaries listed on Schedule 5.14 constitute all
the Material Subsidiaries that are operating subsidiaries of the Borrower at the
date hereof. The Borrower owns, directly and indirectly, 100% of the
Voting Capital Stock of each of the Material Subsidiaries other than as
disclosed in the Financial Statements.
5.15 ERISA
Except to
the extent that any of the following could not reasonably be expected to have a
Material Adverse Effect:
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(a) neither
a Reportable Event nor an “accumulated funding deficiency” (within the meaning
of Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred and no lien in favor of the
PBGC or a Plan has arisen during the five-year period prior to the date as of
which this representation is deemed made;
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(b)
|
the
present value of all accrued benefits under each Single Employer Plan in
which the Borrower or any Commonly Controlled Entity is a participant
(based on those assumptions used to fund the Plans) did not, as of the
last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan
allocable to such accrued benefits;
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|
(c)
|
neither
the Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan, and neither the Borrower
nor any Commonly Controlled Entity would become subject to any liability
under ERISA if the Borrower or any such Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the valuation date
most closely preceding the date on which this representation is made or
deemed made; and
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(d)
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no
such Multiemployer Plan is in “reorganization” or “insolvent,” within the
meaning of such terms as used in
ERISA.
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5.16 Canadian Pension Compliance
The
Canadian Pension Plans are duly registered under the ITA and all other
applicable laws which require registration. Except as would not, individually or
in the aggregate, result in a Material Adverse Effect, the Borrower and each of
its Subsidiaries has complied with and performed all of its material obligations
under and in respect of the Canadian Pension Plans and Canadian Benefit Plans
under the terms thereof, any funding agreements and all applicable laws
(including any fiduciary, funding, investment and administration
obligations). Except as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect, all employer and
employee payments, contributions or premiums to be remitted, paid to or in
respect of each Canadian Pension Plan or Canadian Benefit Plan have been paid in
a timely fashion in accordance with the terms thereof, any funding agreement and
all Applicable Laws. Except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, there
have been no improper withdrawals or applications of the assets of the Canadian
Pension Plans or the Canadian Benefit Plans. There are no outstanding
disputes concerning the Canadian Pension Plans or the Canadian Benefit Plans or
the assets thereof which would, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. Each of the Canadian
Pension Plans is fully funded on a solvency basis (using actuarial methods and
assumptions which are consistent with the valuations last filed with the
applicable Governmental Authority and which are consistent with generally
accepted actuarial principles). No Canadian Pension Plan Event has
occurred.
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5.17 Foreign
Pension Compliance
The
Borrower and each of its Subsidiaries is in compliance with all Applicable Laws
of all jurisdictions outside of the United States and Canada (“Foreign Jurisdictions”) in
which it conducts business with respect to the maintenance and funding of
pension and benefit plans (“Foreign Plans”) except where
failure to do so would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. Except as would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, there have been no improper withdrawals or applications of the
assets of any Foreign Plans. There are no outstanding disputes
concerning the Foreign Plans or the assets thereof which would, individually or
in the aggregate, reasonably be expected to result in a Material Adverse
Effect. Each of the Foreign Plans is fully funded on a solvency basis
(using actuarial methods and assumptions which are consistent with the
valuations last filed with the applicable Governmental Authority and which are
consistent with generally accepted actuarial principles of such Foreign
Jurisdiction).
5.18 Ranking
The
Obligations are and will at all times rank in right of payment and otherwise at
least pari passu with
all other unsecured and unsubordinated Indebtedness of the Borrower, whether now
existing or hereafter outstanding and will be treated by the Borrower as an
unsubordinated liability.
5.19 Anti-Money
Laundering/Patriot Act
To the
extent applicable, the Borrower and each of its Subsidiaries is in compliance,
in all material respects, with (a) Canadian Anti-Terrorism Laws;
(b) the Trading with the Enemy Act, as amended, and each of the foreign
assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) and any other
enabling legislation or executive order relating thereto; and (c) Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”). No
part of the proceeds of any Loan shall be used, directly or indirectly, for any
payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the United States Foreign Corrupt Practices
Act of 1977, as amended in a manner which could adversely affect the interests
of the Lenders in any respect.
SECTION 6 -
CONDITIONS PRECEDENT
6.1 Effectiveness of Agreement
The
effectiveness of this Agreement is subject to the satisfaction of the following
conditions precedent:
(1) Documents
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Each of
the Lenders shall have received the following in form and substance satisfactory
to it:
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(a)
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a
fully executed copy of this
Agreement;
|
|
(b)
|
a
certificate of the Borrower, dated the Closing Date, attaching the
Borrower’s constating documents and, bylaws, board of directors’
resolutions and incumbency executed by a Responsible Officer of the
Borrower;
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|
(c)
|
a
certificate of a Responsible Officer which certificate shall certify on an
unconsolidated basis for the Borrower as of September 30, 2008 (i)
the amount of Indebtedness, (ii) the amount of contingent liabilities by
way of senior guarantee, letter of credit or other senior support
obligations in respect of the Subsidiaries of the Borrower, (iii)
dividends for the twelve months then ended, (iv) preferred shares
outstanding, and (v) contingent liabilities by way of subordinated
guarantee or other subordinated support obligations in respect of
Subsidiaries of the Borrower;
|
|
(d)
|
a
certificate of status of the Borrower issued by OSFI, dated a date
reasonably close to the date
hereof;
|
|
(e)
|
customary
legal opinions of external counsel;
|
|
(f)
|
copies
of all necessary approvals of all Governmental Authorities and others
required to enter into and perform its obligations under this
Agreement;
|
|
(g)
|
copies
of the Borrower’s consolidated quarterly financial statements for the
fiscal quarter ended June 30, 2008 and for the fiscal quarter ended
September 30, 2008 and management prepared financial projections for
the fourth quarter ending December 31, 2008 and for the 2009 fiscal
year;
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|
(h)
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copies
of the Management Plan; and
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|
(i)
|
such
other documentation as the Lenders may reasonably
request.
|
(2) Proceeds
Utilization Transactions
The
Lenders shall have received a certificate of a Responsible Officer of the
Borrower setting out the MCCSR Ratio of MLI determined on a pro forma basis as
at September 30, 2008 after giving effect to the Proceeds Utilization
Transactions.
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(3) Representations
and Warranties
Each of
the representations and warranties made by the Borrower in or pursuant to this
Agreement shall be true and correct in all material respects.
(4) No
Default
No
Default or Event of Default shall have occurred and be continuing on such date
or after giving effect to the Loans requested to be made on such date or the
Proceeds Utilization Transactions.
(5) Credit
Limits
After
giving effect to the Loans requested to be made on such date, (i) the
Outstanding amount of the Loans of each Lender shall not exceed such Lender’s
Commitment then in effect and (ii) the Outstanding amount of all Loans
shall not exceed the Total Commitment then in effect.
6.2 Conditions Precedent to all Loans
The
agreement of each Lender to make any Loan during the Availability Period
requested hereunder is subject to the satisfaction of the following conditions
precedent:
(1) Representations
and Warranties
Each of
the representations and warranties made by the Borrower in or pursuant to this
Agreement shall be true and correct in all material respects.
(2) No
Default
No
Default or Event of Default shall have occurred and be continuing on such date
or after giving effect to the Loans requested to be made on such date or the
Related Transactions.
(3) Concurrent
Funding
Each of
the Lenders shall be satisfied that the conditions precedent to funding have
been met and that each other Lender will fund concurrently with that Lender on
each funding date.
(4) Credit
Limits
After
giving effect to the Loans requested to be made on such date, (i) the
Outstanding amount of the Loans of each Lender shall not exceed such Lender’s
Commitment then in effect and (ii) the Outstanding amount of all Loans
shall not exceed the aggregate Total Commitment then in effect.
(5) Drawdown
Notice
Receipt
of a written drawdown notice.
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(6) Fees
All fees
payable on or prior to the date hereof to the Lenders under the Fee Agreement
shall have been paid by the Borrower.
SECTION 7 -
AFFIRMATIVE COVENANTS
The
Borrower hereby agrees that, so long as the Commitments remain in effect or any
amount is owing to any Lender hereunder, the Borrower shall and (except in the
case of delivery of financial information, reports and notices) shall cause, as
applicable, each Material Subsidiary to:
7.1 Financial Statements
Furnish
to each Lender:
|
(a)
|
as
soon as available, but in any event within 90 days after the end of each
fiscal year of the Borrower and MLI, the audited consolidated accounts and
financial statements (including, all similar statements as required by
OSFI) of the Borrower, MLI, and their respective consolidated Subsidiaries
as at the end of such year, setting forth in each case in comparative form
the figures for the previous year, including a consolidated balance sheet
setting out the amount of the surplus and (in reasonable detail) the
calculations for such surplus substantially in the same form as set out in
the consolidated balance sheet in the audited accounts for the year ended
December 31, 2007 referred to in Section 5.1, reported on without a “going
concern” or like qualification or exception, or qualification arising out
of the scope of the audit, by Ernst & Young LLP or other independent
certified public accountants of nationally recognized
standing;
|
|
(b)
|
as
soon as available, but in any event not later than 45 days after the end
of each of the first three quarterly periods of each fiscal year of each
of the Borrower and MLI, the unaudited consolidated accounts and financial
statements (including, in the case of the Borrower and MLI all statements
as required by OSFI) of the Borrower and MLI and their respective
consolidated Subsidiaries as at the end of such quarter and the portion of
the fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified by a
Responsible Officer of the Borrower or MLI as being fairly stated in all
material respects (subject to normal year-end audit
adjustments);
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|
(c)
|
as
soon as available, and in any event within five (5) Business Days of the
time such financial statements are required to be filed with the
applicable Governmental Authority (currently May 31 of each year), annual
financial statements audited in accordance with the requirements of the
applicable Governmental Authority for JHLICO and
JHUSA;
|
|
(d)
|
as
soon as available, and in any event within five (5) Business Days of the
time such financial statements are required to be filed with the
applicable Governmental Authority (currently March 1 of each year), annual
unaudited
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|
financial
statements for JHLICO and JHUSA, which include income statements, balance
sheets, footnotes and supplemental exhibits and schedules of financial
information;
|
|
(e)
|
as
soon as available, and in any event five (5) Business Days of the time
such financial statements are required to be filed with the applicable
Governmental Authority (currently the 15th
day of the second month following the end of each of the first three
financial quarters of each year), unaudited financial statements for
JHLICO and JHUSA which include income statements and balance
sheets.
|
All such
financial statements shall be prepared in accordance with (i) GAAP in the case
of the Borrower and MLI applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein), and (ii) in the case of
JHUSA and JHLICO, the requirements of the Government Authority applicable
thereto.
The
financial statements delivered pursuant to this Section 7.1 may be delivered electronically by email on behalf
of the Borrower by the Person listed in Section 12.1 or such other Person as the Borrower may notify
the Lenders in writing. Such financial statements shall be delivered
to the Lenders at the email addresses set out in Schedule 1.1(29) or to such other email address as shall be
notified in writing by the Lenders to the Borrower from time to
time. Any financial statement delivered electronically by way of
email, whether or not a signature appears thereon, shall have the same legal
effect as if it was signed by the Person delivering same and an original thereof
delivered to the Lenders. Without limiting the foregoing, the Lenders
shall be entitled to consider any financial statement that the Lenders receive
in the name of the Borrower from any of the Persons authorized to deliver same
pursuant to this paragraph, whether or not a signature appears thereon, as duly
authorized and delivered by the Borrower and the Borrower agrees that any such
communication shall be binding upon it. Notwithstanding the
foregoing, if the Lenders have not received the financial statements under this
Section 7.1 within the time periods required, the
Borrower shall deliver to the Bank hard copies of such financial statements
within five (5) Business Days after receipt by the Borrower of a request
therefor by the Lenders.
7.2 Certificates;
Other Information
Furnish
to each Lender:
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(a)
|
concurrently
with the delivery of the financial statements referred to in Sections 7.1(a) and 7.1(b),
a compliance certificate in the form attached as Schedule 7.2(a) executed by a Responsible Officer of the
Borrower (A) certifying (with calculations in reasonable detail)
compliance with Section 8,
(B) certifying as of the end of the relevant period for the Borrower
on an unconsolidated basis (i) the amount of Indebtedness, (ii) the amount
of contingent liabilities by way of senior guarantee, letter of credit or
other senior support obligations in respect of the Subsidiaries of the
Borrower, (iii) dividends for the twelve months then ended, (iv) preferred
shares outstanding, and (v) contingent liabilities by way of subordinated
guarantee or other subordinated support obligations in respect of
Subsidiaries of the Borrower, and (C) containing a summary Specified
Debt
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(b)
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promptly
upon being sent, to the extent permitted under Applicable Laws, copies of
each and every notice, request or application made by the Borrower to OSFI
or the Minister of Finance referred to in the ICA under or in connection
with the ICA or other Governmental Authority having supervisory regulatory
authority over the Borrower or any of its Material Subsidiaries
(i) which could materially and adversely affect the ability of the
Borrower to perform its obligations under the Loan Documents or
(ii) relating to the granting of any Lien (other than in the ordinary
course of business) on any material property, assets or revenues of the
Borrower or its Material Subsidiaries to any Governmental Authority or the
request therefor;
|
|
(c)
|
promptly,
any filings of periodic and other reports, proxy statements and other
materials filed by the Borrower or any of its Material Subsidiaries with
the Ontario Securities Commission or the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of either of said commissions, or with any United States or
Canadian provincial or national securities exchange, as the case may be
(to the extent permitted under Applicable Law) which contain information
pertaining to an event which constitutes a Material Adverse
Effect;
|
|
(d)
|
from
time to time, and on demand, such additional financial or other
information relating to the Borrower and its Subsidiaries as may
reasonably be requested by any Lender;
and
|
|
(e)
|
notice
forthwith upon the entering into of a binding agreement to complete a
Strategic Acquisition with details thereof together with pro forma calculations
of the financial covenants in Section 8
after giving effect thereto and any Specified Debt to be incurred in
connection therewith.
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7.3 Notices
Promptly
give notice to each Lender of:
|
(a)
|
the
occurrence of any Default or Event of
Default;
|
|
(b)
|
any
(i) default or event of default under any Contractual Obligation of the
Borrower or any of its Subsidiaries or (ii) litigation, investigation or
proceeding which may exist or be threatened at any time with respect to
the Borrower or any of its Subsidiaries, which in either case, if not
cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse
Effect;
|
|
(c)
|
the
following events, as soon as possible and in any event within 30 days
after any the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, any lien
in favor of the PBGC or a Plan, or
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any
withdrawal from, or the termination, reorganization or insolvency (within
the meaning of such terms as used in ERISA) of any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action
by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, reorganization or insolvency (within the meaning of such
terms as used in ERISA) of, any Plan or (iii) any Canadian Pension
Event or similar event in respect of Foreign Plans, which, in the case of
clauses (i), (ii) and (iii), individually or in the aggregate, could
reasonably be expected to have a Material Adverse
Effect;
|
|
(d)
|
any
change in any of the ratings of the Borrower and any of its Subsidiaries
by S&P, Xxxxx’x or DBRS and any communications from such rating
agencies that they have concluded that any rating action is
imminent;
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(e)
|
to
the extent permitted under any Applicable Law, promptly upon receipt
thereof, any order made or direction given by OSFI or any other
Governmental Authority having supervisory or regulatory authority over the
Borrower or Material Subsidiary which could reasonably be expected to have
a Material Adverse Effect;
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|
(f)
|
to
the extent permitted under Applicable Law, any discussions or other
communications with OSFI or any other Governmental Authority having
supervisory or regulatory authority over the Borrower or any of its
Subsidiaries, indicating that any part of the Proceeds Utilization
Transactions or any other measures contained in the Management Plan or
otherwise are insufficient;
|
|
(g)
|
the
details of each investment under the Proceeds Utilization Transactions
when made; and
|
|
(h)
|
to
the extent permitted under Applicable Law, any development or event which
has had or could reasonably be expected to have a Material Adverse
Effect.
|
Each
notice pursuant to this Section 7.3 shall be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower proposes to take with respect thereto.
7.4 Payment of Taxes
Pay,
discharge or otherwise satisfy at or before they become delinquent, all its Tax
liabilities, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP or Local GAAP, as applicable, with respect thereto have been provided
on the books of the Borrower or its Material Subsidiaries, as the case may
be.
7.5 Conduct
of Business and Maintenance of
Existence
The
Borrower shall, and shall cause each of its Subsidiaries to, (i) maintain
their corporate existence (except where failure to do so would not
reasonably be expected to result in
CREDIT
AGREEMENT
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a
Material Adverse Effect) (ii) carry on and conduct its business in a proper
and efficient manner in compliance in all respects with all Applicable Laws of
each jurisdiction in which its business is carried on and holds all licences,
permits, approvals, consents, certificates, registrations and authorizations
(whether governmental, regulatory or otherwise), including all Insurance
Licences to enable its business to be carried on as now conducted and its
property and assets to be owned, leased and operated, except in each case where
the failure to be in such compliance or to hold such licence, permit, approval,
consent, certificate, registration or authorization (including any Insurance
Licence) would not have a Material Adverse Effect (iii) keep or cause to be kept
proper books of account and make or cause to be made therein true and accurate
entries of all its dealings and transactions in relation to its business, all in
accordance with GAAP or Local GAAP, and at all reasonable times it will furnish
or cause to be furnished to the Lenders or their respective duly authorized
agents or attorneys such information relating to its business as the Lenders may
reasonably require and such books of account shall at all reasonable times and
upon reasonable notice be open for inspection by the Lenders or such agents or
attorneys.
SECTION 8 –
FINANCIAL COVENANTS
The
Borrower hereby agrees that, so long as the Commitments remain in effect or any
amount is owing to any Lender hereunder, the Borrower shall not, directly or
indirectly:
(1) MCCSR. Permit MLI to
fail to maintain as at the end of each fiscal quarter (including the fourth
quarter) an MCCSR Ratio of less than the supervisory target established by OSFI,
from time to time, in the MCCSR Guideline. As at the Closing
Date, the supervisory target is 150%.
(2) Consolidated
Funded Debt to Total Capital. Permit Consolidated Funded
Debt of the Borrower at any time to exceed 30% of the Total Capital of the
Borrower provided that such percentage shall be increased to the Acquisition
Percentage (up to a maximum of 35%) for the period of 18 months following the
completion of an acquisition after which such percentage shall revert to
30%.
Acquisition
Percentage shall be equal to
A.
|
the
Consolidated Funded Debt to Total Capital percentage determined on a pro forma basis after
giving effect to the Strategic Acquisition as reported by the Borrower
under Section 7.2(e);
|
|
Plus
|
||
B.
|
the
difference equal to
|
|
(i)
|
30%
|
|
Minus
|
||
(ii)
|
the
Consolidated Funded Debt to Total Capital percentage as reported in the
most recent compliance certificate delivered under Section 7.2(a).
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SECTION 9 -
NEGATIVE COVENANTS
The
Borrower hereby agrees that, so long as the Commitments remain in effect or any
amount is owing to any Lender hereunder, the Borrower shall not, directly or
indirectly:
9.1 Limitation on Liens
Create,
incur, assume or suffer to exist any Lien upon any of the Borrower’s or its
Material Subsidiaries’ property, assets or revenues, whether now owned or
hereafter acquired, except for:
|
(a)
|
any
Lien on the assets of a Material Subsidiary arising in the ordinary course
of business;
|
|
(b)
|
any
Lien on the assets of a Material Subsidiary not arising in the ordinary
course of business securing Indebtedness not in excess of 3% of Total
Assets;
|
|
(c)
|
any
Lien on the assets of the Borrower securing the purchase price for such
assets, Financing Leases or similar obligations up to an aggregate amount
not to exceed C$5,000,000;
|
|
(d)
|
any
customary Lien arising by the operation of law securing obligations other
than Indebtedness;
|
|
(e)
|
any
Lien arising pursuant to an order of attachment, restraint, garnishee,
order or injunction restraining disposal of assets or similar legal
process (an “Attachment”) arising in
connection with court proceedings being contested by the Borrower or its
Material Subsidiaries in good faith and provided that the Borrower has
notified each Lender of such Attachment and that such Attachment could not
reasonably be expected to have a Material Adverse Effect and is otherwise
in respect of an amount less than that specified in Section 10(g);
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|
(f)
|
any
Lien over assets acquired by a Material Subsidiary, or the assets of any
company acquired, after the date of this Agreement, by the Borrower or a
Material Subsidiary, and such Lien is in existence at the date of such
acquisition (but not created in connection with or contemplation of such
acquisition), provided that the amounts secured by any such Lien and
outstanding at the time of such acquisition may not be increased;
and
|
|
(g)
|
the
extension, renewal or replacement of any Lien permitted under paragraph 9.1(a), 9.1(b) or
9.1(f) hereof to the extent of the original
principal amount of Indebtedness, provided that the extension, renewal or
replacement of such Lien is limited to all or part of the properties or
assets which are subject to the Lien as extended, renewed or
replaced;
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provided
that, anything in this Section to the contrary notwithstanding, (i) the
maximum aggregate amount of obligations and liabilities secured by Liens
permitted above shall not exceed such amount as may be permitted by
applicable Governmental Authorities and (ii) in no event may any Lien
be created, incurred, assumed or suffered to exist upon any of the Capital
Stock of any Material Subsidiary.
|
9.2 Limitation on Sale of Assets, Mergers,
etc.
(1) Dispose
of, or permit any Material Subsidiary to dispose of, its business or assets out
of the ordinary course of business if the Net Proceeds to be received
exceeds an amount equal to 3% of Total Assets as set out in the most recent
balance sheet of the Borrower delivered to the Lenders under Section 6.1(1)(g) or 7.1 as
applicable, unless the Net Proceeds thereof are applied in accordance with
Section 4.3(2)(b), or
(2) permit
any Material Subsidiary to dispose of its business or assets out of the ordinary
course of business where such disposition would require the approval of a
Governmental Authority and either the subsequent distribution of the Net
Proceeds of such disposition to the Borrower or the application of such Net
Proceeds pursuant to Section 4.3(2)(b) or both,
would also require the approval of a Governmental Authority when all such
approvals have not been obtained, or
(3) amalgamate
or merge with any other Person (unless, in the case of any such transaction
involving the Borrower) the Person which survives such amalgamation or merger
shall assume the obligations of the Borrower under the Loan Documents pursuant
to documentation in form and substance satisfactory to the Lenders and no
Default or Event of Default shall have occurred and be continuing or would
result therefrom);
provided
that so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, clause (1)
above shall not prohibit any such transactions between or among one or more of
the Borrower and its wholly-owned Subsidiaries so long as the Borrower continues
to directly own MLI or its respective successors.
9.3 Acquisitions
Purchase
or acquire, or make any commitment to purchase or acquire, or permit any
Material Subsidiary to purchase or acquire out of the ordinary course of
business, the Capital Stock of another Person or all or substantially all of the
assets of another Person, or of any business or division of any Person,
including without limitation, by way of amalgamation, plan of arrangement,
merger, consolidation or other combination unless (i) such purchase or
acquisition is of a business that is substantially the same or similar to the
line of business that the Borrower or a Subsidiary currently conducts, and
(ii) no Default or Event of Default is outstanding or would arise after
giving effect thereto.
9.4 Continuance as Company
Cease to
be an insurance holding company or an insurance company regulated under the
provisions of the ICA and will ensure that no Subsidiary that is currently
a regulated entity will cease to be a regulated entity on the same basis as
currently regulated.
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AGREEMENT
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9.5 Distributions
Repurchase,
or make any offer to repurchase, any common shares of the Borrower, or declare
or pay any extraordinary or special dividend on, or make distribution in kind in
respect of, the common or preferred shares of the Borrower other than dividends
or distributions in the form of shares of the Borrower.
9.6 Ratings
Downgrade Transaction
Notwithstanding
any other provision hereof, enter into any transaction the consummation of which
results in a “concurrent” ratings downgrade, or would reasonably be expected to
result in a “concurrent” ratings downgrade, of the Borrower’s senior unsecured
debt rating by either S&P or Xxxxx’x that is below A+ by S&P or below
A-2 by Xxxxx’x (with Xxxxx’x rating to be based on the Implied
Rating). For the purposes of this Section 9.6, “concurrent” shall mean forthwith upon the review
of such transaction by such ratings agency.
9.7 Distribution
Permit
any Material Subsidiary to enter into any Contractual Obligation which would
restrict such Material Subsidiary from making any distributions by way of
dividends or by way of return of capital, or which would restrict such Material
Subsidiary from repaying or repurchasing any regulatory capital or
equity.
SECTION 10 -
EVENTS OF DEFAULT
If any of
the following events shall occur and be continuing:
|
(a)
|
a)
|
the
Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms thereof or hereof
or
|
|
(ii)
|
the
Borrower shall fail to pay any interest on any Loan or any other amount
payable hereunder, within five (5) Business Days after any such interest
or other amount becomes due in accordance with the terms thereof or
hereof; or
|
|
(b)
|
any
representation or warranty made or deemed made by the Borrower herein or
which is contained in any certificate, document or financial or other
statement furnished by it at any time under or in connection with a Loan
Document shall prove to have been incorrect in any material respect on or
as of the date made or deemed made;
or
|
|
(c)
|
the
Borrower shall default in the observance or performance of any provision
contained in Section 8(1) which default
shall continue unremedied by the final date of the next quarterly period
of the Borrower following after the quarterly period on which such default
occurred; or
|
|
(d)
|
the
Borrower shall default in the observance or performance of any provision
contained in Section 8(2) or Section 9;
or
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AGREEMENT
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(e)
|
the
Borrower or any of its Material Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness or in the payment
of any Guarantee Obligation, beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to permit (after the expiry of any applicable grace
periods) the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to become
due prior to its stated maturity or such Guarantee Obligation to become
payable; provided, however, that no Default or Event of Default shall
exist under this paragraph unless the aggregate amount of Indebtedness
and/or Guarantee Obligations in respect of which any defaults or other
events or conditions referred to in this paragraph shall have occurred
shall be equal to at least C$250,000,000 (or the equivalent thereof in
another currency); or
|
|
(f)
|
b)
|
the
Borrower or any of its Material Subsidiaries makes a general assignment
for the benefit of its creditors, or otherwise acknowledges its
insolvency, becomes insolvent or shall commence any case, proceeding or
other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to winding-up, bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator, curator, sequestrator, liquidator,
receiver and manager, or any other officer with similar power is appointed
of the Borrower or such Material Subsidiaries, as applicable, for all or
any substantial part of its assets;
or
|
|
(ii)
|
there
shall be commenced against the Borrower or any of its Material
Subsidiaries any case, proceeding or other action of a nature referred to
in clause (i) above which results in the entry of an order for relief
or any such adjudication or appointment;
or
|
|
(iii)
|
there
shall be commenced against the Borrower or any of its Material
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief; or
|
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AGREEMENT
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|
(iv)
|
the
Borrower or any of its Material Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above;
or
|
|
(g)
|
one
or more judgments or decrees shall be entered against the Borrower or any
of its Material Subsidiaries involving in the aggregate an unpaid
liability of C$250,000,000 (or the equivalent thereof in another currency)
or more; or
|
|
(h)
|
the
occurrence of a Change of Control;
or
|
|
(i)
|
the
Borrower shall repay any Specified Debt prior to repayment in full of all
Obligations; or
|
|
(j)
|
the
Borrower shall own, directly or indirectly, less than 50.1% of the
outstanding Voting Capital Stock of any of the Material Subsidiaries other
than in connection with transactions permitted by Section 9.2,
|
then, and
in any such event, (A) if such event is an Event of Default specified in clause
(i) or (ii) of paragraph (f) of this Section 10 with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under the
Loan Documents shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) the Required Lenders may, by notice to the Borrower declare
the Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) the Required Lenders may, by notice to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under the Loan Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable.
Except as
expressly provided above in this Agreement, presentment, demand, protest and all
other notices of any kind are hereby expressly waived by the
Borrower.
SECTION 11 -
THE LENDERS
11.1 Lenders
Bound by Decision to Exercise
Remedies
Each
Lender agrees to be bound by a decision of the Required Lenders to exercise the
rights and remedies provided in this Agreement. Each Lender shall,
subject to Applicable Law, do all acts and things as may be necessary or
reasonable to enable the Lenders to act pursuant to any decision of the Required
Lenders.
11.2 Acknowledgement of Lenders
(1) Independent
Appraisal of the Borrower. Each Lender acknowledges to each
other Lender that it has been, and will continue to be, solely responsible for
making its own independent appraisal of and investigation into the financial
condition, creditworthiness, affairs, status and nature of the Borrower and its
Subsidiaries and, accordingly, each Lender confirms to each other Lender that it
has not relied, and will not hereafter rely on any other Lender:
CREDIT
AGREEMENT
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(a) to
check or enquire on its behalf into the adequacy, accuracy or completeness of
any information provided by the Borrower (whether or not the information has
been or is hereafter circulated to the Lenders by such other
Lender);
|
(b)
|
to
enquire as to the performance by the Borrower of its obligations under the
Loan Documents; or
|
|
(c)
|
to
assess or keep under review on its behalf the financial condition,
creditworthiness, affairs, status or nature of the
Borrower.
|
(2) No Fiduciary
Obligations. Each Lender acknowledges to each other Lender that such
other Lender is not a fiduciary in respect of the Lenders, and owes no fiduciary
duties or obligations to the Lenders under or by virtue of the Loan Documents or
otherwise.
11.3 Relations with the Borrower
Each
Lender may deal with the Borrower in any transaction not associated with this
Agreement and generally conduct any other banking business with or provide any
other financial services to the Borrower without having any liability to account
to the other Lenders therefor.
11.4 Copy
of Notice
The
Borrower agrees that it will provide a copy of each notice or document delivered
to a Lender to the other Lenders hereunder. Each Lender agrees that
it will provide a copy to each other Lender of every notice or document sent by
it to the Borrower. Upon the request of any Lender, each other Lender
will provide such requesting Lender with a copy of every notice or document
received by it or sent by it pursuant to the Loan Documents.
11.5 Amendments, Waivers, etc.
(1) Binding
Waiver. Except as otherwise provided in this Section 11.5, no amendment, waiver, discharge or termination
of any provision of a Loan Document and no waiver of any breach of any provision
of a Loan Document:
|
(a)
|
shall
be binding upon the Borrower unless it is evidenced by an instrument in
writing signed by the Borrower; nor
|
|
(b)
|
be
binding upon the Lenders unless it is approved in writing by all the
Lenders or the Required Lenders, as
applicable.
|
Notwithstanding
the foregoing, any amendment, waiver, discharge or termination may be validly
effected by execution by and all the Lenders or the Required Lenders, as
applicable, of an instrument in writing without requiring the execution of that
instrument by the Borrower, so long as the amendment, waiver, discharge or
termination does not adversely affect the rights or obligations of the
Borrower. The Lenders shall forward a copy of the written instrument
to the Borrower as soon as practicable following the execution
thereof.
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AGREEMENT
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(2) Approval of All
Lenders. Where any amendment, waiver, discharge or termination relates to
the following matters, the amendment, waiver, discharge or termination requires
the approval of all Lenders:
|
(a)
|
any
reduction in the rate or amount of any principal, interest or fees or any
other amount payable by the Borrower or the Borrower or any alteration in
the currency or mode of calculation or computation
thereof;
|
|
(b)
|
any
extension of the time for any payments required to be made by the Borrower
or the Borrower;
|
|
(c)
|
any
change in the Termination Date
hereof;
|
|
(d)
|
the
types of Loans available;
|
|
(e)
|
an
increase in the Total Commitment or in any Lender’s
Commitment;
|
|
(f)
|
an
extension or reduction of the notice period required in connection with
any Loan;
|
|
(g)
|
the
definition of Required Lenders;
|
|
(h)
|
an
assignment or transfer by the Borrower of any of its rights and
obligations under the Loan Documents;
or
|
|
(i)
|
Any other
amendment, waiver, discharge or termination requires the approval of only the
Required Lenders, which approval, if obtained, shall be binding upon all the
Lenders.
11.6 No
Partnership
Nothing
contained in the Loan Documents and no action taken pursuant to it shall be
deemed to constitute the Lenders as a partnership, association, joint venture or
other similar entity.
11.7 Adjustments Among Lenders
(1) Adjustment After
Exercise of Rights. Each Lender agrees that, after the
exercise of any rights pursuant to Section 10,
it will at any time or from time to time, upon the request of any other Lender,
purchase portions of the amounts due and owing to the other Lenders and make any
other adjustments which may be necessary or appropriate so that the amounts due
and owing to each Lender, as adjusted under this Section 11.7, will, as nearly as possible, reflect each
Lender’s Pro Rata Share determined as at the date of this Agreement prior to the
making of any Loan. The Borrower agrees to be bound by and to do all
things necessary or appropriate to give effect to any and all purchases and
other adjustments made by and between the Lenders under this Section 11.7 but shall incur no increased liabilities by
reason thereof.
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AGREEMENT
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(2) General
Application. For greater certainty, the Lenders acknowledge
and agree that, without limiting the generality of the provisions of Section 11.7(1), those provisions will have application if and
whenever any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) on account of any
money owing or payable by the Borrower or the Borrower to it in excess of its
Pro Rata Share thereof determined as at the date of this Agreement prior to the
making of any Loan.
11.8 Lenders
May Debit Accounts
The
Borrower hereby authorizes and directs each Lender, in such Lender’s discretion,
to debit automatically, by mechanical, electronic or manual means, any bank
account of the Borrower maintained with such Lender (1) for all regularly
scheduled amounts payable by the Borrower under this Agreement, including the
repayment of principal and the payment of interest, fees and all charges for the
keeping of that bank account, without any prior notification to the Borrower and
(2) otherwise, for all other amounts payable by the Borrower under the other
Loan Documents at any time following five (5) Business Days’ prior notification
by such Lender to the Borrower of its intention to so debit any such bank
account. The Lenders shall notify the Borrower as to the particulars
of those debits in the normal course.
SECTION 12 -
MISCELLANEOUS
12.1 Notices;
Effectiveness; Electronic Communications
(1) Notices
Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except
as-provided in Subsection 12.1(2) below), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier to the addresses or telecopier numbers
specified on Schedule 1.1(29) in respect of a
Lender or, if to the Borrower, as set out below.
The
Borrower:
|
Manulife
Financial Corporation
000
Xxxxx Xxxxxx Xxxx
Xxxx
Xxxxx
Xxxxxxx,
Xxxxxxx
Xxxxxx
M4W IE5
|
||
Attention:
|
Xxxxx
Xxxxxx
Senior
Vice President and Treasurer
|
||
Tel:
Fax:
|
(000)
000-0000
(000)
000-0000
|
||
and
Xxxx-Xxxx
Bisnaire
Senior
Executive Vice President Business Development and General
Counsel
|
|||
Tel:
Fax:
|
(000)
000-0000
(000)
000-0000
|
CREDIT
AGREEMENT
- 50
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Notices
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
given on a business day between 9:00 A.M. and 5:00 P.M. local time
where the recipient is located, shall be deemed to have been given at
9:00 A.M. on the next business day for the recipient). Notices delivered
through electronic communications to the extent provided in Subsection 12.1(2) below, shall be effective as provided in said
Subsection 12.1(2).
(2) Electronic
Communications. Notices and communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Required Lenders, provided that the foregoing shall not apply to notices to any
Lender of Loans to be made if such Lender has notified the Borrower and the
other Lenders that it is incapable of receiving notices under such Article by
electronic communication. The Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.
Unless
the Required Lenders otherwise prescribe, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication
is available and identifying the website address therefor.
(3) Change of Address
Etc. Any party hereto may change its address or telecopier
number for notices and other communications hereunder by notice to the other
parties hereto.
12.2 No
Waiver; Cumulative Remedies
No
failure to exercise and no delay in exercising, on the part of any Lender, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
CREDIT
AGREEMENT
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12.3 Survival
of Representations and
Warranties
All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the making of the Loans
hereunder.
12.4 Expenses;
Indemnity; Damage Waiver
(1) Costs and
Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Lenders and their Affiliates, including
the reasonable fees, charges and disbursements of counsel for the Lenders, in
connection with the Credit Facility provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by any Lender, including the reasonable fees, charges and
disbursements of counsel, in connection with the enforcement or protection of
its rights in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or in connection with the Loans made,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.
(2) Indemnification
by the Borrower. The Borrower shall indemnify each Lender, and
each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower arising
out of, in connection with, or as a result of (i) the execution or delivery of
this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance or non-performance by the
Borrower of its respective obligations hereunder or thereunder or the
consummation or non-consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or release of hazardous
materials on or from any property owned or operated by the Borrower, or any
environmental liability related in any way to the Borrower, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by the Borrower and regardless of whether
any Indemnitee is a party thereto, provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrower against an Indemnitee for breach in bad faith of such
Indemnitee's obligations hereunder or under any other Loan Document, if the
Borrower has obtained a final and nonappealable judgment in its favour on such
claim as determined by a court of competent jurisdiction, nor shall it be
available in respect of matters specifically addressed in Sections 4.7, 4.8 and 12.5(1).
CREDIT
AGREEMENT
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52 -
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(3) Waiver of
Consequential Damages Etc. To the fullest extent permitted by
Applicable Law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for indirect, consequential,
punitive, aggravated or exemplary damages (as opposed to direct damages) arising
out of, in connection with, or as a result of, this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby (or any breach
thereof), the transactions contemplated hereby or thereby, any Loan or the use
of the proceeds thereof. No Indemnitee shall be liable for any damages arising
from the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby.
(4) Payments. All
amounts due under this Section shall be payable promptly after demand
therefor. A certificate of a Lender setting forth the amount or
amounts owing to the Lender or a Related Party, as the case may be, as specified
in this Section, including reasonable detail of the basis of calculation of the
amount or amounts, and delivered to the Borrower shall be conclusive absent
manifest error.
12.5 Successors and Assigns
(1) Successors and
Assigns. The provisions of this Agreement and the other Loan
Documents shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of Subsection
12.5(2), (ii) by way of participation in
accordance with the provisions of Subsection 12.5(4), or (iii) by way of pledge or assignment
of a security interest subject to the restrictions of Subsection 12.5(5) (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in the
Loan Documents, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in Subsection 12.5(3) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(2) Assignment by
Lenders. After the Availability Period, any Lender may at any
time assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) and the other Loan Documents, if
applicable; provided that:
|
(a)
|
except
if an Event of Default has occurred and is continuing or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund
with respect to a Lender, the aggregate amount of the Commitment being
assigned (which for this purpose includes Loans outstanding thereunder)
or, if the applicable Commitment is not then in effect, the principal
outstanding balance of the Loan of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the applicable Lender or,
if “Trade Date” is specified in the
|
CREDIT
AGREEMENT
- 53
-
|
|
Assignment
and Assumption, as of the Trade Date) shall not be less than C$10,000,000,
unless, so long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents to a lower amount (each such consent not to be
unreasonably withheld or delayed);
|
|
(b)
|
each
partial assignment shall be made as an assignment of a proportionate part
of all the assigning Lender’s rights and obligations under this Agreement
and the other Loan Documents, if applicable, with respect to the Loan or
the Commitment assigned;
|
|
(c)
|
any
assignment must be approved by the Borrower (such approval not to be
unreasonably withheld or delayed) unless the proposed assignee is itself
already a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender or a Event of Default has occurred and is continuing;
and
|
|
(d)
|
the
parties to each assignment shall execute and deliver to the applicable
Lender an Assignment and
Assumption.
|
From and
after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and the other
Loan Documents, if applicable, and, to the extent of the interest assigned by
such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement and the other Loan Documents, if applicable, including any
collateral security, and the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement and the other Loan Documents, if applicable,
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement and the other Loan
Documents, if applicable, such Lender shall cease to be a party thereto) but
shall continue to be entitled to the benefits of Sections 4.7, 4.8, 4.9, 12.5(1) and 12.5(2), and shall continue to be liable for any
breach of this Agreement and the other Loan Documents, if applicable, by such
Lender, with respect to facts and circumstances occurring prior to the effective
date of such assignment. Any assignment or transfer by a Lender of
rights or obligations under this Agreement and the other Loan Documents, if
applicable, that does not comply with this paragraph shall be treated for
purposes of this Agreement and the other Loan Documents, if applicable, as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (d) of this Section. Any payment by an
assignee to an assigning Lender in connection with an assignment or transfer
shall not be or be deemed to be a repayment by the Borrower or a new Loan to the
Borrower.
(3) Participations. Any
Lender may at any time, with the consent of, or notice to, the Borrower, not to
be unreasonably withheld or delayed (so long as no Event of Default has occurred
and is continuing in which case no such consent is required) sell participations
to any Person (other than a natural person, the Borrower or any Affiliate of the
Borrower) (each, a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement and the other
Loan Documents, if applicable, shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower and the other Lenders shall
continue to deal solely and directly with such Lender in connection with
such
CREDIT
AGREEMENT
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Lender’s
rights and obligations under this Agreement and the other Loan Documents, if
applicable. Any payment by a Participant to a Lender in connection
with a sale of a participation shall not be or be deemed to be a repayment by
the Borrower or a new Loan to the Borrower.
Subject
to Subsection 12.5(4), the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 4.7, 4.8, 4.9, 4.10 and 4.11 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Subsection 12.5(4). To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 12.6 as though it were a Lender, provided such
Participant agrees to be subject to Section 12.7 as
though it were a Lender.
(4) Limitations upon
Participation Rights. A Participant shall not be entitled to
receive any greater payment under Section 4.7 and
4.8 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 4.8 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 4.8(5) as though it were a Lender.
(5) Certain
Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement or
any Loan to secure obligations of such Lender, but no such pledge or assignment
shall release such Lender from any of its obligations hereunder or substitute
any such pledgee or assignee for such Lender as a party
hereto.
12.6 Right
of Set-off
If an
Event of Default has occurred and is continuing, each of the Lenders and each of
their respective Affiliates is hereby authorized at any time and from time to
time to set off and apply any and all deposits (general or special, time or
demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender or any such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement or any other Loan Document to such Lender, irrespective of whether or
not such Lender has made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower may be contingent or
unmatured or are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of each the Lenders and their respective Affiliates under this Section
are in addition to other rights and remedies (including other rights of setoff,
consolidation of accounts and bankers’ lien) that the Lenders or their
respective Affiliates may have. Each Lender agrees to notify promptly the
Borrower after any such setoff and application, but the failure to give such
notice shall not affect the validity of such setoff and
application. If any Affiliate of a Lender exercises any rights under
this Section, it shall share the benefit received in accordance with Section 12.7 as if the benefit had been received by the Lender
of which it is an Affiliate.
CREDIT
AGREEMENT
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12.7 Sharing
of Payment by Lenders
If any
Lender, by exercising any right of setoff or counterclaim or otherwise, obtains
any payment or other reduction that might result in such Lender receiving
payment or other reduction of a proportion of the aggregate amount of its Loans
and accrued interest thereon or other obligations hereunder greater than its pro
rata share thereof as provided herein, then the Lender receiving such payment or
other reduction shall (i) notify the other Lenders of such fact, and
(ii) purchase (for cash at face value) participations in the Loans and such
other obligations of the other Lenders, or make such other adjustments as shall
be equitable, so that the benefit of all such payments shall be shared by the
Lenders rateably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them,
provided that
|
(a)
|
if
any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest,
|
|
(b)
|
the
provisions of this Section shall not be construed to apply to (x) any
payment made by the Borrower pursuant to and in accordance with the
express terms of any Loan Document or (y) any payment obtained by a
Lender as consideration for the assignment of or sale of a participation
in any of its Loans to any assignee or participant, other than to the
Borrower or any Affiliate of the Borrower (as to which the provisions of
this Section shall apply); and
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(c)
|
the
provisions of this Section shall not be construed to apply to (w) any
payment made while no Event of Default has occurred and is continuing in
respect of obligations of the Borrower to such Lender that do not arise
under or in connection with the Loan Documents, (x) any payment made in
respect of an obligation that is secured by a Lien or that is permitted
hereunder or that is otherwise entitled to priority over the Borrower’s
obligations under or in connection with the Loan Documents, (y) any
reduction arising from an amount owing to the Borrower upon the
termination of derivatives entered into between the Borrower and such
Lender, or (z) any payment to which such Lender is entitled as a
result of any form of credit protection obtained by such
Lender.
|
The
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under Applicable Law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrower rights of setoff
and counterclaim and similar rights of Lenders with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
12.8 Counterparts;
Integration; Effectiveness; Electronic Execution
(1) Counterparts;
Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
and any separate letter agreements with respect to fees payable to the Lenders
constitute the entire contract among the parties relating to the
subject
CREDIT
AGREEMENT
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matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in the
conditions precedent Section(s) of this Agreement, this Agreement shall become
effective when it has been executed by the Lenders and when the Lenders have
received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or by sending a scanned copy by
electronic mail shall be effective as delivery of a manually executed
counterpart of this Agreement.
(2) Electronic
Execution of Assignments. The words “execution”, “signed”,
“signature” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any Applicable Law, including Parts 2 and 3 of the Personal Information Protection and
Electronic Documents Act (Canada), the Electronic Commerce Act, 2000
(Ontario) and other similar federal or provincial laws based on the Uniform
Electronic Commerce Act of the Uniform Law Conference of Canada or its Uniform
Electronic Evidence Act, as the case may be.
12.9 Severability
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12.10 Entire
Agreement
This
Agreement together with the Fee Letter represents the entire agreement of the
Borrower and the Lenders with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties by the Borrower or
any Lender relative to subject matter hereof not expressly set forth or referred
to herein. The parties agree that in light of the confidentiality provisions in
Section 12.13 hereof, the Non-Disclosure Agreements
should be terminated upon the release publicly on November 6, 2008 of the
third quarter results of the Borrower.
12.11 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 in that
Province.
12.12 Acknowledgements
The
Borrower hereby acknowledges that:
(1) no
Lender has any fiduciary relationship with or duty to the Borrower arising out
of or in connection with this Agreement and the other Loan Documents, and the
relationship between the
CREDIT
AGREEMENT
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Lenders,
on one hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(2) no
joint venture is created hereby or otherwise exists by virtue of the
transactions contemplated hereby among the Lenders or among the Borrower and the
Lenders.
12.13 Treatment
of Certain Information; Confidentiality
(1) Each
of the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to it, its
Affiliates and its and its Affiliates’ respective partners, directors, officers,
employees, agents, advisors and representatives (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority), (c) to the extent required by Applicable Laws or regulations or by
any subpoena or similar legal process, (d) to any other party hereto,
(e) in connection with the exercise of any remedies hereunder or under any
other Loan Document or any action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement and the other Loan Documents, if applicable, or
(ii) any actual or prospective counterparty (or its advisors) to any swap,
derivative, credit-linked note or similar transaction relating to the Borrower
and its obligations, (g) with the consent of the Borrower or (h) to the extent
such Information (x) becomes publicly available other than as a result of a
breach of this Section or (y) becomes available to any Lender on a
non-confidential basis from a source other than the Borrower.
(2) For
purposes of this Section, “Information” means all
information received in connection with this Agreement from the Borrower
relating to the Borrower or any of its Subsidiaries or any of their respective
businesses, other than any such information that is available to any Lender on a
non-confidential basis prior to such receipt. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential
information. In addition, the Lenders may disclose to any agency or
organization that assigns standard identification numbers to loan facilities
such basic information describing the facilities provided hereunder as is
necessary to assign unique identifiers (and, if requested, supply a copy of this
Agreement), it being understood that the Person to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to make available to the public only such Information as such person normally
makes available in the course of its business of assigning identification
numbers.
(1)
CREDIT
AGREEMENT
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year above written.
MANULIFE FINANCIAL
CORPORATION,
as
Borrower
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|
By:
|
“Xxxxx
Xxxxxxxxxxx”
|
Name: Xxxxx
Xxxxxxxxxxx
|
|
Title: Senior
Executive Vice-President and Chief Financial Officer
|
|
By:
|
“Xxxx-Xxxx
(J-P) Bisnaire”
|
Name: Xxxx-Xxxx
(J-P) Bisnaire
|
|
Title: Senior
Executive Vice-President Business Development and General
Counsel
|
|
CREDIT
AGREEMENT
BANK OF
MONTREAL,
as
Lender
|
|
By:
|
“Xxxx
Xxxx”
|
Name: Xxxx
Xxxx
|
|
Title: Managing
Director
|
|
By:
|
|
Name:
|
|
Title:
|
|
CANADIAN IMPERIAL BANK OF
COMMERCE,
as
Lender
|
|
By:
|
“Xxxxx
X. Xxxxx”
|
Name: Xxxxx
X. Xxxxx
|
|
Title: Executive
Director
|
|
By:
|
“Xxxxx
Xxxxxx”
|
Name: Xxxxx
Xxxxxx
|
|
Title: Executive
Director
|
|
NATIONAL BANK OF
CANADA,
as
Lender
|
|
By:
|
“Xxx
Xxxxxxxxx”
|
Name: Xxx
Xxxxxxxxx
|
|
Title: Managing
Director
|
|
By:
|
“Xxx
Xxxxxxxxx”
|
Name: Xxx
Xxxxxxxxx
|
|
Title: Director
|
|
ROYAL BANK OF
CANADA,
as
Lender
|
|
By:
|
“Xxxxxxx
X.X. Xxxxxx”
|
Name: Xxxxxxx
X.X. Xxxxxx
|
|
Title: Authorized
Signatory
|
|
By:
|
|
Name:
|
|
Title:
|
|
THE BANK OF NOVA
SCOTIA,
as
Lender
|
|
By:
|
“Shiny
Xxxxxx”
|
Name: Shiny
Xxxxxx
|
|
Title: Director
|
|
By:
|
“Xxxx
Xxxxxxx”
|
Name: Xxxx
Xxxxxxx
|
|
Title: Associate
Director
|
|
THE TORONTO-DOMINION
BANK,
as
Lender
|
|
By:
|
“Xxxxxxx
Xxxxxxxx”
|
Name: Xxxxxxx
Xxxxxxxx
|
|
Title: Analyst,
National Accounts
|
|
By:
|
“Xxxxxxxx
Xxxxxx”
|
Name: Xxxxxxxx
Xxxxxx
|
|
Title: Associate
Vice President, Credit Management, Commercial National
Accounts
|
|
CREDIT
AGREEMENT
CREDIT
AGREEMENT
Schedule
1.1(2) – Acceptance Note
[C$] Toronto,
Ontario
,
FOR VALUE
RECEIVED, THE UNDERSIGNED, MANULIFE FINANCIAL CORPORATION, a corporation formed
under the laws of Canada (the “Borrower”), hereby
unconditionally promises to pay to the order of [INSERT NAME OF LENDER] (the
“Lender”) at its office
located at [ADDRESS OF
OFFICE], in lawful money of Canada and in immediately available funds,
the principal amount of [ ]
[CANADIAN DOLLARS
(C$ ). The undiscounted
principal amount hereof shall be repaid on
,
*. The Borrower further agrees that
interest shall be paid hereon, in advance, by the Lender discounting the face
amount of this Acceptance Note in the manner referred to in Sections 3.2 and 3.4 of the Credit
Agreement described below (capitalized terms used herein without definition
being defined as set forth therein) as BA Discount Proceeds.
This
Acceptance Note: (A) is one of the Acceptance Notes referred to in the credit
agreement dated as of _________, 2008, among Manulife Financial Corporation, and
(b) the banks and other financial institutions from time to time parties thereto
(the “Lenders”) (as
amended, supplemented or otherwise modified from time to time, the “Credit Agreement”); and (B) is
subject to the provisions of the Credit Agreement.
Upon the
occurrence of any one or more of the Events of Default, all amounts then
remaining unpaid on this Acceptance Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit
Agreement.
All
parties now and hereafter liable with respect to this Acceptance Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
THIS NOTE
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE PROVINCE OF ONTARIO.
MANULIFE
FINANCIAL CORPORATION
By:
Name:
Title
CREDIT
AGREEMENT
Schedule
1.1(8) – Applicable
Margin
APPLICABLE
MARGIN
[Applicable
Margin information has been omitted]
CREDIT
AGREEMENT
Schedule
1.1(29) –
Commitment
Name
and Address of Lending Office of Lender
|
Commitment
|
Bank
of Montreal
First
Canadian Place, 19th floor
Toronto,
Ontario M5X 1A1
Attention: Xxxxxxx
Xxxxx
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
E-Mail: xxxxxxx.xxxxx@xxx.xxx
|
C$
545,500,000
|
Canadian
Imperial Bank of Commerce
Credit
Processing Services
00
Xxxxxx Xxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Name: Xxxxxxx
Xxxxxxx / MaggieYang / Xxxxx X. Xxxxx
Phone: (000)
000-0000 /
(000) 000-0000
Facsimile: (000)
000-0000
E-mail: xxxxxxx.xxxxxxx@xxxx.xx /
xxxxxx.xxxx@xxxx.xx /
Xxxxx.X.Xxxxx@xxxx.xx
|
C$
545,500,000
|
National
Bank of Canada
x/x
Xxx Xxxxxxxx Xxxxx
000
Xxxx Xxxxxx West
Suite
3200, X.X. Xxx 00
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxx
Xxxxxxxxx
Corporate Banking
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
E-Mail: Xxx.Xxxxxxxxx@xxxxxxxxxxx.xxx
|
C$
272,500,000
|
Royal
Bank of Canada
Credit
And Transaction Management
000
Xxx Xxxxxx, 00xx Xxxxx, Xxxxx Tower
Royal
Bank Plaza
Toronto,
Ontario M5J 2W7
Attention: Xxxxx
Xxxx
Telephone: (000)
000 0000
Facsimile: (000)
000 0000
E-mail: xxxxx.xxxx@xxxxx.xxx
|
C$
545,500,000
|
The
Bank of Nova Scotia
GWS
Loan Administration and Agency Services
000
Xxxx Xxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxx
Xxxx
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
E-Mail: xxxx_xxxx@xxxxxxxxxxxxx.xxx
|
C$
545,500,000
|
The
Toronto-Dominion Bank
000
Xxxxxxxxxx Xxxxxx Xxxx
00xx
Xxxxx, Xxxxxxxx Xxxxxxx Xxxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxx
XxXxxx / Xxxx Xxxxxxxx
Telephone: (000)
000-0000 /
(000) 000-0000
Facsimile: (000)
000-0000
E-Mail: xxxx.xxxxxx@xx.xxx /
xxxx.xxxxxxxx@xx.xxx
|
C$
545,500,000
|
Total:
|
C$
3,000,000,000
|
CREDIT
AGREEMENT
Schedule
3.2(3) – Rollover Notice
TO:
|
Bank
of Montreal
Canadian
Imperial Bank of Commerce
National
Bank of Canada
Royal
Bank of Canada
The
Bank of Nova Scotia
The
Toronto-Dominion Bank
|
FROM:
|
Manulife
Financial Corporation
|
DATE:
|
n
|
1. This
rollover notice is delivered to you, as lenders, pursuant to Section 3.2(3) of the credit agreement made as of November 6,
2008 between , inter
alia, Manulife Financial Corporation (the “Borrower”), as borrower, Bank
of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal
Bank of Canada, The Bank of Nova Scotia, The Toronto-Dominion Bank, and the
financial institutions from time to time parties thereto as lenders, as amended
from time to time (the “Credit
Agreement”). All capitalized terms used in this rollover
notice that are defined in the Credit Agreement have the same meanings
herein.
2. The
Borrower hereby requests the rollover of the following Bankers’
Acceptance(s):
(a) Rollover
Date: ___________________________________________________
(c) Amount
of each Bankers’ Acceptance
Amount
|
New term (in months)
|
||
C$
|
|||
Manulife
Financial Corporation
|
||
By:
|
||
Name:
|
||
Title:
|
CREDIT
AGREEMENT
Schedule
3.3 – Conversion Notice
TO:
|
Bank
of Montreal
Canadian
Imperial Bank of Commerce
National
Bank of Canada
Royal
Bank of Canada
The
Bank of Nova Scotia
The
Toronto-Dominion Bank
|
FROM:
|
Manulife
Financial Corporation
|
DATE:
|
n
|
1. This
conversion notice is delivered to you, as lenders, pursuant to Section 3.3 of the credit agreement
made as of November 6, 2008 between , inter alia, Manulife
Financial Corporation (the “Borrower”), as borrower, Bank
of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal
Bank of Canada, The Bank of Nova Scotia, The Toronto-Dominion Bank, and the
financial institutions from time to time parties thereto as lenders, as amended
from time to time (the “Credit
Agreement”). All capitalized terms used in this conversion
notice that are defined in the Credit Agreement have the same meanings
herein.
2. The
Borrower hereby requests the conversion of Prime Rate Loans into Bankers’
Acceptance(s) as follows:
(a) Conversion
Date: ____________
(b) Amount
to be converted:
C$
(c) Amount
of Bankers’ Acceptance(s)
Amount
|
Term (in months)
|
||
C$
|
|||
MANULIFE
FINANCIAL CORPORATION
|
||
By:
|
||
Name:
|
||
Title:
|
CREDIT
AGREEMENT
Schedule
4.6(1) – Lender Payment Information
[Lender
bank account/wire transfer information has been omitted.]
CREDIT
AGREEMENT
Schedule
5.14 –
Subsidiaries
The
Manufacturers Life Insurance Company
Manulife
Canada Limited
Xxxx
Xxxxxxx Life Insurance Company (U.S.A.)
Manulife
(International) Limited
Manulife
Life Insurance Company
Xxxx
Xxxxxxx Variable Life Insurance Company
Xxxx
Xxxxxxx Life Insurance Company
Manulife
Bank of Canada
Xxxx
Xxxxxxx Reassurance Company, Ltd.
Xxxx
Xxxxxxx Life Insurance Company of New York
Xxxx
Xxxxxxx Investment Management Services, LLC
Manufacturers
Life Reinsurance Limited
CREDIT
AGREEMENT
Schedule
7.2(a) – Compliance Certificate
[Date]
To: Bank
of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal
Bank of Canada, The Bank of Nova Scotia and The Toronto-Dominion Bank, as
lenders (collectively, the “Lenders”)
Dear
l:
The
undersigned, Manulife Financial Corporation (the “Borrower”), refers to the
credit agreement dated as of November 6, 2008 (as amended, supplemented or
restated from time to time, the “Credit Agreement”, the terms
defined therein being used herein as therein defined) among the Borrower and the
Lenders. This [quarterly/annual] Compliance
Certificate is provided pursuant to Section 7.2(a) of the Credit Agreement for
the [Fiscal
Year/Quarter] ending on l (the “Period”).
I,
_______________________________, the duly appointed Responsible Officer of the
Borrower, in such capacity and without personal liability, and being familiar
with the provisions of the Credit Agreement, hereby certify
that:
1.
|
To
the best of my knowledge, information and belief, and after due inquiry,
no Default or Event of Default has
occurred.
|
2.
|
As
of [date]:
|
|
(a)
|
The
MCCSR Ratio of MLI was ___________________ and the MCCSR Guideline was
[150%]
|
|
(b)
|
The
Consolidated Funded Debt to Total Capital percentage of the Borrower was
_____% and the required percentage was [30%]1
|
3.
|
As
of [date], the
Borrower, on an unconsolidated basis,
had:
|
|
(a)
|
Indebtedness
in the amount of
$___________________;
|
|
(b)
|
contingent
liabilities by way of senior guarantee, letter of credit or other senior
support obligations in respect of its Subsidiaries in the amount of
$___________________;
|
|
(c)
|
dividends
received from Subsidiaries in the amount of $___________________ for the
twelve months then ended;
|
|
(d)
|
preferred
shares outstanding of $___________________;
and
|
1 Detailed
calculations to be attached including determination of Acquisition Percentage,
if applicable.
CREDIT
AGREEMENT
|
(e)
|
contingent
liabilities by way of subordinated guarantee or other subordinated support
obligations in respect of its Subsidiaries in the amount of
$___________________.
|
4.
|
As
of [date]:
|
|
(a)
|
Aggregate
Specified Debt was $ __________ [the particulars being
attached hereto as Annex “A”];
|
|
(b)
|
The
aggregate Indebtedness secured by Liens granted under Section 9.1(b) was
$__________ [the
particular being attached hereto as Annex “B”];
and
|
|
(c)
|
The
aggregate amount dispositions made under Section 9.2(1) was $___________
[the particular
being attached hereto as Annex “C”].
|
Name:
|
Title:
|
CREDIT
AGREEMENT
Exhibit
A – Assignment and Assumption Agreement
This
Assignment and Assumption Agreement (the “Assignment and Assumption”) is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of
Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (as amended from time to time, the “Credit Agreement”), receipt of
a copy of which is hereby acknowledged by the Assignee.
For an
agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with Annex I hereto and the Credit
Agreement, as of the Effective Date inserted by the Assignor as contemplated
below (i) all of the Assignor’s rights and obligations in its capacity as a
Lender under the Credit Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of
the Assignor under the respective facilities identified below and (ii) to
the extent permitted to be assigned under Applicable Law, all claims, suits,
causes of action and any other right of the Assignor (in its capacity as a
Lender) against any Person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan-transactions governed thereby or in any
way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor: _________________________
2. Assignee: _________________________
[and is an Affiliate/Approved Fund of
[identify Lender]2 ]
3. Borrower(s): _________________________
4. Credit
Agreement: The
Credit Agreement made among Manulife Financial Corporation, Bank of Montreal,
Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of
Canada, The Bank of Nova Scotia, The Toronto-Dominion Bank, each of the
Financial Institutions and Other Entities from time to time parties thereto and
The Bank of Nova Scotia, as Documentation Co-ordinator
CREDIT
AGREEMENT
|
5. Assigned
Interest:
Facility
Assigned
|
Aggregate
Amount of Commitment/Loans for all Lenders3
|
Amount
of Commitment/Loans Assigned2
|
Percentage
Assigned of Commitment/Loans4
|
CUSIP
Number
(if
applicable)
|
$
|
$
|
%
|
||
$
|
$
|
%
|
||
$
|
$
|
%
|
6. Trade
Date: ____________________5
Effective
Date: ___________, 20___ [TO BE INSERTED BY ASSIGNOR]
The terms
set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME
OF ASSIGNOR]
|
||
By:
|
||
Title:
|
||
ASSIGNEE
[NAME
OF ASSIGNEE]
|
||
By:
|
||
Title:
|
[Consented
to:] 6
[NAME OF
RELEVANT PARTY]
By____________________________
Title:
3 Amount
to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective
Date.
4 Set
forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all
Lenders thereunder.
5 To be
completed if the Assignor and the Assignee intend that the minimum assignment
amount is to be determined as of the Trade Date.
CREDIT
AGREEMENT
ANNEX 1
to Assignment and Assumption
Credit
Agreement made as of ______________, 2008,
among
Manulife Financial Corporation, Bank of Montreal,
Canadian
Imperial Bank of Commerce, National Bank of Canada,
Royal
Bank of Canada, The Bank of Nova Scotia,
The
Toronto-Dominion Bank, each of the Financial Institutions and Other Entities
from time to time parties thereto and The Bank of Nova Scotia, as Documentation
Co-ordinator
STANDARD
TERMS AND CONDITIONS FOR
ASSIGNMENT
AND ASSUMPTION
1.
Representations and Warranties.
1.1 Assignor.
The Assignor (a) represents and warrants that (i) it is the legal and beneficial
owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of
any lien, encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document7, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.
1.2 Assignee.
The Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Credit Agreement (subject to
receipt of such consents as may be required under the Credit Agreement), (iii)
from and after the Effective Date, it shall be bound by the provisions of the
Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section ___ thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision
CREDIT
AGREEMENT
independently
and without reliance on any other Lender, and (v) if it is a Foreign Lender8, attached to the Assignment and Assumption is
any documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by the Assignee; and (b) agrees
that (i) it will, independently and without reliance on any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
2.
Payments. From and after the Effective Date, all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to, on or after
the Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments for periods prior to the Effective Date or with respect
to the making of this assignment directly between themselves.
3.
General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns. This Assignment and Assumption may be executed in any number
of counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy or by sending a scanned copy by electronic mail shall be effective as
delivery of a manually executed counterpart of this Assignment and Assumption.
This Assignment and Assumption shall be governed by, and construed in accordance
with, the law governing the Credit Agreement.
8 The
concept of “Foreign Lender” should be conformed to the section in the Credit
Agreement governing withholding taxes and gross-up.
CREDIT
AGREEMENT