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Exhibit 10e
3357392 CANADA INC.
Cdn. $55,000,000
Senior Subordinated Partial PIK Notes
due April 17, 2009
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NOTE PURCHASE AGREEMENT
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Dated April 17, 1997
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TABLE OF CONTENTS
PAGE
1. AUTHORIZATION OF NOTES 1
2. SALE AND PURCHASE OF NOTES 1
3. CLOSING 1
4. CONDITIONS TO CLOSING 2
4.1. Representations and Warranties 2
4.2. Performance; No Default 2
4.3. Compliance Certificates 2
4.4. Notes 3
4.5. Opinion of Counsel 3
4.6. Purchase Permitted By Applicable Law, etc. 3
4.7. Changes in Corporate Structure 4
4.8. Proceedings and Documents 4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 4
5.1. Organization; Power and Authority 4
5.2. Authorization, etc. 4
5.3. Disclosure 5
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates 5
5.5. Property 6
5.6. Compliance with Laws, Other Instruments, etc. 7
5.7. Governmental Authorizations, etc. 7
5.8. Litigation; Observance of Agreements, Statutes and Orders 8
5.9. Taxes 8
5.10. Title to Property; Leases. 8
5.11. Licenses, Permits, etc. 9
5.12. Pension Plans 9
5.13. Private Offering by the Company 9
5.14. Use of Proceeds; Margin Regulations 9
5.15. Existing Indebtedness, Future Liens 10
5.16. Foreign Assets Control Regulations, etc. 10
5.17. Status under Certain Statutes 10
5.18. Environmental Matters 11
5.19. Material Agreements 11
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5.20. Books and Records 11
6. REPRESENTATIONS OF THE PURCHASER 12
6.1. Purchase for Investment 12
6.2. Source of Funds 12
7. INFORMATION AS TO COMPANY 12
7.1. Financial and Business Information 12
7.2. Officer's Certificate 17
7.3. Inspection 17
8. PAYMENT OF THE NOTES 18
8.1. Required Repayments 18
8.2. Optional Prepayments with Make-Whole Amount 18
8.3. Allocation of Partial Prepayments 19
8.4. Maturity; Surrender, etc. 19
8.5. Purchase of Notes 19
8.6. Make-Whole Amount 19
9. AFFIRMATIVE COVENANTS 21
9.1. Compliance with Law 21
9.2. Insurance 21
9.3. Maintenance of Properties 22
9.4. Payment of Taxes and Claims 22
9.5. Corporate Existence, etc. 22
9.6. Maintenance of Net Worth. 23
9.7. Maintenance of Consolidated Indebtedness to
Net Worth Ratio. 23
9.8. Maintenance of Interest Coverage Ratio. 23
9.9. Maintenance of Leverage Ratio. 23
9.10. Maintenance of Parking Contracts. 23
9.11. Further Assurances 23
10. NEGATIVE COVENANTS 24
10.1. Transactions with Affiliates 24
10.2. Merger, Consolidation, etc. 24
10.3. Indebtedness 25
10.4. Liens 25
10.5. Disposal of Assets Generally 25
10.6. Change in Business 25
10.7. Distributions 25
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10.8. Investments 26
10.9. Lease-Backs 26
10.10. Subsidiaries 26
10.11. Maintenance and Ownership of Subsidiaries 26
10.12. Compromise of Accounts. 27
11. EVENTS OF ▇▇▇▇▇▇▇ ▇▇
▇▇. REMEDIES ON DEFAULT, ETC. 30
12.1. Acceleration 30
12.2. Other Remedies 31
12.3. Rescission 31
12.4. No Waivers or Election of Remedies, Expenses, etc. 32
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. 32
13.1. Registration of Notes. 32
13.2. Transfer and Exchange of Notes. 32
13.3. Replacement of Notes. 33
14. SUBORDINATION 33
14.1. Notes Subordinated to Permitted Senior Indebtedness 33
14.2. Payment Over of Proceeds Upon Bankruptcy 34
14.3. Suspension of Payments When Permitted Senior Indebtedness in Default 35
14.4. Payment Permitted If No Default 36
14.5. Subrogation to Rights of Holders of Permitted Senior Indebtedness 36
14.6. Provisions Solely to Define Relative Rights 37
14.7. Payments Held in Trust 38
14.8. No Waiver of Subordination Provisions 38
14.9. Reliance on Judicial Order or Certificate of Liquidating Agent 38
15. PAYMENTS ON NOTES 39
15.1. Place of Payment. 39
15.2. Home Office Payment. 39
16. EXPENSES, ETC. 40
16.1. Transaction Expense. 40
16.2. Survival 40
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
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AGREEMENT 40
18. AMENDMENT AND WAIVER. 41
18.1. Requirements. 41
18.2. Solicitation of Holders of Notes 41
18.3. Binding Effect, etc. 42
18.4. Notes held by Company, etc. 42
19. NOTICES 42
20. REPRODUCTION OF DOCUMENTS 43
21. SUBSTITUTION OF PURCHASER 43
22. MISCELLANEOUS 44
22.1. Successors and Assigns 44
22.2. Payments Due on Non-Business Days. 44
22.3. Severability 44
22.4. Construction 44
22.5. Counterparts 44
22.6. Governing Law 45
SCHEDULES/EXHIBITS
Schedule A Information Relating to Purchasers
Schedule B Defined Terms
Schedule 5.4 Subsidiaries
Schedule 5.5 Property
Schedule 5.8 Litigation
Schedule 5.14 Use of Proceeds
Schedule 5.15 Existing Indebtedness
Schedule 5.19 Material Agreements
Exhibit 1 Form of Note
Exhibit 4.5 Form of Subsidiary Guaranty
Exhibit 11(e)-1 Form of Security Agreement
Exhibit 11(e)-2 Form of Opinion of Counsel to the Company
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3357392 CANADA INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
▇▇▇▇▇▇
Senior Subordinated Partial PIK Notes due April 17, 2009
April 17, 1997
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
3357392 Canada Inc., a corporation duly organized and validly existing
under the laws of the Province of Ontario (the "COMPANY"), agrees with you as
follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of Cdn. $55,000,000
aggregate original principal amount of its Senior Subordinated Partial PIK Notes
due April 17, 2009 (the "NOTES", such term to include any such notes issued in
substitution therefor pursuant to SECTION 13 of this Agreement (as hereinafter
defined) and Additional Notes issued in payment of interest thereon). The Notes
shall be substantially in the form set out in EXHIBIT 1, with such changes
therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in SCHEDULE B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in SECTION 3, Notes in the principal amount specified opposite your
name in SCHEDULE A at the purchase price of 100% of the principal amount
thereof.
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3. CLOSING.
The sale and purchase of the Notes to be purchased by you shall occur
at the offices of Fasken ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, at 8:00 a.m., Toronto time, at a
closing (the "CLOSING") on April 17, 1997 or on such other Business Day
thereafter on or prior to May 30, 1997 as may be agreed upon by the Company and
you. At the Closing the Company will deliver to you the Notes to be purchased by
you in the form of a single Note (or such greater number of Notes in
denominations of at least Cdn. $1,000,000 as you may request) dated the date of
the Closing and registered in your name (or in the name of your nominee),
against delivery by you to the Company or its order of immediately available
funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to account number
45-81113 at Canadian Imperial Bank of Commerce. If at the Closing the Company
shall fail to tender such Notes to you as provided above in this SECTION 3, or
any of the conditions specified in SECTION 4 shall not have been fulfilled to
your satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
4.1. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
4.2. PERFORMANCE; NO DEFAULT.
The Company shall have performed and compiled with all agreements and
conditions contained in this Agreement required to be performed or compiled with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
SCHEDULE 5.14) no Default or Event of Default shall have occurred and be
continuing.
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4.3. COMPLIANCE CERTIFICATES.
(a) OFFICER'S CERTIFICATE. The Company shall have delivered to you an
Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in SECTIONS 4.1 and 4.2 have been fulfilled.
(b) SECRETARY'S CERTIFICATES. The Company and each Guarantor shall have
delivered to you a certificate certifying as to (i) the charter and by-laws of
the Company and each Guarantor, (ii) the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and the Note Documents, and (iii) the incumbency of the officers
authorized to sign the Notes and the Note Documents.
(c) GOOD STANDING CERTIFICATE. Each of the Company and the Guarantors
shall have delivered a certificate of status, compliance, good standing or like
certificate issued by the appropriate government officials of its jurisdiction
of incorporation.
4.4. NOTES.
The Company shall have delivered to you the Notes duly executed.
4.5. SUBSIDIARY GUARANTY.
You shall have received the duly executed Subsidiary Guaranty
substantially in the form of EXHIBIT 4.5.
4.6. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
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4.7. CHANGES IN CORPORATE STRUCTURE.
The Company shall not have changed its jurisdiction of incorporation or
been a party to any merger or consolidation and shall not have succeeded to all
or any substantial part of the liabilities of any other entity, at any time
following the date of the most recent financial statements provided to you.
4.8. PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1. ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver this
Agreement and the Notes and to perform the provisions hereof and thereof.
5.2. AUTHORIZATION, ETC.
(a) This Agreement and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with their respective terms, except as such
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enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(b) The Subsidiary Guaranty and the Security Agreement have been duly
authorized by all necessary corporate action on the part of each Guarantor, and
upon execution and delivery thereof the Subsidiary Guaranty and the Security
Agreement will constitute, legal, valid and binding obligations of each
Guarantor enforceable against each Guarantor in accordance with their respective
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5.3. DISCLOSURE.
You have had the opportunity to conduct a review of the Company's
records and meet with representatives of the Company. The Company has responded
in all material respects to all requests for information and has accurately
answered all questions concerning the assets, properties, liabilities, financial
condition, business or prospects of the Company and its Subsidiaries. All
forecasts and projections supplied on behalf of the Company were prepared in
good faith, adequately disclosed all assumptions relevant thereto and are
reasonable estimates (at the date hereof) of the prospects for the business of
the Company and its Subsidiaries. This Agreement, the documents, certificates or
other writings delivered to you by or on behalf of the Company in connection
with the transactions contemplated hereby and the financial statements delivered
to you, taken as a whole, do not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Since the
date of the last financial statements delivered to you, there has been no change
in the financial condition, operations, business, properties or prospects of the
Company or any Subsidiary except changes that individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. There is no
fact known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the other documents,
certificates and other writings delivered to you by or on behalf of the Company
specifically for use in connection with the transactions contemplated hereby.
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5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.
(a) SCHEDULE 5.4 contains (except as noted therein) complete and
correct list of the Company's Subsidiaries as of the acquisition referenced on
SCHEDULE 5.14, showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each class of
its capital stock or similar equity interests outstanding owned by the Company
and each other Subsidiary.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in SCHEDULE 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in SCHEDULE 5.4).
(c) Each Subsidiary identified in SCHEDULE 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact
and each Subsidiary which is a party to the Subsidiary Guaranty and the Security
Agreement has the power and authority to execute and deliver the Subsidiary
Guaranty and the Security Agreement and to perform the provisions thereof.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements listed
on SCHEDULE 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
5.5. PROPERTY.
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There are no outstanding work orders requiring, in aggregate,
expenditures exceeding Cdn. $50,000 relating to the properties of the Company or
any Subsidiary from or required by any police or fire department, sanitation,
health, environmental or factory authorities or from any other federal,
provincial or municipal authority, nor are any matters relating to the
properties of the Company or any Subsidiary under discussion with any such
departments or authorities relating to work orders which could reasonably be
expected to result in expenditures exceeding Cdn. $50,000. As at the date
hereof, no part of the properties of the Company or any Subsidiary or the
buildings and fixtures located thereon has been taken or expropriated by any
federal, provincial, municipal or other competent authority nor has any written
notice or proceeding in respect thereof been delivered to the Company or any of
its Subsidiaries nor is the Company aware of any intent or proposal to give any
such notice or commence any proceedings. Except for Permitted Liens or as
specified in SCHEDULE 5.5, to the knowledge of the Company, the buildings and
fixtures are located entirely within the properties of the Company or any
Subsidiary in conformity with applicable set-back and coverage requirements and
no dwellings of abutting owners encroach upon the properties.
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5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
(a) The execution, delivery and performance by the Company of this
Agreement and the Note will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Subsidiary under, any indenture, mortgage,
deed or trust, loan purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to the Company or any Subsidiary or (iii) violate any provision of any statute
or other rule or regulation of any Governmental Authority applicable to the
Company or any Subsidiary.
(b) The execution, delivery and performance by the Guarantors of the
Subsidiary Guaranty and the Security Agreement will not (i) contravene, result
in any breach of, or constitute a default under, or result in the creation of
any Lien in respect of any property of any of the Guarantors under, any
indenture, mortgage, deed or trust, loan purchase or credit agreement, lease,
corporate charter or by-laws, or any other agreement or instrument to which any
of the Guarantors is bound or by which any of the Guarantors or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to any of the Guarantors or (iii) violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable to any of the
Guarantors.
5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company or any Guarantor of any Note
Document.
5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) Except as disclosed in SCHEDULE 5.8, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any property of the
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Company or any Subsidiary in any court or before any arbitrator of any kind or
before or by any Governmental Authority that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
5.9. TAXES.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (i) the amount of which is not
individually or in the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of Federal, state,
province, foreign or other taxes for all fiscal periods are adequate.
5.10. TITLE TO PROPERTY; LEASES.
The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
in each case free and clear of Liens prohibited by this Agreement. All leases
that individually or in the aggregate are Material, are valid and subsisting and
are in full force and effect in all material respects and all material amounts
owing thereunder have been paid by the Company or its Subsidiary.
5.11. LICENSES, PERMITS, ETC.
(a) The Company and its Subsidiaries own or possess all
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licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the Company
infringes in any material respect any license, permit, franchise, authorization,
patent, copyright, service ▇▇▇▇, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Subsidiaries
with respect to any patent, copyright, service ▇▇▇▇, trademark, trade name or
other right owned or used by the Company or any of its Subsidiaries.
5.12. PENSION PLANS.
Neither the Company nor any of its Subsidiaries has ever maintained or
contributed to any pension plans or beneficial plans including, without
limitation, (i) a multi-employer plan as defined under Section 3(37) of ERISA;
(ii) a defined benefit plan as defined under Section 3(35) of ERISA; or (iii) a
plan to which Section 302 of ERISA or Section 417 of the Internal Revenue Code
of the United States of America applies.
5.13. PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any person other than you and not more than two other Institutional Investors,
each of which has been offered the Notes at a private sale for investment.
Neither the Company nor anyone acting on its behalf has taken, or will take, any
action that would subject the issuance or sale of the Notes to the registration
requirements under applicable securities laws.
5.14. USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes solely as
set forth in SCHEDULE 5.14 and for no other purpose. No part of the proceeds
from the sale of the Notes hereunder will be used, directly or indirectly, for
the purpose of buying or carrying any margin stock within the meaning of
Regulation G of the Board of Governors of the Federal Reserve System (12 CFR
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207), or for the purpose of buying or carrying or trading in any securities
under such circumstances as to involve the Company in a violation of Regulation
X of said Board (12 CFR 224) or to involve any broker or dealer in a violation
of Regulation T of said Board (12 CFR 220). Margin stock does not constitute
more than 5% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 5% of the value of such assets. As used in this
Section, the terms "MARGIN STOCK" and "PURPOSE OF BUYING OR CARRYING" shall have
the meanings assigned to them in said Regulation G.
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5.15. EXISTING INDEBTEDNESS, FUTURE LIENS.
(a) Except as described therein, SCHEDULE 5.15 sets forth a complete
and correct list of all outstanding Indebtedness of the Company and its
Subsidiaries as of the date hereof. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such Subsidiary and
no event or condition exists with respect to any Indebtedness of the Company or
any Subsidiary that would permit (or that with notice or other lapse of time, or
both, would permit) one or more Persons to cause such Indebtedness to become due
and payable before its stated maturity or before its regularly scheduled dates
of payment.
(b) Except as disclosed in SCHEDULE 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien other than Permitted Liens.
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign asset control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17. STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.
5.18. ENVIRONMENTAL MATTERS.
Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or
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violation of the Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect. Except as
otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of any facts
which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned, leased or operated
by any of them or to other assets or their use, except, in each case, such as
could not reasonably be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or operated
by any of them and has not disposed of any Hazardous Materials in a manner
contrary to any Environmental Laws in each case in any manner that could
reasonably be expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or operated
by the Company or any of its Subsidiaries are in compliance with applicable
Environmental Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.
5.19. MATERIAL AGREEMENTS.
Neither the Company nor any of its Subsidiaries is a party or otherwise
subject to or bound or affected by any agreement or instrument which is material
to the business, operations, results of operations, assets, liabilities or
financial condition of the Company or any of its Subsidiaries taken as a whole
("MATERIAL AGREEMENT") except as set out in SCHEDULE 5.19. Except as set forth
in SCHEDULE 5.19, all such Material Agreements are in full force and effect,
unamended, and none of the Company or any such Subsidiary, or to the best of the
Company's knowledge, any other party to any Material Agreement is in material
default with respect thereto.
5.20. BOOKS AND RECORDS.
All books and records of the Company and its Subsidiaries have been
fully, properly and accurately kept and completed in accordance with GAAP and
there are no material inaccuracies or discrepancies of any kind contained or
reflected therein. The Company's and its Subsidiaries' records, systems,
controls, data or information are not recorded, stored, maintained, operated or
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otherwise wholly or partly dependent upon or held by any means (including any
electronic, mechanical or photographic process, whether computerized or not)
which (including all means of access thereto and therefrom) are not under the
direct control of the Company in all material respects.
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6. REPRESENTATIONS OF THE PURCHASER.
6.1. PURCHASE FOR INVESTMENT.
You represent that you are purchasing the Notes for your own account
and not with a view to the distribution thereof. You understand that the Notes
have not been registered under any securities acts and resale may be restricted
by applicable securities laws.
6.2. SOURCE OF FUNDS.
You represent that the source of funds to be used by you to pay the
purchase price of the Notes to be purchased by you hereunder does not include
assets of any employee benefit plan, other than a plan exempt from the coverage
of ERISA. As used in this SECTION 6.2, the terms "EMPLOYEE BENEFIT PLAN", shall
have the respective meanings assigned to such terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) QUARTERLY STATEMENTS -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Company and its Consolidated
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in shareholders' equity
and cash flows of the Company and its Consolidated Subsidiaries, for such
quarter and (in the case of the second and third quarters) for the portion of
the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
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respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments;
(b) ANNUAL STATEMENTS -- within 120 days after the end of each fiscal
year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its Consolidated
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in shareholder' equity
and cash flows of the Company and its Consolidated Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied
(A) by an opinion thereon of independent certified public accountants
of recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances, and
(B) a certificate of such accountants stating that they have reviewed
this Agreement and stating further whether, in making their audit, they have
become aware of any condition or event that then constitutes a Default or an
Event of Default, and, if they are aware that any such condition or event then
exists, specifying the nature and period of the existence thereof (it being
understood that such accountants shall not be liable, directly or indirectly,
for any failure to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in making an audit in
accordance with generally accepted auditing standards or did not make such an
audit);
(c) FINANCIAL PROJECTIONS -- promptly upon their becoming available and
in any event 30 days prior to the end of each fiscal year of the
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Company, consolidated financial projections, including the balance sheet, income
statement and cash flow statements for each of the next 12 months of the next
fiscal year together with the detailed budget for such fiscal year providing
supplementary detailed schedules as necessary and required by the Required
Holders;
(d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in any event
within five days after a Responsible Officer becoming aware of the existence of
any Default or Event of Default or that any Person has given any notice or taken
any action with respect to a claimed default hereunder or that any Person has
given any notice or taken any action with respect to a claimed default of the
type referred to in SECTION 11(H), a written notice specifying the nature and
period of existence thereof and what action the Company is taking or proposes to
take with respect thereto;
(e) ERISA MATTERS -- promptly, and in any event within ten days after a
Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined in
section 4043(b) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such regulations as in effect on the
date hereof; or
(ii) the taking by the PBGC of steps to institute, or the threatening
by the PBGC of the institution of, proceedings under section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Plan, or
the receipt by the Company or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan; or
(iii) any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affiliate pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the imposition of any Lien on any of
the rights, properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material Adverse Effect;
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(f) ENVIRONMENTAL REPORTING -- promptly, and in any event within 10
days of each occurrence, (i) a written notice of any proceeding or order before
any Governmental Authority requiring the Company or its Subsidiaries to comply
with or take action under any Environmental Laws where such compliance or action
requires expenditures in the amount of Cdn. $500,000 or more, the violation
thereof involves the possibility of the imposition of a fine or fines
aggregating Cdn. $500,000 or more, the violation thereof involves the
possibility of the imposition of a fine or fines aggregating Cdn. $500,000 or
more or the closing of any property owned or leased by the Company or any
Subsidiary for a period in excess of 48 hours where such closure would have a
Material Adverse Effect; and (ii) a written notice of any Material occurrence
relating to environmental matters that does not require notification under (i)
above, together with each delivery of financial statements pursuant to SECTION
7.1(a) and (b). Such Material occurrences shall include occurrences where any of
the Company or its Subsidiaries (iii) receives a written notice or claim to the
effect that the Company or any of its Subsidiaries is liable to any Person as a
result of the release or threatened release of any Hazardous Material into the
environment in, on, under or adjacent to any real estate owned or leased by the
Company or any Subsidiary; (iv) receives any written notice that the Company or
any of its Subsidiaries is subject to investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to the
release or threatened release of any Hazardous Material into the environment in,
on, under or adjacent to any real estate owned or leased by the Company or any
Subsidiary; (v) receives any written notice that all or any portion of the
properties owned or leased by the Company or any Subsidiary is subject to an
order or a security interest under or pursuant to any Environmental Law; (vi)
receives any written notice of a condition with respect to which might
reasonably result in a notice of violation by Company or any Subsidiary of any
Environmental Law; (vii) receives any written notice of the commencement of any
judicial or administrative proceeding alleging a violation by the Company or any
Subsidiary of any Environmental Law with respect to any property owned or leased
by the Company or any Subsidiary; or (viii) undertakes any activities as a
result of new or proposed changes to any existing Environmental Law that could
have a Material Adverse Effect on the condition of Company or any of its
Subsidiaries.
(g) ADDITIONAL REPORTING REQUIREMENTS -- promptly provide notice in
writing of (i) any default, or event, condition or occurrence which with notice
or lapse of time, or both, would constitute a default under any agreement in
respect of Indebtedness to which the Company or any of its Subsidiaries is a
party and under which the Company or any such Subsidiary owes (contingently or
otherwise) at least Cdn. $500,000 (or the equivalent amount in any other
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currency); (ii) from time to time upon request of the Required Holders, evidence
of the maintenance of all insurance required to be maintained by SECTION 9.2,
including such originals or copies as the Required Holders may request of
policies, certificates of insurance, riders and endorsements relating to such
insurance and proof of premium payments; and (iii) promptly upon the issuance
thereof, copies of all notices, reports, press releases, circulars, offering
documents and other documents filed with, or delivered to, the British Columbia
Securities Commission or to a similar Governmental Authority in any other
jurisdiction with respect to the Company or any Subsidiary.
(h) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or any
Subsidiary from any Federal or state Governmental Authority relating to any
order, ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect; and
(i) REQUESTED INFORMATION -- with reasonable promptness, such other
data and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its obligations hereunder and
under the Notes as from time to time may be reasonably requested by any such
holder of Notes.
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7.2. OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of Notes
pursuant to SECTION 7.1(a) or SECTION 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) COVENANT COMPLIANCE -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of SECTION 9.6 through SECTION 9.10 hereof,
inclusive, during the quarterly or annual period covered by the statements then
being furnished (including with respect to each such Section, where applicable,
the calculations of the maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such Sections, and the calculation
of the amount, ratio or percentage then in existence); and
(b) EVENT OF DEFAULT -- a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and its
Subsidiaries from the beginning of the quarterly or annual period covered by the
statements then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without limitation, any
such event or condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying the nature and
period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
7.3. INSPECTION.
The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:
(a) NO DEFAULT -- if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to visit
the principal executive office of the Company, to discuss the affairs, finances
and accounts of the Company and its Subsidiaries with the Company's officers,
and with the consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at
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such reasonable times and as often as may be reasonably requested in writing;
and
(b) DEFAULT -- if a Default or Event of Default then exits, at the
expense of the Company to visit and inspect any of the offices or properties of
the Company or any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
8. PAYMENT OF THE NOTES.
8.1. REQUIRED REPAYMENTS.
On April 17, 2007 the Company will repay the principal amount of the
Notes outstanding at par plus the accrued interest thereon.
8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Company may, at its opinion, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes, in a minimum
principal amount of $500,000 or a higher integral multiple of $100,000 at 100%
of the principal amount so prepaid, plus the Make-Whole Amount determined for
the prepayment date with respect to such principal amount and accrued interest
on the amount being prepaid. The Company will give each holder of Notes written
notice of each optional prepayment under this SECTION 8.2 not less than 30 days
and not more than 60 days prior to the date fixed for such prepayment. Each such
notice shall specify such date, the aggregate principal amount of the Notes to
be prepaid on such date, the principal amount of each Note held by such holder
to be prepaid (determined in accordance with SECTION 8.3), and the interest to
be paid on the prepayment date with respect to such principal amount being
repaid, and shall be accompanied by a certificate of a Senior Financial Officer
as to the estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the prepayment),
setting forth the details of such computation. Two Business Days prior to such
prepayment, the Company shall deliver to each holder of Notes a certificate of a
Senior Financial Officer specifying the calculation of such Make-Whole Amount as
of the specified prepayment date.
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8.3. ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for prepayment.
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8.4. MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this SECTION 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.5. PURCHASE OF NOTES.
The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
8.6. MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, PROVIDED that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to SECTION 8.2 or has become or is
declared to be immediately due and payable pursuant to SECTION 12.1, as the
context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled
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due dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor (applied on
the same periodic basis as that on which interest on the Notes is payable) equal
to the Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of any
Note, the yield to maturity implied by (i) the yields reported, as of 10:00 A.M.
(New York City time) on the second Business Day preceding the Settlement Date
with respect to such Called Principal, on the display designated as "Page 678"
on the Telerate Access Service (or such other display as may replace Page 678 on
Telerate Access Service) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields have
been so reported as of the second Business Day preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied yield
will be determined, if necessary, by (a) converting U.S. Treasury ▇▇▇▇
quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the duration closest to and greater than the Remaining
Average Life and (2) the actively traded U.S. Treasury security with the
duration closest to and less than the Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (b) the number of years (calculated to the
nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made prior to its
scheduled due date, PROVIDED that if such Settlement Date is not a date on which
interest payments
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are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to SECTION 8.2 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
SECTION 8.2 or has become or is declared to be immediately due and payable
pursuant to SECTION 12.1, as the context requires.
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9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
9.1. COMPLIANCE WITH LAW.
The Company will and will cause each of its Subsidiaries to comply with
all laws, ordinances or governmental rules or regulations to which each of them
is subject, including, without limitation, Environmental Laws, and will obtain
and maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.2. INSURANCE.
The Company will and will cause each of its Subsidiaries to maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated.
9.3. MAINTENANCE OF PROPERTIES.
The Company will and will cause each of its Subsidiaries to maintain
and keep, or cause to be maintained and kept, their respective properties in
good repair, working order and condition (other than ordinary wear and tear), so
that the business carried on in connection therewith may be properly conducted
at all times, PROVIDED that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Company has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be
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expected to have a Material Adverse Effect.
9.4. PAYMENT OF TAXES AND CLAIMS.
The Company will and will cause each of its Subsidiaries to file all
tax returns required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, PROVIDED
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claims if (i) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
9.5. CORPORATE EXISTENCE, ETC.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to SECTION 10.2, the Company will at all
times preserve and keep in full force and effect the corporate existence of each
of its Subsidiaries (unless merged into the Company or a Subsidiary) and all
rights and franchises of the Company and its Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.
9.6. MAINTENANCE OF NET WORTH.
Maintain, on the last day of each fiscal year, calculated as at such
day, Consolidated Net Worth of the Company and its Consolidated Subsidiaries of
at least an amount equal to Cdn. $39,000,000 determined in accordance with GAAP.
9.7. MAINTENANCE OF CONSOLIDATED INDEBTEDNESS TO NET WORTH RATIO.
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Maintain, as at the last day of each fiscal quarter, a ratio,
calculated as at such day, of Consolidated Indebtedness to Consolidated Net
Worth of the Company and its Consolidated Subsidiaries of not more than 0.80:1
for each fiscal quarter.
9.8. MAINTENANCE OF INTEREST COVERAGE RATIO.
Maintain, as at the end of each fiscal quarter, a minimum Interest
Coverage Ratio of 2.70:1.
9.9. MAINTENANCE OF LEVERAGE RATIO.
Maintain, as at the end of each fiscal quarter, a Leverage Ratio of not
more than 5.50:1.
9.10. MAINTENANCE OF PARKING CONTRACTS.
Ensure the existence on a consolidated basis on the last day of each
fiscal quarter of an aggregate of at least 1,200 Consolidated Parking Contracts.
9.11. FURTHER ASSURANCES.
At its cost and expense, upon request of the Required Holders, duly
execute and deliver or cause to be duly executed and delivered to the Purchasers
such further instruments and do and cause to be done such further acts as may be
necessary or proper in the reasonable opinion of the Required Holders to carry
out more effectually the provisions and purposes of the Note Documents.
10. NEGATIVE COVENANTS.
The Company covenants that, without the consent of the Required
Holders, so long as any of the Notes are outstanding:
10.1. TRANSACTIONS WITH AFFILIATES.
The Company will not and will not permit any Subsidiary to enter into
directly or indirectly any transaction or Material group of related transactions
(including without limitation the purchase, lease, sale or exchange
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of properties of any kind or the rendering of any service) with any Affiliate
(other than the Company or another Subsidiary), except in the ordinary course
and pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate.
10.2. MERGER, CONSOLIDATION, ETC.
The Company shall not consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person unless:
(a) the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Company as an entirety, as the case may
be, shall be a solvent corporation organized and existing under the laws of
Canada, the United States or any Province or State thereof (including the
District of Columbia), and, if the Company is not such corporation, (i) such
corporation shall have executed and delivered to each holder of any Notes its
assumption of the due and punctual performance and observance of each covenant
and condition of this Agreement and the Notes and (ii) shall have caused to be
delivered to each holder of any Notes an opinion of nationally recognized
independent counsel, or other independent counsel reasonably satisfactory to the
Required Holders, to the effect that all agreements or instruments effecting
such assumption are enforceable in accordance with their terms and comply with
the terms hereof;
(b) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing. No such conveyance,
transfer or lease of substantially all of the assets of the Company shall have
the effect of releasing the Company or any successor corporation that shall
theretofore have become such in the manner prescribed in this SECTION 10.2 from
its liability under this Agreement or the Notes.
10.3. INDEBTEDNESS.
Create, incur, assume or suffer to exist or permit any of its
Subsidiaries to create, incur, assume or suffer to exist any Indebtedness other
than (i) Indebtedness to the Purchasers hereunder; (ii) the Permitted Senior
Indebtedness; (iii) Indebtedness incurred in respect of a Purchase Money
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Mortgage up to an aggregate outstanding amount, at any time, of Cdn. $1,000,000
(or the equivalent amount in any other currency); (iv) Indebtedness incurred
with respect to performance bonds posted in the ordinary course of business and
(v) Indebtedness listed on SCHEDULE 5.15.
10.4. LIENS.
Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Liens on any of
their respective assets, other than Permitted Liens.
10.5. DISPOSAL OF ASSETS GENERALLY.
Sell, exchange, lease, release or abandon or otherwise dispose of, or
permit any of its Subsidiaries to sell, exchange, lease, release or abandon or
otherwise dispose of any assets to any Person other than (i) any bona fide
sales, exchanges, leases, abandonments or other dispositions in the ordinary
course of business, for the purpose of carrying on the business of the Company;
(ii) property or assets which have no material economic value in the business of
the Company or are obsolete; and (iii) assets having a fair market value of not
greater than Cdn. $100,000 in the aggregate in any fiscal year.
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10.6. CHANGE IN BUSINESS.
Not, and not permit any of its Subsidiaries to engage in any line of
business other than the businesses engaged in by the Company and its
Subsidiaries as of the date hereof and business reasonably related thereto.
10.7. DISTRIBUTIONS.
Declare, make or pay, or permit any of its Subsidiaries to declare,
make or pay, any Distributions, except (i) directors' fee in an aggregate amount
not to exceed $30,000, (ii) performance bonuses paid by the Company or any of
its Subsidiaries in the ordinary course of business as part of remuneration for
services rendered at fair market value; (iii) Distributions by a Guarantor to
the Company or by the Company to a Guarantor; (iv) payments made under
management or employment agreements entered into by the Company or any of its
Subsidiaries with senior employees in the ordinary course of business; (v) loans
made to employees; (vi) non-cash dividend payments to Onex Corporation on the
preferred shares of the Company held by Onex Corporation made by way of the
issuance of additional preferred shares bearing the same characteristics as such
preferred shares held by Onex Corporation and (vii) payments on the Permitted
Senior Indebtedness.
10.8. INVESTMENTS.
Make any loans, incur any obligations (contingent or otherwise), or
make any investments in any Person or permit any of its Subsidiaries to do the
same, except for (i) foreign currency ▇▇▇▇▇▇, interest rate swaps or similar
interest rate and currency hedging obligations or agreements; (ii) indebtedness
and obligations incurred in the ordinary course of business and Indebtedness
permitted under SECTION 10.3; (iii) Permitted Marketable Securities; (iv) loans
permitted under SECTION 10.1; or (v) inter-company loans to or investments in
Subsidiaries.
10.9. LEASE-BACKS.
Enter into or permit any of its Subsidiaries to enter into any
arrangements, directly or indirectly, with any Person, whereby the Company or
such Subsidiary, as the case may be, shall sell or transfer any property,
whether now owned or hereafter acquired, used or useful in the business, in
connection with the rental or lease of the property so sold or transferred or of
other property for substantially the same purpose or purposes as the property so
sold or transferred.
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10.10. SUBSIDIARIES.
(i) Incorporate or acquire, after the date hereof, any Subsidiaries or
commence to carry on business, otherwise than through the Company and its
Subsidiaries existing as of the date hereof, except for the incorporation or
acquisition of Subsidiaries in North America or such other jurisdictions as the
Required Holders may agree to, acting reasonably, where in each case, such
Subsidiary has executed and delivered a guarantee of all of the obligations of
the Company under this Agreement and/or the other Note Documents and accompanied
by opinions satisfactory to the Required Holders, in each case, acting
reasonably, prior to or contemporaneously with such Subsidiary having net asset
values or revenues, in either case, greater than Cdn. $50,000; or (ii) permit
any Subsidiary to exist after the date hereof having net asset values or
revenues, in either case, greater than Cdn. $50,000 unless such Subsidiary is a
Guarantor.
10.11. MAINTENANCE AND OWNERSHIP OF SUBSIDIARIES.
Except as permitted under SECTION 10.5, sell or otherwise dispose of
any shares of any of its Subsidiaries or permit any of such Subsidiaries to
issue, sell or otherwise dispose of the shares of any other Subsidiary, except
to the Company or a Guarantor.
10.12. COMPROMISE OF ACCOUNTS.
Compromise of Accounts. Compromise or adjust or permit any of its
Subsidiaries to compromise or adjust any material accounts receivable of the
Company or such Subsidiary (or extend the time for payment thereof) or grant any
discounts, allowances or credits thereon, in each case other than in the
ordinary course of business.
11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or
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(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
term contained in SECTION 5.14, SECTIONS 9.6 through 9.10, 10.2, 10.5, 10.7 or
10.10; or
(d) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (a), (b) and
(c) of this SECTION 11) and such default is not remedied within 30 days after
the earlier of (i) a Responsible Officer obtaining actual knowledge of such
default and (ii) the Company receiving written notice of such default from any
holder of a Note (any such written notice to be identified as a "NOTICE OF
DEFAULT" and to refer specifically to this paragraph (d) of SECTION 11); or
(e) the Company fails to deliver the duly executed Security Agreement
substantially in the form of EXHIBIT 11(e)-1 within 5 Business Days of the
Closing, together with (i) evidence, reasonably satisfactory to you, that all
instruments and documents (including financing statements), necessary or
desirable to perfect and protect your Lien on the collateral granted under the
Security Agreement have been signed and delivered in appropriate form for filing
or recording, and (ii) an opinion of counsel substantially in the form of
EXHIBIT 11(e)-2; or
(f) any representation or warranty made in writing by or on behalf of
the Company or by any officer of the Company in this Agreement or in any writing
furnished in connection with the transactions contemplated hereby proves to have
been false or incorrect in any material respect on the date as of which made; or
(g) (i) the Company or any Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness that is outstanding in an
aggregate principal amount of at least Cdn. $1,000,000 beyond any period of
grace provided with respect thereto, or (ii) the Company or any Subsidiary is in
default in the performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least Cdn.
$1,000,000 or of any mortgage, indenture or other agreement relating thereto or
any other condition exists, and as a consequence of such default or condition
such Indebtedness has become, or has been declared (or one or more Persons
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are entitled to declare such Indebtedness to be), due and payable before its
stated maturity or before its regularly scheduled dates of payment, or (iii) as
a consequence of the occurrence or continuation of any event or condition (other
than the passage of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests), (x) the Company or any Subsidiary has
become obligated to purchase or repay Indebtedness before its regular maturity
or before its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least Cdn. $1,000,000, or (y) one or more Persons have
the right to require the Company or any Subsidiary so to purchase or repay such
Indebtedness; or
(h) the Company or any Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due, (ii)
files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
(i) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its Subsidiaries,
a custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of its Subsidiaries, or any such
petition shall be filed against the Company or any of its Subsidiaries and such
petition shall not be dismissed within 60 days; or
(j) a final judgment or judgments for the payment of money aggregating
in excess of Cdn. $5,000,000 are rendered against one or more of the Company and
its Subsidiaries and which judgments are not, within 60 days after entry
thereof, bonded, discharged or stayed pending appeal, or are not discharged
within 60 days after the expiration of such stay; or
(k) any Guarantor fails in any material respect to perform or
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observe any term, covenant or agreement in the Subsidiary Guaranty; or the
Subsidiary Guaranty is for any reason partially (including with respect to
future advances) or wholly revoked or invalidated, or otherwise ceases to be in
full force and effect; or any Guarantor, or any other Person by, through or on
behalf of any Guarantor, contests in any manner the validity or enforceability
of the Subsidiary Guaranty or denies that such Guarantor has any further
liability or obligation thereunder; or
(l) the Security Agreement shall cease to be in full force and effect;
or the Company, any Guarantor or any Person by, through or on behalf of the
Company or any Guarantor shall contest the validity or enforceability of the
Security Agreement; or
(m) if (i) any Plan shall fail to satisfy the minimum funding standards
of ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings,
(iii) the aggregate "amount of unfunded benefit liabilities" (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed Cdn. $500,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability
of the Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect.
As used in SECTION 11(m), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
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12.1. ACCELERATION.
(a) If an Event of Default with respect to the Company described in
paragraph (h) or (i) of SECTION 11 (other than an Event of Default described in
clause (i) of paragraph (h) or described in clause (vi) of paragraph (h) by
virtue of the fact that such clause encompasses clause (i) of paragraph (h)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 25% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
SECTION 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this SECTION 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2. OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under SECTION 12.1, the holder of any Note at the
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time outstanding may proceed to protect and enforce the rights of such holder by
an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained herein or in any Note, or
for an injunction against a violation of any of the terms hereof or thereof, or
in aid of the exercise of any power granted hereby or thereby or by law or
otherwise.
12.3. RESCISSION.
At any time after any Notes have been declared due and payable pursuant
to clause (b) or (c) of SECTION 12.1, the holders of not less than 76% in
principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to SECTION 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this SECTION 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under SECTION 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this SECTION 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. REGISTRATION OF NOTES.
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The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
13.2. TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than Cdn. $500,000, PROVIDED that if
necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than Cdn. $500,000.
Any transferee, by its acceptance of a Note registered in its name (or the name
of its nominee), shall be deemed to have made the representation set forth in
SECTION 6.2.
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13.3. REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (PROVIDED that if the holder of such Note is, or is a nominee
for, an original purchaser or another holder of a Note with a minimum net worth
of at least Cdn. $10,000,000, such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
14. SUBORDINATION.
14.1. NOTES SUBORDINATED TO PERMITTED SENIOR INDEBTEDNESS.
The Company covenants and agrees and you likewise covenant and agree
for the benefit of the holders of the Permitted Senior Indebtedness, that, to
the extent and in the manner hereinafter set forth in this SECTION 14, the
Obligations under the Notes are hereby expressly made subordinate and subject in
right of payment as provided in this SECTION 14 to the prior payment in full of
all Permitted Senior Indebtedness. This SECTION 14 shall constitute a continuing
offer to all persons who, in reliance upon such provisions, become holders of,
or continue to hold, Permitted Senior Indebtedness, and such provisions are made
for the benefit of the holders of Permitted Senior Indebtedness and such holders
are made obligees hereunder and they or each of them may enforce such
provisions.
14.2. PAYMENT OVER OF PROCEEDS UPON BANKRUPTCY.
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(a) In the event of (i) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or its
assets, (ii) any liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (iii) any assignment for the benefit of creditors or any other
marshalling of assets or liabilities of the Company (the events described in the
foregoing clauses (i), (ii) and (iii) are referred to collectively as
"INSOLVENCY OR LIQUIDATION PROCEEDINGS"), then and in any such event the holders
of Permitted Senior Indebtedness shall be entitled to receive payment in full in
cash of all amounts due on or in respect of all Permitted Senior Indebtedness
(or payment thereof provided for to the satisfaction of the holders of Permitted
Senior Indebtedness), before the holder is entitled to receive any payment or
distribution of any kind or character (excluding Permitted Junior Payments) on
account of principal of, or premium (if any) or interest on, the Notes, and to
that end the holders of Permitted Senior Indebtedness shall be entitled to
receive, for application to the payment of such Permitted Senior Indebtedness,
any payment or distribution of assets of the Company of any kind or character
(excluding Permitted Junior Payments) that may be payable or deliverable in
respect of the Notes in connection with any such Insolvency or Liquidation
Proceeding.
(b) Any payment or distribution of assets of the Company of any kind or
character from any source, whether in cash, property or securities (excluding
Permitted Junior Securities), including by way of set-off or enforcement of any
guarantee or otherwise, which the holders would be entitled to receive but for
the provisions of this Article shall be paid by the liquidating trustee or agent
or other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to the
holders of Permitted Senior Indebtedness or the representative or
representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Permitted Senior Indebtedness may have
been issued, rateably according to the aggregate amounts remaining unpaid on
account of the Permitted Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash of all Permitted Senior
Indebtedness after giving effect to any concurrent payment or distribution, or
provision therefor to the satisfaction of the holders of the Permitted Senior
Indebtedness.
(c) In the event that, notwithstanding the foregoing provisions of
SECTION 14.2(b), any holder of the Notes shall have received, after the
commencement of any Insolvency or Liquidation Proceeding, any payment or
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distribution of assets of the Company of any kind or character in respect of the
Obligations under the Notes whether in cash, property or securities including by
way of set off or enforcement of any guarantee or otherwise before all Permitted
Senior Indebtedness is paid in full or payment thereof provided for to the
satisfaction of the holders of Permitted Senior Indebtedness, then such payment
or distribution (excluding Permitted Junior Payments) shall be paid over or
delivered forthwith therefor to the holders of the Permitted Senior Indebtedness
or the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of assets of the
Company for application to the payment of all Permitted Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Permitted Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Permitted Senior Indebtedness.
14.3. SUSPENSION OF PAYMENTS WHEN PERMITTED SENIOR INDEBTEDNESS IN DEFAULT.
(a) Unless SECTION 14.2 shall be applicable, upon (i) the occurrence of
a default in the payment when due (whether at maturity or upon acceleration,
mandatory prepayment or otherwise) of any principal of or interest or premium
(if any) or interest on any unreimbursed amounts under drawn letters of credit
on any Permitted Senior Indebtedness that is continuing after the expiration of
any grace period applicable thereto (a "PAYMENT DEFAULT"), and (ii) either the
Company or such holder of Permitted Senior Indebtedness sending to the holders
of the Notes written notice of such Payment Default, then no payment or
distribution of any assets of the Company or any Subsidiary of any kind or
character (excluding Permitted Junior Payments) shall be made by the Company
including by way of set off or enforcement of guaranty or otherwise on account
of principal of, or premium (if any) or interest on, the Notes or on account of
the purchase or redemption or other acquisition of the Notes unless and until
either (x) such Payment Default shall have been cured or waived, or shall have
ceased to exist, (y) such defaulted Permitted Senior Indebtedness shall have
been discharged or (z) the benefits of this provision shall have been waived by
the holders of such defaulted Permitted Senior Indebtedness, after which the
Company shall resume making any and all required payments in respect of the
Notes, including any payments in arrears.
(b) Unless SECTION 14.2 shall be applicable, upon (i) the occurrence of
any default or event of default under any Permitted Senior Indebtedness if the
effect of such default or event of default is to permit such Permitted Senior
Indebtedness to become due and payable prior to its stated
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maturity (a "COVENANT DEFAULT"), and (ii) the holder of such Permitted Senior
Indebtedness or the Company sending to the holders of the Notes written notice
of such Covenant Default, then no payment or distribution of any assets of the
Company of any kind or character (excluding Permitted Junior Payments) shall be
made by the Company including by way of set-off or enforcement of guaranty or
otherwise on account of principal of, or premium (if any) or interest on, the
Notes or on account of the purchase or redemption or other acquisition of the
Notes for a period (a "PAYMENT BLOCKAGE PERIOD") commencing on the date of
receipt of such written notice by the holders of the Notes and continuing until
(subject to any blockage of payments that may then be in effect under SECTION
14.3(A)) the first to occur of (x) more than 179 days shall have elapsed since
receipt of such written notice by the holders of the Notes (provided that the
obligations under the applicable Permitted Senior Indebtedness shall not
theretofore have been accelerated), (y) such Covenant Default shall have been
cured or waived or shall have ceased to exist or the Permitted Senior
Indebtedness shall have been discharged, or (z) such Payment Blockage Period
shall have been terminated by written notice to the Company and the holders of
the Notes given by the holder of such Permitted Senior Indebtedness. After the
first to occur of the events described in the foregoing clauses (x), (y) and
(z), the Company shall resume making any and all required payments in respect of
the Notes, including any payments in arrears. In no event will a Payment
Blockage Period extend beyond 179 days from the date of the receipt by the
holders of the Notes of the notice initiating such Payment Blockage Period (such
179-day period referred to as the "INITIAL PERIOD"). Any number of notices of
events of default may be given during the Initial Period; PROVIDED that during
any period of 365 consecutive days there must be a period of 186 consecutive
days in which no Payment Blockage Period is in effect. No Covenant Default with
respect to the Permitted Senior Indebtedness that existed or was continuing on
the date of the commencement of any Payment Blockage Period will be, or can be,
made the basis for the commencement of a second Payment Blockage Period, whether
or not within a period of 365 consecutive days, unless such Covenant Default has
been cured or waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Company shall
make any payment to any holder of any Note prohibited by the foregoing
provisions of this SECTION 14.3, then and in such event such payments shall be
paid over and delivered forthwith to the holders of the Permitted Senior
Indebtedness or their representative.
14.4. PAYMENT PERMITTED IF NO DEFAULT.
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Nothing contained in this SECTION 14 or elsewhere in this Agreement or
in the Notes shall prevent the Company, at any time except in the circumstances
described in SECTION 14.2 or under the conditions described in SECTION 14.3,
from making payments at any time of principal of, or premium (if any) or
interest on, the Notes to the extent permitted by the terms of Permitted Senior
Indebtedness as in effect from time to time.
14.5. SUBROGATION TO RIGHTS OF HOLDERS OF PERMITTED SENIOR INDEBTEDNESS.
Subject to the payment in full of all Permitted Senior Indebtedness,
the holders of the Notes shall be subrogated (equally and ratably with the
holders of all Indebtedness of the Company that by its express terms is
subordinated to Permitted Senior Indebtedness to the same extent as the Notes
are so subordinated and is entitled to like rights of subrogation) to the rights
of the holders of Permitted Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Permitted
Senior Indebtedness to the extent that payment of Permitted Senior Indebtedness
has been made from amounts otherwise payable to the holders of the Notes until
the Notes and all other amounts payable under this Agreement shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of the Permitted Senior Indebtedness of any cash, property or securities
to which the holders of the Notes would be entitled except for the provisions of
this SECTION 14, and no payments over pursuant to the provisions of this SECTION
14 to the holders of Permitted Senior Indebtedness by the holders of the Notes,
shall, as among the Company, its creditors other than holders of the Permitted
Senior Indebtedness and the holders of the Notes, be deemed to be a payment or
distribution by the Company to or on account of the Permitted Senior
Indebtedness. In the event that any Permitted Senior Indebtedness becomes
due and payable, whether by acceleration, maturity or otherwise, no distribution
shall thereafter be made on account of the Notes until all Permitted Senior
Indebtedness shall be paid in full.
14.6. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this SECTION 14 are and are intended solely for the
purpose of defining the relative rights of the holders of the Notes, on the one
hand, and the holders of Permitted Senior Indebtedness, on the other hand.
Nothing contained in this SECTION 14 or elsewhere in this Agreement or in the
Notes is intended to or shall (a) impair, as among the Company and its creditors
other than holders of Permitted Senior Indebtedness and the holders of the
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Notes, the obligation of the Company, which is absolute and unconditional, to
pay to the holders of the Notes the principal of, and premium (if any) and
interest on, the Notes and all other amounts payable under this Agreement as and
when the same shall become due and payable, all in accordance with the terms
hereof and of the Notes; (b) affect the relative rights against the Company of
the holders of the Notes and creditors of the Company other than the holders of
Permitted Senior Indebtedness, it being expressly understood that the Notes, the
indebtedness represented thereby and the payment of the principal of, and
premium (if any) and interest on, the Notes and of all other amounts payable
under this Agreement in all respects shall rank equally with, or prior to, all
existing and future unsecured Indebtedness of the Company that is not Permitted
Senior Indebtedness; (c) prevent the holders of the Notes from exercising all
remedies otherwise permitted by applicable law upon default under this
Agreement, subject to the rights, if any, under this SECTION 14 of the holders
of Permitted Senior Indebtedness (i) in any Insolvency or Liquidation Proceeding
to receive, pursuant to and in accordance with SECTION 14.2, cash, property and
securities otherwise payable or deliverable to the holders or the Notes, or (ii)
under the conditions specified in SECTION 14.3 to prevent any payment prohibited
by such SECTION 14.3; or (d) limit the rights of the holders of the Notes to
take any action to accelerate the maturity of the Notes pursuant to SECTION 11
or to pursue any rights or remedies hereunder or under applicable law.
14.7. PAYMENTS HELD IN TRUST.
Should any distribution or the proceeds thereof in respect of principal
of, or premium (if any) or interest on, the Notes be collected or received by
the holders of Notes at a time when the holders of Notes are not permitted to
receive any such distribution or proceeds thereof, including if the same is
collected or received when there is or would be after giving effect to such
payment an Event of Default under any Permitted Senior Indebtedness, then the
holders of Notes will forthwith deliver, or cause to be delivered, the same to
the holders of Permitted Senior Indebtedness in precisely the form held by the
holders of Notes (except for any necessary endorsement) and until so delivered,
the same shall be held in trust by the holders of Notes as property of the
holders of Permitted Senior Indebtedness and shall not be commingled with other
property of the holders of Notes.
14.8. NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future holder of any Permitted Senior
Indebtedness to enforce subordination as herein provided shall at any
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time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act by any such holder, or by
any noncompliance by the Company with the terms, provisions and covenants of
this Agreement, regardless of any knowledge thereof that any such holder may
have or be otherwise charged with.
(b) Without in any way limiting the generality of SECTION 14.8(A), the
holders of Permitted Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the holders of the Notes, without incurring
responsibility to the holders of the Notes and without impairing or releasing
the subordination provided in this SECTION 14 or the obligations hereunder of
the holders of the Notes to the holders of Permitted Senior Indebtedness, do any
one or more of the following: (1) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, any Permitted Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Permitted Senior Indebtedness is outstanding (including any increase in the
aggregate principal amount of any indebtedness thereunder); (2) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing any Permitted Senior Indebtedness; (3) release any Person liable in any
manner for the collection of any Permitted Senior Indebtedness; and (4) exercise
or refrain from exercising any rights against the Company and any other Person.
14.9. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company referred to
in this SECTION 14, the holders of the Notes shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the holders of the Notes for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Permitted Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this SECTION 14 provided that such court, trustee, assignee or other person
has been apprised of, or the order or certificate makes reference to the
provisions of this Article.
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14.10 FURTHER ASSURANCES
Upon receipt of written notice by a holder of Permitted Senior
Indebtedness, the Company shall, from time to time, for and on behalf of all
present and future holders of the Notes, execute and deliver deeds of
subordination in favour of the person or persons forwarding such notice to the
Company providing that such person or persons are entitled to all the rights and
benefits of this Article as a holder of Permitted Senior Indebtedness. An
executed counterpart of each such deed shall be delivered by the Company.
Nothing contained in this provision shall impair the rights of any holders of
Permitted Senior Indebtedness in whose favour such a deed of subordination has
not been so executed and delivered.
15. PAYMENTS ON NOTES.
15.1. PLACE OF PAYMENT.
Subject to SECTION 15.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in
Toronto, Ontario at the principal office of the Company in such jurisdiction.
The Company may at any time, by notice to each holder of a Note, change the
place of payment of the Notes so long as such place of payment shall be either
the principal office of the Company in such jurisdiction or the principal office
of a bank or trust company in such jurisdiction.
15.2. HOME OFFICE PAYMENT.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in SECTION 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in SCHEDULE A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to SECTION 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election,
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either endorse thereon the amount of principal paid thereon and the last date to
which interest has been paid thereon or surrender such Note to the Company in
exchange for a new Note or Notes pursuant to SECTION 13.2. The Company will
afford the benefits of this SECTION 15.2 to any Institutional Investor that is
the direct or indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such Note as you have
made in this SECTION 15.2.
16. EXPENSES, ETC.
16.1. TRANSACTION EXPENSE.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or other counsel)
incurred by you or holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement or the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement or the Notes or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement or the Notes, or by reason of being a holder of any Note, and (b)
the costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Company or any Subsidiary or
in connection with any work-out or restructuring of the transactions
contemplated hereby and by the Notes. The Company will pay, and will save you
and each other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses, if any, of brokers and finders (other than those
retained by you).
16.2. SURVIVAL.
The obligations of the Company under this SECTION 16 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
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All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.
18. AMENDMENT AND WAIVER.
18.1. REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that no amendment or waiver may, without the written
consent of the holder of each Note at the time outstanding affected thereby, (i)
subject to the provisions of SECTION 12 relating to acceleration or rescission,
change the amount or time of any prepayment or payment of principal of, or
reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of SECTIONS 8,
11(a), 11(b), 12, 14, or 18.1 hereof.
18.2. SOLICITATION OF HOLDERS OF NOTES.
(a) The Company will provide each holder of the Notes (irrespective of
the amount of Notes then owned by it) with sufficient information, sufficiently
far in advance of the date a decision is required, to enable such holder to make
an informed and considered decision with respect to any proposed amendment,
waiver or consent in respect of any of the provisions hereof or of the Notes.
The Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this SECTION 18 to each
holder of outstanding Notes promptly following the date on which it is executed
and delivered by, or receives the consent or approval
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of, the requisite holders of Notes.
(b) The Company will not directly or indirectly pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or
otherwise, or grant any security, to any holder of Notes as consideration for or
as an inducement to the entering into by any holder of Notes or any waiver or
amendment of any of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same terms,
ratably to each holder of Notes then outstanding even if such holder did not
consent to such waiver or amendment.
18.3. BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this SECTION 18
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
"THIS AGREEMENT" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
18.4. NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
19. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
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confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address specified
for such communications in SCHEDULE A, or at such other address as you or it
shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such address
as such other holder shall have specified to the Company in writing, or
(iii) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇, or at such other address as
the Company shall have specified to the holder of each Note in writing.
Notices under this SECTION 19 will be deemed given only when actually received.
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20. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This SECTION 20
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in SECTION 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this SECTION 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this SECTION
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
22. MISCELLANEOUS.
22.1. SUCCESSORS AND ASSIGNS.
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All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
22.2. PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
22.3. SEVERABILITY.
Any provision of this Agreement that 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 (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
22.4. CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
22.5. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
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22.6. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
* * * * *
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If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
3357392 CANADA INC.
By: /s/ Authorized Signer
Name:
Title:
The foregoing is hereby agreed to as of the date thereof.
3006302 NOVA SCOTIA COMPANY
By: /s/ Authorized Signer
Name:
Title:
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SCHEDULE A
----------
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
----------------------------- ----------------------
3006302 Nova Scotia Company, a Cdn.$55,000,000
Nova Scotia unlimited
liability company
(1) All payments by wire transfer of
Canadian Imperial Bank of Commerce
Acct. No. 45-8113
with sufficient information to identify the source and
application of such funds.
(2) All notices of payments and written confirmations
of such wire transfers:
3006302 Nova Scotia Company
c/o First Union Real Estate
Equity and Mortgage Investments
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Senior Vice President,
General Counsel and
Secretary
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(3) All other communications:
3006302 Nova Scotia Company
c/o First Union Real Estate
Equity and Mortgage Investments
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Senior Vice President,
General Counsel and
Secretary
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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SCHEDULE B
----------
DEFINED TERMS
-------------
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"AFFILIATE" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person and (b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"AGREEMENT" means this Note Purchase Agreement between the Company and
the purchasers listed on SCHEDULE A, as it may from time to time be amended or
supplemented.
"ANNUALIZED CAPITAL EXPENDITURES" means for any relevant period
commencing with April 1, 1997, an amount equal to the aggregate amount of
capital expenditures for such period multiplied by a fraction, the numerator of
which is 12 and the denominator of which is the number of calendar months which
have elapsed since April 1, 1997.
"ANNUALIZED CONSOLIDATED EBITDA" means for any relevant period
commencing with April 1, 1997, an amount equal to Consolidated EBITDA for such
period multiplied by a fraction, the numerator of which is 12 and the
denominator of which is the number of calendar months which have elapsed since
April 1, 1997.
"ANNUALIZED CONSOLIDATED INTEREST CHARGES" means for any relevant
period commencing with April 1, 1997, an amount equal to Consolidated Interest
Charges for such period, multiplied by a fraction, the numerator of which is 12
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and the denominator of which is the number of calendar months which have elapsed
since April 1, 1997.
"BUSINESS DAY" means (a) for the purposes of SECTION 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Toronto or New York are required or authorized
to be closed.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CLOSING" is defined in SECTION 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COMPANY" means 3357392 Canada Inc., a corporation duly organized and
validly existing under the laws of the Province of Ontario.
"CONFIDENTIAL INFORMATION" is defined in SECTION 21.
"CONSOLIDATED CASH INTEREST CHARGES" means, for any period for the
Company and its Consolidated Subsidiaries, the total of (i) all items properly
classified as interest expense (whether expensed or capitalized) in accordance
with GAAP; and (ii) the imputed interest component for any element of
Consolidated Indebtedness (such as capital leases and deferred revenues) which
would not be classified as interest expense pursuant to GAAP, calculated using
an interest rate equal to the then prevailing Canadian Prime Rate, in each case
for such period, provided that, notwithstanding the foregoing, with respect to
the Notes only the current paid interest component, and not accrued interest,
will be included in this calculation.
"CONSOLIDATED DEPRECIATION AND AMORTIZATION EXPENSE" means, for any
period, the depreciation and amortization expense of the Company and its
Consolidated Subsidiaries, determined in accordance with GAAP.
"CONSOLIDATED EBITDA" means, for any period, the Consolidated Net
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Income of the Company and its Consolidated Subsidiaries (or with respect to the
definition of Target EBITDA, the relevant target entity mutatis mutandis)
increased by the sum of (i) Consolidated Cash Interest Charges; (ii)
Consolidated Income Tax Expense; and (iii) Consolidated Depreciation and
Amortization Expense, in each case, for such period and calculated prior to
extraordinary items and (iv) such out-of-pocket expenses incurred by such
entities on a one time basis and which can reasonably be solely attributed to
the acquisition referenced on SCHEDULE 5.14.
"CONSOLIDATED INCOME TAX EXPENSE" means, for any period, the aggregate
of all taxes (including deferred taxes) based on income of the Company and its
Consolidated Subsidiaries for such period determined in accordance with GAAP.
"CONSOLIDATED INDEBTEDNESS" means the aggregate of all Indebtedness for
borrowed money of the Company and its Consolidated Subsidiaries less (y) the
Notes and (z) such cash and Permitted Marketable Securities on the balance sheet
of the latest financial statements delivered pursuant to SECTION 7.
"CONSOLIDATED NET WORTH" means at any time, with respect to any Person
and its Consolidated Subsidiaries, the aggregate of (i) the total shareholders'
equity determined as of such time in accordance with GAAP; plus (ii) the Notes;
where shareholders equity for greater certainty and without duplication includes
any shares in the capital of such Person or its Subsidiaries which are
redeemable at the option of the holder in accordance with their terms.
"CONSOLIDATED PARKING CONTRACTS" means, at any time, with respect to
the Company and its Consolidated Subsidiaries, the aggregate of (i) the total
number of existing contracts and leases which are in full force and effect for
the management or operation of parking lots of parking garages; and (ii) the
number of parking lots of parking garages operated on properties owned by the
Company and its Consolidated Subsidiaries.
"CONSOLIDATED SUBSIDIARY" means, at any date, in respect of any person,
a Subsidiary of such Person which is or should be consolidated with such Person
in its consolidated financial statements prepared as of such date.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
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"DEFAULT RATE" means that rate of interest that is 2% per annum above
the rate of interest stated in clause (a) of the first paragraph of the Notes.
"DISTRIBUTIONS" means (i) any dividend or other distribution on issued
shares of the Company or any of its Subsidiaries; (ii) the purchase, redemption
or retirement of any issued shares of the Company or any of its Subsidiaries
redeemed or purchased by the Company or any such Subsidiary, as the case may be,
or any payments made under any employee stock option agreement; (iii) any
consulting fee, management fee or management bonus paid or payable to any
director, officer, shareholder or Affiliate of the Company or any of its
Subsidiaries or any Person not dealing at arm's length with the Company or any
of its Subsidiaries or their respective directors, officers, shareholders or
Affiliates; or (iv) any payment on account of any principal and interest on any
loans or advances owing at any time by the Company or any of its Subsidiaries to
any of their respective directors, officers, shareholders or Affiliates.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in SECTION 11.
"GAAP" means, at any time, accounting principles generally accepted in
Canada as recommended in the Handbook of the Canadian Institute of Chartered
Accountants at the relevant time applied on a consistent basis.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
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(i) the United States of America or Canada or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary conducts
all or any part of its business, or which asserts jurisdiction over any
properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
"GUARANTORS" mean Advanced Parking Systems Ltd., Imperial Parking
(U.S.), Inc., Imperial Parking, Inc., The Park-Ur-Self System, Inc., ▇▇▇▇▇▇▇
Parking Service Ltd., 504463 N.B. Inc. and Imperial Parking (Asia) Limited.
"GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of such
indebtedness or obligation;
(c) to lease properties or to purchase properties or services primarily
for the purpose of assuring the owner of such indebtedness or obligation of the
ability of any other Person to make payment of the indebtedness or obligation;
or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
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"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to SECTION
13.1.
"INDEBTEDNESS" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property);
(c) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with respect
to any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for borrowed
money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.
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Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 25% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTEREST COVERAGE RATIO" means (i) for the periods beginning on April
1, 1997 and ending on the last day of each fiscal quarter up to and including
the fiscal quarter ended March 31, 1998, the ratio of Annualized Consolidated
EBITDA less Annualized Capital Expenditures to Annualized Consolidated Cash
Interest Charges; and (ii) for any fiscal quarter after the fiscal quarter ended
March 31, 1998, the ratio of Consolidated EBITDA less capital expenditures to
Consolidated Cash Interest Charges for the twelve month period ending on the
least day of such fiscal quarter.
"LEVERAGE RATIO" means (i) for periods beginning on April 1, 1997 and
ending on the last day of each fiscal quarter up to and including the fiscal
quarter ended March 31, 1998, the ratio of Consolidated Indebtedness to
Annualized Consolidated EBITDA; and (ii) for any fiscal quarter thereafter, the
ratio of Consolidated Indebtedness to Consolidated EBITDA for the twelve month
period ending on the last day of such fiscal quarter.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"MAKE-WHOLE AMOUNT" is defined in SECTION 8.6.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its
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Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NOTE DOCUMENTS" mean the Notes, the Agreement, the Subsidiary Guaranty
and the Security Agreement.
"NOTES" is defined in SECTION 1.
"OBLIGATIONS" means any principal (including reimbursement obligations
and guarantees), premium, if any, interest (including interest accruing on or
after the filing of, or which would have occurred but for the filing of, any
petition in bankruptcy or for reorganization relating to the Company whether or
not a claim for post-filing interest is allowed in such proceedings) penalties,
fees, expenses, indemnifications, reimbursements, claims for recision, damages,
gross-up payments and all other amounts and other liabilities payable under the
Note Documents or otherwise.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERMITTED JUNIOR PAYMENTS" mean a payment or distribution in the form
of equity securities or subordinated securities of the Company or any successor
obligor with respect to the Notes provided for by a plan of reorganization or
readjustment that, in the case of any such subordinated securities, are
subordinate in right of payment to all Permitted Senior Indebtedness that may at
the time be outstanding to substantially the same or a greater extent than, the
Obligations are so subordinated as provided herein.
"PERMITTED LIENS" means any one or more of the following:
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a. Liens for taxes, rates, assessments or governmental charges or levies not at
the time due and delinquent or the validity of which is being contested at the
time by the Company in good faith by proper legal proceedings;
b. Liens resulting from any judgment rendered or claim filed against the Company
which the Company shall be contesting in good faith by proper legal proceedings;
c. undetermined or inchoate Liens which have not at such time been filed or
registered pursuant to law against the Company or which relate to obligations
not due or delinquent;
d. Liens affecting real property which are (i) title defects or irregularities
of a minor nature; or (ii) restrictions, easements, rights-of-way, servitudes or
other similar rights in land (including, without restriction, rights-of-way and
servitudes for railways, sewers, drains, gas and oil pipelines, gas and water
mains, electric light and power and telephone or telegraph or cable television
conduits, poles, wires, cables or other incidental equipment) granted to or
reserved by other Persons; in each case where such Liens in the aggregate do not
materially impair the usefulness of the property for the purposes for which it
is held and mortgages of and other Liens against the said easements,
rights-of-way, servitudes or other similar rights in real property;
e. Liens or deposits in connection with bids, tenders, contracts or
expropriation proceedings of the Company or to secure workers' compensation,
unemployment insurance or other similar statutory assessments, or to secure
costs of litigation when required by law, and surety or appeal bonds in
connections with such litigation;
f. mechanic's, warehouseman's, carriers' or other similar common law liens or
privileges, where the action to enforce the same has not proceeded to final
judgment, is being defended in good faith by the Company and by appropriate
proceedings and in respect of which it shall have set aside on its books
reserves deemed by it to be adequate therefor;
g. any other liens or privileges or other title irregularities, encroachments or
encumbrances of a nature similar to the foregoing which are of a minor nature
and will not in the aggregate materially and adversely affect the use of the
property for the purpose for which it is held by the Company or any of its
Subsidiaries;
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h. Liens in favour of the holders of the Permitted Senior Indebtedness;
i. Purchase Money Mortgages, securing Indebteness, in an aggregate amount not to
exceed Cdn. $1,000,000; and
j. other Liens in an aggregate amount not to exceed Cdn. $50,000.
"PERMITTED MARKETABLE SECURITIES" means any securities held by the
Company or any of its Subsidiaries which are publicly traded on a recognized
stock exchange and do not represent greater than 5% of the issued and
outstanding securities of the issuing corporation and any fixed income
securities for which a public market exists.
"PERMITTED SENIOR INDEBTEDNESS" means Indebtedness outstanding from
time to time pursuant to the Amended and Restated Credit Agreement dated as of
April 17, 1997 among the Company (by amalgamation with Imperial Parking
Limited), 504463 N.B. Inc., the financial institutions party thereto and BT Bank
of Canada, as agent, including all Accomodations (as defined in the Amended and
Restated Credit Agreement) and interest, fees, expenses and other amounts owed
pursuant thereto or contemplated thereby, as such amounts are reduced from time
to time.
"PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"PREFERRED STOCK" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇
or inchoate.
▇▇
- ▇▇ -
"▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇" means any Lien charging property acquired by
the Company, which is or has been granted or assumed by the Company or which
arises by operation of law in favour of the transferor substantially
concurrently with and for the purpose of the acquisition of such property, in
each case where (i) the principal amount secured by such Lien is not in excess
of the cost to the Company of the property acquired; and (ii) such Lien extends
only to the property acquired.
"REQUIRED HOLDERS" means, at any time, the holders of at least 66-2/3%
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITY AGREEMENT" means the security agreement dated the date of
Closing issued by the Guarantors.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"SUBSIDIARY GUARANTY" means the guaranty dated the date of Closing
issued by the Guarantors.
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"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Subsidiaries at such time.
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SCHEDULE 5.14
-------------
USE OF PROCEEDS
---------------
The Company shall use the proceeds of the Notes solely to acquire the
shares of Imperial Holdings No. 2 Inc. pursuant to that certain Share Purchase
Agreement dated as of February 18, 1997, as amended to and including April 15,
1997.
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NOTE
3357392 CANADA INC.
SENIOR SUBORDINATED PARTIAL PIK NOTES DUE APRIL 17, 2009
No.1
Cdn. $55,000,000 April 17, 1997
FOR VALUE RECEIVED, the undersigned, 3357392 CANADA INC. (herein called
the "Company"), a corporation duly organized and validly existing under the laws
of the Province of Ontario hereby promises to pay to 3006302 NOVA SCOTIA
COMPANY, or registered assigns, the principal sum of FIFTY-FIVE MILLION DOLLARS
(Cdn.$55,000,000) on April 17, 2009, with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the
rate of 12% per annum from the date hereof, payable quarterly, on March 31, June
30, September 30 and December 31 of each year, commencing with June 30, 1997,
payable in cash at a rate of 4% per annum and the balance of such interest
payable in additional Senior Subordinated Partial PIK Notes due April 17, 2009
("Additional Notes"), substantially in the form hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by law
on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreements referred to below), payable quarterly as
aforesaid (or, at the option of the registered holder hereof, on demand), in
cash at a rate per annum from time to time equal to 14%.
Payments of principal of, interest (except for interest payable in
Additional Notes as herein provided) on and any Make-Whole Amount with respect
to this Note are to be made in lawful money of Canada at Toronto, Ontario or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreements referred to
below.
This Note is one of a series of the Company's Senior Subordinated
Partial PIK Notes due April 17, 2009 (herein called the "Notes") issued pursuant
to one or more separate Note Purchase Agreements, dated as of April 17, 1997 (as
from time to time amended, the "Note Purchase Agreements"), between the Company
and the respective Purchasers named therein and is entitled to the benefits
thereof. Each holder of this
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Note will be deemed, by its acceptance hereof, (i) to have agreed to the
subordination provisions set forth in SECTION 14 of the Note Purchase Agreements
and (ii) to have made the representation set forth in SECTION 2 of the Note
Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
3357392 CANADA INC.
By: /s/ Authorized Signer
Title:
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EXHIBIT 11(e)-2
FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY
Matters To Be Covered In
Opinion of Special Counsel To the Company
-----------------------------------------
1. Each of the Company and its Subsidiaries being duly incorporated,
validly existing and in good standing and having requisite corporate power and
authority to issue and sell the Notes and to execute and deliver the documents.
2. Each of the Company and its Subsidiaries being duly qualified and
in good standing as a foreign corporation in appropriate jurisdictions.
3. Due authorization and execution of the documents and such documents
being legal, valid, binding and enforceable.
4. No conflicts with charter documents, laws or other agreements.
5. All consents required to issue and sell the Notes and to execute
and deliver the documents having been obtained.
6. No litigation questioning validity of documents.
7. The Notes not requiring registration under the Securities Act of
1933, as amended; no need to qualify an indenture under the Trust Indenture Act
of 1939, as amended.
8. No violation of Regulations G, T or X of the Federal Reserve Board.
9. Company not an "investment company", or a company "controlled" by
an "investment company", under the Investment Company Act of 1940, as amended.