AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT between BRASCAN (US) CORPORATION as Lender and CRYSTAL RIVER CAPITAL, INC., as Borrower dated as of November 8, 2007
Exhibit
99.1
EXECUTION
COPY
between
BRASCAN
(US) CORPORATION
as
Lender
and
as
Borrower
dated
as of November 8, 2007
TABLE
OF CONTENTS
Page
|
DEFINITIONS
|
1
|
|
|
1.1
|
Accounting
Terms
|
1
|
|
|
1.2
|
General
Terms
|
1
|
|
|
1.3
|
Certain
Matters of Construction
|
9
|
|
II.
|
ADVANCES,
PAYMENTS
|
10
|
|
|
2.1
|
Amount
of Advances
|
10
|
|
|
2.2
|
Procedure
for Advances Borrowing.
|
10
|
|
|
2.3
|
Disbursement
of Advance Proceeds
|
11
|
|
|
2.4
|
Maximum
Advances.
|
11
|
|
|
2.5
|
Manner
of Borrowing and Repayment of Advances
|
11
|
|
|
2.6
|
Repayment
of Excess Advances
|
12
|
|
|
2.7
|
Statement
of Account
|
12
|
|
|
2.8
|
Additional
Payments
|
12
|
|
|
2.9
|
Use
of Proceeds
|
12
|
|
III.
|
INTEREST
AND FEES
|
12
|
|
|
3.1
|
Interest
|
12
|
|
|
3.2
|
Computation
of Interest
|
13
|
|
|
3.3
|
Maximum
Charges
|
13
|
|
|
3.4
|
Increased
Costs
|
13
|
|
|
3.5
|
Basis
For Determining Interest Rate Inadequate or Unfair
|
14
|
|
IV.
|
REPRESENTATIONS
AND WARRANTIES
|
14
|
|
|
4.1
|
Authority
|
14
|
|
|
4.2
|
Formation
and Qualification
|
14
|
|
|
4.3
|
Survival
of Representations and Warranties
|
15
|
|
|
4.4
|
Tax
Returns
|
15
|
|
|
4.5
|
Financial
Statements
|
15
|
|
|
4.6
|
Entity
Name
|
15
|
|
|
4.7
|
O.S.H.A.
and Environmental Compliance
|
15
|
|
|
4.8
|
Solvency;
No Litigation, Violation, Indebtedness or Default
|
16
|
|
|
4.9
|
Licenses
and Permits
|
17
|
-i-
TABLE
OF CONTENTS
(continued)
Page
|
|
4.10
|
Default
of Indebtedness
|
17
|
|
|
4.11
|
No
Default
|
17
|
|
|
4.12
|
No
Burdensome Restrictions
|
17
|
|
|
4.13
|
Margin
Regulations
|
17
|
|
|
4.14
|
Investment
Company Act
|
18
|
|
|
4.15
|
Disclosure
|
18
|
|
|
4.16
|
Conflicting
Agreements
|
18
|
|
|
4.17
|
Application
of Certain Laws and Regulations
|
18
|
|
|
4.18
|
Business
and Property of Borrower
|
18
|
|
|
4.19
|
Anti-Terrorism
Laws
|
18
|
|
|
4.20
|
Trading
with the Enemy
|
19
|
|
|
4.21
|
Ownership
of Collateral; Liens
|
19
|
|
|
4.22
|
Security
Documents
|
19
|
|
V.
|
AFFIRMATIVE
COVENANTS
|
19
|
|
|
5.1
|
Reserved.
|
19
|
|
|
5.2
|
Conduct
of Business and Maintenance of Existence and Assets
|
19
|
|
|
5.3
|
Violations
|
20
|
|
|
5.4
|
Financial
Covenants
|
20
|
|
|
5.5
|
Execution
of Supplemental Instruments
|
20
|
|
|
5.6
|
Payment
of Indebtedness
|
20
|
|
|
5.7
|
Standards
of Financial Statements
|
20
|
|
|
5.8
|
Further
Assurances
|
20
|
|
VI.
|
NEGATIVE
COVENANTS
|
21
|
|
|
6.1
|
Prohibition
on Fundamental Changes
|
21
|
|
|
6.2
|
Dividends
|
21
|
|
|
6.3
|
Limitation
on Liens
|
21
|
|
|
6.4
|
Nature
of Business
|
21
|
|
|
6.5
|
Transactions
with Affiliates
|
21
|
|
|
6.6
|
Fiscal
Year and Accounting Changes
|
22
|
|
|
6.7
|
Amendment
of Articles of Incorporation, By-Laws
|
22
|
|
|
6.8
|
Compliance
with ERISA
|
22
|
-ii-
TABLE
OF CONTENTS
(continued)
Page
|
|
6.9
|
Anti-Terrorism
Laws
|
22
|
|
|
6.10
|
Trading
with the Enemy Act
|
23
|
|
|
6.11
|
Limitation
on Disposition of Collateral
|
23
|
|
|
6.12
|
Limitation
on Negative Pledge Clauses
|
23
|
|
VII.
|
CONDITIONS
PRECEDENT
|
23
|
|
|
7.1
|
Conditions
to Initial Advances
|
23
|
|
|
7.2
|
Conditions
to Each Advance
|
25
|
|
VIII.
|
INFORMATION
AS TO BORROWER
|
25
|
|
|
8.1
|
Environmental
Reports
|
25
|
|
|
8.2
|
Litigation
|
25
|
|
|
8.3
|
Material
Occurrences
|
26
|
|
|
8.4
|
Annual
Financial Statements
|
26
|
|
|
8.5
|
Quarterly
Financial Statements
|
26
|
|
|
8.6
|
Other
Reports
|
26
|
|
|
8.7
|
Additional
Information
|
26
|
|
|
8.8
|
Notice
of Suits, Adverse Events
|
27
|
|
|
8.9
|
ERISA
Notices and Requests
|
27
|
|
|
8.10
|
Additional
Documents
|
27
|
|
IX.
|
EVENTS
OF DEFAULT
|
28
|
|
|
9.1
|
Nonpayment
|
28
|
|
|
9.2
|
Breach
of Representation
|
28
|
|
|
9.3
|
Financial
Information
|
28
|
|
|
9.4
|
Judicial
Actions
|
28
|
|
|
9.5
|
Noncompliance
|
28
|
|
|
9.6
|
Judgments
|
28
|
|
|
9.7
|
Bankruptcy
of Borrower
|
28
|
|
|
9.8
|
Inability
to Pay
|
29
|
|
|
9.9
|
Cross
Default
|
29
|
|
|
9.10
|
Change
of Control
|
29
|
| 9.11 |
Invalidity
|
29
|
-iii-
TABLE
OF CONTENTS
(continued)
Page
|
|
9.12
|
Licenses
|
29
|
|
|
9.13
|
Pension
Plans
|
29
|
|
|
9.14
|
Security Documents.
|
29
|
|
X.
|
BRASCAN’S
RIGHTS AND REMEDIES AFTER DEFAULT
|
29
|
|
|
10.1
|
Rights
and Remedies
|
30
|
|
|
10.2
|
Brascan’s
Discretion
|
30
|
|
|
10.3
|
Rights
and Remedies not Exclusive
|
30
|
|
|
10.4
|
Allocation
of Payments After Event of Default
|
30
|
|
XI.
|
WAIVERS
AND JUDICIAL PROCEEDINGS
|
31
|
|
|
11.1
|
Waiver
of Notice
|
31
|
|
|
11.2
|
Delay
|
31
|
|
|
11.3
|
Jury
Waiver
|
31
|
|
XII.
|
EFFECTIVE
DATE AND TERMINATION
|
31
|
|
|
12.1
|
Term
|
31
|
|
|
12.2
|
Termination
|
31
|
|
XIII.
|
MISCELLANEOUS
|
32
|
|
|
13.1
|
Governing
Law
|
32
|
|
|
13.2
|
Entire
Understanding
|
32
|
|
|
13.3
|
Successors
and Assigns
|
32
|
|
|
13.4
|
Application
of Payments
|
33
|
|
|
13.5
|
Indemnity
|
33
|
|
|
13.6
|
Notice
|
35
|
|
|
13.7
|
Survival
|
35
|
|
|
13.8
|
Severability
|
35
|
|
|
13.9
|
Expenses
|
35
|
|
|
13.10
|
Injunctive
Relief
|
35
|
|
|
13.11
|
Damages
|
35
|
|
|
13.12
|
Captions
|
36
|
|
|
13.13
|
Counterparts;
Facsimile
|
36
|
-iv-
TABLE
OF CONTENTS
(continued)
Page
|
|
13.14
|
Construction
|
36
|
|
|
13.15
|
Sharing
Information
|
36
|
|
|
13.16
|
Publicity
|
36
|
|
|
13.17
|
Confidentiality
|
36
|
|
|
13.18
|
Certifications
From Banks and Participants; US Patriot Act
|
37
|
-v-
List
of Exhibits and Schedules
|
Exhibits
|
|
Exhibit
2.1
|
Revolving
Credit Note
|
|
Schedules
|
|
Schedule
1.2
|
Permitted
Encumbrances
|
| Schedule 4.1 |
Consents
|
| Schedule 4.2(a) |
States
of Qualification and Good Standing
|
| Schedule 4.2(b) |
Subsidiaries
|
| Schedule 4.4 |
Federal
Tax Identification Number
|
| Schedule 4.8(b) |
Litigation
|
| Schedule 4.8(d) |
Plans
|
| Schedule 4.9 |
Licenses
and Permits
|
-i-
AMENDED
AND RESTATED REVOLVING CREDIT AGREEMENT
Amended
and Restated Revolving Credit Agreement dated as of November 8, 2007, by and
among CRYSTAL RIVER CAPITAL, INC., a corporation organized under the laws of
the
State of Maryland (“Borrower”), and BRASCAN (US) CORPORATION
(“Brascan”), as Lender.
RECITALS:
WHEREAS,
Borrower and Brascan are parties to a Revolving Credit Agreement, dated as
of
August 9, 2007 (as amended, restated, supplemented or otherwise modified from
time to time prior to the date hereof, the “Prior Credit
Agreement”);
WHEREAS,
pursuant to the Prior Credit Agreement, Brascan agreed to make certain loans
and
other extensions of credit to Borrower;
WHEREAS,
each of the parties hereto wishes to and agrees to amend and restate the Prior
Credit Agreement on the terms and conditions set forth herein; and
WHEREAS,
it is the intent of the parties hereto that this Agreement not constitute a
novation of the obligations and liabilities under the Prior Credit Agreement
or
evidence payment of all or any of such obligations and liabilities, and that
this Agreement amend and restate in its entirety the Prior Credit
Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and undertakings herein
contained, and for other good and valuable consideration, the Borrower and
Brascan hereby agree as follows:
I. DEFINITIONS.
1.1 Accounting
Terms. Where explicitly indicated, as used in this Agreement, the
Other Documents or any certificate, report or other document made or delivered
pursuant to this Agreement, accounting terms not defined in Section 1.2 or
elsewhere in this Agreement and accounting terms partly defined in Section
1.2
to the extent not defined, shall have the respective meanings given to them
under GAAP; provided, however, whenever such accounting terms are used for
the
purposes of determining compliance with financial covenants in this Agreement,
such accounting terms shall be defined in accordance with GAAP as applied in
preparation of the audited financial statements of Borrower for the fiscal
year
ended December 31, 2006.
1.2 General
Terms. For purposes of this Agreement the following terms shall
have the following meanings:
“Adjusted
Net Portfolio Value” shall mean, at any time of determination, the fair
value, as set forth in Borrower’s balance sheet most recently delivered pursuant
to Section 8.4 or 8.5 hereof, of Borrower’s portfolio of mortgage-backed
securities, adjusted for a hypothetical 2.0% per annum increase or decrease
in
interest rates and after giving effect to interest rate options, swaps, caps
or
collar agreements with respect to such portfolio.
“Advances”
shall mean the advances made pursuant to Section 2.1 hereof.
“Affiliate”
of any Person shall mean (a) any Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with such Person,
or
(b) any Person who is a director, managing member, general partner or officer
(i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person
described in clause (a) above. For purposes of this definition,
control of a Person shall mean the power, direct or indirect, (x) to vote more
than 25% of the Equity Interests having ordinary voting power for the election
of directors of such Person or other Persons performing similar functions for
any such Person, or (y) to direct or cause the direction of the management
and
policies of such Person whether by ownership of voting securities, by
contract, or otherwise, or owning or possessing the power to vote twenty five
percent (25%) or more of any class of voting securities of any
Person.
“Agreement”
shall mean this Amended and Restated Revolving Credit Agreement, as the same
may
be amended, restated, supplemented or otherwise modified from time to
time.
“Anti-Terrorism
Laws” shall mean any Applicable Laws relating to terrorism or money
laundering, including Executive Order No. 13224, the USA PATRIOT Act, the
Applicable Laws comprising or implementing the Bank Secrecy Act, and the
Applicable Laws administered by the United States Treasury Department’s Office
of Foreign Asset Control (as any of the foregoing Applicable Laws may from
time
to time be amended, renewed, extended, or replaced).
“Applicable
Law” shall mean all laws, rules and regulations applicable to the Person,
conduct, transaction, covenant, Other Document or contract in question,
including all applicable common law and equitable principles, all provisions
of
all applicable state, Federal and foreign constitutions, statutes, rules,
regulations and orders of any Governmental Body, and all orders, judgments
and
decrees of all courts and arbitrators.
“Blocked
Person” shall have the meaning set forth in Section 4.19(b)
hereof.
“Borrower”
shall have the meaning set forth in the preamble to this Agreement and shall
extend to all permitted successors and assigns of such Person.
“Borrower’s
Account” shall have the meaning set forth in Section 2.7
hereof.
“Borrowing
Date” shall have the meaning set forth in Section 2.2(a)
hereof.
“Brascan”
shall have the meaning ascribed to such term in the preamble to this Agreement
and shall include each Person which becomes a transferee, successor or assign
of
Brascan.
“Business
Day” shall mean any day other than Saturday or Sunday or a legal holiday on
which commercial banks are authorized or required by law to be closed for
business in New York, New York and, if the applicable Business Day relates
to
any Eurodollar Rate Loans, such day must also be a day on which dealings are
carried on in the London interbank market.
-2-
“CERCLA”
shall mean the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. §§9601 et seq.
“Change
of Control” shall mean the occurrence of any event which results in Hyperion
Brookfield Crystal River Capital Advisors, LLC, a wholly-owned indirect
subsidiary of Brookfield Asset Management Inc., or another wholly-owned
subsidiary of Brookfield Asset Management Inc. not acting as manager and advisor
of Borrower.
“Closing
Date” shall mean November 8, 2007.
“Code”
shall mean the Internal Revenue Code of 1986, as the same may be amended or
supplemented from time to time, and any successor statute of similar import,
and
the rules and regulations thereunder, as from time to time in
effect.
“Collateral”
shall mean all property of Borrower, now owned or after acquired, upon which
a
Lien is purported to be created by any Security Document.
“Compliance
Certificate” shall mean a compliance certificate to be signed by the Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer, Controller
or Treasurer of Borrower, which shall state that, based on an examination
sufficient to permit such officer to make an informed statement, no Default
or
Event of Default exists, or if such is not the case, specifying such Default
or
Event of Default, its nature, when it occurred, whether it is continuing and
the
steps being taken by Borrower with respect to such default and, such certificate
shall have appended thereto calculations which set forth Borrower’s compliance
with the requirements or restrictions imposed by Section 5.4.
“Consents”
shall mean all filings and all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Bodies and other
third
parties, domestic or foreign, necessary to carry on Borrower’s business or
necessary (including to avoid a conflict or breach under any agreement,
instrument, other document, license, permit or other authorization) for the
execution, delivery or performance of this Agreement, the Other Documents,
including any Consents required under all applicable Federal, state or other
Applicable Law.
“Controlled
Group” shall mean, at any time, Borrower and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control and all other entities which, together with Borrower,
are
treated as a single employer under Section 414 of the Code.
“Default”
shall mean an event, circumstance or condition which, with the giving of notice
or passage of time or both, would constitute an Event of Default.
“Default
Rate” shall have the meaning set forth in Section 3.1 hereof.
“Dollar”
and the sign “$” shall mean lawful money of the United States of
America.
-3-
“Equity
Interests” of any Person shall mean any and all shares, rights to purchase,
options, warrants, general, limited or limited liability partnership interests,
member interests, participation or other equivalents of or interest in
(regardless of how designated) equity of such Person, whether voting or
nonvoting, including common stock, preferred stock, convertible securities
or
any other “equity security” (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange
Act).
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended
from
time to time and the rules and regulations promulgated thereunder.
“Eurodollar
Rate” shall mean, for any Eurodollar Rate Loan for the then current Interest
Period relating thereto, the interest rate per annum determined by Brascan
by
dividing (the resulting quotient rounded upwards, if necessary, to the nearest
1/100th of 1% per annum) (i) the rate of interest equal to the average of the
London interbank offered rates for U.S. Dollars quoted by the British Bankers’
Association as set forth on Moneyline Telerate (or appropriate successor or,
if
British Banker’s Association or its successor ceases to provide such quotes, a
comparable replacement determined by Brascan) display page 3750 as of 11:00
a.m.
(London Time) (or such other display page on the Moneyline Telerate system
as
may replace display page 3750) two (2) Business Days prior to the first day
of
such Interest Period for an amount comparable to such Eurodollar Rate Loan
and having a borrowing date and a maturity comparable to such
Interest Period divided by (ii) a number equal to 1.00 minus the Reserve
Percentage. The Eurodollar Rate shall be adjusted with respect to any
Eurodollar Rate Loan that is outstanding on the effective date of any change
in
the Reserve Percentage as of such effective date. Brascan shall give
prompt notice to Borrower of the Eurodollar Rate as determined or adjusted
in
accordance herewith, which determination shall be conclusive absent manifest
error.
“Eurodollar
Rate Loan” shall mean an Advance at any time that bears interest based on
the Eurodollar Rate.
“Event
of Default” shall have the meaning set forth in Article
IX hereof.
“Exchange
Act” shall have the mean the Securities Exchange Act of 1934, as
amended.
“Executive
Order No. 13224” shall mean the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.
“GAAP”
shall mean generally accepted accounting principles in the United States of
America in effect from time to time.
“Governmental
Body” shall mean any nation or government, any state or other political
subdivision thereof or any entity, authority, agency, division or department
exercising the legislative, judicial, regulatory or administrative functions
of
or pertaining to a government.
“Hazardous
Substance” shall mean, without limitation, any flammable explosives, radon,
radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, Hazardous Wastes,
-4-
hazardous
or Toxic Substances or related materials as defined in CERCLA, the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Sections 1801,
et seq.), RCRA, Articles 15 and 27 of the New York State
Environmental Conservation Law or any other applicable environmental law and
in
the regulations adopted pursuant thereto.
“Hazardous
Wastes” shall mean all waste materials subject to regulation under CERCLA,
RCRA or applicable state law, and any other applicable Federal and state laws
now in force or hereafter enacted relating to hazardous waste
disposal.
“Indebtedness”
of a Person at a particular date shall mean all obligations of such Person
which
in accordance with GAAP would be classified upon a balance sheet as liabilities
(except for trade payables and capital stock and surplus earned or otherwise)
and in any event, without limitation by reason of enumeration, shall include
all
indebtedness, debt and other similar monetary obligations of such Person whether
direct or guaranteed, and all premiums, if any, due at the required prepayment
dates of such indebtedness, and all indebtedness secured by a Lien on assets
owned by such Person, whether or not such indebtedness actually shall have
been
created, assumed or incurred by such Person. Any indebtedness of such
Person resulting from the acquisition by such Person of any assets subject
to
any Lien shall be deemed, for the purposes hereof, to be the equivalent of
the
creation, assumption and incurring of the indebtedness secured thereby, whether
or not actually so created, assumed or incurred.
“Interest
Period” shall mean, with respect to a Eurodollar Rate Loan, the period
commencing on the Borrowing Date of such Eurodollar Rate Loan and ending on
the
Repayment Date for such Eurodollar Rate Loan.
“Lien”
shall mean any mortgage, deed of trust, pledge, hypothecation, assignment,
security interest, lien (whether statutory or otherwise), charge, claim or
encumbrance, or preference, priority or other security agreement or preferential
arrangement held or asserted in respect of any asset of any kind or nature
whatsoever including any conditional sale or other title retention agreement,
any lease having substantially the same economic effect as any of the foregoing,
and the filing of, or agreement to give, any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction.
“Material
Adverse Effect” shall mean a material adverse effect on (a) the financial
condition or results of operations of Borrower, (b) Borrower’s ability to duly
and punctually pay or perform the Obligations in accordance with the terms
thereof, or (c) the practical realization of the benefits of Brascan’s rights
and remedies under this Agreement and the Other Documents.
“Maximum
Advance Amount” shall mean $100,000,000.
“Multiemployer
Plan” shall mean a “multiemployer plan” as defined in Sections 3(37) and
4001(a)(3) of ERISA.
“Multiple
Employer Plan” shall mean a Plan which has two or more contributing sponsors
(including Borrower or any member of the Controlled Group) at least two of
whom
are not under common control, as such a plan is described in Section 4064 of
ERISA.
-5-
“Net
Income” shall mean fiscal year-to-date after-tax net
income from continuing operations, including extraordinary
losses and extraordinary gains, all as determined in accordance with GAAP,
provided, however, that there shall be specifically excluded
therefrom (i) unrealized gains (or losses) on derivatives; and (ii) realized
and
unrealized gains (or losses, including non-cash impairment losses) on securities
available for sale.
“Net
Worth” at a particular date, shall mean (a) the aggregate amount of all
assets of Borrower as may properly be classified as such in accordance with
GAAP
consistently applied and such other assets as are properly classified as
“intangible assets”, less (b) the aggregate amount of all Indebtedness of
Borrower, plus (c) the principal amount of any Qualified Subordinated Debt
shown
on the last balance sheet of Borrower delivered pursuant to Section 8.4 or
8.5
hereof.
“Notice
of Borrowing” shall have the meaning set forth in Section 2.2(a)
hereof.
“Obligations”
shall mean and include any and all loans, advances, debts, liabilities,
obligations, covenants and duties owing by Borrower to Brascan of any kind
or
nature, present or future (including any interest accruing thereon after
maturity, or after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding relating to Borrower,
whether or not a claim for post-filing or post-petition interest is allowed
in
such proceeding), whether or not evidenced by any note, guaranty or other
instrument, arising under this Agreement and the Other Documents, including
but
not limited to reasonable attorneys’ fees and expenses and all obligations of
Borrower to Brascan to perform acts or refrain from taking any
action.
“Ordinary
Course of Business” shall mean, generally, the ordinary course of Borrower’s
business as conducted on the Closing Date.
“Other
Documents” shall mean the Revolving Credit Note, the Security Documents and
any and all other agreements, instruments and documents, now or hereafter
executed by Borrower and/or delivered to Brascan in respect of the transactions
contemplated by this Agreement and the Security Documents.
“Parent”
of any Person shall mean a corporation or other entity owning, directly or
indirectly at least 50% of the shares of stock or other ownership interests
having ordinary voting power to elect a majority of the directors of the Person,
or other Persons performing similar functions for any such Person.
“Payment
Office” shall mean initially Brascan’s office at Three World Financial
▇▇▇▇▇▇,▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇; thereafter,
such other office of Brascan, if any, which it may designate by notice to
Borrower to be the Payment Office.
“PBGC”
shall mean the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor.
“Pension
Benefit Plan” shall mean at any time any employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Code and
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either
(i) is maintained by any member of the Controlled Group for employees of any
member of the Controlled Group; or (ii) has at any time within the preceding
five years been maintained by any entity which was at such time a member of
the
Controlled Group for employees of any entity which was at such time a member
of
the Controlled Group.
“Permitted
Encumbrances” shall mean (a) Liens for taxes, assessments or other
governmental charges not delinquent or being Properly Contested; (b) Liens
disclosed in the financial statements referred to in Section 4.5, the existence
of which Brascan is deemed to have consented to in writing; (c) deposits or
pledges to secure obligations under worker’s compensation, social security or
similar laws, or under unemployment insurance; (d) deposits or pledges to secure
bids, tenders, contracts (other than contracts for the payment of money),
leases, statutory obligations, surety and appeal bonds and other obligations
of
like nature arising in the Ordinary Course of Business; (e) Liens arising by
virtue of the rendition, entry or issuance against Borrower or any Subsidiary,
or any property of Borrower or any Subsidiary, of any judgment, writ, order,
or
decree which has either been stayed or bonded, or which does not constitute
or
result in an Event of Default under Section 9.6; (f) common carriers’,
mechanics’, workers’, materialmen’s or other like Liens arising in the Ordinary
Course of Business with respect to obligations which are not due or which are
being contested in good faith by Borrower; (g) Liens placed upon fixed assets
hereafter acquired to secure a portion of the purchase price thereof, provided
that any such lien shall not encumber any other property of Borrower; (h) Liens
disclosed on Schedule 1.2; (j) Liens in favor of counterparties to repurchase
agreements entered into in the Ordinary Course of Business; and (k) Liens
created pursuant to the Security Documents.
“Person”
shall mean any individual, sole proprietorship, partnership, corporation,
business trust, joint stock company, trust, unincorporated organization,
association, limited liability company, limited liability partnership,
institution, public benefit corporation, joint venture, entity or Governmental
Body (whether Federal, state, county, city, municipal or otherwise, including
any instrumentality, division, agency, body or department thereof).
“Plan”
shall mean any employee benefit plan within the meaning of Section 3(3) of
ERISA
(including a Pension Benefit Plan), maintained for employees of Borrower or
any
member of the Controlled Group or any such Plan to which Borrower or any member
of the Controlled Group is required to contribute on behalf of any of its
employees.
“Prior
Credit Agreement” shall have the meaning ascribed to it in the Recitals
hereof.
“Properly
Contested” shall mean, in the case of any Indebtedness of any Person
(including any taxes) that is not paid as and when due or payable by reason
of
such Person’s bona fide dispute concerning its liability to pay same or
concerning the amount thereof, (i) such Indebtedness is being properly contested
in good faith by appropriate proceedings promptly instituted and diligently
conducted; (ii) such Person has established appropriate reserves as shall be
required in conformity with GAAP; (iii) the non-payment of such Indebtedness
shall not have a Material Adverse Effect; (iv) if such Indebtedness results
from, or is determined by the entry, rendition or issuance against a Person
or
any of its assets of a judgment, writ, order or decree, enforcement of such
judgment, writ, order or decree is stayed pending a timely appeal or
other
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judicial
review; and (v) if such contest is abandoned, settled or determined adversely
(in whole or in part) to such Person, such Person forthwith pays such
Indebtedness and all penalties, interest and other amounts due in connection
therewith.
“Qualified
Subordinated Debt” shall mean, as of any date, indebtedness of Borrower
(including any junior subordinated debentures and guaranties related to the
issuance of trust preferred securities by one or more trusts that are affiliates
of Borrower) where (I) the papers evidencing, securing, governing or otherwise
related to such indebtedness impose covenants and conditions on Borrower that
are no more restrictive or onerous than the covenants and conditions imposed
on
Borrower hereunder, (II) that by the terms of such papers, such indebtedness
is
subordinated to the obligations of Borrower hereunder and (III) the principal
of
which is not due and payable until thirteen (13) months or more after the
Closing Date.
“RCRA”
shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et
seq., as same may be amended from time to time.
“Regulations”
shall have the meaning set forth in Section 3.11 hereof.
“Repayment
Date” shall have the meaning set forth in Section 2.2(a)
hereof.
“Reportable
Event” shall mean a reportable event described in Section 4043(c) of ERISA
or the regulations promulgated thereunder.
“Reserve
Percentage” shall mean as of any day the maximum percentage in effect on
such day as prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for determining the reserve requirements (including
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as “Eurocurrency
Liabilities”).
“Revolving
Credit Note” shall mean the promissory notes referred to in Section 2.1
hereof.
“Revolving
Interest Rate” shall mean an interest rate per annum equal to the
sum of the Eurodollar Rate plus 2.50% per annum with respect to Eurodollar
Rate
Loans.
“SEC”
shall mean the Securities and Exchange Commission or any successor
thereto.
“Security
Documents” shall mean any and all agreements, instruments and documents, now
or hereafter executed by Borrower and/or delivered to Brascan in respect of
the
granting of Liens on Collateral.
“Subsidiary”
of any Person shall mean a corporation or other entity of whose Equity Interests
having ordinary voting power (other than Equity Interests having such power
only
by reason of the happening of a contingency) to elect a majority of the
directors of such corporation, or other Persons performing similar functions
for
such entity, are owned, directly or indirectly, by such Person.
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“Term”
shall have the meaning set forth in Section 12.1 hereof.
“Termination
Event” shall mean (i) a Reportable Event with respect to any Plan or
Multiemployer Plan; (ii) the withdrawal of Borrower or any member of the
Controlled Group from a Plan or Multiemployer Plan during a plan year in which
such entity was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA; (iii) the providing of notice of intent to terminate a Plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the institution by
the
PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event
or
condition (a) which might constitute grounds under Section 4042 of ERISA for
the
termination of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of Borrower
or
any member of the Controlled Group from a Multiemployer Plan.
“Toxic
Substance” shall mean and include any material present on the real property
or the leasehold interests which has been shown to have significant adverse
effect on human health or which is subject to regulation under the Toxic
Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., applicable state law,
or any other applicable Federal or state laws now in force or hereafter enacted
relating to toxic substances. “Toxic Substance” includes but is not
limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based
paints.
“Trading
with the Enemy Act” shall mean the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
and any enabling legislation or executive order relating thereto.
“Transactions”
shall mean the consummation of the transactions contemplated under this
Agreement and the Other Documents.
“USA
Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.
1.3 Certain
Matters of Construction. The terms “herein”, “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. All
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules
to,
this Agreement. Any pronoun used shall be deemed to cover all
genders. Wherever appropriate in the context, terms used herein in
the singular also include the plural and vice versa. All references
to statutes and related regulations shall include any amendments of same and
any
successor statutes and regulations. Unless otherwise provided, all
references to any instruments or agreements to which Brascan is a party,
including references to any of the Other Documents, shall include any and all
modifications or amendments thereto and any and all extensions or renewals
thereof to the extent such modifications, amendments, extensions or renewals
are
permitted by the terms hereof. All references herein to the time of
day shall mean the time in New York, New York. Whenever the words
“including” or “include” shall be used, such words shall be understood to mean
“including, without limitation” or “include, without
limitation”. A
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Default
or Event of Default shall be deemed to exist at all times during the period
commencing on the date that such Default or Event of Default occurs to the
date
on which such Default or Event of Default is waived in writing pursuant to
this
Agreement or, is cured within any period of cure expressly provided for in
this
Agreement; and an Event of Default shall “continue” or be “continuing” until
such Event of Default has been waived in writing by Brascan. Any
agreement entered into by Brascan pursuant to this Agreement or any of the
Other
Documents, any payment made by or to or funds received by Brascan pursuant
to or
as contemplated by this Agreement or any of the Other Documents, or any act
taken or omitted to be taken by Brascan, shall, unless otherwise expressly
provided, be entered into, made or received, or taken or omitted, for the
benefit or account of Brascan. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or otherwise within the limitations of, another covenant shall not avoid
the
occurrence of a default if such action is taken or condition
exists. In addition, all representations and warranties hereunder
shall be given independent effect so that if a particular representation or
warranty proves to be incorrect or is breached, the fact that another
representation or warranty concerning the same or similar subject matter is
correct or is not breached shall not affect the incorrectness of a breach of
a
representation or warranty hereunder.
II. ADVANCES,
PAYMENTS.
2.1 Amount
of Advances. Subject to the terms and conditions set forth in
this Agreement, Brascan shall make Advances of Eurodollar Rate Loans to
Borrower, upon the request of Borrower in accordance with the provisions of
Section 2.2 hereof, in aggregate amounts outstanding at any time up to the
Maximum Advance Amount. The Advances shall be evidenced by one or
more secured promissory notes (collectively, the “Revolving Credit Note”)
substantially in the form attached hereto as Exhibit
2.1.
2.2 Procedure
for Advances Borrowing.
(a) Borrower
shall provide to Brascan a written request to incur an Advance hereunder (each,
a “Notice of Borrowing”) no later than 12:00 p.m., on any Business Day,
which Notice of Borrowing shall specify: (i) the date of the proposed borrowing
(the “Borrowing Date”), which shall be at least one (1) Business Day
after Brascan’s receipt of such Notice of Borrowing; (ii) the amount
of such Advance to be made in Eurodollar Rate Loans and (iii) the date such
Advance shall be repaid (the “Repayment Date”).
(b) Eurodollar
Rate Loans shall not be made available to Borrower during the continuance of
a
Default or an Event of Default.
(c) Borrower
shall indemnify Brascan and hold Brascan harmless from and against any and
all
losses or expenses that Brascan may sustain or incur as a consequence of any
default by Borrower in the payment of the principal of or interest on any
Eurodollar Rate Loan or failure by Borrower to complete a borrowing of a
Eurodollar Rate Loan after notice thereof has been given.
(d) Notwithstanding
any other provision hereof, if any Applicable Law, treaty, regulation or
directive, or any change therein or in the interpretation or application
thereof, shall
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make
it
unlawful for Brascan (for purposes of this subsection (d), the term
“Lender” shall include Brascan and the office or branch where Brascan or
any corporation or bank controlling such Lender makes or maintains any
Eurodollar Rate Loans) to make or maintain its Eurodollar Rate Loans, the
obligation of Lender to make Eurodollar Rate Loans hereunder shall forthwith
be
cancelled and Borrower shall, if any Eurodollar Rate Loans are then outstanding,
promptly upon request from Lender, either pay all such Eurodollar
Rate Loans or convert such Eurodollar Rate Loans into loans priced according
to
Brascan’s cost of funds for making such loans plus 2.25%. If any such
payment or conversion of any Eurodollar Rate Loan is made on a day that is
not
the last day of the Interest Period applicable to such Eurodollar Rate Loan,
Borrower shall pay Brascan, upon Brascan’s request, such amount or amounts as
may be necessary to compensate Brascan for any loss or expense sustained or
incurred by Brascan in respect of such Eurodollar Rate Loan as a result of
such
payment or conversion, including (but not limited to) any interest or other
amounts payable by Brascan to Brascan of funds obtained by Brascan in order
to
make or maintain such Eurodollar Rate Loan. A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by
Brascan to Borrower shall be conclusive absent manifest error.
2.3 Disbursement
of Advance Proceeds. All Advances shall be disbursed from
whichever office or other place Brascan may designate from time to time and,
together with any and all other Obligations of Borrower to Brascan, shall be
charged to Borrower’s Account on Brascan’s books. During the Term,
Borrower may use the Advances by borrowing and reborrowing, all in accordance
with the terms and conditions hereof. The proceeds of each Advance
requested by Borrower under Section 2.2(a) hereof shall, with respect to
requested Advances to the extent Brascan make such Advances, be made available
to Borrower on the applicable Borrowing Date by way of credit to Borrower’s
operating account at Brascan, or such other bank as Borrower may designate
following notification to Brascan, in immediately available Federal funds or
other immediately available funds or be disbursed to Brascan to be applied
to
the outstanding Obligations giving rise to such deemed request.
2.4 Maximum
Advances.
The
aggregate balance of Advances outstanding at any time shall not exceed the
Maximum Advance Amount.
2.5 Manner
of Borrowing and Repayment of Advances.
(a) Except
as expressly provided herein, each payment by Borrower on account of principal
and interest on an Advance, and any other amounts payable hereunder, or under
any of the Other Documents, shall be made without any deduction whatsoever,
including, but not limited to, any deduction for any setoff or counterclaim,
and
shall be made to Brascan at the Payment Office, not later than 1:00 p.m., on
the
Repayment Date with respect to such Advance, in Dollars and in immediately
available funds.
(b) Subject
to the terms hereof, the Borrower shall repay all Obligations including the
outstanding principal amount of all Advances hereunder together with all accrued
interest, fees and other amounts then unpaid by it with respect to such Advances
in full on the
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first
anniversary date of the Closing Date and the commitments of Brascan hereon
shall
be automatically terminated on such date.
2.6 Repayment
of Excess Advances. The aggregate balance of Advances outstanding
at any time in excess of the maximum amount of Advances permitted hereunder
shall be immediately due and payable without the necessity of any demand, at
the
Payment Office, whether or not a Default or Event of Default has
occurred.
2.7 Statement
of Account. Brascan shall maintain, in accordance with its
customary procedures, a loan account (“Borrower’s Account”) in the name
of Borrower in which shall be recorded the date and amount of each Advance
made
by Brascan and the date and amount of each payment in respect thereof; provided,
however, the failure by Brascan to record the date and amount of any Advance
or
payment shall not adversely affect Brascan or Borrower. Each month,
Brascan shall send to Borrower a statement showing the accounting for the
Advances made and payments made or credited in respect thereof. The
monthly statements shall be deemed correct and binding upon Borrower in the
absence of manifest error and shall constitute an account stated between Brascan
and Borrower unless Brascan receives a statement in writing, by facsimile,
or by
email of Borrower’s specific exceptions thereto within thirty (30) days after
such statement is received by Borrower. The records of Brascan with
respect to the loan account shall be conclusive evidence absent manifest error
of the amounts of Advances and other charges thereto and of payments applicable
thereto.
2.8 Additional
Payments. Any sums expended by Brascan due to Borrower’s failure
to perform or comply with its obligations under this Agreement or any Other
Document, may be charged to Borrower’s Account as an Advance and added to the
Obligations.
2.9 Use
of Proceeds.
(a) Borrower
shall use the proceeds of Advances for general working capital
purposes.
(b) Without
limiting the generality of Section 2.9(a) above, neither Borrower nor any other
Person which may in the future become a party to this Agreement or the Other
Documents as Borrower, intends to use nor shall they use any portion of the
proceeds of the Advances, directly or indirectly, for any purpose in violation
of the Trading with the Enemy Act.
III. INTEREST
AND FEES.
3.1 Interest. Interest
on each Advance shall be payable in arrears on the Repayment Date with respect
to such Advance. Interest charges shall be computed on the actual
principal amount of Advances outstanding at a rate per annum equal to the
Revolving Interest Rate. The Eurodollar Rate shall be adjusted with
respect to Eurodollar Rate Loans without notice or demand of any kind on the
effective date of any change in the Reserve Percentage as of such effective
date. Upon and after the occurrence of an Event of Default, and
during the continuation thereof, Eurodollar Rate Loans shall bear interest
at
the Revolving Interest Rate for Eurodollar Rate Loans plus 3.75% per annum
(as
applicable, the “Default Rate”).
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3.2 Computation
of Interest. Interest hereunder shall be computed on the basis of
a year of 360 days and for the actual number of days elapsed. If any
payment to be made hereunder becomes due and payable on a day other than a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and interest thereon shall be payable at the Revolving Interest
Rate during such extension.
3.3 Maximum
Charges. In no event whatsoever shall interest and other charges
charged hereunder exceed the highest rate permissible under law. In the event
interest and other charges as computed hereunder would otherwise exceed the
highest rate permitted under law, such excess amount shall be first applied
to
any unpaid principal balance owed by Borrower, and if the then remaining excess
amount is greater than the previously unpaid principal balance, Brascan shall
promptly refund such excess amount to Borrower and the provisions hereof shall
be deemed amended to provide for such permissible rate.
3.4 Increased
Costs. In the event that any Applicable Law, treaty or
governmental regulation, or any change therein or in the interpretation or
application thereof, or compliance by Brascan and the office or branch where
Brascan makes or maintains any Eurodollar Rate Loans with any request or
directive (whether or not having the force of law) from any central bank or
other financial, monetary or other authority, shall:
(a) subject
Brascan to any tax of any kind whatsoever with respect to this Agreement or
any
Other Document or change the basis of taxation of payments to Brascan of
principal, fees, interest or any other amount payable hereunder or under any
Other Documents (except for changes in the rate of tax on the overall net income
of Brascan by the jurisdiction in which it maintains its principal
office);
(b) impose,
modify or hold applicable any reserve, special deposit, assessment or similar
requirement against assets held by, or deposits in or for the account of,
advances or loans by, or other credit extended by, any office of Brascan,
including pursuant to Regulation D of the Board of Governors of the Federal
Reserve System; or
(c) impose
on Brascan or the London interbank Eurodollar market any other condition with
respect to this Agreement or any Other Document;
and
the
result of any of the foregoing is to increase the cost to Brascan of making,
renewing or maintaining its Advances hereunder by an amount that Brascan deems
to be material or to reduce the amount of any payment (whether of principal,
interest or otherwise) in respect of any of the Advances by an amount that
Brascan deems to be material, then, in any case Borrower shall promptly pay
Brascan, upon its demand, such additional amount as shall compensate Brascan
for
such additional cost or such reduction, as the case may be, provided that the
foregoing shall not apply to increased costs which are reflected in the
Eurodollar Rate. Brascan shall certify the amount of such additional
cost or reduced amount to Borrower, and such certification shall be conclusive
absent manifest error
3.5 Basis
For Determining Interest Rate Inadequate or Unfair. In the event
that Brascan shall have determined that:
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(a) reasonable
means do not exist for ascertaining the Eurodollar Rate applicable pursuant
to
Section 2.2 hereof for any Advance; or
(b) Dollar
deposits in the relevant amount and for the relevant maturity are not available
in the London interbank Eurodollar market, with respect to an outstanding
Eurodollar Rate Loan or a proposed Eurodollar Rate Loan,
(c) then
Brascan shall give Borrower prompt written, telephonic or telegraphic notice
of
such determination either on the date Brascan receives the Notice of Borrowing
or on the date of the proposed borrowing. If such notice is given,
(i) any such requested Eurodollar Rate Loan shall be made according to Brascan’s
cost of funds for such Advances plus 2.50%. Until
such notice has been withdrawn, Brascan shall have no obligation to make
Eurodollar Rate Loans or maintain outstanding Eurodollar Rate
Loans.
IV. REPRESENTATIONS
AND WARRANTIES.
Borrower
represents and warrants as follows:
4.1 Authority. Borrower
has the corporate power and authority and legal right to enter into this
Agreement and the Other Documents and to perform all its Obligations hereunder
and thereunder. This Agreement and the Other Documents have been duly
executed and delivered by Borrower, and this Agreement and the Other Documents
constitute the legal, valid and binding obligations of Borrower enforceable
in
accordance with their terms, except as such enforceability may be limited by
any
applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors’ rights generally. The execution, delivery and performance
of this Agreement and of the Other Documents (a) are within Borrower’s corporate
powers, have been duly authorized by all necessary corporate action, are not
in
contravention of the terms of Borrower’s by-laws, certificate of incorporation
or other applicable documents relating to Borrower’s formation or of any
material agreement or undertaking to which Borrower is a party or by which
Borrower is bound, (b) shall not, except as could not reasonably be expected
to
result in a Material Adverse Effect, conflict with or violate any law or
regulation, or any judgment, order or decree of any Governmental Body applicable
to Borrower, (c) shall not require the Consent of any Governmental Body or
any
other Person, except those Consents set forth on Schedule 4.1 hereto, all of
which shall have been duly obtained, made or compiled prior to the Closing
Date
and which are in full force and effect and (d) shall not conflict with, nor
result in any breach in any of the provisions of or constitute a default under
or result in the creation of any Lien except Permitted Encumbrances upon any
of
the Collateral under the provisions of any agreement, charter document,
instrument, by-law or other instrument to which Borrower is a party or by which
it or its property is a party or by which it may be bound.
4.2 Formation
and Qualification.
(a) Borrower
is duly incorporated and in good standing under the laws of the state listed
on
Schedule 4.2(a) and is qualified to do business and is in good standing in
the
states listed on Schedule 4.2(a) which constitute all states in which
qualification and good standing are necessary for Borrower to conduct its
business and own its property and where the failure to so qualify could
reasonably be expected to have a Material Adverse Effect. Borrower
has delivered
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to
Brascan true and complete copies of its certificate of incorporation and by-laws
and shall promptly notify Brascan of any amendment or material changes
thereto.
(b) As
of the Closing Date, the only Subsidiaries of Borrower are listed on Schedule
4.2(b).
4.3 Survival
of Representations and Warranties. All representations and
warranties of Borrower contained in this Agreement and the Other Documents
shall
be true at the time of Borrower’s execution of this Agreement and the Other
Documents, and shall survive the execution, delivery and acceptance thereof
by
the parties thereto and the closing of the transactions described therein or
related thereto.
4.4 Tax
Returns. Borrower’s Federal tax identification number is set
forth on Schedule 4.4. Borrower has filed all Federal, state and
local tax returns and other reports it is required by law to file and has paid
all taxes, assessments, fees and other governmental charges that are due and
payable except those that are being contested by Borrower in good faith and
with
respect to which reserves in accordance with GAAP have been provided on the
books of Borrower. Federal, state and local income tax returns of
Borrower have been examined and reported upon by the appropriate taxing
authority or closed by applicable statute and satisfied for all fiscal years
prior to and including the fiscal year ending December 31, 2006. The
provision for taxes on the books of Borrower is adequate for all years not
closed by applicable statutes, and for its current fiscal year, and Borrower
has
no knowledge of any deficiency or additional assessment in connection therewith
not provided for on its books.
4.5 Financial
Statements. The consolidated and consolidating balance sheets of
Borrower, its Subsidiaries and such other Persons described therein (including
the accounts of all Subsidiaries for the respective periods during which a
subsidiary relationship existed) as of September 30, 2007, and the related
statements of income, changes in stockholder’s equity, and changes in cash flow
for the period ended on such date, copies of which have been delivered to
Brascan, have been prepared in accordance with GAAP, consistently applied
(subject to normal year-end adjustments and the absence of footnote disclosures)
and present fairly in all material respects the financial position of Borrower
and its Subsidiaries at such date and the results of their operations for such
period. Since the date of the latest financial statements delivered
pursuant to Article VIII, no Material Adverse Effect has occurred and is
continuing.
4.6 Entity
Name. As of the Closing Date, Borrower has not been known by any
other corporate name in the past five years nor has Borrower been the surviving
corporation of a merger or consolidation or acquired all or substantially all
of
the assets of any Person during such preceding five (5) year
period.
4.7 O.S.H.A.
and Environmental Compliance.
(a) To
the extent applicable to Borrower, except as could not reasonably be excepted
to
result in a Material Adverse Effect, (i) Borrower has duly complied with, and
its facilities, business, assets, property, leaseholds, real property and
equipment are in compliance in all material respects with,
the provisions of the Federal Occupational Safety and Health Act, the
Environmental Protection Act, RCRA and all other Environmental Laws and (ii)
there have been
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no
outstanding citations, notices or orders of non-compliance issued to Borrower
or
relating to its business, assets, property, leaseholds or equipment under any
such laws, rules or regulations.
(b) Except
as could not reasonably be expected to result in a Material Adverse Effect,
Borrower has been issued all required Federal, state and local licenses,
certificates or permits relating to all applicable environmental laws necessary
to the operations of the business of Borrower.
4.8 Solvency;
No Litigation, Violation, Indebtedness or Default.
(a) After
giving effect to the Transactions, Borrower shall be solvent, able to pay its
debts as they mature, shall have capital sufficient to carry on its business
and
all businesses in which it is about to engage, and (i) as of the Closing Date,
the fair present saleable value of its assets, calculated on a going concern
basis, is in excess of the amount of its liabilities and (ii) subsequent to
the
Closing Date, the fair saleable value of its assets (calculated on a going
concern basis) shall be in excess of the amount of its liabilities.
(b) Except
as disclosed in Schedule 4.8(b), Borrower has no pending or threatened
litigation, arbitration, actions or proceedings which could reasonably be
expected to have a Material Adverse Effect.
(c) Borrower
is not in violation of any applicable statute, law, rule, regulation or
ordinance in any respect which could reasonably be expected to have a Material
Adverse Effect, nor is Borrower in violation of any order applicable to
Borrower, of any court, Governmental Body or arbitration board or tribunal
which
could reasonably be expected to have a Material Adverse Effect.
(d) Neither
Borrower nor any member of the Controlled Group maintains or contributes to
any
Plan other than those listed on Schedule 4.8(d) hereto. (i) No Plan
has incurred any “accumulated funding deficiency,” as defined in Section
302(a)(2) of ERISA and Section 412(a) of the Code, whether or not waived, and
Borrower and each member of the Controlled Group has met all applicable minimum
funding requirements under Section 302 of ERISA in respect of each Plan; (ii)
each Plan which is intended to be a qualified plan under Section 401(a) of
the
Code as currently in effect has been determined by the Internal Revenue Service
to be qualified under Section 401(a) of the Code and the trust related thereto
is exempt from Federal income tax under Section 501(a) of the Code; (iii)
neither Borrower nor any member of the Controlled Group has incurred any
liability to the PBGC other than for the payment of premiums, and there are
no
premium payments which have become due which are unpaid; (iv) no Plan has been
terminated by the plan administrator thereof nor by the PBGC, and there is
no
occurrence which would cause the PBGC to institute proceedings under Title
IV of
ERISA to terminate any Plan; (v) at this time, the current value of the assets
of each Plan exceeds the present value of the accrued benefits and other
liabilities of such Plan and neither Borrower nor any member of the Controlled
Group knows of any facts or circumstances which would materially change the
value of such assets and accrued benefits and other liabilities; (vi) neither
Borrower nor any member of the Controlled Group has breached any of the
responsibilities, obligations or duties imposed on it by ERISA with respect
to
any Plan; (vii) neither Borrower nor any member of a Controlled Group has
incurred any liability for any excise
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tax
arising under Section 4972 or 4980B of the Code, and no fact exists which could
give rise to any such liability; (viii) neither Borrower nor any member of
the
Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has engaged
in a “prohibited transaction” described in Section 406 of the ERISA or Section
4975 of the Code nor taken any action which would constitute or result in a
Termination Event with respect to any such Plan which is subject to ERISA;
(ix)
Borrower and each member of the Controlled Group has made all contributions
due
and payable with respect to each Plan; (x) there exists no event described
in
Section 4043(b) of ERISA, for which the thirty (30) day notice period has not
been waived; (xi) neither Borrower nor any member of the Controlled Group has
any fiduciary responsibility for investments with respect to any plan existing
for the benefit of persons other than employees or former employees of Borrower
and any member of the Controlled Group; (xii) neither Borrower nor any member
of
the Controlled Group maintains or contributes to any Plan which provides health,
accident or life insurance benefits to former employees, their spouses or
dependents, other than in accordance with Section 4980B of the Code; (xiii)
neither Borrower nor any member of the Controlled Group has withdrawn,
completely or partially, from any Multiemployer Plan so as to incur liability
under the Multiemployer Pension Plan Amendments Act of 1980 and there exists
no
fact which would reasonably be expected to result in any such liability; and
(xiv) no Plan fiduciary (as defined in Section 3(21) of ERISA) has any liability
for breach of fiduciary duty or for any failure in connection with the
administration or investment of the assets of a Plan.
4.9 Licenses
and Permits. Except as set forth in Schedule 4.9 or that could
reasonably be expected to have a Material Adverse Effect, Borrower (a) is in
compliance with and (b) has procured and is now in possession of, all material
licenses or permits required by any applicable Federal, state or local law,
rule
or regulation for the operation of its business in each jurisdiction wherein
it
is now conducting or proposes to conduct business.
4.10 Default
of Indebtedness. Except as could not reasonably be expected to
have a Material Adverse Effect, Borrower is not in default in the payment of
the
principal of or interest on any Indebtedness or under any instrument or
agreement under or subject to which any Indebtedness has been issued and no
event has occurred under the provisions of any such instrument or agreement
which with or without the lapse of time or the giving of notice, or both,
constitutes or would constitute an event of default thereunder.
4.11 No
Default. Except as could not reasonably be expected to have a
Material Adverse Effect, Borrower is not in default in the payment or
performance of any of its contractual obligations.
4.12 No
Burdensome Restrictions. Borrower is not party to any contract or
agreement the performance of which could reasonably be expected to have a
Material Adverse Effect.
4.13 Margin
Regulations. Borrower is not engaged, nor shall it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of “purchasing” or “carrying” any “margin stock” within
the respective meanings of each of the quoted terms under Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. No part of the proceeds of any Advance shall be
used for “purchasing” or “carrying” “margin stock” as defined in Regulation U of
such Board of Governors.
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4.14 Investment
Company Act. Borrower is not an “investment company” registered
or required to be registered under the Investment Company Act of 1940, as
amended, nor is it controlled by such a company.
4.15 Disclosure. No
representation or warranty made by Borrower in this Agreement or in any
financial statement, report, certificate or any other document furnished in
connection herewith or therewith contains any untrue statement of material
fact
or omits to state any material fact necessary to make the statements herein
or
therein, in light of the circumstances under which they were made, not
misleading in any material respect. There is no fact known to
Borrower or which reasonably should be known to Borrower which Borrower has
not
disclosed to Brascan in writing with respect to the transactions contemplated
by
this Agreement which could reasonably be expected to have a Material Adverse
Effect.
4.16 Conflicting
Agreements. No provision of any mortgage, indenture, contract,
agreement, judgment, decree or order binding on Borrower conflicts with, or
requires any Consent which has not already been obtained to, or would in any
way
prevent the execution, delivery or performance of, the terms of this Agreement
or the Other Documents.
4.17 Application
of Certain Laws and Regulations. There is no law, statute, rule
or regulation applicable to Borrower, which regulates the incurrence of any
Indebtedness.
4.18 Business
and Property of Borrower. Borrower does not propose to engage in
any business other than the business engaged in on the Closing Date and
businesses reasonably related thereto.
4.19 Anti-Terrorism
Laws.
(a) General. Neither
Borrower nor any Affiliate of Borrower is in violation of any Anti-Terrorism
Law
or engages in or conspires to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate,
any of the prohibitions set forth in any Anti-Terrorism Law.
(b) Executive
Order No. 13224. Neither Borrower nor any Affiliate of Borrower
acting or benefiting in any capacity in connection with the Advances or other
transactions hereunder, is any of the following (each a “Blocked
Person”):
(i) a
Person that is listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order No. 13224;
(ii) a
Person owned or controlled by, or acting for or on
behalf of, any Person that is listed
in the annex to, or is otherwise subject to the provisions of, the Executive
Order No. 13224;
(iii) a
Person or entity with which Brascan is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;
(iv) a
Person or entity that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order No. 13224;
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(v) a
Person or entity that is named as a “specially designated national” on the most
current list published by the U.S. Treasury Department Office of Foreign Asset
Control at its official website or any replacement website or other replacement
official publication of such list, or
(vi) a
Person or entity who is affiliated or associated with a Person or entity listed
above.
(c) Neither
Borrower or, to the knowledge of Borrower, any of its affiliates acting in
any
capacity in connection with the Advances or other transactions hereunder (i)
conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Blocked Person, or (ii)
deals in, or otherwise engages in any transaction relating to, any property
or
interests in property blocked pursuant to the Executive
Order No. 13224.
4.20 Trading
with the Enemy. Borrower has not engaged, nor does it intend to
engage, in any business or activity prohibited by the Trading with the Enemy
Act.
4.21 Ownership
of Collateral; Liens. To the extent Borrower has pledged any
Collateral to Brascan, Borrower will have good title to, or a valid interest
in,
such Collateral, and none of such Collateral will be subject to any Lien except
Permitted Encumbrances.
4.22 Security
Documents. To the extent Borrower has pledged any Collateral to
Brascan, the Security Documents covering such Collateral will be effective
to
create in favor of Brascan a legal, valid and enforceable security interest
in
the Collateral described therein and proceeds thereof, which security interest
will be perfected and prior and superior in right to any other Person upon
the
filing of appropriate financing statements in the appropriate filing offices
and/or the delivery of the such portion of the Collateral that requires
possession for perfection of security interests.
V. AFFIRMATIVE
COVENANTS.
Borrower
shall, until payment in full of the Obligations and termination of this
Agreement:
5.1 Reserved.
5.2 Conduct
of Business and Maintenance of Existence and Assets. (a) Conduct
continuously and operate actively its business according to good business
practices and maintain all of its properties useful or necessary in its business
in good working order and condition (reasonable wear and tear excepted and
except as may be disposed of in accordance with the terms of this Agreement);
(b) keep in full force and effect its existence and comply in all material
respects with the laws and regulations governing the conduct of its business
where the failure to do so could reasonably be expected to have a Material
Adverse Effect; and (c) make all such reports and pay all such franchise and
other taxes and license fees and do all such other acts and things as may be
lawfully required to maintain its rights, licenses, leases, powers and
franchises under the laws of the United States or any political subdivision
thereof where the failure to do so could reasonably be expected to have a
Material Adverse Effect.
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5.3 Violations. Promptly
notify Brascan in writing of any violation of any law, statute, regulation
or
ordinance of any Governmental Body, or of any agency thereof, applicable to
Borrower which could reasonably be expected to have a Material Adverse
Effect.
5.4 Financial
Covenants. Beginning with the fiscal quarter ended September 30,
2007:
(a) Net
Worth. For each fiscal quarter of Borrower, maintain Net Worth in
an amount equal to not less than $175,000,000.
(b) Quarterly
Net Income. For each fiscal quarter of Borrower, earn Net Income
of not less than $4,000,000.
(c) Rolling
Four Quarter Income. For the most recently ended fiscal quarter
of Borrower and the three preceding fiscal quarters of Borrower, earn Net Income
of not less than $20,000,000.
(d) Maximum
Post Shock Test. Cause at all times the result of the fair value,
as set forth in the Borrower’s balance sheet most recently delivered pursuant to
Section 8.4 and 8.5 hereof, of Borrower’s portfolio of mortgage-backed
securities minus Adjusted Net Portfolio Value of such mortgage-backed securities
to be less than twenty-five percent (25%) of Net Worth as set forth in such
balance sheet.
(e) Maximum
Indebtedness to Total Net Worth Ratio. Maintain as of the end of
each fiscal quarter of Borrower, a ratio of Indebtedness to Net Worth of not
more than 10.0 to 1.0.
5.5 Execution
of Supplemental Instruments. Execute and deliver to Brascan from
time to time, upon demand, and such other instruments as Brascan may reasonably
request, in order that the full intent of this Agreement may be carried into
effect.
5.6 Payment
of Indebtedness. Pay, discharge or otherwise satisfy at or before
maturity (subject, where applicable, to specified grace periods) all its
obligations and liabilities of whatever nature, except when the failure to
do so
could not reasonably be expected to have a Material Adverse Effect or when
the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and Borrower shall have provided for such reserves
as
Brascan may reasonably deem proper and necessary.
5.7 Standards
of Financial Statements. Cause all financial statements referred
to in Sections 8.4, 8.5, 8.6, 8.7 and 8.8 as to which GAAP is applicable to
be
complete and correct in all material respects (subject, in the case of interim
financial statements, to normal year-end audit adjustments) and to be prepared
in reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein (except as concurred in by such reporting
accountants or officer, as the case may be, and disclosed therein).
5.8 Further
Assurances. From time to time execute and deliver, or cause to be
executed and delivered, such additional instruments, certificates or documents,
and take such actions, as Agent may reasonably request for the purposes of
implementing or effectuating the
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provisions
of this Agreement and the Other Documents, or of more fully perfecting or
renewing the rights of Brascan with respect to the Collateral (or with respect
to any additions thereto or replacements or proceeds thereof or with respect
to
any other property or assets hereafter acquired by Borrower which may be deemed
to be part of the Collateral) pursuant hereto or thereto. Upon the
exercise by Brascan of any power, right, privilege or remedy pursuant to this
Agreement or the Other Documents which requires any consent, approval,
recording, qualification or authorization of any Governmental Body, Borrower
will execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
Brascan may be required to obtain from Borrower for such consent, approval,
recording, qualification or authorization.
VI. NEGATIVE
COVENANTS.
Borrower
shall not, until satisfaction in full of the Obligations and termination of
this
Agreement:
6.1 Prohibition
on Fundamental Changes. Enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation, winding up or dissolution) or sell all or substantially
all of its assets; provided, however, that Borrower may merge or
consolidate with (x) any wholly owned Subsidiary, or (y) any other
Person if Borrower is the surviving corporation; and provided,
further, that, if after giving effect thereto, no Event of Default
would
exist hereunder.
6.2 Dividends. Declare,
pay or make any dividend or distribution on or in respect of any Equity
Interests of Borrower (other than dividends or distributions payable in its
stock, or split-ups or reclassifications of its stock) or apply any of its
funds, property or assets to the purchase, redemption or other retirement of
any
Equity Interests of Borrower if a Default or Event of Default shall have
occurred and be continuing, provided, however, that after the
occurrence and during the continuation of a Default or Event of Default,
Borrower shall be permitted to make such declaration or payment necessary to
maintain its status as a real estate investment trust under Sections 856-860
of
the Code.
6.3 Limitation
on Liens. Create, incur, assume or suffer to exist any Lien upon
any Collateral, whether now owned or hereafter acquired, except for Liens
created pursuant to the Security Documents.
6.4 Nature
of Business. Substantially change the nature of the business in
which it is presently engaged, nor except as specifically permitted hereby
purchase or invest, directly or indirectly, in any assets or property other
than
in the Ordinary Course of Business for assets or property which are useful
in,
necessary for and are to be used in its business as presently
conducted.
6.5 Transactions
with Affiliates. Directly or indirectly, purchase, acquire or
lease any property from, or sell, transfer or lease any property to, or
otherwise enter into any transaction or deal with, any Affiliate, except to
the
extent any of the foregoing are in the Ordinary Course of Business and on an
arm’s-length basis on terms and conditions no less favorable than terms and
conditions which would have been obtainable from a Person other than an
Affiliate.
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6.6 Fiscal
Year and Accounting Changes. Without Brascan’s prior written
consent, change its fiscal year from a year ending on December 31, or
make any change (i) in accounting treatment and reporting practices except
as required by GAAP or by law, or, as permitted by GAAP or (ii) in tax
reporting treatment except as required by, or permitted by,
law. Borrower shall give Brascan at least fifteen (15) days prior
written notice of any such requested change, which notice shall include a
detailed explanation of the changes intended to be made and pro forma financial
statements demonstrating the impact thereof.
6.7 Amendment
of Articles of Incorporation, By-Laws. Amend, modify or waive in
any manner that would be reasonably likely to adversely affect the Borrower
or
any material term or material provision of its Articles of Incorporation,
by-laws or any other organizational document, unless required by
law.
6.8 Compliance
with ERISA. (i) (x) Maintain, or permit any member of the
Controlled Group to maintain, or (y) become obligated to contribute, or permit
any member of the Controlled Group to become obligated to contribute, to any
Plan, other than those Plans disclosed on Schedule 4.8(d), (ii) engage, or
permit any member of the Controlled Group to engage, in any non-exempt
“prohibited transaction”, as that term is defined in section 406 of ERISA and
Section 4975 of the Code, (iii) incur, or permit any member of the Controlled
Group to incur, any “accumulated funding deficiency”, as that term is defined in
Section 302 of ERISA or Section 412 of the Code, (iv) terminate, or permit
any
member of the Controlled Group to terminate, any Plan where such event could
result in any liability of Borrower or any member of the Controlled Group or the
imposition of a lien on the property of Borrower or any member of the Controlled
Group pursuant to Section 4068 of ERISA, (v) assume, or permit any member of
the
Controlled Group to assume, any obligation to contribute to any Multiemployer
Plan not disclosed on Schedule 4.8(d), (vi) incur, or permit any member of
the
Controlled Group to incur, any withdrawal liability to any Multiemployer Plan;
(vii) fail promptly to notify Brascan of the occurrence of any Termination
Event, (viii) fail to comply, or permit a member of the Controlled Group to
fail to comply, with the requirements of ERISA or the Code or other Applicable
Laws in respect of any Plan, (ix) fail to meet, or permit any member of the
Controlled Group to fail to meet, all minimum funding requirements under ERISA
or the Code or postpone or delay or allow any member of the Controlled Group
to
postpone or delay any funding requirement with respect of any Plan.
6.9 Anti-Terrorism
Laws. For itself and any Affiliate or Brascan:
(a) Conduct
any business or engage in any transaction or dealing with any Blocked Person,
including the making or receiving any contribution of funds, goods or services
to or for the benefit of any Blocked Person.
(b) Deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order No.
13224.
(c) Engage
in or conspire to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in the Executive Order No. 13224, the USA PATRIOT Act or any other
Anti-Terrorism Law.
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Borrower
shall deliver to Brascan any certification or other evidence requested from
time
to time by Brascan in its sole discretion, confirming Borrower’s compliance with
this Section.
6.10 Trading
with the Enemy Act. Engage in any business or activity in
violation of the Trading with the Enemy Act.
6.11 Limitation
on Disposition of Collateral. Sell, lease, assign, convey,
transfer or otherwise dispose of any Collateral, whether now owned or hereafter
acquired, unless the proceeds of such sale, lease, assignment, conveyance,
transfer or other disposition (net of taxes payable and expenses incurred in
connection with such lease, assignment, conveyance, transfer or other
disposition) is in an amount that is at least equal to the principal amount
of
the Advances then outstanding and such net proceeds are either (i) pledged
to
Brascan as collateral for such Advances pursuant to such documents as Brascan
reasonably requests or (ii) paid to Brascan to be applied to the payment in
full
of such Advances and all accrued and unpaid interest on such
Advances.
6.12 Limitation
on Negative Pledge Clauses. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of Borrower
to create, incur, assume or suffer to exist any Lien upon the Collateral,
whether now owned or hereafter acquired, to secure the Obligations, other than
this Agreement, the Other Documents and restrictions imposed by applicable
law,
rule or regulation.
VII. CONDITIONS
PRECEDENT.
7.1 Conditions
to Initial Advances. The agreement of Brascan to make the initial
Advances requested to be made is subject to the satisfaction, or waiver by
Brascan, immediately prior to or concurrently with the making of such Advances,
of the following conditions precedent:
(a) Execution
and Delivery of Closing Documents. Brascan shall have received
each of this Agreement, the Revolving Credit Note, and each Other Document
to
which Borrower is a party, duly executed and delivered by an authorized officer
of Borrower;
(b) Corporate
Proceedings of Borrower. Brascan shall have received a copy of
the resolutions in form and substance reasonably satisfactory to Brascan, of
the
Board of Directors of Borrower authorizing (i) the execution, delivery and
performance of this Agreement, the Revolving Credit Note and any related
agreements, certified by the Secretary or an Assistant Secretary of Borrower
as
of the Closing Date; and, such certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded as
of
the date of such certificate;
(c) Incumbency
Certificates of Borrower. Brascan shall have received a
certificate of the Secretary or an Assistant Secretary of Borrower, dated the
Closing Date, as to the incumbency and Brascan of the officers of Borrower
executing this Agreement, the Other Documents, any certificate or other
documents to be delivered by it pursuant hereto, together with evidence of
the
incumbency of such Secretary or Assistant Secretary;
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(d) Certificates. Brascan
shall have received a copy of the Articles or Certificate of Incorporation
of
Borrower and all amendments thereto, certified by the Secretary of State or
other appropriate official of its jurisdiction of incorporation, together with
copies of the by-Laws of Borrower and all agreements of Borrower’s shareholders,
certified as accurate and complete by the Secretary of Borrower;
(e) Good
Standing Certificates. Brascan shall have received good standing
certificates for Borrower dated not more than twenty (20) days prior to the
Closing Date, issued by the Secretary of State or other appropriate official
of
Borrower’s jurisdiction of incorporation and each jurisdiction where the conduct
of Borrower’s business activities or the ownership of its properties
necessitates qualification;
(f) No
Litigation. (i) No litigation, investigation or proceeding before
or by any arbitrator or Governmental Body shall be continuing or threatened
against Borrower or against the officers or directors of Borrower (A) in
connection with this Agreement, the Revolving Credit Note, the Other Documents
or any of the transactions contemplated thereby and which, in the reasonable
opinion of Brascan, is deemed material or (B) which could, in the reasonable
opinion of Brascan, have a Material Adverse Effect; and (ii) no injunction,
writ, restraining order or other order of any nature materially adverse to
Borrower or the conduct of its business or inconsistent with the due
consummation of the Transactions shall have been issued by any Governmental
Body;
(g) No
Adverse Material Change. (i) Since September 30, 2007, there
shall not have occurred any event, condition or state of facts which could
reasonably be expected to have a Material Adverse Effect and (ii) no
representations made or information supplied to Brascan shall have been proven
to be inaccurate or misleading in any material respect;
(h) Other
Documents. Brascan shall have received the executed Other
Documents, all in form and substance reasonably satisfactory to
Brascan;
(i) Closing
Certificate. Brascan shall have received a closing certificate
signed by the Chief Financial Officer of Borrower dated as of the date hereof,
stating that (i) all representations and warranties set forth in this Agreement
and the Other Documents are true and correct on and as of such date, (ii)
Borrower is on such date in compliance with all the terms and provisions set
forth in this Agreement and the Other Documents and (iii) on such date no
Default or Event of Default has occurred or is continuing;
(j) Compliance
with Applicable Laws. Brascan shall be reasonably satisfied that
Borrower is in compliance with all pertinent Federal, state, local or
territorial regulations applicable to Borrower, including those with respect
to
the Federal Occupational Safety and Health Act, the Environmental Protection
Act, ERISA and the Trading with the Enemy Act; and
(k) Other. All
corporate and other proceedings, and all documents, instruments and other legal
matters in connection with the Transactions shall be reasonably satisfactory
in
form and substance to Brascan and its counsel.
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7.2 Conditions
to Each Advance. The agreement of Brascan to make any Advance
requested to be made on any Borrowing Date, is subject to the satisfaction
of
the following conditions precedent as of the date such Advance is
made:
(a) Representations
and Warranties. Each of the representations and warranties made
by Borrower in or pursuant to this Agreement, the Other Documents and any
related agreements to which it is a party, and each of the representations
and
warranties contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this Agreement,
the
Other Documents or any related agreement shall be true and correct in all
material respects on and as of such date as if made on and as of such
date;
(b) No
Default. No Event of Default or Default shall have occurred and
be continuing on such date, or would exist after giving effect to the Advance
requested to be made, on such date; provided, however that Brascan, in its
sole
discretion, may continue to make Advances notwithstanding the existence of
an
Event of Default or Default and that any Advance so made shall not be deemed
a
waiver of any such Event of Default or Default; and
(c) Maximum
Advances. In the case of any Advance requested to be made, after
giving effect thereto, the aggregate amount of such Advance shall not exceed
the
Maximum Advance Amount.
(d) Collateral. Brascan
shall have received a duly executed Security Document with respect to Collateral
that it has determined, in its sole discretion, to sufficiently collateralize
the Advance being made by it. with such Collateral being pledged to
secure all of the Obligations together with each document (including, without
limitation, any UCC financing statement) required by the Security Documents
or
under law or reasonably requested by the Agent to be filed, registered or
recorded in order to create in favor of Agent, for the benefit of Lenders,
a
perfected Lien on the Collateral described therein, prior and superior in right
to any other Person, shall have been filed, registered or recorded or shall
have
been delivered to Agent in proper form for filing, registration or
recordation.
Each
request for an Advance by Borrower hereunder shall constitute a representation
and warranty by Borrower as of the date of such Advance that the conditions
contained in this subsection shall have been satisfied.
VIII. INFORMATION
AS TO BORROWER.
Borrower
shall, until satisfaction in full of the Obligations and the termination of
this
Agreement:
8.1 Intentionally
Omitted.
8.2 Litigation. Promptly
notify Brascan in writing, by facsimile, or by email of any claim, litigation,
suit or administrative proceeding affecting Borrower, whether or not the claim
is covered by insurance, and of any litigation, suit or administrative
proceeding, which could reasonably be expected to have a Material Adverse
Effect.
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8.3 Material
Occurrences. Promptly notify Brascan in writing upon the
occurrence of (a) any Event of Default or Default; (b) any event, development
or
circumstance whereby any financial statements or other reports furnished to
Brascan fail in any material respect to present fairly, in accordance with
GAAP
consistently applied, the financial condition or operating results of Borrower
as of the date of such statements; (c) any accumulated retirement plan funding
deficiency which, if such deficiency continued for two plan years and was not
corrected as provided in Section 4971 of the Code, could subject Borrower to
a
tax imposed by Section 4971 of the Code; (d) each and every default by Borrower
which permits the holders of any Indebtedness of Borrower the outstanding
principal amount of which exceeds $500,000, to accelerate maturity of such
Indebtedness, including the names and addresses of the holders of such
Indebtedness, and the amount of such Indebtedness; and (e) any other development
in the business or affairs of Borrower, which could reasonably be expected
to
have a Material Adverse Effect; in each case describing the nature thereof
and
the action Borrower proposes to take with respect thereto.
8.4 Annual
Financial Statements. Furnish Brascan within ninety (90) days
after the end of each fiscal year of Borrower, financial statements of Borrower,
including, but not limited to, statements of income and stockholders’ equity and
cash flow from the beginning of the current fiscal year to the end of such
fiscal year and the balance sheet as at the end of such fiscal year, all
prepared in accordance with GAAP applied on a basis consistent with prior
practices, and in reasonable detail and reported upon without qualification
by
an independent certified public accounting firm selected by Borrower and
satisfactory to Brascan. In addition, the reports shall be
accompanied by a Compliance Certificate.
8.5 Quarterly
Financial Statements. Furnish Brascan within forty-five (45) days
after the end of each fiscal quarter, an unaudited balance sheet of Borrower
and
unaudited statements of income and stockholders’ equity and cash flow of
Borrower reflecting results of operations from the beginning of the fiscal
year
to the end of such quarter and for such quarter, prepared on a basis consistent
with prior practices and complete and correct in all material respects, subject
to normal and recurring year end adjustments that individually and in the
aggregate are not material to Borrower’s business. The reports shall
be accompanied by a Compliance Certificate.
Notwithstanding
the foregoing, the obligations in Section 8.4 and 8.5 may be satisfied with
respect to financial information of the Company by filing the Company’s Form
10-K or 10-Q, as applicable, with the Securities and Exchange
Commission.
8.6 Other
Reports. Furnish Brascan as soon as available, but in any event
within ten (10) days after the issuance thereof, with copies of such financial
statements, shareholder reports and tax returns as Borrower shall send to its
stockholders or file with the SEC.
8.7 Additional
Information. Furnish Brascan with such additional information as
Brascan shall reasonably request in order to enable Brascan to determine whether
the terms, covenants, provisions and conditions of this Agreement and the
Revolving Credit Note have been complied with by Borrower including, without
the
necessity of any request by Brascan, (a) copies of all environmental audits
and
reviews, (b) at least thirty (30) days prior thereto, notice of Borrower’s
opening of any new office or place of business or Borrower’s closing of any
existing office or place of business, and (c) promptly upon Borrower’s learning
thereof, notice of any
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labor
dispute to which Borrower may become a party, any strikes or walkouts relating
to any of its plants or other facilities, and the expiration of any labor
contract to which Borrower is a party or by which Borrower is
bound.
8.8 Notice
of Suits, Adverse Events. Furnish Brascan with prompt written
notice of (i) any lapse or other termination of any Consent issued to Borrower
by any Governmental Body or any other Person that is material to the operation
of Borrower’s business, (ii) any refusal by any Governmental Body or any other
Person to renew or extend any such Consent; and (iii) copies of any periodic
or
special reports filed by Borrower with any Governmental Body or Person, if
such
reports indicate any material change in the business, operations, affairs or
condition of Borrower, or if copies thereof are requested by Brascan, and (iv)
copies of any material notices and other communications from any Governmental
Body or Person which specifically relate to Borrower.
8.9 ERISA
Notices and Requests. Furnish Brascan with prompt written notice
in the event that (i) Borrower or any member of the Controlled Group knows
or
has reason to know that a Termination Event has occurred, together with a
written statement describing such Termination Event and the action, if any,
which Borrower or any member of the Controlled Group has taken, is taking,
or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, Department of Labor or PBGC with
respect thereto, (ii) Borrower or any member of the Controlled Group knows
or
has reason to know that a prohibited transaction (as defined in Sections 406
of
ERISA and 4975 of the Code) has occurred together with a written statement
describing such transaction and the action which Borrower or any member of
the
Controlled Group has taken, is taking or proposes to take with respect thereto,
(iii) a funding waiver request has been filed with respect to any Plan together
with all communications received by Borrower or any member of the Controlled
Group with respect to such request, (iv) any increase in the benefits of any
existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which Borrower or any member of the Controlled
Group was not previously contributing shall occur, (v) Borrower or any member
of
the Controlled Group shall receive from the PBGC a notice of intention to
terminate a Plan or to have a trustee appointed to administer a Plan, together
with copies of each such notice, (vi) Borrower or any member of the Controlled
Group shall receive any favorable or unfavorable determination letter from
the
Internal Revenue Service regarding the qualification of a Plan under
Section 401(a) of the Code, together with copies of each such letter, (vii)
Borrower or any member of the Controlled Group shall receive a notice regarding
the imposition of withdrawal liability, together with copies of each such
notice, (viii) Borrower or any member of the Controlled Group shall fail to
make
a required installment or any other required payment under Section 412 of the
Code on or before the due date for such installment or payment, (ix) Borrower
or
any member of the Controlled Group knows that (a) a Multiemployer Plan has
been
terminated, (b) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or
shall institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan.
8.10 Additional
Documents. Execute and deliver to Brascan, upon request, such
documents and agreements as Brascan may, from time to time, reasonably request
in writing to carry out the purposes, terms or conditions of this
Agreement.
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IX. EVENTS
OF DEFAULT.
The
occurrence of any one or more of the following events shall constitute an “Event
of Default”:
9.1 Nonpayment. Failure
by Borrower to pay any principal or, subject to a three (3) day grace period,
interest on the Obligations when due, whether at maturity or by reason of
acceleration pursuant to the terms of this Agreement or by notice of intention
to prepay, or by required prepayment or failure to pay any other liabilities
or,
subject to a three (3) day grace period, make any other payment, fee
or charge provided for herein when due or in any Other Document in accordance
with its terms.
9.2 Breach
of Representation. Any representation or warranty made or deemed
made by Borrower in this Agreement, any Other Document or any related agreement
or in any certificate, document or financial or other statement furnished at
any
time in connection herewith or therewith shall prove to have been misleading
in
any material respect on the date when made or deemed to have been made;
9.3 Financial
Information. Failure by Borrower to (i) furnish financial
information when due or when requested in accordance herewith, or (ii) permit
the inspection of its books or records to the extent required hereunder;
9.4 Judicial
Actions. Except with respect to Permitted Encumbrances, the
issuance of a notice of Lien, levy, assessment, injunction or attachment against
a material portion of Borrower’s property which is not stayed or lifted within
thirty (30) days;
9.5 Noncompliance. Failure
or neglect of Borrower to (i) except as provided in (ii) below, perform, keep
or
observe any term, provision, condition, covenant herein contained, or contained
in this Agreement or any Other Document, and (ii) perform, keep or observe
any
term, provision, condition or covenant, contained in Sections 5.3 or 8.1 hereof,
in each case, which failure or neglect is not cured within ten (10) days from
the earlier of (x) Borrower’s knowledge of such failure or neglect, and (y)
receipt by Borrower of written notice thereof from Brascan; provided,
however, that Borrower’s failure to comply with Section 5.4(b) shall not
constitute an Event of Default unless such failure shall have occurred for
two
consecutive fiscal quarters of Borrower.
9.6 Judgments. Any
judgment or judgments are rendered or judgment liens filed against Borrower,
singly, or in an aggregate amount, in excess of $500,000, except to the extent
that either (i) within thirty (30) days of such rendering or filing, each
such judgment is either satisfied, stayed, bonded or discharged of record or
(ii) Borrower is contesting each such judgment in good faith and establishes
reserves satisfactory to Brascan and enforcement of each such judgment or liens
are continuously stayed;
9.7 Bankruptcy
of Borrower. Borrower shall (i) apply for, consent to or suffer
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, liquidator or similar fiduciary of itself or of all or a substantial
part of its property, (ii) make a general assignment for the benefit of
creditors, (iii) commence a voluntary case under any state or Federal bankruptcy
laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or
insolvent, (v) file a petition
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seeking
to take advantage of any other law providing for the relief of debtors, (vi)
acquiesce to, or fail to have dismissed, within sixty (60) days, any petition
filed against it in any involuntary case under such bankruptcy laws, or (vii)
take any action for the purpose of effecting any of the foregoing;
9.8 Inability
to Pay. Borrower shall admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of
its
present business;
9.9 Cross
Default. A default of the obligations of Borrower under any other
agreement to which it is a party shall occur and such default is not cured
within any applicable grace period and could reasonably be expected to have
a
Material Adverse Effect;
9.10 Change
of Control. Any Change of Control shall occur;
9.11 Invalidity. Any
material provision of this Agreement or any Other Document shall, for any
reason, cease to be valid and binding on Borrower, or Borrower shall so claim
in
writing to Brascan;
9.12 Licenses. (i)
Any Governmental Body shall (A) revoke, terminate, suspend or adversely modify
any license or permit of Borrower, the continuation of which is material to
the
continuation of Borrower’s business, or (B) commence proceedings to suspend,
revoke, terminate or adversely modify any such material license or permit and
such proceedings shall not be dismissed or discharged within sixty (60) days,
or
(c) schedule or conduct a hearing on the renewal of any material license or
material permit necessary for the continuation of Borrower’s business and the
staff of such Governmental Body issues a report recommending the termination,
revocation, suspension or material, adverse modification of such material
license or material permit; (ii) any agreement which is necessary or material
to
the operation of Borrower’s business shall be revoked or terminated and not
replaced by a substitute acceptable to Brascan within thirty (30) days after
the
date of such revocation or termination, and such revocation or termination
and
non-replacement would reasonably be expected to have a Material Adverse
Effect;
9.13 Pension
Plans. An event or condition specified in Sections 6.10 or 8.9
hereof shall occur or exist with respect to any Plan and, as a result of such
event or condition, together with all other such events or conditions, Borrower
or any member of the Controlled Group shall incur, or in the opinion of Brascan
be reasonably likely to incur, a liability to a Plan or the PBGC (or both)
which, in the reasonable judgment of Brascan, would have a Material Adverse
Effect.
9.14 Security
Documents. Any of the Security Documents shall cease, for any reason
(other than pursuant to the terms hereof or thereof), to be in full force and
effect, or Borrower shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and priority
purported to be created thereby except to the extent that any such loss of
perfection or priority results from the failure of Brascan to maintain
possession of any instruments pledged under the Security Documents that were
actually delivered to it.
X. BRASCAN’S
RIGHTS AND REMEDIES AFTER DEFAULT.
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10.1 Rights
and Remedies. Upon the occurrence of (i) an Event of Default
pursuant to Section 9.7 all Obligations shall be immediately due and payable
and
this Agreement and the obligation of Brascan to make Advances shall be deemed
terminated (other than as may be required by an appropriate order of the
bankruptcy court having jurisdiction over Borrower); and (ii) any of the other
Events of Default and at any time thereafter (such default not having previously
been cured), at the option of Brascan all Obligations shall be immediately
due
and payable and Brascan shall have the right to terminate this Agreement and
to
terminate the obligation of Brascan to make Advances. Upon the
occurrence and during the continuation of any Event of Default, Brascan shall
have the right to exercise any and all rights and remedies provided for herein,
under the Other Documents and at law or equity
generally.
10.2 Brascan’s
Discretion. Brascan shall have the right in its sole discretion
to determine which rights or remedies Brascan may at any time pursue,
relinquish, subordinate, or modify or to take any other action with respect
thereto and such determination shall not in any way modify or affect any of
Brascan’s rights hereunder.
10.3 Rights
and Remedies not Exclusive. The foregoing rights and remedies are
not intended to be exhaustive and the exercise of any rights or remedy shall
not
preclude the exercise of any other right or remedies provided for herein or
otherwise provided by law, all of which shall be cumulative and not
alternative.
10.4 Allocation
of Payments After Event of Default. Notwithstanding any other
provisions of this Agreement to the contrary, after the occurrence and during
the continuance of an Event of Default, all amounts collected or received by
Brascan on account of the Obligations or any other amounts outstanding under
any
of the Other Documents may, at Brascan’s discretion, be paid over or delivered
as follows:
FIRST,
to
the payment of all reasonable out-of-pocket costs and expenses (including
reasonable attorneys’ fees) of Brascan in connection with enforcing its rights
and the rights of Brascan under this Agreement and the Other
Documents;
SECOND,
to the payment of any fees owed to Brascan under this Agreement or any Other
Document;
THIRD,
to
the payment of all reasonable out-of-pocket costs and expenses (including
reasonable attorneys’ fees) of Brascan in connection with enforcing its rights
under this Agreement and the Other Documents or otherwise with respect to the
Obligations owing to Brascan;
FOURTH,
to the payment of all of the Obligations consisting of accrued fees and
interest;
FIFTH,
to
the payment of the outstanding principal amount of the Obligations;
SIXTH,
to
all other Obligations and other obligations which shall have become due and
payable under the Other Documents or otherwise and not repaid pursuant to
clauses “FIRST” through “FIFTH” above; and
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SEVENTH,
to the payment of the surplus, if any, to whoever may be lawfully entitled
to
receive such surplus.
In
carrying out the foregoing, amounts received shall be applied in the numerical
order provided until exhausted prior to application to the next succeeding
category.
XI. WAIVERS
AND JUDICIAL PROCEEDINGS.
11.1 Waiver
of Notice. Borrower hereby waives notice of demand, presentment,
protest and notice thereof with respect to any and all instruments, notice
of
acceptance hereof, notice of loans or advances made, credit extended, or any
other action taken in reliance hereon, and all other demands and notices of
any
description, except such as are expressly provided for herein.
11.2 Delay. No
delay or omission on Brascan’s part in exercising any right, remedy or option
shall operate as a waiver of such or any other right, remedy or option or of
any
Default or Event of Default.
11.3 Jury
Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF
THE
CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
XII. EFFECTIVE
DATE AND TERMINATION.
12.1 Term. This
Agreement, which shall inure to the benefit of and shall be binding upon the
respective successors and permitted assigns of Borrower and Brascan, shall
become effective on the date hereof and shall continue in full force and effect
until the first anniversary of the Closing Date (the “Term”) unless
sooner terminated as herein provided.
12.2 Termination. The
termination of the Agreement shall not affect Borrower’s rights, Brascan’s
rights, or any of the Obligations having their inception prior to the effective
date of such termination, and the provisions hereof shall continue to be fully
operative until all transactions entered into, rights or interests created
or
Obligations have been fully and indefeasibly paid, disposed of, concluded or
liquidated. The rights granted to Brascan hereunder shall continue in
full force and effect, notwithstanding the termination of this Agreement or
the
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fact
that
Borrower’s Account may from time to time be temporarily in a zero or credit
position, until all of the Obligations of Borrower have been indefeasibly paid
and performed in full after the termination of this Agreement or Borrower has
furnished Brascan with an indemnification reasonably satisfactory to Brascan
with respect thereto. All representations, warranties, covenants,
waivers and agreements contained herein shall survive termination hereof until
all Obligations are indefeasibly paid and performed in full.
XIII. MISCELLANEOUS.
13.1 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applied to contracts to be
performed wholly within the State of New York. Any judicial
proceeding brought by or against Borrower or Brascan with respect to any of
the
Obligations, this Agreement, the Other Documents or any related agreement may
be
brought in any court of competent jurisdiction in the State of New York, United
States of America, and, by execution and delivery of this Agreement, Borrower
or
Brascan accepts for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts, and irrevocably agrees to be bound by any judgment rendered thereby
in
connection with this Agreement. Each of Borrower and Brascan hereby
waives personal service of any and all process upon it and consents that all
such service of process may be made by registered mail (return receipt
requested) directed to Borrower and Brascan, as applicable, at its address
set
forth in Section 13.6 and service so made shall be deemed completed five (5)
days after the same shall have been so deposited in the mails of the United
States of America. Nothing herein shall affect the right to serve process in
any
manner permitted by law or shall limit the right of Borrower and Brascan to
bring proceedings against any other party hereto in the courts of any other
jurisdiction. Each of Borrower and Brascan waives any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non
conveniens. Any judicial proceeding by Borrower against Brascan
involving, directly or indirectly, any matter or claim in any way arising out
of, related to or connected with this Agreement or any related agreement, shall
be brought only in a Federal or state court located in the County of New York,
State of New York.
13.2 Entire
Understanding. a) This Agreement and the documents
executed concurrently herewith contain the entire understanding between Borrower
and Brascan and supersede all prior agreements and understandings, if any,
relating to the subject matter hereof. Any promises, representations,
warranties or guarantees not herein contained and hereinafter made shall have
no
force and effect unless in writing, signed by Borrower’s and Brascan’s
respective officers. Neither this Agreement nor any portion or
provisions hereof may be changed, modified, amended, waived, supplemented,
discharged, cancelled or terminated orally or by any course of dealing, or
in
any manner other than by an agreement in writing, signed by Borrower and
Brascan. Borrower acknowledges that it has been advised by counsel in
connection with the execution of this Agreement and Other Documents and is
not
relying upon oral representations or statements inconsistent with the terms
and
provisions of this Agreement.
13.3 Successors
and Assigns This Agreement shall be binding upon and inure to the
benefit of Borrower, Brascan, all future holders of the Obligations and their
respective
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successors
and assigns, except that Borrower may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of
Brascan.
13.4 Application
of Payments. To the extent that Borrower makes a payment or
Brascan receives any payment for Borrower’s benefit, which are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to
be repaid to a trustee, debtor in possession, receiver, custodian or any other
party under any bankruptcy law, common law or equitable cause, then, to such
extent, the Obligations or part thereof intended to be satisfied shall be
revived and continue as if such payment or proceeds had not been received by
Brascan.
13.5 Indemnity. Borrower
shall indemnify Brascan, and each of its officers, directors, Affiliates,
attorneys, employees and agents from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever (including fees
and
disbursements of counsel) which may be imposed on, incurred by, or asserted
against Brascan in any claim, litigation, proceeding or investigation instituted
or conducted by any Governmental Body or instrumentality or any other Person
with respect to any aspect of, or any transaction contemplated by, or referred
to in, or any matter related to, this Agreement or the Other Documents, whether
or not Brascan is a party thereto, except to the extent that any of the
foregoing arises out of the willful misconduct or gross negligence of the party
being indemnified (as determined by a court of competent jurisdiction in a
final
and non-appealable judgment). Without limiting the generality of the
foregoing, this indemnity shall extend to any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and disbursements
of any kind or nature whatsoever (including fees and disbursements of counsel)
asserted against or incurred by any of the indemnitees described above in this
Section 13.5 by any Person under any Environmental Laws or
similar laws by reason of Borrower’s or any other Person’s failure to comply
with laws applicable to solid or hazardous waste materials, including Hazardous
Substances and Hazardous Waste, or other Toxic
Substances. Additionally, if any taxes (excluding taxes imposed upon
or measured solely by the net income of Brascan, but including any intangibles
taxes, stamp tax, recording tax or franchise tax) shall be payable by Brascan
on
account of the execution or delivery of this Agreement, or the execution,
delivery, issuance or recording of any of the Other Documents, or the creation
or repayment of any of the Obligations hereunder, by reason of any Applicable
Law now or hereafter in effect, Borrower shall pay (or shall promptly reimburse
Brascan for payment of) to the extent not otherwise required to be paid pursuant
to the terms of this Agreement, all such taxes, including interest and penalties
thereon, and shall indemnify and hold the indemnitees described above in this
Section 13.5 harmless from and against all liability in connection
therewith.
13.6 Notice. Any
notice or request hereunder may be given to Borrower or to Brascan at their
respective addresses set forth below or at such other address as may hereafter
be specified in a notice designated as a notice of change of address under
this
Section. Any notice, request, demand, direction or other
communication (for purposes of this Section 13.6 only, a “Notice”) to be
given to or made upon any party hereto under any provision of this Agreement
shall be given or made by telephone or in writing (which includes by means
of
electronic transmission (i.e., “e-mail”) or facsimile transmission in accordance
with this Section 13.6. Any such Notice must be delivered to the
applicable parties hereto at the addresses and numbers set forth under their
respective names on Section 13.6 hereof or in accordance with any
subsequent
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unrevoked
Notice from any such party that is given in accordance with this Section
13.6. Any Notice shall be effective:
(a) In
the case of hand-delivery, when delivered;
(b) If
given by mail, four days after such Notice is deposited with the United States
Postal Service, with first-class postage prepaid, return receipt
requested;
(c) In
the case of a telephonic Notice, when a party is contacted by telephone, if
delivery of such telephonic Notice is confirmed no later than the next Business
Day by hand delivery, a facsimile or electronic transmission, a Website Posting
or an overnight courier delivery of a confirmatory Notice (received at or before
noon on such next Business Day);
(d) In
the case of a facsimile transmission, when sent to the applicable party’s
facsimile machine’s telephone number, if the party sending such Notice receives
confirmation of the delivery thereof from its own facsimile
machine;
(e) In
the case of electronic transmission, when actually received; and
(f) If
given by any other means (including by overnight courier), when actually
received.
If
to Brascan at:
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Brascan
(U.S.) Corp.
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Three
World Financial Center
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▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 10
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New
York, New York 10281-1010
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Attention: ▇▇▇▇▇
▇▇▇▇▇▇
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Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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with
a copy to:
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Brookfield
Asset Management Inc.
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Brookfield
Place
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▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
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Attention:
▇▇▇▇ ▇▇▇▇▇
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Telephone: (▇▇▇)
▇▇▇.▇▇▇▇
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Facsimile: (▇▇▇)
▇▇▇.▇▇▇▇
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and
a copy to:
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Torys LLP
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▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇
▇▇▇▇
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▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
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Attention: ▇▇▇▇▇
▇▇▇▇▇, Partner
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Telephone: (▇▇▇)
▇▇▇.▇▇▇▇
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Facsimile: (▇▇▇)
▇▇▇.▇▇▇▇
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If
to Borrower:
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c/o
Hyperion Brookfield Asset Management,
Inc.
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Three
World Financial Center
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-34-
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200
▇▇▇▇▇ Street, Floor 10
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New
York, New York 10281-1010
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Attention: General
Counsel
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Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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with a copy to:
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Paul,
Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
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▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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13.7 Survival. The
obligations of Borrower under Sections 2.2(c), 3.4, 13.5 and 13.7 shall survive
termination of this Agreement and the Other Documents and payment in full of
the
Obligations.
13.8 Severability. If
any part of this Agreement is contrary to, prohibited by, or deemed invalid
under Applicable Laws or regulations, such provision shall be inapplicable
and
deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given effect
so
far as possible.
13.9 Expenses. All
costs and expenses including reasonable attorneys’ fees (including the allocated
costs of in house counsel) and disbursements incurred by Brascan on its
behalf (a) in connection with the preparation, negotiation and
execution and delivery of this Agreement and the Other Documents, or (b) in
all
efforts made to enforce payment of any Obligation, or (c) in connection with
the
entering into, modification, amendment, administration and enforcement of this
Agreement or any consents or waivers hereunder or thereunder and all related
agreements, documents and instruments, or (d) maintaining, preserving or
enforcing any of Brascan’s rights hereunder and under all related agreements,
documents and instruments, whether through judicial proceedings or otherwise,
or
(e) in defending or prosecuting any actions or proceedings arising out of or
relating to Brascan’s transactions with Borrower, or (f) in connection with any
advice given to Brascan with respect to its rights and obligations under this
Agreement and the Other Documents, may be charged to Borrower’s Account and
shall be part of the Obligations.
13.10 Injunctive
Relief. Borrower recognizes that, in the event Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, or threatens to fail to perform, observe or discharge such
obligations or liabilities, any remedy at law may prove to be inadequate relief
to Brascan; therefore, Brascan, if it so requests, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving that actual damages are not an adequate remedy.
13.11 Damages. Neither
Borrower, Brascan nor any attorney for it, shall be liable to the other parties
hereto (or any Affiliate of any such Person) for indirect, punitive, exemplary
or consequential damages arising from any breach of contract, tort or other
wrong relating to the
-35-
establishment,
administration or collection of the Obligations or as a result of any
transaction contemplated under this Agreement or any Other
Document.
13.12 Captions. The
captions at various places in this Agreement are intended for convenience only
and do not constitute and shall not be interpreted as part of this
Agreement.
13.13 Counterparts;
Facsimile. This Agreement may be executed in any number of and by
different parties hereto on separate counterparts, all of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement. Any copy delivered by a party
by facsimile transmission shall be deemed to be an original copy
hereto.
13.14 Construction. Each
party and its respective counsel have reviewed this Agreement and the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments, schedules or exhibits thereto.
13.15 Sharing
Information.
(a) From
time to time financial advisory, investment banking and other services may
be
offered or provided to Borrower or one or more of its Affiliates (in connection
with this Agreement or otherwise) by Brascan or by one or more Subsidiaries
or
Affiliates of Brascan.
(b) Notwithstanding
anything herein to the contrary, the information subject to this Section 13.15
shall not include, and Brascan may disclose without limitation of any kind,
any
information with respect to the “tax treatment” and “tax structure” (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to Brascan relating to such
tax treatment and tax structure; provided that with respect to any
document or similar item that in either case contains information concerning
the
tax treatment or tax structure of the transaction as well as other information,
this sentence shall only apply to such portions of the document or similar
item
that relate to the tax treatment or tax structure of the Advances and
transactions contemplated hereby.
13.16 Publicity. Brascan
or any of its affiliates is hereby authorized to make appropriate announcements
of the financial arrangement entered into among Borrower and Brascan in such
publications and to such selected parties as Brascan shall in its sole and
absolute discretion deem appropriate.
13.17 Confidentiality. Brascan
agrees to keep confidential all non-public information provided to it by the
Borrower pursuant to this Agreement; provided that nothing herein shall prevent
Brascan from disclosing any such information (a) to any of its employees,
directors, agents, attorneys, accountants and other professional advisors,
(b)
upon the request or demand of any Governmental Body having jurisdiction over
it,
(c) in response to any order of any court or other Governmental Body or as
may
otherwise be required pursuant to any Applicable Law, (d) in connection with
any
litigation or similar proceeding or (e) in connection with the exercise of
any
remedy hereunder or under any Other Document.
-36-
BRASCAN
ACKNOWLEDGES THAT INFORMATION FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY
INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE COMPANY AND ITS
AFFILIATES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED
COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION
AND
THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES
LAWS.
13.18 Certifications
From Banks and Participants; US Patriot Act. Brascan or any
assignee of it that is not incorporated under the Laws of the United States
of
America or a state thereof (and is not excepted from the certification
requirement contained in Section 313 of the USA Patriot Act and the applicable
regulations because it is both (i) an affiliate of a depository
institution or foreign bank that maintains a physical presence in the
United States or foreign country, and (ii) subject to supervision by a banking
authority regulating such affiliated depository institution or foreign bank)
shall deliver to Brascan the certification, or, if applicable, recertification,
certifying that Brascan is not a “shell” and certifying to other matters as
required by Section 313 of the USA Patriot Act and the applicable regulations:
(1) within 10 days after the Closing Date, and (2) as such other times as are
required under the USA Patriot Act.
-37-
Each
of
the parties has signed this Agreement as of the day and year first above
written.
| CRYSTAL RIVER CAPITAL, INC. | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇ | |
| Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇ | |||
| Title: President and CEO | |||
| BRASCAN (U.S.) CORPORATION | |||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| Title: President | |||