Exhibit 10.12
EXECUTION COPY
MDC PARTNERS INC.
as Borrower
and
THE TORONTO-DOMINION BANK
as Lead Arranger and Sole Bookrunner
and
THE INSTITUTIONS NAMED HEREIN AS LENDERS
as Lenders
and
THE TORONTO-DOMINION BANK
as Administration Agent
===============================================================================
CAD25,000,000
CREDIT AGREEMENT
===============================================================================
June 10, 2004
[FASKEN ▇▇▇▇▇▇▇▇▇ LOGO]
Table of Contents
Page
ARTICLE 1 INTERPRETATION.....................................................................1
1.1 General Definitions................................................................1
1.2 Extended Meanings.................................................................35
1.3 References to Agreements..........................................................37
1.4 References to Statutes............................................................37
1.5 References to Time................................................................37
1.6 Headings, etc.....................................................................37
1.7 Number and Gender.................................................................37
1.8 Accounting Principles.............................................................37
1.9 Rounding..........................................................................38
ARTICLE 2 THE REVOLVING FACILITY............................................................38
2.1 Establishment of Revolving Facility...............................................38
2.2 Facility Limit....................................................................38
2.3 Availability......................................................................38
2.4 Drawdown Requests.................................................................39
2.5 Proceeds of Drawdown..............................................................39
ARTICLE 3 THE SWING LINE....................................................................39
3.1 Establishment of Swing Line.......................................................39
3.2 Swing Line Amount.................................................................39
3.3 Overdraft Basis...................................................................39
3.4 Standby Instruments...............................................................40
ARTICLE 4 STANDBY INSTRUMENTS...............................................................40
4.1 Issuance of Standby Instruments...................................................40
4.2 Reimbursement by the Borrower.....................................................41
4.3 Issuing Bank Not Liable...........................................................42
4.4 Reimbursement Advance.............................................................43
4.5 Standby Instrument Fees...........................................................43
4.6 Reimbursement by Lenders..........................................................44
ARTICLE 5 BANKERS' ACCEPTANCES UNDER THE REVOLVING FACILITY.................................45
5.1 Notice and Term...................................................................45
5.2 Face Amount of Drafts.............................................................45
5.3 Power of Attorney.................................................................46
5.4 Restrictions......................................................................46
5.5 Discount and Sale of Acceptances..................................................46
5.6 Stamping Fee......................................................................47
5.7 Payment of Acceptances............................................................47
5.8 Waivers...........................................................................47
5.9 Notice of Maturing Acceptances....................................................47
5.10 BA Equivalent Advances............................................................47
5.11 Discount Notes....................................................................48
ARTICLE 6 CONVERSIONS AND ROLLOVERS.........................................................48
6.1 Conversions.......................................................................48
6.2 Rollovers.........................................................................49
6.3 Conversions to and Rollovers of Acceptances.......................................49
6.4 Not a Repayment...................................................................50
ARTICLE 7 INTEREST AND FEE CALCULATIONS AND CHANGES IN CIRCUMSTANCES........................50
7.1 Interest..........................................................................50
7.2 Fees in Respect of Acceptances....................................................51
7.3 Commitment Fee....................................................................51
7.4 Interest and Fee Calculations and Payments........................................51
7.5 Increased Costs...................................................................52
7.6 Market Disruption.................................................................54
7.7 Illegality........................................................................55
7.8 Withholding Taxes Generally.......................................................55
ARTICLE 8 REPAYMENT AND PREPAYMENT..........................................................57
8.1 Repayment of each Credit Facility.................................................57
8.2 Voluntary Reductions of each Credit Facility......................................57
8.3 Mandatory Reductions of each Credit Facility......................................57
8.4 Mandatory Repayments of Credit Facilities.........................................58
8.5 Facility Excesses by Reason of Foreign Currency Fluctuations......................59
8.6 Prepayment of Affected Lenders....................................................59
8.7 Voluntary Repayments before the Maturity Date.....................................60
8.8 Repayment Notice..................................................................60
8.9 Netting of Payments...............................................................60
8.10 Place of Payment of Principal, Interest and Fees..................................60
ARTICLE 9 CONDITIONS PRECEDENT TO BORROWING.................................................61
9.1 Conditions Precedent to First Drawdown............................................61
9.2 Conditions to all Drawdowns.......................................................62
9.3 Conditions to Conversions and Rollovers...........................................63
9.4 Waiver............................................................................63
ARTICLE 10 SECURITY..........................................................................63
10.1 Initial Security..................................................................63
10.2 Additional Security from Restricted Group Members.................................64
10.3 Registration......................................................................65
10.4 Further Assurances................................................................65
ARTICLE 11 LENDER HEDGING AFFILIATES.........................................................65
11.1 Designation of Lender Hedging Affiliates..........................................65
11.2 Adhesion..........................................................................65
11.3 Authorization of Lenders..........................................................65
ARTICLE 12 REPRESENTATIONS AND WARRANTIES....................................................66
12.1 Representations and Warranties....................................................66
12.2 Repetition of Representations and Warranties......................................74
12.3 Nature of Representations and Warranties..........................................74
ARTICLE 13 COVENANTS OF THE BORROWER.........................................................74
13.1 Affirmative Covenants.............................................................74
13.2 Negative Covenants................................................................80
13.3 Financial Covenants...............................................................86
ARTICLE 14 EVENTS OF DEFAULT.................................................................86
14.1 Events of Default.................................................................86
14.2 Termination and Acceleration......................................................89
14.3 Waiver............................................................................90
ARTICLE 15 THE AGENT AND ADMINISTRATION OF THE CREDIT FACILITIES.............................90
15.1 Appointment and Authorization.....................................................90
15.2 Declaration of Agency.............................................................90
15.3 Protection of Agent...............................................................90
15.4 Interest Holders..................................................................91
15.5 Consultation with Professionals...................................................91
15.6 Documents.........................................................................91
15.7 The Agent and its Subsidiaries and Affiliates.....................................91
15.8 Responsibility of the Agent.......................................................91
15.9 Action by the Agent...............................................................92
15.10 Notice of Events of Default.......................................................93
15.11 Responsibility Disclaimed.........................................................93
15.12 Indemnification...................................................................93
15.13 Protection of Representatives.....................................................94
15.14 Credit Decision...................................................................94
15.15 Replacement of Agent, Reference Lender and Swing Line Lender......................94
15.16 Delegation........................................................................95
15.17 Required Lender Decisions.........................................................95
15.18 Changes, Judgments and Discretions................................................95
15.19 Determination by Agent............................................................97
15.20 Interlender Procedure for Making Advances.........................................97
15.21 Remittance of Payments............................................................99
15.22 Redistribution of Payments........................................................99
15.23 Prompt Notice to Lenders.........................................................100
15.24 Several Debts of the Lenders.....................................................101
15.25 Enforcement of Security..........................................................101
15.26 Adjustments on Termination of the Swing Line.....................................101
15.27 No Reliance on Agent's Customer Identification Program...........................103
15.28 USA Patriot Act..................................................................103
ARTICLE 16 GENERAL..........................................................................103
16.1 Costs and Expenses...............................................................103
16.2 Indemnification by the Borrower..................................................104
16.3 Application of Payments..........................................................105
16.4 Set-Off, Combination of Accounts and Crossclaims.................................105
16.5 Rights in Addition...............................................................106
16.6 Certificate Evidence.............................................................106
16.7 Evidence of Indebtedness.........................................................106
16.8 Notices..........................................................................107
16.9 Judgment Currency................................................................107
16.10 Successors and Assigns...........................................................107
16.11 Lead Arranger and Sole Bookrunner................................................110
16.12 Survival.........................................................................110
16.13 Time of the Essence..............................................................110
16.14 Governing Law....................................................................110
16.15 JURISDICTION.....................................................................111
16.16 Service of Process...............................................................112
16.17 Invalidity.......................................................................113
16.18 Amendment........................................................................113
16.19 Entire Agreement.................................................................113
16.20 This Agreement to Govern.........................................................113
16.21 Execution........................................................................113
SCHEDULE 1.1 "Borrowing Request".............................................................115
SCHEDULE 1.1 "Commitments"...................................................................117
SCHEDULE 8.2 FORM OF CANCELLATION NOTICE.....................................................118
SCHEDULE 8.8 FORM OF REPAYMENT NOTICE........................................................119
SCHEDULE 10.1 LIST OF INITIAL SECURITY........................................................120
SCHEDULE 11.2 FORM OF ADHESION CONTRACT.......................................................123
SCHEDULE 12.1.20 ORGANIZATION CHART..............................................................125
SCHEDULE 12.1.22 DEFERRED ACQUISITION consideration AND PUT/CALL OBLIGATIONS.....................127
SCHEDULE 13.1.6 FORM OF COMPLIANCE CERTIFICATE..................................................128
SCHEDULE 13.2.3(f) NON-CORE ASSETS.................................................................131
SCHEDULE 13.3.4 LIENS...........................................................................132
SCHEDULE 16.7.2 FORM OF NOTE....................................................................133
SCHEDULE 16.8 ADDRESSES FOR NOTICES...........................................................135
SCHEDULE 16.10.4 FORM OF LOAN TRANSFER AGREEMENT.................................................136
EXHIBIT 1 LITIGATION DISCLOSURE...........................................................140
CREDIT AGREEMENT
THIS AGREEMENT is made as of June 10, 2004
AMONG:
MDC PARTNERS INC.
as Borrower
- and -
THE TORONTO-DOMINION BANK
as Lead Arranger and Sole Bookrunner
- and -
THE INSTITUTIONS NAMED HEREIN AS LENDERS
as Lenders
- and -
THE TORONTO-DOMINION BANK
a bank subsisting under the laws of Canada,
acting in its capacity as administration agent for
and on behalf of itself and the other Finance Parties
with respect to the Credit Facilities and certain Finance Documents,
as Administration Agent
WHEREAS the Borrower has requested that the Lenders make available to
it a 364-day revolving operating credit facility in the aggregate principal
amount of CAD25,000,000 and the Lenders have agreed to do so for the purposes
and on the terms and conditions set out in this Agreement.
NOW THEREFORE in consideration of the mutual obligations contained
herein and for other consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 General Definitions. Unless the context otherwise requires, in this
Agreement:
"Acceptable LLC Agreement" means (i) in relation to a limited liability
company, a limited liability company agreement governing, inter alia, the
relations amongst members of a limited liability company in form and substance
satisfactory to the Required Lenders acting reasonably and (ii) in relation to
any other Person (other than an individual), an agreement governing, inter
alia, the relations amongst Persons holding Capital Stock in that Person, in
form and substance satisfactory to the Required Lenders acting reasonably. The
Lenders hereby confirm that (A) the limited liability company agreement of KBP
Holdings LLC dated January 28, 2004 among MDC/KBP Acquisition Inc., KBP
Management Partners Inc., the Borrower and KBP Holdings LLC in effect as at
the date hereof (without regard to any change thereto) is in form and
substance satisfactory to the Required Lenders as is any other limited
liability company agreement to substantially the same effect in all matters
regarded as material by the Required Lenders and (B) the limited liability
company agreements governing, inter alia, the relations amongst members of
Maxxcom Group Members as in effect as at the date hereof (without regard to
any change thereto) are in form and substance satisfactory to the Required
Lenders.
"Acceptance" means a Draft issued by the Borrower and accepted by a Lender
pursuant to this Agreement.
"Acceptance Proceeds" means the cash proceeds realized on the sale of an
Acceptance pursuant to this Agreement before deduction of the Stamping Fee.
"Adhesion Contract" means an agreement in the form of Schedule 11.2 (or in
such other form to substantially similar effect as the Agent may accept) duly
executed and completed by the Borrower and a Lender Hedging Affiliate and
delivered to the Agent pursuant to Section 11.2.
"Adjusted EBITDA" for any Test Period means EBITDA of the Restricted Group for
that Test Period calculated on a Modified Consolidated Basis, adjusted as
follows:
(i) the corporate overhead expenses of the Borrower in respect
of that Test Period shall be added back to EBITDA; and
(ii) C$1,600,000 (or C$400,000 per Fiscal Quarter) shall be
deducted from EBITDA.
Notwithstanding the foregoing, Adjusted EBITDA for the first three (3) Test
Periods ending after the Closing Date shall be determined as follows:
(A) Adjusted EBITDA for the Test Period ending March 31, 2004
shall be determined as the product obtained by multiplying
(x) EBITDA of the Restricted Group for the Fiscal Quarter
ending on that date calculated on a Modified Consolidated
Basis, adjusted by (1) adding back the corporate overhead
expenses of the Borrower and (2) subtracting CAD400,000 by
(y) four (4);
(B) Adjusted EBITDA for the Test Period ending June 30, 2004
shall be determined as the product obtained by multiplying
(x) EBITDA of the Restricted Group for the period of two (2)
Fiscal Quarters ending on that date calculated on a Modified
Consolidated Basis, adjusted by (1) adding back the
corporate overhead expenses of the Borrower in respect of
the two (2) Fiscal Quarters ending on that date, and (2)
subtracting CAD800,000 by (y) two (2); and
(C) Adjusted EBITDA for the Test Period ending September 30,
2004 shall be determined as the product obtained by
multiplying (x) EBITDA of the Restricted Group for the
period of three (3) Fiscal Quarters ending on that date
calculated on a Modified Consolidated Basis, adjusted by (1)
adding back the corporate overhead expenses of the Borrower
in respect of the period of three (3) Fiscal Quarters ending
on that date, and (2) subtracting CAD1,200,000 by (y) the
fraction of four-thirds (4/3).
"Advance" means any amount of money or credit advanced, deemed advanced or to
be advanced (as the context requires) by a Lender or the Lenders to the
Borrower pursuant to this Agreement, whether by way of loan (including
overdraft) or acceptance of Drafts, or any relevant portion thereof, or issue
of a Standby Instrument (as the context requires).
"Affected Finance Party" has the defined meaning assigned to it in Section 7.5
or Subsection 7.8.1, as applicable.
"Affected Lender" has the defined meaning assigned to it in Section 7.6 or
7.7, as applicable and also (where the context so admits) includes an Affected
Finance Party.
"Affiliate" in relation to any Person (the "relevant party") means any other
Person (i) that, directly or indirectly, Controls, is Controlled by or is
under common Control with, the relevant party, (ii) that beneficially owns or
Controls ten percent (10%) or more of the Voting Capital Stock or
Participating Capital Stock, on an undiluted or a fully diluted basis, of the
relevant party, (iii) of which ten percent (10%) or more of the Voting Capital
Stock or Participating Capital Stock, on an undiluted or a fully diluted
basis, is beneficially owned or Controlled by the relevant party or (iv) that
is a Senior Officer or director of any Person referred to in any of clauses
(i), (ii) and (iii) of this definition, or that is a Person that does not deal
at arm's length with any such Senior Officer or director.
"Agency Fee Agreement" means the agency fee agreement of even date herewith
between the Borrower and the Agent providing for the payment of certain agency
fees to the Agent.
"Agent" means The Toronto-Dominion Bank acting in its capacity as
administration agent under this Agreement and the Security for and on behalf
of itself and the other Finance Parties, and not in its individual capacity as
a Lender, or (as the context requires) any replacement for such administration
agent that is appointed pursuant to Subsection 15.15.1.
"Agent's Accounts" means the accounts of the Agent which the Agent notifies to
each of the Lenders and the Borrower from time to time as being the accounts
for payments to the Agent pursuant to this Agreement.
"Agreement" means this credit agreement.
"Annual Budget" for any Fiscal Year means a detailed consolidated business
plan for the Restricted Group for such Fiscal Year (broken out by Fiscal
Quarter) which includes an income statement, balance sheet, cash flow
projections, a capital expenditures budget, statement of material assumptions,
narrative descriptive, explanation and a comparison to the results of the
prior Fiscal Year.
"Anti-Money Laundering Laws" is defined in Section 12.1.30(b).
"Anti-Money Laundering Measures" is defined in Section 12.1.30(b).
"Anti-Terrorism Laws" means the OFAC Laws and Regulations, the Executive
Orders and the USA Patriot Act.
"Anti-Terrorism Policies" is defined in Section 13.1.21.
"Applicable Law" means any international treaty, any treaty with first nations
peoples, any domestic or foreign constitution or any multinational, federal,
provincial, territorial, state, municipal, county or local statute, law,
ordinance, code, rule, regulation or Order (including any consent decree or
administrative Order), applicable to, or any guideline, policy or
Authorization of any Governmental Body, arbitrator or other decision-making
authority having jurisdiction with respect to any specified Person, property,
transaction or event or any of such Person's Business Assets, whether or not
having the force of law and any Award in any Litigation to which the Person in
question is a party or by which such Person or any of its Business Assets is
bound.
"Applicable Margin" in relation to any form of Advance as of any date means
the percentage rate per annum determined in accordance with the table set
forth below by reference to the Total Debt/EBITDA Ratio most recently
certified by the Borrower in a Compliance Certificate delivered to the Agent
pursuant to Section 9.1(h) or Subsection 13.1.6:
Total Debt/ Floating Rate Standby Instruments,
EBITDA Ratio Loans Libor Loans and Acceptances
------------ ----- ---------------------------
< 1.5:1 0.75% 1.75%
> 1.5:1 < 2.00:1 1.25% 2.25%
> 2.0:1 1.75% 2.75%
Changes in the Applicable Margin shall take effect as of the third Business
Day following the date the Borrower delivers a Compliance Certificate to the
Agent pursuant to Subsection 13.1.6 which, when delivered, discloses a Total
Debt/EBITDA Ratio giving rise to such changes. The Applicable Margin
applicable to all Types of Advances, other than Acceptances and Documentary
Credits, outstanding on the date any such change takes effect will be adjusted
immediately, but without retroactive effect. There will be no adjustments made
with respect to outstanding Acceptances or Documentary Credits.
Notwithstanding the foregoing, for the purposes of this definition: (i) if the
Borrower fails to deliver a Compliance Certificate to the Agent by the date
required to do so under Subsection 13.1.6, the Total Debt/EBITDA Ratio shall
be deemed as from such date to be greater than 2.00:1 until such failure is
cured, at which time the Applicable Margin shall be determined in accordance
with the table set forth above, but without any adjustments having retroactive
effect, and (ii) if an Event of Default has occurred which has not been waived
by the Required Lenders, (A) any reduction in the Applicable Margin which
would, but for this provision, take place shall be deferred until the first
Business Day of the calendar month following the month in which the Required
Lenders waive such Event of Default and (B) the Applicable Margin applicable
to all Types of Advances shall, to the extent permitted by applicable law, be
increased by two percent (2%) per annum.
"Approved Fund" means any Person (other than an individual) that is or will be
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business
and that is administered or managed by a Lender, an Affiliate of a Lender or
an entity or an Affiliate of an entity that administers or manages a Lender.
"Auditors" means the firm of BDO Dunwoody LLP, KPMG LLP or such other
nationally recognized firm of chartered accountants not unacceptable to the
Agent as the Borrower may designate from time to time as its auditors.
"Authorization" means any authorization, approval, consent, exemption,
licence, permit, franchise or no-action letter from any Governmental Body
having jurisdiction with respect to any specified Person, property,
transaction or event, or with respect to any of such Person's Business Affairs
or from any Person in connection with any easements or contractual rights.
"Availability Period" means the period from and including the date hereof to,
but excluding, the Maturity Date.
"Award" means any judgment, decree, injunction, rule, award or Order of any
Governmental Body, arbitrator or other decision-making authority of competent
jurisdiction.
"BA Equivalent Advance" has the defined meaning assigned to it in Section
5.10.
"BA Reference Rate" means (i) for each Canadian Lender that is a Schedule I
Canadian chartered bank, CDOR and (ii) for each Canadian Lender that is not a
Schedule I Canadian chartered bank, CDOR plus one-tenth percent (0.10%) per
annum.
"Bankruptcy Event" means, with respect to any Person, that such Person does
not pay or perform its obligations generally as they become due or admits its
inability to pay or perform its debts generally, that such Person commits an
act of bankruptcy within the meaning of the Bankruptcy and Insolvency Act
(Canada), any Bankruptcy Proceeding is instituted by or against that Person
(excluding any Bankruptcy Proceeding being contested by that Person in good
faith by appropriate proceedings so long as enforcement remains stayed, none
of the relief sought is granted (either on an interim or permanent basis) and
such Bankruptcy Proceeding is dismissed within 30 days of its commencement),
or that Person takes corporate, partnership or other internal management
action to authorize any of the actions set forth above in this definition.
"Bankruptcy Proceeding" means, with respect to any Person, any proceeding
contemplated by any application, petition, assignment, filing of notice or
other means, whether voluntary or involuntary and whether or not under the
Bankruptcy and Insolvency Act (Canada), the US Bankruptcy Code, the Companies'
Creditors Arrangement Act (Canada), the Winding-Up and Restructuring Act
(Canada), or any other like, equivalent or analogous legislation of any
jurisdiction seeking any moratorium, reorganization, adjustment, composition,
proposal, compromise, arrangement, administration or other like or similar
relief in respect of any or all of the obligations of such Person, seeking the
winding up, liquidation or dissolution of such Person or all or any part of
its property, seeking any Award declaring, finding or adjudging such Person
insolvent or bankrupt, seeking the appointment (provisional, interim or
permanent) of any receiver or resulting, by operation of law, in the
bankruptcy of such Person.
"Benefit Plan" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan or Non-U.S. Employee Benefit Plan) in
respect of which any Restricted Group Member or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer" as defined
in Section 3(5) of ERISA.
"Borrower" means MDC Partners Inc., a corporation incorporated and existing
under the laws of the Province of Ontario as at the date hereof.
"Borrower's Accounts" means the accounts of the Borrower maintained at the
Person that is the Agent which the Borrower notifies to the Agent from time to
time as being the account which the proceeds of Advances (other than Standby
Instruments) are to be advanced.
"Borrower's Counsel" means (i) in the Province of Ontario, Fogler ▇▇▇▇▇▇▇▇
LLP, (ii) in the State of New York, Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
or ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, as applicable, (iii) in each other relevant
jurisdiction, such legal counsel of recognized local standing not unacceptable
to the Agent as the Borrower may designate as its legal counsel in each such
jurisdiction, and (iv) each additional or replacement legal counsel of
recognized local standing not unacceptable to the Agent as the Borrower may
designate from time to time as its legal counsel.
"Borrowing" means a Conversion, Drawdown or Rollover, as the context requires.
"Borrowing Date" means a Conversion Date, Drawdown Date or Rollover Date, as
the context requires.
"Borrowing Request" means a duly completed notice requesting a Borrowing in
the form of Schedule 1.1 "Borrowing Request" (or in such other form to
substantially similar effect as the Agent may accept) signed by the Borrower.
"BSA" is defined in Section 12.1.30(b).
"Business Acquisition" means an acquisition of all or any part of the business
of another Person, including any line of business or division and the Business
Assets comprised therein, in a single transaction or in a series of
transactions, related or not, whether by acquisition of assets or of Capital
Stock of that Person or by way of amalgamation, arrangement or merger.
"Business Affairs" means the Business Assets, affairs, liabilities, financial
condition, prospects and results of operations of a specified Person.
"Business Assets" means the business, operations, undertaking, property and
assets of a specified Person.
"Business Day" means a day which is not a Saturday or a Sunday on which banks
are generally open for commercial lending and foreign exchange business in
Toronto, Canada, and (i) in respect of any Loan denominated in US Dollars in
respect of which a payment or Borrowing is due to be made, a New York Banking
Day and (ii) in respect of any determination of LIBOR, a London Banking Day.
"Canadian Dollars" and the symbol "CAD" each means the lawful currency of
Canada.
"Canadian Prime Rate" on any day means the variable nominal interest rate
equal on such day to the percentage rate per annum determined by the Agent
(rounded up to two (2) decimal places) to be the greater of (i) the rate of
interest which the Reference Lender establishes at that time as the reference
rate of interest for determination of the interest rates it will charge for
loans made in Canadian Dollars in Canada and which it refers to as its prime
rate (or its equivalent or analogous such rate) or (ii) the sum of (A) the
yearly rate of interest to which the one month CDOR is equivalent plus (B)
three-quarters percent (0.75%).
"Canadian Prime Rate Loan" means an Advance made under the Credit Facilities
by way of loan in Canadian Dollars upon which the interest rate shall be
calculated in accordance with the applicable provisions of this Agreement with
reference to the Canadian Prime Rate.
"Cancellation Notice" means a duly completed notice in the form of or to
substantially similar effect as Schedule 8.2 (or such other form to
substantially similar effect as the Agent may accept) signed by the Borrower
and given to the Agent by the Borrower pursuant to Section 8.2.
"Capital Stock" means (i) common shares, preferred shares or other equivalent
equity interests (howsoever designated) of capital stock of a body corporate,
(ii) equity preferred or common interests in a limited liability company,
(iii) member or shareholder interests in an unlimited company or unlimited
liability company, (iv) limited or general partnership interests in a limited
or general partnership, (v) trust units or other beneficial interests in a
business trust, (vi) any other interest that confers the right to receive a
share of the profits and/or losses of, or the distribution of assets of, any
Person and (vii) any other interest equivalent to any of the interests
referred to in any of clauses (i) to (vi) inclusive of this definition.
"Cash Equivalents" means (i) United States Dollars, (ii) Canadian Dollars,
(iii) debt securities issued or directly and fully guaranteed or insured by
the United States of America or Canadian government or any agency or
instrumentality thereof with maturities of one (1) year or less from the date
of acquisition, (iv) certificates of deposit, time deposits with maturities of
one (1) year or less from the date of acquisition, bankers' acceptances with
maturities not exceeding one (1) year and overnight bank deposits, in each
case with any commercial bank incorporated in the United States of America or
Canada having capital and surplus in excess of CAD $5,000,000,000, (v)
commercial paper rated A-1 or the equivalent thereof by ▇▇▇▇▇'▇ or S&P and in
each case maturing within one (1) year after the date of acquisition, and (vi)
readily marketable direct obligations issued by any state of the United States
of America or province of Canada or any political subdivision thereof having
one (1) of the two (2) highest rating categories obtainable from ▇▇▇▇▇'▇, S&P
or DBRS with maturities of one (1) year or less from the date of acquisition.
"CDOR" in relation to any specified maturity of bankers' acceptances on any
day means the yearly rate of interest equivalent to the average of the yields
applicable to banker's acceptances denominated in Canadian Dollars for that
specified maturity quoted on the Reuters Money Market CDOR page under
"Canadian Interbank Bid BA Rates" as of 10:00 a.m. on that day (or on the
preceding Business Day, if such day is not a Business Day) or, if such page or
service shall cease to be displayed or published, on such other page or
service that displays or publishes Canadian interbank bid rates for bankers'
acceptances denominated in Canadian Dollars as the Agent may select. If no
such average is displayed or published on any such page or service, CDOR will
be determined by the Agent with reference to the Canadian interbank bid rate
(rounded up to two (2) decimal places) quoted by each Lender as being the rate
at which that Lender was receiving bids (which it was prepared to accept) to
sell bankers' acceptances of the specified maturity issued by that Lender in
the relevant Canadian money markets as of 10:00 a.m. on such day.
"Certificate" from any Person means a written certificate of the Person signed
by a Senior Officer of that Person.
"Change in Control" means and shall be deemed to have occurred if any Person
or group of Persons "acting in concert" (as contemplated by the Securities Act
(Ontario) and as interpreted by Applicable Law) shall at any time have
acquired direct or indirect beneficial ownership of Voting Capital Stock of
the Borrower having attributed to it a sufficient number of the outstanding
votes attached to all of the issued and outstanding Voting Capital Stock of
the Borrower to "affect materially the control" (as contemplated by clause (c)
of the definition of "distribution" contained in the Securities Act (Ontario))
of the Borrower.
"Change in Law" means the introduction of, any change in, or the coming into
effect of, any Applicable Law, or any change in the interpretation,
administration or application thereof by any Governmental Body, or compliance
by any Finance Party (or any Holding Body Corporate of any Finance Party) with
any Applicable Law.
"CIP Regulations" is defined in Section 15.27.
"Clean-Up" means the remediation, containment, removal, treatment,
neutralization or inactivation of any Contaminant.
"Collateral" means all property, assets and undertaking (including both real
and personal property) in or to which any Restricted Group Member, now or
hereafter has rights and which is subject to (or intended by the express or
implied terms of any Loan Document to be subject to) the Security, or any item
or part thereof.
"Commitment" means Revolving Commitment or Swing Line Commitment, as the
context requires.
"Commitment Fee" means commitment fee payable under Section 7.3.
"Commitment Fee Rate" in relation to a Credit Facility for any day means
three-quarters of one percent (0.75%) per annum.
"Compliance Certificate" in respect of a Test Period means a duly completed
Certificate of the Borrower substantially in the form attached as Schedule
13.1.6 (or in such other form as the Agent may accept) setting out, among
other things, a statement for that Test Period of the calculations of the
financial tests set out in Section 13.3.
"Constitutional Documents" means (i) in relation to any body corporate, the
articles of incorporation, amendment, amalgamation, continuance or association
and the memorandum of association and any unanimous shareholder agreement, as
appropriate, or equivalent documents of that body corporate governing the
incorporation, capacity, powers and Business Affairs of that body corporate,
(ii) in relation to any limited or general partnership or other Person, the
partnership agreement or equivalent document governing the formation,
capacity, powers and Business Affairs of that partnership or other Person and,
if a partner (other than a limited partner) of that limited or general
partnership is a Person referred to in clause (i) and/or (ii) and/or (iii) of
this definition, the documents referred to in clause (i) and/or (ii) and/or
(iii) of this definition in relation to that partner and (iii) in relation to
any business trust, the declaration of trust, trust agreement or equivalent
document governing the formation, capacity, powers and Business Affairs of
that business trust and, if a trustee of that business trust is a Person
referred to in clause (i) and/or (ii) and/or (iii) of this definition, the
documents referred to in clause (i) and/or (ii) of this definition in relation
to that trustee; together, in each case, with the by-laws or other equivalent
documents regulating the organization, Control or internal management of the
relevant Person.
"Contaminant" means any solid, liquid, gas, odour, heat, sound, vibration,
radiation or combination of any of them that may (i) impair the quality of the
Environment for any use that can be made of it, (ii) injure or damage property
or plant or animal life, (iii) harm or materially discomfort any Person, (iv)
adversely affect the health of any individual, (v) impair the safety of any
individual, (vi) render any property or plant or animal life unfit for use by
man, (vii) cause loss of enjoyment of normal use of property, or (viii)
interfere with the normal course of business, and includes any "contaminant"
within the meaning assigned to such term in any Environmental Law.
"Control", "Controls" and "Controlled" when used with respect to any Person,
other than an individual, means the power to direct the management and
policies of such Person, directly or indirectly, whether through ownership of
Voting Capital Stock, by contract or otherwise.
"Conversion" means a conversion of a Loan or an Acceptance pursuant to Section
6.1.
"Conversion Date" means any day on which a Conversion takes place.
"Core Business" means (i) for the Restricted Group, other than the Secure
Products International Group, advertising and media, direct marketing and
database management, customer relationship management, sales promotion,
corporate communications, research and consulting, branding and corporate
identity, design and interactive marketing, and (ii) for the Secure Products
International Group, electronic transaction products such as credit, debit,
telephone and smart cards, secured ticketing products such as airline, transit
and event tickets and stamps both postal and excise.
"Courts of Primary Jurisdiction" or "COURTS OF PRIMARY JURISDICTION" means any
of the courts referred to in Subsection 16.15.1(a).
"Credit Facilities" means the Revolving Facility and the Swing Line.
"DBRS" means Dominion Bond Rating Service Limited.
"Debt" in relation to any Person at any time means liabilities which, in
accordance with US GAAP, would be classified upon the consolidated balance
sheet of that Person prepared as at such time as indebtedness for borrowed
money, including bank indebtedness, long-term debt, capital lease obligations
and indebtedness to Affiliates or other financial indebtedness.
Notwithstanding the foregoing, "Debt" shall include convertible debentures and
other like instruments which, in accordance with US GAAP, would be included in
shareholders equity in the consolidated balance sheet of that Person.
"Default" means any Event of Default or any default, breach, failure, event,
state or condition which, unless remedied or waived, with the lapse of time or
giving of notice, making of a determination, or any combination thereof, would
constitute or result in the occurrence of an Event of Default.
"Default Rate" means the rate of interest payable pursuant to Subsection
7.1.4.
"Deferred Acquisition Consideration" means any amount, actual or contingent,
matured or unmatured, which is owing by a Restricted Group Member to a
Minority Stockholder, any Affiliate of a Minority Stockholder or any assignee
of any thereof which (i) is, in substance, an amount owing on account of an
unpaid portion of the purchase price payable for (A) Capital Stock of a
Restricted Group Member or (B) Business Assets of a Restricted Group Member
which, in either case, was or were acquired from such Person, its Affiliate or
predecessor in title as part of a Business Acquisition or (ii) is an "earn
out" amount payable under the Constitutional Documents of any Restricted Group
Member, provided that the amounts referred to in clauses (i) and (ii) of this
definition are payable in accordance with an Acceptable LLC Agreement.
"Derivative" means any transaction (including an agreement with respect
thereto) now existing or hereafter entered into (i) which is a rate swap
transaction, swap option, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option, credit protection
transaction, credit swap, credit default swap, credit default option, total
return swap, credit spread transaction, repurchase transaction, reverse
repurchase transaction, buy/sell-back transaction, securities lending
transaction, or forward purchase or sale of a security or other financial
instrument (including any option with respect to any of these transactions),
(ii) which is a transaction similar to any transaction referred to in clause
(i) of this definition that is currently, or in the future becomes, regularly
entered into in the financial markets (including terms and conditions
incorporated by reference in such agreement) and that is a forward, swap,
future, or option on one or more rates, currencies, commodities, equity
securities or other equity instruments, debt securities or other debt
instruments, or economic indices or measures of economic risk or value, or
(iii) any combination of the transactions referred to in clauses (i) and (ii)
of this definition.
"Derivative Exposure" in relation to any Person (the "relevant party") and any
counterparty of the relevant party at any time means the amount which would be
payable by the relevant party to that counterparty, or by that counterparty to
the relevant party, as the case may be, pursuant to the agreement governing
the Derivatives entered into between them and in effect at that time if those
Derivatives were to be terminated as the result of the default of the relevant
party. If the Derivative Exposure is payable by the relevant party to any
counterparty of the relevant party, it is referred to herein as "Positive
Derivative Exposure". If Derivative Exposure is payable by any counterparty of
the relevant party to that relevant party, it is referred to herein as
"Negative Derivative Exposure".
"Designated Person" is defined in Section 12.1.30(a).
"Discount Note" means a non-interest-bearing promissory note (within the
meaning of the Bills of Exchange Act (Canada)) or depository note (within the
meaning of the Depository Bills and Notes Act (Canada)) denominated in
Canadian Dollars issued by the Borrower to a Non-Acceptance Lender to evidence
a BA Equivalent Advance.
"Documentary Credit" means a documentary or trade letter of credit, including
any replacements, renewals and amendments, issued or deemed to be issued by a
Lender pursuant to this Agreement.
"DOL" means the United States Department of Labour and any Person succeeding
to the functions thereof.
"Draft" means a blank non-interest bearing ▇▇▇▇ of exchange (within the
meaning of the Bills of Exchange Act (Canada)) or a blank depository ▇▇▇▇
(within the meaning of the Depository Bills and Notes Act (Canada)), as
applicable, drawn by the Borrower, made payable to the Borrower, bearer or a
clearing house bearing such distinguishing letters and numbers and being in
such form as each Lender may require.
"Drawdown" means a new Advance which is not derived from a Conversion or
Rollover.
"Drawdown Date" means any day on which a Drawdown takes place.
"EBITDA" of any Person for any Test Period means the amount of the
consolidated net income of that Person for that Test Period determined in
accordance with US GAAP ("Net Income") adjusted (without duplication) as
follows:
(i) the following amounts (without duplication) shall be added
to Net Income to the extent they were deducted in computing
Net Income, namely: (A) interest expense, (B) income taxes,
(C) depreciation and amortization expense, (D) non-cash
expenses resulting from employee or management compensation,
including the grant of stock options or Capital Stock to
employees, (E) extraordinary charges, (F) losses realized
upon the disposition of capital property, (G) expenses
representing the implied interest component under any
"synthetic lease" obligations, (H) foreign exchange
translation losses, (I) losses on the purchase or redemption
of securities and (J) goodwill write-downs;
(ii) the following amounts (without duplication) shall be
deducted from Net Income to the extent they were added in
computing Net Income, namely: (A) extraordinary income or
gains, (B) gains realized upon the disposition of capital
property, (C) foreign exchange translation gains, (D) gains
on the purchase or redemption of securities and (E)
dividends received on Capital Stock of Persons that are not
Subsidiaries;
(iii) the EBITDA during such period attributable to any
Subsidiaries acquired by that Person during that Test Period
shall be included on a pro forma basis for that Test Period
(assuming such acquisition and the incurrence or assumption
of any Indebtedness in connection therewith occurred on the
first day of that Test Period); and
(iv) the EBITDA during such Test Period attributable to any
Subsidiary disposed of by that Person during that Test
Period shall be excluded on a pro forma basis for that Test
Period (assuming such disposition and the repayment of any
applicable Indebtedness in connection therewith occurred on
the first day of that Test Period).
"Enforcement Event" means any of (i) the occurrence of an Event of Default
referred to in Subsection 14.1.10, (ii) the declaration by the Agent that the
Loan Obligations owing to the Senior Lenders are or have become due and
payable before their stated maturity or before the regularly scheduled dates
of payment of such Loan Obligations by reason of any Event of Default, (iii)
the exercise of any set-off rights by any Senior Lender by reason of the
occurrence of any Event of Default or (iv) the commencement of any enforcement
proceedings under or pursuant to any Loan Document by any Senior Lender.
"Environment" means the ambient air, all layers of the atmosphere, surface,
water, underground water, all land, all living organisms and the interacting
natural systems that include components of air, land, water, organic and
inorganic matter and living organisms, and includes indoor spaces.
"Environmental Law" means any Applicable Law relating to the Environment,
Hazardous Materials or occupational health or safety which applies to the
Business Affairs of any particular Person.
"Equivalent Amount" on any date means the amount in a specified currency which
would result from the conversion of a specified amount in another currency at
the Spot Rate.
"ERISA" means the Employee Retirement Income Security Act of 1974 of the
United States of America, as amended, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means (a) any corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Borrower; (b) a partnership or other trade or
business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the Internal Revenue Code) with the Borrower,
(c) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Internal Revenue Code) as the Borrower, in each case
which are treated as a single employer under Section 414 of the Internal
Revenue Code, any corporation described in clause (a) above or any partnership
or trade or business described in clause (b) above; and (d) any other Person
which is required to be aggregated with the Borrower pursuant to regulations
promulgated under Section 414(o) of the Internal Revenue Code.
"Event of Default" means any default, breach, failure, event, state or
condition described in Section 14.1; an Event of Default which occurs or
exists at any time shall be deemed to be continuing at all times thereafter
unless it is expressly waived in writing by the Required Lenders, whether or
not the default, breach, failure, event, state or condition that gave rise to
such Event of Default is remedied at any time.
"Executive Order" is defined in Section 12.1.30(a).
"Federal Funds Rate" on any day means the percentage rate per annum determined
by the Agent to be equal to the weighted average (rounded up to two (2)
decimal places) of the interest rates on overnight federal funds transactions
with members of the United States Federal Reserve System arranged by federal
funds brokers, as published for such day (or for the preceding New York
Banking Day, if such day is not a New York Banking Day) by the Federal Reserve
Bank of New York, or if such rate is not so published for any day which is a
New York Banking Day, the average (rounded up to two (2) decimal places) of
the quotations at approximately 10:00 a.m. on such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by the Agent.
"Fees" means Stamping Fees, Commitment Fees and fees payable under Section 4.5
in respect of Standby Instruments.
"Final Judgment" means a final Award from which no appeal may be made or the
applicable appeal periods have lapsed without any appeal therefrom having been
perfected.
"Finance Documents" at any time means the Loan Documents and the Qualified
Hedge Agreements in effect at that time.
"Finance Obligations" means Loan Obligations and Qualified Hedge Obligations,
and any item or part of any thereof.
"Finance Parties" means the Agent, the Lenders and the Qualified Hedge
Counterparties, or (as the context so admits) each and any of them.
"Finance Party's Own Taxes" means Taxes imposed on a Finance Party by a
Governmental Body of a jurisdiction in which the Finance Party is subject to
taxation by reason of the fact that the Finance Party: (i) is incorporated or
formed under the laws of that jurisdiction or any political subdivision
thereof, (ii) has a permanent establishment or a fixed place of business in
that jurisdiction or (iii) is resident or carrying on a trade or business in
that jurisdiction, but excluding, for greater certainty, Taxes levied only by
reason of the fact that the Finance Party has executed, delivered or performed
its obligations under, has received or is entitled to receive payments under,
or has enforced, any Finance Document.
"Finance Related Agreements" and "FINANCE RELATED AGREEMENTS" has the defined
meaning assigned to "FINANCE RELATED AGREEMENTS" in Subsection 16.15.1.
"Financial Hedge Agreements" means Derivatives entered into by a Restricted
Group Member in order to protect or hedge such Restricted Group Member against
fluctuations in interest rates or currency exchange rates and not for
speculative purposes.
"Fiscal Quarter" means one of the four (4) three-month accounting periods of
the Borrower comprising a Fiscal Year.
"Fiscal Year" means the 12 month accounting period of the Borrower which, as
at the date hereof, ends on December 31st of each calendar year.
"Floating Rate" means the Canadian Prime Rate or US Base Rate, as the context
requires;
"Floating Rate Loan" means a Canadian Prime Rate Loan or US Base Rate Loan, as
the context requires.
"Governmental Body" means any international tribunal, agency, body, commission
or other authority (including that of any union of nations), any government,
executive, parliament, legislature or local authority, or any governmental
body, ministry, department or agency or regulatory authority, court, tribunal,
commission or board of or within Canada, the United States of America or any
other foreign jurisdiction, or any political subdivision of any thereof or any
authority having jurisdiction therein.
"Guarantee" means a guarantee of, inter alia, the Finance Obligations of the
Borrower duly completed and executed by a Guarantor in favour of the Finance
Parties substantially in the form agreed between the Borrower and the Required
Lenders on the date hereof (or in such other form to substantially similar
effect as the Agent may accept).
"Guarantors" means (i) Computer Composition of Canada Inc., ▇▇▇▇▇▇-▇▇▇▇▇▇
Canada Ltd., ▇▇▇▇▇▇-▇▇▇▇▇▇ [USA] Ltd., Pro-Image Corporation, Metaca
Corporation, MDC/KBP Acquisition Inc., Placard Pty. Ltd. and MDC USA Holdings
Inc. and (ii) each additional Restricted Group Member that hereafter provides
a Guarantee pursuant to this Agreement.
"Hazardous Materials" means any pollutant or Contaminant, including any
hazardous, dangerous, registrable or toxic chemical, material or other
substance within the meaning of any Environmental Law, including urea
formaldehyde foam type of insulation, asbestos or asbestos containing
materials, polychlorinated biphenyls (PCB's) or PCB contaminated fluids.
"Holding Body Corporate" of any Person means another Person that Controls that
Person.
"Hostile Take-Over Bid" means a Take-Over Bid by any Restricted Group Member
or in which any Restricted Group Member is involved, in respect of which the
board of directors (or equivalent governing body) of the target entity has
recommended against acceptance of such Take-Over Bid to the target entity's
Capital Stock holders or which is similarly opposed or contested.
"Immaterial" means does not, and could not reasonably be expected to, have a
Material Adverse Effect.
"Immaterial Amendment" means any change which, in the opinion of the Required
Lenders acting reasonably, could not reasonably be expected to (i) have a
material adverse effect on any of the rights or obligations of any Restricted
Group Member, (ii) change the business, assets, operations, liabilities or
financial condition of any Restricted Group Member or any Person in which a
Restricted Group Member has made an Investment, or the manner in which any
Investment in or any distribution or return of capital on any Investment in
any such Restricted Group Member or Person is to take place, as contemplated
by the Constitutional Documents and agreements (including Acceptable LLC
Agreements) governing such matters (including matters governing Deferred
Acquisition Consideration and Put/Call Obligations) prior to such change, in a
manner that is material to the credit assessment of the Restricted Group made
by any Lender, (iii) change the nature, scope or extent to which any
transaction is permitted or restricted under this Agreement, any Acceptable
LLC Agreement or any similar such agreement or (iv) have a Material Adverse
Effect.
"Impermissible Qualification" means, relative to the opinion or report of any
independent certified public accountant or any independent chartered
accountant as to any financial statement of any Restricted Group Member or
other Person, any qualification or exception to such opinion or report:
(a) which is of a "going concern" or similar nature;
(b) which relates to any limited scope of examination of matters
relevant to that financial statement; or
(c) which relates to the treatment or classification of any item
in that financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect
of which would be to cause the Borrower to be in default of
any of its obligations under Section 13.3.
"Income Taxes" means taxes based on or measured by income or profit of any
nature or kind, including Canadian federal and provincial income taxes and
similar such taxes imposed by any foreign jurisdiction (including any union of
nations).
"Indebtedness" of any Person at any time means obligations of such Person or
any of its Subsidiaries (without duplication) to pay (in whole or in part) any
of the following amounts at such time:
(a) Debt;
(b) amounts, actual or contingent, matured or unmatured, payable
under, by reason of, or otherwise in respect of, any
bankers' acceptance, standby credit or bank guarantee;
(c) amounts, actual or contingent, matured or unmatured, payable
under, by reason of, or otherwise in respect of any sale of
promissory notes, sale of accounts, factoring,
securitization or discounting arrangement to the extent
recourse to that Person or any Subsidiary of it exists to
recover such amounts;
(d) the principal amount of, and any premiums and capitalized
interest payable in respect of, the deferred purchase price
of property or services;
(e) the principal amount of, and any premiums and capitalized
interest payable in respect of, amounts payable under, by
reason of, or otherwise in respect of any Lien upon any
property acquired (whether or not assumed);
(f) Positive Derivative Exposure;
(g) amounts, actual or contingent, matured or unmatured, payable
under, by reason of, or otherwise in respect of, any (i)
standby credit, bank guarantee or performance bond, (ii)
Sale/Lease-Back Transaction or (iii) so-called "synthetic
lease" transaction;
(h) the redemption or retraction price of any Preferred Shares;
(i) the capital portion of any other obligation that is not Debt
having the commercial effect of borrowing;
(j) Deferred Acquisition Consideration;
(k) the current portion of Put/Call Obligations that is no
longer contingent and in respect of which any Restricted
Group Member has received notice from a Minority Stockholder
requiring payment; or
(l) any amount payable under any direct or indirect guarantee of
any amount of the nature described in any of paragraphs (a)
to (k) above (including any guarantee by any Restricted
Group Member referred to in Subsection 13.2.2(c) in relation
to amounts that are no longer contingent and in respect of
which any Maxxcom Group Member or such guarantor has
received notice from a Person referred to in clause (i)
thereof requiring payment).
For certainty, reserves for deferred taxes or general contingencies, current
trade payables which are payable on customary or usual trade terms, current
expenses (other than interest expense) accrued in the ordinary course of
conducting business and current payments under operating leases, for any
current fiscal period, and customer advance payments and deposits received in
the ordinary course of conducting the Restricted Group's Business, are not
Indebtedness. Wherever in this Agreement the amount of any Indebtedness is
required to be determined or measured, the amount of any Indebtedness referred
to in any of clauses (ii) and (iii) of paragraph (g) above shall be equal to
the amount obtained by aggregating the present values of each amount payable
under or otherwise in respect thereof at the discount rate which would be
applied under US GAAP if such Indebtedness were a capital lease. In addition,
"Indebtedness" of any Person includes Indebtedness described in (a) to (k)
above that would not appear as a liability on the consolidated balance sheet
of such Person if (1) such Indebtedness is the obligation of a partnership or
a joint venture that is not a Subsidiary of such Person (a "Joint Venture"),
(2) such Person or a Subsidiary of it is a general partner of the Joint
Venture (a "General Partner") and (3) there is recourse, by agreement or
operation of law, with respect to the payment of such Indebtedness to the
property or assets of such Person or a Subsidiary of it; and such Indebtedness
shall be included in an amount equal to (x) the greater of (A) the net assets
of the General Partner and (B) the amount of such obligations to the extent
that there is recourse, by agreement of operation of law, to the property or
assets of such Person or a Subsidiary of it (other than the General Partner)
or (y) if less than the amount determined pursuant to clause (x) immediately
above, the actual amount of such Indebtedness that is recourse to such Person
or any Subsidiary of it, if the Indebtedness is evidenced by a writing and is
for a determinable amount.
"Intellectual Property Rights" means all trade secrets, confidential
information and know-how, Software, patents, trade marks, patent or trade ▇▇▇▇
rights, registrations and applications, designs, logos, indicia, trade names,
corporate names, company names, business names, trade styles, business
identifiers, fictitious business names or characters, copyrights, copyright
applications, integrated circuit topography rights, registrations and
applications, semi-conductor chip rights, design rights, registrations and
applications, design patents and other industrial designs, goodwill, letters
patent and other industrial or intellectual property of whatever kind in which
any Restricted Group Member now or hereafter has rights, and any item or part
thereof, and each and every such right.
"Interest Coverage Ratio" for any Test Period means the ratio for that Test
Period of (i) Adjusted EBITDA of the Restricted Group divided by (ii) Interest
Expense.
"Interest Expense" for any Test Period means the total combined interest
expense of the Restricted Group for that Test Period determined on a Modified
Consolidated Basis, including capitalized interest, dividends on Preferred
Shares and all but the principal component of rentals in respect of capital
leases, adjusted (to the extent applicable) in accordance with the net
payments made by each Restricted Group Member pursuant to Financial Hedge
Agreements and including interest expense actually paid in cash (as opposed to
Capital Stock) attributable to convertible debentures and other like
instruments which, in accordance with US GAAP, would be included in
shareholders equity in the consolidated balance sheet of the Borrower, but
excluding amortization of deferred financing costs, and any other amounts of
non-cash payments of interest.
"Interest Payment Date" means:
(a) with respect to each Floating Rate Loan or any amount on
which interest is payable under Subsection 7.1.4 and any
period of time elapsed in any calendar month, the third
Business Day of the immediately following calendar month;
and
(b) with respect to each Libor Loan, the last day of each
Interest Period applicable to it and, with respect to each
Libor Loan with an Interest Period longer than three (3)
months, each day that falls every three (3) months after the
commencement of that Interest Period (or the next following
Business Day if any such day is not a Business Day) during
that Interest Period.
"Interest Period" means for any Libor Loan, the period of one (1), two (2),
three (3) or six (6) months, as selected by the Borrower in a Borrowing
Request commencing on each Borrowing Date of such Libor Loan, provided that
any Interest Period which would otherwise end on a day which is not a Business
Day shall be extended or shortened in accordance with the Modified Following
Business Day Convention.
"Internal Revenue Code" means the Internal Revenue Code of 1986 of the United
States of America, as amended, and any regulations or guidance promulgated
thereunder.
"Investment" means any loan, advance (other than commission, travel and
similar advances to officers and employees made in the ordinary course of
business), extension of credit (other than accounts receivable on customary or
usual terms arising in the ordinary course of business) or contribution of
capital to any other Person or any acquisition of Capital Stock, deposit
accounts, certificates of deposit, mutual funds, bonds, notes, debentures or
other securities of any other Person or any structured notes or Derivatives.
Whenever in this Agreement the amount of any Investment is required to be
determined or measured such amount shall be the original principal or capital
amount thereof, less all returns of principal or equity thereof, but not
interest, dividends or other distributions of income paid thereon, and shall,
if made by the transfer or exchange of property other than cash, be deemed to
have been made in an original principal or capital amount equal to the fair
market value of such property at the time of such Investment, as determined in
good faith by the Borrower and confirmed by the Auditors.
"IP License" means a license of a right to use Intellectual Property Rights.
"IRS" means the Internal Revenue Service of the United States of America and
any Person succeeding to the functions thereof.
"Issuing Bank" in relation to a Standby Instrument means the Lender that
issued, is deemed to have issued or is to issue (as the context requires) that
Standby Instrument pursuant to this Agreement.
"KBP Group" at any time means MDC/KBP Acquisition Inc., KBP Holdings LLP,
▇▇▇▇▇▇▇▇▇▇▇ Bond & Partners LLP, Dotglu LLC, ▇▇▇▇▇▇▇▇▇▇▇ Bond & Partners West
and their respective Subsidiaries, and "KBP Group Member" means any member of
the KBP Group.
"Lead Arranger and Sole Bookrunner" means The Toronto-Dominion Bank.
"Lender" means (i) each Person listed as a Lender in the signature pages of
this Agreement, (ii) each Transferee of each Person referred to in clause (i)
of this definition relative to its rights and obligations under the Credit
Facilities and (iii) any immediate or subsequent Transferee of such Transferee
relative to such rights and obligations.
"Lender Hedging Affiliate" means a financial institution which (i) is an
Affiliate of a Lender at the time it has entered into a Financial Hedge
Agreement with a Restricted Group Member and (ii) has executed and delivered
to the Agent an Adhesion Contract.
"Lenders' Counsel" means (i) in the Province of Ontario, the firm of Fasken
▇▇▇▇▇▇▇▇▇ DuMoulin LLP, (ii) in the United States of America, Sidley ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇ LLP, (iii) in each other relevant jurisdiction, such local legal
counsel as the Agent may designate as the Lenders' legal counsel in that
jurisdiction, and (iv) in each case, such replacement or additional firm as
the Agent may designate from time to time as the Lenders' legal counsel.
"Lending Office" of a Lender means the office of that Lender which that Lender
notifies to the Agent from time to time as being the office to and from which
notices and payments to and by it are to be made pursuant to this Agreement.
"Letter of Guarantee" means a bank guarantee, including any replacements,
renewals and amendments, issued or deemed issued pursuant to this Agreement.
"LIBOR" for each Interest Period of each Libor Loan means the percentage rate
per annum equal to the offered quotation which appears on the page of the
Telerate Screen which displays or publishes the British Bankers' Association
Interest Settlement Rate for the currency of such Libor Loan (being currently
"3750") for such Interest Period as of 11:00 a.m. (London time) on the
Quotation Date for such Interest Period and for a period similar to such
Interest Period or, if such page or service shall cease to be displayed or
published, such other page or such other service for the purpose of displaying
or publishing the British Bankers' Association Interest Settlement Rate for US
Dollar deposits as the Agent shall select. If no quotation for US Dollar
deposits for any Interest Period is displayed or published to permit the Agent
to determine LIBOR in accordance with the foregoing, LIBOR will be determined
by the Agent with reference to the rate (rounded up to two decimal places)
quoted by each Lender as the rate at which that Lender was offering US Dollar
deposits in a representative amount to prime banks in the London interbank
market for such Interest Period as of 11:00 a.m. (London time) on the
Quotation Date for such Interest Period.
"Libor Loan" means an Advance made under the Revolving Facility by way of loan
in United States Dollars upon which interest shall be calculated in accordance
with the applicable provisions of this Agreement with reference to LIBOR.
"Lien" means (i) any right of set-off intended to secure the payment or
performance of an obligation, (ii) any interest in property created by way of
mortgage, pledge, charge, lien, assignment by way of security, hypothecation,
security interest, hire purchase agreement, conditional sale agreement,
Sale/Lease-Back Transaction, deposit arrangement, title retention, capital
lease or discount, factoring or securitization arrangement on recourse terms,
(iii) statutory deemed trust or lien, (iv) any preference, priority, adverse
claim, levy, execution, seizure, attachment, garnishment or other encumbrance
which binds property, and (v) any agreement to grant any of the foregoing
rights or interests described in clauses (i) to (iii) of this definition.
"Lists" is defined in Section 12.1.30(a).
"Litigation" means any grievance, investigation, litigation, legal action,
lawsuit, mediation, alternative dispute resolution proceeding or other
proceeding (whether civil, administrative, quasi-criminal or criminal) by or
before any Governmental Body, arbitrator or other decision-making authority.
"Loan" means a Libor Loan or Floating Rate Loan, as the context requires.
"Loan Documents" means, collectively, this Agreement, each Guarantee, the
Security Documents, the Agency Fee Agreement, the Post-Closing Undertaking and
each other agreement, document or instrument delivered to or for the benefit
of the Senior Lenders pursuant to or otherwise in connection with any of this
Agreement, each Guarantee, the Security Documents, the Agency Fee Agreement
and the Post-Closing Undertaking.
"Loan Obligations" means the Indebtedness and other obligations of each
Restricted Group Member owing to the Senior Lenders incurred under or pursuant
to this Agreement or any other Loan Document, and any item or part of any
thereof, but excluding Indebtedness arising under any Guarantee to the extent
it solely relates to any Financial Hedge Agreement. For certainty, "Loan
Obligations" shall include interest accruing subsequent to the commencement
of, or which would have accrued but for the commencement of, any Bankruptcy
Proceeding in accordance with and at the rate (including the Default Rate to
the extent lawful) specified herein or in another applicable Loan Document,
whether or not such interest is an allowable claim in such Bankruptcy
Proceeding.
"Loan Transfer Agreement" has the defined meaning assigned in Subsection
16.10.4.
"London Banking Day" means a day on which dealings in US Dollar deposits by
and between banks may be transacted in the London interbank market.
"Majority Lenders" at any time means Lenders whose Commitments collectively
amount to at least 66-2/3% of the Total Commitments, unless an Enforcement
Event has occurred which has not been waived by the Required Lenders, in which
event "Majority Lenders" at any time thereafter means Lenders whose shares in
outstanding Advances under the Credit Facilities collectively amount to at
least 66-2/3% of the total Outstanding Amount of such Advances.
"Material Adverse Change" means any change, effect, event, occurrence or
change in condition or fact, that has, or could reasonably be expected to
have, a Material Adverse Effect.
"Material Adverse Effect" means an effect which:
(a) impairs, in a material adverse way, any Specified Restricted
Group Member's ability to perform its Finance Obligations;
(b) prejudices, restricts or renders unenforceable or
ineffective, in a material adverse way, any Guarantee or
other Security or any of the rights intended or purported to
be granted under or pursuant to any Finance Document by any
Specified Restricted Group Member to or for the benefit of
the Finance Parties;
(c) results in a material adverse change in any of the Business
Affairs of any Specified Restricted Group Member; or
(d) results in a loss, diminution or destruction of any
substantial part of the Business Assets (either physically
or in value) of any Restricted Group Member by an amount of
at least the Threshold Amount which is not substantially
compensated for by insurance or expropriation proceeds.
For the purposes of this definition, "Specified Restricted Group Member" means
(i) the Borrower, (ii) any Secure Products International Group Member and
(iii) any other Restricted Group Member (A) whose Business Affairs contributed
at least the Threshold Amount to the computation of Adjusted EBITDA of the
Restricted Group for the Test Period most recently completed and reported upon
in a Compliance Certificate delivered to the Lenders pursuant hereto (the
"Latest Test Period"), (B) that has combined shareholders equity and retained
earnings in excess of the Threshold Amount as at the end of the Latest Test
Period, (C) that is party to any Material Contract or Material IP License or
(D) that owns or has a permanent right to use any Material Intellectual
Property Rights. The final determination as to whether or not any particular
effect is a Material Adverse Effect will be made by the Required Lenders
acting in good faith.
"Material Contract" means any agreement between any Restricted Group Member
and a customer of any Restricted Group Member that gives rise to payments to
the Restricted Group of more than the Threshold Amount per annum.
"Material IP License" means any IP License that requires payments by or to any
Restricted Group Member of more than the Threshold Amount per annum or is
otherwise designated as a "Material IP License" by the Required Lenders.
"Material Intellectual Property Rights" means any item of Intellectual
Property Rights that generates revenues to the Restricted Group of more than
the Threshold Amount per annum or is otherwise designated as "Material
Intellectual Property Rights" by the Required Lenders.
"Maturity Date" in relation to the Revolving Facility or the Swing Line means
May 31, 2005 or, if such date is not a Business Day, the preceding Business
Day.
"Maxxcom" means Maxxcom Inc., a corporation incorporated and existing under
the laws of the Province of Ontario as at the date hereof.
"Maxxcom Group" at any time means Maxxcom and each of its Subsidiaries which
at no time was a Restricted Group Member or a Subsidiary of the Borrower that
was at any time a Restricted Group Member.
"Minority Stockholder" means (i) any Person that is not a Restricted Group
Member, deals at arm's length with the Restricted Group and holds Capital
Stock in a Restricted Group Member acquired before that Restricted Group
Member first became a Restricted Group Member and (ii) any transferee in
accordance with the provisions of an Acceptable LLC Agreement of a Person
referred to in clause (i) of this definition that is not a Restricted Group
Member relative to any Capital Stock in a Restricted Group Member referred to
in clause (i) of this definition and that deals at arm's length with the
Restricted Group.
"Modified Consolidated Basis" means quarterly or annual, as the context
requires, consolidated financial statements reflecting the results of the
Restricted Group based upon the unconsolidated financial statements of the
Borrower and the consolidated financial statements of all Subsidiaries that
are Secured Group Members from time to time, and (i) excluding, for greater
certainty, the financial statements of all Subsidiaries that are not Secured
Group Members, and (ii) accounting for Maxxcom and ▇▇▇▇▇▇▇ Ontario Limited as
a portfolio investment on a cost basis and not as a Subsidiary.
"Modified Following Business Day Convention" means such convention as referred
to and defined in the 2000 ISDA Definitions and for such purpose "Business
Day" as referred to therein shall mean a Business Day as defined in this
Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6)
years was, contributed to by any Restricted Group Member or any ERISA
Affiliate.
"Net Acceptance Proceeds" means the cash proceeds realized on the issuance and
sale of an Acceptance pursuant to this Agreement after deduction of the
Stamping Fee.
"Net Asset Disposal Proceeds" means the gross proceeds in cash or Cash
Equivalents realized by any Restricted Group Member on disposal of any of its
Business Assets (other than inventory and equipment disposals in the ordinary
course of conducting day-to-day operations), less all (i) costs of disposal,
including legal, accounting and investment banking fees and brokerage and
sales commissions paid to Unrelated Parties, (ii) any relocation expense
incurred as a result thereof, (iii) all Taxes (to the extent such Taxes will
actually be paid (after applying any available tax credits, loss carryforwards
or deductions and any tax sharing agreements) during or in respect of the
Fiscal Year in which such disposal took place) paid or estimated to be paid in
respect of such disposal and (iv) the amount of any Indebtedness (excluding
Secured Obligations) secured by a Permitted Lien on such Business Assets owing
to any Unrelated Party which is paid or required to be paid under the
agreement governing the repayment of such Indebtedness by reason of such
disposal.
"New York Banking Day" means a day on which banks generally are open for the
conduct of commercial lending and foreign exchange business in New York City.
"Non-Acceptance Lender" has the defined meaning assigned to it in Section
5.10.
"Non-US Employee Benefit Plan" means any employee benefit plan as defined in
Section 3(3) of ERISA which is maintained or contributed to for the benefit of
the employees or former employees of any Restricted Group Member or any
employee benefit plan in relation to which any Restricted Group Member has a
liability or potential liability, but which is not covered by ERISA pursuant
to Section 4(b)(4) of ERISA.
"Non-US Pension Plan" means any Non-US Employee Benefit Plan which is a
pension plan as defined in Section 3(2) of ERISA but which is not covered by
ERISA pursuant to Section 4(b)(4) of ERISA and which under applicable local
law is required to be funded through a trust or other funding vehicle other
than a trust or funding vehicle maintained by a Governmental Body and includes
a "pension plan" or "plan" which is subject to the funding requirements of the
Pension Benefits Act (Ontario) or applicable pension benefits legislation in
any other Canadian jurisdiction and is applicable to employees resident in
Canada of any Restricted Group Member.
"Note" means any promissory note issued at the request of a Lender pursuant to
Subsection 16.7.2 substantially in the form of Schedule 16.7.2.
"OFAC" is defined in Section 12.1.30(a).
"OFAC Laws and Regulations" is defined in Section 12.1.30(a).
"Order" means any order, directive, direction or request of any Governmental
Body, arbitrator or other decision-making authority of competent jurisdiction.
"Outstanding Amount" when used in relation to any outstanding Advance at any
time means:
(a) its aggregate face amount if it is an issue of Acceptances;
(b) its outstanding principal balance if it is a Canadian Prime
Rate Loan;
(c) its Standby Instrument Exposure if it is a Standby
Instrument denominated in Canadian Dollars;
(d) the Equivalent Amount in Canadian Dollars of its outstanding
principal balance if it is a Libor Loan denominated in US
Dollars or a US Base Rate Loan; and
(e) the Equivalent Amount in Canadian Dollars of its Standby
Instrument Exposure if it is a Standby Instrument
denominated in foreign currency,
and when used in relation to a Lender's share in any outstanding Advance at
any time it means such Lender's Rateable Share of the Outstanding Amount of
such Advance.
"Participant" has the defined meaning assigned in Subsection 16.10.3.
"Participating Capital Stock" means Capital Stock of a Person which carries
rights to distribution of profits or gains realized by that Person and to the
assets of such Person on dissolution or winding-up.
"Payment in Full" in relation to any Finance Obligations owing to any Finance
Party means permanent, indefeasible and irrevocable payment in cash (or other
freely available funds transfer as may be expressly provided for in the
Finance Documents to which that Finance Party is party) to that Finance Party
in full of such Finance Obligations owing to that Finance Party in accordance
with the express provisions of the Finance Documents to which that Finance
Party is party, without regard to any compromise, reduction or disallowance of
all or any item or part thereof by virtue of the application of any
bankruptcy, insolvency or other similar such laws, any law affecting
creditors' rights generally or general principles of equity, and the
cancellation or expiry of all Commitments (if any) of that Finance Party; and
"paid in full" shall (to the extent the context so admits) be construed in
like manner.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Period End Date" means the last day of an Interest Period of a Libor Loan or
of the Term of an issue of Acceptances, as the context requires.
"Permitted Investments" means Investments of any Restricted Group Member
permitted by Subsection 13.2.7.
"Permitted Liens" means:
(a) liens in respect of Statutory Prior Claims, but only if the
obligations secured by such liens are paid when due;
(b) liens for assessments or governmental charges or levies
which are paid when due or, if overdue, the validity or
amount of which is being contested in good faith by
appropriate proceedings and in respect of which adequate
steps have been taken (which may include cash being paid to
or pledged with the relevant Governmental Body) to prevent
penalties from being imposed, interest from accruing and the
commencement or continuation of enforcement proceedings and
adequate reserves in accordance with US GAAP have been
recorded on the consolidated balance sheet of the Borrower;
(c) construction, mechanics, carriers, warehousemen's, storage,
repairers and materialmen's liens but only if the
obligations secured by such liens are paid when due and no
Lien has been registered against any Business Assets of any
Restricted Group Member or if a Lien has been registered,
same is being vigorously defended in good faith by
appropriate proceedings and appropriate steps have been
taken to prevent any disposal of such Business Assets;
(d) easements, encroachments, rights of way, servitudes,
restrictive covenants or other similar rights in land
granted to or reserved by other Persons, rights of way for
sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as
to the use of real properties, which easements,
encroachments, rights of way, servitudes, restrictive
covenants, other similar rights and restrictions do not, in
the aggregate, impair the conduct of the business of any
Restricted Group Member or impair the validity, priority or
realizable value of the Security;
(e) the right (so long as it is not exercised) reserved to or
vested in any Governmental Body by the terms of any
Authorization acquired by any Restricted Group Member or by
any statutory provision, to terminate any such
Authorization, or to require annual or other periodic
payments as a condition of the continuance thereof or to
distrain or obtain a charge on any Business Asset of any
Restricted Group Member in the event of a failure to make
such annual or periodic payments or to comply with the terms
thereof;
(f) any rights of expropriation, access or user or other similar
such rights conferred or vested on public authorities by or
under statutes of Canada or any foreign jurisdiction or any
political subdivision of any thereof, provided they are not
exercised;
(g) the reservations, limitations, provisos and conditions, if
any, expressed in any original grants from the Crown;
(h) defects or irregularities in title which are of a minor
nature and which do not, and are not reasonably likely to,
in the aggregate materially impair the value or the use of
any Business Assets affected thereby for the purposes for
which it is held by any Restricted Group Member;
(i) all applicable governmental orders, laws, bylaws and
regulations which have been complied with in all respects or
any contraventions of which do not, and could not be
reasonably expected to, adversely affect the use or intended
use of any Business Assets of any Restricted Group Member;
(j) liens arising from court or arbitral proceedings, provided
that the claims secured thereby are being contested in good
faith by the relevant Restricted Group Member, execution
thereon has been stayed and continues to be stayed and such
liens do not, in the aggregate, detract from the value of
any material Business Asset of any Restricted Group Member
or impair the use thereof in the conduct of business of any
Restricted Group Member;
(k) deposits of cash securities in connection with any appeal,
review or contestation of any security or lien, or any
matter giving rise to any security or lien, described in
paragraph (j) above;
(l) any agreement or arrangement pursuant to which a Restricted
Group Member pledges cash to any insurer, guarantor, third
party contractor, public utility or Governmental Body made
in the ordinary course of business to secure the performance
of bids, tenders, contracts (other than contracts of
Indebtedness), leases, customs duties and other similar
obligations;
(m) liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of
combination of accounts or similar rights in the ordinary
course of conducting day-to-day banking business in relation
to deposit accounts or other funds maintained with a
creditor depository institution (collectively, "Banker's
Liens") provided that such Banker's Liens (A) do not relate
to any deposit account that is a dedicated cash collateral
account which is subject to restrictions against access by
the depositor or account holder, (B) do not relate to any
deposit account intended by the depositor or account holder
to provide collateral to the depository institution, and (C)
are not intended directly or indirectly to secure the
payment or performance of Indebtedness or any other
obligation;
(n) the reversionary interests of landlords under operating
leases of real property (that are not capital leases and do
not create Indebtedness) with a Restricted Group Member as
tenant;
(o) the tenancy rights of tenants under operating leases of real
property (that are not capital leases and do not create
Indebtedness) with a Restricted Group Member as landlord;
(p) the interests (including Liens in the property leased and
any insurance related thereto) of lessors under operating
leases of property (that are not capital leases and do not
create Indebtedness);
(q) Liens over specific items of property (as opposed to Liens
over all or any substantial part of the undertaking,
property and assets of a Restricted Group Member), excluding
the Capital Stock of any Restricted Group Member, in favour
of Unrelated Parties securing Indebtedness outstanding at
any time for the entire Restricted Group in an aggregate
amount not exceeding USD7,500,000;
(r) the Liens listed in Schedule 13.3.4;
(s) the Liens created by the Security; and
(t) such other Liens securing such obligations as may be
approved by the Required Lenders from time to time.
"Person" means an individual, corporation, company (limited, unlimited,
unlimited liability or other), limited liability corporation, other body
corporate, estate, limited or general partnership, trust, trustee, joint
venture, other legal entity, unincorporated association or Governmental Body.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA in
respect of which any Restricted Group Member or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer" as defined
in Section 3(5) of ERISA.
"Post-Closing Undertaking" means the post-closing undertaking of even date
herewith between the Borrower and the Agent regarding the unsatisfied
conditions precedent on the date hereof.
"Preferred Shares" means Capital Stock of a specified Person that may be
redeemed by that Person or that are retractable at the option of the holder.
"Put/Call Obligations" means any amount, actual or contingent, matured or
unmatured, which is owing by any Restricted Group Member to a Person that is
not a Restricted Group Member on account of the purchase, repurchase,
redemption, retraction or other acquisition of, or other distribution in
respect of, Capital Stock of a Restricted Group Member; provided that the
amounts referred to in this definition are payable in accordance with an
Acceptable LLC Agreement.
"Qualified Hedge Agreement" means (i) a Financial Hedge Agreement which is
entered into by a Restricted Group Member to protect that Restricted Group
Member against fluctuations in interest rates or currency exchange rates
relating to Debt of that Restricted Group Member and (ii) a spot or forward
foreign exchange contract entered into to pay or hedge the actual or
anticipated operating or capital expenditures, operating revenues or capital
receipts of a Restricted Group Member denominated in foreign currency.
"Qualified Hedge Counterparty" at any time means a Lender or Lender Hedging
Affiliate that is party to a Qualified Hedge Agreement at that time.
"Qualified Hedging Obligations" means the Indebtedness and other obligations
of each Restricted Group Member owing to the Finance Parties incurred under,
pursuant to or otherwise in respect of Qualified Hedge Agreements, including
any Guarantee thereof, and any item or part of any thereof. For certainty,
"Qualified Hedge Obligations" shall include interest accruing subsequent to
the commencement of, or which would have accrued but for the commencement of,
any Bankruptcy Proceeding, in accordance with and at the rate (including any
applicable default rate to the extent lawful) specified herein or in another
applicable Finance Document, whether or not such interest is an allowable
claim in such Bankruptcy Proceeding.
"Quotation Date" means, (i) in relation to any Interest Period, the day on
which quotations would ordinarily be given by prime banks in the London
interbank market for deposits in US Dollars for delivery on the first day of
that Interest Period and (ii) in relation to any Term, the day on which
quotations would ordinarily be given by banks listed in Schedule I, II and III
of the Bank Act (Canada) for bid rates for bankers' acceptances issued by
them; provided that, if, for any such Interest Period or Term, quotations
would ordinarily be given on more than one date, the Quotation Date for that
Interest Period or Term shall be the last of those dates. As of the date
hereof (A) the Quotation Date for an Interest Period relating to a Libor Loan
is two London Banking Days' prior to the first day of that Interest Period and
(B) the Quotation Date for the Term of an issue of Acceptances is the first
day of that Term.
"Rateable Share" of any Lender means:
(a) in relation to any outstanding Advance, the proportion borne
by such Lender's share of the Advance to the full amount of
such Advance;
(b) in relation to the Revolving Facility, the proportion borne
by such Lender's Revolving Commitment to the Total Revolving
Commitment; and
(c) in relation to the Credit Facilities or any other matter,
the proportion borne by such Lender's Commitment to the
Total Commitments.
"Reference Lender" means The Toronto-Dominion Bank acting in its capacity as
reference lender in relation to the Credit Facilities, or (as the context
requires) any replacement for such reference lender appointed pursuant to
Subsection 15.15.2.
"Registration" means any notice to or filing, recording or registration with
any Governmental Body having jurisdiction with respect to any specified
Person, transaction or event, or any of such Person's Business Affairs; and
"register" shall (to the extent the context so admits) be construed in like
manner.
"Regulation U" means Regulation U of the Board of Governors of the US Federal
Reserve System as from time to time in effect.
"Regulation X" means Regulation X of the Board of Governors of the US Federal
Reserve System as from time to time in effect.
"Repayment Notice" means a duly completed notice in the form of or to
substantially similar effect as Schedule 8.8 signed by the Borrower and
delivered to the Agent pursuant to Section 8.8.
"Reportable Event" means the occurrence of any of the events described in
Section 4043(c) of ERISA.
"Representative" of any Person means any director, officer, employee, agent,
legal counsel, accountant, financial advisor, expert, manager, consultant or
other representative appointed, engaged or employed by such Person.
"Required Lenders" means the Majority Lenders, except for those matters
specified in Subsection 15.18.2 as requiring the unanimous consent of all
Lenders, in which case it means all Lenders.
"Restricted Group" means the Borrower and (i) each Secure Products
International Group Member, (ii) each KBP Group Member, (iii) each other
present and future Wholly-owned Subsidiary of the Borrower, excluding the
Maxxcom Group, (iv) each Person referred to in Subsection 13.2.7(f) and (v)
other Subsidiaries of the Borrower as the Borrower may designate and the
Required Lenders may accept from time to time, and "Restricted Group Member"
means any of them.
"Restricted Group's Business" means the business engaged in by the Restricted
Group which is comprised of the Core Business and business activities
necessarily incidental thereto.
"Restricted Group's Facilities" means all real property and rights therein of
any Restricted Group Member and all buildings, plants, infrastructure and
other facilities located thereon and all other machinery and equipment owned,
leased, managed, controlled or operated by any Restricted Group Member or for
which any Restricted Group Member is otherwise obligated under Environmental
Law.
"Revolving Commitment" of any Lender means the maximum portion of the
Revolving Facility which such Lender has agreed to make available to the
Borrower as set out opposite its name under the "Revolving Commitment" column
in Schedule 1.1 "Commitments", or as set forth in any Loan Transfer Agreement,
as such amount may be modified from time to time pursuant to the provisions of
this Agreement.
"Revolving Facility" means the credit facility established in favour of the
Borrower under Article 2.
"Rollover" means (i) the continuation on the Period End Date of an outstanding
Libor Loan (or a portion thereof) for another Interest Period or (ii) a new
issue of Acceptances on the Period End Date of an outstanding issue of
Acceptances in an aggregate face amount equal to the aggregate face amount of
such outstanding issue of Acceptances (or a portion thereof) provided that the
entire Net Acceptance Proceeds derived from such new issue of Acceptances are
used to pay, to the extent thereof, such outstanding issue of Acceptances (or
portion thereof, as the case may be).
"Rollover Date" means a Business Day on which a Rollover of all or a portion
of a Libor Loan or an issue of Acceptances is made.
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.
"Sale/Lease-Back Transaction" means any transaction, series of transactions
(related or not) or arrangement pursuant to which Business Assets of a Person
are disposed of and are thereafter leased back, or are otherwise made
available for use, to that Person.
"Sales Taxes" means sales, transfer, turnover or value added taxes of any
nature or kind, including Canadian goods and services taxes and federal, state
and provincial sales and excise taxes.
"SDN List" is defined in Section 12.1.30(a).
"Secure Products International Group" means MDC USA Holdings Inc.,
▇▇▇▇▇▇-▇▇▇▇▇▇ [USA] Ltd., Metaca Corporation, Placard Pty Ltd., ▇▇▇▇▇▇ ▇▇▇▇▇▇
Canada Ltd. and their respective present and future Subsidiaries, and "Secure
Products International Group Member" means any of them.
"Secured Group Member" means a Restricted Group Member that has granted the
guarantees and Liens in favour of the Agent contemplated by Article 10.
"Secured Obligations" means Loan Obligations, Qualified Hedge Obligations and
any other Indebtedness and other obligations owing to the Finance Parties, and
any item or part of any thereof. For certainty, "Secured Obligations" shall
include interest accruing subsequent to the filing of, or which would have
accrued but for the filing of, a petition for or assignment in bankruptcy, in
accordance with and at the rate (including any rate applicable upon any
Default or Event of Default to the extent lawful) specified herein, whether or
not such interest is an allowable claim in such bankruptcy proceeding.
"Security" at any time means the Liens and guarantees created (or intended by
their express or implied terms to be created) by any of the Security
Documents.
"Security Documents" at any time means the agreements, documents and
instruments listed in Schedule 10.1 and each additional agreement, document
and instrument delivered to or for the benefit of the Finance Parties at or
before such time to secure or guarantee, directly or indirectly, the payment
or performance of any of the Secured Obligations.
"Senior Lenders" means the Lead Arranger and Sole Bookrunner, the Agent and
the Lenders, or (as the context so admits) each and any of them.
"Senior Officer" of any Person means the Chairman of the Board, the Vice
Chairman, the President, the Chief Executive Officer, the Chief Operating
Officer, Chief Financial Officer, Managing Director, an Executive Vice
President, the Treasurer, a Senior Vice President, a Vice President, the
Secretary or the Controller of such Person, or any other Representative of
such Person (including a Representative of another Person that is managing the
business of such Person) who performs the function normally expected of an
individual holding any of the aforesaid offices.
"Shareholders' Equity" at any time means the total amount of shareholders'
equity (as may be adjusted from time to time to reflect amortization of
intangible assets other than goodwill in accordance with US GAAP consistently
applied) as such amount would be classified on the consolidated balance sheet
of the Restricted Group prepared on a Modified Consolidated Basis as at such
time and as shown thereon. Notwithstanding the foregoing, "Shareholders'
Equity" shall exclude all convertible and subordinated debentures and other
like debt instruments.
"Software" means all computer programs and databases owned by or licensed to
any Restricted Group Member in whatever form and on whatever medium those
programs or databases might be expressed, fixed, embodied or stored from time
to time, including the object code and source code versions thereof and all
corrections, updates, enhancements, translations, modifications, derivations
and new versions thereof together with both the media upon or in which such
software and databases are expressed, fixed, embodied or stored (such as
disks, diskettes, tapes and semiconductor chips) and all flow charts, manuals,
instructions, documentation and other material relating thereto.
"Solvent" means, when used with respect to a Person, that (i) the fair
saleable value of the Business Assets of such Person is in excess of the total
amount of the present value of its liabilities (including for purposes of this
definition all liabilities (including loss reserves), whether or not reflected
on a balance sheet prepared in accordance with US GAAP and whether direct or
indirect, fixed or contingent, secured or unsecured, disputed or undisputed),
(ii) such Person is able to pay its debts or obligations in the ordinary
course as they mature and (iii) in relation to any Person incorporated or
formed under the laws of any jurisdiction that imposes limitations on the
legality, validity, binding effect or enforceability of any guarantee by
reason of a Person's unreasonably small capital (or equivalent or like
criteria), such Person does not have unreasonably small capital (or equivalent
or like criteria) to carry out its business as conducted and as proposed to be
conducted. For the purposes of this definition (1) "debt" means liability on a
"claim" and (2) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy or breach of performance if such
breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured. "Solvency" shall have a
correlative meaning.
"Spot Rate" as at any date with respect to the conversion of an amount in one
currency (the "original currency") to another currency (the "other currency")
means the noon spot rate of exchange quoted by the Bank of Canada on that date
(or the preceding Business Day, if such date is not a Business Day) for the
purchase of such original currency with such other currency.
"Stamping Fee" means the stamping fee payable to a Lender on an Acceptance at
the time that Acceptance is issued, calculated and payable in the manner
provided for in Section 5.6.
"Standby Instrument" means a Documentary Credit, Letter of Guarantee or
Standby Letter of Credit, as the context requires.
"Standby Instrument Disbursement" means any amount paid by the Issuing Bank
under or otherwise in respect of any Standby Instrument, including all amounts
which the Borrower is obligated to indemnify the Issuing Bank against pursuant
to Subsection 4.2.2.
"Standby Instrument Exposure" in relation to any Standby Instrument at any
time means the maximum amount remaining available to be drawn upon under that
Standby Instrument at that time.
"Standby Letter of Credit" means a standby letter of credit, including any
replacements, renewals and amendments, issued or deemed issued pursuant to
this Agreement.
"Statutory Prior Claims" means claims for unpaid wages, vacation pay, worker's
compensation, unemployment insurance premiums, pension plan contributions,
employee or non-resident withholding tax source deductions, unremitted Sales
Taxes, customs duties or similar statutory obligations secured by a Lien on
any Restricted Group Member's Business Assets ranking prior to or pari passu
with the Security.
"Subordinated Debt" means any Debt of any Restricted Group Member which is
unsecured, subordinated and postponed to the prior Payment in Full of the
Secured Obligations in a manner satisfactory in form and substance to the
Required Lenders.
"Subsidiary" of any Person (the "relevant party") at any time means and
includes (i) any Person that is Controlled by the relevant party and a
majority of whose Participating Capital Stock is at that time owned by the
relevant party directly or indirectly through Subsidiaries of the relevant
party and (ii) any other Person (A) the accounts of which are consolidated
with those of the relevant party in the relevant party's consolidated
financial statements prepared in accordance with US GAAP and (B) that is
Controlled by the relevant party. A Person shall be deemed to be a Subsidiary
of another Person if it is a Subsidiary of a Person that is that other's
Subsidiary. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of the Borrower.
"Swing Line" means the credit facility established in favour of the Borrower
under Article 3.
"Swing Line Advance" means an Advance to the Borrower made pursuant to the
Swing Line.
"Swing Line Amount" means CAD2,000,000, as such amount may be modified from
time to time pursuant to the provisions of this Agreement.
"Swing Line Commitment" means the maximum amount of the Swing Line which the
Swing Line Lender has agreed to make available to the Borrower pursuant to the
Swing Line in the Swing Line Amount.
"Swing Line Lender" means The Toronto-Dominion Bank acting in its capacity as
swing line lender under the Swing Line through its designated lending office
located in Toronto, or any replacement of such swing line lender that is a
Lender and is appointed pursuant to Subsection 15.15.3.
"Swing Line Loan" means a Loan owing to the Swing Line Lender under the Swing
Line.
"Take-Over Bid" means a "take-over bid" as defined in the Securities Act
(Ontario) except that all references to "Ontario" shall be amended to "any
jurisdiction in the world".
"Taxes" means all taxes of any kind or nature whatsoever including federal
large corporation taxes, provincial capital taxes, realty taxes (including
utility charges which are collectible like realty taxes), business taxes,
property transfer taxes, Income Taxes, Sales Taxes, levies, stamp taxes,
royalties, duties, and all fees, deductions, compulsory loans and withholdings
imposed, levied, collected, withheld or assessed as of the date hereof or at
any time in the future, by any Governmental Body of or within or any other
jurisdiction whatsoever having power to tax, together with penalties, fines,
additions to tax and interest thereon.
"Term" for any Advance by way of Acceptances means the period of one (1), two
(2), three (3) or six (6) months, as selected by the Borrower in a Borrowing
Request commencing on the Borrowing Date of such Advance, provided that any
Term that would otherwise end on a day which is not a Business Day shall be
extended or shortened in accordance with the Modified Following Business Day
Convention.
"Termination Event" means (a) a Reportable Event with respect to any Benefit
Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Benefit
Plan during a plan year in which the Borrower or such ERISA Affiliate was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA; (c) the
imposition of an obligation on the Borrower or any ERISA Affiliate under
Section 4041 of ERISA to provide affected parties written notice of intent to
terminate a Benefit Plan in a distress termination described in Section
4041(c) of ERISA or, with respect to any Non-US Pension Plan, written notice
to the trustees or fiduciaries of, or members in, such plan, or to a
Governmental Body of an intent to terminate such Non-US Pension Plan; (d) the
institution by the PBGC or any similar Governmental Body of proceedings to
terminate a Benefit Plan or any Non-US Pension Plan; (e) any event or
condition which could reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Benefit Plan; (f) a Governmental Body shall appoint or
institute proceedings to appoint a receiver to administer or wind up any
Non-US Pension Plan; or (g) the partial or complete withdrawal of the Borrower
or any ERISA Affiliate from a Multiemployer Plan or of any Restricted Group
Member from any Non-US Pension Plan.
"Test Period" at any time means (i) the Fiscal Quarter ending ▇▇▇▇▇ ▇▇, ▇▇▇▇,
(▇▇) the period of two (2) Fiscal Quarters ending June 30, 2004, (iii) the
period of three (3) Fiscal Quarters ending September 30, 2004 or (iv) the
period of four (4) consecutive Fiscal Quarters ending after September 30,
2004, as the case may be, most recently ended.
"Threshold Amount" at any time means USD2,000,000 (or the Equivalent Amount in
Canadian Dollars or other foreign currency).
"Total Commitment" means the total sum of the Commitments of the Lenders.
"Total Debt" means the total sum (without duplication) of all combined
Indebtedness of the Restricted Group determined on a Modified Consolidated
Basis.
"Total Debt/Total Capitalization Percentage" at any time means the product
(expressed as a percentage) obtained by multiplying (i) the fraction at that
time of (A) Total Debt divided by (B) the sum of (1) Total Debt plus (2)
Shareholders Equity multiplied by (ii) one hundred percent (100%).
"Total Debt/Adjusted EBITDA Ratio" for any Test Period means the ratio of (i)
Total Debt at the end of that Test Period divided by (ii) Adjusted EBITDA of
the Restricted Group for that Test Period.
"Total Exposure" means, with respect to a particular Finance Party at a
particular time, the total amount of the Finance Obligations owing to that
Finance Party at that time determined by that Finance Party and approved by
the Agent. For this purpose, the amount of Qualified Hedge Obligations in
relation to each Restricted Group Member shall be determined as the sum of the
Derivative Exposures (adding Positive Derivative Exposures and subtracting
Negative Derivative Exposures) under all Qualified Hedge Agreements to which
that Finance Party and Restricted Group Member are party.
"Total Revolving Commitment" means the total sum of the Revolving Commitments
of the Lenders.
"Transferee" has the defined meaning assigned in Subsection 16.10.4.
"Type" means, with respect to any Advance, its form as a Canadian Prime Rate
Loan, Libor Loan, US Base Rate Loan or an issue of Acceptances.
"UCP" means (i) the Uniform Customs and Practice for Documentary Credits (1993
Revision), ICC Publications 500 or (ii) the International Standby Practices -
ISP98, ICC Publication No. 590, as applicable.
"United States Dollars", "US Dollars" and the symbol "USD" each means dollars
which are the lawful currency of the United States of America.
"Unrelated Party" in relation to any Person (the "relevant party") means
another Person that deals at arm's length with the relevant party and is not
an Affiliate of the relevant party.
"US Bankruptcy Code" means Title 11 of the United State Code (11
U.S.C.ss.ss.101 et. seq.).
"US Base Rate" on any day means the variable nominal interest rate equal on
such day to the percentage rate per annum determined by the Agent (rounded up
to two (2) decimal places) to be the greater of (i) the rate of interest which
the Reference Lender establishes from time to time as the reference rate of
interest for determination of the interest rates it will charge for loans made
in US Dollars in Canada and which it refers to as its base rate (or any
equivalent or analogous such rate) or (ii) the sum of (A) the yearly rate of
interest to which the Federal Funds Rate is equivalent plus (B) one percent
(1%).
"US Base Rate Loan" means an Advance made under the Credit Facilities by way
of loan in United States Dollars on which interest shall be calculated in
accordance with the applicable provisions of this Agreement with reference to
the US Base Rate.
"US GAAP" means generally acceptable accounting principles (in the United
States) set forth in the opinions and pronouncements of the Accounting
Principles Board, the American Institute of Certified Public Accountants and
the Financing Accounting Standards Board or in such other statements by such
other entity as may be in general use by significant segments of the
accounting profession as in effect on the date hereof (unless otherwise
specified herein as in effect on another date or dates).
"US Publicly Traded Entity" means a Person (other than an individual) whose
securities are listed on a national securities exchange, or quoted on an
automated quotation system, in the United States, or a wholly-owned subsidiary
of such a Person.
"USA Patriot Act" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Pub. L. No. 107-56, 115 Stat. 272 (2001), as amended.
"Voting Capital Stock" means Capital Stock of a Person which carries voting
rights or the right to Control such Person under any circumstances, provided
that Capital Stock which carries the right to vote or Control conditionally
upon the happening of an event shall not be considered Voting Capital Stock
until the occurrence of such event and then only during the continuance of
such right to vote or Control.
"Waste" means ashes, garbage and refuse and includes domestic waste,
industrial waste, municipal refuse or such other wastes as are designated as
such under any Environmental Law.
"Wholly-Owned Subsidiary" of a Person (the "relevant party") means any
Subsidiary, all of the outstanding Capital Stock of which, shall at the time
be owned (except for director's qualifying shares) and Controlled, directly or
indirectly, by the relevant party or one or more Wholly-Owned Subsidiaries of
the relevant party, or by the relevant party and one or more Wholly-Owned
Subsidiaries of the relevant party. A Person shall be deemed to be a
Wholly-Owned Subsidiary of another Person if it is a Wholly-Owned Subsidiary
of a Person that is that other's Wholly-Owned Subsidiary.
"$" means CAD or USD, as the context requires.
"2000 ISDA Definitions" means the 2000 ISDA Definitions, as supplemented by
the Annex to the 2000 ISDA Definitions (June 2000 Version), as published by
the International Swaps and Derivatives Association, Inc.
1.2 Extended Meanings. To the extent the context so admits, any reference
in this Agreement to:
"agreement" shall be construed as any agreement, oral or written, any simple
contract, deed or specialty, and includes any ▇▇▇▇, ▇▇▇▇ of exchange,
indenture, instrument or undertaking.
"arm's length" shall be construed in the same manner it is used in the Income
Tax Act (Canada).
"change" shall be construed as change, modify, alter, amend, supplement,
extend, renew, compromise, novate, replace, terminate, release, discharge,
cancel, suspend or waive or (where the context so admits) the noun form of any
of the foregoing.
"dispose" shall be construed as lease, sell, transfer, license or otherwise
dispose of any property, or the commercial benefits of use or ownership of any
property, including the right to profit or gain therefrom, whether in a single
transaction or in a series of related transactions, and "disposed",
"disposition" and "disposal" shall be construed in like manner.
"fair market value" shall be construed as the highest price, expressed in
terms of money and moneys worth, available in an open and unrestricted market
between informed and prudent parties, each acting at arm's length, where
neither party is under any compulsion to act.
"guarantee" shall be construed as any guarantee, indemnity, letter of comfort
or other assurance made in respect of any Indebtedness, other obligation or
financial condition of another, including (i) any purchase or repurchase
agreement, (ii) any obligation to supply funds or invest in such other, (iii)
any keep-well, take-or-pay, through-put or other arrangement having the effect
of assuring or holding harmless another against financial loss, or maintaining
another's solvency or financial viability or (iv) any obligation under any
credit derivative; but shall exclude endorsements on notes, bills and cheques
presented to financial institutions for collection or deposit in the ordinary
course of business; and "guaranteed" and "guarantees" shall be construed in
like manner. Whenever in this Agreement the amount of any guarantee is
required to be determined or measured such amount shall be an amount equal to
the stated or determinable amount of the Indebtedness in respect of which such
guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming the guarantor is required
to perform thereunder) as determined by the guarantor in good faith or, if the
guarantee is expressly limited to a specific amount, such specified amount.
"include", "includes" and "including" shall be construed to be followed by the
statement "without limitation" and none of such terms shall be construed to
limit any word or statement which it follows to the specific items or matters
immediately following it or similar terms or matters.
"losses and expenses" shall be construed as losses, costs, expenses, damages,
penalties, Awards, Orders, Litigation, claims, claims over, demands and
liabilities, including any applicable court costs and legal fees and
disbursements on a full indemnity basis, and "loss and expense" shall be
construed in like manner.
"obligations" shall be construed as indebtedness, obligations, promises,
covenants, responsibilities, duties and liabilities (actual or contingent,
direct or indirect, matured or unmatured, now existing or arising hereafter),
whether arising by agreement or statute, at law, in equity or otherwise; and
"obliged", "obligation" and "obligated" shall be construed in like manner.
"rate of exchange" shall be construed so as to include any premiums or costs
payable in connection with any currency conversion being effected.
"receiver" shall be construed to include a privately appointed or court
appointed receiver or receiver and manager, interim receiver, liquidator,
trustee-in-bankruptcy, administrator, administrative receiver and any other
like or similar official.
"relevant interbank rate" shall be construed as (i) in relation to the funding
of Libor Loans, LIBOR and (ii) in relation to the funding of Floating Rate
Loans or Acceptances, (A) CDOR plus 0.10%, if denominated in Canadian Dollars
and (B) the Federal Funds Rate plus 0.10%, if denominated in US Dollars.
"rights" shall be construed as rights, titles, benefits, interests, powers,
authorities, discretions, privileges, immunities and remedies (actual or
contingent, direct or indirect, matured or unmatured, now existing or arising
hereafter), whether arising by agreement or statute, at law, in equity or
otherwise; and "right" shall be construed in like manner.
"set-off" means any right or obligation of set-off, compensation, offset,
combination of accounts, netting, retention, withholding, reduction, deduction
or any similar right or obligation, or (as the context requires) any exercise
of any such right or performance of such obligation.
"successor" of a Person (the "relevant party") shall be construed so as to
include (i) any amalgamated or other body corporate of which the relevant
party or any of its successors is one of the amalgamating or merging body
corporates, (ii) any body corporate resulting from any court approved
arrangement of which the relevant party or any of its successors is party,
(iii) any Person to whom all or substantially all the Business Assets of the
relevant party is transferred, (iv) any body corporate resulting from the
continuance of the relevant party or any successor of it under the laws of
another jurisdiction of incorporation and (v) any successor (determined as
aforesaid or in any similar or comparable procedure under the laws of any
other jurisdiction) of any Person referred to in clause (i), (ii), (iii) or
(iv) of this definition. Each reference in this Agreement to any party hereto
or any other Person shall (where the context so admits) include its
successors.
1.3 References to Agreements. Each reference in this Agreement to any
agreement (including this Agreement and any other defined term that is an
agreement) at any time shall be construed so as to include such agreement
(including any attached schedules, appendices and exhibits) and each change
thereto made at or before that time; provided that no change to this Agreement
shall be effective unless it is made in compliance with Section 15.18.
1.4 References to Statutes. Each reference in this Agreement to any code,
statute, regulation, official interpretation, directive or other legislative
enactment of any Canadian, United States or other foreign jurisdiction
(including any political subdivision of any thereof) at any time shall be
construed so as to include such code, statute, regulation, official
interpretation, directive or enactment and each change thereto made at or
before that time.
1.5 References to Time. Each reference in this Agreement to any time of
the day shall, unless otherwise stated, be construed as a reference to Eastern
Standard Time.
1.6 Headings, etc. The division of this Agreement into Articles, Sections
and Subsections and the insertion of headings are for the convenience of
reference only and shall not affect the construction or interpretation of this
Agreement. The Article and Section headings in this Agreement are included
solely for convenience, are not intended to be full or accurate descriptions
and shall not be considered part of this Agreement. The terms "this
Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section, Subsection, paragraph,
subparagraph, clause or other portion of this Agreement.
1.7 Number and Gender. In this Agreement, words in the singular (including
defined terms) include the plural and vice versa (the necessary changes being
made to fit the context) and words in one gender include all genders.
1.8 Accounting Principles. Wherever in this Agreement reference is made to
generally accepted accounting principles, such reference means US GAAP. All
accounting terms not otherwise defined herein are used with the meanings
assigned to them in conformity with US GAAP. Where the character or amount of
any asset or liability or item of revenue or expense is required to be
determined, or any consolidation or other accounting computation is required
to be made, for the purposes of this Agreement, including the contents of any
certificate to be delivered hereunder, such determination, consolidation or
computation shall, unless the parties otherwise agree or the context otherwise
require, be made in accordance with US GAAP applied on a consistent basis.
1.9 Rounding. Unless otherwise stated, all amounts determined pursuant to
this Agreement shall be rounded up to the nearest cent.
ARTICLE 2
THE REVOLVING FACILITY
2.1 Establishment of Revolving Facility. Upon and subject to the terms
and conditions of this Agreement, the Lenders hereby establish a committed
revolving operating credit facility in favour of the Borrower to finance the
day to day working capital requirements of the Restricted Group arising in the
ordinary course of their operations, as well as for other general corporate
purposes, including Business Acquisitions, but excluding (unless the Required
Lenders otherwise consent) the financing of any Hostile Take-Over Bid. Each
Lender severally (and not jointly) agrees to make its share available in each
Borrowing to be made under the Revolving Facility in accordance with its
Rateable Share of the Revolving Facility. The Borrower shall so apply all
amounts borrowed by it under the Revolving Facility.
2.2 Facility Limit.
2.2.1 General. On each Borrowing Date under the Revolving Facility, the
Borrower shall ensure that the Outstanding Amount of all Advances under the
Revolving Facility does not exceed the Total Revolving Commitment.
2.2.2 Initial Total Revolving Commitment. The initial Total Revolving
Commitment is CAD23,000,000. Except for temporary excesses arising from the
Agent's allocation of Acceptances in accordance with Subsection 15.20.1 or,
subject to Section 8.5, from foreign exchange fluctuations, the Borrower shall
ensure that the aggregate Outstanding Amount of each Lender's share in all
Advances outstanding under the Revolving Facility shall not exceed its
Revolving Commitment at any time.
2.2.3 Reductions. The Total Revolving Commitment shall reduce by the amount
of each reduction in the Total Revolving Commitment made pursuant to Sections
8.1, 8.2, 8.3 and 8.6 and accordingly (except for a reduction pursuant to
Section 8.6) the Revolving Commitment of each Lender shall reduce by the
proportion of such reduction which such Lender's Revolving Commitment bears to
the Total Revolving Commitment. Each Affected Lender's Revolving Commitment
shall reduce to the extent required pursuant to Section 8.6.
2.3 Availability. The Borrower may borrow, repay and reborrow Advances
under the Revolving Facility during the Availability Period on a revolving
basis by way of Canadian Prime Rate Loans, Libor Loans denominated in US
Dollars, US Base Rate Loans and Acceptances. In addition, the Borrower may
borrow by way of Standby Instruments in accordance with the provisions of
Article 4.
2.4 Drawdown Requests. The Borrower must deliver a Drawdown Request to
the Agent to obtain a Drawdown under the Revolving Facility at the times and
stipulating the information specified below:
(a) for a Floating Rate Loan, before 10:00 a.m. on the Business
Day before the proposed Drawdown Date specifying the
principal amount (which must be $1,000,000 or a whole number
multiple of $100,000 in excess thereof) and proposed
Drawdown Date (which must be a Business Day falling within
the Availability Period);
(b) for a Libor Loan, before 10:00 a.m. on the Business Day
before the Quotation Date for the Interest Period commencing
on the proposed Drawdown Date specifying the principal
amount (which must be USD1,000,000, or a whole number
multiple of USD100,000 in excess thereof) and the proposed
Interest Period (which must commence within the Availability
Period and end on or before the Maturity Date);
(c) for an issue of Acceptances, as required in accordance with
Article 5; and
(d) for the issue of a Letter of Guarantee or Standby Letter of
Credit, in accordance with Article 4.
2.5 Proceeds of Drawdown. The proceeds of each Drawdown by way of Loan
under the Revolving Facility when received by the Agent, shall, subject to
Sections 8.9 and 14.2, be advanced by bank transfer to the credit of the
Borrower's Accounts. The proceeds from Acceptances will be dealt with in
accordance with Article 5.
ARTICLE 3
THE SWING LINE
3.1 Establishment of Swing Line. The Swing Line Lender hereby establishes
a committed revolving operating credit facility in favour of the Borrower to
finance the day-to-day working capital requirements of the Restricted Group
arising in the ordinary course of their operations, as well as for other
general corporate purposes. The Borrower shall so apply all amounts borrowed
by it under the Swing Line.
3.2 Swing Line Amount.
3.2.1 General. The Borrower shall ensure that the aggregate Outstanding
Amount of all Advances under the Swing Line does not exceed the Swing Line
Amount at any time.
3.2.2 Initial Swing Line Amount. The initial Swing Line Amount is
CAD2,000,000.
3.2.3 Reductions. The Swing Line Amount shall reduce to nil on the Maturity
Date.
3.3 Overdraft Basis. Each Advance (other than a Standby Instrument, but
including a Swing Line Advance deemed to be made under Section 4.4 to
reimburse a Standby Instrument Disbursement) under the Swing Line shall be
made by the Swing Line Lender on an overdraft basis by debiting the Borrower's
Accounts. The amount of such overdraft from time to time shall be deemed to be
a Canadian Prime Rate Loan (to the extent such debit balance is denominated in
Canadian Dollars) and a US Base Rate Loan (to the extent such debit balance is
denominated in US Dollars).
3.4 Standby Instruments. The Swing Line Lender will act as Issuing Bank
and issue all Standby Instruments (a) that are Letters of Guarantee or Standby
Letters of Credit having an initial Outstanding Amount of less than
CAD1,000,000 or (b) that are Documentary Credits, in each case, in accordance
with the provisions of Article 4.
ARTICLE 4
STANDBY INSTRUMENTS
4.1 Issuance of Standby Instruments.
4.1.1 Original Issuance. The following provisions shall apply to the issuance
of Standby Instruments under the Credit Facilities:
(a) The Borrower may request a Lender to issue a Standby
Instrument in Canadian Dollars or US Dollars or, with the
prior consent of the Agent and that Lender, any other
currency. Standby Instruments with an initial Outstanding
Amount of CAD1,000,000 or less shall be issued by the Swing
Line Lender under the Swing Line. Letters of Guarantee and
Standby Letters of Credit with an initial Outstanding Amount
equal to or greater than CAD1,000,000 shall be issued under
the Revolving Facility by a Lender selected by the Borrower
after consultation with the Agent.
(b) The aggregate Outstanding Amount of all Standby Instruments
under the Swing Line and the Revolving Facility together may
not exceed CAD3,000,000 at any time.
(c) Following the occurrence of a Default, the Issuing Bank
shall also have the right, in its sole discretion, (i) to
amend any Standby Instrument or (ii) with the consent of the
Required Lenders, to renew or extend the expiry date of any
Standby Instrument.
(d) The Borrower may not request the issuance of any Standby
Instrument if (i) the aggregate Outstanding Amount of all
Advances under the Swing Line would, after the issuance of
the Standby Instrument in question, exceed the Swing Line
Amount or (ii) the aggregate Outstanding Amount of all
Advances under the Revolving Facility would, after the
issuance of the Standby Instrument in question, exceed the
Total Revolving Commitment.
(e) The Borrower shall deliver to the Agent a Borrowing Request
for any requested Standby Instrument and attach the proposed
form and content of such Standby Instrument no less than
three (3) Business Days before the requested issuance of the
Standby Instrument. Such Borrowing Request must comply with
the provisions of this Section 4.1 and specify (i) the
stated amount of the Standby Instrument requested, (ii) the
requested date of issuance of such Standby Instrument, which
must be a Business Day falling within the Availability
Period, (iii) the date on which such requested Standby
Instrument is to expire, which must be before the Maturity
Date, unless the Required Lenders consent to a later expiry
date, and (iv) whether the requested Standby Instrument is a
Documentary Credit, Letter of Guarantee or Standby Letter of
Credit. Upon request from the Issuing Bank, the Borrower
shall also execute and deliver such application, indemnity
and other documents as the Issuing Bank shall reasonably
require consistent with its prevailing practice relative to
the issuance of bank guarantees, documentary credits and
standby credits.
(f) Upon receipt of a Borrowing Request in compliance with this
Section 4.1, the Agent shall promptly remit a copy thereof
(including attachments) to the Issuing Bank. On the
requested issue date, but subject to Section 14.2, the
Issuing Bank shall issue a Standby Instrument in accordance
with the Issuing Bank's usual and customary business
practices, subject to such changes thereto as the Issuing
Bank may reasonably require and subject further to receipt
of any other signed documents requested by the Issuing Bank
pursuant to paragraph (e) above. In addition, any amendment
or renewal of any Standby Instrument shall be deemed to be
an issuance of a new Standby Instrument and shall be subject
to the same requirements as are set forth above with respect
to original issuance (including delivery of a Borrowing
Request to the Agent). The Issuing Bank shall give the Agent
prompt written notice of each issuance or renewal of each
Standby Instrument.
4.2 Reimbursement by the Borrower.
4.2.1 The Borrower unconditionally and irrevocably authorizes the Issuing
Bank to pay the amount of any demand made on the Issuing Bank in accordance
with the terms of any Standby Instrument on demand without requiring proof of
the Borrower's agreement that the amount so demanded was due and
notwithstanding that the Borrower may dispute the validity of any such demand
or payment.
4.2.2 The Borrower shall indemnify and save the Issuing Bank harmless from
and against any and all payments and losses and expenses which the Issuing
Bank may make, suffer or incur arising in any manner whatsoever out of the
issuance of any Standby Instrument, including the making of, or refusal to
make, any payments demanded thereunder (including any court costs and legal
costs on a full indemnity basis incurred in connection with any proceedings to
restrain the Issuing Bank from making, or to compel the Issuing Bank to make,
any such payment), save that the Borrower shall not be obliged to so indemnify
the Issuing Bank to the extent such losses and expenses are determined by a
Final Judgment to have directly resulted from the willful misconduct or gross
negligence of the Issuing Bank. This indemnity shall be unconditional, shall
not be subject to any qualification or exception whatsoever, and shall not be
lessened, invalidated or otherwise prejudiced for any reason whatsoever
including by reason of (i) any lack of validity or enforceability of the
Standby Instrument, (ii) any claim, set-off, defence or other right the
Borrower may have against the beneficiary of the Standby Instrument, including
any claim that a demand for payment under the Standby Instrument is fraudulent
or (iii) any of the matters referred to in Section 4.3.
4.2.3 Notwithstanding any other provision of this Agreement to the contrary,
any payment made by the Issuing Bank in good faith in response to any demand
for payment under any Standby Instrument shall be deemed to have been properly
made, shall be binding upon the parties hereto and shall oblige the Borrower
to reimburse and indemnify the Issuing Bank for such payment under Subsection
4.2.2; provided that the Borrower shall not be obliged to so reimburse and
indemnify the Issuing Bank if (a) it has been determined pursuant to a Final
Judgment that (i) such payment was made by the Issuing Bank without any
legally binding obligation under such Standby Instrument to do so, (ii) such
payment was made through the gross negligence or willful misconduct of the
Issuing Bank, (iii) the beneficiary under such Standby Instruments was not
entitled to receive such payment under the underlying agreements related to
that Standby Instrument and (iv) the Borrower is not enriched by such payment
and (b) the Borrower takes such actions as may be required to vest in the
Issuing Bank the Borrower's rights against the beneficiary of that Standby
Instrument to recover such payment.
4.3 Issuing Bank Not Liable.
4.3.1 The Issuing Bank shall not have any obligation, responsibility or
liability for, or duty to inquire into, the sufficiency, authorization,
execution, signature, endorsement, correctness, genuineness or legal effect of
any certificate or other document presented to it pursuant to any Standby
Instrument and the Borrower assumes all risks with respect to the same,
including all risks of the acts or omissions of any beneficiary of any Standby
Instrument with respect to the use by any beneficiary of any Standby
Instrument. Without limiting the generality of the foregoing, the Issuing Bank
shall not have any obligation, responsibility or liability:
(a) for the validity or genuineness of certificates or other
documents delivered under or in connection with any Standby
Instrument that appear on their face to be in order, even if
such certificates or other documents should in fact prove to
be invalid, fraudulent or forged;
(b) for errors, omissions, interruptions or delays in
transmission or delivery of any messages by mail, cable,
telegraph, telecopy, e-mail, internet, wireless or
otherwise, whether or not they are in code;
(c) for errors in translation or for errors in interpretation of
technical terms or for errors in the calculation of amounts
demanded under any Standby Instrument;
(d) for any failure or inability by the Issuing Bank or anyone
else to make payment under any Standby Instrument as a
result of any Applicable Law or by reason of any control or
restriction rightfully or wrongfully exercised by any Person
asserting or exercising governmental or paramount powers;
(e) for any other consequences arising from causes beyond the
control of the Issuing Bank; or
(f) for any error, neglect or default of any correspondent of
the Issuing Bank or of any advising, confirming, negotiating
or paying bank,
and none of the above shall change, lessen, invalidate or otherwise prejudice
any of the rights of the Issuing Bank hereunder or the obligations of the
Borrower under Subsection 4.2.2.
4.3.2 Save to the extent expressly provided otherwise in this Article 4,
the rights and obligations between the Issuing Bank and the Borrower with
respect to each Standby Instrument shall be determined in accordance with the
applicable provisions of the UCP.
4.4 Reimbursement Advance.
4.4.1 If the Borrower fails to pay or reimburse the Issuing Bank for the
amount of any Standby Instrument Disbursement on the date such Standby
Instrument Disbursement is made, the Borrower shall be deemed to have
requested and received an Advance from the Issuing Bank in a principal amount
equal to such unreimbursed Standby Instrument Disbursement (if denominated in
Canadian Dollars or US Dollars) or in the equivalent amount in Canadian
Dollars of such unreimbursed Standby Instrument Disbursement determined at the
rate of exchange quoted to the Agent by the Issuing Bank (if such unreimbursed
Standby Instrument Disbursement is denominated in other foreign currency).
4.4.2 Any Advance deemed to have been made under Subsection 4.4.1 in respect
of any Standby Instrument issued by the Swing Line Lender under the Swing Line
shall be deemed to have been made under the Swing Line and shall be repaid by
the Borrower to the Swing Line Lender accordingly.
4.4.3 Any Advance deemed to have been made under Subsection 4.4.1 in respect
of any Standby Instrument issued by any Lender under the Revolving Facility
shall be deemed to have been made by that Lender on behalf of all Lenders
under the Revolving Facility by way of Canadian Prime Rate Loan (if
denominated in Canadian Dollars) or US Base Rate Loan (if denominated in US
Dollars) and shall be repaid by the Borrower to the Lenders accordingly.
4.5 Standby Instrument Fees.
4.5.1 The Borrower shall pay an issuance fee to the Lenders on the
Outstanding Amount of each Letter of Guarantee and Standby Letter of Credit
issued under the Revolving Facility payable in Canadian Dollars which shall be
in the amount determined by the Agent to be equal to the sum of the products
for each day during the term of such Letter of Guarantee or Standby Letter of
Credit of (a) the Outstanding Amount thereof at the end of the day multiplied
by (b) the Applicable Margin divided by 365. Such issuance fee shall be paid
quarterly in arrears on the third Business Day of each calendar quarter until
the Outstanding Amount of such Letter of Guarantee or Standby Instrument is
reduced to nil, at which time the final payment of such standby fee shall be
paid.
4.5.2 The Borrower shall pay a fronting fee to the Lender issuing any
Letter of Guarantee or Standby Letter of Credit under the Revolving Facility
on the Outstanding Amount of each such Letter of Guarantee and Standby Letter
of Credit payable in Canadian Dollars which shall be in the amount determined
by the Agent to be equal to the sum of the products for each day during the
term of such Letter of Guarantee or Standby Letter of Credit of (a) the
Outstanding Amount thereof at the end of the day multiplied by (b) one-tenth
of one percent (0.10%) divided by 365. Such fronting fee shall be paid
quarterly in arrears on the third Business Day of each calendar quarter until
the Outstanding Amount of such Letter of Guarantee or Standby Instrument is
reduced to nil, at which time the final payment of such fronting fee shall be
paid.
4.5.3 The Borrower shall pay an issuance fee to the Swing Line Lender for
its own account in advance on the issuance (including any renewal) by it of
each Letter of Guarantee and Standby Letter of Credit under the Swing Line for
the period from and including the date of issuance of such Standby Instrument
to and including the stated expiry date thereof, based on the Outstanding
Amount of the Standby Instrument on the date of issuance. Such issuance fee
shall be payable in Canadian Dollars. The issuance fee payable in respect of
each such Standby Instrument shall be determined as the product obtained by
multiplying (i) the initial Outstanding Amount of such Standby Instrument by
(ii) the Applicable Margin and by (iii) the fraction of the number of days in
the term of such Standby Instrument divided by 365.
4.5.4 The Borrower shall pay an issuance fee to the Swing Line Lender for
its own account in advance on the issuance (including any renewal) by it of
each Documentary Credit under the Swing Line determined in accordance with
Swing Line Lender's prevailing scheduled rates for issuing documentary credits
of the type requested for the account of customers of comparable
creditworthiness.
4.5.5 In addition to the fees payable under Subsections 4.5.1, 4.5.2, 4.5.3
and 4.5.4, the Borrower shall pay the Issuing Bank of any Standby Instrument
for its own account fees determined in accordance with the Issuing Bank's
prevailing scheduled rates for services (including advices, amendments,
confirmations and renewals) provided by the Issuing Bank in relation to
Standby Instruments.
4.5.6 All amounts paid to the Issuing Bank pursuant to this Section 4.5
shall be retained by the Issuing Bank for its own account.
4.6 Reimbursement by Lenders.
4.6.1 Reimbursement of Issuing Bank. If any Advance is deemed to have been
made by the Issuing Bank on behalf of the Lenders under the Revolving Facility
pursuant to Subsection 4.4.3, the Issuing Bank shall promptly notify the Agent
who in turn will promptly notify each of the Lenders whereupon each Lender
shall within two (2) Business Days of receipt of such notice pay to the Agent
for the account of the Issuing Bank such Lenders' Rateable Share of such
Advance, together with interest thereon from the date such Advance was deemed
to have been made at the relevant interbank rate.
4.6.2 Obligation is Unconditional. The obligation of each Lender under
Subsection 4.6.1 is unconditional, shall not be subject to any qualification
or exception whatsoever and shall be performed in accordance with the terms
and conditions of this Agreement under all circumstances including:
(a) any lack of validity or enforceability of the Borrower's
obligations under Section 4.2 or 4.4;
(b) any of the matters referred to in Subsection 4.3.1;
(c) the occurrence of any Default or the exercise of any rights
by the Agent under Section 14.2; and
(d) the absence of any demand for payment being made, any proof
of claim being filed, any Loan Document being enforced, any
Litigation being commenced or any Award being obtained by
the Issuing Bank against the Borrower.
4.6.3 Failure by Lender to Reimburse. If a Lender (a "Defaulting Lender")
fails to make payment on the due date therefor of any amount due from it for
the account of the Issuing Bank pursuant to Subsection 4.6.1 (the balance
thereof for the time being unpaid being referred to in this Subsection 4.6.3
as an "overdue amount") then until the Issuing Bank has received payment of
the overdue amount (plus interest as provided below) in full (and without in
any way limiting the rights of the Issuing Bank in respect of such failure):
(a) the Issuing Bank shall be entitled to receive any payment
which the Defaulting Lender would otherwise have been
entitled to receive in respect of the Credit Facilities or
otherwise in respect of any Finance Document; and
(b) the overdue amount shall bear interest payable by the
Defaulting Lender to the Issuing Bank at the rate payable by
the Borrower in respect of the Loan Obligations which gave
rise to such overdue amount.
ARTICLE 5
BANKERS' ACCEPTANCES UNDER THE REVOLVING FACILITY
5.1 Notice and Term. The Borrower may deliver a Borrowing Request to the
Agent (which must be received by the Agent before 10:00 a.m. on the second
Business Day before the Quotation Date for the Term requested in the Borrowing
Request to be effective) requesting that Drafts be accepted under the
Revolving Facility on any proposed Borrowing Date and stating the aggregate
face amount and the term applicable to such Drafts. The term of such Drafts
must be a period of one (1), two (2), three (3) or six (6) months expiring on
or before the Maturity Date.
5.2 Face Amount of Drafts. The aggregate face amount of an issue of Drafts
to be accepted on any particular Borrowing Date must be CAD1,000,000 or a
whole number multiple of CAD100,000 in excess thereof. The face amount of each
Draft must be a whole number multiple of CAD100,000.
5.3 Power of Attorney. In order to facilitate issues of Acceptances
pursuant to this Agreement, the Borrower authorizes each Lender, and for this
purpose appoints each Lender its lawful attorney with full right of
substitution and delegation, to complete, sign and endorse Drafts issued in
accordance with a Borrowing Request delivered to the Agent pursuant to Section
5.1 on its behalf in handwritten or by facsimile or mechanical signature or
otherwise and, once so completed, signed and endorsed, and following
acceptance of them as Acceptances under this Agreement, then discount,
negotiate or deliver such Acceptances in accordance with the provisions of
this Article 5. Drafts so completed, signed, endorsed, negotiated or delivered
on behalf of the Borrower by any Lender shall bind the Borrower as fully and
effectively as if so performed by an authorized officer of the Borrower.
5.4 Restrictions.
5.4.1 General. The Agent shall have the discretion to restrict the term and
maturity date of an issue of Acceptances and the number of issues of
Acceptances outstanding at any one time.
5.4.2 Number of Issues. Unless the Agent notifies the Borrower to the
contrary, the maximum number of issuances of Acceptances outstanding at any
time is limited to seven (7).
5.4.3 Marketability. The obligations of the Lenders to accept and discount
any requested issue of Acceptances pursuant to this Agreement are also subject
to the Agent's determination that no BA Disruption Event (as defined in
Subsection 7.6.2) has occurred.
5.5 Discount and Sale of Acceptances.
5.5.1 Purchase at Discount. Subject to Sections 5.10 and 5.11, each Lender
shall accept Drafts and purchase and take delivery of its Rateable Share of
each issue of Acceptances for its own account on the Borrowing Date of such
Acceptances at the purchase price equal to the face amount of such Acceptances
less an amount equal to the amount that yields to such Lender (excluding the
Stamping Fee) an interest rate per annum equal to such Lender's BA Reference
Rate for the applicable Term of such Acceptances. Each Lender shall be
entitled to deduct from the Acceptance Proceeds derived from the purchase by
it of Acceptances the Stamping Fee payable to it pursuant to Section 5.6. The
Net Acceptance Proceeds for any Acceptances purchased by a Lender shall be
determined in accordance with the following formula:
[ ]
Net Acceptance Face amount of [ 1 ]
Proceeds = Acceptances X [---------------- - (AM x n/365) ]
[1 + (BA Reference ]
[ Rate x n/365) ]
Where n is the number of days to elapse in the Term of the Acceptances, BA
Reference Rate is expressed as a decimal and AM is the Applicable Margin
expressed as a decimal.
5.5.2 Payment and Advance of Net Acceptance Proceeds. Except as provided in
Section 6.3 and Subsection 15.20.7, each Lender shall remit the Net Acceptance
Proceeds of its Rateable Share of each issue of Acceptances to the Agent on
the Borrowing Date of that issue of Acceptances in exchange for delivery of
such Acceptances. Such Net Acceptance Proceeds, when received by the Agent,
shall, subject to Sections 8.9 and 14.2, be advanced by bank transfer to the
credit of the Borrower's Accounts.
5.5.3 Dealings with Acceptances. Each Lender may at any time and from time
to time purchase, hold, sell, rediscount or otherwise dispose of any
Acceptance issued by it and no such dealing shall change the Borrower's
obligations under Section 5.7.
5.6 Stamping Fee. The Borrower shall pay a stamping fee to each Lender on
the issuance of each Acceptance by such Lender which shall be in an amount
equal to the product of (a) the face amount of such Acceptance multiplied by
(b) the actual number of days to elapse in the Term of such Acceptance
multiplied by (c) the fraction of the Applicable Margin divided by 365.
5.7 Payment of Acceptances. Unless made subject to a Conversion or a
Rollover, the Borrower shall pay to each Lender the full face amount of each
Acceptance accepted by such Lender for its account on the Period End Date of
such Acceptance. If an Acceptance matures and the Borrower has not made such
payment or provided for its Conversion or Rollover, such Acceptance shall be
converted on its Period End Date into a Canadian Prime Rate Loan in a
principal amount equal to its full face amount.
5.8 Waivers. The Borrower shall not claim from any Lender any days of
grace for the payment at maturity of any Drafts presented and accepted by such
Lender pursuant to this Agreement. In addition, the Borrower waives demand,
presentment for payment, protest, noting of protest, dishonour, notice of
dishonour and any other notice or defence to payment which might otherwise
exist if for any reason an Acceptance is held by any Lender in its own right
at the maturity thereof.
5.9 Notice of Maturing Acceptances. The Borrower shall give the Agent,
before 10:00 a.m. on the second Business Day before the Period End Date of any
issue of Acceptances, a Repayment Notice or a Borrowing Request in respect of
such Acceptances requesting a Conversion or Rollover on such Period End Date
in order to permit each Lender to organize its internal funding requirements
to fund the payment of the face amount of such Acceptances to the respective
holders thereof upon or following maturity.
5.10 BA Equivalent Advances. If a Lender does not customarily accept
Drafts for the purpose of subsequent sale as a bankers' acceptance (a
"Non-Acceptance Lender"), each time the Borrower gives a Borrowing Request for
an issue of Acceptances, such Non-Acceptance Lender shall, in lieu of
accepting and purchasing Acceptances pursuant to Section 5.5, either purchase
Discount Notes pursuant to Section 5.11 or make a loan advance in Canadian
Dollars to the Borrower (a "BA Equivalent Advance") in the amount equal to the
Net Acceptance Proceeds which would be derived from a hypothetical sale of
Drafts accepted by it ("Notional Acceptances") in the aggregate face amount of
its Rateable Share of such requested issue of Acceptances at a discount rate
that yields to such Non-Acceptance Lender (excluding the Stamping Fee) an
interest rate per annum equal to such Non-Acceptance Lender's BA Reference
Rate. Any BA Equivalent Advance shall be repayable on the Period End Date of
such issue of Acceptances. A Non-Acceptance Lender shall be entitled to deduct
from the amount of its BA Equivalent Advance to be remitted to the Agent
pursuant to Subsection 5.5.2 an amount equal to the Stamping Fee determined in
accordance with Section 5.6 that would have been payable to it with respect to
the Notional Acceptances corresponding to the BA Equivalent Advance. For the
purposes of this Agreement each reference to Acceptances shall be deemed to
include, where relevant, BA Equivalent Advances, with the necessary changes
being made to fit the context.
5.11 Discount Notes. A Non-Acceptance Lender may require the Borrower to
issue a Discount Note to the Non-Acceptance Lender, in lieu of a Draft, and
such Non-Acceptance Lender shall, in lieu of accepting and purchasing
Acceptances pursuant to Section 5.5 or making BA Equivalent Advances under
Section 5.10, purchase Discount Notes upon the same terms and conditions as
apply to purchases of Acceptances. For the purposes of this Agreement each
reference to Acceptances shall be deemed to include, where relevant, Discount
Notes, with the necessary changes being made to fit the context.
ARTICLE 6
CONVERSIONS AND ROLLOVERS
6.1 Conversions.
6.1.1 Generally. Subject to the last sentence of this Section 6.1, the
Borrower may request the Lenders to convert:
(a) at any time, a Floating Rate Loan under the Revolving
Facility or a portion thereof into a different Type of
Advance (other than a Standby Instrument) available under
the Revolving Facility;
(b) on a Period End Date, a Libor Loan under the Revolving
Facility or a portion thereof into a different Type of
Advance (other than a Standby Instrument) available under
the Revolving Facility; or
(c) on a Period End Date, an issue of Acceptances under the
Revolving Facility into a Loan under the Revolving Facility,
upon delivering a Borrowing Request to the Agent specifying both the amount of
the Advance to be converted and the amount and Type of the requested resulting
Advance. The relevant provisions of this Agreement applicable to a Drawdown
and availability of the same Type as the Advance which will result from the
Conversion (as well as any portion of the Advance which is not being
converted) must be satisfied to effect any such requested Conversion
(including the applicable notice provisions contained in Section 2.4).
6.1.2 Same Currency Denomination. If the Borrower has requested a
Conversion of an Advance to a Type of Advance denominated in the same
currency, no payment shall be required to be made by the Borrower to the
Lenders on such Conversion, save to the extent required by Section 6.3 if the
resulting Advance is an issue of Acceptances.
6.1.3 Different Currency Denomination. If the Borrower has requested a
Conversion of an Advance to a Type of Advance denominated in a different
currency, the Borrower shall repay the Advance (or relevant portion) being
converted and, subject to the foregoing provisions of this Section 6.1 and
receipt by the Agent of such repayment, the Lenders shall, subject to Section
14.2, make the Type of Advance requested on the Conversion to the Borrower on
the Conversion Date.
6.1.4 Acceptances. If the Borrower has requested a Conversion into an issue
of Acceptances, each Lender shall, except as otherwise provided in Sections
5.10 and 5.11 and subject to the foregoing provisions of this Section 6.1,
accept Drafts and purchase and take delivery of its Rateable Share of the
resulting issue of Acceptances for its own account on the Conversion Date in
the manner provided for in Section 6.3.
6.2 Rollovers.
6.2.1 Libor Loans. At or before 10:00 a.m. on the Business Day before the
Quotation Date for each Libor Loan, unless the Borrower was entitled to
deliver, and has previously delivered, a Borrowing Request requesting the
Lenders to convert the relevant Libor Loan into another Type of Advance in
accordance with Section 6.1 or a Repayment Notice, the Borrower shall, if it
is entitled to do so in accordance with the provisions of this Section 6.2,
deliver a Borrowing Request to the Agent requesting a Rollover and selecting
the next Interest Period applicable to the relevant Libor Loan, which new
Interest Period shall commence on the current Period End Date of such Libor
Loan. If the Borrower fails or is not so entitled to deliver any such request
or notice to the Agent, then the Borrower shall repay the relevant Libor Loan
to the Lenders on the current Period End Date.
6.2.2 Acceptances. At or before 10:00 a.m. two (2) Business Days before the
Period End Date of an issue of Acceptances, unless the Borrower was entitled
to deliver, and has delivered, to the Agent a Borrowing Request requesting a
Conversion in accordance with Section 6.1 or a Repayment Notice, the Borrower
shall, if it is entitled to do so in accordance with the foregoing provisions
of this Section 6.2, deliver a Borrowing Request to the Agent requesting a
Rollover and selecting the Term applicable to the resulting issue of
Acceptances. If the Borrower requests such a Rollover and is so entitled to do
so, each Lender shall accept Drafts and purchase and take delivery of its
Rateable Share of the resulting issue of Acceptances (or make a BA Equivalent
Advance or discount Discount Notes, as the case may be) for its own account on
the Rollover Date in the manner provided for in Section 6.3. The provisions of
Section 5.7 shall apply if the Borrower fails to deliver any such requests or
notice.
6.3 Conversions to and Rollovers of Acceptances. On the Conversion Date
of any Advance being converted to an issue of Acceptances, and on the Rollover
Date of any issue of Acceptances, each Lender shall accept Drafts and purchase
and take delivery of its Rateable Share of the resulting issue of Acceptances
(or make a BA Equivalent Advance or discount Discount Notes, as the case may
be) for its own account in the manner provided for in Section 5.5, save that
in lieu of remitting the Net Acceptance Proceeds of its Rateable Share of such
resulting issue of Acceptances to the Agent on the Borrowing Date of such
resulting issue of Acceptances, each Lender shall retain such Net Acceptance
Proceeds for its own account and the Borrower shall pay to each Lender on that
Borrowing Date the amount by which the aggregate face amount of each Lender's
Rateable Share of such resulting issue of Acceptances exceeds such Net
Acceptance Proceeds.
6.4 Not a Repayment. Neither a Rollover nor a Conversion of an Advance
shall constitute a repayment by the Borrower, but rather shall constitute a
continuation or change in the form of credit being extended by the Lenders to
the Borrower. The Borrower shall repay each Advance resulting from any
Rollover or Conversion to the Lenders in accordance with the provisions of
this Agreement as if such Advance had resulted from a Drawdown on the Rollover
Date or Conversion Date.
ARTICLE 7
INTEREST AND FEE CALCULATIONS AND CHANGES IN CIRCUMSTANCES
7.1 Interest.
7.1.1 Canadian Prime Rate Loans. The Borrower shall pay the Lenders
interest on the outstanding principal amount of each Canadian Prime Rate Loan
borrowed by it from each of them under the Credit Facilities calculated and
payable from the Borrowing Date of such Canadian Prime Rate Loan until
converted or deemed converted to another Type of Advance in accordance with
the provisions hereof or due to be repaid hereunder, as applicable, at a
percentage rate per annum equal to the sum of (a) the Canadian Prime Rate plus
(b) the Applicable Margin.
7.1.2 US Base Rate Loans. The Borrower shall pay the Lenders interest on
the outstanding principal amount of each US Base Rate Loan borrowed by it from
each of them under the Credit Facilities calculated and payable from the
Borrowing Date of such US Base Rate Loan until converted or deemed converted
to another Type of Advance in accordance with the provisions hereof or due to
be repaid hereunder, as applicable, at a percentage rate per annum equal to
the sum of (a) the US Base Rate plus (b) the Applicable Margin.
7.1.3 Libor Loans. The Borrower shall pay the Lenders interest on the
outstanding principal amount of each Libor Loan denominated in US Dollars
borrowed by it under the Revolving Facility calculated and payable from each
Borrowing Date of such Libor Loan until converted or deemed converted to
another Type of Advance in accordance with the provisions hereof or due to be
repaid hereunder, as applicable, at a percentage rate per annum during each
Interest Period relative to such Libor Loan equal to the sum of (i) LIBOR for
that Interest Period plus (ii) the Applicable Margin.
7.1.4 Overdue Amounts. If any sum payable by the Borrower under any
provision of this Agreement is not paid when due and payable hereunder
(whether on its stipulated due date, on demand, on acceleration or otherwise),
the Borrower shall pay interest to the Senior Lenders entitled to such overdue
sum on the outstanding balance thereof at the percentage rate of interest per
annum equal to the sum of (i) the Canadian Prime Rate, if the overdue sum is
denominated in Canadian Dollars, or (as applicable) the US Base Rate, if the
overdue sum is denominated in US Dollars plus (ii) the Applicable Margin for
Floating Rate Loans plus if an Event of Default has not occurred, to the
extent permitted by applicable law, (iii) two percent (2%) per annum.
7.2 Fees in Respect of Acceptances. The Borrower shall pay to each Lender
a Stamping Fee on the relevant Borrowing Date with respect to each Draft
issued by the Borrower and accepted by that Lender (or each BA Equivalent
Advance made or Discount Note discounted by that Lender, as the case may be)
under the Revolving Facility calculated and payable at the time and in the
manner specified in Article 5.
7.3 Commitment Fee.
7.3.1 Revolving Facility. The Borrower shall pay to the Lenders a
commitment fee in relation to their respective Revolving Commitments based on
the unused portion of the Revolving Facility payable in Canadian Dollars which
shall be in the amount determined by the Agent to be equal to the sum of the
products for each day during the Availability Period of the Revolving Facility
of (a) the amount by which the Total Revolving Commitment exceeds the
aggregate Outstanding Amount of all Advances under the Revolving Facility at
the end of the day multiplied by (b) the fraction of the Commitment Fee Rate
divided by 365.
7.3.2 Swing Line. The Borrower shall pay to the Swing Line Lender for its
own account a commitment fee in relation to the Swing Line Commitment based on
the unused portion of the Swing Line payable in Canadian Dollars which shall
be in the amount determined by the Swing Line Lender to be equal to the sum of
the products for each day during the Availability Period of the Swing Line of
(a) the amount by which the Swing Line Amount exceeds the aggregate
Outstanding Amount of all Advances under the Swing Line at the end of the day
multiplied by (b) the fraction of the Commitment Fee Rate divided by 365.
7.3.3 Payment Dates. The first payment of each of the commitment fees
payable under Subsections 7.3.1 and 7.3.2 for the period commencing on the
date of this Agreement and ending on June 30, 2004 will be made on July 6,
2004. Thereafter the Borrower shall pay these commitment fees quarterly in
arrears for each calendar quarter on the third Business Day of the following
calendar quarter. The final payment of each of these commitment fees will be
made on the Maturity Date or any earlier date of termination of the Total
Revolving Commitment or the Swing Line Commitment, as applicable.
7.4 Interest and Fee Calculations and Payments.
7.4.1 General. Interest payable on any amount under this Agreement shall
be:
(a) calculated upon the daily outstanding balance of such amount
from (and including) the date it is first outstanding or
advanced until (but excluding) the date it is paid in full
to the Senior Lenders entitled thereto;
(b) paid in the same currency in which such amount is
denominated; and
(c) payable in arrears on each Interest Payment Date relative
thereto and (if any relevant portion of the Total Commitment
has been cancelled or otherwise reduced to nil) on the date
the final principal amount thereof is paid in full based
upon the actual number of days elapsed in the relevant
period of calculation.
Interest payable on each such amount shall be payable both before and after
demand, default and judgment at the applicable rate set out in Section 7.1
with interest on overdue interest at the same rate (except to the extent
provided otherwise in Subsection 7.1.4).
7.4.2 Day Count Fraction. The rates of interest per annum payable
on or in respect of Floating Rate Loans are expressed on the basis of a 365 or
366 day year, as applicable. Each Commitment Fee, CDOR and BA Reference Rate
are expressed on the basis of a 365 day year. The rates of interest per annum
payable on or in respect of Libor Loans are expressed on the basis of a 360
day year.
7.4.3 Interest Act Compliance. For the purposes of the Interest
Act (Canada), any rate of interest made payable under the terms of this
Agreement at a rate or percentage (the "Contract Rate") for any period that is
less than a consecutive 12 month period, such as a 360 or 365 day basis, (the
"Contract Rate Basis") is equivalent to the yearly rate or percentage of
interest determined by multiplying the Contract Rate by a fraction, the
numerator of which is the number of days in the consecutive 12 month period
commencing on the date such equivalent rate or percentage is being determined
and the denominator of which is the number of days in the Contract Rate Basis.
7.4.4 No Deemed Reinvestment. The principle of deemed reinvestment
of interest shall not apply to any interest calculation under this Agreement.
7.4.5 Rates are Nominal Rates. The rates of interest stipulated in
this Agreement are intended to be nominal rates and not effective rates or
yields.
7.4.6 Changes in the Floating Rate. Changes in each Floating Rate
will cause an immediate adjustment of interest payable on or in respect of the
corresponding Floating Rate Loans outstanding from time to time, without the
necessity of any notice to the Borrower.
7.5 Increased Costs. If any Change in Law:
(a) subjects any Finance Party (or its Holding Body Corporate)
to, or causes the withdrawal or termination of a previously
available exemption with respect to, any Taxes or changes
the basis of taxation of payments due to any Finance Party
or increases any Taxes payable by any Finance Party (or its
Holding Body Corporate) on or in respect of payments of
principal, interest, fees or other amounts payable by the
Borrower to that Finance Party under this Agreement or any
other Finance Document (other than the Finance Party's Own
Taxes);
(b) imposes, modifies or deems applicable any reserve,
liquidity, cash, margin, special deposit, deposit insurance
or assessment, or any other regulatory or similar
requirement against assets held by, or deposits with or for
the account of, or loans or commitments by, or any other
acquisition of funds for loans by, any Finance Party, (or
its Holding Body Corporate), or on any unutilized portion of
any Credit Facility, or on any obligation of any Finance
Party under any Finance Document;
(c) imposes on any Finance Party (or its Holding Body Corporate)
any Taxes on reserves or deemed reserves in respect of the
undrawn portion of any Credit Facility;
(d) requires any Finance Party (or its Holding Body Corporate)
to maintain any capital adequacy or additional capital
requirement (including a requirement which affects that
Finance Party's (or its Holding Body Corporate's) allocation
of capital resources to its obligations) in respect of any
Credit Facility, its Rateable Share in any Advance, any
Qualified Hedge Agreement, this Agreement or that Finance
Party's obligations hereunder or under any other Finance
Document, or imposes any other condition or requirement with
respect to the maintenance by any Finance Party (or its
Holding Body Corporate) of a contingent liability with
respect to any Credit Facility, its Rateable Share in any
Advance or any Qualified Hedge Agreement; or
(e) imposes on any Finance Party (or its Holding Body Corporate)
any other condition or requirement with respect to this
Agreement, any other Finance Document or a Credit Facility
or any Qualified Hedge Agreement,
and such Finance Party (the "Affected Finance Party"), acting reasonably,
determines (which determination shall be conclusive and bind the Borrower)
that such occurrence has the effect of:
(f) increasing the cost to the Affected Finance Party (or its
Holding Body Corporate) of agreeing to make or making,
maintaining or funding its Rateable Share in any Advance,
any Qualified Hedge Agreement or any portion of any thereof;
(g) reducing the net income received by the Affected Finance
Party (or its Holding Body Corporate) in respect of this
Agreement, any Credit Facility, its Rateable Share in any
Advance, any Qualified Hedge Agreement or any portion of any
thereof;
(h) directly or indirectly reducing the effective return to the
Affected Finance Party (or its Holding Body Corporate) under
any Finance Document on its overall capital as a result of
the Affected Finance Party entering into such Finance
Document or as a result of any of the transactions or
obligations contemplated by such Finance Document; or
(i) causing the Affected Finance Party to make any payment or to
forego any interest, fees or other return on or calculated
by reference to any sum received or receivable by that
Finance Party under any Finance Document,
then, upon demand from time to time being made to the Borrower by the Agent on
behalf of the Affected Finance Party accompanied in each case by a certificate
of the Affected Finance Party documenting the relevant calculations of the
compensation being claimed by the Affected Finance Party, the Borrower shall
forthwith pay to the Affected Finance Party such additional amounts as are set
out in each such certificate in order to fully compensate the Affected Finance
Party (or its Holding Body Corporate) for such additional cost, reduction,
payment, foregone interest or other return.
7.6 Market Disruption.
7.6.1 Libor Loans. If at any time prior to the commencement of a proposed
Interest Period any Lender determines (which determination shall be conclusive
and bind the Borrower) that:
(a) by reason of circumstances affecting the London interbank
market, or any bank participants therein, adequate and fair
means do not exist for ascertaining the rate of interest
with respect to a Libor Loan during the proposed Interest
Period;
(b) deposits in the currency of any Libor Loan are not being
offered to that Lender in the London interbank market in the
ordinary course of business;
(c) the making or continuing of the Rateable Share of that
Lender in any Libor Loan during the proposed Interest Period
has been made impracticable by the occurrence of any change
in national or international financial, political or
economic conditions or currency exchange rates or exchange
control, or an event (including an act of terrorism) which
materially and adversely affects the London interbank
market;
(d) LIBOR for the proposed Interest Period does not accurately
reflect the effective cost to that Lender of funding its
Rateable Share in any Libor Loan for the proposed Interest
Period; or
(e) the Agent is unable to determine LIBOR for the proposed
Interest Period of the Libor Loan,
(a "Libor Disruption Event"), then that Lender (the "Affected Lender") may
give notice of such determination to the Agent who will promptly notify the
Borrower. Thereafter, and until the Agent notifies the Borrower and the
Affected Lender that the Libor Disruption Event no longer exists or no longer
applies, the Borrower's right to require such Affected Lender to make its
Rateable Share of any such Libor Loan available in the manner requested shall
be suspended and the Affected Lender shall, subject to Section 7.7, instead
make its Rateable Share available by way of an advance in US Dollars which
shall bear interest payable in the same manner as any US Base Rate Loan.
7.6.2 Acceptances. If at any time on or prior to the proposed first day of
the Term of a proposed issue of Acceptances the Agent determines (which
determination shall be conclusive and bind the Borrower) that:
(a) the issuance or discount of any Acceptances for the proposed
Term thereof has been made impossible or impracticable by
reason of the occurrence of any event affecting the Canadian
money markets or any national or international financial,
political, terrorist or economic event;
(b) there does not exist a normal money market in Canada for the
purchase and sale of bankers' acceptances or such money
market has been disrupted by the occurrence of an
extraordinary event or an act of terrorism; or
(c) the Agent is unable to determine CDOR for the proposed Term
of the proposed issue of Acceptances,
(a "BA Disruption Event") then the Agent will promptly notify the Borrower and
each of the other Lenders of such determination. Thereafter, and until the
Agent notifies the Borrower and the Lenders that the BA Disruption Event no
longer exists or applies, the Borrower's right to request an Advance by way of
Acceptances shall be suspended and any Borrowing Request given by the Borrower
with respect to any proposed issue of Acceptances that has not yet been made
shall be deemed to be replaced by a Borrowing Request for a Canadian Prime
Rate Loan in the same Outstanding Amount as the requested issue of
Acceptances.
7.7 Illegality. If at any time any Lender determines (which determination
shall be conclusive and bind the Borrower) that any Change in Law has made it
unlawful or impossible for that Lender to make, fund or maintain its Rateable
Share in any Advance or to give effect to its obligations in respect of such
Advance (an "Affected Advance"), that Lender (the "Affected Lender") will
promptly notify the Agent who will promptly notify the Borrower. Upon giving
such notice the obligation of the Affected Lender to make or continue its
Rateable Share in any Affected Advance shall be suspended for so long as such
condition exists. Thereafter, and until the Agent notifies the Borrower
otherwise, the Borrower shall not have the right to require such Affected
Lender to make its Rateable Share of such Affected Advance available in the
manner requested. Rather, except as otherwise provided in the next sentence,
such Rateable Share shall be made available by way of an advance in the same
currency which shall bear interest payable in the same manner as any Canadian
Prime Rate Loan (if it is denominated in Canadian Dollars) or US Base Rate
Loan (if it is denominated in US Dollars) from the expiry of the applicable
Interest Period or Term of Acceptances. If, however, the Affected Advance is a
Canadian Prime Rate Loan or a US Base Rate Loan, the Borrower shall forthwith
prepay the Affected Lender's Rateable Share of such Affected Advance and the
Affected Lender shall not be required to make its Rateable Share of such
Affected Advance available in any manner. If the Affected Advance is a Standby
Instrument, the Borrower shall forthwith pay to the Agent, for the account of
the Issuing Bank, the Affected Lender's Rateable Share of such Affected
Advance to be applied in prepayment of the Borrower's obligations under
Subsection 4.2.2 in respect of such Affected Lender's Rateable Share of the
Affected Advance until the Affected Advance expires or is drawn upon,
whereupon the Issuing Bank shall account to and, subject to Section 14.2,
return to the Borrower any overpayment, together with interest thereon from
the date it is paid to the Issuing Bank until the Affected Advance expires or
is drawn upon at the Issuing Bank's prevailing interest rate applicable to
deposits of comparable amount for a term or terms agreed upon between the
Borrower and the Issuing Bank.
7.8 Withholding Taxes Generally.
7.8.1 No Withholding; Gross-Up Requirement. Subject to Subsection 7.8.4,
each payment required to be made by the Borrower under each Finance Document
shall be made without set-off or counterclaim, free and clear of, and without
deduction or withholding for or on account of, any Tax, except to the extent
such deduction or withholding is required by any applicable law, as modified
by the administrative practice of any relevant Governmental Body, then in
effect. To the extent and each time the Borrower is so required to deduct or
withhold Tax from any such payment to or for the account of any Finance Party
(the "Affected Finance Party"), then the Borrower will:
(a) promptly notify the Agent of such requirement;
(b) pay to the relevant Governmental Body when due the full
amount required to be deducted or withheld (including the
full amount of Tax required to be deducted or withheld from
any additional amount paid by the Borrower to or for the
account of the Affected Finance Party under this Subsection
7.8.1);
(c) promptly forward to the Agent an official receipt (or a
certified copy), or other documentation reasonably
acceptable to the Agent, evidencing such payment to such
Governmental Body; and
(d) pay to the Affected Finance Party, in addition to the
payment to which the Affected Finance Party is otherwise
entitled under such Finance Document, such additional amount
as is necessary to ensure that the net amount actually
received by the Affected Finance Party (free and clear of
any such Tax, whether assessed against the Borrower or the
Affected Finance Party) will equal the full amount the
Affected Finance Party would have received had no such
deduction or withholding been required.
7.8.2 Indemnity. If the Borrower fails to pay to the relevant Governmental
Body when due any Tax that it was required to deduct or withhold under
Subsection 7.8.1 in respect of any payment to or for the benefit of any
Finance Party under any Finance Document or fails to promptly furnish the
Agent with the documentation referred to in Subsection 7.8.1(c), the Borrower
shall forthwith on demand indemnify such Finance Party on a full indemnity
after-Tax basis from and against any Taxes (including interest and penalties),
losses and expenses which such Finance Party may suffer or incur as a result
of such failure.
7.8.3 Indemnity for Additional Income Tax. The Borrower shall also
indemnify each Finance Party on a full indemnity after-Tax basis, for any
additional Taxes on net income that such Finance Party may be obliged to pay
as a result of the payment of additional amounts under this Section 7.8.
7.8.4 Finance Party's Own Taxes. The provisions of Subsection 7.8.1 shall
not apply to Finance Party's Own Taxes.
ARTICLE 8
REPAYMENT AND PREPAYMENT
8.1 Repayment of each Credit Facility.
8.1.1 Maturity Date for the Revolving Facility. The Borrower shall repay to
each Lender on the Maturity Date for the Revolving Facility such Lender's
Rateable Share of each outstanding Advance made to the Borrower under the
Revolving Facility. The Total Commitment shall permanently reduce to zero on
the Maturity Date for the Revolving Facility.
8.1.2 Maturity Date of the Swing Line. The Borrower shall repay to the
Swing Line Lender on the Maturity Date for the Swing Line each outstanding
Swing Line Advance. The Swing Line Commitment shall reduce to zero on the
Maturity Date for the Swing Line.
8.2 Voluntary Reductions of each Credit Facility. The Borrower shall have
the right at any time and from time to time to permanently cancel, without
premium or penalty, all or any unused portion of the Total Commitment. Subject
to the next sentence, such right may only be exercised by the Borrower
delivering a Cancellation Notice to the Agent specifying the proposed
effective date of cancellation (which must be no less than 30 days
thereafter), each Credit Facility affected, and the amounts of each of the
Total Revolving Commitment and Swing Line Commitment to be cancelled (which
must be, in the case of the Revolving Facility, a multiple of CAD1,000,000).
No reduction of the Total Revolving Commitment below the amount of
CAD2,000,000 shall be permitted pursuant to this Section 8.2 unless the Swing
Line Commitment has been reduced to nil or it is reduced at the same time by
the same amount. The Total Commitment (and each of the Total Revolving
Commitment and the Swing Line Commitment affected by the cancellation) shall
permanently reduce on the effective date of each such cancellation in the
amount so cancelled. Each reduction in the Revolving Facility pursuant to this
Section 8.2 shall rateably reduce the Revolving Commitments of the Lenders.
8.3 Mandatory Reductions of each Credit Facility.
8.3.1 Asset Disposals. At the end of each Fiscal Quarter, commencing with
the Fiscal Quarter ending September 30, 2004, (a "Determination Date") the
Borrower shall determine the amount, if any, (the "Asset Disposal Reduction
Amount") by which the aggregate Net Asset Disposal Proceeds derived from
disposals of Business Assets which took place during the Fiscal Quarter ending
six months before the Determination Date exceeded the aggregate amount spent
by the Restricted Group on Business Acquisitions acquired from Unrelated
Parties plus the Cash Capital Expenditures spent by the Restricted Group
during the six (6) month period following each such Business Asset disposal.
The Borrower shall promptly notify the Agent that it has made this
determination and provide the Agent with full particulars of its computations
relative thereto. If the Asset Disposal Reduction Amount exceeds fifty percent
(50%) of the Threshold Amount the Total Commitment shall reduce on the fifth
(5th) Business Day after the Determination Date by an amount equal to such
excess. For the purposes of this Subsection 8.3.1, "Cash Capital Expenditures"
means (without duplication) any expenditure paid in cash that is not derived
from Indebtedness (other than under this Agreement) that, in conformity with
US GAAP, would be required to be classified as a capital expenditure. Cash
Capital Expenditures, however, excludes expenditures made in connection with
the replacement or restoration of buildings, fixtures or equipment to the
extent reimbursed or financed from insurance or expropriation proceeds.
8.3.2 Debt Issues. Each time any Restricted Group Member receives the
proceeds of any issuance of Indebtedness, other than Indebtedness listed in
paragraphs (a), (b), (d), (e) and (f) of Section 13.2.1, the Borrower shall
promptly notify the Agent of the amount of such proceeds and the Total
Commitment shall reduce on the fifth (5th) Business Day thereafter by the
amount of such proceeds (or the Equivalent Amount in Canadian Dollars if such
proceeds are denominated in foreign currency).
8.3.3 Equity Issues. Each time any Restricted Group Member receives the
proceeds of any issuance of Capital Stock, the Borrower shall promptly notify
the Agent (a) of the amount of such proceeds and (b) whether or not the
Borrower proposes to use such proceeds to make a Business Acquisition
permitted under Section 13.2.8. To the extent such proceeds are not so used
within a period of 30 days of receipt, the Total Commitment shall reduce on
the fifth (5th) Business Day thereafter by the amount of such proceeds (or the
Equivalent Amount in Canadian Dollars if such proceeds are denominated in
foreign currency).
8.3.4 Insurance Proceeds. Each time any Restricted Group Member receives
proceeds from any policy of insurance in excess of fifty percent (50%) of the
Threshold Amount that is not applied as promptly as is commercially reasonable
to repair or replace Business Assets insured by such policy, the Borrower
shall promptly notify the Agent and the Total Commitment shall reduce on the
fifth (5th) Business Day thereafter by the amount of such proceeds (or the
Equivalent Amount in Canadian Dollars if such proceeds are denominated in
foreign currency).
8.3.5 Maxxcom Refinancing. The Total Commitment shall reduce to nil on the
date the Indebtedness of Maxxcom under the existing second amended and
restated credit agreement dated as of July 11, 2001 to which The
Toronto-Dominion Bank is party is repaid or refinanced.
8.3.6 IPO of Secure Products International Group. The Total Commitment
shall reduce to nil on the date Capital Stock in any Secure Products
International Group Member is sold to the public in an initial public
offering, either directly or indirectly such as by way of an income trust
offering by an income trust owning Capital Stock in any Secure Products
International Group Member.
8.3.7 Reduction in Commitments. Each reduction in the Total Commitment
pursuant to this Section 8.3 shall rateably reduce each Commitment of each
Lender.
8.4 Mandatory Repayments of Credit Facilities. On the date of each
reduction of each Commitment of each Lender pursuant to Section 8.1, 8.2, 8.3
or 8.6, the Borrower shall repay to such Lender such amount on account of such
Lender's Rateable Share of Advances made to the Borrower under each applicable
Credit Facility as may be required to ensure that the Outstanding Amount of
such Lender's Rateable Share of all Advances under the relevant Credit
Facility does not exceed its relevant Commitment at that time after giving
effect to that reduction. Such Lender shall apply any such amount so repaid as
follows:
(a) first, to repay its Rateable Share of Loans under the
relevant Credit Facility;
(b) second, if such repayment is made in respect of the
Revolving Facility, to prepay to the Lender the obligations
of the Borrower under Section 5.7 in respect of Acceptances
issued (or BA Equivalent Advances made or Discount Notes
discounted, as the case may be) for the Borrower's account
under the Revolving Facility; and
(c) third, to be paid to the Issuing Bank in prepayment of such
Lender's Rateable Share of the Borrower's obligations under
Subsection 4.2.2 in respect of outstanding Standby
Instruments until such Standby Instruments expire or are
drawn upon, whereupon the Issuing Bank shall account to the
Borrower for the amount so paid to it and, subject to
Section 14.2, return to the Borrower any overpayment.
8.5 Facility Excesses by Reason of Foreign Currency Fluctuations.
8.5.1 Revolving Facility. If and each time the Agent determines (which
determination shall be conclusive and bind the Borrower, absent manifest
error) that the Outstanding Amount of all Advances under the Revolving
Facility exceeds the Total Revolving Commitment by more than two percent (2%)
by reason of fluctuations in exchange rates, the Agent may request (or if such
excess is more than five percent (5%) of the Total Revolving Commitment shall
request) the Borrower to repay the entire excess. Within five (5) Business
Days of the receipt of any such request, the Borrower shall repay to the
Lenders such Advances outstanding under the Revolving Facility as may be
required to ensure that such entire excess is eliminated.
8.5.2 Swing Line. If and each time the Swing Line Lender determines (which
determination shall be conclusive and bind the Borrower, absent manifest
error) that the Outstanding Amount of all Advances under the Swing Line
exceeds the Swing Line Amount by reason of fluctuations in exchange rates, the
Swing Line Lender may request (or if such excess is more than five percent
(5%) of the Swing Line Amount shall request) the Borrower to repay the entire
excess. Within five (5) Business Days of the receipt of any such request, the
Borrower shall repay to the Swing Line Lender such Advances outstanding under
the Swing Line as may be required to ensure that such entire excess is
eliminated.
8.6 Prepayment of Affected Lenders. The Borrower shall have the right to
permanently cancel without premium or penalty all, but not part, of each
Commitment of each Affected Lender provided that no Default has occurred. Such
right may only be exercised by the Borrower delivering a notice to the Agent
advising of such cancellation and specifying the effective date of
cancellation which must be no less than five (5) Business Days after and no
later than 30 days after the relevant Lender became an Affected Lender. The
Borrower shall prepay the Affected Lender's Rateable Share of all outstanding
Advances on such effective date of cancellation, the Affected Lender's
Commitments shall be reduced to nil and such Affected Lender shall be released
from its obligations to lend hereunder. Unless such Affected Lender is
replaced pursuant to Subsection 15.15.2, the Swing Line Amount and the Total
Revolving Commitment shall reduce by the respective amounts of the reduction
in such Affected Lender's Swing Line Commitment and Revolving Commitment.
8.7 Voluntary Repayments before the Maturity Date. The Borrower shall
have the right at any time and from time to time to repay all or any portion
of each Loan made to it under each Credit Facility which, in the case of a
Libor Loan must be made on its current Period End Date. In the case of the
Revolving Facility, such right may only be exercised if the Borrower delivers
a Repayment Notice to the Agent specifying the proposed repayment date (which
must be no less than five (5) Business Days thereafter) and the amount of such
Loan to be repaid (which must be in a principal amount of CAD1,000,000 or a
multiple of $100,000 in excess thereof). The Borrower shall repay such Loan on
such repayment date to the extent specified in such Repayment Notice.
8.8 Repayment Notice. The Borrower shall deliver a Repayment Notice to
the Agent at least five (5) Business Days before any required repayment is
made pursuant to this Agreement.
8.9 Netting of Payments. If on any date amounts (other than interest and
fees) would be due and payable under the Revolving Facility in the same
currency by the Borrower to the Lenders and by the Lenders to the Borrower,
then, on such date, unless the Agent notifies the Lenders stating that netting
is not to apply to such payments, the obligations of each such party to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by the Borrower
to the Lenders exceeds the aggregate amount that would otherwise have been
payable by the Lenders to the Borrower or vice versa, such obligations shall
be replaced by an obligation upon whichever of the Borrower or the Lenders
would have had to pay the larger aggregate amount to pay to the other the
excess of the larger aggregate amount over the smaller aggregate amount.
8.10 Place of Payment of Principal, Interest and Fees.
8.10.1 Payments to Senior Lenders Generally. Each payment of principal of,
or interest or fees computed on, any Advance and each other amount owing by
the Borrower under or otherwise in respect of any Loan Document, except for
payments made in respect of the Swing Line, shall be made by the Borrower to
the Agent for the account of the relevant Senior Lenders in the currency in
which such Advance or other amount is denominated no later than 10:00 a.m.
(local time in the place of payment) in immediately available, freely
transferable, cleared funds for value on the due date (or if such due date is
not a Business Day on the Business Day next following) to the credit of the
Agent's Accounts.
8.10.2 Payments under the Swing Line. Each payment of principal of, or
interest or fees computed on, any Swing Line Advance and each other amount
owing by the Borrower under or otherwise in respect of the Swing Line, shall
be made by the Borrower to the Swing Line Lender in the currency in which such
Swing Line Advance or other amount is denominated no later than noon (local
time in the place of payment) in immediately available, freely transferable,
cleared funds for value on the due date (or on the next Business Day if such
due date is not a Business Day) to the credit of the Borrower's Accounts
maintained with that Swing Line Lender.
ARTICLE 9
CONDITIONS PRECEDENT TO BORROWING
9.1 Conditions Precedent to First Drawdown. The Borrower shall not be
entitled to request its first Drawdown under either Credit Facility unless the
conditions set out in Section 9.2 with respect to such Drawdown have been
satisfied (or waived by the Required Lenders pursuant to Section 9.4 to permit
such Drawdown to take place) and the Lenders shall not be obliged to make the
first Drawdown under any Credit Facility until the Agent has confirmed to the
Borrower and the Lenders that the Agent has received (or the Required Lenders
have waived receipt pursuant to Section 9.4) on or before the date the first
Drawdown is requested all of the following in form and substance satisfactory
to the Agent:
(a) a Certificate of each Restricted Group Member listed in
Schedule 10.1 (i) attaching true copies of (A) the
Constitutional Documents of such Restricted Group Member and
(B) all necessary internal corporate, partnership, trust
and/or other management action taken by such Restricted
Group Member to authorize the execution, delivery and
performance of each Finance Document and the creation of the
Liens and the consummation of the transactions contemplated
thereby and (ii) as to incumbency and true signatures of its
Senior Officers and such other matters as the Agent may
reasonably require;
(b) original (i) certificate of status, compliance or good
standing or similar certificate with respect to each
Restricted Group Member listed in Schedule 10.1 for its
jurisdiction of incorporation or formation and each
jurisdiction in which any material part of its Business
Assets are located or it carries on any material part of the
Restricted Group's Business and (ii) reporting issuer
certificate from the Ontario Securities Commission for the
Borrower;
(c) original copies of each of the Finance Documents duly
executed by each party thereto, together with any Collateral
being perfected by possession by delivery to the Agent
pursuant to any Security comprised therein;
(d) certified copies of the insurance policies and/or
certificates of insurance evidencing the insurance required
to be maintained by the Restricted Group under Section
13.1.11;
(e) certified copies of all Authorizations required to enable
each Restricted Group Member listed in Schedule 10.1 to
execute, deliver, incur and perform its obligations under
each Loan Document to which it is a party and to create the
Liens and consummate the transactions contemplated thereby;
(f) evidence that all Registrations and other actions as may be
necessary or desirable in the judgment of the Lenders'
Counsel to perfect, preserve and protect the Security and
its priority have been effected;
(g) opinions from the Borrower's Counsel addressed to the
Finance Parties and the Lenders' Counsel with the exception
of the opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
whose opinion may be addressed solely to the Finance
Parties, in respect of each Restricted Group Member listed
in Schedule 10.1, the Finance Documents, the Security and as
such other matters as the Agent or Lenders' Counsel may
reasonably require;
(h) a Compliance Certificate for the Test Period ended March 31,
2004 giving pro forma effect to the Business Acquisitions
and disposals of Business Assets which have taken place
during such Test Period;
(i) discharges and/or subordination agreements and/or limitation
of interest letters from secured parties with a registered
security interest in any property of any Restricted Group
Member as the Required Lenders shall require;
(j) quarterly financial statements of the Restricted Group
described in Subsection 13.1.6(b) for the Test Period ending
on March 31, 2004 reviewed and commented upon by the
Auditors;
(k) certified true copies of all Material Contracts;
(l) such landlord acknowledgments as the Required Lenders shall
require;
(m) a Certificate of the Borrower certifying that all of the
conditions contained in paragraphs (a) through (l) inclusive
above have been satisfied, save for those outlined in the
Post-Closing Undertaking;
(n) the Post-Closing Undertaking duly executed by such
Restricted Group Members as the Required Lenders may, in
their judgment, require;
(o) payment of all fees, costs and expenses due and payable to
the Senior Lenders pursuant to or otherwise in respect of
this Agreement;
(p) a report on the matters referred to in this Section 9.1 from
the Lenders' Counsel addressed to the Agent; and
(q) such other agreements, documents and instruments as the
Required Lenders may, in their judgment, require.
9.2 Conditions to all Drawdowns. The Lenders shall not be obliged to make
or allow, and the Borrower shall not be entitled to request, any Drawdown,
including the first Drawdown, under any Credit Facility unless the terms and
conditions set out below in respect of such Drawdown have been satisfied (or
waived by the Required Lenders pursuant to Section 9.4 to permit such Drawdown
to take place).
(a) the terms and conditions of Section 9.1 with respect to such
Drawdown have been satisfied;
(b) each of the representations and warranties of the Borrower
deemed to be repeated under Section 12.2 is true and correct
as of the date such Drawdown is requested and as of the
proposed Drawdown Date as though made on and as of each such
date;
(c) no Default has occurred that is continuing on the date such
Drawdown is requested or on the proposed Drawdown Date, nor
would any Default result after giving effect to the
requested Drawdown; and
(d) each of the terms and conditions applicable to such Drawdown
contained in this Agreement shall have been fully complied
with.
9.3 Conditions to Conversions and Rollovers. The Lenders shall not be
obliged to make or allow, and the Borrower shall not be entitled to request,
any Conversion to a LIBOR Loan or an issue of Acceptances or any Rollover
under the Revolving Facility unless the terms and conditions set out below in
respect of such Conversion or Rollover have been satisfied (or waived by the
Required Lenders to permit such Conversion or Rollover to take place):
(a) each of the representations and warranties deemed to be
repeated under Section 12.2 in respect of such Conversion or
Rollover is true and correct in all respects as of the date
such Conversion or Rollover is requested and as of the
proposed Conversion Date or Rollover Date;
(b) no Default has occurred that is continuing on the date such
Conversion or Rollover is requested or on the proposed
Conversion Date or Rollover Date, nor would any Default
result after giving effect to the Requested Conversion or
Rollover; and
(c) each of the terms and conditions applicable to such
Conversion or Rollover contained in this Agreement shall
have been fully complied with.
9.4 Waiver. The conditions set forth in Sections 9.1, 9.2 and 9.3 are
inserted for the sole benefit of the Lenders and may be waived by the Required
Lenders, in whole or in part, (with or without terms or conditions) for any
purpose at any time without prejudicing the rights of the Lenders at any time
thereafter to require compliance with such conditions for that or any other
purpose in respect of any other Borrowing requested by the Borrower.
ARTICLE 10
SECURITY
10.1 Initial Security. To secure the due payment and performance of the
Secured Obligations, the Borrower shall deliver to the Agent, or cause the
delivery to the Agent of, each of the agreements, documents and instruments
(each in form and substance satisfactory to the Agent) listed in Schedule 10.1
to be executed by each Restricted Group Member listed in Schedule 10.1 before
the Borrower requests its first Drawdown hereunder, save and except for (a)
the mortgage over the Capital Stock in Placard Pty. Ltd. to be granted by
Metaca Corporation listed as item #43 in Schedule 10.1 and (b) the Deed of
Charge to be granted by Placard Pty. Ltd. listed as item 47 in Schedule 10.1
and the Account Bank Deed listed as item #49 in Schedule 10.1.
10.2 Additional Security from Restricted Group Members. To better secure
the due payment and performance of the Secured Obligations owing by the
Borrower, and as a further condition to the right of the Borrower to borrow
hereunder, the Borrower shall cause:
(a) each Person that becomes a Restricted Group Member after the
date hereof to deliver to the Agent:
(i) a Guarantee of the Secured Obligations owing by the
Borrower in favour of the Finance Parties; and
(ii) security over all of the Business Assets of such
Restricted Group Member to secure the payment and
performance of such Guarantee and any other Secured
Obligations owing by it;
(b) the Person owning the Capital Stock in each Restricted Group
Member referred to in paragraph (a) above (the "Pledgor")
(i) if it is not the Borrower, to issue a Guarantee and (ii)
to pledge that Capital Stock pursuant to a security
agreement to the Agent to secure the payment and performance
of the Secured Obligations owing by the Borrower;
(c) a third party legal opinion from the Borrower's Counsel
concerning such Restricted Group Member, Pledgor, Guarantee
and Security, to be delivered to the Agent all within 45
days of such Person first becoming a Restricted Group
Member;
(d) Placard Pty. Ltd. to deliver to the Agent security over its
Business Assets pursuant to the Security listed as items 48
and 49 in Schedule 10.1 to secure, inter alia, the payment
and performance of the Guarantee issued by Placard Pty. Ltd.
pursuant to Section 10.1, together with a third party legal
opinion from the Borrower's Counsel concerning Placard Pty.
Ltd. and such Security, before July 23, 2004;
(e) Metaca Corporation to deliver to the Agent security over the
Capital Stock of Placard Pty. Ltd. pursuant to the Security
listed as item #43 in Schedule 10.1, together with a third
party legal opinion from the Borrower's counsel concerning
Metaca Corporation, Placard Pty. Ltd. and such Deed of
Charge on Shares, before July 23, 2004; and
(f) each Restricted Group Member, other than each Subsidiary of
MDC/KBP Acquisition Inc., that becomes party to a Material
Contract after the date hereof to (i) execute a Material
Contract security agreement in relation thereto in favour of
the Agent and deliver same, together with a third party
legal opinion from the Borrower's Counsel, within 30 days of
such agreement becoming a Material Contract and (ii) use
commercially reasonable best efforts to obtain and deliver
to the Agent an acknowledgment from the third party
contracting party to that Material Contract within such 30
day period (provided that the Required Lenders will consider
in good faith any request for a waiver of this provision
relative to any Material Contract if the Borrower provides
commercially reasonable grounds to do so);
provided that, a Restricted Group Member referred to in paragraph (a) shall
not be obliged to deliver the Guarantee or the Security referred to in clauses
(i) and (ii) thereof if it is prohibited by applicable law from doing so, or
in the good faith opinion of the Required Lenders, the costs of granting such
Guarantee and Security are materially greater than the benefits to be received
by the Lenders therefrom. The agreements, documents and instruments evidencing
each such Guarantee, Security and security agreement, acknowledgment and third
party legal opinion must be in form and substance satisfactory to the Agent.
10.3 Registration. The Borrower shall register the Security (or a
financing statement, notice or other document in respect thereof) in all
offices where such Registration is necessary or of advantage, in the opinion
of the Lenders' Counsel, to preserve, protect and perfect the Security and its
priority at all times, including any land registry or land titles office.
10.4 Further Assurances. The Borrower shall, forthwith and from time to
time on request from the Agent, execute or cause to be executed, all such
agreements, documents and instruments (including any change to any Loan
Document) and do or cause to be done all such other matters and things which
in the reasonable opinion of the Agent or the Lenders' Counsel may be
necessary or of advantage to give the Finance Parties (so far as may be
possible under any Applicable Law) the Liens and the priority intended to be
created by the Loan Documents or to facilitate realization under such Liens.
It is the intention of the parties that the Finance Parties will, among other
things, have (i) a first priority Lien, subject to Permitted Liens, over all
Business Assets of each Secured Group Member, (ii) a first priority Lien,
subject only to Permitted Liens referred to in paragraph (a) of the definition
of "Permitted Liens", over all Capital Stock of each Restricted Group Member
(other than the Borrower) and each directly held Subsidiary of each Restricted
Group Member and (iii) such other Liens over the Business Assets of such
Restricted Group Members as the Required Lenders and the Borrower may from
time to time agree upon.
ARTICLE 11
LENDER HEDGING AFFILIATES
11.1 Designation of Lender Hedging Affiliates. The Borrower may from time
to time designate any affiliate of a Lender as a Lender Hedging Affiliate for
the purposes of this Agreement provided that such Affiliate enters into a
Qualified Hedge Agreement with the Borrower.
11.2 Adhesion. Upon delivery to the Agent of an Adhesion Contract for a
Person designated as a Lender Hedging Affiliate pursuant to Section 11.1, the
Agent shall promptly execute and deliver such Adhesion Contract whereupon this
Agreement and each other Finance Document shall henceforth be read and
construed as if such Person were party to this Agreement as a Lender Hedging
Affiliate having all of the rights and obligations of a Lender Hedging
Affiliate expressed herein and all references to any Lender Hedging Affiliate
in any Finance Document shall (to the extent the context so admits) be
construed accordingly.
11.3 Authorization of Lenders. Each Lender irrevocably appoints,
authorizes and directs the Agent, as its attorney and agent, with full power
of substitution and delegation, to complete and execute on its behalf any
Adhesion Contract relating to a Person designated as a Lender Hedging
Affiliate pursuant to Section 11.1. Each Lender agrees that it shall be bound
by the terms of each such Adhesion Contract so executed by the Agent.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES
12.1 Representations and Warranties. To induce the Lenders to make the
Credit Facilities available to the Borrower pursuant hereto, and each Finance
Party to enter into each Financial Hedge Agreement, the Borrower represents
and warrants to and in favour of the Finance Parties as follows:
12.1.1 Existence and Good Standing. Each Restricted Group Member is a
corporation, general or limited partnership, business trust or other legal
Person duly and validly incorporated or formed, organized and existing under
the laws of its jurisdiction of incorporation or formation and has the legal
capacity and right to own its Business Assets and to carry on its business in
each jurisdiction in which its Business Assets are located or it carries on
business.
12.1.2 Authority. Each Restricted Group Member has the legal capacity and
right to enter into the Finance Documents to which it is a party and do all
acts and things and execute and deliver all agreements, documents and
instruments as are required thereunder to be done, observed or performed by it
in accordance with the terms and conditions thereof.
12.1.3 Due Authorization. Each Restricted Group Member has taken all
necessary action to authorize the execution and delivery of each Finance
Document to which it is a party, the creation and performance of its
obligations thereunder and the creation of the Liens over its Business Assets
and the consummation of the transactions contemplated thereby.
12.1.4 Due Execution. Each Restricted Group Member has duly executed and
delivered each Finance Document to which it is a party.
12.1.5 Validity of Finance Documents - Non-Conflict. None of the
authorization, execution, delivery or performance of the Finance Documents,
nor the creation of any Liens over its Business Assets nor the consummation of
any of the transactions contemplated thereby:
(a) requires any Authorization to be obtained or Registration to
be made (except such as have already been obtained or made
and are now in full force and effect);
(b) conflicts with, contravenes or gives rise to any default
under (i) any of the Constitutional Documents or internal
corporate, partnership, trust and/or other management
resolutions of any Restricted Group Member, (ii) the
provisions of any indenture, instrument, agreement or
undertaking to which any Restricted Group Member is a party
or by which any Restricted Group Member or any of its
Business Assets are or may become bound (except for any
contravention or default that is Immaterial) or (iii) any
Applicable Law; or
(c) has resulted or will result in the creation or imposition of
any Lien (other than the Security) upon any of the Business
Assets of any Restricted Group Member or its Capital Stock.
12.1.6 Enforceability. Each Loan Document to which each Restricted Group
Member is a party constitutes a valid and legally binding obligation
enforceable against it in accordance with its terms, subject only to
bankruptcy, insolvency, winding-up, dissolution, administration
reorganization, arrangement or other statutes or judicial decisions affecting
the enforcement of creditors' rights in general and to general principles of
equity under which specific performance and injunctive relief may be refused
by a court in its discretion.
12.1.7 Absence of Litigation. There is no existing, pending or threatened
Litigation against any Restricted Group Member which, if adversely determined
to any Restricted Group Member or the Finance Parties, could reasonably be
expected to result in a Material Adverse Effect or, except for the Litigation
notified to the Agent pursuant to Section 13.1.8 and the Litigation defined in
the attached Exhibit 1, could reasonably be expected to result in any single
Award ordering any Restricted Group Member to pay more than the Threshold
Amount or multiple Awards ordering any Restricted Group Member or Restricted
Group Members to pay more than the Threshold Amount in the aggregate. No event
has occurred, and no state or condition exists, which could reasonably be
expected to give rise to any such Litigation except for the subject matter of
any Litigation notified to the Agent pursuant to Section 13.1.8 and the
Litigation defined in the attached Exhibit 1, and there is no Award
outstanding against any Restricted Group Member which could reasonably be
expected to have a Material Adverse Effect.
12.1.8 Financial Statements. Each financial report and financial statement
of each Restricted Group Member delivered to the Finance Parties pursuant to
or in connection with this Agreement have been prepared in accordance with US
GAAP (subject to year end audit adjustments, where applicable) or, as the case
may be, on a Modified Consolidated Basis, does not contain (or, if audited,
would not contain) any Impermissible Qualification and fairly and accurately
presents the financial information and the financial condition and results of
operations of such Restricted Group Member contained therein as at their
respective preparation dates.
12.1.9 Accuracy of Information. No information furnished by any Restricted
Group Member to the Finance Parties in connection with any of the Finance
Documents contains any material misstatement of fact or omits to state a
material fact necessary to make the statements contained therein not
misleading in light of the circumstances in which they were made and as of the
date made. Each financial forecast and projection ("Forecast") prepared by it
and furnished to the Finance Parties was based upon assumptions believed to be
reasonable by it as of the date of preparation; there has been no material
change in such assumptions or in the information on which such assumptions are
based which has not been disclosed in writing to the Finance Parties; it has
no reason to believe that any such Forecast as it relates to periods ending
after its date of preparation, when read in conjunction with the related
assumptions and other information disclosed in writing to the Agent, fails to
reflect the Restricted Group's judgment as the most probable set of economic
conditions and the Restricted Group's planned courses of action given these
conditions, and such Forecast as it relates to periods already ended, does not
reflect results which are materially higher than the anticipated actual
results for such periods.
12.1.10 Securities Law Filings. The Borrower has filed all management
information circulars, reports and other material documents required to be
filed by it pursuant to applicable securities legislation and the by-laws,
rules, regulations and policies of each stock exchange on which any of its
Capital Stock is listed ("Securities Reports") during the last four (4) years.
Each Securities Report was, as of the date of filing, in compliance in all
material respects with all applicable requirements under applicable securities
legislation and the by-laws, rules, regulations and policies of each such
stock exchange, and none of the Securities Reports, as of their respective
filing dates, included any "misrepresentation" (as such term is defined in the
Securities Act (Ontario)).
12.1.11 Reporting Issuer. The Borrower is a "reporting issuer" within the
meaning of the securities legislation of all Provinces of Canada and is not in
default of any material requirement of any applicable securities legislation
or the regulations, rules or policies thereunder. All "material information"
(within the meaning of National Instrument 51-201 of the Canadian Securities
Administrators) has been publicly disclosed in compliance with the provisions
of National Instrument 51-201.
12.1.12 Listing of Capital Stock. The Borrower's outstanding Class A
subordinate voting shares are listed for trading on The Toronto Stock Exchange
and NASDAQ and the Borrower is not in default of any material requirement of
any applicable by-laws, rules, regulations or policies of such stock exchange.
12.1.13 No Material Adverse Change. Since the date of the most recent audited
financial statements of the Borrower furnished to the Finance Parties, there
has been no Material Adverse Change.
12.1.14 Compliance with Laws. Each Restricted Group Member is in compliance
with all Applicable Laws, save for non-compliance which is Immaterial.
12.1.15 All Authorizations Obtained and Registrations Made. All
Authorizations and Registrations necessary or of advantage to permit each
Restricted Group Member to execute, deliver and perform each Finance Document
to which it is party, grant any Guarantee and Security and consummate the
transactions contemplated thereby and own its Business Assets and carry on its
business have been obtained or effected and are in full force and effect. Each
Restricted Group Member is in compliance with the requirements of all such
Authorizations and Registrations and there is no Award outstanding or
Litigation existing, pending or, to its knowledge, threatened which could
reasonably be expected to result in the revocation, cancellation, suspension
or any adverse modification of any of such Authorizations and Registrations.
12.1.16 No Default. No Default has occurred which has not been either
remedied (or otherwise ceased to be continuing) or expressly waived by the
Required Lenders in writing.
12.1.17 Real Property. Each Restricted Group Member has a subsisting
leasehold interest in, or good and marketable title to, in each case free and
clear of all Liens, other than Permitted Liens, all of the real property
leased or owned by it which are reflected in the latest financial statements
of the Restricted Group provided to the Senior Lenders, except for real
property interests disposed in the ordinary course of business since the date
of those financial statements in compliance with the provisions of this
Agreement.
12.1.18 Personal Property. Each Restricted Group Member is the sole legal and
beneficial owner of, free and clear of all Liens, other than Permitted Liens,
all personal property reflected as an asset in the latest financial statements
of the Restricted Group provided to the Senior Lenders, except for personal
property disposed in the ordinary course of business since the date of those
financial statements in compliance with the provisions of this Agreement.
12.1.19 Intellectual Property
(a) Each Restricted Group Member has used its Material
Intellectual Property Rights in such manner as to preserve
its rights therein including the use of proper notices
indicating ownership of and/or rights to use its Material
Intellectual Property Rights, to the extent reasonably
necessary for the protection of its Material Intellectual
Property Rights, and the prevention of any disclosure to the
public of the confidential information which would impair
any Restricted Group Member's rights therein.
(b) No Restricted Group Member is aware of any claim having been
made that the use of any Material Intellectual Property
Rights of any Restricted Group Member or the sale or
licensing of any of the Software comprised therein does or
may violate the rights of any other Person.
(c) All Material IP Licences are in full force and effect
unamended, each Restricted Group Member party thereto has
duly observed and performed all of its covenants and
obligations under each of the Material IP Licenses and there
has not been any default under or breach of any Material IP
Licenses by the other parties thereto.
12.1.20 Restricted Group Organization. The Borrower has no directly owned
Subsidiaries other than inactive Subsidiaries and those depicted in the
organization chart set out in Schedule 12.1.20 and those notified to the Agent
pursuant to Section 13.1.6. Each other Restricted Group Member does not
directly or indirectly own any Subsidiary other than inactive Subsidiaries and
those depicted in the organization chart set out in Schedule 12.1.20 and those
notified to the Agent pursuant to Section 13.1.6. The owners that are
Restricted Group Members, beneficially and of record, of the issued Capital
Stock of each such Subsidiary, are depicted in the organization chart set out
in Schedule 12.1.20. No Person, other than another Restricted Group Member,
has any option or right to acquire any Capital Stock in any Subsidiary of the
Borrower that is a Restricted Group Member.
12.1.21 Taxes. Each Restricted Group Member has:
(a) delivered or caused to be delivered all Income Tax, Sales
Tax and other returns for Taxes which are now due to the
appropriate Governmental Body;
(b) paid and discharged all Taxes payable by it when due;
(c) made provision for appropriate amounts in respect of any
Taxes likely to be exigible in accordance with US GAAP;
(d) withheld and collected all Taxes required to be withheld and
collected by it and remitted such Taxes to the appropriate
Governmental Body when due; and
(e) paid and discharged all Statutory Prior Claims when due,
and no assessment or appeal is, to its knowledge, being asserted or processed
with respect to such returns, Taxes or Statutory Prior Claims, except for
assessments or appeals respecting an aggregate Tax liability for the entire
Restricted Group not exceeding fifty percent (50%) of the Threshold Amount.
12.1.22 Deferred Acquisition Consideration. Schedule 12.1.22 contains the
Borrower's reasonable best estimates of (a) all Deferred Acquisition
Consideration and (b) the current portion of all Put/Call Obligations.
12.1.23 Solvency. Each Restricted Group Member is Solvent.
12.1.24 General Environmental Representations and Warranties. With respect
to the Environment:
(a) the Restricted Group's Facilities and all real estate
(including the buildings, erections and facilities
constructed thereon) and appurtenances comprising or used in
connection therewith, are and have at all times been owned,
leased, managed, controlled or operated in compliance with
all Environmental Laws for the period they have been owned,
leased, managed, controlled or operated by any Restricted
Group Member (including its predecessors by amalgamation or
merger); and
(b) to the knowledge of each Restricted Group Member all real
estate (including the buildings, erections and facilities
constructed thereon) and appurtenances comprising or used in
connection therewith were at all times owned, leased,
managed, controlled or operated by the predecessors in title
to such real estate in compliance with all Environmental
Laws,
with the exception of matters which are Immaterial and in respect of which (i)
disclosure has been made to the Senior Lenders in Schedule 12.1.24 or to the
Agent pursuant to Section 13.1.14 and (ii) non-compliance has not resulted in
and could not reasonably be expected to result in, a loss and expense to any
Restricted Group Member in an amount exceeding fifty percent (50%) of the
Threshold Amount.
12.1.25 Employee Relations. There are no strikes, work stoppages or
controversies pending or, to its knowledge, threatened between any Restricted
Group Member and any of its employees (including unions representing
employees), other than (a) employee grievances arising in the ordinary course
of business which could not reasonably be expected to result in work stoppages
and (b) those disclosed to the Agent pursuant to Section 13.1.15 all of which
are Immaterial.
12.1.26 Investment Company; Public Utility Holding Company. No Restricted
Group Member is, and after giving effect to any Advance no Restricted Group
Member will be, an "investment company" or a company "controlled" by an
"investment company" as such terms are defined in the United States Investment
Company Act of 1940, as amended. No Restricted Group Member is subject to
regulation under the United States Federal Power Act, the United States
Interstate Commerce Act or the United States Public Utility Holding Company
Act of 1935, as amended, or any other Applicable Law which restricts its
ability to incur indebtedness or its ability to consummate the transactions
contemplated by the Finance Documents.
12.1.27 Federal Reserve Regulations. No Restricted Group Member is engaged,
directly or indirectly, principally or as one of its important activities, in
the business of extending, or arranging for the extension of, credit for the
purpose of purchasing or carrying margin stock (as defined in Regulation U).
Neither the borrowing of any Advance hereunder, nor the use of the proceeds
thereof, will (i) be used to purchase or carry any "margin stock" within the
meaning of Regulation U, or (ii) violate or be inconsistent with the
provisions of Regulation U or Regulation X. None of the assets which are
subject to any limitation on sale, pledge or other restriction under the Loan
Documents have been, or will be, margin stock.
12.1.28 ERISA Matters. Neither the Borrower nor any ERISA Affiliate maintains
or contributes to any Benefit Plan, Multiemployer Plan or Non-US Pension Plan.
Each Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code as currently in effect either (a) has received a
favourable determination letter from the IRS that the Plan is so qualified or
(b) an application for determination of such tax-qualified status will be made
to the IRS prior to the end of the applicable remedial amendment period under
Section 401(a) of the Internal Revenue Code as currently in effect, and the
Borrower or an ERISA Affiliate shall use commercially reasonable efforts to
obtain promptly a determination letter with respect to such application. No
Restricted Group Member maintains or contributes to any employee welfare
benefit plan within the meaning of Section 3(1) of ERISA which provides
benefits to employees after termination of employment other than as required
by Section 601 of ERISA. Each Restricted Group Member is in compliance in all
material respects with the responsibilities, obligations and duties imposed on
it by ERISA and the Internal Revenue Code with respect to all Plans. No
Benefit Plan has incurred any accumulated funding deficiency (as defined in
Sections 302(a)(2) of ERISA and 412(a) of the Internal Revenue Code) whether
or not waived. Neither the Borrower nor any ERISA Affiliate (i) has engaged in
a non-exempt prohibited transaction described in Sections 406 of ERISA or 4975
of the Internal Revenue Code or (ii) has taken or failed to take any action
which could reasonably be expected to constitute or result in a Termination
Event. Neither the Borrower nor any ERISA Affiliate has incurred any potential
liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA. Neither
the Borrower nor any ERISA Affiliate has incurred any liability to the PBGC
which remains outstanding other than the payment of premiums, and there are no
premium payments which have become due which are unpaid. Schedule B to the
most recent annual report filed with the IRS with respect to each Benefit Plan
and furnished to the Agent is complete and accurate. Since the date of each
such Schedule B, there has been no material adverse change in the funding
status or financial condition of the Benefit Plan relating to such Schedule B.
Neither the Borrower nor any ERISA Affiliate has (x) failed to make a required
contribution or payment to a Multiemployer Plan or (y) made a complete or
partial withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer
Plan. Neither the Borrower nor any ERISA Affiliate has failed to make a
required instalment or any other required payment under Section 412 of the
Internal Revenue Code on or before the due date for such instalment or other
payment. Neither the Borrower nor any ERISA Affiliate is required to provide
security to a Benefit Plan under Section 401(a)(29) of the Internal Revenue
Code due to a Benefit Plan amendment that results in an increase in current
liability for the plan year. No Restricted Group Member has, by reason of the
transactions contemplated hereby, any obligation to make any payment to any
employee pursuant to any Plan or existing contract or arrangement. The
Borrower has given to the Agent copies of all of the following: each Benefit
Plan and related trust agreement (including all amendments to such Plan and
trust) in existence as of the date hereof and in respect of which the Borrower
or any ERISA Affiliate is currently an "employer" as defined in Section 3(5)
of ERISA, and the most recent actuarial report, determination letter issued by
the IRS and Form 5500 filed in respect of each such Benefit Plan in existence;
a listing of all of the Multiemployer Plans currently contributed to by the
Borrower or any ERISA Affiliate with the aggregate amount of the most recent
annual contributions required to be made by the Borrower and all ERISA
Affiliates to each such Multiemployer Plan, any information which has been
provided to the Borrower or an ERISA Affiliate regarding withdrawal liability
under any Multiemployer Plan and the collective bargaining agreement pursuant
to which such contribution is required to be made; and as to each employee
welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees of any Restricted Group Member after
termination of employment other than as required by Section 601 of ERISA, the
plan document (or, if no plan document is available, a written description of
the benefits provided under such plan), the actuarial report for such plan (if
any), the aggregate amount of the most recent annual payments made to, or on
behalf of, terminated employees under each such plan, and any information
about funding to provide for such welfare benefits.
12.1.29 Non-US Employee Benefit Matters. Each Non-US Employee Benefit Plan is
in compliance in all material respects with all laws, regulations and rules
applicable thereto and the respective requirements of the governing documents
for such Plan. With respect to any Non-US Pension Plan with a defined benefit
element not wholly covered by insurance maintained or contributed to by any
Restricted Group Member, the most recent valuation for such plan has been
disclosed to the Lenders. Contributions to such Non-US Pension Plan are being
made at the rate recommended by actuarial advice to eliminate any projected
benefit obligation (PBO) deficits disclosed in such valuations in the period
prior to the next valuation, and no Restricted Group Member, or trustee has
taken nor will take, any action which would materially increase any such
deficit. With respect to any Non-US Employee Benefit Plan maintained or
contributed to by any Restricted Group Member (other than a Non-US Pension
Plan), reasonable reserves have been established in accordance with prudent
business practice or where required by best accounting practices in the
jurisdiction in which such Plan is maintained having regard to tax
legislation. The aggregate unfunded liabilities, after giving effect to any
reserves for such liabilities, with respect to such Plans would not be
reasonably expected to result in a material liability. There are no actions,
suits or claims (other than routine claims for benefits) pending or, to the
best knowledge of the Borrower, threatened against Restricted Group Member or
any ERISA Affiliate with respect to any Non-US Employee Benefit Plan.
12.1.30 Anti-Terrorism and Anti-Money Laundering.
(a) Compliance. The Borrower is not and shall not be, and, after
making due inquiry, no Person who owns a controlling
interest in or otherwise controls the Borrower is or shall
be, (i) listed on the Specially Designated Nationals and
Blocked Persons List (the "SDN List") maintained by the
United States Office of Foreign Assets Control ("OFAC"),
United States Department of the Treasury, and/or on any
other similar list ("Other Lists" and, collectively with the
SDN List, the "Lists") maintained by the OFAC pursuant to
any authorizing statute, Executive Order or regulation
(collectively, "OFAC Laws and Regulations"); or (ii) a
Person (a "Designated Person") either (A) included within
the term "designated national" as defined in the Cuban
Assets Control Regulations, 31 C.F.R. Part 515, or (B)
designated under Sections 1(a), 1(b), 1(c) or 1(d) of
Executive Order No. 13224, 66 Fed. Reg. 49079 (published
September 25, 2001) or similarly designated under any
related enabling legislation or any other similar Executive
Orders (collectively, the "Executive Orders"). None of the
Restricted Group Members (x) is a Person or entity with
which any Finance Party is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism
Law or (y) is a Person or entity that commits, threatens or
conspires to commit or supports "terrorism" as defined in
the Executive Orders or (z) is affiliated or associated with
a Person or entity listed in the preceding clause (x) or
clause (y). To the knowledge of the Borrower, no Restricted
Group Member, any of their Affiliates, nor any brokers or
other agents acting in any capacity in connection with the
Advances hereunder (I) deals in, or otherwise engages in any
transaction relating to, any property or interests in
property blocked pursuant to the Executive Orders or (II)
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) Funds Invested in Restricted Group Members. Each Restricted
Group Member has taken, and shall continue to take,
reasonable measures appropriate to the circumstances (and in
any event as required by Applicable Law), with respect to
each holder of a direct or indirect interest in such Person,
to assure that funds invested by such holders in such Person
are derived from legal sources ("Anti-money Laundering
Measures"). The Anti-money Laundering Measures have been and
shall be undertaken in accordance with the Bank Secrecy Act,
31 ▇.▇.▇.▇▇.▇▇. 5311 et seq. ("BSA"), and all applicable
laws, regulations and government guidance on BSA compliance
and on the prevention and detection of money laundering
violations under 18 ▇.▇.▇.▇▇.▇▇. 1956 and 1957 (collectively
with the BSA, "Anti-money Laundering Laws").
(c) No Violation of Anti-money Laundering Laws. To the
Borrower's knowledge, no Restricted Group Member nor any
holder of a direct or indirect interest in any Restricted
Group Member (i) is under investigation by any governmental
authority for, or has been charged with, or convicted of,
money laundering under 18 U.S.C. ▇▇.▇▇. 1956 and 1957, drug
trafficking, terrorist-related activities or other money
laundering predicate crimes, or any violation of the BSA,
(ii) has been assessed civil penalties under any Anti-money
Laundering Laws, or (iii) has had any of its funds seized or
forfeited in an action under any Anti-money Laundering Laws.
(d) Compliance with Anti-money Laundering Laws. Each Restricted
Group Member has taken, and agrees that it shall continue to
take, reasonable measures appropriate to the circumstances
(in any event as required by Applicable Law), to ensure that
such Person is and shall be in compliance with all current
and future Anti-money Laundering Laws and applicable laws,
regulations and governmental guidance for the prevention of
terrorism, terrorist financing and drug trafficking.
12.2 Repetition of Representations and Warranties. The representations and
warranties made in Section 12.1, save and except those contained in Section
12.1.22, shall be deemed to be repeated by the Borrower on each Borrowing Date
by reference to the facts and circumstances then existing, it being understood
that to the extent such representations and warranties relate solely to a
specifically identified earlier date they need only be true and correct as of
such earlier date.
12.3 Nature of Representations and Warranties. The representations and
warranties made in Section 12.1 or deemed repeated in Section 12.2 shall
survive the execution and delivery of this Agreement and the making of each
Borrowing notwithstanding any investigations or examinations which may be made
by the Agent, any other Finance Party or Lenders' Counsel, and the Finance
Parties shall be deemed to have relied on such representations and warranties
in the making of each Borrowing.
ARTICLE 13
COVENANTS OF THE BORROWER
13.1 Affirmative Covenants. Until Payment in Full of the Finance
Obligations, the Borrower covenants and agrees with the Finance Parties that
it will, and (where the context so admits) it will ensure that each Restricted
Group Member will, duly perform and comply with each of the following
affirmative covenants:
13.1.1 Punctual Payment. Each Restricted Group Member will duly and
punctually pay each sum payable by it under each Finance Document to which it
is a party at the time and place and in the manner provided for in such
Finance Document.
13.1.2 Conduct of Business. Each Restricted Group Member will maintain in
good standing and full force and effect its legal existence in its present
jurisdiction of incorporation or formation and the Authorizations,
Registrations, legal capacity, rights and qualifications necessary to carry on
the Restricted Group's Business and own its Business Assets in each
jurisdiction in which it carries on business or its Business Assets are
located.
13.1.3 Compliance with Applicable Laws. Each Restricted Group Member will
comply in all material respects with Applicable Laws.
13.1.4 Compliance with Contracts. Each Restricted Group Member will comply
in all material respects with each of the contractual obligations owing by it
to its customers, suppliers and other Persons, save for non-compliance that is
Immaterial.
13.1.5 Financial Records. Each Restricted Group Member will maintain complete
records and books of account in accordance with applicable generally accepted
accounting principles.
13.1.6 Financial Statements and Other Information. The Borrower will deliver
or cause to be delivered to the Agent (in sufficient numbers to provide a copy
for the Agent and each of the Senior Lenders):
(a) as soon as practicable and in any event within 90 days after
the end of each Fiscal Year, the annual consolidated
financial statements of the Borrower prepared in accordance
with US GAAP audited by its Auditors (without any
Impermissible Qualification), and the annual financial
statements of the Restricted Group prepared on a Modified
Consolidated Basis reviewed and commented upon by its
Auditors (without any Impermissible Qualification), together
with a Compliance Certificate from the Borrower prepared as
at such Fiscal Year end;
(b) as soon as practicable and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each
Fiscal Year, the unaudited quarterly consolidated financial
statements of the Borrower, for the current Fiscal Year to
such Fiscal Quarter end, each prepared in accordance with US
GAAP (subject to annual year end audit adjustments) and
unaudited financial statements of the Restricted Group
prepared on a Modified Consolidated Basis (subject to annual
year end audit adjustments), consisting in each case of a
balance sheet and statements of income and retained earnings
(or deficit) and of changes in cash position, together with
a Compliance Certificate from the Borrower prepared as at
such Fiscal Quarter end;
(c) within five (5) days after approval by the board of
directors of the Borrower and in any event not later than 30
days after the commencement of each Fiscal Year, the Annual
Budget for that Fiscal Year;
(d) promptly upon furnishing them to its shareholders, copies of
all information circulars, management reports, financial
statements and proxy statements furnished to the
shareholders of the Borrower;
(e) promptly upon the release or filing thereof, copies of all
registration statements, prospectuses, material change
reports and annual, quarterly, monthly or other regular
reports which the Borrower files with the Ontario Securities
Commission, the Securities and Exchange Commission or any
other securities' regulatory authority; and
(f) from time to time, such additional information regarding any
of the Business Affairs of the Restricted Group as the Agent
or any other Senior Lender may reasonably request.
13.1.7 Rights of Inspection. At any time and from time to time, upon
reasonable prior written notice to any Restricted Group Member, each
Restricted Group Member will permit any Representative of the Agent, at the
expense of the Borrower, to attend at the premises of such Restricted Group
Member and examine and make copies of any abstracts from the records and books
of account of any Restricted Group Member and to discuss any of the Business
Affairs of any Restricted Group Member with any of its directors, Senior
Officers and with any of its Auditors or other Representatives.
13.1.8 Notice of Litigation. Each Restricted Group Member will give notice to
the Agent as soon as it obtains knowledge of any Award or the commencement of
any Litigation or dispute affecting any Restricted Group Member or any of its
Business Affairs which, either alone or when aggregated with all other such
Litigation, has resulted in, or could reasonably be expected to result in, (i)
a Material Adverse Effect, or (ii) any single Award ordering any Restricted
Group Member to pay more than the Threshold Amount or multiple Awards ordering
any Restricted Group Member or Restricted Group Members to pay more than the
Threshold Amount in the aggregate.
13.1.9 Notice of Default. Each Restricted Group Member will give notice to
the Agent as soon as any Restricted Group Member obtains knowledge of any
Default and outline in reasonable detail in such notice the action such
Restricted Group Member is taking to remedy such Default.
13.1.10 Maintenance of Properties. Each Restricted Group Member will maintain
in good repair, working order and condition (reasonable wear, tear and
obsolescence excepted) its Business Assets (whether owned or held under lease)
and from time to time make or cause to be made all needed and appropriate
repairs, renewals, replacements, additions and improvements thereto consistent
with prudent business judgment.
13.1.11 Maintenance of Insurance. The Borrower will insure, or cause to be
insured at all times, all of the Business Assets of the Restricted Group with
financially sound and reputable insurance companies covering such Business
Assets in an amount of at least their replacement value and against public
liability, in at least such amounts and against at least such risks as are
usually insured against by Persons of similar size and carrying on a similar
business or holding similar Business Assets and the Borrower shall furnish to
the Agent upon written request, full information as to the insurance carried.
No Restricted Group Member will do or omit to be done anything which could
breach or invalidate any such insurance and the Borrower will punctually pay
all premiums and other amounts necessary for maintaining such insurance as the
same become due. The Borrower shall obtain and, upon request, provide the
Agent with certificates of insurance for and certified copies of the policies
effecting the insurance required by this Section 13.1.11.
13.1.12 Payment of Taxes and Claims. Each Restricted Group Member will:
(a) pay and discharge all lawful claims for labour, material and
supplies when due;
(b) deliver or cause to be delivered all Income Tax, Sales Tax
and other Tax returns when they are due to the appropriate
Governmental Body;
(c) punctually pay and discharge all Taxes payable by it when
due;
(d) withhold and collect all Taxes required to be withheld and
collected by it and remit such Taxes to the appropriate
Governmental Body when due in the manner required by
Applicable Law; and
(e) pay and discharge all Statutory Prior Claims when due.
13.1.13 Arm's Length Arrangements. Each Restricted Group Member will only
enter into an agreement, transaction or other arrangement with an Affiliate or
any other Person with whom it is not dealing at arm's length if such
agreement, transaction or arrangement is made (a) on commercially reasonable
terms (including normal trade terms, but excluding for certainty deferred
payment terms) at fair market value and consistent with commercial relations
between Unrelated Parties or (b) between Secured Group Members.
13.1.14 Comply with Environmental Laws. Each Restricted Group Member will
cause its Representatives to:
(a) manage and operate the Restricted Group's Facilities in
compliance with all Environmental Laws;
(b) maintain all Authorizations and make all Registrations
required under all Environmental Laws in relation to the
Restricted Group's Facilities and remain in compliance
therewith; and
(c) store, treat, transport, generate, otherwise handle and
dispose of all Hazardous Materials and Waste owned, managed
or controlled by it in compliance with all Environmental
Laws,
with the exception of failure or non-compliance which is Immaterial provided
that (i) it is disclosed to the Senior Lenders in Schedule 12.1.24 or to the
Agent within 10 Business Days of any Senior Officer of the Borrower first
becoming aware of it pursuant to this Section 13.1.14 and (ii) no loss and
expense in excess of fifty percent (50%) of the Threshold Amount has been or
could reasonably be expected to be incurred by any Restricted Group Member.
13.1.15 Employee Relations. Each Restricted Group Member will give prompt
notice to the Agent of any actual or threatened strikes or work stoppages and
outline in responsible detail in such notice the expected resolution thereof.
13.1.16 Subsidiaries. The Borrower will provide the Agent with prompt notice
of its creation or acquisition of any new Subsidiary (other than a Subsidiary
that will be a Maxxcom Group Member) and, a copy of the Constitutional
Documents of such new Subsidiary.
13.1.17 ERISA and Analogous Notices. The Borrower shall deliver or cause to be
delivered to the Agent (in sufficient numbers to provide a copy for the Agent
and each of the Senior Lenders) the following information and notices as soon
as reasonably possible, and in any event within ten (10) Business Days:
(a) after the Borrower or any ERISA Affiliate knows that a
Termination Event has occurred, a written statement of a
Senior Officer of the Borrower describing such Termination
Event and the action, if any, which the Borrower or any
ERISA Affiliate has taken, is taking or proposes to take
with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC (or any analogous foreign
Governmental Body in relation to Non-US Pension Benefit
Plans) with respect thereto;
(b) after any Restricted Group Member knows that a prohibited
transaction defined in Section 406 of ERISA or Section 4975
of the Internal Revenue Code has occurred, a statement of a
Senior Officer of the Borrower describing such transaction
and the action which the Borrower or any ERISA Affiliate has
taken, is taking or proposes to take with respect thereto;
(c) after the filing of the same with the IRS, a copy of each
funding waiver request filed with respect to any Benefit
Plan and all communications received by the Borrower or any
ERISA Affiliate with respect to such request;
(d) after the Borrower or any ERISA Affiliate receives notice of
the PBGC's intention to terminate a Benefit Plan or to have
a trustee appointed to administer a Benefit Plan, copies of
each such notice;
(e) after any Restricted Group receives notice of any
unfavourable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Internal
Revenue Code, copies of each such notice and letter;
(f) after the Borrower or any ERISA Affiliate receives notice
from a Multiemployer Plan regarding the imposition of
withdrawal liability, copies of each such notice;
(g) after the Borrower or any ERISA Affiliate fails to make a
required instalment or any other required payment under
Section 412 of the Internal Revenue Code on or before the
due date for such instalment or payment, a notification of
such failure;
(h) with respect to a Non-US Pension Plan, after the Borrower or
any Restricted Group Member fails to make a required
instalment or other payment in accordance with a schedule of
contributions, according to the terms of such Non-US Pension
Plan or as otherwise required by a foreign Governmental
Body, a notification of such failure;
(i) after the Borrower or any ERISA Affiliate knows (i) a
Multiemployer Plan has been terminated, (ii) the
administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (iii) the PBGC
has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan; and
(j) after the Borrower receives reasonable advance written
notice from the Agent requesting the same, copies of any
Non-US Employee Benefit Plan and related documents, reports
and correspondence specified in such notice.
13.1.18 ERISA Compliance. The Borrower shall, and shall cause each other
Restricted Group Member to, and shall use its best efforts to cause its ERISA
Affiliates who are not Restricted Group Members to, establish, maintain and
operate all Plans to comply in all material respects with the provisions of
ERISA, the Internal Revenue Code, all other Applicable Laws and the respective
requirements of the governing documents for such Plans.
13.1.19 Non-US Employee Benefit Plan Compliance. The Borrower shall, and shall
cause each of its other Restricted Group Members to, establish, maintain and
operate all Non-US Employee Benefit Plans to comply in all material respects
with all laws, regulations and rules applicable thereto and the respective
requirements of the governing documents for such Plans.
13.1.20 Interest Holders. The Borrower also shall require, and shall take
reasonable measures to ensure compliance with the requirement, that no Person
who owns any other direct interest in any Restricted Group Member is or shall
be listed on any of the Lists or is or shall be a Designated Person. This
Section 13.1.20 shall not apply to any Person to the extent that such Person's
interest in any Restricted Group Member is through a US Publicly Traded
Entity. If requested by the Agent, the Borrower shall deliver to the Agent a
schedule of the name, legal domicile address and (for entities) place of
organization of each holder of a direct or indirect legal or beneficial
interest in the Restricted Group Members.
13.1.21 Anti-Terrorism Policies. The Borrower agrees to adopt and maintain
adequate policies, procedures and controls to ensure that it is in compliance
with all Anti-Terrorism Laws and related government guidance (such policies,
procedures and controls are collectively, the "Anti-Terrorism Policies"). The
Borrower consents to the disclosure to U.S. regulators and law enforcement
authorities by the Senior Lenders or any of their respective Affiliates or
agents of such information about any Restricted Group Member and the owners of
direct and indirect interests in any Restricted Group Member that the Agent or
Senior Lenders reasonably deems necessary or appropriate to comply with
applicable Anti-Terrorism Laws and Anti-money Laundering Laws.
13.1.22 Notification of Agent; Quarantine Steps. The Borrower shall
immediately notify the Agent if such Person obtains knowledge that any holder
of a direct or indirect interest in any Restricted Group Member, or any
director, manager or officer of any of such holder, (a) has been listed on any
of the Lists, (b) has become a Designated Person, (c) is under investigation
by any Governmental Body for, or has been charged with or convicted of, money
laundering drug trafficking, terrorist-related activities or other money
laundering predicate crimes, or any violation of the BSA, (d) has been
assessed civil penalties under any Anti-money Laundering Laws, or (e) has had
funds seized or forfeited in an action under any Anti-money Laundering Laws.
13.1.23 No Violation of Anti-Terrorism Laws. The Restricted Group Members
shall not (a) violate any of the prohibitions set forth in the Anti-Terrorism
Laws applicable to any of them or the business that they conduct, and (b)
require any Senior Lender to take any action that would cause any Senior
Lender to be in violation of the prohibitions set forth in the Anti-Terrorism
Laws, it being understood that each Senior Lender can refuse to honour any
such request or demand otherwise validly made by the Borrower under this
Agreement or any Loan Document.
13.2 Negative Covenants. Until Payment in Full of the Finance Obligations,
the Borrower covenants and agrees with the Finance Parties that it will, and
(where the context so admits) it will ensure that each Restricted Group Member
will, duly perform and comply with each of the following negative covenants:
13.2.1 Limitation on Indebtedness. No Restricted Group Member will create,
assume, incur, otherwise become liable upon or permit to exist any
Indebtedness, other than:
(a) Indebtedness secured by any Permitted Lien described in
paragraphs (q), (r) and (t) of the definition of "Permitted
Liens";
(b) unsecured Indebtedness owing to Unrelated Parties in an
aggregate outstanding amount for the entire Restricted Group
of up to fifty percent (50%) of the Threshold Amount;
(c) Subordinated Debt;
(d) Indebtedness under any Finance Document;
(e) Derivative Exposure permitted under Subsection 13.2.10;
(f) Indebtedness owing by one Restricted Group Member to
another; provided that the aggregate outstanding amount of
all such Indebtedness owing by all Restricted Group Members
that are not Secured Group Members may not exceed the
Threshold Amount;
(g) Deferred Acquisition Consideration or the current portion of
Put/Call Obligations; and
(h) Indebtedness permitted under Subsection 13.2.2(c).
13.2.2 Financial Assistance. No Restricted Group Member will provide any
financial assistance by means of a loan, guarantee or otherwise to any Person,
other than:
(a) to another Restricted Group Member that is a Secured Group
Member;
(b) to another Restricted Group Member that is not a Secured
Group Member so long as the aggregate value of all financial
assistance permitted by this paragraph (b) for the entire
Restricted Group does not exceed (on a cumulative basis from
the date hereof) the Threshold Amount; and
(c) guarantees in existence on the date hereof by the Borrower
of (i) any amount, actual or contingent, matured or
unmatured, which is owing by a Maxxcom Group Member to a
Person that is acting at arm's length with the Maxxcom Group
and holds Capital Stock in a Maxxcom Group Member acquired
before that Maxxcom Group Member first became a Maxxcom
Group Member (and any transferee thereof (in accordance with
the provisions of the existing Acceptable LLC Agreement)
acting at arm's length to the Maxxcom Group) and which (A)
is, in substance, an amount owing on account of an unpaid
portion of the purchase price payable for (1) Capital Stock
of a Maxxcom Group Member, or (2) Business Assets of a
Maxxcom Group Member which, in either case, was or were
acquired from such Person, its Affiliate or predecessor in
title as part of a Business Acquisition, or (B) is an "earn
out" amount payable under the Constitutional Documents of
any Maxxcom Group Member in effect at the date hereof
without regard for any change made to them, unless the
Required Lenders consent to the change or it is an
Immaterial Amendment, or (ii) the current portion of any
amount, actual or contingent, matured or unmatured, which is
owing by any Maxxcom Group Member on account of the
purchase, repurchase, redemption, retraction or other
acquisition of, or other distribution in respect of, Capital
Stock of a Maxxcom Group Member; provided that the amounts
referred to in clauses (i) and (ii) of this paragraph (c)
are payable in accordance with an Acceptable LLC Agreement.
13.2.3 Sale of Assets. No Restricted Group Member will dispose of any of its
Business Assets, except for:
(a) disposals of inventory made in the ordinary course of
carrying on its day to day business for cash or Cash
Equivalent, to Unrelated Parties;
(b) disposals of obsolete, redundant, damaged or otherwise
unusable goods, machinery and equipment;
(c) disposals of any of its Business Assets (i) to a Secured
Group Member or (ii) to another Restricted Group Member on
commercially reasonable terms (including normal trade terms,
but excluding for certainty deferred payment terms) at fair
market value consistent with commercial relations between
Persons that deal at arm's length;
(d) disposals of defaulted accounts in order to realize on them
in a commercially reasonable manner;
(e) disposals of Business Assets in any period of four (4)
consecutive Fiscal Quarters having a fair market value for
the entire Restricted Group of up to the Threshold Amount;
and
(f) disposals of the non-core Business Assets listed in Schedule
13.2.3(f).
13.2.4 Negative Pledge. No Restricted Group Member will create, incur, assume
or otherwise become liable upon or permit to exist any Lien on, against or
with respect to any of its Business Assets, except for Permitted Liens.
13.2.5 No Merger, Amalgamation, etc. No Restricted Group Member will enter
into any merger, amalgamation, arrangement, consolidation, liquidation,
winding-up, dissolution or similar transaction, except that any Restricted
Group Member that is a Wholly-Owned Subsidiary of the Borrower may liquidate
or dissolve voluntarily into the Borrower or another such Wholly-Owned
Subsidiary or merge, consolidate or amalgamate with and into any other
Restricted Group Member that is a Wholly-Owned Subsidiary of the Borrower so
long as:
(a) no Default has occurred and is continuing at such time nor
would any result from such merger, consolidation or
amalgamation (in this subsection, the "Merger");
(b) the successor resulting from the Merger (the "Merged
Entity") possesses all the property, rights, privileges and
franchises of each Restricted Group Member party to such
Merger (each, a "Merging Group Member") and assumes and is
subject to all the obligations and liabilities of each such
Merging Group Member under each Finance Document to which
such Merging Group Member is party;
(c) the benefits of each Finance Document to which each Merging
Group Member is a party extend to the performance by the
Merged Entity of its obligations under each Loan Document;
(d) the validity, enforceability and effect of the Finance
Documents, and the validity, effect, priority and perfection
of the Security, shall not be affected in any adverse way;
(e) the Merged Entity is a Wholly-Owned Subsidiary of the
Borrower and a Restricted Group Member; and
(f) legal counsel for each Merging Group Member and the Merged
Entity shall have provided an opinion to the Lenders, in
form and substance satisfactory to the Required Lenders,
addressing such matters referred to in paragraphs (a) to (e)
above as the Required Lenders shall reasonably require.
13.2.6 Nature of Business. No Restricted Group Member will change the nature
of the Restricted Group's Business or cease to carry on the Restricted Group's
Business or any substantial part thereof; and no Restricted Group Member will
engage in any new business other than a business engaged solely in a Core
Business.
13.2.7 Limitation on Investments. No Restricted Group Member will make any
new Investments, other than:
(a) Investments in Cash Equivalents;
(b) Investments in any existing Secured Group Member that are
not made in connection with any Business Acquisition;
(c) Investments in any existing Restricted Group Member that is
not a Secured Group Member and that are not made in
connection with any Business Acquisition so long as the
aggregate cumulative amount of all Investments made in such
Restricted Group Members does not exceed the Threshold
Amount during any Fiscal Year;
(d) Investments permitted under Section 13.2.8;
(e) Investments in Capital Stock of non-Wholly-Owned
Subsidiaries of Restricted Group Members that are
Subsidiaries of the Borrower to the extent required under
Put/Call Obligations;
(f) Investment in Capital Stock of any Person that is not, and
upon acquisition of such Capital Stock does not become, a
Subsidiary of a Restricted Group Member, but it does grant
the guarantees and Liens in favour of the Agent contemplated
by Article 10 within 30 days of such Investment being made;
and
(g) Investments in Capital Stock of any Person that does not
become a Subsidiary of a Restricted Group Member or a
Secured Group Member may be acquired if the aggregate
purchase price paid by the entire Restricted Group for all
such Investments during any Fiscal Year does not exceed
USD4,000,000 (or the Equivalent Amount in Canadian Dollars
or other foreign currency);
provided that, in each case other than paragraph (a), no Default has occurred
or could reasonably be expected to occur after such Investment is made and
such Investment is in a Core Business.
13.2.8 Limitations on Acquisitions. No Restricted Group Member will make any
further Business Acquisition, except as provided below:
(a) if the aggregate purchase price paid by the entire
Restricted Group for Business Acquisitions made during any
Fiscal Year does not exceed USD15,000,000 (or the Equivalent
Amount in Canadian Dollars or other foreign currency), then
each such Business Acquisition may be made so long as (i) it
is made by a Secured Group Member or by a Restricted Group
Member that becomes a Secured Group Member within 30 days of
such Business Acquisition taking place and (ii) each
Subsidiary acquired under or in connection with such
Business Acquisition becomes a Secured Group Member within
30 days of such Business Acquisition taking place; and
(b) if the aggregate purchase price paid by the entire
Restricted Group for Business Acquisitions made during any
Fiscal Year equals or exceeds USD15,000,000 (or the
Equivalent Amount in Canadian Dollars or other foreign
currency), then each such Business Acquisition may be made
so long as (i) the provisions set out in clauses (i) and
(ii) of paragraph (a) above are complied with, (ii) before
such Business Acquisition takes place, the Borrower provides
the Agent with pro forma financial statements prepared as at
the date such Business Acquisition is to take place and on
the basis that such Business Acquisition has taken place and
a pro forma Compliance Certificate prepared as at such date
and on such basis demonstrating pro forma compliance with
the financial tests set out in Section 13.3, (iii) the
Required Lenders shall have completed and been satisfied
with the results of all due diligence enquiries made by the
Lenders in respect of such Business Acquisition and (iv) the
Required Lenders have consented to such Business
Acquisition;
provided that no Default has occurred or could reasonably be expected to occur
after such Business Acquisition takes place and such Business Acquisition is
in a Core Business.
13.2.9 Redemptions and Distributions; Dividends. No Restricted Group Member
will (a) declare, set apart for payment or pay any dividends or other
distributions to shareholders on any of its Capital Stock or (b) redeem,
retract, purchase for cancellation or retire or otherwise acquire for value in
any manner any of its Capital Stock or otherwise reduce its capital in any
manner; except that (i) any Restricted Group Member that is a Wholly-Owned
Subsidiary of a Secured Group Member may take any of the actions referred to
in clauses (a) and (b), (ii) any Restricted Group Member may purchase Capital
Stock in non-Wholly-Owned Subsidiaries of Restricted Group Members that are
Subsidiaries of the Borrower to the extent required under Put/Call Obligations
and/or Deferred Acquisition Consideration agreements, (iii) the Borrower may
purchase its own Capital Stock pursuant to a normal course issuer bid through
the facilities of the Toronto Stock Exchange or otherwise pursuant to the
provisions of Sections 93(3) (a), (b), (c), (d), (e) or (f) of the Securities
Act (Ontario) and (iv) any Subsidiary of MDC/KBP Acquisition Inc. may declare
and pay cash dividends and cash distributions in accordance with the
Acceptable LLC Agreement in relation to it; provided, in each case, that no
Default has occurred or could reasonably be expected to occur upon such
purchase taking place or on or before the expiry of the first full Fiscal
Quarter ending after the date such purchase takes place.
13.2.10 Derivatives. No Restricted Group Member will enter into any Derivative
except for the purpose of paying or hedging its actual or anticipated normal
business capital expenditures and operating revenues and expenses or hedging
its interest rate or currency exposure on its Debt.
13.2.11 No Continuance. No Restricted Group Member will continue under the
laws of any other jurisdiction, save that the Borrower may continue under the
Canada Business Corporations Act (Canada).
13.2.12 Fiscal Year. No Restricted Group Member will change its fiscal year
to any fiscal year other than to the Fiscal Year.
13.2.13 Material Contracts. No Restricted Group Member will permit any
material change in any Material Contract to take place, except to the extent
permitted in any related Material Contract security agreement entered into
between that Restricted Group Member and the Agent.
13.2.14 Constitutional Documents. No Restricted Group Member will change its
Constitutional Documents, except to the extent permitted by Subsection 13.2.5
and (b) for any change that is an Immaterial Amendment.
13.2.15 Benefit Plans. No Restricted Group Member will:
(a) engage, or permit any of its Subsidiaries to engage, in any
prohibited transaction described in Sections 406 of ERISA or
4975 of the Internal Revenue Code for which a statutory or
class exemption is not available or a private exemption has
not been previously obtained from the DOL;
(b) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal
Revenue Code), with respect to any Benefit Plan, whether or
not waived;
(c) fail, or permit any ERISA Affiliate who is a Restricted
Group Member to fail, to pay timely required contributions
or annual instalments due with respect to any waived funding
deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate who is a Restricted
Group Member to terminate, any Benefit Plan which would
result in any liability of the Borrower or any ERISA
Affiliate under Title IV of ERISA;
(e) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate
may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
(f) fail, or permit any ERISA Affiliate who is a Restricted
Group Member to fail, to pay any required instalment or any
other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such instalment
or other payment;
(g) amend, or permit any ERISA Affiliate who is a Restricted
Group Member to amend, a Benefit Plan resulting in an
increase in current liability for the plan year such that
the Borrower or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the
Internal Revenue Code;
(h) permit any further unfunded liabilities with respect to any
Non-US Pension Plan which would trigger a requirement to
make a material increase in contributions to fund any such
liabilities; or
(i) fail, or permit any other Restricted Group Member to fail,
to pay any required contributions or payments to a Non-US
Pension Plan on or before the due date for such required
instalment or payment.
13.2.16 Anti-Terrorism Laws. No Restricted Group Member will, directly or
indirectly, (a) knowingly conduct any business or engage in making or
receiving any contribution of funds, goods or services to or for the benefit
of any Designated Person or any other Person identified in any List, (b)
knowingly deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to any Anti-Terrorism Law,
(c) knowingly repay any Advance with any funds derived from any unlawful
activity with the result that the making of the Loans would be in violation of
law, or (d) knowingly 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 any Anti-Terrorism Law (and the
Borrower shall deliver to the Agent any certification or other evidence
requested from time to time by the Agent in its reasonable discretion,
confirming compliance with this Section 13.2.7).
13.3 Financial Covenants. Until Payment in Full of all Finance Obligations,
the Borrower covenants and agrees with the Finance Parties that it will ensure
that each of the following financial tests is complied with at all times:
13.3.1 Maximum Total Debt/Adjusted EBITDA Ratio. The Total Debt/Adjusted
EBITDA Ratio for each Test Period shall not exceed 2.0:1.
13.3.2 Maximum Total Debt/Total Capitalization Percentage. The Total
Debt/Total Capitalization Percentage shall not be greater than fifteen percent
(15%).
13.3.3 Minimum Shareholders Equity. Shareholders Equity as at any date
shall not be less than the sum of (A) USD155,000,000 plus (b) fifty percent
(50%) of the sum of the Restricted Group's positive combined net after tax
income for each Fiscal Year completed on or before that date, but after
December 31, 2004, in which there was positive combined net after tax income
of the Restricted Group.
13.3.4 Minimum Adjusted Interest Coverage. The Adjusted Interest Coverage
Ratio for each Test Period shall not be less than 2.5:1.
ARTICLE 14
EVENTS OF DEFAULT
14.1 Events of Default. Any default, breach, failure, event, state or
condition described below shall constitute an Event of Default and a default
by the Borrower under this Agreement:
14.1.1 Non-Payment of Principal. The Borrower fails to pay any principal
amount outstanding hereunder when due.
14.1.2 Non-Payment of Interest and Other Amounts. The Borrower fails to pay
any interest, Fee or other amount (excluding principal) payable hereunder when
due and such failure continues unremedied for more than three (3) Business
Days.
14.1.3 Misrepresentation. Any representation or warranty which is not
already subject to a materiality qualification made or deemed made by any
Restricted Group Member in any Finance Document is found to have been false or
misleading in any material respect or any representation or warranty which is
subject to a materiality qualification made or deemed made by any Restricted
Group Member in any Finance Document is found to have been false or misleading
in any respect.
14.1.4 Financial Tests. Any financial test contained in Section 13.3 is not
complied with.
14.1.5 Breach of Certain Covenants. The Borrower fails to perform or comply
with any provision or obligation contained in Sections 10.1, 10.2, 13.1.2 and
13.2.
14.1.6 Breach of Other Covenants. Any Restricted Group Member fails to perform
or comply with any provision or obligation contained in any Finance Document
to which it is a party and such failure continues unremedied for a period of
30 days after any Restricted Group Member knows of such failure (other than
those referred to in Subsections 14.1.1, 14.1.2, 14.1.3, 14.1.4 and 14.1.5
above).
14.1.7 Cross-Default. Any Restricted Group Member defaults under any one or
more agreements, documents or instruments relating to Indebtedness in an
aggregate amount exceeding the Threshold Amount and, if there is any cure
period applicable to such default, such cure period lapses without the default
being cured.
14.1.8 Unsatisfied Judgments. Any one or more Awards for the uninsured payment
of money in an aggregate amount for the entire Restricted Group exceeding the
Threshold Amount are rendered against any one or more Restricted Group Members
and such Restricted Group Members do not discharge same in accordance with its
terms, or procure a stay of execution thereof, or deposit with the Agent cash
collateral or other security satisfactory to the Required Lenders in the
amount of such Awards to be set aside to pay such Awards and bearing interest
at prevailing commercial rates agreed between the Agent and such Restricted
Group Member accruing to the benefit of such Restricted Group Member, within
30 days from the date of the entry of each such Award and in any event at
least five (5) Business Days before any such Award may be executed upon.
14.1.9 Enforcement of Liens. Any one or more Persons entitled to any Liens on
any Business Assets of any one or more Restricted Group Members having claims
exceeding the Threshold Amount take possession of any such Business Assets or
any one or more seizures, executions, garnishments, sequestrations,
distresses, attachments or other equivalent processes in respect of claims
against any one or more Restricted Group Member exceeding the Threshold Amount
are issued or levied against all or any material part of the Business Assets
of any one or more Restricted Group Members and such Restricted Group Members
do not discharge the same or provide for the discharge in accordance with
their terms, or procure a stay of execution thereof, or deposit with the Agent
cash collateral or other security satisfactory to the Required Lenders in the
amount of the claims to be set aside to pay such Awards and bearing interest
at prevailing commercial rates agreed between the Agent and such Restricted
Group Member accruing to the benefit of such Restricted Group Member, within
30 days from the date such possession or process first takes effect and in any
event at least five (5) Business Days before such Business Assets are capable
of being disposed of thereunder.
14.1.10 Insolvency. Any Bankruptcy Event with respect to any Restricted Group
Member occurs; or any Restricted Group Member takes corporate or other
internal governance action to authorize any Bankruptcy Proceeding.
14.1.11 Cessation of Business. Any Restricted Group Member ceases or suspends
or threatens to cease or suspend all or a substantial portion of its business.
14.1.12 Security Imperilled. If (a) any Litigation is commenced which, if
determined adversely to any Restricted Group Member or to the rights of the
Senior Lenders, would constitute a Material Adverse Change, (b) any Finance
Document or any material right thereunder becomes or is determined by a court
of competent jurisdiction to be invalid, unenforceable or ineffective, (c) the
Lien of any Security shall not be or cease to be valid and perfected ranking
in priority in the manner contemplated herein or in the Security Documents,
other than by reason of the direct act or omission of the Agent or the Lenders
or (d) any Restricted Group Member or any other Person party to any Finance
Document denies that it has any or further obligations thereunder or
challenges the validity of any provision thereof or of the Security.
14.1.13 Material Adverse Change. Any Material Adverse Change occurs.
14.1.14 Change of Control or Ownership. Any Change in Control occurs, any
Restricted Group Member that is not the Borrower ceases to be a Subsidiary of
the Borrower or any Wholly-Owned Subsidiary of a Restricted Group Member
(other than any of the Maxxcom Group) ceases to be a Wholly-Owned Subsidiary
of a Restricted Group Member.
14.1.15 Termination Event. Any Termination Event occurs which the Agent
reasonably believes could subject the Borrower or any ERISA Affiliate to a
liability in excess of the Threshold Amount.
14.1.16 Waiver of Minimum Funding Standard. If the plan administrator of any
Plan applies under Section 412(d) of the Internal Revenue Code for a waiver of
the minimum funding standards of Section 412(a) of the Internal Revenue Code
and the Agent believes that the substantial business hardship upon which the
application for the waiver is based could subject the Borrower or any ERISA
Affiliate to liability in excess of the Threshold Amount.
14.1.17 Requirement to Pay, etc. Any step is taken to issue any requirement to
pay from the Minister of Finance of Canada or to issue any garnishment order
directing the Agent or any Finance Party to pay more than the Threshold Amount
on account of any Restricted Subsidiary to the Minister of Finance or such
garnishing creditor.
14.1.18 ▇▇▇▇▇▇-▇▇▇▇▇▇ [USA] Sublease. ▇▇▇▇▇▇-▇▇▇▇▇▇ [USA] Ltd. is given a
"Default Notice" referred to and defined in that certain Consent, Waiver and
Agreement by Sublessor of Real Estate listed as item 29 in Schedule 10.1 (the
"Landlord Consent") and fails to cure the defaults referred to therein within
the "Cure Period" referred to and defined in the Landlord Consent.
14.2 Termination and Acceleration. Upon the occurrence of an Event of
Default, the Agent may (or, subject to Section 15.9, at the direction of the
Required Lenders shall) do any one or more of the following:
(a) declare the whole or any item or part of the Total
Commitment or the unutilized portion (if any) of any Credit
Facility to be cancelled, terminated or reduced, whereupon
the Lenders (to the extent applicable) shall not be required
to make any further Advance hereunder in respect of such
portion of the Total Commitment or each Credit Facility
cancelled, terminated or reduced;
(b) accelerate the maturity of all or any item or part of the
Loan Obligations of the Borrower hereunder and declare them
to be immediately due and payable, whereupon they shall be
so accelerated and become so due and payable;
(c) suspend any rights of the Borrower under any Loan Document,
whereupon such rights shall be so suspended;
(d) demand payment under each Guarantee and any other guarantee
comprised in the Security;
(e) demand that the Borrower pay (i) the Outstanding Amount of
all outstanding Acceptances in prepayment of its obligations
under Section 5.7 in respect of outstanding Acceptances,
(ii) its Positive Derivative Exposure, if any, to each
Qualified Hedge Counterparty and (iii) the Standby
Instrument Exposure under all outstanding Standby
Instruments in prepayment of its obligations under
Subsection 4.2.2 in respect thereof, whereupon the Borrower
shall be obliged to (A) prepay immediately to the Agent for
the account of the Lenders under the Revolving Facility the
Outstanding Amount of all outstanding Acceptances, (B) pay
immediately to the Agent for the account of each Qualified
Hedge Counterparty such Positive Derivative Exposure under
all Derivatives entered into by it with each Qualified Hedge
Counterparty and (C) pay immediately to the Agent for the
account of each Issuing Bank such Standby Instrument
Exposure until such Standby Instruments expire or are drawn
upon, whereupon the Issuing Bank shall, subject to other
provisions of this Section 14.2, account to and return any
overpayment to the Borrower;
(f) enforce and realize upon all or any part of the Security;
and
(g) take any other action, commence and prosecute any Litigation
or exercise such other rights as may be permitted by
Applicable Law (whether or not provided for in any Finance
Document) at such times and in such manner as the Agent may
consider expedient;
all without any additional notice, demand, presentment for payment, protest,
noting of protest, dishonour, notice of dishonour or any other action being
required. If an Event of Default referred to in Subsection 14.1.10 occurs,
unless the Required Lenders otherwise agree, the Total Commitment shall be
cancelled and the Loan Obligations shall be accelerated and become immediately
due and payable automatically without any action on the part of the Agent or
any Lender being required.
14.3 Waiver. The Required Lenders may waive any Default. No waiver,
however, shall be deemed to extend to a subsequent Default, whether or not the
same as or similar to the Default waived, and no act or omission by the Senior
Lenders shall extend to, or be taken in any manner whatsoever to affect, any
subsequent Default or the rights of the Senior Lenders arising therefrom. Any
such waiver must be in writing and signed by the Agent to be effective. No
failure on the part of the Senior Lenders to exercise, and no delay by the
Senior Lenders in exercising, any rights under any Finance Document shall
operate as a waiver of such rights. No single or partial exercise of any such
rights shall preclude any other or further exercise of such rights or the
exercise of any other rights.
Article 15
THE AGENT AND ADMINISTRATION OF THE CREDIT FACILITIES
15.1 Appointment and Authorization. Each Finance Party irrevocably appoints
and authorizes the Agent to execute, deliver and take such actions as its
agent under each Loan Document to which the Agent is party and to exercise
such rights under each such Loan Document as are specifically delegated to the
Agent by the terms thereof, together with such rights as are reasonably
incidental thereto. The Agent accepts such appointment and agrees to perform
its obligations as such Agent under each such Loan Document in accordance with
the provisions hereof.
15.2 Declaration of Agency. The Agent declares that it shall hold the
Security entrusted to it, the Collateral charged thereby and the rights
granted to it under each other Loan Document, for its own benefit and as agent
for the rateable benefit of each Finance Party. The rights vested in the Agent
by any Loan Document shall be performed by the Agent in accordance with this
Article 15.
15.3 Protection of Agent. The Agent shall not be liable for any action
taken or omitted to be taken by it under any Loan Document or in connection
therewith, except to the extent of any losses and expenses that are determined
by a Final Judgment to have directly resulted from the gross negligence or
willful misconduct of the Agent. In no event shall the Agent be liable to the
Borrower, any Guarantor or any Finance Party for special, indirect,
consequential or punitive damages (as opposed to direct damages) arising out
of or in connection with, or as a result of any Finance Document or the
performance, improper performance or non-performance of any obligation
thereunder.
15.4 Interest Holders. The Agent may treat each Lender as the holder of
all of the rights of such Lender in respect of the Credit Facilities until a
duly executed and delivered Loan Transfer Agreement signed by such Lender and
the Transferee, completed in form and substance satisfactory to the Agent, has
been delivered to the Agent and the Agent has been paid its required
processing fee for such loan transfer. The Agent may treat each Qualified
Hedge Counterparty as the holder of all rights of such Qualified Hedge
Counterparty under all Qualified Hedge Agreements entered into by it until a
duly executed and delivered assignment and assumption agreement signed by the
Borrower, such Qualified Hedge Counterparty and the proposed assignee, in form
and substance satisfactory to the Agent has been delivered to the Agent and
the Agent has been paid such processing fee for such assignment as the Agent
shall reasonably require together with payment of all fees, costs and expenses
of the Lenders' Counsel incurred or anticipated being incurred in completing
such assignment.
15.5 Consultation with Professionals. The Agent may engage and consult
with the Lenders' Counsel, accountants, consultants, financial advisors and
other experts and the Agent shall not be liable for any action taken or not
taken or suffered by it in good faith and in accordance with the advice and
opinion of the Lenders' Counsel or such accountants, consultants, financial
advisors or other experts.
15.6 Documents. The Agent shall not be under any duty or obligation to
examine, enquire into or pass upon the validity, effectiveness or genuineness
of any Finance Document or any other agreement, document, instrument or
communication furnished pursuant to or in connection with any Finance
Document, and the Agent shall be entitled to assume that the same are valid,
effective and genuine, have been signed or sent by the proper parties and are
what they purport to be.
15.7 The Agent and its Subsidiaries and Affiliates. With respect to its
Commitments, those portions of the Credit Facilities made available by it and
each Qualified Hedge Agreement entered into by it, the Agent shall have the
same rights hereunder as any other Finance Party and may exercise the same as
though it were not the Agent and the Agent and its Subsidiaries and Affiliates
may accept deposits from, lend money to and generally engage in any kind of
business with any Restricted Group Member and its Affiliates and Persons doing
business with any Restricted Group Member or any of its Affiliates as if it
were not the Agent and without any obligation to account therefor.
15.8 Responsibility of the Agent. The obligations of the Agent to the
Finance Parties under each Loan Document to which the Agent is party are only
those expressly set forth in such Loan Documents, subject as otherwise
provided in this Article 15. The Agent shall not have any fiduciary obligation
to any Finance Party. The Agent shall only have those contractual obligations
expressly set forth in each Loan Document to which the Agent is party. The
Agent shall not have any duty or obligation to investigate whether any Default
has occurred. The Agent shall be entitled to assume that no Default has
occurred and is continuing, unless any officer of the Agent charged with the
administration of the Loan Documents has actual knowledge or has been notified
by the Borrower of such fact or has been notified by a Lender that such Lender
considers that a Default has occurred and is continuing, such notification to
specify in detail the nature thereof.
15.9 Action by the Agent.
15.9.1 Exercise of Discretion. The Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action which it may be able to take under or in respect of, any
Loan Document, unless the Agent has been instructed by the Required Lenders to
exercise such rights or to take or refrain from taking such action; provided,
however, that the Agent shall not release or postpone any Guarantee or
release, discharge or subordinate any Lien created under any Security without
the consent of all the Lenders, unless expressly permitted or required to do
so by the provisions of any Loan Document. The Agent shall not incur any
obligations under or in respect of any Loan Document with respect to anything
which it may do or refrain from doing in the reasonable exercise of its
judgment or which may seem to it to be necessary or desirable in the
circumstances, except to the extent of any losses and expenses that are
determined by a Final Judgment to have directly resulted from the gross
negligence or willful misconduct of the Agent.
15.9.2 Instruments from Required Lenders. The Agent shall in all cases be
fully protected in acting or refraining from acting under any Loan Document in
accordance with the instructions of the Required Lenders, and any action taken
or refrained from being taken pursuant to such instructions shall be binding
on all Finance Parties.
15.9.3 Compliance with Applicable Law. Notwithstanding anything else herein
contained, the Agent may refrain from doing anything which would or might in
its opinion be contrary to any Applicable Law or which would or might
otherwise render it liable to any Person and may do anything which is, in its
opinion, necessary to comply with any Applicable Law.
15.9.4 Insurance. Without prejudice to the provisions of any other Loan
Document, the Agent shall have the right, but not the obligation, to insure
any of the Collateral or to require any other Person to maintain any such
insurance and it shall not be responsible for any losses and expenses which
may be suffered by any Person as a result of the lack of or inadequacy or
insufficiency of any such insurance.
15.9.5 Litigation. The Agent shall have the right to institute, prosecute
and defend any Litigation affecting the Agent, any rights of the Finance
Parties under the Finance Documents, the Collateral or the Security and,
subject to Section 15.18, to compromise any matter or difference or submit any
such matter or difference to arbitration and to compromise or compound any
debts owing to the Agent as agent or any other claims against it as such agent
upon being provided with such evidence as shall seem sufficient to the Agent.
15.9.6 New Obligations. The Agent shall have the right to give or enter into
any obligation as it shall, with the approval of the Required Lenders and
subject to all of the provisions of the Loan Documents to which the Agent is
party, think fit in relation to the Finance Documents, the Collateral or the
Security.
15.9.7 Agent May Require Security. Notwithstanding Subsection 15.9.1, the
Agent may refrain from acting in accordance with any instructions of the
Required Lenders to begin any Litigation, enforce any Security or to take
management or control of any Collateral, arising out of or in connection with
any Finance Document until it has received such security as it may require
(whether by way of payment in advance or otherwise) for all losses and
expenses and disbursements which it anticipates it will or may expend or incur
in complying with such instructions.
15.9.8 Standard of Promptness. Where the Agent is obliged by the provisions
of this Article 15 to give any notice or notification "promptly" or
"forthwith", if it gives such notice or notification within two (2) Business
Days of an officer of it charged with the administration of this Agreement
becoming aware of the subject matter of such notice or notification, it shall
be deemed to have given such notice or notification promptly or forthwith.
15.10 Notice of Events of Default. In the event that an officer of the
Agent charged with the administration of this Agreement is notified of any
Event of Default, the Agent shall promptly notify the Lenders, and, subject to
Section 15.9, the Agent shall take such action and assert such rights under
the Loan Documents as the Required Lenders shall request in writing, and the
Agent shall not be subject to any liability by reason of its acting pursuant
to any such request. Prior to receiving any instructions from the Required
Lenders in respect of such Event of Default, the Agent may, but shall not be
obliged to, take such action or assert such rights (other than those matters
requiring unanimous Lender consent under any other provision of this
Agreement) as it deems in its discretion to be advisable for the protection of
the Finance Parties, except that, if the Required Lenders have instructed the
Agent not to take such action or assert such rights, in no event shall the
Agent act contrary to those instructions.
15.11 Responsibility Disclaimed. The Agent in such capacity shall not be
under any obligation whatsoever:
(a) to any Restricted Group Member as a consequence of any
failure or delay in the performance by, or any breach by,
any Finance Party of any of its obligations under any
Finance Document;
(b) to any Finance Party, as a consequence of any failure or
delay in performance by, or any breach by, any Restricted
Group Member of any of its obligations under any Finance
Document; or
(c) to any Finance Party for any statements, representations or
warranties in any Finance Document or any other agreement,
document or instrument contemplated by any Finance Document
or in any other information provided pursuant to any Finance
Document or any other agreement, document or instrument
contemplated by any Finance Document or for the validity,
effectiveness, enforceability or sufficiency of any Finance
Document or any other agreement, document or instrument
contemplated thereby.
15.12 Indemnification.
15.12.1 Finance Parties to Indemnify Agent. Each of the Finance Parties
severally agrees to indemnify the Agent (to the extent not reimbursed by the
Borrower on demand) pro rata according to their respective Total Exposures
from and against any and all losses and expenses or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
the Agent in any way relating to or arising out of any Finance Document or any
other agreement, document or instrument contemplated thereby or any action
taken or omitted by the Agent under any Finance Document or any agreement,
document or instrument contemplated thereby, except that no Finance Party
shall be liable to the Agent for any portion of such losses and expenses or
disbursements to the extent they are determined by a Final Judgment to have
directly resulted from the gross negligence or willful misconduct of the
Agent.
15.12.2 Agent May Indemnify Itself. The Agent may indemnify itself out of the
Collateral charged by the Security, or any funds received by the Agent
pursuant to Section 15.20 against all of the losses and expenses or
disbursements suffered or incurred by the Agent in connection with any matter
or thing done or omitted to be done in any way relating to any Finance
Document, except for any portion of such losses and expenses or disbursements
to the extent they are determined by a Final Judgment to have directly
resulted from the gross negligence or willful misconduct of the Agent.
15.13 Protection of Representatives. Each reference in Sections 15.1, 15.3,
15.9, 15.10, 15.11, 15.12, 15.15 and 15.20 to the Agent shall (to the extent
the context so admits) be deemed to include the Agent and its Representatives
and the Agent shall be constituted as agent and bare trustee of each such
Representative and shall hold and enforce their rights under those Sections
for their respective benefits.
15.14 Credit Decision. Each Finance Party represents and warrants to the
Agent that:
(a) in making its decision to enter into each Finance Document
to which it is party, to make its Commitments and its
portion of the Credit Facilities available to the Borrower
and to enter into each Qualified Hedge Agreement, it has
independently taken whatever steps it considers necessary to
evaluate the financial condition and affairs of each
Restricted Group Member and that it has made an independent
credit judgment without reliance upon any information
furnished by the Agent; and
(b) so long as any portion of the Credit Facilities is being
utilized by the Borrower or any Qualified Hedge Agreement
remains unperformed, it will continue to make its own
independent evaluation of the financial condition and
affairs of each Restricted Group Member.
15.15 Replacement of Agent, Reference Lender and Swing Line Lender.
15.15.1 Agents. The Agent (a "Resigning Agent") may resign at any time by
giving written notice thereof to the Lenders and the Borrower. Such
resignation will not be effective until a replacement agent is appointed. Upon
receipt of notice of any such intended resignation, the Required Lenders shall
have the right to appoint a replacement to the Resigning Agent who shall be
one of the Lenders. Unless a Default has occurred, the consent of the Borrower
(which shall not be unreasonably withheld or delayed) to any such replacement
shall also be required. If no replacement to the Resigning Agent shall have
been so appointed and shall have accepted such appointment within 15 days of
receipt of such notice, the Lenders (excluding the Lender that is the
Resigning Agent) shall within the following 15 days appoint a replacement who
may, but need not be, a Lender. If the Lenders fail to appoint a replacement
to the Resigning Agent within such 15 day period, without limitation of its
rights under this Subsection 15.15.1, the Resigning Agent may, on behalf of
the Finance Parties, appoint a replacement Agent which shall be a financial
institution organized under the laws of Canada (or a Province) or the laws of
the United States or any State thereof, in each case which has (or whose
Holding Body Corporate has) combined capital and reserves in excess of
USD5,000,000,000 (or the Equivalent Amount in Canadian Dollars or other
foreign currency) and has (or whose affiliates have) offices in Toronto. Upon
the resignation of a Resigning Agent, the replacement agent shall thereupon
succeed to and become vested with all the rights and obligations of the
Resigning Agent and the Resigning Agent shall be discharged from its
obligations under the Finance Documents. A replacement agent shall evidence
its acceptance of appointment hereunder by signing and delivering a
counterpart of this Agreement to the Borrower and the Resigning Agent. After
any Resigning Agent's resignation or removal hereunder as Agent the provisions
of this Article 15 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
15.15.2 Reference Lenders. The Agent may remove any Reference Lender and
nominate and appoint any other Lender (or its affiliate) to act as the
Reference Lender in relation to any Credit Facility under this Agreement. Any
Reference Lender may resign at any time by giving notice thereof to the Agent.
Upon receipt of such resignation notice, the Agent shall appoint a replacement
Reference Lender who shall be one of the Lenders (or their affiliates).
15.15.3 Swing Line Lender. The Swing Line Lender may be replaced by a
Transferee pursuant to and in accordance with the provisions of Section 16.10.
15.16 Delegation. With the prior approval of the Required Lenders, such
approval not to be unreasonably withheld or delayed, the Agent shall have the
right to delegate any of its rights, duties or obligations under the Loan
Documents to any other Person upon such terms and conditions as the Agent may
think fit and the Agent shall not be bound to supervise the proceedings or be
in any way responsible for any obligations or losses and expenses incurred by
reason of any misconduct or default on the part of any such delegate.
15.17 Required Lender Decisions. Where the Required Lenders are required to
agree or consent to any act or thing, or to exercise any judgment or
discretion, under any Loan Document, the Relevant Agent shall ask all Lenders
for such agreement or consent to do any such act or thing or to exercise such
judgment or discretion. The foregoing shall not limit the right of the
Required Lenders to agree or consent to any such act or thing or to exercise
such judgment or discretion. A copy of such agreement or consent shall be sent
by the Agent to all the Lenders.
15.18 Changes, Judgments and Discretions.
15.18.1 General. The rights of each Finance Party under each Finance Document
shall be cumulative and not exclusive of any rights which each Finance Party
would otherwise have, and no failure or delay by the Agent or any Finance
Party in exercising any right shall operate as a waiver of it nor shall any
single or partial exercise of any right preclude its further exercise or the
exercise of any other right. Subject as otherwise provided in Subsections
15.18.2, 15.18.3 and 15.18.4, (a) any term, condition, other provision,
obligation or agreement contained in any Finance Document may be changed with
the consent of the Borrower and the Majority Lenders, (b) any act or thing
referred to in any Loan Document may be agreed or consented to by the Majority
Lenders and (c) the exercise of any judgment or discretion by the Lenders
contained in any Loan Document may be exercised by the Majority Lenders.
15.18.2 Changes Requiring Every Lenders' Consent. Without the prior consent
of every Lender, no change to any Finance Document, agreement or consent to any
act or thing referred to in any Loan Document or exercise of any judgment or
discretion contained in any Loan Document shall:
(a) increase the aggregate amount of any Credit Facility, the
amount or term of any of the Commitments or the proportion
represented by the Rateable Share of any Lender, except to
the extent expressly permitted or required in this
Agreement;
(b) postpone or defer the time for the payment of the principal
of or interest on any Advance, any Fees or any other amount
payable hereunder;
(c) decrease the rate or amount or change the currency of any
principal, interest or Fees payable hereunder (save for a
decrease in the Default Rate by up to two percent (2%) which
may be consented to by the Majority Lenders) or the
requirement of pro rata application in accordance with (i)
each Lender's Rateable Share of all amounts received by the
Agent in respect of the Revolving Facility or (ii) its Total
Exposure of all amounts received by the Finance Parties
after the occurrence of an Enforcement Event;
(d) require any Lender to make any Advance or its share in any
Advance available to finance a Hostile Take-Over Bid if that
Lender determines that it has a conflict of interest;
(e) change the definition of "Majority Lenders", "Rateable
Share", "Required Lenders" or "Total Exposure";
(f) amend Section 15.22, 15.25 or 16.10.2 or this Section 15.18;
or
(g) release or postpone any Guarantee or release, discharge or
subordinate any Lien created under the Security except as
otherwise expressly permitted or required by the provisions
of any Loan Document to which the Agent is party.
15.18.3 Changes Requiring Consent of the Agent, Swing Line Lender and Issuing
Bank. No change to any provision of any Loan Document shall affect any of the
rights or obligations of the Agent, the Swing Line Lender or the Issuing Bank
under any Loan Document, without the prior consent of that Agent, Swing Line
Lender or Issuing Bank.
15.18.4 Changes Requiring Consent of Qualified Hedge Counterparties. No change
to any provision of any Qualified Hedge Agreement shall affect any of the
rights or obligations of any Qualified Hedge Counterparty under any Qualified
Hedge Agreement without the prior consent of that Qualified Hedge
Counterparty.
15.19 Determination by Agent.
15.19.1 Good Faith. Any determination to be made by the Agent under any Loan
Document shall be made by the Agent in good faith and, if so made, shall be
deemed to have been properly made and conclusive and binding on all parties,
absent manifest error.
15.19.2 Certificate of the Agent as to Rates. Except as otherwise provided
in Subsection 15.20.5, a certificate of the Agent certifying any amount or
interest or discount rate shall be conclusive and binding on the parties
hereto for all purposes, absent manifest error. No provision hereof shall be
construed so as to require the Agent to issue a certificate at any particular
time.
15.19.3 Notification of Rates. Each Reference Lender (if it is not the same
Person as the Agent) shall promptly notify the Agent of each interest rate
that is required to determine pursuant to this Agreement. Promptly following
receipt of each such notice, or promptly after determination if the Agent and
the Reference Lender is the same Person, the Agent shall promptly notify the
Lenders of each interest rate the Agent is required to determine and report to
the Lenders pursuant to this Agreement.
15.20 Interlender Procedure for Making Advances.
15.20.1 Lenders to provide their Rateable Shares to Agent. Subject to the
terms and conditions of this Agreement, the Revolving Facility shall be
available to the Borrower as follows: upon receipt by the Agent of a Borrowing
Request, the Agent will promptly notify each Lender of the receipt of such
Borrowing Request and of such Lender's Rateable Share of such Borrowing. In
the case of an issue of Acceptances, the Agent will round allocations amongst
the Lenders to ensure that each Acceptance issued has a face amount which is a
whole number multiple of CAD100,000 (and such rounded allocations shall
constitute the Lenders' respective Rateable Shares for the purposes of this
Agreement). Subject to Sections 6.3, 8.9 and 14.2 and Subsection 15.20.7, each
Lender will make its Rateable Share of each Borrowing or its Net Acceptance
Proceeds available to the Agent by paying, no later than 11:00 a.m. (local
time in the place of payment) on the Borrowing Date requested by the Borrower,
its Rateable Share of such Advance or such Net Acceptance Proceeds to the
Agent's Accounts. Subject to Sections 8.9 and 14.2 , the Agent will make such
funds available, upon receipt, to the Borrower on the Borrowing Date by bank
transfer to the Borrower's Accounts.
15.20.2 Limitation on Agent's Liability. The obligations of the Agent under
this Section 15.20 shall be limited to taking such steps as are commercially
reasonable to implement the instructions described in Subsection 15.20.1, and
the Agent shall not be liable for any losses and expenses which may be
incurred or suffered by the Borrower and occasioned by the failure or delay of
funds to reach the designated destination.
15.20.3 Lenders to indemnify Agents for failure to make funds available.
Unless the Agent has been notified by a Lender at least two (2) Business Days
prior to the Borrowing Date requested by the Borrower that such Lender will
not make available to the Agent its Rateable Share of such Borrowing or its
Net Acceptance Proceeds, the Agent may assume that such Lender has made such
portion of the Borrowing or such Net Acceptance Proceeds available to the
Agent on the Borrowing Date in accordance with the provisions hereof, and the
Agent may, in reliance upon such assumption, make available (to the extent
applicable) to the Borrower on such date a corresponding amount. If the Agent
has made such assumption, to the extent a Lender has not so made its Rateable
Share of the Borrowing or its Net Acceptance Proceeds available to the Agent,
such Lender agrees to pay to the Agent forthwith on demand, to the extent that
such amount is not recovered from the Borrower within seven days of demand
(without in any way obligating the Agent to commence any Litigation to recover
such amount), such Lender's Rateable Share of the Borrowing or its Net
Acceptance Proceeds and all losses and expenses incurred by the Agent in
connection therewith together with interest thereon at the relevant interbank
rate for each day from the date such amount is made available by the Agent
until the date such amount is paid or repaid to the Agent.
15.20.4 Borrower to repay any Advance not funded by a Lender. Notwithstanding
Subsection 15.20.3, if a Lender fails to pay any portion of any Borrowing or
its Net Acceptance Proceeds to the Agent pursuant to Subsection 15.20.3, the
Borrower shall, without prejudice to any rights that the Borrower might have
against such Lender, repay such amount to the Agent within three (3) Business
Days after demand therefor by the Agent together with all losses and expenses
incurred by the Agent in connection therewith and interest thereon at the rate
payable hereunder by the Borrower in respect of such Borrowing.
15.20.5 Agent to issue Certificate as to Amount payable. Any amount payable
to the Agent pursuant to this Section 15.20 (other than Subsection 15.20.1)
shall be set forth in a certificate delivered by the Agent to the Lender
concerned and the Borrower (which certificate shall contain reasonable details
of how the amount payable is calculated) and shall be prima facie evidence
thereof. If a Lender makes the payment to the Agent required by this Section
15.20, the amount so paid shall constitute, to the extent thereof, such
Lender's Rateable Share of the Borrowing or its Net Acceptance Proceeds for
purposes of this Agreement.
15.20.6 No Lender responsible for any other Lender's Rateable Share. The
failure of any Lender to advance its Rateable Share of any Borrowing or its
Net Acceptance Proceeds to the Agent pursuant to this Agreement shall not
relieve any other Lender of its obligations, if any, hereunder to advance its
Rateable Share of the Borrowing or its Net Acceptance Proceeds to the Agent
pursuant to this Agreement on the Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make available its Rateable
Share of any Borrowing or its Net Acceptance Proceeds to be made available by
such other Lender to the Agent pursuant to this Agreement on any Borrowing
Date.
15.20.7 InterLender Netting. If on any date amounts (other than interest and
Fees) would be due and payable under this Agreement in the same currency by
the Agent to any Lender and by that Lender to the Agent, then, on such date,
unless the Agent notifies the Lenders stating that netting is not to apply to
such payments, each such party's obligations to make payment of any such
amount will be automatically satisfied and discharged and, if the aggregate
amount that would otherwise have been payable by the Agent (after receipt from
the Borrower or the Lenders, as the case may be) to that Lender exceeds the
aggregate amount that would otherwise have been payable by that Lender to the
Agent (for the account of the Borrower or the Lenders, as the case may be) or
vice versa, such obligation shall be replaced by an obligation upon whichever
of the Agent or the Lender would have had to pay the larger aggregate amount
to pay to the other the excess of the larger aggregate amount over the smaller
aggregate amount.
15.21 Remittance of Payments. Forthwith after receipt of any payment of
principal, interest, Fees or other amounts for the benefit of the Lenders
pursuant to the provisions hereof, the Agent shall remit to each Lender
entitled thereto, its Rateable Share of such payment. If the Agent, on the
assumption that it will receive, on any particular date, a payment of
principal, interest, Fees or other amounts hereunder, remits to each Lender
its Rateable Share of such payment and the Borrower fails to make such
payment, each Lender agrees to repay to the Agent forthwith on demand, to the
extent that such amount is not recovered from the Borrower within seven (7)
days of demand (without in any way obligating the Agent to commence any
Litigation to recover such amount, such Lender's Rateable Share of the payment
made pursuant hereto, together with all losses and expenses incurred by the
Relevant Agent in connection therewith and interest thereon (at the relevant
interbank rate) for each day from the date such amount is remitted to the
Lenders. The exact amount of the repayment required to be made by the Lenders
will be set forth in a statement delivered by the Agent to each Lender, which
statement shall be conclusive and binding for all purposes, absent manifest
error.
15.22 Redistribution of Payments.
15.22.1 Disproportionate Receipts to be Shared. Except for any payment that is
required to be shared pursuant to Subsection 15.22.2, if a Lender, through the
exercise of any right of set-off or otherwise (save for any payment made to it
from the Agent in accordance with the provisions hereof) receives payment of a
portion of the Loan Obligations due to it which is greater than the proportion
received by any other Lender in respect of the aggregate amount of the Loan
Obligations due to such other Lender (having regard to the respective Rateable
Shares of the Lenders), the Lender receiving such proportionately greater
payment shall purchase a participation (which shall be done simultaneously
with receipt of such payment) in that portion of the Loan Obligations due to
the other Lender or Lenders (the "Selling Lender or Lenders") so that the
respective receipts shall be pro rata according to their respective Rateable
Shares; provided, however, that:
(a) if all or part of such proportionately greater payment
received by such purchasing Lender shall be recovered from a
Restricted Group Member by the Selling Lender or Lenders,
such purchase shall be rescinded and the purchase price paid
for such participation shall be returned by such Selling
Lender or Lenders to the extent of such recovery, together
with interest thereon at the relevant interbank rate
calculated and payable from the Business Day following the
day such return is requested until it is paid in full; and
(b) if all or part of such proportionately greater payment
received by such purchasing Lender is found to have been a
transfer in fraud of creditors or a preferential payment
under any applicable bankruptcy or insolvency legislation or
is otherwise required to be returned by such purchasing
Lender, such purchase shall be rescinded and the purchase
price paid for such participation shall be returned by such
Selling Lender or Lenders to the extent of such amount
returned, together with interest thereon at the relevant
interbank rate calculated and payable from the Business Day
following the day such return is requested until it is paid
in full.
15.22.2 Disproportionate Receipts of Finance Parties. If a Finance Party,
through the exercise of any right of set-off or otherwise (save for any
payment to it from the Agent in accordance with the provisions hereof),
receives payment of a portion of the Finance Obligations due to it after the
occurrence of an Enforcement Event which is greater than the proportion
received by any other Finance Party in respect of the aggregate amount of the
Finance Obligations due to such other Finance Party (having regard to the
respective Total Exposures of the Finance Parties), the Finance Parties
receiving such proportionately greater payment shall purchase a participation
(which shall be done simultaneously with receipt of such payment) in that
portion of the Finance Obligations due to the other Finance Party or Finance
Parties (the "Selling Finance Party or Finance Parties") so that the
respective receipts shall be pro rata according to their respective Total
Exposures determined before such payment is received; provided, however, that:
(a) if all or part of such proportionately greater payment
received by such purchasing Finance Party shall be recovered
from a Restricted Group Member by the Selling Finance Party
or Finance Parties, such purchase shall be rescinded and the
purchase price paid for such participation shall be returned
by such Selling Finance Party or Finance Parties to the
extent of such recovery, together with interest thereon at
the relevant interbank rate calculated and payable from the
Business Day following the day such return is requested
until it is paid in full; and
(b) if all or part of such proportionately greater payment
received by such purchasing Finance Party is found to have
been a transfer in fraud of creditors or a preferential
payment under any applicable bankruptcy and insolvency
legislation or is otherwise required to be returned by such
purchasing Finance Party, such purchase shall be rescinded
and the purchase price paid for such participation shall be
returned by such Selling Finance Party or Finance Parties to
the extent of such amount returned, together with interest
thereon at the relevant interbank rate calculated and
payable from the Business Day following the day such return
is requested until it is paid in full.
15.22.3 Notice Requirement. If any Finance Party receives or recovers payment
of any amount it is required to share pursuant to Subsections 15.22.1 or
15.22.2, it shall promptly provide full particulars thereof to the Agent and
the Agent shall promptly provide copies of such particulars to the other
Finance Parties.
15.23 Prompt Notice to Lenders.
15.23.1 Distribution of Information. The Agent agrees to provide to the
Lenders copies of the information, notices and reports received by it from the
Borrower for distribution to the Lenders pursuant to this Agreement, including
information provided pursuant to Sections 12.2 and Subsections 13.1.6, 13.1.8
and 13.1.9, promptly upon receipt of same.
15.23.2 Distribution by Use of Websites. The Agent may satisfy its obligations
under this Agreement to deliver to the Lenders copies of the information,
notices and reports referred to in Subsection 15.23.1 by posting this
information onto an electronic website designated by the Agent to which the
Lenders have access. The Agent shall supply the Lenders with the address of
and any relevant password specifications for that designated website.
15.24 Several Debts of the Lenders. Each Lender's share in each Borrowing
constitutes a several debt owing by the Borrower to such Lender.
15.25 Enforcement of Security. To the extent that the Agent receives or
recovers payment of an amount owing under the Finance Documents upon or
following the occurrence of an Enforcement Event, such amount shall be applied
as amongst the Finance Parties:
(a) first, in or towards payment of all of the Agent's losses
and expenses and disbursements;
(b) secondly, in or towards payment of all Finance Obligations
which are due and payable by the Borrower at such time to
the Finance Parties on account of the Finance Obligations
owing by the Borrower pro rata to the Total Exposures of the
Finance Parties;
(c) thirdly, if the Finance Obligations have been paid in full,
in payment to any Person to whom the Agent is obliged to pay
in priority to the Restricted Group Member otherwise
entitled thereto, to the extent it is so obliged; and
(d) fourthly, thereafter, in payment to the Restricted Group
Member entitled thereto.
The fact that the Agent may make a payment pursuant to paragraph (c) or (d)
above or may determine that the Finance Obligations have been paid in full,
will not thereafter prevent the Agent from applying any further monies, or any
credit balance on any account, in the order set out in this Section 15.25.
15.26 Adjustments on Termination of the Swing Line.
15.26.1 Adjustments and Assignments. If the Agent cancels or terminates the
Revolving Facility in whole or in part pursuant to Section 14.2, the Agent
shall, unless the Swing Line Lender agrees otherwise, also cancel or terminate
the Swing Line Commitment in its entirety whereupon:
(a) the Swing Line Commitment shall be reduced to nil;
(b) the Swing Line shall be cancelled;
(c) the Swing Line Lender shall (if not already a Lender under
the Revolving Facility) become a Lender under the Revolving
Facility with a Commitment thereunder equal to the amount
(or if already a Lender under the Revolving Facility, its
Commitment in respect of the Revolving Facility shall be
increased by the amount ) of the Swing Line Commitment in
effect before it was reduced to nil pursuant to clause (a)
above;
(d) the Agent will determine the amount of adjusting payments
that may need to be made amongst the Lenders (including the
Swing Line Lender) to ensure that their respective shares in
outstanding Advances under the Revolving Facility equal
their respective Rateable Shares of the Revolving Facility
based on their respective Commitments in effect before any
reduction of Commitments takes effect pursuant to Section
14.2;
(e) each of the Lenders (including, if applicable, the Swing
Line Lender) shall advance to the Agent the amount of any
adjusting payment required of it determined pursuant to
clause (d) above;
(f) the Agent shall, upon receipt from the Lenders (including
the Swing Line Lender) advance to each applicable Lender
(including, if applicable, the Swing Line Lender) the amount
of any adjusting payment required to be paid to such Lender
as determined pursuant to clause (d) above; and
(g) the Borrower shall be obliged to repay outstanding Advances
under the Revolving Facility in the Rateable Shares amongst
the Lenders as adjusted pursuant to this Subsection 15.26.1.
15.26.2 Participations. If adjusting advances pursuant to Subsection 15.26.1
cannot for any reason be made or the Lenders for any reason would not as a
result thereof share rateably in the aggregate amount of the Advances
outstanding under the Revolving Facility in their respective Rateable Shares
based on their respective Commitments in effect before any reduction of
Commitments takes effect pursuant to Section 14.2, each Lender hereby agrees
that it shall forthwith purchase from the Swing Line Lender and each Lender
(including the Swing Line Lender) agrees that it shall forthwith purchase from
each of the other Lenders, as applicable, such participations in the Advances
outstanding under the Revolving Facility as shall be necessary to cause the
Lenders to share in such Advances rateably based on their respective Revolving
Commitments (taking into account any increase therein pursuant to Subsection
15.26.1(a) which effectively changes the Swing Line Commitment to a Revolving
Commitment but disregarding any reduction thereof pursuant to Section 14.2);
provided that all interest payable on Advances outstanding under the Swing
Line shall be for the account of the Swing Line Lender until the date their
respective participation is paid for and, to the extent attributable thereto,
shall be payable to the purchasing Lender from and after such date of payment.
15.26.3 Failure by Lender to Advance. If a Lender (a "Defaulting Lender")
fails to make payment on the due date therefor of any amount due from it for
the account of the Swing Line Lender pursuant to Subsection 15.26.1 or 15.26.2
(the balance thereof for the time being unpaid being referred to in this
Subsection 15.26.3 as an "overdue amount") then until the Swing Line Lender
has received payment of the overdue amount (plus interest as provided below)
in full (and without in any way limiting the rights of the Swing Line Lender
in respect of such failure):
(a) the Swing Line Lender shall be entitled to receive any
payment which the Defaulting Lender would otherwise have
been entitled to receive in respect of the Credit Facilities
or otherwise in respect of any Finance Document; and
(b) the overdue amount shall bear interest payable by the
Defaulting Lender to the Swing Line Lender at the rate
payable by the Borrower in respect of the Loan Obligations
which gave rise to such overdue amount.
15.27 No Reliance on Agent's Customer Identification Program. Each Lender
acknowledges and agrees that neither such Lender, nor any of its Affiliates,
Participants or Transferees, may rely on the Agent to carry out such Lender's,
Affiliate's, Participant's or Transferee's customer identification program, or
other obligations required or imposed under or pursuant to the USA Patriot Act
or the regulations thereunder, including the regulations contained in 31 CFR
103.121 (as hereafter amended or replaced, the "CIP Regulations"), or any
other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any of the Restricted Group
Members, their Affiliates or their agents, the Loan Documents or the
transactions hereunder or contemplated hereby (a) any identity verification
procedures, (b) any recordkeeping, (c) comparisons with government lists, (d)
customer notices or (e) other procedures required under the CIP Regulations or
such other Laws.
15.28 USA Patriot Act. Each Finance Party and each of its Participants and
Transferees that are not incorporated that are 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 (a) an affiliate of a
depository institution or foreign bank that maintains a physical presence in
the United States or foreign country, and (b) subject to supervision by a
banking authority regulating such affiliated depository institution or foreign
bank) shall deliver to the Agent the certification, or, if applicable,
recertification, certifying that such Lender 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 ten (10) days after the date hereof and (2)
at such other times as are required under the USA Patriot Act.
ARTICLE 16
GENERAL
16.1 Costs and Expenses.
16.1.1 Generally. The Borrower shall on demand pay to the Agent, on a full
indemnity basis, the amount of all reasonable out-of-pocket fees, costs and
expenses incurred and disbursements made by the Agent (including the
reasonable fees and out-of-pocket expenses of the Lenders' Counsel (limited to
one legal firm for each relevant jurisdiction) and those of accountants,
experts, consultants and other Representatives retained by the Agent) in
connection with each of:
(a) the preparation, negotiation, settlement, execution,
delivery, entry into effect and administration of each Loan
Document and/or the satisfaction of any conditions or
obligations specified in Article 9 or in the Post-Closing
Undertaking;
(b) the perfection or priority of any Security;
(c) the syndication of the Credit Facilities and post closing
costs;
(d) each waiver, consent, amendment or supplement to, or
restatement or novation of, each Loan Document;
(e) any restructuring of the Credit Facilities for any reason
other than by reason of an Event of Default; and
(f) the interpretation, defence, establishment, preservation,
protection or enforcement of rights of the Finance Parties
under each Finance Document.
16.1.2 Post Default. The Borrower shall on demand pay to each Lender, on a
full indemnity basis, the amount of all out-of-pocket fees, costs and expenses
incurred and disbursements made by each Lender (including the fees and
out-of-pocket expenses of the Lenders' Counsel and those of legal counsel,
accountants, experts and consultants retained by each Lender) in connection
with each of:
(a) any restructuring of the Loan Obligations by reason of an
Event of Default; and
(b) the defence, establishment, preservation, protection or
enforcement of rights of the Lenders under each Finance
Document after the occurrence of an Event of Default.
16.2 Indemnification by the Borrower.
16.2.1 Borrowings. The Borrower shall on demand pay to the Agent for the
account of each Lender the amount of all losses and expenses, including losses
and expenses sustained by such Lender in connection with the liquidation or
reemployment, in whole or in part, of deposits or funds borrowed or acquired
by such Lender to fund such Lender's Rateable Share in any Borrowing to the
Borrower, which such Lender sustains or incurs:
(a) if for any reason a Borrowing does not occur on a date
requested by the Borrower, unless the Borrowing does not
occur by reason of the breach by the Agent or such Lender of
its obligations under this Agreement;
(b) if the Borrower fails to give any notice required to be
given by it hereunder in the manner and at the time
specified herein;
(c) as a consequence of any failure by the Borrower to repay any
amount when required by the terms of this Agreement; or
(d) if the whole or any part of such Lender's Rateable Share in
any Libor Loan made available to the Borrower is paid to
such Lender or converted to another Type of Borrowing other
than on the Period End Date relating thereto.
16.2.2 Other. The Borrower shall forthwith on demand fully indemnify, defend
and save each of the Agents, the Lenders and their respective Representatives
(each, an "Indemnified Party") harmless from and against any and all losses
and expenses (including interest and, to the extent permitted by applicable
law, penalties, fines and monetary sanctions) which an Indemnified Party
suffers or incurs as a result of or otherwise in respect of:
(a) any claim or liability of any kind relating to the
Environment which arises out of the execution, delivery or
performance of, or the enforcement or exercise of any right
under, any Loan Document, including any claim in nuisance,
negligence, strict liability or other cause of action
arising out of a discharge of a Contaminant into the
Environment, any fines or orders of any kind that may be
levied or made pursuant to an Environmental Law in each case
relating to or otherwise arising out of any of the Business
Assets of any Restricted Group Member or the Restricted
Group's Business;
(b) the direct or indirect use or proposed use of the proceeds
of any Advance;
(c) any Default; or
(d) any Litigation commenced against any Indemnified Party
arising out of the execution, delivery or performance of, or
the enforcement of any right under any Loan Document.
Each Lender shall be constituted as the agent and bare trustee of each
Indemnified Party who is its own Representative and shall hold and enforce
each such Indemnified Party's rights under this paragraph for such party's
benefit. The foregoing indemnity shall not apply in respect of losses and
expenses of an Indemnified Party to the extent that they are determined by a
Final Judgment to have directly resulted from the gross negligence or willful
misconduct of that Indemnified Party.
16.3 Application of Payments. Any payments received in respect of the
Finance Obligations from time to time and any insurance monies received for
the account of any Restricted Group Member may, notwithstanding any
appropriation by any Restricted Group Member, be appropriated to such parts of
the Finance Obligations then due and owing and in such order as the Agent sees
fit, and the Agent shall have the rights to change any appropriation at any
time. After the occurrence of a Default, any such insurance moneys may, at the
option of the Agent, be used to repair or replace Collateral, be held as part
of the Collateral or be appropriated to the Finance Obligations.
16.4 Set-Off, Combination of Accounts and Crossclaims. The obligations of
the Borrower under each Finance Document will be paid by the Borrower without
regard to any equities between the Borrower and the Finance Parties or any
right of set-off, combination of accounts or cross-claim. Any Indebtedness
owing by any Finance Party to the Borrower, direct or indirect, extended or
renewed, actual or contingent, matured or not, may be set off or applied
against, or combined with, the Finance Obligations of the Borrower by such
Finance Party at any time, either before or after maturity, without demand
upon or notice to anyone.
16.5 Rights in Addition. The rights conferred by each Finance Document are
in addition to, and not in substitution for, any other rights the Finance
Parties may have under that Finance Document or any other Finance Document, at
law, in equity or by or under Applicable Law or any agreement. The Finance
Parties may proceed by way of any Litigation at law or in equity and no right
of the Finance Parties shall be exclusive of or dependent on any other. The
Finance Parties may exercise any of its rights separately or in combination
and at any time.
16.6 Certificate Evidence. A certificate prepared by any Finance Party and
provided to the Borrower setting forth any interest rate or any amount payable
under any Finance Document, including the amount of compensation or loss and
expense payable under Section 7.5 or 16.2, shall be conclusive and bind the
Borrower, absent manifest error.
16.7 Evidence of Indebtedness.
16.7.1 Agent's Books. The Agent shall open and maintain on its books accounts
evidencing all Borrowings under the Revolving Facility and all amounts owing
by the Borrower to each Lender under the Revolving Facility. The Agent shall
enter in the accounts details of all amounts from time to time owing, paid or
repaid by the Borrower under the Revolving Facility. The information entered
in the accounts shall constitute, in the absence of manifest error, prima
facie evidence of the existence and quantum of the obligations of the Borrower
to each Lender under the Revolving Facility. The Borrower shall, on reasonable
notice to the Agent, be entitled to obtain promptly from the Agent copies of
extracts of all entries made in such accounts.
16.7.2 Lenders May Request Promissory Notes. Any Lender may request that its
Rateable Share in Advances be evidenced by a promissory note (in the form of
Schedule 16.7.2 or such other form to substantially the same effect as the
Lender may accept) duly completed and executed by the Borrower (a "Note"). In
such event, the Borrower shall prepare, execute and deliver to such Lender a
Note payable to the order of such Lender. Thereafter, the Rateable Share of
such Lender in all outstanding Advances evidenced by such Note and interest
thereon shall at all times (including after any assignment pursuant to Section
16.10) be represented by one or more Notes payable to the order of the payee
named therein or any assignee pursuant to Section 16.10, except to the extent
that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that its Rateable Share on outstanding Advances once
again be evidenced as described in Subsection 16.7.1.
16.7.3 Swing Line Lenders' Books. The Swing Line Lender shall open and
maintain on its books accounts evidencing all Borrowings under the Swing Line
and all amounts owing by the Borrower under the Swing Line. The Swing Line
Lender shall enter in the accounts details of all amounts from time to time
owing, paid or repaid by the Borrower under the Swing Line. The information
entered in the accounts shall constitute, in the absence of manifest error,
prima facie evidence of the existence and quantum of the obligations of the
Borrower to the Swing Line Lender under the Swing Line. The Borrower shall, on
reasonable notice to the Swing Line Lender, be entitled to obtain promptly
from the Swing Line Lender copies of extracts of all entries made in such
accounts.
16.8 Notices. Any notice, demand, consent, approval or other communication
to be made or given under or in connection with this Agreement (a "Notice")
shall be in writing and may be made or given by personal delivery, by
facsimile or by e-mail addressed to the Agent and the Borrower at their
respective addresses set out in Schedule 16.8, or to such other address as
such party may from time to time notify the others in accordance with this
Section 16.8, and to the Lenders at their respective Lending Offices. Any
Notice made or given by personal delivery shall be conclusively deemed to have
been given at the time of actual delivery or, if made or given by facsimile or
e-mail at the opening of business on the first Business Day following the
transmittal thereof, provided the party sending such Notice receives
confirmation of receipt. Notwithstanding the foregoing, (a) the Agent shall
not be deemed to have received any Notice until it is actually received by an
officer of the Agent charged with the administration of this Agreement and (b)
the Agent may in its discretion act upon verbal Notice from any Person
reasonably believed by the Agent to be a Person authorized by the Borrower or
Lender to give instructions under or in connection with this Agreement
including, any request by the Borrower for a Borrowing. The Senior Lenders
shall not be responsible for any error or omission in such instructions or in
the performance thereof.
16.9 Judgment Currency. If, for the purposes of obtaining or enforcing
judgment in any court in any jurisdiction, it becomes necessary to convert
into the currency of the jurisdiction giving such judgment (the "Judgment
Currency") an amount due hereunder in any other currency (the "Original
Currency"), then the date on which the rate of exchange for conversion is
selected by that court is referred to herein as the "Conversion Date". If
there is a change in the rate of exchange between the Judgment Currency and
the Original Currency between the Conversion Date and the actual receipt by
any Senior Lender of the amount due to it hereunder or under such judgment,
the Borrower shall, notwithstanding such judgment, pay all such additional
amounts as may be necessary to ensure that the amount received by such Senior
Lender in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of receipt, will produce the amount due in the Original
Currency. The Borrower's liability hereunder constitutes a separate and
independent liability which shall not merge with any judgment or any partial
payment or enforcement of payment of sums due under this Agreement.
16.10 Successors and Assigns.
16.10.1 Benefit & Burden. The Loan Documents shall enure to the benefit of
and be binding on the parties thereto, their respective successors and each
assignee of some or all of the rights or obligations of the parties under the
Loan Documents permitted by Subsection 16.10. Any reference in any such Loan
Document to any party thereto shall (to the extent the context so admits) be
construed accordingly.
16.10.2 Borrower. The Borrower may not assign all or any part of any of its
rights or obligations in respect of any Credit Facility or under any Loan
Document. Where the context so admits, each reference in this Agreement to the
Borrower shall be construed so as to include the successors of the Borrower.
16.10.3 Participation. Each Lender may grant a participation to any other
Person (a "Participant") in the whole or any part of any of its Commitments
(including its Rateable Share in any related Advances) under which the
Participant shall be entitled to the benefit of the same rights under this
Agreement with respect to such Participation as if it were a party hereto in
the place and stead of such Lender provided that, in respect of such
participated share of its Commitments and as amongst all parties to this
Agreement, such Lender (and not the Participant) shall remain entitled to
enforce such rights, and shall remain responsible for the performance of all
obligations, of such Lender under this Agreement with respect to the share of
each of its Commitments subject to such participation.
16.10.4 Assignments. Each Lender (a "Transferring Lender") may assign any of
its Commitments (including its share in any related Advances made hereunder),
or any part thereof in a minimum amount of CAD2,500,000, or such lesser amount
as the Agent may permit, to:
(a) any affiliate or Approved Fund of the Transferring Lender;
(b) prior to the occurrence of a Default, to any Person not
referred to in paragraph (a), with the prior consent of the
Agent and the Borrower, such consent not to be unreasonably
withheld or delayed; or
(c) after the occurrence of a Default, to any other Person, with
the consent of the Agent, such consent not to be
unreasonably withheld or delayed.
Any such transfer to any Person permitted pursuant to the preceding sentence
(a "Transferee") shall be made pursuant to a loan transfer agreement (a "Loan
Transfer Agreement") substantially in the form of Schedule 16.10.4 (or in such
other form to substantially the same effect as the Agent may approve). Each
Loan Transfer Agreement must be delivered to the Agent at least five (5)
Business Days before it takes effect accompanied, if such assignment is not
being made to an affiliate of an existing Lender, by payment to the Agent of a
processing fee of CAD3,500. Each party hereto hereby agrees that any such
Transferee shall be subject to the obligations identical to the obligations
assigned under any such Loan Transfer Agreement and shall be entitled to
rights identical to the rights assigned to such Transferee as if such
Transferee were named in this Agreement as an original party in substitution
for the Transferring Lender in respect of each such Commitment, or part
thereof, assigned, and such Transferring Lender shall be released from all
obligations in relation to each of its Commitments, or part thereof, so
assigned.
16.10.5 Pledge to US Reserve Bank. Notwithstanding Subsection 16.10.4, any
Lender may at any time, without the consent of the Borrower or the Agent,
assign all or any portion of its rights under this Agreement and its Notes to
a US Federal Reserve Bank; provided, however, that no such assignment to a US
Federal Reserve Bank shall release the transferor Lender from its obligations
hereunder.
16.10.6 Schedule 1.1 "Commitments". The Agent may from time to time revise
Schedule 1.1 "Commitments" to record the Lenders and their respective
Commitments after giving effect to assignments and/or transfers referred to in
Subsection 16.10.4 above. Any such revised Schedule 1.1 "Commitments" shall be
prima facie evidence of the identities and Commitments of the Lenders. The
Agent shall provide a copy of any such revised Schedule 1.1 "Commitments" to
the Borrower and each Lender promptly upon request.
16.10.7 Increased Costs. If as a result of any assignment of the whole or any
part of any Commitment of any Lender pursuant to Subsection 16.10.4, or any
participation granted by any Lender pursuant to Subsection 16.10.3 made before
the occurrence of a Default, the Transferee or Participant would incur costs,
expenses or other amounts of the nature described in Section 7.5 in excess of
those which the Borrower would have been required to indemnify such Lender had
such assignment or participation not taken place, the indemnity obligations of
the Borrower under Section 7.5 shall not extend to such excess.
16.10.8 Withholding Tax. If as a result of any assignment of the whole or any
part of any Commitment of any Transferring Lender pursuant to Subsection
16.10.4 made before the occurrence of a Default, the Borrower would be
required to deduct or withhold Tax and make increased payments to the
Transferee pursuant to Subsection 7.8.1 in excess of such increased payments
which the Borrower would have been required to pay to the Transferring Lender
pursuant to Subsection 7.8.1(d) had such assignment not taken place, the
provisions of Subsection 7.8.1(d) requiring such increased payments shall not
apply to the extent of such excess.
16.10.9 Disclosure. Each Lender may disclose to any prospective or actual
Participant in or Transferee of any rights or obligations in respect of any
Credit Facilities any information regarding any Restricted Group Member or any
of its Business Affairs so long as the prospective or actual Participant or
Transferee agrees to be bound by the confidentiality provisions of this
Subsection 16.10.9. Each Lender shall keep confidential and not disclose to
any third party (excluding for certainty its own Representatives) any
confidential information received by such Lender from the Borrower pursuant to
this Agreement which is designated as confidential by the Borrower, save that
any Lender may disclose any such confidential information (i) as provided in
the preceding sentence, (ii) to the Agent or any other Lender, (iii) to any
prospective or actual replacement Agent, (iv) to the extent required by
Applicable Law, (v) to the extent required to protect the interests of any
Lender in any actual, pending or threatened Litigation, or (vi) as may be
necessary or desirable in order to enforce the rights of the Finance Parties
under any Finance Document.
16.10.10 Substitute Lenders. If at any time the Borrower becomes obligated to
compensate any Lender for additional amounts pursuant to Section 7.5 or
increased payments pursuant to Subsection 7.8.1(d), or any Lender becomes an
Affected Lender and either ceases to make its Rateable Share available in any
Libor Loans pursuant to Subsection 7.6.1 or Section 7.7 or ceases to make its
Rateable Share in any Borrowing by way of Bankers' Acceptances pursuant to
Subsection 7.6.2, then the Borrower may, on 10 Business Days' prior written
notice to the Agent and such Affected Finance Party replace the Affected
Finance Party by causing the Affected Finance Party to (and the Affected
Finance Party shall be obligated to) assign and transfer its rights and
obligations under this Agreement pursuant to Subsection 16.10.4 to another
Lender that has agreed to accept such assignment and transfer or to another
Person selected by the Borrower that is acceptable to the Agent, acting in its
discretion exercised reasonably, (a "Replacement Lender") for a purchase price
equal to the Loan Obligations owing to the Affected Finance Party, including
all accrued interest and Fees and other amounts payable hereunder, together
with such amount as would be payable to the Affected Finance Party under
Subsection 16.2.1 if the Rateable Share of the Affected Finance Party in each
outstanding Advance were actually being paid by the Borrower instead of being
purchased by way of assignment and transfer pursuant to Subsection 16.10.4;
provided that (i) neither the Agent nor any Lender shall have any obligation
to the Borrower to find a Replacement Lender, (ii) in circumstances where an
Affected Finance Party is sought to be replaced pursuant to this Subsection
16.10.10, in order for the Borrower to be entitled to replace such Affected
Finance Party, such replacement must take place no later than 90 days after
the date the Affected Finance Party shall have notified the Agent that it had
become an Affected Finance Party, (iii) in no event shall the Affected Finance
Party be required to pay or surrender to such Replacement Lender any of the
principal, interest, Fees or other amounts received by the Affected Finance
Party pursuant to this Agreement and (iv) the Borrower shall only be entitled
to replace an Affected Finance Party pursuant to this Subsection 16.10.10 if
no Default has occurred.
16.11 Lead Arranger and Sole Bookrunner. Neither the Lead Arranger and Sole
Bookrunner nor any of its Representatives shall be under any obligation
whatsoever:
(a) to any Restricted Group Member as a consequence of any
failure or delay in performance by, or any breach by, any
Finance Party of any of its obligations under any Finance
Document;
(b) to any Finance Party as a consequence of any failure or
delay in performance by, or any breach by, any Restricted
Group Member of any of its obligations under any Finance
Document; or
(c) to any Finance Party for any statements, representations or
warranties in any Finance Document or any other agreement,
document or instrument contemplated by any Finance Document
or any other information provided pursuant to any Finance
Document or any other agreement, document or instrument
contemplated by any Finance Document or for validity,
effectiveness, enforceability or sufficiency of any Finance
Document or any other agreement, document or instrument
contemplated thereby.
16.12 Survival. The Loan Obligations payable under Sections 7.5, 7.8, 16.1
and 16.2 ("Indemnity Obligations") shall survive the Payment in Full of all
other Loan Obligations and shall continue in full force and effect until such
Indemnity Obligations are irrevocably paid in full.
16.13 Time of the Essence. Time is of the essence of each provision of each
Loan Document.
16.14 Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the laws in force in the Province of Ontario (excluding any
conflict of laws rule or principle which might refer such construction to the
laws of another jurisdiction). Such choice of law shall, however, be without
prejudice to or limitation of any other rights available to the Senior Lenders
under the laws of any jurisdiction where any Restricted Group Member or its
property may be located.
16.15 JURISDICTION.
16.15.1 SUBMISSION TO JURISDICTION AND WAIVER OF OBJECTIONS. WITH RESPECT TO
ANY CLAIM ARISING OUT OF THIS AGREEMENT, ANY OTHER FINANCE DOCUMENT OR ANY
OTHER AGREEMENT RELATING TO ANY FINANCE DOCUMENT (COLLECTIVELY, THE "FINANCE
RELATED AGREEMENTS"):
(a) FOR THE EXCLUSIVE BENEFIT OF THE FINANCE PARTIES, THE
BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF:
(i) THE PROVINCE OF ONTARIO, CANADA LOCATED AT TORONTO;
(ii) THE STATE OF NEW YORK AND THE UNITED STATES FEDERAL
COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW
YORK CITY; AND
(iii) THE JURISDICTION IN WHICH THE CHIEF EXECUTIVE
OFFICE OF EACH RESTRICTED GROUP MEMBER IS LOCATED
OR IN WHICH IT IS INCORPORATED LOCATED AT THE
PRINCIPAL FINANCIAL CENTER OF SUCH JURISDICTION,
INCLUDING ANY APPELLATE COURT FROM ANY THEREOF; AND
(b) THE BORROWER IRREVOCABLY WAIVES:
(i) ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR
RELATING TO ANY OF THE FINANCE RELATED AGREEMENTS
BROUGHT IN ANY COURT OF PRIMARY JURISDICTION;
(ii) ANY CLAIM THAT ANY SUCH LITIGATION BROUGHT IN ANY
COURT OF PRIMARY JURISDICTION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM;
(iii) THE RIGHT TO OBJECT, WITH RESPECT TO SUCH
LITIGATION BROUGHT IN ANY COURT OF PRIMARY
JURISDICTION, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER THE BORROWER; AND
(iv) THE RIGHT TO REQUIRE ANY SENIOR FINANCE PARTY TO
POST SECURITY FOR COSTS IN ANY LITIGATION BROUGHT
IN ANY COURT OF PRIMARY JURISDICTION.
16.15.2 SENIOR LENDERS MAY ▇▇▇ IN ANOTHER JURISDICTION. NOTHING IN THIS
AGREEMENT WILL BE DEEMED TO PRECLUDE THE SENIOR LENDERS FROM BRINGING ANY
LITIGATION IN RESPECT OF ANY FINANCE RELATED AGREEMENT IN ANY OTHER
JURISDICTION.
16.15.3 FINAL JUDGMENT. THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY
LITIGATION COMMENCED IN ANY COURT OF PRIMARY JURISDICTION SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN ANY OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN
ANY OTHER MANNER PROVIDED BY LAW.
16.15.4 WAIVER OF TRIAL BY JURY. FOR THE PURPOSES OF ANY LITIGATION COMMENCED
IN THE UNITED STATES, THE BORROWER IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION (A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH OR
RELATING TO ANY FINANCE RELATED AGREEMENT, OR (B) ARISING FROM OR RELATING TO
ANY RELATIONSHIP EXISTING IN CONNECTION WITH ANY FINANCE RELATED AGREEMENT,
AND AGREES THAT ANY SUCH LITIGATION SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY. THE BORROWER HEREBY (C) CERTIFIES THAT NO REPRESENTATIVE OF ANY
FINANCE PARTY HAS REPRESENTED EXPRESSLY OR OTHERWISE THAT SUCH FINANCE PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (D) ACKNOWLEDGES THAT THE SENIOR LENDERS HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS
SUBSECTION 16.15.4.
16.15.5 NEW YORK LAW. IN RELATION TO ANY LITIGATION COMMENCED IN THE COURTS OF
THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT COURT, THE SUBMISSIONS TO
JURISDICTION OF SUCH COURTS AND ARRANGEMENTS FOR SERVICE OF PROCESS OUT OF
SUCH COURTS SET OUT IN THIS SECTION 16.15 AND IN SECTION 16.17 SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
16.16 Service of Process.
16.16.1 Manner of Service. The Borrower irrevocably consents to the service of
process out of the Courts of Primary Jurisdiction in accordance with the local
rules of civil procedure or by mailing a copy thereof, by registered mail,
postage prepaid to the Borrower at the address of the Borrower, or by sending
a copy thereof by facsimile or e-mail in pdf format to the Borrower at the
facsimile number or e-mail address of the Borrower determined under Section
16.8.
16.16.2 Appointments of Agents for Service. The Borrower irrevocably
designates and appoints each other Restricted Group Member as its agent to
accept and acknowledge on its behalf any and all process which may be served
in connection with any Litigation arising out of or relating to any Finance
Related Agreement brought in any of the Courts of Primary Jurisdiction, such
service, to the extent permitted by applicable law, being hereby conclusively
acknowledged by the Borrower to be effective and binding service on it in
every respect whether or not it is carrying on, or has at any time carried on,
business in the jurisdiction in which the Courts of Primary Jurisdiction are
located. The Borrower irrevocably consents to the service of process out of
the Court of Primary Jurisdiction by personal service on the Borrower or on
any such process agent.
16.16.3 Acceptances of Appointments. The Borrower confirms to the Senior
Lenders that it has accepted its appointment to act as process agent on behalf
of each other Restricted Group Member contained in any Finance Related
Agreement to which each such other Restricted Group Member is party which may
be served in connection with any Litigation arising out of or relating to any
such other Finance Related Agreement brought in any of the Courts of Primary
Jurisdiction. Until the Finance Obligations are paid in full, the Borrower
covenants and agrees to maintain each such appointment as such process agent.
16.17 Invalidity. If any provision of any Loan Document is determined to be
invalid or unenforceable by a court of competent jurisdiction from which no
further appeal lies or is taken, that provision shall be deemed to be severed
therefrom, and the remaining provisions of such Loan Document shall not be
affected thereby and shall remain valid and enforceable.
16.18 Amendment. Each Loan Document to which the Borrower is a party may
only be changed by a written agreement signed by the Borrower and the Agent
acting on the instructions of the Required Lenders.
16.19 Entire Agreement. There are no representations, warranties, conditions,
other agreements or acknowledgments, whether direct or collateral, express or
implied, that form part of or affect this Agreement or any other Loan Document
other than as expressed herein or in such other Loan Document. The execution
of each Loan Document has not been induced by, nor does the Borrower rely upon
or regard as material, any representations, warranties, conditions, other
agreements or acknowledgments not expressly made in any Loan Document.
16.20 This Agreement to Govern. If there is any inconsistency between the
provisions of this Agreement and the provisions of any other Loan Document,
the provisions hereof shall govern and apply to the extent of the
inconsistency. Notwithstanding the foregoing, this Section 16.20 shall not
apply to limit, restrict, prejudice or otherwise affect or impair in any way
the rights of the Senior Lenders under the terms of any Security after those
rights have become enforceable.
16.21 Execution. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument, and
it shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart. Transmission of a copy of an
executed signature page of this Agreement (including any change and Loan
Transfer Agreement) by facsimile transmission or e-mail in pdf format shall be
effective as delivery of a manually executed counterpart hereof.
IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first written above.
BORROWER:
MDC PARTNERS INC.
Per:
----------------------------
Authorized Signatory
THE LENDER:
THE TORONTO-DOMINION BANK
Per:
-----------------------------
Authorized Signatory
Per:
-----------------------------
Authorized Signatory
THE AGENT:
THE TORONTO-DOMINION BANK
Per:
----------------------------
Authorized Signatory
SCHEDULE 1.1 "Borrowing Request"
FORM OF BORROWING REQUEST
TO: The Toronto-Dominion Bank
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice President, Agency, Loan Syndications
Re: Cdn.$25,000,000 Credit Facilities for MDC Partners Inc.
Reference is made to the credit agreement dated as of June 10, 2004
(as changed and in effect from time to time, the "Credit Agreement") among MDC
Partners Inc., as Borrower, The Toronto-Dominion Bank, as Lead Arranger and
Sole Bookrunner, the Institutions named therein as Lenders and The
Toronto-Dominion Bank, as Agent. All words used in this Borrowing Request
which are defined or given extended meanings in the Credit Agreement have the
respective meanings attributed to them in the Credit Agreement.
1. Request. The Borrower hereby requests a Borrowing under the Revolving
Facility as follows:
(a) Borrowing Date
(b) Aggregate amount of Borrowing
CAD_______________________
USD_______________________
(c) Type and Amount of Borrowing
(i) ( )
Converted From
Amount (if Applicable)
------ --------------
( ) Canadian Prime Rate Loan CAD_____________ _________________
( ) US Base Rate Loan USD______________ _________________
(ii) ( ) Acceptances (BA Equivalent Advance or Discount Note pursuant
to Section 5.10 or 5.11 of the Credit Agreement)
Rollover Amount Converted From
Face Amount Term in Months (if Applicable) (if Applicable)
----------- -------------- --------------- ---------------
CAD___________ ________________ CAD___________ ________________
(iii) ( ) Libor Loan
Rollover Amount Converted From
Amount Interest Period (if Applicable) (if Applicable)
------ --------------- --------------- ---------------
USD___________ ________________ USD___________ ________________
2. Other. The Borrower represents, warrants and agrees:
(a) The representations and warranties deemed to be repeated in
Section 12.2 of the Credit Agreement are true, accurate and
complete on and as of the date hereof with the same effect
as if such representations and warranties had been made on
and as of the date hereof.
(b) No Default has occurred and is continuing on the date hereof
or will result from the Borrowing requested herein.
(c) The undersigned will immediately notify you if it becomes
aware of the occurrence of any event between the date hereof
and the Borrowing Date which would mean that the statements
in the immediately preceding paragraphs (a) and (b) would
not be true if made on the Borrowing Date.
(d) All other conditions precedent set out in Sections 9.1, 9.2
and 9.3 of the Credit Agreement have been fulfilled or
waived in writing by the Required Lenders.
DATED this day of , .
MDC PARTNERS INC.
By:
----------------------------------
Name:
Title:
SCHEDULE 1.1 "Commitments"
COMMITMENTS
Revolving Swing Line
Lenders Commitment Commitment Total
------- ---------- ---------- -----
The Toronto-Dominion Bank CAD23,000,000 CAD2,000,000 CAD25,000,000
SCHEDULE 8.2
FORM OF CANCELLATION NOTICE
TO: The Toronto-Dominion Bank
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice President, Agency, Loan Syndications
Re: Cdn.$25,000,000 Credit Facilities for MDC Partners Inc.
Reference is made to the credit agreement dated as of June 10, 2004
(as changed and in effect from time to time, the "Credit Agreement") among MDC
Partners Inc., as Borrower, The Toronto-Dominion Bank, as Lead Arranger and
Sole Bookrunner, the Institutions named therein as Lenders and The
Toronto-Dominion Bank, as Agent. All words used in this Cancellation Notice
which are defined or given extended meanings in the Credit Agreement have the
respective meanings attributed to them in the Credit Agreement.
Notice is hereby given in accordance with Section 8.2 of the Credit
Agreement that the undersigned wishes to cancel the Total Commitment by the
amount of CAD______________, allocated as to CAD______________ to the
Revolving Facility and CAD______________ to the Swing Line, such cancellation
to take effect on ___________________________, 200___.
DATED this ____ day of _______, ____.
MDC PARTNERS INC.
By:
----------------------------
Name:
Title:
SCHEDULE 8.8
FORM OF REPAYMENT NOTICE
TO: The Toronto-Dominion Bank
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice President, Agency, Loan Syndications
Re: Cdn.$25,000,000 Credit Facilities for MDC Partners Inc.
Reference is made to the credit agreement dated as of June 10, 2004
(as changed and in effect from time to time, the "Credit Agreement") among MDC
Partners Inc., as Borrower, the Institutions named therein as Lenders and The
Toronto-Dominion Bank, as Agent. All words used in this Repayment Notice which
are defined or given extended meanings in the Credit Agreement have the
respective meanings attributed to them in the Credit Agreement.
Notice is hereby given in accordance with Section _____ of the Credit
Agreement that the undersigned commits to repay the __________(1) under the
Revolving Facility [which has a current Period End Date expiring on
________________, _______] in the amount of [CAD/USD]_______________ on
_______________, ______.
DATED this _____ day of _________, ______.
MDC PARTNERS INC.
By:
--------------------------------
Name:
Title:
----------
1 Specify type of Borrowing
SCHEDULE 10.1
LIST OF INITIAL SECURITY
BORROWER
1. Debenture from the Borrower
2. Debenture Delivery Agreement from the Borrower
3. Assignment of Insurance Proceeds Agreement from the Borrower
4. Insurance Assignment Acknowledgment relative to Item #3
5. Subordination Agreements, Limitation of Interest Letters, etc.
relative to Item #1
6. Confirmation of Security Interest in Intellectual Property by the
Borrower
7. Assignment and Security Agreement from the Borrower
8. Consent and Agreement relative to Item #7 from American Airlines,
Inc.
9. Assignment and Security Agreement from the Borrower
10. Consent and Agreement relative to Item #9 from Airlines Reporting
Corporation
11. Consent and Agreement relative to the KBP Limited Liability Company
Agreement
EXISTING SECURE PRODUCTS INTERNATIONAL GROUP
Computer Composition of Canada Inc.
12. Guarantee from Computer Composition of Canada Inc.
13. Debenture from Computer Composition of Canada Inc.
14. Debenture Delivery Agreement from Computer Composition of Canada Inc.
15. Assignment of Insurance Proceeds Agreement from Computer Composition
Canada Inc.
16. Insurance Assignment Acknowledgment relative to Item #15
▇▇▇▇▇▇-▇▇▇▇▇▇ Canada Ltd.
17. Guarantee from ▇▇▇▇▇▇-▇▇▇▇▇▇ Canada Ltd.
18. Debenture from ▇▇▇▇▇▇-▇▇▇▇▇▇ Canada Ltd.
19. Debenture Delivery Agreement from ▇▇▇▇▇▇-▇▇▇▇▇▇ Canada Ltd.
20. Assignment of Insurance Proceeds Agreement from ▇▇▇▇▇▇-▇▇▇▇▇▇ Canada
Ltd.
21. Insurance Assignment Acknowledgment relative to Item #20
▇▇▇▇▇▇-▇▇▇▇▇▇ [USA] Ltd.
22. Guarantee from ▇▇▇▇▇▇-▇▇▇▇▇▇ [USA] Ltd.
23. Security Agreement from ▇▇▇▇▇▇-▇▇▇▇▇▇ [USA] Ltd.
24. Securities Pledge Agreement from ▇▇▇▇▇▇-▇▇▇▇▇▇ [USA] Ltd.
25. Blocked Account Agreement between ▇▇▇▇▇▇-▇▇▇▇▇▇ [USA] Ltd., M&T Bank
and the Agent
26. Collateral Access Agreement from The ▇▇▇▇▇▇ Center, L.P. relative to
item #23
27. Subordination Agreements, Limitation of Interest Letters, Discharges,
etc.
28. Assignment and Security Agreement from ▇▇▇▇▇▇-▇▇▇▇▇▇ [USA] Ltd.
29. Consent, Waiver and Agreement relative to item #28 from United States
Postal Service
Pro-Image Corporation
30. Guarantee from Pro-Image Corporation
31. Security Agreement from Pro-Image Corporation
32. Blocked Account Agreement between Pro-Image Corporation, ▇▇▇▇▇▇ Bank
and the Agent
33. Subordination Agreements, Limitation of Interest Letters, Discharges,
etc.
Metaca Corporation
34. Guarantee from Metaca Corporation
35. Debenture from Metaca Corporation
36. Debenture Delivery Agreement from Metaca Corporation
37. Assignment of Insurance Proceeds Agreement from Metaca Corporation
38. Insurance Assignment Acknowledgment relative to Item #37
39. Subordination Agreements, Limitation of Interest Letters, Discharges,
etc. relative to Item #35
40. Confirmation of Security Interest in Intellectual Property by Metaca
Corporation
41. Assignment and Security Agreement from Metaca Corporation
42. Consent and Agreement relative to Item #41 from DIRECTV
43. Share Pledge Agreement over the shares in Placard Pty Ltd.
KBP GROUP
MDC/KBP Acquisition Inc.
44. Guarantee from MDC/KBP Acquisition Inc.
45. Security Agreement from MDC/KBP Acquisition Inc.
Placard Pty Ltd.
46. Guarantee from Placard Pty. Ltd.
47. Deed of Charge from Placard Pty. Ltd. on all property except property
in WA, NSW, QLD, TAS and SA
48. Deed of Charge from Placard Pty. Ltd. on all property in the
jurisdictions of WA, NSW, QLD, TAS and SA
49. Account Bank Deed between Placard Pty. Ltd., the Agent and the
Australia and New Zealand Banking Group Limited
MDC USA Holdings Inc.
50. Guarantee from MDC USA Holdings Inc.
51. Security Agreement from MDC USA Holdings Inc.
SCHEDULE 11.2
FORM OF ADHESION CONTRACT
Reference is made to the credit agreement dated as of June 10, 2004
(as such agreement may be changed and in effect from time to time, the "Credit
Agreement") among MDC Partners Inc., as Borrower, The Toronto-Dominion Bank,
as Lead Arranger and Sole Bookrunner, the institutions named therein as
Lenders, and The Toronto-Dominion Bank as Administration Agent. Capitalized
terms used but not otherwise defined herein shall have the respective meanings
assigned in the Credit Agreement. This is an Adhesion Contract.
RECITALS:
Pursuant to Section 11.1 of the Credit Agreement, the Borrower wishes
to designate the Adhesion Party defined below as a Lender Hedging Affiliate
under the Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the Borrower, the Lenders, the Agent,
the other Lender Hedging Affiliates and ____________________________________
(the "Adhesion Party"), hereby agree as follows:
1. With effect as of the date the Agent confirms to the Borrower that it
has received a fully executed copy of this Adhesion Contract, in form
and substance satisfactory to it, the Credit Agreement shall
henceforth be read and construed as if the Adhesion Party were party
to the Credit Agreement having all the rights and obligations of a
Lender Hedging Affiliate under the Credit Agreement. Accordingly all
references in any Loan Documents to (a) any "Lender Hedging
Affiliate" or any "Qualified Hedge Counterparty" shall be treated as
including a reference to the Adhesion Party and (b) the Credit
Agreement shall be treated as a reference to the Credit Agreement as
supplemented by this Adhesion Contract to the intent that this
Adhesion Contract and the Credit Agreement shall be read and
construed together as one single agreement.
2. The Adhesion Party represents and warrants to each of the other
parties to the Credit Agreement that (i) it has been provided with a
copy of the Credit Agreement, (ii) it is an Affiliate of a Lender.
3. The Adhesion Party irrevocably appoints, authorizes and directs the
Agent, as its attorney and agent, with full power of substitution and
delegation, to complete, execute and deliver on behalf of the
Adhesion Party each Finance Document to be executed by it or on its
behalf and each agreement, document and instrument to be executed by
it or on its behalf pursuant to each Finance Document, and to take
such action on its behalf as may be authorized or directed pursuant
to any such Finance Document.
4. This Adhesion Contract may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an
original and all of which taken together shall constitute but one and
the same instrument. Transmission of a copy of an executed signature
page of this Adhesion Contract by facsimile transmission or by e-mail
in pdf format shall be effected as delivery if a manually executed
counterpart hereof.
5. This Adhesion Contract shall be governed by, and interpreted in
accordance with, the laws of the Province of Ontario and the federal
laws of Canada applicable therein.
IN WITNESS WHEREOF, the parties hereto have caused this Adhesion
Contract to be executed and delivered by their respective officers thereunto
duly authorized as of the _____________ day of ___________________________,
______.
MDC PARTNERS INC.
---------------------------------
as Adhesion Party
By: By:
---------------------------- ------------------------------
Title: Title:
-------------------------- ---------------------------
THE TORONTO-DOMINION BANK
as Agent
By:
-----------------------
Title:
---------------------
SCHEDULE 12.1.20
ORGANIZATION CHART
SCHEDULE 12.1.22
DEFERRED ACQUISITION CONSIDERATION AND PUT/CALL OBLIGATIONS
SEE ATTACHED
SCHEDULE 13.1.6
FORM OF COMPLIANCE CERTIFICATE
TO: The Toronto-Dominion Bank
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice President, Agency, Loan Syndications
Re: Cdn.$25,000,000 Credit Facilities for MDC Partners Inc.
Reference is made to the credit agreement dated as of June 10, 2004
(as changed and in effect from time to time, the "Credit Agreement") among MDC
Partners Inc., as Borrower, The Toronto-Dominion Bank, as Lead Arranger and
Sole Bookrunner, the Institutions named therein as Lenders and The
Toronto-Dominion Bank, as Agent. All words used in this Compliance Certificate
which are defined or given extended meanings in the Credit Agreement have the
respective meanings attributed to them in the Credit Agreement.
This Compliance Certificate is given pursuant to Subsection 13.1.6 of
the Credit Agreement.
The Borrower hereby certifies as follows:
(a) Total Debt/EBITDA Ratio. The attachment hereto shows the
calculation of the Total Debt/EBITDA Ratio to be _____ : 1
which does not exceed the maximum limit of 2 : 1 prescribed
for this ratio.
(b) Total Debt/Total Capitalization Percentage. The attachment
hereto shows the calculation of the Total Debt/Total
Capitalization Percentage to be _______% which does not
exceed the maximum limit of 15% prescribed for the
percentage.
(c) Shareholders Equity. The attachment hereto shows the
calculation of Shareholders Equity to be CAD_______________
which exceeds the minimum Shareholders Equity of
CAD_______________ required for this amount.
(d) Interest Coverage Ratio. The attachment hereto shows the
calculation of the Interest Coverage Ratio to be _____ : 1
which is not less than the minimum limit of 2.5 : 1
prescribed for this ratio.
(e) Applicable Margin. The attachment shows that the Applicable
Margin has changed to / remains the same as set out below:
Applicable Margin for
Standby Instruments,
Total Debt/ Applicable Margin for Libor Loans
EBITDA Ratio Floating Rate Loans and Acceptances
------------ ------------------- ---------------
__________:1 __________% __________%
(f) Restricted Group Members. [New Restricted Group Members
exist and are set out in the revised Schedule 12.1.20
attached./ No new Restricted Group Members exist.]
(g) Deferred Acquisition Consideration and Put/Call Obligations.
Revised Schedule 12.1.22 attached hereto contains the
Borrower's reasonable best estimates of (i) all Deferred
Acquisition Consideration and (ii) the current portion of
all Put/Call Obligations.
(h) Material Contracts. [New Material Contracts exist and copies
thereof are being delivered to the Agent contemporaneously
herewith./ No New Material Contracts exits.]
Each of the calculations in the attachment hereto demonstrates
compliance with the relevant financial tests listed above as at, or for the
relevant period ending on ____________, _________.
The undersigned represents, warrants and agrees:
(a) The representations and warranties deemed to be repeated in
Section 12.2 of the Credit Agreement are true, accurate and
complete on and as of the date hereof with the same effect
as if such representations and warranties had been made on
and as of the date hereof.
(b) No Default has occurred and is continuing on the date
hereof.
The undersigned acknowledges its obligations under the Finance
Documents, confirms that it remains bound by each of the obligations expressed
to be binding upon it in the Finance Documents and agrees to punctually pay
and perform its obligations under the Finance Documents in accordance with
their respective terms.
DATED this ______ day of _____________, ______.
Yours very truly,
MDC PARTNERS INC.
By:
----------------------------
Name:
Title:
ATTACHMENT
TO SCHEDULE 13.1.6
SCHEDULE 13.2.3(f)
NON-CORE ASSETS
MDC PARTNERS INC.
SCHEDULE OF NON-CORE ASSETS PROPOSED TO BE
ALLOWED TO BE SOLD / REALIZED CDN $
Face / MDC
Notional Book
ASSET Value Value
=====================================================================================================
Loan Receivable from ▇. ▇▇▇▇▇ 6,820,078 1
Loan Receivable from Nadal Financial Corporation 3,000,000 1
Loan Receivable from Regal Greetings & Gifts 6,000,000 1
Investment in Regal Greetings & Gifts 1,764,706 1
Net Loan Receivable from ▇.▇. ▇▇▇▇▇▇▇▇ Seeds 1,000,000 1
Net Loan Receivable from 454368 Manitoba Ltd. (RE AEM) 1,700,000 1
Investment in Cyberplex 1,345,696 934,479
Investment in Megawheels Technologies Inc. 363,982 1
Investment in Hotline Communications Ltd. 300,000 1
Investment in Primaxis Technology Ventures Inc. 2,380,054 1
Investment in Yorkton Private Equity Limited Partnership 77,880 1
Investment in Mosaic Venture Partners II Limited Partnership 1,700,000 400,000
Investment in Trapeze Media Limited 570,000 1
----------------- ---------------
27,022,396 1,334,490
----------------- ---------------
SCHEDULE 13.3.4
LIENS
Liens perfected by the following registrations over specific items of property
(as opposed to Liens over all or any substantial part of the undertaking,
property and assets of a Restricted Group Member), excluding the Capital Stock
of any Restricted Group Member, in favour of Unrelated Parties securing
Indebtedness outstanding at any time for the entire Restricted Group in an
aggregate amount (including those referred to in paragraph (q) of the
definition of Permitted Liens) not exceeding USD7,500,000:
1. Ontario PPSA Registration Number 20030205 1442 1530 9456, File Number
891452682 against MDC Corporation Inc. in favour of GE VFS Canada
Limited Partnership.
2. Ontario PPSA Registration Number 20021216 1857 1531 5072, File Number
890115543 against MDC Corporation Inc. in favour of GE VFS Canada
Limited Partnership.
3. Ontario PPSA Registration Number 20020719 1808 1531 0567, File Number
885542202 against MDC Corporation Inc. in favour of GE VFS Canada
Limited Partnership.
4. Ontario PPSA Registration Number 20020118 1812 1531 0567, File Number
879846561 against MDC Corporation Inc. by ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Limited
Partnership.
5. Ontario PPSA Registration Number 20000420 1715 1462 1408, File Number
861117084 against MDC Corporation Inc. by City National Leasing, a
Division of City Buick Pontiac Cadillac Ltd.
6. Ontario PPSA Registration Number 19951228 1821 1529 6911, File Number
818948709 against Mercury Graphics Corporation by Royal Bank of
Canada.
7. Ontario PPSA Registration Number 20021030 1126 1715 0698, File Number
888754653 against Metaca Corporation in favour of Xerox Canada Ltd.
8. Saskatchewan PPSA Registration Number 117262355 against MDC
Corporation Inc. by Danka Canada.
9. Saskatchewan PPSA Registration Number 115824779 against Mercury
Graphics Corporation.
10. Saskatchewan PPSA Registration Number 117262355 against Mercury
Graphics Corporation.
11. Saskatchewan PPSA Registration Number 119474063 against Mercury
Graphics Corporation.
12. Saskatchewan PPSA Registration Number 108502879 against Mercury
Graphics Corporation and MDC Communications Corporation by Royal Bank
of Canada.
13. Saskatchewan PPSA Registration Number 108502992 against Mercury
Graphics Corporation and MDC Communications Corporation by Royal Bank
of Canada Leasing.
14. Saskatchewan PPSA Registration Number 119074790 against Mercury
Graphics Corporation by Heidelberg Canada Graphic Equipment Limited.
SCHEDULE 16.7.2
FORM OF NOTE
PROMISSORY NOTE
[Date]
MDC PARTNERS INC., an Ontario corporation (the "Borrower"), promises
to pay to the order of _____________ (the "Lender") the aggregate unpaid
principal amount of the Lender's Rateable Share of all Advances made by the
Lender to the Borrower pursuant to the Credit Agreement (as hereinafter
defined), in immediately available funds to the Agent's Accounts, together
with interest on the unpaid principal amount hereof at the rates and on the
dates set forth in the Credit Agreement. The Borrower shall pay the principal
of and accrued and unpaid interest on the Advances in full at the times and in
the manner specified in the Credit Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of its Rateable Share in each Advance and the date and
amount of each principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement dated as of June 10, 2004 (which, as it
may be changed and in effect from time to time, is herein called the "Credit
Agreement"), among the Borrower, The Toronto-Dominion Bank as Lead Arranger
and Sole Bookrunner, the Institutions named therein as Lenders, and The
Toronto-Dominion Bank, as Agent, to which Credit Agreement reference is hereby
made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. This Note is guaranteed pursuant to certain
Guarantees and secured by certain Security, all as outlined in more detail in
the Credit Agreement, and reference is made thereto and to the other Loan
Documents for a statement of the terms and provisions thereof. Words used
herein and not otherwise defined herein are used with the defined or extended
meanings attributed to them in the Credit Agreement.
The Borrower hereby waives demand, presentment for payment,
dishonour, notice of dishonour, protest, noting of protest and any other
notice or defense to payment which might otherwise exist.
IN WITNESS WHEREOF this Note is issued this ________ day of
_____________, 200___.
MDC PARTNERS INC.
By:
----------------------
Name:
Title:
SCHEDULE OF ADVANCES AND PAYMENTS OF PRINCIPAL
TO NOTE OF _______________________________
DATED _____________________
Type Principal Amount
of of Rateable Share Period Principal Amount Unpaid
Date Advance of Advance End Date Paid Balance
---- -------- ------------------ -------- ---------------- -------
SCHEDULE 16.8
ADDRESSES FOR NOTICES
To the Borrower:
MDC Partners Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Chief Financial Officer and Corporate Secretary
Telephone: ▇▇▇ ▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇ ▇▇▇▇
To the Agent:
The Toronto-Dominion Bank
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice President, Agency, Loan Syndications
Telephone: ▇▇▇ ▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇ ▇▇▇▇
SCHEDULE 16.10.4
FORM OF LOAN TRANSFER AGREEMENT
Loan Transfer Agreement
THIS AGREEMENT is made the _______ day of _____________. ______.
AMONG:
<*>
(hereinafter called the "Transferor")
- and -
<*>
(hereinafter called the "Transferee")
- and -
<*>
acting as administration agent for and on behalf of itself
and the other Finance Parties with respect to the Credit
Facilities and certain of the Finance Documents
(hereinafter called the "Agent")
RECITALS:
A. MDC Partners Inc., as Borrower, The Toronto-Dominion Bank, as Lead
Arranger and Sole Bookrunner, the Institutions named therein as
Lenders, and The Toronto-Dominion Bank, as Agent, entered into a
credit agreement dated as of June 10, 2004 (as changed and in effect
from time to time, the "Credit Agreement"). Words defined or given
extended meanings in the Credit Agreement (and not otherwise defined
herein) are used with the same respective defined or extended
meanings in this loan transfer agreement.
B. The Transferor is a Lender under the Credit Agreement with the
following Commitments determined before the transfer contemplated
hereby takes effect:
Revolving Commitment Swing Line Commitment
CAD_________________ CAD_________________
C. The Transferor has agreed to transfer to the Transferee the amounts
of its Commitments (the "Relevant Transfer Amounts") and/or the
proportions of its Commitments (the "Relevant Transfer Percentages")
indicated in the table below:
Relevant Relevant
Transfer Transfer
Credit Facility Amount Percentage
Revolving Facility CAD____________ ______ %
Swing Line CAD____________ ______ %
The portion of the Transferor's Commitments so transferred is
hereinafter called the "Transferred Commitments".
WITNESSETH THAT in consideration of the mutual covenants herein
contained and other valuable consideration now paid by each party hereto, the
one to the other, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Transferred Commitment. The Transferor confirms to each of the
Transferee and the other parties to the Credit Agreement that the
Transferred Commitments relate to the Relevant Transfer Amounts and
Relevant Transfer Percentages of its Transferred Commitments
(including the corresponding percentage of each outstanding Advance
under each such portion of its respective Transferred Commitments).
2. Transfer. As of and from the fifth (5th) Business Day after the date
the Agent notifies the Transferor and Transferee that it has executed
this loan transfer agreement, or such other date as the Agent may
agree upon with the Transferor and Transferee (herein called the
"Effective Date") and subject to the terms and conditions herein
contained:
(a) the Transferee assumes obligations identical to the
obligations of the Transferor under the Credit Agreement
arising on or after the Effective Date in relation to the
Transferred Commitments (herein called the "Transferred
Obligations") and agrees to perform and be responsible for
such obligations as if the Transferee were named in the
Credit Agreement and the other Loan Documents to which the
Transferor is party as an original party in substitution for
the Transferor or its predecessor by amalgamation or merger
or in title, as applicable, in respect of the Transferred
Obligations;
(b) the Agent on its own behalf and on behalf of each of the
Finance Parties other than the Transferor (herein called the
"Other Finance Parties") hereby releases and forever
discharges the Transferor of and from any and all losses and
expenses and obligations arising on or after the Effective
Date under, by reason of, or in connection with the
Transferred Obligations;
(c) the Agent on its own behalf and on behalf of each of the
Other Finance Parties acknowledges and agrees that, except
as otherwise provided in Section 3 of this loan transfer
agreement, the Transferee is hereby assigned and entitled to
rights identical to the rights of the Transferor under the
Credit Agreement existing on or arising after the Effective
Date in relation to the Transferred Commitments (herein
called the "Transferred Rights"); and
(d) the Transferor hereby releases and forever discharges each
of the Agent and the Other Finance Parties of and from any
and all losses and expenses and obligations arising after
the Effective Date under, by reason of, or in connection
with the Transferred Rights or the Transferred Obligations.
3. Transitional Provisions. Subject to the terms and conditions
contained herein:
(a) any payments due and payable by the Borrower on or before
the Effective Date in respect of the Transferred
Commitments; and
(b) any payments due and payable by the Borrower after the
Effective Date, but payable in respect of the Transferor's
Rateable Share in any Libor Loan or issue of Acceptances
outstanding on the Effective Date,
shall, upon receipt by the Agent, be paid to the Transferor. For
certainty, the Transferee acknowledges that its Rateable Share in
Advances by way of Libor Loans and issues of Acceptances outstanding
under the Credit Facilities as at the Effective Date will only take
effect on the Period End Dates for those Libor Loans and issues of
Acceptances.
4. Payments Between Transferor and Transferee. Any payments between the
Transferor and Transferee required to be made in relation to this
loan transfer agreement (including any transitional payments in
relation to matters referred to in paragraph 3 above) are strictly a
matter as between the Transferor and Transferee and shall, as between
the Borrower, the Agent and the Other Finance Parties, on the one
hand, and the Transferor and Transferee on the other hand, be deemed
to have been paid.
5. Copy to the Borrowers. Each of the Transferor and Transferee hereby
authorizes the Agent to provide a signed copy of this loan transfer
agreement to the Borrower in acceptance of the offer contained in the
Credit Agreement of the Borrower to the Transferee to become a party
to the Credit Agreement in respect of the Transferred Commitments.
Upon receipt thereof by the Borrower, the provisions of Subsection
16.10.4 of the Credit Agreement in respect of the Transferred
Participation shall become effective and be binding upon all parties
to the Credit Agreement.
6. Power of Attorney. The Transferee irrevocably appoints, authorizes
and directs the Agent, as its attorney and agent, with full power of
substitution and delegation, to complete, execute and deliver on
behalf of the Transferee, each Finance Document to be executed by it
or on its behalf and each agreement, document or instrument to be
executed by it or on its behalf pursuant to each Finance Document,
and to take such action on its behalf as may be authorized or
directed pursuant to any such Finance Document.
7. Interpretation. This loan transfer agreement shall be governed by,
and interpreted in accordance with, the laws of the Province of
Ontario and the laws of Canada applicable therein and shall be
construed as supplemental to and form part of the Credit Agreement.
Transmission of a copy of an executed signature page of this loan
transfer agreement by facsimile transmission or by e-mail in pdf
format shall be effective as delivery of a manually executed
counterpart hereof.
IN WITNESS WHEREOF the parties hereto have executed this agreement as
of the day and year first above written.
--------------------------------------
as Transferor
By:
-----------------------------------
Authorized Signatory
--------------------------------------
as Transferee
By:
---------------------------------
Authorized Signatory
-------------------------------------
as Agent
By:
---------------------------------
Authorized Signatory
EXHIBIT 1
LITIGATION DISCLOSURE
1. An action has been commenced in the United States Bankruptcy Court,
District of Delaware by ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Plaintiff") against Bank
of America, National Association ("BANA") NB Holdings Corporation,
Bank of America Corporation and MDC Partners Inc. amongst others (the
"Defendants") in respect of Cybersight LLC (the "Debtor"). The action
concerns a line of credit made available to the Debtor by BANA in the
amount of USD1,000,000 (the "Funds") and is an attempt by the
Plaintiff acting in his capacity as trustee for the estate of the
Debtor to recover the repayment of such Funds plus interest. The
amount sought is USD1,026,700.91. A pre trial conference has been
scheduled for November 4, 2004.
2. 02-CV-230413 CM Negligence. Ash Temple Limited (the "Plaintiff") has
filed a negligence suit against MDC Corporation Inc. ("Defendant")
which action has not been set down for trial as of the date hereof.
The suit is for the amount of CDN250,000 and the Defendant intends to
enter into nuisance settlement discussions with the Plaintiff.