AMENDED AND RESTATED CREDIT AGREEMENT Dated as of June 27, 2007 Between SR TELECOM INC. as Borrower and BNY TRUST COMPANY OF CANADA as Administrative Agent and Collateral Agent and THE LENDERS NAMED HEREIN as Lenders
EXECUTION
COPY
AMENDED
AND RESTATED CREDIT AGREEMENT
Dated
as
of June 27, 2007
Between
as
Borrower
and
BNY
TRUST COMPANY OF CANADA
as
Administrative Agent and Collateral Agent
and
THE
LENDERS NAMED HEREIN
as
Lenders
ANNEXES
|
Annex
A
|
Definitions
|
|
Annex
B
|
Reporting
- Financial Statements, Notices, Operating Plan, Budget, Reports
and Other
Information
|
|
Annex
C
|
Addresses
for Notices
|
|
Annex
D
|
Disclosure
Letters
|
SCHEDULES
|
Schedule
1.1(1)(a)
|
Initial
Loans
|
|
Schedule
1.1(2)(a)
|
June
2007 Loans
|
|
Schedule
1.1(3)(a)
|
Supplemental
Loan Commitments
|
|
Schedule
1.1(4)(a)
|
Convertible
Term A Loans
|
|
Schedule
1.1(5)(a)
|
Convertible
Term B Loans
|
|
Schedule
1.1(6)(a)
|
Convertible
Term C Loans
|
|
Schedule
3.2
|
Chief
Executive Office and Principal Place of Business and Locations of
Collateral
|
|
Schedule
3.4(1)
|
Financial
Statements
|
|
Schedule
3.4(2)
|
Original
Budget
|
|
Schedule
3.6
|
Ownership
of Property; Liens
|
|
Schedule
3.7
|
Labour
Matters
|
|
Schedule
3.8
|
Ventures,
Subsidiaries and Affiliates; Outstanding Stock and Indebtedness;
Corporate
Structure
|
|
Schedule
3.10
|
Taxes
|
|
Schedule
3.11
|
Canadian
Pension and Benefit Plans; Subsidiary Pension Plans
|
|
Schedule
3.12
|
Litigation
|
|
Schedule
3.14
|
Intellectual
Property
|
|
Schedule
3.16
|
Environmental
Matters
|
|
Schedule
3.17
|
Insurance
|
|
Schedule
3.18
|
Deposit
and Disbursement Accounts
|
|
Schedule
3.19
|
Intentionally
Deleted
|
|
Schedule
3.20
|
Agreements
and Other Documents
|
|
Schedule
3.21
|
Subordinated
Debt
|
|
Schedule
5.1
|
Maintenance
of Existence and Conduct of Business
|
|
Schedule
5.2(1)
|
Contested
Charges
|
|
Schedule
6.3
|
Indebtedness
and Guaranteed Indebtedness
|
|
Schedule
6.4(1)
|
Employee
Loans and Affiliate Transactions
|
|
Schedule
6.7
|
Liens
|
EXHIBITS
|
Exhibit
1.1(2)(b)
|
Form
of June 2007 Loan Note
|
|
Exhibit
1.1(3)(a)
|
Form
of Supplemental Loan Draw Request
|
|
Exhibit
1.1(3)(b)
|
Form
of Supplemental Loan Note
|
|
Exhibit
1.1(4)(b)
|
Form
of Convertible Term A Loan Note
|
|
Exhibit
1.1(5)(b)
|
Form
of Convertible Term B Loan Note
|
|
Exhibit
1.1(6)(b)
|
Form
of Convertible Term C Loan Note
|
|
Exhibit
1.1(7)(a)
|
Conversion
Form
|
|
Exhibit
1.4(3)
|
Form
of PIK Note
|
|
Exhibit
9.1(a)
|
Assignment
Agreement
|
AMENDED
AND RESTATED CREDIT AGREEMENT
This
AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 27, 2007 is entered
into
by and between SR TELECOM INC., a Canadian corporation
("Borrower"), BNY TRUST COMPANY OF CANADA, as Administrative
Agent and Collateral Agent, and Lenders party hereto from time to
time.
RECITALS:
|
A.
|
The
Borrower, BNY Trust Company of Canada, as Administrative Agent and
Collateral Agent and the Lenders party thereto entered into a credit
agreement dated as of May 19, 2005, as amended by a first amendment
made
as of July 29, 2005, a second amendment made as of August 5, 2005,
a third
amendment made as of September 2, 2005, a fourth amendment made as
of
September 2, 2005, a fifth amendment made as of November 9, 2005,
a sixth
amendment made as of December 5, 2005, a seventh amendment made as
of
January 31, 2006 and an eighth amendment made as of December 7, 2006
(as
amended, the "Original Credit
Agreement").
|
|
B.
|
The
Borrower, the Agents and the Lenders desire to amend and restate
the
Original Credit Agreement to add the 2007 Loans and restructure the
existing loans as set out herein.
|
FOR
VALUE
RECEIVED, the parties agree as follows:
SECTION
1
AMOUNT
AND TERMS OF CREDIT FACILITIES
|
1.1
|
Credit
Facilities
|
(1) Initial
Loans.
(a) Subject
to the terms and conditions hereof, each Initial Lender has made a loan to
Borrower in the amount set out in Schedule 1.1(1)(a) (each an "Initial
Loan" and collectively, the "Initial Loans") and has
made related PIK Loans. The Initial Loans are term loans and thus are not
revolving. Any Initial Loans which are repaid by the Borrower may not be
reborrowed. The entire unpaid balance of the Initial Loans, the related PIK
Loans and all other non-contingent Obligations in connection therewith shall
be
immediately due and payable in full in immediately available funds on the
Maturity Date. The parties confirm that the Initial Loans and related PIK Loans
are the same Obligations as the Term Loans and related PIK Loans (as such terms
were defined in the Original Credit Agreement) held by Initial Lenders
and that this Agreement, the Initial Loans and the related PIK Loans
do
not involve a novation of any Term Loans and related PIK Loans (as defined
in
the Original Credit Agreement) or a new advance of funds by any Lender or any
repayment or reissue by Borrower of any Term Loans or related PIK Loans (as
such
term was defined in the Original Credit Agreement).
(b) On
the Closing Date, the Revolving Notes issued pursuant to the Original Credit
Agreement shall be deemed to represent the Initial Loans. Each Revolving Note
shall represent the obligation of Borrower to pay to an Initial Lender the
amount of such Initial Lender's Initial Loans or, if less, the aggregate unpaid
amount of such Initial Lender's Initial Loan Pro Rata Share of the Initial
Loans
made to Borrower, together with interest thereon as prescribed in Section
1.4. Borrower acknowledges and agrees that the aggregate principal amount
stated to be outstanding set forth on each Revolving Note or in the Loan
Accounts shall, absent manifest error, be presumptive evidence of the amounts
due and owing to each Initial Lender by Borrower; provided that
any failure to so record or any error in so
recording
or to issue a Revolving Note shall not limit or otherwise affect Borrower's
duty
to pay the Obligations.
(c) Each
payment of principal with respect to the Initial Loans shall be paid to
Administrative Agent for the ratable benefit of each Initial Lender, ratably
in
proportion to each such Initial Lender's Initial Loan Pro Rata Share of the
Initial Loans.
(2) June
2007 Loans.
(a) Subject
to the terms and conditions hereof, each June 2007 Lender agrees to make a
term
loan to Borrower on the Closing Date in the amount set out opposite its name
in
Schedule 1.1(2)(a) (each a "June 2007 Loan" and
collectively, the "June 2007 Loans"). The June 2007 Loans are
term loans and thus are not revolving. Any June 2007 Loans which are repaid
by
the Borrower may not be reborrowed. The entire unpaid balance of the June 2007
Loans and all other non-contingent Obligations in connection therewith shall
be
immediately due and payable in full in immediately available funds on the
Maturity Date.
(b) On
the Closing Date, the Borrower will issue to each June 2007 Lender a promissory
note (each, a "June 2007 Loan Note" and collectively, the
"June 2007 Loan Notes") to evidence its June 2007 Loan. Such
June 2007 Loan Note shall be in the principal amount of each June 2007 Lender's
June 2007 Loan, dated as of the Closing Date and substantially in the form
of
Exhibit 1.1(2)(b). Such June 2007 Loan Note shall represent the
obligation of Borrower to pay to such June 2007 Lender the amount of such June
2007 Loan Note or, if less, the aggregate unpaid amount of such June 2007
Lender's June 2007 Loan Pro Rata Share of the June 2007 Loans made to Borrower,
together with interest thereon as prescribed in Section 1.4. Borrower
acknowledges and agrees that the aggregate principal amount stated to be
outstanding set forth on each June 2007 Loan Note or in the Loan Accounts shall,
absent manifest error, be presumptive evidence of the amounts due and owing
to
each June 2007 Lender by Borrower; provided that any failure to so
record or any error in so recording or to issue a June 2007 Loan Note shall
not
limit or otherwise affect Borrower's duty to pay the Obligations.
(c) Each
payment of principal with respect to the June 2007 Loans shall be paid to
Administrative Agent for the ratable benefit of each June 2007 Lender, ratably
in proportion to each such June 2007 Lender's June 2007 Loan Pro Rata Share
of
the June 2007 Loans.
(3) Supplemental
Loan.
(a) During
the Supplemental Loan Commitment Period and subject to the terms and conditions
hereof, each Supplemental Lender agrees to make to Borrower its Supplemental
Loan Pro Rata Share of delayed draw term loans (each a "Supplemental
Loan" and, collectively, the "Supplemental Loans") in
accordance with its Supplemental Loan Commitment. The aggregate amount of all
funded Supplemental Loans shall at no time exceed the aggregate Supplemental
Loan Commitments. The obligations of each Supplemental Lender hereunder shall
be
several and not joint. The Supplemental Loans are term loans and thus are not
revolving loans. Any portion of the Supplemental Loans which is repaid by
Borrower may not be reborrowed. The Supplemental Loans shall be available only
during the Supplemental Loan Commitment Period in separate draws of a minimum
of
Cdn$1,000,000 each upon Borrower meeting the conditions set out in Section
2.2 and upon delivery of a draw request (a "Supplemental Loan Draw
Request") by Borrower to Administrative Agent at the address specified
on Annex C. Each Supplemental Loan Draw Request must be given
no later than 11:00 a.m. (Toronto time) three (3) Business Days prior to the
proposed borrowing date. Each Supplemental Loan Draw Request must be given
in
writing (by telecopy or overnight courier) substantially in the form of
Exhibit 1.1(3)(a) and shall include the information required in such
Exhibit and such other information as may be required
2
by
Requisite Lenders. The Supplemental Loan Commitments shall terminate at the
end
of the Supplemental Loan Commitment Period. The entire unpaid balance of the
Supplemental Loans, all related PIK Loans and all other non-contingent
Obligations in connection therewith shall be immediately due and payable in
full
in immediately available funds on the Maturity Date.
(b) On
the Closing Date, Borrower will issue to each Supplemental Lender a promissory
note (each a "Supplemental Loan Note" and collectively, the
"Supplemental Loan Notes") to evidence the Supplemental Loan
Commitment of such Supplemental Lender. Such Supplemental Loan Note shall be
in
the principal amount of such Supplemental Lender's Supplemental Loan Commitment,
dated as of the Closing Date and substantially in the form of Exhibit
1.1(3)(b). Each Supplemental Loan Note shall represent the obligation of
Borrower to pay to such Supplemental Lender the amount of such Supplemental
Loan
Note or, if less, the aggregate unpaid amount of such Supplemental Lender's
Supplemental Loan Pro Rata Share of the Supplemental Loans made to Borrower,
together with interest thereon as prescribed in Section 1.4. Borrower
acknowledges and agrees that the aggregate principal amount stated to be
outstanding set forth on the Supplemental Loan Notes or in the Loan Accounts
shall, absent manifest error, be presumptive evidence of the amount due and
owing to such Supplemental Lender by Borrower; provided that any
failure to so record or any error in so recording or to issue a Supplemental
Loan Note shall not limit or otherwise affect Borrower's duty to pay the
Obligations.
(c) Each
payment of principal with respect to the Supplemental Loans shall be paid to
Administrative Agent for the ratable benefit of each Supplemental Lender,
ratably in proportion to each Supplemental Lender's Supplemental Loan Pro Rata
Share of the Supplemental Loans.
(4) Convertible
Term A Loan.
(a) Subject
to the terms and conditions hereof, each Convertible Term A Loan Lender has
made
available to Borrower its share of the Convertible Term A Loan as set out on
Schedule 1.1(4)(a) and has made related PIK Loans. The Convertible Term A Loan
is a term loan and thus is not revolving. Any portion of the Convertible Term
A
Loan which is repaid by the Borrower may not be reborrowed. The entire unpaid
balance of the Convertible Term A Loan, the related PIK Loans and all other
non-contingent Obligations in connection therewith shall be immediately due
and
payable in full in immediately available funds on the Maturity Date. The parties
confirm that the Convertible Term A Loan and related PIK Loans are the same
Obligations as the Convertible Term Loan and related PIK Loans (as such terms
were defined in the Original Credit Agreement) which were held by what are
now
Convertible Term A Loan Lenders and that this Agreement, the Convertible Term
A
Loan and the related PIK Loans do not involve a novation of the Convertible
Term
Loan and related PIK Loans (as defined in the Original Credit Agreement) or
a
new advance of funds by any Lender or any repayment or reissue by Borrower
of
the Convertible Term Loan or related PIK Loans (as such term was defined in
the
Original Credit Agreement).
(b) Borrower
has issued to each Convertible Term A Loan Lender a promissory note (each,
a
"Convertible Term A LoanNote"; collectively,
the "Convertible Term A LoanNotes") to
evidence such Convertible Term A Loan Lender's share of the Convertible Term
A
Loan. Such Convertible Term A Loan Note is in the principal amount of such
Convertible Term A Loan Lender's share of the Convertible Term A Loan, dated
as
of the Convertible Term A Loan Closing Date and substantially in the form of
Exhibit 1.1(4)(b). Each such Convertible Term A Loan Note
represents the obligation of Borrower to pay to such Convertible Term A Loan
Lender the amount of such Convertible Term A Loan Note, together with interest
thereon as prescribed in Section 1.4. Borrower acknowledges and agrees
that the aggregate principal amount stated to be outstanding set forth on each
Convertible Term A Loan Note or in the Loan Accounts shall, absent manifest
error, be presumptive evidence of the amounts due and owing to each applicable
Convertible Term A Loan Lender by Borrower; provided that any
failure to so
3
record
or
any error in so recording or to issue a Convertible Term A Loan Note shall
not
limit or otherwise affect Borrower's duty to pay the Obligations.
(c) Each
payment of principal with respect to the Convertible Term A Loan shall be paid
to Administrative Agent for the ratable benefit of each Convertible Term A
Loan
Lender, ratably in proportion to each such Convertible Term A Loan Lender's
Convertible Pro Rata Share of the Convertible Term A Loan.
(5) Convertible
Term B Loan.
(a) Subject
to the terms and conditions hereof, each Convertible Term B Loan Lender has
made
available to Borrower its share of the Convertible Term B Loan as set out on
Schedule 1.1(5)(a) and has made related PIK Loans. The Convertible Term B Loan
is a term loan and thus is not revolving. Any portion of the Convertible Term
B
Loan which is repaid by the Borrower may not be reborrowed. The entire unpaid
balance of the Convertible Term B Loan, the related PIK Loans and all other
non-contingent Obligations in connection therewith shall be immediately due
and
payable in full in immediately available funds on the Maturity Date. The parties
confirm that the Convertible Term B Loans and related PIK Loans are the same
Obligations as the Term Loans and related PIK Loans (as such terms were defined
in the Original Credit Agreement) which were held by what are now Convertible
Term B Loan Lenders and that this Agreement, the Convertible Term B Loans and
the related PIK Loans do not involve a novation of any Term Loans and related
PIK Loans (as defined in the Original Credit Agreement) or a new advance of
funds by any Lender or any repayment or reissue by Borrower of any Term Loans
or
related PIK Loans (as such term was defined in the Original Credit
Agreement).
(b) Borrower
has issued to each Convertible Term B Loan Lender a promissory note (each,
a
"Convertible Term B LoanNote"; collectively,
the "Convertible Term B LoanNotes") to
evidence such Convertible Term B Loan Lender's share of the Convertible Term
B
Loan. Such Convertible Term B Loan Note is in the principal amount of such
Convertible Term B Loan Lender's share of the Convertible Term B Loan, dated
as
of the Convertible Term B Loan Closing Date and substantially in the form of
Exhibit 1.1(5)(b). Each such Convertible Term B Loan Note
represents the obligation of Borrower to pay to such Convertible Term B Loan
Lender the amount of such Convertible Term B Loan Note, together with interest
thereon as prescribed in Section 1.4. Borrower acknowledges and agrees
that the aggregate principal amount stated to be outstanding set forth on each
Convertible Term B Loan Note or in the Loan Accounts shall, absent manifest
error, be presumptive evidence of the amounts due and owing to each applicable
Convertible Term B Loan Lender by Borrower; provided that any
failure to so record or any error in so recording or to issue a Convertible
Term
B Loan Note shall not limit or otherwise affect Borrower's duty to pay the
Obligations.
(c) Each
payment of principal with respect to the Convertible Term B Loan shall be paid
to Administrative Agent for the ratable benefit of each Convertible Term B
Loan
Lender, ratably in proportion to each such Convertible Term B Loan Lender's
Convertible Pro Rata Share of the Convertible Term B Loan.
(6) Convertible
Term C Loan.
(a) Subject
to the terms and conditions hereof, each Convertible Term C Loan Lender has
made
available to Borrower its share of the Convertible Term C Loan as set out on
Schedule 1.1(6)(a) and has made related PIK Loans. The Convertible Term C
Loan is a term loan and thus is not revolving. Any portion of the Convertible
Term C Loan which is repaid by the Borrower may not be reborrowed. The entire
unpaid balance of the Convertible Term C Loan, the related PIK Loans and all
other non-contingent Obligations in connection therewith shall be immediately
due and payable in full in immediately available
4
funds
on
the Maturity Date. The parties confirm that the Convertible Term C Loans and
related PIK Loans are the same Obligations as the Convertible Term Loan and
related PIK Loans (as such terms were defined in the Original Credit Agreement)
which were held by what are now Convertible Term C Loan Lenders and that this
Agreement, the Convertible Term C Loans and the related PIK Loans do not involve
a novation of any Convertible Term Loan and related PIK Loans (as defined in
the
Original Credit Agreement) or a new advance of funds by any Lender or any
repayment or reissue by Borrower of any Convertible Term Loan or related PIK
Loans (as such term was defined in the Original Credit Agreement).
(b) Borrower
has issued to each Convertible Term C Loan Lender a promissory note (each,
a
"Convertible Term C LoanNote"; collectively,
the "Convertible Term C LoanNotes") to
evidence such Convertible Term C Loan Lender's share of the Convertible Term
C
Loan. Such Convertible Term C Loan Note is in the principal amount of such
Convertible Term C Loan Lender's share of the Convertible Term C Loan, dated
as
of the Convertible Term C Loan Closing Date and substantially in the form of
Exhibit 1.1(6)(b). Each such Convertible Term C Loan Note
represents the obligation of Borrower to pay to such Convertible Term C Loan
Lender the amount of such Convertible Term C Loan Note, together with interest
thereon as prescribed in Section 1.4. Borrower acknowledges and agrees
that the aggregate principal amount stated to be outstanding set forth on each
Convertible Term C Loan Note or in the Loan Accounts shall, absent manifest
error, be presumptive evidence of the amounts due and owing to each applicable
Convertible Term C Loan Lender by Borrower; provided that any
failure to so record or any error in so recording or to issue a Convertible
Term
C Loan Note shall not limit or otherwise affect Borrower's duty to pay the
Obligations.
(c) Each
payment of principal with respect to the Convertible Term C Loan shall be paid
to Administrative Agent for the ratable benefit of each Convertible Term C
Loan
Lender, ratably in proportion to each such Convertible Term C Loan Lender's
Convertible Pro Rata Share of the Convertible Term C Loan.
(7) Optional
Conversion.
(a) Upon
and subject to applicable rules of the Exchange and Applicable Securities
Legislation and the terms hereof, each Convertible Term A Loan Lender shall
have
the right, at any time subsequent to December 31, 2007 but prior to 4:30 p.m.
(Toronto time) on the Maturity Date, to convert all or any
part of the principal amount of such Convertible Term A
Loan Lender's share of the Convertible Term A Loan, PIK Loans with respect
to
PIK Interest paid or payable on its Convertible Term A Loan and accrued and
unpaid interest thereon (each, a "Conversion A Amount") for
fully paid and non-assessable Common Shares. Notwithstanding the preceding
sentence, each Convertible Term A Loan Lender shall have the right to convert
all or any part of the principal
amount of such Convertible Term A Loan Lender's share of the Convertible Term
A
Loan, PIK Loans with respect to PIK Interest paid or payable on its Convertible
Term A Loan and accrued and unpaid interest thereon prior to December 31, 2007
in the event that an offer to acquire, whether by way of takeover bid, plan
of
arrangement, amalgamation or otherwise, is made for at least 50.1% of the Common
Shares.
(b) Upon
and subject to applicable rules of the Exchange and Applicable Securities
Legislation and the terms hereof
and
further upon
and subject to the
lifting or revocation of the
MCTOs, each Convertible Term B Loan Lender shall have the right, exercisable at
any time subsequent to the tenth day
following the lifting or revocation of the MCTOs, but prior to 4:30 p.m.
(Toronto time) on the Maturity Date, to convert all or any
part of the principal amount of such Convertible Term B
Loan Lender's share of the Convertible Term B Loan, PIK Loans with respect
to
PIK Interest paid or payable on its Convertible Term B Loan and accrued and
unpaid interest thereon (each, a "Conversion B Amount") for
fully paid and non-assessable Common Shares.
5
(c) Upon
and subject to applicable rules of the Exchange and Applicable Securities
Legislation and the terms hereof, each Convertible Term C Loan Lender shall
have
the right, at any time prior to 4:30 p.m. (Toronto time) on the Maturity Date,
to convert all or any part of the
principal amount of such Convertible Term C Loan Lender's share of the
Convertible Term C Loan, PIK Loans with respect to PIK Interest paid or payable
on its Convertible Term C Loan and accrued and unpaid interest thereon (each,
a
"Conversion C Amount") for fully paid and non-assessable Common
Shares.
(d) Each
Convertible Term A Loan Lender and Convertible Term C Loan Lender that has
not
exercised its conversion right shall be required to exercise its right of
conversion where otherwise permitted to do so hereunder and so directed in
writing by Convertible Term A Loan Lenders and/or Convertible Term C Loan
Lenders having more than seventy-five percent (75%) of the aggregate outstanding
principal amount of the Convertible Term A Loan and Convertible Term C Loan
and,
for greater certainty, at any time subsequent to December 31, 2007, upon such
direction being given, all Convertible Term A Loan Lenders and Convertible
Term
C Loan Lenders shall exercise their respective right of conversion.
(e) Each
Convertible Term Loan Lender that has not exercised its conversion right shall
be required to exercise its right of conversion where otherwise permitted to
do
so hereunder and so directed in writing by Convertible Term Loan Lenders having
more than seventy-five percent (75%) of the aggregate outstanding principal
amount of the Convertible Term Loans and, for greater certainty, at any time
subsequent to December 31, 2007, upon such direction being given, all
Convertible Term Loan Lenders shall exercise their respective right of
conversion.
(f) The
number of Common Shares into which a Conversion A Amount may be so exchanged
shall be determined by dividing the Conversion A Amount by the Conversion A
Price as at the Date of Conversion, subject to adjustment pursuant to Section
1.1(10).
(g) The
number of Common Shares into which a Conversion B Amount may be so exchanged
shall be determined by dividing the Conversion B Amount by the Conversion B/C
Price as at the Date of Conversion, subject to adjustment pursuant to Section
1.1(10).
(h) The
number of Common Shares into which a Conversion C Amount may be so exchanged
shall be determined by dividing the Conversion C Amount by the Conversion B/C
Price as at the Date of Conversion, subject to adjustment pursuant to Section
1.1(10).
(8) Delivery
of Certificates.
As
promptly as practicable after the Date of Conversion, Borrower shall issue
or
cause to be issued and deliver or cause to be delivered to the applicable
Convertible Term Loan Lender, or on its written order, a certificate or
certificates in the name or names of the Person or Persons specified in such
order for the number of Common Shares deliverable upon the conversion of the
applicable Conversion Amount and provision shall be made in respect of any
fraction of a share as provided in Section 1.1(11). Such conversion shall
be deemed to have been effected immediately prior to 4:30 p.m. (Toronto time)
on
the Date of Conversion and at such time the rights of such Convertible Term
Loan
Lender with respect to such Conversion Amount shall cease and the Person or
Persons in whose name or names any certificate or certificates for Common Shares
shall be deliverable upon such conversion shall be deemed to have become on
such
date the holder or holders of record of the Common Shares represented thereby;
provided, however, that no such conversion on any date on which
the transfer registers for Common Shares of Borrower shall be closed shall
be
effective to constitute the Person or Persons entitled to receive the Common
Shares upon such conversion as the holder or holders of record of such Common
Shares on such date, but such surrender shall be effective to constitute the
Person or Persons entitled to receive such
6
Common
Shares as the holder or holders of record thereof for all purposes on the next
succeeding date on which such transfer registers are open.
(9) Manner
of Exercise of Right to Convert.
(a) The
applicable Convertible Term Loan Lender converting its Conversion Amount into
Common Shares shall surrender its Convertible Notes (if any) to Borrower at
its
chief executive office indicated in Annex C together with a completed
Conversion Form or any other written notice in a form satisfactory to Borrower,
in either case duly executed by such Convertible Term Loan Lender, exercising
the right to convert such Conversion Amount or being required to convert such
Conversion Amount in accordance with the provisions hereof. If any of the Common
Shares into which such Conversion Amount is to be converted are to be issued
to
a Person or Persons other than the applicable Convertible Term Loan Lender
(e.g.
a nominee name), such Conversion Form or notice shall be in form and substance
satisfactory to Borrower and shall be accompanied by payment to Borrower of
any
transfer tax which may be payable by reason thereof. Upon the surrender of
such
Convertible Notes accompanied by such Conversion Form or notice (i) the
applicable Convertible Term Loan Lender shall be issued the number of Common
Shares which it shall be entitled to receive on such conversion, (ii) the
applicable Convertible Term Loan Lender releases Borrower of all liability
with
respect to the Conversion Amount which has been converted, and (iii) Borrower
agrees that the surrender of such Convertible Notes constitutes the sole
consideration for the Common Shares issuable upon such conversion. Subject
to
Section 1.1(9)(b), upon delivery of the requisite Conversion Form or
notice, such Convertible Term Loan Lender or, subject to payment of all
applicable stamp or security transfer taxes or other governmental charges and
compliance with all reasonable requirements of Borrower, the nominee(s) or
assignee(s) thereof, shall be entitled to be entered in the books of Borrower
as
at the Date of Conversion as the holder of the number of Common Shares into
which such Conversion Amount is convertible in accordance with the provisions
hereof and, as soon as practicable thereafter, Borrower shall deliver to such
Convertible Term Loan Lender or, subject as aforesaid, the nominee(s) or
assignee(s) thereof, a certificate or certificates for such Common Shares and
make or cause to be made any payment of dividends to which such Convertible
Term
Loan Lender is entitled in accordance with Section
1.1(9)(c).
(b) If
a Convertible Note is surrendered for conversion on a day on which the register
of Common Shares is closed, the Person or Persons entitled to receive Common
Shares shall become the holder or holders of record of such Common Shares as
at
the date on which such registers are next reopened.
(c) The
Common Shares issued upon a conversion shall be entitled to receive dividends
declared in favour of shareholders of record on and after the Date of Conversion
or such later date as such Person shall become the holder of record of such
Common Shares pursuant to Section 1.1(9)(b), from which applicable date
the Common Shares issued on conversion will for all purposes be and be deemed
to
be issued and outstanding as fully paid and non-assessable Common
Shares.
(10) Adjustment
of Conversion Price.
Each
Conversion Price in effect at any date shall be subject to adjustment from
time
to time as follows:
(a) If
and whenever at any time prior to the Maturity Date Borrower shall:
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|
(i)
|
subdivide
or redivide the outstanding Common Shares into a greater number of
shares;
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7
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(ii)
|
reduce,
combine or consolidate the outstanding Common Shares into a smaller
number
of shares; or
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(iii)
|
issue
Common Shares to the holders of all or substantially all of the
outstanding Common Shares by way of a stock
dividend,
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each
Conversion Price in effect on the effective date of such subdivision,
redivision, reduction, combination or consolidation or on the record date for
such issue of Common Shares by way of a stock dividend, as the case may be,
shall in the case of any of the events referred to in (i) and (iii) above be
decreased in proportion to the number of outstanding Common Shares resulting
from such subdivision, redivision or dividend, or shall, in the case of any
of
the events referred to in (ii) above, be increased in proportion to the number
of outstanding Common Shares resulting from such reduction, combination or
consolidation. Such adjustment shall be made successively whenever any event
referred to in this Section 1.1(10)(a) shall occur. Any such issue of
Common Shares by way of a stock dividend shall be deemed to have been made
on
the record date for the stock dividend for the purpose of calculating the number
of outstanding Common Shares under subsections (b) and (c) of this Section
1.1(10).
(b) If
and whenever at any time prior to the Maturity Date Borrower shall fix a record
date for the issuance of rights or warrants to any holders of its outstanding
Common Shares entitling them, for a period expiring not more than 45 days after
such record date, to subscribe for or purchase Common Shares (or securities
convertible into Common Shares) at a price per share (or having a conversion
or
exchange price per share) less than the Current Market Price of a Common Share
on such record date, each Conversion Price shall be adjusted immediately after
such record date so that it shall equal the price determined by multiplying
the
Conversion Price in effect on such record date by a fraction, of which the
numerator shall be the total number of Common Shares outstanding on such record
date plus a number of Common Shares equal to the number arrived at by dividing
the aggregate price of the total number of additional Common Shares offered
for
subscription or purchase (or the aggregate conversion or exchange price of
the
convertible securities so offered) by such Current Market Price per Common
Share, and of which the denominator shall be the total number of Common Shares
outstanding on such record date plus the total number of additional Common
Shares offered for subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustment shall be made
successively whenever such a record date is fixed. To the extent that any such
rights or warrants are not so issued or any such rights or warrants are not
exercised prior to the expiration thereof, each Conversion Price shall be
re-adjusted to the Conversion Price which would have been in effect if such
record date had not been fixed or to the Conversion Price which would have
been
in effect based upon the number of Common Shares (or securities convertible
into
Common Shares) actually issued upon the exercise of such rights or warrants,
as
the case may be.
(c) If
and whenever at any time prior to the Maturity Date Borrower shall fix a record
date for the making of a distribution to any holders of its outstanding Common
Shares of (i) shares of any class other than Common Shares or (ii) rights,
options or warrants (excluding rights, options or warrants entitling the holders
thereof for a period of not more than 45 days to subscribe for or purchase
Common Shares or securities convertible into Common Shares) or (iii) evidences
of its indebtedness or (iv) cash or other assets then, in each such case, each
Conversion Price shall be adjusted immediately after such record date so that
it
shall equal the price determined by multiplying the Conversion Price in effect
on such record date by a fraction, of which the numerator shall be the total
number of Common Shares outstanding on such record date multiplied by the
Current Market Price per Common Share on such record date, less the fair market
value (as determined by the Board of Directors with the approval of Requisite
Convertible Term Loan Lenders, which determination shall be conclusive) of
such
shares or rights, options or warrants or evidences or indebtedness or assets
so
distributed, and of which the denominator shall be the total number of Common
Shares outstanding on such record date multiplied by
8
such
Current Market Price per Common Share. Such adjustment shall be made
successively whenever such a record date is fixed. To the extent that such
distribution is not so made, each Conversion Price shall be re-adjusted to
the
Conversion Price which would have been in effect if such record date had not
been fixed or to the Conversion Price which would have been in effect based
upon
such shares or rights, options or warrants or evidences of indebtedness or
assets actually distributed, as the case may be.
(d) For
the purpose of any computation under subsections (b) or (c) of this Section
1.1(10), the current market price per Common Share at any date shall be the
weighted average price per share for Common Shares for the twenty (20)
consecutive Trading Days ending five (5) Trading Days before such date on the
Exchange (the "Current Market Price").
The weighted average price shall be determined by dividing the aggregate sale
price of all Common Shares sold on such Exchange during the said twenty (20)
consecutive Trading Days by the total number of Common Shares so
sold.
(e) In
the case of any reclassification or change (other than a change resulting only
from consolidation or subdivision) of the Common Shares or in case of any
amalgamation, consolidation or merger of Borrower with or into any other
corporation, or in the case of any sale of the properties and assets of
Borrower, as or substantially as, an entirety to any other corporation, each
Conversion Price and the Common Shares, as the case may be, shall be adjusted
so
that any Conversion Amount shall, after such reclassification, change,
amalgamation, consolidation, merger or sale, be convertible into the number
of
shares of Borrower, or such continuing, successor or purchaser corporation,
as
the case may be, which the applicable Convertible Term Loan Lender would have
been entitled to receive as a result of such reclassification, change,
amalgamation, consolidation, merger or sale if on the effective date thereof
it
had been the holder of the number of Common Shares into which the Conversion
Amount was convertible prior to the effective date of such reclassification,
change, amalgamation, consolidation, merger or sale. No such reclassification,
change, amalgamation, consolidation, merger or sale shall be carried into effect
unless (i) in the opinion of the Board of Directors, all necessary steps shall
have been taken to ensure that the Convertible Term Loan Lenders shall
thereafter be entitled to receive such number of shares of Borrower, or such
continuing, successor or purchasing corporation, as the case may be, subject
to
adjustment thereafter in accordance with provisions similar, as nearly as may
be, to those contained in this Section 1.1(10); and (ii) such shares
constitute prescribed securities for the purposes of clause
212(1)(b)(vii)(E) of the ITA.
(f) In
any case in which this Section 1.1(10) shall require that an adjustment
shall become effective immediately after a record date for an event referred
to
herein, Borrower may defer, until the occurrence of such event, issuing to
the
applicable Convertible Term Loan Lender converting after such record date and
before the occurrence of such event the additional Common Shares issuable upon
such conversion by reason of the adjustment required by such event before giving
effect to such adjustment; provided, however, that Borrower shall
deliver to such Convertible Term Loan Lender an appropriate instrument
evidencing such Convertible Term Loan Lender's right to receive such additional
Common Shares upon the occurrence of the event requiring such adjustment and
the
right to receive any distributions made on such additional Common Shares
declared in favour of holders of record of Common Shares on and after the Date
of Conversion or such later date as such Convertible Term Loan Lender would,
but
for the provisions of this Section 1.1(10)(f), have become the holder of
record of such additional Common Shares pursuant to Section
1.1(7).
(g) The
adjustments provided for in this Section 1.1(10) are cumulative, will be
computed to the nearest of one-tenth of one cent, and shall apply to successive
subdivisions, redivisions, reductions, combinations, consolidations,
distributions, issues or other events resulting in any adjustment under the
provisions of this Section; provided that, notwithstanding
any other provision of this Section, no adjustment of any Conversion
Price shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the Conversion Price then in effect;
provided however, that any
9
adjustments
which by reason of this Section 1.1(10)(g) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment.
(h) In
the event of any question arising with respect to the adjustments provided
in
this Section 1.1(10), such question shall be conclusively determined by a
firm of chartered accountants appointed by Borrower and acceptable to Requisite
Convertible Term Loan Lenders (who may be the auditors of Borrower); such
accountants shall have access to all necessary records of Borrower and such
determination shall be binding upon Borrower, Agents and Convertible Term Loan
Lenders, absent manifest error. If any such determination is made, Borrower
will
deliver an Officers' Certificate to each Convertible Term Loan Lender describing
such determination.
(i) In
case Borrower shall take any action affecting the Common Shares other than
action described in this Section 1.1(10), which in the opinion of the
Board of Directors would affect the rights of Convertible Term Loan Lenders,
each Conversion Price shall be adjusted in such manner and at such time, by
action of the Board of Directors, subject to the prior written consent of the
Exchange if necessary, as the Board of Directors in their sole discretion may
determine to be equitable in the circumstances. Failure of the Board of
Directors to make such an adjustment shall be conclusive evidence that the
Board
of Directors have determined that it is equitable to make no adjustment in
the
circumstances.
(j) No
adjustment in a Conversion Price shall be made in respect of any event described
in Section 1.1(10)(a), (b) and (c) if Convertible Term Loan
Lenders are entitled to participate in such event on the same terms mutatis
mutandis as if they had converted their Convertible Notes prior to the
effective date or record date, as the case may be, of such event and subject
to
the approval of the Exchange where such approval is required pursuant to the
TSX
Company Manual.
(k) Any
amendment or change to the Conversion A Price shall require the prior written
consent of all Convertible Term A Loan Lenders, except if such amendment or
change is related to an adjustment to the Conversion A Price made from time
to
time in accordance with Section 1.1(10).
(l) Any
amendment or change to the Conversion B/C Price shall require the prior written
consent of all Convertible Term B Loan Lenders and all Convertible Term C Loan
Lenders, except if such amendment or change is related to an adjustment to
the
Conversion B/C Price made from time to time in accordance with Section
1.1(10).
(11) No
Requirement to Issue Fractional Shares.
Borrower
shall not be required to issue fractional shares upon any conversion hereunder.
If more than one (1) Convertible Note shall be surrendered for conversion at
one
time by the same Convertible Term Loan Lender, the number of whole Common Shares
issuable upon conversion thereof shall be computed on the basis of the aggregate
principal amount of such notes to be converted. If any fractional interest
in a
Common Share would, except for the provisions of this Section, be
deliverable to any Convertible Term Loan Lender upon the conversion of any
Convertible Note, Borrower shall, if not prohibited by any agreement to which
it
is a party, in lieu of delivering any certificate representing such fractional
interest, make a cash payment to such Convertible Term Loan Lender in an amount
equal to the fractional interest multiplied by the applicable Conversion Price.
If prohibited from doing so, it will make such cash payment as soon as
reasonably practicable after such time as it is no longer
prohibited.
(12) Borrower
to Reserve Shares.
10
Borrower
covenants with Convertible Term Loan Lenders that it will at all times reserve
and keep available out of its authorized Common Shares, solely for the purpose
of issuance upon conversion of the Conversion Amounts and Convertible Notes
as
herein provided, and conditionally allot to Convertible Term Loan Lenders who
may exercise their conversion rights hereunder, such number of Common Shares
as
shall then be issuable upon the conversion of all outstanding Conversion Amounts
and Convertible Notes. Borrower covenants with Convertible Term Loan Lenders
that all Common Shares which shall be so issuable shall be duly and validly
issued as fully-paid and non-assessable shares.
(13) Taxes
and Charges on Conversion.
Borrower
will from time to time promptly pay or make provision satisfactory to
Convertible Term Loan Lenders for the payment of any and all Taxes and Charges
which shall be payable with respect to the issuance or delivery to Convertible
Term Loan Lenders, upon the exercise of their right to conversion, of Common
Shares of Borrower pursuant to the terms hereof.
(14) Cancellation
of Converted Convertible Notes.
All
Convertible Notes converted under the provisions hereunder shall be forthwith
delivered to and cancelled by Borrower, subject to the provisions of Section
1.1(8).
(15) Certificate
as to Adjustment.
Borrower
shall from time to time immediately after the occurrence of any event which
requires an adjustment or readjustment as provided in Section 1.1(10),
deliver an Officers' Certificate to each Convertible Term Loan Lender specifying
the nature of the event requiring the same and the amount of the adjustment
necessitated thereby and setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based, which
certificate and the amount of the adjustment specified therein shall be verified
by an opinion of a firm of chartered accountants appointed by Borrower and
acceptable to Requisite Convertible Term Loan Lenders (who may be the auditors
of Borrower) and, when approved by Requisite Convertible Term Loan Lenders,
shall be conclusive and binding on all parties in interest. When so approved,
Borrower shall forthwith give notice to Convertible Term Loan Lenders in the
manner provided in Section 11.10 specifying the event requiring such
adjustment or readjustment and the results thereof, including the resulting
Conversion Price.
(16) Notice
of Special Matters.
Borrower
covenants with Convertible Term Loan Lenders that so long as any Convertible
Note remains outstanding, it will give notice to Convertible Term Loan Lenders
in the manner provided in Section 11.10 of (i) the voluntary or
involuntary dissolution, liquidation or winding-up of Borrower to the extent
permitted hereunder or (ii) its intention to fix a record date for any event
referred to in Section 1.1(10) which may give rise to an adjustment in a
Conversion Price. Such notice shall specify the particulars of such event,
the
record date or the date the books of Borrower shall close and the effective
date
for such event; provided that Borrower shall only be required to
specify in such notice such particulars of such event as shall have been fixed
and determined on the date on which such notice is given. Such notice shall
be
given not less than fourteen (14) days in each case prior to such applicable
record date or the date on which Borrower's books are to be closed.
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1.2
|
Voluntary
Prepayments.
|
(a) Borrower
may at any time after the Closing Date on at least ten (10) days' prior written
notice to Administrative Agent voluntarily prepay:
11
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(i)
|
all or any part of the 2007 Loans pro rata on the basis of the outstanding principal amounts of the 2007 Loans at the time of prepayment (provided that any such prepayment must be in a minimum amount of at least US$1,000,000 and integral multiples of US$100,000); or |
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(ii)
|
if
the 2007 Loans have been repaid in full, all or any part of the Initial
Loans and the Convertible Term B Loan pro rata on the basis of the
outstanding principal amounts of the Initial Loans and Convertible
Term B
Loan at the time of prepayment (provided that any such
prepayment must be in a minimum amount of at least US$1,000,000 and
integral multiples of US$100,000);
or
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(iii)
|
if
the 2007 Loans, the Initial Loans and the Convertible Term B Loans
have
been repaid in full, all or any part of the Convertible Term A Loans
and
the Convertible Term C Loan pro rata on the basis of the outstanding
principal amounts of the Convertible Term A Loan and Convertible
Term C
Loan at the time of prepayment (provided that any such
prepayment must be in a minimum amount of at least US$1,000,000 and
integral multiples of US$100,000).
|
For
greater certainty:
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(A)
|
the
June 2007 Loans may not be prepaid in whole or in part without
a
commensurate pro rata prepayment of the Supplemental Loans and
the
Supplemental Loan may not be prepaid in whole or in part without
a
commensurate pro rata prepayment of the June 2007
Loan;
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(B)
|
the
Initial Loans may not be prepaid in whole or in part without
a
commensurate pro rata prepayment of the Convertible Term B Loan
and the
Convertible Term B Loan may not be prepaid in whole or in part
without a
commensurate pro rata prepayment of the Initial Loans;
and
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(C)
|
the
Convertible Term A Loan may not be prepaid in whole or in part
without a
commensurate pro rata prepayment of the Convertible Term C
Loan and the
Convertible Term C Loan may not be prepaid in whole or in part
without a
commensurate pro rata prepayment of the Convertible Term A
Loan.
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(b)Any
voluntary prepayment of the Loans shall be accompanied by accrued interest
to
the date of such prepayment on the amount prepaid (as determined by the Lenders
in their sole discretion). Any prepayment in full of the June 2007 Loans (which
must occur simultaneously with the voluntary prepayment in full of the
Supplemental Loans in accordance with paragraph (a)(i) above) shall be
accompanied by the June 2007 Loans Payout Fee. Any prepayment in full of the
Supplemental Loans (which must occur simultaneously with the voluntary
prepayment in full of the June 2007 Loans in accordance with paragraph
(a)(i) above) shall be accompanied by the Supplemental Loan Payout Fee. Any
prepayment in full of the Initial Loans (which must occur simultaneously with
the voluntary prepayment in full of the Convertible Term B Loan in accordance
with paragraph (a)(ii) above) shall be accompanied by the Initial Loans
Payout Fee. Any prepayment in full of the Convertible Term B Loan (which must
occur simultaneously with the voluntary prepayment in full of the Initial Loans
in accordance with paragraph (a)(ii) above) shall be accompanied by the
Initial Loans Payout Fee. Any prepayment in full of the Convertible Term A
Loan
(which must occur simultaneously with the voluntary prepayment in full of the
Convertible Term C Loan in accordance with paragraph (a)(iii) above)
shall be accompanied by the Convertible Term A Loan Payout Fee. Any prepayment
in full of the Convertible Term C Loan (which must occur simultaneously with
the
voluntary prepayment in full of the Convertible
12
Term
A
Loan in accordance with paragraph (a)(iii) above) shall be accompanied by
the Convertible Term C Loan Payout Fee.
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1.3
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Use
of Proceeds.
|
Borrower
shall utilize the proceeds of the 2007 Loans to fund working capital needs
of
the Borrower in the ordinary course of its business and to fund fees and
expenses in connection with this Agreement.
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1.4
|
Interest.
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(1) Cash
Pay Interest. From and after January 1, 2009, interest
("Cash Pay Interest") shall be payable monthly in arrears on
each Interest Payment Date by Borrower on the aggregate outstanding principal
balance of the Initial Loans, the June 2007 Loans, the Supplemental Loan and
the
Convertible Term Loans from time to time at a rate per annum equal to the Fixed
Cash Pay Interest Rate. Cash Pay Interest shall accrue daily and shall be paid
in cash to Administrative Agent.
(2) PIK
Interest. In addition to Cash Pay Interest as described in
Section 1.4(1), from the date hereof until the irrevocable payment
in
full of the Loans, additional interest ("PIK Interest") shall
be payable monthly in arrears on each Interest Payment Date by Borrower on
the
aggregate outstanding principal balance of such Loans from time to time as
follows:
(a) from
the Closing Date until December 31, 2008, at a rate per annum equal to the
Full
PIK Interest Rate; and
(b) from
and after January 1, 2009, at a rate per annum equal to the Partial PIK Interest
Rate.
(3) Payment
of PIK Interest. PIK Interest shall accrue daily and shall be paid
and satisfied as follows, at the option of the Borrower:
(a) by
Borrower in cash; or
(b) by
the amount of the PIK Interest payable on the applicable Interest Payment Date
being added to the principal amounts of the Loans, as applicable.
Each
addition of PIK Interest to the principal amount of a Loan shall be evidenced
by
the Administrative Agent updating the relevant Loan Accounts and shall become
a
"PIK Loan". At the written request of a Lender, Borrower shall
execute and deliver to the requesting Lender a promissory note in the amount
of
a PIK Loan owing to such Lender (each, a "PIK Note";
collectively, the "PIK Notes"), substantially in the form of
Exhibit 1.4(3) and on terms set out in Section
1.4(4).
(4) PIK
Notes. Each PIK Loan is a separate debt obligation.
Each PIK Note shall represent the obligation of Borrower to pay the amount
of
such PIK Loan or, if less, the aggregate unpaid amount of such PIK Loan owing
by
Borrower and evidenced thereby, together with interest thereon as prescribed
in
Section 1.4. Borrower acknowledges and agrees that the aggregate
principal amount stated to be outstanding set forth on the PIK Notes or in
the
Loan Accounts shall, absent manifest error, be presumptive evidence of the
amounts due and owing to Lenders by Borrower in respect of the PIK Loans;
provided that any failure to so record or any error in so
recording or to issue a PIK Note shall not limit or otherwise affect Borrower's
duty to pay the Obligations. The entire unpaid balance of the PIK Loans and
all
other non-contingent Obligations in connection therewith in each case related
and arising with respect to the Initial Loans shall be immediately due and
payable in full in immediately available funds on the
13
Maturity
Date. The entire unpaid balance of the PIK Loans and all other non-contingent
Obligations in connection therewith in each case related and arising with
respect to the June 2007 Loans shall be immediately due and payable in full
in
immediately available funds on the Maturity Date. The entire unpaid balance
of
the PIK Loans and all other non-contingent Obligations in connection therewith
in each case related and arising with respect to the Supplemental Loan shall
be
immediately due and payable in full in immediately available funds on the
Maturity Date. The entire unpaid balance of the PIK Loans and all other
non-contingent Obligations in connection therewith in each case related and
arising with respect to the Convertible Term Loans shall be immediately due
and
payable in full in immediately available funds on the Maturity Date. Each
payment of principal with respect to the PIK Notes or PIK Loans shall be paid
to
Administrative Agent for the ratable benefit of each applicable Lender. At
the
written request of a Convertible Term Loan Lender and for purposes of Section
1.1(10), Borrower shall promptly execute and deliver to such Convertible
Term Loan Lender a separate PIK Note (each, a "Convertible PIK
Note"; collectively, the "Convertible PIK Notes")
evidencing such Convertible Term Loan Lender's PIK Loans made in respect of
the
payment of PIK Interest on its share of the Convertible Term Loans and
Administrative Agent shall make such notations on the existing PIK Notes or
in
the Loan Accounts to evidence such issuance of a Convertible PIK Note in
accordance with Administrative Agent's customary accounting practices as in
effect from time to time.
(5) Extension
to Next Business Day. If any payment on any Loan becomes due and
payable on a day other than a Business Day, the maturity thereof will be
extended to the next succeeding Business Day and, with respect to payments
of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
(6) Calculations
on 360 Day Year. All computations of interest (calculated on a per
annum basis) shall be made by Administrative Agent on the basis of a three
hundred and sixty (360) day year for the actual number of days occurring in
the
period for which such interest is payable. Each determination by Administrative
Agent of an interest rate hereunder shall be conclusive, absent manifest
error.
(7) Interest
Upon Payment Default. Upon a default in the payment of interest or
any other amount due under this Agreement or any of the other Loan Documents
to
which Borrower is a party or satisfaction of such amounts by issuance of PIK
Notes, Borrower shall pay interest on such overdue amount, both before and
after
judgment, at a rate per annum equal to the applicable rate of interest payable
under this Section 1.4plus three percent (3%), calculated on a
daily basis from the date such amount becomes overdue for so long as such amount
remains overdue and on the basis of the actual number of days elapsed in a
360
day year. Such interest shall be payable by Borrower upon demand by
Administrative Agent and shall compound monthly. From and after the occurrence
of any Event of Default, all interest payable on the Loans shall be increased
by
three percent (3%) per annum over the interest otherwise applicable
hereunder.
(8) Criminal
Rates of Interest. If any provision of this Agreement or any of
the other Loan Documents would obligate Borrower to make any payment of interest
or other amount payable to any Agent or Lender in an amount or calculated at
a
rate which would be prohibited by law or would result in a receipt by such
Agent
or Lender of interest at a criminal rate (as such terms are construed under
the
Criminal Code (Canada)) then, notwithstanding such provision, such
amount or rate shall be deemed to have been adjusted with retroactive effect
to
the maximum amount or rate of interest, as the case may be, as would not be
so
prohibited by law or so result in a receipt by such Agent or Lender of interest
at a criminal rate, such adjustment to be effected, to the extent necessary,
as
follows: (1) firstly, by reducing the amount or rate of interest required to
be
paid to such Agent or Lender under this Section 1.4; and (2) thereafter,
by reducing any fees, commissions, premiums and other amounts required to be
paid to such Agent or Lender which would constitute interest for purposes of
Section 347 of the Criminal Code (Canada). Any amount or rate of
interest referred to in this Section 1.4(8) shall be determined
in
14
accordance
with generally accepted actuarial practices and principles as an effective
annual rate of interest over the term that any Loan remains outstanding on
the
assumption that any charges, fees or expenses that fall within the meaning
of
"interest" (as defined in the Criminal Code (Canada))
shall, if they relate to a specific period of time, be pro-rated over that
period of time and otherwise be pro-rated over the period from the Closing
Date
to the Termination Date and, in the event of a dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by such Agent or Lender
shall be conclusive for the purposes of such determination.
(9) Interest
Act. For purposes of disclosure pursuant to the Interest Act
(Canada), the annual rates of interest or fees to which
the rates of
interest or fees provided in this Agreement and the other Loan Documents (and
stated herein or therein, as applicable, to be computed on the basis of a 365
day year or any other period of time less than a calendar year) are equivalent
are the rates so determined multiplied by the actual number of days in the
applicable calendar year and divided by 365 or such other period of time,
respectively.
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1.5
|
Fees.
|
(1) Borrower
shall pay to Administrative Agent for the ratable benefit of the Initial Lenders
and the Convertible Term B Loan Lenders, on the Initial Loan Termination Date,
a
payout and completion fee (the "Initial LoanPayout
Fee") in the amount of, at the option of Requisite Convertible Term
B/Initial Lenders, (x) five percent (5%) of the Initial Loan Maximum Amount
(less the aggregate amount of Convertible Term B Loan converted to Common Shares
pursuant to Section 1.1(9)) payable by Borrower in cash or (y) two
percent (2%) of Distributable Value on such date payable by Borrower in kind
by
the issuance by Borrower of Indebtedness or equity based on the composition
of
Distributable Value on such date; provided that the Initial Loan
Payout Fee payable in paragraph (y) immediately above shall first be
promptly determined by Borrower and subject to the prior written approval of
Requisite Convertible Term B/Initial Lenders and then payment thereof made
to
Administrative Agent for the ratable benefit of Initial Lenders and Convertible
Term B Loan Lenders; provided further that, for greater
certainty, only Persons that are Initial Lenders and Convertible Term B Loan
Lenders on the Initial Loan Termination Date shall be entitled to their ratable
share of the Initial Loan Payout Fee;
(2) Borrower
shall pay to Administrative Agent for the ratable benefit of the June 2007
Lenders, on the June 2007 Loan Termination Date, a payout and completion fee
(the "June 2007LoanPayout
Fee") in the amount of five percent (5%) of the aggregate amount of the
June 2007 Loans made on the Closing Date; provided that only
Persons that are June ▇▇▇▇ ▇▇▇▇▇▇▇ on the June 2007 Loan Termination Date shall
be entitled to their June 2007 Loan Pro Rata Share of the June 2007 Loan Payout
Fee;
(3) Borrower
shall pay to Administrative Agent for the benefit of the Supplemental Lenders,
on the Supplemental Loan Termination Date, a payout and completion fee (the
"SupplementalLoanPayout Fee")
in the amount of five percent (5%) of the principal amount of the Supplemental
Loans made during the Supplemental Loan Commitment Period; provided
that only Persons that are Supplemental Lenders on the Supplemental
Loan Termination Date shall be entitled to the Supplemental Loan Payout
Fee;
(4) Borrower
shall pay to Administrative Agent for the ratable benefit of the Convertible
Term A Loan Lenders, on the Convertible Term A Loan Termination Date, a payout
and completion fee (the "Convertible Term A Loan Payout Fee")
in the amount of five percent (5%) of the aggregate amount of the Convertible
Term A Loan outstanding on the Closing Date less the aggregate amount of
Convertible Term A Loan converted to Common Shares pursuant to Section
1.1(9); provided that, for greater certainty, only persons that are
Convertible Term A Loan Lenders on the Convertible Term A Loan Termination
Date
shall be entitled to their Convertible Term A Loan Pro Rata Share of the
Convertible Term A Loan Payout Fee. For the avoidance of doubt, the Convertible
Term A Loan Payout Fee will not
15
be
payable to the Convertible Term A Loan Lenders in the event and to the extent
that they elect to convert their Convertible Term A Loan into Common Shares
pursuant to Section 1.1(5).
(5) Borrower
shall pay to Administrative Agent for the ratable benefit of the Convertible
Term C Loan Lenders, on the Convertible Term C Loan Termination Date, a payout
and completion fee (the "Convertible Term C Loan Payout Fee")
in the amount of five percent (5%) of the aggregate amount of the Convertible
Term C Loan outstanding on the Closing Date less the aggregate amount of
Convertible Term C Loan converted to Common Shares pursuant to Section
1.1(9); provided that, for greater certainty, only persons that are
Convertible Term C Loan Lenders on the Convertible Term C Loan Termination
Date
shall be entitled to their Convertible Term C Loan Pro Rata Share of the
Convertible Term C Loan Payout Fee. For the avoidance of doubt, the Convertible
Term C Loan Payout Fee will not be payable to the Convertible Term C Loan
Lenders in the event and to the extent that they elect to convert their
Convertible Term C Loan into Common Shares pursuant to Section
1.1(5).
(6) The
fees payable under Section 1.5(1), (2), (3), (4) and (5) shall be fully
earned on the date of required payment thereof and shall be non-refundable
when
paid.
|
1.6
|
Receipt
of Payments.
|
Borrower
shall make each payment under this Agreement for value not later than 2:00
p.m.
(Toronto time) on the day when due to the applicable Collection Account in
the
currency in which the Obligation is denominated. For the purpose of computing
interest as of any date, all payments shall be deemed received on the day
following the day of receipt of value for such payments in the applicable
Collection Account. For the purpose of computing Fees, all payments shall be
deemed received on the day of receipt of value for such payments in the
applicable Collection Account prior to 2:00 p.m. (Toronto time) and payments
received after 2:00 p.m. (Toronto time) on any Business Day shall be deemed
to
have been received on the following Business Day.
|
1.7
|
Application
and Allocation of Payments and
Proceeds.
|
(1) Borrower
hereby irrevocably waives the right to direct the application of any and all
payments received from or on behalf of Borrower and any proceeds of realization,
collection or disposition of Collateral in the possession of, or payable to,
any
Agent or Lender or their respective Related Parties, and Borrower and the
Lenders agree that Administrative Agent shall apply any and all such payments
and proceeds against Obligations then due and payable in the following
order:
(A)
to
each Agent's costs and expenses reimbursable hereunder;
(B)
to
principal payments on the 2007 Loans, ratably to the aggregate, combined
principal balance of the 2007 Loans;
(C)
to
interest on the 2007 Loans, ratably in proportion to the interest accrued as
to
each 2007 Loan;
(D)
to
Fees payable in respect of the 2007 Loans, ratably in proportion to the Fees
payable on each 2007 Loan;
(E)
to
principal payments on the Initial Loans and Convertible Term B Loan, ratably
to
the aggregate, combined principal balance of the Initial Loans and Convertible
Term B Loan;
16
(F)
to
interest on the Initial Loans and Convertible Term B Loan, ratably in proportion
to the interest accrued as to each Initial Loan and Convertible Term B
Loan;
(G)
to
Fees payable in respect of the Initial Loans and Convertible Term B Loan,
ratably in proportion to the Fees payable on each Initial Loan and Convertible
Term B Loan;
(H)
to
principal payments on the Convertible Term A Loan and Convertible Term C Loan,
ratably to the aggregate, combined principal balance of the Convertible Term
A
Loan and Convertible Term C Loan;
(I)
to
interest on the Convertible Term A Loan and Convertible Term C Loan, ratably
in
proportion to the interest accrued as to each Convertible Term A Loan and
Convertible Term C Loan;
(J)
to
Fees payable in respect of the Convertible Term A Loan and Convertible Term
C
Loan, ratably in proportion to the Fees payable on each Convertible Term A
Loan
and Convertible Term C Loan; and
(K)
to
all other Obligations.
Any
excess proceeds of such payments after application in accordance with the
immediately preceding sentence shall be provided to Borrower or applied as
Borrower may direct.
(2) Administrative
Agent is authorized to, and shall upon the instructions of Requisite Lenders,
charge to the applicable Loan balances on behalf of Borrower and cause to be
paid all Fees, expenses, Charges, costs (including insurance premiums in
accordance with Section 5.4(1)) and interest and principal owing by
Borrower under this Agreement or any of the other Loan Documents if and to
the
extent Borrower fails to pay any such amounts promptly as and when due. To
the
extent permitted by law, any charges so made shall constitute separate debt
obligations of Borrower that constitute part of the Loans hereunder but shall
be
payable by Borrower in accordance with the written instructions of Requisite
Lenders. Administrative Agent shall provide to Borrower
supporting documentation for such charges within thirty (30) days of Borrower's
written request therefor.
|
1.8
|
Loan
Accounts and Accounting.
|
Administrative
Agent shall maintain loan accounts (the "Loan Accounts") on its
books to record all Loans, all payments made by Borrower and all other debits
and credits processed by Administrative Agent or its Related Parties on its
behalf as provided in this Agreement with respect to the Loans or any other
Obligations. All entries in the Loan Accounts shall be made in accordance with
Administrative Agent's customary accounting practices as in effect from time
to
time. The balance in the Loan Accounts, as recorded on Administrative Agent's
most recent printout or other written statement, shall, absent manifest error,
be presumptive evidence of the amounts due and owing to Agents and Lenders
by
Borrower; provided that any failure to so record or any error in
so recording shall not limit or otherwise affect Borrower's duty to pay the
Loans or any other Obligations. Within a reasonable time following the end
of
each month, Administrative Agent shall render to Borrower an accounting of
transactions for the previous month with respect to the Loans and setting forth
the balance of the Loan Accounts. Unless Borrower notifies Administrative Agent
in writing of any objection to any such accounting (specifically describing
the
basis for such objection), within thirty (30) days after the date thereof,
each
and every such accounting shall, absent manifest error, be deemed final, binding
and conclusive upon Borrower in all respects as to all matters reflected
therein. Only those items expressly objected to in such notice shall be deemed
to be disputed by Borrower. Notwithstanding any provision herein contained
to
the contrary,
17
except
if
instructed otherwise by a Lender for its own account, Administrative Agent
may
elect (which election may be revoked) to dispense with the issuance of any
Notes
and may rely on the Loan Accounts as evidence of the amount of Obligations
from
time to time owing by Borrower to Agents and Lenders.
|
1.9
|
Indemnity.
|
Borrower
shall indemnify and hold harmless each of Agents, Lenders and their respective
Affiliates, and each such Person's respective Related Parties (each, an
"Indemnified Person"), from and against any and all suits,
actions, proceedings, claims, damages, losses, liabilities and expenses
(including reasonable legal fees, on a solicitor and client basis, and
disbursements and other costs of investigation or defence, including those
incurred upon any appeal) which may be instituted or asserted against or
incurred by any such Indemnified Person as the result of credit having been
extended, suspended or terminated under this Agreement and the other Loan
Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any
of the Loan Documents (collectively, "Indemnified
Liabilities"); provided that Borrower shall not be
liable for any indemnification to an Indemnified Person to the extent that
any
such suit, action, proceeding, claim, damage, loss, liability or expense results
from that Indemnified Person's gross negligence or wilful misconduct. NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY
LOAN
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON
OR
ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT
OF
CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT
OR
AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER.
|
1.10
|
Taxes.
|
(1) Except
as required by law, any and all payments by Borrower hereunder or under the
other Loan Documents shall be made, in accordance with this Section 1.10,
free and clear of and without deduction for any and all present or future Taxes.
If Borrower shall be required by law to deduct any Taxes from or in respect
of
any sum payable hereunder or under any other Loan Document, (i) the sum payable
shall be increased as much as shall be necessary so that after making all
required withholdings and deductions (excluding Taxes imposed on or
measured by the net income of a Lender by the jurisdictions under the laws
of
which it is organized or is resident or carries on business through a permanent
establishment located therein or any political subdivisions thereof but
including withholdings and deductions applicable to additional sums payable
under this Section 1.10) each Agent or Lender, as applicable, shall
receive an amount equal to the sum it would have received had no such
withholdings or deductions been made, (ii) Borrower shall make all required
withholdings and deductions, and (iii) Borrower shall pay the full amount
withheld or deducted to the relevant taxing or other authority in accordance
with applicable law. Within thirty (30) days after the date of any
payment of Taxes, Borrower shall furnish to Administrative Agent the original
or
a certified copy of a receipt evidencing payment thereof.
(2) In
addition, Borrower agrees to pay any present or future Taxes that arise from
any
payment made under this Agreement or under any other Loan Document or from
the
execution, sale, transfer, delivery or registration of, or otherwise with
respect to, this Agreement, the other Loan Documents and any other agreements
and instruments contemplated hereby or thereby (except for Taxes imposed
on or measured by the net income of a Lender by the jurisdictions under the
laws
of which it is organized or is
18
resident
or carries on business through a permanent establishment located therein or
any
political subdivisions thereof). Each Lender agrees that, as promptly as
reasonably practicable after it becomes aware of any circumstances referred
to
above which would result in additional payments under this Section
1.10(2), it shall notify Borrower thereof.
(3) Borrower
shall indemnify each Agent and Lender for the full amount of the Taxes referred
to in this Section 1.10 (except for Taxes imposed on or measured
by the net income of a Lender by the jurisdictions under the laws of which
it is
organized or is resident or carries on business through a permanent
establishment located therein or any political subdivisions thereof, other
than
any such Taxes imposed by any jurisdiction on amounts payable by Borrower under
this Section 1.10) paid or payable or alleged to be paid or payable by
such Agent or Lender and any liability (including for greater certainty all
penalties, interest and other amounts constituting Taxes and all legal,
accounting or other costs and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted. This
indemnification shall be made within ten (10) days after the date the party
seeking indemnification makes written demand therefor.
|
1.11
|
Capital
Adequacy; Increased Costs.
|
(1) If
a Lender shall have determined that any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy, reserve requirements or similar requirements or compliance by any
Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law),
in each case, adopted after the Initial Closing Date, from any central bank
or
other Governmental Authority increases or would have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by
such
Lender and thereby reducing the rate of return on such Lender's capital as
a
consequence of its obligations hereunder, then Borrower shall from time to
time
upon demand by such Lender (with a copy of such demand to Administrative Agent)
pay to such Lender additional amounts sufficient to compensate such Lender
for
such reduction. A certificate as to the amount of that reduction and showing
the
basis of the computation thereof submitted by such Lender to Borrower and
Administrative Agent shall, absent manifest error, be final, conclusive and
binding on Borrower for all purposes.
(2) If,
due to either (a) the introduction of or any change in any law or regulation
(or
any change in the interpretation thereof) or (b) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), in each case adopted after the Initial
Closing Date, there shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining any Loan, then Borrower shall from
time to time upon demand by such Lender (with a copy of such demand to
Administrative Agent) pay to such Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate as to the amount
of such increased cost submitted by such Lender to Borrower and Administrative
Agent shall, absent manifest error, be final, conclusive and binding on Borrower
for all purposes.
(3) Within
thirty (30) days after receipt by Borrower of written notice and demand from
any
Lender (an "Affected Lender") for payment of additional amounts
or increased costs as provided in Sections 1.10(1), 1.10(2),
1.11(1) or 1.11(2), Borrower may, at its option, notify
Administrative Agent and such Affected Lender of its intention to replace such
Affected Lender. So long as no Default or Event of Default has occurred and
is
continuing, Borrower, with the consent of Requisite Lenders, may obtain, at
Borrower's expense, a replacement Lender (a "Replacement
Lender") for such Affected Lender, which Replacement Lender must be
satisfactory to Requisite Lenders. If Borrower obtains a Replacement Lender
within ninety (90) days following notice of its intention to do so, such
Affected Lender must sell and assign its Loans and, if applicable, Supplemental
Loan Commitment, to such Replacement Lender for
19
an
amount
equal to the principal balance of all Loans held by such Affected Lender and
all
accrued interest and Fees with respect thereto through the date of such sale
and
assignment, such sale and assignment to be consummated pursuant to an executed
Assignment Agreement without the payment of an assignment fee to Administrative
Agent; provided that Borrower shall have reimbursed such
Affected Lender for the additional amounts or increased costs that it is
entitled to receive under this Agreement through the date of such sale and
assignment. Notwithstanding the foregoing, Borrower shall not have
the right to obtain a Replacement Lender if such Affected Lender rescinds its
demand for increased costs or additional amounts within fifteen (15) days
following its receipt of Borrower's notice of intention to replace such Affected
Lender. Furthermore, if Borrower gives a notice of intention to replace and
does
not so replace such Affected Lender within ninety (90) days thereafter,
Borrower's rights under this Section 1.11(3) shall terminate with respect
to such Affected Lender and Borrower shall promptly pay all increased costs
or
additional amounts demanded by such Affected Lender pursuant to Sections
1.10(1), 1.10(2), 1.11(1) and 1.11(2).
|
1.12
|
Secured
Loans.
|
All
Initial Loans to Borrower and all of the other Obligations in respect thereof
shall be secured, until the Initial Loan Termination Date, by all of the
Collateral. All June 2007 Loans to Borrower and all of the other Obligations
in
respect thereof shall be secured, until the June 2007 Loan Termination Date,
by
all of the Collateral. All Supplemental Loans to Borrower and all of the other
Obligations in respect thereof shall be secured, until the Supplemental Loan
Termination Date, by all of the Collateral. All Convertible Term A Loans to
Borrower and all of the other Obligations in respect thereof shall be secured,
until the Convertible Term A Loan Termination Date, by all of the Collateral.
All Convertible Term B Loans to Borrower and all of the other Obligations in
respect thereof shall be secured, until the Convertible Term B Loan Termination
Date, by all of the Collateral. All Convertible Term C Loans to Borrower and
all
of the other Obligations in respect thereof shall be secured, until the
Convertible Term C Loan Termination Date, by all of the Collateral.
|
1.13
|
Change
of Control.
|
(1) Borrower
shall promptly give notice of a change in Control to Administrative Agent and
each Lender. Such notice shall contain and constitute an offer to prepay the
Loans as described in Section 1.13(2) and shall be accompanied by the
certificate described in Section 1.13(4).
(2) The
offer to prepay the Loans contemplated by Section 1.13(1) shall be an
offer to prepay, in accordance with and subject to this Section, all, but
not less than all, the Loans on a date specified in such offer (the
"Proposed Payment Date") that is not less than thirty (30) days
and not more than sixty (60) days after the date of such offer (and if the
Proposed Payment Date shall not be specified in such offer, the Proposed Payment
Date shall be the day which is thirty (30) days after the date of such
offer).
(3) Requisite
Lenders may accept the offer to prepay pursuant to Section 1.13(1) by
causing a notice of such acceptance to be delivered by Administrative Agent
to
Borrower at least fifteen (15) days prior to the Proposed Payment Date. A
failure by Requisite Lenders to respond to an offer to prepay made pursuant
to
Section 1.13(1) shall be deemed to constitute a rejection of such offer
by Requisite Lenders.
(4) Each
offer to prepay the Loans pursuant to Section 1.13(1) shall be
accompanied by a certificate, executed by a senior officer of Borrower dated
the
date of such offer specifying (a) the Proposed Payment Date, (b) that such
offer
is made pursuant to Section 1.13(1), (c) the principal amount of the
Loans to be prepaid, (d) the accrued interest and Fees that would be due on
the
Loans (which shall include, for greater certainty, the Initial Loan Payout
Fee,
the June 2007 Loan Payout Fee, the Supplemental Loan Payout Fee, the Convertible
Term A Loan Payout Fee and the Convertible Term C Loan Payout Fee, in
each
20
case,
if
applicable) to be prepaid on the Proposed Payment Date, (e) that the conditions
of this Section have been fulfilled and (f) in reasonable detail the
nature and date of the change of Control.
SECTION
2
CONDITIONS
PRECEDENT
|
2.1
|
Conditions
to 2007 Loans.
|
The
effectiveness of this Agreement and the obligation of any Lender to make the
June 2007 Loans or to take, fulfill, or perform any other action hereunder
is
subject to the following conditions being satisfied or provided for in a manner
satisfactory to Requisite Lenders in their sole discretion, or waived in writing
by Requisite Lenders:
(1) Credit
Agreement; Loan Documents. This Agreement or counterparts hereof
shall have been duly executed by, and delivered to, Borrower, each Agent and
Lender; and Administrative Agent shall have received such documents,
certificates, instruments, agreements and legal opinions as Administrative
Agent
or Requisite Lenders shall request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, each in form and
substance satisfactory to Requisite Lenders, in their sole
discretion.
(2) Approvals. Requisite
Lenders shall have received satisfactory evidence that Borrower has obtained
all
required consents, permits and approvals of all Persons (including all requisite
Governmental Authorities) to the execution, delivery and performance of this
Agreement and the other Loan Documents.
(3) Payment
of Fees. Borrower shall have reimbursed Agents and
Lenders for all fees, costs and expenses of closing (including fees of legal
counsel) presented as of the Closing Date.
(4) Representations
and Warranties. All representations and warranties by Borrower and
its Subsidiaries contained herein or in any of the other Loan Documents shall
be
true and correct as of the Closing Date, except to the extent that such
representation or warranty expressly relates to an earlier date and except
for
changes therein expressly permitted or expressly contemplated by this
Agreement.
(5) No
Material Adverse Effect. No event or circumstance having a
Material Adverse Effect shall have occurred.
(6) No
Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing or would result after giving effect to any
Loan.
(7) Applicable
Securities Legislation. Borrower has complied with all of its
continuous disclosure and timely disclosure obligations pursuant to Applicable
Securities Legislation, except for filings of the Required Filings.
(8) Audit
Report. Borrower's auditors have indicated to the Borrower that
they will issue an unqualified audit opinion on
Borrower's
consolidated financial statements for Fiscal Year 2006.
The
request or acceptance by Borrower of the proceeds of any Loan shall be deemed
to
constitute, as of the date of such request or acceptance, (a) a representation
and warranty by Borrower that the conditions in this Section 2.1 have
been satisfied and (b) a reaffirmation by Borrower of the granting and
continuance of Collateral Agent's valid and perfected first priority Liens
pursuant to the Collateral Documents.
21
|
2.2
|
Conditions
to Supplemental Loan Draws.
|
The
obligation of any Supplemental Lender to make the Supplemental Loans is subject
to the following conditions being satisfied or provided for in a manner
satisfactory to the Supplemental Lenders in their sole discretion, or waived
in
writing by the Supplemental Lenders:
(1) Representations
and Warranties. All representations and warranties by Borrower and
its Subsidiaries contained herein or in any of the other Loan Documents shall
be
true and correct as of the requested draw date, except to the extent that such
representation or warranty expressly relates to an earlier date and except
for
changes therein expressly permitted or expressly contemplated by this
Agreement.
(2) No
Material Adverse Effect. No event or circumstance having a
Material Adverse Effect shall have occurred.
(3) No
Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing or would result after giving effect to any
requested Supplemental Loan.
(4) Draw
Request. The Borrower shall have delivered a Supplemental Loan
Draw Request in respect of the requested Supplemental Loan pursuant to
Section 1.1(3)(a).
(5) Liquidity.
The Borrower shall have delivered a certificate to the Administrative Agent
and
the Lenders certifying that, after receiving the proceeds of the requested
Supplemental Loan, the aggregate Cash and Cash Equivalents of the Borrower
and
its Subsidiaries, less Restricted Cash, will not exceed Cdn$5,000,000.
SECTION
3
REPRESENTATIONS
AND WARRANTIES
To
induce
Lenders to make each Advance and enter into the Loan Documents, Borrower makes
the following representations and warranties to Agents and Lenders on its own
behalf and on behalf of each of its Material Subsidiaries, each and all of
which
shall survive the execution and delivery of this Agreement.
|
3.1
|
Corporate
Existence; Compliance with
Law.
|
Borrower
and each of its Material Subsidiaries (1) is a corporation duly incorporated,
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation; (2) is duly qualified to conduct business and
is
in good standing in each other jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not result in exposure to losses,
damages or liabilities in excess of Cdn$50,000; (3) has the requisite corporate
power and authority and the legal right to own, pledge, mortgage, hypothecate
or
otherwise encumber and operate its properties and assets, to lease the property
and assets it operates under lease and to conduct its business as now,
heretofore and proposed to be conducted; (4) has all licenses, permits, consents
or approvals from or by, and has made all filings with, and has given all
notices to, all Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct except where the failure
to
possess, have made or given individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect; (5) is in compliance
with its constating documents and by-laws; and (6) is in compliance with all
applicable provisions of law, except where the
22
failure
to comply, individually or in the aggregate, could not reasonably be expected
to
have a Material Adverse Effect.
|
3.2
|
Executive
Offices; Locations of
Collateral.
|
As
of the
Closing Date, the current location of Borrower's and each of its Material
Subsidiaries' chief executive office and principal place of business is set
forth in Schedule 3.2 and the Disclosure Letters, and none of such
locations has changed within the twelve (12) months preceding the Closing Date.
As of the Closing Date, Schedule 3.2 and the Disclosure Letters set forth
all locations where Collateral is held, stored or located and the locations
of
all of Borrower's books and records concerning the Collateral.
|
3.3
|
Corporate
Power, Authorization, Enforceable
Obligations.
|
The
execution, delivery and performance by Borrower and each of its Material
Subsidiaries of the Loan Documents (to which it is a party) and the creation
of
all Liens provided for therein: (1) are within its corporate power; (2) have
been duly authorized by all necessary or proper corporate and shareholder
action; (3) do not contravene any provision of its constating documents or
bylaws; (4) do not violate any law or regulation, or any order or decree of
any
court or Governmental Authority; (5) do not conflict with or result in the
breach or termination of, constitute a default under or accelerate or permit
the
acceleration of any performance required by, any indenture, mortgage, deed
of
trust, lease, agreement or other instrument to which it is a party or by which
it or any of its property or assets is bound; (6) do not result in the creation
or imposition of any Lien upon any of its property or assets other than those
in
favour of Collateral Agent, on behalf of Agents and Lenders, pursuant to the
Loan Documents; and (7) do not require the consent or approval of, filing with,
or notice to, any Governmental Authority or any other Person, except those
which
will have been duly obtained, made or complied with prior to the Closing Date.
Each of the Loan Documents has been duly executed and delivered by Borrower
and
each of its Material Subsidiaries, to the extent a party thereto, and each
such
Loan Document constitutes a legal, valid and binding obligation of Borrower
and
each of its Material Subsidiaries, to the extent a party thereto, enforceable
against it in accordance with its terms.
|
3.4
|
Financial
Statements.
|
The
unaudited consolidated balance sheet at March 31, 2007 and the related
consolidated statements of income and cash flows of Borrower and its
Subsidiaries for the fiscal period then ended, which are attached hereto as
Schedule 3.4(1), have been prepared in accordance with GAAP consistently
applied throughout the periods covered and present fairly in all material
respects the financial position of Borrower and its Subsidiaries covered thereby
as at the dates thereof and the results of their operations and cash flows
for
the periods then ended.
|
3.5
|
Material
Adverse Effect.
|
Except
as
set out in the Disclosure Letters, between March 31,
2007 and the Closing Date, (1) Borrower and its Material
Subsidiaries have not incurred any obligations, contingent or non-contingent
liabilities, liabilities for Charges, long-term leases or unusual forward or
long-term commitments which have not been disclosed in writing to Administrative
Agent and which, alone or in the aggregate, could reasonably be expected to
have
a Material Adverse Effect, (2) no contract, lease or other agreement or
instrument has been entered into by Borrower or its Material Subsidiaries or
has
become binding upon Borrower's or its Material Subsidiaries' property, assets
or
undertaking and no law or regulation applicable to Borrower or its Material
Subsidiaries has been adopted which has had or could reasonably be expected
to
have a Material Adverse Effect, and (3) Borrower and its Material Subsidiaries
are not in
23
default
and to the best of Borrower's knowledge, no third party is in default under
any
material contract, lease or other agreement or instrument which alone or in
the
aggregate could reasonably be expected to have a Material Adverse Effect. Except
as set out in the Disclosure Letters, between March 31, 2007 and the Closing
Date, no event has occurred, which alone or together with other events, could
reasonably be expected to have a Material Adverse Effect.
|
3.6
|
Ownership
of Property; Liens.
|
As
of the
Closing Date, the real estate and/or immovable properties ("Real
Estate") listed in Schedule 3.6 and the Disclosure Letters
constitutes all of the real property owned, leased, subleased, or used by
Borrower and its Material Subsidiaries. Borrower and each of its Material
Subsidiaries owns good and marketable fee simple title to all of its owned
Real
Estate, subject only to Permitted Encumbrances listed in Schedule 3.6 and
the Disclosure Letters, and valid and marketable leasehold interests in all
of
its leased Real Estate, all as described in Schedule 3.6 and the
Disclosure Letters, and copies of all such leases or a summary of terms thereof
satisfactory to Requisite Lenders have been delivered to Administrative Agent.
Schedule 3.6 and the Disclosure Letters further describe any Real Estate
with respect to which Borrower and its Material Subsidiaries are a lessor,
sublessor or assignor as of the Closing Date. Borrower and its Material
Subsidiaries also have good and marketable title to, or valid leasehold
interests in, all of its personal properties and assets. None of the properties
and assets of Borrower and its Material Subsidiaries are subject to any Liens
other than Permitted Encumbrances or Liens summarized in Schedules 3.6
and 6.7 and the Disclosure Letters, and there are no facts, circumstances
or conditions known to Borrower that may result in any Liens (including Liens
arising under Environmental Laws) other than Permitted Encumbrances. Borrower
and each of its Material Subsidiaries have received all deeds, assignments,
waivers, consents, non-disturbance and recognition or similar agreements, bills
of sale and other documents, and have duly effected all recordings, filings
and
other actions necessary to establish, protect and perfect Borrower's and each
of
its Material Subsidiaries' right, title and interest in and to all such Real
Estate and other properties and assets. Schedule 3.6 and the Disclosure
Letters also describe any purchase options, rights of first refusal or other
similar contractual rights pertaining to any Real Estate. No portion of
Borrower's or its Material Subsidiaries' Real Estate has suffered any material
damage by fire or other casualty loss which has not heretofore been repaired
and
restored in all material respects to its original condition or otherwise
remedied. All material permits required to have been issued or appropriate
to
enable the Real Estate to be lawfully occupied and used for all of the purposes
for which they are currently occupied and used have been lawfully issued and
are
in full force and effect. Borrower has not received notice of, nor is any work
order or other notice pending, from any Governmental Authority advising or
indicating that the Mortgaged Properties are not in compliance with applicable
law or regulations and, to Borrower's knowledge, there exists no proposed zoning
changes or amendments or modifications to any zoning by-laws that may affect
the
Mortgaged Properties and subject Borrower to a loss, penalty or fine in excess
of Cdn$50,000. The Liens granted to Collateral Agent, on behalf of Agents and
Lenders, pursuant to the Collateral Documents are valid and perfected first
priority Liens in and to the Collateral described therein, subject only to
Permitted Encumbrances.
|
3.7
|
Labour
Matters.
|
(1)
No
strikes or other material labour disputes against Borrower or its Material
Subsidiaries is pending or, to Borrower's knowledge, threatened; (2) hours
worked by and payment made to employees of Borrower and its Material
Subsidiaries comply in all material respects with each federal, provincial,
local or foreign law applicable to such matters; (3) all payments due from
Borrower and its Material Subsidiaries for employee health and welfare insurance
have been paid or accrued as a liability on the books of Borrower and its
Material Subsidiaries; (4) except as set forth in Schedule 3.7 and the
Disclosure Letters as of the Closing Date, Borrower and its Material
Subsidiaries are not a party to or bound by any
24
collective
bargaining agreement, management agreement, consulting agreement or any
employment agreement (and true and complete copies of any agreements described
on Schedule 3.7 and the Disclosure Letters have been delivered to
Administrative Agent); (5) there is no organizing activity involving Borrower
and its Material Subsidiaries pending or, to Borrower's knowledge, threatened
by
any labour union or group of employees; (6) there are no certification
applications pending or, to Borrower's knowledge, threatened with any labour
relations board, and no labour organization or group of employees of Borrower
and its Material Subsidiaries has made a pending demand for recognition; and
(7)
except as set forth in Schedule 3.7 and the Disclosure Letters as of the
Closing Date, there are no complaints or charges against Borrower and its
Material Subsidiaries pending or, to the knowledge of Borrower, threatened
to be
filed with any Governmental Authority or arbitrator based on, arising out of,
in
connection with, or otherwise relating to the employment or termination of
employment by Borrower or its Material Subsidiaries of any
individual.
|
3.8
|
Ventures,
Subsidiaries and Affiliates; Outstanding Stock and Indebtedness;
Corporate
Structure.
|
Except
as
set forth in Schedule 3.8 and the Disclosure Letters as of the Closing
Date, Borrower has no Subsidiaries and Borrower and its Subsidiaries are not
engaged in any joint venture or partnership with any other Person. All of the
issued and outstanding Stock (by class and number) of the members of SR Group
(other than Borrower) is owned by each of the Persons and in the amounts or
percentages set forth on Schedule 3.8 and the Disclosure Letters and on
the corporate structure chart attached as part of Schedule 3.8 and the
Disclosure Letters as of the Closing Date and the corporate structure of SR
Group is accurately set forth on Schedule 3.8 and the Disclosure Letters
as of the Closing Date and all of such Stock is represented by the certificates
listed on Schedule 3.8 and the Disclosure Letters. Except as set forth on
Schedule 3.8 and the Disclosure Letters as of the Closing Date, there are
no outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which Borrower or any of its Material Subsidiaries may
be
required to issue, sell, repurchase or redeem any of its Stock or other equity
securities. All outstanding Indebtedness of Borrower and its Material
Subsidiaries as of the Closing Date is described in Section 6.3 and the
Disclosure Letters. As of the Closing Date, the Subsidiaries of Borrower that
are Material Subsidiaries are set forth on Schedule 3.8 and the
Disclosure Letters.
|
3.9
|
Government
Regulation.
|
Borrower
and its Material Subsidiaries are not subject to regulation under any Canadian
federal law, or any provincial, local or foreign law that restricts or limits
their ability to incur Indebtedness or to perform their respective obligations
hereunder or under the other Loan Documents. The making of the Loans by Lenders
to Borrower, the application of the proceeds thereof and repayment thereof
will
not violate any provision of any statute or any rule, regulation or order issued
by or policy of any securities regulatory authority or stock
exchange.
|
3.10
|
Taxes.
|
All
tax
returns, reports and statements, including information returns, required by
any
Governmental Authority to be filed by Borrower or its Material Subsidiaries
has
been filed with the appropriate Governmental Authority and all Charges have
been
paid prior to the date on which any fine, penalty, interest or late charge
may
be added thereto for nonpayment thereof (or any such fine, penalty, interest,
late charge or loss has been paid), excluding Charges or other amounts being
contested in accordance with Section 5.2(2). Proper and accurate amounts
have been withheld by Borrower and its Material Subsidiaries from payments
to
its employees, customers and other applicable payees (including payees resident
and not resident in Canada for the purposes of the ITA) for all periods in
full
as required by all applicable Canadian federal law and all applicable
provincial, local and foreign law and such
25
withholdings
have been timely paid to the respective Governmental Authorities. Schedule
3.10 and the Disclosure Letters set forth as of the Closing Date in respect
of Borrower and its Material Subsidiaries (i) those taxation years that have
not
yet been assessed by any applicable federal, provincial, local or foreign
Governmental Authority, (ii) the taxation years that are currently being audited
by any federal, provincial, local or foreign Governmental Authority, (iii)
any
assessments or, to Borrower's knowledge, threatened assessments in connection
with such audit, or otherwise currently outstanding, and (iv) the most recent
taxation year that an audit by any applicable federal, provincial, local or
foreign Governmental Authority has been completed. Except as described on
Schedule 3.10 and the Disclosure Letters as of the Closing Date, Borrower
and its Material Subsidiaries have not executed or filed with any Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Charges. As of the
Closing Date, except as set forth on Schedule 3.10 and the Disclosure
Letters, Borrower and its Material Subsidiaries and their respective
predecessors are not liable for any Charges (a) under any agreement (including
any tax sharing agreements) or (b) to Borrower's knowledge, as a
transferee.
|
3.11
|
Canadian
Pension and Benefit Plans; Subsidiary Pension
Plans.
|
Schedule
3.11 and the Disclosure Letters list as of the Closing Date all Canadian
Benefit Plans and Canadian Pension Plans adopted or maintained by Borrower
or
any of its Material Subsidiaries and other similar benefit or pension plans
adopted and maintained by the members of SR Group (the "SR Group Pension
Plans"). The Canadian Pension Plans are duly registered under the ITA
and all other applicable laws which require registration and no event has
occurred which is reasonably likely to cause the loss of such registered status.
All material obligations of Borrower and its Material Subsidiaries (including
fiduciary, funding, investment and administration obligations) required to
be
performed in connection with the Canadian Pension Plans, Canadian Benefit Plans
and the SR Group Pension Plans and the funding agreements therefor have been
performed in a timely fashion. There have been no improper withdrawals or
applications of the assets of the Canadian Pension Plans, the Canadian Benefit
Plans or the SR Group Pension Plans. There are no outstanding disputes
concerning the assets of the Canadian Pension Plans, the Canadian Benefit Plans
or the SR Group Pension Plans. Except as set forth on Schedule 3.11 and
the Disclosure Letters as of the Closing Date, each of the Canadian Pension
Plans, Canadian Benefit Plans and the SR Group Pension Plans is fully funded
on
a solvency basis (using actuarial methods and assumptions which are consistent
with the valuations last filed with the applicable Governmental Authorities
and
which are consistent with generally accepted actuarial principles).
|
3.12
|
Litigation.
|
Except
as
set forth on Schedule 3.12 and the Disclosure Letters, no action, claim,
lawsuit, demand, investigation or proceeding is now pending or, to the knowledge
of Borrower, threatened against Borrower or any of its Material Subsidiaries,
before any Governmental Authority or before any arbitrator or panel of
arbitrators (collectively, "Litigation"), (1) which challenges
Borrower's or any of its Material Subsidiaries' right or power to enter into
or
perform any of its obligations under the Loan Documents to which it is a party
or the validity or enforceability of any Loan Document or any action taken
thereunder, (2) which has a reasonable risk of being determined adversely to
Borrower or its Material Subsidiaries and which, if so determined, could
reasonably be expected to have a Material Adverse Effect or (3) seeks injunctive
relief or alleges criminal misconduct of Borrower or its Material
Subsidiaries.
|
3.13
|
Brokers.
|
Other
than Genuity Capital Markets, no broker or finder acting on behalf of Borrower
or any of its Material Subsidiaries brought about the obtaining, making or
closing of the Loans, and Borrower and
26
each
of
its Material Subsidiaries does not have any obligation to any Person in respect
of any finder's or brokerage fees in connection therewith.
|
3.14
|
Intellectual
Property.
|
As
of the
Closing Date, Borrower and each of its Material Subsidiaries owns or has rights
to use all Intellectual Property necessary to continue to conduct its business
as now or heretofore conducted by it or proposed to be conducted by it, and
each
Patent, Trademark, Copyright and License is listed, together with application
or
registration numbers, as applicable, in Schedule 3.14 and the Disclosure
Letters; provided that the parties acknowledge and agree
that, with respect to Copyrights and Licenses, Schedule 3.14 and the
Disclosure Letters contain a list of only those Copyrights and Licenses which,
if Borrower or its Material Subsidiaries were not the owners thereof or had
no
rights to use same, could reasonably be expected to have a Material Adverse
Effect. Borrower and each of its Material Subsidiaries conducts its business
and
affairs without infringement of or interference with any Intellectual Property
of any other Person.
|
3.15
|
Full
Disclosure.
|
No
information contained in this Agreement, any of the other Loan Documents, any
Operating Plan, Financial Statements, Budget or other reports from time to
time
delivered hereunder or any written statement furnished by or on behalf of
Borrower or its Material Subsidiaries to any Agent or any Lender pursuant to
the
terms of this Agreement or any other Loan Document contains any untrue statement
or misrepresentation of a Material Fact or omits to state a Material Fact
necessary to make the statements contained herein or therein not misleading
in
light of the circumstances under which they were made; provided
that the Operating Plans and each Budget are based upon estimates
and
assumptions stated therein, all of which Borrower believes to be reasonable
and
fair in light of current conditions and current facts known to Borrower and
reflect Borrower's good faith and reasonable estimates of the future financial
performance of Borrower and its Subsidiaries and of the other information
contained therein for the period set forth therein.
|
3.16
|
Environmental
Matters.
|
(1) Except
as set forth in Schedule 3.16 and the
Disclosure
Letters, as of the Closing Date: (a) the Real Estate is free of
contamination from any Hazardous Material except for such contamination that
would not adversely impact the value or marketability of such Real Estate and
which would not result in Environmental Liabilities which could reasonably
be
expected to exceed Cdn$250,000; (b) Borrower and its Material Subsidiaries
have
not caused or suffered to occur any Release of Hazardous Materials on, at,
in,
under, above, to, from or about any of its Real Estate; (c) Borrower and each
of
its Material Subsidiaries is and has been in compliance with all Environmental
Laws, except for such noncompliance which would not result in Environmental
Liabilities which could reasonably be expected to exceed Cdn$250,000; (d)
Borrower and each of its Material Subsidiaries has obtained, and is in
compliance with, all Environmental Permits required by Environmental Laws for
the operations of its business as presently conducted or as proposed to be
conducted, except where the failure to so obtain or comply with such
Environmental Permits would not result in Environmental Liabilities which could
reasonably be expected to exceed Cdn$250,000, and all such Environmental Permits
are valid, uncontested and in good standing; (e) Borrower and each of its
Material Subsidiaries is not involved in operations or knows of any facts,
circumstances or conditions, including any Releases of Hazardous Materials,
that
are likely to result in any Environmental Liabilities of Borrower and each
of
its Material Subsidiaries which could reasonably be expected to exceed
Cdn$250,000, and Borrower and each of its Material Subsidiaries has not
permitted any current or former tenant or occupant of the Real Estate to engage
in any such operations; (f) there is no Litigation arising under or related
to
any Environmental Laws, Environmental Permits or Hazardous
27
Material
which seeks damages, penalties, fines, costs or expenses in excess of Cdn$25,000
or injunctive relief, or which alleges criminal misconduct by Borrower or its
Material Subsidiaries; (g) no notice has been received by Borrower or its
Material Subsidiaries identifying it as a "potentially responsible party" or
requesting information under any Environmental Law, and to the knowledge of
Borrower, there are no facts, circumstances or conditions that may result in
Borrower or its Material Subsidiaries being identified as a "potentially
responsible party" under any Environmental Law; and (h) Borrower has provided
to
Administrative Agent copies of all existing environmental reports, reviews
and
audits and all written information pertaining to actual or potential
Environmental Liabilities, in each case relating to Borrower and its Material
Subsidiaries.
(2) Borrower
hereby acknowledges and agrees that each Agent and Lender is not and has not
ever been prior to the Closing Date, in control of any of the Real Estate or
Borrower's or any of its Material Subsidiaries' affairs.
|
3.17
|
Insurance.
|
Schedule
3.17 and the Disclosure Letters list all insurance policies of any nature
maintained, as of the Closing Date, for current occurrences by Borrower and
its
Material Subsidiaries, as well as a summary of the terms of each such
policy.
|
3.18
|
Deposit
and Disbursement Accounts.
|
Schedule
3.18 and the Disclosure Letters list all banks and other financial
institutions at which Borrower and each of its Material Subsidiaries maintains
deposits and/or other accounts as of the Closing Date, including any
Disbursement Accounts and Borrower Accounts, and such Schedule correctly
identifies the name, address and telephone number of each such bank and
financial institution, the name in which the account is held, a description
of
the purpose of the account, and the complete account number.
|
3.19
|
Customer
and Trade Relations.
|
As
of the
Closing Date, there exists no actual or, to Borrower's knowledge, threatened
termination or cancellation of, or any material adverse modification or change
in: (1) the business relationship of Borrower or its Material Subsidiaries
with
any customer or group of customers whose purchases during the preceding twelve
(12) months caused them to be ranked among the ten largest customers of Borrower
or its Material Subsidiaries, or (2) the business relationship of Borrower
or
its Material Subsidiaries with any supplier material to their respective
operations.
|
3.20
|
Agreements
and Other Documents.
|
As
of the
Closing Date, Borrower has provided to Administrative Agent or its counsel
accurate and complete copies (or detailed summaries or other particulars) of
all
of the following agreements or documents to which it or any of its Material
Subsidiaries are subject and each of which are listed in Schedule 3.20
and the Disclosure Letters: (1) supply agreements and purchase agreements not
terminable by Borrower or its Material Subsidiaries within sixty (60) days
following written notice issued by Borrower or its Material Subsidiaries and
involving transactions in excess of Cdn$500,000 per annum; (2) any lease of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of Cdn$100,000 per annum; (3) licenses
and
permits held by Borrower or its Material Subsidiaries, the absence of which
could reasonably be expected to have a Material Adverse Effect; (4) instruments
or documents evidencing Indebtedness of Borrower or its Material Subsidiaries
and any Lien granted by Borrower or its Material Subsidiaries with respect
thereto; and (5) instruments
28
and
agreements evidencing the issuance of any Stock (including Common Shares),
warrants, rights or options to purchase Stock of Borrower or its Material
Subsidiaries.
|
3.21
|
Subordinated
Debt.
|
As
of the
Closing Date, the Indebtedness listed on Schedule 3.21 and the Disclosure
Letters constitutes all of the Subordinated Debt.
|
3.22
|
Filings.
|
Borrower
has made all requisite filings under Applicable Securities Legislation and
the
rules of the Exchange (including to report the issue of the Convertible Notes
and the Common Shares issuable under the Convertible Notes and the exercise
of
the right to acquire Common Shares pursuant to the Convertible Notes), except
the Required Filings and except as otherwise previously disclosed to the
Lenders.
|
3.23
|
Reporting
Issuer Status.
|
Borrower
is a reporting issuer, or the equivalent thereof in the provinces of Canada
where it is, as of the date hereof, a reporting issuer, not in default of the
requirements of Applicable Securities Legislation in Canada, except with respect
to the Required Filings and except as otherwise disclosed to the Lenders, and
is
a registrant under the United States Securities Exchange Act of 1934,
as amended, until such time as it deregisters with the consent of Requisite
Convertible Term Loan Lenders and, for so long as it remains registered in
the
United States, will not be in default of the requirements of Applicable
Securities Legislation in the United States, except with respect to the Required
Filings and as otherwise disclosed in the Disclosure Letters.
|
3.24
|
Defaulting
Issuer and Registrant.
|
After
giving effect to the Required Filings, Borrower will not be included on a list
of defaulting issuers maintained by the OSC or in default of its disclosure
obligations under Title III of the Securities Act (Quebec), and will
ensure that, after the date hereof, it is not so included on such list of
defaulting issuer or in default of such disclosure obligations. Borrower is
a
registrant under the United States Securities Exchange Act of 1934, as
amended, and will continue to ensure that it is a registrant until such time
as
it deregisters with the consent of the Requisite Convertible Term Loan
Lenders.
|
3.25
|
Listing.
|
The
Common Shares are listed and posted for trading on the Exchange.
|
3.26
|
Issued
and Outstanding Capital.
|
The
authorized capital of Borrower consists of an unlimited number of Common Shares
and an unlimited number of preferred shares, of which 746,574,711 Common Shares
are issued and outstanding as of the date hereof and no preferred shares are
issued and outstanding.
|
3.27
|
Options.
|
No
person
has any agreement, option, right or privilege with or against Borrower for
the
purchase, subscription or issuance of securities, issued or unissued of
Borrower, other than as disclosed in
29
the
Filed
Securities Documents and pursuant to Borrower's employee, director or officer
stock option or stock compensation plans as same may be amended or replaced
from
time to time.
|
3.28
|
Filed
Securities Documents.
|
Each
of
the Filed Securities Documents at the time of filing, (i) was true and correct
in all material respects, (ii) contained no Misrepresentation and (iii) to
the
extent required to be disclosed under Applicable Securities Legislation,
disclosed all Material Facts and Material Changes (actual, anticipated,
contemplated or threatened, whether financial or otherwise) relating to the
business, affairs, operations, assets, liabilities (contingent or otherwise)
or
capital of Borrower and its Subsidiaries considered as a whole.
|
3.29
|
Material
Facts.
|
No
Material Fact or Material Change has been omitted at the time of filing from
the
Filed Securities Documents that is required under Applicable Securities
Legislation to be stated therein or is necessary to make the statements therein
not misleading in the light of the circumstances in which they were
made.
|
3.30
|
Confidential
Material Change Reports.
|
Borrower
has complied in all material respects with all Applicable Securities Legislation
in Canada, except for the Borrower's failure to make the Required Filings,
and
no confidential material change reports have been filed.
|
3.31
|
Contracts.
|
Except
as
disclosed in the Disclosure Letters, on the Closing Date, each of Borrower
and
its Subsidiaries is not in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
it
is a party or by which it may be bound or to which any of its property or assets
is subject, other than defaults that in the aggregate do not have a Material
Adverse Effect.
|
3.32
|
Resale
Restrictions.
|
Subject
to the applicable Lender not being a "control person" and compliance with
Section 2.5(2) of National Instrument 45-102 of the Canadian Securities
Administrators ("National Instrument 45-102"), the Common
Shares issuable upon conversion of the Convertible Term Loan Notes will not
be
subject to the prospectus requirements or registration requirements under
applicable securities legislation provided such resales are made by persons
registered under the appropriate category under Applicable Securities
Legislation or exempt from registration. Subject to the applicable Lender not
being a "control person" and compliance with Section 2.5(2) of National
Instrument 45-102 (with paragraph (2) of Section 2.5(2) being satisfied if
four
(4) months have elapsed since the Convertible Term Loan Closing Date) the Common
Shares issuable upon conversion of the Convertible PIK Notes will not be subject
to the prospectus requirements or registration requirements under Applicable
Securities Legislation, provided such resales are made by persons registered
under the appropriate category under Applicable Securities Legislation or exempt
from registration.
30
|
3.33
|
Prospectus
Exemption.
|
Each
of
the issuance and delivery of the Common Shares issuable upon conversion
hereunder is exempt from the prospectus and dealer registration requirements
of
Ontario and Quebec securities laws and no other documentation needs to be filed
or consents obtained except for notice of the transaction; provided
that Borrower has filed with the AMF and with the securities
regulator in each other province where a Convertible Term Loan Lender is located
a report on Form 45-106F1 within ten (10) days of the Convertible Term Loan
Closing Date.
SECTION
4
FINANCIAL
STATEMENTS AND INFORMATION
|
4.1
|
Reports
and Notices.
|
(1) Subject
to Section 4.1(2), Borrower hereby agrees that from and after the Closing
Date and until the Termination Date, it shall deliver to Administrative Agent
and Lenders the Financial Statements, notices, Operating Plans, Budgets, reports
and other information at the times, to the Persons and in the manner set forth
in Annex B.
(2) Notwithstanding
any other term or condition of this Agreement and provided that no Event of
Default has occurred or is continuing or would immediately occur as a direct
result of the operation of this Section 4.1(2), any Lender may, at any
time and from time to time by written notice (each, a "Public Period
Notice") by such Lender to Administrative Agent and Borrower, waive the
requirement for the delivery by Borrower to such Lender of Financial Statements,
notices, Operating Plans, Budgets, and other information required to be
delivered pursuant to the terms of this Agreement that are not made publicly
available by Borrower to its security holders and Borrower shall not deliver
such Financial Statements, notices, Operating Plans, Budgets and other
information to such Lender; provided that:
(a) any
such waiver shall be in effect only with respect to the Lender that has provided
the Public Period Notice for a period (a "Public Period")
commencing on the effective date of such Public Period Notice until the earlier
of the date of (i) the occurrence of an Event of Default, and (ii) written
notice from such Lender to Administrative Agent and Borrower cancelling the
effect of such Public Period Notice; and
(b) during
any Public Period, as soon as practicable, and in any event within one (1)
Business Day after an executive officer of Borrower has actual knowledge of
the
existence of any Default or Event of Default, Borrower shall provide notice
of
same simultaneously to all Agents, Lenders and Borrower's security
holders.
SECTION
5
AFFIRMATIVE
COVENANTS
Except
with the prior written consent of Requisite Lenders, Borrower agrees that from
and after the date hereof and until the Termination Date:
|
5.1
|
Maintenance
of Existence and Conduct of
Business.
|
Borrower
shall, and shall cause each of its Material Subsidiaries to, (1) do or cause
to
be done all things necessary to preserve and keep in full force and effect
its
corporate existence and its rights and
31
franchises;
(2) continue to conduct its business substantially as now conducted or as
otherwise permitted hereunder; (3) at all times maintain, preserve and protect
all of its properties and assets used or useful in the conduct of its business,
and keep the same in good repair, working order and condition in all material
respects (taking into consideration ordinary wear and tear) and from time to
time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices; (4)
and transact business only in such corporate and trade names as are set forth
in
Schedule 5.1 and the Disclosure Letters.
|
5.2
|
Payment
of Obligations.
|
(1) Subject
to Section 5.2(2), Borrower shall pay and discharge or cause to be paid
and discharged promptly all Charges payable by it or its Material Subsidiaries,
including (a) Charges imposed upon it or its Material Subsidiaries, its or
its
Material Subsidiaries' income and profits, or any of its or its Material
Subsidiaries' property and assets and all Charges with respect to employee
source deduction obligations and (b) lawful claims for labour, materials,
supplies and services or otherwise, before any thereof shall become past
due.
(2) Borrower
may in good faith contest, by appropriate proceedings, the validity or amount
of
any Charges or claims described in Section 5.2(1); provided
that (a) adequate reserves with respect to such contest
are
maintained on the books of Borrower in accordance with GAAP, (b) no Lien shall
be imposed to secure payment of such Charges that is superior to any of the
Liens securing payment of the Obligations, (c) such contest is maintained and
prosecuted continuously and with diligence and operates to suspend collection
or
enforcement of such Charges, (d) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest, (e) Borrower shall promptly
pay
or discharge such contested Charges or claims and all additional charges,
interest, penalties and expenses, if any, and shall deliver to Administrative
Agent evidence acceptable to Requisite Lenders of such compliance, payment
or
discharge, on the earliest of the day any such amount is required by law to
be
paid, the day such contest is terminated or discontinued adversely to Borrower
or any of its Material Subsidiaries and the day the conditions set forth in
this
Section 5.2(2) are no longer met or (f) Administrative Agent, acting on
the instructions of Requisite Lenders, has not advised Borrower in writing
that
Requisite Lenders believe that nonpayment or nondischarge thereof could
reasonably be expected to have or result in a Material Adverse
Effect.
|
5.3
|
Books
and Records.
|
Borrower
shall keep adequate books and records with respect to its and its Material
Subsidiaries' business activities in which proper entries, reflecting all
financial transactions, are made in accordance with GAAP and on a basis
consistent with the Financial Statements attached as Schedule 3.4(1) and
such books and records shall be maintained at Borrower's chief executive office
set forth on Schedule 3.2.
|
5.4
|
Insurance;
Damage to or Destruction of
Collateral.
|
(1) Borrower
shall, at its sole cost and expense, maintain the policies of insurance
described on Schedule 3.17and the Disclosure
Letters as in effect on the date hereof or otherwise as is customary and
prudent in the industry of Borrower. If Borrower at any time or times hereafter
shall fail to obtain or maintain any of the policies of insurance required
above
or to pay all premiums relating thereto, Administrative Agent may at any time
or
times thereafter obtain and maintain such policies of insurance and pay such
premiums and take any other action with respect thereto which Requisite Lenders
deems advisable. Administrative Agent shall have no obligation to obtain
insurance for Borrower or its Material Subsidiaries or pay any premiums
therefor. By doing so, Administrative Agent shall not be deemed to have waived
any Default or Event of Default arising from Borrower's failure to maintain
such
insurance
32
or
pay
any premiums therefor. All sums so disbursed, including legal fees, court costs
and other charges related thereto, shall be payable on demand by Borrower to
Administrative Agent and shall be additional Obligations hereunder secured
by
the Collateral. Borrower shall deliver to Administrative Agent, in form and
substance satisfactory to Requisite Lenders, endorsements to (a) all "All Risk"
and business interruption insurance of Borrower and its Material Subsidiaries
naming Collateral Agent as loss payee, and containing the standard mortgage
clause approved by the Insurance Bureau of Canada and (b) all general liability
and other liability policies naming Collateral Agent as additional
insured.
(2) Administrative
Agent, acting on the instructions of Requisite Lenders, reserves the right
at
any time upon any change in Borrower's or its Material Subsidiaries' risk
profile (including any change in the product mix maintained by Borrower or
its
Material Subsidiaries or any laws affecting the potential liability of Borrower
or its Material Subsidiaries) to require additional forms and limits of
insurance to, in the reasonable opinion of Requisite Lenders, adequately protect
Collateral Agent's interests, on behalf of Agents and Lenders, in all or any
portion of the Collateral and to ensure that Borrower and its Material
Subsidiaries are protected by insurance in amounts and with coverage customary
for their industry. If requested by Administrative Agent, acting on the
instructions of Requisite Lenders, Borrower shall deliver to Administrative
Agent from time to time a report of a reputable insurance broker, satisfactory
to Requisite Lenders, with respect to its insurance policies.
(3) Borrower
irrevocably makes, constitutes and appoints Administrative Agent (and all
Related Parties designated by Administrative Agent), so long as any Event of
Default shall have occurred and be continuing or the anticipated insurance
proceeds exceed Cdn$500,000, as Borrower's and its Material Subsidiaries' true
and lawful agent and attorney-in-fact for the purpose of making, settling and
adjusting claims under such "All Risk" policies of insurance, endorsing the
name
of Borrower or any Subsidiary on any cheque or other item of payment for the
proceeds of such "All Risk" policies of insurance and for making all
determinations and decisions with respect to such "All Risk" policies of
insurance. Administrative Agent shall have no duty to exercise any
rights or powers granted to it pursuant to the foregoing power-of-attorney.
Borrower shall promptly notify Administrative Agent of any loss, damage, or
destruction to the Collateral in the amount of Cdn$100,000 or more, whether
or
not covered by insurance. After deducting from such proceeds the expenses,
if
any, incurred by Administrative Agent in the collection or handling thereof,
Administrative Agent shall remit the balance to Borrower which shall use such
money, or any part thereof, firstly to replace, repair, restore or rebuild
the
Collateral in a diligent and expeditious manner with materials and workmanship
of substantially the same quality as existed before the loss, damage or
destruction and secondly for the purposes hereof.
|
5.5
|
Compliance
with Laws.
|
(1) Borrower
shall, and shall cause each of its Material Subsidiaries to, comply with all
federal, provincial, local and foreign laws and regulations applicable to it,
including Applicable Securities Legislations, those relating to licensing and
employment and labour matters and Environmental Laws and Environmental Permits,
except to the extent that the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect
and except as set out
in the Disclosure Letters.
(2) For
each existing Canadian Pension Plan and SR Group Pension Plan, Borrower shall
ensure that such plan retains its registered status under and is administered
in
a timely manner in all material respects in accordance with the applicable
pension plan text, funding agreement, the ITA and all other applicable
laws.
(3) For
each Canadian Pension Plan and SR Group Pension Plan hereafter adopted by
Borrower or any of its Material Subsidiaries which is required to be registered
under the ITA or any other applicable
33
laws,
Borrower shall use its best efforts to seek and receive confirmation in writing
from the applicable Governmental Authorities to the effect that such plan is
unconditionally registered under the ITA or such other applicable
laws.
(4) For
each existing and hereafter adopted Canadian Pension Plan, Canadian Benefit
Plan
and SR Group Pension Plan, Borrower shall in a timely fashion perform in all
material respects all obligations (including fiduciary, funding, investment
and
administration obligations) required to be performed in connection with such
plan and the funding media therefor.
(5) Subject
to Section 4.1(2), Borrower shall deliver to Administrative Agent and
Lenders, (a) promptly after the filing thereof with any applicable Governmental
Authority, copies of each annual and other return, report or valuation with
respect to each Canadian Pension Plan and SR Group Pension Plan; (b) promptly
after receipt thereof, a copy of any direction, order, notice, ruling or opinion
that Borrower or any of its Material Subsidiaries may receive from any
applicable Governmental Authority with respect to any Canadian Pension Plan
or
SR Group Pension Plan; and (c) prompt notification of any increases having
a
cost to Borrower or any of its Material Subsidiaries in excess of Cdn$150,000
per annum, in the benefits of any existing Canadian Pension Plan, Canadian
Benefit Plan or SR Group Pension Plan, or the establishment of any new Canadian
Pension Plan, Canadian Benefit Plan or SR Group Pension Plan, or the
commencement of contributions to any such plan to which Borrower or its Material
Subsidiaries were not previously contributing.
|
5.6
|
Supplemental
Disclosure.
|
From
time
to time as may be requested by Requisite Lenders, Borrower shall supplement
each
Schedule hereto, or any representation herein or in any other Loan Document,
with respect to any matter hereafter arising which, if existing or occurring
at
the date of this Agreement, would have been required to be set forth or
described in such Schedule or as an exception to such representation or which
is
necessary to correct any information in such Schedule or representation which
has been rendered inaccurate thereby (and, in the case of any supplements to
any
Schedule, such Schedule shall be appropriately marked to show the changes made
therein); provided that (1) no such supplement to any such
Schedule or representation shall be or be deemed a waiver of any Default or
Event of Default resulting from the matters disclosed therein, except as
consented to by Requisite Lenders in writing; (2) no supplement shall be
required as to representations and warranties that relate solely to the Closing
Date; and (3) all such requested supplements shall be provided to Lenders within
ten (10) days from such request.
|
5.7
|
Intellectual
Property.
|
Borrower
shall, and shall cause each of its Material Subsidiaries to, conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect.
|
5.8
|
Environmental
Matters.
|
Borrower
shall, and shall cause each Person within its control to, (1) conduct its
operations and keep and maintain its Real Estate in compliance with all
Environmental Laws and Environmental Permits other than noncompliance which
could not reasonably be expected to have a Material Adverse Effect; (2)
implement any and all investigation, remediation, removal and response actions
which are appropriate or necessary to maintain the value and marketability
of
the Real Estate or to otherwise comply with Environmental Laws and Environmental
Permits pertaining to the presence, generation, treatment, storage, use,
disposal, transportation or Release of any Hazardous Material on, at, in, under,
above, to,
34
from
or
about any of the Real Estate; (3) notify Administrative Agent promptly after
Borrower becomes aware of any violation of Environmental Laws or Environmental
Permits or any Release on, at, in, under, above, to, from or about any Real
Estate which could reasonably be expected to result in Environmental Liabilities
in excess of Cdn$50,000; and (4) promptly forward to Administrative Agent a
copy
of any order, notice, request for information or any communication or report
received by Borrower or its Material Subsidiaries in connection with any such
violation or Release or any other matter relating to any Environmental Laws
or
Environmental Permits that could reasonably be expected to result in
Environmental Liabilities in excess of Cdn$50,000, in each case whether or
not
any Governmental Authority has taken or threatened any action in connection
with
any such violation, Release or other matter. If Requisite Lenders at any time
have a reasonable basis to believe that there may be a violation of any
Environmental Laws or Environmental Permits by Borrower or any of its Material
Subsidiaries or any Environmental Liability arising thereunder, or a Release
of
Hazardous Materials on, at, in, under, above, to, from or about any of the
Real
Estate, which, in each case, could reasonably be expected to have a Material
Adverse Effect, then Borrower shall, upon Administrative Agent's written request
(a) cause the performance of such environmental audits including subsurface
sampling of soil and groundwater, and preparation of such environmental reports,
at Borrower's expense, as Administrative Agent may from time to time request,
which shall be conducted by reputable environmental consulting firms acceptable
to Requisite Lenders and shall be in form and substance acceptable to Requisite
Lenders, and (b) permit any Agent or its Related Parties to have access to
all
Real Estate for the purpose of conducting such environmental audits and testing
as Requisite Lenders deem appropriate, including subsurface sampling of soil
and
groundwater. Borrower shall reimburse Administrative Agent for the costs of
such
audits and tests and the same will constitute a part of the Obligations secured
hereunder.
|
5.9
|
Landlords'
Agreements, Mortgagee Agreements and Bailee
Letters.
|
(1) If
requested by Requisite Lenders, Borrower shall obtain a landlord's agreement,
mortgagee agreement or bailee letter, as applicable, from the lessor of each
leased property or mortgagee of owned property or with respect to any warehouse,
processor or converter facility or other location where Collateral is located,
which agreement or letter shall contain a waiver or subordination of all Liens
or claims (including any distraint rights) that the landlord, mortgagee or
bailee may assert against the Collateral at that location, and shall otherwise
be satisfactory in form and substance to Requisite Lenders. After the
Initial Closing Date, no real property or warehouse space shall be leased or
acquired by Borrower or its Material Subsidiaries and no Inventory shall be
shipped to a processor or converter under arrangements established after the
Initial Closing Date without the prior written consent of Requisite Lenders
or,
unless and until a satisfactory landlord or mortgagee agreement or bailee
letter, as appropriate, shall first have been obtained with respect to such
location. Borrower shall, and shall cause each of its Material Subsidiaries
to,
timely and fully pay and perform its obligations under all leases and other
agreements with respect to each leased location or public warehouse where any
Collateral is or may be located.
(2) If
Borrower acquires any real property after the Initial Closing Date, Borrower
shall deliver to Collateral Agent concurrently with or immediately following
such acquisition a first-ranking Mortgage or Lien (subject to Permitted
Encumbrances) covering such real property, title insurance policies, a legal
opinion, current as-built surveys, zoning letters and certificates of occupancy,
in each case, in form and substance (a) substantially similar to those that
Borrower delivered on or about the Initial Closing Date in respect of certain
of
Borrower's Real Estate owned by Borrower on such date and (b) reasonably
satisfactory to Requisite Lenders.
35
|
5.10
|
Purpose
|
Borrower
shall ensure that the proceeds of the Loans shall be applied exclusively for
the
purposes set out herein.
|
5.11
|
Visits
and Inspections; Lender
Meetings.
|
Borrower
agrees that it shall, and shall cause its Material Subsidiaries to, permit
(i)
Agents, any Lender and their respective Related Parties, from time to time,
as
often as may be reasonably requested, but only during normal business, hours,
to
visit and inspect the properties of Borrower and each of its Material
Subsidiaries, inspect, audit and make extracts from their respective books
and
records, and discuss with their respective Related Parties, Borrower's and
each
of its Material Subsidiaries' business, assets, liabilities, financial
condition, business prospects and results of operations and (ii) appraisers
engaged by Agents (whether or not personnel of Agents or any Lender), from
time
to time, as often as may be reasonably requested, but only during normal
business hours, to visit and inspect the properties of Borrower and each of
its
Material Subsidiaries, for the purpose of completing
appraisals. Agents or any Lender, if no Default or Event of Default
then exists or is reasonably likely to occur, shall give Borrower or the
applicable Subsidiary reasonable prior notice of any such inspection or audit.
Without limiting the foregoing, Borrower will participate and will cause their
Related Parties and Material Subsidiaries to participate in meetings with
Agents, Lenders and their respective Related Parties periodically during each
year, which meeting(s) shall be held at such times and such places as may be
reasonably requested by Agents.
|
5.12
|
Further
Assurances.
|
Borrower
agrees that it shall, at Borrower's expense and upon request of Administrative
Agent, duly execute and deliver, or cause to be duly executed and delivered,
to
Administrative Agent such further instruments and do and cause to be done such
further acts as may be necessary, proper or desirable in the opinion of
Requisite Lenders to carry out more effectively the provisions and purposes
of
this Agreement or any other Loan Document.
|
5.13
|
MCTOs.
|
Borrower
shall file the Required Filings with the Canadian Securities Administrators
by
July 6, 2007 and comply with all other requirements of the AMF and the OSC
to
ensure that the MCTOs will lapse as soon as practicable, but in any event no
later than July 13, 2007.
|
5.14
|
Public
Disclosure.
|
Borrower
shall forthwith publicly disclose all information of the Borrower and its
Subsidiaries requested by the Requisite Lenders that has not yet been made
publicly available. If Borrower does not publicly disclose any such information
within 2 Business Days after written request from the Requisite Lenders, the
Administrative Agent may, upon written request of the Requisite Lenders,
publicly disclose such information. The Administrative Agent and the Lenders
shall have no liability to Borrower, shareholders of Borrower or any other
Person in respect of such disclosure. Borrower shall indemnify and hold harmless
each Indemnified Person from and against any and all
suits, actions, proceedings, claims, damages, losses, liabilities and expenses
(including reasonable legal fees, on a solicitor and client basis, and
disbursements and other costs of investigation or defence, including those
incurred upon any appeal) which may be instituted or asserted against or
incurred by any such Indemnified Person in respect of such
disclosure.
36
|
5.15
|
Filings.
|
Borrower
shall make all requisite filings under Applicable Securities Legislation and
the
rules of the Exchange, including to report the issue of the Convertible Notes
and the Common Shares issuable under the Convertible Notes and the exercise
of
the right to acquire Common Shares pursuant to the Convertible
Notes.
|
5.16
|
Reporting
Issuer Status.
|
Borrower
shall maintain its status as a reporting issuer, or the equivalent thereof
in
the provinces of Canada where it is, as of the date hereof, a reporting issuer,
not in default of the requirements of Applicable Securities Legislation in
Canada, except with respect to the Required Filings and except as otherwise
disclosed to the Lenders, and will maintain its status as a registrant under
the
United States Securities Exchange Act of 1934, as amended, until such
time as it deregisters with the consent of Requisite Convertible Term Loan
Lenders and, for so long as it remains registered in the United States, will
not
be in default of the requirements of Applicable Securities Legislation in the
United States, except with respect to the Required Filings and as otherwise
disclosed in the Disclosure Letters.
|
5.17
|
Resale
Restrictions.
|
If
at any
time any order, ruling, registration, notice or filing pursuant to any
Applicable Securities Legislation is required to ensure that any Common Shares
issuable upon the conversion of the Convertible Notes and Conversion Amount
are
issued in compliance with such laws or to ensure that any such Common Shares
are
not subject to any restriction as to the resale (other than restrictions imposed
on Persons referred to in Subsection 1(c) of the definition of
"distribution" under the Securities Act (Ontario) and analogous
provisions of the securities laws of such other provinces and the restrictions
imposed in Section 2.5 of National Instrument 45-102 provided such Common
Shares are traded through Persons registered, if required, under Applicable
Securities Legislation), Borrower covenants that it will make or obtain such
order, ruling, registration, notice or filing, as the case may be.
|
5.18
|
Listing.
|
Borrower
shall ensure that the Common Shares outstanding or issuable from time to time
(including the Common Shares issuable on the conversion of any Convertible
Note
and Conversion Amount) continue to be listed and posted for trading on the
Exchange. Borrower shall list the Common Shares issuable on the
conversion of any Convertible Note and Conversion Amount hereunder on the
Toronto Stock Exchange as soon as possible following such
conversion.
|
5.19
|
United
States Shareholders.
|
Upon
a
written request from a holder of a Convertible Note that is also a potential
"United States shareholder" (as that term is defined in Section 951(b) of
the Internal Revenue Code of 1986, as amended (the "Code")) of Borrower,
Borrower will use reasonable best efforts to determine whether it is properly
treated as a "controlled foreign corporation" ("CFC") within the meaning of
Section 957 of the Code and to inform such person of its determination.
Each holder of Convertible Notes or Common Shares acquired upon conversion
of
Convertible Notes shall, on an annual basis, provide to Borrower information
regarding their ownership of Convertible Notes and Common Shares and generally
cooperate with Borrower so that Borrower can make a determination as to its
CFC
status. If Borrower determines that it is properly treated as a CFC in any
Fiscal Year, (i) Borrower shall promptly, but in any case no later than thirty
(30) days after the end of the applicable Fiscal Year, notify each requesting
Convertible Term Loan Lender described in the first sentence of this Section
5.19 of Borrower's CFC status and (ii) Borrower
37
shall,
no
later than March 1 of the following Fiscal Year, provide each such Convertible
Term Loan Lender holding Common Shares on the last day of such Fiscal Year
on
which Borrower was a CFC a written report of the amount of income per Common
Share required to be included in the gross income of a "United States
shareholder" pursuant to Section 951(a) of the Code and shall generally
cooperate with any reasonable request of such Convertible Term Loan Lender
to
facilitate such Convertible Term Loan Lender's U.S. federal income tax reporting
requirements relating to Borrower.
|
5.20
|
Contracts.
|
Subject
to Section 4.1(2), Borrower shall promptly inform Lenders in writing of
the full particulars of:
(a) any
Material Change (actual, anticipated, contemplated or threatened, whether
financial or otherwise) in the business, affairs, operations, assets,
liabilities (contingent or otherwise) or capital of Borrower; and
(b) any
change in any Material Fact contained in the Filed Securities Documents
(including any information incorporated or deemed to be incorporated by
reference therein).
|
5.21
|
Reserve.
|
Borrower
covenants with Convertible Term Loan Lenders that it will at all times reserve
and keep available out of its authorized Common Shares, solely for the purpose
of issuance upon conversion of the Conversion Amounts and Convertible Notes
as
herein provided, and conditionally allot to Convertible Term Loan Lenders who
may exercise their conversion rights hereunder, such number of Common Shares
as
shall then be issuable upon the conversion of all outstanding Conversion Amounts
and Convertible Notes. Borrower covenants with Convertible Term Loan Lenders
that all Common Shares which shall be so issuable shall be duly and validly
issued as fully-paid and non-assessable shares.
|
5.22
|
Employment
Agreements.
|
Within
sixty (60) days following the Closing Date, the Borrower shall have entered
into
employment agreements (or amendments with respect thereto) with each of the
following individuals to serve in the position(s) listed opposite his name,
which employment agreements shall have a minimum term (without giving effect
to
any renewal thereof) of not less than three (3) years from and after the Closing
Date:
|
▇▇▇▇▇
▇▇▇▇▇▇
|
President
& Chief Executive Officer
|
|
▇▇▇▇
▇▇▇▇▇▇
|
Senior
Vice President and Chief Financial Officer
|
|
▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
Senior
Vice President Innovation
|
38
ECTION
6
NEGATIVE
COVENANTS
Borrower
agrees that, without the prior written consent of Requisite Lenders, from and
after the date hereof until the Termination Date:
|
6.1
|
Amalgamations,
Subsidiaries, Etc.
|
Borrower
shall not, and shall cause each of its Material Subsidiaries not to, directly
or
indirectly, by operation of law or otherwise, (1) form or acquire any
Subsidiary, or (2) amalgamate or merge with, consolidate with, acquire all
or
substantially all of the property, assets or Stock of, or otherwise combine
with
or acquire, any Person; except that Borrower and its Material
Subsidiaries may form Subsidiaries in the ordinary course of their respective
businesses consistent with past practice.
|
6.2
|
Investments;
Loans and Advances.
|
Except
as
otherwise expressly permitted by this Section 6, Borrower shall not, and
shall cause each of its Material Subsidiaries not to, make or permit to exist
any investment in, or make, accrue or permit to exist loans or advances of
money
to, any Person, through the direct or indirect lending of money, holding of
securities or otherwise; except that Borrower may hold funds in
the Borrower Accounts and Disbursement Accounts and investments comprised of
notes payable, or stock or other securities issued by Account Debtors to
Borrower pursuant to negotiated agreements with respect to settlement of such
Account Debtor's Accounts in the ordinary course of business, so long as the
aggregate amount of such Accounts so settled by Borrower does not exceed
Cdn$1,000,000; provided further that Borrower may hold the
following investments in paragraphs (a) and (b) immediately below
and the amount of such investments shall be excluded from determining such
Cdn$1,000,000 amount:
(a) notes
payable or stock or other securities issued by Telmex Argentina to Borrower
from
time to time pursuant to negotiated agreements with respect to settlement of
Telmex Argentina's Accounts in the ordinary course of business; and
(b) notes
payable or stock or other securities issued by any Account Debtor to Borrower
pursuant to negotiated agreements with respect to settlement of Accounts and
which are insured by insurance or guaranteed by letters of credit or letters
of
guarantee (in each case in form and substance satisfactory to Requisite
Lenders).
|
6.3
|
Indebtedness;
Unfunded Pension and Benefit Plan
Obligations.
|
(1) Borrower
shall not, and shall cause each of its Material Subsidiaries not to, create,
incur, assume or permit to exist any Indebtedness, except (without duplication)
(a) Indebtedness secured by Liens permitted in Section 6.7, (b) the Loans
and the other Obligations and (c) existing Indebtedness described in Schedule
6.3 and the
Disclosure Letters.
(2) Borrower
shall not, and shall cause each of its Material Subsidiaries not to, directly
or
indirectly, voluntarily purchase, redeem, defease or prepay any principal of,
premium, if any, interest or other amount payable in respect of any
Indebtedness, other than the Obligations.
(3) Borrower
shall not, and shall cause each of its Material Subsidiaries not to, permit
its
unfunded pension fund and other employee benefit plan obligations and
liabilities to remain unfunded other than in accordance with applicable
law.
39
|
6.4
|
Affiliate
Transactions and Employee
Loans.
|
(1) Except
as otherwise expressly permitted in this Section 6, Borrower shall not,
and shall cause each of its Material Subsidiaries not to, enter into or be
a
party to any transaction with any of its Affiliates (other than direct or
indirect wholly-owned Material Subsidiaries) except in the ordinary course
of
and pursuant to the reasonable requirements of Borrower's or its Material
Subsidiaries' business and upon fair and reasonable terms that are no less
favourable to Borrower or its Material Subsidiaries than would be obtained
in a
comparable arm's length transaction with a Person not an Affiliate of Borrower.
In addition, prior to entering into any transaction with any of its Affiliates
(other than for the purchase and sale of goods that are in compliance with
the
first sentence of this Section 6.4(1)), the terms of each such
transaction must be disclosed ten (10) days in advance to Administrative Agent.
All such transactions existing as of the date hereof are described on
Schedule 6.4(1)
and the Disclosure Letters.
(2) Borrower
shall not, and shall cause each of its Material Subsidiaries not to, enter
into
any lending or borrowing transaction with any of its employees, except on an
arm's-length basis in the ordinary course of business consistent with past
practices for travel expenses, relocation costs and similar
purposes.
|
6.5
|
Capital
Structure and Business.
|
Borrower
shall not, and shall cause each of its Material Subsidiaries not to, (1) make
any changes to its capital structure or in any of its business objectives,
purposes or operations which could in any way adversely affect the repayment
of
the Loans or any of the other Obligations or could reasonably be expected to
have or result in a Material Adverse Effect; or (2) amend its constating
documents or bylaws in a manner which would adversely affect Borrower's or
any
of its Material Subsidiaries' duty or ability to repay the Obligations. Borrower
shall not, and shall cause each of its Material Subsidiaries not to, engage
in
any business other than the businesses currently engaged in by it or businesses
reasonably related thereto.
|
6.6
|
Guaranteed
Indebtedness.
|
Borrower
shall not, and shall cause each of its Material Subsidiaries not to, create,
incur, assume or permit to exist any Guaranteed Indebtedness except for
Guaranteed Indebtedness set forth on Schedule 6.3.
|
6.7
|
Liens.
|
(1) Borrower
shall not, and shall cause each of its Material Subsidiaries not to, create,
incur, assume or permit to exist any Lien on or with respect to its Accounts
or
any of its other properties, assets or undertakings (whether now owned or
hereafter acquired) except:
(a) Permitted
Encumbrances;
(b) Liens
in existence on the Closing Date and summarized on Schedules 3.6 and
6.7
and the
Disclosure Letters;
(c) Liens
created after the Initial Closing Date by conditional sale or other title
retention agreements (including Capital Leases) or in connection with purchase
money Indebtedness with respect to Equipment and Fixtures acquired by Borrower
or its Material Subsidiaries in the ordinary course of business, involving
the
incurrence of an aggregate amount of purchase money Indebtedness and Capital
Lease Obligations of not more than Cdn$500,000 outstanding at any one time
for
all such Liens; provided that such Liens attach only to the assets
subject to such purchase money Indebtedness and such
40
Indebtedness
is incurred within twenty (20) days following such purchase and does not exceed
one hundred percent (100%) of the purchase price of the subject
assets;
(d) Liens
created after the Initial Closing Date in connection with purchase money
Indebtedness with respect to Inventory acquired by Borrower or its Material
Subsidiaries in the ordinary course of business, involving the incurrence of
an
aggregate amount of purchase money Indebtedness of not more than Cdn$2,000,000
outstanding at any one time for all such Liens; provided that such
Liens attach only to the assets subject to such purchase money Indebtedness
and
such Indebtedness is incurred within twenty (20) days following such purchase
and does not exceed one hundred percent (100%) of the purchase price of the
subject assets; and
(e) to
the extent set forth and described in a Budget approved in writing by Requisite
Lenders, Liens created after the date hereof in the form of cash or cash
equivalent collateral as security for any credit facility made or to be made
available to Borrower or any Material Subsidiary with respect to the issuance
of
letters of credit or letters of guarantee required in the ordinary course of
business of Borrower or a Material Subsidiary.
(2) In
addition, Borrower shall not, and shall cause each of its Material Subsidiaries
not to, become a party to any agreement, note, indenture or instrument, or
take
any other action, which would prohibit the creation of a Lien on any of its
properties, assets or undertaking in favour of Collateral Agent, on behalf
of
Agents and Lenders, as additional collateral for the Obligations, except
operating leases, Capital Leases or Licenses which prohibit Liens upon the
assets that are subject thereto.
|
6.8
|
Sale
of Stock and Assets.
|
Borrower
shall not, and shall cause each of its Material Subsidiaries not to, sell,
transfer, convey, assign or otherwise dispose of any of its properties, assets
or undertaking including any of its Accounts or issue any Stock of Material
Subsidiaries, other than (1) the sale, transfer, conveyance or
other disposition by Borrower or its Material Subsidiaries of Equipment or
Fixtures that are obsolete or no longer used or useful in Borrower's or its
Material Subsidiaries' business and having a value not exceeding Cdn$250,000
in
the aggregate per annum, and (2) to the extent set forth and described in a
Budget approved in writing by Requisite Lenders, the sale, assignment,
securitization, discounting or similar disposition of letters of credit or
Accounts to banks or other financial institutions; provided that,
notwithstanding any other term or condition of this Agreement, in accordance
with Section 11.2(2)(e), the prior written consent of all Lenders shall
be required to permit Borrower or any of its Material Subsidiaries to sell,
transfer, convey, assign or otherwise dispose of any of the Collateral except
for transactions permitted pursuant to paragraphs (1) and (2)
immediately above.
|
6.9
|
Hazardous
Materials.
|
Borrower
shall not, and shall cause each of its Material Subsidiaries not to, cause
or
permit a Release of any Hazardous Material on, at, in, under, above, to, from
or
about any of the Real Estate where such Release would (1) violate in any
respect, or form the basis for any Environmental Liabilities under, any
Environmental Laws or Environmental Permits or (2) otherwise adversely impact
the value or marketability of any of the Real Estate or any of the Collateral,
other than such violations or impacts which could not reasonably be expected
to
have a Material Adverse Effect.
|
6.10
|
Sale-Leasebacks.
|
Borrower
shall not, and shall cause each of its Material Subsidiaries not to, engage
in
any sale-leaseback, synthetic lease or similar transaction involving any of
its
property, assets or undertaking.
41
|
6.11
|
Cancellation
of Indebtedness.
|
Borrower
shall not, and shall cause each of its Material Subsidiaries not to, cancel
any
claim or debt owing to it, except for reasonable consideration negotiated on
an
arm's-length basis and in the ordinary course of its business consistent with
past practices.
|
6.12
|
Restricted
Payments.
|
Borrower
shall not, and shall cause each of its Material Subsidiaries not to, make any
Restricted Payment, except employee loans permitted under Section 6.4(2)
above.
|
6.13
|
Change
of Corporate Name or Location; Change of Fiscal
Year.
|
(1) Borrower
shall not, and shall cause each of its Material Subsidiaries not to, (1) change
its corporate name, or (2) change its chief executive office, principal place
of
business, corporate offices or warehouses or locations at which Collateral
is
held, located or stored, or the location of its records concerning the
Collateral from that set forth on Schedule 3.2 and the
Disclosure
Letters, in any case without at least thirty (30) days prior written
notice to Administrative Agent and after Administrative Agent's written
acknowledgment that any action requested by Requisite Lenders in connection
therewith, including to continue the perfection of any Liens in favour of
Collateral Agent, on behalf of Agents and Lenders, in any Collateral, has been
completed or taken, and provided that any such new location shall be in the
Province of Quebec.
(2) Borrower
shall not, and shall cause its Material Subsidiaries not to, change its
accounting periods (including the Fiscal Quarter and the Fiscal
Year).
|
6.14
|
No
Speculative Transactions.
|
Borrower
shall not, and shall cause each of its Material Subsidiaries not to, engage
in
any transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
|
6.15
|
Changes
Related to Subordinated
Debt.
|
Borrower
shall not, and shall cause each of its Material Subsidiaries not to, change
or
amend the terms of any Subordinated Debt (or any indenture or agreement in
connection therewith).
42
SECTION
7
TERM
|
7.1
|
Termination.
|
|
|
(a)
|
The
Initial Loans shall be in effect until the Initial Loan Termination
Date
and shall be automatically due and payable in full on the Initial
Loan
Termination Date.
|
|
|
(b)
|
The
June 2007 Loans shall be in effect until the June 2007 Loan Termination
Date and shall be automatically due and payable in full on the June
2007 Loan Termination
Date.
|
|
|
(c)
|
The
Supplemental Loans, if and when drawn pursuant to Section 2.2,
shall be in effect until the Supplemental Loan Termination Date and
shall
be automatically due and payable in full on the Supplemental Loan
Termination Date.
|
|
|
(d)
|
The
Convertible Term A Loans shall be in effect until the Convertible
Term A
Loan Termination Date and shall be automatically due and payable
in full
on the Convertible Term A Loan Termination
Date.
|
|
|
(e)
|
The
Convertible Term B Loans shall be in effect until the Convertible
Term B
Loan Termination Date and shall be automatically due and payable
in full
on the Convertible Term B Loan Termination
Date.
|
|
|
(f)
|
The
Convertible Term C Loans shall be in effect until the Convertible
Term C
Loan Termination Date and shall be automatically due and payable
in full
on the Convertible Term C Loan Termination
Date.
|
|
7.2
|
Survival
of Obligations Upon Termination of Financing
Arrangements.
|
Except
as
otherwise expressly provided for in the Loan Documents, no termination or
cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of Borrower or its Subsidiaries or the rights of Agents and
Lenders relating to any unpaid portion of the Loans or any other Obligations,
due or not due, liquidated, contingent or unliquidated or any transaction or
event occurring prior to such termination or cancellation, or any transaction
or
event, the performance of which is required after the Initial Loan Termination
Date (in the case of the Initial Loans), the June 2007 Loan Termination Date
(in
the case of the June 2007 Loans), the Supplemental Loan Termination Date (in
the
case of the Supplemental Loans), the Convertible Term A Loan Termination Date
(in the case of the Convertible Term A Loan), the Convertible Term B Loan
Termination Date (in the case of the Convertible Term B Loan) and the
Convertible Term C Loan Termination Date (in the case of the Convertible C
Term
Loan). Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon Borrower or its Subsidiaries, and all rights
of Agents and Lenders, all as contained in the Loan Documents, shall not
terminate or expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until the Termination
Date; provided however, that in all events the provisions of Section
11, the payment obligations under Sections 1.10 and 1.11, and
the indemnities contained in the Loan Documents shall survive the Termination
Date.
43
SECTION
8
EVENTS
OF DEFAULT: RIGHTS AND REMEDIES
|
8.1
|
Events
of Default.
|
The
occurrence of any one or more of the following events (regardless of the reason
therefor) shall constitute an "Event of Default"
hereunder:
(1) Borrower
or any of its Subsidiaries (a) fails to make any payment of principal when
due
and payable, or (b) fails to make any payment of interest on, or Fees owing
in
respect of, the Loans or any of the other Obligations within two (2) days of
the
date on which such interest or Fees become due and payable, or (c) fails to
pay
or reimburse any Agent or Lender for any expense reimbursable hereunder or
under
any other Loan Document within three (3) days following an Agent's or a Lender's
demand for such reimbursement or payment of expenses.
(2) Borrower
fails or neglects to perform, keep or observe any of the provisions of
Sections 1.2,1.3, 1.9, 1.10, 1.11, 4,
5, 6, or any of
the provisions set forth in Annex B and the
same shall remain unremedied for five (5) Business Days or more; provided
that no Event of Default shall occur if Borrower fails to deliver to a Lender
the Financial Statements, notices, Operating Plans, Budgets and other
information required to be delivered pursuant to Annex B during such time
as such Lender has issued a waiver pursuant to Section 4.1(2) and such
waiver remains in effect.
(3) Borrower
or any of its Material Subsidiaries fails or neglects to perform, keep or
observe any other provision of this Agreement or of any of the other Loan
Documents (other than any provision embodied in or covered by any other
paragraph of this Section 8.1) and the same shall remain unremedied for
five (5) Business Days or more.
(4) A
default or breach shall occur under any other agreement, document or instrument
to which Borrower or any of its Material Subsidiaries is a party (other than
any
default or breach caused by any act or omission of any Agent or Lender) which
is
not cured within any applicable cure or grace period, and such default or
breach:
(a) involves
the failure to make any payment when due in respect of any Indebtedness (other
than (i) the Obligations and (ii) any Ordinary Course Indebtedness) of Borrower
or any of its Material Subsidiaries in excess of Cdn$100,000 in the aggregate;
or
(b) causes,
or permits any holder of any Indebtedness (other than (i) the Obligations and
(ii) and Ordinary Course Indebtedness), or a trustee to cause, such Indebtedness
or a portion thereof in excess of Cdn$100,000 in the aggregate to become due
prior to its stated maturity or prior to its regularly scheduled dates of
payment, regardless of whether such default is waived, or such right is
exercised, by such holder or trustee; or
(c) involves
the failure to make any payment when due in respect of Ordinary Course
Indebtedness in excess of Cdn$1,000,000 in the aggregate.
(5) Any
representation or warranty herein or in any Loan Document or in any written
statement, report, Financial Statement or certificate made or delivered to
any
Agent or Lender by Borrower or any of its Subsidiaries is untrue or incorrect
in
any material respect as of the date when made or deemed made.
(6) Property
or assets of Borrower or any of its Material Subsidiaries with a fair market
value in the aggregate of Cdn$100,000 or more shall be attached, seized, levied
upon or subjected to execution,
44
garnishment,
distress or any other similar process, or come within the possession of any
trustee, interim receiver, receiver, receiver and manager, liquidator,
administrator, custodian, sequestrator, agent, examiner, monitor, sheriff,
bailiff or other similar official or assignee for the benefit of creditors
of
Borrower or any of its Material Subsidiaries and such condition continues for
thirty (30) days or more.
(7) Any
involuntary case or proceeding (including the filing of any notice in respect
thereof) is commenced against Borrower or any of its Material Subsidiaries
under
any Insolvency Law, any incorporation law or other applicable law in any
jurisdiction in respect of the:
(a) bankruptcy,
liquidation, winding-up, cessation, dissolution or suspension of general
operations,
(b) composition,
compromise, rescheduling, reorganization, arrangement or readjustment of, or
other relief from, or stay of proceedings to enforce, some or all of the debts
or obligations,
(c) appointment
of a trustee, interim receiver, receiver, receiver and manager, liquidator,
administrator, custodian, sequestrator, agent, examiner, monitor or other
similar official for, or for all or a substantial part of the property and
assets, or
(d) possession,
foreclosure, seizure or retention, sale or other disposition of, or other
proceedings to enforce security over, all or a substantial part of the property
and assets,
of
Borrower or any of its Material Subsidiaries and such case or proceeding shall
remain undismissed or unstayed for thirty (30) days or more or such court shall
enter a decree or order granting the relief sought in such case or
proceeding.
(8) Borrower
or any of its Material Subsidiaries (i) commences or fails to contest in a
timely and appropriate manner or consents to the institution of cases or
proceedings referred to in Section 8.1(7) above or to the filing of any
petition or application or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of Borrower or any of its Material Subsidiaries or of any part of
Borrower's or any of its Material Subsidiaries' property and assets or (ii)
shall take any corporate action in furtherance of any of the foregoing or of
any
of the cases or proceedings referred to in Section 8.1(7) above or (iii)
admits in writing its inability to pay its debts as such debts become due or
(iv) becomes insolvent.
(9) A
final judgment or judgments for the payment of money in excess of Cdn$250,000
in
the aggregate at any time outstanding shall be rendered against Borrower or
any
of its Material Subsidiaries and the same shall not, within thirty (30) days
after the entry thereof, have been discharged or execution thereof stayed or
bonded pending appeal, or shall not have been discharged prior to the expiration
of any such stay.
(10) Any
obligation of Borrower or any of its Subsidiaries under any provision of any
Loan Document shall for any reason become unlawful and as a result cease to
be
valid, binding and enforceable in accordance with its terms (or Borrower or
any
of its Subsidiaries shall on any basis challenge the enforceability of any
Loan
Document or shall on any basis assert in writing, or engage in any action or
inaction based on any such assertion, that any provision of any of the Loan
Documents has ceased to be or otherwise is not valid, binding and enforceable
in
accordance with its terms), or any Lien created under any Loan Document shall
cease to be a valid and perfected first priority Lien (except as otherwise
permitted herein or therein) in any of the Collateral purported to be covered
thereby.
45
(11) Any
involuntary and unanticipated event shall occur, whether or not insured or
insurable, as a result of which revenue-producing activities cease or are
substantially curtailed at any facility of Borrower or any of its Material
Subsidiaries generating more than ten percent (10%) of Borrower's revenues
(on a
consolidated basis) for the Fiscal Year preceding such event and such cessation
or curtailment continues for more than thirty (30) days.
(12) Any
default or breach by Borrower or any of its Material Subsidiaries shall occur
and be continuing under any agreement to which Borrower or any of its Material
Subsidiaries is a party or any of its property or assets is subject, and such
breach or default could reasonably be expected to have a Material Adverse
Effect.
|
8.2
|
Remedies.
|
(1) If
any Default or Event of Default shall have occurred and be continuing,
Administrative Agent may (and shall on the instructions of the Requisite
Lenders), without notice, suspend further draws of the Supplemental Loan
whereupon no further draw shall be made or extended in Requisite Lenders' sole
discretion so long as such Default or Event of Default is
continuing.
(2) If
any Event of Default shall have occurred and be continuing, Administrative
Agent
may (and shall on the instructions of Requisite Lenders), without notice, (a)
terminate the Supplemental Loan Commitments; (b) declare all, but not less
than
all, of the Obligations to be forthwith due and payable, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrower; and (c) exercise any rights and remedies provided
to any Agent or Lender under the Loan Documents and/or at law or equity,
including all remedies provided under the PPSA, the Civil Code, the
equivalents thereof, or other laws similar thereto in any jurisdiction;
provided however, that upon the earliest to occur of (i) the date
an initial order is made under Section 11 of the CCAA with respect to Borrower,
(ii) the date on which Borrower becomes a bankrupt pursuant to the BIA and
(iii)
the date on which Borrower initiates proceedings under Part III of the BIA,
further draws of the
Supplemental Loan shall be immediately terminated and all of the
Obligations, including the Loans, shall become immediately due and payable
without declaration, notice or demand by any Person.
|
8.3
|
Waivers
by Borrower.
|
Except
as
otherwise provided for in this Agreement or by applicable law, Borrower waives:
(a) presentment, demand and protest and notice of presentment, dishonour, notice
of intent to accelerate, notice of acceleration, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, Chattel
Paper and guarantees at any time held by any Agent or Lender on which Borrower
or any of its Subsidiaries may in any way be liable, and hereby ratifies and
confirms whatever any Agent or Lender may do in this regard, (b) all rights
to
notice and a hearing prior to any Agent's taking possession or control of,
or to
any Agent's replevy, attachment or levy upon, the Collateral or any bond or
security which might be required by any court prior to allowing any Agent to
exercise any of its remedies, and (c) the benefit of all valuation, appraisal,
marshalling and exemption laws.
46
SECTION
9
ASSIGNMENT
AND PARTICIPATIONS; APPOINTMENT OF AGENTS
|
9.1
|
Assignment
and Participations.
|
(1) Subject
to the terms of this Section 9.1, any Lender may make an assignment to a
Qualified Assignee of, or a sale of participations in, at any time or times,
the
Loan Documents, its Loans, its Supplemental Loan Commitment or any portion
thereof or interest therein, including any Lender's rights, title, interests,
remedies, powers or duties thereunder. Any assignment by a Lender shall: (i)
require the execution of an assignment agreement (an "Assignment
Agreement") substantially in the form attached hereto as Exhibit
9.1(a); (ii) be conditioned on such assignee Lender representing to the
assigning Lender and Administrative Agent that it is purchasing the applicable
Obligations to be assigned to it for its own account, for investment purposes
and not with a view to the distribution thereof; (iii) after giving effect
to
any such partial assignment, the assignee Lender shall have Loans and/or a
Supplemental Loan Commitment in an amount at least equal to US$1,000,000 and
the
assigning Lender shall have retained Loans and/or a Supplemental Loan Commitment
in an amount at least equal to US$1,000,000; (iv) include a payment to
Administrative Agent of an assignment fee of Cdn$1,000 (which payment may be
waived by the Administrative Agent in its sole discretion), and (v) include
reasonable prior notice to Borrower of such assignment. In the case of an
assignment by a Lender under this Section 9.1, the assignee Lender shall
have, to the extent of such assignment, the same rights, benefits and
obligations as all other Lenders hereunder. The assigning Lender shall be
relieved of its obligations hereunder with respect to its Loans and/or
Supplemental Loan Commitment or assigned portion thereof from and after the
date
of such assignment. Borrower hereby acknowledges and agrees that any assignment
shall give rise to a direct obligation of Borrower to the assignee Lender and
that the assignee Lender shall be considered to be a "Lender". Each Supplemental
Lender's liability to make Supplemental Loans hereunder shall be several and
not
joint and shall be limited to the Supplemental Loan Commitment of such
Supplemental Lender. In the event any Lender assigns or otherwise transfers
all
or any part of the Obligations, in accordance with this Section 9.1, such
Lender shall so notify Borrower.
(2) Any
sale of a participation by a Lender of all or any part of its Loans or
Supplemental Loan Commitment shall be made with the understanding that all
amounts payable by Borrower hereunder shall be determined as if that Lender
had
not sold such participation, and that the holder of any such participation
shall
not be entitled to require such Lender to take or omit to take any action
hereunder except actions directly affecting (i) any reduction in the principal
amount of, or interest rate or Fees payable with respect to, any Loan in which
such holder participates, (ii) any extension of the scheduled amortization
of
the principal amount of any Loan in which such holder participates or the final
maturity date thereof, and (iii) any release of all or substantially all of
the
Collateral (other than in accordance with the terms of this Agreement, the
Collateral Documents or the other Loan Documents). Neither Agents nor any Lender
(other than Lender selling a participation) shall have any duty to any
participant and may continue to deal solely with Lender selling a participation
as if no such sale had occurred.
(3) Except
as expressly provided in this Section 9.1, no Lender shall, as between
Borrower and that Lender, or Agents and that Lender, be relieved of any of
its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the Loan
Documents, Loans, Supplemental Loan Commitment, the Notes, or other Obligations
owed to such Lender.
(4) A
Lender may furnish any information concerning Borrower or its Subsidiaries
in
the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 11.8.
47
|
9.2
|
Appointment
of Agent and Fondé.
|
(1) The
Lenders hereby appoint BNY Trust Company of Canada to act on behalf of all
Lenders as Administrative Agent and Collateral Agent under this Agreement and
the other Loan Documents and, in such capacity, BNY Trust Company of Canada
shall be entitled to all protections, rights, privileges and powers as are
expressly provided for the Administrative Agent and Collateral Agent therein.
The provisions of this Section 9.2(1) are solely for the benefit of each
Agent and Lender and neither Borrower nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing
their functions and duties under this Agreement and the other Loan Documents,
Agents shall act solely as agents of Lenders and do not assume and shall not
be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for Borrower or any other Person. Agents shall have no duties or
responsibilities except for those expressly set forth in this Agreement and
the
other Loan Documents. The duties of Agents shall be mechanical and
administrative in nature and Agents shall not have, or be deemed to have, by
reason of this Agreement, any other Loan Document or otherwise a fiduciary
relationship in respect of any Lender. In respect of notices, agreements or
other written communication received by an Agent by or on behalf of Borrower
pursuant to the terms of this Agreement or the other Loan Documents, such Agent
shall only be required to provide copies of such notice, agreements, documents
or other written communication to the Lenders (to the extent not provided to
a
Lender concurrently with delivery to such Agent) and such Agent shall, except
as
otherwise expressly provided herein or agreed to between such Agent and
Requisite Lenders, have no independent obligation to pursue such notices,
agreements, documents or other written communication or review or confirm the
sufficiency thereof. Except as expressly set forth in this Agreement and the
other Loan Documents, Agents shall not have any duty to disclose, and shall
not
be liable for failure to disclose, any information relating to Borrower or
its
Subsidiaries or any Account Debtor that is communicated to or obtained by it
or
any of its Affiliates in any capacity. Agents shall have the right to delegate
any of their respective duties and obligations under the Loan Documents to
any
Person (each a "Sub-Agent") upon such terms and conditions as
such Agent may think fit; provided that (a) such Agent
gives each Lender prior written notice and reasonable details thereof, (b)
neither Borrower nor any Lender shall have any duty to such Sub-Agent and may
continue to deal solely with such delegating Agent, and (c) such delegating
Agent shall be directly responsible for all such delegated duties and
obligations.
(2) Except
in circumstances where an Agent reasonably believes that any Collateral is
in
material jeopardy or is about to be put in material jeopardy or the rights
of
Agents or Lenders may be materially prejudiced or impaired and an act or action
of such Agent is (in the good faith judgment of such Agent) required to preserve
or protect such Collateral or the rights of Agents and Lenders, such Agent
shall
request instructions from Requisite Lenders or all affected Lenders, as the
case
may be, with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, and such Agent shall
be entitled to refrain from such act or taking such action unless and until
such
Agent shall have received instructions from Requisite Lenders or all affected
Lenders, as the case may be, and such Agent shall not incur liability to any
Person by reason of so refraining. An Agent shall be fully justified in failing
or refusing to take any action hereunder or under any other Loan Document (a)
if
such action would, in the opinion of such Agent, be contrary to law or the
terms
of this Agreement or any other Loan Document, (b) if such action would, in
the
opinion of such Agent, expose such Agent to Environmental Liabilities or (c)
if
such Agent shall not first be indemnified to its satisfaction against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against an Agent as a result of such
Agent acting or refraining from acting hereunder or under any other Loan
Document in accordance with the instructions of Requisite Lenders or all
affected Lenders, as applicable.
(3) BNY
Trust Company of Canada is hereby appointed to act as the power of attorney
and
the "Fondé de Pouvoir" of Lenders, Collateral Agent and the
"Bondholders" (as defined in the Security
48
Agreement)
in the Loan Documents (in such capacity as power of attorney and "Fondé de
Pouvoir", the "Fondé") for the purposes of holding
hypothecs over and against all of Borrower's present and future property, in
general, and the Collateral and the Mortgaged Properties, in particular,
securing payment of bonds and other titles of indebtedness as envisaged by
article 2692 of the Civil Code and, in such capacity, BNY Trust Company
of Canada shall be entitled to all protections, rights, privileges and powers
as
are expressly provided for the power of attorney and the "Fondé de
Pouvoir" therein. The provisions of this Section 9.2(3) are solely
for the benefit of the Fondé and each Lender and neither Borrower nor any other
Person shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and the other Loan Documents, the Fondé shall act solely as agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation toward
or
relationship of agency or trust with or for Borrower or any other Person. The
Fondé shall have no duties or responsibilities except for those expressly set
forth in this Agreement and the other Loan Documents. The duties of the Fondé
shall be mechanical and administrative in nature and the Fondé shall not have,
or be deemed to have, by reason of this Agreement, any other Loan Document
or
otherwise a fiduciary relationship in respect of any Lender. In respect of
notices, agreements or other written communication received by the Fondé by or
on behalf of Borrower pursuant to the terms of this Agreement or the other
Loan
Documents, the Fondé shall only be required to provide copies of such notice,
agreements, documents or other written communication to the Lenders (to the
extent not provided to a Lender concurrently with delivery to the Fondé) and the
Fondé shall, except as otherwise expressly provided herein or agreed to between
the Fondé and Requisite Lenders, have no independent obligation to pursue such
notices, agreements, documents or other written communication or review or
confirm the sufficiency thereof. Except as expressly set forth in this Agreement
and the other Loan Documents, the Fondé shall not have any duty to disclose, and
shall not be liable for failure to disclose, any information relating to
Borrower or its Subsidiaries or any Account Debtor that is communicated to
or
obtained by it or any of its Affiliates in any capacity. The Fondé shall have
the right to delegate any of its duties and obligations under the Loan Documents
to any Person upon such terms and conditions as the Fondé may think fit;
provided that (a) the Fondé gives each Lender prior written
notice and reasonable details thereof, (b) neither Borrower nor any Lender
shall
have any duty to such Person and may continue to deal solely with the Fondé, and
(c) the Fondé shall be directly responsible for all such delegated duties and
obligations.
(4) Except
in circumstances where the Fondé reasonably believes that any Collateral is in
material jeopardy or is about to be put in material jeopardy or the rights
of
the Fondé or Lenders may be materially prejudiced or impaired and an act or
action of the Fondé is (in the good faith judgment of the Fondé) required to
preserve or protect such Collateral or the rights of the Fondé and Lenders, the
Fondé shall request instructions from Requisite Lenders or all affected Lenders,
as the case may be, with respect to any act or action (including failure to
act)
in connection with this Agreement or any other Loan Document, and the Fondé
Agent shall be entitled to refrain from such act or taking such action unless
and until the Fondé shall have received instructions from Requisite Lenders or
all affected Lenders, as the case may be, and the Fondé shall not incur
liability to any Person by reason of so refraining. The Fondé shall be fully
justified in failing or refusing to take any action hereunder or under any
other
Loan Document (a) if such action would, in the opinion of the Fondé, be contrary
to law or the terms of this Agreement or any other Loan Document, (b) if such
action would, in the opinion of the Fondé, expose the Fondé to Environmental
Liabilities or (c) if the Fondé shall not first be indemnified to its
satisfaction against any and all liability and expense which may be incurred
by
it by reason of taking or continuing to take any such action. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against
the
Fondé as a result of the Fondé acting or refraining from acting hereunder or
under any other Loan Document in accordance with the instructions of Requisite
Lenders or all affected Lenders, as applicable.
49
|
9.3
|
Agent's Reliance, Etc. |
Neither
an Agent nor any of its Affiliates nor any of their respective Related Parties
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or the other Loan Documents, except for
damages caused by its or their own gross negligence or wilful misconduct.
Without limiting the generality of the foregoing, an Agent: (a) may treat the
payee of any Note as the holder thereof until Administrative Agent receives
written notice of the assignment or transfer thereof signed by such payee and
in
form reasonably satisfactory to Administrative Agent; (b) may consult with
legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts;
(c)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations made in or
in
connection with this Agreement or the other Loan Documents; (d) shall not have
any duty to ascertain or to inquire as to the performance or observance of
any
of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of Borrower or its Subsidiaries or to inspect the
Collateral (including the books and records) of Borrower or its Subsidiaries;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of
this
Agreement or the other Loan Documents by relying or acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopy,
telegram, cable or telex) believed by it to be genuine and signed or sent by
the
proper party or parties.
|
9.4
|
Agents
Engaging in Business
|
Agents
and their respective Affiliates may lend money to, invest in, and generally
engage in any kind of business with Borrower, any of its Affiliates and any
Person who may do business with or own securities of Borrower or any of its
Affiliates, all as if they were not Agents and without any
duty to account therefor to Lenders. Agents and their respective Affiliates
may
accept fees and other consideration from Borrower or its Subsidiaries for
services in connection with this Agreement or otherwise without having to
account for the same to Lenders.
|
9.5
|
Lender
Credit Decision.
|
Each
Lender acknowledges that it has, independently and without reliance upon any
Agent or any other Lender and based on the Financial Statements referred to
in
Section 3.4(1) and such other documents and information as it has deemed
appropriate, made its own credit and financial analysis of Borrower and its
Subsidiaries and its own decision to enter into this Agreement. Each Lender
also
acknowledges that it will, independently and without reliance upon any Agent
or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or
not taking action under this Agreement. Each Lender acknowledges the potential
conflict of interest of each other Lender as a result of Lenders holding
disproportionate interests in the Loans, and expressly consents to, and waives
any claim based upon, such conflict of interest.
50
|
9.6
|
Indemnification.
|
Each
Lender agrees to indemnify each Agent (to the extent not reimbursed by Borrower
and without limiting the obligations of Borrower hereunder), ratably according
to its Pro Rata Share, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against such Agent in any way relating to or arising out of
this
Agreement or any other Loan Document or any action taken or omitted to be taken
by such Agent in connection therewith (for greater certainty, the indemnity
in
this Section 9.6 in favour of each Agent includes an indemnity for any
acts, decisions or documents completed, made or executed, as the case may be,
in
its capacity as power of attorney and the "Fondé de Pouvoir" as set out
in Section 9.2(1)); provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
an
Agent's gross negligence or wilful misconduct. Without limiting the foregoing,
each Lender agrees to reimburse each Agent promptly upon demand for its Pro
Rata
Share of any out-of-pocket expenses (including reasonable counsel fees) incurred
by such Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect
of
rights or responsibilities under, this Agreement and each other Loan Document,
to the extent that such Agent is not reimbursed for such expenses by
Borrower.
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9.7
|
Successor
Agent.
|
An
Agent
may resign at any time by giving not less than thirty (30) days' prior written
notice thereof to Lenders and Borrower. Upon any such resignation, Requisite
Lenders shall have the right to appoint a successor Agent. If no successor
Agent
shall have been so appointed by Requisite Lenders and shall have accepted such
appointment within thirty (30) days after the resigning Agent's giving notice
of
resignation, then the resigning Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a Lender, if a Lender is willing to accept
such
appointment, or otherwise shall be a commercial bank or financial institution
or
a subsidiary of a commercial bank or financial institution if such commercial
bank or financial institution is organized under the laws of Canada or any
province thereof and has a combined capital and surplus of at least
Cdn$300,000,000. If no successor Agent has been appointed pursuant to the
foregoing within thirty (30) days after the date such notice of resignation
was
given by the resigning Agent, such resignation shall become effective and
Requisite Lenders shall thereafter perform all the duties of such Agent
hereunder until such time, if any, as Requisite Lenders appoint a successor
Agent as provided above. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Agent. Upon the earlier of the acceptance of any appointment as Agent hereunder
by a successor Agent or the effective date of the resigning Agent's resignation,
the resigning Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents, except that any indemnity rights
or
other rights in favour of such resigning Agent shall continue. After any
resigning Agent's resignation hereunder, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by
it
while it was acting as Agent under this Agreement and the other Loan
Documents.
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9.8
|
Setoff
and Sharing of Payments.
|
In
addition to any rights now or hereafter granted under applicable law and not
by
way of limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default and subject to Section 1.7 and
Section 9.9(5), each Lender is hereby authorized at any time or from time
to time, without prior notice to Borrower or to any Person other than
Administrative Agent, any such notice being hereby expressly waived, to offset
and to appropriate and to apply any and all balances held by it at
51
any
of
its offices for the account of Borrower or its Subsidiaries (regardless of
whether such balances are then due to Borrower or its Subsidiaries ) and any
other properties or assets at any time held or owing by that Lender to or for
the credit or for the account of Borrower against and on account of any of
the
Obligations that are not paid when due; provided that such Lender
exercising such offset rights shall give notice thereof to Borrower and the
Administrative Agent promptly after exercising such rights. Any Lender
exercising a right of setoff or otherwise receiving any payment on account
of
the Obligations related and arising with respect to the Loans in excess of
its
Pro Rata Share thereof shall purchase for cash (and the other applicable Lenders
or holders of the Loans shall sell) such participations in each such other
Lender's or holder's Pro Rata Share of such Obligations as would be necessary
to
cause such Lender to share the amount so offset or otherwise received with
each
other Lender or holder in accordance with their respective Pro Rata Shares
and
with Section 1.7 (other than offset rights exercised by any Lender with
respect to Sections 1.9, 1.10 or 1.11). Borrower agrees, to
the fullest extent permitted by law, that (a) any Lender may exercise its right
to offset with respect to amounts in excess of its Pro Rata Share, as the case
may be, of the Obligations and may, sell participations in such amounts so
offset to other Lenders and holders and (b) any Lender so purchasing a
participation in the Loans made or other Obligations held by other Lenders
or
holders may exercise all rights of offset, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender
or
holder were a direct holder of the Loans and the other Obligations in the amount
of such participation. Notwithstanding the foregoing, if all or any portion
of
the offset amount or payment otherwise received is thereafter recovered from
Lender that has exercised the right of offset, the purchase of participations
by
that Lender shall be rescinded and the purchase price restored without
interest.
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9.9
|
Advances;
Payments; Non-Funding Lenders; Information; Remedial
Actions.
|
|
(1)
|
Advances;
Payments.
|
(a) Administrative
Agent shall notify all Supplemental Lenders promptly after receipt of a
Supplemental Loan Draw Request and in any event prior to 1:00 p.m. (Toronto
time) on the date such Supplemental Loan Draw Request is deemed received, by
telecopy, telephone or other similar form of transmission. Each Supplemental
Lender shall make the amount of such Supplemental Lender's Supplemental Loan
Pro
Rata Share of such Supplemental Loan available to Administrative Agent in same
day funds by wire transfer to Administrative Agent's account as set forth in
Annex C not later than 3:00 p.m. (Toronto time) on the requested funding
date; provided that a Supplemental Lender shall have two (2)
Business Days grace period from such requested funding date to make such amount
available to Administrative Agent in the event that such Supplemental Lender,
acting in good faith, did not fund such amount as a direct result of
administrative error or delay. After receipt of such wire transfers (or, in
the
Administrative Agent's sole discretion, before receipt of such wire transfers),
subject to the terms hereof, Administrative Agent shall make the requested
Supplemental Loan to Borrower. All payments by each Supplemental Lender shall
be
made without setoff, counterclaim or deduction of any kind.
(b) Not
less than once during each calendar month or more frequently at Administrative
Agent's election (each, a "Settlement Date"), Administrative
Agent shall advise each Lender by telecopy of the amount of such Lender's Pro
Rata Share of principal, interest and Fees paid for the benefit of Lenders
with
respect to each Loan. Provided that a Lender has funded all advances and
payments (other than in respect of an advance or payment not required to be
funded or made by all Lenders as a result of Requisite Lenders determining
in
their sole discretion that the conditions precedent in Section 2.1 have
not been satisfied) required to be made by it and purchased all participations
required to be purchased by it under this Agreement and the other Loan Documents
as of such Settlement Date, Administrative Agent shall pay to such Lender such
Lender's Pro Rata Share of principal, interest and Fees paid by Borrower since
the previous Settlement Date for the benefit of such Lender on the Loans held
by
it. To the extent that any Lender (a "Non-Funding Lender") has
failed to fund all such advances or payments or failed to
52
fund
the
purchase of all such participations, Administrative Agent shall be entitled
to
set off the funding short-fall against that Non-Funding Lender's Pro Rata Share
of all payments received from Borrower. Such payments shall be made
by wire transfer to such Lender's account (as specified by such Lender in
Annex C or the applicable Assignment Agreement) not later than 2:00 p.m.
(Toronto time) on the next Business Day following each Settlement
Date.
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(2)
|
Availability
of Supplemental Lender's Pro Rata
Share.
|
Administrative
Agent may assume that
each Supplemental Lender will make its Supplemental Loan Pro Rata Share of
each
Supplemental Loan available to Administrative Agent on each funding date. If
such Supplemental Loan Pro Rata Share is not, in fact, paid to Administrative
Agent by such Supplemental Lender when due, Administrative Agent will be
entitled to recover such amount on demand from such Supplemental Lender without
setoff, counterclaim or deduction of any kind. Nothing in this Section
9.9(2) or elsewhere in this Agreement or the other Loan Documents shall be
deemed to require Administrative Agent to advance funds on behalf of any
Supplemental Lender or to relieve any Supplemental Lender from its obligation
to
fulfill its Supplemental Loan Commitment or to prejudice any rights that
Borrower may have against any Supplemental Lender as a result of any default
by
such Supplemental Lender hereunder. To the extent that Administrative Agent
advances funds to Borrower on behalf of any Supplemental Lender and is not
reimbursed therefor on the same Business Day as such advance is made,
Administrative Agent shall be entitled to retain for its account all interest
accrued on, and Fees with respect to, such advance until reimbursed by the
applicable Supplemental Lender.
|
(3)
|
Return
of Payments.
|
(a) If
Administrative Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by
Administrative Agent from Borrower and such related payment is not received
by
Administrative Agent, then Administrative Agent will be entitled to recover
such
amount from such Lender on demand without setoff, counterclaim or deduction
of
any kind.
(b) If
Administrative Agent determines at any time that any amount received by
Administrative Agent under this Agreement must be returned to Borrower or paid
to any other Person pursuant to any Insolvency Law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other
Loan
Document, Administrative Agent will not be required to distribute any portion
thereof to any Lender. In addition, each Lender will repay to Administrative
Agent on demand any portion of such amount that Administrative Agent has
distributed to such Lender, together with interest at such rate, if any, as
Administrative Agent is required to pay to Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.
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(4)
|
Non-Funding
Lenders.
|
(a) No
Responsibility for Failure to Fund or Commit. The failure of any Non-Funding
Lender to make any advance of funds or any payment or a commitment or purchase
a
participation required of it hereunder, on the date specified therefor shall
not
relieve any other Lender (each such other Lender, an "Other
Lender") of its obligations to make an advance of funds or any payment
or a commitment or purchase a participation required of it on such date, but
neither any Other Lender nor Administrative Agent shall be responsible for
the
failure of any Non-Funding Lender to make an advance of funds or any payment
or
a commitment or purchase a participation required of it hereunder.
(b) Voting
Rights. Notwithstanding anything set forth herein to the
contrary, a Non-Funding Lender shall not have any voting or consent rights
under
or with respect to any Loan Document or
53
constitute
a "Lender" (or be included in the calculation of
"Requisite Lenders" hereunder) for any voting or consent rights
under or with respect to any Loan Document.
(c) Sale
or Assumption of Loans of Non-Funding Lender.
A
Non-Funding Lender's Loans and Supplemental Loan Commitment may be sold and
assigned as follows:
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|
(1)
|
firstly,
any Other Lender shall have the right (but shall have no obligation)
to
purchase from any such Non-Funding Lender, and such Non-Funding Lender
agrees that it shall, at such request, sell and assign to such Other
Lender, such Other Lender's Pro Rata Share of such Non-Funding Lender's
Loans and Supplemental Loan Commitment (and the Pro Rata Share of
any
Other Lender therein not exercising its rights hereunder or other
applicable amount) for an aggregate amount equal to such Non-Funding
Lender's Pro Rata Share of the principal balance of the Loans and
all
accrued interest and Fees with respect thereto through the date of
sale,
such sale and assignment to be consummated pursuant to an executed
Assignment Agreement; and
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|
|
(2)
|
secondly,
at the request of Borrower or Requisite Lenders, a Person acceptable
to
Requisite Lenders (in their sole discretion) shall have the right
(but
shall have no obligation) to purchase from any such Non-Funding Lender,
and such Non-Funding Lender agrees that it shall, at such request,
sell
and assign to such Person, the Loans and Supplemental Loan Commitment
of
that Non-Funding Lender (to the extent not sold or assigned pursuant
to
Section 9.9(4)(c)(1) above) for an amount equal to the principal
balance of all Loans held by such Non-Funding Lender and all accrued
interest and Fees with respect thereto through the date of sale (to
the
extent not sold or assigned pursuant to Section 9.9(4)(c)(1)
above), such sale and assignment to be consummated pursuant to an
executed
Assignment Agreement.
|
(5) Dissemination
of Information. Administrative Agent or Collateral Agent, as the
case may be, shall provide each Lender (to the extent not already received
by
such Lender) with copies of all documents delivered to such Agent by or on
behalf of Borrower or its Subsidiaries hereunder including the Financial
Statements referred to in Annex B hereto, any notice of Default or Event
of Default received by such Agent from, or delivered by such Agent to, Borrower,
with notice of any Event of Default of which such Agent has actually become
aware and with notice of any action taken by such Agent following any Event
of
Default; provided that such Agent shall not be liable to any
Lender for any failure to do so, except to the extent that such failure is
attributable to such Agent's gross negligence or wilful misconduct.
(6) Remedial
Actions. Anything in this Agreement to the contrary notwithstanding, no
Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Loan Documents (including exercising any rights of
set-off) without the prior written consent of Administrative Agent (which
consent shall not be unreasonably withheld or delayed) and Requisite Lenders.
Nothing in this Section 9.9(6) shall prevent any Lender from converting any
Convertible Term Loans pursuant to Section 1.1(7) or otherwise create any
restrictions, agreements or understandings with respect to any equity securities
beneficially owned by any Lender.
54
SECTION
10
SUCCESSORS
AND ASSIGNS
|
10.1
|
Successors
and Assigns.
|
This
Agreement and the other Loan Documents shall be binding on and shall inure
to
the benefit of Borrower, Agents, Lenders and their respective successors and
assigns (including, in the case of Borrower, a debtor-in-possession on behalf
of
Borrower), except as otherwise provided herein or therein. Borrower
shall not assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder or under any of the other Loan
Documents without the prior express written consent of Requisite Lenders. Any
such purported assignment, transfer, hypothecation or other conveyance by
Borrower without the prior express written consent of Requisite Lenders shall
be
void. The terms and provisions of this Agreement are for the purpose of defining
the relative rights and obligations of Borrower, Agents and Lenders with respect
to the transactions contemplated hereby and no Person shall be a third party
beneficiary of any of the terms and provisions of this Agreement or any of
the
other Loan Documents.
SECTION
11
MISCELLANEOUS
|
11.1
|
Complete
Agreement; Modification of
Agreement.
|
The
Loan
Documents constitute the complete agreement between the parties with respect
to
the subject matter thereof and may not be modified, altered or amended except
as
set forth in Section 11.2 below and, in respect of the Convertible Term
Loans, subject to the approval of the Exchange where such approval is required
pursuant to the TSX Company Manual. Any letter of interest, commitment letter
and fee letter between Borrower and Lenders or any of their respective
Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
|
11.2
|
Amendments
and Waivers.
|
(1) No
Amendments and Waivers without Requisite Lenders. Except for actions
expressly permitted to be taken by an Agent and subject to paragraph (2) and
(3) below, no amendment, modification, termination or waiver of any
provision of this Agreement or any other Loan Document, or any consent to any
departure by Borrower or its Subsidiaries therefrom, shall in any event be
effective unless the same shall be in writing and signed by Borrower and
Administrative Agent; provided that Administrative Agent has
received prior written consent and/or instructions (including by telecopy,
facsimile transmission or other direct written electronic means) to sign any
such amendment, modification, termination or waiver from Requisite
Lenders.
(2) Affected
Lender Consent. Except as otherwise expressly provided in this Agreement, no
amendment, modification, termination or waiver shall, unless in writing and
signed by Administrative Agent and each Lender directly affected
thereby:
(a) increase
the principal amount of any Lender's Loan or Supplemental Loan Commitment (which
action shall be deemed only to affect those Lenders whose Loans or Supplemental
Loan Commitment are increased);
55
(b) reduce
the principal of, rate of interest on or Fees payable with respect to any Loans
or other Obligations of any affected Lender;
(c) extend
any scheduled payment date or final maturity date of the principal amount of
any
Loans or any other Obligation of any affected Lender;
(d) waive,
forgive, defer, extend or postpone any payment of interest or Fees as to any
affected Lender;
(e) release,
or permit Borrower or any of its Subsidiaries to sell, or otherwise dispose
of,
any Collateral (which action shall be deemed to directly affect all
Lenders);
(f) change
the percentage of the aggregate unpaid principal amount of the Loans that shall
be required for Lenders or any of them to take any action hereunder;
and
(g) amend
or waive Section 1.2, Section 1.7, Section 2.2, Section
11.2, Section 11.3 or the definition of the term "Requisite Lenders",
insofar as such definition affect the substance of this Section
11.2.
(3) Tranche-Specific
Consent. In addition to the other requirements of this Section 11.2,
no amendment, modification, termination or waiver which would be materially
prejudicial to a Tranche of Loan, and which would not also be materially
prejudicial to any other Tranche of Loan outstanding as of such date in a
similar manner, shall be effective unless it has been consented to in writing
by
Lenders having 66 ⅔% of such Tranche of Loan.
(4) Agent
Consent. No amendment, modification, termination or waiver affecting the
rights or duties of any Agent under this Agreement or any other Loan Document
shall be effective unless in writing and signed by such Agent, in addition
to
Lenders required hereinabove to take such action. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document.
(5) Effect
of Amendments and Waivers. Each amendment, modification, termination or
waiver shall be effective only in the specific instance and for the specific
purpose for which it was given. No amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written
concurrence of the holder of such note. No notice to or demand on Borrower
in
any case shall entitle Borrower to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this Section 11.2 shall be binding
upon each holder of the Notes at the time outstanding and each future holder
of
the such notes.
(6) Non-Consenting
Lenders. If, in connection with any proposed amendment, modification, waiver
or termination (a "Proposed Change") requiring the consent of
all affected Lenders or of Lenders holding a Tranche of Loans pursuant to
Section 11.2(3), the consent of Requisite Lenders is obtained, but the
consent of other Lenders whose consent is required is not obtained (any such
Lender whose consent is not obtained being referred to as
"Non-Consenting Lender") then, at Borrower's or Requisite
Lenders' request, a Person acceptable to Requisite Lenders (in their sole
discretion), shall have the right (but without any obligation) to purchase
from
such Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall,
upon such request, sell and assign to such Person, all of the Loans and the
Supplemental Loan Commitment of such Non-Consenting Lender for an amount equal
to the principal balance of all Loans held by such Non-Consenting Lender and
all
accrued interest and Fees with respect
56
thereto
through the date of sale, such sale and assignment to be consummated pursuant
to
an executed Assignment Agreement, provided that no Payout Fees shall be
payable in connection with such sale.
(7) Releases.
Upon indefeasible payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), the Lenders having no
further obligations to lend hereunder and a release of all claims against all
Agents and Lenders, and so long as no suits, actions proceedings, or claims
are
pending or threatened against any Indemnified Person asserting any damages,
losses or liabilities that are Indemnified Liabilities, Administrative Agent
shall deliver to Borrower financing change statements, mortgage releases and
other documents necessary or appropriate to evidence the termination of the
Liens securing payment of the Obligations.
|
11.3
|
Fees
and Expenses.
|
Borrower
shall reimburse each of the Agents and Lenders for all out-of-pocket expenses
incurred in connection with the preparation of the Loan Documents (including
the
reasonable fees and expenses of its counsel and the fees and expenses of all
other advisors, consultants and auditors retained in connection with the Loan
Documents and advice in connection therewith). Borrower shall reimburse each
of
Agents and Lenders for all fees, costs and expenses (including the reasonable
fees, costs and expenses of counsel or other advisors (including environmental
and management consultants and appraisers) for advice, assistance, or other
representation) in connection with:
(1) the
forwarding to Borrower or any other Person on behalf of Borrower by
Administrative Agent of the proceeds of the Loans;
(2) any
amendment, modification or waiver of, or consent with respect to, any of the
Loan Documents or advice in connection with the syndication and administration
of the Loans made pursuant hereto or rights hereunder or
thereunder;
(3) any
litigation, contest, dispute, suit, proceeding or action (whether instituted
by
any Agent, any Lender, Borrower or any other Person) in any way relating to
the
Collateral, any of the Loan Documents or any other agreement to be executed
or
delivered in connection therewith or herewith, whether as party, witness, or
otherwise, including any litigation, contest, dispute, suit, case, proceeding
or
action, and any appeal or review thereof, in connection with a case commenced
by
or against Borrower or any other Person that may be obligated to any Agent
or
Lender by virtue of the Loan Documents including any such litigation, contest,
dispute, suit, proceeding or action arising in connection with any work-out
or
restructuring of the Obligations during the pendency of one or more Events
of
Default;
(4) any
attempt to enforce any remedies of any Agent or Lender against Borrower or
any
other Person that may be obligated to any Agent or Lender by virtue of any
of
the Loan Documents including any such attempt to enforce any such remedies
in
the course of any work-out or restructuring of the Obligations during the
pendency of one or more Events of Default;
(5) any
work-out or restructuring of the Obligations during the pendency of one or
more
Events of Default;
(6) efforts
to (a) monitor the Loans or any of the other Obligations, (b) evaluate, observe
or assess Borrower, its Subsidiaries or their affairs, and (c) verify, protect,
evaluate, assess, appraise, collect, sell, liquidate or otherwise dispose of
any
of the Collateral;
including,
as to each of paragraphs (1) through (6) above, all reasonable
legal counsels' and all other professional and service providers' fees arising
from such services, including those in connection with any
57
appellate
proceedings and all expenses, costs, charges and other fees incurred by such
counsel and others in any way or respect arising in connection with or relating
to any of the events or actions described in this Section 11.3 shall be
payable, on demand, by Borrower to Administrative Agent. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
fees, costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court
costs
and expenses; photocopying and duplication expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express charges; telegram
or
telecopy charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal
or
other advisory services. Notwithstanding the foregoing, in the case of
reimbursement of legal counsel for Lenders, such reimbursement shall be limited
to one lead legal counsel and one local legal counsel in each applicable
jurisdiction for Lenders except as otherwise consented to in writing by
Requisite Lenders.
|
11.4
|
No
Waiver.
|
Any
Agent's or Lender's failure, at any time or times, to require strict performance
by Borrower or any other Person of any provision of this Agreement and any
of
the other Loan Documents shall not waive, affect or diminish any right of such
Agent or Lender thereafter to demand strict compliance and performance
therewith. Any suspension or waiver of an Event of Default shall not suspend,
waive or affect any other Event of Default whether the same is prior or
subsequent thereto and whether the same or of a different type. None of the
undertakings, agreements, warranties, covenants and representations of Borrower
or any of its Subsidiaries contained in this Agreement or any of the other
Loan
Documents and no Default or Event of Default by Borrower shall be deemed to
have
been suspended or waived by any Agent or Lender, unless such waiver or
suspension is by an instrument in writing signed by an officer of or other
authorized employee of such Agent or Lender and directed to Borrower specifying
such suspension or waiver.
|
11.5
|
Remedies.
|
Each
Agent's and Lender's rights and remedies under this Agreement and the other
Loan
Documents shall be cumulative and nonexclusive of any other rights and remedies
which such Agent and Lender may have under any other agreement, including the
other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
|
11.6
|
Severability.
|
Wherever
possible, each provision of this Agreement and the other Loan Documents shall
be
interpreted in such a manner as to be effective and valid under applicable
law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
|
11.7
|
Conflict
of Terms.
|
Except
as
otherwise provided in this Agreement or any of the other Loan Documents by
specific reference to the applicable provisions of this Agreement, if any
provision contained in this Agreement is in conflict with, or inconsistent
with,
any provision in any of the other Loan Documents, the provision contained in
this Agreement shall govern and control.
58
|
11.8
|
Confidentiality.
|
Subject
to Section 5.14, each Agent and Lender agrees to use commercially
reasonable efforts (equivalent to the efforts each Agent and Lender applies
to
maintain the confidentiality of its own confidential information) to maintain
as
confidential all confidential information provided to it by Borrower and
designated as confidential, except that each Agent and Lender may disclose
such
information (a) to Related Parties employed or engaged by such Agent or Lender
in evaluating, approving, structuring or administering the Loans and the
Supplemental Loan Commitment; (b) to any bona fide assignee or
participant or potential assignee or participant that has agreed to comply
with
the covenant contained in this Section 11.8 (and any such bona
fide assignee or participant or potential assignee or participant may
disclose such information to Related Parties employed or engaged by them as
described in paragraph (a) above); (c) as required or requested by any
Governmental Authority or reasonably believed by such Agent or Lender to be
compelled by any court decree, subpoena or legal or administrative order or
process; provided that, such Agent or Lender shall make reasonable
efforts to notify Borrower thereof before complying therewith; (d) as, on the
advice of such Agent's or Lender's counsel, required by law; (e) in connection
with the exercise of any right or remedy under the Loan Documents or in
connection with any Litigation to which such Agent or Lender is a party; or
(f)
which ceases to be confidential through no fault of such Agent or
Lender.
|
11.9
|
GOVERNING
LAW.
|
EXCEPT
AS
OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN
DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN THAT PROVINCE AND ANY LAWS APPLICABLE THEREIN, EXCEPT
SECTION 9.2(3) AND SECTION 9.2(4), WHICH SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF
QUÉBEC APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT PROVINCE AND ANY LAWS
APPLICABLE THEREIN. BORROWER HEREBY CONSENTS AND AGREES THAT THE COURTS OF
THE
PROVINCE OF ONTARIO SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE
ANY CLAIMS OR DISPUTES BETWEEN BORROWER, ANY AGENT OR LENDER PERTAINING TO
THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF
OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ANY AGENT, THE FONDÉ OR LENDER
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER. BORROWER EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS
DEEMED APPROPRIATE BY SUCH COURT. BORROWER HEREBY WAIVES PERSONAL SERVICE OF
THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH
IN
ANNEX C OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE
59
DEEMED
COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF OR THREE (3)
DAYS AFTER DEPOSIT WITH CANADA POST, PROPER POSTAGE PREPAID.
|
11.10
|
Notices.
|
Except
as
otherwise provided herein, whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall
or
may be given to or served upon any of the parties by any other parties, or
whenever any of the parties desires to give or serve upon any other parties
any
communication with respect to this Agreement, each such notice, demand, request,
consent, approval, declaration or other communication shall be in writing and
shall be deemed to have been validly served, given or delivered (1) upon the
earlier of actual receipt and three (3) Business Days after deposit with Canada
Post or US Mail, registered mail, return receipt requested, with proper postage
prepaid, (2) upon transmission, when sent by telecopy or other similar facsimile
transmission (with such telecopy or facsimile promptly confirmed by delivery
of
a copy by personal delivery or Canada Post or US Mail as otherwise provided
in
this Section 11.10), (3) one (1) Business Day after deposit with a
reputable overnight courier with all charges prepaid or (4) when delivered,
if
hand-delivered by messenger, all of which shall be addressed to the party to
be
notified and sent to the address or facsimile number indicated on Annex C
or to such other address (or facsimile number) as may be substituted by notice
given as herein provided. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice. Failure or
delay
in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than Borrower or
Administrative Agent) designated on Annex C to receive copies shall in no
way adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
|
11.11
|
Section
Titles.
|
The
Section titles and Table of Contents contained in this Agreement are and shall
be without substantive meaning or content of any kind whatsoever and are not
a
part of the agreement between the parties hereto.
|
11.12
|
Counterparts.
|
This
Agreement may be executed in any number of separate facsimile or original
counterparts, each of which shall collectively and separately constitute one
agreement.
|
11.13
|
Press
Releases.
|
Borrower
agrees that neither it nor its Affiliates or Related Parties will in the future
issue any press releases or other public disclosure using the name of any Agent
or Lender or its Affiliates or referring to this Agreement or the other Loan
Documents without at least two (2) Business Days' prior written notice to
Administrative Agent and without the prior written consent of Administrative
Agent unless (and only to the extent that) Borrower or its Affiliates is
required to do so under law and then, in any event, Borrower or such Affiliate
will consult with Administrative Agent before issuing such press release or
other public disclosure. Borrower consents to, and agrees to reimburse
Administrative Agent for the cost and expense of, the publication by
Administrative Agent of a tombstone or similar advertising material relating
to
the financing transactions contemplated by this Agreement.
60
|
11.14
|
Reinstatement.
|
This
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against Borrower or any of its Subsidiaries
for liquidation or reorganization, should Borrower or any of its Subsidiaries
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of Borrower's or any of its Subsidiaries' property or assets,
and shall continue to be effective or to be reinstated, as the case may be,
if
at any time payment and performance of the Obligations, or any part thereof,
is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise
be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall
be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
|
11.15
|
Advice
of Counsel.
|
Each
of
the parties represents to each other party hereto that it has discussed this
Agreement and, specifically, the provisions of Section 11.9, with its
counsel.
|
11.16
|
No
Strict Construction.
|
The
parties hereto have participated jointly in the negotiation and drafting of
this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favouring or
disfavouring any party by virtue of the authorship of any provisions of this
Agreement.
|
11.17
|
Dollar
References.
|
Unless
otherwise specified, all references to dollar amounts in this Agreement shall
mean Canadian Dollars.
|
11.18
|
Judgment
Currency.
|
(1) If,
for the purpose of obtaining or enforcing judgment against Borrower or any
of
its Subsidiaries in any court in any jurisdiction, it becomes necessary to
convert into any other currency (such other currency being hereinafter in this
Section 11.18 referred to as the "Judgment Currency") an
amount due under any Loan Document in any currency (the "Obligation
Currency") other than the Judgment Currency, the conversion shall be
made at the rate of exchange prevailing on the Business Day immediately
preceding the date of actual payment of the amount due, in the case of any
proceeding in the courts of the Province of Ontario or in the courts of any
other jurisdiction that will give effect to such conversion being made on such
date, or the date on which the judgment is given, in the case of any proceeding
in the courts of any other jurisdiction (the applicable date as of which such
conversion is made pursuant to this Section 11.18 being hereinafter in
this Section 11.18 referred to as the "Judgment Conversion
Date").
(2) If,
in the case of any proceeding in the court of any jurisdiction referred to
in
Section 11.18(1), there is a change in the rate of exchange prevailing
between the Judgment Conversion Date and the date of actual receipt of the
amount due in immediately available funds, Borrower shall pay such additional
amount (if any, but in any event not a lesser amount) as may be necessary to
ensure that the amount actually received in the Judgment Currency, when
converted at the rate of exchange prevailing on the date
61
of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of the Judgment Currency stipulated in the
judgment or judicial order at the rate of exchange prevailing on the Judgment
Conversion Date. Any amount due from Borrower under Section 11.18(2)
shall be due as a separate debt and shall not be affected by judgment being
obtained for any other amounts due under or in respect of any of the Loan
Documents.
(3) The
term "rate of exchange" in this Section 11.18 means the rate of exchange
at which Agent would, on the relevant date at or about 12:00 noon (Toronto
time), be prepared to sell the Obligation Currency against the Judgment
Currency.
|
11.19
|
Time
of Day.
|
Unless
otherwise specified, any reference to a time of day or date means local time
or
date in the City of Toronto, Province of Ontario.
|
11.20
|
Formal
Date.
|
Notwithstanding
the date of execution hereof, this Agreement may be referred to as bearing
formal date June 27, 2007.
|
11.21
|
Amended
and Restated Agreement.
|
(a) This
Agreement, effective as of the
Closing Date, is an amendment and restatement of the Original Credit Agreement,
it being acknowledged and agreed that as of the Closing Date all obligations
outstanding under or in connection with the Original Credit Agreement and any
of
the other Loan Documents (such obligations, collectively, the “Original
Obligations”)
constitute obligations under this Agreement. This Agreement is in no way
intended to constitute a novation of the Original Credit Agreement or the
Original Obligations. With respect to (i) any date or time period occurring
and
ending prior to the Closing Date, the Original Loan Agreement and the other
Loan
Documents shall govern the respective rights and obligations of any party or
parties hereto also party thereto and shall for such purposes remain in full
force and effect; and (ii) any date or time period occurring or ending on or
after the Closing Date, the rights and obligations of the parties hereto shall
be governed by this Agreement (including, without limitation, the exhibits
and
schedules hereto) and the other Loan Documents. From and after the Closing
Date,
any reference to the Original Credit Agreement in any of the other Loan
Documents executed or issued by and/or delivered to any one or more parties
hereto pursuant to or in connection therewith shall be deemed to be a reference
to this Agreement, and the provisions of this Agreement shall prevail in the
event of any conflict or inconsistency between such provisions and those of
the
Original Loan Agreement.
(b) Without
limiting the generality of
Section
11.22(a), the parties
agree that:
(i) all
Original Obligations outstanding as
at the Closing Date shall, as of the Closing Date, be deemed to be obligations
outstanding hereunder and subject to the terms of this Agreement,
and
(ii) each
of the other Loan Documents (other
than the Original Credit Agreement) is hereby ratified and confirmed in all
respects and shall continue in full force and effect, unamended, except that
(A)
any references therein to the Original Credit Agreement shall be deemed to
refer
to this Agreement, and (B) any security granted or guarantee given pursuant
to
or in connection with the Original Credit Agreement and the other Loan Documents
shall continue to secure or guarantee, as applicable, the obligations of the
Borrowers arising pursuant to or in connection
with this Agreement
(including all such obligations arising initially pursuant to or in connection
with the Original Credit Agreement and the other Loan
Documents).
62
[SIGNATURE
PAGES FOLLOW]
63
IN
WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.
|
ADMINISTRATIVE
AGENT AND COLLATERAL AGENT:
BNY
TRUST COMPANY OF CANADA
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
|
|
|
Name:
|
||
|
Title:
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
INITIAL
LENDER, JUNE 2007 LENDER AND CONVERTIBLE TERM A LOAN
LENDER:
B
IV CAPITAL PARTNERS, L.P.
By:
GP Capital IV, LLC, its General Partner
By:
DDJ Capital Management,
LLC,Manager
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
|
Title:
|
Member | |
|
INITIAL
LENDER, JUNE 2007 LENDER AND CONVERTIBLE TERM A LOAN
LENDER:
GMAM
INVESTMENT FUNDS TRUST II, for the account of the Promark Alternative
High
Yield Bond Fund (Account No. 7M2E)
By:
DDJ Capital Management, LLC, on behalf of GMAM Investment Funds
Trust II,
for the account of Promark Alternative High Yield Bond Fund, in
its
capacity as investment manager
|
||
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By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
|
Title:
|
Member | |
|
INITIAL
LENDER, JUNE 2007 LENDER AND CONVERTIBLE TERM A LOAN
LENDER:
GMAM
INVESTMENT FUNDS TRUST II, for the account of Promark Alternative
High
Yield Bond Fund (Account No. 7MWD)
By:
DDJ Capital Management, LLC,
on
behalf of GMAM Investment Funds Trust II, for the account of
Promark High
Yield Bond Fund, in its capacity as investment
manager
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
|
Title:
|
Member | |
|
INITIAL
LENDER:
DDJ
HIGH YIELD FUND
By:
DDJ Capital Management, LLC, its
attorney-in-fact
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
|
Title:
|
Member | |
|
INITIAL
LENDER, JUNE 2007 LENDER AND CONVERTIBLE TERM A LOAN
LENDER:
DDJ
OCTOBER FUND ONSHORE
FEEDER,
LIMITED PARTNERSHIP
By:
October G.P., LLC, its general partner
By:
DDJ Capital Management, LLC, its
Manager
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
|
Title:
|
Member | |
|
INITIAL
LENDER:
OCTOBER
OS INVESTMENT SUB I, LTD. By: DDJ Capital Management, LLC,
in its capacity
as Investment
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
|
Title:
|
Member | |
|
INITIAL
LENDER, JUNE 2007 LENDER AND CONVERTIBLE TERM A LOAN
LENDER:
OCTOBER
OS INVESTMENT SUB II, LTD. By: DDJ Capital Management, LLC,
in its
capacity as Investment
Manager
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
|
Title:
|
Member | |
|
INITIAL
LENDER AND CONVERTIBLE TERM A LOAN LENDER:
DDJ/ONTARIO
OS INVESTMENT SUB I, LTD.
By:
DDJ Capital Management, LLC, in its capacity as Investment
Manager
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
|
Title:
|
Member | |
|
JUNE
2007 LENDER:
DDJ/ONTARIO
OS INVESTMENT SUB II, LTD.
By:
DDJ Capital Management, LLC, in its capacity as Investment
Manager
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
|
Title:
|
Member | |
|
INITIAL
LENDER, JUNE 2007 LENDER AND CONVERTIBLE A TERM LOAN
LENDER:
GREYWOLF
LOAN PARTICIPATIONLLC
|
||
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By:
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/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name:
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Title:
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By:
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Name:
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| Title: | ||
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INITIAL
LENDER, JUNE 2007 LENDER AND SUPPLEMENTAL
LENDER:
▇▇▇▇▇▇
▇▇▇▇▇▇▇ PRINCIPAL STRATEGIES, INC.
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By:
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/s/
▇▇▇▇ ▇▇▇▇
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Name:
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▇▇▇▇ ▇▇▇▇ | |
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Title:
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Vice President | |
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CONVERTIBLE
TERM A LOAN LENDER:
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & CO. INTERNATIONAL plc
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By:
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/s/
▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name:
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▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
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Title:
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Managing Director | |
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CONVERTIBLE
TERM B LOAN LENDERS:
GUARDIAN
CAPITAL L.P., on behalf of ScotiaMcLeod Pinnacle High
Yield, GGOF Canadian
High Yield Bond Fund, Vector High Yield Bond Fund and
GGOF Diversified
Monthly Income
Fund
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By:
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/s/
▇▇▇▇ ▇▇▇▇▇▇▇
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Name:
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▇▇▇▇ ▇▇▇▇▇▇▇ | |
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Title:
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Controller | |
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By:
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/s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |
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Name:
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C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |
| Title: | Senior Vice-President, Compliance & Secretary | |
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CONVERTIBLE
TERM B LOAN LENDER AND CONVERTIBLE TERM C LOAN
LENDER:
POLAR
SECURITIES INC., on behalf of
North
Pole Capital Master
Fund
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By:
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/s/
▇▇▇▇▇▇ ▇▇▇▇
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Name:
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▇▇▇▇▇▇ ▇▇▇▇ | |
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Title:
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CFO | |
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By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
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Name:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
| Title: | CEO | |
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JUNE
2007 LENDER:
THALES
HOLDINGS
LTD.
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By:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
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Name:
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▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Title: | Portfolio Manager | |
| By: | ||
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Name:
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||
| Title: | ||
ANNEX
A
to
CREDIT
AGREEMENT
DEFINITIONS
Capitalized
terms used in the Loan Documents shall have (unless otherwise provided elsewhere
in the Loan Documents) the following respective meanings and all section
references in the following definitions shall refer to sections of the
Agreement:
(1) 2007
Loans means collectively the June 2007 Loans and the Supplemental
Loan.
(2) Account
Debtor means any Person who may become obligated to
Borrower under, with respect to, or on account of, an
Account.
(3) Accounts
means all "Claims" (as defined in the Security Agreement), all
"accounts," as such term is defined in the PPSA, now owned or hereafter acquired
by Borrower and, in any event, including (a) all accounts receivable, other
receivables, book debts and other forms of obligations (other than forms of
obligations evidenced by Chattel Paper, securities or instruments) now owned
or
hereafter received or acquired by or belonging or owing to Borrower, whether
arising out of goods sold or services rendered by it or from any other
transaction (including any such obligations which may be characterized as an
account or contract right under the PPSA), (b) all of Borrower's rights in,
to
and under all purchase orders or receipts now owned or hereafter acquired by
it
for goods or services, (c) all of Borrower's rights to any goods represented
by
any of the foregoing (including unpaid sellers' rights of rescission, replevin,
reclamation and stoppage in transit and rights to returned, reclaimed or
repossessed goods), (d) all monies due or to become due to Borrower under all
purchase orders and contracts for the sale of goods or the performance of
services or both by Borrower or in connection with any other transaction
(whether or not yet earned by performance on the part of Borrower) now or
hereafter in existence, including the right to receive the proceeds of said
purchase orders and contracts, and (e) all collateral security and guarantees
of
any kind, now or hereafter in existence, given by any Person with respect to
any
of the foregoing.
(4) Administrative
Agent means BNY Trust Company of Canada in its capacity as
administrative agent for Lenders or its successor appointed pursuant to
Section 9.7.
(5) Affected
Lender shall have the meaning assigned to it in Section
1.11(3).
(6) Affiliate
means, with respect to any Person, (a) each Person that, directly
or indirectly, owns or controls, whether beneficially, or as a trustee, guardian
or other fiduciary, five percent (5%) or more of the Stock having ordinary
voting power in the election of directors of such Persons, (b) each Person
that
controls, is controlled by or is under common control with such Person, (c)
each
of such Person's officers, directors, joint venturers and partners, and (d)
in
the case of SR Group, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of SR Group. For the purposes
of
this definition, "control" of a Person shall mean the possession, directly
or
indirectly, of the power to direct or cause the direction of its management
or
policies, whether through the ownership of voting securities, by contract or
otherwise.
(7) Agents means
collectively Administrative Agent and Collateral Agent.
(8) Agreement
means this Amended and Restated Credit Agreement by and between
Borrower, Agents and Lenders, including all schedules, annexes and exhibits
hereto, as the same may from time to time be amended, restated, modified or
supplemented.
(9) AMF
means the Autorité des marchés financiers (Quebec).
(10) Appendices
shall have the meaning assigned to it in the recitals to the
Agreement.
(11) Applicable
Securities Legislation means the securities laws (including rules,
regulations, policies and instruments) in each of the provinces of Canada and
in
the United States as applicable.
(12) Assignment
Agreement shall have the meaning assigned to it in Section
9.1(1).
(13) Board
of Directors means the board of directors of Borrower or, if duly
constituted and whenever duly empowered, the executive committee of the Board
of
Directors of Borrower, and reference to action by the directors means action
by
the directors of Borrower as a board or action by the said executive committee
as such committee.
(14) BIA
means the Bankruptcy and Insolvency Act (Canada) as from time to time
in effect.
(15) Borrower
shall have the meaning assigned thereto in the recitals to the
Agreement.
(16) Budget
shall have the meaning assigned to it in Annex B, and
includes the Original Budget.
(17) Business
Day means any day that is not a Saturday, a Sunday or a day on
which banks are required or permitted to be closed in the city of Toronto or
New
York.
(18) Canadian
Benefit Plans means all material employee benefit plans of any
nature or kind whatsoever that are not Canadian Pension Plans and are maintained
or contributed to by Borrower or any of its Subsidiaries.
(19) Canadian
Dollars or Dollars or
Cdn$ means
lawful currency of Canada.
(20) Canadian
Pension Plans means each plan which is considered to be a pension
plan for the purposes of any applicable pension benefits standards statute
and/or regulation in Canada established, maintained or contributed to by
Borrower or any of its Subsidiaries for its employees or former
employees.
(21) Capital
Expenditures means, with respect to any Person, all expenditures
(by the expenditure of cash or the incurrence of Indebtedness) by such Person
during any measuring period for any fixed assets or improvements or for
replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under
GAAP.
(22) Capital
Lease means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee that, in accordance
with GAAP, would be required to be classified and accounted for as a capital
lease on a balance sheet of such Person.
(23) Capital
Lease Obligation means, with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
2
(24) Cash
means money, currency or a credit balance in any demand, time, savings, passbook
or like account with a bank, savings and loan association, credit union or
like
organization, other than an account evidenced by a negotiable certificate of
deposit.
(25) Cash
Equivalents means, as at any date of determination, (i) marketable
securities (A) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or the government of Canada,
or
(B) issued by any agency of the United States or Canada the obligations of
which
are backed by the full faith and credit of the United States or Canada, as
applicable, in each case maturing within one year after such date; (ii)
marketable direct obligations issued by any state of the United States of
America, any province of Canada or any political subdivision of any such state
or province or any public instrumentality thereof, in each case maturing within
one year after such date and having, at the time of the acquisition thereof,
a
rating of at least A-1 from S&P or at least P-1 from ▇▇▇▇▇’▇;
(iii) commercial paper maturing no more than one year from the date of
creation thereof and having, at the time of the acquisition thereof, a rating
of
at least A-1 from S&P or at least P-1 from ▇▇▇▇▇’▇; (iv) certificates of
deposit or bankers’ acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under
the
laws of the United States of America or Canada or any state or province thereof
or the District of Columbia that (A) is at least “adequately capitalized” (as
defined in the regulations of its primary banking regulator), and (b) has Tier
1
capital (as defined in such regulations) or equivalent of not less than
US$100,000,000; and (v) shares of any money market mutual fund that (a) has
substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets
of not less than US$500,000,000, and (c) has the highest rating obtainable
from
either S&P or ▇▇▇▇▇’▇.
(26) Cash
Pay Interest shall have the meaning assigned to it in Section
1.4(1).
(27) Charges
means all Taxes and Liens assessed, levied or imposed against
Borrower or its Subsidiaries or upon (a) the Collateral, (b) the Obligations,
(c) the employees, payroll, gross receipts, income, gains or capital of Borrower
or its Subsidiaries, (d) Borrower's or its Subsidiaries' ownership or use of
any
properties or assets, or (e) any other aspect of Borrower's or its Subsidiaries'
business or existence.
(28) Chattel
Paper means any "Documents of Title" (as defined in the Security
Agreement), any "chattel paper," as such term is defined in the PPSA, now owned
or hereafter acquired by Borrower, wherever located.
(29) Civil
Code means the Civil Codeof
Quebec.
(30) Closing
Date means the date of advance of the June 2007
Loans.
(31) Collateral
means all of the property covered by the Security Agreement,
the
Mortgages and the other Collateral Documents and any other property or assets,
real or personal, movable or immovable, tangible or intangible, corporeal or
incorporeal, of any nature, form or description whatsoever, wherever situated,
now existing or hereafter acquired, that may at any time be or become subject
to
a Lien in favour of Collateral Agent, on behalf of Agents and Lenders, to secure
the Obligations.
(32) Collateral
Agent means BNY Trust Company of Canada in its capacity as (i)
collateral agent for Agents and Lenders; and (ii) the power of attorney and
the
"fondé de pouvoir" of Lenders, Collateral Agent and the "Bondholders"
(as defined in the Security Agreement) for the purposes of holding hypothecs
over and against all of Borrower's present and future property, in general,
and
the Collateral and the Mortgaged Properties, in particular, securing payment
of
bonds and other titles of indebtedness as
3
envisaged
by Article 2692 of the Civil Code or, in both cases, its successor
appointed pursuant to Section 9.7.
(33) Collateral
Documents means the Security Agreement, the Mortgages and all
similar agreements entered into guaranteeing payment of, or granting a Lien
upon
property, assets or undertaking as security for payment and performance of,
the
Obligations, as the same may from time to time be amended, restated, modified
or
supplemented.
(34) Collection
Account means Administrative Agent's Canadian Dollar and US Dollar
account as Administrative Agent shall specify from time to time in writing
to
Borrower and Lenders.
(35) Common
Shares means the common shares in the capital of Borrower and
Common Share means any one of them; provided
that in the event of
a change or a subdivision, redivision,
reduction, combination or consolidation thereof, or successive such changes,
subdivisions, redivisions, reductions, combinations or consolidations then,
subject to adjustments, if any, having been made in accordance with the
provisions of Section 1.1(8), Common Shares
shall thereafter mean the shares resulting from such change, subdivision,
redivision, reduction, combination or consolidation and Common
Share means any one of them.
(36) CCAA
means the Companies' Creditors Arrangement Act (Canada) as from time to
time in effect.
(37) Control
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting Stock or by contract or otherwise and,
when
determining control based on ownership of voting Stock, means, with respect
to
control of a body corporate by a Person, the holding (other than by way of
security only) by or for the benefit of that Person, or Affiliates of that
Person of Stock of such body corporate or the right to vote or direct the voting
of Stock of such body corporate to which, in the aggregate, are attached more
than fifty percent (50%) of the votes that may be cast to elect directors of
the
body corporate, provided that the votes attached to such Stock are sufficient,
if exercised, to elect a majority of the directors of the body
corporate.
(38) Conversion
A Amount shall have the meaning assigned to it in Section
1.1(7)(a).
(39) Conversion
Amount means a Conversion A Amount, Conversion B Amount or
Conversion C Amount, as applicable.
(40) Conversion
A Price means Cdn$0.17 as the same may be adjusted from time to
time in accordance with Section 1.1(10).
(41) Conversion
B Amount shall have the meaning assigned to it in Section
1.1(7)(b).
(42) Conversion
B/C Price means Cdn$0.114 as the same may be adjusted from time to
time in accordance with Section 1.1(10).
(43) Conversion
C Amount shall have the meaning assigned to it in Section
1.1(7)(c).
(44) Conversion
Form means the conversion form substantially in the form of
Exhibit 1.1(9)(a).
(45) Conversion
Price means a Conversion A Price or Conversion B/C Price, as
applicable.
4
(46) Convertible
Note means a Convertible Term A Loan Note, a Convertible Term B
Loan Note, a Convertible Term C Loan Note or a Convertible PIK
Note.
(47) Convertible
PIK Note shall have the meaning assigned to it in Section
1.4(4).
(48) Convertible
Term A Loan means the convertible term loan advanced to Borrower
by the Lenders set out in Schedule 1.1(4)(a) on the Convertible Term Loan
Closing Date in the amounts set out in Schedule 1.1(4)(a).
(49) Convertible
Term A Loan Lenders means the Lenders set
out in Schedule 1.1(4)(a) and their permitted successors and assigns from
time to time and Convertible Term Loan A Lender means
any one of them.
(50) Convertible
Term A Loan Note and Convertible Term A Loan Notes
have the meaning assigned to such
terms in Section
1.1(4)(b).
(51) Convertible
Term A Loan Payout Fee shall have the meaning assigned to it in
Section 1.5(4).
(52) Convertible
Term A Loan Pro Rata Share means the percentage obtained by
dividing (i) the aggregate outstanding principal balance of the Convertible
Term
A Loan held by that Convertible Term A Loan Lender by (ii) the aggregate
outstanding principal balance of the Convertible Term A Loan held by all
Convertible Term A Loan Lenders.
(53) Convertible
Term A Loan Termination Date means the earliest of (a) the
Maturity Date, (b) the date of acceleration of the Obligations pursuant to
Section 8.2(2), (c) the Termination Date, and (d) the date of voluntary
prepayment of all the Convertible Term A Loans pursuant to Section
1.2.
(54) Convertible
Term B Loan means the term loan previously advanced to Borrower by
the Lenders set out in Schedule 1.1(5)(a) in the amounts set out in
Schedule 1.1(5)(a).
(55) Convertible
Term B Loan Lenders means the Lenders set
out in Schedule 1.1(5)(a) and their permitted successors and assigns from
time to time and Convertible Term Loan B Lender means
any one of them.
(56) Convertible
Term B Loan Note and Convertible Term B Loan Notes
have the meaning assigned to such
terms in Section
1.1(5)(b).
(57) Convertible
Term B Loan Termination Date means the earliest of (a) the
Maturity Date, (b) the date of acceleration of the Obligations pursuant to
Section 8.2(2), (c) the Termination Date, and (d) the date of voluntary
prepayment of all the Convertible Term B Loans pursuant to Section
1.2.
(58) Convertible
Term C Loan means the convertible term loan advanced to Borrower
by the Lenders set out in Schedule 1.1(6)(a) on the Convertible Term Loan
Closing Date in the amounts set out in Schedule 1.1(6)(a).
(59) Convertible
Term C Loan Lenders means the Lenders set
out in Schedule 1.1(6)(a) and their permitted successors and assigns from
time to time and Convertible Term Loan C Lender means
any one of them.
(60) Convertible
Term C Loan Note and Convertible Term C Loan Notes
have the meaning assigned to such
terms in Section
1.1(6)(b).
5
(61) Convertible
Term C Loan Payout Fee shall have the meaning assigned to it in
Section 1.5(5).
(62) Convertible
Term C Loan Pro Rata Share means the percentage obtained by
dividing (i) the aggregate outstanding principal balance of the Convertible
Term
C Loan held by that Convertible Term C Loan Lender by (ii) the aggregate
outstanding principal balance of the Convertible Term C Loan held by all
Convertible Term C Loan Lenders.
(63) Convertible
Term C Loan Termination Date means the earliest of (a) the
Maturity Date, (b) the date of acceleration of the Obligations pursuant to
Section 8.2(2), (c) the Termination Date, and (d) the date of voluntary
prepayment of all the Convertible Term C Loans pursuant to Section
1.2.
(64) Convertible
Term Loan Closing Date means December 15, 2006.
(65) Convertible
Term Loan Lenders means the Convertible Term A Loan Lenders, the
Convertible Term B Loan Lenders and the Convertible Term C Loan Lenders and
Convertible Term Loan Lender means any one of
them.
(66) Convertible
Term Loan Notes means the Convertible Term A Loan Notes, the
Convertible Term B Loan Notes and the Convertible Term C Loan Notes and
Convertible Term Loan Note means any one of
them.
(67) Convertible
Term Loans means the Convertible Term A Loan, the Convertible Term
B Loan and the Convertible Term C Loan.
(68) Copyright
Licence means any and all rights now owned or hereafter acquired
by Borrower or any of its Subsidiaries under any written agreement granting
any
right to use any Copyright or Copyright registration.
(69) Copyrights
means all of the following now owned or hereafter acquired by
Borrower or any of its Subsidiaries: (a) all copyrights and general intangibles
of like nature (whether registered or unregistered), now owned or existing
or
hereafter adopted or acquired, all registrations and recordings thereof, and
all
applications in connection therewith, including all registrations, recordings
and applications in the Canadian Intellectual Property Office or in any similar
office or agency in any other country or any political subdivision thereof,
and
(b) all reissues, extensions or renewals thereof.
(70) Current
Market Price shall have the meaning assigned to it in Section
1.1(10)(d).
(71) Date
of Conversion means the date on which a Conversion Form is
delivered and Convertible Note, if any, is surrendered in accordance with the
provisions of Section 1.1(9)(a).
(72) Default
means any event which, with the passage of time or notice or
both,
would become an Event of Default.
(73) Disclosure
Letters means the disclosure letter under the Original Credit
Agreement dated December 7, 2006 and the disclosure letter hereunder dated
the
date hereof both attached as Annex D.
(74) Distributable
Value means, as of any date of
determination, the amount equal to Total Capitalization at such time minus
the
aggregate amount of the Obligations outstanding at such time.
(75) Environmental
Laws means all applicable federal, provincial, local and foreign
laws, statutes, ordinances, codes, rules, standards, orders-in-council and
regulations, now or hereafter in effect, and in
6
each
case
as amended or supplemented from time to time, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability
or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation).
(76) Environmental
Liabilities means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result
of
or related to any claim, suit, action, administrative order, investigation,
proceeding or demand by any Person, whether based in contract, tort, implied
or
express warranty, strict liability, criminal or civil statute or common law,
including any arising under or related to any Environmental Laws, Environmental
Permits, or in connection with any Release or threatened Release or presence
of
a Hazardous Material whether on, at, in, under, from or about or in the vicinity
of any real or personal property.
(77) Environmental
Permits means all permits, licenses, written authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
(78) Equipment
means all "Equipment" (as defined in the Security Agreement),
all
"equipment," as such term is defined in the PPSA, now owned or hereafter
acquired by the members of SR Group, wherever located and, in any event,
including all their machinery and equipment, including processing equipment,
conveyors, machine tools, data processing and computer equipment with software
and peripheral equipment (other than software constituting part of the
Accounts), and all engineering, processing and manufacturing equipment, office
machinery, furniture, materials handling equipment, tools, attachments,
accessories, automotive equipment, trailers, trucks, forklifts, molds, dies,
stamps, motor vehicles, rolling stock and other equipment of every kind and
nature, trade fixtures and fixtures not forming a part of real property, all
whether now owned or hereafter acquired, and wherever situated, together with
all additions and accessions thereto, replacements therefor, all parts therefor,
all substitutes for any of the foregoing, fuel therefor, and all manuals,
drawings, instructions, warranties and rights with respect thereto, and all
products and proceeds thereof and condemnation awards and insurance proceeds
with respect thereto.
(79) Equivalent
Amount in one currency on any day means the amount of such
currency that would result from Administrative Agent converting into such
currency another currency at approximately 12:00 noon (Toronto time) on such
day
in accordance with Administrative Agent's customary practice for commercial
loans being administered by it.
(80) Event
of Default shall have the meaning assigned to it in Section
8.1.
(81) Exchange
means the Toronto Stock Exchange and any other exchange or market on which
the
Common Shares are quoted or listed for trading, from time to time, as
applicable.
(82) Fees
means any and all fees and field audit charges payable to Agents
or Lenders pursuant to the Agreement (including pursuant to Section 1.5
and Section 11.3) or any of the other Loan Documents.
(83) Filed
Securities Documents means any documents filed from time to time
with the Canadian Securities Administrators pursuant to the requirements of
Applicable Securities Legislation under
7
Borrower's
name on SEDAR or with the Securities and Exchange Commission pursuant to the
requirements of U.S. Securities Laws under Borrower's name on
▇▇▇▇▇.
(84) Financial
Statements means the financial statements including income
statements, statements of cash flows and balance sheets of Borrower and its
Subsidiaries, as applicable, delivered in accordance with Section 3.4 and
Section 4.1 of the Agreement and Annex B.
(85) Fiscal
Month means any of the monthly accounting periods of
Borrower.
(86) Fiscal
Quarter means any of the following quarterly accounting periods of
Borrower in each Fiscal Year consisting of January 1 through March 31; April
1
through June 30; July 1 through September 30; and October 1 through December
31.
(87) Fiscal
Year means the annual accounting period of Borrower from January 1
through December 31.
(88) Fixed
Cash Pay Interest Rate means, on any date, the greater of (a) six
and one-half percent (6.5%) and (b) LIBOR plus three and eighty-five one
hundredths of one percent (3.85%).
(89) Fixtures
means all "fixtures" including trace fixtures, facilities and
equipment however affixed or attached to real property or buildings or other
structures.
(90) Fondé
shall have the meaning assigned to such term in Section
9.2(3).
(91) Full
PIK Interest Rate means, on any date, the
sum of the Fixed Cash Pay Interest Rate and the Partial PIK Interest
Rate.
(92) GAAP
means generally accepted accounting principles in Canada
consistently applied.
(93) Governmental
Authority means any nation or government, any state or other
political subdivision thereof, and any agency, court, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
(94) Guaranteed
Indebtedness means, as to any Person, any obligation of such
Person guaranteeing any indebtedness, lease, dividend, or other obligation
("primary obligations") of any other Person (the
"primary obligor") in any manner, including any obligation or
arrangement of such Person (a) to purchase or repurchase any such primary
obligation, (b) to advance or supply funds (A) for the purchase or payment
of
any such primary obligation or (B) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or
any
balance sheet condition of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of
such primary obligation or (d) to indemnify the owner of such primary obligation
against loss in respect thereof. The amount of any Guaranteed
Indebtedness at any time shall be deemed to be an amount equal to the lesser
at
such time of (x) the stated or determinable amount of the primary obligation
in
respect of which such Guaranteed Indebtedness is made and (y) the maximum amount
for which such Person may be liable pursuant to the terms of the instrument
embodying such Guaranteed Indebtedness; or, if not stated or determinable,
the
maximum reasonably anticipated liability (assuming full performance) in respect
thereof.
(95) Hazardous
Material means any substance, material or waste which is regulated
by or forms the basis of liability now or hereafter under, any applicable
Environmental Laws, including any material or
8
substance
which is (a) defined as a "solid waste," "hazardous waste," "hazardous
material," "hazardous substance," "dangerous good", "extremely hazardous
waste," "restricted hazardous waste," "pollutant," "contaminant,"
"hazardous constituent," "special waste," "toxic substance" or other similar
term or phrase under any applicable Environmental Laws, (b) petroleum or any
fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or
(c) any radioactive substance.
(96) Indebtedness
of any Person means without duplication (a) all indebtedness
of
such Person for borrowed money or for the deferred purchase price of property
payment for which is deferred six (6) months or more, but excluding obligations
to trade creditors incurred in the ordinary course of business that are not
overdue by more than six (6) months unless being contested in good faith, (b)
all reimbursement and other obligations with respect to letters of credit,
bankers' acceptances and surety bonds, whether or not matured, (c) all
obligations evidenced by notes, bonds, debentures or similar instruments, (d)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement
in
the event of default are limited to repossession or sale of such property),
(e)
all Capital Lease Obligations and the present value of future rental payments
under all synthetic leases, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements,
in
each case whether contingent or matured, (g) all obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks of that Person arising from fluctuations in currency values
or interest rates, in each case whether contingent or matured, (h) all
Indebtedness referred to above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by)
any Lien upon or in property or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (i) the
Obligations.
(97) Indemnified
Liabilities shall have the meaning assigned to it in Section
1.9.
(98) Indemnified
Person shall have the meaning assigned to it in Section
1.9.
(99) Initial
Closing Date means the "Closing Date" as defined in the Original
Credit Agreement.
(100) Initial
Lenders means the Lenders set out in Schedule 1.1(1)(a) and
their permitted successors and assigns from time to time and Initial
Lender means any one of them.
(101) Initial
Loan and Initial Loans have the meaning
assigned to such terms in Section 1.1(1)(a).
(102) Initial
Loan Termination Date means the earliest of (a) the
Maturity Date, (b) the date of acceleration of the Obligations pursuant to
Section 8.2(2), (c) the Termination Date, and (d) the date of voluntary
prepayment of all the Initial Loans pursuant to Section 1.2.
(103) Initial
Loan Maximum Amount means Thirty-Nine
Million Six Hundred Twenty-Five Thousand US Dollars
(US$39,625,000).
(104) Initial
Loan Payout Fee shall have the meaning assigned to it in
Section 1.5(1).
(105) Initial
Loan Pro Rata Share of an Initial Lender means the percentage
obtained by dividing (i) the aggregate outstanding balance of the Initial Loans
held by such Initial Lender by (ii) the aggregate outstanding principal amount
of the Initial Loans held by all Initial Lenders.
9
(106) Insolvency
Laws means any of the Bankruptcy and Insolvency Act
(Canada), the Companies' Creditors Arrangement Act (Canada), the
Winding-Up and Restructuring Act (Canada), the Courts of Justice
Act (Ontario) and Title 11 of the United States Code entitled "Bankruptcy",
each as now and hereafter in effect, any successors to such statutes and any
other applicable insolvency or other similar law of any jurisdiction including
any law of any jurisdiction permitting a debtor to obtain a stay or a compromise
of the claims of its creditors against it.
(107) Intellectual
Property means all "Intangible Property" (as defined in the
Security Agreement) as well as any and all Licences, Patents, Copyrights,
Trademarks, trade secrets and customer lists.
(108) Interest
Determination Date means the date which is two (2) Business Days
before the first day of an Interest Period.
(109) Interest
Payment Date means the last Business Day of each
month.
(110) Interest
Period means the period of days from an Interest Payment Date to
and including the next succeeding Interest Payment Date.
(111) Inventory
means any "Inventory" (as defined in the Security Agreement),
any
"inventory," as such term is defined in the PPSA, now or hereafter owned or
acquired by Borrower, wherever located, and in any event including inventory,
merchandise, goods and other personal property which are held by or on behalf
of
Borrower for sale or lease or are furnished or are to be
furnished under a contract of service, or which constitute raw materials, work
in process or materials used or consumed or to be used or consumed in Borrower's
business or in the processing, production, packaging, promotion, delivery or
shipping of the same, including other supplies.
(112) ITA
means the Income Tax Act (Canada) as from time to time in
effect.
(113) June
2007 Lenders means the lenders listed in Schedule 1.1(2)(a)
and their permitted successors and assigns from time to time and
June 2007 Lender means any one of them.
(114) June
2007 Loan and June 2007 Loans have the
meaning assigned to such terms in Section 1.1(2)(a).
(115) June
2007 Loan Termination Date means the earliest of (a)
the Maturity Date, (b) the date of acceleration of the Obligations pursuant
to
Section 8.2(2), (c) the Termination Date, and (d) the date of voluntary
prepayment of all the June 2007 Loans pursuant to Section
1.2.
(116) June
2007 Loan Note and June 2007 Loan Notes
have the meaning assigned to such terms in Section
1.1(2)(b).
(117) June
2007 Loan Payout Fee shall have the meaning assigned to it in
Section 1.5(2).
(118) June
2007 Loan Pro Rata Share of a June 2007 Lender means the
percentage obtained by dividing (i) the aggregate outstanding balance of the
June 2007 Loans held by such June 2007 Lender by (ii) the aggregate outstanding
principal amount of the June 2007 Loans held by all June 2007
Lenders.
(119) Lenders
means the Initial Lenders, the June 2007 Lenders, the Convertible
Term A Loan Lenders, the Convertible Term B Loan Lenders, the Convertible Term
C
Loan Lenders and the Supplemental Lenders; together with, in each case, their
permitted successors and assigns and Lender means any
one of them.
10
(120) LIBOR
means the rate of interest per annum (based on a 360 day year
in
accordance with market convention, rounded upwards, if necessary, to the nearest
whole multiple of 1/100th of 1%) at which major banks in the London interbank
market are offering deposits in US Dollars for the relevant amount and for
a
three (3) month period, appearing on the Telerate page 3750 (at or about 11:00
a.m. London time) on the Interest Determination Date. If, for any
reason, such rate does not appear on Telerate page 3750, then
LIBOR shall be determined by the Administrative Agent
to be the arithmetic average of the rate per annum at which deposits in US
Dollars in the relevant amount and for a three (3) month period would be offered
by first class banks in the London interbank market to Administrative Agent
at
approximately 11:00 a.m. London time on the Interest Determination Date. Each
calculation by Administrative Agent of LIBOR shall be
conclusive and binding for all purposes, absent manifest error.
(121) Licence
means any Copyright Licence, Patent Licence, Trademark Licence
or
other licence of rights or interests now held or hereafter acquired by Borrower
or any of its Subsidiaries.
(122) Lien
means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest, trust
(actual or deemed), easement or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the PPSA, any publication effecting any hypothec, security interest or
right under the Civil Code or comparable law of any
jurisdiction).
(123) Litigation
shall have the meaning assigned to it in Section
3.12.
(124) Loans
means the Initial Loans, the June 2007 Loans, the Convertible Term Loans (until
converted in accordance with the terms of this Agreement) and the PIK Loans;
and
after the first advance of the Supplemental Loan, Loans
will also include the Supplemental Loans.
(125) Loan
Accounts shall have the meaning assigned to it in Section
1.8.
(126) Loan
Documents means this Agreement, the Notes, the Collateral
Documents, each Budget, the Disclosure Letters and all other agreements,
instruments, documents, certificates and acknowledgments executed and delivered
to, or in favour of any Agent or Lender and including all other pledges, powers
of attorney, consents, assignments, contracts, notices, and all other written
matter whether heretofore, now or hereafter executed by or on behalf of
Borrower, or any Affiliate or their respective Related Parties, and delivered
to
any Agent or Lender in connection with the Agreement or the transactions
contemplated hereby. Any reference in the Agreement or any other Loan Document
to a Loan Document shall include all appendices, exhibits or schedules thereto,
and all amendments, restatements, modifications or other supplements thereto,
and shall refer to such Loan Document as the same may be in effect at any and
all times such reference becomes operative.
(127) Material
Adverse Effect means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of
Borrower and its Material Subsidiaries (taken as a whole), (b) Borrower's and
its Material Subsidiaries' ability (taken as a whole) to pay any of the Loans
or
any of the other Obligations in accordance with the terms of the Agreement
or
the other Loan Documents, (c) the Collateral or Collateral Agent's Liens on
the
Collateral or the priority of such Liens, or (d) Agents' or Lenders' rights
and
remedies under the Agreement and the other Loan Documents.
(128) Material
Change means a material change for purposes of any Applicable
Securities Legislation.
(129) Material
Fact means a material fact for purposes of any Applicable
Securities Legislation.
11
(130) Material
Subsidiaries means any Subsidiary of the Borrower that, at any
time and from time to time, (a) generates more than five (5) percent of
Borrower's revenues (on a consolidated basis) in a Fiscal Quarter, or (b) has
property and assets worth more than Cdn$1,000,000.
(131) Maturity
Date means (i) if there are no draws under the Supplemental Loan,
the fifth anniversary of one day after the Closing Date, or (ii) if there are
draws under the Supplemental Loan, the fifth anniversary of one day
after the last draw under the Supplemental Loan.
(132) MCTOs
means the management and insider cease trade order issued by
the
OSC on April 19, 2007 and the management and insider cease trade order issued
by
the AMF on April 18, 2007.
(133) Misrepresentation
means a misrepresentation for purposes of any Applicable
Securities Legislation.
(134) Mortgaged
Properties shall have the meaning assigned to it in the Original
Credit Agreement.
(135) Mortgages
means the hypothecation of the Mortgaged Properties pursuant
to
the Security Agreement as well as each of the debentures, debenture delivery
agreements and other real estate/immovable property security/hypothecation
documents delivered by Borrower and its Subsidiaries to Collateral Agent with
respect to the Mortgaged Properties or real/immovable property acquired by
Borrower and its Subsidiaries after the Closing Date, all in form and substance
satisfactory to Requisite Lenders, in their sole discretion, as each may from
time to time be amended, restated, modified or supplemented.
(136) National
Instrument 45-102 shall have the meaning assigned to it in
Section 3.32.
(137) Non-Consenting
Lender shall have the meaning assigned to it in Section
11.2(5).
(138) Non-Funding
Lender shall have the meaning assigned to it in Section
9.9(1).
(139) Notes
means collectively the Revolving Notes, the June 2007 Loan Notes, the
Supplemental Loan Notes, the PIK Notes and the Convertible Term Loan Notes
and
Note means any one of them.
(140) Obligations
means all loans, advances, debts, liabilities and obligations,
for
the performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such amounts
are liquidated or determinable) owing by Borrower to Agents or Lenders or their
respective Affiliates, and all covenants and duties regarding such amounts,
of
any kind or nature, present or future, whether or not evidenced by any note,
agreement or other instrument, arising under this Agreement. This term includes
all principal, interest (including all interest which accrues after the
commencement of any case or proceeding in bankruptcy after the insolvency of,
or
for the reorganization of, Borrower, whether or not allowed in such case or
proceeding), Fees, Charges, expenses, legal fees and any other sum chargeable
to
Borrower under the Agreement.
(141) Officers'
Certificate means a certificate of Borrower made pursuant to this
Agreement signed by two (2) officers of Borrower, one (1) of whom must be the
President or the Chief Financial Officer of Borrower, each in his capacity
as an
officer of Borrower.
(142) Operating
Plan means an annual operating plan for Borrower and its
Subsidiaries for each Fiscal Year, approved by the board of directors of
Borrower, which will include a statement of all of the material assumptions
on
which such plan is based, monthly balance sheets, income statements, cash flow
statements, capitalization statements and a monthly budget for the applicable
Fiscal Year (all consistent
12
with
the
historical Financial Statements of Borrower to the extent appropriate), plans
for personnel, Capital Expenditures and facilities and will integrate sales,
gross profits, operating expenses, operating profit and cash flow projections
all prepared on the same basis and in similar detail as that on which operating
results are reported (and in the case of cash flow projections, representing
management's good faith estimates of future financial performance based on
historical performance).
(143) Ordinary
Course Indebtedness means Indebtedness (other than indebtedness
for borrowed money) incurred in the ordinary course of business of Borrower
to
trade creditors, suppliers, lessors or other Persons under letters of credit,
surety bonds, leases or any other similar ordinary course of business contract
or agreement entered into from time to time for the purpose of conducting the
ordinary course business of Borrower and consistent with past business practices
of Borrower.
(144) Original
Budget shall have the meaning assigned to it in the Original
Credit Agreement.
(145) Original
Credit Agreement has the meaning assigned to such term in Recital
A.
(146) OSC
means the Ontario Securities Commission.
(147) Other
Lender shall have the meaning assigned to it in Section
9.9(4)(a).
(148) Partial
PIK Interest Rate means, on any date, the
greater of (a) seven and one-half percent (7.5%) and (b) LIBOR plus four and
eighty-five one hundredths of one percent (4.85%).
(149) Patent
Licence means rights under any written agreement now owned or
hereafter acquired by Borrower or any of its Subsidiaries granting any right
with respect to any invention on which a Patent is in existence.
(150) Patents
means all of the following in which Borrower or any of its
Subsidiaries now holds or hereafter acquires any interest: (a) all letters
patent of invention and all applications for letters patent, all industrial
designs, design patents and all registrations and recordings thereof, including
registrations, recordings and applications in the Canadian Patent and Trademark
Office, Canadian Designs Office or in any similar office or agency in any
country or political subdivision thereof, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
(151)
Payout Fees means the Initial Loan Payout Fee, the June 2007 Loan
Payout Fee, the Supplemental Loan Payout Fee, the Convertible Term A Loan Payout
Fee and the Convertible Term C Loan.
(152) Permitted
Encumbrances means the following encumbrances: (a) Liens for Taxes
or assessments or other governmental Charges not yet due and payable; (b)
pledges or deposits of money securing statutory obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation; (c) pledges or deposits of money securing bids, tenders,
contracts (other than contracts for the payment of money) or leases to which
Borrower is a party as lessee made in the ordinary course of business; (d)
inchoate and unperfected workers', mechanics' or similar Liens arising in the
ordinary course of business, so long as such Liens attach only to Equipment,
Fixtures and/or Real Estate; (e) carriers', warehousemen's, suppliers' or other
similar possessory liens arising in the ordinary course of business and securing
liabilities in an outstanding aggregate amount not in excess of Cdn$50,000
at
any time, so long as such Liens attach only to Inventory; (f) deposits securing,
or in lieu of, surety, appeal or customs bonds in proceedings to which Borrower
is a party; (g) any attachment or judgment lien not constituting an Event of
Default under Section 8.1(9); (h) zoning restrictions, easements,
licenses, or other restrictions on the use of any Real Estate or other minor
irregularities in title
13
(including
leasehold title) thereto, so long as the same do not materially impair the
use,
value, or marketability of such Real Estate; (i) presently existing or
hereinafter created Liens in favour of Collateral Agent, on behalf of Agents
and
Lenders; (j) Liens expressly permitted under paragraphs (b) through
(g) of Section 6.7 of the Agreement; and (k) to the extent not
included in paragraphs (a), (d) or (e) immediately above,
Prior Claims that are unregistered and that secure amounts that are not yet
due
and payable.
(153) Person
means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, provincial, state, county, city, municipal, local,
foreign, or otherwise, including any instrumentality, division, agency, body
or
department thereof).
(154) PIK
Interest shall have the meaning assigned to it in Section
1.4(2).
(155) PIK
Loan shall have the meaning assigned to it in Section
1.4(3).
(156) PIK
Note shall have the meaning assigned to it in Section
1.4(3) and shall include each Convertible PIK Note, if any.
(157) PPSA
means the Personal Property Security Act (Ontario) and
the Regulations thereunder, as from time to time in effect; provided
however, if attachment, perfection or priority of Agent's Liens in
any Collateral are governed by the personal property security laws of any
jurisdiction other than Ontario, PPSA shall means those personal property
security laws in such other jurisdiction for the purposes of the provisions
hereof relating to such attachment, perfection or priority and the definitions
related to such provisions.
(158) Prior
Claims means all Liens created by applicable law (in contrast with
Liens voluntarily granted) which rank or are capable of ranking prior or
pari passu with Collateral Agent's Liens against all or part of the
Collateral, including for amounts owing for wages, employee deductions, goods
and services taxes, sales taxes, employer health taxes, municipal taxes,
workers' compensation, pension fund obligations and overdue rents.
(159) Proceeds
means "Proceeds" (as defined in the Security Agreement),
"proceeds," as such term is defined in the PPSA and, in any event, shall include
(a) any and all proceeds of any insurance, indemnity, warranty or guarantee
payable to Borrower or its Subsidiaries from time to time with respect to any
of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to Borrower or its Subsidiaries from time to time in connection
with
any requisition, confiscation, condemnation, seizure or forfeiture of all or
any
part of the Collateral by any Governmental Authority (or any Person acting
under
colour of any Governmental Authority), (c) any claim of Borrower or its
Subsidiaries against third parties (i) for past, present or future infringement
of any Patent or Patent Licence, or (ii) for past, present or future
infringement or dilution of any Copyright, Copyright Licence, Trademark or
Trademark Licence, or for injury to the goodwill associated with any Trademark
or Trademark Licence, (d) any recoveries by Borrower or its Subsidiaries against
third parties with respect to any litigation or dispute concerning any of the
Collateral, and (e) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral, upon disposition or
otherwise.
(160) Proposed
Payment Date shall have the meaning assigned to it in Section
1.13(2).
(161) Pro
Rata Share means the percentage obtained by dividing (i) the
aggregate outstanding principal balance of the Loans held by that Lender by
(ii)
the aggregate outstanding principal balance of the Loans held by all
Lenders.
14
(162) Public
Period shall have the meaning assigned to it in Section
4.1(2)(b).
(163) Public
Period Notice shall have the meaning assigned to it in Section
4.1(2).
(164) Qualified
Assignee means (a) any Lender, any Affiliate of any Lender and,
with respect to any Lender that is an investment fund that invests in commercial
loans, any other investment fund that invests in commercial loans and that
is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor and (b) any commercial bank or financial
institution.
(165) Real
Estate shall have the meaning assigned to it in Section
3.6.
(166) Related
Parties shall mean a Person's officers, directors, partners,
employees, accountants, legal counsel, agents, representatives and other
professional advisors from time to time.
(167) Release
means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material
in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property; and,
when
used as a verb, shall have a similar meaning.
(168) Replacement
Lender shall have the meaning assigned to it in Section
1.11(3).
(169) Required
Filings means, collectively, the audited consolidated financial
statements of Borrower for Fiscal Year 2006, the management discussion and
analysis of Borrower and its Subsidiaries for Fiscal Year 2006, the annual
information form of Borrower for the year ended December 31, 2006, the interim
consolidated financial statements of Borrower for the Fiscal Quarter ended
March
31, 2007, all filing and other fees payable to in relation thereto, all
documentation in relation therewith and all other disclosure documents of or
relating to Borrower as Borrower may be required to file by the AMF and the
OSC
as a condition to the lapsing of the MCTOs.
(170) Requisite
Convertible Term B/Initial Lenders means Initial Lenders and
Convertible Term B Loan Lenders having more than 66 ⅔% of the aggregate
outstanding amount of the Initial Loans and Convertible Term B
Loans.
(171) Requisite
Convertible Term Loan Lenders means Convertible Term Loan Lenders
having more than 66 ⅔% of the aggregate outstanding amount of the Convertible
Term Loans.
(172) Requisite
Lenders means with respect to all Loans, Lenders having more than
66 ⅔% of the aggregate outstanding amount of the Loans.
(173) Restricted
Cash means Cash and Cash Equivalents being used by the Borrower or
any of its Subsidiaries to cash collateralize letters of credit or performance
bonds issued at the request of the Borrower or such Subsidiary.
(174) Restricted
Payment means (a) the declaration or payment of any dividend or
the incurrence of any liability to make any other payment or distribution of
cash or other property or assets in respect of a Person's Stock, (b) any payment
on account of the purchase, redemption, defeasance, sinking fund or other
retirement of a Person's Stock or any other payment or distribution made in
respect thereof, either directly or indirectly, (c) any payment or prepayment
of
principal of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to, any
Subordinated Debt; (d) any payment
15
made
to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Person
now or hereafter outstanding; (e) any payment of a claim for the rescission
of
the purchase or sale of, or for material damages arising from the purchase
or
sale of, any shares of such Person's Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim
for
damages or rescission; (f) any payment, loan, contribution, or other transfer
of
funds or other property to any employee or holder of Stock of such Person other
than payment of compensation in the ordinary course to employees or holders
of
Stock who are employees of such Person; and (g) any payment of management fees
(or other fees of a similar nature) by such Person to any holder of Stock of
such Person or their Affiliates.
(175) Revolving
Note and Revolving Notes shall have the
meanings assigned to such terms in the Original Credit Agreement.
(176) Schedules
means the Schedules prepared by Borrower and denominated as
Schedules 1.1 through 6.7 in the Table of Contents to the
Agreement.
(177) Security
Agreement means collectively (i) the "Deed of Hypothec to Secure
Bonds" bearing formal date May 12, 2005 (as the same may from time to time
be
amended, restated, modified or supplemented, the "Deed of
Hypothec") between Borrower and BNY Trust Company of Canada as trustee
and therein defined "Fondé de Pouvoir" (for purposes of this paragraph,
the "Trustee"), as supplemented by the Supplemental Deed of
Hypothec to Secure Bonds dated June 28, 2007 between Borrower and the Trustee,
(ii) each Bond Pledge Agreement bearing formal date May 12, 2005 between
Borrower, each Lender (and any of their respective present or future Affiliates)
and BNY Trust Company of Canada, in its capacity as Collateral Agent, mandatary,
agent and custodian of and for Lenders (and any of their respective present
or
future Affiliates) and the Bond Pledge Agreement dated as of June 28, 2007
between Borrower, each Lender and BNY Trust Company in its capacity as
Collateral Agent, mandatary, agent and custodian of and for Lenders (and any
of
their respective present or future Affiliates), as each may from time to time
be
amended, restated, modified or supplemented, and (iii) all "Bonds"
(as defined in the Deed of Hypothec) which may, at any time, be issued by
Borrower under and secured by the hypothecs, security interests and rights
created under the Deed of Hypothec, (iv) the general security agreement dated
May 19, 2005 by and between Borrower, Collateral Agent and others, as confirmed
by a confirmation and acknowledgement of security dated as of June 27, 2007
from
the Borrower, and as from time to time be amended, restated, modified or
supplemented, and (v) all other agreements and/or documents now or hereafter
entered into between Borrower and Trustee, Borrower and Collateral Agent or
Borrower and any Lender creating and/or with respect to any Liens, security
interests, hypothecs and/or rights in and against any of Borrower's present
and
future property, in general, and the Collateral and/or the Mortgaged Properties,
in particular, as the same may from time to time be amended, restated, modified
or supplemented.
(178) Settlement
Date shall have the meaning assigned to it in Section
9.9(1).
(179) SR
Group means collectively Borrower and its
Subsidiaries.
(180) SR
Group Pension Plans shall have the meaning assigned to it in
Section 3.11.
(181) Stock
means "Securities" (as defined in the Security Agreement) as
well
as all shares, options, warrants, general or limited partnership interests
or
other equivalents (regardless of how designated) of or in a corporation,
partnership or equivalent entity whether voting or nonvoting, including common
shares, preferred shares or any other "equity security".
16
(182) Subordinated
Debt means the Indebtedness of Borrower and its Subsidiaries that
is subordinated to the Obligations, in a manner and form satisfactory to
Requisite Lenders in their sole discretion, as to right and time of payment
and
as to any other rights and remedies thereunder.
(183) Subsidiary
means, with respect to any Person, (a) any corporation of which
an
aggregate of more than fifty percent (50%) of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, Stock of any other class
or
classes of such corporation shall have or might have voting power by reason
of
the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person and/or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or of which any such Person is a general partner or may exercise the
powers of a general partner.
(184) Supplemental
Lenders means the Lenders identified on Schedule 1.1(3)(a)
as having Supplemental Loan Commitments and their permitted successors and
assigns from time to time and Supplemental Lender
means any one of them.
(185) Supplemental
Loan and Supplemental Loans have the
meanings assigned to such terms in Section 1.1(3)(a).
(186) Supplemental
Loan Commitment means, as to any Supplemental Lender, its
commitment to make Supplemental Loans during the Supplemental Loan Commitment
Period in the aggregate principal amount set out opposite its name in
Schedule 1.1(3)(a).
(187) Supplemental
Loan Commitment Period means the period beginning on the Closing
Date and ending on the earliest of (a) the first anniversary of the Closing
Date, (b) the date of termination of each Supplemental Lender's obligation
to
make further Supplemental Loans or permit existing Supplemental Loans to remain
outstanding in each case pursuant to Section 8.2(2) and (c) the
Termination Date.
(188) Supplemental
Loan Draw Request has the meaning assigned to such term in
Section 1.1(3)(a).
(189) Supplemental
Loan Note and Supplemental Loan Notes
have the meanings assigned to such
terms in Section
1.1(3)(b).
(190) Supplemental
Loan Payout Fee shall have the meaning assigned to it in
Section 1.5(3).
(191) Supplemental
Loan Pro Rata Share means, with respect to any Supplemental
Lender, the percentage obtained by dividing (i) the Supplemental Loan Commitment
of such Supplemental Lender by (ii) the aggregate Supplemental Loan
Commitments.
(192) Supplemental
Loan Termination Date means the earliest of (a) the
Maturity Date, (b) the date of acceleration of the Obligations pursuant to
Section 8.2(2), (c) the Termination Date, and (d) the date of voluntary
prepayment of the aggregate Supplemental Loans pursuant to Section
1.2.
(193) Tax
and Taxes includes all present and future taxes, surtaxes, duties,
levies, imposts, rates, fees, assessments, withholdings and other charges of
any
nature (including income, capital gains, corporate, capital (including large
corporations), net worth, sales, consumption, use, transfer, goods and services,
value-added, stamp, registration, franchise, withholding, payroll, employment,
health, education,
17
employment
insurance, pension, excise, business, school, property, occupation, customs,
anti-dumping and countervail taxes, surtaxes, duties, levies, imposts, rates,
fees, assessments, withholdings and other charges) imposed by any Governmental
Authority, together with any fines, interest, penalties or other additions
on,
to, in lieu of, for non-collection of or in respect of those taxes, surtaxes,
duties, levies, imposts, rates, fees, assessments, withholdings and other
charges.
(194) Termination
Date means the date on which the Loans have been indefeasibly
repaid in full and all other Obligations under the Agreement and the other
Loan
Documents have been completely discharged and Borrower shall not have any
further right to borrow any monies under the Agreement.
(195) Total
Capitalization means, as of the date of determination, the sum of
(a) Total Debt and (b) Total Shareholders' Equity.
(196) Total
Debt means, as of the date of determination, the total amount of
the Indebtedness of Borrower and its Subsidiaries determined on a consolidated
basis. For greater certainty, Total Debt shall include Subordinated Debt and
preferred shares that are then presently retractable at the option of the holder
or which Borrower plans to redeem and for which the retraction price or
redemption price, as the case may be, is payable in cash or otherwise evidenced
by Indebtedness in which case the aggregate retraction amount or redemption
amount, as applicable, shall be included.
(197) Total
Shareholders' Equity means, as of the date of determination, (a)
at any time that the Common Shares are traded on the Toronto Stock Exchange,
the
average ten (10) Business Day trailing trading price of the Common Shares or
(b)
if the calculation in paragraph (a) immediately above cannot be
determined, the total amount of shareholders' equity of Borrower and its
Subsidiaries determined on a consolidated basis (including the stated capital
of
all shares, the stated capital that would be attributable to shares issued
upon
the conversion of any convertible debt instruments, accumulated retained
earnings and the amount, without duplication, of any contributed surplus,
together with the amount of minority interests in Subsidiaries of Borrower
or
its Subsidiaries), all as determined in accordance with GAAP.
(198) Trademark
Licence means rights under any written agreement now owned or
hereafter acquired by Borrower and its Subsidiaries granting any right to use
any Trademark.
(199) Trademarks
means all of the following now owned or hereafter acquired by
Borrower or any of its Subsidiaries: (a) all trademarks, trade names, corporate
names, business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and
all
applications in connection therewith, including registrations, recordings and
applications in the Canadian Trade-marks Office or in any similar office in
any
country or any political subdivision thereof; (b) all reissues, extensions
or
renewals thereof; and (c) all goodwill associated with or symbolized by any
of
the foregoing.
(200) Trading
Days means, with respect to an Exchange, any days on which such
Exchange is open for trading or quotation and Trading
Day means any one of them.
(201) Tranche
of Loan means either the Initial Loans, the 2007 Loans, the
Convertible Term A Loans, the Convertible Term B Loans or the Convertible Term
C
Loans.
(202) US
Dollars or US$ means lawful currency of
the United States of America.
Unless
otherwise specified, references in the Agreement or any of the Appendices to
a
Section, subsection or paragraph refer to such Section, subsection or paragraph
as contained in the Agreement.
18
The
words
"herein," "hereof" and "hereunder" and other words of similar import refer
to
the Agreement as a whole, including all Appendices, as the same may from time
to
time be amended, restated, modified or supplemented, and not to any particular
section, subsection or paragraph contained in the Agreement or any such
Appendices.
Wherever
from the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and the plural, and pronouns stated in
the
masculine, feminine or neuter gender shall include the masculine, feminine
and
neuter genders. The words "including", "includes" and "include" shall
be deemed to be followed by the words "without limitation"; references to
Persons include their respective successors and assigns (to the extent and
only
to the extent permitted by the Loan Documents) or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and
all
references to statutes and related regulations shall include any amendments
of
the same and any successor statutes and regulations. Whenever any provision
in
any Loan Document refers to the knowledge (or an analogous phrase) of a member
of SR Group, such words are intended to signify that such member of SR Group
has
actual knowledge or awareness of a particular fact or circumstance or that
such
member of SR Group, if it had exercised reasonable diligence, would have known
or been aware of such fact or circumstance.
19
ANNEX
B (Section 4.1(1))
to
CREDIT
AGREEMENT
REPORTING
- FINANCIAL STATEMENTS, NOTICES, OPERATING PLAN, BUDGET, REPORTS AND OTHER
INFORMATION
Borrower
shall deliver or cause to be delivered to Administrative Agent the
following:
(1) Monthly
Financials. Within thirty (30) days after the end of
each Fiscal Month (or within forty-five (45) days after the end of a Fiscal
Month that is the last month of a Fiscal Quarter), financial information
regarding Borrower and its Subsidiaries, certified by an officer of Borrower,
consisting of:
(a) unaudited
balance sheets as of the close of such Fiscal Month and the related statements
of income and cash flow for that portion of the Fiscal Year ending as of the
close of such Fiscal Month;
(b) unaudited
statements of income and cash flow for such Fiscal Month, setting forth in
comparative form the figures for the corresponding period in the prior year
and
the figures contained in the Operating Plan for such Fiscal Year;
and
(c) a
summary of all payments made or owing to Affiliates during such Fiscal Month,
indicating which payments are in respect of inventory purchases, Capital
Expenditures and/or management fees.
Such
financial information shall be accompanied by the certification of an officer
of
Borrower that (i) such financial information presents fairly in accordance
with
GAAP (subject to normal year-end adjustments) the financial position and results
of operations of Borrower and its Subsidiaries, in each case as at the end
of
such Fiscal Month and for the period then ended and (ii) any other information
presented is true, correct and complete in all material respects and that there
was no Default or Event of Default in existence as of such time or, if a Default
or Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of
Default;
(2) Quarterly
Budget. Within three (3) Business Days prior
to the end of each Fiscal Quarter, a budget (each, a "Budget")
of Borrower and its Subsidiaries, in substantially the form and containing
similar information as the Original Budget, certified by an officer of
Borrower;
(3) Quarterly
Deliveries. Within forty-five (45) days after the end
of each Fiscal Quarter, a management discussion and analysis which includes
a
comparison to the Budgets covering that Fiscal Quarter and
a comparison of performance for that Fiscal Quarter to the corresponding period
in the prior year;
(4) Annual
Operating Plan. As soon as available, but not later
than thirty (30) days prior to the commencement of each Fiscal Year, an
Operating Plan;
(5) Annual
Audited Financials. Within ninety (90) days after the
end of each Fiscal Year, audited financial statements for Borrower and its
Subsidiaries, consisting of balance sheets and statements of income and retained
earnings and cash flows, setting forth in comparative form in each case the
figures for the previous Fiscal Year, which financial statements shall be
prepared in accordance with GAAP,
certified
without qualification by an independent chartered public accounting firm of
national standing or otherwise acceptable to the Requisite Lenders. Such
financial statements shall be accompanied by:
(a) a
report from such accounting firm to the effect that, in connection with their
audit examination, nothing has come to their attention to cause them to believe
that a Default or Event of Default has occurred (or specifying those Defaults
and Events of Default that they became aware of);
(b) the
annual letters to such accounting firm in connection with their audit
examination detailing contingent liabilities and material litigation
matters;
(c) the
certification of the Chief Financial Officer of Borrower that all such financial
statements present fairly in accordance with GAAP the financial position,
results of operations and statements of cash flows of Borrower and its
Subsidiaries as at the end of such year and for the period then ended, and
that
there was no Default or Event of Default in existence as of such time or, if
a
Default or Event of Default shall have occurred and be continuing, describing
the nature thereof and all efforts undertaken to cure such Default or Event
of
Default; and
(d) a
list of any applications for the registration of any Intellectual Property
with
the Canadian Industrial Design Office, Canadian Patent Office, Canadian
Intellectual Property Office, Canadian Copyright Office or any similar office
or
agency which Borrower or its Subsidiaries have filed in the prior Fiscal
Year;
(6) Management
Letters. Within three (3) Business Days after receipt
thereof by Borrower or its Subsidiaries, copies of all management letters,
exception reports or similar letters or reports received by Borrower or its
Subsidiaries from its independent chartered public accountants;
(7) Default
Notices. As soon as practicable, and in any event
within one (1) Business Day after an executive officer of Borrower has actual
knowledge of the existence of any Default, Event of Default or other event
which
has had or could reasonably be expected to have a Material Adverse Effect or
default by any Person in payment or other performance of its obligations with
respect to Collateral, telephonic or telecopied notice specifying the nature
of
such Default or Event of Default or other event or default, including the
anticipated effect thereof, which notice, if given telephonically, shall be
promptly confirmed in writing on the next Business Day;
(8) Securities
Filings and Press Releases. Promptly upon their
becoming available, copies of (i) all financial statements, reports, notices
and
proxy statements made publicly available by Borrower to its security holders;
(ii) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by Borrower with any securities exchange, commission
or governmental or public or private regulatory authority; and (iii) all press
releases and other statements made available by Borrower to the public
concerning Material Changes or developments in its business;
(9) Subordinated
Debt. As soon as practicable, copies of all material written
notices given or received by Borrower or any of its Subsidiaries with respect
to
any Subordinated Debt, and, two (2) Business Days after Borrower or any of
its
Subsidiaries obtains knowledge of any matured or unmatured event of default
with
respect to any Subordinated Debt, notice of such event of default;
(10) Supplemental
Schedules. Supplemental disclosures, if any, required by
Section 5.6 of the Agreement;
(11) Litigation.
In writing, promptly upon learning thereof, notice of any Litigation commenced
or threatened against Borrower or any of its Subsidiaries that (i) seeks
damages, (ii) seeks injunctive relief,
2
(iii)
alleges criminal misconduct by Borrower or any of its Subsidiaries, (iv) alleges
the violation of any law regarding, or seeks remedies in connection with, any
Environmental Liabilities, or (v) involves any product recall;
(12) Insurance
Notices. In writing, promptly upon learning thereof, disclosure of
losses or casualties required by Section 5.4 of the
Agreement;
(13) Lease
Default Notices. (i) In writing, promptly upon learning thereof,
copies of any and all default notices received under or with respect to any
leased location or warehouse where Collateral is located, and (ii) promptly
such
other notices or documents as Requisite Lenders may request in their sole
discretion;
(14) Lease
Amendments. As soon as practicable, copies of all material
amendments to real estate leases;
(15) Appraisals/Verifications.
Appraisals or verifications of its property and assets as Requisite Lenders
may
request at any time after the occurrence and during the continuance of a Default
or an Event of Default, such appraisals or verifications to be conducted by
an
appraiser or other Person, and in form and substance, satisfactory to Requisite
Lenders, in their sole discretion.
(16) Other
Documents. Such other financial and other information, reports,
statements and reconciliations respecting Borrower's or any of its Subsidiaries'
business or financial condition or the Collateral as Requisite Lenders shall,
from time to time, request in their sole discretion.
(17) Liens.
Promptly upon learning thereof, notice of any Lien (other than Permitted
Encumbrances) or claim made or asserted against any of the
Collateral.
3
ANNEX
C (Section 11.10)
to
CREDIT
AGREEMENT
ADDRESSES
FOR NOTICES
(A) If
to Borrower, at:
▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇-▇▇▇▇▇▇▇,
▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention: ▇▇▇▇
▇▇▇▇▇▇
Senior
Vice-President
and CFO
Telecopier
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Account
Wire Details:
|
Bank
Name:
|
HSBC
Bank Canada
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇
▇▇▇
▇▇▇
|
|
|
Bank
no.:
|
016
|
|
|
Transit:
|
▇▇▇▇▇
|
|
|
Cdn$
account no.: (for Canadian Dollar wire transfers)
|
▇▇▇-▇▇▇▇▇▇-▇▇▇
Swift
Code ▇▇▇▇▇▇▇▇▇▇▇
|
|
|
US$
account no.: (for US Dollar wire
transfers)
|
▇▇▇-▇▇▇▇▇▇-▇▇▇
|
with
a
copy to:
Fasken
▇▇▇▇▇▇▇▇▇ LLP
Stock
Exchange Tower
▇▇
▇▇▇
▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention:
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Telecopier
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Telephone
No.:
(▇▇▇)
▇▇▇-▇▇▇▇
|
(B)
|
If
to B IV Capital Partners, L.P., GMAM Investment Funds Trust II, DDJ
High
Yield Fund, DDJ October Fund Onshore Feeder, Limited Partnership,
October
OS Investment Sub I, Ltd., October OS Investment Sub II, Ltd., DDJ/Ontario
OS Investment Sub I, Ltd. and DDJ/Ontario OS Investment Sub II, Ltd.,
at
:
|
DDJ
Capital Management, LLC
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇
Telecopier
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Telecopier
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Account
Wire Details:
B
IV Capital Partners, L.P.
|
Bank
Name:
|
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Bank, NY
|
|
ABA#:
|
▇▇▇▇▇▇▇▇▇
|
|
F/A/O:
|
▇▇▇▇▇▇▇
Sachs & Co., N.Y.
|
|
A/C#:
|
▇▇▇-▇-▇▇▇▇▇▇
|
|
F/F/C:
|
B
IV Capital Partners LP
|
|
A/C#:
|
002-091726
|
GMAM
Investment Funds Trust II for the account of the Promark Alternative High Yield
Bond Fund (Account No. 7M2E)
|
Bank
Name:
|
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇
|
|
ABA#:
|
011
000 028
|
|
Ref:
|
GMAM
Investment Funds Trust II
|
|
Account
Number:
|
7M2E
|
|
DOA#:
|
26572875
|
2
GMAM
Investment Funds Trust IIfor the account of the Promark
Alternative High Yield Bond Fund (Account No. 7MWD)
|
Bank
Name:
|
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇
|
|
ABA#:
|
011
000 028
|
|
Ref:
|
GMAM
Investment Funds Trust II
|
|
Account
Number:
|
▇▇▇▇▇▇▇▇
|
|
Ref:
|
Account
Number 7MWD
|
DDJ
High Yield Fund
|
Bank
Name:
|
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Bank
New
York, NY
|
|
ABA:
|
▇▇▇▇▇▇▇▇▇
|
|
Account
Number:
|
▇▇▇▇▇
▇▇▇▇▇
|
|
Account
Name:
|
Royal
Bank of Canada
|
|
FFC:
|
0959
1409 5675
|
|
Name:
|
Royal
Trust
|
|
FBO:
|
▇▇▇▇▇▇▇▇▇
|
|
Name:
|
DDJ
Canadian High Yield Fund
|
|
Attention:
|
▇▇▇▇▇▇
▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
Global
Credit Reporting
|
DDJ
October Fund Onshore Feeder, Limited Partnership
|
Bank
Name:
|
Citibank,
N.A. New York
|
|
ABA#:
|
▇▇▇▇▇▇▇▇▇
|
|
Account:
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co., NY
|
|
Account
Number:
|
▇▇▇▇▇▇▇▇
|
|
Account
Name:
|
DDJ
October Fund
Onshore
Feeder,
Limited
Partnership
|
|
Account
No.:
|
038C4323
|
3
October
OS Investment Sub I, Ltd.
|
Bank
Name:
|
Citibank,
N.A. New York
|
|
ABA#:
|
▇▇▇-▇▇▇-▇▇▇
|
|
F/A/O:
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co., NY
|
|
A/C#:
|
38890774
|
|
F/F/C:
|
October
OS Investment Sub I, Ltd. (formerly known as October OS Investment
Sub
2005, Ltd.)
|
|
A/C#:
|
▇▇▇▇▇▇▇▇▇
|
October
OS Investment Sub II, Ltd.
|
Bank
Name:
|
Citibank,
N.A. New York
|
|
ABA#:
|
▇▇▇-▇▇▇-▇▇▇
|
|
F/A/O:
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co., NY
|
|
A/C#:
|
38890774
|
|
F/F/C:
|
October
OS Investment Sub II, Ltd. (formerly known as October OS Investment
Sub
2006, Ltd.)
|
|
A/C#:
|
038-C9640
|
DDJ/Ontario
OS Investment Sub I, Ltd.
|
Bank
Name:
|
Citibank
(111 Wall Street, New York, NY)
|
|
ABA#:
|
▇▇▇-▇▇▇-▇▇▇
|
|
F/A/O:
|
Bear
▇▇▇▇▇▇▇ Securities Corp.
|
|
A/C#:
|
09253186
|
|
F/F/C:
|
DDJ/Ontario
OS Investment Sub I, Ltd. (formerly known as DDJ/Ontario OS Investment
Sub
2006, Ltd.)
|
|
A/C#:
|
102-34138
|
DDJ/Ontario
OS Investment Sub II, Ltd.
|
Bank
Name:
|
Citibank
(111 Wall Street, New York, NY)
|
|
ABA#:
|
▇▇▇-▇▇▇-▇▇▇
|
|
F/A/O:
|
Bear
▇▇▇▇▇▇▇ Securities Corp.
|
|
A/C#:
|
09253186
|
|
F/F/C:
|
DDJ/Ontario
OS Investment Sub II, Ltd.
|
|
A/C#:
|
▇▇▇-▇▇▇▇▇-▇▇
|
4
(C) If
to Guardian Capital L.P., at:
▇▇▇
▇▇▇
▇▇. ▇. Commerce Court West, Ste. 3100
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇
Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Account
Wire Details:
ScotiaMcLeod
Pinnacle High Yield
CAD
Wire
Transactions:
|
Financial
Institution Name:
|
Toronto
Treasury (BIC: ▇▇▇▇▇▇▇▇▇▇▇)
|
|
|
City:
|
Toronto
|
|
|
Account
Number:
|
SBOSCATXXXX
|
|
|
Reference:
|
JFQ3
|
US
Wire
Transactions:
|
Financial
Institution Name:
|
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ ▇▇.
|
|
|
▇▇▇
Number:
|
▇▇▇▇▇▇▇▇▇
|
|
|
Beneficiary
Account:
|
▇▇▇▇▇▇▇▇
|
|
|
Beneficiary:
|
Pinnacle
High Yield Income, JFQ3
|
GGOF
Canadian High Yield Bond Fund
CAD
Wire
Transactions:
|
Financial
Institution Name:
|
Canadian
Imperial Bank of Commerce
|
|
|
Receiver/Intermediary:
|
▇▇▇▇▇▇▇▇
|
|
|
Account
with Institution:
|
▇▇▇▇▇▇▇▇▇▇▇
|
5
US
Wire
Transactions:
|
Financial
Institution Name:
|
Federal
Reserve Bank of Boston
|
|
|
City:
|
Boston
|
|
|
ABA
Number:
|
▇▇▇▇▇▇▇▇▇
|
|
|
DDA
Number:
|
065447
|
Vector
High Yield Bond
Fund
CAD
Wire
Transactions:
|
Financial
Institution Name:
|
Canadian
Imperial Bank of Commerce
|
|
|
Receiver/Intermediary:
|
▇▇▇▇▇▇▇▇
|
|
|
Account
with Institution:
|
▇▇▇▇▇▇▇▇▇▇▇
|
US
Wire
Transactions:
|
Financial
Institution Name:
|
Federal
Reserve Bank of Boston
|
|
|
City:
|
Boston
|
|
|
ABA
Number:
|
▇▇▇▇▇▇▇▇▇
|
|
|
DDA
Number:
|
065447
|
GGOF
Diversified Monthly Income Fund
CAD
Wire
Transactions:
|
Financial
Institution Name:
|
Canadian
Imperial Bank of Commerce
|
|
|
Receiver/Intermediary:
|
▇▇▇▇▇▇▇▇
|
|
|
Account
with Institution:
|
▇▇▇▇▇▇▇▇▇▇▇
|
6
US
Wire
Transactions:
|
Financial
Institution Name:
|
Federal
Reserve Bank of Boston
|
|
|
City:
|
Boston
|
|
|
ABA
Number:
|
▇▇▇▇▇▇▇▇▇
|
|
|
DDA
Number:
|
065447
|
7
(D) If
to Greywolf Loan Participation LLC, at:
▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇
▇▇▇▇
Telecopier
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Account
Wire Details:
US$
Fed
Wire Instructions
|
Name:
|
Chase
Manhattan Bank, N.Y.
|
|
ABA#:
|
▇▇▇-▇▇▇-▇▇▇
|
|
F/A/O:
|
▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., N.Y.
|
|
A/C#:
|
▇▇▇-▇-▇▇▇▇▇▇
|
|
F/F/C:
|
Greywolf
Loan Participation LLC
|
|
A/C#:
|
002-034155
|
8
(E) If
to North Pole Capital Master Fund, at:
▇▇▇
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇
Telecopier
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Account
Wire Details:
Cdn$
Wire
Transactions:
|
Swift
Code:
|
▇▇▇▇▇▇▇▇
|
|
Bank
Name:
|
Bank
of Montreal
|
|
City:
|
Montreal
|
|
Beneficiary:
|
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇ Inc.,
Toronto,
Ontario
|
|
Sub
Account:
|
▇▇▇-▇▇▇▇▇-▇▇
|
US$
Wire Transactions:
|
Bank
Name:
|
Bank
of New York
|
|
Address:
|
▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇
|
|
ABA
Number:
|
▇▇▇-▇▇▇-▇▇▇
|
|
AC
Number
|
▇▇▇▇-▇▇▇-▇▇▇
|
|
Sub
Account:
|
▇▇▇-▇▇▇▇▇-▇▇
|
9
|
(F)
|
If
to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International plc
at:
|
▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier
No.:
▇▇▇▇ ▇▇▇ ▇▇▇▇
Telephone
No.:
0207 677 4608
Account
Wire Details:
Cdn$
Transactions:
Bank
Name: Royal
Bank of Canada
Swift
Code: ▇▇▇▇▇▇▇▇
Account
Number:
095911006212
Account
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Co International
plc
Reference:
SR Telecom, Inc.
US$
Transactions:
Bank
Name:
▇▇ ▇▇▇▇▇▇ Chase NY
ABA:
021000021
Account
Number:
▇▇▇▇▇▇▇▇
Account
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and Co International plc
Reference:
SR Telecom, Inc.
|
(G)
|
If
to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Principal Strategies, Inc.
at:
|
▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier
No.:
▇▇▇▇ ▇▇▇ ▇▇▇▇
Telephone
No.:
0207 677 4608
Account
Wire Details:
Bank
Name:
Citibank, N.A.
ABA:
021000089
Account
Number:
▇▇▇▇▇▇▇▇
Account
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Principal
Strategies
Reference:
SR Telecom, Inc.
10
|
(H)
|
If
to Thales Holdings Ltd., at:
|
▇▇▇
▇▇▇▇▇▇▇▇ – 45th Floor
New
York, N.Y. 10005
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
telephone
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Account
Wire Details:
Bank
Name:
JPMorgan Chase
ABA: ▇▇▇-▇▇▇-▇▇▇
Account
Number: 777775085
Account
Name: Thales
Holdings Ltd.
(I) All
notices to a Lender shall be copied to ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, at:
3400
One
First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇
▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention:
S. ▇▇▇▇▇▇▇ ▇▇▇▇
Telecopier
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
(J) If
to Administrative Agent and Collateral Agent, at:
BNY
Trust
Company of Canada
▇▇▇▇▇
▇▇▇▇
▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention:
Senior Trust Officer
Telecopier
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Account
Wire Details:
US$
Wire Instructions for Wires that
originate within the U.S.:
|
Bank
Name:
|
The
Bank of New York
|
|
ABA#:
|
▇▇▇-▇▇▇-▇▇▇
|
|
Account
Name:
|
BNYAS
Agent Services Clearing Account
|
|
Account
#:
|
8900415460
|
|
Reference:
|
SR
Telecom
|
|
Attention:
|
▇▇▇▇
▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇-▇▇▇▇▇▇.▇▇▇)
▇▇▇-▇▇▇-▇▇▇▇
|
11
US$ Wire Instructions for Wires that originate within
Canada:
|
Bank
Name:
|
The
Bank of New York
|
|
City:
|
New
York, NY
|
|
SWIFT
Code:
|
▇▇▇▇▇▇▇▇
|
|
Beneficiary:
|
BNYAS
Agent Services Clearing Account
|
|
FFC:
Acct.
|
8900415460
|
|
Reference:
|
SR
Telecom
|
|
Attention:
|
▇▇▇▇
▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇-▇▇▇▇▇▇.▇▇▇)
▇▇▇-▇▇▇-▇▇▇▇
|
with
a
copy to:
The
Bank
of New York, Asset Solutions
▇▇▇
▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇
▇▇▇▇▇
Attention:
Agent Services – ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Telephone
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
Stikeman
Elliott LLP
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier
No.: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone
No.: (▇▇▇)
▇▇▇-▇▇▇▇
12
ANNEX
D
to
CREDIT
AGREEMENT
DISCLOSURE
LETTERS
Schedule
1.1(1)(a)
Initial
Loans
|
Initial
Lender
|
Share
of Initial Loans
|
|
B
IV Capital Partners, L.P.
|
US$12,293,763.64
|
|
GMAM
Investment Funds Trust II for the account of the Promark Alternative
High
Yield Bond Fund (Account No. 7M2E)
|
US$477,766.87
|
|
GMAM
Investment Funds Trust II for the account of the Promark Alternative
High
Yield Bond Fund (Account No. 7MWD)
|
US$412,744.64
|
|
DDJ
High Yield Fund
|
US$3,476,488.00
|
|
DDJ
October Fund Onshore Feeder, Limited Partnership
|
US$1,109,810.23
|
|
October
OS Investment Sub I, Ltd.
|
US$586,418.00
|
|
October
OS Investment Sub II, Ltd.
|
US$69,493.35
|
|
DDJ/Ontario
OS Investment Sub I, Ltd.
|
US$197,265.34
|
|
Greywolf
Loan Participation LLC
|
US$10,698,750.00
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ Principal Strategies, Inc.
|
US$1,585,000
|
|
Total
Initial Loans
|
US$30,907,500.07
|
Schedule
1.1(2)(a)
June
2007 Loans
|
June
2007 Lender
|
Share
of June 2007 Loans
|
|
B
IV Capital Partners, L.P.
|
Cdn$7,686,170
|
|
GMAM
Investment Funds Trust II, for the account of the Promark Alternative
High
Yield Bond Fund (Account No. 7M2E)
|
Cdn$310,120
|
|
GMAM
Investment Funds Trust II, for the account of the Promark Alternative
High
Yield Bond Fund (Account No. 7MWD)
|
Cdn$315,250
|
|
DDJ
October Fund Onshore Feeder, Limited Partnership
|
Cdn$676,330
|
|
October
OS Investment Sub II, Ltd.
|
Cdn$434,560
|
|
DDJ/Ontario
OS Investment Sub II, Ltd.
|
Cdn$577,570
|
|
Greywolf
Loan Participation LLC
|
Cdn$10,000,000
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ Principal Strategies, Inc.
|
Cdn$10,000,000
|
|
Thales
Holdings Ltd.
|
Cdn$5,000,000
|
|
Total
June 2007 Loans
|
Cdn$35,000,000
|
Schedule
1.1(3)(a)
Supplemental
Loan Commitments
|
Supplemental
Lender
|
Commitment
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ Principal Strategies, Inc.
|
Cdn$10,000,000
|
|
Total
Supplemental Loan Commitments
|
Cdn$10,000,000
|
Schedule
1.1(4)(a)
Convertible
Term A Loan
|
Convertible
Term A Loan Lender
|
Share
of Convertible Term A Loan
|
|
B
IV Capital Partners, L.P.
|
Cdn$7,163,828.15
|
|
GMAM
Investment Funds Trust II, for the account of the Promark Alternative
High
Yield Bond Fund (Account No. 7M2E)
|
Cdn$300,827.55
|
|
GMAM
Investment Funds Trust II, for the account of the Promark Alternative
High
Yield Bond Fund (Account No. 7MWD)
|
Cdn$386,226.90
|
|
DDJ/Ontario
OS Investment Sub I Ltd.
|
Cdn$1,265,123.20
|
|
DDJ
October Fund Onshore Feeder, Limited Partnership
|
Cdn$603,403.88
|
|
October
OS Investment Sub II, Ltd.
|
Cdn$445,682.18
|
|
Greywolf
Loan Participation LLC
|
Cdn$5,273,972.32
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. International plc
|
Cdn$3,677,558.23
|
|
Total
Convertible Term A Loan
|
Cdn$19,116,622.41
|
Schedule
1.5(a)
Convertible
Term B Loan
|
Convertible
Term B Loan Lender
|
Share
of Convertible Term B Loan
|
|
ScotiaMcLeod
Pinnacle High Yield
|
US$867,300
|
|
GGOF
Canadian High Yield Bond Fund
|
US$6,026,975
|
|
Vector
High Yield Bond Fund
|
US$57,775
|
|
GGOF
Diversified Monthly Income Fund
|
US$180,450
|
|
North
Pole Capital Master Fund
|
US$1,585,000
|
|
Total
Convertible Term B Loan
|
US$8,717,500
|
Schedule
1.1(6)(a)
Convertible
Term C Loan
|
Convertible
Term C Loan Lender
|
Share
of Convertible Term C Loan
|
|
North
Pole Capital Master Fund
|
Cdn$883,377.59
|
|
Total
Convertible Term C Loan
|
Cdn$883,377.59
|
Exhibit
1.1(2)(b)
FORM
OF
JUNE ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
[Date]
Cdn$[·]
FOR
VALUE
RECEIVED, the undersigned, SR Telecom Inc., a Canadian corporation
("Borrower"), HEREBY PROMISES TO PAY to the order of
[NAME OF JUNE 2007 LENDER] ("June 2007
Lender") at the offices of June 2007 Lender, at its address at
[·],
or at such other place as June 2007 Lender may designate from time to time
in
writing, in lawful money of the United States of America and in immediately
available funds, the amount of [·]
(US$[·]),
or if less, the aggregate unpaid amount of its June 2007 Loan Pro Rata Share
of
the June 2007 Loan made to the undersigned and evidenced hereby or in the Loan
Accounts. All capitalized terms used but not otherwise defined herein have
the
meanings given to them in the Amended and Restated Credit Agreement (as
hereinafter defined) or in Annex A thereto.
This
June
2007 Loan Note is issued pursuant to that certain amended and restated credit
agreement dated as of the date hereof between Borrower, Agents and Lenders
(including all annexes, exhibits and schedules thereto and as the same may
from
time to time be amended, restated, modified or supplemented, the
"Amended and Restated Credit Agreement"), and is entitled to
the benefit and security of the Amended and Restated Credit Agreement, the
Collateral Documents and all of the other Loan Documents referred to therein.
Reference is hereby made to the Amended and Restated Credit Agreement for a
statement of all of the terms and conditions under which the June 2007 Loan
evidenced hereby or in the Loan Accounts is made and is to be repaid. The
principal balance of the June 2007 Loan, the rates of interest applicable
thereto and the date and amount of each payment made on account of the principal
thereof, shall be recorded by Administrative Agent in the Loan Accounts
maintained in respect of the June 2007 Loan; provided that the
failure of Administrative Agent to make any such recordation shall not affect
the obligations of Borrower to make a payment when due of any amount owing
under
the Amended and Restated Credit Agreement or this June 2007 Loan
Note.
The
principal amount of the indebtedness evidenced hereby shall be payable in the
amounts and on the dates specified in the Amended and Restated Credit Agreement.
Interest thereon shall be paid until such principal amount is paid in full
at
such interest rates and at such times, and pursuant to such calculations, as
are
specified in the Amended and Restated Credit Agreement. The terms of the Amended
and Restated Credit Agreement are hereby incorporated herein by
reference.
If
any
payment on this June 2007 Loan Note becomes due and payable on a day other
than
a Business Day, the maturity thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.
Upon
and
after the occurrence of any Event of Default, this June 2007 Loan Note may,
as
provided in the Amended and Restated Credit Agreement, and without demand,
notice or legal process of any kind, be declared, and immediately shall become,
due and payable.
Time
is
of the essence of this June 2007 Loan Note. Demand, presentment, protest and
notice of nonpayment and protest are hereby waived by Borrower.
2
Except
as
provided in the Amended and Restated Credit Agreement, this June 2007 Loan
Note
may not be assigned by June 2007 Lender to any Person.
THIS
JUNE 2007 LOAN NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE PROVINCE OF ONTARIO APPLICABLE TO CONTRACTS MADE AND PERFORMED
IN
THAT PROVINCE.
|
By:
|
||
|
Name:
Title:
|
||
|
By:
|
||
|
Name:
Title:
|
||
Exhibit
1.1(3)(a)
FORM
OF
SUPPLEMENTAL LOAN DRAW REQUEST
TO: BNY
Trust Company of Canada, as Administrative Agent
AND
TO:
Supplemental Lenders as defined in the Credit Agreement
(defined below)
|
RE:
|
Supplemental
Loan to be made pursuant to the Amended and Restated Credit Agreement
dated as of June 27, 2007 between the undersigned, Agents and Lenders
(as
the same may from time to time be amended, restated, modified or
supplemented, the "Credit Agreement"). All capitalized
terms not otherwise defined in this Notice of Supplemental 2007
Loan shall
have the meanings given to them in the Credit
Agreement.
|
|
DATE:
|
[·]
|
|
A.
|
The
undersigned, as Borrower under to the Credit Agreement, irrevocably
requests that the Supplemental Lenders make a Supplemental Loan on
[Date] in the aggregate amount of
[Cdn$·]
(the "Supplemental Loan Amount")
to:
|
|
Borrower:
|
|
|
Address:
|
▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇-▇▇▇▇▇▇▇,
▇▇▇▇▇▇
▇▇▇
▇▇▇
|
|
Name
of Contact at Borrower:
|
[·]
Telecopier
No.: [·]
Telephone
No.: [·]
|
|
Bank:
|
Canadian
Imperial Bank of Commerce
|
|
Bank
Address:
|
▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇,
▇▇▇▇▇▇
▇▇▇
▇▇▇
Attention: [·]
Telecopier
No.: [·]
Telephone
No.: [·]
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Wire
Details:
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Bank
No.: 010
Transit:
00941
Cdn$
account no.: 82-04713
US$
account no.: 02-39518
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B. The
undersigned, as Borrower pursuant to the Credit Agreement, hereby:
(1) represents
and warrants that all of the conditions contained in Section 2.2 of the
Credit Agreement have been satisfied on and as of the date hereof, and will
continue to be satisfied on and as of the date of the Supplemental Loan
requested hereby, before and after giving effect thereto and to the application
of the proceeds of the requested Supplemental Loan;
2
(2) certifies
that, after receiving the proceeds of the requested Supplemental Loan, the
aggregate Cash and Cash Equivalents of the Borrower and its Subsidiaries, less
Restricted Cash, does not exceed Cdn$5,000,000;
(3) reaffirms
the continuance of Collateral Agent's valid and perfected first priority Liens
pursuant to the Collateral Documents; and
(4) represents
and warrants, both before and after giving effect to the Supplemental Loan
and
to the application of the proceeds of the requested Supplemental Loan, no
Default or Event of Default has occurred or is continuing.
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By:
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Name:
Title:
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By:
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Name:
Title:
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I/We
have the authority to bind the
Corporation.
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Exhibit
1.1(3)(b)
FORM
OF
SUPPLEMENTAL LOAN NOTE
Toronto,
Ontario
[Date]
Cdn$[·]
FOR
VALUE
RECEIVED, the undersigned, SR Telecom Inc., a Canadian corporation
("Borrower"), HEREBY PROMISES TO PAY to the order of
[NAME OF SUPPLEMENTAL LENDER] ("Supplemental
Lender") at the offices of Supplemental Lender, at its address at
[·],
or at such other place as Supplemental Lender may designate from time to time
in
writing, in lawful money of the United States of America and in immediately
available funds, the amount of [·]
(US$[·]),
or if less, the aggregate unpaid amount of its Supplemental Loan Pro Rata Share
of the Supplemental Loan made to the undersigned and evidenced hereby or in
the
Loan Accounts. All capitalized terms used but not otherwise defined herein
have
the meanings given to them in the Amended and Restated Credit Agreement (as
hereinafter defined) or in Annex A thereto.
This
Supplemental Loan Note is issued pursuant to that certain amended and restated
credit agreement dated as of the date hereof between Borrower, Agents and
Lenders (including all annexes, exhibits and schedules thereto and as the same
may from time to time be amended, restated, modified or supplemented, the
"Amended and Restated Credit Agreement"), and is entitled to
the benefit and security of the Amended and Restated Credit Agreement, the
Collateral Documents and all of the other Loan Documents referred to therein.
Reference is hereby made to the Amended and Restated Credit Agreement for a
statement of all of the terms and conditions under which the Supplemental Loan
evidenced hereby or in the Loan Accounts is made and is to be repaid. The
principal balance of the Supplemental Loan, the rates of interest applicable
thereto and the date and amount of each payment made on account of the principal
thereof, shall be recorded by Administrative Agent in the Loan Accounts
maintained in respect of the Supplemental Loan; provided that the
failure of Administrative Agent to make any such recordation shall not affect
the obligations of Borrower to make a payment when due of any amount owing
under
the Amended and Restated Credit Agreement or this Supplemental Loan
Note.
The
principal amount of the indebtedness evidenced hereby shall be payable in the
amounts and on the dates specified in the Amended and Restated Credit Agreement.
Interest thereon shall be paid until such principal amount is paid in full
at
such interest rates and at such times, and pursuant to such calculations, as
are
specified in the Amended and Restated Credit Agreement. The terms of the Amended
and Restated Credit Agreement are hereby incorporated herein by
reference.
If
any
payment on this Supplemental Loan Note becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such
extension.
Upon
and
after the occurrence of any Event of Default, this Supplemental Loan Note may,
as provided in the Amended and Restated Credit Agreement, and without demand,
notice or legal process of any kind, be declared, and immediately shall become,
due and payable.
Time
is
of the essence of this Supplemental Loan Note. Demand, presentment, protest
and
notice of nonpayment and protest are hereby waived by Borrower.
Except
as
provided in the Amended and Restated Credit Agreement, this Supplemental Loan
Note may not be assigned by Supplemental Lender to any Person.
THIS
SUPPLEMENTAL LOAN NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE
LAWS OF THE PROVINCE OF ONTARIO APPLICABLE TO CONTRACTS MADE AND PERFORMED
IN
THAT PROVINCE.
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By:
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Name:
Title:
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By:
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Name:
Title:
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2
Exhibit
1.1(4)(b)
FORM
OF
CONVERTIBLE TERM A LOAN NOTE
Toronto,
Ontario
[Date]
Cdn$[·]
FOR
VALUE
RECEIVED, the undersigned, SR Telecom Inc., a Canadian corporation
("Borrower"), HEREBY PROMISES TO PAY to the order of
[NAME OF CONVERTIBLE TERM A LOAN LENDER] ("Convertible
Term A Loan Lender") at the offices of Convertible Term A Loan Lender,
at its address at [·],
or at such other place as Convertible Term A Loan Lender may designate from
time
to time in writing, in lawful money of Canada and in immediately available
funds, the amount of [·]
(Cdn$[·]),
or if less, the aggregate unpaid amount of its Convertible
Term A Loan made to the undersigned and evidenced hereby or in the Loan
Accounts. All capitalized terms used but not otherwise defined herein have
the
meanings given to them in the Amended and Restated Credit Agreement (as herein
defined) or in Annex A thereto.
This
Convertible Term A Loan Note (the
"Note") is issued pursuant to the Amended and Restated Credit
Agreement dated as of June ·, 2007 between
Borrower, BNY Trust Company of Canada, as Administrative Agent and Collateral
Agent, and the Lenders named therein, as the same may be amended, restated,
modified or supplemented from time to time (the "Amended and Restated
Credit Agreement"), and is entitled to the benefit and security of the
Amended and Restated Credit Agreement, the Collateral Documents and all of
the
other Loan Documents referred to therein. Reference is hereby made to the
Amended and Restated Credit Agreement for a statement of all of the terms and
conditions under which the Convertible Term A Loan evidenced hereby or in the
Loan Accounts is made, is to be repaid and may be converted into Common Shares
of Borrower. The principal balance of the Convertible Term A Loan, the rates
of
interest applicable thereto and the date and amount of each payment made on
account of the principal thereof, shall be recorded by Administrative Agent
in
the Loan Accounts maintained in respect of the Convertible Term A Loan;
provided that the failure of Administrative Agent to make any such
recordation shall not affect the obligations of Borrower to make a payment
when
due of any amount owing under the Amended and Restated Credit Agreement or
this
Note.
The
principal amount of the
indebtedness evidenced hereby shall be payable in the amounts and on the dates
specified in the Amended and Restated Credit Agreement. Interest thereon shall
be paid until such principal amount is paid in full at such interest rates
and
at such times, and pursuant to such calculations, as are specified in the
Amended and Restated Credit Agreement. The terms of the Amended and Restated
Credit Agreement are hereby incorporated herein by reference including, without
limitation, the conversion option of this Note into Common Shares of Borrower
pursuant to Section 1.1(5) of the Amended and Restated Credit
Agreement.
If
any payment on this Note becomes due
and payable on a day other than a Business Day, the maturity thereof shall
be
extended to the next succeeding Business Day and, with respect to payments
of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
Upon
and after the occurrence of any
Event of Default, this Note may, as provided in the Amended and Restated Credit
Agreement, and without demand, notice or legal process of any kind, be declared,
and immediately shall become, due and payable.
Time
is of the essence in this Note.
Demand, presentment, protest and notice of nonpayment and protest are hereby
waived by Borrower.
Except
as provided in the Amended and
Restated Credit Agreement, this Note may not be assigned by Convertible Term
A
Loan Lender to any Person.
THIS
NOTE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE
OF ONTARIO APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT
PROVINCE.
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SR
TELECOM INC.
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By:
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Name:
Title:
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By:
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Name:
Title:
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2
Exhibit
1.1(5)(b)
FORM
OF
CONVERTIBLE TERM B LOAN NOTE
Toronto,
Ontario
[Date]
Cdn$[·]
FOR
VALUE
RECEIVED, the undersigned, SR Telecom Inc., a Canadian corporation
("Borrower"), HEREBY PROMISES TO PAY to the order of
[NAME OF CONVERTIBLE TERM B LOAN LENDER] ("Convertible
Term B Loan Lender") at the offices of Convertible Term B Loan Lender,
at its address at [·],
or at such other place as Convertible Term B Loan Lender may designate from
time
to time in writing, in lawful money of Canada and in immediately available
funds, the amount of [·]
(Cdn$[·]),
or if less, the aggregate unpaid amount of its Convertible
Term B Loan made to the undersigned and evidenced hereby or in the Loan
Accounts. All capitalized terms used but not otherwise defined herein have
the
meanings given to them in the Amended and Restated Credit Agreement (as herein
defined) or in Annex A thereto.
This
Convertible Term B Loan Note (the
"Note") is issued pursuant to the Amended and Restated Credit
Agreement dated as of June ·, 2007 between
Borrower, BNY Trust Company of Canada, as Administrative Agent and Collateral
Agent, and the Lenders named therein, as the same may be amended, restated,
modified or supplemented from time to time (the "Amended and Restated
Credit Agreement"), and is entitled to the benefit and security of the
Amended and Restated Credit Agreement, the Collateral Documents and all of
the
other Loan Documents referred to therein. Reference is hereby made to the
Amended and Restated Credit Agreement for a statement of all of the terms and
conditions under which the Convertible Term B Loan evidenced hereby or in the
Loan Accounts is made, is to be repaid and may be converted into Common Shares
of Borrower. The principal balance of the Convertible Term B Loan, the rates
of
interest applicable thereto and the date and amount of each payment made on
account of the principal thereof, shall be recorded by Administrative Agent
in
the Loan Accounts maintained in respect of the Convertible Term B Loan;
provided that the failure of Administrative Agent to make any such
recordation shall not affect the obligations of Borrower to make a payment
when
due of any amount owing under the Amended and Restated Credit Agreement or
this
Note.
The
principal amount of the
indebtedness evidenced hereby shall be payable in the amounts and on the dates
specified in the Amended and Restated Credit Agreement. Interest thereon shall
be paid until such principal amount is paid in full at such interest rates
and
at such times, and pursuant to such calculations, as are specified in the
Amended and Restated Credit Agreement. The terms of the Amended and Restated
Credit Agreement are hereby incorporated herein by reference including, without
limitation, the conversion option of this Note into Common Shares of Borrower
pursuant to Section 1.1(5) of the Amended and Restated Credit
Agreement.
If
any payment on this Note becomes due
and payable on a day other than a Business Day, the maturity thereof shall
be
extended to the next succeeding Business Day and, with respect to payments
of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
Upon
and after the occurrence of any
Event of Default, this Note may, as provided in the Amended and Restated Credit
Agreement, and without demand, notice or legal process of any kind, be declared,
and immediately shall become, due and payable.
Time
is of the essence in this Note.
Demand, presentment, protest and notice of nonpayment and protest are hereby
waived by Borrower.
Except
as provided in the Amended and
Restated Credit Agreement, this Note may not be assigned by Convertible Term
B
Loan Lender to any Person.
THIS
NOTE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE
OF ONTARIO APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT
PROVINCE.
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SR
TELECOM INC.
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By:
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Name:
Title:
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By:
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Name:
Title:
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2
Exhibit
1.1(6)(b)
FORM
OF
CONVERTIBLE TERM C LOAN NOTE
Toronto,
Ontario
[Date]
Cdn$[·]
FOR
VALUE
RECEIVED, the undersigned, SR Telecom Inc., a Canadian corporation
("Borrower"), HEREBY PROMISES TO PAY to the order of
[NAME OF CONVERTIBLE TERM C LOAN LENDER] ("Convertible
Term C Loan Lender") at the offices of Convertible Term C Loan Lender,
at its address at [·],
or at such other place as Convertible Term C Loan Lender may designate from
time
to time in writing, in lawful money of Canada and in immediately available
funds, the amount of [·]
(Cdn$[·]),
or if less, the aggregate unpaid amount of its Convertible
Term C Loan made to the undersigned and evidenced hereby or in the Loan
Accounts. All capitalized terms used but not otherwise defined herein have
the
meanings given to them in the Amended and Restated Credit Agreement (as herein
defined) or in Annex A thereto.
This
Convertible Term C Loan Note (the
"Note") is issued pursuant to the Amended and Restated Credit
Agreement dated as of June ·, 2007 between
Borrower, BNY Trust Company of Canada, as Administrative Agent and Collateral
Agent, and the Lenders named therein, as the same may be amended, restated,
modified or supplemented from time to time (the "Amended and Restated
Credit Agreement"), and is entitled to the benefit and security of the
Amended and Restated Credit Agreement, the Collateral Documents and all of
the
other Loan Documents referred to therein. Reference is hereby made to the
Amended and Restated Credit Agreement for a statement of all of the terms and
conditions under which the Convertible Term C Loan evidenced hereby or in the
Loan Accounts is made, is to be repaid and may be converted into Common Shares
of Borrower. The principal balance of the Convertible Term C Loan, the rates
of
interest applicable thereto and the date and amount of each payment made on
account of the principal thereof, shall be recorded by Administrative Agent
in
the Loan Accounts maintained in respect of the Convertible Term C Loan;
provided that the failure of Administrative Agent to make any such
recordation shall not affect the obligations of Borrower to make a payment
when
due of any amount owing under the Amended and Restated Credit Agreement or
this
Note.
The
principal amount of the
indebtedness evidenced hereby shall be payable in the amounts and on the dates
specified in the Amended and Restated Credit Agreement. Interest thereon shall
be paid until such principal amount is paid in full at such interest rates
and
at such times, and pursuant to such calculations, as are specified in the
Amended and Restated Credit Agreement. The terms of the Amended and Restated
Credit Agreement are hereby incorporated herein by reference including, without
limitation, the conversion option of this Note into Common Shares of Borrower
pursuant to Section 1.1(5) of the Amended and Restated Credit
Agreement.
If
any payment on this Note becomes due
and payable on a day other than a Business Day, the maturity thereof shall
be
extended to the next succeeding Business Day and, with respect to payments
of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
Upon
and after the occurrence of any
Event of Default, this Note may, as provided in the Amended and Restated Credit
Agreement, and without demand, notice or legal process of any kind, be declared,
and immediately shall become, due and payable.
Time
is of the essence in this Note.
Demand, presentment, protest and notice of nonpayment and protest are hereby
waived by Borrower.
Except
as provided in the Amended and
Restated Credit Agreement, this Note may not be assigned by Convertible Term
C
Loan Lender to any Person.
THIS
NOTE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE
OF ONTARIO APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT
PROVINCE.
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SR
TELECOM INC.
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By:
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Name:
Title:
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By:
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Name:
Title:
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2
Exhibit
1.1(7)(a)
Conversion
Form
The
undersigned owner of a Convertible Term Loan Note and Convertible PIK Note,
as
the case may be, (collectively, the "Notes") issued by SR
Telecom Inc. ("Borrower") hereby
irrevocably exercises its option to convert the Notes and accrued and unpaid
interest thereon into fully paid and non-assessable Common Shares in accordance
with the terms of the Amended and Restated Credit Agreement dated as of June
27,
2007 between Borrower, BNY Trust Company of Canada, as Administrative Agent
and
Collateral Agent, and the lenders party thereto, as amended, restated, modified
or supplemented from time to time and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned registered
holder of the Notes, unless a different name has been indicated in the
assignment below. If shares are to be issued in the name of a person other
than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account
of
such transfer accompanies this Conversion Notice.
Dated:_______________________
Amount
of
Notes and accrued and unpaid interest thereon to be converted:
Cdn$_________________________
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Signature
(for conversion only)
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If
the Common Shares are to be issued and registered otherwise than
to the
undersigned, please print or typewrite name and address, including
postal
code/zip code, and social security, social insurance or other taxpayer
identification number.
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Exhibit
1.4(3)
Form
of PIK Note
FORM
OF
PIK NOTE
Toronto,
Ontario
[Date]
US$[·]
FOR
VALUE
RECEIVED, the undersigned, SR Telecom Inc., a Canadian corporation
("Borrower"), HEREBY PROMISES TO PAY to [NAME OF
ADMINISTRATIVE AGENT] ("Administrative Agent") at the
offices of Administrative Agent, at its address at [·],
or at such other place as Administrative Agent may designate from time to time
in writing, in lawful money of the United States of America and in immediately
available funds, the amount of [·] (US$·)
or if less, the
aggregate unpaid amount of the PIK Loans made to the undersigned on the date
hereof and evidenced hereby or in the Loan Accounts. All capitalized terms
used
but not otherwise defined herein have the meanings given to them in the Amended
and Restated Credit Agreement (as hereinafter defined) or in Annex A
thereto.
This
PIK
Note is issued pursuant to that certain Amended and Restated Credit Agreement
dated as of June ·, 2007 between
Borrower, Agent and Lenders (including all annexes, exhibits and schedules
thereto and as the same may from time to time be amended, restated, modified
or
supplemented, the "Amended and Restated Credit Agreement"), and
is entitled to the benefit and security of the Amended and Restated Credit
Agreement, the Collateral Documents and all of the other Loan Documents referred
to therein. Reference is made to the Amended and Restated Credit Agreement
for a
statement of all of the terms and conditions under which the PIK Loans evidenced
hereby or in the Loan Accounts is made and is to be repaid. The principal
balance of the PIK Loan evidenced hereby, the rates of interest applicable
thereto and the date and amount of each payment made on account of the principal
thereof, shall be recorded by Administrative Agent in the Loan Accounts
maintained in respect of each PIK Loan; provided that the failure
of Administrative Agent to make any such recordation shall not affect the
obligations of Borrower to make a payment when due of any amount owing under
the
Amended and Restated Credit Agreement or this PIK Note.
The
principal amount of the indebtedness evidenced hereby shall be payable in the
amounts and on the dates specified in the Amended and Restated Credit Agreement.
Interest thereon shall be paid until such principal amount is paid in full
at
such interest rates and at such times, and pursuant to such calculations, as
are
specified in the Amended and Restated Credit Agreement. The terms of the Amended
and Restated Credit Agreement are hereby incorporated herein by
reference.
If
any
payment on this PIK Note becomes due and payable on a day other than a Business
Day, the maturity thereof shall be extended to the next succeeding Business
Day
and, with respect to payments of principal, interest thereon shall be payable
at
the then applicable rate during such extension.
Upon
and
after the occurrence of any Event of Default, this PIK Note may, as provided
in
the Amended and Restated Credit Agreement, and without demand, notice or legal
process of any kind, be declared, and immediately shall become, due and
payable.
Time
is
of the essence of this PIK Note. Demand, presentment, protest and notice of
nonpayment and protest are hereby waived by Borrower.
Except
as
provided in the Amended and Restated Credit Agreement, this PIK Note may not
be
assigned by Lender to any Person.
THIS
PIK NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
PROVINCE OF ONTARIO APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT
PROVINCE.
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SR
TELECOM INC.
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By:
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Name:
Title:
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By:
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Name:
Title:
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2
EXHIBIT
9.1(a)
ASSIGNMENT
AGREEMENT
This
Assignment Agreement (this "Agreement") is made as of
[·]
by and between [·]
("Assignor Lender") and [·]
("Assignee Lender") and acknowledged and consented to by
[·],
as administrative agent ("Administrative Agent"). All
capitalized terms used in this Agreement and not otherwise defined herein will
have the respective meanings set forth in the Amended and Restated Credit
Agreement as hereinafter defined.
RECITALS:
WHEREAS,
SR Telecom Inc., a Canadian corporation, BNY Trust Company of Canada, as
Administrative Agent and Collateral Agent, and Lenders have entered into that
certain Amended and Restated Credit Agreement dated as of June 27, 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Amended and Restated Credit Agreement") pursuant to which
Lenders have agreed to make certain Loans to Borrower;
WHEREAS,
Assignor Lender desires to
assign to Assignee Lender [all/a portion] of its interest in
the Loans, the Supplemental Loan Commitment, the Loan Documents and the
Collateral and to delegate to Assignee Lender [all/a portion]
of its duties with respect to such Loans, the Supplemental
Loan
Commitment, the Loan Documents and Collateral;
WHEREAS,
Assignee Lender desires to
become a Lender under the Amended and Restated Credit Agreement and to accept
such assignment and delegation from Assignor Lender; and
WHEREAS,
Assignee Lender desires to
appoint Administrative Agent and Collateral Agent to serve as agents for
Assignee Lender under the Amended and Restated Credit Agreement.
NOW,
THEREFORE, in consideration of the
premises and the agreements, provisions, and covenants herein contained,
Assignor Lender and Assignee Lender agree as follows:
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1.
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ASSIGNMENT,
DELEGATION, AND ACCEPTANCE
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1.1 Assignment
and Delegation.
Assignor
Lender hereby transfers and assigns and delegates to Assignee Lender, without
recourse and without representations or warranties of any kind (except as set
forth in Section 3.2), [all/such percentage] of Assignor
Lender's right, title, and interest in, and its other duties and obligations
under the Loans, the Supplemental Loan Commitment, the Loan Documents and
Collateral as will result in Assignee Lender having as of the Effective Date
(as
hereinafter defined) Assignor Lender's right, title, interest, duties and
obligations set forth on Schedule 1.1 ("Assigned
Interest"):
1.2 Acceptance
by Assignee Lender.
By
its
execution of this Agreement, Assignee Lender irrevocably purchases, assumes
and
accepts such assignment and delegation and agrees to be a Lender with respect
to
the delegated interest under the Loan Documents and to be bound by the terms
and
conditions thereof. By its execution of this Agreement, Assignor Lender agrees,
to the extent provided herein, to relinquish its rights and be released from
its
obligations and duties under the Loan Documents.
1.3 Effective
Date.
Such
assignment and delegation by Assignor Lender and acceptance by Assignee Lender
will be effective and Assignee Lender will become a Lender under the Loan
Documents as of the date of this Agreement ("Effective Date")
and upon payment of the Assigned Amount and the Assignment Fee (as each term
is
defined below). Interest and Fees accrued prior to the Effective Date are for
the account of Assignor Lender, and Interest and Fees accrued from and after
the
Effective Date are for the account of Assignee Lender.
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2.
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INITIAL
PAYMENT AND DELIVERY OF
NOTES
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2.1 Payment
of the Assigned Amount.
Assignee
Lender will pay to Assignor Lender, in immediately available funds, not later
than 12:00 noon (Toronto time) on the Effective Date, an amount equal to that
set forth in on Schedule 1.1 (the "Assigned
Amount").
2.2 Payment
of Assignment Fee. Unless waived by the Administrative
Agent,
Assignee
Lender will pay to Administrative Agent, for its own account in immediately
available funds, not later than 12:00 noon (Toronto time) on the Effective
Date,
the assignment fee in the amount of Cdn$1,000 (the "Assignment
Fee") as required pursuant to Section 9.1(a) of the Amended and
Restated Credit Agreement.
2.3 Execution
and Delivery of Notes.
Following
payment of the Assigned Amount and the Assignment Fee, Assignor Lender will
deliver to Assignee Lender the Notes, as applicable, previously delivered to
Assignor Lender duly endorsed in favour of Assignee Lender.
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3.
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REPRESENTATIONS,
WARRANTIES AND COVENANTS
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3.1 Assignee
Lender's Representations, Warranties and Covenants.
Assignee
Lender hereby represents, warrants, and covenants the following to Assignor
Lender and Administrative Agent:
(a) This
Agreement is a legal, valid, and binding agreement of Assignee Lender,
enforceable according to its terms;
(b) The
execution and performance by Assignee Lender of its duties and obligations
under
this Agreement and the Loan Documents will not require any registration with,
notice to, or consent or approval by any Governmental Authority;
(c) Assignee
Lender has full power and authority, and has taken all action necessary to
execute and deliver this Agreement and to fulfill the obligations hereunder
and
to consummate the transactions contemplated hereby;
(d) Assignee
Lender is familiar with transactions of the kind and scope reflected in the
Loan
Documents and in this Agreement;
(e) Assignee
Lender has made its own independent investigation and appraisal of the financial
condition and affairs of Borrower and its Subsidiaries, has conducted its own
evaluation of the Loans, the Loan Documents and Borrower's and its Subsidiaries'
creditworthiness, has made its decision to become a Lender to Borrower under
the
Amended and Restated Credit Agreement independently and without reliance upon
Assignor Lender or Administrative Agent, and will continue to do
so;
(f) Assignee
Lender is entering into this Agreement in the ordinary course of its business,
and is acquiring its interest hereunder for its own account and not with a
view
to or for sale in connection with any subsequent distribution;
(g) Assignee
Lender has no loans to, written or oral agreements with, or equity or other
ownership interest in Borrower or its Subsidiaries; and
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2
-
(h) Assignee
Lender will not enter into any written or oral agreement with, or acquire any
equity or other ownership interest in, Borrower without the prior written
consent of Administrative Agent (acting on the instructions of Requisite
Lenders).
3.2 Assignor
Lender's Representations, Warranties and Covenants.
Assignor
Lender hereby represents, warrants and covenants the following to Assignee
Lender:
(a) This
Agreement is a legal, valid and binding agreement of Assignor Lender,
enforceable according to its terms;
(b) The
execution and performance by Assignor Lender of its duties and obligations
under
this Agreement and the Loan Documents will not require any registration with,
notice to or consent or approval by any Governmental Authority;
(c) Assignor
Lender has full power and authority, and has taken all action necessary to
execute and deliver this Agreement and to fulfill the obligations hereunder
and
to consummate the transactions contemplated hereby;
(d) Assignor
Lender is the legal and beneficial owner of the Assigned Interest, free and
clear of any Lien; and
(e) This
Assignment by Assignor Lender to Assignee Lender complies, in all material
respects, with the terms of the Loan Documents.
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4.
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LIMITATIONS
OF LIABILITY
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Neither
Assignor Lender (except as provided in Section 3.2) nor Administrative
Agent makes any representations or warranties of any kind, nor assumes any
responsibility or liability whatsoever, with regard to (a) the Loan Documents
or
any other document or instrument furnished pursuant thereto or the Loans or
other Obligations, (b) the creation, validity, genuineness, enforceability,
sufficiency, value or collectibility of any of them, (c) the amount, value
or
existence of the Collateral, (d) the perfection or priority of any Lien upon
the
Collateral, or (e) the financial condition of Borrower or other obligor or
the
performance or observance by Borrower or its Subsidiaries of their obligations
under any of the Loan Documents. Neither Assignor Lender nor Administrative
Agent has or will have any duty, either initially or on a continuing basis,
to
make any investigation, evaluation, appraisal of, or any responsibility or
liability with respect to the accuracy or completeness of, any information
provided to Assignee Lender which has been provided to Assignor Lender or
Administrative Agent by Borrower. Nothing in this Agreement or in the Loan
Documents shall impose upon the Assignor Lender or Administrative Agent any
fiduciary relationship in respect of Assignee Lender.
|
5.
|
NOTICES
|
Unless
otherwise specifically provided herein, any notice or other communication
required or permitted to be given will be in writing and addressed to the
respective party as set forth below its signature hereunder, or to such other
address as the party may designate in writing to the other.
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6.
|
AMENDMENTS
AND WAIVERS
|
No
amendment, modification, termination, or waiver of any provision of this
Agreement will be effective without the written concurrence of Assignor Lender,
Administrative Agent and Assignee Lender.
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3
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7.
|
SEVERABILITY
|
Whenever
possible, each provision of this Agreement will be interpreted in such manner
as
to be effective and valid under applicable law. In the event any
provision of this Agreement is or is held to be invalid, illegal, or
unenforceable under applicable law, such provision will be ineffective only
to
the extent of such invalidity, illegality, or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of
the
Agreement. In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations in any other jurisdictions will not in any way be
affected or impaired thereby.
|
8.
|
SECTION
TITLES
|
Section
and Subsection titles in this Agreement are included for convenience of
reference only, do not constitute a part of this Agreement for any other
purpose, and have no substantive effect.
|
9.
|
SUCCESSORS
AND ASSIGNS
|
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
|
10.
|
APPLICABLE
LAW
|
THIS
AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE
PROVINCE OF ONTARIO.
|
11.
|
COUNTERPARTS
|
This
Agreement and any amendments, waivers, consents, or supplements may be executed
in any number of original or facsimile counterparts and by different parties
hereto in separate counterparts, each of which, when so executed and delivered,
will be deemed an original and all of which shall together constitute one and
the same instrument.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.
|
ASSIGNEE
LENDER:
[NAME]
|
ASSIGNOR
LENDER:
[NAME]
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Title:
|
Title:
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Title:
|
Title:
|
|||
|
Notice
Address:
|
Notice
Address:
|
|||
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4
-
ACKNOWLEDGED
AND CONSENTED TO:
|
[·],
as Administrative Agent
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
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5
-
SCHEDULE
1.1 TO ASSIGNMENT AGREEMENT
[NTD:
To be completed as of Effective Date.]