DEUTSCHE BANK CANADA, as Agent
and
ALCO OFFICE SYSTEMS-CANADA, INC.
SYNDICATED CREDIT FACILITY
========================================
CREDIT AGREEMENT
DATED OCTOBER 13, 1995
========================================
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
TABLE OF CONTENTS
-----------------
Page
1. INTERPRETATION................................................... 1
1.1 Defined Terms.................................................... 1
1.2 Accounting Terms................................................. 5
1.3 General.......................................................... 5
1.4 Currency......................................................... 5
1.5 Event of Default................................................. 5
1.6 General Provisions as to Certificates and Opinions, etc.......... 5
1.7 Law of Contract.................................................. 7
2. REPRESENTATIONS AND WARRANTIES................................... 7
2.1 Borrower......................................................... 7
3. THE CREDIT AND DRAWDOWNS......................................... 9
3.1 Establishment of Credit.......................................... 9
3.2 Utilization of the Credit........................................ 9
3.3 Drawdowns........................................................ 10
3.4 Mandatory Reduction of Credit.................................... 10
3.5 Optional Prepayment.............................................. 11
3.6 Standby Fee...................................................... 11
3.7 Cancellation of Credit........................................... 11
3.8 Intentionally deleted............................................ 11
3.9 Agency Fee....................................................... 11
3.10 Pro Rata Treatment and Payments.................................. 11
4. ACCEPTANCES...................................................... 13
4.1 Creation and Purchase of Acceptances............................. 13
4.2 Delivery by Borrower............................................. 13
4.3 Intentionally deleted............................................ 13
4.4 Discharge of Acceptances......................................... 13
4.4A Rollover......................................................... 14
4.5 Acceptances Outstanding upon Default............................. 14
4.6 Retirement of Acceptances........................................ 14
4.7 Choice of Acceptance Periods..................................... 15
5. INTEREST......................................................... 15
5.1 Computation...................................................... 15
5.2 Accrual and Payment.............................................. 15
5.3 Default Interest and Indemnity................................... 15
5.4 Agent's Certificate.............................................. 16
5.5 Limitation on Interest........................................... 16
- i -
6. CHANGE IN CIRCUMSTANCES.......................................... 16
6.1 Increased Costs.................................................. 16
6.2 Unlawful, etc.................................................... 17
7. PAYMENTS......................................................... 17
7.1 Place and Manner of Payments..................................... 17
7.2 Net Payments, etc................................................ 18
7.3 Repayment by Banks to Agent...................................... 18
8. CONDITIONS PRECEDENT............................................. 19
8.1 Closing.......................................................... 19
8.2 Conditions Precedent to Closing.................................. 19
8.3 Conditions Precedent to Each Drawdown............................ 20
9. COVENANTS........................................................ 20
9.1 General Covenants................................................ 20
9.2 Accounting, Financial Statements and Other Information........... 21
10. DEFAULT AND ENFORCEMENT.......................................... 23
10.1 Events of Default................................................ 23
10.2 Legal Proceedings................................................ 25
10.3 No Prejudice, etc................................................ 25
10.4 Appropriation of Moneys Received................................. 25
10.5 Currency Indemnity............................................... 25
10.6 Bank's Contributions............................................. 26
11. THE AGENT AND AGENCY ARRANGEMENTS................................ 27
11.1 Actions.......................................................... 27
11.2 Directions....................................................... 28
11.3 Indemnity........................................................ 28
11.4 Liability of Agent, etc.......................................... 28
11.5 Dealings by Agent................................................ 29
11.6 Exculpation...................................................... 29
11.7 Notice, Copies, etc.............................................. 29
11.8 Funding Reliance, etc............................................ 30
11.9 Payment Reliance................................................. 30
11.10 Successor........................................................ 30
11.11 Loans and Acceptances by the Agent............................... 31
11.12 Deutsche Bank Canada as the Agent................................ 31
11.13 Changes.......................................................... 31
11.14 Waivers.......................................................... 31
11.15 Termination Action by Agent...................................... 32
11.16 Notice........................................................... 32
11.17 Representations and Agreements of the Banks...................... 32
11.18 Application...................................................... 33
- ii -
12. ASSIGNMENT....................................................... 33
12.1 Benefit and Burden of this Agreement............................. 33
12.2 Assignment by Borrower........................................... 33
12.3 Assignment....................................................... 33
12.4 Limitation on Assignment......................................... 33
12.5 Borrower's Documents............................................. 34
13. MISCELLANEOUS.................................................... 34
13.1 Payment of Expenses.............................................. 34
13.2 Rights and Waivers............................................... 34
13.3 Communication.................................................... 34
13.4 Survival of Representations, Warranties and Covenants of
the Borrower................................................... 34
13.5 Further Assurances............................................... 35
13.6 Severability..................................................... 35
13.7 Counterparts..................................................... 35
13.8 Determination of Materiality..................................... 35
13.9 Submissions to Jurisdiction...................................... 35
13.10 Partnership...................................................... 35
13.11 Entire Agreement................................................. 35
13.12 Evidence of Indebtedness......................................... 36
13.13 Survival of Covenants, etc....................................... 37
- iii -
CREDIT AGREEMENT
----------------
THIS AGREEMENT is dated as of October 13, 1995 and is entered into
between ALCO OFFICE SYSTEMS-CANADA, INC. (the "Borrower"), DEUTSCHE BANK CANADA,
--------
as agent (the "Agent"), and the banks (collectively, the "Banks") listed on the
----- -----
execution pages of this Agreement.
In consideration of the mutual agreements herein contained, the
parties agree as follows:
1. INTERPRETATION
1.1 DEFINED TERMS. In this Agreement or any amendment hereto or supplement
-------------
hereof, unless the context otherwise requires, the following words and phrases
will have the meanings set forth below.
"Acceptance" means a ▇▇▇▇ of exchange (i) drawn by the Borrower and
----------
accepted by a Bank, (ii) denominated in Cdn. Dollars, (iii) payable by such Bank
only within Canada, and (iv) of a term of one, two or three months or of such
other period as the parties agree and maturing on or before the Repayment Date.
"Agent" means Deutsche Bank Canada or any successor agent of the Banks
-----
under this Agreement.
"Agreement" or "agreement" will mean this Credit Agreement, as amended,
--------- ---------
supplemented or otherwise modified from time to time.
"Auditors" means (i) Ernst & Young, chartered accountants, or (ii) a
--------
firm of chartered accountants who at the relevant time (a) are the duly
appointed auditors of the Borrower, (b) are in fact independent of the Borrower,
and (c) have been approved in writing by the Majority Banks.
"Banking Day" means any day on which the Agent and each of the Banks are
-----------
open for business in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
"Bank's Proportion" means, in the case of a Bank, the percentage shown
-----------------
opposite the name of such Bank on Schedule A (as amended from time to time) of
the aggregate amount in question for which the Banks are responsible for or
entitled to, and "Banks' Proportions" means, collectively, the Bank's Proportion
------------------
of each of the Banks.
"Banks" mean those banks listed on the execution page(s) of this
-----
Agreement and their respective successors in title and assigns which are for the
time being participating in the Credit or a ▇▇▇▇▇▇▇▇.
- ▇ -
"▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇" means, in the case of (i) a Prime Loan, any amount,
----------------
and (ii) an Acceptance, $100,000 or $100,000 plus any whole multiple thereof.
"Borrowing Date" is defined in Section 3.10(c).
--------------
"Branch of Account" means with respect to a Bank, the branch or office
-----------------
of such Bank at the address set out opposite such Bank's name on the signature
pages of this Agreement or such other branch in Canada as such Bank may advise
the Borrower and the Agent in writing.
"Cdn. Dollars", "Dollars", "$", and "$Cdn." mean lawful currency of
------------ ------- - -----
Canada.
"Closing Date" means October 13, 1995 or such other date as the parties
------------
may agree upon in writing.
"Commitment", as to any Bank at any time, means such Bank's obligation
----------
to make Drawdowns available to the Borrower pursuant to Section 3.1(2) in an
aggregate principal amount equal to its Bank's Proportion multiplied by the
principal amount of the Credit at such time.
"Credit" means, at the date of determination, the principal Dollar
------
amount of the credit established by Section 3.1, as reduced or cancelled from
time to time in accordance with the provisions hereof.
"DBAR" means the sum of (i) the rate of discount per annum, rounded
----
upward, if necessary, to the nearest integral multiple of 1/16 of 1%, quoted by
the Agent to the Borrower upon request from time to time as being the Agent's
discount rate then in effect for purchasing bills of exchange accepted by the
Agent in a specified amount of Canadian Dollars and for a specified term, plus
(ii) 3/10ths of 1% (0.3%).
"Designated Office" means the office of the Agent at Suite 1200, 222
-----------------
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, or such other office within Ontario as
the Agent may from time to time designate.
"Documents" means this Agreement, the Guarantee and all certificates
---------
and other documents delivered or to be delivered to the Agent or the Banks
pursuant hereto or thereto.
"Drawdown" means an availment by the Borrower of the Credit, and may
--------
take the form of a Prime Loan or an Acceptance.
"Drawdown Notice" means a notice in the form of Schedule B.
---------------
- 3 -
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.
"Guarantee" means a guarantee in the form of Schedule C.
---------
"Guarantor" means Alco Standard Corporation.
---------
"Indebtedness", with respect to any Person means, at the date of
------------
determination, the aggregate, without duplication, of:
(a) all indebtedness, obligations and liabilities of such Person which, in
accordance with GAAP (but on an unconsolidated basis), would be included
in determining total liabilities as shown in the liability section of the
balance sheet of such Person, including indebtedness, obligations and
liabilities for borrowed money (whether on account of principal, interest
or otherwise) or in respect of any bankers' or trade acceptance credit
facility;
(b) all indebtedness, obligations and liabilities of such Person secured
by any Lien on any property or asset owned or held by such Person,
whether or not any other Person has assumed or is liable for the
indebtedness, obligations or liabilities so secured and whether or not
the rights and remedies of the secured party thereunder are limited to
repossession or sale of property or assets covered thereby;
(c) any liability under any instrument of guarantee or indemnity or
arising under any guarantee, endorsement or undertaking made or issued by
any Person to others for the account of such Person and at the request of
such Person, including any accommodation extended with respect to
applications for letters of credit or acceptances;
(d) all indebtedness, obligations and liabilities of others which such
Person has directly or indirectly guaranteed, endorsed (otherwise than
for collection or deposit in the ordinary course of business), discounted
with recourse or other obligation to pay or under agreement (contingently
or otherwise) to purchase, repurchase or otherwise acquire or become
liable, or in respect of which such Person has provided a comfort letter
or agreed to supply or advance funds (whether by way of loan, share
purchase or capital contribution, through a commitment to pay for
property or services regardless of the non-delivery of such property or
the non-furnishing of such services or otherwise) or in respect of which
such Person has otherwise become directly or indirectly liable; and the
amount of each such indebtedness, obligation or liability (each a
"Guarantee Liability") will be deemed to be the amount of the
-------------------
Indebtedness in
- 4 -
respect of which the Guarantee Liability relates, unless the Guarantee
Liability is limited to a determinable amount, in which case the amount
of the Guarantee Liability will be deemed to be the lesser of the amount
of the Indebtedness in respect of which the Guarantee Liability relates
and such determinable amount;
(e) all liabilities of such Person as lessee in respect of all rentals
under any lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which, in accordance with
GAAP (but on an unconsolidated basis) applied on a consistent basis, have
been or are required to be capitalized on the books of the lessee; the
term "rentals" to mean all payments which the lessee is required to make
-------
by the terms of such lease or other arrangement;
(f) all deferred taxes of such Person;
(g) all liabilities of such Person as a partner or venturer in any
partnership, joint venture or other enterprise;
(h) all items of indebtedness convertible into, or exchangeable for,
shares in the capital of such Person; and
(i) all shares in the capital of, or partnership units in, such Person
which are redeemable or retractable at the option of any Person (other
than the Person in respect of whom a determination of Indebtedness is
being made).
"Loan" means, as the context requires, (i) the principal amount of
----
each borrowing hereunder, (ii) the principal amount thereof from time to time
outstanding, or (iii) the aggregate principal amount of all borrowings hereunder
from time to time outstanding.
"Majority Banks" means at any time Banks participating in the
--------------
aggregate in excess of 66 2/3% of the amount of the Drawdowns outstanding at
such time or (if no Drawdown has been made) the Credit.
"Person" includes an individual, a partnership, a corporation, a
------
trust, an unincorporated organization, a government or any department or agency
thereof and the heirs, executors, administrators or other legal representatives
of an individual.
"Prime Loan" means a Loan on which interest is calculated by reference
----------
to the Prime Rate.
"Prime Rate" means the prime lending rate per annum as quoted publicly
----------
by the Agent from time to time for Cdn. Dollar loans made in Canada to prime
commercial borrowers, as changed by the Agent from time to time without notice
to the Borrower.
- 5 -
"Repayment Date" means the date that is the fifth anniversary of the
--------------
Closing Date.
"this Agreement", "herein", "hereof", "hereto" and similar expressions
-------------- ------ ------ ------
mean and refer to this Agreement and include any instrument amending or
supplementing the same, and the expressions "article", and "Section" followed by
------- -------
a number mean and refer to the specified article or Section of this Agreement.
"Unutilized Portion" means, in respect of the Credit, at the date of
------------------
determination, the maximum permitted amount of the Credit minus the Utilized
Portion of the Credit at such date.
"U.S.$" means lawful currency of the United States of America.
-----
"Utilized Portion" means, in respect of the Credit, at the date of
----------------
determination, the aggregate of all Drawdowns outstanding under the Credit at
such date.
1.2 ACCOUNTING TERMS. All accounting terms not otherwise defined herein
----------------
have the meanings assigned to them in accordance with generally accepted
accounting principles in Canada. Where the character or amount of any asset or
liability or item of revenue or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement or any Document, such determination or calculation
will, to the extent applicable and except as otherwise specified herein or as
otherwise agreed in writing by the parties, be made in accordance with generally
accepted accounting principles in Canada (or, in the case of the Guarantee, the
United States) applied on a basis consistent with those at the time in effect.
1.3 GENERAL. The division of this Agreement into Sections and the
-------
insertion of headings are for convenience of reference only and will not affect
the interpretation of this Agreement. Any reference in this Agreement to any Act
or statute or Section thereof will be deemed to be a reference to such Act or
statute or Section as amended or re-enacted from time to time. Words importing
the singular number include the plural and vice versa. Any reference in this
Agreement to a party to this Agreement will include the permitted successors and
assigns of such party.
1.4 CURRENCY. Unless otherwise specified herein, all statements of or
--------
references to dollar amounts (without more) in any Document will mean lawful
money of Canada.
1.5 EVENT OF DEFAULT. Any reference in this Agreement to an Event of
----------------
Default means an event described in Section 10.1 and includes a reference to any
event which, with the giving of notice and/or a lapse of time and/or a
determination being made under the relevant provisions hereof, would constitute
an event described in Section 10.1.
1.6 GENERAL PROVISIONS AS TO CERTIFICATES AND OPINIONS, ETC. Each
-------------------------------------------------------
certificate of the Auditors, each officers' certificate, and each opinion of
counsel furnished to the Agent or
- 6 -
any Bank pursuant to any provision of any Document will specify the Section or
Sections under which such certificate or opinion is furnished and will include a
statement that the Person making such certificate or giving such opinion has
read the provisions of such Document relevant thereto. Each such certificate and
opinion which evidences, attests or confirms compliance with any covenant or
condition precedent provided for in any Document will, in addition, include a
statement:
(a) that, in the opinion of such Person, such Person has made such
examination or investigation as is necessary to enable such Person to
express an informed opinion as to whether or not such covenant or
condition has been complied with;
(b) that, in the opinion of such Person, such covenant or condition has
been complied with; and
(c) that (unless the context otherwise requires) to the knowledge of such
Person, no Event of Default has occurred and is continuing or, if an
Event of Default has occurred and is continuing, specifying the same.
Whenever the delivery of a certificate or opinion is a condition
precedent to the taking of any action by the Agent or the Banks under any
Document, the truth and accuracy of the facts and opinions stated in such
certificate or opinion will in each case be conditions precedent to the right of
the Borrower to have such action taken, and each statement of fact contained
therein will be deemed to be a representation and warranty of the Borrower for
the purposes of this Agreement.
Any Auditors certificate or officer's certificate may be based, insofar
as it relates to legal matters, upon an opinion of counsel, unless the Person or
Persons giving such certificate knows, or in the exercise of reasonable care
should know, that the opinion of counsel with respect to the matters upon which
such certificate may be based as aforesaid is erroneous.
Any opinion of counsel may be based, insofar as it relates to factual
matters, information with respect to which is in possession of the Borrower,
upon an officers' certificate, unless the counsel giving such opinion knows, or
in the exercise of reasonable care should know, that the officers' certificate
with respect to the matters upon which his opinion may be based as aforesaid is
erroneous. Insofar as any opinion of counsel covers matters relating to the laws
of jurisdictions other than those in which such counsel is qualified to
practice, such counsel may rely upon opinions of counsel located in such other
jurisdictions as to such matters. In rendering any opinion, counsel may qualify
such opinion with respect to the enforceability of any agreement or obligation
referred to therein by stating that enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of creditors
generally and that specific performance may not be available as a remedy.
- 7 -
1.7 LAW OF CONTRACT. Except as otherwise provided therein, all Documents
---------------
will be deemed to be contracts and/or instruments made pursuant to the laws of
Ontario and will be governed by and construed in accordance with such laws.
2. REPRESENTATIONS AND WARRANTIES
2.1 BORROWER. To induce the Banks to enter into this Agreement, to
--------
establish the Credit and to permit Drawdowns hereunder and to induce the Banks
and the Agent to enter into this Agreement, the Borrower represents and warrants
to the Banks and the Agent, upon each of which representations and warranties
the Banks and the Agent specifically rely, as follows:
(1) Good Standing, etc. It is a corporation duly amalgamated under the
------------------
laws of Ontario, is validly subsisting under such laws and is duly authorized
and licensed to own its properties and to carry on its businesses as presently
owned and carried on by it in each jurisdiction in which the failure to qualify
would have a material adverse effect on its business or financial condition. It
has the corporate power and authority to enter into and perform its obligations
under the Documents.
(2) Qualification, Licences etc. It has obtained all necessary material
---------------------------
licenses, material permits, material consents, material authorizations and
material approvals from any and all governments, governmental commissions,
boards or other agencies required as at the date hereof in respect of its
present operations, and it has no reason to believe that any such necessary
material licenses, material permits, material consents, material authorizations
and material approvals required in the future cannot be obtained without any
unduly burdensome provision or provisions inconsistent with the terms of this
Agreement.
(3) Due Execution, etc. Each Document to which it is a party has been duly
------------------
authorized, executed and delivered by it and constitutes a valid and binding
obligation of it, enforceable in accordance with its terms, subject to the
qualifications set out in the opinion delivered pursuant to Section 8.2(7).
(4) Litigation. There is no litigation or governmental proceeding pending or
----------
threatened against it which could have a material adverse effect on its
financial condition.
(5) Burdensome Provisions, etc. It is not a party to any agreement or
--------------------------
instrument, or subject to any corporate restriction or any judgment, order,
writ, injunction, decree, award, rule or regulation, which materially adversely
affects or in the future may materially and adversely affect, its business,
operations, prospects, properties or assets, or condition, financial or
otherwise, or its ability to perform its obligations under the Documents.
(6) Default. It is not in default beyond any period of grace with respect
-------
thereto under any instrument or instruments evidencing any Indebtedness which
would in the aggregate exceed U.S.$5,000,000 or under the terms of any
instrument pursuant to which an
- 8 -
instrument evidencing any Indebtedness which would in the aggregate exceed
U.S.$5,000,000 has been issued or made and delivered, except for defaults (if
any) as are being contested in good faith by appropriate proceedings of which
the Agent has been notified in writing and for which a reserve satisfactory to
the Banks has been provided. No event has occurred which constitutes an Event of
Default nor will any such Event of Default occur by reason of the Borrower
entering into any Document or performing its obligations thereunder or entitling
itself to the benefits available to it thereunder.
(7) Contingent Liabilities and Debt. It does not have any contingent
-------------------------------
liabilities, nor has it, except as contemplated by this Agreement, incurred any
Indebtedness for money borrowed or credit advanced.
(8) Full Disclosure. No statements or materials furnished by or on behalf of
---------------
the Borrower to the Agent or the Banks in connection with the negotiation or
confirmation of the transactions contemplated hereby contained, as of the time
such statements were so furnished, any untrue statement of a material fact or
omitted as of such time, a material fact necessary to make the statements
contained therein not misleading, and all such statements, taken as a whole,
together with this Agreement, do not contain any untrue statement of a material
fact or omit a material fact necessary to make the statements contained herein
or therein not misleading, and all expressions of expectation, intention, belief
and opinion contained therein were honestly made on reasonable grounds after due
and careful inquiry by the Borrower (and any other person who furnished such
material). There is no fact which the Borrower has not disclosed to the Agent
and to each of the Banks in writing which materially adversely affects, or so
far as the Borrower can now reasonably foresee, will materially adversely affect
its assets, liabilities, affairs, business, prospects, operations or conditions,
financial or otherwise, or its ability to perform its obligations under the
Documents.
(9) No Default, etc. Neither the execution nor the delivery of any Document,
---------------
the consummation of the transactions therein contemplated, nor compliance with
the terms, conditions and provisions thereof conflicts with, or will conflict
with, or results or will result in, any breach of, or constitutes a default
under any of the provisions of the charter documents or by-laws of the Borrower
or of any agreement or instrument to which it is a party or by which it is, or
any of its property or assets are, bound or results or will result in the
contravention of any law or rule or regulation to which the Borrower or its
property or assets are subject.
(10) Tax Returns. It (and each of its predecessors) has filed all tax returns
-----------
which are required to be filed and has paid all taxes which have become due as
shown on such returns or any assessments received by it and its predecessors
except such taxes (if any) as are being contested in good faith by appropriate
proceedings. The Borrower is not aware of any proposed additional tax assessment
against it.
(11) Consents. No consent, approval or authorization of, or declaration,
--------
registration, filing or qualification with, or giving of notice to, or taking of
any other action
- 9 -
in respect of, any governmental authority or agency on the part of the Borrower
is required in connection with the execution and delivery and enforcement of the
Documents or the consummation of any of the transactions contemplated hereby or
thereby.
(12) Events of Default. No event has occurred which constitutes an Event of
-----------------
Default nor will any such Event of Default occur by reason of the Borrower
entering into any Document or performing its obligations thereunder or entitling
itself to any benefits available to it thereunder.
(13) No Material Adverse Change. The business, operations, assets and
--------------------------
condition (financial or otherwise) of the Borrower have not been materially
adversely affected as a result of any act or event (including, without
limitation, fire, accident, strike, expropriation or act of any government in
Canada or elsewhere).
3. THE CREDIT AND DRAWDOWNS
3.1 ESTABLISHMENT OF CREDIT.
-----------------------
(1) The Banks hereby establish in favour of the Borrower on the terms and
conditions hereof a credit in the principal amount of $110,000,000.
(2) Subject to the terms and conditions hereof, each Bank will participate in
each Drawdown in a proportion equal to its Bank's Proportion of such Drawdown.
(3) The rights and obligations of each of the Banks under this Agreement are
several. The failure of a Bank to perform its obligations under this Agreement
will neither:
(a) result in the Agent or any other Bank incurring any liability
whatsoever; nor
(b) relieve the Agent or any other Bank from their respective
obligations under any Document.
Nothing contained herein or in any other Document nor any action taken pursuant
hereto or thereto will be deemed to constitute the Banks a partnership, joint
venture or any other similar such entity.
3.2 UTILIZATION OF THE CREDIT. Subject to the terms and conditions
-------------------------
hereof, the Borrower may avail itself of the Credit at any time, commencing on
the Closing Date and from time to time thereafter up to (but not including) the
Repayment Date, by way of Drawdowns provided that:
(a) the proceeds of each Drawdown (other than a Drawdown made pursuant to
Section 3.8) will be used for general corporate purposes;
- 10 -
(b) all Drawdowns will be in a Borrowing Amount; and
(c) if after giving effect thereto, the Utilized Portion of the Credit
does not exceed the then principal amount of the Credit.
3.3 DRAWDOWNS.
---------
(1) The Borrower will deliver a Drawdown Notice to the Agent no later than
10:00 a.m. (Toronto time) on or before the first Banking Day prior to the day on
which the Borrower wishes to receive any Drawdown.
(2) When the Agent receives a Drawdown Notice, the Agent will notify each of
the Banks of the amount and particulars of the proposed Drawdown and the date on
which it is to be made, and each Bank will, subject to the provisions of this
Agreement, make available to the Agent at the Designated Office on that date its
participation in that Drawdown.
(3) Intentionally deleted.
(4) Each Bank will open and maintain on its books accounts evidencing the
Indebtedness of the Borrower to it hereunder. Each Bank will debit therein the
amount of all such Indebtedness and will credit therein each payment on account
of such Indebtedness by appropriate entries. The accounts kept by a Bank will
constitute, in the absence of manifest error, conclusive evidence of (i) the
Indebtedness of the Borrower to such Bank hereunder, (ii) the date each Drawdown
was made by the Borrower, and (iii) the amounts from time to time paid by the
Borrower on account of such Indebtedness.
(5) A Drawdown Notice will be irrevocable and the Borrower will borrow the
stated amount on the stated date in accordance with the Drawdown Notice.
(6) Intentionally deleted.
(7) All amounts to be advanced by the Banks to the Borrower under this
Agreement in respect of Drawdowns will be remitted not later than 10.00 a.m.
(Toronto time) on the relevant day to the account of the Agent at the Designated
Office, and the Agent will make available to the Borrower the amounts so
remitted on the same day to the account in the name of the Borrower maintained
by the Agent of which the Borrower has notified to the Agent in writing. If the
Agent makes available to the Borrower any amount which has not been made
unconditionally available to the Agent the Borrower will forthwith on notice
from the Agent repay to the Agent any such amount.
(8) Intentionally deleted.
3.4 MANDATORY REDUCTION OF CREDIT. The Borrower will reduce permanently
-----------------------------
the Utilized Portion of the Credit to nil on the Repayment Date, and the
Borrower will pay
- 11 -
concurrently with such reduction all interest accrued hereunder but unpaid prior
to the Repayment Date. The Credit will be permanently cancelled on the Repayment
Date.
3.5 OPTIONAL PREPAYMENT. The Borrower will not be entitled to prepay all
-------------------
or any part of a Drawdown except as provided below:
(a) any partial prepayment is in a Borrowing Amount;
(b) the Borrower pays concurrently with such prepayment all interest
accrued on the amount thereof;
(c) the Agent receives written notice of such prepayment 5 Banking Days
prior to the intended date of prepayment; any notice of prepayment given
by the Borrower pursuant hereto will be irrevocable and the Borrower will
be bound to prepay in accordance with such notice; and
(d) in the case of an Acceptance, the prepayment is made on the maturity
date applicable to such Acceptance.
3.6 STANDBY FEE. The Borrower will pay to the Agent for the account of
-----------
each Bank on the last Banking Day of each calendar quarter, commencing December
29, 1995, a standby fee of 1/10th of 1% (i.e., 0.1%) per annum calculated daily
on the Unutilized Portion of the Credit and on the basis of a year of 365 or 366
days, as the case may be, such fee to be computed commencing on the date hereof.
3.7 CANCELLATION OF CREDIT. The Borrower may, upon five Banking Days
----------------------
prior written notice to the Agent, permanently cancel the Credit in whole or
from time to time in part provided that the Borrower concurrently reduces, in
accordance with Section 3.5, the Utilized Portion of the Credit so that such
Utilized Portion does not exceed the reduced amount of the Credit.
3.8 Intentionally deleted.
3.9 AGENCY FEE. The Borrower will pay to the Agent in arrears on the last
----------
Banking Day of each calendar quarter, commencing December 29, 1995, a quarterly
agency fee of $1,250.
3.10 PRO RATA TREATMENT AND PAYMENTS.
-------------------------------
(a) Each borrowing by the Borrower from the Banks, each payment (including
each prepayment) by the Borrower on account of principal and interest hereunder,
and any reduction of the Commitments of the Banks hereunder, will be made pro
rata according to the Banks' Proportions at the time of such borrowing, payment
or reduction. All payments (including prepayments) to be made by the Borrower on
account of principal, interest and
- 12 -
fees will be made without set-off or counterclaim and will be made to the Agent
on behalf of the Banks at the Designated Office in lawful money of Canada and in
immediately available funds. The Agent will distribute such payments to the
Banks promptly upon receipt in like funds as received. If any payment hereunder
becomes due and payable on a day other than a Business Day, such payment will be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon will be payable at the then applicable rate during
such extension.
(b) Notwithstanding Section 3.10(a) above, the parties hereto agree that
the provisions of this Section 3.10(b) will apply in circumstances in which the
pro rata share of any Bank or Banks in respect of a proposed Drawdown by way of
Acceptances (which Drawdown complies in all respects with the terms of this
Agreement) is in an amount which is not a Borrowing Amount in respect of
Acceptances. In such circumstances, the excess (a "Bank's Excess Amount") of (i)
--------------------
the pro rata share of a particular Bank of such proposed Drawdown, over (ii) the
Borrowing Amount in respect of Acceptances which is closest to, but which does
not exceed, such pro rata share, shall be added to the Bank's Excess Amount of
each of the other two Banks relating to such proposed Drawdown (the aggregate of
all three Bank's Excess Amounts in respect of a particular proposed Drawdown
being hereinafter referred to as the "Aggregate Excess Amount"). If the
-----------------------
Aggregate Excess Amount is less than $100,000, then each Bank shall advance a
Prime Loan to the Borrower in an amount equal to such Bank's Excess Amount in
respect of such proposed Drawdown. If the Aggregate Excess amount is equal to or
exceeds $100,000, then (i) Deutsche Bank Canada will accept and purchase a ▇▇▇▇
of exchange (in the manner contemplated by Section 4.1) in a principal amount
equal to the Borrowing Amount in respect of Acceptances which is closest to, but
which does not exceed, the Aggregate Excess Amount, and (ii) each Bank shall
advance a Prime Loan to the Borrower in an amount equal to such Bank's pro rata
share of the positive difference, if any, resulting from the subtraction of the
principal amount of a ▇▇▇▇ of exchange accepted and purchased by Deutsche Bank
Canada pursuant to the preceding clause (i) from the Aggregate Excess Amount.
Any ▇▇▇▇ of exchange accepted and purchased by Deutsche Bank Canada pursuant to
this Section 3.10(b) is hereinafter referred to as a "Section 3.10(b)
---------------
Acceptance". Each Bank agrees that if the Borrower does not provide the Agent
----------
at the Designated Office for the account of Deutsche Bank Canada with
immediately available funds to discharge in full the liabilities of Deutsche
Bank Canada in respect of a Section 3.10(b) Acceptance by 10:30 a.m. on the
maturity date of such Section 3.10(b) Acceptance, each Bank will by 12:00 p.m.
on such maturity date provide the Agent with immediately available funds to
discharge in full such Bank's pro rata share of the liabilities of Deutsche Bank
Canada in respect of such Section 3.10(b) Acceptance (it being agreed that (i)
the amount of each such payment will be discounted to reflect the 30 basis point
margin on an amount equivalent to the undiscounted amount of such payment
realized by Deutsche Bank Canada at the time of Deutsche Bank Canada's
acceptance and purchase of the relevant Section 3.10(d) Acceptance, and (ii)
upon any such payment, the payor Bank will be subrogated, to the extent of such
payment, to the rights of Deutsche Bank Canada in respect of the liabilities of
the Borrower relating to such Section 3.10(b) Acceptance).
- 13 -
(c) The Agent may (unless notified to the contrary by a Bank prior to the
date of any proposed Drawdown (in this Section 3.10(c), the "Borrowing Date"))
--------------
assume that each Bank has made available to the Agent on such Borrowing Date
such Bank's Proportion of the Drawdown to be made on such Borrowing Date, and
the Agent may (but it will not be required to), in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
amount is made available to the Agent on a date after such Borrowing Date, such
Bank will pay to the Agent on demand an amount equal to the product of (i) the
average, computed for the period referred to in clause (iii) below, of the
weighted average interest rate paid by the Agent for funds acquired by the Agent
during each day included in such period, times (ii) the amount of such Bank's
Proportion of such borrowing, times (iii) a fraction, the numerator of which is
the number of days that elapse from and including such Borrowing Date to the
date on which such Bank's Proportion of such borrowing will become immediately
available to the Agent, and the denominator of which is 365. A statement of the
Agent submitted to any Bank with respect to any amounts owing under this
subsection 3.10(c) will be conclusive and binding in the absence of manifest
error. If such Bank's Proportion of such Drawdown is not in fact made available
to the Agent by such Bank within three Banking Days of such Borrowing Date, the
Agent will be entitled to recover such amount with interest thereon, on demand,
at the rate per annum applicable to Prime Loans hereunder.
4. ACCEPTANCES
4.1 CREATION AND PURCHASE OF ACCEPTANCES. Upon receipt of a Drawdown
------------------------------------
Notice given in accordance with Section 3.3(1) and subject to the provisions of
this Agreement, each Bank will accept and purchase from time to time such bills
of exchange as the Borrower will request within the scope of the Credit. The
purchase price for each such accepted ▇▇▇▇ of exchange will be equal to (i) the
principal amount of such ▇▇▇▇ of exchange, minus (ii) the principal amount of
such ▇▇▇▇ of exchange multiplied by the DBAR. The Agent will verbally inform
each of the Banks of the DBAR applicable to each Drawdown by way of Acceptances
hereunder no later than 10:00 a.m. on the day on which a Drawdown is to be made
by way of Acceptances hereunder, and such DBAR will not be communicated to the
Borrower any earlier than 10:30 a.m. on such day.
4.2 DELIVERY BY BORROWER. Each ▇▇▇▇ of exchange to be accepted by a Bank
--------------------
will be tendered by the Borrower to such Bank on or before 11.00 a.m. (Toronto
time) at the Branch of Account of such Bank on the date the Borrower wishes such
Bank to accept such ▇▇▇▇.
4.3 Intentionally deleted.
4.4 DISCHARGE OF ACCEPTANCES. The Borrower agrees that prior to 10:30 a.m.
------------------------
on each date on which an Acceptance matures (in this Section, a "maturity
--------
date"), it will provide the Agent at the Designated Office for the account of
----
each Bank with immediately available funds (in this Section, the "discharge
---------
funds") to discharge in full the liabilities of a
-----
- 14 -
Bank in respect of such Acceptance. The Borrower agrees that it will take
whatever steps are necessary to ensure that it is entitled to obtain a Drawdown
on the maturity date pursuant to the provisions hereof in an amount at least
equal to the discharge funds. If the Borrower does not in fact provide the Agent
with the discharge funds, the Banks may (but will not be obliged to) make loans,
according to the Banks' Proportions, to the Borrower, which loans the Borrower
hereby requests the Banks to make and which, if made, will be made on a demand
basis and will bear interest as Prime Loans. To the extent not inconsistent with
the demand nature of such demand loans, the terms and conditions of this
Agreement pertinent to Prime Loans outstanding hereunder will apply to such
demand loans.
4.4A ROLLOVER. The Borrower may at any time deliver a notice to the Banks
--------
requesting a Drawdown (the "Rollover Drawdown") the proceeds of which
-----------------
will be used to discharge in whole or in part its obligations hereunder with
respect to one or more outstanding Drawdowns (the "Outstanding Drawdown"),
---------------------
provided that:
(a) the notice identifies the Outstanding Drawdown or Outstanding
Drawdowns to be discharged;
(b) the Rollover Drawdown would otherwise be permitted hereunder and the
Borrower complies with each provision hereof relative to the obtaining
of a Drawdown in the form requested including, without limitation,
those relative to notice;
(c) the aggregate principal amount of the Rollover Drawdowns then
requested is not greater than the aggregate principal amount of such
Outstanding Drawdowns;
(d) the entire proceeds of the Rollover Drawdowns are used in full to
retire the liability of the Borrower in respect to such Outstanding
Drawdowns;
(e) each Rollover Drawdown is made contemporaneously with the retirement
of the Outstanding Drawdowns; and
(f) the Borrower will pay all costs and expenses incurred by the Bank
incidental to the exercise by the Borrower of any of its rights under
this Section.
4.5 ACCEPTANCES OUTSTANDING UPON DEFAULT. If any Acceptance is
------------------------------------
outstanding upon the occurrence of an Event of Default, the Borrower will
forthwith upon such occurrence pay to the Agent, for the rateable benefit of the
Banks, an amount equal to the principal amount of such Acceptance, such amount
to be held by the Banks for set off against the Indebtedness owing by the
Borrower to the Banks in respect to such Acceptance or in respect to any other
amount payable under the Documents.
4.6 RETIREMENT OF ACCEPTANCES. The Borrower will not retire any
-------------------------
Indebtedness with respect to the face amount of an Acceptance until the maturity
date of such Acceptance.
- 15 -
4.7 CHOICE OF ACCEPTANCE PERIODS. Subject to the next sentence, all
----------------------------
Drawdowns hereunder by way of Acceptances will mature one, two or three months
after their issuance. The Borrower will choose Acceptances of such duration so
as to ensure that the Borrower complies in all respects with its reduction
obligations hereunder.
5. INTEREST
5.1 COMPUTATION. The Borrower will pay to the Agent, for the rateable
-----------
benefit of the Banks, interest on each Prime Loan, which interest will be
calculated daily at the rate of interest per annum equal to the Prime Rate.
5.2 ACCRUAL AND PAYMENT. Interest on each Prime Loan will accrue from day
-------------------
to day, be payable monthly in arrears on the last Banking Day of each month, and
be calculated on the basis of the actual number of days in the relevant calendar
year. The principle of deemed reinvestment of interest will not apply to this
Agreement or to any computation of interest payable hereunder.
5.3 DEFAULT INTEREST AND INDEMNITY.
------------------------------
(1) In the event that the Borrower fails to pay any amount payable under
any Document to the Agent, whether for its own account or that of the Banks on
its due date and irrespective of any notice to the Borrower in respect of such
failure, the Borrower will pay to the Agent for the account of the appropriate
party interest on such amount, which interest will be calculated daily according
to the regular practice of the Agent, for the period commencing on the date of
such failure and ending on the date of actual payment (both before and after
demand, default and judgment) at a rate of interest per annum equal to the Prime
Rate plus 3%, such interest to be compounded on the last Banking Day of each
month during the period of arrears.
(2) The Borrower will fully indemnify and hold the Agent and each Bank
harmless from and against any loss, expense, damage or liability incurred by it
with respect to any Drawdown or proposed Drawdown which the Agent or such Bank
may sustain or incur as a result of (i) the failure of the Borrower to utilize
the Credit in the manner specified in a Drawdown Notice (including if such
failure was caused by its failure to meet all conditions precedent), (ii) the
failure of the Borrower to pay any sum on its due date, (iii) any prepayment
under this Agreement or otherwise in connection with this Agreement, or (iv) any
Event of Default. Without prejudice to the generality of the foregoing, the
foregoing indemnity will extend to any interest, fees or other sums whatsoever
paid or payable on account of any funds borrowed by a Bank in order to carry any
unpaid amount and to any loss (including loss of profit), premium, penalty or
expense which may be incurred by such Bank in liquidating or employing deposits
from third parties acquired to make, maintain or fund a drawdown or any part
thereof or any amount due or to become due under this Agreement.
- 16 -
5.4 AGENT'S CERTIFICATE. The Agent's certificate as to each amount or
-------------------
each rate of interest payable hereunder will, in the absence of manifest error,
be conclusive evidence of such amount or rate.
5.5 LIMITATION ON INTEREST. If the payment of any amount pursuant hereto
----------------------
on account of interest (the "Required Interest") would result in the
-----------------
Borrower paying interest at a rate or in an amount greater than that
which any Bank is entitled under any applicable law ("The Usury Law") to
-------------
charge the Borrower (provided that such law is not pre-empted or superseded by
any other law or provision of any Document) (the "Permitted Interest Rate"),
-----------------------
then the difference (the "Surplus Amount") between the Required Interest and the
--------------
Permitted Interest will be deducted automatically from the principal amount of
the Drawdown to which such payment relates, or, if such payment does not relate
to any particular Drawdown, to the last amount payable hereunder, with the
result that the Borrower will be deemed for all purposes not to have paid
interest in any amount in excess of the Permitted Interest. Notwithstanding the
foregoing, if at any time when there exists a Surplus Amount, the amount of
interest payable hereunder or pursuant hereto by the Borrower is less than the
maximum amount that the Bank is otherwise permitted to charge the Borrower under
the Usury Law, the Borrower will pay interest at the Permitted Interest Rate,
without regard to the rates set out herein, until the total amount of all
interest and other charges actually paid by the Borrower is equal to the amount
that would have been payable were it not for such Usury Law. This provision will
not be interpreted and is not intended to prevent or impair the Bank from
challenging the validity or applicability of any Usury Law before any Court or
government authority of any kind.
6. CHANGE IN CIRCUMSTANCES
6.1 INCREASED COSTS. If at any time a Bank determines in good faith
---------------
(which determination will be conclusive) and notifies the Borrower through the
Agent that any present or future law, regulation, order, treaty or official
directive (whether or not having the force of law), or any change therein or in
the interpretation or application thereof by any authority charged with the
administration thereof or by any court or any compliance by such Bank with any
request or directive of any applicable monetary, fiscal or other governmental
agency or authority (whether or not having the force of law), has the effect in
respect of any Drawdown of:
(a) increasing the cost to such Bank of making, maintaining or funding its
participation in such Drawdown;
(b) reducing the amount of principal, interest or other amount received or
receivable by such Bank hereunder or its effective return hereunder;
or
(c) causing such Bank to make any payment, or to forego any interest or
other return on or calculated by reference to, any sum received or
receivable by it hereunder;
- 17 -
then, in any such case, upon demand being made from time to time to the Borrower
by such Bank through the Agent, the Borrower will forthwith pay to the Agent for
the account of such Bank such amount as will compensate such Bank for such
additional cost, reduction, payment, foregone interest or other return. The
certificate of the relevant Bank as to any amount payable pursuant to this
Section will, in the absence of manifest error, be conclusive evidence thereof.
6.2 UNLAWFUL, ETC. Notwithstanding anything herein contained, if at any
-------------
time any Bank determines in good faith (which determination will be conclusive)
and notifies the Borrower through the Agent that, by reason of any law,
regulation, order, treaty or official directive, or any change therein or in the
reasonable interpretation or reasonable application thereof, by any authority
charged with the administration thereof or by any court, it is unlawful, or
impracticable or contrary to the direction of any competent authority for such
Bank to make, maintain or fund any Drawdown or to give effect to any of its
other obligations as contemplated hereby, such Bank, by such notice, may declare
that such obligations will be terminated and the Borrower, if such Drawdown is a
Prime Loan, will repay such Prime Loan to the Agent for the account of such Bank
forthwith or at the end of such period as such Bank will in its discretion have
agreed, the whole of such Prime Loan together with all unpaid interest accrued
thereon to the date of repayment and all other unpaid amounts payable to such
Bank hereunder. If such Drawdown is an Acceptance, the Borrower will provide
such Bank, on the maturity date of such Acceptance or such earlier date
requested by such Bank, with the amount of dollars required by such Bank to
discharge its obligations with respect to such Acceptance. Upon the giving of
such notice by a Bank, the obligation of such Bank to participate in any further
Drawdown will terminate and the Credit will be cancelled to such extent.
7. PAYMENTS
7.1 PLACE AND MANNER OF PAYMENTS.
----------------------------
(1) All payments to be made by the Borrower under the Documents will be made
to the Agent in Cdn. Dollars. All such payments will be made in immediately
available funds and received by the Agent not later than 10:00 a.m. (Toronto
time) on the due date at the Designated Office. Whenever any payment hereunder
is due on a day which is not a Banking Day, the due date thereof will be
extended to the next succeeding Banking Day unless such Banking Day falls in the
next calendar month in which event the due date will be the next preceding
Banking Day. During any extension of the due date for the payment of any
principal of any Drawdown hereunder, interest shall be payable on such principal
at the rate payable on such due date in respect of such Drawdown.
(2) The Agent will, before the close of business in Toronto on the date of
receipt, remit to each Bank in the currency of payment, in same day funds, such
Bank's portion of the payment so made by remitting such portion to any account
of such Bank with any bank in Toronto which such Bank will have previously
notified to the Agent in writing. In the event
- 18 -
that any payment hereunder is received by the Agent too late on any day for the
Agent acting with due dispatch to execute such remittance, such payment will be
deemed for the purposes of interest and fee computations as between the Agent
and the Banks to have been received by the Agent on the next following Banking
Day and the Borrower will indemnify the Agent or the Banks, as the case may be,
for any loss incurred thereby.
(3) Except as otherwise provided herein or in any other agreement in writing
among the Banks, each and every payment of principal and interest on outstanding
Prime Loans, payment on maturity of an Acceptance, the stand-by fees and all
other payments hereunder will be made to the Agent for the account of each Bank
pro rata according to its respective Bank's Proportion.
7.2 NET PAYMENTS, ETC. All payments by the Borrower under a Document,
-----------------
whether in respect of principal, interest, fees or any other item, will be made
in full without any deduction or withholding (whether in respect of set off,
counterclaim, duties, taxes, charges or otherwise whatsoever) unless the
Borrower is prohibited by law from doing so, in which event the Borrower will:
(a) ensure that the deduction or withholding does not exceed the minimum
amount legally required;
(b) forthwith pay to the Agent for the account of each affected Bank such
additional amount so that the net amount received by such Bank will
equal the full amount which would have been received by it had no such
deduction or withholding been made;
(c) pay to the relevant taxation or other authorities within the period
for payment permitted by applicable law the full amount of the
deduction or withholding (including, but without prejudice to the
generality of the foregoing, the full amount of any deduction or
withholding from any additional amount paid pursuant to this
subsection), and
(d) furnish to the Agent for the account of such Bank, within the period
for payment permitted by applicable law, an official receipt of the
relevant taxation or other authorities involved for all amounts
deducted or withheld as aforesaid.
7.3 REPAYMENT BY BANKS TO AGENT. Unless the Agent has been notified in
---------------------------
writing by the Borrower not less than one (1) Business Day prior to the date on
which any payment to be made by the Borrower hereunder is due, that the Borrower
does not intend to remit such payment, the Agent may, at its discretion, assume
that the Borrower has remitted such payment when so due and the Agent may, at
its discretion and in reliance upon such assumption, make available to each Bank
on such payment date an amount equal to such Bank's proportionate share of such
assumed payment. If it proves to be the case that the Borrower has not in fact
remitted such payment to the Agent, each Bank will forthwith on
- 19 -
demand repay to the Agent the amount of such assumed payment made available to
such Bank, together with interest thereon until the date of repayment thereof at
a rate determined by the Agent (such rate to be conclusive and binding on such
Bank) in accordance with its usual banking practice for advances in the currency
in which such payment is due to banks of like standing to such Bank.
8. CONDITIONS PRECEDENT
8.1 CLOSING. The closing of the transaction contemplated herein will take
-------
place on the Closing Date at the offices of Messrs. Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
8.2 CONDITIONS PRECEDENT TO CLOSING. The obligation of the Banks to
-------------------------------
establish the Credit and to permit the first Drawdown is subject to the
fulfilment of the following conditions precedent to the satisfaction of the
Agent on or prior to the Closing Date (each of which conditions may be waived by
the Banks in the Banks' discretion):
(1) Intentionally deleted.
(2) Other Documentation. The Borrower will have entered into and
-------------------
delivered to the Agent and each Bank their customary documentation concerning
the administration of this Agreement and the Drawdowns.
(3) Alco Standard Corporation Guarantee. The Guarantor will have entered
-----------------------------------
into and delivered to the Agent the Guarantee.
(4) Representations and Warranties. The representations and warranties of
------------------------------
the Borrower contained in Section 2 will be true on and as of the Closing Date,
and the Borrower will have delivered to the Bank a certificate to such effect,
dated such date and signed on its behalf by a senior executive officer.
(5) Corporate Proceedings. All proceedings to be taken in connection with
---------------------
the transactions contemplated by the Documents will be satisfactory in form and
substance to the Agent, and the Agent will have received certified copies of all
documents which it may reasonably request in connection with such transactions
and of the records of all corporate proceedings in connection therewith.
(6) No Change in Applicable Law. The Agent will be satisfied that there
---------------------------
will not have occurred on or before the Closing Date any change in any
applicable law or regulation thereunder or interpretation thereof by any
authority charged with the administration thereof or by any court which in the
opinion of counsel for the Agent would make it unlawful or impossible for any
Bank to advance or make any Drawdown.
- 20 -
(7) Opinion from Borrower's Counsel. The Agent will have received from
-------------------------------
general counsel for the Borrower, an opinion, dated the Closing Date and in form
and substance satisfactory to the Agent as to such matters as the Agent will
reasonably require.
(8) Opinions from Guarantor's Counsel. The Agent will have received from
---------------------------------
external counsel to the Guarantor in each of Ohio and New York an opinion, dated
the Closing Date and in form and substance satisfactory to the Agent, as to such
matters as the Agent may reasonably require.
(9) Opinions of Agent's Counsel. The Agent will have received from each
---------------------------
of Messrs. Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Canadian counsel for the Agent, and Messrs.
White & Case, U.S. counsel for the Agent, an opinion, dated the Closing Date and
in form and substance satisfactory to the Agent, with respect to such matters,
if any, relating to the transaction contemplated hereby as the Agent may
reasonably request.
(10) Agent for Service of Process. The Agent and the Banks will have
----------------------------
received evidence satisfactory to the Agent and the Banks of the acceptance by a
duly-appointed agent of the Guarantor of such agent's appointment as agent for
service of process in any legal action or proceeding with respect to the
Guarantee in the courts of the State of New York or of the United States of
America for the Southern District of New York.
8.3 CONDITIONS PRECEDENT TO EACH DRAWDOWN. The obligation of the Banks to
-------------------------------------
make each Drawdown is subject to the fulfilment of the following conditions
precedent on or prior to the date of such Drawdown:
(1) All representations and warranties of the Borrower contained in
Article 2 will be true and correct on and as of such date both before and after
giving effect to the proposed Drawdown with the same effect as if those
representations and warranties had been made on and as of such date.
(2) The Agent will be satisfied that no Event of Default has occurred or
would occur as a result of the making of the Drawdown.
(3) The Agent will have received a Drawdown Notice within the time
specified in Section 3.3(1) and in the form of Schedule B.
9. COVENANTS
9.1 GENERAL COVENANTS. The Borrower covenants with the Agent and the
-----------------
Banks that until the Credit is cancelled and there is outstanding no Drawdown,
the Borrower will:
(1) Corporate Existence. Do or cause to be done all things necessary to
-------------------
keep in full force and effect its corporate existence and all rights,
franchises, licenses and
- 21 -
qualifications to carry on its business or own property in each jurisdiction in
which it carries on business or owns property.
(2) Insurance. Maintain insurance of such type, in such amounts and
---------
against such risks as is customary in the case of companies of an established
reputation engaged in a similar business and similarly situated as the Borrower
with insurers and in form and substance satisfactory to the Banks.
(3) Compliance with Laws etc. Comply with all applicable governmental
------------------------
restrictions and regulations and obtain and maintain in good standing all
licenses, permits and approvals from any and all governments, governmental
commissions, boards or agencies required in respect of its operations, if the
failure to comply therewith or to obtain or maintain the same would materially
adversely affect (i) its financial condition or (ii) its ability to carry on its
business or a significant part thereof.
(4) Payment. Duly and punctually pay or cause to be paid to the Agent for
-------
the Account of each Bank all principal and interest payable hereunder and the
other Documents and all other amounts payable hereunder and thereunder on the
dates, at the places and in the moneys and manner set forth herein and therein.
(5) Use of Credit. Use the entire proceeds of the Credit for general
-------------
corporate purposes.
9.2 ACCOUNTING, FINANCIAL STATEMENTS AND OTHER INFORMATION.
------------------------------------------------------
(1) General. The Borrower will maintain a system of accounting
-------
established and administered in accordance with accounting principles generally
accepted in Canada, consistently applied, and will set aside on its books all
such proper reserves as such accounting principles will require. The Borrower
will permit persons designated by the Agent to visit and inspect at the expense
of the Borrower any properties of the Borrower, to examine the books and
financial records of the Borrower and to discuss its affairs, finances and
accounts, all at such reasonable times and as often as may reasonably be
requested by the Agent. The Persons designated by the Agent pursuant to this
Section may include accountants or management consultants appointed by the Agent
to examine all or any aspect of the operations of the Borrower, and the Borrower
agrees to answer any inquiries which such Persons may have fully and fairly to
the best of its ability. The Borrower further acknowledges that such Persons may
prepare reports to the Agent concerning its financial position and business
prospects and the Agent will have no obligation to disclose the content of such
reports to the Borrower. Neither the Agent nor the Banks will have a duty to
make any such visits, inspections or examinations or to have any such
discussions and will not incur any liability or obligation nor lose any rights
for not making the same.
- 22 -
(2) Reports. The Borrower will furnish to the Agent:
-------
(a) promptly upon availability and in any event within 60 days after the
end of each of its first three fiscal quarters in each fiscal year
commencing with the fiscal quarter in which the Closing Date falls,
unaudited financial statements of the Borrower (consisting of a
balance sheet and a statement of profit and loss) for such quarterly
fiscal period prepared in accordance with generally accepted
accounting principles and certified by the chief accounting officer or
one or more of the senior executive officers of the Borrower to be
prepared on a consolidated basis in accordance with generally accepted
accounting principles applied on a consistent basis, subject to audit;
(b) promptly upon availability and in any event within 90 days after the
end of a fiscal year of the Borrower commencing with the fiscal year
in which the Closing Date falls, the annual financial statements of
the Borrower (consisting of a balance sheet and a statement of profit
and loss) for such fiscal year prepared in accordance with generally
accepted accounting principles consistently applied and certified by
the chief accounting officer or one or more of the senior executive
officers of the Borrower to be prepared on a consolidated basis in
accordance with generally accepted accounting principals applied on a
consistent basis, subject to audit;
(c) together with each delivery of financial statements pursuant to
Section 9.2(2)(b), an officers' certificate, stating that the signers
have reviewed the relevant terms of the Documents and have made, or
caused to be made under their supervision, a review of the
transactions and condition of the Borrower during the period covered
by such statements and that such review has not disclosed the
existence during such period, and that the signers do not have
knowledge of the existence, as at the date of such certificate, of any
condition or event which constitutes an Event of Default or, if any
such condition or event existed or exists, specifying the nature and
period of existence thereof and the action which the Borrower has
taken or proposes to take with respect thereto;
(d) promptly upon the Borrower obtaining knowledge of any condition or
event which constitutes an Event of Default, a certificate of the
Borrower specifying the nature and occurrence of an Event of Default
and what action the Borrower has taken or proposes to take with
respect thereto;
(e) promptly upon any senior officer of the Borrower obtaining knowledge
of any action, suit or proceedings pending or threatened affecting the
Borrower before any court or before any governmental department,
commission or agency or any arbitrator, in Canada, the United States
of America or elsewhere, which could result in any material adverse
change in the business operations, prospects, properties or assets, or
condition, financial or otherwise, of the
- 23 -
Borrower, a certificate of such senior officer specifying the nature
of such action, suit or proceeding and the proposed response of the
Borrower thereto; and
(f) promptly, such other information as the Agent or a Bank may from time
to time reasonably request.
The Borrower will furnish to the Agent sufficient copies of each of the
above documents so that one copy may be distributed to each Bank. Each of the
statements required by Section 9.2(2)(a) and (b) will set forth in comparative
form the corresponding figures for the corresponding period of the preceding
fiscal period (if any), all in reasonable detail.
10. DEFAULT AND ENFORCEMENT
10.1 EVENTS OF DEFAULT. Upon the occurrence of any one or more of the
-----------------
following events, the Agent may and, upon the request of the Majority Banks,
will, without notice to the Borrower, forthwith cancel the Credit and declare
all the Indebtedness of the Borrower under the Documents to be immediately due
and payable, whereupon all such Indebtedness will become immediately due and
payable without any notice or demand, and the Borrower expressly waives
presentation, protest or other notice of any kind:
(1) If the Borrower fails to pay when due any Prime Loan or the amount due on
the maturity of any Acceptance or any part thereof and such default continues
for ten days or more;
(2) If the Borrower fails to pay when due any other amount payable under this
Agreement or under any other Document and such default continues for ten days or
more;
(3) If the Borrower or the Guarantor fails to duly perform or observe any
other term, condition or covenant contained (i) in any Document or (ii) in any
other document, agreement or instrument made between the Borrower or the
Guarantor and any Bank or delivered to any Bank and, in the case of a failure
capable of being remedied, the Agent does not determine, within 30 days after
the Borrower or the Guarantor became aware of the failure, that such failure has
been remedied to the satisfaction of the Agent;
(4) If the Borrower or the Guarantor defaults in (i) the payment when due,
whether by acceleration or otherwise, of any Indebtedness (other than under the
Documents) in an aggregate principal amount greater than U.S.$5,000,000, or (ii)
the payment, performance or observance of any obligation or condition with
respect or relating to any such Indebtedness or if any other event occurs in
respect of such Indebtedness and the effect of such default is to accelerate the
maturity of such Indebtedness or to permit the holder or holders thereof, or any
trustee or agent for such holder or holders, to cause such Indebtedness to
become due and payable prior to its expressed maturity;
- 24 -
(5) If any representation, warranty or statement which is made or deemed to
have been made or acknowledged to have been made by or on behalf of the Borrower
or the Guarantor in any Document or which is contained in any certificate,
statement, legal opinion or notice provided under or in connection with any
Document is materially untrue or materially incorrect in any respect at any time
(or if repeated at any time with reference to the facts and circumstances
subsisting at such time would be materially untrue or materially incorrect in
any respect at such time);
(6) If a final judgment in respect of an amount exceeding U.S.$5,000,000 is
rendered against the Borrower or the Guarantor and within 30 days after entry
thereof such judgment will not have been discharged or execution thereof stayed
pending appeal or, within 10 days after the expiration of any such stay, such
judgment will not have been discharged;
(7) If an encumbrancer takes possession of any property or asset of the
Borrower or the Guarantor which, in the opinion of the Agent, is material or if
a distress or execution or any similar process be levied or enforced
thereagainst and remain unsatisfied for the shorter of a period of 10 days or
such period as would permit such property or such part thereof to be sold
thereunder;
(8) If any obligation or other provision in any Document to which the
Borrower is a party terminates or ceases to be the legally valid, binding and
enforceable obligation of the Borrower or if the Borrower contests in any
manner, the legality, validity, binding nature or enforceability of any Document
to which the Borrower is a party;
(9) If any governmental or other consent, license, or authorization required
to make any Document legal, valid, binding and enforceable or required in order
to enable the Borrower to perform its obligations thereunder is withdrawn or
ceases to be in full force and effect;
(10) If an order is made or an effective resolution passed for the winding-up,
liquidation or dissolution of the Borrower or the Guarantor;
(11) If the Borrower or the Guarantor institutes proceedings for its winding-
up, liquidation, or dissolution or consents to the filing of any petition with
respect thereto or files a petition or answer or consent seeking reorganization,
readjustment, arrangements, composition or similar relief under any American,
Canadian or other applicable law or consents to the filing of any such petition
or to the appointment of a receiver, liquidator, trustee or similar officer of
itself or any part of its property or makes an assignment for the benefit of
creditors or is unable, or admits in writing its inability, to pay its debts as
they become due or otherwise acknowledges its insolvency or is deemed for the
purposes of any applicable law to be insolvent or voluntarily suspends
transaction of its usual business or any action is taken by the Borrower or the
Guarantor in furtherance of any of the aforesaid purposes or if the Borrower or
the Guarantor takes any action pursuant to the Winding-Up Act (Canada) or
similar Canadian or United States legislation;
- 25 -
(12) If a court having jurisdiction in the premises enters a decree or order
for the winding-up, liquidation or dissolution of the Borrower or the Guarantor
or adjudging the Borrower or the Guarantor to be insolvent or enters a decree or
order which remains in force undischarged or unstayed for a period of 60 days or
more approving, as properly filed, a petition seeking reorganization,
readjustment, arrangement, composition or similar relief for the Borrower or the
Guarantor under any American or Canadian or other applicable law, or the
appointment of any receiver, liquidator, trustee or similar officer of the
Borrower or the Guarantor of all or any part of the Borrower's or the
Guarantor's property;
(13) If any application is made with respect to the Borrower or the Guarantor
under the Companies' Creditors Arrangement Act (Canada) or similar legislation
or if a proceeding is instituted for the winding up of the Borrower or the
Guarantor or a petition in bankruptcy is presented against the Borrower or the
Guarantor under a bankruptcy or similar statute and if in any such case such
application, proceeding or petition is not dismissed, stayed or withdrawn within
60 days after the Borrower or the Guarantor has notice or knowledge of the
institution thereof;
(14) If there occurs any change in the ownership of the Borrower such that the
Guarantor ceases to be the direct or indirect holder of all of the issued and
outstanding share capital of the Borrower; or
(15) If the Guarantee or any provision thereof shall cease to be in full force
or effect, or if the Guarantor or any Person acting by or on behalf of the
Guarantor shall deny or disaffirm the Guarantor's obligations under the
Guarantee, or if the Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to the Guarantee.
10.2 LEGAL PROCEEDINGS. After an Event of Default has occurred, the Agent
-----------------
and the Banks may commence such legal action or other proceedings as they in
their sole discretion deem expedient in respect of the Indebtedness of the
Borrower hereunder, all without any additional notice, presentation, demand, or
protest, all of which the Borrower hereby expressly waives.
10.3 NO PREJUDICE, ETC. Nothing contained in any Document, nor any act or
-----------------
omission of any Bank with respect to such Document will in any way prejudice or
affect the rights, remedies and powers of the Banks with respect to any other
Document.
10.4 APPROPRIATION OF MONEYS RECEIVED. The Agent and each Bank may from
--------------------------------
time to time, when an Event of Default has occurred, appropriate any moneys
received by it from the Borrower or from the proceeds of any security given in
or towards payment of such portion of the Indebtedness of the Borrower to the
Agent or such Bank as in its discretion it may see fit, and the Borrower will
have no right to require any inconsistent appropriation.
10.5 CURRENCY INDEMNITY. Any payment on account of an amount payable under
------------------
any Document made to or for the account of the Agent or any Bank by the Borrower
in a
- 26 -
currency (an "Other Currency") other than Canadian Dollars pursuant to a
--------------
judgment or order of a court or tribunal of any jurisdiction will constitute a
discharge of the obligation of the Borrower under such Document only to the
extent of the amount of Canadian Dollars which the Agent or such Bank, as the
case may be, is able, on the date of its receipt of such payment, to purchase in
accordance with its normal practice at the Designated Office with the amount of
the Other Currency so received by it. If the amount of Canadian Dollars which
the Agent or such Bank, as the case may be, is so able to purchase is less than
the amount of Canadian Dollars originally due to it, the Borrower will indemnify
and save the Agent or such Bank, as the case may be, harmless from and against
all loss or damage arising as a result of such deficiency. This indemnity will
constitute an obligation separate and independent from the other obligations
contained in this Agreement, will give rise to a separate and independent cause
of action, will apply irrespective of any indulgence granted by the Agent or
such Bank from time to time and will continue in full force and effect
notwithstanding any judgment or orders for a liquidated sum in respect of an
amount due hereunder or under any judgment or order.
10.6 BANK'S CONTRIBUTIONS.
--------------------
(1) If a Bank receives or recovers any amount (other than from the Agent) in
respect of sums due from the Borrower under this Agreement (whether by set off
or otherwise) it will promptly notify the Agent of such amount and the manner of
its receipt or recovery.
(2) Following receipt of notice under Section 10.6(1) the Agent will, as soon
as practicable, having regard to the circumstances, consult with the Banks to
establish the aggregate amount of sums received or recovered by the Banks and
what payments are necessary amongst the Banks for such aggregate amount to be
divided amongst the Banks in proportion to their participations.
(3) The Banks will promptly make such payments to each other, through the
Agent, as the Agent will direct to effect the proportionate division referred to
in Section 10.6(2).
(4) If a Bank makes a payment or payments pursuant to Section 10.6(3), any
payment previously received by that Bank as described in Section 10.6(1) will,
subject to Section 10.6(5), be deemed to have been made by the Borrower on the
understanding that the procedure described above would be followed and the
liabilities of the Borrower to each of the Banks will accordingly be determined
on the basis that such payment or payments pursuant to Section 10.6(3) would be
made as a distribution on behalf of the Borrower.
(5) Section 10.6(4) will not apply to any amount received or recovered by a
Bank if, as a result, the Indebtedness of the Borrower to the Bank has been
extinguished, discharged or satisfied by the amount received or recovered (for
example because of set off); in this event, if the Bank is required to make a
payment or payments pursuant to Section 10.6(3), then for the purpose only of
determining the liabilities of the Borrower to the Banks
- 27 -
(other than the Bank making the said payment or payments) and the liabilities of
the Banks to each other, the said payment or payments by the Bank will be deemed
to have been made on behalf of the Borrower in respect of its obligations under
this Agreement and to the extent Indebtedness of the Borrower is thereby
discharged the Borrower will fully indemnify the Bank for such payment or
payments.
(6) Any moneys payable by the Borrower under Section 10.6(5) will be payable
from the date the Bank makes the payment or payments under Section 10.6(3), will
carry interest from such date and for such purpose and all other purposes of
this Agreement be treated in the same way as other amounts payable under this
Agreement as though such moneys were payable in respect of the participation of
the Bank which has the benefit of the indemnity contained in Section 10.6(3)
(whether or not the Indebtedness attributable to such participation has been
distinguished, discharged or satisfied in whole or in part).
(7) The parties will make such payments and take such steps as may be just
and equitable to re-adjust the position of the parties if a Bank, having
followed the procedures required above, is required to return any sum to the
Borrower as referred to in Section 10.6(1).
(8) If any Bank (a "benefitted Bank") will at any time receive any payment of
---------------
all or any part of its Prime Loans or Acceptances, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off or otherwise) in a greater proportion than any such payment to and
collateral received by any other Bank, if any, in respect of such other Bank's
Prime Loans or Acceptances, or interest thereon, such benefitted Bank will
purchase for cash from the other Banks such portion of each such other Bank's
Prime Loans or Acceptances, or will provide such other Banks with the benefits
of any such collateral, or the proceeds thereof, as will be necessary to cause
such benefitted Bank to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Banks; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
benefitted Bank, such purchase will be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Bank so purchasing a portion of another Bank's Prime
Loans or Acceptances may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Bank were the direct holder of such portion.
11. THE AGENT AND AGENCY ARRANGEMENTS
11.1 ACTIONS. Subject to this Agreement, each Bank authorizes the Agent to
-------
act on behalf of such Bank under this Agreement and the other Documents and, in
the absence of other written instructions from the Majority Banks received from
time to time by the Agent, to exercise such powers hereunder and thereunder as
are specifically delegated to or required of the Agent by the terms hereof and
thereof, together with such powers as may be reasonably incidental thereto,
provided that (i) any action to be taken by "the Banks" may
- 28 -
only be taken by the Agent with the approval of the Majority Banks, (ii) any
requirement that any matter must be satisfactory to "the Banks" must be approved
by the Majority Banks, and (iii) any reference to "each Bank" or "each of the
Banks" or "all of the Banks" will require the approval of all Banks. In each
case such approval will be written, will be specific to the matter addressed
therein, and may not be relied upon by the Borrower unless it is expressly
addressed to the Borrower. The Borrower will be entitled to assume that any
action taken by the Agent has the required approval unless the Borrower has
knowledge to the contrary. In the event that the Agent receives express notice
of the occurrence of any Event of Default, the Agent will give notice thereof to
the Banks and will consult with the Banks with respect to the action to be
taken. The Agent will take such action with respect to such Event of Default as
will be reasonably directed by the Majority Banks, provided that unless and
until the Agent will have received such directions, the Agent may (but will not
be obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default as it will deem advisable in the best interests
of the Banks.
11.2 DIRECTIONS. The Agent agrees that, subject to Section 11.3, it will
----------
comply in good faith with all written instructions received from the Majority
Banks, or, where required, all of the Banks, and it will not take any action
which requires the approval of the Banks or the Majority Banks without first
receiving such approval.
11.3 INDEMNITY. Each Bank agrees (which agreement will survive any
---------
termination of this Agreement) to indemnify the Agent, pro rata according to
such Bank's Proportion, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may at any time be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of any Document or the enforcement of any of the Documents, including,
without limitation, the reimbursement of the Agent for all reasonable out-of-
pocket expenses (including reasonable solicitor's fees, inclusive of
disbursements and taxes) incurred by the Agent under or in respect of the
Documents or in enforcing payment of the Indebtedness of the Borrower under any
of the Documents, in all cases as to which the Agent is not reimbursed by the
Borrower (collectively, the "Liabilities"); provided, however, that no Bank will
----------- -------- -------
be liable for the payment of any portion of the Liabilities determined by a
court of competent jurisdiction in a final proceeding to have resulted from the
Agent's gross negligence or wilful misconduct. The Agent will not be required to
take any action under any Document, or to prosecute or defend any suit in
respect of any Document, unless it is indemnified to its satisfaction by the
Banks against all Liabilities. If any indemnity in favour of the Agent will
become impaired or will be insufficient, the Agent may call for additional
indemnity and cease to do the acts indemnified against until such additional
indemnity is given.
11.4 LIABILITY OF AGENT, ETC. Neither the Agent nor any of its directors,
-----------------------
officers, employees or agents will be liable:
(a) for the execution, validity, enforceability or effectiveness of any
Document;
- 29 -
(b) for any failure of the Borrower or any Bank to duly and punctually
observe and perform any of their respective obligations under any
Document;
(c) for any statements, representations or warranties made or referred to
in any Document or in any certificate, report, statement, other
document or information given to any of the Banks in connection with
any Document;
(d) for any action taken or omitted by any of them under or in connection
with any Document unless such action is directly due to their own
gross negligence or wilful misconduct;
(e) for the consequences of relying on any communication or document
believed by any of them to be genuine and correct and to have been
communicated or signed by the person by whom it purports to be
communicated or signed; or
(f) for the consequences of relying on the advice of any professional
advisers selected by any of them in connection with this Agreement.
11.5 DEALINGS BY AGENT. With respect to its own participation in the
-----------------
Credit and the Drawdowns, Deutsche Bank Canada will have the same rights and
powers under any Document as any other Bank and may exercise them as though it
were not also acting as agent for the Banks. The Agent and its associates and
affiliates may, without liability to disclose or account, engage in any kind of
financial, trust or commercial business with, or acquire or dispose of any kind
of security of, the Borrower or any of the Borrower's associates or affiliates
as if the Agent were not the agent for the Banks and neither the Agent nor any
of its associates nor affiliates will have any obligation to disclose or account
for any dealings which it may have had with the Borrower or any of its
associates or affiliates prior to the date of this Agreement.
11.6 EXCULPATION. Neither the Agent nor any of its directors, officers'
-----------
employees or agents will be liable to any Bank for any action taken or omitted
to be taken by it under this Agreement or any other Document, or in connection
herewith or therewith, except for its own wilful misconduct or gross negligence,
nor responsible for any representations or warranties herein or therein, nor for
the effectiveness, enforceability, validity or due execution of this Agreement
or any other Document, nor to make any inquiry respecting the performance by the
Borrower of its obligations hereunder or thereunder. The Agent will be entitled
to rely upon advice of counsel concerning legal matters and upon any notice,
consent, certificate, statement, or writing which it believes to be genuine and
to have been presented by a proper Person.
11.7 NOTICE, COPIES, ETC. The Agent will give prompt notice to each Bank
-------------------
of each notice or request received by the Agent which is required or permitted
to be given to the Agent by the Borrower pursuant to the terms of any Document.
The Agent will promptly distribute to each Bank copies of all communications
received by the Agent from the Borrower for distribution to the Banks by the
Agent. If the Agent is notified under this
- 30 -
Agreement of the occurrence of an Event of Default it will inform each
of the Banks of such notice.
11.8 FUNDING RELIANCE, ETC. Unless the Agent will have been notified by
---------------------
telephone, confirmed in writing, by any Bank by 5:00 p.m., Toronto time, on the
day prior to a Drawdown under the Credit that such Bank will not make available
the amount which would constitute its Bank's Proportion of the Drawdown on the
date specified therefor, the Agent may assume that such Bank has made such
amount available to the Agent on such date and, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
amount is made available by such Bank to the Agent on a date after the date of
the relevant Drawdown, such Bank will pay to the Agent on demand interest on
such amount at the rate of interest applicable to the Drawdown. A statement of
the Agent submitted to any Bank with respect to any amounts owing under this
Section will in the absence of manifest error, be conclusive evidence of the
requirement for the payment of such amount by the relevant Bank to the Agent. If
such amount is not in fact made available to the Agent by such Bank within three
Banking Days after the date of the relevant Drawdown, the Agent will be entitled
to recover such amount, with interest thereon at the rate per annum applicable
to the Drawdown, forthwith upon demand from the Borrower.
11.9 PAYMENT RELIANCE. Unless the Agent will have been notified by
----------------
telephone, confirmed in writing, by the Borrower prior to the time fixed for
payment by the Borrower of any amount under the Documents, that the Borrower
will not make the required payment on the date specified therefor, the Agent
may, but will not be obligated to, assume that the Borrower has made such
payment on such date and, in reliance on such assumption, make available to the
Banks their respective Bank's Proportions of such amount. If such payment is not
made by the Borrower forthwith upon request by the Agent each Bank will return
the amount received by it in respect thereof, with interest at the usual rate of
interest for inter-bank settlements.
11.10 SUCCESSOR. The Agent may resign as such at any time upon at least 30
---------
days' prior notice to the Borrower and all the Banks. If the Agent at any time
will resign, the Majority Banks may appoint another Bank as a successor Agent
which will thereupon become the Agent hereunder. If no successor Agent will have
been so appointed by the Majority Banks, and will have accepted such
appointment, within 30 days after the retiring Agent's giving notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which will be one of the Banks. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent will
be entitled to receive from the retiring Agent such documents of transfer and
assignment as such successor Agent may reasonably request, and will thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent will be discharged from its duties
and obligations under this Agreement. After any retiring Agent's resignation
hereunder as the Agent, the provisions of this Article 11 will inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement.
- 31 -
11.11 LOANS AND ACCEPTANCES BY THE AGENT. The Agent will have the same
----------------------------------
rights and powers with respect to the Prime Loans and Acceptances made by it as
any Bank and may exercise the same as if it were not the Agent.
11.12 DEUTSCHE BANK CANADA AS THE AGENT. In acting as Agent for the Banks,
---------------------------------
the credit and treasury divisions of Deutsche Bank Canada will be treated as
entities separate from any of Deutsche Bank Canada's other divisions or
subsidiaries. Without detracting from the generality of the foregoing, in the
event that any of the other divisions or subsidiaries of the Agent should act
for the Borrower or any of its affiliates in an advisory capacity in relation to
any other matter, any information given by the Borrower or any of its affiliates
to such divisions or subsidiaries for the purpose of obtaining advice will be
treated as confidential and will not be available to the Banks without the
consent of the Borrower.
11.13 CHANGES. Any provision of any Document may from time to time be
-------
amended, restated, modified or waived (a "Change"), if such Change is in
------
writing and consented to by the Borrower and the Majority Banks; provided that
each of the following Changes will require the prior written consent of each
Bank and will not be effective until each such consent is received by the Agent:
(a) any Change to any requirement of this Agreement or any other Document
that any particular action be taken by each of the Banks or by each
Bank or by all of the Banks or by the Majority Banks;
(b) any Change to this Section 11.13 or to the definition of "Majority
Bank" or "Bank's Proportion";
(c) any increase in the aggregate amount of the Commitments or the amount
of the Commitment of any Bank;
(d) any reduction in the amount of any payment or prepayment of principal,
interest, fees or other amounts provided for in this Agreement or any
other Document;
(e) any reduction in the outstanding principal amount of or rate of
interest or fees payable in respect of any Prime Loan or Acceptance
under the Credit;
(f) any extension in the due date for any payment or prepayment of
principal, interest or fees payable in respect of the Credit; and
(g) any waiver of an Event of Default.
11.14 WAIVERS. No waiver or approval by a Bank or under any Document will,
-------
except as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions, nor will any such waiver or approval require any
similar or dissimilar waiver or approval by such Bank to be granted thereafter.
- 32 -
11.15 TERMINATION ACTION BY AGENT. Subject to receipt of any indemnity
---------------------------
required by the Agent in accordance with this Agreement, the Agent will take or
refrain from taking any action in respect of demanding or terminating the Credit
as the Majority Banks may direct in writing from time to time.
11.16 NOTICE. Each Bank, in its capacity as a lender of the Credit, agrees
------
to provide each other Bank with at least one Banking Day's prior written notice
of its intention to direct the Agent to take any action in respect of demanding
or terminating the Credit, provided that such notice may be waived in writing by
the Banks.
11.17 REPRESENTATIONS AND AGREEMENTS OF THE BANKS. Each Bank represents,
-------------------------------------------
warrants to and in favour of, and agrees with, the Agent as follows:
(1) It has independently of the Agent and each other Bank, and based on
the financial and other information provided by the Borrower and such other
documents, information and investigations as it has deemed appropriate, made its
own credit decision to extend its Commitment. Each Bank also acknowledges that
it will, independently of the Agent and each other Bank, and based on such other
documents, information and investigations as it will deem appropriate at any
time, continue to make its own credit decisions as to exercising or not
exercising from time to time any rights and privileges available to it under any
Document.
(2) It has itself been, and will continue to be, solely responsible for
making its own independent appraisal of and investigations into the financial
condition, creditworthiness, affairs, status and nature of the Borrower and its
business and the Documents.
(3) It has not relied, and will not hereafter rely, on the Agent, its
directors, officers, employees, agents, auditors or legal counsel (collectively
"the Agent and its representatives"), to appraise or keep under review on its
---------------------------------
behalf, or inform the Bank of the financial condition, creditworthiness,
affairs, status or nature of the Borrower or its business or any Default or
Event of Default except in respect of which the Agent has received notice from
the Borrower.
(4) The Commitment of such Bank is at the entire risk of such Bank.
(5) The Agent and its representatives have not made any representation or
warranty or assumed (nor will the Agent assume) any responsibility with respect
to the due execution, legality, validity, adequacy, enforceability,
collectability, priority, perfection or any other matter relating to any
Document, the financial condition of the Borrower, the performance by the
Borrower of its obligations under any Document or the accuracy of any
information supplied to the Bank.
(6) The Agent and its representatives may consult with legal counsel,
independent public accountants and other experts selected by them or the
Borrower in connection with the
- 33 -
Documents, including this Agreement, and will not be liable for any action taken
or omitted to be taken in good faith by any of them in accordance with the
advice of such Persons.
(7) The Agent and its representatives will incur no liability under or in
respect of this Agreement or any other Document by acting upon any notice,
consent, advice, writing (whether by letter, telephone, telegram, cable, telex,
facsimile or otherwise) believed by them to be genuine or signed by the proper
party or by acting upon any representation or warranty made by the Borrower or
any other such Person in connection with the Borrower.
11.18 APPLICATION. The Borrower expressly consents to the arrangements
-----------
among the Banks provided for in this Article 11 and agrees that each Bank may
exercise the rights provided herein with respect to any and all obligations of
the Borrower to such Bank under the Documents.
12. ASSIGNMENT
12.1 BENEFIT AND BURDEN OF THIS AGREEMENT. This Agreement will enure to
------------------------------------
the benefit of and be binding on the parties hereto, their respective successors
and any permitted assignees or transferees of some or all of the parties' rights
or obligations hereunder.
12.2 ASSIGNMENT BY BORROWER. This Agreement will be binding upon and enure
----------------------
to the benefit of the Borrower and its successors and assigns, provided that
neither this Agreement, nor the benefit hereof, may be assigned by the Borrower
without the prior written consent of each of the Banks.
12.3 ASSIGNMENT BY BANKS. From time to time a Bank may, with the prior
-------------------
written consent of the Borrower, assign all or any part of its rights to, and
may have its obligations in respect of, the Credit assumed by any other Person.
An assignment will become effective when the Borrower has been notified of it by
the Bank and has received from the assignee an instrument of adhesion in the
form of Schedule D (addressed to all the parties to this Agreement), pursuant to
which such assignee shall have agreed to be bound by this Agreement and to
perform the obligations assigned to it. Any assignee will be and be treated as
if it were a Bank for all purposes of this Agreement, will be entitled to the
full benefit hereof and will be subject to the obligations of the assigning Bank
to the same extent as if it were an original party in respect of the rights or
obligations assigned to it and the assigning Bank will be released and
discharged accordingly and to the same extent. For the purposes of any such
assignment the Bank may disclose on a confidential basis to a potential assignee
such information about the Borrower as the Bank may see fit.
12.4 LIMITATION ON ASSIGNMENT. A Bank will not be entitled, without the
------------------------
prior written consent of all the Banks and the Borrower, to grant an assignment
pursuant to Section 12.3 if this would, immediately following such assignment,
increase the cost of this credit facility to the Borrower.
- 34 -
12.5 BORROWER'S DOCUMENTS. The Borrower agrees to execute and deliver, at
--------------------
the Banks' request and expense, such further documentation as the Banks consider
necessary or advisable to put into effect any syndication, sale or assignment
permitted by this Article 12.
13. MISCELLANEOUS
13.1 PAYMENT OF EXPENSES. Whether or not the transactions contemplated by
-------------------
this Agreement will be consummated, the Borrower will on demand by the Agent pay
to the Agent for its own account or for the account of the Banks, as the case
may be, all reasonable out-of-pocket expenses of the Agent and the Banks
including the fees and disbursements of any experts or advisers (including,
without limitation, lawyers and independent consultants) retained by the Agent
and the Banks in connection with the preparation and enforcement of the
Documents, any syndication of the Credit, any amendment, modification or waiver
of any of the provisions thereof and also in connection with the protection and
enforcement of the rights of the Agent and the Banks provided for in the
Documents.
13.2 RIGHTS AND WAIVERS. The respective rights and remedies of the Agent
------------------
and each Bank under the Documents and in connection therewith (i) are
cumulative, (ii) may be exercised as often as they consider appropriate, (iii)
are in addition to their rights and remedies under the general law and (iv) will
not be capable of being waived or varied except by virtue of an express waiver
or variation in writing signed by an officer; and in particular any failure to
exercise or any delay in exercising any of such rights and remedies will not
operate as a waiver or variation of that or any other such right or remedy; any
defective or partial exercise of any of such rights will not preclude any other
or future exercise of that or any other such right or remedy; and no act or
course of conduct or negotiation on the part of the Agent or a Bank or on its
behalf will in any way preclude it from exercising any such right or remedy or
constitute a suspension or variation of any such right or remedy.
13.3 COMMUNICATION. Subject to the express provisions of this Agreement,
-------------
all communications provided for or permitted hereunder will be in writing,
personally delivered to an officer or other responsible employee of the
addressee or sent by registered mail, charges prepaid, or by telex or telegram
or other similar means of recorded communication, charges prepaid, to the
applicable address set forth on the signature pages of this Agreement or to such
other address as the recipient hereto may from time to time designate to the
other in such manner.
Any communication so personally delivered will be deemed to have been
validly and effectively given on the date of such delivery. A communication so
sent by mail, telex, telegram or other means mentioned above will be deemed to
have been validly and effectively given on the Banking Day next following the
day on which it is sent.
13.4 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
---------------------------------------------------------------------
All agreements, representations, warranties and covenants made by or on behalf
of the Borrower in any Document or otherwise with respect thereto or any
transactions
- 35 -
contemplated thereby are material, will be considered to have been relied upon
by the Agent and each Bank and will survive the execution and delivery of the
Documents or any investigation made at any time by or on behalf of the Agent and
each Bank and any reduction of the Utilized Portion of a Credit until repayment
in full of the Drawdowns and of all other amounts owing under the Documents and
cancellation of the Credit. All statements contained in any certificate or other
instrument delivered by or on behalf of the Borrower pursuant to the Documents
or in connection with the transactions contemplated hereby will be deemed
representations and warranties made by the Borrower pursuant hereto.
13.5 FURTHER ASSURANCES. The Borrower will do, execute and deliver, or
------------------
will cause to be done, executed and delivered, all such further acts, documents
(including certificates, declarations, affidavits, reports and opinions) and
things as the Agent or any Bank may reasonably request for the purpose of giving
effect to this Agreement or for the purpose of establishing compliance with the
representations, warranties and conditions of any Document.
13.6 SEVERABILITY. Any provision in any Document which is prohibited or
------------
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
13.7 COUNTERPARTS. This Agreement may be simultaneously executed in any
------------
number of counterparts, each of which will be deemed to be an original, and it
will not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
13.8 DETERMINATION OF MATERIALITY. In any Document, except where
----------------------------
specifically stated otherwise, whether any act, occurrence, conduct, event or
state of affairs or other similar event is "material", "adverse" or "materially
adverse" or any grammatical variation of such words, will be determined by the
Banks in their sole discretion.
13.9 SUBMISSIONS TO JURISDICTION. This Agreement will be construed in
---------------------------
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable in Ontario and the Borrower irrevocably submits to the non-
exclusive jurisdiction of the courts of Ontario, waives any objections on the
ground of venue or forum non conveniens or any similar grounds, and consents to
service of process by mail or in any other manner permitted by relevant law.
13.10 PARTNERSHIP. Nothing contained or in any Document nor any action
-----------
taken pursuant hereto or thereto will be deemed to constitute the Banks a
partnership, joint venture or any other similar such entity.
13.11 ENTIRE AGREEMENT. This Agreement, including the Schedules hereto,
----------------
constitute the entire agreement between the parties and except as stated herein
or in the
- 36 -
Documents or the instruments and documents to be executed and delivered pursuant
hereto, contains all the representations and warranties of the respective
parties.
13.12 EVIDENCE OF INDEBTEDNESS. In any proceedings relating to any
------------------------
Document, any statement as to any amount due to the Banks thereunder which is
certified as being correct by an officer of the Agent and any statement as to
any amount due to a Bank under any Document which is certified as being correct
by an officer of such Bank will, unless otherwise provided herein, be conclusive
evidence that such amount is in fact due and payable.
- 37 -
13.13 SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
--------------------------
representations and warranties made pursuant hereto or to any Documents, will
survive the execution and delivery of each Document and continue in full force
and effect until the full payment of all Indebtedness of the Borrower to the
Bank as provided in the Documents.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date and year first above written.
Alco Office Systems-Canada, Inc. ALCO OFFICE SYSTEMS-CANADA,
Suite 6600 INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Place By: /s/ Signature
Toronto, Ontario ---------------------------------
M5X 1B8 Name: [Name]
Title: [Title]
By: /s/ Signature
---------------------------------
Name: [Name]
Title: [Title]
Deutsche Bank Canada DEUTSCHE BANK CANADA, as Agent
Suite 1200 and as Bank
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ By: /s/ Signature
---------------------------------
Name: [Name]
Title: [Title]
By: /s/ Signature
---------------------------------
Name: [Name]
Title: [Title]
- 38 -
Chemical Bank of Canada CHEMICAL BANK OF CANADA, as
Suite 900 Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ By: /s/ Signature
M5C 2W1 ---------------------------------
Name: [Name]
Title: [Title]
Branch of Account Address ROYAL BANK OF CANADA, as Bank
Royal Bank of Canada
14th Floor South Tower By: /s/ Signature
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ---------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Name: [Name]
▇▇▇ ▇▇▇ Title: [Title]
Communications Address By: /s/ Signature
---------------------------------
Royal Bank of Canada Name: [Name]
One Financial Square Title: [Title]
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇.▇.▇. ▇▇▇▇▇-▇▇▇▇
SCHEDULES
------------
Schedule A - Banks' Proportions
Schedule B - Form of Drawdown Notice
Schedule C - Form of Guarantee
Schedule D - Instrument of Adhesion
SCHEDULE A
BANKS' PROPORTIONS
------------------
================================================================================
BANK PERCENTAGE
--------------------------------------------------------------------------------
Deutsche Bank Canada 50%
--------------------------------------------------------------------------------
Chemical Bank of Canada 20%
--------------------------------------------------------------------------------
Royal Bank of Canada 30%
--------------------------------------------------------------------------------
TOTAL 100%
================================================================================
SCHEDULE B
DRAWDOWN NOTICE
---------------
TO: Deutsche Bank Canada (the "Agent")
-----
Attention: ___
[Date]
RE: Credit agreement (the "Credit Agreement") dated as of October _, 1995
----------------
made between the undersigned (the "Borrower"), the Agent and the Banks
--------
Drawing Number: ___
--------------------------------------------------------------------------------
We refer to the facility constituted by the Credit Agreement and we
hereby:
(1) Give you notice that on _____, 199_, we wish to obtain the following
Drawdown:
(a) Prime Loan in the amount
of $_______________
(b) Canadian Dollar denominated
Bankers Acceptance to be drawn
under the Credit in the principal
amount of $_______________ and
having a term (subject to the
Credit Agreement) of ___ months;
and $_______________
(2) Confirm that each of the representations referred to and warranties
contained in Section 2 of the Credit Agreement remains accurate as if given on
the date hereof by reference to the facts and circumstances now existing.
All terms defined in the Credit Agreement and used herein will have the meanings
ascribed thereto in the Credit Agreement.
ALCO OFFICE SYSTEMS-CANADA, INC.
By:
-------------------------------
Name:
Title:
SCHEDULE C
FORM OF GUARANTEE
-----------------
ATTACHED
SCHEDULE D
INSTRUMENT OF ADHESION
----------------------
THIS INSTRUMENT OF ADHESION is made as of the ____ day of _, 199_
between _____ (the "Assignee") and each of the parties (the "Parties") to the
-------- -------
credit agreement (as amended, restated, supplemented or otherwise modified the
"Credit Agreement") dated as of October 13, 1995 between Alco Office Systems-
----------------
Canada, Inc., as Borrower, Deutsche Bank Canada, as Agent, and the Banks listed
in Schedule A to the Credit Agreement.
BACKGROUND
----------
A. The Assignee is the assignee of a portion of the Bank's Proportion of
[SPECIFY ASSIGNOR] under the Credit Agreement such that, after giving effect to
such assignment, the Banks' Proportions under the Credit Agreement are as set
forth on the attached Schedule A.
B. As contemplated by Section 12.3 of the Credit Agreement, the Assignee
wishes to enter into this Agreement in favour and for the benefit of each of the
Parties.
C. The Assignee and the Parties wish to confirm the amendment and
supplement of the Credit Agreement to reflect the Assignee's status as a party
to the Credit Agreement.
AGREEMENT
---------
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
1. The Assignee agrees, as of the date hereof, to be bound by each of the
terms and conditions of the Credit Agreement, all as if the Assignee was an
original party thereto.
2. The parties hereto other than the Assignee agree, as of the date
hereof, to recognize the Assignee as a party to the Credit Agreement as if the
Assignee was an original party thereto.
3. All parties hereto agree that the Credit Agreement is hereby amended
and supplemented to give full effect to the arrangements contemplated hereby,
and that Schedule A to the Credit Agreement is hereby amended to reflect the
Banks' Proportions specified on Schedule A hereto.
4. This Instrument of Adhesion is made pursuant to the laws of Ontario
and the federal laws of Canda applicable therein, and shall be governed by and
construed in accordance with such laws.
- 2 -
Capitalized terms used but not defined in this Instrument of Adhesion
(included in the "Background" portion hereof) have the meanings given to them by
the Credit Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Instrument of
Adhesion as of the date and year first written above.
[SIGNATURE LINES TO BE ADDED FOR BORROWER, AGENT,
BANKS AND ASSIGNEE]