CREDIT AGREEMENT
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
AS BORROWER
-AND-
AS LENDER
DATED AS OF OCTOBER 23, 1997
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION
1.1 Definitions....................................................... 1
1.2 Sections and Headings............................................. 14
1.3 Number............................................................ 14
1.4 Banking Days...................................................... 14
1.5 Currency of Payments.............................................. 14
1.6 Conflict with Security Documents.................................. 14
1.7 Schedules......................................................... 14
ARTICLE II
THE CREDIT FACILITY
2.1 Aggregate Amount.................................................. 15
2.2 Term.............................................................. 15
ARTICLE III
THE REFINANCING FACILITY
3.1 Purpose........................................................... 15
3.2 Availability and Conversion....................................... 15
3.3 Interest.......................................................... 15
3.4 Repayment and Prepayment.......................................... 16
3.5 Event of Default.................................................. 17
3.6 Sale of Certain Pledged Shares.................................... 17
ARTICLE IV
THE ACQUISITION FACILITY
4.1 Purpose........................................................... 18
4.2 Availability...................................................... 18
4.3 Interest.......................................................... 18
4.4 Repayment and Prepayment.......................................... 19
ARTICLE V
THE INTEREST PAYMENT FACILITY
5.1 Purpose........................................................... 19
5.2 Availability...................................................... 19
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5.3 Interest.......................................................... 20
5.4 Repayment and Prepayment.......................................... 20
ARTICLE VI
EVIDENCE OF LOANS
6.1 Evidence of Indebtedness.......................................... 21
6.2 Irrevocability.................................................... 21
ARTICLE VII
PAYMENTS, INTEREST, PRINCIPAL, FEES, ETC.
7.1 Deferred Interest................................................. 21
7.2 Default Interest.................................................. 21
7.3 Prepayments....................................................... 21
7.4 Method and Place of Payment....................................... 22
7.5 Change of Circumstances........................................... 22
7.6 Increased Costs................................................... 23
7.7 Illegality........................................................ 24
7.8 Maximum Rate of Interest.......................................... 24
7.9 Commitment Fee.................................................... 25
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES.
8.1 Representations and Warranties.................................... 26
8.2 Nature of Representations and Warranties.......................... 30
ARTICLE IX
CONDITIONS PRECEDENT
9.1 Conditions for Closing............................................ 30
9.2 Conditions for Drawdowns.......................................... 31
9.3 Waiver............................................................ 32
ARTICLE X
SECURITY, MARGIN, AND DISPOSITIONS
10.1 Security Documents................................................ 33
10.2 Margin............................................................ 33
10.3 Distributions..................................................... 34
10.4 Voting Rights..................................................... 35
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ARTICLE XI
COVENANTS
11.1 Affirmative Covenants............................................. 35
11.2 Negative Covenants................................................ 38
ARTICLE XII
EVENTS OF DEFAULT
12.1 Acceleration...................................................... 39
12.2 Remedies Cumulative and Waivers................................... 40
12.3 Set-Off........................................................... 40
ARTICLE XIII
COSTS, EXPENSES AND INDEMNIFICATION
13.1 Costs and Expenses................................................ 40
13.2 Indemnification by the Borrower................................... 41
ARTICLE XIV
GENERAL
14.1 Survival.......................................................... 41
14.2 Notices........................................................... 41
14.3 Amendment and Waiver.............................................. 42
14.4 Governing Law..................................................... 42
14.5 Courts............................................................ 42
14.6 Further Assurances................................................ 43
14.7 Enforcement and Waiver by the Lender.............................. 43
14.8 Execution in Counterparts......................................... 43
14.9 Judgment Currency................................................. 43
14.10 Assignments and Transfer.......................................... 44
14.11 Invalidity........................................................ 44
CREDIT AGREEMENT made as of the 23rd day of October, 1997.
B E T W E E N:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
a businessman residing in Burnaby, British Columbia,
(hereinafter referred to as the "BORROWER"),
OF THE FIRST PART,
-and-
a Canadian chartered bank,
(hereinafter referred to in such capacity, as the "LENDER"),
OF THE SECOND PART.
WHEREAS the Borrower has requested that the Lender provide a credit
facility up to an aggregate amount not exceeding $190 million and the Lender
has agreed to provide such facility upon and subject to the terms and
conditions set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
covenants and agreements herein contained, the parties hereto agree as
follows:
ARTICLE I
INTERPRETATION
1.1 DEFINITIONS. In this Agreement, unless something in the subject
matter or context is inconsistent therewith:
"ACCEPTABLE MARGIN RATIO" means, at any time during the Acquisition Period, a
Margin Ratio of 1.70:1.00 and at any time thereafter a Margin Ratio of
1.25:1.00, provided that, if at any time a Drawdown of a Canadian Dollar Loan
is made, the Acceptable Margin Ratio from and after the later of (i) the date
the first Drawdown of a Canadian Dollar Loan is made and (ii) the day
following the end of the Acquisition Period shall be 1.30:1.00;
"ACQUIRED SHARES" means the Common Shares to be acquired by the Borrower with
the proceeds of the Acquisition Facility as provided in Section 4.1;
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"ACQUISITION FACILITY" means the non-revolving credit facility in an
aggregate amount of up to $110 million to be made available to the Borrower
hereunder as set forth in Article IV;
"ACQUISITION PERIOD" means the period commencing on the Closing Date and
ending on the earlier of (i) 11:59 p.m. (Toronto time) on the 90th day after
the Closing Date and (ii) the date that the Borrower shall have drawn down
the full amount of the Acquisition Facility;
"ADDITIONAL INTEREST" has the meaning set out in Section 7.6;
"ADDITIONAL PRINCIPAL AMOUNT" means the amount determined in accordance with
Schedule A, being a portion of the principal amount of the Acquisition
Facility which shall become payable on the Loan Termination Date;
"AGREEMENT" means this agreement and any and all amendments made hereto by
written agreement between the Borrower and the Lender;
"ASSOCIATE" has the meaning attributed thereto in the SECURITIES ACT
(Ontario) as now in effect;
"AUTHORIZATION" means any permit, licence, approval, consent, order, right,
certificate, judgment, writ, injunction, award, determination, authorization,
privilege, registration, grant, waiver or concession by or from any Official
Body;
"BA INTEREST PERIOD" means, with respect to the BA Rate Loan, the period of
approximately three months duration, in each case commencing on the date a
Prime Rate Loan Conversion shall occur or the last day of the preceding BA
Interest Period with respect to such BA Rate Loan, as the case may be;
provided that in any case, the last day of each BA Interest Period shall also
be the first day of the next BA Interest Period and provided that the last BA
Interest Period hereunder shall expire on the Loan Termination Date;
"BA RATE" means, for each BA Interest Period, a rate per annum equal to the
discount rate per annum expressed as an interest rate calculated on the basis
of a year of 365 days for Canadian dollar bankers' acceptances in an amount
similar to the BA Rate Loan and for a period similar to such BA Interest
Period which appears on the display page designated as the CDOR Page (or any
replacement page) by Reuters Money Market Service (or any successor or
similar service as may be selected by the Lender) as of 10:00 a.m. (Toronto
time) on the first Canadian Banking Day preceding the first day of such BA
Interest Period as reported by the Lender;
"BA RATE LOAN" means a loan in Canadian Dollars as the result of the
Conversion referred to Section 3.2 made by the Lender to the Borrower
hereunder on which interest is payable by reference to the BA Rate;
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"BANKING DAY" means, with respect to each Fixed Rate Loan and Base Rate Loan,
a U.S. Banking Day, with respect to the LIBOR Loan, a Eurodollar Banking Day
and with respect to the BA Rate Loan and each Prime Rate Loan, a Canadian
Banking Day;
"BASE RATE" means, for any day, a rate per annum equal to the higher of:
(i) the annual variable rate of interest quoted or published by
the Lender from time to time as the base rate of interest
charged by it for commercial loans in U.S. Dollars made by
it in Canada for such day; and
(ii) the sum of (x) the Federal Funds Rate for such day
multiplied by a fraction, the numerator of which is the
number of days in the calendar year in which such day
occurs and the denominator of which is 360 and (Y) 1%.
"BASE RATE LOAN" means a loan made by the Lender to the Borrower hereunder on
which interest is payable by reference to Base Rate;
"BASIC PRINCIPAL AMOUNT" means, at any time, the aggregate principal amount
of Fixed Rate Loans outstanding under the Acquisition Facility at such time;
"BORROWERS' CERTIFICATE" means a certificate signed by the Borrower;
"BUSINESS DAY" means a day on which banks are open for business in Toronto,
Ontario and Vancouver, British Columbia but does not include a Saturday or
Sunday;
"CANADIAN BANKING DAY" means a Business Day;
"CANADIAN DOLLARS" or "CAN $" means the lawful currency of Canada in
immediately available funds;
"CANADA DOLLAR LOANS" means collectively, all Prime Rate Loans and the BA
Rate Loan;
"CHANGE IN LAW" has the meaning set out in Section 7.6;
"CLOSING DATE" means October 24, 1997 or such other date as may be mutually
agreed to by the Lender and the Borrower;
"COLLATERAL" means the Pledged Shares, the Specified Options and any other
property and assets to be subject to the Lien of the Security Documents;
provided Initially Pledged Shares shall only form part of the Collateral from
and after the respective dates that the Lender shall obtain possession
thereof as provided in Section 9.2(e);
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"COMMITMENT FEE" has the meaning set forth in Section 7.9;
"COMMON SHARES" means the common shares without par value of the Corporation
and shall include any shares or other securities into or for which such
common shares may be converted, subdivided, consolidated, reclassified or
exchanged, including, without limitation, securities of any Person;
"CONTROL BLOCK" means, in relation to the Corporation, any securities of the
Corporation beneficially owned or controlled by a Control Person;
"CONTROL PERSON" means, a Person who is either (i) a Person referred to in
clause (c) of the definition of "distribution" in the SECURITIES ACT
(Ontario) or (ii) a "control person" as defined in the SECURITIES ACT
(British Columbia);
"CONVERSION" means a conversion of a Base Rate Loan into the LIBOR Loan as
provided in Section 3.2 or Section 7.5 (a "Base Rate Loan Conversion"), a
conversion of a Prime Rate Loan into a BA Rate Loan as provided in Section
3.2 (a "Prime Rate Loan Conversion"), the conversion of the LIBOR Loan into a
Base Rate Loan as provided in Section 3.5 or Section 7.5 (a "LIBOR Loan
Conversion") or the conversion of a BA Rate Loan into a Prime Rate Loan as
provided in Section 3.5 (a "BA Rate Loan Conversion");
"CORPORATION" means The ▇▇▇▇▇▇ Group Inc., a British Columbia corporation;
"CREDIT FACILITY" has the meaning set out in Section 2.1;
"CREDIT FACILITY DOCUMENTS" means this Agreement, the Security Documents, and
all other documents to be executed and delivered to the Lender by an Obligor
hereunder or thereunder;
"DEBT" of any Person means all indebtedness or liabilities of a Person for
and in respect of borrowed money, including, without limitation, obligations
with respect to bankers' acceptances, letters of credit and letters of
guarantee and all such indebtedness or liabilities which are directly or
indirectly guaranteed by such Person or which such Person has agreed
(contingently or otherwise) to purchase or otherwise acquire;
"DEFAULT" means an event which with the giving of notice, passage of time or
both would constitute an Event of Default;
"DEFERRED INTEREST" means interest on any Loan the payment of which is
deferred as provided in Section 7.1 and any interest on such deferred
interest;
"DISTRIBUTIONS" means all dividends and distributions in respect of the
Pledged Securities, including, without limitation, stock dividends,
securities received as a result of stock splits, interest
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payments, dividend payments, reductions in capital, redemptions, repurchases
and repayments, conversion privileges, options and all rights to purchase
additional securities and includes any Common Shares issued upon the exercise
of the Specified Options;
"DRAWDOWN" means, subject as otherwise hereinafter provided, the drawdown of
a Loan to be made pursuant to Sections 3.2, 4.2, or 5.2;
"DRAWDOWN DATE" means the date (being a Banking Day) on which a Drawdown is
made;
"DRAWDOWN NOTICE" means a notice substantially in the form annexed hereto as
Schedule B given to the Lender by the Borrower pursuant to Sections 3.2, 4.2
or 5.2;
"EQUIVALENT AMOUNT" means, on any date, the amount of Canadian Dollars or
U.S. Dollars, as the case may be, required to convert an amount from Canadian
Dollars to U.S. Dollars or from U.S. Dollars to Canadian Dollars, as the case
may be, at the spot rate of exchange quoted as the offering rate by the main
branch of the Lender located in Toronto at approximately noon (Toronto time)
on that date in accordance with its normal practice;
"EURODOLLAR BANKING DAY" means a day on which banks are open for business in
Toronto, Ontario, New York, New York and London, England and on which
dealings in U.S. Dollar deposits are transacted in the London interbank
market, but does not include a Saturday or a Sunday;
"EVENT OF BANKRUPTCY" means, in respect of any Person, that such Person shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally as they become due, or shall
make a general assignment for the benefit of creditors; or any proceeding,
filing or action shall be instituted by or against any such Person seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding-up,
reorganization, arrangement, adjustment, protection, relief or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief of for the appointment of a receiver, trustee, liquidator, custodian
or other similar official for it or for any substantial part of its property,
including without limitation any such proceeding under the BANKRUPTCY AND
INSOLVENCY ACT (Canada) or the COMPANIES' CREDITORS ARRANGEMENTS ACT (Canada)
and, in the case of any such proceeding instituted against such Person (but
not instituted, authorized or consented to by such Person), either such
proceeding shall remain undismissed or unstayed for a period of 10 days or
any of the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against such Person or for the appointment
of a receiver, trustee, liquidator, custodian or other similar official for
such Person or for any substantial part of its property) shall occur;
"EVENT OF DEFAULT" means any of the following events:
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(a) an Obligor shall fail to pay any principal, interest, fees or
other amounts hereunder or under any of the other Credit
Facility Documents when the same become due and payable;
(b) any representation or warranty made by an Obligor herein or in
any other Credit Facility Document, or any representation,
warranty or certification made by an Obligor in any certificate
or other writing delivered in connection with any of the Credit
Facility Documents, or any representation or warranty deemed to
be made or repeated by an Obligor as provided herein or
therein, shall prove to have been incorrect in any material
respect when made or deemed to be made or repeated and, if
capable of being remedied, such Default shall not be remedied
within 10 days thereafter;
(c) any Obligor shall fail to perform the covenant in Section
11.1(l) and such Default shall continue for a period of 30 days;
(d) the Borrower shall fail to perform any of his obligations under
Section 10.3 within the time and in the manner provided therein;
(e) an Obligor shall fail to perform or observe any term, covenant
or agreement (other than as referred to in clauses (a), (b),
(c) or (d) above) contained in any of the Credit Facility
Documents, and such Default shall continue for a period of 10
days;
(f) an Obligor or the Corporation shall fail to pay the principal
of or premium or interest on any Debt which is outstanding in
an aggregate principal amount in excess of $5 million (or, in
the case of the Corporation, such other amount as shall be
provided in the equivalent provision of the Senior Credit
Facility), or the equivalent amount in any other currency, when
the same becomes due and payable or to perform any other
covenant in respect of such Debt and such failure shall
continue for the lesser of (i) 30 days and (ii) the expiry of
the grace period applicable to such Debt;
(g) if the Margin Ratio shall be less than the Acceptable Margin
Ratio at any time and, except as provided in clause (h) below,
such circumstance shall not be rectified within 3 Business Days
thereafter;
(h) if the Margin Ratio shall be less than 1.15:1 at any time;
(i) an Obligor or the Corporation shall commit or permit to exist
any Event of Bankruptcy in respect of the Obligor or the
Corporation;
(j) any judgment or order for the payment of money in respect of an
Obligor or the Corporation in excess of $5 million (or in the
case of the Corporation, such other
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amount as shall be provided in the equivalent provision of the
Senior Credit Facility), or the equivalent amount in any other
currency, shall be rendered against an Obligor or the
Corporation unless such judgment or order has been stayed on
appeal or otherwise is being contested in good faith and
against which appropriate reserves have been established in
accordance with generally accepted accounting principles;
(k) there occurs a material adverse affect in respect of the
business or financial conditions in respect of an Obligor, the
Security Documents or the ability of an Obligor to perform its
obligations under the Credit Facility Documents;
(l) there occurs a material change in the business or financial
condition of the Corporation and the occurrence of any event in
respect of the Corporation which could have or is a "Material
Adverse Effect" as defined in the Senior Credit Facility will
be deemed to constitute a material change in the business or
financial condition of the Corporation;
(m) any material change in the control of the Corporation shall
occur and such circumstance is not rectified within 60 days
thereafter;
(n) a cease trading order, stop trading order or similar order,
direction or ruling shall be issued by any Official Body in
respect of the Common Shares or the Pledged Securities or any
other event or circumstance shall occur which would materially
restrict the ability of the Lender to realize on the Collateral
and such event or circumstance shall not be rectified within a
period of 24 hours;
(o) either (i) the Obligors, together with all Associates of the
Obligors, shall become, in the aggregate, the owners, directly
or indirectly, legally or beneficially or shall control,
(either individually or jointly with each other or with any
other Person) more than 20% of all the issued Voting Securities
of the Corporation or (ii) an Official Body has determined that
an Obligor or any Associate of an Obligor is a Control Person
of the Corporation;
(p) the Common Shares shall cease to be listed on either the New
York Stock Exchange or The Toronto Stock Exchange;
(q) if the Corporation shall cease to be a reporting issuer in good
standing under the securities laws of Ontario or British
Columbia or shall be in default of any of its disclosure,
reporting or filing requirements under the Exchange Act and
such circumstance is not rectified within 10 days thereafter;
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(r) if the security interests in the Collateral created by the
Security Documents cease to constitute a first priority
security interest therein in favour of the Lender or any
Obligor shall dispute or contest the validity or priority of
any such security interest;
(s) if any of the Credit Facility Documents cease in any material
respect to be valid, binding or an enforceable obligation of
the Obligor which is a party thereto;
"EXCESS AMOUNT" shall have the meaning attributed thereto in Section 7.3(d);
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934;
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded upward,
if necessary, to the nearest 1/100th of 1%), calculated on the basis of a
year of 360 days, equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the U.S. Banking Day next succeeding such day,
provided that (i) if such day is not a U.S. Banking Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next
preceding U.S. Banking Day as so published on the next succeeding U.S.
Banking Day, the Federal Funds Rate for such day shall be the average rate
quoted to the Lender on such day on such transactions as determined by the
Lender;
"FIXED RATE" means 5% per annum;
"FIXED RATE LOAN" means a loan made by the Lender to the Borrower hereunder
on which interest in payable by reference to the Fixed Rate;
"GAAP" means the generally accepted accounting principles from time to time
approved by the Canadian Institute of Chartered Accountants or any successor
institute applicable as at the date on which such calculation is made or
required to be made;
"GUARANTOR" means any of LLP, LFLP and LFI and "GUARANTORS" means all of such
Guarantors, collectively;
"HURDLE RATE" shall have the meaning attributed thereto in Schedule A;
"INTEREST AMOUNT" shall have the meaning attributed thereto in Schedule A;
"INTEREST PAYMENT DATE" means:
(a) with respect to each Base Rate Loan or Prime Rate Loan, the
last Business Day of each succeeding calendar month after the
making of such Loan and the date of repayment of the principal
of such Loan under Sections 3.4 or 5.4, as applicable;
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(b) with respect to Base Rate Loans under the Refinancing Facility,
a date on which a Base Rate Loan Conversion shall occur;
(c) with respect to Prime Rate Loans under the Refinancing
Facility, a date on which a Prime Rate Loan Conversion shall
occur;
(d) with respect to each Fixed Rate Loan, each anniversary date of
the Closing Date and the date of repayment of the principal of
such Loan or the Basic Principal Amount, as the case may be,
under Section 4.4 or 5.4, as the case may be;
(e) with respect to the LIBOR Loan, each of the last day of each
LIBOR Interest Period, a date on which a LIBOR Loan Conversion
shall occur and the date of repayment of the principal of such
Loan under Section 3.4;
(f) with respect to the BA Rate Loan, each of the last day of each
BA Interest Period, a date on which a BA Rate Conversion shall
occur and the date of repayment of the principal of such Loan
under Section 3.4;
and in all cases shall mean the Loan Termination Date.
"INTEREST PAYMENT FACILITY" means the non-revolving credit facility in an
aggregate amount of up to $20 million (or the Equivalent Amount in Canadian
Dollars) to be made available to the Borrower hereunder as set forth in
Article V;
"INTEREST PERIOD" means a BA Interest Period or a LIBOR Interest Period;
"INITIALLY PLEDGED SHARES" means the 6,382,800 Common Shares owned by the
Obligors as at the Closing Date as referred to in Schedule C;
"JUDGMENT CONVERSION DATE" has the meaning set forth in Section 14.9(a);
"JUDGMENT CURRENCY" has the meaning set forth in Section 14.9(a);
"LFI" means ▇▇▇▇▇▇ Financial Inc., a corporation continued under the laws of
British Columbia;
"LFLP" means ▇▇▇▇▇▇ Financial Limited Partnership, a limited partnership
established under the laws of Alberta and extra-provincially registered under
the laws of British Columbia;
"LLP" means ▇▇▇▇▇▇ Limited Partnership, a limited partnership established
under the laws of British Columbia;
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"LENDERS' COUNSEL" means the firm of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇, Toronto, Ontario,
or such other firm of legal counsel as the Lender may from time to time
designate;
"LIBOR INTEREST PERIOD" means, with respect to the LIBOR Loan, the period of
approximately three months' duration, in each case commencing on the date a
Base Rate Loan Conversion shall occur or the last day of the preceding LIBOR
Interest Period with respect to such LIBOR Loan, as the case may be, provided
that in any case the last day of each LIBOR Interest Period shall also be the
first day of the next LIBOR Interest Period and provided that the last LIBOR
Interest Period hereunder shall expire on the Loan Termination Date;
"LIBOR LOAN" means a loan in the United States Dollars as a result of the
Conversion referred to in Section 3.2 made by the Lender to the Borrower
hereunder on which interest is payable by reference to the LIBOR Rate;
"LIBOR RATE" means, for each LIBOR Interest Period, the rate of interest per
annum, expressed on the basis of a 360-day year, which is the simple average
(rounded upwards, if necessary, to the nearest whole multiple of 1/16th of
1%) of the rates, expressed as a rate of interest per annum on the basis of a
year of 360 days, at which United States dollar deposits are offered to the
Lender by leading banks in the London interbank market at approximately 9:30
a.m. (Toronto time) on the second Eurodollar Banking Day prior to the first
day of such LIBOR Interest Period, in an amount similar to such LIBOR Loan
and for a period similar to such LIBOR Interest Period;
"LIEN" means any mortgage, pledge, lien, hypothecation, security interest,
adverse claim or other encumbrance, charge or interest (whether fixed,
floating or otherwise) or title retention, any right of set-off (arising
otherwise than by operation of law) and any deposit of monies under any
agreement or arrangement whereby such monies may be withdrawn only upon
fulfilment of any condition of any kind with any creditor to have its claims
satisfied prior to other creditors with or from the proceeds of any
properties, assets or revenues of any kind now owned or later acquired and,
in relation to the Pledged Shares, means any restriction or limitation under
contract (other than the Security Documents) or at law on the ability of the
Lender or the owner thereof to sell or otherwise dispose of the same;
"LOAN" means a Fixed Rate Loan, a Base Rate Loan, a Prime Rate Loan. a LIBOR
Loan or a BA Rate Loan;
"LOAN ACCELERATION DATE" shall have the meaning attributed thereto in Section
12.1;
"LOAN TERMINATION DATE" means the earlier of (i) the Maturity Date; (ii) the
Loan Acceleration Date and (iii) the date on which the Basic Principal Amount
of the Acquisition Facility shall be repaid in full;
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"MARGIN RATIO" means the ratio of the Market Value of the Pledged Shares to
the Outstanding Balance;
"MARKET VALUE" means, on any date, the closing price of the Common Shares on
the immediately preceding trading day on the New York Stock Exchange or if
not then listed or traded on the New York Stock Exchange then the Equivalent
Amount in U.S. Dollars of the closing price of the Common Shares on the
immediately preceding trading day on The Toronto Stock Exchange or if not
then listed or traded on The Toronto Stock Exchange then on the Montreal
Exchange;
"MARKET VALUE OF THE TOTAL ACQUIRED SHARES" has the meaning attributed
thereto in Schedule A;
"MATURITY DATE" has the meaning attributed thereto in Section 2.2;
"NET WORTH STATEMENT" means a statement certified by the Borrower reflecting
in reasonable detail (i) the assets and liabilities (actual and contingent)
of the Borrower, the Guarantors and Persons effectively controlled by the
Borrower as a date not more than 30 days prior to its delivery to the Lender
as herein provided; (ii) as a separate amount the aggregate amount of Debt of
the Obligors as at such date; and (iii) such other information as the Lender
may reasonably require;
"NORMAL COURSE DISTRIBUTION" means Distributions in the form of cash
dividends paid on the Pledged Shares not exceeding an amount of $0.20 per
Common Share (as currently constituted) during any fiscal year of the
Corporation; provided that if the Common Shares shall be consolidated, split
or otherwise amended or a stock dividend payable in Common Shares shall be
declared thereon, the above reference to $0.20 shall be adjusted accordingly;
"NOTICE OF AMOUNT" has the meaning set forth in Section 7.6;
"OBLIGATIONS" means all obligations, liabilities and indebtedness of the
Obligors under the Credit Facility Documents, including, without limitation,
indebtedness in respect of all fees, costs, expenses and indemnity
obligations hereunder or thereunder;
"OBLIGORS" means, collectively, the Borrower and the Guarantors;
"OFFICIAL BODY" means any governmental body or any agency, authority, bureau,
commission, department or instrumentality thereof, or any court, tribunal or
arbitrator, including, without limitation, any securities commission or stock
exchange in Canada or the United States having jurisdiction over the Obligors
or the Corporation;
"OUTSTANDING BALANCE" means the amount (or in the case of amounts in Canadian
Dollars, the Equivalent Amount in U.S. Dollars) owing from time to time by
the Borrower under the Credit Facility Documents on account of principal
(including the Basic Principal Amount but excluding the
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Additional Principal Amount), interest (including Deferred Interest and
accrued interest not yet due and payable) and fees;
"PERMITTED BID" has the meaning attributed thereto in Schedule A;
"PERMITTED ENCUMBRANCES" means, as of any particular time (i) Liens arising
under the Security Documents; and (ii) any other liens consented to in
writing by the Lender;
"PERSON" means an individual, partnership, corporation, limited liability
company, trust, unincorporated association, joint venture or other entity, or
a foreign state or political subdivision thereof or any agency or
instrumentality of such state or subdivision;
"PLEDGED SECURITIES" means, collectively, the Pledged Shares and the Specified
Options;
"PLEDGED SHARES" means the Initially Pledged Shares; the Acquired Shares and
any Common Shares made subject to the Security Documents pursuant to Sections
10.2, 10.3 and 11.2(c); provided that for the purpose of the definition of
"Margin Ratio", the term "Pledged Shares" shall not include any Common Shares
which at the time of calculation of Margin Ratio are not subject to a valid
first priority security interest in favour of the Lender or are subject to
any order, direction, ruling or certificate referred to in clause (n) of the
definition of "Event of Default";
"PRIME RATE" means, for any day, a rate per annum equal to the higher of:
(a) the variable rate of interest per annum established and
reported from time to time by the Lender as the reference rate
of interest then in effect for determining interest rates on
Canadian Dollar denominated commercial loans made by it in
Canada; and
(b) the sum of (x) the rate per annum equal to the discount rate
per annum expressed as an interest rate calculated on the basis
of a year of 365 days for Canadian dollar bankers' acceptances
having a term of 30 days which appears on the display page
designated as the CDOR Page (or any replacement page) by
Reuters Money Market Service (or any successor or similar
service as may be selected by the Lender) as of 10:00 a.m. on
the date of determination as reported by the Lender and (y) 1%.
"PRIME RATE LOAN" means a loan made by the Lender to the Borrower hereunder
on which interest is payable by reference to the Prime Rate;
"REFINANCING FACILITY" means a non-revolving credit facility in an aggregate
amount of up to $60 million (or the Equivalent Amount in Canadian Dollars) to
be made available to the Borrower in accordance with Article III;
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"REFINANCING PERIOD" means the period commencing on the Closing Date and
ending on the earlier of (i) 11:59 p.m. (Toronto time) on the 30th day after
the Closing Date and (ii) the date that the Borrower shall have drawndown the
full amount of the Refinancing Facility;
"SECURITY DOCUMENTS" has the meaning attributed thereto in Section 10.1;
"SENIOR CREDIT FACILITY" means the $1 billion revolving credit facility and
all agreements entered into in connection therewith among the Corporation,
▇▇▇▇▇▇ Group International Inc., and
certain others dated May 15, 1996 as amended, supplemented, modified or
replaced from time to time;
"SPECIFIED EVENT" has the meaning attributed thereto in Schedule A;
"SPECIFIED OPTIONS" means stock options issued to the Borrower under the
Stock Option Plan to acquire up to 1,550,747 Common Shares as currently
constituted;
"STOCK OPTION PLAN" means Employee Stock Option Plan (Canada) of the
Corporation, as amended and restated from time to time;
"TERM" means the period commencing on the Closing Date and ending on the Loan
Termination Date;
"TOTAL PRINCIPAL AMOUNT" means the aggregate of the Basic Principal Amount
and the Additional Principal Amount and constitutes the aggregate principal
amount of the Acquisition Facility outstanding as at the Loan Termination
Date;
"TOTAL PORTFOLIO VALUE OF TOTAL ACQUIRED SHARES" has the meaning attributed
thereto in Schedule A;
"U.S. DOLLARS" or "UNITED STATES DOLLARS" or "U.S.$" or "$" means the legal
currency of the United States;
"U.S. DOLLAR LOANS" means collectively, all Base Rate Loans and Fixed Rate
Loans and the LIBOR Loan;
"U.S. BANKING DAY" means a day on which banks are open for business in
Toronto, Ontario, Vancouver, British Columbia and New York, New York but
does not include a Saturday or a Sunday; and
"VOTING SECURITIES" shall have the meaning attributed thereto in the
SECURITIES ACT (Ontario);
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1.2 SECTIONS AND HEADINGS. The division of this Agreement into Articles
and Sections and the insertion of an index and headings are for convenience
of reference only and shall not affect the construction or interpretation of
this Agreement. The terms "this Agreement", "hereof", "hereunder" and
similar expression refer to this Agreement and not to any particular Article,
Section or other portion hereof and include any agreement or instrument
supplemental or ancillary hereto. Unless something in the subject matter or
context is inconsistent therewith, references herein to Articles and Sections
are to Articles and Sections of this Agreement.
1.3 NUMBER. Words importing the singular number only shall include the
plural and VICE VERSA, words importing the masculine gender shall include the
feminine and neuter genders and VICE VERSA and words importing persons shall
include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations and VICE VERSA.
1.4 BANKING DAYS. Whenever any payment to be made hereunder is stated
to be due or any action to be taken hereunder is stated to be required to be
taken on a day other than a Banking Day, such payment shall be made or such
action shall be taken on the next succeeding applicable Banking Day (except
in the case of the expiry of a LIBOR Interest Period or a BA Interest Period
where the next Banking Day would occur in the following calendar month in
which case the payment to be made on such day shall be made on the
immediately preceding Banking Day), and in the case of the payment of any
monetary amount, the extension of time shall be included for the purposes of
computation of interest, if any, thereon.
1.5 CURRENCY OF PAYMENTS. All payments made hereunder in respect of
U.S. Dollar Loans and other amounts denominated in U.S. Dollars shall be made
in U.S. Dollars. All payments made hereunder in respect of Canadian Dollar
Loans and other amounts denominated in Canadian Dollars shall be made in
Canadian Dollars.
1.6 CONFLICT WITH SECURITY DOCUMENTS. In the event that there is a
conflict or inconsistency between any provision of the Security Documents and
this Agreement, the provisions of this Agreement shall prevail.
1.7 SCHEDULES. The following are the Schedules annexed hereto and
incorporated by reference and deemed to be part hereof:
Schedule A: Calculation of Additional Principal Amount
Schedule B: Form of Drawdown Notice
Schedule C: Details and Ownership of Initially Pledged Shares and
Specified Options
Schedule D: Form of Borrower's Security Agreement
Schedule E: Form of Guarantor's Security Agreement
Schedule F: Form of Guarantee
Schedule G: Matters to be Included in Opinion of Borrowers' Counsel
Schedule H Details of Acquisitions and Holdings of Securities of the
Corporation
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ARTICLE II
THE CREDIT FACILITY
2.1 AGGREGATE AMOUNT. The Lender agrees to make available to the
Borrower in accordance with and subject to the terms and conditions of this
Agreement a committed non-revolving credit facility (the "Credit Facility")
in the principal amount of up to $190 million, consisting of the Refinancing
Facility, the Acquisition Facility and the Interest Payment Facility.
2.2 TERM. The term of the Credit Facility, unless earlier terminated as
herein provided, shall commence on the Closing Date and end at 11:59 p.m.
(Toronto time) on the day which is the third anniversary of the Closing Date
or such later date as may be mutually agreed to in writing by the Lender and
the Borrower (the date on which the Credit Facility shall so terminate being
herein called the "Maturity Date").
ARTICLE III
THE REFINANCING FACILITY
3.1 PURPOSE. The Refinancing Facility shall be used by the Borrower
solely for the purpose of repaying indebtedness secured by the Initially
Pledged Shares.
3.2 AVAILABILITY AND CONVERSION. The Refinancing Facility shall be
available for drawdowns by way of Base Rate Loans or Prime Rate Loans at any
time or from time to time during the Refinancing Period by way of irrevocable
Drawdown Notices given to the Lender not later than 11:00 a.m (Toronto time)
on the first Banking Day prior to each Drawdown Date; provided that no more
than four Drawdowns shall be permitted and the amount of any Drawdown shall
not be less than $10,000,000 or the Equivalent Amount in Canadian Dollars.
Any portion of the principal amount of the Refinancing Facility not drawndown
during the Refinancing Period shall be permanently cancelled. On the last
day of the Refinancing Period, the Borrower shall pay the Lender all accrued
and unpaid interest on the Base Rate Loans and the Prime Rate thereunder, the
Base Rate Loans shall be converted into a single LIBOR Loan and the Prime
Rate Loans shall be converted into a single BA Rate Loan.
3.3 INTEREST.
(a) Each Base Rate Loan under the Refinancing Facility shall bear
interest at a rate per annum equal to the Base Rate in effect from time to
time. Such interest shall be payable in arrears on each Interest Payment
Date for such Loan for the period from and including the Drawdown Date, the
date a LIBOR Loan Conversion shall occur or the preceding Interest Payment
Date for such Loan, as the case may be, to and including the day preceding
such Interest Payment Date and shall be calculated on the principal amount of
such Loan outstanding on the basis of the actual number of days elapsed in a
year of 365 days, or 366 days in the case of a leap year. Changes in the
Base
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Rate shall cause an immediate adjustment of the interest payable on such Loan
without the necessity of any notice to the Borrower.
(b) Each Prime Rate Loan under the Refinancing Facility shall bear
interest at a rate per annum equal to the Prime Rate in effect from time to
time. Such interest shall be payable in arrears on each Interest Payment
Date for such Loan for the period from and including the Drawdown Date for
such Loan, the date a BA Rate Conversion shall occur or the preceding
Interest Payment Date for such Loan, as the case may be, to and including the
date preceding such Interest Payment Date and shall be calculated on the
principal amount of such Loan outstanding on the basis of the actual number
of days elapsed in a year of 365 days, or 366 days in the case of a leap
year. Changes in the Prime Rate shall cause an immediate adjustment of the
interest payable on such Loan without the necessity of any notice to the
Borrower.
(c) The LIBOR Loan under the Refinancing Facility, and any Deferred
Interest thereon, shall bear interest during each LIBOR Interest Period
applicable thereto at a rate per annum equal to the LIBOR Rate with respect
to such LIBOR Interest Period plus 1%. The rate so quoted by the Lender as
the LIBOR Rate from time to time shall be conclusive and binding on the
Borrower. Subject to Section 7.1, such interest shall be payable in arrears
on each Interest Payment Date for the period from and including the date a
Base Rate Loan Conversion shall occur or preceding Interest Payment Date for
such Loan, as the case may be, to and including the date preceding such
Interest Payment Date on the basis of the actual number of days elapsed
divided by 360. The yearly rate of interest to which the rate determined in
accordance with the foregoing provisions of this Section 3.3(c) is equivalent
to the rate so determined multiplied by the actual number of the days in the
calendar year in which such an Interest Payment Date occurs and divided by
360.
(d) A BA Rate Loan under the Refinancing Facility, and any Deferred
Interest thereon, shall bear interest during each BA Interest Period
applicable thereto at a rate per annum equal to the BA Rate with respect to
such BA Interest Period plus 1%. The rate so quoted by the Lender as the BA
Rate from time to time shall be conclusive and binding on the Borrower.
Subject to Section 7.1, such interest shall be payable in arrears on each
Interest Payment Date for the period from and including the date a Prime Rate
Loan Conversion shall occur or the preceding Interest Payment Date for such
Loan, as the case may be, to and including the date preceding such Interest
Payment Date on the basis of the actual number of days elapsed in a year of
365 days, or 366 in the case of a leap year.
3.4 REPAYMENT AND PREPAYMENT. The Borrower shall have the option to
make prepayments on account of the principal of and interest on the
Refinancing Facility in accordance with the provisions of Section 7.3(a)
hereof. The Borrower shall be obligated to make prepayments on account of
the principal of and interest on the Refinancing Facility in accordance with
the provisions of Sections 7.3(b) and (d). The Borrower shall repay the
outstanding principal amount of the Refinancing Facility together with the
accrued and unpaid interest thereon (including Deferred Interest thereon) on
the Loan Termination Date. Except for a repayment on the Loan Termination
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Date, any repayment or prepayment on account of the LIBOR Loan or the BA Rate
Loan under the Refinancing Facility shall be made on the last of an Interest
Period applicable thereto.
3.5 EVENT OF DEFAULT. If an Event of Default shall occur and be
continuing, the LIBOR Loan shall, at the option of the Lender, be converted
into a Base Rate Loan and the BA Rate shall, at the option of the Lender, be
converted into a Prime Rate Loan.
3.6 SALE OF CERTAIN PLEDGED SHARES.
(a) NOTICE AND CONSENT. At any time or from time to time when a Default
shall not be continuing, the Borrower may request the Lender by notice in
writing to consent to the Borrower's selling Common Shares forming part of
the Pledged Shares, such notice to contain at least the following information:
(i) the number of the Pledged Shares intended to be sold and
the certificate numbers for such shares;
(ii) the price or range of prices at which the Borrower intends
to sell such shares;
(iii) the stock exchange(s) through which the Borrower intends to
sell such shares; and
(iv) the period of time during which the Borrower intends to
attempt to obtain offers to purchase such shares.
The Lender agrees that it will not unreasonably withhold its consent to any
such requested sale.
(b) CONDITIONS OF SALE. Each sale requested by the Borrower and
consented to by the Lender in accordance with Section 3.6(a) shall be subject
to such conditions as the Lender may reasonably require including the
following:
(i) each sale shall be effected using the services of
(as such term is defined in Section 11.1(h)) and
shall be subject to brokerage commissions at the normal
published rate of (or such other rate as may be
mutually agreed upon by the Borrower and );
(ii) the sale shall be effected through the stock exchange(s)
specified in the applicable notice from the Borrower and at
prevailing market prices for Common Shares on such exchange;
(iii) the net proceeds (after brokerage commissions) from such
sale shall be applied to make a prepayment on account of
the Refinancing Facility (any
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excess net proceeds after repayment in full of the
Refinancing Facility to be applied in accordance with
Section 7.3(c));
(iv) the Borrower shall have delivered to the Lender an opinion
from counsel acceptable to the Lender and in form and terms
satisfactory to the Lender to the effect that such proposed
sale is being made in compliance with applicable securities
laws and stock exchange requirements;
(v) the Lender shall be reasonably satisfied that the sale of
such shares at prevailing market prices and the application
of the net proceeds therefrom as aforesaid will not result
in a reduction of the Margin Ratio;
(vi) the aggregate number of Pledged Shares which may be sold
pursuant to this Section 3.6 shall not exceed 2,000,000
Common Shares (as presently constituted); and
(vii) no request for sale may be made after the Refinancing
Facility shall have been repaid in full.
The Borrower shall forthwith notify the Lender of any sale of Pledged Shares
effected pursuant to this Section 3.6 and, contemporaneously with delivery to
the Lender of the net proceeds therefrom to be applied as aforesaid, the
Lender shall deliver to the Borrower (or as it may in writing direct)
certificates representing the shares so sold accompanied by the stock powers
of attorney relating thereto and, at the request and expense of the Borrower,
written confirmation that any security interest under the Security Documents
in any Pledged Shares so sold is released and discharged, and thereupon the
security interest is such shares created by the applicable Security Document
shall be deemed to be released and discharged.
ARTICLE IV
THE ACQUISITION FACILITY
4.1 PURPOSE. The Acquisition Facility shall be used by the Borrower
solely for the purpose of acquiring Common Shares through secondary market
purchases during the Acquisition Period.
4.2 AVAILABILITY. The Acquisition Facility shall be available for
drawdowns by way of Fixed Rate Loans at any time or from time to time during
the Acquisition Period by way of irrevocable Drawdown Notices in each case
given to the Lender not later than 11:00 a.m (Toronto time) on the first U.S.
Banking Day prior to each Drawdown Date. Any portion of the principal amount
of the Acquisition Facility not drawdown during the Acquisition Period shall
be permanently cancelled.
4.3 INTEREST. The Basic Principal Amount of the Acquisition Facility
outstanding from time to time, and any Deferred Interest thereon, shall bear
interest at a rate per annum equal to the Fixed
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Rate. Subject to Section 7.1, such interest shall be payable in arrears on
each Interest Payment Date for the period from and including the Drawdown
Date for such Loan or the preceding Interest Payment Date, as the case may
be, to and including the date preceding such Interest Payment Date on the
basis of the actual number of days elapsed in a year of 365 days, or 366 days
in the case of an Interest Payment Date occurring in a leap year.
4.4 REPAYMENT AND PREPAYMENT. The Borrower shall have the option to
make prepayments on account of the Basic Principal Amount of and interest on
the Acquisition Facility in accordance with the provisions of Section 7.3(a)
hereof. The Borrower shall be obligated to make prepayments on account of the
Basic Principal Amount of, and interest on, the Acquisition Facility in
accordance with the provisions of Sections 7.3(b) and (d). No prepayments on
account of the Initial Principal Amount shall be made during the Acquisition
Period. The Borrower shall repay the Total Principal Amount together with
the accrued and unpaid interest (including Deferred Interest thereon) on the
Loan Termination Date.
ARTICLE V
THE INTEREST PAYMENT FACILITY
5.1 PURPOSE. The Interest Payment Facility shall be used by the
Borrower solely for the purpose of paying interest on the Credit Facility.
5.2 AVAILABILITY. The Interest Payment Facility shall be available from
time to time during the Term (or until the earlier drawdown of all of the
Interest Payment Facility) by irrevocable Drawdown Notices in each case given
to the Lender not later than 11:00 a.m (Toronto time) on the first U.S.
Banking Day prior to each Drawdown Date. Each Drawdown Date for Drawdowns
under the Interest Payment Facility shall be on an Interest Payment Date and
the amount of any Drawdown shall not exceed the amount of interest payable
(and not otherwise paid) on such Interest Payment Date. Drawdowns to make
payments of interest on the Acquisition Facility shall be by way of Fixed
Rate Loans, Drawdowns to make payments of interest on the LIBOR Loan under
the Refinancing Facility or Base Rate Loans under the Interest Payment
Facility shall be by way of Base Rate Loans and Drawdowns to make payments of
interest on the BA Rate Loan under the Refinancing Facility or the Prime Rate
Loans under Interest Payment Facility shall be by way of Prime Rate Loans.
If the Borrower shall not have paid the full amount of the interest payable
on such Interest Payment Date either out of his own funds or by making a
Drawdown under the Interest Payment Facility as hereinbefore provided, so
long as any amount is available to be drawn down under the Interest Payment
Facility, the Borrower shall be deemed, at 12:01 p.m. on the Interest Payment
Date, to have made a Drawdown or Drawdowns under the Interest Payment
Facility by way of a Fixed Rate Loan, Base Rate Loan and/or Prime Rate Loan,
as applicable, in the amount of the unpaid interest (or such lesser amount as
is then available under the Interest Payment Facility) and to have paid the
amount so drawn down to the Lender on account of interest payable on such
Interest Payment Date.
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5.3 INTEREST.
(a) A Fixed Rate Loan under the Interest Payment Facility (and any
Deferred Interest thereon) shall bear interest at a rate per annum equal to
the Fixed Rate. Subject to Section 7.1, such interest shall be payable in
arrears on each Interest Payment Date for the period from and including the
Drawdown Date for such Loan or the preceding Interest Payment Date for such
Loan, as the case may be, to and including the date preceding such Interest
Payment Date on the basis of the actual number of days elapsed in a year of
365 days, or 366 days in the case of an Interest Payment date occurring in a
leap year.
(b) Each Base Rate Loan under the Interest Payment Facility (and any
Deferred Interest thereon) shall bear interest at a rate per annum equal to
the Base Rate in effect from time to time. Subject to Section 7.1, such
interest shall be payable in arrears on each Interest Payment Date for such
Loan for the period from and including the Drawdown Date for such Loan or the
preceding Interest Payment Date for such Loan, as the case may be, to and
including the day preceding such Interest Payment Date and shall be
calculated on the basis of the actual number of days elapsed in a year of 365
days, or 366 days in the case of an Interest Payment Date occurring in a leap
year. Changes in the Base Rate shall cause an immediate adjustment of the
interest payable on such Loan without the necessity of any notice to the
Borrower.
(c) Each Prime Rate Loan under Interest Payment Facility (and any
Deferred Interest thereon) shall bear interest at a rate per annum equal to
the Prime Rate in effect from time to time. Subject to Section 7.1, such
interest shall be payable in arrears on each Interest Payment Date for such
Loan for the period from and including the Drawdown Date for such Loan or the
preceding Interest Payment Date for such Loan, as the case may be, to and
including the date preceding such Interest Payment Date and shall be
calculated on the basis of the actual number of days elapsed in the year of
365 days, or 366 days in case of Interest Payment Date occurring in a leap
year. Changes in the Prime Rate shall cause an immediate adjustment of the
interest payable on such Loan without the necessity of any notice to the
Borrower.
5.4 REPAYMENT AND PREPAYMENT. The Borrower shall have the option to
make prepayments on account of the principal of and interest on the Interest
Payment Facility in accordance with the provisions of Section 7.3(a) hereof.
The Borrower shall be obligated to make prepayments on account of the
principal of and interest on the Interest Payment Facility in accordance with
the provisions of Sections 7.3(b) and (d). The Borrower shall repay the
outstanding principal amount of the Interest Payment Facility together with
the accrued and unpaid interest thereon (including Deferred Interest thereon)
on the Loan Termination Date.
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ARTICLE VI
EVIDENCE OF LOANS
6.1 EVIDENCE OF INDEBTEDNESS. The Lender shall open and maintain, in
accordance with its usual practice, books of account evidencing all Loans
under the Credit Facility and the Lender shall enter in the foregoing
accounts details of every Drawdown, Drawdown Date and Conversion Date in
respect of the Credit Facility and of all amounts from time to time owing or
paid by the Borrower to the Lender with respect to the Credit Facility and
the amounts of principal, interest and fees payable from time to time in
connection with the Credit Facility. The information entered in the
foregoing accounts shall constitute, in the absence of manifest error,
conclusive evidence of the obligations of the Borrower to the Lender
hereunder with respect to the Credit Facility, the date and amount of
Drawdowns and Conversions under the Credit Facility and the amounts the
Borrower has paid from time to time on account of the principal of and
interest on the Loans made pursuant to the Credit Facility.
6.2 IRREVOCABILITY. The giving by the Borrower of a Drawdown Notice
hereunder shall be irrevocable and shall oblige such Borrower to take the
action contemplated on the date specified therein.
ARTICLE VII
PAYMENTS, INTEREST, PRINCIPAL, FEES, ETC.
7.1 DEFERRED INTEREST. In the event that the Borrower shall not make
payment on account of interest accrued on any Loan (other than Base Rate
Loans and Prime Rate Loans under the Refinancing Facility) on the applicable
Interest Payment Date and the Drawdowns under the Interest Payment Facility
shall not then be available, then interest otherwise payable on such
non-excluded Loan shall thereafter accrue and be compounded on each
successive Interest Payment Date at the rate applicable to the Loan and the
obligation to pay such interest shall be deferred until the Loan Termination
Date or such earlier date as provided herein.
7.2 DEFAULT INTEREST. Any amounts under any of the Credit Facility
Documents which are not paid when due and payable in accordance with the
provisions thereof (other than for greater certainty Deferred Interest prior
to the Loan Termination Date) shall bear interest from time to time at a rate
per annum equal to, in the case of U.S. Dollar Loans and other amounts
denominated in U.S. Dollars, the Base Rate plus 2%, and in the case of
Canadian Dollar Loans and other amounts denominated in Canadian Dollars, the
Prime Rate plus 2%, which interest, in each case, shall be compounded monthly
on the last Business Day of each month and shall be payable on demand.
7.3 PREPAYMENTS.
(a) The Borrower may, at any time or from time to time make prepayments
on account of the Credit Facility provided that the Borrower shall have
provided the Lender with written notice
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of such prepayment at least two Banking Days prior to the prepayment date
specifying the amount of the Prepayment and the Loan or Loans in respect of
which such prepayment is being made.
(b) The Borrower shall make prepayments on account of the Credit
Facility out of the proceeds of, or as a result of Distributions, on the
Pledged Shares as provided in Section 10.2, and in the circumstances set
forth in Section 10.3.
(c) Any prepayment made pursuant to subsection (a) or (b) shall be
applied firstly on account of Deferred Interest, secondly on account of the
outstanding principal amount of the Refinancing Facility, thirdly on account
of the outstanding principal amount of the Interest Payment Facility and
thereafter on account of the Basic Principal Amount outstanding.
(d) In the event that at any time the sum of (i) the aggregate principal
amount of all U.S. Dollar Loans then outstanding and (ii) the Equivalent
Amount in U.S. Dollars of the aggregate principal amount of all Canadian
Dollar Loans then outstanding exceeds $190,000,000 (the amount of such excess
being herein called the "Excess Amount"), the Borrower shall, within one
Business Day thereafter, make a prepayment equal to the Excess Amount on
account of the Credit Facility. Any such prepayment shall be applied
firstly, on account of the outstanding principal amount of the Refinancing
Facility, secondly on account of the outstanding principal amount of the
Interest Payment Facility and thereafter on the account of the Basic
Principal Amount then outstanding.
(e) In the event that any payment or prepayment under any of the Credit
Facility is made in one currency and is required therein to be applied on
account of amounts payable in the other currency, the amount actually paid in
the first mentioned currency shall be deemed to constitute payment of the
Equivalent Amount in the other currency.
7.4 METHOD AND PLACE OF PAYMENT.
(a) PAYMENTS. All payments to be made by the Borrower under this
Agreement shall be made in funds having same day value to the Lender at the
principal offices of the Lender in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇. Any such payment shall
be made on the date upon which such payment is due, in accordance with the
terms hereof, no later than 12:00 p.m. (Toronto time).
(b) NO SET-OFF OR COUNTERCLAIM. All payments to be made by the Borrower
or a Guarantor shall be made free and clear of and without any deduction or
on account of any set-off or counterclaim.
7.5 CHANGE OF CIRCUMSTANCES.
(a) In the event and on each occasion that, before the first day of any
Interest Payment Date of a LIBOR Loan, the Lender shall determine that
sufficient U.S. Dollar deposits are not reasonably available to the Lender in
order to fund or to continue to fund the LIBOR Loan, the
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Lender shall give written notice of such determination to the Borrower, and
the LIBOR Loan, on the Interest Payment Date, shall be automatically
converted into a Base Rate Loan. The Borrower may convert the Base Rate Loan
into a LIBOR Loan at any time thereafter by not less than 2 Eurodollar
Banking Days notice to the Lender and subject to the provisions of this
Section 7.5.
(b) In the event that at any time the Lender makes a determination,
which shall be binding upon the Borrower, that:
(i) by reason of circumstances affecting the London interbank
market, adequate and fair means do not exist for
ascertaining the rate of interest with respect to the LIBOR
Loan during the ensuing LIBOR Interest Period;
(ii) the making or continuing of the LIBOR Loan by the Lender
has been made impracticable by the occurrence of an event
which materially and adversely affects the London interbank
market; or
(iii) the cost to the Lender of funding the LIBOR Loan for the
immediately following LIBOR Interest Period does not
accurately reflect the effective cost of the Lender's
funding for that LIBOR Interest Period,
then the Lender may give notice thereof to the Borrower and the LIBOR Loan
shall be converted on the second Eurodollar Banking Day following the date of
such notice into a Base Rate Loan.
7.6 INCREASED COSTS. In the event that (i) the coming into force of any
applicable law, regulation, treaty or official directive (whether or not
having the force of law) after the date hereof or (ii) any change in any
existing applicable law, regulation, treaty or official directive (whether or
not having the force of law), or in the interpretation or application thereof
by any court or by any governmental authority, central bank or other
authority or entity charged with the administration, interpretation or
application thereof which now or hereafter (each such event being hereinafter
referred to as a "Change in Law"):
(a) subjects the Lender to any tax or changes the basis of
taxation, or increases any existing tax, on payments of
principal, interest or other amounts payable by the Borrower to
the Lender under this Agreement (except for taxes on the
overall net income or capital of a Lender), or
(b) imposes, modifies or deems applicable any reserve, special
deposit, insurer's assessment or similar requirements against
assets held by, or deposits in or for the account of or loans
by or any other acquisition of funds by an office of the
Lender, or
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(c) either (i) requires the Lender to take into account a greater
percentage of the Credit Facility outstanding than was the case
immediately prior to such Change in Law in the determination by
the Lender of the amount of capital required or expected to be
maintained by it and, as a result, the amount of such capital
is increased, or (ii) will have the effect of increasing the
amount of capital required or expected to be maintained by the
Lender based on its obligations hereunder, or
(d) changes the basis of taxation (other than as aforesaid) of the
Lender in respect of payments of principal or interest payable
by such Lender in respect of deposits from third parties
acquired to effect or maintain the Credit Facility or any part
thereof,
and the result of any of the foregoing is to increase the cost to the Lender
or reduce the income receivable by it, reduce the effective return realizable
by the Lender in respect of the Credit Facility to an extent which the Lender
deems to be material, the Lender shall give notice thereof to the Borrower
(herein called a "Notice of Amount") stating the amount of Additional
Interest (as hereinafter defined) incurred by the Lender. The Borrower shall
pay to the Lender, within 10 days of the date of receipt of any Notice of
Amount, that amount (in this Article VII referred to as "Additional
Interest") which shall compensate the Lender for such additional cost or
reduction in income or effective return and certificate of a duly authorized
officer of the Lender setting forth the Additional Interest shall be PRIMA
FACIE evidence of the Additional Interest absent manifest error. In
determining such Additional Interest, the Lender may use any reasonable
averaging and attribution methods.
7.7 ILLEGALITY. If any applicable law coming into force after the date
hereof, or if any change in any existing applicable law or regulation or in
the interpretation or application thereof by any court or any statutory board
or commission, now or hereafter makes it unlawful for the Lender to make or
maintain the Loans or to give effect to its obligations in respect thereof,
the Lender may, by written notice thereof to the Borrower, declare its
obligations under this Agreement to be terminated, and the Borrower shall
prepay, within the time required by such law, all Loans outstanding hereunder
together with accrued interest thereon and such Additional Interest as may be
applicable to the date of such payment. If any such event shall, in the
opinion of the Lender, only affect part of the Loans outstanding, the
remainder of the Loans may be continued and the obligations of the Obligors
under the Credit Facility Documents shall continue.
7.8 MAXIMUM RATE OF INTEREST. Notwithstanding anything herein or in any
Credit Facility Document to the contrary:
(a) In the event that any provision of this Agreement or any other
Credit Facility Documents would oblige any Obligor to make any
payment of interest or other amount payable to the Lender
thereunder in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt by the Lender of
interest at a criminal or prohibited rate (as such terms are
construed under the CRIMINAL CODE
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(Canada) or any other applicable law), then notwithstanding such
provision, such amount or rate shall be deemed to have been
adjusted NUNC PRO TUNC to the maximum amount or rate of
interest, as the case may be, as would not be so prohibited by
law or so result in a receipt by the Lender of interest at a
criminal or prohibited rate, such adjustment to be effected to
the extent necessary, as follows:
(i) firstly, by reducing the amount or rate of interest
exigible under Article III, IV and V of this Agreement; and
(ii) thereafter, by reducing any fees, commissions, premiums and
other amounts which would constitute interest for the
purposes of Section 347 of the CRIMINAL CODE (Canada) or any
other applicable law.
(b) If, notwithstanding the provisions of subsection 7.8(a) and
after giving effect to all adjustments contemplated thereby,
the Lender shall receive an amount in excess of the maximum
permitted by such subsection, then the amount which would be
excessive shall be deemed to be a partial prepayment of
principal pursuant to subsection 7.3(a) made on the last day
that any such interest was paid to the Lender. If, after
application of any such excess payment to repayment of
principal as hereinbefore provided, the Lender continues to
hold an amount in excess of the maximum permitted by subsection
7.8(a), the Borrower shall be entitled, by notice in writing to
the Lender, to obtain reimbursement from the Lender of an
amount equal to such excess, and pending such reimbursement
such amount shall be deemed to be an amount payable by the
Lender to the Borrower.
(c) Any amount or rate of interest referred to in this Section 7.8
shall be determined in accordance with generally accepted
actuarial practices and principles over the Term and, in the
event of a dispute, a certificate of a Fellow of the Canadian
Institute of Actuaries appointed by the Agent shall be
conclusive for the purposes of such determination.
In determining whether or not the interest paid or payable under the Credit
Facility Documents exceeds the maximum amount permitted by subsection 7.8(a),
the Borrower and Lender shall, to the maximum extent permitted under the
CRIMINAL CODE (Canada) or any other applicable law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as interest,
(ii) exclude voluntary prepayments and the effects thereof and (iii)
amortize, prorate, allocate and spread the total amount of interest rateably
over the entire Term.
7.9 COMMITMENT FEE. The Borrower shall pay to the Lender on the
execution and delivery of this Agreement a commitment fee in respect of the
Credit Facility in the amount of $100,000 (the "Commitment Fee").
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ARTICLE VIII
REPRESENTATIONS AND WARRANTIES.
8.1 REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants as follows to the Lender and acknowledges and confirms that the
Lender is relying upon such representations and warranties:
(a) AUTHORIZATION. Each of the Credit Facility Documents,
including the granting of the security provided for thereunder,
has been duly authorized (in the case of the Guarantors),
executed and delivered by the applicable Obligor and will
constitute the legal, valid and binding obligation of the
applicable Obligor enforceable against such Obligor in
accordance with its terms.
(b) CONFLICT WITH CONSTATING DOCUMENTS AND AGREEMENTS. Neither the
execution and delivery by an Obligor of the Credit Facility
Documents to which it is a party nor the consummation by any
such Obligor of any of the transactions therein contemplated
(including the pledge of the Pledged Securities or the
acquisition of the Acquired Shares) nor compliance by any such
Obligor with the terms, conditions and provisions thereof, will
conflict with or result in a breach of any of the terms,
conditions or provisions of:
(i) in the case of a Guarantor, the partnership agreement or
constating documents or by-laws of any such Guarantor;
(ii) any agreement, instrument or arrangement to which any such
Obligor is now a party or by which it, or its properties
are, or may be, bound, or constitutes a default thereunder;
(iii) any judgment or order, writ, injunction, decree or ruling
of any Official Body; or
(iv) any applicable law.
(c) NO OTHER AUTHORIZATION NECESSARY. No action of, or filing
with, any Official Body is required to authorize, or is
otherwise required in connection with, the execution, delivery
and performance by any Obligor of the Credit Facility Documents
to which it is a party or the completion of any transaction
contemplated thereby.
(d) CORPORATE STATUS AND POWER. LFI is a corporation duly
incorporated and organized and validly subsisting under the
BRITISH COLUMBIA COMPANY ACT; LLP is a limited partnership duly
constituted and organized and validly subsisting under the laws
of
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the Province of British Columbia; LFLP is a limited partnership
duly constituted, organized and validly subsisting under the
laws of the Province of Alberta; each Guarantor has adequate
and sufficient power and authority to execute, deliver and
perform its obligations under the Credit Facility Documents to
which it is a party and to undertake any transaction
contemplated thereby.
(e) LITIGATION. There are no actions, suits or proceedings pending
against the Obligors or the Corporation or, to the best of his
knowledge, threatened (nor to the best of the Borrower's
knowledge is there any pending investigation) against or
involving any Obligor or the Corporation, at law or in equity
or before or by an federal, provincial, state, municipal or
other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind, (including, without limitation, any
cease trading or similar orders issued by, or any
investigations or proceedings conducted by any Canada or United
States securities commissions or stock exchanges) which involve
a reasonable possibility (so far as he can foresee) of any
material adverse change in the business, properties or
financial condition of any Obligor or the Corporation, or of
any materially adverse impairment of the value of the security
constituted by the Security Documents or any limitation or
restrictions or the ability of the Lender to dispose of the
Pledged Shares, and none of the Obligors or the Corporation is
in default with respect to any judgement, order, writ,
injunction, decree, rule or regulation of any court, arbitrator
or federal, provincial, state, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which involves a
reasonable possibility (so far as he can foresee) of either any
such material adverse change, materially adverse impairment or
limitation or restriction.
(f) INITIALLY PLEDGED SHARES. The Initially Pledged Shares are
beneficially owned by the respective Obligors in the respective
numbers set forth in Schedule C hereto and, upon their delivery
to the Lender in accordance with the provisions of Section 9.2,
shall be free and clear of all Liens other than Permitted
Encumbrances. Details of the share certificates representing
the Initially Pledged Shares are also set forth in Schedule C.
(g) OWNERSHIP OF ACQUIRED SHARES. Each of the Acquired Shares,
when acquired by the Borrower will be beneficially owned by the
Borrower free and clear of all Liens and contemporaneously with
such acquisition, certificates representing such Acquired
Shares shall be delivered to the Lender accompanied by stock
powers of attorney with signatures guaranteed in a manner
satisfactory to the Lender to be held as part of the Collateral
under the Borrower's Security Agreement.
(h) SPECIFIED OPTIONS. The Specified Options are beneficially
owned by the Borrower free and clear of all Liens. Schedule C
hereto sets forth details relating to each of the
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Specified Options including the date of issue, number of Common
Shares subject thereto, the relevant vesting periods, the
exercise price(s) thereof and the expiry date thereof and any
terms and conditions affecting the right to exercise any
Specified Options.
(i) NAME AND LOCATION. The true the and correct name of each of
the Obligors is as set forth on the execution pages of the
relevant Credit Facility Documents. The address of the chief
executive officer and sole place of business of each of the
Guarantors is as follows:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
(j) OWNERSHIP OF GUARANTORS. All the issued shares or other
ownership interests of each of the Guarantors are beneficially
owned by the Borrower free and clear of all Liens other than
(i) a 0.21% limited partnership interest in LFLP owned by the
▇▇▇▇▇▇ Family Trust, (ii) a 0.01% limited partnership interest
in LFLP owned by ▇▇▇▇▇▇ Development Corporation, all of the
issued shares of which are owned by ▇▇▇▇▇▇ Capital Corporation,
50% of the issued shares of which are beneficially owned by
each of the Borrower and his wife and (iii) a 0.01% limited
partnership interest in LLP owned by Canadian Memorial Services
Ltd. all of the issued shares of which are beneficially owned
by the Borrower.
(k) INTEREST IN THE CORPORATION. Set forth in Schedule H hereto
are details of all of the securities of the Corporation (or
securities exchangeable for or convertible into or exercisable
for securities of the Corporation) beneficially owned or
controlled by the Obligors and any Associate of the Obligors
and not disclosed in Schedule C and, except as disclosed
therein, no such Person has any right to acquire any additional
securities of such type. Also set forth in such Schedule H are
details of all of such securities acquired by any such Person
during the 12 months preceding the Closing Date; the nature of
the transaction in which such securities were acquired and, if
acquired under any exemption from the prospectus or
registration requirements of applicable securities laws,
details of the applicable securities laws exemptions.
(l) CONTROL. The Obligors, together with the Associates of the
Obligor and any other Person with whom any of the Obligors or
their Associates are acting jointly or in concert or who is
part of a group established for the purpose of holding,
disposing, acquiring or voting of any securities of the
Corporation (or securities convertible into or exchangeable or
exercisable for securities of the Corporation) do not own, and
after the acquisition by the Borrower of up to a further
3,669,004 Common Shares
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as Acquired Shares, would not own, more than 20% of the issued
and outstanding Voting Securities of the Corporation.
(m) LISTING OF COMMON SHARES. The Common Shares are listed and
posted for trading on The Toronto Stock Exchange, the Montreal
Exchange and the New York Stock Exchange and the Borrower has
no knowledge of any fact or matter which would adversely affect
any such listing.
(n) SHAREHOLDER AND SIMILAR AGREEMENTS. None of the Borrower, any
Guarantor or any Associate of an Obligor, is subject to any
shareholders agreement, voting trust agreement, option
agreement (except as described in Schedule H), purchase
agreement, sale agreement or similar agreement or arrangement,
written or oral, with any other Person which governs or relates
to the voting, acquisition, disposition or other dealing or
holding of or in any securities of the Corporation (or
securities convertible into or exchangeable or exercisable for
any securities of the Corporation) and none of them is acting
or has acted jointly or in concert (for the purposes of any
Canadian securities laws) with any other Person in connection
with the acquisition, voting or disposition or other dealing or
holding of or in any such securities or is part of a group
formed for any such purpose.
(o) PROSPECTUS EXEMPTIONS. None of the Initially Pledged Shares
have been acquired within the last 12 months pursuant to a
prospectus exemption set forth in subsection 25(2) to the
Regulation to the SECURITIES ACT (Ontario) or the equivalent
provision of any other applicable securities laws.
(p) THE CORPORATION. The Corporation is a corporation duly
incorporated and validly existing under the laws of the
Province of British Columbia and, is a reporting issuer in good
standing under the securities laws of each of the Provinces of
Canada (and has satisfied all of its disclosure, reporting and
filing obligations under the Exchange Act). The authorized
capital of the Corporation consists of 990,000,000 shares
divided into 750,000,000 Common Shares, 40,000,000 Class A
shares without par value and 200,000,000 First Preferred Shares
without par value (1,000,000 First Preferred Shares being
designated as 7.75% Cumulative Redeemable Convertible First
Preferred Shares, Series A, 425,000 First Preferred Shares
being designated as Convertible First Preferred Shares, Series
B and 8,800,000 First Preferred Shares being designated as 6%
Cumulative Redeemable Convertible First Preferred Shares,
Series C), of which 73,391,194 Common Shares and 8,800,000 6%
Cumulative Redeemable Convertible First Preferred Shares,
Series C are issued and outstanding as fully paid and
non-assessable. To the best of the Borrower's knowledge, after
due inquiry, as of September 30, 1997 there were outstanding
(i) under the Stock Option Plan options to acquire 2,287,600
Common Shares, (ii) under the 1994 Management Equity Investment
Plan, options and purchase rights to acquire up to 3,700,200
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Common Shares and (iii) under the Employee Stock Option Plan
(United States) and the 1994 Outside Director Compensation Plan
options to acquire an aggregate of approximately 3,464,515
Common Shares, and except as noted above, the Corporation does
not have outstanding any securities convertible into or
exchangeable or exercisable for Common Shares.
8.2 NATURE OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties set out in Section 8.1 shall survive the execution and delivery of
the Credit Facility Documents and the making of each Drawdown and the Lender
shall be deemed to have relied on the making of such representations and
warranties when made or deemed to be made.
ARTICLE IX
CONDITIONS PRECEDENT
9.1 CONDITIONS FOR CLOSING. The following conditions shall be satisfied
on or prior to the Closing Date:
(a) the Borrower will have delivered to the Lender a Net Worth
Statement in form and substance reasonably satisfactory to the
Lender;
(b) the Lender shall have made such investigation of the business
and affairs of the Borrower and of the Corporation and the
security to be provided to under the Credit Facility as it
deems appropriate (and the Borrower shall have cooperated with
the Lender in such investigation) and, the Lender in its sole
discretion, shall be satisfied therewith;
(c) this Credit Facility Documents shall have been duly authorized
(in the case of the Guarantors), executed and delivered to the
Lender by the applicable Obligor and shall constitute legal,
valid, binding and enforceable obligations of the Obligors.
(d) each Guarantor shall have delivered to the Lender certified
copies of its partnership agreement, constating documents and
borrowing by-laws, the resolutions authorizing the Credit
Facility Document to which it is a party, the incumbency of its
signing officers signing the Credit Facility Documents to which
it is a party and any documents to be provided by its pursuant
to the provisions hereof;
(e) the representations and warranties set forth in Section 8.1
shall be true and accurate in all material respects on and as
of the Closing Date by reference to the facts and circumstances
then existing;
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(f) no Default or Event of Default shall have occurred and be
continuing nor shall any such event occur as a result of
entering into of the Credit Facility Documents or the Drawdowns
to be made on the Closing Date;
(g) there shall have been delivered to the Lender an opinion or
opinions of Borrowers' counsel dated the Closing Date as to the
matters set forth in Schedule G, in form and terms satisfactory
to the Lender and Lender's Counsel;
(h) the Borrower shall have delivered to the Lender a duly executed
power of attorney in respect of the Specified Options in the
form of Schedule C to the Borrower's Security Agreement
together with undated irrevocable elections in respect of the
Specified Options duly executed by the Borrower, in each case,
with signatures guaranteed in a manner satisfactory to the
Lender;
(i) all registrations and filings shall have been made which the
Lender determines to be necessary or advisable to preserve and
protect the security under the Security Documents;
(j) the Borrower shall have paid the Commitment Fee to the Lender;
(k) all proceedings to be taken in connection with the transactions
contemplated by the Credit Facility Document shall be
reasonably satisfactory in form and substance to the Lender,
and the Lender shall have received copies of all documents
which the Lender may reasonably request in connection with said
transactions and copies of the records of all corporate
proceedings in connection therewith in form and substance
reasonably satisfactory to the Lender;
(l) the Borrower shall have delivered to the Lender a copy of his
birth certificate;
(m) the Borrower shall have delivered a currently dated certificate
issued by the Ontario and British Columbia Securities
Commissions certifying that the Corporation is a reporting
issuer under the Ontario and British Columbia Securities Acts
and is not in default by any requirements of such acts or the
regulations thereunder; and
(n) the Borrower shall have delivered a certificate of the
registrar and transfer agent of the Corporation dated the
Closing Date certifying the number and class of all then
outstanding shares of the Corporation and securities
convertible into or exchangeable or exercisable for shares of
the Corporation.
9.2 CONDITIONS FOR DRAWDOWNS. The following conditions shall be satisfied by
the Borrower at or prior to the time of each Drawdown of a Loan under the
Credit Facility (other than (with respect
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to clause (a) below) a deemed drawdown of under the Interest Payment Facility
pursuant to the provisions of Section 5.3).
(a) the Borrower shall have given a Drawdown Notice to the Lender
in accordance with the provisions of Section 3.2, 4.2 or 5.2,
as the case may be;
(b) the representations and warranties set forth in Section 8.1
shall be true and accurate in all material respects as of such
date by reference to the facts and circumstances then existing;
(c) no Default or Event of Default shall have occurred or be
occurring nor shall any such event occur as a result of making
such subsequent Drawdown;
(d) in the event of a Drawdown under the Acquisition Facility,
there shall have been delivered to the Lender certificates
representing Acquired Shares (or the Lender shall otherwise
obtain possession of such shares in a manner satisfactory to
the Lender) together with stock powers of attorney duly
executed in blank with signatures guaranteed in a manner
satisfactory to the Lender;
(e) in the event of a Drawdown under the Refinancing Facility,
there shall have been delivered to the Lender certificates
representing the Initially Pledged Shares previously securing
indebtedness being repaid with such Drawdown (or the Lender
shall otherwise obtain possession of such shares in a manner
satisfactory to the Lender) together with stock powers of
attorney duly executed in blank with signatures guaranteed in
manner acceptable to the Lender;
(f) the Borrower will not after giving effect to such Drawdown, be
in contravention of Section 10.2 without reference to any
applicable grace period specified therein; and
(g) such documentation as the Lender may reasonably require
releasing any security interest in the Collateral, and
registrations and filings in respect thereof, in favour of any
Persons other than the Lender.
9.3 WAIVER. The conditions set forth in Sections 9.1 and 9.2 are inserted
for the sole benefit of the Lender and may be waived by the Lender in whole
or in part, with or without terms or conditions.
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ARTICLE X
SECURITY, MARGIN, AND DISPOSITIONS
10.1 SECURITY DOCUMENTS. As security for the Obligations, both present and
future, the Obligors shall deliver, or cause to be delivered, to the Lender, at
or prior to the Closing, the following documents (referred to collectively as
the "Security Documents"):
(a) a security agreement (the "Borrower's Security Agreement")
executed and delivered by the Borrower substantially in the
form of Schedule D hereto;
(b) an irrevocable and unconditional guarantee executed and
delivered by the Guarantors guaranteeing the Obligations
substantially in the form set out in Schedule F hereto;
(c) a security agreement executed by each of the Guarantors
substantially in the form of Schedule E annexed hereto;
(d) an irrevocable power of attorney authorizing the Lender to
exercise the Specified Options for and on behalf of the
Borrower at any time during the continuation of an Event of
Default in the form of Schedule C to the Borrower's Security
Agreement.
10.2 MARGIN. The Borrower shall ensure that at all times the Margin
Ratio of the Pledged Shares shall not be less than the Acceptable Margin
Ratio. If at any time that the Margin Ratio shall be less than the
Acceptable Margin Ratio, the Borrower shall, without notice from, or any
other action of, the Lender, rectify such Default (a "Margin Default") within
three Business Days thereafter and, in any event, immediately if the Margin
Ratio shall become 1.15:1.0. or less (such period for rectification being
referred to as the "Margin Grace Period"). The Borrower may at any time
during a Margin Grace Period, by notice in writing to the Lender, request the
Lender's consent to the Borrower's selling Pledged Shares and applying the
net proceeds therefrom in prepayment of the Credit Facility and the
provisions of Section 3.6 (other than clause (vi) of Section 3.6(b)) shall
apply, MUTATIS MUTANDIS, to any such notice and to any such sale consented to
by the Lender. If at any time, the Margin Ratio shall be less than the
Acceptable Margin Ratio, the Lender may during the Margin Grace Period or at
any time thereafter give notice to the Borrower (which may be verbal) that it
intends, if the Margin Default is not rectified within the Margin Grace
Period, to dispose of such number of the Pledged Shares as will give rise to
net proceeds (after commissions and other costs at disposition), sufficient
to provide additional security for and/or to make a prepayment on account of
the Credit Facility as would result in the rectification of the Margin
Default. Upon the giving of such notice and the expiry of the Margin Grace
Period without rectification of the Margin Default, the Lender shall have the
unfettered right to sell or otherwise dispose of such number of the Pledged
Shares at market prices prevailing from time to time during such period of
disposition to such person or persons and in such manner as the Lender hereby
deems advisable and either to apply the net proceeds in prepayment of the
Credit Facility and/or to hold such net proceeds as additional
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Collateral; provided that prior to effecting any such disposition, the Lender
will consult with the Borrower as to which of the Pledged Shares are to be
disposed of, provided that the Lender shall only be required to consult for
such period, if any, as, in its sole discretion, will not prejudice its
ability to dispose of the Pledged Shares and does not adversely affect the
value thereof and will have no obligation to consult if the Borrower shall be
unavailable during such period. The Borrower hereby acknowledges that if the
Margin Ratio shall at times be 1.15:1.0 or less, it shall be reasonable for
the Lender to assume that the Pledged Shares shall decline speedily in value
and the Borrower waives, to the fullest extent permitted by applicable law,
any further rights it may have under applicable law in relation to any
disposition of the Pledged Shares pursuant to this Section 10.2. The rights
of the Lender under this Section shall be in addition to and not in
substitution for any rights which may arise under Article XII.
10.3 DISTRIBUTIONS. All Distributions on the Pledged Shares (other than
Normal Course Distributions payable when a Default shall not be continuing)
shall be paid to the Lender to be applied as hereafter provided in this
Section 10.3. If at any time the Corporation shall determine to pay a
Distribution on the Pledged Shares (other than a Normal Course Distribution
payable when a Default shall not be continuing), the Obligors shall forthwith
execute and deliver to the Lender such notices, directions and other
documents and take such other actions as the Lender may require to ensure
that all such Distributions are paid by the Corporation directly to the
Lender or its nominee (which may include, but shall not be limited to,
changing the address of the registered owner of such shares appearing in the
records of the registrar and transfer agent thereof to an address specified
by the Lender); provided the Lender may not, unless a Default shall be then
continuing, require the registration of any securities forming part of any
such Distribution in the name of the Lender or its nominee. Unless and until
the occurrence of a Default which shall be continuing, the Obligors shall be
entitled to receive all Normal Course Distributions on the Pledged Shares
free and clear of the Lien of the Security Documents. All cash distributions
other than Normal Course Distribution (and all cash Distributions while a
Default is continuing), shall be applied, firstly in payment of Deferred
Interest, if any, on the Loan Facility, secondly; on account of the
outstanding principal amounts of the Refinancing Facility and the Interest
Payment Facility and thereafter on account of the Basic Principal Amount of
the Acquisition Facility in the manner referred to in Section 7.3(c) hereof.
In the event that any cash Distribution referred to in the preceding sentence
shall be made on or of the Pledged Shares beneficially and by a Guarantor,
the Borrower shall take such actions and proceedings as will ensure that such
amounts shall be paid to the Lender as provided in such sentence or,
alternatively, shall make a separate payment to the Lenders in an amount
equal to such cash Distributions, in what latter event, the Lender shall pay
such cash Distributions to the applicable Guarantor. All non-cash
Distributions (including without limitations dividends payable in securities
or property) shall be held by the Lender as part of the Collateral as
security for the Obligations of the Obligor or Obligors owning the Pledged
Shares on which such non-cash Distribution shall have been made and the
Obligors shall execute such documentation as may be necessary or desirable to
ensure that the Lender has a first priority security interest therein.
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10.4 VOTING RIGHTS. Until the occurrence of a Default which shall be
continuing, the applicable Obligor may exercise all voting rights attaching
to the Pledged Shares provided that no such exercise shall result in a
contravention of Section 11.2(g). After the occurrence of a Default which is
continuing, the Obligor shall have no right to vote or take any other action
with respect to the Pledged Shares and the Lender may, but is not obligated
to vote, take such other action with respect to any Pledged Shares.
ARTICLE XI
COVENANTS
11.1 AFFIRMATIVE COVENANTS. The Borrower covenants and agrees with the
Lender that, so long as there is any obligation by any Obligors to the Lender
under any of the Credit Facility Documents, unless the Lender otherwise
consents in writing:
(a) PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid all amounts due and otherwise satisfy and
cause to be satisfied, its and the Guarantor's Obligations
under the Credit Facility Documents at the dates and places and
in the manner provided therein.
(b) FINANCIAL INFORMATION. The Borrower shall deliver, or cause to
be delivered, to the Lender the following information:
(i) as soon as available at the end of each financial
quarter of the Corporation and in any event within 60
days after such financial quarter end, a consolidated
balance sheet, statement of earnings and statement of
changes in financial position of the Corporation, as of
the end of such financial quarter or for such financial
quarter, as the case may be, setting forth in each case
in comparative form the figures for the previous
financial quarter and the corresponding financial year
to date;
(ii) as soon as available and in any event within 45 days of
each anniversary of the Closing Date a Net Worth
Statement certified as being accurate and complete by
the Borrower (which shall not disclose any material
adverse change from the Net Worth Statement delivered to
the Lender on the Closing Date);
(iii) within 120 days after the end of each financial year of
the Corporation, a copy of the audited consolidated
financial statement of the Corporation for the
respective financial year reported on by the independent
auditors of the Corporation together with a Borrower's
Certificate confirming that no Default or Event of
Default has occurred and is then continuing and setting
out all litigation matters related to the business of
the Corporation in respect of
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which the Corporation has a possible exposure in excess
of $1,000,000, or such other amount as is provided in
the equivalent provision of the Senior Credit Facility,
(in substantially the form of report provided by the
Corporation to its lenders pursuant to the Senior Credit
Facility) and confirming such matters are being
diligently defended and are not expected, in the opinion
of legal counsel of the Corporation, to have a material
adverse effect on the business of the Corporation;
(iv) copies of all materials forwarded by the Corporation
from time to time to its shareholders or filed by the
Corporation from time to time with any securities
regulatory authority or stock exchange (including,
without limitation, copies of materials relating to or
notices of any proposed Distribution) at the time such
materials are forwarded or filed, as the case may be; and
(v) such other information respecting the condition or
operations, financial or otherwise, of the Obligors or
the Corporation as the Lender may from time to time
reasonably request.
(c) COMPLIANCE WITH LOANS. The Borrower, will and will cause the
Guarantors to, comply with all applicable laws, non-compliance
with which would have a material adverse effect on the
Obligors, the Corporation or the Collateral, and duly observe
in all material respects all Authorizations and valid
requirements of Official Bodies.
(d) DEFEND COLLATERAL. The Borrower will, and will cause the
Guarantors to, maintain, and, as soon as reasonably
practicable, defend his or their right, title and interest to
the Collateral.
(e) MAINTAIN PERFECTION. The Borrower will, from time to time at
the request of the Lender, do or cause to be done all such acts
and things and execute and deliver, or cause to be executed and
delivered all such instruments, agreements, financing related
as may be necessary or advisable to maintain the Liens provided
for under or pursuant to the Security Documents as valid and
perfected first priority Liens on the Collateral.
(f) [intentionally deleted].
(g) OWNERSHIP AND CONTROL. The Borrower shall at all times
maintain the ownership and control over the Guarantors referred
to in Section 8.1(j).
(h) USE OF The Borrower shall
exclusively use the services of
or any affiliated registrant in the United States
to obtain offers for and effect secondary market
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purchases of the Acquired Shares and in connection therewith
shall pay brokerage commissions at the normal
published rates of (or at such other rate as may be
mutually agreed upon with the Borrower and ).
(i) ACQUISITION OF ACQUIRED SHARES. Not more than 3,669,004 Common
Shares (as presently constituted) will be acquired as the
Acquired Shares, and the Acquired Shares not will be acquired
at a weighted average price of more than $30 per share without
the prior written consent of the Lender.
(j) PRESERVE EXISTENCE. The Borrower shall do or cause to be done
all things necessary to preserve or maintain in good standing
in full force and effect the existence of each of the
Guarantors and all rights and all Approvals necessary to comply
with the Credit Facility Documents and to effect the
transactions contemplated thereby.
(k) NOTIFICATIONS. The Borrower shall notify the Lender promptly
of:
(i) any material change or proposed material change to the
terms and conditions of the Stock Option Plan;
(ii) any Default or Event of Default or any event or
circumstance which could reasonably result in a Default
or Event of Default or in any of the representations and
warranties contained in any of the Credit Facility
Documents becoming untrue or incorrect in any material
respect;
(iii) any change of the name of any of the Obligors or of the
chief executive office or place of business of any of
the Guarantors; and
(iv) any action, suit, proceeding, investigation, judgment,
order, writ, injunction, decree, rule or regulation of
the type referred to in Section 8.1(e).
(l) TAXES. The Borrower will, and will cause each of the
Guarantors to, duly file on a timely basis all tax returns
required to be filed by the Borrower or any of the Guarantors
and to pay or cause to be paid on a timely basis all taxes that
are due and payable, and all assessments and governmental
charges, penalties, interest and fines relating thereto payable
by the Borrower or any of the Guarantors.
(m) COMPLIANCE WITH SECURITIES LAWS. The Borrower will comply in
all material respects all the applicable securities laws and
stock exchange requirements in connection with the pledge or
the acquisition of the Acquired Shares and the pledge of the
Pledged Securities under the Secured Loans and all such
purchases of the Acquired Shares shall be effected through open
market purchases and shall not be acquired under any
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exemption from the prospectus or registration requirements of
applicable Canadian and U.S. securities laws.
11.2 NEGATIVE COVENANTS. The Borrower covenants and agrees with the
Lender that, so long as there is any Obligation of any of the Obligors to the
Lender under any of the Credit Facility Documents, unless the Lender
otherwise consents in writing:
(a) RESTRICTION ON INDEBTEDNESS. The Borrower shall not, and shall
not permit the Guarantor to, create, incur, guarantee, assume
or otherwise become or continue to be liable for any Debt
(other than Debt under the Credit Facility Documents) which
would result in the aggregate of such Debt of the Obligors at
any time exceeding Cdn. $20,000,000 (or the equivalent in any
other currency).
(b) RESTRICTIONS ON DISPOSITION. Except as expressly permitted
hereby, the Borrower shall not, and will not permit the
Guarantors to:
(i) sell, assign, transfer, or otherwise dispose of any
Collateral or any interest therein or agree to do any of
the foregoing; or
(ii) create, assume or suffer to exist any Lien upon the
Collateral other than Permitted Encumbrances or agree to
do any of the foregoing;
(c) NO ADDITIONAL SECURITIES. The Borrower will not, and will not
permit the Guarantors or any Associate of any of the Obligors,
either individually or jointly or in concert with any other
Person to acquire, or to become a part of a group which shall
acquire or own, any securities of the Corporation (or
securities convertible into or exchangeable or exercisable for
securities of the Corporation) other than the Acquired Shares
and options to purchase Common Shares acquired by the Borrower
from the Corporation in the ordinary course and on a basis
consistent with prior practice and Common Shares issued upon
the exercise of any existing or future stock options held by
the Borrower from time to time; provided that neither the
acquisition of such options nor the issue of Common Shares upon
the exercise of any existing or future stock options would
result in a Default or Event of Default; and further provided,
that the Borrower shall not exercise any such stock options
unless prior thereto there shall have been delivered to the
Lender a legal opinion of counsel acceptable to the Lender
similar to the legal opinion to be delivered on the Closing
Date as to the matter referred to in clause 6 of Schedule G
taking into consideration the issue of Common Shares issuable
upon such exercise; and further provided that any Common Shares
issued upon the exercise of any of the Specified Options shall
be forthwith delivered to the Lender in accordance with Section
10.3 accompanied by stock powers of attorney duly executed in
blank with signatures guaranteed in a manner acceptable to the
Lender to be held by it as part of the Collateral.
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(d) NO ACTING IN CONCERT. The Borrower shall not, and shall not
permit any Guarantor or any Associate of any of the Obligors to
become party to any shareholders' agreement, voting trust
agreement, option agreement (except as described in Schedule H
and as referred to in Section 11.2(c)), purchase agreement,
sale agreement or similar agreement (written or oral) with any
other Person which governs or relates to the voting,
acquisition, disposition or other dealing or holding of or in
any securities of the Corporation (or any securities
convertible into or exchangeable or exercisable for any
securities of the Corporation) and none of them will act
jointly or in concert (as such term is applied for the purposes
of any Canadian securities laws) with any other Person in
connection with the acquisition, voting, disposition, or other
dealing in or holding of the any such securities or become
part of a group established for any such purpose.
(e) NO MERGERS. The Borrower will not cause or permit any
Guarantor to amalgamate, merge, liquidate or dissolve or to
sell or to otherwise dispose of all or any substantial part of
its assets.
(f) VARIATION OF SPECIFIED OPTIONS. The Borrower will not
authorize, approve or consent to any material amendment or
variation of the Stock Option Plan or any of the Specified
Options which would change any of the rights of the Borrower
under the Specified Options or adversely affect the value of
the Specified Options as security for the Obligations.
(g) VOTING. The Borrower will not, and will not permit any
Guarantor to, exercise any voting or other rights attaching to
the Pledged Shares which could reasonably be expected to have
an adverse effect on the value of the Collateral.
ARTICLE XII
EVENTS OF DEFAULT
12.1 ACCELERATION. If any Event of Default shall occur and be
continuing, the entire principal amount of the Loans then outstanding
(including the Total Principal Amount of the Acquisition Facility and all
accrued and unpaid interest thereon (including Deferred Interest) and all
other payments due hereunder or under any of the other Credit Facility
Documents by any of the Obligors shall, at the option of the Lender, become
immediately due and payable with interest thereon at the rate or rates
determined as herein provided, to the date of actual payment thereof, all
without notice, presentment, protest, demand, notice of dishonour or any
other demand or notice whatsoever to the Obligors or any of them, all of
which are hereby expressly waived (the date on which shall exercise such
option being herein referred to as the "Loan Acceleration Date"). In such
event the Lender may, in its discretion, exercise any right or recourse
and/or proceed by any action, suit, remedy or proceeding against the Obligors
authorized or permitted by law for the recovery of all the
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Obligations and proceed to exercise any and all rights hereunder and under
the Security Documents and no such remedy for the enforcement of the rights
of the Lender shall be exclusive of or dependent on any other remedy but any
one or more of such remedies may from time to time be exercised independently
or in combination.
12.2 REMEDIES CUMULATIVE AND WAIVERS. For greater certainty, it is
expressly understood and agreed that the respective rights and remedies of
the Lender hereunder or under any other document or instrument executed
pursuant to this Agreement, including the Security Documents, are cumulative
and are in addition to and not in substitution for any rights or remedies
provided by law or by equity; and any single or partial exercise by the
Lender of any right or remedy for a default or breach of any term, covenant,
condition or agreement contained in this Agreement or other document or
instrument executed pursuant to this Agreement, including the Security
Documents, shall not be deemed to be a waiver of or to alter, affect or
prejudice any other right or remedy or other rights or remedies to which the
Lender may be lawfully entitled for such default or breach. Any waiver by
the Lender of the strict observance, performance or compliance with any
terms, covenant, condition or agreement herein contained or contained in the
Security Documents, any other instrument or document delivered hereunder or
thereunder and any indulgence granted, either expressly or by course of
conduct, by the Lender shall be effective only in the specific instance and
for the purpose for which it was given and shall be deemed not to be a waiver
of any rights and remedies of the Lender under this Agreement or under the
Security Documents, or under any other instrument or document delivered
hereunder or thereunder as a result of any other default or breach hereunder
of thereunder.
12.3 SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights as they relate
to indebtedness other than the Obligations, the Lender is authorized upon the
occurrence of an Event of Default which is continuing, without notice to the
Obligors or to any other Person, any such notice being expressly waived, to
set-off and to appropriate and to apply any and all deposits, matured or
unmatured, general or special and any other indebtedness at any time held by
or owing by the Lender to or for the credit of or the account of any Obligor
against and on account of the Obligations due and payable to the Lender under
any of Credit Facility Documents including without limitation, all claims of
any nature or description arising out of or connected with this Agreement.
ARTICLE XIII
COSTS, EXPENSES AND INDEMNIFICATION
13.1 COSTS AND EXPENSES. The Borrower shall pay promptly all costs and
expenses incurred by the Lender in connection with negotiation, preparation,
execution, delivery and administration of the Credit Facility Documents and
the other documents to be delivered hereunder including, without limitation,
the fees and out-of-pocket expenses of the Lender's Counsel. The Borrower
further agree to pay all reasonable costs and expenses (including reasonable
fees and expenses of counsel, accountants and other experts) in connection
with the preservation or enforcement of rights and
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remedies under the Credit Facility Documents and the other documents
delivered hereunder including, without limitation, all reasonable costs and
expenses sustained by them as a result of any failure by any of the Obligors
to perform or observe their respective obligations contained in any of the
Credit Facility Documents and the other documents delivered hereunder and
thereunder.
13.2 INDEMNIFICATION BY THE BORROWER. In addition to any liability of
the Borrower to the Lender under any other provision hereof, the Borrower
shall indemnify that Lender and hold that Lender harmless against any
reasonable costs or expenses incurred by the Lender, as a result (i) of any
failure by any Obligor to fulfil any of its obligations in any of the Credit
Facility Documents in the manner provided therein including, without
limitation, any cost or expense incurred by reason of the liquidation or
re-employment in whole or in part of deposits or other funds required by the
Lender to fund or maintain any Loan as a result of the Borrower's failure to
complete a Drawdown or to make any repayment or other payment on the ate
required hereunder or specified by it in any notice given hereunder; (ii)
such Obligor's failure to pay any other amount including, without limitation,
any interest or fee, due from it hereunder on its due date; or (iii) the
repayment or repayment of a LIBOR Loan or BA Rate Loan otherwise than on the
last day of its Interest Period. The Borrower shall also indemnify the
Lender from and against all losses, liabilities, damages, penalties, costs
and expenses (including consequential damages and loss of profits)
("Losses"), imposed on or incurred or suffered by the Lender or any of its
directors, officers, employees or agents as a consequence of or relating to
or arising out of any inaccuracy or breach by the Borrower of its
representations and warranties in Section 8.1(l) and (n) or of its covenants
in Sections 11.2(c) and (d) hereof, including Losses arising under any
applicable securities laws or stock exchange rules, or in relation to any
investigation or proceeding thereunder, as a result of the Lender's reliance
upon any such representations, warranties and covenants in connection with
any disposition of any Pledged Securities.
ARTICLE XIV
GENERAL
14.1 SURVIVAL. All covenants, agreements, representations and warranties
made in any of the Credit Facility Documents or in certificates delivered in
connection therewith by or on behalf of the Obligors or any of them shall
survive the execution and delivery of this Agreement and the making of
Drawdowns hereunder and shall continue in full force and effect so long as
there is any obligation of Obligors to the Lender under any of the Credit
Facility Documents.
14.2 NOTICES.
(a) Unless otherwise specified herein, all notices, requests, demands or
other communications to or from the Obligors under any of the Credit Facility
Documents shall be in writing and shall be personally delivered or faxed to
the addresses as follows:
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(i) To the Borrower or any Guarantor:
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
(ii) To the Lender:
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address or to such other individual as an Obligor may
designate by notice to the Lender or the Lender may designate by notice to
the Obligors. All deliveries required by any Credit Facility Document shall
be made to the applicable Obligor, or to the Lender, as the case may be, at
the places specified in this Section for the delivery of notices, requests,
demands or communications.
(b) Any written communication or document to be made or delivered
pursuant to any Credit Facility Document shall be made or delivered to the
applicable person at the address or fax number indicated in Section 14.2(a)
above and shall in any event be deemed to have been made or delivered, in
the case of any communication made by fax, when dispatched and an appropriate
verbal or written confirmation of receipt is received or, in the case of any
other form of written confirmation, when actual received.
14.3 AMENDMENT AND WAIVER. This Agreement and documents collateral
hereto may be modified or amended and a waiver of any breach of any term or
provision of this Agreement shall be effective only if the Borrower and the
Lender so agree in writing.
14.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario.
14.5 COURTS. Any legal action or proceeding with respect to the Credit
Facility Documents against the Obligors and any of them may be brought in the
courts of the Province of Ontario or British Columbia which courts the
parties hereto acknowledge irrevocable to be a convenient forum
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for the resolution of any such legal action or proceeding. The Borrower
hereby accepts, for himself and in respect of his assets and revenues,
generally and unconditionally the non-exclusive jurisdiction of the aforesaid
courts.
14.6 FURTHER ASSURANCES. The Borrower shall promptly cure, and shall
cause the Guarantors to promptly cure, any default in his or their execution
and delivery of any Credit Facility Document or in any of the other
instruments referred to or contemplated herein to which it is a party. The
Borrower, at its expense, will promptly execute and deliver, or cause the
Guarantors to execute and deliver, to the Lender, upon request, all such
other and further documents, agreements, certificates and instruments in
compliance with, or accomplishment of the covenants, and agreements of the
Obligors under the Credit Facility Documents or more fully to state the
obligations of the Obligors as set out therein or to make any recording, file
any notice or obtain any consents, all as may be necessary or appropriate in
connection therewith. When there is no longer any obligation of any of the
Obligors to the Lender under the Credit Facility Documents, the Lender shall
at the request and expense of the Borrower execute all such discharges and
things as are reasonably necessary to discharge the security interests
granted to the Lender pursuant to the Credit Facility Documents.
14.7 ENFORCEMENT AND WAIVER BY THE LENDER. The Lender shall have the
right at all times to enforce the provisions of this Agreement and any
agreement to be delivered pursuant hereto in strict accordance with the terms
hereof and thereof, notwithstanding any conduct or custom on the part of the
Lender in refraining from so doing at any time or times. The failure of the
Lender at any time or time to enforce its rights under such provisions,
strictly in accordance with the same, shall not be construed as having
created a custom in any way or manner, modified or waived the same. All
rights and remedies of the Lender are cumulative and concurrent and the
exercise of any right or remedy shall not be deemed a waiver or release of
any other right or remedy.
14.8 EXECUTION IN COUNTERPARTS. Any Credit Facility Document may be
executed in counterparts, each of which shall be considered an original and
all of which counterparts taken together shall constitute a single agreement.
14.9 JUDGMENT CURRENCY.
(a) If for the purpose of obtaining or enforcing judgment against any of
the Obligors in any court in any jurisdiction, it becomes necessary to
convert into any other currency (such other currency being hereinafter in
this Section 14.9 referred to as the "Judgment Currency") an amount due in
United States Dollars or Canadian Dollars under this Agreement, the
conversion shall be made at the Equivalent Amount prevailing on the U.S.
Banking Day immediately preceding:
(i) the date of actual payment of the amount due, in the case
of any proceeding in the courts of the Province of Ontario
or in the courts of any other jurisdiction that will give
effect to such conversion being made on such date; or
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(ii) the date on which the judgment is given, in the case of
any proceeding in the courts of any other jurisdiction
(the date as of which such conversion is made pursuant to
this Section 14.9(a)(ii) being hereinafter in this Section
14.9 referred to as the "Judgment Conversion Date").
(b) If, in the case of any proceeding in the court of any jurisdiction
referred to in Section 14.9(a)(ii)], there is a change in the Equivalent
Amount prevailing between the Judgment Conversion Date and the date of actual
payment of the amount due, the applicable Obligor shall pay such additional
amount (if any, but in any event not a lesser amount) as may be necessary to
ensure that the amount paid in the Judgment Currency, when converted at the
Equivalent Amount prevailing on the date of payment, will produce the amount
in United States Dollars or Canadian Dollars, as the case may be, which could
have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial order at the Equivalent Amount prevailing on the
Judgment Conversion Date.
(c) Any amount due from the Borrower under the provisions of Section
14.9(b)] shall be due as a separate debt and shall not be affected by
judgment being obtained for any other amounts due under or in respect of this
Agreement or any of the other Credit Facility Documents.
14.10 ASSIGNMENTS AND TRANSFER. This Agreement shall be binding upon and
enure to the benefit of the Borrower, and his respective heirs,
representatives, executors and permitted assigns and the Lender and its
successors and assigns. The Borrower shall not have the right to assign his
rights hereunder or any interest herein without the prior written consent of
the Lender, which consent may be arbitrarily withheld. The Lender from time
to time, after notice to the Borrower, may assign or grant a participation in
all of or any undivided portion of its interest in its rights and obligations
under this Agreement and the other Credit Facility Documents to any Person on
such terms and conditions as the Lender shall approve in its sole discretion
and give information provided to it by the Borrower or any other Person to
such proposed assignees or participants; provided, that prior to the
occurrence of a Default, the Lender may not assign more than 49.9% of its
interest in its rights and obligations under the Agreement and the other
Credit Facility Documents without the prior written consent of the Borrower,
such consent not to be unreasonably withheld.
14.11 INVALIDITY. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such
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provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the
validity or unenforceability thereof in any other jurisdiction or the
remaining provisions hereof in any jurisdiction.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to
be executed as of the date first above written.
SIGNED, SEALED AND )
DELIVERED in the )
presence of: ) By: _______________________________
) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
)
[Lender]
By: ________________________________
________________________________