AMENDED AND RESTATED
--------------------
EXTENDIBLE REVOLVING TERM CREDIT FACILITY
-----------------------------------------
This Agreement amends and restates in full the Loan Agreement dated March 17,
1995 and the Amended and Restated Extendible Revolving Term Credit Facility
Agreement dated June 28, 1996 between the Borrower and the Lender.
May 29, 1997
BORROWER: Norcen Energy Resources Limited (Norcen).
FACILITY: Extendible Revolving Term Credit Facility.
AMOUNT: Cdn. $100,000,000 or the U.S. dollar equivalent.
PURPOSE: For general corporate purposes, including commercial
paper backstop, capital expenditures, short term
working capital needs, refinancing existing bank
indebtedness and for Permitted Acquisitions.
LENDER: The Toronto-Dominion Bank
AVAILABILITY PERIOD: The Facility will revolve and fluctuate for a period
of 364 days ("Revolving Period"), subject to renewal
as provided below, followed by a 2 year non-revolving
term loan ("Term Period") with a bullet payment at
the end of the Term Period.
REPAYMENT: Revolving Period
The Revolving Period ends May 28, 1998. The Revolving
Period may be extended from time to time at the
Lender's sole discretion for up to 364 days, within
30 days after the Borrower's request which may not be
made more than twice in any 12 month period. The
Borrower's request for extension will include a
restatement of the Representations and Warranties. No
response from the Lender within 30 days of the
request shall mean that an extension is not granted.
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Term Period
The Term Period commences on the day after the last
day of the Revolving Period and ends two years
thereafter. Any underdrawn portion of the Facility
will be canceled at the end of the Revolving Period.
Any prepayment during the Term Period will constitute
a permanent reduction of the Facility. For greater
certainty, the rollover of a B/A or Libor Loan does
not constitute a prepayment during the Term Period.
RANKING: All amounts outstanding under the Facility will be
senior unsecured obligations of the Borrower ranking
pari passu with all existing and future Senior Debt
of the Borrower, other than indebtedness secured by
Permitted Encumbrances which under applicable law
ranks in priority thereto. The Facility will at all
times rank senior to any existing or future
Subordinated Indebtedness.
AVAILMENTS: The Facility will be available by way of the
following:
o Canadian dollar prime loans ("Cdn. Prime
Rate Loans");
o US dollar base rate loans ("USBR
Loans");
o Canadian dollar bankers' acceptances
("B/A's");
o US dollar London interbank offer rate loans
("Libor Loans"); and
o US dollar or Canadian dollar letters of
credit or guarantee.
CURRENCY EXCESS: If at any time the Canadian dollar equivalent of all
outstanding advances based on the noon (Toronto time)
Bank of Canada exchange rate exceeds the available
facility amount (a "Currency Excess"), the Borrower
will repay forthwith Cdn. Prime Rate Loans or USBR
Loans until such time as the Currency Excess is
eliminated. If a Currency Excess remains after
repayment of all Cdn. Prime Rate Loans or USBR Loans,
then the Borrower will:
1) collateralize dollar for dollar the Currency
Excess with Canadian or US dollar deposits, or
2) repay any Libor Loans, as well as any expenses
associated with breaking a Libor Loan prior to
maturity, or
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3) any combination of the foregoing.
BORROWING AND
NOTICE PROVISIONS: A) The Borrower may borrow as follows:
o Cdn. Prime Rate Loans in minimum
amounts of CSI million and
multiples of $100,000 thereafter;
o USBR Loans in minimum amounts of
US$I million and multiples of
$100,000 thereafter;
o advances of B/A's will, subject to
availability, be issued for periods
of 30,60, 90, 120 or 180 days, or
such other period as is agreed to
by the Lender, in minimum amounts
of C$1 million and multiples of
C$100,000 thereafter unless other
wise determined by the market for
B/A's; and
o Libor Loans, with maturities of 1,
2, 3 or 6 months, or such other
period which as is agreed to by the
Lender, in minimum amounts of US
million and multiples thereof
B) The following notice provisions will apply to
drawdowns, repayments, rollovers and conversions:
Prime Rate/USBR Loans
o up to $10,000,000; by 10:00 a m.
(Calgary time), same Business Day
notice is required;
o between $10,000,000 and
$50,000,000; by 10:00 a.m.(Calgary
time), one Business Day prior
notice is required; and
o over $50,000,000; by 10:00 a.m.
(Calgary time), 2 Business Days
prior notice is required.
4
B/A's
To the extent that the Borrower markets the
B/A's, no notice is required. Should the Borrower
request the Lender to market the B/A's then the
following notice provisions shall apply:
o same Business Day, 10:00 a.m.
(Calgary time), notice is required.
LIBOR Loans
o 3 banking days (in London and
Calgary) prior notice.
The Borrower may repay any part of the
outstanding amount without penalty subject to
applicable notice periods and provided that B/A's
and Libor Loans may be repaid on maturity dates
only, unless, in the case of Libor Loans, the
Borrower pays the expenses associated with
breaking the Libor Loan prior to maturity.
INTEREST RATES: During Revolving Period: - Libor + 40 bp
- B/A Rate + 40 bp
- USBR
- Canadian Prime
Letters of Credit ("L/C")
and Letters of Guarantee
("L/G"): - Financial L/C and/or L/G -
50 bp
- Non-Financial or
Performance L/C and L/G -
25 bp.
- All L/C and L/G's may be
renewed annually at the
discretion of the Lender
for an additional 1 year
term.
During Term Period: - All rates increase by
12.5 bp
5
Interest based on Cdn. Prime Rate and USBR Loans
will be calculated on a 365 or 366 day year, as
applicable, and payable monthly in arrears on the
last banking day of the month.
BA fees are payable at the time of endorsement and
are calculated based on a 365-day or 366-day year.
Interest on Libor Loans will be based on the
Telerate screen #3750 rate two days prior to
funding and on a 360-day year. Interest is payable
on rollover dates, or if the period of advance
exceeds 3 months, interest will accrue and be
payable on the day which is 3 months after the
first day of such period, and on the last day of
the Libor Loan.
Any interest rate based on a Period less than a year
expressed as an annual rate for purposes of the
Interest Act (Canada) is equivalent to such
determined rate multiplied by the actual number of
days in the calendar year in which same is to be
ascertained and divided by the number of days in
the period upon which it is based.
The Borrower will pay interest on all overdue
amounts (including overdue interest) at the
Interest Rate specified in this Agreement plus 1%
per annum. All overdue interest is calculated on a
daily basis and will be payable both before and
after default, maturity and judgement.
FEES: Standby Fees of 10 bp will be paid quarterly in
arrears on the undrawn portion of the Facility
during the Revolving Period. For these purposes,
the amount of borrowings outstanding in US Dollars
will be notionally converted to Cdn. Dollars at
the exchange rate in effect on the Business day
prior to the due date for payment of Standby Fees.
EXPENSES: The Borrower will pay all reasonable costs and
expenses (including legal fees) incurred in
connection with the review and preparation of the
Facility Documents, the preservation and/or
enforcement of any of the rights of the Lender
under the Facility, and loss or expenses
(including legal fees) incurred by the Lender as a
consequence of any failure to pay any stamp,
registration or other tax to which the Facility
may be subject.
6
CONDITIONS
PRECEDENT: A) Conditions precedent to the acceptance and
implementation of this Agreement are the
following:
1) officer's certificate stating that the
Representations and Warranties are true and
accurate in all material respects;
2) internal legal opinion stating that this
Agreement is valid, binding and legally
enforceable against the Borrower.
B) Conditions precedent to subsequent
drawdowns, rollovers and conversions
will be as follows:
1) receipt of applicable notice; and
2) no Event of Default or Potential Event
of Default has occurred or would occur
as a result of such drawdown, rollover
or conversion.
REPRESENTATIONS
AND WARRANTIES: Representations and Warranties are the following:
1) corporate existence of the Borrower;
2) corporate power and legal capacity of
the Borrower to carry on business and
own assets;
3) corporate power and authorization of the
Borrower to execute and deliver the
Facility Documents and to perform
covenants under the Facility Documents;
4) Facility Documents have been duly
executed and delivered by the Borrower;
5) Facility Documents create legal, valid,
binding and enforceable obligations of
the Borrower;
6) the most recent audited consolidated
financial statements of the Borrower
(initially December 31, 1996), fairly
present the consolidated financial
condition of the Borrower, as at such
date and the results of operations for
the year ended, in accordance with GAAP
consistently applied, and since the most
recent audited financial statements of
the Borrower, there has been no material
adverse change in the
7
consolidated financial position or business
operations of the Borrower;
7) the Borrower has in full force and
effect such insurance policies in
amounts covering the properties and
operations of the Borrower as are
customarily held by similar corporations
engaged in the same or similar
businesses in the localities where the
Borrower's properties and operations are
located;
8) no pending or threatened action, suit,
litigation, judgement or proceeding that has a
reasonable likelihood of materially adversely
affecting the Borrower's ability to repay or
perform its obligations under the Facility
Documents other than as disclosed in writing by
the Borrower on or prior to the execution of the
Facility Documents;
9) no known material environmental liability,
actual or contingent which has not been provided
for in the financial statements of Borrower in
accordance with GAAP; compliance with
environmental laws in all material respects; all
necessary material permits, licenses and other
consents required under environmental laws have
been received and are in good standing, and
properties are not the subject of any outstanding
or threatened order or judgement alleging
violation of Environmental Laws which if enforced
against the Borrower would have a material
adverse effect on the financial condition,
operations or business of the Borrower;
10) unencumbered ownership and clear title to
assets except for Permitted Encumbrances;
11) all amounts outstanding under the Facility
rank at least pari passu in right of payment with
the Borrower's other most senior unsecured
Indebtedness, other than Indebtedness which is a
preferred claim arising by operation of law or a
Permitted Encumbrance; and
12) no Event of Default or Potential Event of
Default has occurred and is continuing.
GENERAL COVENANTS: The Borrower will:
1) pay all amounts owing under the Facility when
due;
8
2) perform its obligations under the Facility
Documents;
3) maintain its corporate existence;
4) supply to the Lender on a regular basis:
a) annual audited consolidated financial
statements of the Borrower prepared in
accordance with GAAP, as soon as
available but in any event within 120
days of the end of each fiscal year;
b) quarterly unaudited consolidated
financial statements of the Borrower
prepared in accordance with GAAP, as
soon as available but in any event
within 90 days of the end of the first
3-fiscal quarters of each fiscal year,
in all cases stating comparative figures
for the corresponding date and period in
the previous fiscal year;
c) a compliance certificate as per Exhibit
A within 120 days of the fiscal year end
and within 90 days of the end of the
first 3 quarters of each fiscal year
showing the calculation of all Financial
Ratios and including an officer's
certificate stating that no Event of
Default or Potential Event of Default
has occurred;
d) Annual information forms or notices of
material change which are required to be
filed by the Borrower with any
regulatory authority or securities
exchange;
5) maintain the Interest Coverage Ratio and the
Senior Debt to Capital Ratio (the "Financial
Ratios") as follows:
a) Interest Coverage Ratio on a rolling 4
quarter basis to be greater than 2.50
times;
b) Senior Debt to Total Capital Ratio to be
maintained below.60:1,
all Financial Ratios to be calculated quarterly
on a consolidated basis, in accordance with GAAP;
9
6) carry on and conduct its business in a
proper and efficient manner and in
compliance with applicable laws in all
material respects;
7) maintain insurance policies covering
its material properties and operations as is
customarily maintained by similar corporations
engaged in the same or similar business;
8) not liquidate, dissolve or wind-up or take any
steps or proceedings in connection therewith;
9) not permit a merger with or into, or a
consolidation or amalgamation with, or transfer
all or substantially all its assets to, another
entity, other than a merger or amalgamation
between the Borrower and a Wholly-Owned
Subsidiary, or between Wholly-Owned Subsidiaries:
a) if an Event of Default or Potential
Event of Default exists or would occur
and be continuing immediately before and
after giving effect to the transaction;
and
b) unless the successor corporation:
i) agrees to be bound by the Facility
Documents;
ii) acknowledges the continuing validity and
enforceability of the Facility
Documents;
iii) represents and warrants that the
transaction wi11 not adversely affect
the rights and benefits afforded the
Lender under the Facility Documents;
iv) represents that the creditworthiness of
the resulting, surviving or transferee
entity is not materially weaker than the
Borrower prior to such action; and
v) provides legal opinions confirming the
matters set forth in paragraphs i), ii),
and iii) above.
10
10) not permit any lien, mortgage, charge, hypothec,
pledge or any other security interest or
encumbrance on its property or assets, except for
Permitted Encumbrances, unless at the same time
or prior to securing any other Indebtedness, the
Borrower grants security for this Facility which
ranks equally and rateably with the other
Indebtedness.
EVENTS OF DEFAULT: Events of Default are as follows:
1) nonpayment of principal when due;
2) nonpayment of interest or stamping fees due to
the Lender for 5 days after the due date, and
non-payment of standby fees, letter of credit
fees or other fees due to the Lender in either
case for 5 days after notice of nonpayment.
3) nonpayment of other amounts under the Facility
within 30 days after notice from the Lender;
4) breach of covenant under the Facility which
remains unremedied for 30 days after notice;
5) materially incorrect or misleading
representation or warranty under the Facility
when given;
6) cross default to any defaulted Indebtedness of
the Borrower in excess of C$25 million and any
applicable period of grace has expired;
7) bankruptcy, insolvency, cessation of business
or other dissolution proceedings of the Borrower
(30 day cure period if involuntary bankruptcy
applies);
8) final judgement or order in excess of C$25
million is rendered against the Borrower which is
not, within 60 days after entry thereof, bonded,
discharged or stayed pending appeal, or is not
discharged within 60 days after the expiration of
such stay; or
9) a lien or security interest in excess of $25
million is enforced against the property of the
Borrower or a Wholly-Owned Subsidiary.
11
Upon the occurrence and continuance of an Event of
Default: the Lender may declare all Indebtedness
under the Facility to be due and payable, and the
Leader will have no obligation to make further
advances, rollovers or conversions; the Lender
will have right of set off upon the occurrence and
continuance of an Event of Default; all Libor
Loans and USBR Loans may, at the Lender's sole
discretion, be converted to Cdn Prime Rate Loans
at any time and B/A's and letters of credit must
be collateralized by the Borrower in an escrow
account; interest will be calculated at the
default rate of 1% per annum above the Applicable
Credit Spread; and, upon the occurrence and
continuance of an Event of Default the Lender may
arrange for an environmental audit at the expense
of the Borrower.
INCREASED COSTS
AND CHANGE OF LAW: Increased costs to the Lender in providing and
maintaining the Facility including those costs
arising from capital adequacy requirements and
change of law to be for the account of the
Borrower. The Lender will not be obliged to
provide advances if rendered illegal.
ASSIGNMENT: The Lender reserves the right to sell, assign,
transfer or grant participation in the Facility,
in whole or in part, with the consent of the
Borrower (such consent not to be unreasonably
withheld) provided that consent of the Borrower
will not be required after an Event of Default or
Potential Event of Default. Assignments will be
permitted in minimum amounts equal to the lesser
of (i) C$10,000,000; and (ii) the remaining
commitment of the Lender.
The Borrower agrees to execute such further
documentation as the Lender may request for the
purpose of any assignment, sale or transfer of the
Facility.
CANCELLATION: The undrawn portion of the Credit Facility may be
cancelled without penalty upon 3 Business Days
notice.
GOVERNING LAW: Governing law will be the laws of the Province of
Alberta and Canada applicable therein.
12
In witness whereof the parties hereto, by executing this document, are agreeable
to the terms and conditions as presented herein; Dated on, the 29 day of May,
1997.
THE TORONTO-DOMINION BANK
Per: /s/ Dean Ariss
--------------
Dean Ariss
Per: /s/
--------------
NORCEN ENERGY RESOURCES LIMITED
Per: /s/ Robert J. Waters
--------------------
Robert J. Waters, Treasurer
Per: /s/
--------------------
13
DEFINITIONS
"Applicable Credit Spread" means:
- with respect to Canadian Prime Rate Loans...... nil
- with respect to USBR Loans..................... nil
- with respect to Libor Loans.................... 40 bp
- with respect to B/A's.......................... 40 bp (stamping fee)
"B/A Rate" means the discount rate at which the Lender's B/A's are purchased by
the Lender or sold into the market by the Borrower.
"Business Day" is a day, other than a Saturday or Sunday, on which the Lender is
open for business in Calgary, Alberta, Toronto, Ontario and New York, New York,
and with respect to Libor Loans, in London England.
"Cashflow" means, in respect of the Borrower, the aggregate of Consolidated Net
Earnings, Consolidated Interest Expense, Taxes and Non-Cash Items, all without
duplication and determined in accordance with GAAP.
"Cdn. Prime" means the rate of interest per annum, based on a 365 day year,
established and reported by the Lender to the Bank of Canada from time to time
as its reference rate of interest for determination of interest rates which the
Lender charges to customers of varying degrees of creditworthiness in Canada for
Canadian dollar loans made by it in Canada. For purposes of this Facility, the
Cdn. Prime will be the higher of the stated rate by the Lender or CDOR plus the
Applicable Credit Spread.
"CDOR" means the average yield to maturity for bankers' acceptances which is
quoted on Reuters Canadian Discount Offer Rate screen at 10:00 a.m. Toronto
time on the applicable date of advance for B/A's having a term to maturity of 1
month.
"Consolidated Interest Expense" means consolidated interest, whether expensed or
capitalized, in respect of Indebtedness determined in accordance with GAAP.
"Consolidated Net Earnings" means consolidated net income or loss as reported on
the Borrower's consolidated statement of earnings excluding income from
discontinued operations determined in accordance with GAAP.
"Consolidated Tangible Net Worth" means, on a consolidated basis determined in
accordance with GAAP, at any time, the sum of:
a) the Borrower's total shareholder equity; and
b) Subordinated Indebtedness;
less:
c) any amounts of goodwill attributable to the Borrower.
14
"Facility Documents" means:
a) this letter agreement between the Borrower and the Lender; and
b) such other documents and certificates which in the opinion
of the Lender, acting reasonably, are required to fully
document or satisfy the terms and conditions herein contained.
"Fed Funds Rate" means the rate set forth in the Federal Reserve Bank of New
York weekly statistical release designated at H.15(519), opposite the caption
"Federal Funds (Effective)".
"Funded Debt" means all Indebtedness payable more than one year from the date of
creation thereof including current maturities of such Indebtedness and
Indebtedness which by its terms is renewable to a due date beyond one year;
excluding Subordinated Indebtedness.
"GAAP" means generally accepted accounting principles which are in effect from
time to time in Canada.
"Guarantees" means an undertaking to become liable for indebtedness for borrowed
money as presented on consolidated financial statements of Borrower.
"Hostile Acquisition" means an offer to acquire shares of a corporation, which
is required to be reported to an applicable securities regulatory authority,
where the board of directors of the target corporation has not approved such
offer nor recommended to the shareholders of the corporation that they sell
their shares pursuant to the proposed offer,
"Indebtedness" means all items in the consolidated financial statements of the
Borrower classified as liabilities for money borrowed in accordance with GAAP
(and will include capitalized leases, and Guarantees or endorsements (other than
of notes, bills and checks presented to banks for collection or deposit in the
ordinary course of business) of indebtedness of others by the Borrower or a
Wholly-Owned Subsidiary, to the extend required by GAAP).
"Interest Coverage Ratio" means Cashflow divided by Consolidated Interest
Expense.
"Libor" means the rate of interest per annum based on a 360 day year at which
the Lender makes available United States dollars which are obtained by the
Lender in the Interbank Euro Currency Market, London, England at approximately
10:00 a.m. (New York time) on the second Business Day before the first day of,
and in an amount similar to, and for the period similar to the interest period
of such advance.
"Non-Cash Items" means depreciation, depletion, amortization, foreign exchange
translation gains or losses and other non-cash items included in the calculation
of Consolidated Net Earnings as reported on the Borrower's consolidated
statement of earnings as determined in accordance with GAAP.
15
"Permitted Acquisition" means a direct or indirect acquisition by the
Borrower which is not a Hostile Acquisition.
"Permitted Encumbrances" means:
a) any security interest, except on fixed assets or on shares
of any Subsidiary or affiliate, given in the ordinary course
of business to any bank or other financial institution, to
secure indebtedness payable on demand or maturing within 12
months of the date that such indebtedness is originally
incurred provided that the total indebtedness so secured
does not exceed $25 million;
b) any Purchase Money Mortgage;
c) Risk Management Liens where the aggregate value of all cash
and securities will not at any time exceed $25 million;
d) any security interest on any petroleum and natural gas
right, tangible assets associated therewith or the products
derived therefrom or the proceeds of sale of such products,
to secure production payments, royalties, carried interests
and similar obligations or to secure obligations in
connection with or necessarily incidental to commitments or
purchase and sale of, or the transportation or distribution
of, products derived from the petroleum and natural gas
right, including without limitation forward sales;
e) any security interest on any resource property of the
Borrower that has not been in commercial production during
the 12-month period ending on the date hereof, or has not
been in commercial production during the 12-month period
ending at the time of the imposition of such security to
secure any indebtedness incurred for the development or
improvement thereof or the development or improvement of any
other resource property of the Borrower that has not been
in commercial production during the 12-month period ending
on the date hereof or has not been in commercial production
during the 12-month period ending at the time of the
imposition of such security;
f) any security interest in favor of the government of any
country in which the Borrower owns assets or carries on
business or the government of any province, state,
municipality or other political subdivision in any such
country, or any department or agency of any such government,
given pursuant to a contract, concession, lease, license,
franchise, grant, permit or other instrument pertaining to
such assets or business or required by applicable laws;
16
g) liens for taxes, assessments or other governmental charges
not yet due or, if due, the validity of which is being
contested in good faith, and liens for the excess of the
amount of any past due taxes for which a final assessment
has not been received over the amount of such taxes as
estimated and paid by the Borrower;
h) unless it constitutes an Event of Default, the lien of any
judgement rendered or claim filed against the Borrower,
which is being contested in good faith by the Borrower;
i) undetermined or inchoate liens and charges (including
builders', mechanics', warehousemen's carriers' and other
similar liens) incidental to construction or current
operations which relate to obligations not due or delinquent
or which are being contested in good faith by the Borrower;
j) liens incurred or created in the ordinary course of business
on any particular petroleum and natural gas right and or on
any tangible assets associated therewith as security, in
favour of any other person who is conducting the
exploration, exploitation, development or operation of the
property or asset to which such petroleum and natural gas
right relates, to secure payment by the Borrower of its
proportion of the costs and expenses of such exploration,
exploitation, development or operation incurred by such
other person;
k) any security interest given by the Borrower to a public utility or
municipality or governmental or other public authority when
required by such utility or municipality or other authority in
connection with utility or municipal services required for the
operations of the Borrower in the ordinary course of its business;
1) any security interest on a lease or other instrument permitting the
extraction of substances other than crude oil, natural gas, natural
gas liquids and related products by the Borrower, provided that any
such lease does not interfere with the enjoyment by the Borrower of
any petroleum and natural gas right;
m) any renewal, refunding or extension of any security interest or
encumbrance referred to in the foregoing clauses a) or 1) or of any
security interest or encumbrance on any property in existence at
the time of acquisition thereof, in which the indebtedness thereby
secured after such renewal, refunding or extension is not increased
and the security interest or encumbrance is limited in its recourse
to the property originally subject thereto and any improvements
thereon; and
n) any security interest or encumbrance, other than those referred to
in the foregoing clauses a) to m), created by the Borrower if,
after giving effect to the creation of such security interest or
encumbrance, the aggregate principal amount of the indebtedness
secured thereby would not be greater than C$25,000,000.
17
"Potential Event of Default" means an event that would constitute an Event of
Default with the giving of notice, lapse or time or both.
"Purchase Money Mortgage" means any mortgage, charge, hypothec, pledge or other
security or encumbrance created upon any real or personal property acquired by
the Borrower after the date hereof (or previously acquired and substantially
unimproved) to secure or securing the whole or any part of the purchase price of
such property (or, in the case of previously acquired and substantially
unimproved property, the cost of the improvement thereof) or the repayment of
money borrowed to pay the whole or any part of such purchase price or cost, or
any vendor's privilege or lien on such property securing all or any part of such
purchase price or cost, including title retention agreements and leases in the
nature of title retention agreements.
"Risk Management Liens" means liens on cash or marketable securities of the
Borrower granted in connection with any interest rate, foreign exchange or
commodity risk management
arrangements provided:
a) the Borrower reasonably expects to produce sufficient
commodities of the type in question in the ordinary course of
business to fulfill such contracts; and
b) the obligations secured by such Hens are not due and delinquent.
"Senior Debt" means all Funded Debt that ranks senior to Subordinated
Indebtedness.
"Senior Debt to Total Capital Ratio" means, Senior Debt divided by Total
Capital.
"Subordinated Indebtedness" means Indebtedness that is subordinate in all
circumstances including bankruptcy, in right of payment to Indebtedness under
this Facility and Senior Debt.
"Subsidiary" means any corporation a majority of the shares carrying voting
rights of which are at the time owned or controlled directly or indirectly by
the Borrower.
"Taxes" means income taxes on the Borrower's consolidated statement of earnings
determined in accordance with GAAP.
"Total Capital" means Senior Debt plus Consolidated Tangible Net Worth.
"USBR" or "US Base Rate" means the rate of interest per annum, based on a 365
day year, established by the Lender from time to time as a reference rate for
the determination of interest rates that the Lender charges to customers of
varying degrees of creditworthiness for US dollar loans made by it in Canada.
For purposes of this Facility, the US Base Rate will be the higher of the stated
rate by the Lender or the Fed Funds Rate plus 1%.
18
"Wholly-Owned Subsidiary" means any Subsidiary in which all of the issued and
outstanding voting shares of each class of its capital are owned directly or
indirectly by the Borrower except that director's qualifying shares need not be
so owned.
* * * *