EXHIBIT 4.3
[LETTERHEAD OF ABN AMRO BANK]
June 12, 1998
Midas Canada Inc.
105 Commander Blvd.
Agincourt, Ontario
M1S 3X8
Attention: James Ball
Vice President
Dear Sirs:
We are pleased to confirm that, subject to acceptance by you, ABN AMRO Bank
Canada will make the following credit facility available to you on the basis of
the terms and conditions set out below:
BORROWER: Midas Canada Inc. (the "Borrower).
LENDER: ABN AMRO Bank Canada (the "Bank").
FACILITY: 364 day, committed revolving credit facility (the "Facility)
available as follows:
AMOUNT: CAD 18,000,000 (Eighteen Million Canadian Dollars)
PURPOSE: To refinance existing shareholder debt and for general
corporate purposes.
REPAYMENT: Bullet repayment 364 days from closing and any extension
thereafter ("Repayment Date").
EXTENSION: Additional 364 day extensions to be granted at the sole
discretion of the Bank.
BORROWING
OPTIONS: The Facility is available as follows:
(a) Canadian dollar loans, with interest at Prime Rate
("Prime Rate Loans");
(b) Canadian dollar bills of exchange drawn by the
Borrower and accepted by the Bank ("Acceptances"),
subject to the Acceptance conditions set below;
Each use of the Facility by way of each of the foregoing
methods is referred to as a "Borrowing".
FACILITY FEE: A fee of 0.25% per annum on the Facility amount (CAD
18,000,000) is payable quarterly in arrears.
CANCELATION: The Borrower may cancel, all or any portion of the facility,
subject to Prepayment requirements, by serving 10 day written
notice to the Bank.
Midas Canada Inc.
June 5, 1998
Page 2
BORROWING
REQUESTS: In the case of Acceptances, at least two business days prior
written or oral notice and in the case of Prime Rate Loans,
written or oral notice before 11 am Toronto time on the day of
drawdown. Borrower should specify the amount, type of
Borrowing requested and the term thereof (if applicable).
INSTRUCTIONS: The Bank shall be entitled to act upon the oral instructions
of any person whom the Bank believes is a person the Borrower
has identified in writing from time to time to the Bank as
being a person authorized by the Borrower to give instructions
regarding any matter in connection with this agreement and the
Facility, including but without limitation, the drawdown or
conversion of any Borrowing. The Bank shall not be
responsible for any error or omission in such instructions or
in the performance thereof except in the case of gross
negligence or willful misconduct by the Bank or its employees.
Any such oral instructions so given shall be confirmed in
writing on the same day by the Borrower to the Bank provided
that in any event of any discrepancy between the Bank's
records of the Borrower's oral instructions and the written
confirmation, the Bank's records shall prevail.
CONVERSION: The Borrower may, upon giving prior written or oral notice,
convert a Borrowing to either of the agreed options provided
that Acceptances may not be converted other than on the
respective maturity date.
PREPAYMENT: The Borrower may prepay any Borrowing in whole or in part
provided that the Borrower shall reimburse the Bank breakage
costs and or expenses incurred as a result of a prepayment of
an Acceptance on a date other than the maturity date of such
Acceptance. There will be no prepayment penalties on Prime
Rate borrowings.
INTEREST
RATES: "Prime Rate" means the greater of:
(i) the Bank's prime lending rate per annum as quoted by the
Bank from time to time for Canadian dollar commercial
loans, made in Canada, as changed from time to time by
the Bank without notice to the Borrower; or
(ii) the average 30 day Acceptances rate as quoted on Reuter
Service page CDOR determined as of 10:00 am Toronto time
on such day plus 75 basis points.
Interest Rate for Prime Rate Loans is payable monthly in
arrears on the last day of the month or as otherwise specified
by the Bank.
Interest for Prime Rate Loans is calculated in accordance with
the Bank's usual practice and on the basis of the actual days
outstanding and a year of 365 days.
Interest on overdue amounts will be payable at the Bank's CAD
Prime Rate + 2% per annum, after maturity, default and
judgment.
For the purposes of the Interest Act (Canada) with respect to
drawings in CAD, each rate of interest determined pursuant to
such calculation expressed as an annual rate is equivalent to
such rate as so determined multiplied by the number of days in
the calendar year in which the same is to be ascertained and
divided by 365.
Midas Canada Inc.
June 5, 1998
Page 3
ACCEPTANCE
CONDITIONS: Each Acceptance shall be issued and shall mature on a business
day in accordance with the following conditions:
(a) Acceptances shall be issued in minimum face amounts
of CAD 1,000,000 and in an intergral multiple of CAD
100,000 for terms of not less than 30 days and not
more than 180 days (or as otherwise agreed by the
Bank) but not to exceed the Repayment Date of the
Facility;
(b) the Borrower shall pay an acceptance fee of 0.75% per
annum. Acceptance fees shall be paid on acceptance,
calculated on the face amount of the Acceptance
issued and based upon the number of days in the term
and a year of 365 days;
(c) the Borrower shall, on the day on which an Acceptance
becomes payable, by not later than noon (Toronto
time), pay to the Bank an amount equal to the face
amount of such Acceptance notwithstanding that the
Bank may be the holder of such Acceptance; and
(d) each Acceptance shall be governed by the terms and
conditions of Acceptance Agreement attached as
Schedule A and such agreement shall govern in the
even of any conflict or consistency with this
Agreement.
EVIDENCE OF
INDEBTEDNESS: The Bank is hereby authorized to record the date and amounts
of any drawings and the tenor and interest rates applicable
thereto and such recording, in the absence of manifest errors,
shall be conclusive as between the Bank and the Borrower.
SECURITY: Unconditional guarantee in favour of the Bank from Midas
International Corporation (the "Guarantor") for principal,
interest and fees, ("the Security") in a form satisfactory to
the Bank accompanied by constating documents of the Guarantor
and a legal opinion.
CONDITIONS
PRECEDENT: Prior to disbursement, the Bank shall have received the
following documentation from the Borrower in a form and
substance acceptable to the bank:
a) The Security.
b) Standard documentation (including Banking Resolution,
Articles of Incorporation, Borrowing By-laws,
Certificate of Signatures and Incumbancy, Signature
Cards, and Operation of Account agreement (if
required)):
c) A duly executed copy of this facility letter;
REPRESENTATIONS
AND
WARRANTIES: The Borrower represents and warrants to the Bank, such
representations and warranties to survive any and all advances
hereunder and being acknowledged by the Borrower as
representations and warranties upon which the Bank
specifically relies in making each advance hereunder
notwithstanding any investigation heretofore or hereafter made
by the Bank or any representative of the Bank, that:
a) The Borrower is properly incorporated and in good
standing under the laws of its jurisdiction of
incorporation;
b) The borrowing of money hereunder has been authorized
by all necessary corporate action and does not and
will not contravene any agreement or other instrument
to which the Borrower is a party or is otherwise
bound;
c) The Borrower has full power, authority and legal
right to borrow in the manner and on the terms and
conditions set out in this letter and to execute and
deliver this letter.
Midas Canada Inc.
June 5, 1998
Page 4
The said representations and warranties shall be true
and correct from the date hereof and through the
duration of the Facility, including as at the date of
each advance made under the Facility, failing which
the Bank shall be under no obligation to advance the
Facility or any portion thereof.
ENVIRONMENTAL: The Borrower represents and warrants (which
representation and warranty shall continue so long as
any amounts are outstanding hereunder) that neither
the Borrower's property nor any of the operations of
the Borrower are subject to any judicial or
administrative proceeding alleging violation of a
material nature of any federal, provincial or local
environmental, health or safety statute or
regulation.
COVENANTS: Until the loans and interest thereon, and all other
amounts payable with respect thereto, have been paid
in full, the Borrower and guarantor agree that a
violation of the following covenants that apply to
Midas Inc. will be an event of default under this
agreement: [Capitalized terms are identical to those
defined in the USD 200 min revolving credit agreement
dated Jan 22, 1998 with Midas Inc as a Borrower and
First Chicago as Agent.]
1) the maximum Total Debt to Earnings ratio before
interest, income taxes, depreciation and
amortization (EBITDA), calculated quarterly on a
rolling four quarter basis is not to exceed 3.5:1
for fiscal year end 1998, 3.5:1 for 1999, 3.25:1
for 2000, 3.0:1 for 2001 and 2.75:1 for 2002;
2) to maintain Minimum Net Worth at greater than or
equal to the sum of I) 75% of Net Worth on
Distribution Date plus (ii) 50% of net income for
each quarter after Distribution Date, if positive,
plus (iii) 100% of restructuring charges
calculated after-tax, taken within the first two
years of the Distribution Date;
3) maintain Minimum fixed charge coverage ration
[EBITDA/(Interest + Rent)], calculated on a
consolidated, rolling four quarter basis, at the
end of each quarter end at a level greater than
2.25:1 for 1998, 2.25:1 for 1999, 2.5:1 for 2000,
2.75:1 for 2001 and 3.0:1 for 2002.
Until the loans and interest thereon, and all other
amounts payable with respect thereto, have been paid
in full, the Borrower covenants as follows:
a) not to incur any debt for borrowed money
other than capital leases entered into in
the normal course of business but excluding
intercompany debt which shall be
subordinated to this debt;
b) not to provide any tangible security in
support of its liabilities;
c) to provide the Bank with annual unaudited
financial statements with 120 days of its
fiscal year end;
d) to provide the audited financial statements
of Midas Inc. within 120 days of its year
end, along with quarterly compliance
certificates of the Guarantor and Midas Inc
under the USD 200 min revolving credit
agreement dated Jan. 22, 1998;
e) to insure and keep insured business and
property to the extent considered adequate;
f) to duly and punctually pay, or cause to be
paid, principal and interest on the loans
contemplated hereby, any other fees and
amounts payable hereunder, or other
assessments or governmental charges or
levies imposed upon the Borrower's income or
property;
g) to maintain its legal existence and
compliance with all laws of its jurisdiction
of incorporation and cause each of its
subsidiaries to maintain its legal existence
and good standing under the laws of its
jurisdiction of incorporation;
Midas Canada Inc.
June 5, 1998
Page 5
EVENTS OF
DEFAULT: The occurrence of any of the following events, at the
discretion of the Bank, would make all obligations of Borrower
to the Bank immediately due and payable:
a) Borrower fails to pay the Bank any principal when
due, interest or any other sum within five days of
when due;
b) Midas Inc. defaults under its USD 200 min revolving
credit agreement dated January 22, 1998;
c) Midas Inc. or any of its subsidiaries defaults on a
financial obligation over USD 10 min;
d) Borrower becomes insolvent or fails to pay its debts
generally as they come due, or files any petition,
proceeding, case, or action for relief under any
bankruptcy, reorganization, insolvency, or moratorium
law, or any other law or laws for the relief of, or
relating to, debtors;
e) Any of the representations and warranties herein
cease to be true and correct;
f) Borrower fails to comply with any of the
aforementioned covenants.
OTHER TERMS/
CONDITIONS: a) All repayments shall be made in same day funds, free
and clear of any deduction for any and all taxes,
duties, fees or other charges of any nature
whatsoever;
b) The terms and conditions hereof shall be governed by
and construed under the laws of the Province of
Ontario and laws of Canada applicable therein; and
c) Neither this letter agreement nor the loan
contemplated hereby will be assignable by the
Borrower; and
d) All legal fees and expenses are for the account of
the Borrower.
INCREASED
COSTS: Notwithstanding anything contained in this letter to the
contrary, in the event that:
(i) changes to any existing law or regulation or the
introduction of any new law or regulation, or taxes
other than income taxes, including, without
limitation, a sales tax on loan transactions, or in
the interpretation or administration thereof; or
(ii) compliance by the Bank with any request from or
requirement of any central bank or other fiscal or
monetary authority having jurisdiction over Canadian
banks generally (whether or not such request or
requirements has the force of law);
cause the Bank to;
(a) incur any cost as a result of having entered into
and/or performed its obligations hereunder and/or as
a result of obligations or options remaining
outstanding hereunder including, without limitation,
any reserve or special deposit requirement or any
payment on or calculated by reference to the amount
of the Facility hereunder;
(b) suffer a reduction in the rate of return on that part
of its overall capital (not due to the rates of tax
payable on their overall profits or net income) as a
result of a requirement to attribute or allocate
capital to the Facility provided hereunder in respect
of that part of such facility which is for the time
being undrawn as a result of a change in the manner
in which the Bank is required to allocate resources
to its obligations hereunder;
then the Bank reserves the right to increase the charges for
the Facility and/or Facility options provided hereunder by the
amount of such additional cost or liability as determined by
the Bank and the Borrower agrees that it will forthwith on
demand pay to the Bank an amount sufficient to reimburse the
Bank against such costs or liabilities so long as the Bank
provides the calculation; then the Borrower will not
unreasonably withhold such higher cost.
Midas Canada Inc.
June 5, 1998
Page 6
NOTICES: Unless otherwise provided herein, all notices or other
communication required or permitted hereunder shall be in
writing and may be communicated electronically. If mailed by
prepaid first class mail such notice or communication shall be
deemed to have been received four (4) business days after the
postmark thereon, and if physically or electronically
delivered shall be deemed to have been received on the date of
delivery. All notices or other communications shall be
addressed as follows:
If to the Borrower, to:
Midas Canada Inc.
105 Commander Blvd.
Agincourt, Ontario M1S 3X8
FAX: (416)-291-0635
Attention: James Ball
Vice President Finance
with a copy simultaneously to:
Midas International Corporation
225 North Michigan Avenue
Chicago, Illinois, U.S.A. 60601-7601
FAX: (312) 565-7881
Attention: Christian C. Pappas
Vice President and Treasurer
If to the Bank, to:
ABN AMRO Bank Canada
Suite 1500 Aetna Tower
P.O. Box 114 T-D Centre
Toronto, Ontario M5K 1G8
FAX: (416)-367-7937
Attention: Mr. Jim Noble
Vice President, Corporate Banking
We are pleased to have this opportunity to service your requirements and request
that you indicate your acceptance of the foregoing terms and conditions by
signing and returning the duplicate copy of this letter by July 17, 1998, at
which time this offer shall lapse.
Yours very truly,
ABN AMRO BANK CANADA
Toronto Brandy
/s/ Jim Noble /s/ David Lam
Jim Noble David Lam
Vice President, Manager, Credit
Corporate Banking
Midas Canada Inc.
June 5, 1998
Page 7
We acknowledge and accept the foregoing terms and conditions of this Facility
letter, this the 29th day of June, 1998.
MIDAS CANADA INC.
By: Robert Lee Barclay
-------------------------------
Name: Robert Lee Barclay
By: /s/ Robert H. Jorenson
-------------------------------
Name: Robert H. Jorenson
TO ABN AMRO Bank Canada:
Midas International Corporation hereby acknowledges and consents to the
foregoing committed credit facility this 29th day of June, 1998.
MIDAS INTERNATIONAL CORPORATION
By: /s/ Robert Lee Barclay
-------------------------------
Name: Robert Lee Barclay
By: /s/ Christian C. Pappas
-------------------------------
Name: Christian C. Pappas
Midas Canada Inc.
June 5, 1998
Page 8
Schedule A to the Agreement dated as of the 29th day of June, 1998 between Midas
Canada Inc. as Borrower and ABN AMRO Bank Canada as the Bank.
Bankers' Acceptance Agreement
-----------------------------
TO: ABN AMRO BANK CANADA (the "Bank")
IN CONSIDERATION of the Bank from time to time accepting term drafts
drawn by the undersigned on the Bank (such term drafts, upon acceptance by the
Bank, are referred to in this Agreement as "Acceptances"), the undersigned
hereby agrees:
1. to provide the Bank with such number of business days' notice of the
issuance of new Acceptances and/or the rollover at maturity of
previously issued Acceptances as agreed;
2. that the Bank may complete and accept pre-signed drafts of the
undersigned from time to time in accordance with the instructions of
the undersigned and the Bank shall incur nor liability whatsoever in
respect of any instructions carried out by the Bank in the belief that
such instructions were properly given by the undersigned;
3. that with respect to the safekeeping of pre-signed drafts of the
undersigned, the Bank shall be obligated to exercise only the same
degree of care as if such pre-signed drafts were the property of the
Bank and the Bank shall not be liable for any damage, loss or other
claim arising by reason of any loss or improper use of any pre-signed
drafts held by the Bank except any such damage, loss or other claim
caused by the gross negligence or willful misconduct of the Bank or its
employees;
4. that absent any written commitment of the Bank to the contrary, the
acceptance of any drafts of the undersigned shall be at the sole
discretion of the Bank;
5. to pay the stamping or acceptance fee upon acceptance by the Bank of
any draft of the undersigned, such stamping fee to be calculated in
accordance with the customary practice of the Bank upon the principal
amount of the draft for the duration of its stated term on the basis of
the actual number of days in the stated term, commencing on the date
the Bank accepts the draft and ending on, but excluding, its stated
payment date;
6. that the Bank shall have the right, but not the obligation, to purchase
any Acceptances at such discount as the undersigned and the Bank may
agree from time to time and any Acceptances purchased by the Bank may
be held, sold or rediscounted by the Bank;
7. to pay to the Bank at its main branch in Toronto, Ontario, in same day
funds, the face amount of each Acceptance on its maturity date without
days of grace, whether or not the Bank is the holder of the maturing
Acceptance;
8. that, unless otherwise provided by written agreement between the
undersigned and the Bank, all amount not paid when due hereunder and
all overdue interest shall bear interest (calculated daily and payable
on the last day of each month) at the rate per annum equal to the
Bank's prime lending rate for Canadian dollar commercial loans made in
Canada, as changed by the Bank from time to time without notice to the
undersigned, plus 2%;
9. that all security held by the Bank to secure payment of any obligation
of the undersigned to the Bank shall be continuing collateral security
for the fulfillment of the obligations of the undersigned in respect of
any Acceptance or hereunder;
Midas Canada Inc.
June 5, 1998
Page 9
10. that the undersigned shall compensate the Bank for any damage, loss,
expense or other claim suffered or incurred by the Bank with respect to
any draft of the undersigned or any Acceptance dealt with by the Bank
under this Agreement; and
11. that the payment obligations of the undersigned hereunder are
unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including,
without limitation, the following circumstances:
(i) any lack of validity or enforceability of any draft of the
undersigned accepted by the Bank; or
(ii) the existence of any claim, set-off, defense or other right
which the undersigned may have at any time against the holder
of an Acceptance, the Bank or any other person, whether under
this Agreement or otherwise.
The undersigned acknowledges having received a true copy of this Agreement.
DATE: June 29, 1998
MIDAS CANADA INC.
By: /s/ Robert Lee Barclay
---------------------------------------
Name: Robert Lee Barclay
By: /s/ Robert H. Jorensen
---------------------------------------
Name: Robert H. Jorensen