Exhibit 10.1
CREDIT AGREEMENT
THIS AGREEMENT dated as of
November 28, 2008 is between:
DALEA PARTNERS, LP
, an Oklahoma limited partnership,
having an office at 4801 Gaillardia Parkway, Suite 225, Oklahoma
City, Oklahoma 73142
(the “ Lender
”)
AND:
TRANSATLANTIC
PETROLEUM CORP. , an Alberta corporation having
its chief executive
office at Suite 1840, 444-5
th
Ave., S.W., Calgary
Alberta T2P 2T8
(the “ Borrower
”)
BACKGROUND
A. On October 27, 2008,
Borrower announced an off-market takeover offer (the “
Offer ”) for Borrower or a wholly-owned subsidiary of
Borrower to acquire (collectively, the “ Transaction
”) for AUD $1.05 in cash 100% of the ordinary shares
(collectively, “ Incremental Shares ”) of
Incremental Petroleum Limited ABN 38 115 711 601 (ASX: IPM) (the
“ Target ”) pursuant to an off-market takeover,
requiring the preparation of a bidder’s statement to be
lodged with the Australian Securities & Investments
Commission (as may be amended or restated, the “
Bidder’s Statement ”), upon the terms, and
subject to the conditions set forth in the Bidder’s Statement
and the documents and instruments to be executed and delivered in
connection therewith (together with the Bidder’s Statement,
the “ Transaction Documents ”).
B. To facilitate the consummation of
the Transaction, the Lender has agreed to lend to the Borrower and
the Borrower has agreed to borrow from the Lender in multiple
advances the aggregate principal amount of up to the Committed
Amount (as defined below), on the terms and subject to the
conditions of this Agreement.
AGREEMENTS
For good and valuable consideration,
the receipt and sufficiency of which each party acknowledges, the
parties agree as follows:
1. Definitions. In this
Agreement:
(a) “ Business Day
” means a day which is not a Saturday, Sunday or a day on
which commercial banks in the State of Texas are authorized or
required to be closed;
(b) “ Collateral
” means all personal property or assets, tangible or
intangible, that are, or are intended to be, at any time subject to
the lien and security interest created in favor of the Lender
pursuant to the Security Agreement or any other security agreement
or other document described in or delivered pursuant to paragraph
6, including without limitation, all of the ordinary shares in the
capital of TransAtlantic Australia Pty. Ltd.;
(c) “ Committed Amount
” means USD $67,000,000;
(d) “ Commitment
Termination Date ” means February 28,
2009.
(e) “ Disclosure Record
” has the meaning set forth in clause (i) of paragraph
8;
(f) “ Event of Default
” has the meaning set forth in paragraph 11;
(g) “ Exchange ”
means the Toronto Stock Exchange;
(h) “ Guarantors
” means TransAtlantic Worldwide Ltd., TransAtlantic
(Holdings) Australia Pty. Ltd. and TransAtlantic Australia Pty.
Ltd.;
(i) “ Guaranty ”
has the meaning set forth in paragraph 6;
(j) “ Incremental
Shares ” has the meaning set forth in recital
A;
(k) “ Indemnitee
” has the meaning set forth in paragraph 14;
(l) “ Initial Advance
” has the meaning set forth in paragraph 2;
(m) “ Loan ”
means the loan to be made by the Lender to the Borrower pursuant to
paragraph 2;
(n) “ Maximum Rate
” has the meaning set forth in paragraph 23;
(o) “ Notes ” has
the meaning set forth in paragraph 2;
(p) “ Outstanding
Balance ” has the meaning set forth in paragraph
4(a);
(q) “ Security
Agreement ” has the meaning set forth in paragraph
6;
(r) “ Subsequent
Advance ” has the meaning set forth in paragraph
2;
(s) “ Subsidiaries
” means, with respect to the Borrower, any corporation of
which at least a majority of the outstanding shares to which there
is attached voting power under ordinary circumstances to elect a
majority of the board of directors of such corporation, shall at
the relevant time be owned directly or indirectly by the Borrower,
one or more Subsidiaries of the Borrower, or any combination
thereof, and “ Subsidiary ” shall mean any one
of them; provided, however, that “ Subsidiary ”
shall not include the Target nor any subsidiaries of the Target
;
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(t) “ Transaction
” has the meaning set forth in recital A;
(u) “ Transaction Closing
Date ” means the date upon which the Transaction is
consummated and closed and all holders of the purchased Incremental
Shares have been paid pursuant to the Transaction Documents;
and
(v) “ Transaction
Documents ” has the meaning set forth in recital
A.
2. The Loan.
(a) Subject to and upon the
fulfilment of the conditions precedent contained in paragraph 7 of
this Agreement, the Lender will advance to the Borrower in multiple
advances the aggregate principal amount of up to the lesser
of (a) the actual amount necessary to purchase such number of
the Incremental Shares as have been acquired under the Transaction
and related transaction costs and expenses associated therewith,
and (b) the Committed Amount.
(b) Notwithstanding anything to the
contrary, the Loan shall be denominated (and deemed made) in U.S.
Dollars but shall be advanced in Australian Dollars based on an
agreed currency exchange rate equal to AUD $0.7024 to USD $1.00 and
the Outstanding Balance shall be denominated, calculated and
determined in U.S. Dollars, and shall be prepaid or paid when due
in U.S. Dollars. The initial advance under the Loan (the “
Initial Advance ”) shall be no less than AUD
$10,000,000. Further advances under the Loan (each, a “
Subsequent Advance ”) shall be in multiples of AUD
$1,000,000 up to an aggregate maximum principal amount of USD
$67,000,000. For any such advance, the Borrower shall provide
written notice to the Lender and the Lender shall, if satisfied
that all conditions hereunder have been met, provide the Borrower
with such advance within three (3) business days. The
Lender’s commitment to make the Loan shall expire at the
close of business on the Commitment Termination Date. The Initial
Advance and each Subsequent Advance will be evidenced by promissory
notes in the form attached hereto as Exhibit A (the “
Notes ”).
(c) Lender represents and warrants
to Borrower that Lender has the financial capacity and wherewithal
to lend to Borrower the Committed Amount.
3. Use of Proceeds. The
Borrower covenants and agrees with the Lender that the proceeds of
the Loan will be used by the Borrower to fund the consummation of
the Transaction by TransAtlantic Australia Pty. Ltd. and to fund
the costs and expenses associated therewith, and for no other
purpose whatsoever.
4. Term, Prepayment and Payments
Generally
(a) The aggregate unpaid principal
amount of the Loan, together with all accrued but unpaid interest
and other costs, expenses or charges payable hereunder from time to
time (collectively the “ Outstanding Balance ”),
will be immediately due and payable by the Borrower to the Lender
on the earliest of:
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(i)
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the date that
is one year from the Transaction Closing Date;
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(ii)
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the date of any
change of control of the Borrower (“ control ”
being defined as ownership of or control or direction over,
directly or indirectly, 20% or more of the outstanding voting
securities of the Borrower); and
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(iii)
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the occurrence
of an Event of Default and a demand for payment by the Lender
pursuant to paragraph 12 below.
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(b) If after the making of the Loan,
or any portion thereof, the Borrower or any of its Subsidiaries
sell or otherwise dispose of any assets outside of the ordinary
course of business, or close one or more equity or debt financings,
the Borrower will pay or cause to be paid to the Lender all
proceeds from such sale, disposition or financing, net of
reasonable selling or financing costs, up to the full amount of the
Outstanding Balance, to be applied to the repayment of the
Loan.
(c) The Borrower may prepay the Loan
in whole at any time before maturity, without penalty.
(d) All payments to be made by the
Borrower will be made without deduction for any counterclaim,
defence, recoupment or setoff and free and clear, and without
deduction for, or withholding of any and all taxes (other than
taxes upon net income of the Lender imposed by the United States of
America and the State of Oklahoma). If the Borrower is required by
law to deduct or withhold any taxes (other than taxes upon the net
income of the Lender imposed by the United States of America or the
State of Oklahoma) from payments due hereunder, the amount payable
by the Borrower to the Lender shall be increased as necessary so
that after making all required deductions and withholdings, the
Lender receives the amount it would have received had there been no
deduction or withholding, and the Borrower shall pay the full
amount required to be deducted or withheld to the appropriate
taxing authority.
5. Interest. Interest will
accrue on the Outstanding Balance from time-to-time outstanding
during the period from the date the Initial Advance is made to the
date the entire Outstanding Balance is repaid at the rate of ten
percent (10%) per annum, calculated daily and compounded
quarterly and be payable by the Borrower to the Lender on the first
day of each March, June, September and December, commencing on the
Transaction Closing Date and from time-to-time after maturity upon
the demand of the Lender. Following the occurrence and during the
continuance of an Event of Default, Borrower shall pay additional
interest on the Outstanding Balance in an amount equal to four
percent (4%) per annum, and the Outstanding Balance shall
continue to accrue interest at such additional interest rate from
the date of such Event of Default until the date such Event of
Default is cured or waived.
6. Guaranty and Collateral.
Simultaneously with the making of the Loan, the Borrower will
(i) cause the Guarantors to execute and deliver to the lender
a guaranty in the form attached hereto as Exhibit B (the “
Guaranty ”), (ii) cause TransAtlantic (Holdings)
Australia Pty. Ltd. to execute and deliver to the Lender a Security
Agreement in form and substance satisfactory to the Lender (the
“ Security Agreement ”) pursuant to
which
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TransAtlantic (Holdings) Australia Pty. Ltd.
will assign and convey to the Lender a first priority lien and
security interest in the Collateral (including without limitation,
all of the ordinary shares in the capital of TransAtlantic
Australia Pty. Ltd.) to secure the repayment of the Outstanding
Balance and any other obligation, indebtedness or liability of the
Borrower to the Lender, whether now existing or hereafter incurred,
and (iii) execute and deliver, or cause to be executed and
delivered, any other ancillary documentation that the Lender or its
counsel may reasonably require. In the event the Lender at any time
deems itself to be insecure, the Borrower shall provide such
additional security as the Lender shall reasonably
require.
7. Conditions
Precedent.
(a) Conditions Precedent to
Execution of Agreement. As conditions precedent to the
Lender’s execution of this Agreement:
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(i)
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the Borrower
will have:
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(A) executed and delivered or caused
to be executed and delivered all of the documents referred to in
paragraph 6 above and the documents, securities and instruments
referred to herein or therein and the Lender will have completed
all registrations and other filings that may be prudent or
necessary to perfect the Lender’s interest
therein;
(B) delivered a certified copy of
its directors’ resolutions authorizing the borrowing
contemplated by this Agreement, the grant of the Collateral and the
execution and delivery of this Agreement and all agreements,
documents and instruments referred to herein, together with an
officer’s certificate, certifying certain factual matters, in
form and terms satisfactory to the Lender;
(C) delivered a certified copy of a
resolution of the directors of the Guarantor authorizing the
guarantee of the Loan and the execution and delivery of all
agreements, documents and instruments applicable thereto, together
with an officer’s certificate, certifying certain factual
matters, in form and terms satisfactory to the Lender;
(D) caused to be executed and
delivered a legal opinion of counsel to the Borrower, in form and
terms satisfactory to the Lender and its counsel; and
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(ii)
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the
representations and warranties of the Borrower contained in
paragraph 8 will be true and correct in all material respects and
the Borrower will have complied with all covenants required to be
complied with by it under this Agreement and all other documents
delivered hereunder, prior to the making of the Loan by the
Lender;
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(iii)
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the Lender will
have completed and, in its sole and absolute discretion, be
satisfied with its due diligence review of the Borrower and the
Guarantor and their respective properties and assets and will have
received the approval of the Lender’s board of directors;
and
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(iv)
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the Lender
will, in its sole and absolute discretion, be satisfied as to the
creditworthiness of the Borrower and its Subsidiaries and the
adequacy of the Collateral contemplated herein.
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(b) Condition Precedent to the
Making of the Loan. As a condition precedent to the making of
the Loan by the Lender, the Borrower will have provided the Lender
with written notice that all conditions (as set forth in Appendix B
to the Bidder’s Statement, as amended) to the Offer (as
defined in the Bidder’s Statement) have been satisfied or
waived and shall have satisfied the following conditions
precedent:
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(i)
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the Borrower
will have executed and delivered or caused to be executed and
delivered the Note and all of the documents referred to in
paragraph 6 above and the documents, securities and instruments
referred to herein or therein and the Lender will have completed
all registrations and other filings that may be prudent or
necessary to perfect the Lender’s interest
therein;
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(ii)
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The Borrower
will have received and provided the Lender with written evidence of
the approval of the Offer by the holders of at least 75% of the
outstanding Incremental Shares;
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(iii)
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the
representations and warranties of the Borrower contained in
paragraph 8 will be true and correct in all material respects and
the Borrower will have complied with all covenants required to be
complied with by it under this Agreement and all other documents
delivered hereunder, prior to the making of the Loan by the Lender;
and
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(iv)
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there shall
have been no adverse material change in the business, operations,
assets or ownership of the Borrower since December 31,
2007.
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If the foregoing conditions
precedent are not satisfied or waived by the Lender in writing on
or before the Commitment Termination Date, Lender’s
commitment to make the Loan shall be automatically terminated on
such date and effective as of the Commitment Termination Date this
Agreement will terminate, and the Lender will be under no further
obligation to the Borrower in connection with the transactions
contemplated herein.
8. Representations and Warranties
of the Borrower. The Borrower represents and warrants to the
Lender as follows:
(a) the Borrower exists as a
corporation under the laws of the Province of Alberta, and has not
discontinued or been dissolved under any applicable laws and is in
good standing with respect to the filing of annual reports and all
other such requirements pursuant to the laws thereof;
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(b) the Guarantors exist as
corporations or other entities under the laws of the jurisdiction
of their incorporation or organization, and have not discontinued
or been dissolved under any applicable laws and are in good
standing with respect to the filing of annual reports and all other
such requirements pursuant to the laws thereof;
(c) the Borrower and each Guarantor
has the power and authority to (i) carry on its businesses as
now being conducted and is licensed or registered or otherwise
qualified in all jurisdictions wherein the nature of its assets or
the business transacted by it makes such licensing, registration or
qualification necessary, (ii) acquire, own, hold, lease and
mortgage or grant security in its assets including real property
and personal property and (iii) enter into and perform its
obligations under this Agreement and all other documents or
instruments delivered hereunder;
(d) this Agreement and all ancillary
instruments or documents issued, executed and delivered hereunder
by the Borrower or the Guarantors, as applicable, have been duly
authorized by all necessary action of the Borrower and the
Guarantors, as applicable, and each constitutes or will constitute
a legal, valid and binding obligation of the Borrower or the
Guarantors, as applicable, enforceable against the Borrower or the
Guarantors, as applicable, in accordance with their terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the rights and remedies of
creditors and to the general principles of equity;
(e) neither the Borrower nor any
Subsidiary is in breach of or in default under any obligation in
respect of borrowed money, and the execution and delivery of this
Agreement and all ancillary instruments or documents issued and
delivered hereunder or thereunder, and the performance of the terms
hereof and thereof will not be, or result in, a violation or breach
of, or default under, the Borrower’s or any
Subsidiary’s constating documents, any law, judgment,
agreement or instrument to which they are a party or may be
bound;
(f) execution, delivery and
performance of this Agreement and all other documents and
instruments contemplated hereby, including the documents to be
entered into pursuant to paragraph 6 of this Agreement, will not
constitute a breach or default under or in respect of any agreement
to which the Borrower or the Guarantors is bound, and no consent,
filing, authorization, approval or other action (including the
granting of a lien or security interest to any other person or
entity) is prudent or necessary under the terms of any such
agreement to proceed with the transactions contemplated
herein;
(g) the documents and instruments to
be executed and delivered pursuant to paragraph 6 will create a
valid first perfected, lien and security interest on the Collateral
subject to no other lien or encumbrance;
(h) no litigation or administrative
proceedings before any court or governmental authority are
presently ongoing, or have been threatened in writing, or to the
best of the Borrower’s knowledge are pending, against the
Borrower, any Subsidiary or any of their respective properties or
assets or affecting any of their respective properties or assets
which could have a material adverse effect on their respective
business, properties or assets;
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(i) the Borrower and each
Subsidiary, as the case may be, is the legal and beneficial owner
of the interests in the properties, business and assets referred to
in the information circulars, prospectuses, annual information
forms, offering memoranda, financial statements, material change
reports and news releases filed with the Exchange and the
securities regulatory authority or commission in each of the
jurisdictions in which the Borrower is a reporting issuer on or
during the twelve (12) months preceding the date hereof, and
any other disclosure materials provided to the Lender and its
advisers in conjunction with this transaction (collectively, the
“ Disclosure Record ”), as being owned by the
Borrower or such Subsidiary and has a valid right to acquire all
interests in properties, business and assets referred to in the
Disclosure Record as being subject to options or other rights to
acquire the same, and any and all agreements pursuant to which the
Borrower and each Subsidiary, as the case may be, holds or will
hold any such interests, options or rights in property, business or
assets are in good standing in all material respects under the
applicable statutes and regulations of the jurisdictions in which
they are situated;
(j) except as disclosed to the
Lender in writing prior to the date of this Agreement, there has
been no material adverse change (actual, contemplated or
threatened) in the property, assets, business or operations of the
Borrower or any Subsidiary within the past twelve (12) months,
except as disclosed in the Disclosure Record and there has been no
such material adverse change since December 31,
2007;
(k) the Disclosure Record is
complete and accurate in all material respects and omits no facts,
the omission of which makes the Disclosure Record, or any
particulars therein, misleading, misrepresentative or incorrect in
any material respect;
(l) the Borrower and to the best of
the Borrower’s knowledge each Subsidiary, has conducted and
is conducting its businesses in material compliance with all
applicable laws, bylaws, rules and regulations of each jurisdiction
in which its businesses are now carried on and hold all licenses,
registrations, permits, consents or qualifications (whether
governmental, regulatory or otherwise) required in order to enable
its businesses to be carried on as now conducted or as proposed to
be conducted, and all such licenses, registrations, permits,
consents and qualifications are valid and subsisting and in good
standing and neither the Borrower nor any Subsidiary has received
any notice of proceedings relating to the revocation or
modification of any such licenses, registrations, permits, consents
or qualifications which, if the subject of an unfavourable
decision, ruling or finding, would materially adversely affect the
condition of such businesses, operations, condition (financial or
otherwise) or income of the Borrower or any such Subsidiary, as the
case may be;
(m) no order ceasing or suspending
trading in securities of the Borrower or prohibiting the sale or
trading of securities by the Borrower has been issued and no
proceedings for this purpose have been instituted, are pending,
contemplated or threatened;
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(n) neither the Canada Revenue
Agency nor any other taxation authority has asserted or, to the
best of the Borrower’s knowledge, has threatened to assert
any assessment, claim or liability for taxes due or to become due
in connection with any review or examination of the tax returns of
the Borrower or any Subsidiary filed for any year which would have
material adverse effect on the assets, properties, business,
results of operations, prospects or condition (financial or
otherwise) of the Borrower or any Subsidiary;
(o) neither the Borrower nor any
Subsidiary is a party to any material contract other than as
disclosed in the Disclosure Record;
(p) except for the Guarantors,
TransAtlantic Petroleum (USA), Corp., TransAtlantic Maroc, Ltd.,
Viking Geophysical Services, Ltd., TransAtlantic Turkey, Ltd.,
TransAtlantic Petroleum Cyprus Limited, and TransAtlantic Worldwide
Romania SRL, the Borrower has (i) no direct or indirect
Subsidiaries, and (ii) no investments in any corporation,
limited liability company or other entity except as disclosed in
the Disclosure Record;
(q) except as disclosed to the
Lender in writing prior to the date of this Agreement, the Borrower
and each Subsidiary owns its business, operations and assets, as
more particularly described in the Disclosure Record, and holds
good title thereto, free and clear of all liens, claims or
encumbrances whatsoever;
(r) all factual information
previously or contemporaneously furnished to the Lender by or on
behalf of the Borrower for purposes of or in connection with this
Agreement or any transaction contemplated hereby, is true and
accurate in every material respect and such information is not
incomplete by the omission of any material fact necessary to make
such information not misleading;
(s) the Borrower and each Subsidiary
are generally able to pay their debts as they come due;
(t) the registered
office of the Borrower is located at Suite 3700, 400 –
3 rd Ave. S.W., Calgary, Alberta,
T2P 4H2; the chief executive office, principal place of business
and place where the Borrower keeps its books and records is located
at Suite 1840, 444 – 5 th Ave. S.W., Calgary, Alberta T2P
2T8 and the Borrower has conducted substantially all the
negotiations regarding the subject matter of this Agreement from
offices located at Suite 1755, 5910 N. Central Expressway, Dallas,
Texas 75206; and
(u) the chief executive office,
principal place of business and place where the Guarantor keeps its
books and records is located at Suite 1755, 5910 N. Central
Expressway, Dallas, Texas 75206.
9. Affirmative Covenants of the
Borrower. The Borrower covenants and agrees that so long as any
monies will be outstanding under this Agreement, it shall, and
shall cause each Guarantor to:
(a) at all times maintain its
existence and the existence of all of its Subsidiaries;
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(b) duly perform its obligations
under this Agreement, all other agreements and instruments executed
and delivered hereunder or thereunder;
(c) promptly pay when due all agency
or finders’ fees payable in connection with the Loan or this
Agreement and indemnify and save harmless the Lender from all
claims in respect of any such fees;
(d) carry on and conduct its
business in a proper business-like manner in accordance with good
business practice and will keep or cause to be kept proper books of
account in accordance with generally accepted accounting
principles;
(e) at all times comply with all
applicable laws, except such voluntary non-compliance as shall, in
its good faith business judgment, not have a material adverse
effect on the business of the Borrower or any Subsidiary, taken as
a whole;
(f) at all times maintain any
material contracts in good standing and fulfill all obligations
thereunder, and immediately notify the Lender of any facts or
circumstances which may arise which could constitute a default
thereunder and give rise to a right of termination under either
such agreement, and take all steps as may be prudent or necessary
to rectify or cure any such default;
(g) provide the Lender with not less
than thirty (30) days notice of the expiry or termination of
any material contracts, concessions, options, rights or other
benefits held by or available to the Borrower or any of its
Subsidiaries;
(h) pay and discharge promptly when
due, all taxes, assessments and other governmental charges or
levies imposed upon it or upon its properties or assets or upon any
part thereof, as well as all claims of any kind (including claims
for labour, materials and supplies) which, if unpaid, would by law
become a lien, charge, trust or other claims upon any such
properties or assets; provided, however, that the Borrower and the
Guarantor shall not be required to pay any such tax, assessment,
charge or levy or claim if the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate
proceedings and if the Borrower or the Guarantors, as applicable,
shall have set aside on its books the reserve the extent required
by generally accepted accounting principles in an amount which is
reasonably adequate with respect thereto;
(i) promptly furnish and give to the
Lender such reports, certificates, financial statements, and such
other information with respect to the Borrower or any Subsidiary as
the Lender may reasonably request from time to time during the term
of this Agreement;
(j) provide the Lender with written
notice of any proposed financing made by or to the Borrower or the
Guarantors concurrently with, but not prior to, public disclosure
of such financing;
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(k) furnish and give to the Lender
(if such is the case) notice that an Event of Default has occurred
and, if applicable, is continuing or notice in respect of any event
which would constitute an Event of Default hereunder and specifying
the nature of same; and
(l) perform and do all such acts and
things as are necessary to perfect and maintain the security
provided to the Lender pursuant to this Agreement.
10. Negative Covenants of the
Borrower. The Borrower covenants and agrees with the Lender
that the Borrower will not, and it will not permit any Subsidiary
to, without first obtaining the written consent of the Lender
(which consent the Lender will be free to withhold in its sole and
absolute discretion):
(a) make, give, create or permit or
attempt to make, give or create any mortgage, charge, lien or
encumbrance over any assets of the Borrower or any Subsidiary,
other than any such as are contemplated hereunder;
(b) change the name of the Borrower
or any Subsidiary;
(c) allot and issue any new shares
of any Subsidiary;
(d) in respect of itself or any
Subsidiary, declare or provide for any dividends or other payments
or distributions (whether in cash, assets or indebtedness) based on
share capital;
(e) redeem or purchase any of its
shares or the shares of any Subsidiary;
(f) make or permit any sale of or
disposition of any substantial or material part of its business,
assets or undertaking, or that of any Subsidiary, including its
interest in the shares or assets of any Subsidiary outside of the
ordinary course of business;
(g) save and except for purchase
money security interests and equipment leases entered into in the
ordinary course of business, borrow or cause or permit any
Subsidiary to borrow money from any person other than the Lender
without first obtaining and delivering to the Lender a duly signed
assignment and postponement of claim by such person in favour of
the Lender, in form and terms satisfactory to the
Lender;
(h) in respect of itself or any
Subsidiary, pay out or permit the payment out of any shareholders
loans or other indebtedness to non-arm’s length parties;
or
(i) in respect of itself or any
Subsidiary, guarantee or permit the guarantee of the obligations of
any other person, directly or indirectly.
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11. Events of Default. Each
and every of the events set forth in this paragraph will be an
event of default (“ Event of Default
”):
(a) if the Borrower fails to make
any payment of principal or interest when due hereunder, and such
failure continues for two (2) Business Days;
(b) if the Borrower or any
Subsidiary defaults in observing or performing any term, covenant
or condition of this Agreement, the security documents contemplated
by paragraph 6 or any other collateral document delivered hereunder
or in connection herewith, other than the payment of monies as
provided for in subparagraph (a) hereof, on its part to be
observed or performed and such failure continues for five
(5) Business Days;
(c) if any of the Borrower’s
or any Subsidiary’s representations, warranties or other
statements in this Agreement or any other collateral document
delivered hereunder or in connection with the Loan were at the time
given false or misleading in any material respect;
(d) if the Borrower or any
Subsidiary, either directly or indirectly through any Subsidiary,
ceases or threatens to cease to carry on business;
(e) if any order is made or issued
by a competent regulatory authority prohibiting the trading in
shares of the Borrower or any successor thereof, or if the
Borrower’s common shares are suspended or de-listed from
trading on any stock exchange;
(f) if, in the reasonable opinion of
the Lender, an adverse material change occurs in the financial
condition of the Borrower, or any Guarantor;
(g) if the Lender in good faith and
on commercially reasonable grounds believes that the ability of the
Borrower to pay any of the Outstanding Balance
