THE CODE HAS RECEIVED A FAVOURABLE DETERMINATION LETTER FROM THE IRS OR AN
APPLICATION FOR SUCH A LETTER IS CURRENTLY BEING OR WILL BE PROCESSED BY THE IRS
WITH RESPECT THERETO AND SUCH APPLICATION IS OR WILL BE WITHIN A REMEDIAL
AMENDMENT PERIOD AND, TO THE GUARANTOR'S KNOWLEDGE, NOTHING HAS OCCURRED WHICH
WOULD PREVENT, OR CAUSE THE LOSS OF, SUCH QUALIFICATION WHICH IS NOT CORRECTABLE
WITHOUT COST OR AT A COST THAT IS IMMATERIAL.
THE GUARANTOR AND EACH ERISA
AFFILIATE HAVE MADE ALL REQUIRED CONTRIBUTIONS TO EACH PLAN SUBJECT TO
SECTION 412 OF THE CODE, AND NO APPLICATION FOR A FUNDING WAIVER OR AN EXTENSION
OF ANY AMORTIZATION PERIOD PURSUANT TO SECTION 412 OF THE CODE HAS BEEN MADE
WITH RESPECT TO ANY PLAN.
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(B)
THERE ARE NO PENDING OR, TO THE GUARANTOR'S
KNOWLEDGE, THREATENED CLAIMS, ACTIONS OR LAWSUITS, OR ACTION BY ANY GOVERNMENTAL
BODY, WITH RESPECT TO ANY PLAN THAT COULD BE REASONABLY EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.
THERE HAS BEEN NO PROHIBITED TRANSACTION OR VIOLATION
OF THE FIDUCIARY RESPONSIBILITY RULES WITH RESPECT TO ANY PLAN THAT HAS RESULTED
OR COULD BE REASONABLY EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.
(C)
(1)
EXCEPT AS SPECIFICALLY DISCLOSED IN
ANNEXURE I TO SCHEDULE B NO ERISA EVENT HAS OCCURRED WITHIN THE PAST 12 YEARS OR
IS REASONABLY EXPECTED TO OCCUR;
(2)
EXCEPT AS SPECIFICALLY DISCLOSED IN
SCHEDULE B, NO PENSION PLAN HAS ANY UNFUNDED PENSION LIABILITY;
(3)
NEITHER THE GUARANTOR NOR ANY ERISA
AFFILIATE HAS INCURRED, OR REASONABLY EXPECTS TO INCUR, ANY LIABILITY UNDER
TITLE IV OF ERISA, WITH RESPECT TO ANY PENSION PLAN (OTHER THAN PREMIUMS DUE AND
NOT DELINQUENT UNDER SECTION 4007 OF ERISA);
(4)
NEITHER THE GUARANTOR NOR ANY ERISA
AFFILIATE HAS INCURRED, OR REASONABLY EXPECTS TO INCUR, ANY LIABILITY (AND NO
EVENT HAS OCCURRED WHICH, WITH THE GIVING OF NOTICE UNDER SECTION 4219 OF ERISA,
COULD BE REASONABLY EXPECTED TO RESULT IN SUCH LIABILITY) UNDER SECTION 4201 OR
4243 OF ERISA WITH RESPECT TO A MULTIEMPLOYER PLAN; AND
(5)
NEITHER THE GUARANTOR NOR ANY ERISA
AFFILIATE HAS ENGAGED IN A TRANSACTION THAT COULD BE SUBJECT TO SECTION 4069 OR
4212(C) OF ERISA.
3.
THE CREDIT FACILITY
3.1
ESTABLISHMENT OF THE CREDIT FACILITY
Relying on each of the representations and warranties set out in Section 2 and
subject to the terms and conditions set forth herein, Royal agrees to make
available to the Borrower:
(A)
A COMMITTED, REVOLVING CREDIT FACILITY IN
THE PRINCIPAL AMOUNT OF UP TO THE LESSER OF:
(1)
$10,000,000, OR THE EQUIVALENT AMOUNT IN
U.S. FUNDS; OR
(2)
THE AMOUNT OF THE COLLATERAL VALUE OF THE
BORROWING BASE; AND
(B)
AT ROYAL'S DISCRETION, ON AN UNCOMMITTED
BASIS, LINES OF CREDIT IN THE AGGREGATE PRINCIPAL AMOUNT OF UP TO $50,000,000 TO
COVER SWAP TERMINATION VALUES AND LIABILITIES OF THE BORROWER OR, WITH THE
CONSENT OF ROYAL, ANY OF ITS SUBSIDIARIES IN RESPECT OF EFT TRANSFERS AND PDS
SERVICES INCLUDING OVERDRAFTS AND CASH MANAGEMENT DEBTS AND LIABILITIES,
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to be used