West Fraser(WFG) - 2023 Q4 - Annual Report

ARTICLE 1 INTERPRETATION Defined Terms This section defines key terms in the credit agreement, covering loan types, interest rates, fees, default events, legal entities, and accounting principles for unified understanding - Key terms defined in the credit agreement include | Term | Definition Summary | | :--- | :--- | | Adjusted Daily Simple SOFR | Daily Simple SOFR plus Daily Simple SOFR Adjustment, deemed the Floor if lower | | Adjusted Term SOFR | Term SOFR plus Term SOFR Adjustment, deemed the Floor if lower | | Advance | Funds advanced by a Lender, including Prime Rate Advance, NY Prime Rate Advance, US Base Rate Advance, Term SOFR Advance, and Daily Simple SOFR Advance | | Applicable Margin | Corresponding margins and fees for Advances, Bankers' Acceptance stamping fees, Letter of Credit fees, and Standby Fees, determined by S&P and Moody's credit ratings | | Asset Disposition | Sale, lease, transfer, or disposition of property or assets by WFT or its Restricted Subsidiaries, excluding mortgages and leases not constituting dispositions under GAAP | | Bankers' Acceptance | Non-interest bearing bill of exchange drawn by WFT and accepted by a Canadian Lender, denominated in Canadian Dollars | | Borrowers | WEST FRASER TIMBER CO. LTD. (WFT) and WEST FRASER (USA), INC. (WFUS) | | Business Day | Any day other than a Saturday, Sunday, or a day on which major commercial banks are closed, with specific definitions varying by loan type and currency | | Canadian Lender Revolver Commitment | The amount of the revolving credit commitment provided by Canadian Lenders to WFT | | Capital Lease Obligations | Obligations for rent or other payments under capital leases as determined by GAAP | | Cash Equivalents | Government securities maturing within 365 days, commercial paper (with specific ratings) maturing within 180 days, and certificates of deposit or Bankers' Acceptances (from specific bank sizes and ratings) maturing within 365 days | | Category 1 Subordinated Debt | Subordinated Debt with specific maturity dates, payment restrictions, and subordination terms | | Category 2 Subordinated Debt | Subordinated Debt with all characteristics of Category 1 Subordinated Debt, but its holders cannot take enforcement action until all Senior Debt is fully repaid | | CDOR Rate | The annual discount rate for Canadian Bankers' Acceptances, deemed the Floor if lower | | Change of Control | Any Person or group of Persons acting in concert acquiring more than 50% of the voting shares of WFT | | Change of Law | The adoption or change of any Law, or the issuance of any requirement, rule, guideline, or directive by a Governmental Authority after the date of the Agreement, including the Dodd-Frank Act and Basel III related regulations | | Commitment | The total principal amount of financing a Lender is committed to provide to a Borrower under the Credit Agreement | | Conforming Changes | Administrative or operational adjustments made to reflect the adoption and implementation of a Benchmark Rate (such as Term SOFR, Daily Simple SOFR, or a Benchmark Replacement) | | Consolidated Indebtedness | The consolidated Indebtedness of WFT and its Restricted Subsidiaries, excluding Category 1 and Category 2 Subordinated Debt | | Consolidated Net Income | The consolidated net income of WFT and its Restricted Subsidiaries for a specified period | | Consolidated Net Tangible Assets | The consolidated total assets of WFT and its Subsidiaries less all consolidated current liabilities (excluding the current portion of Indebtedness), all goodwill, trademarks, patents, unamortized debt discount and expense, and other similar intangible assets | | Consolidated Shareholders' Equity | The consolidated shareholders' equity of WFT and its Restricted Subsidiaries | | Control | The power to direct or cause the direction of the management or policies of a Person, directly or indirectly | | Conversion | Changing the method of calculating interest or fees, or the currency of a loan or advance | | Core Business | The forest products business, including timberlands, lumber, panels, pulp, paper, wood chips, energy, and ancillary or complementary businesses, currently or hereafter conducted by WFT and its Restricted Subsidiaries | | Credit Facilities | The Revolver Facility and the Term Facility | | Credit Rating | The credit rating of WFT's senior unsecured debt by S&P and Moody's | | Daily Simple SOFR | The Secured Overnight Financing Rate as published by the SOFR Administrator | | Default | An event that, with notice or passage of time, would constitute an Event of Default | | EBITDA | Consolidated Net Income for a specified period, plus interest expense, depreciation, amortization, non-cash items, extraordinary losses, foreign exchange losses, fair value losses on financial instruments, minus extraordinary gains, foreign exchange gains, and fair value gains on financial instruments | | Event of Default | Any event listed in Section 9.1 | | Excluded Taxes | Net income or capital taxes imposed on an Agent or Lender by reason of its jurisdiction of organization, principal office, or lending office, and US federal withholding taxes under FATCA | | Face Amount | The amount payable at maturity of a Bankers' Acceptance or the maximum amount payable under a Letter of Credit | | FATCA | Sections 1471 through 1474 of the US Internal Revenue Code and related regulations | | Floor | 0.00% per annum | | Foreign Lender | A Lender not organized under the laws of Canada or the US, and not a tax resident of Canada or the US | | Fronted Letter of Credit | A Letter of Credit issued by a Fronting Lender | | GAAP | Generally Accepted Accounting Principles in Canada or IFRS | | Guarantee | A Person's guarantee of any Indebtedness, dividends, or other financial obligations of any other Person | | Hazardous Materials | Oil, flammables, explosives, radioactive materials, hazardous wastes or substances, etc., that pose a hazard to real property, the environment, or individuals, or violate Laws | | Hedge Agreement | A commodity swap agreement, interest rate swap agreement, or foreign exchange swap agreement | | Indebtedness | Borrowings, deferred purchase price, Capital Lease Obligations, outstanding Letter of Credit Face Amounts, Lien-secured Indebtedness, Hedge Agreement termination liabilities, redemption obligations for redeemable securities, and Guarantees of any of the foregoing | | Interest Expense | Consolidated interest on Indebtedness or financing expenses calculated according to GAAP, including commitment fees, standby fees, stamping fees, etc | | Interest Period | The term for a Term SOFR Loan, typically one, three, or six months | | Investment | Direct or indirect investment in any Person in cash or property | | Law | Any law, constitution, statute, order, treaty, regulation, or rule of any Governmental Authority | | Lenders | Canadian Lenders, US Lenders, and Term Lenders | | Letter of Credit Fee | Fees payable for the issuance of Letters of Credit | | Lien | Any mortgage, pledge, lien, security interest, or other encumbrance | | Majority Lenders | Lenders whose aggregate Commitments represent at least 50.1% of the total Commitments of all Lenders | | Material Adverse Effect | A material adverse change in the assets, property, operations, financial condition, business, or prospects of WFT and its Restricted Subsidiaries, or a material impairment of WFT's or WFUS's ability to perform its obligations | | NY Prime Rate | The higher of the reference rate for commercial loans published by the US Agent and the Federal Funds Rate plus 100 basis points | | Obligations | All principal, interest, fees, expenses, costs, indemnities, and other amounts payable under the Credit Agreement | | Other Taxes | Stamp, documentary, or other excise or property taxes arising from payments under or the execution, delivery, or enforcement of this Agreement or any other Credit Document | | Permitted Liens | Liens imposed by Law, tax liens, workers' compensation liens, utility security interests, governmental franchises, easements, minor title defects, litigation-related liens, inter-subsidiary debt liens, bank liens, contractual set-off rights, and other liens not exceeding 5% of Consolidated Net Tangible Assets | | Permitted Subsidiary Unsecured Indebtedness | Indebtedness of a Restricted Subsidiary of WFT to itself or another wholly-owned Restricted Subsidiary, and unsecured Indebtedness of Norbord Europe Limited and Norbord Panels USA Inc. within specific limits, and Guarantees by Subsidiaries of WFT's or WFUS's obligations under this Agreement | | Principal Outstanding | The total principal amount of all Advances, Bankers' Acceptances, and other financing provided by Lenders | | Revolver Facility | A revolving credit facility with a maximum principal amount of $1 billion (expandable to $1.15 billion) | | Revolver Maturity Date | The fifth anniversary of the Closing Date | | Rollover | The re-issuance of a Bankers' Acceptance or the continuation of a Term SOFR Loan | | SOFR | The Secured Overnight Financing Rate administered by the SOFR Administrator | | Standby Fees | Fees paid by WFT to Canadian Lenders and US Lenders for the unused portion of the Revolver Facility | | Subordinated Debt | Unsecured Indebtedness issued by a WF Party under a Subordinated Debt indenture or agreement, whose repayment rights are subordinated to all Senior Debt | | Subsidiary | Any corporation, limited partnership, or other entity where more than 50% of the voting power is controlled by a Person | | Swingline Advances | Daily operating capital loans obtained by WFT and WFUS under the Revolver Facility | | Taxes | All existing or future taxes, levies, imposts, duties, withholdings, assessments, fees, or other charges imposed by any Governmental Authority | | Term Facility | A non-revolving term loan facility with a maximum principal amount of $200 million | | Term Maturity Date | The second anniversary of the Closing Date | | Term SOFR | A forward-looking term rate based on SOFR | | Total Capitalization | The sum of Consolidated Shareholders' Equity, Consolidated Indebtedness, and Category 2 Subordinated Debt | | Unrestricted Subsidiary | A Subsidiary designated by WFT as unrestricted pursuant to Section 1.7 | | US Agent | Toronto Dominion (Texas) LLC as administrative agent for the US Lenders | | US Base Rate | The highest of the reference rate for US dollar loans published by TD Bank, the Federal Funds Rate plus 1.00%, and Adjusted Term SOFR plus 1.00% | | US Lender Revolver Commitment | The amount of the revolving credit commitment provided by US Lenders to WFUS | | WFT Swingline Commitment | WFT's Swingline commitment, up to $50 million | | WFUS Swingline Commitment | WFUS's Swingline commitment, up to $15 million | Computation of Time This section specifies that notice periods include the day notice is given but exclude the day of the specified action, with the earlier of Toronto and New York time governing USD loan notices or payments - Notice periods include the day notice is given but exclude the day of the specified action; for USD loan notices or payments, the earlier of Toronto and New York time applies[71] Accounting Terms This section clarifies that all accounting terms, unless otherwise defined or agreed, are interpreted according to GAAP (consistently applied from January 1, 2021), and consolidated financial statements exclude unrestricted subsidiaries - Accounting terms are interpreted according to GAAP (consistently applied from January 1, 2021); consolidated financial statements exclude unrestricted subsidiaries[75] Gender; Singular, Plural, etc. This section stipulates that in the agreement, all genders are included, and singular includes plural and vice versa, depending on the context - Gender, singular, and plural are interchangeable based on context within the agreement[73] Use of Inclusive Words This section clarifies that words like 'including' and 'comprising' are not restrictive but refer to all other items or matters that may reasonably fall within the broadest scope of a general term or statement - Words like 'including' and 'comprising' are to be broadly construed, not limited to the specific matters immediately following[74] Successors, etc. This section specifies that references to corporate entities include successors, statutes include subordinate orders and amendments, and agreements or documents include their revised, supplemented, or restated versions - References to corporations, statutes, and documents in the agreement include their successors, revisions, or supplements[76][77] Designation of Subsidiaries WFT may designate subsidiaries (excluding WF Mills, WFUS, or Norbord) as unrestricted or restricted, requiring written notice and certification to agents that the designation avoids default and meets financial covenants on a pro forma basis - WFT may designate subsidiaries as unrestricted or restricted, provided no default occurs or results, and pro forma financial covenants are met[78][80] Interpretation not Affected by Headings This section states that the division into articles and headings of the agreement are for convenience only and do not affect its construction or interpretation - The agreement's article divisions and headings are for reference only and do not affect its interpretation[78] General Provisions as to Certificates and Opinions This section stipulates that the truth and accuracy of facts and good faith determination of opinions in certificates are prerequisites for borrower-requested actions by agents or lenders, and any certificate signed by a borrower is deemed a representation and warranty of its truth, accuracy, and completeness - The truth and accuracy of certificates are prerequisites for lender action, and a borrower's signed certificate is deemed a warranty of the facts' truth, accuracy, and completeness[79] Incorporation of Appendix and Schedules This section clarifies that the agreement's appendices and schedules, including lender commitments, borrowing notices, repayment/cancellation notices, compliance certificates, material subsidiaries, assignment agreements, POA letters of credit, and powers of attorney, form an integral part of this agreement - Appendices and schedules, including lender commitments, borrowing/repayment notices, compliance certificates, material subsidiaries, assignment agreements, POA letters of credit, and powers of attorney, are integral parts of this agreement[80][81][83] Transition from Existing Credit Agreement This section outlines that upon meeting Section 6.1 conditions, existing credit agreement's fronted letters of credit automatically convert to this agreement's revolving facility, other financing remains effective, LIBOR loans are replaced by SOFR loans, and unexpired LIBOR loans continue at existing rates until maturity or conversion - Transition from existing credit agreement[83] - All existing fronted letters of credit automatically convert to the revolving credit facility under this agreement - Other financing remains effective - LIBOR loans are no longer available and are replaced by SOFR loans - For LIBOR loans not maturing on the closing date, interest continues to be calculated under the existing agreement, and they are repaid or converted to other loan types upon maturity Joint and Several Liability This section clarifies that each borrower is jointly and severally liable for the other's obligations under this agreement, unconditionally guaranteeing repayment, and a default by one is considered a default by the other - Each borrower is jointly and severally liable for the other's obligations and provides an unconditional guarantee; a default by one is considered a default by the other[82] ARTICLE 2 CREDIT FACILITIES Credit Facilities This section describes two credit facilities: a revolving facility up to $1 billion (expandable to $1.15 billion) for borrowers from Canadian and US lenders, and a non-revolving term facility up to $200 million for WFT from term lenders Credit Facilities Overview | Credit Facility | Type | Maximum Amount | Borrowers | Lenders | | :--- | :--- | :--- | :--- | :--- | | Revolver Facility | Revolving | $1 billion (expandable to $1.15 billion) | WFT and WFUS | Canadian Lenders and US Lenders | | Term Facility | Non-revolving | $200 million | WFT | Term Lenders | Accordion Borrowers can increase the revolving credit facility from $1 billion to $1.15 billion by notice, but existing lenders are not obligated to increase commitments; new lenders require approval from agents and lead lenders - The revolving credit facility can increase from $1 billion to $1.15 billion, requiring borrowers to arrange commitments, and new lenders need approval[85] Purpose The revolving credit facility is for general corporate purposes, explicitly excluding hostile takeover bids - The revolving credit facility is for general corporate purposes, but hostile takeover bids are prohibited[86] Availability The revolving credit facility is available from the closing date until the business day preceding the revolving maturity date, while the term facility was fully drawn before the closing date and is no longer available for drawing - Revolving Credit Facility: Available from the closing date until the business day preceding the revolving maturity date[87] - Term Facility: Fully drawn before the closing date, no longer available for drawing[89] Lenders' Commitments Each lender provides financing proportionally to its commitment in the respective credit facility, with details in Appendix A, and no lender's total financing may exceed its commitment - Each lender provides financing proportionally, not exceeding its commitment, with details in Appendix A[90][91] Lending Offices Financing for WFT is provided through Canadian lending offices of Canadian or term lenders, while financing for WFUS is provided through US lending offices of US lenders - WFT's financing is through Canadian offices, and WFUS's financing is through US offices[92] Revolving/Non-Revolving Nature of Credit Facilities The revolving credit facility is revolving, allowing re-borrowing of repaid amounts up to the total commitment, while the non-revolving term facility's repayments (excluding rollovers and conversions) permanently reduce lender commitments and are not re-drawable - Revolving Credit Facility: Revolving in nature, repaid amounts can be re-borrowed[92] - Term Facility: Non-revolving in nature, repayments permanently reduce commitments and are not re-drawable[93] Revolver Facility Borrowing Options WFT can choose Prime Rate Advances, US Base Rate Advances, SOFR Advances, Bankers' Acceptances, or Letters of Credit up to $75 million, while WFUS can select NY Prime Rate Advances or SOFR Advances - WFT's revolving credit borrowing options[94][95][96] - Prime Rate Advances (Canadian Dollars) - US Base Rate Advances (US Dollars) - SOFR Advances (US Dollars) - Bankers' Acceptances (Canadian Dollars) - Letters of Credit (Canadian Dollars or US Dollars), up to $75 million - WFUS's revolving credit borrowing options[96] - NY Prime Rate Advances (US Dollars) - SOFR Advances (US Dollars) Term Facility Borrowing Options WFT can utilize the term facility through US Base Rate Advances or SOFR Advances - WFT's term loan borrowing options include US Base Rate Advances or SOFR Advances[97] Swingline Advances WFT Swingline Lender provides WFT with a revolving operating credit up to $50 million for daily corporate use, offering Prime Rate Advance (Cdn$) or US Base Rate Advance (US$), while WFUS Swingline Lender provides WFUS with up to $15 million for daily corporate use as NY Prime Rate Advance (US$) Swingline Advances Overview | Borrower | Swingline Lender | Commitment Amount | Loan Type | Purpose | | :--- | :--- | :--- | :--- | :--- | | WFT | WFT Swingline Lender | $50 million (or Cdn$ equivalent) | Prime Rate Advance (Cdn$) or US Base Rate Advance (US$) | Daily corporate purposes | | WFUS | WFUS Swingline Lender | $15 million | NY Prime Rate Advance (US$) | Daily corporate purposes | Available Amount of the Credit Facilities The available amount of credit facilities is determined in US dollars, with Canadian dollar borrowings converted to their US dollar equivalent, and repayments must be made in the currency of the original borrowing - Credit facility availability is in US dollars, Canadian dollar borrowings are converted to US dollar equivalents, and repayments must be in the original borrowing currency[101] Repayment of Revolver Facility Borrowers must repay all principal, accrued interest, fees, and other amounts under the revolving credit facility to the agents by the revolving maturity date, at which point Canadian and US lenders' commitments will be reduced to zero - Borrowers must repay all principal, interest, and fees by the revolving maturity date, and lender commitments will be reduced to zero[102] Repayment of Term Facility WFT must repay all outstanding principal, accrued interest, fees, and other amounts under the term facility to the agent by the term maturity date, at which point term lenders' commitments will be reduced to zero - WFT must repay all principal, interest, and fees by the term maturity date, and term lender commitments will be reduced to zero[103] Optional Repayment Borrowers may optionally repay all or part of any outstanding credit facility amount without penalty, bonus, or premium with three business days' notice; term facility repayments permanently reduce commitments, and Term SOFR loans and Bankers' Acceptances must be repaid on their respective maturity dates - Borrowers may optionally repay with three business days' notice, without penalty[104] - Term facility repayments permanently reduce commitments - Term SOFR loans and Bankers' Acceptances must be repaid on their maturity dates Optional Reduction of Commitments Borrowers may permanently and proportionally reduce unused lender commitments under applicable credit facilities without penalty with three business days' notice, with each partial reduction being at least $10 million and in integral multiples of $1 million - Borrowers may permanently reduce lender commitments with three business days' notice, with each reduction being at least $10 million and in integral multiples of $1 million, without penalty[105] Repayment of Principal Outstanding to Reflect Commitments If the outstanding principal (in US dollars) of any credit facility exceeds the total commitment, borrowers must immediately repay the excess amount upon agent request to ensure outstanding principal does not exceed the total commitment - If outstanding principal exceeds the total commitment, borrowers must immediately repay the excess[106] General Interest Provisions This section outlines general interest calculation and payment terms, including agents' preliminary evidentiary power for rates and amounts, daily accrual of all interest and sums, adherence to maximum legal rates, and specific annual interest calculation methods under the Canadian Interest Act - Agents' or US Agents' determination of interest rates and amounts serves as prima facie evidence[107] - All interest and amounts accrue daily, and rates shall not exceed the maximum legal limit allowed by law[108] - Under the Canadian Interest Act, SOFR-related annual interest is calculated on a 360-day basis, others on a 365-day basis, all as nominal rates without compounding principles[109] Payments WFT must pay in the relevant currency to the Canadian payment account by 2:00 PM Toronto time, and WFUS must pay in US dollars to the US payment account by 2:00 PM New York time; all principal, interest, and fees are proportionally allocated to lenders, same-currency payables and receivables can be offset, and all payments are without offset or counterclaim - WFT payments: By 2:00 PM Toronto time, in the corresponding currency, to the Canadian payment account[110] - WFUS payments: By 2:00 PM New York time, in US dollars, to the US payment account - All payments are proportionally allocated to lenders - Same-currency payables and receivables between borrowers and lenders may be offset - All payments are without offset or counterclaim Business Day Payments Unless otherwise specified, if a payment due date falls on a non-business day, payment is due on the next business day, with the extended time included in interest or fee calculations - Payments due on a non-business day are made on the next business day, with interest or fees calculated for the extended period[111] Interest on Overdue Amounts Any overdue principal, interest, fees, or other amounts will accrue interest at an annual rate of Prime Rate (Cdn$), Base Rate (WFT US$), or NY Prime Rate (WFUS US$) plus 2.0%, compounded monthly, and are payable on demand - Overdue amounts accrue interest at the applicable base rate plus 2.0% per annum, compounded monthly[112] Breakage Costs Borrowers must promptly pay lenders for losses, redeployment costs, or other expenses incurred due to early repayment of Term SOFR loans, untimely notices, unaccepted loans, or late payments, with the lender's certificate of compensation amount serving as prima facie evidence - Borrowers must compensate lenders for losses and expenses arising from[113][114] - Early repayment of Term SOFR loans - Failure to provide timely notice - Failure to accept or draw loans after issuing a borrowing notice - Failure to pay or prepay agents on time - The lender's certificate of compensation amount serves as prima facie evidence[113] Borrowers' Failure to Pay If borrowers fail to notify agents of non-payment, agents may assume payment and distribute funds to lenders; if borrowers actually fail to pay, lenders must repay distributed amounts plus interest to agents upon request - If borrowers fail to notify non-payment, agents may distribute funds; if borrowers actually fail to pay, lenders must repay distributed amounts plus interest[115] Application of Payments In the absence of a default event, all received payments are applied first to accrued interest and stamping fees, then to other due fees and expenses, then to outstanding principal and Bankers' Acceptance repayment obligations, and finally to other agreement obligations; after a default event, lenders may apply payments at their discretion - In the absence of a default event, payments are applied in the following order[116][117] - 1. Accrued unpaid interest and stamping fees - 2. Other due fees, costs, and expenses - 3. Outstanding principal of borrowings and Bankers' Acceptance repayment obligations - 4. Other agreement obligations - After a default event, lenders may apply payments at their discretion[116] Conditions Solely for the Benefit of the Lenders This section clarifies that all conditions for lenders to provide financing are solely for their benefit, no other party has the right to demand their satisfaction or be deemed a beneficiary, and lenders may waive these conditions in whole or in part at any time - All conditions for lenders to provide financing are solely for their benefit; other parties have no right to demand satisfaction or benefit, and lenders may waive them at any time[117] No Waiver This section stipulates that providing financing despite unmet conditions does not constitute a waiver by lenders, who retain the right to demand satisfaction of all conditions before subsequent financing - Providing financing despite unmet conditions does not waive lender rights; lenders retain the right to demand satisfaction of conditions for subsequent financing[118] Authorized Debit Each borrower authorizes the agent to debit their accounts for principal, interest, stamping fees, standby fees, letter of credit fees, and other amounts payable under this agreement - Borrowers authorize the agent to debit their accounts for all fees and principal payable under this agreement[119] Payment to Agent or US Agent Borrowers' obligation to pay lenders is deemed fulfilled once payments are made to the agent (for WFT's obligations) or the US agent (for WFUS's obligations) - Borrowers' payment obligations to lenders are fulfilled upon payment to the agent (for WFT) or US agent (for WFUS)[120] Standby Fees WFT must pay standby fees to Canadian and US lenders on the fifth business day of the month following each quarter-end and on the revolving maturity date, calculated daily at the applicable annual rate on the difference between unused revolving commitments and outstanding principal, with Canadian dollar principal converted to US dollar equivalent - WFT pays standby fees to Canadian and US Lenders[121][122] - Payment frequency: Fifth business day of the month following each quarter-end, and on the Revolver Maturity Date - Calculation method: Daily on the difference between unused commitments and outstanding principal, multiplied by the applicable annual rate - Canadian dollar outstanding principal is converted to its US dollar equivalent for calculation Standby Fee Calculation | Commitment Type | Payer | Recipient | Payment Frequency | Calculation Basis | | :--- | :--- | :--- | :--- | :--- | | Canadian Lender Revolver Commitment | WFT | Agent (for Canadian Lenders) | Fifth business day after quarter-end and Revolver Maturity Date | Difference between Canadian Lender Revolver Commitment and Principal Outstanding | | US Lender Revolver Commitment | WFT | US Agent (for US Lenders) | Fifth business day after quarter-end and Revolver Maturity Date | Difference between US Lender Revolver Commitment and Principal Outstanding | | WFT Swingline Commitment | WFT | WFT Swingline Lender | Fifth business day after quarter-end | WFT Swingline Commitment | | WFUS Swingline Commitment | WFUS | WFUS Swingline Lender | Fifth business day after quarter-end | WFUS Swingline Commitment | Agent's Fee Borrowers must pay a separately agreed agent's fee to the agent annually in advance, starting from the closing date - Borrowers pay a separately agreed agent's fee to the agent annually in advance[123] Agent's Discretion on Allocation If financing cannot be proportionally allocated or Bankers' Acceptances cannot be allocated by minimum amounts or increments due to circumstances in Article 10, agents may, at their discretion, make equitable allocations, with all related fees and repayments adjusted accordingly - If financing cannot be proportionally or minimally allocated, agents may equitably allocate at their discretion, adjusting fees and repayments accordingly[124][126] Rollovers and Conversions Borrowers may request rollovers or conversions of financing types, excluding unavailable types; these do not constitute repayment or re-borrowing but alter interest or fee calculation bases or currencies; currency conversions require repayment and re-borrowing, and the total number of maturity dates for Term SOFR loans and Bankers' Acceptances cannot exceed 20 - Borrowers may request rollovers or conversions of financing types, but not to unavailable types[125][129] - Rollovers or conversions do not constitute repayment or re-borrowing, only changing the basis for interest or fee calculation or currency - Currency conversions require repayment of existing loans and re-borrowing - The total number of maturity dates for all Term SOFR loans and Bankers' Acceptances cannot exceed 20 Reallocation of Canadian Lender and US Lender Revolver Commitments WFT may request reallocation of Canadian and US lender revolving commitments with at least 30 days' written notice, requiring a corresponding increase and decrease in commitments, and must ensure no outstanding borrowings exceed reallocated commitments, potentially incurring breakage costs for terminating existing Term SOFR loans or Bankers' Acceptances - WFT may request reallocation of Canadian and US lender revolving commitments with 30 days' notice[127][129] - Reallocation requires no outstanding borrowings to exceed the new commitments - May involve terminating existing Term SOFR loans or Bankers' Acceptances, with borrowers bearing related breakage costs Conforming Changes Agents may make conforming changes at any time to accommodate the use or administration of SOFR, Term SOFR, or Daily Simple SOFR, effective without other parties' consent, and will promptly notify borrowers and lenders of such changes - Agents may make conforming changes at any time to accommodate SOFR-related rates, effective without other parties' consent, and will provide timely notification[128] ARTICLE 3 ADVANCES Advances Canadian lenders provide WFT with Prime Rate Advances, US Base Rate Advances, and SOFR Advances; US lenders provide WFUS with NY Prime Rate and SOFR Advances; and term lenders provide WFT with US Base Rate and SOFR Advances - Canadian Lenders provide WFT with: Prime Rate Advances, US Base Rate Advances, SOFR Advances[130] - US Lenders provide WFUS with: NY Prime Rate Advances, SOFR Advances[131] - Term Lenders provide WFT with: US Base Rate Advances, SOFR Advances[132] Minimum Advances Minimum advances are Cdn$10 million for Prime Rate Advances (non-swingline), US$10 million for US Base Rate Advances (non-swingline), US$5 million for NY Prime Rate Advances, and US$5 million (in multiples of US$100,000) for SOFR Advances Minimum Advance Amounts | Advance Type | Minimum Amount | | :--- | :--- | | Prime Rate Advance (non-swingline) | Cdn$10,000,000 | | US Base Rate Advance (non-swingline) | US$10,000,000 | | NY Prime Rate Advance | US$5,000,000 | | SOFR Advance | US$5,000,000 (and in integral multiples of US$100,000) | Notice Requirements for Advances Prime Rate, NY Prime Rate, or US Base Rate Advances require at least two business days' written notice, while SOFR Advances require at least three business days' written notice, with WFT notifying the agent and WFUS notifying the US agent - Prime Rate Advances, NY Prime Rate Advances, or US Base Rate Advances: At least two business days' prior written notice[134] - SOFR Advances: At least three business days' prior written notice[135] - WFT sends notices to the agent, WFUS sends notices to the US agent Payment of Advances to Agent or US Agent Canadian lenders must deposit Cdn$ for Prime Rate Advances or US$ for US Base Rate/SOFR Advances into the Canadian payment account by 2:00 PM Toronto time on WFT's request date; US lenders must deposit US$ into the US payment account by 2:00 PM New York time on WFUS's request date; term lenders must deposit US$ into the Canadian payment account by 2:00 PM Toronto time on WFT's request date; and agents will promptly provide funds to borrowers upon receipt - WFT's request for revolving credit advances: Canadian Lenders must deposit Canadian Dollars (for Prime Rate Advance) or US Dollars (for US Base Rate Advance/SOFR Advance) into the Canadian payment account by 2:00 PM Toronto time on the request date[136] - WFUS's request for revolving credit advances: US Lenders must deposit US Dollars into the US payment account by 2:00 PM New York time on the request date[137] - Term loan advances: Term Lenders must deposit US Dollars into the Canadian payment account by 2:00 PM Toronto time on WFT's request date - Agents or US Agents will promptly provide funds to borrowers upon receipt Notices Irrevocable Each borrower's borrowing notice is irrevocable and binding; if a borrower's failure to comply with agreement terms results in an unmade loan or unrenewed SOFR loan, the borrower must indemnify the affected lender for losses or expenses (excluding lost profits or other consequential damages) - Borrowing notices are irrevocable; if a borrower's default prevents loan disbursement or SOFR loan renewal, the borrower must indemnify the lender for losses (excluding lost profits)[138] Election of Interest Rates and Currencies Each advance will be of the type specified in the borrowing notice and accrue interest at the applicable rate for that type until the end of the initial interest period for Term SOFR loans, or until full repayment for Prime Rate, NY Prime Rate, US Base Rate, or Daily Simple SOFR Advances - Advances accrue interest at the specified type and rate until the Term SOFR loan interest period ends or other loan types are fully repaid[139][140] Continuation of Term SOFR Advances Borrowers may, at any time, elect to continue a Term SOFR Advance for a new interest period by providing at least three business days' written notice to the agent, specifying the duration and commencement date of the new interest period - Borrowers may elect to roll over a Term SOFR Advance with at least three business days' notice, specifying the new interest period[141] Conversion of Advances WFT may convert Term SOFR, Daily Simple SOFR, or US Base Rate Advances under its revolving or term facilities, while WFUS may convert Term SOFR, Daily Simple SOFR, or NY Prime Rate Advances under its revolving facility; conversions to Term SOFR or Daily Simple SOFR require at least three business days' notice, others require two business days' notice - WFT may convert Term SOFR Advance, Daily Simple SOFR Advance, or US Base Rate Advance under its revolving or term credit facilities[142] - WFUS may convert Term SOFR Advance, Daily Simple SOFR Advance, or NY Prime Rate Advance under its revolving credit facility[143] - Conversions to Term SOFR Advance or Daily Simple SOFR Advance require at least three business days' notice; other conversions require at least two business days' notice[145] Automatic Conversion of Term SOFR Advances If borrowers fail to provide required notice for continuation, conversion, or repayment of a Term SOFR Advance, it will automatically convert to a US Base Rate Advance (for WFT) or NY Prime Rate Advance (for WFUS) at the corresponding interest rate, and borrowers must indemnify lenders for resulting losses - Failure to notify continuation, conversion, or repayment of a Term SOFR Advance results in automatic conversion to a US Base Rate Advance (WFT) or NY Prime Rate Advance (WFUS), with borrowers liable for lender losses[144][145] Interest on Term SOFR Advances Interest on Term SOFR Advances is calculated at Adjusted Term SOFR plus the applicable margin, from the advance date until full repayment, based on actual days over 360 days, and is payable at the end of each interest period, or every three months if the period exceeds three months - Term SOFR Advance interest is calculated at Adjusted Term SOFR plus the applicable margin, based on actual days/360 days, payable at interest period end (or every three months if longer)[146] Interest on Prime Rate, NY Prime Rate, US Base Rate and Daily Simple SOFR Advances Interest on Prime Rate, NY Prime Rate, US Base Rate, and Daily Simple SOFR Advances is calculated daily on the outstanding principal balance at the respective base rate plus the applicable margin, and is payable on the fifth business day of each month - Prime Rate, NY Prime Rate, US Base Rate, and Daily Simple SOFR Advance interest is calculated daily on the outstanding balance at the respective base rate plus applicable margin, payable on the fifth business day of each month[147] ARTICLE 4 BANKERS' ACCEPTANCES Commitment Each Canadian lender agrees to accept and purchase Bankers' Acceptances from time to time at WFT's request, within the scope of its revolving credit facility commitment - Canadian lenders commit to accept and purchase Bankers' Acceptances at WFT's request within their revolving credit facility commitments[149] Drawings Each Bankers' Acceptance must be in integral multiples of Cdn$100,000, mature one, two, or three business days after issuance but no later than the revolving maturity date, with each drawing totaling at least Cdn$10 million, requiring two business days' prior written notice to the agent; borrowing notices are irrevocable, and borrowers must indemnify for losses due to non-compliance - Bankers' Acceptance face amount: Integral multiples of Cdn$100,000[150][153] - Maturity date: One, two, or three business days after issuance, no later than the Revolver Maturity Date - Each drawing total: At least Cdn$10,000,000 - Notice requirement: Two business days' prior written notice to the agent - Borrowing notices are irrevocable, and borrowers must indemnify for losses due to non-compliance Form of Bankers' Acceptances Each Bankers' Acceptance must conform to the face amount and maturity date specified in Section 4.2, indicate the drawing date, and be in a form satisfactory to the relevant lender - Bankers' Acceptances must meet face amount and maturity date requirements, state the drawing date, and be in a form satisfactory to the lender[151] Completion of Bankers' Acceptance Upon receiving notice from the agent, each lender is authorized as WFT's lawful attorney to sign Bankers' Acceptances based on information provided by the agent - Lenders are authorized as WFT's agents to sign Bankers' Acceptances based on agent notification[151] BA Proceeds Each lender must purchase its proportionate share of Bankers' Acceptances on the drawing date and deposit discounted proceeds (less stamping fees) into the Canadian payment account; the agent will then provide funds to WFT, and lenders may sell, re-discount, or hold Bankers' Acceptances without affecting borrower obligations - Lenders purchase Bankers' Acceptances, deposit discounted proceeds (less stamping fees) into the Canadian payment account for WFT, and may dispose of the acceptances without affecting borrower obligations[152] Stamping Fee WFT must pay Canadian dollar stamping fees to the agent (for lenders) on the drawing date, calculated on the face amount of the Bankers' Acceptance based on its term (including drawing date, excluding maturity date) and the annual rate defined in the applicable margin - WFT pays Canadian dollar stamping fees on the drawing date, calculated on the Bankers' Acceptance face amount, term, and applicable annual rate[154] Payment at Maturity Borrowers must pay the agent an amount equal to the face amount of each Bankers' Acceptance on its maturity date; the agent will then proportionally distribute funds to lenders, fulfilling borrowers' obligations, with the accepting institution thereafter solely responsible for paying the acceptance - Borrowers pay the Bankers' Acceptance face amount to the agent on maturity, who distributes it to lenders; this fulfills borrower obligations, and the accepting institution is then responsible for the acceptance[155] Power of Attorney Respecting Bankers' Acceptances WFT authorizes each lender as its lawful attorney to complete, sign, and endorse Bankers' Acceptances, and to purchase, discount, or negotiate them after acceptance; acceptances completed by lenders on WFT's behalf are fully binding on WFT - WFT authorizes lenders as its agents to complete, sign, endorse, purchase, discount, or negotiate Bankers' Acceptances, which are binding on WFT[156] Prepayments Except as required by Section 4.10, WFT may not prepay the face amount of Bankers' Acceptances before maturity; any prepayment will be held by the agent in a cash collateral account and invested in cash equivalents to ensure maturity payment, releasing WFT from corresponding obligations, with the accepting institution thereafter solely responsible for the acceptance and indemnifying WFT for its failure to pay - Except as required by Section 4.10, WFT may not prepay the face amount of Bankers' Acceptances before maturity[157][158] - Prepayments will be held as cash collateral, releasing WFT from corresponding obligations - The accepting institution is thereafter solely responsible for paying the acceptance and indemnifying WFT for its failure to pay Default Upon a default event and the agent's declaration of due obligations, or if obligations become due under Section 9.3, the face amount of all outstanding Bankers' Acceptances will immediately become payable by borrowers to the agent, regardless of their maturity date - Upon a default event, the face amount of all outstanding Bankers' Acceptances becomes immediately due and payable by borrowers to the agent[159] Non-Acceptance Lenders If a lender (non-acceptance lender) cannot accept commercial paper due to law or market practice, it must provide an equivalent Bankers' Acceptance Equivalent Loan (BA Equivalent Loan) equal to the discounted proceeds of a hypothetical Bankers' Acceptance sale, calculated at the non-acceptance discount rate; the non-acceptance lender may deduct stamping fees, and WFT must repay the BA Equivalent Loan principal plus interest on the maturity date - Non-acceptance lenders provide BA Equivalent Loans instead of accepting Bankers' Acceptances[160] - BA Equivalent Loan amount is determined by discounted proceeds calculated at the non-acceptance discount rate, with stamping fees deductible - WFT must pay BA Equivalent Loan principal plus interest on the maturity date Conversions WFT may convert Prime Rate Advances to Bankers' Acceptances or vice versa, requiring two business days' written notice to the agent; Prime Rate Advances can be converted at any time, while Bankers' Acceptances can only be converted to Prime Rate Advances on their maturity date - WFT may convert Prime Rate Advances to Bankers' Acceptances and vice versa with two business days' notice; Prime Rate Advances can convert anytime, but Bankers' Acceptances only at maturity[161] Rollover or other Payment of Bankers' Acceptance Two business days before a Bankers' Acceptance maturity date, WFT must request a rollover via borrowing notice or notify payment of the maturing acceptance via repayment/cancellation notice; failure to provide notice will result in the maturing acceptance's amount automatically converting to a Prime Rate Advance - Two business days before a Bankers' Acceptance maturity date, WFT must request a rollover or notify payment[162][163] - Failure by WFT to provide notice will result in the maturing acceptance automatically converting to a Prime Rate Advance No Days of Grace WFT may not request any days of grace from lenders for the maturity payment of Bankers' Acceptances - WFT may not request any grace period from lenders for Bankers' Acceptance maturity payments[164] Suspension of Bankers' Acceptance Option If the Bankers' Acceptance market ceases to exist, or if legal, regulatory, or guideline changes make it impractical or costly for lenders to create or commit to create Bankers' Acceptances, lenders will notify the agent, who will then notify WFT, and lenders will suspend accepting WFT's Bankers' Acceptances until conditions normalize - If the Bankers' Acceptance market is disrupted or costs increase, lenders may suspend accepting WFT's Bankers' Acceptances until conditions normalize[165] Depository Bills By election of WFT and any lender, Bankers' Acceptances under this agreement may be issued as Depository Bills and deposited with CDS, governed by this Article 4 - Bankers' Acceptances may be issued as Depository Bills and deposited with CDS, governed by Article 4 of this agreement[166] ARTICLE 5 LETTERS OF CREDIT Commitment Each Canadian lender agrees to issue POA Letters of Credit through the agent or Fronted Letters of Credit through a fronting lender at WFT's request, within its revolving credit facility commitment - Canadian lenders commit to issue POA Letters of Credit via the agent or Fronted Letters of Credit via a fronting lender at WFT's request[168] POA Letters of Credit POA Letters of Credit are issued by the agent on behalf of all lenders as a single multi-lender letter of credit, with each lender's obligation being several and proportionate; the agent acts as agent and trustee for document receipt, compliance determination, and drawing notification; WFT must repay drawing amounts plus interest to the agent on the drawing date - POA Letters of Credit are issued by the agent on behalf of all lenders, with each lender's obligation being several and proportionate[169][170][171] - The agent acts as agent and trustee, responsible for document review and drawing notification - WFT must repay drawing amounts plus interest to the agent on the drawing date - If a default event occurs, the agent must notify lenders 30 days before the automatic renewal cutoff date to prevent automatic renewal Fronted Letters of Credit Fronted Letters of Credit are issued by a fronting lender on behalf of all lenders, with outstanding principal allocated proportionally; each lender is proportionally liable to indemnify the fronting lender; WFT must repay drawing amounts plus interest to the fronting lender upon demand; failure to repay by WFT triggers an automatic conversion to a Prime Rate Advance or US Base Rate Advance, funded by lenders to repay the fronting lender - Fronted Letters of Credit are issued by a fronting lender on behalf of all lenders, with outstanding principal allocated proportionally[172][174] - Each lender is proportionally liable to indemnify the fronting lender - WFT must repay drawing amounts plus interest to the fronting lender upon demand - If WFT fails to repay on time, it triggers an automatic conversion to a Prime Rate Advance or US Base Rate Advance, funded by lenders to repay the fronting lender Notice of Issuance Issuance of each Letter of Credit requires three business days' prior written notice from WFT to the agent (for POA LCs) or both agent and fronting lender (for Fronted LCs) in the form of a borrowing notice; WFT must also sign and deliver the agent's or fronting lender's customary letter of credit indemnity agreement, with this agreement prevailing in case of inconsistency - Letter of Credit issuance requires three business days' notice from WFT and signing of a customary indemnity agreement, with this agreement prevailing in case of inconsistency[173] Form of Letter of Credit Each Letter of Credit must state its issuance date, mature no later than 365 days after issuance and no later than the revolving maturity date, be in a form and content satisfactory to the agent or fronting lender, and, unless expressly stated otherwise, be governed by the Uniform Customs and Practice for Documentary Credits - Letter of Credit must state its issuance date[175] - Maturity date: Within 365 days after issuance, and no later than the Revolver Maturity Date - Form and content: Satisfactory to the agent or fronting lender - Governance: Subject to the Uniform Customs and Practice for Documentary Credits Procedure for Issuance of Letters of Credit On the issuance date, the agent or fronting lender will issue the Letter of Credit based on WFT's borrowing notice; the Letter of Credit may not require payment on the same business day if submitted after 11:00 AM; WFT must provide a detailed document description and certificate text, which the agent or fronting lender may reasonably request to modify - On the issuance date, the agent or fronting lender issues the Letter of Credit based on WFT's borrowing notice[176][177] - The Letter of Credit may not require payment on the same business day if submitted after 11:00 AM - WFT must provide a detailed document description and certificate text, which the agent or fronting lender may reasonably request to modify Fees WFT must pay Letter of Credit issuance fees, fronting fees, and administration fees; issuance and fronting fees are paid on the fifth business day after each quarter-end, calculated on the undrawn face amount at the applicable annual rate (fronting fee at 10 basis points per annum); administration fees are paid upon Letter of Credit issuance, amendment, or transfer - WFT must pay Letter of Credit issuance fees, fronting fees, and administration fees[177][178] - Issuance and fronting fees: Paid on the fifth business day after each quarter-end, calculated on the undrawn face amount at the applicable annual rate (fronting fee at 10 basis points) - Administration fees: Paid upon Letter of Credit issuance, amendment, or transfer Obligations Absolute Borrowers' obligation to repay POA or Fronted Letter of Credit drawings is unconditional and irrevocable, must be strictly performed, and is unaffected by the Letter of Credit's validity, beneficiary claims, document forgery, agent/fronting lender non-conforming payments, or default events - Borrowers' obligation to repay Letter of Credit drawings is unconditional and irrevocable, unaffected by any external factors[179][180] Indemnification; Nature of Lenders' Duties WFT agrees to indemnify agents, fronting lenders, and other lenders for claims, liabilities, losses, and expenses arising from Letter of Credit issuance or government actions; WFT bears all risks of beneficiary actions or Letter of Credit misuse, and agents, fronting lenders, and other lenders are not liable for document form, validity, transmission errors, technical term misinterpretations, or consequences beyond their control, provided their actions meet reasonable diligence standards under the Uniform Customs and Practice - WFT indemnifies agents, fronting lenders, and other lenders for losses and expenses arising from Letter of Credit issuance or government actions[179][181][183] - WFT bears all risks of beneficiary actions or Letter of Credit misuse - Agents, fronting lenders, and other lenders are not liable for document form, validity, transmission errors, technical term misinterpretations, or consequences beyond their control, provided their actions meet reasonable diligence standards under the Uniform Customs and Practice Default, Maturity, etc. On the revolving maturity date or upon a default event and declaration of due obligations, the face amount of all outstanding Letters of Credit and all accrued unpaid fees will immediately be paid by WFT to the agent, held as cash collateral, and invested in cash equivalents to ensure payment; if Letters of Credit need repayment due to revolving credit facility repayment, WFT must also pay the corresponding amount as cash collateral; the agent will pay WFT the difference after deducting paid amounts upon judicial termination or Letter of Credit maturity - On the Revolver Maturity Date or upon a default event, all outstanding Letter of Credit face amounts and accrued unpaid fees will immediately be paid by WFT to the agent, held as cash collateral[182][184][185][186][187] - If Letters of Credit require repayment due to revolving credit facility repayment, WFT must also pay the corresponding amount as cash collateral - The agent will pay WFT the difference after deducting paid amounts upon judicial termination or Letter of Credit maturity ARTICLE 6 CLOSING CONDITIONS Closing Conditions Lenders' obligation to provide credit facilities is contingent upon satisfying various conditions precedent on the closing date, including execution of credit documents, truth and accuracy of representations and warranties, absence of default events, receipt of corporate organizational documents, officer certificates, good standing certificates, payment of all due fees, and compliance with 'Know Your Customer' and anti-money laundering regulations; failure to meet or waive these conditions terminates lender obligations - Credit documents have been signed and delivered[189][191][192][193] - All representations and warranties are true and accurate on the closing date - No default or event of default has occurred - Receipt of borrowers' corporate organizational documents, board resolutions, and officer certificates - Receipt of borrowers' good standing certificates - All due fees have been paid - Compliance with "Know Your Customer", anti-terrorism, and anti-money laundering regulations - Failure to meet or waive these conditions