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## 12. bANk lOANS 

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* ( note 26  (c)(vi)) 

On December 19, 2011, the Company replaced its existing working capital facility with a new five-year US$180 million working capital facility entered into with Royal Bank of Canada as Administrative and Collateral Agent expiring December 19, 2016 (the “facility”). This facility replaced all existing working capital debt facilities. The facility is asset-based and is collateralized by the Company’s inventory and accounts receivable and other personal property in Canada and the U.S., subject to a first charge on brands and trade names and related intangibles under the long-term debt facilities. A second charge over the Company’s plant and equipment is also in place. The facility allows borrowings by way of Prime loans, Base Rate loans, LIBOR, or Canadian BAs at interest rates and spreads that depend on leverage, defined as Funded Debt to EBITDA. In certain circumstances, based on availability under the line, the Company must also maintain fixed charge coverage of 1.1 to 1. Fixed charges include interest and debt repayments, capital lease payments and capital distributions, such as dividends or repurchase of shares under normal course issuer bids. This facility allows the Company to borrow Canadian dollar Prime Rate loans and U.S. Base Rate loans in U.S. dollars at Prime or Base Rate plus 0.00% to 1.00%; Bankers’ Acceptances (BA) loans at BA rates plus 1.75% to 2.50%; and LIBOR advances at LIBOR plus 1.75% to 2.50%. Standby fees are also required to be paid on the un-utilized line. The rate of interest charged on borrowings depends on a financial leverage ratio. 

## 13. lONg-TERm DEbTAND FINANCE lEASE OblIgATIONS 

## Long-term debt 

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On December 19, 2011, the Company secured a US$250 million long-term loan, where the proceeds from this loan were used to repay the existing notes payable and to finance the Icelandic USA Acquisition (see note 4 ). The loan is secured on a first-priority basis by substantially all tangible and intangible assets and the assets and stock of its present and future subsidiaries. Repayments are to be made in 23 consecutive quarterly installments, with the unpaid balance due in full on December 31, 2017. The agreement includes financial covenant requirements of minimum interest coverage ratio, maximum total leverage ratio, and maximum capital expenditures. 

