AGREEMENT
between
Business Development Bank of Canada
and
_
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On this _ day of _, TWO THOUSAND AND _
BEFORE Maître _, Notary, practicing at _, Province of Quebec
APPEARED:
BUSINESS DEVELOPMENT BANK OF CANADA, a bank
corporation continuing as a body corporate the Federal Business
Development Bank under an Act of the Parliament of Canada, 42-43-44
Elizabeth II, (1994-1995), sanctioned on the 13th day of July one thousand
nine hundred and ninety-five (1995), having its head office at 5 Place VilleMarie, Montreal (Quebec) H3B 5E7, herein acting and represented by _,
its _ and by _, its _ duly authorized by resolution passed on the _,
themselves represented by _ in its quality of special mandatary duly
authorized for the purposes hereof under a power of attorney under
private signature, dated _, certified copy of an extract of the said resolution
and copy of the said power of attorney are annexed hereto, after having
been acknowledged as true and signed for identification by the said
special mandatary with and in the presence of the undersigned notary.
Of the First Part (hereinafter called “BDC”)
AND
_
Of the Second Part (hereinafter called the “Joint Lender”)
(BDC and the Joint Lender being sometimes called the “Lenders” or
individually “Lender”)
WHO declare the following:
WHEREAS:
A.
Pursuant to an Offer of Financing dated ____, BDC has agreed to
provide a non-revolving loan to ______ the “Borrower”) in a principal
amount not exceeding $_____ (the "BDC Financing") the repayment of
which is secured by:
(include security given by all debtors as well as
guarantees/suretyships (other than guarantees/suretyships given by
individuals) and security in support of such guarantees/suretyships)
1.
2.
(the "BDC Security").
B.
Pursuant to an Offer of Financing dated ____ the Joint Lender has
agreed to provide a non-revolving loan to the Borrower in a principal
amount not exceeding $_____ (the "Joint Lender Financing", collectively
with the BDC Financing, the “Loans”) the repayment of which is secured
by:
(include
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security
given
by
all
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debtors
as
well
as
guarantees/suretyships (other than guarantees/suretyships given by
individuals) and security in support of such guarantees/suretyships)
1.
2.
(the "Joint Lender Security")
(the BDC Security and the Joint Lender Security, collectively, with
all other guarantees or security taken by the Lenders or which they
may take from time to time, jointly or separately, to secure the
Loans, excluding guarantees granted by physical persons and
insurance proceeds described in section 4.2, are hereinafter called
the “Security”).
C.
The parties have agreed that their rights, interests and obligations
under the BDC Security and the Joint Lender Security shall be governed
by the terms and conditions hereinafter set forth.
NOW THEREFORE THIS AGREEMENT WITNESSETH that, in
consideration of the premises and of the mutual covenants hereinafter set
forth, the parties hereto covenant and agree as follows:
1.
EQUALLY RANKING SECURITY
The Lenders covenant, acknowledge and stipulate that the
Security are for their joint benefit and have the same rank, without
preference or prior claim of one security over the other, on the grounds of
their nature, prior claim, date of execution, issuance, registration, service,
publication of the notice of their registration or otherwise.
2.
OTHER CREDITS
The Lenders furthermore covenant, acknowledge and stipulate that
all security interests and guarantees charging the universality of claims
and inventories which the Joint Lender has obtained or may obtain from
time to time to secure the repayment of any amount that might be owed to
it by the Borrower pursuant to operating credits granted by the Joint
Lender, have prior rank and preference, but only with regards to claims
and inventory, regardless of their nature, date of execution, issuance,
registration or the notice of their registration or otherwise over the
Security. The Lenders reserve all their rights and prior claims under the
hypothecs created herein on all other property of the Debtor, including the
insurance proceeds and any claims or sums of money derived from the
leasing, sale or other disposal of such property.
3.
EXERCISE OF SECURITY AND NOTICE OF DEFAULT
In the event of a default of the Borrower under any obligation towards one
of the Lenders pursuant to the BDC Financing or Joint Lender Financing,
the Lender shall promptly advise the other Lender provided that no liability
shall attach to a party failing to give the other party written notice of such
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default if said party acts in good faith.
If a Lender wishes to make demand of its Loan following a
default and/or proceed to realize upon its Security, the Lender shall send a
written 7 banking day notice to the other Lender (an “Enforcement
Notice”).
Following receipt of the Enforcement Notice, the Lender
having received it shall have the option to acquire the other Lender's Loan
and Security by giving written notice of such intention within 7 Banking
Days following its receipt of the Enforcement Notice (a "Buy Out Notice").
Following receipt of a Buy Out Notice, the Lender who
received it shall not continue its demand on the Borrower or any Other
Debtor, without the written consent of the other Lender.
The Lender who sent the Buy Out Notice shall then pay to the other
Lender all monies due and owing under his Loan on the business day
which is 30 days after the Buy Out Notice is given.
Such assignment shall be on a without recourse basis and, except for
representations as to the balance due and owing under the Loan being
bought out, good title to and power and authority of the Lender to sell,
transfer and assign its Loan and Security.
In the Event that a Buy Out Notice is not given, the Lenders
shall demand full payment of their Loans and shall fully cooperate to
enforce the Security.
In enforcing the Security, the Lenders agree that neither shall
become absolute owner by taking in payment or foreclosure, of any of the
property or assets which are subject to the Security, without the written
consent of the other.
4. USE OF THE MONEY
4.1
It is understood that: a) in the event of default by the
Borrower, any sum of money received by one of the Lenders following the
issuance of an Enforcement Notice or coming from the exercise of the
Security; b) in the event of an insurance claim, subject to section 4.2, any
sum of money coming from an insurer in settlement of a claim involving
property subject to the Security interest; or c) in the event of dissolution,
winding up, liquidation or bankruptcy of or by the Borrower, or in the event
of distribution of its assets in favour of its creditors, any sum received in
relation thereto shall be charged in the following order and manner:
i)
To the payment and repayment of all amounts or all costs and
expenses incurred and paid by one of the Lenders, or its authorized
representatives or mandataries, to protect and realize the Security;
ii)
To the payment, repayment and/or reduction, on a pro rata basis,
of any principal and interest, arrears on interest and other costs then due
and payable in the Lenders’ favour under the Loans;
iii)
To the remittance of any balance, if any, to the Borrower or to any
other party entitled thereto.
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Other than sums paid from insurance proceeds, the pro rata
between the Lenders shall be established as at the date of the first of the
following events:
a)
the date on which the Lenders have agreed to exercise the
Security rights;
b)
the date on which a sum of money is received from an
insurer, or the date of dissolution, winding up, liquidation,
bankruptcy or distribution of the assets of the Borrower.
4.2
Notwithstanding the foregoing, the proceeds of any
mortgage impairment insurance policy or other similar insurance
maintained by a Lender at its cost, to protect that Lender’s advances
against any uninsured or underinsured loss or damage to the assets and
property charged by the Security, shall be applied against the advances of
the Lender placing the insurance and will not be shared with the other
Lender.
5.
NULL OR DIMINISHED SECURITY
Each of the Lenders shall take the necessary actions to minimize
and, if possible, prevent any loss. If any of the BDC Security or the Joint
Lender Security is found to be unenforceable, invalid, unregistered or
unperfected by a court of competent jurisdiction and all appeals from any
such finding have been heard and determined or the period for making
any such appeal has expired without an appeal being made, the
provisions of this Agreement shall not apply to such Security.
Furthermore, if any of the Security is declared partially or totally invalid,
null and void or of no effect, through the fault, negligence or omission of
one of the Lenders, its employees or its agents, such Lender shall
compensate the other Lender and hold harmless and indemnify it for any
loss suffered.
6.
WAIVER OR ASSIGNMENT
In respect of the Loans, no Lender may waive the Security or
assign the rights conferred on it by this Agreement or by the deeds in
respect of the Loans, without having obtained the written consent of the
other Lender. Furthermore, each Lender agrees not to grant a prior claim
or prior rank in respect of the Security, in whole or in part, without having
obtained the prior written consent of the other Lender, nor to subrogate
any person in the Security, in whole or in part, unless the subrogatee
acknowledges being bound by this Agreement.
7.
PREPAYMENT
No Lender shall accept a prepayment from the Borrower without
having obtained the prior written consent of the other Lender.
8.
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CHANGES
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Each Lender shall administer its Loan independently as it sees fit;
however, no Lender shall be entitled to change or modify any term
pertaining to the payment schedule of its Loan without having obtained the
prior written consent of the other Lender.
9.
EXERCISE OF OTHER SECURITY RIGHTS
No Lender shall be entitled to exercise any security rights held by it
alone without having first advised the other Lender.
10.
SUBSEQUENT USE OF LOAN SECURITY
The Lenders agree not to use the Security to guarantee 1) any
other loan or any increase of such loans and, ii) future advances to the
Borrower following the reimbursement of the Loans without having
obtained the prior written consent of the other Lender.
11.
DISBURSEMENT OF ADVANCES
The Lenders agree not to issue advances to the Borrower under
the terms of the Loans unless such advances are issued simultaneously
and on a pro rata basis.
12.
NOTICES
The notices provided for herein shall be in writing and sent to the
address appearing hereinafter or to any other address that a party may
stipulate by written notice to the other party. Unless served by bailiff, the
notices shall be deemed to have been received on the business day after
their transmittal. For these purposes, the addresses of the parties shall be
as follows:
Business Development Bank of Canada
5 Place Ville Marie
Suite 400
Montreal, Quebec H3B 5E7
AND
_
13.
GENERAL
13.1 The introductory paragraphs are part of this Agreement but
the headings of the paragraphs herein are not part thereof and are only
included for reference purposes.
13.3 The acceptance by one party of any default by the other
party under any clause whatsoever of this Agreement shall not constitute a
waiver of such clause nor a waiver of any subsequent default under such
clause or any other clause hereof.
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13.4 This Agreement is binding upon the parties hereto and their
respective successors and assigns. It shall end by mutual agreement of
the parties or, as the case may be, when the Security has been realized
and the proceeds of such realization have been distributed as prescribed
herein.
14.
EXCHANGE OF INFORMATION
Each Lender can provide the other Lender with any information
regarding the Loans, the financial situation, the assets and the activities of
the Borrower.
15.
INTERVENTION
GUARANTOR
OF
THE
BORROWER
AND
The Borrower declares that it has read this Agreement and agrees
thereto for all legal purposes.
Furthermore, the Borrower acknowledges that none of the
provisions of this Agreement shall be interpreted as affecting or reducing
the rights of the Lenders or of either one of them, and the Borrower agrees
not to invoke any provision of this Agreement against the Lenders and/or
against either one of them.
DULY RECORDED and executed on the aforementioned day and
year under number _ of the minutes of the undersigned notary.
AND, AFTER DUE READING, the parties and the intervening
parties have signed in the presence of the undersigned notary.
BUSINESS DEVELOPMENT BANK OF CANADA
per:
___________________________________
___________________________________
_
___________________________________
_
___________________________________
Maître _, Notary
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