EXHIBIT 10.8 - National Bank of Canada Loan Agreement
October 6, 1997
Intercorp Excelle Inc.
0000 Xxxxxx Xx.
Xxxxx Xxxx, Xxxxxxx
X0X 0X0
Dear Sirs:
OFFER TO FINANCE
We are pleased to advise you that the National Bank of Canada has authorized
the following credit facilities subject to the ensuing terms and conditions.
BORROWER: Intercorp Excelle Inc. (the "Borrower").
LENDER: National Bank of Canada (the "Bank").
AMOUNT: $1,400,000 by way of a Non-Revolving Demand
Loan.
PURPOSE: To assist with the purchase of the property
located at 0000 Xxxxxx Xx., Xxxxx Xxxx,
Xxxxxxx (the "Property").
INTEREST RATE: Prime Rate of National Bank of Canada plus
0.75%, that is 6.0% as at October 6, 1997,
calculated daily and paid monthly in arrears.
Prime Rate is defined as the rate as
established from time to time by the Bank
for Canadian dollar loans in Canada.
The Borrower shall have the option the
option to fix the interest rate at anytime
for a term of 1 to 5 years. The Fixed rate
of interest will be equal to the Bank's Cost
of Funds plus 1.85%. For indicative purposes
only as at October 6, 1997 the Bank's "all
in" fixed rates for the indicated terms are
as set out below:
1 yr. 2yrs. 3yrs. 4yrs. 5yrs.
----- ----- ----- ----- ----
6.05% 6.50% 6.80% 7.0% 7.15%
AMORTIZATION: 20 years.
REPAYMENT: Monthly principal payments of $5,833.33 plus
interest.
DEMAND NATURE
OF THE FACILITIES: The Borrower acknowledges and agrees that
notwithstanding anything contained herein to
the contrary these facilities constitute
Demand Loans and as such, are due and
payable at any time at the
xxxx discretion of the Bank.
PREPAYMENT: FLOATING RATE:
The Borrower may prepay all or part of the
loan at any time without penalty, provided
prepayment is made with company generated
funds. If prepayment if made with funds from
external sources, a penalty of two months'
interest will be payable. Partial prepayment
will be applied to the last principal
instalments or interest, at the Bank's
discretion.
FIXED RATE:
The Borrower may prepay the balance of the
loan in full or in part, before the end of
the term provided the greater of the
following amount is paid to the Bank:
(i) three months' interest at the rate
of the loan; or
(ii) the difference between the rate for
the remainder of the term and the
rate at the time of prepayment plus
one month's interest at the rate of
the loan.
SECURITY: All legal and other documentation to be in a
form and content satisfactory to the Bank
and its solicitors and is to be supported by
all usual representations and opinions to
confirm its enforceability. To include but
not limited to:
1. $1,400,000 Collateral Mortgage
providing a first fixed charge over
the property located at 0000 Xxxxxx
Xx., Xxxxx Xxxx, Xxxxxxx.
2. Assignment of Lease between the
Borrower, Excelle Brands Food
Corporation and Intercorp Foods
Ltd. for a minimum term of ten
years and providing net rental
income sufficient to cover
principal and interest payments
1.15 times.
3. Assignment of sufficient fire
insurance to protect the Bank's
interest.
4. General Security Agreement
providing a first floating charge
over the Borrower's assets.
CONDITIONS
PRECEDENT: The following information satisfactory to
the Bank is to be provided prior to the
advance of funds.
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1. A current appraisal of the Property
conducted by a Bank appointed
appraiser confirming a minimum
value of $1,950,000.
2. A current Phase I environmental
audit.
3. Completion of the Borrower's
Initial Public Offering.
4. All legal and security documents to
be in form and substance,
satisfactory to the Bank and its
solicitors, accompanied by the
relevant legal opinions and
registered in the appropriate
jurisdictions.
FINANCIAL
COVENANTS: The Borrower agrees to the following
covenants which shall be calculated as
indicated below and maintained at all times:
1. The annual net rental income of the
Property shall cover annual
principal and interest payments a
minimum of 1.15:1 times.
REPORTING
CONDITIONS: The Borrower agrees to submit to the Bank
its annual audited financial statements
within 90 days of the end of its fiscal
year.
OTHER
CONDITIONS: 1. All legal and registration fees
incurred to prepare, execute and
maintain legal documents will be
assumed by the Borrower.
2. The cost of all appraisals and
environmental reports requested by
the Bank are the responsibility of
the Borrower.
3. Municipal taxes payable relative to
the Property shall remain current
at tall times. Semi-annual tax
certificates will be obtained by
the Bank with the associated costs
to be paid by the Borrower.
4. No subsequent encumbrances are
permitted on the Property, unless
requested writing and not
unreasonably withheld.
FEES: 1. Transaction fee of $2,500.
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ENVIRONMENTAL
MATTERS: 1. The Borrower represents and
warrants that the owner of the
subject property has complied and
is complying in all respects with
all applicable laws relating to the
environment, that no contaminants
pollutants or other hazardous
substances (including, without
limitation, asbestos, products
containing urea formaldehyde or
polychlorinated biphenyl or any
radioactive substances) have been
or are now stored or located at the
subject property, that no order,
approval, direction or other
governmental or regulatory notice
relating to the environment has
been threatened against, is pending
or has been issued with respect to
the subject property or the
operations of the business being
conducted at the subject property,
and that none of them is aware of
any pending or threatened action,
suit or proceedings relating to any
actual or alleged environmental
violation from or at the subject
property.
2. The Borrower shall permit the
Lender to conduct, at the
Borrower's expense, such test,
inspections and environmental
audits as may be required by the
Lender including without
limitation, the right to take soil
samples from the subject property
and the right to review and
photocopy all records relating to
the subject property or the
business or operations now or
hereinbefore conducted at the
subject property in order to
attempt to corroborate the veracity
of the aforementioned
representations and warranties.
3. The Borrower agrees to pay the cost
of all environmental audits which
may be deemed necessary by the
Bank.
4. The Borrower agrees to deliver tot
the Bank documents guaranteeing
compliance and showing that the
land and building are not
contaminated by hazardous
materials.
5. The Borrower certifies that past
and present owners have not
violated environmental law and
regulation and that, the best of
their knowledge, no proceedings
have been or are being instituted
to make him comply with
environmental laws and regulations.
6. The Borrower agrees to comply with
and respect any and
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all environmental laws and
regulations.
7. The Borrower agrees to maintain a
system or mechanism through which
the emission or release of
contaminants can be controlled in
compliance with laws and
regulations.
8. The Borrower agrees to periodically
provide the Bank with a summary
report stating the Borrower's
status with regard to environmental
laws and regulations, such as
confirmation of the renewal of
permits, certificates of compliance
and the Proper application of
control procedures.
9. The Borrower agrees to indemnify
the Bank for all decontamination
costs or for damages incurred by
the Bank or its agents as a result
of such contamination.
10. The loan shall be disbursed upon
performance and/or completion of
the above conditions to the Bank's
satisfaction.
11. In the event any environmental
report shows that decontamination
is required the Borrower undertakes
to carry out decontamination at
their own expense should this be
required or requested. However, the
undertaking of such
decontaminations shall not
guarantee that the Bank will make
any disbursements. All the other
conditions stipulated in this Offer
of Finance shall be performed tot
he Bank's satisfaction.
EVENTS OF
DEFAULT: The Borrower shall be in default under the
terms hereof on the occurrences of one or
more of the following events:
- if the Borrower fails to make a
payment, when due, of principal,
interest, fees or any other amount
due and payable hereunder;
- if the Borrower fails to perform
any of its obligations hereunder;
- if the Borrower becomes insolvent
or bankrupt, is in the process of
winding up, files a proposal or
gives notice of its intention to
file such proposal;
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- if proceedings are instituted for
the Borrower's dissolution or
winding-up, or the suspension of
its operations;
- if a creditor takes possession of
the Borrower's property of a major
portion thereof or if such property
is subject to receivership;
- if the Borrower fails to pay any
other amount owing to any other
financial institution.
In the event of default, the Bank reserves
the right to demand immediate payment of any
advance outstanding, and credit shall be
discontinued and canceled as of such time.
The Bank may then no longer allow the
Borrower to use any portion of the credit.
ACKNOWLEDGMENT
OF NON MERGER:
The terms and conditions contained in this
Offer to Finance shall not merge upon the
execution and delivery of the security
documentation referred to herein but shall
at all times remain in full force and
effect. The events of default as stated
herein, shall be in addition to and not
restrict in any way whatsoever the events of
default as stated in the security documents.
ANNUAL REVIEW: To be reviewed at least annually, and in any
event not later than May 31, 1998.
If these conditions are acceptable to you, please indicate your acceptance
thereof by signing and returning a copy of this letter to the Bank before
October 15, 1997, after which time this offer is null and void.
Yours truly,
/s/ Xxxxxx X. Xxxxxxxx /s/ X. X. Xxxxxxx
Senior Account Manager Senior Manager
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ACCEPTANCE:
WE ACCEPT THE TERMS AND CONDITIONS OUTLINED HEREIN THIS _____DAY
OF _____, 19 __
INTERCORP/EXCELLE INC. ("Borrower")
Per: /s/ XXXXXX XXXXX
----------------
Title: CEO
Per: /s/ XXXX XXXXX
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Title:
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