Exhibit (d)(iv)
ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT
THIS AGREEMENT made as of the 30th day of April, 2004 (the "EFFECTIVE DATE").
BETWEEN:
HEMOSOL INC., a corporation incorporated pursuant to the laws of
the Province of Ontario
(the "ASSIGNOR")
OF THE FIRST PART
- AND -
HEMOSOL LP, a limited partnership constated pursuant to the laws
of the Province of Ontario
(the "ASSIGNEE")
OF THE SECOND PART
- AND -
MDS INC., a corporation incorporated pursuant to the laws of
Canada
(the "GUARANTOR")
OF THE THIRD PART
- AND -
THE BANK OF NOVA SCOTIA
("BNS")
OF THE FOURTH PART
WHEREAS pursuant to the terms of a commitment letter dated October 25, 2002, as
amended and supplemented by a supplemental agreement dated as of November 22,
2002 and as further amended by amending agreements dated April 29, 2003 and
December 29, 2003 (collectively, the "COMMITMENT LETTER"), BNS agreed to extend
to the Assignor the credit facilities specifically described therein (the
"CREDIT FACILITIES") including that credit facility designated as Credit No: 01
in the principal amount of $20,000,000 (the "$20,000,000 CREDIT FACILITY");
AND WHEREAS in accordance with the terms of the Commitment Letter, the Assignor
issued to BNS a promissory note in the principal amount of $20,000,000 dated
November 22, 2002
evidencing the indebtedness under the $20,000,000 Credit Facility (the
"PROMISSORY NOTE") and the security and other instruments in support of the
Credit Facilities listed in Schedule "A" hereto (collectively, the "EXISTING
SECURITY");
AND WHEREAS the Guarantor issued to BNS a guarantee in support of the
$20,000,000 Credit Facility dated November 22, 2002, amended by way of letter
agreement dated December 29, 2003 (collectively, the "GUARANTEE");
AND WHEREAS pursuant to the contribution agreement (the "CONTRIBUTION
AGREEMENT") dated the "Effective Date" as defined in the Arrangement Agreement
made as of the 11th day of February, 2004 between the Assignor and the Assignee,
the Assignor has agreed to transfer to the Assignee all of the Purchased Assets
and the Assumed Liabilities (each as defined in the Contribution Agreement) and
the Assignor has agreed to assign to the Assignee, and the Assignee has agreed
to assume, each of the Assumed Contracts (as defined in the Contribution
Agreement).
AND WHEREAS BNS has approved the assignment of the Credit Facilities to the
Assignee and the assumption of the Credit Facilities by the Assignee on the
terms and conditions contained herein;
AND WHEREAS BNS has agreed to release the Assignor from all liability and
obligations in connection with the Credit Facilities on the terms and conditions
contained herein;
AND WHEREAS the Guarantor and BNS desire that the Guarantee remain in place in
support of the $20,000,000 Credit Facility subsequent to the completion of the
transactions referred to and provided for herein;
AND WHEREAS the parties hereto have agreed to execute this Agreement.
NOW THEREFORE IN CONSIDERATION of $10.00, the mutual covenants contained herein
and other good and valuable consideration (the receipt and adequacy whereof are
hereby acknowledged), the parties hereto covenant, agree and acknowledge as
follows:
1. Each of the parties severally acknowledges to and agrees with each other
party that the recitals contained herein to the extent they relate to it
and each agreement to which it is party are true and correct as of the
Effective Date and form part of this Agreement.
2. Each of the Assignor and the Assignee represents and warrants to BNS that
the Contribution Agreement in the form attached hereto as Schedule "B"
constitutes the entire Contribution Agreement as of the Effective Date and
that the Contribution Agreement has not been otherwise amended or
supplemented.
3. The Assignor hereby sells, transfers and assigns unto the Assignee, and the
Assignee hereby agrees to assume, all of the Assignor's right, title and
interest in, as well as its corresponding responsibilities and obligations
in connection with, the Credit Facilities, the indebtedness and obligations
arising thereunder regardless of whether such indebtedness and obligations
arose prior or subsequent to the date hereof (collectively, the
"INDEBTEDNESS"), the Commitment Letter and the Existing Security.
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4. The Assignee hereby accepts the assignment of the Credit Facilities, the
Indebtedness, the Commitment Letter and the Existing Security upon the
terms set out herein and assumes, and agrees to observe, perform, fulfill
and be bound by all terms, covenants, conditions, obligations and
responsibilities relating to the Credit Facilities, the Indebtedness, the
Commitment Letter and the Existing Security which are to be observed,
performed and fulfilled by the Assignor pursuant to the said instruments in
the same manner and to the same extent as if the Assignee were the borrower
named therein.
5. The Assignee acknowledges that the Purchased Assets assigned to it pursuant
to the Contribution Agreement are subject to the terms, conditions,
security interests, charges and provisions of the Existing Security. The
Assignee agrees to be bound by the Existing Security to the same extent as
if the Assignee was named as the entity issuing the security therein and
acknowledges receipt of same. The Assignee acknowledges and agrees that the
Existing Security is in full force and effect, that the security interests
created thereunder have remained continuously attached at all times before,
at the time of and subsequent to the sale, transfer and assignment referred
to herein and that the Existing Security creates a security interest in
property and assets the Assignee acquires an interest in subsequent to the
sale, transfer and assignment referred to herein.
6. The Guarantor acknowledges having received a copy of the Contribution
Agreement and agrees the Assignee shall be substituted for the Assignor as
"Customer" under the Guarantee such that subsequent to the Effective Date
the Assignee shall be the "Customer" under the Guarantee. The Guarantor
agrees with BNS that the Guarantee remains in full force and effect, is
hereby confirmed and continues to guarantee the $20,000,000 Credit Facility
in accordance with its terms notwithstanding that the Assignee rather than
the Assignor is, subsequent to the Effective Date, the borrower under the
$20,000,000 Credit Facility. The definition of "Security" in the Guarantee
shall include the security instruments issued by the Assignee referred to
in Section 8 herein.
7. In consideration of BNS agreeing to consent to the assignment and
assumption referred to herein, the Assignee agrees to provide the following
additional security or other documentation to BNS:
(a) General Security Agreement;
(b) General Assignment of Contracts;
(c) Specific Assignment of Contract with SNC Lavalin Inc.;
(d) Debenture in the amount of $25,000,000, inter alia, mortgaging and
charging the lands known municipally as 0000 Xxxxxxxxxx Xxxx.,
Xxxxxxxxxxx, Xxxxxxx;
(e) Documentation substituting warrants to purchase 45,000 common shares
of Hemosol Inc. held by BNS with an exercise price of $6.35 with
warrants to purchase 45,000 common shares of Hemosol Corp. held by BNS
with an exercise price of $6.31.
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8. Each of the Guarantor, the Assignee and BNS severally confirm to each other
that the balance of the indebtedness owing under the $20,000,000 Credit
Facility as of the Effective Date is $20,000,000 plus accrued interest.
Each of the Assignee and the Bank severally confirm that there is a letter
of credit to the City of Mississauga in the revised amount of $20,000
outstanding under Credit No. 3 in the Commitment Letter. BNS confirms to
the other parties hereto that all payments of principal and interest due
and owing in connection with the said indebtedness are current and in good
standing to date.
9. Each of BNS and the Guarantor hereby consents to the assignment of
Purchased Assets and Assumed Liabilities from the Assignor to the Assignee
provided for in the Contribution Agreement, the within assignment and
assumption of the Credit Facilities, the Indebtedness, the Commitment
Letter and the Existing Security from the Assignor to the Assignee and BNS
acknowledges that the Guarantor has affirmed the continuation of the
Guarantee.
10. BNS hereby remises, releases and forever discharges the Assignor from any
and all indebtedness, obligations, liabilities, claims and demands of any
nature or kind whatsoever which BNS may now or hereafter have against the
Assignor arising under, by reason of otherwise in connection with the
Assumed Liabilities, including without limitation those arising under, by
reason of or otherwise in respect of the Credit Facilities, the
Indebtedness owing thereunder, the Commitment Letter and the Existing
Security.
11. This Agreement may be executed in any number of counterparts each of which
when so executed shall be deemed to be an original and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.
12. This Agreement shall be binding upon and enure to the benefit of the
parties and their respective successors and assigns.
13. This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario.
14. This Agreement shall become effective on the Effective Date.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
Effective Date.
HEMOSOL INC.
Per: _____________________________c/s
Name:
Title:
HEMOSOL LP
BY ITS GENERAL PARTNER HEMOSOL CORP.
Per: ________________________________
Name:
Title:
MDS INC.
Per: _____________________________c/s
Name:
Title:
THE BANK OF NOVA SCOTIA
Per: ________________________________
Name:
Title:
Per: ________________________________
Name:
Title:
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GENERAL SECURITY AGREEMENT
1. HEMOSOL LP, of 0000 Xxxxxxxxxx Xxxx., Xxxxxxxxxxx, Xxxxxxx X0X 0X0 (the
"Customer") for valuable consideration grants, assigns, transfers, sets over,
mortgages and charges to THE BANK OF NOVA SCOTIA, at its office located at 00
Xxxx Xxxxxx Xxxx, 00xx Xxxxx Xxxxxxx, XX X0X 0X0 (the "Bank") as and by way of a
fixed and specific mortgage and charge (which fixed and specific mortgage and
charge shall not, however, be granted in respect of the Customer's patents,
trade-marks and other intellectual property), and grants to the Bank, a security
interest in the present and after acquired undertaking and property (other than
consumer goods) of the Customer including all the right, title, interest and
benefit which the Customer now has or may hereafter have in all property of the
kinds hereinafter described (the "Collateral"):
(a) all goods comprising the inventory of the Customer including but not
limited to goods held for sale or lease or that have been leased or
consigned to or by the Customer or furnished or to be furnished
under a contract of service or that are raw materials, work in
process or materials used or consumed in a business or profession or
finished goods and timber cut or to be cut, oil, gas, hydrocarbons,
and minerals extracted or to be extracted, all livestock and the
young and unborn young thereof and all crops;
(b) all goods which are not inventory or consumer goods, including but
not limited to furniture, fixtures, equipment, machinery, plant,
tools, vehicles and other tangible personal property;
(c) all accounts, including deposit accounts in banks, credit unions,
trust companies and similar institutions, debts, demands and choses
in action which are now due, owing or accruing due or which may
hereafter become due, owing or accruing due to the Customer, and all
claims of any kind which the Customer now has or may hereafter have
including but not limited to claims against the Crown and claims
under insurance policies;
(d) all chattel paper;
(e) all warehouse receipts, bills of lading and other documents of
title, whether negotiable or not;
(f) all instruments, shares, stock, warrants, bonds, debentures,
debenture stock or other securities, money, letters of credit,
advices of credit and cheques;
(g) all intangibles including but not limited to contracts, agreements,
options, permits, licences, consents, approvals, authorizations,
orders, judgments, certificates, rulings, insurance policies,
agricultural and other quotas, subsidies, franchises, immunities,
privileges, and benefits and all goodwill, patents, trade marks,
trade names, trade secrets, inventions, processes, copyrights and
other industrial or intellectual property;
(h) with respect to the personal property described in subparagraphs (a)
to (g) inclusive, all books, accounts, invoices, letters, papers,
documents, disks, and other records in any form, electronic or
otherwise, evidencing or relating thereto; and all contracts,
securities, instruments and other rights and benefits in respect
thereof;
(i) with respect to the personal property described in subparagraphs (a)
to (h) inclusive, all parts, components, renewals, substitutions and
replacements thereof and all attachments, accessories and increases,
additions and accessions thereto; and
(j) with respect to the personal property described in subparagraphs (a)
to (i) inclusive, all proceeds therefrom (other than consumer
goods), including personal property in any form or fixtures derived
directly or indirectly from any dealing with such property or
proceeds therefrom, and any insurance or other payment as indemnity
or compensation for loss of or damage to such property or any right
to such payment, and any payment made in total or partial discharge
or redemption of an intangible, chattel paper, instrument or
security; and
In this Agreement, the words "goods", "consumer goods", "account",
"account debtor", "inventory", "crops", "equipment" "fixtures", "chattel paper",
"document of title", "instrument", "money", "security", or "securities",
"intangible", "receiver", "proceeds" and "accessions" shall have the same
meanings as their defined meanings where such words are defined in the Personal
Property Security Act of the province or territory in which the Branch of the
Bank mentioned in paragraph 1 is located, such Act, including any amendments
thereto, being referred to in this Agreement as "the PPSA". In this Agreement,
"Collateral" shall refer to "Collateral or any item thereof". "Credit Agreement"
herein means, collectively, a commitment letter issued by the Bank to Hemosol
Inc. dated October 25, 2002, as amended and supplemented by a supplemental
agreement dated as of November 22, 2002, as further amended by amending
agreements dated April 29, 2003 and December 29, 2003, as assigned to, and
assumed by, the Customer pursuant to an Assignment, Assumption and Release
Agreement made as of the date hereof, and as further amended, modified,
supplemented, restated or replaced from time to time. "Event of Default" herein
means an event of default set forth in Section 10(a) of Schedule "A" to the
Credit Agreement.
The last day of any term of years reserved by any lease, verbal or
written, or any agreement therefor, now held or hereafter acquired by the
Customer is excepted out of the Collateral, but the Customer shall stand
possessed of any such reversion upon trust to assign and dispose thereof as the
Bank may direct in writing.
The fixed and specific mortgages and charges and the security interest
granted hereby do not and shall not extend to, and Collateral shall not include,
any agreement, right, franchise, license or permit (the "contractual rights") to
which the Customer is a party or of which the Customer has the benefit, to the
extent that the creation of the mortgage, charge or security interest therein
would constitute a breach of the terms of or permit any Person to terminate the
contractual rights, but the Customer shall hold its interest therein in trust
for the benefit of the Bank and shall assign such contractual rights to the Bank
forthwith upon obtaining the consent of the other party thereto.
Notwithstanding anything herein contained, the Collateral shall not
include the cash collateral pledged to the Bank in support of the indebtedness
under Credit No. 02 and Credit No. 03 provided for in the Credit Agreement.
2. The fixed and specific mortgages and charges and the security interest
granted under this Agreement secure payment and performance of all obligations,
debts and liabilities of the Customer to the Bank, present or future, direct, or
indirect, absolute or contingent, matured or not, at any time owing by the
Customer to the Bank in any currency or remaining unpaid by the Customer to the
Bank in any currency, whether arising from dealings between the Bank and the
Customer or from other dealings or proceedings by which the Bank may be or
become in any manner whatever a creditor of the Customer and wherever incurred,
and whether incurred by the Customer alone or with another or others and whether
as principal or surety, in each case, arising out of, under or relating to the
Credit No: 01 set forth in the Credit Agreement including pursuant to any
security, document or instrument issued in connection therewith and including
all interest, commissions, legal and other costs, charges and expenses
(collectively, the "Obligations").
3. The Customer hereby represents and warrants to the Bank that:
(a) The Customer is a limited partnership duly formed pursuant to a
limited partnership agreement and existing under the laws of the
Province of Ontario. The Customer is duly qualified, registered or
licensed in all jurisdictions where such qualification, registration
or licensing is required except where the failure to be so
qualified, registered or licensed would not reasonably be expected
to have a material adverse effect on the Customer. The Customer has
all requisite capacity, power and authority and, except for
regulatory approvals for the commercialization of Hemolink (TM) and
other products, all material licences, permits and approvals
necessary or advisable to carry on its business as now conducted and
to carry out the transactions contemplated by the documents and
agreements to which it is a signatory (except where a failure to
obtain or hold such license, permit or approval would not reasonably
be expected to have a material adverse effect on the Customer).
(b) There are no actions, suits, claims or proceedings (whether or not
purportedly on behalf of the Customer) pending or to the knowledge
of the Customer inquiries pending or to the knowledge of the
Customer actions, suits, claims or proceedings threatened in writing
against or adversely affecting the Customer before any government,
parliament, legislature, regulatory authority, agency, commission,
board or court or before any private arbitrator, mediator or referee
which in any case or in the aggregate would reasonably be expected
to have a material adverse effect on the Customer.
(c) All necessary action has been taken by the Customer to authorize the
execution, delivery and performance of the Credit Agreement and all
security, documents and instruments issued in connection therewith
(collectively, the "Documents"). The Documents have been duly
executed and delivered and constitute legal, valid and binding
obligations of the Customer, enforceable against the Customer by the
Bank in accordance with their respective terms, except to the extent
that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization, liquidation and
other laws of general application affecting creditors' rights
generally, equitable principles and the fact that the courts may
deny the granting or enforcement of equitable remedies.
(d) The execution, delivery and performance by the Customer of the
Documents and the consummation of the transactions contemplated
herein and therein do not conflict with, result in any material
breach or violation of, or constitute a default under, the terms,
conditions or provisions of the limited partnership agreement of, or
any material agreement relating to the Customer or of any law,
regulation, judgment, decree or order binding on or applicable to
the Customer or to which its property is subject and do not require
the consent or approval of any governmental body, agency or
authority or any other party, subject to obtaining the consent of
the Department of National Defence of Canada to the Customer
granting a security interest in its license from the Department of
National Defence of certain patents and processes.
(e) The Customer is in compliance with all laws, regulations, rules and
requirements having the force of law of any jurisdiction having
authority in relation to the Customer, its property or assets except
where such non-compliance would not reasonably be expected to have a
material adverse effect on the Customer.
(f) The written information provided by the Customer to the Bank,
including all financial information, is full, true and accurate in
all material respects.
(g) With the exception of intellectual property which may be licenced to
or by the Customer or subject to royalties or jointly or partly
owned and leased premises and leased equipment and licensed
equipment and assets such as computer software and similar
intangibles, all of the Collateral is, or, except in the case of
intellectual property, when the Customer acquires any right, title
or interest therein will be, the sole property of the Customer free
and clear of all security interests, mortgages, charges, hypothecs,
liens or other encumbrances except as set forth in Schedule "A"
hereto (the "Permitted Encumbrances"), provided that nothing
contained in this section 3(g) shall prohibit the Customer from
dealing with the Collateral in any manner not expressly prohibited
under section 4 of this Agreement.
(h) The Customer's chief executive address is located at the address
specified in paragraph 1.
(i) None of the Collateral consists of consumer goods.
4. The Customer hereby agrees that:
(a) the Customer will maintain its existence;
(b) the Customer will at all times comply in all material respects with
the terms of all material agreements and licences, and with all
applicable laws, regulations, bylaws, consents and permits;
2
(c) all operating accounts of the Customer shall be maintained with the
Bank as long as any of the credit facilities provided for in the
Credit Agreement remain outstanding or available;
(d) the Customer shall maintain, use and operate the Collateral and
shall carry on and conduct its business in each case in a proper,
efficient and commercially reasonable manner as would a prudent
owner;
(e) the Collateral insofar as it consists of goods (other than inventory
en route from suppliers or en route to customers or en route between
approved locations or on lease or consignment) will be kept at the
locations specified in Schedule "B" hereto or at such other
locations as the Bank has previously consented to and, subject to
the provisions of paragraph 4(k), none of the Collateral shall be
moved therefrom without the written consent of the Bank;
(f) the Customer shall cause the Collateral to be insured and kept
insured to the full insurable value thereof with reputable insurers
against loss or damage by fire and such other risks as the Bank may
reasonably require and shall maintain such insurance) with loss if
any payable to the Bank and shall lodge such policies or evidence
thereof with the Bank;
(g) the Customer shall pay all taxes, levies, assessments and government
fees or dues lawfully levied, assessed or imposed in respect of the
Collateral or the Customer's business operations or any part thereof
as and when the same shall become due and payable (provided that the
Customer shall be entitled to contest in good faith by appropriate
action initiated and diligently contested such taxes, levies,
assessments, fees or dues and, in the case of liens for such taxes,
levies, assessments, fees and dues, only if paid "under protest" or
there shall have been deposited with the Bank or, if required by
law, with a governmental authority, cash in an amount sufficient to
pay the amount of such claim together with any interest or penalties
thereon or a bond or other security reasonably satisfactory to the
Bank in an amount sufficient for such payment), and shall exhibit to
the Bank, upon reasonable written request, the receipts and vouchers
establishing such payment;
(h) the Customer shall duly observe and conform in all material respects
to all covenants, terms and conditions upon or under which the
Collateral is held;
(i) the Customer shall keep proper books of account in accordance with
sound business practice, shall furnish to the Bank such financial
information and statements and such information and statements
relating to the Collateral as the Bank may from time to time
require, and the Customer shall permit the Bank or its authorized
agents at any time during business hours upon reasonable notice at
the expense of the Customer to examine all books of account and
other financial records and reports relating to the Collateral and,
except in respect of the Customer's intellectual property and the
Customer's filings with securities regulatory authorities, stock
exchanges and similar bodies which are not otherwise available to
shareholders, to make copies thereof and take extracts therefrom;
(j) the Customer shall furnish to the Bank such information with respect
to the Collateral and the insurance thereon as the Bank may from
time to time reasonably require and shall give written notice to the
Bank of all litigation before any court, administrative board or
other tribunal affecting the Customer or the Collateral which would
reasonably be expected to have a material adverse effect on the
Customer or which involves a claim in excess of $300,000 in one
instance or $600,000 in aggregate;
(k) the Customer shall use its commercially reasonable efforts to defend
the title to the Collateral against all persons and shall keep the
Collateral free and clear of all security interests, mortgages,
charges, liens and other encumbrances except for Permitted
Encumbrances and those hereafter approved in writing by the Bank
prior to their creation or assumption, provided that the Customer
may dispose of any Collateral in the ordinary course of its business
and may dispose of assets which are obsolete, provided such assets
are replaced with assets of equivalent or higher value, or surplus
provided that nothing in this section 4(k) shall prohibit the
Customer from dealing with intellectual property in any manner
permitted under section 6 of this Agreement;
(l) the Customer shall, upon request by the Bank, execute and deliver
all such financing statements, certificates, further assignments and
documents and do all such further acts and things as may be
considered by the Bank to be necessary or desirable to give effect
to the intent of this Agreement;
(m) the Customer shall promptly notify the Bank in writing of any event
which occurs that would reasonably be expected to have a material
adverse effect upon the Collateral or upon the financial condition
of the Customer and immediately upon the Customer's acquisition of
rights in any vehicle, mobile home, trailer, boat, aircraft or
aircraft engine, shall promptly provide the Bank with full
particulars of such collateral;
(n) the Customer will not change its name or the location of its chief
executive office or place of business or sell, exchange, transfer,
assign, licence or lease or otherwise dispose of (including by way
of entering into joint venture or similar arrangements) or change
the use of the Collateral or any interest therein or modify, amend
or terminate any chattel paper, document of title, instrument,
security or intangible, without the prior written consent of the
Bank, except that the Customer may (i) until an Event of Default
occurs which is continuing, dispose of assets which are obsolete,
provided such assets are replaced with assets of equivalent or
higher value, or surplus, and (ii) until an Event of Default occurs
which is continuing for 10 days, sell or lease inventory in the
ordinary course of the Customer's business, provided that nothing in
this section 4(n) shall prohibit the Customer from dealing with
intellectual property in any manner permitted under section 6 of
this Agreement;
(o) the Customer shall not do any act, or omit to do any act, whereby
any of the Hemolink (TM) Patents may lapse or become abandoned or
dedicated to the public or unenforceable. "Hemolink (TM) Patents"
herein means those patents necessary for the conduct of the
Hemolink (TM) Business, from time to time, including those patents
listed in Schedule
3
"C" hereto. "Hemolink (TM) Business" herein means that portion of
the Customer's business that is reliant upon the commercial
exploitation, use or development of:
(i) the Hemolink (TM) Patents and the know how of, and other
technology used by, the Customer that is necessary for the
commercial exploitation, use or development thereof; and
(ii) the technology actually used by the Customer exclusively in
relation to the foregoing.
(p) the Customer shall not, in respect of any trademarks that are
integral to the commercialization, marketing and distribution of
Hemolink (TM):
(i) discontinue the use of any of such trademarks in respect of
which a registration has been made by the Customer, in order
to maintain all of such trademarks in full force free from any
claim of abandonment for non-use;
(ii) fail to use its best efforts to require its licensees to
maintain the quality of products and services offered under
any such trademarks that are subject to license agreements;
(iii) fail to employ all of such trademarks registered with any
Canadian or foreign authority with an appropriate notice of
such registration, to the extent required to preserve such
trademarks and the Customer's rights therein; and
(iv) knowingly do or permit any act or knowingly omit to do any act
whereby any of such trademarks may lapse or become invalid or
unenforceable.
5. For so long as no Event of Default has occurred which is continuing, the
Customer may use the Collateral in any lawful manner not inconsistent with this
Agreement, but the Bank shall have the right at any time and from time to time
to verify the existence and state of the Collateral in any manner the Bank may
consider appropriate and the Customer agrees to furnish all assistance and
information and to perform all such acts as the Bank may reasonably request in
connection therewith, and for such purpose shall permit the Bank or its agents
reasonable access during business hours upon reasonable notice to all places
where Collateral may be located and to all premises occupied by the Customer to
examine and inspect the Collateral and related records and documents, subject to
compliance with applicable health and safety laws.
6. Nothing contained in this Agreement shall restrict the ability of the
Customer or a subsidiary of the Customer to license the intellectual property
necessary for the conduct of the Hemolink (TM) Business to or with, or enter
into joint ventures, strategic alliances or similar arrangements respecting same
to or with, persons carrying on business outside North America without the
consent or approval of the Bank. Nothing contained in this Agreement shall
restrict the ability of the Customer (a) to sell, transfer or otherwise dispose
of any intellectual property which is not necessary for the conduct of the
Hemolink (TM) Business without the consent or approval of the Bank, (b) to
licence to third parties intellectual property which is not necessary for the
conduct of the Hemolink (TM) Business and to enter into, amend, surrender,
terminate, sell, assign or transfer joint ventures, strategic alliances and
similar arrangements and ventures respecting the intellectual property which is
not necessary for the conduct of the Hemolink (TM) Business without the consent
or approval of the Bank, (c) to sell, assign or transfer shares of a subsidiary
of the Customer without the consent or approval of the Bank if none of such
subsidiary's property, assets or undertaking is necessary for the conduct of the
Hemolink (TM) Business. The Bank agrees to take all actions necessary and to do
such acts and execute such documents as the Customer may require, at the
Customer's expense, but in a timely manner, to release the security over the
intellectual property that is not necessary for the conduct of the Hemolink (TM)
Business to the extent necessary in order to give effect to the terms, purpose
and intent of this section.
7. After an Event of Default occurs and for so long as same is continuing:
(a) the Bank may give notice to any or all account debtors of the Customer and
to any or all persons liable to the Customer under an instrument to make all
further payments to the Bank and any payments or other proceeds of Collateral
received by the Customer from account debtors or from any persons liable to the
Customer under an instrument, whether before or after such notice is given by
the Bank, shall be held by the Customer in trust for the Bank and paid over to
the Bank upon request; (b) the Bank may take control of all proceeds of
Collateral and may apply any money taken as Collateral to the satisfaction of
the Obligations secured hereby; (c) the Bank may hold as additional security any
increase or profits, except money, received from any Collateral in the Bank's
possession, and may apply any money received from such Collateral to reduce the
Obligations secured hereby and may hold any balance as additional security for
such part of the Obligations as may not yet be due, whether absolute or
contingent; (d) the Bank will not be obligated to keep any Collateral separate
or identifiable; and (e) in the case of any instrument, security or chattel
paper comprising part of the Collateral, the Bank will not be obligated to take
any necessary or other steps to preserve rights against other persons.
8. The Bank may have any Collateral comprising instruments, shares, stock,
warrants, bonds, debentures, debenture stock or other securities, registered in
its name or in the name of its nominee and following the occurrence of an Event
of Default which is continuing shall be entitled but not bound or required to
vote in respect of such Collateral at any meeting at which the holder thereof is
entitled to vote and, generally, to exercise any of the rights which the holder
of such Collateral may at any time have; but the Bank shall not be responsible
for any loss occasioned by the exercise of any of such rights or by failure to
exercise the same within the time limited for the exercise thereof.
9. Upon the occurrence of an Event of Default which is continuing, the Bank
may, but shall not be obliged to, perform any or all of the Customer's duties
hereunder, without waiving any rights to enforce this Agreement, and the
Customer shall pay to the Bank, forthwith upon written demand therefor, an
amount equal to the costs, fees and expenses incurred by the Bank in so doing
plus interest thereon from the date such costs, fees and expenses are incurred
until paid at the rate of 3% per annum over the Prime Lending Rate of the Bank
in effect from time to time. The "Prime Lending Rate of the Bank" means the
variable per annum, reference rate of interest as announced and adjusted by the
Bank from time to time for loans made by the Bank in Canada in Canadian dollars.
10. If an Event of Default occurs which is continuing, the Bank may withhold
any future advances and may declare that the Obligations shall immediately
become due and payable in full, and the Bank may proceed to enforce payment of
the Obligations and the Customer and the Bank shall have, in addition to any
other rights and remedies provided by law, the rights and remedies of a
4
debtor and a secured party respectively under the PPSA and other applicable
legislation and those provided by this Agreement. The Bank may take possession
of the Collateral, enter upon any premises of the Customer, otherwise enforce
this Agreement and enforce any rights of the Customer in respect of the
Collateral by any manner permitted by law and may use the Collateral in the
manner and to the extent that the Bank may consider appropriate and may hold,
insure, repair, process, maintain, protect, preserve, prepare for disposition
and dispose of the same and may require the Customer to assemble the Collateral
and deliver or make the Collateral available to the Bank at a reasonably
convenient place designated by the Bank.
11. Any notice, demand or other communication which may be or is required
to be given or made pursuant to this Agreement shall be in writing and shall be
deemed to have been sufficiently and effectively given if signed by or on behalf
of the party giving notice and delivered or transmitted by telecopier to the
party for which it is intended.
(a) Communications sent to the Customer shall be address as follows:
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxxx, XX X0X 0X0
Attention: President and Chief Executive Officer, Hemosol Corp.
Telecopier No.: (000) 000-0000
and a copy to:
Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP
0 Xxxxx Xxxxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxxxx Xxxxx/Xxxxx Xxxxx
Telecopier No.: (000) 000-0000
(b) Communications sent to the Bank shall be addressed as follows:
The Bank of Nova Scotia
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxx
Telecopier No.: (000) 000-0000
and a copy to:
Gowling Xxxxxxx Henderon LLP
Commerce Court West, Suite 4900
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxxxxx
Telecopier No.: (000) 000-0000
Any notice, demand or communication which may or is required to be given or made
shall be made or given as herein provided or to such other address or to such
other officer as a party may from time to time advise the other parties hereto
by notice in writing as aforesaid and shall not be deemed received until actual
receipt thereof by the party to whom such notice is given except if sent by
telecopier after 4:00 p.m., in which case it shall be deemed received on the
banking day (i.e. a day, other than a Saturday or Sunday, on which the offices
of the Bank are open for normal business in the City of Toronto, Ontario) next
following the date of transmission.
12. If an Event of Default occurs which is continuing, the Bank may take
proceedings in any court of competent jurisdiction for the appointment of a
receiver (which term shall include a receiver and manager) of the Collateral or
may by appointment in writing appoint any person to be a receiver of the
Collateral and may remove any receiver so appointed by the Bank and appoint
another in his stead; and any such receiver appointed by instrument in writing
shall, to the extent permitted by applicable law or to such lesser extent
permitted, have all of the rights, benefits and powers of the Bank hereunder or
under the PPSA or otherwise and without limitation have power (a) to take
possession of the Collateral, (b) to carry on all or any part or parts of the
business of the Customer, (c) to borrow money required for the seizure,
retaking, repossession, holding, insurance, repairing, processing, maintaining,
protecting, preserving, preparing for disposition, disposition of the Collateral
and for any other enforcement of this Agreement or for the carrying on of the
business of the Customer on the security of the Collateral in priority to the
security interest created under this Agreement, and (d) to sell, lease or
otherwise dispose of the whole or any part of the Collateral at public auction,
by public tender or by private sale, lease or other disposition either for cash
or upon credit, at such time and upon such terms and conditions as the receiver
may determine provided that if any such disposition involves deferred payment
the Bank will not be accountable for and the Customer will not be entitled to be
credited with the proceeds of any such disposition until the monies therefor are
actually received; and further provided that any such receiver shall be deemed
the agent of the Customer and the Bank shall not be in any way responsible for
any misconduct or negligence of any such receiver.
13. Any proceeds of any disposition of any Collateral may be applied by the
Bank to the payment of expenses incurred or paid in connection with seizing,
repossessing, retaking, holding, repairing, processing, insuring, preserving,
preparing for disposition and disposing of the Collateral (including reasonable
solicitor's fees and legal expenses and any other reasonable expenses), and any
5
balance of such proceeds may be applied by the Bank towards the payment of the
Obligations in such order of application as the Bank may from time to time
effect. All such expenses and all amounts borrowed on the security of the
Collateral under paragraph 11 hereof shall bear interest at the rate of 3% per
annum over the Prime Lending Rate of the Bank in effect from time to time, shall
be payable by the Customer upon demand and shall be Obligations under this
Agreement. If the disposition of the Collateral fails to satisfy the Obligations
secured by this Agreement and the expenses incurred by the Bank, the Customer
shall be liable to pay any deficiency to the Bank on demand.
14. The Customer and the Bank further agree that:
(a) the Bank may grant extensions of time and other indulgences, take
and give up security, accept compositions, grant releases and
discharges and otherwise deal with the Customer, debtors of the
Customer, sureties and others and with the Collateral or other
security as the Bank may see fit without prejudice to the liability
of the Customer and the Bank's rights under this Agreement;
(b) this Agreement shall not be considered as satisfied or discharged by
any intermediate payment of any part of the Obligations but shall
constitute and be a continuing security to the Bank for a current or
running account and shall be in addition to and not in substitution
for any other security now or hereafter held by the Bank;
(c) nothing in this Agreement shall obligate the Bank to make any loan
or accommodation to the Customer or extend the time for payment or
satisfaction of the Obligations;
(d) any failure by the Bank to exercise any right set out in this
Agreement shall not constitute a waiver thereof; nothing in this
Agreement or in the obligations secured by this Agreement shall
preclude any other remedy by action or otherwise for the enforcement
of this Agreement or the payment in full of the Obligations secured
by this Agreement;
(e) all rights of the Bank under this Agreement shall be assignable
without the consent of the Customer provided that:
(i) if an Event of Default is not currently existing and
continuing and the assignee is other than MDS or a Canadian
financial institution with a tier 1 consolidated regulatory
capital in excess of $500,000,000 and such assignment does not
in itself result in increased costs to the Customer, the
Customer's prior written consent shall be required, not to be
unreasonably withheld; and
(ii) in all instances the Bank has also assigned to the assignee
the indebtedness (the "Indebtedness") owing under Credit No.:
01 provided for in the Credit Agreement, the Guarantee issued
by MDS Inc. dated November 22, 2002, as amended (if the
assignee is other than MDS Inc.) and all other outstanding
security granted to the Bank securing the Indebtedness.
(f) all rights of the Bank under this Agreement shall enure to the
benefit of its successors and permitted assigns and all obligations
of the Customer under this Agreement shall bind the Customer, his
heirs, executors, administrators, successors and assigns;
(g) if more than one Customer executes this Agreement, their obligations
under this Agreement shall be joint and several, and the Obligations
shall include those of all or any one or more of them;
(h) if the Customer is a corporation, the Limitation of Civil Rights Act
of the province of Saskatchewan shall have no application to this
Agreement, or to any agreement or instrument renewing or extending
or collateral to this Agreement or to the rights, powers or remedies
of the Bank under this Agreement;
(i) this Agreement shall be governed in all respects by the laws of the
jurisdiction in which the Branch of the Bank mentioned in paragraph
1 is located;
(j) the time for attachment of the security interest created hereby has
not been postponed and is intended to attach when this Agreement is
signed by the Customer and attaches at that time to Collateral in
which the Customer then has any right, title or interest and
attaches to Collateral in which the Customer subsequently acquires
any right, title or interest at the time when the Customer first
acquires such right, title or interest;
(k) the Customer acknowledges that if it amalgamates with any other
corporation or corporations then (i) the term "Customer", where used
in this Agreement, will extend to and include each of the
amalgamating corporations and the amalgamated corporation, and (ii)
the term "Obligations", where used in this Agreement, will extend to
and include the obligations of the amalgamated corporation arising
out of or relating to the credit facilities set forth in the Credit
Agreement; and
(l) if there is any conflict between the provisions contained in this
Agreement and the provisions contained in the Credit Agreement, the
provisions of the Credit Agreement shall have priority over and
shall override the provisions contained in this Agreement; provided,
however, that the fact that one document addresses a subject matter
which is not addressed in the other document shall not, by itself,
be deemed to be an inconsistency.
6
The Customer acknowledges receiving a copy of this Agreement.
Dated as of the ____ day of ___________________________, 2004.
HEMOSOL LP
BY ITS GENERAL PARTNER HEMOSOL CORP.
Per: ________________________________________
Name:
Title:
7
SCHEDULE "A"
PERMITTED ENCUMBRANCES
PART I - SPECIFIC ENCUMBRANCES
1. Easement registered on June 6, 1963 as No. TT154986 in favour of
Trans-Canada PipeLines Limited (in respect of Block 1 only).
2. Restrictions registered on February 6, 1964 as No. TT162545Z in favour
of Her Majesty the Queen in Right of the Province of Ontario as
represented by the Minister of Highways restricting access to Xxxxxxx
Xx. 000 from the Lands which appear to be perpetual.
3. Notice registered on February 12, 1973 as No. VS248789 being an
amendment of the Toronto-Malton Airport Zoning Regulations and amended
further by a notice registered on March 27, 2000 as No. LT2057426 by
Her Majesty the Queen in Right of the Department of Transport Canada
which restrict the height of buildings and structures that can be
erected on the Lands.
4. Financial Agreement registered on December 14, 1989 as No. LT1082614
between Runnymede Development Corporation Limited, The Corporation of
the City of Mississauga and The Regional Municipality of Peel, as
amended by an agreement registered on November 14, 2001 as Xx. XX000000
between Hemosol Inc., The Regional Municipality of Peel and Runnymede
Development Corporation Limited.
5. Easement registered on December 14, 1989 as No. XX0000000 in favour of
Mississauga Hydro-Electric Commission and Xxxx Canada.
6. Easement registered on August 1, 1991 as No. LT1241703 in favour of The
Regional Municipality of Peel (in respect of Block 2 only).
PART II - ADDITIONAL PERMITTED ENCUMBRANCES
(i) any Inchoate Lien;
(ii) liens, title defects or irregularities, including, without limitation,
easements, rights of way, encroachments, restrictive covenants,
servitudes or other similar rights in land granted to or reserved by
other Persons, rights of way for sewers, drains, steam, gas and oil
pipelines, gas and water mains, electric light and power lines,
telegraph and telephone lines and other forms of communication, poles,
wires or other incidental equipment and other similar purposes granted
to or reserved by other Persons, or zoning or building by-laws and
ordinances or other restrictions as to the use of land, which liens,
title defects or irregularities do not in the aggregate materially
adversely affect the use of the Lands or the construction or operation
of the Project for the purposes for which they are held by the Customer
including the construction, development and operation of the Project;
and mortgages of and other Liens against the said liens, title defects
or irregularities;
(iii) any right reserved to or vested in any governmental authority or other
public agency by the terms of any lease, license, franchise, grant or
permit acquired by such Person, or by any statutory provision to
terminate any such lease, license, franchise, grant or permit, or to
require annual or other periodic payments as a condition of the
continuance thereof;
(iv) security or deposits given to a public utility, any governmental
authority or other public authority when required by such utility,
governmental authority or other public authority in connection with the
operations of such Person and in the ordinary course of its business or
the supply of services to such Person;
(v) reservations, limitations, provisos and conditions, if any, expressed
in any original grants from Her Majesty the Queen in right of Canada or
Her Majesty the Queen in right of Ontario of any land or interest
therein, and statutory exceptions to title in any grants from Her
Majesty the Queen in right of Canada or Her Majesty the Queen in right
of Ontario;
(vi) the exceptions and qualifications set out in Section 44(1) of the Land
Titles Act (Ontario);
(vii) Liens securing appeal bonds or other similar Liens arising in
connection with court proceedings (including, without limitation,
surety bonds, security for costs of litigation where required by law,
letters of credit, Liens arising out of judgments or awards with
respect to which an appeal or proceedings for review is being
prosecuted in good faith and with respect to which there shall have
been secured a stay of execution pending the appeal of proceedings for
review or for which security acceptable to the Bank has been posted by
the Person) or any other instruments serving similar purpose;
(viii) applicable municipal and other governmental restrictions, including
municipal by-laws and regulations (including site specific by-laws)
provided same have been materially complied with;
(ix) Purchase Money Liens securing purchase money obligations in an
aggregate amount not exceeding $500,000 per annum;
(x) any Lien granted in favour of the Bank including the Charge/Mortgage
registered in the Land Registry Office for Land Titles Division of Peel
on November 22, 2002 as No. PR351375;
(xi) any Lien granted in connection with indebtedness pursuant to Credit No.
02 and Credit No. 03 set forth in the Credit Agreement;
(xii) any Lien consented to in writing by the Bank;
(xiii) Liens for the excess of the amount of any past due Taxes for which a
final assessment has not been received over the amount of such Taxes as
estimated and paid by the Person acting prudently and reasonably;
(xiv) Liens or deposits in connection with bids, tenders, contracts or
expropriation proceedings of the Person or to secure utilities,
workers' compensation, employment insurance or other similar statutory
assessments or to secure costs of litigation when required by
applicable law, and surety or appeal bonds in connection with such
litigation;
(xv) deposits of cash or securities in connection with any Liens referred to
in paragraphs (i), (ii) and (iii) above;
(xvi) assignments of insurance provided to landlords (or their mortgagees)
pursuant to the terms of any lease and Liens or rights reserved in or
exercised under any lease for rent or compliance with the terms of such
lease;
(xvii) mechanics', workers', repairers or other like possessory liens, arising
in the ordinary course of business for amounts the payment of which is
either not delinquent or is being contested in good faith by
appropriate proceedings and for which security acceptable to the Bank
has been posted by the Person;
(xviii) Liens in connection with indebtedness in respect of services rendered
to or to be rendered or goods or products provided or to be provided to
the Person, including rent and other payments under leases, contracts,
hire-purchase agreements and agreements for sale;
(xix) plans of subdivision, site plans, municipal agreements or restrictive
covenants affecting the use to which the Lands may be put, provided
that same are complied with in all material respects and do not
materially detract from the value of the Lands or materially impair the
construction, development and operation of the Project;
(xx) rights and interests created by notice registered by the Ontario
Ministry of Transportation or similar authorities with respect to
proposed highways and which do not materially detract from the value of
the Lands or materially impair the construction, development and
operation of the Project;
(xxi) certificates of pending litigation that may be registered against any
real property or any interest therein of the Person in respect of any
action or proceeding against the Person or in which it is a defendant,
but with respect to which action or proceeding no judgment, award or
attachment against the Person has been granted or made and which the
Person is defending in good faith and in respect of which the Person
has posted security satisfactory to the Bank provided the certificate
of pending litigation is discharged from title within 30 days of its
registration;
(xxii) the granting by the Person in the ordinary course of its business of
any lease, sublease, tenancy or right of occupancy to any person in
respect of property owned or leased by the Person other than in respect
of the Lands;
(xxiii) the right of distress in favour of any landlord of the Person;
(xxiv) Liens which do not mortgage, charge, create a security interest in or
otherwise encumber any property or assets of the Borrower that are
necessary to the conduct of the Hemolink (TM) Business;
(xxv) any licences (in or out by the Borrower) of intellectual property, any
royalties or other payments by or to the Borrower on any intellectual
property, or joint or part ownership by the Borrower of intellectual
property provided, notwithstanding the foregoing, nothing herein
permits the licencing out or entering into of joint venture, joint or
partial ownership arrangements or similar arrangements respecting
intellectual property necessary for the conduct of the Hemolink (TM)
Business other than arrangements with licencees or partners which do
not carry on business within North America; and
(xxvi) the security interests perfected by registrations nos. 20030416 0914
1146 8427, 20030121 1643 1616 0944, 20021203 1125 1146 7993, 20020102
0000 0000 0000, 20011227 1818 1531 0426, 20011213 1430 1715 8757,
20010417 0908 1322 1131 (as amended by registration no. 20020116 1113
1322 1238) and 20000508 1433 1146 5863 pursuant to the Personal
Property Security Act (Ontario).
In this Schedule A:
"INCHOATE LIEN" means, with respect to any property or asset of any Person, the
following Liens:
(i) any Lien for taxes, rates or assessments not yet due or delinquent or
which are due or delinquent but the validity of which is being
contested in good faith by appropriate proceedings and for which
security acceptable to the Bank has been posted by the Person with the
appropriate Person;
(ii) any liens of carriers, warehousemen, contractors, subcontractors,
suppliers, mechanics or materialmen or other similar common law liens
or Liens so long as such charges are not yet due or such charges are
being contested in good faith by appropriate proceedings and for which
security acceptable to the Bank has been posted by the Person with the
appropriate Person; and
(iii) undetermined or inchoate liens, including statutory liens arising or
potentially arising, privileges or charges incidental to current
operations which have not at such time been filed or registered
pursuant to law or served upon the Person or which, although filed and
registered, relate to obligations not due or delinquent;
"LANDS" means the real property known municipally as 0000 Xxxxxxxxxx Xxxx.,
Xxxxxxxxxxx, Xxxxxxx X0X 0X0;
2
"LIENS" means any mortgage, hypothec, title retention, pledge, lien, charge,
security interest or other encumbrance whatsoever, most recent whether fixed or
floating and howsoever created or arising;
"PERSON" includes an individual, a partnership, a corporation, a trust, an
unincorporated organization, a government or any department or agency thereof or
any other entity whatsoever and the heirs, executors, administrators or other
legal representatives of an individual;
"PROJECT" means the construction of the manufacturing facility for the
production and commercialization of Hemolink (TM) on the Lands;
"PURCHASE MONEY LIEN" means any Lien on any asset, other than accounts
receivable or inventory, of a Person which is assumed, created, guaranteed or
reserved to secure the unpaid purchase price of such asset, provided that any
such Lien is limited to the asset so acquired and does not secure an amount in
excess of the purchase price thereof, such purchase price not to exceed the fair
market value of the purchased asset, and includes an extension, renewal or
refunding of the Indebtedness secured by such Lien, provided that the principal
amount thereof is not thereby increased;
"TAXES" means, at any time, all taxes, rates, levies, imposts, assessments,
government fees, dues, stamp taxes, duties, charges to tax, fees, deductions,
withholdings and similar impositions, whether current or deferred, that are
payable to, levied, collected, withheld or assessed by, any governmental
authority with taxing authority;
3
SCHEDULE "B"
LOCATION OF COLLATERAL
MEADOWPINE BOULEVARD
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX X0X 0X0
SCHEDULE "C"
SPECIFIC ASSIGNMENT OF CONTRACT
THIS SPECIFIC ASSIGNMENT OF CONTRACT (as amended, modified, supplemented,
restated, or replaced from time to time, this "Agreement"), dated as of
______________________________, 2004, made by HEMOSOL LP, a limited partnership
existing under the laws of Ontario (the "Grantor"), in favour of THE BANK OF
NOVA SCOTIA (the "Lender").
WHEREAS as general and continuing collateral security for the payment and
fulfillment of the Secured Obligations, the Grantor has agreed, inter alia, to
assign and pledge to the Lender all the Grantor's right, title, estate, interest
in and to the Contract.
NOW THEREFORE for good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged,) the Grantor agrees as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 CERTAIN TERMS. All capitalized terms not otherwise defined herein,
including "Event of Default", shall have the meaning ascribed thereto in the
General Security Agreement. In addition, in this Agreement, unless the context
otherwise requires, the following words and expressions have the meaning set
forth below (such definitions to be equally applicable to the singular and
plural forms thereof):
"Agreement" is defined in the preamble.
"Contract" means the EPC contract dated as of August 8, 2000 between Hemosol
Inc. and SNC Lavalin Inc., as amended pursuant to a Construction Contract
Amending Agreement made as of July 1, 2002, as further amended pursuant to a
Construction Contract-Second Amending Agreement made as of December 19, 2002, as
further amended pursuant to a Construction Contract-Third Amending Agreement
made as of January 30, 2003, and as assigned to the Grantor pursuant to the
Contribution Agreement between Hemosol Inc. and the Grantor dated the date
hereof and as the same may be further amended, modified, supplemented, restated
or replaced from time to time.
"Credit Agreement" means the commitment letter issued by the Lender to Hemosol
Inc. dated October 25, 2002, as amended and supplemented by a supplemental
agreement dated as of November 22, 2002, as further amended by amending
agreements dated April 29, 2003 and December , 2003, as assigned to, and
assumed by, the Grantor pursuant to an Assignment, Assumption and Release
Agreement made as of the date hereof, as such agreement may be further amended,
modified, supplemented, restated or replaced from time to time.
"General Security Agreement" means the general security agreement issued by the
Grantor to the Lender dated the date hereof.
"Grantor" is defined in the preamble.
"Lender" is defined in the preamble.
"Mechanical Functionality Guarantee" means the obligation of SNC Lavalin Inc. to
correct deficiencies noted during the mechanical functionality test detailed in
Appendix "D" to the Contract.
"Person" includes an individual, a partnership, a corporation, a trust, an
unincorporated association, a government or any department or agency thereof or
any other entity whatsoever and the heirs, executors, administrators or other
legal representatives of an individual.
"Secured Obligations" shall mean the "Obligations" as defined in the General
Security Agreement together with all costs and expenses incurred by the Lender
in enforcing any rights hereunder or in connection with the said Obligations.
ARTICLE 2
ASSIGNMENT, ETC.
SECTION 2.1 ASSIGNMENT. Upon and subject to the terms, conditions and provisions
herein contained, the Grantor hereby assigns, transfers and sets over to and in
favour of the Lender, as and by way of a fixed and specific assignment all of
its right, title, estate and interest in, to, under and in respect of:
(a) the Contract, and all benefits, powers and advantages of the Grantor
to be derived therefrom, including any licenses, permits, plans and
specifications, building and development permissions, performance
bonds, labour and material bonds, completion bonds, letters of
credit, letters of guarantee, Mechanical Functionality Guarantee, or
any other documents or instruments affecting or relating to the
Contract and all covenants, obligations and agreements of the
parties thereunder and otherwise to enforce the rights of the
Grantor thereunder in the name of the Grantor; and
(b) all revenues and other moneys now due and payable or hereafter to
become due and payable to the Grantor thereunder or in connection
therewith by the other party to the Contract or receivable by the
Grantor pursuant to or in connection with the Contract,
to be held by the Lender as general and continuing security for the payment and
satisfaction of all Secured Obligations of the Grantor whether for principal,
interest, costs, fees, expenses or otherwise.
SECTION 2.2 NO LIABILITY. Nothing herein contained shall render the Lender, its
agents, directors, officers, employees or any other Persons for whom the Lender
is at law responsible, liable to any Person for the fulfilment or non-fulfilment
of the obligations, covenants and agreements, including but not limited to the
payment of any moneys thereunder or in respect thereto, of the Grantor under the
Contract. Notwithstanding the foregoing, the Grantor hereby indemnifies and
agrees to save and hold harmless the Lender, its agents, directors, officers and
employees from and against any and all claims, demands, actions, causes of
action,
-2-
losses, suits, damages and costs whatsoever of any Person arising directly or
indirectly from or out of the Contract except as a result of the gross
negligence or wilful misconduct of the Lender.
SECTION 2.3 NOTICE; REGISTRATION. Following the occurrence of an Event of
Default which is continuing, the Lender shall have the right at any time to
serve this Agreement or notice thereof on any party to the Contract. The Lender
shall also have the right at any time and without notice to the Grantor to cause
this Agreement or notice thereof to be registered or filed in any place or
office where the Lender or its counsel deem advisable or necessary.
SECTION 2.4 PERFORMANCE UNTIL DEFAULT AND ATTORNEY OF THE GRANTOR. The Lender,
as attorney or agent of the Grantor and in its name, may but shall not be
obliged to, at any time and from time to time after the occurrence of an Event
of Default which is continuing, exercise any of the rights, powers, authority
and discretions which under the terms of the Contract could be exercised by the
Grantor with respect thereto, all of which is consented to by the Grantor.
ARTICLE 3
REPRESENTATIONS AND COVENANTS
SECTION 3.1 REPRESENTATIONS. The Grantor represents and warrants to the Lender
that:
(a) all of the representations and warranties contained in the General
Security Agreement are true, correct and complete in all material
respects as of the date hereof;
(b) as of the date hereof, the Contract is a valid and subsisting
agreement in full force and effect and the August 8, 2000 EPC
contract referred to in the definition of Contract herein is
unmodified except as set forth in the definition of Contract herein,
and there are no defaults under the Contract by the Grantor; and
(c) as of the date hereof, the Contract constitutes the entire agreement
between the Grantor and the other party thereto in respect of the
services contemplated therein.
SECTION 3.2 COVENANTS. The Grantor agrees that so long as any portion of the
Secured Obligations shall remain unpaid and the credit facilities provided for
in the Credit Agreement are not terminated, the Grantor hereby agrees to be
bound by the covenants in the Credit Agreement and the General Security
Agreement.
SECTION 3.3 FURTHER ASSURANCES. The Grantor hereby covenants and agrees with the
Lender that it shall from time to time and at all times hereafter upon written
request so to do, make, do, execute and deliver or cause to be made, done,
executed and delivered all such further acts, deeds, assurances and things as
may be reasonably required by the Lender for more effectually implementing and
carrying out the true intent and meaning of this Agreement.
-3-
ARTICLE 4
DEFAULT
SECTION 4.1 RIGHTS OF LENDER UPON A DEFAULT. Following the occurrence of an
Event of Default which is continuing, without limiting the rights of the Lender
under or pursuant to this Agreement, the Credit Agreement, any other security
provided by the Grantor to the Lender pursuant to or in connection with the
Credit Agreement or otherwise provided by law, the Lender shall be entitled and
shall have the authority by itself or through its agents:
(a) to renew, amend or otherwise deal (including without limitation, the
authority to demand, xxx for, recover, receive and give receipts for
all revenue or other moneys) with the Contract on such terms as it
may deem appropriate;
(b) to perform, at the Grantor's expense any and all obligations or
covenants of the Grantor under the Contract and to enforce
performance by the other party to the Contract of its obligations,
covenants and agreements thereunder;
(c) to deal with the Contract to the same extent as the Grantor could
do; and
(d) to take possession of and collect the revenues and other moneys of
all kinds payable to the Grantor in respect of the Contract and pay
therefrom all reasonable expenses and charges, the payment of which
may be necessary to preserve and protect the Contract,
the whole without any liability or responsibility of any kind on the part of the
Lender or its agents except in connection with their gross negligence or wilful
misconduct.
SECTION 4.2 EXERCISE OF POWERS. Where any discretionary powers hereunder are
vested in the Lender or its agents, the same may be exercised by an officer or
manager of the Lender or its appointed agents, as the case may be.
ARTICLE 5
GENERAL
SECTION 5.1 NO RELEASE. This Agreement shall remain in full force and effect
without regard to, and the obligations of the Grantor shall not be affected or
impaired by:
(a) any amendment, modification, replacement of or addition or
supplement to the Credit Agreement or any other security provided to
the Lender; or
(b) any exercise or non-exercise of any right, remedy, power or
privilege in respect of this Agreement, the Credit Agreement or any
other security provided to the Lender; or
-4-
(c) any waiver, consent, extension, indulgence or other action, inaction
or admission under or in respect of this Agreement, the Credit
Agreement or any other security provided to the Lender; or
(d) any default by the Grantor under, or any invalidity or
unenforceability of, or any limitation of the liability of the
Grantor or on the method or terms of payment under, or any
irregularity or other defect in the Credit Agreement or any other
security provided to the Lender; or
(e) any merger, consolidation or amalgamation of the Grantor into or
with any other Person; or
(f) any insolvency, bankruptcy, liquidation, reorganization,
arrangement, composition, winding-up, dissolution or similar
proceeding involving or affecting the Grantor.
SECTION 5.2 NO PARTNERSHIP. Nothing herein contained shall be deemed or
construed by the parties hereto or by any third party as creating the
relationship of partnership or of joint venture between the Grantor and the
Lender, it being understood and agreed that none of the provisions herein
contained or any acts of the Lender or of the Grantor shall be deemed to create
any relationship between the Lender and the Grantor other than the relationship
of assignee and grantor.
SECTION 5.3 RIGHTS AND REMEDIES CUMULATIVE. The rights or remedies given to the
Lender hereunder shall be cumulative of and not substituted for any rights or
remedies to which the Lender may be entitled under the Credit Agreement or any
other security provided to the Lender pursuant to or in connection with the
Credit Agreement or at law and may be exercised whether or not the Lender has
pursued or is then pursuing any other such rights and remedies. Further, nothing
in this Agreement shall curtail or limit the remedies of the Lender as permitted
either by law or in any statute to a creditor, all such remedies being in
addition to and not in substitution for any other rights of the Lender under
this Agreement, the Credit Agreement or any other security provided to the
Lender pursuant to or in connection with the Credit Agreement.
SECTION 5.4 TIME OF ESSENCE. Time shall be of the essence of this Agreement.
SECTION 5.5 WAIVER. No consent or waiver, express or implied, by the Lender to
or of any breach or default by the Grantor in performance of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance by the Grantor hereunder. Failure on
the part of the Lender to complain of any act or failure to act of the Grantor
or to declare the Grantor in default, irrespective of how long such failure
continues, shall not, by itself, constitute a waiver by the Lender of its rights
hereunder.
SECTION 5.6 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall be deemed an original and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
-5-
ARTICLE 6
MISCELLANEOUS PROVISIONS
SECTION 6.1 AMENDMENTS, ETC. No amendment to or waiver of any provision of this
Agreement nor consent to any departure by the Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Lender,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it is given.
SECTION 6.2 PROTECTION OF COLLATERAL. Upon the occurrence of an Event of Default
which is continuing, the Lender may from time to time, at its option: (a)
perform any act which the Grantor agrees hereunder to perform and which the
Grantor shall fail to perform; and (b) take any other action which the Lender
reasonably deems necessary for the maintenance, preservation or protection of
any of the assigned rights or of its security interest therein.
SECTION 6.3 ADDRESSES FOR NOTICES. Any notice or communication to be given under
this Agreement to the Grantor shall be given in accordance with Section 10 of
the General Security Agreement.
SECTION 6.4 SECTION CAPTIONS. Section captions used in this Agreement are for
convenience of reference only, and shall not affect the construction of this
Agreement.
SECTION 6.5 SEVERABILITY. Wherever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
SECTION 6.6 CONFLICTS. In the event of any conflict between the provisions
hereunder and the provisions of the Credit Agreement then, notwithstanding
anything contained herein, the provisions contained in the Credit Agreement
shall prevail and the provisions of this agreement will be deemed to be amended
to the extent necessary to eliminate such conflict. If any act or omission of
the Grantor is expressly permitted under the Credit Agreement but is expressly
prohibited hereunder, such act or omission shall be permitted. If any act or
omission is expressly prohibited hereunder, but the Credit Agreement does not
expressly permit such act or omission, or if any act is expressly required to be
performed hereunder but the Credit Agreement does not expressly relieve the
Grantor from such performance, such fact shall not constitute a conflict between
the applicable provisions hereunder and the provisions of the Credit Agreement.
SECTION 6.7 GOVERNING LAW, ENTIRE AGREEMENT, ETC. This Agreement shall be
governed by and construed in accordance with the internal laws of the Province
of Ontario, except to the extent that the validity or perfection of the security
interest hereunder, or remedies hereunder, in respect of particular collateral
are governed by the laws of a jurisdiction other than the Province of Ontario.
This Agreement and the other Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and supersede any
prior agreements, written or oral, with respect thereto. This Agreement shall
enure to the
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benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
SECTION 6.8 ASSIGNABILITY. All rights of the Lender under this Agreement shall
be assignable without the consent of the Grantor provided that:
(a) if an Event of Default is not currently existing and continuing and
the assignee is other than MDS Inc. or a Canadian financial
institution with a tier 1 consolidated regulatory capital in excess
of $500,000,000 and such assignment does not in itself result in
increased costs to the Grantor, the Grantor's prior written consent
shall be required, not to be unreasonably withheld; and
(b) in all instances the Lender has also assigned to the assignee the
indebtedness (the "Indebtedness") owing under Credit No.: 01
provided for in the Credit Agreement, the Guarantee issued by MDS
Inc. dated November 22, 2002 (if the assignee is other than MDS
Inc.) and all other outstanding security granted to the Bank
securing the Indebtedness.
IN WITNESS WHEREOF the Grantor has duly executed this Agreement on the date
first written above.
HEMOSOL LP
BY ITS GENERAL PARTNER HEMOSOL CORP.
Per: ________________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By: ________________________________________
Name:
Title:
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ASSIGNMENT OF CONTRACTS
THIS ASSIGNMENT OF CONTRACTS (as amended, modified, supplemented,
restated, or replaced from time to time, this "Agreement"), dated as of
______________________________, 2004, made by HEMOSOL LP, a limited partnership
existing under the laws of Ontario (the "Grantor"), in favour of THE BANK OF
NOVA SCOTIA (the "Lender").
WHEREAS as general and continuing collateral security for the payment and
fulfillment of the Secured Obligations, the Grantor has agreed, inter alia, to
assign and pledge to the Lender all the Grantor's right, title, estate, interest
in and to the Contracts.
NOW THEREFORE for good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged,) the Grantor agrees as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 CERTAIN TERMS. All capitalized terms not otherwise defined herein,
including "Event of Default", shall have the meaning ascribed thereto in the
General Security Agreement. In addition, in this Agreement, unless the context
otherwise requires, the following words and expressions have the meaning set
forth below (such definitions to be equally applicable to the singular and
plural forms thereof):
"Agreement" is defined in the preamble.
"Contracts" means those agreements, documents and instruments (other than leases
and subleases) entered into by the Grantor relating to the construction or
development of the facility located at 0000 Xxxxxxxxxx Xxxx., Xxxxxxxxxxx,
Xxxxxxx or the business carried on by the Grantor, including without limitation
those contracts listed on Schedule "A" attached hereto, as the same may be
amended, modified, supplemented, restated or replaced from time to time.
"Credit Agreement" means the commitment letter issued by the Lender to Hemosol
Inc. dated October 25, 2002, as amended and supplemented by a supplemental
agreement dated as of November 22, 2002, as further amended by amending
agreements dated April 29, 2003 and December 29, 2003, as assigned to, and
assumed by, the Grantor pursuant to an Assignment, Assumption and Release
Agreement made as of the date hereof, as such agreement may be further amended,
modified, supplemented, restated or replaced from time to time.
"General Security Agreement" means the general security agreement issued by the
Grantor to the Lender dated the date hereof.
"Grantor" is defined in the preamble.
"Lender" is defined in the preamble.
"Person" includes an individual, a partnership, a corporation, a trust, an
unincorporated association, a government or any department or agency thereof or
any other entity whatsoever and the heirs, executors, administrators or other
legal representatives of an individual.
"Secured Obligations" shall mean the "Obligations" as defined in the General
Security Agreement together with all costs and expenses incurred by the Lender
in enforcing any rights hereunder or in connection with the said Obligations.
ARTICLE 2
ASSIGNMENT, ETC.
SECTION 2.1 ASSIGNMENT. Upon and subject to the terms, conditions and provisions
herein contained, the Grantor hereby assigns, transfers and sets over to and in
favour of the Lender, as and by way of a fixed and specific assignment all of
its right, title, estate and interest in, to, under and in respect of:
(a) the Contracts, and all benefits, powers and advantages of the
Grantor to be derived therefrom or any other documents or
instruments affecting or relating to the Contracts and all
covenants, obligations and agreements of the parties thereunder and
otherwise to enforce the rights of the Grantor thereunder in the
name of the Grantor; and
(b) all revenues and other moneys now due and payable or hereafter to
become due and payable to the Grantor thereunder or in connection
therewith by the other party to the Contracts or receivable by the
Grantor pursuant to or in connection with the Contracts,
to be held by the Lender as general and continuing security for the payment and
satisfaction of all Secured Obligations of the Grantor whether for principal,
interest, costs, fees, expenses or otherwise.
SECTION 2.2 NO LIABILITY. Nothing herein contained shall render the Lender, its
agents, directors, officers, employees or any other Persons for whom the Lender
is at law responsible, liable to any Person for the fulfilment or non-fulfilment
of the obligations, covenants and agreements, including but not limited to the
payment of any moneys thereunder or in respect thereto, of the Grantor under the
Contracts. Notwithstanding the foregoing, the Grantor hereby indemnifies and
agrees to save and hold harmless the Lender, its agents, directors, officers and
employees from and against any and all claims, demands, actions, causes of
action, losses, suits, damages and costs whatsoever of any Person arising
directly or indirectly from or out of the Contracts except as a result of the
gross negligence or wilful misconduct of the Lender.
SECTION 2.3 NOTICE; REGISTRATION. Following the occurrence of an Event of
Default which is continuing, the Lender shall have the right at any time to
serve this Agreement or notice thereof on any party to the Contracts. The Lender
shall also have the right at any time and without notice to the Grantor to cause
this Agreement or notice thereof to be registered or filed in any place or
office where the Lender or its counsel deem advisable or necessary.
-2-
SECTION 2.4 PERFORMANCE UNTIL DEFAULT AND ATTORNEY OF THE GRANTOR. The Lender,
as attorney or agent of the Grantor and in its name, may but shall not be
obliged to, at any time and from time to time after the occurrence of an Event
of Default which is continuing, exercise any of the rights, powers, authority
and discretions which under the terms of the Contracts could be exercised by the
Grantor with respect thereto, all of which is consented to by the Grantor.
ARTICLE 3
REPRESENTATIONS AND COVENANTS
SECTION 3.1 REPRESENTATIONS. The Grantor represents and warrants to the Lender
that:
(a) all of the representations and warranties contained in the General
Security Agreement are true, correct and complete in all material
respects as of the date hereof;
(b) as of the date hereof, each of the Contracts is a valid and
subsisting agreement in full force and effect, the Contracts
referred to in Schedule "A" are unmodified and there are no defaults
under the Contracts by the Grantor; and
(c) as of the date hereof, each of the Contracts constitutes the entire
agreement between the Grantor and the other party thereto in respect
of the subject matter contemplated therein.
SECTION 3.2 COVENANTS. The Grantor agrees that so long as any portion of the
Secured Obligations shall remain unpaid and the credit facilities provided for
in the Credit Agreement are not terminated, the Grantor hereby agrees to be
bound by the covenants in the Credit Agreement and the General Security
Agreement.
SECTION 3.3 FURTHER ASSURANCES. The Grantor hereby covenants and agrees with the
Lender that it shall from time to time and at all times hereafter upon written
request so to do, make, do, execute and deliver or cause to be made, done,
executed and delivered all such further acts, deeds, assurances and things as
may be reasonably required by the Lender for more effectually implementing and
carrying out the true intent and meaning of this Agreement.
ARTICLE 4
DEFAULT
SECTION 4.1 RIGHTS OF LENDER UPON A DEFAULT. Following the occurrence of an
Event of Default which is continuing, without limiting the rights of the Lender
under or pursuant to this Agreement, the Credit Agreement, any other security
provided by the Grantor to the Lender pursuant to or in connection with the
Credit Agreement or otherwise provided by law, the Lender shall be entitled and
shall have the authority by itself or through its agents:
(a) to renew, amend or otherwise deal (including without limitation, the
authority to demand, xxx for, recover, receive and give receipts for
all revenue or other
-3-
moneys) with the Contracts or any of them on such terms as it may
deem appropriate;
(b) to perform, at the Grantor's expense any and all obligations or
covenants of the Grantor under the Contracts or any of them and to
enforce performance by the other party to a Contract of its
obligations, covenants and agreements thereunder;
(c) to deal with the Contracts or any of them to the same extent as the
Grantor could do; and
(d) to take possession of and collect the revenues and other moneys of
all kinds payable to the Grantor in respect of the Contracts or any
of them and pay therefrom all reasonable expenses and charges, the
payment of which may be necessary to preserve and protect the
Contracts or any of them,
the whole without any liability or responsibility of any kind on the part of the
Lender or its agents except in connection with their gross negligence or wilful
misconduct.
SECTION 4.2 EXERCISE OF POWERS. Where any discretionary powers hereunder are
vested in the Lender or its agents, the same may be exercised by an officer or
manager of the Lender or its appointed agents, as the case may be.
ARTICLE 5
GENERAL
SECTION 5.1 NO RELEASE. This Agreement shall remain in full force and effect
without regard to, and the obligations of the Grantor shall not be affected or
impaired by:
(a) any amendment, modification, replacement of or addition or
supplement to the Credit Agreement or any other security provided to
the Lender; or
(b) any exercise or non-exercise of any right, remedy, power or
privilege in respect of this Agreement, the Credit Agreement or any
other security provided to the Lender; or
(c) any waiver, consent, extension, indulgence or other action, inaction
or admission under or in respect of this Agreement, the Credit
Agreement or any other security provided to the Lender; or
(d) any default by the Grantor under, or any invalidity or
unenforceability of, or any limitation of the liability of the
Grantor or on the method or terms of payment under, or any
irregularity or other defect in the Credit Agreement or any other
security provided to the Lender; or
(e) any merger, consolidation or amalgamation of the Grantor into or
with any other Person; or
-4-
(f) any insolvency, bankruptcy, liquidation, reorganization,
arrangement, composition, winding-up, dissolution or similar
proceeding involving or affecting the Grantor.
SECTION 5.2 NO PARTNERSHIP. Nothing herein contained shall be deemed or
construed by the parties hereto or by any third party as creating the
relationship of partnership or of joint venture between the Grantor and the
Lender, it being understood and agreed that none of the provisions herein
contained or any acts of the Lender or of the Grantor shall be deemed to create
any relationship between the Lender and the Grantor other than the relationship
of assignee and grantor.
SECTION 5.3 RIGHTS AND REMEDIES CUMULATIVE. The rights or remedies given to the
Lender hereunder shall be cumulative of and not substituted for any rights or
remedies to which the Lender may be entitled under the Credit Agreement or any
other security provided to the Lender pursuant to or in connection with the
Credit Agreement or at law and may be exercised whether or not the Lender has
pursued or is then pursuing any other such rights and remedies. Further, nothing
in this Agreement shall curtail or limit the remedies of the Lender as permitted
either by law or in any statute to a creditor, all such remedies being in
addition to and not in substitution for any other rights of the Lender under
this Agreement, the Credit Agreement or any other security provided to the
Lender pursuant to or in connection with the Credit Agreement.
SECTION 5.4 TIME OF ESSENCE. Time shall be of the essence of this Agreement.
SECTION 5.5 WAIVER. No consent or waiver, express or implied, by the Lender to
or of any breach or default by the Grantor in performance of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance by the Grantor hereunder. Failure on
the part of the Lender to complain of any act or failure to act of the Grantor
or to declare the Grantor in default, irrespective of how long such failure
continues, shall not, by itself, constitute a waiver by the Lender of its rights
hereunder.
SECTION 5.6 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall be deemed an original and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
ARTICLE 6
MISCELLANEOUS PROVISIONS
SECTION 6.1 AMENDMENTS, ETC. No amendment to or waiver of any provision of this
Agreement nor consent to any departure by the Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Lender,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it is given.
SECTION 6.2 PROTECTION OF COLLATERAL. Upon the occurrence of an Event of Default
which is continuing, the Lender may from time to time, at its option: (a)
perform any act which the Grantor agrees hereunder to perform and which the
Grantor shall fail to perform; and (b) take
-5-
any other action which the Lender reasonably deems necessary for the
maintenance, preservation or protection of any of the assigned rights or of its
security interest therein.
SECTION 6.3 ADDRESSES FOR NOTICES. Any notice or communication to be given under
this Agreement to the Grantor shall be given in accordance with Section 10 of
the General Security Agreement.
SECTION 6.4 SECTION CAPTIONS. Section captions used in this Agreement are for
convenience of reference only, and shall not affect the construction of this
Agreement.
SECTION 6.5 SEVERABILITY. Wherever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
SECTION 6.6 CONFLICTS. In the event of any conflict between the provisions
hereunder and the provisions of the Credit Agreement then, notwithstanding
anything contained herein, the provisions contained in the Credit Agreement
shall prevail and the provisions of this agreement will be deemed to be amended
to the extent necessary to eliminate such conflict. If any act or omission of
the Grantor is expressly permitted under the Credit Agreement but is expressly
prohibited hereunder, such act or omission shall be permitted. If any act or
omission is expressly prohibited hereunder, but the Credit Agreement does not
expressly permit such act or omission, or if any act is expressly required to be
performed hereunder but the Credit Agreement does not expressly relieve the
Grantor from such performance, such fact shall not constitute a conflict between
the applicable provisions hereunder and the provisions of the Credit Agreement.
SECTION 6.7 GOVERNING LAW, ENTIRE AGREEMENT, ETC. This Agreement shall be
governed by and construed in accordance with the internal laws of the Province
of Ontario, except to the extent that the validity or perfection of the security
interest hereunder, or remedies hereunder, in respect of particular collateral
are governed by the laws of a jurisdiction other than the Province of Ontario.
This Agreement and the other Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and supersede any
prior agreements, written or oral, with respect thereto. This Agreement shall
enure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.
SECTION 6.8 ASSIGNABILITY. All rights of the Lender under this Agreement shall
be assignable without the consent of the Grantor provided that:
(a) if an Event of Default is not currently existing and continuing and
the assignee is other than MDS Inc. or a Canadian financial
institution with a tier 1 consolidated regulatory capital in excess
of $500,000,000 and such assignment does not in itself result in
increased costs to the Grantor, the Grantor's prior written consent
shall be required, not to be unreasonably withheld; and
(b) in all instances the Lender has also assigned to the assignee the
indebtedness (the "Indebtedness") owing under Credit No.: 01
provided for in the Credit
-6-
Agreement, the Guarantee issued by MDS Inc. dated November 22, 2002
(if the assignee is other than MDS Inc.) and all other outstanding
security granted to the Bank securing the Indebtedness.
IN WITNESS WHEREOF the Grantor has duly executed this Agreement on
the date first written above.
HEMOSOL LP
BY ITS GENERAL PARTNER HEMOSOL CORP.
Per: __________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By: __________________________________
Name:
Title:
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SCHEDULE A
LIST OF CONTRACTS
1. Amended and restated licence agreement dated as of March 1, 1999 between
the Minister of National Defence and Hemosol Inc., as amended
-8-
LRO # 43 CHARGE/MORTGAGE IN PREPARATION on 2004 04 26 at 14:01
This document has not been submitted and may be incomplete. yyyy mm dd Page 1 of 1
PROPERTIES
PIN 14089 - 0116 LT Estate/Qualifier Fee Simple Absolute
Description PCL BLOCK 1-1, SEC 43M936; XXX 0, XX 00X000; S/T XX0000000, TT154986
MISSISSAUGA
Address 0000 XXXXXXXXXX XXXXXXXXX
XXXXXXXXXXX
PIN 14089 - 0117 LT Estate/Qualifier Fee Simple Absolute
Description PCL BLOCK 2-1, SEC 43M936; XXX 0, XX 00X000; S/T XX0000000, LT1241703
MISSISSAUGA
Address 0000 XXXXXXXXXX XXXXXXXXX
XXXXXXXXXXX
CHARGOR(S)
The chargor(s) hereby charges the land to the chargee(s). The chargor(s)
acknowledges the receipt of the charge and the standard charge terms, if any.
Name HEMOSOL CORP.
Acting as a company
Address for Service 0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxx
I, (Insert Name), have the authority to bind the corporation.
This document is not authorized under Power of Attorney by this party.
CHARGEE(S) Capacity Share
Name THE BANK OF NOVA SCOTIA
Acting as a company
Address for Service Scotia Plaza
00 Xxxx Xxxxxx Xxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
STATEMENTS
Schedule:
PROVISIONS
Principal $25,000,000.00 Currency CDN
Calculation Period See Schedule
Balance Due Date See Schedule
Interest Rate 25.0%
Payments
Interest Adjustment Date
Payment Date See Schedule
First Payment Date
Last Payment Date
Standard Charge Terms N/A
Insurance Amount full insurable value
Guarantor
FILE NUMBER
Chargor Client File Number: 202985
DEBENTURE
HEMOSOL CORP.
0000 Xxxxxxxxxx Xxxx., Xxxxxxxxxxx, Xxxxxxx, X0X 0X0
Amount and Hemosol Corp. (herein called the "Chargor") for value
Obligations received hereby promises to pay to The Bank of Nova Scotia
Secured (herein called the "Bank") at its 00 Xxxx Xxxxxx Xxxx, 00xx
Xxxxx Xxxxxxx, XX X0X 0X0 office on demand following the
occurrence of an Event of Default which is continuing all
amounts now or hereafter owing by the Chargor to the Bank up
to the maximum principal amount of $25,000,000 in lawful money
of Canada and interest at the rate of 25% per annum,
calculated and payable monthly, both before and after demand,
maturity and default, and interest on overdue interest at the
rate aforesaid. "Event of Default" herein shall have the
meaning ascribed thereto in a General Security Agreement
issued by Hemosol LP by its general partner Hemosol Corp. to
the Bank dated the date hereof (the "General Security
Agreement").
This debenture (the "Debenture") secures payment by the
Chargor to the Bank of all debts and liabilities, in any
currency, present or future, direct or indirect, absolute or
contingent, matured or not, at any time owing or remaining
unpaid by the Chargor to the Bank, whether arising from
dealings between the Bank and the Chargor or from any other
dealings or proceedings by which the Bank may be or become in
any manner whatever a creditor of the Chargor, and wherever
incurred, and whether incurred by the Chargor alone or with
another or others and whether as principal or surety, in each
case, arising out of, under or relating to Credit No.: 01 set
forth in a commitment letter issued by the Bank to Hemosol
Inc. dated October 25, 2002, as amended and supplemented by a
supplemental agreement dated as of November 22, 2002, as
further amended by amending agreements dated April 29, 2003
and December 29, 2003, as assigned to, and assumed by, Hemosol
LP by its general partner Hemosol Corp. pursuant to an
Assignment, Assumption and Release Agreement made as of the
date hereof, and as may be further amended, modified,
supplemented, restated or replaced from time to time
(collectively, the "Credit Agreement"), including pursuant to
any security document or instrument issued in connection
therewith and including all interest, commissions, legal and
other costs reasonably incurred, charges and expenses payable
by the Chargor to the Bank and also secures payment by the
Chargor of all expenses under Paragraph 5 hereof (herein
called "Obligations Secured").
Property As security for the payment of the Obligations Secured,
Secured the Chargor, as owner, hereby:
(A) grants, mortgages and charges as and by way of a fixed
and specific mortgage and charge to and in favour of the
Bank,
(i) all freehold real and immovable property now or
hereafter owned or acquired by the Chargor
including but not limited to the lands and
premises described in Schedule "A" hereto (the
"Lands"), together with all buildings, erections
and fixtures now or hereafter constructed or
placed thereon;
(ii) all leasehold property now or hereafter leased by
the Chargor, together with all buildings,
(Delete erections and fixtures now or hereafter
inapplicable constructed or placed thereon;
subparagraphs
and initial (B) charges as and by way of a floating charge to and in
deletions) favour of the Bank, the undertaking, property and assets
of the Chargor for the time being, both real and
personal, movable and immovable of whatsoever nature and
kind now owned or hereafter acquired (except such
property and assets as are validly and effectively
subject to any fixed and specific mortgages and charges
created hereby), including its goodwill and uncalled
capital;
provided that the said mortgage(s) and charge(s) shall not
extend or apply to the cash collateral pledged to the Bank in
support of the indebtedness under Credit No. 03 provided for
in the Credit Agreement nor extend or apply to the last day of
the term of any lease or any agreement therefor now held or
hereafter acquired by the Chargor, but should such mortgage(s)
and charge(s) become enforceable the Chargor shall thereafter
stand possessed of the reversion of such last day and shall
hold it in trust to assign the same in such manner as the Bank
may from time to time by notice in writing direct to any
person acquiring such term or the part thereof mortgaged and
charged in the course of any enforcement of the said
mortgage(s) and charge(s) or any realization of the subject
matter thereof.
All property and assets subject to the said mortgage(s)
and charge(s) shall be collectively referred to as the
"Mortgaged Property".
If any of the Mortgaged Property may not be mortgaged,
charged or assigned, or if a security interest may not be
created therein by the Chargor in favour of the Bank (because
the consent or approval of a third party or parties is
required and such consent or approval has not been obtained or
the requirement therefor waived as of the date hereof and if
the failure to obtain
such consent or approval renders the mortgage, charge,
assignment or security interest hereunder invalid and/or
unenforceable or because rights appurtenant to the Mortgaged
Property would not, as a matter of law, pass to the Bank as an
incidence of the mortgages, charges, assignments or security
interests made pursuant to this Debenture) the Chargor shall
hold such Mortgaged Property and all benefits derived
thereunder in trust for the Bank. The Chargor shall, at the
request and under the direction of the Bank, in the name of
the Chargor, take or cause to be taken all such action and do
or cause to be done all such things as are necessary or
desirable to preserve such Mortgaged Property and all benefits
to be derived thereunder for the benefit and account of the
Bank and the Chargor agrees to pay promptly to the Bank, all
monies collected by or paid to the Chargor in respect of such
Mortgaged Property.
Covenants of This Debenture is issued subject to and with the benefit
Corporation of the following conditions:
1. The Chargor covenants that it shall:
Operate (a) diligently use and operate the Mortgaged Property
as would a prudent owner in a proper and efficient
manner so as to preserve and protect the Mortgaged
Property in accordance with customary industry
standards and practices;
Maintain (b) maintain and preserve all of the Mortgaged
Property in all material respects in good repair,
working order and condition (reasonable wear and
tear excepted) consistent with industry standards
and practices and from time to time make all
necessary and proper repairs, renewals,
replacements, additions and improvements thereto
in order that the business of the Chargor may be
properly and advantageously conducted at all times
and in accordance with prudent business management
consistent with industry standards and practices;
Owner (c) be at all times the sole registered holder of a
good and marketable title in fee simple to 100% of
the Lands subject only to encumbrances ("Permitted
Encumbrances") referred to in Schedule B hereto;
Insure (d) cause all its Mortgaged Property which is of a
character usually insured by businesses operating
properties of a similar nature to be insured in a
manner reasonably required by the Bank and kept
insured with reputable insurers against loss or
damage by fire or other hazards of the nature and
to the extent that such Mortgaged Property is
usually insured by businesses operating properties
of a similar nature in the same or similar
localities and shall maintain such insurance with
loss if any payable to the Bank, as mortgagee or
loss payee as applicable, and shall deliver to the
Bank evidence of such insurance satisfactory to
the Bank;
Taxes (e) pay all taxes, rates, levies, assessments and
government fees or dues lawfully levied, assessed
or imposed in respect of the Mortgaged Property or
any part thereof as and when the same shall become
due and payable, and shall exhibit to the Bank,
upon reasonable written request, the receipts
establishing such payment (provided that the
Chargor shall be entitled to contest in good faith
by appropriate action initiated and diligently
contested such taxes, rates, levies, assessments
and government fees or dues and, in the case of
liens for such taxes, levies, assessments,
government fees or dues, only if paid "under
protest" or there shall have been deposited with
the Bank or, if required by law, with a
governmental authority, cash in an amount
sufficient to pay the amount of such claim
together with any interest or penalties thereon or
a bond or other security reasonably satisfactory
to the Bank in an amount sufficient for such
payment);
Observe (f) duly observe and conform in all material respects
Laws to all valid requirements of any governmental
authority and applicable laws relative to any of
the Mortgaged Property and all covenants, terms
and conditions upon or under which the Mortgaged
Property is held;
After- (g) at the request in writing of the Bank,
Acquired specifically mortgage and charge in favour of the
Bank, the right, title and interest of the Chargor
in all real and immovable property (including
leaseholds) and in all equipment, machinery,
vehicles and other tangible personal property
which the Chargor shall hereafter acquire, and
shall execute all such conveyances, mortgages and
transfers as may be reasonably required in
connection therewith;
Furnish (h) furnish to the Bank upon reasonable written
Information request such information with respect to the
Mortgaged Property as the Bank may from time to
time require, and shall give written notice to the
Bank of all litigation before any court,
administrative board or other tribunal affecting
the Chargor or the Mortgaged Property where the
amount claimed in any one instance exceeds
$300,000 or in the aggregate exceeds $600,000; and
2
Not (i) not, without consent in writing of the Bank,
Encumber create or permit to arise any mortgage, hypothec,
charge, lien or other encumbrance upon the
Mortgaged Property or any part thereof save and
except Permitted Encumbrances.
Default 2. The Obligations Secured shall become enforceable upon
the occurrence of an Event of Default and for so long as such
Event of Default shall continue.
Rights 3. Until the security hereby constituted becomes
Until enforceable, the Chargor shall be entitled to receive all
Default rents, revenues, income, proceeds, profits and other monies
derived from or pertaining to the Mortgaged Property and shall
otherwise be entitled to exercise all of the rights and powers
and enjoy all of the benefits and advantages to be derived
from the Mortgaged Property save and except as expressly
prohibited hereunder or under any other instrument between the
Chargor and the Bank.
Waiver of 4. The Bank may by notice to the Chargor waive any default
Default of the Chargor on such terms and conditions as the Bank may
determine, but no such waiver shall be taken to affect any
subsequent default or the rights resulting therefrom.
Enforcement 5. Whenever the security hereby constituted becomes
enforceable and so long as it remains enforceable the Bank
may:
(a) immediately take possession of the Mortgaged
Property and, whether or not the Bank has done so,
may sell, lease or otherwise dispose thereof
either as a whole or in separate parcels at public
auction, by public tender or by private sale,
either for cash or upon credit and upon such terms
and conditions as the Bank may determine; and the
Bank may execute and deliver to any purchaser of
the Mortgaged Property or any part thereof good
and sufficient deeds and documents for the same,
the Bank being irrevocably constituted the
attorney of the Chargor for the purpose of making
any such sale and executing such deeds and
documents, such power of attorney shall remain in
force until this Debenture is discharged in
accordance with Section 8;
(b) by instrument in writing appoint any person to be
a receiver (which term shall include a receiver
and manager (a "Receiver")) of the Mortgaged
Property or of any part thereof and may remove any
Receiver so appointed and appoint another in his
stead; and any such Receiver so appointed shall
have power:
(i) to take possession of the Mortgaged Property or any part
thereof;
(ii) to carry on all or any part of the business of the
Chargor relating to the Mortgaged Property;
(iii) to borrow money on the security of the Mortgaged
Property in priority to this Debenture for the purpose
of the maintenance, preservation or protection of the
Mortgaged Property or any part thereof or for carrying
on all or any part of the business of the Chargor
relating to the Mortgaged Property;
(iv) to sell, lease or otherwise dispose of the whole or any
part of the Mortgaged Property at public auction, by
public tender or by private sale, either for cash or
upon credit, at such time and upon such terms and
conditions as the Receiver shall determine;
provided that any such Receiver shall be deemed
the agent of the Chargor and the Bank shall not be
in any way responsible for any misconduct or
negligence of any such Receiver; and
(c) exercise any of the other rights to which the Bank
is entitled as holder of this Debenture, including
the right to take proceedings in any court of
competent jurisdiction for the appointment of a
Receiver, for the sale of the Mortgaged Property
or any part thereof or for foreclosure, and the
right to take any other action, suit, remedy or
proceeding authorized or permitted thereunder or
by law or by equity in order to enforce the
security constituted by this Debenture.
Expenses 6. The Chargor shall pay to the Bank upon demand the
amount of all expenses incurred in recovering any Obligations
Secured or in enforcing the security hereby constituted,
including but not limited to the expenses incurred in
connection with the repossession, holding, repairing,
processing, preparing for disposition, and disposing of any of
the Mortgaged Property (including reasonable legal and other
expenses), with interest thereon from the date of the
incurring of such expenses to the date of payment by the
Chargor at the rate of 3% per annum above the prime commercial
loan rate of the Bank from time to time in effect.
Right to Cure 7. If the Chargor fails to do anything hereby required
to be done by it, the Lender may, but shall not be obligated
to, do such thing and all sums expended thereby by the Lender
shall be payable forthwith by the Chargor, together with the
aforesaid interest rate of 3% per annum above the prime
commercial loan rate of the Bank from time to time in effect
from the date of
3
incurring such expense to the date of payment by the Chargor,
shall be secured hereby and shall have the benefit of the lien
hereby created, but no such performance by the Lender shall be
deemed to relieve the Chargor from any default hereunder.
Discharge 8. If the Chargor pays to the Bank the Obligations
Secured and otherwise observes and performs the terms and
conditions hereof, then the Bank shall at the request and at
the expense of the Chargor cancel and discharge the
mortgage(s) and charge(s) of this Debenture and execute and
deliver to the Chargor such deeds and other instruments as
shall be requisite therefor.
Notice 9. Any notice, demand or other communication which may
be or is required to be given or made pursuant to this
Debenture shall be in writing and shall be deemed to have been
sufficiently and effectively given if signed by or on behalf
of the party giving notice and delivered or transmitted by
telecopier to the party for which it is intended.
(a) Communications sent to the Chargor shall be address as
follows:
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxxx, XX X0X 0X0
Attention: President and Chief Executive Officer
Telecopier No.: (000) 000-0000
and a copy to:
Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP
0 Xxxxx Xxxxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxxxx Xxxxx/Xxxxx Xxxxx
Telecopier No.: (000) 000-0000
(b) Communications sent to the Bank shall be addressed as
follows:
The Bank of Nova Scotia
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxxx Xxxx
Telecopier No.: (000) 000-0000
and a copy to:
Gowling Xxxxxxx Xxxxxxxxx LLP
Commerce Court West, Suite 4900
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxxxxx
Telecopier No.: (000) 000-0000
Any notice, demand or communication which may or is required
to be given or made shall be made or given as herein provided
or to such other address or to such other officer as a party
may from time to time advise the other parties hereto by
notice in writing as aforesaid and shall not be deemed
received until actual receipt thereof by the party to whom
such notice is given except if sent by telecopier after 4:00
p.m., in which case it shall be deemed received on the banking
day (i.e. a day, other than a Saturday or Sunday, on which the
offices of the Bank are open for normal business in the City
of Toronto, Ontario) next following the date of transmission.
Continuing 10. This Debenture shall not be considered as satisfied
and or discharged by any intermediate payment of the whole or part
Additional of the Obligations Secured but shall constitute and be a
Security continuing security to the Bank of a current or running
account and shall be in addition to and not in substitution
for any other security now or hereafter held by the Bank. The
remedies of the Bank under this Debenture may be exercised
from time to time separately or in combination and are in
addition to and not in substitution for any other rights of
the Bank however created.
Transferable, 11. The Obligations Secured shall be paid by the Chargor
etc. and this Debenture shall be transferable without regard to any
set-off, counter-claim or equities between the Chargor and the
Bank.
Conflict 12. If there is any conflict between the provisions
contained in this Debenture and the provisions contained in
the Credit Agreement, the provisions of the Credit Agreement
shall have priority over and shall override the provisions
contained in this Debenture; provided, however,
4
that the fact that one document addresses a subject matter
which is not addressed in the other document shall not, by
itself, be deemed to be an inconsistency.
Law 13. This Debenture shall be governed in all respects by
Governing the laws of the Province of Ontario.
IN WITNESS WHEREOF the Chargor has caused its
corporate seal to be hereunto affixed and this Debenture to be
signed by its duly authorized officers this __________ day of
April, 2004.
HEMOSOL CORP.
By: ______________________________c/s
Name:
Title:
5
SCHEDULE "A"
LEGAL DESCRIPTION
0000 XXXXXXXXXX XXXXXXXXX, XXXXXXXXXXX
Firstly:
Xxxxxx Xxxxx 0-0, Xxxxxxx 00X-000, Xxxxx 1 on Plan 43M-936, City of
Mississauga, Regional Municipality of Peel
being the whole of P.I.N. No. 14089-0116(LT)
Secondly:
Parcel Block 2-1, Section 43M-936, Block 2 on Plan 43M-936, City of
Mississauga, Regional Municipality of Peel
being the whole of P.I.N. No. 14089-0117(LT)
SCHEDULE "B"
PERMITTED ENCUMBRANCES
PART I - SPECIFIC ENCUMBRANCES
1. Easement registered on June 6, 1963 as No. TT154986 in favour of
Trans-Canada PipeLines Limited (in respect of Block 1 only).
2. Restrictions registered on February 6, 1964 as No. TT162545Z in favour
of Her Majesty the Queen in Right of the Province of Ontario as
represented by the Minister of Highways restricting access to Xxxxxxx
Xx. 000 from the Lands which appear to be perpetual.
3. Notice registered on February 12, 1973 as No. VS248789 being an
amendment of the Toronto-Malton Airport Zoning Regulations and amended
further by a notice registered on March 27, 2000 as No. LT2057426 by
Her Majesty the Queen in Right of the Department of Transport Canada
which restrict the height of buildings and structures that can be
erected on the Lands.
4. Financial Agreement registered on December 14, 1989 as No. LT1082614
between Runnymede Development Corporation Limited, The Corporation of
the City of Mississauga and The Regional Municipality of Peel, as
amended by an agreement registered on November 14, 2001 as Xx. XX000000
between Hemosol Inc., The Regional Municipality of Peel and Runnymede
Development Corporation Limited.
5. Easement registered on December 14, 1989 as No. XX0000000 in favour of
Mississauga Hydro-Electric Commission and Xxxx Canada.
6. Easement registered on August 1, 1991 as No. LT1241703 in favour of The
Regional Municipality of Peel (in respect of Block 2 only).
PART II - ADDITIONAL PERMITTED ENCUMBRANCES
(i) any Inchoate Lien;
(ii) liens, title defects or irregularities, including, without limitation,
easements, rights of way, encroachments, restrictive covenants,
servitudes or other similar rights in land granted to or reserved by
other Persons, rights of way for sewers, drains, steam, gas and oil
pipelines, gas and water mains, electric light and power lines,
telegraph and telephone lines and other forms of communication, poles,
wires or other incidental equipment and other similar purposes granted
to or reserved by other Persons, or zoning or building by-laws and
ordinances or other restrictions as to the use of land, which liens,
title defects or irregularities do not in the aggregate materially
adversely affect the use of the Lands or the construction or operation
of the Project for the purposes for which they are held by the Customer
including the construction, development and operation of the Project;
and mortgages of and other Liens against the said liens, title defects
or irregularities;
(iii) any right reserved to or vested in any governmental authority or other
public agency by the terms of any lease, license, franchise, grant or
permit acquired by such Person, or by any statutory provision to
terminate any such lease, license, franchise, grant or permit, or to
require annual or other periodic payments as a condition of the
continuance thereof;
(iv) security or deposits given to a public utility, any governmental
authority or other public authority when required by such utility,
governmental authority or other public authority in connection with the
operations of such Person and in the ordinary course of its business or
the supply of services to such Person;
(v) reservations, limitations, provisos and conditions, if any, expressed
in any original grants from Her Majesty the Queen in right of Canada or
Her Majesty the Queen in right of Ontario of any land or interest
therein, and statutory exceptions to title in any grants from Her
Majesty the Queen in right of Canada or Her Majesty the Queen in right
of Ontario;
(vi) exceptions and qualifications set out in Section 44(1) of the Land
Titles Act (Ontario);
(vii) Liens securing appeal bonds or other similar Liens arising in
connection with court proceedings (including, without limitation,
surety bonds, security for costs of litigation where required by law,
letters of credit, Liens arising out of judgments or awards with
respect to which an appeal or proceedings for review is being
prosecuted in good faith and with respect to which there shall have
been secured a stay of execution pending the appeal of proceedings for
review or for which security acceptable to the Bank has been posted by
the Person) or any other instruments serving similar purpose;
(viii) applicable municipal and other governmental restrictions, including
municipal by-laws and regulations (including site specific by-laws)
provided same have been materially complied with;
(ix) Purchase Money Liens securing purchase money obligations in an
aggregate amount not exceeding $500,000 per annum;
(x) any Lien granted in favour of the Bank including the Charge/Mortgage
registered in the Land Registry Office for Land Titles Division of Peel
on November 22, 2002 as No. PR351375;
(xi) any Lien granted in connection with indebtedness pursuant to Credit No.
03 set forth in the Credit Agreement;
(xii) any Lien consented to in writing by the Bank;
(xiii) Liens for the excess of the amount of any past due Taxes for which a
final assessment has not been received over the amount of such Taxes as
estimated and paid by the Person acting prudently and reasonably;
(xiv) Liens or deposits in connection with bids, tenders, contracts or
expropriation proceedings of the Person or to secure utilities,
workers' compensation, employment insurance or other similar statutory
assessments or to secure costs of litigation when required by
applicable law, and surety or appeal bonds in connection with such
litigation;
(xv) deposits of cash or securities in connection with any Liens referred to
in paragraphs (i), (ii) and (iii) above;
(xvi) assignments of insurance provided to landlords (or their mortgagees)
pursuant to the terms of any lease and Liens or rights reserved in or
exercised under any lease for rent or compliance with the terms of such
lease;
(xvii) mechanics', workers', repairers or other like possessory liens, arising
in the ordinary course of business for amounts the payment of which is
either not delinquent or is being contested in good faith by
appropriate proceedings and for which security acceptable to the Bank
has been posted by the Person;
(xviii) Liens in connection with indebtedness in respect of services rendered
to or to be rendered or goods or products provided or to be provided to
the Person, including rent and other payments under leases, contracts,
hire-purchase agreements and agreements for sale;
(xix) plans of subdivision, site plans, municipal agreements or restrictive
covenants affecting the use to which the Lands may be put, provided
that same are complied with in all material respects and do not
materially detract from the value of the Lands or materially impair the
construction, development and operation of the Project;
(xx) rights and interests created by notice registered by the Ontario
Ministry of Transportation or similar authorities with respect to
proposed highways and which do not materially detract from the value of
the Lands or materially impair the construction, development and
operation of the Project;
(xxi) certificates of pending litigation that may be registered against any
real property or any interest therein of the Person in respect of any
action or proceeding against the Person or in which it is a defendant,
but with respect to which action or proceeding no judgment, award or
attachment against the Person has been granted or made and which the
Person is defending in good faith and in respect of which the Person
has posted security satisfactory to the Bank provided the certificate
of pending litigation is discharged from title within 30 days of its
registration;
(xxii) the granting by the Person in the ordinary course of its business of
any lease, sublease, tenancy or right of occupancy to any person in
respect of property owned or leased by the Person other than in respect
of the Lands;
(xxiii) the right of distress in favour of any landlord of the Person;
(xxiv) Liens which do not mortgage, charge, create a security interest in or
otherwise encumber any property or assets of the Borrower that are
necessary to the conduct of the Hemolink (TM) Business;
(xxv) any licences (in or out by the Borrower) of intellectual property, any
royalties or other payments by or to the Borrower on any intellectual
property, or joint or part ownership by the Borrower of intellectual
property provided, notwithstanding the foregoing, nothing herein
permits the licencing out or entering into of joint venture, joint or
partial ownership arrangements or similar arrangements respecting
intellectual property necessary for the conduct of the Hemolink (TM)
Business other than arrangements with licencees or partners which do
not carry on business within North America; and
(xxvi) the security interests perfected by registrations nos. 20030416 0914
1146 8427, 20030121 1643 1616 0944, 20021203 1125 1146 7993, 20020102
0000 0000 0000, 20011227 1818 1531 0426, 20011213 1430 1715 8757,
20010417 0908 1322 1131 (as
2
amended by registration no. 20020116 1113 1322 1238) and 20000508 1433
1146 5863 pursuant to the Personal Property Security Act (Ontario).
In this Schedule B:
"HEMOLINK (TM) BUSINESS" has the meaning ascribed thereto in the General
Security Agreement.
"INCHOATE LIEN" means, with respect to any property or asset of any Person, the
following Liens:
(i) any Lien for taxes, rates or assessments not yet due or delinquent or
which are due or delinquent but the validity of which is being
contested in good faith by appropriate proceedings and for which
security acceptable to the Bank has been posted by the Person with the
appropriate Person;
(ii) any liens of carriers, warehousemen, contractors, subcontractors,
suppliers, mechanics or materialmen or other similar common law liens
or Liens so long as such charges are not yet due or such charges are
being contested in good faith by appropriate proceedings and for which
security acceptable to the Bank has been posted by the Person with the
appropriate Person; and
(iii) undetermined or inchoate liens, including statutory liens arising or
potentially arising, privileges or charges incidental to current
operations which have not at such time been filed or registered
pursuant to law or served upon the Person or which, although filed and
registered, relate to obligations not due or delinquent;
"LANDS" means the real property known municipally as 0000 Xxxxxxxxxx Xxxx.,
Xxxxxxxxxxx, Xxxxxxx X0X 0X0 and legally described in Schedule "A" hereto;
"LIENS" means any mortgage, hypothec, title retention, pledge, lien, charge,
security interest or other encumbrance whatsoever, most recent whether fixed or
floating and howsoever created or arising;
"PERSON" includes an individual, a partnership, a corporation, a trust, an
unincorporated organization, a government or any department or agency thereof or
any other entity whatsoever and the heirs, executors, administrators or other
legal representatives of an individual;
"PROJECT" means the construction of the manufacturing facility for the
production and commercialization of Hemolink (TM) on the Lands;
"PURCHASE MONEY LIEN" means any Lien on any asset, other than accounts
receivable or inventory, of a Person which is assumed, created, guaranteed or
reserved to secure the unpaid purchase price of such asset, provided that any
such Lien is limited to the asset so acquired and does not secure an amount in
excess of the purchase price thereof, such purchase price not to exceed the fair
market value of the purchased asset, and includes an extension, renewal or
refunding of the Indebtedness secured by such Lien, provided that the principal
amount thereof is not thereby increased; and
"TAXES" means, at any time, all taxes, rates, levies, imposts, assessments,
government fees, dues, stamp taxes, duties, charges to tax, fees, deductions,
withholdings and similar impositions, whether current or deferred, that are
payable to, levied, collected, withheld or assessed by, any governmental
authority with taxing authority.
3
