EXHIBIT 10.10
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DEBENTURE
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1. ASTRIS, INC. (hereinafter called "the Company") for value received hereby
acknowledges itself indebted and promises to pay to XXXXXX XXXX XXXXXXXX, IN
TRUST (hereinafter called "the Holder"), on September 30, 1996, the sum of ONE
HUNDRED THOUSAND DOLLARS ($L00,000.00) in lawful money of Canada at 0000
Xxxxxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx X0X XX0 and to pay interest thereon from
the date hereof, calculated and payable monthly on the first day of each and
every month at the rate of twelve per centum (12.00%) per annum, as well after
as before maturity, in like money at the same place and to pay interest on
overdue interest at the said rate.
2. As security for payment of the principal of, and interest on, this Debenture
and all other moneys from time to time owing hereunder:
(a) the Company hereby mortgages and charges to and in favour of the
Holder, his heirs, executors, administrators, successors and assigns, as
and by way of a fixed and specific mortgage and charge, all machinery,
equipment, vehicles and chattels now owned or hereafter acquired by the
Company or in which the Company now or hereafter has any interest, of
whatsoever nature and kind and wheresoever situate including, without
limiting the generality of the foregoing, the machinery, equipment,
vehicles and chattels which are presently situated in and upon the
Company's premises at 0000 Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxx, and all
machinery, equipment, vehicles and chattels of a like or similar
description to or different from those hereinbefore referred to which may
be brought into possession by the Company either in addition to or in
substitution for such machinery, equipment, vehicles and chattels, and
either upon the said premises or upon any other premises occupied by the
Company or in which the Company carries on any of its business, the said
machinery, equipment, vehicles and chattels hereby mortgaged and charged as
and by way or a fixed and specific mortgage and charge being sometimes
hereinafter referred to as "the mortgaged premises";
(b) The Company hereby charges in favour of the Holder, his heirs,
executors, administrators, successors and assigns, as and by way of a first
floating charge, its undertaking and all its property and assets, real and
personal, movable and immovable, of whatsoever nature and kind, both
present and future (other than property and assets hereby validly subjected
to a fixed and specific mortgage and charge) including, without limiting
the generality of the foregoing, its goodwill and uncalled capital; the
said undertaking, property and assets charged as and by way of a first
floating charge being sometimes hereinafter referred to as the "charged
premises".
3. The company hereby covenants and agrees that it will at all times do,
execute, acknowledge and deliver or cause to be done, executed, acknowledged and
delivered all and singular all such further acts, deeds, mortgages, hypothecs,
transfers, assignments and assurances in law as the Holder may require for the
better assuring, mortgaging, hypothecating, charging, transferring, assigning
and confirming unto the Holder the property and assets hereby mortgaged and
charged or intended so to be or which the Company may hereafter become bound to
mortgage, hypothecate, transfer, assign and charge in favour of the Holder and
for the better accomplishing and effectuating of this Debenture.
4. The Company shall not and hereby covenants that it will not hereafter,
without the consent in writing of the Holder hereof first had and received:
(a) create, assume or suffer to exist any mortgage, hypothec, deed of
trust, pledge, encumbrance, lien or charge of any kind upon any of its
property or assets whether now owned or hereafter acquired ranking in
priority to or pari passu with the security constituted by this Debenture:
(b) sell, alienate, assign or otherwise dispose of the mortgaged
premises or any part thereof;
(c) sell or dispose of all or any part of the charged premises out of
the ordinary course of its business as at present conducted.
5. The Company hereby covenants and agrees with the Holder that until all
moneys owing hereunder are paid in full:
(a) it will insure and keep insured the machinery, equipment,
vehicles and chattels and all other assets hereby mortgaged and charged
against loss or damaged by fire and other insurable hazards which such
several assets are commonly insured against in the Province of Ontario to
the full insurable value thereof;
(b) it will keep all its property and assets in good condition and
repair according to the nature and description thereof, and that the Holder
may, whenever he deems necessary, either in person or by agent, enter upon
and inspect the said property, and the Holder may make repairs as he deems
necessary, and the cost of such inspection and such repairs shall be added
to the principal of the debt secured by this Debenture.
6. 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 Company, is
hereby excepted out of any mortgage or charge created hereby or by any other
instrument supplemental hereto and does not and shall not form part of the
property hereby or by any such other instrument mortgaged or charged so as to be
charged with the moneys intended to be secured hereby, but the Company shall
stand possessed of the reversion remaining in the Company of any leasehold
premises, for the time being demised, as aforesaid, upon trust to assign and
dispose thereof as the Holder shall direct; and upon any sale of the leasehold
premises, or any part thereof, the Holder for the purpose of vesting the
aforesaid reversion of any such term or any renewal thereof in any purchaser or
purchasers thereof, shall be entitled by deed or writing to appoint such
purchaser or purchasers or any other person or persons a new trustee or trustees
of the aforesaid reversion of any such term or renewal thereof in the place of
the Company and to vest the same accordingly in the new trustee or trustees so
appointed freed and discharged from any obligation respecting the same.
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7. The principal, interest and other moneys hereby secured shall become
immediately payable and the security hereby constituted shall become enforceable
in each and every of the events following:
(a) if the Company makes default in payment of the principal of this
debenture or of any interest thereon or makes default in the observance or
performance of some other thing hereby required to be done or some other
covenant or condition hereby required to be observed or performed;
(b) if a petition is filed or a resolution is passed or an order is
made for the winding up of the Company;
(c) if the Company ceases or threatens to cease to carry on its
business or if the Company makes or agrees to make a bulk sale of its
assets or if the Company commits or threatens to commit any act of
bankruptcy or makes an authorized assignment or if a bankruptcy petition is
filed or presented against a Company;
(d) if any proceedings with respect to the Company are commenced
under the Companies' Creditors Arrangement Act;
(e) if any execution, sequestration, extent or any other process of
any Court becomes enforceable against the Company or if a distress or
analogous process is levied upon the property of the Company or any part
thereof;
(f) if the Company shall permit any sum which has been admitted as
due by the Company or is not disputed to be due by it and which forms or is
capable of being made a charge upon any of the property and assets subject
to the mortgage and charge created by this Debenture in priority to or pari
passu with the mortgage and charge created by this Debenture to remain
unpaid for thirty (30) days after proceedings have been taken to enforce
the same as such mortgage and charge in priority to or pari passu with the
mortgage and charge created by this Debenture;
(g) if the Company makes default in payment or discharge of any
indebtedness or liability to the Holder when due whether secured hereby or
not.
8. If the security hereby constituted shall become enforceable, the Holder may
by instrument in writing appoint any person or persons, whether an officer or
officers or an employee or employees of the Holder or not, to be a receiver or
receivers of all or any part of the mortgaged premises and/or the charged
premises and may remove any receiver or receivers so appointed and may appoint
another or others in his or their stead. Any such receiver shall, so far as
concerns responsibility for his acts, be deemed the agent of the Company and in
no event the agent of the Holder, and the Holder shall not be in any way
responsible for any misconduct, negligence or non-feasance on the part of any
such receiver. Subject to the provisions of the instrument appointing such
receiver, any such receiver or receivers so appointed shall have power to take
possession of the mortgaged premises and the charged premises or any part
thereof and to carry on or concur in carrying on the business of the Company and
to sell or concur in selling all or any part of the mortgaged premises and
charged premises. Except as may be otherwise directed by the Holder, all moneys
from time to time received by such receiver shall be in trust for and paid over
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to the Holder. The rights and powers conferred by this paragraph are in
supplement of and not in substitution for any rights or powers the Holder may
from time to time have as the Holder of this Debenture, and every such receiver
may in the discretion of the Holder be vested with all or any of the rights and
powers of the Holder. The term "receiver" as used in this paragraph includes a
receiver and manager.
9. If the security hereby constituted shall become enforceable the Holder may,
either before or after any entry, sell and dispose of the mortgaged premises and
the charged premises, either as a whole or in separate parcels at public auction
or by tender or by private sale at such time or times as the Holder may
determine, and may make such sale, either for cash or part cash and part credit,
and with or without advertisement, and with or without a reserve bid as the
Holder may deem proper, and the Holder may also rescind or vary any contract of
sale that may have been entered into and resell with or under any of the powers
conferred hereunder and adjourn any such sale from time to time and may execute
and deliver to the purchaser or purchasers of the said property or any part
thereof good and sufficient deed or deeds for the same, the Holder being hereby
constituted the irrevocable attorney of the Company for the purpose of making
such sale and executing such deeds, and any such sale made as aforesaid shall be
a perpetual bar both in law and in equity against the company and all other
persons claiming the said property or any part thereof, by, from, through or
under the Company.
10. The Company agrees to pay to the Holder forthwith upon demand all costs,
charges and expenses (including legal fees) of or incurred by the Holder in
connection with this Debenture, or the mortgaged premises or the charged
premises, or any part thereof, or the recovery or enforcement of payment of any
of the moneys owing hereunder, including all such costs, charges and expenses in
connection with taking possession, protecting, preserving, collecting or
realizing upon any part of the mortgaged premises or the charged premises,
together with interest thereon calculated at the rate hereinbefore set forth in
paragraph 1, from the date of j incurring such costs, charges and expenses.
11. This Debenture is to be treated as a negotiable instrument and all persons
are invited by the Company to act accordingly
12. The principal, interest and other moneys hereby secured will be paid and
shall be assignable free from any right of set-off or counterclaim or equities
between the Company and the Holder.
13. This security is in addition to and not in substitution for any other
security now or hereafter held by the Holder and no payment to the Holder shall
constitute payment on account of any of the principal, interest or other moneys
from time to time owing hereunder unless specifically so appropriated by the
Holder by notation of such payment on this Debenture.
14. If the Company, its successors or assigns shall pay or cause to be paid to
the Holder the moneys secured by this Debenture and shall otherwise observe and
perform the terms hereof, then this Debenture and the rights hereby granted
shall cease and be void and thereupon the Holder shall at the request and at the
expense of the Company its successors or assigns, cancel and discharge the
mortgage and charge of this Debenture and execute and deliver to the Company its
successors or assigns, such deeds and other instruments as shall be requisite to
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cancel and discharge the mortgage and charge hereby constituted; provided,
however, that this Debenture may be assigned, pledged, hypothecated or deposited
by the Company as security for advances or loans to or for indebtedness or other
obligations or liabilities of the Company and in such event this Debenture shall
not be deemed to have been discharged or redeemed by reason of the account of
the Company having ceased to be in debit whilst it remained so assigned,
pledged, hypothecated or deposited.
15. Any demand or notice to be made or given by the Holder in connection with
this Debenture shall be in writing and shall be made or given by delivering the
same manually or by mailing the same prepaid registered post to the Company at
0000 Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxx X0X 0X0, or to such other address as the
Company may from time to time designate in writing to the Holder. Any demand or
notice so made or given by mailing the same by prepaid registered post shall be
deemed to have been received by the Company on the next business day following
such mailing.
16. This Debenture and all its provisions shall enure to the benefit of the
Holder, his heirs, executors, administrators, successors and assigns, and shall
be binding upon the Company, its successors and assigns.
IN WITNESS WHEREOF the Company has caused its corporate seal to be
hereunto affixed and this Debenture to be signed by its proper officers the
27th day of June, 1996.
ASTRIS INC.
/s/ Xxxx X. Xxx
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President
Authorized Signing Officer
/s/ X. Xxxxxxxx
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Secretary
Authorized Signing Officer
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