Exhibit. 10.11
EDC LOAN NO. 880-CAN-7559
DATED AS OF JULY 31, 0000
XXXXX XXX XXXXX INC.
AND
EXPORT DEVELOPMENT CORPORATION
LOAN AGREEMENT
TABLE OF CONTENTS
Page
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PARTIES................................................................. 1
RECITALS................................................................ 1
ARTICLE I............................................................... 1
DEFINITIONS............................................................. 1
Section 1.01 -- Definitions........................................ 1
Section 1.02 -- Rules of Interpretation............................ 5
Section 1.03 -- Currency of Account and Currency of Payment........ 5
ARTICLE II.............................................................. 6
REPRESENTATIONS AND WARRANTIES.......................................... 6
Section 2.01 -- Representations and Warranties..................... 6
ARTICLE III............................................................. 8
LOAN.................................................................... 8
Section 3.01 -- Loan............................................... 8
Section 3.02 -- Disbursement....................................... 8
Section 3.03 -- Currency of Advances............................... 9
Section 3.04 -- Disclaimer......................................... 9
Section 3.05 -- Third Country Supply............................... 9
ARTICLE IV.............................................................. 10
REPAYMENT OF PRINCIPAL, PAYMENT OF INTEREST............................. 10
AND OTHER CHARGES....................................................... 10
Section 4.01 -- Principal.......................................... 10
Section 4.02 -- Interest........................................... 10
Section 4.03 -- Additional Cost and Illegality..................... 11
Section 4.04 -- Place and Manner of Payment........................ 12
Section 4.05 -- No Deduction for Taxes............................. 12
Section 4.06 -- Administration Fee................................. 12
Section 4.07 -- Costs and Expenses................................. 13
Section 4.08 -- Application of Payments............................ 13
Section 4.09 -- Voluntary Prepayment............................... 13
Section 4.10 -- Mandatory Prepayment............................... 14
Section 4.11 -- Optional Prepayment................................ 14
Section 4.12 -- Indemnities........................................ 14
ARTICLE V............................................................... 15
SECURITY................................................................ 15
Section 5.01 -- Security........................................... 15
ARTICLE VI.............................................................. 15
LOAN ACCOUNTS........................................................... 15
Section 6.01 -- Loan Accounts...................................... 15
ARTICLE VII............................................................. 15
PREDISBURSEMENT CONDITIONS.............................................. 15
Section 7.01 -- First Advance...................................... 15
Section 7.02 -- Each Advance....................................... 16
Section 7.03 -- Waiver of Predisbursement Conditions............... 17
ARTICLE VIII............................................................ 17
COVENANTS OF BORROWER................................................... 17
Section 8.01 -- Covenants of Borrower.............................. 17
ARTICLE IX.............................................................. 19
CANADIAN BENEFIT........................................................ 19
Section 9.01 -- Canadian Benefit................................... 19
ARTICLE X............................................................... 20
DEFAULT................................................................. 20
Section 10.01 -- Events of Default................................. 20
Section 10.02 -- Suspension of Advances............................ 21
Section 10.03 -- Termination of Advances and Acceleration.......... 22
Section 10.04 -- Remedies Cumulative............................... 22
Section 10.05 -- Performance of Borrower's Covenants............... 22
ARTICLE XI.............................................................. 23
NOTICE.................................................................. 23
Section 11.01 -- Notice............................................ 23
ARTICLE XII............................................................. 24
PROPER LAW, SUBMISSION TO JURISDICTION AND WAIVERS...................... 24
Section 12.01 -- Proper Law........................................ 24
Section 12.02 -- Waiver of Immunity................................ 24
Section 12.03 -- Waiver of Prior Proceeding........................ 24
Section 12.04 -- Submission to Jurisdiction........................ 24
ARTICLE XIII............................................................ 25
MISCELLANEOUS........................................................... 25
Section 13.01 -- Insurance......................................... 25
Section 13.02 -- Severability of Provisions........................ 25
Section 13.03 -- Judgment Currency................................. 25
Section 13.04 -- Counterparts and Telefax.......................... 25
ARTICLE XIV............................................................. 25
SUCCESSORS AND ASSIGNS.................................................. 25
Section 14.01 -- Successors and Assigns............................ 25
SCHEDULE "A" DISBURSEMENT TERMS
SCHEDULE "B" SECURITY DOCUMENTS
SCHEDULE "C" OPINION OF BORROWER'S COUNSEL
SCHEDULE "D" LEGAL PROCEEDINGS -- S. 2.01(g)
SCHEDULE "E" PPSA SEARCH RESULTS -- S. 2.01(f)
EDC LOAN NO. 880-CAN-7559
THIS LOAN AGREEMENT dated as of July 31, 1997 is made
BETWEEN
ROYAL OAK MINES INC.,
a corporation incorporated under the laws of the
Province of Ontario, having its registered head
office at Xxxxx 0000, 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx
and its executive offices at 0000 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx, X.X.X.
(hereinafter called the "BORROWER")
AND
EXPORT DEVELOPMENT CORPORATION,
a corporation established by an Act of the
Parliament of Canada, having its xxxx xxxxxx
xx Xxxxxx, Xxxxxx
(hereinafter called "EDC")
WHEREAS EDC, at the request of the BORROWER, is prepared to lend to the
BORROWER up to the amount of the CANADIAN DOLLAR equivalent of USD15,000,000,
on the terms and subject to the conditions of this Agreement, in order to
assist in financing the purchase of the GOODS and SERVICES from the SELLER;
AND WHEREAS as security for the performance of the BORROWER's obligations
hereunder, the BORROWER has agreed to cause to be delivered the SECURITY
DOCUMENTS;
NOW THEREFORE EDC and the BORROWER agree that:
ARTICLE I
DEFINITIONS
Section 1.01-Definitions
In this Agreement and the recitals, unless the context otherwise requires:
"ADVANCE" means an amount loaned or, as the context may require, to be loaned
to the BORROWER pursuant to this Agreement and "ADVANCED" means loaned or, as
the context may require, to be loaned to the BORROWER pursuant to this
Agreement;
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"BANK" means the Bank of Montreal, having its offices at First Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxx,
"BUSINESS DAY" means any day on which banks are open for business in Toronto,
Canada and New York, New York, U.S.A. and any place where a payment is
required on that day under this Agreement;
"BUY-BACK RIGHT" means the option of the BORROWER pursuant to Section 2.1.2
of the CONTRACT (Purchase Order No. 1834 dated February 7, 1997) to require
the SELLER to repurchase one or more of the R260 Euclid-Hitachi Hauler
vehicles delivered to the BORROWER for a predetermined percentage of the
purchase price under the CONTRACT if such vehicles do not meet certain agreed
mechanical availability criteria during the first six (6) months of operation;
"CAD-BA-CDOR" means, for each INTEREST PERIOD, the rate per annum determined
as of 10:00 a.m., Toronto time, on the first day of such INTEREST PERIOD, as
the average rate for CANADIAN DOLLAR bankers' acceptances quoted on the
REUTERS SCREEN CDOR PAGE by the banks used as reference banks for such
service for six-month periods. If CAD-BA-CDOR does not appear on the REUTERS
SCREEN CDOR PAGE, the rate for that INTEREST PERIOD will be determined as if
the parties had specified "CAD-BA-REFERENCE BANKS" as the applicable rate;
"CAD-BA-REFERENCE BANKS" means, for each INTEREST PERIOD, the rate per annum
determined as of 10:00 a.m., Toronto time, on the first day of such INTEREST
PERIOD on the basis of the average of the bid rates of the Bank of Montreal,
Canadian Imperial Bank of Commerce, Royal Bank of Canada and Toronto Dominion
Bank for CANADIAN DOLLAR bankers' acceptances for six-month periods. If
applicable, EDC will request the principal Toronto office of each bank to
provide a quotation of its rate;
"CANADA" means the Dominion of Canada, its provinces and territories and
includes any political sub-division thereof;
"CANADIAN DOLLARS" and "CAD" each means the currency of Canada;
"COLLATERAL" has the meaning ascribed to it in the SECURITY AGREEMENT;
"CONTRACT" means (a) Purchase Order No. 1835 dated February 7, 1997; (b)
Purchase Order No. 1834 dated February 7, 1997; (c) Purchase Order No. 4139
dated June 20, 1997; (d) Purchase Order No. 1931 dated April 21, 1997; (e)
Purchase Order No. 4236 dated May 6, 1997; and (f) Purchase Order No. 4235
dated May 6, 1997, as issued by Kemess Mines Inc. to the SELLER and as
amended by the Letter of the BORROWER dated July 31, 1997, and further
detailed in the Memorandum of the SELLER entitled "EDC Financing Update"
dated July 30,1997 for the purchase of the GOODS and SERVICES, as same may be
amended from time to time with the consent of EDC if required hereunder;
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"EVENT OF DEFAULT" means any of the events or circumstances described in
Section 10.01;
"EXPORTER" means Euclid-Hitachi Heavy Equipment Ltd., a corporation
incorporated under the laws of Canada, having its head office at Xxxxxx,
Xxxxxxx, Xxxxxx;
"FMAR" means the Fleet Mechanical Availability Report to be prepared by the
BORROWER;
"FIRST REPAYMENT DATE" means June 30, 1998, or if such date is not a BUSINESS
DAY, the next BUSINESS DAY;
"GOODS" means the seven R260 Euclid-Hitachi Hauler vehicles manufactured by
the EXPORTER and one XxXxxxxxxx Front-End loader manufactured by XxXxxxxxxx
Inc., together with associated spare parts to be supplied by the SELLER
pursuant to the CONTRACT and meeting the Canadian benefit requirements of EDC;
"INDEBTEDNESS" means, with respect to any person, any amount payable by that
person as debtor, borrower, issuer or guarantor pursuant to an agreement or
instrument involving or evidencing money borrowed or received or the deferred
purchase price of goods or services, the advance of credit, a conditional
sale or a transfer with recourse or with an obligation to repurchase, or
pursuant to a lease with substantially the same economic effect as any such
agreement or instrument, whether present or future, actual or contingent,
direct or indirect;
"INTEREST PAYMENT DATE" means:
(a) prior to the FIRST REPAYMENT DATE, June 30 and December 30 in each
year;
(b) the FIRST REPAYMENT DATE; and
(c) the dates which fall six and twelve months after the FIRST REPAYMENT
DATE and each anniversary of those dates;
or, if any such date is not a BUSINESS DAY, the next BUSINESS DAY;
"INTEREST PERIOD" means:
(a) for each ADVANCE, the period commencing on and including the date on
which that ADVANCE is made and ending on and including the date preceding the
next INTEREST PAYMENT DATE; or
(b) for those amounts in default payable pursuant to Section 4.06 and
Section 4.07, the period commencing on and including the date of default and
ending on and including the date preceding the next INTEREST PAYMENT DATE;
and thereafter the period commencing on and including an INTEREST PAYMENT
DATE and ending on and including the date preceding the next INTEREST PAYMENT
DATE;
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"LIENS" means any mortgage, leasehold mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, encumbrance, privilege, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
securing the obligations of any person individually in excess of USD1,000,000
or collectively in excess of USD10,000,000, but excluding:
(a) security interests in favour of EDC under the SECURITY AGREEMENT or the
KM SECURITY AGREEMENT
(b) security interests incurred, or pledges and deposits in connection
with, workers' compensation, unemployment insurance and other social security
benefits, and surety or appeal bonds and other obligations of like nature
incurred by the BORROWER or Kemess Mines Inc. in the ordinary course of
business;
(c) security interests imposed by law, including without limitation,
mechanics', carriers', repairmen's, warehousemen's, materialmen's and
suppliers' liens incurred by the BORROWER or Kemess Mines Inc. in the
ordinary course of business;
(d) liens for ad valorem, income, business or property taxes or
assessments and similar charges which either are not delinquent or are being
contested in good faith by appropriate proceedings for which the BORROWER or
Kemess Mines Inc. has set aside on its books reserves to the extent required
by GAAP; and
(e) undetermined or inchoate liens and charges incidental to current
operations which relate to obligations not due or delinquent;
"POTENTIAL DEFAULT" means any event or circumstance that, with notice, lapse
of time or a determination hereunder or any combination thereof would
constitute an EVENT OF DEFAULT
"SECURITY DOCUMENTS" means the Security Agreement of even date herewith of
the BORROWER (individually the "SECURITY AGREEMENT"), the Limited Recourse
Guarantee of Kemess Mines Inc. of even date herewith (individually the
"LRG"), and the Security Agreement of Kemess Mines INc. of even date
herewith (individually the "KM SECURITY AGREEMENT"), substantially in the
form of Schedule "B";
"SELLER" means Wajax Industries Limited, a corporation incorporated under the
laws of Canada, having an xxxxxx xx Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx;
"SERVICES" means the services to be supplied in connection with the GOODS
pursuant to the CONTRACT and meeting the Canadian benefit requirements of EDC;
"TAXES" means all present or future taxes of any kind or nature whatsoever
(other than TAXES imposed in Canada) including, without limitation, income
taxes, sales or value-added taxes, stamp taxes, levies, imposts, duties,
fees, royalties and all deductions and withholdings together with any
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fines, penalties and interest thereon and any restrictions or conditions
resulting in an obligation to pay monies to a government or governmental
agency; and
"UNITED STATES DOLLARS" and "USD" each means the currency of the United
States of America.
Section 1.02 - Rules of Interpretation
In this Agreement unless the context requires otherwise:
(a) the singular will include the plural and vice versa;
(b) references to a "person" will be construed as references to any
individual, firm, company, corporation, unincorporated body of persons or any
state or political subdivision thereof or any government or any agency
thereof;
(c) whenever any person is referred to, such reference will be deemed to
include the permitted assignees and successors of such person, whether by
operation of law, consolidation, merger, sale, amalgamation or otherwise as
applicable;
(d) references to a specified Article, Section or Schedule will be
construed as references to that specified Article or Section of, or Schedule
to, this Agreement
(e) references to any agreement or other instrument will be deemed to
include such agreement or other instrument as it may from time to time be
modified, amended, supplemented or restated in accordance with its terms and,
where required hereunder, with the consent of EDC;
(f) the terms "hereof", "herein" and "hereunder" will be deemed to refer
to this Agreement; and
(g) the headings of the Articles and Sections are inserted for
convenience only and will not affect the construction or interpretation of
this Agreement.
Section 1.03 - Currency of Account and Currency of Payment
In this Agreement, each specification of CANADIAN DOLLARS is of the essence
and CANADIAN DOLLARS are both the currency of account and the currency of
payment.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 -- Representations and Warranties
The BORROWER represents and warrants to EDC and except as otherwise permitted
or required hereunder, will be deemed to represent and warrant as of the date
of each ADVANCE (and it will be a condition of EDC's obligation to make each
ADVANCE and the making of any ADVANCE will not constitute a waiver thereof),
that:
(a) the BORROWER is a corporation duly incorporated, organized and
validly existing under the laws of Ontario and has its registered head office
at Toronto Ontario;
(b) the BORROWER has the power and authority to own its property and
assets and to carry on business as it is being carried on;
(c) the entering into and the performance by the BORROWER of the terms
of this Agreement and of each document to be delivered by the BORROWER with
respect thereto:
(i) are within its corporate powers and have been duly authorized by
all necessary corporate action;
(ii) are not in violation of any law, statute, regulation, ordinance
or decree of CANADA and are not contrary to public policy or public order in
CANADA; and
(iii) except for the security interest created hereunder, will not
result in or require the creation or imposition of a LIEN upon the COLLATERAL
ranking prior to or pari passu with the security constituted by the SECURITY
AGREEMENT whether created or imposed at law or pursuant to the terms of any
instrument to which the BORROWER is subject or by which any of its properties
or assets are bound;
(d) this Agreement has been duly executed and delivered and constitutes
the direct, legal, valid and binding obligations of the BORROWER enforceable
against the BORROWER in accordance with its terms;
(e) all registrations, consents, licences and approvals required under
the laws of CANADA in connection with the execution and delilvery by the
BORROWER of this Agreement, the performance by the BORROWER of the terms
thereof and the validity and enforceability and admissibility in evidence
thereof, have been effected or obtained and are in full force and effect
(f) based on researches conducted under personal property security
legislation in the provinces on Ontario and British Columbia, no third party
has perfected by registration any mortgage, charge, pledge or security
interest of any kind in personal property of the BORROWER as of the date of
this Agreement, except as disclosed in Schedule "E";
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(g) the audited financial statements of the BORROWER dated as of December 31,
1996, copies of which have been delivered to EDC, are true and correct and
accurately present the financial condition of the BORROWER and the results of
its operations for the period covered; such financial statements have been
prepared in accordance with GAAP applied on a consistent basis and between
the date of the financial statements and the date of this Agreement or, as
the case may be, between the date of any statements subsequently delivered to
EDC pursuant to Section 8.01(d) and the date of the ADVANCE on which this
representation is deemed to be made; there has been no material adverse
change in the financial condition or in the business or assets of the
BORROWER;
(h) there are no legal proceedings pending or, so far as is known to the
BORROWER, threatened before any court, arbitral tribunal, administrative
agency or governmental or other body having authority over it which could or
would materially adversely affect the financial condition or the operations
of the BORROWER or its ability to perform its obligations hereunder, except
for those listed at Schedule "D" hereto;
(i) to the best of its knowledge after due investigation, the BORROWER
is not in material violation of any term of its incorporating instrument and
by-laws or of any agreement, instrument evidencing indebtedness, mortgage,
franchise, license, judgment, decree, order, statute, rule, law, ordinance or
regulation to which it or its business or assets are subject; the entering
into, performance and compliance by the BORROWER with this Agreement and each
document to be delivered by the BORROWER with respect thereto will not result
in any such violation or constitute a default under or be in conflict with
any such term, or create any LIEN upon any of the assets of the BORROWER
pursuant to any such term including without limitation on the COLLATERAL; and
there is no such term which materially adversely affects or in the future may
(so far as the BORROWER can now foresee) materially adversely affect the
financial condition or the business or assets of the BORROWER or its ability
to perform its obligations hereunder;
(j) the irrevocable submission by the BORROWER to the non-exclusive
jurisdiction of the Courts of the Province of Ontario is legal, valid,
binding and enforceable;
(k) In respect of the security interest granted by the BORROWER in the
COLLATERAL pursuant to the SECURITY AGREEMENT:
(i) except for the security interests set out in Schedule "E" and
rights in the COLLATERAL acquired by Kemess Mines Inc. after the date hereof,
the BORROWER is, or with respect to COLLATERAL acquired after the date hereof
will be, the sole beneficial owner of the COLLATERAL, free and clear of any
TAXES or LIENS ranking prior to or pari passu with the security constituted
by the SECURITY AGREEMENT;
(ii) the BORROWER has, or with respect to COLLATERAL acquired after
the date hereof will have, the right to grant a security interest in the
COLLATERAL in favor of EDC on the terms of the SECURITY AGREEMENT;
8
(iii) the location specified in Schedule "B" of the SECURITY
AGREEMENT hereto as to business operations and records of the BORROWER is
accurate and complete and the COLLATERAL will be kept at such location except
to the extent that any of the COLLATERAL becomes obsolete or is no longer
required in connection with the operation of the BORROWER's business at such
location, the BORROWER may move the COLLATERAL to such other location(s) of
the BORROWER in CANADA or the United States of America as the BORROWER may
specify by prior written notice to EDC and which EDC shall approve if, acting
reasonably, it is satisfied that it shall be in no less advantageous a
position as regards its security interests in the COLLATERAL (or such part
thereof as is to be moved) as it was prior to such move;
(iv) the COLLATERAL is properly insured with reputable insurers
against loss or damage by fire and such other risks as EDC may reasonably
require to the full insurable value thereof, and the loss payable under the
insurance policies is payable to EDC in accordance with EDC's interest in the
said COLLATERAL; and
(1) that at least USD15,000,000 worth of the output of gold and/or copper of
the BORROWER will be exported annually from CANADA.
ARTICLE III
LOAN
Section 3.01 -- Loan
Subject to the terms and conditions of this Agreement and in reliance on the
foregoing representations and warranties, EDC agrees to lend to the BORROWER
the following in order to assist in financing the purchase of the GOODS and
SERVICES.
(a) up to the CANADIAN DOLLAR equivalent of USD12,500,000 to finance the
acquisition of that part of the GOODS and SERVICES consisting of seven R260
Euclid-Hitachi Hauler vehicles and associated spare parts and services
("Tranche "A""); and
(b) up to the CANADIAN DOLLAR equivalent of USD2,500,000 to finance the
acquisition of that part of the GOODS and SERVICES consisting of one
XxXxxxxxxx Front-End loader and associated spare parts and services ("Xxxxxxx
"X"").
Section 3.02 -- Disbursements
(a) The BORROWER authorizes EDC to make disbursements in accordance with
the terms of this Agreement (including Schedule "A") and all such
disbursements will constitute ADVANCES under this Agreement. The BORROWER
acknowledges that the disbursement terms set out herein may be different from
the payment terms under the CONTRACT.
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(b) EDC will advise the BORROWER, of the particulars of each ADVANCE,
including the amount in CANADIAN DOLLARS charged to the loan account of the
BORROWER pursuant to Section 3.03 and the rate of exchange used by EDC for
the purposes of Section 3.03 if applicable.
Section 3.03 -- Currency of Advances
(a) Subject to the provisions of Section 3.03 (b), each ADVANCE under
this Agreement will be disbursed by EDC either (i) if to the SELLER in
CANADIAN DOLLARS or UNITED STATES DOLLARS, in accordance with the
instructions received pursuant to Schedule "A", or (ii) if as a reimbursement
to the BORROWER, in CANADIAN DOLLARS.
(b) For each disbursement in UNITED STATES DOLLARS, EDC will obtain
the buying rate of the BANK for CANADIAN DOLLARS with UNITED STATES DOLLARS
on the date of each ADVANCE for delivery on the date of the ADVANCE. EDC will
use such rate to determine the amount of CANADIAN DOLLARS to be charged to
the loan account, of the BORROWER to provide the amount of UNITED STATES
DOLLARS required for a disbursement of an ADVANCE to the SELLER. The
indebtedness of the BORROWER for each such disbursement in UNITED STATES
DOLLARS will be the amount of CANADIAN DOLLARS so determined.
Section 3.04 -- Disclaimer
Notwithstanding that ADVANCES under this Agreement are to be used to finance
the purchase of the GOODS and/or SERVICES, the BORROWER agrees that EDC is
under no obligation to determine the validity, legality or enforceability of
the CONTRACT. If part or all of the CONTRACT or any related document is
repudiated or proves to be void, invalid, illegal or unenforceable, or if
there is any dispute relating to the CONTRACT, such event will not in any way
affect or impair the rights of EDC against the BORROWER under this Agreement
or any related document executed or issued by the BORROWER, or change in any
way the obligations of the BORROWER to EDC hereunder.
Section 3.05 -- Third Country Supply
Other than with respect to amounts to be ADVANCED under Section 3.01(b), no
amount will be ADVANCED by EDC pursuant to Section 3.01 of this Agreement in
respect of goods supplied to the BORROWER from a country other than Canada or
in respect of non-Canadian services, as determined by EDC, provided to the
BORROWER without EDC's prior written consent.
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ARTICLE IV
REPAYMENT OF PRINCIPAL, PAYMENT OF INTEREST
AND OTHER CHARGES
Section 4.01 -- Principal
Subject to the provisions of Sections 4.03, 4.09 and 4.10, the BORROWER will
repay to EDC or its order, the aggregate principal amount of all ADVANCES in
up to sixteen (16) consecutive installments on successive INTEREST PAYMENT
DATES commencing on the FIRST REPAYMENT DATE. Each installment will be in an
amount equal to the result obtained by dividing the aggregate of all ADVANCES
outstanding and not overdue hereunder thirty (30) days prior to the INTEREST
PAYMENT DATE on which such installment is due by the number of installments
then remaining to be paid with the last installment in each case being in the
amount necessary to repay in full the aggregate of all ADVANCES then
outstanding.
Section 4.02 -- Interest
(a) The BORROWER will pay to EDC interest on the aggregate of the Section
3.01(a) ADVANCES outstanding from time to time at the rate per annum equal to
the sum of (i) the six (6) month CAD-BA-CDOR, and (ii) 1.10% per annum.
(b) The BORROWER will pay to EDC interest on the aggregate of the Section
3.01(b) ADVANCES outstanding from time to time at the rate per annum equal to
the sum of (i) the six (6) month CAD-BA-CDOR; and (ii) 1.60% per annum.
(c) The BORROWER will pay on demand default interest if the BORROWER
fails to pay any amount due and payable hereunder at the rate per annum equal
to the pre-default rate for the applicable Tranche, increased in each case by
2.0% from the date of the payment default so long as such default will
continue and before and after demand and judgment until paid.
(d) If an ADVANCE is made within thirty (30) days before an INTEREST
PAYMENT DATE, interest will be calculated from the date of the ADVANCE but
will be paid starting only on the second INTEREST PAYMENT DATE after the
ADVANCE is made.
(e) Each determination of a rate of interest by EDC will be conclusive
evidence, in the absence of manifest error, of such rate of interest.
Interest will be calculated on the basis of the actual number of days elapsed
divided by 365. The actual yearly rate of interest to which the said rate so
calculated is equivalent to is the said rate multiplied by the actual number
of days in the year divided by 365.
(f) EDC shall, if so requested, confirm to the BORROWER the CAD-BA-CDOR
used to determine the applicable interest rate.
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(g) Interest at the rates herein provided will be calculated
semi-annually not in advance; will be due and payable on each INTEREST
PAYMENT DATE, and will be payable both before and after default, maturity and
judgment.
Section 4.03 -- Additional Cost and Illegality
(a) In the event that a law or regulation is enacted or changed, or the
interpretation or administration thereof is changed by the administering
governmental authority, or in the event that a judgment is rendered which:
(i) subjects EDC to any tax with respect to payments to be made by
the BORROWER to EDC hereunder (except for taxes on the overall net income of
EDC and those taxes contemplated by Section 4.07), or
(ii) imposes or modifies any reserve or similar requirement against
assets held by, or deposits in or for the account of, or loans by, an office
of EDC;
with the result that the cost to EDC of making or maintaining ADVANCES is
increased or the income receivable by EDC in respect of the principal
indebtedness of the BORROWER to EDC hereunder is reduced, the BORROWER will
pay to EDC on demand that amount which will compensate EDC for such
additional cost or reduction in income. Upon EDC having determined that it is
entitled to additional compensation in accordance with the provisions of this
Section 4.03(a), EDC will promptly notify the BORROWER thereof. A certificate
of EDC setting forth the amount of such additional compensation and the basis
therefor will be submitted by EDC to the BORROWER and will be conclusive
evidence of such amount in the absence of manifest error. EDC will have no
obligation to make any further ADVANCES after such event until EDC has
received the additional compensation.
In the event EDC gives the notice provided for in this Section 4.03(a), the
BORROWER will have the right, upon written notice to that effect (which will
be irrevocable and will constitute the BORROWER's undertaking to prepay
accordingly) delivered to EDC at least thirty (30) days prior to the next
INTEREST PAYMENT DATE, to prepay in full on such INTEREST PAYMENT DATE, the
said principal indebtedness of the BORROWER together with accrued interest
thereon and all other sums due hereunder (but without the premium
contemplated in Sections 4.09(b) and 4.10).
In the event of such prepayment, the obligation of EDC to make any further
ADVANCES will, at the option of EDC, thereupon terminate.
(b) If it will become unlawful in any relevant jurisdiction for EDC to
continue to make or to maintain ADVANCES or for EDC to make or receive any
payment or to perform, exercise or to give effect to any obligation, right or
benefit under this Agreement or any related document, the BORROWER will
prepay to EDC, if requested by EDC, forthwith or at the end of such period as
EDC will have permitted, the principal indebtedness of the
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BORROWER together with interest accrued thereon and all other sums due
hereunder to the date of such prepayment (but without the premium
contemplated in Sections 4.09(b) and 4.10). In the event of any such
illegality or prepayment, the obligation of EDC to make any further ADVANCES
will, at the option of EDC, thereupon terminate.
Section 4.04 -- Place and Manner of Payment
Amounts payable by the BORROWER to EDC pursuant hereto in CANADIAN DOLLARS
will be paid in CANADIAN DOLLARS without set-off or counterclaim not later
than 11:00 a.m. (Toronto time) on the day such payment is due and in funds
for same-day settlement, at Bank of Montreal, First Xxxx Xxxxx, Xxxxx
Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx X0X 0X0 for the credit of EDC, account
number 0000-876 in favour of EDC, or at such other account or financial
institution as EDC may, from time to time, notify the BORROWER
Section 4.05 -- No Deduction for Taxes
(a) All payments by the BORROWER to EDC hereunder will be made free and
clear of and without deduction or withholding for or on account of any TAXES
unless the BORROWER is required by law to make such a payment subject to the
deduction or withholding of such TAXES, in which case the sum payable by the
BORROWER in respect of which such deduction or withholding is required to be
made will be increased to the extent necessary to ensure that, after the
making of the required deduction or withholding, EDC receives and retains
(free from any liability in respect of any such deduction or withholding) a
net sum equal to the sum which it would have received and so retained had no
such deduction or withholding been made or required. The BORROWER will pay or
cause to be paid all TAXES imposed on or in connection with the execution
issuance, delivery, registration and enforcement of this Agreement or the
payment of principal, interest or any other charges payable by the BORROWER
hereunder, including all additional amounts and penalties payable in respect
of any delay or failure of the BORROWER to pay such TAXES.
(b) If the BORROWER cannot legally pay or remit such TAXES, or have them
paid as provided in Section 4.05(a), the rate of interest payable under this
Agreement will be increased to such rate as will yield to EDC, after payment
of such TAXES, the principal amounts ADVANCED by EDC with interest at the
rate specified in this Agreement, and all other amounts payable by the
BORROWER hereunder. The BORROWER will, at the request of EDC, execute and
deliver any further instrument necessary or advisable to reflect such
increase in the rate of interest.
Section 4.06 -- Administration Fee
The BORROWER acknowledges that the SELLER is required to pay to EDC an
administration fee in respect of this Agreement and the BORROWER authorizes
EDC to withhold for EDC's account a portion of the first disbursement to the
SELLER hereunder in payment of this fee. The SELLER has complete discretion
to disclose the administration fee to the BORROWER.
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Section 4.07 -- Costs and Expenses
(a) In respect of an amendment of this Agreement made at the request of
the BORROWER, preservation of rights under or enforcement of this Agreement,
the BORROWER will pay to EDC, within thirty (30) days of EDC's billing
therefor, all reasonable costs and expenses incurred by EDC in connection
with this Agreement, including without limitation, the fees and expenses of
independent legal counsel for EDC and all necessary travel costs of EDC and
its independent legal counsel.
(b) All documents or information to be furnished to EDC by the BORROWER
will be supplied at the BORROWER's expense.
Section 4.08 -- Application of Payments
All payments (other than a prepayment pursuant to Sections 4.09 and 4.10)
made by or for the account of the BORROWER under this Agreement will be
applied first to any payment which may be due and owing under Section 4.07,
then to interest due and payable, then to principal due and payable, and
lastly, to prepayment of installments of principal in inverse order of
maturity.
Section 4.09 -- Voluntary Prepayment
The BORROWER may, when not in default hereunder, prepay the principal
indebtedness of the BORROWER hereunder, in whole or from time to time in part,
provided that:
(a) each partial prepayment will be in an amount not less than the amount
of one installment of principal payable pursuant to Section 4.01 or a whole
multiple thereof,
(b) any such prepayment will be made only on the FIRST REPAYMENT DATE
and any INTEREST PAYMENT DATE thereafter,
(c) the BORROWER gives notice to EDC of its intention to make any such
prepayment not less than ninety (90) days prior to such prepayment, which
notice will be irrevocable and will constitute the BORROWER's undertaking to
prepay accordingly or in lieu of giving ninety (90) days notice of
prepayment, the BORROWER may pay to EDC, in addition to any other amounts
payable under this Section 4.09, an additional amount equal to ninety (90)
days interest on the principal amount being prepaid calculated at the rate
per annum set out in Sections 4.02(a) and (b) hereof;
(d) the BORROWER pays interest accrued on such principal amount being
prepaid to the date of prepayment as well as all other amounts due and
payable on the date of prepayment in respect of such principal amount being
prepaid; and
(e) amounts prepaid will be applied to installments payable in inverse
order of maturity and will not be re-ADVANCED.
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Section 4.10 -- Mandatory Prepayment
(a) If the CONTRACT is terminated by the BORROWER before completion, then
on the next INTEREST PAYMENT DATE following such event the BORROWER will
prepay to EDC the amount ADVANCED by EDC to the BORROWER in excess of the
purchase price of vehicles purchased pursuant to the CONTRACT prior to the
termination, plus, in each case, accrued interest and all other charges
payable hereunder.
(b) If the BORROWER exercises the BUY-BACK RIGHT before completion of the
CONTRACT, then on the later of the next INTEREST PAYMENT DATE following such
event and the INTEREST PAYMENT DATE following receipt by the BORROWER from
the SELLER of such sums of money as the BORROWER is entitled to receive from
the SELLER pursuant to the exercise of the BUY-BACK RIGHT the BORROWER will
repay to EDC the amount of Tranche "A" funds ADVANCED by EDC to the BORROWER
in respect of each vehicle subject to the BUY-BACK RIGHT, plus, in each case
accrued interest with respect to Tranche "A" and all other charges payable
hereunder.
(c) THE BORROWER shall give notice of its intention to make a prepayment
pursuant to Section 4.10(a) or (b) not less than ninety (90) days prior to
such prepayment, which notice will be irrevocable and will constitute the
BORROWER's undertaking to prepay accordingly or in lieu of giving ninety (90)
days notice of prepayment, the BORROWER may pay to EDC, in addition to any
other amounts payable under this Section 4.10, an additional amount equal to
ninety (90) days interest on the principal amount being prepaid calculated at
the rate per annum set out in Sections 4.02(a) and (b) hereof.
(d) Prepaid amounts will be applied to installments in inverse order of
their due dates.
Section 4.11 -- Optional Prepayment
In the event the BORROWER is required to prepay Tranche "A" in accordance
with Section 4.10(b), EDC may request that the BORROWER also simultaneously
repay the amount of Tranche "B" funds ADVANCED by EDC to the BORROWER, plus,
in each case accrued interest with respect to Tranche "B" and the BORROWER
may, but shall not be required to, make such payment.
Section 4.12 -- Indemnities
The BORROWER will indemnify and hold harmless EDC against any loss
(including loss of profit) costs, damage, liability or expense sustained or
incurred by EDC as a consequence of:
(a) any default in repayment of principal or payment of interest or any
other amount due hereunder;
(b) the delay or failure of the BORROWER to make payment of or in respect
of any TAXES pursuant to Section 4.05; or
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(c) any payment or prepayment of principal being made on other than an
INTEREST PAYMENT DATE,
including, in any such case, but not limited to, any loss, cost, damage,
liability or expenses sustained or incurred by EDC in liquidating or
re-employing deposits or funds from third parties acquired or to be acquired
to make ADVANCES or maintain or continue any amount already advanced or any
part thereof.
ARTICLE V
SECURITY
Section 5.01 -- Security
As security for the due and punctual payment and performance of all the
BORROWER's obligations to EDC hereunder, the BORROWER will deliver to EDC the
SECURITY DOCUMENTS. The security interests constituted under the SECURITY
AGREEMENT and the KM SECURITY AGREEMENT will be effective and the
undertakings thereunder in respect thereto will be continuing, whether the
ADVANCES hereby or thereby secured or any part thereof will be ADVANCED
before or after or at the same time as the creation of any such security
interest or before or after or upon the date of execution of this Agreement
and will not be affected by any payments made by the BORROWER hereunder or by
the balance of ADVANCES fluctuating from time to time.
ARTICLE VI
LOAN ACCOUNTS
Section 6.01 -- Loan Accounts
EDC will maintain one or more loan accounts in the name of the BORROWER in
accordance with normal business practices. The loan accounts of EDC will be
prima facie evidence (in the absence of manifest error) of the indebtedness
of the BORROWER to EDC and of the amounts due from time to time by the
BORROWER to EDC under this Agreement.
ARTICLE VII
PREDISBURSEMENT CONDITIONS
Section 7.01 -- First Advance
EDC will have no obligation to make any ADVANCES until it has received:
(a) an executed copy of each of the SECURITY DOCUMENTS;
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(b) evidence satisfactory to EDC that the security interest granted
pursuant to the SECURITY AGREEMENT and the KM SECURITY AGREEMENT has been
duly perfected by registration in the Province of British Columbia;
(c) an executed copy of the CONTRACT;
(d) relevant corporate documents showing due authorization, executions
and delivery of this Agreement such as resolutions, specimen signatures and
certificates of authorization, together with a certificate of status for the
BORROWER issued by the Ministry of Consumer and Commercial Relations of the
Province of Ontario or other appropriate entity satisfactory to EDC;
(e) satisfactory evidence of insurance coverage reasonably acceptable to
EDC with respect to the GOODS and that EDC has been named as a first loss
payee under the insurance policies effecting such coverage;
(f) a certificate of incumbency satisfactory to EDC, setting out the
names of persons authorized to sign any document relating to this Agreement
on behalf of the BORROWER, with specimen signatures of such persons. The
BORROWER agrees that EDC may rely on the authority of any such person until
notified in writing to the contrary (effective only upon actual receipt by
EDC), and any documents related to this Agreement signed by any person will
be binding upon the BORROWER;
(g) confirmation satisfactory to EDC from the SELLER that the SELLER has
received from the BORROWER an amount equivalent to any Goods and Services Tax
owing with respect to those GOODS and/or SERVICES financed with the ADVANCE.
(h) the opinion of counsel for the BORROWER, substantially in the form of
Schedule "C", respectively, and
(i) the opinion of counsel for EDC in British Columbia, to such effect as
EDC may reasonably require.
Section 7.02 -- Each Advance
EDC will have no obligation to make any ADVANCE unless each of the following
additional terms and conditions have been satisfied at the time the ADVANCE
is to be made:
(a) except as permitted or required hereunder, each of the
representations and warranties in Section 2.01 hereof and in Section 3 of the
SECURITY AGREEMENT will be true and correct as if made and repeated on the
date of the ADVANCE with reference to the facts then existing;
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(b) there will have been no material adverse change in the financial
condition or business or assets of the BORROWER since the date of the last
financial statements received pursuant to Section 2.01(g);
(c) the provisions of the Disbursement Terms contained in Schedule "A"
have been complied with in respect of the ADVANCE; and
(d) no EVENT OF DEFAULT or POTENTIAL DEFAULT will have occurred and be
continuing.
Section 7.03 -- Waiver of Predisbursement Conditions
The conditions in Sections 7.01 and 7.02 are for the benefit of EDC only and
may be waived by EDC, in whole or in part, and with or without conditions,
for any ADVANCE, without affecting EDC's right to require that such
conditions be satisfied for any other ADVANCE or ADVANCES.
ARTICLE VIII
COVENANTS OF BORROWER
Section 8.01 -- Covenants of Borrower
The BORROWER covenants and agrees with EDC that, unless compliance has been
waived by EDC, it will:
(a) punctually pay to EDC all principal, interest and any other amounts
owing by it to EDC under this Agreement on the dates, at the place, in the
currency or currencies and in the manner specified herein;
(b) maintain its corporate existence in good standing;
(c) carry on its business in a proper and businesslike manner, and
maintain all material properties, material rights, material contracts and
material authorizations necessary or useful in the conduct of its business;
(d) within one hundred and twenty (120) days after the end of each
financial year, deliver to EDC a copy of its audited financial statements
(including a balance sheet and statement of profit and loss), with a
certificate of its independent auditors (who shall be auditors experienced in
auditing public companies of similar size), stating that in their opinion,
without any material qualification, the statements accurately present the
financial position of the BORROWER and the results of its operations for the
financial year being reported on, in accordance with GAAP consistently
applied;
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(e) keep its assets and business, including the COLLATERAL, insured in
the manner and to the extent customary in Canada for similar businesses;
(f) obtain and maintain in force any authorization or registration from
any administrative or governmental agency or other body required under the
laws of CANADA which is or may become necessary for the BORROWER to fulfill
its obligations hereunder and under the CONTRACT;
(g) not consolidates or merge into another corporation, or sell or assign
all or substantially all of its assets (determined on a consolidated basis),
unless as a result of such merger or consolidation, sale or assignment the
surviving corporation shall have a consolidated net worth equal to or greater
than the consolidated net worth of the BORROWER immediately prior to such
transaction;
(h) provide a FMAR to EDC on a monthly basis for the six (6) months
following the date of this Agreement and thereafter on an annual basis if so
requested by EDC;
(i) not create or permit to exist or continue any LIENS over the
COLLATERAL as security for any INDEBTEDNESS of the BORROWER ranking prior to
or pari passu with the security constituted by the SECURITY AGREEMENT or the
KM SECURITY AGREEMENT;
(j) not sell, lease, assign or otherwise dispose of the COLLATERAL other
than:
(i) sale or lease of any COLLATERAL to Kemess Mines Inc.; and
(ii) sale, trade-in or other dispositions of any of the COLLATERAL
which becomes obsolete to any supplier or vendor of replacement vehicles or
equipment of comparable value upon prior written notice to EDC, provided EDC
receives a security interest in form and content satisfactory to EDC in such
replacement vehicles or equipment;
(k) not, without the consent of EDC, and except as otherwise provided for
in the CONTRACT, cancel or terminate or permit the cancellation or
termination of the CONTRACT or make or permit the making of any material
amendments to the CONTRACT which relate to the purchase price, the terms and
manner of payment, the time and manner of delivery of any GOODS or SERVICES
or which reduce the Canadian benefit derived from the sale of any GOODS or
SERVICES;
(l) promptly notify EDC of any material dispute under the CONTRACT of
which it becomes aware;
(m) promptly notify EDC of the occurrence of any EVENT OF DEFAULT or
POTENTIAL DEFAULT;
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(n) comply in all material respects with the requirements of all laws,
statutes, regulations, authorizations, approvals, licenses or registrations
required to own its properties and assets, including without limitation, the
COLLATERAL, and carry on its business as currently carried on and to perform
its obligations under the SECURITY AGREEMENT;
(o) in respect of the COLLATERAL;
(i) maintain and preserve all of the COLLATERAL in good repair,
working order and condition, subject to normal wear and tear, and, from time
to time, make all needful and proper repairs, renewals, replacements,
additions and improvements thereto and carry on its business in a proper and
efficient manner so as to preserve and protect the COLLATERAL and the
earnings, incomes, issues and profits thereof;
(ii) at any reasonable time and from time to time, upon reasonable
prior notice, the BORROWER, will permit EDC (at EDC's expense) or any
representative thereof to verify the existence and state of the COLLATERAL in
any manner EDC may consider appropriate;
(iii) keep the COLLATERAL free and clear of all TAXES, LIENS,
assessments and claims ranking prior to or pari passu with the security
constituted by the SECURITY AGREEMENT and the KM SECURITY AGREEMENT;
(iv) promptly notify EDC of any loss of or material damage to the
COLLATERAL;
(v) promptly notify EDC of any change in the name of the BORROWER
or the location of its chief executive offices;
(vi) take all steps and all actions as may be reasonably required or
deemed advisable by EDC to perfect or more fully evidence EDC's rights and
interest in the COLLATERAL over which a security interest has been granted to
EDC under the SECURITY AGREEMENT and the KM SECURITY AGREEMENT.
ARTICLE XI
CANADIAN BENEFIT
Section 9.01 -- Canadian Benefit
The BORROWER acknowledges that EDC has entered into this Agreement to finance
goods and services of Canadian manufacture and origin (with the exception of
the equipment to be financed under Tranche "B"). The BORROWER and EDC both
acknowledge and confirm that the EXPORTER has advised them that the
COLLATERAL (other than the equipment to be financed under Tranche "B") is of
Canadian manufacture and origin; that the GOODS and/or SERVICES
20
will have the maximum practicable Canadian benefit, and that it is the
responsibility of the EXPORTER to satisfy EDC that EDC's Canadian benefit
requirements are met.
ARTICLE X
DEFAULT
Section 10.01 -- Events of Default
The occurrence of any of the following will be a default by the BORROWER
under this Agreement:
(a) the non-payment within three (3) BUSINESS DAYS of the due date
thereof of any sum payable hereunder or under the SECURITY AGREEMENT, whether
at maturity, by acceleration or otherwise;
(b) if the BORROWER (i)makes an assignment for the benefit of its
creditors; or (ii)petitions or applies to any tribunal for the appointment of
a receiver or trustee for itself or any substantial part of its assets;
or(iii) starts any proceeding relating to itself under any present or future
reorganization, arrangement, adjustment of debt, dissolution or liquidation
law of any jurisdiction; or (iv)in any way consents to, approves or
acquiesces in any bankruptcy, reorganization or insolvency proceeding started
by any other person, or any proceeding by any other person for the
appointment of a receiver or trustee for the BORROWER or any substantial part
of its assets; or (v)allows any receivership or trusteeship to remain
undischarged for a period of thirty (30) days; or (vi)becomes or is declared
by any competent authority to be bankrupt or insolvent;
(c) if the BORROWER consolidates or merges into another corporation, or
sells or assigns all or substantially all of its assets (determined on a
consolidated basis), and as a result of such merger, consolidation, sale or
assignment the surviving corporation has a consolidated net worth less than
the consolidated net worth of the BORROWER immediately prior to such
transaction;
(d) if the BORROWER (i)fails to pay any amount due under the Indenture
between the BORROWER, Kemess Mines Inc. and Mellon Bank dated August 12, 1996
(the "Indenture"); (ii)fails to pay in the aggregate any amount due in excess
of USD10,000,000 (or its equivalent in other currencies as determined by EDC)
under any loans, guarantees or security agreements (other than that
instrument referred to in sub-section (i)hereof to which it is a party, on
the due date or within any applicable grace period; or (iii)defaults under
any other term of the Identure which would allow (assuming the giving of
appropriate notice if required) the holder of the Indenture to declare the
indebtedness thereunder to be immediately due and payable or to be due and
payable on demand or to suspend of advances thereunder.
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(e) if any representation or warranty made by or on behalf of the
BORROWER in this Agreement or in any related document or opinion will have
been incorrect in any material respect when made or deemed to be made.
(f) if any court makes any judgment or order, or any law, ordinance,
decree or regulation is enacted the effect of which is to make this Agreement
or the SECURITY AGREEMENT or any material provision hereof or thereof invalid
or unenforceable, and the BORROWER fails to provide replacement documents
satisfactory to EDC evidencing, and where applicable, securing its
INDEBTEDNESS under this Agreement within thirty (30) days of such event.
(g) if the BORROWER creates or permits to exist or continue any LIENS
over the COLLATERAL as security for the INDEBTEDNESS of the BORROWER or any
other person ranking prior to or pari passu with the security constituted by
the SECURITY AGREEMENT and the KM SECURITY AGREEMENT.
(h) if the BORROWER fails to take all steps and all actions as may be
reasonably required or deemed advisable by EDC to perfect or more fully
evidence EDC's rights and interest in the COLLATERAL over which a security
interest has been granted by the BORROWER to EDC under the SECURITY AGREEMENT.
(i) if the BORROWER fails to obtain or maintain in force any material
authorization or registration from any administrative or governmental agency
or other body required under the laws of CANADA which is or may become
necessary for the BORROWER to fulfill its obligations hereunder and under the
SECURITY AGREEMENT; or
(j) if the BORROWER defaults in the due performance or observance of any
term of this Agreement or the SECURITY AGREEMENT other than those
specifically dealt with in this Section 10.01, which is not remedied with
forty-five (45) days after notice by EDC to do so.
Section 10.02 - Suspension of Advances
If at any time, (a) an EVENT OF DEFAULT or a POTENTIAL DEFAULT occurs and is
continuing, or (b) in the reasonable judgment of EDC, an event or
circumstance occurs which makes it unlikely that the BORROWER will be able to
perform its obligations under this Agreement or the SECURITY AGREEMENT on a
timely basis, EDC may, without prejudice to the obligations of the BORROWER
hereunder or under the SECURITY AGREEMENT, including without limitation, the
obligation to pay interest and to repay principal, by notice to the BORROWER,
suspend EDC's obligation to make ADVANCES, which suspension will continue
until EDC notifies the BORROWER that the suspension is removed.
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Section 10.03 -- Termination of Advances and Acceleration
If an EVENT OF DEFAULT occurs and is continuing, EDC may by one or more
notices to the BORROWER do one or more of the following:
(a) declare that EDC is under no further obligation to make ADVANCES,
whereupon such obligation will cease,
(b) declare that all or part of the indebtedness of the BORROWER under
this Agreement to be payable on demand whereupon the same together with all
accrued interest and any other amounts payable under this Agreement will
immediately become payable on demand, and
(c) declare all or part of the indebtedness of the BORROWER under this
Agreement to be immediately due and payable, whereupon the same will become
immediately due and payable, together with all accrued interest and any other
amounts payable under this Agreement without any further demand or notice of
any kind, and
(d) exercise all other rights and remedies available to it under the
SECURITY AGREEMENT.
Section 10.04 -- Remedies Cumulative
The rights and remedies of EDC under this Agreement are cumulative and are in
addition to, and not in substitution for, any rights or remedies provided by
law. Any single or partial exercise by EDC of any rights under this Agreement
or any failure to exercise or delay in exercising any such right or remedy
will not be or be deemed to be a waiver of, or will not prejudice, any other
rights or remedies to which EDC may be entitled for any EVENT OF DEFAULT or
POTENTIAL DEFAULT. Any waiver by EDC of the strict compliance with any term
of this Agreement or any related document will not be deemed to be a waiver
of any subsequent EVENT OF DEFAULT or POTENTIAL DEFAULT.
Section 10.05 -- Performance of Borrower's Covenants
If the BORROWER is in default of any obligation hereunder, then EDC may,
without waiving or releasing the BORROWER from any of its obligations and
without prejudice to any right or remedy of EDC, observe and perform or cause
to be performed such obligations and in that connection pay such monies as
may be required. Any such monies paid out by EDC will be repayable to EDC on
demand, with interest at the rate specified and calculated in the manner
described in Section 4.02(b) from the date of payment by EDC.
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ARTICLE XI
NOTICE
Section 11.01 -- Notice
Every notice, demand, request, consent, waiver or agreement under this
Agreement will be in writing, and in English, English being the governing
language of this Agreement. All documents will be hand-delivered or sent by
prepaid air mail or by telefax to the following addresses:
for the BORROWER,
ROYAL OAK MINES, INC.
c/o Royal Oak Mines (U.S.A.) Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx, X.X.X.
Attention: Chief Financial Officer
Telefax: (000)000-0000
for EDC,
EXPORT DEVELOPMENT CORPORATION
000 X'Xxxxxx Xxxxxx
Xxxxxx, Xxxxxx, X0X 0X0
Attention: Loans Operations
Telefax: (000)000-0000
or such other address or numbers which either party may from time to time
notify the other in writing. Documents if delivered by hand will be deemed
to be received upon delivery, if sent by prepaid air mail on the second
Business Day after mailing and if transmitted by telefax the day of
transmission unless such day is not a Business Day, in which case the Business
Day following. In this Agreement, "in writing" includes printing,
typewriting, or any electronic transmission that can be reproduced as printed
text, on paper, at the point of reception. In this Section 11.01 "Business
Day" means a day in the recipient's jurisdiction when banks are generally
open for public business.
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ARTICLE XII
PROPER LAW, SUBMISSION TO JURISDICTION AND WAIVERS
Section 12.01 -- Proper Law
This Agreement is made under and will be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein and will not be governed by public international law
or the laws of any other jurisdiction.
Section 12.02 -- Waiver of Immunity
The BORROWER agrees that this Agreement and the transactions contemplated
herein constitute commercial activity within the meaning of the State
Immunity Act of Canada. The BORROWER irrevocably waives, for each relevant
jurisdiction, any right of immunity which it or any of its property has or
may acquire in respect of its obligations hereunder, including, without
limitation, any immunity from jurisdiction, suit, judgment, set-off,
execution, attachment (and in an action in rem, arrest, detention, seizure
and forfeiture) or other legal process (including, without limitation, relief
by way of injunction and specific performance).
Section 12.03 -- Waiver of Prior Proceeding
The BORROWER irrevocably waives, to the fullest extent permitted by
applicable law, any claim that any action or proceeding commenced by EDC
relating in any way to this Agreement should be dismissed or stayed by
reason, or pending the resolution of, any action or proceeding commenced by
the BORROWER relating in any way to the Agreement, whether or not commenced
earlier. To the fullest extent permitted by applicable law, the BORROWER
will take all measures necessary for any such action or proceeding commenced
by EDC to proceed to judgment or award prior to the entry of judgment in any
such action or proceeding commenced by the BORROWER.
Section 12.04 -- Submission to Jurisdiction
Any legal proceeding with respect to this Agreement or to enforce any
judgment obtained against the BORROWER or its assets may be brought by EDC in
the Courts of the Province of Ontario, Canada, in the Courts of the Province
of British Columbia, in the courts of any jurisdiction where the BORROWER may
have assets or carries on business or in the courts where payments are to be
made hereunder and the BORROWER hereby irrevocably submits to the
non-exclusive jurisdiction of each such court and acknowledges its competence.
The BORROWER agrees that a final judgement against it in any such legal
proceeding will be conclusive and may be enforced in any other jurisdiction
by suit on the judgment (a certified or exemplified copy of which judgment
will be conclusive evidence of the fact and of the amount of the BORROWER's
indebtedness) or by such other means provided by law.
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ARTICLE XIII
MISCELLANEOUS
Section 13.01 -- Insurance
Notwithstanding any other provision to the contrary herein contained, in the
event that any of COLLATERAL is damaged or destroyed, the net proceeds of any
such insurance shall be released by EDC to the BORROWER to be used solely for
repairing and/or replacing the COLLATERAL which is damaged or destroyed.
Section 13.02 -- Severability of Provisions
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction will, as to that jurisdiction, be ineffective to the extent of
that prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of that
provision in any other jurisdiction.
Section 13.03 -- Judgment Currency
The obligation of the BORROWER under this Agreement to make payments in
CANADIAN DOLLARS will not be discharged or satisfied by any payment or
recovery, whether pursuant to any judgment or otherwise, expressed in or
converted into any other currency except to the extent of the amount of
CANADIAN DOLLARS that is actually received by EDC as a result of such payment
recovery. Accordingly, the obligation of the BORROWER to pay in CANADIAN
DOLLARS will be enforceable as an alternative or additional cause of action
for the purpose of recovery in such other currency of the amount by which
such actual receipt by EDC falls short of the full amount of CANADIAN DOLLARS
payable under this Agreement and such obligation will not be affected by
judgment being obtained for any other sums due under this Agreement.
Section 13.04 -- Counterparts and Telefax
This Agreement may be executed in any number of counterparts, each of which
will be deemed to be an original and all of which will constitute together
one and the same instrument and the parties agree that receipt by telefax of
an executed copy of this Agreement will be deemed to be receipt of an
original.
ARTICLE XIV
SUCCESSORS AND ASSIGNS
Section 14.01 -- Successors and Assigns
This Agreement will be binding upon and enure to the benefit of the parties
and their respective successors and assigns. The BORROWER may not assign or
transfer all or any part of its rights
26
or obligations hereunder. EDC may syndicate or participate to any Canadian
chartered bank all or part of the loan contemplated in this Agreement.
IN WITNESS WHEREOF the parties hereto have signed and delivered this
Agreement.
ROYAL OAK MINES INC.
Signature /s/ Xxxxxxxx X. Xxxxx
-------------------------
(Print Name): XXXXXXXX X. XXXXX
EXPORT DEVELOPMENT CORPORATION
Signature /s/ Xxxxx Xxxxx
-------------------------
(Print Name): XXXXX XXXXX
Signature /s/ Xxxxx Xxxxx
-------------------------
(Print Name): XXXXX XXXXX
Schedule "A" to the Loan Agreement No. 880-CAN-7559 made between ROYAL OAK
MINES INC. and EXPORT DEVELOPMENT CORPORATION.
DISBURSEMENT TERMS
1. Each amount charged to the account of the BORROWER by EDC in respect of
amounts ADVANCED pursuant to Section 3(c) below will be disbursed to the
SELLER in UNITED STATES DOLLARS by deposit to the account and bank designated
in writing to EDC by the SELLER. Each amount charged to the account of the
BORROWER by EDC in respect of amounts ADVANCED pursuant to Section 3(d) below
will be disbursed to the BORROWER in CANADIAN DOLLARS by deposit to the
account and bank designated in writing to EDC by the BORROWER.
2. If the BORROWER has already paid part or all OF the purchase price of the
GOODS and/or SERVICES, at the request of the BORROWER and on confirmation
from the SELLER that it has received such payment, EDC will disburse an
ADVANCE in respect thereof directly to the BORROWER, with any wire transfer
costs to be payable by the BORROWER.
3. EDC is hereby authorized to make ADVANCES for the account of the BORROWER
up to the amount being financed by EDC upon receipt by EDC of the following:
(a) prior to the first ADVANCE hereunder, a statement from the SELLER
naming the individuals authorized to sign documents on its behalf, with
specimen signatures of such individuals;
(b) prior to the first ADVANCE hereunder, the SELLER's banking
instructions;
(c) for each ADVANCE in respect of Purchase Order Nos. 1834 or 1835;
(i) an invoice, numbered and dated, of the SELLER, expressed in UNITED
STATES DOLLARS and issued pursuant to the relevant Purchase Order and
referring to the GOODS and/or SERVICES to which it relates;
(ii) a photocopy of the Commissioning Report issued in respect of the
GOODS which are the subject of that ADVANCE and issued by Euclid-Hitachi
Heavy Equipment Ltd. (for GOODS supplied pursuant to Purchase Order No. 1835);
(iii) an approval issued by the Chief Financial Officer or Treasurer
of the BORROWER to pay each invoice which is the subject of that ADVANCE;
2
(d) for each ADVANCE in respect of Purchase Order Nos. 1931, 4139, 4235
or 4236:
(i) an invoice, numbered and dated, expressed in CANADIAN DOLLARS
and issued pursuant to the relevant Purchase Order and referring to the GOODS
and/or SERVICES to which it relates;
(ii) confirmation from the BORROWER that is has made full payment
against each invoice to the relevant supplier or that it will use the
proceeds of the ADVANCE being requested to make full payment to that supplier
on or before the due date of each invoice.
4. A copy of these Disbursement Terms shall be delivered to the SELLER by
EDC.
Schedule "B" to the Loan Agreement No. 880-CAN-7559 made between ROYAL OAK
MINES INC. and EXPORT DEVELOPMENT CORPORATION.
SECURITY DOCUMENTS
SECURITY AGREEMENT
1. SECURITY INTEREST
(a) For value received the UNDERSIGNED (the "Debtor") hereby grants to
EXPORT DEVELOPMENT CORPORATION ("EDC"), by way of mortgage, charge,
assignment and transfer, a security interest ("Security Interest") in the
following:
(i) intangibles of the Debtor being all right, title and interest of
the Debtor in and to: (1) Purchase Order No. 1835 dated February 7, 1997; (2)
Purchase Order No. 1834 dated February 7, 1997; (3) Purchase Order No. 4139
dated June 20, 1997; (4) Purchase Order No. 1931 dated April 21, 1997; (5)
Purchase Order No.4236 dated May 6, 1997; and (6) Purchase Order No. 4235
dated May 6, 1997, each as issued by Kemess Mines Inc. to Wajax Industries
Limited (the "Seller") and as amended by the Letter of the Debtor dated July
28, 1997 and further detailed in the Memorandum of the Seller entitled "EDC
Financing Update" dated July 14, 1997 (collectively, as the same may be
amended from time to time with the consent of EDC if required under the Loan
Agreement (as defined below), the "Contract"), including without limitation,
all summary and working purchase order drafts, the Buy-Back Right (as defined
in the Loan Agreement (as defined below)) and any warranties or other rights
under or in respect of the Contract;
(h) the following goods (including without limitation all parts,
accessories, attachments, replacements, additions, repairs and accessions
thereto whether or not acquired by the Debtor under the Contract) now owned
or hereafter owned or acquired by the Debtor or Kemess Mines Inc. under the
contract (collectively, the "Equipment"):
Unit Description Serial Number
--------- ----------------- ---------------
1. Loader XxXxxxxxxx X0000 2037
2. Truck#1 Euclid R260 401ADD75749
3. Truck#2 Euclid R260 401ADD75767
4. Truck#3 Euclid R260 401ADD75782
5. Truck#4 Euclid R260 401ADD75800
6. Truck#5 Euclid R260 401ADD75906
7. Truck#6 Euclid R260 410ADD75907
8. Truck#7 Euclid R260 401ADD75909
2
and in all proceeds thereof, accretions thereto and substitutions therefor
and in all of the following now owned or hereafter owned or acquired by or on
behalf of the Debtor, namely:
(iii) all deeds, documents, writing, papers and books relating to or
being records of the Equipment or the Contract or their proceeds or by which
the Equipment or the Contract or their proceeds are or may hereafter be
secured, evidenced, acknowledged or made payable including Documents of
Title, Chartel Paper, Securities and Instruments relating to the Equipment or
the Contract; and
(iv) all contractual rights and insurance claims relating to the
Equipment or the Contract;
all of the foregoing being hereinafter collectively called
"Collateral".
(b) Unless otherwise limited herein, the terms "Goods", "Chartel Paper",
"Documents of Title", "Instruments", "Securities", "proceeds", "accession",
"Money", "financing statements" and "financing change statements" whenever
used herein shall be interpreted pursuant to their respective meanings when
used in The Personal Property Security Act of the province of British
Columbia, as amended from time to time, which Act, including amendments
thereto and any Act substituted therefor and amendments thereto is herein
referred to as the "P.P.S.A." Provided always that the term "Goods" when used
herein shall not include "consumer goods" or "inventory" of the Debtor as
those terms are defined in the P.P.S.A. Any reference herein to "Collateral"
shall, unless the context otherwise requires, be deemed a reference to
"Collateral or any part thereof".
2. INDEBTEDNESS SECURED
The Security Interest granted by the Debtor to EDC secures payment and
performance of any and all obligations, indebtedness and liability of the
Debtor to EDC (including interest thereon), present or future, direct or
indirect, absolute or contingent, matured or not, extended or renewed,
pursuant to the loan agreement dated July 31, 1997 between the Debtor and
EDC, as amended, restated, replaced, modified, supplemented or novated from
time to time (the "Loan Agreement"), and any ultimate unpaid balance thereof
and whether the same is from time to time reduced and thereafter increased or
entirely extinguished and thereafter incurred again and whether the Debtor be
bound alone or with another or others and whether as principal or surety
(hereinafter collectively called the "Indebtedness").
3. REPRESENTATIONS AND WARRANTIES OF THE DEBTOR
The Debtor represents and warrants and so long as this Security Agreement
remains in effect shall be deemed to continuously represent and warrant that:
(a) the Collateral is genuine and owned by the Debtor free of all Liens
(as defined in the Loan Agreement) ranking prior to or pari passu with the
Security Interest:
3
(b) the Debtor is authorized to enter into this Security Agreement;
(c) each debt, Chattel Paper and Instrument constituting proceeds of the
Equipment is enforceable in accordance with its terms against the party
obligated to pay the same; and
(d) the locations specified in Schedule "A" are accurate and complete
save for Equipment in transit to such locations.
4. COVENANTS OF THE DEBTOR
So long as this Security Agreement remains in effect the Debtor covenants
and agrees;
(a) to notify EDC in accordance with the Loan Agreement of:
(i) any change in the information contained herein or in the
Schedules hereto relating to the Debtor, the Debtor's business or Collateral.
(ii) the details of any material claims or litigation affecting the
Debtor or Collateral.
(iii) any loss or material damage to Collateral,
(iv) any default by any obligor under any agreement, instrument or
other document, the obligations under which constitute proceeds of
Collateral, in payment or other performance of his obligations; and
(v) the return to or repossession by the Debtor of Collateral;
(b) to do, execute, acknowledge and deliver such financing statements,
financing change statements and further assignments, transfers, documents,
acts, matters and things (including further schedules hereto) as may be
reasonably requested by EDC of or with respect to Collateral in order to give
effect to these presents and to pay all costs for searches and filings in
connection therewith;
(c) to pay all taxes, rates, levies, assessments and other charges of
every nature which may be lawfully levied, assessed or imposed against or in
respect of the Debtor or Collateral as and when the same become due and
payable;
(d) to prevent Collateral from being or becoming an Accession to other
property not covered by this Security Agreement;
(e) to deliver to EDC from time to time promptly upon request:
(i) any Documents of Title, Instruments, Securities and Chattel
Paper constituting, representing or relating to Collateral,
4
(ii) all books of account and all records, ledgers, reports,
correspondence, schedules, documents, statements, lists and other writings
relating to Collateral for the purpose of inspecting, auditing or copying the
same,
(iii) the annual financial statements prepared by or for the Debtor
regarding the Debtor's business.
(iv) all policies and certificates of insurance relating to
Collateral, and
(v) such information concerning Collateral, the Debtor and the
Debtor's business and affairs as EDC may reasonably request;
(f) not to remove the Collateral from the Province of British Columbia to
another jurisdiction, unless it is to another jurisdiction in Canada or the
United States of America and:
(i) the Debtor give EDC prior written notice;
(ii) the Debtor makes any registrations required in order to
continue the validity, effectiveness and perfection of the security interests
of EDC in the Collateral in the jurisdiction into which the Collateral is to
be moved, and evidence thereof is provided to EDC; and
(iii) the Debtor delivers to EDC an opinion of the Debtor's counsel,
in form satisfactory to EDC, to the effect that EDC's security interests in
the Collateral are enforceable and have been duly registered and perfected in
the jurisdiction into which the collateral is to be moved.
5. USE AND VERIFICATION OF COLLATERAL
Subject to compliance with the Debtor's covenants contained herein and Clause
7 hereof, the Debtor may, until default, possess, operate, collect, use and
enjoy and deal with Collateral in the ordinary course of the Debtor's
business in any manner not inconsistent with the provisions hereof; provided
always that EDC shall have the right at any time and from time to time to
verify the existence and state of the Collateral in any manner EDC may
consider appropriate and the Debtor agrees to furnish all assistance and
information and to perform all such acts as EDC may reasonably request in
connection therewith and for such purpose to grant to EDC or its agents
access to all places where Collateral may be located and to all premises
occupied by the Debtor.
6. SECURITIES
If Collateral at any time includes Securities, the Debtor authorizes EDC to
transfer the same or any part thereof into its own name or that of its
nominee(s) so that EDC or its nominee(s) may appear of record record as the
sole owner thereof, provided that, until default, EDC shall deliver promptly
to the Debtor all notices or other communications received by it or its
nominee(s) as such registered owner and, upon demand and receipt of payment
of any necessary expenses thereof, shall issue to the Debtor or its order a
proxy to vote and take all action with respect to such Securities. After
default, the Debtor waives all rights to receive any notices or
5
communications received by EDC or its nominee(s) as such registered owner and
agrees that no proxy issued by EDC to the Debtor or its order as aforesaid
shall thereafter be effective.
7. COLLECTION OF DEBTS
Before or after default under this Security Agreement, EDC may notify all or
any obligors under any agreement, instrument or other document, the
obligations under which constitute proceeds of Collateral, of the Security
Interest and may also direct such obligors to make all payments on Collateral
to EDC. The Debtor acknowledges that any payments on or other proceeds of
Collateral received by the Debtor from such obligors, whether before or after
notification of this Security Interest to such obligors and whether before or
after default under this Security Agreement, shall be received and held by
the Debtor in trust for EDC and shall be turned over to EDC upon request.
8. DISPOSITION OF MONEY
Subject to any applicable requirements of the P.P.S.A., all Money collected
or received by EDC pursuant to or in exercise of any right it possesses with
respect to Collateral shall be applied on account indebtedness in accordance
with the provisions of the Loan Agreement.
9. EVENTS OF DEFAULT
The nonpayment when due, whether by acceleration or otherwise, of any
principal or interest forming part of the Indebtedness or the failure of the
Debtor to observe or perform to any obligation, covenant, term, provision or
condition contained in this Security Agreement or the Loan Agreement or any
other agreement between the Debtor and EDC relating to the Collateral,
including without limitation the Loan Agreement shall constitute default
hereunder which is herein referred to as "default".
10. ACCELERATION
EDC, in its sole discretion, may declare all or any part of the Indebtedness
which is not by its terms payable on demand to be immediately due and
payable, without demand or notice of any kind, in the event of default. The
provisions of this clause are not intended in any way to affect any rights of
EDC with respect to any Indebtedness which may now or hereafter to be payable
on demand.
11. REMEDIES
(a) Upon default, EDC may appoint or reappoint by instrument in writing,
any person or persons, whether an officer or officers or an employee or
employees of EDC or not, to be a receiver or receivers(hereinafter called a
"Receiver" which term when used herein shall include a receiver and manager)
of the Collateral and may remove any Receiver so appointed and appoint
another in his stead. Any such Receiver shall, so far as concerns
responsibility for his acts, be deemed the agent of the Debtor and not the
EDC, and EDC shall not be in any way responsible for any agent misconduct,
negligence, or non-feasance on the part of any such Receiver, his servants,
agents or employees. Subject to the provisions of the instrument
6
appointing him, any such Receiver shall have power to take possession of the
Collateral, to preserve the Collateral or its value, and to sell, lease or
otherwise dispose of or concur in selling, leasing or otherwise disposing of
the Collateral. To facilitate the foregoing powers, any such Receiver may
enter upon all premises owned or occupied by the Debtor wherein the
Collateral may be situate, maintain the collateral upon such premises, and
borrow money on a secured or unsecured basis as such Receiver shall, in his
discretion, determine. Except as may be otherwise directed by EDC, all Money
received from time to time by such Receiver in carrying out his appointment
shall be received in trust for and paid over to EDC. Every such Receiver may,
in the discretion of EDC, be vested with all or any of the rights and powers
of EDC.
(b) Upon default, EDC may, either directly or through its agents or
nominees, exercise any or all of the powers and rights given to a Receiver by
virtue of the foregoing sub-clause (a).
(c) EDC may take possession of, collect, demand, xxx on, enforce, recover
and receive the Collateral and give valid and binding receipts and discharges
therefor and in respect thereof and, upon default, EDC may sell, lease or
otherwise dispose of the Collateral in such manner, at such time or times
and place or places, for such consideration and upon such terms and
conditions as to EDC may seem reasonable.
(d) In addition to those rights granted herein and in any other agreement
now or hereafter in effect between the Debtor and EDC and in addition to any
other rights EDC may have at law or in equity, EDC shall have, both before
and after default, all rights and remedies of a secured party under the
P.P.S.A.. Provided always, that EDC shall not be liable or accountable for
any failure to exercise its remedies, take possession of, collect, enforce,
realize, sell, lease or otherwise dispose of the Collateral or to institute
any proceedings for such purposes. Furthermore, EDC shall have no obligation
to take any steps to preserve rights against prior parties to any Instruments
or Chattel Paper, whether Collateral or proceeds and whether or not in EDC's
possession and shall not be liable or accountable for failure to do so.
(e) the Debtor acknowledges that EDC or any Receiver appointed by it may
take possession of the Collateral whereever it may be located and by any
method permitted by law and the Debtor agrees upon request from EDC or any
such Receiver to assemble and deliver possession of the Collateral at such
place or places as directed.
(f) The Debtor agrees to pay all costs, charges and expenses reasonably
incurred by EDC or any Receiver appointed by it, whether directly or for
services rendered (including reasonable solicitors' and auditors' costs and
other legal expenses and Receiver renumeration), in enforcing this Security
Agreement, taking and maintaining custody of, preserving, repairing,
processing, preparing for disposition and disposing of the Collateral and in
enforcing or collecting Indebtedness and all such costs, charges and expenses
together with any amounts
8
owing as a result of any borrowing by EDC or any Receiver appointed by it, as
permitted hereby, shall be a first charge on the proceeds of realization,
collection or disposition of the Collateral and shall be secured hereby.
(g) EDC will give the Debtor such notice, if any, of the date, time and
place of any public sale or of the date after which any private disposition
of Collateral is to be made, as may be required by the PPSA.
12. MISCELLANEOUS
(a) The Debtor hereby authorizes EDC to file such financing statements,
financing change statements and other documents and do such acts, matters and
thing (including completing and adding schedules hereto identifying the
Collateral or any permitted Liens affecting the Collateral or identifying
the locations at which the Debtor's business is carried on and the Collateral
and records relating thereto are situate) as EDC may deem appropriate to
perfect on an ongoing basis and continue the Security Interest, to protect
and preserve the Collateral and to realize upon the Security Interest and,
effective upon default, the Debtor hereby irrevocably constitutes and
appoints any Loans Operations officer from time to time of EDC the true and
lawful attorney of the Debtor, with fill power of substitution, to do any of
the foregoing in the name of the Debtor whenever and wherever it may be
deemed necessary or expedient.
(b) Without limiting any other right of the EDC, whenever Indebtedness is
immediately due and payable or EDC has the right to declare Indebtedness to
be immediately due and payable (whether or not it has so declared), EDC may,
in its sole discretion, set off against Indebtedness any and all amounts then
owed to the Debtor by EDC in any capacity, whether or not due, and EDC shall
be deemed to have exercised such right of setoff immediately at the time of
making its decision to do so even through any charge therefor is made or
entered on EDC's records subsequent thereto.
(c) Upon the Debtor's failure to perform any of its duties hereunder, EDC
may, but shall not be obligated to, perform any or all of such duties, and
the Debtor shall pay to EDC, forthwith upon written demand therefor, an
amount equal to the expense incurred by EDC in so doing plus interest thereon
from the date such expense is incurred until it is paid at the rate specified
in the Loan Agreement.
(d) EDC may grant extensions of time and other indulgences, take and give
up security, accept compositions, compound, compromise, settle, grant
releases and discharges and otherwise deal with the Debtor, the debtors of the
Debtor, the principal obligant on any indebtedness guaranteed by the Debtor,
sureties and others and with the Collateral and other security as EDC may see
fit without prejudice to the liability of the Debtor or EDC's right to hold
and realize the Security Interest. Furthermore, EDC may demand, collect and
xxx on Collateral in either the Debtor's or EDC's name, at EDC's option, and
may endorse the
8
Debtor's name on any and all cheques, commercial paper, and any other
Instruments pertaining to or constituting the Collateral.
(e) No delay or omission by EDC in exercising any right or remedy
hereunder or with respect to any Indebtedness shall operate as a waiver
thereof or of any other right or remedy, and no single or partial exercise
thereof shall preclude any other or further exercise thereof or the exercise
of any other right or remedy. Furthermore, EDC may remedy any default by the
Debtor hereunder or with respect to any Indebtedness in any reasonable manner
without waiving the default remedied and without waiving any other prior or
subsequent default by the Debtor. All rights and remedies of EDC granted or
recognized herein are cumulative and may be exercised at any time and from
time to time independently or in combination.
(f) The Debtor waives protest of any Instrument constituting Collateral
at any time held by EDC on which the Debtor is in any way liable and, subject
to Clause 11(g) hereof, notice of any other action taken by EDC.
(g) This Security Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns.
(h) Save for any schedules which may be added hereto pursuant to the
provisions hereof, no modification, variation or amendment of any provision
of this Security Agreement shall be made except by a written agreement,
executed by the parties hereto and no waiver of any provision hereof shall be
effective unless in writing.
(i) Subject to the requirements of Clause 11(g), whenever either party
hereto is required or entitled to notify or direct the other or to make a
demand or request upon the other, such notice, direction, demand or request
shall be in writing and shall be sufficiently given, in the case of EDC, if
delivered to it or sent by prepaid registered mail addressed to it at its
address herein set forth or as changed pursuant hereto and, in the case of
the Debtor, if delivered to it or if sent by prepaid registered mail
addressed to it at its last address known to EDC. Either party may notify the
other pursuant hereto of any change in such party's principal address to be
used for the purposes hereof.
(j) This Security Agreement and the security afforded hereby is in
addition to and not in substitution for any other security now or hereafter
held by EDC, and is intended to be a continuing Security Agreement and shall
remain in full force and effect until all Indebtedness shall be paid in full.
(k) The headings used in this Security Agreement are for convenience only
and are not to be considered a part of this Security Agreement and do not in
any way limit or amplify the terms and provisions of this Security Agreement.
(l) When the context so requires, the singular number shall be read as if
the plural were expressed and the provisions hereof shall be read with all
grammatical changes necessary dependent upon the person referred to being a
male, female, firm or corporation.
9
(m) In the event any provision of this Security Agreement, as amended
from time to time, shall be deemed invalid or void, in whole or in part, by
any court of competent jurisdiction, the remaining terms and provisions of
this Security Agreement shall remain in full force and effect.
(n) Nothing herein contained shall in any way obligate EDC to grant,
continue, renew, extend time for payment of or accept anything which
constitutes or would constitute Indebtedness.
(o) The Security Interest created hereby is intended to attach when this
Security Agreement is signed by the Debtor and delivered to EDC.
(p) The Debtor acknowledges and agrees that in the event it amalgamates
with any other company or companies it is the intention of the parties hereto
that the term "Debtor" when used herein shall apply to each of the
amalgamating companies and to the amalgamated company, such that the Security
Interest granted hereby (i) shall extend to "Collateral" (as that term is
herein defined) owned by each of the amalgamating companies and the
amalgamated company at the time of amalgamation and to any "Collateral"
thereafter owned or acquired by the amalgamated company, and (ii) shall
secure the "Indebtedness" (as the term is herein defined) of each of the
amalgamating companies and the amalgamated company to EDC at the time of
amalgamation and any "Indebtedness" of the amalgamated company to EDC
thereafter arising. The Security Interest shall attach to "Collateral" owned
by each company amalgamating with the Debtor, and by the amalgamated company,
at the time of amalgamation, and shall attach to any "Collateral" thereafter
owned or acquired by the amalgamated company when such becomes owned or is
acquired.
(q) This security agreement and the transactions evidenced hereby shall
be governed by and construed in accordance with the laws of the province of
British Columbia as the same may from time to time be in effect, including,
where applicable, the P.P.S.A.
13. COPY OF AGREEMENT
(a) The Debtor hereby acknowledges receipt of a copy of this Security
Agreement.
(b) The Debtor hereby waives all right to receive a copy of any financing
statement or financing change statement filed or registered by EDC or any
verification statement issued by the Personal Property Registry established
under the P.P.S.A. that relates to such financing statement or financing
change statement.
10
14. The Debtor represents and warrants that the following information is
accurate:
BUSINESS DEBTOR NAME AND ADDRESS
Royal Oak Mines Inc.
Suite 2500, 000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
c/o Royal Oak Mines (U.S.A.) Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx
X.X.X.
IN WITNESS WHEREOF the Debtor has executed this Security Agreement as of this
31st day of July, 1997.
ROYAL OAK MINES INC.
)
)
)
Per _________________________ )
Authorized Signatory )
) C/S
Per: _________________________ )
Authorized Signatory )
)
)
)
ADDRESS FOR EDC:
Export Development Corporation
000 X'Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Attention: Loans Operations
Telex: 000-0000XXXXXXXXXX.XXX
Fax: (000) 000-0000
11
SCHEDULE "A"
1. Locations of the Debtor's Business Operations
2. Locations of Records relating to Collateral
3. Locations of Collateral
SECURITY AGREEMENT
1. SECURITY INTEREST
(a) For value received the undersigned (the "Debtor") hereby grants
to EXPORT DEVELOPMENT CORPORATION ("EDC"), by way of mortgage, charge,
assignment and transfer, a security interest ("Security Interest") in the
following:
(i) intangibles of the Debtor being all right, title and interest of
the Debtor in and to: (1) Purchase Order No. 1835 dated February 7,
1997; (2) Purchase Order No. 1834 dated February 7, 1997; (3) Purchase
Order No. 4139 dated June 20, 1997; (4) Purchase Order
No. 1931 dated April 21, 1997; (5) Purchase Order No. 4236 dated
May 6, 1997; and (6) Purchase Order No. 4235 dated May 6, 1997,
each as issued by the Debtor to Wajax Industries Limited (the "Seller") and
as amended by the Letter of Royal Oak Mines Inc. (the "Borrower") dated
July 28, 1997 and further detailed in the Memorandum of the Seller
entitled "EDC Financing Update" dated July 14, 1997 (collectively, as
the same may be amended from time to time with the consent of EDC if required
under the Loan Agreement (as defined below) the "Contract"), including
without limitation, all summary and working purchase order drafts, the
Buy-Back Right (as defined in the Loan Agreement (as defined below)) and any
warranties or other rights under or in respect of the Contract;
(ii) the following goods (including without limitation all parts,
accessories, attachments, replacements, additions, repairs and accessions
thereto whether or not acquired by the Debtor under the Contract) now owned or
hereafter owned or acquired by the Debtor or the Borrower under the Contract
(collectively, the "Equipment"):
Unit Description Serial Number
--------- ---------------- -------------
1. Loader XxXxxxxxxx X0000 2037
2. Truck #1 Euclid R260 401ADD75749
3. Truck #2 Euclid R260 401ADD75767
4. Truck #3 Euclid R260 401ADD75782
5. Truck #4 Euclid R260 401ADD75800
6. Truck #5 Euclid R260 401ADD75906
7. Truck #6 Euclid R260 401ADD75907
8. Truck #7 Euclid R260 401ADD75909
2
and in all proceeds thereof, accretions thereto and substitutions therefor
and in all of the following now owned or hereafter owned or acquired by or on
behalf of the Debtor, namely:
(iii) all deeds, documents, writing, papers and books relating to or
being records of the Equipment or the Contract or their proceeds or by which
the Equipment or the Contract or their proceeds are or may hereafter be
secured, evidenced, acknowledged or made payable including Documents of
Title, Chattel Paper, Securities and Instruments relating to the Equipment or
the Contract; and
(iv) all contractual rights and insurance claims relating to the
Equipment or the Contract:
all of the foregoing being hereinfafter collecitvely called
"Collateral".
(b) Unless otherwise limited herein, the terms "Goods", "Chattel
Paper", "Documents of Title", "Instruments", "Securities", "proceeds",
"accession", "Money", "financing statements" and "financing change
statements" whenever used herein shall be interpreted pursuant to their
respective meanings when used in the Personal Property Security Act of the
province of British Columbia, as amended from time to time, which Act,
including amendments thereto and any Act substituted therefor and amendments
thereto is herein referred to as the "P.P.S.A.". Provided always that the
term "Goods" when used herein shall not include "consumer goods" or
"inventory" of the Debtor as those terms are defined in the P.P.S.A. Any
reference herein to "collateral" shall, unless the context otherwise
requires, be deemed a reference to "Collateral or any part thereof".
2. INDEBTEDNESS SECURED
The Security Interest granted by the Debtor to EDC secures payment and
performance of any and all obligations, indebtedness and liability of the
Debtor to EDC (including interest thereon), present or future, direct or
indirect, absolute or contingent, matured or not, extended or renewed,
pursuant to the Limited Recourse Guarantee dated as of July 31, 1997
between the Debtor and EDC, as amended, restated, replaced, modified,
supplemented or novated from time to time (the "Guarantee") pursuant to
which the Debtor guarantees payment by the Borrower of all debts and
liabilities, present or future, owing by the Borrower to EDC pursuant to the
loan agreement dated as of July 31, 1997 between the Borrower and EDC, as
amended, restated, replaced, modified, supplemented or novated from time to
time ("Loan Agreement"), and any ultimate unpaid balance thereof and
whether the same is from time to time reduced and thereafter increased or
entirely extinguished and thereafter incurred again, and whether the Debtor
be bound alone or with another or others and whether as principal or surety
(hereinafter collectively called the "Indebtedness").
3
3. REPRESENTATIONS AND WARRANTIES OF THE DEBTOR
The Debtor represents and warrants and so long as this Security Agreement
remains in effect shall deemed to continuously represent and warrant that:
(a) the Collateral is genuine and owned by the Debtor free of all Liens
(as defined in the Loan Agreement) ranking prior to or pari passu with the
Security Interest;
(b) the Debtor is authorized to enter into this Security Agreement;
(c) each debt, Chattel Paper and Instrument constituting proceeds of the
Equipment is enforceable in accordance with its terms against the party
obligated to pay the same; and
(d) the locations specified in Schedule "A" are accurate and complete
save for Equipment in transit to such locations.
4. COVENANTS OF THE DEBTOR
So long as this Security Agreement remains in effect the Debtor covenants and
agrees:
(a) to notify EDC in accordance with the Loan Agreement of:
(i) any change in the information contained herein or in the Schedules
hereto relating to the Debtor, the Debtor's business or Collateral,
(ii) the details of any material claims or litigation affecting the
Debtor or Collateral,
(iii) any loss or material damage to Collateral,
(iv) any default by any obligor under any agreement, instrument or
other document, the obligations under which constitute proceeds of Collateral,
in payment or other performance of his obligations; and
(v) the return to repossession by the Debtor of Collateral;
(b) to do, execute, acknowledge and deliver such financing statements,
financing change statements and further assignments, transfers, documents,
acts, matters and things (including further schedules hereto) as may be
reasonably requested by EDC of or with respect to Collateral in order to give
effect to these presents and to pay all costs for searches and filings in
connection therewith;
(c) to pay all taxes, rates, levies, assessments and other charges of
every nature which may be lawfully levied, assessed or imposed against or in
respect of the Debtor or Collateral as and when the same become due and
payable;
4
(d) to prevent Collateral from being or becoming an Accession to other
property not covered by this Security Agreement;
(e) to deliver to EDC from time to time promptly upon request:
(i) any Documents of Title, Instruments, Securities and Chattel Paper
constituting, representing or relating to Collateral,
(ii) all books of account and all records, ledgers, reports,
correspondence, schedules, documents, statements, lists and other writings
relating to Collateral for the purpose of inspecting, auditing or copying the
same,
(iii) the annual financial statements prepared by or for the Debtor
regarding the Debtor's business,
(iv) all policies and certificates of insurance relating to
Collateral, and
(v) such Information concerning Collateral, the Debtor and the
Debtor's business and affairs as EDC may reasonably request;
(f) not to remove the Collateral from the Province of British Columbia to
another jurisdiction, unless it is to another jurisdiction in Canada or the
United States of America and:
(i) the Debtor gives EDC prior written notice;
(ii) the Debtor makes any registrations required in order to continue
the validity, effectiveness and perfection of the security interests of EDC
in the Collateral in the jurisdiction into which the Collateral is to be
moved, and evidence thereof is provided to EDC; and
(iii) the Debtor delivers to EDC an opinion of the Debtor's counsel,
in form satisfactory to EDC, to the effect that EDC's security interests, in
the Collateral are enforceable and have been duly registered and perfected in
the jurisdiction into which the collateral is to be removed.
5. USE AND VERIFICATION OF COLLATERAL
Subject to compliance with the Debtor's covenants contained herein and Clause
7 hereof, the Debtor may, until default, possess, operate, collect, use and
enjoy and deal with Collateral in the ordinary course of the Debtor's
business in any manner not inconsistent with the provisions hereof; provided
always that EDC shall have the right at any time and from time to time verify
the existence and state of the Collateral in any manner EDC may consider
appropriate and the Debtor agrees to furnish all assistance and information
and to perform all such acts as EDC may reasonably request in connection
therewith and for such purpose to grant to EDC or its agents access to all
places where Collateral may be located and to all premises occupied by the
Debtor.
5
6. SECURITIES
If Collateral at any time includes Securities, the Debtor authorizes EDC to
transfer the same or any part thereof into its own name or that of its
nominees(s) so that EDC or its nominee(s) may appear of record as the sole
owner thereof; provided that, until default, EDC shall deliver promptly to
the Debtor all notices or other communications received by it or its
nominee(s) as such registered owner and, upon demand and receipt of payment
of any necessary expenses thereof, shall issue to the Debtor or its order a
proxy to vote and take all action with respect to such Securities. After
dafault, the Debtor waives all rights to receive any notices or communications
received by EDC or its nominee(s) as such registered owner and agrees that
no proxy issued by EDC to the Debtor or its order as aforesaid shall
thereafter be effective.
7. COLLECTION OF DEBTS
Before or after default under this Security Agreement, EDC may notify all or
any obligors under any agreement, instrument or other document, the
obligations under which constitute proceeds of Collateral, of the Security
Interest and may also direct such obligors to make all payments on
Collateral to EDC. The Debtor acknowledges that any payments on or other
proceeds of Collateral received by the Debtor from such obligors, whether
before or after notification of this Security Interest to such obligors and
whether before of after default under this Security Agreement, shall be
received and held by the Debtor in trust for EDC and shall be turned over to
EDC upon request.
8. DISPOSITION OF MONEY
Subject to any applicable requirements of the P.P.S.A., all Money collected or
received by EDC pursuant to or in exercise of any right it possesses with
respect to Collateral shall be applied on account of Indebtedness in
accordance with the provisions of the Guarantee and the Loan Agreement.
9. EVENTS OF DEFAULT
The nonpayment when due, whether by acceleration or otherwise, of any
principal or interest forming part of the Indebtedness or the failure of the
Debtor to observe or perform any obligation, covenant, term provision or
condition contained in this Security Agreement or the Guarantee or any other
agreement between the Debtor and EDC relating to the Collateral, shall
constitute default hereunder which is herein referred to as "default".
10. ACCELERATION
EDC, in its sole discretion, may declare all or any part of the Indebtedness
which is not by its terms payable on demand to be immediately due and payble,
without demand or notice of any kind, in the event of default. The provisions
of this clause are not intended in any way to affect any rights of EDC with
respect to any Indebtedness which may now or hereafter be payable on demand.
6
11. REMEDIES
(a) Upon default, EDC may appoint or reappoint by instrument in writing,
any person or persons, whether an officer or officers or an employee or
employees of EDC or not, to be a receiver or receivers (hereinafter called a
"Receiver" which term when used, herein shall include a receiver and
manager) of the Collateral and may remove any Receiver so appointed and
appoint another in his stead. Any such Receiver shall, so far as concerns
responsibility for his acts, be deemed the agent of the Debtor and not EDC,
and EDC shall not be in any way responsible for any misconduct, negligence,
or non-feasance on the part of any such Receiver, his servants, agents or
employees. Subject to the provisions of the instrument appointing him, any such
Receiver shall have power to take possession of the Collateral, to preserve
the Collateral or its value, and to sell, lease or otherwise dispose of or
concur in selling, leasing or otherwise disposing of the Collateral. To
facilitate the foregoing powers, any such Receiver may enter upon all
premises owned or occupied by the Debtor wherein the Collateral may be
situate, maintain the Collateral upon such premises, and borrow money on a
secured or unsecured basis as such Reciever shall, in his discretion,
determine. Except as may be otherwise directed by EDC, all Money received from
time to time by such Receiver in carrying out his appointment shall be
received in trust for and paid over to EDC. Every such Receiver may, in the
discretion of EDC, be vested with all or any of the rights and powers of EDC.
(b) Upon default, EDC may, either directly or through its agents or
nominees, exercise any or all of the powers and rights given to a Receiver by
virtue of the foregoing sub-clause (a).
(c) EDC may take possession of, collect, demand, xxx on, enforce, recover
and receive the Collateral and give valid and binding receipts and discharges
therefor and in respect thereof and, upon default, EDC may sell, lease or
otherwise dispose of the Collateral in such manner, at such time or times and
place or places, for such consideration and upon such terms and conditions
as to EDC may seem reasonable.
(d) In addition to those rights granted herein and in any other agreement
now or hereafter in effect between the Debtor and EDC and in addition to any
other rights EDC may have at law or in equity, EDC shall have, both before
and after default, all rights and remedies of a secured party under the
P.P.S.A. Provided always, that EDC shall not be liable or acocuntable for any
failure to exercise its remedies, take possession of, collect, enforce,
realize, sell, lease or otherwise dispose of the Collateral or to institute any
proceedings for such purposes. Furthermore, EDC shall have no obligation to
take any steps to preserve rights against prior parties to any Instrument or
Chattel Paper, whether Collateral or proceeds and whether or not in EDC's
possesion and shall not be liable or accountable for failure to do do.
7
(e) The Debtor acknowledges that EDC or any Receiver appointed by it may
take possession of the Collateral wherever it may be located and by any
method permitted by law and the Debtor agrees upon request from EDC or any
such Receiver to assemble and deliver possession of the Collateral at such
place or places as directed.
(f) The Debtor agrees to pay all costs, charges and expenses reasonably
incured by EDC or any Receiver appointed by it, whether directly or for
services rendered (including reasonable solicitors' and auditors' costs and
other legal expenses and Receiver remuneration), in enforcing this Security
Agreement, taking and maintaining custody of, preserving, repairing,
processing, preparing for disposition and disposing of the Collateral and in
enforcing or collecting Indebtedness and all such costs, charges and expenses
together with any amounts owing as a result of any borrowing by EDC or any
Receiver appointed by it, as permitted hereby, shall be a first charge on the
proceeds of realization, collection or disposition of the Collateral and
shall be secured hereby.
(g) EDC will give the Debtor such notice, if any, of the date, time and
place of any public sale or of the date after which any private disposition
of Collateral is to be made, as may be required by the P.P.S.A.
12. MISCELLANEOUS
(a) The Debtor hereby authorizes EDC to file such financing statements,
financing change statements and other documents and do such acts, matters and
things (including completing and adding schedules hereto identifying the
Collateral or any permitted Liens affecting the Collateral or identifying the
locations at which the Debtor's business is carred on and the Collateral and
records relating thereto are situate) as EDC may deem appropriate to perfect
on an ongoing basis and continue the Security Interest, to protect and
preserve the Collateral and to realize upon the Security Interest and,
effective upon default, the Debtor hereby irrevocably constitutes and
appoints any Loans Operations officer from time to time of EDC the true and
lawful attorney of the Debtor, with full power of substitution, to do any of
the foregoing in the name of the Debtor whenever and wherever it may be
deemed necessary or expedient.
(b) Without limiting any other right of EDC, whenever Indebtedness is
immediately due and payable or EDC has the right to declare Indebtedness to
be immediately due and payable (whether or not it has so declared), EDC may,
in its sole discretion, set off against Indebtedness any and all amounts then
owed to the Debtor by EDC in any capacity, whether or not due, and EDC shall
be deemed to have exercised such right of setoff immediately at the time of
making its decision to do so even though any charge therefor is made or
entered on EDC's records subequent thereto.
8
(c) Upon the Debtor's failure to perform any of its duties hereunder, EDC
may, but shall not be obligated to, perform any or all of such duties, and
the Debtor shall pay to EDC, forthwith upon written demand therefor, an
amount equal to the expense incurred by EDC in so doing plus interest thereon
from the date such expense is incurred until it is paid at the rate specified
in the Guarantee.
(d) EDC may grant extensions of time and other indulgences, take and give
up security, accept compositions, compound, compromise, settle, grant
releases and discharges and otherwise deal with the Debtor, the debtors of the
Debtor, the principal obligant on any indebtedness guaranteed by the Debtor,
sureties and others and with the Collateral and other security as EDC may see
fit without prejudice to the liability of the Debtor or EDC's right to hold and
realize the Security Interest. Furthermore, EDC may demand, collect and xxx on
Collateral in either the Debtor's or EDC's name, at EDC's option, and may
endorse the Debtor's name on any and all cheques, commercial paper, and any
other Instruments pertaining to or constituting the Collateral.
(e) No delay or omission by EDC in exercising any right or remedy
hereunder or with respect to any Indebtedness shall operate as a waiver
thereof or of any other right or remedy, and no single or partial exercise
thereof shall preclude any other or further exercise thereof or the exercise
of any other right or remedy. Furthernmore, EDC may remedy any default by
the Debtor hereunder or with respect to any Indebtedness in any reasonable
manner without waiving the default remedied and without waiving any other
prior or subsequent default by the Debtor. All rights and remedies of EDC
granted or recognized herein are cumulative and may be exercised at any time
and from time to time independently or in combination.
(f) The Debtor waives protest of any Instrument constituting Collateral at
any time held by EDC on which the Debtor is in any way liable and, subject to
Clause 11(g) hereof, notice of any other action taken by EDC.
(g) This Security Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns.
(h) Save for any schedules which may be added hereto pursuant to the
provisions hereof, no modification, variation or amendment of any provision
of this Security Agreement shall be made except by a written agreement,
executed by the parties hereto and no waiver of any provision hereof shall be
effective unless in writing.
(i) Subject to the requirements of Clause 11(g), whenever either party
hereto is required or entitled to notify or direct the other or to make a
demand or request upon the other, such notice, direction, demand or request
shall be in writing and shall be sufficiently given, in the case of EDC, if
delivered to it or sent by prepaid registered mail addressed to it at its
address herein set forth or as chnaged pursuant hereto and, in the case of
the Debtor, if delivered to it or if sent by prepaid registered mail addressed
to it at is last address known to EDC. Either
9
party may notify the other pursuant hereto of any change in such party's
principal address to be used for the purposes hereof.
(j) This Security Agreement and the security afforded hereby is in
addition to and not in substitution for any other security now or hereafter
held by EDC, and is intended to be a continuing Security Agreement and shall
remain in full force and effect until all Indebtedness shall be paid in full.
(k) The headings used in this Security Agreement are for convenience only
and are not to be considered a part of this Security Agreement and do not in
any way limit or amplify the terms and provisions of this Security Agreement.
(l) When the context so requires, the singluar number shall be read as if
the plural were expressed and the provisions hereof shall be read with all
grammatical changes necessary dependent upon the person referred to being a
male, female, firm or corporation.
(m) In the event any provision of this Security Agreement, as amended from
time to time, shall be deemed invalid or void, in whole or in part, by any
court of competent jurisdiction, the remaining terms and provisions of this
Security Agreement shall remain in full force and effect.
(n) Nothing herein contained shall in any way obligate EDC to grant,
continue, renew, extend time for payment of or accept anything which
constitutes or would constitute Indebtedness.
(o) The Security Interest created hereby is intended to attach when this
Security Agreement is signed by the Debtor and delivered to EDC.
(p) The Debtor acknowledges and agrees that in the event it amalgamates
with any other company or companies it is the intention of the parties hereto
that the term "Debtor" when used herein shall apply to each of the
amalgamating companies and to the amalgamated company, such that the Security
Interest granted hereby (i) shall extend to "Collateral" (as that term is
herein defined) owned by each of the amalgamating companies and the amalgamated
company at the time of amalgamation and to any "Collateral" thereafter owed
or acquired by the amalgamated company, and (ii) shall secure the
"Indebtedness" (as that term is herein defined) of each of the amalgamating
companies and the amalgamated company to EDC at the time of amalgamation and
any "Indebtedness" of the amalgamated company to EDC thereafter arising. The
Security Interest shall attach to "Collateral" owned by each company
amalagamating with the Debtor, and by the amalgamated company, at the time of
amalgamation, and shall attach to any "Collateral" thereafter owned or
acquired by the amalgamated company when such becomes owned or is acquired.
10
(q) This security agreement and the transactions evidenced hereby shall
be governed by and construed in accordance with the laws of the province of
British Columbia as the same may from time to time be in effect, including,
where applicable, the P.P.S.A.
13. COPY OF AGREEMENT
(a) The Debtor hereby acknoweldges receipt of a copy of this Security
Agreement.
(b) The Debtor hereby waives all right to receive a copy of any financing
statement or fianncing change statement filed or registered by EDC or any
verification statement issued by the Personal Property Registry established
under the P.P.S.A. that relates to such financing statement or financing
change statement.
14. The Debtor represents and warrants that the following information is
accurate:
BUSINESS DEBTOR NAME AND ADDRESS
Kemess Mines Inc.
x/x Xxxxx Xxx Xxxxx Xxx.
Xxxxx 0000, 000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
c/o Royal Oak Mines (U.S.A.) Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx
X.X.X.
11
DULL HOUSSER XXXXXX
IN WITNESS WHEREOF the Debtor has executed this Security Agreement as of this
31st day of July, 1997.
KEMESS MINES INC. )
)
)
Per: )
-------------------------- )
Authorized Signatory ) C/S
)
)
Per: )
-------------------------- )
Authorized Signatory )
)
ADDRESS FOR FDC:
Export Development Corporation
000 X'Xxxxxx Xxxxxx
Xxxxxx Xxxxxxx
X0X 0X0
Attention: Loans Operations
Telex: 000-0000XXXXXXXXXX.XXX
Fax: (000) 000-0000
--insert starting with MS97
SCHEDULE "A"
1. Locations of the Debtor's Business Operations
2. Locations of Records relating to Collateral
3. Locations of Collateral
LIMITED RECOURSE GUARANTEE
TO: EXPORT DEVELOPMENT CORPORATION
FOR VALUABLE CONSIDERATION, receipt whereof is hereby acknowledged, the
undersigned hereby guarantees payment on demand to EXPORT DEVELOPMENT
CORPORATION ("EDC") of all debts and liabilities, present or future, direct or
indirect, absolute or contingent, matured or not, at any time owing by ROYAL OAK
MINES INC. ("ROM") to EDC or remaining unpaid by ROM to EDC, pursuant to the
Loan Agreement dated as of July 31, 1997 between ROM and EDC, as amended,
restated, replaced, modified, supplemented or novated from time to time ("Loan
Agreement") and whether ROM be bound alone or with another or others and whether
as principal or surety (such debts and liabilities being hereinafter called the
"liabilities"), together with interest thereon from the date of demand for
payment at the rate per annum equal to the sum of (i) the six (6) month
"CAD-BA-CDOR" (as defined in the Loan Agreement) and (ii) 2% per annum.
AND THE UNDERSIGNED HEREBY AGREES WITH EDC AS FOLLOWS:
(1) Deal Freely With ROM
EDC may grant time, renewals, extensions, indulgences, releases and
discharges to, take securities (which word as used herein includes securities
taken by EDC from ROM and others, other assets of ROM held by EDC in safekeeping
or otherwise, and other guarantees) from and give the same and any or all
existing securities up to, abstain from taking securities from or from
perfecting securities of, cease or refrain from giving credit or making loans or
advances to, accept compositions from and otherwise deal with, ROM and others
and with all securities as EDC may see fit, and may apply all moneys at any time
received from ROM, or others or from securities upon such part of the
liabilities as required under the Loan Agreement, the whole without in any way
limiting or lessening the liability of the undersigned under this guarantee, and
no loss of or in respect of any securities received by EDC from ROM or others,
whether occasioned by the fault of EDC or otherwise, shall in any way limit or
lessen the liability of the undersigned under this guarantee.
(2) Continuing Guarantee
This guarantee shall be a continuing guarantee and shall cover all the
liabilities, and it shall apply to and secure any ultimate balance due or
remaining unpaid to EDC.
(3) Immediate Payment
EDC shall not be bound to exhaust its recourse against ROM or others or any
securities it may at any time hold before being entitled to payment from the
undersigned of the liabilities. The undersigned renounces all benefits of
discussion and division.
(4) Determining Liability
The undersigned may, by notice in writing delivered to EDC, determine its
liability under this guarantee in respect of liabilities thereafter incurred or
arising but not in respect of any liabilities theretofore incurred or arising
even though not then matured, provided, however, that notwithstanding receipt of
any such notice EDC may fulfil any requirements of ROM based on
2
agreements express or implied made prior to the receipt of such notice and
any resulting liabilities shall be covered by this guarantee.
(5) Changes in ROM Constitution
This guarantee and agreement shall not be affected by any change in the
name of ROM, or by the acquisition of ROM's business by a corporation, or by any
change whatsoever in the objects, capital structure or constitution of ROM, or
by ROM's business being amalgamated with a corporation, but shall
notwithstanding the happening of any such event continue to apply to all the
liabilities whether theretofore or thereafter incurred or arising and in this
instrument the word "ROM" shall include every such corporation.
(6) No Satisfaction or Subrogation
This guarantee shall not be considered as wholly or partially satisfied by
the payment or liquidation at any time or times of any sum or sums of money for
the time being due or remaining unpaid to EDC, and all dividends, compositions,
proceeds of security valued and payments received by EDC from ROM or from others
or from estates shall be regarded for all purposes as payments in gross without
any right on the part of the undersigned to claim in reduction of the liability
under this guarantee the benefit of any such dividends, compositions, proceeds
or payments or any securities held by EDC or proceeds thereof, and the
undersigned shall have no right to be subrogated in any rights of EDC until EDC
shall have received payment in full of the liabilities.
(7) The "Liabilities"
All moneys, advances, renewals, credits and credit facilities in fact
borrowed or obtained from EDC shall be deemed to form part of the liabilities,
notwithstanding any lack or limitation of status or of power, incapacity or
disability of ROM or of the directors, partners or agents of ROM, or that ROM
may not be a legal or suable entity, or any irregularity, defect or informality
in the borrowing or obtaining of such monies, advances, renewals, credits or
credit facilities, or any other reason, similar or not, the whole whether known
to EDC or not. Any sum which may not be recoverable from the undersigned on the
footing of a guarantee, whether for the reasons set out in the previous
sentence, or for any other reason, similar or not, shall be recoverable from the
undersigned as sole or principal debtor in respect of that sum and shall be paid
to EDC on demand with interest and accessories.
(8) Not Substitution
This guarantee is in addition to and not in substitution for any other
guarantee, by whomsoever given, at any time held by EDC, and any present or
future obligation to EDC incurred or arising otherwise than under a guarantee,
of the undersigned or of any other obligant, whether bound with or apart from
ROM.
3
(9) Bound by Accounts
The undersigned shall be bound by any account settled between EDC and ROM,
and if no such account has been so settled immediately before demand for payment
under this guarantee any account stated by EDC shall be accepted by the
undersigned as conclusive evidence of the amount which at the date of the
account so stated is due by ROM to EDC or remains unpaid by ROM to EDC, absent
manifest error.
(10) Binding and Unconditional
This guarantee shall be operative and binding upon every signatory hereof
notwithstanding the non-execution thereof by any other proposed signatory or
signatories, and possession of this instrument by EDC shall be conclusive
evidence against the undersigned that this instrument was not delivered in
escrow or pursuant to any agreement that it should not be effective until any
conditions precedent or subsequent had been complied with.
(11) Demand Before Suit
No suit based on this guarantee shall be institued until demand for payment
has been made, and demand for payment shall be deemed to have been effectually
made upon any guarantor if and when an envelope containing such demand,
addressed to such guarantor at the address of such guarantor last known to EDC,
is posted, postage prepaid, in the post office. Moreover, when demand for
payment has been made, the undersigned shall also be liable to EDC for all legal
costs (on a solicitor and own client basis) incurred by or on behalf of EDC
resulting from any action instituted on the basis of this guarantee. All
payments hereunder shall be made to EDC at the address set out herein.
(12) Whole Agreement
This instrument covers all agreements between the parties hereto relative
to this guarantee and none of the parties shall be bound by any representation
or promise made by any person relative thereto which is not embodied herein.
(13) Enurement
This guarantee shall extend to and enure to the benefit of EDC and its
successors and assigns, and every reference herein to the undersigned is a
reference to and shall be construed as including the undersigned and the
successors and assigns of the undersigned, to and upon whom this guarantee shall
extend and be binding.
(14) Governing Law
This guarantee shall be governed by and construed in accordance with the
laws of the Province of British Columbia ("Jurisdiction"). The undersigned
irrevocably submits to the courts of the Jurisdiction in any action or
proceeding arising out of or relating to this guarantee, and irrevocably agrees
that all such actions and proceedings may be heard and determined in such
courts, and irrevocably waives, to the fullest extent possible, the defence of
an inconvenient forum. The undersigned agrees that a judgment or order in any
such action or proceeding may be enforced in other jurisdictions in any manner
provided by law. Provided, however, that EDC may serve legal process in any
manner permitted by law or may bring an action or proceeding against the
undersigned or the property or assets of the undersigned in the courts of any
other jurisdiction.
4
(15) Receipt Acknowledged
The undersigned hereby acknowledges receipt of a copy of this agreement.
(16) Limited Recourse
The rights of EDC to pursue full payment by the undersigned will be limited
to accordance with the letter agreement from EDC to the undersigned dated as of
July 31, 1997, concerning limitation of recourse.
GIVEN UNDER SEAL AT ____________, as of this 31st day of July, 1997
THE CORPORATE SEAL of )
KEMESS MINES INC. was hereunto )
affixed in the presence of: )
)
--------------------------- )
Authorized Signatory )
)
) C/S
)
--------------------------- )
Authorized Signatory )
(on EDC letterhead)
as of July 31, 1997
Kemess Mines Inc.
Xxxxx 0000
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X0X0
Dear Sirs:
Re: Limitation of Recourse
Kemess Mines Inc. ("Kemess") has executed and delivered to Export Development
Corporation ("EDC") a limited recourse guarantee and a security agreement, both
dated as of July 31, 1997 (collectively, the "Documents").
This letter confirms that notwithstanding anything expressed or implied in the
Documents:
1. the right of EDC to recover from Kemess or its successors or assigns
(collectively, the "Debtor") any amounts, indebtedness or damages owing under or
in connection with the Documents, at law or in equity or by statute or contract
in connection with the Documents, or to any other remedy thereunder will be
limited and restricted to rights of EDC to realize upon the "Collateral" (as
defined in the Documents), including the obtaining of any judgment in respect
thereof that is necessary to effect such realization;
2. the Debtor will not have any personal liability for the payment of any such
amounts, indebtedness or damages or any judgment therefor; and
3. EDC will have no recourse against the Debtor for the deficiency, if any,
which may exist after EDC has realized on the Collateral,
PROVIDED THAT the Debtor will be liable to EDC for, and will pay to EDC the
amount of, any losses, liabilities, claims, damages and expenses caused by the
fraud (a) committed by the Debtor, or (b) committed by or participated in by one
or more persons as officers or directors of the Debtor.
Yours truly,
EXPORT DEVELOPMENT CORPORATION
------------------------------
Authorized Signatory
------------------------------
Authorized Signatory
2
I am of the opinion that:
1. the borrower is a BLANK duly incorporated, organized and validly existing
under the laws of Canada and any other jurisdiction where it carries on business
and has its registered head office at BLANK;
2. the Borrower has power and authority to own its property and assets and to
carry on business as it is being carried on at the date of the Loan Agreement;
3. the entering into, delivery of and performance of the terms by the Borrower
of the Loan Agreement, the Contract and the Security Agreement and of each
document to be delivered by the Borrower with respect thereto:
(i) are within its corporate powers and have been duly authorized by all
necessary corporate action;
(ii) are not in violation of any law, statue, regulation, ordinance or
decree of [Country] and are not contrary to public policy or public order in
[Country]; and
[(iii) except for the security interest created under the Loan Agreement,
will not result in or require the creation or imposition of a Lien upon the
Collateral whether created or imposed at law or pursuant to the terms of any
instrument to which the Borrower is subject or by which it or any of its
properties or assets are bound;]
4. the Loan Agreement, the Contract and the Security Agreement constitutes
direct, legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms;
5. all registrations, consents, licenses and approvals of any administrative
or governmental agency or other body required pursuant to the laws of [Country]
or any political subdivision thereof in connection with the execution and
delivery by the Borrower of the Loan Agreement, [the Contract and the Security
Agreement] and each document to be delivered by the Borrower with respect
thereto, the performance by the Borrower of the terms thereof, for the making of
the payment in United States Dollars of amounts due under the Loan Agreement
(including all amounts of principal, interest and any additional amounts payable
in respect thereof and all administration, commitment and other fees and all
costs and expenses due under the Loan Agreement) to EDC at the place and at the
times specified therein when and as the same will become due and payable whether
as maturity by acceleration or otherwise, and the validity and enforceability
and admissibility in evidence thereof, have been effected or obtained and are in
full force and effect, including BLANK except BLANK;
6. it is not necessary in order to ensure the legality, validity, binding
nature, enforceability or admissibility in evidence of the Loan Agreement, the
Contract or the Security Agreement in Canada that any document be filed,
recorded or enrolled with any court or authority in
3
Canada or that any stamp, registration or other like taxes by paid on or in
relation to the Loan Agreement, the Contract or the Security Agreement except
BLANK;
7. the obligations of the Borrower under the Loan Agreement rank and will rank
at least equally with all other unsecured and unsubordinated Indebtedness of the
Borrower;
8. the properties, assets and revenues of the Borrower are not subject to any
Liens including the Collateral of any kind save and except BLANK;
9. the audited financial statements of the Borrower dated as of BLANK, copies
of which have been delivered to EDC, are true and correct and accurately present
the financial condition of the Borrower and the results of its operations for
the period covered; such financial statements have been prepared in accordance
with GAAP applied on a consistent basis;
10. there are no legal proceedings pending or, so far as is known to me,
threatened before any court, arbitral tribunal, administrative agency or
governmental or other body having authority over it which could or would
materially adversely affect the financial condition or the operations of the
Borrower or its ability to perform its obligations under the Loan Agreement, the
Security Agreement or under the Contract;
11. the Borrower is not in violation of any term of its incorporating
instrument and by-laws or of any agreement, instrument evidencing indebtedness,
mortgage; franchise, license, judgment, decree, order, statute, rule, law,
ordinance or regulation to which it or its business or assets are subject; the
entering into and performance of and compliance with the Loan Agreement, the
Contract and the Security Agreement and each document to be delivered thereunder
will not result in any such violation or constitute a default under or be in
conflict with any such term or result in the creation of any Lien upon any of
the assets of the Borrower pursuant to any such term including without
limitation the Collateral; and there is no such term which materially adversely
affects or in the future may (so far as I can now foresee) materially adversely
affect the financial condition or the business or assets of the Borrower or its
ability to perform its obligations under the Loan Agreement, the Contract or the
Security Agreement;
12. all payments to be made by the Borrower under the Loan Agreement are exempt
from any present Taxes of or in Canada and the Borrower is not required by law
to make any deduction or withholding therefrom;
13. the security interest granted to EDC pursuant to the Security Agreement has
been [perfected/registered].
Yours truly,
Schedule "D" to the Loan Agreement No. 880-CAN-7559 made between ROYAL OAK MINES
INC. and EXPORT DEVELOPMENT CORPORATION.
LEGAL PROCEEDINGS - S.2.01(g)
SCHEDULE "D"
LEGAL PROCEEDINGS
A. Xxxxxx Fullowka et al v. Royal Oak Mines Inc., et al, Supreme court of
NWT, (commenced September, 1994) - pleadings largely complete; productions
on-going.
On September 18, 1992, nine miners were murdered in an underground explosion
at the Company's Giant Mine. A member of the union which was on strike at
the time was charged and convicted of nine counts of second degree murder.
In September, 1994, dependents of the deceased miners sued the Company and
two of its officers and directors, along with 23 other named defendants, for
losses allegedly suffered as a result of the explosion. The claim against
the Company totals approximately $10.8 million plus taxes, interest and
costs. The claim against the two officers and directors, excluding the
Company, totals approximately $33.65 million plus taxes, interest and costs.
The claim is being vigorously defended. Counsel for the Company's insurer has
stated that, based on allegations in the amended Statement of Claim, any
possible liability exposure would be within the Company's liability insurance
coverage.
B. The Xxxx Xxx Xxxx Band, et al v. Kemess Mines Inc., et al, Supreme Court
of B.C., (commenced February, 1997) - interim and interlocutory petitions for
injunction by the Dene and Takla Lake Bands denied; judicial review hearing
scheduled for last week of September, 1997.
The Dene and Takla Bands sued three B.C. government ministries, the District
Manager of Forests for MacKenzie, Kemess Mines Inc. and two of its logging
contractors in a bid to stop development of the power line being built to the
Kemess site. The Petition was only filed after the Company advised that it
would not sign the lucrative Benefits and Impact Agreement sought by the
Dene. Injunction proceedings by the Bands have been unsuccessful to date.
In September, 1997 the Court will hear argument on the issues of whether
there was adequate consultation with the Bands during the government's
lengthy environmental assessment process for approval of the Kemess Project;
and whether the government, in granting the Approval Certificate, was biased
by its execution of the Heads of Agreement with Royal Oak Mines Inc. in
August, 1995. The Company's defence is that of an innocent party unfairly
caught in the middle. The court's denial of injunctive relief would seem to
lend credence to the Company's position.
Schedule "E" to the Loan Agreement No. 880-CAN-7559 made between ROYAL OAK
MINES INC. and EXPORT DEVELOPMENT CORPORATION.
PPSA SEARCH RESULTS - S.2.01(f)
SCHEDULE "E"
PPSA SEARCH RESULTS
BRITISH COLUMBIA
(a) Kemess Mines Inc. (currency date July 15, 1997)
-----------------------------------------------------------------------------------------------------------------------
Base
Registration
No. Date Secured Party Collateral Description
-----------------------------------------------------------------------------------------------------------------------
6405325 May 29, 0000 Xxx Xxxx xx Xxxx Xxxxxx Motor Vehicle
-----------------------------------------------------------------------------------------------------------------------
6405331 May 29, 0000 Xxx Xxxx xx Xxxx Xxxxxx Motor Vehicle
-----------------------------------------------------------------------------------------------------------------------
6454671 June 25, 1996 Coast Mountain Chev Olds 2 Motor Vehicles
Ltd.
-----------------------------------------------------------------------------------------------------------------------
6465835 June 27, 1996 Xxxxx Chevrolet Oldsmobile Motor Vehicle
Cadillac Ltd
-----------------------------------------------------------------------------------------------------------------------
6518446 July 30, 1996 Finning Ltd. Caterpillar Tractor,
Bulldozer, and Ripper-Single
Shank vehicles, and
proceeds therefrom
-----------------------------------------------------------------------------------------------------------------------
6534057 August 6, 1996 Xxxxx Chevrolet Oldsmobile Motor Vehicle
Cadillac Ltd
-----------------------------------------------------------------------------------------------------------------------
6542476 August 13, 1996 Finning Ltd. Caterpillar Loader, Finning
4.0 Cu. Yd. Gp Penetration
Bucket, IMAC Classic Pallet
Pork, Dozer (snow) blade,
and all proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
6542499 August 13, 1996 Finning Ltd. Caterpillar Loader, Finning
7.0 Cu. Yd. Rocket Bucket,
and all proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
6542510 August 13, 1996 Finning Ltd. Caterpillar 16H Grader, and
proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
6575699 September 3, 1996 Xerox Canada Inc. All present and future goods
(including without limitation
office equipment) financed
by Xerox.
-----------------------------------------------------------------------------------------------------------------------
6585032 September 9, 1996 Finning Ltd. Caterpillar 375L, and all
proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
6694731 November 12, 1996 Wood Wheaton Chevrolet Geo Motor Vehicle
Oldsmobile Cadillac Ltd.
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Base
Registration
No. Date Secured Party Collateral Description
-----------------------------------------------------------------------------------------------------------------------
6724789 November 27, 1996 Finning Ltd. Caterpillar D10N Tractor,
100 Bulldozer, and #10
Ripper Single Shank
vehicles, and all proceeds
therefrom.
-----------------------------------------------------------------------------------------------------------------------
6724884 November 27, 1996 Finning Ltd. Caterpillar Vehicle, Finning,
7.0 Cu Yd. Rock Bucket,
and all proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
6724977 November 27, 1996 Finning Ltd. Caterpillar Vehicle, Finning,
4.0 Cu Yd. Gp Penetration
Bucket, IMAC Classic Pallet
Fork, Dozer (snow) Blade,
and all proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
6725006 November 27, 1996 Finning Ltd. Caterpillar Vehicle, and all
proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
6740900 December 5, 1996 Coast Mountain Chev Olds Ltd Motor Vehicle
-----------------------------------------------------------------------------------------------------------------------
6740910 December 5, 1996 Coast Mountain Chev Olds Ltd Motor Vehicle
-----------------------------------------------------------------------------------------------------------------------
6740924 December 5, 1996 Coast Mountain Chev Olds Ltd Motor Vehicle
-----------------------------------------------------------------------------------------------------------------------
6740942 December 5, 1996 Coast Mountain Chev Olds Ltd Motor Vehicle
-----------------------------------------------------------------------------------------------------------------------
6740968 December 6, 1996 Coast Mountain Chev Olds Ltd Motor Vehicle
-----------------------------------------------------------------------------------------------------------------------
6766918 December 20, 1996 Finning Ltd. Caterpillar Vehicle, and all
proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
6775713 December 30, 1996 Coast Mountain Chev Olds Ltd Motor Vehicle
-----------------------------------------------------------------------------------------------------------------------
6861988 February 17, 1997 Finning Ltd. Caterpillar Vehicle, and all
proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
7033085 May 21, 1997 Finning Ltd. Caterpillar Vehicle, and all
proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
7051166 May 29, 1997 Finning Ltd. Caterpillar Vehicle, and all
proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
2
-----------------------------------------------------------------------------------------------------------------------
Base
Registration
No. Date Secured Party Collateral Description
-----------------------------------------------------------------------------------------------------------------------
7054630 May 30, 1997 GE Capital Vehicle and 10 X 54 Modular Unit
Equipment Leasing Inc.
-----------------------------------------------------------------------------------------------------------------------
7086908 June 17, 1997 Finning Ltd. Caterpillar Vehicle, and all
proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
7086926 June 17, 1997 Finning Ltd. Caterpillar Vehicle, and all
proceeds therefrom
-----------------------------------------------------------------------------------------------------------------------
(b) Royal Oak Mines Inc. (currency date July 15, 1997)
-----------------------------------------------------------------------------------------------------------------------
Base
Registration
No. Date Secured Party Collateral Description
-----------------------------------------------------------------------------------------------------------------------
4319819 November 19, 1992 PHH Canada Inc Motor Vehicles, Automotive
Equipment and Materials-
Handling Equipment leased
by the Debtor from the
secured party with all
attachments.
Proceeds: All of the Debtor's
present and after-acquired
personal property.
-----------------------------------------------------------------------------------------------------------------------
4937941 November 24, 1993 Royal Bank of Canada Tamrock Drill and
reconditioned Drifter.
-----------------------------------------------------------------------------------------------------------------------
50223118 January 19, 1994 Royal Bank of Canada 5 Motor Vehicles.
-----------------------------------------------------------------------------------------------------------------------
5095075 March 4, 1994 Imperial Oil All Petroleum Products,
Fuels and Lubricants now or
hereafter supplied by the
secured party, and the
proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
5336630 July 27, 1994 BT Bank of Canada All of the Debtor's present
and after-acquired personal
property and assets including
without limitation:
-----------------------------------------------------------------------------------------------------------------------
3
-----------------------------------------------------------------------------------------------------------------------
Base
Registration
No. Date Secured Party Collateral Description
-----------------------------------------------------------------------------------------------------------------------
All of the common shares of
the debtor in the capital of
LAC Minerals Ltd., and
proceeds therefrom.
All funds and amounts
deposited by or on behalf of
the debtor with the R-M
Trust Company for the
purpose of purchasing the
securities in connection with
the offer made by the debtor
dated July 11, 1994 to
acquire not less than 66-
2/3% of the issued and
outstanding common shares
of LAC Minerals Ltd., and
all proceeds therefrom.
*
-----------------------------------------------------------------------------------------------------------------------
" August 3, 1994 Bankers Trust Company Registration 5355355 is an
amendment to change the
name of the secured party.
-----------------------------------------------------------------------------------------------------------------------
5367126 August 17, 1994 Associates Commercial 2 Toro Scoop Trams, and all
Corporation of Canada Ltd. attachments and proceeds
therefrom.
-----------------------------------------------------------------------------------------------------------------------
" July 10, 1996 Associates Leasing (Canada) Registration 6493954 is an
Lt. amendment to change the
name of the secured party.
-----------------------------------------------------------------------------------------------------------------------
" July 10, 1996 Associates Commercial Registration 6494120 is an
Corporation of Canada Ltd. addition of collateral
description to include one
Toror LHD Scoop Tram.
-----------------------------------------------------------------------------------------------------------------------
5975111 September 11, 1995 1091064 Ontario Limited All ore extracted from the
mineral claims comprised in
the property as defined in the
security agreement made by
debtor in favour of secured
party as of August 17, 1995,
and all proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
6163099 January 8, 1996 Chrysler Credit Canada Ltd. Motor Vehicle
-----------------------------------------------------------------------------------------------------------------------
6394990 May 17, 1996 GMAC LeaseCo Limited Motor Vehicle
-----------------------------------------------------------------------------------------------------------------------
4
Base
Registration
No. Date Secured Party Collateral Description
-----------------------------------------------------------------------------------------------------------------------
6504600 July 23, 1996 Telecom Leasing Canada Telecommunications
(TLC) Limited Equipment
-----------------------------------------------------------------------------------------------------------------------
7061560 June 4, 1997 Caterpillar Financial Services 2 Caterpillar Vehicles, and all
Limited proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
" June 23, 1997 Caterpillar Financial Services Registration 7109685 is an
Limited amendment to add another
Caterpillar Vehicle.
-----------------------------------------------------------------------------------------------------------------------
" June 30, 1997 Caterpillar Financial Services Registration 7124060 is an
Limited amendment to add another
Vehicle
-----------------------------------------------------------------------------------------------------------------------
7108498 June 30, 1997 Caterpillar Financial Services Caterpillar Vehicle, and all
proceeds therefrom.
-----------------------------------------------------------------------------------------------------------------------
ONTARIO
(a) Kemess Mines Inc. - CLEAR
(b) Royal Oak Mines Inc. (currency date July 27, 1997)
The following abbreviations are used to identify collateral
classifications under the Personal Property Security Act (Ontario)
A - Accounts (formerly known I - Inventory
as "Book Debts") MV - includes Motor Vehicle
CG - Consumer Goods O - Other
E - Equipment
-----------------------------------------------------------------------------------------------------------------------
Reference
File No. Date Secured Party Collateral Description
-----------------------------------------------------------------------------------------------------------------------
073314792 April 17, 1997 Xxxxxxx Group, Inc. E, MV
97 GMC K1500 X-Cab
Short Box
-----------------------------------------------------------------------------------------------------------------------
073314657 March 20 1997 Xxxxxxx Group, Inc. E, MV
96 GMC S-15 Xxxxx 4x4
-----------------------------------------------------------------------------------------------------------------------
073314666 March 20, 1997 Xxxxxxx Group, Inc. E, MV
96 GMC 3/4 T 4x4
-----------------------------------------------------------------------------------------------------------------------
826960185 December 9, 0000 Xxxxxx Xxxxxxxxxxxx X,X
International Inc. O/A MTI
-----------------------------------------------------------------------------------------------------------------------
5
-----------------------------------------------------------------------------------------------------------------------
Reference
File No. Date Secured Party Collateral Description
-----------------------------------------------------------------------------------------------------------------------
Leasing
-----------------------------------------------------------------------------------------------------------------------
* April 16, 1997 Amendment of registration
961209 1901 1529 6050 to
change address of secured
party.
-----------------------------------------------------------------------------------------------------------------------
073897533 November 29, 1996 Xxxxxxx Group Inc. E, MV
96 Chev Cheyenne 1/2 T
2WD Pickup
-----------------------------------------------------------------------------------------------------------------------
073897308 November 15, 1996 Xxxxxxx Group Inc. E, MV
96 Chevrolet 3/4T 4x4 Diesel
-----------------------------------------------------------------------------------------------------------------------
073777815 October 11, 1996 Xxxxxxx Group Inc. E, MV
96 GMC 3/4 Ton 4x4
-----------------------------------------------------------------------------------------------------------------------
073777824 October 11, 1996 Xxxxxxx Group Inc. E, MV
96 Chevrolet 1/2 Ton 2WD
-----------------------------------------------------------------------------------------------------------------------
076843386 October 3, 1996 Xxxxxxx Group Inc. E, MV
96 GMC 3/4 Ton 4x4
-----------------------------------------------------------------------------------------------------------------------
076843395 October 3, 1996 Xxxxxxx Group Inc. E, MV
96 GMC 3/4 Ton 4x4
-----------------------------------------------------------------------------------------------------------------------
825300603 October 1, 0000 XXX Xxxxxx Limited-Attn. E, A, O
Xxxxx Xxxxx
-----------------------------------------------------------------------------------------------------------------------
823593393 July 18, 1996 PHH Vehicle Management E, O, MV
Services Inc
-----------------------------------------------------------------------------------------------------------------------
076047993 May 27, 1996 Xxxxxxx Group Inc. E, MV
96 GMC K-2500 4x4
-----------------------------------------------------------------------------------------------------------------------
076048002 May 27, 1996 Xxxxxxx Group Inc. E, MV
96 GMC K-2500 4x4
-----------------------------------------------------------------------------------------------------------------------
076048011 May 27, 1996 Xxxxxxx Group Inc. E, MV
96 GMC K-2500 4x4
-----------------------------------------------------------------------------------------------------------------------
822114351 May 23, 1996 Teletech Financial Corporation E, O
-----------------------------------------------------------------------------------------------------------------------
076047885 April 25, 1996 Xxxxxxx Group Inc. E, MV
96 Chevrolet K-2500 4x4
-----------------------------------------------------------------------------------------------------------------------
076047903 April 25, 1996 Xxxxxxx Group Inc. E, MV
96 Chevrolet S-10 Sonoma
-----------------------------------------------------------------------------------------------------------------------
079194744 February 8, 1996 Xxxxxxx Group Inc. E, MV
95 GMC K-2500 4x4
-----------------------------------------------------------------------------------------------------------------------
6
-----------------------------------------------------------------------------------------------------------------------
Reference
File No. Date Secured Party Collateral Description
-----------------------------------------------------------------------------------------------------------------------
079194294 October 20, 1995 Xxxxxxx Group Inc. E, MV
95 Ford F350 4x4
-----------------------------------------------------------------------------------------------------------------------
079194303 October 20, 1995 Xxxxxxx Group Inc. E, MV
95 Ford F350 4x4
-----------------------------------------------------------------------------------------------------------------------
816853779 September 20, 1995 X.X. Xxxxxxx Leasing G, E, O
1 Canon NP-6025
RDF-CI
Duplex Unit A1
-----------------------------------------------------------------------------------------------------------------------
079193979 August 17, 1995 Xxxxxxx Group Inc. E, MV
95 Chevrolet K2500 Pickup
-----------------------------------------------------------------------------------------------------------------------
079193853 June 28, 1995 Xxxxxxx Group Inc. E, MV
95 Chevrolet K2500 Diesel
-----------------------------------------------------------------------------------------------------------------------
079193862 June 28, 1995 Xxxxxxx Group Inc. E, MV
95 Ford F3500 Crew Cab
-----------------------------------------------------------------------------------------------------------------------
058786146 May 17, 1995 Xxxxxxx Group Inc. E, MV
95 Chevrolet Cheyenne
-----------------------------------------------------------------------------------------------------------------------
076465071 March 15, 1995 Xxxxxxx Group Inc. E, MV
94 Ford F-350 4x4
-----------------------------------------------------------------------------------------------------------------------
076464738 December 22, 1994 Xxxxxxx Group Ind. E, MV
95 Chevrolet Cheyenne K-
2500
-----------------------------------------------------------------------------------------------------------------------
076464315 September 26, 1994 Xxxxxxx Group Inc. E, MV
94 Chevrolet Pickup
-----------------------------------------------------------------------------------------------------------------------
808902783 August 16, 1994 Associates Commercial I, E, A, O, MV
Corporation of Canada Ltd. Two 94 Toro 501 LHD
Scoop Trams complete with
all present and future
attachments and all proceeds
thereof.
-----------------------------------------------------------------------------------------------------------------------
* April 26, 1996 Associates Leasing (Canada) Amendment of secured
Ltd. party's name.
-----------------------------------------------------------------------------------------------------------------------
076466079 July 29, 1994 Xxxxxxx Group Inc. E, MV
94 Chevrolet Cheyenne
-----------------------------------------------------------------------------------------------------------------------
076466088 July 29, 1994 Xxxxxxx Group Inc. E, MV
94 Chevrolet Cheyenne
-----------------------------------------------------------------------------------------------------------------------
7
-----------------------------------------------------------------------------------------------------------------------
Reference
File No. Date Secured Party Collateral Description
-----------------------------------------------------------------------------------------------------------------------
053741529 July 28, 1994 Bankers Trust Company I, E, A, O, MV
-----------------------------------------------------------------------------------------------------------------------
077545935 July 27, 1994 BT Bank of Canada I, E, A, O, MV
-----------------------------------------------------------------------------------------------------------------------
" July 28, 1994 Bankers Trust Company Amendment to change name
of secured creditor.
-----------------------------------------------------------------------------------------------------------------------
076465665 April 28, 1994 Xxxxxxx Group Inc. E, MV
93 Ford Crew Cab 4x4
-----------------------------------------------------------------------------------------------------------------------
076465503 March 30, 1994 Xxxxxxx Group Inc. E, MV
94 Chevrolet Suburban 4x4
-----------------------------------------------------------------------------------------------------------------------
076466835 March 30, 1994 Xxxxxxx Group Inc. E, MV
93 Chevrolet
-----------------------------------------------------------------------------------------------------------------------
058788873 July 26, 1993 Xxx Xxxxxxx Limited E, MV
93 GMC 1/2-Ton Sierra
-----------------------------------------------------------------------------------------------------------------------
* Discharged
8
