EXHIBIT 2.1
REAL ESTATE PURCHASE AGREEMENT
1387746 ONTARIO INC.
AS VENDOR
-AND-
STEELBANK INC.
AS PURCHASER
FEBRUARY 17, 2005
TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION
Section 1.1 Defined Terms .................................................................. 1
Section 1.2 Gender and Number .............................................................. 2
Section 1.3 Headings, Etc .................................................................. 3
Section 1.4 Currency ....................................................................... 3
Section 1.5 Severability ................................................................... 3
Section 1.6 Entire Agreement ............................................................... 3
Section 1.7 Amendments ..................................................................... 3
Section 1.8 Waiver ......................................................................... 3
Section 1.9 Governing Law .................................................................. 3
Section 1.10 Incorporation of Schedules ..................................................... 3
ARTICLE 2
PURCHASE AND PURCHASE PRICE
Section 2.1 Purchase ....................................................................... 4
Section 2.2 Price and Payment .............................................................. 4
Section 2.3 Allocation ..................................................................... 5
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of Vendor ....................................... 5
Section 3.2 Qualifications to Representations and Warranties of Vendor ..................... 6
Section 3.3 Representations and Warranties of Purchaser .................................... 6
Section 3.4 As Is, Where Is................................................................. 7
ARTICLE 4
TITLE AND INSPECTIONS
Section 4.1 Documents ........................................................................ 7
Section 4.2 Survey ........................................................................... 7
Section 4.3 Title Examination ................................................................ 8
Section 4.4 Release of Information ........................................................... 8
Section 4.5 Permitted Encumbrances ........................................................... 8
ARTICLE 5 COVENANTS OF THE VENDOR
Section 5.1 Covenants ....................................................................... 9
(ii)
ARTICLE 6
CONDITIONS
Section 6.1 Closing Conditions of Purchaser ................................................ 10
Section 6.2 Closing Conditions of Vendor ................................................... 10
Section 6.3 Non-Fulfilment and Waiver by Purchaser ......................................... 11
Section 6.4 Non-Fulfilment and Waiver by Vendor ............................................ 11
ARTICLE 7
GST
Section 7.1 GST on Land and Building ....................................................... 11
Section 7.2 Sales Tax and GST on Chattels .................................................. 12
ARTICLE 8
CLOSING
Section 8.1 Date and Place of Closing ...................................................... 12
Section 8.2 Adjustments .................................................................... 13
Section 8.3 Vendor's Deliveries on Closing ................................................. 13
Section 8.4 Purchaser's Deliveries on Closing .............................................. 14
Section 8.5 Completion of Closing .......................................................... 15
Section 8.6 Negotiation of Closing Documents ............................................... 15
ARTICLE 9
PLANNING ACT
Section 9.1 Planning Act Compliance ........................................................ 15
ARTICLE 10
SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 10.1 Survival ....................................................................... 15
ARTICLE 11
MISCELLANEOUS
Section 11.1 No Assumption .................................................................. 16
Section 11.2 No Realty Fees or Commissions .................................................. 16
Section 11.3 Notice ......................................................................... 16
Section 11.4 Solicitors as Agents ........................................................... 17
Section 11.5 Tender ......................................................................... 17
Section 11.6 Discharge of Institutional Mortgages ........................................... 19
Section 11.7 Time of Essence ................................................................ 20
Section 11.8 Enurement ...................................................................... 20
Section 11.9 Assignment ..................................................................... 20
Section 11.10 Costs and Expenses ............................................................. 20
(iii)
Section 11.11 Further Assurances ............................................................. 20
Section 11.12 Land Registry Office ........................................................... 21
Section 11.13 Execution by Telecopy and Counterparts ......................................... 21
SCHEDULES
SCHEDULE "1.1" LEGAL DESCRIPTION OF THE LAND
SCHEDULE "2.2(c)" FORM OF SECOND MORTGAGE
SCHEDULE "4.5(f)" PERMITTED ENCUMBRANCES
(iv)
AGREEMENT OF PURCHASE AND SALE
Agreement of Purchase and Sale dated as of the 17th day of February, 2005
(the "EFFECTIVE DATE") between 1387746 Ontario Inc. an Ontario corporation (the
"VENDOR") and Steelbank Inc., a New Brunswick corporation (the "PURCHASER").
RECITALS:
(a) Bolton Steel Tube Co., Ltd. ("BOLTON") and BST Acquisition, Ltd.
("BST") entered into an Asset Purchase Agreement dated as of July
22, 2005, as amended, (the "ASSET PURCHASE AGREEMENT") pursuant to
which Xxxxxx agreed to sell and BST agreed to purchase as a going
concern the Business of Xxxxxx (as defined in the Asset Purchase
Agreement) which is carried on by Xxxxxx from the Property, all on
the terms and conditions of the Asset Purchase Agreement;
(b) Prior to its completion of transactions contemplated by the Asset
Purchase Agreement, BST amalgamated with Steelbank Inc. to continue
and carry on as and under the name of the Purchaser.
(c) It is a condition of the completion of the Asset Purchase Agreement
that the Purchaser enter into this Agreement to acquire the Property
directly from the owner thereof, namely, the Vendor, all on the
terms and conditions hereof;
(d) It is also a condition of the completion of the Asset Purchase
Agreement that Xxxxxx cause the Vendor as landlord to enter into an
interim lease with the Purchaser as tenant in respect of the
Property (the "INTERIM LEASE") effective as of the Closing Date (as
defined in the Asset Purchase Agreement) in order to permit the
Purchaser to operate the Business therefrom pending completion of
the transaction of purchase and sale contemplated herein.
In consideration of the foregoing and the mutual agreements contained
herein (the receipt and adequacy of which are acknowledged), the parties agree
as follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINED TERMS.
As used in this Agreement, the following terms have the following
meanings:
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"BUILDING" means the buildings situate on the Land, together with all
other structures situate on the Land and municipally known as 0000 Xxxxxx
Xxxx, Xxxxxxxxxxx, Xxxxxxx, including all improvements thereto and to the
Land and all fixtures forming a part thereof.
"CHATTELS" means collectively, all the goods, chattels, equipment,
furnishings and other personal property of the Vendor, customarily located
on the Land or in the Building and used in connection with the operation,
maintenance, repair, management or occupancy thereof, excluding any and
all property and assets which are the subject matter of the Asset Purchase
Agreement.
"EFFECTIVE DATE" means the date of the Agreement first written above.
"LAND" means those certain lands situate in the City of Mississauga,
Regional Municipality of Peel, Province of Ontario, being more
particularly legally described in Schedule "1.1" hereto.
"PERMITTED ENCUMBRANCES" has the meaning ascribed in Section 4.5.
"PROPERTY" means, collectively, the Land, the Building and the Chattels.
"PURCHASE PRICE" has the meaning ascribed in Section 2.2.
"REAL ESTATE CLOSING" means the completion of the transaction of purchase
and sale in respect of the Property provided for in this Agreement and,
where the context so requires, the time and date at which the same shall
be effected pursuant to Section 8.1 hereof and "TIME OF CLOSING" shall
have a corresponding meaning.
"REAL ESTATE CLOSING DATE" means the 90th day immediately following the
Effective Date or such earlier date as is at least 10 business days
following Vendor's receipt of a written notice of the Purchaser specifying
an earlier closing date.
"REQUISITION PERIOD" means that period commencing on the date of this
Agreement and ending at 4:59 p.m. on the date which is thirty (30) days
thereafter.
SECTION 1.2 GENDER AND NUMBER.
Any reference in this Agreement to gender shall include all genders, and
words importing the singular number only shall include the plural and vice
versa.
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SECTION 1.3 HEADINGS, ETC.
The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not affect
or be utilized in the construction or interpretation of this Agreement.
SECTION 1.4 CURRENCY.
All references in this Agreement to dollars, unless otherwise specifically
indicated, are expressed in Canadian currency.
SECTION 1.5 SEVERABILITY.
Any Article or Section of this Agreement or any other provision of this
Agreement which is, or becomes, illegal, invalid or unenforceable shall be
severed from this Agreement and be ineffective to the extent of such illegality,
invalidity or unenforceability and shall not affect or impair the remaining
provisions hereof.
SECTION 1.6 ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties. There are no representations, warranties, conditions or other
agreements, express or implied, statutory or otherwise, between the parties
hereto in connection with the subject matter of this Agreement, except as
specifically set forth herein and in the Asset Purchase Agreement.
SECTION 1.7 AMENDMENTS.
This Agreement may only be amended, modified or supplemented by a written
agreement signed by all of the parties hereto.
SECTION 1.8 WAIVER.
No waiver of any of the provisions of this Agreement shall be deemed to
constitute a waiver of any other provision (whether or not similar), nor shall
such waiver constitute a waiver or continuing waiver unless otherwise expressly
provided in writing duly executed by the party to be bound thereby.
SECTION 1.9 GOVERNING LAW.
This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
SECTION 1.10 INCORPORATION OF SCHEDULES.
The following are the schedules attached to and incorporated in this
Agreement:
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Schedule "1.1" - Legal Description of the Land
Schedule "2.2(c)" - Form of Second Mortgage
Schedule "4.5(f)" - Permitted Encumbrances
ARTICLE 2
PURCHASE AND PURCHASE PRICE
SECTION 2.1 PURCHASE.
On and subject to the terms and conditions herein contained, the Vendor
agrees to sell, assign and transfer the Property to the Purchaser and the
Purchaser agrees to purchase the Property from the Vendor, as, at and from the
Time of Closing on the Real Estate Closing Date.
SECTION 2.2 PRICE AND PAYMENT.
The purchase price (the "PURCHASE PRICE") for the Property shall be the
sum of FIVE MILLION SEVEN HUNDRED THOUSAND DOLLARS ($5,700,000.00) and shall be
payable by the Purchaser to the Vendor as follows:
(a) Two Hundred Thousand Dollars ($200,000.00) by way of a deposit (the
"DEPOSIT") to be paid by the Purchaser to the Vendor's solicitors,
in trust, by certified cheque or bank draft drawn upon a Schedule 1
Canadian chartered bank made payable to the Vendor's solicitors, in
trust, within one (1) business day after the Effective Date, to be
held in trust pending completion or other termination of this
Agreement and credited on account of the Purchase Price upon
successful completion of the transaction of purchase and sale
contemplated hereby;
(b) Four Million Three Hundred Thousand Dollars ($4,300,000.00) of the
Purchase Price, subject to any adjustments made in accordance with
Section 8.2, shall be paid by the Purchaser to the Vendor on the
Real Estate Closing by way of certified cheque or bank draft drawn
upon a Schedule 1 Canadian chartered bank made payable to the Vendor
or as it may otherwise direct in writing; and
(c) Provided that (i) the Purchaser's equity in the Property as at the
Real Estate Closing Date is at least Five Hundred Thousand Dollars
($500,000.00), and (ii) any first mortgage of the Property does not
exceed Four Million Dollars ($4,000,000.00), the balance of the
Purchase Price, namely, One Million, Two Hundred Thousand Dollars
($1,200,000.00), shall be paid by way of a promissory note issued in
favour of the Vendor (the "PROMISSORY NOTE") and secured by a second
mortgage or charge in favour of the Vendor (the "SECOND MORTGAGE")
(subordinate only to a first mortgage in favour of a
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financial institutional lender not to exceed $4,000,000.00), each in
the original principal amount of One Million Two Hundred Thousand
Dollars ($1,200,000.00) maturing on the 15th month anniversary of
the Real Estate Closing Date and bearing interest at the rate of 8%
per annum, calculated and payable monthly, such Promissory Note and
Second Mortgage to be in the form or substantially in the form of
Schedule "2.2(c)" annexed hereto.
(d) In the event that each of the conditions set out in Section
2.2(c)(i) and (ii) above are not satisfied, the balance of the
Purchase Price, namely, One Million Two Hundred Thousand Dollars
($1,200,000.00) shall be paid by the Purchaser to the Vendor on the
Real Estate Closing by way of certified cheque or bank draft drawn
upon a Schedule 1 Canadian chartered bank made payable to the Vendor
or as it may otherwise direct in writing.
SECTION 2.3 ALLOCATION.
The Vendor and the Purchaser agree that for accounting, income tax and
other purposes, the Purchase Price shall be allocated among the Land, the
Building and the Chattels as follows:
Land $1,600,000
Building $4,100,000
Chattels Nominal
----------
Total $5,700,000
==========
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF VENDOR.
The Vendor represents and warrants to the Purchaser as follows and
acknowledges and confirms that the Purchaser is relying upon such
representations and warranties for the purposes of entering into this Agreement:
(a) The Vendor is a corporation duly incorporated and organized under
the laws of the Province of Ontario, is validly subsisting, has the
corporate power to own and sell to the Purchaser the Property;
(b) The Vendor is not now and will not at the Time of Closing be a
non-resident of Canada within the meaning of the Income Tax Act
(Canada);
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(c) The Vendor is not aware of any conditions at the Property which
violate any environmental laws or regulations, other than as
disclosed in the Reports (as that term is defined in the Asset
Purchase Agreement);
(d) No person, firm or corporation, other than the Purchaser, has any
agreement or right capable of becoming an agreement for the purchase
of the Property or any part thereof;
(e) There are no actions, suits or proceedings currently affecting the
Property or to the actual knowledge of the Vendor, pending or
presently outstanding at law or in equity or before or by any
federal, provincial, municipal or other governmental department,
commission, board, bureau, tribunal or agency which, if successful,
would have a material adverse effect on title to the Property or the
economic value thereof; and
(f) No part of the Land or the Building has been taken or expropriated
by any federal, provincial, municipal or other competent authority
nor has the Vendor received any notice that a proceeding in respect
thereof has been commenced.
SECTION 3.2 QUALIFICATIONS TO REPRESENTATIONS AND WARRANTIES OF VENDOR
Notwithstanding the representations and warranties of the Vendor set out
in Section 3.1 above (the "VENDOR'S REPRESENTATIONS AND WARRANTIES"), same are
hereby qualified to the extent any such Vendor's Representations and Warranties
fail to be true and correct in any material respect as a result of, or in any
way caused by or connected with, directly or indirectly, the Purchaser's use and
occupation of the Property and operation of the Business therefrom pursuant to
the Interim Lease.
SECTION 3.3 REPRESENTATIONS AND WARRANTIES OF PURCHASER.
The Purchaser represents and warrants to the Vendor as follows and
acknowledges and confirms that the Vendor is relying upon such representations
and warranties for the purposes of entering into this Agreement:
(a) The Purchaser is a corporation duly amalgamated and organized under
the laws of the Province of New Brunswick, is validly subsisting,
has the corporate power to own and sell to the Vendor the Property;
(b) The Purchaser is not now and will not at the Time of Closing be a
non-resident of Canada within the meaning of the Income Tax Act
(Canada); and
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(c) No governmental or regulatory authorizations, consents, approvals,
filings or notices pertaining to the Purchaser are required to be
obtained or given or waiting period is required to expire in order
that the purchase and sale of the Property may be consummated by the
Purchaser or for the Purchaser to carry out its obligations set out
in this Agreement save and except for any required notification
filing under the Investment Canada Act. The Purchaser hereby agrees
to make the required notification filing under the Investment Canada
Act within the prescribed time period.
SECTION 3.4 AS IS, WHERE IS.
Subject to Sections 3.1 and 3.2 above, the Purchaser acknowledges and
agrees that it is acquiring the Property on an "as is, where is" basis without
any representations or warranties, expressed or implied, as to title,
encumbrance, description, condition (physical, environmental or otherwise),
cost, size, merchantability or fitness for purpose, quantity or quality thereof,
the existence or non-existence of any hazardous materials, compliance with any
or all environmental laws or in respect of any matter or thing whatsoever
concerning the Property. The Purchaser acknowledges and agrees that it is
responsible to satisfy itself, and is relying solely upon its own inspections
and investigations with respect to the Property in this regard.
ARTICLE 4
TITLE AND INSPECTIONS
SECTION 4.1 DOCUMENTS.
The Vendor shall forthwith make available to the Purchaser, its solicitors
and other authorized representatives, all title documents, abstracts of title,
deeds, engineering and architectural drawings, records containing information
relating to any environmental matters affecting the Property or its use
including any permits, licences, or approvals and results of any environmental
tests and surveys, and all other documents relating to the Property in the
Vendor's possession or under its control, all of which shall become the property
of the Purchaser at the Time of Closing.
SECTION 4.2 SURVEY.
Forthwith after the execution of this Agreement by both parties, the
Vendor shall provide the Purchaser with (i) a copy of an existing survey of the
Land prepared by X.X. Xxxxxx Limited, O.L.S. dated May 2, 2000 (the "SURVEY"),
and (ii) a full set of the plans and specifications for the Building and all
other structures situate on the Land to the extent in the Vendor's possession or
control, in both cases, to the extent not previously delivered to the Purchaser
or its solicitors.
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SECTION 4.3 TITLE EXAMINATION.
The Purchaser shall have until the expiration of the Requisition Period to
examine the title to the Property, to satisfy itself that there are no
outstanding municipal work orders, deficiency notices, orders, directives,
orders of non-compliance or other requirements in connection with the Property,
to satisfy itself that the present use of the Property may be lawfully
continued. If within such Requisition Period, any valid objection to title
(other than a Permitted Encumbrance) or to any outstanding work order,
deficiency notice, order, directive, notice of non-compliance or other
requirement in connection with the Property or to the fact that the present use
may not be lawfully continued (including legal non-conforming use, if
applicable) is made in writing to the Vendor and which the Vendor is unable to
remove, remedy or satisfy and which the Purchaser will not waive, then this
Agreement, notwithstanding any intermediate acts or negotiations in respect of
such objections, shall be at an end. Save as to any valid objections so made
prior to the expiration of the Requisition Period and except for any objection
going to the root of the title to the Property, the Purchaser shall be
conclusively deemed to have accepted the Vendor's title to the Property,
provided that the Purchaser shall have the right to make further objections
arising out of or in respect of any registration against title to the Property
after the expiration of the Requisition Period but before the Real Estate
Closing. Notwithstanding the foregoing, for greater certainty, the parties
acknowledge and agree that the Purchaser shall not be entitled to requisition
nor shall the Vendor be responsible or liable to satisfy any requisition
resulting from or in any way caused by or connected with, directly or
indirectly, the Interim Lease, nor the Purchaser's use and occupation of the
Property and operation of the Business therefrom pursuant to the Interim Lease.
SECTION 4.4 RELEASE OF INFORMATION.
The Vendor hereby consents to the release to the Purchaser and its
authorized representatives by all appropriate governmental and municipal
authorities of all information on record relating to the Property and the Vendor
further agrees to execute such written consents, in a form satisfactory to the
Purchaser, within five (5) days of request therefor, provided that the Purchaser
shall deliver to the Vendor copies of any and all responses received from such
authorities and, furthermore, provided that all such information shall be
subject to the confidentiality provisions of Section 12.2 of the Asset Purchase
Agreement which are hereby incorporated by reference to form an integral part
hereof. Such consents shall not authorize any on-site or physical inspections of
the Property which are specifically prohibited hereunder and excluded herefrom.
SECTION 4.5 PERMITTED ENCUMBRANCES.
Notwithstanding the provisions of Section 4.3, the Purchaser acknowledges
and agrees that title to the Property may, at the Time of Closing, be subject to
any or
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all of the following encumbrances ("PERMITTED ENCUMBRANCES") and the Purchaser
agrees to accept a transfer of the Property from the Vendor subject thereto:
(a) minor easements for the supply of utility services to the Land and
the Building, provided that no such easement materially interferes
with the use of the Land or the Building as currently used;
(b) all registered development, subdivision and site plan agreements,
provided that the same are complied with insofar as they affect or
relate to the Land or the Building and provided that no such
agreement materially interferes with the use of the Land and the
Building as currently used;
(c) the reservations, limitations, provisos and conditions expressed or
contained in the original grant of the Land from the Crown;
(d) the Interim Lease and all matters otherwise subject to requisition
pursuant to Section 4.3 above but for the exceptions and caveats set
out therein;
(e) all easements, rights-of-ways, encroachments and defects and
irregularities disclosed in the Survey; and
(f) the items listed in Schedule "4.5(f)" hereto.
ARTICLE 5
COVENANTS OF THE VENDOR
SECTION 5.1 COVENANTS.
The Vendor covenants with the Purchaser as follows and acknowledges that
such covenants are being relied upon by the Purchaser:
(a) The Vendor shall do nothing to encumber the Property after the date
of this Agreement and while the same is in effect and shall
discharge all mortgages, charges, liens and encumbrances on the
Property on or before the Real Estate Closing, other than Permitted
Encumbrances;
(b) Without limiting the generality of Section 5.1(a), the Vendor shall
not, without the prior written consent of the Purchaser, which
consent may be arbitrarily withheld, enter into any lease of the
Property or any part thereof after the date of this Agreement and
while the same is in effect, other than the Interim Lease;
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(c) Without limiting the generality of Section 5.1(a), the Vendor shall
not market, advertise, offer for sale, agree to sell or sell the
Property or any part thereof to any other person, firm or
corporation after the date of this Agreement and while the same is
in effect; and
(d) The Vendor shall execute such further assurances as may be
reasonably requested by the Purchaser.
ARTICLE 6
CONDITIONS
SECTION 6.1 CLOSING CONDITIONS OF PURCHASER.
The obligation of the Purchaser to complete the transaction of purchase
and sale of the Property contemplated herein shall be subject to the fulfilment
of the following terms and conditions, on or before the Real Estate Closing,
which terms and conditions are for the exclusive benefit of the Purchaser and
which may be waived, in whole or in part, only by the Purchaser:
(a) The representations and warranties of the Vendor set forth herein
shall be true, correct and complete in every material respect as if
given at the Time of Closing;
(b) All of the covenants of the Vendor to be complied with or performed
by the Vendor on or before the Real Estate Closing shall have been
duly complied with or performed; and
(c) Each of the deliveries required to be made by the Vendor to the
Purchaser under Section 8.3 hereof shall have been duly made.
SECTION 6.2 CLOSING CONDITIONS OF VENDOR.
The obligation of the Vendor to complete the transaction of purchase and
sale of the Property contemplated herein shall be subject to the fulfilment of
the following terms and conditions, on or before the Real Estate Closing, which
terms and conditions are for the exclusive benefit of the Vendor and which may
be waived, in whole or in part, only by the Vendor:
(a) The representations and warranties of the Purchaser set forth herein
and in the Second Mortgage, shall be true, correct and complete in
every material respect as if given at the Time of Closing;
(b) All of the covenants of the Purchaser to be complied with or
performed by the Purchaser on or before the Real Estate Closing
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(including those contemplated in the Second Mortgage) shall have
been duly complied with or performed;
(c) Each of the deliveries required to be made by the Purchaser to the
Vendor under Section 8.3 hereof shall have been duly made;
(d) No breach or default by the Purchaser shall have occurred under the
Asset Purchase Agreement and the Purchase Transaction (as defined in
the Asset Purchase Agreement) shall have successfully closed in
accordance with the terms thereof;
(e) No default or breach by the Purchaser shall have occurred under the
terms of the Interim Lease; and
(f) Bolton shall have received full and final payment from the Purchaser
of all amounts due under the Asset Purchase Agreement on account of
purchased inventory.
SECTION 6.3 NON-FULFILMENT AND WAIVER BY PURCHASER.
In the event that any condition set forth in Section 6.1 shall not have
been satisfied on or before the Real Estate Closing, then the Purchaser may, at
its option, without prejudice to the exercise of any other right or remedy of
the Purchaser hereunder or otherwise at law or in equity, terminate this
Agreement by notice in writing to the Vendor; provided, however, that the
Purchaser shall be entitled to waive compliance with any of such conditions, in
whole or in part, if it sees fit to do so, without prejudice to any of its
rights of termination in the event of non-performance of any other covenant or
condition contained herein.
SECTION 6.4 NON-FULFILMENT AND WAIVER BY VENDOR.
In the event that any condition set forth in Section 6.2 shall not have
been satisfied on or before the Real Estate Closing, then the Vendor may, at its
option, without prejudice to the exercise of any other right or remedy of the
Vendor hereunder or otherwise at law or in equity, terminate this Agreement by
notice in writing to the Purchaser; provided, however, that the Vendor shall be
entitled to waive compliance with any of such conditions, in whole or in part,
if it sees fit to do so, without prejudice to any of its rights of termination
in the event of non-performance of any other covenant or condition contained
herein.
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ARTICLE 7
GST
SECTION 7.1 GST ON LAND AND BUILDING.
The Purchaser hereby represents and warrants to the Vendor that (i) it is
registered for the purposes of Part IX of the Excise Tax Act (Canada) in
accordance with the requirements of Subdivision (d) of Division V thereof; (ii)
it will continue to be so registered at the time of the Real Estate Closing; and
(iii) it is buying the Property on its own account and not as agent. The
Purchaser covenants to deliver to the Vendor upon the Real Estate Closing (i) a
notarial copy of the certificate evidencing its registration for purposes of the
goods and services tax ("GST"), including the registration number assigned to
it; and (ii) the declaration and indemnity of the Purchaser confirming the
accuracy, as at the Real Estate Closing, of the representations and warranties
set out in this paragraph and agreeing to indemnify the Vendor for any amounts
for which the Vendor may become liable as a result of any failure by the
Purchaser to pay the GST payable in respect of the sale of the Land and Building
under Part IX of the Excise Tax Act (Canada). Provided that the Purchaser
delivers a notarial copy of the certificate and the declaration and indemnity as
set out above, then the Purchaser shall not be required to pay to the Vendor,
nor shall the Vendor be required to collect from the Purchaser, the GST in
respect of the Land and Building. In the event that the Purchaser shall fail to
deliver the notarial copy of the certificate and the declaration and indemnity
as set out above, then the Purchaser shall pay to the Vendor, in addition to the
Purchase Price, in pursuance of the Purchaser's obligation to pay and the
Vendor's obligation to collect GST under the provisions of the Excise Tax Act
(Canada), an amount equal to seven percent (7%) of said Purchase Price allocated
to the Land and Building.
SECTION 7.2 SALES TAX AND GST ON CHATTELS.
The Purchaser shall be liable for and shall pay all land transfer taxes,
federal and provincial sales taxes and all other taxes, duties, registration
charges or other like charges, including GST, properly payable by the Purchaser
upon and in connection with the conveyance and transfer of the Property by the
Vendor to the Purchaser hereunder.
ARTICLE 8
CLOSING
SECTION 8.1 DATE AND PLACE OF CLOSING.
The closing of the transaction of purchase and sale of the Property
contemplated herein shall be effected on the Real Estate Closing Date, at the
offices of Stikeman Elliott LLP, Suite 5300, Commerce Court West, Toronto,
Ontario, or at such other time and place as may be agreed upon by the parties
hereto.
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SECTION 8.2 ADJUSTMENTS.
All realty taxes, insurance premiums, hydro expenses, water expenses, gas
rates, fuel expenses, accrued and unpaid rent under the Interim Lease and other
outgoings or expenditures with respect to the Property, to the extent that they
are not the responsibility of the Purchaser as tenant under the Interim Lease in
which case there shall be no adjustment (provided that the same have been
satisfied), shall be apportioned as necessary and allowed to the Real Estate
Closing.
SECTION 8.3 VENDOR'S DELIVERIES ON CLOSING.
On the Real Estate Closing, the Vendor shall deliver to the Purchaser,
against payment by the Purchaser to the Vendor of the balance of the Purchase
Price and delivery to the Vendor of the Purchaser's Closing Documents, the
following (the "VENDOR'S CLOSING DOCUMENTS"):
(a) all conveyances, assignments, affidavits, certificates and other
documents necessary or reasonably required to transfer effectively
the Property to the Purchaser including, without limitation, a
transfer of the Land in statutory form with the Planning Act
(Ontario) statements thereof completed and a xxxx of sale for the
Chattels;
(b) a statement of adjustments in accordance with Section 8.2;
(c) an undertaking to re-adjust, if necessary, in respect of any of the
items on the statement of adjustments, duly executed by the Vendor;
(d) a copy certified by a senior officer of the Vendor of a joint
resolution of the board of directors and shareholders of the Vendor
authorizing and approving the sale of the Property to the Purchaser
on the terms and conditions herein set forth;
(e) statutory declaration of a senior officer of the Vendor confirming
that as at the date of this Agreement and as at the date of the Real
Estate Closing, the Vendor was not and is not a non-resident of
Canada within the meaning of the Income Tax Act (Canada),
respectively;
(f) all books, files and records in the possession or control of the
Vendor (including keys) pertaining to the ownership, management,
operation or development of the Property or any part thereof, to the
extent not previously delivered to the Purchaser;
(g) vacant possession of the Land and the Building subject to the
Permitted Encumbrances; and
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(h) such further documentation relating to the completion of the
transactions contemplated in this Agreement as shall be otherwise
referred to in this Agreement or as the Purchaser shall reasonably
require.
SECTION 8.4 PURCHASER'S DELIVERIES ON CLOSING.
On the Real Estate Closing, the Purchaser shall deliver to the Vendor,
against delivery to the Purchaser of the Vendor's Closing Documents, the
following (the "PURCHASER'S CLOSING DOCUMENTS"):
(a) a certified cheque or bank draft representing the Balance due on the
Real Estate Closing pursuant to Section 2.2 above;
(b) if applicable, the Promissory Note and Second Mortgage duly executed
by the Purchaser and, in the case of the Second Mortgage only, duly
registered on title to the Property as a good and valid second
charge thereof from the Purchaser in favour of the Vendor in
accordance with Section 2.2 above, together with such other
additional collateral security thereto as the Vendor may reasonably
request in order to better secure and perfect the security
contemplated thereby;
(c) an undertaking to re-adjust, if necessary, in respect of any items
on the statement of adjustments, duly executed by the Purchaser;
(d) a copy certified by a senior officer of the Purchaser of a
resolution of the board of directors of the Purchaser authorizing
and approving the purchase of the Property by the Purchaser on the
terms and conditions herein set forth and execution, delivery and,
where applicable, registration on title to the Property, of the
Promissory Note and Second Mortgage, together with such other
additional collateral security thereto as the Vendor may reasonably
request in order to better secure and perfect the security
contemplated thereby;
(e) statutory declaration of a senior officer of the Purchaser
confirming that as at the date of this Agreement and as at the date
of the Real Estate Closing, the Purchaser was not and is not a
non-resident of Canada within the meaning of the Income Tax Act
(Canada), respectively;
(f) the G.S.T. declaration and indemnity contemplated pursuant to
Section 7.11 of this Agreement duly executed by the Purchaser; and
(g) such further documentation relating to the completion of this
transaction contemplated in this Agreement as shall be otherwise
-15-
referred to in this Agreement or as the Vendor shall reasonably
require.
SECTION 8.5 COMPLETION OF CLOSING.
Registration of all the requisite documents in all appropriate offices of
public record and all matters of payment and delivery of documents by each party
to the other shall be deemed to be concurrent requirements of the Real Estate
Closing so that the Real Estate Closing shall not be completed hereunder until
everything has been paid, delivered and registered.
SECTION 8.6 NEGOTIATION OF CLOSING DOCUMENTS.
Except as otherwise expressly provided herein, all closing documents and
other agreements to be entered into or delivered pursuant to this Agreement
shall be in form and substance satisfactory to the Vendor and Purchaser and
their respective counsel, each acting reasonably and in good faith.
ARTICLE 9
PLANNING ACT
SECTION 9.1 PLANNING ACT COMPLIANCE.
All of the mutual covenants, conditions, agreements and payments contained
in this Agreement shall be conditional upon compliance with the Planning Act
(Ontario). The Vendor covenants with the Purchaser that the Vendor shall obtain
prior to the Real Estate Closing all necessary consents under the Planning Act
(Ontario) for the conveyance of the Property or any part thereof to the
Purchaser and shall comply with any conditions imposed with respect to any such
consents, all at the Vendor's expense.
ARTICLE 10
SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
SECTION 10.1 SURVIVAL.
The covenants, representations and warranties of the Vendor and Purchaser
contained in this Agreement or in the Schedules hereto or contained in
certificates or documents submitted pursuant to or in connection with the
transaction of purchase and sale herein provided for shall survive the Real
Estate Closing Date for a period of six (6) months thereafter (the "CLAIM
PERIOD") and, notwithstanding such Real Estate Closing, and regardless of any
investigation by or on behalf of the Purchaser or Vendor with respect thereto,
shall continue in full force and effect for the benefit of the Purchaser and
Vendor, respectively, during the Claim Period, provided that a written notice of
a claim hereunder is made on or before expiry of the Claim Period,
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failing which the parties hereto should be forever released and discharged from
any and all further obligations hereunder.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 NO ASSUMPTION.
Save and except as contemplated under the Asset Purchase Agreement or this
Agreement, the Purchaser shall not be obliged to assume or perform any
obligation of the Vendor in respect of its ownership, management, operation or
development of the Property.
SECTION 11.2 NO REALTY FEES OR COMMISSIONS.
The Vendor acknowledges and agrees that the Purchaser shall not be
responsible for any real estate or brokerage commission or fee payable to the
Agent or to any person arising out of or in connection with the purchase and
sale transaction contemplated by this Agreement. The Purchaser acknowledges and
agrees that the Vendor shall not be responsible for any real estate or brokerage
commission or fee payable to any person arising out of or in connection with the
purchase and sale transaction contemplated by this Agreement other than the
Agent.
SECTION 11.3 NOTICE.
(1) Any notice, direction or other instrument required or permitted to be
given hereunder shall be in writing and given by delivering it or sending
it by facsimile addressed as follows:
(a) to the Vendor at:
1387746 Ontario Inc.
c/o Bolton Steel Tube Co. Ltd.
000X Xxxxxxx Xx.
Xxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx Xxxxx
with a copy to:
-00-
Xxxx Xxxxxx XXX
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
P.O. Box 480,130 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxxxx
(b) to the Purchaser at:
Steelbank Inc.
X.X. Xxx 00000
Xxxxx Xxxxxx, Xxxxxxxx
X.X.X. 00000
Attention: President
with a copy to:
Stikeman Elliott LLP
000 Xxx Xxxxxx
0000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx X. Xxxxx
(2) Any such notice, direction or other instrument given as aforesaid shall be
deemed to have been effectively given, if sent by facsimile or other
similar form of electronic telecommunications on the next business day
following such transmission or, if delivered, to have been received on the
date of such delivery. Any party may change its address for service from
time to time by notice given in accordance with the foregoing and any
subsequent notice shall be sent to the party at its changed address.
SECTION 11.4 SOLICITORS AS AGENTS.
Notices, approvals, waivers and other documents permitted, required or
contemplated by this Agreement may be given or delivered by the parties hereto
or by their respective solicitors on their behalf.
SECTION 11.5 TENDER.
The Vendor and Purchaser acknowledge that the "Teraview Electronic
Registration System" ("TERS") is operative in the applicable Land Titles Office
in
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which the Property is registered, and agree that the following provisions shall
govern closing, namely:
(a) Each of the Purchaser and the Vendor shall be obliged to retain a
solicitor who is both an authorized TERS user and in good standing
with the Law Society of Upper Canada, and who are hereby authorized
by the parties hereto to enter into a document registration
agreement in the form adopted by the Joint LSUC-CBAO Committee on
Electronic Registration of Title Documents on July 5, 2002 or any
successor version thereto (hereinafter referred to as the "DOCUMENT
REGISTRATION AGREEMENT"), together with the additional requirement
that the registering solicitor shall also be obliged to provide the
non-registering solicitor with a copy of the registration report
printed by TERS upon the registration of the electronic documents,
as evidence of the registration thereof, within one (1) business day
of the Closing Date. It is understood and agreed that the Document
Registration Agreement shall outline or establish the procedures and
timing for completing this transaction electronically, and shall be
executed by both the Vendor's solicitor and the Purchaser's
solicitor and exchanged by courier or telefax between said
solicitors (such that each solicitor has a photocopy of telefaxed
copy of the Document Registration Agreement duly executed by both
solicitors) by no later than five (5) days before the Closing Date;
(b) The delivery and exchange of documents, monies and keys to the
Property, and the release thereof to the Vendor and the Purchaser,
as the case may be:
(i) may not occur contemporaneously with the registration of the
Transfer (and other registerable documentation); and
(ii) shall be governed by the Document Registration Agreement,
pursuant to which the solicitor receiving any documents, keys
and/or certified funds will be required to hold same in
escrow, and will not be entitled to release same except in
strict accordance with the provisions of the Document
Registration Agreement;
(c) Notwithstanding anything contained in this Agreement or in the
Document Registration Agreement to the contrary, it is expressly
understood and agreed by the parties hereto that an effective tender
shall be deemed to have been validly made by either party (in this
paragraph called the "TENDERING PARTY") upon the other party (in
this
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paragraph called the "RECEIVING PARTY") when the solicitor for the
Tendering Party has:
(i) delivered all applicable closing documents, keys and funds to
the Receiving Party's solicitor in accordance with the
provisions of the Document Registration Agreement;
(ii) advised the solicitor for the Receiving Party, in writing,
that the Tendering Party is ready, willing and able to
complete the transaction in accordance with the terms and
provisions of this Agreement; and
(iii) has completed all steps required by TERS in order to complete
this transaction that can be performed or undertaken by the
Tendering Party's solicitor without the cooperation or
participation of the Receiving Party's solicitor, and
specifically when the Tendering Party's solicitor has
electronically "signed" the Transfer/Deed and (any other
registerable documentation) for completeness and granted
"access" to the Receiving Party's solicitor (but without the
Tendering Party's solicitor releasing same for registration by
the Receiving Party's solicitor);
without the necessity of personally attending upon the Receiving
Party or the Receiving Party's solicitor with the aforementioned
documents, keys and/or funds, and without any requirement to have an
independent witness evidencing the foregoing.
SECTION 11.6 DISCHARGE OF INSTITUTIONAL MORTGAGES.
If a discharge of any charge or mortgage held by a corporation
incorporated pursuant to the Loan Companies Act (Canada), Chartered Bank, Trust
Company, Credit Union, Caisse Populaire or Insurance Company is not available in
registrable form on completion, the Purchaser agrees to accept the Vendor's
lawyer's personal undertaking to obtain, out of the closing funds, a discharge
in registrable form and to register same on title to the Property within a
reasonable period of time after completion, provided that on or before
completion the Vendor shall provide to the Purchaser a mortgage statement
prepared by the mortgagee addressed to the Purchaser, Vendor and their
respective solicitors, setting out the balance required to obtain the discharge,
together with a direction executed by the Vendor directing payment to the
mortgagee of the amount required to obtain the discharge out of the balance due
on completion (all such documentation to be in accordance with the Law Society
of Upper Canada publication, The Advisor, with respect to the mortgage
discharges published in September, 1992). In this regard, the Purchaser
acknowledges and agrees that the security held by ABN AMRO Bank in respect of
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the Property qualifies as an institutional mortgage to be discharged, if
necessary, in accordance with the terms hereof.
SECTION 11.7 TIME OF ESSENCE.
Time shall be of the essence of this Agreement in all respects and any
waiver of any time provision shall not be effective unless in writing and signed
by both parties.
SECTION 11.8 ENUREMENT.
This Agreement shall be binding on and shall enure to the benefit of the
successors and permitted assigns of each party.
SECTION 11.9 ASSIGNMENT.
No party hereto may assign its rights and obligations under this Agreement
without the prior written consent of the other parties save and except that the
Purchaser, upon giving written notice to the Vendor at any time on or prior to
five (5) business days prior to the Real Estate Closing Date is entitled to
assign this Agreement or any of its rights or obligations under this Agreement
to any wholly-owned subsidiary of Purchaser, subject to the following
conditions:
(a) The assignee will become jointly and severally liable with
Purchaser, as a principal and not as a surety, with respect to all
of the obligations of the Purchaser hereunder, including the
representations, warranties, covenants, indemnities and agreements
of Purchaser;
(b) The assignee must execute an agreement confirming the assignment and
the assumption by the assignee of all obligations of Purchaser under
this Agreement; and
(c) The Purchaser unconditionally and irrevocably guarantees the
obligations of the assignee under the Promissory Note and Second
Mortgage and any other collateral security delivered by the assignee
hereunder.
SECTION 11.10 COSTS AND EXPENSES.
Save and except as otherwise set out herein, each of the parties shall
bear their own costs and expenses incurred or to be incurred in negotiating and
preparing this Agreement and in completion of the Real Estate Closing.
SECTION 11.11 FURTHER ASSURANCES.
Each of the parties shall at all times hereafter execute and deliver, at
the request of another party, all such further documents and instruments and
shall do
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and perform all such further acts as may be reasonably required by that other
party to give full effect to the intent and meaning of this Agreement.
SECTION 11.12 LAND REGISTRY OFFICE.
If the Real Estate Closing Date shall fall upon a day upon which the
relevant Land Registry Office is not open for business, then the Real Estate
Closing Date shall be the next day when the Land Registry Office is open for
business.
SECTION 11.13 EXECUTION BY TELECOPY AND COUNTERPARTS.
This Agreement may be executed by the parties and transmitted by telecopy
and by counterpart and if so executed and transmitted, this Agreement shall be
for all purposes as effective as if the parties had delivered an executed
original Agreement and all counterparts shall together constitute one and same
Agreement.
IN WITNESS WHEREOF each of the parties hereto have executed this Agreement
effective as of the Effective Date.
1387746 ONTARIO INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------
Name : Xxxxxxx Xxxxx
Title: President
STEELBANK INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Secretary
SCHEDULE 1.1
LEGAL DESCRIPTION OF THE LAND
Part of Xxx 0, Xxxxxxxxxx 0 Xxxxx xx Xxxxxx Xxxxxx of the geographic Township of
Toronto, and Part of Lots 33,34 and 35, Plan G14, designated as Part 1, Plan
43R-967, subject to RO 1094644, TT173300, TT175940, TT73395 and XX00000, Xxxx xx
Xxxxxxxxxxx, Regional Municipality of Peel, being the whole of PIN 13340-0023
(LT).
SCHEDULE "2.2(c)"
FORM OF SECOND MORTGAGE
BST ACQUISITION LTD.
PROMISSORY NOTE
Date: [-], 2004 CDN$ 1,200,000.00
FOR VALUE RECEIVED, BST Acquisition Ltd. (the "MAKER"), a New
Brunswick Corporation with its principal office and place of business at 00
Xxxxxxx Xxxx, Xxxxx 0000, X.X. Xxx 0000, Xxxxxxx "X", Xxxxx Xxxx, Xxx Xxxxxxxxx,
X0X 0X0, PROMISES TO PAY to or to the order of 1387746 Ontario Limited an
Ontario Corporation with its principal place of business at 000X Xxxxxxx Xxxx,
Xxxxxx, XX X0X 0X0 ("138") on [ 15th MONTH ANNIVERSARY DATE OF THE CLOSING DATE]
(the "MATURITY DATE"), at the City of Toronto or at such other place or places
as 138 may designate in writing from time to time, the principal amount of ONE
MILLION TWO HUNDRED THOUSAND DOLLARS (Cdn. $1,200,000.00) in lawful money of
Canada, with interest on such amount at the rate, calculated in the manner and
payable at the times specified in this Note.
This Note is being delivered by the Maker to 138 as evidence of the
Maker's obligation to pay a portion of the purchase price payable to 138 as set
out in a real estate purchase agreement dated [-] 2004 among 138 and the Maker
(the "PURCHASE AGREEMENT").
The amounts remaining from time to time unpaid and outstanding under
this Note shall bear interest, both before and after the occurrence of an Event
of Default (as hereinafter defined) and before and after judgment to the date of
the payment in full of all such amounts, at the rate of 8% per annum. Interest
at such rate shall be calculated and payable monthly, in arrears, on the 1st day
of each and every month hereafter, commencing on [-] 1, 2004. Overdue interest
shall bear interest at the same rate, calculated as aforesaid.
The Maker covenants and agrees that all amounts due and payable
hereunder shall be paid as and when due, in full, without any deduction,
abatement or set-off whatsoever, provided that the Maker shall have the right
and privilege of prepaying the whole or any portion of the amounts under this
Note from time to time remaining unpaid and outstanding at any time or times
without notice, bonus or penalty
If an Event of Default (as hereinafter defined) occurs, then the
whole of the principal amount of this Note remaining unpaid, and all accrued and
unpaid interest thereon, shall be immediately due and payable two days after
demand.
The occurrence of any of the following events shall constitute an
"EVENT OF DEFAULT" for purposes of this Note:
1. The Maker (or any of its affiliates or assignees) fails to pay any amount
due to 138 or Xxxxxx Steel Tube co. Ltd. ("BOLTON") under this Note or
under any other agreement when such amount becomes due and payable and
such failure to pay such amount remains unremedied for three (3) calendar
days;
2. The Maker breaches or fails to perform any obligation pursuant to this
Note or in any material respect, pursuant to any other agreement with
Bolton;
3. If any event occurs which results in the acceleration of the maturity of
any of the indebtedness of the Maker to 138 or Bolton or to others under
any indenture, agreement or undertaking;
4. If Tarpon Industries, Inc. is in default under its guarantee to Bolton;
5. A judgment or execution order for the payment of money in excess of Fifty
Thousand Dollars (Cdn. $50,000.00) is issued or rendered as against the
Maker, and either (i) enforcement proceedings have been commenced pursuant
to such judgment or execution order, or (ii) there is a period of at least
fifteen (15) consecutive days during which a stay of enforcement of the
judgment or execution order (by reason of a pending appeal or otherwise)
is not in effect; or
6. The Maker (i) becomes insolvent or generally not able to pay its debts as
they become due, (ii) admits in writing its inability to pay its debts
generally or makes a general assignment for the benefit of creditors,
(iii) institutes or has instituted against it any proceeding seeking (a)
to adjudicate it a bankrupt or insolvent, (b) liquidation, winding-up,
reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors including, but not limited to, any
plan of compromise or arrangement or other corporate proceeding involving
its creditors, or (c) the entry of an order for relief or the appointment
of a receiver, receiver-manager, custodian, trustee or other similar
official for it or for any substantial part of its properties and/or
assets, and in the case of any such proceeding instituted against it (but
not instituted by it), either the proceeding remains undismissed or
unstayed for a period of 30 calendar days or more, or any of the actions
sought in such proceeding (including, but not limited to, the entry of an
order for relief against it or the appointment of a receiver,
receiver-manager, trustee, custodian or other similar official for it or
for any substantial part of its properties and assets) occurs, or (iv)
takes any corporate action to authorize any of the above actions.
The Maker hereby waives presentment for payment, notice of
non-payment, protest and notice of protest and agrees and consents to all
extensions or renewals of this Note without notice.
This Note is not negotiable or otherwise transferable by 138 without
the prior written consent of the Maker save and except that 138 shall be
entitled to assign this Note to its lenders without the consent of the Maker.
The Maker acknowledges and agrees that mention in this Note of any
particular right or remedy available to 138 in regards to any default by the
Maker or any Event of Default shall not preclude 138 from exercising, or limit
the extent of, any other remedy in respect thereof, whether at law or in equity,
or any other provision of this Note. No remedy available hereunder to 138 shall
be interpreted as being exclusive or dependent upon any other remedy,
and 138 may from time to time exercise, at its option, any one or more remedies
independently or in combination.
No condoning, excusing or overlooking by 138 of any default by the
Maker under this Note shall operate as a waiver of any of 138's rights or any of
the Maker's obligations hereunder and no waiver shall be inferred from or
implied by anything done, delayed or omitted to be done by 138, save and except
only an express waiver in writing given by 138 to the Maker.
This Note shall be construed, governed by and interpreted and
enforced in accordance with the laws of the Province of Ontario and the federal
laws of Canada applicable therein. The Maker irrevocably submits and agrees to
attorn to the Courts of the Province of Ontario in the event of any suit, action
or other legal proceeding in regards to this Note or any matter arising
therefrom.
In the event that any portion of this Note shall be declared by a
Court of competent jurisdiction to be invalid, illegal or unenforceable at law,
then such portion shall be deemed severed from this Note, and the remaining
portions shall remain in full force and effect and binding upon the Maker.
This Note shall be binding upon the Maker and its successors
(including but not limited to successors by amalgamation) and permitted assigns.
This Note shall enure to the benefit of 138 and its successors and permitted
assigns.
IN WITNESS WHEREOF the Maker has executed this Note.
BST ACQUISITION LTD.
By: __________________________________
Name: Xxxxxxx Xxxxxxx
Title: President
XXXXXX ROAD,
MISSISSAUGA
1. DEFINITIONS AND INTERPRETATION
(a) Unless there is something in the subject matter or context
inconsistent therewith, the following expressions shall have the
following meanings:
"ACQUISITION FINANCING COMMITMENT" means the commitment entered into
by the Borrower with a third-party lender for the purposes of
funding the acquisition of the Property from the Lender in the
amount of up to $4,000,000.
"ACQUISITION FINANCING SECURITY" means any security granted by the
Borrower to a third-party lender advancing funds to the Borrower for
purposes of the Borrower acquiring the Property from the Lender in
the amount of up to $4,000,000.
"ACQUISITION LENDER" means a third party lender providing financing
to the Borrower under the Acquisition Financing Commitment for
purposes of funding the acquisition of the Property.
"Act" means the Land Registration Reform Act, R.S.O. 1990, c.L.4, as
amended and/or restated from time to time.
"APPLICABLE LAWS" means all applicable federal, provincial or
municipal laws, statutes, regulations, rules, by-laws, policies and
guidelines, and all notices, proceedings, judgments, orders,
ordinances, directives, permits, authorizations, licenses or
requirements of every governmental authority having, in each case,
the force of law.
"BORROWER" means Steelbank Inc., its successors and permitted
assigns hereunder, if any.
"BUILDINGS" means the buildings and structures currently situate on
the Lands, including all improvements and all fixtures and other
appurtenances forming part thereof.
"BUSINESS DAY" means a day of the week other than Saturday, Sunday,
or any other day which is a statutory or municipal holiday in the
municipality where the head office of the Lender and/or the Property
are situate.
"CHARGE" means the charge set out herein.
"CLOSING DATE" means [o], 2005, being the date on which the Borrower
acquired title to the Property from the Lender pursuant to the terms
of the Purchase Agreement and on which this Charge is registered on
title to the Property.
"ENCUMBRANCE" means any mortgage, debenture, pledge, hypothec, lien,
charge, assignment by way of security, consignment, hypothecation,
security interest or other security agreement, trust or arrangement
having the effect of security for the payment of any debt, liability
or obligation, and "ENCUMBRANCES", "ENCUMBRANCER", "ENCUMBER" AND
"ENCUMBERED" shall have corresponding meanings.
"EVENT OF DEFAULT" means any one of the Events of Default set out in
Section 12 hereof and, if applicable, effective upon the expiry of
the notice period, if any, for the curing of such Event of Default
only to the extent and as expressly set out in Section 12.
"FIRST PAYMENT DATE" means [o], 2005.
"INDEBTEDNESS" means the aggregate of all monies and liabilities,
matured or not, whether present or future, direct or indirect,
absolute or contingent, now or hereafter owing or incurred, arising
under or in connection with the Promissory Note and the Charge,
including, without limitation:
(i) the Loan Amount, and
(ii) all interest thereon and compound interest as provided in this
Charge, and
(iii) any amount, cost, charge, expense and interest which has been
added to the Indebtedness under the terms of this Charge, and
(iv) any other amount, cost, charge, expense and interest otherwise
due and payable to the Lender hereunder or secured by this
Charge.
"INTEREST ADJUSTMENT DATE" means [o], 2005.
"INTEREST RATE" means the rate of eight percent (8%) per annum,
calculated and payable monthly, not in advance.
"LANDS" means the lands and premises legally described as Part of
Xxx 0, Xxxxxxxxxx 0 Xxxxx xx Xxxxxx Xxxxxx of the geographic
Township of Toronto, and Part of Xxxx 00, 00 xxx 00, Xxxx X00,
designated as Part 1, Plan 43R-967, subject to RO 1094644, TT173300,
TT175940, TT73395 and XX00000, Xxxx xx Xxxxxxxxxxx, Regional
Municipality of Peel, being the whole of PIN 13340-0023 (LT),
Province of Ontario, and municipally known as 0000 Xxxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxx.
"LEASED PREMISES" means the premises now or hereafter leased from
time to time pursuant to the Leases, if any.
"LEASES" means the leases, subleases, agreements to lease and
tenancy agreements in respect of or relating to the Property now or
hereafter entered into from time to time.
"LENDER" means 1387746 Ontario Inc.
"LOAN AMOUNT" means the principal sum of the Promissory Note, being
$1,200,000.
"MATURITY DATE" means [o], 2006.
"OBLIGATIONS" means all obligations of the Borrower to the Lender
under or in connection with the Promissory Note and the Charge.
"PAYMENT DATE" means the first (1st) day of each month.
"PERMITTED ENCUMBRANCES" means those encumbrances set out in
subsection Schedule "4.5(f)" of the Purchase Agreement and the
Acquisition Financing Security.
"PERSON" includes any individual, partnership, joint venture, trust,
unincorporated organization or any other association, corporation
and government or any department or agency thereof.
"PROMISSORY NOTE" means that certain promissory note in the original
principal amount equal to $1,200,000 dated the Closing Date and
issued by the Borrower in favour of the Lender in partial
consideration of the purchase price for purchase of the Property by
the Borrower from the Lender pursuant to the terms of the Purchase
Agreement.
"PROPERTY" refers collectively to the Lands and Buildings, together
with all buildings, structures and improvements hereafter built upon
or made to the Lands from time to time and all fixtures described
herein, and all other appurtenances thereto.
"PURCHASE AGREEMENT" means the agreement of purchase and sale
between the Borrower, as purchaser, and the Lender, as vendor, dated
February 11, 2005, pursuant to which the Borrower agreed to purchase
from the Lender and the Lender agreed to sell to the Borrower the
Property in consideration of, among other consideration, the
Promissory Note.
2
"REQUIREMENTS OF ENVIRONMENTAL LAW" means all requirements of the
common law and of statutes, regulations, by-laws, ordinances,
treaties, judgments and decrees, and (whether or not they have the
force of law) rules, policies, guidelines, orders, approvals,
notices, permits, directives and the like, of any federal,
territorial, provincial, regional, municipal or local judicial,
regulatory or administrative agency, board or governmental authority
relating to environmental or health or fire or safety matters, or
any of them, and the Property and the activities carried out thereon
(whether in the past, present or the future) including, but not
limited to, all such requirements relating to: (i) the protection,
preservation or remediation of the natural environment (the air,
land, surface water or groundwater); (ii)the generation, handling,
treatment, storage, transportation or disposal of or other dealing
with solid, gaseous or liquid waste; (iii) substances or conditions
that are prohibited, controlled or otherwise regulated or are
otherwise hazardous in fact (collectively "HAZARDOUS SUBSTANCES")
such as contaminants, pollutants, toxic, dangerous or hazardous
substances, toxic, dangerous or hazardous materials, designated
substances, controlled products, including without limitation,
wastes, subject wastes, urea formaldehyde foam type of insulation,
asbestos or asbestos-containing materials, polychlorinated byphenyls
("PCBs") or PCS contaminated fluids or equipment, explosives,
radioactive substances, petroleum and associated products,
underground storage tanks or surface impoundments; and (iv) the
securing protection, preservation and remediation of health, fire
and/or safety concerns.
"SECURITY" means all security granted pursuant to the Promissory
Note and the Charge.
"TAXES" means all taxes, rates, assessments, levies, liens and
penalties, municipal, local, parliamentary or otherwise that now are
or may hereafter be imposed, charged or levied upon or with respect
to the Property, and all taxes or charges levied in lieu thereof.
"TENANT(S)" means any tenant(s) under their respective Leases.
"TRANSFER" means any sale, transfer, assignment, conveyance or other
disposition of the Property, in whole or in part, or of any interest
therein save and except for the grant of the Acquisition Financing
Security and any sale, transfer, assignment, conveyance or other
disposition of the Property by the Acquisition Lender in the
exercise of its remedies pursuant to the Acquisition Financing
Security.
(b) Each obligation of the Borrower expressed in the Charge, even though
not expressed as a covenant, is deemed for all purposes to be a
covenant made with the Lender.
2. LAND REGISTRATION REFORM ACT
The parties hereby exclude from the Charge all of the covenants deemed to be
included by Section 7(1) of the Act, which covenants are hereby replaced by the
covenants and agreements contained herein.
3. SHORT FORMS OF MORTGAGES ACT
If any of the forms of words contained herein are also contained in Column One
of Schedule B of the Short Forms of Mortgages Act, R.S.O. 1980, c.474, as
amended and/or restated from time to time, and distinguished by a number
therein, the Charge shall be deemed to include and shall have the same effect as
if it contained the form of words in Column Two of Schedule B of the said Act
distinguished by the same number, and the Charge shall be interpreted as if the
Short Forms of Mortgages Act still applied to the Charge.
4. CHARGE
The Borrower charges by way of a fixed and specific mortgage and Charge to and
in favour of the Lender the Property as security for the payment to the Lender
of the Indebtedness and the performance of the Borrower's other Obligations
under the Charge and with a power of sale to be exercised after default as
hereinafter provided.
3
5. INTEREST
The Loan Amount shall bear interest at the Interest Rate both before and after
default, demand, maturity and judgment until paid.
6. PAYMENT
The Charge shall operate until all Indebtedness is paid in full to the Lender,
and all Obligations whose performance is secured by the Charge are performed, in
the manner provided in the Charge. The provisions relating to defeasance
contained in Subsection 6(2) of the Act are hereby expressly excluded from the
terms of the Charge.
Interest at the Interest Rate on the Loan Amount, computed from the Closing
Date, shall become due and be paid on the first day of each month following the
Closing Date to and including the Interest Adjustment Date. Thereafter, interest
at the Interest Rate on the Loan Amount shall become due and be paid on the
Payment Date, commencing on the First Payment Date.
The Charge shall be closed for the term of the Charge with no right of
prepayment in whole or in part, except as provided herein. Provided that the
Charge is not then in default the Borrower shall have the right, at any time
during the term of the Charge on five (5) Business Days prior written notice
(for the purposes of this paragraph hereinafter referred to as the "PREPAYMENT
NOTICE") to the Lender, to prepay the entire Loan Amount in whole or part
without bonus or penalty (the "PREPAYMENT AMOUNT") on the date stipulated in the
Prepayment Notice, which must be a Business Day but not otherwise, upon payment
to the Lender on such date the Prepayment Amount and all accrued interest at the
Interest Rate on the Prepayment Amount, together with all Indebtedness due and
owing hereunder to the Lender up to and including the date of prepayment.
7. TIMING OF PAYMENTS
All payments under the Charge shall be made before 3:00 p.m. on any day on which
payment is to be made. In the event the payment is made after 3:00 p.m. on any
particular day, it is understood and agreed that any such payment will be deemed
to have been made on the next following Business Day.
8. COMPOUND INTEREST
All interest payable hereunder on becoming overdue, and any amount, cost, charge
or expense that has been added to the Indebtedness under the terms of the
Charge, shall be treated (as to payment of interest thereon as aforesaid) as
principal and shall bear compound interest at the Interest Rate both before and
after default, demand, maturity and judgment until paid, and all such interest
and compound interest shall be added to the Indebtedness and secured by the
Charge. If any of the monies hereby secured are not paid when due, the Borrower
will, so long as any part thereof remains unpaid, pay interest thereon from day
to day.
9. INDEBTEDNESS
The Lender agrees that the Indebtedness bears interest at the Interest Rate
calculated and payable monthly, not in advance, both before as well as after
maturity, and both before as well as after default, and that the Lender has
entered into this Charge and has agreed to accept the Promissory Note in partial
satisfaction of the purchase price for the Property pursuant to the terms of the
Purchase Agreement in reliance upon the representations, warranties and
covenants of the Borrower and subject to the terms and conditions contained
herein and in the Promissory Note.
The Indebtedness shall be repaid in full together with all accrued and unpaid
interest accrued up to and including the Maturity Date.
The Lender shall maintain records of the Indebtedness due and owing by the
Borrower hereunder under the Promissory Note and such records shall constitute,
in the absence of manifest error, prima facia evidence of the said Indebtedness
and all details relating thereto. The failure of the Lender to correctly record
any such amount or date shall not, however, in any way affect the obligation of
the Borrower to repay the Indebtedness to the Lender in accordance herewith.
4
10. REPRESENTATIONS AND WARRANTIES
The Borrower makes the following representations and warranties to the Lender as
at the Closing Date:
(a) The Borrower has the power, capacity and authority required as of
the date hereof to enter into and perform its obligations under the
Promissory Note and the Charge to which it is or will be a party, to
own and lease its property and to carry on the business in which it
is engaged.
(b) Neither the execution nor the delivery of the Promissory Note and
the Charge by the Borrower, nor the consummation by it of the
transactions herein contemplated, nor the compliance by it with the
terms, conditions and provisions hereof will conflict with or result
in a breach of any of the terms, conditions or provisions of:
(i) any agreement, instrument or arrangement to which the Borrower
is a party, or by which the Borrower or any of its property is
or may be bound, or constitute a default thereunder, or result
thereunder in the creation or imposition of any security
interest, mortgage, lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of the
Borrower;
(ii) any judgment, order, writ, injunction or decree of any court,
relating to the Borrower; or
(iii) any Applicable Laws relating to the Borrower, its properties
or assets.
(c) The Promissory Note and the Charge, including the borrowing of
monies thereunder and the other obligations of the Borrower
thereunder have been duly authorized, executed and delivered by the
Borrower.
(d) The Borrower is a corporation duly amalgamated and subsisting under
the laws of the Province of New Brunswick and has the power,
capacity and authority required to perform its Obligations under the
Promissory Note and the Charge.
(e) The Borrower is not a non-resident of Canada within the meaning of
the Income Tax Act (Canada).
(f) The Borrower is not a party to any agreement or instrument which
materially adversely affects its ability to perform the Obligations
or which would have material adverse effects on the financial
condition of the Borrower or the value or use of the Property.
(g) The Borrower is not subject to any restriction which materially
adversely affects, or would in the future have a material adverse
effect on the properties, assets or condition, financial or
otherwise, of the Borrower or its ability to perform the
Obligations.
(h) Each of the Promissory Note and the Charge constitute a legal, valid
and binding obligation of the Borrower enforceable against it in
accordance with their terms, subject to applicable laws relating to
bankruptcy, insolvency and other similar laws affecting creditors'
rights generally and subject to general principles of equity.
(i) The Borrower has not received notice of any actions, suits or
proceedings pending or, to the knowledge of the Borrower,
threatened, at law or in equity or before any federal, provincial,
municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or before
any arbitrator of any kind, which involve a reasonable possibility
of any material adverse change in the financial condition of the
Borrower and, to the best knowledge of the Borrower, the Borrower is
not in default with respect to any judgement, order, writ,
injunction, decree, rule or regulation of any court, arbitrator or
federal, provincial, municipal or other governmental department,
5
commission, board, bureau, agency or instrumentality, domestic or
foreign, which would be materially adverse to the present or future
business or properties of the Borrower.
The representations and warranties herein are deemed to survive the
execution of this Charge and shall be deemed to be repeated as of the
Closing Date. The Lender shall be deemed to have relied upon such
representations and warranties at the time as a condition of completing
the sale of the Property to the Borrower on the Closing Date in accordance
with the provisions of the Purchase Agreement.
11. COVENANTS
The Borrower covenants and agrees with the Lender that:
(a) The Borrower shall fully observe and perform its obligations under
this Agreement, the Promissory Note and the Charge, and any other
agreements entered into by the Borrower with the Lender or made by
the Borrower in favour of the Lender in connection with the
Promissory Note and the Charge.
(b) The Borrower shall maintain its existence as a valid corporation
under the laws of the Province of New Brunswick and shall qualify
and remain duly qualified to do business and own or lease property
in said province and in Ontario.
(c) The Borrower shall comply with all Applicable Laws pertaining to the
Borrower and the Property.
(d) The Borrower will pay the Indebtedness to the Lender as and when
provided in the Promissory Note and the Charge without any
deduction, set-off, abatement or counterclaim.
(e) The Borrower shall pay the Taxes promptly as they fall due and will
forthwith provide the Lender with evidence satisfactory to the
Lender of payment thereof provided that the Borrower shall not enter
into any agreement with any taxing authority under which the due
date for payment of Taxes is extended beyond the calendar year in
which such Taxes would normally be due.
(f) The Borrower is the sole beneficial owner of an estate in fee simple
to the Property, subject to the Permitted Encumbrances and
Acquisition Financing Security only.
(g) The Borrower has the right to execute and deliver the Promissory
Note and the Charge and grant the Security.
(h) Upon taking possession of the Property after an Event of Default
and, if applicable, expiry of the notice period, if any, for the
curing of such Event of Default, only to the extent and as expressly
set out in this Charge, the Lender shall have quiet possession of
the Property, free and clear from any and all encumbrances, except
the Permitted Encumbrances and Acquisition Financing Security.
(i) The Borrower will execute such documents and further assurances of
the Property and take such action, all at its own expense, as may be
requested by the Lender, acting reasonably, to carry out the
intention of the Charge.
(j) The Borrower has not done any act to encumber the Property, save and
except for the Acquisition Financing Security. The Borrower shall
not, without the Lender's prior written approval, charge or
otherwise encumber the Property or any part thereof or interest
therein or permit any lien, charge or encumbrance thereon, save and
except for the Acquisition Financing Security.
(k) The Borrower shall inform the Lender of any circumstances, events,
actions, claims or changes which have or which may reasonably be
expected to have an adverse effect on the Borrower's financial
position or on the Property.
6
12. DEFAULT
(a) Each of the following events shall constitute an Event of Default
under this Charge effective upon the expiry of the notice period, if
any, for the curing of such Event of Default only to the extent and
as expressly set out herein:
(i) the Borrower fails to pay any amount of principal or interest
under the Promissory Note or this Charge when due and such
failure is not remedied within three (3) Business Days of
such due date; or
(ii) an Encumbrancer takes possession of all or a substantial
portion of the property of the Borrower by appointment of a
receiver, receiver-manager or otherwise unless the
appointment of such receiver, receiver-manager or other
officer with like powers is being disputed in good faith by
the Borrower and such proceedings effectively postpone
enforcement of any such appointment; or
(iii) a material adverse change occurs in the business, property,
financial condition, operation, affairs or prospects of the
Borrower as determined by the Lender, acting in good faith
and on commercially reasonable grounds; or
(iv) there is a change in the ownership or control of the Borrower
without the Borrower having first obtained the Lender's
written discretionary consent to do so; or
(v) there is a breach of the Acquisition Financing Security which
has not been corrected or otherwise satisfied in accordance
with its terms, subject to expiry of all applicable cure
periods thereunder, if any; or
(vi) if the Borrower defaults in the performance of or is in
breach of any covenant in the Promissory Note and the Charge,
the Borrower fails to commence to cure such default or breach
within five (5) Business Days after the Lender has given
notice in writing to the Borrower specifying the nature of
such default or breach and requiring that it be cured, or
thereafter the Borrower fails to continue to proceed
diligently to cure such default or breach; or
(vii) if a final judgment or judgments (not subject to appeal) is
or are rendered against the Borrower by a court or courts of
competent jurisdiction, which remains or remain undischarged
or unstayed for a period of sixty (60) days after the date on
which the right or rights to appeal has or have expired, as
the case may be; or
(viii) if the Borrower admits its inability to pay its liabilities
generally as they become due or makes a general assignment
for the benefit of its creditors or otherwise acknowledges
its insolvency or any proceeding is instituted by or against
the Borrower seeking to adjudicate it a bankrupt or insolvent
or seeking liquidation, winding up, dissolution,
reorganization, arrangement, adjustment, protection, relief
or composition of its debts under any law relating to
bankruptcy, insolvency, reorganization, moratorium or relief
of debtors or seeking the entry of an order for relief by the
appointment of a receiver, liquidator, trustee or other
similar official or for any substantial part of its property
and, if such proceeding has been instituted against the
Borrower without its consent or concurrence, such proceeding
has not been stayed or dismissed within thirty (30) days or
any of the actions sought in such proceeding (including the
entry of an order for relief or the appointment of a
receiver) are granted in whole or in part, or if a receiver
is privately appointed in respect of the Borrower or a
substantial part of its property; or
(ix) if any representation or warranty made or given herein or in
any document delivered or to be delivered to the Lender
pursuant hereto is false,
7
incorrect or lacking in any material facts at the time that it
is made, or given so as to make it materially misleading and
such representation or warranty remains incorrect in any
material respect for a period of five (5) Business Days after
written notice thereof has been given to the Borrower by the
Lender if capable of remedy within such time period, or, if
not capable of remedy within such time period, the Borrower
fails to commence to cure such default or breach within a
period of five (5) Business Days after written notice thereof
has been given to the Borrower by the Lender and thereafter
the Borrower fails to continue to proceed diligently to cure
such default or breach; or
(x) if the Borrower is in breach of its covenants contained in
Sections 13, 14 or 20 hereof.
(b) If any Event of Default occurs, the Indebtedness shall become and be
forthwith due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived
by the Borrower and the Security shall become immediately
enforceable and the Lender may take such action or proceedings in
compliance with applicable requirements of law as the Lender in its
sole discretion deems expedient to enforce the same, including the
enforcement of any of the Security, all without any additional
notice, presentment, demand, protest or other formality, all of
which are hereby expressly waived by the Borrower.
(c) The Lender shall not be under any obligation to the Borrower or any
other person to realize any collateral or enforce the Security or
any part thereof or to allow any of the collateral to be sold, dealt
with or otherwise disposed of. The Lender shall not be responsible
or liable to the Borrower or any other person for any loss or damage
upon the realization or enforcement of, the failure to realize or
enforce the collateral or any part thereof or the failure to allow
any of the collateral to be sold, dealt with or otherwise disposed
of or for any act or omission on its part or on the part of any
director, officer, agent, servant or advisor in connection with any
of the foregoing, save and except for the Lender's wilful misconduct
or gross negligence.
(d) No person dealing with the Lender or any agent of the Lender shall
be concerned to inquire whether the Security has become enforceable,
or whether the powers which the Lender is purporting to exercise
have become exercisable, or whether Obligations remain outstanding
upon the Security thereof, or as to the necessity or expediency of
the stipulations and conditions subject to which any sale shall be
made, or otherwise as to the propriety of any sale or other
disposition or any other dealing with the collateral charged by such
Security or any part thereof.
(e) Effective upon an occurrence of an Event of Default, and, if
applicable, for so long as such Event of Default is continuing only
with respect to those Events of Default which are subject to a cure
period as more particularly set out herein, the Borrower hereby
irrevocably constitutes and appoints any officer, employee, agent or
trustee of the Lender its due and lawful attorney with full power of
substitution in its name and on its behalf, during the continuance
of an Event of Default, to enforce any right, title or interest of
the Lender in, to or under the Security or any part thereof or any
obligation to the Borrower or remedy available to the Borrower. The
appointment is irrevocable to the maximum extent permitted by
applicable law.
(f) The rights and remedies of the Lender under the Promissory Note, the
Charge and the Security 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 the Lender or any right or remedy for
a default or breach of any term, covenant condition or agreement
herein contained shall not be deemed to be a waiver of or to alter,
affect or prejudice any other right or remedy or other rights or
remedies to which the Lender may be lawfully entitled for the same
default or breach, any waiver by the Lender of the strict
observance, performance or compliance with any term,
8
covenant, condition or agreement herein contained, and any
indulgence granted by the Lender shall be deemed not to be a waiver
of any subsequent default.
(g) In addition to and not in limitation of any rights now or hereafter
granted under applicable law, if the Indebtedness become due and
payable pursuant to Section 12(b) hereof, the Lender may at any time
and form time to time without notice to the Borrower or any other
person, any notice being expressly waived by the Borrower, set off
and compensate and apply any and all indebtedness at any time owing
by the Lender to or for the credit of or the account of the Borrower
against and on account of the Indebtedness.
13. HAZARDOUS SUBSTANCES
(a) The Borrower represents, warrants and covenants that as at the
Closing Date, to the best of its knowledge, information and belief,
after reasonable inquiry:
(i) no Hazardous Substances will in the future be used, stored,
processed, manufactured, handled or discharged in, on, under
or from the Property by the Borrower except in accordance with
the Requirements of Environmental Law and provided that such
Hazardous Substances have heretofore been disclosed to and
approved by the Lender in writing;
(ii) the Property shall not be used by the Borrower as a waste
disposal site or coal gasification site;
(iii) all permits, licences, certificates, approvals,
authorizations, registrations or the like required by the
Requirements of Environmental Law for the operation on the
Property of the business of the Borrower have been obtained
and are valid, in full force and effect and in good standing;
(iv) no environmental damage will result from the use of the
Property by the Borrower; and
(v) there are no convictions (or prosecutions settled prior to
conviction) or outstanding or threatened investigations,
claims, work orders, notices, directives or other similar
remedial actions against the Borrower in relation to any
Requirements of Environmental Law.
(b) The Borrower covenants that the Borrower will:
(i) remedy forthwith, at its own expense, any environmental damage
that may occur or be discovered on the Property in the future;
(ii) comply with and monitor, on a regular basis, its compliance
and, subject to the Leases the compliance of any tenant,
subtenant, assignee or other occupant of the Property with all
Requirements of Environmental Law;
(iii) provide to the Lender upon request such information,
certificates, or statutory declarations as to compliance with
the provisions hereof and all Requirements of Environmental
Law and conduct such environmental audits or site assessments
as may be reasonably necessary to ensure compliance with the
Requirements of Environmental Law, and provide to the Lender
copies of any environmental, soils, safety or health reports
or studies in respect of the Property that it receives or
possesses from time to time; and
(iv) permit the Lender to conduct inspections and appraisals of all
or any of its records, business and Property at any time, and
from time to time during normal business hours upon
forty-eight (48) hours advance notice to monitor compliance
with the Requirement of Environmental Law.
(c) The Borrower further covenants that the it will be liable for and
fully indemnify the Lender for any and all costs, expenses, damages
or liabilities (including reasonable legal fees on a solicitor and
his own client basis and any
9
environmental remediation costs reasonably incurred by the Lender)
directly or indirectly arising out of or attributable to the
non-compliance of the Borrower or its tenants, employees or
authorized agents with the Requirements of Environmental Law and all
such costs, expenses, damages or liabilities shall be secured
hereby, and all such liability and indemnity shall survive the
repayment of the Indebtedness, foreclosure upon the Charge, and/or
any other extinguishment of the Obligations of the Borrower under
the Charge and any other exercise by the Lender of any remedies
available to it against the Borrower.
14. INSURANCE
The Borrower shall insure the buildings, structures, chattels, fixtures and
equipment, and improvements on the land forming part of the Property and keep
them constantly insured against loss or damage on an all risks basis, including
the perils of flood, earthquake, building foundations coverage and building
by-laws insurance coverage, and against loss or damage by such other risks,
hazards or perils as the Lender acting reasonably may require to be protected by
insurance, to the full extent of their insurable value on a stated amount
replacement cost basis, both during the period of construction and thereafter.
Without limiting the foregoing, this covenant shall include comprehensive broad
form boiler insurance (including unfired pressure vessels and air conditioning
equipment, if any, and including repair and replacement and use and occupancy
coverage), rental and public liability insurance and, during any period of
construction, shall include project performance and completion insurance,
including coverage for labour and material bonds, all such insurance to be in an
amount satisfactory to the Lender, acting reasonably. Prior to the Closing Date,
the Borrower shall deliver to the Lender a policy or policies or insurance
binders or certificates evidencing such insurance, and at least thirty (30) days
prior to the expiry of a policy or at least thirty (30) days prior to the date
fixed for cancellation of a policy, should notice of cancellation be given, the
Borrower shall deliver to the Lender evidence of renewal or replacement in a
form satisfactory to the Lender, acting reasonably.
Every policy of insurance or insurance binders or certificates shall be
acceptable to the Lender as to form and content, acting reasonably shall be
signed by the insurer and shall be placed with such insurer and through such
agency as may be financially sound, reputable and approved of by the Lender,
acting reasonably and shall not contain a co-insurance clause but shall contain
a stated amount endorsement; the loss under each policy shall be made payable to
the Lender pursuant to an Insurance Bureau of Canada or a Boiler and Machinery
Insurance Association approved mortgage clause with preference in its favour
over any claim of any other Person; and each policy shall be retained by the
Lender during the currency of the Charge. Should an insurer at any time cease to
have the approval of the Lender, acting reasonably or in the event of failure on
the part of the Borrower to execute any obligation undertaken under this
paragraph, the Lender, acting reasonably may effect such insurance as it deems
proper and the Borrower covenants that it will repay to the Lender all premiums
paid by it together with interest thereon at the Interest Rate and such premiums
and interest shall be added to the Indebtedness and secured by the Charge.
In case of material loss or damage, the Borrower shall promptly notify the
Lender and the Lender shall have the right to receive the proceeds of each
policy, as its interest may appear to the extent of the Obligations of the
Borrower hereunder, and to apply them wholly or in part in reduction either of
the Indebtedness remaining unpaid notwithstanding that the Indebtedness or any
part thereof may not otherwise be due and payable under the Charge at that time,
and/or in repayment of any reasonable legal expenses and costs on a solicitor
and his own client basis reasonably incurred by the Lender in connection with
the disbursement or application of such insurance proceeds, and/or of any other
sums owing to the Lender and/or in meeting costs of repair or reconstruction.
The Borrower shall furnish, at its own expense, all necessary proofs and do all
things reasonably necessary to enable the Lender to obtain payment of the
insurance proceeds to the Lender in circumstances in which the Lender is so
entitled and the production of the Charge shall be sufficient authority for the
insurer to pay such proceeds to the Lender and the insurer is hereby directed to
pay same to the Lender to the extent so entitled.
15. WASTE, MAINTENANCE, REPAIR AND INSPECTION
The Borrower covenants and agrees with the Lender that the Borrower will not
permit waste to be committed or suffered on the Property, and the Borrower will
not remove or attempt to
10
remove from the Property any building, structure or improvement forming part of
the Property owned by the Borrower and the Borrower shall use its commercially
reasonable best efforts to refrain from doing anything or allowing anything to
be done which would result in an impairment or diminution of the value of the
Property in any material respect. The Borrower will maintain such buildings,
structures, or other improvements in good order and repair as a prudent owner of
similar property would.
If the Borrower shall neglect to keep the Property in good condition and repair
as aforesaid, or shall commit or permit any act of waste on the Property, save
and except for the construction of the Buildings, or shall attempt to remove any
building, structure or improvement forming part of the Property owned by the
Borrower resulting in a material adverse affect to the Project, all monies
hereby secured shall, at the option of the Lender, forthwith become due and
payable, and in default of payment of same with interest, as in the case of
payment before maturity, the powers of entering upon and leasing or selling
hereby given to the Lender and all other remedies herein contained may be
exercised forthwith.
16. ALTERATIONS
The Borrower covenants and agrees with the Lender that it will not make or
permit to be made any material alterations or additions in the Property without
the consent of the Lender.
17. OBSERVANCE OF LAWS
The Borrower covenants and agrees with the Lender that it will promptly observe,
perform, execute and comply with all laws, rules, requirements, orders,
directions, ordinances and regulations of every governmental authority or agency
concerning the Property (including without limitation all Requirements of
Environmental Law) as well as with all private covenants and restrictions
affecting the Property and the Borrower shall, at its own cost and expense, make
any and all repairs, alterations and improvements ordinary or extraordinary,
which may be required at any time hereafter by any such present or future law,
rule, requirement, order, direction, ordinance, regulation, covenant or
restriction.
18. ASSIGNMENT OF RENTS AND/OR LEASES
As additional collateral security for payment of the Indebtedness, the Borrower
hereby assigns and sets over unto the Lender by way of collateral security all
rents, and other sums payable from time to time under leases of the Property or
any part thereof whether presently existing or arising in the future, together
with the benefit of all covenants, guarantees and/or indemnities contained in
the said leases or collateral thereto, in favour of the Borrower; provided that
nothing herein contained shall be deemed to subordinate any of the rights of the
Lender to any such lease or to make the Lender responsible for the collection of
such rents or any part thereof or for the performance or enforcement of any
covenants, guarantee and/or indemnities contained in any such lease or
collateral thereto, and that the Lender shall not, by virtue of these provisions
or the collection of rents and other sums, be deemed a Lender or
mortgagee-in-possession of the Property; and provided further that the Lender
shall be liable to account for only such monies as may actually come into its
hands by virtue of these provisions less proper collection charges and that
such monies when so received by the Lender may be applied on account of the
Indebtedness and pending application by the Lender, the same shall be deemed
to form part of the Property and be subject to the charge hereby created and
shall be held by the Lender as additional security for the repayment of the
Indebtedness; and provided further that the Lender will not cause the tenants
under the said leases or any of them to pay rent to the Lender unless and until
an Event of Default has occurred or has been deemed to have occurred under the
provisions contained in the Charge and, if applicable, is then continuing after
expiry of all applicable cure periods, if any, only to the extent and as
expressly set out in Section 12; and the Borrower covenants with the Lender that
the Borrower will perform all of the lessor's covenants and Obligations
contained in all such leases and that it will not accept any prepayment of rent
or other sums owing under any such lease in excess of one (1) month plus the
final month's rent (if prepayment of the final month's rent is provided for in
the lease), and will not amend or accept a surrender of any such lease without
first obtaining the Lender's consent in writing not to be unreasonably or
arbitrarily withheld or delayed.
The Borrower covenants and agrees to execute and deliver to the Lender from time
to time forthwith on request by the Lender, acting reasonably, assignments of
leases and assignments of
11
rents with respect to any and all leases and agreements to lease of all or any
portion of the Property now or hereafter from time to time granted or entered
into by the Borrower, all of such assignments to be held by the Lender as
further security for payment of the Indebtedness. Such assignments shall be
acceptable to the Lender as to form and content, acting reasonably, and shall
include the benefit of all guarantees or indemnities given or to be given in
respect of the Obligations of tenants under the said leases to the extent
assignable.
19. CONSTRUCTION LIEN ACT
The Borrower covenants and agrees that all improvements to the Property shall
comply in all respects with the provisions of the Construction Lien Act, R.S.O.
1990, c.C.30, as amended and/or restated from time to time, and if a
construction lien is filed against all or part of the Property, then within
thirty (30) Business Days after receipt of written notice thereof, the Borrower
shall have the lien vacated or discharged. If the Borrower fails to do so, then
in addition to its other rights provided herein, the Lender shall be entitled to
pay into court a sum sufficient to obtain an order vacating such lien or to
purchase a financial guarantee bond in the form prescribed under the said Act.
All reasonable costs, charges and expenses reasonably incurred by the Lender in
connection with such payment into court or in connection with the purchase of a
financial guarantee bond or in connection with any legal proceedings described
below, together with interest thereon at the Interest Rate, shall be added to
the Indebtedness and secured by the Charge and shall be payable forthwith by the
Borrower to the Lender. If any person that performs work, labour or services or
that provides materials to or for the Property, names the Lender as a party to
any legal proceedings which it takes to enforce a construction lien or trust
claim, then the Borrower shall reimburse the Lender for, and indemnify the
Lender against any and all reasonable legal expenses (on a solicitor and his own
client basis) reasonably incurred by the Lender in such legal proceedings.
20. FIXTURES
It is the intention of the parties hereto that the Buildings forming part of the
Property owned by the Borrower form part of the security for the full amount of
the monies secured by the Charge. It is hereby mutually covenanted and agreed by
and between the parties hereto that all erections, buildings, improvements,
machinery, plant, furnaces, boilers, oil burners, stokers, electric light
fixtures, plumbing and heating equipment, refrigeration equipment, air
conditioning and cooling equipment, screen doors and windows, gas and electric
stoves and water heaters, floor coverings, window coverings, and all apparatus
and equipment appurtenant thereto, which are now or which shall hereafter be
placed or installed upon the Property, save and except for those of any Tenant
of the Project are or shall thereafter be deemed to be fixtures and an accession
to the freehold and a part of the Property as between the parties hereto, their
heirs, executors, administrators, successors, legal representatives and assigns,
and all persons claiming by, through or under them, and shall be subject to the
Charge.
21. PRIOR ENCUMBRANCES, ETC.
It is hereby agreed, that the Lender may pay the amount of any encumbrance,
lien, claim or charge now or hereafter existing, arising or claimed upon or
against the Property having priority, or purporting to have priority, over the
Charge, including any Taxes, but excluding the Acquisition Financing Security
and may pay all reasonable costs, charges and expenses including reasonable
legal costs, calculated as between solicitor and his own client, whether or not
any action or any other proceeding is taken, which may be reasonably incurred in
taking, recovering, protecting and keeping possession of the Property and/or
collecting all or any portion of the Indebtedness payable by the Borrower under
the Charge, and all reasonable costs incurred in preserving the priority of the
Lender hereunder and in defending all claims against that priority, including
all reasonable amounts, costs, charges and expenses reasonably incurred by the
Lender as a consequence of the Borrower's default hereunder, and all such
reasonable amounts, costs, charges and expenses so paid shall, together with
interest thereon at the Interest Rate, be added to the Indebtedness and secured
by the Charge, and shall be payable forthwith by the Borrower to the Lender in
accordance with the provisions of this Charge. In the event of the Lender paying
the amount of any such encumbrance, lien, claim or charge, Taxes, either out of
the monies advanced under the Charge or otherwise, it shall be entitled and
subrogated to all the rights, equities and securities of the Person so paid,
without the necessity of a formal assignment, to the extent permitted under law
and the Lender is hereby authorized to retain any discharge thereof, without
registration, if it thinks proper to do so.
12
22. POWER OF SALE, ETC.
Provided that the Lender, upon an Event of Default which, if applicable,
continues after the expiry of the notice period, if any, for the curing of such
Event of Default only to the extent and as expressly set out in the Charge,
which continues for fifteen (15) days thereafter, may on thirty five days notice
enter on and sell the Property or any part thereof; and it is agreed that such
notices shall be given in such manner and to such Persons as may be lawfully
required at the time when such notices are given and in the absence of any such
requirement and/or to the extent that such requirements shall not be applicable,
such notices may be effectually given either by leaving the same with an adult
person on the Property, if occupied, or by placing it thereon if unoccupied, or
at the option of the Lender by mailing the same in a registered letter addressed
to the Borrower's last known address or by publishing the same once in a
newspaper published in the municipality in which Property are situate and shall
be sufficient though not addressed to any person or persons by name or
designation and notwithstanding any person or persons to be affected thereby may
be unborn, unascertained or under disability.
The Lender may sell the Property or any part thereof by public auction or
private contract, or partly one or partly the other; and the proceeds of any
sale hereunder may be applied in payment of any reasonable costs, charges and
expenses reasonably incurred about taking, recovering or keeping possession of
the Property or by reason of non-payment or procuring payment of the
Indebtedness or otherwise, including a reasonable allowance for the time and
effort of the Lender's employees; and subject to compliance with all applicable
laws the Lender may sell any part of the Property on such terms as to credit and
otherwise as shall appear to it most advantageous and for such prices as can
reasonably be obtained therefor and may make any stipulations as to title or
evidence or commencement of title or otherwise which it shall deem proper; and
may buy in or rescind or vary any contract for the sale of the whole or any part
of the Property and resell without being answerable for loss occasioned thereby;
and in the case of a sale on credit the Lender shall be bound to account to
subsequent encumbrancers and to the Borrower for only such monies as have been
actually received from purchasers after the satisfaction of the claims of the
Lender and for any of such purposes may make and execute all agreements and
assurances as it shall think fit; and that any purchaser shall not be bound to
see to the propriety or regularity of any sale or be affected by express notice
that any sale is improper; and that no want of notice or publication when
required hereby shall invalidate any sale hereunder.
The Lender may sell as aforesaid without entering into possession of the
Property, and when it desires to take possession it may break locks and bolts as
it may in its discretion see fit subject to compliance with applicable laws.
Provided that the title of a purchaser upon a sale made in professed exercise of
the above power shall not be liable to be impeached on the ground that no case
had arisen to authorize the exercise of such power or that such power had been
improperly or irregularly exercised, or that such notice had not been given, but
any person damnified or injured by an unauthorized, improper or irregular
exercise of the power shall have his remedy against the person exercising the
power in damages only.
23. DISTRESS
Provided that the Lender may distrain for arrears of interest and for arrears of
principal and for any other monies lawfully charged against the Property in the
same manner as if the same were arrears of interest.
24. ACCELERATION
In addition to the Lender's other rights under the Charge, at law, in equity, or
otherwise (including the right to require payment of the Indebtedness or any
part thereof) as hereinbefore set out, but subject to compliance with all
applicable laws, the Indebtedness shall, at the option of the Lender, become
immediately due and payable upon the occurrence of an Event of Default, which,
if applicable, is then continuing upon the expiry of all applicable cure
periods, if any, only to the extent and as expressly set out in this Charge.
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25. NO MERGER ON JUDGMENT
It is hereby agreed, that the taking of a judgment or judgments on any of the
covenants herein contained shall not operate as a merger of the said covenants
or affect the Lender's right to interest at the rate and times herein provided;
and further that said judgment shall provide that interest thereon shall be
computed at the Interest Rate and in the same manner as herein provided until
the said judgment shall have been fully paid and satisfied.
26. POSSESSION
Until the Security hereby constituted shall have become enforceable under the
terms of this Charge, the Borrower shall have quiet possession of the Project,
subject to the terms of this Charge. The Borrower covenants and agrees with the
Lender that upon an Event of Default which, if applicable, is effective upon the
expiry of the notice period, if any, for the curing of such Event of Default
only to the extent and as expressly set out in this Charge, the Lender may at
its sole option and at such time or times as it may deem necessary and without
the concurrence of any Person, but subject to compliance with all applicable
laws, enter into possession of the Property and may complete the construction
thereof, repair any buildings, structures or improvements forming part of the
Property, inspect, take care of, and lease the Property for such term and
subject to such provisions as it may deem advisable or expedient (including
providing any leasehold improvements the Lender deems necessary, in its sole
discretion, to lease the Property), collect the rents of, and manage the
Property as it may deem expedient, and all reasonable costs, charges and
expenses reasonably incurred by the Lender in connection with the exercise of
any such reasonable rights (including reasonable allowances for the time,
service and effort of any officer of the Lender or other person specifically
appointed for the above purposes) shall, together with interest thereon at the
Interest Rate, be added to the Indebtedness and secured by the Charge and shall
be forthwith payable by the Borrower to the Lender in accordance with the
provisions of this Charge. Any lease made by the Lender while in possession of
the Property shall continue for the full term and any permitted renewals thereof
notwithstanding the termination of the Lender's possession.
27. RECEIVER
It is hereby agreed that at any time and from time to time when there shall be
an Event of Default under the provisions of the Charge, which, if applicable, is
effective upon the expiry of the notice period, if any, for the curing of such
Event of Default only to the extent and as expressly set out in this Charge, the
Lender may, with or without entry into possession of the Property or any part
thereof, and whether before or after such entry into possession, and subject to
comparisons with all applicable laws, appoint a receiver or manager, or receiver
and manager (herein called the "RECEIVER") of the Property or any part thereof
and of the rents and profits thereof or of only the rents and profits thereof,
and with or without security, and may from time to time by similar writing
remove any Receiver with or without appointing another in his stead and, in
making any such appointment or removal, the Lender shall be deemed to be acting
as the agent or attorney for the Borrower. Upon the appointment of any Receiver
or Receivers from time to time, the following provisions shall apply:
(a) a statutory declaration of an officer of the Lender as to default
under the Charge shall be conclusive evidence thereof for the
purposes of the appointment of a Receiver;
(b) every Receiver shall be the agent or attorney of the Borrower (whose
appointment as such shall be revocable only by the Lender) for the
collection of all rents and profits falling due and becoming payable
in respect of the Property or any part thereof whether in respect of
any tenancies created in priority to the Charge or subsequent
thereto, or otherwise;
(c) every Receiver may, in the discretion of the Lender, be vested with
all or any of the powers and discretions of the Lender;
(d) the rights and powers conferred herein in respect of the Receiver
are supplemental to and not in substitution of any other rights and
powers which the Lender may have;
14
(e) the Lender may from time to time fix the reasonable remuneration for
every Receiver, who shall be entitled to deduct the same out of
revenue or sale proceeds of the said Property;
(f) every Receiver shall so far as concerns responsibility for its acts
or omissions, be deemed the agent or attorney of the Borrower and in
no event the agent of the Lender;
(g) the appointment of every Receiver by the Lender shall not incur or
create any liability on the part of the Lender to the Receiver or to
the Borrower or to any other Person in any respect, and such
appointment or anything which may be done by any Receiver or the
removal of any Receiver or the termination of any receivership shall
not have the effect of constituting the Lender a Lender or
mortgagee-in-possession in respect of the Property or any part
thereof;
(h) every such Receiver shall from time to time have the power to lease
any portion of the Property which may become vacant, for such term
and subject to such provisions as it may deem advisable or
expedient, subject to the restrictions on leasing contained in any
existing leases or agreements to lease affecting any of the
Property, and in so doing, every Receiver shall act as the attorney
or agent of the Borrower and shall have authority to execute under
seal any lease of any such premises in the name of and on behalf of
the Borrower, and the Borrower agrees to ratify and confirm whatever
any Receiver may do in the Property;
(i) every Receiver may make such arrangements, at such time or times as
it may deem necessary without the concurrence of any other persons,
for the repairing, finishing, adding to, or putting in order of the
Property, including without restricting the generality of the
foregoing, completing the construction of any building or buildings,
structures, services or improvements on the Property left in an
unfinished state, and constructing or providing for leasehold
improvements notwithstanding that the resulting cost may exceed the
Loan Amount, and the Receiver shall have the right to register plans
of subdivision and condominium declarations and descriptions in
respect of the Property as well as the right to take possession of
and use or permit others to use all or any part of the Borrower's
materials, supplies, plans, tools, equipment (including appliances
on the Property) and property of every kind and description;
(j) every Receiver shall have full power to manage, operate, amend,
repair or alter the Property and the buildings and improvements
thereon or any part thereof in the name of the Borrower for the
purpose of obtaining rental and other income from the Property or
any part thereof;
(k) no Receiver shall be liable to the Borrower to account for monies
other than monies actually received by it in respect of the Property
and out of such monies so received from time to time every Receiver
shall, in the following order pay:
(l) its remuneration aforesaid,
(i) all Obligations, costs and expenses made or incurred by it,
including but not limited to, any expenditures in connection
with the management, operation, amendment, repair,
construction or alteration of the Property or any part
thereof,
(ii) interest, principal and other monies which may, from time to
time, be or become charged upon the Property in priority to
the Charge, including all Taxes,
(iii) to the Lender, all Indebtedness, to be applied in such order
as the Lender in its discretion shall determine, and
(iv) subject to subparagraph (iv) above, at the discretion of the
Receiver, interest, principal and other monies which may from
time to time constitute a charge or encumbrance on the
Property subsequent in priority or subordinate to the interest
of the Lender under the Charge,
15
and every Receiver may in its discretion retain reasonable
reserves to meet accruing amounts and anticipated payments in
connection with any of the foregoing and further any surplus
remaining in the hands of every Receiver, after payments made
and such reasonable reserves retained as aforesaid, shall be
payable to the Borrower;
(v) the Lender may at any time and from time to time terminate any
receivership by notice in writing to the Borrower and to any
Receiver; and
(m) save as to monies payable to the Borrower pursuant to subparagraph
(k) of this paragraph, the Borrower hereby releases and discharges
the Lender and every Receiver from every claim of every nature,
whether sounding in damages for negligence or trespass or otherwise,
which may arise or be caused to the Borrower or any person claiming
through or under it by reason or as a result of anything done by the
Lender or any Receiver under the provisions of this paragraph,
unless such claim be the direct and proximate result of bad faith or
gross neglect.
28. TRANSFERS
A Transfer of the Property by the Borrower is prohibited. In the event that a
Transfer occurs, the outstanding Indebtedness shall immediately become due and
payable.
If the Borrower is a corporation, any transfer or issue by sale, assignment,
bequest, inheritance, operation of law or other disposition, or by subscription,
from time to time of all or any part of the shares in the capital of the
Borrower to any Person or group of Persons other than the Lender or an entity
affiliated with the Lender resulting in a change in control of the Borrower
shall be deemed to be a Transfer within the meaning of the Charge.
29. RELEASES
It is hereby agreed that the Lender may at all times at its discretion and
subject to the provisions of the Planning Act, R.S.O. 1990, c.P.13, as amended
and/or restated from time to time, release any part or parts of the Property
from the security of the Charge or any other security for the Indebtedness
either with or without any consideration therefor, without thereby releasing any
Person from the Charge or from any of the covenants herein contained, and no
such release shall diminish or prejudice this Charge or such other security as
against the portion of the Property remaining unreleased.
30. SALES
It is hereby agreed that no sale or other dealing by the Borrower with the
Property or any part thereof, whether with the consent or approval of the Lender
or not, shall in any way change the liability of the Borrower or in any way
alter the rights of the Lender as against the Borrower or any other Person
liable for payment of the Indebtedness, save and except as otherwise expressly
agreed to by the Lender in writing
31. EXTENSION OF TIME
No extension of time given by the Lender to the Borrower, or anyone claiming
under the Borrower, or any other dealing by the Lender with the owner of the
Property, shall in any way affect or prejudice the rights of the Lender against
the Borrower or any Covenantor or any other person liable for the payment of the
Indebtedness.
32. DISCHARGE
This Charge and the security interest granted in respect of the Collateral
(defined below), and all of the Lender's right, title and interest in and to the
property, undertaking and assets subject to the Security, including, without
limitation, the Project (collectively, the "COLLATERAL") shall terminate upon
satisfaction of the Obligations (registration of a discharge of the Charge from
title to the Property being conclusive evidence of such satisfaction) and upon
such termination, all rights, privileges and benefits granted hereunder,
including without limitation, the Security, shall terminate and be of no further
force or effect and the Borrower shall be forever released and discharged from
any and all Obligations. Furthermore, upon such termination, the Lender shall
forthwith deliver to the Borrower all Collateral and other documents held by the
Lender pursuant
16
to this Charge, if any, and all necessary discharges and releases of the
Security granted hereby as may be requested by the Borrower.
The Lender shall have a reasonable time after payment of the Indebtedness within
which to prepare and execute a discharge of the Charge, and interest as
aforesaid shall continue to run and accrue until actual payment in full of the
Indebtedness has been received by the Lender.
33. EXPROPRIATION
It is hereby agreed that if the Property in their entirety or any material part
thereof shall be expropriated by any government authority, body or corporation
having powers of expropriation, the Indebtedness shall, at the Lender's option,
forthwith become due and payable, together with interest thereon at the Interest
Rate to the date of payment. Further and without limiting any of the foregoing,
in the event that any portion of the Property shall be purchased, acquired by
agreement, or otherwise taken for any public work whatsoever pursuant to any
applicable legislation or regulation, then, and in such event any and all
consideration or compensation whatsoever payable to the Borrower or anyone
claiming an interest under or through the Borrower shall be payable to and shall
be paid to the Lender accordingly, and further any such compensation paid to or
to the order of or received by the Borrower shall be and be deemed to be held in
trust for the Lender.
34. WAIVER
It is understood and agreed that a waiver in one or more instances of any of the
terms, covenants, conditions or provisions hereof or of the Obligations secured
by the Charge shall apply to the particular instance or instances and at the
particular time or times only. And no such waiver shall be deemed a continuing
waiver, but all of the terms, covenants, conditions and other provisions of the
Charge and of the Obligations secured thereby shall survive and continue to
remain in full force and effect.
35. PRIORITY OF EXTENSION AGREEMENTS
It is understood and agreed that any agreement for the extension of the time of
payment of the Indebtedness or any part thereof and any renewal of the term of
the Charge made at, before or after maturity, and prior to the execution of a
discharge of the Charge, altering the term, Interest Rate (whether increased or
decreased), the amount of the payments of principal, interest or other monies
owing and secured by the Charge or any other provision, covenant or condition
hereof, whether made with the Borrower named herein or a subsequent owner of the
Property (and whether or not consented to by the Borrower named herein or any
successor in title if made with a subsequent owner), need not be registered in
any land registry office but shall be effectual and binding upon the Borrower
and upon every subsequent mortgagee, encumbrancer or other person claiming an
interest in the Property or any part thereof.
The Borrower shall, forthwith on request therefor by the Lender, provide or
cause to be provided to the Lender, at the Borrower's expense, all such
postponements and other assurances as the Lender may require to ensure or
confirm the effect and priority of any such agreement. All extensions and
renewals (if any) shall be done at the Borrower's expense (including, without
limitation, payment of Lender's legal expenses on a solicitor and his own client
basis). No such extension or renewal, even if made by a successor in title to
the Borrower named herein, shall in any way release or abrogate or render
unenforceable the covenants or Obligations of the Borrower named herein, or any
subsequent owner, which shall continue notwithstanding such extension or
renewal. Provided that nothing contained in this provision shall confer any
right of renewal or extension upon the Borrower.
36. SEVERABILITY
In the event any one or more of the provisions contained in the Charge shall for
any reason be held by a court of competent jurisdiction to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall, at the option of the Lender, be severable from and shall not affect any
other provision of the Charge, but the Charge shall be construed as if such
invalid, illegal or unenforceable provision had never been contained in the
Charge.
17
37. INTERPRETATION AND HEADINGS
The words "HERETO", "HEREIN", "HEREOF", "HEREBY", "HEREUNDER" and similar
expressions refer to the whole of the Charge and not to any particular paragraph
or other portion thereof and extend to and include any and every document
supplemental or ancillary hereto or in implementation hereof. Words in the
singular include the plural and words in the plural include the singular. Words
importing the masculine gender include the feminine and neuter genders where the
context so requires. Words importing the neuter gender include the masculine and
feminine genders where the context so requires. Whenever two or more persons are
under a liability hereunder such liability shall be both joint and several. The
headings do not form part of the Charge and have been inserted for convenience
of reference only.
38. SUCCESSORS AND ASSIGNS
Every reference in the Charge to a party hereto shall extend to and include the
successors and assigns of such party. The Charge shall enure to the benefit of
and be binding upon the successors and assigns of the parties hereto.
39. NOTICE
Any demand, notice or other communication to be given in connection with this
debenture must be given in writing and may be given by personal delivery, by
registered mail or by electronic means of communication, addressed to the
recipient as follows:
to the Borrower at: Steelbank Inc.
X.X. Xxx 00000
Xxxxx Xxxxxx, Xxxxxxxx
X.X.X. 00000
Attention: President
Telecopier: [-]
with a copy to: STIKEMAN ELLIOTT LLP
000 Xxx Xxxxxx
0000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxxx
Telecopier: (000)000-0000
and to the Lender at: 1387746 ONTARIO INC.
c/o Bolton Steel Tube Co. Ltd.
000X Xxxxxxx Xx.
Xxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxx
Telecopier: [-]
with a copy to: WEIRFOULDS LLP
Suite 1600, The Exchange Tower
000 Xxxx xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxx Xxxxxxxx
Telecopier: (000)000-0000
or such other address, individual or electronic communication number as may be
designated by notice given by any party to the other. Any demand, notice or
other communication given by personal delivery will be conclusively deemed to
have been given on the day of actual delivery thereof and, if given by
registered mail, on the third Business Day following the deposit thereof in the
mail and, if given by electronic communication, on the day of transmittal
thereof if given during the normal business hours of the recipient and on the
next Business Day during which such normal business hours next occur if not
given during such hours on any such day. If the
18
party giving any demand, notice or other communication knows or ought reasonably
to know of any difficulties with the postal system that might affect the
delivery of mail, any such demand, notice or other communication must not be
mailed but must be given by personal delivery or by electronic communication.
40. FAX AND COUNTERPARTS
This Charge may be executed in counterparts, each of which when executed and
delivered shall be deemed to be an original, and such counterparts together
shall constitute one and the same agreement. For the purposes of this Section,
the delivery of a facsimile copy of an executed counterpart of this Charge shall
be deemed to be valid execution and delivery of this Charge.
41. SUBORDINATION
The Lender shall, upon receipt of written request from the Borrower, at the
Borrower's sole cost and expense, provide a subordination and postponement
agreement, in a form acceptable to the Lender and the Acquisition Lender, both
acting reasonably wherein the priority of the Lender's interest pursuant to the
Security (including this Agreement) shall be subordinated and postponed to the
priority of the Acquisition Financing Security delivered by the Borrower in
accordance with the Acquisition Financing Commitment.
42. CROSS PAYMENT / SATISFACTION
Any payment on account of this Charge shall constitute an equal and
contemporaneous payment on account of the Promissory Note and vice-versa such
that in no event shall the principal and interest payable under this Charge at
any time exceed the principal and interest payable under the Promissory Note at
such time, provided that the Borrower shall remain responsible for the payment
of all additional costs as more particularly set out in this Charge and the
Promissory Note.
43. GOVERNING LAWS
This Charge shall be interpreted and governed according to the laws of the
Province of Ontario.
19
SCHEDULE "4.5(f)"
PERMITTED ENCUMBRANCES
Each of the following interests of public record as disclosed by registered
title as at the Effective Date:
1. Instrument No. TT73395 registered on April 13, 1953.
2. Instrument No. TT3396 registered on April 13, 1953.
3. Instrument No. TT173300Z registered on November 6, 1964.
4. Instrument No. TT175940 registered on January 27, 1965.
5. Instrument No. VS189304Z registered on November 2, 1971.
6. Instrument No. RO770139 registered on September 25, 1986.
7. Instrument No. RO1002540 registered on April 8, 1992.
8. Instrument No. RO1094644 registered on July 19, 1995.
