XXXXXXX 00 (xxx)
491
Certain annotations and explanations may have been added by management to
enhance clarity. See asterisks for such additions. Some punctuation may have
been modified in recognition of certain differences between French and English
grammar.
LOAN AGREEMENT ON BANK OF MONTREAL FORM,
DATED DECEMBER 17, 1997. THIS IS A STANDARD BANK FORM INCLUDING MANY BOXES TO BE
CHECKED OFF, LINES TO BE FILLED IN, ETC.
Where a box was checked off, the box is not on this document but a capital
letter "X" appears (word processing problem). In some cases, there are boxes
which one might think should have been checked off or lines filled in, but where
no such actions are evident on the original document. Such apparent anomalies
have been faithfully reproduced in this translation. Use of the word "blank"
denotes a line not having been filled in.
Page 1 of 7 (on the original)
02.21.96
Bank of Montreal Loan Agreement - Quebec Guarantee Program
--------------------------------------------------------------------------------
BETWEEN
Bank of Montreal
0000 Xxxx Xxxxx, Xxxxx 000 (xxxxxxxxxxx)
Xx-Xxxxxxx, XX December 17, 1997
AND
3143619 Canada Inc. (handwritten)
000 Xx-Xxxxxxx
Xxx., Xx
X0X 0X0
The Bank of Montreal (hereinafter called "the Bank") agrees to put at the
disposal of 3143619 Canada Inc. (handwritten), (the "Borrower"), a loan in the
capital amount of $ (left blank) (the "Loan"), authorized by the Bank under the
framework of the "Programme d'aide au financement des entreprises (decret
709-96), tel qu'il pourra etre modifie de temps a autre" (*Assistance Program
for the Financing of Enterprises (Decree 709-96, as it will be modified from
time to time) (the "Program") of the "Societe de developpement industriel du
Quebec" (*Quebec Industrial Development Corporation) (SDI), subject to the terms
and conditions described below, which could be the subject of periodic
re-evaluation by the Bank:
PURPOSE The Loan must serve exclusively to finance:
Translation provided by management of the
corporation. This is not an official document.
492
Certain annotations and explanations may have been added by management to
enhance clarity. See asterisks for such additions. Some punctuation may have
been modified in recognition of certain differences between French and English
grammar.
75% of the Research and Development Tax Credits for the fiscal
years terminating June 30, 1997 and June 30, 1998 (handwritten
starting at "75%") (The "Project")
INTEREST RATE The interest rate on the Loan is fixed or variable according
to the option chosen below:
(Check as applicable) X Variable rate: prime rate of the Bank (*of
Montreal) plus 1.25% per year, i.e. 7.25% as
of December 17, 1997, calculated daily and
payable monthly.
|_| fixed rate: i.e. (blank) % per year, calculated daily
and payable monthly.
The Borrower cannot convert a fixed-rate loan under the
current Agreement to a variable rate loan, according to the
current rate, until the maturity of the fixed rate loan.
Interest on the Loan is payable to the Bank monthly starting
with the month where the Loan is disbursed.
TERM _______________ Years, expiring on _________________.
EXEMPTION
FROM CAPITAL
REPAYMENT |_| The Borrower benefits from an exemption of capital
repayment. The commencement of capital repayment will be
deferred for a period of _______________ months (maximum
period of 24 months) from the date that the Project is
(*was) completed, determined as __________________
(insert date)
REPAYMENT
(tick appropriate box) The Borrower commits to repay the capital of the Loan to
the Bank by means of (*the following) payments
Translation provided by management of the
corporation. This is not an official document.
493
Certain annotations and explanations may have been added by management to
enhance clarity. See asterisks for such additions. Some punctuation may have
been modified in recognition of certain differences between French and English
grammar.
|_| monthly
|_| quarterly
|_| semi-annually
|_| annually
|_| equal amounts of $ (blank) , starting on
___________, or
|_| equal amounts of $ (blank) , starting on
____________, except for the month (s) of
____________ and ______________ of each year.
PREPAYMENT The Borrower cannot prepay the Loan in whole or in part where
the interest rate of the Loan is a fixed rate.
DISBURSEMENT The Loan will be disbursed on one or more disbursements of
which the Bank can determine, at its sole discretion, the
amounts and the dates and this, on the condition that the
Borrower not be in default of the terms of the present
(*Agreement). The disbursement (s) will be effected after the
execution and publication (*registration) of the Guarantee (s)
as described following, and the respect to our satisfaction,
of the conditions of the Loan Le complete disbursement must be
effected before ____________________; after this date, the
Bank will be liberated from the obligation to advance any
amount by virtue of this Loan, in the absence of a written
agreement.
GUARANTEES The Loan will be guaranteed by (one "Guarantee" and
(Tick the collectively the "Guarantees").
applicable
box (es))
X Guarantee of a loss on the Loan provided by SDI, in
accordance with the Program.
|_| Mortgage Guarantee of __________ rank for an amount of $
(blank) on the building situated at ___________________.
|_| Chattel mortgage on equipment or machinery, or both
|_| chattel mortgage on inventory or on accounts receivable,
or both.
Translation provided by management of the
corporation. This is not an official document.
494
Certain annotations and explanations may have been added by management to
enhance clarity. See asterisks for such additions. Some punctuation may have
been modified in recognition of certain differences between French and English
grammar.
|_| chattel mortgage on all of the moveable tangible and
intangible assets, present and future.
|_| guarantee by virtue of Article 427 of the Bank Act.
X universal mortgage on all of the moveable assets,
present and future.
|_| cession of fire-insurance policy with the indemnities
(proceeds) payable to the Bank.
X personal guarantee of (*handwritten) $200,000 signed by
X. Xxxxx and X. Xxxx.
X other Guarantee (s) (describe as appropriate) Corporate
guarantee in the amount of $1,000,000 signed by Tirex
Corporation. (handwritten)
- All Guarantees must be prepared according to the forms
in use by the Bank, including the usual protection
clauses in favor of the Bank, or must be of a form and
content acceptable to the Bank.
DECLARATIONS OF
THE BORROWER - The Borrower declares that his Project will be completed
no later than June 30, 1998 (handwritten). The period of
the undertaking of the Project cannot exceed three (3)
years from the date of the first disbursement.
- The current Agreement, the Guarantees, as well as the
promissory note, duly completed and submitted by the
Borrower to the Bank, constitute valid obligations which
bind the Borrower and are executory according to their
respective "modalites" (* a very difficult word to
translate in that it implies both clauses and procedures
simultaneously...like "workings")
- All of the elements of the assets pledged by the
Borrower to guarantee the repayment of the Loan are not
encumbered by any privileges, mortgages, priorities or
other charges.
Translation provided by management of the
corporation. This is not an official document.
495
Certain annotations and explanations may have been added by management to
enhance clarity. See asterisks for such additions. Some punctuation may have
been modified in recognition of certain differences between French and English
grammar.
- The Project is not the beneficiary of any financial
assistance made available by another government
organization (*apart from the Tax Credits)
- Without limiting the generalities of the foregoing, the
Borrower declares that he meets the conditions of the
Program.
(*Programme Garantie Quebec)
CONDITIONS - Legal costs related to the preparation and execution of
the legal documents required by this Agreement will be
the responsibility of the Borrower, regardless of
whether the Loan is granted or not.
- All costs due to SDI are, and will be satisfied when due
to the satisfaction of the Bank. On request, proofs of
payment will be submitted to the Bank.
- The Borrower will submit to the Bank, within ninety (90)
days following the end of his fiscal year, copies of the
financial statements accompanied by the auditors' report
thereon, and at all times will furnish all other
information which the Bank might reasonably require.
- The Borrower will furnish to the Bank supplementary
guarantees, at the request of the Bank and as often as
the Bank judges appropriate.
- The Borrower will submit to the Bank any invoices and
proofs of payment concerning the acquisitions of capital
assets foreseen in the Project and any other document
deemed necessary.
- The Borrower will effect all registrations and deposits
(*of documents) required from time to time by virtue of
the laws of the Province of Quebec, including the "Loi
sur la publicite legale des entreprises individuelles,
des societes et des personnes xxxxxxx" (An Act
Respecting the Legal Publicity of Sole proprietorships,
Partnerships and Legal Persons). On demand, a proof of
registration will be submitted to the Bank.
- Throughout the duration of this Loan, the Borrower
commits:
Translation provided by management of the
corporation. This is not an official document.
496
Certain annotations and explanations may have been added by management to
enhance clarity. See asterisks for such additions. Some punctuation may have
been modified in recognition of certain differences between French and English
grammar.
|_| to maintain a working capital ratio equal or superior to
_________________ and a minimum amount of working
capital of $________________.
|_| to maintain a ratio of long-term debt to shareholders'
equity equal to or less than ___________________ %.
|_| These ratios will be calculated according to the methods
normally used by the Bank.
- The Borrower shall not, without having obtained the
prior consent of the Bank:
|_| contract for debt to third parties, for purposes of
capital assets for an amount exceeding $_____________ in
the course of the same fiscal year;
|_| declare or pay dividends on its share capital;
|_| purchase back (*redeem) preferred or common shares;
|_| change substantially the nature of its business;
|_| modify the control of the company, which is presently
held by: ________________________, at
____________________% ________________________, at
____________________% and ___________________________,
at __________________%
- If a significant change occurs, which the Bank judges to
be unfavorable, in the nature of the risk before the
date of disbursement of the funds, the Bank can refuse
to disburse the Loan (in whole or in part) and annul the
present Loan Agreement.
- A sum of $3,500 (handwritten) paid with the Loan request
represents negotiation fees. If the Loan would not be
granted or disbursed for reasons unattributable to the
Bank, these fees are not refundable, understood that
(these fees) are paid to cover the costs of evaluating
the request.
Translation provided by management of the
corporation. This is not an official document.
497
Certain annotations and explanations may have been added by management to
enhance clarity. See asterisks for such additions. Some punctuation may have
been modified in recognition of certain differences between French and English
grammar.
- No rights or obligations of the Borrower by virtue of
the present (offer) nor any amount of the Loan can be
transferred or ceded by the Borrower. Any transfer or
cession undertaken despite this condition will be null
as far the Bank is concerned and will render the entire
balance of the Loan, at the discretion of the Bank, due
and payable and will liberate the Bank from any
obligation to make any further disbursement or advance,
by virtue of the present (offer).
ARTICLES OF DEFAULT
The Borrower will be in default under the terms of the
present (offer) in the event of the occurrence of one or
more of the following events:
- The Borrower does not effect when due a
repayment of capital or a payment of interest,
costs or any other sums due and payable by the
present (offer);
- The Borrower defaults in accomplishing one or
other of its obligations by virtue of the
present (offer) and/or of the program;
- The Borrower becomes insolvent, bankrupt, in
liquidation, or makes a proposal to its
creditors or files a notice of intent to make a
proposal to its creditors;
- the filing of procedures to dissolve or
liquidate the Borrower or to suspend its
operations;
- the assets of the Borrower, or a significant
portion of same become the object of seizure by
a creditor or placement under trusteeship;
- the Borrower creates or permits the creation of
a mortgage, surety or other charge ranking equal
to those of the Bank, or having priority to
(those of the Bank) with regard to the
guarantees which were given (ceded) to the Bank
or which should have been (should be) accorded
by virtue of the present (offer);
Translation provided by management of the
corporation. This is not an official document.
498
Certain annotations and explanations may have been added by management to
enhance clarity. See asterisks for such additions. Some punctuation may have
been modified in recognition of certain differences between French and English
grammar.
- The Borrower is in default in paying any sums
due to another financial institution or to the
state (government) by virtue of any fiscal law;
- The Borrower is the author of a false or
incorrect declaration in the present Agreement,
the Guarantee (s), or any related document;
- There occurs a deterioration of the financial
situation of the Borrower;
- A Guarantee becomes null, tainted with
irregularities, withdrawn, suspended, or, for
whatever reason, is unenforceable or if the bank
has reasonable reason to believe that a
guarantee will not be honored;
- The Borrower defaults in respecting one or more
dispositions or conditions of the program.
In the event of default, the Bank reserves the right to demand
immediate payment of the total balance of the Loan and the
Loan will be annulled at that instant. The Bank will thus be
able to terminate the right of the Borrower to use any portion
of the Loan available.
GENERAL
CONDITIONS - If the Borrower includes more than one person,
the obligations of the Borrower by virtue of the
present (offer) are indivisible and jointly
binding.
- All clauses or parts of clauses which can be
null and unexecutable will not invalidate the
other conditions of the present (offer), have an
impact (on the other clauses) or diminish their
scope.
- If the Borrower requests of the bank to reserve
an interest rate, the Borrower consents to
discharge, the ______________, the costs of
reserving the interest rate corresponding to
(Blank) per cent of the capital amount of the
Loan.
Translation provided by management of the
corporation. This is not an official document.
499
Certain annotations and explanations may have been added by management to
enhance clarity. See asterisks for such additions. Some punctuation may have
been modified in recognition of certain differences between French and English
grammar.
- The Borrower can have the interest rate
established up to 30 days prior to the first
disbursement. The Borrower must thus pay, on
_____________, a commitment fee corresponding to
1% of the capital amount of the Loan.
- The costs referred to in the previous paragraph
will be reimbursed to the Borrower on the day of
the total disbursement of the loan. If the
Borrower annuls all or part of the Loan, the
Bank will retain the costs in question.
- The present Agreement is governed by the Quebec
Civil Code and other Quebec laws.
- The privileges and obligations of the present
Agreement commit the parties, their successors
and assigns, their liquidators, and judicial
administrators; the Borrower, however, cannot
cede (the privileges and obligations) without
the written consent of the Bank.
- The present Loan Agreement must be accepted by
the Borrower no later than __________________,
19 by signing and returning this document, in
the absence of which the Bank reserves the right
to annul or modify this (Agreement), and to do
so unilaterally.
Bank of Montreal
By: /s/ Nathalie St-Pierre
------------------------------------
ACCEPTANCE
WE ACCEPT THE TERMS AND CONDITIONS OF THE PRESENT LOAN AGREEMENT
3143619 Canada Inc.
Name of Borrower
Translation provided by management of the
corporation. This is not an official document.
500
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Signed at Montreal (handwritten), this 17 day of December 1997
501
