Document:

AMENDMENT NO

EXHIBIT

10.4(b)

STOCKERYALE,

INC.

 

AMENDMENT

NO. 1 TO THE

2000

EMPLOYEE STOCK PURCHASE PLAN

 

 

 

This AMENDMENT NO. 1 dated as of June 26, 2001 (this

“Amendment”) to the StockerYale, Inc. 2000 Employee Stock Purchase Plan (the

“Plan”), is adopted by the Board of Directors on the date hereof.  All capitalized terms used and not defined

herein shall have the meanings ascribed to such terms in the Plan.

 

Pursuant to Section 18 of the Plan, the Board of

Directors hereby amends Section 3 of the Plan by deleting it in its entirety

and replacing it with the following:

 

3.                                           Eligibility. 

All employees of the Company (including employees who are also directors

of the Company) and all employees of each Designated Subsidiary (as defined in

Section 11) are eligible to participate in any one or more of the Offerings

under the Plan, provided that they are customarily employed by the Company or a

Designated Subsidiary for more than twenty (20) hours a week and they are

employed by the Company prior to the first day of the relevant Offering Period.

 

                Except as so

amended, the Plan in all other respects is confirmed and ratified and shall

remain and continue in full force and effect.

 

 

Adopted by the Board of Directors: June 26, 2001December 5, 2000

EXHIBIT

10.13(c)

 

 

December 5, 2000

 

StockerYale Canada Inc.

3549 Rue Ashby

Saint-Laurent, QC H4R 2K3

CAN

 

 

Attn: Mr. Alain

Beauregard and Mr. Luc Many,

 

Dear Sirs

 

 

We are pleased to

offer the Borrower the following credit facilities (the “Facilities”), subject

to the terms and conditions outlined below.

 

	

  BORROWER

  	

  StockerYale Canada Inc. (the “Borrower”)

  
	

   

  
	

  LENDER

  	

  The Toronto-Dominion Bank (the “Bank”), through its 3773 Cote

  Vertu branch, in St-Laurent, Quebec.

  
	

   

  
	

  CREDIT LIMIT

  	

  1) 

  	

  The lesser of:

  
	

   

  	

  i)

  	

   $2,000,000. CDN$[or its US$Equivalent], AND

  
	

   

  	

  ii)

  	

  the TOTAL

  of  operating loans (including Bankers

  Acceptances), net of assigned credit balances, Letters of Credit Accepted,

  20% of Letters of Credit Available and 

  L/G do not exceed 80% of accounts receivable (Cdn Equiv), net of over

  90 day and related accounts (StockerYale, Stilson Asiatic, CorkOpt and

  Optune) and net of accounts excluded by Export Development Corporation

  (“EDC”).

  
	

   

  	

  iii)

  	

  Receivable

  shortfalls permitted to a maximum of $500,000, for periods not exceeding 90

  days, to be covered 300% by order book plus 300% by inventory, after taking

  into account portion required for term loan coverage.

  
	

   

  	

  iv)

  	

  50% of term

  loan, Facility # 2, to be covered by inventory at cost, as evidenced by

  monthly stock declarations.

  
	

   

  	

  2)

  	

  $375,000. CDN$

  
	

   

  	

  3)

  	

  $68,750. CDN$

  
	

   

  	

  4)

  	

  $67,500. CDN$

  
	

   

  	

  5)

  	

  $600,000. CDN$

  
	

   

  	

  6)

  	

  $2,112,500 CDN$

  
	

   

  	

  7)

  	

  $200,000. CDN$

  
	

   

  	

  8)

  	

  $112,500. CDN$

  
	

   

  	

  9)

  	

  $200,000. CDN$

  
	

   

  	

   

  	

   

  
	

  TYPE OF CREDIT

  	

   

  	

   

  
	

  AND

  BORROWING

  	

   

  	

   

  
	

  OPTIONS

  	

  1)

  	

  Operating Loan

  available at the Borrower’s option by way of:

  
	

   

  	

  —

  	

  Prime Rate Based

  Loans in CDN$(“Prime Based Loans”)

  
	

   

  	

  —

  	

  Bankers

  Acceptances in CDN$(“B/As”)

  
	

   

  	

  —

  	

  United States

  Base Rate Loans in US$(“USBR Loans”)

  
	

   

  	

  —

  	

  Letters of

  Credit in CDN$or US$(“L/Cs”)

  
	

   

  	

  —

  	

  Stand-by Letters

  of Guarantee in CDN$(“L/Gs”) limited to $9,000. CDN$

  
	

   

  	

   

  	

   

  
	

   

  	

  2)

  	

  Demand (Reducing)

  
	

   

  	

   

  	

   

  
	

   

  	

  3,4,5,8)

  	

  Commercial

  Instalment Loans  (“CIL’s”)

  
	

   

  	

   

  	

   

  
	

   

  	

  6,7)

  	

  Commercial Mortgage Loans

  

 

 

 

	

   

  	

  9)

  	

  Commercial Term Loan (“CTL”)

  
	

   

  	

   

  	

   

  
	

  PURPOSE

  	

  1)

  	

  To finance

  current assets

  
	

   

  	

  2)

  	

  To provide

  liquidity to complete acquisition of company

  
	

   

  	

  3)

  	

  To finance new

  equipment and perform leasehold improvements

  
	

   

  	

  4,5)

  	

  To finance

  machinery and equipment acquisitions

  
	

   

  	

  6)

  	

  To finance the

  purchase of a commercial property in Dollard-Des-Ormeaux to relocate the

  company’s operations.

  
	

   

  	

  7)

  	

  To finance a

  piece of land adjacent to the property being acquired in Dollard-Des-Ormeaux.

  
	

   

  	

  8)

  	

  To finance

  systems and equipment being  purchased

  with the building in Dollard-Des-Ormeaux.

  
	

   

  	

  9)

  	

  To finance

  leasehold improvements to be performed into the property in

  Dollard-Des-Ormeaux.

  
	

   

  	

   

  	

   

  
	

  TENOR

  	

  1,2)

  	

  Uncommitted

  
	

   

  	

  3,4,5,6,7,8,9,)

  Committed

  
	

   

  	

   

  	

   

  
	

  TERM

  	

  1)

  	

  No term

  
	

   

  	

  2)

  	

  4 years

  
	

   

  	

  3)

  	

  5 years

  
	

   

  	

  4)

  	

  3 years maximum

  
	

   

  	

  5,8,9)

  	

  5 years maximum

  
	

   

  	

  6,7)

  	

  5 years maximum

  
	

   

  	

   

  	

   

  
	

  AMORTIZATION

  	

  2)

  	

  4 years maturity

  May 21,2002

  
	

   

  	

  3)

  	

  5 years maturity

  May 18, 2003

  
	

   

  	

  4)

  	

  3 years maximum

  from drawdown

  
	

   

  	

  5,8,9)

  	

  5  years maximum from drawdown

  
	

   

  	

  6,7)

  	

  15 years maximum

  from drawdown

  
	

   

  	

   

  	

   

  
	

  INTEREST RATES

  	

   

  	

   

  
	

  AND FEES

  	

  Advances shall

  bear interest and fees as follows:

  
	

   

  	

   

  	

   

  
	

   

  	

  1)

  	

  Operating Loan:

  
	

   

  	

   

  	

  Prime Based

  Loans:  Prime Rate + 1% per annum

  
	

   

  	

   

  	

  USBR Loans:  USBR + 1% per annum

  
	

   

  	

   

  	

  B/As:  Stamping Fee at  2% per annum

  
	

   

  	

   

  	

  L/Cs:  As advised by the Bank at the time of

  issuance of the L/C

  
	

   

  	

   

  	

  L/Gs: 2% per

  annum

  
	

   

  	

   

  	

  Inventory

  financing premium: .0.50% per annum

  
	

   

  	

   

  	

  to be levied

  monthly when applicable ( minimum $50.).

  
	

   

  	

   

  	

   

  
	

   

  	

  2,3)

  	

  Prime Rate +2%

  per annum.

  
	

   

  	

   

  	

   

  
	

   

  	

  4,5,8,9)

  	

  Prime Rate +

  1.25% or fixed rate to determine at time of drawdown.

  
	

   

  	

   

  	

   

  
	

   

  	

  6,7)

  	

  Prime Rate +

  7/8% or fixed rate to determine at time of drawdown.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Interest

  Payments will be made in accordance with Schedule “A” attached hereto.

  Information on Interest Rate and Fee Definitions, Interest Rate Calculations

  and Payment is set out in the Schedule “A” attached hereto.

  

 

2

 

	

   

  	

   

  	

   

  

 

 

	

  ARRANGEMENT

  	

   

  	

   

  
	

  FEE

  	

   

  	

  The Borrower has

  paid or will pay a non-refundable set up fee for facility 6,7,8,9 of $6,000.

  
	

   

  	

   

  	

   

  
	

  ADMINISTRATION

  	

   

  	

   

  
	

  FEE

  	

   

  	

  $75. per month.

  
	

   

  	

   

  	

   

  
	

  RENEWAL FEE

  	

   

  	

  $2,500. renewal

  fee already paid

  
	

   

  	

   

  	

   

  
	

  DRAWDOWN

  	

  1)

  	

  On a revolving

  basis. Notice periods, minimum amounts of draws, interest periods and terms

  for Banker’s Acceptances and other similar details are set out in the

  Schedule “A” attached hereto.

  
	

   

  	

   

  	

   

  
	

   

  	

  2,3)

  	

  Fully drawn

  
	

   

  	

   

  	

   

  
	

   

  	

  4,8)

  	

  Maximum 75% of

  cost of equipment (net of taxes). On presentation of invoices for equipment

  acquisition : after publication of securities.

  
	

   

  	

   

  	

   

  
	

   

  	

  5,9)

  	

  Maximum 50% of

  cost of equipment and leasehold improvements (net of taxes).  On presentation of invoices, after publication

  of securities. Partial drawdowns of minimum $100,000. each permitted.

  
	

   

  	

   

  	

   

  
	

   

  	

  6)

  	

  Maximum 65% of the lowest of cost or economic value

  of property determined by an appraisal for lending purpose from an appraiser

  authorized by the Lender.

  
	

   

  	

   

  	

   

  
	

   

  	

  7)

  	

  Maximum 50% of

  the lowest of cost or economic value of land determined by an appraisal for

  lending purpose from an appraiser authorized by the Lender.

  
	

   

  	

   

  	

   

  
	

  BUSINESS CREDIT

  	

   

  	

   

  
	

  SERVICE

  	

   

  	

   

  
	

   

  	

  The Borrower

  will have access to the Operating Loan (Facility 1) via Loan Account Number

  4296-9732885 (the “Loan Account”) up to the Credit Limit of the Operating

  Loan by withdrawing funds from the Borrower’s Current Account Number

  4296-0732885 (the “Current Account”). The Borrower agrees that each advance

  from the Loan Account will be in an amount equal to $5,000. (the “Transfer

  Amount”) or a multiple thereof. If the transfer amount is NIL, the Borrower

  agrees that an advance from the Borrower’s Loan Account may be in an amount

  sufficient to cover the debits made to the Current Account.

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  The Borrower

  agrees that:

  	

   

  	

   

  
	

   

  	

   

  	

  a)

  	

  all other

  overdraft privileges which have governed the Borrower’s Current Account are

  hereby canceled.

  
	

   

  	

   

  	

  b)

  	

  all outstanding

  overdraft amounts under any such other agreements are now included in Indebtedness

  under this Agreement.

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  The Bank may,

  but is not required to, automatically advance the Transfer Amount or a

  multiple thereof or any other amount from the Loan Account to the Current

  Account in order to cover the debits made to the Current account if the

  amount in the Current Account is insufficient to cover the debits. The Bank

  may, but is not required to, automatically and without notice apply the funds

  in the Current Account in amounts equal to the Transfer Amount or any

  multiple thereof or any other amount to repay the outstanding amount in the

  Loan Account.

  
	

   

  	

   

  	

   

  
	

  REPAYMENT

  	

   

  	

   

  
	

   

  	

  1)

  	

  On demand.  If the Bank demands repayment, the

  Borrower will pay to the Bank all amounts outstanding under the Operating

  Loan, including without limitation, the amount of all unmatured B/As and  the amount of all drawn and undrawn L/Gs

  and L/Cs. All costs to the Bank and all loss suffered by the Bank.

  
	

   

  
	

   

  	

  2)

  	

  Floating Rate

  Demand Reducing loan on demand: Equal monthly payments of principal of

  $20,833.34 plus interest  commencing

  in July 1998 and continuing on the 21 day of each month until and including

  May 18, 2002 (the “Maturity Date”) when the balance of the Loan shall be

  paid, unless earlier demanded upon the occurrence of an Event of Default.

  Payment of Interest on Floating Rate Demand Reducing loan will be in

  accordance with Schedule “A” attached hereto.

  
							

 

3

 

3)             Equal monthly payments of $2,291.67 on principal plus

interest.

 

4,5,6,7,8,9)

 

Fixed Rate Term Loan:

Equal monthly payments of principal and interest unless earlier demanded upon

occurrence of an Event of Default.  The

amount of the monthly payment, the date on which the monthly payments begin,

the day of the month each monthly payment is due and the date of the final

monthly payment (the “Maturity Date”) shall be determined on the date of

drawdown and set out in written notice to you (the “Rate and Payment Terms

Notice”).

 

or

 

Floating Rate Term Loan:

Equal monthly payments of principal unless earlier demanded upon occurrence of

an Event of Default.  The amount of the

monthly payment, the date on which the monthly payments begin, the day of the

month each monthly payment is due and the date of the final monthly payment

(the “Maturity Date”) shall be determined on the date of drawdown and set out

in written notice to you (the “Rate and Payment Terms Notice”).

Payment of interest on

Floating Rate Term Loans will be in accordance with Schedule “A” attached

hereto.

 

PREPAYMENT                                    

Prepayment charges

referred to in Schedule “A” for Facilities where the Tenor is described as

Committed and Drawdown is not on a revolving basis are waived for amounts

outstanding that have been borrowed by way of Prime Based Loans or USBR Loans.

 

SECURITY                                            

The following security

shall be provided, shall support all present and future indebtedness and

liability of the Borrower and the grantor of the security to the Bank including

without limitation indebtedness and liability under guarantees, foreign

exchange contracts, cash management products, and derivative contracts, shall

be registered in first position, and shall be on the Bank’s standard form,

supported by resolutions and solicitor’s opinion, all acceptable to the Bank.

 

 

	

   

  	

  ALL FACILITIES

  
	

   

  	

   

  	

   

  
	

  a)

  	

  Movable Hypothec

  from the Borrower in the amount of $6,000,000. on the universality of property:

  
	

   

  	

  property in

  stock;

  
	

   

  	

  claims,

  receivable, book debts and other movable property;

  
	

   

  	

  securities;

  
	

   

  	

  equipment and

  road vehicles;

  
	

   

  	

  trade marks and

  intellectual property rights;

  
	

   

  	

  CDN and US

  credit balances;

  
	

   

  	

  all movable

  property, corporeal and incorporeal, present and future;

  
	

   

  	

   

  
	

  b)

  	

  Security on

  inventory under Section 427 of the Bank Act from the Borrower;

  
	

   

  	

   

  
	

  c)

  	

  Adequate fire

  insurance on stock, equipment and building with loss payable to the Bank;

  
	

   

  	

   

  
	

  d)

  	

  TD Credit

  Insurance in the amount of $604,461. on the life of Alain Beauregard;

  
	

   

  	

   

  
	

  e)

  	

  TD Credit

  Insurance in the amount of $299,733.. on the life of Luc Many;

  
	

  f)

  	

  Movable Hypothec

  on life insurance in the amount of $200,000. on the life of Luc Many;

  
	

   

  	

   

  
	

  g)

  	

  Unlimited

  Guarantee Agreement dated May 13, 1998 by STOCKER & YALE INC. (corporate

  

name since modified for

StockerYale Inc.) in favour of Lasiris Inc ,(corporate name since modified for

StockerYale Canada Inc.), Lasiris Holdings Inc., 2620-1483 Quebec Inc., and

9063-5251 Quebec Inc. covering present and future indebtedness and liabilities

to the Bank, direct and indirect ,actual or contingent, in principal, interest

or otherwise and any other amount for which any of the debtors may become

liable to the Bank.

 

4

 

	

  h)

  	

  Copy of EDC

  Insurance  for minimum  $2,500,000. with Direction to Pay

  instructions acknowled by EDC.

  
	

   

  	

   

  
	

   

  	

  FACILITY # 1

  
	

   

  	

   

  
	

  i)

  	

  Bankers’

  Acceptance agreement and power of attorney re: Banker’s Acceptance;

  
	

   

  	

   

  
	

  j)

  	

  Indemnity

  agreement re: letter of guarantee;

  
	

   

  	

   

  
	

   

  	

  FACILITY # 3

  
	

   

  	

   

  
	

  k)

  	

  Movable Hypothec

  in the amount of $110,000. from the Borrower on specific equipment and

  leasehold improvements;

  
	

   

  	

   

  
	

   

  	

  FACILITY # 4

  
	

   

  	

   

  
	

  l)

  	

  Movable Hypothec

  in the amount of $67,500. from the Borrower on specific equipment and

  leasehold improvements;

  
	

   

  	

   

  
	

   

  	

  FACILITY # 5

  
	

   

  	

   

  
	

  m)

  	

  Movable Hypothec

  in the amount of $600,000. from the Borrower on specific equipment;

  
	

   

  	

   

  
	

   

  	

  FACILITY # 6

  
	

   

  	

   

  
	

  n)

  	

  Immovable

  Hypothec (1st rank) in the amount of $2,500,000. on lot #270-28 of  Paroisse Ste-Genevieve, land and building

  at  275 & 295  Kesmark, Dollard-Des-Ormeaux, Quebec.

  
	

   

  	

   

  
	

   

  	

  FACILITY # 7

  
	

   

  	

   

  
	

  o)

  	

  Immovable

  Hypothec (1st rank) in the amount of $200,000. on lot #270-25 of Paroisse

  Ste-Genevieve, land adjacent to 275 Kesmark, Dollard-Des-Ormeaux, Quebec.

  
	

   

  	

   

  
	

  p)

  	

  Copy of

  responsibility insurance on vacant land;

  
	

   

  	

   

  
	

   

  	

  OTHER

  
	

   

  	

   

  
	

  q)

  	

  TD Visa

  indemnity agreement.

  

 

All of the above

hypothecs are in an amount of   120% of

above mentioned amounts with interest thereon at a rate of 25% per annum.

 

All persons and entities

required to provide a guarantee shall be referred to in this Agreement

individually as a “Guarantor” and collectively as the “Guarantors”;

 

All of the above security

and guarantees shall be referred to collectively in this Agreement as “Bank

Security”.

 

DISBURSEMENT

CONDITIONS                                                                                                              The obligation of the Bank to make any

loan hereunder is subject to the Standard Disbursement Conditions contained in

Schedule “A” and the following additional drawdown conditions:

 

	

   

  	

  Delivery to the

  Bank of:

  
	

  a)

  	

  confirmation

  Borrower’s name change to be obtained prior to preparation of any new

  security;

  
	

  b)

  	

  copy of invoices

  with proof of payment for equipment and leasehold improvement purchases.

  

 

5

 

	

  c)

  	

  proof of

  $1,200,000. cash injection into capital shares from StockerYale Inc.

  
	

  d)

  	

  copy of accepted

  purchase offer for vacant land.

  
	

  e)

  	

  original copy of

  appraisal(s) for each property by an appraiser approved by the Bank.

  
	

  f)

  	

  satisfactory

  environmental audit Phase 1 for each property by a firm approved by the Bank.

  
	

  g)

  	

  satisfactory

  recent certificate of locations for each property.

  
	

  h)

  	

  applicable

  security publication, documentation and confirmation of insurance coverage.

  
	

  i)

  	

  immovable

  hypothec prepared by a notary approved by the Bank, with satisfactory

  notary’s opinion and proof of tax payments for each property.

  

 

 

REPRESENTATIONS

AND WARRANTIES                                                                             All representations and warranties shall

be deemed to be continually repeated so long as any amounts remain outstanding

and unpaid under this Agreement or so long as any commitment under this

Agreement remains in effect. The Borrower makes the Standard Representations

and Warranties set out in Schedule “A”, and in addition, represents and

warrants that:

 

a)             the Borrower is a wholly owned subsidiary of the

Guarantor.

 

POSITIVE

COVENANTS

So long as any amounts

remain outstanding and unpaid under this Agreement or so long as any commitment

under this Agreement remains in effect, the Borrower will and will ensure that

its subsidiaries and each of the Guarantors will observe the Standard Positive

Covenants set out in Schedule “A” and in addition will:

 

a)             Provide,quarterly unaudited consolidated financial

statements of StockerYale Inc. and audited

annual consolidated

financial statements of StockerYale Inc. within 60 days and 90 days of each

respective period.

 

b)            Provide the Bank with monthly in-house financial

statements of the Borrower, aged accounts

receivable list (with

countries identified and detail of EDC excluded accounts) ,stock declaration

and accounts payable listing within 20 business days after each  month end with list of orders-on-hand

including full details (i.e. names and amounts).

 

c)             Provide proof of immovable properties tax payments

within 30 days following due date(s).

 

d)            Limit annual withdrawals, dividends

and/or bonuses to an aggregate of $200,000. except for

compensation agreement

with sellers, no withdrawals, dividends, bonuses and capital to be distributed

or paid without the prior written consent of the Bank.

 

NEGATIVE

COVENANTS

So long as any amounts

remain outstanding and unpaid under this Agreement or so long as any commitment

under this Agreement remains in effect, the Borrower will and will ensure that

its subsidiaries and each of the Guarantors will observe the Standard Negative

Covenants set out in Schedule “A”.

 

Permitted Liens as

referred to in Schedule “A” include all liens related to current security

interests and all future aand all future liens for the replacement of equipment

for which a security interest currenttly exists.

 

	

  FINANCIAL

  	

   

  	

   

  
	

  COVENANTS

  	

   

  	

  The Borrower

  agrees at all times to:

  
	

   

  	

   

  	

   

  
	

   

  	

  a)

  	

  maintain Net

  Working Capital of not less than $1,500,000.. at all times.Net Working

  Capital shall consist of current assets less loans to shareholders, employees

  and any other related parties and less current liabilities including

  unpostponed loans from the shareholders.

  
	

   

  	

   

  	

   

  
	

   

  	

  b)

  	

  maintain a Debt

  Service Coverage of not less than 1.25. 

  The Debt Service Coverage to be calculated as follows:

  

 

6

 

	

   

  	

   

  	

  EBITDA + Leases

  + Rents  less maintenance CAPEX 

  
	

   

  	

   

  	

  (Principal /1-tax rate)

  + Interest + Leases + Rents

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  EBITDA is

  defined as Earnings Before Interest, Income Taxes, Depreciation, and

  Amortization.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  CAPEX =

  mandatory capital expenditures to maintain the Borrower’s competitive

  position.

  
	

   

  	

   

  	

   

  
	

   

  	

  c)

  	

  maintain a Total

  Debt to Tangible Net Worth ratio  not greater

  than 2.0:1.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Debt is defined

  as the Borrower’s total indebtedness for borrowed money less loans made by

  the shareholders to the Borrower and postponed in favour of the Bank.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Tangible Net

  Worth is defined as shareholder’s equity plus loans made by the shareholders

  to the Borrower and postponed in favour of the Bank, less loans to its

  shareholders, employees and other related parties and less intangible assets

  including without limitation, goodwill, research and development, franchises,

  patents and trademarks.

  

 

DEFAULT

The Bank may accelerate

the payment of principal and interest under any committed credit facility

hereunder and cancel any undrawn portion of any committed credit facility

hereunder, at any time after the occurrence of any one of the Standard Events

of Default contained in Schedule “A” attached hereto or after any one of the

following additional Events of Default:

 

a)             If there shall occur a change in the ownership or

capital structure of the Borrower

 

ANCILLARY

FACILITIES                         

In addition to the Facilities, the Bank has made available to

Borrower  the following ancillary

facilities (the “Ancillary Facilities”) which the Borrower agrees will not be

used for speculative purposes:

	

  1)

  	

  TD Business

  Visa  Cards up to $15,000. CDN$

  
	

  2)

  	

  Forward Foreign

  Exchange Facility which allows the Borrower to enter into up to $5,000,000.

  US$for period up to 12 months from the date the Forward Foreign Exchange

  contract is entered into.

  
	

  3)

  	

  Spot Foreign

  Exchange Facility which allows the Borrower to enter into up to $1,000,000.

  US$for settlement on a spot basis.

  

 

AVAILABILITY OF 

OPERATING LOAN                           

The Operating Loan is

uncommitted, made available at the Bank’s Discretion, and is not automatically

available upon satisfaction of the terms and conditions, conditions precedent,

or financial tests set out herein.

 

The occurrence of an

Event of Default is not a precondition to the Bank’s right to accelerate

repayment and cancel the availability of the Operating Loan.

 

	

  LANGUAGE

  	

   

  	

   

  
	

  PREFERENCE

  	

   

  	

  This Agreement

  has been drawn up in the English language at the request of all parties.

  
	

  SCHEDULE

  “A” -

  	

   

  	

   

  
	

  STANDARD

  	

   

  	

   

  
	

  TERMS

  AND

  	

   

  	

   

  
	

  CONDITIONS

  	

   

  	

   

  

 

Schedule “A” sets out the

Standard Terms and Conditions (“Standard Terms and Conditions”) which apply to

these credit facilities. The Standard Terms and Conditions, including the

defined terms set out therein, form part of this Agreement, unless this letter

states specifically that one or more of the Standard Terms and Conditions do

not apply or are modified.

 

7

 

OTHER

AGREEMENTS                    This offer

constitutes an amendment to the Credit Agreement dated May 13, 1998

between the Toronto Dominion Bank and

Lasiris Inc. with the intervention of Stocker & Yale Inc.

 

 

We trust you will

find these facilities helpful in meeting your ongoing financing

requirements.  We ask that if you wish

to accept this offer of financing (which includes the Standard Terms and

Conditions), please do so by signing and returning the attached duplicate copy

of this letter to the undersigned. 

Please have the Guarantor(s) sign the letter below where indicated.  This offer will expire if not accepted in

writing and received by the Bank on or before December 22, 2000.

 

Yours truly,

 

 

 

	

  Annie Demlakian

  Relationship

  Manager

  	

   

  	

  Signing No.

  	

   

  	

  Kevin Sanderson

  Manager Commercial Credit 

  	

   

  	

  Signing No.

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

SCHEDULE A

STANDARD TERMS AND CONDITIONS

 

1. 

INTEREST RATE DEFINITIONS

 

Prime Rate means the rate of interest per annum (based

on a 365/366 day year) established and reported by the Bank to the Bank of

Canada from time to time as the reference rate of interest for determination of

interest rates that the Bank charges to customers of varying degrees of

creditworthiness in Canada for Canadian dollar loans made by it in Canada.

 

The Stamping Fee rate per annum is based on a 365/366

day year and the Stamping Fee is calculated on the Face Amount of each B/A

presented to the Bank for acceptance.

 

LIBOR means the rate of interest per annum (based on a

360 day year) as determined by the Bank (rounded upwards, if necessary to the

nearest whole multiple of 1/16th of 1%) at which the Bank may make available

United States dollars which are obtained by the Bank in the Interbank Euro

Currency Market, London, England at approximately 11:00 a.m. (Toronto time) on

the second Business Day before the first day of, and in an amount similar to,

and for the period similar to the interest period of, such advance.

 

USBR means the rate of interest per annum (based on a

365/366 day year) established by the Bank from time to time as the reference

rate of interest for the determination of interest rates that the Bank charges

to customers of varying degrees of creditworthiness for US dollar loans made by

it in Canada.

 

Any interest rate based on a period less than a year

expressed as an annual rate for the purposes of the Interest Act (Canada) is

equivalent to such determined rate multiplied by the actual number of days in

the calendar year in which the same is to be ascertained and divided by the

number of days in the period upon which it was based.

 

2. INTEREST CALCULATION AND PAYMENT

 

Interest on Prime Based Loans and USBR Loans is

calculated daily and payable monthly in arrears based on the number of

days  the subject loan is outstanding.

 

The Stamping Fee is calculated based on the amount and

the term of the B/A and payable upon acceptance by the Bank of the B/A. The net

proceeds received by the Borrower on a B/A advance will be equal to the Face

Amount of the B/A discounted at the Bank’s then prevailing B/A discount rate

for the specified term of the B/A less the B/A Stamping Fee.

 

Interest on LIBOR Loans is calculated and payable on

the earlier of contract maturity or quarterly in arrears, for the number of

days in the LIBOR interest period.

 

L/C and L/G fees are payable at the time of issuance

of the L/C or L/G.

 

Interest on Fixed Rate Loans is compounded monthly and

payable monthly in arrears unless otherwise noted.

 

Interest is payable both before and after maturity or

demand, default and judgment.

 

Each payment under this Agreement shall be applied

first in payment of costs and expenses, then interest and fees and the balance,

if any, shall be applied in reduction of principal.

 

For loans not

secured by real property, all overdue amounts of principal and interest shall

bear interest from the date on which the same became due until the date of

payment at the All-In Rate plus 2% per annum.

 

3.  DRAWDOWN

PROVISIONS

 

Prime

Based and USBR Loans

There is no minimum amount of drawdown by way of Prime

Based Loans and USBR Loans, except as stated in the section of the Agreement

titled “Business Credit Services Agreement”, if that section of the Agreement

has not been deleted. The Borrower shall provide the Bank with 3 Business Day’s

notice of a requested Prime Based Loan or USBR Loan over $1,000,000.

 

B/As

The Borrower shall advise the Bank of the requested

term or maturity date for B/As issued hereunder.  The Bank shall have the discretion to restrict the term or

maturity dates of B/As. In no event shall the term of the B/A exceed the Maturity

Date. The minimum amount of a drawdown by way of B/As is $500,000 and in

multiples of $100,000 thereafter. The Borrower shall provide the Bank with 3

Business Day’s notice of a requested B/A drawdown.

 

The Borrower shall pay to the Bank the final amount of

the B/A  at the maturity date of the

B/A.

 

LIBOR

The Borrower shall advise the Bank of the requested

LIBOR contract maturity period.  The

Bank shall have the discretion to restrict the LIBOR contract maturity.  In no event shall the term of the LIBOR contract

exceed the Maturity Date.  The minimum

amount of a drawdown by way of a LIBOR Loan is $1,000,000, and shall be in

multiples of $100,000 thereafter. The Borrower will provide the Bank with 3

Business Day’s notice of a requested LIBOR Loan.

 

L/C and/or

L/G

The Bank shall have the discretion to restrict the

maturity date of L/Gs or L/Cs.

 

B/A —

Prime Conversion

The Borrower will provide the Bank with at least 3

Business Days notice of its intention either to convert a B/A to a Prime Based

Loan or vice versa, failing which, the Bank may decline to accept such

additional B/As or may charge interest on the amount of Prime Based Loans

resulting from maturity of B/As at the rate of 115% of the rate applicable to

Prime Based Loans for the 3 Business Day period immediately following such

maturity.  Thereafter, the rate shall

revert to the rate applicable to Prime Based Loans.

 

4.  PREPAYMENT

For Facilities available on a “revolving” basis,

prepayment is not applicable.

 

For Facilities where the Tenor is described as

“Committed” and Drawdown is not on a revolving basis, when not in default, the

Borrower may prepay all or any part of the principal then outstanding upon

payment of  interest accrued to the date

of prepayment (“Prepayment Date”) and prepayment charges equal to the greater

of:

(a)    three

months’ interest on the amount of the prepayment using the interest rate

applicable to the loan facility being prepaid ; and

(b)    the Interest Rate Differential.  “Interest Rate Differential” means the  amount, by which (i) the total amount of

interest the Bank would have received on the amount prepaid had it not been

prepaid but remained outstanding to the Maturity Date exceeds (ii) the total

amount of interest the Bank would receive on the amount prepaid on a Fixed Rate

Loan made for a term from the date of prepayment until the Maturity Date using

the interest rate applicable to a Fixed Rate Loan the Bank would make to a

borrower for a comparable facility on the Prepayment Date for a term expiring

on the Maturity Date.

 

9

 

5.  STANDARD

DISBURSEMENT CONDITIONS

The obligation of the Bank to make any loan or advance hereunder at any time is

subject to the following conditions precedent:

a)      The Bank

shall have received the following documents which shall be in form and substance

satisfactory to the Bank:

i)               A

copy of a duly executed resolution of the Board of Directors of the Borrower

empowering the Borrower to enter into this Agreement;

ii)              A

copy of any necessary government approvals authorizing the Borrower to enter

into this Agreement;

iii)             All

of the Bank Security and supporting resolutions and solicitors’ letter of

opinion required hereunder;

iv)             The

Borrower’s compliance certificate certifying compliance with all terms and

conditions hereunder; and

v)              all

operation of account documentation;

b)      The

representations and warranties contained in this Agreement are correct.

c)      No event

has occurred and is continuing which constitutes an Event of Default or would

constitute an Event of Default, but for the requirement that notice be given or

time elapse or both.

d)      The Bank

has received the arrangement fee payable hereunder (if any) and the Borrower

has paid all legal and other expenses incurred by the Bank in connection with

the Agreement or the Bank Security.

 

6.  STANDARD REPRESENTATIONS

AND WARRANTIES

The

Borrower hereby represents and warrants, which 

representations and warranties shall be deemed to be continually

repeated so long as any amounts remain outstanding and unpaid under this

Agreement or so long as any commitment under this Agreement remains in effect,

that:

a)      The

Borrower is a corporation duly incorporated and organized, validly existing and

in good standing under the laws of the jurisdiction where the Branch/Centre is

located and each other jurisdiction where the Borrower has property or assets

or carries on business and the Borrower has adequate corporate power and

authority to carry on its business, own property, borrow monies and enter into

agreements therefor, execute and deliver the Agreement, the Bank Security, and

documents required hereunder, and observe and perform the terms and provisions

of this Agreement.

b)      There are

no laws, statutes or regulations applicable to or binding upon the Borrower and

no provisions in its charter documents or in any by-laws, resolutions,

contracts, agreements, or arrangements which would be contravened, breached,

violated as a result of the execution, delivery, performance, observance, of

any terms of this Agreement.

c)      No Event

of Default has occurred nor has any event occurred which, with the passage of

time or the giving of notice, would constitute an Event of Default under this

Agreement or which would constitute a default under any other agreement.

d)      There are

no actions, suits or proceedings, including appeals or applications for review,

or any knowledge of pending actions, suits, or proceedings against the Borrower

and its subsidiaries, before any court or administrative agency which would

result in any material adverse change in the property, assets, financial condition,

business or operations of the Borrower.

e)      All

material authorizations, approvals, consents, licenses, exemptions, filings,

registrations and other requirements of governmental, judicial and public

bodies and authorities required to carry on its business have been or will be

obtained or effected and are or will be in full force and effect.

f)       The

financial statements and forecasts delivered to the Bank fairly present the

present financial position of the Borrower, and have been prepared by the Borrower

and its auditors in accordance with Canadian 

Generally Accepted Accounting Principles consistently applied.

g)      All of the remittances required to be made by the Borrower to

the federal government and all provincial and municipal governments have been made,

are currently up to date and there are no outstanding arrears.  Without limiting the foregoing, all employee

source deductions (including income taxes, Employment Insurance and Canada

Pension Plan), sales taxes (both provincial and federal), corporate income

taxes, corporate capital taxes, payroll taxes and worker’s compensation dues

are currently paid and up to date.

 

7. STANDARD POSITIVE COVENANTS

So

long as any amounts remain outstanding and unpaid under this Agreement or so

long as any commitment under this Agreement remains in effect, the Borrower

will, and will ensure that its subsidiaries and each of the Guarantors will:

a)     Pay all

amounts of principal, interest and fees on the dates, times and place specified

herein and under any other agreement between the Bank and the Borrower.

b)     Advise the

Bank of any change in the amount and the terms of any credit arrangement made

with other lenders or any action taken by another lender to recover amounts

outstanding with such other lender.

c)     Advise

promptly after the happening of any event which will result in a material

adverse change in the financial condition, business, operations, or prospects

of the Borrower or the occurrence of any Event of Default or default under this

Agreement or under any other agreement for borrowed money.

d)     Do all

things necessary to maintain in good standing its corporate existence and

preserve and keep all material agreements, rights, franchises, licenses,

operations, contracts or other arrangements in full force and effect.

e)     Take all

necessary actions to ensure that the Bank Security and its obligations

hereunder will rank ahead of all other indebtedness of and all other security

granted by the Borrower.

f)      Pay all

taxes, assessments and government charges unless such taxes, assessments, or

charges are being contested in good faith and appropriate reserves shall be

made with funds set aside in a separate trust fund.

g)     Provide

the Bank with information and financial data as it may request from time to

time.

h)     Maintain

property, plant and equipment in good repair and working condition.

i)      Inform

the Bank of any actual or probable litigation and furnish the Bank with copies

of details of any litigation or other proceedings, which might affect the

financial condition, business, operations, or prospects of the Borrower.

j)      Provide

such additional security and documentation as may be required from time to time

by the Bank or its solicitors.

k)     Continue

to carry on the business currently being carried on by the Borrower its subsidiaries

and each of the Guarantors at the date hereof.

l)      Maintain

adequate insurance on all of its assets, undertakings, and business risks.

m)    Permit the Bank or its authorized

representatives full and reasonable access to its premises, business, financial

and computer records and allow the duplication or extraction of pertinent

information therefrom.

8. STANDARD NEGATIVE COVENANTS

So long as any amounts remain outstanding and unpaid

under this Agreement or so long as any commitment under this Agreement remains

in effect, the Borrower will not and will ensure that its subsidiaries and each

of the Guarantors will not:

a)     Create,

incur, assume, or suffer to exist, any mortgage, deed of trust, pledge, lien,

security interest, assignment, charge, or encumbrance (including without

limitation, any conditional sale, or other title retention agreement, or

finance lease) of any nature, upon or with respect to any of its assets or

undertakings, now owned or hereafter acquired, except for those Permitted

Liens, if any, set out in the Letter.

b)     Create,

incur, assume or suffer to exist any other indebtedness for borrowed money

(except for indebtedness resulting from Permitted Liens, if any) or guarantee

or act as surety or agree to indemnify the debts of any other Person.

c)     Merge or

consolidate with any other Person, or acquire all or substantially all of the

shares, assets or business of any other Person.

d)     Sell,

lease, assign, transfer, convey or otherwise dispose of any of its now owned or

hereafter acquired assets (including, without limitation, shares of stock and

indebtedness of subsidiaries, receivables and leasehold interests), except for

inventory disposed of in the ordinary course of business.

e)     Terminate

or enter into a surrender of any lease of any property mortgaged under the Bank

Security.

f)      Cease to

carry on the business currently being carried on by each of the Borrower, its

subsidiaries, and the Guarantors at the date hereof.

g)    Permit any change of ownership or change in the capital structure

of the Borrower.

 

10

 

9.

ENVIRONMENTAL

The Borrower represents and warrants (which

representation and warranty shall continue throughout the term of this

Agreement) that the business of the Borrower, its subsidiaries and each of the

Guarantors is being operated in compliance with applicable laws and regulations

respecting the discharge, omission, spill or disposal of any hazardous

materials and that any and all enforcement actions in respect thereto have been

clearly conveyed to the Bank.

 

The Borrower shall, at the request of the Bank from

time to time, and at the Borrower’s expense, obtain and provide to the Bank an

environmental audit or inspection report of the property from auditors or

inspectors acceptable to the Bank.

 

The Borrower hereby indemnifies the Bank, its

officers, directors, employees, agents and shareholders, and agrees to hold

each of them harmless from all loss, claims, damages and expenses (including

legal and audit expenses) which may be suffered or incurred in connection with

the indebtedness under this Agreement or in connection with the Bank Security.

 

10. STANDARD EVENTS OF DEFAULT

The

Bank may accelerate the payment of principal and interest under any committed

credit facility hereunder and cancel any undrawn portion of any committed credit

facility hereunder, at any time after the occurrence of any one of the

following Events of Default:

a)      Non-payment

of principal outstanding under this Agreement when due or non-payment of

interest or fees outstanding under this Agreement within 3 Business Days of

when due.

b)      If any

representation, warranty or statement made hereunder or made in connection with

the execution and delivery of this Agreement or the Bank Security is false or

misleading at any time.

c)      If there

is a breach or non-performance or non-observance of any term or condition of

this Agreement or the Bank Security and, if such default is capable to being

remedied, the default continues unremedied for 5 Business Days after the

occurrence.

d)      If the

Borrower, any one of its subsidiaries, or, if any of the Guarantors makes a

general assignment for the benefit of creditors, files or presents a petition,

makes a proposal or commits any act of bankruptcy, or if any action is taken

for the winding up, liquidation or the appointment of a liquidator, trustee in

bankruptcy, custodian, curator, sequestrator, receiver or any other officer

with similar powers or if a judgment or order shall be entered by any court

approving a petition for reorganization, arrangement or composition of or in

respect of the Borrower, any of its subsidiaries, or any of the Guarantors or

if the Borrower, any of its subsidiaries, or any of the Guarantors is insolvent

or declared bankrupt.

e)      If there

exists a voluntary or involuntary suspension of business of the Borrower, any

of its subsidiaries, or any of the Guarantors.

f)       If

action is taken by an encumbrancer against the Borrower,  any of its subsidiaries, or any of the

Guarantors to take possession of property or enforce proceedings against any

assets.

g)      If any

final judgment for the payment of monies is made against the Borrower, any of

its subsidiaries, or any of the Guarantors and it is not discharged within 30

days from the imposition of such judgment.

h)      If there

exists an event, the effect of which with lapse of time or the giving of

notice, will constitute an event of default or a default under any other

agreement for borrowed money in excess the Cross Default Threshold entered into

by the Borrower, any of its subsidiaries, or any of the Guarantors.

i)       If the

Bank Security is not enforceable or if any party to the Bank Security shall

dispute or deny any liability or any of its obligations under the Bank

Security.

j)       If, in the Bank’s determination, a

material adverse change occurs in the financial condition, business operations

or prospects of the Borrower, any of the Borrower’s subsidiaries, or any of the

Guarantors.

11.

ACCELERATION

If the Bank accelerates the payment of principal and

interest hereunder, the Borrower shall immediately pay to the Bank all amounts

outstanding hereunder, including without limitation, the amount of unmatured

B/As and LIBOR Loans and the amount of all drawn and undrawn  L/Gs and 

L/Cs.  All cost to the Bank of

unwinding LIBOR Loans and all loss suffered by the Bank in re-employing amounts

repaid will be paid by the Borrower.

 

The Bank may demand the payment of principal and

interest under the Operating Loan (and any other uncommitted facility)

hereunder and cancel any undrawn portion of the Operating Loan (and any other

uncommitted facility) hereunder, at any time whether or not an Event of Default

has occurred.

 

12. CURRENCY INDEMNITY

US$ loans must be repaid with US$ and CDN$ loans must

be repaid with CDN$ and the Borrower shall indemnify the Bank for any loss

suffered by the Bank if US$ loans are repaid with CDN$ or vice versa, whether

such payment is made pursuant to an order of a court or otherwise.

 

13.

TAXATION ON PAYMENTS

All payments made by the Borrower to the Bank will be

made free and clear of all present and future taxes (excluding the Bank’s

income taxes), withholdings or deductions of whatever nature.  If these taxes, withholdings or deductions

are required by applicable law and are made, the Borrower, shall, as a separate

and independent obligation, pay to the Bank all additional amounts as shall

fully indemnify the Bank from any such taxes, withholdings or deductions.

 

14.

REPRESENTATION

No representation or warranty or other statement made

by the Bank concerning any of the credit facilities shall be binding on the

Bank unless made by it in writing as a specific amendment to this Agreement.

 

15.

ADDED COST

If the introduction of or any change in any present or

future law, regulation, treaty, official or unofficial directive, or regulatory

requirement, (whether or not having the force of law) or in the interpretation

or application thereof, relates to:

i)      the

imposition or exemption of taxation of payments due to the Bank or on reserves

or deemed reserves in respect of the undrawn portion of any Facility or loan

made available hereunder; or,

ii)     any

reserve, special deposit, regulatory or similar requirement against assets,

deposits, or loans or other acquisition of funds for loans by the Bank; or,

iii)    the

amount of capital required or expected to be maintained by the Bank as a result

of the existence of the advances or the commitment made hereunder;

 

and the result of such occurrence is, in the sole

determination of the Bank, to increase the cost of the Bank or to reduce the

income received or receivable by the Bank hereunder, the Borrower shall, on

demand by the Bank, pay to the Bank that amount which the Bank estimates will

compensate it for such additional cost or reduction in income and the Bank’s

estimate shall be conclusive, absent manifest error.

16.

EXPENSES

The Borrower shall pay, within 5 Business Days

following notification, all fees and expenses (including but not limited to all

legal fees) incurred by the Bank in connection with the preparation,

registration and ongoing administration of this Agreement and the Bank Security

and with the enforcement of the Bank’s rights and remedies under this Agreement

or the Bank Security whether or not any amounts are advanced under the

Agreement. These  fees and expenses

shall include, but not be limited, to all outside counsel fees and expenses and

all in-house legal fees and expenses, if in-house counsel are used, and all

outside professional advisory fees and expenses. The Borrower shall pay

interest on unpaid amounts due pursuant to this paragraph at the Prime Rate

plus 2% per annum.

 

17. NON WAIVER

Any failure by the Bank to object to or take action

with respect to a breach of this Agreement or any Bank Security or upon the

occurrence of an Event of Default shall not constitute a waiver of the Bank’s

right to take action at a later date on that breach. No course of conduct by

the Bank will give rise to any reasonable expectation which is in any way

inconsistent with the terms and conditions of this Agreement and the Bank

Security or the Bank’s rights thereunder.

 

11

 

18. EVIDENCE OF INDEBTEDNESS

The Bank shall record on its records the amount of all

loans made hereunder, payments made in respect thereto, and all other amounts

becoming due to the Bank under this Agreement. 

The Bank’s records constitute, in the absence of manifest error,

conclusive evidence of the indebtedness of the Borrower to the Bank pursuant to

this Agreement.

 

The Borrower will sign an Indemnity Agreement for all

L/Cs and  L/Gs issued by the Bank.

 

19. OTHER AGREEMENTS

This Agreement replaces any previous letter agreements

dealing specifically with terms and conditions of the credit facilities

described in the Letter. Agreements relating to other credit facilities made

available by the Bank continue to apply for those other credit facilities.

 

20.

ASSIGNMENT

The Bank may assign or grant participation in all or

part of this Agreement or in any loan made hereunder without notice to and

without the Borrower’s consent.

 

The Borrower may not assign or transfer all or any

part of its rights or obligations under this Agreement.

 

21. RELEASE OF INFORMATION

The Borrower hereby irrevocably authorizes and directs

the Borrower’s accountant, (the “Accountant”) to deliver all financial

statements and other financial information concerning the Borrower to the Bank

and agrees that the Bank and the Accountant may communicate directly with each

other.

 

22.

SET-OFF

In addition to and not in limitation of any rights now

or hereafter granted under applicable law, the Bank may at any time and from

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 deposits, general or special, time or demand, provisional or final,

matured or unmatured, in any currency, and any other indebtedness at any time

owing by the Bank, to or for the credit of or the account of the Borrower

against and on account of the indebtedness 

and liability under this Agreement notwithstanding that any of them are

contingent or unmatured or in a different currency than the indebtedness and

liability under this Agreement.

 

When applying a deposit in a different currency than

the indebtedness and liability under this Agreement to the indebtedness and

liability under this Agreement, the Bank will convert the deposit to the

currency of the indebtedness and liability under this Agreement using the

Bank’s noon spot rate of exchange for the conversion of such currency.

 

23.

MISCELLANEOUS

i)       The

Borrower has received a signed copy of this Agreement;

ii)      If more

than one Person, firm or corporation signs this Agreement as the Borrower, each

party is jointly and severally liable hereunder, and the Bank may require

payment of all amounts payable under this Agreement from any one of them, or a

portion from each, but the Bank is released from any of its obligations by

performing that obligation to any one of them;

iii)     Accounting

terms will (to the extent not defined in this Agreement) be interpreted in

accordance with accounting principles established from time to time by the

Canadian Institute of Chartered Accountants (or any successor) consistently

applied, and all financial statements and information provided to the Bank will

be prepared in accordance with those principles;

iv)     This

Agreement is governed by the law of the Province or Territory where the

Branch/Centre is located.

v)      Unless

stated otherwise, all amounts referred to herein are in Canadian dollars

 

24. DEFINITIONS

Capitalized Terms used in this Agreement shall have

the following meanings:

 

“All-In Rate” means the greater of the Interest Rate

that the Borrower pays for Prime Based Loans (which for greater certainty

includes the percent per annum added to the Prime Rate) or the highest Fixed

Rate paid for Fixed Rate Loans.

 

“Agreement”

means the agreement between the Bank and the Borrower set out in the Letter and

this Schedule “A” — Standard Terms and Conditions.

“Business Day” means any

day (other than a Saturday or Sunday) that the Branch/Centre is open for

business.

“Business Plan/Forecast”

means, for any fiscal year, a business plan and financial forecast in respect

of the Borrower for such fiscal year, in form reasonably acceptable to the Bank

and certified by a senior officer/representative of the Borrower.

“Branch/Centre”

means The Toronto-Dominion Bank branch or banking centre noted on the first

page of the Letter, or such other branch or centre as may from time to time be

designated by the Bank.

“Face Amount”

means, in respect of:

(i)     a B/A, the amount payable to the holder

thereof on its maturity;

(ii)    A L/C or L/G, the maximum amount payable to

the beneficiary specified therein or any other Person to whom payments may be

required to be made persuant to such L/C or L/G.

“Fixed

Rate Loan” means any loan drawn down, converted or extended under a Credit

Facility at an interest rate which is fixed for a term, instead of referenced

to a variable rate such as the Prime Rate.

“Inventory

Value” means, at any time of determination, the total value (based on the lower

of cost or market) of the Borrower’s inventories that are subject to the Bank

Security (other than (i) those inventories supplied by trade creditors who at

that time have not been fully paid therefor and would have a right to repossess

all or part of such inventories if the Borrower were then either bankrupt or in

receivership, (ii) those inventories comprising work in process and (iii) those

inventories that the Bank may from time to time designate in its sole

discretion) minus the total amount of any claims, liens or encumbrances on

those inventories having or purporting to have priority over the Bank.

“Letter”

means the letter from the Bank to the Borrower to which this Schedule “A”

—  Standard Terms and Conditions is

attached.

“Letter of Credit” or

“L/C” means, unless specifically limited elsewhere in this Agreement, a

documentary letter of credit or similar instrument in form and substance

satisfactory to the Bank.

“Letter of Guarantee” or

“L/G” means, unless specifically limited elsewhere in this Agreement, a

stand-by letter of guarantee or similar instrument in form and substance

satisfactory to the Bank.

“Person” includes any

individual, sole proprietorship, corporation, partnership, joint venture,

trust, unincorporated association, association, institution, entity, party, or

government (whether national, federal, provincial, state, municipal, city,

county, or otherwise and including any instrumentality, division, agency, body,

or department thereof).

“Purchase

Money Security Interest” means a security interest on an asset which is granted

to a lender or to the seller of such asset in order to secure the purchase

price of such asset or a loan incurred to acquire such asset, provided that the

amount secured by the security interest does not exceed the cost of the asset

and provided that the Borrower provides written notice to the Bank prior to the

creation of the security interest.

“Receivable

Value” means, at any time of determination, the total value of those of the

Borrower’s trade accounts receivable that are subject to the Bank Security

other than (i) those accounts then outstanding for 90 days, (ii) those accounts

owing by Persons, firms or corporations affiliated with the Borrower, (iii)

those accounts that the Bank may from time to time designate in its sole

discretion, (iv) those accounts subject to any claim, liens, or encumbrance

having or purporting to have priority 

 

 

32

 

over

the Bank, (v) those accounts which are subject to a claim of set-off by the

obligor under such account, MINUS the total amount of all claims, liens, or

encumbrances on those receivables having or purporting to have priority over

the Bank.

“Receivables/Inventory

Summary” means a summary of the Customer’s trade account receivables and

inventories, in form as the Bank may require and certified by a senior

officer/representative of the Borrower.

“US$ Equivalent” means, on any date, the equivalent

amount in United States Dollars after giving effect to a conversion of a

specified amount of  Canadian Dollars to

United States Dollars at the Bank’s noon spot rate of exchange for Canadian

Dollars to United States Dollars established by the Bank for the day in

question.

13

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