hypothecated property. The Bank may however, at any time, serve the borrower, the B2B Bank Dealer, if applicable, and
the security issuer, a notice stipulating that it will thenceforth collect the dividends, interest and other income arising from
the hypothecated property. The borrower shall then hand over immediately to the Bank all documents deemed necessary
or useful by the latter for such purpose, along with any cheque, money order or other instrument handed over to him prior
to the receipt of such notice or subsequently thereto.
6. REDEMPTION, CONVERSION OR OTHER TRANSFORMATION OF THE HYPOTHECATED PROPERTY
The Bank or the B2B Bank Dealer may, without however being under any obligation to do so, register itself, or its nominee,
as the holder of the hypothecated property and exercise any right arising therefrom, including any voting, option subscription,
conversion, redemption or retraction right. If the issuer exercises its right to redeem or repurchase the instruments, the
Bank may apply the redemption or repurchase price to the repayment of the loan or part thereof, regardless of the loan
having matured or not, and the borrower shall continue to make the payments provided for in the agreement.
The borrower shall sign, endorse and hand over to the Bank or a B2B Bank Dealer all investment securities issued
or received instead of the hypothecated property, or as their renewals or as additions thereto, or which are issued or
received at the time of purchase, redemption, retraction, conversion or cancellation, or of any other transformation of the
hypothecated property, or issued to or received by investment security holders as dividends or otherwise, all of which are
part of the hypothecated property.
7. ASSIGNMENT OF VOTING RIGHTS
The borrower hereby assigns to the Bank, or a B2B Bank Dealer, until the repayment of all sums owed under the terms and
conditions of the loan, all voting rights he holds or will hold under the hypothecated property. However, until notified to the
contrary by the Bank, the borrower shall continue to exercise such voting rights as proxy to the Bank and he may delegate
their exercise to third parties as if he still held them. Should the Bank, or the B2B Bank Dealer, avail itself of the assignment
of his voting rights, the borrower undertakes to sign forthwith, upon request, any document required by the Bank, or the
B2B Bank Dealer, to enable it to exercise such voting rights. The Bank may notify the securities’ issuer accordingly and
request to receive thenceforth notices or general meetings.
8. RIGHTS OF THE BANK
The Bank is hereby authorized irrevocably to endorse on behalf of the borrower the hypothecated property as well as
any cheque, money order or other instrument issued in payment of the hypothecated property or of the proceeds arising
therefrom, to receive payment therefor, to give an acquittance for the sums collected and to request that its name be
registered as hypothecary creditor in the ledgers of the issuer, of its transfer agent or any other mandatory.
The Bank’s liability respecting the hypothecated property in its possession shall be limited to exercising the prudence and
diligence it exercises toward the Bank’s own property. The borrower acknowledges that the Bank is entitled to hold the
hypothecated property and to transfer it to a third party and may hand over to such third party a copy of this agreement as
duly executed by the borrower. The Bank shall always be deemed to have continuous holding thereof.
In the case of a demand loan, the Bank may always demand its repayment. Furthermore, each of the following situations
shall constitute a case or an event of default:
a) if the borrower fails to perform or observe any of the obligations resulting from this agreement or the credit
b) if one of the representations made herein or subsequently is false or misleading, or if it is the case with any of the
documents submitted in relation with these presents;
c) if the borrower becomes insolvent or bankrupt, or if he makes a proposal to his creditors or if he files a notice stating
his intention to make a proposal;
d) if all or part of the hypothecated property is seized or if a recourse is exercised against it by another creditor, sequestrator,
guard, co-ordinator, trustee or any other person performing similar functions.
Should the borrower default, the Bank may terminate, at its own discretion, any obligation it may have had to grant credit
or advances to the borrower and any sums owing to the Bank shall immediately become payable, without any prior notice
or demand for performance. Subject to its other rights and recourses, the Bank shall then be entitled:
a) to perform any obligation not fulfilled by the borrower, and any monies expended for such purpose shall become
immediately payable by the borrower, with interest thereon at the rate then in force under the credit agreement;
b) to notify the borrower and the issuer of the securities that it shall thenceforth collect dividends, interest and other
income arising from the hypothecated property, as provided for in section 5, and to demand immediate possession of
the documents and instruments mentioned in that section;
c) to exercise, with respect to the hypothecary property, such hypothecary recourses and rights (such as the right to sell
the hypothecated property without prior notice) as provided for in the Civil Code of Quebec or to collect the maturity
value of any such instruments.
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