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BETWEEN: B2B BANK (hereinafter referred to as the “Bank”) 199 Bay Street, Suite 600 PO Box 279 STN Commerce
Court Toronto ON M5L 0A2
AND: _________________________________________________________________________________________________________
(Name and address of borrower)
(Hereinafter referred to as the “borrower”).
To secure the repayment of the sums that the borrower owes or may owe the Bank under the Agreement, as such word is
understood in the B2B Bank Investment Loan Application, (the “credit agreement”) whereby the Bank has granted or made
available to the borrower a loan or a line of credit in the amount of __________________________________________
dollars ($________________ ) signed on ___________________________________ (all sums owed by the borrower
to the Bank under the above-mentioned credit agreement, and all renewals, replacements, additions or modifications,
substitutions or rewordings brought to it are hereinafter collectively referred to as the “loan”), of the interest at the rate of
25% per annum as from the date of these presents, and of the accessories, as well as the performance of all obligations
arising therefrom, the borrower hypothecates in favour of the Bank, for a sum of ________________________________
__________________ dollars ($ _____________________ ) the investment securities hereinafter described (hereinafter
referred to as the “hypothecated property”):
(Specify the number of investment securities, their nature, category or series, par value, issuer name, certificate number, maturity date, etc.)
Mutual funds units __________________________________________________ __________________________
(Specify the Name of the Fund) (Issuer’s account number)
__________________________________________________ __________________________
__________________________________________________ __________________________
__________________________________________________ __________________________
Other: ______________________________________________________________________________________________________
and each and all of the securities that shall have been, from time to time, (i) purchased or acquired with the proceeds
of the loan and held or kept by the Bank, a B2B Bank Dealer (hereinafter defined) or under the custody of a third party
designated by the Bank, or (ii) placed under the custody of the Bank or a third party designated by the Bank, in furtherance
to the Borrower’s obligations under the credit agreement to maintain the collateral; and including the securities pledged to
the Bank by reason of the Bank obtaining control of same. The securities pledged to the Bank as part of the collateral to
secure the loan may be held in an account at B2B Bank Financial Services Inc., B2B Bank Securities Services Inc. or B2B
Bank Intermediary Services Inc. (together, hereinafter referred to as the “B2B Bank Dealers”).
The following property, if it is not already included in the above description or in appendix, is also charged with
the hypothec and security created hereunder. Therefore, the expression “hypothecated property” also includes the
following property:
a) all investment securities and all property which, in conformity with these presents, may be remitted to the Bank, or
a B2B Bank Dealer, by the borrower or on his behalf (other than the investment securities or property which, as
per the borrower’s written instructions agreed to by the Bank, are not subject to this agreement);
b) all investment securities issued or received instead of the investment securities described or mentioned above, or
as their renewals or replacements 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 investment securities, or issued
to or received by investment security holders as dividends or otherwise;
c) the rights arising from the hypothecated property along with the profit and income generated by it, including
the principal, income, interest and dividend, accruals and any other proceeds, notably the redemption proceeds
d) the proceeds of any sale, assignment or other disposal of the property described above, any claim arising from
such sale, assignment or other disposal, as well as any property acquired to replace a property described above
(provided however that this clause shall not be interpreted as allowing the borrower to dispose of the hypothecated
property in violation of any other provisions of this agreement);
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817-03-209E (10/01/2015)
e) all title deeds, documents, ledgers, books, bills and accounts evidencing the hypothecated property or related to it.
To secure any amount owing to the Bank which would be in excess of the amount of the hypothec shown above, the
borrower hypothecates the hypothecated property for a further sum equal to twenty percent (20%) of the amount of the
hypothec provided for in section 1 hereof.
The borrower hereby represents and makes the following declarations to the Bank, which must remain true until the final
repayment of the loan:
a) he is the sole and absolute owner of all the hypothecated property and no hypothec, conditional sales contract, sales
contract by instalments, prior claim, security or real right currently affects or is liable to affect it, except:
b) all sums owed by borrower under fiscal laws have been paid without subrogation;
c) his date of birth is the following: __________________________________________________________________________________
The borrower makes the following commitments:
4.1 Additional documents
He shall carry out all acts and sign all documents required to give full effect to the hypothec and security and ensure that
they may always be set up against third parties, and that the Bank may exercise any hypothecary recourse to which it is
entitled. He binds and obligates himself to deliver to the Bank, at the latter’s request and at his own expense, any waiver,
postponement of claim, release or discharge, as deemed necessary by the Bank to secure the prior rank of its rights and
security over the hypothecated property.
4.2 Insurance
In the case of destruction or loss of the hypothecated property, the borrower shall obtain a replacement through a lost item
suretyship and pay the costs related thereto.
4.3 Payment at maturity
He shall pay when due all duties, taxes, rates and charges payable with respect to the hypothecated property as well as
any claim that could rank ahead of the hypothec and security created hereunder and shall notify the Bank of any delay in
the payment thereof. Upon request, the borrower shall provide the Bank with evidence that he has made the payments
provided for in this section.
4.4 Additional hypothec
At the Bank’s request, he undertakes to grant the latter any additional hypothec the Bank will deem reasonable in order to
specifically affect future property or property acquired in replacement of the hypothecated property to maintain the value
of the securities granted under this agreement.
4.5 Costs
He shall pay the fees and expenses related to these presents, such as professional fees, registration fees in the register
of personal and movable real rights, if applicable, and any other expenses, including those related to any renewal, notice,
additional hypothec, waiver, postponement of claim, release or discharge related thereto along with all other connected
expenses. He shall reimburse the Bank all costs and fees it may incur to fulfil the borrower’s commitments or to exercise
its rights, with interest at the Prime Rate in force at the Bank from time to time, plus 3%. Prime Rate means the annual
interest rate announced by B2B Bank from time to time as being its reference rate then in effect (the “Prime Rate”). The
hypothec and security granted under section 1 hereof shall also secure the repayment of such costs and fees as well as
the payment of the related interest.
4.6 Signing of documents
Upon request, he undertakes to sign any power of attorney or any other document that the Bank may deem necessary or
useful for the preservation or repayment of the loan.
4.7 Sale or other alienation of hypothecated property
He may not assign or otherwise alienate the hypothecated property without the Bank’s prior authorization in writing.
4.8 Marital status and matrimonial regime (if applicable)
4.9 Other
Until notified to the contrary by the Bank, the borrower shall collect the dividends, interest and other income arising from the
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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.
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.
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.
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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10.1 Application of the guarantees
The hypothec and security interest under this agreement are added to, but do not replace any other hypothecs or security
interests held by the Bank, as the case may be. They are permanent and continuous security that will subsist despite
occasional, total or partial payments of obligations secured by these presents. In any and all cases of default, the borrower
shall be in default of its obligation by the mere lapse of time for performing it, without necessity for the Bank to send a
notice of default to the borrower.
10.2 Appropriation of sums collected
After having deducted the costs and fees incurred to exercise the rights provided for in these presents, including the
exercise of a hypothecary recourse, if applicable, the Bank may apply the balance of the sums it has collected, regardless
of their origin, to any of the sums owing under the credit agreement, regardless of whether they are due or not.
10.3 Exclusion of liability
The exercise by the Bank of one of its rights shall not prevent it from exercising any other of its rights hereunder; the rights
of the Bank shall be cumulative and not alternative. Failure by the Bank to exercise any of its rights shall not constitute a
waiver of the future exercise of such right. The Bank may exercise its rights resulting from these presents without having
to exercise its other recourses against the borrower or any other person responsible for the payment of the obligations
secured by there presents and without having to enforce any other security granted relative to such obligations.
The Bank shall not be held responsible by reason of any default or delay in availing itself of its rights and recourses, nor
by reason of any act or omission made in good faith by any agent, mandatory, employee or officer of the Bank, and such
default or delay shall not be interpreted as constituting a waiver of the Bank’s rights and recourses.
The Bank shall be bound to exercise only reasonable diligence in the exercise of its rights or performance of its obligations
and, in any case, it shall be held liable only for intentional or gross fault on its part. The borrower shall indemnify the Bank
and save it harmless against any losses and expenses incurred by the Bank and all damages claimed from the Bank for
which it is not liable.
10.4 Election of domicile
The borrower shall inform the Bank of any change in address. Should he fail to do so, he shall be deemed to have elected
domicile at the office of the clerk of the Superior Court for the district in which the head office of the Bank is located.
10.5 Indivisibility and solidarity
The obligations of the borrower shall be indivisible and may be claimed in their entirety from each of his heirs or legal
representatives. If the term “borrowers” means more than one person, each one of them shall be solidarily liable for the
performance of the borrower’s obligations contained in these presents.
11. THIRD PARTY INTERVENTION (if applicable)
Spouse married under the community of property regime
To this agreement, intervenes ______________________________________________________________________________
spouse married to the borrower under the regime of community of property, and who is aware of, understands, and agrees
with the presents, in compliance with the law.
Whenever the context so requires the singular number shall be interpreted as plural, the masculine gender as feminine or
neuter, and vice-versa.
Signed at __________________________ (Quebec) on __________________________
______________________________________________ ____________________________________________________
Name of Borrower Signature of Borrower
______________________________________________ ____________________________________________________
Name of Co-Borrower (if applicable) Signature of Co-Borrower (if applicable)
______________________________________________ ____________________________________________________
Name of Third Party (if applicable) Signature of Third Party (if applicable)
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