Annex “A”

Guarantee Agreement Under The Ginseng Storage Loan Guarantee Pilot Program

Between:

Her Majesty the Queen in Right of Ontario
as represented by the Minister of Agriculture, Food and Rural Affairs

(the “Minister”)

– and –

[Insert name of administrator]
(the “Administrator”)

1.0 Background

The Lieutenant Governor In Council has, upon the recommendation of the Minister, established the Program pursuant to the OIC.

The Administrator administers the Commodity Loan Guarantee Program on behalf of the Ministry.

The Minister would like the Administrator to administer the Program on behalf of the Ministry.

The Administrator would like to administer the Program on behalf of the Ministry.

The Minister has agreed to provide a Guarantee of the repayment and performance of the A-Loans, provided the Administrator issues the A-Loans in accordance with the requirements of the OIC, any Minister’s Directions, the Guidelines and this Guarantee Agreement.

2.0 Consideration

In consideration of the mutual covenants and agreements contained in this Guarantee Agreement and for other good and valuable consideration, the receipt and sufficiency of which is expressly acknowledged, the Parties agree as set out herein.

3.0 Entire Agreement

This Guarantee Agreement, including:

Schedule “A” – General Terms And Conditions Of The Guarantee Agreement; and

Schedule “B” – Operational Requirements Of The Guarantee Agreement.

constitute the entire agreement between the Parties with respect of the subject matter contained herein and supersedes all prior oral or written representations and agreements.

4.0 Counterparts and electronic signatures

4.1 This Guarantee Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

4.2 This Guarantee Agreement may be executed electronically. The electronic signature of a Party may be evidenced by one of the following means and transmission of this Guarantee Agreement may be as follows:

  1. A manual signature of an authorized signing officer placed in the respective signature line of this Guarantee Agreement and the Guarantee Agreement scanned as a pdf file and delivered by email to the other Party;
  2. A digital signature placed in the respective signature line of this Agreement including:
    1. The name of the authorized signing officer typed in the respective signature line of this Guarantee Agreement,
    2. An image of a manual signature inserted in the respective signature line of this Guarantee Agreement,
    3. An Adobe signature of an authorized signing officer, or
    4. Any other digital signature of an authorized signing officer with the other Party’s written consent,
      and this Guarantee Agreement delivered by email to the other Party; or
    5. Any other means with the other Party’s prior written consent.

5.0 Amending Guarantee Agreement

This Guarantee Agreement may only be amended by a written agreement duly executed by the Parties.

6.0 Acknowledgment

The Administrator:

  1. Acknowledges that it has read and understands the provisions contained in the entire Guarantee Agreement; and
  2. Agrees to be bound by the terms and conditions in the entire Guarantee Agreement.

In Witness Whereof the Parties have executed this Guarantee Agreement on the dates set out below.

Her Majesty the Queen in Right of Ontario,
as represented by the Minister of Agriculture, Food and Rural Affairs
Name/Title/Date

I have the authority to bind the Crown pursuant to delegated authority.

[insert name of administrator]
Name/Title/Date

I have the authority to bind the Administrator.

 

Schedule “A”
General Terms And Conditions of the guarantee agreement

Article A1
Interpretation And Definitions

A1.1 Interpretation.  For the purposes of interpreting this Guarantee Agreement:

  1. Words in the singular include the plural and vice versa;
  2. The headings do not form part of this Guarantee Agreement; they are for reference only and will not affect the interpretation of this Guarantee Agreement;
  3. Any reference to dollars or currency will be in Canadian dollars or currency;
  4. Any reference to a statute means a statute of the Province of Ontario, unless otherwise indicated;
  5. Any reference to a statute is to that statute and the regulations made pursuant to that statute as they may be amended from time to time and to any statute or regulations that may be passed that have the effect of supplanting or superseding that statute or regulation unless a provision of this Guarantee Agreement provides otherwise;
  6. Any reference to an Order-in-Council is a reference to that Order-in-Council as it may be amended from time to time and to any Order-in-Council that has the effect of supplanting or superseding the Order-in-Council unless a provision of this Guarantee Agreement provides otherwise;
  7. All accounting terms will be interpreted in accordance with the Generally Accepted Accounting Principles used in Canada and all calculations will be made and all financial data to be submitted pursuant to this Guarantee Agreement will be prepared in accordance with the Generally Accepted Accounting Principles used in Canada; and
  8. The words “include”, “includes” and “including” denote that the subsequent list is not exhaustive.

A1.2  Definitions. In this Guarantee Agreement, the following terms will have the following meanings:

“Administrative Agreement”
means the agreement between the Minister and the Administrator setting out how the Administrator is to administer the Program;
“Administrator”
means the person set out on the first page of this Guarantee Agreement;
“Administrator Event Of Default”
means an event of default, as set out under section A6.1 of this Guarantee Agreement;
“A-Loan”
means a loan by the Administrator to a Producer in accordance with the requirements of the OIC, any Minister’s Directions, the Guidelines and this Guarantee Agreement;
“A-Loan Agreement”
means the agreement that sets out the terms and conditions upon which the Administrator will provide an A-Loan to a Producer;
“Business Day”
means any working day, Monday to Friday inclusive, but excluding statutory and other holidays on which the Government of Ontario has elected to be closed for business;
“Claim”
means a claim or demand for payment on the Guarantee by the Administrator to the Minister pursuant to the terms and conditions of this Guarantee Agreement;
“Crown”
means Her Majesty the Queen in Right of Ontario;
“Effective Date”
means the date on which this Guarantee Agreement is effective, as set out under section B1 of Schedule “B” of this Guarantee Agreement;
“Expiration Date”
means the date on which this Guarantee Agreement will expire, as set out under section B2 of Schedule “B” of this Guarantee Agreement, unless amended, extended, renewed or terminated prior to this date in accordance with the terms and conditions of this Guarantee Agreement;
“Formal Demand”
means a declaration of acceleration of the repayment of the A-Loan made by the Administrator to a Producer in accordance with the provisions of the A-Loan Agreement;
“Guarantee”
means the promise to pay contained in section A2.1 of this Guarantee Agreement;
“Guarantee Agreement”
means this agreement;
“Guidelines”
means any written documents setting out the criteria governing the operation of the Program and posted on the Ministry’s Website;
“Holdback Fund”
means the fund where the Producer Holdback is deposited;
“Interest”
means the interest payable in respect of an L-Loan or an A-Loan, as set out in the L-Loan Agreement or the A-Loan Agreement, as the case may be, but does not include any fees, fines, commissions or other similar charges or expenses or any cost of collection or enforcement of a security interest, any repayment of credit advanced or any insurance charge, official fee or any amount required to be paid on account of applicable taxes;
“Lender”
includes Farm Credit Canada, or successor entity, as well as any bank to which the Bank Act (Canada) applies or a trust company, credit union or caisse populaire licensed to carry on business as such in Ontario and has been approved by the Minister to provide loans under the Program;
“L-Loan”
means a loan by the Lender to the Administrator in accordance with the requirements of the OIC, any Minister’s Directions, the Guidelines and this Guarantee Agreement;
“L-Loan Agreement”
means the agreement that sets out the terms and conditions upon which the Lender will provide an L-Loan to the Administrator;
“Material Adverse Change”
means a change in the financial or other condition of the Administrator, or in the state of circumstances of any property subject to a security interest in relation to the L-Loan, that in the opinion of a reasonable and prudent lender would be considered likely to cause a significant diminution in the earnings power or value of the Administrator’s business or in the ability of the Administrator to perform any of its obligations with respect to the L-Loan;
“Minister”
means the Minister of Agriculture, Food and Rural Affairs or such other Minister who may be designated from time to time as the responsible Minister in relation to the Ministry of Agriculture, Food and Rural Affairs Act or the Program, as the case may be, in accordance with the Executive Council Act or any other Act of the Legislature that allows another Minister to be designated as the responsible Minister, unless the context indicates otherwise;
“Minister’s Direction”
means a direction the Minister issues pursuant to sections 14 (8) or 14(9) of the OIC;
“Ministry”
means the ministry of the Minister;
“Notice”
means any communication given or required to be given pursuant to this Guarantee Agreement;
“Notice Period”
means the period of time within which the Administrator is required to remedy an Administrator Event Of Default, and includes any such period or periods of time by which the Minister considers it reasonable to extend that time;
“Party”
means the Minister or the Administrator, depending on the context;
“Parties”
means the Minister and the Administrator;
“Person”
means a legally-recognized entity and may include an individual or a corporation;
“Producer”
means a Person that:
  1. Is in the business of producing ginseng in Ontario, or
  2. Has produced ginseng in Ontario and holds said ginseng in storage in Ontario,
    and has an A-Loan issued under the Program;
“Producer Event Of Default”
means an event of default or breach of a term or condition set out in the A-Loan Agreement;
“Producer Holdback”
means the amount of money the Administrator is required to hold back from each A-Loan it provides to a Producer under the Program;
“Program”
means the Ginseng Storage Loan Guarantee Pilot Program;
“Program Year”
means the period of April 1 of one calendar year until March 31 of the following calendar year;
“Requirements Of Law”
includes all applicable requirements of law, as may be set out in statutes, regulations, by-laws, codes, rules, ordinances, official plans, approvals, permits, licenses, authorizations, decrees, injunctions, orders and declarations or any other similar requirement of law that could be imposed on a Person from authorities having jurisdiction over that Person;
“Term”
means the period of time beginning on the Effective Date of this Guarantee Agreement and ending on the Expiration Date of this Guarantee Agreement, unless amended or terminated prior to this date in accordance with the terms and conditions of this Guarantee Agreement; and
“Total Guaranteed Amount”
means up to one hundred thirty million dollars ($130,000,000.00), which is the maximum aggregate total of all A-Loans allowed to be outstanding at any one time.

A1.3  Acronyms. In this Guarantee Agreement, the following acronyms will have the following meanings:

“FAA”
means the Financial Administration Act;
“FIPPA”
means the Freedom of Information and Protection of Privacy Act; and
“OIC”
means the Order-in-Council establishing the Program.

A1.4  Conflict. In the event of a conflict between Schedule “A” of this Guarantee Agreement and any other Schedule of this Guarantee Agreement, the terms and conditions set out in Schedule “A” of this Guarantee Agreement will prevail.

Article A2
The Guarantee

A2.1  Payment Of Guarantee. The Minister agrees, subject to the terms and conditions of the OIC, any Minister’s Directions, the Guidelines and this Guarantee Agreement, to pay to the Administrator the repayment of an amount not to exceed twenty-five percent (25%) of the Total Guaranteed Amount for all A-Loans issued under the Program in any given Program Year, together with all accrued but unpaid Interest, which includes any unpaid and/or accelerated Interest due and owing by the Producer to the Administrator pursuant to an A-Loan Agreement, to the date of payment by the Minister to the Administrator, calculated at the rate, both before and after default, set out in the A-Loan Agreement payable by the Producer under the A-Loan Agreement.

A2.2  Greater Clarity On Payment Of Guarantee. For greater clarity, the maximum amount payable by the Minister under section A2.1 of this Guarantee Agreement is ninety-eight percent (98%) of the principal and Interest for each individual A-Loan up to twenty-five percent (25%) of the Total Guaranteed Amount for all A-Loans issued under the Program in any given Program Year.

A2.3  Conditions Precedent To Paying On The Guarantee. The following are conditions precedent to the Guarantee becoming payable:

  1. The A-Loan was not issued in contravention of the requirements set out under the OIC, any Minister’s Directions, the Guidelines or this Guarantee Agreement;
  2. The Administrator followed the requirements set out in the OIC, any Minister’s Direction, the Guidelines and this Guarantee Agreement in relation to administering or enforcing the A-Loan; and
  3. The Claim does not relate to any funds the Lender advanced to the Administrator under an L-Loan Agreement after a Minister’s Direction was issued pursuant to section 14(9) of the OIC and the Administrator has, in turn, issued A-Loans with those funds.

A2.4  Term Of Guarantee. Subject to section A2.3 of this Guarantee Agreement, the Guarantee will be in effect during the term of the A-Loan that falls within the Effective Date and Expiration Date of this Guarantee Agreement.  If a Producer Event of Default occurs during the term of the A-Loan and the Minister is given a Notice thereof, the Guarantee will continue in force and the Administrator is capable of making a Claim on the Guarantee in respect of such A-Loan during the applicable enforcement period until such A-Loan has been repaid in full.

A2.5  Where Guarantee Will Be Terminated. Notwithstanding section A2.4 of this Guarantee Agreement, the Guarantee will terminate with respect to an A-Loan:

  1. Upon the Minister becoming a trustee of the Holdback Fund;
  2. At the end of the term of all outstanding A-Loans or the Program; or
  3. Upon the Minister notifying the Administrator that the Minister is terminating the Guarantee insofar as it applies to an A-Loan.

A2.6  Administrator May Claim On Guarantee. Notwithstanding anything else contained herein, the Administrator may claim under this Guarantee Agreement by so notifying the Minister within thirty (30) Business Days of the termination of this Guarantee Agreement under section A2.5 of this Guarantee Agreement.

Article A3
The Administrator’s Roles And Responsibilities Under The Guarantee Agreement

A3.1  Execution Of Guarantee Agreement. The Administrator represents and warrants that it has:

  1. The full power and authority to enter into this Guarantee Agreement; and
  2. Taken all necessary actions to authorize the execution of this Guarantee Agreement.

A3.2  Administrator Bound. The Administrator agrees to be bound by the terms and conditions set out in the OIC, any Minister’s Directions, the Guidelines, the L-Loan Agreement, the A-Loan Agreement and this Guarantee Agreement.  For greater certainty, any breach of a term of condition of the OIC, a Minister’s Direction, the Guidelines, the L-Loan Agreement or the A-Loan Agreement will be deemed to be a breach of this Guarantee Agreement.

A3.3  Administrator’s Covenants, Representations And Warranties. The Administrator covenants, represents and warrants the following:

  1. The following representations and warranties are true:
    1. It is duly incorporated and in good standing under the laws of Canada and Ontario and is duly qualified to transact business in each jurisdiction where the nature and extent of its business and property require the same and will continue to remain so until it no longer provides A-Loans to Producers under the Program,
    2. It is in compliance with all Requirements Of Law as of the Effective Date of this Guarantee Agreement and will continue to be in compliance with all Requirements Of Law until it no longer provides A-Loans to Producers under the Program,
    3. It has the authority and any necessary approval to enter into the L-Loan Agreement and this Guarantee Agreement and carry out their terms and conditions and that it is not subject to any other agreement that would in any way interfere with the rights of the Minister under this Guarantee Agreement,
    4. It has the full power to perform and observe all of the terms and conditions of this Guarantee Agreement and that it will continue to validly exist until it no longer provides A-Loans to Producers under the Program,
    5. It will take all necessary action to maintain itself in good standing with respect to all Requirements Of Law necessary to carry out its business, hold property and to perform all terms and conditions under this Guarantee Agreement and to preserve its legal capacity until it no longer provides A-Loans to Producers under the Program,
    6. It will not issue an A-Loan in an amount greater than the secured interest in ginseng that is held in storage,
    7. Each A-Loan will be repaid on the earlier of a demand for payment or within the time period set out in the A-Loan Agreement,
    8. Each A-Loan will only repayable at the end of its term and does not require any interim payments to be made,
    9. Each A-Loan will allow for the repayment of any all or a part of any principal or Interest owing under the A-Loan at any time without notice, penalty or bonus,
    10. Each A-Loan Agreement prohibits the Producer from assigning it or any money advanced under the A-Loan Agreement,
    11. It will exercise due diligence and care in the administration of each A-Loan in accordance with normal commercial lending practices, and
    12. It will immediately notify the Minister if there is a default by a Producer on any payment under its A-Loan Agreement or if it becomes aware that the Producer may be in breach of any other term or condition of the A-Loan Agreement and/or any term or condition of the OIC or the Guidelines;
  2. It will make advances under the A-Loan Agreements in accordance with its usual lending practices, provided that no advances under any A-Loan Agreement will be applied by the Administrator to reduce other indebtedness of the applicable Producer to the Administrator;
  3. It will apply Producer payments to each A-Loan in accordance with the terms and conditions of the applicable A-Loan Agreement; and
  4. Unless otherwise provided for in this Guarantee Agreement, any information that the Administrator provided to the Minister in relation to this Guarantee Agreement was true and complete at the time the Administrator provided it to the Minister.

A3.4  Additional Covenants. The Administrator undertakes to advise the Minister in writing within five (5) Business Days of:

  1. Any changes that affect its representations, warranties or covenants under this Article A3 of Schedule “A” of this Guarantee Agreement during the Term of this Guarantee Agreement; and
  2. Any actions, suits, or other proceedings which could or would reasonably prevent the Administrator from complying with the terms and conditions of this Guarantee Agreement.

A3.5  Loan And Security. The Administrator will:

  1. Not assign the A-Loan Agreement to any other Person other than the Lender without the Minister’s prior written consent;
  2. Provide to the Minister prompt written notice of the receipt of any offer of sale, lease or other disposition whatsoever of any assets at any time following a Formal Demand; and
  3. Assign any security provided under an A-Loan Agreement to the Minister in the event the Administrator makes a Claim in relation to that A-Loan Agreement, subject to any interests of the Lender in such A-Loan Agreement and such security.

A3.6  Inadvertent Breach Of Section A3.5 Of Guarantee Agreement. In the event that the Administrator has inadvertently failed to comply with the requirements of section A3.5 of this Guarantee Agreement, the liability of the Minister will not be extinguished but will be reduced to the extent that the Minister has suffered or incurred any liability or damages, losses or expenses by reason of the failure by the Administrator to comply with such requirements.

A3.7  Reporting To The Minister. The Administrator will provide the Minister with all reports set out in the Administrative Agreement that include the content requested in the Administrative Agreement by the date set out in the Administrative Agreement.  For greater certainty, a failure to meet the reporting requirements set out in the Administrative Agreement will be an Administrator Event Of Default for the purposes of this Guarantee Agreement.

In addition, the Administrator will make available to the Minister at any time upon written request and within the time period set out in the Notice such information pertaining to the A-Loans as the Minister may reasonably request and which the Administrator has in its possession or may obtain through a Producer and any other matter, which, in the opinion of the Minister, acting reasonably, may affect the liability of the Minister under the Guarantee.

A3.8  Assigning A-Loan Without Minister’s Consent Voids Guarantee. If the Administrator assigns an A-Loan to any other Person other than the Lender without the Minister’s prior written consent, this Guarantee Agreement will become null and void in relation to that assigned A-Loan.

A3.9  Provision Of Supporting Documents. Upon request, and within the time period indicating in the Notice, the Administrator will provide the Minister with proof of the matters referred to in this Article 3 of Schedule “A” of this Guarantee Agreement.  For greater certainty, the Administrator will not be obligated to provide any such proof prior to advancing any A-Loan unless so requested by the Minister.

Article A4
Disclosure Of Information Provided By The Administrator

A4.1  FIPPA. The Administrator acknowledges that the Crown is bound by the FIPPA.

A4.2 Disclosure Of Information. Any information provided to the Minister in connection with the Program may be subject to disclosure in accordance with the FIPPA and any other Requirements of Law.

Article A5
Claims On The Guarantee

A5.1 Administrator Will Not Make A Claim On Guarantee. The Administrator shall not make a Claim on the Guarantee in respect of any A-Loan provided to a Producer provided under this Guarantee Agreement until:

  1. The Administrator has used reasonable steps to recover on the outstanding debt from such Producer by liquidating any and all security the Administrator holds in relation to that Producer’s A-Loan to pay any outstanding debt owing under its A-Loan; and
  2. The Administrator has given Notice of the Claim to the Minister that includes:
    1. A written statement of the principal amount and Interest owing under the A-Loan,
    2. A summary of actions the Administrator has taken as of the date set out in the Notice to collect on the outstanding debt owing under the A-Loan, and
    3. A written statement setting out any remaining security the Administrator holds in relation to the A-Loan and its location,

      pursuant to section A8.1 of this Guarantee Agreement.

A5.2 Guarantee Payment. The Minister will not pay any Claim under this Guarantee Agreement until:

  1. A Producer Event of Default has occurred, the Administrator has given Notice of the Producer Event of Default to the Producer with a copy to the Minister at the same time and the Producer Event of Default has not been remedied within the time permitted under the A-Loan Agreement;
  2. The Administrator has made a Formal Demand to Producer with a copy to the Minister at the same time; and
  3. The Producer has failed to comply with the Formal Demand made by the Administrator under section A5.2(b) of this Guarantee Agreement; and
  4. The Administrator has followed the process set out under section A5.1 of this Guarantee Agreement to recover on the debt owing under the A-Loan.

A5.3  Minister To Make Reasonable Efforts To Pay. Subject to any liquidation of security pursuant to section A5.2 of this Guarantee Agreement, the Minister will make all reasonable efforts to pay any valid Claim for payment hereunder within one hundred twenty (120) Business Days of the Minister’s receipt of the documentation provided for in section A5.1(b) of this Guarantee Agreement.

5.4  Administrator To Pay Minister. If, after the Minister has paid a Claim by the Administrator pursuant to this Guarantee Agreement, the Administrator recovers any monies in respect of the A-Loan, the Administrator will pay to the Minister an amount equal to the difference between: (a) the amount paid by the Minister to the Administrator and (b) the amount that would have been payable by the Minister to the Administrator if the Producer’s indebtedness to the Administrator under the A-Loan Agreement had been reduced by the amount of the monies recovered by the Administrator (after the deduction of all reasonable expenses incurred in connection with such recovery).  The Administrator will follow any directions the Minister issues with respect to how the Administrator should pay the Minister under this section A5.4 of the Guarantee Agreement.

A5.5  No Deduction For Reasonable Expenses Incurred Unless Administrator Approved To Do So. Despite section A5.4 of this Guarantee Agreement, the Administrator shall not deduct any reasonable expenses that the Administrator incurred in relation to the recovery of money unless the Minister of Finance has authorized the Administrator to retain such expenses pursuant to section 2(4) of the FAA.

A5.6  Submission Of Invoice. In the event that the Minister of Finance has not authorized the Administrator to retain the expenses it incurred to recover the money pursuant to section 2(4) of the FAA, the Administrator will remit all money that it has recovered to the Minister and submit an invoice to the Minister for the reasonable expenses it incurred to recover the money.

A5.7  Minister Is Subrogated To Administrator’s Claims. Subject to the prior rights of the Lender, if the Minister has paid to the Administrator any amount under this Guarantee Agreement, the Minister is subrogated in and to all the rights of recovery of the Administrator in respect of the A-Loan and any security held on that A-Loan and is entitled to exercise all of the rights, powers and privileges that the Administrator has or may exercise in respect of the A-Loan and any security held on that A-Loan, including the right to commence or continue any court action to execute any release, transfer, sale or assignment, or in any way to collect and realize on any security or enforce the A-Loan.

A5.8  Administrator To Reasonably Cooperate With Minister. In the event that the Minister conducts any court action in the exercise of the Minister’s rights under section A5.7 of this Guarantee Agreement, the Administrator agrees to provide any cooperation reasonably requested by the Minister in relation to the conduct of such action.  Such cooperation would include, where reasonable, attendance of hearings and trials, assistance in effecting settlements, securing and giving evidence and obtaining the attendance of witnesses.  The Minister will reimburse the Administrator for any actual out-of-pocket expenses incurred in the provision of such cooperation as reasonably determined by the Administrator, including employee time.

A5.9  Payment of Guarantee. Upon payment of the Claim by the Minister to the Administrator, the Administrator will:

  1. Promptly assign the A-Loan Agreement and any security to the Minister, subject to the prior rights of the Lender, to the extent of the amount paid under the Guarantee whereupon the Minister will enjoy all of the Administrator’s rights, powers and privileges therein; and
  2. Release and forever discharge the Minister in writing from all manner of actions, causes of action, suits, covenants and demands whatsoever, whether at law or in equity, which the Administrator has or ever had, arising out of or in any way connected with the Guarantee provided under this Guarantee Agreement in relation to the A-Loan Agreement.

Article A6
Default, Enforcement and Termination

A6.1  Administrator Event Of Default. Each and everyone one of the following events is an Administrator Event Of Default:

  1. If, in the opinion of the Minister, the Administrator fails to comply with a term or condition of:
    1. The OIC,
    2. A Minister’s Direction,
    3. The Guidelines,
    4. This Guarantee Agreement,
    5. The L-Loan Agreement,
    6. An A-Loan Agreement, or
    7. The Administrative Agreement;
  2. If, in the opinion of the Minister, any covenant, representation or warranty provided by the Administrator in relation to the Program is materially untrue in any respect;
  3. If an order is made or an effective resolution is passed for the winding up, or liquidation or dissolution of the Administrator or the Administrator is otherwise dissolved or ceases to carry on its operations;
  4. If the Administrator admits in writing its inability to pay its debts generally as they become due, voluntarily suspends transactions of its usual business, becomes insolvent, bankrupt, makes an assignment for the benefit of its creditors, or a receiver or manager, court appointed or otherwise, is appointed for its assets or if the Administrator takes the benefit of any statute from time to time in force relating to bankrupts or insolvent debtors;
  5. If, in the opinion of the Minister, a Material Adverse Change occurs such that the viability of the Administrator as a going concern is threatened; or
  6. If the Administrator has submitted false or misleading information to the Minister.

A6.2  Waiver. The Minister may at any time waive any Administrator Event Of Default which may have occurred provided the Minister notifies Administrator in writing prior to the waiver and such a waiver does not extend to, or be taken in any manner whatsoever to affect any subsequent Administrator Event Of Default or the right to remedies resulting therefrom and that no such waiver will be, or will be deemed to constitute, a waiver of such Administrator Event Of Default unless such waiver is in writing.

A6.3  Remedies On Default. The Minister has the following remedies if an Administrator Event Of Default occurs:

  1. Terminate this Guarantee Agreement in relation to all or part of an A-Loan or all or part of all A-Loans, and
  2. Use any other legal remedies the Minister may have under this Guarantee Agreement, at law or equity.

A6.4 Minister May Terminate Guarantee Agreement Upon Notice. Notwithstanding anything else contained herein, the Minister may terminate this Guarantee Agreement at any time without liability, penalty or costs upon giving at least thirty (30) Business Days’ Notice to the Administrator.  Where the Minister terminates this Guarantee Agreement pursuant to this section A6.4 of the Guarantee Agreement, the Administrator may, within thirty (30) Business Days of this Guarantee Agreement being terminated pursuant to this section A6.4 of the Guarantee Agreement, call upon the Guarantee provided under this Guarantee Agreement if required in order to be repaid any funds owing by any Producer under any A-Loan the Administrator made that is in default even though the realization has not yet been completed, and the Minister will pay upon the Guarantee in accordance with the terms and conditions set out in this Guarantee Agreement.

A6.5  Extension And Renewal. Unless the Minister gives Notice to the Administrator at least ninety (90) days prior to the Expiration Date that this Guarantee Agreement will not be extended or renewed, this Guarantee Agreement will automatically renew for a further period of one year on the then applicable Expiration Date.

Article A7
Repayment

A7.1  Repayment Of Overpayment. If at any time during the Term of this Guarantee Agreement the Minister provides money in excess of the amount to which the Administrator is eligible to receive under this Guarantee Agreement, the Minister may:

  1. Deduct an amount equal to the excess money from any further payments the Administrator may receive under this Guarantee Agreement; or
  2. Demand that the Administrator pay an amount equal to the excess money to the Minister.

A7.2  Debt Due. If, pursuant to this Guarantee Agreement:

  1. The Minister demands the payment of any money or an amount equal to any money from the Administrator; or
  2. The Administrator owes any money or an amount equal to any money to the Crown, whether or not their return or repayment has been demanded by the Minister,

    such money or other amount will be deemed to be a debt due and owing to the Crown by the Administrator and the Administrator will pay or return the amount to the Minister immediately, unless the Minister directs otherwise.

A7.3 Interest Rate. The Minister may charge the Administrator interest on any money owing by the Administrator at the then current interest rate charged by the Province of Ontario on accounts receivable.

A7.4 Payment Of Money To The Crown. The Administrator will pay any money owing to the Crown by cheque payable to the “Ontario Minister of Finance” and delivered to the Minister at the address referred to in section A8.1 of Schedule “A” of this Guarantee Agreement.

A7.5  Repayment. Without limiting the application of section 43 of the FAA, if the Administrator fails to repay any amount owing under this Guarantee Agreement, the Crown may deduct any unpaid amount from any money payable to the Administrator by the Crown.

Article A8
Notice

A8.1 Notice In Writing And Addressed. Notice will be in writing and will be delivered by email, postage-paid mail, personal delivery or fax and will be addressed to the Minister and the Administrator respectively as set out in section B3 of Schedule “B” of this Guarantee Agreement or as either Party later designates to the other by Notice.

A8.2 Notice Given. Notice will be deemed to have been given:

  1. In the case of postage-paid mail, five (5) Business Days after the Notice is mailed; or
  2. In the case of email, personal delivery or fax, one (1) Business Day after the Notice is delivered.

A8.3 Postal Disruption. Despite section A8.2(a) of Schedule “A” of this Guarantee Agreement, in the event of a postal disruption,

  1. Notice by postage-prepaid mail will not be deemed to be received; and
  2. The Party giving Notice will provide Notice by email, personal delivery or fax.

Article A9
Consent By Minister And Compliance By Administrator

A9.1 Consent. When the Minister provides consent pursuant to this Guarantee Agreement, that consent will not be considered valid unless that consent is in writing and the person providing that consent indicates in the consent that that person has the specific authority to provide that consent.  The Minister may also impose any terms and conditions on such consent and the Administrator will comply with such terms and conditions.

Article A10
Severability Of Provisions

A10.1 Invalidity Or Unenforceability Of Any Provision. The invalidity or unenforceability of any provision in this Guarantee Agreement will not affect the validity or enforceability of any other provision of this Guarantee Agreement.  Any invalid or unenforceable provision will be deemed to be severed.

Article A11
Waiver

A11.1 Waivers In Writing. If a Party fails to comply with any term or condition of this Guarantee Agreement that Party may only rely on a waiver of the other Party if the other Party has provided a written waiver in accordance with the Notice provisions in Article A8 of Schedule “A” of this Guarantee Agreement.  Any waiver must refer to a specific failure to comply and will not have the effect of waiving any subsequent failures to comply.  For greater clarity, where the Minister chooses to waive a term or condition of this Guarantee Agreement, such waiver will only be binding if provided by a person who indicates in writing that he or she has the specific authority to provide such a waiver.

Article A12
Independent Parties

A12.1 Parties Independent. The Administrator acknowledges and agrees that it is not an agent, joint venturer, partner or employee of the Crown and the Administrator will not represent itself in any way that might be taken by a reasonable person to suggest that it is or take any actions that could establish or imply such a relationship.

Article A13
Assignment Of Guarantee Agreement

A13.1 No Assignment. The Administrator will not assign this Guarantee Agreement to any other Person other than the Lender without obtaining the Minister’s prior written consent.

Article A14
Guarantee Agreement Is Binding

A14.1 Guarantee Agreement Is Binding. All rights and obligations contained herein will extend to and be binding on the Parties’ respective heirs, executors, administrators, successors and permitted assigns.

Article A15
Funds Are Part Of A Social Or Economic Program

A15.1 Funds Are Part Of A Social Or Economic Program. The Administrator acknowledges and agrees that any money provided under this Guarantee Agreement is for the administration of social or economic programs or the provision of direct or indirect support to members of the public in connection with social or economic policy.

Article A16
Governing Law

A16.1 Governing Law.  This Guarantee Agreement and the rights, obligations and relations of the Parties will be governed by and construed in accordance with the laws of the Province of Ontario and the applicable federal laws of Canada.  Any actions or proceedings arising in connection with this Guarantee Agreement will be conducted in the Courts of Ontario, which will have exclusive jurisdiction over such proceedings.

Article A17
Further Assurances

A17.1 Agreement Into Effect.  The Administrator will provide such further assurances as the Minister may request from time to time with respect to any matter to which the Guarantee Agreement pertains and will otherwise do or cause to be done all acts or things necessary to implement and carry into effect the terms and conditions of this Guarantee Agreement to their full extent.

Article A18
Rights And Remedies Cumulative

A18.1 Rights And Remedies Cumulative.  The rights and remedies of the Minister under this Guarantee Agreement are cumulative and are in addition to, and not in substitution of, any of its rights and remedies provided by law or in equity.

Article A19
Joint Authorship

A19.1 Joint Authorship Of Agreement.  The Parties will be considered joint authors of this Agreement and no provision herein will be interpreted against one Party by the other Party because of authorship.  No Party will seek to avoid a provision herein because of its authorship through recourse to a third party, court, tribunal or arbitrator.

Article A20
Survival

A20.1 Survival.  The rights and obligations set out in Articles A2, A4, A6, A7, A8, A10, A12, A15, A16, A18 and A19 as well as sections A3.7 (to the extent that any reports are outstanding), A5.3, A5.4, A5.5, A5.6, A5.7, A5.8 and A5.9 of this Guarantee Agreement and all applicable definitions, cross-referenced provisions and Schedules will continue in full force and effect for a period of seven (7) years from the Expiration Date or termination of this Guarantee Agreement.

Schedule “B”
Operational Requirements of the Guarantee Agreement

B1  Effective Date. The Effective Date of this Guarantee Agreement is April 1, 2022.

B2  Expiration Date. The Expiration Date of this Guarantee Agreement is March 31, 2028.

B3  Providing Notice. All Notices under this Guarantee Agreement will be provided to:

To The Minister
Name:
Address:
Attention:
Fax:
Email:

To The Administrator
Name:
Address:
Attention:
Fax:
Email:

or any other Person identified by the Parties in writing through a Notice provided under this Guarantee Agreement.

Order in Council 572/2022