General I. Default, intervention and remedies

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December 8, 2019
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Last Updated:
December 8, 2019
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Matt Dolf
| Version: 2
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December 1, 2019
by
Matt Dolf
  1. Event of Default by CHF BC. Any of the following events will constitute an Event of Default by CHF BC under this Agreement:
    1. failure to materially meet the provisions of this Agreement that are the responsibility of CHF BC;
    2. CHF BC fails to remain in good standing under the Cooperative Association Act, or becomes insolvent or otherwise acknowledges its insolvency, or commits an act of bankruptcy, or makes an assignment for the benefit of its creditors, or an order is made or a resolution is passed, or a petition is filed for the liquidation or winding up of CHF BC. or a receiver is appointed to manage any of the assets of CHF BC, or CHF BC ceases, in the opinion of the City, to operate;
    3. CHF BC is in breach of or fails to comply with any law. by-law or regulation applicable to the performance of its obligations hereunder;
    4. any material representation or warranty made by CHF BC in accepting this Agreement is found to be untrue or incorrect; and
    5. if CHF BC knew or ought to have known any significant information. statement, certificate, report or other document furnished or submitted by, or on behalf of. CHF BC pursuant to, or as a result of. this Agreement is untrue or incorrect.
  2. Event of Default by the Co-op. Any of the following events will constitute an Event of Default by the Co-op under this Agreement:
    1. the Co-op is in breach of the Lease;
    2. the Co-op is in breach of the Leasehold Mortgage;
    3. failure to materially meet the Performance Standards or any other material provision of this Agreement;
    4. the Co-op fails to remain in good standing under the Cooperative Association Act, or becomes insolvent or otherwise acknowledges its insolvency, or commits an act of bankruptcy, or makes an assignment for the benefit of its creditors, or an order is made or a resolution is passed, or a petition is filed tor the liquidation or winding up of the Co-op, or a receiver is appointed to manage any of the assets of the Co-op, or the Co-op ceases, in the opinion of the City, to operate;
    5. the Co-op is in breach of or fails to comply with any law, by-law or regulation applicable to the performance of its obligations hereunder;
    6. the Co-op permits any sum which is not disputed to be due by it to the City or pursuant to the Leasehold Mortgage, to remain unpaid after legal proceedings have been commenced to enforce payment thereof;
    7. any material representation or warranty made by the Co-op in accepting this Agreement is found to be untrue or incorrect; and
    8. if the Co-op knew or ought to have known any significant information, statement, certificate, report or other document furnished or submitted by, or on behalf of, the Co- op pursuant to, or as a result of, this Agreement is untrue or incorrect.
    9. If the Co-op fails to maintain its membership in good standing in CHF BC and CHF Canada or their successor organization.
  3. Event of Default by the City. Any of the following events will constitute an Event of Default by the City under this Agreement:
    1. failure to materially perform the provisions of this Agreement that are the responsibility of the City;
    2. the City is in breach of or fails to comply with any law, by-law or regulation applicable to the performance of its obligations hereunder;
    3. any material representation or warranty made by the City in accepting this Agreement is found to be untrue or incorrect; and
    4. if the City knew or ought to have known any significant information, statement, certificate, report or other document furnished or submitted by, or on behalf of, the City pursuant to, or as a result of, this Agreement is untrue or incorrect
  4. Subject to Clause J. 1 below, the following is the procedure for intervention by the City upon the occurrence of an Event of Default by the Co-op or CHF BC (subject to the provisions of the Lease or the Leasehold Mortgage, as applicable, where the Event of Default arises from a breach of either of those agreements):
    1. Communication. The City will give the Co-op and CHF BC written notice of the Event of Default, which notice will provide for a reasonable time for the Co-op or CHF BC, as applicable, to respond to the notice of Event of Default by providing further information concerning the Event of Default.
    2. Action Plan. The City, the Co-op and CHF BC will agree on an action plan to cure the Event of Default, including a schedule for implementation of the action plan, identification of the resources available to the Co-op and CHF BC to implement the action plan, and the dates on which the City will review progress on implementation of the action plan.
    3. On Watch. If the Co-op or CHF BC, as applicable, does not cure the Event of Default within a reasonable time, the City may place the Co-op or CH FBC, as applicable, "On Watch", which means that:
      1. this is a warning that the City will intervene further if the Event of Default is not cured;
      2. the City will monitor the operation of the Development and the performance of obligations under this Agreement by the Co-op or CHF BC, as applicable, more often and in more depth, including a management audit before the end of a Review Period; and
      3. if the Co-op or CHF BC, as applicable, makes progress in curing the Event of Default, the City will lessen its monitoring and the On Watch status may be withdrawn.
    4. Co-management. The City may appoint a manager to work with and supervise the Co-op, in operating the Development and in curing the Event of Default, in order to:
      1. improve the Co-op's, management of the Development and return operation of the Development to the Co-op, as applicable, at some future date; and
      2. provide education, training and other necessary resources to the Co-op to cure the Event of Default.
  5. Mediation. If the parties have a dispute arising out of or in connection with this Agreement, or in respect of any defined legal relationship associated with it or from it (other than the Lease or the Leasehold Mortgage), the parties agree to try to resolve the dispute by participating in a structured negotiation conference with a mediator agreed upon by the parties or, failing Agreement, under the Commercial Mediation Rules of the British Columbia International Commercial Arbitration Centre, in which case the appointing authority is the British Columbia International Commercial Arbitration Centre.
  6. Dispute Resolution. If the process of mediation above fails, the parties agree that the following dispute resolution process will be used:
    1. a meeting will be held promptly between the parties, attended by individuals with decision making authority regarding the dispute, to attempt in good faith to negotiate a resolution of the dispute;
    2. if, within fourteen (14) days after such meeting or such further period agreed to by the parties in writing, the parties have not succeeded in negotiating a resolution of the dispute, the parties will submit the dispute to arbitration; and
    3. the remaining issues in dispute will be determined by arbitration under the Commercial Arbitration Act, and the decision of the Arbitrator will be final and binding and will not be subject to appeal on a question of fact, law or mixed fact and law.

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