6. [Repealed, SOR/95-470, s. 7]

7. Where a loan is made in respect of the establishment, expansion or modernization of a commercial enterprise designed to serve food or drink, no loan insurance shall be provided unless that commercial enterprise carries out activities that are described in the schedule under the heading “SECTOR 3: TOURISM”.

8. The amount of loan insurance provided to a lender shall not exceed, on the date of a formal demand, 90 per cent of the principal amount outstanding on the loan that is owed by the applicant pursuant to a loan agreement.

9. Every lender shall pay to the Agency in advance an insurance fee that is calculated in accordance with the following formulas:

• (a) the fee payable on the date of the first disbursement,

  A × B × 0.01

• (b) the fee payable on the date of each subsequent disbursement,

  A × B × C/365 × 0.01, and

• (c) the fee payable on each anniversary date of the first disbursement until the earlier of the date of the formal demand and the date that the loan is repaid

  A × D × 0.01

  where

  A 

  is the percentage of the loan that the Agency agrees to insure under the loan insurance agreement,

  B 

  is the amount of the disbursement,

  C 

  is the number of days remaining between the date of the disbursement and the next anniversary of the first disbursement under the loan agreement, and

  D 

  is the amount of the loan that is outstanding under the loan agreement on the anniversary date of the first disbursement.

10. No claim made under a loan insurance agreement shall be paid until a formal demand has been made by the lender to the applicant and the lender has provided evidence to the Agency that the lender has taken all reasonable steps to protect the lender’s rights and to realize on the security for the loan made under the loan agreement.

11. A claim by a lender shall contain all of the information that is required by the Agency in order to determine the amount that is payable.

• 12. (1) The maximum amount payable by the Agency to a lender in respect of a claim shall be the lesser of

  • (a) the percentage stipulated in the loan insurance agreement, of the loss incurred by the lender, and

  • (b) the percentage, stipulated in the loan insurance agreement, of the principal amount outstanding on the loan on the date of the formal demand.

• (2) For the purpose of paragraph (1)(a), “loss” means the total of

  • (a) the principal amount of the loan that is outstanding and the amount of interest that is unpaid on the date of the formal demand,

  • (b) reasonable legal fees, disbursements and other expenses paid by the lender to collect or to endeavour to collect the amounts referred to in paragraph (a) or any portion thereof,

  • (c) disbursements made by the lender to protect any security provided for the loan, and

  • (d) interest on the amounts referred to in paragraphs (a) to (c) calculated beginning on the date of the formal demand until the date the Agency pays the lender’s claim,

    • (i) at the rate stipulated in the loan agreement,

      • (A) for a period not exceeding 180 days beginning on the date of the formal demand, and

      • (B) for an additional period not exceeding 180 days, where the Agency and the lender have agreed to wait for the expiration of that additional period before realizing on the security or any portion thereof, and

    • (ii) at one-half the rate referred to in subparagraph (i) for any period after the period referred to in clause (i)(A) and, where applicable, the additional period referred to in clause (i)(B),

  less

  • (e) the total of

    • (i) the net amount realized on the security provided for the loan, and

    • (ii) any other amount recovered by the lender after the date of the formal demand that is in excess of all other indebtedness of the applicant to the lender.