Exhibit 10.19
DEBENTURE
CANADA No.: 1
PROVINCE OF QUEBEC Cdn. $20,000,000
WESTCON CANADA SYSTEMS (WCSI) INC./LES SYSTEMES WESTCON CANADA (WCSI)
INC., a body corporate duly incorporated under the laws of Canada, having its
head office at the City of Montreal, Borough of Lachine, Province of Quebec
(hereinafter called the "Company"), for value received, promises to pay, on
demand, but subject to the terms and conditions set out in the Credit Agreement
(as defined in the Deed of Hypothec hereinafter mentioned), to General Electric
Capital Canada Inc. in its capacity as Canadian Collateral Agent for the
Canadian Lenders (as defined in the Deed of Hypothec hereinafter mentioned) and
for itself as Canadian Collateral Agent (the "Agent") or to its order, at its
office located at at 00 Xxxx Xxxxxx West, in the City of Toronto, Province of
Xxxxxxx, X0X 0X0, the sum of TWENTY MILLION DOLLARS (Cdn.$20,000,000) in lawful
money of Canada, with interest thereon from the date hereof at the rate of
TWENTY-FIVE per cent (25%) per annum, both before and after maturity, with
interest on overdue interest at the same rate.
This Debenture is issued under and secured by a Deed of Hypothec (the
"Deed of Hypothec") bearing the date of June 12, 2003 executed by the Company
in favour of the Agent as fonde de pouvoir for the Debentureholders, and this
Debenture is subject to, and its holder is bound by, the provisions of the Deed
of Hypothec.
This Debenture may be transferred by its holder upon compliance with the
provisions of the Deed of Hypothec.
IN WITNESS WHEREOF the Company has caused this Debenture to be signed by
its undersigned representative and to be dated the 12th day of June, 2003.
WESTCON CANADA SYSTEMS (WCSI)
INC./LES SYSTEMES WESTCON CANADA
(WCSI) INC.
Per: /s/ Xxxx Xxxxxxxxxxx-Xxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxxxx-Xxxxxx
Title: Director
PLEDGE OF DEBENTURE
DATED June 12, 2003
GRANTED BY: WESTCON CANADA SYSTEMS (WCSI) INC./LES SYSTEMES
WESTCON CANADA (WCSI) INC., a legal person duly
constituted under the laws of Quebec, having its head
office at 0000 - 00xx Xxxxxx, Xxxxxxx of Lachine,
City of Montreal, Province of Xxxxxx, X0X 0X0
(the "Company")
IN FAVOUR OF: THE AGENT and THE CANADIAN LENDERS, as hereinafter
defined;
(each, a "Pledgee", and collectively, the "Pledgees")
WHEREAS the Company has issued a debenture in the amount of
Cdn.$20,000,000 pursuant to a deed of hypothec referred to therein, executed by
and between the Company and General Electric Capital Canada Inc. as fonde de
pouvoir on June 12, 2003 before Notary Xxxxxxxxx Xxxxxx (the "Hypothec"); and
WHEREAS the Company wishes to pledge such debenture to the Pledgees, as
security for the Indebtedness hereinafter defined;
NOW, THEREFORE, THE PARTIES HERETO HAVE AGREED AS FOLLOWS:
1. INTERPRETATION
1.1 Capitalized terms used herein and defined in the Hypothec shall have
the meaning ascribed to them in the Hypothec unless otherwise defined
herein.
1.2 The term "Agent" herein shall mean General Electric Capital Canada
Inc., acting in its capacity as Canadian Collateral Agent for the
Canadian Lenders and for itself as Canadian Collateral Agent,
appointed pursuant to the Credit Agreement and includes its
successors and assigns in such capacity.
1.3 The term "Canadian Lenders" herein shall mean each of the Canadian
Lenders under the Credit Agreement as well as any of their respective
successors and assignees as permitted under the Credit Agreement.
1.4 The term "Company" herein shall mean Westcon Canada Systems (WCSI)
Inc. (also known as Les Systemes Westcon Canada (WCSI) Inc.).
1.5 The term "Debenture" herein shall mean the debenture in the principal
amount of Cdn.$20,000,000 dated June 12, 2003, issued pursuant to the
Hypothec, and payable to the order of the Agent, and any rights
resulting therefrom, as well as any certificate evidencing same.
1.6 The term "Indebtedness" shall mean any and all obligations,
liabilities and indebtedness, and performance of all obligations and
agreements of the Company to the Canadian Collateral Agent, the
Canadian Lenders and the Canadian L/C Issuer arising under this
Agreement, the Credit Agreement or under the other Loan Documents,
whether now existing or hereafter incurred or arising, of every kind
and character, primary or secondary, direct or indirect, absolute or
contingent, and whether such indebtedness is from time to time
reduced and thereafter increased, or entirely extinguished and
thereafter reincurred, including, without limitation:
(a) all Canadian Advances (as defined in the Credit Agreement);
(b) all obligations arising out of any Canadian Lender's
reimbursement of Canadian L/C Issuer for draws made under
Canadian Letters of Credit (as defined in the Credit Agreement)
issued by Canadian L/C Issuer;
(c) all interest which accrues on any such indebtedness, until
payment of such indebtedness in full, including, without
limitation, all interest provided for under the Credit
Agreement;
(d) all other monies payable by the Company, and all obligations and
agreements of the Company to any of the Canadian Lenders or the
Canadian Collateral Agent pursuant to any of the Loan Documents;
(e) all obligations arising with respect to Swap Agreements (as
defined in the Credit Agreement) (exclusive of any foreign
exchange transactions or contracts);
(f) all monies payable by the Company, and all obligations and
agreements of the Company to any of the Canadian Lenders or the
Canadian Collateral Agent pursuant to any of the Loan Documents;
(g) all monies due, and to become due, pursuant to Sections 7.3,
7.4. and 7.5 of the Credit Agreement;
(h) all monies payable as herein provided; and
(i) all liabilities (including amounts charged to the Company
pursuant hereto), obligations, fees, charges, or costs
(including, without limitation, any fees or expenses that, but
for the provisions of the Bankruptcy and Insolvency Act
(Canada), would have accrued), guaranties, covenants and duties
owing by the Company to any of the Canadian Lenders or the
Canadian Collateral Agent of any kind and description pursuant
to or evidenced by any other Loan Document.
1.7 The term "Pledgee" herein shall mean the Agent and each of the Canadian
Lenders.
2. DELIVERY AND PLEDGE OF THE DEBENTURE
The Company confirms that it has concurrently herewith pledged the
Debenture in favour of the Pledgees by delivery of same to the Agent for the
benefit of the Pledgees. The Agent hereby acknowledges having received the
certificate representing the Debenture (certificate No. 1) on the date of this
agreement at the City of Montreal, Province of Quebec, and the Agent shall hold
same and exercise its rights as payee thereof for the benefit of the Pledgees.
3. SECURED INDEBTEDNESS
The Debenture and the pledge granted thereon shall secure the payment and
the performance of the Indebtedness.
4. AMOUNT OF THE PLEDGE
The amount for which the pledge is granted is Cdn.$20,000,000 in lawful
money of Canada, plus interest thereon at the rate of 25% per annum from the
date hereof.
5. COVENANTS
The Company hereby:
5.1 acknowledges that the Agent acting on its own behalf and on behalf of
each of the other Pledgees shall for all the purposes contemplated in
the Hypothec be deemed to be the holder of the Debenture pledged
hereunder and shall benefit from all of the rights of a
Debentureholder under the Hypothec;
5.2 covenants that, upon demand from the Agent, it shall perform all acts
and execute all deeds and documents necessary to give full effect to
this agreement and to ensure that it is at all times enforceable,
including without limitation the execution of any written
acknowledgement that the Debenture or any portion thereof is pledged
in favour of a Pledgee which is not named herein and that any
certificate representing the Debenture or any portion thereof is held
by the Agent on behalf and in favour of such Pledgee or its successor
or assign.
6. EVENT OF DEFAULT
6.1 Notwithstanding the fact that the Debenture is payable on demand, the
Agent agrees that it will not demand, or cause to be demanded,
payment of the Debenture until such time as an Event of Default (as
defined in the Credit Agreement) has occurred and is continuing. It
is further agreed that the Company shall not have any obligation to
make, and the Pledgees shall not be entitled to
receive, payment under the Debenture for any amount in excess of the
Indebtedness.
6.2 The Agent may, upon the occurrence of an Event of Default and
provided same is continuing, demand payment of the Debenture, collect
payment of the principal and interest thereof, and exercise all of
the rights and remedies arising from the security constituted
hereunder or permitted by applicable law, all of which rights and
remedies shall be cumulative, and none of which shall be exclusive.
7. WAIVER
The parties hereto hereby expressly waive the provisions and protection of
Section 32 of An act respecting the special powers of legal persons and
specifically authorize the Agent and any partnership or legal person whereof
the Agent is a member or officer, to act as a Debentureholder.
8. MISCELLANEOUS
8.1 Subject to the terms of section 6.1 above, this agreement and the
Debenture are in addition to and not in substitution of or in
replacement for any other hypothec, pledge, security, guarantee or
other right held by or benefiting to any Pledgee.
8.2 This agreement shall be governed by the laws of the Province of
Quebec.
8.3 The parties hereto confirm that they have requested that this
agreement and all related documents be drafted in English. Les
parties aux presentes ont exige que le present document et tous les
documents connexes soient rediges en anglais.
IN WITNESS WHEREOF, the parties have duly executed this agreement as of the day
and year first written above.
WESTCON CANADA SYSTEMS GENERAL ELECTRIC CAPITAL
(WCSI) INC./LES SYSTEMES CANADA INC., as Agent
WESTCON CANADA (WCSI) INC.
By: /s/ Xxxx Xxxxxxxxxxx-Xxxxxx By: /s/ Xxxxxxxxxxx Xxxxxxx
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Name: Xxxx Xxxxxxxxxxx-Xxxxxx Name: Xxxxxxxxxxx Xxxxxxx
Title: Director Title: Authorized Representative
