PRIORITIES AGREEMENT
Exhibit
10.2
THIS
AGREEMENT
dated as
of the __ day
of
September, 2007.
|
B E T W E E N:
COUNSEL
CORPORATION,
an Ontario company whose address is 00 Xxxx Xxxxxx Xxxx, Xxxxx
0000,
Xxxxxxx, Xxxxxxx, X0X 0X0
(hereinafter
referred to as “Counsel”
and “the Bank”)
OF
THE FIRST PART;
-
and -
ROYNAT
BUSINES CAPITAL INC.,
a
Delaware corporation, whose address is 000 Xxxxx Xxxxx Xxxxxx,
Xxxxx 0000,
Xxxxxxxxx, XX 00000
(hereinafter
referred to as “Roynat”)
OF
THE SECOND PART;
-
and -
C2
Investments Inc.,
a Delaware corporation, whose address is is 00 Xxxx Xxxxxx Xxxx,
Xxxxx
0000, Xxxxxxx, Xxxxxxx, X0X 0X0
____________________________.
(hereinafter
referred to as the “Company”)
OF
THE THIRD PART;
and
-
C2
Global Technologies Inc. (« C2 »).,
a Delaware corporation, whose address is is 00 Xxxx Xxxxxx Xxxx,
Xxxxx
0000, Xxxxxxx, Xxxxxxx, X0X 0X0
____________________________.
(hereinafter
referred to as the “C2”)
OF
THE FOURTH PART;
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WHEREAS,
the
Company and/or C2 has authorized, executed and delivered in favor of the Bank
various notes, security agreements, financing statements (as amended or
otherwise modified from time to time, the “Bank Security
Documents”);
WHEREAS,
the
Bank Security Documents and any other security which may be held by the Bank
now
or hereafter on the property and assets of the Company for its or C2’s existing
indebtedness and any future indebtedness of the Company or C2 to the Bank are
sometimes herein collectively referred to as the “Bank
Security”;
WHEREAS,
Roynat
has agreed, subject to certain conditions, to provide financing to AZ
LIMOS LLC,
an
affiliated party to the Company (“AZ
LIMOS”),
such
financing to be secured by (among other things) a pledge agreement dated the
date hereof, by the Company in favor of Roynat (as amended or otherwise modified
from time to time, together with all other instruments entered into by the
Company in connection therewith, the “Roynat
Security Document”)
pursuant to which the Company has pledged to Roynat all of its membership and
related interests in AZ LIMOS (the “Pledged
Interests”).
WHEREAS,
the
Roynat Security Documents and any other security which may be held by Roynat
now
or hereafter on the Pledged Interests for financing provided to AZ LIMOS by
Roynat are sometimes herein collectively referred to as the “Roynat
Security”;
WHEREAS,
the
parties hereto have agreed to enter into this Agreement in order to set out
the
respective priorities with respect to the Pledged Interest.
NOW
THEREFORE,
in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby covenant, undertake, declare and agree as follows:
ARTICLE
1.
- CONSENT
1.1. Bank
Consent.
The
Bank hereby consents to the creation and issue by the Company to Roynat of
the
Roynat Security and that the creation, issue and existence of the same does
not
constitute a default or event of default under the Bank Security
Documents.
ARTICLE
2.
- SUBORDINATION
2.1. Relative
Priorities.
The
Bank and Roynat hereby agree as follows:
| (a) |
the
Bank Security solely with respect to the Pledged Interests is hereby
subordinated in all respects to the Roynat Security;
and
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| (b) |
the
parties hereto hereby agree that, except for the Pledged Interests
and as
expressly set forth in the foregoing clause (a), Roynat has no other
security interests in any of the Bank Security and Roynat hereby
acknowledges and agrees that any claim it may hereafter have on any
Bank
Security (other than the Roynat Security) shall be subordinated in
all
respects to the Bank Security.
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2.2. Application
of Subordination.
The
subordination contained herein shall apply in all events and circumstances
regardless of:
| (a) |
the
date of execution, attachment, registration or perfection of any
security
interest held by the Bank or Roynat;
or
|
| (b) |
the
date of any advance or advances made to the Company by the Bank or
to AZ
LIMOS by Roynat; or
|
| (c) |
the
date of default by the Company or by the Company’s parent C2 under any of
the Bank Security or the Roynat Security;
or
|
| (d) |
any
priority granted by any principle of law or any
statute.
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2.3. Insurance
Proceeds.
Any
insurance proceeds received by the Company or C2 by the Bank or Roynat in
respect of the collateral charged by the Bank Security or the Roynat Security
shall be dealt with according to the preceding provisions hereof as though
such
insurance proceeds were paid or payable as proceeds of realization of the
collateral for which they compensate.
2.4. Notice
of Default, Exercise of Remedies.
The
Company shall give prompt written notice to the Bank or Roynat, as applicable,
of any default under the Bank Security Documents or the Roynat Security
Documents and of any action taken by the other secured party against the Company
or C2 to enforce its security.
ARTICLE
3.
- COVENANTS OF COMPANY
3.1. The
Company hereby confirms to and agrees with the Bank and Roynat
that:
| (a) |
the
Company’s entry into and performance of this Agreement has been duly
authorized by all necessary corporate
action;
|
| (b) |
so
long as any of the indebtedness of the Company and AZ LIMOS herein
referred to remains outstanding, it shall stand possessed of its
assets so
charged for the Bank and for Roynat in accordance with their respective
interests and priorities as herein set out;
and
|
| (c) |
none
of the provisions of this Agreement create any rights in favor of
the
Company or affect the manner in which the Bank or Roynat or any receiver
and manager appointed by them over the property, assets and undertaking
of
the Company exercises its rights under the Bank Security and the
Roynat
Security.
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ARTICLE
4.
- GENERAL
4.1. Information
Exchange.
From
time to time upon request therefor the Bank and Roynat may advise each other
of
any information which it may have relating to the affairs of the Company,
including its business and financial affairs and the particulars of the
indebtedness and liability of the Company to each other and all security held
by
each therefor. The Company hereby consents to any such exchange of
information.
4.2. No
Challenge of Priorities.
No
party hereto shall take any action to defeat the priorities set forth in this
Agreement or the validity, perfection, publication or enforceability of any
lien
granted under the Bank Security Documents or the Roynat Security Documents.
Each
of the Bank and Roynat hereby waives any right the other may have to require
the
other to marshal in its favour.
4.3. Further
Assurances.
Each of
the Bank, Roynat and the Company shall do, perform, execute and deliver all
acts, deeds and documents as may be necessary from time to time to give full
force and effect to the intent of this Agreement; provided,
however,
that no
consent of the Company shall be necessary to any amendment of the terms hereof
by the Bank and Roynat unless the interests of the Company are directly affected
thereby.
4.4. Counterparts.
This
Agreement may be executed in several counterparts, each of which when so
executed shall be deemed to be an original and such counterparts together shall
constitute one and the same instrument and shall be effective as of the formal
date hereof.
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4.5. Binding
Effect.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns.
4.6. Conflicting
Provisions.
Where
there is any conflict between the provisions in this Agreement regarding the
priority of the security of the parties hereto and similar provisions in the
Bank Security Documents or the Roynat Security Documents, the provisions of
this
Agreement will prevail.
4.7. No
Assignment.
Neither
the Bank nor Roynat shall assign all or part of any of its Bank Security or
Roynat Security, as the case may be, without first obtaining a written agreement
from the assignee under which the assignee agrees to be bound by the terms
of
this Agreement.
4.8. GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE
STATE OF NEW YORK WITHOUT REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
4.9. Limitation
on Liabilities.
Except
as otherwise expressly provided herein, neither the Bank nor Roynat shall have
any liability to the other except to the extent arising from the gross
negligence or wilful misconduct of such party, nor shall the Bank nor Roynat
have any liability to the Company for any action or inaction
hereunder.
5.10 Amendments.
All
modifications or amendments of this Agreement must be in writing and duly
executed by an authorized officer of the Bank and Roynat and, to the extent
such
modification or amendment would increase the obligations of the Company
hereunder, by an authorized officer of the Company.
5.11 Entire
Agreement.
This
Agreement constitutes the entire agreement among the parties with respect to
the
subject matter hereof and supersedes all prior negotiations, undertakings,
representations and understandings.
5.12 Severability.
If any
provision hereof is or is deemed to be illegal, invalid or unenforceable in
any
jurisdiction, the illegality, invalidity or unenforceability of such provision
will not affect the legality, validity or enforceability of the remaining
provisions of this Agreement.
5.13 Termination.
The
Bank shall have no further rights or obligations hereunder once the Company’s
obligations under the Bank Security Documents (except obligations that by their
terms survive termination thereof) have been paid in full in cash (the
“Bank
Termination”).
Roynat shall have no further rights or obligations hereunder once the Company’s
obligations under the Roynat Security Documents (except obligations that by
their terms survive termination thereof) have been fully performed (the
“Roynat
Termination”).
This
Agreement shall terminate and be of no further force and effect upon the first
to occur of the Bank Termination and the Roynat Termination.
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IN
WITNESS
WHEREOF
the
parties hereto have executed this Agreement under the hands of their duly
authorized officers.
| COUNSEL CORPORATION | ||
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| By: | ||
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Name:
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| Title: | ||
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| ROYNAT BUSINES CAPITAL INC. | ||
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| By: | ||
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Name:
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| Title: | ||
6
| C2 GLOBAL TECHNOLOGIES INC. | ||
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| By: | ||
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Name:
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| Title: | ||
7
| C2 INVESTMENTS INC. | ||
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| By: | ||
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Name:
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| Title: | ||
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