Exhibit 10.3
PRIORITY AGREEMENT
THIS AGREEMENT made as of the19th day of December, 2002.
AMONG:
WASANDA ENTERPRISES INC.(hereinafter called "Wasanda")
OF THE FIRST PART;
-and-
X.XXXXXXXX INVESTMENTS CANADA LIMITED (hereinafter called "Dunsmuir")
OF THE SECOND PART;
-and-
D'ANGELO BRANDS LTD. (hereinafter called "D'Angelo")
OF THE THIRD PART;
-and-
D'ANGELO BRANDS, INC. (hereinafter called "Brands")
OF THE FOURTH PART;
-and-
XXXXX X'XXXXXX (hereinafter called "Xxxxx")
OF THE FIFTH PART;
-and-
XXXXXXXX X'XXXXXX (hereinafter called "Giuseppe")
OF THE SIXTH PART;
WHEREAS D'Angelo and Brands are indebted to Dunsmuir and as security for the
repayment of such indebtedness D'Angelo and Brands have executed and delivered
to Dunsmuir a general security agreement covering their assets and undertaking
(the "Dunsmuir Security");
AND WHEREAS D'Angelo and Brands have agreed to
execute and deliver to Wasanda a fixed and floating charge debenture (the
"Wasanda Security");
AND WHEREAS the Wasanda Security and the Dunsmuir Security
are hereinafter sometimes collectively referred to as the "Security Agreements";
AND WHEREAS Dunsmuir has registered the financing statements listed in Schedule
"A" annexed hereto (the "Dunsmuir Financing Statements") and Wasanda has
registered or will register the financing statements listed or to be listed in
Schedule "A annexed hereto (the "Wasanda Financing Statements"), all for the
purpose of perfecting a security interest in or against certain assets of
D'Angelo and Brands;
AND WHEREAS the parties have agreed upon certain priorities
in respect of the Dunsmuir Security and the Wasanda Security as hereinafter
described;
AND WHEREAS D'Angelo and Brands have agreed that they will maintain
and deal with their assets in accordance with the provisions hereof;
NOW WITNESSETH THAT the parties hereto each in consideration of the execution of
this Agreement by the other and other good and valuable good and consideration
(the receipt and sufficiency of which is hereby acknowledged) covenant and agree
as follows:
1. The parties confirm that the foregoing recitals are true in
substance and in fact and are agreed to form a part hereof for all purposes.
2.Each of Wasanda and Dunsmuir hereby consent to the creation and issue of the
Wasanda Security and of the Dunsmuir Security and each agree that the creation,
issue, registration, filing and existence of the same shall not constitute an
event of default under the Dunsmuir Security or the Wasanda Security.
3.The Dunsmuir Security shall at all times rank in priority to the Wasanda
Security and the Wasanda Security shall be and is hereby postponed and
subordinated to and in favour of the Dunsmuir Security as it relates to
equipment of D'Angelo and/or Brands and all traceable insurance and other
proceeds therefrom and the Wasanda Security shall at all times rank in priority
to the Dunsmuir Security and the Dunsmuir Security shall be and is hereby
postponed and subordinated to an din favour of the Wasanda Security as it
relates to the book debts, accounts receivable, promissory notes or other
evidence of indebtedness to D'Angelo and/or Brands (the "Receivables") and any
security obtained by D'Angelo and/or Brands for such Receivables and as it
relates to the inventory of D'Angelo and Brands and all insurance proceeds
payable thereon, all together with all proceeds thereof, all irrespective of:
(a) the provisions of the security Agreements;
(b) any oral or written understanding, agreement or other document,
registered or unregistered, given by or to nay one or more of the parties to
this Agreement prior to the date hereof;
(c) the respective dates of creation, execution, delivery, filing,
registration, attachment or perfection of, advances of funds under and
crystallization, realization or default under the Security Agreements, or any
grant, assignment, transfer, mortgage, charge, security interest or other
interest or right contained in the Security Agreements;
(d) the respective dates on which D'Angelo and/or Brands became indebted to
Dunsmuir and Wasanda;
(e) the respective dates on which Wasanda or Dunsmuir obtained any judgment
or filed any writ of seizure and sale against D'Angelo and /or Brands;
(f) any rights or remedies to which, except for this Agreement, Wasanda or
Dunsmuir would be entitled at law or equity against D'Angelo and/or Brands or
any of their undertaking, property and assets in respect of any of D'Angelo's
and/or Brands' obligations and indebtedness secured by any of the Security
Agreements;
(g) any future increases in the credit facilities made available by Dunsmuir
and/or Wasanda to D'Angelo and/or Brands; and
(h) any other matter.
4. This agreement is intended to affect the priorities of Wasanda Security
and Dunsmuir Security only to the extent expressly stated herein. Without
limiting the generality of the foregoing, nothing herein shall:
(a) entitle D'Angelo and/or Brands to postpone any payment of any monies
(secured by the Security Agreements or not) owing to Wasanda or Dunsmuir;
(b) affect any rights (including, but not limited to, the right to realize
under its security) of Wasanda or Dunsmuir, except to the extent specifically
provided herein;
(c) entitle any person (other than Wasanda and Dunsmuir and their respective
successors and assigns) to claim or obtain priority over any of the security
referred to in the Security Agreements.
5. D'Angelo and Brands acknowledge that they are indebted to Xxxxx and
Xxxxxxxx (the "existing indebtedness:). Xxxxx and Giuseppe together with
D'Angelo and Brands agree that the existing indebtedness is not the subject of
nor will it (or any present or future indebtedness of any nature of kind of
D'Angelo or Brands to Xxxxx or Xxxxxxxx) hereafter without the consent of
Wasanda and Dunsmuir be made the subject of any set-off or counter-claim by
them. Xxxxx and Giuseppe represent to Wasanda and Dunsmuir that they hold no
security for the existing indebtedness or any part thereof (or for any other
present or future indebtedness of any nature or kind of D'Angelo and/or Brands
to them or either of them) and as the existing indebtedness as well as all other
present and future indebtedness of D'Angelo and/or Brands to Xxxxx and/or
Giuseppe has been hereby assigned and postponed to the Wasanda Security, Xxxxx
and /or Giuseppe hereby agree with D'Angelo and /or Brands that no satisfaction,
consideration or security will be given to or accepted by Xxxxx and Xxxxxxxx for
any debt, liability or obligation, present or future, including the existing
indebtedness owing by D'Angelo and Brands to Xxxxx and/or Giuseppe without the
written consent of Wasanda and Dunsmuir first had and obtained.
6. This Agreement shall extend to bind and enure to the benefit of the
parties hereto and their respective successors and assigns.
7. The invalidity of any provision of this Agreement or any covenant herein
contained on the part of any party shall not affect the validity of any other
provision or covenant hereof or herein contained.
8. Each of the parties shall from time to time, both before and after the
date hereof, take or cause to be taken such action and execute and deliver or
cause to be executed and delivered to the other such documents and further
assurances as may, in the reasonable opinion of counsel for the other, be
necessary or advisable to give effect to this Agreement.
9. This Agreement may be executed in several counterparts each of which so
executed shall be deemed to be an original and such counterparts together shall
constitute and the same instrument and notwithstanding their date of execution
shall be deemed to bear date as of the date first above written.
10. In the event that any clause, paragraph or portion hereof should be
unenforceable or declared in valid for any reason whatsoever, such
enforceability or invalidity shall not affect the enforceability or validity of
the remaining clauses, paragraphs or portions hereof and such unenforceable or
invalid clause, paragraph or portion shall be severable from the remainder
hereof.
11. This Agreement shall be governed and construed in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein.
IN WITNESS WHEREOF the corporate parties hereto have set their hands and affixed
there corporate seal under the hands of their proper officers as of the date
first above written.
SIGNED, SEALED AND DELIVERED
In the presence of: )
)--------------------
) XXXXX X'XXXXXX
)
)---------------------
) XXXXXXXX X'XXXXXX
WASANDA ENTERPRISES INC D'ANGELO BRANDS LTD.
Per:------------------ Per: ------------------------
Name: Name:
Title: Title:
X.XXXXXXXX INVESTMENTS D'ANGELO BRANDS, INC. CANADA LIMITED
Per: --------------- Per: ------------------------
Name: Name:
Title: Title:
SCHEDULE "A" PPSA REGISTRATIONS
FILE NUMBER SECURED PARTY
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883273455 X. Xxxxxxxx Investments Canada Limited
883201761 X. Xxxxxxxx Investments Canada Limited
