Exhibit 10.4
GENERAL SECURITY AGREEMENT
THIS AGREEMENT dated as of the 26th day of June, 0000
X X X X X X X:
XXXXXXXX.XXX INC. a corporation
incorporated
under the laws of Ontario
(hereinafter called the "Debtor")
- and -
XXXXXXXX.XXX INC. a corporation
incorporated
under the laws of the State of Delaware
(hereinafter called "Delaware")
NOW THEREFORE in consideration of the sum of $2.00 and other good and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledged), the Debtor hereby agrees with Delaware as follows:
Definitions.
"Permitted Encumbrances" means, collectively, the following (individually,
a "Permitted Encumbrance"):
(i) any and all PMSI's;
(ii) statutory liens or encumbrances arising in the ordinary course
of a Debtor's business to secure obligations which are not
overdue or which are being diligently contested in good faith
by appropriate proceedings by any Debtor, including:
(A) liens for taxes, assessments/reassessments, governmental
charges or levies and as to which reasonable reserves are
being maintained or security is given to the applicable
government as may be required by it pursuant to applicable
statute;
(B) liens, provided by statute in favour of carriers,
warehousemen, mechanics, materialmen and repairmen;
(C) pledges or deposits in connection with workers,
compensation, employment insurance and other social
security legislation;
(D) rights reserved to or vested in any municipality or
governmental or other public authority by the terms of any
lease, licence, grant or permit, or by any statutory
provision, to terminate the same or to require annual or
other periodic payments as a condition to the continuance
thereof;
"PMSI" means and includes any mortgage, hypothecation, charge, security
interest, vendor's privilege, vendor's lien or any other encumbrance (including
but not limited to a purchase money mortgage, conditional sale or other title
retention agreement, capitalized lease or other deferred payment contract) that
in the ordinary course of a Debtor's business is given to, taken or reserved by,
the seller or lessor of such property or assets, who is at arm's length to the
Debtor or otherwise assumed or entered into, in each case to secure a Purchase
Money Obligation (defined below) or that arises by operation of law after the
date hereof, (the "PMSI Security"), where:
(A) the principal amount secured by such PMSI Security is not
in excess of 100% of the cost to the Debtor of the
property or assets encumbered thereby; and
(B) the PMSI Security only extends to the specific property or
assets so acquired or leased by a Debtor (and proceeds
derived therefrom); and
(C) the PMSI Security attaches and is perfected against the
property or assets encumbered thereby in a proper and
timely manner so as to maintain its priority in accordance
with any applicable legislation including, without
limitation, the provisions of the Personal Property
Security Act (Ontario); and
(D) the PMSI Security is created or assumed substantially
contemporaneously with, or within 90 days after, the
acquisition or leasing by a Debtor of the applicable
property or assets.
"Purchase Money Obligation" means any liability created, incurred or
assumed to provide funds to pay, otherwise satisfy or to finance payment of, the
whole or any part of the unpaid portion of the purchase price of any property or
assets acquired or leased by a Debtor after the date of this agreement, provided
that such liability is assumed, created or incurred substantially
contemporaneously with, or within a period of 90 days next following, such
acquisition or leasing of such property or assets and includes extensions,
renewals or refinancing of such liability so long as the principal amount
thereof outstanding on the date of such extension, renewal or refinancing is not
increased.
"Security Interest" means, collectively, the security interests,
assignments, mortgages and charges of or in the Collateral granted pursuant to
this agreement.
1. Grant of Security Interest.
(a) As general and continuing security for the payment and performance of
the Obligations (as herein defined) and subject to Permitted
Encumbrances and to the exception as to leaseholds hereinafter
contained, the Debtor hereby grants to Delaware a continuing security
interest in all of the Debtor's property, assets and undertaking of any
kind or nature, now owned or hereafter acquired including, without
limitation, the following described property (hereinafter collectively
called the "Collateral"):
(i) Accounts: all debts, demands, amounts, accounts, claims, monies and
choses in action which now are or which may at any time hereafter be
due or owing to or owned by the Debtor, and also all securities,
bills, notes and other documents now held or owned or which may be
hereafter taken, held or owned by the Debtor or anyone on behalf of
the Debtor in respect of the said debts, claims, monies and choses in
action or any part thereof, and also all books and papers recording,
evidencing or relating to said debts, accounts, claims, monies and
choses in action or any part thereof (all of the foregoing being
hereinafter called the "accounts"),
(ii) Inventory: all inventory of whatever kind and wherever situated now
owned or hereafter acquired or reacquired by the Debtor including all
goods, merchandise, raw materials, goods in process, finished goods
and other tangible personal property held for sale, resale or lease
or to be leased or furnished or to be furnished under contracts for
service or used or consumed in the business of the Debtor (all of the
foregoing being hereinafter called the "inventory"),
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(iii) Equipment: all machinery, equipment, goods and other tangible
personal property (including vehicles) now owned or hereafter
acquired or reacquired by the Debtor and not included in
subparagraphs 1(a)(i) and 1(a)(ii) above (all of the foregoing being
hereinafter called the "equipment"),
(iv) Personal Property: all chattel paper, documents of title, goods,
instruments, intangibles, money and securities including, fixtures
other than building materials that have been affixed to real
property, now owned or hereafter acquired by the Debtor,
(v) Intangibles: all intangible property, other than trademarks, now
owned or hereafter acquired or reacquired by the Debtor and not
included in subparagraph 1(a)(i) above, all contractual rights,
goodwill, patents, copyrights and other industrial property (all of
the foregoing being hereinafter called the "intangibles"),
(vi) Leases: all of the Debtor's right and interest in and to all leases,
leasehold interests, tenancies and rights of occupation or possession
of real estate or personal property now owned or hereafter held and
owned by the Debtor, including all such rights and interests in
respect of which the Debtor is landlord or lessor together with the
benefit of the covenants, agreements, privileges and rights of the
Debtor pertaining to such interests,
(vii) Trademarks: all trademarks both at common law and registered pursuant
to any applicable legislation now owned or hereafter acquired or
reacquired by the Debtor,
(viii) Proceeds: all personal property in any form or fixtures derived
directly or indirectly from any dealing with the Collateral or
proceeds therefrom, and includes any payment representing indemnity
or compensation for loss of or damage to the Collateral or proceeds
therefrom.
(b) For greater certainty and without limitation, the Collateral includes
the following property:
(i) any software products in both object and source code form, and all
related documentation and information in tangible form including
program listings, worksheets, manuals, packaging and notes;
(ii) all enhancements, additions, accessions or replacements to or of any
of the foregoing including all subsequent releases of the software
products described above and any other software products into which
the software products described herein are incorporated;
(iii) all intellectual property rights in the software products described
herein including all registered and unregistered copyrights;
(iv) all media, whether in electronic, magnetic or other form, upon which
the software products described herein are recorded;
(v) all customer lists, contracts, sales reports and customer records
with respect to the software products described herein and the users
thereof; and
(c) For greater certainty, the Security Interest created hereby with
respect to all of the Collateral save and except for the interest in
trademarks referred to in section 1(a)(vii) hereof, shall be operative
as a present, attached, fixed and specific assignment, mortgage and
charge of and Security Interest in any and all of the Collateral now
owned by the Debtor and, with respect to any and all of the Collateral
acquired by the Debtor after the date hereof, shall be operative as a
present, specific assignment, mortgage and charge of and security
interest in such Collateral which shall attach as a fixed and specific
mortgage and charge of and security interest in such Collateral as of
the moment the Debtor acquires any rights or interests therein.
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The Security Interest created hereby in the trademarks referred to in
section 1(a)(vii) hereof shall be interpreted and construed as a floating
charge and the Debtor shall have the right to deal with that aspect of the
Collateral without the consent of Delaware in the ordinary course of its
business. The Security Interest created hereby with respect to all of the
Collateral save and except the interest in trademarks referred to in
section 1(a)(vii) shall not be interpreted or construed as a floating
charge and the Debtor's rights to deal with the Collateral without the
consent of Delaware are restricted to those rights specified in paragraph
11 hereof.
(d) The Security Interest granted hereby shall not extend to or apply to, and
the Collateral shall not include, the last day of the term of any lease or
agreement therefor but upon the enforcement of the Security Interest
granted hereby, the Debtor shall stand possessed of the last day in trust
to assign the same to any person acquiring such interest of the Debtor.
(e) To the extent that the creation of a Security Interest would constitute a
breach or cause the acceleration of any agreement, right, license or
permit to which the Debtor is a party, the Security Interest created
hereby shall not attach thereto but the Debtor shall hold its interest
therein in trust for Delaware and shall assign such agreement, right,
license or permit to Delaware forthwith upon obtaining the consent of the
other party thereto.
2. Obligations Secured. "Obligations" means for the purposes of this
agreement the, all obligations, if any, owed by the Debtor to Delaware,
from time to time, whether matured or unmatured, contingent or certain,
known or unknow..
3. Attachment. The parties acknowledge that value has been given; the Debtor
represents to Delaware that it has (or in the case of property acquired
subsequently, will have) rights in the Collateral. The parties have not
agreed to postpone the time for attachment of the Security Interest
created hereby. The parties intend the Security Interest in hereafter
acquired Collateral to attach at the same time as the Debtor acquires
rights in such after acquired Collateral.
4. Partial Discharges. On any sale or other form of disposition by a
Debtor of any property or assets included in the Collateral, Delaware
shall, without undue delay following the giving to Delaware by such
Debtor of its written request (that includes reasonable details of such
proposed disposition), execute and deliver such partial discharges and
other documents that is/are reasonably required to permit the Debtor to
carry out such disposition free and clear of the Security Interest to
the extent it attaches to or encumbers the property or assets to be so
sold, provided that:
(a) such sale does not constitute an Event of Default and no Event of
Default has occurred that has not been waived by Delaware.
(b) the purchaser is not a Debtor and deals with the Debtor effecting
such sale at arm's length (as construed for purposes of the Income
Tax Act (Canada); and
(c) the sale is a bona fide transaction for valuable consideration made
in the ordinary course of the Debtor's business; and
(d) the Debtor shall pay all reasonable costs of Delaware incurred in
connection therewith.
5. Representations and Warranties of Debtor. The Debtor hereby
represents, warrants and so long as this agreement remains in effect
shall be deemed to continuously represent and warrant that:
(a) The Debtor is, or, as to Collateral acquired after the date hereof
will be the owner of the Collateral, free from any adverse lien,
security interest or encumbrance, (hereinafter collectively called
"Encumbrances") save for the Security Interest and the Permitted
Encumbrances.
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(b) The Debtor's chief executive office and the location of the office
where it keeps its records respecting the accounts, is that given
in Schedule "A" hereto and all other places of business of the
Debtor are listed in Schedule "A" hereto. If the Debtor changes
its principal place of business, or the location of the inventory
or equipment, or the location of the office where it keeps its
records respecting the accounts, or acquires other places of
business, it will promptly notify Delaware.
(c) The Collateral does not include any goods which are used or acquired
by the Debtor for use primarily for personal, family or household
purposes.
6. Covenants of Debtor. So long as this agreement remains in effect the
Debtor covenants and agrees as follows:
(a) Encumbrance. The Debtor shall defend the Collateral against the
claims and demands of all other parties claiming the same or an
interest therein and shall keep the Collateral free from all
Encumbrances ranking in priority to or pari passu with the Security
Interest, save for the Permitted Encumbrances;
(b) Disposition of Collateral. The Debtor shall not sell, exchange,
transfer, assign, lease or otherwise dispose of Collateral or any
interest therein out of the ordinary course of business as presently
conducted without the prior written consent of Delaware; provided
always that, until default, Debtor may use monies available to
Debtor;
(c) Notification. The Debtor shall promptly notify Delaware of the
occurrence of such of the following as would reasonably be likely to
have a material adverse effect on the Collateral or the ability of
Delaware to exercise his rights hereunder:
(i) any change in any information provided in this agreement;
(ii) any actual or potential claim affecting the Debtor, the
Collateral or the Security Interest created hereby;
(iii) any loss or damage to the Collateral;
(iv) any default by any account debtor in payment or other
performance of its obligations with respect to Collateral; and
(v) the return to or repossession by the Debtor of Collateral.
(d) Condition of Collateral. The Debtor shall keep the Collateral in
good order, and condition and repair as reasonably required for the
conduct of the business and shall not use Collateral in violation of
the provisions of this agreement or any other agreement relating to
Collateral or any policy insuring Collateral or any applicable
statute, law, by-law, rule, regulation or ordinance.
(e) Delivery of Information. From and after Default, the Debtor shall
from time to time forthwith on request furnish to Delaware in
writing all information requested relating to the Collateral and
Delaware shall be entitled from time to time to inspect the
Collateral and to take temporary custody of and make copies of all
documents relating to accounts and for such purposes Delaware shall
have access during normal business hours to all premises occupied by
the Debtor or where the Collateral or any of it may be found.
(f) Further Assurances. The Debtor shall from time to time forthwith on
Delaware's request do, make and execute all such financing
statements, further assignments, documents, acts, matters and things
as may be required by Delaware of or with respect to the Collateral
or any part thereof or as
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may be required to give effect to these presents, and after Default
the Debtor hereby constitutes and appoints any person designated by
Delaware, or any receiver appointed by the Court or Delaware as
hereafter set out, the true and lawful attorney of the Debtor
irrevocably with full power of substitution to do, make and execute
all such assignments, documents, acts, matters or things with the
right to use the name of the Debtor whenever and wherever it may be
deemed necessary or expedient.
(g) Taxes The Debtor shall pay all taxes, rates, levies, assessments and
other charges of every nature which may be lawfully levied, assessed
or imposed against or in respect of Debtor or Collateral as and when
the same become due and payable;
(h) Insurance. The Debtor shall keep the inventory and equipment insured
against loss by fire and such other risks as is customary in the
Debtor's industry and will pay all premiums in connection with such
insurance. After Default, all policies of insurance and the proceeds
thereof will be held in trust by the Debtor for the benefit of
Delaware as his interest therein may then be under the provisions of
this agreement. If the Debtor neglects to provide such insurance,
Delaware may obtain the same and charge the premiums therefor to the
Debtor, together with interest at the rate currently charged to the
Debtor under its obligations to Delaware at the date of payment of
the premium by Delaware.
(i) Accessions. The Debtor shall prevent Collateral, save Inventory sold
or leased as permitted hereby, from being or becoming an accession
to other property not covered by this agreement;
(j) Conduct of Business. The Debtor shall carry on and conduct the
business of Debtor in a proper and efficient manner and so as to
protect and preserve the Collateral and to keep, in accordance with
generally accepted accounting principles, consistently applied,
proper books of account for Debtor's business as well as accurate
and complete records concerning Collateral.
(k) Re-organization. The Debtor shall not, without the prior written
consent of Delaware take any step to implement any reorganization of
Debtor, or any consolidation, merger or amalgamation of Debtor with
any corporation or any dissolution or winding-up of Debtor except
that the Debtor or any one or more or all of the corporations
comprising the Debtor may amalgamate.
(l) Change of Location. The Debtor shall not move the Collateral from
the address or addresses specified in Schedule "A" hereto (other
than in connection with sales of inventory or otherwise in the
ordinary course of its business) or change the location of its chief
executive office without giving notice of such change to Delaware;
provided that in the event that if the Debtor proposes to move the
Collateral or the location of the Debtor's chief executive office
outside the Province of Ontario then the Debtor will require the
prior written consent of Delaware.
7. Events of Default. Each of the following events shall constitute a
default:
(a) the non-payment when due, whether by acceleration or otherwise, of
any principal or interest or other amount forming part of the
Obligations or the failure of the Debtor to observe or perform any
obligation, covenant, term, provision or condition contained in the
this Security Agreement;
(b) the bankruptcy or insolvency of the Debtor; the filing against the
Debtor of a petition in bankruptcy; an authorized assignment by the
Debtor for the benefit of creditors; the appointment of a receiver
or trustee for the Debtor or for any of its assets; or the
institution by or against the Debtor of any other type of insolvency
proceeding under the Bankruptcy Act (Canada) or otherwise which is
not, in each case, being vigorously contested;
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(c) the institution of any proceeding for the dissolution or liquidation
of, settlement of claims against or winding up of the affairs of,
the Debtor;
(d) if any Encumbrance becomes enforceable against the Collateral;
(e) if the Debtor ceases or threatens to cease to carry on business or
makes or agrees to make a bulk sale of assets without complying with
applicable law or commits or threatens to commit an act of
bankruptcy;
(f) if any execution or other process of any court becomes enforceable
against the Debtor or if a distress or analogous process is levied
upon assets of the Debtor for an amount in excess of $10,000;
(g) if any representation or warranty contained in this Security
Agreement proves to have been false in any material respect at the
time as of which the facts therein set forth were stated or
certified, or proves to have omitted any substantial contingent or
unliquidated liability or claim against Debtor;
(h) if Delaware in good faith believes and has commercially reasonable
grounds to believe that the prospect of payment or performance of
any obligation is or is about to be impaired or that any material
part(s) of the Collateral is or is about to be placed in jeopardy,
(all of the foregoing being referred to as "Events of Default" or "Default").
8. Consequences of Default. Upon the occurrence of any of the Events of
Default the Security Interest hereby granted shall become immediately
enforceable and Delaware shall have the following rights and remedies
available at law or equity:
(a) The security hereby granted shall become immediately enforceable.
(b) The Debtor will forthwith upon demand assemble and deliver to
Delaware possession of all of the Collateral at such place as may be
specified by Delaware.
(c) Delaware shall, in addition to the rights and remedies specifically
provided herein, have the rights and remedies of a secured party
under the PPSA, and:
(i) Delaware may, in addition to any other rights, appoint by
instrument in writing a receiver and/or a receiver and manager
(hereinafter referred to as the "Receiver") of all or any part
of the Collateral and remove or replace such Receiver from time
to time or may institute proceedings in any court of competent
jurisdiction for the appointment of such a Receiver. Where
Delaware is referred to in this agreement the term shall, where
the context permits, include any Receiver so appointed and the
officers, employees, servants or agents of such Receiver.
(ii) At his option, Delaware may take such steps as he considers
necessary or desirable to enter into or obtain possession of all
or any part of the Collateral, including proceedings in any
court of competent jurisdiction, and to that end the Debtor
agrees that Delaware may by his servants, agents or Receiver at
any time during the day or night enter upon lands and premises,
and if necessary break into houses, buildings and enclosures
wheresoever and whatsoever where the Collateral may be found for
the purpose of taking possession of or removing the Collateral
or any part thereof.
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(iii) Delaware may seize, collect, realize, sell, borrow money on the
security of, release to third parties or otherwise deal with the
Collateral or any part thereof in such manner, upon such terms
and conditions and at such time or times as may seem to it
advisable and without notice to the Debtor (except as otherwise
required by any applicable law), and may charge on its own
behalf and pay to others reasonable sums for expenses incurred
and for services rendered (expressly including legal advices and
services, and receivers and accounting fees) in or in connection
with seizing, collecting, realizing, borrowing on the security
of, selling or obtaining payment of the Collateral, and may add
the amount of such sums to the indebtedness of the Debtor and
all such sums shall be secured hereby.
(iv) At his option Delaware may elect to retain all or any part of
the Collateral in satisfaction of the obligations to him of the
Debtor.
(d) Delaware shall not be liable or accountable for any failure or delay
in seizing, collecting, realizing, selling or obtaining payment of
the Collateral or any part thereof and shall not be bound to
institute proceedings for the purpose of seizing, collecting,
realizing or obtaining possession or payment of the same or for the
purpose of preserving any rights of Delaware, the Debtor or any
other person, firm or corporation in respect of same.
(e) Delaware may grant extensions of time and other indulgences, take
and give up securities, accept compositions, grant releases and
discharges, release any part of the Collateral to third parties and
otherwise deal with the Debtor, debtors of the Debtor, sureties and
others and with the Collateral and other securities as Delaware may
see fit without prejudice to the liability of the Debtor or
Delaware's right to hold and realize the Collateral.
(f) All monies collected or received by Delaware in respect of the
Collateral may be applied on account of the Obligations in such
manner as Delaware deems best or may be held unappropriated in a
Collateral account or in the discretion of Delaware may be released
to the Debtor, all without prejudice to Delaware's claims upon the
Debtor.
(g) In the event of Delaware taking possession of the Collateral or any
part thereof in accordance with the provisions of this agreement,
Delaware shall have the right to maintain the same upon the premises
on which the Collateral may then be situate, and for the purpose of
such maintaining shall be entitled to the free use and enjoyment of
all necessary buildings, premises, housing, stabling shelter and
accommodation for the proper maintaining, housing and protection of
the Collateral, and for its servant or servants, assistant or
assistants, and the Debtor covenants and agrees to provide the same
without cost or expense to Delaware until such time as Delaware
shall determine in its discretion to remove, sell or otherwise
dispose of the said Collateral so taken possession of by it as
aforesaid.
(h) To facilitate the realization of the Collateral Delaware may carry
on or concur in the carrying on of all or any part of the business
of the Debtor and may to the exclusion of all others, including the
Debtor, enter upon, occupy and use all or any of the premises,
buildings, plant and undertaking of or occupied or used by the
Debtor and use all or any of the tools, machinery and equipment of
the Debtor for such time as Delaware sees fit, free of charge, to
manufacture or complete the manufacture of any inventory and to pack
and ship the finished product, and Delaware shall not be liable to
the Debtor for any neglect in so doing or in respect of any rent,
charges, depreciation or damages in connection with such actions.
(i) Delaware may, if it deems it necessary for the proper realization of
all or any part of the Collateral, pay any encumbrance, lien, claim
or charge that may exist or be threatened against the same and in
every such case the amounts so paid together with costs, charges and
expenses incurred in connection therewith shall be added to the
obligations of the Debtor to Delaware as hereby secured, and shall
bear interest at the rate currently charged to the Debtor under its
obligations to Delaware at the date of payment thereof by Delaware.
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(j) The Debtor shall remain liable to Delaware for payment of any
deficiency after realization of the Collateral.
(k) If after all the expenses of Delaware in connection with the
preservation and realization of the Collateral as above described
shall have been satisfied and all obligations, including contingent
obligations, indebtedness and liabilities of the Debtor to Delaware
shall have been satisfied and paid in full together with interest,
any balance of monies in the hands of Delaware arising out of the
realization of the Collateral, shall be paid to any person entitled
to receive payment under section 64 of the PPSA.
(l) The Debtor agrees that it shall be commercially reasonable for
Delaware to dispose of Collateral by private sale or public sale. If
Collateral is disposed of by public sale, the sale may be held
following advertisement in the newspaper having general circulation
in the locations of the Collateral to be sold at least seven (7)
days prior to such sale, and Delaware may (but is not obliged to)
establish a reserve bid in respect of all or any portion of the
Collateral. The Collateral may be disposed of in whole or in part,
for cash or credit, or part cash and part credit. The purchaser or
lessee of any Collateral may be an investee of Delaware.
9. Powers of Receiver. Any Receiver appointed by instrument in writing
pursuant hereto shall, in addition to any rights and powers granted
hereby, be vested with such other discretions and powers as may be granted
in the instrument of appointment and any supplement thereto.
The Debtor shall be solely responsible for the Receiver's acts and faults
and for the Receiver's remuneration.
10. Dealing with Collateral by the Debtor. Until the occurrence of an
Event of Default the Debtor may sell its Inventory and collect its
Accounts and otherwise deal with the Collateral in the ordinary course
of its business without any requirement for the consent of Delaware.
Notwithstanding the foregoing, after the occurrence of an Event of
Default Delaware may notify any person obligated to the Debtor in
respect of an Account, Chattel Paper or an Instrument of the existence
of the Security Interest and, after the occurrence of an Event of
Default, direct that such persons make payment to Delaware of all such
present and future amounts due or to become due.
11. General Provisions.
(a) Entire Agreement. Save as specifically agreed between the parties in
writing and as hereinafter set out, this agreement, including any
schedules attached hereto, the Purchase Agreement and any other
agreement or document entered into pursuant to the Purchase
Agreement (other than any shareholders' agreement with respect to
the Debtor), constitutes the entire agreement between the parties as
regards the granting of security and the rights and liabilities of
the parties and there are no other representations, collateral
agreements or conditions in respect of the Collateral. This
agreement is in addition to and not in substitution for any other
agreement between the parties creating a Security Interest in all or
part of the Collateral, and whether heretofore or hereafter made,
and the terms of such other agreement or agreements shall be deemed
to be continued unless expressly provided to the contrary in writing
and signed by the parties.
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(b) Notice. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall only be effectively
given if sent by prepaid registered or certified mail, facsimile or
delivered:
To: Delaware
Attention:
Facsimile:
To: the Debtor
Attention:
Facsimile:
or to such other address or facsimile number of a party as it shall specify by
notice to the other party pursuant to this section.
Any such communication given by mail will be deemed to have been received on the
5th Business Day after the date of mailing, or if by facsimile it shall be
deemed to be given and received on the day transmitted, provided that such
transmission occurs prior to 4:00 p.m. on a Business Day otherwise it will be
deemed to have been received on the next following Business Day after
transmission, provided further that printed or electronically stored
confirmation of error-free completion and delivery of transmission is produced
by the transmitting facsimile machine, and if delivered it shall be deemed to
have been received on the date of delivery. If the person giving any such
communication knows or ought reasonably to know of any difficulties with the
postal system which might affect the delivery of mail, any such Communication
shall not be mailed but shall be given by personal delivery or by telex or
telecopier transmittal.
(c) Information. The Debtor expressly authorizes Delaware to provide any
and all statements, copies, information and the like as may be
requested by any person from Delaware pursuant to the provisions of
the PPSA.
(d) Headings. The headings of the paragraphs hereof are inserted for
convenience of reference only and shall not affect the
interpretation or construction of this agreement.
(e) Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of
Canada applicable therein. Reference to the governing statute shall
be, where the context permits, to the PPSA, as amended from time to
time. To the extent that they are not inconsistent herewith, the
definitions contained in the PPSA shall govern the interpretation of
this agreement.
(f) Successors and Assigns. This agreement and everything herein
contained shall extend to and bind and may be taken advantage of by
the respective successors and assigns, as the case may be, of each
and every of the parties hereto, and where there is more than one
debtor or there is a female party or a corporation, the provisions
hereof shall be read with all grammatical changes thereby rendered
necessary and where there is more than one debtor all covenants
shall be deemed to be joint and several.
(g) Amalgamation of Debtor. Without prejudice to any restrictions
contained in this agreement, or otherwise, if the Debtor amalgamates
with any one or more or all of the corporations comprising
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the Debtor as contemplated in section 7(g) or with any other
corporation or corporations, this agreement shall continue in full
force and effect and shall be binding upon the amalgamated
corporation, and for greater certainty:
(i) the Security Interest shall continue to secure all
Obligations;
(ii) the Security Interest shall: (1) continue to attach to
all property and assets of the Debtor; (2) attach to all
property and assets of each of the other amalgamating
corporations; and (3) attach to all property and assets
of the amalgamated corporation acquired on and after the
amalgamation; and the term "Collateral" shall include
all such property and assets of the Debtor, the other
amalgamating corporations and the amalgamated
corporation;
(iii) all defined terms and other provisions of this agreement
shall be deemed to have been amended to reflect such
amalgamation, to the extent required by the context; and
(iv) the Debtor agrees to execute and deliver or cause to be
executed and delivered all such further documents,
security and assurances as may be necessary or desirable
in the opinion of Delaware, acting reasonably in
connection with the foregoing.
(h) Execution in Counterparts. This agreement may be executed in one or
more 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.
(i) Conflict. In the case of any conflict in the terms and conditions of
the Purchase Agreement and the terms and conditions contained
herein, the terms and conditions of the Purchase Agreement shall
prevail.
(j) Severability. If any provisions of this security agreement shall be
deemed invalid or void, in whole or in part, by any court of
competent jurisdiction, the remaining terms and provisions of this
security agreement shall remain in full force and effect.
(k) Copy of Agreement. The Debtor hereby acknowledges receipt of a true
copy of this agreement.
IN WITNESS WHEREOF the Debtor has executed this agreement on the date
first above written.
XXXXXXXX.XXX INC. (Ontario)
By: /s/ Xxxx Xxxxxx
---------------
XXXXXXXX.XXX INC. (Delaware)
By: /s/ Xxxxx X'Xxxx
----------------
29
SCHEDULE "A"
DEBTOR'S CHIEF EXECUTIVE OFFICE ADDRESS:
000 Xxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx, X0X 0X0
DEBTOR'S OTHER PLACES OF BUSINESS:
000 Xxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx, X0X 0X0
