GUARANTEE
THIS AGREEMENT OF GUARANTEE is made as of the lst day of June, 2002,
BY: BIG FISH LTD.
(the "Guarantor")
IN FAVOUR OF: TRILON BANCORP INC.
("the Lender")
RECITALS:
A. The Lender and M.E.V. (the "Borrower") have entered into an agreement
dated as of July 31, 2001 as amended by an amending agreement dated as of
December 31, 2001, an amending agreement dated as of January 7, 2002, an
amending agreement dated as of April 8, 2002 and an amending agreement
dated as of June 1, 2002 (together the "Loan Agreement") pursuant to
which the Lender has agreed to establish a credit facility for the
Borrower;
B. It is a condition of the Loan Agreement, that the Guarantor enters into
this Agreement to guarantee the obligations of the Borrower under the Loan
Documents (referred to herein as the "Obligations"),
NOW THEREFORE in consideration of the sum of $1.00 and for other
good and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the Guarantor agrees with the Lender as follows:
ARTICLE 1.
INTERPRETATION
1.1. DEFINITIONS
In this Agreement, terms that are defined in the Loan Agreement,
unless otherwise defined herein, have the same meaning herein as are ascribed to
such terms in the Loan Agreement.
1.2. INVALIDITY OF PROVISIONS
Each of the provisions contained in this Agreement is distinct and
severable and a declaration of invalidity or unenforceability of any such
provision or part thereof by a court of
competent jurisdiction shall not affect the validity or enforceability of any
other provision hereof. To the extent permitted by applicable law, the parties
waive any provision of law that renders any provision of this Agreement invalid
or unenforceable in any respect. The parties shall engage in good faith
negotiations to replace any provision which is declared invalid or unenforceable
with a valid and enforceable provision, the economic effect of which comes as
close as possible to that of the invalid or unenforceable provision which it
replaces.
1.3. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter of this Agreement. There are no warranties,
conditions, or representations (including any that may be implied by statute)
and there are no agreements in connection with such subject matter except as
specifically set forth or referred to in this Agreement No reliance is placed on
any warranty, representation, opinion, advice or assertion of fact made either
prior to, contemporaneous with, or after entering into this Agreement, or any
amendment or supplement thereto, by any party to this Agreement or its
directors, officers, employees or agents, to any other party to this Agreement
or its directors, officers, employees or agents, except to the extent that the
same has been reduced to writing and included as a term of this Agreement, and
none of the parties to this Agreement has been induced to enter into this
Agreement or any amendment or supplement by reason of any such warranty,
representation, opinion, advice or assertion of fact. Accordingly, there shall
be no liability, either in tort or in contract, assessed in relation to any such
warranty, representation, opinion, advice or assertion of fact, except to the
extent contemplated above.
1.4. WAIVER, AMENDMENT
Except as expressly provided in this Agreement, no amendment or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby No waiver of any provision of this Agreement shall
constitute a waiver of any other provision nor shall any waiver of any provision
of this Agreement constitute a continuing waiver unless otherwise expressly
provided.
1.5. GOVERNING LAW, ATTORNMENT
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
and the Guarantor hereby irrevocably attorns to the non-exclusive jurisdiction
of the courts of Ontario.
1.6. GENDER AND NUMBER
Words importing the singular include the plural and vice versa and
words importing gender include all genders.
ARTICLE 2.
GUARANTEE
2.1. GUARANTEE
The Guarantor unconditionally guarantees the due payment and
performance of all Obligations.
2.2. CONTINUING GUARANTEE
The guarantee herein shall be a continuing guarantee of the payment
and performance of all the Obligations and shall apply to and secure any
ultimate balance thereof due or remaining unpaid to the Lender. The guarantee
herein shall not be considered as wholly or partially satisfied by the
intermediate payment or satisfaction at any time of all or any part of the
Obligations.
2.3. LIMITATION AS TO RECOURSE
The recourse of the Lender against the Guarantor in respect of the
Obligations, shall be limited to realizing on security interests granted
pursuant to Article 9 hereof. The Guarantor shall not be liable to the Lender
for any deficiency resulting from any such realization or otherwise. In the
event of any conflict or inconsistency between the provisions of such security
and the provisions of this Guarantee, the provisions of this Guarantee shall
govern,
ARTICLE 3.
ENFORCEMENT
3.1. DEMAND
Upon default in the payment or performance of the Obligations or any
part thereof, the Guarantor shall, on demand by the Lender, forthwith pay to the
Lender, or perform or cause the performance of, all Obligations for which such
demand was made, whether or not any demand for the payment or performance of
such Obligations has been made upon the Borrower or any other Person or any
other action has been taken to enforce the payment or performance of such
Obligations. In the event that the Lender makes demand upon the Guarantor as
provided in this section 3.1, the Guarantor shall be liable to the Lender as
principal debtor and not as surety only, and will not plead or assert to the
contrary in any proceedings taken by the Lender in enforcing this Agreement.
3.2. REMEDIES UPON DEMAND
If the Lender makes demand upon the Guarantor as provided herein,
the Lender may: (i) realize upon all or part of the assets subject to the
Security; and (ii) take such actions and commence such proceedings as may be
permitted at law or in equity (whether or not provided for herein or in the Loan
Documents) at such times and in such manner as the Lender in its sole discretion
may consider expedient; all without, except as may be required by applicable
law, any
additional notice, presentment, demand, protest, notice of protest, dishonour or
any other action. The rights and remedies of the Lender hereunder are cumulative
and are in addition to and not in substitution for any other rights or remedies
provided by applicable law or by any of the Loan Documents.
3.3. DISTRIBUTIONS
All distributions under or in respect of any of the Security
Documents shall be held by the Lender on account of the Obligations without
prejudice to any claim by the Lender for any deficiency after such distributions
are received by the Lender and the Guarantor shall remain liable for any such
deficiency. All such distributions may be applied to such part of the
Obligations as the Lender may see fit in its sole discretion, and the Lender may
at any time change any appropriation of any such distributions or other moneys
received by it and to reapply the same on any other part of the Obligations as
the Lender may see fit, notwithstanding any previous application.
3.4. RENUNCIATION
The Guarantor hereby renounces all benefits of discussion and
division, and the Lender shall not be bound to take any recourse available to it
against the Borrower or any other Person or any security the Lender may hold,
nor to value any security before requiring or being entitled to payment from or
performance by the Guarantor.
3.5. PROTECTION OF THE LENDER
The Lender shall not be concerned to see or enquire into the powers
of the Borrower or its directors, officers, employees or agents acting or
purporting to act on its behalf. Monies, advances, renewals and credits in fact
borrowed or obtained from, or obligations otherwise created in favour of, the
Lender in the professed exercise of such powers shall be deemed to form part of
the Obligations even though the borrowing or obtaining of such monies, advances,
renewals or credits or the creation of such obligations was irregularly,
fraudulently, defectively or informally effected or in excess of the powers of
the Borrower or its directors, officers, employees or agents and notwithstanding
that the Lender has specific notice of the powers of the Borrower or its
directors, officers, employees or agents.
3.6. LENDER'S STATEMENT
The statement in writing of the Lender as to the amount of the
Obligations shall be binding upon the Guarantor and conclusive against the
Guarantor, in the absence of bad faith or manifest error.
ARTICLE 4.
APPROPRIATION AND SET-OFF
4.1. APPROPRIATION
The Lender shall be at liberty, without in any way prejudicing or
affecting its rights hereunder, to appropriate any payment made to, or monies
received by, the Lender to any portion of the Obligations whether then due or to
become due, and from time to time to revoke or alter any such appropriation, all
as the Lender may from. time to time in its sole discretion determine.
4.2. SET-OFF
The Lender may, without demand or notice of any kind, set off,
appropriate and apply any and all deposits, general or special, matured or
unmatured, held by or for the benefit of the Guarantor with the Lender, any
other indebtedness and liability of the Lender to the Guarantor, matured or
unmatured, against and on account of the Guarantor's liability hereunder or the
Obligations irrespective of whether or not the Lender has made any demand for
payment hereunder, in such order of application as the Lender may from time to
time elect.
ARTICLE 5.
POSTPONEMENT OF DEBTS
5.1. POSTPONEMENT OF DEBTS
All debts and liabilities, present and future, of the Borrower to
the Guarantor are hereby assigned to the Lender and postponed to the payment and
performance in full of the Obligations, and all monies received by the Guarantor
in respect thereof shall be received in trust for the Lender or, in the Province
of Quebec, as agent for the Lender and forthwith upon receipt shall be paid over
to the Lender, the whole without in any way lessening or limiting the liability
of the Guarantor under this Agreement. This assignment and postponement is
independent of the guarantee herein and shall remain in full force and effect
until the Lender has received payment and performance in full of all
Obligations, notwithstanding that the liability of the Guarantor under the
guarantee herein may have been discharged or terminated.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES
6.1. REPRESENTATIONS AND WARRANTIES
The Guarantor represents and warrants to the Lender that the
Guarantor is not involved in any investigation or litigation, regulatory,
arbitration or other proceedings which, if adversely determined, could have a
material adverse effect on the Guarantor's business, property, financial
condition or prospects or the ability of the Guarantor to perform its
obligations under this Guarantee.
6.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The Guarantor covenants that the representations and warranties made
in this Article 6 shall be true and correct on each day that this Guarantee
remains in force and effect, with the same effect as if such representations and
warranties had been made and given on and as of such day, notwithstanding any
investigation made at any time by or on behalf of the Lender.
ARTICLE 7.
OBLIGATIONS OF GUARANTOR NOT RELEASED
7.1. NO RELEASE
The obligation and liability of the Guarantor hereunder shall be
absolute and unconditional and shall not be released, discharged or in any way
affected by:
7.1.1. any release, renewal, extension, indulgence, discharge, loss or
alteration in or dealing with any security whatsoever, whether granted
under the Loan Agreement or otherwise, or anything done, suffered or
permitted by the Lender in relation to such security or any other security
which the Lender may now or hereafter hold in connection with the
Obligations;
7.1.2. time being given to the Borrower or to any other Person by the
Lender or by any increase, decrease or other alteration of the Obligations
or any part thereof including, without limitation, any supplement or
amendment of the Loan Agreement or other agreement;
7.1.3. the merging of the Loan Agreement or any of the Obligations in, or
any alteration thereof by virtue of, any supplement or amendment to the
Loan Agreement or other agreement;
7.1.4. any compromise, arrangement or plan of reorganization affecting the
Borrower or any other Person;
7.1.5. any change in the Borrower's business or any part thereof or in the
capital structure or constating documents of the Borrower;
7.1.6. the Borrower being amalgamated with any other corporation or being
wound up or dissolved;
7.1.7. the release of any other guarantor or of any Person liable directly
or as surety or otherwise;
7.1.8. any omission or refraining from proving the claim or any part of
the claim of the Lender in any bankruptcy, winding up, compromise or other
proceedings relating to the Borrower;
7.1.9. any other act or proceeding relating to the Obligations, the Loan
Agreement, or any other agreement relating thereto, this Agreement or any
other guarantee or security collateral to any thereof or hereof or the
security created by any thereof, whereby the Guarantor might otherwise be
released or exonerated;
7.1.10. any lack of validity or enforceability for any reason of, or any
defect in or omission from, the Loan Agreement or any other agreement
relating thereto or any other guarantee or security collateral to any
thereof or the security created by any thereof;
7.1.11. any amendment in the manner, time or place of payment or
calculation of any of the Obligations, or any other amendment or waiver of
or consent to departure from the terms of any of the Obligations, the Loan
Agreement or any other agreement relating thereto;
7.1.12. any right or power of the Borrower or any other Person to assert
any claim or defence as to the invalidity or unenforceability of the
Obligations or any part thereof;
7.1.13. the fact that the Borrower ceases for any reason whatsoever, as a
matter of law, to be liable to the Lender in respect of the Obligations
(otherwise than by reason of the payment in full of all the Obligations to
the Lender) or the fact that a court determines that the liability of the
Borrower to the Lender in respect of the Obligations has been satisfied or
is deemed to have been satisfied (except in circumstances where payment in
full of all the Obligations has been received by the Lender); or
7.1.14. any other circumstance which might otherwise constitute a defence
available to, or discharge of, the Guarantor under this Agreement or to or
of the Borrower in respect of the Obligations or the Loan Agreement or any
other agreement relating thereto or any security therefor.
7.2. NO SATISFACTION OR REDUCTION OF LIABILITY OF GUARANTOR
The guarantee herein shall not be considered as wholly or partially
satisfied by the payment at any time of any sum of money for the time being due
or remaining unpaid to the Lender, and the Guarantor shall have no right to
claim, in reduction of the liability of the Guarantor hereunder, the benefits of
any dividends, compositions, proceeds of security or payments received by the
Lender from the Borrower or from other Persons.
7.3. NO SUBROGATION
The Guarantor shall have no right to be subrogated to any rights of
the Lender or claim or prove in any bankruptcy or insolvency of the Borrower in
competition with the Lender, until the Lender shall have received payment and
performance in full of the Obligations.
7.4. RIGHTS OF LENDER
Without limiting the generality of section 7.1, the Lender shall be
at liberty, without in any way prejudicing or affecting its rights hereunder,
from time to time to receive such further or other security for the Obligations
or any part thereof as the Lender may consider
advisable, to release, discharge, abandon or otherwise deal with or fail to deal
with, the Borrower or other Persons or any such security or any part thereof or
with any security or any part thereof now held or deal with and allow the
Borrower or other Persons to deal with the goods or property covered thereby,
all as the Lender may consider advisable. The Lender may, without exonerating
the Guarantor, give up, modify or abstain from perfecting or taking advantage of
any security, accept or make any compositions or arrangements, and realize any
security when, and in such manner, and with or without notice, as the Lender may
consider advisable. The Lender may from time to time grant to the Borrower or to
any Persons liable to the Lender for the Obligations or any part thereof, or in
respect of any xxxx of exchange, promissory note, guarantee, undertaking or any
instrument, paper or document now or hereafter representing the Obligations or
any part thereof, time for payment or any other indulgence and may compromise
with all or any of such Persons as the Lender may consider advisable. Neither
the Lender nor any of its directors, officers, employees or agents shall be
responsible for any act taken or omitted to be taken by the Lender hereunder or
in connection herewith.
ARTICLE 8.
GENERAL AGREEMENTS OF GUARANTOR
8.1. GENERAL AGREEMENTS
The Guarantor agrees that:
8.1.1. she shall not provide any guarantees, make any loans or become
contingently liable for the obligations of any other Person;
8.1.2. she shall not create, grant, assume or suffer to exist any Lien
upon any of her properties or assets ranking or purporting to rank prior
to or on a parity with the Security.
ARTICLE 9.
SECURITY
9.1. SECURITY
As security for the due and punctual payment of all obligations of
the Guarantor hereunder, the Guarantor shall execute and deliver to the Lender
security documents in a form acceptable to the Lender with respect to the
security interests described in Schedule A.
9.2. FURTHER ASSURANCES - SECURITY
The Guarantor shall take such action and execute and deliver to the
Lender such agreements, conveyances, deeds and other documents and instruments
as the Lender shall request, and register, file or record the same (or a notice
or financing statement in respect thereof) in all offices where such
registration, filing or recording is, in the opinion of the Lender or Lender's
counsel, necessary or advisable to constitute, perfect and maintain the Liens
created by the security documents executed pursuant to section 9.1 in all
jurisdictions reasonably required
by the Lender, in each case within a reasonable time after the request therefor
by the Lender, and in each case in form and substance satisfactory to the Lender
and Lender's counsel.
ARTICLE 10.
GENERAL
10.1. NO WAIVER
No delay on the part of the Lender in the exercise of any right, power
or remedy hereunder or otherwise shall operate as a waiver thereof, and no
single or partial exercise by the Lender of any right, power or remedy shall
preclude other or further exercise thereof or the exercise of any other right,
power or remedy. No action of the Lender permitted hereunder shall in any way
impair or affect its rights, powers or remedies under this Agreement.
10.2. WAIVER AND ACKNOWLEDGEMENT BY GUARANTOR
The Guarantor hereby expressly waives notice of the existence or
creation of all or any of the Obligations and presentment, demand, notice of
dishonour, protest and all other notices whatsoever in respect of the
Obligations, The Guarantor hereby acknowledges communication to her of the terms
of the Loan Agreement and all instruments referred to in the Loan Agreement and
of all the provisions therein contained and consents to and approves the same.
10.3. ASSIGNMENT BY LENDER
The Lender may sell, assign or transfer all or any of the Obligations
to the extent provided in the Loan Agreement, and in such event each and every
immediate and successive assignee, transferee or holder of all or any of the
Obligations, shall have, in respect of the rights or obligations sold, assigned
or transferred to it, the full benefit hereof to the same extent as if it were
an original party to the Obligations or the part thereof so sold, assigned or
transferred, without regard to any set-off, counter-claim or equities between
the Borrower and the Lender or the Guarantor and the Lender.
10.4. COMMUNICATION
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be given by facsimile or other means of
electronic communication or by hand-delivery as hereinafter provided. Any such
notice or other communication, if sent by facsimile or other means of electronic
communication, shall be deemed to have been received on the Business Day
following the sending, or if delivered by hand shall be deemed to have been
received at the time it is delivered to the applicable address noted below
either to the individual designated below or to an individual at such address
having apparent authority to accept deliveries on behalf of the addressee. This
section shall also govern notice of change of address. Notices and other
communications shall be addressed as follows:
(a) if to the Lender:
Trilon Bancorp Inc.
Xxxxx 0000, XXX Xxxxx
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxxx
Telecopier number: (000) 000-0000
(b) if to the Guarantor:
Big Fish Ltd.
c/o Voyager Financial Services
000 Xxxxx Xxxxxx, Xxxxxxxxx
Xxxxxxxx, Bermuda
Attention; Xxxx Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Thomson Kernaghan & Co. Limited
000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Facsimile No.: (000) 000-0000
10.5. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon the Guarantor and her heirs,
executors, administrators and personal representatives and enure to the benefit
of the Lender and its successors and assigns.
10.6. COPY RECEIVED
The Guarantor hereby acknowledges receipt of a copy of this Agreement.
IN WITNESS WHEREOF the Guarantor has executed this Agreement the date
first above written.
BIG FISH LTD.
by:
----------------------------------
Name:
Title:
SCHEDULE A
SECURITY INTERESTS TO BE GRANTED
l. Perfected security interest in the 1,890,493 shares of Chell Group
Corp. held in accounts 17U2105 and 320274F in the name of the
Corporation established with Thomson Kernaghan & Co. Limited
2. Perfected security interest in all indebtedness and liability of BOTB
to the Corporation pursuant to the secured, US$1,000,000 Promissory
Note dated as of June l, 2002 issued by BOTB Corporation to the
Corporation and all agreements, guarantees, securities, bills, notes,
judgments, security agreements, chattel mortgages, mortgages,
hypothecs, conditional sales contracts and other rights and benefits
which are now or may hereafter be vested in the Corporation in respect
of or as security for such indebtedness.