Exhibit 10.1
PURCHASE AGREEMENT
(Secured Note and Share Purchase Warrants)
THIS NOTE PURCHASE AGREEMENT, dated as of January 29, 2016 (this
"Agreement"), is entered into by and between Trident Brands Incorporated, a
Nevada corporation (the "Company"), and Azure Trust Company Limited as Trustee
of the 9548181 International Pension Trust (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Purchaser wishes to purchase a 10% Promissory Note of the
Company (the "Note") and Warrants of the Company (as defined below), subject to
and upon the terms and conditions of this Agreement and acceptance of this
Agreement by the Company, on the terms and conditions referred to herein; and
WHEREAS, the Company's obligations to repay the Notes will be secured by
certain of the assets of the Company pursuant to the General Security Agreement
dated as at the Closing Date, with respect to the Note, between the Company and
the Purchaser (the "Security Agreement").
NOW THEREFORE, in consideration of the mutual covenants and the agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. AGREEMENT TO PURCHASE; PURCHASE AMOUNT, WARRANTS.
(a) PURCHASE.
(i) Subject to the terms and conditions of this Agreement and the other
Transaction Documents, the Company will issue, sell and deliver to the Purchaser
and the Purchaser hereby agrees to purchase the Note in the aggregate principal
amount of US$250,00 (the "Purchase Amount") with terms and conditions as set
forth in the Note, which Note shall be paid for, funded and issued on January
20, 2016.
(ii) The Note shall be in the form of ANNEX I annexed hereto. The Notes
will be secured by a pledge of certain of the Company's assets pursuant to the
General Security Agreement in the form of ANNEX II.
(iii) Aa additional consideration for the Purchaser agreeing to purchase
the Note, the Company agrees to issue to the Purchaser the Warrants (as defined
herein) in the form of ANNEX III hereto with each Warrant exercisable for three
(3) years from the Closing Date to purchase one (1) share of Common Stock of the
Company at the price of $1.35 per share. The number of Warrants issuable to the
Purchaser shall be equal to fifty percent (50%) of the Purchase Amount divided
by the closing price of the Common Stock as quoted on the OTC Markets electronic
quotation service on the date immediately preceding the Closing Date. Additional
provisions relating to the Warrants are provided below.
(iv) The purchase of the Note, the Warrants, and the issuance of the
underlying Warrant Shares to the Purchaser and the other transactions
contemplated hereby are sometimes referred to herein and in the other
Transaction Documents as the purchase and sale of the Securities (as defined
below), and are referred to collectively as the "Transactions".
(b) CERTAIN DEFINITIONS. As used herein, each of the following terms has
the meaning set forth below, unless the context otherwise requires:
"1933 Act" has the meaning set forth in the recitals hereof.
"1934 Act" has the meaning set forth in Section 3(a).
"Affiliate" means, with respect to a specific Person referred to in the
relevant provision, another Person who or which controls or is controlled by or
is under common control with such specified Person.
"Agreement" has the meaning set forth in the preamble hereof.
"Claim Notice" has the meaning set forth in Section 8(b)(i).
"Closing Date" means the date of the closing of the issuance of the Note.
"Common Stock" all of the issued and outstanding shares of the Company,
issued in one class, as of the date hereof and hereafter from time to time.
"Common Stock Equivalents" means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
"Company" has the meaning set forth in the preamble hereto.
"Company Control Person" means each director, executive officer, promoter,
and such other Persons as may be deemed in control of the Company pursuant to
Rule 405 under the 1933 Act or Section 20 of the 1934 Act (as defined below).
"Damages" has the meaning set forth in Section 8(a).
"Dispute Period" has the meaning set forth in Section 8(b)(i).
"GAAP" has the meaning set forth in Section 3(i).
"Holder" means the Person holding the relevant Securities at the relevant
time.
"Indemnified Parties" or "Indemnified Party" has the meaning set forth in
Section 8(a)(i).
"Indemnifying Party" has the meaning set forth in Section 8(b)(i).
"Indemnity Notice" has the meaning set forth in Section 8(b)(ii).
"Last Audited Date" means November 30, 2014,
"Material Adverse Effect" means an event or combination of events, which
individually or in the aggregate, would reasonably be expected to (w) adversely
affect the legality, validity or enforceability of the Securities or any of the
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Transaction Documents, (x) have or result in a material adverse effect on the
results of operations, assets, prospects, or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole, (y) adversely impair the
Company's ability to perform fully on a timely basis its obligations under any
of the Transaction Documents or the Transactions contemplated thereby, or (z)
materially and adversely affect the value of the rights granted to the Purchaser
in the Transaction Documents.
"Note" has the meaning set forth in the recitals hereof.
"Notice" has the meaning set forth in Section 11.
"Person" means any living person or any entity, such as, but not
necessarily limited to, a corporation, partnership or trust.
"Principal Trading Market" means the OTC Markets electronic quotation
system or such other market on which the Common Stock is principally traded at
the relevant time.
"Purchase Amount" has the meaning set forth in Section 1(a)(i).
"Purchaser" has the meaning set forth in the preamble hereof.
"Purchaser Control Person" means each director, executive officer,
promoter, and such other Persons as may be deemed in control of the Purchaser
pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.
"Rule 144" has the meaning set forth in Section 4(a).
"SEC" has the meaning set forth in the recitals hereof.
"SEC Documents" has the meaning set forth in Section 2(e).
"SEC Reports" has the meaning set forth in Section 3(h)(i).
"Securities" means the Warrants, the Warrant Shares, and any Common Stock
that may be issued to the Purchaser in connection with any other agreements
between the parties.
"Security Agreement" has the meaning set forth in the recitals hereof.
"State of Incorporation" means the State of Nevada.
"Third Party Claim" has the meaning set forth in Section 8(b)(i).
"Trading Day" means any day during which the Principal Trading Market shall
be open for business.
"Transaction Documents" means this Agreement, the Note, Security Agreement,
the Warrants, and includes all ancillary documents referred to in those
agreements.
"Transactions" has the meaning set forth in Section 1(a)(iv).
"Transfer Agent" means, at any time, the transfer agent for the Company's
Common Stock.
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"US$" means legal currency of the United States of America.
"Warrant(s)" means the share purchase warrants in the form of Annex III of
this Agreement and issued to the Purchaser in accordance with above Section 1
(a)(iii).
"Warrant Shares" means shares of Common Stock underlying the Warrants.
(c) FORM OF PAYMENT; DELIVERY OF CERTIFICATES.
(i) The Purchaser shall pay Purchase Amount by delivering immediately
available good funds in United States Dollars to the Company on the Closing
Date.
(ii) On the Closing Date, the Company shall deliver the Note and the
Warrant, executed on behalf of the Company to the Purchaser.
(iii) By signing this Agreement, each of the Purchaser and the Company
agrees to all of the terms and conditions of the Transaction Documents, all of
the provisions of which are incorporated herein by this reference as if set
forth in full.
(d) METHOD OF PAYMENT. Payment of the Purchase Amount shall be made by wire
transfer of funds to:
Trident Brands Inc.
000 X Xxxxxxxxx Xx Xxx 000
Xxxxxxxxxx, XX 00000-0000
BB&T
ABA Routing Number - 000000000
Account Number
BB&T
0000 Xxxxxxxxx Xxxx,
Xxxxx Xxxxxx Xxxxxx,
Xxxxxxx 00000 (2593)
2. PURCHASER REPRESENTATIONS AND WARRANTIES.
The Purchaser represents and warrants to, and covenants and agrees with,
the Company as follows:
(a) Without limiting Purchaser's right to sell the Securities pursuant to
an effective registration statement or
(b) in compliance with the 1933 Act, the Purchaser is purchasing the
Securities for its own account for investment only and not with a view towards
the public sale or distribution thereof and not with a view to or for sale in
connection with any distribution thereof.
(c) The Purchaser is (i) experienced in making investments of the kind
described in this Agreement and the related documents, (ii) able, by reason of
the business and financial experience of its officers and professional advisors
(who are not affiliated with or compensated in any way by the Company or any of
its Affiliates or selling agents), to protect its own interests in connection
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with the Transactions described in this Agreement, and the related documents,
and to evaluate the merits and risks of an investment in the Securities, and
(iii) able to afford the entire loss of its investment in the Securities.
(d) The Purchaser understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of the 1933 Act and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Purchaser's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Purchaser set forth herein and in either the Certificate of U.S. Investor
attached hereto as SCHEDULE 1A or the Certificate of Non-U.S. Investor Attached
hereto as SCHEDULE 1B, as applicable to the Purchaser, in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Securities.
(e) The Purchaser and its advisors, if any, have been furnished with or
have been given access to all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities which have been requested by the Purchaser, including those set forth
on in any annex attached hereto. The Purchaser and its advisors, if any, have
been afforded the opportunity to ask questions of the Company and its management
and have received complete and satisfactory answers to any such inquiries.
Without limiting the generality of the foregoing, the Purchaser has also had the
opportunity to obtain and to review the Company's filings on XXXXX
(collectively, the "SEC Documents").
(f) The Purchaser understands that its investment in the Securities
involves a high degree of risk.
(g) The Purchaser hereby represents that, in connection with its purchase
of the Securities, it has not relied on any statement or representation by the
Company or any of its officers, directors and employees or any of their
respective attorneys or agents, except as specifically set forth herein.
(h) The Purchaser understands that no United States federal or state agency
or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities.
(i) This Agreement and the other Transaction Documents to which the
Purchaser is a party, and the Transactions contemplated thereby, have been duly
and validly authorized, executed and delivered on behalf of the Purchaser and
are valid and binding agreements of the Purchaser enforceable in accordance with
their respective terms, subject as to enforceability to general principles of
equity and to bankruptcy, insolvency, moratorium and other similar laws
affecting the enforcement of creditors' rights generally.
3. COMPANY REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Purchaser as of the date hereof and as of each Closing Date.
(a) STATUS. The Company: (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Incorporation and
has the requisite corporate power to own its properties and to carry on its
business as now being conducted; (b) is duly qualified as a foreign corporation
to do business and is in good standing in each jurisdiction where the nature of
the business conducted or property owned by it makes such qualification
necessary, other than those jurisdictions in which the failure to so qualify
would not have or result in a Material Adverse Effect; (c) has all requisite
power and authority and the legal right to own, pledge, mortgage and operate its
property, to lease or sublease any property it operates under lease or sublease
and to conduct its business as now or currently proposed to be conducted; and
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(d) is in compliance with its constituent documents. In addition, the Company
has registered its stock and is obligated to file reports pursuant to Section 12
or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "1934
Act"). The Common Stock is, or immediately following the initial Closing Date
will be, quoted on the Principal Trading Market. The Company has received no
notice, either oral or written, with respect to the continued eligibility of the
Common Stock for such quotation on the Principal Trading Market, and the Company
has maintained all requirements on its part for the continuation of such
quotation.
(b) AUTHORIZED SHARES.
(i) The authorized capital stock of the Company consists of 75,000,000
shares of Common Stock, US$0.001 par value, of which 28,000,000 shares are
outstanding as of the date hereof.
(ii) The Company has sufficient authorized and unissued shares of Common
Stock as may be necessary to effect the issuance of Warrant Shares upon exercise
of of the Warrants.
(iii) Upon each issuance of the Warrant Shares, as applicable, the Warrants
Shares shall have been duly authorized by all necessary corporate action on the
part of the Company and shall be duly and validly issued, fully paid and
non-assessable.
(c) TRANSACTION DOCUMENTS AND STOCK. This Agreement and each of the other
Transaction Documents, and the Transactions contemplated thereby, have been duly
and validly authorized by the Company, this Agreement has been duly executed and
delivered by the Company and this Agreement is, and the Note and each of the
other Transaction Documents, when executed and delivered by the Company, will
be, valid and binding agreements of the Company enforceable in accordance with
their respective terms, subject as to enforceability to general principles of
equity and to bankruptcy, insolvency, moratorium, and other similar laws
affecting the enforcement of creditors' rights generally.
(d) FILINGS. None of the SEC Documents contained, at the time they were
filed, any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements made
therein in light of the circumstances under which they were made, not
misleading.
(e) ABSENCE OF CERTAIN CHANGES. Since the Last Audited Date, there has been
no material adverse change and no Material Adverse Effect, except as disclosed
in the SEC Documents. Since the Last Audited Date, except as provided in the SEC
Documents, the Company has not (i) incurred or become subject to any material
liabilities (absolute or contingent) except liabilities incurred in the ordinary
course of business consistent with past practices; (ii) discharged or satisfied
any material lien or encumbrance or paid any material obligation or liability
(absolute or contingent), other than current liabilities paid in the ordinary
course of business consistent with past practices; (iii) declared or made any
payment or distribution of cash or other property to its shareholders with
respect to its capital stock, or purchased or redeemed, or made any agreements
to purchase or redeem, any shares of its capital stock; (iv) sold, assigned or
transferred any other tangible assets, or canceled any debts owed to the Company
by any third party or claims of the Company against any third party, except in
the ordinary course of business consistent with past practices; (v) waived any
rights of material value, whether or not in the ordinary course of business, or
suffered the loss of any material amount of existing business; (vi) made any
increases in employee compensation, except in the ordinary course of business
consistent with past practices; or (vii) experienced any material problems with
labor or management in connection with the terms and conditions of their
employment.
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(f) ABSENCE OF LITIGATION. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Company, threatened against or affecting the Company before or
by any governmental authority or nongovernmental department, commission, board,
bureau, agency or instrumentality or any other person, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect or which would
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, any of the Transaction
Documents. The Company is not aware of any valid basis for any such claim that
(either individually or in the aggregate with all other such events and
circumstances) could reasonably be expected to have a Material Adverse Effect.
There are no outstanding or unsatisfied judgments, orders, decrees, writs,
injunctions or stipulations to which the Company is a party or by which it or
any of its properties is bound, that involve the transaction contemplated herein
or that, alone or in the aggregate, could reasonably be expect to have a
Material Adverse Effect.
(g) NO UNDISCLOSED LIABILITIES OR EVENTS. To the best of the Company's
knowledge, the Company has no liabilities or obligations other than those
disclosed in the Transaction Documents or the SEC Documents or those incurred in
the ordinary course of the Company's business since the Last Audited Date, or
which individually or in the aggregate, do not or would not have a Material
Adverse Effect. No event or circumstances has occurred or exists with respect to
the Company or its properties, business, operations, condition (financial or
otherwise), or results of operations, which, under applicable law, rule or
regulation, requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed. There
are no proposals currently under consideration or currently anticipated to be
under consideration by the Board of Directors or the executive officers of the
Company which proposal would (x) change the articles or certificate of
incorporation or other charter document or by-laws of the Company, each as
currently in effect, with or without shareholder approval, which change would
reduce or otherwise adversely affect the rights and powers of the shareholders
of the Common Stock or (y) materially or substantially change the business,
assets or capital of the Company, including its interests in subsidiaries.
(h) AUTHORIZATION; ENFORCEMENT.
(i) The Company has the requisite corporate power and authority to enter
into and to consummate the Transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations thereunder. The execution
and delivery of each of the Transaction Documents by the Company and the
consummation by it of the Transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company in connection therewith. Each Transaction
Document has been (or upon delivery will have been) duly executed by the Company
and, when delivered in accordance with the terms hereof, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (x) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (y) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.
(ii) The execution, delivery and performance by the Company of the
Transaction Documents and the consummation of the Transactions contemplated
therein: (x) do not (A) contravene the Company's constituent documents, (B)
violate any applicable requirement of law, except for any such violations which
would not individually or in the aggregate, have or reasonably be expected to
have, a Material Adverse Effect, (C) conflict with, contravene, constitute a
default or breach under, or result in or permit the termination or acceleration
of, any contractual obligation of the Company other than those that would not,
individually or in the aggregate, have or reasonably be expected to have, a
Material Adverse Effect and are not created or caused by a conflict, breach,
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default or termination or acceleration event, or (D) result in the imposition of
any lien, security interest, mortgage, deed of trust, priority, pledge, charge,
right of first refusal or other encumbrance or similar right of others, or any
agreement to give any of the following upon the Securities or any property of
the Company; and (y) do not require any Permit of, or filing with, any
governmental authority or any consent of, or notice to, any Person (other than
with respect to the Purchaser's acquisition of the Securities), the filings
that, if not obtained, would not, individually or in the aggregate, have or
reasonably be expected to have, a Material Adverse Effect. For purposes of this
Agreement, a "Permit" means any permit, approval, authorization, license,
registration, certificate, concession, grant, franchise, variance or permission
from, and any other contractual obligation with, any governmental authority
(excluding any contractual obligations with "pools" and other governmental
authorities entered into in the ordinary course of business consistent with past
practices), in each case whether or not having the force of law and applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
(i) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed all reports
required to be filed by it under the 1934 Act, including pursuant to Section
13(a) or 15(d) thereof, for the two years preceding the date hereof (or such
shorter period as the Company was required by law to file such material) (the
foregoing materials, including the exhibits thereto, being collectively referred
to herein as the "SEC Reports") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company comply
in all material respects with applicable accounting requirements and the rules
and regulations of the SEC with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved ("GAAP"), except as may be otherwise specified in
such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.
(j) SOLVENCY. Both before and after giving effect to (i) the issuance of
the Securities, (b) the consummation of the Purchaser's acquisition of the
Securities, and (ii) the payment and accrual of all transaction costs in
connection with the foregoing, the Company on a consolidated basis in accordance
with GAAP, is solvent.
(k) INVESTMENT COMPANY ACT. The Company is not an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(l) FULL DISCLOSURE. The written information prepared or furnished by or on
behalf of the Company in connection with any Transaction Document, when taken as
a whole when furnished (including the consummation of the Transactions or any
other transaction contemplated therein) does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained therein, in light of the circumstances when made, not
misleading; provided, however, that projections contained therein are not to be
viewed as factual and that actual results during the periods covered thereby may
differ from the results set forth in such projections by a material amount. All
projections that are part of such information (including those set forth in any
projections delivered subsequent to the Closing Date) are based upon good faith
estimates and stated assumptions believed by the Company to be reasonable and
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fair as of the date made in light of conditions and facts then known and, as of
such date, reflect good faith estimates of the information projected for the
periods set forth therein.
(m) NO BROKERS. Neither the Company nor any of its subsidiaries, employees
or agents has employed or incurred any liability to any broker, finder or agent
for any brokerage fees, finder's fees, commissions or other amounts with respect
to the Transaction Documents or the Transactions. The Company agrees to
indemnify and hold harmless the Purchaser from any liability for any commission
or compensation in the nature of a finder's or broker's fee arising out of this
transaction (and the costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or
representatives is responsible.
(n) OFFERING OF SECURITIES; SUBSEQUENT OFFERS AND SALES. It is not
necessary in connection with the offer, sale and delivery of the Securities to
the Purchaser to register the offer and sale of the Securities under the 1933
Act. The Company has not, directly or indirectly, offered, sold or solicited any
offer to buy and will not, directly or indirectly, offer, sell or solicit any
offer to buy, any security of a type or in a manner which would be integrated
with the sale of the Common Stock and require any of the Securities to be
registered under the 1933 Act. Neither the Company nor any Person acting on its
behalf has engaged or will engage in any form of general solicitation or general
advertising (within the meaning of Rule 502(c) under the 0000 Xxx) in connection
with the offering of the Securities. In addition, all subsequent offers and
sales of the Securities by the Company shall be made pursuant to registration of
the relevant Securities under the 1933 Act or pursuant to an exemption from
registration.
(o) PATRIOT ACT.
(i) Neither the Company nor any of their respective directors, officers,
agents, employees or Affiliates (and, to the knowledge of the Company, no joint
venture or subsidiary thereof) is in violation in any material respects of any
United States requirements of law relating to terrorism, sanctions or money
laundering, including the United States Executive Order No. 13224 on Terrorist
Financing and the PATRIOT Act.
(ii) Neither any (A) director, officer, agent, employee or Affiliate of the
Company nor (B) any material supplier or customer of the Company, is a Person
with whom dealings are prohibited under any sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department ("OFAC") or any other
applicable U.S. sanctions laws; and neither the Company nor any of their
respective directors, officers, agents, employees or Affiliates will directly or
indirectly use the proceeds derived from any of the Transactions or otherwise
make available such proceeds to any Person, for the purpose of financing the
activities of any Person in violation of sanctions administered by OFAC or any
other applicable U.S. sanction laws.
(iii) The Company is in compliance, in all material respects, with the
PATRIOT Act. No part of the proceeds of the Common Stock will be used by the
Company or any of its directors, officers, agents, employees or Affiliates,
directly or indirectly, for any payments to any Person, including any government
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended or any
other applicable anti-corruption law.
(p) NO VIOLATION. The entering into and performance of this Agreement by
the Company will not result in any violation of the articles or by-laws of the
Company or of the terms of any agreement or instrument by which the Company are
bound or of any judgment or order to which the Company is subject.
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(q) BANKRUPTCY. No bankruptcy, insolvency or receivership proceedings have
been instituted or are pending against Company and it is able to satisfy his
liabilities as they become due.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
(a) TRANSFER RESTRICTIONS. The Purchaser acknowledges that (1) the
Securities have not been and are not being registered under the provisions of
the 1933 Act and, the Conversion Shares have not been and are not being
registered under the 1933 Act, and may not be transferred unless (A)
subsequently registered thereunder or (B) the Purchaser shall have delivered to
the Company an opinion of counsel, reasonably satisfactory in form, scope and
substance to the Company, to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration; (2) any sale of the Securities made in reliance on Rule 144
promulgated under the 1933 Act ("Rule 144") may be made only in accordance with
the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of
such Securities under circumstances in which the seller, or the Person through
whom the sale is made, may be deemed to be an underwriter, as that term is used
in the 1933 Act, may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (3) neither the
Company nor any other Person is under any obligation to register the Securities
(other than pursuant to Section 10 hereof) under the 1933 Act or to comply with
the terms and conditions of any exemption thereunder.
(b) RESTRICTIVE LEGEND. The Purchaser acknowledges and agrees that the
certificates and other instruments representing any of the Securities shall bear
a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of any such Securities):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER
EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."
(c) FILINGS. The Company undertakes and agrees to make all necessary
filings in connection with the sale of the Securities to the Purchaser under any
United States laws and regulations applicable to the Company, or by any domestic
securities exchange or trading market, and to provide a copy thereof to the
Purchaser promptly after such filing.
(d) REPORTING STATUS. So long as the Purchaser beneficially owns any of the
Securities, the Company shall file all reports required to be filed with the SEC
pursuant to Section 13 or 15(d) of the 1934 Act, shall take all reasonable
action under its control to ensure that adequate current public information with
respect to the Company, as required in accordance with Rule 144(c)(2) of the
1933 Act, is publicly available, and shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination. The Company will take
all reasonable action under its control to maintain the continued listing and
quotation and trading of its Common Stock on the Principal Trading Market or a
listing on the NASDAQ/Small Cap or National Markets and, to the extent
applicable to it, will comply in all material respects with the Company's
reporting, filing and other obligations under the by-laws or rules of the
Principal Trading Market and/or the National Association of Securities Dealers,
Inc., as the case may be, applicable to it for so long as the Purchaser
beneficially owns any of the Securities.
10
(e) USE OF PROCEEDS. The Company will use the proceeds received hereunder
(excluding amounts paid by the Company for legal fees in connection with the
sale of the Securities) for working capital.
(f) TAXES. The Company shall be responsible for any liability with respect
to any transfer, stamp or similar non-income taxes that may be payable in
connection with the execution, delivery and performance of this Agreement.
5. CLOSING DATE.
(a) The respective Closing Date shall occur as indicated in Section 1(a)(i)
after each of the conditions contemplated by Sections 7 and 8 hereof shall have
either been satisfied or been waived by the party in whose favor such conditions
run.
(b) The closing of the Transactions shall occur on the respective Closing
Date at the offices of the Purchaser and shall take place no later than 3:00
P.M., PST, on such day or such other time as is mutually agreed upon by the
Company and the Purchaser.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Purchaser understands that the Company's obligation to sell each Note
and the applicable Conversion Shares to the Purchaser pursuant to this Agreement
on each Closing Date is conditioned upon:
(a) The execution and delivery of this Agreement, including either Schedule
1A or Schedule 1B, by the Purchaser;
(b) Delivery by the Purchaser to the Company of good funds as payment in
full of an amount equal to the applicable portion of the Purchase Amount in
accordance with this Agreement;
(c) The truth and accuracy on each such Closing Date of the representations
and warranties of the Purchaser contained in this Agreement and either Schedule
1A or Schedule 1B (as applicable to the Purchaser), each as if made on such
date, and the performance by the Purchaser on or before such date of all
covenants and agreements of the Purchaser required to be performed on or before
such date; and
(d) There shall not be in effect any law, rule or regulation prohibiting or
restricting the Transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained.
7. CONDITIONS TO THE PURCHASER'S OBLIGATION TO PURCHASE.
The Company understands that the Purchaser's obligation to purchase each
Note and its acceptance of any shares of the Company's Common Stock that may be
issued in connection with any agreements between the parties hereto on each
Closing Date is conditioned upon:
(a) The execution and delivery of this Agreement and the other Transaction
Documents by the Company;
(b) Delivery by the Company to the Purchaser of the Certificates in
accordance with this Agreement or any other agreements between the parties;
11
(c) The execution and delivery of the Security Agreement and UCC-1
Financing Statement on certain of the Company's assets;
(d) The Note to be issued shall be senior to all other debt of the Company,
other than previously issued notes (as disclosed in Schedule 2);
(e) The accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained in this Agreement, each
as if made on such date, and the performance by the Company on or before such
date of all covenants and agreements of the Company required to be performed on
or before such date;
(f) The Company must be current with all required 1934 Act filings;
(g) There shall not be in effect any law, rule or regulation prohibiting or
restricting the Transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained; and
(h) From and after the date hereof to and including each Closing Date, each
of the following conditions will remain in effect: (i) the trading of the Common
Stock shall not have been suspended by the SEC or on the Principal Trading
Market; (ii) trading in securities generally on the Principal Trading Market
shall not have been suspended; and (iii) there shall not have been any Material
Adverse Effect in regards to the Company.
8. INDEMNIFICATION AND REIMBURSEMENT.
(a) (i) The Company agrees to indemnify and hold harmless the Purchaser and
its officers, directors, employees, and agents, and each Purchaser Control
Person (collectively, the "Indemnified Parties" and each, an "Indemnified
Party") from and against any losses, claims, damages, liabilities or expenses
incurred (collectively, "Damages"), joint or several, and any action in respect
thereof to which any Indemnified Party becomes subject to, resulting from,
arising out of or relating to any misrepresentation, breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part of
the Company contained in this Agreement, as such Damages are incurred, except to
the extent such Damages result primarily from the Indemnified Party's failure to
perform any covenant or agreement contained in this Agreement or the Indemnified
Party's negligence, recklessness or bad faith in performing its obligations
under this Agreement.
(ii) The Company hereby agrees that, if the Purchaser, other than by reason
of its negligence, illegal or willful misconduct (in each case, as determined by
a non-appealable judgment to such effect), (x) becomes involved in any capacity
in any action, proceeding or investigation brought by any shareholder of the
Company, in connection with or as a result of the consummation of the
Transactions contemplated by this Agreement or the other Transaction Documents,
or if the Purchaser is impleaded in any such action, proceeding or investigation
by any Person, or (y) becomes involved in any capacity in any action, proceeding
or investigation brought by the SEC, any self-regulatory organization or other
body having jurisdiction, against or involving the Company or in connection with
or as a result of the consummation of the Transactions contemplated by this
Agreement or the other Transaction Documents, or (z) is impleaded in any such
action, proceeding or investigation by any Person, then in any such case, the
Company shall indemnify, defend and hold harmless the Purchaser from and against
and in respect of all losses, claims, liabilities, damages or expenses resulting
from, imposed upon or incurred by the Purchaser, directly or indirectly, and
reimburse such Purchaser for its reasonable legal and other expenses (including
the cost of any investigation and preparation) incurred in connection therewith,
as such expenses are incurred. The indemnification and reimbursement obligations
12
of the Company under this paragraph (a) shall be in addition to any liability
which the Company may otherwise have, shall extend upon the same terms and
conditions to any Affiliates of the Purchaser who are actually named in such
action, proceeding or investigation, and partners, directors, agents, employees
and Purchaser Control Persons (if any), as the case may be, of the Purchaser and
any such Affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the
Purchaser, any such Affiliate and any such Person. The Company also agrees that
neither the Purchaser nor any such Affiliate, partner, director, agent, employee
or Purchaser Control Person shall have any liability to the Company or any
Person asserting claims on behalf of or in right of the Company in connection
with or as a result of the consummation of this Agreement or the other
Transaction Documents, except as may be expressly and specifically provided in
or contemplated by this Agreement.
(b) All claims for indemnification by any Indemnified Party (as defined
below) under this Section shall be asserted and resolved as follows:
(i) In the event any claim or demand in respect of which any Person
claiming indemnification under any provision of this Section (an "Indemnified
Party") might seek indemnity under paragraph (a) of this Section is asserted
against or sought to be collected from such Indemnified Party by a Person other
than a party hereto or an Affiliate thereof (a "Third Party Claim"), the
Indemnified Party shall deliver a written notification, enclosing a copy of all
papers served, if any, and specifying the nature of and basis for such Third
Party Claim and for the Indemnified Party's claim for indemnification that is
being asserted under any provision of this Section against any Person (the
"Indemnifying Party"), together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of such Third
Party Claim (a "Claim Notice") with reasonable promptness to the Indemnifying
Party. If the Indemnified Party fails to provide the Claim Notice with
reasonable promptness after the Indemnified Party receives notice of such Third
Party Claim, the Indemnifying Party shall not be obligated to indemnify the
Indemnified Party with respect to such Third Party Claim to the extent that the
Indemnifying Party's ability to defend has been prejudiced by such failure of
the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party
as soon as practicable within the period ending thirty (30) calendar days
following receipt by the Indemnifying Party of either a Claim Notice or an
Indemnity Notice (as defined below) (the "Dispute Period") whether the
Indemnifying Party disputes its liability or the amount of its liability to the
Indemnified Party under this Section and whether the Indemnifying Party desires,
at its sole cost and expense, to defend the Indemnified Party against such Third
Party Claim. The following provisions shall also apply.
(x) If the Indemnifying Party notifies the Indemnified Party within the
Dispute Period that the Indemnifying Party desires to defend the
Indemnified Party with respect to the Third Party Claim pursuant to this
paragraph (b) of this Section, then the Indemnifying Party shall have the
right to defend, with counsel reasonably satisfactory to the Indemnified
Party, at the sole cost and expense of the Indemnifying Party, such Third
Party Claim by all appropriate proceedings, which proceedings shall be
vigorously and diligently prosecuted by the Indemnifying Party to a final
conclusion or will be settled at the discretion of the Indemnifying Party
(but only with the consent of the Indemnified Party in the case of any
settlement that provides for any relief other than the payment of monetary
damages or that provides for the payment of monetary damages as to which
the Indemnified Party shall not be indemnified in full pursuant to
paragraph (a) of this Section). The Indemnifying Party shall have full
control of such defense and proceedings, including any compromise or
settlement thereof; provided, however, that the Indemnified Party may, at
the sole cost and expense of the Indemnified Party, at any time prior to
the Indemnifying Party's delivery of the notice referred to in the first
sentence of this subparagraph (x), file any motion, answer or other
pleadings or take any other action that the Indemnified Party reasonably
believes to be necessary or appropriate protect its interests; and provided
13
further, that if requested by the Indemnifying Party, the Indemnified Party
will, at the sole cost and expense of the Indemnifying Party, provide
reasonable cooperation to the Indemnifying Party in contesting any Third
Party Claim that the Indemnifying Party elects to contest. The Indemnified
Party may participate in, but not control, any defense or settlement of any
Third Party Claim controlled by the Indemnifying Party pursuant to this
subparagraph (x), and except as provided in the preceding sentence, the
Indemnified Party shall bear its own costs and expenses with respect to
such participation. Notwithstanding the foregoing, the Indemnified Party
may take over the control of the defense or settlement of a Third Party
Claim at any time if it irrevocably waives its right to indemnity under
paragraph (a) of this Section with respect to such Third Party Claim.
(y) If the Indemnifying Party fails to notify the Indemnified Party within
the Dispute Period that the Indemnifying Party desires to defend the Third
Party Claim pursuant to paragraph (b) of this Section, or if the
Indemnifying Party gives such notice but fails to prosecute vigorously and
diligently or settle the Third Party Claim, or if the Indemnifying Party
fails to give any notice whatsoever within the Dispute Period, then the
Indemnified Party shall have the right to defend, at the sole cost and
expense of the Indemnifying Party, the Third Party Claim by all appropriate
proceedings, which proceedings shall be prosecuted by the Indemnified Party
in a reasonable manner and in good faith or will be settled at the
discretion of the Indemnified Party (with the consent of the Indemnifying
Party, which consent will not be unreasonably withheld). The Indemnified
Party will have full control of such defense and proceedings, including any
compromise or settlement thereof; provided, however, that if requested by
the Indemnified Party, the Indemnifying Party will, at the sole cost and
expense of the Indemnifying Party, provide reasonable cooperation to the
Indemnified Party and its counsel in contesting any Third Party Claim which
the Indemnified Party is contesting. Notwithstanding the foregoing
provisions of this subparagraph (y), if the Indemnifying Party has notified
the Indemnified Party within the Dispute Period that the Indemnifying Party
disputes its liability or the amount of its liability hereunder to the
Indemnified Party with respect to such Third Party Claim and if such
dispute is resolved in favor of the Indemnifying Party in the manner
provided in subparagraph (z) below, the Indemnifying Party will not be
required to bear the costs and expenses of the Indemnified Party's defense
pursuant to this subparagraph (y) or of the Indemnifying Party's
participation therein at the Indemnified Party's request, and the
Indemnified Party shall reimburse the Indemnifying Party in full for all
reasonable costs and expenses incurred by the Indemnifying Party in
connection with such litigation. The Indemnifying Party may participate in,
but not control, any defense or settlement controlled by the Indemnified
Party pursuant to this subparagraph (y), and the Indemnifying Party shall
bear its own costs and expenses with respect to such participation.
(z) If the Indemnifying Party notifies the Indemnified Party that it does
not dispute its liability or the amount of its liability to the Indemnified
Party with respect to the Third Party Claim under paragraph (a) of this
Section or fails to notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes its liability or the amount of its
liability to the Indemnified Party with respect to such Third Party Claim,
the amount of Damages specified in the Claim Notice shall be conclusively
deemed a liability of the Indemnifying Party under paragraph (a) of this
Section and the Indemnifying Party shall pay the amount of such Damages to
the Indemnified Party on demand. If the Indemnifying Party has timely
disputed its liability or the amount of its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party shall proceed in
14
good faith to negotiate a resolution of such dispute; provided, however,
that if the dispute is not resolved within thirty (30) days after the date
of the Claim Notice, the Indemnifying Party shall be entitled to institute
such legal action as it deems appropriate.
(ii) In the event any Indemnified Party should have a claim under paragraph
(a) of this Section against the Indemnifying Party that does not involve a Third
Party Claim, the Indemnified Party shall deliver a written notification of a
claim for indemnity under paragraph (a) of this Section specifying the nature of
and basis for such claim, together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of such claim (an
"Indemnity Notice") with reasonable promptness to the Indemnifying Party. The
failure by any Indemnified Party to give the Indemnity Notice shall not impair
such party's rights hereunder except to the extent that the Indemnifying Party
demonstrates that it has been irreparably prejudiced thereby. If the
Indemnifying Party notifies the Indemnified Party that it does not dispute the
claim or the amount of the claim described in such Indemnity Notice or fails to
notify the Indemnified Party within the Dispute Period whether the Indemnifying
Party disputes the claim or the amount of the claim described in such Indemnity
Notice, the amount of Damages specified in the Indemnity Notice will be
conclusively deemed a liability of the Indemnifying Party under paragraph (a) of
this Section and the Indemnifying Party shall pay the amount of such Damages to
the Indemnified Party on demand. If the Indemnifying Party has timely disputed
its liability or the amount of its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute; provided, however, that it the dispute
is not resolved within thirty (30) days after the Claim Notice, the Indemnifying
Party shall be entitled to institute such legal action as it deems appropriate.
(c) The indemnity agreements contained herein shall be in addition to (i)
any cause of action or similar rights of the indemnified party against the
indemnifying party or others, and (ii) any liabilities the indemnifying party
may be subject to.
9. JURY TRIAL WAIVER. The Company and the Purchaser hereby waive a trial by
jury in any action, proceeding or counterclaim brought by either of the parties
hereto against the other in respect of any matter arising out or in connection
with the Transaction Documents.
10. GOVERNING LAW: MISCELLANEOUS.
(a) (i) This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New York for contracts to be wholly performed in
such state and without giving effect to the principles thereof regarding the
conflict of laws. Each of the parties consents to the exclusive jurisdiction of
the federal courts whose districts encompass any part of the state courts of the
State of New York as in connection with any dispute arising under this Agreement
or any of the other Transaction Documents and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on FORUM
NON CONVENIENS, to the bringing of any such proceeding in such jurisdictions or
to any claim that such venue of the suit, action or proceeding is improper. To
the extent determined by such court, the Company shall reimburse the Purchaser
for any reasonable legal fees and disbursements incurred by the Purchaser in
enforcement of or protection of any of its rights under any of the Transaction
Documents. Nothing in this Section shall affect or limit any right to serve
process in any other manner permitted by law.
(ii) The Company and the Purchaser acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement or
the other Transaction Documents were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
15
breaches of the provisions of this Agreement and the other Transaction Documents
and to enforce specifically the terms and provisions hereof and thereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity.
(b) If any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
(c) This Agreement may be amended only by an instrument in writing signed
by the party to be charged with enforcement thereof.
11. NOTICES. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of:
(a) the date delivered, if delivered by personal delivery as against
written receipt therefor or by confirmed facsimile transmission,
(b) the fifth Trading Day after deposit, postage prepaid, in the United
States Postal Service by registered or certified mail, or
(c) the third Trading Day after mailing by domestic or international
express courier, with delivery costs and fees prepaid, in each case, addressed
to each of the other parties thereunto entitled at the following addresses (or
at such other addresses as such party may designate by ten (10) days' advance
written notice similarly given to each of the other parties hereto):
COMPANY: Trident Brands Incorporated
000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
X.X.X.
Tel: 000-000-0000
Fax: 000-000-0000
Attention: Xxxxxxx Xxxxxx
PURCHASER: _________________________________.
_________________________________.
_________________________________.
Tel: *
Fax: *
Attention : *
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company's and the
Purchaser's representations and warranties herein shall survive the execution
and delivery of this Agreement and the delivery of the Certificates and the
payment of the Purchase Amount, and shall inure to the benefit of the Purchaser
and the Company and their respective successors and assigns.
16
IN WITNESS WHEREOF, this Agreement has been duly executed by the Purchaser
and the Company as of the date set first above written.
AZURE TRUST COMPANY LIMITED AS
TRUSTEE OF THE 9548181 INTERNATIONAL
PENSION TRUST
By: /s/Xxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxx Xxxxxx.
Title: Director
By: /s/ Xxxx Xxxxxx
-------------------------------------------
Name: Xxxx Xxxxxx
Title: Director
TRIDENT BRANDS INCORPORATED
By: /s/ Xxxx Xxxxxxxx
-------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman
17
SCHEDULE 1A
CERTIFICATE OF U.S. INVESTOR
Not Applicable
-------------------------------
18
SCHEDULE 1B
CERTIFICATE OF NON-U.S. INVESTOR
In connection with the issuance of share purchase warrants (the "Pubco
Warrants") and/or the issuance of common shares underlying the Pubco Warrants (
the "Pubco Shares" and, collectively with the "Pubco Warrants", the "Pubco
Securities") of Trident Brands Incorporated., a company incorporated pursuant to
the laws of the State of Nevada ("Pubco"), to the undersigned, pursuant to that
certain Purchase Agreement dated December 18, 2015 (the "Agreement") between
Pubco and the undersigned, the undersigned investor hereby agrees, acknowledges,
represents and warrants that:
1. the undersigned is not a "U.S. Person" as such term is defined by Rule
902 of Regulation S under the United States Securities Act of 1933, as amended
("U.S. Securities Act") (the definition of which includes, but is not limited
to, an individual resident in the U.S. and an estate or trust of which any
executor or administrator or trust, respectively is a U.S. Person and any
partnership or corporation organized or incorporated under the laws of the
U.S.);
2. none of the Pubco Securities have been or will be registered under the
U.S. Securities Act, or under any state securities or "blue sky" laws of any
state of the United States, and may not be offered or sold in the United States
or, directly or indirectly, to U.S. Persons, as that term is defined in
Regulation S, except in accordance with the provisions of Regulation S or
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the U.S. Securities Act and in compliance with any
applicable state and foreign securities laws;
3. the undersigned understands and agrees that offers and sales of any of
the Pubco Securities prior to the expiration of a period of one year after the
date of original issuance of the Pubco Securities (the one year period
hereinafter referred to as the Distribution Compliance Period) shall only be
made in compliance with the safe harbor provisions set forth in Regulation S,
pursuant to the registration provisions of the U.S. Securities Act or an
exemption therefrom, and that all offers and sales after the Distribution
Compliance Period shall be made only in compliance with the registration
provisions of the U.S. Securities Act or an exemption therefrom and in each case
only in accordance with applicable state and foreign securities laws;
4. the undersigned understands and agrees not to engage in any hedging
transactions involving any of the Pubco Securities unless such transactions are
in compliance with the provisions of the U.S. Securities Act and in each case
only in accordance with applicable state and provincial securities laws;
5. the undersigned is acquiring the Pubco Securities for investment only
and not with a view to resale or distribution and, in particular, it has no
intention to distribute either directly or indirectly any of the Pubco
Securities in the United States or to U.S. Persons;
6. the undersigned has not acquired the Pubco Securities as a result of,
and will not itself engage in, any directed selling efforts (as defined in
Regulation S under the U.S. Securities Act) in the United States in respect of
the Pubco Securities which would include any activities undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of any of the Pubco
Securities; provided, however, that the undersigned may sell or otherwise
dispose of the Pubco Securities pursuant to registration thereof under the U.S.
Securities Act and any applicable state and provincial securities laws or under
an exemption from such registration requirements;
19
7. the statutory and regulatory basis for the exemption claimed for the
sale of the Pubco Securities, although in technical compliance with Regulation
S, would not be available if the offering is part of a plan or scheme to evade
the registration provisions of the U.S. Securities Act or any applicable state
and provincial securities laws;
8. the undersigned has not undertaken, and will have no obligation, to
register any of the Pubco Securities under the U.S. Securities Act;
9. Pubco is entitled to rely on the acknowledgements, agreements,
representations and warranties and the statements and answers of the Selling
Shareholders contained in the Agreement and those of the undersigned contained
in this Certificate, and the undersigned will hold harmless Pubco from any loss
or damage either one may suffer as a result of any such acknowledgements,
agreements, representations and/or warranties made by the Selling Shareholders
and/or the undersigned not being true and correct;
10. the undersigned has been advised to consult their own respective legal,
tax and other advisors with respect to the merits and risks of an investment in
the Pubco Securities and, with respect to applicable resale restrictions, is
solely responsible (and Pubco is not in any way responsible) for compliance with
applicable resale restrictions;
11. none of the Pubco Securities are listed on any stock exchange or
automated dealer quotation system and no representation has been made to the
undersigned that any of the Pubco Securities will become listed on any stock
exchange or automated dealer quotation system, except that currently certain
market makers make market in the common shares of Pubco on the OTC Bulletin
Board;
12. the undersigned is outside the United States when receiving and
executing this Agreement and is acquiring the Pubco Securities as principal for
their own account, for investment purposes only, and not with a view to, or for,
resale, distribution or fractionalization thereof, in whole or in part, and no
other person has a direct or indirect beneficial interest in the Pubco
Securities;
13. neither the SEC nor any other securities commission or similar
regulatory authority has reviewed or passed on the merits of the Pubco
Securities;
14. the Pubco Securities are not being acquired, directly or indirectly,
for the account or benefit of a U.S. Person or a person in the United States;
15. the undersigned acknowledges and agrees that Pubco shall refuse to
register any transfer of Pubco Securities not made in accordance with the
provisions of Regulation S, pursuant to registration under the U.S. Securities
Act, or pursuant to an available exemption from registration under the U.S.
Securities Act;
16. the undersigned understands and agrees that the Pubco Securities will
bear the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE
TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN)
PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT").
NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER
THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
20
REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE
UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH
CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN
ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. "UNITED STATES" AND
"U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT."
17. the address of the undersigned included herein is the sole address of
the undersigned as of the date of this certificate.
IN WITNESS WHEREOF, I have executed this Certificate of Non-U.S.
Shareholder.
/s/ Xxxxxx Xxxxxx Date: January 29, 2016
---------------------------------
Signature
Xxxxxx Xxxxxx
---------------------------------
Print
/s/ Xxxx Xxxxxx
---------------------------------
Signature
Xxxx Xxxxxx
---------------------------------
Print Name
21
SCHEDULE 2
SENIOR INDEBTEDNESS OF THE COMPANY
SENIOR SECURED CONVERTIBLE PROMISSORY NOTE DATED JANUARY 29, 2015.
ISSUED TO LPF (MCTECH) INVESTMENT CORP. IN THE AGGREGATE PRINCIPAL
AMOUNT OF $2,300,000.
22
ANNEX I
FORM OF NOTE
SECURED PROMISSORY NOTE
TRIDENT BRANDS INCORPORATED
Promissory Note for US$250,000
due January 20, 2016
US$250,000
Dated: January 29, 2016 (the "Issuance Date")
For value received, TRIDENT BRANDS INCORPORATED, a Nevada corporation (the
"Company"), hereby promises to pay to the order of AZURE TRUST COMPANY LIMITED
AS TRUSTEE OF THE 9548181 INTERNATIONAL PENSION TRUST (together with its
successors, representatives, and permitted assigns, the "Holder"), in accordance
with the terms hereinafter provided for the Note, up to an aggregate of TWO
HUNDRED AND FIFTY THOUSAND DOLLARS (US$250,000 (the "Principal Amount") plus
accrued and unpaid Interest (as defined in below Section 1.2) and subject to the
terms hereof. The Principal Amount and the Interest outstanding shall be due and
payable on the date that is 12 months from the Issuance Date (as defined above)
subject to the terms hereof (referred to herein as the "Maturity Date.")
All payments under or pursuant to each Note refer to and shall be made in
United States Dollars in immediately available funds to the Holder at the
address of the Holder first set forth above or at such other place as the Holder
may designate from time to time in writing to the Company.
ARTICLE I
GENERAL TERMS
Section 1.1 Purchase Agreement. This Note has been executed and delivered
pursuant to the Note Purchase Agreement dated as of January 29, 2016 (the
"Purchase Agreement") by and between the Company and the purchaser listed
therein. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for such terms in the Purchase Agreement.
Section 1.2 Interest. The Principal Amount shall bear interest from
Issuance Date at the rate of ten percent (10%) per annum, calculated daily in
arrears based on a three hundred and sixty (360) day year (the "Interest").
Section 1.3 Payment on Non-Business Days. Whenever any payment to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of New York, such payment may be due on the next succeeding Business Day.
The term "Business Day" shall mean any day except Saturday, Sunday and any day
that shall be a federal legal holiday or a day on which banking institutions in
the State of New York are authorized or required by law or other governmental
action to close.
Section 1.4 Transfer. This Note may be transferred or sold, subject to the
provisions of Section 4.8, or pledged, hypothecated or otherwise granted as
security by the Holder.
23
Section 1.5 Security. To secure the due payment of the Principal Amount and
Interest payable under the Note, the Company shall cause to be provided to the
Holder contemporaneously with the execution of this Note, the General Security
Agreement (the "Security Agreement") annexed hereto as Exhibit C granting the
Holder a security interest in all of the present and after acquired personal
property of the Company.
ARTICLE II
EVENTS OF DEFAULT; REMEDIES
Section 2.1 Events of Default. The occurrence of any of the following
events shall be an "Event of Default" under the Note:
(a) the Company shall fail to make the payment of any outstanding Principal
Amount or Interest on the date such payment is due hereunder;
(b) default shall be made in the performance or observance of (i) any
covenant, condition or agreement contained in this Note and such default is not
fully cured within five (5) Business Days after the occurrence thereof or (ii)
any covenant, condition or agreement contained in the Purchase Agreement, the
Security Agreement, or all ancillary documents referred to in those agreements
(collectively, the "Transaction Documents," which is not covered by any other
provisions of this Section 2.1 and such default is not fully cured within five
(5) Business Days after the occurrence thereof;
(c) any representation, warranty or covenant made by the Company herein or
in the Purchase Agreement or any other Transaction Document shall prove to have
been false or incorrect or breached on the date as of which made;
(d) the Company shall (i) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee, liquidator or the
like of itself or of all or a substantial part of its property or assets, (ii)
make a general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the U.S. Bankruptcy Code (as now or hereafter in effect) or
under the comparable laws of any jurisdiction (foreign or domestic), (iv) file a
petition seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors'
rights generally, (v) acquiesce in writing to any petition filed against it in
an involuntary case under U.S. Bankruptcy Code (as now or hereafter in effect)
or under the comparable laws of any jurisdiction (foreign or domestic), (vi)
issue a notice of bankruptcy or winding down of its operations or issue a press
release regarding same, or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing;
(e) a proceeding or case shall be commenced in respect of the Company,
without its application or consent, in any court of competent jurisdiction,
seeking (i) the liquidation, reorganization, moratorium, dissolution, winding
up, or composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of itself or of all or any
substantial part of its property or assets in connection with the liquidation or
dissolution of the Company or (iii) similar relief in respect of it under any
law providing for the relief of debtors, and such proceeding or case described
in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in
effect, for a period of sixty (60) days or any order for relief shall be entered
in an involuntary case under U.S. Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic)
against the Company or action under the laws of any jurisdiction (foreign or
domestic) analogous to any of the foregoing shall be taken with respect to the
Company and shall continue undismissed, or unstayed and in effect for a period
of sixty (60) days;
24
(f) the failure of the Company to pay any amounts due to the Holder (other
than outstanding Principal Amount and Interest referred to in Section 2.1(a),
the failure of which to pay when due shall be an immediate Event of Default)
herein within three (3) Business Days of receipt of notice to the Company;
(g) actions, suits, proceedings, claims or disputes pending, at law, in
equity, in arbitration or before any governmental authority, arise against the
Company, which result in equitable relief or monetary judgment(s) or liens
against the Company;
(h) the Collateral fails to perfect, or is delayed from perfection; or
(i) the Company fails to perform or comply with any term, provision or
condition of any other agreement, document or other instrument evidencing or
supporting any indebtedness owing from the Company to the Holder, whether
currently existing or incurred after the date of this Agreement.
Section 2.2 Remedies Upon An Event of Default. If an Event of Default shall
have occurred and shall be continuing, the Holder may at any time at its option:
(a) declare all or a portion of the unpaid balance of the Principal Amount and
all Interest accrued but unpaid thereon of the Note, and all other amounts owing
or payable hereunder or under any Transaction Document, due and payable, and
thereupon, the same shall be accelerated and so due and payable, without
presentment, demand, protest, or notice, all of which are hereby expressly
unconditionally and irrevocably waived by the Company; provided, however, that
upon the occurrence of an Event of Default described in (i) Section 2.1(d) or
2.1(e) (in the case of Section 2.1(e) upon the expiration of the 60-day period
mentioned therein), the outstanding Principal Amount and all Interest accrued
but unpaid in respect of this Note, and all other amounts owing or payable
hereunder or under any Transaction Document, shall be automatically due and
payable, and (ii) exercise or otherwise enforce any one or more of the Holder's
rights, powers, privileges, remedies and interests under this Note, the Purchase
Agreement, other Transaction Document or applicable law. No course of delay on
the part of the Holder shall operate as a waiver thereof or otherwise prejudice
the right of the Holder. No remedy conferred hereby shall be exclusive of any
other remedy referred to herein or now or hereafter available at law, in equity,
by statute or otherwise.
ARTICLE III
PREPAYMENT
Section 3.1 Prepayment.
(a) Prepayment at the Election of the Company. The unpaid Principal Amount
of this Note and any accrued but unpaid interest thereon may be prepaid in whole
or in part from time to time without the prior written consent of Holder.
(b) Prepayment Procedure. The Company shall give not less than ten (10)
days notice to Holder of its election to exercise its right of prepayment
pursuant to above section 3.1(a). Such notice shall stipulate the prepayment
date and amount to be prepaid (the "Prepayment Amount"). Thereafter, if the
Company shall fail to make timely delivery of the Prepayment Amount in
accordance with its notice of prepayment, the Prepayment Amount shall become
immediately due and payable without presentment, demand, protest, or notice.
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ARTICLE IV
MISCELLANEOUS
Section 4.1 Notices.
(a) Any notice, demand, request, waiver or other communication required or
permitted to be given hereunder shall be in writing and shall be effective (a)
upon hand delivery by telex (with correct answer back received), telecopy or
facsimile at the address or number designated in the Purchase Agreement (if
delivered on a Business Day during normal business hours where such notice is to
be received), or the first Business Day following such delivery (if delivered
other than on a Business Day during normal business hours where such notice is
to be received) or (b) on the second Business Day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.
Section 4.2 Governing Law. The Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. The Note shall not
be interpreted or construed with any presumption against the party causing the
Note to be drafted.
Section 4.3 Headings. Article and section headings in the Note are included
herein for purposes of convenience of reference only and shall not constitute a
part of this Note for any other purpose.
Section 4.4 Remedies, Characterizations, Other Obligations, Breaches and
Injunctive Relief. The remedies provided in the Note shall be cumulative and in
addition to all other remedies available under the Note, at law or in equity
(including, without limitation, a decree of specific performance and/or other
injunctive relief), no remedy contained herein shall be deemed a waiver of
compliance with the provisions giving rise to such remedy and nothing herein
shall limit the Holder's right to pursue actual damages for any failure by the
Company to comply with the terms of the Note. Amounts set forth or provided for
herein with respect to payments, conversion and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except
as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable and material harm to the Holder
and that the remedy at law for any such breach may be inadequate. Therefore the
Company agrees that, in the event of any such breach or threatened breach, the
Holder shall be entitled, in addition to all other available rights and
remedies, at law or in equity, to seek and obtain such equitable relief,
including but not limited to an injunction restraining any such breach or
threatened breach, without the necessity of showing economic loss and without
any bond or other security being required.
Section 4.5 Enforcement Expenses. The Company agrees to pay all costs and
expenses of enforcement of the Note, including, without limitation, reasonable
attorneys' fees and expenses.
Section 4.6 Binding Effect. The obligations of the Company and the Holder
set forth herein shall be binding upon the successors and assigns of each such
party, whether or not such successors or assigns are permitted by the terms
hereof.
Section 4.7 Amendments. The Note may not be modified or amended in any
manner except in writing executed by the Company and the Holder.
26
Section 4.8 Consent to Jurisdiction. Each of the Company and the Holder (i)
hereby irrevocably submits to the non-exclusive jurisdiction of the State of New
York for the purposes of any suit, action or proceeding arising out of or
relating to this Note and (ii) hereby waives, and agrees not to assert in any
such suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of such court, that the suit, action or proceeding is brought
in an inconvenient forum or that the venue of the suit, action or proceeding is
improper. Each of the Company and the Holder consents to process being served in
any such suit, action or proceeding by mailing a copy thereof to such party at
the address in effect for notices to it under the Purchase Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing in this Section 4.8 shall affect or limit any right to
serve process in any other manner permitted by law. Each of the Company and the
Holder hereby agree that the prevailing party in any suit, action or proceeding
arising out of or relating to this Note shall be entitled to reimbursement for
reasonable legal fees from the non-prevailing party.
Section 4.9 Parties in Interest. The Note shall be binding upon, inure to
the benefit of and be enforceable by the Company, the Holder and their
respective successors and permitted assigns.
Section 4.10 Failure or Indulgence Not Waiver. No failure or delay on the
part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege.
Section 4.11 Company Waivers. Except as otherwise specifically provided
herein, the Company and all others that may become liable for all or any part of
the obligations evidenced by this Note, hereby waive presentment, demand, notice
of nonpayment, protest and all other demands' and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, and do hereby
consent to any number of renewals of extensions of the time or payment hereof
and agree that any such renewals or extensions may be made without notice to any
such persons and without affecting their liability herein and do further consent
to the release of any person liable hereon, all without affecting the liability
of the other persons, firms or the Company liable for the payment of this Note,
AND DO HEREBY WAIVE TRIAL BY JURY.
TRIDENT BRANDS INCORPORATED
By: /s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman
27
ANNEX II
EXHIBIT A TO SECURED PROMISSORY NOTE
GENERAL SECURITY AGREEMENT
THIS GENERAL SECURITY AGREEMENT made as of the 29th day of January, 2016
(this "AGREEMENT")
BETWEEN:
TRIDENT BRANDS INCORPORATED
(the "GUARANTOR")
AND:
AZURE TRUST COMPANY LIMITED AS TRUSTEE OF THE 9548181 INTERNATIONAL
PENSION TRUST
(the "SECURED PARTY")
WHEREAS:
A. As evidenced by a Secured Promissory Note dated for reference January 29,
2016, as the same may be amended, supplemented, extended, renewed,
restated, replaced or superseded from time to time (collectively, the
"NOTES" and each, a "NOTE") between the Guarantor, as borrower, and the
Secured Party, as lender, the Guarantor has obtained loans in the aggregate
principal amounts of US$250,000;
B. As a material inducement to the Secured Party to purchase the Note, the
Guarantor has agreed to provide a security agreement securing the loans
documented by the Note. FOR VALUE RECEIVED, the Guarantor covenants,
agrees, warrants, represents, acknowledges, and confirms to and with the
Secured Party and creates and grants the mortgages, pledges, charges,
transfers, assignments, and security interests as follows:
1. SECURITY INTEREST.
1.1 As security for the payment and performance of the Obligations (as defined
in Section 3), the Guarantor, subject to the exceptions set out in Section 2,
does grant to the Secured Party a lien on, and a security interest in, and
mortgages, pledges, charges, transfers and assigns absolutely, all of the
Guarantor's present and after acquired personal property, and all personal
property in which the Guarantor has rights, of whatever nature or kind and
wherever situated, including, without limitations, all of the following now
owned or in future owned or acquired by or on behalf of the Guarantor:
(a) all goods, including:
(i) all inventory of whatever kind and wherever situate, including,
without limitation, goods acquired or held for sale or lease or
furnished or to be furnished under contracts of rental or
service, all raw materials, work in progress, finished goods,
returned goods, repossessed goods and all packaging materials,
28
supplies, and containers relating to or used or consumed in
connection with any of the foregoing (collectively, the
"Inventory");
(ii) all equipment of whatever kind and wherever situated, including,
without limitation, all machinery, tools, apparatus, plant,
fixtures, furniture, furnishings, chattels, motor vehicles,
vessels, and other tangible personal property of whatever nature
or kind (collectively, the "EQUIPMENT");
(b) all book accounts and book debts and generally all accounts, debts,
dues, claims, choses in action, and demands of every nature and kind
however arising or secured including letters of credit and advices of
credit, which are now due, owing, or accruing, or growing due to, or
owned by, or which may in future become due, owing, or accruing, or
growing due to, or owned by the Guarantor (the "ACCOUNTS");
(c) all contractual rights, insurance, claims, licenses, goodwill,
patents, trademarks, trade names, copyrights, and other industrial or
intellectual property of the Guarantor or in which the Guarantor has
an interest, all other choses in action of the Guarantor of every kind
which now are, or which may in future be, due or owing to or owned by
the Guarantor, and all other intangible property of the Guarantor
which is not Accounts, Chattel Paper, Instruments, Documents of Title,
securities, or Money;
(d) all Money;
(e) all property described in Schedule "A" to this Agreement, or in any
schedule now or at any time in future annexed to this Agreement or
agreed to form part of this Agreement;
(f) the undertaking of the Guarantor;
(g) all Chattel Paper, Documents of Title (whether negotiable or not),
Instruments, intangibles, and securities now owned or in future owned
or acquired by or on behalf of the Guarantor (including those returned
to or repossessed by the Guarantor) and all other goods of the
Guarantor that are not Equipment, Inventory, or Accounts;
(h) all deeds, documents, writings, papers, books of account, and other
books and electronically recorded data relating to any of the
foregoing or by which any of the foregoing is or may in future be
secured, evidenced, acknowledged, or made payable; and
(i) all renewals, accretions and substitutions of any of the
foregoing and all after acquired personal property and fixtures
and farm products in any form derived directly or indirectly from
any dealing with the Collateral (as defined in Section 1.2) or
the Proceeds, including rights to insurance payments and any
other payments representing indemnity or compensation for loss or
damage to the Collateral or the Proceeds.
1.2 The security interests created or granted under Section 1.1 of this
Agreement are collectively called the "SECURITY INTEREST", and all property,
assets, interests, and undertakings (including Proceeds) subject to the Security
Interest or otherwise charged or secured by this Agreement or expressed to be
charged, assigned or transferred, or secured by any Instruments supplemental to
this Agreement or in implementation of this Agreement are collectively called
the "COLLATERAL".
1.3 The Secured Party acknowledges and agrees that the Security Interest granted
hereunder shall be subordinate to the general security interest (whether
registered or unregistered) in the Collateral granted by the Guarantor in
29
respect of the Senior Secured Convertible Promissory Note of the Guarantor dated
January 29, 2015 issued to LPF (MCTECH) Investment Corp. in the aggregate
principal amount of $2,300,000, plus applicable interest accrued thereon (the
"SENIOR SECURITY INTEREST"). The Secured Party agrees to take such action as may
be reasonably required by the Guarantor to subordinate the registration of
Security Interest granted hereunder until such time as the Senior Security
Interest has been released.
2. EXCEPTIONS AND DEFINITIONS.
2.1 Any reference in this Agreement to the "UNIFORM COMMERCIAL CODE" or "UCC"
means the Uniform Commercial Code, as adopted and enacted and as in effect from
time to time in the State of Nevada. Terms used herein which are defined in the
UCC and not otherwise defined herein shall have the respective meanings ascribed
to such terms in the UCC.
2.2 The Security Interest granted by this Agreement shall not extend or apply to
and the Collateral shall not extend to the last day of the term of any lease or
agreement to lease real property, but upon the enforcement of the Security
Interest the Guarantor shall stand possessed of such last day in trust to assign
and dispose thereof as the Secured Party shall direct.
2.3 The Security Interest shall not render the Secured Party liable to observe
or perform any term or covenant or condition of any agreement, document or
Instrument to which the Guarantor is a party or by which it is bound. In
addition, the Security Interests do not and shall not extend to, and the
Collateral shall not include, any agreement, right, franchise, licence or permit
(the "CONTRACTUAL RIGHTS") to which the Guarantor is a party or of which the
Guarantor has the benefit, to the extent that the creation of the Security
Interests herein would constitute a breach of the terms of or permit any person
to terminate the Contractual Rights, but the Guarantor shall hold its interest
therein in trust for the Secured Party and shall assign such Contractual Rights
to the Secured Party forthwith upon obtaining the consent of all other parties
thereto. The Guarantor agrees that it shall, if required by the Secured Party,
use commercially reasonable efforts to obtain any consent required to permit any
Contractual Rights to be subject to the Security Interests herein.
2.4 All Consumer Goods are excepted from the Security Interest.
2.5 Any reference in this Agreement to "Collateral" shall, unless the context
otherwise requires, be deemed a reference to "Collateral or any part thereof".
The Collateral shall not include Consumer Goods of the Guarantor.
2.6 The term "PROCEEDS", whenever used and interpreted as above, shall by way of
example include trade-ins, Equipment, cash, bank accounts, notes, Chattel Paper,
goods, contract rights, Accounts, and any other personal property or obligation
received when such Collateral or Proceeds are sold, exchanged, collected, or
otherwise disposed of.
3. OBLIGATIONS SECURED.
This Agreement and the Security Interest are in addition to and not in
substitution for any other security interest now or in future held by the
Secured Party from the Guarantor, or from any other person and shall be general
and continuing security for the payment of all indebtedness and liability of the
Guarantor to the Secured Party (including interest thereon), present or future,
absolute or contingent, joint or several, direct or indirect, matured or not,
extended or renewed, wherever and however incurred, and any ultimate balance
thereof, including all advances on current or running account and all future
advances and re-advances, and whether the same is from time to time reduced and
thereafter increased or entirely extinguished and thereafter incurred again, and
whether the Guarantor be bound alone or with another or others, and whether as
30
principal or surety, and for the performance and satisfaction of all obligations
of the Guarantor to the Secured Party, whether or not contained in this
Agreement or the Notes (all of which indebtedness, liability, and obligations
are collectively the "OBLIGATIONS").
4. COVENANTS OF GUARANTOR.
THE GUARANTOR COVENANTS AND AGREES WITH THE SECURED PARTY:
(a) not to change its name, its principal place of business, its chief
executive office or the location of any of the Collateral without
giving 15 days' prior written notice thereof to the Secured Party;
(b) not to sell, exchange, transfer, assign, lease or otherwise dispose of
or deal in any way with the Collateral or release, surrender or abandon
possession of the Collateral or move or transfer the Collateral, or
enter into any agreement or undertaking to do any of the foregoing;
(c) not to create or permit to exist any encumbrance against any of the
Collateral, except the Security Interests created by this Agreement and
other permitted encumbrances, as set forth in Schedule "B" (the
"Permitted Encumbrances");
(d) to defend the title to the Collateral for the benefit of the Secured
Party against all claims and demands;
(e) that the Guarantor shall maintain the Security Interest created by this
Agreement as a perfected security having at least the priority
described in Section 12 and shall defend such Security Interest and
such priority against the claims and demands of all persons;
(f) to promptly pay when due all taxes, assessments, rates, levies, payroll
deductions, workers' compensation assessments, and any other charges
which could result in the creation of a statutory lien or deemed trust
in respect of the Collateral;
(g) to do, make, execute and deliver such further and other assignments,
transfers, deeds, security agreements and other documents as may be
required by the Secured Party to establish in favor of the Secured
Party and perfect the Security Interest intended to be created hereby
and to accomplish the intention of this Agreement and, if requested by
the Secured Party, to specifically assign to the Secured Party, the
Guarantor's rights and interests (but not the Guarantor's obligations)
under any contracts to which the Guarantor is a party, which include
the Guarantor instructing the transfer agent of the Guarantor:
(i) to comply with the Secured Party's orders without the Guarantor's
further consent; or
(ii) that the Secured Party has the same rights to the Security
Interests as the Guarantor;
(h) to pay all expenses, including reasonable solicitors' fees and
disbursements, receivers' fees and disbursements, and accounting fees
and disbursements incurred by or on behalf of the Secured Party, its
secured parties, or any Receiver, as hereinafter defined, in connection
with inspecting the Collateral, investigating title to the Collateral,
the preparation, perfection, preservation, and enforcement of this
Agreement, including taking, recovering and keeping possession of the
Collateral and all expenses incurred by or on behalf of the Secured
Party, its agents or any Receiver (as defined in Section 11.1(a)) in
dealing with other creditors of the Guarantor in connection with the
establishment and confirmation of the priority of the Security
31
Interests, all of which expenses shall be payable forthwith upon demand
with interest at the rate specified in the Notes and shall form part of
the Obligations; and
(i) to observe and perform all of its obligations under or in connection
with any other security agreement creating a security interest over the
Collateral or any part thereof.
5. ATTACHMENT.
The Guarantor acknowledges and confirms that:
(a) there is no intention to delay the time of attachment of the Security
Interest created by this Agreement, and the Security Interest shall
attach at the earliest time permissible under the laws governing this
Agreement;
(b) that value has been given; and
(c) that the Guarantor has (or in the case of any after acquired property,
will have at the time of acquisition) rights in the Collateral.
6. USE AND VERIFICATION OF COLLATERAL.
The Guarantor may, until default, possess, operate, collect, use and enjoy,
and deal with the Collateral in the ordinary course of the Guarantor's business
in any manner not inconsistent with the provisions of this Agreement; provided
always that the Secured Party shall have the right at any time and from time to
time to verify the existence and state of the Collateral in any manner the
Secured Party may consider appropriate. The Guarantor agrees to furnish all
assistance and information and to perform all such acts as the Secured Party may
reasonably request in connection therewith, and for such purposes to grant to
the Secured Party or its agents access to all places where the Collateral may be
located and to all premises occupied by the Guarantor.
7. INCOME FROM AND INTEREST ON COLLATERAL.
7.1 Until the occurrence of an Event of Default (as defined in Section
10.1), the Guarantor reserves the right to receive any money constituting income
from or interest on the Collateral and if the Secured Party receives any such
money before the occurrence of an Event of Default, the Secured Party shall
either credit the amount of such money against the Obligations or pay the amount
of such money promptly to the Guarantor.
7.2 Upon the occurrence of an Event of Default, the Guarantor shall not
request or receive any money constituting income from or interest on the
Collateral and if the Guarantor receives any such money in any event, the
Guarantor shall hold that money in trust for the Secured Party and shall pay the
amount of that money promptly to the Secured Party.
8. DISPOSITION OF MONIES.
Subject to any applicable requirements of the UCC, all monies collected or
received by the Secured Party under or in exercise of any right it possesses
with respect to Collateral shall be applied on account of the Obligations in
such manner as the Secured Party deems best or, at the option of the Secured
Party, may be held unappropriated in a collateral account or released to the
32
Guarantor, all without prejudice to the liability of the Guarantor or the rights
of the Secured Party under this Agreement, and any surplus shall be accounted
for as required by law.
9. PERFORMANCE OF OBLIGATIONS.
If the Guarantor fails to perform any of its obligations under this
Agreement, the Secured Party may, but shall not be obliged to, perform any or
all of those obligations without prejudice to any other rights and remedies of
the Secured Party under this Agreement.
10. DEFAULT.
10.1 Unless waived by the Secured Party (whether in whole or in part), it
shall be an event of default (an "EVENT OF DEFAULT") under this Agreement and
the security constituted by this Agreement shall become enforceable if:
(a) an "Event of Default" (as that term is defined in the Notes, only for
purposes of this clause (a)) occurs under the Notes;
(b) any term, covenant, representation or warranty set out in this
Agreement is breached or if an Event of Default occurs under this
Agreement;
(c) any amount owed to the Secured Party is not paid when due; or
(d) the Guarantor declares itself to be insolvent, makes an assignment for
the benefit of its creditors, is declared bankrupt, declares
bankruptcy, makes a proposal, or otherwise takes advantage of
provisions under the U.S. Bankruptcy Code or similar legislation in
any jurisdiction, or fails to pay its debts generally as they become
due; or
(e) a receiver or receiver-manager is appointed.
11. ENFORCEMENT.
11.1 Upon the occurrence and during the continuance of an Event of Default
under this Agreement, the Obligations shall, at the option of the Secured Party,
be immediately due and payable and the Security Interests granted hereby shall,
at the option of the Secured Party, become immediately enforceable. To enforce
and realize on the security constituted by this Agreement, the Secured Party may
take any action permitted by law or in equity, as it may deem expedient, and in
particular, but without limiting the generality of the foregoing, the Secured
Party may do any of the following:
(a) appoint by instrument a receiver, receiver and manager, or
receiver-manager (the person so appointed is called the "RECEIVER") of
the Collateral, with or without bond as the Secured Party may
determine, and from time to time in its absolute discretion remove
such Receiver and appoint another in its stead;
(b) enter upon any premises of the Guarantor and take possession of the
Collateral with power to exclude the Guarantor, its agents, and its
servants from those premises, without becoming liable as a mortgagee
in possession;
(c) preserve, protect, and maintain the Collateral and make such
replacements and repairs and additions as the Secured Party may deem
advisable;
33
(d) sell, lease, or otherwise dispose of all or any part of the
Collateral, whether by public or private sale or lease or otherwise,
in such manner, at such price as can be reasonable obtained, and on
such terms as to credit and with such conditions of sale and
stipulations as to title or conveyance or evidence of title or
otherwise as the Secured Party may deem reasonable, provided that if
any sale, lease or other disposition is on credit, the Guarantor shall
not be entitled to be credited with the proceeds of any such sale,
lease or other disposition until the monies therefor are actually
received;
(j) exercise any of the powers set out in this Section 11.1, without the
appointment of a Receiver;
(k) institute proceedings in any court of competent jurisdiction for the
appointment of a Receiver or for the sale of the Collateral;
(l) file proofs of claim and other documents in order to have the claims
of the Secured Party lodged in any bankruptcy, winding-up, or other
judicial proceeding relating to each Guarantor; and
(m) exercise all of the rights and remedies accorded to a "secured party"
under the UCC.
11.2 Any Receiver appointed by the Secured Party may be any person licensed
as a trustee under applicable law, and the Secured Party may remove any Receiver
so appointed and appoint another or others instead. Any Receiver appointed shall
act as the Secured Party for the Guarantor for all purposes, including the
occupation of any premises of the Guarantor and in carrying on the Guarantor's
business and the Secured Party shall not be liable for any act or omission of
any Receiver. The Guarantor agrees to ratify and confirm all actions of the
Receiver and to release and indemnify the Receiver and the Secured Party in
respect of all such actions. Any Receiver so appointed shall have the power:
(a) to enter upon, use, and occupy all premises owned or occupied by the
Guarantor;
(b) to take possession of the Collateral;
(c) to carry on the business of the Guarantor;
(d) to borrow money required for the maintenance, preservation or
protection of the Collateral or for the carrying on of the business of
the Guarantor, and in the discretion of such Receiver, to charge and
grant further security interests in the Collateral in priority to the
Security Interests, as security for the money so borrowed;
(e) to sell, lease, or otherwise dispose of the Collateral in whole or in
part and for cash or credit, or part cash and part credit on such
terms and conditions and in such manner as the Receiver shall
determine in its discretion;
(f) to demand, commence, continue or defend any judicial or administrative
proceedings for the purpose of protecting, seizing, collecting,
realizing or obtaining possession or payment of the Collateral, and to
give valid and effectual receipts and discharges therefor and to
compromise or give time for the payment or performance of all or any
part of the Accounts or any other obligation of any third party to the
Guarantor; and
(g) to exercise any rights or remedies which could have been exercised by
the Secured Party against the Guarantor or the Collateral.
34
11.3 Subject to the claims, if any, of the creditors of the Guarantor
ranking in priority to this Agreement, all amounts realized from the disposition
of Collateral under this Agreement shall be applied as the Secured Party, in its
absolute discretion, may direct. Subject to applicable law and the claims, if
any, of other creditors of the Guarantor, any surplus shall be paid to the
Guarantor.
11.4 The Guarantor agrees that the Secured Party may exercise its rights
and remedies under this Agreement immediately upon default, except as may be
otherwise provided in the UCC, and the Guarantor expressly confirms that, except
as may be otherwise provided in this Agreement or in the UCC, the Secured Party
has not given any covenant, express or implied, and is under no obligation to
allow the Guarantor any period of time to remedy any Event of Default before the
Secured Party exercises its rights and remedies under this Agreement.
11.5 The Guarantor hereby irrevocably constitutes and appoints any officer,
for the time being, of the Secured Party to be, upon the occurrence and during
the continuance of an Event of Default, the true and lawful attorney of the
Guarantor, with full power of substitution, to do, make and execute all such
statements, assignments, documents, acts, matters of things with the right to
use the name of the Guarantor whenever and wherever the officer may deem
necessary or expedient and from time to time to exercise all rights and powers
and to perform all acts of ownership in respect to the Collateral in accordance
with this Agreement.
11.6 The Secured Party shall not be liable for any delay or failure to
enforce any remedies available to it or to institute any proceedings for such
purposes. The Secured Party may waive any Event of Default, provided that no
such waiver shall be binding upon the Secured Party unless in writing nor shall
it affect the rights or remedies of the Secured Party in connection with any
other or subsequent Event of Default.
12. REPRESENTATIONS OF GUARANTOR.
12.1 The Guarantor represents and warrants that:
(a) this Agreement is granted in accordance with resolutions of the
directors (and of the shareholders as applicable) of the Guarantor,
and all other matters and things have been done and performed so as to
authorize and make the execution and delivery of this Agreement and
the performance of the obligations of the Guarantor hereunder legal,
valid and binding;
(b) it lawfully owns and possesses all presently held Collateral and has
good title thereto, free from all security interests, charges,
encumbrances, liens and claims, save only the Permitted Encumbrances
and has good right and lawful authority to grant the Security
Interests hereunder, free and clear of all security interests,
charges, encumbrances, liens and claims, other than the Permitted
Encumbrances; and
(c) the locations specified in the attached Schedule "C" with respect to
goods constituting the Collateral and of the business operations and
records of the Guarantor are accurate and complete; and
(d) the Security Interest granted pursuant to this Agreement constitutes a
valid and continuing perfected Security Interest in favor of the
Secured Party in the Collateral, subject (for the following
Collateral) to the occurrence of the following: (i) in the case of the
Collateral in which a Security Interest may be perfected by filing a
financing statement under the UCC, the completion of the filings and
other actions specified in this Agreement (which, in the case of all
filings and other documents referred to in this Agreement, have been
delivered to the Secured Party in completed and duly authorized form),
(ii) with respect to any Deposit Account, the execution of a control
account, (iii) in the case of all copyrights, trademarks and patents
for which UCC filings are insufficient, all appropriate filings having
35
been made with the U.S. Copyright Office or the U.S. Patent and
Trademark Office, as applicable, (iv) in the case of letter-of-credit
rights that are not supporting obligations of the Collateral, the
execution of a contractual obligation granting control to the Secured
Party over such letter-of-credit rights, (v) in the case of Electronic
Chattel Paper, the completion of all steps necessary to grant control
to the Secured Party over such Electronic Chattel Paper, and (vi) in
the case of vehicles, the actions required pursuant to the UCC. The
Security Interest shall be prior to all other liens on the Collateral,
except: (i) for the Senior Security Interest; and (ii) for permitted
liens having priority over the Secured Party's lien by operation of
law upon (x) in the case of all pledged certificated stock, pledged
debt Instruments and pledged investment priority the delivery thereof
to the Secured Party of such consisting of Instruments and
certificates, in each case properly endorsed for transfer to the
Secured Party or in blank, (y) in the case of all pledged investment
property not in certificated form, the execution of control agreements
with respect to such investment property, and (z) in the case of all
other Instruments and Tangible Chattel Paper that are not pledged
certificated stock, pledged debt Instruments or pledged investment
property, the delivery thereof to the Secured Party of such
Instruments and Tangible Chattel Paper. Except as set forth in this
Section, all actions by the Guarantor necessary or desirable to
protect and perfect the lien granted hereunder on the Collateral have
been duly taken.
13. DEFICIENCY.
If the amounts realized from the disposition of the Collateral are not
sufficient to pay the Obligations in full, the Guarantor shall pay to the
Secured Party the amount of such deficiency immediately upon demand for the
same.
14. RIGHTS CUMULATIVE.
All rights and remedies of the Secured Party set out in this Agreement are
cumulative, and no right or remedy contained in this Agreement is intended to be
exclusive, but each right and remedy shall be in addition to every other right
or remedy contained in this Agreement or in any existing or future security
agreement or now or in future existing at law, in equity or by statute, or under
any other agreement between the Guarantor and the Secured Party that may be in
effect from time to time.
15. LIABILITY OF SECURED PARTY.
The Secured Party shall not be responsible or liable for any debts
contracted by it, for damages to persons or property or for salaries or
non-fulfilment of contracts during any period when the Secured Party shall
manage the Collateral upon entry, as provided in this Agreement, nor shall the
Secured Party be liable to account as mortgagee in possession or for anything
except actual receipts or be liable for any loss on realization or for any
default or omission for which a mortgagee in possession may be liable. The
Secured Party shall not be bound to do, observe or perform or to see to the
observance or performance by the Guarantor of any obligations or covenants
imposed upon the Guarantor, nor shall the Secured Party, in the case of
Securities, Instruments, or Chattel Paper, be obliged to preserve rights against
other persons, nor shall the Secured Party be obliged to keep any of the
Collateral identifiable. The Guarantor waives any applicable provision of law
permitted to be waived by it which imposes higher or greater obligations upon
the Secured Party than as contained in this Section.
16. ACCOUNTS.
Notwithstanding any other provision of this Agreement, the Secured Party
may collect, realize, sell, or otherwise deal with the Accounts or any part of
them in such manner, upon such terms and conditions, and at such time or times,
whether before or after an Event of Default, as may seem to it advisable, and
without notice to the Guarantor, except in the case of disposition after an
Event of Default and then subject to the provisions of Part 6 of Article 9 of
36
the UCC. All monies or other forms of payment received by the Guarantor in
payment of any Account shall be received and held by the Guarantor in trust for
the Secured Party.
17. APPROPRIATION OF PAYMENTS.
Any and all payments made in respect of the Obligations from time to time
and monies realized from the Security Interest held therefor (including monies
collected in accordance with or realized on any enforcement of this Agreement)
may be applied to such part or parts of the Obligations as the Secured Party may
see fit, and the Secured Party may at all times and from time to time change any
appropriation as the Secured Party may see fit.
18. WAIVER.
The Secured Party may from time to time and at any time waive in whole or
in part any right, benefit or default under any Section of this Agreement, but
any such waiver of any right, benefit, or default on any occasion shall be
deemed not to be a waiver of any such right, benefit, or default thereafter, or
of any other right, benefit or default, as the case may be, and no delay or
omission by the Secured Party in exercising any right or remedy under this
Agreement or with respect to any default shall operate as a waiver thereof or of
any other right or remedy.
19. NOTICE.
Any notice, demand, or other communication required or permitted to be
given under this Agreement shall be effectually made or given if delivered by
prepaid private courier or by facsimile transmission to the address of each
party set out below:
To the Guarantor: Trident Brands Incorporated
000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
X.X.X.
Tel: 000-000-0000
Fax: 000-000-0000
Attention: Xxxxxxx Xxxxxx
To the Secured Party: ______________________________
______________________________
______________________________
Tel: _________________________
Fax: _________________________
Attention: ___________________
or to such other address or facsimile number as either party may designate in
the manner set out above. Any notice, demand, or other communication shall be
deemed to have been given and received on the day of prepaid private courier
delivery or facsimile transmission.
37
20. EXTENSIONS.
The Secured Party may grant extensions of time and other indulgences, take
and give up security, accept compositions, compound, compromise, settle, grant
releases and discharges, refrain from perfecting or maintaining perfection of
the Security Interest, and otherwise deal with the Guarantor, account debtors of
the Guarantor, sureties, and others and with the Collateral, the Security
Interest, and other security interests as the Secured Party sees fit without
prejudice to the liability of the Guarantor or the Secured Party's right to hold
and realize on the security constituted by this Agreement.
21. NO MERGER.
This Agreement shall not operate to create any merger or discharge of any
of the Obligations, or of any assignment, transfer, guarantee, lien, mortgage,
contract, promissory note, xxxx of exchange, or security interest of any form
held or which may in future be held by the Secured Party from the Guarantor or
from any other person. The taking of a judgment with respect to any of the
Obligations shall not operate as a merger of any of the covenants contained in
this Agreement.
22. SATISFACTION AND DISCHARGE.
Any partial payment or satisfaction of the Obligations, or any ceasing by
the Guarantor to be indebted to the Secured Party, shall be deemed not to be a
redemption or discharge of this Agreement. The Guarantor shall be entitled to a
release and discharge of this Agreement upon full payment and satisfaction of
all Obligations and upon written request by the Guarantor and payment to the
Secured Party of all costs, charges, expenses, and legal fees and disbursements
(on a solicitor and own client basis) incurred by the Secured Party in
connection with the Obligations and such release and discharge.
23. INUREMENT.
This Agreement shall inure to the benefit of and be binding upon the
parties and their respective heirs, executors, personal representatives,
successors, and permitted assigns.
24. INTERPRETATION.
24.1 In this Agreement the word "including", when following any word or
words, is not to be construed as limiting the preceding word or words, but the
preceding word or words are to be construed as referring to all items or matters
that could fall within the broadest possible interpretation of the preceding
word or words.
24.2 Words and expressions used in this Agreement that have been defined in
the UCC shall be interpreted in accordance with their respective meanings given
in the UCC, whether expressed in this Agreement with or without initial capital
letters and whether in the singular or the plural, unless otherwise defined in
this Agreement or unless the context otherwise requires, and, wherever the
context so requires, in this Agreement the singular shall be read as if the
plural were expressed, and vice-versa, and the provisions of this Agreement
shall be read with all grammatical changes necessary dependent upon the person
referred to being a male, female, firm, or corporation.
24.3 Should any provision of this Agreement be declared or held invalid or
unenforceable in whole or in part or against or with respect to the Guarantor by
a court of competent jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of any or all of the remaining provisions
of this Agreement, which shall continue in full force and effect and be
construed as this Agreement had been executed without the invalid or
unenforceable provision.
24.4 The headings of the Sections of this Agreement have been inserted for
reference only and do not define, limit, alter, or enlarge the meaning of any
provision of this Agreement.
38
24.5 This Agreement shall be governed by the laws of the State of New York
and the federal laws of the United States applicable therein.
25. MISCELLANEOUS.
25.1 The Guarantor authorizes the Secured Party to file such financing
statements, financing change statements, and other documents, and do such acts,
matters, and things as the Secured Party may deem appropriate, to perfect on an
ongoing basis and continue the Security Interest, to protect and preserve the
Collateral, and to realize upon the Security Interest.
25.2 The Guarantor waives protest of any Instrument constituting Collateral
at any time held by the Secured Party on which the Guarantor is any way liable
and, subject to the provisions of the UCC, notice of any other action taken by
the Secured Party.
25.3 The Guarantor covenants that it shall not amalgamate with any other
company or entity without first obtaining the written consent of the Secured
Party. The Guarantor acknowledges and agrees that if it amalgamates with any
other company or companies, then it is the intention of the parties that the
term "Guarantor" when used in this Agreement shall apply to each of the
amalgamating companies and to the amalgamated company, so that the Security
Interest granted by this Agreement:
(a) shall extend to the "Collateral" (as that term is defined in this
Agreement) owned by each of the amalgamating companies and the
amalgamated company at the time of amalgamation and to any
"Collateral" owned or acquired by the amalgamated company thereafter,
and
(b) shall secure the "Obligations" (as that term is defined in this
Agreement) of each of the amalgamating companies and the amalgamated
company to the Secured Party at the time of amalgamation and any
"Obligations" of the amalgamated company to the Secured Party arising
thereafter. The Security Interest shall attach to "Collateral" owned
by each company amalgamating with the Guarantor, and by the
amalgamated company, at the time of amalgamation, and shall attach to
any "Collateral" thereafter owned or acquired by the amalgamated
company when that Collateral becomes owned or is acquired.
25.4 The Guarantor authorizes the Secured Party to provide a copy of this
Agreement and such other information and documents specified under the UCC to
any person entitled under the UCC to demand and receive them.
26. COPY OF AGREEMENT AND FINANCING STATEMENT.
The Guarantor:
(a) acknowledges receiving a copy of this Agreement, and
(b) waives all rights to receive from the Secured Party a copy of any
financing statement, financing change statement, or verification
statement filed, issued, or obtained at any time in respect of this
Agreement.
[SIGNATURE PAGE FOLLOWS]
39
IN WITNESS WHEREOF the Guarantor has executed this Agreement on the date
indicated above.
TRIDENT BRANDS INCORPORATED, by its
authorized signatory:
By: /s/ Xxxx Xxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman
AZURE TRUST COMPANY LIMITED AS TRUSTEE OF THE
9548181 INTERNATIONAL PENSION TRUST ., by its
authorized signatory:
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxx
Title: Director
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Director
40
SCHEDULE "A"
DESCRIPTION OF COLLATERAL
41
SCHEDULE "B"
PERMITTED ENCUMBRANCES
"PERMITTED ENCUMBRANCES" means any of the following:
a) liens for taxes, assessments or governmental charges or levies not at
the time due and delinquent or the validity of which the Guarantor is
contesting in good faith and in respect of which such Guarantor has
set aside, on its books, reserves considered by the Guarantor and the
Secured Party as adequate therefor;
b) undetermined or inchoate liens and charges incidental to current
operations which have not been filed against the Guarantor or which
relate to obligations not due or delinquent;
c) the right reserved to or vested in any governmental or public
authority by any lease, license, franchise, grant, permit or statutory
provision to terminate any lease, license, franchise, grant or permit,
or to require annual or other period payments as a condition of the
continuance thereof;
d) the encumbrance resulting from the deposit of cash or obligations as
security when a Guarantor is required to do so by governmental or
other public authority or by normal business practice in connection
with contracts, licenses or tenders or similar matters in the ordinary
course of business and the purpose of carrying on the same or to
secure workers' compensation, surety or appeal bonds or to secure
costs of litigation when required by law; and
e) security given to any public utility or any governmental or other
public authority when required in connection with the operations of a
Guarantor.
f) senior general security interest granted in respect of the Senior
Secured Convertible Promissory Note of the Guarantor dated January 29,
2015. Issued to LPF (MCTECH) Investment Corp. in the aggregate
principal amount of $2,300,000, plus applicable interest accrued
thereon.
42
SCHEDULE "C"
LOCATION OF COLLATERAL
LOCATION OF GUARANTOR'S BUSINESS OPERATION
REGISTERED AGENT'S OFFICE:
00 X. Xxxxxx Xxxxxx, Xxxxx 0. Xxxxxx Xxxx, XX 00000
OPERATIONS OFFICE:
000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
OTHER LOCATION: N/A
LOCATIONS OF RECORDS RELATING TO COLLATERAL
OPERATIONS OFFICE:
000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
OTHER LOCATION: N/A
LOCATIONS OF COLLATERAL
OPERATIONS OFFICE:
000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
OTHER LOCATION: N/A
See Attached
43
ANNEX III
FORM OF WARRANT
EITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
ISSUER. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
TRIDENT BRANDS INCORPORATED
Warrant Shares: 125,000 Initial Exercise Date: January 29, 2016
THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that, for value
received, _______________________________________, or its assigns (the "Holder")
is entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the
"Initial Exercise Date") and on or prior to the close of business on the last
business day in the State of New York (a "BUSINESS DAY") immediately preceding
the three (3) year anniversary of the Initial Exercise Date (the "Termination
Date") but not thereafter, to subscribe for and purchase from TRIDENT BRANDS
INCORPORATED a Nevada corporation (the "Issuer"), up to the amount of shares
stated above (as subject to adjustment hereunder, the "Warrant Shares") of the
Issuer's Common Stock. The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1 Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Issuer (or such other office or agency of the Issuer as it may designate by
notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Issuer) of a duly executed facsimile copy of the
Notice of Exercise form annexed hereto. Within three (3) Trading Days following
the date of exercise as aforesaid, the Holder shall deliver the aggregate
Exercise Price for the shares specified in the applicable Notice of Exercise by
wire transfer or cashier's check drawn on a United States bank unless the
cashless exercise procedure specified in Section 1(c) below is specified in the
applicable Notice of Exercise. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the
Issuer until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full, in which case, the Holder
shall surrender this Warrant to the Issuer for cancellation within three (3)
Trading Days of the date the final Notice of Exercise is delivered to the
Issuer. Partial exercises of this Warrant resulting in purchases of a portion of
the total number of Warrant Shares available hereunder shall have the effect of
lowering the outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased. The Holder
and the Issuer shall maintain records showing the number of Warrant Shares
purchased and the date of such purchases. The Issuer shall deliver any objection
to any Notice of Exercise Form within one (1) Business Day of receipt of such
notice. THE HOLDER AND ANY ASSIGNEE, BY ACCEPTANCE OF THIS WARRANT, ACKNOWLEDGE
AND AGREE THAT, BY REASON OF THE PROVISIONS OF THIS PARAGRAPH, FOLLOWING THE
PURCHASE OF A PORTION OF THE WARRANT SHARES HEREUNDER, THE NUMBER OF WARRANT
SHARES AVAILABLE FOR PURCHASE HEREUNDER AT ANY GIVEN TIME MAY BE LESS THAN THE
AMOUNT STATED ON THE FACE HEREOF.
b) Exercise Price. The exercise price per share of the Common Stock under
this Warrant shall be $1.35 per share, subject to adjustment hereunder (the
"Exercise Price").
44
c) Mechanics of Exercise.
i. Delivery of Certificates Upon Exercise. Certificates for shares
purchased hereunder shall be transmitted by the Transfer Agent to the Holder by
delivery of a share certificate to the Holder.
ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been
exercised in part, the Issuer shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to the Holder a
new Warrant evidencing the rights of the Holder to purchase the un-purchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.
iii. Rescission Rights. If the Issuer fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates representing the
Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date,
then the Holder will have the right to rescind such exercise.
iv. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such exercise, the Issuer shall, at its election,
either pay a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up to the next
whole share.
v. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Issuer, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder and the Issuer may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
vi. Closing of Books. The Issuer will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
d) Assignment. The Warrants represented by this Warrant Certificate may
only be exercised by or on behalf of a Holder who, at the time of exercise,
either: (i) an "accredited investor" as defined in Regulation D promulgated
under the Securities Act of 1933, as amended; or (ii) , not a U.S. Person as
such term is defined in Regulation S under the Securities Act of 1933.
Section 2. Adjustments.
a) Reorganization Adjustment. In the event of any alteration of the Shares,
including any subdivision, consolidation or reclassification, or in the event of
any form of reorganization of the Issuer, including any amalgamation, merger or
arrangement (collectively, a "Reorganization"), an adjustment will be made to
the terms of the Warrants such that the Holder, upon exercise of any Warrants
following the completion of the Reorganization, will be entitled to receive the
same number and kind of securities that it would have been entitled to receive
as a result of the Reorganization had it exercised its Warrants immediately
prior to the Reorganization.
b) Successor Acknowledgment. The Issuer will not effect any Reorganization
which could result in a successor to the Issuer unless prior to or
simultaneously with the consummation thereof, the entity succeeding the Issuer
acknowledges in writing that it is bound by and will comply with the provisions
set forth in this Warrant Certificate.
c). Good Faith Adjustment. In accordance with this certificate, the Issuer
will make adjustments as it considers necessary and equitable acting in good
faith, subject to any approvals required by the Financial Industrial Regulatory
Authority. If at any time a dispute arises with respect to adjustments provide
for herein, such dispute will be conclusively determined by the auditors of the
Issuer or if they are unable or unwilling to act, by such other firm of
independent chartered accountants as may be selected by the directors of the
Issuer and any such determination, absent manifest error, will be binding upon
45
the Issuer, the Holder and shareholders of the Issuer. The Issuer will provide
such auditors or accountants with access to all necessary records of the Issuer
and fees payable to such accountants or auditors will be paid by the Issuer.
Section 3. Miscellaneous.
a) No Rights as Stockholder Until Exercise. This Warrant does not entitle
the Holder to any voting rights, dividends or other rights as a stockholder of
the Issuer prior to the exercise hereof as set forth in Section 1(c).
b) Loss, Theft, Destruction or Mutilation of Warrant. The Issuer covenants
that upon receipt by the Issuer of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Issuer will
make and deliver a new Warrant or stock certificate of like tenor and dated as
of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then, such action may be taken or such right may be
exercised on the next succeeding Business Day.
d) Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
e) Restrictions. The Holder acknowledges that the Warrant Shares acquired
upon the exercise of this Warrant, if not registered, will have restrictions
upon resale imposed by state and federal securities laws.
f) Notices. Any notice, request or other document required or permitted to
be given or delivered to the Holder by the Issuer shall be delivered in
accordance with the notice provisions of the Purchase Agreement between the
Issuer and the first Holder dated concurrently herewith.
g) Limitation of Liability. No provision hereof, in the absence of any
affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the purchase price of any
Common Stock or as a stockholder of the Issuer, whether such liability is
asserted by the Issuer or by creditors of the Issuer.
h) Remedies. The Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Issuer agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive and not to assert the defense in any action for specific performance that
a remedy at law would be adequate.
i) Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
Issuer and the successors and permitted assigns of Holder. The provisions of
this Warrant are intended to be for the benefit of any Holder from time to time
of this Warrant and shall be enforceable by the Holder or holder of Warrant
Shares.
j) Amendment. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Issuer and the Holder.
k) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.
l) Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.
46
IN WITNESS WHEREOF, the Issuer has caused this Warrant to be executed by
its officer thereunto duly authorized as of the date first above indicated.
TRIDENT BRANDS INCORPORATED
By: /s/ Xxxx Xxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman
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NOTICE OF EXERCISE
To: TRIDENT BRANDS INCORPORATED
(1) The undersigned hereby elects to purchase ________ Warrant Shares of
the Issuer pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any. Payment shall take the form of lawful
money of the United States.
(2) Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified
below:
_______________________________________
The Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:
_______________________________________
_______________________________________
_______________________________________
(3) Accredited Investor. The undersigned is either: (i) an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended; or (ii) , not a U.S. Person as such term is defined in
Regulation S under the Securities Act of 1933.
_______________________________________
[SIGNATURE OF HOLDER]
Name of Investing Entity: _____________________________________________________
Signature of Authorized Signatory of Investing Entity: ________________________
Name of Authorized Signatory: _________________________________________________
Title of Authorized Signatory: ________________________________________________
Date: _________________________________________________________________________
End of Subscription Agreement
48
