EXHIBIT 10.46
GENERAL SECURITY AGREEMENT
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THIS GENERAL SECURITY AGREEMENT dated for reference 26th day of February, 2002.
BETWEEN:
COMMERCIAL CONSOLIDATORS CORP., a corporation duly
incorporated under the laws of Alberta
( "Borrower")
AND:
THE SHAAR FUND LTD., a corporation duly incorporated under the
laws of ____________
( "Lender")
1. SECURITY
1.1 For value received, the Borrower grants and creates the security
constituted by this General Security Agreement and agrees to the terms,
covenants, agreements, conditions, provisos and other matters set out
in this General Security Agreement.
1.2 As general and continuing security for the Obligations (as defined in
clause 2.1 hereof), the Borrower:
1.2.1 hereby grants to the Lender, by way of mortgage, charge,
assignment and transfer, a security interest in all presently
owned and hereafter acquired personal property of the Borrower
of whatsoever nature and kind and wheresoever situate and all
proceeds thereof and therefrom, renewals thereof, Accessions
thereto and substitutions therefor, (all of which are herein
collectively called the "Personal Property Collateral"),
including, without limiting the generality of the foregoing,
all the presently owned or held and hereafter acquired right,
title and interest of the Borrower in and to all Goods
(including all accessories, attachments, additions and
Accessions thereto), Chattel Paper, Documents of Title
(whether negotiable or not), Instruments, Intangibles,
Licences, Money, Securities, and all:
(a) Inventory of whatsoever nature and kind and
wheresoever situate;
(b) Equipment (other than Inventory) of whatsoever nature
and kind and wheresoever situate, including, without
limitation, all machinery, tools, apparatus, plant,
furniture, fixtures and vehicles of whatsoever nature
and kind;
(c) book accounts and book debts and generally all
Accounts, debts, dues, claims, choses in action and
demands of every nature and kind howsoever arising or
secured including letters of credit, letters of
guarantee and advices of credit, which are now due,
owing or accruing or growing due to or owned by or
which may hereafter become due, owing or accruing or
growing due to or owned by the Borrower (all of which
are herein collectively called the "Debts");
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(d) deeds, documents, writings, papers, books of account
and other books relating to or being records of
Debts, Chattel Paper or Documents of Title or by
which such are or may hereafter be secured,
evidenced, acknowledged or made payable;
(e) contractual rights and insurance claims and all
goodwill, patents, trademarks, copyrights, and other
industrial property;
(f) monies other than trust monies lawfully belonging to
others; and
(g) personal property described in any schedule now or
hereafter annexed hereto; and
1.2.2 hereby mortgages, charges, assigns and transfers to the Lender
all other presently owned and hereafter acquired property,
assets and undertakings of the Borrower (other than interests
in land) of whatsoever nature and kind and wheresoever situate
(herein collectively called the "Other Collateral").
1.3 In this General Security Agreement:
1.3.1 the Personal Property Collateral and the Other Collateral are
herein together called the ("Collateral");
1.3.2 any reference to "Collateral" will, unless the context
otherwise requires, be deemed a reference to "Collateral or
any part thereof";
1.3.3 any reference to "Borrower" and the personal pronoun "it" or
"its" and any verb relating thereto and used therewith will be
read and construed as required by and in accordance with the
context in which such words are used depending upon whether
the Borrower is one or more individuals, corporations or
partnerships;
1.3.4 any reference to "General Security Agreement" will, unless the
context otherwise requires, be deemed a reference to this
General Security Agreement as amended from time to time by
written agreement together with the schedules hereto and any
schedules added hereto pursuant to the provisions hereof;
1.3.5 any reference to "PPSA" will mean the Personal Property
Security Act of the Province (as defined in clause 25.1
hereof) as amended from time to time, including any amendments
thereto and any Act substituted therefor and amendments
thereto;
1.3.6 the terms "Goods", "Chattel Paper", "Documents of Title",
"Equipment", "Accounts", "Consumer Goods", "Instruments",
"Intangibles", "Licences", "Money", "Securities", "Proceeds",
"Inventory" and "Accessions" and other words and expressions
which have been defined in the PPSA will be interpreted in
accordance with their respective meanings given in the PPSA
unless otherwise defined herein or unless the context
otherwise requires; and
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1.4 The Lender and the Borrower have not agreed to postpone the time for
attachment of the security interest granted hereby.
1.5 The security interest in Consumer Goods hereby granted will not become
effective until, but will become effective immediately when, the Lender
notifies the Borrower in writing that it is effective.
1.6 The last day of the term of any lease held by the Borrower with respect
to any of the Collateral is excluded from the security interest hereby
granted.
2. OBLIGATIONS SECURED
2.1 The security constituted by this General Security Agreement is general
and continuing security for payment, performance and satisfaction of
each and every obligation, indebtedness and liability of the Borrower
to the Lender incurred by the Borrower under the $250,000 Promissory
Note dated for reference the 8th day of February 2002 made among the
Lender and the Borrower (the "Note"), present or future, direct or
indirect, absolute or contingent, matured or not, extended or renewed,
wheresoever and howsoever incurred, and any ultimate unpaid balance
thereof, including 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 Borrower be
bound alone or with another or others and whether as principal or
surety, together with all amounts that may become due in connection
therewith arising under a subscription agreement ("Subscription
Agreement") entered into in connection with the Note, (all of which
obligations, indebtedness and liabilities are herein collectively
called the "Obligations").
2.2 This General Security Agreement and the security constituted hereby are
in addition to and not in substitution for any other security or
securities which the Lender may now or from time to time hold or take
from the Borrower or from any other person whomsoever.
3. Subordination of SECURITY
3.1 The Lender hereby acknowledges and agrees that its security interest
hereunder is expressly subject and subordinated to the priority liens
and security interests previously granted under a General Security
Agreement in favor of MFI Export, Inc. (the "MFI Security") and to the
liens and security interests previously granted by the Borrower in
favor of the bridge lenders listed on Schedule 3.1 annexed hereto (the
"Bridge Lenders" and collectively with MFI Export, Inc., the "Senior
Secured Parties"). The Lender hereby agrees that the priority among the
Senior Secured Parties with respect to the repayment of all amounts
secured by the respective General Security Agreements shall be
determined without reference to the Land Titles Act (Ontario), the
Mortgages Act (Ontario), the PPSA or to any other legal or equitable
principles respecting priorities, but instead shall be determined first
to MFI Export, Inc. with respect to the MFI Security, next to the
Bridge Lenders in accordance with the General Security Agreements
entered into between the Borrower and such Bridge Lenders, and last to
the Lender under this General Security Agreement.
3.2 The Lender agrees that, in the event of a default by the Borrower
pursuant to Section 8 hereof, the Senior Secured Parties shall have
absolute priority over the Lender with respect to the repayment of all
amounts secured by the respective General Security Agreements and that
any amount repaid in respect of the respective obligations shall be
paid first to MFI Export, Inc. under the MFI Security and then shared
among the Bridge Lenders proportionally in accordance with the
respective aggregate amounts, including principal, interest and costs,
owing to each of the Senior Secured Parties by the Borrower immediately
before each such repayment, prior to any payments made to the Lender
hereunder. The Lender agrees that the provisions of this Section 3
shall extend to any insurance proceeds payable in respect of collateral
secured under the respective security agreements with the Senior
Secured Parties.
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3.3 Nothing herein contained shall be construed as entitling the Lender to
receive any proceeds of disposition of any of the property or assets of
the Borrower in respect of which it does not have any security or in
respect of which its security is invalid, unperfected or unenforceable
as against third parties. If any third party shall have a valid claim
to proceeds of realization from any of the property or assets of the
Borrower in priority to or on a parity with the Lender, then this
General Security Agreement shall not apply so as to diminish the rights
(as such rights shall exist but for this Section 3) of the Lender
against such third party to the proceeds of realization of such
property or assets.
4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
4.1 The Borrower represents and warrants that, and, so long as this General
Security Agreement remains in effect, will be deemed to continuously
represent and warrant that:
4.1.1 this General Security Agreement has been authorized, executed
and delivered in accordance with resolutions of the directors
(and of the shareholders as applicable) of the Borrower and
all other matters and things have been done and performed so
as to authorize and make the execution and delivery of this
General Security Agreement, the creation of the security
constituted hereby and the performance of the Borrower's
obligations hereunder, legal, valid and binding;
4.1.2 the Collateral is genuine and is owned by the Borrower free of
all security interests, mortgages, liens, claims, charges and
other encumbrances (herein collectively called
"Encumbrances"), save for the security constituted by this
General Security Agreement and the Senior Secured Parties;
4.1.3 the Borrower has good and lawful authority to create the
security in the Collateral constituted by this General
Security Agreement;
4.1.4 each Debt, Chattel Paper and Instrument included in Collateral
is enforceable in accordance with its terms against the party
obligated to pay the same (the "Account Borrower"), and the
amount represented by the Borrower to the Lender from time to
time as owing by each Account Borrower or by all Account
Debtors will be the correct amount actually and
unconditionally owing by such Account Borrower or Account
Debtors, except for normal cash discounts where applicable,
and no Account Borrower will have any defense, set off, claim
or counterclaim against the Borrower which can be asserted
against the Lender, whether in any proceeding to enforce the
Collateral or otherwise;
4.1.5 with respect to Goods (including Inventory) comprised in the
Collateral, the locations specified in the Location Schedule
are accurate and complete (save for Goods in transit to such
locations and Inventory on lease or consignment) and all
fixtures or Goods about to become fixtures which form part of
the Collateral will be situate at one of the locations
specified in the Location Schedule; and
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4.1.6 with respect to Securities comprised in the Collateral,
including without limitation the share certificates
representing the Borrower's direct and indirect holdings in
the material Subsidiaries, the locations specified in the
Location Schedule are accurate and complete.
5. COVENANTS OF THE BORROWER
5.1 The Borrower covenants and agrees that at all times while this General
Security Agreement remains in effect the Borrower will:
5.1.1 defend the Collateral for the benefit of the Lender against
the claims and demands of all other persons;
5.1.2 not, without the prior written consent of the Lender:
(a) create or permit to exist any Encumbrance against any
of its personal property, assets and undertakings
which ranks or could in any event rank in priority to
or pari passu with the security constituted by this
Security Agreement, save for:
(i) Encumbrances approved in writing by the
Lender prior to creation or assumption; and
(b) grant, sell, exchange, transfer, assign, lease or
otherwise dispose of the Collateral other than in the
ordinary course of the Borrower's business;
provided always, that, until default, the Borrower may,
subject to clause 5.2 hereof, use monies available to the
Borrower;
5.1.3 fully and effectively maintain and keep maintained valid and
effective the security constituted by this General Security
Agreement;
5.1.4 notify the Lender promptly of:
(a) any change in the information contained herein or in
the Schedules hereto relating to the Borrower, the
Borrower's name, the Borrower's business or the
Collateral;
(b) the details of any significant acquisition of
Collateral;
(c) the details of any claims or litigation affecting the
Borrower or the Collateral;
(d) any loss or damage to the Collateral;
(e) any default by any Account Borrower in payment or
other performance of obligations of the Account
Borrower comprised in the Collateral; and
(f) the return to, or repossession by, the Borrower of
Collateral;
5.1.5 keep the Collateral in good order, condition and repair (in
the locations specified in the Location Schedule or such other
locations as the Lender may approve in writing) and not use
the Collateral in violation of the provisions of this General
Security Agreement or any other agreement relating to the
Collateral or any policy insuring the Collateral or any
applicable statute, law, by-law, rule, regulation or
ordinance;
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5.1.6 carry on and conduct the business of the Borrower in a proper
and efficient manner and so as to protect and preserve the
Collateral and to keep, in accordance with generally accepted
accounting principles, consistently applied, proper books of
account for the Borrower's business as well as accurate and
complete records concerning the Collateral and, at the
Lender's request, xxxx any and all such records and the
Collateral so as to indicate the security constituted by this
General Security Agreement;
5.1.7 forthwith pay:
(a) all obligations to its employees and all obligations
to others which relate to its employees when due,
including, without limitation, all taxes, duties,
levies, government fees, claims and dues related to
its employees;
(b) all taxes, assessments, rates, duties, levies,
government fees, claims and dues lawfully levied,
assessed or imposed upon it or the Collateral when
due, unless the Borrower will in good faith contest
its obligations so to pay and will furnish such
security as the Lender may require.
5.1.8 prevent the Collateral, save Inventory sold or leased as
permitted hereby, from being or becoming an Accession to other
property not covered by this General Security Agreement;
5.1.9 insure the Collateral for such periods, in such amounts, on
such terms and against loss or damage by fire and such other
risks as the Lender will reasonably direct (but in any event
in accordance with prudent business practice and for not less
than the full replacement cost thereof) with loss payable to
the Lender and the Borrower, as insureds, as their respective
interests may appear, and to pay all premiums for such
insurance;
5.1.10 deliver to the Lender from time to time promptly upon request:
(a) any Documents of Title, Instruments, Securities and
Chattel Paper comprised in or relating to the
Collateral;
(b) all books of account and all records, ledgers,
reports, correspondence, schedules, documents,
statements, lists and other writings relating to the
Collateral for the purpose of inspecting, auditing or
copying the same;
(c) all financial statements prepared by or for the
Borrower regarding the Borrower's business;
(d) all policies and certificates of insurance relating
to the Collateral; and
(e) such information concerning the Collateral, the
Borrower and Borrower's business and affairs as the
Lender may reasonably require;
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5.1.11 forthwith pay all costs, charges, expenses and legal fees and
disbursements (on a solicitor and his own client basis) which
may be incurred by the Lender in:
(a) inspecting the Collateral;
(b) negotiating, preparing, perfecting and registering
this General Security Agreement and other documents,
whether or not relating to this General Security
Agreement;
(c) investigating title to the Collateral;
(d) taking, recovering, keeping possession of and
insuring the Collateral;
(e) connection with any disclosure requirements under the
PPSA; and
(f) all other actions and proceedings taken in connection
with the preservation of the Collateral and the
confirmation, perfection and enforcement of this
General Security Agreement and of any other security
held by the Lender as security for the Obligations;
5.1.12 at the Lender's request at any time and from time to time
execute and deliver such further and other documents and
instruments and do all other acts and things as the Lender
reasonably requires in order to give effect to this General
Security Agreement or to confirm and perfect, and maintain
perfection of, the security constituted by this General
Security Agreement in favour of the Lender; and
5.1.13 permit the Lender and its representatives, at all reasonable
times, access to all the Borrower's property, assets and
undertakings and to all its books of account and records for
the purpose of inspection and render all assistance necessary
for such inspection.
6. PAYMENTS AND PROCEEDS
6.1 Before or after default under this General Security Agreement, the
Lender may notify all or any Account Debtors of the security
constituted by this General Security Agreement and may also direct such
Account Debtors to make all payments on the Collateral to the Lender.
6.2 The Borrower acknowledges that any payments on or other proceeds of the
Collateral received by the Borrower from Account Debtors, whether
before or after notification of the security constituted by this
General Security Agreement to Account Debtors and whether before or
after default under this General Security Agreement, will be received
and held by the Borrower in trust for the Lender and will be turned
over to the Lender forthwith upon request.
7. SECURED PARTY ACTIONS
7.1 The Borrower hereby authorizes the Lender to file such financing
statements and other documents and do such acts, matters and things
(including completing and adding schedules hereto identifying the
Collateral or any permitted Encumbrances affecting collateral or
identifying the locations at which the Borrower's business is carried
on and the Collateral and records relating thereto are situate) as the
Lender may deem appropriate to perfect and continue the security
constituted hereby, to protect and preserve the Collateral and to
realize upon the security constituted hereby and the Borrower hereby
irrevocably constitutes and appoints the Lender the true and lawful
Attorney of the Borrower, with full power of substitution, to do any of
the foregoing in the name of the Borrower whenever and wherever it may
be deemed necessary or expedient by the Lender.
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7.2 The Lender may charge for its reasonable costs incurred in connection
with any disclosure requirements under the PPSA.
7.3 If the Borrower fails to perform any of its Obligations hereunder, the
Lender may, but will not be obliged to, perform any or all of such
Obligations without prejudice to any other rights and remedies of the
Lender hereunder, and any payments made and any costs, charges,
expenses and legal fees and disbursements (on a solicitor and his own
client basis) incurred in connection therewith will be payable by the
Borrower to the Lender forthwith with interest until paid at the
highest rate borne by any of the obligations and such amounts will form
part of the obligations and constitute a charge upon the Collateral in
favour of the Lender prior to all claims subsequent to this General
Security Agreement.
8. EVENTS OF DEFAULT
8.1 The Borrower will be in default under this General Security Agreement,
unless otherwise agreed in writing by the Lender, upon the non-payment
of any amount due under the terms of the Note.
9. ENFORCEMENT
9.1 The Lender may make demand for payment at any time of any or all of the
Obligations which are payable upon demand (whether or not there is any
default under this General Security Agreement) and, upon any default
under this General Security Agreement, the Lender may declare any or
all of the Obligations which are not payable on demand to become
immediately due and payable.
9.2 Upon default under this General Security Agreement, the security hereby
constituted will immediately become enforceable.
9.3 To enforce and realize on the security constituted by this General
Security Agreement the Lender may take any action permitted by law or
in equity, as it may deem expedient, and in particular, without
limiting the generality of the foregoing, the Lender may do any one or
more of the following:
9.3.1 appoint by instrument a receiver, receiver and manager or
receiver-manager (the person so appointed is herein called the
"Receiver") of the Collateral, with or without bond as the
Lender may determine, and from time to time in its sole
discretion remove such Receiver and appoint another in its
stead;
9.3.2 enter upon any premises of the Borrower and take possession of
the Collateral with power to exclude the Borrower, its agents
and its servants therefrom, without becoming liable as a
mortgagee in possession;
9.3.3 preserve, protect and maintain the Collateral and make such
replacements thereof and repairs and additions thereto as the
Lender may deem advisable;
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9.3.4 sell, lease or otherwise dispose of or concur in selling,
leasing or otherwise disposing 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 reasonably
obtained therefor 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 to the Lender may seem
reasonable, provided that the Borrower will not be entitled to
be credited with the proceeds of any such sale, lease or other
disposition until the monies therefor are actually received;
and
9.3.5 exercise all of the rights and remedies of a secured party
under the PPSA.
9.4 A Receiver appointed pursuant to this General Security Agreement will
be the agent of the Borrower and not of the Lender and, to the extent
permitted by law or to such lesser extent permitted by its appointment,
will have all the powers of the Lender hereunder, and in addition will
have power to carry on the business of the Borrower and for such
purpose from time to time to borrow money either secured or unsecured,
and if secured by a security on any of the Collateral, any such
security may rank in priority to or pari passu with or behind the
security constituted by this General Security Agreement, and if it does
not so specify such security will rank in priority to the security
constituted by this General Security Agreement.
9.5 Subject to applicable law and the claims, if any, of the creditors of
the Borrower ranking in priority to the security constituted by this
General Security Agreement, all amounts realized from the disposition
of the Collateral pursuant to this General Security Agreement will be
applied as the Lender, in its sole discretion, may direct as follows:
FIRSTLY: in or toward payment of all costs, charges and
expenses (including legal fees and disbursements on a
solicitor and his own client basis) incurred by the
Lender in connection with or incidental to:
(a) the exercise by the Lender of all or any of
the powers granted to it pursuant to this
General Security Agreement; and
(b) the appointment of the Receiver and the
exercise by the Receiver of all or any of
the powers granted to the Receiver pursuant
to this General Security Agreement,
including the Receiver's reasonable
remuneration and all outgoings properly
payable by the Receiver;
SECONDLY: in or toward payment to the Lender of all principal
and other monies (except interest) due in respect of
the Obligations;
THIRDLY: in or toward payment to the Lender of all interest
remaining unpaid in respect of the Obligations; and
FOURTHLY: any surplus will be paid to the Borrower.
10. DEFICIENCY
10.1 If the amounts realized from the disposition of the Collateral are not
sufficient to pay the Obligations in full to the Lender, the Borrower
will immediately pay to the Lender the amount of such deficiency.
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11. RIGHTS CUMULATIVE
11.1 All rights and remedies of the Lender set out in this General Security
Agreement are cumulative and no right or remedy contained herein is
intended to be exclusive but each will be in addition to every other
right or remedy contained herein or in any existing or future security
agreement or now or hereafter existing at law or in equity or pursuant
to any other agreement between the Borrower and the Lender that, may be
in effect from time to time.
12. APPOINTMENT OF ATTORNEY
12.1 The Borrower hereby irrevocably appoints the Lender or the Receiver, as
the case may be, with full power of substitution, to be the attorney of
the Borrower for and in the name of the Borrower to sign, endorse or
execute under seal or otherwise any deeds, documents, transfers,
cheques, instruments, demands, assignments, assurances or consents that
the Borrower is obliged to sign, endorse or execute and generally to
use the name of the Borrower and to do all things as may be necessary
or incidental to the exercise of all or any of the powers conferred on
the Lender or the Receiver, as the case may be, pursuant to this
General Security Agreement.
13. LIABILITY OF SECURED PARTY
13.1 The Lender will 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 Lender will
manage the Collateral upon entry or the business of the Borrower, as
herein provided, nor will the Lender be liable to account as mortgagee
in possession or for anything except actual receipts or be liable for
any loss or realization or for any default or omission for which a
mortgagee in possession may be liable.
13.2 The Lender will not be bound to do, observe or perform or to see to the
observance or performance by the Borrower of any obligations or
covenants imposed upon the Borrower nor will the Lender, in the case of
Securities, Instruments or Chattel Paper, be obliged to reserve rights
against other persons, nor will the Lender be obliged to keep any of
the Collateral identifiable.
13.3 The Lender will not be obliged to inquire into the right of any person
purporting to be entitled under the PPSA to information and materials
from the Lender by making a demand upon the Lender for such information
and materials and the Lender will be entitled to comply with such
demand and will not be liable for having complied with such demand
notwithstanding that such person may in fact not be entitled to make
such demand.
13.4 The Borrower will indemnify the Lender and hold the Lender harmless
from and against any and all claims, costs, losses, demands, actions,
causes of action, lawsuits, damages, penalties, judgments and
liabilities of whatsoever nature and kind in connection with or arising
out of any representation or warranty given by the Borrower, being
untrue, the breach of any term, condition, proviso, agreement or
covenant to the Lender, or the exercise of any of the rights and or
remedies of the Lender, or any transaction contemplated in this General
Security Agreement.
13.5 The Borrower hereby waives any applicable provision of law permitted to
be waived by it which imposes higher or greater obligations upon the
Lender than provided in this General Security Agreement.
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14. APPROPRIATION OF PAYMENTS AND OFFSET
14.1 Subject to any applicable provisions of the PPSA, any and all payments
made in respect of the Obligations from time to time and monies
realized from any security held therefor (including monies collected in
accordance with or realized on any enforcement of this General Security
Agreement) may be applied to such part or parts of the Obligations as
the Lender may see fit, and the Lender may at all times and from time
to time change any appropriation as the Lender may see fit or, at the
option of the Lender, such payments and monies may be held
unappropriated in a collateral account or released to the Borrower, all
without prejudice to the liability of the Borrower or to the rights of
the Lender hereunder.
14.2 Without limiting any other right of the Lender, whenever any of the
Obligations is immediately due and payable or the Lender has the right
to declare any of the Obligations to be immediately due and payable
(whether or not it has so declared), the Lender may, in its sole
discretion, set off against any of the Obligations any and all monies
then owed to the Borrower by the Lender in any capacity, whether or not
due and to do so even though any charge therefor is made or entered on
the Lender's records subsequent thereto, and the Lender will be deemed
to have exercised such right to set off immediately at the time of
making its decision.
15. WAIVER
15.1 No delay or omission by the Lender in exercising any right or remedy
hereunder or with respect to any of the Obligations will operate as a
waiver thereof or of any other right or remedy, and no single or
partial exercise thereof will preclude any other or further exercise
thereof or the exercise of any other right or remedy.
15.2 The Lender may from time to time and at any time waive in whole or in
part any right, benefit or default under any clause of this General
Security Agreement but any such waiver of any right, benefit or default
on any occasion will 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.
16. EXTENSIONS
16.1 The Lender 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 security, and otherwise deal with the Borrower, Account
Debtors of the Borrower, sureties and others and with the Collateral
and other security as the Lender may see fit without prejudice to the
liability of the Borrower or the Lender's right to hold and realize on
the security constituted by this General Security Agreement.
17. ASSIGNMENT
17.1 The Lender may, without further notice to the Borrower, at any time
mortgage, charge, assign, transfer or grant a security interest in this
General Security Agreement and the security constituted hereby.
17.2 The Borrower expressly agrees that the assignee, transferee or secured
party of the Lender, as the case may be, will have all of the Lender's
rights and remedies under this General Security Agreement and the
Borrower will not assert any defence, counterclaim, right of set-off or
otherwise any claim which it now has or hereafter acquires against the
Lender in any action commenced by such assignee, transferee or secured
party, as the case may be, and will pay the Obligations to the
assignee, transferee or secured party, as the case may be, as the
Obligations become due.
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18. SATISFACTION AND DISCHARGE
18.1 Any partial payment or satisfaction of the Obligations, or any ceasing
by the Borrower to be indebted to the Lender, will be deemed not to be
redemption or discharge of the security constituted by this General
Security Agreement.
18.2 The Borrower will be entitled to a release and discharge of the
security constituted by this General Security Agreement upon full
payment, performance and satisfaction of all Obligations, or the
securing of the Obligations to the satisfaction of the Lender, and upon
written request by the Borrower and payment to the Lender of all costs,
charges, expenses and legal fees and disbursements (on a solicitor and
his own client basis) incurred by the Lender in connection with the
Obligations and such release and discharge.
19. NON MERGER
19.1 This General Security Agreement will not operate so as to create any
merger or discharge of any of the Obligations, or any assignment,
transfer, guarantee, lien, contract, promissory note, xxxx of exchange
or security in any form held or which may hereafter be held by the
Lender from the Borrower or from any other person whomsoever.
19.2 The taking of a judgment with respect to any of the obligations will
not operate as a merger of any of the terms, conditions, covenants,
agreements or provisos contained in this General Security Agreement.
19.3 The release and discharge of the security constituted by this General
Security Agreement by the Lender will not operate as a release or
discharge of any right of the Lender to be indemnified and held
harmless by the Borrower pursuant to clause 13.4 hereof or of any other
right of the Lender against the Borrower arising under this General
Security Agreement prior to such release and discharge.
20. INTERPRETATION
20.1 In this General Security Agreement:
20.1.1 the invalidity or unenforceability of the whole or any part of
any clause will not affect the validity or enforceability of
any other clause or the remainder of such clause;
20.1.2 the headings have been inserted for reference only and will
not define, limit, alter or enlarge the meaning of any
provision of this General Security Agreement; and
20.1.3 when the context so requires, the singular will be read as if
the plural were expressed and the provisions hereof will be
read with all grammatical changes necessary dependent upon the
person referred to being a male, female, firm or corporation.
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21. NOTICE
21.1 Whenever either the Lender or the Borrower hereto is required or entitled
to notify or direct the other or to make a demand upon or request of the other
relating to the Collateral, this General Security Agreement or the PPSA, such
notice, direction, demand or request will be sufficiently given if given in
writing and delivered to the party for whom it is intended in person, by
reputable overnight courier or delivery service, by facsimile machine (receipt
conformed) with a copy sent by first class mail on the date of transmission, or
by registered or certified mail, return receipt requested, directed to its
address set forth below (or to any new address of which a party hereto shall
have informed the other by the giving of notice in the manner provided herein):
To Borrower: Commercial Consolidators Corp.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0, Xxxxxx
Attn: Xxxxxxx Xxxxxxxxxx, Chairman
Fax: (000) 000-0000
With a copy to: Xxxxxxxxx Xxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
To Lender: The Shaar Fund Ltd.
c/x Xxxxxxxx Capital Management, LLC
00 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: 000-000-0000
With a copy to: Xxxxxxx & Xxxxxx LLP
00 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Fax:: (000) 000-0000
-and-
Xxxxxxx X. Xxxxxxx, Esq.
Grushko & Xxxxxxx, P.C.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Any party may change its address by written notice in accordance with this
paragraph.
21.2 Either the Lender or the Borrower may notify the other in accordance
herewith of any change in its principal address to be used for the
purposes hereof.
22. VARIATION
22.1 Save for any schedules which may be added hereto pursuant to the
provisions hereof, no modification, variation or amendment of any
provision of this General Security Agreement will be made except by
written agreement, executed by the parties hereto and no waiver of any
provision hereof will be effective unless in writing.
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23. ENUREMENT
23.1 This General Security Agreement will enure to the benefit of the Lender
and its successors and assigns and will be binding upon the successors
and permitted assigns of the Borrower.
24. COPY OF AGREEMENT AND FINANCING STATEMENT
24.1 The Borrower hereby acknowledges receiving a copy of this General
Security Agreement.
25. GOVERNING LAW
25.1 This General Security Agreement will be governed by and construed in
accordance with the law of the Province of Ontario and the parties
submit to the exclusive jurisdiction of the courts located in the State
and County of New York, U.S.A., and to the extent they may legally do
so, waive the right to a jury in any trial relating to this guarantee
or any right or obligation related thereto.
IN WITNESS WHEREOF the Borrower has executed this General Security Agreement as
of the 26th day of February, 2002.
COMMERCIAL CONSOLIDATORS CORP.
Per:
-------------------------------------
Authorized Signatory c/s
LOCATION SCHEDULE
ADDRESS(ES) OF LOCATION OF THE COLLATERAL
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Xxxxxx
