UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 13, 2021
SUSGLOBAL ENERGY CORP.
(Exact name of registrant as specified in its charter)
| Delaware | 000-56024 | 38-4039116 |
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |
200 Davenport Road
Toronto, Ontario, Canada
M5R 1J2
(Address of principal executive offices) (ZIP Code)
Registrant’s telephone number, including area code: (416) 223-8500
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b -2 of this chapter).
Emerging growth company ☑
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed by SusGlobal Energy Corp. (the "Company") in its Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, the Company obtained a first mortgage (the "Mortgage") provided by private lenders to finance the acquisition of the shares of 1684567 Ontario Inc. ("1684567"), and to provide funds for additional financing needs, received in three tranches totaling $2,662,440 (C$3,300,000) (December 31, 2020-$2,591,820; C$3,300,000). 1684567 is a wholly owned subsidiary of the Company.
The Mortgage is repayable interest only on a monthly basis at an annual rate of the higher of the Royal Bank of Canada's prime rate plus 6.05% per annum (currently 8.50%) and 10% per annum. The Mortgage is secured by the shares of 1684567 and certain land owned by 1684567.
On August 13, 2021, the Company, to fund another acquisition, increased the Mortgage by $1,532,920 (C$1,900,000) (the "Mortgage Increase"). The total of the Mortgage is now $4,195,360 (C$5,200,000). The Company is the guarantor of the first mortgage pursuant to that certain Guarantee dated August 13, 2021 by and between the Company and the private lenders (the "Guarantee"). The Mortgage maturity date is now September 1, 2022.
The Mortgage is a long-term debt obligation that is material to the Company.
The foregoing description of the Mortgage Increase and the Guarantee do not purport to be complete and are qualified in their entirety by reference to the Mortgage Increase and the Note, the forms of which are filed as, respectively, Exhibits 4.1 and 10.1 hereto.
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement by a Registrant.
The disclosure under Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.
Item 9.01. Exhibits.
(d) Exhibits
| Exhibit No. | Exhibit | |
| 4.1 | Mortgage Increase, dated August 13, 2021 | |
| 10.1 | Guarantee, by and between SusGlobal Energy Corp. and Private Lenders, dated August 13, 2021 | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SusGlobal Energy Corp. | ||
| Dated: August 19, 2021 | By: | /s/ Marc Hazout |
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Marc Hazout
Executive Chairman, President and Chief Executive Officer |
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LRO # 21 Charge/Mortgage |
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The applicant(s) hereby applies to the Land Registrar. |
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Chargee(s) |
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Capacity |
Share |
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Name |
R. WILLIAMSON CONSULTANTS LTD. |
Registered Owner |
2,000,000/5,20 |
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0,000 |
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Address for Service |
86 Carrick Trail, Gravenhurst, Ontario, P1P 0A6 |
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Name |
P.I.C.K.S. INC. |
Registered Owner |
1,200,000/5,20 |
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0,000 |
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Address for Service |
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Name |
CANADIAN WESTERN TRUST COMPANY |
Registered Owner |
195,000/5,200, |
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000 |
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Address for Service |
IN TRUST FOR RRSP 107862. 300-750 Cambie Street, |
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Vancouver, BC, V6B 0A2 |
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Name |
CANADIAN WESTERN TRUST COMPANY |
Registered Owner |
30,000/5,200,0 |
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00 |
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Address for Service |
IN TRUST FOR RRSP 107863, 300-750 Cambie Street, |
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Vancouver, BC, V6B 0A2 |
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| Name |
CANADIAN WESTERN TRUST COMPANY |
Registered Owner |
475,000/5,200, |
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000 |
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Address for Service |
IN TRUST FOR RRSP 107861. 300-750 Cambie Street, |
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Vancouver, BC, V6B 0A2 |
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Name |
CANADIAN WESTERN TRUST COMPANY |
Registered Owner |
400,000/5.200, |
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000 |
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Address for Service |
IN TRUST FOR RRSP 110472, 300-750 Cambie Street, |
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Vancouver, BC, V6B 0A2 |
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Name |
CANADIAN WESTERN TRUST COMPANY |
Registered Owner |
100,000/5,200, |
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000 |
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Address for Service |
IN TRUST FOR RRSP 113116. 300-750 Cambie Street, |
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Vancouver, BC, V6B 0A2 |
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Name |
CANADIAN WESTERN TRUST COMPANY |
Registered Owner |
100,000/5,200, |
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000 |
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LRO # 21 Charge/Mortgage |
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Tile applicant(s) hereby applies to the Land Registrar. |
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LRO # 21 Charge/Mortgage |
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The applicant(s) hereby applies to the Land Registrar. |
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| Fees/Taxes/Payment | |||
| Statutory Registration Fee | $65.30 | ||
| Total Paid | $65.30 | ||
ADDITIONAL PROVISIONS
1. 12 PO ST-DATED CHEQUES
PROVIDED that the Chargors do hereby covenant and agree to provide to the each of the Chargees upon the execution of this mortgage and annually thereafter on the anniversary date during the currency of this mortgage a series of twelve (12) post-dated cheques each in the amount of the monthly installment due hereunder.
2. SALES CLAUSE
PROVIDED that if the Chargor, at any time, shall sell, transfer, convey or otherwise dispose of the herein described lands and building(s) without the prior consent of the Chargee at the Chargee's option, the within mortgage shall immediately become due and payable in full including interest to the maturity date of the mortgage herein set forth.
3. BY-LAW CONFORMITY AND OCCUPANCY CLAUSE
PROVIDED that if at any time, the said property and/or the building(s) located on the said property, do not comply with the municipal by-laws, or the by-laws of any other level of government and/or the building becomes unoccupied, then in either of these events the balance of the principal monies hereby secured, together with interest as herein provided shall forthwith become due and payable upon demand. PROVIDED further that nothing herein shall be construed so as to permit the Chargor the privilege of prepaying the said mortgage in whole or in part.
PROVIDED that it does not materially affect the security of the Chargee, the Chargee shall consent to such applications and/or severances as may be required in order to develop the lands. Such consent not to be unreasonably withheld or delayed.
4. ADMINISTRATIVE FEES
a. In the event it is necessary for the Chargee to have a letter sent by the Chargee's solicitor to the Charger because of default or non-payment, then the Charger shall be charged the sum of $450.00 plus applicable taxes for such letter and such sum shall be a charge on the said lands and shall bear interest at the rate herein stated.
b. In the event of any of the Charger's post-dated or pre-authorized cheques are not honoured when presented for payment to the Bank or Trust Company on which they are drawn, the Chargor shall pay to each of the Chargees for each such returned cheque the sum of $450.00 plus applicable taxes as a liquidated amount to cover each of the Chargees' administration costs and not as a penalty and such sum shall be a charge upon the said lands and shall bear interest at the rate hereinbefore stated.
c. In the event that the Chargor fails to provide proof of insurance on an annual basis, the Chargee is entitled to charge the Chargor the sum of $450.00 plus applicable taxes as an administrative fee.
d. Failure to provide post-dated cheques will result in default and the Chargee will be entitled to charge the Chargor the sum of $450.00 plus applicable taxes and in addition will be entitled to commence default proceedings at the expense of the Charger with all costs including but not limited to legal fees on a solicitor and client basis to be added to the principal balance then outstanding as of the date the bill is submitted to the Chargee.
5. ADMINISTRATION FEES
a. In the event that the Chargee is required by the Chargor or is otherwise required to provide a mortgage statement, there shall be an administrative fee of $350.00 plus applicable taxes for each such statement.
b. The Chargee shall have the exclusive right to prepare and execute the Discharge of the Charge/Mortgage of Land. The Chargor shall pay an additional $500.00 plus applicable taxes to the chargee as an administrative fee for the preparation of the said Discharge of Charge.
6. PREPAYMENT
Provided that the Chargors are not in default herein, the Chargors have the right to prepay the whole amount of the principal herein then outstanding, upon a payment of one (1) month interest on the principal being prepaid as of the date of prepayment, as a bonus and not as a penalty.
7. INTEREST CALCULATION
For the purpose of calculation of interest, any payment of principal received after 1:00 p.m. shall be deemed to have been received on the next following banking day.
8. RENT AND MANAGEMENT
PROVIDED also, and it is hereby further agreed by and between the Chargor and the Chargee, that should default be made by the Chargor in the observance or performance of any of the covenants, provisos, agreements or conditions contained in this Mortgage, the Chargee reserves the right to enter into the said lands and premises and to receive the rents and profits and to be entitled to receive in addition to all other fees, charges and disbursements to which the Chargee is entitled, a management fee so as to reimburse the Chargee for reasonable time and trouble in the management of the said lands and premises it being understood and agreed that in the circumstances a management fee equal to $150.00 plus applicable taxes per day is a just and equitable fee, having regard to all of the circumstances.
9. MATRIMONIAL HOME
PROVIDED that in the event that any part of the properties herein becomes the matrimonial home of either of the Chargors herein, then the monies secured hereby shall become due and payable unless the spouse of such party consents to this mortgage and releases to the Chargee his or her interest herein.
10. EXPROPRIATION
PROVIDED that if the said lands shall be expropriated by any government, authority, body or corporation clothed with the powers of expropriation, the amount of the principal hereby secured remaining unpaid shall forthwith become due and payable together with interest at the said rate lo the date of payment and together with a bonus equal lo the sum of three months interest at the said rate calculated on the remaining principal balance from the said date of payment to the date the said principal sum or balance thereof remaining unpaid would otherwise under the provision of this mortgage become due and payable.
11. DEFAULT PROCEEDINGS
The Chargor agrees that should the Chargee commence legal action due to default under the Charge/Mortgage of Land that the Chargee shall be entitled to charge an additional fee equivalent to three months interest.
12. SEVERAB ILITY
Should any clause and/or clauses contained in the Charge/Mortgage of Land be found to be illegal, void as against public policy or unenforceable in law, the offending clause or clauses as the case may be, is and or are to be severed from this Charge/Mortgage of Land and deemed never to be part of this Charge/Mortgage of Land.
13. LEGAL PROCEEDINGS
The Charger covenants and agrees that if collection or other legal proceedings are taken in connection with or to realize upon this security, an administrative fee of $1,750.00 plus applicable taxes shall be added to the Charge debt on each occasion such proceedings are so taken and said fee or fees, shall form a Charge upon the charged property in favour of the Chargee.
GUARANTOR CLAUSE
The Guarantor, in consideration of such advance or advances as the mortgagee may make under this mortgage and in consideration of the sum of One ($1.00) Dollar now paid to him by the mortgagee, the receipt whereof is hereby acknowledged:
1. Hereby covenants and agrees with the mortgagee, as principal debtor and not as surety, to well and truly pay or cause to be paid to the mortgagee the principal money, interest, taxes and all other monies which the mortgagor has by this mortgage covenanted to pay to the mortgagee or which are secured by this mortgage or intended so to be secured, the said payments to be made on the days and times and in the manner provided for in this mortgage;
2. Hereby further covenants and agrees to keep, observe and perform the covenants, terms, provisos, stipulations and conditions of this mortgage which are to be kept, observed and performed by the mortgagor and at all times to indemnify, protect and save harmless the mortgagee from all loss, costs and damage in respect of the advances of the mortgage money and every matter and thing contained in this mortgage;
3. Further agrees that the mortgagee may from time to lime without notice to him extend the time for payment of all monies secured by this mortgage, amend the terms and times of payment and the rate of interest with respect to the said monies refrain from enforcing payment of the said monies, release any portion or portions of the mortgaged premises and waive or vary any of the covenants and conditions in this mortgage to be kept observed and performed by the mortgagor and grant any indulgence to the mortgagor in respect of any default by the mortgagor which may arise under this mortgage, and that notwithstanding any such act by the mortgagee, the guarantor shall be bound by the provisions of this mortgage until all of the monies secured under this said mortgage shall have been fully paid and satisfied;
4. Further acknowledges that the mortgagee may at any time grant or refuse any additional credit to the mortgagor, accept or release or renounce any collateral or other security, administer or otherwise deal with the land and premises described in this mortgage, take an assignment of the rentals with respect to the said lands and premises and apply any and all monies at any time received from the mortgagor or from any other person or from the proceeds of any securities given in connection with this mortgage in any manner the mortgagee may deem appropriate. The mortgagee may also utilize any and all insurance proceeds in reduction of the principal monies and interest secured, by this mortgage or for the refurbishing of the lands and premises or in any other manner that the mortgagee may in its absolute discretion deem advisable.
5. Agrees that all of the matters mentioned herein may be performed by the mortgagee without notice to him, the guarantor, without releasing or in any way modifying, altering. Varying or in any way affecting the liability of the guarantor hereunder; and
6. Agrees that all of the covenants and agreements of him the guarantor, contained herein shall be binding upon him and his respective heirs, executors, administrators, and assigns and shall accrue to the benefit of the mortgagee, its successors and assigns and that his liability as guarantor hereunder and the liability of his executors, administrators and assigns shall be joint and several.
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LRO # 21 Notice Of Assignment Of Rents-General |
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The applicant(s) /10roby applies to the Land Registrar. |
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LRO # 21 Notice Of Assignment Of Rents-General |
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The applicant(s) hereby applies to the Land Registrar. |
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THIS AGREEMENT made the 13th day of August, 2021
BETWEEN:
1684567 ONTARIO INC.
(Hereinafter called the Assignors)
OF THE FIRST PART
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R. WILLIAMSON CONSULTANTS LIMITED, P.I.C.K.S. INC.,
CANADIAN WESTERN TRUST COMPANY, ASSUNTA PAGLIA and GIOVANNI PAGLIA, SHANNA YOUNG and BOB MACNELLY, STEVE STLVANI and JOANNE BROCCA
(Hereinafter called the Assignee)
OF THE SECOND PART
WITNESS:
WHEREAS the Assignors are the owners of the lands and premises municipally known as
704 Phillipston Road, Belleville, Ontario and 704 Phillipston Road, Roslin (PINs 40532- 0032, 40532-0041, 40532-0031, 40532-0033) which lands are subject to a mortgage to the assignee registered on the same date as the within Assignment of Rents.
NOW THEREFORE in consideration of $1.00 and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged by the assignors), the assignors hereby assign to the assignee, his heirs, executors, administrators, successors and assigns, as security for the principal and interest secured by the said mortgage, all rents and other monies (hereinafter called the "rents") now due and payable or hereafter to become due and payable
(a) under every existing and future lease of and agreement to lease the whole or any portion of the lands;
(b) in respect to every existing and future tenancy, use and occupation of and licence in respect of the whole or any portion of the lands, whether or not pursuant to any lease or agreement to lease, and
(c) under every existing and future guarantee of all or any of the obligations of any existing or future tenant, user, occupier or licensee of the whole or any portion of the lands, with full power and authority to demand, collect, sue for, recover, receive and give receipts for the rents and to enforce payment thereof in the name of the assignor, its successors and assigns.
The assignor covenants and agrees that
(a) it has not and will not do or omit to do any act having the effect of terminating, cancelling or accepting surrender of any of the leases or of waiving, re leasing, reducing or abating any rights or remedies of the assignoror obligations of any other party thereunder or in connection therewith;
(b) none of such rights, remedies and obligations are or will be affected by any other agreement, document or understanding or by any reduction, abatement, defence, setoff or counterclaim;
(c) none of the leases or the assignor's rights thereunder, including the right to receive the rents, have been or will be amended, assigned, encumbered, discounted or anticipated;
(d) none of the rents have been or will be paid in advance except those in respect of the last month of the tern, of any leases when so required thereunder;
(c) none of the remainder of the rents has been or will be paid prior to the due date for payment thereof;
(f) there has been no default under any of the leases by any of the parties thereto;
(g) there is no outstanding dispute under any of the leases between the assignor and any other party thereto; and
(h) the assignor will observe and pcrform all of their obligations under each of the leases.
Provided, however, and it is hereby agreed as follows:
(a) the assignor shall be permitted to collect and receive the rents as and when they shall become due and payable according to the terms of each such existing and future lease, agreement to lease, tenancy, use, occupancy, licence and guarantee (herein collectively referred to as "leases") unless and until the assignee shall give notice to the tenant, user, occupier, licensee, or guarantor thereunder requiring it to pay the rents to the assignee; but nothing herein contained shall permit or authorize the assignor to collect any of the rents contrary to clauses (d) and (e) above;
(b) nothing herein contained shall have the effect of making the assignee, his heirs, executors, administrators , successors and assigns, responsible for the collection of the rents under or in respect of the leases or any of them, become or be deemed a mortgagee in possession of the mortgaged premises and the assignee shall not be under any obligation to take any action or exercise any remedy in the collection or recovery of the rents or any of them or to see to or enforce the performance of the obligations and liabilities of any person under or in respect of the leases or any of them; and the assignee shall be liable to account only for such monies as shall actually come into his hands, less proper collection charges and such monies may be applied on account of any indebtedness of the assignor to the assignee.
The assignor hereby agrees to execute such further assurances as may be reasonably required by the assignee from time to lime lo perfect this assignment and, without limiting the generality or the foregoing, whenever any of the leases not now existing is made or arises, the assignor will forthwith give the assignee a specific assignment of the rents thereunder similar to this agreement and will give any other parties thereto a notice of such assignment and will obtain from the m acknowledgements of such notice, such notice and acknowledgements to be similar to the forms heretofore given to the assignor by the assignee.
The assignor further agrees that it will not lease or agree lo lease any part of the lands except al a rent, on terms and conditions, and to Tenants which are not less favourable or desirable to the assignee than those which a prudent landlord would expect to receive for the premises to be leased.
This agreement and everything herein contained shall extend to bind and ensure to the benefit of the heirs, executors, administrators. successors and assigns of each of the parties hereto.
THIS GUARANTEE dated as of the 13th day of August, 2021
| SUSGLOBAL ENERGY CORP. | |
| (the "Guarantor") | |
| IN FAVOUR OF: | R. WILLIAMSON CONSULTANTS LIMITED, P.I.C.K.S. INC., CANADIAN WESTERN TRUST COMPANY, GIOVANNI PAGLIA, ASSUNTA PAGLIA, SHANNA YOUNG, and BOB MACNELLY, STEVE SILVANI and JOANNE BROCCA |
| (the "Lender") | |
WHEREAS pursuant to an Agreement among 1684567 Ontario Inc., as borrower (the "Borrower") and the Lender, as amended, (as same may subsequently be amended, amended and restated, modified, extended, supplemented or replaced from time to time, the "Agreement"), the Lender agreed to provide certain credit facilities to the Borrower;
AND WHEREAS the Borrower executed the security documents securing the obligations of the Borrower under the Agreement (the "Security Documents");
AND WHEREAS the Guarantor has agreed to guarantee payment of all of the obligations of the Borrower to the Lender and in favour of the Lender, as security for the payment and performance of the Secured Obligations (as hereinafter defined);
AND WHEREAS capitalized terms not herein defined shall have the same meaning as ascribed thereto in the Agreement.
NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1.01 GUARANTEE
1.1 Guarantee
For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Guarantor hereby irrevocably and unconditionally guarantees to the Lender forthwith after demand therefor, due and punctual payment of all present and future debts and liabilities, and the performance of all obligations of every nature, absolute or contingent, direct, indirect or otherwise, in any currency, now or at any time and from time to time hereafter due or owing by the Borrower to the Lender, and all such principal, interest, costs, expenses and disbursements and in connection with all costs, expenses and disbursements incurred by the Lender in enforcing the secured or other obligations arising under or in connection with the Agreement and the Security Documents and this Agreement (such obligations as amended, amended and restated, modified, supplemented or renewed from time to time, collectively, the "Secured Obligations"). The Guarantor expressly renounces the benefits of division and discussion. The obligations undertaken by the Guarantor pursuant to this Agreement is hereinafter referred to as the "Guarantee".
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1.2 Guarantee Absolute
The liability of the Guarantor hereunder shall be joint and several, absolute and unconditional and shall not be affected by:
(a) any lack of validity or enforceability of any of the Secured Obligations; any change in the time, manner or place of payment of the Secured Obligations; or the failure on the part of the Borrower to carry out any of the Secured Obligations;
(b) any impossibility, impracticability, frustration of purpose, illegality, force majeure or act of government;
(c) the bankruptcy, winding-up, liquidation, dissolution or insolvency of the Borrower or any party to any agreement to which the Lender, the Borrower or the Guarantor are a party;
(d) any lack or limitation of power, incapacity or disability on the part of the directors, partners or agents thereof or any other irregularity, defect or informality on the part of the Borrower in its obligations to the Lender;
(e) any change or changes in the name, corporate existence or structure of any of the Borrower or Guarantor (whether by way of reconstruction, consolidation, amalgamation, merger, transfer, sale, lease or otherwise); or
(f) any other law, regulation or other circumstance which might otherwise constitute a defence available to, or a discharge of the Borrower or in respect of any or all of the Secured Obligations.
1.3 Limited Recourse
Notwithstanding any other provisions of this Guarantee or any other Security Documents the liability of the Guarantor to the Lender is limited to the maximum amount of $3,300,000.
1.4 Recovery as Principal Debtor
Upon any default under the Agreement, the Lender may treat the Secured Obligations as due and payable and the Lender may forthwith demand payment under this Guarantee on the basis that this Agreement shall be recoverable by the Lender from the Guarantor as principal debtor in respect thereof and shall be paid to the Lender forthwith after demand therefor.
1.02 DEALINGS WITH CREDIT PARTIES AND OTHERS
2.1 No Release
The liability of the Guarantor hereunder shall not be released, discharged, limited or in any way affected by anything done, suffered or permitted by the Lender in connection with any duties or liabilities of the Borrower to the Lender, or any security therefor including any loss of or in respect of any security received by the Lender from the Borrower or any other person. Without limiting the generality of the foregoing and without releasing, discharging, limiting or otherwise affecting in whole or in part the Guarantor's liability hereunder, without obtaining the consent of or giving notice to the Guarantor, the Lender may:
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(a) grant time, renewals, extensions, indulgences, releases and discharges to the Borrower;
(b) take or abstain from taking or enforcing securities or collateral from the Borrower or from perfecting securities or collateral of the Borrower;
(c) accept compromises from the Borrower;
(d) subject to the applicable provisions of the Agreement and the Security Documents, apply all money at any time owing from the Borrower or from any collateral security to such part of the Secured Obligations as the Lender may see fit or change any such application in whole or in part from time to time as the Lender may see fit; for greater certainty, the Lender may at any time and from time to time, to the fullest extent permitted by law, set- off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Lender to or for the credit of the Guarantor against any and all of the liabilities of the Borrower, whether or not the Lender shall have made any demand under the Guarantee. The Lender shall promptly notify such Guarantor after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Lender under this paragraph are in addition to other rights and remedies (including without limitation, other rights of set-off) that the Lender may have; and
(e) otherwise deal with the all other persons and securities as the Lender may see fit, acting reasonably.
2.2 No Exhaustion of Remedies
The Lender shall not be bound or obligated to exhaust its recourse against the Borrower, or any other person or any securities or collateral it may hold or take any other action before being entitled to demand payment from the Guarantor hereunder.
2.3 Accounts Binding upon the Guarantors
Any account settled or stated in writing by or between the Lender and the Borrower shall be accepted by the Guarantor as conclusive evidence, absent manifest mathematical error, that the balance or amount thereby appearing due by the Borrower to the Lender is so due.
2.4 No Set-off
In any claim by the Lender against the Guarantor, the Guarantor may not assert any set-off or counterclaim that the Guarantor may have against the Lender. In particular, any loss of or in respect of any securities received by the Lender from the Borrower or any other person, and the failure to perfect any mortgage, prior claim or security interest of any nature whatsoever, whether occasioned through the fault or negligence of the Lender or otherwise, shall not discharge, limit or lessen the liability of the Guarantor under this Agreement.
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1.03 CONTINUING GUARANTEE
This Guarantee shall be a continuing guarantee of the Secured Obligations and shall apply to and secure all Secured Obligations and shall not be considered as wholly or partially satisfied by the payment or liquidation at any time of any sum of money for the time being due or remaining unpaid to the Lender. The Guarantee shall continue to be effective even if at any time any payment of any of the Secured Obligations is rendered unenforceable or is rescinded or must otherwise be returned by the Lender upon the occurrence of any action or event including the insolvency, bankruptcy or reorganization of the Borrower, all as though such payment had not been made. Any payments so rescinded or recovered from the Lender, whether as a preference, fraudulent transfer or otherwise, shall constitute Secured Obligations for all purposes hereunder.
1.04 RIGHT TO PAYMENTS
Should the Lender receive from the Guarantor one or more payments on account of its liability under the Guarantee, the Guarantor shall not be entitled to claim repayment against the Borrower until the Lender's claims against the Borrower have been paid in full. In the event of the liquidation, winding-up or bankruptcy of the Borrower (whether voluntary or compulsory); or a bulk sale of any of its assets within the meaning of any applicable legislation of any province of Canada, under the Uniform Commercial Code of any state of the United States of America or under any other applicable laws; or should the Borrower make any proposal, composition or scheme of arrangement with its creditors; then, in any of such events the Lender shall have the right to rank for its full claim and receive all dividends or other payments in respect thereof until its claim has been paid in full, and the Guarantor shall remain liable up to the amount guaranteed for any balance which may be owing to the Lender by the Borrower; and in the event of the valuation by the Lender of any security held in respect of the debts of the Borrower, or of the retention by the Lender of such security, such valuation and/or retention shall not, as between the Lender and the Guarantor be considered as a purchase of such security, or as payment or satisfaction or reduction of the liabilities of the Borrower to the Lender, or any part thereof.
1.05 POSTPONEMENT OF CLAIMS AND SUBROGATION RIGHTS
To the fullest extent permitted by law, the Guarantor hereby irrevocably postpones any claim or other rights that it may now or hereafter acquire against the Borrower that arise from the existence, payment, performance or enforcement of the Guarantor's obligations under this Agreement including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy against the Borrower or any collateral securing any obligation of the Borrower, whether or not such claim, remedy or right arises under contract, including, without limitation, the right to take or receive from the Borrower directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, until such time as the Secured Obligations and all amounts payable under this Agreement have been paid in full to the Lender in cash. If any amount shall be paid to the Guarantor in violation of the preceding sentence at any time prior to the full cash payment of the Secured Obligations and all other amounts payable under this Agreement, such amount shall be held by the Guarantor in trust for the benefit of the Lender and shall forthwith be paid to the Lender to be credited and applied to the Secured Obligations, whether matured or unmatured, and all other amounts payable under this Agreement.
All indebtedness, present and future, of the Borrower to the Guarantor is hereby assigned to the Lender and postponed and subordinated to the Secured Obligations without any further act or formality, and all moneys received by the Guarantor in respect thereof shall be received in trust for the Lender and forthwith upon receipt shall be paid over to the Lender, the whole without in any way limiting or lessening the liability of the Guarantor under this Guarantee. This postponement, subordination and assignment is independent of the other provisions of this Agreement and shall survive the extinction of the other provisions of this Agreement.
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Pursuant to the terms of Section 1.3 hereof, the Lender's rights and recourse and the Guarantor's liabilities under this Section 5 shall not be limited in any way and the Lender shall have full recourse against the Guarantor for any breach of, or claim under or in respect of, this Section.
1.06 GENERAL
6.1 Representations and Warranties
The Guarantor represents and warrants, where applicable, as follows: (a) it is duly incorporated and existing under the laws of its jurisdiction of incorporation and has the corporate power and capacity to own its properties and assets and to carry on its business as currently carried on by it; (b) it has the corporate power and capacity to enter into this Guarantee and to do all acts and things as are required or contemplated hereunder to be done, observed and performed by it; (c) it has taken all necessary corporate action to authorize the execution, delivery and performance of this Guarantee; (d) there is no shareholder agreement which restricts, in whole or in part, the powers of the directors of the Guarantor to manage or supervise the business and affairs of the Guarantor; (e) the entering into of this Agreement and the performance by the Guarantor of its obligations hereunder does not and will not contravene, breach or result in any default under: (i) the articles, by-laws, constating documents or other organizational documents of the Guarantor; or (ii) any mortgage, lease, agreement or other legally binding instrument, license, permit or law to which the Guarantor is a party or by which the Guarantor or any of its properties or assets may be bound and will not result in or permit the acceleration of the maturity of any indebtedness, liability or obligation of the Guarantor under any mortgage, lease, agreement or other legally binding instrument of or affecting the Guarantor; (f) no authorization, consent or approval of, of filing with or notice to, any person or governmental body is required in connection with the execution, delivery or performance of this Agreement by the Guarantor; and (g) there is no court, administrative, regulatory or similar proceeding (whether civil, quasi-criminal, or criminal), arbitration or other dispute settlement procedure, investigation or enquiry by any governmental body; or any similar matter or proceeding (collectively "proceedings") against or involving the Guarantor (whether in progress or threatened) which is possibly expected to be determined adversely to the Guarantor which would adversely affect its ability to perform any of the provisions of this Agreement.
6.2 Payment of Secured Obligations, Fees and Costs
Subject to any limitations contained in the Agreement, the Guarantor agrees to pay, within two (2) Business Days of demand therefor, any amounts payable hereunder, including without limitation all out- of-pocket expenses (including the reasonable fees and expenses of the Lender's counsel) in any way relating to the enforcement or protection of the rights of the Lender or any of them hereunder. The liability of the Guarantor shall bear interest from the date of such demand at the rate or rates of interest then applicable to the Secured Obligations under and calculated in the manner provided in the Agreement (including any adjustment to give effect to the provisions of the Interest Act (Canada)).
6.3 Discharge
The Guarantor will not be discharged from any of its obligations hereunder except by a release or discharge signed in writing by the Lender in accordance with the provisions of the Agreement.
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6.4 Notice
Any notice permitted or required to be given hereunder shall be given, in the case of the Lender, in accordance with the relevant provisions of the Agreement and in the case of the Guarantor to its address indicated in the relevant provisions of the Agreement.
6.5 Entire Agreement
This Agreement constitutes the entire agreement between the Guarantor and the Lender with respect to the subject matter hereof and cancels and supersedes any prior understandings and agreements between such parties with respect thereto. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, between the parties except as expressly set forth herein. The Lender shall not be bound by any representations or promises made by the Borrower to the Guarantor and possession of this Agreement by the Lender shall be conclusive evidence against the Guarantor that this Agreement was not delivered in escrow or pursuant to any agreement that it should not be effective until any condition precedent or subsequent has been complied with. This Agreement shall be operative and binding notwithstanding the non-execution thereof by any proposed signatory.
6.6 Amendments and Waivers
No amendment to this Agreement will be valid or binding unless set forth in writing and duly executed by the Guarantor and the Lender. No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the Lender and unless otherwise provided in the written waiver, will be limited to the specific breach waived.
6.7 Severability
Each provision of this Agreement is separate and distinct from the others, such that any decision of a court or tribunal to the effect that any provision hereof is null or unenforceable shall in no way affect the validity of the other provisions hereof or the enforceability thereof. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable Laws, the Guarantor hereby waives any provision of any laws which renders any provision hereof prohibited or unenforceable in any respect.
6.8 Interpretation
The words "this Agreement", "hereof", "hereto", etc. mean the present instrument executed by the Guarantors.
6.9 Additional Rights and Survival
This Agreement is in addition and supplemental to all other guarantees and/or postponement agreements (whether or not in the same form as this instrument) held or which may hereafter be held by the Lender. All covenants, agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement and shall continue in full force and effect so long as any Secured Obligations are outstanding.
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6.10 Governing Law and Attornment Clause
This Agreement shall be construed in accordance with and be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein and for the purpose of legal proceedings, this Agreement shall be deemed to have been made in the said Province and to be performed there, and the Courts of that Province shall have jurisdiction over all disputes which may arise under this Agreement and the Guarantor hereby irrevocably and unconditionally submits to the non-exclusive jurisdiction of such Courts, provided always that nothing herein contained shall prevent the Lender from proceeding at its election against the Guarantor in the Courts of any other Province, country or jurisdiction. The Guarantor hereby irrevocably waives, to the fullest extent possible, the defence of an inconvenient forum and irrevocably agrees to be bound by any final judgement of any court of the Province of Ontario. The Guarantor agrees that a judgement or order of any such court may be enforced in other jurisdictions in any manner provided by law.
6.11 Limitations Act
The Guarantor acknowledges and agrees that the Lender may make a claim or demand payment hereunder notwithstanding any limitation period regarding such claim or demand set forth in the Limitations Act, 2002 (Ontario) or under any other applicable law with similar effect and, to the maximum extent permitted by applicable law, any limitations periods set forth in such act or applicable law are hereby explicitly excluded or, if excluding such limitations periods is not permitted by such act or applicable law, are hereby extended to the maximum limitation period permitted by such act or applicable law. For greater certainty, the Guarantor acknowledges and agrees that this Guarantee is a "business agreement" as defined under Section 22 of the Limitations Act, 2002 (Ontario).
6.12 Benefit of Agreement
This agreement shall extend to and enure to the benefit of the successors and assigns of the Lender and shall be binding upon the Guarantor and its respective successors.
6.13 Further Assurances
The Guarantor shall, at all times and from time to time, do, execute and acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, transfers, assignments, assurances, documents and instruments as the Lender may reasonably require for the better accomplishing and effectuating of this Agreement and the provisions contained herein.
6.14 Executed Copy
The Guarantor acknowledges receipt of a fully executed copy of this agreement.
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IN WITNESS WHEREOF the Guarantor has executed this agreement on the date first hereinabove mentioned.
| SUSGLOBAL ENERGY CORP. (Guarantor) | |
| Marc Hazout, A.S.O. | |
| I have the authority to bind the Corp. |