DELAWARE
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000-55082
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27-3848069
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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Exhibit No.
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Description
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4.1
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Form of Promissory Note
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4.2
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Common Stock Purchase Warrant
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10.1 | Loan Agreement | |
10.2 | General Security Agreement between Yappn Corp. and Toronto Tree Top Holdings Ltd. | |
10.3 | General Security Agreement (Yappn Canada Inc.) | |
10.4 | General Security Agreement (Intertainment Media Inc.) | |
10.5 | Guarantee and Indemnity (Yappn Canada Inc.) | |
10.6 | Guarantee and Indemnity (Intertainment Media Inc.) | |
10.7 | Assignment of Monies and Debt Due Agreement |
YAPPN CORP.
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Dated: April 11, 2014
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By:
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/s/ Craig McCannell | |
Name:
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Craig McCannell
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Title:
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Chief Financial Officer
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Exhibit No.
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Description
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4.1
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Form of Promissory Note
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4.2
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Common Stock Purchase Warrant
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10.1
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Loan Agreement
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10.2
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General Security Agreement between Yappn Corp. and Toronto Tree Top Holdings Ltd.
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10.3
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General Security Agreement (Yappn Canada Inc.)
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10.4
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General Security Agreement (Intertainment Media Inc.)
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10.5
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Guarantee and Indemnity (Yappn Canada Inc.)
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10.6
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Guarantee and Indemnity (Intertainment Media Inc.)
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10.7
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Assignment of Monies and Debt Due Agreement
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AMOUNT: US$3,000,000.00 | DUE: ON DEMAND |
YAPPN CORP.
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Per:
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/s/ David Lucatch | ||
Name: David Lucatch – A. S. O.
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YAPPN CORP.
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By:
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/s/ David Lucatch | |
Its:
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David Lucatch, CEO |
Dated: __________________________
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(Signature must conform to name of holder as specified on the face of the Warrant) |
Transferees
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Address
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Number of
Warrants
Transferred
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Dated: __________________________
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(Signature must conform to name of holder as specified on the face of the Warrant) |
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(a)
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Interest, at 12% shall be payable on the principal amounts outstanding from time to time pursuant to the Loan and shall be calculated from and after the date of advance, as well after as before maturity, default and/or judgement, with interest on overdue interest calculated at the same rate and in the same manner as provided in this Section until paid. Interest payments shall be due on the last day of each month.
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4.3
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Term
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4.4
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Renewal
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(a)
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The term may be renewed for 3 one year terms with the consent of both parties hereto and provided that the Borrower is not then in default;
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(b)
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Either party may terminate this Agreement upon notice in writing to the other party 60 days prior to the expiry of the initial term or any renewal term.
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4.5
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Repayment
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(a)
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The following fees shall be payable by the Borrower to the Lender:
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(i)
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an arrangement fee of $60,000.00 US payable from the first disbursement of the Loan; and
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(ii)
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a draw down fee of 1% shall be payable on each draw down of the Loan.
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5.2
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Warrants
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(a)
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As a material inducement to the Lender entering into this Agreement and making the Loan to the Borrower, the Borrower covenants and agrees to provide the Lender with up to 8,000,000 warrants to acquire shares in the capital of the Borrower at $0.10 US per share for a period of 5 years from the date each warrant is issued to the Lender.
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(i)
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2,000,000 warrants shall be issued with the first draw down of $200,000.00 of the Loan;
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(ii)
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1,000,000 warrants shall be issued with each subsequent $100,000.00 draw down on pursuant to the Loan.
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(b)
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The warrants shall be issued in accordance with all applicable securities laws and in form satisfactory to the Lender and its solicitors.
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(a)
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the Note;
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(b)
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a general security agreement constituting a valid first security interest and first charge on all of the assets and undertaking of the Borrower of whatsoever nature or kind;
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(c)
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a general assignment of accounts receivable;
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(d)
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an unlimited guarantee and postponement of claim from each of Intertainment Media Inc. and Yappn Canada Inc. supported by general security agreements constituting a valid first security interest and first charge on all of the assets and undertakings of Yappn Canada Inc. and a second security interest on all of the assets and undertaking of Intertainment Media Inc., subject only to debentures not to exceed $3,215,000;
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(a)
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it has full power, authority and capacity to borrow in the manner and on the terms and conditions set out in this Agreement and in the Term Sheet and it has full power, authority and capacity to execute and deliver this Agreement, the Note and the Security;
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(b)
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all necessary action of the directors and shareholders of the Borrower has been taken to authorize the execution and delivery of this Agreement, the Note and the Security, and to observe and perform the provisions of same in accordance with their respective terms;
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(c)
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this Agreement, the Note and the Security have been duly authorized, executed and delivered by and the Borrower has received valuable consideration from the Lender with respect thereto;
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(d)
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the Borrower is not in nor will the execution of this Agreement, the Note or the Security constitute a violation of any term of its constating documents or any term of any agreement, mortgage, lease, franchise, licence, judgment, decree, order, statute, rule, regulation or by-law which violation will materially adversely affect or involve a reasonable possibility of a material adverse change in the condition, business, assets or operations of the Borrower, financial or otherwise, or the ability of the Borrower to enter into and perform its obligations under this Agreement, the Note and the Security;
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(e)
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it is a corporation incorporated and organized and is validly subsisting under the laws of the State of Delaware, is up to date in all filings required under the legislation of that State of Delaware. The Borrower is a reporting issuer in the United States. Its shares are listed for trading on the Bullets Board of NASDQ. The Borrower is up to date with all of its filings with all securities regulatory authorities in the United States and is not subject to any cease trading order;
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(f)
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there are no actions, suits or proceedings to its actual knowledge, pending against or involving it at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or before any arbitrator of any kind; and
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(g)
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all information furnished by it to the Lender to induce the Lender to enter into this Agreement is true and accurate in all material respects and there is no fact known to the Borrower and not disclosed to the Lender which materially adversely affects or in the future may materially adversely affect the properties, business, prospects or financial condition of the Borrower or its ability to perform its obligations under this Agreement, the Note and the Security.
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Duly and punctually pay to the Lender all amounts payable by it hereunder or under the Term Sheet as and when the same shall become due;
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Pay and discharge, before the same shall become delinquent, all taxes, assessments and governmental charges or levies imposed upon it or upon the Charged Assets, income or profit and any and all Governmental claims imposed upon it;
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Maintain such insurance with responsible and reputable insurance companies covering such risks, in such amounts and on such terms as are commonly insured against in the Province of Ontario to the full insurable value thereof as the Lender shall from time to time reasonably require and pay when due, all premiums required therefor. The Borrower shall on request promptly furnish or cause to be furnished to the Lender evidence of the maintenance of all such insurance satisfactory to the Lender and deliver to the Lender certified copies of the insurance policies required hereunder;
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Maintain its Status as a reporting issuer in the United States and make all prescribed filing with applicable securities regulatory authority in the United States,
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Preserve and maintain its corporate existence and rights;
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Comply, and cause its operations upon all lands to comply, in all material respects, with all applicable laws, regulations and orders.
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Keep proper books of record and account in which full and correct entries shall be made of all financial transactions, assets and business of the Borrower in accordance with GAAP;
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Furnish to the Lender:
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(i)
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annually, as soon as available and in any event within 90 days after the end of each fiscal year annual financial statements of the Borrower and each corporate guarantor for such fiscal year, consisting of balance sheets, statements of income and retained earnings and cash flow setting forth the corresponding figures of the previous fiscal year in comparative form, together with the unqualified opinion of the auditors thereon; and
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(ii)
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immediately upon demand by the Lender such other information respecting the business and affairs, financial or otherwise of the Borrower and each corporate guarantor, or the Charged Property, as the Lender requires including, without in any way limiting the generality of the foregoing:
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(A)
bank statements;
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(B)
bank reconciliations;
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(C)
trial balances;
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(D)
cheque registers and
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(E)
of the Borrower’s cancelled cheques.
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Indemnify and hold the Lender harmless from and against any and all loss, fine, penalty, liability, damages and expense, including legal fees, suffered or incurred by the Lender, as a result of the disposal, storage, release or threat of release on any property of the Borrower of any substance regulated under any environmental law;
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(a)
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the non-payment of any principal, interest or other amount payable hereunder or pursuant to the Term Sheet when due; or
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(b)
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the commencement of proceedings for the dissolution, liquidation or winding-up of the Borrower or for the suspension of the operations of the Borrower, unless, in the opinion of the Lender, acting reasonably, the same is being actively and diligently contested by the Borrower in good faith by appropriate and timely proceedings; or
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(c)
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if the Borrower ceases carrying on its business or makes a bulk sale of substantially all of its assets or if the Borrower is adjudged or declared bankrupt or insolvent or makes an assignment for the benefit of creditors, petitions or applies or allows the petition or application to any tribunal for the appointment of a receiver or trustee for it, or commences any proceedings relating to it under any reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction whether now or hereafter in effect, or by any act indicates its consent to, approval of, or acquiescence in, any such proceeding commenced against it, or suffers the appointment of any such receiver or trustee; or
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(d)
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if any representation or warranty made in this Agreement or in any instrument, certificate or letter furnished pursuant hereto by the Borrower or in any information furnished in writing to the Lender by the Borrower in contemplation of this Agreement is incorrect or misleading in any material respect; or
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(e)
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if a writ, execution or attachment or similar process is issued or levied against all or substantially all of the property of the Borrower and such writ, execution, attachment or similar process is not released, bonded, satisfied, discharged, vacated or stayed within 10 days after the Borrower becomes aware of its entry, commencement or levy; or
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(f)
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if an encumbrancer or lien holder takes possession of substantially all of the property of the Borrower, including without limitation the Charged Property or a part thereof, or if execution or other similar process is enforced against such property and remains unsatisfied for such period as would permit such property to be sold thereunder, less 5 Business Days;
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(g)
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if, in the opinion of the Lender, there is a material adverse change in the business, affairs or assets of the Borrower. A material adverse change will include, without limitation, significant or unexplained variances from financial projections submitted to the Lender by the Borrower from time to time; or
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(h)
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the events of default set forth in paragraphs 9.1 (a) to (g) shall apply mutatis, mutandis to the corporate guarantors, except that the disposition by Intertainment Media Inc. of its subsidiary, Ortbo Inc., by sale, exclusive licence or otherwise, with the consent of the Lender, not to be unreasonably withheld, shall not be considered an event of default hereunder.
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(a)
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For greater certainty, it is expressly understood and agreed that the rights and remedies of the Lender under this Agreement, the Note and the Security are cumulative and are in addition to and not in substitution for any rights or remedies provided by law.
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(b)
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Further it is acknowledged that the Lender will have on Default the right to appoint a receiver and/or receiver and manager for the Borrower and shall be entitled to all of the rights and remedies of a Secured Party pursuant to the
Personal Property Security Act
(Ontario) and under the applicable provisions of the Uniform Commercial Code.
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(c)
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At any time, after default pursuant to this Agreement, which is not cured within 10 days following receipt or deemed receipt of notice of default the Lender may appoint a monitor for the Borrower at the Borrower’s sole cost and expense and for such purposes as the Lender may reasonably require.
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YAPPN CORP.
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Per:
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/s/ David Lucatch | |
Name: David Lucatch – A. S. O.
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TORONTO TREE TOP HOLDINGS LTD.
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Per:
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/s/ Simon Yakubowicz | |
INTERTAINMENT MEDIA INC.
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Per:
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/s/ David Lucatch | |
Name: David Lucatch – A. S. O.
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YAPPN CANADA INC.
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Per:
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/s/ David Lucatch | |
Name: David Lucatch – A. S. O.
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(a)
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Accounts (including Health-Care-Insurance Receivables, if any);
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(b)
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Chattel Paper;
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(c)
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Instruments (including Promissory Notes);
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(d)
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Documents;
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(e)
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General Intangibles (including Payment Intangibles and Software, patents, trademarks, tradestyles, copyrights, and all other intellectual property rights, including all applications, registration, and licenses therefor, and all goodwill of the business connected therewith or represented thereby);
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(f)
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Letter-of-Credit Rights;
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(g)
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Supporting Obligations;
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(h)
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Deposit Accounts;
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(i)
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Investment Property (including certificated and uncertificated Securities, Securities Accounts, Security Entitlements, Commodity Accounts, and Commodity Contracts);
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(j)
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Inventory;
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(k)
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Equipment (including all software, whether or not the same constitutes embedded software, used in the operation thereof);
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(l)
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Fixtures;
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(m)
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Commercial Tort Claims (as described on Schedule F hereto or on one or more supplements to this Agreement);
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(n)
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Rights to merchandise and other Goods (including rights to returned or repossessed Goods and rights of stoppage in transit) which is represented by, arises from, or relates to any of the foregoing;
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(o)
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Monies, personal property, and interests in personal property of the Debtor of any kind or description now held by the Secured Party or at any time hereafter transferred or delivered to, or coming into the possession, custody, or control of, the Secured Party, or any agent or affiliate of the Secured Party, whether expressly as collateral security or for any other purpose (whether for safekeeping, custody, collection or otherwise), and all dividends and distributions on or other rights in connection with any such property;
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(p)
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Supporting evidence and documents relating to any of the above-described property, including, without limitation, computer programs, disks, tapes and related electronic data processing media, and all rights of the Debtor to retrieve the same from third parties, written applications, credit information, account cards, payment records, correspondence, delivery and installation certificates, invoice copies, delivery receipts, notes, and other evidences of indebtedness, insurance certificates and the like, together with all books of account, ledgers, and cabinets in which the same are reflected or maintained;
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(q)
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Accessions and additions to, and substitutions and replacements of, any and all of the foregoing; and
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(r)
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Proceeds and products of the foregoing, and all insurance of the foregoing and proceeds thereof;
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to the Debtor at: | 1001 Avenue of the Americas, 11 th Floor | ||
New York, New York 10018 | |||
Attention: President |
To the Secured Party at: | 73 Richmond Street West, Suite PH3 | ||
Toronto, Ontario M5H 1Z4 | |||
Attention: Phillip Vitug |
YAPPN CORP.
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By:
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/s/ David Lucatch | |
Name: David Lucatch – A. S. O.
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TORONTO TREE TOP HOLDINGS LTD.
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By:
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/s/ Simon Yakubowicz | |
Name: Simon Yakubowicz – A. S. O.
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Item1.
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Places of Business (including Debtor’s chief executive office and principal place of business):
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Item2.
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Permitted Collateral Locations:
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A.
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Prior Legal Names
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None
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B.
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Trade Names
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A.
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Investment Property (other than Subsidiary Interests)
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B.
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Subsidiary Interests
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C.
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Deposits
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YAPPN CORP.
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By:
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/s/ David Lucatch | |
Name: David Lucatch – A. S. O.
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TO:
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Toronto Tree Top Holdings Ltd. (the “
Lender
”)
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DATE:
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April 7, 2014
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1.
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INTERPRETATION
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1.1
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Capitalized Terms
In this Agreement, except where the context otherwise requires, capitalized terms that are used and not otherwise defined have the meanings defined in the Credit Agreement (as defined below), and:
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(a)
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“
Collateral
” means all present and after-acquired undertaking, property and assets of the Obligor, except those expressly excluded in this definition, including all present and future right, title, interest and benefit of the Obligor in all property of the following kinds:
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(i)
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all goods comprising the inventory of the Obligor, including goods held for sale or lease or that have been leased or consigned to or by the Obligor or that have been furnished or are to be furnished under a contract of service or that are raw materials, work in process or materials used or consumed in a business or profession or that are finished goods;
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(ii)
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timber, whether cut or to be cut, timber licenses, oil, gas, other hydrocarbons and minerals, whether extracted or to be extracted, animals and their young and unborn young, and crops, whether growing or harvested;
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(iii)
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all other goods, including furniture, fixtures, equipment, machinery, plant, tools and vehicles;
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(iv)
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all chattel paper;
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(v)
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all money;
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(vi)
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all warehouse receipts, bills of lading and other documents of title, whether negotiable or not;
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(vii)
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all instruments, including bills, notes, cheques, letters of credit and advices of credit;
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(viii)
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all investment property, including shares, stock, warrants, bonds, debentures, debenture stock and other securities (in each case whether evidenced by a security certificate or an uncertificated security) and financial assets, security entitlements, securities accounts, futures contracts and futures accounts;
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(ix)
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all other tangible personal property;
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(x)
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all accounts, including deposit accounts in banks, credit unions, trust companies and similar institutions, rents, debts, demands and chooses in action that are due, owing or accruing due to the Obligor, and all claims of any kind that the Obligor has, including claims against the Crown and claims under insurance policies;
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(xi)
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all other intangibles including contracts, agreements, clearing house options, permits, licences, consents, approvals, authorizations, orders, judgments, certificates, rulings, insurance policies, agricultural and other quotas, subsidies, franchises, immunities, privileges and benefits and all goodwill, patents, trade marks, trade names, trade secrets, inventions, processes copyrights, applications for intellectual property rights and other industrial or intellectual property;
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(xii)
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with respect to the property described in items (i) to (xi) inclusive, all books, accounts, invoices, letters, papers, documents, disks and other records in any form, electronic or otherwise, evidencing or relating to that property and all contracts, investment property, instruments and other rights and benefits in respect of that property;
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(xiii)
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with respect to the property described in items (i) to (xii) inclusive, all parts, components, renewals, substitutions and replacements of that property and all attachments, accessories and increases, additions and accessions to that property; and
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(xiv)
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with respect to the property described in items (i) to (xiii) inclusive, all proceeds from that property, including property in any form derived directly or indirectly from any dealing with that property or proceeds from the property, and any insurance or other payment as indemnity or compensation for loss of or damage to the property or any right to payment, and any payment made in total or partial discharge or redemption of an intangible, chattel paper, instrument or investment property;
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(b)
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“
Credit Agreement
” means the credit agreement dated as of the date hereof entered into by the Obligor, as guarantor, Yappn Corp., as borrower, and the Lender, as lender, as amended, supplemented, restated, modified or replaced from time to time.
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(c)
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“
Event of Default
” means the occurrence of (i) an Event of Default as defined in the Credit Agreement, (ii) a “default”, “event of default” or similar circumstance identified in the Credit Agreement that entitles the Lender to enforce its rights thereunder, (iii) the failure of the Obligor to pay any of the Obligations when due, or (iv) any demand for payment validly made by the Lender pursuant to the Credit Agreement that is not met in accordance with the terms of the demand or within any applicable grace period.
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(d)
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“
Obligations
” means all debts, liabilities and obligations of the Obligor to the Lender under or in connection with the Credit Agreement, whether present or future, direct or indirect, absolute or contingent, matured or not, at any time owing or remaining unpaid by the Obligor to the Lender in any currency, whether arising from dealings between the Lender and the Obligor or from other dealings or proceedings by which the Lender may be or become in any manner whatever a creditor of the Obligor, and wherever incurred, and whether incurred by the Obligor alone or with another or others and whether as principal or surety (including obligations under or in connection with any guarantee or indemnity given by the Obligor), and all interest, fees, commissions and legal and other costs, charges and expenses owing or remaining unpaid by the Obligor to the Lender in any currency.
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(e)
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“
PPSA
” means the
Personal Property Security Act
(Ontario).
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1.2
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PPSA Definitions
In this Agreement, except where the context otherwise requires, the words “accessions”, “account”, “account debtor”, “certificated security”, “chattel paper”, “clearing house option”, “consumer goods”, “control”, “crops”, “document of title”, “equipment”, “financial asset”, “fixtures”, “futures account”, “futures contract”, “futures intermediary”, “goods”, “instrument”, “intangible”, “inventory”, “investment property”, “money”, “option”, “proceeds”, “receiver”, “securities account”, “securities intermediary”, “security”, “security certificate”, “security entitlement” and “uncertificated security” shall have the same meanings as their defined meanings where they are defined in the PPSA.
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1.3
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No
Contra Proferentem
This Agreement has been negotiated by the Obligor and the Lender with the benefit of legal representation, and any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply to the construction or interpretation of this Agreement.
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1.4
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Conflict With Credit Agreement
If there is any conflict or inconsistency between the terms of the Credit Agreement and the terms of this Agreement, the provisions of the Credit Agreement shall govern to the extent necessary to remove the conflict or inconsistency.
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1.5
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Other Interpretation Rules
In this Agreement:
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(a)
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The division into Sections and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement.
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(b)
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Unless otherwise specified or the context otherwise requires, (i) “including” or “includes” means “including (or includes) but is not limited to” and shall not be construed to limit any general statement preceding it to the specific or similar items or matters immediately following it, (ii) a reference to any legislation, statutory instrument or regulation or a section of it is a reference to the legislation, statutory instrument, regulation or section as amended, restated and re-enacted from time to time, and (iii) words in the singular include the plural and vice-versa and words in one gender include all genders.
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(c)
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Unless otherwise specified or the context otherwise requires, any reference in this Agreement to payment of the Obligations includes performance of the Obligations.
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2.
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GRANT OF SECURITY, ETC.
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2.1
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Grant of Security
As security for payment and performance of the Obligations, the Obligor mortgages, charges, assigns, transfers and pledges the Collateral to the Lender as a fixed and specific mortgage and charge, and grants the Lender a security interest in the Collateral. Without limiting the preceding part of this Section, a security interest is taken in all of the Obligor’s present and after acquired personal property.
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2.2
|
Last Day of Lease
As the Collateral does not include the last day of the term of any lease or any agreement to lease held by the Obligor now or in the future, should the liens created by this Agreement become enforceable the Obligor shall hold the last day in trust for the Lender and shall assign it to any person acquiring that term or the part of the term that is mortgaged and charged in the course of any enforcement of the liens or any realization of the Collateral. Alternately, the Lender may assign the last day as attorney of the Obligor or may appoint any person acquiring the term or any other person or persons as a new trustee or trustees of the last day, free of any obligation regarding the last day.
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2.3
|
Restricted Property
The Collateral shall not include any lease, agreement, contractual right, franchise, licence or approval, other than an account or chattel paper (collectively, “
Restricted Property
”) held by the Obligor now or in the future if the liens created by this Agreement would otherwise result in a breach, forfeiture or termination of the Restricted Property unless any necessary consent or waiver is obtained. The Obligor shall, on request by the Lender, promptly use all commercially reasonable efforts to seek any necessary consent or waiver to have the Restricted Property form part of the Collateral and to any disposition of the Restricted Property upon enforcement of this Agreement. If a consent or waiver is obtained, the applicable Restricted Property shall form part of the Collateral without any further action. If any consent or waiver is not obtained, and if the liens created by this Agreement become enforceable, the Obligor shall hold any Restricted Property for which a consent or waiver has not been obtained and its benefits in trust for the Lender, and shall perform its obligations and exercise and enforce its rights under that Restricted Property, including rights of disposition, at the direction of the Lender.
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2.4
|
Attachment
The Obligor agrees that the Lender has given value and that the liens created by this Agreement are intended to attach (a) with respect to Collateral that is now in existence, upon execution of this Agreement, and (b) with respect to Collateral that comes into existence in the future, upon the Obligor acquiring rights in the Collateral or the power to transfer rights in the Collateral to the Lender. In each case, the parties do not intend to postpone the attachment of any lien created by this Agreement.
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2.5
|
Continuing Agreement
The liens created by this Agreement are continuing, to secure a current or running account, and will extend to the ultimate balance of the Obligations, regardless of any intermediate payment or discharge of the Obligations in whole or in part. Without limiting the foregoing, the Obligations may include advances and re-advances under revolving credit facilities, which permit borrowing, repayment of all or part of the amount borrowed and re-borrowing of amounts previously paid.
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2.6
|
In Addition to Other Rights; No Marshalling
This Agreement is in addition to and is not in any way prejudiced by or merged with any other lien now or subsequently held by the Lender in respect of any Obligations. The Lender shall be under no obligation to marshal in favour of the Obligor any other lien or any money or other property that the Lender may be entitled to receive or may have a claim upon.
|
2.7
|
Liabilities Unconditional
The liabilities of the Obligor under this Agreement are absolute and unconditional, and will not be affected by any act, omission, matter or thing that, but for this Section, would reduce, release or prejudice any of its liabilities under this Agreement, whether or not known to it or the Lender or consented to by it or the Lender.
|
2.8
|
Merger of Obligor
If the Obligor amalgamates or merges with one or more other entities, the Obligations and the liens created by this Agreement shall continue as to the Obligations and the undertaking, property and assets of the Obligor at the time of amalgamation or merger, and shall extend to the Obligations and the present and future undertaking, property and assets of the amalgamated or merged entity, and the term Obligor shall extend to the amalgamated or merged entity, all as if the amalgamated or merged entity had executed this Agreement as the Obligor.
|
2.9
|
Limitation Periods
To the extent that any limitation period applies to any claim for payment of the Obligations or remedy for enforcement of the Obligations, the Obligor agrees that:
|
|
(a)
|
any limitation period is expressly excluded and waived entirely if permitted by applicable law;
|
|
(b)
|
if a complete exclusion and waiver of any limitation period is not permitted by applicable law, any limitation period is extended to the maximum length permitted by applicable law;
|
|
(c)
|
any applicable limitation period shall not begin before an express demand for payment of the Obligations is made in writing by the Lender to the Obligor;
|
|
(d)
|
any applicable limitation period shall begin afresh upon any payment or other acknowledgment of the Obligations by the Obligor; and
|
|
(e)
|
this Agreement is a “business agreement” as defined in the
Limitations Act, 2002
(Ontario) if that Act applies.
|
3.
|
RIGHTS AND OBLIGATIONS OF THE OBLIGOR
|
3.1
|
Operations and Insurance
The Obligor shall diligently maintain and operate the Collateral so as to preserve the Collateral and the income from the Collateral and shall comply with all requirements of any governmental authority and all agreements relating to any of the Collateral and all other conditions on which the Collateral is held. The Obligor shall also keep the Collateral insured against loss, damage and other risks as the Lender may reasonably require, shall maintain its insurance with loss, if any, payable to the Lender as first loss payee and shall provide the Lender with satisfactory evidence of the insurance maintained.
|
3.2
|
Restrictions on Liens and Dispositions
The Obligor shall not create, assume, incur or permit the existence of any lien on the Collateral except as approved by the Lender, nor shall the Obligor sell, lease or otherwise dispose of the Collateral, or permit such a disposition to occur, except as expressly permitted in the Credit Agreement.
|
3.3
|
Possession and Control of Collateral
The Obligor shall, on request by the Lender from time to time, deliver to the Lender possession of all chattel paper, instruments and negotiable documents of title. The Obligor shall also take whatever steps the Lender requires from time to time to enable the Lender to obtain control of any investment property forming part of the Collateral, including (a) arranging for any securities intermediary, futures intermediary or issuer of uncertificated securities to enter into an agreement satisfactory to the Lender to enable the Lender to obtain control, (b) delivering any certificated security to the Lender with any necessary endorsement and (c) having any security registered in the name of the Lender or its nominee. The Lender is not obligated to keep any Collateral separate or identifiable or to take steps to preserve rights relating to Collateral against prior parties or other persons. The Lender shall have no duty with respect to any Collateral delivered to it, other than to use the same degree of care in the safe custody of the Collateral delivered to it that it uses with respect to similar property that it owns of similar value. Without limiting the foregoing, the Lender may lodge all instruments, chattel paper, investment property or other Collateral with any bank or trust company to be held in safekeeping on behalf of the Lender (without incurring any liability for any act or omission of the bank or trust company), or may hold Collateral itself. The Obligor shall reimburse the Lender on demand for all expenses incurred by the Lender in connection with safekeeping with interest from the date the expenses are incurred until paid at the highest rate of interest applicable to the Obligations. The expenses and interest shall form part of the Obligations.
|
3.4
|
Other Assurances; Power of Attorney
On request by the Lender, the Obligor shall (a) provide the Lender with details of all goods to which provisions of the PPSA or regulations or orders under the PPSA regarding serial numbers apply, (b) mark or take other steps to identify the Collateral as being subject to the liens created by this Agreement, and (c) execute, acknowledge and deliver all financing statements, certificates, further assignments, documents, transfers, instruments, security documents, acknowledgments and assurances and do all further acts and things as the Lender may consider necessary or desirable to give effect to the intent of this Agreement (including providing the Lender with a fixed and specific mortgage and charge and a perfected security interest in all freehold and leasehold real property, all patents, trademarks and other intellectual property and all aircraft, ships and railway rolling stock in which the Obligor now or in the future holds an interest), or for the collection, disposition, realization or enforcement of the Collateral or the liens created by this Agreement. The Obligor constitutes and appoints the Lender its true and lawful attorney, with full power of substitution, to do any of the foregoing or any other things that the Obligor has agreed to do in this Agreement, whenever and wherever the Lender may consider it to be necessary or desirable, and to use the Obligor’s name in the exercise of the Lender’s rights under this Agreement. This power of attorney is coupled with an interest and is irrevocable by the Obligor.
|
3.5
|
Composite Agreement
This Agreement is a composite mortgage and security agreement covering Collateral located in various provinces and territories of Canada and in other jurisdictions and, as to any Collateral located in a particular jurisdiction, this Agreement shall be a separate mortgage and security agreement enforceable against the Obligor without regard to the application of this Agreement to Collateral located in other jurisdictions. All provisions of this Agreement shall apply separately to the Collateral located in each separate jurisdiction with the same effect as if a separate mortgage and security agreement with respect to that Collateral had been executed and delivered by the Obligor. If requested by the Lender, the Debtor shall execute, deliver and register, at its expense, a separate mortgage and security agreement covering the Collateral located in any particular jurisdiction or jurisdictions. The separate mortgage and security agreement shall be in the form of this Agreement except for modifications required by the fact that it relates only to the Collateral located in the particular jurisdiction or jurisdictions and other modifications that the Lender considers necessary or desirable in the circumstances.
|
3.6
|
Restriction on Change of Name
The Obligor shall not change its name without providing the Lender with 30 days advance written notice and promptly taking other steps, if any, as the Lender requests to ensure that the position of the Lender is not adversely affected by the change in name.
|
3.7
|
Restriction on Change of Office Location
The Obligor shall not permit its chief executive office to be located out of the Province of Ontario
(the “
Specified Location
”) without providing the Lender with 30 days advance written notice and promptly taking other steps, if any, as the Lender requests to ensure that the position of the Lender is not adversely affected by the change of location.
|
3.8
|
Restriction on Change of Property Location
The Obligor shall not permit any of its tangible personal property to be located out of the Specified Location (other than (a) inventory in transit and (b) goods of a type normally used in more than one jurisdiction that are equipment or inventory leased or held for lease by the Obligor to others) without providing the Lender with 30 days advance written notice and promptly taking other steps, if any, as the Lender requests to ensure that the position of the Lender is not adversely affected by the change of location.
|
3.9
|
Use of Collateral; Inspection
Until the occurrence of an Event of Default, the Obligor may use the Collateral in any lawful manner consistent with the provisions of this Agreement and the Credit Agreement. The Obligor shall at all reasonable times and from time to time on reasonable notice, permit representatives of the Lender to inspect any of the Collateral and to examine and take extracts from its financial books, accounts and records, including accounts and records stored in computer data banks and computer software systems, and to discuss its financial condition with its senior officers and (in the presence of such of its representatives as it may designate) its auditors, the reasonable expense of all of which shall be paid by the Obligor.
|
3.10
|
Lender May Perform Obligor’s Duties
If the Obligor fails to perform any of its duties under this Agreement, the Lender may, but shall not be obligated to, perform any or all of those duties, without waiving any rights to enforce this Agreement. The Obligor shall pay the Lender, immediately on written demand, an amount equal to the costs, fees and expenses incurred by the Lender in doing so plus interest from the date the costs, fees and expenses are incurred until paid at the highest rate of interest applicable to the Obligations. The costs, fees, expenses and interest shall be included in the Obligations under this Agreement.
|
3.11
|
Lender Not Liable for Obligor’s Agreements
Nothing in this Agreement shall make the Lender liable to observe or perform any term of any agreement to which the Obligor is a party or by which it or the Collateral is bound, or make the Lender a mortgagee in possession. The Obligor shall indemnify the Lender and save it harmless from any claim arising from any such agreement.
|
3.12
|
Release of Liens
If the Obligor has indefeasibly paid the Obligations in full in cash and otherwise performed all of the terms of the Credit Agreement, and if all obligations of the Lender to extend credit under the Credit Agreement has been cancelled, then the Lender shall, at the request and expense of the Obligor, release the liens created by this Agreement and execute and deliver whatever documents are reasonably required to do so.
|
4.
|
RIGHTS AND OBLIGATIONS ON DEFAULT
|
4.1
|
Application of Article
The provisions of this Article 4 apply on the occurrence of an Event of Default that is continuing.
|
4.2
|
Termination of Further Credit and Acceleration of Obligations
The Lender shall be under no obligation to make further advances or otherwise extend further credit and the Lender may declare that the Obligations are immediately due and payable in full, but if the Obligor becomes bankrupt (voluntarily or involuntarily), or institutes (or has instituted against it) any proceeding seeking liquidation, rearrangement, relief of debtors or creditors or the appointment of a receiver or trustee over any material part of its undertaking, property and assets or any analogous proceeding in any relevant jurisdiction, then without prejudice to the other rights of the Lender as a result of any of those events, without notice or action of any kind by the Lender and without presentment, demand or protest of any nature or kind, the Lender’s obligation to make advances or otherwise extend credit shall immediately terminate and the Obligations shall become immediately due and payable. Upon the Obligations becoming due and payable, the Lender may enforce payment of the Obligations and the Lender shall have the rights and remedies of a secured party under the PPSA and other applicable law together with those rights and remedies provided by this Agreement or otherwise provided by applicable law.
|
4.3
|
Rights of Lender
The Lender may (a) require the Obligor to assemble the Collateral and deliver or make the Collateral available to the Lender at a reasonably convenient place designated by the Lender, (b) enter on any premises of the Obligor or any other place where Collateral may be located, (c) take possession of the Collateral by any method permitted by law, (d) render any equipment unusable without removing it from the Obligor’s premises, (e) use the Collateral in the manner and to the extent that the Lender may consider appropriate and (f) hold, insure, repair, process, maintain, protect and preserve the Collateral and prepare it for disposition. The Lender is not, however, required to insure the Collateral, and the risk of any loss of or damage to the Collateral shall be borne by the Obligor.
|
4.4
|
Appointment of Monitor
The Lender may from time to time appoint any person (the “
Monitor
”) to investigate any or all of the Collateral, the Obligor and the Obligor’s business and affairs and report to the Lender. The Obligor shall co-operate fully with the Monitor and give the Monitor full access to its facilities, property, records, creditors, customers, contractors, officers, directors, employees, auditors, legal counsel and agents. The Monitor shall not participate in the management of the Obligor’s business or affairs and shall have no responsibility, nor shall it incur any liability, in respect of the Collateral, the Obligor or the Obligor’s business or affairs. The Monitor shall act solely on behalf of the Lender and shall have no contractual relationship with the Obligor as a consultant or otherwise, nor shall the Obligor be entitled to receive any report by the Monitor. The appointment of the Monitor shall not be regarded as an act of enforcement of the liens created by this Agreement. All costs incurred in connection with the appointment of the Monitor and the performance by the Monitor of its activities as such, including legal fees on a full indemnity (sometimes called solicitor and own client) basis shall be payable by the Obligor to the Lender immediately on demand, shall bear interest from the date they are incurred until paid at the highest rate of interest applicable to the Obligations and shall be included in the Obligations.
|
4.5
|
Proceeds
The Lender may take charge of all proceeds of the Collateral and may hold them as additional security for the Obligations. The Lender may give notice to any or all account debtors of the Obligor and to any or all persons liable to the Obligor under an instrument to direct all payments or other proceeds relating to the Collateral to the Lender and any payments or other proceeds of the Collateral received by the Obligor from account debtors or from any persons liable to the Obligor under an instrument, after notice is given by the Lender, shall be held by the Obligor in trust for the Lender and immediately paid over to the Lender. The Lender shall not, however, be required to collect any proceeds of the Collateral. The Lender may also enforce any rights of the Obligor in respect of the Collateral by any manner permitted by law.
|
4.6
|
Rights re Investment Property Etc.
The Lender may have any instruments or investment property registered in its name or in the name of its nominee and shall be entitled but not required to exercise voting and other rights that the holder of that Collateral may at any time have; but the Lender shall not be responsible for any loss occasioned by the exercise of those rights or by failure to exercise them. The Lender may also enforce its rights under any agreement with any securities intermediary, futures intermediary or issuer of uncertificated securities.
|
4.7
|
Notice of Disposition
If required to do so by applicable law, the Lender shall give the Obligor written notice of any intended disposition of the Collateral in accordance with the Credit Agreement or by any other method required or permitted by applicable law. The Obligor waives giving of notice to the maximum extent permitted by applicable law.
|
4.8
|
Statutory Waivers
To the maximum extent permitted by law, the Obligor waives all of the rights, benefits and protections given by any present or future statute that imposes limits on the rights, remedies or powers of the Lender or on the methods of realization of security, including any seize or sue or anti-deficiency statute or any similar provisions of any other statute. In particular, the Obligor waives all rights, benefits and protections given by sections 47 and 50 of the
Law of Property Act
(Alberta) insofar as they extend to or relate to any Collateral. The
Limitation of Civil Rights Act
(Saskatchewan) shall not apply to the liens created by this Agreement or any rights, remedies or powers of the Lender or any receiver.
|
4.9
|
Disposition and Other Rights of Lender
The Lender may (a) carry on all or any part of the business of the Obligor, (b) make payments on account of, to discharge, or to obtain an assignment of any lien on the Collateral, whether or not ranking in priority to the liens created by this Agreement, (c) borrow money required for the seizure, retaking, repossession, holding, insuring, repairing, processing, maintaining, protecting, preserving, preparing for disposition or disposition of the Collateral or for any other enforcement of this Agreement or for carrying on the business of the Obligor on the security of the Collateral in priority to the liens created by this Agreement, (d) file proofs of claim and other documents to establish the claims of the Lender in any proceeding relating to the Obligor, and (e) sell, lease or otherwise dispose of all or any part of the Collateral at public auction, by public tender or by private sale, lease or other disposition, either for cash or on credit, at such time and on such terms and conditions as the Lender may determine. If any disposition involves deferred payment, the Lender will not be accountable for and the Obligor will not be entitled to be credited with the proceeds of disposition until payment is actually received in cash. On any disposition, the Lender shall have the right to acquire all or any part of the Collateral that is offered for disposition and the rights of the Obligor in that Collateral shall be extinguished. The Lender may also accept the Collateral in satisfaction of the Obligations or may from time to time designate any part of the Obligations to be satisfied by the acceptance of particular Collateral that the Lender reasonably determines to have a net realizable value equal to the amount of the designated part of the Obligations, in which case only the designated part of the Obligations shall be satisfied by the acceptance of the particular Collateral.
|
4.10
|
Commercially Reasonable Actions and Omissions
The Obligor agrees that it is commercially reasonable for the Lender (a) not to incur expenses that it reasonably considers significant to prepare Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition, (b) not to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, not to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) not to exercise collection remedies against account debtors or other persons obligated on Collateral or to remove liens on or adverse claims against Collateral, (d) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other persons, whether or not in the same business as the Obligor, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers or other persons, including employees of the Obligor, brokers, investment bankers, consultants and other professionals to assist in the collection or disposition of Collateral, whether or not the Collateral is of a specialized nature, (h) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim disposition warranties, (k) to vary or rescind any contract for the disposition of any Collateral, or (l) to purchase insurance or credit enhancements or take other steps to insure the Lender against risks of loss, collection or disposition of Collateral or to provide the Lender a guaranteed return from the collection or disposition of Collateral. The Obligor acknowledges that the purpose of this Section is to provide selected examples of actions and omissions that would be commercially reasonable in the Lender’s exercise of remedies against the Collateral and that other actions and omissions shall not be considered commercially unreasonable solely on account of not being mentioned in this Section, nor shall the Lender be liable or accountable for any discount attributable to the specified actions and omissions. Nothing in this Section shall be construed to grant any rights to the Obligor or to impose any duties on the Lender that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section. In exercising its rights and obligations under this Agreement, the Lender shall not be responsible or liable to the Obligor or any other person for any loss or damage from the realization or disposal of any Collateral or the enforcement of this Agreement, or any failure to do so, or for any act or omission on their respective parts or on the part of any of their directors, officers, employees, agents or advisors in that connection, except that the Lender may be responsible or liable for loss or damage arising from its wilful misconduct or gross negligence.
|
4.11
|
Costs of Realization
All costs incurred in connection with realizing the security constituted by this Agreement or exercising any of the Lender’s rights under this Agreement, including costs incurred in connection with repossessing, holding, insuring, repairing, processing, preparing for disposition, and disposing of any Collateral and legal fees on a full indemnity (sometimes called solicitor and own client) basis (in this Section, “
realization costs
”) shall be payable by the Obligor to the Lender immediately on demand. Realization costs shall bear interest from the date they are incurred until paid at the highest rate of interest applicable to the Obligations. Realization costs and interest shall be included in the Obligations under this Agreement.
|
4.12
|
Other Security; Application of Money
The Lender may (a) refrain from enforcing any other security or rights held by or on behalf of the Lender in respect of the Obligations, or enforce any other security or rights in any manner and order as it sees fit, and (b) apply any money received from or in respect of the Collateral in any manner and order as it sees fit and change any application of money received in whole or in part from time to time, or refrain from applying any money and hold it in a suspense account.
|
4.13
|
Third Parties
No person dealing with the Lender is required to determine (a) whether the liens created by this Agreement or the powers purporting to be exercised have become enforceable, (b) whether any Obligations remain owing, (c) the propriety of any aspect of the disposition of Collateral or (d) how any payment to the Lender has been or will be applied. Any person who acquires Collateral from the Lender in good faith shall acquire it free from any interest of the Obligor.
|
4.14
|
Appointment of Receiver
The Lender may take proceedings in any court of competent jurisdiction for the appointment of a receiver (which term includes a receiver and manager) of the Collateral or may by appointment in writing appoint any person to be a receiver of the Collateral. The Lender may remove any receiver appointed by the Lender and appoint another in its place, and may determine the remuneration of any receiver, which may be paid from the proceeds of the Collateral in priority to other Obligations. Any receiver appointed by the Lender shall, to the extent permitted by applicable law, have all of the rights, benefits and powers of the Lender under this Agreement, the PPSA or otherwise. Any receiver shall be deemed the agent of the Obligor and the Lender shall not be in any way responsible for any misconduct or negligence of any receiver.
|
4.15
|
Rights Cumulative
No failure on the part of the Lender to exercise, nor any delay in exercising, any right or remedy under the Credit Agreement or this Agreement shall operate as a waiver or impose any liability on the Lender, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and do not exclude any rights and remedies provided by applicable law. If the Lender has enforced any right or remedy under this Agreement and the enforcement proceeding has been discontinued, abandoned or determined adversely to the Lender for any reason, then the Obligor and the Lender shall, without any further action, be restored to their previous positions to the maximum extent permitted by law and subject to any determination in the enforcement proceeding or express agreement between the Obligor and the Lender, and thereafter all rights and remedies of the Lender shall continue as if no enforcement proceeding had been taken.
|
4.16
|
Obligor Liable for Deficiency
If the proceeds arising from the disposition of the Collateral fail to satisfy the Obligations, the Obligor shall pay any deficiency to the Lender on demand. Neither the taking of any judicial or extra-judicial proceeding nor the exercise of any power of seizure or disposition or other remedy shall extinguish the liability of the Obligor to pay and perform the Obligations, nor shall the acceptance of any payment or alternate security create any novation. No covenant, representation or warranty of the Obligor in this Agreement shall merge in any judgment.
|
4.17
|
Release by Obligor
The Obligor hereby releases and discharges the Lender and any receiver from all claims of any kind, whether sounding in damages or not, that may arise or be caused to the Obligor or any person claiming through or under the Obligor as a result of any act or omission of the Lender or any receiver except that the Lender or receiver may be responsible or liable for loss or damage arising from its wilful misconduct or gross negligence.
|
5.
|
NOTICES
|
5.1
|
Notices in Writing
Any communication to be made under this Agreement shall be made in accordance with the Credit Agreement.
|
6.
|
ENTIRE AGREEMENT; SEVERABILITY
|
6.1
|
Entire Agreement
This Agreement embodies all the agreements between the Obligor and the Lender relating to the liens created in this Agreement and the related rights and remedies. No party shall be bound by any representation or promise made by any person relating to this Agreement that is not embodied in it. Any waiver of, or consent to departure from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the Lender, and only in the specific instance and for the specific purpose for which it has been given.
|
6.2
|
Severability
If, in any jurisdiction, any provision of this Agreement or its application to any circumstance is restricted, prohibited or unenforceable, that provision shall, as to that jurisdiction, be ineffective only to the extent of that restriction, prohibition or unenforceability without invalidating the remaining provisions of this Agreement, without affecting the validity or enforceability of that provision in any other jurisdiction and, if applicable, without affecting its application to other circumstances.
|
7.
|
DELIVERY OF AGREEMENT
|
7.1
|
Counterparts
This Agreement may be executed in any number of counterparts and all counterparts taken together shall be deemed to constitute one agreement.
|
7.2
|
Delivery
To evidence the fact that it has executed this Agreement, the Obligor may send a signed copy of this Agreement or its signature to this Agreement by facsimile transmission or e-mail and the signature sent in that way shall be deemed to be its original signature for all purposes.
|
7.3
|
No Conditions
Possession of this Agreement by the Lender shall be conclusive evidence against the Obligor that the 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 that it is not executed by any proposed signatory.
|
7.4
|
Receipt and Waiver
The Obligor acknowledges receipt of a copy of this Agreement. The Obligor waives any notice of acceptance of this Agreement by the Lender. The Obligor also waives the right to receive a copy of any financing statement or financing change statement that may be registered in connection with this Agreement or any verification statement issued with respect to a registration, if waiver is not otherwise prohibited by law. The Obligor agrees that the Lender may from time to time provide information regarding this Agreement, the Collateral and the Obligations to persons that the Lender believes in good faith are entitled to the information under applicable law.
|
8.
|
GOVERNING LAW
|
8.1
|
Governing Law
This Agreement and any dispute arising from or in relation to this Agreement shall be governed by, and interpreted and enforced in accordance with, the law of the Province of Ontario and the laws of Canada applicable in that province, excluding the conflict of law rules of that province.
|
8.2
|
Obligor's Exclusive Dispute Resolution Jurisdiction
The Obligor agrees that the courts of the Province of Ontario have exclusive jurisdiction over any dispute arising from or in relation to this Agreement and the Obligor irrevocably and unconditionally attorns to the exclusive jurisdiction of that province. The Obligor agrees that the courts of that province are the most appropriate and convenient forum to settle disputes and agrees not to argue to the contrary.
|
8.3
|
Lender Entitled to Concurrent Jurisdiction
Despite Section 8.2, the Lender is permitted to take proceedings in relation to any dispute arising from or in relation to this Agreement in any court of another province or another state with jurisdiction and to the extent allowed by law may take concurrent proceedings in any number of jurisdictions.
|
9.
|
SUCCESSORS AND ASSIGNS
|
9.1
|
Successors and Assigns
The Obligor may not assign or transfer all or any part of its liabilities under this Agreement. All rights of the Lender under this Agreement shall be assignable in accordance with the Credit Agreement and the Obligor shall not assert against any assignee any claim or defence that the Obligor now has or may in the future have against the Lender. This Agreement shall enure to the benefit of the Lender and its successors and assigns and be binding on the Obligor and its successors and any permitted assigns.
|
YAPPN CANADA INC.
|
||
By:
|
/s/ David Lucatch | |
Name: David Lucatch – A. S. O.
|
TO:
|
Toronto Tree Top Holdings Ltd. (the “
Lender
”)
|
DATE:
|
April 7, 2014
|
1.
|
INTERPRETATION
|
1.1
|
Capitalized Terms
In this Agreement, except where the context otherwise requires, capitalized terms that are used and not otherwise defined have the meanings defined in the Credit Agreement (as defined below), and:
|
|
(a)
|
“
Collateral
” means all present and after-acquired undertaking, property and assets of the Obligor, except those expressly excluded in this definition, including all present and future right, title, interest and benefit of the Obligor in all property of the following kinds:
|
|
(i)
|
all goods comprising the inventory of the Obligor, including goods held for sale or lease or that have been leased or consigned to or by the Obligor or that have been furnished or are to be furnished under a contract of service or that are raw materials, work in process or materials used or consumed in a business or profession or that are finished goods;
|
|
(ii)
|
timber, whether cut or to be cut, timber licenses, oil, gas, other hydrocarbons and minerals, whether extracted or to be extracted, animals and their young and unborn young, and crops, whether growing or harvested;
|
|
(iii)
|
all other goods, including furniture, fixtures, equipment, machinery, plant, tools and vehicles;
|
|
(iv)
|
all chattel paper;
|
|
(v)
|
all money;
|
|
(vi)
|
all warehouse receipts, bills of lading and other documents of title, whether negotiable or not;
|
|
(vii)
|
all instruments, including bills, notes, cheques, letters of credit and advices of credit;
|
|
(viii)
|
all investment property, including shares, stock, warrants, bonds, debentures, debenture stock and other securities (in each case whether evidenced by a security certificate or an uncertificated security) and financial assets, security entitlements, securities accounts, futures contracts and futures accounts;
|
|
(ix)
|
all other tangible personal property;
|
|
(x)
|
all accounts, including deposit accounts in banks, credit unions, trust companies and similar institutions, rents, debts, demands and chooses in action that are due, owing or accruing due to the Obligor, and all claims of any kind that the Obligor has, including claims against the Crown and claims under insurance policies;
|
|
(xi)
|
all other intangibles including contracts, agreements, clearing house options, permits, licences, consents, approvals, authorizations, orders, judgments, certificates, rulings, insurance policies, agricultural and other quotas, subsidies, franchises, immunities, privileges and benefits and all goodwill, patents, trade marks, trade names, trade secrets, inventions, processes copyrights, applications for intellectual property rights and other industrial or intellectual property;
|
|
(xii)
|
with respect to the property described in items (i) to (xi) inclusive, all books, accounts, invoices, letters, papers, documents, disks and other records in any form, electronic or otherwise, evidencing or relating to that property and all contracts, investment property, instruments and other rights and benefits in respect of that property;
|
|
(xiii)
|
with respect to the property described in items (i) to (xii) inclusive, all parts, components, renewals, substitutions and replacements of that property and all attachments, accessories and increases, additions and accessions to that property; and
|
|
(xiv)
|
with respect to the property described in items (i) to (xiii) inclusive, all proceeds from that property, including property in any form derived directly or indirectly from any dealing with that property or proceeds from the property, and any insurance or other payment as indemnity or compensation for loss of or damage to the property or any right to payment, and any payment made in total or partial discharge or redemption of an intangible, chattel paper, instrument or investment property;
|
|
(b)
|
“
Credit Agreement
” means the credit agreement dated as of the date hereof entered into by the Obligor, as guarantor, Yappn Corp., as borrower, and the Lender, as lender, as amended, supplemented, restated, modified or replaced from time to time.
|
|
(c)
|
“
Event of Default
” means the occurrence of (i) an Event of Default as defined in the Credit Agreement, (ii) a “default”, “event of default” or similar circumstance identified in the Credit Agreement that entitles the Lender to enforce its rights thereunder, (iii) the failure of the Obligor to pay any of the Obligations when due, or (iv) any demand for payment validly made by the Lender pursuant to the Credit Agreement that is not met in accordance with the terms of the demand or within any applicable grace period.
|
|
(d)
|
“
Obligations
” means all debts, liabilities and obligations of the Obligor to the Lender under or in connection with the Credit Agreement, whether present or future, direct or indirect, absolute or contingent, matured or not, at any time owing or remaining unpaid by the Obligor to the Lender in any currency, whether arising from dealings between the Lender and the Obligor or from other dealings or proceedings by which the Lender may be or become in any manner whatever a creditor of the Obligor, and wherever incurred, and whether incurred by the Obligor alone or with another or others and whether as principal or surety (including obligations under or in connection with any guarantee or indemnity given by the Obligor), and all interest, fees, commissions and legal and other costs, charges and expenses owing or remaining unpaid by the Obligor to the Lender in any currency.
|
|
(e)
|
“
PPSA
” means the
Personal Property Security Act
(Ontario).
|
1.2
|
PPSA Definitions
In this Agreement, except where the context otherwise requires, the words “accessions”, “account”, “account debtor”, “certificated security”, “chattel paper”, “clearing house option”, “consumer goods”, “control”, “crops”, “document of title”, “equipment”, “financial asset”, “fixtures”, “futures account”, “futures contract”, “futures intermediary”, “goods”, “instrument”, “intangible”, “inventory”, “investment property”, “money”, “option”, “proceeds”, “receiver”, “securities account”, “securities intermediary”, “security”, “security certificate”, “security entitlement” and “uncertificated security” shall have the same meanings as their defined meanings where they are defined in the PPSA.
|
1.3
|
No
Contra Proferentem
This Agreement has been negotiated by the Obligor and the Lender with the benefit of legal representation, and any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply to the construction or interpretation of this Agreement.
|
1.4
|
Conflict With Credit Agreement
If there is any conflict or inconsistency between the terms of the Credit Agreement and the terms of this Agreement, the provisions of the Credit Agreement shall govern to the extent necessary to remove the conflict or inconsistency.
|
1.5
|
Other Interpretation Rules
In this Agreement:
|
|
(a)
|
The division into Sections and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement.
|
|
(b)
|
Unless otherwise specified or the context otherwise requires, (i) “including” or “includes” means “including (or includes) but is not limited to” and shall not be construed to limit any general statement preceding it to the specific or similar items or matters immediately following it, (ii) a reference to any legislation, statutory instrument or regulation or a section of it is a reference to the legislation, statutory instrument, regulation or section as amended, restated and re-enacted from time to time, and (iii) words in the singular include the plural and vice-versa and words in one gender include all genders.
|
|
(c)
|
Unless otherwise specified or the context otherwise requires, any reference in this Agreement to payment of the Obligations includes performance of the Obligations.
|
2.
|
GRANT OF SECURITY, ETC.
|
2.1
|
Grant of Security
As security for payment and performance of the Obligations, the Obligor mortgages, charges, assigns, transfers and pledges the Collateral to the Lender as a fixed and specific mortgage and charge, and grants the Lender a security interest in the Collateral. Without limiting the preceding part of this Section, a security interest is taken in all of the Obligor’s present and after acquired personal property.
|
2.2
|
Last Day of Lease
As the Collateral does not include the last day of the term of any lease or any agreement to lease held by the Obligor now or in the future, should the liens created by this Agreement become enforceable the Obligor shall hold the last day in trust for the Lender and shall assign it to any person acquiring that term or the part of the term that is mortgaged and charged in the course of any enforcement of the liens or any realization of the Collateral. Alternately, the Lender may assign the last day as attorney of the Obligor or may appoint any person acquiring the term or any other person or persons as a new trustee or trustees of the last day, free of any obligation regarding the last day.
|
2.3
|
Restricted Property
The Collateral shall not include any lease, agreement, contractual right, franchise, licence or approval, other than an account or chattel paper (collectively, “
Restricted Property
”) held by the Obligor now or in the future if the liens created by this Agreement would otherwise result in a breach, forfeiture or termination of the Restricted Property unless any necessary consent or waiver is obtained. The Obligor shall, on request by the Lender, promptly use all commercially reasonable efforts to seek any necessary consent or waiver to have the Restricted Property form part of the Collateral and to any disposition of the Restricted Property upon enforcement of this Agreement. If a consent or waiver is obtained, the applicable Restricted Property shall form part of the Collateral without any further action. If any consent or waiver is not obtained, and if the liens created by this Agreement become enforceable, the Obligor shall hold any Restricted Property for which a consent or waiver has not been obtained and its benefits in trust for the Lender, and shall perform its obligations and exercise and enforce its rights under that Restricted Property, including rights of disposition, at the direction of the Lender.
|
2.4
|
Attachment
The Obligor agrees that the Lender has given value and that the liens created by this Agreement are intended to attach (a) with respect to Collateral that is now in existence, upon execution of this Agreement, and (b) with respect to Collateral that comes into existence in the future, upon the Obligor acquiring rights in the Collateral or the power to transfer rights in the Collateral to the Lender. In each case, the parties do not intend to postpone the attachment of any lien created by this Agreement.
|
2.5
|
Continuing Agreement
The liens created by this Agreement are continuing, to secure a current or running account, and will extend to the ultimate balance of the Obligations, regardless of any intermediate payment or discharge of the Obligations in whole or in part. Without limiting the foregoing, the Obligations may include advances and re-advances under revolving credit facilities, which permit borrowing, repayment of all or part of the amount borrowed and re-borrowing of amounts previously paid.
|
2.6
|
In Addition to Other Rights; No Marshalling
This Agreement is in addition to and is not in any way prejudiced by or merged with any other lien now or subsequently held by the Lender in respect of any Obligations. The Lender shall be under no obligation to marshal in favour of the Obligor any other lien or any money or other property that the Lender may be entitled to receive or may have a claim upon.
|
2.7
|
Liabilities Unconditional
The liabilities of the Obligor under this Agreement are absolute and unconditional, and will not be affected by any act, omission, matter or thing that, but for this Section, would reduce, release or prejudice any of its liabilities under this Agreement, whether or not known to it or the Lender or consented to by it or the Lender.
|
2.8
|
Merger of Obligor
If the Obligor amalgamates or merges with one or more other entities, the Obligations and the liens created by this Agreement shall continue as to the Obligations and the undertaking, property and assets of the Obligor at the time of amalgamation or merger, and shall extend to the Obligations and the present and future undertaking, property and assets of the amalgamated or merged entity, and the term Obligor shall extend to the amalgamated or merged entity, all as if the amalgamated or merged entity had executed this Agreement as the Obligor.
|
2.9
|
Limitation Periods
To the extent that any limitation period applies to any claim for payment of the Obligations or remedy for enforcement of the Obligations, the Obligor agrees that:
|
|
(a)
|
any limitation period is expressly excluded and waived entirely if permitted by applicable law;
|
|
(b)
|
if a complete exclusion and waiver of any limitation period is not permitted by applicable law, any limitation period is extended to the maximum length permitted by applicable law;
|
|
(c)
|
any applicable limitation period shall not begin before an express demand for payment of the Obligations is made in writing by the Lender to the Obligor;
|
|
(d)
|
any applicable limitation period shall begin afresh upon any payment or other acknowledgment of the Obligations by the Obligor; and
|
|
(e)
|
this Agreement is a “business agreement” as defined in the
Limitations Act, 2002
(Ontario) if that Act applies.
|
3.
|
RIGHTS AND OBLIGATIONS OF THE OBLIGOR
|
3.1
|
Operations and Insurance
The Obligor shall diligently maintain and operate the Collateral so as to preserve the Collateral and the income from the Collateral and shall comply with all requirements of any governmental authority and all agreements relating to any of the Collateral and all other conditions on which the Collateral is held. The Obligor shall also keep the Collateral insured against loss, damage and other risks as the Lender may reasonably require, shall maintain its insurance with loss, if any, payable to the Lender as first loss payee and shall provide the Lender with satisfactory evidence of the insurance maintained.
|
3.2
|
Restrictions on Liens and Dispositions
The Obligor shall not create, assume, incur or permit the existence of any lien on the Collateral except as approved by the Lender, nor shall the Obligor sell, lease or otherwise dispose of the Collateral, or permit such a disposition to occur, except with consent of the Lender, not to be unreasonably withheld, or as expressly permitted in the Credit Agreement.
|
3.3
|
Possession and Control of Collateral
The Obligor shall, on request by the Lender from time to time, deliver to the Lender possession of all chattel paper, instruments and negotiable documents of title. The Obligor shall also take whatever steps the Lender requires from time to time to enable the Lender to obtain control of any investment property forming part of the Collateral, including (a) arranging for any securities intermediary, futures intermediary or issuer of uncertificated securities to enter into an agreement satisfactory to the Lender to enable the Lender to obtain control, (b) delivering any certificated security to the Lender with any necessary endorsement and (c) having any security registered in the name of the Lender or its nominee. The Lender is not obligated to keep any Collateral separate or identifiable or to take steps to preserve rights relating to Collateral against prior parties or other persons. The Lender shall have no duty with respect to any Collateral delivered to it, other than to use the same degree of care in the safe custody of the Collateral delivered to it that it uses with respect to similar property that it owns of similar value. Without limiting the foregoing, the Lender may lodge all instruments, chattel paper, investment property or other Collateral with any bank or trust company to be held in safekeeping on behalf of the Lender (without incurring any liability for any act or omission of the bank or trust company), or may hold Collateral itself. The Obligor shall reimburse the Lender on demand for all expenses incurred by the Lender in connection with safekeeping with interest from the date the expenses are incurred until paid at the highest rate of interest applicable to the Obligations. The expenses and interest shall form part of the Obligations.
|
3.4
|
Other Assurances; Power of Attorney
On request by the Lender, the Obligor shall (a) provide the Lender with details of all goods to which provisions of the PPSA or regulations or orders under the PPSA regarding serial numbers apply, (b) mark or take other steps to identify the Collateral as being subject to the liens created by this Agreement, and (c) execute, acknowledge and deliver all financing statements, certificates, further assignments, documents, transfers, instruments, security documents, acknowledgments and assurances and do all further acts and things as the Lender may consider necessary or desirable to give effect to the intent of this Agreement (including providing the Lender with a fixed and specific mortgage and charge and a perfected security interest in all freehold and leasehold real property, all patents, trademarks and other intellectual property and all aircraft, ships and railway rolling stock in which the Obligor now or in the future holds an interest), or for the collection, disposition, realization or enforcement of the Collateral or the liens created by this Agreement. The Obligor constitutes and appoints the Lender its true and lawful attorney, with full power of substitution, to do any of the foregoing or any other things that the Obligor has agreed to do in this Agreement, whenever and wherever the Lender may consider it to be necessary or desirable, and to use the Obligor’s name in the exercise of the Lender’s rights under this Agreement. This power of attorney is coupled with an interest and is irrevocable by the Obligor.
|
3.5
|
Composite Agreement
This Agreement is a composite mortgage and security agreement covering Collateral located in various provinces and territories of Canada and in other jurisdictions and, as to any Collateral located in a particular jurisdiction, this Agreement shall be a separate mortgage and security agreement enforceable against the Obligor without regard to the application of this Agreement to Collateral located in other jurisdictions. All provisions of this Agreement shall apply separately to the Collateral located in each separate jurisdiction with the same effect as if a separate mortgage and security agreement with respect to that Collateral had been executed and delivered by the Obligor. If requested by the Lender, the Debtor shall execute, deliver and register, at its expense, a separate mortgage and security agreement covering the Collateral located in any particular jurisdiction or jurisdictions. The separate mortgage and security agreement shall be in the form of this Agreement except for modifications required by the fact that it relates only to the Collateral located in the particular jurisdiction or jurisdictions and other modifications that the Lender considers necessary or desirable in the circumstances.
|
3.6
|
Restriction on Change of Name
The Obligor shall not change its name without providing the Lender with 30 days advance written notice and promptly taking other steps, if any, as the Lender requests to ensure that the position of the Lender is not adversely affected by the change in name.
|
3.7
|
Restriction on Change of Office Location
The Obligor shall not permit its chief executive office to be located out of the Province of Ontario
(the “
Specified Location
”) without providing the Lender with 30 days advance written notice and promptly taking other steps, if any, as the Lender requests to ensure that the position of the Lender is not adversely affected by the change of location.
|
3.8
|
Restriction on Change of Property Location
The Obligor shall not permit any of its tangible personal property to be located out of the Specified Location (other than (a) inventory in transit and (b) goods of a type normally used in more than one jurisdiction that are equipment or inventory leased or held for lease by the Obligor to others) without providing the Lender with 30 days advance written notice and promptly taking other steps, if any, as the Lender requests to ensure that the position of the Lender is not adversely affected by the change of location.
|
3.9
|
Use of Collateral; Inspection
Until the occurrence of an Event of Default, the Obligor may use the Collateral in any lawful manner consistent with the provisions of this Agreement and the Credit Agreement. The Obligor shall at all reasonable times and from time to time on reasonable notice, permit representatives of the Lender to inspect any of the Collateral and to examine and take extracts from its financial books, accounts and records, including accounts and records stored in computer data banks and computer software systems, and to discuss its financial condition with its senior officers and (in the presence of such of its representatives as it may designate) its auditors, the reasonable expense of all of which shall be paid by the Obligor.
|
3.10
|
Lender May Perform Obligor’s Duties
If the Obligor fails to perform any of its duties under this Agreement, the Lender may, but shall not be obligated to, perform any or all of those duties, without waiving any rights to enforce this Agreement. The Obligor shall pay the Lender, immediately on written demand, an amount equal to the costs, fees and expenses incurred by the Lender in doing so plus interest from the date the costs, fees and expenses are incurred until paid at the highest rate of interest applicable to the Obligations. The costs, fees, expenses and interest shall be included in the Obligations under this Agreement.
|
3.11
|
Lender Not Liable for Obligor’s Agreements
Nothing in this Agreement shall make the Lender liable to observe or perform any term of any agreement to which the Obligor is a party or by which it or the Collateral is bound, or make the Lender a mortgagee in possession. The Obligor shall indemnify the Lender and save it harmless from any claim arising from any such agreement.
|
3.12
|
Release of Liens
If the Obligor has indefeasibly paid the Obligations in full in cash and otherwise performed all of the terms of the Credit Agreement, and if all obligations of the Lender to extend credit under the Credit Agreement has been cancelled, then the Lender shall, at the request and expense of the Obligor, release the liens created by this Agreement and execute and deliver whatever documents are reasonably required to do so.
|
4.
|
RIGHTS AND OBLIGATIONS ON DEFAULT
|
4.1
|
Application of Article
The provisions of this Article 4 apply on the occurrence of an Event of Default that is continuing.
|
4.2
|
Termination of Further Credit and Acceleration of Obligations
The Lender shall be under no obligation to make further advances or otherwise extend further credit and the Lender may declare that the Obligations are immediately due and payable in full, but if the Obligor becomes bankrupt (voluntarily or involuntarily), or institutes (or has instituted against it) any proceeding seeking liquidation, rearrangement, relief of debtors or creditors or the appointment of a receiver or trustee over any material part of its undertaking, property and assets or any analogous proceeding in any relevant jurisdiction, then without prejudice to the other rights of the Lender as a result of any of those events, without notice or action of any kind by the Lender and without presentment, demand or protest of any nature or kind, the Lender’s obligation to make advances or otherwise extend credit shall immediately terminate and the Obligations shall become immediately due and payable. Upon the Obligations becoming due and payable, the Lender may enforce payment of the Obligations and the Lender shall have the rights and remedies of a secured party under the PPSA and other applicable law together with those rights and remedies provided by this Agreement or otherwise provided by applicable law.
|
4.3
|
Rights of Lender
The Lender may (a) require the Obligor to assemble the Collateral and deliver or make the Collateral available to the Lender at a reasonably convenient place designated by the Lender, (b) enter on any premises of the Obligor or any other place where Collateral may be located, (c) take possession of the Collateral by any method permitted by law, (d) render any equipment unusable without removing it from the Obligor’s premises, (e) use the Collateral in the manner and to the extent that the Lender may consider appropriate and (f) hold, insure, repair, process, maintain, protect and preserve the Collateral and prepare it for disposition. The Lender is not, however, required to insure the Collateral, and the risk of any loss of or damage to the Collateral shall be borne by the Obligor.
|
4.4
|
Appointment of Monitor
The Lender may from time to time appoint any person (the “
Monitor
”) to investigate any or all of the Collateral, the Obligor and the Obligor’s business and affairs and report to the Lender. The Obligor shall co-operate fully with the Monitor and give the Monitor full access to its facilities, property, records, creditors, customers, contractors, officers, directors, employees, auditors, legal counsel and agents. The Monitor shall not participate in the management of the Obligor’s business or affairs and shall have no responsibility, nor shall it incur any liability, in respect of the Collateral, the Obligor or the Obligor’s business or affairs. The Monitor shall act solely on behalf of the Lender and shall have no contractual relationship with the Obligor as a consultant or otherwise, nor shall the Obligor be entitled to receive any report by the Monitor. The appointment of the Monitor shall not be regarded as an act of enforcement of the liens created by this Agreement. All costs incurred in connection with the appointment of the Monitor and the performance by the Monitor of its activities as such, including legal fees on a full indemnity (sometimes called solicitor and own client) basis shall be payable by the Obligor to the Lender immediately on demand, shall bear interest from the date they are incurred until paid at the highest rate of interest applicable to the Obligations and shall be included in the Obligations.
|
4.5
|
Proceeds
The Lender may take charge of all proceeds of the Collateral and may hold them as additional security for the Obligations. The Lender may give notice to any or all account debtors of the Obligor and to any or all persons liable to the Obligor under an instrument to direct all payments or other proceeds relating to the Collateral to the Lender and any payments or other proceeds of the Collateral received by the Obligor from account debtors or from any persons liable to the Obligor under an instrument, after notice is given by the Lender, shall be held by the Obligor in trust for the Lender and immediately paid over to the Lender. The Lender shall not, however, be required to collect any proceeds of the Collateral. The Lender may also enforce any rights of the Obligor in respect of the Collateral by any manner permitted by law.
|
4.6
|
Rights re Investment Property Etc.
The Lender may have any instruments or investment property registered in its name or in the name of its nominee and shall be entitled but not required to exercise voting and other rights that the holder of that Collateral may at any time have; but the Lender shall not be responsible for any loss occasioned by the exercise of those rights or by failure to exercise them. The Lender may also enforce its rights under any agreement with any securities intermediary, futures intermediary or issuer of uncertificated securities.
|
4.7
|
Notice of Disposition
If required to do so by applicable law, the Lender shall give the Obligor written notice of any intended disposition of the Collateral in accordance with the Credit Agreement or by any other method required or permitted by applicable law. The Obligor waives giving of notice to the maximum extent permitted by applicable law.
|
4.8
|
Statutory Waivers
To the maximum extent permitted by law, the Obligor waives all of the rights, benefits and protections given by any present or future statute that imposes limits on the rights, remedies or powers of the Lender or on the methods of realization of security, including any seize or sue or anti-deficiency statute or any similar provisions of any other statute. In particular, the Obligor waives all rights, benefits and protections given by sections 47 and 50 of the
Law of Property Act
(Alberta) insofar as they extend to or relate to any Collateral. The
Limitation of Civil Rights Act
(Saskatchewan) shall not apply to the liens created by this Agreement or any rights, remedies or powers of the Lender or any receiver.
|
4.9
|
Disposition and Other Rights of Lender
The Lender may (a) carry on all or any part of the business of the Obligor, (b) make payments on account of, to discharge, or to obtain an assignment of any lien on the Collateral, whether or not ranking in priority to the liens created by this Agreement, (c) borrow money required for the seizure, retaking, repossession, holding, insuring, repairing, processing, maintaining, protecting, preserving, preparing for disposition or disposition of the Collateral or for any other enforcement of this Agreement or for carrying on the business of the Obligor on the security of the Collateral in priority to the liens created by this Agreement, (d) file proofs of claim and other documents to establish the claims of the Lender in any proceeding relating to the Obligor, and (e) sell, lease or otherwise dispose of all or any part of the Collateral at public auction, by public tender or by private sale, lease or other disposition, either for cash or on credit, at such time and on such terms and conditions as the Lender may determine. If any disposition involves deferred payment, the Lender will not be accountable for and the Obligor will not be entitled to be credited with the proceeds of disposition until payment is actually received in cash. On any disposition, the Lender shall have the right to acquire all or any part of the Collateral that is offered for disposition and the rights of the Obligor in that Collateral shall be extinguished. The Lender may also accept the Collateral in satisfaction of the Obligations or may from time to time designate any part of the Obligations to be satisfied by the acceptance of particular Collateral that the Lender reasonably determines to have a net realizable value equal to the amount of the designated part of the Obligations, in which case only the designated part of the Obligations shall be satisfied by the acceptance of the particular Collateral.
|
4.10
|
Commercially Reasonable Actions and Omissions
The Obligor agrees that it is commercially reasonable for the Lender (a) not to incur expenses that it reasonably considers significant to prepare Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition, (b) not to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, not to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) not to exercise collection remedies against account debtors or other persons obligated on Collateral or to remove liens on or adverse claims against Collateral, (d) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other persons, whether or not in the same business as the Obligor, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers or other persons, including employees of the Obligor, brokers, investment bankers, consultants and other professionals to assist in the collection or disposition of Collateral, whether or not the Collateral is of a specialized nature, (h) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim disposition warranties, (k) to vary or rescind any contract for the disposition of any Collateral, or (l) to purchase insurance or credit enhancements or take other steps to insure the Lender against risks of loss, collection or disposition of Collateral or to provide the Lender a guaranteed return from the collection or disposition of Collateral. The Obligor acknowledges that the purpose of this Section is to provide selected examples of actions and omissions that would be commercially reasonable in the Lender’s exercise of remedies against the Collateral and that other actions and omissions shall not be considered commercially unreasonable solely on account of not being mentioned in this Section, nor shall the Lender be liable or accountable for any discount attributable to the specified actions and omissions. Nothing in this Section shall be construed to grant any rights to the Obligor or to impose any duties on the Lender that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section. In exercising its rights and obligations under this Agreement, the Lender shall not be responsible or liable to the Obligor or any other person for any loss or damage from the realization or disposal of any Collateral or the enforcement of this Agreement, or any failure to do so, or for any act or omission on their respective parts or on the part of any of their directors, officers, employees, agents or advisors in that connection, except that the Lender may be responsible or liable for loss or damage arising from its wilful misconduct or gross negligence.
|
4.11
|
Costs of Realization
All costs incurred in connection with realizing the security constituted by this Agreement or exercising any of the Lender’s rights under this Agreement, including costs incurred in connection with repossessing, holding, insuring, repairing, processing, preparing for disposition, and disposing of any Collateral and legal fees on a full indemnity (sometimes called solicitor and own client) basis (in this Section, “
realization costs
”) shall be payable by the Obligor to the Lender immediately on demand. Realization costs shall bear interest from the date they are incurred until paid at the highest rate of interest applicable to the Obligations. Realization costs and interest shall be included in the Obligations under this Agreement.
|
4.12
|
Other Security; Application of Money
The Lender may (a) refrain from enforcing any other security or rights held by or on behalf of the Lender in respect of the Obligations, or enforce any other security or rights in any manner and order as it sees fit, and (b) apply any money received from or in respect of the Collateral in any manner and order as it sees fit and change any application of money received in whole or in part from time to time, or refrain from applying any money and hold it in a suspense account.
|
4.13
|
Third Parties
No person dealing with the Lender is required to determine (a) whether the liens created by this Agreement or the powers purporting to be exercised have become enforceable, (b) whether any Obligations remain owing, (c) the propriety of any aspect of the disposition of Collateral or (d) how any payment to the Lender has been or will be applied. Any person who acquires Collateral from the Lender in good faith shall acquire it free from any interest of the Obligor.
|
4.14
|
Appointment of Receiver
The Lender may take proceedings in any court of competent jurisdiction for the appointment of a receiver (which term includes a receiver and manager) of the Collateral or may by appointment in writing appoint any person to be a receiver of the Collateral. The Lender may remove any receiver appointed by the Lender and appoint another in its place, and may determine the remuneration of any receiver, which may be paid from the proceeds of the Collateral in priority to other Obligations. Any receiver appointed by the Lender shall, to the extent permitted by applicable law, have all of the rights, benefits and powers of the Lender under this Agreement, the PPSA or otherwise. Any receiver shall be deemed the agent of the Obligor and the Lender shall not be in any way responsible for any misconduct or negligence of any receiver.
|
4.15
|
Rights Cumulative
No failure on the part of the Lender to exercise, nor any delay in exercising, any right or remedy under the Credit Agreement or this Agreement shall operate as a waiver or impose any liability on the Lender, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and do not exclude any rights and remedies provided by applicable law. If the Lender has enforced any right or remedy under this Agreement and the enforcement proceeding has been discontinued, abandoned or determined adversely to the Lender for any reason, then the Obligor and the Lender shall, without any further action, be restored to their previous positions to the maximum extent permitted by law and subject to any determination in the enforcement proceeding or express agreement between the Obligor and the Lender, and thereafter all rights and remedies of the Lender shall continue as if no enforcement proceeding had been taken.
|
4.16
|
Obligor Liable for Deficiency
If the proceeds arising from the disposition of the Collateral fail to satisfy the Obligations, the Obligor shall pay any deficiency to the Lender on demand. Neither the taking of any judicial or extra-judicial proceeding nor the exercise of any power of seizure or disposition or other remedy shall extinguish the liability of the Obligor to pay and perform the Obligations, nor shall the acceptance of any payment or alternate security create any novation. No covenant, representation or warranty of the Obligor in this Agreement shall merge in any judgment.
|
4.17
|
Release by Obligor
The Obligor hereby releases and discharges the Lender and any receiver from all claims of any kind, whether sounding in damages or not, that may arise or be caused to the Obligor or any person claiming through or under the Obligor as a result of any act or omission of the Lender or any receiver except that the Lender or receiver may be responsible or liable for loss or damage arising from its wilful misconduct or gross negligence.
|
5.
|
NOTICES
|
5.1
|
Notices in Writing
Any communication to be made under this Agreement shall be made in accordance with the Credit Agreement.
|
6.
|
ENTIRE AGREEMENT; SEVERABILITY
|
6.1
|
Entire Agreement
This Agreement embodies all the agreements between the Obligor and the Lender relating to the liens created in this Agreement and the related rights and remedies. No party shall be bound by any representation or promise made by any person relating to this Agreement that is not embodied in it. Any waiver of, or consent to departure from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the Lender, and only in the specific instance and for the specific purpose for which it has been given.
|
6.2
|
Severability
If, in any jurisdiction, any provision of this Agreement or its application to any circumstance is restricted, prohibited or unenforceable, that provision shall, as to that jurisdiction, be ineffective only to the extent of that restriction, prohibition or unenforceability without invalidating the remaining provisions of this Agreement, without affecting the validity or enforceability of that provision in any other jurisdiction and, if applicable, without affecting its application to other circumstances.
|
7.
|
DELIVERY OF AGREEMENT
|
7.1
|
Counterparts
This Agreement may be executed in any number of counterparts and all counterparts taken together shall be deemed to constitute one agreement.
|
7.2
|
Delivery
To evidence the fact that it has executed this Agreement, the Obligor may send a signed copy of this Agreement or its signature to this Agreement by facsimile transmission or e-mail and the signature sent in that way shall be deemed to be its original signature for all purposes.
|
7.3
|
No Conditions
Possession of this Agreement by the Lender shall be conclusive evidence against the Obligor that the 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 that it is not executed by any proposed signatory.
|
7.4
|
Receipt and Waiver
The Obligor acknowledges receipt of a copy of this Agreement. The Obligor waives any notice of acceptance of this Agreement by the Lender. The Obligor also waives the right to receive a copy of any financing statement or financing change statement that may be registered in connection with this Agreement or any verification statement issued with respect to a registration, if waiver is not otherwise prohibited by law. The Obligor agrees that the Lender may from time to time provide information regarding this Agreement, the Collateral and the Obligations to persons that the Lender believes in good faith are entitled to the information under applicable law.
|
8.
|
GOVERNING LAW
|
8.1
|
Governing Law
This Agreement and any dispute arising from or in relation to this Agreement shall be governed by, and interpreted and enforced in accordance with, the law of the Province of Ontario and the laws of Canada applicable in that province, excluding the conflict of law rules of that province.
|
8.2
|
Obligor's Exclusive Dispute Resolution Jurisdiction
The Obligor agrees that the courts of the Province of Ontario have exclusive jurisdiction over any dispute arising from or in relation to this Agreement and the Obligor irrevocably and unconditionally attorns to the exclusive jurisdiction of that province. The Obligor agrees that the courts of that province are the most appropriate and convenient forum to settle disputes and agrees not to argue to the contrary.
|
8.3
|
Lender Entitled to Concurrent Jurisdiction
Despite Section 8.2, the Lender is permitted to take proceedings in relation to any dispute arising from or in relation to this Agreement in any court of another province or another state with jurisdiction and to the extent allowed by law may take concurrent proceedings in any number of jurisdictions.
|
9.
|
SUCCESSORS AND ASSIGNS
|
9.1
|
Successors and Assigns
The Obligor may not assign or transfer all or any part of its liabilities under this Agreement. All rights of the Lender under this Agreement shall be assignable in accordance with the Credit Agreement and the Obligor shall not assert against any assignee any claim or defence that the Obligor now has or may in the future have against the Lender. This Agreement shall enure to the benefit of the Lender and its successors and assigns and be binding on the Obligor and its successors and any permitted assigns.
|
INTERTAINMENT MEDIA INC.
|
||
By:
|
/s/ David Lucatch | |
Name: David Lucatch – A. S. O.
|
TO:
|
Toronto Tree Top Holdings Ltd. (the “
Lender
”)
|
DATE:
|
April 7, 2014
|
A.
|
The Obligor is a subsidiary of the Borrower. The Obligor (as defined herein) is required to deliver this Agreement under the terms of the Credit Agreement. The Obligor will derive substantial direct and indirect benefits and advantages from the financial accommodations to the Borrower under the Credit Agreement, and it will be to the Obligor’s direct interest and economic benefit to deliver this Agreement in order to allow the Borrower to obtain those financial accommodations. The Obligor acknowledges the value of that benefit.
|
1.
|
INTERPRETATION
|
1.1
|
Capitalized Terms
In this Agreement, except where the context otherwise requires, capitalized terms that are used and not otherwise defined have the meanings defined in the Credit Agreement (as defined below), and:
|
|
(a)
|
“
Borrower
” means Yappn Corp. and its successors.
|
|
(b)
|
“
Credit Agreement
” means the credit agreement dated as of the date hereof entered into by the Borrower, as borrower, and the Lender, as lender, as amended, supplemented, restated, modified or replaced from time to time.
|
|
(c)
|
“
Obligations
” means all debts, liabilities and obligations of the Borrower to the Lender under or in connection with the Credit Agreement, whether present or future, direct or indirect, absolute or contingent, matured or not, at any time owing or remaining unpaid by the Borrower to the Lender in any currency, whether arising from dealings between the Lender and the Borrower or from other dealings or proceedings by which the Lender may be or become in any manner whatever a creditor of the Borrower, and wherever incurred, and whether incurred by the Borrower alone or with another or others and whether as principal or surety (including obligations under or in connection with any guarantee or indemnity given by the Borrower), and all interest, fees, commissions and legal and other costs, charges and expenses owing or remaining unpaid by the Borrower to the Lender in any currency.
|
1.2
|
No
Contra Proferentem
This Agreement has been negotiated by the Obligor and the Lender with the benefit of legal representation, and any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply to the construction or interpretation of this Agreement.
|
1.3
|
Conflict With Credit Agreement
If there is any conflict or inconsistency between the terms of the Credit Agreement and the terms of this Agreement, the provisions of the Credit Agreement shall govern to the extent necessary to remove the conflict or inconsistency.
|
1.4
|
Other Interpretation Rules
In this Agreement:
|
|
(a)
|
The division into Sections and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement.
|
|
(b)
|
Unless otherwise specified or the context otherwise requires, (i) “including” or “includes” means “including (or includes) but is not limited to” and shall not be construed to limit any general statement preceding it to the specific or similar items or matters immediately following it, (ii) a reference to any legislation, statutory instrument or regulation or a section of it is a reference to the legislation, statutory instrument, regulation or section as amended, restated and re-enacted from time to time, and (iii) words in the singular include the plural and vice-versa and words in one gender include all genders.
|
|
(c)
|
Unless otherwise specified or the context otherwise requires, any reference in this Agreement to payment of the Obligations includes performance of the Obligations.
|
2.
|
GUARANTEE AND INDEMNITY
|
2.1
|
Guarantee
The Obligor unconditionally guarantees payment to the Lender of the Obligations.
|
2.2
|
Indemnity
The Obligor also unconditionally agrees that, if the Borrower does not unconditionally and irrevocably pay any Obligations when due and those Obligations are not recoverable from the Obligor for any reason under Section 2.1, the Obligor shall indemnify the Lender immediately on demand against any cost, loss, damage, expense or liability suffered by the Lender as a result of the Borrower’s failure to do so.
|
2.3
|
Separate Liabilities
The liabilities of the Obligor under Sections 2.1 and 2.2 are separate and distinct from each other, but the provisions of this Agreement shall apply to the liabilities under both of those Sections unless the context otherwise requires.
|
2.4
|
Limit on Liability
The liability of the Obligor under this Agreement is unlimited.
|
2.5
|
Irrevocable
This Agreement is irrevocable by the Obligor, and the Obligor expressly and unconditionally waives any right to terminate this Agreement.
|
3.
|
CONTINUING AGREEMENT AND REINSTATEMENT
|
3.1
|
Continuing Agreement
This Agreement is a continuing guarantee and indemnity for a current or running account and will extend to the ultimate balance of the Obligations, regardless of any intermediate payment or discharge of the Obligations in whole or in part. Without limiting the foregoing, the Obligations may include advances and re-advances under revolving credit facilities, which permit borrowing, repayment of all or part of the amount borrowed and re-borrowing of amounts previously paid.
|
3.2
|
Payments in Gross
Until this Agreement has been terminated in accordance with Section 3.4, all amounts of any kind received by the Lender from any source in respect of the Obligations shall be regarded for all purposes as payments in gross without any right on the part of the Obligor to claim the benefit of those amounts in reduction of its liabilities under this Agreement.
|
3.3
|
Reinstatement
If at any time any payment of the Obligations is or must be rescinded or returned by the Lender as a result of insolvency or reorganization of the Borrower or any other person, or for any other reason whatsoever, the Obligations will be deemed to have continued in existence and this Agreement shall continue to be effective, or be reinstated, as if the payment had not occurred. The Lender may concede or compromise any claim that any payment ought to be rescinded or returned without diminishing the liability of the Obligor under this Section.
|
3.4
|
Termination
If the Obligations have been indefeasibly paid in full in cash and if all obligations of the Lender to extend credit under the Credit Agreement has been cancelled, then the Lender shall, at the request and expense of the Obligor, execute and deliver whatever documents are reasonably required to acknowledge the termination of this Agreement.
|
4.
|
WAIVER OF DEFENCES AND OTHER MATTERS
|
4.1
|
In Addition to Other Rights; No Marshalling
This Agreement is in addition to and is not in any way prejudiced by or merged with any other guarantee, indemnity or security now or subsequently held by the Lender in respect of any Obligations. The Lender shall be under no obligation to marshal in favour of the Obligor any other guarantees or other securities or any money or other property that the Lender may be entitled to receive or may have a claim upon.
|
4.2
|
Liabilities Unconditional
The liabilities of the Obligor under this Agreement are absolute and unconditional, and will not be affected by any act, omission, matter or thing that, but for this Section, would reduce, release or prejudice any of its liabilities under this Agreement, or that might constitute a legal or equitable defence to or a discharge, limitation or reduction of the Obligor’s liabilities under this Agreement, including the following, whether or not known to it or the Lender or consented to by it or the Lender:
|
|
(a)
|
any discontinuance, reduction, increase, extension or other variance in the credit granted by the Lender to the Borrower or any time, waiver or consent granted to, or any release of or compromise with, the Borrower or any other person;
|
|
(b)
|
any amendment, supplement or restatement (however fundamental) or replacement of the Credit Agreement;
|
|
(c)
|
any unenforceability, illegality or invalidity of any obligation of any person under or in connection the Credit Agreement, including any bar to recovery under any statute of limitations;
|
|
(d)
|
the death or loss of capacity of the Borrower, any change in the name of the Borrower, or in the membership of the Borrower, if a partnership, or in the ownership, objects, capital structure or constitution of the Borrower, if a corporation, the sale of all or any part of the Borrower’s business or the Borrower being amalgamated or merged with one or more other entities, but shall, notwithstanding any such event, continue to apply to all Obligations whether previously or subsequently incurred; and in the case of a change in the membership of a Borrower that is a partnership or in the case of the Borrower being amalgamated or merged with one or more other entities, this Agreement shall also apply to the liabilities of the resulting or continuing entity, and the term “Borrower” shall include each resulting or continuing entity;
|
|
(e)
|
any credit being granted or continued by the Lender purportedly to or for the Borrower after the death, loss of capacity, bankruptcy or insolvency of the Borrower;
|
|
(f)
|
any lack or limitation of power, incapacity or disability of the Borrower or of the directors, partners or agents of the Borrower, or the Borrower not being a legal or suable entity, or any irregularity, defect or lack of formality in the obtaining of credit by the Borrower;
|
|
(g)
|
any bankruptcy, insolvency or similar proceedings, including any stay of or moratorium on proceedings;
|
|
(h)
|
any impossibility, impracticability, frustration of purpose,
force majeure
, illegality or act of governmental authority affecting the Credit Agreement;
|
|
(i)
|
any taking or failure to take security, any loss of or loss of value of security for the Obligations, any invalidity, lack of perfection or unenforceability of any security, or any enforcement of, failure to enforce or irregularity or deficiency in the enforcement of any security; or
|
|
(j)
|
the existence of any claim, set-off or other right that the Obligor may have against the Borrower, the Lender or any other person, whether in connection with the Credit Agreement or otherwise.
|
4.3
|
Information Concerning Borrower
The Obligor acknowledges that it is presently familiar with the Credit Agreement, the financial condition of the Borrower and any other circumstances affecting the risk incurred by the Obligor in connection with this Agreement. The Obligor shall be solely responsible for keeping itself informed concerning those matters in the future. The Obligor acknowledges that the Lender has no obligation to provide any information concerning those matters now or in the future and that, if it does so at any time, it shall have no obligation to update the information or provide other information subsequently.
|
4.4
|
No Obligation to Enforce Other Rights
The Obligor waives any right it may have of requiring the Lender (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Obligor under this Agreement and the Obligor waives all benefits of discussion and division. These waivers apply irrespective of any law or any provision of the Credit Agreement to the contrary.
|
5.
|
USE OF AMOUNTS RECEIVED
|
5.1
|
Use of Amounts Received
Until this Agreement has been terminated in accordance with Section 3.4, the Lender (or any trustee or agent on its behalf) may:
|
|
(a)
|
refrain from applying any money received or enforcing any other security or rights held by or on behalf of the Lender in respect of the Obligations, or apply any money and enforce any other security or rights in any manner and order as it sees fit;
|
|
(b)
|
change any application of money received in whole or in part from time to time; and
|
|
(c)
|
hold in a suspense account any money received from the Obligor or on account of the Obligor’s liabilities under this Agreement.
|
6.
|
POSTPONEMENT OF OBLIGOR’S RIGHTS
|
6.1
|
Postponement of Subrogation Etc.
Until this Agreement has been terminated in accordance with Section 3.4, the Obligor shall not exercise any rights that it may have by reason of performance by it of its liabilities under this Agreement:
|
|
(a)
|
to be indemnified by the Borrower;
|
|
(b)
|
to claim contribution from any other guarantor of the Obligations; or
|
|
(c)
|
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Lender under the Credit Agreement.
|
6.2
|
Postponement of Set-Off Etc.
Until this Agreement has been terminated in accordance with Section 3.4, the Obligor shall not claim any set-off or counterclaim against the Borrower as a result of any liability of the Borrower to the Obligor, or claim or prove in the bankruptcy or insolvency of the Borrower in competition with the Lender.
|
6.3
|
Postponement and Assignment
The Obligor postpones payment of all present and future debts, liabilities and obligations of the Borrower to the Obligor until this Agreement has been terminated in accordance with Section 3.4. The Obligor assigns to the Lender all present and future debts, liabilities and obligations of the Borrower to the Obligor as security for payment of the Obligor’s liabilities under this Agreement, and agrees that all money received by the Obligor in respect of those debts, liabilities and obligations shall be received in trust for the Lender and forthwith upon receipt shall be paid over to the Lender, all without in any way lessening or limiting the liabilities of the Obligor under this Agreement. The provisions of this Section 6.3 are independent of the other provisions of this Agreement and shall remain in full force and effect until this Agreement has been terminated in accordance with Section 3.4, notwithstanding that the other liabilities of the Obligor under this Agreement may have been discharged or terminated.
|
7.
|
OBLIGATION TO MAKE PAYMENT
|
7.1
|
Payment Immediately After Demand
The Obligor’s liability to make a payment under this Agreement shall arise immediately after demand for payment has been made in writing on the Obligor. In connection with any demand, the Lender may treat all Obligations as due and payable and may demand immediate payment from the Obligor of the total amount of its liabilities under this Agreement, whether or not all Obligations are otherwise due and payable at the time of demand.
|
7.2
|
Right to Enforce
Demands under this Agreement may be made from time to time, and the liabilities of the Obligor under this Agreement may be enforced, irrespective of:
|
|
(a)
|
whether any demands, steps or proceedings are being or have been made or taken against the Borrower and/or any third party; or
|
|
(b)
|
whether or in what order any security to which the Lender may be entitled in connection with the Credit Agreement is enforced.
|
7.3
|
Certificate as to Amount
A certificate of the Lender specifying the outstanding amount of the Obligations shall be conclusive evidence of that amount against the Obligor in the absence of any manifest error.
|
7.4
|
Interest
The Obligor’s liabilities under this Agreement shall bear interest from the date of demand at the highest rate of interest per annum that is applicable to any part of the Obligations.
|
7.5
|
Rights Cumulative
No failure on the part of the Lender to exercise, nor any delay in exercising, any right or remedy under the Credit Agreement or this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. Neither the taking of any judicial or extra-judicial proceeding nor the exercise of rights under any security held from the Obligor shall extinguish the liability of the Obligor to pay and perform its liabilities under this Agreement, nor shall the acceptance of any payment or security create any novation. No covenant, representation or warranty of the Obligor in this Agreement shall merge in any judgment. The rights and remedies provided in this Agreement are cumulative and do not exclude any rights and remedies provided by law or otherwise.
|
7.6
|
Limitation Periods
To the extent that any limitation period applies to any claim for payment of the Obligations or remedy for enforcement of the Obligations, the Obligor agrees that:
|
|
(a)
|
any limitation period is expressly excluded and waived entirely if permitted by applicable law;
|
|
(b)
|
if a complete exclusion and waiver of any limitation period is not permitted by applicable law, any limitation period is extended to the maximum length permitted by applicable law;
|
|
(c)
|
any applicable limitation period shall not begin before an express demand for payment of the Obligations is made in writing by the Lender to the Obligor;
|
|
(d)
|
any applicable limitation period shall begin afresh upon any payment or other acknowledgment of the Obligations by the Obligor; and
|
|
(e)
|
this Agreement is a “business agreement” as defined in the
Limitations Act, 2002
(Ontario) if that Act applies.
|
8.
|
PAYMENTS
|
8.1
|
Withholdings Etc.
Any payment made by the Obligor under this Agreement shall be made without any deduction or withholding for or on account of tax and without any set-off or counterclaim of any kind. However, if the Obligor is required by law to deduct, withhold or pay any tax in respect of any payment under this Agreement, then (i) the Obligor shall pay additional sums under this Agreement as necessary so that, after making or allowing for all required deductions, withholdings and payments (including deductions, withholdings and payments applicable to additional sums payable under this Section), the Lender receives an amount equal to the sum it would have received had no deductions, withholdings or payments been required, (ii) the Obligor shall make any deductions, withholdings or payments required by law to be made by it and (iii) the Obligor shall timely pay the full amount required to be deducted, withheld or paid to the relevant governmental authority in accordance with applicable law.
|
8.2
|
Currency and Place of Payment
Payment shall be made in the currency or currencies specified in the demand for payment to the Lender at the Branch of Account, or another address or account that the Lender may specify by written notice to the Obligor from time to time.
|
8.3
|
Currency Indemnity
If a judgment or order is rendered by any court or tribunal for the payment of any amount owing to the Lender under or in connection with this Agreement and the judgment or order is expressed in a currency (the “
Judgment Currency
”) other than the currency payable under or in connection with this Agreement (the “
Agreed Currency
”), the Obligor shall indemnify and hold the Lender harmless against any deficiency in terms of the Agreed Currency in the amount received by the Lender arising or resulting from any variation as between (a) the rate at which the Agreed Currency is converted into the Judgment Currency for the purposes of the judgment or order, and (b) the rate at which the Lender is able to purchase the Agreed Currency in accordance with normal banking practice with the amount of the Judgment Currency actually received by the Lender on the date of receipt. The indemnity in this Section shall constitute a separate and independent liability from the other liabilities of the Obligor under this Agreement, shall apply irrespective of any indulgence granted by the Lender, and shall be secured by any security held by the Lender from the Obligor.
|
8.4
|
Set-Off
The Lender and each of its affiliates is authorized at any time and from time to time to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by the Lender or affiliate to or for the credit or the account of the Obligor against any and all of the liabilities of the Obligor now or in the future existing under this Agreement, irrespective of whether or not the Lender has made any demand under this Agreement and although those liabilities of the Obligor may be contingent or unmatured or are owed to a branch or office of the Lender different from the branch or office holding any deposit or obligated to the Obligor. The rights of the Lender and its affiliates under this Section 8.4 are in addition to other rights and remedies (including other rights of set-off, consolidation of accounts and bankers’ lien) that the Lender or its affiliates may have.
|
9.
|
NOTICES
|
9.1
|
Notices in Writing
Any communication to be made under this Agreement shall be made in accordance with the Credit Agreement.
|
10.
|
ENTIRE AGREEMENT; SEVERABILITY
|
10.1
|
Entire Agreement
This Agreement embodies all the agreements between the Obligor and the Lender relating to the guarantee and indemnity contemplated in this Agreement. No party shall be bound by any representation or promise made by any person relating to this Agreement that is not embodied in it. It is specifically agreed that the Lender shall not be bound by any representation or promise made by the Borrower to the Obligor. Any waiver of, or consent to departure from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the Lender, and only in the specific instance and for the specific purpose for which it has been given.
|
10.2
|
Severability
If, in any jurisdiction, any provision of this Agreement or its application to any circumstance is restricted, prohibited or unenforceable, that provision shall, as to that jurisdiction, be ineffective only to the extent of that restriction, prohibition or unenforceability without invalidating the remaining provisions of this Agreement, without affecting the validity or enforceability of that provision in any other jurisdiction and, if applicable, without affecting its application to other circumstances.
|
11.
|
DELIVERY OF AGREEMENT
|
11.1
|
Counterparts
This Agreement may be executed in any number of counterparts and all counterparts taken together shall be deemed to constitute one agreement.
|
11.2
|
Delivery
To evidence the fact that it has executed this Agreement, the Obligor may send a signed copy of this Agreement or its signature to this Agreement by facsimile transmission or e-mail and the signature sent in that way shall be deemed to be its original signature for all purposes.
|
11.3
|
No Conditions
Possession of this Agreement by the Lender shall be conclusive evidence against the Obligor that the 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 that it is not executed by any proposed signatory.
|
11.4
|
Receipt and Waiver
The Obligor acknowledges receipt of a copy of this Agreement. The Obligor waives any notice of acceptance of this Agreement by the Lender. The Obligor also waives the right to receive a copy of any financing statement or financing change statement that may be registered in connection with this Agreement or any verification statement issued with respect to a registration, if waiver is not otherwise prohibited by law. The Obligor agrees that the Lender may from time to time provide information regarding this Agreement and the Obligations to persons that the Lender believes in good faith are entitled to the information under applicable law.
|
12.
|
GOVERNING LAW
|
12.1
|
Governing Law
This Agreement and any dispute arising from or in relation to this Agreement shall be governed by, and interpreted and enforced in accordance with, the law of the Province of Ontario and the laws of Canada applicable in that province, excluding the conflict of law rules of that province.
|
12.2
|
Obligor’s Exclusive Dispute Resolution Jurisdiction
The Obligor agrees that the courts of the Province of Ontario have exclusive jurisdiction over any dispute arising from or in relation to this Agreement and the Obligor irrevocably and unconditionally attorns to the exclusive jurisdiction of that province. The Obligor agrees that the courts of that province are the most appropriate and convenient forum to settle disputes and agrees not to argue to the contrary.
|
12.3
|
Lender Entitled to Concurrent Jurisdiction
Despite Section 12.2, the Lender is permitted to take proceedings in relation to any dispute arising from or in relation to this Agreement in any court of another province or another state with jurisdiction and to the extent allowed by law may take concurrent proceedings in any number of jurisdictions.
|
13.
|
SUCCESSORS AND ASSIGNS
|
13.1
|
Successors and Assigns
The Obligor may not assign or transfer all or any part of its liabilities under this Agreement. This Agreement shall enure to the benefit of the Lender and its successors and assigns and be binding on the Obligor and its successors and any permitted assigns.
|
YAPPN CANADA INC.
|
||
By:
|
/s/ David Lucatch | |
Name: David Lucatch – A. S. O.
|
TO:
|
Toronto Tree Top Holdings Ltd. (the “
Lender
”)
|
DATE:
|
April 7, 2014
|
A.
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The Obligor (as defined herein) is required to deliver this Agreement under the terms of the Credit Agreement. The Obligor will derive substantial direct and indirect benefits and advantages from the financial accommodations to the Borrower under the Credit Agreement, and it will be to the Obligor’s direct interest and economic benefit to deliver this Agreement in order to allow the Borrower to obtain those financial accommodations. The Obligor acknowledges the value of that benefit.
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1.
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INTERPRETATION
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1.1
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Capitalized Terms
In this Agreement, except where the context otherwise requires, capitalized terms that are used and not otherwise defined have the meanings defined in the Credit Agreement (as defined below), and:
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(a)
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“
Borrower
” means Yappn Corp. and its successors.
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(b)
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“
Credit Agreement
” means the credit agreement dated as of the date hereof entered into by the Borrower, as borrower, and the Lender, as lender, as amended, supplemented, restated, modified or replaced from time to time.
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(c)
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“
Obligations
” means all debts, liabilities and obligations of the Borrower to the Lender under or in connection with the Credit Agreement, whether present or future, direct or indirect, absolute or contingent, matured or not, at any time owing or remaining unpaid by the Borrower to the Lender in any currency, whether arising from dealings between the Lender and the Borrower or from other dealings or proceedings by which the Lender may be or become in any manner whatever a creditor of the Borrower, and wherever incurred, and whether incurred by the Borrower alone or with another or others and whether as principal or surety (including obligations under or in connection with any guarantee or indemnity given by the Borrower), and all interest, fees, commissions and legal and other costs, charges and expenses owing or remaining unpaid by the Borrower to the Lender in any currency.
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1.2
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No
Contra Proferentem
This Agreement has been negotiated by the Obligor and the Lender with the benefit of legal representation, and any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply to the construction or interpretation of this Agreement.
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1.3
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Conflict With Credit Agreement
If there is any conflict or inconsistency between the terms of the Credit Agreement and the terms of this Agreement, the provisions of the Credit Agreement shall govern to the extent necessary to remove the conflict or inconsistency.
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1.4
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Other Interpretation Rules
In this Agreement:
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(a)
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The division into Sections and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement.
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(b)
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Unless otherwise specified or the context otherwise requires, (i) “including” or “includes” means “including (or includes) but is not limited to” and shall not be construed to limit any general statement preceding it to the specific or similar items or matters immediately following it, (ii) a reference to any legislation, statutory instrument or regulation or a section of it is a reference to the legislation, statutory instrument, regulation or section as amended, restated and re-enacted from time to time, and (iii) words in the singular include the plural and vice-versa and words in one gender include all genders.
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(c)
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Unless otherwise specified or the context otherwise requires, any reference in this Agreement to payment of the Obligations includes performance of the Obligations.
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2.
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GUARANTEE AND INDEMNITY
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2.1
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Guarantee
The Obligor unconditionally guarantees payment to the Lender of the Obligations.
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2.2
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Indemnity
The Obligor also unconditionally agrees that, if the Borrower does not unconditionally and irrevocably pay any Obligations when due and those Obligations are not recoverable from the Obligor for any reason under Section 2.1, the Obligor shall indemnify the Lender immediately on demand against any cost, loss, damage, expense or liability suffered by the Lender as a result of the Borrower’s failure to do so.
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2.3
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Separate Liabilities
The liabilities of the Obligor under Sections 2.1 and 2.2 are separate and distinct from each other, but the provisions of this Agreement shall apply to the liabilities under both of those Sections unless the context otherwise requires.
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2.4
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Limit on Liability
The liability of the Obligor under this Agreement is unlimited.
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2.5
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Irrevocable
This Agreement is irrevocable by the Obligor, and the Obligor expressly and unconditionally waives any right to terminate this Agreement.
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3.
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CONTINUING AGREEMENT AND REINSTATEMENT
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3.1
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Continuing Agreement
This Agreement is a continuing guarantee and indemnity for a current or running account and will extend to the ultimate balance of the Obligations, regardless of any intermediate payment or discharge of the Obligations in whole or in part. Without limiting the foregoing, the Obligations may include advances and re-advances under revolving credit facilities, which permit borrowing, repayment of all or part of the amount borrowed and re-borrowing of amounts previously paid.
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3.2
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Payments in Gross
Until this Agreement has been terminated in accordance with Section 3.4, all amounts of any kind received by the Lender from any source in respect of the Obligations shall be regarded for all purposes as payments in gross without any right on the part of the Obligor to claim the benefit of those amounts in reduction of its liabilities under this Agreement.
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3.3
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Reinstatement
If at any time any payment of the Obligations is or must be rescinded or returned by the Lender as a result of insolvency or reorganization of the Borrower or any other person, or for any other reason whatsoever, the Obligations will be deemed to have continued in existence and this Agreement shall continue to be effective, or be reinstated, as if the payment had not occurred. The Lender may concede or compromise any claim that any payment ought to be rescinded or returned without diminishing the liability of the Obligor under this Section.
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3.4
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Termination
If the Obligations have been indefeasibly paid in full in cash and if all obligations of the Lender to extend credit under the Credit Agreement has been cancelled, then the Lender shall, at the request and expense of the Obligor, execute and deliver whatever documents are reasonably required to acknowledge the termination of this Agreement.
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4.
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WAIVER OF DEFENCES AND OTHER MATTERS
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4.1
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In Addition to Other Rights; No Marshalling
This Agreement is in addition to and is not in any way prejudiced by or merged with any other guarantee, indemnity or security now or subsequently held by the Lender in respect of any Obligations. The Lender shall be under no obligation to marshal in favour of the Obligor any other guarantees or other securities or any money or other property that the Lender may be entitled to receive or may have a claim upon.
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4.2
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Liabilities Unconditional
The liabilities of the Obligor under this Agreement are absolute and unconditional, and will not be affected by any act, omission, matter or thing that, but for this Section, would reduce, release or prejudice any of its liabilities under this Agreement, or that might constitute a legal or equitable defence to or a discharge, limitation or reduction of the Obligor’s liabilities under this Agreement, including the following, whether or not known to it or the Lender or consented to by it or the Lender:
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(a)
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any discontinuance, reduction, increase, extension or other variance in the credit granted by the Lender to the Borrower or any time, waiver or consent granted to, or any release of or compromise with, the Borrower or any other person;
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(b)
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any amendment, supplement or restatement (however fundamental) or replacement of the Credit Agreement;
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(c)
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any unenforceability, illegality or invalidity of any obligation of any person under or in connection the Credit Agreement, including any bar to recovery under any statute of limitations;
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(d)
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the death or loss of capacity of the Borrower, any change in the name of the Borrower, or in the membership of the Borrower, if a partnership, or in the ownership, objects, capital structure or constitution of the Borrower, if a corporation, the sale of all or any part of the Borrower’s business or the Borrower being amalgamated or merged with one or more other entities, but shall, notwithstanding any such event, continue to apply to all Obligations whether previously or subsequently incurred; and in the case of a change in the membership of a Borrower that is a partnership or in the case of the Borrower being amalgamated or merged with one or more other entities, this Agreement shall also apply to the liabilities of the resulting or continuing entity, and the term “Borrower” shall include each resulting or continuing entity;
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(e)
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any credit being granted or continued by the Lender purportedly to or for the Borrower after the death, loss of capacity, bankruptcy or insolvency of the Borrower;
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(f)
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any lack or limitation of power, incapacity or disability of the Borrower or of the directors, partners or agents of the Borrower, or the Borrower not being a legal or suable entity, or any irregularity, defect or lack of formality in the obtaining of credit by the Borrower;
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(g)
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any bankruptcy, insolvency or similar proceedings, including any stay of or moratorium on proceedings;
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(h)
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any impossibility, impracticability, frustration of purpose,
force majeure
, illegality or act of governmental authority affecting the Credit Agreement;
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(i)
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any taking or failure to take security, any loss of or loss of value of security for the Obligations, any invalidity, lack of perfection or unenforceability of any security, or any enforcement of, failure to enforce or irregularity or deficiency in the enforcement of any security; or
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(j)
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the existence of any claim, set-off or other right that the Obligor may have against the Borrower, the Lender or any other person, whether in connection with the Credit Agreement or otherwise.
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4.3
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Information Concerning Borrower
The Obligor acknowledges that it is presently familiar with the Credit Agreement, the financial condition of the Borrower and any other circumstances affecting the risk incurred by the Obligor in connection with this Agreement. The Obligor shall be solely responsible for keeping itself informed concerning those matters in the future. The Obligor acknowledges that the Lender has no obligation to provide any information concerning those matters now or in the future and that, if it does so at any time, it shall have no obligation to update the information or provide other information subsequently.
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4.4
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No Obligation to Enforce Other Rights
The Obligor waives any right it may have of requiring the Lender (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Obligor under this Agreement and the Obligor waives all benefits of discussion and division. These waivers apply irrespective of any law or any provision of the Credit Agreement to the contrary.
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5.
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USE OF AMOUNTS RECEIVED
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5.1
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Use of Amounts Received
Until this Agreement has been terminated in accordance with Section 3.4, the Lender (or any trustee or agent on its behalf) may:
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(a)
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refrain from applying any money received or enforcing any other security or rights held by or on behalf of the Lender in respect of the Obligations, or apply any money and enforce any other security or rights in any manner and order as it sees fit;
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(b)
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change any application of money received in whole or in part from time to time; and
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(c)
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hold in a suspense account any money received from the Obligor or on account of the Obligor’s liabilities under this Agreement.
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6.
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POSTPONEMENT OF OBLIGOR’S RIGHTS
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6.1
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Postponement of Subrogation Etc.
Until this Agreement has been terminated in accordance with Section 3.4, the Obligor shall not exercise any rights that it may have by reason of performance by it of its liabilities under this Agreement:
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(a)
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to be indemnified by the Borrower;
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(b)
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to claim contribution from any other guarantor of the Obligations; or
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(c)
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to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Lender under the Credit Agreement.
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6.2
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Postponement of Set-Off Etc.
Until this Agreement has been terminated in accordance with Section 3.4, the Obligor shall not claim any set-off or counterclaim against the Borrower as a result of any liability of the Borrower to the Obligor, or claim or prove in the bankruptcy or insolvency of the Borrower in competition with the Lender.
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6.3
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Postponement and Assignment
Except for the payment of past, current and future amounts owing from the Borrower to the Obligor pursuant to the services agreement between the Borrower and the Obligor, the Obligor postpones payment of all present and future debts, liabilities and obligations of the Borrower to the Obligor until this Agreement has been terminated in accordance with Section 3.4. The Obligor assigns to the Lender all present and future debts, liabilities and obligations of the Borrower to the Obligor as security for payment of the Obligor’s liabilities under this Agreement, and agrees that all money received by the Obligor in respect of those debts, liabilities and obligations shall be received in trust for the Lender and forthwith upon receipt shall be paid over to the Lender, all without in any way lessening or limiting the liabilities of the Obligor under this Agreement. The provisions of this Section 6.3 are independent of the other provisions of this Agreement and shall remain in full force and effect until this Agreement has been terminated in accordance with Section 3.4, notwithstanding that the other liabilities of the Obligor under this Agreement may have been discharged or terminated.
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7.
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OBLIGATION TO MAKE PAYMENT
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7.1
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Payment Immediately After Demand
The Obligor’s liability to make a payment under this Agreement shall arise immediately after demand for payment has been made in writing on the Obligor. In connection with any demand, the Lender may treat all Obligations as due and payable and may demand immediate payment from the Obligor of the total amount of its liabilities under this Agreement, whether or not all Obligations are otherwise due and payable at the time of demand.
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7.2
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Right to Enforce
Demands under this Agreement may be made from time to time, and the liabilities of the Obligor under this Agreement may be enforced, irrespective of:
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(a)
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whether any demands, steps or proceedings are being or have been made or taken against the Borrower and/or any third party; or
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(b)
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whether or in what order any security to which the Lender may be entitled in connection with the Credit Agreement is enforced.
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7.3
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Certificate as to Amount
A certificate of the Lender specifying the outstanding amount of the Obligations shall be conclusive evidence of that amount against the Obligor in the absence of any manifest error.
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7.4
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Interest
The Obligor’s liabilities under this Agreement shall bear interest from the date of demand at the highest rate of interest per annum that is applicable to any part of the Obligations.
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7.5
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Rights Cumulative
No failure on the part of the Lender to exercise, nor any delay in exercising, any right or remedy under the Credit Agreement or this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. Neither the taking of any judicial or extra-judicial proceeding nor the exercise of rights under any security held from the Obligor shall extinguish the liability of the Obligor to pay and perform its liabilities under this Agreement, nor shall the acceptance of any payment or security create any novation. No covenant, representation or warranty of the Obligor in this Agreement shall merge in any judgment. The rights and remedies provided in this Agreement are cumulative and do not exclude any rights and remedies provided by law or otherwise.
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7.6
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Limitation Periods
To the extent that any limitation period applies to any claim for payment of the Obligations or remedy for enforcement of the Obligations, the Obligor agrees that:
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(a)
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any limitation period is expressly excluded and waived entirely if permitted by applicable law;
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(b)
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if a complete exclusion and waiver of any limitation period is not permitted by applicable law, any limitation period is extended to the maximum length permitted by applicable law;
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(c)
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any applicable limitation period shall not begin before an express demand for payment of the Obligations is made in writing by the Lender to the Obligor;
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(d)
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any applicable limitation period shall begin afresh upon any payment or other acknowledgment of the Obligations by the Obligor; and
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(e)
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this Agreement is a “business agreement” as defined in the
Limitations Act, 2002
(Ontario) if that Act applies.
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8.
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PAYMENTS
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8.1
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Withholdings Etc.
Any payment made by the Obligor under this Agreement shall be made without any deduction or withholding for or on account of tax and without any set-off or counterclaim of any kind. However, if the Obligor is required by law to deduct, withhold or pay any tax in respect of any payment under this Agreement, then (i) the Obligor shall pay additional sums under this Agreement as necessary so that, after making or allowing for all required deductions, withholdings and payments (including deductions, withholdings and payments applicable to additional sums payable under this Section), the Lender receives an amount equal to the sum it would have received had no deductions, withholdings or payments been required, (ii) the Obligor shall make any deductions, withholdings or payments required by law to be made by it and (iii) the Obligor shall timely pay the full amount required to be deducted, withheld or paid to the relevant governmental authority in accordance with applicable law.
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8.2
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Currency and Place of Payment
Payment shall be made in the currency or currencies specified in the demand for payment to the Lender at the Branch of Account, or another address or account that the Lender may specify by written notice to the Obligor from time to time.
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8.3
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Currency Indemnity
If a judgment or order is rendered by any court or tribunal for the payment of any amount owing to the Lender under or in connection with this Agreement and the judgment or order is expressed in a currency (the “
Judgment Currency
”) other than the currency payable under or in connection with this Agreement (the “
Agreed Currency
”), the Obligor shall indemnify and hold the Lender harmless against any deficiency in terms of the Agreed Currency in the amount received by the Lender arising or resulting from any variation as between (a) the rate at which the Agreed Currency is converted into the Judgment Currency for the purposes of the judgment or order, and (b) the rate at which the Lender is able to purchase the Agreed Currency in accordance with normal banking practice with the amount of the Judgment Currency actually received by the Lender on the date of receipt. The indemnity in this Section shall constitute a separate and independent liability from the other liabilities of the Obligor under this Agreement, shall apply irrespective of any indulgence granted by the Lender, and shall be secured by any security held by the Lender from the Obligor.
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8.4
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Set-Off
The Lender and each of its affiliates is authorized at any time and from time to time to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by the Lender or affiliate to or for the credit or the account of the Obligor against any and all of the liabilities of the Obligor now or in the future existing under this Agreement, irrespective of whether or not the Lender has made any demand under this Agreement and although those liabilities of the Obligor may be contingent or unmatured or are owed to a branch or office of the Lender different from the branch or office holding any deposit or obligated to the Obligor. The rights of the Lender and its affiliates under this Section 8.4 are in addition to other rights and remedies (including other rights of set-off, consolidation of accounts and bankers’ lien) that the Lender or its affiliates may have.
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9.
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NOTICES
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9.1
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Notices in Writing
Any communication to be made under this Agreement shall be made in accordance with the Credit Agreement.
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10.
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ENTIRE AGREEMENT; SEVERABILITY
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10.1
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Entire Agreement
This Agreement embodies all the agreements between the Obligor and the Lender relating to the guarantee and indemnity contemplated in this Agreement. No party shall be bound by any representation or promise made by any person relating to this Agreement that is not embodied in it. It is specifically agreed that the Lender shall not be bound by any representation or promise made by the Borrower to the Obligor. Any waiver of, or consent to departure from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the Lender, and only in the specific instance and for the specific purpose for which it has been given.
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10.2
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Severability
If, in any jurisdiction, any provision of this Agreement or its application to any circumstance is restricted, prohibited or unenforceable, that provision shall, as to that jurisdiction, be ineffective only to the extent of that restriction, prohibition or unenforceability without invalidating the remaining provisions of this Agreement, without affecting the validity or enforceability of that provision in any other jurisdiction and, if applicable, without affecting its application to other circumstances.
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11.
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DELIVERY OF AGREEMENT
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11.1
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Counterparts
This Agreement may be executed in any number of counterparts and all counterparts taken together shall be deemed to constitute one agreement.
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11.2
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Delivery
To evidence the fact that it has executed this Agreement, the Obligor may send a signed copy of this Agreement or its signature to this Agreement by facsimile transmission or e-mail and the signature sent in that way shall be deemed to be its original signature for all purposes.
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11.3
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No Conditions
Possession of this Agreement by the Lender shall be conclusive evidence against the Obligor that the 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 that it is not executed by any proposed signatory.
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11.4
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Receipt and Waiver
The Obligor acknowledges receipt of a copy of this Agreement. The Obligor waives any notice of acceptance of this Agreement by the Lender. The Obligor also waives the right to receive a copy of any financing statement or financing change statement that may be registered in connection with this Agreement or any verification statement issued with respect to a registration, if waiver is not otherwise prohibited by law. The Obligor agrees that the Lender may from time to time provide information regarding this Agreement and the Obligations to persons that the Lender believes in good faith are entitled to the information under applicable law.
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12.
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GOVERNING LAW
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12.1
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Governing Law
This Agreement and any dispute arising from or in relation to this Agreement shall be governed by, and interpreted and enforced in accordance with, the law of the Province of Ontario and the laws of Canada applicable in that province, excluding the conflict of law rules of that province.
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12.2
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Obligor’s Exclusive Dispute Resolution Jurisdiction
The Obligor agrees that the courts of the Province of Ontario have exclusive jurisdiction over any dispute arising from or in relation to this Agreement and the Obligor irrevocably and unconditionally attorns to the exclusive jurisdiction of that province. The Obligor agrees that the courts of that province are the most appropriate and convenient forum to settle disputes and agrees not to argue to the contrary.
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12.3
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Lender Entitled to Concurrent Jurisdiction
Despite Section 12.2, the Lender is permitted to take proceedings in relation to any dispute arising from or in relation to this Agreement in any court of another province or another state with jurisdiction and to the extent allowed by law may take concurrent proceedings in any number of jurisdictions.
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13.
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SUCCESSORS AND ASSIGNS
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13.1
|
Successors and Assigns
The Obligor may not assign or transfer all or any part of its liabilities under this Agreement. This Agreement shall enure to the benefit of the Lender and its successors and assigns and be binding on the Obligor and its successors and any permitted assigns.
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INTERTAINMENT MEDIA INC.
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||
By:
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/s/ David Lucatch | |
Name: David Lucatch – A. S. O.
|
1.
|
FOR VALUABLE CONSIDERATION,
receipt whereof is hereby acknowledged and to secure the obligations of the undersigned (the “
Debtor
”) to Toronto Tree Top Holdings Ltd. (“
TTTHL
”) the Debtor hereby assigns and transfers to TTTHL, all of the Debtor’s right, title and interest in and to the collateral (the “
Collateral
”) described in Schedule “A” hereto and the proceeds thereof.
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2.
|
The Debtor agrees that the Collateral shall be held by TTTHL as a general and continuing collateral security for the payment of all obligations, indebtedness and liabilities, present of future, direct or indirect, absolute or contingent, matured or not, of the Debtor to TTTHL, wheresoever and howsoever incurred, and any ultimate unpaid balance thereof, and as a first and prior claim upon the Collateral.
|
3.
|
The Debtor undertakes and agrees to furnish and deliver to TTTHL all the deeds, documents, writing, papers, books of account and other books relating to Collateral, and to furnish TTTHL with all information which may assist in the collection thereof.
|
4.
|
The Debtor covenants, represents and warrants to TTTHL as follows and acknowledges that TTTHL is relying upon such covenants, representations and warranties in entering into this Agreement and in advancing certain loans to the Debtor, namely that the Debtor is up-to-date in all material respects with all federal and state taxation and other remittances, including federal and state income tax, sales tax, social security or other taxes.
|
5.
|
The Debtor expressly authorizes TTTHL to collect, demand, sue for, enforce, recover and receive the Collateral and to give valid and binding receipts and discharges therefor and in respect thereof, the whole to the same extent and with the same effect as if TTTHL were the absolute owner thereof and without regard to the state of accounts between the Debtor and TTTHL.
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6.
|
TTTHL may collect, realize, sell or otherwise deal with the Collateral or any part thereof in such manner, upon such terms and conditions and at such time or times, whether before or after default, as may seem to it advisable and without notice to Debtor.
|
7.
|
All monies collected or received by the Debtor in respect of the Collateral shall be received as trustee for TTTHL and shall be forthwith paid over to TTTHL by the Debtor.
|
8.
|
This agreement shall stand as collateral security to TTTHL for the general balance due at any time by the Debtor to TTTHL and all indebtedness for which the Debtor now is or are or may hereafter be liable to TTTHL and all renewals thereof.
|
9.
|
TTTHL may apply the amounts collected or received by it on account of such parts of the indebtedness and liabilities of the Debtor to TTTHL as to TTTHL seems best or hold the same in a separate collateral account for such time as it may see fit and then apply the same as aforesaid, the whole without prejudice to its claim for any deficiency.
|
10.
|
TTTHL may compound, compromise, grant extensions of time and other indulgences, take and give up securities, accept compositions, grant releases and discharges and otherwise deal with the Debtor and others, and with the Collateral and other securities as TTTHL may see fit, without prejudice to the liability of the Debtor or TTTHL’s right to hold and realize this security.
|
11.
|
TTTHL shall not be liable or accountable for any failure to realize or obtain payment of the Collateral or any part thereof and TTTHL shall not be bound to institute proceedings for the purpose of collecting, realizing or obtaining payment of the same or for the purpose of preserving any rights of TTTHL, the Debtor or any other person, firm or corporation in respect of the same, and TTTHL shall not be responsible for any loss or damage which may occur in consequence of the negligence of any officer, agent or solicitor employed in the collection or realization thereof.
|
12.
|
TTTHL may charge on its own behalf and also pay to others reasonable sums of expenses incurred and for services rendered (expressly including legal advice and services) in or in connection with collecting, realizing and/or obtaining payment of the Collateral or any part thereof and may add the amount of such sums to the indebtedness of the Debtor.
|
13.
|
The Debtor shall from time to time forthwith on TTTHL’s request furnish to TTTHL in writing all information requested relating to the aforesaid debts, accounts, claims, monies and chooses in action and the aforesaid contracts securities, bills, notes, books, papers and other documents and TTTHL shall be entitled from time to time to inspect such contracts securities, bills, notes, books, papers and other documents and make copies thereof and for such purpose TTTHL shall have access to all premises occupied by the Debtor.
|
14.
|
The Debtor shall from time to time forthwith on TTTHL’s request do, make and execute all such financing statement, further assignments, documents, acts, matters and things as may be required by TTTHL with respect to the Collateral these presents, and the Debtor hereby constitutes and appoints TTTHL the true, lawful and irrevocable attorney of the Debtor with full power of substitution to do, make and execute all such statements, assignments, documents, acts, matters or things with the right to use the name of the Debtor whenever and wherever it may deem necessary or expedient.
|
15.
|
The Debtor hereby irrevocably authorizes and directs any account debtor or other obliger in relation to the Debtor (a “
Relevant Party
”) to provide any and all information to TTTHL relating to the Collateral and the Debtor. The Debtor hereby irrevocably waives any confidentiality or other rights which it now has or may hereafter have by statute or otherwise to preserve the confidentiality of any information or records requested by TTTHL and authorizes and directs any Relevant Party to act accordingly.
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16.
|
This Agreement shall be a continuing agreement in every respect, and shall be binding upon the respective successors and assigns of the parties hereto. No remedy for the enforcement of the rights of TTTHL hereunder shall be exclusive of or dependent on any other such remedy, but anyone or more of such remedies may from time to time be exercised independently or in combination. The security interest created or provided for by this Agreement is intended to attach when this Agreement is signed by the Debtor and delivered to TTTHL.
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17.
|
This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.
|
18.
|
A facsimile counterpart of this Agreement shall be binding on each party hereto and fully effective for all purposes.
|