EXHIBIT
10.3
GENERAL
Security Agreement
THIS
GENERAL SECURITY AGREEMENT is dated for reference August 20, 2021 and made,
BETWEEN:
fogdog
energy solutions inc.,
a corporation formed pursuant to the laws of the Province of Alberta;
(the
“Debtor”)
AND:
Currencyworks,
inc., a corporation formed
pursuant to the laws of the state of Nevada;
(the
“Secured Party”)
Article
1
Definitions
1.1 Definitions
In
this Agreement, the following words and phrases will have the meanings set out below unless the parties or the context otherwise require(s).
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(a)
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“Act”
means the Personal Property Security Act of British Columbia and the regulations thereunder,
as amended, restated or replaced by successor legislation of comparable effect.
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(b)
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“Agreement”
or “this Agreement” means this Agreement including all recitals and schedules
hereto, as modified, amended, restated or replaced from time to time.
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(c)
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“Collateral”
means all of the Debtor’s present and after-acquired personal property and interests
therein of every nature and kind and wherever situate, including all personal property and
interests therein now or hereafter held by the Debtor in trust for any person(s) or by any
person(s) in trust for the Debtor, including the Intellectual Property and including all
proceeds derived therefrom that are present or after-acquired personal property or other
assets or undertaking of any nature or kind, tangible or intangible, legal or equitable,
wherever the same may be situate, (including proceeds derived directly or indirectly from
any dealing with the personal property charged hereby (including proceeds), all rights to
insurance payments and other payments as indemnity or compensation for loss thereof or damage
thereto, and all payments made in total or partial discharge or redemption of securities,
instruments, chattel paper or intangibles (including accounts) comprised therein).
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(d)
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“Loan
Agreement” means the agreement dated August 20, 2021, issued by the Secured Party
to, and accepted by the Debtor in connection with the Loan, as amended, restated or replaced
from time to time.
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(e)
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“Debtor”
means the party so described above and its successors and assigns, whether immediate or derivative.
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(f)
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“Encumbrances”
means any grant, mortgage, pledge, charge (whether fixed or floating), hypothec, assignment,
security interest, lien, privilege title retention agreement, levy, execution attachment
or other encumbrance (whether statutory or otherwise) whatsoever or any nature or kind and
howsoever created.
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(g)
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“Events
of Default” means the events of default described in Article 7 of this Agreement
and “Event of Default” means any one of them.
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(h)
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“Intellectual
Property” means intellectual or industrial property, including, without limitation,
all patents, patent applications, inventions, copyright (whether registered or not), copyright
applications, trademarks, (whether registered or not), trademark applications, trade names,
moral and personality rights, industrial designs (whether registered or not), industrial
design applications, trade secrets, know-how, confidential and other proprietary information,
which is presently owned or hereafter acquired by the Debtor, or for which the Debtor has
a license or waiver to use, and all income, royalties, damages, payments and claims now and
hereafter due and or payable to the Debtor with respect thereto.
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(i)
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“Loan”
means the loan(s) and other credit arrangements to be made or offered by the Secured Party
to or on behalf of the Debtor in the amount(s) as agreed to in writing between the Secured
Party and the Debtor from time to time as contemplated by the Loan Agreement.
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(j)
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“Obligants”
means the Debtor and all (other) Persons who are from time to time liable to the Secured
Party for the payment, observance or performance of the whole or any portion of the Secured
Obligations, whether directly or indirectly, absolutely or contingently, jointly, severally
or jointly and severally and includes all Persons who from time to time otherwise become
liable for, or who agree to indemnify the Secured Party for any loss, costs or damages as
a result of the failure of any other Persons to pay, observe or perform any of the Secured
Obligations and “Obligant” means any of them.
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(k)
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“Other
Document” means any instrument or document other than this Agreement which evidences,
secures or evidences or secures the payment, observance and performance of the Secured Obligations
in whole or in part or has been provided at the request of the Secured Party as a condition
to the availability of the Secured Obligations, whether now or at any time hereafter provided
by or on behalf of any one or more of the Obligants, including without limitation the Loan
Agreement.
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(l)
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“Permitted
Encumbrances” means as of any particular time in respect of any Collateral for
which the Lender has been granted a security interest pursuant to this Agreement, any of
the following:
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(i)
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any
Encumbrance in favour of the Lender; and
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(ii)
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any
Encumbrance consented to in writing by the Lender.
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(m)
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“Persons”
or “Person” means and includes any individual, sole proprietorship, corporation,
partnership, bank, joint venture, trust, unincorporated association, association, institution,
entity, party or government (whether national, federal, provincial, state, municipal, city,
county or otherwise and including any instrumentality, division, agency, body or department
thereof).
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(n)
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“Secured
Obligations” means the obligations of the Debtor to the Secured Party in connection
with the Loan (including all future advances and re-advances) whether direct or indirect,
absolute or contingent, joint, several or joint and several, matured or not, extended or
renewed, wherever and however incurred, of whatever nature or kind and whether or not evidenced
or secured by any Other Document, or provided for herein.
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(o)
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“Secured
Party” means the party so described above and its successors and assigns, whether
immediate or derivative.
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1.2
Applicability of Act
Words
used in this Agreement that are defined in the Act will have the respective meanings ascribed to them in the Act, unless otherwise defined
herein.
Article
2
SECURITY INTEREST
2.1
Creation of Security Interest
For
valuable consideration and as continuing security for the payment, observance and performance of each and all of the Secured Obligations
the Debtor:
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(a)
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grants
to the Secured Party a continuing security interest in the Collateral;
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(b)
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grants,
mortgages and charges the Collateral to the Secured Party by way of a fixed and specific
charge; and
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(c)
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absolutely
assigns the Collateral (other than any Intellectual Property) to the Secured Party.
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2.2 Exceptions
There
shall be excepted out of or excluded from the assignment(s), charge(s) and or security interest(s) created by this Agreement:
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(a)
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Last
10 Days of Lease: the last 10 days of the term created by any lease or agreement therefor
(but the Debtor shall stand possessed of the reversion thereby remaining upon trust to assign
and dispose thereof to any third party as the Secured Party shall direct);
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(b)
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Consumer
Goods: any consumer goods of the Debtor; and
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(c)
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Agreements
Requiring Consent: with respect to each agreement or other asset that requires the consent
or approval of another party thereto for the creation of a security interest or charge therein,
the security interests or charges created hereby will not become effective therein until
all such consents or approvals have been obtained, or until such other assurances as may
be acceptable to the Secured Party have been received, but until then the Debtor shall stand
possessed of such asset in trust to dispose of as the Secured Party may direct.
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2.3 Attachment
The
Debtor acknowledges that value has been given, the security interests hereby created attach upon the execution of this Agreement (or
in the case of any after acquired property, upon the date of acquisition thereof by or on behalf of the Debtor) and the Debtor has (or
in the case of after acquired property will have) rights in the Collateral.
2.4 Purchase
Money Security Interests
The
Debtor acknowledges that the security interest created hereunder secures advances made and future advances to be made by the Secured
Party to the Debtor for the purpose of enabling the Debtor to acquire rights in the Collateral.
Article
3
SECURED OBLIGATIONS
3.1 Secured
Obligations
This
Agreement, the Collateral and the security and other interests hereby created are in addition to and not in substitution for any other
security interest now or hereafter held by the Secured Party from the Debtor or from any other Person whomsoever and will be general
and continuing security for the payment, performance and observance of the Secured Obligations.
Article
4
DEBTOR’S REPRESENTATIONS AND WARRANTIES
4.1 General
The
Debtor makes the representations and warranties set out in this paragraph 4.1 to and for the benefit of the Secured Party.
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(a)
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Incorporation:
The Debtor is duly incorporated, properly organized and validly existing under the laws
of the Province of British Columbia.
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(b)
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Power
and Authority: The Debtor has full power and lawful authority:
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(i)
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to
own real and personal property; and
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(ii)
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to
borrow and guarantee the repayment of money and grant security therefor (including this Agreement
and the security interest hereby created).
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(c)
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Proceedings
and Enforceability: The Debtor represents and warrants that this Agreement is granted
in accordance with resolutions of the directors (and of the shareholders as applicable) of
the Debtor as the case may be and all other matters and things have been done and performed
so as to authorize and make the execution and delivery of this Agreement and the performance
of the Secured Obligations hereunder, a valid and legally binding obligation of the Debtor
enforceable in accordance with its terms, subject only to bankruptcy, insolvency or other
statutes or judicial decisions affecting the enforcement of creditors’ rights generally
and to general principles of equity.
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(d)
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No
Actions or Material Adverse Changes: There is no action or proceeding pending or, to
the knowledge of the Debtor, threatened against the Debtor before any court, administrative
agency, tribunal, arbitrator, government or governmental agency, and there is no fact known
to the Debtor and not disclosed to the Secured Party which might involve any material adverse
change in the Collateral, real property, business, prospects or condition of the Debtor,
or which question the validity of this Agreement or any other material agreement to which
the Debtor is a party (or the Debtor’s ability to perform its obligations under this
Agreement) and there are no outstanding judgments, writs of execution, work orders, injunctions,
directives against the Debtor, the Collateral or its real property.
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(e)
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Non-Conflict:
Neither the execution nor the performance of this Agreement requires the approval of
any regulatory agency having jurisdiction over the Debtor nor is this Agreement in contravention
of or in conflict with the articles, by-laws or resolutions of the directors (or shareholders)
of the Debtor, or of the provisions of any agreement to which the Debtor is a party or by
which any of its property may be bound or of any statute, regulation, by-law, ordinance or
other law, or of any judgment, decree, award, ruling or order to which the Debtor or any
of its property may be subject.
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(f)
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No
Default: The Debtor is not in breach or default under any agreement to which it is a
party which if not cured would have a material adverse effect upon the Debtor or the Collateral.
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(g)
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No
Liens: Except for Permitted Encumbrances, the Debtor has paid and discharged all claims
and demands of all employees, contractors, subcontractors, material men, mechanics, carriers,
warehousemen, landlords, and other like persons, and all governmental taxes, assessments,
withholdings, remittances, charges, levies, and claims levied or imposed, which, if unpaid,
become or might become an Encumbrance upon any or all of the properties, assets, earnings,
or operations of the Debtor.
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(h)
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Ownership
and Collateral Free of Encumbrances: The Debtor is the owner of or has rights in the
Collateral free and clear of all Encumbrances whatsoever save only Permitted Encumbrances.
The Debtor has not, within the last 60 days, acquired rights in the Collateral, excluding
the Intellectual Property, from a vendor, lessor or other person where its chief executive
office or principal residence is, or within the last 60 days has been, located outside of
British Columbia.
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(i)
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No
Other Corporate Names or Styles: The Debtor does not now carry on business under or use
any name or style other than the names specified in this Agreement.
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(j)
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Chief
Executive Office: The Debtor has its chief executive office at the location described
in Schedule “A”.
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(k)
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Location
of Collateral: The Collateral will be maintained (or in the case of mobile goods based)
at the locations described in Schedule “A” or at any other location in British
Columbia or any other jurisdictions disclosed in Schedule “A”.
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(l)
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Insurance:
The Collateral is insured in accordance with the terms hereof.
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(m)
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Serial
Numbered Goods: The type, make (or manufacturer), model and serial number of each motor
vehicle, trailer, manufactured home, boat, outboard motor and aircraft included in the Collateral
and which is not inventory is set out in Schedule “A”.
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(n)
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Legal
and Trade Names: Each name of the Debtor (including its name in any French or combined
English-French form) is set out on the first page hereof, and the Debtor has not had, used,
or carried on business under, and will not at any time have, use or carry on business under,
any other name (including any French or combined English-French form) except as disclosed
in Schedule “A” or upon giving 15 days’ prior written notice to the Secured
Party.
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(o)
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Rights
in Collateral: No Person other than the Debtor has any rights in the Collateral, excluding
the Intellectual Property, except as noted in Schedule “A”.
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(p)
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Solvency:
The assets of the Debtor exceeds its liabilities and the Debtor is able to meet its obligations
as the same become due.
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(q)
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Intellectual
Property:
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(i)
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Ownership:
The Debtor is the owner of the Intellectual Property applications and registrations (if any)
described in Schedule “A”; there are no outstanding claims of ownership by third
parties in respect of such registrations and applications; and all are valid and in good
standing.
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(ii)
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Trade
Marks: Only the Debtor is using the trade-marks described in Schedule “A”,
or if there are any third-party users of the Debtor’s trade-marks, such third-party
users are properly licensed to use such trade-marks.
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(iii)
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Assignments:
All assignments and Other Document affecting the Debtor’s Intellectual Property
rights have been disclosed and provided to the Secured Party.
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(iv)
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Claims:
There are no outstanding or threatened claims or proceedings with respect to the Debtor’s
Intellectual Property.
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(v)
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Third
Party Intellectual Property: All necessary assignments and license agreements have been
properly executed by the Debtor for use of third-party Intellectual Property.
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Article
5
DEBTOR’S COVENANTS
5.1 General
Covenants
The
Debtor covenants and agrees with the Secured Party as set forth in this Section 5.1 unless compliance with any such covenants is waived
by the Secured Party in writing, or unless non-compliance with any such covenants is otherwise consented to by the Secured Party by written
agreement with the Debtor.
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(a)
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Compliance
with Secured Obligations: The Debtor shall strictly comply with all of the Secured Obligations.
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(b)
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Use
of Advances: All advances, including future advances, advanced or extended by the Secured
Party to or for the benefit of the Debtor shall be used in the ordinary course of the Debtor’s
business for the purposes agreed to by the Secured Party and for no other purpose, and the
Debtor shall supply the Secured Party with such evidence as it may reasonably request from
time to time as to the application of such advance.
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(c)
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Keep
Collateral in Good Repair: The Debtor shall keep the Collateral, excluding the Intellectual
Property, in good order, condition and repair.
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(d)
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Conduct
of Business: The Debtor shall carry on and conduct its affairs in a proper and efficient
manner so as to protect and preserve the Collateral, as is reasonable in the ordinary course
of business, and shall maintain places of business at the locations disclosed in Schedule
“A”.
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(e)
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Payment
of Other Sums Due: The Debtor shall pay when due all amounts which are payable by it
in connection with the Collateral, howsoever arising, including without limiting the generality
of the foregoing, all rents, charges, taxes, rates, levies, assessments, fees and duties
of every nature which may be levied, assessed or imposed against or in respect of the Collateral
or the Debtor and shall provide the Secured Party with evidence of such payment upon request.
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(f)
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Notice
of Encumbrances and Proceedings: The Debtor shall promptly notify the Secured Party of
any Encumbrance made or asserted against any of the Collateral, and of any suit, action or
proceeding affecting any of the Collateral or which could affect the Debtor. The Debtor shall,
at its own expense, defend the Collateral against any and all Encumbrances (other than any
Permitted Encumbrances) and against any and all such suits, actions or proceedings.
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(g)
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No
Accessions or Fixtures: The Debtor shall prevent the Collateral from becoming an accession
to any property other than other items of the Collateral or from becoming a Fixture unless
the security interests hereby created rank prior to the interests of all other persons in
the applicable property.
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(h)
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Marking
the Collateral: The Debtor shall, at the request of the Secured Party, mark, or otherwise
take appropriate steps to identify the Collateral, excluding the Intellectual Property, to
indicate clearly that it is subject to the security interests hereby created.
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(i)
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Notice
of Loss of Collateral: The Debtor shall give immediate written notice to the Secured
Party of all material loss or damage to or loss or possession of the Collateral otherwise
than by disposition in accordance with the terms hereof.
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(j)
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Inspection
of Records and Collateral: The Debtor shall at all times:
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(i)
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keep
accurate and complete records of the Collateral as well as proper books of account for its
business all in accordance with generally accepted accounting principles, consistently applied,
as is reasonable in the ordinary course of business; and
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(ii)
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permit
the Secured Party or its authorized agents to have access to all premises occupied by the
Debtor or any place where the Collateral may be found to inspect the Collateral and to examine
the books of accounts, financial records and reports of the Debtor and to have temporary
custody of, make copies of and take extracts from such books, records and reports.
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(k)
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Access
to Computer Information: In the event that the use of a computer system is required to
access any information and data which the Secured Party is entitled to access and examine
hereunder, the Debtor shall allow the Secured Party the use of its computer system for such
purpose and shall provide assistance in that regard. If for any reason such information and
data cannot be accessed and retrieved at the Debtor premises, the Secured Party may remove
the medium in which such information or data is stored from the Debtor’s premises to
any other place which has a computer system that will give the Secured Party the opportunity
to retrieve, record or copy such information and data. The Secured Party is hereby authorized
to reproduce and retain a copy of any such information and data in any format whatsoever.
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(l)
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Delivery
of Documents: The Debtor shall promptly deliver to the Secured Party upon request:
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(i)
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all
policies and certificates of insurance relating to the Collateral;
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(ii)
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any
documents of title and instruments representing or relating to the Collateral;
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(iii)
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a
list of the Collateral, excluding the Intellectual Property, specifying make, model, name
of manufacturer and serial number, where applicable, for each item of the Collateral; and
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(iv)
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such
information concerning the Collateral, the Debtor and the Debtor’s operations and affairs
as the Secured Party may request.
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(m)
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Risk
and Insurance: The Debtor shall bear the sole risk of any loss, damage, destruction or
confiscation of or to the Collateral during the Debtor’s possession hereunder or otherwise
after default hereunder. The Debtor shall insure the Collateral with insurers acceptable
to the Secured Party against loss or damage by fire, theft or other insurable perils customarily
insured against by persons having an interest in such Collateral for the full insurable value
thereof with the Secured Party as a named insured and with loss payable to the Secured Party
as its interest may appear. All such policies of insurance will provide that the insurance
coverage provided thereunder shall not be changed or cancelled except on 30 days’ prior
written notice to the Secured Party. If the Debtor fails to so insure, the Secured Party
may, but shall not be required to, insure the Collateral and the premiums for such insurance
will be added to the Secured Obligations and be secured hereby.
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(n)
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Proceeds
in Trust: The Debtor shall hold all proceeds in trust, separate and apart from other
money, instruments or property, for the benefit of the Secured Party until all amounts owing
by the Debtor to the Secured Party have been paid in full.
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(o)
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Reliance
and Survival: All representations and warranties of the Debtor made herein or in any
certificate or other document delivered by or on behalf of the Debtor for the benefit of
the Secured Party are material, will survive the execution and delivery of this Agreement
and will continue in full force and effect without time limit. The Secured Party is deemed
to have relied upon each such representation and warranty notwithstanding any investigation
made by or on behalf of the Secured Party at any time.
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(p)
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Compliance
with Agreements and Laws: The Debtor shall not use the Collateral in violation of this
Agreement or any other agreement relating to the Collateral or any policy insuring the Collateral
or any applicable statute, law, by-law, rule, regulation, court order or ordinance.
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(q)
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Disposition
of Collateral: Except as hereinafter provided, the Debtor shall not, without the prior
written consent of the Secured Party:
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(i)
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assign,
sell, lease, exchange, or otherwise dispose of the Collateral or any interest therein; or
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(ii)
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release,
surrender or abandon possession of any of the Collateral; or
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(iii)
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move
or transfer the Collateral from its present location,
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provided
that so long as no Event of Default remains outstanding, the Debtor may sell or lease inventory and license the Intellectual Property
in the ordinary course of business and for the purpose of carrying on the same, and subject to the provisions of Section 5.1(b) hereof
use monies available to the Debtor.
For
any item of the Collateral which has become worn out, damaged or otherwise unsuitable for its purpose, the Debtor may substitute for
such item property of equal value free from all Encumbrances except Permitted Encumbrances. All substituted property shall become part
of the Collateral as soon as the Debtor acquires any interest in it. The Debtor shall give immediate written notice to the Secured Party
of the occurrence of any event referred to in this paragraph.
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(r)
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Encumbrances:
The Debtor shall not create, assume or suffer to exist any Encumbrance in, of or on any
of the Collateral except for Permitted Encumbrances.
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(s)
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Change
of Name: The Debtor shall not change its name without giving to the Secured Party 20
days’ prior written notice of the change.
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(t)
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Serial
Numbered Goods: Upon the Debtor’s acquisition of rights in additional serial numbered
goods which are not inventory, or upon repossession by or return to the Debtor of any such
goods, the Debtor shall immediately give the Secured Party written notice of full particulars
thereof.
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(u)
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Liability
for Deficiency: If the aggregate sum realized as a result of any realization pursuant
hereto is not sufficient to pay the whole amount of the Secured Obligations, the Debtor shall
forthwith pay to the Secured Party the full amount of the deficiency plus interest thereon
at the rate or rates applicable to the Secured Obligations.
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(v)
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Notification:
The Debtor shall notify the Secured Party promptly of:
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(i)
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Scheduled
Information: any change in the information contained herein or in the Schedules hereto
relating to the Debtor, the Debtor’s name, the Debtor’s business or the Collateral;
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(ii)
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Acquisitions:
the details of any significant acquisition of Collateral;
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(iii)
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Litigation:
the details of any claims or litigation affecting the Debtor or the Collateral;
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(iv)
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Account
Debtors: any default by any Person indebted or obligated to the Debtor in payment or
other performance of obligations of that Person comprised in the Collateral; and
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(v)
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Return
of Collateral: the return to, or repossession by, the Debtor of Collateral.
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(w)
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Payments:
The Debtor shall forthwith pay:
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(i)
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Employee
obligations: all obligations to its employees and all obligations to others which relate
to its employees when due, including, without limitation, all taxes, duties, levies, government
fees, claims and dues related to its employees;
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(ii)
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Taxes:
all taxes, assessments, rates, duties, levies, government fees, claims and dues lawfully
levied, assessed or imposed upon it or the Collateral when due, unless the Debtor shall in
good faith contests its obligations so to pay and furnishes such security as the Secured
Party may require; and
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(iii)
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Prior
Encumbrances: all Encumbrances which rank or could in any event rank in priority to or
pari passu with the security constituted by this Agreement.
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(x)
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Deliveries:
The Debtor shall deliver to the Secured Party from time to time promptly upon written
request:
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(i)
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Documents
of Title, Instruments, Securities and Chattel Paper: any documents of title, instruments,
securities and chattel paper comprised in or relating to the Collateral;
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(ii)
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Books
of Account and Records: all books of account and all records, ledgers, reports, correspondence,
schedules, documents, statements, lists and other writings relating to the Collateral for
the purpose of inspecting, auditing or copying the same;
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(iii)
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Financial
Statements: all financial statements prepared by or for the Debtor regarding the Debtor’s
business on an annual basis;
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(iv)
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Insurance
Policies: all policies and certificates of insurance relating to the Collateral;
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(v)
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Serial
Number: a list of the Collateral, specifying make, model, name of manufacturer and serial
number, where applicable, for each item of the Collateral; and
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(vi)
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Other
Information: such information concerning the Collateral, the Debtor and Debtor’s
business and affairs as the Secured Party may reasonably require.
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(y)
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Intellectual
Property: The Debtor shall:
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(i)
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Registration
of present Intellectual Property: where commercially reasonable, apply to file applications
and complete registrations on any present Intellectual Property which it owns, and which
is not currently protected by an application or registration, and which Debtor intends to
maintain in the ordinary course of business, including any and all improvements to Intellectual
Property;
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(ii)
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Registration
of after acquired Intellectual Property: apply to file applications and complete registrations
of all Intellectual Property hereafter acquired by it and which Debtor hereafter intends
to maintain in the ordinary course of business in all jurisdictions where commercially reasonable;
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(iii)
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Maintain
Records: keep up-to-date records regarding its Intellectual Property;
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(iv)
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Confidentiality
Agreements: enter into confidentiality agreements with employees and other third parties
who may invent, create, discover, author and/or reduce to practice Intellectual Property
for the Debtor or who may have access to confidential information of the Debtor;
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(v)
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License/Assignment
Agreements: ensure that all Intellectual Property hereafter acquired by it from third
parties is properly acquired by way of a written assignment, and ensure that all its rights
to use Intellectual Property are properly acquired by way of a written license agreement;
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(vi)
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List
of unregistered trademarks etc.: provide, upon written request by the Secured Party,
a list of all of its registered and unregistered trade-marks, patent applications, issued
patents, copyright, industrial designs and other Intellectual Property; and
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(vii)
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Mark
Products: use commercially reasonable efforts to mark all of its products and advertising
appropriately to maintain the validity of all Intellectual Property it presently owns or
hereafter acquires, and shall also require its licensees to use commercially reasonable efforts
to mark all of their products and advertising appropriately to maintain the validity of the
licensed Intellectual Property.
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Article
6
PERFORMANCE OF OBLIGATIONS
6.1 Perform
Obligations
If
the Debtor fails to perform its obligations hereunder, the Secured Party may, but will not be obligated to, perform any or all of such
obligations without prejudice to any other rights and remedies of the Secured Party hereunder, and any payments made and any costs, charges,
expenses and legal fees and disbursements (on a solicitor and his own client basis) incurred in connection therewith will be payable
by the Debtor to the Secured Party forthwith with interest until paid at the highest rate borne by any of the Secured Obligations and
such amounts will be a charge upon and security interest in the Collateral in favour of the Secured Party prior to all claims subsequent
to this Agreement.
Article
7
DEFAULT
7.1 Default
Notwithstanding
that any one or more of the Secured Obligations may be payable on demand and without prejudice thereto, the Debtor shall be in default
under this Agreement upon the occurrence of any of the following events:
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(a)
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if
there is a default or a breach by the Debtor (or by any other Person bound hereby) in respect
of the payment, observance or performance when due of any covenant, agreement, term, condition,
stipulation or provision contained herein or in any Other Document; or
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(b)
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if
any representation or warranty contained herein, in any Other Document or in any certificate,
declaration, application or other instrument delivered pursuant hereto, is found at any time
to be incorrect in any material respect; or
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(c)
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if
at any time there is an event of default or a breach by any Obligant under any Other Document;
or
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(d)
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if
an Obligant becomes bankrupt or insolvent or makes or demonstrates an intention to make an
assignment for the benefit of its creditors or makes a proposal or takes advantage of any
provision of the Bankruptcy and Insolvency Act of Canada or any other legislation
for the benefit of the insolvent debtors; or
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(e)
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if
any proceedings with respect to an Obligant are commenced under the compromise or arrangement
provisions of any applicable legislation, or an Obligant enters into an arrangement or compromise
with any or all of its creditors pursuant to such provisions or otherwise; or
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(f)
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if
a receiver or receiver-manager is appointed by a Court or any other Person in respect of
an Obligant, or any part of the property, assets or undertakings charged by this Agreement
or in any Other Document; or
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(g)
|
if
the Debtor or any other Person who becomes an owner of an interest in any of the Collateral
while this Agreement is in effect, without the prior consent in writing of the Secured Party,
grants or proposes to grant an Encumbrance upon or in respect of that Collateral other than
pursuant to this Agreement or a Permitted Encumbrance; or
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(h)
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if
any execution, sequestration, extent or any other process of any other kind is levied or
enforced upon or against the Collateral or any part thereof by any Person other than the
Secured Party and remains unsatisfied for a period of 10 days; or
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(i)
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if
the holder (other than the Secured Party) of any Encumbrance against any of the Collateral
does anything to enforce or realize on such Encumbrance; or
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(j)
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if
in the opinion of the Secured Party a material portion of the Collateral is lost, damaged
or destroyed; or
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(k)
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if
an Obligant ceases, or threatens to cease, to carry on his, her or its business as the same
is conducted by that Obligant from time to time; or
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(l)
|
if
any of the moneys secured under this Agreement as part of the Secured Obligations are used
for any purpose other than as declared to and agreed upon by the Secured Party; or
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(m)
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if
an Obligant is in default under any other loan made by the Secured Party in respect of which
that Obligant is a borrower, covenantor, guarantor or indemnitor; or
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(n)
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if
an Obligant is a corporation and:
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(i)
|
it
authorizes the purchase or charging of a majority of its shares without the prior written
consent of the Secured Party; or
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(ii)
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one
of its members commences an action against it which action relates to the Secured Obligations,
or gives a notice of dissent in accordance with the provisions of the Business Corporations
Act of British Columbia, or amendments thereto or a similar notice by a shareholder under
other applicable legislation; or
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(iii)
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it
carries on any business that is restricted from carrying on by its constating documents;
or
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(iv)
|
an
order is made, a resolution is passed or a motion is filed for its liquidation, dissolution
or winding-up; or
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(v)
|
there
is any change in its beneficial ownership of its shares from the ownership of same which
exists as of the date of the execution of this Agreement by the Debtor; or
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(o)
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if
an Obligant is a general partnership and:
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(i)
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it
carries on business that it is restricted from carrying on by its partnership agreement;
or
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(ii)
|
there
is any change in the Persons comprising the partnership; or
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(p)
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if
an Obligant is a limited partnership and:
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(i)
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it
authorizes the purchase or redemption of its units without the Secured Party’s prior
written consent; or
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(ii)
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it
carries on any business that it is restricted from carrying on by its limited partnership
agreement; or
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(iii)
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there
is any change in the beneficial ownership of its units from the ownership of same that exists
as of the date of the execution of this Agreement by the Debtor; or
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(q)
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if
an Obligant who is an individual dies or is declared incompetent by a court of competent
jurisdiction; or
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(r)
|
if
in the opinion of the Secured Party, any material portion of the Collateral becomes the subject
of expropriation proceedings; or
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(s)
|
if
in the opinion of the Secured Party there is or has been a material adverse change in the
financial condition of an Obligant or in the value of the any property charged in favour
of the Secured Party pursuant to any one or more of the Other Documents; or
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(t)
|
if
the Secured Party in good faith believes and has commercially reasonable grounds to believe
that:
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(i)
|
the
prospect for payment of any of the Secured Party or the observance and performance of all
or any part of the Debtor’s obligations in connection therewith is impaired; or
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(ii)
|
any
of the property charged in the Secured Party’s favour pursuant to any one or more of
the Other Documents is or is about to be placed in jeopardy.
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Article
8
RIGHTS, REMEDIES AND POWERS
8.1 Before
and After Default
At
any time and from time to time without notice, whether before or after an Event of Default, the Secured Party will have the right and
power (but will not be obligated):
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(a)
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Inspection
and Records: to inspect the Collateral whenever the Secured Party considers it appropriate
to do so, and to inspect, review, audit and copy any or all information relating thereto
or to the Collateral or to any other transactions between the parties hereto wherever and
however such information is stored, and for such purposes may at any time with or without
notice enter into and upon any lands, buildings and premises where the Collateral or any
such information is or may be;
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(b)
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Set-Off:
to set off the Secured Obligations against any or all debts and liabilities, direct and
indirect, absolute and contingent, in any currency, now existing or hereafter incurred by
the Secured Party in any capacity in favour of the Debtor;
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(c)
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Perfection
of Charges: to file such financing statements, financing change statements and Other
Documents and do such other acts, matters and things (including completing and adding schedules
hereto identifying the Collateral or any permitted liens affecting the Collateral or identifying
the locations at which the Debtor’s business is carried on and where the Collateral
and records relating thereto are situate) as the Secured Party may consider appropriate to
perfect, preserve, continue and realize upon the security interest created hereby, all without
the consent of or notice to the Debtor; and
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(d)
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Extensions
and Other Indulgences: to grant extensions of time and other indulgences, take and give
up security, accept compositions, compound, compromise, settle, grant releases and discharges,
refrain from perfecting or maintaining perfection of Encumbrances, and otherwise deal with
the Debtor and other obligors of the Debtor, sureties and others and with the Collateral
and Encumbrances as the Secured Party may consider appropriate, all without prejudice to
the liability of the Debtor or the Secured Party’s rights to hold and realize on the
security interest created hereby.
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8.2 After
Default
Upon
the occurrence of an Event of Default and at any time thereafter, the Secured Party may exercise any or all of the rights, remedies and
powers of the Secured Party under the Act, or otherwise existing, whether under this Agreement or any other agreement or at law or in
equity, all of which other rights, remedies and powers are hereby incorporated as if expressly set out herein. In addition to the foregoing,
the Secured Party will have the right and power (but will not be obligated):
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(a)
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Withhold
Advances: to withhold any or all advances, including future advances;
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(b)
|
Accelerate
Secured Obligations: to declare any or all of the Secured Obligations to be immediately
due and payable;
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(c)
|
Enter
and Take Possession: to take possession of the Collateral and to collect and get in the
same, and for such purposes may at any time, with or without notice or legal process and
to the exclusion of all others including the Debtor and its servants, agents and employees,
enter into and upon, use and occupy any lands, buildings and premises wheresoever and whatsoever,
where the Collateral is or may be located and do any act and take any proceedings in the
name of the Debtor or otherwise, as the Secured Party may consider appropriate, and the Debtor
hereby waives and releases the Secured Party and any Receiver from any and all claims in
connection therewith or arising therefrom;
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(d)
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Receive
Payments: to receive income, rents, profits, increases, payments, damages and proceeds
from and in respect of the Collateral and to demand, collect (by legal proceedings or otherwise),
endorse, sue on, enforce, realize, recover, receive and get in the same, and for such purposes
may give valid and binding receipts and discharges therefor and in respect thereof and may
do any act and take any proceedings in the name of the Debtor or otherwise as the Secured
Party may consider appropriate;
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(e)
|
Control
of Proceeds: to take control of any or all proceeds where the Collateral (including proceeds)
is dealt with or otherwise gives rise to proceeds;
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(f)
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Use
and Protection of the Collateral: to use, hold, insure, preserve, repair, process, maintain,
protect and prepare the Collateral for disposition and to renew or replace such of the Collateral
as may be worn out, lost or otherwise unserviceable, in the manner and to the extent that
the Secured Party may consider appropriate;
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(g)
|
Disposition
of the Collateral: to sell, lease, rent or otherwise dispose of or concur in the sale,
lease, rental or other disposition of the Collateral, whether in or out of the ordinary course
of business, by private or public sale, lease or other disposition, with or without notice,
advertising or any other formality, either for cash or in any manner involving deferred payment
in whole or in part, at such time or times and upon such terms and conditions as the Secured
Party may consider appropriate and for such prices or consideration as can reasonably be
obtained at such time therefor, and to carry any such disposition into effect by conveying
title and executing agreements and assurances in the name of the Debtor or otherwise as the
Secured Party may consider appropriate, and to make any stipulations as to title or conveyance
or commencement of title or otherwise as the Secured Party may consider appropriate, and
to buy in or rescind or vary any contract for the disposition of the Collateral and to re-dispose
of the same without being answerable for any loss occasioned thereby;
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(h)
|
Exercise
and Enforcement of Debtor’s Rights: to exercise as to the Collateral any or all
of the rights, remedies and powers of the Debtor, and to enforce the observance and performance
by others of all other obligations and liabilities under or in respect of the Collateral;
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(i)
|
Payment
of Liabilities: to pay any or all debts and liabilities in connection with the Collateral;
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(j)
|
Arrangements:
to enter into any compromise, extension, reorganization, deposit, merger or consolidation
agreement or similar arrangement in any way relating to or affecting the Collateral, and
in connection therewith may deposit, exchange or surrender control of the Collateral and
accept other property upon such terms as the Secured Party may consider appropriate, and
either with or without payment or exchange of Money for equality of exchange or otherwise;
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(k)
|
Institution
and Defence of Actions: to institute and prosecute all suits, proceedings and actions
which the Secured Party may consider necessary or advisable for the proper protection or
enforcement of the Collateral, and to defend all suits, proceedings and actions against the
Debtor, and to appear in and conduct the prosecution and defence of any suit, proceeding
or action then pending or thereafter instituted, and to appeal any suit, proceeding or action;
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(l)
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Foreclosure:
to exercise its rights under the Act, as amended from time to time, to give notice of
a proposal to take, and to subsequently take, the Collateral in satisfaction of the Secured
Obligations;
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(m)
|
Other
Means of Enforcement: to otherwise enforce this Agreement and realize upon the security
interest created hereby by any method permitted by law, including by bringing action to recover
a judgment or by taking other available proceedings against the Debtor, and to do all such
other acts and things as it may consider incidental or conducive to any of its rights, remedies
and powers; and
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(n)
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Appointment
of Receiver: to appoint by instrument in writing with or without bond, or to take proceedings
in any court of competent jurisdiction for the appointment of, a receiver or receiver manager
of the Debtor or the Collateral, including all or any part or parts of the undertaking and
business or businesses of the Debtor, and to remove any receiver or receiver manager appointed
by the Secured Party and to appoint another in its stead, (and any person so appointed, whether
by the Secured Party or a court, will be referred to herein as the “Receiver”).
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8.3 Receiver
Any
Receiver will be entitled to exercise any and all rights, remedies and powers of the Secured Party under the Act as amended from time
to time or any other applicable legislation or otherwise existing, whether under this Agreement or any other agreement or at law or in
equity, all of which other rights, remedies and powers are hereby incorporated as if expressly set out herein, and in addition will have
the right and power (but will not be obligated):
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|
(a)
|
Carry
on Business: to carry on or concur in carrying on all or any part of the business or
businesses of the Debtor;
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|
(b)
|
Employ
Agents: to employ and discharge such agents, managers, clerks, lawyers, accountants,
servants, workmen and others upon such terms and with such salaries, wages or remuneration
as the Receiver may consider appropriate;
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(c)
|
Raise
Funds and Grant Security: to borrow or otherwise raise on the security of the Collateral
or otherwise any sum or sums of money required for the seizure, retaking, repossession, holding,
insuring, repairing, processing, maintaining, protecting, preparing for disposition and disposing
of the Collateral, or for the carrying on of all or any part of the business or businesses
of the Debtor, or to complete any construction or repair of lands owned by the Debtor or
any part thereof, or for any other enforcement of this Agreement, in such sum or sums as
will in the opinion of the Receiver be sufficient for obtaining the amounts from time to
time required, and in so doing may issue certificates which may be payable either to order
or to bearer and may be payable at such time or times as the Receiver may consider appropriate
and may bear interest as stated therein, and the amounts from time to time payable by virtue
of such certificates will form an Encumbrance in and upon the Collateral in priority to the
security interest created hereby; and
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(d)
|
Other
Rights: to exercise any or all rights, remedies and powers conferred or delegated by
the Secured Party.
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8.4 Rights
of Transferees
No
purchaser, lessee or other transferee pursuant to any disposition made or purporting to be made pursuant to this Agreement will be bound
or concerned to see or enquire whether an Event of Default has occurred or continues, or whether any notice required hereunder has been
given, or as to the necessity or expediency of the stipulations subject to which such disposition is to be made, or otherwise as to the
propriety of such disposition or the regularity of its proceedings, or be affected by notice that no Event of Default has occurred or
continues or that any required notice has not been given or that the disposition is otherwise unnecessary, improper or irregular, and,
notwithstanding any impropriety or irregularity whatsoever or notice thereof, the disposition as regards such purchaser, lessee or other
transferee will be deemed to be within the powers conferred by this Agreement and will be valid accordingly, and the remedy (if any)
of the Debtor in respect of any impropriety or irregularity whatsoever in any such disposition will be in damages only.
8.5 Limitations
The
following will apply notwithstanding anything herein contained to the contrary.
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|
(a)
|
Failure
to Exercise: Neither the Secured Party nor any Receiver will be liable or accountable
for any failure to exercise its rights, remedies or powers.
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(b)
|
Receiver
is Debtor’s Agent: The Receiver will be deemed the agent of the Debtor and not
the agent of the Secured Party, and the Debtor shall be solely responsible for the acts and
defaults of the Receiver and for its remuneration, costs, charges and expenses, and the Secured
Party will not in any way be responsible for any misconduct, negligence or nonfeasance on
the part of the Receiver or its servants, agents or employees.
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|
(c)
|
Receiver’s
Liability: The Receiver will not be liable for any loss unless it is caused by the Receiver’s
own negligence or willful default.
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|
(d)
|
Accountability
for Payments Received: Each of the Secured Party and any Receiver will only be accountable
for and charged with any monies they actually receive.
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|
(e)
|
Not
Liable Under the Collateral: This Agreement and the security interest created hereby
will not impair or diminish any obligation or liability of the Debtor or any other party
or parties under or in respect of the Collateral, and, except as may be provided in the Act,
no obligation or liability under or in respect of the Collateral will be imposed upon or
incurred by the Secured Party by virtue of this Agreement or the security interest created
hereby.
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|
(f)
|
Not
a Mortgagee in Possession: Neither the provisions of this Agreement nor anything done
under or pursuant to the rights, remedies and powers conferred upon the Secured Party and
the Receiver, whether hereunder or otherwise, will render the Secured Party a mortgagee in
possession.
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|
|
(g)
|
No
Duty to Take Steps: Neither the Secured Party nor any Receiver will be bound to collect,
dispose of, realize, enforce or sell any securities, instruments, chattel paper or intangibles
(including any accounts) comprised in the Collateral or to allow any such Collateral to be
sold or disposed of, nor will it be responsible for any loss occasioned by any such sale
or other dealing or for any failure to sell or so act, nor will it be responsible for any
failure to take necessary steps to preserve rights against others in respect of such Collateral
nor bound to present, protest or give any notice in connection with any such Collateral nor
to perform any act to prevent prescription thereof nor to protect any such Collateral from
depreciating in value or becoming worthless, nor will it be responsible for any loss occasioned
by the failure to exercise any rights in respect of such Collateral within the time limited
for the exercise thereof.
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|
(h)
|
No
Duty to Keep Property Separate: Neither the Secured Party nor the Receiver will be obligated
to keep the Collateral separate or identifiable.
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8.6 Liability
of Secured Party
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|
(a)
|
No
Responsibility for Debt: The Secured Party will not be responsible or liable for any
debts contracted by it, for damages to persons or property or for salaries or non-fulfilment
of contracts during any period when the Secured Party will manage the Collateral upon entry
of the business of the Debtor, as herein provided, nor will the Secured Party be liable to
account as mortgagee in possession or for anything except actual receipts or be liable for
any loss or realization or for any default or omission for which a mortgagee in possession
may be liable.
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(b)
|
No
Requirement to Perform: The Secured Party will not be bound to do, observe or perform
or to see to the observance or performance by the Debtor of any obligations or covenants
imposed upon the Debtor nor will the Secured Party, in the case of securities, instruments
or chattel paper, be obliged to reserve rights against other persons, nor will the Secured
Party be obliged to keep any of the Collateral identifiable.
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|
|
(c)
|
Waiver:
The Debtor hereby waives any applicable provision of law permitted to be waived by it
which imposes higher or greater obligations upon the Secured Party other than provided in
this Agreement.
|
8.7 Application
of Proceeds
Any
proceeds of any disposition of the Collateral, any net profits of carrying on all or any part of the business or businesses of the Debtor,
and any proceeds of any other realization will, at the option of the Secured Party, be held in whole or in part unappropriated in a separate
account (as security for any or all of the Secured Obligations including such part or parts thereof as may be contingent or not yet due)
or be applied in whole or in part (subject to applicable legislation and the claims of any creditors ranking in priority to the security
interest created hereby):
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|
(a)
|
Receiver’s
Costs: firstly, to the payment of all costs, charges and expenses of and incidental to
the appointment of any Receiver and the exercise by the Receiver of any or all of its rights,
remedies and powers with respect to the Debtor, the Collateral and this Agreement, including
the remuneration of the Receiver and all amounts properly payable by the Receiver together
with all legal costs in respect thereof on a solicitor and his own client basis;
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(b)
|
Costs
of Repossession and Disposition: secondly, to the payment of all costs, charges and expenses
incurred or paid in connection with seizing, repossessing, collecting, holding, repairing,
processing, preparing for disposition and disposing of the Collateral and any other expenses
of enforcing this Agreement incurred by the Secured Party (including legal fees on a solicitor
and his own client basis and all taxes, costs and charges in respect of the Collateral);
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(c)
|
Secured
Obligations: thirdly, to the payment of the Secured Obligations; and
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|
|
(d)
|
Surplus:
fourthly, any surplus will, subject to the rights of any other creditors of the Debtor,
be paid to the Debtor.
|
8.8 Appointment
of Attorney
To
enable the Secured Party and any Receiver to exercise the rights, remedies and powers conferred upon them, whether by this Agreement
or otherwise, upon the occurrence and during the continuance of an Event of Default the Debtor hereby appoints each of the Secured Party
and the Receiver, to be the lawful attorney of the Debtor to do any act or thing and to execute any assurance or instrument (in the name
of the Debtor or otherwise) in the exercise of the powers conferred upon them (including carrying out any disposition of the Collateral
and for such purpose to affix the Debtor common seal to any deeds, transfers, conveyances, assignments, assurances and things which the
Debtor ought to execute to complete any disposition of the Collateral or alternatively to execute the same under its own seal by conveying
in the name of and on behalf of Debtor and under its own seal, and any deed or other thing executed by the Secured Party or the Receiver
under its own seal pursuant hereto will have the same effect as if it were under the common seal of the Debtor) or which the Debtor ought
to do or execute hereunder and to exercise any or all of the rights, remedies and powers of the Debtor in carrying out or attempting
to carry out any or all of the rights, remedies and powers conferred upon them. This power of attorney will be irrevocable and coupled
with an interest and will survive the death, disability, insolvency or other legal incapacity of the Debtor.
8.9 Rights
Cumulative
All
rights, remedies and powers of the Secured Party and any Receiver set out in this Agreement are cumulative. No right, remedy or power
set out herein is intended to be exclusive but each will be in addition to every other right, remedy and power contained herein or in
any other existing or future agreement or now or hereafter existing by statute, at law or in equity.
8.10 Order
of Realization
The
Secured Party may realize upon the security interest created hereby and any other Encumbrances it may now or hereafter have in such order
as it may consider appropriate, and any such realization by any means upon any such Encumbrance will not bar realization upon any other
Encumbrance(s).
8.11 Waiver
The
Secured Party in its absolute discretion may at any time and from time to time by written notice waive any breach by the Debtor of any
of its covenants or agreements herein. No course of dealing between the Debtor and the Secured Party will operate as a waiver of any
of the Secured Party’s rights, remedies or powers. No failure or delay on the part of the Secured Party to exercise any right,
remedy or power given herein or by any other existing or future agreement or now or hereafter existing by statute, at law or in equity
will operate as a waiver thereof, nor will any single or partial exercise of any such right, remedy or power preclude any other exercise
thereof or the exercise of any other such right, remedy or power, nor will any waiver by the Secured Party be deemed to be a waiver of
any subsequent, similar or other event.
Article
9
LOAN AGREEMENT
9.1 Loan
Agreement
The
provisions of the Loan Agreement which are not expressly restated herein or in any Other Document, will survive the execution and registration
of this Agreement and any the Other Document to be delivered herewith. Accordingly, there will be no merger of such provisions in this
Agreement or any Other Document, until the parties thereto, by an appropriate instrument in writing so declare. Furthermore, if any conflict
at any time exists between any term of the Loan Agreement (whether restated herein or not) and any term of this Agreement, then the term
of the Loan Agreement or this Agreement as determined by the Secured Party will govern and take precedence. Also, it is understood and
agreed that a default under the terms of the Loan Agreement will constitute a default under this Agreement and will entitle the Secured
Party to exercise all of its rights and remedies contained in this Agreement.
Article
10
MISCELLANEOUS
10.1 Costs
The
Debtor shall reimburse the Secured Party on demand for all interest, commissions, costs of realization and other costs and expenses (including
the full amount of all legal fees and expenses paid by the Secured Party) incurred by the Secured Party or any Receiver in connection
with:
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|
(a)
|
inspecting
the Collateral;
|
|
|
(b)
|
negotiating,
preparing, perfecting and registering this Agreement or any renewal or modification hereof,
including the renewal of registration of any financing statement registered or land title
office notice filed in connection with the security interests hereby created;
|
|
|
(c)
|
the
enforcement of and advice with respect to this Agreement;
|
|
|
(d)
|
the
realization, disposition of, retention, protection, insuring or collection of any Collateral;
and
|
|
|
(e)
|
the
protection or enforcement of the rights, remedies and powers of the Secured Party or any
Receiver.
|
All
amounts for which the Debtor required hereunder to reimburse the Secured Party or any Receiver will, from the date of disbursement until
the date the Secured Party or the Receiver receives reimbursement, be deemed advanced to the Debtor by the Secured Party, will be deemed
to be Secured Obligations and will bear interest at the highest rate per annum charged by the Secured Party on any of the other Secured
Obligations.
10.2 No
Merger
This
Agreement will not operate so as to create any merger or discharge of any of the Secured Obligations, or any assignment, transfer, guarantee,
lien, contract, promissory note, bill of exchange or security interest of any form held or which may hereafter be held by the Secured
Party from the Debtor or from any other person whomsoever. The taking of a judgment with respect to any of the Secured Obligations will
not operate as a merger of any of the covenants contained in this Agreement.
10.3 No
Obligation to Make Advances
Nothing
herein will obligate the Secured Party to make any advance or loan or further advance or extend credit to the Debtor.
10.4 Set-Off
or Counterclaim
The
obligation of the Debtor to make all payments comprising part of the Secured Obligations is absolute and unconditional and will not be
affected by:
|
|
(a)
|
any
circumstance, including any set-off, compensation, counterclaim, recoupment, defence or other
right which the Debtor may now or hereafter have against the Secured Party or any one or
more others for any reason whatsoever; or
|
|
|
(b)
|
any
insolvency, bankruptcy, reorganization or similar proceedings by or against the Debtor.
|
10.5 Statutory
Waiver
To
the fullest extent permitted by law, the Debtor waives all of the rights, benefits and protection given by the provisions of any existing
or future statute which imposes limitations upon the rights, remedies or powers of a Secured Party or upon the methods of realization
of security, including any seize or sue or anti-deficiency statute or any similar provisions of any other statute.
10.6 Assignment
The
Secured Party may, without further notice to the Debtor, at any time assign, transfer or grant a security interest in this Agreement
and the security interests granted hereby. The Debtor expressly agrees that the assignee, transferee or secured party, as the case may
be, will have all of the Secured Party’s rights and remedies under this Agreement and the Debtor shall not assert any defence,
counterclaim, right of set-off or otherwise any claim which it now has or hereafter acquires against the Secured Party in any action
commenced by such assignee, transferee or secured party, as the case may be, and will pay the Secured Obligations to the assignee, transferee
or secured party, as the case may be, as the Secured Obligations become due. The Debtor shall not assign this Agreement or any of its
rights or benefits hereunder without the express written consent of the Secured Party first had and obtained.
10.7 Provisions
Reasonable
The
Debtor acknowledges that the provisions of this Agreement and, in particular, those respecting rights, remedies and powers of the Secured
Party and any Receiver against the Debtor, its business and any Collateral upon an Event of Default, are commercially reasonable and
not manifestly unreasonable.
10.8 Release
by Debtor
The
Debtor releases and discharges the Secured Party and the Receiver from every claim of every nature, whether sounding in damages or not,
which may arise or be caused to the Debtor or any person claiming through or under the Debtor by reason or as a result of anything done
by the Secured Party or any successor or assign claiming through or under the Secured Party or the Receiver under the provisions of this
Agreement unless such claim be the result of dishonesty or gross neglect.
10.9 Indemnity
The
Debtor shall indemnify and save the Secured Party from any and all costs, expenses, liabilities and damages which may be incurred by
the Secured Party in connection with the Collateral and the enforcement of its rights hereunder, save only any costs, expenses, liabilities
or damages resulting from any gross neglect or wilful misconduct by the Secured Party or its servants or agents.
10.10 Information
to third parties
The
Secured Party will not be obliged to inquire into the right of any Person purporting to be entitled under the Act to information and
materials from the Secured Party by making a demand upon the Secured Party for such information and materials and the Secured Party will
be entitled to comply with such demand and will not be liable for having complied with such demand notwithstanding that such Person may
in fact not be entitled to make such demand.
10.11 Further
Assurances
The
Debtor shall at all times, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or delivered all such further
acts, deeds, transfers, assignments, security agreements and assurances as the Secured Party may reasonably require in order to give
effect to the provisions hereof and for the better granting, transferring, assigning, charging, setting over, assuring, confirming or
perfecting the security interests hereby created and the priority accorded to them by law or under this Agreement.
10.12 Notices
Any
notice, demand or other document to be given, or any delivery to be made hereunder shall be effective if in writing and given or made
in accordance with the notice provisions of the Loan Agreement.
Notice
details for:
Debtor
FOGDOG
ENERGY SOLUTIONS INC.
619
Everridge Drive, SW
Calgary,
Alberta, Canada
T2Y
5E5
Name: Marlon Lee Him
Email: marlon@fogdogenergy.com
Secured
Party
CURRENCYWORKS,
INC.
561
Indiana Court
Los
Angeles, California, United States
90291
Name: Jimmy Geiskopf
Email:
jimmy.geiskopf@currencyworks.io
10.13 Discharge
Any
partial payment or satisfaction of the Secured Obligations will be deemed not to be a redemption or discharge of this Agreement. The
Debtor shall be entitled to a release and discharge of this Agreement upon full payment and satisfaction of all Secured Obligations and
upon written request by the Debtor and payment to the Secured Party of all costs, charges, expenses and legal fees and disbursements
(on a solicitor and his own client basis) incurred by the Secured Party in connection with the Secured Obligations and such release and
discharge.
10.14 Delivery
of Copy/Waiver
The
Debtor acknowledges receiving a copy of this Agreement. The Debtor waives all rights to receive from the Secured Party a copy of any
financing statement, financing change statement or verification statement filed at any time in respect of this Agreement.
Article
11
Interpretation
11.1 Amendment
Any
amendment of this Agreement shall not be binding unless in writing and signed by the Secured Party and the Debtor.
11.2 Headings
All
headings and titles in this Agreement are for reference only and are not to be used in the interpretation of the terms hereof.
11.3 Hereof,
Etc.
All
references in this Agreement to the words “hereof”, “herein” or “hereunder”
will be construed to mean and refer to this Agreement as a whole and will not be construed to refer only to a specific Article, Section,
paragraph or clause of this Agreement unless the context clearly requires such construction.
11.4 Joint
and Several Liability
If
any party hereto is comprised of more than one Person the assignments, security interests and other charges constituted hereby and the
representations, warranties, covenants, agreements, obligations and liabilities made by or imposed upon that party herein or by law will
be deemed to have been made or incurred by all those Persons jointly and by each of those Persons severally.
11.5 Severability
If
any of the terms of this Agreement are or are held to be unenforceable or otherwise invalid, such holding will not in any way affect
the enforceability or validity of the remaining terms of this Agreement.
11.6 Governing
Law
This
Agreement will be governed by and construed in accordance with the laws of the Province of British Columbia, and each party hereby submits
to the jurisdiction of the courts of the Province of British Columbia provided that the foregoing will in no way limit the right of the
Secured Party to commence suits, actions or proceedings based on this Agreement in any other jurisdiction.
11.7 Interpretation
Wherever
the singular or one gender only is used throughout this Agreement, the same will be construed as meaning the plural or the other genders
or the body corporate or politic where the context or the parties hereto so require.
11.8 Capacity
If
the Collateral or any portion thereof or any interest therein is held by the Debtor as a partner of a firm, as a trustee, as an agent,
or in any other similar capacity, whether fiduciary or otherwise:
|
|
(a)
|
each
and every warranty, representation, covenant, agreement, term, condition, provision and stipulation;
and
|
|
|
(b)
|
each
and every Encumbrance,
|
made
by or imposed upon the Debtor hereunder will be and be deemed to be jointly and severally made by or imposed upon the Debtor and the
partnership, the beneficiary or beneficiaries of the trust, the principal(s) of the agent, or other entity or entities, as the case may
be, and each Encumbrance contained in this Agreement will be deemed to create an Encumbrance in the estate, right, title and interest
of the partnership, the beneficiary or beneficiaries, the principal(s), or such entity or entities, as the case may be, in and to the
Collateral as well as being a security interest in the estate, interest and title of the Debtor in and to the Collateral, it being the
intention of the parties hereto that this Agreement will create a security interest in both the legal and beneficial title to the Collateral.
11.9 Secured
Party as Agent
If
this Agreement is granted to the Secured Party in its capacity as agent for one or more other Persons, the Debtor agrees that all:
|
|
(b)
|
representations,
warranties, covenants and agreements; and
|
|
|
(c)
|
obligations
and liabilities,
|
created,
made, assumed or incurred hereunder by the Debtor in favour of the Secured Party are also created, made, assumed or incurred hereunder
by the Debtor in favour of those Persons. The Debtor further agrees that each of those Persons will be entitled to the benefit of all
rights and remedies of the Secured Party as if it had been named Secured Party hereunder.
11.10 Binding
Effect
This
Agreement shall be binding on the Debtor and its heirs, executors, personal representatives, successors and permitted assigns and shall
enure to the benefit of the Secured Party and its successors and assigns.
11.11 Entire
Agreement
The
Secured Party has made no representations, warranties, covenants or acknowledgements affecting any Collateral, other than as expressly
set out herein in writing and in any Other Document executed by the Secured Party.
11.12 Counterparts
This
Agreement may be executed in counterparts and an executed copy of this Agreement may be delivered by electronic facsimile transmission
or other means of electronic communication capable of producing a signed printed copy of this Agreement. Any such execution and delivery
will be deemed to have occurred as of the date set forth below by the party so delivering such a copy.
[Signature
Page follows]
EXECUTED
by the Debtor as of the 20th day of August, 2021.
FOGDOG
ENERGY SOLUTIONS INC.
|
Per:
|
|
|
|
|
Authorized
Signatory
|
|
[Signature
Page of General Security Agreement dated for reference August [___], 2021]
Schedule
“A”
SERIAL NUMBERED GOODS
|
TYPE
|
|
SERIAL NUMBER
|
|
MODEL NUMBER
|
|
YEAR
|
|
N/A
|
|
N/A
|
|
N/A
|
|
2021
|
Locations in bc where
collateral Maintained
[♦]
jurisdictions (other
than b.c.) and location Of Collateral
|
JURISDICTION
|
|
Locations
|
|
N/A
|
|
N/A
|
Location of Debtor
619 Everridge Drive, SW
Calgary, Alberta, Canada
T2Y 5E5
other names
NIL
other persons with
rights in collateral
NIL
Intellectual Property
Applications
and Registrations / Trade Mark and Industrial Designs
NIL
Exhibit
99.1
CurrencyWorks
Responds to NFT Boom with Additional Investment in its Zer00™ Low Carbon Crypto Mining Platform
Los
Angeles CA, August 24, 2021. CurrencyWorks Inc. (“CurrencyWorks” or the “Company”), (CSE: CWRK and OTCQB: CWRK),
a full service blockchain platform provider, is pleased to announce that it is investing
an additional $850,000 in its revolutionary Zer00™ crypto mining platform in the form of a services and loan agreement
with Fogdog Energy Solutions inc. (“Fogdog”)
As
of July 2021, it was being widely reported in the media that the blockchain based NFT market was now worth approximately $2.5 billion
USD worldwide, up from sales of just $13.7 million recorded in the first half of 2020. (July 6, 2021 Reuters)
In
response to the inquiries and demand for its NFT sales and trading platforms, CurrencyWorks announced partnerships with Barrett-Jackson
for the development of the Motoclub.io, the premier NFT and digital collectible site for
car enthusiasts and the development of the VUELE™, a global NFT feature-length distribution platform in
partnership with Enderby Entertainment.
As
part of the CurrencyWorks blockchain platform, it’s Zer00™ crypto mining solution has been designed as an answer
to the increasing demand for blockchain based innovations and the importance of reducing the environmental impact required in building
environmentally sustainable blockchain technologies and solutions.
Zer00™
is a fully scalable system that will use the thermal treatment (non-burning) of Industrial and Municipal Solid Waste (IMSW) to generate
the energy needed to power cryptocurrency mining operations in an environmentally friendly and sustainable way, which will also benefit
communities by reducing the demand for landfill to manage the disposal off IMSW.
“CurrencyWorks
is committed to providing leading-edge waste management solutions to help provide a creative solution to enable the reduction of the
environmental impact within the blockchain space. Creating environmentally responsible energy from
IMSW, is just the beginning of helping ensure a low carbon footprint and a zero-energy cost Crypto mining solution.” said
Cameron Chell, CurrencyWorks Executive Chairman.
You
can learn more about CurrencyWorks’ Zero-Cost Energy Crypto Mining Solution here:http://www.currencyworks.io/zer00
The
Company will be providing its technology development partner an advance of $850,000 (the “Loan”) to Fogdog pursuant to a
loan agreement with Fogdog dated August 20, 2021. Provided that the Company is using such power to develop and operate cryptocurrency
mining operations, Fogdog will provide the Company with free of charge access to the electricity power generated from any clean electricity
power generation thermal units built and operated by Fogdog in Canada or the United States.
The
Company has agreed to grant to Fogdog share purchase warrants (the “Warrants”) to acquire up to 250,000 common shares of
the Company with the exercise price equal to the market price of the common shares of the Company on the day prior to the grant of the
Warrants. The Warrants will vest and become exercisable upon repayment in full of the Loan and will expire within five years from the
date of issue.
The
Loan bears interest at the rate of ten percent per annum, calculated daily, not in advance, as well after as before maturity, default
and judgment on the basis of a 365 (or in the case of a leap year 366) day year based on the actual number of days elapsed, on a nominal
rate basis and without allowance or deduction for deemed reinvestment or otherwise with respect to any amounts from time to time paid
to our company on account of interest under the Loan.
On
the date that is 365 days after the date of advance, Fogdog will pay to the Company an amount equal to the first year of accrued and
unpaid interest on all principal amounts outstanding on the Loan. Commencing on the date that is 365 days after the date of advance,
on the first day of each month Fogdog agrees to pay to the Company an equal monthly payment of principal (in the amount amortized over
5 years) and a monthly payment of interest on such principal amount of the Loan. Unless demanded or otherwise due earlier, all obligations
are due and payable on August 20, 2027.
The
Loan is secured by a charge on all of the assets owned by Fogdog pursuant to a general security agreement dated August 20, 2021 between
the Company and Fogdog.
About
CurrencyWorks
CurrencyWorks
Inc. (CSE: CWRK and OTCQB: CWRK) is a publicly-traded company that builds and operates FinTech
Platforms for Digital Currencies, Digital Assets, and Security Tokens.
For
more information on CurrencyWorks, please visit us at www.currencyworks.io. For additional investor info visit www.currencyworks.io
or www.sedar.com and www.sec.gov searching CWRK.
Media
Contact
Arian
Hopkins
arian@currencyworks.io
Company
Contact
Bruce
Elliott, President
Phone:
424-570-9446
Bruce.elliott@currencyworks.io
Disclaimer
for Forward-Looking Statements
This
news release contains “forward-looking statements.” Statements in this news release that are not purely historical are forward-looking
statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking
statements include, among other things: that the Company will develop a Zer00™ crypto mining platform; that Fogdog will
construct and implement the electricity power generator thermal unit; that the thermal unit will produce sufficient power per day to
operate the Company’s Zer00™ crypto operations; and that the Company’s Zer00™ crypto operations
will be developed and become operational.
The
material assumptions supporting these forward-looking statements include, among others, that there will be no material variations in
current regulatory environments in which the Company operates; the perceived benefits from the Company’s blockchain solutions will
be as expected; that the Company will purchase cryptocurrency mining machines; and the Company will be able to obtain any necessary financing
on acceptable terms. Although management considers these assumptions to be reasonable based on information currently available to it,
they may prove to be incorrect. These forward-looking statements are only predictions and involve known and unknown risks, uncertainties
and other factors, including: the risk that Fogdog will not be successful in developing its thermal power generation will or that such
unit will be commercially available; the risk that the Company will not be able to purchase cryptocurrency mining machines at all or
at reasonable prices; the risk that the Company will be unable to efficiently build the blockchain solutions; the risk that there may
be negative changes in general economic and business conditions; the risk that the Company may have negative operating cash flow and
not enough capital to complete the blockchain solutions; the risk that the Company may not be able to obtain additional financing as
necessary; the risk that there may be increases in capital and operating costs as a result of working on the blockchain solutions; the
risk that the blockchain solutions may be subject to fraud and other failures; the risk that there may be technological changes and developments
in the blockchain that make the blockchain solutions obsolete; risks relating to regulatory changes or actions which may impede the development
or operation of the blockchain solutions; the risk that other competitors may release similar blockchain solutions; and other general
risks involved in the blockchain solutions.
Any
of these risks may cause the Company’s actual results, levels of activity, performance or achievements to be materially different
from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Further,
although the Company has attempted to identify factors that could cause actual results, levels of activity, performance or achievements
to differ materially from those described in forward-looking statements, there may be other factors that cause results, levels of activity,
performance or achievements not to be as anticipated, estimated or intended. These forward-looking statements are made as of the date
of this news release, and the Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual
results could differ from those projected in the forward-looking statements, except as required by applicable law, including the securities
laws of the United States and Canada. Although the Company believes that any beliefs, plans, expectations and intentions contained in
this news release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be
accurate. The Company does not assume any liability for disclosure relating to any other company mentioned herein.