Inter-creditor and Subordination Agreement

VIEWS: 387 PAGES: 17

More Info
									This Inter-creditor and Subordination Agreement is an agreement between a debtor’s
creditors, whereby the secured creditors of a debtor agree to rank their security and
debt subordinate to that of another creditor. This fifteen page document contains a
defined terms section to ensure parties completely understand the terms and conditions
of the agreement. This document in its draft form contains numerous of the standard
clauses commonly used in these types of agreements; however, additional language
may be added to allow for customization to ensure the specific terms of the parties’
agreement are addressed. Use his form when creditors of a debtor agree to
subordinate their claims to that of another creditor.
                                                    Inter-Creditor and Subordination Agreement



     INTER-CREDITOR AND SUBORDINATION AGREEMENT

      THIS AGREEMENT is made as of the              day of _____________, 2____.

B E T W E E N:

                               _______________________
                                    (the "Company")

                                          - and –

                                ______________________
                                      (the "Bank")

                                          - and -

                                ______________________
                               (collectively, the "Vendors")

                                          - and -

                                 _____________________
                                    (the "Corporation")

RECITALS:

A.    Capitalized terms used in these recitals have the meanings attributed to them in this
      Agreement.

B.    The Company has agreed to provide certain credit facilities to the Corporation in
      connection with the acquisition by ______________________ (the "Purchaser") of
      ___________________ (a predecessor by amalgamation to the Corporation) (the
      "Acquisition") pursuant to a share purchase agreement dated _________________ (the
      "Purchase Agreement") entered into among, inter alia, the Vendors and the Purchaser.

C.    Payment of the Obligations (as hereinafter defined) of the Corporation to the Company
      (the "Company Obligations") is and will be secured by the Company Security (as
      hereinafter defined).

D.    the Bank has agreed to provide certain financing to the Corporation in connection with
      the Acquisition pursuant to the terms of a certain letter agreement between ___________
      as agent for __________________ (a predecessor amalgamating corporation of the
      Company) and the Bank dated _______________ (such letter agreement including any
        amendments, restatements or substitutes thereto being herein called the “Offer of
        Finance”).

E.      Payment of the Obligations of the Corporation to the Bank (the "Bank Obligations") is
        and will be secured by the Bank Security.

F.      The Corporation has certain obligations to the Vendors pursuant to a secured promissory
        note in the principal amount of ____________ ($_________) Dollars (the "Vendor
        Note"), a copy of which is attached hereto as Schedule "A".

G.      Payment of the Obligations of the Corporation to the Vendors (the "Vendor Obligations")
        is and will be secured by, inter alia, the Vendor Security.

H.      The parties wish to enter into this Agreement to establish and confirm the relative rights
        and priorities of their respective security and the obligations of the Corporation secured
        thereby.

      NOW THEREFORE, for value received and intending to be legally bound by this
Agreement, the parties agree as follows:

1.      Defined Terms. In this Agreement, in addition to the terms defined in other Sections:

        (a)      "Inventory" means property of the Corporation held for sale or lease including
                 products purchased for resale, finished goods, work in process and raw materials
                 but not including any property not intended to be directly incorporated in finished
                 goods or products to be sold.

        (b)      "Obligations" means all the obligations of the person (the "obligor") in respect of
                 which the term is used, to another person, including all debts and liabilities,
                 present and future, direct or indirect, absolute or contingent, matured or not, at
                 any time owing by the obligor to the other person in any currency or remaining
                 unpaid by the obligor to such person in any currency whether arising from
                 dealings between the obligor and such person or from any other dealings or
                 proceedings by which such person may be or become in any manner whatever a
                 creditor of the obligor and wherever incurred, and whether incurred by the obligor
                 alone or with another or others and whether as principal or surety, and includes all
                 interest, fees, legal and other costs, charges and expenses in connection with the
                 foregoing.

        (c)      "Proceeds" means identifiable or traceable personal property in any form derived
                 directly or indirectly from any dealing with the property and assets of the
                 Corporation or the proceeds therefrom, including but not limited to any payment
                 representing indemnity or compensation for loss or damage to any property and
                 assets of the Corporation or proceeds therefrom, trade-ins, lease or sale proceeds
                 and cash.



© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                  3
        (d)      "the Company Security" means all present and future security issued by the
                 Corporation or any predecessor corporation to the Corporation held by or for the
                 Company as security for payment of all or part of the Company Obligations
                 including, without limitation, debentures, general security agreements and all
                 other security issued or delivered by or on behalf of the Corporation.

        (e)      "Receivables" means all books, accounts and book debts and generally all
                 accounts, debts, dues, claims, choices in action and demands of every nature and
                 kind howsoever arising or secured including letters of credit and advice of credit,
                 which are now or may hereafter become due, owing or accruing or growing due to
                 or owned by the Corporation, other than any Proceeds of or receivables arising
                 out of the sale, lease or other disposition of the Corporation's real or immoveable
                 property, furniture, machinery, fixtures, equipment, vehicles, accessories and
                 tangible personal property and other than any money payable under any policy of
                 insurance on the life of an executive of the Corporation which has been assigned
                 to the Bank as security for the indebtedness secured by the Bank Security.

        (f)      "Regularly Scheduled Payments" means with respect to the instrument or
                 agreement in respect of which the phrase is used, payments required to be made
                 under the instrument or agreement on a regular periodic and business as usual
                 basis such as, for example, consecutive monthly payments of principal or interest
                 and payments of the outstanding principal balance of the instrument as scheduled
                 pursuant to or at the end of its term provided that the phrase does not mean or
                 include any prepayments or mean or include any payments required to be made
                 following default or following another event which causes any payments or
                 payment dates to be accelerated.

        (g)      "the Bank Security" means all present and future security issued by the
                 Corporation, any predecessor corporation to the Corporation or any other person
                 held by or for the Bank as security for payment of all or part of the
                 Bank Obligations including, without limitation, the Offer of Finance, debentures,
                 general security agreements and all other security issued or delivered by or on
                 behalf of the Corporation or any other person.

        (h)      "Vendor Security" means all present and future security issued by the Corporation
                 or any predecessor corporation to the Corporation held by or for the Vendors as
                 security for payment of all or part of the Vendor Obligations including, without
                 limitation, general security agreements and all other security issued or delivered
                 by or on behalf of the Corporation. For greater certainty: (i) the Vendor Security
                 does not include any personal guarantees provided to the Vendors by any party
                 other than the Corporation (or any of its predecessors) pursuant to the
                 Purchase Agreement; and (ii) this Agreement does not govern or affect the
                 provisions or enforceability of the Governance Agreement of even date described
                 in Subsection 2.7(c) of the Purchase Agreement.




© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                 4
2.     Consents and Acknowledgement. The Company hereby consents to the creation by the
Corporation of the Bank Obligations, the Bank Security, the Vendor Obligations and the Vendor
Security. The Bank hereby consents to the creation by the Corporation of the Company
Obligations, the Company Security, the Vendor Obligations and the Vendor Security. Each of
the Vendors hereby consents to the creation by the Corporation of the Company Obligations, the
Company Security, the Bank Obligations and the Bank Security.

3.      Security.

        (a)      Each of the Corporation, the Company and the Vendors agrees that it will not
                 directly or indirectly take any action, consent to the taking of any action, or cause
                 or assist any person to take any action to challenge the validity, legality,
                 perfection, priority or enforceability of any the Bank Security.

        (b)      Each of the Corporation, the Company and the Bank agrees that it will not
                 directly or indirectly take any action, consent to the taking of any action, or cause
                 or assist any person to take any action to challenge the validity, legality,
                 perfection or enforceability of the Vendor Security.

        (c)      Each of the Corporation, the Bank and the Vendors agrees that it will not directly
                 or indirectly take any action, consent to the taking of any action, or cause or assist
                 any person to take any action to challenge the validity, legality, perfection or
                 enforceability of the Company Security.

4.      Priorities.

        (a)      With respect to Inventory and Receivables, the Company Security, the Bank
                 Security and the Vendor Security shall rank and be enforceable in all respects and
                 for all purposes in the following priorities:

                 (i)     first, the Company Security to the extent of the Company Obligations;

                 (ii)    second, the Bank Security to the extent of the Bank Obligations; and

                 (iii)   third, the Vendor Security to the extent of the Vendor Obligations.

        (b)      With respect to all of the assets, undertaking and property of the Corporation
                 other than Inventory and Receivables, the Company Security, the Bank Security
                 and the Vendor Security shall rank and be enforceable in all respects and for all
                 purposes in the following priorities:

                 (i)     first, the Bank Security to the extent of the Bank Obligations;

                 (ii)    second, the Company Security to the extent of the Company Obligations;
                         and


© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                    5
                 (iii)   third, the Vendor Security to the extent of the Vendor Obligations.

        (c)      The priorities herein shall apply in all events and circumstances regardless of:

                 (i)     the date of execution, delivery, attachment, filing, registration, perfection
                         or enforcement, or the method of perfection of any of the Company
                         Security, the Bank Security or the Vendor Security;

                 (ii)    the date of any loan, advance, advances or other accommodation; or

                 (iii)   the date of any default or enforcement under or in respect of any of the
                         Company Obligations, the Company Security, the Bank Obligations, the
                         Bank Security, the Vendor Obligations, the Vendor Security, or the dates
                         of any crystallization of any floating charges constituted by the Company
                         Security, the Bank Security or the Vendor Security.

        (c)      Any insurance proceeds received by the Corporation shall be dealt with in
                 accordance with this Agreement as though such insurance proceeds were paid or
                 payable as proceeds of realization of the collateral for which they compensate.

        (d)      Subject to Section 3, nothing in this Agreement shall be construed as entitling any
                 of the Company, the Bank or the Vendors to receive any of the proceeds of
                 disposition of any of the property, assets or undertaking of the Corporation in
                 respect of which it does not have security or in respect of which such party’s
                 security is invalid or unenforceable.

5.      Subordination of Payment.

        (a)      Payment of the Vendor Obligations is hereby subordinated and postponed to the
                 indefeasible payment in full of the Company Obligations and the Bank
                 Obligations provided, however, that so long as no the Company Blockage Notice
                 or the Bank Blockage Notice (as defined below) has been received by the
                 Vendors, the Corporation shall be permitted to pay to the Vendors, and the
                 Vendors shall be permitted to receive and retain Regularly Scheduled Payments in
                 accordance with the Vendor Obligations.

        (b)      If a default or an event of default as provided for in the Company Security with
                 respect to the Company Obligations occurs or has not occurred but could
                 reasonably be expected to occur as a result of a payment being made to the
                 Vendors in respect of the Vendor Obligations and a notice to that effect (a "the
                 Company Blockage Notice") is sent by or on behalf of the Company to the
                 Corporation and the Vendors, and the Corporation and the Vendors have received
                 (or are deemed in accordance with the provisions of Section 16 below to have
                 received) the Company Blockage Notice, the payments otherwise permitted under
                 Section 5(a) shall not be permitted to be made or received from the date of the
                 Company Blockage Notice until the earlier to occur of:


© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                   6
                 (i)          the day of the expiry of the Company Blockage Period; and

                 (ii)         the day at the end of the maximum number of days calculated under
                              Section 5(d) hereof if that day is earlier than the day of the expiry of
                              the Company Blockage Period.

                 In this Section 5(b), a "the Company Blockage Period" means the period between
                 the date that each of the Corporation and the Vendors receives or is deemed to
                 have received a the Company Blockage Notice under this Section 5(b) and the
                 date that each of the Corporation and the Vendors receives from the Company a
                 notice waiving the default or event of default referred to in that the Company
                 Blockage Notice or indicating that such default or event of default has been cured,
                 which notice the Company agrees to provide to the Corporation and the Vendors
                 in a timely manner following the cure or waiver of such default or enforcement,
                 as the case may be, provided that the Company’s rights hereunder shall not be
                 affected by the Company’s failure to give such a notice.

        (c)      If a default or an event of default as provided for in the Bank Security with
                 respect to the Bank Obligations occurs or has not occurred but could reasonably
                 be expected to occur as a result of a payment being made to the Vendors in
                 respect of the Vendor Obligations and a notice to that effect (the "Bank Blockage
                 Notice") is sent by or on behalf of the Bank to the Corporation and the Vendors,
                 and the Corporation and the Vendors have received (or are deemed in accordance
                 with the provisions of Section 16 below to have received) the Bank Blockage
                 Notice, the payments otherwise permitted under Section 5(a) shall not be
                 permitted to be made or received from the date of the Bank Blockage Notice until
                 the earlier to occur of:

                 (i)          the day of the expiry of the Bank Blockage Period; and

                 (ii)         the day at the end of the maximum number of days calculated under
                              Section 5(d) hereof if that day is earlier than the day of the expiry of
                              the Bank Blockage Period.

                 In this Section 5(c), a "the Bank Blockage Period" means the period between the
                 date that each of the Corporation and the Vendors receives or is deemed to have
                 received a the Bank Blockage Notice under this Section 5(c) and the date that
                 each of the Corporation and the Vendors receives from the Bank a notice waiving
                 the default or event of default referred to in that the Bank Blockage Notice or
                 indicating that such default or event of default has been cured, which notice the
                 Bank agrees to provide to the Corporation, the Company and the Vendors in a
                 timely manner following the cure or waiver of such default provided that the
                 Bank’s rights hereunder shall not be affected by the Bank's failure to give such a
                 notice.




© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                   7
                 Upon receipt by the Corporation, the Bank and the Vendors of the Company
                 Blockage Notice, the Corporation and the Vendors shall also be deemed to have
                 received a the Bank Blockage Notice thereby commencing at the Bank Blockage
                 Period concurrently with such the Company Blockage Period.

                 Upon receipt by the Corporation, the Company and the Vendors of the Bank
                 Blockage Notice, the Corporation and the Vendors shall also be deemed to have
                 received the Company Blockage Notice thereby commencing an the Company
                 Blockage Period concurrently with such the Bank Blockage Period.

        (d)      The parties agree that the maximum consecutive number of days in any particular
                 the Company Blockage Period or the Bank Blockage Period as it relates to
                 payments to the Vendors shall be 365 days. For greater certainty, neither the
                 Company or the Bank shall be entitled to send a new the Company Blockage
                 Notice or a new the Bank Blockage Notice, as the case may be, following the end
                 of such 365 day period in respect of the same continuing event of default giving
                 rise to such the Company Blockage Period or the Bank Blockage Period.

6.      Prohibited Payments.

        (a)      Except as otherwise expressly provided in section 5 of this Agreement, so long as
                 any of the Company Obligations or the Bank Obligations shall be outstanding, the
                 Corporation shall neither make nor be entitled to make and the Vendors shall not
                 receive or be entitled to receive, any payment, prepayment or other compensation
                 in respect of the Vendor Obligations. If the Vendors receive any payment,
                 prepayment or other compensation or proceeds in respect of the Vendor
                 Obligations contrary to this Agreement, the payment, prepayment, compensation
                 or proceeds shall be held by the recipient in trust for the Company or the Bank (as
                 applicable) and shall be forthwith paid over to the Company on account of the
                 Company Obligations or to the Bank on account of the Bank Obligations (as
                 applicable). To the extent the Vendors pay over any amounts to the Company or
                 the Bank in accordance with the provisions of the immediately preceding
                 sentence, then in such case, the Corporation irrevocably agrees in favour of the
                 Vendors, that such amount will be deemed not to have been paid to the Vendors
                 by the Corporation and that such amount will be repaid by the Corporation to the
                 Vendors forthwith on demand but only following receipt by the Company and the
                 Bank of all remaining amounts then owing in respect of the Company Obligations
                 and the Bank Obligations, respectively.

7.      Vendor Standstill Requirements. So long as any of the Company Obligations or the
Bank Obligations shall be outstanding, the Vendors shall not be entitled to enforce any rights
under any of the Vendor Security, petition the Corporation into bankruptcy, initiate or participate
in the initiation of any similar proceeding (including but not limited to a proceeding in respect of
the Corporation under the bankruptcy laws of the governing jurisdiction or initiate or participate
in the initiation of any proceeding claiming judgment for payment or performance of the Vendor
Obligations except:


© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                 8
        (a)      if also permitted by the terms of the Vendor Obligations, the Vendors with respect
                 to the Vendor Obligations shall be entitled to exercise any rights available to the
                 Vendors, if and only if:

                 (i)     the Company Obligations and/or the Bank Obligations have been
                         accelerated and the Company and/or the Bank (as applicable) have taken
                         steps to enforce the Company Security and/or the Bank Security (as
                         applicable) over substantially all of the assets of the Corporation; or

                 (ii)    a receiver or trustee in bankruptcy has been appointed in respect of the
                         Corporation within the meaning of the bankruptcy laws of the governing
                         jurisdiction or any person takes control or possession of substantially all of
                         the assets of the Corporation for the purpose of realization, liquidation,
                         winding up or enforcement of creditors' rights and such appointment or
                         action has not been terminated or stayed within 365 days; or

                 (iii)   an order has been made under the laws of the governing jurisdiction with
                         respect to the Corporation or a filing has been made by the Corporation
                         under the proposal provisions of bankruptcy laws of the governing
                         jurisdiction or a proceeding for reorganization, arrangement or
                         compromise of the Vendor Obligations has been brought in respect of the
                         Corporation under the laws of its jurisdiction of incorporation and, in any
                         such case, the resulting proceedings have not been concluded with the
                         consent of the Vendors within 365 days from their commencement; or

                 (iv)    an event of default under the Vendor Obligations has occurred and is
                         continuing and the Vendors have given the Company and the Bank not
                         less than 365 days written notice of the occurrence of the event of default
                         with details of the default.

        (b)      if proceedings contemplated in Section 7.1.2(a)(iii) hereof are instituted, the
                 Vendors shall be entitled to take any steps reasonably required to preserve their
                 rights in respect of the Vendor Obligations and Vendor Security but shall not take
                 any steps to terminate the proceedings or have them not apply to the Vendors for
                 a period for 365 days from their commencement.

Without limiting the foregoing, the Vendors shall not be entitled to take any steps contemplated
in this Section solely as a result of non-payment of the Vendor Obligations on its maturity or due
date except as otherwise expressly permitted herein.

Notwithstanding anything to the contrary set out above in this Section 7.1.2 of this Agreement or
elsewhere in this Agreement, the Vendors shall be entitled under any and all circumstances (and
whether or not the Vendors have received a the Company Blockage Notice or a the Bank
Blockage Notice), (a) to accelerate repayment of all of the Vendor Obligations, (b) to participate




© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                    9
in and vote with respect to the Vendors' own interest in respect of the Vendor Obligations in any
insolvency proceeding involving the Corporation (including without limitation a proceeding
under the bankruptcy laws of the governing jurisdiction and (c) receive and retain any proceeds
of realization or distribution in respect of the Corporation's property, assets and undertaking, in
accordance with but subject to the priorities set out in Section 4 of this Agreement.

8.     Amendments to Obligations. The Corporation and the Vendors shall not be entitled to
amend any documents now or hereafter entered into between them with respect to the Vendor
Obligations, or any portion thereof, without the prior written consent of the Bank and the
Company.

Each of the parties hereto hereby expressly acknowledges and agrees that the Company
Obligations, the Company Security, the Bank Obligations, the Bank Security, the Vendor
Obligations, the Vendor Security and any other documents relating thereto are subject to the
terms and conditions of this Agreement.

9.      Notices by the Company, the Bank and Vendor. the Company agrees that it will send
to the Bank and the Vendors a copy of the notice it sends to the Corporation of the occurrence of
any event of default under or in respect of the Company Obligations. the Bank agrees that it will
send to the Company and the Vendors a copy of the notice it sends to the Corporation of the
occurrence of any event of default under or in respect of the Bank Obligations. Each of the
Vendors agrees that it will send to the Company and the Bank a copy of any notice it delivers to
the Corporation of the occurrence of any event of default under or in respect of the Vendor
Obligations.

10.     Remedies. Each of the Company, the Bank and the Vendors acknowledges that all
covenants, provisions and restrictions in this Agreement are necessary and fundamental in order
to establish the respective priorities of the Company Security, the Bank Security and the Vendor
Security and that a breach by the Company, the Bank or the Vendors of any covenant, provision
or restriction would result in damages that could not adequately be compensated by monetary
award. Accordingly, it is expressly agreed that, in addition to and without limiting other
remedies available to it, the Company, the Bank and the Vendors (as the case may be) shall be
entitled to the immediate remedy of restraining orders, interim injunctions, injunctions and other
forms of injunctive and other relief as may be decreed or issued by any court of competent
jurisdiction to restrain or enjoin the Company, the Bank and the Vendors (as the case may be)
from breaching the covenants, provisions and restrictions of this Agreement.

11.     Acknowledgement of the Corporation. The Corporation acknowledges that it has
actual notice of the terms of this Agreement, consents hereto, agrees to be bound by the terms
hereof, and covenants with each of the parties that it will at all times during the continuance
hereof comply with and act in accordance with the terms, provisions and intent of this
Agreement. The Corporation also acknowledges that the terms and conditions of this Agreement
are for the sole benefit of the Company, the Bank and the Vendors and that nothing in this
Agreement shall be construed as conferring any rights upon the Corporation or any third party.




© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                10
12.     Exchange of Information. The Corporation irrevocably consents to the Company, the
Bank and the Vendors exchanging any information they have from time to time concerning the
Corporation and its undertaking, property and assets. Each of the Company, the Bank and the
Vendors agrees to exchange information with each other as to the amounts owed to them from
time to time. The Corporation irrevocably consents to

        (c)      the Company’s giving the Bank and the Vendors notice from time to time of the
                 occurrence of:

                 (i)          any event of default with respect to the Company Obligations; and

                 (ii)         any event which would with the passage of time, delivery of notice or
                              other act, constitute an event of default with respect to the Company
                              Obligations,

                 provided that the Company shall, except as provided in Section 9 hereof, not be
                 obligated to give such a notice and the Company’s rights hereunder shall not be
                 affected by the Company’s failure to give such a notice.

        (d)      the Bank’s giving the Company and the Vendors notice from time to time of the
                 occurrence of:

                 (i)          any event of default with respect to the Bank Obligations; and

                 (ii)         any event which would with the passage of time, delivery of notice or
                              other act, constitute an event of default with respect to the Bank
                              Obligations,

                 provided that the Bank shall, except as provided in Section 9 hereof, not be
                 obligated to give such a notice and the Bank's rights hereunder shall not be
                 affected by the Bank's failure to give such a notice.

        (e)      the Vendors' giving to the Company and the Bank notice from time to time of the
                 occurrence of:

                 (i)          an event of default with respect to the Vendor Obligations; and

                 (ii)         any event which would with the passage of time, delivery of notice or
                              other act, constitute an event of default with respect to the Vendor
                              Obligations,

                 provided that the Vendors shall, except as provided in Section 9 hereof, not be
                 obligated to give such a notice and the Vendors' rights hereunder shall not be
                 affected by the Vendors not giving such a notice.




© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                   11
13.    Agreement to Govern. This Agreement contains the entire understanding of the parties
concerning the priorities of the Company Obligations, the Company Security, the Bank
Obligations, the Bank Security, the Vendor Obligations and the Vendor Security and supersedes
any prior agreements, undertakings, representations and understandings, both written and oral,
with respect to such priorities and shall apply until the indefeasible payment in full of the
Company Obligations and the Bank Obligations. Notwithstanding any other provisions of this
Agreement to the contrary, this Agreement may only be amended by written agreement of the
Company, the Bank and the Vendors provided that the rights under this Agreement between the
Company and the Bank as between them may be amended by them alone without agreement to
such amendments by either the Vendors or the Corporation. In the event of a conflict between a
provision of the Company Security, the Bank Security or the Vendor Security, or other
agreement relating thereto and a provision of this Agreement, the provision of this Agreement
will govern to the extent required to remove the conflict.

14.     Further Assurances. The parties shall execute and deliver such further deeds and
assurances and do or cause to be done all such acts, matters and things as may from time to time
be necessary or conducive to the carrying out of the terms and intent of this Agreement. No
party shall take any action by which the terms or intent of this Agreement might be impaired or
defeated.

15.      Waiver, Etc. No right of the Company to enforce its rights under this Agreement shall at
any time or in any way be prejudiced or impaired by any act or failure to act on the part of the
Corporation, by any act or failure to act on the part of the Company, or by any non-compliance
by the Corporation, the Bank or the Vendors with the terms of this Agreement, regardless of any
knowledge thereof which the Company may have or be deemed to have. This Agreement shall
not suspend or otherwise affect the present or future rights and remedies of the Company with
respect to the Company Obligations or the Company Security. No right of the Bank to enforce
its rights under this Agreement shall at any time or in any way be prejudiced or impaired by any
act or failure to act on the part of the Corporation, by any act or failure to act on the part of the
Bank, or by any non-compliance by the Corporation, the Company or the Vendors with the terms
of this Agreement, regardless of any knowledge thereof which the Bank may have or be deemed
to have.

16.     Address for Notice. Any notice required to be given and any payments required to be
made hereunder shall be deemed to have been properly given or paid, if delivered personally or
by telecopier (in the case of notices only) to the addresses set forth below:

        (a)      to the Company at:




                 Fax:


© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                  12
        (b)      to the Bank at:




                 Fax:


        (c)      to the Vendors at:




                 Fax:

        (d)      to the Corporation at:




                 Fax:


and if sent by telecopier, shall be deemed to be received by the party to whom it is addressed on
the date of transmission and, if delivered shall be deemed to have been received by the party to
whom it is addressed at the time of actual receipt. Any party may change its address for notice
or payment at any time by notice given to the other parties hereto pursuant to the provisions of
this Agreement.

17.     Operation of Bank Accounts. the Company shall have no obligation to inquire into the
source of funds received by the Company from the Corporation or others nor will the Company
be considered a trustee or constructive trustee with respect to proceeds of sale of property and
assets of the Corporation upon which the Bank has a prior charge and the Company will be free
to apply funds the Company receives from the Corporation against its indebtedness to the
Company except where:

(a)     prior to the Company receiving the funds, the Bank and/or the Corporation has advised
        the Company in writing that the Corporation is proposing to sell certain of its property
        and assets of the Corporation upon which the Bank has a charge prior to the Company; or

(b)     the Bank has advised the Company in writing that the Corporation is in default under the
        Bank Security; or


© Copyright 2012 Docstoc Inc. registered document proprietary, copy not              13
(c)     the Corporation is in default under the Company Security and the Company has taken
        steps to enforce the Company Security.

        After the occurrence of any of the foregoing events the Company shall hold funds upon
which the Bank has a charge prior to the Company in trust for the Bank and forthwith remit the
same to the Bank upon receipt. In addition, after the occurrence of the event referred to in clause
(b) of this Section 17, the Company shall advise the Bank promptly after the Company’s receipt
of any funds upon which the Bank may have a prior claim.

18.     Successors and Assigns. This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective legal representatives, successors and permitted
assigns. Without limiting the generality of the foregoing this Agreement shall be binding on all
present and future holders of the Vendor Obligations. There shall be no sale, assignment or
transfer of the Vendor Obligations, or any part thereof, to any person unless the prospective
purchaser, assignee or transferee enters into an agreement in a form acceptable to the Company
and the Bank, acting reasonably, in favour of the other parties to this Agreement to be bound by
its terms as if such purchaser, assignee or transferee was an original party to this Agreement.
There shall be no sale, assignment or transfer of the Bank Obligations, or any part thereof, to any
person unless the prospective purchaser, assignee or transferee enters into an agreement in favour
of the other parties to this Agreement to be bound by the terms of this Agreement as if such
purchaser, assignee or transferee was an original party to this Agreement. There shall be no sale,
assignment or transfer of the Company Obligations, or any part thereof, to any person unless the
prospective purchaser, assignee or transferee enters into an agreement in favour of the other
parties to this Agreement to be bound by the terms of this Agreement as if such purchaser,
assignee or transferee was an original party to this Agreement.

19.     Term of Agreement. Unless terminated by written agreement of the Company, the Bank
and the Vendors, this Agreement shall continue until the indefeasible payment in full of all the
Company Obligations and the Bank Obligations upon which this Agreement shall terminate.
The Vendors shall be released in full from this Agreement upon the indefeasible payment in full
of all Vendor Obligations in accordance with the terms of this Agreement and the discharge and
release in full of all Vendor Security.

20.     Counterparts and Facsimile. This Agreement may be executed in one or more
counterparts and by facsimile signatures, each of which counterparts when executed by original
or facsimile signatures shall constitute an original and all of which counterparts when executed
by original or facsimile signatures shall constitute one and the same agreement. A party
executing by facsimile shall immediately after execution provide the other parties with an
originally signed counterpart.

21.    Governing Law. This Agreement shall be construed and interpreted in accordance with
the laws of the State of ________________ and each of the parties hereby attorns to the non-
exclusive jurisdiction of the courts thereof.




© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                14
        IN WITNESS WHEREOF the parties have executed this Agreement on the date first
written above.


                                                            (THE COMPANY)



                                                            By:_______________________________
                                                            Name:
                                                            Title:
                                                            I have authority to bind the Company.

                                                            (THE BANK)

                                                            By:_______________________________
                                                            Name:
                                                            Title:
                                                            I have authority to bind the Bank.



                                                            _________________________________
                                                            Vendor

                                                            _________________________________
                                                            Vendor

                                                            (CORPORATION)


                                                            By:_________________________________
                                                            Name:
                                                            Title:
                                                            I have authority to bind the Corporation.




© Copyright 2012 Docstoc Inc. registered document proprietary, copy not                   15
                                             SCHEDULE "A"

                                 [Copy of Vendor Note and Security]




© Copyright 2012 Docstoc Inc. registered document proprietary, copy not   16

								
To top