EXHIBIT 5
BRIDGE LOAN AGREEMENT
THIS AGREEMENT dated for reference the 15th day of August, 2001,
BETWEEN:
FORUM INTERAMERICAN CORP., a Panamanian company
(herein called the "Lender")
AND:
COMMERCIAL CONSOLIDATORS CORP., a Panamanian company
(herein called the "Borrower")
AND:
COMMERCIAL CONSOLIDATORS CORP., a corporation
duly incorporated under the laws of Alberta, Canada
(herein called the "Guarantor")
WHEREAS:
A. The Lender has agreed to make a loan to the Borrower for the
purpose of general corporate working capital;
B The Borrower is a wholly owned subsidiary of the Guarantor,
and the Guarantor has agreed to guarantee the obligations of the Borrower
hereunder; and
C. The parties have agreed to enter into this Agreement on the
terms and conditions as hereinafter described.
NOW THEREFORE. in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties covenant and agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Where used herein or in any amendment hereto, unless
the context otherwise requires, each of the words and phrases set out in
Schedule "A" annexed hereto will have the meanings set forth therein.
1.2 "Herein," "hereunder," and similar terms refer to
this Agreement as a whole and not to any specific clause or provision thereof.
1.3 Unless the context otherwise requires, words
importing the singular include the plural and vice versa, and words importing
gender include all genders.
1.4 If any provision, covenant, or agreement contained in
this Agreement is invalid or unenforceable, in whole or in part, then such
invalid or unenforceable provision, covenant, or agreement or part thereof will
be severed from and will not affect the validity or enforceability of the
remainder of this Agreement.
1.5 Any reference in this Agreement to a statute will
include any amendment or successor statute and any regulations thereunder in
force from time to time.
1.6 The headings appearing in this Agreement have been
inserted for convenience of reference only and in no way define, limit, or
enlarge the scope or meaning of the provisions of this Agreement.
1.7 Unless otherwise stated, all references in this
Agreement to a designated "Section," "Subsection," or other subdivision or to a
schedule is to the designated section, subsection, or other subdivision of, or
schedule to, this Agreement.
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1.8 This Agreement will ensure to the benefit of and be
binding upon the successors and assigns of the Lender and the personal
representatives, successors and permitted assigns of the Borrower and the
Guarantor.
1.9 This Agreement will be governed by and construed in
accordance with the law of Ontario and the federal laws of Canada applicable
therein (excluding any conflict of laws rule or principle which might refer such
construction to the laws of another jurisdiction) and the Parties submit to the
non-exclusive jurisdiction of the courts of Ontario, and to the extent they may
legally do so, waive the right to a jury in any trial relating to this
Agreement. the Loan or any right or obligation related thereto.
1.10 Unless otherwise provided, all dollar amounts
referred to in this Agreement are in lawful money of the United States of
America.
1.11 The following Schedules attached hereto are hereby
incorporated into this Agreement and form a part hereof:
(a) Schedule A-- Definitions;
(b) Schedule B-- Promissory Note;
(c) Schedule C-- Permitted Encumbrances;
(d) Schedule D-- Warrant Certificate;
(e) Schedule E-- Principal Place of Business and
Chief Executive Office of the Borrower, Guarantor and Material Subsidiaries and
Location of Assets;
(f) Schedule F-- Guarantee;
(g) Schedule G-- General Security Agreement;
(h) Schedule H-- Directors, Officers and
Material Subsidiaries; and
1.12 Unless the context otherwise requires, all terms
defined in the body of this Agreement will have the same meaning in the
Schedules attached hereto.
2. LOAN
2.1 The Lender will advance to the Borrower, by way of a
single draw on the Closing Date, the sum of US $400,000 (the "Loan"), subject to
the terms and conditions contained herein and evidenced by the Note.
3. INTEREST RATE
3.1 The Loan or so much thereof as is outstanding from
time to time will bear interest at the rate of 14% per annum.
3.2 Interest on the Loan will be calculated and payable
monthly in arrears, both before and after maturity.
3.3 All overdue and unpaid interest, fees, costs and
other amounts payable by the Borrower hereunder or under the Security Documents
will bear interest both before and after each of maturity, default and judgment
at the rate specified in Subsection 3.1 hereof.
3.4 If the interest charged or chargeable on the Loan
advanced, pursuant to this Agreement, would constitute an illegal rate of
interest, then the interest charged or chargeable under this Agreement will be
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reduced so that the total interest charged or chargeable will be that rate of
interest which is 1% per annum less than the minimum rate, which would be an
illegal rate of interest calculated in accordance with generally accepted
actuarial practices and principles approved by the Canadian Institute of
Actuaries. Such reduction will be effected by reducing or refunding to the
Borrower such of those fees, charges and expenses (or a combination thereof)
constituting "interest" (as such term is defined or determined by the statute,
establishing or defining illegal rates of interest) payable hereunder, as may be
designated by the Lender.
3.5 Any and all payments by the Borrower hereunder will
be made free and clear of and without deduction for any and all present or
future taxes, levies, duties, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto (excluding taxes imposed on the Lender's
income and by virtue of the Lender's operations) imposed by any Governmental
Authority (all such non-excluded taxes, levies, duties, imposts, deductions,
charges, withholdings and liabilities will be hereinafter defined as "Taxes").
If the Borrower will be required by the laws of any Governmental Authority to
deduct or withhold any Taxes from or in respect of any sum payable to the Lender
hereunder:
(a) the sum payable will be increased as may be
necessary so that after making all deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under this
Section 3) the Lender receives an amount equal to the sum it would have received
had no such deductions or withholdings been made;
(b) the Borrower will make such deductions and
withholdings; and
(c) the Borrower will pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable tax law and provide to the Lender evidence of such payment.
3.6 The Borrower will indemnify the Lender for the full
amount of any Taxes (other than Excluded Taxes) imposed by a Governmental
Authority on amounts payable by the Borrower under this Agreement paid or
payable by the Lender (including, without limitation, any applicable sales, use.
excise or other tax of a like nature) and any liability (including penalties,
interest and reasonable expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted, and any Taxes
(other than Excluded Taxes) levied or imposed with respect to any indemnity
payment made under this Section 3. This indemnification will be made within five
(5) business days after the date the Lender makes written demand therefor.
4. REPAYMENT
4.1 The Principal, together with any accrued but unpaid
interest, will become due and payable to the Lender 180 days after the Closing
Date (the "Maturity Date").
4.2 Interest on the outstanding balance of the amount or
amounts advanced under the Loan, at the interest rate specified in Subsection
3.1 hereof, calculated as provided in Subsection 3.2 hereof, will become due and
be paid monthly in arrears on the first day of each month during the Term until
the Principal and the interest thereon have been fully paid and satisfied.
4.3 All payments made by the Borrower under the Loan will
be applied firstly in payment of interest accrued to the date of such payment
and secondly in payment of Principal.
4.4 All payments to be made by the Borrower to the Lender
under this Agreement will be made by wire transfer to the Lender's account at:
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Dresdner Bank Lateinamerika AG
Miami Branch
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(Phone: ▇▇▇-▇▇▇-▇▇▇▇)
ABA: ▇▇▇▇▇▇▇▇▇
Account of: FORUM INTERAMERICAN CORPORATION
Account No. ▇▇-▇▇▇-▇▇▇
or at such other place as the Lender may specify in writing delivered to the
Borrower. Any payment of interest or Principal delivered or made to the Lender
by 3:00 P.M. Eastern Time on any business day will be credited as of that day,
but if made after that time, will be credited as of the next business day.
5. PREPAYMENT
5.1 Upon the Borrower giving the Lender five (5) business
days' notice thereof, the Borrower may, without incurring any penalty, reduce
the Principal in multiples of US $100,000 by paying such amounts to the Lender
in the same manner as provided in Subsection 4.4 hereof, provided that the
Borrower is not then in default hereunder and there is no outstanding default by
the Guarantor under the Security Documents.
6. COVENANTS OF THE BORROWER AND GUARANTOR
6.1 During the period that the Loan is outstanding, the
Borrower and the Guarantor jointly and severally covenant and agree as follows:
(a) the Borrower will repay the Loan and pay
interest thereon and all fees, costs, and other amounts payable hereunder at the
times and in the manner herein provided;
(b) each of the Borrower and the Guarantor will:
(i) conduct its business and affairs
diligently and only in the ordinary course, and preserve and maintain the
goodwill and corporate existence of the Borrower;
(ii) afford to the Lender and its
authorized representatives access during normal business hours to all
properties, books, contracts, commitments and records of the Borrower, Guarantor
and Material Subsidiaries, and furnish such copies (certified if requested)
thereof and other information as the Lender may reasonably request, and permit
the Lender and its authorized representatives to make such audit of the books of
account of the Borrower, Guarantor and Material Subsidiaries and the physical
verification of the assets of the Borrower, Guarantor and Material Subsidiaries
as the Lender may reasonably see fit:
(iii) comply with and conduct their
respective businesses in accordance with all terms, conditions or provisions of
any law, judgment, order, injunction, decree, regulation or ruling of any court,
domestic or foreign, or Governmental Authority, as applicable to the Borrower
and Guarantor or the business conducted by the Borrower and Guarantor;
(iv) provide prompt written notice to
the Lender of:
A. any Change in Control of
the Borrower, Guarantor or
any of the Material
Subsidiaries;
B. any litigation commenced
against the Borrower,
Guarantor or any of the
Material Subsidiaries;
C. any material adverse
change in the Borrower or
in the business operations
of the Borrower, Guarantor
or any of the Material
Subsidiaries;
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D. the occurrence of an Event
of Default;
E. any occurrence that is or
that will, with the giving
of notice or lapse of
time, result in an Event
of Default;
F. any change of name of any
of the Borrower, Guarantor
or any of the Material
Subsidiaries;
G. the acquisition by the
Borrower, the Guarantor or
any of the Material
Subsidiaries of any other
business;
H. the relocation of any
material assets of the
Borrower, Guarantor or any
of the Material
Subsidiaries outside of
their existing jurisdic-
tion of operations;
I. the occurrence of a
default under any other
loan agreement or other
material agreement of the
Borrower, the Guarantor
or any of the Material
Subsidiaries; or
J. the incurring of any
funded debt or granting of
any security by any of the
Borrower, the Guarantor,
or any of the Holding
Subsidiaries or the
Material Subsidiaries;
(v) maintain insurance as is, from time
to time, determined by the board of directors acting reasonably, to be
appropriate;
(vi) use the proceeds of the Loan for
general corporate working capital purposes only;
(vii) including any of the Material
Subsidiaries, preserve and maintain their corporate existence, rights, charter
and licences, operations, contracts and other arrangements, and the security
granted hereunder, and will continue to engage in those businesses now conducted
by them and those businesses reasonably related thereto;
(viii) provide financial statements and
other required information to the Lender in accordance with Subsection 6.4 of
this Agreement;
(ix) as it pertains to the Guarantor,
maintain compliance with the Financial Tests; and
(x) give prior notice to the Lender
with respect to any act undertaken which is contemplated by this Agreement to
only be permissible where such act is consistent with the Business Plan, said
notice to include an officer's certificate confirming that such act is
consistent with the Business Plan and detailing how such act is consistent with
the Business Plan.
6.2 The Borrower and the Guarantor jointly and severally
covenant that they will not at any time during the period that the Loan is
outstanding:
(a) incur funded debt, nor will they permit any
wholly-owned subsidiary of either the Guarantor or the Borrower to incur any
funded debt other than where such debt is incurred by the Guarantor or by a
subsidiary other than any of the Borrower, the Holding Subsidiaries and Material
Subsidiaries for purposes consistent with the Business Plan, provided that any
such debt is not secured in circumstances where such security would take
priority to the security granted by the Guarantor hereunder or pursuant to the
Security Documents, except for Permitted Indebtedness, and any further credit
facility which has been consented to in writing by the Lender, such consent not
to be unreasonably withheld;
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(b) sell, transfer or lease all, or
substantially all, of the assets and capital of either the Borrower, the
Guarantor, or any of the Holding Subsidiaries or Material Subsidiaries other
than in the ordinary course of business of either the Borrower, the Guarantor,
or any of the Material Subsidiaries, and in any event, only with the prior
written consent of the Lender, such consent not to be unreasonably withheld;
(c) guarantee any debt of any person, nor will
they permit any wholly-owned subsidiary of either the Borrower or the Guarantor
to guarantee any debt of any Person without the prior written consent of the
Lender, such consent not to be unreasonably withheld (provided that the
endorsement or deposit of a check in the ordinary course of business will not be
deemed to be a guarantee of the issuer or any other endorser thereof);
(d) except for the Permitted Encumbrances and
Subsequent Credit Facilities, grant a security interest in any of the assets of
the Borrower or the Guarantor, nor will they permit any of the Holding
Subsidiaries or Material Subsidiaries to grant any security interest which is
not a Permitted Encumbrance in any of their assets other than where the granting
of such security interest is for purposes consistent with the Business Plan;
(e) undergo an amalgamation, merger or other
corporate reorganization (whether by plan of arrangement or otherwise) with
another Person, amend its articles or continue its corporate existence into
another jurisdiction without the prior written consent of the Lender, such
consent not to be unreasonably withheld;
(f) undergo a Change of Control without the
prior written consent of the Lender, such consent not to be unreasonably
withheld, except in the event that a Change of Control results in an increase in
capital, in cash, of the Borrower which cash is applied to reduce the amount of
the Loan outstanding and owing to the Lender;
(g) materially alter the capital structure of
the Borrower or the Guarantor other than in a manner consistent with the
Business Plan;
(h) appoint a new auditor other than in
circumstances where the outgoing auditor confirms there were no "reportable
events" occurring prior to such auditor's termination or resignation as
contemplated by National Policy Statement 31, as promulgated by the Canadian
Securities Administrators or any amendment or replacement thereto;
(i) declare any dividend on the shares of the
Borrower or Guarantor, or purchase or redeem any of the outstanding and issued
shares in the capital of the Borrower or the Guarantor; and
(j) incur or permit a wholly-owned subsidiary to
incur capital expenses exceeding US $200,000. in aggregate per fiscal year of
the Guarantor other than capital expenses incurred by the Guarantor for purposes
consistent with the Business Plan or where such capital expense has been
consented to by the Lender, such consent not to be unreasonably withheld.
6.3 The Guarantor hereby grants the Lender observer
status on the board of directors of the Guarantor, whereby the Lender will
receive notice of (including copies of all materials provided from time to time
to the directors) and may attend and participate in, but may not vote at, any
meeting of the board of directors of the Guarantor during the period that the
Loan is outstanding.
6.4 During the period that the Loan is outstanding, the
Borrower and Guarantor covenant and agree as follows:
(a) The Borrower, Guarantor and Material
Subsidiaries will maintain a system of accounting and reporting established and
administered in accordance with GAAP and satisfactory to the Guarantor's
auditors or accountants respectively, and they will at all times maintain, at
their respective principal business office, proper books of account which will
contain accurate and complete records of all transactions, receipts, expenses.
assets and liabilities conducted by them; and
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(b) The Guarantor will prepare and provide to
the Lender:
(i) within 60 days of the end of each
quarterly period in each fiscal period, internally generated consolidated
financial statements of the Guarantor, including a balance sheet, profit and
loss statement, and a statement of changes in financial position as at the end
of such quarterly period, prepared in accordance with GAAP;
(ii) within 140 days of the end of each
fiscal period, audited consolidated financial statements for the Guarantor,
including a balance sheet and profit and loss statement, and a statement of
changes in financial position, prepared in accordance with GAAP;
(iii) with each of the financial
statements submitted under Subsections 6.4(b)(i) and 6.4(b)(ii) hereof, a
certificate executed by the Chief Financial Officer of the Guarantor to the
effect that to his or her knowledge no Event of Default or event which, upon
notice or lapse of time or both, would constitute an Event of Default, has
occurred and is continuing, that the covenants contained in this Agreement are
all complied with, and that the representations and warranties contained in this
Agreement and any Security Document are true and correct in all material
respects as at that date; and
(iv) promptly, from time to time, such
other information, accounts, data, cash flow analyses and projections regarding
the operations, business affairs and financial condition of the Borrower,
Guarantor and their subsidiaries as the Lender may reasonably request.
6.5 The Guarantor and the Borrower covenant and agree to
obtain and deliver to the Lender, within 30 days following the date hereof,
executed priority agreements in a form acceptable to the Lender, acting
reasonably, pursuant to which the lenders under the Other Bridge Loans
acknowledge that the security granted by the Guarantor to the Lender, pursuant
to the Security Documents, will rank pari passu with any security granted by the
Guarantor as security for the obligations of the Guarantor pursuant to the Other
Bridge Loans.
6.6 The Guarantor and the Borrower covenant and agree to
obtain and deliver to the Lender, within 30 days following the date hereof, CDNX
approval as to the grant and terms of the Warrants contemplated in this
Agreement.
7. LENDER'S COVENANTS
7.1 The Lender covenants that any security granted by the
Guarantor hereunder or pursuant to the Security Documents will rank pari passu
with any security granted by the Guarantor pursuant to the terms of any
Subsequent Credit Facility, provided that the form of such security is on terms
materially identical to the Security Documents or consented to by the Lender,
such consent not to be unreasonably withheld.
7.2 The Lender agrees to provide such priority agreements
in connection with the Subsequent Credit Facility as the Borrower may reasonably
request so as to enable security granted in respect of such facilities to rank
pari passu with security granted by the Guarantor hereunder or pursuant to the
Security Documents.
8. SECURITY DOCUMENTS
8.1 As security for repayment of the Loan, and for the
observance and performance of all other indebtedness and liabilities of the
Borrower to the Lender, the Borrower and the Guarantor, as applicable, will
provide or cause to be provided to and in favor of the Lender, in a form and
upon terms satisfactory to the Lender's Solicitors, the following security:
(a) the Note;
(b) the unlimited, irrevocable and unconditional
guarantee from the Guarantor to the Lender in the form attached hereto as
Schedule "G" (the "Guarantee"); and
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(c) the General Security Agreement granted by
the Guarantor in favor of the Lender creating a security interest over all of
the Guarantor's present and after acquired personal property in the form
attached hereto as Schedule "H" (the "GSA"), and subject only to the Permitted
Encumbrances, provided that it is acknowledged that such security will rank pari
passu with security granted by the Guarantor in respect of the Other Bridge
Loans.
9. EVENTS OF DEFAULT
9.1 At the option of the Lender, the whole of the
outstanding balance of the Loan will immediately become payable, the Security
Documents will become enforceable and the Lender may take any action, suit
remedy or proceeding authorized or permitted under any of the Security Documents
or at law or at equity upon the happening of any one or more of the following
events:
(a) Borrower's Payments-- if the Borrower
defaults in any payment of monies payable by it hereunder when the same becomes
due hereunder;
(b) Non-Performance -- if the Borrower or the
Guarantor makes default in the observance or performance of anything required to
be done or any covenant or condition to be observed or performed hereunder which
is not a payment default and such default is not remedied within 15 days after
notice thereof has been received by the Borrower;
(c) Guarantor's Payments-- if the Guarantor
defaults in any payment of monies payable by it under any of the Security
Documents when the same becomes due thereunder;
(d) Non-Performance -- if the Guarantor makes
default in the observance or performance of anything required to be done or any
covenant or condition to be observed or performed pursuant to the Security
Documents which is not a payment default and such default is not remedied within
15 days after notice thereof has been received by the Guarantor;
(e) Misrepresentation -- if any representation
or warranty given hereunder by the Borrower or the Guarantor or by any director
or officer thereof is untrue in any material respect;
(f) Winding-Up-- if an order is made or a
resolution is passed for the winding-up of the Borrower or Guarantor, or if a
petition is filed for the winding-up of the Borrower or Guarantor;
(g) Bankruptcy-- if the Borrower or Guarantor
commits or threatens to commit any act of bankruptcy; becomes insolvent; or
makes an assignment or proposal under applicable bankruptcy and insolvency
legislation, a general assignment in favor of its creditors, or a bulk sale of
its assets; or if a bankruptcy petition is filed or presented against the
Borrower or Guarantor;
(h) Receivership-- if a receiver, receiver and
manager, or receiver-manager, or any person with like powers, is appointed for
all or any material portion of the assets of the Borrower or Guarantor;
(i) Arrangement-- if any proceedings with
respect to the Guarantor are commenced under the Companies Creditors Arrangement
Act (Canada) or the Bankruptcy and Insolvency Act (Canada) or any similar
statute under the laws of any other jurisdiction; and
(j) Other Indebtedness -- if the Borrower or
Guarantor permits any sum which has been admitted as due by it, or is not
disputed as due by it. and which forms or is capable of being made a charge upon
any of the property of the Borrower, Guarantor or of any of the Material
Subsidiaries, as the case may be, to remain unpaid for 30 days after proceedings
have been taken to enforce the same.
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10. ISSUANCE OF WARRANTS
10.1 As further consideration for the issuance of the loan
granted by the Lender, the Borrower and the Guarantor agree to the issuance of
25,000 warrants, each warrant entitling the holder of such warrant to purchase
one common share of the Guarantor at the price of $4.18 per share.
10.2 If the issuance of the Warrants as contemplated in
Subsection 10.1 is required by CDNX to be effected at a price per share which is
greater than $4.18 per share, the Company shall forthwith issue a replacement
warrant certificate reflecting such adjusted price and, in the event that the
Lender exercises the Warrants and immediately upon such exercise, the Borrower
shall pay to the Lender the cash equivalent of the difference between such
prices (multiplied by the number of Warrants then exercised) as a deferred fee
in respect of the Loan. Such fee shall be an obligation of the Borrower secured
by the Security Documents.
11. REPRESENTATIONS AND WARRANTIES OF THE BORROWER AND GUARANTOR
11.1 The Borrower and the Guarantor jointly and severally
warrant and represent to the Lender, with the intent that the Lender will rely
thereon in entering into this Agreement and in advancing the Loan contemplated
herein, that:
(a) each of the Borrower and Guarantor has the
power and capacity and good and sufficient right and authority to enter into
this Agreement and those Security Documents to which it is a party on the terms
and conditions herein set forth and has the power, authority and capacity to
conduct the business as now conducted by it;
(b) each of the Borrower, Guarantor and the
Material Subsidiaries is duly incorporated, validly existing and in good
standing under the laws of its incorporating jurisdiction;
(c) Schedule "I" hereto lists each of the
Borrower's and Guarantor's authorized and issued share capital, their directors
and officers, and their ownership of shares in any other corporation (including,
without limitation, the Material Subsidiaries) or their interest in any other
entity;
(d) each of the Material Subsidiaries is,
directly or indirectly a wholly-owned subsidiary of the Guarantor;
(e) each of the Borrower, Guarantor and the
Material Subsidiaries holds all licences and permits required for the conduct in
the ordinary course of its business and for the uses to which its assets have
been or may be put and all such licences and permits are in good standing in all
material respects and the conduct and uses of the same by it is in compliance in
all material respects with all laws, zoning and other bylaws, building and other
restrictions, rules, regulations and ordinances applicable to it, its business
or its assets;
(f) in respect of each of the Borrower and
Guarantor, the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the terms hereof,
does not and will not:
(i) conflict with or result in a breach
of or violate any of the terms, conditions, or provisions of its constating
documents;
(ii) conflict with or result in a breach
of or violate any of the terms, conditions or provisions of any law, judgment,
order, injunction, decree. regulation or ruling of any court , domestic or
foreign, or Governmental Authority which it is subject or constitute or result
in a default under any agreement, contract or commitment to which it is a party;
(iii) give to any person any remedy,
cause of action, right of termination, cancellation or acceleration in or with
respect to any agreement, contract, or commitment to which it is a party;
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(iv) give to any government or
Governmental Authority any right of termination, cancellation, or suspension of,
or constitute a breach of or result in a default under any permit, license,
control, or authority issued to it and which is necessary or desirable in
connection with the conduct and operation of its business and the ownership,
leasing or use of its assets; or
(v) constitute a default by it or an
event which, with the giving of notice or lapse of time or both, might
constitute an event of default or non-observance under any agreement, contract,
indenture or other instrument relating to any Indebtedness of it which would
give any person the right to accelerate the maturity for the payment of any
amount payable under that agreement, contract, indenture, or other instrument;
(g) the Financial Statements were prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with prior reporting periods, are true and correct in every material
respect and present fairly and accurately the financial condition and position
of it and the results of its operations;
(h) in respect of each of the Borrower,
Guarantor and the Material Subsidiaries, all of its tax returns and material
reports required by law to be filed prior to the Closing Date have or will have
been filed and are true or will be complete and correct, and all Taxes and other
government charges (including all income, excise, sales, business and property
taxes and other rates, charges, assessment, levies, duties, taxes.
contributions, fees and licenses) have been accrued in the Financial Statements;
(i) in respect of each of the Borrower,
Guarantor, the Holding Subsidiaries and the Material Subsidiaries there is no
basis for and there are no actions, suits, judgments, investigations or
proceedings outstanding or pending or threatened against or affecting it at law
or in equity or before or by any court or federal, provincial, state, municipal
or other Governmental Authority, department, commission. board, tribunal, bureau
on agency and it is not a party to or threatened with any litigation;
(j) in respect of each of the Borrower,
Guarantor, the Holding Subsidiaries and the Material Subsidiaries, it is not
insolvent, nor have any insolvency proceedings been commenced against it;
(k) in respect of each of the Borrower,
Guarantor and the Material Subsidiaries, its principal place of business, chief
executive office and the location of the Guarantor's principal tangible assets
are as disclosed in Schedule "F" attached hereto;
(l) in respect of each of the Borrower,
Guarantor, the Holding Subsidiaries and the Material Subsidiaries, there has not
occurred, nor to the best of its knowledge is there an event which, with the
passing of time, could become an Event of Default;
(m) in respect of each of the Borrower,
Guarantor, the Holding Subsidiaries and' the Material Subsidiaries, it holds
clear title to all of its real, personal and intellectual property, subject only
to the Permitted Encumbrances and the security interest granted to the Lender
pursuant to the Security Documents;
(n) no proceedings for the purpose of or having
the effect of seizing or suspending trading in any securities of the Guarantor
by any stock exchange, securities regulatory authority, other regulatory
authority or court have been instituted or are pending, contemplated or
threatened;
(o) since February 28, 2001, there have been no
changes affecting the Borrower, Guarantor, the Holding Subsidiaries and any
Material Subsidiaries that would constitute a material adverse change (actual,
proposed on prospective) in respect of the Borrower, Guarantor and the Material
Subsidiaries taken as a whole and no contingent liability that is material to
the Guarantor has arisen except in each case as disclosed:
(i) by way of filings pursuant to
applicable securities laws, or
(ii) in writing by the Guarantor to the
Lender delivered to the Lender prior to the Closing Date; and any statement
disclosed pursuant to Subsections 11.1(o)(i) and 11.1(o)(ii) hereof does not
contain any "misrepresentations" (as defined in the Securities Act (Ontario));
10
(p) the Lender has been provided with copies of
all material instruments and agreements including, without limitation, loan
agreements and security documents, in respect of all Permitted Indebtedness;
(q) each of the Holding Subsidiaries is duly
incorporated, validly existing and in good standing under the laws of its
incorporating jurisdiction and each does not, as of the Closing Date, carry on
any active operating business; and
(r) the remaining undrawn CAD $300,000 portion
of the BDC Loan will not be drawn by the Guarantor any time during the period
that the Loan remains outstanding.
12. WAIVER
12.1 The Lender may waive any breach by the Borrower or
the Guarantor of any provision contained in this Agreement on in the Security
Documents on any default by the Borrower or the Guarantor in the observance or
performance of any covenant or condition required to be observed or performed by
the Borrower or the Guarantor under the terms of this Agreement or any of the
Security Documents; but any waiver by the Lender of such breach or default, or
any failure to take any action to enforce its rights hereunder on under any of
the Security Documents, will not extend to or be taken in any manner whatsoever
to affect any subsequent breach or default or the rights resulting therefrom.
13. REMEDIES NOT RESTRICTIVE
13.1 All remedies stipulated for the Lender herein or in
any of the Security Documents will be deemed to be in addition to, and not
restrictive of, the remedies to which the Lender might be entitled at law or in
equity. The Lender may realize on the Security Documents or any part thereof in
such order as it may be advised, and any such realization by any means will not
bar realization of any other security or any part or parts thereof, nor will any
single or partial exercise of any right or remedy preclude any other or further
exercise thereof, nor will the failure on the part of the Lender or any delay in
exercising any rights under this Agreement or under any of the Security
Documents operate as a waiver.
14. CONDITIONS OF LOAN
14.1 The Lender's obligation to advance the Loan to the
Borrower is subject to the following conditions being satisfied:
(a) the Lender receiving the following
documents:
(i) this Agreement executed by the
Borrower and the Guarantor;
(ii) the Security Documents executed by
the Borrower or the Guarantor, as applicable;
(iii) an opinion of the Guarantor's
Solicitors addressed to the Lender and the Lender's Solicitors in a form
reasonably satisfactory to the Lender's Solicitors confirming the due
incorporation of the Guarantor, authorization by it of the transactions
contemplated herein, and validity and enforceability of the documents entered
into herein, that to the best of the knowledge of the Guarantor's Solicitors,
this Agreement is not in contravention of any financial arrangements of the
Guarantor, and opining as to such other matters as Lender's Solicitors may
reasonably require;
(iv) such other certificates, statutory
declarations, agreements or materials, in form and substance satisfactory to the
lender and Lender's counsel, as the lender and Lender's counsel may request; and
11
(b) the representations and warranties of the
Borrower and Guarantor contained herein are true and correct in all material
respects at and as of the Closing except as may be disclosed in writing to and
approved by the Lender;
(c) as of the Closing, no Event of Default nor
any event which with the passing of time or giving of notice would become an
Event of Default has occurred or is continuing;
(d) the board of directors of the lender
approves by resolution the granting of the Loan, on the terms and conditions
contained herein; and
(e) the Guarantor is in compliance with the
Financial Tests; and
(f) the boards of directors of each of the
Borrower and the Guarantor shall have authorized and approved, as applicable,
this Agreement, the Security Agreements the issuance of the Warrants, and the
form of Warrant Certificates, and all matters relating thereto, it being hereby
represented by the Borrower and the Guarantor that such authorization and
approvals have been obtained or will be obtained prior to Closing.
15 NON-MERGER
15.1 It is understood and agreed that none of the
execution and delivery of the Security Documents, the registration of the
Security Documents, and the disbursement of funds under the Loan will in any way
merger or extinguish this Agreement or the terms and conditions hereof, which
will continue in full force and effect.
16. PARAMOUNTCY
16.1 In the event of any inconsistency or conflict between
any of the provisions of this Agreement and any of the provisions of the
Security Documents, the provisions of this Agreement will prevail; but the
omission from this Agreement of any covenant, agreement, term, or condition
contained in any of the Security Documents will not, of itself, be considered to
be an inconsistency or a conflict.
17. EXPENSES
17.1 Whether or not the transactions contemplated hereby
are consummated. the Borrower on the Guarantor will pay:
(a) all of the Lender's costs and expenses
(including the Lender's reasonable legal costs) incurred in connection `with the
preparation of this Agreement and all agreements and instruments provided for
hereunder, and the completion of the transactions contemplated herein or
incidental hereto; and
(b) any costs incurred by the Lender in
enforcing its rights and remedies under the Agreement and the Security
Documents.
17.2 Notwithstanding the obligations of the Borrower and
Guarantor contained in Subsection 17.1 hereof the Lender agrees that the amount
payable by the Borrower and Guarantor in connection with the Lender's legal
costs pursuant to Subsection 1 7.1(a) hereof will not exceed the total sum of
CDN $3,000.00 plus disbursements and all applicable Taxes.
18. DISCHARGE OF SECURITY DOCUMENTS
18.1 If the Borrower and Guarantor are not in default
under this Agreement or the Security Documents then upon payment by the Borrower
of all amounts outstanding under the Loan to the Lender, the Lender will at the
request and at the expense of the Borrower cancel and discharge the charges
registered pursuant to the Security Documents against the Borrower and Guarantor
and will execute and deliver to the Borrower all such documents and instruments
which are reasonably requested for that purpose.
12
19. NOTICES
19.1 Any notice required or permitted to be given under
this Agreement will be in writing and may be given by delivering, sending by
electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy, or sending by prepaid registered mail, the
notice to the following address or number:
If to the Lender:
▇▇ ▇▇▇▇▇ ▇-▇▇ ▇▇▇▇ ▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
2500, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Borrower or Guarantor:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇ Weingarteni
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇
Barristers and Solicitors
800 - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(or to such other address or number as any party may specify by notice in
writing to another party).
19.2 Any notice delivered or sent by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy on a Business Day will he deemed conclusively to have been
effectively given on the Business Day the notice was delivered, or the
transmission was sent successfully to the number set out above, as the case may
be,. provided such notice is received by 5:00 P.M., local time, of the
addressee. Any notice which is received on a day which is not a Business Day, or
on a Business Day after 5:00 P.M. local time of the addressee, will be deemed to
have been received on the next following Business Day.
19.3 Any notice sent by prepaid registered mail will be
deemed conclusively to have been effectively given on the third Business Day
after posting; but if at the time of posting or between the time of posting and
the third business day thereafter there is a strike, lockout, or other labor
disturbance affecting postal service, then the notice will not be effectively
given until actually delivered.
13
20. CONSENT
20.1 For the purposes of those sections of this Agreement
which contemplate consent by the Lender, such consent shall be deemed to have
been given in circumstances where the Lender receives an informed request for
such consent and does not object in writing within 10 business days of receipt
of such notice.
21. ENTIRE AGREEMENT
21.1 The provisions contained herein and in the Security
Documents constitute the entire agreement between the parties and supersede all
previous communications, representations, and agreements. whether oral or
written, between the parties with respect to the subject matter hereof, there
being no representations, warranties, terms, conditions, undertakings, or
collateral agreements (express, implied, or statutory), between the parties
other than as expressly set forth in this Agreement.
22. GUARANTOR
22.1 By executing this Agreement, the Guarantor
acknowledges the terms and conditions contained herein and covenants and agrees
to perform all of the covenants and agreements herein in favor of the Lender on
the part of the Guarantor.
23. CONFIDENTIALITY
23.1 Each of the parties and their respective authorized
representatives and advisors will keep confidential the existence and details of
the transactions contemplated by this Agreement and all information relating
thereto, save as may be required by law or in order to enforce their respective
rights hereunder. In the event that the Agreement is terminated for any reason,
each of the parties will keep in the strictest confidence all such information,
except to the extent that the disclosure of such information is required as a
matter of law.
24. COUNTERPARTS
24.1 This Agreement may be executed in several
counterparts or by facsimile, each of which will be deemed to be an original and
all of which will together, for all purposes, constitute one and the same
instrument, binding on the parties notwithstanding that the parties are not
signatory to the same counterpart or facsimile.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the ____ day of __________, 2001.
FORUM INTERAMERICAN CORP.
Per: /s/Authorized Signatory
----------------------------
Authorized Signatory
COMMERCIAL CONSOLIDATORS CORP.,
a Panamerican company
Per: /s/Authorized Signatory
----------------------------
Authorized Signatory
14
COMMERCIAL CONSOLIDATORS CORP.,
An Alberta corporation
Per: /s/Authorized Signatory
Authorized Signatory
15
SCHEDULE A
DEFINITIONS
1.1 In this Agreement:
(a) "Bank Indebtedness" means the aggregate of any Indebtedness of
the Borrower or the Guarantor, as the case may be, owed to any
chartered bank. trust company, insurance company, credit union
on other similar financial institution:
(b) "BDC Loan" means that credit facility provided by Business
Development Bank of Canada to the Guarantor pursuant to a
letter agreement dated October 13, 1999 and accepted inter
alia by the Guarantor on October 14. 1999, with an outstanding
principal amount of up to CAD $300,000;
(c) "Business Day" means any day other than a Saturday, Sunday or
statutory holiday in Ontario;
(d) "Business Plan" means that business plan of the Guarantor
attached as Schedule I hereto;
(e) "Change of Control" means a change of ownership of a majority
of the voting shares in the capital stock of a company;
(f) "Closing" means the completion of the transactions
contemplated hereby in accordance with the terms hereof on or
with the effect as of the Closing Date;
(g) "Closing Date" means August 15, 2001, or such date as the
parties may agree to in writing;
(h) "Common Shares" means those common shares in the capital of
the Guarantor which are currently traded on the CDNX under the
stock exchange symbol CCZ;
(i) "Consolidated Current Assets" means for any person, the
consolidated current assets of such person determined in
accordance with GAAP;
(j) "Consolidated Current Liabilities" means for any person, the
consolidated current liabilities of such person, determined in
accordance with GAAP;
(k) "Current Ratio" means, at any date, the ratio of:
(i) Consolidated Current Assets of the Guarantor at such
date; to
(ii) Consolidated Current Liabilities of the Guarantor at
such date;
(l) "Encumbrance" means any mortgage, debenture, charge,
hypothecation, pledge, lien or other security interest or
encumbrance of any kind or nature, regardless of form and
whether consensual or arising by law, statutory or otherwise
that secures payment of any indebtedness or the performance of
any obligation or creates in favor of or grants to any person
any proprietary right;
(m) "Event of Default" means the breach of any covenant set out in
Section 7 hereof or any of the events or circumstances
mentioned in Section 9 hereof;
(n) "Excluded Taxes" means. in relation to the Lender:
(i) any taxes imposed on the Lender's net income or
capital by any Governmental Authority as a result of
the Lender:
16
A. carrying on a trade or business subject to
such Governmental Authority or having a
permanent establishment subject to such
Governmental Authority;
B. being organized under the laws of such
Governmental Authority; or
C. being or being deemed to be resident of such
Governmental Authority; or
(ii) any taxes imposed solely by reason of the failure of
the Lender to comply with any certification,
identification or other reporting requirements
imposed by applicable laws with respect to
nationality, residence or other connection with the
relevant jurisdiction;
(o) "Financial Statements" means consolidated and unconsolidated
unaudited financial statements for the most recent quarter
ending May 31, 2001, for each of the Borrower and the
Guarantor;
(p) "Financial Tests" means, as it applies to the Guarantor, that
the Guarantor will conduct its affairs in such manner that at
no time will:
(i) the ratio of the Bank Indebtedness of the Guarantor
to Tangible Net Worth of the Guarantor, on a
consolidated basis, exceed 1.25 to 1;
(ii) the Current Ratio of the Guarantor, on a consolidated
basis, become less than 1.25 to 1; or
(iii) Tangible Net Worth of the Guarantor. on a
consolidated basis, become less than US
$4,000,000.00;
(q) "GAAP" means Canadian generally accepted accounting
principles, consistently applied:
(r) "Government Authority" means any federal, provincial, state,
municipal, county or regional government or governmental
authority, domestic or foreign (including, without limitation,
Canadian or Panamanian), and including any department,
commission, bureau, board, administrative agency or regulatory
body of any of the foregoing;
(s) "GSA" has the meaning ascribed to it in Subsection 8.1(c)
hereof;
(t) "Guarantee" has the meaning ascribed to it in Subsection
8.1(b) hereof;
(u) "Guarantor's Solicitors" means Clark, Wilson, Barristers &
Solicitors;
(v) "Holding Subsidiaries" means, 1058199 Ontario, Inc., Gestion
Clauvic, Inc. and Groupe de Gestion ▇▇▇▇▇▇▇, Inc.;
(w) "Indebtedness" means any and all advances, debts, duties,
endorsements, guarantees, liabilities, obligations,
responsibilities and undertakings of a person assumed,
created, incurred or made, whether voluntary or involuntary,
however arising, whether due or not due, absolute, inchoate or
contingent, liquidated or unliquidated, determined or
undetermined, direct or indirect, express or implied, and
whether such persons may be liable individually or jointly
with others;
(x) "Lender's Solicitors" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP, Barristers &
Solicitors;
(y) "Loan" has the meaning ascribed to it by Subsection 2.1
hereof;
(z) "Market Price" means for any particular day, the closing price
of the Common Shares on CDNX;
17
(aa) "Material Subsidiaries" means La Societe Desig, Inc., Yam
International Communications, Inc., Central Point
Technologies, Inc., Business Supplies Are Us, Inc., Mirage
Trading Corp., Max Systems Group, Inc., Max Systems Group,
Inc. (USA), and Tri-Vu Interactive Corp.;
(bb) "▇▇▇▇▇▇▇▇ Facility" means the credit facility of up to US
$3,300,000 advanced by ▇▇▇▇▇▇▇▇ Financial, pursuant to inter
alia, an Agreement dated the 31st day of July, 2000, made
among MFI Export Finance, Inc., Business Supplies Are Us,
Inc., A.C.C. Corp. and Mirage Trading Corp., qualified by a
letter dated September 13, 2000, from MFI Export Finance, Inc.
to the Guarantor, as currently constituted, subject to such
amendments of the terms thereof, as the Lender consents to in
writing, such consent not to be unreasonably withheld;
(cc) "Note" means the promissory note issued by the Borrower in
favor of the Lender and attached hereto as Schedule "B";
(dd) "Other Bridge Loans" means collectively, the credit facilities
advanced to the Guarantor in the following amounts by the
following Persons:
(i) US $1,000,000 loan from JCI Timely Services Inc.;
(ii) CDN $2,500,000 loan from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇)
▇▇▇▇▇▇▇;
(iii) US $1,100,000 loan from Dunross Capital, Ltd.;
(iv) US $1,000,000 loan from 1220356 Ontario, Ltd;
(v) US $2,000,000 loan from ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (provided,
however, that the first US $1,000,000 of such
principal amount shall be deemed to be a Subsequent
Credit Facility);
(ee) "Parties" means the Lender, the Borrower and the Guarantor;
(ff) "Permitted Encumbrances" means those Encumbrances listed in
Exhibit "I" of Schedule "C" attached hereto;
(gg) "Permitted Indebtedness" means that Indebtedness listed and
the particulars of which are provided in Exhibit "II" of
Schedule "C" attached hereto;
(hh) "Person" means an individual, corporation, body, corporate,
firm, partnership, syndicate, joint venture, association,
trust, unincorporated organization or Governmental Authority,
or any trustee, executor, administrator or other legal
representative;
(ii) "PMSJ" means:
(i) a security interest taken in personal property of the
Borrower or Guarantor, as the case may be, to the
extent that it secures payment of all or part of the
purchase price of such personal property;
(ii) a security interest taken in personal property of the
Borrower or Guarantor, as the case may be, by a
Person who gives value for the purpose of enabling
the Borrower or Guarantor, as the case may be, to
acquire rights in such personal property, to the
extent that the value given is applied to acquire
those rights;
(iii) the interest of the Borrower or Guarantor, as the
case may be, as a lessor of goods under a lease for a
term of more than one year; and
(iv) and the interest of a Person who delivers goods to
the Borrower or the Guarantor, as the case may be,
under commercial consignment;
18
but does not include a transaction of sale by and lease back
to the seller;
(jj) "Principal" means the aggregate principal amount of
the Loan being US $400,000;
(kk) "Security Documents" means, collectively, the
Guarantee together with the GSA;
(ll) "Subsequent Credit Facility" means such credit
facility or facilities with respect to the Guarantor,
the Borrower or any of the Material Subsidiaries, as
may be arranged subsequent to the Closing Date, up to
a maximum amount of US $2,500,000 less (i) CDN
$550,000 (said amount representing the amount of an
existing credit facility provided by Actrade Capital
Canada, Inc. to Business Supplies Are Us, Inc.), (ii)
US $100,000 (said amount representing that portion of
the US $1,100,000 provided by Dunross Capital, Ltd.,
not used to retire pre-existing debt), (iii) US
$1,000,000 (said amount representing that portion of
the US $2,000,000 credit facility provided by ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ not used to retire pre-existing debt),
and (iv) CDN $598,000 (said amount representing the
amount of present credit facility provided in trust
by ▇▇▇▇▇▇▇ ▇▇▇▇▇, Ltd.); provided that Subsequent
Credit Facility shall not mean any credit facility or
facilities with respect to the Guarantor, the
Borrower or any of the Material Subsidiaries used
solely to repay any Permitted Indebtedness other than
an existing Subsequent Credit Facility (including the
amounts specified in items (I) through (iv) above);
(mm) "Tangible Net Worth" means, with respect to any
Person at any time, the net worth of such Person, on a consolidated basis, at
such time after excluding therefrom the aggregate amount of any intangible
assets of such Person (including, without limitation, goodwill, franchises,
licenses, patents, trademarks, trade names, copyrights, service marks and brand
names);
(nn) "Taxes" has the meaning as ascribed to it in
Subsection 3.5 hereof; and
(oo) "Term" means that period of time commencing on the
closing Date and ending on the Maturity Date.
SCHEDULE B
PROMISSORY NOTE
US $400,000 August 15, 2001
FOR VALUE RECEIVED,. COMMERCIAL CONSOLIDATORS CORP. (formerly known as MIRAGE
IMPEX, INC.), a Panamanian company (the "Borrower"), promises to pay to the
order of FORUM INTERAMERICAN CORP. (the "Lender") the sum of FOUR HUNDRED
THOUSAND DOLLARS (US $400,000) of lawful money of the United States of America
(the "Principal Sum") together with interest thereon, as herein provided.
The Principal Sum will bear interest at 14% per annum both before and after each
of maturity, default and judgment.
The Principal Sum, together with all accrued and unpaid interest, will become
due and be paid in accordance with the terms of the Bridge Loan Agreement (the
"Agreement") dated for reference the 15th day of August, 2001, made among the
Lender, the Borrower and Commercial Consolidators Corp.
In the event of any inconsistency or conflict between any of the provisions of
this Note and any of the provisions of the Agreement, the provisions of the
Agreement will prevail; but the omission from the Agreement of any covenant,
agreement, term, or condition contained in this Note will not, of itself be
considered to be an inconsistency or a conflict.
The Borrower hereby waives the demand and presentment for payment, notice of
non-payment, protest and notice of protest of this Note and agrees to pay and
completely indemnify the Lender for all costs and expenses (including legal fees
and costs) paid or incurred in collecting any monies due thereunder.
Extension of time of payment of all or any part of the amount owing hereunder,
at any time or times, and failure of the Lender to enforce any of its rights or
remedies hereunder will not release the Borrower from its obligations hereunder
or constitute a waiver of the rights of the Lender to enforce any rights and
remedies thereafter.
This Note will be governed by and construed in accordance with the laws of the
Province of Ontario, Canada.
COMMERCIAL CONSOLIDATORS CORP.,
a Panamanian company
Per:
-----------------------------------
Authorized Signatory
20
SCHEDULE C
EXHIBIT I
PERMITTED ENCUMBRANCES
For the purposes of this Agreement, the following Encumbrances are permitted in
respect to the assets and undertaking of each of the Borrower, Guarantor, the
Holding Subsidiaries and the Material Subsidiaries:
(a) Security granted by any of the Material Subsidiaries in
support of the ▇▇▇▇▇▇▇▇ Facility;
(b) Security granted by the Borrower, the Guarantor or any of the
Material Subsidiaries in support of the BI)C Loan;
(c) Any PMSI granted by the Borrower, the Guarantor or any of the
Material Subsidiaries, as the case may be, provided that the amount secured by
such PMSI does not exceed the purchase price for the property which is the
subject of such PMSI;
(d) Security granted in favor of any Governmental Authority by way
of cash deposits, bonds or letters of credit, and any cash collateral granted to
any financial institution to obtain bonds or letters of credit issued to any
Governmental Authority;
(e) Security granted by the Guarantor in support of the Other
Bridge Loans; and
(f) Security granted by the Guarantor in respect to any Subsequent
Credit Facility.
EXHIBIT II
PERMITTED INDEBTEDNESS
The following credit facilities represent the permitted indebtedness with
respect to the Borrower, Guarantor, the Holding Subsidiaries and the Material
Subsidiaries:
(a) ▇▇▇▇▇▇▇▇ Facility;
(b) Other Bridge Loans;
(c) Subsequent Credit Facility;
(d) BDC Loan; and
(e) CAD $550,000 loan from Actrade Capital Canada, Inc. to
Business Supplies Are Us, Inc.
21
SCHEDULE D
PERMANENT SUBORDINATED DEBT FACILITY TERM SHEET
Intentionally Deleted
22
SCHEDULE E
PRINCIPAL PLACE OF BUSINESS AND CHIEF EXECUTIVE OFFICE OF THE
BORROWER, GUARANTOR AND MATERIAL SUBSIDIARIES AND LOCATION OF
THE GUARANTOR'S ASSETS
BORROWER: Commercial Consolidators Corp.(formerly known as
Mirage Impex, Inc.)
(A Free Zone - Colon, Colon - Panamanian Corp.)
Edificio Vesrtirama
Oficina No. 1
Calle 15 Esquina ▇.
▇▇▇▇ Libre ▇▇ ▇▇▇▇▇
Panama
President - ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-Anleo ▇▇▇▇▇
GUARANTOR: Commercial Consolidators Corp.:
▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
CEO - ▇▇▇ ▇▇▇▇▇▇
Location of Assets: same as address above
MATERIAL SUBSIDIARIES:
(a) Yam International Communications Inc.
▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇.
▇▇▇▇▇, ▇▇. ▇▇▇▇▇
CEO - ▇▇▇▇▇ ▇▇▇▇▇
(b) La Societe Desig Inc.
▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
CEO - ▇▇▇▇▇▇ ▇▇▇▇
(c) Central Point Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇., ▇▇ ▇▇▇▇▇
CEO - ▇▇▇▇ ▇▇▇▇▇▇
(d) Mirage Trading Corp.
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ Street
Bridgetown, Barbados
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Director)
(e) Business Supplies Are Us Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
23
(f) Max Systems Inc.
Suite 101. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇. ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
CEO - ▇▇▇ ▇▇▇▇▇▇▇▇
(g) Tri Vu Interactive Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ #▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
24
SCHEDULE F
GUARANTEE
See Attached
25
SCHEDULE G
GENERAL SECURITY AGREEMENT
See Attached
26
SCHEDULE H
DIRECTORS, OFFICERS AND MATERIAL SUBSIDIARIES
COMMERCIAL CONSOLIDATORS CORP., an Alberta corporation
Issued and Outstanding Capital (as of February 28, 2001) 18,863,032 common
shares
Directors: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. Black
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
Officers: ▇▇▇▇▇▇▇ ▇. Black -- President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ -- Secretary
▇▇▇ ▇▇▇▇▇▇ -- Chief Executive Officer
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ -- Chief Financial Officer
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Anleo -- Chief Operating Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ -- Chairman of the Board
COMMERCIAL CONSOLIDATORS CORP. (formerly known as MIRAGE IMPEX, INC.). a
Panamanian company.
Issued and Outstanding Capital: One common share with a par value of $100 held
by Mirage Trading Corp. (authorized capital: 1,000 common shares with a par
value of $l00).
Directors: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇
Officers: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Anleo (President)
▇▇▇▇▇ ▇▇▇▇ (Vice-President)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Secretary)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Anleo (Treasurer)
27
SCHEDULE I
OWNERSHIP STRUCTURE
[GRAPH]
28