EXHIBIT 4(b).1
SECURITY AGREEMENT
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THIS AGREEMENT made this 1ST day of JANUARY , 2001
BETWEEN:
CURRENT CAPITAL CORP,
OF TORONTO, ONTARIO
Hereinafter called the "Debtor",
OF THE FIRST PART,
- and -
▇▇▇▇▇▇▇▇▇.▇▇▇ INC.,
OF TORONTO, ON
Hereinafter called the "Lender",
OF THE SECOND PART.
1. GRANT OF SECURITY INTEREST
As a general and continuing security for the payment of all obligations,
indebtedness and liabilities of the Debtor to the Lender whether incurred prior
to, at the time of, or subsequent to the execution hereof, including extensions
or renewals, and all other liabilities of the Debtor to the Lender direct or
indirect, wheresoever and howsoever incurred and any ultimate unpaid balance
thereof, including, without restricting the generality of the foregoing,
advances to the Debtor and the obligation and liability of the Debtor under any
contract of guarantee now or hereafter in existence whereby the Debtor
guarantees payment of the debts, liabilities and obligations of a third party to
the Lender, (all of the foregoing being herein called, and included in, the
"Obligations"), the Debtor hereby grants to the Lender a continuing security
interest in the undertaking of the Debtor and in all Goods, Chattel Paper,
Documents of Title, Instruments, Intangibles, Securities and any other personal
property or rights now or hereafter owned or acquired by the Debtor (all of the
foregoing being herein called, and included in, the "Collateral").
2. REPRESENTATIONS AND WARRANTIES OF DEBTOR
The Debtor hereby warrants and agrees with the Lender as follows:
(a) The Debtor will not, during the currency of this Agreement, give any
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further or other security agreement covering the Collateral to any
party other than the Lender and no financing statement (other than any
which may be filed on behalf of the Lender) covering any of the
Collateral is, now or will be on file in any public office while this
Security Agreement remains outstanding, save that the Debtor may
create a purchase money security interest in collateral hereafter
acquired but only if such interest is perfected and notification
thereof given to the Lender pursuant to the provisions of the
governing statutes in that behalf.
(b) That except for the security interest granted hereby, the Debtor is,
or, as to Collateral acquired after the date hereof (save a purchase
money security interest as above described) will be the owner of the
Collateral, free from any adverse lien, security interest or
encumbrance, and agrees that it will defend the Collateral against all
claims and demands of all persons at any time claiming the same or any
interest therein.
(c) The Debtor shall from time to time forthwith on request furnish to the
Lender in writing all information requested relating to the Collateral
and the Lender shall be entitled from time to time to inspect the
aforesaid collateral and to take temporary custody of and make copies
of all documents relating to the accounts receivable and for such
purposes the Lender shall have access to all premises occupied by the
Debtor or where the Collateral or any of it may be found.
(d) The Debtor shall from time to time forthwith on the Lender's request
do, make and execute all such financing statements, further
assignments, documents, acts, matters and things as may be required by
the Lender of or with respect to the Collateral or any part thereof or
as may be required to give effect to these presents, and the Debtor
hereby constitutes and appoints the Manager or acting Manager for the
time being of the above-mentioned office of the Lender, or any
receiver appointed by the Court or Lender as hereafter set out, the
true and lawful attorney of the Debtor irrevocably with full power of
substitution to do, make and execute all such assignments, documents,
acts, matters or things with the right to use the name of the Debtor
whenever and wherever it may be deemed necessary or expedient.
(e) The Debtor shall keep the inventory and equipment insured against loss
by fire and such other risks as the Lender may reasonably require for
their full insurable value and will pay all premiums in connection
with such insurance. All policies of insurance and the proceeds
thereof will be held in trust by the Debtor for the benefit of the
Lender under the provisions of this Agreement. If the Debtor neglects
to provide such insurance, the Lender may obtain the same and charge
the premiums therefor to the Debtor, together with interest at the
rate currently charged to the Debtor under its obligations to the
Lender at the date of payment of the premium by the Lender.
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3. DEFAULT
At the option of the Lender, the security hereby granted shall become
enforceable upon the happening of any of the following events:
(a) if the Debtor fails to pay or perform when due any of the Obligations;
if the Debtor fails to perform any provisions of this Agreement or of
any other agreement to which the Debtor and the Lender are parties;
(c) if any of the representations and warranties in this Agreement was
incorrect when made or deemed to have been made;
(d) if the Debtor ceases or threatens to cease to carry on its business,
commits an act of bankruptcy, becomes insolvent, makes an assignment
or bulk sale of its assets, or proposes a compromise or arrangement to
its creditors;
(e) if any proceeding is taken with respect to a compromise or
arrangement, or to have the Debtor declared bankrupt or wound up, or
to have a receiver appointed of any part of the Collateral or if any
encumbrancer takes possession of any part thereof;
(f) if any execution, sequestration or other process of any court becomes
enforceable against the Debtor or if any distress or analogous process
is levied upon the Collateral or any part thereof;
(g) if the Lender in good faith believes that the prospect of payment or
performance of any of the Obligations is impaired;
and in such event:
(a) The Lender may, in addition to any other rights, appoint by instrument
in writing a receiver of all or any part of the collateral and remove
or replace such receiver from time to time or may institute
proceedings in any Court of competent jurisdiction for the appointment
of such a receiver. Where the Lender is hereafter in this paragraph
referred to the terms shall, where the context permits, include any
Receiver so appointed and the officers, employees, servants or agents
of such Receiver.
(b) The Debtor will forthwith upon demand assemble and deliver to the
Lender possession of all the Collateral at such place as may be
specified by the Lender. In any event, at its option the Lender may
take such steps as it considers necessary or desirable to obtain
possession of all or any part of the Collateral, and to that end the
Debtor agrees that the Lender may by its servants, agents or Receiver
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at any time during the day or night, enter upon lands and premises,
and if necessary break into houses, buildings and enclosures,
wheresoever and whatsoever where the Collateral may be found for the
purpose of taking possession of and removing the Collateral or any
part thereof.
(c) The Lender may seize, collect, realize, borrow money on the security
of, release to third parties or otherwise deal with the Collateral or
any part thereof in such manner, upon such terms and conditions and at
such time or times as may seem to it advisable and without notice to
the Debtor (except as otherwise required by any applicable law), and
may charge on its own behalf and pay to others reasonable sums for
expenses incurred and for services rendered (expressly including legal
advice and services, and receivers and accounting fees) in or in
connection with seizing, collecting, realizing, borrowing on the
security of, selling or obtaining payment of the Collateral and may
add the amount of such sums to the indebtedness of the Debtor.
(d) At its option, to be notified to the Debtor in the manner provided by
the governing statute, the Lender may elect to retain all or any part
of the Collateral in satisfaction of the obligations to it of the
Debtor.
(e) The Lender shall not be liable or accountable for any failure to
seize, collect, realize, sell or obtain payment of the Collateral or
any part thereof and shall not be bound to institute proceedings for
the purpose of seizing, collecting, realizing or obtaining possession
or payment of the same or for the purpose of preserving any rights of
the Lender, the Debtor or any other person, firm or corporation in
respect of same.
(f) The Lender may grant extensions of time and other indulgences, take
and give up securities, accept compositions, grant releases and
discharges, release any part of the Collateral to third parties and
otherwise deal with the Debtor, debtors of the Debtor, sureties and
others and with the Collateral and other securities as the Lender may
see fit without prejudice to the liability of the Debtor or the
Lender's right to hold and realize the collateral.
(g) All monies collected or received by the Lender in respect of the
Collateral may be applied on account of such parts of the indebtedness
and liability of the Debtor as to the Lender seems best or may be held
unappropriated in a collateral account or in the discretion of the
Lender may be released to the Debtor, all without prejudice to the
Lender's claims upon the Debtor.
(h) In the event of the Lender taking possession of the said Collateral,
or any part thereof in accordance with the provisions of this
Agreement, the Lender shall have the right to maintain the same upon
the premises on which the Collateral may then be situate, and for the
purpose of such maintaining shall be entitled to the free use and
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enjoyment of all necessary buildings, premises, housing, shelter and
accommodation for the proper maintaining, housing and protection of
the said Collateral, and for its servant or servants, assistant or
assistants, and the Debtor covenants and agrees to provide the same
without cost or expense to the Lender until such time as the Lender
shall determine in its discretion to remove, sell or otherwise dispose
of the said Collateral so taken possession of by it as aforesaid.
(i) To facilitate the realization of the Collateral the Lender may carry
on or concur in the carrying on of all or any part of the business of
the Debtor and may to the exclusion of all others, including the
Debtor, enter upon, occupy and use all or any of the premises,
buildings, plant and undertaking of or occupied or used by the Debtor
and use all or any of the tools, machinery and equipment of the Debtor
for such time as the Lender sees fit, free of charge, to manufacture
or complete the manufacture of any inventory and to pack and ship the
finished product, and the Lender shall not be liable to the Debtor for
any neglect in so doing or in respect of any rent, charges,
depreciation or damages in connection with such actions.
(j) The Lender may, if it deems it necessary for the proper realization of
all or any part of the Collateral, pay any encumbrance, lien, claim or
charge that may exist or be threatened against the same and in every
such case the amounts so paid together with costs, charges and
expenses incurred in connection therewith shall be added to the
obligations of the Debtor to the Lender as hereby secured, and shall
bear interest at the rate currently charged to the Debtor under its
obligations to the Lender at the date of payment thereof by the
Lender.
(k) If after all the expenses of the Lender in connection with the
preservation and realization of the Collateral as above described
shall have been satisfied and all obligations, including contingent
obligations, of the Debtor to the Lender shall have been satisfied and
paid in full together with interest, any balance of monies in the
hands of the Lender arising out of the realization of the Collateral,
shall be paid to any person other than the Debtor whom the Lender
knows to be the owner of the Collateral, and in the absence of such
knowledge, such balance shall be paid to the Debtor.
4. DEALING WITH COLLATERAL BY THE DEBTOR:
(a) The Debtor in the ordinary course of its business may lease or sell
items of inventory, so that the purchaser thereof takes title clear of
the security interest hereby created, but if such sale or lease
results in an account receivable, such account receivable is subject
to the security interest hereby created.
(b) In the event that the Debtor shall collect or receive any of the
accounts receivable or shall dispose of and be paid for any of the
other Collateral covered by this agreement, all non-cash proceeds of
such disposition shall be subject to the security interest hereby
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created and all monies so collected or received by the Debtor shall be
received as Trustee for the Lender and shall be held separate and
apart from other monies of the Debtor, and shall forthwith be paid
over to the Lender.
5. This Agreement is in addition to and not in substitution for any other
agreement between the parties creating a security interest in all or part
of the Collateral, and whether heretofore or hereafter made, and the terms
of such other agreement or agreements shall be deemed to be continued
unless expressly provided to the contrary in writing and signed by the
parties.
6. Any notice required to be given to the Debtor or the Lender may be sent by
prepaid registered mail addressed to the appropriate party at the address
above shown, or such further or other address as such party may notify to
the other in writing from time to time, and if so sent, the notice shall be
deemed to have been given on the fifth day following the day when it is
deposited in the post office.
7. Any failure of the Lender to exercise any right set out in this Agreement
in any particular instance shall not constitute a waiver thereof in any
other instance.
8. All rights of the Lender hereunder shall be assignable and in any action
brought by an assignee to enforce such rights, the Debtor shall not assert
against the assignee any claim or defence which the Debtor now has or may
hereafter have against the Lender.
9. This Agreement shall be interpreted in accordance with the laws of the
Province of ONTARIO. Reference to the governing statute shall be to the
PERSONAL PROPERTY SECURITY ACT of ONTARIO as amended from time to time.
10. This Agreement and everything herein contained shall extend to and bind and
may be taken advantage of by the respective heirs, executors,
administrators, successors and assigns, as the case may be, of each and
every of the parties hereto, and where there is more than one Debtor or
there is a female party or a corporation, the provisions hereof shall be
read with all grammatical changes thereby rendered necessary and where
there is more than one Debtor all covenants shall be deemed to be joint and
several.
IN WITNESS WHEREOF THE DEBTOR has hereunto set its corporate seal duly
attested by the hands of its proper officers as of the day and year first above
written.
CURRENT CAPITAL CORP
Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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