EXHIBIT 10.42
COLLATERAL AGENT AGREEMENT
COLLATERAL AGENT AGREEMENT (this "Agreement") dated as of January 24,
2002 among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Collateral Agent"), the parties identified
on Schedule A hereto (each, individually, a "Lender" and collectively, the
"Lenders"), who hold or have subscribed for Secured Convertible Notes in the
principal amounts set forth on Schedule A hereto (collectively, the Notes")
issued or to be issued by Commercial Consolidators Corp., an Alberta, Canada
corporation ("CCZ").
WHEREAS, the Lenders are making loans to CCZ to be secured by certain
collateral; and
WHEREAS, it is desirable to provide for the orderly administration of
such collateral by requiring each Lender to appoint the Collateral Agent, and
the Collateral Agent has agreed to accept such appointment and to receive, hold
and deliver such collateral, all upon the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, it is desirable to allocate the enforcement of certain rights
of the Lenders under the Notes for the orderly administration thereof.
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the parties hereto agree as follows:
1. Collateral.
(a) Contemporaneously with the execution and delivery of this
Agreement by the Collateral Agent and the Lenders, (i) the Collateral Agent has
or will have entered into a Security Agreement between the Collateral Agent and
CCZ (the "Security Agreement"), regarding the grant of a security interest in
assets owned by CCZ (such assets are referred to herein as the "Collateral") to
the Collateral Agent, for the benefit of the Lenders and (ii) CCZ is issuing the
Notes to the Lenders.
(b) For purposes solely of perfection of the security
interests granted to the Collateral Agent, as agent on behalf of the Lenders,
and on its own behalf under the Security Agreement, the Collateral Agent hereby
acknowledges that any Collateral held by the Collateral Agent is held for the
benefit of the Lenders in accordance with this Agreement and the Security
Agreement. No reference to the Security Agreement or any other instrument or
document shall be deemed to incorporate any term or provision thereof into this
Agreement unless expressly so provided.
(c) The Collateral Agent is to distribute in accordance with
the Security Agreement any proceeds received from the Collateral which are
distributable to the Lenders in proportion to their respective interests in the
Obligations (as defined in the Security Agreement).
2. Appointment of the Collateral Agent.
The Lenders hereby appoint the Collateral Agent (and the
Collateral Agent hereby accepts such appointment) to take any action including,
without limitation, the registration of any Collateral in the name of the
Collateral Agent or its nominees prior to or during the continuance of an Event
of Default (as defined in the Security Agreement), the exercise of voting rights
upon the occurrence and during the continuance of an Event of Default, the
application of any cash collateral received by the Collateral Agent to the
payment of the Obligations, the exercise of any remedies given to the Collateral
Agent pursuant to the Security Agreement and the exercise of any authority
pursuant to the appointment of the Collateral Agent as an attorney-in-fact
pursuant to the Security Agreement that the Collateral Agent deems necessary or
proper for the administration of the Collateral pursuant to the Security
Agreement. Upon disposition of the Collateral in accordance with the Security
Agreement, the Collateral Agent shall promptly distribute any cash or Collateral
in accordance with Section 10.1(d) of the Security Agreement.
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3. Action by the Majority in Interest.
(a) Certain Actions. Each of the Lenders covenants and agrees
that only a Majority in Interest shall have the right, but not the obligation,
to undertake the following actions (it being expressly understood that less than
a Majority in Interest hereby expressly waive the following rights that they may
otherwise have under the Notes, but only insofar as such waiver affects their
right to receive proceeds from the Collateral):
(i) Acceleration. If an Event of Default occurs,
after the applicable cure period, if any, a Majority in Interest may, on behalf
of all the Lenders, instruct the Collateral Agent to provide to CCZ notice to
cure such default and/or declare the unpaid principal amount of the Notes to be
due and payable, together with any and all accrued interest thereon and all
costs payable pursuant to such Notes;
(ii) Enforcement. Upon the occurrence of any Event of
Default after the applicable cure period, if any, a Majority in Interest may
instruct the Collateral Agent to proceed to protect, exercise and enforce, on
behalf of all the Lenders, their rights and remedies under the Notes against
CCZ, and such other rights and remedies as are provided by law or equity;
(iii) Waiver of Past Defaults. A Majority in Interest
may instruct the Collateral Agent to waive any Event of Default by written
notice to CCZ, and the other Lenders; and
(iv) Amendment. A Majority in Interest may instruct
the Collateral Agent to waive, amend, supplement or modify any term, condition
or other provision in the Notes or Security Agreement in accordance with the
terms of the Notes or Security Agreement so long as such waiver, amendment,
supplement or modification is made with respect to all of the Notes and with the
same force and effect with respect to each of the Notes.
(b) Permitted Subordination. A Majority in Interest may
instruct the Collateral Agent to agree to subordinate any Collateral to any
claim and may enter into any agreement with CCZ to evidence such subordination;
provided, however, that subsequent to any such subordination, each Note shall
remain pari passu with the other Notes held among the Lenders.
(c) Further Actions. A Majority in Interest may instruct the
Collateral Agent to take any action that it may take under this Agreement by
instructing the Collateral Agent in writing to take such action on behalf of all
the Lenders.
(d) Majority in Interest. For so long as any obligations
remain outstanding on the Secured Notes, Majority in Interest shall mean Lenders
who hold not less than two-thirds (66%) of the Obligations.
4. Power of Attorney.
(a) To effectuate the terms and provisions hereof, the Lenders
hereby appoint the Collateral Agent as their attorney-in-fact (and the
Collateral Agent hereby accepts such appointment) for the purpose of carrying
out the provisions of this Agreement including, without limitation, taking any
action on behalf of, or at the instruction of, the Majority in Interest at the
written direction of the Majority in Interest and executing any consent
authorized pursuant to this Agreement and taking any action and executing any
instrument that the Collateral Agent may deem necessary or advisable (and
lawful) to accomplish the purposes hereof.
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(b) All acts done under the foregoing authorization are hereby
ratified and approved and neither the Collateral Agent nor any designee nor
agent thereof shall be liable for any acts of commission or omission, for any
error of judgment, for any mistake of fact or law except for acts of gross
negligence or willful misconduct.
(c) This power of attorney, being coupled with an interest, is
irrevocable while this Agreement remains in effect.
5. Expenses of the Collateral Agent. The Lenders shall pay any and all
costs and expenses incurred by the Collateral Agent, all waivers, releases,
discharges, satisfactions, modifications and amendments of this Agreement, the
administration and holding of the Collateral, insurance expenses, and the
enforcement, protection and adjudication of the parties' rights hereunder by the
Collateral Agent, including, without limitation, the reasonable disbursements,
expenses and fees of the attorneys the Collateral Agent may retain, if any, each
of the foregoing in proportion to their holdings of the Notes.
6. Reliance on Documents and Experts. The Collateral Agent shall be
entitled to rely upon any notice, consent, certificate, affidavit, statement,
paper, document, writing or communication (which may be by telegram, cable,
telex, telecopier, or telephone) reasonably believed by it to be genuine and to
have been signed, sent or made by the proper person or persons, and upon
opinions and advice of its own legal counsel, independent public accountants and
other experts selected by the Collateral Agent.
7. Duties of the Collateral Agent; Standard of Care.
(a) The Collateral Agent's only duties are those expressly set
forth in this Agreement, and the Collateral Agent hereby is authorized to
perform those duties in accordance with commercially reasonable practices. The
Collateral Agent may exercise or otherwise enforce any of its rights, powers,
privileges, remedies and interests under this Agreement and applicable law or
perform any of its duties under this Agreement by or through its officers,
employees, attorneys, or agents.
(b) The Collateral Agent shall act in good faith and with that
degree of care that an ordinarily prudent person in a like position would use
under similar circumstances.
(c) Any funds held by the Collateral Agent hereunder need not
be segregated from other funds except to the extent required by law. The
Collateral Agent shall be under no liability for interest on any funds received
by it hereunder.
8. Resignation. The Collateral Agent may resign and be discharged of
its duties hereunder at any time by giving written notice of such resignation to
the other parties hereto, stating the date such resignation is to take effect.
Within 15 days of the giving of such notice, a successor collateral agent shall
be appointed by the Majority in Interest; provided, however, that if the Lenders
are unable so to agree upon a successor within such time period, the successor
collateral agent may be a person designated by the Collateral Agent, and any and
all fees of such successor collateral agent shall be the joint and several
obligation of the Lenders. The Collateral Agent shall continue to serve until
the effective date of the resignation or until its successor accepts the
appointment and receives the Collateral held by the Collateral Agent but shall
not be obligated to take any action hereunder. The Collateral Agent may deposit
any Collateral with the Supreme Court of the State of New York for New York
County or any such other court in New York State that accepts such Collateral.
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9. Exculpation. The Collateral Agent and its officers, employees,
attorneys and agents, shall not incur any liability whatsoever for the holding
or delivery of documents or the taking of any other action in accordance with
the terms and provisions of this Agreement, for any mistake or error in
judgment, for compliance with any applicable law or any attachment, order or
other directive of any court or other authority (irrespective of any conflicting
term or provision of this Agreement), or for any act or omission of any other
person engaged by the Collateral Agent in connection with this Agreement, unless
occasioned by the exculpated person's own gross negligence or willful
misconduct; and each party hereto hereby waives any and all claims and actions
whatsoever against the Collateral Agent and its officers, employees, attorneys
and agents, arising out of or related directly or indirectly to any or all of
the foregoing acts, omissions and circumstances.
10. Indemnification. The Lenders hereby agree to indemnify, reimburse
and hold harmless the Collateral Agent and its directors, officers, employees,
attorneys and agents, jointly and severally, from and against any and all
claims, liabilities, losses and expenses that may be imposed upon, incurred by,
or asserted against any of them, arising out of or related directly or
indirectly to this Agreement or the Collateral, except such as are occasioned by
the indemnified person's own gross negligence or willful misconduct.
11. Miscellaneous.
(a) Rights and Remedies Not Waived. No act, omission or delay
by the Collateral Agent shall constitute a waiver of the Collateral Agent's
rights and remedies hereunder or otherwise. No single or partial waiver by the
Collateral Agent of any default hereunder or right or remedy that it may have
shall operate as a waiver of any other default, right or remedy or of the same
default, right or remedy on a future occasion.
(b) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts or choice of law (or any other law that would make
any substantive laws of any state other than the State of New York applicable
hereto).
(c) Waiver of Jury Trial and Setoff; Consent to Jurisdiction;
Etc.
(i) In any litigation in any court with respect to,
in connection with, or arising out of this Agreement or any instrument or
document delivered pursuant to this Agreement, or the validity, protection,
interpretation, collection or enforcement hereof or thereof, or any other claim
or dispute howsoever arising, between the Collateral Agent and the Lenders or
any Lender, then each Lender, to the fullest extent it may legally do so, (i)
waives the right to interpose any setoff, recoupment, counterclaim or
cross-claim in connection with any such litigation, irrespective of the nature
of such setoff, recoupment, counterclaim or cross-claim, unless such setoff,
recoupment, counterclaim or cross-claim could not, by reason of any applicable
federal or state procedural laws, be interposed, pleaded or alleged in any other
action; and (ii) WAIVES TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION AND
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. EACH LENDER AGREES THAT THIS SECTION 11(c) IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGE THAT THE
COLLATERAL AGENT WOULD NOT ENTER THIS AGREEMENT IF THIS SECTION 11(c) WERE NOT
PART OF THIS AGREEMENT.
(ii) Each Lender irrevocably consents to the
exclusive jurisdiction of any State or Federal Court located within the County
of New York, State of New York, in connection with any action or proceeding
arising out of or relating to this Agreement or any document or instrument
delivered pursuant to this Agreement or otherwise. In any such litigation, each
Lender waives, to the fullest extent it may effectively do so, personal service
of any summons, complaint or other process and agree that the service thereof
may be made by certified or registered mail directed to such Lender at its
address for notice determined in accordance with Section 11(e) hereof. Each
Lender hereby waives, to the fullest extent it may effectively do so, the
defenses of forum non conveniens and improper venue.
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(d) Admissibility of this Agreement. Each of the Lenders
agrees that any copy of this Agreement signed by it and transmitted by
telecopier for delivery to the Collateral Agent shall be admissible in evidence
as the original itself in any judicial or administrative proceeding, whether or
not the original is in existence.
(e) Address for Notices. Any notice or other communication
under the provisions of this Agreement shall be given in writing and delivered
in person, by reputable overnight courier or delivery service, by facsimile
machine (receipt confirmed) with a copy sent by first class mail on the date of
transmissions, or by registered or certified mail, return receipt requested,
directed to its addresses set forth below (or to any new address of which any
party hereto shall have informed the others by the giving of notice in the
manner provided herein):
In the case of the Collateral Agent, to it at:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o Grushko & ▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
In the case of the Lenders, to the addresses and telecopier
numbers set forth on Schedule A hereto.
In the case of TEAM, to:
Commercial Consolidators Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy by telecopier only to:
▇▇▇▇▇▇▇▇▇ Traurig
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(f) Amendments and Modification; Additional Lender. No
provision hereof shall be modified, altered, waived or limited except by written
instrument expressly referring to this Agreement and to such provision, and
executed by the parties hereto. Any transferee of a Note who acquires a Note
after the date hereof will become a party hereto by signing the signature page
and sending an executed copy of this Agreement to the Collateral Agent.
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(g) Fee. Upon the occurrence of an Event of Default, the
Lenders collectively shall pay the Collateral Agent the sum of $5,000 to apply
against an hourly fee of $350 to be paid to the Collateral Agent by the Lenders
for services rendered pursuant to this Agreement. All payments due to the
Collateral Agent under this Agreement including reimbursements must be paid when
billed. The Collateral Agent may refuse to act on behalf of or make a
distribution to any Lender who is not current in payments to the Collateral
Agent. Payments required pursuant to this Agreement shall be pari passu to the
Lenders' interests in the Notes. The Collateral Agent is hereby authorized to
deduct any sums due the Collateral Agent from Collateral in the Collateral
Agent's possession.
(h) Counterparts. This Agreement may be executed by the
parties hereto individually or in any combination, in one or more counterparts,
and by facsimile signature and transmission, each of which shall be an original
and all of which shall together constitute one and the same agreement.
(i) Successors and Assigns. Whenever in this Agreement
reference is made to any party, such reference shall be deemed to include the
successors, assigns, heirs and legal representatives of such party. No party
hereto may transfer any rights under this Agreement, unless the transferee
agrees to be bound by, and comply with all of the terms and provisions of this
Agreement, as if an original signatory hereto on the date hereof.
(j) Captions: Certain Definitions. The captions of the various
sections and paragraphs of this Agreement have been inserted only for the
purposes of convenience; such captions are not a part of this Agreement and
shall not be deemed in any manner to modify, explain, enlarge or restrict any of
the provisions of this Agreement. As used in this Agreement the term "person"
shall mean and include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
(k) Severability. In the event that any term or provision of
this Agreement shall be finally determined to be superseded, invalid, illegal or
otherwise unenforceable pursuant to applicable law by an authority having
jurisdiction and venue, that determination shall not impair or otherwise affect
the validity, legality or enforceability (i) by or before that authority of the
remaining terms and provisions of this Agreement, which shall be enforced as if
the unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.
(l) Entire Agreement. This Agreement contains the entire
agreement of the parties and supersedes all other agreements and understandings,
oral or written, with respect to the matters contained herein.
(m) Schedules. The Collateral Agent is authorized to annex
hereto any schedules referred to herein.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Collateral
Agent Agreement to be signed, by their respective duly authorized officers or
directly, as of the date first written above.
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"Lender"
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"Lender"
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"Lender"
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"Lender"
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - Collateral Agent
Acknowledged:
COMMERCIAL CONSOLIDATORS CORP.
By:_____________________________________
Name:
Title:
This Collateral Agent Agreement may be signed by facsimile signature and
delivered by confirmed facsimile transmission.
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SCHEDULE A TO COLLATERAL AGENT AGREEMENT
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LENDER PRINCIPAL NOTE AMOUNT
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TOTAL $750,000.00
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