EXHIBIT 2.15
INTER-LENDER AGREEMENT
THIS AGREEMENT dated as of the 23rd day of September, 1998
AMONG:
NOVA SCOTIA BUSINESS DEVELOPMENT CORPORATION
("NSBDC")
OF THE FIRST PART
-and-
WACHOVIA BANK, N.A.
("Wachovia")
OF THE SECOND PART
-and-
ITC CANADA LIMITED
("ITC Canada")
OF THE THIRD PART
WHEREAS:
1. NSBDC has agreed to provide certain financing to ITC Canada;
2. Wachovia finances ITC Learning Corporation and is providing certain
financing to ITC Leaning Corporation to be advanced to ITC Canada to enable ITC
Canada to acquire certain assets and to carry on business;
3. ITC Canada has agreed to guarantee the obligations of ITC Learning
Corporation to Wachovia;
4. Each of Wachovia and NSBDC are to hold mortgages and charges on the property
and assets of ITC Canada.
NOW THEREFORE, for value received, the parties hereto agree with each other as
follows:
1. INTERPRETATION
1.1 DEFINITIONS. For the purposes of this agreement:
(a) "NSBDC Debt" means the obligations of ITC Canada to NSBDC
pursuant to the terms of a note in the principal amount of
Cdn. $2,000,000 and the obligations of ITC Canada under the
terms of a Royalty Agreement entered into between ITC
Canada and Grant Thornton Limited as receiver of the
property and assets of Mentor Networks Inc. and High
Performance Group (Canada) Inc., when and if such Royalty
Agreement is assigned by the said Grant Thornton Limited to
NSBDC;
(b) "NSBDC Security" means security documents now or hereafter
delivered under or on connection with the NSBDC Debt or
otherwise securing or being intended to secure the NSBDC Debt
including:
(i) a debenture in the principal amount of Cdn. $3,600,000
executed or to be executed by ITC Canada in favour of
NSBDC and the pledge of the debenture pursuant to the
terms of a pledge agreement;
(ii) a general security agreement executed or to be executed
by ITC Canada in favour of NSBDC containing a charge on
all of the assets of ITC Canada;
(c) "Wachovia Debt" means the obligations of ITC Canada under a
guarantee executed or to be executed by ITC Canada in favour
of Wachovia to secure the debts and obligations of ITC
Learning Corporation to Wachovia;
(d) "Wachovia Security" means security documents now or hereafter
delivered under or in connection with the Wachovia Debt or
otherwise securing or being intended to secure the Wachovia
Debt including:
(i) a debenture executed or to be executed by ITC Canada in
favour of Wachovia and the pledge of the debenture
pursuant to the terms of a pledge agreement;
(ii) a general security agreement executed or to be executed
by ITC Canada in favour of Wachovia containing a charge
on all of the assets of ITC Canada.
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2. CONSENTS
2.1 NSBDC hereby consents to the creation and issuance by ITC Canada to
Wachovia of the Wachovia Security and to the incurring by ITC Canada
of the obligations secured thereby.
2.2. Wachovia hereby consents to the creation and issuance by ITC Canada
to NSBDC of the NSBDC Security and to the incurring of the
obligations secured thereby.
3. PRIORITIES
3.1 Each of NSBDC, Wachovia and ITC Canada declare, covenant and agree
with each other that the NSBDC Security and the Wachovia Security
shall operate as follows:
(a) the Wachovia Security shall constitute a first security
interest in all of the accounts receivable and inventory of
ITC Canada and the NSBDC Security shall be enforced subject to
the rights of Wachovia to the accounts receivable and
inventory so long as ITC Canada is obligated to Wachovia;
(b) subject to section 3.1(a), the NSBDC Security and the Wachovia
Security shall rank pari passu on all other assets of ITC
Canada on the basis of the amounts outstanding at the
commencement of enforcement of any security held by NSBDC or
by Wachovia on the Cdn. $2,000,000 loan advanced or to be
advanced by NSBDC and, with respect to Wachovia, the lesser
of:
(i) the amount owed by ITC Learning Corporation to
Wachovia, and
(ii) Cdn. $1,000,000;
(c) after the sharing pari passu as provided for in section
3.1(b), the Wachovia Security may be enforced to recover
payment of any other obligation of ITC Canada to Wachovia
and, following full satisfaction of such obligations, the
NSBDC Security may be enforced to recover payment of any
other portion of the NSBDC Debt remaining after recovery by
NSBDC of the amounts referred to in the preceding section
3.1(b).
3.2 Any proceeds received by ITC Canada or by NSBDC or by Wachovia in
respect of assets of ITC Canada charged by the NSBDC Security or the
Wachovia Security shall be dealt with according to the preceding
provisions hereof as so paid or payable as proceeds of realization
of the collateral for which they compensate, and all proceeds
received by ITC Canada shall be held in trust by it for the benefit
of NSBDC and Wachovia as the case may be, in accordance with the
provisions hereof.
3.3 The provisions hereof shall apply in all events and circumstances
regardless of:
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(a) the date of execution, attachment, registration, perfection or
reperfection of any security interest held by NSBDC or
Wachovia;
(b) the date of any advance or advances made to ITC Canada by
NSBDC or to ITC Learning Corporation by Wachovia;
(c) the date of default by ITC Canada under either the NSBDC
Security or the Wachovia Security, the date of crystallization
of any floating charges held by NSBDC or by Wachovia or the
date of any enforcement action of either of them;
(d) any priority granted by any principle of law or any statute.
3.4 If any of the NSBDC Security or the Wachovia Security is found to be
unenforceable, invalid, unregistered or unperfected against any
party other than NSBDC or Wachovia by a court of competent
jurisdiction, and all appeals from any such party have been heard
and determined or the time for making any such appeal has expired
without an appeal being made, the provisions of Section 3.1 to and
including 3.3 of this Agreement shall not apply to such security to
the extent that it is so found.
4. DEFAULT AND DEMAND
4.1 In the event that there is a default by ITC Canada with respect to
the NSBDC Debt or the Wachovia Debt which results in NSBDC or
Wachovia notifying ITC Canada in writing of such a default, then
NSBDC or Wachovia, as the case may be, shall give a copy of that
written notice of default to the other coincidentally with it giving
such notice to ITC Canada.
4.2 Either party may, in accordance with the terms of its respective
loans, demand repayment from ITC Canada. Not less than two (2)
business days before issuing a demand, NSBDC or Wachovia, as the
case may be, shall give notice to the other providing particulars of
the default and a copy of the intended demand. In the event that
either NSBDC or Wachovia believes that the two (2) business days
notice as hereinbefore provided may adversely affect its ability to
enforce its security and to recover its indebtedness, it may proceed
without giving such two (2) business days notice but it shall
nevertheless provide to the other any notice of demand or other
proceedings which it may serve upon ITC Canada.
4.3 In the event that NSBDC or Wachovia gives notice as provided in
article 4.2 hereof, then NSBDC or Wachovia, as the case may be,
within two (2) business days from the date of receipt of the notice
shall have the right to pay to the other the amount of the other's
debt then outstanding and to take an assignment of the other's debt
and an assignment of the other's interest in either the NSBDC
Security or the Wachovia Security.
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5. RECOVERY
5.1 In the event that either NSBDC or Wachovia desires to appoint an
agent or receiver to invoke any other process to effect recovery of
its indebtedness or to realize upon its security, it shall first
attempt to consult with the other and to agree as to the appointment
of a common agent or receiver and as to the process to be followed
with respect to recovery. However, neither NSBDC nor Wachovia shall
be barred from appointing an agent or receiver or to effect other
process, by failure to contact the other, or to agree as to the
terms of the appointment, provided always that any agent or receiver
appointed will be a licensed trustee in bankruptcy employed with a
national accounting firm.
5.2 If the parties agree to a common course of action in accordance with
article 5.1 and any matter arises which requires a direction to be
given to the agent or the receiver or approval of any step taken or
any act to be done in and about the management of the agency or
receivership, then the matter shall be decided jointly by NSBDC and
Wachovia. If NSBDC and Wachovia are unable to agree on the direction
to be given then another licensed trustee, independent of the agent
or receiver, and selected by the agent or the receiver shall decide
on the direction to be given.
6. DISTRIBUTION OF PROCEEDS
6.1 Any monies and proceeds received by NSBDC or Wachovia pursuant to
any realization on or enforcement of the NSBDC Security or Wachovia
Security, as the case may be, whether from sale, insurance proceeds
or other source of funds, or under any dissolution, winding-up,
liquidation or other scheme of arrangement or any insolvency,
receivership or bankruptcy proceedings, will be distributed and paid
as follows:
(a) firstly, in payment of all costs, charges and expenses of and
incidental to and that may be properly incurred in connection
with any realization or enforcement procedures as may have
been taken;
(b) secondly, in payment of any disbursements made by either NSBDC
or Wachovia pursuant to the NSBDC Security, NSBDC Debt,
Wachovia Security or Wachovia Debt;
(c) thirdly, in payment of the Wachovia Debt to the extent that
such monies and proceeds derive from the inventories and
accounts receivable of ITC Canada and there is at such time
outstanding Wachovia Debt owed to Wachovia;
(d) fourthly, distributed pari passu in payment of the Wachovia
Debt and the NSBDC Debt shared as set out in section 3.1(b)
hereof;
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(e) fifthly, in the event that after the application of the
recoveries pursuant to the preceding paragraphs hereof, there
is still additional monies and at that time there is still
outstanding Wachovia Debt, the amount of such surplus shall be
paid to the Wachovia to be applied against the Wachovia Debt;
(f) sixthly, in the event that after repayment of the amount owed
to NSBDC on the Cdn. $2,000,000 note there is still NSBDC Debt
outstanding, the amount of any surplus monies shall be paid to
NSBDC to be applied to the NSBDC Debt;
(g) seventhly, as to any surplus, after repayment of NSBDC Debt
and Wachovia Debt as hereinbefore provided for, to such other
persons or corporations as required by the terms of the NSBDC
Security and Wachovia Security or as required by law.
6.2 Should NSBDC or Wachovia receive any payments, distributions, funds
or proceeds contemplated under this article 6, then they must
provide an accounting to the other in connection therewith upon
request.
7. PAYMENT ARRANGEMENTS
7.1 From time to time upon request therefore, NSBDC and Wachovia may
advise each other of the particulars of the indebtedness and
obligations to each other and all security held by each therefore.
7.2 Each of the parties hereto shall permit any of the other parties and
their employees, agents and contractors, access at all reasonable
times to inspect any property and assets of ITC Canada upon which
such other party has a charge or security interest in accordance
with the terms hereof, to make copies of or extracts from any books
of account and all records, ledgers, reports, documents and other
writings relating to such property and assets, and to permit such
other party to remove such property and assets from the premises of
ITC Canada at all reasonable times without interference, provided
that such other party shall promptly repair any damage caused to the
premises by the removal of any such property or assets.
8. CONSENT OF ITC CANADA
8.1 ITC Canada hereby consents and agrees to the terms of this
Agreement, and confirms to and agrees with NSBDC and Wachovia that
so long as ITC Canada remains obligated or indebted to NSBDC and
Wachovia, ITC Canada shall stand possessed of its assets so charged
in favour of NSBDC and Wachovia in accordance with their respective
interests and priorities as set out in this Agreement.
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9. GENERAL
9.1 NSBDC or Wachovia may transfer or assign its respective security so
long as the transfer or assignment is subject to the terms of this
Agreement.
9.2 Any notice required or permitted to be given pursuant to this
Agreement shall be in writing and shall be addressed and delivered
to the parties at the following addresses:
(a) if to NSBDC:
World Trade and Convention Centre
1800 Argyle Street
PO Box 519
Halifax, NS B3J 2R7
Attention: President
Facsimile: (902) 424-6823
(b) if to Wachovia:
8117 Leesburg Pike
Vienna, Virginia 22182
Attention: D. Randolph Bryan Wilson, Vice-President
Facsimile: (703) 827-1206
(c) if to ITC Canada:
Suite 600
Purdy's Wharf Tower One
1959 Upper Water Street
Halifax, NS B3J 3N2
Attention: President
Facsimile: (902) 421-5199
Notice may be sent by fax or served personally and in each case
shall be deemed to be received on the day so transmitted by fax or
personally delivered.
9.3 This Agreement may be executed in several counterparts and by
facsimile signature, each of which when so executed shall be deemed
to be an original and such counterparts together shall constitute
one and the same instrument and shall be effective as of the formal
date hereof.
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9.4 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted
assigns.
9.5 This Agreement shall continue in full force and effect until the
date on which it is either terminated by the unanimous consent of
NSBDC and Wachovia, or the indebtedness secured by the NSBDC
Security and the Wachovia Security, as the case may be, ceases to
exist.
9.6 The execution and delivery of this Agreement by NSBDC and Wachovia
or the performance of their respective obligations hereunder shall
not constitute or be deemed to be construed as constituting any
partnership, joint venture, association, syndication or similar
relationship between them.
9.7 Nothing to this Agreement is intended to or shall impair or affect
the obligations of ITC Canada to pay the NSBDC Debt or the Wachovia
Debt in accordance with their respective terms nor entitle it to any
notice or delay in demand or realization or enforcement of the
security.
9.8 The parties hereto agree to execute and provide such further and
other documents and do such further and other acts as may be
necessary to give effect to this Agreement.
9.9 This Agreement shall be governed by and construed in accordance with
the laws of the Province of Nova Scotia.
IN WITNESS WHEREOF the parties hereto have executed this Agreement under
the hands of their duly authorized officers.
SIGNED, SEALED AND DELIVERED ) NOVA SCOTIA BUSINESS
in the presence of ) DEVELOPMENT CORPORATION
)
) /s/ Roy Sherwood
/s/ Robert G. MacKeigan ) Per: /s/ Andrew H. Hare
) ----------------------
) WACHOVIA BANK, N.A.
)
)
) Per: /s/ D. Randolph Bryan Wilson
) ------------------------------
)
) ITC CANADA LIMITED
)
) Per: /s/ Wendy G. Berney
) /s/ Phillip Read
) ---------------------------