Exhibit 10.11
SPECIFIC SECURITY AGREEMENT
(Deposits with the Bank)
TO: Laurentian Bank of Canada
FOR VALUABLE CONSIDERATION, receipt whereof is hereby acknowledged, the
undersigned hereby agrees with Laurentian Bank of Canada (hereinafter called the
"Bank") as follows concerning the moneys or amounts now or at any time and from
time to time hereafter on deposit (hereinafter called the "Collateral
Deposit(s)") in the account(s) or evidenced by the instrument(s) maintained in
the name of the undersigned at the Bank's branch at 989 Derry Road, Suite 303,
Mississauga, Ontario, L5T 2J8.
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(Insert Branch address)
1. The Borrower agrees to deposit with the Bank a minimum
amount of $Cdn.2,500,000.00 (Two Million and Five Hundred Thousand Dollars) by
way of a term deposit or cash equivalent in form acceptable to the Bank, acting
in its sole discretion, on or before May 30, 2002 and for a period of at least
twelve (12) months thereafter.
2. The Bank is hereby authorized and shall be entitled to retain and
hold the said moneys or amounts on deposit in the Collateral Deposit(s),
together with any and all additions and accretions thereto, as general and
continuing collateral security for the payment and fulfilment of all debts,
liabilities and obligations, present or future, direct or indirect, absolute or
contingent, matured or not, of the undersigned to the Bank whether arising
within or outside Canada and whether arising from agreement or dealings between
the Bank and the undersigned or from any agreement or dealings with any third
person by which the Bank may be or become in any manner whatsoever a creditor of
the undersigned or however otherwise incurred or arising, and whether the
undersigned be bound alone or with another or others and whether as principal or
surety (such debts, liabilities and obligations being hereinafter called the
"Liabilities"), including without in any way limiting or restricting the
generality of the foregoing, all debts, liabilities and obligations of the
undersigned to the Bank arising out of or in respect of (a) any loans or
advances heretofore or hereafter made by the Bank, (b) any letter of credit
heretofore or hereafter issued by the Bank, and (c) any agreement or instrument
or any endorsement thereon (hereinafter called a "Guarantee") heretofore or
hereafter entered into by the undersigned whereby the undersigned guarantees the
payment or fulfilment of debts or obligations of any other party (each and every
such other party being hereinafter called a "customer") to the Bank.
3. Whenever and so long as any Liabilities exist, the Bank will not be
indebted or liable to the undersigned in respect of the moneys or amounts now or
hereafter on deposit in the Collateral Deposit(s), and the undersigned shall
have no right to withdraw any such moneys or amounts now or hereafter on deposit
in the Collateral Deposit(s) or to draw any cheques or drafts or other orders
for the payment of money to be charged against the Collateral Deposit(s), or to
assign, transfer or otherwise deal with such moneys or amounts now or hereafter
on deposit in the Collateral Deposit(s), or any part thereof.
4. If the undersigned shall fail to pay or satisfy the Liabilities or
any part thereof when due, or if a writ of execution or a garnishment or any
similar or analogous writ, process or proceeding should be issued against or in
respect of the undersigned, or if the undersigned should commit or threaten to
commit any act of bankruptcy or make any assignment for the benefit of
creditors, or if a receiver or other person with like powers should be appointed
in respect of the undersigned or if an encumbrancer should take possession of
any of the properties or assets of the undersigned, then upon the happening of
any such event (a) all the Liabilities shall thereupon be and become immediately
due and payable, (b) the undersigned shall thereupon be and become directly
indebted and liable to the Bank as a principal debtor in respect of all
liabilities and obligations then existing or thereafter arising under or by
virtue of each and every Guarantee, and (c) the Bank shall be entitled as and
when it thinks fit and without prior notice to the undersigned, and is hereby
irrevocably authorized and empowered, to immediately apply all or any portion or
portions of the moneys or amounts on deposit in the Collateral Deposit(s)
against and in reduction or extinction of all or any part or parts of the
Liabilities, whether or not the Collateral Deposit(s) are subject to withdrawal
on demand, on notice or on a future, fixed maturity date, all as the Bank may
see fit, and to debit the Collateral Deposit(s) accordingly; provided that if
the Liabilities and the moneys or amounts on deposit in the Collateral
Deposit(s) are not in equal amounts, then the greater shall be extinguished only
to the extent of the lesser and the excess shall remain owing and payable.
5. The Bank may grant time, renewals, extensions, indulgences, releases
and discharges to, take securities (which word as used herein includes other
Guarantees) from and give the same and any or all existing securities up to,
abstain from taking securities from or from perfecting securities of, cease or
refrain from giving credit or making loans or advances to, accept compositions
from and otherwise deal with any customer or other party and with all securities
as the Bank may see fit, and may apply all moneys at any time received from any
customer or other party or from securities upon such part of the debts or
liabilities of such customer or other party to the Bank as the Bank deems best
and change any such application in whole or in part from time to time as the
Bank may see fit, the whole without in any way limiting or lessening the rights
and powers of the Bank to hold and deal with the said moneys or amounts now and
hereafter on deposit in the Collateral Deposit(s) in the manner provided for
herein.
6. No loss of or in respect of any securities received by the Bank from
any customer or other party, whether occasioned by the fault of the Bank or
otherwise, shall in any way limit or lessen the rights and powers of the Bank to
hold and deal with the moneys or amounts now and hereafter on deposit in the
Collateral Deposit(s) in the manner provided for herein.
7. The Bank shall not be bound to exercise any of its rights or
remedies against any customer or other party or in respect of any securities
that it may at any time hold before being entitled to appropriate and apply all
or any portion or portions of the moneys or amounts now or hereafter on deposit
in the Collateral Deposit(s) for the purpose and in the manner provided for
herein.
8. In the event that at any time or from time to time the moneys or
amounts on deposit in the Collateral Deposit(s) are in a currency different from
the currency of any of the Liabilities, then for the purposes of this agreement
the rate of exchange between the currencies shall be the relative rate of
exchange of the Bank in effect on the date of conversion.
9. So long as the moneys or amounts on deposit are held under this
agreement and not applied in payment of the Liabilities the moneys or amounts on
deposit may bear interest at a rate per annum agreed to between the Bank and the
undersigned in the same currency as the moneys or amounts on deposit. Said
interest may be held by the Bank as collateral security. The undersigned
acknowledges that, in the case of a Collateral Deposit established for a fixed
term, the application by the Bank of the moneys or amounts on deposit in payment
of the Liabilities before the maturity of the Collateral Deposit may result in
loss of interest on such Collateral Deposit.
10. This agreement shall be a continuing agreement and shall have
effect whenever and so often as any Liabilities exist.
11. This agreement shall be governed by and construed in accordance
with the laws of the province of Canada in which the Collateral Deposit(s) is
located.
12. This agreement shall extend to and enure to the benefit of the Bank
and its successors and assigns, and shall be binding upon the undersigned and
the heirs, executors, administrators, legal representatives, successors and
assigns of the undersigned and each of them.
Given under seal at the Town of Richmond Hill this 22nd day of February, 2002.
1418276 ONTARIO INC.
Name of Company
Address:30 West Beaver Creek Road, Suite
109, Richmond Hill, Ontario L4B 3K1
per:_____/s/ Kim Allen____________________
Name: Kim Allen
Title: President
c/s
per:_____/s/ Angelo Boujos_______________
Name: Angelo Boujos
Title: Chairman
We have authority to bind the Corporation