SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Intek Diversified Corporation
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
458134103
(CUSIP Number)
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Peter S. Kolevzon, Esq.
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
919 Third Avenue
New York, New York 10022
(212) 715-9100
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
May 1, 1995
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box: /_/
Check the following box if a fee is being paid with this
statement: /X/
Page 1
Exhibit Index appears on page 10
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SCHEDULE 13D
CUSIP No. 458134103 Page 2
_________________________________________________________________
1) NAME OF REPORTING PERSON OCTAGON INVESTMENTS LIMITED
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON NA
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /_/
(b) SEE ITEM 5
_________________________________________________________________
3) SEC USE ONLY
_________________________________________________________________
4) SOURCE OF FUNDS
OO
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
/_/
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
GUERNSEY
_________________________________________________________________
NUMBER 7) SOLE VOTING POWER
OF 690,000 (See Item 5)
SHARES _______________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY -0-
EACH _______________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 690,000 (See Item 5)
WITH _______________________________________________
10) SHARED DISPOSITIVE POWER
-0-
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
690,000 (See Item 5)
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
/_/
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.74%
_________________________________________________________________
14) TYPE OF REPORTING PERSON
CO
_________________________________________________________________
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SCHEDULE 13D
CUSIP No. 458134103 Page 3
_________________________________________________________________
1) NAME OF REPORTING PERSON THE CEDAR TRUST
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON NA
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /_/
(b) SEE ITEM 5
_________________________________________________________________
3) SEC USE ONLY
_________________________________________________________________
4) SOURCE OF FUNDS
OO
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
/_/
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
BERMUDA
_________________________________________________________________
NUMBER 7) SOLE VOTING POWER
OF 690,000 (See Item 5)
SHARES _______________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY -0-
EACH _______________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 690,000 (See Item 5)
WITH _______________________________________________
10) SHARED DISPOSITIVE POWER
-0-
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
690,000 (See Item 5)
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
/_/
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.74%
_________________________________________________________________
14) TYPE OF REPORTING PERSON
OO
_________________________________________________________________
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Schedule 13D
Item 1. Security and Issuer.
This class of equity securities to which this Statement
on Schedule 13D (the "Statement") relates is the Common Stock,
par value $.01 per share (the "Shares"), of Intek Diversified
Corporation, a Delaware corporation (the "Issuer"). The
principal executive offices of the Issuer are located at 5800
West Jefferson Boulevard, Los Angeles, California 90016.
Item 2. Identity and Background.
(a) - (c), (f) The Shares that are the subject of this
Statement are owned by Octagon Investments Limited ("Octagon
Investments").
This Statement is being filed by Octagon Investments
and The Cedar Trust (the "Trust"). Octagon Investments and the
Trust are collectively referred to in this Statement as the
"Reporting Persons."
Octagon Investments is a company incorporated under the
laws of Guernsey. Its principal business is securities
investment and trading, and the address of its principal business
and principal office is LaTourgand House, Lower Pollet, St. Peter
Port, Guernsey, Channel Islands GY1 4EA.
The Trust is a private, irrevocable trust established
under the laws of Bermuda. The trustees (the "Trustees") of the
Trust are Jonathan M. Smith and John B. Ludden. The address of
the principal business and principal office of the Trust is c/o
M.L.H. Quin & Co., Bermuda Commercial Bank Building, 44 Church
Street, Hamilton HM12, Bermuda. The Trustees disclaim any
beneficial ownership of Shares.
Octagon Investments is a 100% owned subsidiary of
Octagon Group Limited ("Octagon Group"), a company incorporated
under the laws of Guernsey. Octagon Group's principal business
is to act as a holding company. The address of the principal
business and principal office of Octagon Group is PO Box 112,
Pollet House, Lower Pollet, St. Peter Port, Guernsey, Channel
Islands GY1 4EA.
Page 4
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Octagon Group is wholly owned by Harbour Finance
Limited ("Harbour Finance"), a company incorporated under the
laws of Bermuda. Harbour Finance acts as a nominee for the
benefit of the Trust and other persons. The address of the
principal business and principal office of Harbour Finance is c/o
M.L.H. Quin & Co, Bermuda Commercial Bank Building, 44 Church
Street, Hamilton HM12, Bermuda. Harbour Finance holds all of the
outstanding capital stock of Octagon Group as nominee for the
Trust. Harbour Finance disclaims any beneficial ownership of
Shares.
The name, residence or business address, present
principal occupation or employment and citizenship (and the name,
principal business and address of any corporation or other
organization in which such employment is conducted) of each
executive officer and director of Octagon Investments, Octagon
Group and Harbour Finance are set forth on Schedule I annexed
hereto, which is hereby incorporated herein by reference.
Item 3. Source and Amount of Funds or Other Consideration.
The funds used or to be used in making purchases of the
Shares were or will be borrowed by Octagon Investments pursuant
to a Facility Agreement, dated September 23, 1993 (the "Facility
Agreement"), between Octagon Investments and Extra Clearing B.V.,
a company incorporated under the laws of the Netherlands ("Extra
Clearing"). The foregoing description of the Facility Agreement
is qualified in its entirety by reference to the copy thereof
filed herewith as Exhibit 2, which is hereby incorporated herein
by reference.
On March 31, 1995, Extra Clearing and Simmonds
Communications Ltd., a company incorporated under the laws of
British Columbia, Canada ("Simmonds"), entered into an Option
Agreement (the "Option Agreement"), pursuant to which Simmonds
granted to Extra Clearing, as the agent and for the benefit of
Octagon Investments, an option (the "Options") to purchase up to
890,000 Shares. Options with respect to 436,000 of these Shares
were immediately exercisable. Options with respect to the
remaining 454,000 Shares become exercisable on June 29, 1995.
The purchase price for the Option Agreement was $890,000. The
exercise price of the Options is $1.50 per Share. The $890,000
used to purchase the Option Agreement, and the funds used to pay
the exercise price of those Options that have been exercised or
will be exercised thereunder, were or will be borrowed from Extra
Clearing pursuant to the Facility Agreement. Extra Clearing
disclaims any beneficial ownership of Options or Shares. The
foregoing description of the Option Agreement is qualified in its
Page 5
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entirety by reference to the copy thereof filed herewith as
Exhibit 3, which is hereby incorporated herein by reference.
See Item 5.
Item 4. Purpose of Transaction.
The Shares were and will be acquired for investment
purposes.
Octagon Investments may acquire additional Shares,
whether upon the exercise of Options under the Option Agreement
or otherwise, or options to purchase Shares, or other securities
of the Issuer. Octagon Investments has sold Shares acquired
upon the exercise of Options. See Item 5. Depending upon
market conditions and other relevant economic factors, Octagon
Investments may sell or otherwise dispose of any or all of the
securities of the Issuer that it beneficially owns.
Except as set forth herein, neither of the Reporting
Persons has any present plans or proposals that would result in
or relate to any of the transactions required to be described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As of June 27, 1995, the Reporting Persons
beneficially own 690,000 Shares, equal to 7.74% of the Shares
outstanding (based on 8,916,449 Shares outstanding as of April
30, 1995 as reported in the Issuer's Quarterly Report on Form 10-
Q for the quarter ended March 31, 1995). Since April 27, 1995,
400,000 Shares were purchased upon the exercise of Options
under the Option Agreement, as described below. Of these Shares,
an aggregate of 200,000 Shares were sold. See Item 5(c). As of
June 27, 1995, of the Shares beneficially owned by the Reporting
Persons, 200,000 Shares are held by Extra Clearing as the
agent and for the benefit of Octagon Investments and 490,000
Shares remain subject to, and may be acquired by Exchange
Clearing as the agent and for the benefit of Octagon Investments
upon the exercise of Options under, the Option Agreement:
Page 6
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No. of Shares Purchased Date Per Share
under Option Agreement Purchased Purchase Price
- ----------------------- --------- --------------
35,000 April 27, 1995 $ 1.50
200,000 May 17, 1995 1.50
107,000 June 1, 1995 1.50
58,000 June 19, 1995 1.50
(b) The Reporting Persons have sole voting and
dispositive power over the Shares beneficially owned by them.
(c) During the past sixty days, neither of the
Reporting Persons nor, to the best knowledge of the Reporting
Persons, any of the persons listed on Schedule I hereto or the
Trustees has purchased or sold any Shares, except as described
above in Item 4 and Item 5(a) and except that Extra Clearing
as the agent and for the benefit of Octagon Investments has sold
Shares in the NASDAQ National Market System as described below:
Per Share
No. of Shares Sold Date Sold Sales Price*
- ------------------ --------- -----------
5,000 April 19, 1995 $ 4.50
7,500 April 28, 1995 5.1875
5,000 May 30, 1995 8.25
20,500 May 31, 1995 8.00
2,500 May 31, 1995 7.75
3,800 June 1, 1995 8.375
25,000 June 2, 1995 8.375
7,700 June 6, 1995 9.00
5,000 June 6, 1995 9.25
5,000 June 6, 1995 9.375
1,500 June 6, 1995 9.50
2,300 June 6, 1995 9.5625
Page 7
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Per Share
No. of Shares Sold Date Sold Sales Price*
- ------------------ --------- -----------
23,500 June 12, 1995 9.625
26,500 June 12, 1995 9.875
10,000 June 14, 1995 9.75
4,500 June 14, 1995 9.5625
19,500 June 15, 1995 9.75
500 June 15, 1995 9.1875
10,000 June 19, 1995 10.125
10,000 June 20, 1995 10.125
4,700 June 23, 1995 10.125
* Before
Commissions
(d) Not applicable
(e) Not applicable
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
In connection with the Facility Agreement, and to
secure amounts outstanding thereunder, Octagon Investments
entered into a Security Agreement, dated September 23, 1993 (the
"Security Agreement"), in favor of Extra Clearing pursuant to
which Octagon Investments pledged and granted a first fixed
charge to Extra Clearing over all securities acquired by Extra
Clearing as the agent and for the benefit of Octagon Investments
with proceeds of advances under the Facility Agreement.
In connection with the Option Agreement, Simmonds and
Extra Clearing entered into a pledge agreement (the "Pledge
Agreement") with The R-M Trust Company ("R-M"), as trustee,
pursuant to which Simmonds pledged 890,000 Shares in support of
Simmonds' obligations under the Option Agreement.
In connection with the Option Agreement and the Pledge
Agreement, Simmonds, Extra Clearing and Davies, Ward & Beck
("DWB") entered into an Escrow Agreement, dated March 31, 1995
Page 8
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(the "Escrow Agreement"), pursuant to which DWB agreed to hold in
escrow $890,000 payable to Simmonds for the Option Agreement.
The Pledge Agreement and the Escrow Agreement were
amended on April 10, 1995 pursuant to a letter agreement (the
"Amendment Agreement") among Simmonds, Extra Clearing, DWB and
R-M.
The foregoing descriptions of the Security Agreement,
Pledge Agreement, Escrow Agreement and Amendment Agreement are
qualified in their entirety by reference to the copies thereof
filed herewith as Exhibits 4, 5, 6 and 7, respectively, which are
hereby incorporated herein by reference.
Except as described in Items 2 and 3 and this Item 6,
there are no contracts, arrangements, understandings or
relationships among the persons described in Item 2 and between
such persons and any other person with respect to any securities
of the Issuer of a type required to be disclosed pursuant to Item
6 of Schedule 13D.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 -- Agreement of joint filing pursuant to Rule
13d(1)-f.
Exhibit 2 -- Facility Agreement dated September 23, 1993
between Extra Clearing B.V. ("Extra
Clearing") and Octagon Investments Limited
("Octagon Investments").
Exhibit 3 -- Option Agreement dated March 31, 1995 between
Simmonds Communications Ltd. ("Simmonds") and
Extra Clearing.
Exhibit 4 -- Security Agreement dated September 23, 1993
by Octagon Investments for the benefit of
Extra Clearing.
Exhibit 5 -- Pledge Agreement dated March 31, 1995 among
Simmonds, Extra Clearing and The R-M Trust
Company ("R-M").
Exhibit 6 -- Escrow Agreement dated March 31, 1995 among
Simmonds, Extra Clearing and Davis, Ward &
Beck ("DWB").
Exhibit 7 -- Letter Agreement dated April 10, 1995 among
Simmonds, Extra Clearing, R-M and DWB.
Page 9
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EXHIBIT INDEX
Exhibit Description
- ------- -----------
1 Agreement of joint
filing pursuant to Rule
13d(1)-f.
2 Facility Agreement dated
September 23, 1993
between Extra Clearing
B.V. ("Extra Clearing")
and Octagon Investments
Limited ("Octagon
Investments").
3 Option Agreement dated
March 31, 1995 between
Simmonds Communications
Ltd. ("Simmonds") and
Extra Clearing.
4 Security Agreement dated
September 23, 1993 by
Octagon Investments for
the benefit of Extra
Clearing.
5 Pledge Agreement dated
March 31, 1995 among
Simmonds, Extra Clearing
and The R-M Trust
Company ("R-M").
6 Escrow Agreement dated
March 31, 1995 among
Simmonds, Extra Clearing
and Davies, Ward & Beck
("DWB").
7 Letter Agreement dated
April 10, 1995 among
Simmonds, Extra
Clearing, R-M and DWB.
Page 10
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SCHEDULE I
A. Executive officers and directors of Octagon Investments
Limited and Octagon Group Limited:
Name, Address and
Principal Principal Business
Name and Address Occupation of Employer Citizenship
- ---------------- ---------- ------------------ ----------
Paul R. Phibbs Company Wilde & Co. United
c/o Wilde & Co. Administrator/ Corporate Services Kingdom
Corporate Fiduciary Limited, a company
Services providing corporate
Limited advisory and fidu-
ciary services,
Pollet House, Lower
Pollet, St. Peter
Port, Guernsey,
Channel Islands
GY1 4EA
Kevin P. Robert Company Wilde & Co. United
c/o Wilde & Co. Administrator/ Corporate Services Kingdom
Corporate Fiduciary Limited, a company
Services providing corporate
Limited advisory and fidu-
ciary services,
Pollet House, Lower
Pollet, St. Peter
Port, Guernsey,
Channel Islands
GY1 4EA
Jonathon N. Company Wilde & Co. United
Le Conte Administrator/ Corporate Services Kingdom
c/o Wilde & Co. Fiduciary Limited, a company
Corporate providing corporate
Services advisory and fidu-
Limited ciary services,
Pollet House, Lower
Pollet, St. Peter
Port, Guernsey,
Channel Islands
GY1 4EA
Bernard A.E. Investment Octagon Invest- United
Saunders Manager ments Limited Kingdom
Le Friquet (See Item 2)
Les Baissieres
Castel, Guersney
Channel Islands
GY5 7RA
Page 11
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B. Executive officers and directors of Harbour Finance Limited:
Name, Address and
Principal Principal Business
Name and Address Occupation of Employer Citizenship
- ---------------- ---------- ------------------ ----------
Maxwell L.H. Quin Attorney M.L.H. Quin & Co., United
c/o M.L.H. Quin Attorneys, Bermuda Kingdom
& Co. Commercial Building
44 Church Street
Hamilton, HM 12
Bermuda
Jonathon M. Smith Attorney M.L.H. Quin & Co., United
c/o M.L.H. Quin Attorneys, Bermuda Kingdom
& Co. Commercial Building
44 Church Street
Hamilton, HM 12
Bermuda
John B. Ludden Attorney M.L.H. Quin & Co., United
c/o M.L.H. Quin Attorneys, Bermuda Kingdom
& Co. Commercial Building
44 Church Street
Hamilton, HM 12
Bermuda
Douglas Molyneux Attorney M.L.H. Quin & Co., United
c/o M.L.H. Quin Attorneys, Bermuda Kingdom
& Co. Commercial Building
44 Church Street
Hamilton, HM 12
Bermuda
Page 12
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SIGNATURE
After reasonable inquiry and to the best knowledge and
belief of the undersigned, the undersigned certifies that the
information set forth in this Statement is true, complete and
correct.
Dated: June 27, 1995
OCTAGON INVESTMENTS LIMITED
By: /s/ Bernard A.E. Saunders
--------------------------
Signature
Bernard A.E. Saunders, Chairman
-------------------------------
Name/Title
THE CEDAR TRUST
By: /s/ J.M. Smith
--------------------------
Signature
J.M. Smith, Trustee
-------------------------------
Name/Title
By: /s/ John Ludden
--------------------------
Signature
John Ludden, Trustee
-------------------------------
Name/Title
Page 13
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Exhibit 1
AGREEMENT OF JOINT FILING
Pursuant to Rule 13d-1(f) promulgated under the Securities
Exchange Act of 1934, the undersigned persons hereby agree to
file with the Securities and Exchange Commission, the Statement
on Schedule 13D (the "Statement") to which this Agreement is
attached as an exhibit, and agree that such Statement, as so
filed, is filed on behalf of each of them.
This Agreement may be executed in counterparts, each of which
when so executed shall be deemed to be an original, and all of
which together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement.
Dated: June 27, 1995
OCTAGON INVESTMENTS LIMITED
By: /S/ Bernard A.E. Saunders
----------------------------------
Signature
Bernard A.E. Saunders, Chairman
----------------------------------
Name/Title
THE CEDAR TRUST
By: /S/ J. Marcus Smith
----------------------------------
J. Marcus Smith, Trustee
----------------------------------
Name/Title
By: /S/ John Ludden
----------------------------------
John Ludden, Trustee
----------------------------------
Name/Title
<PAGE>
Exhibit 2
22 September 1993
Extra Clearing B.V.
Rokin Plaza
Papenbroekssteeg 2
1012 NW Amsterdam
TO: Octagon Investments Limited
FACILITY AGREEMENT
Dear Sirs,
We refer to the Facility Agreement made between us of today's
date, the Security Agreement which has been delivered by you in
performance of your obligations under paragraph 3(d) of the
Facility Agreement, and the Clearing Terms. Words and
expressions defined in or for the purposes of the Facility
Agreement shall bear the same meaning herein.
Pursuant to paragraph 14.1 of the Facility Agreement we are
entitled to exercise certain rights to realise security following
the breach by you of the Trading Notice or of any material
provision of the Approved Procedures and of the Clearing Terms.
We are entitled to exercise similar rights to realise security
following the occurrence of force majeure as described in
paragraph 5 of the Clearing Terms. These rights are the relevant
rights.
Without prejudice to our rights under the Facility Agreement or
the Security Agreement whatsoever we confirm that we do not
intend to exercise any of the relevant rights other than in
circumstances where we believe to do so is necessary or desirable
in our interests.
________________________________
Extra Clearing B.V.
1
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Extra Clearing B.V.
Rokin Plaza
Papenbroekssteeg 2
1012 NW Amsterdam
To: Octagon Investments Limited
23 September 1993
Dear Sirs:
FACILITY AGREEMENT
We, Extra Clearing B.V. (the Lender), are pleased to confirm that
in response to your request we will make available to you a multi
currency loan facility (the Facility) of up to the Maximum Amount
(as defined below), on the terms and conditions contained in this
letter.
Definitions
1.1 In this Letter each of the following expressions has except
where the context otherwise requires, the meaning shown opposite
it:
Account account number 888 (designated Octagon Investments
Limited) opened by the Lender in its books of account for the
account of the Borrower in connection with Permitted Trading
and/or utilisation of the Facility, together with any additional,
substituted or replacement account therefor from time to time;
Advance the principal amount of each amount made available to the
Borrower hereunder by way of loan or (as the context requires)
the principal amount thereof outstanding;
Alternative Currency any currency (other than sterling) which is
freely transferable and immediately convertible into sterling and
available in the London foreign exchange market;
Approved Guidelines the guidelines (including details of approved
securities) set out in Appendix 3 as amended from time to time by
agreement between the Lender and the Borrower;
Approved Procedures procedures designated by the Lender and
notified to the Borrower from time to time, in relation to
Permitted Trading;
Overdraft Outstandings at any time the aggregate of the Sterling
Amounts of all Overdraft Facility Advances for the time being
2
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outstanding together with any other amounts (including interest,
costs and other expenses) debited to the Account from time to
time;
security agreement an agreement granting in favour of the Lender,
a mortgage, charge, lien, pledge or similar security interest
over any assets of the Borrower;
Sterling Amount
(a) in relation to any Advance in sterling its principal
amount;
(b) in relation to any Advance in an Alternative Currency, the
amount in sterling which would have constituted such amount
if it had remained at all times denominated in sterling and
had been reduced from time to time in accordance with this
Letter;
Term Facility the term advance facility, the terms and conditions
of which are set out in this Letter;
Term Facility Advance an Advance drawn or to be drawn under the
Term Facility;
Term Facility Outstandings at any time the aggregate amount of
the Sterling Amounts of all Term Facility Advances for the time
being outstanding;
Total Outstandings the aggregate from time to time of Overdraft
Outstandings and Term Facility Outstandings;
Trading Notice a notice from the Lender to the Borrower delivered
on the date hereof substantially in the terms of Appendix 2, as
amended by the Borrower from time to time in accordance with
paragraph 4.3.
1.2 References herein to "you" (or similar expression) or to
the Borrower, are references to Octagon Investments Limited.
References herein to "us" or "we" (or similar expression) or to
the Lender, are references to Extra Clearing B.V.
Amount
2.1 In accordance with the provisions of this Letter, the
Lender shall make Advances to the Borrower. The maximum
aggregate principal amount of the Term Facility and the Overdraft
Facility is the Maximum Amount.
2.2 Total Outstandings shall not, at any time, exceed the
Maximum Amount.
3
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Availability
3. The Facility will become available two Business Days after
the date on which we receive, in form and substance satisfactory
to us:
(a) the enclosed copy of this Letter duly accepted by the
Borrower not later than 29th September 1993;
(b) a certificate signed by one of the Borrower's directors
substantially in the form set out in the Appendix 1 and the
documents referred to therein;
(c) an opinion of an independent firm of local lawyers
acceptable to us substantially in the form separately
provided to you;
(d) security agreements, duly executed by the Borrower, as
designated by the Lender prior to the date hereof.
Permitted Trading
4.1 The Facility may only be utilised to satisfy obligations
which arise as a result of the acquisition of approved securities
(but not in respect of any margin or similar obligation), which
acquisition is made in accordance with the Trading Notice and the
Approved Procedures (each such obligation a Permitted Trading
Obligation), or to repay all or any part of the Total
Outstandings. All Permitted Trading Obligations are for the
account of the Borrower.
4.2 Permitted Trading shall be carried on by the Borrower:
(a) in the name of the Lender as agent for the Borrower and
for its account only;
(b) in accordance with the Approved Procedures; and
(c) in accordance with the Clearing Terms.
4.3 You will comply with the Trading Notice at all times. We
may amend the terms of the Trading Notice in our discretion from
time to time. We shall only make amendment following, if
practicable, consultation with you. Any amendment shall be
notified to you in writing and shall not take effect, unless the
amendment is designated by us as urgently required in which case
it will take immediate effect, earlier than 5 Business Days
following the date of notification as aforesaid.
4
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4.4 Subject to the provisions of this Letter and of the Trading
Notice, the Lender will satisfy Permitted Trading Obligations by
making payment on behalf of the Borrower of amounts required to
satisfy such obligations in accordance with any direction given
by the Borrower under paragraph 5.2. On each occasion the Lender
satisfies a Permitted Trading Obligation otherwise than by
disbursement of a Term Advance, the Borrower shall be deemed to
have requested, and the Lender shall be deemed to have made, an
Overdraft Facility Advance in the amount and in the currency
required and the Accounts shall be debited accordingly.
Term Advances
5.1 Subject to the other provisions of this Letter and
performance by the Borrower of its terms, the Borrower may
request a Term Facility Advance in accordance with paragraph 5.2.
Each Term Facility Advance shall be:
(a) for such period selected by the Borrower being one week,
one month, three months, six months, nine months, twelve
months or eighteen months or such other period we shall
agree with you prior to making the Term Facility Advance;
and
(b) of an amount no less than the Equivalent Amount (if the
Term Facility Advance is not to be denominated in DGL), of
DGL1,000,000.
5.2 No later than close of business on any Business Day prior
to the Business Day on which the Borrower wishes a Term Facility
Advance to be made, the Borrower shall specify:
(a) whether the Advance is to be credited to the Account in the
reduction of the Overdraft Outstandings;
(b) if the Advance is not to be credited as aforesaid, the
Permitted Trading Obligation in respect of which it is to
be utilised;
(c) the proposed drawing date, which shall be a Business Day;
and
(d) the amount, currency and term of the Advance.
5.3 Each Term Facility Advance shall be credited to the
Account.
5.4 Subject to the provisions of this Letter, the Lender shall
make each Term Facility Advance as requested by the Borrower.
Any Term Facility Advance which is repaid during the currency of
the Facility, subject to the other provisions of this Letter, may
be redrawn by the Borrower.
<PAGE> 5
Alternative Currencies
6. Each Advance shall be made and maintained in the currency
required to satisfy the Permitted Trading Obligation, or to repay
the part or parts of the Total Outstandings, in respect of which
it was made.
Interest
7.1 Interest shall accrue on the Overdraft Outstandings on a
daily basis, by reference to the balance thereof at close of
business on each day and a 365 day year, and shall be debited to
the Account on each Interest Payment Date in respect of the
Overdraft Facility.
7.2 The following provisions shall apply in relation to
Interest Periods and Term Facility Advances:
(a) each Interest Period for each Term Facility Advance shall
be equal to the term of the Advance as determined in
accordance with paragraph 5;
(b) an Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next succeeding
Business Day;
(c) where two or more Term Facility Advances in the same
currency have the same Interest Period they shall be
consolidated into one Advance on and as from the first day
of the Interest Period.
7.3 The rate of interest payable on each Term Facility Advance
(or any part thereof) for each Interest Period relating to it
will be the rate per annum calculated by us to be the aggregate
of 0.75 per cent per annum and the Rate.
7.4 The rate of interest payable on the Overdraft Outstandings
(or any part thereof) per annum will be the rate per annum
calculated by us to be the aggregate of 1.50 per cent per annum
and the Rate.
7.5 The Rate means the rate per annum at which deposits of the
relevant currency in amounts comparable to the Advance (or the
relevant part thereof) are offered to ING Bank N.V. by prime
banks for the same period as the Interest Period in the London
Inter-bank Market at or about 11.00 a.m. (London time) on the
second Business Day before the beginning of the Interest Period
or, in the case of sterling, on the first day of that Interest
Period.
7.6 Our certificate as to any rate of interest shall, in the
absence of manifest error, be conclusive.
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Fees and Expenses
8. You will pay to us a commitment fee in sterling, calculated
on the basis of actual days elapsed from the date hereof and a
365 day year, at the rate of 0.15 per cent per annum upon the
Maximum Amount determined on the date two Business Days prior to
the Business Day on which it is payable. The said fee shall be
payable at monthly intervals after the date of this Letter by
debit to the Account on the first Business Day of each calendar
month.
Repayment
9.1 Subject to the provisions of this Letter:
(a) each Term Facility Advance shall be repaid on the last day
of the term of such Advance; and
(b) the Total Outstandings shall be repaid on the date falling
60 days following receipt by the Borrower of notice from
the Lender demanding repayment of the same.
9.2 If repayment of the Total Outstandings is demanded pursuant
to paragraph 9.1:
(a) the Facility shall be cancelled;
(b) Permitted Trading shall cease immediately following such
demand other than as required to close or liquidate
existing positions; and
(c) all other amounts and liabilities due to us hereunder shall
be payable on the same date as the Total Outstandings.
9.3 Each repayment of an Advance shall be in the currency or
currencies in which such Advance is denominated immediately
before repayment falls to be made.
Payments
10.1 All payments, whether of principal, interest or otherwise,
due to be made by you under this Letter will be:
(a) (subject to the other provisions of this Letter and in
particular, the application of paragraph 2.2), made by
debit to the Account in which case the Borrower shall be
deemed to have requested, and the Lender shall be deemed to
have made, an Overdraft Facility Advance in the amount and
in the currency required; or
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(b) (if made pursuant to any of paragraph 9(b) or paragraph 16
or following the occurrence of an Event of Default or if
payment in accordance with paragraph 10.1(a) would
otherwise be contrary to any provision of this Letter),
made in the currency required hereunder by the due date for
payment thereof in same day funds not later than 11:00
a.m. (London time) on the relevant day to such account and
place as we may from time to time modify to you for the
purpose by (other than in the case of payment following the
occurrence of an Event of Default in which case no prior
notice will be given) not less than 15 days prior notice in
writing, without any deduction or withholding whatsoever.
10.2 If by law you are unable to make a payment without a
deduction or withholding, you will forthwith pay such additional
amount so that the net amount received by us will equal the full
amount which would have been received had no such deduction or
withholding been made. In respect thereof:
(a) all taxes required by law to be deducted or withheld by the
Borrower from any amounts payable or paid hereunder shall
be paid by the Borrower when due and the Borrower shall,
within 10 Business Days of the payment being made, deliver
to us evidence reasonably satisfactory to us that the
payment has been duly remitted to the appropriate
authority; and
(b) if the Borrower pays an additional amount pursuant to this
paragraph 10.2 (a tax payment) and the Lender in its sole
opinion determines that it has effectively obtained a
credit against tax which would otherwise be payable by it
on its net income by reason of that tax payment (a tax
credit), and the Lender is able to identify that such tax
credit is attributable to a tax payment, the Lender shall
reimburse to the Borrower such amount as the Lender shall
determine to be the proportion of such tax credit as will
leave the Lender, after that reimbursement, in no better or
worse position than it would have been in if such tax
payment had not been made. The Lender shall have an
absolute discretion to arrange its tax affairs in whatever
manner it thinks fit and as to the timing of any claim
for tax credit and the extent, order and manner in which it
does so. The Lender shall not be obliged to disclose any
information regarding its tax affairs or its computations
to the Borrower.
10.3 All payments made by you under this Letter shall be made
without set-off or counterclaim.
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10.4 If any payment would otherwise be due on a day which is not
a Business Day, it shall be due on the next succeeding Business
Day or, if that Business Day falls in the following month of the
year, on the preceding Business Day.
10.5 If the Borrower fails to pay any amount in accordance with
this Letter it shall pay interest in the currency in which such
amount is denominated on that amount from the time of default up
to the time of actual payment (as well after as before judgment)
at the rate per annum which is the sum of (i) 4.00 per cent and
(ii) the rate (as determined by the Lender), for a deposit in
such currency of an amount comparable to the defaulted amount,
offered to ING Bank N.V. in the London Inter-bank market, for
such period as the Lender may from time to time select, at or
about 11.00 a.m. (London time) on the Business Day succeeding
that on which Lender becomes aware of the default for value on
that day.
10.6 If, under any applicable law, whether as a result of a
judgment against the Borrower or the liquidation of the Borrower
or for any other reason, any payment under or in connection with
this Letter is made or is recovered in a currency (the other
currency) other than that in which it is required to be paid
hereunder (the original currency) then, to the extent that the
payment to the Lender (when converted at the rate of exchange on
the date of payment or, in the case of a liquidation, the latest
date for the determination of liabilities permitted by the
applicable law) falls short of the amount unpaid under this
Letter, the Borrower shall as a separate and independent
obligation, fully indemnify the Lender against the amount of the
shortfall; and for the purposes of this sub-clause "rate of
exchange" means the rate at which the Lender concerned is able on
the relevant date to purchase the original currency in London
with the other currency.
Changes In Circumstances
11.1 Where the introduction, imposition or variation of any law
or any change in the interpretation or application of any law
makes it unlawful without breaching such law for either the
Lender or the Borrower to perform any of their respective
obligations hereunder or under the security agreement or any
other agreement or arrangement entered into in connection
herewith or for the Lender to allow all or part of an Advance to
remain outstanding or to carry out all or any of its other
obligations under this Letter relating to that Advance or either
to charge or to receive interest at the rate applicable under
this Letter in respect of that Advance the Borrower shall, within
five Business Days of being so notified or on such later date as
such law shall render the same unlawful (and only to the extent
necessary to cure such illegality) prepay to the Lender that
Advance.
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11.2 If:
(a) there shall occur any change in national or international
financial, political or economic considerations, currency
availability, currency exchange rates or exchange controls,
which in the opinion of the Lender renders the denomination
of any Advance in any Alternative Currency impracticable or
undesirable or;
(b) in relation to any Advance the Lender determines that, by
reason of circumstances affecting the London Inter-bank
market generally, reasonable and adequate means do not or
will not exist for ascertaining under clause 7.5 the Rate
applicable to that Advance the Lender shall forthwith
notify the Borrower and:
(i) no further Advances or, in the case of (a) above,
Advances in that Alternative Currency, shall be made
while such circumstances continue to exist;
(ii) unless within thirty days of the giving of the notice,
the Borrower and the Lender arrive, by negotiation in
good faith, at an alternative basis acceptable to the
Borrower and the Lender for continuing in the case of
(a) above Advances in that Alternative Currency or, in
the case of (b) above, that Advance, the Borrower
shall prepay the relevant Advance or Advances; and
(iii) while any agreed alternative basis is in force, the
Lender shall periodically (but at least monthly)
determine whether circumstances are such that the
basis is no longer necessary; and if the Lender so
determines, it shall forthwith notify the Borrower
and that basis shall cease to be effective on a date
specified by the Lender.
Representations and Warranties
12. By accepting the Facility, you represent to us that, and
save in the case of paragraph 12(g) below, upon each occasion an
Advance is made hereunder, you warrant to us that:
(a) the documents which contain or establish your constitution
contain provisions which authorise, and all necessary
corporate or other action has been taken to authorise, you
to accept this Letter and perform the transactions
contemplated in it;
(b) no limit on the borrowing powers of you or your directors
will be exceeded as a result of such borrowing;
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(c) this Letter when accepted by you will save as to any
reservation or qualification in respect thereof specified
in the legal opinion delivered to the Lender hereunder,
constitute valid, binding and enforceable obligations on
your part;
(d) your acceptance of this Letter and the performance of the
terms hereof by you do not and will not constitute a
material breach of any law, decree or enactment binding on
you or of any instrument or contract binding on you or any
of your assets and will not result in the creation or
imposition of any charge or encumbrance over any such
assets;
(e) you are not in default under any instrument or contract
binding on you or any of your assets which is reasonably
likely to have a material adverse effect on your business,
assets or condition or your ability to perform your
obligations hereunder;
(f) there are no proceedings or claims pending or threatened
before any court or tribunal, arbitration or other
authority which in any case might have a material adverse
effect on your business, assets or financial condition or
your ability to perform your payment and other material
obligations hereunder;
(g) you have disclosed to us prior to the date hereof all
information relating to you which you know or should
reasonably know and which is material to be known by a
lender to you in connection with facilities of the kind
contemplated by this Letter.
Undertakings
13. You undertake that, until all liabilities under this Letter
have been discharged:
(a) you will use the Advances only for the purposes specified
in clause 4;
(b) you will comply at all times with the Trading Notice, the
Approved Procedures and the Clearing Terms;
(c) your liabilities under this Letter will rank at least
equally and rateably (pari passu) in point of priority and
security with all your other liabilities (both actual and
contingent) except:
(i) liabilities which are subject to liens or rights of
set-off arising in the normal course of trading and
the aggregate amount of which is not material; and
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(ii) liabilities which are preferred solely by operation of
law and not by reason of any Security Interest;
(d) you will not create or permit to exist over any of your
assets any Security Interest (other than as permitted under
(c)(i) above) unless the benefit of the Security Interest
is, upon its creation or arising, extended equally and
rateably to our satisfaction to your liabilities under this
Letter and so that, in default of such extension, the
person entitled to the Security Interest shall (if he had
notice of this undertaking) hold the Security Interest pro
tanto upon trust for us.
For the purpose of this Letter, Security Interest means any
mortgage, charge, pledge, lien, right of set-off or other
security interest whatsoever, howsoever created or arising;
(e) you will send to us as soon as they become available, but
in any event within 3 months of the end of your financial
periods (which shall not be longer than 15 months without
our prior consent, such consent not to be unreasonably
withheld or delayed), 2 copies of your audited financial
statements which shall contain an income statement and a
balance sheet, accurately disclose all your liabilities
(actual and contingent), be prepared on a basis
consistently applied, be audited and certified without
qualification by a firm of independent accountants of
recognised international standing and give a true and fair
view, and you will promptly supply up with such additional
information as we may from time to time reasonably request;
(f) you will carry on and conduct your business in a proper
manner;
(g) you will maintain in full force and effect all necessary
approvals, permissions and authorisations and will promptly
obtain any further approval, permission and authorisation
which it may become necessary to obtain from any
governmental or administrative authority or organisation to
enable you to:
(i) perform any of the transactions contemplated in, or
comply with any of the provisions of, this Letter; and
(ii) to carry on Permitted Trading in accordance with the
Trading Notice, Approved Procedures and the Clearing
Terms; and
(h) you will notify us forthwith if you become aware of the
occurrence of an Event of Default under paragraph 14 or an
event which, with the giving of notice and/or the lapse of
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time and/or the relevant determination would constitute
such an event and provide us with full details of any steps
which you are taking, or are considering taking, in order
to remedy or mitigate the effect of such event or otherwise
in connection with it.
Default
14.1 If:
(a) you fail to pay any amount due under this Letter on the due
date or on demand, if so payable and you fail to
demonstrate to our reasonable satisfaction that the reason
for such failure is due only to a failure of the money
transfer or other system by which payment was intended to
be made, and that you gave instructions or order for such
payment in good time and such payment is not actually
received within 3 Business Days of the due date;
(b) you fail to observe or perform any obligation under this
Letter or under any undertaking or arrangement entered into
in connection therewith including (without limitation) any
security agreement, other than an obligation of the type
referred to in paragraph 14.1(a) or 14.1(c) and, in the
case of a failure capable of being remedied, we reasonably
determine, within 21 days after you became aware of the
failure, that it has not been remedied;
(c) you fail to observe or perform any provision of the Trading
Notice or any material provision of, the Approved
Procedures or the Clearing Terms;
(d) any representation, warranty or statement which is made (or
acknowledged to have been made) by you in writing in
accepting the Facility or which is contained in any
certificate, statement, legal opinion or notice provided
under or in connection with this Letter proves to be
incorrect in any material respect by reference to the
circumstances when made;
(e) you transfer or dispose of, or threaten to transfer or
dispose of, a substantial part of your assets without our
prior consent (such consent not to be unreasonably withheld
or delayed);
(f) you change or threaten to change the nature or scope of
your business, or suspend or threaten to suspend a
substantial part of the present business operations you now
conduct directly or indirectly without our prior consent
(such consent not to be unreasonably withheld or delayed),
or any governmental authority expropriates or threatens to
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expropriate all or part of your assets and the result of
any of the foregoing is, in our reasonable opinion,
materially and adversely to affect your financial condition
or your ability to perform your material obligations under
this Letter;
(g) any of your indebtedness for borrowed money becomes due or
capable of being declared due before its stated maturity
otherwise than by voluntary prepayment, any guarantee or
similar obligation of yours is not discharged at maturity
or when called or you go into default under, or commit a
breach of, any instrument or agreement relating to any such
indebtedness, guarantee or other obligation;
(h) an encumbrancer takes possession, or a trustee, receiver,
administrator or similar officer is appointed, of any of
your assets, or distress or any form of execution is levied
or enforced upon or sued out against any such assets;
(i) you become or are declared insolvent;
(j) you convene a meeting of your creditors or propose to make
any arrangement or composition with, or any assignment for
the benefit of, your creditors or a petition is presented
or a meeting is convened for the purpose of considering a
resolution or other steps are taken for your winding-up,
bankruptcy or dissolution (other than for the purposes of
and followed by a reconstruction previously approved in
writing by us, unless during or following such
reconstruction you become or are declared to be insolvent);
(k) anything analogous to any of the events specified in
paragraph (h), (i) or (j) occurs under the laws of any
applicable jurisdiction,
then we may, in the case of any of the events mentioned in
paragraphs (a), (b), (c), (g), (h), (i), (j) and (k) without
notice to you, but in the case of any of the events mentioned in
paragraphs (d), (e) and (f), only following notice to you and
only if during the period of 14 days thereafter we fail to agree
terms satisfactory to us on which the Facility may be continued:
(i) cancel any part of the Facility undrawn at such time;
(ii) demand payment in full of all amounts and liabilities
due to us from you hereunder;
(iii) enforce the terms of any and all security agreements;
and/or
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(iv) close out, liquidate or transfer all or any positions,
agreements or contracts entered into pursuant to
Permitted Trading.
14.2 Immediately upon the occurrence of any of the events
specified in paragraphs (a), (b), (c), (g), (h), (i), (j) and (k)
of paragraph 14.1 and immediately upon our giving you notice of
the occurrence of any of the events specified in paragraphs (d),
(e) and (f) thereof (each such event an Event of Default), you
shall cease all Permitted Trading.
Indemnity
15. You will fully indemnify us from and against, on a
continuing basis, any expense, loss, damage or liability (as to
the amount of which our certificate shall, in the absence of
manifest error, be conclusive) which we may incur or suffer as a
consequence of or resulting from:
(a) Permitted Trading; and/or
(b) cancellation and prepayment of the Total Outstandings by
the Borrower pursuant to paragraph 16.2; and/or
(c) the occurrence of any Event of Default or any event which,
with the giving of notice and/or the lapse of time and/or
the relevant determination, would constitute such an Event
of Default.
Without prejudice to its generality, the foregoing indemnity
shall extend to any interest, fees or other sums whatsoever paid
or payable on account of any funds borrowed in order to repay any
unpaid amount or to meet any Permitted Trading Obligation and to
any loss (including loss of profit), premium, penalty or expense
which may be incurred in liquidating or employing deposits from
third parties acquired to make, maintain or fund any Advance (or
any part of it) or any other amount due or to become due under
this Letter.
Prepayment
16.1 If:
(a) at any time any provision of this Letter or of the security
agreements is or becomes or is declared or adjudged
ineffective; or
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(b) compliance by the Borrower with any provision of the
Trading Notice, the Approved Procedures or the Clearing
Terms is or becomes unlawful or is a breach or otherwise
contrary to any rule or regulation binding upon it,
we may serve a notice of prepayment and cancellation on the
Borrower. On the date falling five Business Days after the date
of service of the notice:
(i) the Borrower shall prepay the Total Outstandings,
accrued interest and all other amounts and liabilities
due to us hereunder; and
(ii) our commitments hereunder, and the Facility, shall be
cancelled.
16.2 If the Borrower wishes to prepay all of the Total
Outstandings (but not part) it may do so by serving a notice of
prepayment on the Lender specifying the amount of such
prepayment. On the date falling five Business Days after the
date of service of the notice:
(a) the Borrower shall prepay the Total Outstandings, accrued
interest and all other amount and liabilities due to us
hereunder; and
(b) our commitments hereunder, and the Facility, shall be
cancelled.
Further Provisions
17.1 In any proceedings relating to this Letter a statement as
to any amount due to us which is certified as being correct by
one of our officers shall be prima facie evidence that such
amount is in fact due and payable.
17.2 If any sum paid or recovered in respect of your liabilities
under this Letter is less than the amount then due, we may apply
that sum to principal, interest, fees or any other amount due
under this Letter in such proportions and order and generally in
such manner as we think fit.
17.3 Our rights under this Letter are cumulative, may be
exercised as often as we consider appropriate and are in addition
to our rights under the general law. Our rights (whether arising
under this Letter or under the general law) shall not be capable
of being waived or varied otherwise than by an express waiver or
variation in writing; and in particular any failure to exercise
or any delay in exercising any of such rights shall not operate
as a waiver or variation of that or any other such right; any
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defective or partial exercise of any of such rights shall not
preclude any other or further exercise of that or any other such
right; and no act or course of conduct or negotiation on our part
shall in any way preclude us from exercising any such right or
constitute a suspension or any variation of any such right.
17.4 Any notice or communication under this Letter shall be in
writing and in the English language and shall be delivered
personally or sent by post or facsimile to the address given in
this Letter or at such other address as may be notified in
writing. Proof of posting or despatch of any notice or
communication to you shall be deemed to be proof of receipt:
(a) in the case of a letter, three Business Days after having
been posted prepaid post;
(b) in the case of a facsimile on the Business Day of despatch
provided such facsimile was successfully transmitted before
6.00 pm (London time) on that day.
17.5 If any of the provisions of this Letter becomes
invalid, illegal or unenforceable in any respect under any
law, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or
impaired.
Choice of Law/Jurisdiction
18.1 This Letter is governed by, and shall be construed in
accordance with, the laws of England.
18.2 You:
(a) and we irrevocably submit to the exclusive jurisdiction of
the courts of England; and
(b) shall at all times maintain an agent for service of process
in England. Such agent shall be Octagon Analytics Limited
of 28 Gilston Road, London SW10 9SS and any writ, judgment
or other notice of legal process shall be sufficiently
served on you if delivered to such agent at its address for
the time being. You undertake not to revoke the authority
of the agent and if, for any reason, any such agent no
longer serves as your agent to receive service of process,
you shall promptly appoint another such agent and advise us
thereof.
Yours faithfully
Extra Clearing B.V.
___________________________
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ACCEPTANCE
We accept the Facility offered in the above Letter and hereby
agree all the terms and conditions thereof.
Dated 23 September, 1993
Octagon Investments Limited
By___________________________
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APPENDIX 1
CERTIFICATE
(to be given by the Borrower)
referred to in paragraph 3(b)
To: Extra Clearing B.V.
I, [name], a Director of Octagon Investments Limited of [address]
(the Company)
HEREBY CERTIFY that:
(a) attached hereto, marked "A", are true and correct copies of
all documents which contain or establish or relate to the
constitution of the Company;
(b) attached hereto, marked "B", is a true and correct copy of
resolutions duly passed at a meeting of the Board of
Directors of the Company duly convened and held on
_____ _____ ____ 19__ approving the Facility Letter and
authorising its acceptance, delivery and performance; and
such resolutions have not been amended, modified
or revoked and are in full force and effect;
(c) attached hereto, marked "C", are true and correct copies of
the acceptance by the agent in England of their appointment
as agent of the Company for the purpose of accepting
service
of process.
The following signatures are the true signatures of the persons
who have been authorised to sign the Facility Letter and to give
notices and communications under or in connection with the
Facility Letter:
Name Position Signature
Signed:
Date:
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I, [name], the Secretary of Octagon Investments Limited (the
Company) hereby certify that Mr. [________] is a duly appointed
Director of the Company and that the signature above is his
signature.
Signed:
Date:
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APPENDIX 2: TRADING NOTICE
Extra Clearing B.V.
Trading, Risk and Credit Parameters: Octagon Trading Limited
TRADING
1. Dealings shall be limited to securities falling with the
Approved Guidelines (approved securities).
2. All dealings are to be carried out in those accounts agreed
by the parties from time to time and designated by the Lender in
accordance with the Approved Procedures.
3. No Permitted Trading (or other transfer or dealings in
approved securities) may be undertaken other than with the prior
approval of Extra Clearing B.V. (ECBV) which approval shall be
given in accordance with the Approved Procedures.
RISK
4. At any time the aggregate estimated potential loss of
approved securities must not exceed the Net Liquidated Balance.
The estimated potential loss of an approved security shall be
determined by ECBV in its discretion.
5. For the purposes hereof:
(a) ECBV's certificate of the estimated potential loss of an
approved security or of the Net Liquidated Balance shall, in
the absence of manifest error, be conclusive.
(b) The Net Liquidated Balance means the aggregate value of
approved securities (marked to market or if no market or
valuation marked to market is available for such purpose as
valued by ECBV on such basis as it shall reasonably
determine) at any time minus the Total Outstandings or, if
the Account is in credit, plus the Sterling Amount of such
credit.
CREDIT
6. The Maximum Amount shall be the (Net Liquidated Balance)
multiplied by 10 subject to a maximum (irrespective of the Net
Liquidated Balance) of L15 million.
7. At any time no more than 20 per cent of the Maximum Amount
may be represented by approved securities of (or relating to
securities of) the same issuer.
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EXTRA CLEARING B.V./CLEARING TERMS
SERVICE
1. Pursuant to those terms (and any other agreement made
between Extra Clearing B.V. (ECBV) and the party to whom these
terms have been supplied (Customer) including, without
limitation, the facility letter dated 1993 (the
Facility Letter)) ECBV shall in its own name but for the account
of
the Customer conclude with the pertinent bank or broker in a
composite match trade advice, and shall open, hold and close
relevant securities position of the nature agreed by ECBV and the
Customer from time to time (Permitted Trading).
2. ECBV shall provide a Statement of Authority in favour of the
Customer with respect to each bank or broker for the purposes of
Permitted Trading.
RESTRICTIONS
3. In the event that at any time the volume or nature of the
business of the Customer exceeds the level which ECBV in its
discretion deems desirable with a view to all circumstances which
ECBV deems relevant, including, without limitation, circumstances
prevalent on the relevant market(s), the financial position of
the Customer and events of force majeure, ECBV shall inform the
Customer thereof and shall impose prudent restrictions on opening
transactions of the Customer or direct the Customer to conclude
closing transactions, or give Customer trading directives and
position limits whether of a general nature or specifically, and
the Customer shall promptly comply with such restrictions and/or
directions.
ACCOUNTS
4.1 Extra Cleaning shall keep the following accounts for the
customer:
(a) Current Account
In this account (if applicable subdivided in accounts per
currency) all readily payable and readily receivable debts
between ECBV and Customer will be booked and recorded, such
as but not limited to
. the price of options, futures, underlying values
and/or other commodities bought for account of the
Customer (including purchases due to exercises);
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. the revenue of options, futures, underlying values
and/or other commodities written or sold for account
of the Customer as received by ECBV (including sales
due to exercises);
. dividend and/or interest received by ECBV for account
of the Customer;
. margin provided in cash to Clearing Corporations
and/or brokers plus the accrued costs thereof;
. costs and expenses paid by ECBV for account of the
Customer;
. fees due by the Customer to ECBV;
. interest due by the Customer to ECBV.
The balance of this account is referred to as the Cash Balance.
(b) Position Account
This account reflects the various positions held for account of
the Customer by ECBV on the relevant markets and vis-a-vis third
parties, and includes unsettled transactions, margin provided
other than in cash, collateral and personal security provided by
the Customer to ECBV and non-readily payable rights and
obligations between ECBV and Customer.
The value of each position in this Position Account shall be
computed by ECBV in accordance with the terms notified to the
Customer from time to time, and shall be calculated in
[guilders].
The balance of this account further to be referred to as the Net
Position.
4.2 ECBV shall reasonably determine the rate of exchange between
currencies, and shall reasonably value underlying values and
other commodities receivable by or offered to it in payment or as
security, taking into account the current market value thereof,
if any. The guidelines currently in force for this purpose will
be notified to the Customer from time to time. ECBV will timely
inform the Customer of any material change in these guidelines,
notwithstanding ECBV's discretion to make such determination/
valuation or to vary the guidelines if it sees fit.
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4.3 ECBV shall make available for collection by the Customer
every Business Day, and if so requested shall also send by
ordinary mail or facsimile or in a Data Correspondent to the
Customer at its address made known to ECBV, a Statement of
Account reflecting the current rights and obligations in relation
to ECBV.
4.4 Each Business Day the Customer shall check his records
against the Statement of Account. If the Customer does not
dispute a Statement of Account, sent or made available to him by
ECBV, within 24 hours after the same may reasonably be deemed to
have been received by him, such Statement of Account shall be
binding on the Customer, without prejudice to the Customer's
right to show, even after the expiry of said period of 24 hours,
that a manifest error was made, provided that the Customer also
shows that it was not reasonably in a position to notify ECBV
with respect to such error within the above mentioned period of
24 hours, and provided that ECBV is compensated by the Customer
for any cost, expense or damage resulting from its late
notification.
4.5 The Customer shall pay any Cash Balance due to ECBV as
reflected in any Statement of Account, within 24 hours after the
relevant Statement of Account has been made available, to the
extent that the amount due is not covered by credit extended by
ECBV to the Customer in accordance with the terms agreed
separately.
FORCE MAJEURE
5.1 In the event either party is prevented by force majeure of a
permanent or temporary nature to (further) perform its
obligations under this contract, ECBV shall be entitled without
being in any way liable in damages or otherwise, to
(a) revoke any or all Statements of Authority in favour of the
Customer with immediate effect, and/or
(b) terminate this contract either fully or partially by notice
in writing to that effect, without any judicial intervention
and without prejudice to ECBV's rights under this contract,
and/or
(c) to suspend the (further) performance under this contract.
In case of suspension ECBV shall be entitled to declare this
contract terminated either fully or partially.
After taking one or more of the aforementioned actions ECBV may
immediately take any of the measures described in paragraph 14.1
of the Facility Letter.
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5.2 Events of force majeure shall include all circumstances by
which either party is unable, either temporarily or permanently,
to fulfil its obligations, such as but not limited to electricity
failure, break down/failure of computers or telephones, market
disruption or crash, governmental measures, measures of any
Clearing Organisation and further all circumstances in which ECBV
cannot reasonably be expected (any longer) to perform its
obligations to the Customer.
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APPENDIX 3: APPROVED PROCEDURES/
APPROVED GUIDELINES
APPROVED PROCEDURES
1. Until further notice no transaction in Approved Securities
may be entered into by Octagon Investments Limited (Octagon)
utilising the Facility and in relation to Permitted Trading
other than with the prior approval of Mr. Roelof Veenstra of
Extra Clearing B.V. (ECBV). Mr. Veenstra may authorise other
employees of ECBV to give such approval from time to time.
The names of authorised employees will be notified to Octagon
from time to time.
2. Until further notice the only person authorised to seek the
approval of ECBV on behalf of Octagon and in relation to the
Facility, is Mr. Paul Burdell of Octagon Analytics Limited,
Octagon's investment adviser. Octagon and ECBV may agree
that additional persons be authorised to act on behalf of
Octagon in this respect from time to time.
3. Other than as specifically agreed by ECBV and Octagon
approval of ECBV may only be sought during business hours in
Amsterdam.
4. Until further notice by ECBV, Octagon may seek authority to
trade and ECBV may give approval to trade, orally. Octagon
will be entitled to trade immediately following such oral
approval. Octagon will comply with the terms of any approval
including conditions relating to the time by which a trade
must take place, the size of the transaction and other
limits.
5. ECBV will give written confirmation of its approval by
facsimile no later than close of business on the next
business day following the day on which approval was given.
APPROVED GUIDELINES
Approved Securities shall be those securities of whatever nature,
designated specifically or generally by ECBV from time to time.
The only person currently authorised to designate a security as
an Approved Security for the purposes of Permitted Trading is Mr.
Roelof Veenstra. Mr. Veenstra may authorise other employees of
ECBV to make such designation from time to time.
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Exhibit 3
OPTION AGREEMENT
TO: EXTRA CLEARING B.V.
Papenbroekssteeg 2
Amsterdam, 1012 NW
Netherlands
1. Grant of Option
In consideration of the payment by you today to the
undersigned of U.S. $890,000 and for other good and valuable
consideration (the receipt and sufficiency of which are hereby
acknowledged by the undersigned), the undersigned grants to you,
subject to the terms and conditions hereof, an irrevocable option
(the "Option") to purchase up to 890,000 shares of common stock
(the "Optioned Shares") in the capital of Intek Diversified
Corporation ("Intek"), at a price of U.S. $1.50 per Optioned
Share. The Option with respect to 436,000 of the Optioned Shares
shall be exercisable at any time and from time to time during the
period commencing on the date hereof up to and including, but not
after, 4:30 p.m. (Toronto time) on the fifth anniversary of the
date set out below. The Option with respect to 454,000 of the
Optioned Shares shall be exercisable at any time and from time to
time during the period commencing 90 days from the date hereof up
to and including, but not after, 4:30 p.m. (Toronto time) on the
fifth anniversary of the date set out below. The periods during
which the Option is exercisable as aforesaid are herein
collectively referred to as the "Option Period". Following the
expiry of the Option Period, the Option shall forthwith
terminate and be of no further force or effect as to such of the
Optioned Shares in respect of which the Option has not then been
exercised.
2. Exercise of Option
(a) Subject to the terms and conditions hereof, this Option
shall be exercisable at any time and from time to time during the
Option Period by you giving written notice (a "Notice of
Exercise") to the undersigned by personal delivery to the address
specified below or by transmittal by telecopier at the number
specfied below or to such other address or telecopier number as
the undersigned may from time to time notify you in writing,
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which Notice of Exercise shall specify therein the number of
Optioned Shares in respect of which the Option is being
exercised. Upon delivery of the Notice of Exercise as aforesaid,
the undersigned (hereinafter in this paragraph 2 referred to as
the "Vendor") will sell and you or your assigns (hereinafter in
this paragraph 2 referred to as the "Purchaser") shall purchase
the number of Optioned Shares set forth in the Notice of Exercise
(the "Purchased Shares"). The said sale shall be closed at 10:00
a.m. on the fifth business day following delivery of the Notice
of Exercise at the offices of the Vendor or at such other time
and place as it is agreed between the Purchaser and the Vendor
(such place and time are for the purposes of subparagraph 2(b)
referred to as the "Place of Closing" and the "Time of Closing",
respectively). Nothing herein contained or done pursuant hereto
shall obligate you to purchase and/or pay for any Optioned Shares
except those Optioned Shares in respect of which you shall have
exercised the Option in the manner hereinbefore provided.
(b) At the Place of Closing at the Time of Closing:
(i) the Purchaser shall deliver to the Vendor a
certified cheque payable to or to the order of the
Vendor in the amount of the purchase price payable
by the Purchaser for the Purchased Shares; and
(ii) the Vendor shall deliver to the Purchaser:
(A) a receipt for the certified cheque referred
to in clause 2(b)(i);
(B) a share certificate or certificates
representing the Purchased Shares duly
endorsed in blank for transfer (with
signatures guaranteed by a Canadian chartered
bank);
(C) a representation and warranty from the
Vendor
(1) that the Vendor is, at the Time of
Closing, the beneficial owner of the Purchased
Shares with good and marketable title thereto,
and clear of all mortgages, liens, charges,
security interests, adverse claims, pledges,
encumbrances, options, rights, privileges,
agreements and demands whatsoever (except those
created pursuant to the Pledge Agreement
referred to in paragraph 5 hereof);
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(2) that the sale by the Vendor to the
Purchaser does not contravene any applicable
laws, regulations or policies of securities
regulatory authorities in the United States or
Canada, nor any of the by-laws, regulations or
policies of the National Association of
Securities Dealers Automated Quotation System or
any other applicable stock exchange; and
(3) that, in the circumstances where part
or all of the Purchased Shares are restricted
shares of common stock, the Vendor does not,
after taking into account the sale of Purchased
Shares, beneficially own any registered and
freely tradeable shares of common stock in the
capital of Intek.
3. If All Shares Not Purchased
If you or your assigns exercise the Option in respect of a
lesser number of Optioned Shares than the total number of
Optioned Shares referred to in this agreement, you or your
assigns shall retain the Option to purchase during the Option
Period the remaining Optioned Shares referred to in this
agreement but not purchased, subject to the terms and conditions
set forth herein.
4. Registered/Unregistered Shares
Each of you and the undersigned acknowledges that, as of the
date hereof, the undersigned owns only 200,000 registered and
freely tradeable shares of common stock in the capital of Intek
and that the remainder of the common stock of Intek owned by the
undersigned is restricted and not freely tradeable under
applicable securities laws of the United States. Further, each
of us recognizes that the undersigned may acquire additional
freely tradeable stock during the Option Period or exercise
rights or opportunities available to it during the Option Period
to make a secondary offering of restricted common stock it then
owns in the capital of Intek and to have such shares registered
under applicable United States securities laws, with the result
that any such stock would thereafter become freely tradeable.
Accordingly, the undersigned hereby agrees that the 200,000
registered and freely tradeable shares of common stock of Intek
currently owned by the undersigned shall be retained,
unencumbered by the undersigned and shall form a part of the
stock pledged to you pursuant to the Pledge Agreement (as defined
below). The undersigned further agrees to maintain beneficial
ownership of such 200,000 shares of common stock of Intek,
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together with sufficient other shares of common stock of Intek
owned by the undersigned which together with such 200,000 shares
of common stock of Intek equal, at all times, 890,000 shares of
common stock of Intek, less that number of shares in the common
stock of Intek which on a cumulative basis have been purchased
pursuant to partial exercise of the Option from time to time. In
the event that the undersigned, at any time, acquires additional
shares of common stock of Intek which are registered and freely
tradeable pursuant to applicable securities laws or in the event
that shares of common stock of Intek owned at any time by the
undersigned become registered and freely tradeable pursuant to
applicable securities laws (any registered and freely tradeable
shares of common stock in the capital of Intek in excess of the
200,000 registered and freely tradeable shares (the "200,000
Freely Tradeable Shares") referred to in the immediately
preceding sentence are referred to herein as the "New Freely
Tradeable Shares"), then, in either case, the undersigned shall
promptly give notice thereof to you, which notice shall specify
the number of New Freely Tradeable Shares then owned by the
undersigned and you shall have 10 business days from the date of
receipt of such notice to exercise the Option in the manner
specified herein with respect to as much registered and freely
tradeable shares of common stock of Intek (including New Freely
Tradeable Shares) as the undersigned owns at the relevant time.
In the event that you do not exercise the Option with respect to
the New Freely Tradeable Shares within such 10 business day
period, the undersigned shall not be required to retain any or
all of such New Freely Tradeable Shares and shall be entitled to
sell any or all of such New Freely Tradeable Shares to other
purchasers. Provided, however, that the provisions of the
immediately preceding sentence shall not detract from your
ability to exercise at any time the Option with respect to any
New Freely Tradeable Shares as are owned by the undersigned at
the time of delivery by you to the undersigned of a Notice of
Exercise and further provided that the provisions of the
immediately preceding sentence shall not detract from the
obligations of the undersigned contained in the third and fourth
sentences of this paragraph 4. Provided further that only to the
extent the undersigned does not beneficially own registered and
freely tradeable common stock in an amount sufficient to fulfill
the exercise by you of your Option will the undersigned be
entitled to fulfill its obligations hereunder by delivering
restricted stock. Notwithstanding the foregoing, you may not
exercise the Option in respect of any New Freely Tradeable Shares
unless your exercise of the Option in respect of the New Freely
Tradeable Shares also includes the exercise of the Option in
respect of all or the remaining portion of the 200,000 Freely
Tradeable Shares or the Option as it relates to the 200,000
Freely Tradeable Shares has been previously fully exercised.
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5. Security
As security for the performance by the undersigned of its
obligations herein, including without limitation, its obligation
to deliver Optioned Shares in accordance with the terms hereof,
the undersigned hereby agrees to pledge in your favour 890,000
common shares of Intek with respect to which the representations
and warranties of the Vendor specified in subclause 2(b)(ii)(C)
are correct today (except for certain encumbrances of which you
are aware and in respect of which the undersigned shall deliver
releases within 45 days of the date hereof) and to deposit with
you or your agent share certificates duly endorsed in blank (with
signature guaranteed by a Canadian chartered bank) representing
such pledged shares, all in accordance with the terms of a pledge
agreement (the "Pledge Agreement"), the form of which is annexed
hereto as Schedule A.
6. Subdivision, Consolidation and Reclassification of Underlying
Shares
(a) In the event of any subdivision, redivision or other
change of the common stock of Intek at any time prior to the
expiry of the Option Period into a greater number of common
stock, the undersigned shall deliver at the time of any exercise
thereafter of the Option, such additional number of shares of
common stock as would have resulted from such subdivision,
redivision or other change if such exercise of the Option could
have been and had been effected immediately prior to the date of
such subdivision, redivision or other change.
(b) In the event of any consolidation or other change of
the common stock of Intek at any time prior to the expiry of the
Option Period into a lesser number of common stock, the number of
shares of common stock of Intek deliverable by the undersigned on
any exercise thereafter of the Option shall be reduced to such
number of shares of common stock as would have resulted from such
consolidation or other change if such exercise of the Option
could have been and had been effected immediately prior to the
date of such consolidation or other change.
(c) In the event of any reclassification of the common
stock of Intek or a capital reorganization of Intek other than as
described in subparagraphs 6(a) or (b) or a consolidation,
amalgamation or merger of Intek with or into any other body
corporate at any time prior to the expiry of the Option Period,
the undersigned shall deliver at the time of any exercise
thereafter of the Option, in lieu of the number of Optioned
Shares otherwise deliverable to you upon such exercise, the
number of shares of common stock or other securities of Intek or
of the body corporate resulting from such merger, amalgamation or
consolidation that you would have been entitled to receive upon
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such reclassification, capital reorganization, consolidation,
amalgamation or merger, if such exercise of the Option could have
been and had been effected immediately prior to the date of such
reclassification, capital reorganization, consolidation,
amalgamation or merger.
(d) On the happening of each and every event described in
subparagraphs 6(a) to 6(c) above, the applicable provisions of
this agreement and the Option created hereby shall be deemed to
be amended accordingly.
7. Representations and Warranties
The undersigned represents and warrants in your favour, and
acknowledges that you are relying on such representations and
warranties in paying the amount referred to in paragraph 1 hereof
and in entering into this agreement and the Pledge Agreement,
namely: (i) that the granting of the Option to purchase the
Optioned Shares and the sale of the Optioned Shares by the
undersigned does not, and will not, contravene any applicable
laws, regulations or policies of securities regulatory
authorities in the United States or Canada, nor any of the by-
laws, regulations or securities related policies of the National
Association of Securities Dealers Automated Quotation System to
any other applicable stock exchange; and (ii) that the
undersigned is the beneficial owner of 200,000 registered and
freely tradeable shares of common stock in the capital of Intek
and of in excess of 690,000 unregistered shares in the capital of
Intek.
8. Filings
Each of you and the undersigned agrees to make, in a timely
fashion, all necessary registrations, filings or notifications as
may be required by applicable securities regulatory bodies or
stock exchanges.
9. Assignment, Etc.
This agreement shall be binding upon and enure to the
benefit of our successors and assigns except that the undersigned
shall not have the right to assign its rights or obligations
hereunder or any interest herein, but you shall have the right to
assign this agreement and the Option hereby created, in whole or
in part, without the consent of the undersigned, provided that
such assignment shall not be made to any party who, by virtue of
exercising its rights under this agreement, would contravene any
applicable securities laws, regulations or policies in the United
States or Canada, nor any of the by-laws, regulations or
securities related policies of the National Association of
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Securities Dealers Automated Quotation System or any other
applicable stock exchange.
10. Time of Essence
Time shall be of the essence hereof.
11. Governing Law
This agreement and our relationship hereunder shall be
governed by the laws of the Province of Ontario and you and the
undersigned attorn to the jurisdiction of the courts of the
Province of Ontario.
12. U.S. Funds
All dollar amounts referred to herein shall refer to lawful
money of the United States.
DATED as of this 31st day of March, 1995.
SIMMONDS COMMUNICATIONS LTD.
Suite 1050, 5255 Yonge Street
Willowdale, Ontario
M2N 6P4
Telephone: (416) 221-1900
Telefax: (416) 221-3800
by_________________________________
David O'Kell
Executive Vice-President
Accepted and agreed to this ____ day of March, 1995:
EXTRA CLEARING B.V.
Papenbroekssteeg 2
Amsterdam, 1012 NW
Netherlands
Telephone: 011-31-20-626-5911
Telefax: 011-31-20-626-9776
by________________________________
Roelof Veenstra
Managing Director
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12. U.S. Funds
All dollar amounts referred to herein shall refer to lawful
money of the United States.
DATED as of this 31st day of March, 1995.
SIMMONDS COMMUNICATIONS LTD.
Suite 1050, 5225 Yonge Street
Willowdale, Ontario
M2N 6P4
Telephone: (416) 221-1900
Telefax: (416) 221-3800
by__________________________
David O'Kell
Executive Vice-President
Accepted and agreed to this 31st March, 1995:
EXTRA CLEARING B.V.
Papenbroekssteeg 2
Amsterdam, 1012 NY
Netherlands
Telephone: 011-31-20-626-5911
Telefax: 011-31-20-626-9776
by______________________________
Roelof Veenstra
Managing Director
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Exhibit 4
To: Extra Clearing B.V.
Rokin Plaza
Papenbroekssteeg 2
1012 NW Amsterdam
Security Agreement
SECURITY INTEREST
1. We, Octagon Investments Limited (Borrower), having our
registered office at PO Box 112, La Tour Grand House, Lower
Pollet, St. Peter Port, Guernsey, confirm that all notes, bonds,
shares, and other debentures and securities whatsoever (and
whether bearer or registered) held by you (or on your behalf)
from time to time (Approved Securities), in connection with or
arising from Permitted Trading (as defined in the Facility
Letter), are to be held and retained by you (or on your behalf)
for payment of the amounts referred to below. The Facility
Letter is the letter agreement of even date pursuant to which you
have agreed to make certain financial facilities available to us.
The Trading Notice is the Trading Notice referred to in the
Facility Letter and the Net Liquidated Balance means as defined
in the Trading Notice.
2. We, as beneficial owner, hereby:
(a) charge as a first fixed charge the Approved Securities; and
(b) pledge our interest in the Approved Securities; and
(c) constitute a lien over the Approved Securities,
with and as security for, the payment to you of all amounts
whatsoever which may become payable by us under the Facility
Letter or any document, arrangement or agreement related thereto,
or under this Security Agreement (all and any such amounts the
Secured Amounts), to the intent that the security constituted
hereby shall also comprise all other securities and all rights,
moneys and property whatsoever which may at any time be derived
from, accrue on or be offered in respect of, any of the Approved
Securities for the time being, whether by way of redemption,
exchange, conversion, rights, bonus, capital reorganisation or
otherwise howsoever; and so that the income on all such
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securities, rights, moneys and property shall be deposited in the
Account (as defined in the Facility Letter) PROVIDED THAT you
shall release such Approved Securities from the security
constituted hereby which are (a) required to settle a transaction
entered into as part of Permitted Trading and which has been
entered into in accordance with the Trading Notice or any other
agreement made between us in respect thereof from time to time;
or (b) not included in the calculation of the Net Liquidated
Balance (valued in accordance with the Trading Notice) for the
purpose of determining the Maximum Amount at such time and the
release of which will not thereby breach any of our obligations
under the Facility Letter.
SET-OFF
3. You may at any time and from time to time without prior
notice or demand but only following the occurrence of an Event of
Default under the Facility Letter set off, transfer or apply any
amounts or other liabilities due from you to us (including
without limitation cash deposits and credits contained in the
Account) (relevant liabilities) (whether or not the relevant
liabilities shall have become due) in discharge and satisfaction
of the Secured Amounts and you may retain the relevant
liabilities and thereafter apply the relevant liabilities or any
part thereof in or towards satisfaction of the Secured Amounts as
such time as you shall, in your discretion, determine PROVIDED
THAT where the Secured Amounts (or any part thereof) are in a
currency or currencies (the original currencies) different from
that of the relevant liabilities, you may apply the relevant
liabilities (or any part thereof) in purchasing the original
currency at the rate of exchange on the date the relevant
liabilities are applied towards the discharge of the Secured
Amounts; and for the purposes of this course, rate of exchange
means the rate at which you are able on the relevant date to
purchase the original currency with the other currency.
WARRANTIES AND UNDERTAKINGS
4. We warrant that we are the absolute owners of all the
Approved Securities free from all mortgages, pledges, charges,
liens, encumbrances, rights of set-off, equities and claims
whatsoever (each a security interest) other than as constituted
by this Security Agreement, and that all the Approved Securities
are fully paid-up; and we undertake that, during the continuance
of this Security Agreement, we shall remain the absolute owners
as aforesaid, and that we shall:
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(a) in so far as any of the same are not deposited with, or
transferred to you in accordance with the requirements of
Permitted Trading, deposit with and/or transfer to you (as
applicable) all of such securities, rights, moneys and other
property as are referred to in paragraph 2 above (or the
documents relating to them) as soon as they are received;
(b) pay to you, upon demand, the amount of all expenses which
you may incur in, about or with a view to perfecting or
enforcing this security or otherwise in connection herewith,
together with interest on the amount of any payments made by
you in respect of such expenses at the rate specified in
paragraph 11.5 of the Facility Letter from the date of your
payment until the date you are actually repaid by us and as
well after as before judgment, and so that any amount
payable by us hereunder may be debited to any account which
we have with you;
(c) promptly pay all calls and other payments which may become
due in respect of the Approved Securities and so that, in
the event of our default, you may do so on our behalf and
paragraph (b) above shall apply accordingly;
(d) in so far as any of the same are not otherwise sent or
delivered to you, forward to you all notices, reports,
accounts, circulars and other documents which are sent to
the holders of the Approved Securities as soon as they
are received;
(e) take such action as you may, in your absolute discretion,
direct in the event that it becomes possible (whether
under the terms of issue of the Approved Securities, a
capital reorganisation or otherwise) to convert or exchange
the Approved Securities or have them repaid or in the event
that any take-over offer is made in respect of the Approved
Securities or any proposal is made for varying or abrogating
any rights attaching to them;
(f) forthwith exercise all voting and other rights and powers
which may at any time be exercisable by the holders of the
Approved Securities as you may, and only as you may, in your
absolute discretion, direct, but so that, subject to
subparagraph (c) above, this subparagraph shall apply only
after the occurrence of an Event of Default under the
Facility Letter;
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(g) forthwith sign, seal deliver and complete all transfers,
renunciations, proxies, mandates, assignments, deeds and
documents and do all acts and things which you may, in your
absolute discretion, specify for enabling or assisting you
to perfect your title to the Approved Securities, to vest
the Approved Securities in yourselves or your nominees, to
exercise (or enable your nominees to exercise) any rights or
powers attaching to the Approved Securities or (after the
Secured Amount become due) to sell or dispose of the
Approved Securities or otherwise to enforce any of your
rights hereunder.
5. We shall not:
(a) create, agree to create or permit to exist any security
interest (however ranking in point of priority) of any
nature whatsoever (including such as arises by operation of
law or any enactment) in, over or affecting the Approved
Securities; and
(b) be entitled to transfer, assign, convey, declare a trust
over or otherwise dispose of any of the Approved Securities
other than in accordance with Permitted Trading.
POWER OF ATTORNEY
6. For the purpose of securing your interest in the Approved
Securities and the performance of our obligations to you under
this Security Agreement and the Facility Letter, we irrevocably
and by way of security appoint you our attorney (with full power
to appoint substitutes and to sub-delegate), on our behalf and in
our name or otherwise, at any time and from time to time, to
sign, seal, deliver and complete all transfers, renunciations,
proxies, mandates, assignments, deeds and documents and do all
acts and things which you may, in your absolute discretion,
consider to be necessary or expedient for enabling or assisting
you to exercise any of your powers, rights or discretions
hereunder or to do anything which we are obliged to do under this
Security Agreement or the Facility Letter.
POWER OF SALE
7. If you declare any of the Secured Amounts to be immediately
due and payable or if we should fail on demand to pay any sum due
to you under this Security Agreement or otherwise fail to comply
with any of our obligations under this Security Agreement, the
Secured Amounts shall thereupon become due; and the provisions of
the Law of Property Act 1925 relating to the power of sale
conferred by that Act are hereby varied so that section 103
thereof shall not apply, and such provisions are hereby extended
so as to authorise you, then or any time thereafter and without
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prior notice to us, to sell or otherwise dispose of all the title
to and interest in the Approved Securities for such consideration
(which may comprise or include shares or debentures), upon such
terms and generally in such manner as you may, in your absolute
discretion, think fit, and so that you shall not be liable for
any loss or damage occasioned by such sale or disposal, unless
caused by your own gross negligence or wilful default, and so
also that you shall be entitled to apply the proceeds of sale or
disposal in or towards the discharge of Secured Amounts in such
manner as you may in your absolute discretion think fit, with any
surplus being paid to ourselves or any other person who may be
entitled to it.
8. Section 93 of the Law of Property Act 1925 (restriction on
consolidation of mortgages) shall not apply in relation to the
security constituted hereby; and this security is in addition to
and shall not affect or be merged in, or in any way exclude or
prejudice any other security interest, right of recourse, set-
off, combination or other right or interest whatsoever which you
may now have or at any time hereafter hold or have as regards
ourselves or the Secured Amounts.
GENERAL PROVISIONS
9. In this Security Agreement:
(a) references to yourselves or ourselves include references to
any person for the time being deriving title under you or
us;
(b) references to this Security Agreement and the Facility
Letter are references to the same as from time to time
varied in any manner or respect whatsoever, and in
particular by variations which increase or otherwise affect
our liability thereunder;
(c) references to the Approved Securities include references to
all and any of them.
10. The rights and powers conferred on you by this Security
Agreement are cumulative, may be exercised as often as you
consider appropriate and are in addition to your rights and
powers under the general law. Your rights (whether arising
hereto or under the general law) shall not be capable of being
waived or varied otherwise than by express waiver or variation in
writing. In particular, any failure to exercise or any delay in
exercising any such rights shall not operate as a variation or
waiver of that or any other such right; any defective or partial
exercise of such right shall not preclude any other or further
exercise of that or any other such right; and no act or course of
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conduct or negotiation on your part or on its behalf shall in any
way preclude you from exercising any such right or constitute a
suspension or variation of any such right.
11. In any proceedings relating to this Security Agreement or
the Secured Amount a statement as to the amount of the Secured
Amount or as to any amount due to you hereunder which is
certified as being correct by an officer of you shall be prima
facie evidence of the amount thereof or that such amount is in
fact due.
12. If you receive notice of any subsequent security interest
affecting the Approved Securities:
(a) you may open a new account or accounts with us and if you do
not open a new account, you shall nevertheless be treated as
if you had done so at the time when you received such
notice; and
(b) all payments made by us to you after you receive such notice
shall be credited or be treated as having been credited to
the new account and in no circumstances whatsoever shall
operate to reduce the amount due from us to you at the time
when you received the notice.
GOVERNING LAW AND JURISDICTION
13.1 This Security Agreement is governed by, and shall be
construed in accordance with, the laws of England.
13.2 For your benefit, we agree that the courts of England are
to have non-exclusive jurisdiction to settle any disputes which
may arise in connection with the legal relationships established
by this Security Agreement (including, without limitation, claims
for set-off or counterclaim) or otherwise arising in connection
with this Security Agreement.
13.3 We shall at all times maintain an agent for service of
process in England. Such agent shall be Octagon Analytics
Limited of 28 Gilston Road, London SW10 9SS and any writ,
judgement or other notice of legal process shall be sufficiently
served on us if delivered to such agent at its address for the
time being. We undertake not to revoke the authority of the
above agent and if, for any reason, such agent no longer serves
as our agent to receive service of process, we shall promptly
appoint another such agent and advise you thereof.
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NOTICE
14.1 Any notice, communication or demand under or in connection
with this Security Agreement shall be in writing and shall be
delivered personally, or by post, or fax to the addresses or fax
number as follows:
Borrower: Maison Allaire
Smith Street
St. Peter Port
Guernsey
Reference: BAE Saunders
Fax: 0481 729 331
Lender: Rokin Plaza
Papenbroekssteeg 2
1012 NW Amsterdam
Reference: Roelof Veenstra
Fax: 010 31 20 626 9776
or such other address or fax number as the recipient may have
notified to the other party in writing.
14.2 Proof of posting or despatch of any notice or communication
to us all shall be deemed to be proof of receipt:
(a) in the case of a letter, on the third day after posting;
(b) in the case of a fax, two hours immediately following the
time of despatch.
Dated 23 September 1993
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THE COMMON SEAL of OCTAGON )
INVESTMENTS LIMITED was hereunto )
affixed in the presence of: )
Director _____________________________
GUERNSEY ADMINISTRATIVE SERVICES LTD
Secretary_________________________SECRETARIES
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Exhibit 5
PLEDGE AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 31st day of
March, 1995.
B E T W E E N:
SIMMONDS COMMUNICATIONS LTD.,
a corporation incorporated under the
laws of the Province of Ontario,
(hereinafter referred to as "Simmonds"),
OF THE FIRST PART,
- and -
EXTRA CLEARING B.V.,
a corporation incorporated under the
laws of the Netherlands
(hereinafter referred to as "EC"),
OF THE SECOND PART,
- and -
THE R-M TRUST COMPANY,
a trust company duly authorized to carry
on business in the Province of Ontario
(hereinafter referred to as "R-M Trust"),
OF THE THIRD PART.
WHEREAS, pursuant to the terms of an option agreement
(the "Option Agreement") made as of March 31, 1995, between
Simmonds and EC, Simmonds granted EC the option to purchase up to
890,000 shares of common stock of Intek Diversified Corporation
("Intek") beneficially owned by Simmonds;
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AND WHEREAS, as security for the due and punctual
performance of all obligations of any kind or nature now or at
any time and from time to time owing by Simmonds to EC pursuant
to or by virtue of the Option Agreement, Simmonds has agreed to
pledge 890,000 shares of common stock in the capital of Intek
(the "Share Collateral") to EC and to enter into this Agreement
and to perform its obligations hereunder;
AND WHEREAS R-M Trust has agreed to act as collateral
agent for EC and to hold certificates representing the Share
Collateral as agent for EC pursuant to the terms and conditions
of this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in
consideration of the premises hereof and for other good and
valuable consideration (the receipt and sufficiency of which are
hereby acknowledged by each of the parties), the parties hereby
covenant and agree as follows:
ARTICLE I
INTERPRETATION
1.1 Definitions: In this Agreement and any amendments
hereto, the following terms shall have the following meanings,
respectively:
(a) "Act" means the Personal Property Security Act
(Ontario), as now in effect, or any legislation that
may be substituted therefor, and as the same may from
time to time hereafter be amended;
(b) "Business Day" means a day of the year other than a
Saturday, a Sunday or a day observed as a statutory
holiday in Ontario or the Netherlands;
(c) "Obligations" means all liabilities and obligations of
any kind or nature now or at any time and from time to
time owing by Simmonds to EC pursuant to or by virtue
of this Agreement and the Option Agreement;
(d) "Collateral" means the Share Collateral and any other
securities or instruments deposited or delivered by
Simmonds with or to EC or R-M Trust hereunder;
(e) "Event of Default" has the meaning ascribed thereto in
Section 6.1;
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(f) "Proceeds" means identifiable or traceable personal
property in any form (including money) derived,
directly or indirectly from any dealing with the
Collateral or proceeds therefrom and includes any
payment that indemnifies or compensates for loss or
damage to the Collateral or Proceeds therefrom;
(g) "Security Interest" has the meaning ascribed thereto in
Section 2.1; and
(h) All capitalized terms which are not otherwise defined
herein shall have the meanings ascribed to them,
respectively, in the Option Agreement.
1.2 United States Funds: Unless otherwise indicated, all
dollar amounts referred to herein shall refer to lawful money of
the United States.
1.3 Headings, Etc.: The division of this Agreement into
articles, sections and subsections and other subdivisions and the
insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation hereof.
1.4 Rules of Construction: Unless the context otherwise
requires,
(a) words importing the singular number only shall include
the plural and vice versa and words importing the use
of either gender shall include both genders and words
importing individuals shall include firms and
corporations and vice versa; and
(b) reference herein to any agreement, indenture or other
instrument in writing means such agreement, indenture
or other instrument in writing as amended, modified or
supplemented from time to time.
1.5 Governing Law: This Agreement shall be construed in
accordance with the laws of the Province of Ontario and shall be
treated in all respects as an Ontario contract.
1.6 Severability: If any provision herein contained is
determined to be void, voidable or unenforceable, in whole or in
part, by a court of competent jurisdiction, such determination
shall not effect or impair and shall be deemed not to effect or
impair the validity of any other covenant or provision herein
contained and each such covenant and provision is hereby declared
to be separate, severable and distinct.
1.7 Time: Time shall be of the essence of this Agreement.
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ARTICLE II
CREATION OF SECURITY INTEREST
2.1 Security Interest: As continuing security for the due
and timely performance by Simmonds of the Obligations, Simmonds
hereby grants a security interest in and pledges the Collateral
to and in favour of EC (the said security interest and pledge of
the Collateral being hereinafter referred to as the "Security
Interest"). EC acknowledges that it has no rights in the
Collateral other than the Security Interest and its rights
hereunder and under the Option Agreement.
2.2 Proceeds: The Security Interest shall extend to the
Proceeds.
2.3 Attachment and Value: Simmonds acknowledges and agrees
that the Security Interest is intended to attach to the
Collateral upon the later of the date of execution of this
Agreement, or the date value is given by EC.
ARTICLE III
PROVISIONS RELATING TO COLLATERAL
3.1 Collateral Agent, Deposit of Certificates and Escrow
Procedures: EC hereby appoints R-M Trust to act, and R-M Trust
hereby agrees to act, as agent on behalf of EC to hold the share
certificates evidencing the Share Collateral as agent for and on
behalf of EC. As soon as practicable, Simmonds shall deliver to
EC's counsel share certificates evidencing 200,000 shares of
registered and freely tradeable common stock of Intek and share
certificates evidencing 690,000 shares of common stock of Intek,
which share certificates shall be held by EC's counsel in escrow,
all in accordance with the terms of an escrow agreement (the
"Escrow Agreement") by and between EC, Simmonds and EC's counsel,
the form of which is annexed hereto as Schedule 1. The share
certificates evidencing the Share Collateral shall be released
from escrow according to the provisions of the Escrow Agreement
and shall be held by R-M Trust as agent for EC.
3.2 Transferability: All Collateral shall be freely
transferable by delivery or shall be accompanied by any and all
endorsements, powers of attorney or instruments necessary to
permit the transfer, disposition and, if applicable, the re-
registration of the Collateral as may be required as a result of
EC exercising its remedies under subsection 6.2(c). Each of
the parties hereto acknowledges that the certificates evidencing
the Share Collateral are being held by R-M Trust as agent for EC
to perfect the Security Interest created by this Agreement in
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favour of EC and that R-M Trust may also hold such certificates
on behalf of any assignee(s) of EC to perfect such assignee's(s')
Security Interest.
3.3 Distributions and Receipts on Collateral: Unless and
until an Event of Default shall have occurred and be continuing,
Simmonds shall be entitled to receive all interest, dividends or
other like payments or distributions (whether in cash, security
(as such term is defined in subsection 1(1) of the Act) or other
property) at any time payable on or with respect to the
Collateral and unless and until an Event of Default shall have
occurred and be continuing, all such interest, dividends or other
like payments or distributions at any time payable to Simmonds on
or with respect to the Collateral received by EC or R-M Trust
shall forthwith be paid or delivered by EC or R-M Trust to
Simmonds or as it may direct, free and clear of the Security
Interest.
3.4 Voting, Etc. of Collateral: Unless and until an Event
of Default shall have occurred and be continuing, Simmonds shall
be entitled to vote the Collateral and to give consents, waivers,
notices and ratifications, and to take other action in respect of
the Collateral, provided however, that no vote shall be cast or
consent, waiver, notice or ratification given or action taken
which would impair the Collateral or be inconsistent with or
violate any provision of this Agreement or the Option Agreement.
3.5 Rights of EC: It is understood and agreed that EC, at
any time and from time to time when an Event of Default shall
have occurred and be continuing with respect to the Obligations,
may enforce any and all of the rights of Simmonds with respect to
the Collateral, including those rights described in Section 3.4.
ARTICLE IV
POSSESSION OF COLLATERAL
4.1 Duty of Care: R-M Trust shall not have any duty of
care whatsoever with respect to the Collateral other than to use
the same care in the custody and preservation thereof as it would
with its own property. Neither EC nor R-M Trust need take any
steps of any nature to defend or preserve the rights of Simmonds
therein against the claims or demands of others provided that EC
or R-M Trust, as the case may be, shall immediately give notice
to Simmonds of any such claim or demand of which it becomes aware
and shall provide Simmonds with a reasonable opportunity to
defend or contest the same.
4.2 R-M Trust as Collateral Agent: R-M Trust agrees to
act, in its capacity as agent on behalf of EC, upon such
instructions with respect to the shares held by R-M Trust which
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form part of the Share Collateral, as EC may, in its sole
discretion, direct from time to time provided that such
instructions do not violate the terms of this Agreement and
provided that:
(a) R-M Trust shall not be responsible or liable in any
manner whatever for the sufficiency, correctness,
genuiness or validity of any security deposited with
it;
(b) R-M Trust shall be protected in acting upon any written
notice, request, waiver, consent, receipt, statutory
declaration or other paper or document furnished to it,
and signed by EC, not only as to its due execution and
the validity and effectiveness of its provisions, but
also as to the truth and acceptability of any
information therein contained;
(c) except for acts of neglignece or misconduct, R-M Trust
shall not be liable for any act done or step taken or
omitted by it in good faith;
(d) R-M Trust shall have no duties except those which are
expressly set forth herein, and it shall not be bound
by any notice of claim or demand with respect thereto,
or any waiver, modification, amendment, termination or
rescission of this Agreement, unless received in
writing, and signed by the parties hereto, and if R-M
Trust's duties herein are affected, unless it shall
have given its prior written consent thereto;
(e) R-M Trust may, at its own discretion, consult with
counsel to the parties hereto and seek instructions
with respect to any matter pertaining to its duties
hereunder; and
(f) in the event of a dispute between the parties with
respect to the matters herein, R-M Trust may, at its
option, deposit all documents and certificates held by
it hereunder with a court of competent jurisdiction and
seek directions from such court.
4.3 Collateral Held in Ontario: Subject to release
pursuant to section 4.4, R-M Trust shall hold the Collateral in
Ontario.
4.4 Release of Collateral: R-M Trust, EC and Simmonds
agree that R-M Trust shall not release the Collateral, or any
part thereof, to EC or any assignee unless (a) the Option (as
defined in the Option Agreement) has been exercised and
payment thereof made, and only to the extent of such exercise and
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payment, or (b) an Event of Default has occurred which has not
been cured within any applicable grace period.
4.5 Indemnification of R-M Trust: Each of Simmonds and EC
agrees to indemnify and save harmless R-M Trust from and against
any and all liabilities and claims made against it in respect of
any action or thing it may take or do or omit to take or do in
connection herewith except as a result of R-M Trust's wilful
neglect or default hereunder. This indemnity shall survive the
termination of this Agreement.
4.6 Consent of Simmonds: Simmonds consents to the
appointment of R-M Trust to act as collateral agent on behalf
of EC and to the appointment by EC of R-M Trust as agent to
hold the Collateral on behalf of EC or any assignee(s) of EC.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 Representations and Warranties: Simmonds hereby
represents and warrants to EC as follows and acknowledges that
EC is relying on such representations and warranties in
advancing funds to Simmonds, namely, that:
(a) it has not entered into any agreement with or granted
to any person, firm or corporation any option or any
right or privilege capable of becoming an agreement
or option to acquire any right or interest in any of
the Share Collateral (other than as created by this
Agreement and the Option Agreement);
(b) all of the Share Collateral is beneficially owned by
Simmonds free and clear of all liens, charges, pledges
and encumbrances (other than as created by this
Agreement and the Option Agreement and other than
encumbrances in respect of which Simmonds shall
deliver releases within 45 days of the date hereof);
(c) it has the full right and legal capacity to enter into
this Agreement and to grant to EC the Security Interest
in the Collateral;
(d) this Agreement has been duly executed and delivered by
it and constitutes a legal, valid and binding
obligation of it enforceable against it in accordance
with its terms; and
(e) the pledge and delivery of the Share Collateral
pursuant to this Agreement creates a valid first pledge
of and a perfected security interest in such Share
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Collateral and the Proceeds, subject to no prior
pledge, lien, mortgage, hypothecation, security
interest, charge, option or encumbrance, other than
encumbrances in respect of which Simmonds shall deliver
releases within 45 days of the date hereof.
5.2 Covenants of Simmonds: Simmonds hereby covenants and
agrees with EC as follows:
(a) in the event of any subdivision, redivision or other
change of the shares of common stock of Intek at any
time prior to the termination of this Agreement into a
greater number of shares of common stock, Simmonds
shall, as soon as practicable following receipt
thereof, deliver to R-M Trust (or as EC may otherwise
direct) such additional number of shares of common
stock as would have resulted had such subdivision,
redivision or other change occurred immediately prior
to the execution of this Agrement; and
(b) in the event of any reclassification of the common
stock of Intek or a capital reorganization of Intek
other than as described in Section 5.2(a) or 5.3 or a
consolidation, amalgamation or merger of Intek with or
into any other body corporate at any time prior to the
termination of this Agreement, Simmonds shall deliver
to R-M Trust (or as EC may otherwise direct), in
substitution for the Share Collateral, the number of
shares of common stock or other securities of Intek or
of the body corporate resulting from such merger,
amalgamation or consolidation that R-M Trust, as agent
on behalf of EC would have been entitled to hold under
this Agreement if such reclassification, capital
reorganization, consolidation, amalgamation or merger
had been effected immediately prior to the execution of
this Agreement.
5.3 Covenant of R-M Trust: In the event of any
consolidation or other change of the common stock of Intek at any
time prior to the termination of this Agreement into a lesser
number of shares of common stock, the number of shares of common
stock of Intek held by R-M Trust, as agent on behalf of EC shall
be reduced to such number of shares of common stock as would have
resulted had such consolidation or other change occurred
immediately prior to the execution of this Agreement. R-M Trust,
as agent on behalf of EC shall, as soon as practicable following
receipt thereof, deliver to Simmonds certificates representing
the number of excess shares as a result of such consolidation or
other change.
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ARTICLE VI
DEFAULT AND REMEDIES
6.1 Events of Default: The occurrence of any one or more
of the following events (each such event being herein referred to
as an "Event of Default") shall constitute a default under this
Agreement:
(a) if Simmonds shall neglect to observe or perform any
covenant or condition herein contained or in the Option
Agreement on its part to be observed or performed and,
after notice in writing has been given by EC (or its
assignee(s)) to Simmonds specifying such defualt and
requiring Simmonds to cure the same, Simmonds fails to
cure such default within a period of five Business
Days;
(b) if a decree or order of a court having jurisdiction is
entered adjudging Simmonds a bankrupt or insolvent, or
approving as properly filed a petition seeking the
winding-up of Simmonds under the Companies' Creditors
Arrangement Act (Canada), the Bankruptcy and Insolvency
Act (Canada) or the Winding Up Act (Canada) or any
other bankruptcy, insolvency or analogous laws or
process of execution against, or against any
substantial part of the property of, Simmonds or
ordering the winding-up or liquidation of its affairs,
and any such decree or order continues unstayed and in
effect for a period of 30 days and which adversely
affects in any material manner EC's ability to obtain
performance by Simmonds of its obligations under the
Option Agreement;
(c) if a resolution is passed for the winding-up or
liquidation of Simmonds or if Simmonds institutes
proceedings to be adjudicated a bankrupt or insolvent,
or consents to the institution of bankruptcy or
insolvency proceedings against it, or files a petition
or answer or consent seeking reorganization or relief
under the Companies' Creditors Arrangement Act
(Canada), the Bankruptcy and Insolvency Act (Canada) or
the Winding Up Act (Canada) or any other bankruptcy,
insolvency or analogous laws or consents to the filing
of such petition or to the appointment of a receiver
of, or a substantial part of the property of, Simmonds
or makes a general assignment for the benefit of
creditors, or admits in writing its inability to pay
its debts generally as they become due or takes
corporate action in furtherance of any of the aforesaid
purposes and provided any such actions or events
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adversely affect in any material manner EC's ability to
obtain performance by Simmonds of its obligations under
the Option Agreement; and
(d) if any representation or warranty made by Simmonds in
this Agreement or the Option Agreement or in any
certificate or other document at any time delivered
hereunder or thereunder or under the Escrow Agreement
to EC shall prove incorrect or misleading in any
material respect on and as of the date thereof until
the Expiry Date (as defined in the Option Agreement).
6.2 Remedies: If an Event of Default occurs under Section
6.1, the Security Interest shall immediately become enforceable
and EC may, forthwith or at any time thereafter (and, subject to
Sections 3.2 and 3.3, in the event that EC shall proceed under
any of subsections 6.2(b) to 6.2(h) inclusive, upon three
Business Days' notice to Simmonds), except in the event such
Event of Default shall have been cured prior to any action by EC,
under this Section 6.2 or except as provided by applicable law or
this Agreement, take any one or more of the following actions:
(a) declare any or all of the Obligations to be immediately
due and payable by giving notice in writing thereof to
Simmonds and, in such event, such Obligations shall be
forthwith due and owing by Simmonds to EC;
(b) commence legal action to enforce payment or performance
of Obligations;
(c) subject to any applicable law, dispose of, or direct
R-M Trust to dispose of the Collateral by private sale,
public sale or otherwise upon such terms and conditions
as EC may determine; provided that EC may apply and
allocate any proceeds arising from the realization of
the Collateral to the Obligations in such manner as EC
in its absolute discretion, shall deem appropriate;
(d) elect to retain the Collateral or any portion thereof
irrevocably by giving written notice of such election
to Simmonds;
(e) exercise any or all of the rights and privileges
attaching to any of the Collateral as if EC were the
absolute owner thereof;
(f) file such proofs of claims or other documents as may be
necessary or desirable to have its claim lodged in any
bankruptcy, winding-up, liquidation, arrangement,
dissolution or other proceedings (voluntary or
otherwise) relating to Simmonds;
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(g) where the Collateral has been disposed of by EC or R-M
Trust as provided herein, commence legal action against
Simmonds for the difference, if any, between (i) any
damages suffered by EC or its assigns resulting
directly or indirectly from the violation by Simmonds
of the Option Agreement or this Agreement; and (ii) the
proceeds received by EC on a disposition of the
Collateral of Proceeds (hereinafter referred to as the
"Deficiency"); or
(h) take any other action, suit, remedy or proceeding
authorized or permitted by this Agreement or by law or
equity.
6.3 Sale of Collateral: Any sale referred to in subsection
6.2(c) may be a sale of all or any portion of the Collateral and
may be by way of public auction, public tender, private contract
or otherwise provided that, subject to Sections 6.4 and 6.8, EC
shall give to Simmonds written notice three Business Days prior
to the date of such sale. Any sale pursuant to this Section 6.3
may be made with or without any special condition as to the upset
price, reserve bid, title or evidence or other matter and may be
made from time to time as EC, in its sole discretion deems fit,
with power to vary or rescind any such sale or buy in at any
public sale and resell without being answerable for any loss. EC
may sell, or direct R-M Trust to sell, the Collateral for a
consideration payable by instalments either with or without
taking security for the payment of such deeds, assurances and
conveyances of the Collateral and give receipts for the purchase
money, and any such sale shall be a perpetual bar, both at law
and in equity, against Simmonds and all those claiming Collateral
sold by, from, through or under Simmonds. In the event of any
sale pursuant to this Section 6.3, Simmonds hereby covenants and
agrees to provide all information, certificates and consents
required under applicable securities laws or under the rules, by-
laws or policies of the exchange(s) on which any of the
Collateral is listed and posted for trading to permit the due and
valid sale of the Collateral in compliance with such laws, rules,
by-laws or policies.
6.4 Commercially Reasonable Disposition: Simmonds agrees
that a sale at arm's length to a financial institution or any
other person, with or without public advertisement or the
services of a broker or other dealer in securities, for the best
price obtainable from a canvass of three potential arm's length
purchasers will be a commercially reasonable method of
disposition of the Collateral in the circumstances. Simmonds
further agrees that such canvass may be conducted by telephone
during the course of one Business Day and that Collateral is such
that EC has reasonable grounds to believe that the Collateral may
speedily decline in value and, therefore, that no notice of such
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intended disposition otherwise required by any applicable
legislation need be given to Simmonds. The provisions of this
Section 6.4 shall not preclude any sale or other disposition of
the Collateral in any other manner which is commercially
reasonable.
6.5 Reasonable Expenses: Simmonds shall pay to EC on
demand all costs and expenses of EC (including legal fees)
incurred in exercising its rights hereunder, which costs and
expenses shall form part of the Obligations, and shall be paid by
Simmonds to EC, forthwith after demand therefor shall have been
made by EC to Simmonds together with interest from and including
the date of demand or, if EC has taken steps to exercise its
rights under Section 6.2, from and including the date upon which
the cost or expense is incurred at a rate per annum that is equal
to 1% in excess of the prime rate of interest then quoted by Bank
of Montreal for loans in Canadian dollars to its commercial
customers in Canada (the "Prime Rate"), payable before and after
demand, maturity, default and judgment, with interest on amounts
in default at the same rate. All such interest shall be payable
on demand, shall be determined daily and shall be compounded
monthly in arrears on the last day of each month. Payment of
such interest shall be secured by the Security Interest.
6.6 Deficiency: Where the Collateral has been disposed of
by EC or R-M Trust as provided herein, the Deficiency shall be
paid by Simmonds to EC, forthwith after demand therefor shall
have been made by EC to Simmonds together with interest from and
including the date upon which the Deficiency arises at a rate per
annum that is equal to 1% in excess of the Prime Rate payable
before and after demand, maturity, default and judgment, with
interest on amounts in default at the same rate. All such
interest shall be payable on demand, shall be determined daily
and shall be compounded monthly in arrears on the last day of
each month. Payment of the Deficiency together with such
interest shall be secured by the Security Interest.
6.7 Obligations of EC: EC shall not be under any
obligation, or be liable or accountable for any failure, to
enforce payment or performance of the Obligations or to exercise
any of its rights and remedies hereunder and shall not be under
any obligation to institute proceedings for any of such purposes.
6.8 Redemption of Collateral: At any time before EC or R-M
Trust has disposed of the Collateral as provided for herein or
before EC has elected, in the manner set out in subsection
6.2(d), to retain all or part of the Collateral irrevocably,
Simmonds may redeem the Collateral by satisfying all of its
obligations and liabilities under the Option Agreement and this
Agreement.
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ARTICLE VII
ACKNOWLEDGEMENTS BY SIMMONDS
7.1 Acknowledgements: Simmonds hereby:
(a) acknowledges receipt of a copy of this Agreement;
(b) acknowledges and agrees that this Agreement and the
rights and obligations of EC contained in the Option
Agreement may be assigned in whole or in part by EC
without notice or consent and, in the event of any
assignment, the assignee(s) shall be entitled to all
the rights and remedies, and subject to the
obligations, of EC set forth in this Agreement and the
Option Agreement, provided that such assignment shall
not be made to any party who, by virtue of exercising
its rights under the Option Agreement, would contravene
any applicable securities laws, regulations or policies
in the United States or Canada or any of the by-laws,
regulations or policies of the National Association of
Securities Dealers Automated Quotation System or any
other applicable stock exchange; and
(c) agrees not to assert against EC or any assignee of EC,
and the rights of EC or any such assignee shall not be
subject to, any claim, defense, demand, set-off or
other right, whether at law or in equity, that Simmonds
has or may have against EC or any such assignee under
any agreement or instrument other than this Agreement
or the Option Agreement.
ARTICLE VIII
NOTICES AND SERVICE
8.1 Notices: Except as otherwise provided herein, any
notice or other document required or permitted to be given to any
party shall be validly given if delivered personally or sent by
telecopy to any party at the following address:
(a) if to Simmonds:
Simmonds Communications Ltd.
1050 - 5255 Yonge Street
Willowdale, Ontario
M2N 6P4
Telecopy: (416) 221-3800
Attention: David O'Kell
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(b) if to EC:
Extra Clearing B.V.
Papenbroekssteeg 2
Amsterdam, 1012 NW
Netherlands
Telecopy: 011-31-20-626-9776
Attention: Roelof Veenstra, Management Director
(c) if to R-M Trust
The R-M Trust Company
393 University Avenue
5th Floor
Toronto, Ontario
M5G 1E6
Telecopy: (416) 813-4555
Attention: Vice-President, Corporate Trust
Any such notice or other document delivered personally or sent by
telecopy shall be deemed to have been received by and given on
the date of such delivery or telecopy (provided that it is
received within the normal business hours of the recipient and
such day is a Business Day and, if not, on the next following
Business Day). Any party may at any time give notice to the
other parties hereto of any change of address in accordance with
the foregoing provisions hereof.
ARTICLE IX
WAIVERS
9.1 Waiver by EC: With respect to the Obligations, EC may,
at any time by written notice delivered to Simmonds, waive in
whole or in part any breach of this Agreement, any Event of
Default or any rights and remedies of EC hereunder or otherwise
and may grant extension of time or other indulgences to, accept
compositions from or grant releases and discharges to Simmonds in
respect of the Collateral or otherwise deal with Simmonds or with
the Collateral and any other security held by EC, all as EC may
see fit. Simmonds hereby agrees that any such waiver shall not
be a waiver of any other or subsequent breach of this Agreement
or Event of Default and that any failure by EC to exercise any of
its rights or remedies hereunder or otherwise shall in no way
effect or impair EC's Security Interest or the rights and
remedies of EC hereunder or otherwise.
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ARTICLE X
EFFECTIVE DATE AND TERMINATION
10.1 Effective Date: This Agreement shall become effective
when it shall have been executed by Simmonds, R-M Trust and EC.
This Agreement and the Security Interest are in addition to and
not in substitution for any other security granted by Simmonds to
EC, whether before or after the execution of this Agreement. The
Security Interest shall be a general and continuing security
interest in respect of the Obligations and shall continue in full
force and effect until terminated as provided in Section 10.2.
10.2 Termination: This Agreement shall be terminated on the
earlier of (i) the completion of the purchase and sale of all of
the Optioned Shares (as that term is defined in the Option
Agreement) in accordance with the terms and conditions of the
Option Agreement; and (ii) one business day after the expiry of
the Option Period (as that term is defined in the Option
Agreement) provided that, in either case, all of the Obligations
have been fully satisfied by Simmonds. Upon and notwithstanding
termination of this Agreement in accordance with the provisions
of this Section 10.2, each of EC and R-M Trust shall, at the
expense of Simmonds, deliver to Simmonds possession of all
Collateral or remaining part thereof (unless all the Optioned
Shares have been purchased by EC), make and do all such acts and
things and execute and deliver all such instruments, agreements
and documents as Simmonds shall consider reasonably necessary or
desirable to discharge the Security Interest, to release and
discharge the Collateral therefrom and to record such release and
discharge in all appropriate offices of public record.
ARTICLE XI
POWER OF ATTORNEY
11.1 Power of Attorney: Simmonds irrevocably constitutes
and appoints EC and its directors and officers holding office
from time to time as the true and lawful attorney of Simmonds
with full power of substitution in the name of Simmonds to do any
and all such acts and things or execute and deliver all such
agreements, documents and instruments as EC, in its sole
discretion, considers necessary or desirable to carry out the
provisions and purposes of this Agreement or to exercise its
rights and remedies hereunder, including without in any way
limiting the generality of the foregoing: (i) transferring any
or all of the Collateral into the name of EC or to any person who
acquires the same pursuant to the provisions of Section 6.2; (ii)
endorsing, negotiating or redeeming any Collateral; (iii)
exercising any voting rights associated with the Collateral and
executing any proxies or similar instruments in furtherance
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thereof; and (iv) realizing or collecting any Proceeds or any
dividends, principal, interest or other payments on the
Collateral or in respect thereof. Simmonds hereby ratifies and
agrees to ratify all acts of any such attorney taken or done in
accordance with this Section 11.1. This power of attorney being
coupled with an interest shall not be revoked or terminated by
any act or thing and shall remain in full force and effect until
this Agreement has been terminated.
ARTICLE XII
MISCELLANEOUS
12.1 Further Assurances: Simmonds will, from time to time
at the request of EC, make and do all such acts and things and
execute and deliver all such instruments, agreements and
documents as EC shall reasonably request by notice in writing
given to Simmonds in order to create, preserve, perfect, validate
or otherwise protect the Security Interest, to enable EC to
exercise and enforce any of their rights and remedies hereunder
and generally to carry out the provisions and purposes of this
Agreement.
12.2 Filings: Simmonds will promptly effect all
registrations, filings, recordings and all re-registrations, re-
filings and re-recordings of or in respect of this Agreement and
the Security Interest in all offices in all jurisdictions and at
such times as may be necessary or of advantage in perfecting,
maintaining and protecting the validity, effectiveness and
priority hereof or of the Security Interest. Notwithstanding the
foregoing, EC is authorized, at its option, to make such
registrations, filings or recordings or such re-registrations,
re-filings or re-recordings against Simmonds as it may deem
necessary or appropriate to perfect or secure the Security
Interest.
12.3 Amendments, Etc.: This Agreement may not be modified
or amended except with the written consent of the parties hereto.
12.4 Attornment: Each of the parties hereby irrevocably
submits to the non-exclusive jurisdiction of any court in the
Province of Ontario for the purposes of any legal or equitable
suit, action or proceeding in connection with this Agreement.
12.5 Enurement: This Agreement shall be binding on and
enure to the benefit of the parties hereto and their respective
successors and assigns except that Simmonds shall not have the
right to assign its rights or obligations hereunder or any
interest herein, but EC and its assignee(s) shall have the right
to assign their respective rights and obligations hereunder,
in whole or in part, without the consent of Simmonds.
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12.6 Judgment Currency:
(a) If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder
or under the Option Agreement (collectively, the
"Documents") in any currency (the "Original Currency")
into another currency (the "Other Currency"), the rate
of exchange used shall be that at which, in accordance
with normal banking procedures, EC could purchase the
Original Currency with the Other Currency on the
Business Day preceding that on which final judgment is
given or, if permitted by applicable law, on the day on
which such judgment is paid or satisfied.
(b) The obligations of Simmonds in respect of any sum due
in the Original Currency to EC under any of the
Documents shall, notwithstanding any judgment in any
Other Currency, be discharged only to the extent that
on the Business Day following receipt by EC
thereof, EC may, in accordance with normal banking
procedures, purchase the Original Currency. Simmonds,
as a separate obligation and notwithstanding any such
judgment, shall indemnify EC against such loss, and if
the amount of the Original Currency so purchased
exceeds the sum originally due to EC in the Original
Currency, EC agrees to remit such excess to Simmonds.
12.7 Fees and Expenses: Simmonds shall be responsible for
all fees and expenses incurred by R-M Trust with respect to the
transactions contemplated hereunder.
12.8 Counterparts: This Agreement, or any amendment to it,
may be executed in multiple counterparts, each of which shall be
deemed to be an original agreement, and all of which shall
constitute one agreement. All counterparts shall be construed
together and shall constitute one and the same agreement. Any
delivery of an executed copy of this Agreement by way of telecopy
or facsimile shall constitute delivery hereof, provided that any
party delivering by way of telecopy or facsimile shall, as soon
as reasonably practicable, deliver the original executed copy to
the other parties.
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IN WITNESS WHEREOF the parties have executed this
Agreement as of the date first written above.
SIMMONDS COMMUNICATIONS LTD.
by /s/ David O'Kell
----------------------------
________________________C.S.
EXTRA CLEARING B.V.
by /s/ R.R. Veenstra
-----------------------------
_________________________C.S.
THE R-M TRUST COMPANY
by /s/ R.W. Byrne
------------------------------
____________________________C.S.
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Exhibit 6
March 31, 1995
TO: SIMMONDS COMMUNICATIONS LTD.
1050 - 5255 Yonge Street
Willowdale, Ontario
M2N 6P4
AND TO: EXTRA CLEARING B.V.
Papenbroekssteeg 2
Amsterdam, 1012 NW
Netherlands
The following sets forth the terms and conditions
pursuant to which the undersigned will act as escrow agent in
connection with completing the transactions contemplated by an
option agreement (the "Option Agreement") made as of March 31,
1995 between Simmonds Communications Ltd. ("Simmonds") and Extra
Clearing B.V. ("EC") and a pledge agreement (the "Pledge
Agreement") made as of March 31, 1995 between Simmonds, EC and
The R-M Trust Company.
Following execution and delivery of the Option
Agreement and the Pledge Agreement, EC will deliver to the
undersigned U.S. $890,000 (the "Funds") which shall be held by
the undersigned in a non-interest bearing trust account. By
execution of this letter, EC hereby authorizes Davies, Ward &
Beck to release the Funds to Simmonds upon receipt from Simmonds
of the following:
(i) share certificates (the "Share Collateral")
representing 890,000 shares of common stock in
the capital of Intek Diversified Corporation duly
endorsed in blank for transfer (with signatures
guaranteed by a Canadian chartered bank) or
accompanied by properly completed share transfer
powers;
(ii) a certificate (the "Officer's Certificate") in
the form annexed hereto as Schedule A, signed by
Mr. David O'Kell, Executive Vice President of
Simmonds;
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(iii) letters from each of Hewlett-Packard (Canada)
Ltd., AT&T Capital Canada, Inc., Teletech
Financial Corporation and Royal Bank of Canada
that they do not have a security interest of any
kind in the Share Collateral or releases, in form
satisfactory to Davies, Ward & Beck, acting
reasonably, of any security interest held by
Hewlett-Packard (Canada) Ltd., AT&T Capital
Canada, Inc., Teletech Financial Corporation and
Royal Bank of Canada in the Share Collateral.
By execution of this letter, Simmonds hereby authorizes
Davies, Ward & Beck to deliver to The R-M Trust Company the Share
Collateral and to deliver to EC the Officer's Certificate.
In the event that the undersigned has not received all
of the items specified in (i), (ii) (iii) above within 45 days of
the date of this letter, the undersigned shall return to EC the
Funds and shall return to Simmonds those items, if any, specified
in (i), (ii) and (iii) which Simmonds has delivered to the
undersigned and this letter agreement shall terminate.
The acceptance by the undersigned of our duties and
obligations under this agreement is subject to the following
terms and conditions, which the parties to this agreement hereby
agree shall govern and control with respect to the undersigned's
rights, duties, liabilities and immunities:
(a) the undersigned shall not be responsible or liable in
any manner whatever for the sufficiency, correctness,
genuineness or validity of any security deposited with
us;
(b) the undersigned shall be protected in acting upon any
written notice, request, waiver, consent, receipt,
statutory declaration or other paper or document
furnished to us, and signed by either of you, not only
as to its due execution and the validity and
effectiveness of its provisions, but also as to the
truth and acceptability of any information therein
contained;
(c) except for acts of negligence or misconduct, the
undersigned shall not be liable for any act done or
step taken or omitted by us in good faith;
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(d) the undersigned shall have no duties except those which
are expressly set forth herein, and we shall not be
bound by any notice of claim or demand with respect
thereto, or any waiver, modification, amendment,
termination or rescission of this agreement, unless
received in writing, and signed by each of you and, if
the undersigned's duties herein are affected, unless we
shall have given our prior written consent thereto; and
(e) in the event of a dispute between the parties with
respect to the matters herein, we may, at our option,
deposit all documents and certificates held by us
hereunder with a court of competent jurisdiction and
seek directions from such court.
Each of you agrees to indemnify and save harmless the
undersigned from and against any and all liabilities and claims
made against us in respect of any action or thing we may take or
do or omit to take or do in connection herewith except as a
result of our wilful neglect or default hereunder. This
indemnity shall survive the termination of this agreement.
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We would ask that you signify your acceptance of the
foregoing by executing this agreement where indicated below.
Yours very truly,
DAVIES, WARD & BECK
by:____________________________
The foregoing is accepted and agreed to as of this ____
day of March, 1995.
SIMMONDS COMMUNICATIONS LTD.
by______________________________
David O'Kell
Executive Vice-President
The foregoing is accepted and agreed to as of this ____
day of March, 1995.
EXTRA CLEARING B.V.
by_______________________________
Roelof Veenstra
Managing Director
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Schedule A
OFFICER'S CERTIFICATE
TO: ECTRA CLEARING B.V.
I, David O'Kell, Executive Vice-President of Simmonds
Communications Ltd. ("Simmonds"), hereby represent and warrant
that:
(i) certificate No.[s] - represent[s] 200,000
registered and freely tradeable shares in the
common stock of Intek Diversified Corporation
("Intek") beneficially owned by Simmonds; and
(ii) certificate No.[s] - represent[s] 700,000
shares in the common stock of Intek, beneficially
owned by Simmonds.
DATED this _____ day of _____________, 1995.
______________________________________
David O'Kell, Executive Vice President
<PAGE>
Exhibit 7
SIMMONDS COMMUNICATIONS LTD.
1050-5255 Yonge Street
Willowdale, Ontario M2N 6P4
April 10, 1995
TO: Extra Clearing B.V. Davies, Ward & Beck
Papenbroekssteeg 2 1 First Canadian Place
Amsterdam, 1012NW 44th Floor
Netherlands Toronto, Ontario M5X 1B1
The R-M Trust Company
393 University Avenue
5th Floor
Toronto, Ontario M5G 1E6
Dear Sirs:
Re: Intek Diversified Corporation ("Intek")
As you are aware, we have executed and delivered:
1. an option agreement (the "Option Agreement"), dated as
of March 31, 1995 in favour of Extra Clearing B.V. ("EC") in
respect of 890,000 shares of common stock of Intek;
2. a pledge agreement (the "Pledge Agreement"), made as of
the 31st day of March, 1995 between EC, The R-M Trust Company
("R-M Trust") and us, pursuant to which we agreed to pledge
890,000 shares of common stock of Intek (the "Share Collateral")
to EC pursuant to the terms thereof; and
3. an escrow agreement (the "Escrow Agreement"), dated as
of the 31st day of March, 1995 between Davies, Ward & Beck
("DWB"), EC and us concerning the holding by DWB of U.S. $890,000
payable to us pursuant to the Option Agreement.
Further to our recent discussions, this letter
agreement sets forth certain amendments to the Pledge Agreement
and the Escrow Agreement to which you and we have agreed.
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Defined terms used in this letter agreement, which are not
otherwise defined herein, shall have the meanings ascribed
thereto in the Option Agreement, the Pledge Agreement or the
Escrow Agreement, as applicable.
By executing this letter each of us acknowledges that
the undersigned has caused to be delivered to DWB facsimile
copies of letters and/or releases which satisfy the requirements
of paragraph (iii) on page 1 of the Escrow Agreement. The
undersigned hereby agrees to provide to DWB the originals of such
letters and releases within five business days of the date
hereof.
By executing this letter each of us further
acknowledges and agrees that, despite the requirements of the
Escrow Agreement, DWB shall release to the undersigned the Funds
upon delivery to DWB by the undersigned of share certificates
evidencing 900,000 shares of common stock in the capital of
Intek, duly endorsed in blank for transfer, with signatures
guaranteed by a Canadian chartered bank. DWB shall then forward
such certificates to R-M Trust to be held pursuant to the terms
of the Pledge Agreement. It shall not be a condition to the
release of the Funds that the undersigned deliver to DWB the
certificate annexed as Schedule A to the Escrow Agreement.
In view of the fact that 200,000 of the 900,000 shares
of common stock of Intek to be delivered to DWB to obtain the
release of the Funds do not represent freely tradeable shares (as
required by the Escrow Agreement and the Pledge Agreement) and in
view of the fact that such 900,000 shares exceed by 10,000 the
number of shares required to be delivered by the undersigned
pursuant to the Escrow Agreement and the Pledge Agreement, each
of us further agrees as follows:
(i) as soon as possible, the undersigned shall deliver to
R-M Trust share certificates evidencing 200,000 Freely
Tradeable Shares, duly endorsed in blank for transfer,
with signatures guaranteed by a Canadian chartered
bank, and, concurrently therewith, R-M Trust shall
release to the undersigned share certificates
evidencing 200,000 shares of restricted common stock of
Intek then held by R-M Trust;
and
(ii) as soon as possible, R-M Trust, with the assistance of
the undersigned, if required, shall deliver a share
certificate evidencing 100,000 shares of restricted
common stock of Intek to Intek's registrar and transfer
agent, in exchange for certificates evidencing 90,000
and 10,000 shares of common stock of Intek, and, upon
receipt thereof, the undersigned shall cause the
certificate evidencing 90,000 shares of common stock to
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be duly endorsed in blank for transfer with
signatures guaranteed by a Canadian chartered bank, and
R-M Trust shall release to the undersigned the share
certificate evidencing 10,000 shares of restricted
common stock of Intek.
Following the delivery and release of share
certificates as described above, R-M Trust shall be holding as
collateral agent on behalf of EC share certificates evidencing
200,000 Freely Tradeable Shares and 690,000 shares of restricted
common stock of Intek and the requirements of section 3.1 of the
Pledge Agreement shall be deemed to be satisfied. Until such
time, provided that the undersigned is attempting to deliver such
share certificates described above as soon as possible, there
shall be no Event of Default under the Pledge Agreement relating
to section 3.1 of the Pledge Agreement.
Without detracting from the obligation of the
undersigned to obtain and deliver certificates evidencing 200,000
Freely Tradeable Shares as described in (i) above, prior to the
delivery of share certificates evidencing any or all of the
200,000 Freely Tradeable Shares pursuant to the Pledge Agreement,
as amended, EC may exercise all or part of the Option in
accordance with the Option Agreement, as amended, provided that
if it exercises the Option in respect of more than 690,000 shares
of restricted common stock of Intek prior to delivery of share
certificates evidencing the 200,000 Freely Tradeable Shares, we
will only be obligated to deliver to R-M Trust thereafter share
certificates evidencing that number of 200,000 Freely Tradeable
Shares equal to 200,000 minus the number of restricted common
shares of Intek in respect of which the Option was exercised in
excess of 690,000.
EC represents and warrants that it has not assigned, in
whole or in part, the Option Agreement, the Pledge Agreement or
any of its rights or obligations thereunder.
This letter agreement shall be governed by the laws of
the Province of Ontario and you and we attorn to the jurisdiction
of the Courts of Province of Ontario.
This letter agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original
agreement, and all of which shall constitute one agreement.
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We would ask that you signify your acceptance of the
foregoing by executing this letter agreement where indicated
below.
Yours very truly,
SIMMONDS COMMUNICATIONS LTD.
By:_______________________________
The foregoing is accepted and agreed to as of this
day of April, 1995.
EXTRA CLEARING B.V.
By:_________________________________
The foregoing is accepted and agreed to as of this
day of April, 1995.
THE R-M TRUST COMPANY
By:_________________________________
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The foregoing is accepted and agreed to as of this 11th
day of April, 1995.
DAVIES, WARD & BECK
By:__________________________
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