SECURITIES PLEDGE AGREEMENT
EXHIBIT
10.02
THIS AGREEMENT dated for reference
September 2, 2008 is between:
XXXXX XXXX, of x/x Xxxxx #000,
000 – 1 Street SW, Calgary, Alberta,
Canada
T2P 3S9
("Kent")
AND
XXXX XXXX XXX, of x/x Xxxxx
#000, 000 – 1 Street SW, Calgary, Alberta, Canada T2P 3S9
("Xxx")
(Kent
and Xxx are collectively referred to herein as the "Sellers")
AND
PRIMARY CORP., an Ontario Business Corporations Act
corporation
(the
"Buyer")
BACKGROUND
A. The
Buyer and the Sellers entered into a share purchase agreement dated on or about
the date of this Agreement (the "Share Purchase Agreement"),
pursuant to which the Buyer agreed to purchase and the Sellers agreed to sell,
subject to the terms and conditions of the Share Purchase Agreement, 750,000
common shares (the "Sellers'
Shares") in the capital of Geoglobal Resources Inc. (the "Company").
B. Pursuant
to the Share Purchase Agreement, the Sellers agreed to indemnify the Buyer in
respect of an anticipated return to be made on the Buyer’s investment in the
Sellers’ Shares made pursuant to the Share Purchase Agreement.
C. The
Sellers have agreed to execute and deliver this Agreement to the Buyer as
security for the payment and performance of the obligations of the Sellers to
the Buyer under Section 5.3 of the Share Purchase Agreement.
AGREEMENTS
For good
and valuable consideration, the receipt and sufficiency of which each party
acknowledges, the parties agree as follows:
1. Securities
Pledge. Concurrently with delivery thereof and as provided in
Section 2 hereof, the Sellers hereby assign, mortgage, charge and pledge to and
deposit with the Buyer, and grant to the Buyer a security interest in the common
shares in the capital of the Company (the "Geoglobal Shares") delivered
to Buyer in accordance with Section 2 hereof now or hereafter owned by the
Sellers, along with any substitutions, additions, proceeds or claims by the
Sellers in respect of them (collectively, the "Pledged Securities"), as
general and continuing collateral security for the payment and performance of
all present and future debts, liabilities and obligations of the Sellers to the
Buyer under and pursuant to Section 5.3 of the Share Purchase Agreement ( the
"Obligations") until
payment and performance in full of the Obligations.
2. Delivery
of Pledged Securities.
(a)
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On
or before the execution and delivery of this Agreement, the Sellers will
deliver to the Buyer share certificates representing not less than 105,000
Geoglobal Shares, together with duly executed undated medallion signature
guaranteed stock powers of attorney and such other transfer documents as
the Buyer or its counsel may require, all in form and terms satisfactory
to the Buyer and sufficient to permit the transfer, in the event of any
obligation of Sellers to indemnify the Buyer pursuant to Section 5.3 of
the Stock Purchase Agreement, of such Pledged Securities on the registers
maintained by the transfer agent for the Company, free and clear of all
liens, claims, encumbrances, restrictions or other notations, to be held
by the Buyer pursuant to this Agreement until payment and performance in
full of the Obligations. Such shares and stock powers of
attorney shall be released from this Pledge Agreement at the Second
Tranche Closing Date for sale to Buyer pursuant to Section 2.3 of the
Share Purchase Agreement.
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(b)
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On
or before the Second Tranche Closing Date, the Sellers will deliver to the
Buyer share certificates representing not less than 600,000 Geoglobal
Shares, together with duly executed undated medallion signature guaranteed
stock powers of attorney and such other transfer documents as the Buyer or
its counsel may require, all in form and terms satisfactory to the Buyer
and sufficient to permit the transfer, in the event of any obligation of
Sellers to indemnify the Buyer pursuant to Section 5.3 of the Stock
Purchase Agreement, of such Pledged Securities on the registers maintained
by the transfer agent for the Company, free and clear of all liens,
claims, encumbrances, restrictions or other notations, to be held by the
Buyer pursuant to this Agreement until payment and performance in full of
the Obligations.
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(c)
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In
the event that the Pledged Securities are uncertificated, the Sellers will
cause such Pledged Securities to be deposited into a brokerage account of
the Buyer, as directed by the Buyer. The Sellers acknowledges
and confirms that at all times in which any brokerage firm or other agent
for the Buyer holds or is otherwise in possession or has control or
direction over the Pledged Securities, whether certificated or not, or the
transfer documentation referred to above, it shall hold all such Pledged
Securities and transfer documentation as agent for the
Buyer.
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3. Representations and
Warranties. The Sellers represent and warrant to the Buyer
that:
(a)
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they
are the sole legal and beneficial owner of all of the Pledged
Securities;
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(b)
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no
person holds any options, warrants, or other rights to acquire the Pledged
Securities;
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(c)
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the
Pledged Securities are or will be at the time they are deposited with the
Buyer under this Agreement, validly issued, fully paid, non-assessable
common shares in the capital of the
Company;
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(d)
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the
Pledged Securities are free and clear of all liens, mortgages, charges and
security interests other than those created under this Agreement in favour
of the Buyer;
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(e)
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the
Pledged Securities are not subject to any shareholders or other agreement
or commitment, cease trade order, that would in any way restrict or
prevent the Buyer from assigning, transferring, selling or otherwise
disposing of such shares upon the occurrence of an Event of
Default;
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(f)
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the
Sellers have no reasonable grounds to believe that the Company is in
default of its obligations under applicable securities
law;
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(g)
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the
Company is in compliance, in all material respects, with its continuous
disclosure obligations under applicable securities laws and, without
limiting the generality of the foregoing, no adverse material change has
occurred since the last financial statement and no adverse material fact
exists in relation to the Company or the Pledged Securities which has not
been publicly disclosed; and
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(h)
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no
consent, approval, authorization or other order or other action by, and no
notice to or filing with, any governmental authority or any other Person
(other than the filing of a financing statement under the Personal Property Security
Act (British Columbia)) will be required for the exercise by the
Buyer of the rights and the remedies provided for in this Agreement or in
connection with the transfer of the Pledged Securities to the Buyer or to
a third party at the Buyer’s direction pursuant to this Agreement, except
as may be required by laws affecting the offering and sale of securities
generally.
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4. Realization on Default. On the
occurrence and during the continuance of any default by the Sellers in the
payment or performance of the Obligations (each, an "Event of Default"), the Buyer
may at any time in its sole discretion, in accordance with any applicable law,
realize upon or otherwise dispose of the Pledged Securities by sale, transfer,
or delivery or may, to the fullest extent permitted by law, exercise and enforce
all rights and remedies of a holder of the Pledged Securities as if the Buyer
were absolute owner of them, without notice to or control by the Sellers, and
such remedies may be exercised separately or in combination and will be in
addition to and not in substitution for any other rights the Buyer may
have. If an Event of Default has occurred, the Sellers acknowledge
and agree that they shall continue to be liable for the outstanding Obligations,
despite any action or inaction on the part of the Buyer in selling or disposing
of the Pledged Securities.
5. Costs and
Expenses. All costs and charges incurred by or on behalf of
the Buyer in connection with the Pledged Securities or their realization
(including without limitation all legal fees (on a solicitor and own client
basis) and court costs and all expenses of taking possession of, protecting and
realizing upon the Pledged Securities including costs and charges in connection
with realizing, collecting, selling, transferring or delivering the Pledged
Securities or exercising or enforcing any rights under them) will be added to
and form part of the Obligations and will be a first charge on the proceeds of
any realization, collection, sale, transfer, delivery, exercise or enforcement,
provided the Sellers shall not be obligated for any brokerage or finders fees in
connection with any realization on the Pledged Securities.
6. Application of
Proceeds. If the proceeds of disposition of the Pledged
Securities are insufficient to satisfy all of the Obligations, the Sellers will
remain liable for any deficiency. If, after the realization or
disposition of the Pledged Securities and satisfaction of the Obligations there
are any surplus Pledged Securities or proceeds of disposition, the Buyer will
account for such surplus Pledged Securities or process of disposition to the
Sellers.
7. No Exhaustion of
Recourse. The Buyer will not be obliged to exhaust its
recourses against any other covenantor or any other person or persons, or
against any other security it may hold in respect of the Obligations before
realizing upon or otherwise dealing with the Pledged Securities in such manner
as it considers desirable. If an Event of Default has occurred, the
Buyer may grant extensions or other indulgences, take and give up securities,
accept compositions, grant releases and discharges and otherwise deal with the
Sellers and with other parties, Sellers, indemnitors or securities as the Buyer
may see fit without prejudice to the rights of the Buyer in respect of the
Pledged Securities.
8. No Merger. This
security will not operate by way of merger of any of the Obligations and no
judgment recovered by the Buyer will operate by way of merger, of or in any way
affect, the security now or in the future held by the Buyer in respect of the
Obligations or in respect of any other obligations of the Sellers.
9. Appointment of
Attorney. Any person who is at any relevant time an officer of
the Buyer is irrevocably appointed attorney of the Sellers, with full powers of
substitution from time to time to endorse or transfer, or both, the Pledged
Securities or any of them to the Buyer, its nominees, or transferees, and the
Buyer and its nominees or transferees are empowered to exercise all rights and
powers and to perform all acts of ownership concerning the Pledged Securities to
the same extent as the Sellers may (including, without limitation, the right to
execute on behalf of the Sellers any and all stock powers of attorney to
transfer any of the Pledged Securities). The power of attorney
granted in this Agreement is in addition to, and not in substitution for, any
stock power of attorney delivered by the Sellers with the delivery of the
Pledged Securities, and such powers of attorney may be relied upon by the Buyer
severally or in combination.
10. Rights of the Sellers. Until
the occurrence of an Event of Default and a determination by the Buyer to
enforce the rights granted to it under this Agreement:
(a)
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the
Sellers will be entitled to exercise all voting rights in respect of the
Pledged Securities and to give consents, waivers, notices and
ratifications and to take other action in respect thereof, provided,
however, that no votes shall be cast or consent, waiver, notice or
ratification given or action taken which
would:
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(i)
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impair
or reduce the value of or restrict the transferability of the Pledged
Securities; or
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(ii)
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be
inconsistent with or violate any provisions of this Agreement, or any
other security granted to or in favour of the Buyer to secure the
Obligations;
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(b)
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if
any of the Pledged Securities is registered in the Buyer’s name or is
under the control of the Buyer, the Buyer, on the Sellers’s written
request, shall execute and deliver to the Sellers suitable proxies, voting
powers or powers of attorney in favour of the Sellers or its nominee or
nominees for voting, giving consents, waivers, notices or ratifications or
taking any other action the Sellers is permitted to take in respect of the
Pledged Securities; and
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(c)
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the
Sellers will be entitled to receive all cash dividends concerning the
Pledged Securities. Any other monies which may be received by
the Sellers for or in respect of the Pledged Securities will be received
as trustee for the Buyer and will immediately be paid over to the Buyer
and be held by the Buyer under the mortgage, charge, hypothecation, pledge
and grant of security interest made by this
Agreement.
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11. Rights and Duties of the
Buyer. Upon the occurrence of an Event of Default and a
determination by the Buyer to enforce the rights granted to it under this
Agreement:
(a)
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all
of the Sellers’s rights pursuant to paragraph 10 shall cease and the Buyer may
enforce any of the Sellers’s rights with respect to the Pledged
Securities; and
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(b)
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to
the extent not already done, forthwith transfer control of such Pledged
Securities to the Buyer, as the Buyer may direct. The Buyer
shall not have any duty of care with respect to the Pledged Securities
other than to use the same care in the custody and preservation of the
Pledged Securities as it would with its own property. The Buyer
may take no steps to defend or preserve the Sellers’s rights against the
claims or demands of others. The Buyer, however, shall use its
reasonable best efforts to give the Sellers notice of any claim or demand
of which it becomes aware to permit the Sellers to have a reasonable
opportunity to defend or contest the claim or
demand.
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12. Attachment. The
Sellers and the Buyer acknowledge that it is their intention that the security
interests created by this Agreement attach on execution by the Sellers and that
value has been given.
13. Alteration of
Capital. In the event of any consolidation, subdivision,
reclassification, stock dividend or other alteration to the capital of the
Company, the term "Pledged
Securities" as it relates to shares in those companies will be considered
to refer to the Pledged Securities described in paragraph 1 as increased,
decreased, amended or supplemented and the Sellers will deliver immediately any
replacement or additional share certificates, directors' resolutions and such
other documents or instruments the Buyer may require, to be held in accordance
with the terms of this Agreement.
14. Discharge. Upon
payment in full of the Obligations, and in no event later than the fifth
Business Day after the date seven (7) months after the Second Tranche Closing
Date, the Buyer will return the share certificates representing the Pledged
Securities and will release the Pledged Securities from the assignment,
mortgage, charge, hypothecation, pledge and security interest created by this
Agreement and will execute and deliver to the Sellers such releases and
reassignments as the Sellers may reasonably require for such
purpose.
15. Defined
Terms. Unless otherwise defined herein, all defined terms used
in this Agreement shall have the meanings ascribed to them in the Share Purchase
Agreement.
16. Binding Effect. The
provisions of this Agreement will be binding upon and enure to the benefit of
the Buyer and the Sellers and their respective successors and
assigns.
17. Governing Law. This
Agreement will be governed and construed in accordance with the laws of the
Province of British Columbia and the laws of Canada applicable
therein. The Sellers submits to the non-exclusive jurisdiction of the
Courts of the Province of British Columbia and agrees to be bound by any suit,
action or proceeding commenced in such Courts and by any order or judgment
resulting from such suit, action or proceeding, but the foregoing will in no way
limit the right of the Buyer to commence suits, actions or proceedings based on
this Agreement in any jurisdiction it may deem appropriate.
18. Notices. In this
Agreement:
(a)
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any
notice or communication required or permitted to be given under this
Agreement will be in writing and will be considered to have been given if
delivered by hand, transmitted by facsimile transmission or mailed by
prepaid registered post to the address or facsimile transmission number of
each party set out below:
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(i)
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if
to the Buyer:
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Primary
Corp.
Suite
2110 - 000 Xxxx Xx. Xxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxx
Xxxxxxx
Fax
No: (000)
000-0000
(ii)
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if
to the Sellers:
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x/x Xxxxx
#000, 000 – 1 Street SW,
Calgary,
Alberta, Canada T2P 3S9
Attention: Xxxxxxx
Xxxxxx, Esq.
Fax
No: (000)
000-0000
or to
such other address or facsimile transmission number as any party may designate
in the manner set out above;
(b)
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notice
or communication will be considered to have been
received:
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(i)
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if
delivered by hand during business hours on a business day, upon receipt by
a responsible representative of the receiver, and if not delivered during
business hours, upon the commencement of business on the next business
day;
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(ii)
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if
sent by facsimile transmission during business hours on a business day,
upon the sender receiving confirmation of the transmission, and if not
transmitted during business hours, upon the commencement of business on
the next business day; and
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(iii)
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if
mailed by prepaid registered post upon the fifth business day following
posting; except that, in the case of a disruption or an impending or
threatened disruption in postal services every notice or communication
will be delivered by hand or sent by facsimile
transmission;
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(c)
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for
the purposes of this paragraph "business day" means a
day which is not a Saturday, Sunday or a holiday in British
Columbia.
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19. Counterparts. This
Agreement may be executed in several counterparts, each of which so executed
will be considered to be an original and such counterparts together will be one
and the same instrument.
20. Further
Assurances. The Sellers will from time to time, whether before
or after the occurrence of an Event of Default, do all such acts and things and
execute and deliver all such certificates, deeds, transfers, assignments and
instruments as the Buyer may reasonably require for perfecting the security
interest constituted by this Agreement and for facilitating the sale of the
Pledged Securities in connection with any realization and for exercising all
powers, authorities and discretions conferred upon the Buyer. The
Sellers covenant and agree with the Buyer to discharge or cause to be discharged
forthwith any encumbrances which may rank in priority to the Buyer's security
interest herein, and to provide the Buyer with satisfactory evidence or other
confirmation that any encumbrances or liens against the Sellers do not encumber
the Pledged Securities.
21. Severability. If
any term of this Agreement is determined to be invalid or unenforceable, in
whole or in part, such invalidity or unenforceability will attach only to such
term or part term, and the remaining part of the term and all other terms of
this Agreement will continue in full force and effect. The parties
will negotiate in good faith to agree to a substitute term that will be as close
as possible to the intention of any invalid or unenforceable term while being
valid and enforceable. The invalidity or unenforceability of any term
in any particular jurisdiction will not affect its validity or enforceability in
any other jurisdiction where it is valid or enforceable.
22. Acknowledgement and
Waiver. The Sellers hereby:
(a)
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acknowledges
receiving a copy of this Agreement;
and
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(b)
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waives
all rights to receive from the Buyer a copy of any financing statement,
financing change statement or verification statement filed or issued, as
the case may be, at any time in respect of this Agreement or any amendment
thereto.
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TO
EVIDENCE THEIR AGREEMENT each of the parties has executed this Agreement on the
date first above written.
PRIMARY
CORP.
Per: /s/Xxxxxx
Xxxxxxx, President & CEO
Authorized Signatory
SIGNED,
SEALED AND DELIVERED in the presence of:
/s/ Xxxx
Xxxxxxx
(Signature)
Xxxx
Xxxxxxx
(Print
Name)
Calgary,
Alberta
(Address)
Chartered
Accountant
(Occupation)
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)
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)
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/s/ Xxxxx
Xxxx
XXXXX
XXXX
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SIGNED,
SEALED AND DELIVERED in the presence of:
/s/ Xxxxxxx
Xxxxxx
(Signature)
Xxxxxxx
Xxxxxx
(Print
Name)
Calgary,
Canada
(Address)
Lawyer
(Occupation)
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)
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/s/ Xxxx Xxxx
Xxx
XXXX
XXXX XXX
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