Unassociated Document


    Exhibit
      10.2

     

    PRIORITIES
      AGREEMENT

     

    THIS
      AGREEMENT
      dated as
      of the __ day
      of
      September, 2007.

     

    
      	 	
              B E T W E E N:

               

              
                COUNSEL
                  CORPORATION,
                  an Ontario company whose address is 40 King Street West, Suite
                  3200,
                  Toronto, Ontario, M5H 3Y2

                 

                (hereinafter
                  referred to as “Counsel”
                  and “the Bank”)

                 

                OF
                  THE FIRST PART;

                 

                -
                  and -

                 

                ROYNAT
                  BUSINES CAPITAL INC.,
                  a
                  Delaware corporation, whose address is 100 North Tryon Street,
                  Suite 3720,
                  Charlotte, NC 28202

                 

                (hereinafter
                  referred to as “Roynat”)

                 

                OF
                  THE SECOND PART;

                 

                -
                  and -

                 

                C2
                  Investments Inc.,
                  a Delaware corporation, whose address is is 40 King Street West,
                  Suite
                  3200, Toronto, Ontario, M5H 3Y2

                 

                ____________________________.

                (hereinafter
                  referred to as the “Company”)

                 

                OF
                  THE THIRD PART;

                 

                and
                  -

                 

                C2
                  Global Technologies Inc. (« C2 »).,
                  a Delaware corporation, whose address is is 40 King Street West,
                  Suite
                  3200, Toronto, Ontario, M5H 3Y2

                 

                ____________________________.

                (hereinafter
                  referred to as the “C2”)

                 

                OF
                  THE FOURTH PART;

              

            


    

     

    WHEREAS,
      the
      Company and/or C2 has authorized, executed and delivered in favor of the Bank
      various notes, security agreements, financing statements (as amended or
      otherwise modified from time to time, the “Bank Security
      Documents”);

     

    WHEREAS,
      the
      Bank Security Documents and any other security which may be held by the Bank
      now
      or hereafter on the property and assets of the Company for its or C2’s existing
      indebtedness and any future indebtedness of the Company or C2 to the Bank are
      sometimes herein collectively referred to as the “Bank
      Security”;
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    WHEREAS,
      Roynat
      has agreed, subject to certain conditions, to provide financing to AZ
      LIMOS LLC,
      an
      affiliated party to the Company (“AZ
      LIMOS”),
      such
      financing to be secured by (among other things) a pledge agreement dated the
      date hereof, by the Company in favor of Roynat (as amended or otherwise modified
      from time to time, together with all other instruments entered into by the
      Company in connection therewith, the “Roynat
      Security Document”)
      pursuant to which the Company has pledged to Roynat all of its membership and
      related interests in AZ LIMOS (the “Pledged
      Interests”).

     

    WHEREAS,
      the
      Roynat Security Documents and any other security which may be held by Roynat
      now
      or hereafter on the Pledged Interests for financing provided to AZ LIMOS by
      Roynat are sometimes herein collectively referred to as the “Roynat
      Security”;

     

    WHEREAS,
      the
      parties hereto have agreed to enter into this Agreement in order to set out
      the
      respective priorities with respect to the Pledged Interest.

     

    NOW
      THEREFORE,
      in
      consideration of the premises and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, the parties hereto
      hereby covenant, undertake, declare and agree as follows:

     

    ARTICLE
      1.
      - CONSENT

     

    1.1. Bank
      Consent.
      The
      Bank hereby consents to the creation and issue by the Company to Roynat of
      the
      Roynat Security and that the creation, issue and existence of the same does
      not
      constitute a default or event of default under the Bank Security
      Documents.

     

    ARTICLE
      2.
      - SUBORDINATION

     

    2.1. Relative
      Priorities.
      The
      Bank and Roynat hereby agree as follows:

     

    
      	(a)  	
              the
                Bank Security solely with respect to the Pledged Interests is hereby
                subordinated in all respects to the Roynat Security;
                and

            


    

     

    
      	(b)  	
              the
                parties hereto hereby agree that, except for the Pledged Interests
                and as
                expressly set forth in the foregoing clause (a), Roynat has no other
                security interests in any of the Bank Security and Roynat hereby
                acknowledges and agrees that any claim it may hereafter have on any
                Bank
                Security (other than the Roynat Security) shall be subordinated in
                all
                respects to the Bank Security.

            


    

     

    2.2. Application
      of Subordination.
      The
      subordination contained herein shall apply in all events and circumstances
      regardless of:

     

    
      	(a)  	
              the
                date of execution, attachment, registration or perfection of any
                security
                interest held by the Bank or Roynat;
                or

            


    

     

    
      	(b)  	
              the
                date of any advance or advances made to the Company by the Bank or
                to AZ
                LIMOS by Roynat; or

            


    

     

    
      	(c)  	
              the
                date of default by the Company or by the Company’s parent C2 under any of
                the Bank Security or the Roynat Security;
                or

            


    

     

    
      	(d)  	
              any
                priority granted by any principle of law or any
                statute.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.3. Insurance
      Proceeds.
      Any
      insurance proceeds received by the Company or C2 by the Bank or Roynat in
      respect of the collateral charged by the Bank Security or the Roynat Security
      shall be dealt with according to the preceding provisions hereof as though
      such
      insurance proceeds were paid or payable as proceeds of realization of the
      collateral for which they compensate.

     

    2.4. Notice
      of Default, Exercise of Remedies.
      The
      Company shall give prompt written notice to the Bank or Roynat, as applicable,
      of any default under the Bank Security Documents or the Roynat Security
      Documents and of any action taken by the other secured party against the Company
      or C2 to enforce its security. 

     

    ARTICLE
      3.
      - COVENANTS OF COMPANY

     

    3.1. The
      Company hereby confirms to and agrees with the Bank and Roynat
      that:

     

    
      	(a)  	
              the
                Company’s entry into and performance of this Agreement has been duly
                authorized by all necessary corporate
                action;

            


    

     

    
      	(b)  	
              so
                long as any of the indebtedness of the Company and AZ LIMOS herein
                referred to remains outstanding, it shall stand possessed of its
                assets so
                charged for the Bank and for Roynat in accordance with their respective
                interests and priorities as herein set out;
                and

            


    

     

    
      	(c)  	
              none
                of the provisions of this Agreement create any rights in favor of
                the
                Company or affect the manner in which the Bank or Roynat or any receiver
                and manager appointed by them over the property, assets and undertaking
                of
                the Company exercises its rights under the Bank Security and the
                Roynat
                Security.

            


    

     

    ARTICLE
      4.
      - GENERAL

     

    4.1. Information
      Exchange.
      From
      time to time upon request therefor the Bank and Roynat may advise each other
      of
      any information which it may have relating to the affairs of the Company,
      including its business and financial affairs and the particulars of the
      indebtedness and liability of the Company to each other and all security held
      by
      each therefor. The Company hereby consents to any such exchange of
      information.

     

    4.2. No
      Challenge of Priorities.
      No
      party hereto shall take any action to defeat the priorities set forth in this
      Agreement or the validity, perfection, publication or enforceability of any
      lien
      granted under the Bank Security Documents or the Roynat Security Documents.
      Each
      of the Bank and Roynat hereby waives any right the other may have to require
      the
      other to marshal in its favour.

     

    4.3. Further
      Assurances.
      Each of
      the Bank, Roynat and the Company shall do, perform, execute and deliver all
      acts, deeds and documents as may be necessary from time to time to give full
      force and effect to the intent of this Agreement; provided,
      however,
      that no
      consent of the Company shall be necessary to any amendment of the terms hereof
      by the Bank and Roynat unless the interests of the Company are directly affected
      thereby.

     

    4.4. Counterparts.
      This
      Agreement may be executed in several counterparts, each of which when so
      executed shall be deemed to be an original and such counterparts together shall
      constitute one and the same instrument and shall be effective as of the formal
      date hereof.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    4.5. Binding
      Effect.
      This
      Agreement shall inure to the benefit of and be binding upon the parties hereto
      and their respective successors and assigns.

     

    4.6. Conflicting
      Provisions.
      Where
      there is any conflict between the provisions in this Agreement regarding the
      priority of the security of the parties hereto and similar provisions in the
      Bank Security Documents or the Roynat Security Documents, the provisions of
      this
      Agreement will prevail.

     

    4.7. No
      Assignment.
      Neither
      the Bank nor Roynat shall assign all or part of any of its Bank Security or
      Roynat Security, as the case may be, without first obtaining a written agreement
      from the assignee under which the assignee agrees to be bound by the terms
      of
      this Agreement.

     

    4.8. GOVERNING
      LAW.
      THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
      THE
      STATE OF NEW YORK WITHOUT REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
      

     

    4.9. Limitation
      on Liabilities.
      Except
      as otherwise expressly provided herein, neither the Bank nor Roynat shall have
      any liability to the other except to the extent arising from the gross
      negligence or wilful misconduct of such party, nor shall the Bank nor Roynat
      have any liability to the Company for any action or inaction
      hereunder.

     

    5.10 Amendments.
      All
      modifications or amendments of this Agreement must be in writing and duly
      executed by an authorized officer of the Bank and Roynat and, to the extent
      such
      modification or amendment would increase the obligations of the Company
      hereunder, by an authorized officer of the Company.

     

    5.11 Entire
      Agreement.
      This
      Agreement constitutes the entire agreement among the parties with respect to
      the
      subject matter hereof and supersedes all prior negotiations, undertakings,
      representations and understandings.

     

    5.12 Severability.
      If any
      provision hereof is or is deemed to be illegal, invalid or unenforceable in
      any
      jurisdiction, the illegality, invalidity or unenforceability of such provision
      will not affect the legality, validity or enforceability of the remaining
      provisions of this Agreement.

     

    5.13 Termination.
      The
      Bank shall have no further rights or obligations hereunder once the Company’s
      obligations under the Bank Security Documents (except obligations that by their
      terms survive termination thereof) have been paid in full in cash (the
“Bank
      Termination”).
      Roynat shall have no further rights or obligations hereunder once the Company’s
      obligations under the Roynat Security Documents (except obligations that by
      their terms survive termination thereof) have been fully performed (the
“Roynat
      Termination”).
      This
      Agreement shall terminate and be of no further force and effect upon the first
      to occur of the Bank Termination and the Roynat Termination.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

        

        IN
      WITNESS
      WHEREOF
      the
      parties hereto have executed this Agreement under the hands of their duly
      authorized officers.

     

    
      	 	 	 
	 	COUNSEL
              CORPORATION
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

            
	 	Title:


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	ROYNAT
              BUSINES CAPITAL INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

            
	 	Title:


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	C2
              GLOBAL
              TECHNOLOGIES INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

            
	 	Title:


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	C2
              INVESTMENTS INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

            
	 	Title:


    

     

    
      
        
        

      

      
        8