EXHIBIT 10.33
SECURITY AGREEMENT
For valuable consideration, the undersigned (the "Customer") agrees
with Canadian Imperial Bank of Commerce, in its capacity as administrative agent
(the "Agent") under the Credit Agreement made as of January 29, 1999 between the
Customer as borrower, the Agent, as one Lender, and the various other Lenders
(as such term is defined thereunder), (as such credit agreement may be amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") as follows:
1. GRANT OF SECURITY. The Customer mortgages, charges and assigns to
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the Agent, and grants to the Agent, and the Agent takes, a Security
Interest in the property described in the following paragraph or paragraphs
of this section (as applicable in accordance with the NOTE appearing at the
end of this section), and in all property described in any schedules,
documents or listings that the Customer may from time to time sign and
provide to the Agent in connection with this Agreement, and in all present
and future Accessions to, and all Proceeds of, any such property
(collectively, the "Collateral") as a general and continuing collateral
security for the due payment and performance of the Obligations:
[_] (a) SPECIFIC PERSONAL PROPERTY: the Personal Property described in
Schedule A.
[X] (b) ALL PERSONAL PROPERTY: all of the Customer's present and after-
acquired undertaking and Personal Property (including any property
that may be described in Schedule A) but excluding Consumer Goods.
[_] (c) ALL REAL PROPERTY: all of the Customer's present and after-acquired
real property including any property that may be described in
Schedule A), together with all buildings placed, installed or
erected on any such property and all fixtures.
Provided that, notwithstanding the foregoing, nothing in this section 1 shall
mortgage, charge or assign any Intellectual Property (as that term is defined in
the Credit Agreement) but shall grant a security interest therein.
NOTE: CHECK APPROPRIATE BOX OR BOXES TO INDICATE WHICH OF PARAGRAPHS (A),
(B) OR (C) ARE TO APPLY. IF NO BOX IS CHECKED OFF, PARAGRAPH (B) WILL
APPLY.
2. GOVERNING LAW. This Agreement is governed by laws of Manitoba and
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the federal laws of Canada applicable in that Province.
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ADDITIONAL TERMS AND CONDITIONS. THE ADDITIONAL TERMS AND CONDITIONS (INCLUDING
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ANY SCHEDULES) ON THE FOLLOWING PAGES FORM PART OF THIS AGREEMENT.
The Customer has signed this Agreement on January , 1999.
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3578275 CANADA INC.
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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ADDITIONAL TERMS AND CONDITIONS
3. RECEIVABLES. If the Collateral includes Receivables, the Agent
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may, during the continuance of an Event of Default, advise any Person who
is liable to make any payment to the Customer of the existence of this
Agreement. The Agent may from time to time confirm with such Persons the
existence and the amount of the Receivables. During the continuance of an
Event of Default, the Agent may collect and otherwise deal with the
Receivables in such manner and upon such terms as the Agent considers
appropriate.
4. RECEIPTS PRIOR TO DEFAULT. Until and during such time as the
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Obligations are declared to be forthwith due and payable pursuant to
section 9.2 of the Credit Agreement, all amounts received by the Agent as
Proceeds of the Collateral will be applied on account of the Obligations in
such manner and at such times as the Agent may consider appropriate or, at
the Agent's option, may be held unappropriated in a collateral account or
released to the customer.
5. DEFAULT.
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(a) RIGHTS UPON DEFAULT. Upon and during such time as the Obligations are
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declared to be forthwith due and payable pursuant to section 9.2 of
the Credit Agreement, the Agent and the Receiver, as applicable, will
to the extent permitted by law have the following rights.
(i) APPOINTMENT OF RECEIVER. The Agent may by instrument in writing
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appoint any Person as a Receiver of all or any part of the
Collateral. The Agent may from time to time remove or replace a
Receiver, or make application to any court of competent
jurisdiction for the appointment of a Receiver. Any Receiver
appointed by the Agent will (for purposes relating to
responsibility for the Receiver's acts or omissions) be
considered to be the Customer's agent. The Agent may from time to
time fix the Receiver's remuneration and the Customer will pay
the Agent the amount of such remuneration. The Agent will not be
liable to the Customer or any other Person in connection with
appointing or not appointing a Receiver or in connection with the
Receiver's actions or omissions.
(ii) DEALINGS WITH THE COLLATERAL. The Agent or a Receiver may take
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possession of all or any part of the Collateral and retain it for
as long as the Agent or the Receiver considers appropriate,
receive any rents and profits from the Collateral, carry on (or
concur in carrying on) all or any part of the Customer's business
or refrain from doing so, borrow on the security of the
Collateral, repair the Collateral, process the Collateral,
prepare the Collateral for sale, lease or other disposition, and
sell or lease (or concur in selling or leasing) or otherwise
dispose of the Collateral on such terms and conditions (including
among other things by arrangement providing for deferred
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payment) as the Agent or the Receiver considers appropriate. The
Agent or the Receiver may (without charge and to the exclusion
of all other Persons including the Customer) enter upon any
Place of Business.
(iii) REALIZATION. The Agent or a Receiver may use, collect, sell,
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lease or otherwise dispose of, realize upon, release to the
Customer or other Persons and otherwise deal with, the
Collateral in such manner, upon such terms (including among
other things by arrangement providing for deferred payment) and
at such times as the Agent or the Receiver considers
appropriate. The Agent or the Receiver may make any sale, lease
or other disposition of the Collateral in the name of and on
behalf of the Customer or otherwise .
(iv) APPLICATION OF PROCEEDS AFTER DEFAULT. All Proceeds of
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Collateral received by the Agent or a Receiver may be applied to
discharge or satisfy any expenses (including among other things
the Receiver's remuneration and other expenses of enforcing the
Agent's rights under this Agreement), Charges, borrowings, taxes
and other outgoings affecting the Collateral or which are
considered advisable by the Agent or the Receiver to preserve,
repair, process, maintain or enhance the Collateral or prepare
it for sale, lease or other disposition, or to keep in good
standing any Charges on the Collateral ranking in priority to
any Charge created by this Agreement, or to sell, lease or
otherwise dispose of the Collateral. The balance of such
Proceeds will be applied to the Obligations in such manner and
at such times as the Agent consider appropriate and thereafter
will be accounted for as required by law.
(b) OTHER LEGAL RIGHTS. Before and during the continuation of an Event of
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Default, the Agent will have, in addition to the rights specifically
provided in this Agreement, the rights of a secured party under the
PPSA, as well as the rights recognized at law and in equity. No right
will be exclusive of or dependent upon or merge in any other right,
and one or more of such rights may be exercised independently or in
combination from time to time.
(c) DEFICIENCY. The Customer will remain liable to the Agent for payment
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of any Obligations that are outstanding following realization of all
or any part of the Collateral.
6. THE AGENT NOT LIABLE. The Agent will not be liable to the
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Customer or any other Person for any failure or delay in exercising any of
its rights under this Agreement (including among other things any failure
to take possession of, collect or sell, lease or otherwise dispose of, any
Collateral). None of the Agent, a Receiver or any agent of the
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Agent (including, in Alberta any sheriff) is required to take, or will have
any liability for any failure to take or delay in taking, any steps
necessary or advisable to preserve rights against other Persons under any
Chattel Paper, Securities or Instrument in possession of the Agent, a
Receiver or the Agent's agent.
7. FURTHER ASSURANCES. The Customer will from time to time as soon
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as practicable following the request by the Agent take such action
(including among other things the signing and delivery of financing
statements and financing change statements, other schedules, documents or
listings describing property included in the Collateral, further
assignments and other documents, and the registration of this Agreement) as
the Agent may require in connection with the Collateral or as the Agent
might consider necessary to give effect to this Agreement. If permitted by
law, the Customer waives the right to sign or receive a copy of any
financing statement or financing change statement, or any statement issued
by any registry that confirms any registration of a financing statement or
financing change statement, relating to this Agreement. The Customer
irrevocably appoints the Manager or the Acting Manager from time to time of
the Agent's branch specified on the first page of this Agreement as the
Customer's attorney (with full powers of substitution and delegation) to
sign, during the continuance of an Event of Default, all documents required
to give effect to this section. Nothing in this section affects the right
of the Agent as secured party, or any other Person on the Agent's behalf,
to sign and file or deliver (as applicable) all such financing statements,
financing change statements, notices, verification agreements and other
documents relating to the Collateral and this Agreement as the Agent or
such other Person considers appropriate.
8. DEALINGS BY THE AGENT. The Agent may from time to time increase,
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reduce, discontinue or otherwise vary the Customer's credit facilities,
grant extensions of time and other indulgences, take and give up any
Charge, abstain from taking, perfecting or registering any Charge, accept
compositions, grant releases and discharges and otherwise deal with the
Customer, customers of the Customer, guarantors and others, and with the
Collateral and any Charges held by the Agent, as the Agent considers
appropriate without affecting the Customer's obligations to the Agent or
the Agent's rights under this Agreement.
9. DEFINITIONS. In this Agreement;
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"ACCESSIONS", "ACCOUNT", "CHATTEL PAPER", DOCUMENT OF TITLE", "EQUIPMENT",
"GOODS", "INSTRUMENT", INTANGIBLE", "INVENTORY", "PROCEEDS", "PURCHASE-
MONEY SECURITY INTEREST" and "SECURITY INTEREST" have the respective
meanings given to them in the PPSA.
"BOOKS AND RECORDS" means all books, records, files, papers, disks,
documents and other repositories of data recording, evidencing or relating
to the Collateral to which the Customer (or any Person on the Customer's
behalf) has access.
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"CHARGE" means any mortgage, charge, pledge, hypothecation, lien (statutory
or otherwise), assignment, financial lease, title retention agreement or
arrangement, security interest or other encumbrance of any nature however
arising, or any other security agreement or arrangement creating in favour
of any creditor a right in respect of a particular property that is prior
to the right of any other creditor in respect of such property.
"CONSUMER GOODS" has the meaning given to it in the PPSA, except that, if
this Agreement is governed by the laws of the Yukon, it does not include
special consumer goods as that term is defined in the Yukon PPSA.
"EVENT OF DEFAULT" has the meaning ascribed thereto in the Credit
Agreement.
"MONEY" has the meaning given to it in the PPSA or, if there is no such
definition, means a medium of exchange authorized or adopted by the
Parliament of Canada as part of the currency of Canada, or by a foreign
government as part of its currency.
"OBLIGATIONS" has the meaning ascribed thereto as the Credit Agreement.
"PERSON" means any natural person or artificial body (including among
others any firm, corporation or government).
"PERSONAL PROPERTY" means personal property and includes among other things
Inventory, Equipment, Receivables, Books and Records, Chattel Paper, Goods,
Documents of Title, Instruments, Intangibles (including intellectual
property), Money and Securities, and includes all Accessions to such
property.
"PLACE OF BUSINESS" means a location where the Customer carries on business
or where any of the Collateral is located (including any location described
in Schedule B).
"PPSA" means the legislation that applies in the province or territory
noted in section 2 of this Agreement, as such legislation may be amended,
renamed or replaced from time to time (and includes all regulations from
time to time made under such legislation) as follows: in the case of
Ontario, the Personal Property Security Act, 1989; in the case of Alberta,
British Columbia, Manitoba, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island, Saskatchewan and the
Yukon Territory, the Personal Property Security Act; and in the case of any
other province or territory, such legislation as deals generally with
Charges on personal property;
"RECEIVABLES" means all debts, claims and choses in action (including among
other things Accounts and Chattel Paper) now or in the future due or owing
to or owned by the Customer.
"RECEIVER" means a receiver or a receiver and manager.
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"SECURITIES" has the meaning given to it in the PPSA or, if there is no
such definition and the PPSA defines "security" instead, it means the
plural of that term.
"SERIAL NUMBER" means the number that the Person who manufactured or
constructed a Serial Number Good permanently marked or attached to it for
identification purposes or, if applicable, such other number as the PPSA
stipulates as the serial number or vehicle information number to be used
for registration purposes of such Serial Number Good.
"SERIAL NUMBER GOOD" means a motor vehicle, trailer, mobile home, aircraft
airframe, aircraft engine or aircraft propeller, boat or an outboard motor
for a boat.
10. GENERAL.
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(a) RESERVATION OF THE LAST DAY OF ANY LEASE. The Charges created by this
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Agreement do not extend to the last day of the term of any lease or
agreement for lease; however, the Customer will hold such last day in
trust for the Agent and, upon the exercise by the Agent of any of its
rights under this Agreement during the continuation of an Event of
Default, will assign such last day as directed by the Agent.
(b) ATTACHMENT OF SECURITY INTEREST. The Security Interests created by
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this Agreement are intended to attach (i) to existing Collateral when
the Customer signs this Agreement, and (ii) to Collateral subsequently
acquired by the Customer, immediately upon the Customer acquiring any
rights in such Collateral. The parties do not intend to postpone the
attachment of any Security Interest created by this Agreement.
(c) PURCHASE-MONEY SECURITY INTEREST. If the Agent gives value for the
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purpose of enabling the Customer to acquire rights in or to any of the
Collateral, the Customer will in fact apply such value to acquire
those rights (and will provide the Agent with such evidence in this
regard as the Agent may require), the Customer grants to the Agent,
and the Agent takes, a Purchase-Money Security Interest in such
Collateral to the extent that the value is applied to acquire such
rights. A certificate or affidavit of any of the Agent's authorized
representatives is admissible in evidence to establish the amount of
any such value.
(d) DESCRIPTION OF COLLATERAL IN SCHEDULE A. The fact that box (b) or box
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(c) of section 1 has been checked without there being any property
described in Schedule A does not affect the nature or validity of the
Agent's security in the Collateral.
(e) ENTIRE AGREEMENT. The Agent has not made any representation or
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undertaken any obligation in connection with the subject matter of
this Agreement other than as specifically set out in this Agreement,
and in particular nothing continued in this
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Agreement will require the Agent to make, renew or extend the time for
payment of any loan or other credit accommodation to the Customer or
any other Person.
(f) ADDITIONAL SECURITY. The Charges created by this Agreement are in
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addition and without prejudice to any other Charge now or later held
by the Agent. No Charge held by the Agent will be exclusive of or
dependent upon or merge in any other Charge, and the Agent may
exercise its rights under such Charges independently or in
combination.
(g) SEVERABILITY; HEADINGS. Any provision of this Agreement that is void
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or unenforceable in any jurisdiction is, as to that jurisdiction,
ineffective to that extent without invalidating the remaining
provisions of this Agreement. The headings in this Agreement are for
convenience only and do not limit or extend the provisions of this
Agreement.
(h) INTERPRETATION. When the context so requires, the singular will be
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read as the plural, and vice versa.
(i) COPY OF AGREEMENT. The Customer acknowledges receipt of a copy of this
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Agreement.
(j) WAIVERS. If this Agreement is governed by the laws of Saskatchewan and
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the Customer is a corporation, the Customer agrees that The Limitation
of Civil Rights Act, The Land Contracts (Actions) Act and Part IV
(excepting only section 46 of The Saskatchewan Farm Security Act do
not apply insofar as they relate to actions as defined in those Acts,
or insofar as they relate to or affect this Agreement, the rights of
the Agent under this Agreement or any instrument, Charge, security
agreement or other document of any nature that renews, extends or is
collateral to this Agreement.
(k) NOTICE. The Agent may send to the Customer copies of any document
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required by the PPSA to be delivered by the Agent to the Customer in
accordance with the notice provisions of the Credit Agreement.
(l) ENUREMENT ASSIGNMENT. This Agreement will enure to the
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benefit of and be binding upon (i) the Agent, its successors and
assigns, and (ii) the Customer and the Customer's successors and
permitted assigns. The Customer will not assign this Agreement without
the Agent's prior written consent.
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SCHEDULE A
The following is a description of property included in the Collateral.
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SCHEDULE B
The following are the Places of Business (if space is insufficient, use a
separate sheet):
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 210-19700 ▇▇▇▇▇▇▇ By Pass
Winnipeg, Manitoba Langley, British Columbia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇-▇▇▇▇-▇▇▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇