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EXHIBIT 18
6100 95/10 (Computer Generated)
For use in PPSA jurisdictions only
[CIBC LOGO]
05910, Brentwood Shopping Centre
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Branch
SECURITY AGREEMENT
For valuable consideration, the undersigned (the "Customer") agrees with
CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC") as follows:
1. GRANT OF SECURITY. The Customer mortgages, charges and assigns to CIBC,
and grants to CIBC, and CIBC 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 CIBC 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 Liabilities:
[ ] (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)
[ ] (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.
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 the laws of B.C.
ADDITIONAL TERMS AND CONDITIONS. THE ADDITIONAL TERMS AND CONDITIONS
(INCLUDING ANY SCHEDULES) ON THE FOLLOWING PAGES FORM PART OF THIS
AGREEMENT.
The Customer has signed this Agreement on January 31, 2000.
▇▇▇▇▇▇▇▇▇▇.▇▇▇ Corp
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Customer's name in full
/s/ ??? CEO
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Signature
/s/ ??? COO & CFO
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Signature
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Customer's street address
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City/Town, Province and Postal Code
Note: If the Customer is a corporation, the office (such as "President" or
"Secretary") of the person signing should be noted below that person's
signature.
FOR INDIVIDUALS ONLY, record the following information:
Birth Date* Sex
First and second names in full; surname Year Month Day M/F
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* For Alberta, Ontario, Saskatchewan and the Yukon, record: day/month/year.
For British Columbia and Manitoba, New Brunswick and Nova Scotia, record:
year/month/day.
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SCHEDULE A
The following is a description of property included in the Collateral (describe
personal property by item or kind; if space is insufficient, use a separate
sheet):
SCHEDULE B
The following are the Places of Business (if space is insufficient, use a
separate sheet):
City ▇▇▇▇▇▇.▇▇▇ Corp.
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
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ADDITIONAL TERMS AND CONDITIONS
3. PLACES OF BUSINESS. The Customer represents and warrants that the
locations of all existing Places of Business are specified in Schedule
B. The Customer will promptly notify CIBC in writing of any additional
Places of Business as soon as they are established. Subject to section
5, the Collateral will at all times be kept at the Places of Business,
and will not be removed without CIBC's prior written consent.
4. COLLATERAL FREE OF CHARGES. The Customer represents and warrants that
the Collateral is, and agrees that the Collateral will at all times
be, free of any Charge or trust except in favour of CIBC or incurred
with CIBC's prior written consent. CIBC may, but will not have to, pay
any amount or take any action required to remove or redeem any
unauthorized Charge. The Customer will immediately reimburse CIBC for
any amount so paid and will indemnify CIBC in respect of any action so
taken.
5. USE OF COLLATERAL. The Customer will not, without CIBC's prior written
consent, sell, lease or otherwise dispose of any of the Collateral
(other than Inventory, which may be sold, leased or otherwise disposed
of in the ordinary course of the Customer's business). All Proceeds of
the Collateral (including among other things all amounts received in
respect of Receivables), whether or not arising in the ordinary course
of the Customer's business, will be received by the Customer as trustee
for CIBC and will be immediately paid to CIBC.
6. INSURANCE. The Customer will keep the Collateral insured to its full
insurable value against loss or damage by fire and such other risks as
are customarily insured for property similar to the Collateral (and
against such other risks as CIBC may reasonably require). At CIBC's
request, all policies in respect of such insurance will contain a loss
payable clause, and if the Collateral includes real property will
contain a mortgage clause, in favour of CIBC and in any event the
Customer assigns all proceeds of insurance on the Collateral to CIBC.
The Customer will, from time to time at CIBC's request, deliver such
policies (or satisfactory evidence of such policies) to CIBC. If the
Customer does not obtain or maintain such insurance, CIBC may, but will
not have to, do so. The Customer will immediately reimburse CIBC for
any amount so paid. The Customer will promptly give CIBC written notice
of any loss or damage to all or any part of the Collateral.
7. INFORMATION AND INSPECTION. The Customer will from time to time
immediately give CIBC in writing all information requested by CIBC
relating to the Collateral, the Places of Business, and the Customer's
financial or business affairs. The Customer will promptly advise CIBC
of the Serial Number, model year, make and model of each Serial Number
Good at any time included in the Collateral that is held as Equipment,
including in circumstances where the Customer ceases holding such
Serial Number Good as Inventory and begins holding it as Equipment.
CIBC may from time to time inspect any Books and Records and any
Collateral, wherever located. For that purpose CIBC may, without
charge, have access to each Place of Business and to all mechanical or
electronic equipment, devices and processes where any of them may be
stored or from which any of them may be retrieved. The Customer
authorizes any Person holding any Books and Records to make them
available to CIBC, in a readable form, upon request by CIBC.
8. RECEIVABLES. If the Collateral includes Receivables, CIBC may advise
any Person who is liable to make any payment to the Customer of the
existence of this Agreement. CIBC may from time to time confirm with
such Persons the existence and the amount of the Receivables. Upon
Default, CIBC may collect and otherwise deal with the Receivables in
such manner and upon such terms as CIBC considers appropriate.
9. RECEIPTS PRIOR TO DEFAULT. Until Default, all amounts received by CIBC
as Proceeds of the Collateral will be applied on account of the
Liabilities in such manner and at such times as CIBC may consider
appropriate or, at CIBC's option, may be held unappropriated in a
collateral account or released to the Customer.
10. DEFAULT.
(1) EVENTS OF DEFAULT. The occurrence of any of the following events or
conditions will be a Default:
(a) the Customer does not pay any of the Liabilities when due;
(b) the Customer does not observe or perform any of the
Customers's obligations under this Agreement or any other
agreement or document existing at any time between the
Customer and CIBC;
(c) any representation, warranty or statement made by or on
behalf of the Customer to CIBC is untrue in any material
respect at the time when or as of which it was made;
(d) the Customer ceases or threatens to cease to carry on in the
normal course the Customer's business or any material part
thereof;
(e) if the Customer is a corporation, there is, in CIBC's
reasonable opinion, a change in effective control of the
Customer, or if the Customer is a partnership, there is a
dissolution or change in the membership of the partnership;
(f) the Customer becomes insolvent or bankrupt or makes a proposal
or files an assignment for the benefit of creditors under the
Bankruptcy Act (Canada) or similar legislation in Canada or
any other jurisdiction; a petition in bankruptcy is filed
against the Customer; or, if the Customer is a corporation,
steps are taken under any legislation by or against the
Customer seeking its liquidation, winding-up, dissolution or
reorganization or any arrangement or composition of its debts;
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(g) a Receiver, trustee, custodian or other similar
official is appointed in respect of the Customer or
any of the Customer's property;
(h) the holder of a Charge takes possession of all or any
part of the Customer's property, or a distress,
execution or other similar process is levied against
all or any part of such property; or
(i) CIBC, in good faith and upon commercially reasonable
grounds, believes that the prospect of payment or
performance is or is about to be impaired or that the
Collateral is or is about to be placed in jeopardy.
(2) Rights upon Default. Upon Default, CIBC and a Receiver, as
applicable, will to the extent permitted by law have the
following rights.
(a) Appointment of Receiver. CIBC may by instrument in
writing appoint any Person as a Receiver of all or
any part of the Collateral. CIBC 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 CIBC will (for purposes relating to
responsibility for the Receiver's acts or omissions)
be considered to be the Customer's agent. CIBC may
from time to time fix the Receiver's remuneration
and the Customer will pay CIBC the amount of such
remuneration. CIBC 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.
(b) Dealings with the Collateral. CIBC or a Receiver may
take possession of all or any part of the Collateral
and retain it for as long as CIBC 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 payment) as CIBC or the Receiver considers
appropriate. CIBC or the Receiver may (without
charge and to the exclusion of all other Persons
including the Customer) enter upon any Place of
Business.
(c) Realization. CIBC or a Receiver may use, collect,
sell, 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 CIBC or the Receiver considers
appropriate. CIBC 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.
(d) Application of Proceeds After Default. All Proceeds
of Collateral received by CIBC 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 CIBC's
rights under this Agreement), Charges, borrowings,
taxes and other outgoings affecting the Collateral
or which are considered advisable by CIBC 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
Liabilities in such manner and at such times as CIBC
considers appropriate and thereafter will be
accounted for as required by law.
(3) Other Legal Rights. Before and after Default, CIBC 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.
(4) Deficiency. The Customer will remain liable to CIBC for
payment of any Liabilities that are outstanding following
realization of all or any part of the Collateral.
11. CIBC NOT LIABLE. CIBC will not be liable to the 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 CIBC, a Receiver or any agent of CIBC (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 CIBC, a
Receiver or CIBC's agent.
12. CHARGES AND EXPENSES. The Customer agrees to pay on demand all costs
and expenses incurred (including among other things legal fees on a
solicitor and client basis) and fees charged by CIBC in connection
with obtaining or discharging this Agreement or establishing or
confirming the priority of the Charges created by this Agreement or by
law, compliance with any demand by any Person under the PPSA to amend
or discharge any registration relating to this Agreement, and by CIBC
or any Receiver in exercising any remedy under this Agreement
(including among other things preserving, repairing, processing,
preparing for disposition and disposing of the Collateral by sale,
lease or otherwise) and in carrying on the Customer's business. All
such amounts will bear interest from time to time at the highest
interest rate then applicable to any of the Liabilities, and the
Customer will reimburse CIBC upon demand for any amount so paid.
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13. FURTHER ASSURANCES. The Customer will from time to time immediately upon
request by CIBC 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 or any other Charge against any of the Customer's real
property) as CIBC may require in connection with the Collateral or as CIBC
may 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
CIBC's branch specified on the first page of this Agreement as the
Customer's attorney (with full powers of substitution and delegation) to
sign, upon Default, all documents required to give effect to this section.
Nothing in this section affects the right of CIBC as secured party, or any
other Person on CIBC'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 CIBC or such other Person considers appropriate.
14. DEALINGS BY CIBC. CIBC may from time to time increase, 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 CIBC, as CIBC considers appropriate without affecting the Customer's
obligations to CIBC or CIBC's rights under this Agreement.
15. DEFINITIONS. In this Agreement:
"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.
"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.
"DEFAULT" has the meaning set out in subsection 10(1).
"LIABILITIES" means all present and future indebtedness and liability of
every kind, nature and description (whether direct or indirect, joint or
several, absolute or contingent, matured or unmatured) of the Customer to
CIBC, wherever and however incurred and any unpaid balance thereof.
"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.
"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.
"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.
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"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.
16. GENERAL.
(1) Reservation of the Last Day of any Lease. The Charges created by this
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 CIBC and, upon the exercise by CIBC of any of its rights
under this Agreement following Default, will assign such last day as
directed by CIBC.
(2) Attachment of Security Interest. The Security Interests created by 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.
(3) Purchase-Money Security Interest. If CIBC gives value for the 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 CIBC with such evidence in this regard as CIBC
may require), and the Customer grants to CIBC, and CIBC 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 CIBC's authorized representatives is admissible in evidence
to establish the amount of any such value.
(4) Description of Collateral in Schedule A. The fact that box (b) or box
(c) of section 1 has been checked without there being any property
described in Schedule A does not affect the nature or validity of
CIBC'S security in the Collateral.
(5) Entire Agreement. CIBC has not made any representation or 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 contained in this Agreement will require CIBC to make, renew or
extend the time for payment of any loan or other credit accommodation
to the Customer or any other Person.
(6) Additional Security. The Charges created by this Agreement are in
addition and without prejudice to any other Charge now or later held by
CIBC. No Charge held by CIBC will be exclusive of or dependent upon or
merge in any other Charge, and CIBC may exercise its rights under such
Charges independently or in combination.
(7) Joint and Several Liability. If more than one Person signs this
Agreement as the Customer, the obligations of such Persons will be
joint and several.
(8) Severability; Headings. Any provision of this Agreement that is void or
unenforceable is 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.
(9) Interpretation. When the context so requires, the singular will be
read as the plural, and vice versa.
(10) Copy of Agreement. The Customer acknowledges receipt of a copy of this
Agreement.
(11) Waivers. If this Agreement is governed by the laws of Saskatchewan and
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
CIBC under this Agreement or any instrument, Charge, security agreement
or other document of any nature that renews, extends or is collateral
to this Agreement.
(12) Notice. CIBC may send to the Customer, by prepaid regular mail
addressed to the Customer at the Customer's address last known to CIBC,
copies of any documents required by the PPSA to be delivered by CIBC to
the Customer. Any document mailed in this manner will be deemed to have
been received by the Customer upon the earlier of actual receipt by
the Customer and the expiry of 10 days after the mailing date. A
certificate or affidavit of any of CIBC's authorized representatives is
admissible in evidence to establish the mailing date.
(13) Enurement; Assignment. This Agreement will enure to the benefit of and
be binding upon (i) CIBC, its successors and assigns, and (ii) the
Customer and the Customer's heirs, executors, administrators,
successors and permitted assigns. The Customer will not assign this
Agreement without CIBC's prior written consent.
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