THE BOMBAY FURNITURE COMPANY OF CANADA INC. as Grantor and GE CANADA FINANCE HOLDING COMPANY as Canadian Agent AMENDED AND RESTATED CANADIAN SECURITY AGREEMENT MAY 25, 2007
as
Grantor
and
GE
CANADA FINANCE HOLDING COMPANY
as
Canadian Agent
AMENDED
AND RESTATED
MAY
25, 2007
AMENDED
AND RESTATED
CANADIAN
SECURITY
AGREEMENT
Amended
and restated security agreement dated as of May 25, 2007 made by The
Bombay Furniture Company of Canada Inc., a corporation continued and existing
under the laws of the Province of Ontario (together with its successors and
permitted assigns, the “Grantor”)
to and
in favour of GE Canada Finance Holding Company, individually
and as agent (together with its successors and assigns, the “Canadian
Agent”)
for
itself and the Canadian Lenders under the Credit Agreement.
RECITALS:
| (a) |
The
Borrowers, the Lenders, the Administrative Agent and the Canadian
Agent
are parties to a credit agreement dated as of October 24, 2006 (as
amended, modified, extended, renewed, replaced, restated, supplemented
or
refinanced from time to time, the “Credit
Agreement”)
pursuant to which the Lenders provided revolving credit facilities
to the
Borrowers in accordance with the terms set forth
therein;
|
| (b) |
In
connection with the Credit Agreement, the Grantor executed and delivered
in favour of the Canadian Agent (for the benefit of the Secured Parties)
a
security agreement dated as of October 24, 2006 (the “Original
Security Agreement”)
pursuant to which the Grantor granted to the Canadian Agent (for
the
benefit of the Secured Parties) a security interest in and to certain
of
the Grantor’s personal property to secure the payment and performance by
the Grantor of its obligations under the Credit Agreement, the Original
Security Agreement and the other Loan Documents to which it is a
party;
|
| (c) |
The
Borrowers, the Lenders, the Administrative Agent and the Canadian
Agent
are parties to an amending agreement dated as of May 25, 2007 (the
“Amending
Agreement”)
pursuant to which the Lenders have agreed to make certain amendments
to
the Credit Agreement as set forth therein;
|
| (d) |
In
connection with the Amending Agreement, the Grantor, the Lenders,
the
Administrative Agent and the Canadian Agent have agreed to amend
and
restate the Original Security Agreement to provide for such amendments
on
the terms set out herein;
|
| (e) |
It
is a condition precedent to the effectiveness of the amendments
contemplated by the Amending Agreement that the Grantor execute and
deliver this Agreement in favour of the Canadian Agent (for the benefit
of
the Secured Parties); and
|
| (f) |
The
Grantor desires to grant a security interest in and to the Collateral
(as
defined below) to the Canadian Agent (for the benefit of the Secured
Parties) as security for the payment and performance of the Grantor’s
obligations under the Credit Agreement, this Agreement and the other
Loan
Documents to which it is a party.
|
In
consideration of the foregoing and other good and valuable consideration, the
receipt and adequacy of which are acknowledged, the parties agree as
follows.
ARTICLE 1
INTERPRETATION
Section 1.1 Defined
Terms.
As
used
in this Agreement, the following terms have the following meanings:
“Account
Debtor”
means
any Person who is or who may become obligated under, with respect to, or on
account of, an Account.
“Administrative
Agent”
means
General Electric Capital Corporation, acting as administrative agent and
collateral agent for the Lenders under the Credit Agreement and any successor
agent appointed under the Credit Agreement, and its successors and permitted
assigns.
“Agreement”
means
this amended and restated security agreement and all schedules attached hereto,
as the same may be amended, restated, supplemented and otherwise modified from
time to time.
“Books” means
all
of the Grantor’s now owned or hereafter acquired books and records (including
all of its Records indicating, summarizing or evidencing its assets (including
the Collateral) or liabilities, all of the Grantor’s Records relating to its
business operations or financial condition, and all of the Grantor’s goods or
intangibles related to such information).
“Canadian
Lender”
means
each Lender organized and operating under the laws of Canada or a province
thereof, which has a Canadian Revolving Credit Commitment, holds Canadian
Revolving Loans or participates in any Canadian Swing Loan.
“Collateral”
has
the
meaning specified in Section 2.1.
“Collections”
means
all cash, cheques, credit card slips or receipts, notes, instruments, and other
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds) of the Grantor relating to, arising out of, or
forming part of, the Collateral.
“Contracts”
means
all contracts, licences and agreements to which the Grantor is at any time
a
party or pursuant to which the Grantor has at any time acquired rights, and
includes (i) all rights of the Grantor to receive money due and to become due
to
it in connection with a contract, licence or agreement, (ii) all rights of
the
Grantor to damages arising out of, or for breach or default in respect of,
a
contract, licence or agreement, and (iii) all rights of the Grantor to perform
and exercise all remedies in connection with a contract, licence or
agreement.
“Control
Agreement”
means
an agreement, in form and substance satisfactory to Canadian Agent, executed
and
delivered by the Grantor, the Canadian Agent, and the applicable Securities
Intermediary or bank, which agreement is sufficient to give the Canadian Agent
“control” over the subject Deposit Account or Investment Property.
“Credit
Agreement”
has
the
meaning specified in the Recitals.
2
“Deposit
Account”
means
any chequing or other deposit account (including any
demand, time, savings, passbook, or similar account maintained with a
bank).
“Expenses”
means
all expenses, costs and charges incurred by or on behalf of the Secured Parties
in connection with this Agreement, the Security Interest or the Collateral,
including all legal fees, court costs, receiver's or agent's remuneration and
other expenses of taking possession of, repairing, protecting, insuring,
preparing for disposition, realizing, collecting, selling, transferring,
delivering or obtaining payment for the Collateral, and of taking, defending
or
participating in any action or proceeding in connection with any of the
foregoing matters or otherwise in connection with the Secured Parties' interest
in any Collateral, whether or not directly relating to the enforcement of this
Agreement or any other Loan Document to which the Grantor is a
party.
“Intellectual
Property”
means
domestic and foreign: (i) patents, applications for patents and reissues,
divisions, continuations, renewals, extensions and continuations-in-part of
patents or patent applications; (ii) proprietary and non-public business
information, including inventions (whether patentable or not), invention
disclosures, improvements, discoveries, trade secrets, confidential information,
know-how, methods, processes, designs, technology, technical data, schematics,
formulae and customer lists, and documentation relating to any of the foregoing;
(iii) copyrights, copyright registrations and applications for copyright
registration; (iv) mask works, mask work registrations and applications for
mask
work registrations; (v) designs, design registrations, design registration
applications and integrated circuit topographies; (vi) trade names, business
names, corporate names, domain names, website names and world wide web
addresses, common law trade-marks, trade-▇▇▇▇ registrations, trade ▇▇▇▇
applications, trade dress and logos, and the goodwill associated with any of
the
foregoing; (vii) computer software and programs (both source code and object
code form), all proprietary rights in the computer software and programs and
all
documentation and other materials related to the computer software and programs;
and (viii) any other intellectual property and industrial property.
“Instruments”
means
(i) a ▇▇▇▇, note or cheque within the meaning of the Bills
of Exchange Act (Canada)
or any other writing that evidences a right to the payment of money and is
of a
type that in the ordinary course of business is transferred by delivery with
any
necessary endorsement or assignment, or (ii) a letter of credit and an advice
of
credit if the letter or advice states that it must be surrendered upon claiming
payment thereunder, or (iii) chattel paper or any other writing that evidences
both a monetary obligation and a security interest in or a lease of specific
goods, or (iv) documents of title or any other writing that purports to be
issued by or addressed to a bailee and purports to cover such goods in the
bailee’s possession as are identified or fungible portions of an identified
mass, and that in the ordinary course of business is treated as establishing
that the Person in possession of it is entitled to receive, hold and dispose
of
the document and the goods it covers, or (v) any document or writing commonly
known as an instrument.
“Investment
Property” means
a
Security, whether certificated or uncertificated, Security Entitlement,
Securities Account, Futures Contract or Futures Account, and any and all
supporting obligations in respect thereof.
3
“Lease”
means
any lease or other agreement, no matter how styled or structured, pursuant
to
which the Grantor is entitled to the use or occupancy of any space.
“Leasehold”
means
any lease, leasehold estate or interest of the Grantor in each of the properties
at or upon which the Grantor conducts business, offers any inventory for sale,
or maintains any of the Collateral, whether or not for retail sale, together
with the Grantor’s interest in any of the improvements and fixtures located upon
or appurtenant to each such estate or interest, including, without limitation,
any rights of the Grantor to payment, proceeds or value of any kind or nature
realized upon the sale, transfer or assignment of any such estate or interest,
whether or not such sale, assignment or transfer occurs during any case
commenced under any bankruptcy proceeding.
“Lenders”
means,
collectively, the financial institutions listed on the signature pages of the
Credit Agreement as Lenders, including the Canadian Lenders, any Person who
may
become a Lender pursuant to the Credit Agreement, and their respective
successors and assigns.
“Loan
Documents”
means,
collectively, the Credit Agreement, this Agreement and each other Loan Document
(as such term is defined in the Credit Agreement).
“Negotiable
Collateral” means
collectively, letters of credit, letter of credit rights, instruments,
promissory notes, drafts, documents of title, documents, and chattel paper
(including electronic chattel paper and tangible chattel paper), and any and
all
supporting obligations in respect thereof arising from the sale of Inventory
or
Accounts.
“Original
Security Agreement”
has
the
meaning specified the Recitals.
“Permits”
means
all permits, licences, waivers, exemptions, consents, certificates,
authorizations, approvals, franchises, rights-of-way, easements and entitlements
that the Grantor has, requires or is required to have, to own, possess or
operate any of its property or to operate and carry on any part of its
business.
“Person”
means
a
natural person, partnership, limited partnership, limited liability partnership,
corporation, limited liability corporation, unlimited liability company, joint
stock company, trust, unincorporated association, joint venture or other entity
or Governmental Entity, and pronouns have a similarly extended
meaning.
“PPSA”
means
the Personal
Property Security Act
(Ontario), as in effect from time to time, including any amendments thereto
and
any statute substituted therefor and amendments thereto.
“Record”
means
information that is inscribed on a tangible medium or which is stored in an
electronic or other medium and is retrievable in perceivable form.
“Restricted
Asset”
has
the
meaning specified in Section 2.6.
“Secured
Parties”
means,
collectively, the Canadian Agent and the Canadian Lenders.
4
“Secured
Obligations”
means
the Obligations (as defined in the Credit Agreement) of the Grantor including,
without limitation, any and all indebtedness, liabilities and obligations,
now
or hereafter existing, direct or indirect, absolute or contingent, as principal
or surety, of the Grantor to the Canadian Agent and the other Secured Parties
or
any of them arising under, by virtue of or otherwise in connection with this
Agreement, the Credit Agreement or any other Loan Document, including all
Expenses incidental thereto.
“Securities”
means:
| (a) |
a
document that is (i) issued in bearer, order or registered form,
(ii) of a
type commonly dealt in upon securities exchanges or markets or commonly
recognized in any area in which it is issued or dealt in as a medium
for
investment, (iii) one of a class or series or by its terms is divisible
into a class or series of documents, and (iv) evidence of a share,
participation or other interest in property or in any enterprise
or is
evidence of an obligation of the issuer and includes an uncertificated
security; and
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| (b) |
a
share, participation or other interest in a
Person.
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“Security
Interest”
has
the
meaning specified in Section 2.2(1).
“U.S.
Advances”
means,
at any time, in each case to the extent outstanding at such time, U.S. Revolving
Loans and Swing Loans made by the U.S. Lenders to the U.S. Borrowers and the
L/C
Obligations for all Letters of Credit issued by GE Capital at the request of
the
Parent.
Section 1.2 Incorporated
Terms.
Whenever
the terms “Accessions”,
“Account”,
“Certificated
Security”,
“Chattel
Paper”,
“Consumer
Goods”,
“Document
of Title”,
“Equipment”,
“Futures
Account”,
“Futures
Contract”,
“Futures
Intermediary”,
“Goods”,
“Intangible”,
“Inventory”,
“Money”,
“Proceeds”,
“Securities
Account”,
“Securities
Intermediary”,
“Security
Entitlement”
and
“Uncertificated
Security”
are
used herein, they shall be interpreted in accordance with their respective
meanings in the PPSA. Capitalized terms used in this Agreement but not defined
have the meanings given to them in the Credit Agreement.
Section 1.3 No
Implied Subordination.
Any
reference herein or in any other Loan Document to a Permitted Lien is not
intended to subordinate or postpone, and shall not be interpreted as
subordinating or postponing, or as any agreement to subordinate or postpone,
any
Lien created by this Agreement, or any of the other Loan Documents, to any
Permitted Lien.
Section 1.4 Certain
Phrases, etc.
In
this
Agreement the words “including”,
“includes”
and
“include” mean
“including (or includes or include) without limitation”. The expressions
“Article”,
“Section”
and
other subdivision followed by a number mean and refer to the specified Article,
Section or other subdivision of this Agreement.
5
Section 1.5 Gender
and Number.
Any
reference in this Agreement to gender includes all genders. Words importing
the
singular number only include the plural and vice versa.
Section 1.6 Headings,
etc.
The
division of this Agreement into Articles, Sections and other subdivisions and
the insertion of headings are for convenient reference only and do not affect
its interpretation.
Section 1.7 Schedules.
The
schedules attached to this Agreement form an integral part of it for all
purposes of it.
Section 1.8 References.
Any
reference to this Agreement, refers to this Agreement as the same may have
been
or may from time to time be amended, modified, extended, renewed, restated,
replaced or supplemented and shall include all schedules to it. Except
as
otherwise provided in this Agreement, any reference in this Agreement to a
statute refers to such statute and all rules and regulations made under it
as
the same may have been or may from time to time be amended or
re-enacted.
ARTICLE 2
SECURITY
Section 2.1 Grant
of Security.
Subject
to Section 2.6, the Grantor grants to the Canadian Agent, for the benefit of
the
Secured Parties, a security interest in, and assigns, mortgages, charges,
hypothecates and pledges to the Canadian Agent, for the benefit of the Secured
Parties, all of the Grantor’s now owned or hereafter acquired right, title and
interest in and to the currently existing and hereafter acquired or arising
personal property of the Grantor, including (collectively the “Collateral”):
(a) Accounts;
(b) Books;
(c) Chattel
Paper;
(d) Contracts;
(e) Deposit
Accounts relating to the Collateral (it being understood and agreed that Deposit
Accounts relating to payroll obligations, tax liabilities and third party funds
shall not be deemed to relate to the Collateral);
(f) Documents
of Title;
(g) Equipment;
(h) Goods;
6
(i) Instruments;
(j) Intangibles;
(k) Intellectual
Property;
(l) Inventory;
(m) Investment
Property;
(n) Leases
and Leaseholds;
(o) Money
or
other assets that now or hereafter come into the possession, custody, or control
of any Secured Party;
(p) Negotiable
Collateral;
(q) Permits;
(r) Securities;
(s) all
substitutions and replacements of and increases, additions and, where
applicable, accessions to the property described in Sections 2.1(a) through
2.1(r) inclusive; and
(t) all
Proceeds in any form derived directly or indirectly from any dealing with all
or
any part of the property described in Sections 2.1(a) through 2.1(r) inclusive,
including the proceeds of such Proceeds and including proceeds of insurance
covering any and all of the foregoing, and any and all Collateral, money, or
other tangible or intangible property resulting from the sale, exchange,
collection, or other disposition of any of the foregoing, or any portion thereof
or interest therein, and the proceeds thereof, wherever located.
Section 2.2 Secured
Obligations.
| (1) |
The
security interest, assignment, mortgage, charge, hypothecation and
pledge
granted by this Agreement (collectively, the “Security
Interest”)
secures the due payment and performance by the Grantor of all of
the
Secured Obligations.
Any reference in this Agreement or in the Loan Documents to which
the
Grantor is a party to the Secured Obligations shall include all
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, and supplements, thereto and thereof, as applicable,
both
prior and subsequent to any Insolvency
Proceeding.
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| (2) |
Notwithstanding
any provision to the contrary in any Loan Document, (i) all Obligations
of
the Grantor under this Agreement and the other Loan Documents are
separate
and individual Obligations of the Grantor from the Obligations of
the U.S.
Borrowers, (ii) the Grantor shall not have any liabilities in respect
of
U.S. Advances made by the U.S. Lenders to the U.S. Borrowers or in
respect
of any other Obligations of the U.S. Borrowers to the Agents or Lenders
arising from or related to U.S. Advances, and (iii) the assets of
the
Grantor shall not serve at any time, directly or indirectly, as security
for the performance of the U.S. Borrowers in respect of U.S. Advances,
made to the U.S Borrowers.
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7
Section 2.3 Other
Collateral
The
Grantor agrees to take the following actions at any time and solely if proceeds
or products of the Collateral constitutes any of the following:
| (a) |
in
the event that any Collateral, including Proceeds of such Collateral,
is
evidenced by or consists of Negotiable Collateral, and if and to
the
extent that the Canadian Agent determines that perfection or priority
of
the Canadian Agent’s Security Interest is dependent on or enhanced by
possession, the Grantor, immediately upon the request of the Canadian
Agent, shall endorse and deliver physical possession of such Negotiable
Collateral to the Canadian Agent accompanied by such instruments
of
transfer or assignment duly executed in blank as the Canadian Agent
may
from time to time specify.
|
| (b) |
if
the Grantor shall acquire any Certificated Securities, the Grantor
shall
forthwith endorse, assign and deliver the same to the Canadian Agent,
accompanied by such instruments of transfer or assignment duly executed
in
blank as the Canadian Agent may from time to time specify. If any
Securities now or hereafter acquired by the Grantor are uncertificated
and
are issued to the Grantor or its nominee directly by the issuer thereof,
the Grantor shall immediately notify the Canadian Agent thereof and,
at
the Canadian Agent’s request and option, either (a) cause the issuer to
enter into a Control Agreement, or (b) pursuant to an agreement in
form
and substance satisfactory to the Canadian Agent, arrange for the
Canadian
Agent to become the registered owner of such Securities. If any
Securities, whether certificated or uncertificated, or other Investment
Property now or hereafter acquired by the Grantor are held by the
Grantor
or its nominee through a Securities Intermediary or Futures Intermediary,
the Grantor shall immediately notify the Canadian Agent thereof and,
at
the Canadian Agent’s request and option, either (i) cause such Securities
Intermediary or (as the case may be) Futures Intermediary to enter
into a
Control Agreement, or (ii) pursuant to an agreement in form and substance
satisfactory to the Canadian Agent, in the case of financial assets
or
other Investment Property held through a Securities Intermediary,
arrange
for the Canadian Agent to become the entitlement holder with respect
to
such Investment Property, with the Grantor being permitted, only
with the
consent of the Canadian Agent, to exercise rights to withdraw or
otherwise
deal with such Investment Property. The provisions of this Section 2.3(b)
shall not apply to any financial assets credited to a Securities
Account
for which the Canadian Agent is the Securities
Intermediary.
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| Section 2.4 |
Collection
of Accounts.
|
At
any
time after the occurrence and during the continuation of an Event of Default,
the Canadian Agent or the Canadian Agent’s designee may (a) notify Account
Debtors of the Grantor that the Grantor’s Accounts have been assigned to the
Canadian Agent or that the Canadian Agent has a security interest therein,
or
(b) collect the Grantor’s Accounts directly and charge the collection costs and
expenses to the Grantor. The Grantor agrees that it will hold in trust for
the
Secured Parties, as the Secured Parties’ trustee, any of its
8
Section 2.5 Attachment.
The
Grantor acknowledges that (i) value has been given, (ii) it has rights in the
Collateral (other than after-acquired Collateral), (iii) it has not agreed
to
postpone the time of attachment of the Security Interest, and (iv) it has
received a duplicate original copy of this Agreement.
Section 2.6 Scope
of Security Interest.
| (1) |
To
the extent that an assignment of amounts payable and other proceeds
arising under or in connection with, or the grant of a security interest
in any agreement, licence, permit or quota of the Grantor, or the
grant of
any licence as contemplated in Section 2.7, would result in the
termination of such agreement, licence, permit or quota (each, a
“Restricted
Asset”),
the Grantor shall hold as trustee all proceeds arising under or in
connection with the Restricted Asset in trust for the Canadian Agent,
for
the benefit of the Secured Parties, and the Security Interest will
constitute a trust created in favour of the Canadian Agent, for the
benefit of the Secured Parties, on the following
basis:
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| (i) |
until
the Security Interest is enforceable, the Grantor is entitled to
receive
all such proceeds; and
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| (ii) |
whenever
the Security Interest is enforceable, (A) all rights of the Grantor
to
receive such proceeds cease and all such proceeds will be immediately
paid
over to the Canadian Agent for the benefit of the Secured Parties,
and (B)
the Grantor will take all actions requested by the Canadian Agent
to
collect and enforce payment and other rights arising under the Restricted
Asset.
|
| (2) |
The
Grantor will use all commercially reasonable efforts to obtain the
consent of each other party to any and all Restricted Assets to the
assignment of such Restricted Asset to the Canadian Agent in accordance
with this Agreement.
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| (3) |
The
Security Interest does not extend to Consumer
Goods.
|
| (4) |
The
Security Interest does not extend or apply to the last day of the
term of
any lease or sublease of real property or any agreement for a lease
or
sublease of real property, now held or hereafter acquired by the
Grantor,
but the Grantor will stand possessed of any such last day upon trust
to
assign and dispose of it as the Canadian Agent may reasonably
direct.
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| (5) |
The
Canadian Agent will not seek to perfect the Security Interest in
Leases
and Leaseholds absent the occurrence of an Event of Default; however,
following the occurrence and during the continuance of an Event of
Default, and upon the receipt of a written request by the Canadian
Agent,
the Grantor shall endeavour to take such action as may reasonably
be
necessary to perfect the Security Interest in,
or
obtain any necessary landlord consents in respect of,
Leases and Leaseholds.
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9
Section 2.7 Grant
of Non-Exclusive Licence.
For
the
purpose of enabling the Canadian Agent to exercise its rights and remedies
under
Article 3 (including, without limitation, in order to take possession of, hold,
preserve, process, assemble, prepare for sale, market for sale, sell or
otherwise dispose of the Collateral) at such time as the Canadian Agent shall
be
lawfully entitled to exercise its rights and remedies under Article 3, the
Grantor hereby (i) grants to the Canadian Agent, for the benefit of the Secured
Parties, a royalty free, non-exclusive, irrevocable, worldwide license, such
license being with respect to the Canadian Agent’s exercise of its rights and
remedies under Article 3 including, without limitation, in connection with
any
completion of the manufacture of Inventory or any sale or other disposition
of
Inventory (a) to use, apply, and affix any trademark, trade name, logo, or
the
like in which the Grantor now or hereafter has rights, (b) to use, license
or
sublicense any Intellectual Property, computer software now owned, held or
hereafter acquired by the Grantor, including in such license access to all
media
such and to the extent to which any of the licensed items may be recorded or
stored and to all computer software programs such and to the extent used for
the
compilation or print out thereof, provided that the Canadian Agent’s use of the
property described in this Section 2.7
will
comply with all applicable law and the terms of any such right of use, and
(c)
to use any and all furniture, fixtures and equipment contained in any premises
owned, operated, leased, sub-leased or otherwise occupied by the Grantor in
connection with the exercise of the Canadian Agent’s rights and remedies under
Article 3, and (ii) without limiting the provisions of Article 3, agrees to
provide the Canadian Agent and/or its agents with access to, and the right
to
use, any such premises owned, operated, leased, sub-leased or otherwise occupied
by the Grantor.
Section 2.8 Care
and Custody of Collateral.
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(1)
|
The
Canadian Agent and the other Secured Parties have no obligation to
keep
Collateral in their respective possession
identifiable.
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|
(2)
|
The
Canadian Agent may, upon the occurrence and during the continuance
of an
Event of Default, (i) notify any Person obligated on an account or
on
chattel paper or any Grantor on an instrument to make payments to
the
Canadian Agent, whether or not the Grantor was previously making
collections on such accounts, chattel paper, instruments, and (ii)
assume
control of any proceeds arising from the
Collateral.
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|
(3)
|
The
Canadian Agent has no obligation to collect dividends,
distributions or interest payable on, or exercise any option or right
in
connection with, any Securities or Instruments. The Canadian Agent
has no
obligation to protect or preserve any Securities or Instruments from
depreciating in value or becoming worthless and is released from
all
responsibility for any loss of value. In the physical keeping of
any
Securities, the Canadian Agent is only obliged to exercise the same
degree
of care as it would exercise with respect to its own Securities kept
at
the same place.
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Section 2.9 Rights
of the Grantor.
| (1) |
Until
the occurrence of an Event of Default which is continuing, the Grantor
is
entitled to vote the Securities that are part of the Collateral and
to
receive all dividends and distributions on such Securities. Upon
the
occurrence and during the continuance of an Event of Default, all
rights
of the Grantor to vote (under any proxy given by the Canadian Agent
(or
its nominee) or otherwise) or to receive distributions or dividends
cease
and all such rights become vested solely and absolutely in the Canadian
Agent.
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10
| (2) |
Any
distributions or dividends received by the Grantor contrary to
Section 2.9(1)
or
any other moneys or property received by the Grantor after the Security
Interest is enforceable will be received as trustee for the Canadian
Agent
and the Secured Parties and shall be immediately paid over to the
Canadian
Agent.
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Section
2.10 Expenses.
The
Grantor is liable for and will pay on demand by the Canadian Agent any and
all
Expenses.
ARTICLE 3
ENFORCEMENT
Section 3.1 Enforcement.
The
Security Interest becomes and is enforceable against the Grantor upon the
occurrence and during the continuance of an Event of Default.
Section 3.2 Remedies.
Whenever
the Security Interest is enforceable, the Canadian Agent may realize upon the
Collateral and enforce the rights of the Canadian Agent and the Secured Parties
by:
| (a) |
entry
onto any premises where Collateral consisting of tangible personal
property may be located;
|
| (b) |
entry
into possession of the Collateral by any method permitted by
law;
|
| (c) |
sale,
grant of options to purchase, lease or dispose of all or any part
of the
Collateral;
|
| (d) |
holding,
storing and keeping idle or operating all or any part of the
Collateral;
|
| (e) |
exercising
and enforcing all rights and remedies of a holder of the Securities
and
Instruments as if the Canadian Agent were the absolute owner thereof
(including, if necessary, causing the Collateral to be registered
in the
name of the Canadian Agent or its nominee if not already
done);
|
| (f) |
collection
of any proceeds arising in respect of the
Collateral;
|
| (g) |
collection,
realization or sale of, or other dealing with, the
Accounts;
|
| (h) |
license
or sublicense, whether on an exclusive or nonexclusive basis, any
Intellectual Property for such term and on such conditions and in
such
manner as the Canadian Agent in its sole judgment determines (taking
into
account such provisions as may be necessary to protect and preserve
such
Intellectual Property);
|
11
| (i) |
instruction
to any bank which has entered into a Control Agreement with the Canadian
Agent to transfer all moneys, securities and instruments held by
such bank
to an account maintained with or by the Canadian
Agent;
|
| (j) |
application
of any moneys constituting Collateral or proceeds thereof in accordance
with Section 5.11;
|
| (k) |
appointment
by instrument in writing of a receiver (which term as used in this
Agreement includes a receiver and manager) or agent of all or any
part of
the Collateral and removal or replacement from time to time of any
receiver or agent;
|
| (l) |
institution
of proceedings in any court of competent jurisdiction for the appointment
of a receiver of all or any part of the
Collateral;
|
| (m) |
institution
of proceedings in any court of competent jurisdiction for sale or
foreclosure of all or any part of the
Collateral;
|
| (n) |
filing
of proofs of claim and other documents to establish claims to the
Collateral in any proceeding relating to the Grantor;
|
| (o) |
dealing
with the Contracts and Permits or any one or more of them to the
same
extent as the Grantor may do, including enforce, realize, sell, assign,
transfer, and require continued performance under or otherwise deal
with
any one or more of them, all on such terms and conditions and at
such time
or times as may seem advisable to the Canadian Agent;
and
|
| (p) |
any
other remedy or proceeding authorized or permitted under the PPSA
and any
other applicable statute or otherwise by contract, law or in
equity.
|
Section 3.3 Additional
Rights.
In
addition to the remedies set forth in Section 3.2
and
elsewhere in this Agreement, whenever the Security Interest is enforceable,
the
Canadian Agent may:
| (a) |
require
the Grantor, at the Grantor's expense, to assemble the Collateral
at a
place or places designated by notice in writing and the Grantor agrees
to
so assemble the Collateral immediately upon receipt of such
notice;
|
| (b) |
require
the Grantor, by notice in writing, to disclose to the Canadian Agent
the
location or locations of the Collateral and the Grantor agrees to
promptly
make such disclosure when so
required;
|
| (c) |
repair,
process, modify, complete or otherwise deal with the Collateral and
prepare for the disposition of the Collateral, whether on the premises
of
the Grantor or otherwise;
|
| (d) |
redeem
any prior security interest against any Collateral, procure the transfer
of such security interest to itself, or settle and pass the accounts
of
the prior mortgagee, chargee or encumbrancer (any accounts to be
conclusive and binding on Grantor);
|
12
| (e) |
pay
any liability secured by any Lien against any Collateral (the Grantor
will
immediately on demand reimburse the Canadian Agent for all such
payments);
|
| (f) |
carry
on all or any part of the business of the Grantor and, to the exclusion
of
all others including the Grantor, enter upon, occupy and use all
or any of
the premises, buildings, and other property of or used by the Grantor
for
such time as the Canadian Agent sees fit, free of charge, and the
Canadian
Agent and the Secured Parties are not liable to the Grantor for any
act,
omission or negligence (other than their own gross negligence or
wilful
misconduct) in so doing or for any rent, charges, depreciation or
damages
incurred in connection with or resulting from such
action;
|
| (g) |
borrow
for the purpose of carrying on the business of the Grantor or for
the
maintenance, preservation or protection of the Collateral and grant
a
security interest in the Collateral, whether or not in priority to
the
Security Interest, to secure repayment;
|
| (h) |
commence,
continue or defend any judicial or administrative proceedings for
the
purpose of protecting, seizing, collecting, realizing or obtaining
possession or payment of the Collateral, and give good and valid
receipts
and discharges in respect of the Collateral and compromise or give
time
for the payment or performance of all or any part of the accounts
or any
other obligation of any third party to the Grantor;
and
|
| (i) |
at
any public sale, and to the extent permitted by law on any private
sale,
bid for and purchase any or all of the Collateral offered for sale
and
upon compliance with the terms of such sale, hold, retain and dispose
of
such Collateral without any further accountability to the Grantor
or any
other Person with respect to such holding, retention or disposition,
except as required by law. In any such sale to the Canadian Agent,
the
Canadian Agent may, for the purpose of making payment for all or
any part
of the Collateral so purchased, use any claim for Secured Obligations
then
due and payable to it as a credit against the purchase
price.
|
Section 3.4 Exercise
of Remedies.
The
remedies under Section 3.2
and
Section 3.3
may be
exercised from time to time separately or in combination and are in addition
to,
and not in substitution for, any other rights of the Canadian Agent and the
Secured Parties however arising or created. The Canadian Agent and the Secured
Parties are not bound to exercise any right or remedy, and the exercise of
rights and remedies is without prejudice to the rights of the Canadian Agent
and
the Secured Parties in respect of the Secured Obligations including the right
to
claim for any deficiency.
Section 3.5 Receiver's
Powers.
| (1) |
Any
receiver appointed by the Canadian Agent is vested with the rights
and
remedies which could have been exercised by the Canadian Agent in
respect
of the Grantor or the Collateral and such other powers and discretions
as
are granted in the instrument of appointment and any supplemental
instruments. The identity of the receiver, its replacement and its
remuneration are within the sole and unfettered discretion of the
Canadian
Agent.
|
13
| (2) |
Any
receiver appointed by the Canadian Agent will act as agent for the
Canadian Agent for the purposes of taking possession of the Collateral,
but otherwise and for all other purposes (except as provided below),
as
agent for the Grantor. The receiver may sell, lease, or otherwise
dispose
of Collateral as agent for the Grantor or as agent for the Canadian
Agent
as the Canadian Agent may determine in its discretion. The Grantor
agrees
to ratify and confirm all actions of the receiver acting as agent
for the
Grantor, and to release and indemnify the receiver in respect of
all such
actions save and except for any wilful misconduct or gross negligence
of
such receiver.
|
| (3) |
The
Canadian Agent, in appointing or refraining from appointing any receiver,
does not incur liability to the receiver, the Grantor or otherwise
and is
not responsible for any wilful misconduct or gross negligence of
such
receiver.
|
Section 3.6 Appointment
of Attorney.
The
Grantor hereby irrevocably constitutes and appoints the Canadian Agent (and
any
officer of the Canadian Agent) the true and lawful attorney of the Grantor.
As
the attorney of the Grantor, the Canadian Agent has the power to exercise for
and in the name of the Grantor with full power of substitution, upon
the
occurrence and during the continuance of an Event of Default,
any of
the Grantor's right (including the right of disposal), title and interest in
and
to the Collateral including the execution, endorsement, delivery and transfer
of
the Collateral to the Canadian Agent, its nominees or transferees, and the
Canadian Agent and its nominees or transferees are hereby empowered to exercise
all rights and powers and to perform all acts of ownership with respect to
the
Collateral to the same extent as the Grantor might do. All acts of the attorney
are ratified and approved, and the attorney is not liable for any act, failure
to act or any other matter or thing, except for its own gross negligence or
wilful misconduct. This power of attorney is irrevocable, is coupled with an
interest, has been given for valuable consideration (the receipt and adequacy
of
which is acknowledged) and survives, and does not terminate upon, the
bankruptcy, dissolution, winding up or insolvency of the Grantor. This power
of
attorney extends to and is binding upon the Grantor’s successors and permitted
assigns. The
Grantor authorizes the Canadian Agent to delegate in writing to another person
any power and authority of the Canadian Agent under this power of attorney
as
may be necessary or desirable in the opinion of the Canadian Agent, and to
revoke or suspend such delegation.
Section 3.7 Dealing
with the Collateral.
| (1) |
The
Canadian Agent and the Secured Parties are not obliged to exhaust
their
recourse against the Grantor or any other Person or against any other
security they may hold in respect of the Secured Obligations before
realizing upon or otherwise dealing with the Collateral in such manner
as
the Canadian Agent may consider
desirable.
|
| (2) |
The
Canadian Agent and the Secured Parties may grant extensions or other
indulgences, take and give up securities, accept compositions, grant
releases and discharges and otherwise deal with the Grantor and with
other
Persons, sureties or securities as they may see fit without prejudice
to
the Secured Obligations, the liability of the Grantor or the rights
of the
Canadian Agent and the Secured Parties in respect of the
Collateral.
|
| (3) |
Except
as otherwise provided by law or this Agreement, the Canadian Agent
and the
Secured Parties are not (i) liable or accountable for any failure
to
collect, realize or obtain payment in respect of the Collateral,
(ii)
bound to institute proceedings for the purpose of collecting, enforcing,
realizing or obtaining payment of the Collateral or for the purpose
of
preserving any rights of any persons in respect of the Collateral,
(iii)
responsible for any loss occasioned by any sale or other dealing
with the
Collateral or by the retention of or failure to sell or otherwise
deal
with the Collateral, or (iv) bound to protect the Collateral from
depreciating in value or becoming
worthless.
|
14
Section 3.8 Standards
of Sale.
Without
prejudice to the ability of the Canadian Agent to dispose of the Collateral
in
any manner which is commercially reasonable, the Grantor acknowledges
that:
| (a) |
the
Collateral may be disposed of in whole or in
part;
|
| (b) |
the
Collateral may be disposed of by public auction, public tender or
private
contract, with or without advertising and without any other
formality;
|
| (c) |
any
assignee of such Collateral may be the Canadian Agent, a Secured
Party or
a customer of any such Person;
|
| (d) |
any
sale conducted by the Canadian Agent will be at such time and place,
on
such notice and in accordance with such procedures as the Canadian
Agent,
in its sole discretion, may deem
advantageous;
|
| (e) |
the
Collateral may be disposed of in any manner and on any terms necessary
to
avoid violation of applicable law (including compliance with such
procedures as may restrict the number of prospective bidders and
purchasers, require that the prospective bidders and purchasers have
certain qualifications, and restrict the prospective bidders and
purchasers to persons who will represent and agree that they are
purchasing for their own account for investment and not with a view
to the
distribution or resale of the Collateral) or in order to obtain any
required approval of the disposition (or of the resulting purchase)
by any
governmental or regulatory authority or
official;
|
| (f) |
a
disposition of the Collateral may be on such terms and conditions
as to
credit or otherwise as the Canadian Agent, in its sole discretion,
may
deem advantageous; and
|
| (g) |
the
Canadian Agent may establish an upset or reserve bid or price in
respect
of the Collateral.
|
Section 3.9 Dealings
by Third Parties.
| (1) |
No
Person dealing with the Canadian Agent, any of the Secured Parties
or an
agent or receiver is required to determine (i) whether the Security
Interest has become enforceable, (ii) whether the powers which such
Person
is purporting to exercise have become exercisable, (iii) whether
any money
remains due to the Canadian Agent or the Secured Parties by the Grantor,
(iv) the necessity or expediency of the stipulations and conditions
subject to which any sale or lease is made, (v) the propriety or
regularity of any sale or other dealing by the Canadian Agent or
any
Secured Party with the Collateral, or (vi) how any money paid to
the
Canadian Agent or the Secured Parties has been
applied.
|
15
| (2) |
Any
bona
fide
purchaser of all or any part of the Collateral from the Canadian
Agent or
any receiver or agent will hold the Collateral absolutely, free from
any
claim or right of whatever kind, including any equity of redemption,
of
the Grantor, which it specifically waives (to the fullest extent
permitted
by law) as against any such purchaser together with all rights of
redemption, stay or appraisal which the Grantor has or may have under
any
rule of law or statute now existing or hereafter
adopted.
|
Section 3.10 Registration
Rights.
If
the
Canadian Agent determines to exercise its right to sell any or all of the
Securities that are Collateral, and if in the opinion of the Canadian Agent
it
is necessary or advisable to have any such Securities:
| (a) |
qualified
for distribution by prospectus pursuant to the applicable securities
legislation in any or all provinces and territories of Canada, the
Grantor
will cause the issuer thereof to (i) use its best efforts to file,
and
obtain a receipt from the applicable securities regulatory authorities,
for a preliminary and final prospectus offering for sale such number
of
Securities as the Canadian Agent directs; and (ii) execute and deliver,
and cause the directors and officers of such issuer to execute and
deliver, all such certificates, instruments and documents, and do
or cause
to be done all such other acts as may be, in the opinion of the Canadian
Agent, necessary or advisable to qualify such Securities for distribution
by prospectus pursuant to the applicable securities legislation in
any or
all provinces of Canada; or
|
| (b) |
sold
or registered under the provisions of the U.S. Securities Act of
1933, as
amended, the Grantor will cause the issuer thereof to (i) execute
and
deliver, and cause the directors and officers of such issuer to execute
and deliver, all such instruments and documents, and do or cause
to be
done all such other acts as may be, in the opinion of the Canadian
Agent,
necessary or advisable to register the Securities pledged hereunder,
or
that portion thereof to be sold, under the provisions of the U.S.
Securities Act of 1933, as amended, (ii) use its best efforts to
cause the
registration statement relating thereto to become effective and to
remain
effective for a period of one year from the date of the first public
offering of the Securities pledged hereunder, or that portion thereof
to
be sold, and (iii) make all amendments thereto and/or to the related
prospectus which, in the opinion of the Canadian Agent, are necessary
or
advisable, all in conformity with the requirements of the U.S. Securities
Act of 1933, as amended, and the rules and regulations applicable
thereto.
|
| (c) |
The
Grantor agrees to cause such issuer to comply with the provisions
of the
securities legislation in effect in any or all of the provinces of
Canada,
the U.S. Securities Act of 1933, as amended, and the securities or
“Blue
Sky” laws of any jurisdictions outside Canada, in each case, which the
Canadian Agent designates.
|
16
ARTICLE 4
REPRESENTATIONS,
WARRANTIES AND COVENANTS
Section 4.1 General
Representations, Warranties and Covenants.
The
Grantor represents and warrants in all material respects and covenants and
agrees, acknowledging and confirming that the Canadian Agent and each Secured
Party is relying on such representations, warranties, covenants and agreements,
that:
| (a) |
Ownership
of Collateral.
The Grantor is the sole owner of each item of the Collateral upon
which it
purports to grant a Security Interest hereunder, and has good and
marketable title thereto free and clear of any and all Liens other
than
Permitted Liens.
|
| (b) |
Perfection
and Priority.
This Agreement (i) constitutes a legal, valid and binding obligation
of
the Grantor, enforceable against the Grantor in accordance with its
terms
subject only to bankruptcy, insolvency, reorganization, moratorium
and
other similar laws of general application affecting creditors’ rights and
the discretion exercisable by courts of competent jurisdiction in
respect
of the availability of equitable remedies, and (ii) is effective
to create
a valid and continuing Security Interest on and, upon the filing
of the
appropriate financing statements, a perfected Security Interest in
favour
of the Canadian Agent, for the benefit of the Secured Parties, on
the
Collateral with respect to which a security interest may be perfected
by
filing pursuant to the PPSA. The Security Interest is prior to all
other
Liens, except Permitted Liens having priority over the Canadian Agent’s
Lien by operation of law or unless otherwise permitted by any Loan
Document. Except as set forth in this Section 4.1(b), all action
by the
Grantor necessary or desirable to protect and perfect such Security
Interest on each item of the Collateral has been duly taken.
|
| (c) |
Continuous
Perfection.
Schedule A
sets out the Grantor's place of business or, if more than one, the
Grantor’s chief executive office. Such place of business or chief
executive office, as the case may be, has been located at such address
for
the sixty days immediately preceding the date of this Agreement.
Schedule
A
also sets out the address at which the books and records of the Grantor
are located, the address at which senior management of the Grantor
are
located and conduct their deliberations and make their decisions
with
respect to the business of the Grantor and the address from which
the
invoices and accounts of the Grantor are issued. The Grantor will
not
change the location of any of these items, people or addresses without
providing at least thirty (30) days prior written notice to the Canadian
Agent. Except for sales of inventory made in the ordinary course
of
business, the Collateral, to the extent not delivered to the Canadian
Agent pursuant to Section 2.3,
has been kept for the sixty days immediately preceding the date of
this
Agreement and will be kept at those locations listed on Schedule
A,
and the Grantor will not remove the Collateral from such locations,
without providing at least thirty (30) days prior written notice
to the
Canadian Agent. The Grantor will not change its name in any manner
without
providing at least thirty (30) days prior written notice to the Canadian
Agent. The Grantor has not operated under any trade name, fictitious
name
or other name in the last 12 months other than The Bombay Furniture
Company of Canada Inc., La Compagnie de Mobilier Bombay du Canada
Inc.,
The Bombay Company, La Compagnie Bombay, Bombay, and
BombayKIDS.
|
17
| (d) |
Enforcement.
No
Permit, notice to or filing with any Governmental Authority or any
other
Person or any consent from any Person is required for the exercise
by the
Canadian Agent of its rights provided for in this Agreement or the
enforcement of remedies in respect of the Collateral pursuant to
this
Agreement, including the transfer of any Collateral, except any approvals
that may be required to be obtained from any bailees or landlords
to
collect the Collateral.
|
| (e) |
Restriction
on Disposition.
The Grantor will not sell, assign, convey, exchange, lease, release
or
abandon, or otherwise dispose of, any Collateral except as expressly
permitted in Section 7.5 of the Credit
Agreement.
|
| (f) |
Negative
Pledge.
The Grantor will not create or suffer to exist, any Lien on the
Collateral, except for Permitted
Liens.
|
| (g) |
Notice.
The
Grantor shall promptly notify the Canadian Agent in writing of its
acquisition of any interest hereafter in property constituting Collateral
that is of a type where a security interest or lien must be or may
be
registered, recorded or filed under, or notice thereof given under,
any
statute or regulation.
|
| (h) |
Securities
and Instruments.
|
| (i) |
No
Person has or will have any written or oral option, warrant, right,
call,
commitment, conversion right, right of exchange or other agreement
or any
right or privilege (whether by law, pre-emptive or contractual) capable
of
becoming an option, warrant, right, call, commitment, conversion
right,
right of exchange or other agreement to acquire any right or interest
in
any of the Securities and Instruments that are
Collateral.
|
| (ii) |
The
Securities and Instruments that are Collateral constitute, where
applicable, the legal, valid and binding obligation of the obligor
of such
Securities and Instruments, enforceable in accordance with their
terms,
subject only to any limitation under applicable laws relating to
(x)
bankruptcy, insolvency, fraudulent conveyance, arrangement, reorganization
or creditors’ rights generally, and (y) the discretion that a court may
exercise in the granting of equitable
remedies.
|
| (iii) |
The
pledge, assignment and delivery to the Canadian Agent of the Collateral
consisting of Certificated Securities pursuant to this Agreement
creates a
valid and perfected first priority security interest in such Certificated
Securities, and the proceeds of them. Such Securities and the proceeds
from them are not subject to any prior Lien or any agreement purporting
to
grant to any third party a Lien on the property or assets of the
Grantor
which would include the Securities. The Canadian Agent is entitled
to all
the rights, priorities and benefits afforded by the PPSA or other
relevant
personal property securities legislation as enacted in any relevant
jurisdiction to perfect security interests in respect of such
Collateral.
|
18
| (i) |
Perfection
and Protection of Security Interest.
The Grantor will perform, execute and deliver, all acts, agreements
and
other documents requested by the Canadian Agent at any time to register,
file, signify, publish, perfect, maintain, protect, and enforce the
Security Interest including (i) executing, recording and filing of
financing or other statements, in form and substance satisfactory
to the
Canadian Agent and paying all taxes, fees and other charges payable,
(ii)
placing notations on its books of account to disclose the Security
Interest, and (iii) taking such other steps as are deemed necessary
by the
Canadian Agent to maintain the Security
Interest.
|
| (j) |
Representations
and Warranties of the Credit Agreement. The
representations and warranties made by the Grantor in Article IV
of the
Credit Agreement are true and correct in all material respects on
each
date as required by Section 3.2(b) of the Credit
Agreement.
|
| (k) |
Compliance
with Credit Agreement.
The Grantor agrees to comply with all covenants and other provisions
applicable to it under the Credit Agreement, including Sections
2.17,
10.3
and 10.4
of
the Credit Agreement.
|
ARTICLE 5
GENERAL
Section 5.1 Notices.
Any
notices, directions or other communications provided for in this Agreement
must
be in writing and given in accordance with the Credit Agreement.
Section 5.2 Discharge.
The
Security Interest will be discharged upon, but only upon, (i) full and
indefeasible payment and performance of the Secured Obligations, and (ii) the
Canadian Agent and the Secured Parties having no obligations under any Loan
Document. Upon discharge of the Security Interest and at the request and expense
of the Grantor, the Canadian Agent will execute and deliver to the Grantor
such
releases, discharges, financing statements and other documents or instruments
as
the Grantor may reasonably require and the Canadian Agent will redeliver to
the
Grantor, or as the Grantor may otherwise direct the Canadian Agent, any
Collateral in its possession.
Section 5.3 No
Merger, Survival of Representations and Warranties.
This
Agreement does not operate by way of merger of any of the Secured Obligations
and no judgment recovered by the Canadian Agent or any of the Secured Parties
will operate by way of merger of, or in any way affect, the Security Interest,
which is in addition to, and not in substitution for, any other security now
or
hereafter held by the Canadian Agent and the Secured Parties in respect of
the
Secured Obligations.
19
Section 5.4 Further
Assurances.
The
Grantor will do all acts and things and execute and deliver, or cause to be
executed and delivered, all documents and instruments that the Canadian Agent
may require and take all further steps relating to the Collateral or any other
property or assets of the Grantor that the Canadian Agent may require for (i)
protecting the Collateral, (ii) perfecting the Security Interest, and (iii)
exercising all powers, authorities and discretions conferred upon the Canadian
Agent. After the Security Interest becomes enforceable, the Grantor will do
all
acts and things and execute and deliver all transfers, assignments and
instruments that the Canadian Agent may require for facilitating the sale or
other disposition of the Collateral in connection with its realization.
Section 5.5 Supplemental
Security.
This
Agreement is in addition and without prejudice to and supplemental to all other
security now held or which may hereafter be held by the Canadian Agent or the
Secured Parties.
Section 5.6 Successors
and Assigns.
This
Agreement is binding on the Grantor, its successors and assigns, and enures
to
the benefit of the Canadian Agent and its successors and assigns. This Agreement
may be assigned by the Canadian Agent without the consent of, or notice to,
the
Grantor, to such Person as the Canadian Agent may determine and, in such event,
such Person will be entitled to all of the rights and remedies of the Canadian
Agent as set forth in this Agreement or otherwise. In any action brought by
an
assignee to enforce any such right or remedy, the Grantor will not assert
against the assignee any claim or defence which the Grantor now has or may
have
against the Canadian Agent or any of the Secured Parties. The Grantor may not
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Canadian Agent which may
be
unreasonably withheld.
Section 5.7 Amalgamation
The
Grantor acknowledges and agrees that in the event it amalgamates with any other
corporation or corporations, it is the intention of the parties that the
Security Interest (i) extends to all of the property and undertaking that each
of the amalgamating corporations and the amalgamated corporation then has,
or
thereafter acquires, any right, title, interest in and all right, title and
interest that each of the amalgamating corporations and the amalgamated
corporation then has, or thereafter acquires or has, in any property and
undertaking; and (ii) secures the payment and performance of all debts,
liabilities and obligations, present or future, direct or indirect, absolute
or
contingent, matured or unmatured, at any time or from time to time due or
accruing due and owing by or otherwise payable by each of the amalgamating
corporations and the amalgamated corporation to the Secured Parties at the
time
of amalgamation and any such obligations of the amalgamated corporation to
the
Secured Parties arising after the amalgamation. The Security Interest attaches
to the additional collateral at the time of amalgamation and to any collateral
thereafter owned or acquired by the amalgamated corporation when such becomes
owned or is acquired. Upon any such amalgamation, the defined term “Grantor”
means, collectively, each of the amalgamating corporations and the amalgamated
corporation, the defined term “Collateral” means all of the property and
undertaking and interests described in (i) above, and the defined term “Secured
Obligations” means the obligations described in (ii) above.
20
Section 5.8 Severability.
If
any
court of competent jurisdiction from which no appeal exists or is taken,
determines any provision of this Agreement to be illegal, invalid or
unenforceable, that provision will be severed from this Agreement and the
remaining provisions will remain in full force and effect.
Section 5.9 Amendment.
This
Agreement may only be amended, supplemented or otherwise modified by written
agreement executed by the Canadian Agent (with the consent of the Required
Lenders) and the Grantor.
Section 5.10 Waivers,
etc.
| (1) |
No
consent or waiver by the Canadian Agent or the Secured Parties in
respect
of this Agreement is binding unless made in writing and signed by
an
authorized officer of the Canadian Agent (with the consent of the
Required
Lenders). Any consent or waiver given under this Agreement is effective
only in the specific instance and for the specific purpose for which
given. No waiver of any of the provisions of this Agreement constitutes
a
waiver of any other provision.
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| (2) |
A
failure or delay on the part of the Canadian Agent or the Secured
Parties
in exercising a right under this Agreement does not operate as a
waiver
of, or impair, any right of the Canadian Agent or the Secured Parties
however arising. A single or partial exercise of a right on the part
of
the Canadian Agent or the Secured Parties does not preclude any other
or
further exercise of that right or the exercise of any other right
by the
Canadian Agent or the Secured
Parties.
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Section 5.11 Application
of Proceeds of Security.
All
monies collected by the Canadian Agent upon the enforcement of the Canadian
Agent’s or the Secured Parties’ rights and remedies under this Agreement and the
Liens created hereby, including any sale or other disposition of the Collateral,
together with all other monies received by the Canadian Agent and the Secured
Parties under this Agreement, will be applied as provided in the Credit
Agreement. To
the
extent any other Loan Document requires proceeds of collateral under such Loan
Document to be applied in accordance with the provisions of this Agreement,
the
Canadian Agent or holder under such other Loan Document shall apply such
proceeds in accordance with this Section.
Section 5.12 Conflict
In
the
event of any conflict between the provisions of this Agreement and the
provisions of the Credit Agreement which cannot be resolved by both provisions
being complied with, the provisions contained in the Credit Agreement will
prevail to the extent of such conflict.
Section 5.13 Governing
Law; Jurisdiction
This
Agreement will be governed by, interpreted and enforced in accordance with
the
laws of the Province of Ontario and the federal laws of Canada applicable
therein. Without prejudice to the ability of the Canadian Agent to enforce
this
Agreement in any other proper jurisdiction, the Grantor irrevocably submits
and
attorns to the non-exclusive
21
jurisdiction
of the courts of such Province. The parties irrevocably waive any objection
(including any claim of inconvenient forum) that any of them may now or
hereafter have to the venue of any legal proceeding arising out of or relating
to this Agreement in the courts of such Province.
Section 5.14 Amendment
and Restatement
This
Agreement amends, restates and supersedes in its entirety, the Original Security
Agreement. All references to the Original Security Agreement in any agreement,
document or instrument that is or shall have been executed by the Grantor and
that becomes or remains effective on or after the date hereof, shall hereafter
be a reference to this Agreement.
[SIGNATURE
PAGE FOLLOWS]
22
IN
WITNESS WHEREOF the
Grantor has executed this Agreement as of the date first above written.
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THE
BOMBAY FURNITURE COMPANY OF CANADA INC.,
as
Grantor
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By:_________________________________________
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| Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Vice President
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SCHEDULE
A
LOCATIONS
OF COLLATERAL
Chief
Executive Office:
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Locations
of Collateral and Places of Business:
See
Attachment 1
Locations
of Books and Records:
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Locations
of Senior Management:
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Address
from which Invoices and Accounts are sent:
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