EXHIBIT 10.28
SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated as of the 24th day of July, 2001 made by
Infowave Software, Inc. (the "Borrower"), a corporation incorporated under the
laws of the Province of British Columbia and having its chief executive office
at Xxxxx 000, 0000 Xxxxxxxx Xxxxxxx, Xxxxxxx, XX, X0X 0X0 (facsimile: (604)
473-3799), to and in favour of Xxxxxx Xxxx (the "Lender"), a businessman having
an office at Xxxxx 000, 0000 Xxxxxxxx Xxxxxxx, Xxxxxxx, XX, X0X 0X0 (facsimile
(000) 000-0000).
WHEREAS:
A. The Borrower has entered into a loan agreement dated as of the date hereof
between the Borrower as borrower and the Lender as lender (as such agreement may
at any time or from time to time be amended, supplemented or otherwise modified
or restated, the "Credit Agreement") and the Lender has agreed to advance
certain credit facilities on the terms and conditions set out in the Credit
Agreement.
B. It is a condition of the advance of the said credit facilities by the Lender
that the Borrower execute and deliver this Security Agreement to the Lender as
collateral security for the payment and performance of the Obligations.
NOW THEREFORE WITNESSETH that, in consideration of these premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the Borrower, the Borrower covenants, declares and agrees as
follows:
ARTICLE 1
INTERPRETATION
Section 1.1 Terms Incorporated for Reference. All capitalized terms used
but not otherwise defined in this Security Agreement shall have the meanings
attributed to them in the Credit Agreement. Terms defined in the British
Columbia Personal Property Security Act (as amended from time to time, the
"PPSA") and used but not otherwise defined in this Security Agreement shall have
the same meaning herein.
Section 1.2 Defined Terms. In this Security Agreement, unless there is
something in the subject matter or context inconsistent therewith, the following
words and terms shall have the following meanings:
"Book Accounts" means all debts, accounts, moneys, demands and choses
in action which are now due, owing or accruing due or which may hereafter become
due, owing or accruing due to the Borrower and all claims of whatsoever nature
or kind which the Borrower now has or may hereafter have, in each case in
respect of or arising out of or in connection with the Business, including
claims against the Crown and claims under insurance policies and all the
proceeds and other monies payable thereunder (including bonuses, additions,
profits, interest and all other such amounts); and all Contracts, securities,
bills, notes, lien notes, judgments, chattel mortgages, mortgages and all other
rights and benefits which now are or may hereafter be vested in the Borrower or
anyone on behalf of the Borrower in respect of or as security for any of the
said debts, accounts, moneys, demands, choses in action and claims or any part
thereof; and also all books, accounts, invoices, letters, papers and documents
recording or in any way evidencing or relating to any of the said debts,
accounts, moneys, demands, choses in action and claims or any part thereof;
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"Business" means the business of the Borrower as conducted by it as at
the date hereof and as proposed to be conducted by it hereafter;
"Contracts" means all contracts or agreements relating to the
ownership or conduct of the Business (including, without limitation, all
contractual rights and benefits, options or rights to acquire options thereunder
to which the Borrower is a party (whether by way of assignment or otherwise) in
any form whatsoever, written or verbal, now in existence or hereafter entered
into, including leases, the options to purchase and rights of first refusal),
together in each case with any amendments, supplements, modifications,
extensions, renewals or replacements thereof;
"Credit Agreement" has the meaning set forth in recital A hereof;
"Intellectual Property" has the meaning set forth in Section
2.1(1)(e);
"Inventory" means all inventories of the Borrower wheresoever located
(including, without limitation, such inventory located at, on or about the Lands
or any leasehold property) including, without limitation, finished goods, work
in progress, raw materials, stores, supplies, spare parts and other maintenance
items and merchandise and all other materials and supplies wherever located,
including on or about or in transit to or from the Lands (or otherwise on hand),
to be used or consumed in connection with the processing, manufacture, packing,
shipping, selling or furnishing of products in the Business;
"Lender" means Xxxxxx Xxxx, his heirs, executors, administrators,
successors and assigns;
"Lien" includes any mortgage, pledge, lien, hypothecation, security
interest or other encumbrance or charge (whether fixed, floating or otherwise)
or title retention, any right of set-off (arising otherwise than by operation of
Law) and any deposit of moneys under any agreement or arrangement whereby such
moneys may be withdrawn only upon fulfillment of any conditions as to the
discharge of any other indebtedness or other obligation to any creditor, or any
right of or arrangement of any kind with any creditor to have its claims
satisfied prior to other creditors with or from the proceeds of any properties,
assets or revenues of any kind now owned or hereafter acquired;
"Negotiable Collateral" has the meaning set forth in Section 2.3(2);
"Obligations" has the meaning set forth in Section 2.2(1);
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central bank, monetary authority, commission,
department or instrumentality thereof, or any court, tribunal, grand jury or
arbitrator, whether foreign or domestic;
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a foreign state or political subdivision thereof or
any agency of such state or subdivision;
"PPSA" has the meaning set forth in Section 1.1;
"Security Agreement" means this agreement as supplemented, amended or
otherwise modified, renewed or replaced from time to time.
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ARTICLE 2
SECURITY
Section 2.1 Grant of Security. (1) Subject to Section 2.4, the Borrower
hereby (i) mortgages and charges to the Lender as and by way of a fixed mortgage
and charge; (ii) pledges to the Lender; and (iii) grants to the Lender, a
security interest in all of the Borrower's right, title and interest in and to
all personal property and undertaking of the Borrower now owned or hereafter
acquired (collectively, the "Collateral", and all references thereto herein
include any part thereof) including, without limitation, any and all of the
Borrower's:
(a) Inventory, including, without limitation, goods held for sale or
lease, goods furnished or to be furnished to third parties under
contracts of lease, consignment or service, goods which are raw
materials or work in progress, goods used in or procured for packing,
materials used or consumed in the Business, and the goods described in
Schedule A hereto;
(b) equipment, fixtures and other goods of every kind, type and
description now or hereafter owned, leased or otherwise held by it,
including, without limitation, office equipment, computer equipment,
consumables, machinery, plant, vehicles, licenses including the serial
numbered goods described in Schedule B hereto, all licences and other
rights and all records, files, charts, plans, drawings,
specifications, manuals and documents relating thereto;
(c) Book Accounts and Contracts;
(d) documents of title, chattel paper, instruments, securities and money,
including, without limitation, all proceeds of all policies of
insurance payable as indemnity or compensation for loss of or damage
to any of the Collateral;
(e) intangibles, including, without limitation, all security interests,
goodwill, choses in action and other contractual benefits and (i)
trademarks and rights and interests which are capable of being
protected as trademarks (including service marks, certification marks,
designs, logos, indicia, trade names, corporate names, company names,
business names, fictitious business names, trade styles, and other
source or business identifiers, and applications pertaining thereto),
and including the trade names, trademarks, trademark registrations and
pending applications listed on Schedule C attached hereto, as the same
may be updated hereafter from time to time, and rights to apply for,
register, renew and extend such trademarks and trademark rights, and
all Licenses in respect of any of the above; (ii) all of the
Borrower's right, title and interest in and to all patentable and
unpatentable invention disclosures, patents, patent applications,
industrial designs and industrial design applications, including the
applications and registrations listed on Schedule C attached hereto,
as the same may be updated hereafter from time to time, all reissues,
divisions, renewals and continuations in part, foreign filing rights,
and rights to register, renew and extend such rights, and to request
re-examination and/or reissue of the patents, and all Licenses in
respect of any of the above; (iii) all copyrights, copyright
applications, copyright registrations, know-how, trade secrets,
technical processes, recipes and formulae, and Licenses in respect of
any of the above; (iv) the right (without obligation) to xxx or bring
opposition, expungement or cancellation proceedings in the name of the
Borrower or in the name of the Lender for past, present and future
infringements or violations of any of the intellectual property listed
in paragraphs (i) to
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(iii) above; (v) all general intangibles relating to the foregoing,
including all associated goodwill; (vi) all rights in databases and
data collections and all rights therein throughout the world; (vii)
all rights in computer software including all source code, object
code, firmware, development tools, files records and data and all
documentation relating to the foregoing; (vii) all World Wide Web
addresses, sites and domain names; (ix) all proceeds of and rights
associated with any and all of the foregoing (including, without
limitation, Royalties and claims by the Borrower against third parties
for past, present or future infringement of the Intellectual Property,
including those items listed in the Schedules to this Security
Agreement, or for injury to the goodwill associated with the use of
any of the Trademarks or for breach or enforcement of any License,
Royalties and proceeds of infringement suits) and, to the extent not
otherwise included, all payments under insurance, or any indemnity,
warranty, or guarantee, payable by reason of loss or damage to or
otherwise with respect to the Collateral (collectively, the
"Intellectual Property"); (x) all contracts, licenses, sublicenses and
agreements with respect to, relating to or ancillary to any of the
foregoing; and (xi) any similar, corresponding, or equivalent rights
to any of the foregoing throughout the world;
(f) substitutions and replacements of and increases, additions and, where
applicable, accessions to the property described in Sections
2.1(1)(a)-(e) inclusive; and
(g) proceeds in any form derived directly or indirectly from any dealing
with all or any part of the property described in Sections
2.1(1)(a)-(f) inclusive or the proceeds therefrom.
(2) In addition, the Borrower hereby charges in favour of the Lender by way
of a floating charge, its undertaking and all its property and assets, real and
personal, moveable or immoveable, of whatsoever nature and kind, both present
and future and every interest therein which the Borrower now has or hereafter
acquires (other than the property and assets hereby effectively assigned or
subjected to a specific mortgage and charge and subject to the exceptions
hereinafter contained).
(3) Without limiting the generality of the foregoing, the Collateral shall
include all personal property of the Borrower now or hereafter located on or
about or in transit to or from the locations set out in Schedule D hereto. The
Borrower shall promptly inform the Lender in writing of any other location at
which the Collateral consisting of tangible personal property may in future be
located.
Section 2.2 Obligations Secured. (1) The mortgages, charges, pledges,
transfers, assignments and security interests granted hereby (collectively, the
"Lien hereof") shall be continuing collateral security for the due payment and
performance of all debts, liabilities and obligations, present or future, direct
or indirect, absolute or contingent, matured or unmatured, joint or several or
joint and several, at any time due or accruing due of the Borrower to the Lender
under the Credit Agreement, any other Credit Facility Documents or otherwise
howsoever incurred, and whether incurred as principal or surety (collectively,
and together with the expenses, costs and charges set out in Section 2.2(2), the
"Obligations").
(2) All expenses, costs and charges incurred by or on behalf of the Lender
in connection with the preparation and issuance of this Security Agreement, the
perfection, preservation and protection of the Lien hereof and the enforcement
of the Lender's rights and remedies hereunder, including the realization of the
Collateral, and including all legal fees (on a solicitor and solicitor's own
client basis) and disbursements, 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 of the Collateral, shall be added to and form a
part of the Obligations.
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Section 2.3 Attachment. (1) The Borrower and the Lender hereby acknowledge
that (i) value has been given; (ii) the Borrower has rights in the Collateral
(other than after-acquired Collateral); and (iii) they have not agreed to
postpone the time of attachment of the Lien hereof.
(2) If the Borrower acquires Collateral consisting of chattel paper,
instruments, securities or negotiable documents of title (collectively,
"Negotiable Collateral") after the date hereof, the Borrower will, forthwith
upon receipt by the Borrower, deliver to the Lender such Negotiable Collateral
and shall, at the request of the Lender (i) cause the transfer thereof to the
Lender to be registered wherever, in the reasonable opinion of the Lender, such
registration may be required or advisable, (ii) duly endorse the same for
transfer in blank or as the Lender may direct, and (iii) forthwith deliver to
the Lender all consents or other instruments or documents which may be necessary
to effect the transfer of the Negotiable Collateral to the Lender or its nominee
or, upon the enforcement of the Lien hereof, any third party.
(3) The Borrower agrees to promptly inform the Lender in writing of the
acquisition by the Borrower of any personal property which is not adequately
described herein, and the Borrower agrees to execute and deliver at its own
expense from time to time amendments to this Security Agreement or the schedules
hereto or additional Security Agreements or schedules as may be required by the
Lender in order that the Lien hereof shall attach to such personal property.
Section 2.4 Scope of Lien. (1) Nothing in Section 2.1 shall be construed as
an assignment by the Borrower (which term shall include a sub-lease, mortgage,
pledge or charge) of any Contract, Book Account, claim, demand or chose in
action which, as a matter of Law or by its terms, is non-assignable without the
Consent or Authorization of some other person unless such Consent or
Authorization has been obtained. To the extent that the creation of the Lien
hereof would constitute a breach or permit the acceleration of any agreement
right, license or permit to which the Borrower is a party, the Lien hereof shall
not attach thereto but the Borrower shall hold its interest therein in trust for
the Lender, and, in the case of any such potential breach or acceleration of any
agreement, right, license or permit, shall use all reasonable efforts to obtain
the consent of the other party thereto. Upon the Borrower obtaining the consent
of such other party, the Lien hereof shall be deemed to have automatically
attached to such agreement, right, license or permit, as the case may be.
(2) Until the Lien hereof shall have become enforceable, the grant of the
Lien hereof in the Intellectual Property shall not affect in any way the
Borrower's rights to commercially exploit the Intellectual Property, to defend
the Intellectual Property, to enforce the Borrower's rights therein or with
respect thereto against third parties in any court or to claim and be entitled
to receive any damages with respect to any infringement thereof.
(3) The Lien hereof shall not extend to consumer goods.
(4) The Lien hereof shall not extend or apply to the last day of any term
of years reserved by a lease, verbal or written, or any agreement therefor, now
held or hereafter acquired by the Borrower in respect of real property but the
Borrower shall stand possessed of any such reversion in trust to assign and
dispose thereof as the Lender may direct.
(5) The Lender will not be deemed in any manner to have assumed any
obligation of the Borrower under any Contracts nor shall the Lender be liable to
any Official Body or contract counterparties by reason of any default by any
person under any contract. The Borrower agrees to indemnify and hold the Lender
harmless of and from all liability, loss, damage or expense which it may or
might incur by reason of any claim or demand against it based on its alleged
assumption of the
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Borrower's duty and obligation to perform and discharge the terms, covenants and
agreements in any Contract.
(6) The Lien hereof shall not constitute an assignment of the Intellectual
Property for purposes of the Patent Act (Canada) or the Copyright Act (Canada)
and shall not impose any obligation on the Lender to prosecute or defend any
application to register the Intellectual Property or to pay maintenance fees.
(7) It is expressly acknowledged by the Borrower that, notwithstanding any
right or authority granted to the Borrower herein or in any other agreement or
instrument to deal with the Collateral, it is the intention of the Borrower and
the Lender that (i) the Lien hereof shall operate and be construed as a fixed
and specific charge of all Collateral in respect of which the Borrower presently
has rights, and as a fixed and specific charge of all after-acquired Collateral
which shall attach forthwith upon the Borrower acquiring rights therein, and
(ii) except as provided in Section 2.1(2), the Lien hereof shall neither operate
nor be construed as a floating charge.
Section 2.5 The Lender's Care and Custody of Collateral. (1) The Lender
shall not be bound to collect, dispose of, realize, protect or enforce any of
the Borrower's right, title and interest in and to the Collateral or to
institute proceedings for the purpose thereof and, without limiting the
generality of the foregoing, the Lender shall not be required to take any steps
necessary to preserve rights against prior parties in respect of any Negotiable
Collateral.
(2) The Lender shall have no obligation to keep Collateral in its
possession identifiable.
(3) The Lender may, both before and after the Lien hereof shall have become
enforceable, (i) notify any person obligated on a Book Account or on chattel
paper or any obligor on an instrument to make payment thereunder to the Lender
whether or not the Borrower was theretofore making collections thereon, and (ii)
assume control of any proceeds arising from the Collateral.
Section 2.6 The Borrower's Dealings with Collateral. The Borrower shall
not, without the prior written consent of the Lender, sell, exchange, lease,
release or abandon or otherwise dispose of the Collateral or create, assume or
permit to remain outstanding any Lien (except for Liens which are permitted by
the Credit Agreement) in, on or of the Collateral except as provided in the
Credit Agreement, or as otherwise agreed to in writing by the Lender. Any
proceeds of such sale or lease except as referred to in (i) and (ii) above shall
be held by the Borrower in trust for the Lender and, at the request of the
Lender, shall be paid immediately to the Lender.
Section 2.7 Right of Set-Off. The Obligations secured by this Security
Agreement shall be paid, when due, by the Borrower to the Lender without regard
to any equities existing among the Borrower and the Lender and without regard to
any right of set-off or cross-claim or of any claim or demand of the Borrower
against the Lender or otherwise.
Section 2.8 Protective Disbursements. If the Borrower fails to perform any
covenant on its part contained in this Security Agreement then the Lender may,
in its absolute discretion, perform any such covenant capable of being performed
by it and, if any such covenant requires the payment or expenditure of money,
the Lender may make such payment but shall be under no obligation to do so, and
all sums so paid or expended by the Lender shall be immediately payable by the
Borrower, shall bear interest at the highest rate set forth in the Credit
Agreement until paid and shall be secured hereby, having the benefit of the Lien
hereof in priority to the indebtedness evidenced by this Security Agreement. No
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such performance or payment shall relieve the Borrower from any default under
this Security Agreement or any consequences of such default.
ARTICLE 3
ENFORCEMENT
Section 3.1 Default. The Lien hereof shall be and become enforceable
against the Borrower if and when it shall fail to make payments or perform any
of the Obligations on demand or otherwise when due and payable or to be
performed, as the case may be, or upon the occurrence of any Event of Default,
as defined in the Credit Agreement.
Section 3.2 Remedies. Whenever the Lien hereof has become enforceable, the
Lender may realize upon the Collateral and enforce the rights of the Lender by:
(a) entry onto any premises where Collateral consisting of tangible
personal property may be located;
(b) entry into possession of the Collateral and removal of Collateral
consisting of tangible personal property by any method permitted by
Law;
(c) sale, assignment, lease, sub-lease, granting options or options to
purchase or any other disposal of the Collateral;
(d) collection of any proceeds arising in respect of the Collateral;
(e) collection, realization or sale of or other dealing with the Book
Accounts;
(f) the exercise of any contractual, legal or other rights or interests of
the Borrower under or in respect of the Collateral;
(g) the payment of any Lien that may exist or be threatened against the
Collateral, in which event such amount and any costs, charges and
expenses incurred in connection therewith shall be added to the
Obligations;
(h) the appointment by instrument in writing of a receiver (which term as
used in this Security Agreement includes a receiver and manager) or
agent of the Collateral and/or the Business and the removal or
replacement of such receiver or agent from time to time;
(i) the institution of proceedings in any court of competent jurisdiction
for the appointment of a receiver of the Collateral;
(j) the institution of proceedings in any court of competent jurisdiction
for sale or foreclosure of the Collateral;
(k) filing proofs of claim and other documents to establish claims in any
proceeding relating to the Borrower;
(l) the set-off and application against the Obligations, to the fullest
extent permitted by Law, of any monies to be paid by the Lender to the
Borrower under the Credit Agreement, or any other agreement between
the Lender and the Borrower; and
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(m) any other remedy or proceeding authorized or permitted by applicable
Law.
Such remedies 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
Lender however created. The Lender may proceed by way of any action, suit or
other proceeding available at law and no right, remedy or power of the Lender
shall be exclusive of or dependent on any other. The Lender may exercise any of
its rights, remedies or powers separately or in combination and at any time. The
Lender shall not be bound to exercise any such rights or remedies, and the
exercise of such rights and remedies shall be without prejudice to the rights of
the Lender in respect of the Obligations including the right to claim for any
deficiency.
Section 3.3 Additional Rights. In addition to the remedies of the Lender
set forth in Section 3.2, the Lender may, whenever the Lien hereof has become
enforceable,
(a) require the Borrower, at the Borrower's expense, to gather the
Collateral consisting of tangible personal property at a place or
places designated by notice in writing given by the Lender to the
Borrower;
(b) require the Borrower, by notice in writing given by the Lender to the
Borrower, to disclose to the Lender the location or locations of the
Collateral consisting of tangible personal property;
(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 Borrower or otherwise;
(d) carry on all or any part of the business or businesses of the Borrower
and, to the exclusion of all others including the Borrower, enter
upon, occupy and use all or any of the premises, buildings, plant,
undertaking and other property of or used by the Borrower for such
time as the Lender sees fit, free of charge, and the Lender shall not
be liable to the Borrower for any act, omission or negligence in so
doing or for any rent, charges, depreciation or damages incurred in
connection therewith or resulting therefrom;
(e) borrow for the purpose of carrying on the business of the Borrower or
for the maintenance, preservation or protection of the Collateral and
mortgage, charge, pledge or xxxxx x Xxxx in, on or of the Collateral,
whether or not in priority to the Lien hereof, to secure repayment;
(f) demand, 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 valid and effectual receipts and discharges therefor and
compromise or give time for the payment or performance of all or any
part of the accounts or any contract or any other obligation of any
third party to the Borrower; and
(g) participate in any recapitalization, reclassification, reorganization,
consolidation, redemption, share split, merger or liquidation of any
issuer of securities which constitute Collateral, and in connection
therewith may deposit or surrender control of the Collateral, accept
money or other property in exchange for the Collateral, and take such
action as it deems proper in connection therewith, and any other money
or property received in exchange for the Collateral shall be held by
the Lender thereafter as part of the Collateral pursuant to the
provisions hereof.
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Section 3.4 Concerning the Receiver. (1) Any receiver appointed by the
Lender shall be vested with the rights and remedies which could have been
exercised by the Lender in respect of the Borrower or the Collateral and such
other powers and discretions as are granted in the instrument of appointment and
any instrument or instruments supplemental thereto. The identity of the
receiver, any replacement thereof and any remuneration thereof shall be within
the sole and unfettered discretion of the Lender.
(2) Any receiver appointed by the Lender shall act as agent for the Lender
for the purposes of taking possession of the Collateral, but otherwise and for
all other purposes (except as provided below), as agent for the Borrower. The
receiver may sell, lease, or otherwise dispose of Collateral as agent for the
Borrower or as agent for the Lender (but in all cases shall take direction from
the Lender) as the Lender may determine in its sole and unfettered discretion.
The Borrower agrees to ratify and confirm all actions of the receiver acting as
agent for the Borrower, and to release and indemnify the receiver in respect of
all such actions.
(3) The Lender, in appointing or refraining from appointing any receiver,
shall not incur liability to the receiver, the Borrower or otherwise and shall
not be responsible for any misconduct or negligence of such receiver.
Section 3.5 Appointment of Attorney. The Borrower hereby irrevocably
appoints the Lender (and any officer thereof) as attorney of the Borrower (with
full power of substitution) to exercise, whenever the Lien hereof has become
enforceable, in the name of and on behalf of the Borrower any of the Borrower's
right (including the right of disposal), title and interest in and to the
Collateral including the execution, endorsement and delivery of any agreements,
documents, instruments, securities, documents of title and chattel paper and any
notices, receipts, assignments or verifications of the Book Accounts. All acts
of any such attorney are hereby ratified and approved, and such attorney shall
not be liable for any act, failure to act or any other matter or thing in
connection therewith, except for its own negligence or wilful misconduct.
Section 3.6 Dealing with the Collateral. (1) The Lender shall not be
obliged to exhaust its recourses against the Borrower or any other Person or
Persons or against any other security it may hold in respect of the Obligations
before realizing upon or otherwise dealing with the Collateral in such manner as
the Lender may consider desirable.
(2) The Lender may grant extensions or other indulgences, take and give up
securities, accept compositions, grant releases and discharges and otherwise
deal with the Borrower and with other Persons, sureties or securities as the
Lender may see fit, all without prejudice to the Obligations or the rights of
the Lender in respect of the Collateral.
(3) The Lender shall not be (i) bound under any circumstances to realize
upon the Collateral; (ii) liable or accountable for any failure to collect,
realize or obtain payment in respect of the Collateral; (iii) 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 the
Lender and the Borrower or any other Persons in respect thereof; (iv)
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
therewith; or (v) bound to protect the Collateral from depreciating in value or
becoming worthless.
(4) All moneys from time to time received by the Lender or the receiver may
be applied in such a manner, order and priority as the Lender in its sole
discretion may determine. If there shall be a
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deficiency, the Borrower shall remain liable for such deficiency and shall pay
the amount of such deficiency to the Lender forthwith.
Section 3.7 Standards of Sale. Without prejudice to the ability of the
Lender to dispose of the Collateral in any manner which is commercially
reasonable, the Borrower acknowledges that a disposition of Collateral by the
Lender which takes place substantially in accordance with the following
provisions shall be deemed to be commercially reasonable:
(a) Collateral may be disposed of in whole or in part whether or not the
Lender has taken possession thereof;
(b) Collateral may be disposed of by public auction, public tender or
private contract, with or without advertising and without any other
formality;
(c) any purchaser or lessee of such Collateral may be a customer or
related party of the Lender;
(d) a disposition of Collateral may be on such terms and conditions as to
credit, deferred payment or otherwise as the Lender, in its
discretion, may deem advantageous;
(e) the Lender may establish an upset or reserve bid or price in respect
of the Collateral; and
(f) the Lender may buy in, rescind or vary any contract for the
disposition of Collateral and may dispose of any Collateral again
without being obligated to account or answer for any gain or loss
occasioned thereby.
Section 3.8 Dealings by Third Parties. (1) No person dealing with the
Lender or its agent or a receiver shall be required (i) to determine whether the
Lien hereof has become enforceable; (ii) to determine whether the powers which
the Lender or such agent or receiver on behalf of the Lender is purporting to
exercise have become exercisable; (iii) to determine whether any money remains
due to the Lender by the Borrower; (iv) to determine the necessity or expediency
of the stipulations and conditions subject to which any sale or lease shall be
made; (v) to determine the propriety or regularity of any sale or of any other
dealing by the Lender with the Collateral; or (vi) to see to the application of
any money paid to the Lender.
(2) Any purchaser of the Collateral from the Lender shall hold the
Collateral absolutely free from any claim or right of whatever kind including
any equity of redemption of the Borrower, and the Borrower hereby specifically
waives, to the fullest extent permitted by Law, as against any such purchaser,
all right of redemption, stay or appraisal which the Borrower now has or may
have under any rule of Law now existing or hereafter adopted. To the fullest
extent permitted by Law, the Borrower waives all of the rights, benefits and
protection provided to it by any statute which imposes limitations upon the
rights, remedies or powers of a secured party.
ARTICLE 4
GENERAL
Section 4.1 Discharge. The Lien hereof shall be released and discharged
upon, but only upon, full payment of the Obligations and at the request and
expense of the Borrower. The Lender shall execute and deliver to the Borrower,
at the request and expense of the Borrower, such releases and discharges as the
Borrower may reasonably require.
-11-
Section 4.2 No Merger, etc. No judgment recovered by the Lender shall
operate by way of merger of or in any way affect the Lien hereof, which is in
addition to and not in substitution for any other security now or hereafter held
by the Lender in respect of the Obligations.
Section 4.3 Security Additional. The Borrower agrees that the security
interests created by this Security Agreement are in addition to and not in
substitution for any other security now or hereafter held by the Lender.
Section 4.4 Realization. The Borrower acknowledges and agrees that the
Lender may realize upon various securities securing the Obligations or any part
thereof in such order as it may be advised and any such realization by any means
upon any security or any part thereof will not bar realization upon any other
security or the security hereby constituted or parts thereof.
Section 4.5 Waivers, etc. No amendment, consent or waiver by the Lender
shall be effective unless made in writing and signed by an authorized officer of
the Lender and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
Section 4.6 Further Assurances. The Borrower shall from time to time,
whether before or after the Lien hereof shall have become enforceable, do all
such acts and things and execute and deliver all such deeds, transfers,
assignments and instruments as the Lender may reasonably require for protecting
the Collateral or perfecting the Lien hereof and for exercising all rights,
remedies, powers, authorities and discretions hereby conferred upon the Lender,
and the Borrower shall, from time to time after the Lien hereof has become
enforceable, do all such acts and things and execute and deliver all such deeds,
transfers, assignments and instruments as the Lender may require for
facilitating the sale of or other dealing with the Collateral in connection with
any realization thereof.
Section 4.7 Notice. All notices, requests, demands, directions and
communications (in this Section 4.5, "notices") hereunder shall be sent by
telex, facsimile or similar means of recorded communication or hand delivery and
shall be effective when hand delivered or, in the case of successful telex,
facsimile or similar means of recorded communication, when received. All notices
shall be given to the respective addresses on page 1 of this Security Agreement
or, in either case, in accordance with any unrevoked written direction as to a
change of address given in accordance with this Section 4.5.
Section 4.8 Successors and Assigns. This Security Agreement shall be
binding upon the Borrower, its successors and assigns, and shall enure to the
benefit of the Lender and its successors and assigns. The Borrower may not
assign or novate any of its rights or obligations under this Security Agreement
without the prior written consent of the Lender. All rights of the Lender
hereunder shall be assignable in accordance with the terms of the Credit
Agreement and in any action brought by an assignee to enforce any such right,
the Borrower shall not assert against such assignee any claim or defence which
the Borrower now has or hereafter may have against the Lender.
Section 4.9 Headings, etc. The division of this Security Agreement into
sections and subsections and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation thereof.
Section 4.10 Severability. If and to the extent that any provision hereof
shall conflict with any mandatory provision of the PPSA (including, without
limitation, an exclusion or purported exclusion of a duty or onus imposed by the
PPSA or a limitation or purported limitation of the liability of or the amount
of damages recoverable from a person who has failed to discharge a duty or
obligation imposed
-12-
by the PPSA), such provision of the PPSA shall govern. The provisions of this
Security Agreement are intended to be severable. If any provision of this
Security Agreement shall be deemed by any court of competent jurisdiction or
held to be invalid or void or unenforceable in whole or in part in any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or unenforceability without in any manner
affecting the validity or enforceability thereof in any other jurisdiction or
the remaining provisions hereof in any jurisdiction.
Section 4.11 Governing Law. This Security Agreement shall be governed by
and construed in accordance with the laws of the Province of British Columbia
and of Canada applicable therein and shall be treated in all respects as a
British Columbia contract.
Section 4.12 Incorporation of Schedules. Schedules A, B, C and D shall, for
all purposes hereof, form an integral part of this Security Agreement.
Section 4.13 Conflict. In the event of a conflict or inconsistency between
the provisions of this Security Agreement and the provisions of the Credit
Agreement, the provisions of the Credit Agreement shall prevail.
Section 4.14 Acknowledgement of Receipt/Waiver. The Borrower acknowledges
receipt of an executed copy of this Security Agreement. The Borrower waives, to
the extent permitted by Law, the right to receive a copy of any financing
statement, financing change statement or verification statement registered with
or issued by any personal property registry or other Official Body in connection
with this Security Agreement.
IN WITNESS WHEREOF the Borrower has duly executed this Security Agreement
and affixed its corporate seal under the hands of its proper officers duly
authorized in that behalf for the purpose thereof as of the date first above
written.
INFOWAVE SOFTWARE, INC.
Per: ----------------------------------
Authorized Signatory
Per: ----------------------------------
Authorized Signatory
SCHEDULE A
INVENTORY
Nil
SCHEDULE B
SERIAL NUMBERED GOODS
Nil
SCHEDULE C
INTELLECTUAL PROPERTY
TRADEMARKS, TRADEMARK REGISTRATIONS AND PENDING APPLICATIONS
REGISTERED TRADE-MARKS
----------------------
--------------------------------------------------------------------------------
Trade-xxxx: I Design
Country: Canada
Registration No.: 527,301
Registration Date: May 4, 2000
--------------------------------------------------------------------------------
Trade-xxxx: I Design
Country: United States
Registration No.: 2,411,809
Registration Date: Dec. 12, 2000
--------------------------------------------------------------------------------
Trade-xxxx: INFOWAVE
Country: Canada
Registration No.: 441,677
Registration Date: March 31, 1995
--------------------------------------------------------------------------------
Trade-xxxx: INFOWAVE OFFICE ENABLER
Country: Canada
Registration No.: 496,520
Registration Date: June 19, 1998
--------------------------------------------------------------------------------
Trade-xxxx: INFOWAVE OFFICE ENABLER
Country: United States
Registration No.: 2,291,877
Registration Date: November 16, 1999
--------------------------------------------------------------------------------
Trade-xxxx: INFOWAVE WIRELESS ENABLER
Country: Canada
Registration No.: 507,188
Registration Date: January 27, 1999
--------------------------------------------------------------------------------
Trade-xxxx: infoWave Design
Country: United States
Registration No.: 2,301,202
Registration Date: December 21, 1999
--------------------------------------------------------------------------------
-2-
TRADE-XXXX APPLICATIONS
-----------------------
--------------------------------------------------------------------------------
Trade-xxxx: CRM2GO
Country: Canada
Serial No.: 1,045,777
Filing Date: February 8, 2000
--------------------------------------------------------------------------------
Trade-xxxx: SFA2GO
Country: Canada
Serial No.: 1,045,774
Filing Date: February 8, 2000
--------------------------------------------------------------------------------
Trade-xxxx: INFOWAVE & CIRCLE WITHIN A CIRCLE DESIGN
Country: Canada
Serial No.: 1,084,735
Filing Date: November 30, 2000
--------------------------------------------------------------------------------
Trade-xxxx: INFOWAVE & CIRCLE WITHIN A CIRCLE DESIGN
Country: United States
Serial No.: 76/218,583
Filing Date: March 5, 2001
--------------------------------------------------------------------------------
Trade-xxxx: INFOWAVE WIRELESS ENABLER
Country: United States
Serial No.: 75/396,059
Filing Date: November 25, 1997
--------------------------------------------------------------------------------
Trade-xxxx: INFOWAVE
Country: United States
Serial No.: 75/229,032
Filing Date: January 21, 1997
--------------------------------------------------------------------------------
Trade-xxxx: SYMMETRY
Country: United States
Serial No.: 75/816,213
Filing Date: Oct. 5, 1999
--------------------------------------------------------------------------------
Trade-xxxx: WIRELESS BUSINESS ENGINE
Country: United States
Serial No.: 76/139,261
Filing Date: October 3, 2000
--------------------------------------------------------------------------------
Trade-xxxx: WIRELESS BUSINESS ENGINE
Country: Canada
Serial No.: 1,074,166
Filing Date: September 8, 2000
--------------------------------------------------------------------------------
-3-
--------------------------------------------------------------------------------
Trade-xxxx: INFOWAVE FOR THE NET
Country: United States
Serial No.: 75/803,984
Filing Date: September 21, 1999
--------------------------------------------------------------------------------
Trade-xxxx: INFOWAVE FOR EXCHANGE
Country: United States
Serial No.: 75/803,983
Filing Date: September 21, 1999
--------------------------------------------------------------------------------
Trade-xxxx: WIRELESS BUSINESS ENGINE
Country: European Community (Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal, Spain, Sweden and
United Kingdom).
Serial No.: 1,996,636
Filing Date: November 29, 2000
--------------------------------------------------------------------------------
SCHEDULE D
PATENTS, PATENT APPLICATIONS, INDUSTRIAL DESIGNS
AND INDUSTRIAL DESIGN APPLICATIONS
Registrations
-------------
None
Applications
------------
United States Patent Application No. 09/755,898 - Filing Date May 5, 2001
Title: METHOD, APPARATUS, SIGNALS AND MEDIA FOR PROVIDING CUSTOM
OUTPUT IN RESPONSE TO USER INPUT AND E-MAIL SYSTEM
EMPLOYING SAME
Inventor: Xxxx Xxxxxx Xxxxxxx
Assignee: Infowave Software, Inc.
Canadian Patent Application No. 2,330,414 - Filing Date May 8, 2001
Title: METHOD, APPARATUS, SIGNALS AND MEDIA FOR PROVIDING CUSTOM
OUTPUT IN RESPONSE TO USER INPUT AND E-MAIL SYSTEM
EMPLOYING SAME
Inventor: Xxxx Xxxxxx Xxxxxxx
Assignee: Infowave Software, Inc.
