Fillable Printable Purchase Money Security Agreement Form - Canada

Purchase Money Security Agreement Form - Canada

PURCHASE MONEY SECURITY AGREEMENT

TO : TECH DATA CANADA CORPORATION

(hereinafter called the "Secured Party")

GRANTED BY: ___________________________________

(hereinafter called the "Undersigned")

1. As general and continuing security for the payment of all obligations, indebtedness and

liabilities, direct or indirect, of the Undersigned to the Secured Party wheresoever and howsoever

incurred and whether incurred before, at the time of or after the execution hereof, including

extensions or renewals thereof, including without restricting the generality of the foregoing,

obligations of the Undersigned to the Secured Party for the purchase price of inventory supplied by

the Secured Party to the Undersigned on credit (the obligations, indebtedness and liabilities of the

Undersigned referred to above are hereinafter collectively called "Obligations"), and, IN

CONSIDERATION OF THE OBLIGATIONS, the Undersigned hereby grants, bargains, assigns

and transfers to the Secured Party, a fixed and specific mortgage and charge, as and by way of a

continuing security interest (hereinafter together with any other security interest hereby created

called the "Security Interest") in the following property described in sub-paragraphs (a) and (b) of

this paragraph now or hereafter owned or acquired by or on behalf of the Undersigned:

(a) All goods supplied by the Secured Party to the Undersigned on credit hereunder which now

or hereafter form all or part of the inventory of the Undersigned, of whatever kind and

wherever located, including, without limitation, the goods described in Schedule "A"

attached hereto and all goods held for sale or lease or that have been leased or that are to be

furnished or have been furnished under a contract of service, or that are raw materials, work

in process or materials used or consumed in a business or profession (hereinafter called

"Inventory");

(b) All identifiable or traceable personal property in any form derived directly or indirectly

from any dealing with Inventory or the proceeds therefrom, including any payment

representing indemnity or compensation for loss of or damage to the Inventory or proceeds

therefrom;

have the same meaning as their defined meanings in the Personal Property Security Act,

R.S.O. 1990, c._P.10 as amended (the "PPSA") or any legislation in substitution or

replacement therefor. In this Agreement, any reference to the word "Collateral" shall,

unless the context otherwise requires, refer to "Collateral or any part thereof".

All of the above mentioned property is hereinafter called the "Collateral".

2. The Undersigned hereby represents, warrants or covenants to or with the Secured Party, as

the case may be, that:

(a) (i) The Undersigned will reimburse the Secured Party f or all costs and expenses

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(including legal fees on a solicitor and his own client basis) incurred by it in the taking,

recovering or possessing the Collateral and in any other proceedings taken for the purpose

of protecting or enforcing the remedies provided herein, or otherwise in relation to the

Collateralor by reason of non-payment of the obligations and bear interest at the highest

rate borne by any of the Obligations and shall be payable on demand;

(ii) If any Collateral is in the possession of the Secured Party after default by the

Undersigned hereunder and the same is lost or damaged otherwise than through the

negligence of the Secured Party, the risk of loss or damage is on the Undersigned to the

extent of any deficiency in any insurance coverage, provided that pending the payment of

any insurance proceeds, the Secured Party may estimate reasonably the deficiency and such

estimated deficiency shall be added to and become part of the Obligations and shall bear

interest at the highest rate borne by any of the Obligations and shall be payable on demand.

(b) Except for the Security Interest the Undersigned is, or respecting the Collateral acquired

after the date hereof will be, the owner of the Collateral free from any mortgage, lien,

charge, security interest or encumbrance in priority to the Security Interest and the

Undersigned will keep the Collateral free and clear of all taxes, assessments, liens and

encumbrances and claims of others. The Secured Party may, in its sole discretion, pay any

or all amounts in respect of any and all mortgages, liens, charges, security interests,

encumbrances, taxes, assessments or claims arising against the Collateral and any amount

so paid together with all costs incurred in connection therewith shall be deemed to be part

of the Obligations and therefore secured and recoverable under the Security Interest granted

in paragraph 1 above;

transfers, sales and other dispositions of any or all of the Collateral. The Secured Party and

each of its representatives or agents shall have the right to inspect the Collateral and the

said records and make extracts from the Undersigned's books and records relating to the

Collateral or to any transaction between the parties hereto at any reasonable time;

(d) The Undersigned shall indemnify and hold the Secured Party and its representatives safe

and harmless from all claims made by any persons as the result of the Secured Party or its

representatives exercising any or all of its rights or remedies granted herein;

(e) The Undersigned will care for, protect and preserve the Collateral and not permit its value

to be impaired and, subject to paragraph 4, will not sell, transfer, assign, mortgage, charge,

pledge, hypothecate or deliver or otherwise dispose of any such property or any interest

therein without the prior written consent of the Secured Party;

(f) The Collateral shall be at the Undersigned's sole risk of any loss, injury, damage,

destruction or confiscation during the Undersigned's possession thereof. The Undersigned

agrees that any such loss, injury, damage, destruction or confiscation shall not release the

Undersigned from the Obligations. The Undersigned will keep the Collateral insured

under policies of insurance with such provisions, for such amounts and by such insurers

satisfactory to the Secured Party from time to time, and will maintain such insurance with

loss, if any, payable to the Secured Party and will, at the Secured Party's request, lodge

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such policies with the Secured Party and such policies shall provide for 15 days written

minimum cancellation notice to the Secured Party. In default of the Undersigned obtaining

and maintaining such insurance, the President of the Secured Party may act, and is hereby

appointed the attorney for the Undersigned in obtaining, adjusting, settling and canceling

such insurance;

(g) The Secured Party shall be entitled from time to time and at any time to inspect the

Collateral wherever located and to make enquiries and tests concerning the Collateral, and

the Undersigned will defray all expenses in connection therewith;

(h) This Agreement has been properly authorized and constitutes a legally valid and binding

obligation of the Undersigned enforceable in accordance with its terms and the execution

and delivery of this Agreement by the Undersigned will not conflict with or violate the

terms of any contract, indenture, mortgage, lease, instrument, agreement or resolution to

which the Undersigned is a Party or by which it is bound;

(i) The Undersigned warrants that the Undersigned's name as set out herein is and always has

been the Undersigned's full and exact name. The Undersigned further warrants that all

other information set out herein is full and accurate; and

(j) When the Inventory or any part thereof is sold or delivered to the Undersigned by the

Secured Party, title and ownership of each part of the Inventory shall not pass to the

Undersigned but shall be and remain in the Secured Party until all Obligations in respect of

each such part are paid or performed in full.

(k) The Undersigned's principal place of business and the locations of the Collateral is/are at

the address(es) shown below the Undersigned's signature on the last page of this Agreem ent

and the Undersigned shall promptly notify the Secured Party in writing of any change in

such addresses and subject to paragraph 4 will not remove any of the Collateral from the

said locations without the prior written consent of the Secured Party;

(l) The Undersigned shall from time to time forthwith on the Secured Party's request do, make

and execute all such financing statements, further documents, acts, matters and things as

may be required by the Secured Party with respect to the Collateral or any part thereof or as

may be required to give effect to the provisions of this Agreement and of perfecting title of

the Secured Party in the Collateral and the Undersigned hereby irrevocably constitutes and

appoints the President of the Secured Party from tim e to tim e the true and lawful attorney of

the Undersigned, with power of substitution, to do, make and execute all of such

documents, acts, matters or things with the right to use the name of the Undersigned

whenever and wherever it may deem necessary or expedient.

(m) The Undersigned hereby covenants to give a Secured Party at least five (5) days written

notice before it makes any payment of any type or form including, but not limited to,

dividends, bonuses, fees and repayment of shareholder advances and loans and other like

payments, to any shareholder(s), officer(s), director(s) or employee(s) of the Corporation

or any holding body corporate of the Undersigned, subsidiary of the Undersigned or a

corporation affiliated, as such term is defined in the Business Corporations Act, R.S.O.

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1990, as amended, with the Corporation. The foregoing shall not include remuneration

paid to any shareholder(s), officer(s), director(s), or employee(s) in the normal course of

the Undersigned’s business based on and consistent with past practices. Such notice must

set out at minimum, the amount of the payment, when the payment is to be made, to

whom the payment is to be made and why the payment is to be made

3. The Secured Party shall be under no obligation to sell on credit any Inventory to or for the

benefit of the Undersigned notwithstanding anything contained herein to the contrary. Any

invoice or notice of shipment pertaining to Inventory ordered or received by the

Undersigned shall be conclusive evidence that the Security Interest granted in paragraph 1

hereof applies to said Inventory.

4. Notwithstanding anything herein contained, the Undersigned when not in default hereunder

may sell the Inventory in the ordinary course of the Undersigned's business provided that

the Undersigned shall provide to the Secured Party on the last day of each month a detailed

list setting out the sales of the Inventory in which the Secured Party has a Security Interest

hereunder for the said month including, without limitation, the name and address of the

Undersigned's customers. All amounts owing by the Undersigned for Inventory purchased

from the Secured Party shall become due and payable, and the Undersigned hereby

promises to pay the same, despite the absence of a demand for payment of same on or

before the date of the expiration of the credit period contained in the invoices or notices of

shipment in respect of such Inventory. The Undersigned shall pay interest to the Secured

Party accruing after the said date on all amounts due at the rate of One and One-half per

cent (1.5 %) per month or Eighteen per cent (18%) per annum until payment of same in

full. Proceeds shall be received by the Undersigned in trust for the Secured Party and shall

be forthwith paid over to the Secured Party.

5. Obligations not payable on demand shall become immediately payable upon the occurrence

of one or m ore of the fo llowing events of default:

(a) the Undersigned defaults in the payment of any amount owing to the Secured Party as and

when the same comes due or fails to perform when required any of the Obligations or to

perform or rectify a breach of any of the representations or warranties or covenants of this

Agreement or any other agreem ent between the Undersigned and the Secured Party;

(b) the Undersigned makes or proposes to make any sale of the Collateral in bulk or any sale of

the Collateral out of the usual course of its business;

Undersigned is appointed pursuant to the terms of any trust deed, trust indenture, debenture,

security agreement or similar instrument or by or under any judgment or order of any court

of competent jurisdiction or the Undersigned ceases or threatens to cease to carry on

business, commits or threatens to commit any act of bankruptcy, becomes insolvent or the

subject of insolvency proceedings or becomes bankrupt or subject to the provisions of the

Winding-Up Act

or the Bankruptcy and Insolvency Act (Canada), or the Companies'

Creditors Arrangement Act (Canada), or goes into liquidation for any reason whatsoever;

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(d) if an encumbrancer takes possession of the Collateral or any part thereof or any substantial

part of the property of the Undersigned, or if any process of execution, distress or the like is

levied or enforced upon or against any of the Collateral or any substantial part of the

property of the Undersigned or the indebtedness or liability of the Undersigned other than

to the Secured Party becomes due and payable, or capable of being declared due and

payable, before the stated maturity thereof or any such indebtedness or liability shall not be

paid at the maturity thereof or upon the expiration of any stated applicable grace period

thereof or any guarantee given by the Undersigned is not honoured when due and called

upon;

(e) if the Undersigned fails to pay taxes, rates, charges, rents payable on its property, or other

charges of a like nature, whether governmental or otherwise, assessed or payable in respect

of any of the Collateral or if the Undersigned fails to observe and perform any of the

covenants in any lease, license, concession or agreement whereby any of the Collateral or

any right of the Undersigned may become liable to forfeiture and any such default as

aforesaid shall continue, either for a period of ten (10) days or for such shorter period as

would at any time, if continued, render any of the Collateral liable to forfeiture;

(f) the loss, theft, damage or destruction of the Collateral or any substantial part of the property

of the Undersigned; or

(g) any other event which causes the Secured Party, in good faith and on commercially

reasonable grounds, to deem itself insecure or to consider that the Collateral is in jeopardy;

and the Secured Party shall have all rights and remedies under applicable law as well as any

other rights and remedies provided by this Agreem ent.

6. In addition to the rights, powers and remedies provided in this Agreement and under the

PPSA the Secured Party and the Receiver, as defined in paragraph 7, shall have the

following rights and powers if the security hereby constituted becom es enf orceable:

(a) the Secured Party may, at its option, add to the amount secured under this Agreement all

other balances owing by the Undersigned to the Secured Party under any other contract or

contracts and shall have all rights and remedies for the recovery of same as if the said

moneys were originally secured under this Agreem ent;

(b) the Secured Party may, in its sole discretion, with or without legal process, take immediate

possession of the Collateral and thereafter all the rights of the Undersigned in the Collateral

shall cease and terminate thereupon absolutely, and the Undersigned hereby authorizes and

instructs the Secured Party that in the event of repossession, the Secured Party or its agent

or bailee may enter on the premises of the Undersigned at any time during the day or night

and by itself or by or with its servants, agents, or receivers to break or force open doors,

locks, or other fastenings for the purpose of repossessing the Collateral and the

Undersigned hereby releases the Secured Party, the Secured Party's agent, bailee or

Receiver from all or any liability or damage from so doing, and does hereby expressly

waive any action or right of action of any kind whatsoever against the Secured Party, the

Secured Party's agent, bailee or Receiver growing out of the removal, repossession or

retention of the Collateral or otherwise.

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Undersigned shall, assemble the Collateral and make it available to the Secured Party at a

place to be designated by the Secured Party.

(d) to sue for any deficiencies; and

(e) to exercise any other remedies or take a ny other proceedings authorized or perm itted hereby

or by law or equity.

7. The Secured Party may appoint (and replace and reappoint in place of the original

Receiver) in writing any person, whether an employee or em ployees of the Secured Party or

not, to be a receiver, receiver and manager or agent ("Receiver") of the Collateral or any

part or parts thereof. A Receiver so appointed shall have power:

(a) to take possession of, collect and get in the Collateral, or any part thereof and for that

purpose to take any proceedings in the name of the Undersigned or otherwise;

(b) to carry on or concur in carrying on the business of the Undersigned and for that purpose to

raise money on the Collateral in priority to this Agreem ent or otherwise;

(d) to make any arrangement or compromise which the Receiver shall think expedient in the

interest of the Secured Party.

Any Receiver so appointed shall be deemed to be the agent of the Undersigned, and the

Undersigned shall be solely responsible for the Receiver's acts or defaults and for the Receiver's

remuneration and expenses, and the Secured Party shall not be in any way responsible for any

misconduct or negligence on the part of the Receiver. All moneys received by the Receiver after

providing for payment of all costs, charges and expenses of or incidental to the exercise of any of

the powers of the Receiver shall be applied in or towards satisfaction of the Obligations. The rights

and powers conferred by this paragraph are in supplement of and not in substitution for any rights

the Secured Party may have from tim e to tim e.

8. The Secured Party shall have the right at any time to appropriate any payment made to any

portion of the Obligations and to revoke or alter any such appropriation.

9. Any breach by the Undersigned of any of the pr ovisions contained in this Agreem ent or any

default by the Undersigned in the observance or performance of any covenant or condition

required to be observed or performed by the Undersigned hereunder may only be waived by

the Secured Party in writing, provided that no such waiver by the Secured Party shall

extend to or be taken in any manner to effect any subsequent breach or default or the rights

resulting therefrom. The Secured Party may grant extensions of time and other

indulgences, take and give up any of the Security Interest, or modify or abstain from

perfecting or taking advantage of any of the Security Interest, accept compositions, grant

releases and discharges thereof and otherwise deal with the Undersigned, debtors of the

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Undersigned, sureties and others with any of the Security Interest as the Secured Party may

see fit without prejudice to the liability of the Undersigned or the Secured Party's right to

hold and realize on any of the Security Interest. The Secured Party shall not be accountable

to the Undersigned for the value of any of the Security Interest released except for any

moneys actually received by the Secured Party.

10. If more than one person executes this Agreement, the term "Undersigned" shall include

each as well as all of them, any and all of their obligations hereunder shall be joint and

several and these presents and such obligations shall continue in full force and effect and

apply notwithstanding any change for any cause or in any manner whatsoever in the

composition of or m em bership of any firm or com pany which is a party hereto.

11. This Agreement shall be a continuing agreement in every respect for the payment of the

Obligations and it shall remain in full force and effect until all of the Obligations shall be

paid in full and the Secured Party shall have provided to the Undersigned a written release

of this Agreem ent.

12. This Agreement is in addition to and not in substitution for any other security or agreement

now or hereafter held by the Secured Party. All rights and remedies of the Secured Party

prescribed in this Agreement shall be cumulative and no remedy herein conferred or

reserved is intended to be exclusive but shall be in addition to every other remedy given

hereunder or now or hereafter existing at law or in equity or by statute. The taking of a

judgment or judgments under any of the covenants herein contained shall not operate as a

merger of the said covenants or affect the right of the Secured Party to interest at the highest

rate borne by any of the Obligations.

13. The undersigned acknowledges and agrees, that in the event it amalgamates with any

other company or companies, it is the intention of the parties hereto that the term

“Undersigned” when used herein shall apply to each of the amalgamating companies and

to the amalgamated company, such that the Security Interest granted hereby (i) shall

extend to “Collateral” (as that term is herein defined) owned by each of the

amalgamating companies and the amalgamated company at the time of amalgamation and

to any “Collateral” thereafter owned or acquired by the amalgamated company; and (ii)

shall secure the “Obligations” (as that term is herein defined) of each of the

amalgamating companies and the amalgamated company to the Secured Party at the time

of amalgamation and any “Obligations” of the amalgamated company to the Secured

Party thereafter arising. The Security Interest shall attach to “Collateral” owned by each

company amalgamating with the Undersigned, and by the amalgamated company, at the

time of the amalgamation, and shall attach to any “Collateral” thereafter owned or

acquired by the amalgamated company when such becomes owned or is acquired.

14. Any notice given by the Secured Party in connection with this Agreement may be given by

mailing the same addressed to the Undersigned at the principal place of business address set

out on the sixth (6th) page of this agreement Attention: The President and any notice so

mailed shall be conclusively deemed to have been received by the Undersigned on the next

business day following that on which it was so mailed.

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15. All rights of the Secured Party hereunder shall be assignable and in any action brought by

an assignee to enforce such rights, the Undersigned shall not assert against the assignee any

claim or defence which the Undersigned now has or m ay hereafter have against the

Secured Party. This Agreement shall not be assigned by the Undersigned without the

consent of the Secured Party. Subject to the foregoing, this Agreement and all its

provisions shall enure to the benefit of the Secured Party, its successors and assigns and

shall be binding upon the Undersigned, its heirs, executors, administrators, successors and

assigns, as the case may be.

16. Time shall be of the essence of this Agreem ent and every part hereof.

17. This Agreement shall be governed in all respects by the laws of the Province in which the

Inventory is located and the parties hereto irrevocably attorn to the jurisdiction of the courts

of the said Province. In the event any provisions of this Agreement shall be deem ed invalid

or void by any court of competent jurisdiction, the rem aining term s and provisions of this

Agreement shall rem ain in full force and effect.

18. The Undersigned acknowledges receipt of a copy of this Agreement.

IN WITNESS WHEREOF the Undersigned has executed this Agreement this ____day of

____________, 20______.

___________________________________

(Nam e of Corpor ation)

___________________________________

(Principal Signature)

Name: ____________________________

Title: ______________________________

PRINCIPAL PLACE OF BUSINESS OF THE UNDERSIGNED:-

COLLATERAL IS NOW AND WILL HEREAFTER BE LOCATED AT THE FOLLOWING

ADDRESS(ES):

As above

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(Street) (Town/City) (Province)

SCHEDULE "A"

All computers, computer equipment and accessories including but not limited to central processing

units, modems, printers, cards, terminals, keyboards, cables, software, multimedia products,

memory chips and boards, disk drives, controllers, LAN products, monitors, tape back-ups, video

boards, UNIX boards, emulation cards, controllers, battery back-ups and CAD products

manufactured by (but not limited to) AST, NEC, DEC, IBM, Maxtor Corporation, D-Link, Acer,

Goldstar, Toshiba, US Robotics, Okidata, Hewlett Packard, Compaq and such other manufacturers

currently supplying to or added to Tech Data Canada Corporation's product line from time to time

(the "Collateral").