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Court File No. CV-20-00636359-00CL
ONTARIO SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST BETWEEN:
ROYAL BANK OF CANADA Applicant
and
AVG (OEAM) INC.
Respondent
APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3, AS AMENDED, AND SECTION 101 OF THE
COURTS OF JUSTICE ACT, R.S.O. 1990, c. C.43, AS AMENDED
APPLICATION RECORD
Volume 1 of 2
February 14, 2020 AIRD & BERLIS LLPBarristers & Solicitors Brookfield Place 181 Bay Street, Suite 1800 Toronto, Ontario M5J 2T9 Tel: 416.863.1500 Fax: 416.863.1515
Sanjeev P.R. Mitra (LSO # 37934U) E-mail: [email protected]
Sam Babe (LSO # 49498B) E-mail: [email protected]
Lawyers for the Applicant, Royal Bank of Canada
INDEX
Court File No. CV-20-00636359-00CL
ONTARIO SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST BETWEEN:
ROYAL BANK OF CANADA Applicant
and
AVG (OEAM) INC.
Respondent
APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3, AS AMENDED, AND SECTION 101 OF THE
COURTS OF JUSTICE ACT, R.S.O. 1990, c. C.43, AS AMENDED
APPLICATION RECORD
INDEX
Volume 1
Tab Document
1. Notice of Application issued February 14, 2020
A. Form of Receivership Order
2. Blackline of Receivership Order against Model Receivership Order
3. Affidavit of Wajahat Mahmood, sworn February 13, 2020
A. avgautomotivegroup.com Printout
B. Corporation Profile Report
C. Credit Agreement with Amendments
D. General Security Agreement
E. Accounts Receivable Security Agreement
F. Inventory Security Agreement
G. PPSA Search Results
2
Volume 2
Tab Document
3. (cont’d) H. Somani Subordination
I. BDC Priority Agreement
J. RCAP Estoppel Letter
K. 102 BC Priority Agreement
L. Toyota Estoppel Letter
M. January 18, 2019 Breach Letter
N. First Demand and First BIA Notice
O. Standstill Agreement
P. June 20, 2019 Standstill Termination Letter
Q. Second Demand and the Second BIA Notice
R. Statement of Claim in Action of Covenants
S. Forbearance Agreement
T. Consents to Receiver
U. BDO Report
V. October 16, 2019 Forbearance Termination Letter
W. Judgment in Action on the Covenants
X. Bankruptcy Application
Y. Notice of Dispute to Bankruptcy Application
Z. Somani Estate Receivership Order
AA. BDC PPSA Notice
BB. Bankruptcy and Insolvency Record Search Results
4. BDO Canada Limited Consent to Act as Receiver
5. Service List
TAB 1
Court File No. CV-20-OO(j H(^S9-0QCL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LISTBETWEEN:
ROYAL BANK OF CANADA
Applicant
Respondent
APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3, AS AMENDED, AND SECTION 101 OF THE
COURTS OF JUSTICE ACT, R.S.O. 1990, c. C.43, AS AMENDED
NOTICE OF APPLICATION
TO THE RESPONDENT
A LEGAL PROCEEDING HAS BEEN COMMENCED by the applicant. The claim made by the applicant appears on the following page.
THIS APPLICATION will come on for a hearing before a judge presiding over the Commercial List at 330 University Avenue, Toronto, Ontario, on February 21, 2020, at 9:30 a.m. or as soon after that time as the matter may be heard.
IF YOU WISH TO OPPOSE THIS APPLICATION, to receive notice of any step in the application or to be served with any documents in the application you or an Ontario lawyer- acting for you must forthwith prepare a notice of appearance in Form 38A prescribed by the Rules of Civil Procedure, serve it on the applicant’s lawyer or, where the applicant does not have a lawyer, serve it on the applicant, and file it, with proof of service, in this court office, and you or your lawyer must appear at the hearing.
IF YOU WISH TO PRESENT AFFIDAVIT OR OTHER DOCUMENTARY EVIDENCE TO THE COURT OR TO EXAMINE OR CROSS-EXAMINE WITNESSES ON THE APPLICATION, you or your lawyer must, in addition to serving your notice of appearance, serve a copy of the evidence on the applicant’s lawyer or, whether the applicant does
not have a lawyer, serve it on the applicant, and file it, with proof of service, in the court office where the application is to be heard as soon as possible, but at least two days before the hearing.
IF YOU FAIL TO APPEAR AT THE HEARING, JUDGMENT MAY BE GIVEN IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO OPPOSE THIS APPLICATION BUT ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY C0^?TACTING A LOCAL LEGAL AID OFFICE.
Date: February 14, 2020 Issued by:Local Registrar
C. IrwinAddress of 330 University Avenue Rogistrar court office: j \th Floor
Toronto, ON MSG 1R7
TO: ALL THE PARTIES ON THE ATTACHED SERVICE LIST
APPLICATION
1. THE APPLICANT, ROYAL BANK OF CANADA (“RBC”), MAKES AN APPLICATION
FOR:
(a) an Order (the “Receivership Order”) pursuant to subsection 243(1) of the Bankruptcy
and Insolvency Act (the “BIA”) and section 101 of the Courts of Justice Act, R.S.O. 1990,
c. C.43, as amended (the “CJA”), in substantially the form attached hereto as Schedule
“A”, appointing BDO Canada Limited (“BDO”) as receiver (in such capacity, the
“Receiver”), without security, over all of the assets, undertaking and property of AVG
(OEAM) Inc. (the “Debtor”); and
(b) such further and other relief as is just.
2. THE GROUNDS FOR THE APPLICATION ARE:
THE PARTIES
(a) the Debtor was incorporated pursuant to the Ontario Business Corporations on February
2, 2000;
(b) the Debtor operates a business providing design, engineering, development and delivery
of OEM automotive accessories throughout North America, including to the Ontario
market (the “Business”);
(c) the Debtor’s head office and plant are located in leased premises at 605 Middlefield
Drive, Scarborough, Ontario (the “Premises”);
(d) as of February 13, 2020, the Debtor is indebted to RBC with respect to credit facilities
granted by RBC in the amount of $9,799,402.54, plus all bank fees, professional costs,
2
the face amounts of any outstanding letters of credit and any unposted transaction or
chargeback amounts on VISA facilities;
(e) a search of registrations against the Debtor made pursuant to the Ontario Personal
Property Security Act (the “PPSA”) revealed:
(i) the following registrations made prior to RBC’s original registration:
(1) a registration in favour of Ayaz Somani (a director and officer of the
Debtor), in respect of a general security interest, with a financing change
statement registered to reflect a subordination to RBC’s registration,
pursuant to a Subordination and Standstill Agreement dated September
17, 2014;
(2) two registrations in favour of BDC Capital Inc. (“BDC”), in respect of
general security interests, which BDC security interests are subordinated
and postponed to that of RBC in all collateral save for equipment and life
insurance policies pursuant to a Priority Agreement dated September 14,
2014 among BDC, RBC, the Debtor and the Corporate Guarantors (as
defined in paragraph 2(f) below); and
(3) a registration in favour of RCAP Leasing Inc. (“RCAP”), which RCAP
confirmed, in an estoppel letter dated September 10, 2014, is limited to
the specific equipment set out in the general collateral description; and
(ii) the following registrations made subsequent to RBC’s original registration:
(1) a registration in favour of 1028312 B.C. Ltd. (“102 BC”) in respect of a
general security interest, which 102 BC security interest is subject to a
3
Priority Agreement dated September 11, 2015 between 102 BC and
RBC;
(2) a registration in favour of The Bank of Nova Scotia apparently in respect
of a specific vehicle; and
(3) a registration in favour of Toyota Credit Canada Inc. (“Toyota”), which
Toyota confirmed, in an estoppel letter dated September 10, 2014, is
limited to the specific vehicle set out in the general collateral description;
RBC’S LOAN AND SECURITY
(f) RBC, the Debtor and each of 1598320 Ontario Inc., AVG (OEM) Inc. and National
Automotive Customizers Inc., as corporate guarantors (collectively, the “Corporate
Guarantors”), and Karim Suleman and Ayaz Somani, as personal guarantors (together
with the Corporate Guarantors, the “Guarantors”), are parties to a letter credit agreement
dated September 13, 2017, as amended by letter agreements dated February 14, 2018 and
June 22, 2018 (collectively, the “Credit Agreement”);
(g) pursuant to the Credit Agreement and agreements ancillary thereto, RBC has provided
the Debtor with:
(i) a demand operating facility, in the maximum principal amount of $2,250,000
(“Facility 1”);
(ii) a non-revolving term facility in the maximum principal amount of $7,500,000
(“Facility 3”); and
(iii) a VISA Business facility in the maximum amount of $100,000, available in both
Canadian currency and United States currency,
(collectively, the “Credit Facilities”);
4
(h) as security for its obligations to RBC, the Debtor provided, among other things:
(i) a General Security Agreement dated September 18, 2014, perfected by
registration pursuant to the PPSA;
(ii) a Security Agreement (Accounts Receivable) dated September 18, 2014; and
(iii) a Security Agreement (Inventory) dated September 18, 2014,
(collectively, the “Security”);
FINANCIAL DIFFICULTIES AND DEFAULTS
(i) the Credit Facilities came under the supervision of RBC’s Special Loans and Advisory
Group in early 2019 after multiple events of default had occurred under the Credit
Agreement including the failure of the Debtor to make required payments under Facility
3 and numerous breaches of reporting obligations;
(j) a further event of default under the Credit Agreement occurred when Export
Development Canada (“EDC”) terminated its guarantee of Facility 3 in response to
defaults by the Debtor in connection with that facility, resulting in a loss of a portion of
RBC’s security;
(k) on February 20, 2019, RBC’s counsel sent the Debtor a demand accompanied by a Notice
of Intention to Enforce pursuant to section 244 of the BIA‘,
(l) pursuant to a standstill letter agreement dated April 9, 2019 (the “Standstill
Agreement”), RBC agreed to refrain from exercising its enforcement rights and remedies
until July 31, 2019 (the “Standstill Period”) on a number of conditions, including, but
not limited to, the following:
5
(i) the Debtor was to deliver by no later than April 18,2019a plan to replace the lost
EDC guarantee with supplemental security (the “Additional Security”);
(ii) the Additional Security was to be in place on or before May 30, 2019; and
(iii) the Debtor was to provide to RBC year-end financial statements for fiscal 2019
(the “2019 Financial Statements”), prepared by its accountants, on or before
June 30, 2019 and honour all reporting requirements;
(m) when the Debtor failed to provide the Additional Security and the 2019 Financial
Statements as required by the Standstill Agreement, causing the Standstill Period to come
to an immediate end, RBC nevertheless gave the Debtor until June 24 to cure these
defaults;
(n) when the Debtor still failed to cure the defaults under the Standstill Agreement, counsel
to RBC issued a new demand on the Debtor on July 2, 2020, accompanied by a new
Notice of Intention to Enforce Security pursuant to subsection 244(1) of the BIA (the
“Second Demand” and the “Second BIA Notice”, respectively);
(o) on July 15, 2019, RBC had a statement of claim issued in an action on the covenants of
the Debtor and the Guarantors under the Credit Agreement and their respective
guarantees (the “Action on the Covenants”);
(p) on or around August 30, 2019, RBC, the Debtor and the Guarantors entered into a
Forbearance Agreement (the “Forbearance Agreement”) pursuant to which RBC agreed
to forbear from exercising its rights to enforcement until the earlier of January 31, 2020
and the occurrence of a further event of default (the “Forbearance Period”);
6
(q) in connection with the Forbearance Agreement, each of the Debtor and the Corporate
Guarantors executed a consent to the appointment of a receiver (collectively, the
“Consents to Receiver”), which Consents to Receiver, under the terms of the
Forbearance Agreement, RBC could use upon termination of the Forbearance Period;
(r) on September 20, 2019, the Debtor provided RBC with revised financial reporting for the
period ending July 31, 2019, which indicated that the available credit under the Facility 1
was much lower than the Debtor had claimed for the same period based on the margin
formula in the Credit Agreement;
(s) the revised reporting showed that outstanding borrowings under Facility 1 exceeded the
available credit by $963,1 17.15;
(t) on September 25, 2019, the Debtor sought an extension of the Forbearance Period when
possible alternate financing fell through, leaving the Debtor unable to meet the terms of
the Forbearance Agreement;
(u) in order to consider the requested extension, RBC required a third party consultant to
review the financial situation and ongoing viability of the Debtor;
(v) the Debtor consented to the engagement of BDO who reviewed the affairs of the Debtor
and prepared a report dated October 3, 2019 (“BDO Report”);
(w) The BDO Report disclosed that:
(i) 85% of the Debtor’s listed accounts receivable were fabricated;
(ii) certain accounts receivable of the Debtor were uncollectable;
(iii) potentially collectable Canadian accounts receivable only amounted to $535,100;
8
(cc) BDC has issued demand, a notice of intention to enforce pursuant to section 244 of the
BIA and a notice of intention to dispose of collateral pursuant to subsection 63(4) of the
PPSA;
APPOINTMENT OF THE INTERIM RECEIVER AND THE RECEIVER
(a) the ten day notice period set out in the Second BIA Notice has expired and the Debtor has
failed to make payment in accordance with the Second Demand;
(b) in addition to non-payment in the face of the Second Demand, multiple events of default
have occurred and are continuing, in light of which RBC has the right, pursuant to the
Security, to appoint a receiver of the Debtor;
(c) the Debtor is insolvent as its liabilities greatly exceed its assets and it has failed to fulfill
all its obligations to, without limitation, RBC and BDC;
(d) the appointment of the Receiver is needed to preserve, protect and sell or otherwise
realize upon the Debtor’s assets, and to secure the receipts therefore;
(e) RBC has, at all times, acted in good faith towards the Debtor;
(f) the Debtor has consented to the appointment of a receiver;
(g) it is both just and equitable that the Receiver be appointed to preserve and protect the
interests of RBC and other creditors in the assets of the Debtor;
(h) BDO is a licenced trustee in bankruptcy and has consented to act as Receiver;
(i) subsections 31(1), 47(1) and 243(1) of the 5Z4;
(j) section 101 of the CX4;
9
(k) rules 1.04, 2.01, 2.03, 3.02 and 38 of the Rules of Civil Procedure, R.R.O. 1990, Reg.
194, as amended; and
(l) such further grounds as are required and this Court may permit.
3. THE FOLLOWING DOCUMENTARY EVIDENCE WILL BE USED AT THE HEARING
OF THE APPLICATION:
(a) The affidavit of Wajahat Mahmood, sworn February 13, 2020;
(b) the consent of BDO to act as Receiver; and
(c) such other material as is required and this Court may permit.
Date of Issue: FEBRUARY 14, 2020 AIRD & BERLIS LLPBarristers and Solicitors Brookfield Place Suite 1800, Box 754 181 Bay Street Toronto, Ontario M5J 2T9Tel: 416.863.1500 Fax: 416.865.1515
Sanjeev P.R. Mitra (LSO # 37934U)Email: [email protected]
Sam Babe (LSO # 49498B)Email: [email protected]
Lawyers for Royal Bank of Canada
ROYAL BANK OF CANADA and AVG (OEAM) INC.
4pplicant RespondentCourt File No. CV-20-QQbS^ ^£9 -00CL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LISTPROCEEDING COMMENCED AT TORONTO
NOTICE OF APPLICATION
AIRD & BERLIS LLPBarristers and Solicitors
Brookfield Place Suite 1800, Box 754
181 Bay Street Toronto, Ontario M5J 2T9
Tel: 416.863.1500 Fax: 416.865.1515
Sanjeev P.R. Mitra (LSO # 37934U)Email: [email protected]
Sam Babe (LSO # 49498B)Email: [email protected]
Lawyers for Royal Bank of Canada38387458.1
TAB 1(a)
Court File No. CV-20-00636359-00CL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
THE HONOURABLE ) FRIDAY, THE 21ST DAY )
JUSTICE ) OF FEBRUARY, 2020
BETWEEN:
ROYAL BANK OF CANADA
Applicant
- and –
AVG (OEAM) INC.
Respondent
APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3, AS AMENDED, AND SECTION 101 OF THE
COURTS OF JUSTICE ACT, R.S.O. 1990, c. C.43, AS AMENDED
ORDER (Appointment of Receiver)
THIS APPLICATION made by Royal Bank of Canada (“RBC”) for, inter alia, an
Order pursuant to subsection 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3,
as amended (the “BIA”), and section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as
amended (the “CJA”), appointing BDO Canada Limited (“BDO”) as receiver and manager (in
such capacity, the “Receiver”), without security, of all of the assets, undertakings and properties
of AVG (OEAM) Inc. (the “Debtor”), was heard this day at 330 University Avenue, Toronto,
Ontario.
- 2 -
ON READING the affidavit of Wajahat Mahmood sworn February 13, 2020 and the
exhibits thereto, and the consent of BDO to act as the Receiver, and on hearing the submissions
of counsel for RBC and counsel for the Debtor, and no one appearing for any other person on the
service list, although served as appears from the affidavit of service of <*> sworn February <*>,
2020, filed,
SERVICE
1. THIS COURT ORDERS that the time for service of the notice of application and the
application record is hereby abridged and validated and that this application is properly
returnable today and hereby dispenses with further service thereof.
APPOINTMENT OF RECEIVER
2. THIS COURT ORDERS that pursuant to subsection 243(1) of the BIA and section 101
of the CJA, BDO is hereby appointed Receiver, without security, of all of the assets,
undertakings and properties of the Debtor including all proceeds thereof (the “Property”).
RECEIVER’S POWERS
3. THIS COURT ORDERS that the Receiver is hereby empowered and authorized, but not
obligated, to act at once in respect of the Debtor and the Property and, without in any way
limiting the generality of the foregoing, the Receiver is hereby expressly empowered and
authorized to do any of the following where the Receiver considers it necessary or desirable:
(a) to take possession of and exercise control over the Property and any and all
proceeds, receipts and disbursements arising out of or from the Property;
(b) to receive, preserve, and protect the Property, or any part or parts thereof,
including, but not limited to, the changing of locks and security codes, the
relocating of Property to safeguard it, the engaging of independent security
personnel, the taking of physical inventories and the placement of such insurance
coverage as may be necessary or desirable;
(c) to manage, operate, and carry on the business of the Debtor, including the powers
to enter into any agreements, incur any obligations in the ordinary course of
- 3 -
business, cease to carry on all or any part of the business, or cease to perform any
contracts of the Debtor;
(d) to engage consultants, appraisers, agents, experts, auditors, accountants,
managers, counsel and such other persons from time to time and on whatever
basis, including on a temporary basis, to assist with the exercise of the Receiver’s
powers and duties, including without limitation those conferred by this Order;
(e) to purchase or lease such machinery, equipment, inventories, supplies, premises
or other assets to continue the business of the Debtor or any part or parts thereof;
(f) to receive and collect all monies and accounts now owed or hereafter owing to the
Debtor and to exercise all remedies of the Debtor in collecting such monies,
including, without limitation, to enforce any security held by the Debtor;
(g) to settle, extend or compromise any indebtedness owing to the Debtor;
(h) to execute, assign, issue and endorse documents of whatever nature in respect of
any of the Property, whether in the Receiver’s name or in the name and on behalf
of the Debtor, for any purpose pursuant to this Order;
(i) to initiate, prosecute and continue the prosecution of any and all proceedings and
to defend all proceedings now pending or hereafter instituted with respect to the
Debtor, the Property or the Receiver, and to settle or compromise any such
proceedings, and the authority hereby conveyed shall extend to such appeals or
applications for judicial review in respect of any order or judgment pronounced in
any such proceeding;
(j) to market any or all of the Property, including advertising and soliciting offers in
respect of the Property or any part or parts thereof and negotiating such terms and
conditions of sale as the Receiver in its discretion may deem appropriate;
(k) to sell, convey, transfer, lease or assign the Property or any part or parts thereof
out of the ordinary course of business,
- 4 -
(i) without the approval of this Court in respect of any transaction not
exceeding $100,000, provided that the aggregate consideration for all such
transactions does not exceed $250,000; and
(ii) with the approval of this Court in respect of any transaction in which the
purchase price or the aggregate purchase price exceeds the applicable
amount set out in the preceding clause;
and in each such case notice under subsection 63(4) of the Ontario Personal
Property Security Act, or section 31 of the Ontario Mortgages Act, as the case
may be, shall not be required;
(l) to apply for any vesting order or other orders necessary to convey the Property or
any part or parts thereof to a purchaser or purchasers thereof, free and clear of any
liens or encumbrances affecting such Property;
(m) to report to, meet with and discuss with such affected Persons (as defined below)
as the Receiver deems appropriate on all matters relating to the Property and the
receivership, and to share information, subject to such terms as to confidentiality
as the Receiver deems advisable;
(n) to register a copy of this Order and any other Orders in respect of the Property
against title to any of the Property;
(o) to apply for any permits, licences, approvals or permissions as may be required by
any governmental authority and any renewals thereof for and on behalf of and, if
thought desirable by the Receiver, in the name of the Debtor;
(p) to enter into agreements with any trustee in bankruptcy appointed in respect of the
Debtor, including, without limiting the generality of the foregoing, the ability to
enter into occupation agreements for any property owned or leased by the Debtor;
(q) to exercise any shareholder, partnership, joint venture or other rights which the
Debtor may have; and
- 5 -
(r) to take any steps reasonably incidental to the exercise of these powers or the
performance of any statutory obligations,
and in each case, the Receiver shall be exclusively authorized and empowered to do so, to the
exclusion of all other Persons (as defined below), including the Debtor, and without interference
from any other Person.
DUTY TO PROVIDE ACCESS AND CO-OPERATION TO THE RECEIVER
4. THIS COURT ORDERS that (i) the Debtor, (ii) all of its current and former directors,
officers, employees, agents, advisors, accountants, legal counsel and shareholders, and all other
persons acting on its instructions or behalf, and (iii) all other individuals, firms, corporations,
governmental bodies or agencies, or other entities having notice of this Order (all of the
foregoing, collectively, being “Persons” and each being a “Person”) shall forthwith advise the
Receiver of the existence of any Property in such Person’s possession or control, shall grant
immediate and continued access to the Property to the Receiver, and shall deliver all such
Property to the Receiver upon the Receiver’s request.
5. THIS COURT ORDERS that all Persons shall forthwith advise the Receiver of the
existence of any books, documents, securities, contracts, orders, corporate and accounting
records, and any other papers, records and information of any kind related to the business or
affairs of the Debtor, and any computer programs, computer tapes, computer disks, or other data
storage media containing any such information (the foregoing, collectively, the “Records”) in
that Person’s possession or control, and shall provide to the Receiver or permit the Receiver to
make, retain and take away copies thereof and grant to the Receiver unfettered access to and use
of accounting, computer, software and physical facilities relating thereto, provided however that
nothing in this paragraph 5 or in paragraph 6 of this Order shall require the delivery of Records,
or the granting of access to Records, which may not be disclosed or provided to the Receiver due
to the privilege attaching to solicitor-client communication or due to statutory provisions
prohibiting such disclosure.
6. THIS COURT ORDERS that if any Records are stored or otherwise contained on a
computer or other electronic system of information storage, whether by independent service
provider or otherwise, all Persons in possession or control of such Records shall forthwith give
- 6 -
unfettered access to the Receiver for the purpose of allowing the Receiver to recover and fully
copy all of the information contained therein whether by way of printing the information onto
paper or making copies of computer disks or such other manner of retrieving and copying the
information as the Receiver in its discretion deems expedient, and shall not alter, erase or destroy
any Records without the prior written consent of the Receiver. Further, for the purposes of this
paragraph, all Persons shall provide the Receiver with all such assistance in gaining immediate
access to the information in the Records as the Receiver may in its discretion require including
providing the Receiver with instructions on the use of any computer or other system and
providing the Receiver with any and all access codes, account names and account numbers that
may be required to gain access to the information.
7. THIS COURT ORDERS that the Receiver shall provide each of the relevant landlords
with notice of the Receiver’s intention to remove any fixtures from any leased premises at least
seven (7) days prior to the date of the intended removal. The relevant landlord shall be entitled
to have a representative present in the leased premises to observe such removal and, if the
landlord disputes the Receiver’s entitlement to remove any such fixture under the provisions of
the lease, such fixture shall remain on the premises and shall be dealt with as agreed between any
applicable secured creditors, such landlord and the Receiver, or by further Order of this Court
upon application by the Receiver on at least two (2) days’ notice to such landlord and any such
secured creditors.
NO PROCEEDINGS AGAINST THE RECEIVER
8. THIS COURT ORDERS that no proceeding or enforcement process in any court or
tribunal (each, a “Proceeding”), shall be commenced or continued against the Receiver except
with the written consent of the Receiver or with leave of this Court.
NO PROCEEDINGS AGAINST THE DEBTOR OR THE PROPERTY
9. THIS COURT ORDERS that no Proceeding against or in respect of the Debtor or the
Property shall be commenced or continued except with the written consent of the Receiver or
with leave of this Court and any and all Proceedings currently under way against or in respect of
the Debtor or the Property are hereby stayed and suspended pending further Order of this Court.
- 7 -
NO EXERCISE OF RIGHTS OR REMEDIES
10. THIS COURT ORDERS that all rights and remedies against the Debtor, the Receiver,
or affecting the Property, are hereby stayed and suspended except with the written consent of the
Receiver or leave of this Court, provided however that this stay and suspension does not apply in
respect of any “eligible financial contract” as defined in the BIA, and further provided that
nothing in this paragraph shall (i) empower the Receiver or the Debtor to carry on any business
which the Debtor is not lawfully entitled to carry on, (ii) exempt the Receiver or the Debtor from
compliance with statutory or regulatory provisions relating to health, safety or the environment
to which the Debtor is subject, (iii) prevent the filing of any registration to preserve or perfect a
security interest, or (iv) prevent the registration of a claim for lien.
NO INTERFERENCE WITH THE RECEIVER
11. THIS COURT ORDERS that no Person shall discontinue, fail to honour, alter, interfere
with, repudiate, terminate or cease to perform any right, renewal right, contract, agreement,
certificate, certification, consent, approval, licence or permit in favour of or held by the Debtor
without written consent of the Receiver or leave of this Court.
CONTINUATION OF SERVICES
12. THIS COURT ORDERS that all Persons having oral or written agreements with the
Debtor or statutory or regulatory mandates for the supply of goods and/or services, including
without limitation, all computer software, communication and other data services, centralized
banking services, payroll services, insurance, transportation services, utility or other services to
the Debtor are hereby restrained until further Order of this Court from discontinuing, altering,
interfering with or terminating the supply of such goods or services as may be required by the
Receiver, and that the Receiver shall be entitled to the continued use of the Debtor’s current
telephone numbers, facsimile numbers, internet addresses and domain names, provided in each
case that the normal prices or charges for all such goods or services received after the date of this
Order are paid by the Receiver in accordance with normal payment practices of the Debtor or
such other practices as may be agreed upon by the supplier or service provider and the Receiver,
or as may be ordered by this Court.
- 8 -
RECEIVER TO HOLD FUNDS
13. THIS COURT ORDERS that all funds, monies, cheques, instruments, and other forms
of payments received or collected by the Receiver from and after the making of this Order from
any source whatsoever, including without limitation the sale of all or any of the Property and the
collection of any accounts receivable in whole or in part, whether in existence on the date of this
Order or hereafter coming into existence, shall be deposited into one or more new accounts to be
opened by the Receiver (the “Post Receivership Accounts”) and the monies standing to the
credit of such Post Receivership Accounts from time to time, net of any disbursements provided
for herein, shall be held by the Receiver to be paid in accordance with the terms of this Order or
any further Order of this Court.
EMPLOYEES
14. THIS COURT ORDERS that all employees of the Debtor shall remain the employees
of the Debtor until such time as the Receiver, on the Debtor’s behalf, may terminate the
employment of such employees. The Receiver shall not be liable for any employee-related
liabilities, including any successor employer liabilities as provided for in subsection 14.06(1.2)
of the BIA, other than such amounts as the Receiver may specifically agree in writing to pay, or
in respect of its obligations under subsections 81.4(5) or 81.6(3) of the BIA or under the Wage
Earner Protection Program Act.
PIPEDA
15. THIS COURT ORDERS that, pursuant to clause 7(3)(c) of the Canada Personal
Information Protection and Electronic Documents Act, the Receiver may disclose personal
information of identifiable individuals to prospective purchasers or bidders for the Property and
to their advisors, but only to the extent desirable or required to negotiate and attempt to complete
one or more sales of the Property (each, a “Sale”). Each prospective purchaser or bidder to
whom such personal information is disclosed shall maintain and protect the privacy of such
information and limit the use of such information to its evaluation of the Sale, and if it does not
complete a Sale, shall return all such information to the Receiver, or in the alternative destroy all
such information. The purchaser of any Property shall be entitled to continue to use the personal
information provided to it, and related to the Property purchased, in a manner which is in all
- 9 -
material respects identical to the prior use of such information by the Debtor, and shall return all
other personal information to the Receiver, or ensure that all other personal information is
destroyed.
LIMITATION ON ENVIRONMENTAL LIABILITIES
16. THIS COURT ORDERS that nothing herein contained shall require the Receiver to
occupy or to take control, care, charge, possession or management (separately and/or
collectively, “Possession”) of any of the Property that might be environmentally contaminated,
might be a pollutant or a contaminant, or might cause or contribute to a spill, discharge, release
or deposit of a substance contrary to any federal, provincial or other law respecting the
protection, conservation, enhancement, remediation or rehabilitation of the environment or
relating to the disposal of waste or other contamination including, without limitation, the
Canadian Environmental Protection Act, the Ontario Environmental Protection Act, the Ontario
Water Resources Act, or the Ontario Occupational Health and Safety Act and regulations
thereunder (the “Environmental Legislation”), provided however that nothing herein shall
exempt the Receiver from any duty to report or make disclosure imposed by applicable
Environmental Legislation. The Receiver shall not, as a result of this Order or anything done in
pursuance of the Receiver’s duties and powers under this Order, be deemed to be in Possession
of any of the Property within the meaning of any Environmental Legislation, unless it is actually
in possession.
LIMITATION ON THE RECEIVER’S LIABILITY
17. THIS COURT ORDERS that the Receiver shall incur no liability or obligation as a
result of its appointment or the carrying out the provisions of this Order, save and except for any
gross negligence or wilful misconduct on its part, or in respect of its obligations under
subsections 81.4(5) or 81.6(3) of the BIA or under the Wage Earner Protection Program Act.
Nothing in this Order shall derogate from the protections afforded the Receiver by section 14.06
of the BIA or by any other applicable legislation.
RECEIVER’S ACCOUNTS
18. THIS COURT ORDERS that the Receiver and counsel to the Receiver shall be paid
their reasonable fees and disbursements, in each case at their standard rates and charges, and that
- 10 -
the Receiver and counsel to the Receiver shall be entitled to and are hereby granted a charge (the
“Receiver’s Charge”) on the Property, as security for such fees and disbursements, both before
and after the making of this Order in respect of these proceedings, and that the Receiver’s
Charge shall form a first charge on the Property in priority to all security interests, trusts, liens,
charges and encumbrances, statutory or otherwise, in favour of any Person, but subject to the
charges as set out in subsections 14.06(7), 81.4(4), and 81.6(2) of the BIA.
19. THIS COURT ORDERS that the Receiver and its legal counsel shall pass their
accounts from time to time, and for this purpose the accounts of the Receiver and its legal
counsel are hereby referred to a judge of the Commercial List of the Ontario Superior Court of
Justice.
20. THIS COURT ORDERS that prior to the passing of its accounts, the Receiver shall be
at liberty from time to time to apply reasonable amounts, out of the monies in its hands, against
its fees and disbursements, including legal fees and disbursements, incurred at the normal rates
and charges of the Receiver or its counsel, and such amounts shall constitute advances against its
remuneration and disbursements when and as approved by this Court.
FUNDING OF THE RECEIVERSHIP
21. THIS COURT ORDERS that the Receiver be at liberty and it is hereby empowered to
borrow by way of a revolving credit or otherwise, such monies from time to time as it may
consider necessary or desirable, provided that the outstanding principal amount does not exceed
$250,000 (or such greater amount as this Court may by further Order authorize) at any time, at
such rate or rates of interest as it deems advisable for such period or periods of time as it may
arrange, for the purpose of funding the exercise of the powers and duties conferred upon the
Receiver by this Order, including interim expenditures, and for the purposes of funding the
Debtor’s operations. The whole of the Property shall be and is hereby charged by way of a fixed
and specific charge (the “Receiver’s Borrowings Charge”) as security for the payment of the
monies borrowed, together with interest and charges thereon, in priority to all security interests,
trusts, liens, charges and encumbrances, statutory or otherwise, in favour of any Person, but
subordinate in priority to the Receiver’s Charge and the charges as set out in sections 14.06(7),
81.4(4), and 81.6(2) of the BIA.
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22. THIS COURT ORDERS that neither the Receiver’s Borrowings Charge nor any other
security granted by the Receiver in connection with its borrowings under this Order shall be
enforced without leave of this Court.
23. THIS COURT ORDERS that the Receiver is at liberty and authorized to issue
certificates substantially in the form annexed as Schedule “A” hereto (the “Receiver’s
Certificates”) for any amount borrowed by it pursuant to this Order.
24. THIS COURT ORDERS that the monies from time to time borrowed by the Receiver
pursuant to this Order or any further order of this Court and any and all Receiver’s Certificates
evidencing the same or any part thereof shall rank on a pari passu basis, unless otherwise agreed
to by the holders of any prior issued Receiver’s Certificates.
SERVICE AND NOTICE
25. THIS COURT ORDERS that the E-Service Protocol of the Commercial List (the
“Protocol”) is approved and adopted by reference herein and, in this proceeding, the service of
documents made in accordance with the Protocol (which can be found on the Commercial List
website at http://www.ontariocourts.ca/scj/practice/practice-directions/toronto/eservice-
commercial/) shall be valid and effective service. Subject to Rule 17.05 this Order shall
constitute an order for substituted service pursuant to Rule 16.04 of the Rules of Civil Procedure.
Subject to Rule 3.01(d) of the Rules of Civil Procedure and paragraph 21 of the Protocol, service
of documents in accordance with the Protocol will be effective on transmission. This Court
further orders that a Case Website shall be established in accordance with the Protocol with the
following URL ‘<*>’.
26. THIS COURT ORDERS that if the service or distribution of documents in accordance
with the Protocol is not practicable, the Receiver is at liberty to serve or distribute this Order, any
other materials and orders in these proceedings, any notices or other correspondence, by
forwarding true copies thereof by prepaid ordinary mail, courier, personal delivery or facsimile
transmission to the Debtor’s creditors or other interested parties at their respective addresses as
last shown on the records of the Debtor and that any such service or distribution by courier,
personal delivery or facsimile transmission shall be deemed to be received on the next business
- 12 -
day following the date of forwarding thereof, or if sent by ordinary mail, on the third business
day after mailing.
GENERAL
27. THIS COURT ORDERS that the Receiver may from time to time apply to this Court
for advice and directions in the discharge of its powers and duties hereunder.
28. THIS COURT ORDERS that nothing in this Order shall prevent BDO from acting as a
trustee in bankruptcy of the Debtor.
29. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,
regulatory or administrative body having jurisdiction in any jurisdiction in which the Property is
located including, without limitation, Canada or the United States, to give effect to this Order
and to assist the Receiver and its agents in carrying out the terms of this Order. All courts,
tribunals, regulatory and administrative bodies are hereby respectfully requested to make such
orders and to provide such assistance to the Receiver, as an officer of this Court and as foreign
representative of the Debtor, as may be necessary or desirable to give effect to this Order or to
assist the Receiver and its agents in carrying out the terms of this Order.
30. THIS COURT ORDERS that the Receiver be at liberty and is hereby authorized and
empowered to apply to any court, tribunal, regulatory or administrative body, wherever located,
for the recognition of this Order and for assistance in carrying out the terms of this Order, and
that the Receiver is authorized and empowered to act as a foreign representative in respect of the
Debtor and the within proceedings for the purpose of having the within proceedings and this or
any other Orders made in the within proceedings recognized in a jurisdiction outside Canada.
31. THIS COURT ORDERS that the Applicant, the Receiver and their respective counsel
are at liberty to serve or distribute this Order, any other materials and orders as may be
reasonably required in these proceedings, including any notices, or other correspondence, by
forwarding true copies thereof by electronic message to the Debtor’s creditors or other interested
parties and their advisors. For greater certainty, any such distribution or service shall be deemed
to be in satisfaction of a legal or juridical obligation, and notice requirements within the meaning
- 13 -
of clause 3(c) of the Electronic Commerce Protection Regulations, Reg. 81000-2-175
(SOR/DORS).
32. THIS COURT ORDERS that the Applicant shall have its costs of this Application, up
to and including entry and service of this Order, provided for by the terms of the Applicant’s
security or, if not so provided by the Applicant’s security, then on a substantial indemnity basis
to be paid by the Receiver from the Debtor’s estate with such priority and at such time as this
Court may determine.
33. THIS COURT ORDERS that any interested party may apply to this Court to vary or
amend this Order on not less than seven (7) days’ notice to the Receiver and to any other party
likely to be affected by the order sought or upon such other notice, if any, as this Court may
order.
SCHEDULE “A”
RECEIVER CERTIFICATE
CERTIFICATE NO. ____
AMOUNT $ _______________
1. THIS IS TO CERTIFY that BDO Canada Limited, the receiver (the “Receiver”) of the
assets, undertakings and properties of AVG (OEAM) Inc. (the “Debtor”), including all proceeds
thereof (collectively, the “Property”) appointed by Order of the Ontario Superior Court of
Justice (Commercial List) (the “Court”) dated the 21st day of February, 2020 (the “Order”)
made in an action having Court file number CV-20-00636359-00CL, has received as such
Receiver from the holder of this certificate (the “Lender”) the principal sum of
$_______________, being part of the total principal sum of $_________________ which the
Receiver is authorized to borrow under and pursuant to the Order.
2. The principal sum evidenced by this certificate is payable on demand by the Lender with
interest thereon calculated and compounded [daily][monthly not in advance on the ____ day of
each month] after the date hereof at a notional rate per annum equal to the rate of ____ per cent
above the prime commercial lending rate of Bank of _______________ from time to time.
3. Such principal sum with interest thereon is, by the terms of the Order, together with the
principal sums and interest thereon of all other certificates issued by the Receiver pursuant to the
Order or to any further order of the Court, a charge upon the whole of the Property, in priority to
the security interests of any other person, but subject to the priority of the charges set out in the
Order and in the Bankruptcy and Insolvency Act, and the right of the Receiver to indemnify itself
out of such Property in respect of its remuneration and expenses.
4. All sums payable in respect of principal and interest under this certificate are payable at
the main office of the Lender at Toronto, Ontario.
5. Until all liability in respect of this certificate has been terminated, no certificates creating
charges ranking or purporting to rank in priority to this certificate shall be issued by the Receiver
to any person other than the holder of this certificate without the prior written consent of the
holder of this certificate.
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6. The charge securing this certificate shall operate so as to permit the Receiver to deal with
the Property as authorized by the Order and as authorized by any further or other order of the
Court.
7. The Receiver does not undertake, and it is not under any personal liability, to pay any
sum in respect of which it may issue certificates under the terms of the Order.
DATED the ____ day of _________________, 2020.
BDO CANADA LIMITED, solely in its capacity as Receiver of AVG (OEAM) Inc., and not in its corporate or personal capacity
Per:
Name:
Title:
ROYAL BANK OF CANADA
Applicant
and AVG (OEAM) INC.
Respondent
Court File No. CV-20-00636359-00CL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST PROCEEDING COMMENCED AT TORONTO
RECEIVERSHIP ORDER
AIRD & BERLIS LLP Barristers and Solicitors
Brookfield Place Suite 1800, 181 Bay Street
Toronto, ON M5J 2T9 Tel: 416.863.1500 Fax: 416.865.1515
Sanjeev P.R. Mitra (LSO # 37934U) Email: [email protected]
Sam Babe (LSO # 49498B) Email: [email protected]
Lawyers for Royal Bank of Canada38902589.2
TAB 2
1 The Model Order Subcommittee notes that a receivership proceeding may be commenced by action or by application. This model order is drafted on the basis that the receivership proceeding is commenced by way of an action.
Revised: January 21, 2014s.243(1) BIA (National Receiver) and s. 101 CJA (Ontario) Receiver
Court File No. CV-20-00636359-00CL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
THE HONOURABLE JUSTICE
))
)
WEEKDAYFRIDAY, THE #21ST
DAY OF MONTH, 20YR
)JUSTICE ) OF FEBRUARY, 2020
DOCSTOR: 1771742\9DOCSTOR: 1771742\9
PLAINTIFF1
Plaintiff
BETWEEN:
ROYAL BANK OF CANADA
Applicant
- and -–
DEFENDANT
Defendant
AVG (OEAM) INC.
Respondent
- 2 -
2 Section 243(1) of the BIA provides that the Court may appoint a receiver "on application by a secured creditor".3 If service is effected in a manner other than as authorized by the Ontario Rules of Civil Procedure, an order
validating irregular service is required pursuant to Rule 16.08 of the Rules of Civil Procedure and may be granted in appropriate circumstances.
APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3, AS AMENDED, AND SECTION 101 OF THE
COURTS OF JUSTICE ACT, R.S.O. 1990, c. C.43, AS AMENDED
ORDER(appointing
(Appointment of Receiver)
THIS MOTIONAPPLICATION made by the Plaintiff2 forRoyal Bank of Canada
(“RBC”) for, inter alia, an Order pursuant to sectionsubsection 243(1) of the Bankruptcy and
Insolvency Act, R.S.C. 1985, c. B-3, as amended (the "“BIA"”) , and section 101 of the Courts of
Justice Act, R.S.O. 1990, c. C.43, as amended (the "“CJA"”), appointing [RECEIVER'S
NAME]BDO Canada Limited (“BDO”) as receiver [and manager] (in such capacitiescapacity,
the "“Receiver"”), without security, of all of the assets, undertakings and properties of
[DEBTOR'S NAME] (the "Debtor") acquired for, or used in relation to a business carried on by
the DebtorAVG (OEAM) Inc. (the “Debtor”), was heard this day at 330 University Avenue,
Toronto, Ontario.
ON READING the affidavit of [NAME]Wajahat Mahmood sworn [DATE]February 13,
2020 and the Exhibitsexhibits thereto, and the consent of BDO to act as the Receiver, and on
hearing the submissions of counsel for [NAMES],RBC and counsel for the Debtor, and no one
appearing for [NAME]any other person on the service list, although duly served as appears from
the affidavit of service of [NAME] sworn [DATE] and on reading the consent of [RECEIVER'S
NAME] to act as the Receiver,<*> sworn February <*>, 2020, filed,
SERVICE
THIS COURT ORDERS that the time for service of the Noticenotice of1.
Motionapplication and the Motionapplication record is hereby abridged and validated3 so and
- 3 -
that this motionapplication is properly returnable today and hereby dispenses with further service
thereof.
APPOINTMENT OF RECEIVER
THIS COURT ORDERS that pursuant to sectionsubsection 243(1) of the BIA and2.
section 101 of the CJA, [RECEIVER'S NAME]BDO is hereby appointed Receiver, without
security, of all of the assets, undertakings and properties of the Debtor acquired for, or used in
relation to a business carried on by the Debtor, including all proceeds thereof (the "“Property"”).
RECEIVER’S POWERS
THIS COURT ORDERS that the Receiver is hereby empowered and authorized, but not3.
obligated, to act at once in respect of the Debtor and the Property and, without in any way
limiting the generality of the foregoing, the Receiver is hereby expressly empowered and
authorized to do any of the following where the Receiver considers it necessary or desirable:
to take possession of and exercise control over the Property and any and all(a)
proceeds, receipts and disbursements arising out of or from the Property;
to receive, preserve, and protect the Property, or any part or parts thereof,(b)
including, but not limited to, the changing of locks and security codes, the
relocating of Property to safeguard it, the engaging of independent security
personnel, the taking of physical inventories and the placement of such insurance
coverage as may be necessary or desirable;
to manage, operate, and carry on the business of the Debtor, including the powers(c)
to enter into any agreements, incur any obligations in the ordinary course of
business, cease to carry on all or any part of the business, or cease to perform any
contracts of the Debtor;
to engage consultants, appraisers, agents, experts, auditors, accountants,(d)
managers, counsel and such other persons from time to time and on whatever
basis, including on a temporary basis, to assist with the exercise of the Receiver'’s
powers and duties, including without limitation those conferred by this Order;
- 4 -
4 This model order does not include specific authority permitting the Receiver to either file an assignment in bankruptcy on behalf of the Debtor, or to consent to the making of a bankruptcy order against the Debtor. A bankruptcy may have the effect of altering the priorities among creditors, and therefore the specific authority of the Court should be sought if the Receiver wishes to take one of these steps.
to purchase or lease such machinery, equipment, inventories, supplies, premises or(e)
other assets to continue the business of the Debtor or any part or parts thereof;
to receive and collect all monies and accounts now owed or hereafter owing to the(f)
Debtor and to exercise all remedies of the Debtor in collecting such monies,
including, without limitation, to enforce any security held by the Debtor;
to settle, extend or compromise any indebtedness owing to the Debtor;(g)
to execute, assign, issue and endorse documents of whatever nature in respect of(h)
any of the Property, whether in the Receiver'’s name or in the name and on behalf
of the Debtor, for any purpose pursuant to this Order;
to initiate, prosecute and continue the prosecution of any and all proceedings and(i)
to defend all proceedings now pending or hereafter instituted with respect to the
Debtor, the Property or the Receiver, and to settle or compromise any such
proceedings.4 The, and the authority hereby conveyed shall extend to such appeals
or applications for judicial review in respect of any order or judgment pronounced
in any such proceeding;
to market any or all of the Property, including advertising and soliciting offers in(j)
respect of the Property or any part or parts thereof and negotiating such terms and
conditions of sale as the Receiver in its discretion may deem appropriate;
to sell, convey, transfer, lease or assign the Property or any part or parts thereof(k)
out of the ordinary course of business,
without the approval of this Court in respect of any transaction not(i)
exceeding $________,100,000, provided that the aggregate consideration
for all such transactions does not exceed $__________250,000; and
- 5 -
5 If the Receiver will be dealing with assets in other provinces, consider adding references to applicable statutes in other provinces. If this is done, those statutes must be reviewed to ensure that the Receiver is exempt from or can be exempted from such notice periods, and further that the Ontario Court has the jurisdiction to grant such an exemption.
with the approval of this Court in respect of any transaction in which the(ii)
purchase price or the aggregate purchase price exceeds the applicable
amount set out in the preceding clause;
and in each such case notice under subsection 63(4) of the Ontario Personal
Property Security Act, [or section 31 of the Ontario Mortgages Act, as the case
may be,]5 shall not be required, and in each case the Ontario Bulk Sales Act shall
not apply.;
to apply for any vesting order or other orders necessary to convey the Property or(l)
any part or parts thereof to a purchaser or purchasers thereof, free and clear of any
liens or encumbrances affecting such Property;
to report to, meet with and discuss with such affected Persons (as defined below)(m)
as the Receiver deems appropriate on all matters relating to the Property and the
receivership, and to share information, subject to such terms as to confidentiality
as the Receiver deems advisable;
to register a copy of this Order and any other Orders in respect of the Property(n)
against title to any of the Property;
to apply for any permits, licences, approvals or permissions as may be required by(o)
any governmental authority and any renewals thereof for and on behalf of and, if
thought desirable by the Receiver, in the name of the Debtor;
to enter into agreements with any trustee in bankruptcy appointed in respect of the(p)
Debtor, including, without limiting the generality of the foregoing, the ability to
enter into occupation agreements for any property owned or leased by the Debtor;
to exercise any shareholder, partnership, joint venture or other rights which the(q)
Debtor may have; and
- 6 -
to take any steps reasonably incidental to the exercise of these powers or the(r)
performance of any statutory obligations.,
and in each case where, the Receiver takes any such actions or steps, it shall be exclusively
authorized and empowered to do so, to the exclusion of all other Persons (as defined below),
including the Debtor, and without interference from any other Person.
DUTY TO PROVIDE ACCESS AND CO-OPERATION TO THE RECEIVER
THIS COURT ORDERS that (i) the Debtor, (ii) all of its current and former directors,4.
officers, employees, agents, advisors, accountants, legal counsel and shareholders, and all other
persons acting on its instructions or behalf, and (iii) all other individuals, firms, corporations,
governmental bodies or agencies, or other entities having notice of this Order (all of the
foregoing, collectively, being "“Persons"” and each being a "“Person"”) shall forthwith advise
the Receiver of the existence of any Property in such Person'’s possession or control, shall grant
immediate and continued access to the Property to the Receiver, and shall deliver all such
Property to the Receiver upon the Receiver'’s request.
THIS COURT ORDERS that all Persons shall forthwith advise the Receiver of the5.
existence of any books, documents, securities, contracts, orders, corporate and accounting
records, and any other papers, records and information of any kind related to the business or
affairs of the Debtor, and any computer programs, computer tapes, computer disks, or other data
storage media containing any such information (the foregoing, collectively, the "“Records"”) in
that Person'’s possession or control, and shall provide to the Receiver or permit the Receiver to
make, retain and take away copies thereof and grant to the Receiver unfettered access to and use
of accounting, computer, software and physical facilities relating thereto, provided however that
nothing in this paragraph 5 or in paragraph 6 of this Order shall require the delivery of Records,
or the granting of access to Records, which may not be disclosed or provided to the Receiver due
to the privilege attaching to solicitor-client communication or due to statutory provisions
prohibiting such disclosure.
THIS COURT ORDERS that if any Records are stored or otherwise contained on a6.
computer or other electronic system of information storage, whether by independent service
- 7 -
provider or otherwise, all Persons in possession or control of such Records shall forthwith give
unfettered access to the Receiver for the purpose of allowing the Receiver to recover and fully
copy all of the information contained therein whether by way of printing the information onto
paper or making copies of computer disks or such other manner of retrieving and copying the
information as the Receiver in its discretion deems expedient, and shall not alter, erase or destroy
any Records without the prior written consent of the Receiver. Further, for the purposes of this
paragraph, all Persons shall provide the Receiver with all such assistance in gaining immediate
access to the information in the Records as the Receiver may in its discretion require including
providing the Receiver with instructions on the use of any computer or other system and
providing the Receiver with any and all access codes, account names and account numbers that
may be required to gain access to the information.
THIS COURT ORDERS that the Receiver shall provide each of the relevant landlords7.
with notice of the Receiver’s intention to remove any fixtures from any leased premises at least
seven (7) days prior to the date of the intended removal. The relevant landlord shall be entitled
to have a representative present in the leased premises to observe such removal and, if the
landlord disputes the Receiver’s entitlement to remove any such fixture under the provisions of
the lease, such fixture shall remain on the premises and shall be dealt with as agreed between any
applicable secured creditors, such landlord and the Receiver, or by further Order of this Court
upon application by the Receiver on at least two (2) days’ notice to such landlord and any such
secured creditors.
NO PROCEEDINGS AGAINST THE RECEIVER
THIS COURT ORDERS that no proceeding or enforcement process in any court or8.
tribunal (each, a "“Proceeding"”), shall be commenced or continued against the Receiver except
with the written consent of the Receiver or with leave of this Court.
NO PROCEEDINGS AGAINST THE DEBTOR OR THE PROPERTY
THIS COURT ORDERS that no Proceeding against or in respect of the Debtor or the9.
Property shall be commenced or continued except with the written consent of the Receiver or
with leave of this Court and any and all Proceedings currently under way against or in respect of
the Debtor or the Property are hereby stayed and suspended pending further Order of this Court.
- 8 -
NO EXERCISE OF RIGHTS OR REMEDIES
THIS COURT ORDERS that all rights and remedies against the Debtor, the Receiver,10.
or affecting the Property, are hereby stayed and suspended except with the written consent of the
Receiver or leave of this Court, provided however that this stay and suspension does not apply in
respect of any "“eligible financial contract"” as defined in the BIA, and further provided that
nothing in this paragraph shall (i) empower the Receiver or the Debtor to carry on any business
which the Debtor is not lawfully entitled to carry on, (ii) exempt the Receiver or the Debtor from
compliance with statutory or regulatory provisions relating to health, safety or the environment to
which the Debtor is subject, (iii) prevent the filing of any registration to preserve or perfect a
security interest, or (iv) prevent the registration of a claim for lien.
NO INTERFERENCE WITH THE RECEIVER
THIS COURT ORDERS that no Person shall discontinue, fail to honour, alter, interfere11.
with, repudiate, terminate or cease to perform any right, renewal right, contract, agreement,
certificate, certification, consent, approval, licence or permit in favour of or held by the Debtor,
without written consent of the Receiver or leave of this Court.
CONTINUATION OF SERVICES
THIS COURT ORDERS that all Persons having oral or written agreements with the12.
Debtor or statutory or regulatory mandates for the supply of goods and/or services, including
without limitation, all computer software, communication and other data services, centralized
banking services, payroll services, insurance, transportation services, utility or other services to
the Debtor are hereby restrained until further Order of this Court from discontinuing, altering,
interfering with or terminating the supply of such goods or services as may be required by the
Receiver, and that the Receiver shall be entitled to the continued use of the Debtor'’s current
telephone numbers, facsimile numbers, internet addresses and domain names, provided in each
case that the normal prices or charges for all such goods or services received after the date of this
Order are paid by the Receiver in accordance with normal payment practices of the Debtor or
such other practices as may be agreed upon by the supplier or service provider and the Receiver,
or as may be ordered by this Court.
- 9 -
RECEIVER TO HOLD FUNDS
THIS COURT ORDERS that all funds, monies, cheques, instruments, and other forms13.
of payments received or collected by the Receiver from and after the making of this Order from
any source whatsoever, including without limitation the sale of all or any of the Property and the
collection of any accounts receivable in whole or in part, whether in existence on the date of this
Order or hereafter coming into existence, shall be deposited into one or more new accounts to be
opened by the Receiver (the "“Post Receivership Accounts"”) and the monies standing to the
credit of such Post Receivership Accounts from time to time, net of any disbursements provided
for herein, shall be held by the Receiver to be paid in accordance with the terms of this Order or
any further Order of this Court.
EMPLOYEES
THIS COURT ORDERS that all employees of the Debtor shall remain the employees of14.
the Debtor until such time as the Receiver, on the Debtor'’s behalf, may terminate the
employment of such employees. The Receiver shall not be liable for any employee-related
liabilities, including any successor employer liabilities as provided for in subsection 14.06(1.2) of
the BIA, other than such amounts as the Receiver may specifically agree in writing to pay, or in
respect of its obligations under subsections 81.4(5) or 81.6(3) of the BIA or under the Wage
Earner Protection Program Act.
PIPEDA
THIS COURT ORDERS that, pursuant to clause 7(3)(c) of the Canada Personal15.
Information Protection and Electronic Documents Act, the Receiver shallmay disclose personal
information of identifiable individuals to prospective purchasers or bidders for the Property and
to their advisors, but only to the extent desirable or required to negotiate and attempt to complete
one or more sales of the Property (each, a "“Sale"”). Each prospective purchaser or bidder to
whom such personal information is disclosed shall maintain and protect the privacy of such
information and limit the use of such information to its evaluation of the Sale, and if it does not
complete a Sale, shall return all such information to the Receiver, or in the alternative destroy all
such information. The purchaser of any Property shall be entitled to continue to use the personal
information provided to it, and related to the Property purchased, in a manner which is in all
- 10 -
material respects identical to the prior use of such information by the Debtor, and shall return all
other personal information to the Receiver, or ensure that all other personal information is
destroyed.
LIMITATION ON ENVIRONMENTAL LIABILITIES
THIS COURT ORDERS that nothing herein contained shall require the Receiver to16.
occupy or to take control, care, charge, possession or management (separately and/or collectively,
"“Possession"”) of any of the Property that might be environmentally contaminated, might be a
pollutant or a contaminant, or might cause or contribute to a spill, discharge, release or deposit of
a substance contrary to any federal, provincial or other law respecting the protection,
conservation, enhancement, remediation or rehabilitation of the environment or relating to the
disposal of waste or other contamination including, without limitation, the Canadian
Environmental Protection Act, the Ontario Environmental Protection Act, the Ontario Water
Resources Act, or the Ontario Occupational Health and Safety Act and regulations thereunder
(the "“Environmental Legislation"”), provided however that nothing herein shall exempt the
Receiver from any duty to report or make disclosure imposed by applicable Environmental
Legislation. The Receiver shall not, as a result of this Order or anything done in pursuance of the
Receiver'’s duties and powers under this Order, be deemed to be in Possession of any of the
Property within the meaning of any Environmental Legislation, unless it is actually in possession.
LIMITATION ON THE RECEIVER’S LIABILITY
THIS COURT ORDERS that the Receiver shall incur no liability or obligation as a17.
result of its appointment or the carrying out the provisions of this Order, save and except for any
gross negligence or wilful misconduct on its part, or in respect of its obligations under
subsections 81.4(5) or 81.6(3) of the BIA or under the Wage Earner Protection Program Act.
Nothing in this Order shall derogate from the protections afforded the Receiver by section 14.06
of the BIA or by any other applicable legislation.
RECEIVER'’S ACCOUNTS
THIS COURT ORDERS that the Receiver and counsel to the Receiver shall be paid18.
their reasonable fees and disbursements, in each case at their standard rates and charges unless
otherwise ordered by the Court on the passing of accounts, and that the Receiver and counsel to
- 11 -
6 Note that subsection 243(6) of the BIA provides that the Court may not make such an order "unless it is satisfied that the secured creditors who would be materially affected by the order were given reasonable notice and an opportunity to make representations".
the Receiver shall be entitled to and are hereby granted a charge (the "“Receiver'’s Charge"”) on
the Property, as security for such fees and disbursements, both before and after the making of this
Order in respect of these proceedings, and that the Receiver'’s Charge shall form a first charge on
the Property in priority to all security interests, trusts, liens, charges and encumbrances, statutory
or otherwise, in favour of any Person, but subject to sectionsthe charges as set out in subsections
14.06(7), 81.4(4), and 81.6(2) of the BIA.6
THIS COURT ORDERS that the Receiver and its legal counsel shall pass itstheir19.
accounts from time to time, and for this purpose the accounts of the Receiver and its legal
counsel are hereby referred to a judge of the Commercial List of the Ontario Superior Court of
Justice.
THIS COURT ORDERS that prior to the passing of its accounts, the Receiver shall be20.
at liberty from time to time to apply reasonable amounts, out of the monies in its hands, against
its fees and disbursements, including legal fees and disbursements, incurred at the
standardnormal rates and charges of the Receiver or its counsel, and such amounts shall
constitute advances against its remuneration and disbursements when and as approved by this
Court.
FUNDING OF THE RECEIVERSHIP
THIS COURT ORDERS that the Receiver be at liberty and it is hereby empowered to21.
borrow by way of a revolving credit or otherwise, such monies from time to time as it may
consider necessary or desirable, provided that the outstanding principal amount does not exceed
$_________250,000 (or such greater amount as this Court may by further Order authorize) at any
time, at such rate or rates of interest as it deems advisable for such period or periods of time as it
may arrange, for the purpose of funding the exercise of the powers and duties conferred upon the
Receiver by this Order, including interim expenditures, and for the purposes of funding the
Debtor’s operations. The whole of the Property shall be and is hereby charged by way of a fixed
and specific charge (the "“Receiver'’s Borrowings Charge"”) as security for the payment of the
monies borrowed, together with interest and charges thereon, in priority to all security interests,
- 12 -
trusts, liens, charges and encumbrances, statutory or otherwise, in favour of any Person, but
subordinate in priority to the Receiver’s Charge and the charges as set out in sections 14.06(7),
81.4(4), and 81.6(2) of the BIA.
THIS COURT ORDERS that neither the Receiver'’s Borrowings Charge nor any other22.
security granted by the Receiver in connection with its borrowings under this Order shall be
enforced without leave of this Court.
THIS COURT ORDERS that the Receiver is at liberty and authorized to issue23.
certificates substantially in the form annexed as Schedule "“A"” hereto (the "“Receiver’s
Certificates"”) for any amount borrowed by it pursuant to this Order.
THIS COURT ORDERS that the monies from time to time borrowed by the Receiver24.
pursuant to this Order or any further order of this Court and any and all Receiver’s Certificates
evidencing the same or any part thereof shall rank on a pari passu basis, unless otherwise agreed
to by the holders of any prior issued Receiver'’s Certificates.
SERVICE AND NOTICE
THIS COURT ORDERS that the E-Service Protocol of the Commercial List (the25.
“Protocol”) is approved and adopted by reference herein and, in this proceeding, the service of
documents made in accordance with the Protocol (which can be found on the Commercial List
website at
http://www.ontariocourts.ca/scj/practice/practice-directions/toronto/e-service-protocol/http://ww
w.ontariocourts.ca/scj/practice/practice-directions/toronto/eservice-commercial/) shall be valid
and effective service. Subject to Rule 17.05 this Order shall constitute an order for substituted
service pursuant to Rule 16.04 of the Rules of Civil Procedure. Subject to Rule 3.01(d) of the
Rules of Civil Procedure and paragraph 21 of the Protocol, service of documents in accordance
with the Protocol will be effective on transmission. This Court further orders that a Case
Website shall be established in accordance with the Protocol with the following URL ‘<@*>’.
THIS COURT ORDERS that if the service or distribution of documents in accordance26.
with the Protocol is not practicable, the Receiver is at liberty to serve or distribute this Order, any
other materials and orders in these proceedings, any notices or other correspondence, by
- 13 -
forwarding true copies thereof by prepaid ordinary mail, courier, personal delivery or facsimile
transmission to the Debtor'’s creditors or other interested parties at their respective addresses as
last shown on the records of the Debtor and that any such service or distribution by courier,
personal delivery or facsimile transmission shall be deemed to be received on the next business
day following the date of forwarding thereof, or if sent by ordinary mail, on the third business
day after mailing.
GENERAL
THIS COURT ORDERS that the Receiver may from time to time apply to this Court27.
for advice and directions in the discharge of its powers and duties hereunder.
THIS COURT ORDERS that nothing in this Order shall prevent the ReceiverBDO from28.
acting as a trustee in bankruptcy of the Debtor.
THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,29.
regulatory or administrative body having jurisdiction in any jurisdiction in which the Property is
located including, without limitation, Canada or in the United States, to give effect to this Order
and to assist the Receiver and its agents in carrying out the terms of this Order. All courts,
tribunals, regulatory and administrative bodies are hereby respectfully requested to make such
orders and to provide such assistance to the Receiver, as an officer of this Court and as foreign
representative of the Debtor, as may be necessary or desirable to give effect to this Order or to
assist the Receiver and its agents in carrying out the terms of this Order.
THIS COURT ORDERS that the Receiver be at liberty and is hereby authorized and30.
empowered to apply to any court, tribunal, regulatory or administrative body, wherever located,
for the recognition of this Order and for assistance in carrying out the terms of this Order, and
that the Receiver is authorized and empowered to act as a foreign representative in respect of the
Debtor and the within proceedings for the purpose of having thesethe within proceedings and this
or any other Orders made in the within proceedings recognized in a jurisdiction outside Canada.
THIS COURT ORDERS that the PlaintiffApplicant, the Receiver and their respective31.
counsel are at liberty to serve or distribute this Order, any other materials and orders as may be
reasonably required in these proceedings, including any notices, or other correspondence, by
- 14 -
forwarding true copies thereof by electronic message to the Debtor’s creditors or other interested
parties and their advisors. For greater certainty, any such distribution or service shall be deemed
to be in satisfaction of a legal or juridical obligation, and notice requirements within the meaning
of clause 3(c) of the Electronic Commerce Protection Regulations, Reg. 81000-2-175
(SOR/DORS).
THIS COURT ORDERS that the Applicant shall have its costs of this32.
motionApplication, up to and including entry and service of this Order, provided for by the terms
of the PlaintiffApplicant’s security or, if not so provided by the Plaintiff'Applicant’s security,
then on a substantial indemnity basis to be paid by the Receiver from the Debtor'’s estate with
such priority and at such time as this Court may determine.
32. THIS COURT ORDERS that any interested party may apply to this Court to vary or33.
amend this Order on not less than seven (7) days'’ notice to the Receiver and to any other party
likely to be affected by the order sought or upon such other notice, if any, as this Court may
order.
________________________________________
DOCSTOR: 1771742\8
DOCSTOR-#1771742-v8-Model_Receivership_Order_(T__Reyes).docDOCSTOR: 1771742\9DOCSTOR: 1771742\9
SCHEDULE "“A"”
RECEIVER CERTIFICATE
CERTIFICATE NO. ______________
AMOUNT $______ _______________
THIS IS TO CERTIFY that [RECEIVER'S NAME]BDO Canada Limited, the receiver1.
(the "“Receiver"”) of the assets, undertakings and properties [DEBTOR'S NAME] acquired for,
or used in relation to a business carried on by the of AVG (OEAM) Inc. (the “Debtor”),
including all proceeds thereof (collectively, the “Property”) appointed by Order of the Ontario
Superior Court of Justice (Commercial List) (the "“Court"”) dated the ___21st day of ______,
20__February, 2020 (the "“Order"”) made in an action having Court file number
__-CL-_______CV-20-00636359-00CL, has received as such Receiver from the holder of this
certificate (the "“Lender"”) the principal sum of $_______________, being part of the total
principal sum of $_________________ which the Receiver is authorized to borrow under and
pursuant to the Order.
The principal sum evidenced by this certificate is payable on demand by the Lender with2.
interest thereon calculated and compounded [daily][monthly not in advance on the _______ day
of each month] after the date hereof at a notional rate per annum equal to the rate of ______ per
cent above the prime commercial lending rate of Bank of _______________ from time to time.
Such principal sum with interest thereon is, by the terms of the Order, together with the3.
principal sums and interest thereon of all other certificates issued by the Receiver pursuant to the
Order or to any further order of the Court, a charge upon the whole of the Property, in priority to
the security interests of any other person, but subject to the priority of the charges set out in the
Order and in the Bankruptcy and Insolvency Act, and the right of the Receiver to indemnify itself
out of such Property in respect of its remuneration and expenses.
All sums payable in respect of principal and interest under this certificate are payable at4.
the main office of the Lender at Toronto, Ontario.
- 16 -
Until all liability in respect of this certificate has been terminated, no certificates creating5.
charges ranking or purporting to rank in priority to this certificate shall be issued by the Receiver
to any person other than the holder of this certificate without the prior written consent of the
holder of this certificate.
The charge securing this certificate shall operate so as to permit the Receiver to deal with6.
the Property as authorized by the Order and as authorized by any further or other order of the
Court.
The Receiver does not undertake, and it is not under any personal liability, to pay any sum7.
in respect of which it may issue certificates under the terms of the Order.
DATED the _____ day of _________________, 20__.2020.
[RECEIVER'S NAME]BDO CANADALIMITED, solely in its capacity as Receiver of thePropertyAVG (OEAM) Inc., and not in itscorporate or personal capacity
Per:
Name:
DOCSTOR-#1771742-v8-Model_Receivership_Order_(T__Reyes).doc
Title:
38544586.1
ROYAL BANK OF CANADA
Applicant
and AVG (OEAM) INC.
Respondent
Court File No. CV-20-00636359-00CL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LISTPROCEEDING COMMENCED AT TORONTO
RECEIVERSHIP ORDER
AIRD & BERLIS LLPBarristers and Solicitors
Brookfield PlaceSuite 1800, 181 Bay Street
Toronto, ON M5J 2T9 Tel: 416.863.1500 Fax: 416.865.1515
Sanjeev P.R. Mitra (LSO # 37934U)Email: [email protected]
Sam Babe (LSO # 49498B)Email: [email protected]
Lawyers for Royal Bank of Canada38902589.2
Document comparison by Workshare Compare on February-14-20 11:44:12 AM
Input:
Document 1 ID interwovenSite://AB-WS1/CM/38544586/1
Description #38544586v1<CM> - Model receivership-order-EN (2)
Document 2 ID interwovenSite://AB-WS1/CM/38902589/2
Description#38902589v2<CM> - Receivership Order - AVG (OEAM)Inc.
Rendering set Standard
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TAB 3
Court File No. CV-20-00636359-00CL
ONTARIO SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
BETWEEN:
ROYAL BANK OF CANADA
Applicant
and
AVG (OEAM) INC.
Respondent
APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3, AS AMENDED AND SECTION 101 OF THE
COURTS OF JUSTICE ACT, R.S.O. 1990, c. C.43, AS AMENDED
AFFIDAVIT OF WAJAHAT MAHMOOD (sworn February 13, 2020)
I, WAJAHAT MAHMOOD, of the City of Oakville, in the Province of Ontario, MAKE
OATH AND SAY AS FOLLOWS:
1. I am a Senior Manager in the Special Loans & Advisory Services Department (the “Special
Loans Group”) of Royal Bank of Canada (“RBC”). RBC is the secured lender to AVG (OEAM)
Inc. (the “Debtor”), and I am responsible for management of the Debtor’s accounts and credit
facilities with RBC. As such, I have personal knowledge of the matters to which I hereinafter
depose. Where I do not have personal knowledge of the matters set out herein, I have stated the
source of my information and, in all such cases, believe it to be true.
2
NATURE OF APPLICATION AND RELIEF SOUGHT
2. This Affidavit is sworn in support of an application by RBC for an Order pursuant to
subsection 243(1) of the Bankruptcy and Insolvency Act (the “BIA”) and section 101 of the
Courts of Justice Act appointing BDO Canada Limited (“BDO”) as receiver (in such capacity,
the “Receiver”), without security, over all of the assets, undertakings and properties of the
Debtor.
BACKGROUND TO THE DEBTOR
3. The Debtor operates a business providing design, engineering, development and delivery
of OEM automotive accessories throughout North America, including to the Ontario market (the
“Business”). A printout from the Debtor’s website, avgautomotivegroup.com, describing the
Debtor and the Business is attached as Exhibit “A” to this Affidavit.
4. The Debtor was incorporated pursuant to the Ontario Business Corporations Act (the
“OBCA”) on February 2, 2000. A corporation profile report for the Debtor obtained from the
Ontario Ministry of Government Services (the “Ministry”) is attached as Exhibit “B” to this
Affidavit. This report indicates that Karim Suleman (“Suleman”) and Ayaz Somani (“Somani”)
are the Debtor’s sole directors and officers.
5. Based on the corporation profile report described above the Debtor has its registered
office and location of operations at 605 Middlefield Drive, Scarborough, Ontario. I understand
that the Debtor has been operating from this location pursuant to a lease. I also understand that
the Debtor has a second location at 5133 Eastside Parkway, Gas City, Indiana.
3
RBC’S LOANS AND SECURITY
6. RBC, the Debtor and each of 1598320 Ontario Inc., AVG (OEM) Inc. and National
Automotive Customizers Inc., as corporate guarantors (collectively, the “Corporate
Guarantors”), and Suleman and Somani, as personal guarantors (collectively, the “Personal
Guarantors” and, together with the Corporate Guarantors, the “Guarantors”), are parties to a
letter credit agreement dated September 13, 2017, as amended by letter agreements dated
February 14, 2018 and June 22, 2018 (collectively, the “Credit Agreement”). A copy of the
Credit Agreement, including its amendments, is attached as Exhibit “C” to this Affidavit.
7. Pursuant to the Credit Agreement and agreements ancillary thereto, RBC has provided
the Debtor with:
(a) a demand operating facility, in the maximum principal amount of $2,250,000
(“Facility 1”);
(b) a non-revolving term facility in the maximum principal amount of $7,500,000
(“Facility 3”); and
(c) a VISA Business facility in the maximum amount of $100,000, available in both
Canadian currency and United States currency.
(collectively, the “Credit Facilities”).
8. As security for its obligations to RBC, the Debtor provided, among other things:
(a) a General Security Agreement dated September 18, 2014, granting to RBC a
security interest in all of the Debtor’s assets, property and undertaking (the
“Debtor GSA”), a copy of which Debtor GSA is attached as Exhibit “D” to this
4
Affidavit and Registration in respect of which Debtor GSA was made pursuant to
the Personal Property Security Act (Ontario) (the “PPSA”) on September 9,
2014, under Reference File No. 699661215 and Registration No. 20140909 1558
1862 0266, covering “Inventory”, “Equipment”, “Accounts”, “Other” and
“Motor Vehicle”, as amended and renewed from time to time;
(b) a Security Agreement (Accounts Receivable) dated September 18, 2014, granting
to RBC a security interest in all present and after-acquired accounts receivable of
the Debtor (the “Debtor ARSA”), a copy of which Debtor ARSA is attached as
Exhibit “E” to this Affidavit; and
(c) a Security Agreement (Inventory) dated September 18, 2014, granting to RBC a
security interest in all present and after-acquired inventory of the Debtor (the
“Debtor ISA”), a copy of which 2014 Debtor ISA is attached as Exhibit “F” to
this Affidavit,
(collectively, the “Security”).
9. As at February 13, 2020, the Debtor was indebted to RBC for the following amounts
pursuant to the Credit Facilities and otherwise, excluding bank and professional fees and any
unposted transaction or chargeback amounts on the VISA facility:
Facility 1 Principal
Accrued Interest Interest accrues at the default variable rate of interest of Royal Bank Prime +5% per annum
$2,011,362.37
$41,304.02
5
Facility 3 Principal
Accrued Interest Interest accrues at the default variable rate of interest of Royal Bank Prime +5% per annum
$7,500,000.00
$163,972.60
RBC Business VISA Converted to Term Loan Principal
Accrued InterestInterest accrues at the rate specified in the VISA agreement
$78,752.42
$4,011.13
Total: $9,799,402.54
THE DEBTOR’S OTHER SECURED CREDITORS
10. A copy of the certified PPSA search results for the Debtor is attached as Exhibit “G” to
this Affidavit.
11. Other than registrations made in respect of the Debtor Security, the PPSA search results
for the Debtor reveal:
(a) the following registrations made prior to the registration in respect of the Debtor
GSA:
(i) a registration in favour of Somani, apparently in respect of a general
security interest, with a financing change statement registered to reflect a
subordination to the registration in respect of the Debtor GSA, pursuant to
a Subordination and Standstill Agreement dated September 17, 2014 (the
“Somani Subordination”), a copy of which Somani Subordination is
attached as Exhibit “H” to this Affidavit;
6
(ii) two registrations in favour of BDC Capital Inc. (“BDC”), in respect of
general security interests, which BDC security interests are subordinated
and postponed to that of RBC in all collateral save for equipment and life
insurance policies pursuant to a Priority Agreement dated September 14,
2014 among BDC, RBC, the Debtor and the Corporate Guarantors (the
“BDC Priority Agreeemnt”), a copy of which BDC Priority Agreement
is attached as Exhibit “I” to this Affidavit; and
(iii) a registration in favour of RCAP Leasing Inc. (“RCAP”), which RCAP
confirmed, in an estoppel letter dated September 10, 2014 a copy of which
is attached as Exhibit “J” to this Affidavit, is limited to the specific
equipment set out in the general collateral description; and
(b) the following registrations made subsequent to the registration in respect of the
Debtor GSA:
(i) a registration in favour of 1028312 B.C. Ltd. (“102 BC”) in respect of a
general security interest, which 102 BC security interest is subject to a
Priority Agreement dated September 11, 2015 between 102 BC and RBC
(the “102 BC Priority Agreement”), a copy of which 102 BC Priority
Agreement is attached as Exhibit “K” to this Affidavit;
(ii) a registration in favour of The Bank of Nova Scotia apparently in respect
of a specific vehicle; and
7
(iii) a registration in favour of Toyota Credit Canada Inc. (“Toyota”), which
Toyota confirmed, in an estoppel letter dated September 10, 2014 a copy
of which is attached as Exhibit “L” to this Affidavit, is limited to the
specific vehicle set out in the general collateral description.
FINANCIAL DIFFICULTIES AND DEFAULT
12. The Credit Facilities came under the supervision of RBC’s Special Loans and Advisory
Group in early 2019. Multiple events of default under the Credit Agreement had occurred
including the failure of the Debtor to make required payments under Facility 3 and numerous
breaches of reporting obligations. These events of default were set out in a January 18, 2019
breach letter from RBC to the Debtor, a copy of which is attached as Exhibit “M” to this
Affidavit.
13. As required by the Credit Agreement, Export Development Canada (“EDC”) had
guaranteed the obligations of the Debtor to RBC under Facility 3. Due to the defaults by the
Debtor in connection with Facility 3, EDC terminated its guarantee of this facility resulting in a
loss of a portion of RBC’s security. This loss of the EDC guarantee was an additional event of
default under the Credit Agreement.
14. As a result of the above events of default, on February 20, 2019, RBC’s lawyers issued,
on RBC’s behalf, formal demand on the Debtor accompanied by a Notice of Intention to Enforce
Security pursuant to section 244 of the BIA (the “First Demand” and the “First BIA Notice”,
respectively). Copies of the First Demand and the First BIA Notice are collectively attached as
Exhibit “N” to this Affidavit. Demands were also made on the Guarantors at the same time,
8
accompanied, in the case of the Corporate Guarantors, by Notices of Intention to Enforce
Security pursuant to section 244 of the BIA.
15. In response to the First Demand and the First BIA Notice, the Debtor and its principals
requested time to develop a plan to replace the lost EDC guarantee with supplementary security.
Pursuant to a standstill letter agreement dated April 9, 2019 and accepted by the Debtor and the
Personal Guarantors on April 12, 2019 (the “Standstill Agreement”), RBC agreed to refrain
from exercising its enforcement rights and remedies under, inter alia, the Credit Agreement, the
Security, the PPSA, and the BIA until July 31, 2019 (the “Standstill Period”), on a number of
conditions, including, but not limited to, the following:
(a) the Debtor was to deliver to RBC its plan outlining supplementary collateral
satisfactory to RBC by no later than April 18, 2019;
(b) the Debtor was to deliver to RBC documentation satisfactory to RBC to grant a
first charge in the additional security on or before May 30, 2019 (the “Additional
Security”); and
(c) the Debtor was to provide to RBC year-end financial statements for fiscal 2019
(the “2019 Financial Statements”), prepared by its accountants, on or before
June 30, 2019 and honour all reporting requirements.
A copy of the Standstill Agreement is attached as Exhibit “O” to this Affidavit.
16. The Debtor failed to provide the Additional Security and the 2019 Financial Statements
as required by the Standstill Agreement. Such failures on the part of the Debtor constituted
“Intervening Events” under the Standstill Agreement, causing the Standstill Period to come to an
9
immediate end. By letter dated June 20, 2019 (the “June 20th Letter”), RBC advised the Debtor
that an Intervening Event had occurred under the Standstill Agreement, permitting RBC to take
immediate enforcement steps. Nevertheless, RBC gave the Debtor until June 24 to cure the
Intervening Event. A copy of the June 20th Letter is attached as Exhibit “P” to this Affidavit.
17. When the Debtor failed to cure the Intervening Events under the Standstill Agreement,
counsel to RBC issued a new demand on the Debtor on July 2, 2020, accompanied by a new
Notice of Intention to Enforce Security pursuant to subsection 244(1) of the BIA (the “Second
Demand” and the “Second BIA Notice”, respectively). Copies of the Second Demand and the
Second BIA Notice are, collectively, attached as Exhibit “Q” to this Affidavit. New demands
were also made on the Guarantors, accompanied, in the case of the Corporate Guarantors, by
Notices of Intention to Enforce Security pursuant to section 244 of the BIA.
18. On July 15, 2019, RBC had a statement of claim issued in an action on the covenants of
the Debtor and the Guarantors under the Credit Agreement and their respective guarantees
(Court File No CV-19-00623757-0000) (the “Action on the Covenants”), a copy of which
statement of claim is attached as Exhibit “R” to this Affidavit.
19. Following the delivery of the Second Demand and the Second BIA Notice, the Debtor
and Guarantors sought to negotiate additional time to obtain alternate financing from National
Bank of Canada to indefeasibly and fully repay amounts owed to RBC under the Credit
Agreement.
20. On or around August 30, 2019, RBC, the Debtor and the Guarantors entered into a
Forbearance Agreement (the “Forbearance Agreement”) pursuant to which RBC agreed to
forbear from exercising its rights to enforcement until the earlier of January 31, 2020 and the
10
occurrence of an Intervening Event, as such term is defined in the Forbearance Agreement (the
“Forbearance Period”). A copy of the Forbearance Agreement is attached as Exhibit “S” to
this Affidavit.
21. In connection with the Forbearance Agreement, each of the Debtor and the Corporate
Guarantors executed a consent to the appointment of a receiver (collectively, the “Consents to
Receiver”), which Consents to Receiver, under the terms of the Forbearance Agreement, RBC
could use upon the occurrence of an Intervening Event and termination of the Forbearance
Period. Copies of the Consents to Receiver are attached as Exhibit “T” to this Affidavit.
22. Also in connection with the Forbearance Agreement, Somani, in his capacity as executor
of the estate of his late wife, Naseem (the “Somani Estate”), caused the Somani Estate to grant a
guarantee of the obligations of the Debtor to RBC and to grant certain security in support of such
guarantee.
23. On September 20, 2019, the Debtor provided RBC with revised financial reporting for
the period ending July 31, 2019. The revised reporting indicated that the available credit under
the Facility 1 was much lower than the Debtor had claimed for the same period based on the
margin formula in the Credit Agreement. The revised reporting showed that outstanding
borrowings under Facility 1 exceeded the available credit by $963,117.15. The Debtor was
unable to provide a proposal to bring its borrowings back under the available limit.
24. On September 25, 2019, the Debtor advised RBC that National Bank was not prepared to
provide alternate financing to the Debtor at that time. The Debtor admitted to RBC that it would
not be able to meet the terms of the Forbearance Agreement and sought an extension of the
Forbearance Period.
11
25. In order to consider the requested extension, RBC required a third party consultant to
review the financial situation and ongoing viability of the Debtor. The Debtor consented to the
engagement of BDO who reviewed the affairs of the Debtor and prepared a report dated October
3, 2019 (“BDO Report”). Attached hereto as Exhibit “U” is a copy of the BDO Report.
26. The BDO Report disclosed that:
(a) $5,076,940.02 or approximately 85% of the Debtor’s $5,947,311.96 listed
accounts receivable were fabricated;
(b) certain accounts receivable of the Debtor were uncollectable;
(c) potentially collectable Canadian accounts receivable only amounted to $535,100
as at October 3, 2019;
(d) potentially collectable Canadian and U.S. accounts receivable only amounted to
$755,000 as at October 3, 2019;
(e) as at August 31, 2019, the total net book value of combined inventory in Canada
and the U. S was only $1,900,000, or approximately 18% of the $10,334,546 that
the Debtor had reported;
(f) $7,828,291 of the recorded inventory were actually losses which had been
accrued to inventory in the Debtor’s books to avoid the loss showing up in
financial statements; and
12
(g) current assets of inventory and accounts receivable as at August 31, 2019 totalled
$2.8 million at book value whereas the accounts payable were $4.6 million at a
time when the operating line stood at $2.25 million.
27. On October 16, 2019, RBC delivered notice by letter to the Debtor that the Forbearance
Period had been terminated. Attached hereto as Exhibit “V” is a copy of the October 16, 2019
letter.
28. On October 28, 2019, RBC, through its counsel, made formal demand for repayment of
amounts owed by the Somani Estate and gave formal notice of its intention to enforce the
security granted by the Somani Estate.
29. RBC obtained judgment in the Action on the Covenants on November 8, 2019, a copy of
which judgment is attached as Exhibit “W” to this Affidavit.
30. Also on November 8, 2019, RBC had an Application for Bankruptcy Order in respect of
the Debtor issued (the “Bankruptcy Application”), a copy of which Bankruptcy Application is
attached as Exhibit “X” to this Affidavit. A motion was subsequently filed to replace the
proposed trustee with BDO.
31. The Debtor served a Notice of Dispute to the Bankruptcy Application on December 13,
2019 and a trial has been set for April 1 and 2, 2020. A copy of the Debtor’s Notice of Dispute
is attached as Exhibit “Y” to this Affidavit.
32. On December 13, 2019, RBC obtained an Order appointing Deloitte Restructuring Inc. as
receiver over certain securities accounts and real property of the Somani Estate, a copy of which
Order is attached as Exhibit “Z” to this Affidavit.
13
33. RBC understands that the Debtor continues to operate, however, there have been no
deposits in its operating account. It is unclear how the Debtor is dealing with the proceeds of
RBC’s collateral.
34. On November 26, 2019, RBC received from BDC’s lawyers a notice of intention to
dispose of collateral pursuant to subsection 63(4) of the PPSA, dated November 22, 2019, in
respect of the collateral subject to BDC’s general security interest (the “BDC PPSA Notice”), a
copy of which BDC PPSA Notice is attached as Exhibit “AA” to this Affidavit. RBC
understands that BDC’s lawyers also sent the Debtor a demand and a notice of intention to
enforce pursuant to section 244 of the BIA. The taking of these initial steps to enforcement by
BDC constitute an additional event of default under the Credit Agreement.
APPOINTMENT OF A RECEIVER
35. As of the time of swearing this Affidavit, the Debtor has failed to make payment in
accordance with the Second Demand or make alternative arrangements acceptable to RBC. As
evidenced by the Bankruptcy and Insolvency Record Search results for the Debtor attached as
Exhibit “BB” to this Affidavit, the Debtor also has not filed a proposal or a notice of intention to
file a proposal pursuant to the BIA.
36. Multiple events of default have occurred and are continuing. Despite being afforded
ample opportunity, the Debtor has failed to honour its obligations to RBC under the Credit
Agreement.
37. Pursuant to the Security, RBC has the right, upon an event of default, to appoint a
receiver over the Debtor.
14
38. The Debtor is insolvent and have failed to fulfill all their obligations to, without
limitation, RBC and BDC.
39. The appointment of the Receiver is therefore needed to preserve, protect and sell or
otherwise realize upon the Debtor’s assets, and to secure the receipts therefore.
40. The Debtor has consented to the appointment of a receiver.
41. RBC has, at all times, acted in good faith towards the Debtor but, for the above reasons,
RBC now feels that it is both just and equitable that the Receiver be appointed to preserve and
protect the interests of RBC and other creditors in the assets of the Debtor.
42. BDO is a licenced trustee in bankruptcy and has consented to act as Receiver should the
Court so appoint it.
43. This Affidavit is made in support of the within application, and for no other or improper
purpose whatsoever.
SWORN before me at the Cljiy of Toronto, in the ProyineCbT0ntario, this 13th day of Pbbruaryfl020
Commissioner for taking affidavits, etc. S/v-n ^
TAB 3(a)
•ai-s-gisnce.-
-0 AVG At A Glance-AVG-Group X +
4- O ® Notsscure i avgau1cnotivsgrQup.com •• -i-,
A.VG Group, headquartered in Toronto, Canada, is a fast-growing group of companies that focuses on the design, engineering, development and delivery of genuine OEM automotive accessories to global car OEfvIs.
Vision Statement
innovation. Passion, Fulfillment: these axioms define AVG Group.
They inform and inspire our delivery of seeding vehicle accessory solutions:
» In multiple product categories spanning:
o lighting
- styling improvements
» and mechatronlcs
« At multiple customization points in the automotive value chain from factory to pert, distrbutcr and dealer « Through multiple fulfillment formats, ranging from p'oduct-oniy to product-pius-insiailation combinations
These axioms have powered our growth at the best car OEMs in the world, supplying them accessor/ soluc'ons of uncompromising quality and trend-leading innovation.
Learn more aocut our products hem.
InnovationProactively presenting new products to our customers
TAB 3(b)
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TAB 3(c)
Royal Bank of Canada Commercial Financial Services
111 Grangeway Avenue - 2nd Floor Scarborough, Ontario M1H 3E9
September 13, 2017
Private and Confidential
AVG (OEAM) INC.Unit 1605 Middlefield Road Scarborough, Ontario M1V5B9
ROYAL BANK OF CANADA (the “Bank”) hereby confirms the credit facilities described below (the “Credit Facilities”) subject to the terms and conditions set forth beiow and In the attached Terms & Conditions and Schedules (collectively the "Agreement”). Upon satisfaction of the conditions set forth in the Conditions Precedent section, the Conditions Precedent Facility #1 section and the Conditions Precedent Facility #3 section herein, as determined by the Bank In Its sole discretion, this Agreement amends and restates without novation the existing agreement dated September 15, 2015 and any amendments thereto, Any amount owing by the Borrower to the Bank under such previous agreement Is deemed to be a Borrowing under this Agreement, Any and all security that has been delivered to the Bank and is set forth as Security below, shall remain in full force and effect, is expressly reserved by the Bank and, unless expressly Indicated otherwise, shall apply In respect of all obligations of the Borrower under the Credit Facilities. Unless otherwise provided, all dollar amounts are In Canadian currency.
The Bank reserves all of its rights and remedies at any time and from time to time in connection with any or ali breaches, defaults or Events of Default now existing or hereafter arising under this Agreement or any other agreement delivered to the Bank, and v/hether known or unknown, and this Agreement shall not be construed as a waiver of any such breach, default or Event of Default,
BORROWER: AVG (OEAM) Inc. (the "Borrower”)
CREDIT FACILITIESThe aggregate of Facility #2 and Facility #3 shall not exceed $7,500,000.00 at any time.
Facility #1: $ 2,250,000.00 revolving demand facility by way of:
a) RBP based loans (“RBP Loans”)
Revolve In increments of: $5,000.00 Minimum retained balance: $0.00Revolved by: Bank Interest rate (per annum): RBP + 1.75%
b) RBUSBR based loans in US currency (“RBUSBR Loans”)
Revolve in increments of: $5,000.00 Minimum retained balance: $0.00Revolved by: Bank Interest rate (per annum); RBUSBR+ 1.75%
® Registered Trademark of Royal Bank of Canada
SRF # S'M 1GS 57.1 Page 1 of 10
AVG (OEAM) Inc. September 13, 2017
c) Letters of Guarantee In Canadian currency or US currency (‘‘LGs")
Fees to be advised on a transaction-by-transactlon basis. Fees and drawings to be charged to Borrower's accounts, Minimum fee of $100,00 In the currency of issue. ______________
AVAILABILITYBorrowings under this facility shall be used for the purpose of financing day to day operations and current assets.
The Borrower may borrow, convert, repay and reborrow up to the amount of this facility provided this facility is made available at the sole discretion of the Bank and the Bank may cancel or restrict the availability of any unutilized portion at any time and from time to time without notice.
Borrowings outstanding under this facility must not exceed at any time the aggregate of the following, less Potential Prior-Ranking Claims of the Borrower, AVG (OEM) Inc, and National Automotive Customizers Inc. (the ‘‘Borrowing Limit"):
a) 75% of Good Canadian/US Accounts Receivable; andb) to a maximum of $1,400,000.00, 40% of the lesser of cost or net realizable value of
Unencurnbered Inventory.
REPAYMENTNotwithstanding compliance with the covenants and all other terms and conditions of this Agreement, and regardless of the maturities of any outstanding instruments or contracts, Borrowings under this facility are repayable on demand.
GENERAL ACCOUNTThe Borrower shall establish current accounts with the Bank In each of Canadian currency and US currency (each a "General Account") for the conduct of the Borrower's day-to-day banking business, The Borrower authorizes the Bank daily or otherwise as and when determined by the Bank, to ascertain the balance of each General Account and:a) if such position Is a debit balance the Bank may, subject to the revolving increment amount
and minimum retained balance specified In this Agreement, make available a Borrowing by way of RBP Loans, or RBUSBR Loans as applicable, under this facility; and
b) If such position is a credit balance, where the facility is indicated to be Bank revolved, the Bank may, subject to the revolving Increment amount and minimum retained balance specified in this Agreement, apply the amount of such credit balance or any part as a repayment of any Borrowings outstanding byway of RBP Loans, or RBUSBR Loans as applicable, under this facility.
Facility #2; $4,000,000.00 non-revolving term facility fully drawn by way of:
a) RBP Loans Interest rate (per annum) RBP-t-1.75%
REPAYMENTBorrowings under this facility shall be repayable in full the earlier of (!) receipt of proceeds from initial Borrowing under Facility #3 and (ii) September 30, 2017.
Facility #3: $7,500,000.00 non-revolving term facility by way of:
a) RBP Loans Interest rate (per annum) RBP+ 1.75%
AVAILABILITYBorrowings under this facility shall be used to finance Eligible Pre-Shipment Costs in connection with the Nissan - Toyota Export Contract.
Page 2 of 10
AVG (OEAM) Inc. September 13, 2017
The Borrower may borrow up to the amount of this term facility provided this facility is made available at the sole discretion of the Bank and the Bank may Cancel or restrict availability of any unutilized portion of this facility at any time from time to lime without notice.
Proceeds of the Initial Borrowing under this facility must be utilized to repay in full all Borrowings under Facility #2 and Facility #2 is immediately then cancelled.
REPAYMENTBorrowings under this facility shall be repayable in full on September 30,2018.
In addition, the Borrower agrees that the Borrower shall prepay Borrowings under this facility in amount(s) equal to any advance or partial repayment received by the Borrower on account of the Nissan-Toyota Export Contract, and shall make such prepayment promptly upon receipt of such amount(s),
OTHER FACILITIESThe Credit Facilities are In addition to the following facilities (the “Other Facilities"). The Other Facilities will be governed by this Agreement and separate agreements between the Borrower and the Bank. In the event of a conflict between this Agreement and any such separate agreement, the terms of the separate agreement will govern,
a) VISA Business to a maximum amount of $100,000,00 available in Canadian currency and US currency; and
b) All Foreign Exchange Forward Contracts outstanding at any time and from time to time.
FEESOne Time Fee:Payable upon acceptance of this Agreement or as agreed upon between the Borrower and the Bank.
Review Fee: $3,500.00 Management Fee: $350.00
Other Fees*Fee for Facility #1 and Facility #3:The Borrower authorizes and directs the Bank to collect the fee(s) specified as the EDO Guarantee Fee In the EDC Guarantee Approval and pay EDC for their coverage under their Export Guarantee Program.
Renewal Fee:If the Bank renews or extends any term facility or term loan beyond its Maturity Date, an additional renewal fee may be payable in connection with any such renewal in such amount as the Bank may determine and notify the Borrower.
SECURITYSecurity for the Borrowings and all other obligations of the Borrower to the Bank, shall Include:
a) General security agreement op the Bank's form 924 signed by the Borrower constituting a first ranking security interest in all personal property of the Borrower;
b) Guarantee and postponement of claim on the Bank's form 812 in the amount of $1,000,000.00 signed by Ayaz Somani;
c) Guarantee and postponement of claim on the Bank's form 812 in the amount of $1,000,000,00 signed by Karim Suleman;
d) Postponement and assignment of claim on the Bank's form 918 signed by Ayaz Somani;Page 3 of 10
Monthly Fee:Payable in arrears on the same day of each month.
AVG (OEAM) Inc. September 13, 2017
e) Postponement and assignment of claim on the Bank's form 918 signed by Karim Suleman;
f) Postponement and assignment of claim on the Bank's form 918 signed by 1598320 Ontario Inc.;
g) Postponement and assignment of claim on the Bank's form 918 signed by Ayaz Somani in respect of the liabilities of AVG (OEM) Inc.;
h) Postponement and assignment of claim on the Bank’s form 918 signed by Karim Suleman in respect of the liabilities of AVG (OEM) Inc.;
I) Postponement and assignment of claim on the Bank's form 918 signed by 1598320 Ontario Inc,, in respect of the liabilities of AVG (OEM) Inc.;
j) Postponement and assignment of claim on the Bank's form 918 signed by Ayaz Somani in respect of the liabilities of National Automotive Customizers Inc.;
k) Postponement and assignment of claim on the Bank’s form 918 signed by Karim Suleman in respect of the liabilities of National Automotive Customizers Inc.;
l) Postponement and assignment of claim on the Bank's form 918 signed by Ayaz Somani in respect of the liabilities of 1598320 Ontario Inc,;
m) Postponement and assignment of claim on the Bank's form 918 signed by Karim Suleman in fespebt Of the liabilities of 1598320 Ontario Inc.;
n) Postponement and assignment of claim on the Bank's form 918 signed by National Automotive Customizers Inc., in respect of (he liabilities of 1598320 Ontario Inc,;
o) Priority agreement signed by the Bank, the Borrower, EDO and Business Development Bank of Canada;
p) Priority agreement signed by the Bank/the Borrower and 1028312 BC Ltd.; and
q) Certificate of insurance evidencing fire and other perils coverage on the assets of the Borrower, showing the Bank as first loss payee;
Security for the Borrowings under Facility ffl (collectively, the "Facility ffl Security”) shall, Include;
r) EDC Guarantee Approval confirming EDC’s guarantee of 28,55% of the aggregate Borrowings outstanding Under Facility #1;
s) Security agreement (accounts receivable) on the Bank's form 925 signed by the Borrower constituting a first ranking security interest in all accounts receivable of the Borrower relating to or arising out of the working capital for which the Bank has provided financing under Facility #1;
t) Security agreement (inventory) on the Bank's form 926 signed by the Borrower constituting a first ranking security Interest In all inventory of the Borrower relating to or arising outbf the working capital for which the Bank has provided financing under Facility #1;
u) Guarantee and postponement of claim op the Bank's form 812 in the amount of $3,250,000.00 signed by 1598320 Ontario lnc„ support by:
i, a general security agreement on the Bank's form 924 constituting a first ranking security interest in all personal property of 1598320 Ontario Inc.;
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AVG (OEAM) Inc, September 13, 2017
II. a security agreement (accounts receivable) on the Bank’s form 925 constituting a first ranking security interest in all accounts receivable of 1598320 Ontario Inc,;
ill. a security agreement (Inventory) on the Bank's form 926 constituting a first ranking security Interest In all inventory of 1598320 Ontario Inc.;
v) Guarantee and postponement of claim on the Bank's form 812 in the amount of $3,250,000.00 signed by National Automotive Customizers lnc„ supported by:
I. a general security agreement on the Bank's form 924 constituting a first ranking security interest in all personal property of National Automotive Customizers Inc.;
ii. a security agreement (accounts receivable) on the Bank’s form 925 constituting a first ranking Interest In all accounts receivable of National Automotive Customizers Inc.;
III. a security agreement (Inventory) on the Bank's form 926 constituting a first ranking security interest in all Inventory of National Automotive Customizers Inc.;
w) Guarantee and postponement of claim on the Bank's form 812 in the amount of $3,250,000.00 signed by AVG (OEM) Inc., supported by:
i, a general security agreement on the Bank's form 924 constituting a first ranking security Interest in all personal property of AVG (OEM) Inc,;
II. security agreement (accounts receivable) on the Bank’s form 925 constituting a first ranking security interest in all accounts receivable of AVG (OEM) Inc.; and
ill. security agreement (inventory) on the Bank's form 926 constituting a first ranking security Interest in all Inventory of AVG (OEM) Inc.;
Security for the Borrowings under Facility #3 (collectively, the "Facility #3 Security”) shall Include:
x) EDO Guarantee Approval confirming EDO’s guarantee of 75% of the aggregate Borrowings outstanding under Facility #3;
y) Security agreement (accounts receivable) on the Bank's form 925 signed by the Borrower, constituting a first ranking security Interest In all accounts receivable of the Borrower owing by Nissan North America, Inc, relating to or arising out of the Nissan— Toyota Export Contract for which the Bank has provided financing under Facility #3;
z) Security agreement (inventory) on the Bank's form 926 signed by the Borrower constituting a first ranking security interest in all inventory of the Borrower owing by Nissan North America, Inc. relating to or arising out of the Nissan - Toyota Export Gontract for which the Bank has provided financing under Facility #3;
aa) Security agreement (accounts receivable) on the Bank's form 925 signed by the Borrower, constituting a first ranking security Interest In all accounts receivable of the Borrower owing byToyota Motor Sales, USA Inc, relating to or arising out of the Nissan - Toyota Export Contract for which the Bank has provided financing under Facility #3;
bb) Security agreement (inventory) on the Bank's form 926 signed by the Borrower constituting a first ranking security interest In all inventory of the Borrower owing byToyota Motor Sales, USA Inc. relating to or arising out of the Nissan - Toyota Export Contract for which the Bank has provided financing under Facility #3;
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AVG (OEAM)lnc. September 13, 2017
cc) Guarantee and postponement of claim on the Bank's form 812 in the amount of $1,875,000.00 signed byAyazSomanl;
dd) Guarantee and postponement of claim on the Bank’s form 812 In the amount of $1,875,000.00 signed by Karim Suleman;
ee) Guarantee and postponement of claim on the Bank's form 812 in the amount of$7,500,000.00 signed by 1598320 Ontario Inc., supported by a general security agreement constituting a first ranking security Interest in all personal property of 1598320 Ontario Inc,;
ff) Guarantee and postponement of claim on the Bank's form 812 in the amount of$7,500,000.00 signed by National Automotive Customizers Inc., supported by a general security agreement constituting a first ranking security interest in all personal property of National Automotive Customizers Inc.;
gg) Guarantee and postponement of claim on the Bank's form 812 in the amount of $7,500,000.00 signed by AVG (OEM) Inc., supported by a general security agreement constituting a first ranking security Interest in all personal property of AVG (OEM) Inc.
Collectively, the security set forth in paragraphs a) to gg) Inclusive above, is herein after referred to as the ‘‘Security".
FINANCIAL COVENANTSIn the event that the Borrower, AVG (OEM) Inc. or National Automotive Customizers Inc. changes accounting standards, accounting principles and/or the application of accounting principles during the term of this Agreement, all financial covenants shall be calculated using the accounting standards and principles applicable at the time this Agreement was entered Into.
Without affecting or limiting the right of the Bank to terminate or demand payment of, or cancel or restrict availability of any unutilized portion of any demand or other discretionary facility, the Borrower covenants and agrees with the Bank that the Borrower will:
a) maintain on a combined basis for the Borrower, AVG (OEM) Inc. and National Automotive Customizers lnc„ to be measured as at the end of each fiscal quarter:
I. a ratio oflotal Liabilities to Tangible Net Worth of not greater than 2.75:1,
b) maintain on a combined basis for the Borrower, AVG (OEM) Inc, and National Automotive Customizers Inc., to be measured as at the end of each fiscal year:
I. Debt Service Coverage of not less than 1.25; 1.
REPORTING REQUIREMENTSThe Borrower will provide the following to the Bank:
a) monthly Borrowing Limit Certificate, substantially in the form of Schedule “G” signed on behalf of the Borrower by any one of the Chief Executive Officer, tiie President, the Vice- President Finance, the Treasurer, the Comptroller, the Chief Accountant or any other employee of the Borrower holding equivalent office, within 30 days of each month end;
b) Compliance Certificate, substantially in the form of Schedule "H” signed by an authorized signing officer of the Borrower, within 45 days of each fiscal quarter end and within 120 days of each fiscal year end, certifying compliance with this Agreement Including the financial covenants set forth in the Agreement;
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AVG (OEAM) Inc. September 13, 2017
c) quarterly company prepared combined financial statements for the Borrower, AVG (OEM)Inc, and National Automotive Customizers lnc„ within 45 days of each fiscal quarter end;
d) annual review engagement financial statements for each of the Borrower, AVG (OEM) Inc. and National Automotive Customizers Inc., within 120 days of each fiscal year end;
e) annual notice to reader financial statements for 1598320 Ontario Inc., within 120 days of each fiscal year end;
f) annual unaudited accountant prepared combined financial statements for the Borrower, AVG (OEM) Inc. and National Automotive Customizers Inc., within 120 days of each fiscal year end;
g) annual combined forecasted balance sheet and income and cash flow statements for the Borrower, AVG (OEM) Inc, and National Automotive Gustomizers Inc., prepared on a quarterly basis for the next following fiscal year, within 120 days of each fiscal year end;
h) annual personal statement of affairs:for all Guarantors, who are individuals, within 120 days of the end of every fiscal year of the Borrower, commencing with the fiscal year ending in 2018; and
i) such other financial and operating statements and reports as and when the Bank may reasonably require.
CONDITIONS PRECEDENTIn no event Will the Credit Facilities or any part thereof be available unless the Bank has received:
a) a duly executed copy of this Agreement;b) the Security provided for herein, with the exception of the Facility /f1 Security and the; Facility
#3 Security, registered/as required, to the satisfaction of the Bank;c) such financial and other information or documents relating to the Borrower or any Guarantor
if applicable as the Bank may reasonably require; andd) such other authorizations, approvals, opinions and documentation as the Bank may
reasonably require.
Additionally;e) all documentation to be received by the Bank shall be in form and substance satisfactory to
the Bank.
CONDITIONS PRECEDENT FACILITY #1In addition to the conditions set forth in thei Conditions Precedent section above, the availability ofany Borrowing under Facility #1 Is conditional upon the receipt of:
a) the Facility #1 Security, registered as required to the satisfaction of the Bank.
CONDITIONS PRECEDENT FACILITY #3In addition to the conditions set forth In the Conditions Precedent section above, the availability of any Borrowing under Facility #3 is conditional upon the receipt of:
a) a Client Disclosure Consent, duly executed by the Borrower; andb) the Facility #3 Security, registered as required to the satisfaction of the Bank.
Additionally;c) no Borrowing under Facility #3 will be made available unless the Bank has received a
Drawdown Certificate and Report on Status of Contract or Purchase Order substantially in the form of Schedule "K"; and
d) all requests for a Borrowing under Facility #3 shall be made on not less than one (1)Business Day's notice to the Bank.
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AVG (OEAM) Inc. September 13, 2017
BUSINESS LOAN INSURANCE PLANThe Borrower hereby acknowledges that the Bank has offered It group creditor Insurance coverage on the Borrowings under the Business Loan Insurance Plan and the Borrower hereby acknowledges that it is the Borrower's responsibility to apply for any new or increased insurance amount for the Borrowings that may be eligible.
If the Borrower decides to apply for Insurance on the Borrowings, the application will be made via the Bank's Business Loan Insurance Plan application (form 3460 ENG or 53460 FRE). If the Borrower has existing uninsured Borrowings and decides not to apply for Business Loan Insurance Plan coverage on any new Borrowings, It hereby acknowledges that the Bank may accept the Borrower's signature below as the Borrower’s waiver of the Bank's offer to apply for Business Loan Insurance Plan coverage on all such Borrowings, and that all such Borrowings are not insured under the Policy as at the date of acceptance of this Agreement.
If the Borrower has Business Loan Insurance Plan coverage on previously approved Borrowings, such coverage will be applied automatically to ail new Borrowings eligible for Business Loan Insurance Plan coverage that share the same loan account number, up to the approved amount of Business Loan Insurance Plan coverage. This Agreement cannot be used to waive coverage on new Borrowings eligible for Business Loan Insurance Plan coverage If Business Loan Insurance Plan coverage is in effect on the Borrower’s existing Borrowings. If the Borrower does not want Business Loan Insurance Plan coverage to apply to any new Borrowings, a differenf loan account number will.need to.be set up and all uninsured loans attached to it.
If the Borrower has existing Borrowings to which Business Loan Insurance Plan coverage applies, and any new Borrowings would exceed the approved amount of Business Loan Insurance Plan coverage already |n place, the Borrower must apply for additional Business Loan Insurance Plan coverage (if eligible) in order for Business Loan Insurance Plan coverage to apply to any new Borrowings. If the Borrower decides not to apply for additional Business Loan Insurance Plan coverage in respect of any new Borrowings (if eligible), the Borrower hereby acknowledges that the Bank .may accept the Borrower's signature below as the Borrower's waiver of the Bank's offer to apply for additional Business Loan Insurance Plan coverage on such new Borrowings and that such new Borrowings are not Insured Under the Policy as at the date the Borrower executes this Agreement.
If there are any discrepancies between the insurance Information in Ihis Agreement and the Business Loan Insurance Plan documents regarding the Borrowings, the Business Loan Insurance Plan documents govern,
Business Loan Insurance Plan premiums (plus applicable taxes), will be taken as a separate payment, directly from the bank account associated with the loan, at the same frequency and schedule as your regular loan payments, where applicable. As premiums are based on the outstanding loan balance and the insured person's age at the time the premiums are due, the cost of Business Loan Insurance Plan coverage may increase during the term of the loan. The premium calculation is set out in the Business Loan insurance Plan terms and conditions provided to the Borrower at the time the application for Business Loan Insurance Plan coverage was completed. Refer to the terms and conditions (form 3460 ENG or 53460 FRE) for further explanation and disclosure,
GOVERNING LAW JURISDICTIONProvince of Ontario.
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AVG (OEAM) Inc. September 13, 2017
ACCEPTANCEThis Agreement Is open for acceptance until October 16, 2017, after which date it Will be null and void, unless extended in writing by the Bank.
ROYAL BANK OF CANADA
Per:____________Name: Mike CussenTitle: Vice President, Business Credit
tdb
We acknowledge and accept the terms and conditions of this Agreement on this ly- day of , 2017.
Name:Title:
I/We have the-authority to bind the Borrower
As Guarantor, we acknowledge and copfirm our agreement with the terms and conditions of this Agreement on this /flf day of , 2017,
1598320 ONTARIO INC.
Per:NameTitle:'
Uh SuLQMtP~Mtitai'KsT
Per:_________________________________Name:Title:
I/We have the authority to bind the Guarantor
Page 9 of 10
AVG (OEAM) Inc. September 13, 2017
As Guarantor, we acknowledge and confirmour agreement with the terms and conditions of this Agreement on this day of , 2017.
NATIONAL AUTOMOTIVE CUSTOMIZERS INC,
Per: _ Name: Title: f AkS /V
Per: __ Name: Title:
I/We'.have the authority to bind the Guarantor
As Guarantor, we acknowledge and confirm our aareement with the terms and conditions of this Agreement on this day of , 2017.
AVG (OEM) IjjlC,
Per:Name: KAf-tTi Title: C
Per: __ Name: Title:
I/We have the authority to bind the Guarantor
As Guarantor, Agreement on
acknowledge and confirm my agreement wllh IL dav of .6.^>U^.2017
AYAZ SOMANI
ie terms and conditions of this
As Guarantor, I acknowledge and cpnflmn rny agreement with the terms and conditions of this Agreement on this Ik day of , 201J,
\attachments:Terms and Conditions Schedules:. Definitions• Calculation and Payment of Interest and Fees• Additional Borrowing Conditions• Borrowing Limit Certificate• Compliance Certificate. RBC Covarity Dashboard Terms and Conditions• Drawdown Certificate and Report on Status of Contracts or Purchase Orders
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AVG (OEAM) Inc. September 13, 2017
TERMS AND CONDITIONS
The Bank is requested by the Borrower to make the Credit Facilities available to the Borrower in the manner and at the rates and times specified in this Agreement. Terms defined elsewhere in this Agreement and not otherwise defined in the Terms and Conditions below or the Schedules attached hereto have the meaning given to such terms as so defined. In consideration of the Bank making the Credit Facilities available, the Borrower agrees, and if the Borrower is comprised of more than one Person, such Persons jointly and severally agree, or in Quebec solidarily agree, with the Bank as follows;
REPAYMENTAmounts outstanding under the Credit Facilities, together with interest, shall become due In the manner and at the rates and times specified in this Agreement and shall be paid in the currency of the Borrowing. Unless the Bank otherwise agrees, any payment hereunder must be made in money which is legal tender at the time of payment, in the case of a demand facility of any kind, the Borrower shall repay all principal sums outstanding under such facility upon demand including, without limitation, an amount equal to the face amount of all LGs which are unmatured or unexpired, which amount shall be held by the Bank as security for the Borrower's obligations to the Bank in respect of such Borrowings. Where any Borrowings are repayable by scheduled blended payments, such payments shall be applied, firstly, to interest due, and the balance, if any, shall be applied to principal outstanding. If any such payment is insufficient to pay all interest then due, the unpaid balance of such interest will be added to such Borrowing, will bear interest at the same rate, and will be payable on demand or on the date specified herein, as the case may be, Borrowings repayable by way of scheduled payments of principal and interest shall be so repaid with any balance of such Borrowings being due and payable as and when specified in this Agreement. The Borrower shall ensure that the maturities of instruments or contracts selected by the Borrower when making Borrowings will be such so as to enable the Borrower to meet its repayment obligations. For any Borrowings that are repayable by scheduled payments, if the scheduled payment date is changed then the Maturity Date of the applicable Borrowings shall automatically be amended accordingly.
In the case of any reducing term loan and/or reducing term facility (“Reducing Term Loan/Faciiity”), provided that nothing contained in this paragraph shall confer any right of renewal or extension upon the Borrower, the Borrower and the Bank agree that, at the Bank’s option, the Bank may provide a letter (“Renewal Letter”) to the Borrower setting out the terms upon which the Bank is prepared to extend the Reducing Term Loan/Facility. In the event that the Bank provides a Renewal Letter to the Borrower and the Reducing Term Loan/Facility is not repaid on or before the Maturity Date of the applicable Reducing Term Loan/Facility, then at the Bank’s option the Reducing Term Loan/Facility shall be automatically renewed on the terms set out in the Renewal Letter and the terms of this Agreement shall be amended accordingly.
PREPAYMENTWhere Borrowings are by way of RBP Loans or RBUSBR Loans, the Borrower may prepay such Borrowings in whole or in part without fee or premium.
The prepayment of any Borrowings under a term facility and/or any term loan will be made in the reverse order of maturity.
EVIDENCE OF INDEBTEDNESSThe Bank shall maintain accounts and records (the “Accounts") evidencing the Borrowings made available to the Borrower by the Bank under this Agreement. The Bank shall record the principal amount of such Borrowings, the payment of principal and interest on account of the Borrowings, and all other amounts becoming due to the Bank under this Agreement. The Accounts constitute, in the absence of manifest error, conclusive evidence of the Indebtedness of the Borrower to the Bank pursuant to this Agreement. The Borrower authorizes and directs the Bank to automatically debit, by mechanical, electronic or manual means, any bank account of the Borrower for all amounts payable under this Agreement, including, but not limited to, the
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AVG (OEAM) Inc. September 13, 2017
repayment of principal and the payment of interest, fees and all charges for the keeping of such bank accounts.
GENERAL COVENANTSWithout affecting or limiting the right of the Bank to terminate or demand payment of, or cancel or restrict availability of any unutilized portion of, any demand or other discretionary facility, the Borrower covenants and agrees with the Bank that the Borrower:a) will pay all sums of money when due under the terms of this Agreement;b) will immediately advise the Bank of any event which constitutes or which, with notice, lapse of
time or both, would constitute an Event of Default;c) will file all material tax returns which are or will be required to be filed by it, pay or make
provision for payment of all material taxes (including interest and penalties) and Potential Prior-Ranking Claims, which are or will become due and payable and provide adequate reserves for the payment of any tax, the payment of which is being contested;
d) will give the Bank 30 days prior notice in writing of any intended change in its ownership structure and it will not make or facilitate any such changes without the prior written consent of the Bank;
e) will comply with all Applicable Laws, including, without limitation, all Environmental and Health and Safety Laws;
f) will immediately advise the Bank of any action requests or violation notices received concerning the Borrower and hold the Bank harmless from and against any losses, costs or expenses which the Bank may suffer or incur for any environment related liabilities existent now or in the future with respect to the Borrower;
g) will deliver to the Bank such financial and other information as the Bank may reasonably request from time to time, including, but not limited to, the reports and other information set out under Reporting Requirements;
h) will immediately advise the Bank of any unfavourable change in its financial position which may adversely affect its ability to pay or perform its obligations in accordance with the terms of this Agreement;
i) will keep its assets fully insured against such perils and in such manner as would be customarily insured by Persons carrying on a similar business or owning similar assets and, in addition, for any buildings located in areas prone to flood and/or earthquake, will insure and keep fully insured such buildings against such perils;
j) except for Permitted Encumbrances, will not, without the prior written consent of the Bank, grant, create, assume or suffer to exist any mortgage, charge, lien, pledge, security interest or other encumbrance affecting any of its properties, assets or other rights;
k) will not, without the prior written consent of the Bank, sell, transfer, convey, lease or otherwise dispose of any of its properties or assets other than in the ordinary course of business and on commercially reasonable terms;
l) will not, without the prior written consent of the Bank, guarantee or otherwise provide for, on a direct, indirect or contingent basis, the payment of any monies or performance of any obligations by any other Person, except as may be provided for herein;
m) will not, without the prior written consent of the Bank, merge, amalgamate, or otherwise enter into any other form of business combination with any other Person;
n) will permit the Bank or its representatives, from time to time, i) to visit and inspect the Borrower’s premises, properties and assets and examine and obtain copies of the Borrower's records or other information, ii) to collect information from any entity regarding any Potential Prior-Ranking Claims and iii) to discuss the Borrower’s affairs with the auditors, counsel and other professional advisers of the Borrower. The Borrower hereby authorizes and directs any such third party to provide to the Bank or its representatives all such information, records or documentation requested by the Bank; and
o) will not use the proceeds of any Credit Facility for the benefit or on behalf of any Person other than the Borrower.
FEES, COSTS AND EXPENSESThe Borrower agrees to pay the Bank all fees stipulated in this Agreement and all fees charged by the Bank relating to the documentation or registration of this Agreement and the Security. In addition, the Borrower agrees to pay all fees (including legal fees), costs and expenses incurred
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AVG (OEAM) Inc. September 13, 2017
by the Bank in connection with the preparation, negotiation, documentation and registration of this Agreement and any Security and the administration, operation, termination, enforcement or protection of its rights in connection with this Agreement and the Security. The Borrower shall indemnify and hold the Bank harmless against any loss, cost or expense incurred by the Bank if any facility under the Credit Facilities is repaid or prepaid other than on its Maturity Date. The determination by the Bank of such loss, cost or expense shall be conclusive and binding for all purposes and shall include, without limitation, any loss incurred by the Bank in liquidating or redeploying deposits acquired to make or maintain any facility.
GENERAL INDEMNITYThe Borrower hereby agrees to indemnify and hold the Bank and its directors, officers, employees and agents harmless from and against any and all claims, suits, actions, demands, debts, damages, costs, losses, obligations, judgements, charges, expenses and liabilities of any nature which are suffered, incurred or sustained by, imposed on or asserted against any such Person as a result of, in connection with or arising out of i) any Event of Default, ii) the Bank acting upon instructions given or agreements made by electronic transmission of any type, iii) the presence of Contaminants at, on or under or the discharge or likely discharge of Contaminants from, any properties now or previously used by the Borrower or any Guarantor and iv) the breach of or non compliance with any Applicable Law by the Borrower or any Guarantor.
AMENDMENTS AND WAIVERSNo amendment or waiver of any provision of this Agreement will be effective unless it is in writing, signed by the Borrower and the Bank. No failure or delay, on the part of the Bank, in exercising any right or power hereunder or under any Security or any other agreement delivered to the Bank shall operate as a waiver thereof. Each Guarantor, if applicable, agrees that the amendment or waiver of any provision of this Agreement {other than agreements, covenants or representations expressly made by any Guarantor herein, if any) may be made without and does not require the consent or agreement of, or notice to, any Guarantor. Any amendments requested by the Borrower will require review and agreement by the Bank and its counsel. Costs related to this review will be for the Borrower's account.
SUCCESSORS AND ASSIGNSThis Agreement shall extend to and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns. The Borrower shall not be entitled to assign or transfer any rights or obligations hereunder, without the consent in writing of the Bank. The Bank may assign or transfer all or any part of its rights and obligations under this Agreement to any Person. The Bank may disclose to potential or actual assignees or transferees confidential information regarding the Borrower and any Guarantor if applicable, (including, any such information provided by the Borrower, and any Guarantor if applicable, to the Bank) and shall not be liable for any such disclosure.
GAAPUnless otherwise provided, all accounting terms used in this Agreement shall be interpreted in accordance with Canadian Generally Accepted Accounting Principles, as appropriate, for publicly accountable enterprises, private enterprises, not-for-profit organizations, pension plans and in accordance, as appropriate, with Public Sector Accounting Standards for government organizations in effect from time to time* applied on a consistent basis from period to period. All financial statements and/or reports shall be prepared using one of the above bases of presentation, as appropriate. Except for the transition of accounting standards in Canada, any change in accounting principles or the application of accounting principles is only permitted with the prior written consent of the Bank.
SEVERABILITYThe invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement and such invalid provision shall be deemed to be severable.
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AVG (OEAM) Inc. September 13, 2017
GOVERNING LAWThis Agreement shall be construed in accordance with and governed by the laws of the Province identified in the Governing Law Jurisdiction section of this Agreement and the laws of Canada applicable therein. The Borrower irrevocably submits to the non-exclusive jurisdiction of the courts of such Province and acknowledges the competence of such courts and irrevocably agrees to be bound by a judgment of any such court.
DEFAULT BY LAPSE OF TIMEThe mere lapse of time fixed for performing an obligation shall have the effect of putting the Borrower, or a Guarantor if applicable, in default thereof.
SET-OFFThe Bank is authorized (but not obligated), at any time and without notice, to apply any credit balance (whether or not then due) in any account in the name of the Borrower, or to which the Borrower is beneficially entitled (in any currency) at any branch or agency of the Bank in or towards satisfaction of the indebtedness of the Borrower due to the Bank under the Credit Facilities and the other obligations of the Borrower under this Agreement, For that purpose, the Bank is irrevocably authorized to use all or any part of any such credit balance to buy such other currencies as may be necessary to effect such application.
NOTICESAny notice or demand to be given by the Bank shall be given in writing by way of a letter addressed to the Borrower. |f the letter is sent by telecopier, it shall be deemed received on the date of transmission, provided such transmission is sent prior to 5:00 p.m. on a day on which the Borrower’s business is open for normal business, and otherwise on the next such day. If the letter is sent by ordinary mail to the address of the Borrower, it shall be deemed received on the date falling five (5) days following the date of the letter, unless the letter is hand-delivered to the Borrower, in which case the letter shall be deemed to be received on the date of delivery, The Borrower must advise the Bank at once about any changes in the Borrower's address,
CONSENT OF DISCLOSUREThe Borrower hereby grants permission to any Person having information in such Person’s possession relating to any Potential Prior-Ranking Claim, to release such information to the Bank (upon its written request), solely for the purpose of assisting the Bank to evaluate the financial condition of the Borrower,
NON-MERGERThe provisions of this Agreement shall not merge with any Security provided to the Bank, but shall continue in full force for the benefit of the parties hereto.
JOINT AND SEVERALWhere more than one Person is liable as Borrower or Guarantor if applicable for any obligation under this Agreement, then the liability of each such Person for such obligation is joint and several (in Quebec, solidarily) with each other such Person.
COUNTERPART EXECUTIONThis Agreement may be executed In any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together constitute one and the same instrument.
ELECTRONIC MAIL AND FAX TRANSMISSIONThe Bank is entitled to rely on any agreement, document or instrument provided to the Bank by the Borrower or any Guarantor as applicable, by way of electronic mail or fax transmission as though it were an original document. The Bank is further entitled to assume that any communication from the Borrower received by electronic mail or fax transmission is a reliable communication from the Borrower.
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AVG (OEAM) Inc. September 13, 2017
ELECTRONIC IMAGINGThe parlies hereto agree that, at any time, the Bank may convert paper records of this Agreement and all other documentation delivered to the Bank (each, a "Paper Record") into electronic images (each, an "Electronic Image") as part of the Bank's normal business practices. The parties agree that each such Electronic Image shall be considered as an authoritative copy of the Paper Record and shall be legally binding on the parties and admissible in any legal, administrative or other proceeding as conclusive evidence of the contents of such document in the same manner as the original Paper Record.
REPRESENTATIONS AND WARRANTIESThe Borrower represents and warrants to the Bank that:a) it is duly incorporated, validly existing and duly registered or qualified to carry on business in
each jurisdiction in which its business or assets are located;b) the execution, delivery and performance by it of this Agreement have been duly authorized by
all necessary actions and do not violate its constating documents or any Applicable Laws or agreements to which it is subject or by which it is bound;
c) no event has occurred which constitutes, or which, with notice, lapse of time, or both, would constitute, an Event of Default;
d) there is no claim, action, prosecution or other proceeding of any kind pending or threatened against it or any of its assets or properties before any court or administrative agency which relates to any non-compliance with any Environmental and Health and Safety Laws which, if adversely determined, might have a material adverse effect upon its financial condition or operations or its ability to perform its obligations under this Agreement or any Security, and there are no circumstances of which it is aware which might give rise to any such proceeding which it has not fully disclosed to the Bank; and
e) it has good and marketable title to all of its properties and assets, free and clear of any encumbrances, other than as may be provided for herein.
Representations and warranties are deemed to be repeated as at the time of each Borrowing hereunder.
LANGUAGEThe parties hereto have expressly requested that this Agreement and all related documents, including notices, be drawn up in the English language. Les parties ont expressement demands que la presents convention et tous les documents y affdrents, y compris les avis, soient r6digds en langue anglaise.
WHOLE AGREEMENTThis Agreement and any documents or instruments referred to in, or delivered pursuant to, or in connection with, this Agreement constitute the whole and entire agreement between the Borrower and the Bank with respect to the Credit Facilities.
EXCHANGE RATE FLUCTUATIONSIf, for any reason, the amount of Borrowings outstanding under any facility in a currency other than Canadian currency, when converted to the Equivalent Amount in Canadian currency, exceeds the amount available under such facility, the Borrower shall immediately repay such excess or shall secure such excess to the satisfaction of the Bank.
JUDGEMENT CURRENCYIf for the purpose of obtaining judgement in any court in any jurisdiction with respect to this Agreement, it is necessary to convert into the currency of such jurisdiction (the "Judgement Currency") any amount due hereunder jn any currency other than the Judgement Currency, then conversion shall be made at the rate of exchange prevailing on the Business Day before the day on which judgement is given. For this purpose "rate of exchange" means the rate at which the Bank would, on the relevant date, be prepared to sell a similar amount of such currency in the Toronto foreign exchange market, against the Judgement Currency, in accordance with normal banking procedures.
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AVG (OEAM) Inc. September 13, 2017
In the event that there is a change in the rate of exchange prevailing between the Business Day before the day on which judgement is given and the date of payment of the amount due, the Borrower will, on the date of payment, pay such additional amounts as may be necessary to ensure that the amount paid on such date is the amount in the Judgement Currency which, when converted at the rate of exchange prevailing on the date of payment, is the amount then due under this Agreement in such other currency together with interest at RBP and expenses (including legal fees on a solicitor and client basis). Any additional amount due from the Borrower under this section will be due as a separate debt and shall not be affected by judgement being obtained for any other sums due under or in respect of this Agreement.
EVENTS OF DEFAULTWithout affecting or limiting the right of the Bank to terminate or demand payment of, or to cancel or restrict availability of any unutilized portion of, any demand or other discretionary facility, each of the following shall constitute an “Event of Default” which shall entitle the Bank, in its sole discretion, to cancel any Credit Facilities, demand Immediate repayment in full of any amounts outstanding under any term facility, together with outstanding accrued interest and any other indebtedness under or with respect to any term facility, and to realize on all or any portion of any Security:a) failure of the Borrower to pay any principal, interest or other amount when due pursuant to
this Agreement;b) failure of the Borrower, or any Guarantor if applicable, to observe any covenant, term or
condition contained in this Agreement, the Security, or any other agreement delivered to the Bank or in any documentation relating hereto or thereto;
c) the Borrower, or any Guarantor if applicable, is unable to pay its debts as such debts become due, or is, or is adjudged or declared to be, or admits to being, bankrupt or insolvent;
d) if any proceeding is taken to effect a compromise or arrangement with the creditors of the Borrower, or any Guarantor if applicable, or to have the Borrower, or any Guarantor if applicable, declared bankrupt or wound up, or to have a receiver appointed for any part of the assets or operations of the Borrower, or any Guarantor if applicable, or if any encumbrancer takes possession of any part thereof;
e) if in the opinion of the Bank there is a material adverse change in the financial condition, ownership or operation of the Borrower, or any Guarantor if applicable;
f) if any representation or warranty made by the Borrower, or any Guarantor if applicable, under this Agreement or in any other document relating hereto or under any Security shall be false in any material respect; or
g) if the Borrower, or any Guarantor if applicable, defaults in the payment of any other indebtedness, whether owing to the Bank or to any other Person, or defaults in the performance or observance of any agreement in respect of such indebtedness where, as a result of such default, the maturity of such indebtedness is or may be accelerated.
Should the Bank demand immediate repayment in full of any amounts outstanding under any term facility due to an Event of Default, the Borrower shall immediately repay all principal sums outstanding under such facility and all other obligations in connection with any such term facility.
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Schedule “A’
DEFINITIONS
For the purpose of this Agreement, the following terms and phrases shall have the following meanings:
"Applicable Laws" means, with respect to any Person, property, transaction or event, all present or future applicable laws, statutes, regulations, rules, policies, guidelines, rulings, interpretations, directives (whether or not having the force of law), orders, codes, treaties, conventions, judgements, awards, determinations and decrees of any governmental, quasi-governmental, regulatory, fiscal or monetary body or agency or court of competent jurisdiction in any applicable jurisdiction;
"Borrowing” means each use of a Credit Facility and all such usages outstanding at any time are “Borrowings”;
“Business Day” means a day, excluding Saturday, Sunday and any other day which shall be a legal holiday or a day on which banking institutions are closed throughout Canada;
“Business Loan Insurance Plan” means the optional group creditor insurance coverage, underwritten by Sun Life Assurance Company of Canada, and offered in connection with eligible loan products offered by the Bank;
“Canadian/US Accounts Receivable" means trade accounts receivable of the Borrower, AVG (OEM) Inc. and National Automotive Customizers Inc. owing by Persons whose chief operating activities are located in the US or Canada;
"Contaminant” includes, without limitation, any pollutant, dangerous substance, liquid waste, industrial waste, hazardous material, hazardous substance or contaminant including any of the foregoing as defined in any Environmental and Health and Safety Law;
“Debt Service Coverage” means, for any fiscal period, the ratio of EBITDA to the total of Interest Expense and scheduled principal payments in respect of Funded Debt;
“EBITDA” means, for any fiscal period, net income from continuing operations (excluding extraordinary gains or losses) plus, to the extent deducted in determining net income, Interest Expense and income taxes accrued during, and depreciation, depletion and amortization expenses deducted for, the period;
“EDC" means Export Development Canada;
“Eligible Pre-Shipment Costs" means up-front direct costs including but not limited to raw material, work in progress, finished goods and direct labour costs but excluding non direct overhead costs in relation to the production of goods and services sold under a specific Export Contract;
“Environmental Activity” means any activity, event or circumstance in respect of a Contaminant, including, without limitation, its storage, use, holding, collection, purchase, accumulation, assessment, generation, manufacture, construction, processing, treatment, stabilization, disposition, handling or transportation, or its Release into the natural environment, including movement through or in the air, soil, surface water or groundwater;
“Environmental and Health and Safety Laws” means all Applicable Laws relating to the environment or occupational health and safety, or any Environmental Activity;
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Schedule A
“Equity” means the total of share capital, {excluding preferred shares redeemable within one year) contributed surplus and retained earnings plus Postponed Debt;
“Equivalent Amount” means, with respect to an amount of any currency, the amount of any other currency required to purchase that amount of the first mentioned currency through the Bank in Toronto, in accordance with normal banking procedures;
“Export Contract” means any purchase order issued by a non-Canadian buyer to the Borrower for the purchase of goods and/or services by the non-Canadian buyer and any contract entered into between a non-Canadian buyer and the Borrower for the purchase of goods and/or services by a buyer;
"Funded Debt” means, at any time for the fiscal period then ended, all obligations for borrowed money which bears interest or to which interest is imputed plus, without duplication, all obligations for the deferred payment of the purchase of property, all capital lease obligations and all indebtedness secured by purchase money security interests, but excluding Postponed Debt;
"Good Canadian/US Accounts Receivable” means Canadian/US Accounts Receivable excluding (i) the entire amount of accounts, any portion of which is outstanding more than 90 days after billing date, provided that the under 90 day portion may be included where the over 90 day portion is less than 10% of the amount of accounts, or where the Bank has designated such portion as nevertheless good, (ii) all amounts due from any affiliate, (ill) bad or doubtful accounts, (iv) accounts subject to any security interest or other encumbrance ranking or capable of ranking in priority to the Bank’s security, (v) the amount of all holdbacks, contra accounts or rights of setoff on the part of any account debtor, (vi) those trade accounts receivable included elsewhere in the Borrowing Limit calculation, or (vii) any accounts which the Bank has previously advised to be ineligible;
"Guarantor” means any Person who has guaranteed the obligations of the Borrower under this Agreement;
“Interest Expense” means, for any fiscal period, the aggregate cost of advances of credit outstanding during that period including, without limitation, interest charges, capitalized interest, the interest component of capital leases, fees payable in respect of letters of credit and letters of guarantee and discounts incurred and fees payable in respect of bankers’ acceptances;
“Letter of Guarantee” or “LG” means a documentary credit issued by the Bank on behalf of the Borrower for the purpose of providing security to a third party that the Borrower or a person designated by the Borrower will perform a contractual obligation owed to such third party;
“Maturity Date” means the date on which a facility is due and payable in full;
“Net Eligible Pre-Shipment Costs” means Eligible Pre-Shipment Costs incurred in connection with the Nissan - Toyota Export Contract less the aggregate payments received by the Borrower (deposits or other) in connection with the Nissan - Toyota Export Contract;
“Nissan - Toyota Export Contract" means Export Contract entered into between the Borrower, as seller, and Nissan North America, Inc, and Toyota Motor Sales, USA Inc., as buyers, for the purposes of supplying interior accent lighting and door sills/plates for Nissan and Toyota vehicles;
“Permitted Encumbrances” means, in respect of the Borrower;a) liens arising by operation of law for amounts not yet due or delinquent, minor encumbrances
on real property such as easements and rights of way which do not materially detract from the value of such property, and security given to municipalities and similar public authorities when required by such authorities in connection with the operations of the Borrower in the ordinary course of business; and
b) Security granted in favour of the Bank;
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Schedule A
“Person” includes an individual, a partnership, a joint venture, a trust, an unincorporated organization, a company, a corporation, an association, a government or any department or agency thereof including Canada Revenue Agency, and any other incorporated or unincorporated entity;
"Policy" means the Business Loan insurance Plan policy 5100, issued by Sun Life Assurance Company of Canada to the Bank;
“Postponed Debt” means indebtedness that is fully postponed and subordinated, both as to principal and interest, on terms satisfactory to the Bank, to the obligations owing to the Bank hereunder;
“Potential Prior-Ranking Claims” means all amounts owing or required to be paid, where the failure to pay any such amount could give rise to a claim pursuant to any law, statute, regulation or otherwise, which ranks or is capable of ranking in priority to the Security or otherwise in priority to any claim by the Bank for repayment of any amounts owing under this Agreement;
“RBP” and “Royal Bank Prime" each means the annual rate of interest announced by the Bank from time to time as being a reference rate then in effect for determining interest rates on commercial loans made in Canadian currency in Canada;
“RBUSBR” and “Royal Bank US Base Rate" each means the annual rate of interest announced by the Bank from time to time as a reference rate then in effect for determining interest rates on commercial loans made in US currency in Canada;
“Release" includes discharge, spray, inject, inoculate, abandon, deposit, spill, leak, seep, pour, emit, empty, throw, dump, place and exhaust, and when used as a noun has a similar meaning;
“Tangible Net Worth" means the total of Equity less intangibles, deferred charges, leasehold improvements, deferred tax credits and unsecured advances to related parties. For the purpose hereof, intangibles are assets lacking physical substance;
“Total Liabilities” means all liabilities, exclusive of deferred tax liabilities and Postponed Debt;
“Unencumbered Inventory” means inventory of the Borrower, AVG (OEM) Inc. and National Automotive Customizers Inc. which is not subject to any security interest or other encumbrance or any other right or claim which ranks or is capable of ranking in priority to the Bank's security including, without limitation, rights of unpaid suppliers to repossess inventory within 30 days after delivery and rights of unpaid farmers, fishermen and aquaculturalists in respect of any unpaid amounts for products sold and delivered within the previous 15 days, under the Bankruptcy and Insolvency Act, Canada;
“US” means United States of America,
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Schedule “B1
CALCULATION AND PAYMENT OF INTEREST AND FEES
LIMIT ON INTERESTThe Borrower shall not be obligated to pay any interest, fees or costs under or in connection with this Agreement in excess of what is permitted by Applicable Law.
OVERDUE PAYMENTSAny amount that is not paid when due hereunder shall, unless interest is otherwise payable in respect thereof in accordance with the terms of this Agreement or the instrument or contract governing same, bear interest until paid, at the rate of RBP plus 5% per annum or, in the case of an amount in US currency if applicable, RBUSBR plus 5% per annum, Such interest on overdue amounts shall be computed daily, compounded monthly and shall be payable both before and after any or all of default, maturity date, demand and judgement.
EQUIVALENT YEARLY RATESThe annual rates of interest or fees to which the rates calculated in accordance with this Agreement are equivalent, are the rates so calculated multiplied by the actual number of days in the calendar year in which such calculation is made and divided by 365.
TIME AND PLACE OF PAYMENTAmounts payable by the Borrower hereunder shall be paid at such place as the Bank may advise from time to time in the applicable currency. Amounts due on a day other than a Business Day shall be deemed to be due on the Business Day next following such day. Interest and fees payable under this Agreement are payable both before and after any or all of default, maturity date, demand and judgement.
RBP LOANS AND RBUSBR LOANSThe Borrower shall pay interest on each RBP Loan and RBUSBR Loan, monthly in arrears, on the 26th day of each month or such other day as may be agreed to between the Borrower and the Bank. Such interest will be calculated monthly and will accrue daily on the basis of the actual number of days elapsed and a year of 365 days and shall be paid in the currency of the applicable Borrowing,
LETTER OF GUARANTEE FEESThe Borrower shall pay LG fees in advance on a quarterly basis calculated on the face amount of the LG issued and based on the number of days in the upcoming quarter or remaining term thereof and a year of 365 days. LG fees are non-refundable. If applicable, fees for LGs issued in US currency shall be paid in US currency and fees for LGs issued in any other approved currency shall be paid in Canadian currency.
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Schedule “D1
ADDITIONAL BORROWING CONDITIONS
LGs:
Borrowings made by way of LGs will be subject to the following terms and conditions;
a) each LG shall expire on a Business Day and shall have a term of not more than 365 days;
b) at least 2 Business Days prior to the issue of an LG, the Borrower shall execute a duly authorized application with respect to such LG and each LG shall be governed by the terms and conditions of the relevant application for such contract;
c) an LG may not be revoked prior to its expiry date unless the consent of the beneficiary of the LG has been obtained;
d) any LG issued under a term facility must have an expiry date on or before the Maturity Date of the term facility, unless otherwise agreed by the Bank; and
e) if there is any inconsistency at any time between the terms of this Agreement and the terms of the application for LG, the terms of the application for LG shall govern.
FEF Contracts
“Foreign Exchange Forward Contract” or “FEF Contract” means a currency exchange transaction or agreement or any option with respect to any such transaction now existing or hereafter entered Into between the Borrower and the Bank;
At the Borrower’s request, the Bank may agree to enter into FEF Contracts with the Borrower from time to time, The Borrower acknowledges that the Bank makes no formal commitment herein to enter into any FEF Contract and the Bank may, at any time and at all times, in its sole and absolute discretion, accept or reject any request by the Borrower to enter into a FEF Contract. If the Bank does enter into a FEF Contract with the Borrower, it will do so subject to the following:
a) the Borrower shall promptly issue or countersign and return a confirmation or acknowledgement of the terms of each such FEF Contract as required by the Bank;
b) the Borrower shall, if required by the Bank, promptly enter into a Foreign Exchange and Options Master Agreement or such other agreement in form and substance satisfactory to the Bank to govern the FEF Contract(s);
c) in the event of demand for payment under the Agreement of which this schedule forms a part, the Bank may terminate all or any FEF Contracts, If the agreement governing any FEF Contract does not contain provisions governing termination, any such termination shall be effected in accordance with customary market practice. The Bank's determination of amounts owing under any terminated FEF Contract shall be conclusive in the absence of manifest error. The Bank shall apply any amount owing by the Bank to the Borrower on termination of any FEF Contract against the Borrower's obligations to the Bank under the Agreement and any amount owing to the Bank by the Borrower on such termination shall be added to the Borrower’s obligations to the Bank under the Agreement and secured by the Security;
d) the Borrower shall pay all required fees in connection with any FEF Contracts and indemnify and hold the Bank harmless against any loss, cost or expense incurred by the Bank in relation to any FEF Contract;
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Schedule D
e) any rights of the Bank herein in respect of any FEF Contract are in addition to and not in limitation of or substitution for any rights of the Bank under any agreement governing such FEF Contract. In the event that there is any inconsistency at any time between the terms hereof and any agreement governing such FEF Contract, the terms of such agreement shall prevail;
f) in addition to any security which may be held at any time in respect of any FEF Contract, upon request by the Bank from time to time, the Borrower will deliver to the Bank such security as is acceptable to the Bank as continuing collateral security for the Borrower's obligations to the Bank in respect of FEF Contracts; and
g) the Borrower will enter each FEF Contract as principal, and only for purposes of hedging currency risk arising in the ordinary course of the Borrower's business and not for purposes of speculation. The Borrower understands and hereby acknowledges the risks associated with each FEF Contract, including those disclosed by the Bank in the attached Risk Disclosure Statement received by the Borrower.
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FOREIGN EXCHANGE FORWARDS RISK DISCLOSURE STATEMENT
The Borrower should only enter into over-the-counter foreign exchange forward contracts or variations thereof ("FX Forwards”) if it has sufficient knowledge and experience to evaluate them and if it understands, acknowledges and is capable of assuming all of the risks associated with them, including those described below.
Market or Price Risk. FX Forwards involve market or price risk. At any given time after execution but prior to maturity, an FX Forward will have a market value which may be greater or less than the market value the FX Forward had at the time of execution. Accordingly, if the Borrower wishes to reverse or close-out an FX Forward prior to maturity, there may be a resulting gain or loss to the Borrower. Such gain or loss could be substantial depending on the terms of the FX Forward and market conditions, which can change continuously and rapidly.
Absence of Advisory Relationship. While Royal Bank of Canada (“RBC”) may comment on a variety of topics in conversation with the Borrower, the Borrower should not assume that RBC is acting in an advisory capacity unless RBC expressly indicates otherwise. All information provided by RBC should be evaluated by the Borrower independently of RBC.This includes not only information about market conditions and trends but also any information about the legal, regulatory, tax, accounting and credit issues generated by FX Forwards.
This Risk Disclosure Statement does not purport to disclose all of the risks and material considerations associated with FX Forwards, and neither this Risk Disclosure Statement, nor any other document provided by RBC, should be construed as legal, tax, investment or business advice or counsel.
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Schedule “G1
BORROWING LIMIT CERTIFICATE
I,______________________________________ , representing the Borrower hereby certify as ofmonth ending____________________________ :
1. lam familiar with and have examined the provision of the Agreement dated September 13, 2017 and any amendments thereto, between AVG (OEAM) Inc., as Borrower, and Royal Bank of Canada, as the Bank and have made reasonable investigations of corporate records and inquiries of other officers and senior personnel of the Borrower. Terms defined in the Agreement have the same meanings where used in this certificate.
2. The Borrowing Limit is $___________________ , calculated as follows:
Total Canadian/US Accounts ReceivableAccounts, any portion of which exceeds 90 $.daysAccounts due from affiliates $"Under 90 days” accounts where collection is $, suspectAccounts subject to prior encumbrances $.Holdbacks, contra-accounts or rights of set- $. offAccounts included elsewhere in the $.Borrowing Limit calculation Other ineligible accounts $.Under 90 day portion of accounts included in $. a) above, where the over 90 day portion is less than 10% of the amount of accounts, or which the Bank has designated as nevertheless good
Good Canadian/US Accounts Receivable Marginable Good Canadian/US Accounts Receivable at 75% of A Total inventory of the Borrower, AVG (OEM) Inc. and National Automotive Customizers Inc. (valued at lesser of cost or net realizable value)Less: a) Inventory subject to prior encumbrances $_
b) Inventory subject to 30 day supplier payables $.c) Other non qualifying inventory $.
Unencumbered InventoryMarginable Unencumbered Inventory at 40% of C (Max $1,400,000.00)Less: Potential Prior-Ranking Claims of the
Borrower, AVG (OEM) Inc, and National Automotive Customizers Inc., while not limited to these include:
Sales tax, Excise & GST $.Employee source deductions such as E.I., CPP, Income Tax $. Workers Compensation Board $.Wages, Commissions, Vacation Pay $.Unpaid Pension Plan Contributions $.Overdue Rent, Property & Business Tax and potential claims $.from third parties such as subcontractorsOther $.Total Potential Prior-Ranking Claims Borrowing Limit (B+D-E)
Less; a)
b)c)
d)e)
f)
g)Plus: h)
I.
A $ B $
C $ D $.
E $.$.
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Schedule G
Less: Facility #1 Borrowings $_____Margin Surplus (Deficit) $_____
3. Annexed hereto are the following reports in respect of the Borrower, AVG (OEM) Inc. and National Automotive Customizers Inc:a) aged list of accounts receivable,b) aged list of accounts payable,c) status of inventory, andd) listing of Potential Prior-Ranking Claims.
4. The reports and information provided herewith are accurate and complete in all respects and all amounts certified as Potential Prior-Ranking Claims are current amounts owing and not in arrears.
Dated this________ day of________________, 20_____ .
Per: ________________________________________
Name:
Title:
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Schedule “H
COMPLIANCE CERTIFICATE
I,______________________________________ /representing the Borrower hereby certify as offiscal quarter/fiscal year ending_____________________ :
1. lam familiar with and have examined the provisions of the Agreement dated September 13, 2017 and any amendments thereto, between AVG (OEAM) Inc., as Borrower, and Royal Bank of Canada as the Bank, and have made reasonable investigations of corporate records and inquiries of other officers and senior personnel of the Borrower and any Guarantor if applicable. Terms defined in the Agreement have the same meanings where used in this certificate.
2. The representations and warranties contained in the Agreement are true and correct.
3. No event or circumstance has occurred which constitutes or which, with the giving of notice, lapse of time, or both, would constitute an Event of Default and there is no reason to believe that during the next fiscal quarter/fiscal year of the Borrower, any such event or circumstance will occur.
4. Debt Service Coverage is_____ :1, being not less than the minimum required ratio of 1.25:1(tested annually),
5. The ratio of Total Liabilities to Tangible Net Worth is_____ ;1, being not greater than themaximum permitted ratio of 2.75:1 (tested quarterly).
6. The detailed calculations of the foregoing ratios and covenants is set forth in the addendum annexed hereto and are true and correct in all respects.
Dated this_____ day of______________ , 20.
Per:
Name:
Title:
Per:
Name:
Title:
SRF# 311 166 573
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Schedule “J
RBC COVARITY DASHBOARD TERMS AND CONDITIONS
If the Borrower elects to fulfill the reporting requirements relating to the submission of financial information set out in this Agreement by accessing a secure web based portal (“RBC Covarity Dashboard") via the Internet and using RBC Covarity Dashboard to electronically upload the Borrower's financial information and to complete online and electronically submit certificates, reports and/or forms (the “Service"), then the following terms and conditions (the “RBC Covarity Dashboard Terms and Conditions”) apply and are deemed to be included in, and form part of, the Agreement.
1. Definitions. For the purpose of the RBC Covarity Dashboard Terms and Conditions:
“Disabling Code" means any clock, timer, counter, computer virus, worm, software lock, drop dead device, Trojan horse routine, trap door, time bomb, or any other unauthorized codes, designs, routines or instructions that may be used to access, modify, replicate, distort, delete, damage or disable any Electronic Channel, including any related hardware or software.
“Designated User" an individual permitted to act on behalf of and bind the Borrower in all respects, and specifically in the submission of Electronically Uploaded Financial Information and/or Electronically Submitted Certificates.
“Electronic Channel" means any telecommunication or electronic transmission method which may be used in connection with the Service, including computer, Internet, telephone, e-mail or facsimile.
“Electronic Communication” means any information, disclosure, request or other communication or agreement sent, received or accepted using an Electronic Channel.
"Electronically Submitted Certificates" means certificates, reports and/or forms completed online and electronically submitted by any Designated User accessing the Service.
“Electronically Uploaded Financial Information" means financial data, reports and/or information of the Borrower electronically uploaded by any Designated User accessing the Service.
“Internet” means a decentralized global communications medium and the world-wide network of computer networks, accessible to the public, that are connected to each other using specific protocols, which provides for file transfer, electronic mail, remote log in, news, database access, and other services.
“Password" means a combination of numbers and/or letters selected by a Designated User that is used to identify the Designated User. The Password is used in conjunction with a User ID to access the Service.
“Security Breach” means any breach in the security of the Service, or any actual or threatened use of the Service, a Security Device, or Electronic Channel in a manner contrary to the Agreement, including, without limitation, the introduction of Disabling Code or a Virus to the Service,
"Security Device" means a combination of a User ID and Password.
“Software" means any computer program or programming (in any code format, including source code), as modified from time to time, and related documentation,
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Schedule J
“User ID" means the combination of numbers and/or letters selected by the Borrower used to identify a particular Designated User. The User ID is used in conjunction with a Password to access the Service.
"Virus" means an element which is designed to corrupt data or enable access to or adversely impact upon the performance of computer systems, including any virus, worm, logic bomb and Trojan horse.
Terms defined in the Agreement have the same meanings where used in the RBC Covarity Dashboard Terms and Conditions,
2. Access to the Service. The Borrower will appoint one or more Designated User(s) to access the Service on behalf of the Borrower. The Borrower acknowledges and agrees that each Designated User appointed by the Borrower may electronically upload the Borrower’s financial information and may view all previously uploaded financial information and all calculations in the RBC Covarity Dashboard.
At the time of registration for the Service, the Borrower will advise the Bank of the name and e- mail address of each Designated User. The Borrower will immediately advise the Bank if a Designated User changes or is no longer valid.
The Bank will provide the Borrower with a User ID and temporary password for each Designated User. Each Designated User will receive the User ID and temporary password delivered to their e-mail address. Each Designated User will change the temporary password to a unique Password which may not be easily guessed or obtained by others. If it is suspected or known that the Password has been compromised in any way, the Password must be changed immediately.
On first access to the Service, each Designated User will be required to read and agree to terms of use which will thereafter be accessible from a link located on each web page of the Service.
3. Security Devices. The Borrower recognizes that possession of a Security Device by any person may result in that person having access to the Service. The Borrower agrees that the use of a Security Device in connection with the Service, including any information sent, received or accepted using the Service, will be deemed to be conclusive proof that such information is accurate and complete, and the submission of which is authorized by, and enforceable against, the Borrower.
The Borrower is responsible for maintaining the security and confidentiality of Security Devices which may be used in connection with the Service. The Borrower is responsible for ensuring that a Security Device will only be provided to and used by a Designated User. The Borrower agrees to be bound by any actions or omissions resulting from the use of any Security Device in connection with the Service.
4. Security. Each party shall at all times have in place appropriate policies and procedures to protect the security and confidentiality of the Service, Electronic Channels and Electronic Communication and to prevent any unauthorized access to and use of the Service and Electronic Channels. The Borrower agrees to comply with any additional procedures, standards or other security requirements that the Bank may require in order to access the Service.
The Borrower will not (I) access or use the Service for an illegal, fraudulent, malicious or defamatory purpose, or (ii) take steps or actions that could or do undermine the security, integrity, effectiveness, goodwill or connectivity of the Service (including illegal, fraudulent, malicious, defamatory or other activities that threaten to harm or cause harm to any other person).
The Borrower agrees not to transmit via the Service any viruses, worms, defects, Trojan horses or any items of a destructive nature. The Borrower shall maintain the security of their computer by using anti-virus scanning, a firewall and installing the latest security patches to provide assurance that no Virus is introduced into the systems or Software while accessing the Service.
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Schedule J
5. Unsecure Electronic Channels. The Borrower acknowledges and agrees that if it uses, or if it authorizes and directs the Bank to use, any unencrypted Electronic Channel, including unencrypted e-mail or facsimile, any Electronic Communication sent, received and/or accepted using such Electronic Channel is not secure, reliable, private or confidential, Any such Electronic Communication could be subject to interception, loss or alteration, and may not be received by the intended recipient in a timely manner or at all. The Borrower assumes full responsibility for the risks associated with such Electronic Communication.
6. Notice of Security Breach. The Borrower shall notify the Bank by notifying the RBC Account Manager in writing immediately of any Security Breach including: (I) any application vulnerability or if a Virus is contained in or affects transmission of information to the Service; or (ii) if the Borrower knows or reasonably ought to know that an unauthorized person may have access to the Service, Security Device or Electronic Channel.
If a Security Breach occurs the Borrower shall: (i) assist the Bank in the management of any consequences arising from it; (ii) take any reasonable steps necessary for it to take to mitigate any harm resulting from it; and (iii) take appropriate steps to prevent its recurrence.
7. Binding Effect. Any Electronic Communication that the Bank receives from or in the name of, or purporting to be from or in the name of, the Borrower or any other person on the Borrower's behalf in connection with the Service, will be considered to be duly authorized by, and enforceable against, the Borrower. The Bank will be authorized to rely and act on any such Electronic Communication, even if the Electronic Communication was not actually from the Borrower or such other person or differs in any way from any previous Electronic Communication sent to the Bank. Any Electronically Uploaded Financial Information will be considered to be financial information submitted to the Bank by an individual permitted to act on behalf of and bind the Borrower in all respects, and the Bank will be authorized to rely and act on any such Electronically Uploaded Financial Information accordingly. Any Electronically Submitted Certificates will be considered to be certificates, reports and/or forms completed and submitted to the Bank by an individual permitted to act on behalf of and bind the Borrower in all respects, and the Bank will be authorized to rely and act on any such Electronically Submitted Certificates accordingly.
8. Representations and Warranties. The Borrower represents and warrants to the Bank that each time Electronically Uploaded Financial Information and/or Electronically Submitted Certificates are submitted: (i) all financial statements, certificates, forms, reports and all information contained therein will be accurate and complete in all respects; (II) all amounts certified as Potential Prior-Ranking Claims will be current amounts owing and not in arrears;(iii) all representations and warranties contained in the Agreement will be true and correct; and(iv) no event will have occurred which constitutes, or which, with notice, lapse of time, or both, would constitute an Event of Default or breach of any covenant or other term or condition of the Agreement. The Borrower will be deemed to repeat these representations and warranties each time Electronically Uploaded Financial Information and/or Electronically Submitted Certificates are submitted.
9. Evidence. Electronic records and other information obtained by the Bank in an Electronic Communication will be admissible in any legal, administrative or other proceedings as conclusive evidence of the contents of those communications in the same manner as an original paper document, and the Borrower waives any right to object to the introduction of any such record or other information into evidence on that basis.
10. Limitation of Liability. The Bank is not responsible or liable for any damages arising from:(i) inaccurate, incomplete, false, misleading, or fraudulent information provided to the Bank;(ii) losses incurred as a result of an actual or potential Security Breach; or (iii) losses incurred as a result of application vulnerability or Virus that is contained in or affects any Software or systems used by or on behalf of the Borrower in connection with the Service.
Although every effort is made to provide secure transmission of information, timely communication and confidentiality cannot be guaranteed. In no event shall the Bank be liable for
Page 3 of 4
Schedule J
any loss or harm resulting from the use of the Service, or from a breach of confidentiality In respect of use of the Service.
11. Termination. The ability of the Borrower to fulfill the reporting requirements relating to the submission of financial information set out in the Agreement using RBC Covarity Dashboard shall terminate upon revocation of access to the Service. In addition, the Bank may suspend or terminate access to or discontinue the Service immediately for any reason at any time without prior notice. The Bank will not be responsible for any loss or inconvenience that may result from such suspension or termination. The Borrower, upon giving notice to the Bank by notifying the RBC Account Manager in writing, may terminate use of the Service at any time.
12. Amendment. The Bank may amend these RBC Covarity Dashboard Terms and Conditions upon 30 days notice (which may be given electronically by way of e-mail or in writing) to the Borrower. The Borrower agrees that the continued use of the Service after the effective date of a change will constitute conclusive evidence of consent to all such amendments and the Borrower shall be bound by the amendments.
Page 4 of 4
Schedule “K1
Drawdown Certificate and Report on Status of Contract or Purchase Order
The Borrower hereby requests the following be advanced under Facility #3:
Amount of requested Borrowing: $________________
Date of Borrowing: _________________
Borrowing Option: RBP Loans
Shipping Date: ________________
Final Payment Date: ________________
Aggregate Eligible Pre-Shipment Costs incurred in connection with Nissan - Toyota Export Contract
AS
Less: Aggregate payments received by the Borrower (deposits or other) inconnection with Nissan - Toyota Export Contract
B ($ )
Net Eligible Pre-Shipment Costs in connection with Nissan - Toyota ExportContract (A-B)
C $
The Borrower hereby certifies that (i) the information set forth herein is true and correct in all respects and (ii) any and all funds received from the Bank previously as Borrowings under Facility #3 have been expended for the purpose for which they were advanced.
Dated this________ day of_______________ , 20___ ,
AVG (OEAM) /
Per:_________ ______________________________ ________Nar™
Per:_______________________________________________Name:
I/We have the authority to bind the Borrower.
Page 1 of 1
111 Grangeway Avenue - 2nd Floor Scarborough, Ontario, M1H 3E9
Commercial Financial ServicesRoyal Bank of Canada
February 14, 2018
Private and Confidential
AVG (OEAM) INC.Unit 1605 Middlefield Road Scarborough, Ontario M1V5B9
We refer to the agreement dated September 13, 2017 and any amendments thereto, between AVG (OEAM) Inc., as the Borrower, and Royal Bank of Canada, as the Bank, (the “Agreement”),
The Bank reserves all of its rights and remedies at any time and from time to time in connection with any or all breaches, defaults or Events of Default now existing or hereafter arising under any Bank document, and whether known or unknown, and this amending agreement shall not be construed as a waiver of any such breach, default or Events of Default.
All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement.
The Agreement is amended as follows:
1. The Credit Facilities section is amended as follows:
I, a. the description of Facility #1 is amended and restated as follows:
Facility #1: $2,500,000.00 revolving demand facility reducing to $2,250,000.00on June 12, 2018, by way of:
b. the Availability section for Facility #1 is amended by the addition of the following:
The amount available under this facility is temporarily increased for the period commencing February 12, 2018 and ending June 12, 2018 (the "Reduction Date”). This temporary Increase is for the above referenced period only, On the Reduction Date (and provided that the Bank has not cancelled this facility or Issued a demand for repayment), the amount available under this facility shall reduce to $2,250,000.00 and the Borrower shall make all payments necessary to ensure that outstanding Borrowings under this facility do not exceed the amount available at any time and from time to time.
® Registered Trademark of Royal Bank of Canada
SRF #311166573 Page 1 of 5
AVG (OEAM) Inc. February 14, 2018
ii. Facility #4 is added as follows:
Facility #4: $1,260,000.00 revolving demand facility by way of:
a) LGs in Canadian currency or US currency
Fees to be advised on a transaction-by-transaction basis. Fees and drawings to be charged to Borrower's accounts, Minimum fee of $100.00 in the currency of issue.___________________
AVAILABILITYThe Borrower may borrow, repay and reborrow up to the amount of this facility provided this facility is made available at the sole discretion of the Bank and the Bank may cancel or restrict the availability of any unutilized portion at any time and from time to time without notice.
REPAYMENTNotwithstanding compliance with the covenants and all other terms and conditions of this Agreement, and regardless of the maturities of any outstanding instruments or contracts, Borrowings under this facility are repayable on demand.
2. The Security section is amended as follows:
i. The following section Is added, immediately following paragraph gg):
In addition to the security set forth in paragraphs a) to q) inclusive above, security for the Borrowings under Facility #4 (the “Facility #4 Security”) shall include:
hh) EDC Account Performance Security Guarantee, Certificate of Cover Issued by EDC confirming EDC's guarantee of 100% of the amount of each LG issued under Facility #4 (each an "EDC PSG Guarantee").
ii. The last sentence is amended and restated as follows:
Collectively, the security set forth in paragraphs a) to hh) inclusive above, is referred to as the “Security”.
3. A section entitled "Conditions Precedent Facility #4" is added as follows, immediately following the “Conditions Precedent Facility #3" section:
CONDITIONS PRECEDENT FACILITY #4In addition to the conditions set forth in the Conditions Precedent section above, the availability of any Borrowing under Facility #4 is conditional upon the receipt of the following prior to each and every Borrowing:
a) an EDC PSG Guarantee in connection with the requested LG.
BUSINESS LOAN INSURANCE PLANThe Borrower hereby acknowledges that the Bank has offered it group creditor insurance coverage on the Borrowings under the Business Loan Insurance Plan and the Borrower hereby acknowledges that it is the Borrower's responsibility to apply for any new or increased insurance amount for the Borrowings that may be eligible.
If the Borrower decides to apply for insurance on the Borrowings, the application will be made via the Bank's Business Loan Insurance Plan application (form 3460 ENG or 53460 FRE). if the Borrower has existing uninsured Borrowings and decides not to apply for Business Loan
Page 2 of 5
AVG (OEAM) Inc. February 14, 2018
Insurance Plan coverage on any new Borrowings, it hereby acknowledges that the Bank may accept the Borrower’s signature below as the Borrower's waiver of the Bank’s offer to apply for Business Loan Insurance Plan coverage on all such Borrowings, and that all such Borrowings are not Insured under the Policy as at the date of acceptance of this Agreement,
If the Borrower has Business Loan Insurance Plan coverage on previously approved Borrowings, such coverage will be applied automatically to all new Borrowings eligible for Business Loan Insurance Plan coverage that share the same loan account number, up to the approved amount of Business Loan Insurance Plan coverage. This Agreement cannot be used to waive coverage on new Borrowings eligible for Business Loan Insurance Plan coverage if Business Loan Insurance Plan coverage Is in effect on the Borrower’s existing Borrowings. If the Borrower does not want Business Loan Insurance Plan coverage to apply to any new Borrowings, a different loan account number will need to be set up and all uninsured loans attached to it.
If the Borrower has existing Borrowings to which Business Loan Insurance Plan coverage applies, and any new Borrowings would exceed the approved amount of Business Loan Insurance Plan coverage already In place, the Borrower must apply for additional Business Loan Insurance Plan coverage (if eligible) in order for Business Loan Insurance Plan coverage to apply to any new Borrowings. If the Borrower decides not to apply for additional Business Loan Insurance Plan coverage in respect of any new Borrowings (if eligible), the Borrower hereby acknowledges that the Bank may accept the Borrower's signature below as the Borrower's waiver of the Bank’s offer to apply for additional Business Loan Insurance Plan coverage on such new Borrowings and that such new Borrowings are not insured under the Policy as at the date the Borrower executes this Agreement,
If there are any discrepancies between the insurance information in this Agreement and the Business Loan Insurance Plan documents regarding the Borrowings, the Business Loan Insurance Plan documents govern.
Business Loan Insurance Plan premiums (plus applicable taxes), will be taken as a separate payment, directly from the bank account associated with the loan, at the same frequency and schedule as your regular loan payments, where applicable. As premiums are based on the outstanding loan balance and the insured person's age at the time the premiums are due, the cost of Business Loan Insurance Plan coverage may Increase during the term of the loan. The premium calculation is set out in the Business Loan Insurance Plan terms and conditions provided to the Borrower at the time the application for Business Loan Insurance Plan coverage was completed, Refer to the terms and conditions (form 3460 ENG or 53460 ERE) for further explanation and disclosure.
CONDITIONS PRECEDENTThe effectiveness of this amending agreement is conditional upon receipt of:
a) a duly executed copy of this amending agreement;b) the Security provided for herein, registered, as required, to the satisfaction of the Bank;c) the effectiveness of the changes outlined in paragraphs 1.1, a) and b) above is conditional
upon the receipt of written confirmation of EDC’s consent to the changes outlined in the EDC Amendment Request Form, to the satisfaction of the Bank
d) such financial and other information or documents relating to the Borrower or any Guarantor if applicable as the Bank may reasonably require; and
e) such other authorizations, approvals, opinions and documentation as the Bank may reasonably require.
Additionally;f) all documentation to be received by the Bank shall be in form and substance satisfactory to
the Bank.
Page 3 of 5
AVG (OEAM) Inc. February 14, 2018
AMENDMENT FEEA non-refundable amendment fee of $1,500.00 is payable by the Borrower upon acceptance of this amending agreement.
COUNTERPART EXECUTIONThis amending agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together constitute one and the same instrument.
All other terms and conditions outlined in the Agreement remain unchanged and in full force and effect.
This amending agreement is open for acceptance until March 16,2018, after which date it will be null and void, unless extended in writing by the Bank.
ROYAL BANK OF CANADA
Name: Mike CussenTitle: Vice President, Business Credit
/yi
Agreed to and accepted this day of /U/sHkAi^ . 2018.
Name! 1\YAL S'oAm**') ( ctfiTitle:
I/We have the authority to bind the Borrower
We acknowledge and confirm our agreement with the foregoing terms and conditions, as Guarantor, as of_________ /£ ** 2018.
1598320 ONTARIO INC.
Per: 4,Name:Title:
Per:Name:Title:
I/We have the authority to bind the Guarantor
Page 4 of 5
AVG (OEAM) Inc. February 14, 2018
We acknowledge and confirm our agreement with the foregoing terms and conditions, as Guarantor, as of___ _____ ,2018.
NATIONAL AUTOMOTIVE CUSTOMIZERS INC.
Per: __ Name: Title:
4^ __________Cowman
Per: _ Name: Title:
^ / /I/A2- go/TA/Vt
I/We have the authority to bind the Guarantor
We acknowledge and confl^gn our agreement with the foregoing terms and conditions, as_______ ,2018.
We acknowledge and confirm our agreemer Guarantor, as of IV*' Y
AVG (OEM) INC.
Per:__________Name: foil's?/}'?- A U t?/At X ^Title:
Per:Name:Title:
/fyA2- Sop/ts-l /
I/We have the authority to bind the Guarantor
I acknowledge and confirm my agreement with the foregoing terms and conditions, as Guarantor, as of /<^ HlMIrt't________ ,2018. A
IfUJ 0A \u^.
Witness' J■ AiNfsA -rP^A-fc
AYAZ SOMANM
I acknowledge and confirm my agreement with the foregoing terms and conditions, as Guarantor, as of_____________________________ , 2018.
Witness ~ ^Am\SA
KARIM SULEMAN —^
Page 5 of 5
Royal Bank of CanadaCommercial Financial Services
1181 Davis Drive - 2™ Floor Newmarket, Ontario, L4B 3M3
June 22,2018
Private and Confidential
AVG (OEAM) INC.Unit 1605 Mlddlefield Road Scarborough, Ontario M1V5B9
We refer to the agreement dated September 13, 2017 and any amendments thereto, between AVG (OEAM) Inc., as the Borrovyer, and Royal Bank of Canada, as the Bank, (the “Agreement").
The Bank reserves all of its rights and remedies at any time and from time to time in connection with any or all breaches, defaults or Events of Default now existing or hereafter arising under any Bank document, and whether known or unknown, and this amending agreement shall not be construed as a waiver of any such breach, default or Events of Default.
All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement.
The Agreement Is amended as follows:
1. The Credit Facilities section is amended as follows:
a) the description of Facility #1 is amended and restated as follows:
Facility #1: $2,500,000.00 revolving demand facility reducing to $2,250,000.00 onAugust 31,2018, by way of:
b) the Availability section for Facility #1 is amended by the addition of the following:
The amount available under this facility Is temporarily Increased for the period commencing June 18, 2018 and ending August 31, 2018 (the “Reduction Date”). This temporary increase Is for the above referenced period only. On the Reduction Date (and provided that the Bank has not cancelled this facility or issued a demand for repayment), the amount available under this facility shall reduce to $2,250,000.00 and the Borrower shall make all payments necessary to ensure that outstanding Borrowings under this facility do not exceed the amount available at any time and from time to time,
BUSINESS LOAN INSURANCE PLANThe Borrower hereby acknowledges that the Bank has offered it group creditor insurance coverage on the Borrowings under the Business Loan Insurance Plan and the Borrower hereby
® Registered Trademark of Royal Bank of Canada
SRF #311166573 Page 1 of 5
AVG (OEAM) Inc. June 22,2018
acknowledges that it is the Borrower’s responsibility to apply for any new or increased insurance amount for the Borrowings that may be eligible.
If the Borrower decides to apply for insurance on the Borrowings, the application will be made via the Bank's Business Loan Insurance Plan application (form 3460 ENG or 53460 FRE). If the Borrower has existing uninsured Borrowings and decides not to apply for Business Loan Insurance Plan coverage on any new Borrowings, it hereby acknowledges that the Bank may accept the Borrower's signature below as the Borrower's waiver of the Bank's offer to apply for Business Loan Insurance Plan coverage on all such Borrowings, and that all such Borrowings are not insured under the Policy as at the date of acceptance of this Agreement.
If the Borrower has Business Loan Insurance Plan coverage on previously approved Borrowings, such coverage will be applied automatically to all new Borrowings eligible for Business Loan Insurance Plan coverage that share the same loan account number, up to the approved amount of Business Loan Insurance Plan coverage. This Agreement cannot be used to waive coverage on new Borrowings eligible for Business Loan Insurance Plan coverage if Business Loan Insurance Plan coverage is in effect on the Borrower's existing Borrowings. If the Borrower does not want Business Loan Insurance Plan coverage to apply to any new Borrowings, a different loan account number will need to be set up and all uninsured loans attached to it.
If the Borrower has existing Borrowings to which Business Loan Insurance Plan coverage applies, and any new Borrowings would exceed the approved amount of Business Loan Insurance Plan coverage already in place, the Borrower must apply for additional Business Loan Insurance Plan coverage (if eligible) in order for Business Loan Insurance Plan coverage to apply to any new Borrowings. If the Borrower decides not to apply for additional Business Loan Insurance Plan coverage m respect of any new Borrowings (if eligible), the Borrower hereby acknowledges that the Bank may accept the Borrower’s signature below as the Borrower's waiver of the Bank's offer to apply for additional Business Loan Insurance Plan coverage on such new Borrowings and that such new Borrowings are not insured under the Policy as at the date the Borrower executes this Agreement.
If there are any discrepancies between the insurance information in this Agreement and the Business Loan Insurance Plan documents regarding the Borrowings, the Business Loan Insurance Plan documents govern.
Business Loan Insurance Plan premiums (plus applicable taxes), will be taken as a separate payment, directly from the bank account associated with the loan, at the same frequency and schedule as your regular loan payments, where applicable. As premiums are based on the outstanding loan balance and the insured person's age at the time the premiums are due, the cost of Business Loan Insurance Plan coverage may increase during the term of the loan. The premium calculation is set out in the Business Loan Insurance Plan terms and conditions provided to the Borrower at the time the application for Business Loan Insurance Plan coverage was completed. Refer to the terms and conditions (form 3460 ENG or 53460 FRE) for further explanation and disclosure.
CONDITIONS PRECEDENTThe effectiveness of this amending agreement is conditional upon receipt of:
a) a duly executed copy of this amending agreement;b) the Security provided for herein, registered, as required, to the satisfaction of the Bank;c) written confirmation of EDO's consent to the changes contemplated in this amending
agreement as determined required by EDC;d) such financial and other information or documents relating to the Borrower or any Guarantor
if applicable as the Bank may reasonably require; and
Page 2 of 5
AVG (OEAM) Inc. June 22,2018
e) such other authorizations, approvals, opinions and documentation as the Bank may reasonably require.
Additionally;f) all documentation to be received by the Bank shall be in form and substance satisfactory to
the Bank.
AMENDMENT FEEA non-refundable amendment fee of $500.00 is payable by the Borrower upon acceptance of this amending agreement.
COUNTERPART EXECUTIONThis amending agreement may be executed in any number of counterparts and by different parties In separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together constitute one and the same instrument.
All other terms and conditions outlined in the Agreement remain unchanged and in full force and effect.
This amending agreement is open for acceptance until July 23, 2018, after which date it will be null and void, unless extended in writing by the Bank.
ROYAL BANK OF CANADA
Name: Mike CussenTitle: Vice President, Business Credit
/yi
Agreed to and accepted this £ 2— day 0f _ 2018
AVG (OEAM) INC. ^AVG (OEAM) INC.Per:___ ______%/aJ^s
Per: _ Name: Title: Cuurn/lt'l
Per: _ Name: Title:
I/We have the authority to bind the Borrower
Page 3 of 5
AVG (OEAM) Inc. June 22, 2018
We acknowledge and confjina our agreement with the foregoing terms and conditions, as Guarantor, as of_______'0 Z-’Z-—_____________ , 2018.
1598320 ONTARIO INC,
Per: _ Name; Title:
71^ ^ //tlX/otr^T
Per:_________________ 1/ A-
Name! ^Title:
IA/Ve have the authority to bind the Guarantor
We acknowledge andcpnfirm our agreement with the foregoing terms and conditions, as Guarantor, as of Z—_________________ , 2018.
NATIONAL AUTOMOTIVE CUSTOMIZERS INC.
Per: _ Name: Title:
Per: _ Name: Title:
_______ C^"0'
l/We have the authority to bind the Guarantor
We acknowledge and conflrm our agreement with the foregoing terms and conditions, as Guarantor, as of 7_________________ _ 2018.
AVG (OEM) INC
Per:__Name:Title:
Per:__Name:
£ (LS-2i'
lAA/e have the authority to bind the Guarantor
I acknowledge and confirm my agreement with the foregoing terms and conditions, as Guarantor, as of_________Z-_________________ , 2018.
A
71 ^Witness n , AYAZ SOMAN 1
Page 4 of 5
AVG (OEAM) Inc. June 22, 2018
I acknowledge and confirm my agreement with the foregoing terms and conditions, as Guarantor, as of________ 2.^_________________ , 2018.
■kiOAsiJkWitness TAWyA-fe KARIM«SyfcEMWT^---------- -------------
Page 5 of 5
TAB 3(d)
E-FORM 024 (03/2008}
GENERAL SECURITY AGREEMENT
1. SECURITY INTEREST
(a) For value received, the undersigned (“Debtor,’)l hereby grants to ROYAL BANK OF CANADA (“RBC"), a security interest (the "Security Interest1') in the undertaking of Debtor and In all of Debtor's present and after acquired personal property including, without limitation, in all Goods (including all parts, accessories, attachments, special tools, additions and accessions thereto), Chattel Paper, Documents of Title (whether negotiable or not), Instruments, Intangibles, Money and Securities and all other Investment Property now owned or hereafter owned or acquired by or on behalf of Debtor (including such as may be returned to or repossessed by Debtor) and in all proceeds and renewals thereof, accretions thereto and substitutions therefor (hereinafter collectively called "Collateral”), and including, without limitation, all of the following now owned or hereafter owned or acquired by or on behalf of Debtor:
(i) all inventory of whatever kind and wherever situate;
(ii) all equipment (other than Inventory) of whatever kind and wherever situate, including, without limitation, all machinery, tools, apparatus, plant, furniture-, fixtures and vehicles of whatsoever nature or kind;
(iii) all Accounts and book debts and generally all debts, dues, claims, choses in action and demands of every nature and kind howsoever arising or secured Including letters of credit and advices of credit, which are now due, owing or accruing or growing due to or owned by or which may hereafter become due, owing or accruing or growing due to or owned by Debtor ("Debts");
(Iv) all lists, records and files relating to Debtor's customers, clients and patients;
(v) all deeds, documents, writings, papers, books of account and other books relating to or being records of Debts, Chattel Paper or Documents of Title or by which such are or may hereafter be secured, evidenced, acknowledged or made payable;
(vi) all contractual rights and insurance claims;
(vil) all patents, industrial designs, trade-marks, trade secrets and know-how including without limitationenvironmental technology and biotechnology, confidential information, trade-names, goodwill, copyrights, personality rights, plant breeders’ rights, Integrated circuit topographies, software and all other forms of intellectual and industrial property, and any registrations and applications for registration of any of the foregoing (collectively "Intellectual Property"); and
(viii) all property described In Schedule “C” or any schedule now or hereafter annexed hereto,
(b) The Security Interest granted hereby shall not extend or apply to and Collateral shall not include the last day of the term of any lease or agreement therefor but upon the enforcement of the Security Interest, Debtor shall stand possessed of such last day In trust to assign the same to any person acquiring such term.
(c) The terms "Goods", "Chattel Paper”, “Document of Title", "Instrument", "Intangible”, "Security", "Investment Property", "proceed", “Inventory", "accession", "Money”, “Account", "financing statement” and "financing change statement" whenever used herein shall be interpreted pursuant to their respective meanings when used in the Personal Property Security Act of the province referred to in Clause 14(s), as amended from time to time, which Act, including amendments thereto and any Act substituted therefor and amendments thereto is herein referred to as the "P.P.S.A." provided always that the term "Goods" when used herein shall not include “consumer goods" of Debtor as that term is defined In the P.P.S.A., the term "Inventory” when used herein shall include livestock and the young thereof after conception and crops that become such within one year of execution of this Security Agreement and the term “Investment Property”, if not defined in the P.P.S.A., shall be interpreted according to Its meaning in the Personal Property Security Act (Ontario), Any reference herein to “Collateral’' shall, unless the context otherwise requires, be deemed a reference to “Collateral or any part thereof.
2. INDEBTEDNESS SECURED
The Security Interest granted hereby secures payment and performance of any and all obligations, Indebtedness and liability of Debtor to RBC (including interest thereon) present or future, direct or Indirect, absolute or contingent, matured or not, extended or renewed, wheresoever and howsoever incurred and any ultimate unpaid balance thereof and whether the same is from time to time reduced and thereafter increased or entirely extinguished and thereafter incurred again and whether Debtor be bound alone or with another or others and whether as principal or surety (hereinafter collectively called the “Indebtedness”). If the Security Interest in the Collateral is not sufficient, In the event of default, to satisfy ail Indebtedness of -the Debtor,-the--Debtoracknowledgesrancfagrees~tharDebtbFshaircdntinue to be liable for any Indebtedness remaining outstanding and RBC shall be entitled to pursue full payment thereof.
Page 1 oM 1
E-FORM <iU (03/2008)
3. REPRESENTATIONS AND WARRANTIES OF DEBTOR
Debtor represents and warrants and so long as this Security Agreement remains In effect shall be deemed to continuously represent and warrant that:
(a) the Collateral is genuine and owned by Debtor free of all security Interests, mortgages, liens, claims, charges, licenses, leases, infringements' by third parties, encumbrances or other adverse claims or Interests (hereinafter collectively called "Encumbrances”), save for the Security Interest and those Encumbrances shown on Schedule "A” or hereafter approved in writing by RBC, prior to their creation or assumption;
(b) all Intellectual Property applications and registrations are valid and In good standing and Debtor Is the owner of the applications and registrations; •
(c) each Debt, Chattel Paper and Instrument constituting Collateral is enforceable in accordance with its terms against the party obligated to pay the same (the "Account Debtor”), and the amount represented by Debtor to RBC from time to time as owing by each Account Debtor or by all Account Debtors will be the correct amount actually and unconditionally owing by such Account Debtor or Account Debtors, except for normal cash discounts where applicable, and no Account Debtor will have any defence, set off, claim or counterclaim against Debtor which can be asserted against RBC, whether in any proceeding to enforce Collateral or otherwise;
(d) the locations specified in Schedule “B" as to business operations and records are accurate and complete and with respect to Goods (including Inventory) constituting Collateral, the locations specified in Schedule “B” are accurate and complete save for Goods in transit to such locations and Inventory on lease or consignment; and all fixtures or Goods about to become fixtures and all crops and all oil, gas or other minerals to be extracted and all timber to be cut which forms part of the Collateral will be situate at one of such locations; and
(e) the execution, delivery and performance of the obligations under this Security Agreement and the creation of any security interest in or assignment hereunder of Debtor's rights in the Collateral to RBC will not result in a breach of any agreement to which Debtor is a party,
4. COVENANTS OF THE DEBTOR
So long as this Security Agreement remains in effect Debtor covenants and agrees:
(a) to defend the Collateral against the claims and demands of all other parties claiming the same or an Interest therein; to diligently initiate and prosecute legal action against all infringers of Debtor’s rights in Intellectual Property; to take all reasonable action to keep the Collateral free from all Encumbrances, except' for the Security Interest, licenses which are compulsory under federal or provincial legislation and those shown on Schedule "A” or hereafter approved in writing by RBC, prior to their creation or assumption, and not to sell, exchange, transfer, assign, lease, license or otherwise dispose of Collateral or any Interest therein without (he prior written consent of RBC; provided always that, until default, Debtor may, In the ordinary course of Debtor's business, sell or lease Inventory and, subject to Clause 7 hereof, use Money available to Debtor;
(b) to notify RBC promptly of:
(i) any change in the information contained herein or In the Schedules hereto relating to Debtor, Debtor's business or Collateral,
(II) the details of any significant acquisition of Collateral,
(III) the details of any claims or litigation affecting Debtor or Collateral,
(iv) any loss or damage to Collateral,
(v) any default by any Account Debtor in payment or other performance of its obligations with respect to Collateral, and
(vi) ~ “ the return to or repossession by Debtor of Collateral;
Page 2 of 11
E-FORM S24 (0S/200e>
(c) to keep Collateral in good order, condition and repair and not to use. Collateral In violation of the provisions of this Security Agreement or any other agreement relating to Collateral or any policy insuring Collateral or any applicable statute, law, by-law, rule, regulation or ordinance; to keep all agreements, registrations and applications relating to Intellectual Property and intellectual property used by Debtor in its business In good standing and to renew all agreements and registrations as may be necessary or desirable to protect Intellectual Property, unless otherwise agreed in writing by RBC; to apply to register all existing and future copyrights, trade-marks, patents, Integrated circuit topographies and industrial designs whenever it Is commercially reasonable to do so;
(d) to do, execute, acknowledge and deliver such financing statements, financing change statements and further assignments, transfers, documents, acts, matters and things (including further schedules hereto) as may be reasonably requested by RBC of or with respect to Collateral in order to give effect to these presents and to pay all costs for searches and filings in connection therewith;
, (e) to pay all taxes, rates, levies, assessments and other charges of every nature which may be lawfully levied, assessed or imposed against or in respect of Debtor or Collateral as and when the same become due and payable;
(f) to Insure collateral in such amounts and against such risks as would customarily be Insured by a prudent owner of similar Collateral and in such additional amounts and against such additional risks as RBC may from time to time direct, with loss payable to RBC and Debtor, as insureds, as their respective interests may appear, and to pay all premiums therefor and deliver copies of policies and evidence of renewal to RBC on request;
(g) to prevent Collateral, save Inventory sold or leased as permitted hereby, from being or becoming an accession to other property not covered by this Security Agreement;
(h) to carry on and conduct the business of Debtor in a proper and efficient manner and so as to protect and preserve Collateral and to keep, In accordance with generally accepted accounting principles, consistently applied, proper books of account for Debtor’s business as well as accurate' and complete records concerning Collateral, and mark any and all such records and Collateral at RBC's request so as to indicate the Security Interest;
(i) to deliver to RBC from time to time promptly upon request:
(i) any Documents of Title, Instruments, Securities and Chattel Paper constituting, representing or relating to Collateral,
(ii) all books of account and all records, ledgers, reportSj correspondence, schedules, documents, statements, lists and other writings relating to Collateral for the purpose of Inspecting, auditing or copying the same,
(ill) all financial statements prepared by or for Debtor regarding Debtor’s business,
(iv) all policies and certificates of insurance relating to Collateral, and
(v) such information concerning Collateral, the Debtor and Debtor's business and affairs as RBC may reasonably request.
5, USE AND VERIFICATION OF COLLATERAL
Subject to compliance with Debtor's covenants contained herein and Clause 7 hereof, Debtor may, until default, possess, operate, collect, use and enjoy and deal with Collateral in the ordinary course of Debtor’s business In any manner not inconsistent with the provisions hereof; provided always that RBC shall have the right at any time and from time to time to verify the existence and state of the Collateral in any manner RBC may consider appropriate and Debtor agrees to furnish all assistance and information and to perform all such acts as RBC may reasonably request in connection therewith and for such purpose to grant to RBC or its agents access to all places where Collateral may be located and to all premises occupied by Debtor.
Page 3 of 11
e-PORM 024 (03/2008)
6. SECURITIES, INVESTMENT PROPERTY
If Collateral at any time includes Securities, Debtor authorizes RBC to transfer the same or any part thereof Into its own name or that of its nominee(s) so that RBC or its nomlnee(s) may appear of record as the sole owner thereof; provided that, until default, RBC shall deliver promptly to Debtor all notices or other communications received by It or its nominee(s) as such registered owner and, upon demand and receipt of payment of any necessary expenses thereof, shall issue to Debtor or its'order a proxy to vote and take all action with respect to such Securities. After default, Debtor waives all rights to receive any notices or communications received by RBC or its nominee(s) as such registered owner and agrees that no proxy issued by RBC to Debtor or Its order as aforesaid shall thereafter be effective.
Where any Investment Property Is held in or credited to an account that has been established with a securities intermediary, RBC may, at any time after default, give a notice of exclusive control to any such securities intermediary with respect to such Investment Property.
7. COLLECTION OF DEBTS
Before or after default under this Security Agreement, RBC may notify all or any Account Debtors of the Security Interest and may also direct such Account Debtors to make all payments on Collateral to RBC. Debtor acknowledges that any payments on or other proceeds of Collateral received by Debtor from Account Debtors, whether before or after notification of this Security Interest to Account Debtors and whether before or after default under this Security Agreement, shall be received and held by Debtor in trust for RBC and shall be turned over to RBC upon request.
8. INCOME FROM AND INTEREST ON COLLATERAL
(a) Until default, Debtor reserves the right to receive any Money constituting income from or interest on Collateral and if RBC receives any such Money prior to default, RBC shall either credit the same against the Indebtedness or pay the same promptly to Debtor.
(b) After default, Debtor will not request or receive any Money constituting income from or Interest on Collateral and If Debtor receives any such Money without any request by it, Debtor will pay the same promptly to RBC.
9. INCREASES, PROFITS, PAYMENTS OR DISTRIBUTIONS
(a) Whether or not default has occurred, Debtor authorizes RBC:
(i) to receive any Increase in or profits on Collateral (other than Money) and to hold the same as part of Collateral. Money so received shall be treated as Income for the purposes of Clause 8 hereof and dealt with accordingly;
(ii) to receive any payment or distribution upon redemption or retirement or upon dissolution and liquidation of the issuer of Collateral; to surrender such Collateral in exchange therefor and to hold any such payment or distribution as part of Collateral.
(b) If Debtor receives any such increase or profits (other than Money) or payments or distributions, Debtor will deliver the same promptly to RBC to be held by RBC as herein provided.
10. DISPOSITION OF MONEY
Subject to any applicable requirements of the P.P.S.A., all Money collected or received by RBC pursuant to or in exercise of any right it possesses with respect to Collateral shall be applied on account of Indebtedness in such manner as RBC deems best or, at the option of RBC, may be held unappropriated in a collateral account or released to Debtor, all without prejudice to the liability of Debtor or the rights of RBC hereunder, and any surplus shall be accounted for as required by law.
11. EVENTS OF DEFAULT
- - -----The happening of any of the following eve'nfS“df cdn'ditioris shairconsfiTute default hereunder which is herein referredto as "default":
Page 4 of 11
E-FORM 924 (03/2008)
(a) the nonpayment when due, whether by acceleration or otherwise, of any principal or Interest forming part of Indebtedness or the failure of Debtor to observe or perform any obligation, covenant, term, provision or condition contained In this Security Agreement or any other agreement between Debtor and RBC;
(b) the death of or a declaration of incompetency by a court of competent jurisdiction with respect to Debtor, if an individual;
(c) the bankruptcy or insolvency of Debtor; the filing against Debtor of a petition in bankruptcy; the making of an assignment for the benefit of creditors by Debtor; the appointment of a receiver or trustee for Debtor or for any assets of Debtor or the institution by or against Debtor of any other type of insolvency proceeding under the Bankruptcy and Insolvency Act or otherwise;
(d) the Institution by or against Debtor of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against or winding up of affairs of Debtor;
(e) if any Encumbrance affecting Collateral becomes enforceable against Collateral;
(f) if Debtor ceases or threatens to cease to carry on business or makes or agrees to make a bulk sale ofassets without complying with applicable law or commits or threatens to commit an act of bankruptcy;
(g) if any execution, sequestration, extent or other process of any court becomes enforceable against Debtor or if distress or analogous process is levied upon the assets of Debtor or any part thereof;
h) if any certificate, statement, representation, warranty or audit report heretofore or hereafter furnished by oron behalf of Debtor pursuant to or in connection with this Security Agreement, or otherwise (Including, without limitation, therepresentations and warranties contained herein) or as an inducement to RBC to extend any credit to or to enter into this or any other agreement with Debtor, proves to have been false in any material respect at the time as of which the facts therein set forth were stated or certified, or proves to have omitted any substantial contingent or unliquidated liability or claim against Debtor; or if upon the date of execution of this Security Agreement, there shall have been any material adverse change In any of the facts disclosed by any such certificate, representation, statement, warranty or audit report, which change shall not have been disclosed to RBC at or prior to the time of such execution,
12. ACCELERATION
RBC, in its sole discretion, may declare all or any part of Indebtedness which is not by its terms payable on demand to be Immediately due and payable, without demand or notice of any kind, in the event of default, or if RBC considers itself insecure or that the Collateral is in jeopardy. The provisions of this clause are not intended in any way to affect any rights of RBC with respect to any Indebtedness which may now or hereafter be payable on demand.
13. REMEDIES
(a) Upon default, RBC may appoint or reappoint by instrument In writing, any person or persons, whether an officer or officers or an employee or employees of RBC or not, to be a receiver or receivers (hereinafter called a "Receiver”, which term when used herein shall include a receiver and manager) of Collateral (including any interest, Income or profits therefrom) and may remove any Receiver so appointed and appoint another In its stead. Any such Receiver shall, so far as concerns responsibility for its acts, be deemed the agent of Debtor and not RBC, and RBC shall not be in anyway responsible for any misconduct, negligence or non-feasance on the part of any such Receiver, its servants, agents or employees. Subject to the provisions of the instrument appointing it, any such Receiver shall have power to take possession of Collateral, to preserve Collateral or its value, to carry on or concur in carrying on all or any part of the business of Debtor and to sell, lease, license or otherwise dispose of or concur in selling, leasing, licensing or otherwise disposing of Collateral. To facilitate the foregoing powers, any such Receiver may, to the exclusion of all others, including Debtor, enter upon, use and occupy all premises owned or occupied by Debtor wherein Collateral may be situate, maintain Collateral upon such premises, borrow money on a secured or unsecured basis and use Collateral directly in carrying on Debtor’s business or as security for loans or advances to enable the Receiver to carry on Debtor’s business or otherwise, as such Receiver shall, in its discretion, determine. Except as may be otherwise directed by RBC, all Money received from time to time by such Receiver in carrying out its appointment shall be received in trust for and paid over to RBC. Every such Receiver may, in the discretion of RBC, be vested with all or any of the rights and powers of RBC.
(b) Upon default, RBC may, either directly or through its agents or nominees, exercise any or all of the powers and rights given to a Receiver by virtue of the foregoing sub-clause (a).
Page 5 of 11
E-PORM m {03/200&)
(c) RBC may take possession of, collect, demand, sue on, enforce, recover and receive Collateral and give valid and binding receipts and discharges therefor and in respect thereof and, upon default, RBC may sell, license, lease or otherwise dispose of Collateral in such manner, at such time or times and place or places, for such consideration and upon such terms and conditions as to RBC may seem reasonable.
(d) In addition to those rights granted herein and in any other agreement now or hereafter in effect between Debtor and RBC and in addition to any other rights RBC may have at law or in equity, RBC shall have, both before and after default, all rights and remedies of a secured party under the P.P.S.A. Provided always, that RBC shall not be liable or accountable for any failure to exercise its remedies, take possession of, collect, enforce, realize, sell, lease, license or otherwise dispose of Collateral or to institute any proceedings for such purposes. Furthermore, RBC shall have no obligation to take any steps to preserve rights against prior parties to any Instrument or-Chattel Paper whether Collateral or proceeds and whether or not in RBC's possession and shall not be liable or accountable for failure to do so.
(e) Debtor acknowledges that RBC or any Receiver appointed by it may take possession of Collateral wherever it may be located and by any method permitted by law and Debtor agrees upon request from RBC or any such Receiver to assemble and deliver possession of Collateral at such place or places as directed.
(f) Debtor agrees to be liable for and to pay all costs, charges and expenses reasonably incurred by RBC or any Receiver appointed by it, whether directly or for services rendered (including reasonable solicitors and auditors costs and other legal expenses and Receiver remuneration), in operating Debtor's accounts, in preparing or enforcing this Security Agreement, taking and maintaining custody of, preserving, repairing, processing, preparing for disposition and disposing of Collateral and in enforcing or collecting Indebtedness and all such costs, charges and expenses, together with any amounts owing as a result of any borrowing by RBC or any Receiver appointed by it, as permitted hereby, shall be a first charge on the proceeds of realization, collection or disposition of Collateral and shall be secured hereby,
(g) RBC will give Debtor such notice, if any, of the date, time and place of any public sale or of the date after which any private disposition of Collateral is to be made as may be required by the P.P.S.A..
(h) Upon default and receiving written demand from RBC, Debtor shall take such further action as may be necessary to evidence and effect an assignment or licensing of Intellectual Property to whomever RBC directs, including to RBC. Debtor appoints any officer or director or branch manager of RBC upon default to be its attorney in accordance with applicable legislation with full power of substitution and to do on Debtor's behalf anything that Is required to assign, license or transfer, and to record any assignment, licence or transfer of the Collateral. This power of attorney, which is coupled with an interest, is irrevocable until the release or discharge of the Security Interest.
14. MISCELLANEOUS
(a) Debtor hereby authorizes RBC to file such financing statements, financing change statements and other documents and do such acts, matters and things (Including completing and adding schedules hereto identifying Collateral or any permitted Encumbrances affecting Collateral or Identifying the locations at which Debtor's business is carried on and Collateral and records relating thereto are situate) as RBC may deem appropriate to perfect on an ongoing basis and continue the Security Interest, to protect and preserve Collateral and to realize upon the Security Interest and Debtor hereby irrevocably constitutes and appoints the Manager or Acting Manager from time to time of the herein mentioned branch of RBC the true and lawful attorney of Debtor, with full power of substitution, to do any of the foregoing in the name of Debtor whenever and wherever it may be deemed necessary or expedient.
(b) Without limiting any other right of RBC, whenever Indebtedness is immediately due and payable or RBC has the right to declare Indebtedness to be immediately due and payable (whether or not it has so declared), RBC may, in Its sole discretion, set off against Indebtedness any and all amounts then owed to Debtor by RBC in any capacity, whether or not due, and RBC shall be deemed to have exercised such right to set off immediately at the time of making its decision to do so even though any charge therefor is made or entered on RBC’s records subsequent thereto.
(c) Upon Debtor's failure to perform any of its duties hereunder, RBC may, but shall not be obligated to, perform any or all of such duties, and Debtor shall pay to RBC, forthwith upon written demand therefor, an amount equal to the expense incurred by RBC in so doing plus Interest thereon from the date such expense is incurred until it is paid at the rate of 15% per annum.
(d) RBC may grant extensions of time and other indulgences, take and give up security, accept compositions, compound, compromise, settle, grant releases and discharges and otherwise deal with Debtor, debtors of Debtor, sureties and others and with Collateral and other security as RBC may see fit, without prejudice to the liability of Debtor or RBC’s right to hold and realize the Security Interest. Furthermore, RBC may demand, collect and sue on Collateral in either Debtor's or RBC's name, at RBC’s option, and may endorse Debtors name on a_ny_.and a)l._cbeques,-commercial. paperrand-any other-'
-Instruments pertaining to or constltutihg CoHarerar.
(e) No delay or omission by RBC in exercising any right or remedy hereunder or with respect to any Indebtedness shall operate as a waiver thereof or of any other right or remedy, and no single or partial exercise thereof shall
Page 6 of 11
E-FORM m (03/2000}
preclude any other or further exercise thereof or the exercise of any other right or remedy. Furthermore, RBC may remedy any default by Debtor hereunder or with respect to any Indebtedness In any reasonable manner without waiving the default remedied and without waiving any other prior or subsequent default by Debtor. All rights and remedies of RBC granted or recognized herein are cumulative and may be exercised at any time and from time to time independently or in combination,
(f) Debtor waives protest of any Instrument constituting Collateral at any time held by RBC on which Debtor is in any way liable and, subject to Clause 13(g) hereof, notice of any other action taken by RBC,
(g) This Security Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns, In any action brought by an assignee of this Security Agreement and the Security Interest or any part thereof to enforce any rights hereunder, Debtor shall not assert against the assignee any claim or defence which Debtor now has or hereafter may have against RBC,' If more than one Debtor executes this Security Agreement the obligations of such Debtors hereunder shall be joint and several.
(h) RBC may provide any financial and other information It has about. Debtor, the Security Interest and the Collateral to any one acquiring or who may acquire an interest in the Security Interest or the Collateral from the Bank or any one acting on behalf of the Bank.
(I) Save for any schedules which may be added hereto pursuant to the provisions hereof, no modification, variation or amendment of any provision of this Security Agreement shall be made except by. a written agreement, executed by the parties hereto and no waiver of any provision hereof shall be effective unless in writing.
(j) Subject to the requirements of Clauses 13(g) and 14(k) hereof, whenever either party hereto Is required or entitled to notify or direct the other or to make a demand or request upon the other, such notice, direction, demand or request shall be in writing and shall be sufficiently given, in the case of RBC, if delivered to it or sent by prepaid registered mall addressed to It at its address herein set forth or as changed pursuant hereto, and, in the case of Debtor, if delivered to It or if sent by prepaid registered mail addressed to It at its last address known to RBC, Either party may notify the other pursuant hereto of any change In such party's principal address to be used for the purposes hereof,
(k) This Security Agreement and the security afforded hereby is In addition to and not in substitution for any other security now or hereafter held by RBC and is intended to be a continuing Security Agreement and shall remain in full force and effect until the Manager or Acting Manager from time to time of the herein mentioned branch of RBC shall actually receive written notice of its discontinuance; and, notwithstanding such notice, shall remain in full force and effect thereafter until all Indebtedness contracted for or created before the receipt of such notice by .RBC, and any extensions or renewals thereof (whether made before or after receipt of such notice) together with interest accruing thereon after such notice, shall be paid in full,
(l) The headings used in this Security Agreement are for convenience only and are not be considered a part of this Security Agreement and do not in any way limit or amplify the terms and provisions of this Security Agreement,
(m) When the context so requires, the singular number shall be read as if the plural were expressed and the provisions hereof shall be read with all grammatical changes necessary dependent upon the person referred to being a male, female, firm or corporation.
(n) In the event any provisions of this Security Agreement, as amended from time to time, shall be deemed invalid or void, In whole or in part, by any Court of competent jurisdiction, the remaining terms and provisions of this Security Agreement shall remain jn full force and effect,
(o) Nothing herein contained shall in any way obligate RBC to grant, continue, renew, extend time for payment of or accept anything which constitutes or would constitute Indebtedness.
(p) The Security Interest created hereby is intended to attach when this Security Agreement is signed by Debtor and delivered to RBC.
(q) Debtor 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 "Debtor" 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 “indebtedness” (as that term is herein defined) of each of the amalgamating companies and the amalgamated company to RBC at the time of amalgamation and any "Indebtedness" of the amalgamated company to RBC thereafter arising, The Security interest shall attach to “Collateral" owned by each company amalgamating with Debtor, 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,
(r) In the event that Debtor is a body'corporate, it is hereby agreed that The Limitation of Civil Rights Act of the .Rrovince-of Saskatchewan-or any provision-thereof, shall-have no~application to this^Security Agreemeht oY any agreetnent or instrument renewing or extending or collateral to this Security Agreement. In the event that Debtor is an agricultural corporation within the meaning of The Saskatchewan Farm Security Act, Debtor agrees with RBC that all of Part IV (other than Section 46) of that Act shall not apply to Debtor,
Page 7 of 11
E-FORM 024 (03/2008)
(s) This Security Agreement and the transactions evidenced hereby shall be governed by and construed in accordance with the laws of the province in which the herein mentioned branch of RBC is located, as those laws may from time to time be in effect, except if such branch of RBC is located in Quebec then, this Security Agreement and the transactions evidenced hereby shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.
15. COPY OF AGREEMENT
(a) Debtor hereby acknowledges receipt of a copy of this Security Agreement.
(b) Debtor waives Debtor’s right to receive a copy of any financing statement or financing change statement registered by RBC or of any verification statement with respect to any financing statement or financing change statement registered by RBC. (Applies in all P.P.S.A. Provinces except Ontario),
16. Debtor represents and warrants that the following information is accurate:
INDIVIDUAL DEBTORSURNAME (LAST NAME) FIRST NAME SECOND NAME BIRTH DATE
YEAR MONTH DAY
ADDRESS OF INDIVIDUAL DEBTOR CITY PROVINCE POSTAL CODE
SURNAME (LAST NAME) FIRST NAME SECOND NAME BIRTH DATEYEAR MONTH DAY
ADDRESS OF INDIVIDUAL DEBTOR CITY PROVINCE POSTAL CODE
BUSINESS DEBTORNAME OF BUSINESS DEBTORAVG (OEAM) Ino,ADDRESS OF BUSINESS DEBTOR CITY PROVINCE POSTAL CODE60S Mlddlefield Road, Unit 1 Toronto Ontario M1V 5B9
TRADE NAME (IF APPLICABLE)TRADE NAME OF DEBTOR
PRINCIPAL ADDRESS (if different from above). CITY PROVINCE POSTAL CODE
IN WITNESS WHEREOF Debtor has executed this Security Agreement this J Q day of September, 2014.
AVG (OEAM) INC
Per:
BRANCH ADDRESSBusiness Service Centre
36 York Mills Road, 4II! Floor, Toronto, Ontario, M2P 0A4
Page 8 of 11
E-FORM 92< (03M0B)
Nil
SCHEDULE "A” T.1__1A|.(ENCUMBRANCES AFFECTING COULATERAl)
Page 9 of 11
AVG (OEAM) INC. SCHEDULE “A”
Outstanding Registrations under Personal Property Security Act (Ontario) (“PPSA”)
1. Debtor: AVG (OEAM) Tnc,Secured Party: RCAP Leasing Inc.File Number: 693781524Registration Number: 20140213 1032 8077 5598 Registered Period: 5 yearsCollateral Classification: Equipment, Accounts, Other Collateral Description: Copier Equipment
2. Debtor: AVG (OEAM) Inc.Secured Party: BDC Capital Inc,File Number: 686312442Registration Number: 20130424 0933 1590 9218 Registration Period: 8 yearsCollateral Classification: Inventory, Equipment, Accounts, Other and Motor Vehicle IncludedCollateral Description: None
3. Debtor: AVG (OEAM) Inc.Secured Party: Toyota Credit Canada Inc.File Number: 683076681Registration Number: 20121123 1049 1529 7567Registration Period: 4 yearsCollateral Classification: Consumer Goods, Equipment, Other and Motor Vehicle IncludedCollateral Description: 2013 Lexus Model GS340 V.I.N. JTHCE1BL7D5011578
4. Debtor: AVG (OEAM) Inc.Secured Party: BDC Capital Inc.File Number: 676382823Registration Number: 20120222 1631 1590 6603, amended by 20120323 1144 1590 8155 Registration Period: 7 yearsCollateral Classification: Inventory, Equipment, Accounts, Other and Motor Vehicle IncludedCollateral Description: None
2
5. Debtor: AVG (OEAM) Inc,Secured Party: Don Valley North Automotive Inc.File Number: 672676524Registration Number: 20110902 1457 4061 2915Registration Period: 4 yearsCollateral Classification: Consumer Goods, Motor Vehicle IncludedCollateral Description: 2010 Lexus Model LS460AWD V.I.N, JTPICL1BFX5005412
6. Debtor: AVG (OEAM) Inc.Secured Party: Ayaz Madat Somani File Number: 601952076Regisfation Number: 20031219 1236 1862 8565 amended by 20081105 0932 1515 1711,20120314 1130 1793 2000, 20120507 1145 1590 0628,20121026 1528 1793 2487, 20131017 1442 1783 8327 (renewal)Registration Period: 10 yearsCollateral Classification: Inventory, Equipment, Accounts, Other, Motor Vehicle IncludedCollateral Description: None
e-FORM 624 (03/2006)
SCHEDULE“B”
1. Locations of Debtor’s Business Operations
605 Middlefield Road, Unit 1 Toronto, Ontario M1V5B9
2. Locations of Records relating to Collateral (If different from 1. above)
3, Locations of Collateral (If different from 1, above)
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E'FORM D24 (03/2000)
SCHEDULE"C”(DESCRIPTION OF PROPERTY)
Page 11 of 11
TAB 3(e)
SECURITY AGREEMENT(ACCOUNTS RECEIVABLE)
E-FORM 926 (03/2008) RETENTION • M
I. SECURITY INTEREST
(a) For value received, the undersigned ("Debtor"), hereby grants to ROYAL BANK OF CANADA ("RBC"), a security interest (the "Security Interest") in the following:
(i) all present and after owned or acquired Accounts, claims, book debts, dues, choses in action anddemands of every nature and kind howsoever arising, which are now due, owing or accruing or growing due to or ownedby or which may hereafter come due, owing or accruing or growing due to or owned by Debtor; and
(il) all present and after owned or acquired Intangibles of the Debtor listed on Schedule "C”; and
(III) all Proceeds and renewals of the foregoing, and all accretions thereto and substitutions therefor;
(hereinafter called "Debts"), and in all proceeds and renewals thereof and substitutions therefor and In the following described property of the Debtor namely:
all lists, records and files relating to Debtor's customers, clients and patients,all deeds, documents, writings, papers, books of account and other books relating to or being records of Debts or the proceeds thereof or by which Debts or the proceeds thereof are or may hereafter be secured, evidenced, acknowledged or made payable (Including Chattel Paper, Securities and Instruments), now owned or hereafter owned or acquired by or on behalf of Debtor, andall Money (other than trust money lawfully belonging to others) hereafter received by or on behalf of Debtor In payment or satisfaction of Debts,
all of the foregoing being hereinafter collectively called "Collateral".(b) Unless otherwise limited herein, the terms "Chattel Paper", "Instrument", "Intangible", "Security", "proceeds",
"Money", "Account", "financing statement" and "financing change statement", whenever used herein, shall be interpreted pursuant to their respective meanings when used in The Personal Property Security Act of the province referred to in clause 12 (s) as amended from time to time, which Act, including amendments thereto and any Act substituted therefor and amendments thereto, is herein referred to as the "P.P.S.A.". Any reference hereto to "Collateral" shall, unless the context otherwise requires, be deemed a reference to "Collateral or any part thereof.
", INDEBTEDNESS SECURED
The Security Interest granted by, Debtor to RBC secures payment and performance of any and all obligations, indebtedness and liability of Debtor to RBC (Including interest thereon) present or future, direct'or Indirect, absolute or contingent, matured or not, extended or renewed, wheresoever and howsoever incurred, and any ultimate unpaid balance thereof, and whether the same Is from time to time reduced and thereafter Increased or entirely extinguished and thereafter Incurred again and whether Debtor be bound alone or with another or others and whether as principal or surety (hereinafter collectively called the "Indebtedness"). If the Security Interest in the Collateral is not sufficient, in the event of default, to satisfy all Indebtedness of the Debtor, the Debtor acknowledges and agrees that Debtor shall continue to be liable for any Indebtedness remaining outstanding and RBC shall be entitled to pursue full payment thereof.
3. REPRESENTATIONS AND WARRANTIES OF DEBTOR
Debtor represents and warrants and so long as this Security Agreement remains in effect shall be deemed to continuously represent and warrant that: ■
(a) the Collateral is genuine and owned by Debtor free of all security interests, mortgages, liens, claims, charges or other encumbrances or other adverse claims or interests (hereinafter collectively called "Encumbrances") save for the Security Interest and those Encumbrances shown on Schedule "A" or hereafter approved in writing by RBC prior to their creation or assumption;
(b) Debtor is authorized to enter Into this Security Agreement;(c) each debt, Chattel Paper and instrument constituting Collateral is enforceable in accordance with its terms against the
party obligated to pay the same (the "Account Debtor"), and the amount represented by Debtor to RBC from time to time as owing by each Account Debtor or by all Account Debtors will be the correct amount actually and unconditionally owing by such Account Debtor or Account Debtors, except for normal cash discounts where applicable, and no Account Debtor will have any defence, setoff, claim or counterclaim against Debtor which can be asserted against RBC, whether in any proceeding to enforce Collateral or otherwise; and
(d) the locations specified in Schedule "B" are accurate and complete,
4. COVENANTS OF DEBTOR
So long as this Security Agreement remains in effect, Debtor covenants and agrees:(a) to defend Collateral against the claims and demands of all other parties claiming the same or an interest therein; to
keep Collateral free from all Encumbrances, except for the Security Interest and those shown on Schedule "A or hereafter pproved In writing by RBC prior to their creation or assumption, and not to sell, exchange, transfer, assign or otherwise dispose of
Jollateral or any interest therein without the prior written consent of RBC and, in any event, Debtor shall deposit with RBC all Money received constituting Collateral with the right, until default and subject to Clause 7 hereof, to use such Money in the ordinary course of Debtor's business; . _
' (b)‘ rto ndtify RBC promptiy of:
(I) any change in the Information contained herein or in the Schedules hereto relating to Debtor, Debtor’s
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E-FORM 926 (03/2000)
business or Collateral,
(II) the details of any significant acquisition of Collateral,
(ill) the details of any claims or litigation affecting Debtor or Collateral,
(iv) any default by any Account Debtor In payment or other performance of his/her obligations with respect to Collateral; and
(v) the return to or repossession by Debtor of any goods underlying Collateral and hold the same in trust for RBC and dispose of the same as RBC may direct;
(c) to do, execute, acknowledge and deliver such financing statements, financing change statements and further assignments, transfers, documents, acts, matters and things (including further schedules hereto) as may be reasonably requested by RBC of or with respect to Collateral in order to give effect to these presents and to pay all costs for searches and filings In connection therewith;
(d) to pay all taxes, rates, levies, assessments and other charges of every nature which may be lawfully levied, assessed or Imposed against or in respect of Debtor or Collateral as and when the same become due and payable;
(e) to carry on and conduct the business of Debtor in a proper and efficient manner, and to keep, In accordance with generally accepted accounting principles, consistently applied, proper books of account for Debtor's business as well as accurate and complete records concerning Collateral, and mark any and all such records and Collateral at RBC's request so as to indicate the Security Interest; and
(f) to deliver to RBC from time to time promptly upon request:
(I) any instruments, Securities and Chattel Paper constituting, representing or relating to Collateral,
(ii) all books of account and all records, ledgers, reports, correspondence, schedules, documents, statements, lists and other writings relating to Collateral for the purpose of Inspecting; auditing or copying the same,
(ill) all financial statements prepared by or for Debtor regarding Debtor's business, and
(iv) such information concerning Collateral, the Debtor and Debtor's business and affairs as RBC may reasonably request.
5. USE AND VERIFICATION OF COLLATERAL
Subject to compliance with Debtor's covenants contained herein and Clause 7 hereof, Debtor may, until default, possess, collect, use and enjoy and deal with the Collateral in the ordinary course of Debtor's business in any manner not inconsistent with the provisions hereof; provided always that RBC shall have the right at any time and from time to time to verify the existence and state of the Collateral in any manner RBC may consider appropriate and Debtor agrees to furnish all assistance and information and to perform all such acts as RBC may reasonably request in connection therewith and for such purpose to grant to RBC or its agents access to all places where Collateral may be located and to all premises occupied by Debtor.
6. SECURITIES
If Collateral at any time includes Securities, Debtor authorizes RBC to transfer the same or any part thereof into Its own name or that of its nominee(s) so that RBC or its nominee(s) may appear of record as the sole owner thereof; provided that, until default, RBC shall deliver promptly to Debtor all notices or other communications received by it, or Its nominee(s) as such registered owner and, upon demand and receipt of payment of any necessary expenses thereof, shall issue to Debtor or its order a proxy to vote and take all action with respect to such Securities. After default, Debtor waives all rjghts to receive any notices or communications received by RBC or its nominee(s) as such registered owner and agrees that no proxy Issued by RBC to Debtor or its order as aforesaid shall thereafter be effective.
7. COLLECTION OF DEBTS
Before or after default under this Security Agreement, RBC may notify all or any Account Debtors of the Security Interest and may also direct such Account Debtors to make all payments on Collateral to RBC. Debtor acknowledges that any payments on or other proceeds of Collateral received by Debtor from Account Debtors, whether before or after notification of this Security Interest to Account Debtors and whether before or after default under this Security Agreement shall be received and held by Debtor In trust for RBC and shall be turned over to RBC upon request.
8. DISPOSITION OF MONEY
Subject to any applicable requirements of the P.P.S.A., all Money collected or received by RBC pursuant to or in exercise of any right it possesses with respect to Collateral shall be applied on account of Indebtedness in such manner as RBC deems best or, at the option of RBC, may be held unappropriated in a collateral account or released to Debtor, all without prejudice to the liability of Debtor or the rights of RBC hereunder, and any surplus shall be accounted for as required by law.
9. EVENTS OF DEFAULT
The happening of any of the following events or conditions shall constitute default hereunder which Is herein referred to as"default1':
(a) the nonpayment when due, whether by acceleration or otherwise, of any principal or interest forming part of Indebtedness or _the_failure,of Debtor.to. observe-or perform-any- obligationreonvenantr term; provision oroondltlon cohtalhded ih this Security Agreement or any other agreement between Debtor and RBC;
(b) the death of or a declaration of incompetency by a court of competent jurisdiction with respect to Debtor, if an individual;
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E-FORM 925 (03/2008)
(c) the bankruptcy or insolvency of Debtor, the filing against Debtor of petition In bankruptcy, the making of an assignment for the benefit of creditors by Debtor, the appointment of a receiver or trustee for Debtor or for any assets of Debtor, or
'6 Institution by or against Debtor of any other type of insolvency proceeding under the Bankruptcy and Insolvency Act or otherwise;
(d) the institution by or against Debtor of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against or winding up affairs of Debtor;
(e) if any Encumbrance affecting Collateral becomes enforceable against Collateral;(f) if Debtor ceases or threatens to cease to carry on business or makes or agrees to make a bulk sale of assets
without complying with applicable law or commits or threatens to commit an act of bankruptcy; •(g) If any execution, sequestration, extent or other process of any court becomes enforceable against Debtor or If a
distress or analogous process is levied upon the assets of Debtor or any part thereof;(h) if any certificate, statement, representation, warranty or audit report heretofore or hereafter furnished by or on behalf
of Debtor pursuant to or in connection with this Security Agreement, or otherwise (Including, without limitation, the representations and warranties contained herein) or as an inducement to RBC to extend any credit to or to enter into this or any other agreement with Debtor, proves to have been false in any material respect at the time as of which the facts therein set forth were stated or certified, or proves to have omitted any substantial contingent or unliquidated liability or claim against Debtor, or if upon the date of execution of this Security Agreement, there shall have been any material adverse change in any'of the facts disclosed by any such certificate, representation, statement, warranty or audit report, which change shall not have been disclosed to RBC at or prior to the time of such execution. '
10. ACCELERATION
RBC, in its sole discretion, may declare all or any part of the Indebtedness which is not by its terms payable on demand to be immediately due and payable, without demand or notice of any kind, in the event of default, or, If RBC, considers itself insecure or that the Collateral is in jeopardy. The provisions of this clause are not intended in any way to affect any rights of RBC with respect to any Indebtedness which may now or hereafter be payable on demand,
11. REMEDIES
(a) RBC may, either directly or through its agents or nominees, take possession of, collect, demand, sue on, enforce, recover and receive Collateral and give valid and binding receipts and discharges therefor and In respect thereof and, upon default, may sell or otherwise dispose of Collateral in such manner, at such time or times and place or places, for such consideration and upon such terms and conditions as to RBC may seem reasonable.
(b) In addition to those rights granted herein and in any other agreement now or hereafter In effect between Debtor and (BC and in addition to any other rights RBC may have at law or in equity, RBC shall have, both before and after default, all rights
and remedies of a secured party under the P.P.SA Provided always, that RBC shall not be liable or accountable for any failure to exercise its remedies, take possession of, collect, enforce, realize, sell, lease or otherwise dispose of Collateral or to institute any proceedings for such purposes. Furthermore, RBC shall have no obligation to take any steps to presen/e rights against prior parties to any Instrument or Chattel Paper, whether Collateral or proceeds and whether or not in RBC's possession and shall not be liable or accountable for failure to do so. .
(c) Debtor acknowledges that RBC may take possession of Collateral wherever it may be located and by any method permitted by law and Debtor agrees upon request from RBC to assemble and deliver possession of Collateral at such place or places as directed.
(d) Deblor agrees to be liable for and to pay all costs, charges and expenses reasonably Incurred by RBC, whether directly or for services rendered (including reasonable solicitors and auditors costs and other legal expenses), in operating Debtor's accounts, in preparing or enforcing this Security Agreement, taking and maintaining custody of, preserving, processing and disposing of Collateral and in enforcing or collecting Indebtedness and all such costs, charges and expenses shall be a first charge on the proceeds of realization, collection or disposition of Collateral and shall be secured hereby.
(e) RBC will give Debtor such notice, if any, of the date, time and place of any public sale or of the date after which any private disposition of Collateral Is to be made, as may be required by the P.P.S.A.
12. MISCELLANEOUS
(a) Debtor hereby authorizes RBC to file such financing statements, financing change statements and other documents and do such acts, matters and things (including completing and adding schedules hereto identifying Collateral or any permitted Encumbrances affecting Collateral or identifying the locations at which Debtor's business is carried on and Collateral and records relating thereto are situate) as RBC may deem appropriate to perfect on an ongoing basis and continue the Security Interest, to protect and preserve Collateral and to realize upon the Security Interest and Debtor hereby irrevocably constitutes and appoints the Manager or Acting Manager from time to time of the herein mentioned branch of RBC the true and lawful attorney of Debtor, with full power of substitution, to do any of the foregoing in the name of Debtor whenever and wherever it may be deemed necessary or expedient.
(b) Without limiting any other right of RBC, whehever Indebtedness is immediately due and payable, or RBC has the right to declare Indebtedness to be immediately due and payable (whether or not it has so declared), RBC may, in its sole discretion, set off against Indebtedness any and all amounts then owed to Debtor by RBC in any capacity, whether or not due, and
BC shall be deemed to have exercised such right of set off immediately at the time of making Its decision to do so even though any charge therefor is made or entered on RBC's records subsequent thereto.
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E-FORM 026 (03/2008)
(c) Upon Debtor's failure to perform any of Its duties hereunder, RBC may, but shall not be obligated to, perform any or all of such duties, and Debtor shall pay to RBC, forthwith upon written demand therefor, an amount equal to the expense Incurred
( 'y RBC in so doing plus interest thereon from the date such expense Is Incurred until it Is paid at the rate of 15% per annum.(d) RBC may grant extensions of time and other indulgences, take and give up security, accept compositions,
compound, compromise, settle, grant releases and discharges and otherwise deal with Debtor, debtors of Debtor, sureties and others and with Collateral and other security as RBC may see fit without prejudice to the liability of Debtor or RBC's right to hold and realize the Security Interest. Furthermore, RBC may demand, collect and sue on Collateral In either Debtor's or RBC's name, at RBC’s option, and may endorse Debtor's name on any and, all cheques, commercial paper, and any other Instruments pertaining to or constituting Collateral.
(e) No delay or omission by RBC in exercising any right or remedy hereunder or with respect to any Indebtedness shall operate as a waiver thereof or of any other right or remedy, and no single or partial exercise thereof shall preclude any other of further exercise thereof or the exercise of any other right or remedy. Furthermore, RBC may remedy any default by Debtor hereunder or with respect to any Indebtedness In any reasonable manner without waiving the default remedied and without waiving any other prior or subsequent default by Debtor. All rights and remedies of RBC granted or recognized herein are cumulative and may be exercised at any time and from time to time independently or In combination.
(f) Debtor waives protest of any Instrument constituting Collateral at any time held by RBC on which Debtor is in any way liable and, subject to Clause 11 (e) hereof, notice of any other action taken by RBC,
(g) This Security Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns, In any action brought by an assignee of this Security Agreement and the Security Interest or any part thereof to enforce any rights hereunder, Debtor shall not assert against the assignee any claim or defence which Debtor now has or hereafter may have against RBC. If more than one Debtor executes this Security Agreement the obligations of such Debtors hereunder shall be joint and several.
(h) RBC may provide any financial and other information if has about Debtor, the Security Interest and the Collateral to any one acquiring or who may acquire an interest in the Security Interest or the Collateral from the Bank or any one acting on behalf of the Bank,
(i) Save for any schedules which may be added hereto pursuant to the provisions hereof, no modification, variation or amendment of any provision of this Security Agreement shall be made except by a written agreement, executed by the parties hereto and no waiver of any provision hereof shall be effective unless in writing.
G) Subject to the requirements of Clause 11 (e) and 12 (k) hereof, whenever either party hereto Is required or entitled to notify or direct the other or to make a demand or request upon the other, such notice, direction, demand or request shall be in writing and shall be sufficiently given, in the case of RBC, if delivered to it or sent by prepaid registered mail addressed to It at its address herein set forth or as changed pursuant hereto and, in the case of Debtor, if delivered to it or if sent by prepaid registered
r —iall addressed to it at Its last address known to RBC. Either party may notify the other pursuant hereto of any change in such party's principal address to be used for the purposes hereof. ,
(k) This Security Agreement and the security afforded hereby is In addition to and not in substitution for any other security now or hereafter held by RBC, and is intended to be a continuing Security Agreement and shall remain In full force and effect until the Manager or Acting Manager from time to time of the herein mentioned branch of RBC shall actually receive written notice of its discontinuance; and notwithstanding such notice, shall remain in full force and effect thereafter until all indebtedness contracted for or created before the receipt of such notice by RBC, and any extensions or renewals thereof (whether made before or after receipt of such notice) together with Interest accruing thereon after such notice, shall be paid in full.
(l) The headings used in this Security Agreement are for convenience only and are not to be considered a part of this Security Agreement and do not In any way limit or amplify the terms and provisions of this Security Agreement.
(m) When the context so requires, the singular number shall be read as If the plural were expressed and the provisions hereof shall be read with all grammatical changes necessary dependent upon the person referred to being a male, female, firm or corporation.
(n) In the event any provision of this Security Agreement, as amended from time to time, shall be deemed invalid or void, in whole or in part, by any Court of competent Jurisdiction, the remaining terms and provisions of this Security Agreement shall remain in full force and effect.
(o) Nothing herein contained shall In any way obligate RBC to grant, continue, renew, extend time for payment of or accept anything which constitutes or would constitute Indebtedness,
(p) The Security Interest created hereby Is intended to attach when this Security Agreement is signed by Debtor and delivered to RBC.
(q) Debtor 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 "Debtor" 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 "Collateral1' thereafter owned or acquired by the amalgamated company, and (ii) shall secure the "Indebtedness" (as that term is herein defined) of each of the amalgamating companies and the amalgamated company to RBC at the time of amalgamation and any "Indebtedness" of the amalgamated company to RBC thereafter arising. The Security Interest shall attach to "Collateral" owned by each company amalgamating with Debtor, and by the amalgamated company, at the time of amalgamation, and shall attach to any "Collateral" thereafter owned or acquired by the amalgamated company when such becomes owned or Is acquired.
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E-FORM 926 (03/2008)
(r) In the event that Debtor is a body corporate, it is hereby agreed that The Limitation of Civil Rights Act of the Province of Saskatchewan, or any provision thereof, shall have no application to this Security Agreement or any agreement or Instrument
( enewing or extending or collateral to this Security Agreement. In the even that Debtor Is an agricultural corporation within the meaning of The Saskatchewan Farm Security Act, Debtor agrees with RBC that all of Part IV (other than Section 46) of that Act shall not apply to Debtor.
(s) This Security Agreement and the transactions evidenced hereby shall be governed by and construed in accordance with the laws of the province In which the herein branch of RBC is located, as those laws may from time to time be in effect, except if such branch of RBC Is located In Quebec then, this Security Agreement and the transactions evidenced hereby shall be governed by and construed In accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.
13. COPY OF AGREEMENT
(a) Debtor hereby acknowledges receipt of a copy of this Security Agreement,(b) Debtor waives Debtor's right to receive a copy of any financing statement or financing change statement registered
by RBC, or of any verification statement with respect to any financing statement or financing change statement registered by RBC. (Applies in all P.P.S.A. Provinces except Ontario)
14. Debtor represents and warrants that the following Information is accurate:
INDIVIDUAL DEBTORSURNAME (LAST NAME) FIRST NAME SECOND NAME BIRTH DATE
YEAR MONTH DAY
ADDRESS OF INDIVIDUAL DEBTOR CITY PROVINCE POSTAL CODE
SURNAME (LAST NAME) FIRST NAME SECOND NAME BIRTH DATEYEAR MONTH DAY
ADDRESS OF INDIVIDUAL DEBTOR (IF DIFFERENT FROM ABOVE) CITY PROVINCE POSTAL CODE
BUSINESS DEBTORI NAME OF BUSINESS DEBTOR
/G (OEAM) Ino,
ADDRESS OF BUSINESS DEBTOR CITY 1 PROVINCE POSTAL CODE
606 Mlddlofiold Road, Unit 1 Toronto OntarioM-IVSBg
TRADE NAME (IF APPLICABLE)TRADE NAME OF DEBTOR
PRINCIPAL ADDRESS (IF DIFFERENT FROM ABOVE) CITY PROVINCE POSTAL CODE
IN WITNESS WHEREOF Debtor has executed this Security Agreement this day of September, 2014.
AVG (OEAM) INC.
Per:
/ITNESSSeal )
WITNESS
Page 5 of 9
E-FORM 926 (03/2008)
(' JRANCH ADDRESS
Royal Bank of Canada, Business Service Centre, 36 York Mills Road, 4th Floor, Toronto, Ontario, M2P 0A4
Page 6 of 9
E-FORM 926 (03/2006)
SCHEDULE“A”
(ENCUMBRANCES AFFECTING COLLATERAL)
Page 7 of 9
AVG (OEAM) INC. SCHEDULE “A”
Outstanding Registrations under Personal Property Security Act (Ontario) (“PPSA”)
1. Debtor; AVG (OEAM) Inc,Secured Party: RCAP Leasing Inc.File Number; 693781524Registration Number: 20140213 1032 8077 5598 Registered Period: 5 yearsCollateral Classification: Equipment, Accounts, Other Collateral Description: Copier Equipment
2. Debtor; AVG (OEAM) Inc.Secured Party: BDC Capital Inc,File Number: 686312442Registration Number: 20130424 0933 1590 9218 Registration Period: 8 yearsCollateral Classification: Inventory, Equipment, Accounts, Other and Motor Vehicle IncludedCollateral Description: None
3. Debtor: AVG (OEAM) Inc,Secured Party: Toyota Credit Canada Inc,File Number: 683076681Registration Number: 20121123 1049 1529 7567Registration Period: 4 yearsCollateral Classification: Consumer Goods, Equipment, Other and Motor Vehicle IncludedCollateral Description: 2013 Lexus Model GS340 V.I.N, JTHCE1BL7D5011578
4. Debtor: AVG (OEAM) Inc.Secured Party: BDC Capital Inc.File Number: 676382823Registration Number: 20120222 1631 1590 6603, amended by 20120323 1144 1590 8155 Registration Period: 7 yeai-sCollateral Classification: Inventory, Equipment, Accounts, Other and Motor Vehicle IncludedCollateral Description: None
2
5. Debtor: AVG (OEAM) Inc.Secured Party: Don Valley North Automotive Inc.File Number: 672676524Registration Number: 20110902 1457 4061 2915Registration Period: 4 year'sCollateral Classification: Consumer Goods, Motor Vehicle IncludedCollateral Description: 2010 Lexus Model LS460AWD V.I.N. JTHCL1BFX5005412
6. Debtor: AVG (OEAM) Inc.Seemed Party: Ayaz Madat Somani File Number: 601952076Registration Number: 20031219 1236 1862 8565 amended by 20081105 0932 1515 1711,20120314 1130 1793 2000, 20120507 1145 1590 0628,20121026 1528 1793 2487, 20131017 1442 1783 8327 (renewal)Registration Period: 10 yearsCollateral Classification: Inventory, Equipment, Accounts, Other, Motor Vehicle IncludedCollateral Description: None
E-FORM 926 (03/2008)
SCHEDULE“B”
( , Locations of Debtor’s Business Operations
605 Middlefield Road, Unit 1
Toronto, Ontario
M1V5B9
2. Locations of Records relating to Collateral (If different from 1. above)
(
3. Locations of Collateral (if different from 1. above)
(
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E-FORM 926 (03/2008)
SCHEDULE“C”(DESCRIPTION OF INTANGIBLES)
Date;
(
client Initial
3167198,1Page 9 of 8
TAB 3(f)
SECURITY AGREEMENT(INVENTORY)
E-FORM 926 (03/2008) RETENTION-M
SECURITY INTEREST
(a) For value received, the undersigned ("Debtor"), hereby grants to ROYAL BANK OF CANADA ("RBC"), a security interest (the "Security Interest") in the following:
(i) all present and after owned or acquired Inventory of Debtor of whatever kind and wherever situate, and
(II) all Proceeds and renewals of the foregoing, and all accretions thereto and substitutions therefor;
(and including such inventory as may be returned to or repossessed by Debtor) and In all proceeds thereof and In all of the following now owned or hereafter owned or acquired by or on behalf of Debtor, namely:
all lists, records and files relating to Debtor's customers^ cllents, and patjents,_.______ ______ ______all deeds.TlocurfTeflts; writings) papers and books relating to or being records of Inventory or its proceeds or by which Inventory or the proceeds are or may hereafter be secured, made payable, evidenced or acknowledged, including Securities, Chattel Paper, Instruments and Documents of Title, and all contractual rights, Insurance claims, patents, trademarks, copyrights and other Industrial property relating to Inventory, and
(Iv) all property described in Schedule "C” or any schedule now or hereafter annexed hereto;
all of the foregoing being hereinafter collectively called "Collateral."
(b) Unless otherwise limited herein, the terms "Chattel Paper", "Document of Title", "Instrument", "Security", "Proceeds", "inventory", “Accession", "Money", "Financing Statement" and "Financing Change Statement" whenever used herein shall be interpreted pursuant to their respective meanings when used In The Personal Property Security Act of the province referred to In clause 12(s), as amended from time to time, which Act, Including amendments thereto and any Act substituted therefor and amendments thereto Is herein referred to as the "P.P.S.A.". Provided always that the term "Inventory" when used herein shall include livestock and the young thereof after conception and crops that become such within one year of execution of this Security Agreement. Any reference herein to "Collateral" shall, unless the context otherwise requires, be deemed a reference *o "Collateral or any part thereof.
2. INDEBTEDNESS SECURED
The Security Interest granted by Debtor to RBC secures payment and performance of any and all obligations, indebtedness and liability of Debtor to RBC (including interest thereon), present or future, direct or indirect, absolute or contingent, matured or not, extended or renewed, wheresoever and howsoever incurred and any ultimate unpaid balance thereof and whether the same is from time to time reduced and thereafter increased or entirely extinguished and thereafter incurred again and whether Debtor be bound alone or with another or others and whether as principal or surety (hereinafter collectively called the "Indebtedness"). If the Security interest in the Collateral is not sufficient, in the event of default, to satisfy all Indebtedness of the Debtor, the Debtor acknowledges and agrees that Debtor shall continue to be liable for any Indebtedness remaining outstanding and RBC shall be entitled to pursue full payment thereof.
3. REPRESENTATIONS AND WARRANTIES OF DEBTOR
Debtor represents and warrants and, so long as this Security Agreement remains in effect, shall be deemed to continuously represent and warrant that:
(a) the Collateral is genuine and owned by Debtor free of all security interests, mortgages, liens, claims, charges or other encumbrances or other adverse claims or interests (hereinafter collectively called "Encumbrances") save for the Security Interest and those Encumbrances shown on Schedule "A" or hereafter approved in writing by RBC prior to their creation or assumption;
(b) the Debtor is authorized to enter into this Security Agreement;(c) each debt, Chattel Paper and Instrument constituting proceeds of Inventory is enforceable in accordance with Its
terms against the party obligated to pay the same (the "Accounl Debtor"); and(d) the locations specified in Schedule "B” are accurate and complete save for Inventory In transit to such locations or
Inventory on lease or consignment.
4. COVENANTS OF DEBTOR
So long as this Security Agreement remains in effect, Debtor covenants and agrees:
(a) to defend Collateral against the claims and demands of all other parties claiming the same or an Interest therein ;cept, as to Inventory, purchasers and lessees thereof in the ordinary course of Debtor's business; to keep Collateral free from all
Encumbrances, except for the Security Interest and those shown on Schedule "A" or hereafter approved in writing by RBC prior to their creation or assumption, and not to sell, exchange, transfer, assign, lease or otherwise dispose of Collateral or any interest therein without the prior written consent of RBC and, in any event, Debtor shall deposit all Money received from any disposition of Collateral with RBC with the right, until default to sell or lease Inventory and use the proceeds- in the ordinary course of Debtor's business;
(b) to notify RBC promptly of:
Page 1 of 9
(i) any change in the information contained herein or in the Schedules hereto relating to Debtor, Debtor's business or Collateral,
(II) the details of any significant acquisition of Collateral,
(III) the details of any claims or litigation affecting Debtor or Collateral,
(Iv) any loss of or damage to Collateral,
(v) any default by any Account Debtor in payment or other performance of his/her obligations with respect to Collateral, and
__ (vi)_ the _return_to or reposse.sslon_by Debtor of Collateral; — —----- — - -• - — - — — - -
(c) to keep the Collateral In good order and condition for sale, lease or use and not to use it or any part thereof in violation of the provisions of this Security Agreement or any other agreement relating to the Inventory or any policy insuring the Inventory or any applicable statute, law, by-law, rule, regulation or ordinance;
(d) to do, execute, acknowledge and deliver such financing statements, financing change statements and further assignments, transfers, documents, acts, matters and things (including further schedules hereto) as may be reasonably requested by RBC of or with respect to Collateral In order to give effect to these presents and to pay all costs for searches and filings in connection therewith;
(e) to pay all taxes, rates, levies, assessments and other charges of every nature which may be lawfully levied, assessed or imposed against or in respect of Debtor or Collateral as and when the same become due and payable
(f) to insure the collateral in such amounts and against such risks as would customarily be insured by a prudent owner of similar Collateral and in such additional amounts and against such additional risks as RBC may from time to time direct, with loss payable to RBC and Debtor, as insureds, as their respective interests may appear, and to pay all premiums therefor and deliver copies of policies and evidence of renewal to RBC on request;
(g) to prevent Collateral, save Inventory sold or leased as permitted hereby, from being or becoming an accession to other property not covered by this Security Agreement;
(h) to carry on and conduct the business of Debtor In a proper and efficient manner and so as to protect and preserve the Collateral and to keep, in accordance with generally accepted accounting principles, consistently applied, proper books of
ccount for Debtor's business as well as accurate and complete records concerning Collateral, and mark any and all such records md Collateral at RBC's request so as to indicate the Security Interest; and
(1). to deliver to RBC from time to time promptly upon request;
(I) any Documents of Title, Instruments, Securities and Chattel Paper constituting, representing or relating to Collateral,
(II) all books of account and all records, ledgers, reports, correspondence, schedules, documents, statements, lis,ts and other writings relating to Collateral for the purpose of inspecting, auditing or copying the same,
(Hi) all financial statements prepared by or for Debtor regarding Debtor's business,
(iv) all policies and certificates of Insurance relating to Collateral, and
(v) such Information concerning Collateral, the Debtor and Debtor's business and affairs as RBC may reasonably request.
5. USE AND VERIFICATION OF COLLATERAL
Subject to compliance with Debtor's covenants contained herein and Clause 7 hereof, Debtor may, until default, possess, collect, use and enjoy and deal with the Collateral in the ordinary course of Debtor's business in any manner not inconsistent with the provisions hereof; provided always that RBC shall have the right at any time and from time to time to verify the existence and state of the Collateral in any manner RBC may consider appropriate and Debtor agrees to furnish all assistance and Information and to perform all such acts as RBC may reasonably request in connection therewith and, for such purpose, to grant to RBC or its agents access to all places where Collateral may be located and to all premises occupied by Debtor.
6. SECURITIES
If Collateral at any time includes Securities, Debtor authorizes RBC to transfer the same or any part thereof into its own name or that of its nominee(s) so that RBC or Its nominee(s) may appear of record as the sole owner thereof; provided that, until
>fault, RBC shall deliver promptly to Debtor all notices or other communications received by it or its nominee(s) as such registered owner and, upon demand and receipt of payment of any necessary expenses thereof, shall Issue to Debtor or its order a proxy to vote and take all action with respect to such Securities. After default, Debtor waives all rights to receive any notices or communications received by RBC or its nomlnee(s) as such registered owner and agrees that no proxy issued by RBC to Debtor or its order as aforesaid shall thereafter be effective,
E-FORM 926 (03/2006)
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E-FORM 926 (03/2008)
7. COLLECTION OF DEBTS
/ Before or after default under this Security Agreement, RBC may notify all or any Account Debtors of the Security Interest' .<nd may also direct such Account Debtors to make all payments on Collateral to RBC, Debtor acknowledges that any payments
on or other proceeds of Collateral received by Debtor from Account Debtors, whether before or after notification of this Security Interest to Account Debtors and whether before or after default under this Security Agreement, shall be received and held by Debtor in trust for RBC and shall be turned over to RBC upon request.
8. DISPOSITION OF MONEY
Subject to any applicable requirements of the P.P.S.A,, all Money collected or received by RBC pursuant to or In exercise of any right it possesses with respect to.Collateral shall be applied on account of Indebtedness in such manner as RBC deems best or, at the option of RBC, may be held unappropriated in a collateral account or released to Debtor, all without prejudice to the liability of Debtor or the rights of RBC hereunder, and any surplus shall be accounted for as required by law^_______ __ __ _
' 9. EVENTS OF DEFAULT
The happening of any of the following events or conditions shall constitute default hereunder which is herein referred to as"default":
(a) the nonpayment when due, whether by acceleration or otherwise, of any principal or Interest forming part of Indebtedness or the failure of Debtor to observe or perform any obligation, covenant, term, provision or condition contained in this Security Agreement or any other agreement between Debtor and RBC;
(b) the death of or a declaration of incompetency by a court of competent jurisdiction with respect to Debtor, if an individual;
(c) the bankruptcy or Insolvency of Debtor; the filing against Debtor of a petition In bankruptcy; the making of an assignment for the benefit of creditors by Debtor; the appointment of a receiver or trustee for Debtor or for any assets of Debtor; or the institution by or against Debtor of any other type of insolvency proceeding under the Bankruptcy and Insolvency Act or otherwise;
(d) the institution by or against Debtor of any formal or Informal proceeding for the dissolution or liquidation of, settlement of claims against or winding up of affairs of Debtor;
(e) if any Encumbrance affecting Collateral becomes enforceable against Collateral;(f) if Debtor ceases or threatens to cease to carry on business or makes or agrees to make a bulk sale of assets
without complying with applicable law or commits or threatens to commit an act of bankruptcy;(g) If any execution, sequestration, extent or other process of any court becomes enforceable against Debtor or If a
distress or analogous process is levied upon the assets of Debtor or any part thereof;, (h) If any certificate, statement, representation, warranty or audit report heretofore or hereafter furnished by or on behalfV f Debtor pursuant to or In connection with this Security Agreement, or otherwise (including, without limitation, the representations
and warranties contained herein) or as an inducement to RBC to extend any credit to or to enter into this or any other agreement with Debtor, proves to have been false in any material respect at the time as of which the facts therein set forth were stated or certified, or proves to have omitted any substantial contingent or unliquidated liability or claim against Debtor; or if upon the date of execution of this Security Agreement, there shall have been any material adverse change in any of the facts disclosed by any such certificate, representation, statement, warranty or audit report, which change shall not have been disclosed to RBC at or prior to the time of such execution,
10. ACCELERATION
RBC, in its sole discretion, may declare all or any part of the Indebtedness which is not by its terms payable on demand to be immediately due and payable, without demand or notice of any kind, in the event of default, or, if RBC, considers itself Insecure or that the collateral is in jeopardy, The provisions of this clause are not intended in any way to affect any rights of RBC with respect to any Indebtedness which may now or hereafter be payable on demand.
11. REMEDIES
(a) Upon default, RBC may appoint or reappoint by Instrument In writing, any person or persons, whether an officer or officers or an employee or employees of RBC or not, to be a receiver or receivers (hereinafter called a "Receiver": which term When used herein shall include a receiver and manager) of Collateral and may remove any Receiver so appointed and appoint another in his/her stead, Any such Receiver shall, so far as concerns responsibility for his/her acts, be deemed the agent of Debtor and not RBC, and RBC shall not be in any way responsible for any misconduct, negligence, or non-feasance on tne part of any such Receiver, his/her servants, agents or employees. Subject to the provisions of the instrument appointing him/her, any such Receiver shall have power to take possession of Collateral, to preserve Collateral or its value, to carry on or concur in carrying on all or any part of the business of Debtor and to sell, lease or otherwise dispose of or concur in selling, leasing or otherwise disposing of Collateral, To facilitate the foregoing powers, any such Receiver may, to the exclusion of all others, including Debtor, enter upon, use and occupy all premises owned or occupied by Debtor wherein Collateral may be situate, maintain Collateral upon such premises, borrow money on a secured or unsecured basis and use Collateral directly in carrying on Debtor's business or as security for loans or advances to enable the Receiver to carry on Debtor's business or otherwise, as such Receiver shall, in its discretion, determine. Except as may be otherwise directed by RBC, all Money received from time to time by such Receiver In carrying out his/her appointment shall be received in trust for and paid over to RBC. Every such Receiver may, In the discretion of RBC, be vested with all or any of the rights and powers of RBC.
(b) Upon default, RBC may, either directly or through its agents or nominees, exercise any or all of the powers and rights given to a Receiver by virtue of the foregoing sub-clause (a),
i (c) RBC may take possession of, collect, demand, sue on, enforce, recover and receive Collateral and give valid and' ,/nding receipts and discharges therefor and in respect thereof and, upon default, RBC may sell, lease or otherwise dispose of
Collateral in such manner, at such time or times and place or places, for such consideration and upon such terms and conditions as to RBC may seem reasonable.
(d) In addition to those rights granted herein and In any other agreement now or hereafter in effect between Debtor and RBC and in addition to any other rights RBC may have at law or in equity, RBC shall have, both before and after default, all rights and remedies of a secured party under the P.P.S.A, Provided always, that RBC shall not be liable or accountable for any failure to exercise its remedies, take possession of, collect, enforce, realize, sell, lease or otherwise dispose of Collateral or to institute any proceedings for such purposes. Furthermore, RBC shall have no obligation to take any steps to' preserve rights against prior
Page 3 of 9
parties to any Instrument or Chattel Paper, whether Collateral or proceeds and whether or not In RBC's possession and shall not be liable or accountable for failure to do so,
(e) Debtor acknowledges that RBC or any Receiver appointed by it may take possession of Collateral wherever it may re located and by any method permitted by law and Debtor agrees upon request from RBC or any such Receiver to assemble and
deliver possession of Collateral at such place or places as directed,(f) Debtor agrees to be liable for and to pay all costs, charges and expenses reasonably incurred by RBC or any
Receiver appointed by it, whether directly or for services rendered (Including reasonable solicitors and auditors costs and other legal expenses and Receiver remuneration), In operating Debtor's accounts, in preparing or enforcing this Security Agreement, taking and maintaining custody of; preserving, repairing, processing, preparing for'disposition and disposing of Collateral and in enforcing or collecting Indebtedness and all such costs, charges and expenses together with any amounts owing as a result of any borrowing by RBC or any Receiver appointed by it, as permitted hereby, shall be a first charge on the proceeds of realization, collection or disposition of Collateral and shall be secured hereby.
(g) RBC will give Debtor such notice, if any, of the date, time and place of any public-sale or of the date after which any private disposition of collateral Is to be made, as may be required by the P.P.S.A,
_12_____MISCELLANEOUS------------------ - ------------------------------------------------------ ------------ ------------ ---------------------
(a) Debtor hereby authorizes RBC to file such financing statements, financing change statements and other documents and do such acts, matters and things (including completing and adding schedules hereto identifying Collateral or any permitted Encumbrances affecting Collateral or Identifying the locations at which Debtor's business is carried on and Collateral and records relating thereto are situate) as RBC may deem appropriate to perfect on an ongoing basis and continue the Security Interest, to protect and preserve Collateral and to realize upon the Security Interest and Debtor hereby irrevocably constitutes and appoints the Manager or Acting Manager from time to time of the herein mentioned branch of RBC the true and lawful attorney of Debtor, with full power of substitution, to do any of the foregoing in the name of Debtor whenever and,wherever it may be deemed necessary or expedient,
(b) Without limiting any other right of RBC, whenever Indebtedness Is immediately due and payable or RBC has the right to declare Indebtedness to be immediately due and payable (whether or not it has so declared), RBC may, In its sole discretion, set off against Indebtedness any and all amounts then owed to Debtor by RBC in any capacity, whether or not due, and RBC shall be deemed to have exercised such right of set off immediately at the time of making its decision to do so even though any charge therefor is made or entered on RBC's records subsequent thereto,
(c) Upon Debtor's failure to perform any of Its duties hereunder, RBC may, but shall not be obligated to, perform any or all of such duties, and Debtor shall pay to RBC, forthwith upon written demand therefor, an amount equal to the expense incurred by RBC in so doing plus interest thereon from the date such expense is Incurred until It is paid at the rate of 15% per annum.
(d) RBC may grant extensions of time and other indulgences, take and give up security, accept compositions, compound, compromise, settle, grant releases and discharges and otherwise deal with Debtor, debtors of Debtor, sureties and others and with Collateral and other security as RBC may see fit without prejudice to the liability of Debtor or RBC's right to hold ■>nd realize the Security Interest. Furthermore, RBC may demand, collect and sue on Collateral in either Debtor's or RBC's name,
t RBC's option, and may endorse Debtor's name on any and all cheques, commercial paper, arid any other Instruments pertaining to or constituting Collateral.
(e) No delay or omission by RBC in exercising any right or remedy hereunder or with respect to any Indebtedness shall operate as a waiver thereof or of any other right or remedy, and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy. Furthermore, RBC may remedy any default by Debtor hereunder or with respect to any Indebtedness In any reasonable manner without waiving the default remedied and without waiving any other prior or subsequent default by Debtor, All rights and remedies of RBC granted or recognized herein are cumulative and may be exercised at any time and from time to time independently or In combination.
(f) Debtor waives protest of any Instrument constituting Collateral at any time held by RBC on which Debtor is In any way liable and, subject to Clause 11 (g) hereof, notice of any other action taken by RBC,
(g) This Security Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. In any action brought by an assignee of this Security Agreement and the Security Interest or any part thereof to enforce any rights hereunder, Debtor shall not assert against the assignee any claim or defence which Debtor now has or hereafter may have against RBC. If more than one Debtor executes this Security Agreement the obligations of such Debtors hereunder shall be joint and several.
(h) RBC may provide any financial and other information it has about Debtor, the Security Interest and the Collateral to any one acquiring or who may acquire an interest in the Security Interest or the Collateral from the Bank or any one acting on behalf of the Bank.
(I) Save for any schedules which may be added hereto pursuant to the provisions hereof, no modification, variation or amendment of any provision of this Security Agreement shall be made except by a written agreement, executed by the parties hereto and no waiver of any provision hereof shall be effective unless in writing.
(j) Subject to the requirements of Clause 11 (g) and 12 (k) hereof, whenever either party hereto is required or entitled to notify or direct the other or to make a demand or request upon tne other, such notice, direction, demand or request shall be in writing and shall be sufficiently given, in the case of RBC, If delivered to It or sent by prepaid registered mail addressed to it at its address herein set forth or as changed pursuant hereto and, in the case of Debtor, if delivered to it or if sent by prepaid registered mail addressed to it at its last address known to RBC. Either party may notify the other pursuant hereto of any change in such party's principal address to be used for the purposes hereof.
(k) This Security Agreement and the security afforded hereby is In addition to and not in substitution for any other security now or hereafter held by RBC, and is intended to be a continuing Security Agreement and shall remain in full force and effect until the Manager or Acting Manager from time to time of the herein mentioned branch of RBC shall actually receive written notice of its discontinuance; and, notwithstanding such notice, shall remain in full force and effect thereafter until all Indebtedness contracted for or created before the receipt of such notice by RBC, and any extensions or renewals thereof (whether made before or after receipt of such notice) together with interest accruing thereon after such notice, shall be paid in full.
(l) The headings used in this Security Agreement are for convenience only and are not to be considered a part of this ecurlty Agreement and do not in any way limit or amplify the terms and provisions of this Security Agreement.
(m) When the context so requires, the singular number shall be read as if the plural were-expressed and the provisions hereof shall be read with all grammatical changes necessary dependent upon the person referred to being a male, female, firm or corporation.
(n) In the event any provision of this Security Agreement, as amended from time to time, shall be deemed invalid or void, in whole or in part, by any Court of competent jurisdiction, the remaining terms and provisions of this Security Agreement shall remain in full force and effect.
6-FORM 926 (03/2008)
Page 4 of 9
E-FORM 926 (03/2008)
(o) Nothing herein contained shall in any way obligate RBC to grant, continue, renew, extend time for payment of or accept anything which constitutes or would constitute Indebtedness,
/ (p) The Security Interest created hereby is intended to attach when this Security Agreement Is signed by Debtor and' .ellvered to RBC,
(q) Debtor 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 "Debtor" when used herein shall apply to each of the amalgamating companies and to the amalgamated company, such that the Security Interest granted hereby (i) snail 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 'Indebtedness" (as that term Is herein defined) of each of the amalgamating companies and the amalgamated company to RBC thereafter arising. The Security Interest shall attach to "Collateral" owned by each company amalgamating with Debtor, and by the amalgamated company, at the time of amalgamation, and shall attach to any "Collateral" thereafter owned or acquired by the amalgamated company when such becomes owned or Is acquired,
(r) In the event that Debtor Is a body corporate, it Is hereby agreed that the Limitation of Civil Rights Act of the Province of Saskatchewan, or any provision thereof, shall have no application to this Security Agreement aany agreement.or instrument-
..renewing-or-extendlng-or-Gollateral-to-thls~Security-AgreementrdiT the evenTtbarDebtof Is ah agricultural corporation within the meaning of The Saskatchewan Farm Security Act, Debtor agrees with RBC that all of Part IV (other than Section 46) of that Act shall not apply to Debtor.
(s) This Security Agreement and the transactions evidenced hereby shall be governed by and construed In accordance with the laws of the province in which the herein branch of RBC Is located, as those laws may from time to time be in effect, except If such branch of RBC is located in Quebec then, this Security Agreement and the transactions evidenced hereby shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein,
13. COPY OF AGREEMENT
(a) Debtor hereby acknowledges receipt of a copy of this Security Agreement.(b) Debtor waives Debtor's right to receive a copy of any financing statement or financing change statement registered
by RBC or of any verification statement with respect to any financing statement or financing change statement registered by RBC, (Applies in all P.P.S.A. Provinces except Ontario). .
14. Debtor represents and warrants that the following Information is accurate:
INDIVIDUAL DEBTORSURNAME (LAST NAME) FIRST NAME SECOND NAME BIRTH DATE
YEAR MONTH DAY
‘DRESS OF INDIVIDUAL DEBTOR CITY PROVINCE POSTAL CODE
SURNAME (LAST NAME) FIRST NAME SECOND NAME BIRTH DATEYEAR MONTH DAY
ADDRESS OF INDIVIDUAL DEBTOR (IF DIFFERENT FROM ABOVE) CITY PROVINCE POSTAL CODE
BUSINESS DEBTORNAME OF BUSINESS DEBTORAVG (OEAM) Inc,
ADDRESS OF BUSINESS DEBTOR CITY PROVINCE ' POSTAL CODE
606 Mlddlefleld Road, Unit 1 Toronto OntarioM1V 6B9
TRADE NAME (IF APPLICABLE)TRADE NAME OF DEBTOR
PRINCIPAL ADDRESS (IF DIFFERENT FROM ABOVE) CITY PROVINCE POSTAL CODE
IN WITNESS WHEREOF Debtor has executed this Security Agreement this (A day of September, 2014.
AVG (OEAM) INC.
Page 5 of 9
E-FORM 928 (03/2008)
I ,_________' WITNESS
Seal j
WITNESSSeal j
BRANCH ADDRESS_______________________ . ______________ ______
Royal Bank of Canada, Business Seivice Centre, 36 York Mills Road, 4lh Floor, Toronto, Ontario-, M2P 0A4
Page 6 of 9
E-FORM 826 (03/2008)
SCHEDULE“A”
(ENCUMBRANCES AFFECTING COLLATERAL)
"Permitted Encumbrances" as defined In the Credit Agreement dated between RBC and the Debtor.
Page 7 of 9
AVG (OEAM) INC. SCHEDULE“A”
Outstanding Registrations under Personal Property Security Act (Ontario) (“PPSA”)
-1. . Debtor; AVG (OEAM)-Ine.- ------........ ........~ •-------------- " ' ' “Secured Party: RCAP Leasing Inc.File Number: 693781524Registration Number: 20140213 1032 8077 5598Registered Period: 5 yearsCollateral Classification: Equipment, Accounts, Other Collateral Description: Copier Equipment
2. Debtor: AVG (OEAM) Inc.Secured Party: BDC Capital Inc.File Number: 686312442Registration Number: 20130424 0933 1590 9218 Registration Period: 8 yearsCollateral Classification: Inventory, Equipment, Accounts, Other and Motor Vehicle IncludedCollateral Description: None
3. Debtor: AVG (OEAM) Inc.Secured Party: Toyota Credit Canada Inc.File Number: 683076681Registration Number: 20121123 1049 1529 7567Registration Period: 4 yearsCollateral Classification: Consumer Goods, Equipment, Other and Motor Vehicle IncludedCollateral Description: 2013 Lexus Model GS340 V.I.N. JTHCE1BL7D5011578
4. Debtor: AVG (OEAM) Inc.Secured Party: BDC Capital Inc.File Number: 676382823Registration Number: 20120222 1631 1590 6603, amended by 20120323 1144 1590 8155 Registration Period: 7 yearsCollateral Classification: Inventory, Equipment, Accounts, Other and Motor Vehicle IncludedCollateral Description: None
2
5. Debtor: AVG (OEAM) Inc.Secured Party: Don Valley North Automotive Inc.File Number: 672676524Registration Number: 20110902 1457 4061 2915Registration Period: 4 yearsCollateraLClassification: Consumer-Goods,- Motor Vehicle Included'Collateral Description: 2010 Lexus Model LS460AWD V.I.N. JTHCL1BFX5005412
6. Debtor: AVG (OEAM) Inc.Seemed Party: Ayaz Madat Somani File Number: 601952076Registration Number: 20031219 1236 1862 8565 amended by 20081105 0932 1515 1711, 20120314 1130 1793 2000, 20120507 1145 1590 0628, 20121026 1528 1793 2487, 20131017 1442 1783 8327 (renewal)Registration Period: 10 yearsCollateral Classification: Inventory, Equipment, Accounts, Other, Motor Vehicle IncludedCollateral Description: None
E-FORM 926 (03/2000)
SCHEDULE “B”
Locations of Debtor’s Business Operations
605 Middlefield Road, Unit 1
Toronto, Ontario
M1V5B9
2, Locations of Records relating to Collateral (if different from 1. above)
3. Locations of Collateral (if different from 1. above)
Page 8 of 9
SCHEDULE“C”(DESCRIPTION OF INVENTORY)
E-FORM 926 (03/2006)
Date;
client Initial
3167124.3
Page 9 of 9
TAB 3(g)
RUN NUMBER : 038PROVINCE OF ONTARIO
MINISTRY OF GOVERNMENT SERVICES REPORT i: PSSR060RUN DATE : 2019/02/07 PERSONAL PROPERTY SECURITY REGISTRATION SYSTEM PAGE i 1ID ;: 20190207185100.35 ENQUIRY RESPONSE i( 5378)
CERTIFICATE
THIS IS TO CERTIFY THAT A SEARCH HAS BEEN MADE IN THE RECORDS OF THE CENTRAL OFFICE OF THE PERSONAL PROPERTY SECURITY REGISTRATION SYSTEM IN RESPECT OF THE FOLLOWING:
TYPE OF SEARCH : BUSINESS DEBTOR
SEARCH CONDUCTED ON : AVG (OEAM) INC.
FILE CURRENCY : 06 FEB 2019
ENQUIRY NUMBER 20190207185100.35 CONTAINS 38 PAGE(S) / 12 FAMILY (IES) .
THE SEARCH RESULTS MAY INDICATE THAT THERE ARE SOME REGISTRATIONS WHICH SET OUT A BUSINESS DEBTOR NAME WHICH IS SIMILAR TO THE NAME IN WHICH YOUR ENQUIRY WAS MADE. IF YOU DETERMINE THAT THERE ARE OTHER SIMILAR BUSINESS DEBTOR NAMES, YOU MAY REQUEST THAT ADDITIONAL ENQUIRIES BE MADE AGAINST THOSE NAMES.
AIRD & BERLIS LLP ATTN: SHANNON MORRIS HOLD FOR PICK UP TORONTO ON M5J2T9
CERTIFIED BY/CERTIFIEES PAR
REGISTRAR OF 'PERSONAL PROPERTY SECURITY/ LE REGISTRATEURDES sOretEs mobiliEres
(crfj4 11/2017)
CONTINUED
Ontario
PROVINCE OP ONTARIORUN NUMBER : 038 MINISTRY OF GOVERNMENT SERVICESRUN DATE : 2019/02/07 PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMID : 2019020718S100.35 ENQUIRY RESPONSE
CERTIFICATE"Vi'l.. oj.SEARCH CONDUCTED ON PILE CURRENCY
:i BUSINESS DEBTOR AVG (OEAM) INC. 06FEB 2019
00
iiliiiiiiiiB
•••lv''7397'/i:ii9'6:2';'..
REPORT : PSSR060PAGE : 2
( 5379)
CAUTIONiiliwov.;
01
0203
04
0506
07
..................|||SS3S5VS!iliiiia!iiiii!i!i!i!i!!NO. OF RAGES ’ , SCHEJPU001 1 ...................... 04.....
|i;PgjB!I||jp!NAME
iiiDKHTOR;:)!
liUHINlSS N-T-iF
:"AI
'pttm OF B±|^H ’
HI-JINI^C! N-MK
ADDRESS
AVG OEAM INC.
605 MIDDLEFIELD RD
FIRST GIVEN NAME
20180525 1154 1532 0212
INITIAL SURNAME
PPSA
SCARBOROUGH
INITIAL,: 1I'liiiiiiiiiiililllli’llliiiiiliiiii !iii
surname;:
OwTArIO corporation no.ON MlV 5B9
ONTARIO .CORPORATION NO.
08 SECURED PARTY / MEN 'I,MM ANT
09
10
1112
ADDRESS
TOYOTA CREDIT CANADA INC.
80 MICRO COURT MARKHAM ON L3R 9Z5
:;;COKti«TERSj:r::iCe«SSIF®3ATI0N:!;i1i : igsiiillaif""'....! GOOD'S INVENTORY
S!ji|iYpiAR SMAKE; 'i; MOTOR,. ,,, "'!''20l8 ’LEXUS
. 'vpfr||Sfeqjp
'I'S O'l'HFPiiiyiiiiiiSiiii:;!;!;!
MOTOpiijiMEHICLEmIIT'I.UDM)
! AMOUN'Kiii DAT! or NO FIXED1=’,T C« MA'I'UP n Y DAT-
MODEL'lcBOoh
V+I.N+liiafiHaiAYO JA0 0 014 9
13 ,,,,GENERAL..14 ||i jiqibjbEiA!iiS!i|iB^(’H:ji:|!;':l15 "A^fesgSR^E^llN^
16 REGISTERING AGENT
1? jiiiiii’iiiiHiiliiiiiiiii ii ADDRESS-:
D + H LIMITED PARTNERSHIP
2 ROBERT SPECK PARKWAY, 15TH FLOOR MISSISSAUGA ON L4J 1H8
:■ FOR. .F'lURTHER ■: iI.NFORMA.TIONji.i.^t^ACTioiTiHEaigRSIWEP.;: FARM’Y K;:;AAA:;:;:;:::.
CONTINUED.
CERTIFIED BY/CERTIFIEES PAR
REGISTRAR OF PERSONAL PROPERTY SECURITY/ LE REGISTRATEUR DES sORETES MOBILIRRES
(crjlft 11/2017)
.y rz>
{S' Ontario
RUN NUMBER : 038RUN DATE : 2019/02/07ID s 20190207185100.35
OP twiJi'N
FITUE CURRENCV
PROVINCE OF ONTARIOMINISTRY OF GOVERNMENT SERVICES
PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMENQUIRY RESPONSE
CERTIFICATE
REPORTPAGE
BUSINESS DEBTOR AVG (OEAM) INC. 06FEB 2019
SHKB HI; , HJMJC lljfi CH/'rJill': / (IIAI.HI'. KTA'I'I,MU.')'
01<'-Ori'IOM TOT-'.I. HOTOkFUSING "NO. OF PAGKS SC
001'liBlIipHERii
222324
HEFJ4R13NCRDEBTOR fI’ltftfclSFBttOR
MOTOR VBHlOUE REOtSTRATlOM RBGtSTHREDSCH BOOIjT? TIOMBRR ONOT5R
1............. 1......... 20TB073 2 0940 3'.S32 04fi7...............739744902
RUMKWAt;: r )HR1 I "IEAOBtiliiAlyRitNDElipi;!): . 1 i . j m.
1 A At'lEMDMEMTilNI.TIATi! ilSURNKMElip
liURl'NKGG :NAMR:! AVG OEAM INC.
OTHER CRiWGgpS S II;DEBTOR NAME CHANGE
Description
2526272802/ .jPATp/jt/pp^IR^S'!,,05 , O^pR/ .S'i’‘. G ....
* ,Rf MSKUhBK i-'US l tJiPKS N'T-II03/0604/07 iilADDRESSi:;
j,.FpRST iGIVEN NAME
AVG (OEAM) INC.
605 MIDDLEFIELD RD
•:-:ii:N:J:ll!JiAU ..SURNAME:,
SCARBOROUGHONTARIO.,.,CORPORATION,.,NO,
' ' ’ ON 11 M1V 5B9
PSSR0603
5380)
29
0809
10111213141516 17
ASSIGNOR,,,SECURED,,, 15AR'i;y./.l,ii.fc,N, ,QI,A J.MANT-/ASSIGNEE...................
ADDRESSjB:’:,a3pIi^l!EKAp,,,,(N..ASSlE,I(3M‘IONfr»fe”*''ivl.li'. .............. ,..„W, , ,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, MOT,OR VEHICLE , ,,,, ,,,,,,,,,,,,,,,,,,, DATE OF, ,,, , NO FIXED, , , ,,
’ GOODS INVENTORif EGOIPMSW ’ACGOTN)psl!'OTipii lll'sfeiPDBD ■' 'aMOUW lil>iMA|TORW loR''1, 'MATURITY DATE ’ ’ ’i!iKlli“fiii:iii:ii33i;'.... ...... ..... .......................... ...xass5SSili5KSiilili:!:s5KilSii'K'ii;’Ki:':':i:'ilil!......................... ..... .
,i,MO,TO!R,|,|,i,i,i,i .:.|VNH:IG3*N::': I'.hBNteR’A’t.'!1, ,,,,1 cpiiNATERAN
SECURED PARTY/IjTEN cdaimant
YEAR MAKE
...OR...ADDRESS...
:MODED,.:,,,:
D + H LIMITED PARTNERSHIP 2 ROBERT SPECK PARKWAY, 15TH FLOOR
- I . N.
MISSISSAUGA ON L4J 1H8
..*.*.*.. FOR. FURTHER. INFORMATION,.. CONTACT. THE . SECURED.. PARTY,
CONTINUED. . .
CERTIFIED BY/C PAR
REGISTRAR OF PERSONAL PROPERTY SECURITY/ LE REGISTRATEUR DES sOrETES MOBILIERES
(crj2ft 11/2017)
Cv—
V*' Ontario
CERTIFICATE
PROVINCE OF ONTARIORUN NUMBER : 03B MINISTRY OF GOVERNMENT SERVICESRUN DATE : 2019/02/07 PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMID : 20190207185100.35 ENQUIRY RESPONSE
TYPE OF, BEARCR SEARCH CONDUCTED ON : FIT.-: CUI-RKN.’^
BUSINESS DEBTOR AVG (OEAM) INC. 06FEB 2019
FORM 1C P1N/MJ( INC .ST/M ■IM'T / (I.AIM WE Ll.-N
viEailiEij’NtlijiBfel'S'1 ' ‘!00 .. 733755069....
REPORT : PSSR060PAGE : 4
( 5381)
01CAUTION
■FILINGiippiiaiiiii ttotai/sssssks ESREGisTR at ipN/::. iSY::::: /
02 03
04
05 DEBTOR 06
07
08
09
001 1 01? BIRTH
| iBUSINESS'NAME
i!llM)DRES:Sl!i
BUSINESS NAME
,, ADDRESS
'IRSdlSTERKO REGlSTRATlpN "UNDER ■ ' PERIOD
P PPSA 04
gFlRST/OiyEN;: NAMEi INITIAL SURNAME
AVG (OEAM) INC.
605 MIDDLEFIELD RD SUITE 1SUITE 1 SCARBOROUGH
■UKS'I GIVEN NAME INITIAL BURN/ME
ONTARIO CORPORATION NO.ON MlV 5B9
ONa‘ARn,0.i;it:ORtA>.RA‘l1l.ONi?NO.'t
SECURED PARTY I )MJ r l,.,iMAm
7■:vSDDRESS::
THE BANK OF NOVA SCOTIA
4715 TAHOE BOULEVARD MISSISSAUGA ON L4W 0B4
10
11
CPJ.,J.|A?!EKAJ:, .,ci,ASS l IiMCATION,/,;,m 1ICLE AMOUNT DATE OJ
iNVFNTORV FQUIPMr NI' Al'CvJUNTS OTHER : ^ I Nl'LULH I) ^ w MA,rl,H,1 OR...NO. iFilXmaturity!
Siiiilililiiiliiiliilili
II riAEKljl MOTOR 2017 DODGE
*.....111!Ill
MODEL.GRAND .CARAVAN
. v^Ny/! !2C^RDGBG 8HR8 72524
12 ...^HICLl;
13 GENERAL ,14 COI.LAl'IHAI15 D! 5r R11 1 I ON
16 .REGISIOJiRING,..,,AGENT
17 i||:!ll!!l!i!li!:!lil|:|iilllij!lil|
ODR SECURITY INTEREST IS LIMITED TO THE MOTOR VEHICLES LISTED ABOVE AND THE PROCEEDS OF THOSE VEHICLES
D+H LIMITED PARTNERSHIP (BNS)
^AppRKSS,!,. ,, 2 ROBERT SPECK PARKWAY, 15TH FL MISSISSAUGA ON L4Z 1H8
CONTINUED...
CERTIFIED BY/CERTIFIEES PAR
REGISTRAR OF *PERSONAL PROPERTY SECURITY/LE REGISTRATEURDES SORETES MOBILIERES y
(crjlft 11/2017)
V*' Ontario
REPORT : PSSR060PAGE : 5
( 5382)
TYPE OR SEARCH j BUSINESS DEBTOR SEARCH CONDUCTED ON ;1 AVG (OEAM) INC. RILE CURRENCY i 06 FEB 2019
.................00 .................
CERTIFICATE
PROVINCE OF ONTARIORUN NUMBER : 038 MINISTRY OF GOVERNMENT SERVICESRUN DATE : 2019/02/07 PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMID : 20190207185100.35 ENQUIRY RESPONSE
Pidlisi
01
02 D'P'IOH 03 NAME
04
pAGEj^isiggigiipTAL::::: no. iiititSssAcEs:::;:!01 003
0506
07
LEHTOtfej;
I'ljsirji-'SH rjAMi'1 |
■:;APPRESS:;::
BUSINGS
BMan
S;gMa!)!pRnVl!:H:pl:itpSs:ip:p(!:GL9TRA«):pN;S;fS:?g$S:S:RI!!GL9')!Ep:»:Sg
20170918 1442 1530 9456 P PPSA 5
INITIAL SURNAME'EIRSTpiVEN' NAME;'
AVG (OEAM) INC.
UNIT 1 , 605 MIDDLEFIELD ROAD SCARBOROUGH
EIRST GIVEN NAME IJCNKF^i _ t :
OIJT'-I- O 4 i'M>w8''Tli>N iJOON Ml V 5B9
ONTARIO CORPORATION NO.
08 .SECURED ;PARTY /................. .....
0 9 ■■ ■ 1 :v ADDRESS
ROYAL BANK OF CANADA
36 YORK MILLS ROAD, 4TH FLOOR TORONTO ON M2P 0A4
:s:CQLIiAII!ERA-(jl-
GO'10
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PROVINCE OF ONTARIOMINISTRY OF GOVERNMENT SERVICES
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( 5387)
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CERTIFICATE
REPORT : PSSR060PAGE : 12
( 5389)
TYPE OF SEARCH CONDUCTED ON 4 PILE CURRENCY 4
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20150522 1410 2734 0545
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REGISTRAR OFPERSONAL PROPERP/ SECURITY/LE REGISTRATEUR des sOretEs MOBILlfeRES
(crjlft 11/2017)fV-
Ontario
PROVINCE OF ONTARIORUN NUMBER : 038 MINISTRY OF GOVERNMENT SERVICESRUN DATE : 2019/02/07 PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMID : 20190207185100.35 ENQUIRY RESPONSE
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(crjHt 11/2017),r\!_
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RUN NUMBER : 038RUN DATE : 2019/02/07ID : 20190207185100.35
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RUN NUMBER : 038RUN DATE : 2019/02/07ID : 20190207185100.35
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CERTIFICATE
REPORTPAGE
TYPE OF SEARCH search Conducted on P3X® CURRENCY
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CONTINUED.. 22
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REGISTRAR OF *PERSONAL PROPERTY SECURITY/LE REGISTRATEUR
y DES SORETBS MOBILIfeRES )(cij2ft 11/2017)rv-
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CERTIFICATE
REPORT : PSSR060PAGE : 22
( 5399)
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NO r OF PAGES 1 SCHEDULE NUMBERREGISTEREDililiiffliiiilll
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^ DES SORETfeS MOBILISES j
(crj2ft 11/2017)
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FIRST GIVEN NAME
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08 SECURED PARTY /
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RCAP LEASING INC.
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10
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REGISTRAR OFPERSONAL PROPERTY SECURITY/LE REGISTRATEUR DES SORETfeS MOBILlfeRES
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Ontario
REPORT : PSSR060PAGE : 24
( 5401)
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REPORT : PSSR060PAGE : 28
( 5405)
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(crjift 11/2017)
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RON NUMBER : 038RON DATE : 2019/02/07ID : 20190207185100.35
PROVINCE OF ONTARIOMINISTRY OF GOVERNMENT SERVICES
PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMENQUIRY RESPONSE
CERTIFICATE
REPORTPAGE
TYPE OF SEARCH SEARCH CONDUCTED ON r FILE CURRENCY ?
0121
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2324
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SECURED CREDITOR POSTPONES AND SUBORDINATES HIS INTEREST PURSUANT TO N POSTPONEMENT AGREEMENT DATED OCTOBER 3, 2008 IN FAVOUR OF BANK OF
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PERSONAL PROPERTY SECURITY/LE REGISTRATEUR
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(crj2ft 11/201D
(S' Ontario
RUN NUMBER : 038RUN DATE : 2019/02/07ID : 20190207185100.35
PROVINCE OF ONTARIOMINISTRY OF GOVERNMENT SERVICES
PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMENQUIRY RESPONSE
CERTIFICATE
REPORT : PSSR060PAGE : 31
( 5408)
'UPK OF :SEARCH' dONDUCTED ON i fXIjK|i|CtBRRKMCY 4-
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CERTIFIED BY/CERTIFI PAR
REGISTRAR OFPERSONAL PROPERTY SECURITY/LE REGISTRATEUR DES SORETES MOBILIERES
(crj2ft 11/2017)
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RUN NUMBER : 038RUN DATE : 2019/02/07ID : 20190207185100.35
' TYPE OP SEARCH
PROVINCE OF ONTARIOMINISTRY OF GOVERNMENT SERVICES
PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMENQUIRY RESPONSE
CERTIFICATE
REPORT : PSSR060PAGE : 32
( 5409)
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REGISTRAR OFPERSONAL PROPERTY SECURITY/LE REGISTRATEUR DES S0RET£S MOBILISES
(crj2ft 11/2017)rv_(s' Ontario
RUN NUMBER : 03BRUN DATE : 2019/02/07ID : 20190207185100.35
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CAUTION 1 PACE TOTAL MOTOR VEHICLEFILING NO. OF PAGE? SCHEDULE
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REPORT : PSSR060PAGE : 33
( 5410)
29
0809
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CONTINUED... 34
CERTIFIED BY/CERTIFIEES PAR
PERSONAL PROPERTY SECURITY/LE REGISTRATEUR
^ DES SORETSS MOBILfiRES ,
(crj2ft 11/2017)r\e_
L ^ z>we' Ontario
RUN NUMBER : 038RUN DATE : 2019/02/07ID : 20190207185100.35
PROVINCE OF ONTARIOMINISTRY OF GOVERNMENT SERVICES
PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMENQUIRY RESPONSE
CERTIFICATE
REPORTPAGE
PSSR06034
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__ on ; AVG (OEAM) INC. : 06FEB 2019
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0121
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YEARSilBQRREClBi!:!PERIOD
iiiOTRER::;REASON/deScri
"TO AMEND DEBTOR ADDRESS ONLY2526272802/ .DAP OF ^IR,TH,/ ,FIRST;,05 , DEBTOR^,,;,;,.1 '' ’ 1 ’ ’ ' ....... ...“““I"""'03/ pi<l?RfeNS'ifE||!El|:i.. . AVG (OEAM) INC.06 ....... ’ ’..... ' ’ ' "04/07 i;;;AUUR«Ss?::
ixlNJTJjAL (SURNAME*
605 MIDDLEFIELD ROAD, UNIT 1 TORONTO;»OlEPARIO,„.GORPORA!P,ION*N0.,„ 1399684 'Of. ojj'"''' M1V5B9
29
0809
10
ASSIGNOR$li['UKi'i3 1 APTY/LIEN CIiATMANT/ASSIGNEE
'ADDRESS;;;;;^CtJULAIlEKAJ..(U..ASS,l,|‘;,^Y»'*#Nss..
( ONSUril'R f'OTON VEHICLE>S INVENTORY EQUJPMEWJ' ACCOUNTS O'fflER INCLUDED
«'P®H MAKEMOTOR'.VEUrCUE,'
13 GENERAL14 ' C0LmTER^U!;:|,.”15 'pisbRipritoi’;16 M^Tl^^ftTNGSAGENTi.,,pR,,,,17 SECUUEU IV-.R'l'Y/ ADDRESS
.............
1112
DATE OF,*, ,,,,,,,,, ,, , NO FIXED,,NATPRITY, lMATURIT!?;,D|(i|;;:i' ;■
MODEL
HOOEY REMUS LLP (GRM)SUITE 1410, 120 ADELAIDE STREET WEST TORONTO ON M5H1T1
,., ,*.**,, FOR , FURTHER , INFORMATION,,.CONTACT , THE , SECURED.. PARTY. . . lllllllllllllffisiCONTINUED... 35
'CERTIFIED by/certifiees par1
REGISTRAR OFPERSONAL PROPERTY SECURITY/LE REGISTRATEUR DES SURETSS MOBILlSRES
(crj2ft 11/2017^
cw>Pr' Ontario
RUN NUMBER : 038RUN DATE : 2019/02/07ID : 20190207185100.35
PROVINCE OF ONTARIOMINISTRY OF GOVERNMENT SERVICES
PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMENQUIRY RESPONSE
CERTIFICATE
REPORTPAGE
: PSSR060: 35( 5412)
•-'fP1*: OF skw]| SEARCH 1 CGj'IDUCTI- Vim CtJRR,-ENCY
BUSINESS DEBTORAVG (OEAM) INC.06FEB 2019
0121
22
' aHAjSGSS' SjT&SCEMpr,/' GHANCIffiv Sf M'EMpi!!!,:,,,! ^v f' ‘I: ,1;v;;. !'■:; |hEGISVR.T ON M-V.l
17D3 8327 ^MOTION 1 PAGE TMAt MOTOR VEHtOLB REGISTRATION REGISTEREDFITJNO NO 8 OF PAGES SCITEPm,E
...... ...orir"''’’''"" "i'' ' ■ 1'm,E NUMBER
PAGE::i:Ar^iEjINPEP::i
601952076
NO SPEpjiFIR PAOff AMENPW OSANGFi REQUIRED .... ............. ........ . ...... ^ "6.. 'ftfitlEWAE '
23 RHFliMKNi'E24 DEBTOR/
TRANSFEI.09business:.: NAME 7
|:iFfRST,|j]Eyu|I NMEii,!;
AVG (OEAM) INC.
: I:N ITIAT.i!
RENENAl. YEARS
iiH!i!ifS...SUHIJAMI'
CORRECTPERIOD
25262728 '! ' * .......'02/ i!f5pE;!i!!ORiii®||JSI^ii:05 ......... f1,'1 1 ,vl '' '' ... .'''03/ , ;TliiANSi|'!E&E''; vBUSINESS,!,NAME ,,06 ' .....'...... .04/07 .liiADURt'iSSi:-:,:
.RIRST 0IVH4 NAME' J.NJ.T1AI.I SURNAME!,i:!
' LRIO COR,:P.OKA',!UON,:,NO.,.
29
0809
10111213
ASSIGNORlliflgufiliilARTY'/lUiENiiiieiiAiliMAN'l^AS&iGNEE]]]
ADDRESS!'!'1.,..ATERAIi^^QIiASS.-K^ICATIONvav.
...... ......... ........ . :;:*MOTOR* ^VEIIIICl *GOODS INVENTORY WU I PMENT ACCOUNTS GVIIFK INCI,UI>1.;D
. Yl-AR .MAKEh........VKRICNH
14 'wHSfljfeRAD !■15 . DUst^teribN16 HJiOJaT RING j‘ .ENT,,OK.17 l:SESjRi«S®AK!)li/Ii
lliiiiiliiiiffliiiIvADDRESS,
i.MODED.:.;
HOOEY REMUS LLPSUITE 1410-120 ADELAIDE STREET WEST
IjjplllIJA'PK OK; . MA'J'URUT i.(OS'
NO FIXED MATURITY DATE
TORONTO
*.*.*..FOR .FURTHER. INFORMATION,.. CONTACT..THE . SECURED .PARTY.....*.*.*..
ON
CONTINUED.
M5H1T1
36
CERTIFIED BY/CERTIFIEES PAR
REGISTRAR OFPERSONAL PROPERTY SECURITY/LE REGISTRATEUR DES SORETES MOBILIERES
(cn2ft 11/2017)
Ontario
RUN NUMBER : 038RUN DATE : 2019/02/07ID : 201902071B5100.35
PROVINCE OF ONTARIOMINISTRY OF GOVERNMENT SERVICES
PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMENQUIRY RESPONSE
CERTIFICATE
REPORT : PSSR060PAGE : 36
( 5413)
TYPE OF SEARCHSEARCH CONDUCTED ON FILK CURRENCY 1 , 1
BUSINESS DEBTOR AVG (OEAM) INC. 06FEB 2019
I'OI.'M 2C FinANClNG < S'lA'IlMl'N'l / ; IIMAJI S'! Al'IT-IMJ'l1
0121 'RECORD
, T|Rj]5iiptENCE]?
22
CAUTION PACE TOTAL MOTOR VEHICLE REGISTRATIONNO, OF PAGES SCHEDULE NUMBER
..... 001........002.................... 20140911!.1506.TO62 0975601952076
lit; I STE 1E' > UNDER
HUN I'OKFl Cl |NO SPECLFIC''PAOB’i''AMEJ«!BP ijEH?
X 1 J OTHER
23 REFERENCE24 DEBTOR/
TRANSFERORBUSINESS:: NAME.::!
FIRST OTVFN WIF
AVG (OEAM) INC.
INITIAL'!! ::SURNAMEi;
SUBORDINATION/POSTPONEMENTREGISTRATION NO. 20031219 1236 1862 8565 (FILE NO. 601952076) IS SUBORDINATED IN FAVOUR OF ROYAL BANK OF CANADA REGISTRATION NO.
S®: 20140909 1558 1862 0266 (FILE NO. 699661215) PURSUANT TO AiP/sTE.OF BIRTJJ FIRST GIVEN, NAME :■ INITIAL. SURNAME.v.: .......
BUSINESS:-. NAME
pji^PRESSj:*:
ED , PARTY/LTENi-iiGIiiAIMANT'/ftSSIGNEE
.sONTIUlIO,:iiCORgOHATiI,ONiiiNQi.
AppRESSins:„,CQl!liATERAIi::,dAS.S:I;F-IC/iTION,':v,v:':::':
GOODS J.NVEN*J'OKY EQUIPMENT ACCOUNTS OTHER ;:;:iNCLUDKD,::i,MOTpR,::VRH:TCr,E::.
10i.YEAR MAKE,],. .. ^
11 ; MOTOR,, 'I,12 ipi^fapicEiES13 ijl^ENERAL14 'ipiOLLATERAL!15 !:::SESC>Si!::|pittN!|16 llRR|#if||i#i^feiAgEMT,,,.g)R,,i.17
LIEN CLAIMANT
MODEL-
DEVRY SMITH FRANK LLP (JAP)95 BARBER GREENE ROAD, SUITE 100
AMOUNT
lillpiS-ls;
DATE OF NO FIXEDMATURITY OR MATURITY PATE
TORONTO
.***.. FOR. FURTHER.. INFORMATION,.. CONTACT. THE . SECURED.. PARTY.. *>
ONT
CONTINUED.
M3C 3E9
37
'CERTIFIED BY/CERTIFIEpS PAR'
REGISTRAR OF PERSONAL PROPERTY SECURITY/ LE REGISTRATEUR DES SClRETfeS MOBILlfeRES
(cij2ft 11/2017)
Pe' Ontario
RUN NUMBER : 038RUN DATE : 2019/02/07ID s 20190207185100.35
PROVINCE OF ONTARIOMINISTRY OF GOVERNMENT SERVICES
PERSONAL PROPERTY SECURITY REGISTRATION SYSTEMENQUIRY RESPONSE
CERTIFICATE
REPORTPAGE
: PSSR060: 37( 5414)
BUSINESS DEBTOR m AVG (OEAM) INC. m 06FEB 2019
.................. .I OHM 'M' nUMJCIU-. HlMKli Slr'l'l'.v|'.NJ' / S'lZ-'ll r.n.NT
0121
222324
iHiBumf*' I U1 NO
RRPEHEfICEDKB’TOR:/'WAUBPEJtiOR
HEGlSTBftJiDiUNDER
PA6J3 t<ym, MOTOR VRH.lOL.6MO r OF PAUEP EOFTEDUTjE. MUI4BER
...... 0 0 2........0 0 2 "...................20140 01II " I S O 6 ^ 1062"" 0'9'7 !iFILE NUMBER 601952076............. RENEWAL,
,gFJ^j3jF5ji^, PAfiE CHANOE REQUIRED YEARB
'TNI1. ' "
CORRECTPERXOD
BUSINESS NAME
OTFfER ckange subordinatxon/postponement'REABON/ SUBORDINATION AGREEMENT DATED SEPTEMBER 17, 2014DESCRIPTION
2526272802/ DATE, OF BIRT?05 , DEBTOR/: i,"03/ THANSFE-EE 1-USlt.i'KS t.'AMl06 ..... ...................... . .................................. ....
04/07 ::.:AUDHESSv
FIRST'GIVEN NAME, ::SURNAt4K;:;
ONTARIO CORPORATION NO,
29
0809
10
111213141516 17
...ASSIGNOR.CLAIMANT/ASSIGNEE
ADDRESS..,,iQ3LL^IJ!fR4L,:,,pfiA^^ILi,^CATIOW
ONSUMI U MOTOR VEHICLE DATE OF NO FIXEDGOODS INVENTORY EQUIPMENT ACCOUNTS OTHER INCLUOED AMOUNT MATURIW OR MATURITY DATE
YEAR AJAKE■1 MO.* U. 1issiiSSiiiii
COLLATERAL
liSSliCLAIMANT
MODEL, ,:.V,.Jl.„.N
.. .*.* * . FOR.. FURTHER . INFORMATION,.. CONTACT . THE . SECURED.. PARTY.... .*.* * ...
CONTINUED. . . 38
CERTIFIED BY/CERTIFIEES PAR
REGISTRAR OF PERSONAL PROPERTY SECURITY/ LE REGISTRATEURDES s0ret£s mobiliEres
(crj2ft 11/2017)rv_
Ontario
RUN NUMBER : 038PROVINCE OF ONTARIO
MINISTRY OF GOVERNMENT SERVICES REPORT :: PSSR060RUN DATE : 2019/02/07 PERSONAL PROPERTY SECURITY REGISTRATION SYSTEM PAGE : 38ID :: 20190207185100.35 ENQUIRY RESPONSE it 5415)
CERTIFICATE
TYPE OF SEARCH SEARCH CONDUCTED ON FILE CURRENCY
BUSINESS DEBTOR AVG (OEAM) INC. 06FEB 2019
INFORMATION RELATING TO THE REGISTRATIONS LISTED BELOW IS ATTACHED HERETO.
FILE NUMBER REGISTRATION NUMBER REGISTRATION NUMBER REGISTRATION NUMBER
739744902 20180525 1154 1532 0212 20180712 0940 1532 0467733755069 20171107 1432 1219 2289732005307 20170918 1442 1530 9456732005316 20170918 1442 1530 9457710041185 20150917 1443 1530 4984706342086 20150522 1410 2734 0545 20150930 1949 1531 8996702864162 20150108 1944 1531 2899699661215 20140909 1558 1862 0266 20171004 1443 1530 7323 20171004 1932 1531 3058693781524 20140213 1032 8077 5598686312442 20130424 0933 1590 9218676382823 20120222 1631 1590 6603 20120323 1144 1590 8155601952076 20031219 1236 1862 8565 20081105 0932 1515 1711 20120314 1130 1793 2000
20121026 1528 1793 2487 20131017 1442 1793 8327 20140918 1506 1862 0975
REGISTRATION NUMBER
20120507 1145 1590 0628
23 REGISTRATION(S) ARE REPORTED IN THIS ENQUIRY RESPONSE
CERTIFIED BY/CERTIFIEpS PAR
REGISTRAR OF ‘PERSONAL PROPERTY SECURITY/ LE REGISTRATEUR
^ DES S0RETES MOBILIERES
(crfj4 11/2017)
Cv—.V ^Ontario
38907129.1
ROYAL BANK OF CANADA
Applicant
and AVG (OEAM) INC.
RespondentCourt File No. CV-20-00636359-00CL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST PROCEEDING COMMENCED AT TORONTO
APPLICATION RECORD
Volume 1 of 2
AIRD & BERLIS LLP Barristers and Solicitors
Brookfield Place Suite 1800, Box 754
181 Bay Street Toronto, Ontario M5J 2T9
Tel: 416.863.1500 Fax: 416.865.15159
Sanjeev P.R. Mitra (LSO # 37934U) Email: [email protected]
Sam Babe (LSO # 49498B)Email: [email protected]
Lawyers for Royal Bank of Canada