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                                                                   EXHIBIT 10.36

                              SECURITY AGREEMENT

          For valuable consideration, the undersigned (the "Guarantor") agrees
with Canadian Imperial Bank of Commerce, in its capacity as administrative agent
(the "Agent") under the Credit Agreement made as of January 29, 1999 between
3578275 Canada Inc., a predecessor to Kitchen Craft of Canada Ltd., as borrower,
the Agent, as one Lender, and the various other Lenders (as such term is defined
thereunder), (as such credit agreement may be amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement") as follows:

1.             GRANT OF SECURITY. The Guarantor mortgages, charges and assigns
               -----------------
     to the Agent, and grants to the Agent, and the Agent takes, a Security
     Interest in the property described in the following paragraph or paragraphs
     of this section (as applicable in accordance with the NOTE appearing at the
     end of this section), and in all property described in any schedules,
     documents or listings that the Guarantor may from time to time sign and
     provide to the Agent in connection with this Agreement, and in all present
     and future Accessions to, and all Proceeds of, any such property
     (collectively, the "Collateral") as a general and continuing collateral
     security for the due payment and performance of the obligations of the
     Guarantor (the "Guarantor Obligations") under its guarantee (as such
     guarantee may be amended, restated, supplemental or otherwise modified from
     time to time, the "Guarantee") dated as of the date hereof in favour of the
     Agent:

     [_]  (a) SPECIFIC PERSONAL PROPERTY: the Personal Property described in
              Schedule A.

     [X]  (b) ALL PERSONAL PROPERTY: all of the Guarantor's present and after-
              acquired undertaking and Personal Property (including any property
              that may be described in Schedule A) but excluding Consumer Goods.

     [_]  (c) ALL REAL PROPERTY: all of the Guarantor's present and after-
              acquired real property including any property that may be
              described in Schedule A), together with all buildings placed,
              installed or erected on any such property and all fixtures.

Provided that, notwithstanding the foregoing, nothing in this section 1 shall
mortgage, charge or assign any Intellectual Property (as that term is defined in
the Credit Agreement) but shall grant a security interest therein.

NOTE:     CHECK APPROPRIATE BOX OR BOXES TO INDICATE WHICH OF PARAGRAPHS (A),
          (B) OR (C) ARE TO APPLY.  IF NO BOX IS CHECKED OFF, PARAGRAPH (B) WILL
          APPLY.

2.             GOVERNING LAW. This Agreement is governed by laws of British
               ------------- 
     Columbia and the federal laws of Canada applicable in that Province.
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                                      -2-

ADDITIONAL TERMS AND CONDITIONS.  THE ADDITIONAL TERMS AND CONDITIONS (INCLUDING
-------------------------------                                                 
ANY SCHEDULES) ON THE FOLLOWING PAGES FORM PART OF THIS AGREEMENT.

          The Guarantor has signed this Agreement as of February         , 1999.

                                    KITCHEN CRAFT CABINETRY LTD.



                                    by      /s/ MARK BULLER
                                       -----------------------------

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                                      -3-

                        ADDITIONAL TERMS AND CONDITIONS

3.             RECEIVABLES. If the Collateral includes Receivables, the Agent
               -----------
     may, during the continuance of an Event of Default and after demand has
     been made under the Guarantee, advise any Person who is liable to make any
     payment to the Guarantor of the existence of this Agreement. The Agent may
     from time to time confirm with such Persons the existence and the amount of
     the Receivables. During the continuance of an Event of Default and after
     demand has been made under the Guarantee, the Agent may collect and
     otherwise deal with the Receivables in such manner and upon such terms as
     the Agent considers appropriate.

4.             RECEIPTS PRIOR TO DEFAULT. Until and during such time as the
               -------------------------
     Obligations are declared to be forthwith due and payable pursuant to
     section 9.2 of the Credit Agreement, all amounts received by the Agent as
     Proceeds of the Collateral will be applied on account of the Obligations in
     such manner and at such times as the Agent may consider appropriate or, at
     the Agent's option, may be held unappropriated in a collateral account or
     released to the Guarantor.

5.             PLACES OF BUSINESS. The Guarantor represents and warrants that
               ------------------
     the locations of all existing Places of Business are specified in Schedule
     B. The Guarantor will promptly notify the Agent in writing of any
     additional Places of Business as soon as they are established.

6.             COLLATERAL FREE OF CHARGES. The Guarantor will not create, incur
               --------------------------
     or assume or suffer to exist or cause or permit any Encumbrance upon or in
     respect of any of its Collateral, except for Permitted Encumbrances (as
     defined in the Credit Agreement). The Guarantor will not do or permit
     anything to adversely affect the ranking or validity of the security
     created hereby except by creating a Permitted Encumbrance.

7.             DEFAULT.
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     (a)  RIGHTS UPON DEFAULT.  Upon and during such time as the Obligations are
          -------------------                                                   
          declared to be forthwith due and payable pursuant to section 9.2 of
          the Credit Agreement and after demand has been made under the
          Guarantee, the Agent and the Receiver, as applicable, will to the
          extent permitted by law have the following rights.

          (i)   APPOINTMENT OF RECEIVER.  The Agent may by instrument in writing
                -----------------------                                         
                appoint any Person as a Receiver of all or any part of the
                Collateral. The Agent may from time to time remove or replace a
                Receiver, or make application to any court of competent
                jurisdiction for the appointment of a Receiver. Any Receiver
                appointed by the Agent will (for purposes relating to
                responsibility for the Receiver's acts or omissions) be
                considered to be the Guarantor's agent. The Agent may from time
                to time fix the Receiver's remuneration and

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                                      -4-
 
                the Guarantor will pay the Agent the amount of such
                remuneration. The Agent will not be liable to the Guarantor or
                any other Person in connection with appointing or not appointing
                a Receiver or in connection with the Receiver's actions or
                omissions.

          (ii)  DEALINGS WITH THE COLLATERAL.  The Agent or a Receiver may take
                ----------------------------                                   
                possession of all or any part of the Collateral and retain it
                for as long as the Agent or the Receiver considers appropriate,
                receive any rents and profits from the Collateral, carry on (or
                concur in carrying on) all or any part of the Guarantor's
                business or refrain from doing so, borrow on the security of the
                Collateral, repair the Collateral, process the Collateral,
                prepare the Collateral for sale, lease or other disposition, and
                sell or lease (or concur in selling or leasing) or otherwise
                dispose of the Collateral on such terms and conditions
                (including among other things by arrangement providing for
                deferred payment) as the Agent or the Receiver considers
                appropriate. The Agent or the Receiver may (without charge and
                to the exclusion of all other Persons including the Guarantor)
                enter upon any Place of Business.

          (iii) REALIZATION. The Agent or a Receiver may use, collect, sell,
                -----------                                                 
                lease or otherwise dispose of, realize upon, release to the
                Guarantor or other Persons and otherwise deal with, the
                Collateral in such manner, upon such terms (including among
                other things by arrangement providing for deferred payment) and
                at such times as the Agent or the Receiver considers
                appropriate. The Agent or the Receiver may make any sale, lease
                or other disposition of the Collateral in the name of and on
                behalf of the Guarantor or otherwise.

          (iv)  APPLICATION OF PROCEEDS AFTER DEFAULT.  All Proceeds of
                -------------------------------------                  
                Collateral received by the Agent or a Receiver may be applied to
                discharge or satisfy any expenses (including among other things
                the Receiver's remuneration and other expenses of enforcing the
                Agent's rights under this Agreement), Charges, borrowings, taxes
                and other outgoings affecting the Collateral or which are
                considered advisable by the Agent or the Receiver to preserve,
                repair, process, maintain or enhance the Collateral or prepare
                it for sale, lease or other disposition, or to keep in good
                standing any Charges on the Collateral ranking in priority to
                any Charge created by this Agreement, or to sell, lease or
                otherwise dispose of the Collateral. The balance of such
                Proceeds will be applied to the Obligations in such manner and
                at such times as the Agent consider appropriate and thereafter
                will be accounted for as required by law.

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                                      -5-
 
     (b)  OTHER LEGAL RIGHTS.  Before and during the continuation of an Event of
          ------------------                                                    
          Default and both before and after demand is made under the Guarantee,
          the Agent will have, in addition to the rights specifically provided
          in this Agreement, the rights of a secured party under the PPSA, as
          well as the rights recognized at law and in equity. No right will be
          exclusive of or dependent upon or merge in any other right, and one or
          more of such rights may be exercised independently or in combination
          from time to time.

     (c)  DEFICIENCY.  The Guarantor will remain liable to the Agent for payment
          ----------                                                            
          of any Guarantor Obligations that are outstanding following
          realization of all or any part of the Collateral.

8.             THE AGENT NOT LIABLE. The Agent will not be liable to the
               -------------------- 
     Guarantor or any other Person for any failure or delay in exercising any of
     its rights under this Agreement (including among other things any failure
     to take possession of, collect or sell, lease or otherwise dispose of, any
     Collateral). None of the Agent, a Receiver or any agent of the Agent
     (including, in Alberta any sheriff) is required to take, or will have any
     liability for any failure to take or delay in taking, any steps necessary
     or advisable to preserve rights against other Persons under any Chattel
     Paper, Securities or Instrument in possession of the Agent, a Receiver or
     the Agent's agent.

9.             FURTHER ASSURANCES. The Guarantor will from time to time as soon
               ------------------   
     as practicable following the request by the Agent take such action
     (including among other things the signing and delivery of financing
     statements and financing change statements, other schedules, documents or
     listings describing property included in the Collateral, further
     assignments and other documents, and the registration of this Agreement) as
     the Agent may require in connection with the Collateral or as the Agent
     might consider necessary to give effect to this Agreement. If permitted by
     law, the Guarantor waives the right to sign or receive a copy of any
     financing statement or financing change statement, or any statement issued
     by any registry that confirms any registration of a financing statement or
     financing change statement, relating to this Agreement. The Guarantor
     irrevocably appoints the Manager or the Acting Manager from time to time of
     the Agent's branch specified on the first page of this Agreement as the
     Guarantor's attorney (with full powers of substitution and delegation) to
     sign, during the continuance of an Event of Default and after demand is
     made under the Guarantee, all documents required to give effect to this
     section. Nothing in this section affects the right of the Agent as secured
     party, or any other Person on the Agent's behalf, to sign and file or
     deliver (as applicable) all such financing statements, financing change
     statements, notices, verification agreements and other documents relating
     to the Collateral and this Agreement as the Agent or such other Person
     considers appropriate.

10.            DEALINGS BY THE AGENT.  The Agent may from time to time increase,
               ---------------------                                            
     reduce, discontinue or otherwise vary the Guarantor's Obligations under the
     Guarantee or those of Kitchen Craft under the Credit Agreement, grant
     extensions of time and other indulgences,

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                                      -6-
 
     take and give up any Charge, abstain from taking, perfecting or registering
     any Charge, accept compositions, grant releases and discharges and
     otherwise deal with the Guarantor, customers of the Guarantor, guarantors
     and others, and with the Collateral and any Charges held by the Agent, as
     the Agent considers appropriate without affecting the Guarantor's
     obligations to the Agent or the Agent's rights under this Agreement.

11.            DEFINITIONS.  In this Agreement;
               -----------                     

     "ACCESSIONS", "ACCOUNT", "CHATTEL PAPER", DOCUMENT OF TITLE", "EQUIPMENT",
     "GOODS", "INSTRUMENT", INTANGIBLE", "INVENTORY", "PROCEEDS", "PURCHASE-
     MONEY SECURITY INTEREST" and "SECURITY INTEREST" have the respective
     meanings given to them in the PPSA.

     "BOOKS AND RECORDS" means all books, records, files, papers, disks,
     documents and other repositories of data recording, evidencing or relating
     to the Collateral to which the Guarantor (or any Person on the Guarantor's
     behalf) has access.

     "CHARGE" means any mortgage, charge, pledge, hypothecation, lien (statutory
     or otherwise), assignment, financial lease, title retention agreement or
     arrangement, security interest or other encumbrance of any nature however
     arising, or any other security agreement or arrangement creating in favour
     of any creditor a right in respect of a particular property that is prior
     to the right of any other creditor in respect of such property.

     "CONSUMER GOODS" has the meaning given to it in the PPSA, except that, if
     this Agreement is governed by the laws of the Yukon, it does not include
     special consumer goods as that term is defined in the Yukon PPSA.

     "EVENT OF DEFAULT" has the meaning ascribed thereto in the Credit
     Agreement.

     "KITCHEN CRAFT" means Kitchen Craft of Canada Ltd., the successor to the
     amalgamation of Kitchen Craft of Canada Ltd. and 3578275 Canada Inc., and
     its successors and assigns permitted under the Credit Agreement.

     "MONEY" has the meaning given to it in the PPSA or, if there is no such
     definition, means a medium of exchange authorized or adopted by the
     Parliament of Canada as part of the currency of Canada, or by a foreign
     government as part of its currency.

     "OBLIGATIONS" has the meaning ascribed thereto as the Credit Agreement.

     "PERSON" means any natural person or artificial body (including among
     others any firm, corporation or government).

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                                      -7-
 
     "PERSONAL PROPERTY" means personal property and includes among other things
     Inventory, Equipment, Receivables, Books and Records, Chattel Paper, Goods,
     Documents of Title, Instruments, Intangibles (including intellectual
     property), Money and Securities, and includes all Accessions to such
     property.

     "PLACE OF BUSINESS" means a location where the Guarantor carries on
     business or where any of the Collateral is located (including any location
     described in Schedule B).

     "PPSA" means the legislation that applies in the province or territory
     noted in section 2 of this Agreement, as such legislation may be amended,
     renamed or replaced from time to time (and includes all regulations from
     time to time made under such legislation) as follows:  in the case of
     Ontario, the Personal Property Security  Act, 1989; in the case of Alberta,
     British Columbia, Manitoba, Prince Edward Island, Saskatchewan and the
     Yukon Territory, the Personal Property Security Act; and in the case of any
     other province or territory, such legislation as deals generally with
     Charges on personal property;

     "RECEIVABLES" means all debts, claims and choses in action (including among
     other things Accounts and Chattel Paper) now or in the future due or owing
     to or owned by the Guarantor.

     "RECEIVER" means a receiver or a receiver and manager.

     "SECURITIES" has the meaning given to it in the PPSA or, if there is no
     such definition and the PPSA defines "security" instead, it means the
     plural of that term.

     "SERIAL NUMBER" means the number that the Person who manufactured or
     constructed a Serial Number Good permanently marked or attached to it for
     identification purposes or, if applicable, such other number as the PPSA
     stipulates as the serial number or vehicle information number to be used
     for registration purposes of such Serial Number Good.

     "SERIAL NUMBER GOOD" means a motor vehicle, trailer, mobile home, aircraft
     airframe, aircraft engine or aircraft propeller, boat or an outboard motor
     for a boat.

12.            GENERAL.
               ------- 

     (a)  RESERVATION OF THE LAST DAY OF ANY LEASE.  The Charges created by this
          ----------------------------------------                              
          Agreement do not extend to the last day of the term of any lease or
          agreement for lease; however, the Guarantor will hold such last day in
          trust for the Agent and, upon the exercise by the Agent of any of its
          rights under this Agreement during the continuation of an Event of
          Default and after demand has been made under the Guarantee, will
          assign such last day as directed by the Agent.

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                                      -8-

     (b)  ATTACHMENT OF SECURITY INTEREST.  The Security Interests created by
          -------------------------------                                    
          this Agreement are intended to attach (i) to existing Collateral when
          the Guarantor signs this Agreement, and (ii) to Collateral
          subsequently acquired by the Guarantor, immediately upon the Guarantor
          acquiring any rights in such Collateral. The parties do not intend to
          postpone the attachment of any Security Interest created by this
          Agreement.

     (c)  PURCHASE-MONEY SECURITY INTEREST.  If the Agent gives value for the
          --------------------------------                                   
          purpose of enabling the Guarantor to acquire rights in or to any of
          the Collateral, the Guarantor will in fact apply such value to acquire
          those rights (and will provide the Agent with such evidence in this
          regard as the Agent may require), the Guarantor grants to the Agent,
          and the Agent takes, a Purchase-Money Security Interest in such
          Collateral to the extent that the value is applied to acquire such
          rights. A certificate or affidavit of any of the Agent's authorized
          representatives is admissible in evidence to establish the amount of
          any such value.

     (d)  DESCRIPTION OF COLLATERAL IN SCHEDULE A.  The fact that box (b) or box
          ---------------------------------------                               
          (c) of section 1 has been checked without there being any property
          described in Schedule A does not affect the nature or validity of the
          Agent's security in the Collateral.

     (e)  ENTIRE AGREEMENT.  The Agent has not made any representation or
          ----------------                                               
          undertaken any obligation in connection with the subject matter of
          this Agreement other than as specifically set out in this Agreement,
          and in particular nothing continued in this Agreement will require the
          Agent to make, renew or extend the time for payment of any loan or
          other credit accommodation to the Guarantor or any other Person.

     (f)  ADDITIONAL SECURITY.  The Charges created by this Agreement are in
          -------------------                                               
          addition and without prejudice to any other Charge now or later held
          by the Agent. No Charge held by the Agent will be exclusive of or
          dependent upon or merge in any other Charge, and the Agent may
          exercise its rights under such Charges independently or in
          combination.

     (g)  SEVERABILITY; HEADINGS.  Any provision of this Agreement that is void
          ----------------------                                               
          or unenforceable in any jurisdiction is, as to that jurisdiction,
          ineffective to that extent without invalidating the remaining
          provisions of this Agreement. The headings in this Agreement are for
          convenience only and do not limit or extend the provisions of this
          Agreement.

     (h)  INTERPRETATION.  When the context so requires, the singular will be
          --------------                                                     
          read as the plural, and vice versa.

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                                      -9-
 
     (i)  COPY OF AGREEMENT.  The Guarantor acknowledges receipt of a copy of
          -----------------                                                  
          this Agreement.

     (j)  WAIVERS. If this Agreement is governed by the laws of Saskatchewan and
          -------
          the Guarantor is a corporation, the Guarantor agrees that The
          Limitation of Civil Rights Act, The Land Contracts (Actions) Act and
          Part IV (excepting only section 46 of The Saskatchewan Farm Security
          Act do not apply insofar as they relate to actions as defined in those
          Acts, or insofar as they relate to or affect this Agreement, the
          rights of the Agent under this Agreement or any instrument, Charge,
          security agreement or other document of any nature that renews,
          extends or is collateral to this Agreement.

     (k)  NOTICE.  The Agent may send to the Guarantor copies of any document
          ------                                                             
          required by the PPSA to be delivered by the Agent to the Guarantor in
          accordance with the notice provisions of the Guarantee.

     (l)  ENUREMENT ASSIGNMENT.  This Agreement will enure to the
          --------------------                                   
          benefit of and be binding upon (i) the Agent, its successors and
          assigns, and (ii) the Guarantor and the Guarantor's successors and
          permitted assigns. The Guarantor will not assign this Agreement
          without the Agent's prior written consent.

<PAGE>
 
                                  SCHEDULE A


The following is a description of property included in the Collateral.
<PAGE>
 
                                  SCHEDULE B

The following are the Places of Business:

     2100-1 Bertell Centre
     505 Burrard Street
     Vancouver, British Columbia
     V7X 1R4