Exhibit 10.3
 
GENERAL SECURITY AGREEMENT
 
This General Security Agreement is made as of June 23, 2011.
 
TO:
Name: De Lage Landen Financial Services Canada Inc.

 
Address: 1235 North Service Road West, Suite 100, Oakville, Ontario L6M 2W2

 
Attention: David G. Timms

 
Facsimile: (877) 500-5356 with a copy to (800) 347-3936

 
RECITALS:
 
A.           Emtec Infrastructure Services Canada Corporation, a corporation
existing under the federal laws of Canada is, or may become, indebted or liable
to De Lage Landen Financial Services Canada Inc. (the “Creditor”) pursuant to
the terms of a loan agreement dated as of June 23, 2011 (as amended,
supplemented, restated or replaced from time to time, the “Credit Agreement”) or
otherwise.
 
B.           To secure the payment and performance of the Obligations, each
Debtor has agreed to grant to the Creditor the Security Interests with respect
to its Collateral in accordance with the terms of this Agreement.
 
For good and valuable consideration, the receipt and adequacy of which are
acknowledged by each Debtor, each Debtor jointly and severally agrees with and
in favour of the Creditor as follows:

1.           Definitions.  In this Agreement capitalized terms used but not
otherwise defined in this Agreement shall have the meanings given to them in the
Credit Agreement, and the following terms have the following meanings:
 
“Accessions”, “Chattel Paper”, “Certificated Security”, “Consumer Goods”,
“Document of Title”, “Equipment”, “Futures Account”, “Futures Contract”,
“Futures Intermediary”, “Goods”, “Instrument”, “Inventory”, “Money”, “Proceeds”,
“Securities Account”, “Securities Intermediary”, “Security”, “Security
Certificate”, “Security Entitlement”, and “Uncertificated Security” have the
meanings given to them in the PPSA.
 
“Agreement” means this agreement, including the exhibits and recitals to this
agreement, any Perfection Certificates and any Supplements as it or they may be
amended, supplemented, restated or replaced from time to time, and the
expressions “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar
expressions refer to this Agreement and not to any particular section or other
portion of this Agreement.
 
“Books and Records” means, with respect to any Debtor, all books, records,
files, papers, disks, documents and other repositories of data recording in any
form or medium, evidencing or relating to the Personal Property of such Debtor
which are at any time owned by such Debtor or to which such Debtor (or any
Person on such Debtor’s behalf) has access.
 
 
 

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“Collateral” means all of the present and future:
 
 
(a)
undertaking;

 
 
(b)
Personal Property (including any Personal Property that may be described in any
Perfection Certificate delivered in connection with this Agreement or any
schedules, documents or listings that the Debtor may from time to time provide
to the Creditor in connection with this Agreement); and

 
 
(c)
real property (including any real property that may be described in any
Perfection Certificate delivered in connection with this Agreement or any
schedules, documents or listings that the Debtor may from time to time provide
to the Creditor in connection with this Agreement and including all fixtures,
improvements, buildings and other structures placed, installed or erected from
time to time on any such real property),

 
of the Debtor, including Books and Records, Contracts, Intellectual Property
Rights and Permits, and including all such property in which the Debtor now or
in the future has any right, title or interest whatsoever, whether owned,
leased, licensed, possessed or otherwise held by the Debtor, and all Proceeds of
any of the foregoing, wherever located.
 
“Contracts” means, with respect to any Debtor, all contracts and agreements to
which such Debtor is at any time a party or pursuant to which such Debtor has at
any time acquired rights, and includes (i) all rights of such Debtor to receive
money due and to become due to it in connection with a contract or agreement,
(ii) all rights of such Debtor to damages arising out of, or for breach or
default with respect to, a contract, licence or agreement, and (iii) all rights
of such Debtor to perform and exercise all remedies in connection with a
contract or agreement.
 
“Control” means, with respect to a particular Person, the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ability to exercise voting
power, by contract or otherwise.  “Controlled” has the corresponding meaning.
 
“Credit Agreement” has the meaning set out in the recitals hereto.
 
“Creditor” has the meaning set out in the recitals hereto.
 
“Debtors” means the Persons delivering a signature page to this Agreement and
any other Person which hereafter delivers a Supplement, and “Debtor” means any
one of them.
 
“Exhibits” means the exhibits to this Agreement.
 
“Governmental Authority” means the government of Canada, any other nation or any
political subdivision thereof, whether provincial, state, territorial or local,
and any agency, authority, instrumentality, regulatory body, court, central
bank, fiscal or monetary authority or other authority regulating financial
institutions, and any other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government, including the Bank Committee on Banking Regulation and Supervisory
Practices of the Bank of International Settlements.
 
 
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“Intangibles” means all intangibles of any applicable Person, whether now owned
or hereafter created or acquired, including, without limitation, all choses in
action, causes of action, corporate or other business records, inventions,
designs, drawings, blueprints, patents, patent applications, trademarks and the
goodwill of the business symbolized thereby, names, trade names, trade secrets,
goodwill, copyrights, registrations, licenses, franchises, customer lists,
security  and other deposits, rights in all litigation presently or hereafter
pending for any cause or claim (whether in contract, tort or otherwise) and all
judgments now or hereafter arising therefrom, all claims of any Debtor against
the Creditor, rights to purchase or sell real or personal property, rights as a
licensor or licensee of any kind other than rights that constitute Receivables,
telephone numbers, proprietary information, purchase orders, and all insurance
policies and claims (including credit, liability, property and other insurance),
tax refunds and claims, computer programs, software, discs, tapes and tape
files, rights under letters of credit, claims under guaranties or other credit
support of any kind, security interests or other security held by or granted to
such Person to secure payment of any of the Receivables by an Account Debtor,
rights to indemnification and all other intangible property of every kind and
nature (other than Receivables), specifically including all “intangibles” as
defined in the PPSA.
 
“Intellectual Property Rights” means, with respect to any Debtor: (i) all
industrial and intellectual property rights of such Debtor or in which such
Debtor has any right, title or interest, including copyrights, patents,
inventions (whether or not patented), trade-marks, get-up and trade dress,
industrial designs, integrated circuit topographies, internet domain names,
trade names, plant breeders’ rights, know how and trade secrets; (ii)
registrations and applications for registration for any such industrial and
intellectual property rights; (iii) all Contracts, licences, renewals, reissues,
divisions, continuations, extensions, continuations-in-part, income, royalties,
damages, and payments or any analogous rights related to any such industrial and
intellectual property rights; (iv) any rights to sue for past, present or future
infringements of any such industrial and intellectual property rights; and (v)
all rights corresponding to any of the foregoing anywhere in the world.
 
“Investment Property” means “investment property” as defined in the PPSA and all
present and future rights and interest in and to dividends or distributions of
any kind, profits, losses, or capital accounts incident to or arising therefrom.
 
“Laws” means all federal, provincial, municipal, foreign and international
statutes, acts, codes, ordinances, decrees, treaties, rules, regulations,
municipal by-laws, judicial or arbitral or administrative or ministerial or
departmental or regulatory judgments, orders, decisions, rulings or awards or
any provisions of the foregoing, including general principles of common and
civil law and equity, and all policies, practices and guidelines of any
Governmental Authority binding on or affecting the Person referred to in the
context in which such word is used (including, in the case of tax matters, any
accepted practice or application or official interpretation of any relevant
taxation authority); and “Law” means any one or more of the foregoing.
 
 
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“Lien” means, (a) with respect to any asset, any mortgage, deed of trust, lien,
pledge, hypothec (whether movable or immovable), hypothecation, encumbrance,
charge, security interest, royalty interest, adverse claim, defect to title or
right of set off in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease, title retention
agreement or consignment agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to any asset, (c) any
purchase option, call or similar right of a third party with respect to such
asset, (d) any netting arrangement, defeasance arrangement or reciprocal fee
arrangement, and (e) any other arrangement having the effect of providing
security.
 
“Obligations” means, with respect to any Debtor, all present and future
indebtedness, liabilities and obligations of any and every kind, nature and
description (whether direct or indirect, joint or several, absolute or
contingent, matured or unmatured) of such Debtor to the Creditor whenever and
however incurred, and any unpaid balance thereof.
 
“Organizational Documents” means, with respect to any Person, such Person’s
articles or other charter documents, by-laws, unanimous shareholder agreement,
partnership agreement or trust agreement, as applicable, and any and all other
similar agreements, documents and instruments relative to such Person.
 
“Perfection Certificate” means a certificate of an officer of the Debtor (or New
Debtor) in form and substance satisfactory to the Creditor containing such
information concerning such Debtor (or New Debtor) and its property and assets
as the Creditor may reasonably request.
 
“Permits” means, with respect to any Debtor, all permits, licences, waivers,
exemptions, consents, certificates, authorizations, approvals, franchises,
rights-of-way, easements and entitlements that such Debtor has, requires or is
required to have, to own, possess or operate any of its property or to operate
and carry on any part of its business.
 
“Personal Property” means personal property and includes Receivables, Chattel
Paper, Documents of Title, Equipment, Goods, Instruments, Intangibles,
Inventory, Investment Property and Money.
 
“Pledged Certificated Securities” means, with respect to any Debtor, any and all
Collateral of such Debtor that is a Certificated Security.
 
“Pledged Futures Contracts” means, with respect to any Debtor, any and all
Collateral of such Debtor that is a Futures Contract.
 
“Pledged Futures Accounts” means, with respect to any Debtor, any and all
Collateral of such Debtor that is a Futures Account.
 
“Pledged Futures Intermediary” means, at any time, any Person which is at such
time a Futures Intermediary at which a Pledged Futures Account is maintained.
 
“Pledged Futures Intermediary’s Jurisdiction” means, with respect to any Pledged
Futures Intermediary, its jurisdiction as determined under section 7.1(4) of the
PPSA.
 
 
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“Pledged Issuer” means, with respect to any Debtor, at any time, any Subsidiary
of such Debtor which is an “issuer”(as defined in the STA) of, or with respect
to, any Pledged Shares at such time.
 
“Pledged Issuer’s Jurisdiction” means, with respect to any Pledged Issuer, its
jurisdiction as determined under section 44 of the STA.
 
“Pledged Securities” means, with respect to any Debtor, any and all Collateral
of such Debtor that is a Security.
 
“Pledged Securities Accounts” means any and all Collateral of such Debtor that
is a Securities Account.
 
“Pledged Securities Intermediary” means, at any time, any Person which is at
such time a Securities Intermediary at which a Pledged Securities Account is
maintained.
 
“Pledged Securities Intermediary’s Jurisdiction” means, with respect to any
Securities Intermediary, its jurisdiction as determined under section 45(2) of
the STA.
 
“Pledged Security Certificates” means, with respect to any Debtor, any and all
security certificates of such Debtor representing the Pledged Certificated
Securities.
 
“Pledged Security Entitlements” means, with respect to any Debtor, any and all
Collateral of such Debtor that is a Security Entitlement.
 
“Pledged Shares” means, with respect to any Debtor, all (i) Securities, (ii)
Security Entitlements and (iii) interests in any partnership or limited
liability company not falling within the preceding clause (i) or (ii), in each
case of the foregoing, of any Subsidiary of any Debtor in which such Debtor now
or in the future has any right, title or interest.
 
“Pledged Uncertificated Securities” means, with respect to any Debtor, any and
all Collateral of such Debtor that is an Uncertificated Security.
 
“PPSA” means the Personal Property Security Act of the Province referred to in
the “Governing Law” section 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.
 
“Receiver” means a receiver, a manager or a receiver and manager.
 
“Release Date” means the date on which all the Obligations of each Debtor have
been indefeasibly paid and discharged in full and the Creditor has no further
obligations to any Debtor under the Loan Documents pursuant to which further
Obligations of any Debtor might arise.
 
“Security Interests” means, with respect to any Debtor, the Liens created by
such Debtor in favour of the Creditor under this Agreement.
 
 
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“STA” means the Securities Transfer Act of the Province referred to in the
“Governing Law” section 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.
 
“Supplement” has the meaning given to such term in Section 36.
 
“ULC” means any unlimited company, unlimited liability corporation or unlimited
liability company.
 
“ULC Laws” means the Companies Act (Nova Scotia), the Business Corporations Act
(Alberta), the Business Corporations Act (British Columbia), and any other
present or future Laws governing ULCs.
 
“ULC Shares” means shares or other equity interests in the capital stock of a
ULC.
 
2.           Grant of Security Interests.  As general and continuing collateral
security for the due payment and performance of its Obligations, each Debtor
pledges, mortgages, charges and assigns (by way of security) to the Creditor,
and grants to the Creditor a security interest in, the Collateral of such
Debtor.
 
3.           Limitations on Grant of Security Interests.  If the grant of the
Security Interests with respect to any Contract, Intellectual Property Right or
Permit under Section 2 would result in the termination or breach of such
Contract, Intellectual Property Right or Permit or is otherwise prohibited or
ineffective (whether by the terms thereof or under applicable Law), then such
Contract, Intellectual Property Right or Permit shall not be subject to the
Security Interests but shall be held in trust by the applicable Debtor for the
benefit of the Creditor and, on the exercise by the Creditor of any of its
rights or remedies under this Agreement following an Event of Default shall be
assigned by such Debtor as directed by the Creditor; provided that: (a) the
Security Interests of such Debtor shall attach to such Contract, Intellectual
Property Right or Permit, or applicable portion thereof, immediately at such
time as the condition causing such termination or breach is remedied, and (b) if
a term in a Contract that prohibits or restricts the grant of the Security
Interests in the whole of any Receivable or Chattel Paper forming part of the
Collateral is unenforceable against the Creditor under applicable Law, then the
exclusion from the Security Interests set out above shall not apply to such
Receivable or Chattel Paper.  In addition, the Security Interests do not attach
to Consumer Goods or extend to the last day of the term of any lease or
agreement for lease of real property.  Such last day shall be held by the
applicable Debtor in trust for the Creditor and, on the exercise by the Creditor
of any of its rights or remedies under this Agreement following an Event of
Default, shall be assigned by such Debtor as directed by the Creditor.  For
greater certainty, no Intellectual Property Right in any trade-mark, get-up or
trade dress is presently assigned to the Creditor by sole virtue of the grant of
the Security Interests contained in Section 2.
 
4.           Attachment; No Obligation to Advance.  Each Debtor confirms that
value has been given by the Creditor to such Debtor, that such Debtor has rights
in its Collateral existing at the date of this Agreement or the date of any
Supplement, as applicable and that such Debtor and the Creditor have not agreed
to postpone the time for attachment of the Security Interests to any of the
Collateral of such Debtor.  The Security Interests with respect to the
Collateral of each Debtor created by this Agreement shall have effect and be
deemed to be effective whether or not the Obligations of such Debtor or any part
thereof are owing or in existence before or after or upon the date of this
Agreement or of any Supplement, as applicable.  Neither the execution and
delivery of this Agreement nor the provision of any financial accommodation by
the Creditor shall oblige the Creditor to make any financial accommodation or
further financial accommodation available to any Debtor or any other Person.
 
 
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5.           Representations and Warranties.  Each Debtor represents and
warrants to the Creditor that, as of the date of this Agreement or the date of
any Supplement, as applicable:
 
 
(a)
Debtor Information.  All of the information set out in any Perfection
Certificate with respect to such Debtor is accurate and complete.

 
 
(b)
Title; No Other Security Interests.  Except for Permitted Encumbrances, such
Debtor owns (or, with respect to any leased or licensed property forming part of
the Collateral of such Debtor, holds a valid leasehold or licensed interest in)
the Collateral free and clear of any Liens.  Such Debtor is the record and
beneficial owner of the Pledged Shares.  No security agreement, financing
statement or other notice with respect to any or all of the Collateral of such
Debtor is on file or on record in any public office, except for filings with
respect to Permitted Encumbrances.

 
 
(c)
Amount of Receivables.  The amount represented by such Debtor to the Creditor
from time to time as owing by each Account Debtor or by all Account Debtors with
respect to its Receivables of such Debtor will at such time be the correct
amount so owing by such Account Debtor or debtors and, unless disclosed in
writing by such Debtor to the Creditor at that time, will be owed free of any
dispute, set-off or counterclaim.  Except as disclosed in writing by such Debtor
to the Creditor, neither such Debtor nor (to the best of such Debtor’s
knowledge) any other party to any Receivable of such Debtor or Contract is in
default or is likely to become in default in the performance or observance of
any of the terms of such Receivable or Contract where such default is or could
reasonably be expected to be materially adverse to such Debtor or the Creditor.

 
 
(d)
Consents.  Except for any consent that has been obtained and is in full force
and effect, no consent of any Person (including any counterparty with respect to
any Contract, any Account Debtor with respect to any Receivable, or any
Governmental Authority with respect to any Permit) is required, or is purported
to be required, for the execution, delivery, performance and enforcement of this
Agreement (this representation being given without reference to the exclusions
contained in Section 3).  For the purposes of complying with any transfer
restrictions contained in the Organizational Documents of any Pledged Issuer,
such Debtor hereby irrevocably consents to any transfer of such Debtor’s Pledged
Securities of such Pledged Issuer.

 
 
(e)
Execution and Delivery.  This Agreement has been duly authorized, executed and
delivered by such Debtor and is a valid and binding obligation of such Debtor
enforceable against such Debtor in accordance with its terms, subject only to
bankruptcy, insolvency, liquidation, reorganization, moratorium and other
similar Laws generally affecting the enforcement of creditors’ rights, and to
the fact that equitable remedies (such as specific performance and injunction)
are discretionary remedies.

 
 
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(f)
No Consumer Goods.  Such Debtor does not own any Consumer Goods which are
material in value or which are material to the business, operations, property,
condition or prospects (financial or otherwise) of such Debtor.

 
 
(g)
Intellectual Property Rights.  All registrations and applications for
registration pertaining to any Intellectual Property Rights of such Debtor, all
other material Intellectual Property Rights of such Debtor, and the nature of
such Debtor’s right, title or interest therein, are described in the Perfection
Certificate with respect to such Debtor.  Each material Intellectual Property
Right of such Debtor is valid, subsisting, unexpired, enforceable, and has not
been abandoned.  In the case of copyright works, of such Debtor, such Debtor has
obtained full and irrevocable waivers of all moral rights or similar rights
pertaining to such works.  Except as set out in the Perfection Certificate for
such Debtor, none of the material Intellectual Property Rights of such Debtor
have been licensed or franchised by such Debtor to any Person or, to the best of
such Debtor’s knowledge, infringed or otherwise misused by any Person.  Except
as set out in the Perfection Certificate for such Debtor, the exercise of any
material Intellectual Property Right, or any licensee or franchisee thereof, has
not infringed or otherwise misused any intellectual property right of any other
Person, and such Debtor has not received and is not aware of any claim of such
infringement or other misuse.

 
 
(h)
Partnerships, Limited Liability Companies.  Such Debtor shall not permit terms
of any interest in a partnership or limited liability company that is Collateral
of such Debtor to provide that such interest is a “security” for the purposes of
the STA.

 
 
(i)
Due Authorization.  The Pledged Securities of such Debtor have been duly
authorized and validly issued and are fully paid and non-assessable.

 
 
(j)
Warrants, Options, etc.  There are no outstanding warrants, options or other
rights to purchase, or other agreements outstanding with respect to, or property
that is now or hereafter convertible into, or that requires the issuance or sale
of, any Pledged Shares of such Debtor.

 
 
(k)
No Required Disposition.  There is no existing agreement, option, right or
privilege capable of becoming an agreement or option pursuant to which such
Debtor would be required to sell, redeem or otherwise dispose of any Pledged
Shares of such Debtor or under which any Pledged Issuer thereof has any
obligation to issue any Securities of such Pledged Issuer to any Person.

 
6.           Survival of Representations and Warranties.  All representations
and warranties made by each Debtor in this Agreement (a) are material, (b) shall
be considered to have been relied on by the Creditor, and (c) shall survive the
execution and delivery of this Agreement and any Supplement or any investigation
made at any time by or on behalf of the Creditor and any disposition or payment
of the Obligations until the Release Date.
 
 
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7.           Covenants.  Each Debtor covenants and agrees with the Creditor
that:
 
 
(a)
Further Documentation.  Such Debtor shall from time to time, at the expense of
such Debtor, promptly and duly authorize, execute and deliver such further
instruments and documents, and take such further action, as the Creditor may
reasonably request for the purpose of obtaining, confirming or preserving the
full benefits of, and the rights and powers granted by, this Agreement
(including the filing of any financing statements or financing change statements
under any applicable legislation with respect to the Security Interests).  Such
Debtor acknowledges that this Agreement has been prepared based on the existing
Laws in the Province referred to in the “Governing Law” section of this
Agreement and that a change in such Laws, or the Laws of other jurisdictions,
may require the execution and delivery of different forms of security
documentation.  Accordingly, such Debtor agrees that the Creditor shall have the
right to require that this Agreement be amended, supplemented, restated or
replaced, and that such Debtor shall immediately on request by the Creditor
authorize, execute and deliver any such amendment, supplement, restatement or
replacement (i) to reflect any changes in such Laws, whether arising as a result
of statutory amendments, court decisions or otherwise, (ii) to facilitate the
creation and registration of appropriate security in all appropriate
jurisdictions, or (iii) if such Debtor merges or amalgamates with any other
Person or enters into any corporate reorganization, in each case in order to
confer on the Creditor Liens similar to, and having the same effect as, the
Security Interests.

 
 
(b)
Maintenance of Records.  Such Debtor shall keep and maintain accurate and
complete records of the Collateral of such Debtor, including: (i) a record of
all payments received and all credits granted with respect to the Receivables
and Contracts of such Debtor and (ii) a computerized perpetual inventory system
and inventory stock records. At the written request of the Creditor, such Debtor
shall mark any Collateral of such Debtor specified by the Creditor to evidence
the existence of the Security Interests. Such Debtor shall conduct a physical
count of the Inventory of such Debtor at such intervals as the Creditor requests
(but not more frequently than annually unless an Event of Default has occurred
and is continuing) and promptly supply the Creditor with a copy of such accounts
accompanied by a report of the quantity and value (calculated at the lower of
cost or market value on a first in, first out basis) of the Inventory of such
Debtor and such additional information with respect to the Inventory of such
Debtor as the Creditor may reasonably request from time to time.

 
 
(c)
Warehouse Receipts. Such Debtor shall deliver to the Creditor any and all
warehouse receipts covering any portion of the Collateral of such Debtor located
in warehouses and for which warehouse receipts are issued, and shall take all
actions reasonably requested by the Creditor to transfer Inventory of such
Debtor to warehouses designated by the Creditor.

 
 
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(d)
Returns. For so long as no Event of Default has occurred and is continuing, if
any Account Debtor returns any Inventory of such Debtor to any Debtor in the
ordinary course of its business, such Debtor shall promptly determine the reason
for such return and may issue a credit memorandum to the Account Debtor in the
appropriate amount.  In the event any Account Debtor returns Inventory to any
Debtor after the occurrence and during the continuance of any Event of Default,
such Debtor shall (i) hold the returned Inventory in trust for the Creditor,
(ii) segregate all returned Inventory from all of such Debtor's other property,
(iii) conspicuously label the returned Inventory as the Creditor's property,
(iv) immediately notify the Creditor of the return of any Inventory, specifying
the reason for such return, the location and condition of the returned
Inventory, and on the Creditor's request deliver such returned Inventory to the
Creditor, and (v) not dispose of, or issue any credits or allowances with
respect to, any returned Inventory without the Creditor’s prior written consent.

 
 
(e)
Right of Inspection.  The Creditor may, at all times during normal business
hours, without charge, examine and make copies of all Books and Records, and may
discuss the affairs, finances and accounts of such Debtor with its officers and
accountants.  The Creditor may also, without charge during normal business
hours, enter the premises of such Debtor where any of the Collateral of such
Debtor is located for the purpose of inspecting such Collateral, observing its
use or otherwise protecting its interests in such Collateral.  Such Debtor, at
its expense, shall provide the Creditor with such clerical and other assistance
as may be reasonably requested by the Creditor to exercise any of its rights
under this paragraph. If any Collateral is at any time in the possession or
control of any warehouseman, bailee or of such Debtor's agents or processors,
such Debtor shall notify such Person of the Creditor's security interest in such
Collateral and, upon the Creditor’s request, instruct them to hold all such
Collateral for the Creditor's account subject to the Creditor's instructions
and/or obtain a waiver from such Person of that Person’s rights to such
Collateral to the extent the Creditor shall require in its Permitted Discretion.

 
 
(f)
Limitations on Other Liens.  Such Debtor shall not create, incur or permit to
exist, and shall defend the Collateral of such Debtor against, and shall take
such other action as is necessary to remove, any and all Liens in and other
claims affecting the Collateral of such Debtor, other than the Permitted
Encumbrances and such other Liens as may be permitted in writing by the Creditor
in its Permitted Discretion, and such Debtor shall defend the right, title and
interest of the Creditor in and to the Collateral of such Debtor against the
claims and demands of all Persons.

 
 
(g)
Limitations on Dispositions of Collateral.  Such Debtor shall not, except in
accordance with section 6.2.1 of the Credit Agreement, without the Creditor’s
prior written consent, sell, lease or otherwise dispose of any of the
Collateral, except that Inventory of such Debtor may be sold, leased or
otherwise disposed of and, subject to the terms of this Agreement and the Credit
Agreement, Receivables of such Debtor may be collected, in either case in the
ordinary course of such Debtor’s business. In the event the Creditor gives any
such prior written approval with respect to any such sale of Collateral, the
same may be conditioned on the sale price being equal to, or greater than, an
amount acceptable to the Creditor.  Following an Event of Default, all Proceeds
of the Collateral of such Debtor (including all amounts received with respect to
Receivables) received by or on behalf of such Debtor, whether or not arising in
the ordinary course of such Debtor’s business, shall be received by such Debtor
as trustee for the Creditor and shall be immediately paid to the Creditor.

 
 
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(h)
Limitations on Modifications, Waivers, Extensions.  Other than as not prohibited
by paragraph (i) below, such Debtor shall not (i) amend, modify, terminate,
permit to expire or waive any provision of such Debtor’s Permits, Contracts or
any documents giving rise to a Receivable in any manner which is or could
reasonably be expected to be materially adverse to such Debtor or the Creditor,
or (ii) fail to exercise promptly and diligently its rights under each of such
Debtor’s Contracts and documents giving rise to a Receivable if such failure is
or could reasonably be expected to be materially adverse to such Debtor or the
Creditor.

 
 
(i)
Limitations on Discounts, Compromises, Extensions of Receivables.  Other than in
the ordinary course of business of such Debtor consistent with previous
practices, such Debtor shall not (i) re-date any invoice or sale from the
original date thereof or grant any extension of the time for payment of any
Receivable of such Debtor, (ii) compromise, compound or settle any Receivable of
such Debtor for less than its full amount, (iii) release, wholly or partially,
any Person liable for the payment of any Receivable of such Debtor, or (iv)
allow any credit or discount of any Receivable of such Debtor. The Debtor shall
deliver a copy of any invoice reasonably requested by the Creditor, provided
that nothing in this sentence shall limit the Creditor’s rights, when conducting
its field examinations and audits of such Debtor and the Collateral, to request
copies of and verify any invoice consistent with reasonable audit protocols.
Each copy of an invoice delivered to the Creditor by such Debtor will be a
genuine copy of the original invoice sent to the Account Debtor named therein;
and with respect to any invoice or accounts receivable aging report delivered to
the Creditor, all goods described in each invoice (or in the respective
invoice(s) underlying each Receivable listed on such aging report) will have
been delivered to the Account Debtor and all services of such Debtor described
in each invoice (or in the respective invoice(s) underlying each Receivable
listed on such aging report) will have been performed.

 
 
(j)
Maintenance of Collateral.  Such Debtor shall maintain all tangible Collateral
of such Debtor in good operating condition, ordinary wear and tear excepted, and
such Debtor shall provide all maintenance, service and repairs necessary for
such purpose.  Such Debtor shall maintain in good standing all registrations and
applications with respect to the Intellectual Property Rights of such Debtor
except to the extent that any failure to do so could not reasonably be expected
to be materially adverse to such Debtor or the Creditor. Such Debtor shall not
permit any item of Equipment of such Debtor to become a fixture (other than a
trade fixture) to real estate or an accession to other property unless such real
estate or property is subject to a first priority, perfected security interest
in favour of the Creditor.

 
 
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(k)
Insurance.  Such Debtor shall keep the Collateral of such Debtor insured with
financially sound and reputable companies to its full insurable value against
loss or damage by fire, explosion, theft and such other risks as are customarily
insured against by Persons carrying on similar businesses or owning similar
property within the vicinity in which such Debtor’s applicable business or
property is located, including without limitation all insurance required
pursuant to the Schedule to the Credit Agreement (as defined therein).  The
applicable insurance policies shall be in form and substance reasonably
satisfactory to the Creditor, and shall (i) contain a breach of warranty clause
in favour of the Creditor, (ii) provide that no cancellation, material reduction
in amount or material change in coverage will be effective until at least 30
days after receipt of written notice thereof by the Creditor, (iii) contain by
way of endorsement a mortgagee clause in form and substance satisfactory to the
Creditor, and (iv) name the Creditor as loss payee as its interest may
appear.  Such Debtor shall, from time to time at the Creditor’s request, deliver
the applicable insurance policies (or satisfactory evidence of such policies) to
the Creditor.  If such Debtor does not obtain or maintain such insurance, the
Creditor may (following notice to such Debtor), but need not, do so, in which
event such Debtor shall immediately on demand reimburse the Creditor for all
payments made by the Creditor in connection with obtaining and maintaining such
insurance, and until reimbursed any such payment shall form part of the
Obligations of such Debtor and shall be secured by the Security
Interests.  Neither the Creditor nor its correspondents or its agents shall be
responsible for the character, adequacy, validity or genuineness of any
insurance, the solvency of any insurer, or any other risk connected with
insurance.

 
 
(l)
Further Identification of Collateral.  Such Debtor shall promptly furnish to the
Creditor such statements, certificates and schedules further identifying and
describing the Collateral of such Debtor, and such other reports in connection
with the Collateral of such Debtor, as the Creditor may from time to time
reasonably request, including an updated list of any motor vehicles or other
“serial number” goods owned by such Debtor and classified as Equipment,
including vehicle identification numbers.

 
 
(m)
Amalgamation, Merger or Consolidation.  Such Debtor shall not permit any Pledged
Issuer of such Debtor to amalgamate, merge or consolidate unless all of the
outstanding capital stock of the surviving or resulting corporation is, upon
such amalgamation, merger or consolidation, pledged under this Agreement and no
cash, securities or other property is distributed with respect to the
outstanding shares of any other constituent corporation.

 
 
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(n)
Agreements re Intellectual Property Rights.  Promptly upon request from time to
time by the Creditor, such Debtor shall authorize, execute and deliver any and
all agreements, instruments, documents and papers that the Creditor may
reasonably request to evidence the Security Interests in any material
Intellectual Property Rights of such Debtor and, where applicable, the goodwill
of the business of such Debtor connected with the use of, and symbolized by, any
such Intellectual Property Rights.

 
 
(o)
Instruments; Documents of Title; Chattel Paper.  Promptly upon request from time
to time by the Creditor, such Debtor shall deliver to the Creditor, endorsed
and/or accompanied by such instruments of assignment and transfer in such form
and substance as the Creditor may reasonably request, any and all Instruments,
Documents of Title and Chattel Paper of such Debtor included in or relating to
the Collateral of such Debtor as the Creditor may specify in its request. If any
Receivable is or becomes evidenced by a promissory note or any other Instrument,
such Debtor shall immediately deliver such Instrument to the Creditor
appropriately endorsed to the Creditor or accompanied by an appropriate
instrument of transfer executed in blank, and, regardless of the form of any
presentment, demand, notice of dishonor, protest or notice of protest with
respect thereto, such Debtor shall remain liable thereon until such instrument
is paid in full.

 
 
(p)
Pledged Certificated Securities.  Such Debtor shall deliver to the Creditor any
and all Pledged Security Certificates of such Debtor and other materials
(including instruments of transfer reasonably satisfactory to the Creditor with
respect to any Pledged Security Certificates not in bearer form) as may be
required from time to time to provide the Creditor with control over all Pledged
Certificated Securities of such Debtor in the manner provided under section 23
of the STA.  At the request of the Creditor, such Debtor shall cause all Pledged
Security Certificates of such Debtor to be registered in the name of the
Creditor or its nominee.

 
 
(q)
Pledged Uncertificated Securities.  Such Debtor shall deliver to the Creditor
any and all such documents, agreements and other materials as may be required
from time to time to provide the Creditor with control over all Pledged
Uncertificated Securities of such Debtor in the manner provided under section 24
of the STA.

 
 
(r)
Pledged Security Entitlements.  Such Debtor shall deliver to the Creditor any
and all such documents, agreements and other materials as may be required from
time to time to provide the Creditor with control over all Pledged Security
Entitlements of such Debtor in the manner provided under section 25 or 26 of the
STA.

 
 
(s)
Pledged Futures Contracts.  Such Debtor shall deliver to the Creditor any and
all such documents, agreements and other materials as may be required from time
to time to provide the Creditor with control over all Pledged Futures Contracts
of such Debtor in the manner provided under subsection 1(2) of the PPSA.

 
 
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(t)
Partnerships, Limited Liability Companies.  Such Debtor shall ensure that the
terms of any interest in a partnership or limited liability company that is
Collateral shall expressly provide that such interest is a “security” for the
purposes of the STA.

 
 
(u)
Transfer Restrictions.  If the constating documents of any Pledged Issuer (other
than a ULC) restrict the transfer of the Securities of such Pledged Issuer, then
such Debtor shall deliver to the Creditor a certified copy of a resolution of
the directors, shareholders, unitholders or partners of such Pledged Issuer, as
applicable, consenting to the transfer(s) contemplated by this Agreement,
including any prospective transfer of the Collateral of such Debtor by the
Creditor upon a realization on the Security Interests.

 
 
(v)
Notices.  Such Debtor shall advise the Creditor promptly, in reasonable detail,
of any:

 
 
(i)
change to a Pledged Securities Intermediary’s Jurisdiction, Pledged Issuer’s
Jurisdiction, or Pledged Futures Intermediary’s Jurisdiction;

 
 
(ii)
change in the location of the jurisdiction of incorporation or amalgamation,
chief executive office or domicile of such Debtor;

 
 
(iii)
change in the name of such Debtor;

 
 
(iv)
merger, consolidation or amalgamation of such Debtor with any other Person;

 
 
(v)
additional jurisdiction in which such Debtor carries on business or has tangible
Personal Property;

 
 
(vi)
additional jurisdiction in which material Account Debtors of such Debtor are
located;

 
 
(vii)
acquisition of any right, title or interest in real property by such Debtor;

 
 
(viii)
acquisition of any Intellectual Property Rights which are the subject of a
registration or application with any governmental intellectual property or other
governing body or registry, or which are material to such Debtor’s business;

 
 
(ix)
acquisition of any Instrument, Document of Title or Chattel Paper;

 
 
(x)
creation or acquisition of any Subsidiary of such Debtor;

 
 
(xi)
Lien (other than Permitted Encumbrances) on, or claim asserted against, any of
the Collateral of such Debtor; or

 
 
(xii)
occurrence of any event, claim or occurrence that could reasonably be expected
to have a material adverse effect on the value of the Collateral of such Debtor
or on the Security Interests.

 
 
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Such Debtor shall not effect or permit any of the changes referred to in clauses
(ii) through (viii) above unless all filings have been made and all other
actions taken that are required in order for the Creditor to continue at all
times following such change to have a valid and perfected first priority
Security Interest with respect to all of the Collateral of such Debtor.
 
 
(w)
Such Debtor shall not consign any Inventory.

 
8.           Voting Rights.  Unless an Event of Default has occurred and is
continuing, each Debtor shall be entitled to exercise all voting power from time
to time exercisable with respect to the Pledged Shares of such Debtor and give
consents, waivers and ratifications with respect thereto; provided, however,
that no vote shall be cast or consent, waiver or ratification  given or action
taken which would be, or would have a reasonably likelihood of being,
prejudicial to the interests of the Creditor or which would have the effect of
reducing the value of the Collateral of such Debtor as security for the
Obligations of such Debtor or imposing any restriction on the transferability of
any of the Collateral of such Debtor.  Unless an Event of Default has occurred
and is continuing, the Creditor shall, from time to time at the request and
expense of the applicable Debtor, execute or cause to be executed, with respect
to all Pledged Securities that are registered in the name of the Creditor or its
nominee, valid proxies appointing such Debtor as its (or its nominee’s) proxy to
attend, vote and act for and on behalf of the Creditor or such nominee, as the
case may be, at any and all meetings of the applicable Pledged Issuer’s
shareholders or debt holders, all Pledged Securities that are registered in the
name of the Creditor or such nominee, as the case may be, and to execute and
deliver, consent to or approve or disapprove of or withhold consent to any
resolutions in writing of shareholders or debt holders of the applicable Pledged
Issuer for and on behalf of the Creditor or such nominee, as the case may
be.  Immediately upon the occurrence and during the continuance of any Event of
Default, all such rights of the applicable Debtor to vote and give consents,
waivers and ratifications shall cease and the Creditor or its nominee shall be
entitled to exercise all such voting rights and to give all such consents,
waivers and ratifications.
 
9.           Dividends; Interest.  Unless an Event of Default has occurred and
is continuing, each Debtor shall be entitled to receive any and all cash
dividends, interest, principal payments and other forms of cash distribution on
the Pledged Shares of such Debtor which it is otherwise entitled to receive, but
any and all stock and/or liquidating dividends, distributions of property,
returns of capital or other distributions made on or with respect to the Pledged
Shares of such Debtor, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of any Pledged Issuer of such
Debtor or received in exchange for the Pledged Shares of such Debtor or any part
thereof or as a result of any amalgamation, merger, consolidation, acquisition
or other exchange of property to which any Pledged Issuer of such Debtor may be
a party or otherwise, and any and all cash and other property received in
exchange for any Pledged Shares of such Debtor shall be and become part of the
Collateral of such Debtor subject to the Security Interests and, if received by
such Debtor, shall forthwith be delivered to the Creditor or its nominee
(accompanied, if appropriate, by proper instruments of assignment and/or stock
powers of attorney executed by such Debtor in accordance with the Creditor’s
instructions) to be held subject to the terms of this Agreement; and if any of
the Pledged Security Certificates have been registered in the name of the
Creditor or its nominee, the Creditor shall execute and deliver (or cause to be
executed and delivered) to such Debtor all such dividend orders and other
instruments as such Debtor may request for the purpose of enabling such Debtor
to receive the dividends, distributions or other payments which such Debtor is
authorized to receive and retain pursuant to this Section.  If an Event of
Default has occurred and is continuing, all rights of such Debtor pursuant to
this Section shall cease and the Creditor shall have the sole and exclusive
right and authority to receive and retain the cash dividends, interest,
principal payments and other forms of cash distribution which such Debtor would
otherwise be authorized to retain pursuant to this Section.  Any money and other
property paid over to or received by the Creditor pursuant to the provisions of
this Section shall be retained by the Creditor as additional Collateral
hereunder and be applied in accordance with the provisions of this Agreement.
 
 
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10.           Rights on Event of Default.  If an Event of Default has occurred
and is continuing, then and in every such case the Security Interests of each
Debtor shall become enforceable and the Creditor, in addition to any rights now
or hereafter existing under applicable Law may, personally or by agent, at such
time or times as the Creditor in its discretion may determine, do any one or
more of the following:
 
 
(a)
Rights under PPSA, etc.  Exercise against any or all Debtors all of the rights
and remedies granted to secured parties under the PPSA and any other applicable
statute, or otherwise available to the Creditor by contract, at law or in
equity.

 
 
(b)
Demand Possession.  Demand possession of any or all of the Collateral of any or
all Debtors, in which event each such Debtor shall, at the expense of such
Debtor, immediately cause the Collateral of such Debtor designated by the
Creditor to be assembled and made available and/or delivered to the Creditor at
any place designated by the Creditor.

 
 
(c)
Take Possession.  Enter on any premises where any Collateral of any or all
Debtors is located and take possession of such Collateral and keep it on such
Debtor’s premises at no cost to the Creditor, or disable or remove such
Collateral.

 
 
(d)
Deal with Collateral.  Hold, store and keep idle, or operate, lease or otherwise
use or permit the use of, any or all of the Collateral of any or all Debtors for
such time and on such terms as the Creditor may determine, and demand, collect
and retain all earnings and other sums due or to become due from any Person with
respect to any of the Collateral of any or all Debtors.

 
 
(e)
Carry on Business.  Carry on, or concur in the carrying on of, any or all of the
business or undertaking of any or all Debtors and enter on, occupy and use
(without charge by such Debtor) any of the premises, buildings, plant and
undertaking of, or occupied or used by, any or all Debtors.

 
 
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(f)
Enforce Collateral.  Seize, collect, receive, enforce or otherwise deal with any
Collateral of any or all Debtors in such manner, on such terms and conditions
and at such times as the Creditor deems advisable.

 
 
(g)
Dispose of Collateral.  Realize on any or all of the Collateral of any or all
Debtors and sell, lease, assign, give options to purchase, or otherwise dispose
of and deliver any or all of the Collateral of any or all Debtors (or contract
to do any of the above), in one or more parcels at any public or private sale,
at any exchange, broker’s board or office of the Creditor or elsewhere, with or
without advertising or other formality, except as required by applicable Law, on
such terms and conditions as the Creditor may deem advisable and at such prices
as it may deem best, for cash or on credit or for future delivery.

 
 
(h)
Court-Approved Disposition of Collateral.  Obtain from any court of competent
jurisdiction an order for the sale or foreclosure of any or all of the
Collateral of any or all Debtors.

 
 
(i)
Purchase by Creditor.  At any public sale, and to the extent permitted by Law on
any private sale, bid for and purchase any or all of the Collateral of any or
all Debtors offered for sale and, upon compliance with the terms of such sale,
hold, retain, sell or otherwise dispose of such Collateral without any further
accountability to any Debtor or any other Person with respect to such holding,
retention, sale or other disposition, except as required by Law.  In any such
sale to the Creditor, the Creditor may, for the purpose of making payment for
all or any part of the Collateral of any Debtor so purchased, use any claim for
any or all of the Obligations of such Debtor then due and payable to it as a
credit against the purchase price.

 
 
(j)
Collect Receivables.  Notify (whether in its own name or in the name of any
Debtor) the Account Debtors under any Receivables of any or all Debtors of the
assignment of such Receivables to the Creditor and direct such Account Debtors
to make payment of all amounts due or to become due to any or all Debtors with
respect to such Receivables directly to the Creditor and, upon such notification
and at the expense of any such Debtor, enforce collection of any such
Receivables, and adjust, settle or compromise the amount or payment of such
Receivables, in such manner and to such extent as the Creditor deems appropriate
in the circumstances, and the Creditor shall not be liable for any failure to
collect or enforce payment thereof.  At the Creditor’s request, all invoices, or
bills and statements sent to any Account Debtor, other obligor or bailee, shall
state that the Receivables and any other applicable Collateral of any or all
Debtors shall have been assigned to the Creditor and/or are payable directly and
only to the Creditor (other than any Receivable arising out of a contract with
any governmental authority (including, without limitation, the federal
government of Canada or the United States or any department, agency, subdivision
or instrumentality of the federal government of Canada or the United States) if
the enforceability or effectiveness of the assignment of such Receivable is
subject to any precondition that has not been met, unless such preconditions
have been met (including, without limitation, any actions required under the
Financial Administration Act (Canada) or the Federal Assignment of Claims Act of
1940, if applicable)).

 
 
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(k)
Transfer of Collateral.  Transfer any Collateral of any or all Debtors that is
Pledged Shares into the name of the Creditor or its nominee.

 
 
(l)
Voting.  Vote any or all of the Pledged Shares of any or all Debtors (whether or
not transferred to the Creditor or its nominee) and give or withhold all
consents, waivers and ratifications with respect thereto and otherwise act with
respect thereto as though it were the outright owner thereof.

 
 
(m)
Exercise Other Rights.  Exercise any and all rights, privileges, entitlements
and options pertaining to any Collateral of any or all Debtors that is Pledged
Shares as if the Creditor were the absolute owner of such Pledged Shares.

 
 
(n)
Dealing with Contracts and Permits. Deal with any and all Contracts and
Permits  to the same extent as any such Debtor might (including the enforcement,
realization, sale, assignment, transfer and requirement for continued
performance), all on such terms and conditions and at such time or times as may
seem advisable to the Creditor.

 
 
(o)
Payment of Liabilities.  Pay any liability secured by any Lien against any
Collateral of any or all Debtors.  Each such Debtor shall immediately on demand
reimburse the Creditor for all such payments and, until paid, any such
reimbursement obligation shall form part of the Obligations of such Debtor and
shall be secured by the Security Interests of such Debtor.

 
 
(p)
Borrow and Grant Liens.  Borrow money for the maintenance, preservation or
protection of any Collateral of any or all Debtors or for carrying on any of the
business or undertaking of any or all Debtors and grant Liens on any Collateral
(in priority to the Security Interests of any or all Debtors or otherwise) as
security for the money so borrowed.  Each such Debtor shall immediately on
demand reimburse the Creditor for all such borrowings and, until paid, any such
reimbursement obligations shall form part of the Obligations of such Debtor and
shall be secured by the Security Interests of such Debtor.

 
 
(q)
Appoint Receiver.  Appoint by instrument in writing one or more Receivers of any
or all Debtors or any or all of the Collateral of any or all Debtors with such
rights, powers and authority (including any or all of the rights, powers and
authority of the Creditor under this Agreement) as may be provided for in the
instrument of appointment or any supplemental instrument, and remove and replace
any such Receiver from time to time.  To the extent permitted by applicable Law,
any Receiver appointed by the Creditor shall (for purposes relating to
responsibility for the Receiver’s acts or omissions) be considered to be the
agent of any such Debtor and not of the Creditor.

 
 
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(r)
Court-Appointed Receiver.  Obtain from any court of competent jurisdiction an
order for the appointment of a Receiver of any or all Debtors or of any or all
of the Collateral of any or all Debtors.

 
 
(s)
Consultants.  Require any or all Debtors to engage a consultant of the
Creditor’s choice, or engage a consultant on its own behalf, such consultant to
receive the full cooperation and support of each such Debtor and its agents and
employees, including unrestricted access to the premises of each such Debtor and
the Books and Records of each such Debtor; all reasonable fees and expenses of
such consultant shall be for the account of each such Debtor and each such
Debtor hereby authorizes any such consultant to report directly to the Creditor
and to disclose to the Creditor any and all information obtained in the course
of such consultant’s employment.

 
The Creditor may exercise any or all of the foregoing rights and remedies
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except as required by applicable Law) to or
on any Debtor or any other Person, and each Debtor hereby waives each such
demand, presentment, protest, advertisement and notice to the extent permitted
by applicable Law.  None of the above rights or remedies shall be exclusive of
or dependent on or merge in any other right or remedy, and one or more of such
rights and remedies may be exercised independently or in combination from time
to time.  The Creditor shall be under no obligation to exercise its rights
against any or all of the Collateral (or to forbear from exercising its rights
against any or all of the Collateral) prior to exercising any other rights it
may have against any Debtor and/or any rights it may have against any one or
more Guarantors (if any exist) or to otherwise marshal any of the Collateral or
other assets of any Debtor for the benefit of such Debtor or any other party
(including any Guarantor that may exist from time to time) and each Debtor
waives any and all such rights of marshalling. Each Debtor acknowledges and
agrees that any action taken by the Creditor hereunder following the occurrence
and during the continuance of an Event of Default shall not be rendered invalid
or ineffective as a result of the curing of the Event of Default on which such
action was based.
 
11.           Realization Standards.  To the extent that applicable Law imposes
duties on the Creditor to exercise remedies in a commercially reasonable manner
and without prejudice to the ability of the Creditor to dispose of the
Collateral in any such manner, each Debtor acknowledges and agrees that it is
not commercially unreasonable for the Creditor to (or not to):
 
 
(a)
incur expenses reasonably deemed significant by the Creditor to prepare the
Collateral of such Debtor for disposition or otherwise to complete raw material
or work in process into finished goods or other finished products for
disposition;

 
 
(b)
fail to obtain third party consents for access to the Collateral of such Debtor
to be disposed of;

 
 
(c)
fail to exercise collection remedies against account debtors or other Persons
obligated on the Collateral of such Debtor or to remove Liens against the
Collateral of such Debtor;

 
 
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(d)
exercise collection remedies against Account Debtors and other Persons obligated
on the Collateral of such Debtor directly or through the use of collection
agencies and other collection specialists;

 
 
(e)
dispose of Collateral of such Debtor by way of any public or private disposition
(i) as to which on no later than the tenth calendar day prior thereto written
notice thereof is mailed or personally delivered to the applicable Debtor and,
with respect to any public disposition, on no later than the tenth calendar day
prior thereto notice thereof describing in general non-specific terms, the
Collateral to be disposed of is published once in a newspaper of general
circulation in the county where the sale is to be conducted (provided that no
notice of any public or private disposition need be given to such Debtor if the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market); and (ii) which commences at any
time between 8:00 a.m. and 5:00 p.m. (and without limiting the generality of the
foregoing, each Debtor expressly agrees that, with respect to any disposition of
accounts, Receivables, Instruments and Intangibles, it shall be commercially
reasonable for the Creditor to direct any prospective purchaser thereof to
ascertain directly from the applicable Debtor any and all information concerning
the same, including, but not limited to, the terms of payment, aging and
delinquency, if any, the financial condition of any obligor or Account Debtor of
such Debtor thereon or guarantor thereof, and any collateral thereform, public
auction, public tender or private contract, with or without advertising and
without any other formality, and that such sale may be postponed or adjourned by
the Creditor if the Creditor deems it reasonable to do so by an announcement at
the time and place of sale or of such postponed or adjourned sale without giving
a new notice of sale);

 
 
(f)
contact other Persons, whether or not in the same business of such Debtor, for
expressions of interest in acquiring all or any portion of the Collateral of
such Debtor;

 
 
(g)
hire one or more professional auctioneers to assist in the disposition of the
Collateral of such Debtor, whether or not such Collateral is of a specialized
nature or an upset or reserve bid or price is established;

 
 
(h)
dispose of the Collateral of such Debtor by utilizing internet sites that
provide for the auction of assets of the types included in the Collateral or
that have the reasonable capacity of doing so, or that match buyers and sellers
of assets;

 
 
(i)
dispose of assets in wholesale rather than retail markets;

 
 
(j)
disclaim disposition warranties, such as title, possession or quiet enjoyment;

 
 
(k)
purchase insurance or credit enhancements to insure the Creditor against risks
of loss, collection or disposition of the Collateral of such Debtor or to
provide to the Creditor a guaranteed return from the collection or disposition
of such Collateral;

 
 
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(l)
to the extent deemed appropriate by the Creditor, obtain the services of other
brokers, investment bankers, consultants and other professionals to assist the
Creditor in the collection or disposition of any of the Collateral of such
Debtor;

 
 
(m)
dispose of Collateral of such Debtor in whole or in part;

 
 
(n)
dispose of Collateral of such Debtor of to a customer of the Creditor;

 
 
(o)
establish an upset or reserve bid price with respect to Collateral of such
Debtor; and

 
 
(p)
to the extent that reasonable notice is required in respect of a sale of
Collateral of any Debtor, provide notice of such sale to such Debtor by
postage-prepaid mail 10 days prior to the date of such sale.

 
12.           Application of Proceeds. The Proceeds of any sale of the
Collateral of any Debtor pursuant to Sections 10 and 11 hereof shall be applied,
first, to all attorneys fees and other expenses of sale, and second, to the
Obligations in such order as the Creditor shall elect, in its sole
discretion.  The Creditor shall return any excess to the applicable Debtor and
such Debtor shall remain liable for any deficiency to the fullest extent
permitted by law.
 
13.           Grant of Licence.  For the purpose of enabling the Creditor to
exercise its rights and remedies under this Agreement when the Creditor is
entitled to exercise such rights and remedies, and for no other purpose, each
Debtor grants to the Creditor an irrevocable, non-exclusive licence (exercisable
without payment of royalty or other compensation to such Debtor) to use, assign
or sublicense any or all of the Intellectual Property Rights of such Debtor,
including in such licence reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer programs used for
the compilation or printout of the same.  For any trade-marks, get-up and trade
dress and other business indicia, such licence includes an obligation on the
part of the Creditor to maintain the standards of quality maintained by such
Debtor or, in the case of trade-marks, get-up and trade dress or other business
indicia licensed to such Debtor, the standards of quality imposed upon such
Debtor by the relevant licence.  For copyright works, such licence shall include
the benefit of any waivers of moral rights and similar rights.
 
14.           Securities Laws.  The Creditor is authorized, in connection with
any offer or sale of any Pledged Shares of any Debtor, to comply with any
limitation or restriction as it may be advised by counsel is necessary to comply
with applicable Law, including compliance with procedures that may restrict the
number of prospective bidders and purchasers, requiring that prospective bidders
and purchasers have certain qualifications, and restricting prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account or investment and not with a view to the distribution or
resale of such Securities.  In addition to and without limiting Section 11, each
Debtor further agrees that compliance with any such limitation or restriction
shall not result in a sale being considered or deemed not to have been made in a
commercially reasonable manner, and the Creditor shall not be liable or
accountable to such Debtor for any discount allowed by reason of the fact that
such Pledged Shares are sold in compliance with any such limitation or
restriction.  If the Creditor chooses to exercise its right to sell any or all
Pledged Shares of any Debtor, upon written request, such Debtor shall cause each
applicable Pledged Issuer to furnish to the Creditor all such information as the
Creditor may request in order to determine the number of shares and other
instruments included in the Collateral of such Debtor which may be sold by the
Creditor in exempt transactions under any Laws governing securities, and the
rules and regulations of any applicable securities regulatory body thereunder,
as the same are from time to time in effect.
 
 
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15.           ULC Shares.  Each Debtor acknowledges that certain of the
Collateral of such Debtor may now or in the future consist of ULC Shares, and
that it is the intention of the Creditor and each Debtor that the Creditor
should not under any circumstances prior to realization thereon be held to be a
“member” or a “shareholder”, as applicable, of a ULC for the purposes of any ULC
Laws.  Therefore, notwithstanding any provisions to the contrary contained in
this Agreement, the Credit Agreement or any other Loan Document, where a Debtor
is the registered owner of ULC Shares which are Collateral of such Debtor, such
Debtor shall remain the sole registered owner of such ULC Shares until such time
as such ULC Shares are effectively transferred into the name of the Creditor or
any other Person on the books and records of the applicable ULC.  Accordingly,
each Debtor shall be entitled to receive and retain for its own account any
dividend on or other distribution, if any, with respect to such ULC Shares
(except for any dividend or distribution comprised of Pledged Security
Certificates of such Debtor, which shall be delivered to the Creditor to hold
hereunder) and shall have the right to vote such ULC Shares and to control the
direction, management and policies of the applicable ULC to the same extent as
such Debtor would if such ULC Shares were not pledged to the Creditor pursuant
hereto.  Nothing in this Agreement, the Credit Agreement or any other Loan
Document is intended to, and nothing in this Agreement, the Credit Agreement or
any other Loan Document shall, constitute the Creditor or any Person other than
the applicable Debtor, a member or shareholder of a ULC for the purposes of any
ULC Laws (whether listed or unlisted, registered or beneficial), until such time
as notice is given to such Debtor and further steps are taken pursuant hereto or
thereto so as to register the Creditor or such other Person, as specified in
such notice, as the holder of the ULC Shares.  To the extent any provision
hereof would have the effect of constituting the Creditor as a member or a
shareholder, as applicable, of any ULC prior to such time, such provision shall
be severed herefrom and shall be ineffective with respect to ULC Shares which
are Collateral of any Debtor without otherwise invalidating or rendering
unenforceable this Agreement or invalidating or rendering unenforceable such
provision insofar as it relates to Collateral of any Debtor which is not ULC
Shares.  Except upon the exercise of rights of the Creditor to sell, transfer or
otherwise dispose of ULC Shares  in accordance with this Agreement, each Debtor
shall not cause or permit, or enable a Pledged Issuer that is a ULC to cause or
permit, the Creditor to: (a) be registered as a shareholder or member of such
Pledged Issuer; (b) have any notation entered in their favour in the share
register of such Pledged Issuer; (c) be held out as shareholders or members of
such Pledged Issuer; (d) receive, directly or indirectly, any dividends,
property or other distributions from such Pledged Issuer by reason of the
Creditor holding the Security Interests over the ULC Shares; or (e) act as a
shareholder of such Pledged Issuer, or exercise any rights of a shareholder
including the right to attend a meeting of shareholders of such Pledged Issuer
or to vote its ULC  Shares.
 
16.           Application of Proceeds.  All Proceeds of Collateral of any Debtor
received by the Creditor or a Receiver may be applied to discharge or satisfy
any expenses (including the Receiver’s remuneration and other expenses of
enforcing the Creditor’s rights against such Debtor under this Agreement), Liens
on the Collateral of such Debtor in favour of Persons other than the Creditor,
borrowings, taxes and other outgoings affecting the Collateral of such Debtor or
which are considered advisable by the Creditor or the Receiver to protect,
preserve, repair, process, maintain or enhance the Collateral of such Debtor or
prepare it for sale, lease or other disposition, or to keep in good standing any
Liens on the Collateral of such Debtor ranking in priority to any of the
Security Interests, or to sell, lease or otherwise dispose of the Collateral of
such Debtor.  The balance of such Proceeds may, at the sole discretion of the
Creditor, be held as collateral security for the Obligations of the applicable
Debtor or be applied to such of the Obligations of the applicable Debtor
(whether or not the same are due and payable) in such manner and at such times
as the Creditor considers appropriate and thereafter shall be accounted for as
required by Law.
 
 
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17.           Continuing Liability of Debtor.  Each Debtor shall remain liable
for any Obligations of such Debtor that are outstanding following realization of
all or any part of the Collateral of such Debtor and the application of the
Proceeds thereof.
 
18.           Creditor’s Appointment as Attorney-in-Fact.  Effective upon the
occurrence and during the continuance of an Event of Default, each Debtor
constitutes and appoints the Creditor and any officer or agent of the Creditor,
with full power of substitution, as such Debtor’s true and lawful
attorney-in-fact with full power and authority in the place of such Debtor and
in the name of such Debtor or in its own name, from time to time in the
Creditor’s discretion, to take any and all appropriate action and to execute any
and all documents and instruments as, in the opinion of such attorney, may be
necessary or desirable to accomplish the purposes of this Agreement including,
without limiting the generality of the foregoing, the power: (i) to endorse such
Debtor's name on any checks, notes, acceptances, money orders or other forms of
payment or security that come into the Creditor's possession and on
verifications of accounts and on financing statements and other public lien or
security interests records, (ii) after the occurrence and during the continuance
of an Event of Default, to endorse such Debtor’s name on notices of assignment
and other notices to customers or account debtors, (iii) after the occurrence
and during the continuance of an Event of Default, to sign such Debtor's name on
any invoice or bill of lading relating to any Receivable, on drafts against
customers and, on assignments of Receivables, (iv) after the occurrence and
during the continuance of an Event of Default, to notify the post office
authorities to change the address for delivery of such Debtor's mail to an
address designated by the Creditor and to open and dispose of all mail addressed
to such Debtor, and (v) after the occurrence and during the continuance of an
Event of Default, to do all other things the Creditor reasonably deems necessary
to carry out the terms of this Agreement.  Without limiting the effect of this
Section, each Debtor grants the Creditor an irrevocable proxy to vote the
Pledged Shares of such Debtor and to exercise all other rights, powers,
privileges and remedies to which a holder thereof would be entitled (including
giving or withholding written consents of shareholders, calling special meetings
of shareholders and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Shares on the books and records of a Pledged Issuer or Pledged
Securities Intermediary, as applicable), upon the occurrence and during the
continuance of an Event of Default. These powers are coupled with an interest
and are irrevocable until the Release Date.  Nothing in this Section affects the
right of the Creditor as secured party or any other Person on the Creditor’s
behalf, to sign and file or deliver (as applicable) all such financing
statements, financing change statements, notices, verification statements and
other documents relating to the Collateral and this Agreement as the Creditor or
such other Person considers appropriate.  Each Debtor hereby ratifies and
confirms, and agrees to ratify and confirm, whatever lawful acts the Creditor or
any of the Creditor’s sub-agents, nominees or attorneys do or purport to do in
exercise of the power of attorney granted to the Creditor pursuant to this
Section.
 
 
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19.           Performance by Creditor of Debtor’s Obligations.  If any Debtor
fails to perform or comply with any of the obligations of such Debtor under this
Agreement, the Creditor may, but need not, perform or otherwise cause the
performance or compliance of such obligation, provided that such performance or
compliance shall not constitute a waiver, remedy or satisfaction of such
failure.  The expenses of the Creditor incurred in connection with any such
performance or compliance shall be payable by such Debtor to the Creditor
immediately on demand, and until paid, any such expenses shall form part of the
Obligations of such Debtor and shall be secured by the Security Interests of
such Debtor.
 
20.           Interest.  If any amount payable by any Debtor to the Creditor
under this Agreement is not paid when due, such Debtor shall pay to the
Creditor, immediately on demand, interest on such amount from the date due until
paid, at the Default Rate.  All amounts payable by such Debtor to the Creditor
under this Agreement, and all interest on all such amounts, compounded monthly
on the last Business Day of each month, shall form part of the Obligations of
such Debtor and shall be secured by the Security Interests of such Debtor.
 
21.           Severability.  Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such prohibition or unenforceability and shall be
severed from the balance of this Agreement, all without affecting the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
 
22.           Rights of Creditor; Limitations on Creditor’s Obligations.
 
 
(a)
Limitations on Creditor’s Liability.  The Creditor shall not be liable to any
Debtor or any other Person for any failure or delay in exercising any of the
rights of such Debtor under this Agreement (including any failure to take
possession of, collect, sell, lease or otherwise dispose of any Collateral of
such Debtor, or to preserve rights against prior parties).  Neither the
Creditor, a Receiver nor any agent of the Creditor (including, in Alberta or
British Columbia, any sheriff) is required to take, or shall 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 Collateral of any Debtor in its
possession.  Neither the Creditor, any Receiver nor any agent of the Creditor
shall be liable for any, and each Debtor shall bear the full risk of all, loss
or damage to any and all of the Collateral of such Debtor (including any
Collateral in the possession of the Creditor, any Receiver or any agent of the
Creditor) caused for any reason other than the gross negligence or wilful
misconduct of the Creditor, such Receiver or such agent of the Creditor.

 
 
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(b)
Preservation of Collateral. The Creditor may, in its Permitted Discretion, at
any time following notice to the applicable Debtor (provided that no such notice
shall be required after the occurrence and during the continuance of an Event of
Default) discharge any lien or encumbrance on the Collateral of such Debtor
(including any past due rent or other obligations owing to any landlord,
warehouseman or bailee on whose property any of the Collateral of such Debtor is
stored) or bond the same, pay any insurance, maintain guards, pay any service
bureau, obtain any record or take any other action to preserve the Collateral of
such Debtor and charge the cost thereof to the applicable Debtor's loan
account(s) as an Obligation of such Debtor secured by the Collateral of such
Debtor. The Creditor shall have the right, at any time, whether or not an Event
of Default has occurred, without notice to or assent of any Debtor, in the
Creditor’s name, in the name of any Debtor or in the name of a nominee of the
Creditor, to verify the validity, amount or any other matter relating to the
Receivables or the other Collateral of any Debtor, by mail, telephone or
otherwise (except that, notwithstanding anything to the contrary contained in
the foregoing, unless an Event of Default has occurred and is continuing, the
Creditor shall conduct all such verifications in the name of and/or on behalf of
the applicable Debtor and not in the Creditor’s own name or the name of any
nominee of the Creditor).

 
 
(c)
Debtor Remains Liable under Receivables and Contracts.  Notwithstanding any
provision of this Agreement, each Debtor shall remain liable under each of the
documents giving rise to the Receivables of such Debtor and under each of the
Contracts of such Debtor to observe and perform all the conditions and
obligations to be observed and performed by such Debtor thereunder, all in
accordance with the terms of each such document and Contract.  The Creditor
shall have no obligation or liability under any Receivable of any Debtor (or any
document giving rise thereto) or Contract of any Debtor by reason of or arising
out of this Agreement or the receipt by the Creditor of any payment relating to
such Receivable or Contract pursuant hereto, and in particular (but without
limitation), the Creditor shall not be obligated in any manner to perform any of
the obligations of any Debtor under or pursuant to any Receivable of such Debtor
(or any document giving rise thereto) or under or pursuant to any Contract of
such Debtor to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Receivable of such Debtor (or any document
giving rise thereto) or under any Contract of such Debtor, to present or file
any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time.

 
 
(d)
[Reserved].

 
 
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(e)
Analysis of Receivables.  At any time and from time to time, the Creditor shall
have the right to analyze and verify the Receivables of any Debtor in any manner
and through any medium that it reasonably considers advisable, and each Debtor
shall furnish all such assistance and information as the Creditor may require in
connection therewith.  At any time and from time to time, the Creditor may in
its own name or in the name of others (including any Debtor) communicate with
Account Debtors on the Receivables of any Debtor and parties to the Contracts of
any Debtor to verify with them to its satisfaction the existence, status, amount
and terms of any Receivable or any Contract of any Debtor.  At any time and from
time to time, upon the Creditor’s reasonable request and at the expense of the
applicable Debtor, such Debtor shall furnish to the Creditor (i) reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables of such Debtor and (ii) any documents evidencing and relating to the
agreements and transactions which gave rise to the Receivables and the Contracts
of such Debtor, including all original orders, invoices and shipping receipts

 
 
(f)
Use of Agents. The Creditor may perform any of its rights or duties under this
Agreement by or through agents and is entitled to retain counsel and to act in
reliance on the advice of such counsel concerning all matters pertaining to its
rights and duties under this Agreement.

 
23.           Dealings by Creditor.  The Creditor shall not be obliged to
exhaust its recourse against any Debtor or any other Person or against any other
security it may hold with respect to the Obligations of such Debtor or any part
thereof before realizing upon or otherwise dealing with the Collateral of such
Debtor in such manner as the Creditor may consider desirable.  The Creditor may
grant extensions of time and other indulgences, take and give up security,
accept compositions, grant releases and discharges and otherwise deal with any
Debtor and any other Person, and with any or all of the Collateral of such
Debtor, and with other security and sureties, as the Creditor may see fit, all
without prejudice to the Obligations of any Debtor or to the rights and remedies
of the Creditor under this Agreement.  The powers conferred on the Creditor
under this Agreement are solely to protect the interests of the Creditor in the
Collateral of each Debtor and shall not impose any duty upon the Creditor to
exercise any such powers.
 
24.           Communication.  Any notice or other communication required or
permitted to be given under this Agreement will be made in accordance with the
terms of the Credit Agreement, or in the case of a party which has become a
Debtor pursuant to Section 36 hereof, in accordance with the terms of the Credit
Agreement to the address or facsimile number specified on the signature page of
the applicable Supplement, or to such other address as the relevant Debtor may
specify from time to time.
 
25.           Release of Information.  Each Debtor authorizes the Creditor to
provide a copy of this Agreement and such other information as may be requested
of the Creditor (i) to the extent necessary to enforce the Creditor’s rights,
remedies and entitlements under this Agreement, (ii) to any assignee or
prospective assignee of all or any part of the Obligations, and (iii) as
required by applicable Law.
 
 
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26.           Expenses; Indemnity; Waiver.
 
 
(a)
Each Debtor shall pay (i) all reasonable out-of-pocket expenses incurred by the
Creditor, including the reasonable fees, charges and disbursements of counsel
for the Creditor and all applicable taxes, in connection with the preparation
and administration of this Agreement, (ii) all reasonable out-of-pocket expenses
incurred by the Creditor, including the reasonable fees, charges and
disbursements of counsel for the Creditor and applicable taxes, in connection
with any amendments, modifications or waivers of the provisions hereof, and
(iii) all out-of-pocket expenses incurred by the Creditor, including the fees,
charges and disbursements of any counsel for the Creditor and all applicable
taxes, in connection with the assessment, enforcement or protection of their
rights in connection with this Agreement, including its rights under this
Section, including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations with respect to the Obligations of such Debtor.

 
 
(b)
Each Debtor shall indemnify the Creditor against, and hold the Creditor harmless
from, any and all losses, claims, cost recovery actions, damages, expenses and
liabilities of whatsoever nature or kind and all reasonable out-of-pocket
expenses  and all applicable taxes to which the Creditor may become subject
arising out of or in connection with (i) the execution or delivery of this
Agreement and the performance by such Debtor of its obligations hereunder,
(ii) any actual or prospective claim, litigation, investigation or proceeding
relating to this Agreement or the Obligations of such Debtor, whether based on
contract, tort or any other theory and regardless of whether the Creditor is a
party thereto, (iii) any other aspect of this Agreement, or (iv) the enforcement
of the Creditor’s rights hereunder and any related investigation, defence,
preparation of defence, litigation and enquiries; provided that such indemnity
shall not, as to the Creditor, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence (it being acknowledged that ordinary negligence does not
necessarily constitute gross negligence) or wilful misconduct of or material
breach of this Agreement by the Creditor.

 
 
(c)
No Debtor shall assert, and each Debtor hereby waives (to the fullest extent
permitted by applicable Law), (i) any claim against the Creditor (or any
director, officer or employee thereof), on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
and (ii) all of the rights, benefits and protections given by any present or
future statute that imposes limitations on the rights, powers or remedies of a
secured party or on the methods of, or procedures for, realization of security,
including any “seize or sue” or “anti-deficiency” statute or any similar
provision of any other statute.

 
 
(d)
All amounts due under this Section shall be payable not later than three
Business Days after written demand therefor.

 
 
(e)
The indemnifications set out in this Section shall survive the Release Date and
the release or extinguishment of the Security Interests.

 
 
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27.           Release of Debtor.  Upon the written request of any Debtor given
at any time on or after the Release Date, the Creditor shall, at the expense of
such Debtor, release such Debtor and the Collateral of such Debtor from the
Security Interests and such release shall serve to terminate any licence granted
in this Agreement.  Upon such release, and at the request and expense of such
Debtor, the Creditor shall execute and deliver to such Debtor such releases and
discharges as such Debtor may reasonably request.
 
28.           Additional Security.  This Agreement is in addition to, and not in
substitution of, any and all other security previously or concurrently delivered
by any Debtor or any other Person to the Creditor, all of which other security
shall remain in full force and effect.
 
29.           Alteration or Waiver.  None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by the Creditor.  The Creditor shall not, by any act
or delay, be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Event of Default or in any breach of any of the terms and
conditions hereof.  No failure to exercise, nor any delay in exercising, on the
part of the Creditor, any right, power or privilege hereunder shall operate as a
waiver thereof.  No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.  A waiver by the Creditor of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Creditor would otherwise have on any future
occasion.  Neither the taking of any judgment nor the exercise of any power of
seizure or sale shall extinguish the liability of any Debtor to pay the
Obligations of such Debtor, nor shall the same operate as a merger of any
covenant contained in this Agreement or of any other liability, nor shall the
acceptance of any payment or other security constitute or create any novation.
 
30.           Environmental Licence and Indemnity.  Each Debtor hereby grants to
the Creditor and its employees and agents an irrevocable and non-exclusive
licence, subject to the rights of tenants, to enter any of the premises of such
Debtor to conduct audits, testing and monitoring with respect to hazardous
substances and to remove and analyze any hazardous substance at the cost and
expense of such Debtor (which cost and expense shall form part of the
Obligations of such Debtor and shall be payable immediately on demand and
secured by the Security Interests created by this Agreement).
 
31.           Amalgamation.  If any Debtor is a corporation, such Debtor
acknowledges that if it amalgamates or merges with any other corporation or
corporations, then (i) the Collateral and the Security Interests of such Debtor
shall extend to and include all the property and assets of the amalgamated
corporation and to any property or assets of the amalgamated corporation
thereafter owned or acquired, (ii) the term “Debtor”, where used in this
Agreement, shall extend to and include the amalgamated corporation, and (iii)
the term “Obligations”, where used in this Agreement, shall extend to and
include the Obligations of the amalgamated corporation.
 
32.           Governing Law; Attornment.  This Agreement shall be governed by
and construed in accordance with the Laws of the Province of Ontario, and the
federal Laws of Canada applicable therein.  Without prejudice to the ability of
the Creditor to enforce this Agreement in any other proper jurisdiction, each
Debtor irrevocably submits and attorns to the non-exclusive jurisdiction of the
courts of such province.  To the extent permitted by applicable Law, each Debtor
irrevocably waives any objection (including any claim of inconvenient forum)
that it may now or hereafter have to the venue of any legal proceeding arising
out of or relating to this Agreement in the courts of such Province.
 
 
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33.           Interpretation.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word
“or” is disjunctive; the word “and” is conjunctive.  The word “shall” is
mandatory; the word “may” is permissive.  Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set out herein), (b) any reference herein to any statute or any section thereof
shall, unless otherwise expressly stated, be deemed to be a reference to such
statute or section as amended, restated or re-enacted from time to time, (c) any
reference herein to any Person shall be construed to include such Person’s
successors and permitted assigns, (d) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, and
(e) all references herein to Sections shall be construed to refer to Sections of
this Agreement, Section headings are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.  Any reference in this
Agreement to a Permitted Lien is not intended to subordinate or postpone, and
shall not be interpreted as subordinating or postponing, or as any agreement to
subordinate or postpone, any Security Interest to any Permitted Lien.
 
34.           Paramountcy.  In the event of any conflict or inconsistency
between the provisions of this Agreement and the provisions of the Credit
Agreement then, notwithstanding anything contained in this Agreement, the
provisions contained in the Credit Agreement shall prevail to the extent of such
conflict or inconsistency and the provisions of this Agreement shall be deemed
to be amended to the extent necessary to eliminate such conflict or
inconsistency, it being understood that the purpose of this Agreement is to add
to, and not detract from, the rights granted to the Creditor under the Credit
Agreement.  If any act or omission of any or all Debtors is expressly permitted
under the Credit Agreement but is expressly prohibited under this Agreement,
such act or omission shall be permitted.  If any act or omission is expressly
prohibited under this Agreement, but the Credit Agreement does not expressly
permit such act or omission, or if any act is expressly required to be performed
under this Agreement but the Credit Agreement does not expressly relieve any or
all Debtors from such performance, such circumstance shall not constitute a
conflict between the applicable provisions of this Agreement and the provisions
of the Credit Agreement.
 
35.           Successors and Assigns.  This Agreement shall enure to the benefit
of, and be binding on, each Debtor and its successors and permitted assigns, and
shall enure to the benefit of, and be binding on, the Creditor and its
successors and assigns.  No Debtor may assign this Agreement, or any of its
rights or obligations under this Agreement.  The Creditor may assign this
Agreement and any of its rights and obligations hereunder to any Person.  If any
Debtor or the Creditor is an individual, then the term “Debtor” or “Creditor”,
as applicable, shall also include his or her heirs, administrators and
executors.
 
 
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36.           Additional Debtors.  Additional Persons may from time to time
after the date of this Agreement become Debtors under this Agreement by
executing and delivering to the Creditor a supplemental agreement (a
“Supplement”) to this Agreement, in substantially the form attached hereto as
Exhibit A.  Effective from and after the date of the execution and delivery by
any Person to the Creditor of a Supplement:
 
 
(i)
such Person shall be, and shall be deemed for all purposes to be, a Debtor under
this Agreement with the same force and effect, and subject to the same
agreements, representations, indemnities, liabilities, obligations and Security
Interests, as if such Person had been an original signatory to this Agreement as
a Debtor; and

 
 
(ii)
all Collateral of such Person shall be subject to the Security Interest from
such Person as security for the due payment and performance of the “Liabilities”
of such Person in accordance with the provisions of this Agreement.

 
The execution and delivery of a Supplement by any additional Person shall not
require the consent of any Debtor and all of the Obligations of each Debtor and
the Security Interests granted thereby shall remain in full force and effect,
notwithstanding the addition of any new Debtor to this Agreement.
 
37.           Acknowledgment of Receipt/Waiver.  The Debtor acknowledges receipt
of an executed copy of this Agreement and, to the extent permitted by applicable
Law, waives the right to receive a copy of any financing statement or financing
change statement registered in connection with this Agreement or any
verification statement issued with respect to any such financing statement or
financing change statement.
 
38.           Electronic Signature.  Delivery of an executed signature page to
this Agreement by any Debtor by facsimile or other electronic form of
transmission shall be as effective as delivery by such Debtor of a manually
executed copy of this Agreement by such Debtor. This Agreement may be executed
in counterparts (any by different parties hereto on different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract.
 
[signatures on the next following pages]
 
 
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IN WITNESS WHEREOF the undersigned has caused this Agreement to be duly executed
as of the date first written above.
 
 

 
EMTEC INFRASTRUCTURE SERVICES CANADA CORPORATION
       
 
By:
/s/ Stephen C. Donnelly             
Name:  Stephen C. Donnelly
     
Title:  Treasurer
         

 
Signature Page to Emtec GSA
 
 
 

--------------------------------------------------------------------------------

 
 
 EXHIBIT A
 
FORM OF SUPPLEMENT
TO
GENERAL SECURITY AGREEMENT
 
TO:
Name: De Lage Landen Financial Services Canada Inc.

 
Address: 1235 North Service Road West, Suite 100, Oakville, Ontario L6M 2W2

 
Attention: David G. Timms

 
Facsimile: (877) 500-5356 with a copy to (800) 347-3936

 
RECITALS:
 
A.           Reference is made to the General Security Agreement (the “Security
Agreement”) dated as of June 23, 2011 entered into by Emtec Infrastructure
Services Canada Corporation and certain of their affiliates which thereafter
sign a Supplement, in favour of the Creditor.
 
B.           Capitalized terms used but not otherwise defined in this Supplement
have the respective meanings given to such terms in the Security Agreement,
including the definitions of terms incorporated in the Security Agreement by
reference to other agreements.
 
C.           Section 36 of the Security Agreement provides that additional
Persons may from time to time after the date of the Security Agreement become
Debtors under the Security Agreement by executing and delivering to the Creditor
a supplemental agreement to the Security Agreement in the form of this
Supplement.
 
D.           The undersigned (the “New Debtor”) has agreed to become a Debtor
under the Security Agreement by executing and delivering this Supplement to the
Creditor.
 
For good and valuable consideration, the receipt and adequacy of which are
acknowledged by the New Debtor, the New Debtor agrees with and in favour of the
Creditor (for its own benefit and for the benefit of the Secured Parties) as
follows:

1.           The New Debtor has received a copy of, and has reviewed, the
Security Agreement and is executing and delivering this Supplement to the
Creditor pursuant to Section 36 of the Security Agreement.
 
2.           Effective from and after the date this Supplement is executed and
delivered to the Creditor by the New Debtor:
 
 
(a)
the New Debtor shall be, and shall be deemed for all purposes to be, a Debtor
under the Security Agreement with the same force and effect, and subject to the
same agreements, representations, indemnities, liabilities, obligations and
Security Interests, as if the New Debtor had been, as of the date of this
Supplement, an original signatory to the Security Agreement as a Debtor; and

 
 
(b)
all Collateral of the New Debtor shall be subject to the Security Interests
granted by the New Debtor as security for the due payment and performance of the
Liabilities of the New Debtor in accordance with the provisions of the Security
Agreement.

 
 
 

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In furtherance of the foregoing, the New Debtor, as general and continuing
collateral security for the due payment and performance of its Obligations,
pledges, mortgages, charges and assigns (by way of security) to the Creditor
(for its own benefit and for the benefit of the other Secured Parties), and
grants to the Creditor (for its own benefit and for the benefit of the other
Secured Parties) a security interest in, the Collateral of the New Debtor.  The
terms and provisions of the Security Agreement are incorporated by reference in
this Supplement.
 
3.           The New Debtor represents and warrants to the Creditor (for its own
benefit and for the benefit of the other Secured Parties) that each of the
representations and warranties made or deemed to have been made by it under the
Security Agreement as a Debtor are true and correct on the date of this
Supplement.
 
4.           All of the information set out in the Perfection Certificate
delivered concurrently with this Supplement with respect to the New Debtor is
accurate and complete as of the date of this Supplement.
 
5.           Upon this Supplement bearing the signature of any Person claiming
to have authority to bind the New Debtor coming into the possession of the
Creditor, this Supplement and the Security Agreement shall be deemed to be
finally and irrevocably executed and delivered by, and be effective and binding
on, and enforceable against, the New Debtor free from any promise or condition
affecting or limiting the liabilities of the New Debtor.  No statement,
representation, agreement or promise by any officer, employee or agent of the
Creditor, unless expressly set forth in this Supplement, forms any part of this
Supplement or has induced the New Debtor to enter into this Supplement and the
Security Agreement or in any way affects any of the agreements, obligations or
liabilities of the New Debtor under this Supplement and the Security Agreement.
 
6.           Delivery of an executed signature page to this Supplement by the
New Debtor by facsimile or other electronic transmission shall be as effective
as delivery by the New Debtor of a manually executed copy of this Supplement by
the New Debtor.
 
7.           This Supplement shall be governed by and construed in accordance
with the laws of the Province of Ontario, and the federal laws of Canada
applicable therein.
 
8.           This Supplement and the Security Agreement shall be binding upon
the New Debtor and its successors.  The New Debtor shall not assign its rights
and obligations under this Supplement or the Security Agreement, or any of its
rights or obligations in this Supplement or the Security Agreement.
 
 
 

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Dated:
 
__________________
   
Address:
 
Attention:
Facsimile:
_________________________
_________________________
_________________________
_________________________
 
 
 
 
 
[NEW DEBTOR]
 
 
By:   ________________________________    
Name:
Title: