Exhibit 10.6

 

WILLIAMS SCOTSMAN OF CANADA, INC.

 

as Guarantor

 

- to and in favour of -

 

BANK OF AMERICA, N.A.
DEUTSCHE BANK TRUST COMPANY AMERICAS
CITICORP USA, INC.
WELLS FARGO BANK, N.A.
LEHMAN COMMERCIAL PAPER INC.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
AND
THE OTHER FINANCIAL INSTITUTIONS
PARTY FROM TIME TO TIME TO THE AMENDED AND RESTATED CREDIT
AGREEMENT
AND
THE INTEREST RATE CREDITORS

 

collectively, as Secured Creditors

 

and

 

BANK OF AMERICA, N.A.

 

as Collateral Agent

 

 

AMENDED AND RESTATED CANADIAN SUBSIDIARY GUARANTEE

 

June 28, 2005

 

 

DAVIES WARD PHILLIPS & VINEBERG LLP

 

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AMENDED AND RESTATED CANADIAN SUBSIDIARY GUARANTEE

 

Guarantee dated as of March 26, 2002, amended and restated as of June 28, 2005,
made by WILLIAMS SCOTSMAN OF CANADA, INC., a corporation incorporated and
existing under the laws of the Province of Ontario, to and in favour of the
Secured Creditors.

 

WHEREAS:

 

(A)           WILLIAMS SCOTSMAN INTERNATIONAL, INC. (FORMERLY KNOWN AS SCOTSMAN
HOLDINGS, INC.) (“HOLDINGS”) AND WILLIAMS SCOTSMAN, INC. (THE “BORROWER”), ARE
PARTIES TO A CERTAIN CREDIT AGREEMENT, DATED AS OF MARCH 26, 2002, WITH THE
LENDERS PARTY THERETO, DEUTSCHE BANK TRUST COMPANY AMERICAS (“DBTCA”), AS
ADMINISTRATIVE AGENT, AND CERTAIN OTHER PERSONS, AS AMENDED BY A FIRST
AMENDMENT, DATED AS OF FEBRUARY 27, 2003, A SECOND AMENDMENT, DATED AS OF
AUGUST 11, 2003, A THIRD AMENDMENT, DATED AS OF DECEMBER 22, 2003, A FOURTH
AMENDMENT, DATED AS OF SEPTEMBER 24, 2004 AND A FIFTH AMENDMENT, DATED AS OF
APRIL 15, 2005 (AS SO AMENDED, THE “EXISTING CREDIT AGREEMENT”);

 

(B)           THE GUARANTOR IS THE WHOLLY-OWNED SUBSIDIARY (AS CONSTRUED IN
ACCORDANCE WITH THE BUSINESS CORPORATIONS ACT (ONTARIO)) OF THE BORROWER;

 

(C)           IT WAS A CONDITION PRECEDENT TO THE MAKING OF LOANS TO, AND THE
ISSUANCE OF, AND PARTICIPATION IN, LETTERS OF CREDIT FOR THE ACCOUNT OF THE
BORROWER UNDER THE EXISTING CREDIT AGREEMENT THAT THE GUARANTOR SHALL HAVE
EXECUTED AND DELIVERED THE CANADIAN SUBSIDIARY GUARANTEE, DATED AS OF MARCH 26,
2002 (AS AMENDED, MODIFIED OR SUPPLEMENTED THROUGH, BUT NOT INCLUDING, THE
EFFECTIVE DATE, THE “ORIGINAL CANADIAN SUBSIDIARY GUARANTEE”);

 

(D)           BANK OF AMERICA, N.A. (“BOFA”) AND DBTCA HAVE PURCHASED FROM THE
OTHER LENDERS PARTY TO THE EXISTING CREDIT AGREEMENT ALL OF SUCH LENDERS’ RIGHT,
TITLE AND INTEREST IN AND TO THE EXISTING CREDIT AGREEMENT AND THE DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION THEREWITH (WITH CERTAIN
EXCEPTIONS), ALL PURSUANT TO A CERTAIN ASSIGNMENT AND ASSUMPTION AGREEMENT (THE
“BANK ASSIGNMENT AGREEMENT”), DATED AS OF THE EFFECTIVE DATE, AMONG BOFA, DBTCA,
THE OTHER LENDERS PARTY TO THE EXISTING CREDIT AGREEMENT, THE ADMINISTRATIVE
AGENT AND COLLATERAL AGENT UNDER THE EXISTING CREDIT AGREEMENT, THE BORROWER AND
HOLDINGS;

 

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(E)           HOLDINGS, THE BORROWER, THE FINANCIAL INSTITUTIONS FROM TIME TO
TIME PARTY THERETO (THE “LENDERS”), BOFA, AS ADMINISTRATIVE AGENT (TOGETHER WITH
ANY SUCCESSOR ADMINISTRATIVE AGENT, THE “ADMINISTRATIVE AGENT”), DBTCA, AS
SYNDICATION AGENT, CITICORP USA, INC., WELLS FARGO BANK, N.A. AND LEHMAN
COMMERCIAL PAPER INC., AS CO-DOCUMENTATION AGENTS, AND BANC OF AMERICA
SECURITIES LLC AND DEUTSCHE BANK SECURITIES INC., AS CO-LEAD ARRANGERS AND JOINT
BOOK RUNNERS, DESIRE TO AMEND AND RESTATE THE EXISTING CREDIT AGREEMENT IN ITS
ENTIRETY AND HAVE ENTERED INTO AN AMENDED AND RESTATED CREDIT AGREEMENT, DATED
AS OF THE EFFECTIVE DATE, (AS FURTHER AMENDED, MODIFIED, EXTENDED, RENEWED,
REPLACED, RESTATED OR SUPPLEMENTED FROM TIME TO TIME, AND INCLUDING ANY
AGREEMENT OR AGREEMENTS EXTENDING THE MATURITY OF, OR REFINANCING OR
RESTRUCTURING (INCLUDING, BUT NOT LIMITED TO, THE INCLUSION OF ADDITIONAL
BORROWERS OR GUARANTORS THEREUNDER OR ANY INCREASE IN THE AMOUNT BORROWED) ALL
OR ANY PORTION OF, THE INDEBTEDNESS UNDER SUCH AGREEMENT OR ANY SUCCESSOR
AGREEMENT OR AGREEMENTS, WHETHER OR NOT WITH THE SAME AGENT, TRUSTEE,
REPRESENTATIVE, LENDERS OR HOLDERS, THE “AMENDED AND RESTATED CREDIT
AGREEMENT”), PROVIDING FOR THE AMENDMENT AND RESTATEMENT OF THE EXISTING CREDIT
AGREEMENT AND THE MAKING OF LOANS AND THE ISSUANCE OF, AND PARTICIPATION IN,
LETTERS OF CREDIT FOR THE ACCOUNT OF THE BORROWER AS CONTEMPLATED THEREIN (THE
LENDERS, EACH ISSUING LENDER, THE ADMINISTRATIVE AGENT AND ITS AFFILIATES, THE
COLLATERAL AGENT AND EACH OTHER AGENT (AS DEFINED IN THE AMENDED AND RESTATED
CREDIT AGREEMENT) ARE HEREIN CALLED THE “BANK CREDITORS”);

 

(F)            THE BORROWER MAY FROM TIME TO TIME BE PARTY TO ONE OR MORE
INTEREST RATE AGREEMENTS (INCLUDING, WITHOUT LIMITATION, INTEREST RATE SWAPS,
CAPS, FLOORS, COLLARS, AND SIMILAR AGREEMENTS) (COLLECTIVELY, THE “INTEREST RATE
AGREEMENTS”) WITH BOFA, ANY LENDER, ANY AFFILIATE THEREOF OR A SYNDICATE OF
FINANCIAL INSTITUTIONS ORGANIZED BY BOFA OR AN AFFILIATE OF BOFA (EVEN IF BOFA
OR ANY SUCH LENDER CEASES TO BE A LENDER UNDER THE AMENDED AND RESTATED CREDIT
AGREEMENT FOR ANY REASON), AND ANY INSTITUTION THAT PARTICIPATES, AND IN EACH
CASE THEIR SUBSEQUENT ASSIGNS, IN SUCH INTEREST RATE AGREEMENT (COLLECTIVELY,
THE “INTEREST RATE CREDITORS”, AND THE INTEREST RATE CREDITORS TOGETHER WITH THE
BANK CREDITORS, COLLECTIVELY, THE “SECURED CREDITORS”);

 

(G)           IT IS A CONDITION TO THE EFFECTIVENESS OF THE AMENDMENT AND
RESTATEMENT OF THE EXISTING CREDIT AGREEMENT AS CONTEMPLATED BY THE AMENDED AND
RESTATED CREDIT AGREEMENT AND TO THE MAKING OF LOANS TO THE BORROWER AND THE
ISSUANCE OF, AND PARTICIPATION IN, LETTERS OF CREDIT FOR THE ACCOUNT OF THE
BORROWER UNDER THE AMENDED AND RESTATED CREDIT

 

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Agreement that the Guarantor shall have executed and delivered this Guarantee;
and

 

(H)           THE GUARANTOR WILL OBTAIN BENEFITS FROM THE AFORESAID AMENDMENT
AND RESTATEMENT OF THE EXISTING CREDIT AGREEMENT AND FROM THE INCURRENCE OF
LOANS BY THE BORROWER AND THE ISSUANCE OF LETTERS OF CREDIT FOR THE ACCOUNT OF
THE BORROWER UNDER THE AMENDED AND RESTATED CREDIT AGREEMENT AND THE BORROWER’S
ENTERING INTO INTEREST RATE AGREEMENTS AND, ACCORDINGLY, DESIRES TO EXECUTE THIS
GUARANTEE IN ORDER TO SATISFY THE CONDITIONS DESCRIBED IN THE PRECEDING
PARAGRAPH AND TO INDUCE THE LENDERS TO MAKE LOANS TO THE BORROWER AND
PARTICIPATE IN LETTERS OF CREDIT TO INDUCE THE ISSUING LENDER TO ISSUE LETTERS
OF CREDIT FOR THE ACCOUNT OF THE BORROWER AND TO INDUCE THE INTEREST RATE
CREDITORS TO ENTER INTO INTEREST RATE AGREEMENTS WITH THE BORROWER;

 

(I)            THE GUARANTOR HAS, CONTEMPORANEOUSLY HEREWITH, EXECUTED AND
DELIVERED TO THE COLLATERAL AGENT FOR THE BENEFIT OF AND AS AGENT OF THE SECURED
CREDITORS, THE GUARANTOR SECURITY DOCUMENTS AS CONTINUING COLLATERAL SECURITY
FOR THE OBLIGATIONS OF THE GUARANTOR UNDER THIS GUARANTEE.

 

NOW THEREFORE, in consideration of the foregoing and other benefits accruing to
the Guarantor, the receipt and sufficiency of which are hereby acknowledged, the
Guarantor hereby makes the following representations and warranties to the
Secured Creditors and hereby covenants and agrees with each Secured Creditor as
follows:

 

ARTICLE 1
DEFINITIONS

 

SECTION 1.1            DEFINED TERMS.

 

As used in this Guarantee and the recitals hereto, the following terms have the
following meanings:

 

“Administrative Agent” means BofA acting as administrative agent for the Lenders
under the Amended and Restated Credit Agreement and any successor appointed
pursuant to the Amended and Restated Credit Agreement, and its permitted
assigns.

 

“Amended and Restated Credit Agreement” means the amended and restated credit
agreement dated as of the Effective Date among Holdings, the Borrower, the
Lenders, the Administrative Agent, Deutsche Bank Trust Company Americas, as
syndication agent, Citicorp USA, Inc., Wells Fargo

 

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Bank, N.A. and Lehman Commercial Paper Inc., as co-documentation agents, and
Banc of America Securities LLC and Deutsche Bank Securities Inc., as co-lead
arrangers and joint book runners, as the same may from time to time be amended,
modified, extended, renewed, restated, or supplemented and including any
agreement extending the maturity of (including the inclusion of additional
borrowers thereunder or any increase in the amount borrowed) all or any portion
of the indebtedness under such agreement.

 

“Amended and Restated Credit Agreement Obligations” has the meaning ascribed
thereto in Section 2.1(1)(a).

 

“Bank Creditors” means, collectively, the Lenders, the Collateral Agent, the
Issuing Lender, the Syndication Agent, the Co-Documentation Agent, the
Administrative Agent and the Co-Lead Arrangers and Joint Book Runners.

 

“Borrower” means Williams Scotsman, Inc., a corporation incorporated and
existing under the laws of the State of Maryland, and its successors and
permitted assigns.

 

“BofA” means Bank of America, N.A. and any successor thereto.

 

“Business Day” means any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day in which banking
institutions are authorized by law or other governmental actions to close.

 

“Class” has the meaning ascribed thereto in Section 5.5.

 

“Co-Documentation Agent” means, collectively, Citicorp USA, Inc., Wells Fargo
Bank, N.A. and Lehman Commercial Paper Inc. acting as co-documentation agents
under the Amended and Restated Credit Agreement and any successors appointed
pursuant to the Amended and Restated Credit Agreement, and their respective
permitted assigns.

 

“Co-Lead Arrangers and Joint Book Runners” means Banc of America Securities LLC
and Deutsche Bank Securities Inc., as the co-lead arrangers and joint book
runners, and their respective successors and permitted assigns.

 

“Collateral Agent” means BofA acting as collateral agent for the Secured
Creditors, and any successor thereto appointed pursuant to the Amended and
Restated Credit Agreement, and its permitted assigns.

 

“Credit Documents” means, collectively, the Amended and Restated Credit
Agreement and all other Credit Documents (as such term is defined in the Amended
and Restated Credit Agreement).

 

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“Credit Parties” means, collectively, Holdings, the Borrower and the Subsidiary
Guarantors.

 

“Effective Date” means June 28, 2005.

 

“Event of Default” means any Event of Default under, and as defined in, the
Amended and Restated Credit Agreement and shall in any event include any payment
default on any of the Guaranteed Obligations after the expiration of any
applicable grace period.

 

“Guarantee” means this guarantee as amended, modified or supplemented from time
to time.

 

“Guaranteed Obligations” means, collectively, the Amended and Restated Credit
Agreement Obligations and the Interest Rate Obligations.

 

“Guarantor” means Williams Scotsman of Canada, Inc., a corporation incorporated
and existing under the laws of the Province of Ontario, and its successors and
permitted assigns.

 

“Guarantor Security Documents” means the amended and restated security agreement
of even date herewith made by the Guarantor in favour of the Collateral Agent
and any other security granted to the Collateral Agent or any Secured Creditor
as security for the obligations of the Guarantor under this Guarantee and the
other Credit Documents to which it is a party.

 

“Holdings” means Williams Scotsman International, Inc. and its successors.

 

“Insolvency Legislation” means any law relating to bankruptcy, insolvency,
reorganization or relief of debtors including the Companies’ Creditors
Arrangement Act (Canada), the Bankruptcy and Insolvency Act (Canada), Title 11
of the United States Code entitled “Bankruptcy” or any comparable or similar
legislation in effect in any applicable jurisdiction.

 

“Intercorporate Indebtedness” has the meaning ascribed thereto in
Section 3.5(1).

 

“Interest Rate Agreement” means any interest rate agreement (including interest
rate swaps, caps, floors, collars and similar agreements) between the Borrower
and any Interest Rate Creditor.

 

“Interest Rate Creditors” means, collectively, any Lender or a syndicate of
financial institutions organized by BofA or an affiliate of BofA (even if BofA
or any such Lender subsequently ceases to be a Lender under the Amended and
Restated Credit Agreement for any reason) and any institution that

 

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participates, and in each case their subsequent assigns, in any Interest Rate
Agreement with the Borrower. 

 

“Interest Rate Obligations” has the meaning ascribed thereto in
Section 2.1(1)(b).

 

“Issuing Lender” has the meaning ascribed thereto in the Amended and Restated
Credit Agreement.

 

“Lenders” means, collectively, the financial institutions listed from time to
time on Schedule I to the Amended and Restated Credit Agreement, as lenders, as
well as any Person which becomes a Lender pursuant to Section 11.6 of the
Amended and Restated Credit Agreement, and their respective successors and
assigns.

 

“Material Adverse Effect” means a material adverse effect on (i) the business,
operations, property, assets, liabilities or condition (financial or otherwise)
of the Borrower or of Holdings, the Borrower and their respective Subsidiaries
taken as a whole, (ii) the value of Collateral or the amount which the
Administrative Agent, the Collateral Agent and the Lenders would be likely to
receive (after giving consideration to delays in payment and costs of
enforcement) in the liquidation of such Collateral, (iii) the rights and
remedies of any Agent, the Issuing Lender or the Lenders under any Credit
Document, or (iv) on the ability of any Credit Party to perform its obligations
under the Credit Documents.

 

“Original Currency” has the meaning ascribed thereto in Section 3.17(1).

 

“Other Currency” has the meaning ascribed thereto in Section 3.17(1).

 

“Other Taxes” has the meaning ascribed thereto in Section 3.16(2).

 

“Required Lenders” has the meaning ascribed thereto in the Amended and Restated
Credit Agreement.

 

“Requisite Creditors” has the meaning ascribed thereto in Section 5.5.

 

“Revolving Credit Termination Date” has the meaning ascribed thereto in the
Amended and Restated Credit Agreement.

 

“Secured Creditors” means, collectively, the Bank Creditors and the Interest
Rate Creditors.

 

“Shares” has the meaning ascribed thereto in Section 4.1(a).

 

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“Subsidiary Guarantors” has the meaning ascribed thereto in the Amended and
Restated Credit Agreement.

 

“Syndication Agent” means DBTCA acting as syndication agent for the Lenders
under the Amended and Restated Credit Agreement and any successor appointed
pursuant to the Amended and Restated Credit Agreement, and its permitted
assigns.

 

“Taxes” has the meaning ascribed thereto in Section 3.16(1).

 

“Termination Date” means the date upon which the Total Commitments under the
Amended and Restated Credit Agreement have been terminated and all Interest Rate
Agreements entered into with any Interest Rate Creditor have been terminated, no
Note under the Amended and Restated Credit Agreement is outstanding and all
Loans thereunder have been repaid in full, all Letters of Credit issued under
the Amended and Restated Credit Agreement have been terminated (or cash
collateralized in a manner satisfactory to the Administrative Agent) and all
Guaranteed Obligations then due and payable have been paid in full.

 

SECTION 1.2            TERMS INCORPORATED BY REFERENCE. 

 

Capitalized terms not defined in this Guarantee shall have the meanings given to
them in the Amended and Restated Credit Agreement.

 

SECTION 1.3            STATUTES.

 

Unless specified otherwise, reference in this Guarantee to a statute refers to
that statute as it may be amended, or to any restated or successor legislation
of comparable effect.

 

SECTION 1.4            CERTAIN PHRASES, ETC. 

 

In this Guarantee (i) (y) the words “including” and “includes” mean “including
(or includes) without limitation” and (z) the phrase “the aggregate of”, “the
total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or
total or sum), without duplication, of”, and (ii) in the computation of periods
of time from a specified date to a later specified date, unless otherwise
expressly stated, the word “from” means “from and including” and the words “to”
and “until” each mean “to but excluding”.

 

SECTION 1.5            GENDER AND NUMBER. 

 

Any reference in this Guarantee to gender shall include all genders and words
importing the singular number only shall include the plural and vice versa.

 

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SECTION 1.6            HEADINGS, ETC. 

 

The division of this Guarantee into Articles and Sections and the insertion of
headings are for convenient reference only and are not to affect the
interpretation of this Guarantee.

 

ARTICLE 2
GUARANTEE

 

SECTION 2.1            GUARANTEE. 

 

(1)           THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY GUARANTEES: 

 

(A)           TO THE BANK CREDITORS THE FULL AND PROMPT PAYMENT WHEN DUE
(WHETHER AT THE STATED MATURITY, BY ACCELERATION OR OTHERWISE) OF (I) THE
PRINCIPAL OF AND INTEREST ON THE NOTES ISSUED BY, AND THE LOANS MADE TO, THE
BORROWER UNDER THE AMENDED AND RESTATED CREDIT AGREEMENT, (II) ALL REIMBURSEMENT
OBLIGATIONS AND UNPAID DRAWINGS WITH RESPECT TO LETTERS OF CREDIT ISSUED UNDER
THE AMENDED AND RESTATED CREDIT AGREEMENT AND (III) ALL OTHER OBLIGATIONS
(INCLUDING OBLIGATIONS WHICH, BUT FOR ANY AUTOMATIC STAY UNDER ANY APPLICABLE
INSOLVENCY LEGISLATION, WOULD BECOME DUE) AND LIABILITIES OWING BY THE BORROWER
TO THE BANK CREDITORS UNDER THE AMENDED AND RESTATED CREDIT AGREEMENT AND THE
OTHER CREDIT DOCUMENTS (INCLUDING INDEMNITIES, FEES AND INTEREST THEREON)
WHETHER NOW EXISTING OR HEREAFTER INCURRED UNDER, ARISING OUT OF OR IN
CONNECTION WITH THE AMENDED AND RESTATED CREDIT AGREEMENT OR ANY OTHER CREDIT
DOCUMENT AND THE DUE PERFORMANCE AND COMPLIANCE WITH THE TERMS OF THE CREDIT
DOCUMENTS BY THE BORROWER (ALL SUCH PRINCIPAL, INTEREST, LIABILITIES AND
OBLIGATIONS UNDER THIS PARAGRAPH (A), EXCEPT TO THE EXTENT CONSISTING OF
OBLIGATIONS OR LIABILITIES WITH RESPECT TO INTEREST RATE AGREEMENTS, BEING
HEREIN COLLECTIVELY CALLED, THE “AMENDED AND RESTATED CREDIT AGREEMENT
OBLIGATIONS”); AND

 

(B)           TO EACH INTEREST RATE CREDITOR THE FULL AND PROMPT PAYMENT WHEN
DUE (WHETHER AT THE STATED MATURITY, BY ACCELERATION OR OTHERWISE) OF ALL
OBLIGATIONS (INCLUDING OBLIGATIONS WHICH, BUT FOR ANY AUTOMATIC STAY UNDER ANY
APPLICABLE INSOLVENCY LEGISLATION, WOULD BECOME DUE) AND LIABILITIES OWING BY
THE BORROWER UNDER ANY INTEREST RATE AGREEMENT, WHETHER NOW IN EXISTENCE OR
HEREAFTER ARISING, AND THE DUE PERFORMANCE AND COMPLIANCE BY THE BORROWER WITH
ALL TERMS, CONDITIONS AND AGREEMENTS CONTAINED THEREIN (ALL SUCH OBLIGATIONS AND
LIABILITIES, THE “INTEREST RATE OBLIGATIONS”).

 

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THE GUARANTOR PROMISES TO PAY, ON DEMAND, ALL REASONABLE OUT-OF-POCKET COSTS AND
EXPENSES (INCLUDING REASONABLE FEES AND DISBURSEMENTS OF COUNSEL) INCURRED BY OR
ON BEHALF OF THE SECURED CREDITORS AND THE COLLATERAL AGENT IN ENFORCING ANY OF
THEIR RESPECTIVE RIGHTS UNDER THIS GUARANTEE AND BY THE COLLATERAL AGENT IN
CONNECTION WITH ANY AMENDMENT, WAIVER OR CONSENT RELATING THERETO. 

 

(2)           ADDITIONALLY, THE GUARANTOR UNCONDITIONALLY AND IRREVOCABLY
GUARANTEES THE PAYMENT OF ANY AND ALL GUARANTEED OBLIGATIONS OF THE BORROWER TO
THE SECURED CREDITORS WHETHER OR NOT DUE OR PAYABLE BY THE BORROWER UPON THE
OCCURRENCE IN RESPECT OF THE BORROWER OF ANY OF THE EVENTS SPECIFIED IN
SECTION 9.1(E) OF THE AMENDED AND RESTATED CREDIT AGREEMENT, AND UNCONDITIONALLY
AND IRREVOCABLY, PROMISES TO PAY SUCH GUARANTEED OBLIGATIONS TO THE SECURED
CREDITORS, OR ORDER, ON DEMAND, IN LAWFUL MONEY OF THE UNITED STATES.

 

SECTION 2.2            ABSOLUTE LIABILITY.

 

(1)           THE GUARANTOR GUARANTEES THAT THE GUARANTEED OBLIGATIONS WILL BE
PAID TO THE COLLATERAL AGENT AND THE SECURED CREDITORS STRICTLY IN ACCORDANCE
WITH THEIR TERMS AND CONDITIONS, THAT THE GUARANTOR SHALL BE LIABLE AS PRINCIPAL
DEBTOR AND NOT SOLELY AS SURETY WITH RESPECT TO THE PAYMENT OF THE GUARANTEED
OBLIGATIONS AND THAT THE LIABILITY OF THE GUARANTOR UNDER THIS GUARANTEE SHALL
BE ABSOLUTE AND UNCONDITIONAL IRRESPECTIVE OF:

 

(A)           THE LACK OF VALIDITY OR ENFORCEABILITY OF ANY TERMS OF ANY OF THE
OTHER CREDIT DOCUMENTS OR THE INTEREST RATE AGREEMENTS;

 

(B)           ANY CONTEST BY THE BORROWER OR ANY OTHER PERSON AS TO THE AMOUNT
OF THE GUARANTEED OBLIGATIONS, THE VALIDITY OR ENFORCEABILITY OF ANY TERMS OF
THE CREDIT DOCUMENTS OR THE INTEREST RATE AGREEMENTS OR THE PERFECTION OR
PRIORITY OF ANY SECURITY GRANTED TO THE COLLATERAL AGENT OR THE SECURED
CREDITORS;

 

(C)           ANY DEFENCE, COUNTER-CLAIM OR RIGHT OF SET-OFF AVAILABLE TO THE
BORROWER;

 

(D)           ANY CHANGE IN THE TIME OR TIMES FOR, OR PLACE OF OR MANNER OF
PAYMENT OF THE GUARANTEED OBLIGATIONS OR ANY CONSENT, WAIVER, RENEWAL, EXTENSION
OR OTHER INDULGENCES WHICH THE SECURED CREDITORS OR THE COLLATERAL AGENT MAY
GRANT TO THE BORROWER OR ANY OTHER PERSON OR ANY AMENDMENT OR SUPPLEMENT TO, OR
ALTERATION OR RENEWAL OF, OR RESTATEMENT OR MODIFICATION OF (INCLUDING ANY
INCREASE IN THE AMOUNTS AVAILABLE THEREUNDER OR THE INCLUSION OF ADDITIONAL
BORROWERS THEREUNDER), OR OTHER ACTION OR INACTION UNDER, ANY OF THE CREDIT
DOCUMENTS OR THE INTEREST RATE AGREEMENTS OR THE GUARANTEED OBLIGATIONS AND THIS
GUARANTEE SHALL APPLY TO THE GUARANTEED

 

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OBLIGATIONS AS SO CHANGED, INDULGED, AMENDED, SUPPLEMENTED, ALTERED, RENEWED,
RESTATED, MODIFIED OR INCREASED;

 

(E)           ANY DEALINGS WITH THE SECURITY WHICH THE SECURED CREDITORS OR THE
COLLATERAL AGENT HOLD OR MAY HOLD PURSUANT TO THE TERMS AND CONDITIONS OF THE
CREDIT DOCUMENT OR THE INTEREST RATE AGREEMENTS, INCLUDING THE TAKING, GIVING UP
OR EXCHANGE OF SECURITIES, THEIR VARIATION OR REALIZATION, THE ACCEPTING OF
COMPOSITIONS AND THE GRANTING OF RELEASES AND DISCHARGES;

 

(F)            ANY BANKRUPTCY, INSOLVENCY, REORGANIZATION, COMPOSITION,
ADJUSTMENT, DISSOLUTION, LIQUIDATION OR OTHER LIKE PROCEEDING RELATING TO THE
BORROWER, THE GUARANTOR OR ANY OTHER PERSON OR ANY ACTION TAKEN WITH RESPECT TO
THIS GUARANTEE BY ANY TRUSTEE OR RECEIVER, OR BY ANY COURT, IN ANY SUCH
PROCEEDING, WHETHER OR NOT THE GUARANTOR SHALL HAVE NOTICE OR KNOWLEDGE OF ANY
OF THE FOREGOING;

 

(G)           THE ASSIGNMENT OF ALL OR ANY PART OF THE BENEFITS OF THIS
GUARANTEE;

 

(H)           ANY INVALIDITY, NON-PERFECTION OR UNENFORCEABILITY OF ANY SECURITY
HELD BY THE SECURED CREDITORS OR THE COLLATERAL AGENT OR ANY IRREGULARITY,
DEFAULT OR DEFECT IN THE MANNER OR PROCEDURE BY WHICH THE COLLATERAL AGENT AND
THE SECURED CREDITORS DEALS WITH OR REALIZES ON SUCH SECURITY; AND

 

(I)            ANY OTHER CIRCUMSTANCES WHICH MIGHT OTHERWISE CONSTITUTE A
DEFENCE AVAILABLE TO, OR A DISCHARGE OF, THE GUARANTOR, THE BORROWER OR ANY
OTHER PERSON IN RESPECT OF THE GUARANTEED OBLIGATIONS OR THIS GUARANTEE, EXCEPT
INDEFEASIBLE PAYMENT IN FULL OF THE GUARANTEED OBLIGATIONS ON THE TERMINATION
DATE.

 

(2)           THE GUARANTOR UNDERSTANDS, AGREES AND CONFIRMS THAT THE SECURED
CREDITORS MAY ENFORCE THIS GUARANTEE UP TO THE FULL AMOUNT OF THE GUARANTEED
OBLIGATIONS WITHOUT PROCEEDING AGAINST THE BORROWER OR ANY OTHER GUARANTOR OF
THE GUARANTEED OBLIGATIONS.

 

ARTICLE 3
ENFORCEMENT

 

SECTION 3.1            REMEDIES. 

 

The Secured Creditors and the Collateral Agent shall not be bound to exhaust
their recourse against the Borrower or any other Person or realize on any
security they may hold in respect of the Guaranteed Obligations before being
entitled to

 

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payment under this Guarantee and the Guarantor renounces all benefits of
discussion and division.

 

SECTION 3.2            IMPAIRMENT OF SECURITY. 

 

Any loss of, or loss of value of, any security granted to any of the Secured
Creditors or the Collateral Agent by the Borrower or any other Person shall not
discharge pro tanto or limit or lessen the liability of the Guarantor under this
Guarantee.

 

SECTION 3.3            AMOUNT OF GUARANTEED OBLIGATIONS. 

 

Any account settled or stated by or between the Collateral Agent and the
Borrower, or if any such account has not been settled or stated immediately
before demand for payment under this Guarantee, any account stated by the
Collateral Agent shall, in the absence of manifest error, be accepted by the
Guarantor as prima facie evidence of the amount of the Guaranteed Obligations
which is due by the Borrower to the Secured Creditors and the Collateral Agent
or remains unpaid by the Borrower to the Secured Creditors and the Collateral
Agent.

 

SECTION 3.4            PAYMENT ON DEMAND. 

 

The obligation of the Guarantor to pay the amount of the Guaranteed Obligations
and all other amounts payable by it to the Secured Creditors or the Collateral
Agent under this Guarantee shall arise, and the Guarantor shall make such
payments, immediately after demand for same is made in writing to it.  The
liability of the Guarantor shall bear interest from the date of such demand at
the rate or rates of interest then applicable to the Guaranteed Obligations
under and calculated in the manner provided in the Credit Documents.

 

SECTION 3.5            ASSIGNMENT AND POSTPONEMENT.

 

(1)           ALL OBLIGATIONS, LIABILITIES AND INDEBTEDNESS OF THE BORROWER TO
THE GUARANTOR OF ANY NATURE WHATSOEVER AND ALL SECURITY THEREFOR (THE
“INTERCORPORATE INDEBTEDNESS”) ARE HEREBY ASSIGNED AND TRANSFERRED TO THE
COLLATERAL AGENT AS CONTINUING AND COLLATERAL SECURITY FOR THE GUARANTOR’S
OBLIGATIONS UNDER THIS GUARANTEE.  UNTIL THE OCCURRENCE OF AN EVENT OF DEFAULT,
THE GUARANTOR MAY RECEIVE PAYMENTS IN RESPECT OF THE INTERCORPORATE INDEBTEDNESS
IN ACCORDANCE WITH THEIR TERMS.  THE GUARANTOR SHALL NOT ASSIGN ALL OR ANY PART
OF THE INTERCORPORATE INDEBTEDNESS TO ANY PERSON OTHER THAN THE COLLATERAL AGENT
OR THE SECURED CREDITORS.

 

(2)           UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, ALL INTERCORPORATE INDEBTEDNESS SHALL BE HELD IN TRUST FOR THE SECURED
CREDITORS AND THE COLLATERAL AGENT AND SHALL BE COLLECTED, ENFORCED OR PROVED
SUBJECT TO, AND FOR THE PURPOSE OF, THIS GUARANTEE AND ANY PAYMENTS RECEIVED BY
THE GUARANTOR IN RESPECT OF THE INTERCORPORATE INDEBTEDNESS SHALL BE SEGREGATED

 

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FROM OTHER FUNDS AND PROPERTY HELD BY THE GUARANTOR AND IMMEDIATELY PAID TO THE
COLLATERAL AGENT ON ACCOUNT OF THE GUARANTEED OBLIGATIONS.

 

(3)           UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, THE SECURED CREDITORS AND THE COLLATERAL AGENT SHALL BE ENTITLED TO
RECEIVE INDEFEASIBLE PAYMENT OF THE GUARANTEED OBLIGATIONS IN FULL BEFORE THE
GUARANTOR RECEIVES ANY PAYMENT ON ACCOUNT OF ANY INTERCORPORATE INDEBTEDNESS. 
IN SUCH CASE, THE INTERCORPORATE INDEBTEDNESS SHALL NOT BE RELEASED OR WITHDRAWN
OR SET OFF AGAINST ANY AMOUNT, OBLIGATION, LIABILITY OR OTHER INDEBTEDNESS OWING
TO THE BORROWER BY THE GUARANTOR UNLESS THE COLLATERAL AGENT’S WRITTEN CONSENT
TO THE RELEASE OR WITHDRAWAL OR SET OFF IS FIRST OBTAINED.  THE GUARANTOR SHALL
NOT PERMIT THE PRESCRIPTION OF THE INTERCORPORATE INDEBTEDNESS BY ANY STATUTE OF
LIMITATIONS OR ASK FOR OR OBTAIN ANY SECURITY OR NEGOTIABLE PAPER FOR, OR OTHER
EVIDENCE OF, THE INTERCORPORATE INDEBTEDNESS UNLESS THE SAME IS DELIVERED
FORTHWITH TO THE COLLATERAL AGENT.

 

SECTION 3.6            SUSPENSION OF GUARANTOR RIGHTS. 

 

(1)           THE GUARANTOR AGREES THAT SO LONG AS THERE ARE ANY GUARANTEED
OBLIGATIONS, THE GUARANTOR SHALL NOT EXERCISE ANY RIGHTS WHICH IT MAY AT ANY
TIME HAVE BY REASON OF THE PERFORMANCE OF ANY OF ITS OBLIGATIONS UNDER THIS
GUARANTEE (I) TO BE INDEMNIFIED BY THE BORROWER, (II) TO CLAIM CONTRIBUTION FROM
ANY OTHER GUARANTOR OF THE DEBTS, LIABILITIES OR OBLIGATIONS OF THE BORROWER, OR
(III) TO TAKE THE BENEFIT (IN WHOLE OR IN PART AND WHETHER BY WAY OF SUBROGATION
OR OTHERWISE) OF ANY RIGHTS OF THE SECURED CREDITORS OR THE COLLATERAL AGENT
UNDER ANY OF THE CREDIT DOCUMENTS.

 

(2)           THE GUARANTOR WAIVES (TO THE FULLEST EXTENT PERMITTED BY LAW) ALL
PRESENTMENTS, DEMANDS FOR PERFORMANCE, PROTESTS AND NOTICES, INCLUDING, WITHOUT
LIMITATION, NOTICES OF NONPERFORMANCE, NOTICES OF PROTEST, NOTICES OF DISHONOUR,
NOTICES OF ACCEPTANCE OF THIS GUARANTEE, AND NOTICES OF THE EXISTENCE, CREATION
OR INCURRING OF NEW OR ADDITIONAL INDEBTEDNESS.  THE GUARANTOR ASSUMES ALL
RESPONSIBILITY FOR BEING AND KEEPING ITSELF INFORMED OF THE BORROWER’S FINANCIAL
CONDITION AND ASSETS, AND OF ALL OTHER CIRCUMSTANCES BEARING UPON THE RISK OF
NONPAYMENT OF THE GUARANTEED OBLIGATIONS AND THE NATURE, SCOPE AND EXTENT OF THE
RISKS WHICH THE GUARANTOR ASSUMES AND INCURS HEREUNDER, AND AGREES THAT THE
SECURED CREDITORS SHALL HAVE NO DUTY TO ADVISE THE GUARANTOR OF INFORMATION
KNOWN TO THEM REGARDING SUCH CIRCUMSTANCES OR RISKS.

 

SECTION 3.7            NO PREJUDICE TO SECURED CREDITORS OR COLLATERAL AGENT.

 

The Secured Creditors and the Collateral Agent shall not be prejudiced in any
way in the right to enforce any provision of this Guarantee by any act or
failure to act on the part of the Borrower, the Secured Creditors or the
Collateral Agent (save

 

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and except any act on the part of the Secured Creditors or the Collateral Agent
to expressly terminate this Guarantee on the Termination Date).  The Collateral
Agent and the Secured Creditors may, at any time and from time to time, in such
manner as any of them may determine is expedient, without any consent of, or
notice to, the Guarantor and without impairing or releasing the obligations of
the Guarantor (i) change the manner, place, time or terms of payment of, or
renew, increase, refinance, accelerate or alter, the Guaranteed Obligations,
(ii) renew, increase, accelerate, replace, refinance or otherwise vary any
credit or credit facilities to, or the terms or conditions of any transaction
with, the Borrower or any other Person, (iii) release, compound or vary the
liability of the Borrower or any other Person liable in any manner under or in
respect of the Guaranteed Obligations, (iv) exercise or enforce or refrain from
exercising or enforcing any right or security against the Borrower, the
Guarantor or any other Person, and (v) apply any sums from time to time received
to the Guaranteed Obligations.  In their dealings with the Borrower, the
Collateral Agent and the Secured Creditors need not enquire into the authority
or power of any Person purporting to act for or on behalf of the Borrower.

 

SECTION 3.8            RIGHTS OF SUBROGATION.

 

Any rights of subrogation acquired by the Guarantor by reason of payment under
this Guarantee shall not be exercised until the Guaranteed Obligations and all
other amounts due to the Secured Creditors have been paid or repaid in full and
such rights of subrogation shall be no greater than the rights held by the
Secured Creditors.  In the event (i) of the liquidation, winding-up or
bankruptcy of the Borrower (whether voluntary or compulsory), (ii) that the
Borrower makes a bulk sale of any of its assets within the provisions of any
bulk sales legislation, or (iii) that the Borrower makes any composition with
creditors or enters into any scheme of arrangement, then the Secured Creditors
shall have the right to rank in priority to the Guarantor for their full claims
in respect of the Guaranteed Obligations and receive all dividends or other
payments until their claims have been paid in full.  The Guarantor shall
continue to be liable, less any payments made by it, for any balance which may
be owing to the Secured Creditors by the Borrower.  No valuation or retention of
their security by the Secured Creditors shall, as between the Secured Creditors
and the Guarantor, be considered as a purchase of such security or as payment or
satisfaction or reduction of all or any part of the Guaranteed Obligations.  If
any amount is paid to the Guarantor at any time when all the Guaranteed
Obligations and other amounts due to the Secured Creditors have not been paid in
full, the amount shall be held in trust for the benefit of the Secured Creditors
and shall immediately be paid to the Collateral Agent to be credited and applied
upon the Guaranteed Obligations, whether matured or unmatured.  The Guarantor
shall have no recourse against the Secured Creditors for any invalidity,
non-perfection or unenforceability of any security held by the Secured Creditors
or any irregularity or defect in the manner or procedure by which the Secured
Creditors realize on such security.

 

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SECTION 3.9            NO SET-OFF. 

 

To the fullest extent permitted by law, the Guarantor shall make all payments
under this Guarantee without regard to any defence, counter-claim or right of
set-off available to it. 

 

SECTION 3.10         SUCCESSORS OF THE BORROWER. 

 

Any change or changes in the name of, or reorganization (whether by way of
reconstruction, consolidation, amalgamation, merger, transfer, sale, lease or
otherwise) of, the Borrower or its business shall not affect or in any way limit
or lessen the liability of the Guarantor under this Guarantee or under any of
the Guarantor Security Documents.  This Guarantee and the Guarantor Security
Documents shall extend to any person, firm or corporation acquiring all or
substantially all of the assets of the Borrower.

 

SECTION 3.11         CONTINUING GUARANTEE. 

 

This Guarantee is a continuing guarantee.  It extends to all present and future
Guaranteed Obligations, applies to and secures the ultimate balance of the
Guaranteed Obligations due or remaining due to the Collateral Agent and the
Secured Creditors and shall be binding as a continuing obligation of the
Guarantor until the Termination Date.  This Guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Guaranteed Obligations is rescinded or must otherwise be returned by
the Secured Creditors or the Collateral Agent upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, all as though the payment had not
been made.

 

SECTION 3.12         SUPPLEMENTAL SECURITY.

 

This Guarantee is in addition and without prejudice to and supplemental to all
other guaranties and securities held or which may hereafter be held by the
Secured Creditors or the Collateral Agent.

 

SECTION 3.13         SECURITY FOR GUARANTEE. 

 

The Guarantor acknowledges that this Guarantee is intended to secure payment of
the Guaranteed Obligations and that the payment of the Guaranteed Obligations
and the other obligations of the Guarantor under this Guarantee are secured
pursuant to the terms and provisions of the Guarantor Security Documents.

 

SECTION 3.14         RIGHT OF SET-OFF. 

 

Upon the occurrence and during the continuance of any Event of Default, the
Collateral Agent and each of the Secured Creditors are authorized by the
Guarantor and may, to the fullest extent permitted by law, set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by the Collateral Agent
or the Secured Creditors to or for the credit or the account of the Guarantor
against any and all of

 

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the obligations of the Guarantor now or hereafter existing irrespective of
whether or not (i) the Secured Creditors or the Collateral Agent have made any
demand under this Guarantee, or (ii) any of the obligations comprising the
Guaranteed Obligations are contingent or unmatured.  The Collateral Agent and
the Secured Creditors agree promptly to notify the Guarantor after any such
set-off and application made by the relevant Collateral Agent or Secured
Creditor provided that the failure to give notice shall not affect the validity
of the set-off and application.  The rights of the Collateral Agent and the
Secured Creditors under this Section 3.14 are in addition and without prejudice
to and supplemental to other rights and remedies which the Collateral Agent and
the Secured Creditors may have.

 

SECTION 3.15         INTEREST ACT (CANADA). 

 

The Guarantor acknowledges that certain of the rates of interest applicable to
the Guaranteed Obligations may be computed on the basis of a year of 360 days
and paid for the actual number of days elapsed.  For purposes of the Interest
Act (Canada), whenever any interest is calculated using a rate based on a year
of 360 days such rate determined pursuant to such calculation, when expressed as
an annual rate is equivalent to (i) the applicable rate based on a year of 360
days, (ii) multiplied by the actual number of days in the calendar year in which
the period for such interest is payable (or compounded) ends, and (iii) divided
by 360.

 

SECTION 3.16         TAXES AND OTHER TAXES. 

 

(1)           ALL PAYMENTS TO THE SECURED CREDITORS AND THE COLLATERAL AGENT BY
THE GUARANTOR UNDER THIS GUARANTEE OR UNDER ANY OF THE GUARANTOR SECURITY
DOCUMENTS SHALL BE MADE FREE AND CLEAR OF AND WITHOUT DEDUCTION OR WITHHOLDING
FOR ANY AND ALL TAXES, LEVIES, IMPOSTS, DEDUCTIONS, CHARGES OR WITHHOLDINGS AND
ALL RELATED LIABILITIES (ALL SUCH TAXES, LEVIES, IMPOSTS, DEDUCTIONS, CHARGES,
WITHHOLDINGS AND LIABILITIES BEING REFERRED TO AS “TAXES”) IMPOSED BY ANY
JURISDICTION (OR ANY POLITICAL SUBDIVISION OR TAXING AUTHORITY OF IT), UNLESS
SUCH TAXES ARE REQUIRED BY APPLICABLE LAW TO BE DEDUCTED OR WITHHELD.  IF THE
GUARANTOR SHALL BE REQUIRED BY APPLICABLE LAW TO DEDUCT OR WITHHOLD ANY SUCH
TAXES FROM OR IN RESPECT OF ANY AMOUNT PAYABLE UNDER THIS GUARANTEE OR UNDER ANY
OF THE GUARANTOR SECURITY DOCUMENTS, (I) THE AMOUNT PAYABLE SHALL BE INCREASED
(AND FOR GREATER CERTAINTY, IN THE CASE OF INTEREST, THE AMOUNT OF INTEREST
SHALL BE INCREASED) AS MAY BE NECESSARY SO THAT AFTER MAKING ALL REQUIRED
DEDUCTIONS OR WITHHOLDINGS (INCLUDING DEDUCTIONS OR WITHHOLDINGS APPLICABLE TO
ANY ADDITIONAL AMOUNTS PAID UNDER THIS SECTION 3.16), THE SECURED CREDITORS AND
THE COLLATERAL AGENT RECEIVE AN AMOUNT EQUAL TO THE AMOUNT THEY WOULD HAVE
RECEIVED IF NO SUCH DEDUCTION OR WITHHOLDING HAD BEEN MADE, (II) THE GUARANTOR
SHALL MAKE SUCH DEDUCTIONS OR WITHHOLDINGS, AND (III) THE GUARANTOR SHALL
IMMEDIATELY PAY THE FULL AMOUNT DEDUCTED OR WITHHELD TO THE RELEVANT
GOVERNMENTAL ENTITY IN ACCORDANCE WITH APPLICABLE LAW.

 

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(2)           THE GUARANTOR AGREES TO IMMEDIATELY PAY ANY PRESENT OR FUTURE
STAMP OR DOCUMENTARY TAXES OR ANY OTHER EXCISE OR PROPERTY TAXES, CHARGES,
FINANCIAL INSTITUTIONS DUTIES, DEBITS TAXES OR SIMILAR LEVIES (ALL SUCH TAXES,
CHARGES, DUTIES AND LEVIES BEING REFERRED TO AS “OTHER TAXES”) WHICH ARISE FROM
ANY PAYMENT MADE BY THE GUARANTOR UNDER THIS GUARANTEE OR UNDER ANY OF THE
GUARANTOR SECURITY DOCUMENTS OR FROM THE EXECUTION, DELIVERY OR REGISTRATION OF,
OR OTHERWISE WITH RESPECT TO, THIS GUARANTEE OR ANY OF THE GUARANTOR SECURITY
DOCUMENTS.

 

(3)           THE GUARANTOR SHALL INDEMNIFY THE SECURED CREDITORS AND THE
COLLATERAL AGENT FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES (INCLUDING ANY
TAXES OR OTHER TAXES IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE BY THE
GUARANTOR UNDER THIS SECTION 3.16) PAID BY THE SECURED CREDITORS OR THE
COLLATERAL AGENT AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES)
ARISING FROM OR WITH RESPECT TO SUCH TAXES OR OTHER TAXES, WHETHER OR NOT THEY
WERE CORRECTLY OR LEGALLY ASSERTED, EXCLUDING, IN THE CASE OF ANY SECURED
CREDITOR AND THE COLLATERAL AGENT, AND SUBJECT TO THE NEXT FOLLOWING SENTENCE,
TAXES IMPOSED ON ITS NET INCOME OR NET PROFITS (OR ANY BRANCH OF PROFITS TAX
IMPOSED IN LIEU OF NET INCOME TAXES) OR CAPITAL TAXES OR RECEIPTS AND FRANCHISE
TAXES.  IF ANY TAXES ON THE WORLDWIDE NET INCOME, PROFITS OR GAINS OF ANY
SECURED CREDITOR OR THE COLLATERAL AGENT ARE ASSERTED, IMPOSED, LEVIED OR
ASSESSED AGAINST SUCH SECURED CREDITOR OR THE COLLATERAL AGENT IN RESPECT OF ANY
AMOUNT PAYABLE PURSUANT TO THIS SECTION 3.16, THE GUARANTOR WILL INDEMNIFY SUCH
SECURED CREDITOR OR THE COLLATERAL AGENT, AS THE CASE MAY BE, AGAINST SUCH
PAYMENT OR LIABILITY TOGETHER WITH ANY INTEREST, PENALTIES AND EXPENSES PAYABLE
OR INCURRED IN CONNECTION THEREWITH.  PAYMENT UNDER THIS INDEMNIFICATION SHALL
BE MADE WITHIN 30 DAYS FROM THE DATE THE COLLATERAL AGENT OR THE RELEVANT
SECURED CREDITOR, AS THE CASE MAY BE, MAKES WRITTEN DEMAND FOR IT.  A
CERTIFICATE AS TO THE AMOUNT OF SUCH TAXES OR OTHER TAXES SUBMITTED TO THE
GUARANTOR BY THE COLLATERAL AGENT OR THE RELEVANT SECURED CREDITOR SHALL BE
PRIMA FACIE EVIDENCE, ABSENT MANIFEST ERROR, OF THE AMOUNT DUE FROM THE
GUARANTOR TO THE COLLATERAL AGENT OR THE SECURED CREDITORS, AS THE CASE MAY BE.

 

(4)           THE GUARANTOR SHALL FURNISH TO THE COLLATERAL AGENT AND THE
SECURED CREDITORS THE ORIGINAL OR A CERTIFIED COPY OF A RECEIPT EVIDENCING
PAYMENT OF TAXES OR OTHER TAXES MADE BY THE GUARANTOR WITHIN 30 DAYS AFTER THE
DATE OF ANY PAYMENT OF TAXES OR OTHER TAXES.

 

(5)           IF A SECURED CREDITOR OR THE COLLATERAL AGENT IS, IN ITS SOLE
OPINION, ENTITLED TO CLAIM A REFUND OR ABLE TO APPLY FOR OR OTHERWISE TAKE
ADVANTAGE OF ANY TAX CREDIT, TAX DEDUCTION OR SIMILAR BENEFIT BY REASON OF ANY
WITHHOLDING OR DEDUCTION MADE BY THE GUARANTOR IN RESPECT OF A PAYMENT MADE BY
IT UNDER THIS GUARANTEE, WHICH PAYMENT SHALL HAVE BEEN INCREASED PURSUANT TO
THIS

 

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SECTION 3.16, THEN SUCH SECURED CREDITOR OR THE COLLATERAL AGENT, AS THE CASE
MAY BE, WILL USE REASONABLE EFFORT TO OBTAIN THE REFUND, CREDIT, DEDUCTION OR
BENEFIT AND UPON CREDIT OR RECEIPT OF IT WILL PAY TO THE GUARANTOR, THE AMOUNT
(IF ANY) NOT EXCEEDING THE INCREASED AMOUNT PAID BY THE GUARANTOR, AS EQUALS THE
NET AFTER-TAX VALUE TO SUCH GUARANTOR OF THAT PART OF THE REFUND, CREDIT,
DEDUCTION OR BENEFIT AS IT CONSIDERS IS ALLOCABLE TO SUCH WITHHOLDING OR
DEDUCTION HAVING REGARD TO ALL OF ITS DEALINGS GIVING RISE TO SIMILAR CREDITS,
DEDUCTIONS OR BENEFITS IN RELATION TO THE SAME TAX PERIOD AND TO THE COST OF
OBTAINING THE SAME.  NOTHING CONTAINED IN THIS SECTION 3.16 SHALL INTERFERE WITH
THE RIGHT OF THE SECURED CREDITOR OR THE COLLATERAL AGENT TO ARRANGE ITS TAX
AFFAIRS IN WHATEVER MANNER IT DEEMS FIT AND IN PARTICULAR, NEITHER ANY SECURED
CREDITOR NOR THE COLLATERAL AGENT SHALL BE UNDER ANY OBLIGATION TO CLAIM RELIEF
FROM ITS CORPORATE PROFITS OR SIMILAR TAX LIABILITY IN RESPECT OF ANY DEDUCTION
OR WITHHOLDING IN PRIORITY TO ANY OTHER RELIEF, CLAIMS, CREDITS OR DEDUCTIONS
AVAILABLE TO IT AND NEITHER ANY SECURED CREDITOR NOR THE COLLATERAL AGENT SHALL
BE OBLIGATED TO DISCLOSE TO THE GUARANTOR ANY INFORMATION REGARDING ITS TAX
AFFAIRS, TAX COMPUTATIONS OR OTHERWISE.

 

SECTION 3.17         JUDGMENT CURRENCY.

 

(1)           IF, FOR THE PURPOSES OF OBTAINING JUDGMENT IN ANY COURT, IT IS
NECESSARY TO CONVERT ALL OR ANY PART OF THE GUARANTEED OBLIGATIONS OR ANY OTHER
AMOUNT DUE TO A SECURED CREDITOR OR THE COLLATERAL AGENT IN RESPECT OF THE
GUARANTOR’S OBLIGATIONS UNDER THIS GUARANTEE IN ANY CURRENCY (THE “ORIGINAL
CURRENCY”) INTO ANOTHER CURRENCY (THE “OTHER CURRENCY”), THE GUARANTOR, TO THE
FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO, AGREES THAT THE RATE OF EXCHANGE
USED SHALL BE THAT AT WHICH, IN ACCORDANCE WITH NORMAL BANKING PROCEDURES, THE
SECURED CREDITOR OR THE COLLATERAL AGENT, AS THE CASE MAY BE, COULD PURCHASE THE
ORIGINAL CURRENCY WITH THE OTHER CURRENCY ON THE BUSINESS DAY PRECEDING THAT ON
WHICH FINAL JUDGEMENT IS PAID OR SATISFIED.

 

(2)           THE OBLIGATIONS OF THE GUARANTOR IN RESPECT OF ANY SUM DUE IN THE
ORIGINAL CURRENCY FROM IT TO ANY SECURED CREDITOR OR THE COLLATERAL AGENT SHALL,
NOTWITHSTANDING ANY JUDGMENT IN ANY OTHER CURRENCY, BE DISCHARGED ONLY TO THE
EXTENT THAT ON THE BUSINESS DAY FOLLOWING RECEIPT BY SUCH SECURED CREDITOR OR
THE COLLATERAL AGENT, AS THE CASE MAY BE, OF ANY SUM ADJUDGED TO BE SO DUE IN
SUCH OTHER CURRENCY SUCH SECURED CREDITOR OR THE COLLATERAL AGENT, AS THE CASE
MAY BE, MAY, IN ACCORDANCE WITH ITS NORMAL BANKING PROCEDURES, PURCHASE THE
ORIGINAL CURRENCY WITH SUCH OTHER CURRENCY.  IF THE AMOUNT OF THE ORIGINAL
CURRENCY SO PURCHASED IS LESS THAN THE SUM ORIGINALLY DUE TO THE SECURED
CREDITOR OR THE COLLATERAL AGENT, AS THE CASE MAY BE, IN THE ORIGINAL CURRENCY,
THE GUARANTOR AGREES, AS A SEPARATE OBLIGATION AND NOTWITHSTANDING ANY SUCH
JUDGMENT, TO INDEMNIFY THE SECURED CREDITOR OR THE COLLATERAL AGENT, AS THE CASE
MAY BE, AGAINST SUCH LOSS, AND IF THE AMOUNT

 

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OF THE ORIGINAL CURRENCY SO PURCHASED EXCEEDS THE SUM ORIGINALLY DUE TO THE
SECURED CREDITOR OR THE COLLATERAL AGENT, AS THE CASE MAY BE, IN THE ORIGINAL
CURRENCY, THE SECURED CREDITOR OR THE COLLATERAL AGENT, AS THE CASE MAY BE,
AGREES TO REMIT SUCH EXCESS TO THE GUARANTOR.

 

ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

SECTION 4.1            REPRESENTATIONS AND WARRANTIES. 

 

The Guarantor hereby represents and warrants to and in favour of the Collateral
Agent and the Secured Creditors, acknowledging and confirming that each Secured
Creditor and the Collateral Agent is relying thereon without independent inquiry
in connection with the acceptance of this Guarantee, that:

 

(A)           SHARES.  AS OF THE EFFECTIVE DATE, THE AUTHORIZED CAPITAL OF THE
GUARANTOR CONSISTS OF AN UNLIMITED NUMBER OF COMMON SHARES OF WHICH ONLY 1000
COMMON SHARES (AND NO MORE) HAVE BEEN ISSUED AND ARE OUTSTANDING AS FULLY PAID
AND NON-ASSESSABLE.  THE BORROWER IS THE REGISTERED AND BENEFICIAL OWNER OF ALL
OF THE ISSUED AND OUTSTANDING COMMON SHARES IN THE CAPITAL OF THE GUARANTOR (THE
“SHARES”).  AS OF THE EFFECTIVE DATE, THE GUARANTOR IS NOT A PARTY TO ANY
UNANIMOUS SHAREHOLDER’S DECLARATION, SHAREHOLDERS’ AGREEMENT OR OTHER AGREEMENT
RELATING TO THE SHARES OR WITHIN THE MEANING OF SECTION 108 OF THE BUSINESS
CORPORATIONS ACT (ONTARIO).  THE GUARANTOR DOES NOT OWN BENEFICIALLY OR OF
RECORD ANY SHARES OR OTHER SECURITIES IN ANY PERSON.

 

(B)           INCORPORATION AND QUALIFICATION.  THE GUARANTOR IS A CORPORATION
DULY INCORPORATED, ORGANIZED AND VALIDLY EXISTING UNDER THE LAWS OF THE PROVINCE
OF ONTARIO AND, AND AS OF THE EFFECTIVE DATE, IS EXTRA-PROVINCIALLY REGISTERED
TO CARRY ON BUSINESS IN THE PROVINCES OF QUEBEC, MANITOBA, SASKATCHEWAN, ALBERTA
AND BRITISH COLUMBIA, BUT IS NOT QUALIFIED, LICENSED OR REGISTERED TO CARRY ON
BUSINESS IN ANY OTHER JURISDICTION NOR COULD FAILURE TO BE SO QUALIFIED HAVE A
MATERIAL ADVERSE EFFECT.

 

(C)           CORPORATE POWER.  THE GUARANTOR HAS ALL REQUISITE CORPORATE POWER
AND AUTHORITY TO (I) OWN, LEASE AND OPERATE ITS PROPERTIES AND ASSETS AND TO
CARRY ON THE BUSINESS IN WHICH IT IS ENGAGED AND PRESENTLY PROPOSES TO ENGAGE,
AND (II) ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER THE CREDIT DOCUMENTS TO
WHICH IT IS A PARTY.

 

(D)           CONFLICT WITH OTHER INSTRUMENTS.  THE EXECUTION AND DELIVERY BY
THE GUARANTOR AND THE PERFORMANCE BY IT OF ITS OBLIGATIONS UNDER, AND

 

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COMPLIANCE WITH THE TERMS, CONDITIONS AND PROVISIONS OF, THE CREDIT DOCUMENTS TO
WHICH IT IS A PARTY WILL NOT (I) CONFLICT WITH OR RESULT IN A BREACH OF ANY OF
THE TERMS OR CONDITIONS OF (T) ITS CONSTATING DOCUMENTS OR BY-LAWS, (U) ANY
APPLICABLE LAW, RULE OR REGULATION, (V) ANY CONTRACTUAL RESTRICTION BINDING ON
OR AFFECTING IT OR ITS PROPERTIES, OR (W) ANY JUDGMENT, INJUNCTION,
DETERMINATION, ORDER, DECREE, WRIT OR AWARD WHICH IS BINDING ON IT, OR
(II) RESULT IN, REQUIRE OR PERMIT (X) THE IMPOSITION OF ANY ENCUMBRANCE IN, ON
OR WITH RESPECT TO ANY OF ITS ASSETS OR PROPERTY (EXCEPT IN FAVOUR OF THE
COLLATERAL AGENT AND THE SECURED CREDITORS) OR (Y) THE ACCELERATION OF THE
MATURITY OF ANY INDEBTEDNESS BINDING ON OR AFFECTING THE GUARANTOR, EXCEPT IN
EACH OF THE FOREGOING CASES (EXCEPT CLAUSE(T)), ANY CONTRAVENTION, CONFLICTS,
ENCUMBRANCES OR ACCELERATIONS WHICH ARE NOT REASONABLY LIKELY TO ADVERSELY
AFFECT ANY LENDER OR TO HAVE A MATERIAL ADVERSE EFFECT.

 

(E)           CORPORATE ACTION, GOVERNMENTAL APPROVALS, ETC.  THE EXECUTION AND
DELIVERY OF EACH OF THE CREDIT DOCUMENTS BY THE GUARANTOR AND THE PERFORMANCE BY
THE GUARANTOR OF ITS OBLIGATIONS UNDER THE CREDIT DOCUMENTS TO WHICH IT IS A
PARTY HAS BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION INCLUDING THE
OBTAINING OF ALL NECESSARY SHAREHOLDER CONSENTS.  EXCEPT FOR THE FILING OF
FINANCING STATEMENTS AND FINANCING CHANGE STATEMENTS AND FOR ANY OTHER FILINGS,
REGISTRATIONS OR RECORDINGS REQUIRED UNDER THE GUARANTOR’S SECURITY DOCUMENTS
(ALL OF WHICH HAVE BEEN MADE OR WILL BE MADE WITHIN ONE BUSINESS DAY HEREOF,
SAVE AND EXCEPT FOR ANY FILINGS, REGISTRATIONS OR RECORDINGS IN RESPECT OF
FIXTURES IN THE APPROPRIATE LAND REGISTRY OFFICE AND IN RESPECT OF ANY
ASSIGNMENT OF CROWN DEBTS (AS THAT TERM IS DEFINED IN THE FINANCIAL
ADMINISTRATION ACT (CANADA) TO WHICH PART VII OF THE FINANCIAL ADMINISTRATION
ACT (CANADA) APPLIES), NO AUTHORIZATION, CONSENT, APPROVAL, REGISTRATION,
QUALIFICATION, DESIGNATION, DECLARATION, FILING, RECORDING OR REGISTRATION WITH
OR EXEMPTION BY ANY GOVERNMENTAL ENTITY OR OTHER PERSON, IS OR WAS NECESSARY IN
CONNECTION WITH (I) THE EXECUTION, DELIVERY AND PERFORMANCE OF OBLIGATIONS UNDER
THE CREDIT DOCUMENTS TO WHICH THE GUARANTOR IS A PARTY; OR (II) THE LEGALITY,
VALIDITY, BINDING EFFECT OR ENFORCEABILITY OF ANY SUCH CREDIT DOCUMENT.

 

(F)            EXECUTION AND BINDING OBLIGATION.  THIS GUARANTEE AND THE OTHER
CREDIT DOCUMENTS TO WHICH THE GUARANTOR IS A PARTY HAVE BEEN DULY EXECUTED AND
DELIVERED BY THE GUARANTOR AND CONSTITUTE LEGAL, VALID AND BINDING OBLIGATIONS
OF THE GUARANTOR ENFORCEABLE AGAINST IT IN ACCORDANCE WITH THEIR RESPECTIVE
TERMS, SUBJECT ONLY TO ANY LIMITATION UNDER APPLICABLE LAWS RELATING TO
(I) BANKRUPTCY, INSOLVENCY,

 

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ARRANGEMENT OR CREDITORS’ RIGHTS GENERALLY, AND (II) THE DISCRETION THAT A COURT
MAY EXERCISE IN THE GRANTING OF EQUITABLE REMEDIES.

 

(G)           LITIGATION.  THERE ARE NO ACTIONS, SUITS, ARBITRATIONS,
INVESTIGATIONS OR PROCEEDINGS PENDING OR THREATENED (I) WITH RESPECT TO ANY
CREDIT DOCUMENT TO WHICH THE GUARANTOR IS A PARTY OR (II) THAT, AFTER GIVING
EFFECT TO EXPECTED INSURANCE PROCEEDS AND INDEMNITY PAYMENTS, ARE REASONABLY
LIKELY TO HAVE A MATERIAL ADVERSE EFFECT.

 

SECTION 4.2            SURVIVAL OF REPRESENTATIONS AND WARRANTIES. 

 

The representations and warranties herein set forth or contained in any
certificates or documents delivered to the Collateral Agent or the Secured
Creditors pursuant hereto shall not merge in or be prejudiced by and shall
survive any Notes issued by, and Loans made to, the Borrower under the Amended
and Restated Credit Agreement, Letters of Credit issued under the Amended and
Restated Credit Agreement, and obligations under any Interest Rate Agreement,
and shall continue in full force and effect until the Guaranteed Obligations and
all other amounts owing hereunder shall be paid or repaid in full. 

 

SECTION 4.3            AMENDED AND RESTATED CREDIT AGREEMENT. 

 

Until the Guaranteed Obligations and all other amounts owing hereunder shall be
paid or repaid in full and the Secured Creditors have no obligations under the
Amended and Restated Credit Agreement or the Interest Rate Agreements, the
Guarantor covenants and agrees that it shall take, or shall refrain from taking,
as the case may be, all actions that are necessary to be taken or not taken so
that no violation of any provision, covenant or agreement contained in Article 7
or Article 8 of the Amended and Restated Credit Agreement and so that no Default
or Event of Default, is caused by the action of the Guarantor and its
Subsidiaries.

 

ARTICLE 5
GENERAL

 

SECTION 5.1            NOTICES, ETC. 

 

All notices, requests, demands or other communications provided for hereunder
made in writing (including telexed or telecopier communication) shall be deemed
to have been duly given or made when delivered to the Person to which such
notice, request, demand or other communication is required or permitted to be
given or made under this Guarantee, addressed as follows:

 

(a)           To the Guarantor:

 

c/o Williams Scotsman, Inc.

8211 Town Center Drive

 

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Baltimore, Maryland 21236-5997

 

Attention:

John B. Ross

 

Telephone:

(410)931-6000 ext.6105

Facsimile:

(410)931-6117

 

With a copy to:

 

Davies Ward Phillips & Vineberg LLP

1 First Canadian Place

44th Floor

P.O. Box 63

Toronto, Ontario

M5X 1B1

 

Attention:

Kent F. Beattie

 

Telephone:

(416)367-6927

Facsimile:

(416)863-0871

 

(b)           To the Collateral Agent at:

 

Bank of America, N.A.

335 Madison Avenue

New York, New York 10017

 

Attention:

Business Capital/URGENT

 

 

Telephone:

(212) 503-7632

Facsimile:

(212) 503—7330

 

(c)           To any Bank Creditor, other than the Collateral Agent, at such
address as such Bank Creditor shall have specified in the Amended and Restated
Credit Agreement;

 

(d)           To any Interest Rate Creditor at such address as such Interest
Rate Creditor shall have specified in writing to the Obligor and the Collateral
Agent;

 

or in any case at such other address as any of the Persons listed above may
hereafter notify the others in writing, except that notices and communications
to the

 

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Administrative Agent or any Credit Party shall not be effective until received
by the Administrative Agent or such Credit Party.

 

SECTION 5.2            CURRENCY. 

 

All references in this Guarantee to dollars, unless otherwise specifically
indicated, are expressed in lawful currency of the United States of America.

 

SECTION 5.3            SUCCESSORS AND ASSIGNS. 

 

This Guarantee shall be binding upon the Guarantor, its successors and assigns,
and shall enure to the benefit of the Secured Creditors, the Collateral Agent
and their respective successors and assigns.  All rights of the Collateral Agent
and the Secured Creditors shall be assignable and in any action brought by an
assignee to enforce any such right, the Guarantor shall not assert against the
assignee any claim or defence which the Guarantor now has or hereafter may have
against the Collateral Agent or any of the Secured Creditors.

 

SECTION 5.4            SEVERABILITY. 

 

If any provision of this Guarantee is deemed by any court of competent
jurisdiction to be invalid or void, the remaining provisions shall remain in
full force and effect.

 

SECTION 5.5            WAIVERS, ETC. 

 

Neither this Guarantee nor any provision hereof may be changed, waived,
discharged or terminated, with respect to any Guarantor, except with the written
consent of (x) the Required Lenders (or to the extent required by Section 11.10
of the Amended and Restated Credit Agreement, with the written consent of each
Lender) at all times prior to the time on which all Amended and Restated Credit
Agreement Obligations have been paid in full or (y) the holders of at least a
majority of the outstanding Interest Rate Obligations at all times after the
time on which all Amended and Restated Credit Agreement Obligations have been
paid in full; provided, that any change, waiver, modification or variance
affecting the rights and benefits of a single Class (as defined below) of
Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors (as defined below)
of such Class of Secured Creditors (it being understood that the release of any
guarantor hereunder shall not constitute a change, waiver, discharge or
termination affecting any guarantor other than the guarantor so added or
released).  For the purpose of this Guarantee the term “Class” means each class
of Secured Creditors, i.e., whether (x) the Bank Creditors as holders of the
Amended and Restated Credit Agreement Obligations or (y) the Interest Rate
Creditors as the holders of the Interest Rate Obligations.  For the purpose of
this Guarantee, the term “Requisite Creditors” of any Class means each of
(x) with respect to the Amended and Restated Credit Agreement Obligations, the
Required Lenders, or if required by Section 11.10 of the Amended and Restated
Credit

 

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Agreement, all of the Lenders and (y) with respect to the Interest Rate
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Agreements.

 

SECTION 5.6            ENFORCEMENT BY SECURED CREDITORS.

 

Notwithstanding anything else to the contrary in this Guarantee, the Secured
Creditors and the Collateral Agent agree that this Guarantee may be enforced
only by the action of the Administrative Agent or the Collateral Agent, in each
case acting upon the instructions of the Required Lenders (or, after the date on
which all Amended and Restated Credit Agreement Obligations have been paid in
full, the holders of at least a majority of the Interest Rate Obligations) and
that no other Secured Creditor shall have any right individually to seek to
enforce or to enforce this Guarantee or to realize upon the security to be
granted hereby, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent or the Collateral Agent or the holders
of at least a majority of the Interest Rate Obligations, as the case may be, for
the benefit of the Secured Creditors upon the terms of this Guarantee and the
other Credit Documents.  The Secured Creditors further agree that this Guarantee
may not be enforced against any director, officer, employee, or shareholder
(except to the extent such shareholder is a Credit Party) of the Guarantor.  It
is understood that the agreement in this Section 5.6 is among and solely for the
benefit of the Lenders and that if the Required Lenders so agree (without
requiring the consent of the Guarantor), the Guarantee may be directly enforced
by any Secured Creditor. 

 

SECTION 5.7            GOVERNING LAW. 

 

This Guarantee shall be governed by and interpreted and enforced in accordance
with the laws of the Province of Ontario and the federal laws of Canada
applicable therein.

 

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

 

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IN WITNESS WHEREOF the Guarantor has caused this Guarantee to be executed by its
duly authorized officers as of the day and year first above written.

 

 

WILLIAMS SCOTSMAN OF
CANADA, INC.

 

 

 

 

 

By:

/s/ Tom Bruyea

 

 

 

  Name: Tom Bruyea

 

 

  Title: Authorized Signing Officer

 

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