Ex. 10.4
Execution Copy

AMENDED AND RESTATED CANADIAN SECURITY AGREEMENT
made by
CIENA CANADA, INC.
in favour of
DEUTSCHE BANK AG NEW YORK BRANCH
as Collateral Agent

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Dated as of August 13, 2012

and

Amended and Restated as of July 15, 2014

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TABLE OF CONTENTS
ARTICLE 1
SECURITY INTERESTS
Section 1.1
Grant of Security Interests.    3

Section 1.2
Grant of License.    5

Section 1.3
Power of Attorney.    6

Section 1.4
Attachment.    7

Section 1.5
Subsequently Acquired Collateral.    9

ARTICLE 2
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1
Necessary Filings.    9

Section 2.2
No Liens.    10

Section 2.3
Other Financing Statements.    10

Section 2.4
Chief Executive Office, Record Locations.    10

Section 2.5
Location of Inventory and Equipment    10

Section 2.6
Legal Names; Type of Organization; Jurisdiction of Organization; Organizational
Identification Numbers; Federal Employer Identification Number; Changes Thereto;
etc.    10

Section 2.7
Trade Names; etc.    11

Section 2.8
Certain Significant Transactions.    11

Section 2.9
Collateral in the Possession of a Bailee.    12

Section 2.10
Recourse.    12

ARTICLE 3
SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; SECURITIES;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
Section 3.1
Additional Representations and Warranties.    12

Section 3.2
Maintenance of Records.    12

Section 3.3
Direction to Account Debtors; Contracting Parties; etc.    13

Section 3.4
Modification of Terms; etc.    13

Section 3.5
Collection.    14

Section 3.6
Securities and Instruments.    14

Section 3.7
Voting.    15

Section 3.8
Dividends and Other Distributions.    16

Section 3.9
Assignors Remain Liable Under Accounts.    17

Section 3.10
Assignors Remain Liable Under Contracts.    17

Section 3.11
Letter-of-Credit Rights.    17

Section 3.12
Further Actions.    18

ARTICLE 4
PROVISIONS CONCERNING ALL COLLATERAL
Section 4.1
Protection of Collateral Agent’s Security.    18

Section 4.2
Additional Information.    18

Section 4.3
Financing Statements.    18

( i )

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ARTICLE 5
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
Section 5.1
Remedies; Obtaining the Collateral Upon Default.    19

Section 5.2
Remedies; Disposition of the Collateral.    21

Section 5.3
ULC Shares.    22

Section 5.4
Receiver's Powers.    23

Section 5.5
Waiver of Claims.    23

Section 5.6
Application of Proceeds.    24

Section 5.7
Remedies Cumulative.    27

Section 5.8
Discontinuance of Proceedings.    28

ARTICLE 6
INDEMNITY
Section 6.1
Indemnity.    28

Section 6.2
Indemnity Obligations Secured by Collateral; Survival.    29

ARTICLE 7
INTERPRETATION
Section 7.1
Definitions.    30

Section 7.2
Interpretation.    38

ARTICLE 8
MISCELLANEOUS
Section 8.1
Notices.    39

Section 8.2
Waiver; Amendment.    40

Section 8.3
Obligations Absolute.    40

Section 8.4
Successors and Assigns.    41

Section 8.5
Headings Descriptive.    41

Section 8.6
GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.    41

Section 8.7
Assignors’ Duties.    42

Section 8.8
Termination; Release.    42

Section 8.9
Counterparts.    44

Section 8.10
Severability.    44

Section 8.11
The Collateral Agent and the other Secured Creditors.    45

Section 8.12
Additional Assignors.    45

Section 8.13
Release of Assignors.    45

Section 8.14
No Novation.    46

ANNEX A
Schedule of Chief Executive and Registered Offices

ANNEX B
Intentionally Deleted

ANNEX C
Schedule of Legal Names, Type of Organization (and whether a Registered
Organization), Jurisdiction of Organization, Organizational Identification
Numbers and Federal Employer Identification Numbers

( ii )

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ANNEX D
Schedule of Trade and Fictitious Names

ANNEX E
Description of Certain Significant Transactions Occurring Within Three Years
Prior to the Date of the Security Agreement

ANNEX F
Locations of Inventory and Equipment

ANNEX G
Schedule of Securities

ANNEX H
Schedule of Instruments

( iii )

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AMENDED AND RESTATED CANADIAN SECURITY AGREEMENT
AMENDED AND RESTATED CANADIAN SECURITY AGREEMENT, dated as of August 13, 2012
and amended and restated as of July 15, 2014, made by Ciena Canada, Inc. (an
“Assignor” and, together with any other entity that becomes an assignor
hereunder pursuant to Section 8.12 hereof, the “Assignors”) in favor of DEUTSCHE
BANK AG NEW YORK BRANCH (in its individual capacity, and any successor
corporation thereto by merger, consolidation or otherwise, “DBNY”), as
collateral agent (together with any successor collateral agent, the “Collateral
Agent”), for the benefit of the Secured Creditors (as defined below). Certain
capitalized terms as used herein are defined in Article 7 hereof. Except as
otherwise defined herein, all capitalized terms used herein and defined in the
Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H:
WHEREAS, Ciena Corporation, a Delaware corporation (the “Company”), Ciena
Communications, Inc. a Delaware corporation (together with the Company and each
other Wholly-Owned Domestic Subsidiary of the Company that becomes a U.S.
Borrower pursuant to the terms of the Credit Agreement, collectively, the “U.S.
Borrowers”), Ciena Canada, Inc., a corporation incorporated under the laws of
Canada (together with each other Wholly-Owned Canadian Subsidiary of the Company
that becomes a Canadian Borrower pursuant to the terms of the Credit Agreement,
collectively, the “Canadian Borrowers”; and the Canadian Borrowers, together
with the U.S. Borrowers, collectively, the “Borrowers”), the lenders from time
to time party thereto (the “Lenders”), Bank of America N.A., as Syndication
Agent, Morgan Stanley Senior Funding, Inc. and Wells Fargo Bank, National
Association, as Co-Documentation Agents and DBNY, as administrative agent (in
such capacity, together with any successor administrative agent, the
“Administrative Agent”) and as collateral agent (in such capacity, together with
any successor collateral agent, the “Collateral Agent”), have entered into an
ABL Credit Agreement, dated as of August 13, 2012 (as amended by that Amendment
to Credit Agreement, dated as of August 24, 2012, by that Omnibus Second
Amendment to Credit Agreement and First Amendment to U.S. Security Agreement,
Canadian Security Agreement, U.S. Pledge Agreement, U.S. Guaranty and Canadian
Guaranty, dated as of March 5, 2013 (the “Omnibus Amendment”) and by that Third
Amendment, dated as of the date hereof and as further amended, modified,
restated and/or supplemented from time to time, the “Credit Agreement”),
providing for the making of Loans to the Borrowers, and the issuance of, and
participation in, Letters of Credit for the account of the Borrowers, all as
contemplated therein (the Lenders, each Issuing Lender, the Administrative
Agent, the Collateral Agent, each other Agent and the Lead Arrangers are herein
called the “Lender Creditors”);
WHEREAS, the Assignor and the Collateral Agent have entered into a Canadian
Security Agreement, dated as of August 13, 2012 (as amended by the Omnibus
Amendment and as further amended, restated, modified and/or supplemented from
time to time to, but not including the date hereof, the “Original Canadian
Security Agreement”);
WHEREAS one or more of the Canadian Subsidiaries have entered into, or may at
any time and from time to time on or after the date hereof enter into, one or
more Secured Hedging Agreements with one or more Lender Counterparties (the
“Secured Hedging Creditors”);
WHEREAS, one or more of the Canadian Subsidiaries and any Lender (and/or one or
more of its banking affiliates) reasonably acceptable to the Administrative
Agent, in each case designated to the Administrative Agent in writing by the
Company as a provider of Treasury Services (as defined below), including Bank of
America, N.A. who is hereby so designated (collectively, the “Treasury Services

 

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Creditors” and, together with the Lender Creditors and the Secured Hedging
Creditors, the “Secured Creditors”), have entered into, or in the future may
enter into, arrangements to provide (i) treasury, depositary or cash management
services (including overnight overdraft services) or (ii) credit card, merchant
card, purchasing card or store value card services to such Canadian
Subsidiaries, and automated clearinghouse transfers of funds (collectively,
“Treasury Services,” and with any written agreement evidencing such
arrangements, as amended, modified, supplemented, replaced or refinanced from
time to time, herein called a “Treasury Services Agreement”), where such
Treasury Services Agreements may be evidenced by standard account terms of the
respective Treasury Services Creditor;
WHEREAS, pursuant to the Canadian Guaranty, each Assignor has jointly and
severally guaranteed to the Secured Creditors the payment when due of all
Guaranteed Obligations as described (and defined) therein;
WHEREAS, it is a condition precedent to (i) the making of Loans to the Canadian
Borrowers, and the issuance of (and participation in) Letters of Credit for the
account of the Canadian Borrowers, in each case under the Credit Agreement, (ii)
the Secured Hedging Creditors entering into Secured Hedging Agreements with the
Canadian Subsidiaries and (iii) the extension of the Treasury Services by
Treasury Services Creditors to the Canadian Subsidiaries that each Assignor
shall have executed and delivered to the Collateral Agent this Agreement;
WHEREAS, each Assignor will benefit from the incurrence of Loans by the Canadian
Borrowers and the issuance of (and participation in) Letters of Credit for the
account of the Canadian Borrowers under the Credit Agreement and the entering
into by the Company’s Canadian Subsidiaries of Secured Hedging Agreements with
the Secured Hedging Creditors and the extension of Treasury Services to the
Company’s Canadian Subsidiaries and, accordingly, desires to execute this
Agreement to amend and restate the Original Canadian Security Agreement and in
order to (i) satisfy the condition described in the preceding paragraph and (ii)
induce (x) the Lenders to make Loans to the Canadian Borrowers and issue (and/or
participate in) Letters of Credit for the respective accounts of the Canadian
Borrowers, (y) the Secured Hedging Creditors to enter into Secured Hedging
Agreements with the Canadian Subsidiaries and (z) the Treasury Services
Creditors to provide Treasury Services to the Canadian Subsidiaries pursuant to
Treasury Services Agreements; and
WHEREAS, the Assignor and the Collateral Agent on behalf of the Secured
Creditors desire to amend and restate the Original Canadian Security Agreement
on the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
Article 1
SECURITY INTERESTS
Section 1.1
Grant of Security Interests.

(a)
As security for the prompt and complete payment and performance when due of all
of its Obligations, each Assignor does hereby assign (except in the case of
Collateral which are ULC Shares) and transfer unto the Collateral Agent, and
does hereby pledge and

 

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grant to the Collateral Agent, for the benefit of the Secured Creditors, a
continuing security interest in all of the right, title and interest of such
Assignor in, to and under all of the following personal property (and all rights
therein) of such Assignor, or in which or to which such Assignor has any rights,
in each case whether now existing or hereafter from time to time acquired:
(i)
each and every Account (and all rights to receive payments, indebtedness and
other obligations (whether constituting an Account, Chattel Paper, Instrument,
Document of Title or Intangible));

(ii)
all cash and money;

(iii)
the Cash Collateral Account and all moneys, securities, Instruments and other
investments deposited or required to be deposited in the Cash Collateral
Account;

(iv)
all (x) Deposit Accounts, collection accounts, disbursement accounts and lock
boxes and all cash, money, cheques, other negotiable instruments, funds and
other evidences of payments held therein or credited thereto, (y) Securities
Accounts, Collateral Accounts and security entitlements and Securities credited
thereto, and all cash, money, cheques, marketable securities, Financial Assets
and other property held therein or credited thereto, and (z) commodity accounts
and all cash, money, marketable securities, Financial Assets and other property
held therein or credited thereto;

(v)
all Chattel Paper;

(vi)
all promissory notes;

(vii)
all Instruments and Securities;

(viii)
all Inventory;

(ix)
all Equipment;

(x)
all Goods;

(xi)
all Investment Property;

(xii)
all Intangibles (including corporate and other tax refunds);

(xiii)
to the extent relating to, evidencing or governing any of the items referred to
in preceding clauses (i) through (xii), all Permits, Documents of Title,
Intangibles (including data processing software but excluding Copyrights,
Patents, Trade Secrets and Marks), Instruments, letter-of-credit rights, related
letters of credit, guarantees and collateral liens and other claims and causes
of action, documents of title, customs receipts, insurance, shipping and other
documents and other materials related to the foregoing (including to the
purchase or import of any Inventory);

 

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(xiv)
to the extent relating to, evidencing or governing any of the items referred to
in the preceding clauses (i) through (xiii), all Supporting Obligations;

(xv)
all books and records relating to the items referred to in the preceding clauses
(i) through (x) (including all books, databases, customer lists, and records,
whether tangible or electronic, which contain any information relating to any of
the items referred to in the preceding clauses (i) through (xiii);

(xvi)
all substitutions, replacements accessions, Proceeds and products of any and all
of the foregoing, including collateral security and guarantees with respect to
any of the foregoing and all cash, money, insurance proceeds, Instruments,
Securities, Financial Assets, income, royalties, payments, licensing, damages
and Deposit Accounts constituting Proceeds of the foregoing; and

(xvii)
(all of the above (i) to and including (xvi), collectively, the “Collateral”).

(b)
Notwithstanding anything herein to the contrary, in no event shall the security
interests and liens granted under Section 1.1(a) hereof attach to, and the term
“Collateral” (and the component terms thereof) shall not include, (i) any
property, interest or other rights for so long as the grant of such security
interest shall constitute or result in (A) a breach or termination pursuant to
the terms of, or a default under, any Intangible, lease, license, contract,
agreement or other document, (B) a breach of any law or regulation which
prohibits the creation of a security interest thereunder (other than to the
extent that any such term specified in clause (A) or (B) above is rendered
ineffective against the Collateral Agent pursuant to Section 40(4) of the PPSA
(or any successor provision or provisions of the PPSA of any relevant
jurisdiction or any other applicable law) or principles of equity) or (C)
require the consent of a Governmental Authority to permit the grant of a
security interest therein (and such consent has not been obtained) (each a
“Restricted Right”); provided, however, that the Security Interest shall attach
immediately at such time as the condition causing such abandonment,
invalidation, unenforceability, breach or termination shall no longer be
effective and to the extent severable, shall attach immediately to any portion
of such property or other rights that does not result in any of the consequences
specified in clause (A), (B) or (C) above; (ii) Deposit Accounts the balance of
which consists (x) exclusively of withheld income taxes, employment taxes, or
amounts required to be paid over to certain employee benefit plans and (y)
segregated deposit accounts constituting and the balance of which consists
solely of funds set aside in connection with tax, payroll and trust accounts;
(iii) any consumer goods; and (iv) the last day of the term of any lease or
sublease of real property or any agreement for a lease or sublease of real
property, now held or hereafter acquired by any Assignor, but an Assignor will
stand possessed of any such last day upon trust to assign and dispose of it as
the Collateral Agent may reasonably direct; (the assets described in the
preceding clauses (i) through (iv) hereof, collectively the “Excluded Assets”).
The Security Interest in respect of each Restricted Right will constitute a
trust created in favour of the Collateral Agent for the benefit of the Secured
Creditors, pursuant to which such Assignor holds as trustee all proceeds and
other benefits arising under or in connection with the Restricted Right in trust
for the Collateral Agent, for the benefit of the Secured Creditors, on the
following basis (i) until an Event of Default shall have occurred and be
continuing such Assignor is entitled to receive all such proceeds and other
benefits; and (ii) if any Event of Default shall have occurred and be
continuing,

 

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(A) all rights of such Assignor to receive such proceeds and other benefits
cease and all such proceeds will be immediately paid over to the Collateral
Agent for the benefit of the Secured Creditors, and (B) such Assignor will take
all actions requested by the Collateral Agent to collect and enforce payment and
other rights arising under the Restricted Right.
(c)
The security interest of the Collateral Agent under this Agreement extends to
all Collateral which any Assignor may acquire, or with respect to which any
Assignor may obtain rights, at any time during the term of this Agreement.

(d)
Notwithstanding anything herein to the contrary, the Assignors make no
representations or warranties hereunder, and the covenants hereunder shall not
apply, in respect of the Excluded Assets.

Section 1.2
Grant of License.

For purposes of enabling the Collateral Agent to exercise rights and remedies
under this Agreement each Assignor hereby grants to the Collateral Agent and its
agents, representatives and designees an irrevocable, nonexclusive, royalty free
license, rent-free license and rent-free lease (which will be binding on any
successor or assignee of such Assignor) to, after the occurrence and during the
continuance of an Event of Default, have access to and use all of such
Assignor’s (x) Real Property (including the buildings and other improvements
thereon), Equipment and fixtures (whether or not considered Real Property) and
(y) Intellectual Property (including, all Domain Names, Patents, Marks,
Copyrights, Trade Secrets and object code and access to all media, written or
electronic, in which any licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof, as
well as an irrevocable, nonexclusive license to grant to any third party a
sub-licensable sub-license to use the foregoing rights but excluding any source
code) for which the Collateral Agent hereby agrees to take all commercially
reasonable actions in connection with its use of such intellectual property to
protect such Assignor’s rights and interests in such intellectual property
(provided that in any event, the Collateral Agent shall not have any liability
in connection therewith, other than liability which is the direct result of the
Collateral Agent’s gross negligence or willful misconduct, as determined by a
court of competent jurisdiction in a final and non-appealable decision), for the
purpose of (i) arranging for and effecting the sale, distribution or other
disposition of Collateral located on any such Real Property, including the
manufacture, production, completion, packaging, advertising, distribution and
other preparation of such Collateral (including, work-in-process, raw materials
and complete Inventory) for sale, distribution or other disposition, (ii)
selling (by public auction, private sale, going out of business sale or similar
sale, whether in bulk, in lots or to customers in the ordinary course of
business or otherwise and which sale may include augmented Inventory of the same
type sold in any Assignor’s business), (iii) storing or otherwise dealing with
the Collateral, (iv) collecting all Accounts and copying , using and preserving
any and all information relating to the Collateral, and (v) otherwise dealing
with the Collateral as part of the exercise of any rights or remedies provided
to the Collateral Agent hereunder or under the other Credit Documents, in each
case without the interference by any Assignor or any other Subsidiary of the
Company and without incurring any liability to any Assignor or any other
Subsidiary of the Company, except any liability which is the direct result of
the Collateral Agent’s gross negligence or willful misconduct (as determined by
a court of competent jurisdiction in a final and non-appealable decision). Each
Assignor will, and will cause each of its Subsidiaries to, cooperate with the
Collateral Agent and its agents, representatives and designees in allowing the
Collateral Agent to exercise the foregoing rights. To the extent that any asset
of any Assignor in which the Collateral Agent has access or use rights as
provided above is to be sold or otherwise disposed of after the occurrence and
during the continuance of an Event of Default, such Assignor shall,

 

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if requested by the Collateral Agent in writing, cause the buyer to agree in
writing to be subject to, and comply with the terms of, this Section 1.2. The
Collateral Agent shall have the right to bring an action to enforce its rights
under this Section 1.2, including, an action seeking possession of the
applicable Collateral and/or specific performance of this Section 1.2.
Section 1.3
Power of Attorney.

Subject to Section 5.3, until this Agreement is terminated in accordance with
its terms, each Assignor hereby constitutes and appoints the Collateral Agent
its true and lawful attorney, irrevocably, with full power after the occurrence
of and during the continuance of an Event of Default (in the name of such
Assignor or otherwise) to act, require, demand, receive, compound and give
acquittance for any and all moneys and claims for moneys due or to become due to
such Assignor under or arising out of the Collateral, to endorse any cheques or
other instruments or orders in connection therewith and to file any claims or
take any action or institute any proceedings which the Collateral Agent may deem
to be necessary or advisable to protect the interests of the Secured Creditors,
which appointment as attorney is coupled with an interest. Notwithstanding the
foregoing, to the extent this power of attorney is exercised with respect any
Collateral that is ULC Shares, all such acts and things shall be exercised only
in the name of the relevant Assignor, and as attorney for the relevant Assignor,
and not in the Collateral Agent’s own right or name.
Section 1.4
Attachment.

(a)
Each Assignor acknowledges that (i) value has been given, (ii) it has rights in,
or the power to transfer, rights in the Collateral (other than after-acquired
Collateral) to the Collateral Agent, (iii) it has not agreed to postpone the
time of attachment of the Security Interest, and (iv) it has received a copy of
this Agreement.

(b)
To the extent that any Assignor at any time or from time to time owns, acquires
or obtains any right, title or interest in any Securities and Instruments and
other Investment Property that constitute Collateral (the “Specified
Collateral”), such Assignor shall (to the extent provided below) take the
following actions as set forth below (as promptly as practicable and, in any
event, within 30 days after it obtains such Specified Collateral) for the
benefit of the Collateral Agent and the other Secured Creditors:

(i)
with respect to a certificated security (other than (x) a certificated security
credited on the books of a securities intermediary), such Assignor shall
physically deliver such certificated security to the Collateral Agent, endorsed
to the Collateral Agent or endorsed in blank;

(ii)
with respect to an uncertificated security (other than an uncertificated
security credited on the books of a securities intermediary) issued by a
Subsidiary of the Company, such Assignor shall cause the issuer of such
uncertificated security to duly authorize, execute, and deliver to the
Collateral Agent, an agreement for the benefit of the Collateral Agent and the
other Secured Creditors substantially in the form of Annex H to the U.S. Pledge
Agreement (appropriately completed to the reasonable satisfaction of the
Collateral Agent and with such modifications, if any, as shall be reasonably
satisfactory to the Collateral Agent) pursuant to which such issuer agrees to
comply with any and all instructions originated by the Collateral Agent without
further consent by the registered owner and not to comply with instructions
regarding such uncertificated security originated by any other Person other than
a court of

 

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competent jurisdiction (it being understood that the Collateral Agent shall not
deliver any such instructions until after the occurrence and during the
continuance of an Event of Default);
(iii)
with respect to a certificated security, uncertificated security, partnership
interest or limited liability company interest issued by a Subsidiary of the
Company in a Securities Account or credited on the books of a securities
intermediary, such Assignor shall promptly notify the Collateral Agent thereof
and shall promptly use commercially reasonable efforts to take (x) all actions
required (i) to comply with the applicable rules of such securities intermediary
and (ii) to perfect by control the security interest of the Collateral Agent
under applicable law and (y) such other actions as the Collateral Agent deems
necessary or reasonably desirable to effect the foregoing;

(iv)
with respect to a partnership interest or a limited liability company interest
(other than a partnership interest or limited liability company interest
credited to a Securities Account or on the books of a securities intermediary),
(1) if such partnership interest or limited liability company interest is
represented by a certificate and is a “security” for purposes of the STA, the
procedure set forth in Section 1.4(b)(i), and (2) if such partnership interest
or limited liability company interest is not represented by a certificate and is
an uncertificated security for purposes of the STA, the procedure set forth in
Section 1.4(b)(ii);

(v)
with respect to any Note with a value equal to $3,000,000 or more, physical
delivery of each such Note to the Collateral Agent, endorsed in blank, or, at
the request of the Collateral Agent, endorsed to the Collateral Agent; and

(vi)
with respect to cash proceeds from any of the Collateral described in this
Section 1.4(b) upon the occurrence and continuance of an Event of Default, upon
the Collateral Agent’s written request, (i) establishment by the Collateral
Agent of a cash account in the name of such Assignor over which the Collateral
Agent shall have “control” within the meaning of the UCC and at any time any
Default or Event of Default is in existence no withdrawals or transfers may be
made therefrom by any Person except with the prior written consent of the
Collateral Agent and (ii) deposit of such cash in such cash account.

(c)
In addition to the actions required to be taken pursuant to Section 1.4(b), each
Assignor shall, take the following additional actions with respect to the
Specified Collateral and with respect to all Specified Collateral of such
Assignor whereby or with respect to which the Collateral Agent may obtain
“control” thereof within the meaning of the STA Ontario (or any other applicable
securities transfer legislation), such Assignor shall take all actions requested
from time to time by the Collateral Agent as may be necessary or reasonably
advisable in the reasonable judgment of the Collateral Agent so that “control”
of such Specified Collateral is obtained and at all times held by the Collateral
Agent in accordance with Section 1.4(b).

(d)
If any Assignor owns or acquires any Instrument with a value equal to $3,000,000
or more constituting Collateral (other than cheques and other payment
instruments received and collected in the ordinary course of business and any
Notes referred to in Section

 

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1.4(b)(v)), such Assignor will within 30 days thereafter notify the Collateral
Agent thereof, and upon request by the Collateral Agent will promptly deliver
such Instrument to the Collateral Agent appropriately endorsed to the order of
the Collateral Agent. For the purpose of this Section 1.4(d), references to the
term “Instrument” shall be limited to subsection (i) and (v) of the definition
of “Instrument”.
Section 1.5
Subsequently Acquired Collateral.

If any Assignor shall acquire (by purchase, stock dividend, distribution or
otherwise) any additional Specified Collateral at any time or from time to time
after the date hereof, such Assignor will thereafter take (or cause to be taken)
all action (as promptly as practicable and, in any event, within 30 days after
it obtains such Specified Collateral) with respect to such Specified Collateral
in accordance with the procedures set forth in Section 1.4(b) and
Section 1.4(c), and will (i) with respect to any Specified Collateral, promptly
thereafter deliver to the Collateral Agent a certificate executed by an
authorized officer of such Assignor describing such Specified Collateral and
certifying that the same has been duly pledged in favor of the Collateral Agent
(for the benefit of the Secured Creditors) hereunder and (ii) promptly
thereafter deliver to the Collateral Agent supplements to Annexes G and H as are
necessary to cause such Annexes to be complete and accurate at such time.
Article 2
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this Agreement,
as follows:
Section 2.1
Necessary Filings.

The provisions of this Agreement (when executed and delivered by all parties
thereto) are effective to create in favor of the Collateral Agent, for the
benefit of the Secured Creditors, a legal, valid and enforceable security
interest in all right, title and interest of the Assignors in all of the
Collateral described herein, and when proper PPSA financing statements have been
filed in the appropriate filing offices against each Assignor, the Collateral
Agent, for the benefit of the Secured Creditors, shall have a perfected security
interest in all right, title and interest in all of the Collateral described
herein of such Assignor to the extent such security interest can be perfected by
filing a PPSA financing statement under the PPSA subject to no other Liens other
than Permitted Liens (it being understood that the Permitted Liens described in
Section 10.01(s) of the Credit Agreement are subject to the terms of the
Intercreditor Agreement at any time that Permitted Additional Secured
Indebtedness is outstanding).
Section 2.2
No Liens.

Such Assignor is, and as to all Collateral acquired by it from time to time
after the date hereof such Assignor will be, the owner of all Collateral free
from any Lien, security interest, encumbrance or other right, title or interest
of any Person (other than Permitted Liens), and such Assignor shall defend the
Collateral against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to the Collateral Agent (other than
Permitted Liens).
Section 2.3
Other Financing Statements.

As of the date hereof, there is no financing statement (or similar statement or
instrument of registration under the law of any relevant jurisdiction) covering
or purporting to cover any interest of any kind in the Collateral (other than
financing statements, similar statements or instruments of registration filed in
respect of Permitted Liens), and so long as the Termination Date has not
occurred,

 

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such Assignor will not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) or statements relating to the Collateral, except
financing statements filed or to be filed in respect of and covering the
security interests granted hereby by such Assignor or in connection with
Permitted Liens.
Section 2.4
Chief Executive Office, Record Locations.

The chief executive office and the registered office of such Assignor is, on the
date of this Agreement, located at the address indicated on Annex A hereto for
such Assignor. During the period of the four calendar months preceding the date
of this Agreement, the chief executive office of such Assignor has not been
located at any address other than that indicated on Annex A in accordance with
the immediately preceding sentence, in each case unless each such other address
is also indicated on Annex A hereto for such Assignor.
Section 2.5
Location of Inventory and Equipment

All Inventory and Equipment having a net book value in excess of US$1,000,000
held on the date hereof by each Assignor, other than any such Inventory and
Equipment (i) in transit or out for repair, (ii) at customer, resellers,
supplier or contract manufacturer locations, (iii) located outside of Canada, or
(iv) at locations used solely by such Assignor for purposes of warehousing spare
parts, is located at one of the locations listed on Annex F hereto for such
Assignor.
Section 2.6
Legal Names; Type of Organization; Jurisdiction of Organization; Organizational
Identification Numbers; Federal Employer Identification Number; Changes Thereto;
etc.

As of the date hereof, the exact legal name of each Assignor, the type of
organization of such Assignor, the jurisdiction of organization of such
Assignor, the organizational identification number (if any) of such Assignor and
the Federal Employer Identification Number (if any), is listed on Annex C hereto
for such Assignor. Such Assignor shall not change its legal name, its type of
organization, its status as a Registered Organization (in the case of a
Registered Organization), its jurisdiction of organization, the location of its
chief executive office or its registered office or any of the other items
described in Annex A or Annex C, as applicable, its organizational
identification number (if any) or its Federal Employer Identification Number (if
any) or its Federal Employer Identification Number (if any) from that used on
Annex A and Annex C hereto, as applicable except that any such changes shall be
permitted (so long as not in violation of the applicable requirements of the
Credit Documents and so long as same do not involve (x) a Registered
Organization ceasing to constitute same or (y) such Assignor changing its
jurisdiction of organization or location of its chief executive office or
registered office to a jurisdiction of organization or location, as the case may
be, outside of Canada or any province or territory thereof) if (i) it shall have
given to the Collateral Agent not less than 10 days’ prior written notice of
each change to the information listed on Annex A and Annex C as applicable (as
adjusted for any subsequent changes thereto previously made in accordance with
this sentence), together with a supplement to Annex A and Annex C as applicable
which shall correct all information contained therein for such Assignor, and
(ii) in connection with the respective change or changes, it shall have taken
all action reasonably necessary or requested by the Collateral Agent to
maintain, preserve or perfect the security interests of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect including granting to the Collateral Agent, for the
benefit of the Secured Creditors, security interests, assignments, mortgages,
charges, hypothecations and pledges in the personal property and fixtures of the
Assignor that constitute Collateral and are not subject to a valid and perfected
first ranking security interest (subject only to Permitted Liens) constituted by
the Security Documents, in each relevant jurisdiction as determined by the
Collateral Agent. In addition, to the extent

 

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that such Assignor does not have an organizational identification number on the
date hereof and later obtains one, such Assignor shall promptly thereafter
notify the Collateral Agent of such organizational identification number and
shall take all actions reasonably requested by the Collateral Agent to the
extent necessary to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby fully perfected and in full force
and effect.
Section 2.7
Trade Names; etc.

As of the date hereof, such Assignor does not have or operate in any
jurisdiction under, or in the five years preceding the date hereof has not had
or has not operated in any jurisdiction under, any trade names, fictitious names
or other names except its legal name as specified in Annex C and such other
trade or fictitious names as are listed on Annex D hereto for such Assignor.
Section 2.8
Certain Significant Transactions.

During the one year period preceding the date of this Agreement, no Person shall
have merged or consolidated with or into any Assignor, and no Person shall have
liquidated into, or transferred all or substantially all of its assets to, any
Assignor, in each case except as described in Annex E hereto. With respect to
any transactions so described in Annex E hereto, the respective Assignor shall
have furnished such information with respect to the Person (and the assets of
the Person and locations thereof) which merged with or into or consolidated with
such Assignor, or was liquidated into or transferred all or substantially all of
its assets to such Assignor, and shall have furnished, or caused to be
furnished, to the Collateral Agent such PPSA lien searches as may have been
requested by the Collateral Agent with respect to such Person and its assets, to
establish that no security interest (excluding Permitted Liens) continues
perfected on the date hereof with respect to any Person described above (or the
assets transferred to the respective Assignor by such Person).
Section 2.9
Collateral in the Possession of a Bailee.

Without limiting the provisions of the Credit Agreement, if an Event of Default
shall occur and be continuing and if any Inventory or other Goods, other than
Inventory or Goods having a market value not in excess of $2,500,000 in the
aggregate, are in the possession of a bailee, such Assignor shall promptly
notify the Collateral Agent thereof and, if requested by the Collateral Agent,
shall use its commercially reasonable efforts to promptly obtain an
acknowledgment from such bailee, in form and substance reasonably satisfactory
to the Collateral Agent, that the bailee holds such Collateral for the benefit
of the Collateral Agent and shall act upon the instructions of the Collateral
Agent, without the further consent of such Assignor. The Collateral Agent agrees
with such Assignor that the Collateral Agent shall not give any such
instructions unless an Event of Default has occurred and is continuing.
Section 2.10
Recourse.

This Agreement is made with full recourse to each Assignor and pursuant to and
upon all the warranties, representations, covenants and agreements on the part
of such Assignor contained herein and in the other Secured Debt Agreements and
otherwise in writing in connection herewith or therewith.
Article 3
SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; SECURITIES;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
Section 3.1
Additional Representations and Warranties.

 

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As of the time when each of its Accounts arises, each Assignor shall be deemed
to have represented and warranted that each such Eligible Account, and all
records, papers and documents relating thereto (if any) are genuine and what
they purport to be, and that all papers and documents (if any) relating thereto
(i) will, to the knowledge of a Responsible Officer of such Assignor, represent
the genuine, legal, valid and binding obligation of the account debtor
evidencing indebtedness unpaid and owed by the respective account debtor arising
out of the performance of labor or services or the sale or lease and delivery of
the merchandise listed therein, enforceable against the account debtor in
accordance with its terms, subject to applicable bankruptcy, insolvency or other
similar laws generally affecting creditors’ rights and equitable principles, or
both, (ii) will be the only original writings evidencing and embodying such
obligation of the account debtor named therein (other than copies created for
general accounting purposes or other ordinary corporate purposes), and (iii)
will be in compliance and will conform in all material respects with all
applicable federal, provincial and local laws and applicable laws of any
relevant foreign jurisdiction.
Section 3.2
Maintenance of Records.

Each Assignor will keep and maintain at its own cost and expense accurate
records of its Accounts and Contracts, in accordance with Section 9.02 of the
Credit Agreement, and such Assignor will make the same available on such
Assignor’s premises to the Collateral Agent for inspection in accordance with
Section 9.02 the Credit Agreement. Upon the occurrence and during the
continuance of an Event of Default and at the request of the Collateral Agent,
such Assignor shall, at its own cost and expense, deliver copies (or, if
requested by the Collateral Agent after the occurrence and during the
continuance of an Event of Default, originals) of all tangible evidence of its
Accounts and Contract Rights (including, all documents evidencing the Accounts
and all Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of such evidence and books and records may be retained
by such Assignor). Upon the occurrence and during the continuance of an Event of
Default and if the Collateral Agent so directs, such Assignor shall legend, in
form and manner reasonably satisfactory to the Collateral Agent, the Accounts
and the Contracts, as well as books, records and documents (if any) of such
Assignor evidencing or pertaining to such Accounts and Contracts with an
appropriate reference to the fact that such Accounts and Contracts have been
assigned to the Collateral Agent and that the Collateral Agent has a security
interest therein.
Section 3.3
Direction to Account Debtors; Contracting Parties; etc.

Upon the occurrence and during the continuance of an Event of Default (but
without limiting the provisions of the Credit Agreement), if the Collateral
Agent so directs any Assignor, such Assignor agrees (A) to cause all payments on
account of the Accounts and Contracts to be made directly to the Cash Collateral
Account, (B) that the Collateral Agent may, at its option, directly notify the
obligors with respect to any Accounts and/or under any Contracts to make
payments with respect thereto as provided in the preceding clause (A), and (C)
that the Collateral Agent may enforce collection of any such Accounts and
Contracts and may adjust, settle or compromise the amount of payment thereof, in
the same manner and to the same extent as such Assignor. Without notice to or
assent by any Assignor, the Collateral Agent may, upon the occurrence and during
the continuance of an Event of Default, apply any or all amounts then in, or
thereafter deposited in, the Cash Collateral Account toward the payment of the
Obligations in the manner provided in Section 5.6 of this Agreement. The
reasonable out-of-pocket costs and expenses of collection (including reasonable
out-of-pocket attorneys’ fees), whether incurred by an Assignor or the
Collateral Agent, shall be borne by the relevant Assignor. The Collateral Agent
shall deliver a copy of each notice given to any such obligors referred to in
the preceding clause (B) to the relevant Assignor, provided that (x) the failure
by the Collateral Agent to so notify such Assignor shall not affect the
effectiveness of such notice or the other rights of the Collateral Agent created

 

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by this Section 3.3 and (y) no such notice shall be required if an Event of
Default of the type described in Section 11.05 of the Credit Agreement has
occurred and is continuing.
Section 3.4
Modification of Terms; etc.

Except (w) in accordance with such Assignor’s ordinary course of business, (x)
as otherwise in such Assignor’s reasonable business judgment, (y) as permitted
by the Credit Agreement or (z) as permitted by Section 3.5 hereof, no Assignor
shall rescind or cancel any indebtedness evidenced by any Account or under any
Contract, or modify any term thereof or make any adjustment with respect
thereto, or extend or renew the same, or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto, or sell any Account or
Contract, or interest therein, without the prior written consent of the
Collateral Agent. Except to the extent otherwise permitted by this Agreement or
the Credit Agreement, no Assignor will do anything to impair the rights of the
Collateral Agent in the Accounts or Contracts.
Section 3.5
Collection.

Except as such Assignor otherwise determines in its reasonable business
judgment, each Assignor shall endeavor in accordance with reasonable business
practices to cause to be collected from the account debtor named in each of its
Accounts or obligor under any Contract, as and when due (including, amounts
which are delinquent, such amounts to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under or on
account of such Account or Contract, and apply promptly upon receipt thereof all
such amounts as are so collected to the outstanding balance of such Account or
under such Contract. Except as otherwise directed by the Collateral Agent after
the occurrence and during the continuation of an Event of Default, any Assignor
may allow in the ordinary course of business as adjustments to amounts owing
under its Accounts and Contracts (i) an extension or renewal of the time or
times of payment, or settlement for less than the total unpaid balance, which
such Assignor finds appropriate in accordance with its reasonable business
judgment, (ii) a refund or credit due as a result of returned or damaged
merchandise or improperly performed services or for other reasons which such
Assignor finds appropriate in accordance with its reasonable business judgment
and (iii) such other adjustments which such Assignor finds appropriate in
accordance with its reasonable business judgment.
Section 3.6
Securities and Instruments.

(a)
Annex G and Annex H list all Securities and Instruments owned or held by such
Assignor on the date of this Agreement. Annex G sets out, for each class of
Securities listed in the schedule, the percentage amount that such Securities
represent of all issued and outstanding Securities of that class and whether the
Securities are certificated securities or uncertificated securities.

(b)
Securities and Instruments that are Collateral have been, where applicable, duly
and validly issued and acquired and are fully paid and non-assessable (subject
to the assessibility of any ULC Shares) and are subject to no options to
purchase or similar rights.

(c)
Except as described in Annex G or Annex H, no transfer restrictions apply to the
Securities and Instruments listed in Annex G or Annex H. Each Assignor has
delivered to the Collateral Agent copies of all shareholder, partnership or
trust agreements applicable to each issuer of such Securities and Instruments
which are in such Assignor’s possession and confirms that any interest in a
partnership or limited liability company

 

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that now, or at any time, forms part of the Collateral is, and will be, a
“security” for the purposes of the STA.
(d)
The Securities and Instruments that are Collateral constitute, where applicable,
the legal, valid and binding obligation of such Assignor of such Securities and
Instruments, enforceable in accordance with their terms, subject only to any
limitation under applicable laws relating to (i) bankruptcy, insolvency,
fraudulent conveyance, arrangement, reorganization or creditors’ rights
generally, and (ii) the discretion that a court may exercise in the granting of
equitable remedies.

(e)
The security interests created under this Agreement (when executed and delivered
by all parties hereto) are effective to create in favour of the Collateral
Agent, for the benefit of the Secured Creditors, a legal, valid and enforceable
security interest in all right, title and interest of the Assignors in all of
the Collateral, and when proper PPSA financing change statements have been filed
in the appropriate filing offices against each Assignor, the Collateral Agent,
for the benefit of the Secured Creditors, shall have a perfected security
interest in all Collateral to the extent such security interest can be perfected
by filing a PPSA financing change statement under the PPSA subject to no
security interests of any other Person (other than Permitted Liens (it being
understood that the Permitted Liens described in Section 10.02(s) of the Credit
Agreement are subject to the terms of the Intercreditor Agreement at any time
that Permitted Additional Secured Indebtedness is outstanding), subject to the
terms of the Intercreditor Agreement at any times that Permitted Additional
Secured Indebtedness is outstanding, Permitted Liens described in Section
10.01(s) of the Credit Agreement).

(f)
Such Assignor has not consented to, will not consent to, and has no knowledge of
any control by any person with respect to any Collateral other than the
Collateral Agent.

(g)
Such Assignor will notify the Collateral Agent immediately upon becoming aware
of any change in an “issuer’s jurisdiction” in respect of any uncertificated
Securities that are Collateral or any change in a “securities intermediary’s
jurisdiction” in respect of any security entitlements, financial assets or
Securities Accounts that are Collateral.

For the purpose of this Section 3.6, (i) references to the term “Instrument”
shall be limited to subsection (i) and (v) of the definition of “Instrument” and
shall only refer to Instruments with a value equal to US$3,000,000 or more
constituting Collateral and (ii) references to the term “Securities” shall be
limited to Securities in the Subsidiaries of such Assignor.
Section 3.7
Voting.

Unless and until there shall have occurred and be continuing any Event of
Default, each Assignor shall be entitled to exercise any and all voting and
other rights pertaining to the Collateral owned by it, and to give consents,
waivers or ratifications in respect thereof; provided that, in each case, no
vote shall be cast or any consent, waiver or ratification given or any action
taken or omitted to be taken which would violate, or result in a breach of any
covenant contained in, any of the terms of any Secured Debt Agreement, or in a
manner adverse to the interests of the Collateral Agent or any other Secured
Creditor in the Collateral in any material respect, unless permitted by the
terms of any Secured Debt Agreements. For greater certainty, nothing in this
paragraph is intended to suggest that an Assignor pledging ULC Shares would not
have the rights provided for in this subsection in the absence of this
subsection. Except in the case of ULC Shares, all such rights of each Assignor
to vote and to give consents, waivers and

 

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ratifications shall cease following written notice from the Collateral Agent in
case an Event of Default has occurred and is continuing (provided that no such
notice shall be required if any Event of Default under Section 11.05 of the
Credit Agreement has occurred and is continuing), and Section 5.1 hereof shall
become applicable.
Section 3.8
Dividends and Other Distributions.

Except with respect to any ULC Shares, unless and until there shall have
occurred and be continuing an Event of Default and following written notice from
the Collateral Agent (provided that no such notice shall be required if any
Event of Default under Section 11.05 of the Credit Agreement has occurred and is
continuing), all cash dividends, cash distributions, cash Proceeds and other
cash amounts payable in respect of the Collateral shall be paid to the
respective Assignor. For greater certainty, nothing in this paragraph is
intended to suggest that an Assignor pledging ULC Shares would not have the
rights provided for in this section in the absence of this section. The Assignor
shall be entitled to receive (except in the case of proceeds of ULC Shares)
directly, subject to the other terms of this Agreement:
(i)
all other or additional stock, notes, certificates, limited liability company,
partnership interests, instruments or other securities or property (including,
but not limited to, cash dividends other than as set forth above) paid or
distributed by way of dividend or otherwise in respect of the Collateral;

(ii)
all other or additional stock, notes, certificates, limited liability company
interests, partnership interest, instruments or other securities or property
(including, but not limited to, cash subject to the first sentence of this
Section 3.8) paid or distributed in respect of the Collateral by way of
stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and

(iii)
all other or additional stock, notes, certificates, limited liability company
interests, partnership interest, instruments or other securities or property
(including, but not limited to, cash) which may be paid in respect of the
Collateral by reason of any consolidation, amalgamation, merger, exchange of
stock, conveyance of assets, liquidation or similar corporate or other
reorganization.

If an Assignor which has pledged ULC Shares receives any of the property
described in the preceding paragraphs (i), (ii) and (iii) such Assignor shall
deliver such property to the Collateral Agent to hold as Collateral hereunder.
All cash dividends, cash distributions or other cash payments which are received
by any Assignor contrary to the provisions of this Section 3.8 or Section 5.1,
with the exception of any dividends, distributions and other payments that are
received pertaining to ULC Shares, shall be received in trust for the benefit of
the Collateral Agent, shall be segregated from other property or funds of such
Assignor and shall be promptly paid over to the Collateral Agent as Collateral
in the same form as so received (with any necessary endorsement).
Section 3.9
Assignors Remain Liable Under Accounts.

Anything herein to the contrary notwithstanding, the Assignors shall remain
liable under each of the Accounts to observe and perform all of the conditions
and obligations to be observed and performed by them thereunder, all in
accordance with the terms of any agreement giving rise to such Accounts.

 

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Neither the Collateral Agent nor any other Secured Creditor shall have any
obligation or liability under any Account (or any agreement giving rise thereto)
by reason of or arising out of this Agreement or the receipt by the Collateral
Agent or any other Secured Creditor of any payment relating to such Account
pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be
obligated in any manner to perform any of the obligations of any Assignor under
or pursuant to any Account (or any agreement giving rise thereto), to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by them or as to the sufficiency of any performance by any party under
any Account (or any agreement giving rise thereto), 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 them or to which they may be
entitled at any time or times.
Section 3.10
Assignors Remain Liable Under Contracts.

Anything herein to the contrary notwithstanding, the Assignors shall remain
liable under each of the Contracts to observe and perform all of the conditions
and obligations to be observed and performed by them thereunder, all in
accordance with and pursuant to the terms and provisions of each Contract.
Neither the Collateral Agent nor any other Secured Creditor shall have any
obligation or liability under any Contract by reason of or arising out of this
Agreement or the receipt by the Collateral Agent or any other Secured Creditor
of any payment relating to such Contract pursuant hereto, nor shall the
Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any performance by any party under any Contract, 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 them or to which they may
be entitled at any time or times.
Section 3.11
Letter-of-Credit Rights.

If any Assignor is at any time a beneficiary under a letter of credit
constituting Collateral in respect of Eligible Accounts or Eligible Inventory,
with a stated amount of $3,000,000 or more in the aggregate, such Assignor shall
no later than the next date required to deliver a compliance certificate
pursuant to Section 9.01(d) of the Credit Agreement, notify the Collateral Agent
thereof and, at the request of the Collateral Agent, such Assignor shall,
pursuant to an agreement in form and substance reasonably satisfactory to the
Collateral Agent, use its commercially reasonable efforts to (i) arrange for the
issuer and any confirmer of such letter of credit to consent to an assignment to
the Collateral Agent of the proceeds of any drawing under such letter of credit
or (ii) arrange for the Collateral Agent to become the transferee beneficiary of
such letter of credit, with the Collateral Agent agreeing, in each case, that
the proceeds of any drawing under the letter of credit are retained by the
Collateral Agent and to be applied as provided in this Agreement only after the
occurrence and during the continuance of an Event of Default.
Section 3.12
Further Actions.

Each Assignor will, at its own expense, take such actions as are required by
Section 9.12(a) of the Credit Agreement.
Article 4
PROVISIONS CONCERNING ALL COLLATERAL
Section 4.1
Protection of Collateral Agent’s Security.

Except as otherwise not prohibited by the Credit Documents, no Assignor will do
anything to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times maintain

 

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insurance, at such Assignor’s own expense to the extent and in the manner
provided in the Credit Agreement. Except to the extent otherwise permitted to be
retained by such Assignor or applied by such Assignor pursuant to the terms of
the Credit Agreement, the Collateral Agent shall, at the time any proceeds of
such insurance are distributed to the Secured Creditors, apply such proceeds in
accordance with Section 5.6 hereof. Each Assignor assumes all liability and
responsibility in connection with the Collateral acquired by it and the
liability of such Assignor to pay the Obligations shall in no way be affected or
diminished by reason of the fact that such Collateral may be lost, destroyed,
stolen, damaged or for any reason whatsoever unavailable to such Assignor.
Section 4.2
Additional Information.

Each Assignor will, at its own expense, from time to time upon the reasonable
request of the Collateral Agent, promptly (and in any event within 10 days after
its receipt of the respective request) furnish to the Collateral Agent such
information with respect to the Collateral (including the identity of the
Collateral or such components thereof as may have been requested by the
Collateral Agent, the value and location of such Collateral, etc.) as may be
requested by the Collateral Agent. Without limiting the forgoing, each Assignor
agrees that it shall promptly (and in any event within 10 days after its receipt
of the respective request) furnish to the Collateral Agent such updated Annexes
hereto as may from time to time be reasonably requested by the Collateral Agent.
Section 4.3
Financing Statements.

Each Assignor agrees to authorize, execute (where required by applicable law)
and deliver (or cause to be executed and delivered) to the Collateral Agent such
financing statements and financing change statements in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are reasonably necessary or desirable in the
opinion of, and at the request of, the Collateral Agent in order to establish
and maintain a valid, enforceable, perfected security interest in the Collateral
as provided herein and the other rights and security contemplated hereby. Each
Assignor will pay any applicable filing fees, recordation taxes and related
expenses relating to its Collateral. Each Assignor hereby authorizes the
Collateral Agent to file any such financing statements or financing change
statements without the signature of such Assignor where permitted by law (and
such authorization includes describing the Collateral as “all assets” or “all
personal property” of such Assignor or words of similar effect). Notwithstanding
the foregoing, if reasonably requested by any Assignor, the Collateral Agent
shall, at Assignor’s expense, make such filings as may be reasonably requested
to evidence that the security interests hereunder do not attach to any property
that constitutes Excluded Assets.
Article 5
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
Section 5.1
Remedies; Obtaining the Collateral Upon Default.

Subject to Section 5.3, each Assignor agrees that, if any Event of Default shall
have occurred and be continuing, then and in every such case, the Collateral
Agent, in addition to any rights now or hereafter existing under applicable law
and under the other provisions of this Agreement, shall have all rights as a
secured creditor under any PPSA, and such additional rights and remedies to
which a secured creditor is entitled under the laws in effect in all relevant
jurisdictions and may:
(i)
personally, or by agents or attorneys, immediately take possession of the
Collateral or any part thereof, from such Assignor or any other Person who then
has possession of any part thereof with or without notice or process of law, and

 

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for that purpose may enter upon such Assignor’s premises where any of the
Collateral is located and remove the same and use in connection with such
removal any and all services, supplies, aids and other facilities of such
Assignor;
(ii)
instruct the obligor or obligors on any agreement, instrument or other
obligation (including, the Accounts and the Contracts) constituting the
Collateral to make any payment required by the terms of such agreement,
instrument or other obligation directly to the Collateral Agent and may exercise
any and all remedies of such Assignor in respect of such Collateral;

(iii)
instruct all banks which have entered into a control agreement with the
Collateral Agent to transfer all moneys, securities and instruments held by such
depositary bank to the Cash Collateral Account;

(iv)
sell, assign or otherwise liquidate any or all of the Collateral or any part
thereof in accordance with Section 5.2 hereof, or direct such Assignor to sell,
assign or otherwise liquidate any or all of the Collateral or any part thereof,
and, in each case, take possession of the proceeds of any such sale or
liquidation;

(v)
take possession of the Collateral or any part thereof, by directing such
Assignor in writing to deliver the same to the Collateral Agent at any
reasonable place or places designated by the Collateral Agent, in which event
such Assignor shall at its own expense:

(x)
forthwith cause the same to be moved to the place or places so designated by the
Collateral Agent and there delivered to the Collateral Agent;

(y)
store and keep any Collateral so delivered to the Collateral Agent at such place
or places pending further action by the Collateral Agent as provided in
Section 5.2 hereof; and

(z)
while the Collateral shall be so stored and kept, provide such security and
maintenance services as shall be reasonably necessary to protect the same and to
preserve and maintain it in good condition;

(vi)
except with respect to ULC Shares prior to notice and transfer, exercising and
enforcing all rights and remedies of a holder of the Collateral as if the
Collateral Agent were the absolute owner thereof (including, if necessary,
causing the Collateral to be registered in the name of the Collateral Agent or
its nominee if not already done);

(vii)
collection of any proceeds arising in respect of the Collateral;

(viii)
collection, realization or sale of, or other dealing with, accounts;

(ix)
instruction or order to any issuer or securities intermediary pursuant to any
control agreement that the Collateral Agent has with respect to the Collateral;

(x)
exercise the rights granted under Section 1.2 hereof;

 

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(xi)
apply any moneys constituting Collateral or proceeds thereof in accordance with
the provisions of Section 5.6 hereof;

(xii)
appoint by instrument in writing a receiver (which term as used in this
Agreement includes a receiver and manager) or agent of all or any part of the
Collateral and remove or replace from time to time any receiver or agent;

(xix)
institute proceedings in any court of competent jurisdiction for the appointment
of a receiver of all or any part of the Collateral;

(xiv)
institute proceedings in any court of competent jurisdiction for sale or
foreclosure of all or any part of the Collateral;

(xv)
file proofs of claim and other documents to establish claims to the Collateral
in any proceeding relating to any Assignor; and

(xvi)
exercise any other remedy, or institute any other proceeding, in each case,
authorized or permitted under the PPSA or otherwise by law or equity;

it being understood that each Assignor’s obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. By
accepting the benefits of this Agreement and each other Security Document, the
Secured Creditors expressly acknowledge and agree that this Agreement and each
other Security Document may be enforced only by the action of the Collateral
Agent acting upon the instructions of the Required Lenders and that no other
Secured Creditor shall have any right individually to seek to enforce or to
enforce this Agreement 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 Collateral Agent for the benefit of the Secured Creditors upon the terms of
this Agreement and the other Security Documents.
Section 5.2
Remedies; Disposition of the Collateral.

If any Event of Default shall have occurred and be continuing, then any
Collateral repossessed by the Collateral Agent under or pursuant to Section 5.1
hereof and any other Collateral whether or not so repossessed by the Collateral
Agent, may be sold, assigned, leased or otherwise disposed of under one or more
contracts or as an entirety, and without the necessity of gathering at the place
of sale the property to be sold, and in general in such manner, at such time or
times, at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of such Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such sale, lease or other disposition may be effected by means
of a public disposition or private disposition, effected in accordance with the
applicable law as may apply to the respective disposition. The Collateral Agent
may, without notice or publication, adjourn any public or private disposition or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for the disposition, and such disposition may be made at any time or
place to which the disposition may be so adjourned. To the extent permitted by
any such requirement of law, the Collateral Agent may bid for and become the
purchaser (and may pay all or any portion of the purchase price by crediting
Obligations against the purchase price) of the Collateral or any item thereof,
offered for disposition in accordance with this Section 5.2 without
accountability to the relevant Assignor. If, under

 

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applicable law, the Collateral Agent shall be permitted to make disposition of
the Collateral within a period of time which does not permit the giving of
notice to the relevant Assignor as hereinabove specified, the Collateral Agent
need give such Assignor only such notice of disposition as shall be required by
such applicable law. Each Assignor agrees to do or cause to be done all such
other acts and things as may be reasonably necessary to make such disposition or
dispositions of all or any portion of the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor’s expense.
Section 5.3
ULC Shares.

(a)
Notwithstanding anything else contained in this Agreement or any other document
or agreement among all or some of the parties hereto, each Assignor is the sole
registered and beneficial owner of all its Collateral that is ULC Shares and
will remain so until such time as such ULC Shares are effectively transferred
into the name of the Collateral Agent, any of the Secured Creditors, or any
nominee of the foregoing or any other Person on the books and records of such
ULC. Accordingly, such Assignor shall be entitled to receive and retain for its
own account any dividend on or other distribution, if any, in respect of ULC
Shares that are Collateral and shall have the right to vote such ULC Shares and
to control the direction, management and policies of any ULC to the same extent
as such Assignor would if such ULC Shares were not pledged to the Collateral
Agent for the benefit of the Secured Creditors pursuant hereto. Nothing in this
Agreement or any other document or agreement among all or some of the parties
hereto is intended to, and nothing in this Agreement or any other document or
agreement among all or some of the parties hereto shall, constitute the
Collateral Agent, any of the Secured Creditors or any Person other than an
Assignor, a member of any ULC for the purposes of Companies Act (Nova Scotia),
the Business Corporations Act (British Columbia), the Business Corporations Act
(Alberta) or any other applicable legislation until such time as notice is given
to such Assignor and further steps are taken hereunder or thereunder so as to
register the Collateral Agent, any of the Secured Creditors or any nominee of
the foregoing, as specified in such notice, as the holder of shares of such ULC.
To the extent any provision hereof would have the effect of constituting the
Collateral Agent or any of the Secured Creditors a member of a ULC prior to such
time, such provision shall be severed herefrom and ineffective with respect to
Collateral that is shares of such ULC without otherwise invalidating or
rendering unenforceable this Agreement or invalidating or rendering
unenforceable such provision insofar as it relates to Collateral that is not
shares of such ULC.

(b)
Except upon the exercise of rights to sell or otherwise dispose of Collateral
that is ULC Shares once an Event of Default shall have occurred and be
continuing, no Assignor shall cause or permit, or enable any ULC in which it
holds ULC Shares that are Collateral to cause or permit, the Collateral Agent or
any other Secured Creditor to: (a) be registered as a shareholder or member of a
ULC; (b) have any notation entered in its favour in the share register of a ULC;
(c) be held out as a shareholder or member of a ULC; (d) receive, directly or
indirectly, any dividends, property or other distributions from a ULC by reason
of the Collateral Agent or any other Secured Creditor holding a security
interest in a ULC or ULC Shares; or (e) act as a shareholder or member of a ULC,
or exercise any rights of a shareholder or member including the right to attend
a meeting of, or to vote the shares of, a ULC.

 

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Section 5.4
Receiver's Powers.

(a)
Any receiver appointed by the Collateral Agent is vested with the rights and
remedies which could have been exercised by the Collateral Agent in respect of
any Assignor or the Collateral and such other powers and discretions as are
granted in the instrument of appointment and any supplemental instruments. The
identity of the receiver, its replacement and its remuneration are within the
sole and unfettered discretion of the Collateral Agent.

(b)
Any receiver appointed by the Collateral Agent will act as agent for the
Collateral Agent for the purposes of taking possession of the Collateral, but
otherwise and for all other purposes (except as provided below), as agent for
the Assignors. The receiver may sell, lease, or otherwise dispose of Collateral
as agent for the Assignors or as agent for the Collateral Agent as the
Collateral Agent may determine in its discretion. Each Assignor agrees to ratify
and confirm all actions of the receiver acting as agent for such Assignor, and
to release and indemnify the receiver in respect of all such actions.

(c)
The Collateral Agent, in appointing or refraining from appointing any receiver,
does not incur liability to the receiver, the Assignors or otherwise and is not
responsible for any misconduct or negligence of such receiver.

Section 5.5
Waiver of Claims.

Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN
CONNECTION WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL
AGENT’S DISPOSITION OF ANY OF THE COLLATERAL, IN EACH CASE AFTER THE OCCURRENCE
AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, INCLUDING, ANY AND ALL PRIOR
NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor
hereby further waives, to the extent permitted by law:
(i)
all damages occasioned by such taking of possession or any such disposition
except any damages which are the direct result of the Collateral Agent’s gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision);

(ii)
all other requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Collateral Agent’s rights
hereunder; and

(iii)
all rights of redemption, appraisement, valuation, stay, extension or moratorium
now or hereafter in force under any applicable law in order to prevent or delay
the enforcement of this Agreement or the absolute sale of the Collateral or any
portion thereof, and each Assignor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the benefit
of all such laws.

Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and

 

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against any and all Persons claiming or attempting to claim the Collateral so
sold, optioned or realized upon, or any part thereof, from, through and under
such Assignor.
Section 5.6
Application of Proceeds.

(a)
All moneys collected by the Collateral Agent (or, to the extent the Pledge
Agreement or any other Security Document requires proceeds of collateral under
such other Security Document to be applied in accordance with the provisions of
this Agreement, the Pledgee, under, and as defined in the Pledge Agreement or
collateral agent under such other Security Document) upon any sale or other
disposition of the Collateral (or the collateral under the relevant Security
Document), in connection with the Collateral Agent’s exercise of remedies
following the occurrence and during the continuance of an Event of Default,
together with all other moneys received by the Collateral Agent hereunder or
under any other Security Document, shall be applied as follows:

(i)
first, to the payment of all amounts owing the Collateral Agent of the type
described in clauses (iv), (v), (vi) and (vii) of the definition of
“Obligations”;

(ii)
second, to the extent proceeds remain after the application pursuant to
preceding clause (i), an amount equal to the outstanding Primary Obligations
which are Credit Document Obligations shall be paid to the Lender Creditors as
provided in Section 5.6(e) hereof, with each such Lender Creditor receiving an
amount equal to its outstanding Primary Obligations which are Credit Document
Obligations or, if the proceeds are insufficient to pay in full all such Primary
Obligations, its Pro Rata Share of the amount remaining to be distributed;

(iii)
third, to the extent proceeds remain after the application pursuant to preceding
clauses (i) and (ii), an amount equal to the outstanding Secondary Obligations
which are Credit Document Obligations shall be paid to the Lender Creditors as
provided in Section 5.6(e) hereof, with each such Lender Creditor receiving an
amount equal to its outstanding Secondary Obligations which are Credit Document
Obligations or, if the proceeds are insufficient to pay in full all such
Secondary Obligations, its Pro Rata Share of the amount remaining to be
distributed;

(iv)
fourth, to the extent proceeds remain after the application pursuant to
preceding clauses (i) through (iii), an amount equal to the outstanding Primary
Obligations which are Other Obligations shall be paid to the Other Creditors as
provided in Section 5.6(e) hereof, with each such Other Creditor receiving an
amount equal to its outstanding Primary Obligations which are Other Obligations
or, if the proceeds are insufficient to pay in full all such Primary
Obligations, its Pro Rata Share of the amount remaining to be distributed;

(v)
fifth, to the extent proceeds remain after the application pursuant to preceding
clauses (i) through (iv), inclusive, an amount equal to the outstanding
Secondary Obligations which are Other Obligations shall be paid to the Other
Creditors as provided in Section 5.6(e) hereof, with each such Other Creditor
receiving an amount equal to its outstanding Secondary Obligations which are
Other Obligations or, if the proceeds are insufficient to pay in full all such
Primary Obligations, its Pro Rata Share of the amount remaining to be
distributed; and

 

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(vi)
sixth, to the extent proceeds remain after the application pursuant to preceding
clauses (i) through (v), inclusive, and following the termination of this
Agreement pursuant to Section 8.8(a) hereof, to the relevant Assignor or to
whomever may be lawfully entitled to receive such surplus.

(b)
For purposes of this Agreement: (i) “Pro Rata Share” shall mean, when
calculating a Secured Creditor’s portion of any distribution or amount, that
amount (expressed as a percentage) equal to a fraction the numerator of which is
the then unpaid amount of such Secured Creditor’s Primary Obligations or
Secondary Obligations, as the case may be, and the denominator of which is the
then outstanding amount of all Primary Obligations or Secondary Obligations
owing to the applicable Secured Creditors entitled thereto, as the case may be;
(ii) “Primary Obligations” shall mean (x) in the case of the Credit Document
Obligations all principal of, premium, fees and interest on, all Loans, all
Unpaid Drawings (and all interest thereon), the Stated Amount of (and the
obligation to cash collateralize) all outstanding Letters of Credit, the Face
Amount of all Drafts, Bankers’ Acceptances or B/A Equivalent Notes and all Fees
and (y) in the case of the Other Obligations, all amounts due to an Other
Creditor under each Secured Hedging Agreement and/or Treasury Services
Agreement, as applicable (other than indemnities, fees (including, reasonable
attorneys’ fees) and similar obligations and liabilities); and (iii) “Secondary
Obligations” shall mean all Obligations other than Primary Obligations.

(c)
When payments to Secured Creditors are based upon their respective Pro Rata
Shares, the amounts received by such Secured Creditors hereunder shall be
applied (for purposes of making determinations under this Section 5.6 only) (i)
first, to their Primary Obligations and (ii) second, to their Secondary
Obligations. If any payment to any Secured Creditor of its Pro Rata Share of any
distribution would result in overpayment to such Secured Creditor, such excess
amount shall instead be distributed in respect of the unpaid Primary Obligations
or Secondary Obligations, as the case may be, of the other Secured Creditors
entitled to such distribution, with each such Secured Creditor whose Primary
Obligations or Secondary Obligations, as the case may be, have not been paid in
full to receive an amount equal to such excess amount multiplied by a fraction
the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Creditor and the denominator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of all Secured Creditors entitled to such distribution.

(d)
Each of the Secured Creditors, by their acceptance of the benefits hereof and of
the other Security Documents, agrees and acknowledges that if the Lender
Creditors receive (or are to receive) a distribution on account of undrawn
amounts with respect to Letters of Credit issued under the Credit Agreement
(which shall only occur after all outstanding Revolving Loans under the Credit
Agreement and Unpaid Drawings have been paid in full), such amounts shall be
paid to the Administrative Agent under the Credit Agreement and held by it, for
the equal and ratable benefit of the Lender Creditors, as cash security for the
repayment of Obligations owing to the Lender Creditors as such. If any amounts
are held as cash security pursuant to the immediately preceding sentence, then
upon the termination of all outstanding Letters of Credit under the Credit
Agreement, and after the application of all such cash security to the repayment
of all Obligations owing to the Lender Creditors after giving effect to the
termination of all such Letters of Credit,

 

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if there remains any excess cash, such excess cash shall be returned by the
Administrative Agent to the Collateral Agent for distribution in accordance with
Section 5.6(a) hereof.
(e)
All payments required to be made hereunder shall be made (x) if to the Lender
Creditors, to the Administrative Agent for the account of the Lender Creditors,
and (y) if to the Secured Hedging Creditors or the Treasury Services Creditors,
to the trustee, paying agent or other similar representative (each, a
“Representative”) for the Secured Hedging Creditors or the Treasury Services
Creditors, as applicable, or, in the absence of such a Representative, directly
to the Secured Hedging Creditors or the Treasury Services Creditors, as
applicable.

(f)
For purposes of applying payments received in accordance with this Section 5.6,
the Collateral Agent shall be entitled to rely upon the Administrative Agent and
(ii) the Representative or, in the absence of such a Representative, upon the
Secured Hedging Creditors and the Treasury Services Creditors, as applicable,
for a determination (which the Administrative Agent, each Representative, the
Secured Hedging Creditors and the Treasury Services Creditors agree (or shall
agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Lender Creditors, the
Secured Hedging Creditors or the Treasury Services Creditors, as the case may
be. Unless it has received written notice from a Lender Creditor, a Secured
Hedging Creditor or a Treasury Services Creditor to the contrary, the
Administrative Agent and each Representative, in furnishing information pursuant
to the preceding sentence, and the Collateral Agent, in acting hereunder, shall
be entitled to assume that no Secondary Obligations are outstanding. Unless it
has written notice from a Secured Hedging Creditor to the contrary, the
Collateral Agent, in acting hereunder, shall be entitled to assume that no
Secured Hedging Agreements are in existence.

(g)
It is understood that the Assignors shall remain jointly and severally liable to
the extent of any deficiency between the amount of the proceeds of the
Collateral and the aggregate amount of the Obligations.

(h)
It is understood and agreed by each Assignor and each Secured Creditor that the
Collateral Agent shall have no liability for any determinations made by it in
this Section 5.6, in each case except to the extent resulting from the gross
negligence or willful misconduct of the Collateral Agent (as determined by a
court of competent jurisdiction in a final and non-appealable decision). Each
Assignor and each Secured Creditor also agrees that the Collateral Agent may
(but shall not be required to), at any time and in its sole discretion, and with
no liability resulting therefrom, petition a court of competent jurisdiction
regarding any application of Collateral in accordance with the requirements
hereof, and the Collateral Agent shall be entitled to wait for, and may
conclusively rely on, any such determination.

Section 5.7
Remedies Cumulative.

Each and every right, power and remedy hereby specifically given to the
Collateral Agent shall be in addition to every other right, power and remedy
specifically given to the Collateral Agent under this Agreement, the other
Secured Debt Agreements or now or hereafter existing at law, in equity or by
statute and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time or simultaneously
and as often and in such order as may be

 

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deemed expedient by the Collateral Agent. All such rights, powers and remedies
shall be cumulative and the exercise or the beginning of the exercise of one
shall not be deemed a waiver of the right to exercise any other or others. No
delay or omission of the Collateral Agent in the exercise of any such right,
power or remedy and no renewal or extension of any of the Obligations shall
impair any such right, power or remedy or shall be construed to be a waiver of
any Default or Event of Default or an acquiescence thereof. No notice to or
demand on any Assignor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of any
of the rights of the Collateral Agent to any other or further action in any
circumstances without notice or demand. In the event that the Collateral Agent
shall bring any suit to enforce any of its rights hereunder and shall be
entitled to judgment, then in such suit the Collateral Agent may recover
reasonable expenses, including reasonable attorneys’ fees, and the amounts
thereof shall be included in such judgment.
Section 5.8
Discontinuance of Proceedings.

In case the Collateral Agent shall have instituted any proceeding to enforce any
right, power or remedy under this Agreement by foreclosure, sale, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Collateral Agent, then and
in every such case the relevant Assignor, the Collateral Agent and each holder
of any of the Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral subject to the security interest
created under this Agreement, and all rights, remedies and powers of the
Collateral Agent shall continue as if no such proceeding had been instituted.
Article 6
INDEMNITY
Section 6.1
Indemnity.

(a)
Each Assignor jointly and severally agrees to indemnify, reimburse and hold the
Collateral Agent, each other Lender and their respective successors, assigns,
employees, affiliates and agents (hereinafter in this Section 6.1 referred to
individually as “Indemnitee,” and collectively as “Indemnitees”) harmless, in
accordance with Section 13.01(c) of the Credit Agreement, any and all
liabilities, obligations, losses, damages, penalties, claims, actions (including
removal or remedial actions), judgments, suits, costs, expenses and
disbursements (including reasonable and documented out-of-pocket attorneys’ and
consultants’ fees and disbursements (but limited, in the case of attorneys’ fees
and disbursements, to one counsel to the Administrative Agent, one additional
counsel for all Issuing Lenders and Lenders, taken as a whole, one local counsel
for the Administrative Agent and the Lenders, taken as a whole, in each relevant
jurisdiction, and, solely in the case of an actual or perceived conflict of
interests, one additional counsel in each relevant jurisdiction to each group of
affected Lenders similarly situated, taken as a whole)) incurred by, imposed on
or assessed against any of them as a result of, or arising out of, or in any way
related to, or by reason of, (i) any investigation, litigation or other
proceeding (whether or not the Lead Arrangers, the Administrative Agent, the
Collateral Agent, the Syndication Agent, any Co-Documentation Agent, any Issuing
Lender or any Lender is a party thereto and whether or not such investigation,
litigation or other proceeding is brought by or on behalf of any Credit Party)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any Letter of Credit or the proceeds of any Loans
hereunder or the consummation of the Transaction or any other transactions
contemplated herein or in any other Credit Document or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents or
(ii) (x) the handling of the Credit Account

 

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and Collateral of the Borrowers as provided in this Agreement or (y) the Agents’
and the Lenders relying on any instructions of the Company, or (z) any other
action taken by the Agents or the Lenders hereunder or under the other Credit
Documents; provided that no Indemnitee shall be indemnified pursuant to this
Section 6.1(a) for losses, damages or liabilities to the extent caused by the
gross negligence or willful misconduct of such Indemnitee (as determined by a
court of competent jurisdiction in a final and non-appealable decision). Each
Assignor agrees that upon written notice by any Indemnitee of the assertion of
such a liability, obligation, damage, injury, penalty, claim, demand, action,
suit or judgment, the relevant Assignor shall assume full responsibility for the
defense thereof. Each Indemnitee agrees to use its best efforts to promptly
notify the relevant Assignor of any such assertion of which such Indemnitee has
knowledge.
(b)
Without limiting the application of Section 6.1(a) hereof, each Assignor agrees
jointly and severally, to pay or reimburse the Collateral Agent for any and all
reasonable and documented out-of-pocket fees, costs and expenses of whatever
kind or nature incurred in connection with the creation, preservation or
protection of the Collateral Agent’s Liens on, and security interest in, the
Collateral, including, all fees and taxes in connection with the recording or
filing of instruments and documents in public offices, payment or discharge of
any taxes or Liens upon or in respect of the Collateral, premiums for insurance
with respect to the Collateral and all other fees, costs and expenses in
connection with protecting, maintaining or preserving the Collateral and the
Collateral Agent’s interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral.

(c)
If and to the extent that the obligations of any Assignor under this Section 6.1
are unenforceable for any reason, such Assignor hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law.

Section 6.2
Indemnity Obligations Secured by Collateral; Survival.

Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement hereunder or under the other Credit Documents shall constitute
Obligations secured by the Collateral. The indemnity obligations of each
Assignor contained in this Article 6 shall continue in full force and effect
notwithstanding the full payment of all of the other Obligations and
notwithstanding the full payment of all the Notes issued, and Loans made, under
the Credit Agreement, the termination of all Letters of Credit issued under the
Credit Agreement, the termination of all Secured Hedging Agreements entered into
with the Secured Hedging Creditors, the termination of all Treasury Services
Agreements entered into with the Treasury Services Creditors and the payment of
all other Obligations and notwithstanding the discharge thereof and the
occurrence of the Termination Date.
Article 7
INTERPRETATION
Section 7.1
Definitions.

The following terms shall have the meanings herein specified. Such definitions
shall be equally applicable to the singular and plural forms of the terms
defined.

 

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“Account” shall mean any “account” as such term is defined in the PPSA Ontario,
and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a Province, governmental unit of a Province, or person
licensed or authorized to operate the game by a Province or governmental unit of
a Province.
“Administrative Agent” shall have the meaning provided in the recitals of this
Agreement.
“Agreement” shall mean this Amended and Restated Canadian Security Agreement, as
the same may be further amended, modified, restated and/or supplemented from
time to time in accordance with its terms.
“Assignor” shall have the meaning provided in the first paragraph of this
Agreement.
“Borrower” shall have the meaning provided in the recitals of this Agreement.
“Canadian Borrower” shall have the meaning provided in the recitals of this
Agreement.
“Cash Collateral Account” shall mean a non-interest bearing cash collateral
account maintained with, and in the sole dominion and control of, the Collateral
Agent for the benefit of the Secured Creditors.
“Chattel Paper” shall mean “chattel paper” as such term is defined in the PPSA
Ontario.
“Collateral” shall have the meaning provided in Section 1.1(a) of this
Agreement.
“Collateral Accounts” shall mean any and all accounts established and maintained
by the Collateral Agent in the name of any Assignor to which Collateral may be
credited.
“Collateral Agent” shall have the meaning provided in the first paragraph of
this Agreement.
“Company” shall have the meaning provided in the recitals of this Agreement.
“Contract Rights” shall mean all rights of any Assignor under each Contract,
including, (i) any and all rights to receive and demand payments under any or
all Contracts, (ii) any and all rights to receive and compel performance under
any or all Contracts and (iii) any and all other rights, interests and claims
now existing or in the future arising in connection with any or all Contracts.
“Contracts” shall mean all contracts between any Assignor and one or more
additional parties (including, any Interest Rate Protection Agreements, Other
Hedging Agreements, licensing agreements and any partnership agreements, joint
venture agreements and limited liability company agreements).
“Copyrights” shall mean any Canadian or foreign copyright now or hereafter owned
by any Assignor, including any registrations of any copyrights in the Canadian
Intellectual Property

 

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Office or any foreign equivalent office, as well as any application for a
copyright registration now or hereafter made with the Canadian Intellectual
Property Office or any foreign equivalent office by any Assignor.
“Credit Agreement” shall have the meaning provided in the recitals of this
Agreement.
“Credit Document Obligations” shall have the meaning provided in the definition
of “Obligations” in this Article 7.
“Credit Documents” shall have the meaning provided in the Credit Agreement.
“DBNY” shall have the meaning provided in the first paragraph of this Agreement.
“Document of Title” shall mean “document of title” as such term is defined in
the PPSA Ontario.
“Domain Names” shall mean all Internet domain names and associated URL addresses
in or to which any Assignor now or hereafter has any right, title or interest.
“Equipment” shall mean any “equipment” as such term is defined in the PPSA
Ontario, and in any event, shall include, but shall not be limited to, all
machinery, equipment, furnishings, spare parts, fixtures and vehicles now or
hereafter owned by any Assignor and any and all additions, substitutions and
replacements of any of the foregoing and all accessions thereto, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
“Event of Default” shall mean any Event of Default under, and as defined in, the
Credit Agreement.
“Excluded Assets” shall have the meaning provided in Section 1.1(b) of this
Agreement.
“Financial Assets” shall mean all present and future “financial assets” as
defined in the STA Ontario.
“Goods” shall mean “goods” as such term is defined in the PPSA Ontario.
“Indemnitee” shall have the meaning provided in Section 6.1(a) of this
Agreement.
“Instrument” shall mean (i) a bill, note, or cheque within the meaning of the
Bills of Exchange Act (Canada) or any other writing that evidences a right to
the payment of money and is of a type that in the ordinary course of business is
transferred by delivery with any necessary endorsement or assignment, and
including, for greater certainty, the Notes, or (ii) a letter of credit and an
advice of credit if the letter or advice states that it must be surrendered upon
claiming payment thereunder, or (iii) chattel paper or any other writing that
evidences both a monetary obligation and a security interest in or a lease of
specific goods, or (iv) documents of title or any other writing that purports to
be issued by or addressed to a bailee and purports to cover such goods in the
bailee’s possession as are identified or fungible portions of an identified
mass, and that in the ordinary course of business is treated as establishing
that the Person in possession of it is entitled to receive, hold and dispose of
the document and the goods it covers,

 

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or (v) any document or writing commonly known as an instrument, but excludes
Investment Property.
“Intangibles” shall mean “intangibles” as such term is defined in the PPSA
Ontario.
“Intellectual Property” means domestic and foreign: (i) Patents; (ii)
proprietary and non-public business information, including inventions (whether
patentable or not), invention disclosures, improvements, discoveries, Trade
Secrets, Trade Secret Rights, and documentation relating to any of the
foregoing; (iii) Copyrights; (iv) mask works, mask work registrations and
applications for mask work registrations; (v) designs, design registrations,
design registration applications and integrated circuit topographies; (vi)
Marks, Domain Names, website names and world wide web addresses, common law
trade-marks, and the goodwill associated with any of the foregoing; (vii)
computer software and programs (both source code and object code form), all
proprietary rights in the computer software and programs and all documentation
and other materials related to the computer software and programs; and (viii)
any other intellectual property and industrial property.
“Inventory” shall mean merchandise, inventory and goods, and all additions,
substitutions and replacements thereof and all accessions thereto, wherever
located, together with all goods, supplies, incidentals, packaging materials,
labels, materials and any other items used or usable in manufacturing,
processing, packaging or shipping same, in all stages of production from raw
materials through work in process to finished goods, and all products and
proceeds of whatever sort and wherever located any portion thereof which may be
returned, rejected, reclaimed or repossessed by the Collateral Agent from any
Assignor’s customers, and shall specifically include all “inventory” as such
term is defined in the PPSA Ontario.
“Investment Property” shall mean “investment property” as such term is defined
in the PPSA Ontario.
“Lender Counterparty” shall mean any counterparty to an Interest Rate Protection
Agreement and/or Other Hedging Agreement that is (a) the Administrative Agent, a
Lender or an affiliate of the Administrative Agent or a Lender or (b) the
Administrative Agent, a Lender or an affiliate of the Administrative Agent or a
Lender at the time such Person enters into such Interest Rate Protection
Agreement and/or Other Hedging Agreement (even if the Administrative Agent or
such Lender subsequently ceases to be the Administrative Agent or a Lender, as
the case may be, under this Agreement for any reason, together with the
Administrative Agent’s, such Lender’s or such affiliate’s successor and
assigns), so long as the Administrative Agent, such Lender, such affiliate or
such successor or assign participates in such Interest Rate Protection Agreement
and/or Other Hedging Agreement.
“Lender Creditors” shall have the meaning provided in the recitals of this
Agreement.
“Lenders” shall have the meaning provided in the recitals of this Agreement.
“Marks” shall mean all right, title and interest in and to any trademarks,
service marks and trade names now held or hereafter acquired by any Assignor,
including any registration or application for registration of any trademarks and
service marks now held or hereafter acquired by any Assignor, which are
registered or filed in the Canadian Intellectual Property Office or any
equivalent foreign office or agency, as well as any unregistered trademarks and
service marks

 

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used by an Assignor and any trade dress including logos, designs, fictitious
business names and other business identifiers used by any Assignor.
“Notes” shall mean (x) all intercompany notes at any time issued to each
Assignor and (y) all other promissory notes from time to time issued to, or held
by, each Assignor (other than promissory notes issued in connection with
extensions of trade credit by any Assignor in the ordinary course of business).
“Obligations” shall mean and include, as to any Assignor, all of the following:
(i)
the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, principal, premium, interest, reimbursement obligations under
Letters of Credit, fees, costs and indemnities (including, all interest, fees
and expenses that accrue after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency, reorganization or similar
proceeding of any Assignor at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest, fees or
expenses is allowed in any such proceeding)) of such Assignor to the Lender
Creditors, whether now existing or hereafter incurred under, arising out of, or
in connection with, each Credit Document to which such Assignor is a party
(including, in the event such Assignor is a Guarantor, all such obligations,
liabilities and indebtedness of such Assignor under its Guaranty) and the due
performance and compliance by such Assignor with all of the terms, conditions
and agreements contained in each such Credit Document (all such obligations,
liabilities and indebtedness under this clause (i), except to the extent
consisting of obligations or indebtedness with respect to Secured Hedging
Agreements or Treasury Services Agreements, being herein collectively called the
“Credit Document Obligations”);

(ii)
the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including all interest, fees and expenses that accrue after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Assignor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest,
fees or expenses is allowed in any such proceeding) owing by such Assignor to
the Secured Hedging Creditors, now existing or hereafter incurred under, arising
out of or in connection with any Secured Hedging Agreement, whether such Secured
Hedging Agreement is now in existence or hereinafter arising (including, in the
case of an Assignor that is a Guarantor, all obligations, liabilities and
indebtedness of such Assignor under its Guaranty in respect of the Secured
Hedging Agreements), and the due performance and compliance by such Assignor
with all of the terms, conditions and agreements contained in each such Secured
Hedging Agreement (all such obligations, liabilities and indebtedness under this
clause (ii) being herein collectively called the “Secured Hedging Obligations”;
provided, however, in no event will Secured Hedging Obligations include any
Excluded Swap Obligations);

 

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(iii)
the full and prompt payment when due (whether at the stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise) of all
obligations, liabilities and indebtedness (including, all interest, fees and
expenses that accrue after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency, reorganization or similar
proceeding at the rate provided for in the respective documentation, whether or
not such interest, fees or expenses is allowed in any such proceeding) owing by
such Assignor to each Treasury Services Creditor with respect to Treasury
Services, whether now in existence or hereafter arising in each case under any
Treasury Services Agreement (including, in the case of an Assignor that is a
Guarantor, all obligations, liabilities and indebtedness of such Assignor under
its Guaranty in respect of the Treasury Services Agreements) (all such
obligations, liabilities and indebtedness described in this clause (iii) being
herein collectively called the “Treasury Services Obligations” and, together
with the Secured Hedging Obligations, the “Other Obligations”);

(iv)
any and all sums advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the Collateral;

(v)
in the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of such Assignor referred to in
clauses (i), (ii) and (iii) above, after an Event of Default shall have occurred
and be continuing, the reasonable expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the Collateral,
or of any exercise by the Collateral Agent of its rights hereunder, together
with reasonable attorneys’ fees and court costs;

(vi)
all amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 6.1 of this Agreement; and

(vii)
all amounts owing to any Agent pursuant to any of the Credit Documents in its
capacity as such;

it being acknowledged and agreed that the “Obligations” shall include extensions
of credit of the types described above, whether now existing or hereinafter
incurred or extended from time to time after the date of this Agreement.
“Omnibus Amendment” shall have the meaning provided in the recitals of this
Agreement;
“Original Canadian Security Agreement” shall have the meaning provided in the
recitals of this Agreement;
“Other Creditors” shall mean the Secured Hedging Creditors and the Treasury
Services Creditors.
“Other Obligations” shall have the meaning provided in the definition of
“Obligations”.
“Patents” shall mean any patent in or to which any Assignor now or hereafter has
any right, title or interest therein, and any divisions, continuations
(including, but not limited to,

 

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continuations-in-parts) and improvements thereof, as well as any application for
a patent now or hereafter made by any Assignor.
“Permits” shall mean, to the extent permitted to be assigned by the terms
thereof or by applicable law, all licenses, permits, consents, approvals,
rights, orders, variances, franchises or authorizations of or from any
Governmental Authority or agency.
“PPSA” shall mean the Personal Property Security Act (Ontario) and other
personal property security legislation of the applicable Canadian province or
provinces in respect of the Canadian Credit Parties or the Collateral (including
the Civil Code of Quebec and the regulation respecting the registration of
personal and movable real rights promulgated thereunder) as all such legislation
now exists or may from time to time hereafter be amended, modified, recodified,
supplemented or replaced, together with all rules, regulations and
interpretations thereunder or related thereto.
“PPSA Ontario” shall mean the Personal Property Security Act (Ontario) and the
regulations promulgated thereunder, as such legislation now exists.
“Primary Obligations” shall have the meaning provided in Section 5.6(b) of this
Agreement.
“Proceeds” shall mean all “proceeds” as such term is defined in the PPSA Ontario
on the date hereof and, in any event, shall also include, but not be limited to,
(i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Assignor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever)
made or due and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any person acting under
color of Governmental Authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
“Pro Rata Share” shall have the meaning provided in Section 5.6(b) of this
Agreement.
“Registered Organization” means an organization organized solely under the law
of a single province, territory or Canada and as to which the province,
territory or Canada must maintain a public record showing the organization to
have been organized.
“Representative” shall have the meaning provided in Section 5.6(e) of this
Agreement.
“Restricted Right” shall have the meaning provided in Section 1.1(b) of this
Agreement.
“Secondary Obligations” shall have the meaning provided in Section 5.6(b) of
this Agreement.
“Secured Creditors” shall have the meaning provided in the recitals of this
Agreement.
“Secured Debt Agreements” shall mean and include this (i) Agreement, (ii) the
other Credit Documents, (iii) the Secured Hedging Agreements entered into with a
Secured Hedging Creditor and (iv) the Treasury Services Agreements entered into
with a Treasury Services Creditor.
“Secured Hedging Agreement” shall mean each Interest Rate Protection Agreement
and/or Other Hedging Agreements entered into with a Lender Counterparty,
provided that (i) such

 

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Interest Rate Protection Agreement and/or Other Hedging Agreement expressly
states that it constitutes a “Secured Hedging Agreement” for purposes of the
Credit Agreement and the other Credit Documents and (ii) the Company and the
other parties thereto shall have delivered to the Collateral Agent a written
notice specifying that such Interest Rate Protection Agreement and/or Other
Hedging Agreement constitutes a “Secured Hedging Agreement” for purposes of the
Credit Agreement and the other Credit Documents.
“Secured Hedging Creditors” shall have the meaning provided in the recitals of
this Agreement.
“Secured Hedging Obligations” shall have the meaning provided in the definition
of “Obligations” in this Article 7.
“Security Interest” means the security interest, assignment, mortgage, charge,
hypothecation and pledge granted by this Agreement.
“Securities” means “securities” as defined in the STA Ontario, but excludes any
ULC Shares.
“Securities Accounts” means all present and future “securities accounts” as
defined in the STA Ontario.
“STA Ontario” shall mean the Securities Transfer Act, 2006 (Ontario) and the
regulations promulgated thereunder, as such legislation now exists.
“Supporting Obligations” shall mean any letter-of-credit right or secondary
obligation that supports the payment or performance of, and all security for,
any Collateral consisting of Accounts, Chattel Paper, Document of Title,
Intangibles, Instruments or Investment Property.
“Termination Date” shall have the meaning provided in Section 8.8(a) of this
Agreement.
“Trade Secrets” shall mean any confidential and proprietary information,
including inventions, formulae, algorithms, production procedures, know-how,
methods, techniques, marketing, plans, analyses, proposals, customer lists,
supplier lists, specifications, models, personal information, data collections,
source code and object code of an Assignor worldwide whether written or not.
“Trade Secret Rights” shall mean the rights of an Assignor in any Trade Secret
it holds.
“Treasury Services” shall have the meaning provided in the recitals of this
Agreement.
“Treasury Services Agreement” shall have the meaning provided in the recitals of
this Agreement.
“Treasury Services Creditors” shall have the meaning provided in the recitals of
this Agreement.
“Treasury Services Obligations” shall have the meaning provided in the
definition of “Obligations” in this Article 7.

 

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“ULC” means an unlimited company, an unlimited liability company or an unlimited
liability corporation incorporated pursuant to, or otherwise governed by, the
laws of any of the provinces of Canada.
“ULC Shares” means shares in any ULC at any time owned or otherwise held by any
Assignor.
“U.S. Borrower” shall have the meaning provided in the recitals of this
Agreement.
Section 7.2
Interpretation.

(a)
Terms defined in the PPSA Ontario or the STA Ontario and used but not otherwise
defined in this Agreement have the same meaning. For greater certainty the
terms, “money” and “personal property” have the meanings given to them in the
PPSA Ontario and the terms “certificated security”, “control”, “deliver”,
“entitlement holder”, “securities intermediary”, “security entitlement” and
“uncertificated security” have the meanings given to them in the STA Ontario.

(b)
In this Agreement the words “including”, “includes” and “include” mean
“including (or includes or include) without limitation”. The expressions
“Article”, “Section” and other subdivision followed by a number mean and refer
to the specified Article, Section or other subdivision of this Agreement.

(c)
Any reference in this Agreement to gender includes all genders. Words importing
the singular number only include the plural and vice versa.

(d)
Any reference in any Credit Document to Liens permitted by the Credit Agreement
and any right of the Assignor to create or suffer to exist Liens permitted by
the Credit Agreement are not intended to and do not and will not subordinate the
Security Interest to any such Lien or give priority to any Person over the
Secured Creditors.

(e)
The division of this Agreement into Articles, Sections and other subdivisions
and the insertion of headings are for convenient reference only and do not
affect its interpretation.

(f)
The schedules attached to this Agreement form an integral part of it for all
purposes of it.

(g)
Except as otherwise provided in this Agreement, any reference to this Agreement,
any Credit Document or any Security Document refers to this Agreement or such
Credit Document or Security Document as the same may have been or may from time
to time be amended, modified, extended, renewed, restated, replaced or
supplemented and includes all schedules attached to it. Except as otherwise
provided in this Agreement, any reference in this Agreement to a statute refers
to such statute and all rules and regulations made under it as the same may have
been or may from time to time be amended or re-enacted.

Article 8
MISCELLANEOUS
Section 8.1
Notices.

 

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Except as otherwise specified herein, all notices, requests, demands or other
communications to or upon the respective parties hereto shall be in writing and
shall be sent or delivered by mail, telecopy, or courier service and all such
notices and communications shall, when mailed, telecopied, or sent by courier,
be effective when deposited in the mails, delivered to the overnight courier or
sent by telecopier, except that notices and communications to the Collateral
Agent or any Assignor shall not be effective until received by the Collateral
Agent or such Assignor, as the case may be. All notices and other communications
shall be in writing and addressed as follows:
(a)
if to any Assignor, c/o:

Ciena Canada, Inc.
c/o Ciena Corporation
7035 Ridge Road
Hanover, Maryland 21076

Attention: Treasurer’s Office
Fax: (410) 865-8901
with a copy to:
Ciena Canada, Inc.
c/o Ciena Corporation
7035 Ridge Road
Hanover, Maryland 21076
Attention: General Counsel’s Office
Facsimile: (410) 865-8001

(b)
if to the Collateral Agent, at:

Deutsche Bank AG New York Branch
60 Wall Street
New York, New York 10005
Attention: Mark Kellam II
Facsimile: 904-746-4860
(c)
if to any Lender Creditor (other than the Collateral Agent), at such address as
such Lender Creditor shall have specified in the Credit Agreement;

(d)
if to any Secured Hedging Creditor, at such address as such Secured Hedging
Creditor shall have specified in writing to the Company and the Collateral
Agent;

(e)
if to any Treasury Services Creditor, at such address as such Treasury Services
Creditor shall have specified in writing to the Company and the Collateral
Agent;

or at such other address or addressed to such other individual as shall have
been furnished in writing by any Person described above to the party required to
give notice hereunder.
Section 8.2
Waiver; Amendment.

 

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Except as provided in Section 8.8, Section 8.12 and Section 8.13 hereof and
Section 13.12 of the Credit Agreement, none of the terms and conditions of this
Agreement (or any other Security Document) may be changed, waived, modified or
varied in any manner whatsoever unless in writing duly signed by each Assignor
directly affected thereby (it being understood that the addition or release of
any Assignor hereunder or under another Security Document shall not constitute a
change, waiver, discharge or termination affecting any Assignor other than the
Assignor so added or released) and the Collateral Agent (with the written
consent of the Required Lenders).
Section 8.3
Obligations Absolute.

The obligations of each Assignor hereunder shall remain in full force and effect
without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or the like
of such Assignor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Agreement or any other
Secured Debt Agreement; or (c) any amendment to or modification of any other
Secured Debt Agreement or any security for any of the Obligations (in each
case), whether or not such Assignor shall have notice or knowledge of any of the
foregoing.
Section 8.4
Successors and Assigns.

This Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect, subject to release and/or termination
as set forth in Section 8.8 hereof, (ii) be binding upon each Assignor, its
successors and assigns; provided, however, that except as otherwise permitted by
the Credit Agreement, no Assignor shall assign any of its rights or obligations
hereunder without the prior written consent of the Collateral Agent (with the
consent of the Required Lenders), and (iii) inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Collateral
Agent, the other Secured Creditors and their respective successors, transferees
and assigns. All agreements, statements, representations and warranties made by
each Assignor herein or in any certificate or other instrument delivered by such
Assignor or on its behalf under this Agreement shall be considered to have been
relied upon by the Secured Creditors and shall survive the execution and
delivery of this Agreement and the other Secured Debt Agreements regardless of
any investigation made by the Secured Creditors or on their behalf.
Section 8.5
Headings Descriptive.

The headings of the several sections of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
Section 8.6
GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.

(a)
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE PROVINCE OF
ONTARIO (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT SHALL BE
BROUGHT IN THE COURTS OF THE PROVINCE OF ONTARIO WHICH ARE LOCATED IN TORONTO,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH ASSIGNOR HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH
ASSIGNOR HEREBY

 

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FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
JURISDICTION OVER SUCH ASSIGNOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL
JURISDICTION OVER SUCH ASSIGNOR. EACH ASSIGNOR FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO ANY SUCH ASSIGNOR AT ITS ADDRESS FOR NOTICES AS
PROVIDED IN Section 8.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.
NOTHING HEREIN, HOWEVER, SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER
THIS AGREEMENT OR ANY SECURED CREDITOR TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY ASSIGNOR IN ANY OTHER JURISDICTION.
(b)
EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE THAT ARE
LOCATED IN TORONTO, ONTARIO AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT
TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

Section 8.7
Assignors’ Duties.

It is expressly agreed, anything herein contained to the contrary
notwithstanding, that each Assignor shall remain liable to perform all of the
obligations, if any, assumed by it with respect to the Collateral and the
Collateral Agent shall not have any obligations or liabilities with respect to
any Collateral by reason of or arising out of this Agreement, nor shall the
Collateral Agent be required or obligated in any manner to perform or fulfill
any of the obligations of any Assignor under or with respect to any Collateral.
Section 8.8
Termination; Release.

 

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(a)
On the Termination Date, this Agreement shall terminate (provided that all
indemnities set forth herein including, in Section 6.1 hereof, shall survive
such termination) and the Collateral Agent at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including PPSA discharge statements on form 3C)
acknowledging the satisfaction and termination of this Agreement, and will duly
assign, transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
“Termination Date” shall mean the date upon which the Total Revolving Loan
Commitment under the Credit Agreement has been terminated, no Note is
outstanding (and all Loans and Unpaid Drawings have been paid in full), all
Letters of Credit have been terminated (or have been cash collateralized or
backstopped by another letter of credit, in either case on terms and pursuant to
arrangements reasonably satisfactory to the Administrative Agent and the
respective Issuing Lenders (which arrangements, in any event, shall require such
cash collateral or backstop letter of credit to be in a stated amount equal to
at least 105% of the aggregate Stated Amount of all Letters of Credit
outstanding at such time)), all Obligations under Secured Hedging Agreements and
Treasury Services Agreements and all other Obligations (other than indemnities
under the Credit Documents which are not then due and payable) then due and
payable have been paid in full (or arrangements with respect to the Secured
Hedging Agreements and/or Treasury Services Agreements that are satisfactory to
the applicable Secured Hedging Creditor or Treasury Services Creditor have been
made or the express provisions of such Secured Hedging Agreement or Treasury
Services Agreement shall not require the related Obligations to be repaid or
cash collateralized at such time) and all Secured Hedging Agreements and
Treasury Services Agreements have been terminated (or arrangements with respect
to the Secured Hedging Agreements and Treasury Services Agreements that are
satisfactory to the applicable Secured Hedging Creditors or Treasury Services
Creditors, as the case may be, have been made or the express provisions of such
Secured Hedging Agreement or Treasury Services Agreement shall not require the
related Obligations to be repaid or cash collateralized at such time).

(b)
In the event that any part of the Collateral is sold or otherwise disposed of
(to a Person other than a Credit Party) in connection with a sale or disposition
permitted by Section 10.02 of the Credit Agreement or is otherwise released at
the direction of the Required Lenders (or all the Lenders if required by Section
13.12 of the Credit Agreement), and the proceeds of such sale or disposition (or
from such release) are applied in accordance with the terms of the Credit
Agreement to the extent required to be so applied, the Collateral Agent, at the
request and expense of such Assignor, will duly release from the security
interest created hereby (and will promptly execute and deliver such
documentation, including termination or partial release statements,
subordination agreements and the like in connection therewith to evidence the
release of such item of Collateral or to subordinate its interest in such item
of Collateral) and assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
is then being (or has been) so sold or otherwise disposed of, or released, and
as may be in the possession of the Collateral Agent and has not theretofore been
released pursuant to this Agreement. In the case of any sale or disposition of
any Collateral permitted under Section 10.02 of the Credit Agreement (unless
sold to another Credit Party), the security interest created hereby on such

 

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Collateral shall be automatically released without the need for further action
by any Person. Furthermore, upon the release of any Canadian Guarantor from the
Canadian Guaranty in accordance with the provisions thereof, such Assignor (and
the Collateral at such time assigned by the respective Assignor pursuant hereto)
shall be automatically released from this Agreement, and the Collateral Agent,
at the request and expense of such Assignor being released, will promptly
execute and deliver such documentation, including termination or partial release
statements, including financing change statements, and the like in connection
therewith) and assign, transfer and deliver to such Assignor (without recourse
and without any representation or warranty) the Collateral of such Assignor
being released.
(c)
At any time that an Assignor desires that the Collateral Agent take any action
to acknowledge or give effect to any release of Collateral pursuant to the
foregoing Section 8.8(a) or Section 8.8(b), such Assignor shall deliver to the
Collateral Agent a certificate signed by an Authorized Officer of such Assignor
stating that the release of the respective Collateral is permitted pursuant to
such Section 8.8(a) or Section 8.8(b). At any time that the Company or the
respective Assignor desires that a Subsidiary of the Company which has been
released from the Canadian Guaranty in accordance with the provisions thereof be
released hereunder as provided in the penultimate sentence of Section 8.8(b)
hereof, it shall deliver to the Collateral Agent a certificate signed by an
Authorized Officer of the Company and the respective Assignor stating that the
release of the respective Assignor (and its Collateral) is permitted pursuant to
such Section 8.8(b).

(d)
The Collateral Agent shall have no liability whatsoever to any other Secured
Creditor as the result of any release of Collateral by it in accordance with, or
which the Collateral Agent in good faith believes to be in accordance with, this
Section 8.8.

Section 8.9
Counterparts.

This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with US Company and the Collateral Agent.
Section 8.10
Severability.

Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 8.11
The Collateral Agent and the other Secured Creditors.

The Collateral Agent will hold in accordance with this Agreement all items of
the Collateral at any time received under this Agreement. It is expressly
understood and agreed that the obligations of the Collateral Agent as holder of
the Collateral and interests therein and with respect to the disposition
thereof, and otherwise under this Agreement, are only those expressly set forth
in this Agreement and in Section 12 of the Credit Agreement. The Collateral
Agent shall act hereunder on the terms and conditions set forth herein and in
Section 12 of the Credit Agreement.
Section 8.12
Additional Assignors.

 

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It is understood and agreed that any Canadian Subsidiary of the Company that
desires to become an Assignor hereunder, or is required to execute a counterpart
of this Agreement after the date hereof pursuant to the requirements of the
Credit Agreement or any other Credit Document, shall become an Assignor
hereunder by (x) executing a counterpart hereof and delivering same to the
Collateral Agent or by executing a Joinder Agreement and delivering the same to
the Collateral Agent, in each case as may be requested by the Collateral Agent
(provided such Joinder Agreement shall not require the consent of any Assignor),
(y) delivering supplements to Annexes A through H, inclusive, hereto as are
necessary to cause such Annexes to be complete and accurate with respect to such
additional Assignor on such date and (z) taking all actions as specified in this
Agreement as would have been taken by such Assignor had it been an original
party to this Agreement, in each case with all documents required above to be
delivered to the Collateral Agent and with all documents and actions required
above to be taken to the reasonable satisfaction of the Collateral Agent and
upon such execution and delivery, such Subsidiary shall constitute an Assignor
hereunder.
Section 8.13
Release of Assignors.

If at any time all of the Equity Interests of any Assignor (or, to the extent
any other Security Document requires releases thereunder to occur in accordance
with the provisions of this Agreement, the pledgor, transferor, mortgagor or
other corresponding party under such other Security Document) owned by the
Company and its Subsidiaries (other than the Equity Interests of a Borrower) are
sold (to a Person other than the Company or any of its Subsidiaries) in a
transaction permitted pursuant to the Credit Agreement (and which does not
violate the terms of any other Credit Document then in effect), then, at the
request and expense of the Company, the respective Assignor shall be immediately
released as an Assignor pursuant to this Agreement (and upon the reasonable
request of the Company and at the expense of the Assignors, the Collateral Agent
(or, to the extent any other Security Document requires releases thereunder to
occur in accordance with the provisions of this Agreement, the pledgee,
assignee, mortgagee or other corresponding party under such other Security
Document) shall execute and deliver such instruments of release as are
reasonably necessary to evidence the release of such Assignor and otherwise
reasonably satisfactory to the Collateral Agent. At any time the Company desires
that the Collateral Agent acknowledge that an Assignor has been released from
this Agreement as provided in this Section 8.13, the Company shall deliver to
the Collateral Agent a certificate signed by an Authorized Officer of the
Company stating that (i) the transaction is permitted pursuant to the Credit
Agreement (and does not violate the terms of any other Credit Documents then in
effect) and (ii) the release of the respective Assignor is permitted pursuant to
this Section 8.13.
Section 8.14
No Novation.

This Agreement does not extinguish the obligations or security interests under
the Original Canadian Security Agreement or discharge or release the obligations
or the Liens of any mortgage, pledge, security agreement or any other security
therefor. Nothing herein contained shall be construed as a substitution or
novation of the obligations outstanding under or security interests created
under the Original Canadian Security Agreement which shall remain in full force
and effect and continued hereunder without interruption hereunder, except as
modified hereby or by instruments executed concurrently herewith. Nothing
expressed or implied in this Agreement shall be construed as a release or other
discharge of any Assignor from any of its obligations or liabilities under the
Original Canadian Security Agreement or other documents executed in connection
therewith.

[Remainder of this page intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.

 
 
ASSIGNORS:
CIENA CANADA, INC.,  

By:
/s/ Elizabeth A. Dolce
 
Name: Elizabeth A. Dolce
 
Title: Vice President and Treasurer

 

 

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Accepted and Agreed to:
DEUTSCHE BANK AG NEW YORK BRANCH,
as Collateral Agent
By:
/s/ Anca Trifan
 
Name: Anca Trifan
 
Title: Managing Director
 
 
By:
/s/ Kirk L/ Tashjian
 
Name: Kirk L. Tashjian
 
Title: Vice President

[Signature Page to Amended and Restated Canadian Security Agreement]