Exhibit 10.4

 

Execution Version

 

 

SECOND AMENDED AND RESTATED CANADIAN SECURITY AGREEMENT

 

dated as of March 31, 2015

 

among

 

UNITED RENTALS OF CANADA, INC.; UNITED RENTALS OF NOVA SCOTIA (NO.1); UNITED
RENTALS OF NOVA SCOTIA (NO.2), ULC; and UR CANADIAN FINANCING PARTNERSHIP;
as the Grantors,

 

and

 

BANK OF AMERICA, N.A.,
as Agent

 

 

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Table of Contents

 

 

 

Page

 

 

 

SECTION 1.

Defined Terms

2

 

 

 

SECTION 2.

Grant of Lien

2

 

 

 

SECTION 3.

Perfection and Protection of Security Interest

6

 

 

 

SECTION 4.

[Reserved]

8

 

 

 

SECTION 5.

Jurisdiction of Organization

8

 

 

 

SECTION 6.

Title to, Liens on, and Sale and Use of Collateral

9

 

 

 

SECTION 7.

Access and Examination

9

 

 

 

SECTION 8.

[Reserved]

9

 

 

 

SECTION 9.

Inventory; Perpetual Inventory

9

 

 

 

SECTION 10.

Documents, Instruments and Letter of Credit Rights

9

 

 

 

SECTION 11.

Leases and Other Chattel Paper

9

 

 

 

SECTION 12.

Right to Cure

10

 

 

 

SECTION 13.

Power of Attorney

10

 

 

 

SECTION 14.

The Agent’s and the Other Secured Parties’ Rights, Duties and Liabilities

11

 

 

 

SECTION 15.

Patent, Trademark and Copyright Collateral

12

 

 

 

SECTION 16.

Voting Rights; Dividends; Etc.

13

 

 

 

SECTION 17.

Indemnification

14

 

 

 

SECTION 18.

Limitation on Liens on Collateral

14

 

 

 

SECTION 19.

Extensions

14

 

 

 

SECTION 20.

Remedies; Rights Upon Default

15

 

 

 

SECTION 21.

Grant of License to Use Proprietary Rights

17

 

 

 

SECTION 22.

Limitation on the Agent’s and the Other Secured Parties’ Duty in Respect of
Collateral

17

 

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SECTION 23.

Miscellaneous

18

 

 

 

SECTION 24.

Amendment and Restatement

21

 

 

 

SECTION 1.

Grant of Lien

1

 

 

Schedules

 

Schedule I

-

Jurisdictions of Organization

 

 

 

 

 

Schedule II

-

Patents, Trademarks and Copyrights

 

 

Exhibits

 

Exhibit A

-

Security Agreement Supplement

 

 

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SECOND AMENDED AND RESTATED CANADIAN SECURITY AGREEMENT

 

This Second Amended and Restated Canadian Security Agreement (as amended,
restated, amended and restated, supplemented or otherwise modified from time to
time, this “Agreement”), is dated as of March 31, 2015, among UNITED RENTALS OF
CANADA, INC., a company amalgamated under the laws of the Province of Ontario
(“Canadian Borrower”); UNITED RENTALS OF NOVA SCOTIA (NO.1), ULC, a Nova Scotia
unlimited liability company (“NSULC 1”), UNITED RENTALS OF NOVA SCOTIA (NO.2),
ULC, a Nova Scotia unlimited liability company (“NSULC 2”); UR CANADIAN
FINANCING PARTNERSHIP, a partnership organized pursuant to the laws of Nova
Scotia (“UR Financing Partnership” and together with NSULC 1 and NSULC 2 the
“Canadian Guarantors”) and such other signatories hereto (each of the foregoing
a “Grantor” and collectively the “Grantors”) and BANK OF AMERICA, N.A., as Agent
(the “Agent”).

 

W I T N E S S E T H :

 

WHEREAS, United Rentals, Inc., United Rentals (North America), Inc., certain of
their Subsidiaries, the Canadian Borrower, the Agent and the lenders party
thereto are party to a credit agreement dated as of June 9, 2008 as amended as
of October 14, 2011 (as amended, restated, amended and restated, supplemented or
otherwise modified prior to the date hereof, the “Existing Credit Agreement”);

 

WHEREAS, as of the date hereof, the Existing Credit Agreement is being amended
and restated, without constituting a novation, pursuant to a second amended and
restated credit agreement dated as of the date hereof (as amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among, amongst others, United Rentals (North America), Inc.
and each other U.S. Borrower (as such term is defined in the Credit Agreement),
United Rentals, Inc. and each other U.S. Guarantor (as such term is defined in
the Credit Agreement), the Canadian Borrower, the Canadian Guarantors, Bank of
America, N.A., as Agent, and the lenders party thereto;

 

WHEREAS, in connection with the Existing Credit Agreement, each Grantor (and
certain other grantors party thereto) entered into a Canadian Security
Agreement, dated as of June 9, 2008, as amended as of October 14, 2011 (as
amended, restated, extended, supplemented or otherwise modified in writing prior
to the date hereof, the “Existing Security Agreement”);

 

WHEREAS, in order to induce the Agent and the Lenders to amend and restate the
Existing Credit Agreement by entering into the Credit Agreement and the other
Loan Documents and to induce the Lenders to maintain and make loans and issue
letters of credit as provided for in the Credit Agreement, the Grantors enter
into this Agreement in favour of the Agent, and pursuant hereto agree to grant
to the Agent, for the benefit of the Secured Parties, a security interest in and
lien upon the Collateral (as defined below) to secure their respective
Obligations (as defined in the Credit Agreement);

 

WHEREAS, the Canadian Borrower is a borrower and has obligations to, amongst
others, the Agent pursuant to the terms of the Credit Agreement;

 

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WHEREAS, in connection with the entering into the Credit Agreement, the Canadian
Guarantors have entered into a second amended and restated guarantee agreement
(the “Canadian Borrower Guarantee”) dated of equal date herewith in favour of
the Agent, whereby they each, jointly and severally agree to unconditionally
guarantee and promise to pay to the Agent, or order to be paid, on demand, any
and all Obligations of the Canadian Borrower and its successors and assigns;

 

WHEREAS, NSULC 1 and NSULC 2 have entered into a second amended and restated
guarantee agreement (the “US Borrower Guarantee”) dated of equal date herewith
in favour of the Agent, whereby they each, jointly and severally, agree to
unconditionally guarantee and promise to pay to the Agent, or order to be paid,
on demand, any and all Obligations of the U.S. Obligors;

 

WHEREAS the obligations of the Grantors pursuant to the Canadian Borrower
Guarantee, and the U.S. Borrower Guarantee (collectively the “Guarantees”) form
part of the Obligations of the Grantors pursuant to the terms of the Credit
Agreement;

 

WHEREAS, in consideration for, among other things, the amendment and restatement
of the Existing Credit Agreement by the execution and delivery of the Credit
Agreement by the Agent and the Lenders, and to secure the full and prompt
payment and performance of all of their respective Obligations, each Grantor
agrees to grant to the Agent, for the benefit of the Secured Parties, a security
interest in the Collateral, in order to ensure and secure the prompt payment and
performance of their respective Obligations.

 

NOW, THEREFORE, in consideration of the promises and mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Existing Security Agreement shall be amended and restated as follows:

 

SECTION 1.         Defined Terms.  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Credit Agreement.  All
other undefined terms contained in this Agreement, unless the context indicates
otherwise, have the meanings provided for by the Personal Property Security Act
(Ontario) as in effect from time to time in the applicable jurisdiction (the
“PPSA”) to the extent the same are used or defined therein. All references to
any asset described in the definition of the term “Collateral”, or to any
proceeds thereof, shall be deemed to be references thereto except to the extent
such asset is an Excluded Asset.

 

SECTION 2.         Grant of Lien.  (a) As security for the due and prompt
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise), as the case may be, by the Grantors of their
respective Obligations, each Grantor hereby grants, to the Agent, its successors
and assigns, for the ratable benefit of the applicable Secured Parties, a
security interest (the “Security Interest”) in and continuing lien upon and
right of set-off against, all personal property, assets and undertakings of such
Grantor, including, without limitation, all of such Grantor’s right, title and
interest in or to any and all of the following properties and assets of such
Grantor and powers and rights of such Grantor in all of the following (including

 

2

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the power to transfer rights in the following), whether now owned or existing or
at any time hereafter acquired or arising, regardless of where located
(collectively, the “Collateral”):

 

(i)            all Accounts;

 

(ii)           all Inventory, including all Rental Equipment;

 

(iii)          all leases of Goods (whether or not in the form of a lease
agreement), including all Leases;

 

(iv)          all documentation evidencing rights in any Inventory or Equipment,
including all certificates, and other collateral instruments;

 

(v)           all contract rights, including contract rights in respect of any
Like-Kind Exchange;

 

(vi)          all Chattel Paper;

 

(vii)         all Documents;

 

(viii)        all Instruments;

 

(ix)          all Intangibles (as such term is defined in the PPSA);

 

(x)           all Goods (excluding “Consumer Goods” as such term is defined in
the PPSA);

 

(xi)          all Equipment;

 

(xii)         all Investment Property, including the following (the “Security
Collateral”);

 

(A)          the Initial Pledged Equity and the certificates, if any,
representing the Initial Pledged Equity, and all dividends, distributions,
return of capital, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Initial Pledged Equity and all subscription warrants, rights
or options issued thereon or with respect thereto;

 

(B)          all additional shares of stock and other equity interests of or in
any issuer of the Initial Pledged Equity, any successor entity or any other
entity from time to time organized, created or acquired by such Grantor in any
manner (such equity interests, together with the Initial Pledged Equity, being
the “Pledged Equity”), and the certificates, if any, representing such
additional shares or other equity interests, and all dividends, distributions,
return of capital, cash, instruments and other property from time to time
received, receivable or otherwise distributed in

 

3

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respect of or in exchange for any or all of such shares or other equity
interests and all subscription warrants, rights or options issued thereon or
with respect thereto;

 

(C)          the Initial Pledged Debt and the instruments, if any, evidencing
the Initial Pledged Debt, and all interest, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Initial Pledged Debt; and

 

(D)          all additional indebtedness from time to time owed to such Grantor
(such indebtedness, together with the Initial Pledged Debt, being the “Pledged
Debt”) and the instruments, if any, evidencing such indebtedness, and all
interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness;

 

(xiii)        all money, cash, cash equivalents, securities and other property
of any kind of such Grantor held directly or indirectly by the Agent, any Lender
or any of their Affiliates;

 

(xiv)        all of such Grantor’s Material Accounts, credits, and balances with
and other claims against the Agent or any Lender or any of their Affiliates or
any other financial institution with which such Grantor maintains deposits,
including all Payment Accounts;

 

(xv)         all books, records and other property related to or referring to
any of the foregoing, including books, records, account ledgers, data processing
records, computer software and other property; and

 

(xvi)        all accessions to, substitutions for and replacements, products and
proceeds of any of the foregoing, including, but not limited to, proceeds of any
insurance policies, claims against third parties, and condemnation or
requisition payments with respect to all or any of the foregoing;

 

provided, however, the Collateral shall not include the following (collectively,
the “Excluded Assets”):

 

(i)            any rights, titles or interests of a Grantor in any instrument,
permit, General Intangible, Lease, license or agreement to which such Grantor is
a party (other than any of the foregoing with or by any other Grantor or any
Subsidiary or other controlled Affiliate of a Grantor) or any of its right,
title or interest thereunder to the extent, but only to the extent, that a grant
of a security interest therein to the Agent would, under the terms of such
instrument, permit, General Intangible, Lease, license or agreement, result in
breach of the terms of, or constitute a default under, or result in the
abandonment, invalidation or unenforceability of or create a right of
termination in favour of or require the consent (which has not been obtained or
waived) of any other party under such instrument, permit, General Intangible,
Lease, license or agreement,

 

4

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provided that the foregoing exclusion shall not be construed to apply to the
extent any such term is ineffective or unenforceable under the UCC (including
Sections 9 406, 9 407, 9 408 or 9 409), the comparable provisions of the PPSA,
or any other requirement of applicable law so that no breach, default,
abandonment, invalidity or unenforceability would occur.

 

(ii)           any asset to the extent the granting of a security interest
therein to the Agent is prohibited by applicable law or would require the
consent, approval, license or authorization of any Governmental Authority or,
except with respect to any Rental Equipment, Merchandise and Consumables
Inventory, any proceeds of any of the foregoing, any Material Accounts into
which any such proceeds are deposited, or any books or records related to any of
the foregoing, other third party (except a Grantor or any Subsidiary or other
controlled Affiliate of a Grantor) that has not been obtained or waived;
provided that the foregoing exclusion shall not be construed to apply to the
extent any such prohibition or requirement for consent, approval, license or
authorization is ineffective or unenforceable under the UCC (including Sections
9-406, 9-407, 9-408 or 9-409), comparable provisions of the PPSA, or any other
applicable law;

 

(iii)          any property that is subject to a Lien securing purchase money
obligations, Capital Lease Obligations or sale/leaseback Indebtedness permitted
under the Credit Agreement pursuant to documents that prohibit such Grantor from
granting any other Liens in such property, and such prohibition has not been or
is not waived or the consent of the other party to such contract has not been or
is not otherwise obtained or under Requirements of Law such prohibition cannot
be waived, and only for so long as such Indebtedness remains outstanding;

 

(iv)          (i) except for rental fleet equipment required to be excluded from
any Equipment Securitization Transaction pursuant to Section 7.20(b) of the
Credit Agreement, any assets subject to a Securitization Transaction; or
(ii) Accounts, Leases, contractual rights or any other assets subject to any
Like-Kind Exchange;

 

(v)           the equity interests, and any certificates or instruments in
respect thereof, in United Rentals of Nova Scotia (No.1), ULC and United Rentals
of Nova Scotia (No.2), ULC or any other Nova Scotia unlimited liability company;

 

(vi)          the equity interests, and any certificates or instruments in
respect thereof, in any joint venture or non-wholly owned Subsidiary, the
governing agreements of which prohibit the pledge or other granting of security
over equity interests in such Subsidiary and such prohibition has not been or is
not waived or the consent of the other party to such contract has not been or is
not otherwise obtained or under Requirements of Law such prohibition cannot be
waived;

 

(vii)         any real property or any fee interest or leasehold interest in
real property, including fixtures affixed or attached thereto;

 

(viii)        any right, title or interest in or to any copyrights, copyright
licenses, patents, patent applications, patent licenses, trade secrets, trade
secret licenses,

 

5

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trademarks, service marks, trademark and service mark applications, trade names,
trade dress, trademark licenses, technology, know-how and processes or any other
intellectual property governed by or arising or existing under, pursuant to or
by virtue of the laws of any jurisdiction other than the United States of
America or any state thereof or Canada; and

 

(ix)          any asset with respect to which the Agent and the Company have
reasonably agreed that the cost of creating and/or perfecting a security
interest therein is excessive in relation to the benefit to the Secured Parties
of the security to be afforded thereby.

 

Subject to any limitations set forth herein, all of the Obligations of each
Grantor shall be secured by all of the Collateral of such Grantor and any other
property of such Grantor that secures any such Obligations. For the avoidance of
doubt, all parties hereto agree that at no time shall any U.S. Obligations (as
such term is defined in the Credit Agreement) of a U.S. Obligor (as such term is
defined in the Credit Agreement) be secured by any of the Collateral of the
Canadian Borrower or UR Financing Partnership or any other property of the
Canadian Borrower or UR Financing Partnership.

 

SECTION 3.         Perfection and Protection of Security Interest.

 

(a)           (a) Except as explicitly set forth herein or in the Credit
Agreement, each Grantor shall, at its expense, perform all steps reasonably
requested in writing by the Agent to perfect, maintain or protect the Agent’s
Liens, including:  (i) executing and filing financing or continuation
statements, and amendments thereof; (ii) executing, delivering and/or filing and
recording in all appropriate offices the Intellectual Property Security
Agreement (to the extent required under the Credit Agreement or any other Loan
Document to which such Grantor is a party); (iii) when an Event of Default
pursuant to Sections 10.1(a), (e), (f), (g), (h), (i) and (n) of the Credit
Agreement has occurred and is continuing, at the reasonable request of the
Agent, transferring Inventory to warehouses or other locations designated by the
Agent; (iv)  when an Event of Default has occurred and is continuing, placing
notations on such Grantor’s books of account to disclose the Agent’s Liens;
(v) taking such other steps reasonably requested by the Agent to maintain and
protect the Agent’s Liens in the Collateral and (vi) in the case of the Security
Collateral, (A) if any Pledged Debt shall be evidenced by a promissory note or
other instrument with an individual amount in excess of $10,000,000, deliver and
pledge to the Agent hereunder such note or instrument duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance reasonably satisfactory to the Agent and (B) deliver and pledge to
the Agent for benefit of the Secured Parties certificates representing Pledged
Equity that constitutes certificated securities, accompanied by undated stock
powers executed in blank; provided that notwithstanding any other provision of
this Agreement, none of the Grantors will be required to (i) take any action in
any jurisdiction other than the Canada (including any province or territory
thereof) or United States of America (including any state thereof), or required
by the laws of any such other jurisdiction, or enter into any security agreement
or pledge agreement governed by the laws of any such other jurisdiction, in
order to either create any security interests (or other Liens) in assets located
or titled outside of Canada (including any province or territory thereof) and
the United States of America (including any state thereof) or to perfect any
security interests (or other Liens) in any non-Canadian or non-

 

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U.S. Collateral, (ii) deliver landlord lien waivers, estoppels or collateral
access letters or (iii) file any fixture filing with respect to any security
interest in fixtures affixed to or attached to any real property.

 

(b)           Unless the Agent shall otherwise consent in writing (which consent
may be revoked at any time and from time to time), each Grantor shall deliver to
the Agent all the Collateral consisting of negotiable Documents, Chattel Paper
and Instruments (other than cheques received and processed in the ordinary
course), in each case, with an individual value in excess of $10,000,000,
promptly after such Grantor receives the same, and shall do everything
reasonably requested by the Agent to ensure that the Agent obtains “Control” (as
such term is defined in the Securities Transfer Act, 2006, S.O. c.8, the “STA”)
of said documents and rights, but if an Event of Default has occurred and is
continuing, each Grantor agrees to deliver to the Agent all such Collateral
(regardless of value) upon the Agent’s request.

 

(c)           Upon obtaining an interest therein (but in the case of clause
(ii) below, subject to the time period specified in Section 7.17(a) of the
Credit Agreement), unless waived by the Agent in writing (which waiver may be
revoked at any time and from time to time), each Grantor shall obtain control or
blocked account agreements, in form and substance reasonably satisfactory to the
Agent, executed and delivered by (i) each issuer of uncertificated securities
with an individual value in excess of $10,000,000, securities intermediary, and
futures intermediary issuing or holding any financial assets or futures to or
for such Grantor, except for securities and futures accounts of the Grantors
that are not Material Accounts, and (ii) each depository bank at which such
Grantor maintains a Material Account.

 

(d)           Each Grantor hereby irrevocably authorizes the Agent at any time
and from time to time to file in any PPSA, UCC, Quebec Civil Code (“CCQ”) or
other applicable filing office any financing statements and amendments thereto
that (a) indicate the Collateral (i) as all assets of such Grantor or words of
similar effect, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the UCC of the State of New
York or such jurisdiction, or (ii) as being of an equal or lesser scope or with
greater detail, and (b) contain any other information required by such
jurisdiction for the sufficiency or filing office acceptance of any financing
statement or amendment, including where applicable whether such Grantor is an
organization, the type of organization and any organization identification
number issued to such Grantor.  Each Grantor agrees to furnish any such
information to the Agent promptly upon request.  Each Grantor also ratifies its
authorization for the Agent to have filed in any UCC, PPSA, CCQ or other
applicable filing office any like financing statements or amendments thereto if
filed prior to the date hereof.

 

(e)           Until Full Payment of the Obligations, the Agent’s Liens shall
continue in full force and effect in all the Collateral (whether or not deemed
eligible for the purpose of calculating the Availability or as the basis for any
advance, loan, extension of credit, or other financial accommodation), provided
that, the Agent agrees to release its Lien in any Collateral that is sold or
disposed of by a Grantor as permitted pursuant to the Credit Agreement, subject
to the satisfaction of any conditions to release (if any) set forth in the
Credit Agreement, including the continuance of the Agent’s Lien in any proceeds
of such released Collateral.

 

7

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(f)                                   Each Grantor will give prompt written
notice to the Agent of any change in its name, legal form or jurisdiction of
organization (whether by merger or otherwise) (and in any event, within 30 days
of such change); provided that, promptly after receiving a written request
therefor from the Agent, such Grantor shall deliver to the Agent all additional
financing statements and other documents reasonably necessary or desirable to
maintain the validity, perfection and priority of the security interests created
hereunder and other documents reasonably requested by the Agent to maintain the
validity, perfection and priority of the security interests as and to the extent
provided for herein and upon receipt of such additional financing statements the
Agent shall either promptly file such additional financing statements or approve
the filing of such additional financing statements by such Grantor. Upon any
such approval such Grantor shall proceed with the filing of the additional
financing statements and deliver copies (or other evidence of filing) of the
additional filed financing statements to the Agent.

 

(g)                                  No Grantor shall enter into any contract or
agreement that restricts or prohibits the grant of a security interest in
Accounts, Chattel Paper, Leases, Instruments or Payment Intangibles or the
proceeds of the foregoing to the Agent, except for any agreement permitted
pursuant to Section 8.8 of the Credit Agreement.

 

(h)                                 Each Grantor acknowledges that it is not
authorized to file any financing statement or amendment or termination statement
or financing change statement with respect to any financing statement filed by
the Agent without the prior written consent of the Agent and agrees that it will
not do so without the prior written consent of the Agent.

 

(i)                                     With respect to any Security Collateral
in which any Grantor has any right, title or interest and that constitutes an
uncertificated security, such Grantor shall, to the extent the issuer thereof is
a controlled Affiliate of the Grantor, or otherwise use its commercially
reasonable efforts to, cause the issuer thereof either (i) to register the Agent
as the registered owner of such security or (ii) to agree in an authenticated
record with such Grantor and the Agent that such issuer will comply with
instructions with respect to such security originated by the Agent in accordance
with this Agreement and the Credit Agreement without further consent of such
Grantor.

 

(j)                                    Each Grantor agrees that it will pledge
hereunder, promptly following its acquisition thereof, any and all additional
Security Collateral (subject to any limitations contained herein with respect
thereto) and deliver to the Agent for the benefit of the Secured Parties
certificates or instruments representing any such Security Collateral that
constitutes certificated securities, accompanied by undated stock or bond powers
executed in blank.

 

SECTION 4.                            [Reserved]

 

SECTION 5.                            Jurisdiction of Organization.  Each
Grantor represents and warrants to the Agent and the other Secured Parties that
as of the Agreement Date:  (a) Schedule I hereto identifies (i) such Grantor’s
name as of the date hereof as it appears in official filings in the province or
other jurisdiction of its incorporation or other organization, (ii) the type of
entity of such Grantor (including corporation, partnership, limited partnership,
unlimited liability or limited liability company), (iii) the organizational
identification number issued by such Grantor’s province or territory of
incorporation or organization or a statement that

 

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no such number has been issued, and (iv) the jurisdiction in which such Grantor
is incorporated or organized; and (b) such Grantor has only one province or
territory of incorporation or organization.

 

SECTION 6.                            Title to, Liens on, and Sale and Use of
Collateral.  Each Grantor represents and warrants to the Agent and the other
Secured Parties and agrees with the Agent and the other Secured Parties
that such Grantor has rights in and the power to transfer all of the Collateral
free and clear of all Liens whatsoever, except for Permitted Liens.

 

SECTION 7.                            Access and Examination.  During the
continuance of an Event of Default, the Agent may, without expense to the Agent,
use such of each Grantor’s respective personnel, supplies, and Real Estate as
may be reasonably necessary for maintaining or enforcing the Agent’s Liens. 
Subject to the terms of the Credit Agreement, following consultation with and
notice to the Grantors, or without such notice and consultation during the
continuance of an Event of Default, the Agent shall have the right, in the
Agent’s name or in the name of a nominee of the Agent, to verify the validity,
amount or any other matter relating to the Accounts, Inventory, Leases, or other
Collateral, by mail, telephone, or otherwise.

 

SECTION 8.                            [Reserved]

 

SECTION 9.                            Inventory; Perpetual Inventory.  Each
Grantor represents and warrants to the Agent and the other Secured Parties and
agrees with the Agent and the other Secured Parties that all of the Inventory
owned by such Grantor is and will be held for sale or lease in the ordinary
course of such Grantor’s business, and is and will be fit (ordinary wear and
tear and casualty events excepted) for such purposes, except to the extent as
would not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 10.                     Documents, Instruments and Letter of Credit
Rights.  Each Grantor represents and warrants to the Agent and the other Secured
Parties and agrees with the Agent and the other Secured Parties that all goods
constituting Collateral evidenced by Documents, Instruments and Letter-of-Credit
Rights are and will be owned by such Grantor, free and clear of all Liens other
than Permitted Liens.

 

SECTION 11.                     Leases and Other Chattel Paper.

 

(a)                                 Each Grantor hereby represents and warrants
to the Agent and the other Secured Parties and agrees with the Agent and the
other Secured Parties, with respect to such Grantor’s Leases, that (except, in
each case, as would not be reasonably expected to have a Material Adverse
Effect):  (i) each Lease represents a bona fide lease of goods by such Grantor
in the ordinary course of such Grantor’s business; (ii) all amounts described as
being payable by a lessee in any existing Lease are for a liquidated amount
payable by such lessee thereon on the terms set forth in such Lease, without any
offset, deduction, defense, or counterclaim except in the ordinary course of
business; (iii) each copy of a Lease delivered to the Agent by such Grantor will
be a genuine copy of the original of such Lease; and (iv) (except in the case of
Progress Billings) all goods described in any Lease that has been delivered to
the Agent shall be or will have been delivered to and accepted by the lessee
thereunder (subject to the terms of such Lease).

 

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(b)                                 No Grantor shall accept any note or other
instrument (except a check or other instrument for the immediate payment of
money) with respect to any Lease unless upon such Grantor’s receipt of any such
instrument, unless otherwise agreed by the Agent or if such single instrument
has a face value that does not exceed $10,000,000, such Grantor promptly
delivers such instrument to the Agent, endorsed by such Grantor to the Agent in
a manner reasonably satisfactory in form and substance to the Agent.

 

(c)                                  Each Grantor represents and warrants to the
Agent and the other Secured Parties that all Goods that are covered by such
Leases and Chattel Paper are owned by such Grantor, free and clear of all Liens
other than Permitted Liens.

 

SECTION 12.                     Right to Cure.  The Agent may, in its reasonable
discretion, and shall, at the direction of the Required Lenders, pay any amount
or do any act required of any Grantor hereunder or under any other Loan Document
in order to preserve, protect, maintain or enforce the Obligations, the
Collateral or the Agent’s Liens therein, and which any Grantor fails to pay or
do following notice by the Agent to Grantors (unless an Event of Default has
occurred or is continuing, or unless the Agent, acting reasonably, believes
exigent circumstances may exist, in which events, no such notice shall be
required), including payment of any judgment against any Grantor, any insurance
premium, any warehouse charge, any finishing or processing charge, any
landlord’s or bailee’s claim, and any other Lien upon or with respect to the
Collateral.  All payments that the Agent makes in accordance with this
Section 12 and all documented out-of-pocket costs and expenses that the Agent
pays or incurs in connection with any action taken by it hereunder shall be
charged as a Canadian Revolving Loan, and the Agent agrees to notify the
Canadian Borrower thereof; provided that neither the Agent’s right to make any
such payments and charge the same as a Canadian Revolving Loan, nor the Canadian
Borrower’s obligation to repay any such Canadian Revolving Loan, shall be
conditioned in any way upon the Agent’s providing such notification.  Any
payment made or other action taken by the Agent under this Section 12 shall be
without prejudice to any right to assert an Event of Default hereunder and to
proceed thereafter as herein provided.

 

SECTION 13.                     Power of Attorney.  Each Grantor hereby appoints
the Agent and the Agent’s designee as such Grantor’s attorney, with power
exercisable upon the occurrence and during the continuance of an Event of
Default:  (a) to endorse such Grantor’s name on any cheques, notes, acceptances,
money orders, or other forms of payment or security that come into the Agent’s
or any of the other Secured Parties’ possession; (b) to sign such Grantor’s name
on any invoice, bill of lading, warehouse receipt or other negotiable or
non-negotiable Document constituting the Collateral, on drafts against
customers, on assignments of Accounts, on notices of assignment, financing
statements and other public records and to file any such financing statements by
electronic means with or without a signature as authorized or required by
applicable law or filing procedure; (c)  to notify the post office authorities
to change the address for delivery of such Grantor’s mail to an address
designated by the Agent and to receive, open and dispose of all mail addressed
to such Grantor; (d) to send requests for verification of Accounts and Leases
(other than Accounts and Leases subject to any Securitization Transactions) to
Account Debtors and lessees; (e) to complete in such Grantor’s name or the
Agent’s name, any order, sale, lease or transaction, obtain the necessary
Documents in connection therewith, and collect the proceeds thereof; (f)  to
clear Inventory through customs in such Grantor’s name, the Agent’s name or the
name of the Agent’s designee, and to sign and

 

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deliver to customs officials powers of attorney in such Grantor’s name for such
purpose; (g) to the extent that such Grantor’s authorization given in
Section 3(f) of this Agreement is not sufficient, to file such financing
statements with respect to this Agreement; and (h) to do all things necessary to
carry out the Credit Agreement, this Agreement and the other Loan Documents in
accordance with the terms thereof.  Each Grantor ratifies and approves all acts
of such attorney.  This power, being coupled with an interest, is irrevocable
until the Credit Agreement has been terminated and Full Payment of the
Obligations has occurred.

 

SECTION 14.                     The Agent’s and the Other Secured Parties’
Rights, Duties and Liabilities.

 

(a)                                 As between the Grantors and the Secured
Parties, each Grantor assumes all responsibility and liability arising from or
relating to the use, sale, lease, license or other disposition of the
Collateral.  None of the Obligations shall be affected by any failure of the
Agent or any of the other Secured Parties to take any steps to perfect the
Agent’s Liens or to collect or realize upon the Collateral, nor shall loss of or
damage to the Collateral release any Grantor from any of the Obligations. 
Following the occurrence and during the continuation of an Event of Default, the
Agent may (but shall not be required to), and at the direction of the Required
Lenders shall, without notice to (except as required under the Credit Agreement
or under any applicable law) or consent from any Grantor, sue upon or otherwise
collect, extend the time for payment of, modify or amend the terms of,
compromise or settle for cash, credit, or otherwise upon any terms, grant other
indulgences, extensions, renewals, compositions, or releases, and take or omit
to take any other action with respect to the Collateral, any security therefor,
any agreement relating thereto, any insurance applicable thereto, or any Person
liable directly or indirectly in connection with any of the foregoing, without
discharging or otherwise affecting the liability of Grantors for the
Obligations, or any other agreement now or hereafter existing between any of the
Secured Parties and any Grantor.

 

(b)                                 It is expressly agreed by each Grantor that,
anything herein to the contrary notwithstanding, such Grantor shall remain
liable under each Lease and each of its other contracts, agreements and licenses
to observe and perform all the conditions and obligations to be observed and
performed by it thereunder.  Neither the Agent nor any of the other Secured
Parties shall have any obligation or liability under any Lease, contract,
agreement or license by reason of or arising out of this Agreement or the
granting herein of a Lien thereon or the receipt by the Agent or any of the
other Secured Parties of any payment relating to any Lease, contract, agreement
or license pursuant hereto.  Neither the Agent nor any of the other Secured
Parties shall be required or obligated in any manner to perform or fulfill any
of the obligations of any Grantor under or pursuant to any Lease, contract,
agreement or license, or to make any payment, or to make any inquiry as to the
nature or the sufficiency of any payment received by it or the sufficiency of
any performance by any party under any Lease, contract, agreement or license, or
to present or file any claims, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.

 

(c)                                  With respect to Accounts and Leases, in
each case not subject to any Securitization Transaction or Like-Kind Exchange,
the Agent may, at any time after an Event of Default shall have occurred and be
continuing (or if any rights of set-off (other than set-offs

 

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against an Account arising under the contract giving rise to the same Account)
or contra accounts may be asserted with respect to the following), without prior
notice to any Grantor, notify Account Debtors, parties to Leases and other
Persons obligated on the Collateral that the Agent has a security interest
therein, and that payments shall be made directly to the Agent, for the benefit
of the Secured Parties.  Upon the request of the Agent, each Grantor shall so
notify Account Debtors and other Persons obligated on such Collateral.  Once any
such notice has been given to any Account Debtor or other Person obligated on
such Collateral and while any Event of Default exists and is continuing, no
Grantor shall give any contrary instructions to such Account Debtor or other
Person without the Agent’s prior written consent.

 

(d)                                 With respect to Accounts, and Leases, in
each case not subject to any Securitization Transaction or Like-Kind Exchange,
in connection with any audit, inspection or appraisal under, and subject to the
terms of, Section 7.9 of the Credit Agreement, the Agent may at any time in the
Agent’s own name, or in the name of any Grantor, following consultation with and
notice to the Grantors, or without such notice and consultation during the
continuance of an Event of Default, communicate with Account Debtors, parties to
Leases, contracts, agreements or licenses to which such Grantor is a party, and
obligors in respect of Instruments to verify with such Persons, to the Agent’s
satisfaction, the existence, amount and terms of Accounts, Leases, contracts and
agreements, payment intangibles, Instruments or Chattel Paper.  Grantors shall
deliver to the Agent, at their own expense, the results of each physical
verification, if any, which any Grantor may in its discretion have made, or
caused any other Person to have made on its behalf, of all or any portion of the
Inventory.

 

SECTION 15.                     Patent, Trademark and Copyright Collateral.

 

(a)                                 Each Grantor represents and warrants to the
Agent and the other Secured Parties that (i) as of the Agreement Date, such
Grantor does not have any interest in, or title to, any material issued or
applied-for patents, registered or applied-for trademarks or registered or
applied-for copyrights except as set forth in Schedule II hereto and, (ii) this
Agreement, together with the filing of the financing statements referred to in
Section 3(f) of this Agreement, the recording of the Trademark Agreement and the
Patent Agreement with the Canadian Intellectual Property Office and subsequent
filings for any hereafter acquired, issued or applied-for patents, registered or
applied-for trademarks or issued or applied-for copyrights, are effective to
create valid, perfected, first priority (subject to Permitted Liens) and
continuing Liens in favour of the Agent on such material patents, trademarks and
copyrights.

 

(b)                                 Each Grantor shall notify the Agent promptly
if it knows that any application or registration relating to any material
patent, trademark or copyright (now or hereafter existing) owned or licensed by
such Grantor will become abandoned or dedicated, or of any material and adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the Canadian Intellectual
Property Office, or any court) regarding such Grantor’s ownership of any
material patent, trademark or copyright, its right to register the same, or to
keep and maintain the same.

 

(c)                                  If, before Full Payment of the Obligations
and the termination of the Lenders’ commitments to lend under the Credit
Agreement, any Grantor shall obtain ownership of any additional issued or
applied-for patent, registered or applied-for trademark or issued or

 

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applied-for copyright (except to the extent any application for a trademark is
excluded from the definition of “Collateral” under subclause (c) of Section 2 of
this Agreement), with respect to goods sold in such Grantor’s business, the
Agent shall have a Lien in, and the provisions of Section 2 shall automatically
apply to, such issued or applied-for patent, registered or applied-for trademark
or issued or applied-for copyright, and also to any composite marks or other
marks of such Grantor which are confusingly similar to such mark, and such
Grantor shall give to the Agent prompt written notice of such ownership within
thirty (30) days of the end of each calendar year or more frequently upon the
request of the Agent, if an Event of Default has occurred and is continuing) in
which such Grantor obtains ownership of such patent, trademark, or copyright. 
This Section 15(c) shall not apply to trademarks which are owned by others and
licensed to any Grantor.

 

(d)                                 Each Grantor authorizes the Agent to modify
this Agreement by amending Schedule II to include any additional issued or
applied-for patents, registered or applied-for copyrights or registered or
applied-for trademarks owned by such Grantor and not included in Schedule II,
and to have this Agreement, as amended, or any other document evidencing the
security interest granted therein, recorded in the Canadian Intellectual
Property Office at the expense of such Grantor.  The Agent shall provide notice
to the Grantors of any amendment or modification to be effected pursuant to this
Section.

 

(e)                                  Upon written request of the Agent, each
Grantor shall execute and deliver any and all security agreements and other
notices of the Agent’s Liens as the Agent may reasonably request to evidence the
Agent’s Lien on such patent, trademark or copyright, and the General Intangibles
of such Grantor relating thereto or represented thereby.

 

(f)                                   Each Grantor shall take all actions
reasonably necessary or reasonably requested by the Agent to maintain and pursue
each application, to obtain the relevant registration and to maintain the
registration of each of the patents, trademarks and copyrights (now or hereafter
existing), including the filing of applications for renewal, affidavits of use,
affidavits of noncontestability and opposition and interference and cancellation
proceedings, unless such Grantor shall determine that such patent, trademark or
copyright is not material to the conduct of its business.

 

(g)                                  In the event that any Grantor has knowledge
that any of the material patent, trademark or copyright Collateral is infringed
upon, or misappropriated or diluted by a third party, such Grantor shall notify
the Agent promptly after such Grantor learns thereof.  Each Grantor shall,
unless it shall reasonably determine that such patent, trademark or copyright
Collateral is not material to the conduct of its business or operations,
promptly take commercially reasonable actions including such actions as the
Agent shall reasonably request under the circumstances to protect such patent,
trademark or copyright Collateral.

 

SECTION 16.                     Voting Rights; Dividends; Etc..

 

(a)                                 So long as no Event of Default shall have
occurred and be continuing, each Grantor (i) shall be entitled to exercise any
and all voting and other consensual rights pertaining to the Security Collateral
of such Grantor or any part thereof for any purpose; provided, however, that
such Grantor will not exercise or refrain from exercising any such right

 

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if such action would have a material adverse effect on the value of the Security
Collateral or any part thereof and (ii) shall be entitled to receive and retain
any and all dividends, interest and other distributions paid in respect of the
Security Collateral of such Grantor if and to the extent that the payment
thereof is not otherwise prohibited by the terms of the Loan Documents; provided
that such Grantor shall deliver and pledge to the Agent any such dividends or
distributions payable in the form of stock to the extent required hereunder.

 

(b)                                 Upon the occurrence and during the
continuance of an Event of Default, all rights of each Grantor (i) to exercise
or refrain from exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 16(a) shall, upon written
notice to such Grantor by the Agent, cease and (ii) to receive the dividends,
interest and other distributions that it would otherwise be authorized to
receive and retain pursuant to Section 16(a) shall automatically cease, and all
such rights shall thereupon become vested in the Agent, which shall thereupon
have the sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such dividends,
interest and other distributions

 

SECTION 17.                     Indemnification.  In any suit, proceeding or
action brought by the Agent or any of the other Secured Parties relating to any
Collateral for any sum owing with respect thereto or to enforce any rights or
claims with respect thereto, each Grantor jointly and severally agrees to save,
indemnify and keep the Agent and the other Secured Parties harmless from and
against all expense (including reasonable and documented attorneys’ fees and
expenses), loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the Account
Debtor or other Person obligated on the Collateral, arising out of a breach by
any Grantor of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to, or in favour of, such obligor or
its successors from any Grantor, except in the case of the Agent or any of the
other Secured Parties, to the extent such expense, loss, or damage is
attributable to the gross negligence, bad faith or willful misconduct of the
Agent or such other Secured Party.  All such obligations of Grantors shall be
and remain enforceable against and only against Grantors and shall not be
enforceable against the Agent or any of the other Secured Parties.

 

SECTION 18.                     Limitation on Liens on Collateral.  No Grantor
will create, permit or suffer to exist, and will defend the Collateral against,
and take such other action as is necessary to remove, any Lien on the Collateral
except Permitted Liens, and will defend the right, title and interest of the
Agent and the other Secured Parties in and to any of such Grantor’s rights under
the Collateral against the claims and demands (other than Permitted Liens) of
all Persons whomsoever.

 

SECTION 19.                     Extensions. The Agent may grant extensions of
time for the creation and perfection of security interests in, or obtaining a
delivery of documents or other deliverables with respect to, particular assets
of any Grantor where it determines that (x) such action cannot be accomplished
without undue effort or expense by the time or times at which it would otherwise
be required to be accomplished by this Agreement or any other Security Documents
or (y) such an extension is otherwise appropriate.

 

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SECTION 20.                     Remedies; Rights Upon Default.

 

(a)                                 In addition to all other rights and remedies
granted to it under this Agreement, the Credit Agreement, the other Loan
Documents and under any other instrument or agreement securing, evidencing or
relating to any of the Obligations or pursuant to any other applicable law, if
any Event of Default shall have occurred and be continuing, the Agent may
exercise all rights and remedies of a secured party under the PPSA, UCC, CCQ and
other applicable law.  Without limiting the generality of the foregoing, each
Grantor expressly agrees that, if any Event of Default shall have occurred and
be continuing, the Agent, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon such Grantor or any other Person
(all and each of which demands, advertisements and notices are hereby expressly
waived to the maximum extent permitted by the PPSA, UCC and CCQ and other
applicable law), may forthwith enter upon the premises of such Grantor where any
Collateral is located through self-help, without judicial process, without first
obtaining a final judgment or giving such Grantor or any other Person notice and
opportunity for a hearing on the Agent’s claim or action and may collect,
receive, assemble, process, appropriate and realize upon the Collateral, or any
part thereof, and may forthwith sell, lease, license, assign, give an option or
options to purchase, or sell or otherwise dispose of and deliver said Collateral
(or contract to do so), or any part thereof, in one or more parcels at a public
or private sale or sales, at any exchange at such prices as it may deem
acceptable, for cash or on credit or for future delivery without assumption of
any credit risk. If any Collateral is sold on terms other than payment in full
at the time of sale, no credit shall be given against the Obligations until the
Agent or the other Secured Parties receive payment, and if the buyer defaults in
payment, the Agent may resell the Collateral without further notice to any
Grantor. The Agent or any of the other Secured Parties shall have the right upon
any such public sale or sales and, to the extent permitted by law, upon any such
private sale or sales, to purchase for the benefit of the Agent and the other
Secured Parties, the whole or any part of said Collateral so sold, free of any
right or equity of redemption, which equity of redemption each Grantor hereby
releases.  Such sales may be adjourned and continued from time to time with or
without notice.  The Agent shall have the right to conduct such sales on
premises of any Grantor or elsewhere and shall have the right to use any
Grantor’s premises without charge for such time or times as the Agent deems
necessary or advisable.

 

(b)                                 Each Grantor further agrees, at the Agent’s
request following the occurrence and during the continuance of an Event of
Default, to assemble the Collateral and make it available to the Agent at a
place or places designated by the Agent which are reasonably convenient to the
Agent and such Grantor, whether at such Grantor’s premises or elsewhere.  Until
the Agent is able to effect a sale, lease, or other disposition of the
Collateral, the Agent shall have the right to hold or use the Collateral, or any
part thereof, to the extent that it deems appropriate for the purpose of
preserving the Collateral or its value or for any other purpose deemed
appropriate by the Agent.  The Agent shall have no obligation to any Grantor to
maintain or preserve the rights of such Grantor as against third parties with
respect to the Collateral while the Collateral is in the possession of the Agent
or marshal any Collateral for the benefit of any Person. In the event the Agent
seeks to take possession of all or any portion of the Collateral by the judicial
process, each Grantor irrevocably waives (i) any demand for possession prior to
the commencement of any suit or action to recover the Collateral and (ii) any
requirement that the Agent retain possession and not dispose of any Collateral
until after trial or final judgment.  The Agent may, if it so elects, and, in
addition to any other rights it may have, appoint by instrument in writing a
receiver or receiver and manager (both of which are herein

 

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called a “Receiver”) of all or any part of the Collateral or may institute
proceedings in any court of competent jurisdiction for the appointment of such a
Receiver.  Any such Receiver is hereby given and shall have the same powers and
rights and exclusions and limitations of liability as the Secured Parties and
the Agent have under this Security Agreement, at law or in equity.  In
exercising any such powers, any such Receiver shall, to the extent permitted by
law, act as and for all purposes shall be deemed to be the agent of the Grantor,
and the Secured Parties and the Agent shall not be responsible for any act or
default of any such Receiver.  The Agent may appoint one or more Receivers
hereunder and may remove any such Receiver or Receivers and appoint another or
others in his or their stead from time to time. Any Receiver so appointed may be
an officer or employee of the Agent or any of the other Secured Parties.  A
court need not appoint, ratify the appointment by the Agent of or otherwise
supervise in any manner the actions of any Receiver.  Upon the Grantor receiving
notice from the Agent of the taking of possession of the Collateral or the
appointment of a Receiver, all powers, functions, rights and privileges of each
of the directors and officers of the Grantor with respect to the Collateral
shall cease, unless specifically continued by the written consent of the Agent. 
The Agent shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale to the Obligations first to all
expenses of collection, recovery, receipt, appropriation, realization or sale,
including reasonable attorney’s fees, and then as provided in the Credit
Agreement, and only after so paying over such net proceeds, and after the
payment by the Agent of any other amount required by any provision of law, need
the Agent account for the surplus, if any, to the applicable Grantor.  To the
maximum extent permitted by applicable law, each Grantor waives all claims,
damages, and demands against the Agent or any of the other Secured Parties
arising out of the repossession, retention or sale of the Collateral except such
as arise solely out of the gross negligence, bad faith or willful misconduct of
the Agent or such Secured Party as finally determined by a court of competent
jurisdiction. Unless a greater period of time is required by applicable law,
each Grantor agrees that ten (10) days prior notice by the Agent of the time and
place of any public sale or of the time after which a private sale may take
place is reasonable notification of such matters.  Each Grantor shall remain
liable, jointly and severally with the other Grantors, for any deficiency if the
proceeds of any sale or disposition of the Collateral are insufficient to pay
all Obligations, including any attorneys’ fees or other expenses (to the extent
provided for herein or in the Credit Agreement) incurred by the Agent or any of
the other Secured Parties to collect such deficiency.

 

(c)                                  Except as otherwise specifically provided
herein, each Grantor hereby waives presentment, demand, protest or any notice
(to the maximum extent permitted by applicable law) of any kind in connection
with this Agreement or any Collateral.

 

(d)                                 To the extent that applicable law imposes
duties on the Agent to exercise remedies in a commercially reasonable manner,
each Grantor acknowledges and agrees that it is not commercially unreasonable
for the Agent (a) to fail to incur expenses reasonably deemed significant by the
Agent to prepare the Collateral for disposition or otherwise to complete raw
material or work in process into finished goods or other finished products for
disposition, (b) to fail to obtain third party consents for access to the
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain governmental or third party consents for the collection or
disposition of the Collateral to be collected or disposed of, (c) to fail to
exercise collection remedies against Account Debtors or other Persons obligated
on the Collateral or to remove Liens on or any adverse claims against the
Collateral, (d) to exercise collection remedies against

 

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Account Debtors and other Persons obligated on the Collateral directly or
through the use of collection agencies and other collection specialists, (e) to
advertise dispositions of the Collateral through publications or media of
general circulation, whether or not the Collateral is of a specialized nature,
(f) to contact other Persons, whether or not in the same business as any
Grantor, for expressions of interest in acquiring all or any portion of such
Collateral, (g) to hire one or more professional auctioneers to assist in the
disposition of the Collateral, whether or not the Collateral is of a specialized
nature, (h) to dispose of the Collateral by utilizing Internet sites that
provide for the auction of assets of the types included in the Collateral or
that have the reasonable capacity of doing so, or that match buyers and sellers
of assets, (i) to dispose of assets in wholesale rather than retail markets,
(j) to disclaim disposition warranties, such as title, possession or quiet
enjoyment, (k) to purchase insurance or credit enhancements to insure the Agent
against risks of loss, collection or disposition of the Collateral or to provide
to the Agent a guaranteed return from the collection or disposition of the
Collateral, (l) to dispose of Leases, Inventory and related Collateral in one or
more portfolio sales or in individual sale transactions, or (m) to the extent
deemed appropriate by the Agent, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist the Agent in
the collection or disposition of any of the Collateral.  Each Grantor
acknowledges that the purpose of this Section 19(d) is to provide non-exhaustive
indications of what actions or omissions by the Agent would not be commercially
unreasonable in the Agent’s exercise of remedies against the Collateral and that
other actions or omissions by the Agent shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section 19(d). 
Without limitation upon the foregoing, nothing contained in this
Section 19(d) shall be construed to grant any rights to any Grantor or to impose
any duties on the Agent that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this Section 19(d).

 

SECTION 21.                     Grant of License to Use Proprietary Rights. 
Solely for the purpose of enabling the Agent to exercise rights and remedies
under Section 19 hereof (including, without limiting the terms of Section 19
hereof, in order to take possession of, hold, preserve, process, assemble,
prepare for sale, market for sale, sell or otherwise dispose of the Collateral),
effective solely upon the occurrence and during the continuance of an Event of
Default and exercisable at such time as the Agent shall be otherwise lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Agent, for the benefit of the Secured Parties, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to such
Grantor) to use, license or sublicense any Proprietary Rights now owned or
hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof.

 

SECTION 22.                     Limitation on the Agent’s and the Other Secured
Parties’ Duty in Respect of Collateral.  The Agent and each other Secured Party
shall use reasonable care with respect to the Collateral in its possession or
under its control.  Except as required by applicable law, neither the Agent nor
any of the other Secured Parties shall have any other duty as to any Collateral
in its possession or control or in the possession or control of the Agent or
nominee of the Agent or such other Secured Party, or any income thereon or as to
the preservation of rights against prior parties or any other rights pertaining
thereto.

 

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SECTION 23.                     Miscellaneous. Reinstatement.

 

(a)                                 This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of
such Grantor’s assets, and shall continue to be effective or be reinstated, as
the case may be, if at any time payment and performance of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or
otherwise, all as though such payment or performance had not been made.  In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.

 

(b)                                 Notices.  Except as otherwise provided
herein, whenever it is provided herein that any notice, demand, request,
consent, approval, declaration or other communication shall or may be given to
or served upon any of the parties by any other party, or whenever any of the
parties desires to give and serve upon any other party any communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be given in the
manner, and deemed received, as provided for in the Credit Agreement.

 

(c)                                  Severability.  Whenever possible, each
provision of this Agreement shall be interpreted in a manner as to be effective
and valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Agreement. 
This Agreement is to be read, construed and applied together with the Credit
Agreement and the other Loan Documents which, taken together, set forth the
complete understanding and agreement of the Agent, the other Secured Parties and
Grantors with respect to the matters referred to herein and therein provided
that, in the event of any conflict between the terms of this Agreement and the
Credit Agreement, the terms of the Credit Agreement shall govern.

 

(d)                                 No Waiver; Cumulative Remedies; Amendments
and Additional Grantors.

 

(i)                                     Neither the Agent nor any of the other
Secured Parties shall by any act, delay, omission or otherwise be deemed to have
waived any of its rights or remedies hereunder, and no waiver shall be valid
unless in writing, signed by the Agent and then only to the extent therein set
forth.  A waiver by the Agent of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Agent
would otherwise have had on any future occasion.  No failure to exercise nor any
delay in exercising on the part of the Agent or any of the other Secured
Parties, any right, power or privilege hereunder, shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or future exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies
hereunder provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights and remedies provided by law.

 

18

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

 

(ii)                                  None of the terms or provisions of this
Agreement may be waived, altered, modified or amended except by an instrument in
writing, duly executed by the Agent and Grantors.  Upon the execution and
delivery by any Person of a security agreement supplement in substantially the
form of Exhibit A hereto (each a “Security Agreement Supplement”), such Person
shall be referred to as an “Additional Grantor” and shall be and become a
Grantor hereunder, and each reference in this Agreement and the other Loan
Documents to “Grantor” shall also mean and be a reference to such Additional
Grantor, each reference in this Agreement and the other Loan Documents to the
“Collateral” shall also mean and be a reference to the Collateral granted by
such Additional Grantor and each reference in this Agreement to a Schedule shall
also mean and be a reference to the schedules attached to such Security
Agreement Supplement.

 

(e)                                  Limitation by Law.  All rights, remedies
and powers provided in this Agreement may be exercised only to the extent that
the exercise thereof does not violate any applicable provision of law, and all
the provisions of this Agreement are intended to be subject to all applicable
mandatory provisions of law that may be controlling and to be limited to the
extent necessary so that they shall not render this Agreement invalid,
unenforceable, in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable law.

 

(f)                                   Termination of this Agreement; Releases.

 

(i)                                     Subject to Section 22(a) hereof, this
Agreement shall terminate upon Full Payment of the Obligations and the
termination of the Lenders’ commitments to lend under the Credit Agreement.

 

(ii)                                  The Agent shall release, subject to the
satisfaction of all conditions to release (if any) set forth in the Credit
Agreement, including the continuance of the applicable Agent’s Lien in any
proceeds of released Collateral, any such Agent’s Liens upon any applicable
Collateral pursuant to the terms of Section 13.11 of the Credit Agreement.

 

(iii)                               Upon any Collateral being or becoming an
Excluded Asset, the Lien created hereby on such Collateral shall automatically
terminate and be released without further actions by any Person.  In connection
therewith, the Agent, at the request and sole expense of the applicable Grantor,
shall promptly execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable to evidence such termination and
release in accordance with Section 13.11 of the Credit Agreement.

 

(g)                                  Successors and Assigns.  This Agreement and
all obligations of each Grantor hereunder shall be binding upon and inure to the
benefit of the successors and assigns of such Grantor (including any
debtor-in-possession on behalf of such Grantor) and shall, together with the
rights, remedies and obligations of the Agent, hereunder, inure to the benefit
of and be binding upon the Secured Parties, all future holders of any instrument
evidencing any of the Obligations and their respective successors and assigns. 
No sales of participations, other sales, assignments, transfers or other
dispositions of any agreement governing or instrument evidencing the Obligations
or any portion thereof or interest therein shall in any manner affect the Lien
granted to the Agent, for the benefit of the Secured Parties, hereunder.  Except
as expressly

 

19

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

 

permitted by the terms of the Credit Agreement, no Grantor may assign, sell,
hypothecate or otherwise transfer any interest in or obligation under this
Agreement.

 

(h)                                 Counterparts.  This Agreement may be
authenticated in any number of separate counterparts, each of which shall
collectively and separately constitute one and the same agreement.  This
Agreement may be authenticated by manual signature, facsimile or by electronic
means, all of which shall be equally valid.

 

(i)                                     Governing Law.  This General Security
Agreement shall be governed by and construed in accordance with the laws of the
Province of Ontario and the laws of Canada applicable therein, except as
required by mandatory provisions of law and except to the extent that the
validity or perfection of the security interests hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the Province of Ontario.

 

ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN
THE COURTS OF THE PROVINCE OF ONTARIO OR OF THE FEDERAL COURTS OF CANADA
THEREIN, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT.  EACH OF THE GRANTORS
AND THE AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE GRANTORS AND THE AGENT
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT.  EACH GRANTOR WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF ONTARIO.

 

The parties hereto hereby waive trial by jury in any action, proceeding, claim
or counterclaim, whether in contract or tort, at law or in equity with respect
to, in connection with, or arising out of this General Security Agreement, other
financing agreements, the obligations of the Borrowers and the Corporation, the
Collateral, or any instrument, document or guarantee delivered pursuant hereto
or to any of the foregoing, or the validity, protection, interpretation,
administration, collection or enforcement hereof or thereof, or any other claim
or dispute hereunder or thereunder. The Corporation agrees that it will not
assert against the Lender any claim for consequential, incidental, special, or
punitive damages in connection with this General Security Agreement or the
transactions contemplated hereby or thereby.  No officer of the Lender has
authority to waive, condition, or modify this provision.

 

(j)                                    Judgment Currency:  If for the purpose of
obtaining judgment in any court it is necessary to convert an amount due
hereunder in the currency in which it is due (the “Original Currency”) into
another currency (the “Second Currency”), the rate of exchange applied shall be
that at which, in accordance with normal banking procedures, the Lender could
purchase in the New York foreign exchange market, the Original Currency with the
Second Currency on the date two (2) Business Days preceding that on which
judgment is given. The Corporation agrees that its obligation in respect of any
Original Currency due from it hereunder

 

20

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

 

shall, notwithstanding any judgment or payment in such other currency, be
discharged only to the extent that, on the Business Day following the date the
Lender receives payment of any sum so adjudged to be due hereunder in the Second
Currency, the Lender may, in accordance with normal banking procedures,
purchase, in the New York foreign exchange market, the Original Currency with
the amount of the Second Currency so paid; and if the amount of the Original
Currency so purchased or could have been so purchased is less than the amount
originally due in the Original Currency, the Corporation agrees as a separate
obligation and notwithstanding any such payment or judgment to indemnify the
Lender against such loss. The term “rate of exchange” in this Section 8.16 means
the spot rate at which the Lender, in accordance with normal practices, is able
on the relevant date to purchase the Original Currency with the Second Currency,
and includes any premium and costs of exchange payable in connection with such
purchase.

 

(k)                                 Section Titles.  The Section titles
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.

 

(l)                                     No Strict Construction.  The parties
hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favouring or
disfavouring any party by virtue of the authorship of any provisions of this
Agreement.

 

(m)                             Advice of Counsel.  Each of the parties
represents to each other party hereto that it has discussed this Agreement and,
specifically, the provisions of Sections 22(i) and Section 22(j), with its
counsel.

 

(n)                                 Benefit of the Secured Parties.  All Liens
granted or contemplated hereby shall be for the benefit of the Secured Parties,
and all proceeds or payments realized from the Collateral in accordance herewith
shall be applied to the Obligations (or the Guaranteed Obligations, as
applicable) in accordance with the terms of the Credit Agreement, and the other
Loan Documents.

 

SECTION 24.                     Amendment and Restatement

 

On the date hereof, the Existing Security Agreement is hereby amended, restated
and superseded in its entirety by this Agreement.  The parties hereto
acknowledge and agree that (i) this Agreement and the other Loan Documents
executed and delivered in connection herewith do not constitute a novation,
payment and reborrowing, or termination of the “Obligations” (as defined under
the Existing Credit Agreement) or any of the other Loan Documents; (ii) such
“Obligations” are in all respects continuing (as amended and restated on the
date hereof); and (iii) the security interests, Lien and pledge granted under
the Existing Security Agreement and the other Loan Documents are in all respects
continuing and in full force and effect and are hereby fully ratified and
affirmed in favour of the Agent, for the benefit of the Secured Parties. 
Without limiting the foregoing, each of the Grantors hereby fully and
unconditionally ratifies and affirms this Agreement and agrees that all security
interests, Liens and pledges granted hereunder

 

21

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

 

and under the Existing Security Agreement shall from and after the date hereof
secure all Obligations hereunder and under the other Loan Documents.

 

[Remainder of page intentionally left blank]

 

22

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

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed and delivered by its duly authorized officer as of the date first set
forth above.

 

 

GRANTORS:

 

 

 

UR CANADIAN FINANCING PARTNERSHIP, by its managing partner, UNITED RENTALS
FINANCING LIMITED PARTNERSHIP, by its general partner, UNITED RENTALS OF NOVA
SCOTIA (NO. 1), ULC

 

 

 

Per:

/s/ Irene Moshouris

 

 

Name: Irene Moshouris

 

 

Title: Vice President and Treasurer

 

 

 

 

 

Per:

/s/ Jonathan M. Gottsegen

 

 

Name: Jonathan M. Gottsegen

 

 

Title: Vice President, Secretary and General Counsel

 

 

 

 

 

 

 

UNITED RENTALS OF CANADA, INC.

 

 

 

 

Per:

/s/ Irene Moshouris

 

 

Name: Irene Moshouris

 

 

Title: Vice President and Treasurer 

 

 

 

 

 

 

 

Per:

/s/ Jonathan M. Gottsegen

 

 

Name: Jonathan M. Gottsegen

 

 

Title: Vice President, Secretary and General Counsel

 

 

 

 

 

 

 

UNITED RENTALS OF NOVA SCOTIA (NO. 1), ULC

 

 

 

 

Per:

/s/ Irene Moshouris

 

 

Name: Irene Moshouris 

 

 

Title: Vice President and Treasurer

 

 

 

 

 

 

 

Per:

/s/ Jonathan M. Gottsegen

 

 

Name: Jonathan M. Gottsegen

 

 

Title: Vice President, Secretary and General Counsel

 

 

 

[2nd Amended and Restated General Security Agreement]

 

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

 

 

UNITED RENTALS OF NOVA SCOTIA (NO. 2), ULC

 

 

 

 

Per:

/s/ Irene Moshouris

 

 

Name: Irene Moshouris 

 

 

Title: Vice President and Treasurer

 

 

 

 

 

 

 

Per:

/s/ Jonathan M. Gottsegen

 

 

Name: Jonathan M. Gottsegen

 

 

Title: Vice President, Secretary and General Counsel

 

 

 

 

 

 

 

AGENT:

 

 

 

BANK OF AMERICA, N.A.

 

 

 

 

Per:

/s/ Cynthia G. Stannard

 

 

Name: Cynthia G. Stannard

 

 

Title: Sr. Vice President 

 

 

 

 

 

 

 

Per:

 

 

 

Name:

 

 

Title:

 

 

 

[2nd Amended and Restated General Security Agreement]

 

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

 

SCHEDULE I TO AGREEMENT

JURISDICTION OF INCORPORATION

 

Grantor

 

State/Province of
Organization

 

Organizational ID
Number

 

Type of Entity

United Rentals of Canada, Inc.

 

Ontario

 

001847581

 

Corporation

UR Canadian Financing Partnership

 

Nova Scotia

 

N/A

 

General Partnership

United Rentals of Nova Scotia (No. 1), ULC

 

Nova Scotia

 

876019316

 

Unlimited Liability Company

United Rentals of Nova Scotia (No. 2), ULC

 

Nova Scotia

 

876019118

 

Unlimited Liability Company

 

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

 

SCHEDULE II TO AGREEMENT
PATENTS, PATENT LICENSES, TRADEMARKS AND TRADEMARK LICENSES

 

I.                                        Patents and Patent Licenses

 

N/A.

 

II.                                   Trademarks and Trademark Licenses

 

Reference #

 

Mark

 

Country

 

File Date

 

Application #

 

Registration #

 

Registration
Date

 

Classes
Combined

 

Description Combined

 

Agent Name

 

Owner

2817686.00608

 

REITZEL EQUIPMENT

 

CANADA

 

4/23/1993

 

0727314

 

TMA429684

 

6/24/1994

 

N/A

 

N/A - Sale and distribution of construction and industrial equipment, tools and
supplies.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00612

 

REITZEL RENTALS

 

CANADA

 

10/1/1981

 

0476220

 

TMA271241

 

7/23/1982

 

N/A

 

N/A - Rental of construction and industrial equipment, tools and supplies.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00607

 

ATLANT EQUIP SALES & Design

 

CANADA

 

10/20/1993

 

0739464

 

TMA441845

 

4/14/1995

 

N/A

 

N/A - Renting, leasing and sales of industrial and commercial equipment.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00613

 

REITZEL RENTALS SALES & SERVICE SINCE 1947 & Design

 

CANADA

 

1/24/1979

 

0435003

 

TMA241048

 

3/14/1980

 

N/A

 

N/A - Rental of construction and industrial equipment, tools and supplies.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00656

 

RSC

 

CANADA

 

12/20/2005

 

1283822

 

TMA732177

 

1/13/2009

 

 

 

 

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00660

 

RSC Design (color)

 

CANADA

 

1/18/2000

 

1043071

 

TMA559835

 

4/3/2002

 

N/A, N/A, N/A

 

N/A - Rental and leasing services in the field of construction, industrial and
contractors equipment and tools.
N/A - Party supply rental and leasing services.
N/A - Retail store services in the field of construction, industrial and
contractors equipment and tools and party supplies.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00659

 

RSC Design

 

CANADA

 

1/18/2000

 

1043072

 

TMA549606

 

8/9/2001

 

N/A, N/A, N/A

 

N/A - Rental and leasing services in the field of construction, industrial and
contractors equipment and tools.
N/A - Party supply rental and leasing services.
N/A - Retail store services in the field of construction, industrial and
contractors equipment and tools and party supplies.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

 

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

 

Reference #

 

Mark

 

Country

 

File Date

 

Application #

 

Registration #

 

Registration
Date

 

Classes
Combined

 

Description Combined

 

Agent Name

 

Owner

2817686.00657

 

RSC EQUIPMENT RENTAL

 

CANADA

 

11/24/2004

 

1238456

 

TMA712055

 

4/16/2008

 

N/A

 

N/A - Retail store services in the field of party supplies; wholesale
distributorship services and retail store services in connection with equipment
and tools used by contractors, industrial and petroleum facility owners and
others in the fields of construction, industrial facility operation, petroleum
exploration, petroleum production and petroleum refining; Rental and leasing
services in connection with equipment and tools used by contractors, industrial
and petroleum facility owners and others in the fields of construction,
industrial facility operation, petroleum exploration, petroleum products and
petroleum refining; and Rental and leasing of party supplies.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00661

 

RSC Rental Service Corporation Design

 

CANADA

 

1/18/2000

 

1043070

 

TMA558532

 

2/26/2002

 

N/A, N/A, N/A

 

N/A - Rental and leasing services in the field of construction, industrial and
contractors equipment and tools.
N/A - Party supply rental and leasing services.
N/A - Retail store services in the field of construction, industrial and
contractors equipment and tools and party supplies.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00662

 

RSC Rental Service Corporation Design (color)

 

CANADA

 

1/18/2000

 

1043069

 

TMA560422

 

4/19/2002

 

N/A, N/A, N/A

 

N/A - Rental and leasing services in the field of construction, industrial and
contractors equipment and tools.
N/A - Party supply rental and leasing services.
N/A - Retail store services in the field of construction, industrial and
contractors equipment and tools and party supplies.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00658

 

TOTAL CONTROL

 

CANADA

 

10/29/2003

 

1195024

 

TMA672415

 

9/12/2006

 

N/A

 

N/A - Computer software for management and accounting of retail store, wholesale
distributorship, rental, repair, and leasing services.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00655

 

VENETOR

 

CANADA

 

5/31/2011

 

1529888

 

TMA832693

 

9/25/2012

 

N/A

 

N/A - Rentals, leasing, sales and service of construction equipment and cranes.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

2817686.00611

 

VALLEY RENTALS & Design

 

CANADA

 

6/14/1991

 

0684148

 

TMA409420

 

3/12/1993

 

N/A

 

N/A - Operation of a business dealing in the sale and rental of equipment for
construction, industrial and residential use.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

N/A

 

RENT WORLD

 

CANADA

 

07/31/2013

 

1637677

 

N/A

 

N/A

 

N/A

 

N/A - Rental and leasing services in the field of construction and contractors’
equipment and tools; rental and leasing services in the field of industrial
equipment and tools, namely, equipment and tools for use in oil and gas
refining, oilfield services, power generation and distribution and chemicals
manufacturing; retail sale of construction and contractors’ equipment and tools.

 

Fogler, Rubinoff LLP Barristers & Solicitors

 

United Rentals of Canada, Inc.

 

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

 

Exhibit A to the
Security Agreement

 

FORM OF SECURITY AGREEMENT SUPPLEMENT

 

[Date of Security Agreement Supplement]

 

To:                             Bank of America, N.A., as Agent

 

Ladies and Gentlemen:

 

Reference is made to (i) the Second Amended and Restated Credit Agreement, dated
of March 31, 2015 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”), among United
Rentals, Inc., a Delaware corporation (“Holdings”), United Rentals (North
America), Inc., a Delaware corporation (the “Company”), the other U.S.
Subsidiary Borrowers named therein (together with the Company, the “U.S.
Borrowers”), United Rentals of Canada, Inc., a corporation amalgamated under the
laws of the Province of Ontario (the “Canadian Borrower”), United Rentals
Financing Limited Partnership (the “Specified Loan Borrower”), the Lenders from
time to time party thereto, and Bank of America, N.A., as Agent and (ii) the
Second Amended and Restated Canadian Security Agreement dated as of March 31,
2015 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Security Agreement”) made by the Grantors from time to time
party thereto in favour of the Agent for the benefit of the Secured Parties. 
Terms defined in the Credit Agreement or the Security Agreement and not
otherwise defined herein are used herein as defined in the Credit Agreement or
the Security Agreement.

 

SECTION 1.                            Grant of Lien.  As security for the due
and prompt payment and performance when due (whether at the stated maturity, by
acceleration, or otherwise) by the undersigned of all of its present and future
Obligations, the undersigned hereby grants, to the Agent, its successors and
assigns, for the ratable benefit of the applicable Secured Parties, a security
interest (the “Security Interest”) in and continuing lien upon and right of
set-off against, on all personal property, assets and undertakings of the
undersigned, including, without limitation, all of the undersigned’s right,
title and interest in or to any and all of the following properties and assets
of the undersigned and powers and rights of the undersigned in all of the
following (including the power to transfer rights in the following), whether now
owned or existing or at any time hereafter acquired or arising, regardless of
where located (collectively, the “Collateral”):

 

(i)                                     all Accounts;

 

(ii)                                  all Inventory, including all Rental
Equipment;

 

(iii)                               all leases of Goods (whether or not in the
form of a lease agreement), including all Leases;

 

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

 

(iv)                              all documentation evidencing rights in any
Inventory or Equipment, including all certificates, and other collateral
instruments;

 

(v)                                 all contract rights, including contract
rights in respect of any Like-Kind Exchange;

 

(vi)                              all Chattel Paper;

 

(vii)                           all Documents;

 

(viii)                        all Instruments;

 

(ix)                              all Intangibles (as such term is defined in
the PPSA);

 

(x)                                 all Goods (excluding “Consumer Goods” as
such term is defined in the PPSA);

 

(xi)                              all Equipment;

 

(xii)                           all Investment Property;

 

(xiii)                        all money, cash, cash equivalents, securities and
other property of any kind of the undersigned held directly or indirectly by the
Agent, any Lender or any of their Affiliates;

 

(xiv)                       all of the undersigned’s Material Accounts, credits,
and balances with and other claims against the Agent or any Lender or any of
their Affiliates or any other financial institution with which the undersigned
maintains deposits, including all Payment Accounts;

 

(xv)                          all books, records and other property related to
or referring to any of the foregoing, including books, records, account ledgers,
data processing records, computer software and other property;

 

(xvi)                       all accessions to, substitutions for and
replacements, products and proceeds of any of the foregoing, including, but not
limited to, proceeds of any insurance policies, claims against third parties,
and condemnation or requisition payments with respect to all or any of the
foregoing;

 

provided, however, the “Collateral” shall not include any asset that is an
Excluded Asset.

 

(b)                                 All of the Obligations of each respective
undersigned shall be secured by all of the Collateral of the undersigned and any
other property of the undersigned that secures any of the Secured Obligations.

 

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

 

SECTION 2.  Representations and Warranties.  (a)  The undersigned represents and
warrants to the Agent and the other Secured Parties that as of the date hereof: 
(i) Schedule I hereto identifies (A) the undersigned’s name as of the date
hereof as it appears in official filings in the state or other jurisdiction of
its incorporation or other organization, (B) the type of entity of the
undersigned (including corporation, partnership, limited partnership or limited
liability company), (C) the organizational identification number issued by the
undersigned’s state, province or territory of incorporation or organization or a
statement that no such number has been issued, and (D) the jurisdiction in which
the undersigned is incorporated or organized; and (ii) the undersigned has only
one state, province or territory of incorporation or organization.

 

(b)                                 The undersigned hereby makes each other
representation and warranty set forth in the Security Agreement with respect to
itself and the Collateral owned by it.  The undersigned hereby represents and
warrants to the Agent and the other Secured Parties that the attached Schedule
II contains all information with respect to itself and the Collateral owned by
it that is required to be set forth in Schedule II to the Security Agreement
with respect to the Grantors and their Collateral.

 

(c)                                  The undersigned hereby makes each
representation and warranty set forth in the Credit Agreement that is made with
respect to any Canadian Obligor.

 

SECTION 3.  Obligations Under the Security Agreement.  The undersigned hereby
agrees, as of the date first above written, to be bound as a Grantor by all of
the terms and provisions of the Security Agreement to the same extent as each of
the other Grantors.  The undersigned further agrees, as of the date first above
written, that each reference in the Security Agreement to an “Additional
Grantor” or a “Grantor” shall also mean and be a reference to the undersigned,
that each reference to the “Collateral” or any part thereof shall also mean and
be a reference to the undersigned’s Collateral or part thereof, as the case may
be, and that each reference in the Security Agreement to a Schedule shall also
mean and be a reference to the schedules attached hereto.

 

SECTION 4.  Obligations under the Credit Agreement.  The undersigned hereby
agrees, as of the date first above written, to be bound as an Obligor, Canadian
Obligor, Guarantor and Canadian Guarantor by all of the terms and provisions of
the Credit Agreement to the same extent as though the undersigned were a party
to the Credit Agreement in each such capacity from and after the date hereof. 
The undersigned further agrees, as of the date first above written, that each
reference in the Credit Agreement to an “Obligor” or a “Canadian Obligor” or a
“Guarantor” or “Canadian Guarantor”  shall also mean and be a reference to the
undersigned.

 

SECTION 5.  Governing Law.  This Security Agreement Supplement shall be governed
by, and construed in accordance with, the laws of the Province of Ontario and
the federal laws of Canada applicable therein.

 

(signature pages follow)

 

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Very truly yours,

 

 

 

[NAME OF ADDITIONAL GRANTOR]

 

 

 

 

By

 

 

 

Title:

 

 

 

 

 

 

 

 

Address for notices:

 

 

 

 

 

 

 

 

 

 

 

 

 

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SCHEDULE I
to
AGREEMENT

 

JURISDICTIONS OF ORGANIZATION

 

Grantor

 

State/Province of
Organization

 

Type of Entity

 

Organizational I.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SCHEDULE II
to
AGREEMENT

 

PATENTS, TRADEMARKS AND COPYRIGHTS

 

Trademarks:

 

Grantor

 

Country

 

Trademark

 

Application or
Registration No.

 

Filing Date

 

Registration
Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patents:

 

Grantor

 

Country

 

Title

 

Application
or Patent No.

 

Filing
Date

 

Issue
Date

 

Assignees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Copyrights:

 

Grantor

 

Country

 

Copyright

 

Application or
Registration No.

 

Filing Date

 

Registration
Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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