Exhibit 4.5.13


 


HERTZ CANADA LIMITED


 


as Obligor


 


and


 


BNP PARIBAS (CANADA)


 


as Security
Agent


 






 


SECURITY AGREEMENT


 


December 21,  2005


 






 


STIKEMAN ELLIOTT LLP


 

















 


SECURITY AGREEMENT


 


Security Agreement dated as of December 21,
2005 and made by Hertz Canada Limited, to and in favour of BNP Paribas (Canada)
as Security Agent for the benefit of the Finance Parties and the Euro MTN
Secured Parties.


 


RECITALS:


 


(a)           The Finance Parties have agreed to make
certain credit facilities available to the Obligor on the terms and conditions
contained in the Facilities Agreement; and


 


(b)           It is a condition precedent to the extension
of credit to the Obligor under the Facilities Agreement that the Obligor
execute and deliver this Agreement in favour of the Security Agent as security
for the Secured Obligations.


 


In consideration of the foregoing and other
good and valuable consideration, the receipt and adequacy of which are
acknowledged, the Obligor agrees as follows.


 


ARTICLE 1

INTERPRETATION


 


Section 1.1            Defined
Terms.


 


As used in this Agreement, the following
terms have the following meanings:


 


“ABL Facility” means (i) the credit agreement dated on or about the date
hereof among, inter alia, Hertz
Equipment Rental Corporation, The Hertz Corporation, Matthews Equipment (as
defined below) and Western Shut-Down (1995) Ltd., as borrowers, and Deutsche
Bank AG, as administrative agent, and the other financial parties thereto as
lenders, and (ii) the other loan and security documentation relating to
such credit agreement.


 


“Agreement” means this security agreement.


 


“Collateral” has the meaning specified in Section 2.1.


 


“Euro  MTNs” means the Euro Medium-Term Notes of
Hertz Finance Centre PLC and/or The Hertz Corporation, issued and outstanding
on the date hereof pursuant to the Euro MTN Fiscal Agency Agreement.


 


“Euro MTN Fiscal
Agency Agreement” means the Amended and Restated Fiscal Agency
Agreement, dated as of July 16, 2004, among The Hertz Corporation, Hertz
Finance Centre PLC, JPMorgan Chase Bank and J.P. Morgan Bank Luxembourg S.A.


 

















 


“Euro MTN Secured
Parties” means any persons who are entitled to, or are the
beneficiaries of, any of the benefits in respect of the Euro MTN Obligations.


 


“Euro MTN
Obligations” means all obligations, if any, of the Obligor under the
Euro MTNs and the Euro MTN Fiscal Agency Agreement, and any obligations of the
Obligor under the Finance Documents for the benefit of the holders of the Euro
MTNs, whether for principal, interest (including interest, which but for the
filing of a petition in bankruptcy with respect to the Obligor, would have
accrued on any Euro MTN Obligation, whether or not a claim is allowed against
the Obligor for such interest in the related bankruptcy proceeding), fees,
expenses, indemnification or otherwise.


 


“Facilities Agreement”
means the senior bridge facilities agreement dated on or about the date hereof,
among, inter alia, the Parent,
the Original Borrowers, the Original Guarantors, the Mandated Lead Arrangers,
the Co-Arranger, the Joint Bookrunners, the Facility Agent, the Global
Coordinator and the Banks, as the same may be amended, modified, extended,
renewed, replaced, restated, supplemented or refinanced from time to time and
includes any agreement extending the maturity of, refinancing or restructuring
all or any portion of, the indebtedness under such agreement or any successor
agreements, whether or not with the same Facility Agent, Arrangers or Banks.


 


“Governmental Entity”
means any international tribunal, agency, body commission or other authority,
any government, executive, parliament, legislature or local authority, or any
governmental entity, ministry, department or agency or regulatory authority,
court, tribunal, commission or board of or within Canada, or any other foreign
jurisdiction, or any political subdivision of any thereof or any authority
having jurisdiction therein or any quasi governmental or private body
exercising any regulatory, expropriation or taxing authority under or for the
account of any of the above.


 


“Intellectual Property” means domestic and foreign: (i) patents, applications for patents
and reissues, divisions, continuations, renewals, extensions and
continuations-in-part of patents or patent applications; (ii) proprietary and
non-public business information, including inventions (whether patentable or
not), invention disclosures, improvements, discoveries, trade secrets,
confidential information, know-how, methods, processes, designs, technology,
technical data, schematics, formulae and customer lists, and documentation
relating to any of the foregoing; (iii) copyrights, copyright registrations and
applications for copyright registration; (iv) mask works, mask work
registrations and applications for mask work registrations; (v) designs, design
registrations, design registration applications and integrated circuit
topographies; (vi) trade names, business names, corporate names, domain names,
website names and world wide web addresses, common law trade-marks, trade-mark
registrations, trade mark applications, trade dress and


 


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logos, and the goodwill associated with any of the
foregoing; (vii) computer software and programs (both source code and object
code form), all proprietary rights in the computer software and programs and
all documentation and other materials related to the computer software and
programs; and (viii) any other intellectual property and industrial property.


 


“Instruments” means (i) a bill, note or cheque within the meaning of the Bills of  Exchange
Act (Canada) or any other writing that evidences a right to the
payment of money and is of a type that in the ordinary course of business is
transferred by delivery with any necessary endorsement or assignment, or (ii) a
letter of credit and an advice of credit if the letter or advice states that it
must be surrendered upon claiming payment thereunder, or (iii) chattel paper or
any other writing that evidences both a monetary obligation and a security
interest in or a lease of specific goods, or (iv) documents of title or any other
writing that purports to be issued by or addressed to a bailee and purports to
cover such goods in the bailee’s possession as are identified or fungible
portions of an identified mass, and that in the ordinary course of business is
treated as establishing that the Person in possession of it is entitled to
receive, hold and dispose of the document and the goods it covers, or (v) any
document or writing commonly known as an instrument.


 


“Matthews Equipment”
means Matthews Equipment Limited, a corporation amalgamated and existing under
the laws of the Province of Ontario.


 


“Obligor” means Hertz Canada Limited, a corporation incorporated and existing
under the laws of the Province of Ontario, and its successors and permitted
assigns.


 


“Person”
means a natural person, partnership, joint stock company, trust, unincorporated
association, joint venture or other entity, Governmental Entity, and pronouns
have a similarly extended meaning.


 


“Registrable Intellectual Property” means any Intellectual Property in respect of which ownership,
title, security interests, charges or encumbrances are capable of registration,
recording or notation with any Governmental Entity pursuant to applicable laws.


 


“Restricted Asset” has the meaning specified in Section 2.4(1).


 


“Secured Liabilities”
means all present and future obligations and liabilities (whether actual or
contingent and whether owed jointly or severally or in any other capacity
whatsoever) of the Obligor to the Finance Parties (or any of them) under the
Finance Documents (or any of them).


 


“Secured Obligations” has the meaning specified in Section 2.2(a).


 


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“Securities” means:


 


(a)           a document that is (i) issued in bearer,
order or registered form, (ii) of a type commonly dealt in upon securities
exchanges or markets or commonly recognized in any area in which it is issued
or dealt in as a medium for investment, (iii) one of a class or series or by
its terms is divisible into a class or series of documents, and (iv) evidence
of a share, participation or other interest in property or in any enterprise or
is evidence of an obligation of the issuer and includes an uncertificated
security; and


 


(b)           a share, participation or other interest in a
Person;


 


but excludes


 


(c)           any ULC Shares; and


 


(d)           any shares in the capital of Matthews
Equipment.


 


“Security Agent” means BNP Paribas (Canada) acting as Canadian security agent for
the Finance Parties and any successor Canadian security agent appointed under
the Facilities Agreement and its successors and permitted assigns.


 


“Security Interest” has the meaning specified in Section 2.2.


 


“ULC Shares” means shares in any unlimited company at any time owned or
otherwise held by the Obligor.


 


Section 1.2            Interpretation.


 


(1)           Terms defined in the Personal Property Security Act (Ontario)
and used but not otherwise defined in this Agreement have the same
meanings.  Capitalized terms used in this
Agreement but not defined have the meanings given to them in the Facilities
Agreement.


 


(2)           Any reference in any
Finance Document to Encumbrances permitted by the Facilities Agreement and any
right of the Obligor to create or suffer to exist Encumbrances permitted by the
Facilities Agreement are not intended to and do not and will not subordinate
the Security Interest to any such Encumbrance or give priority to any Person
over the Finance Parties.


 


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


 


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


 


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


 


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


 


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


 


ARTICLE 2

SECURITY


 


Section 2.1            Grant
of Security.


 


Subject to Section 2.4, the Obligor
grants to the Security Agent, for the benefit of the Finance Parties, a
security interest in, and assigns, mortgages, charges, hypothecates and pledges
to the Security Agent, for the benefit of the Finance Parties and the Euro MTN
Secured Parties, all of the property and undertaking of the Obligor now owned
or hereafter acquired and all of the property and undertaking in which the
Obligor now has or hereafter acquires any interest (collectively, the “Collateral”) including all of the
Obligor’s:


 


(a)           present and after-acquired personal property;


 


(b)           inventory including Core Country Fleet and
other goods held for sale, lease or resale, goods furnished or to be furnished
to third parties under contracts of lease, consignment or service, goods which
are raw materials or work in process, goods used in or procured for packing and
materials used or consumed in the business of the Obligor;


 


(c)           equipment, machinery, furniture, fixtures,
plant, vehicles and other goods of every kind and description and all licences
and other rights and all related records, files, charts, plans, drawings,
specifications, manuals and documents;


 


(d)           accounts due or accruing (including all
Vehicle Manufacturer Receivables, Vehicle Dealer Receivables, Rebate
Receivables, Insurance Receivables and VAT Receivables) and all related
agreements, books,


 


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accounts, invoices, letters, documents and papers recording, evidencing
or relating to them;


 


(e)           money, documents of title and chattel paper;


 


(f)            Instruments and Securities, including the
Instruments and Securities listed in Schedule       ;


 


(g)           intangibles including all security interests,
goodwill, choses in action, contracts, contract rights, licenses and other
contractual benefits (including those under any Buy-Back Agreements, Designated
Obligor Intercompany Loan Agreement and Designated Obligor Charge;


 


(h)           Intellectual Property including the
Registrable Intellectual Property listed in Schedule       ;


 


(i)            all substitutions and replacements of and
increases, additions and, where applicable, accessions to the property
described in Section 2.1(a) through Section 2.1(h) inclusive; and


 


(j)            all proceeds in any form derived directly or
indirectly from any dealing with all or any part of the property described in
Section 2.1(a) through Section 2.1(i) inclusive, including the
proceeds of such proceeds,


 


Section 2.2            Secured
Obligations.


 


The security interest, assignment,
mortgage, charge, hypothecation and pledge granted by this Agreement (collectively,
the “Security Interest”) secures
the payment and performance of:


 


(a)           (i) the Secured Liabilities, and (ii)
all Euro MTN Obligations (collectively, the “Secured Obligations”); and


 


(b)           For greater certainty, the Secured
Obligations shall include all expenses, costs and charges incurred by or on
behalf of the Finance Parties in connection with this Agreement, the Security
Interest or the Collateral, including all legal fees, court costs, receiver’s
or agent’s remuneration and other expenses of taking possession of, repairing,
protecting, insuring, preparing for disposition, realizing, collecting,
selling, transferring, delivering or obtaining payment for the Collateral, and
of taking, defending or participating in any action or proceeding in connection
with any of the foregoing matters or otherwise in connection with the Finance
Parties’ interest in any


 


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Collateral, whether or not directly relating to the enforcement of this
Agreement or any other Finance Document (collectively, the “Expenses”).


 


Section 2.3            Attachment.


 


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


 


(2)           If any Securities or
Instruments are now or at any time become evidenced, in whole or in part, by
uncertified securities registered or recorded in records maintained by or on
behalf of the issuer thereof in the name of a clearing agency or a custodian or
of a nominee of either, the Obligor will, at the request of the Security Agent,
cause an appropriate entry to be made in the records of the clearing agency or
custodian to record the interest of the Security Agent in such Securities or
Instruments created pursuant to this Agreement.


 


(3)           The Obligor shall deliver
to and deposit with the Security Agent any and all certificates evidencing the
Securities listed in Schedule       , each accompanied by a stock power duly endorsed in blank for
transfer.  The Obligor shall also deliver
to and deposit with the Security Agent the Instruments listed in Schedule       .


 


(4)           If the Obligor acquires any
Securities or any Instruments, the Obligor will notify the Security Agent in
writing and provide the Security Agent with a revised Schedule A recording the
acquisition and particulars of such Instruments or Securities within 15 days
after such acquisition.  Upon request by
the Security Agent, the Obligor will promptly deliver to and deposit with the
Security Agent any such Securities or Instruments as security for the Secured
Obligations, each accompanied by a stock transfer power of attorney duly
endorsed in blank for transfer.  The Obligor
will also promptly inform the Security Agent in writing of the acquisition by
the Obligor of any ULC Shares.


 


(5)           At the request of the
Security Agent, the Obligor will (i) cause the transfer of any Securities or
Instruments to the Security Agent to be registered wherever such registration
may be required or advisable in the reasonable opinion of the Security Agent,
(ii) duly endorse any such Securities or Instruments for transfer in blank or
register them in the name of the Security Agent or its nominee or otherwise as
the Security Agent may reasonably direct, and (iii) immediately deliver to the
Security Agent any and all consents or other


 


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documents which may be necessary to effect
the transfer of any such Securities or Instruments to the Security Agent or any
third party.


 


(6)           The Obligor will promptly
notify the Security Agent in writing of the acquisition by the Obligor of any
Registrable Intellectual Property.  The
Obligor will provide the Security Agent with a revised Schedule recording the
acquisition and particulars of such additional Intellectual Property.


 


Section 2.4            Scope
of Security Interest.


 


(1)           To the extent that an
assignment of amounts payable and other proceeds arising under or in connection
with, or the grant of a security interest in any agreement, licence, permit or
quota of the Obligor would result in the termination of such agreement,
licence, permit or quota (each, a “Restricted
Asset”), the Security Interest with respect to each Restricted Asset
will constitute a trust created in favour of the Security Agent, for the
benefit of the Finance Parties, pursuant to which the Obligor holds as trustee
all proceeds arising under or in connection with the Restricted Asset in trust
for the Security Agent, for the benefit of the Finance Parties, on the
following basis:


 


(a)           subject to the Facilities Agreement, until
the Security Interest is enforceable the Obligor is entitled to receive all
such proceeds; and


 


(b)           whenever the Security Interest is
enforceable, (i) all rights of the Obligor to receive such proceeds cease and
all such proceeds will be immediately paid over to the Security Agent for the
benefit of the Finance Parties, and (ii) the Obligor will take all actions
requested by the Security Agent to collect and enforce payment and other rights
arising under the Restricted Asset.


 


The Obligor will use all commercially
reasonable efforts to obtain the consent of each other party to any and all
Restricted Assets to the assignment of such Restricted Asset to the Security
Agent in accordance with this Agreement. 
The Obligor will also use all commercially reasonable efforts to ensure
that all agreements entered into on and after the date of this Agreement
expressly permit assignments of the benefits of such agreements as collateral
security to the Security Agent in accordance with the terms of this Agreement.


 


(2)           The Security Interest with
respect to trade-marks constitutes a security interest in, and a charge,
hypothecation and pledge of, such Collateral in favour of the Security Agent
for the benefit of the Finance Parties, but does not constitute an assignment
of such Collateral to the Security Agent or any Finance Party.


 


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(3)           Until the Security Interest
is enforceable, the grant of the Security Interest in the Intellectual Property
does not affect in any way the Obligor’s rights to commercially exploit the
Intellectual Property, defend it, enforce the Obligor’s rights in it or with respect
to it against third parties in any court or claim and be entitled to receive
any damages with respect to any infringement of it.


 


(4)           The Security Interest does
not extend to consumer goods or ULC Shares.


 


(5)           The Security Interest does
not extend or apply to the last day of the term of any lease or sublease of
real property or any agreement for a lease or sublease of real property, now
held or hereafter acquired by the Obligor, but the Obligor will stand possessed
of any such last day upon trust to assign and dispose of it as the Security
Agent may reasonably direct.


 


Section 2.5            Grant
of Licence to Use Intellectual Property.


 


At such time as the Security Agent is
lawfully entitled to exercise its rights and remedies under Article 3, the
Obligor grants to the Security Agent an irrevocable, nonexclusive licence
(exercisable without payment of royalty or other compensation to the Obligor)
to use or sublicense or to assign any Intellectual Property in which the
Obligor has rights wherever the same may be located, including in such licence
access to (i) all media in which any of the licensed items may be recorded or
stored, and (ii) all software and computer programs used for compilation or
print-out.  The license granted under
this Section is to enable the Security Agent to exercise its rights and
remedies under Article 3 and for no other purpose.


 


Section 2.6            Care
and Custody of Collateral.


 


(1)           The Finance Parties have no
obligation to keep Collateral in their possession identifiable.


 


(2)           The Security Agent may,
upon the occurrence and continuance of an Event of Default, (i) notify any
Person obligated on an Instrument, Security or account to make payments to the
Security Agent, whether or not the Obligor was previously making collections on
such accounts, chattel paper or instruments, and (ii) assume control of any
proceeds arising from the Collateral. 
For greater certainty, except where it is a condition for the charge of
any such Instrument, Security or account to be valid and enforceable, the
Obligor shall not be required to notify any Person who is party to any such
Instrument, Security or account that has been charged hereunder that such
Instrument, Security or account has been so charged (prior to enforcement of
the Security Interest) so long as the Parent notifies the Security Agent in
writing that, in the reasonable opinion of the Parent, such notification would
be likely to materially prejudice the relationship the Obligor has with such
Person.


 


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(3)           The Security Agent has no
obligation to collect dividends, distributions or interest payable on, or
exercise any option or right in connection with, any Securities or
Instruments.  The Security Agent has no
obligation to protect or preserve any Securities or Instruments from
depreciating in value or becoming worthless and is released from all
responsibility for any loss of value.  In
the physical keeping of any Securities, the Security Agent is only obliged to
exercise the same degree of care as it would exercise with respect to its own
Securities kept at the same place.


 


Section 2.7            Rights
of the Obligor.


 


(1)           Until the occurrence of an
Event of Default which is continuing, the Obligor is entitled to (i) vote
the Securities that are part of the Collateral provided that, the Obligor shall
not be entitled to vote, or otherwise permit or agree to any (a) variation
of any rights attaching to or conferred by any of the Securities,
(b) increase the issued capital of the entity whose securities are pledged
hereunder, which in either case for (a) and (b) above, would, in the reasonable
opinion of the Security Agent, prejudice the ability of the Security Agent or
the Finance Parties to enforce the Security Interest, and (ii) to receive
all dividends and distributions on such Securities.  In order to allow the
Obligor to vote any Securities registered in the Security Agent’s name or the
name of its nominee, at the request and the expense of the Obligor, the
Security Agent will, prior to the Security Interest being enforceable, and may,
after the Security Interest is enforceable, execute valid proxies appointing
proxyholders to attend and act at meetings of shareholders, and execute
resolutions in writing, all pursuant to the relevant provisions of the issuer’s
governing legislation.  Upon the occurrence and during the
continuance of an Event of Default, all rights of the Obligor to vote (under
any proxy given by the Security Agent (or its nominee) or otherwise) or to
receive distributions or dividends cease and all such rights become vested
solely and absolutely in the Security Agent.


 


(2)           Any distributions or
dividends received by the Obligor contrary to Section 2.7(1) or any other
moneys or property received by the Obligor after the Security Interest is
enforceable will be received as trustee for the Security Agent and the Finance
Parties and shall be immediately paid over to the Security Agent.


 


Section 2.8            Broad
Security Registrations.


 


With respect to the personal property
security registrations made by DaimlerChrysler Canada Inc., General Motors
Acceptance Corp., General Motors Acceptance Corporation of Canada Limited,
General Electric Capital Leaseholder LDA, GMAC Leaseco Limited, Ricoh Canada
Inc., Kal Tire A Corporate Partnership, General Electric Capital Canada Inc.,
Westminster Toyota Ltd., Xerox Canada Ltd.,


 


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MacPhee Pontiac Buick GMC Ltd., Carroll South Shore
Motors Inc., Carroll Pontiac Buick Limited, Forbes Chevrolet Oldsmobile
Cadillac, National Leasing Group Inc., 3041518 Nova Scotia Limited and The Bank
of Nova Scotia prior to the date hereof against the Obligor in any jurisdiction
in Canada, the Obligor shall, within thirty (30) days from the date hereof use
commercially reasonable efforts to either, (a) cause financing change
statements to be filed in the applicable public offices to limit such
registrations to the security interest and collateral to which they relate, or
(b) obtain estoppel certificates or confirmations from the applicable
secured parties, in form and substance satisfactory to the Security Agent,
pursuant to which such secured parties confirm and limit such registrations to
the security interest and collateral to which they relate.


 


Section 2.9            Expenses.


 


The Obligor is liable for and will pay on
demand by the Security Agent any and all Expenses.


 


ARTICLE 3

ENFORCEMENT


 


Section 3.1            Enforcement.


 


The Security Interest shall be and become
enforceable against the Obligor upon the occurrence of an Event of Default
which is continuing and has not been waived under the Facilities Agreement and
which has resulted in the Facility Agent serving a notice under clause 23.16(a)
of the Facilities Agreement.


 


Section 3.2            Remedies.


 


Whenever the Security Interest is
enforceable, the Security Agent may realize upon the Collateral and enforce the
rights of the Security Agent and the Finance Parties by:


 


(a)           entry onto any premises where Collateral
consisting of tangible personal property may be located;


 


(b)           entry into possession of the Collateral by
any method permitted by law;


 


(c)           sale, grant of options to purchase, or lease
of all or any part of the Collateral;


 


(d)           holding, storing and keeping idle or
operating all or any part of the Collateral;


 


(e)           exercising and enforcing all rights and
remedies of a holder of the Securities and Instruments as if the Security Agent
were the absolute


 


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owner thereof (including, if necessary, causing the Collateral to be
registered in the name of the Security Agent or its nominee if not already
done);


 


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


 


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


 


(h)           license or sublicense, whether on an
exclusive or nonexclusive basis, any Intellectual Property for such term and on
such conditions and in such manner as the Security Agent in its sole judgment
determines (taking into account such provisions as may be necessary to protect
and preserve such Intellectual Property);


 


(i)            instruction to any bank which has entered
into a control agreement with the Security Agent to transfer all moneys,
Securities and Instruments held by such depositary bank to an account
maintained with or by the Security Agent;


 


(j)            application of any moneys constituting
Collateral or proceeds thereof in accordance with Section 5.11;


 


(k)           appointment by instrument in writing of a
receiver (which term as used in this Agreement includes a receiver and manager)
or agent of all or any part of the Collateral and removal or replacement from
time to time of any receiver or agent;


 


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


 


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


 


(n)           filing of proofs of claim and other documents
to establish claims to the Collateral in any proceeding relating to the
Obligor; and


 


(o)           any other remedy or proceeding authorized or
permitted under the Personal Property
Security Act (Ontario) or otherwise by law or equity.


 


Section 3.3            Additional
Rights.


 


In addition to the remedies set forth in
Section 3.2 and elsewhere in this Agreement, whenever the Security
Interest is enforceable, the Security Agent may:


 


(a)           require the Obligor, at the Obligor’s
expense, to assemble the Collateral at a place or places designated by notice
in writing and the Obligor


 


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agrees to so assemble the Collateral immediately upon receipt of such
notice;


 


(b)           require the Obligor, by notice in writing, to
disclose to the Security Agent the location or locations of the Collateral and
the Obligor agrees to promptly make such disclosure when so required;


 


(c)           require the Obligor to provide notice in
writing to any insurer respecting any insurance policy which has been assigned
and/or charged in favour of the Security Agent;


 


(d)           repair, process, modify, complete or
otherwise deal with the Collateral and prepare for the disposition of the
Collateral, whether on the premises of the Obligor or otherwise;


 


(e)           redeem any prior security interest against
any Collateral, procure the transfer of such security interest to itself, or
settle and pass the accounts of the prior mortgagee, chargee or encumbrancer
(any accounts to be conclusive and binding on Obligor);


 


(f)            pay any liability secured by any Encumbrance
against any Collateral (the Obligor will immediately on demand reimburse the
Security Agent for all such payments);


 


(g)           carry on all or any part of the business of
the Obligor and, to the exclusion of all others including the Obligor, enter
upon, occupy and use all or any of the premises, buildings, and other property
of or used by the Obligor for such time as the Security Agent sees fit, free of
charge, and the Security Agent and the Finance Parties are not liable to the
Obligor for any act, omission or negligence in so doing or for any rent,
charges, depreciation or damages incurred in connection with or resulting from
such action;


 


(h)           borrow for the purpose of carrying on the
business of the Obligor or for the maintenance, preservation or protection of
the Collateral and grant a security interest in the Collateral, whether or not
in priority to the Security Interest, to secure repayment;


 


(i)            commence, continue or defend any judicial or
administrative proceedings for the purpose of protecting, seizing, collecting,
realizing or obtaining possession or payment of the Collateral, and give good
and valid receipts and discharges in respect of the Collateral and compromise
or give time for the payment or performance of all or any part of the accounts
or any other obligation of any third party to the Obligor; and


 


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(j)            at any public sale, and to the extent
permitted by law on any private sale, bid for and purchase any or all of the
Collateral offered for sale and upon compliance with the terms of such sale,
hold, retain and dispose of such Collateral without any further accountability
to the Obligor or any other Person with respect to such holding, retention or
disposition, except as required by law. 
In any such sale to the Security Agent, the Security Agent may, for the
purpose of making payment for all or any part of the Collateral so purchased,
use any claim for Secured Obligations then due and payable to it as a credit
against the purchase price.


 


Section 3.4            Exercise
of Remedies.


 


The remedies under Section 3.2 and
Section 3.3 may be exercised from time to time separately or in
combination and are in addition to, and not in substitution for, any other
rights of the Security Agent and the Finance Parties however arising or
created.  The Security Agent and the
Finance Parties are not bound to exercise any right or remedy, and the exercise
of rights and remedies is without prejudice to the rights of the Security Agent
and the Finance Parties in respect of the Secured Obligations including the
right to claim for any deficiency.


 


Section 3.5            Receiver’s
Powers.


 


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


 


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


 


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


 


14

















 


Section 3.6            Appointment
of Attorney.


 


The Obligor hereby irrevocably constitutes
and appoints the Security Agent (and any officer of the Security Agent) the
true and lawful attorney of the Obligor. 
As the attorney of the Obligor, the Security Agent has the power to
exercise for and in the name of the Obligor with full power of substitution,
upon the occurrence and during the continuance of an Event of Default, any of
the Obligor’s right (including the right of disposal), title and interest in
and to the Collateral including the execution, endorsement, delivery and
transfer of the Collateral to the Security Agent, its nominees or transferees,
and the Security Agent and its nominees or transferees are hereby empowered to exercise
all rights and powers and to perform all acts of ownership with respect to the
Collateral to the same extent as the Obligor might do.  This power of attorney is irrevocable, is
coupled with an interest, has been given for valuable consideration (the
receipt and adequacy of which is acknowledged) and survives, and does not
terminate upon, the bankruptcy, dissolution, winding up or insolvency of the
Obligor.  This power of attorney extends
to and is binding upon the Obligor’s successors and permitted assigns.  The Obligor authorizes the Security Agent to
delegate in writing to another Person any power and authority of the Security
Agent under this power of attorney as may be necessary or desirable in the
opinion of the Security Agent, and to revoke or suspend such delegation.


 


Section 3.7            Dealing
with the Collateral.


 


(1)           The Security Agent and the
Finance Parties are not obliged to exhaust their recourse against the Obligor
or any other Person or against any other security they may hold in respect of
the Secured Obligations before realizing upon or otherwise dealing with the
Collateral in such manner as the Security Agent may consider desirable.


 


(2)           The Security Agent and the
Finance Parties may grant extensions or other indulgences, take and give up securities,
accept compositions, grant releases and discharges and otherwise deal with the
Obligor and with other Persons, sureties or securities as they may see fit
without prejudice to the Secured Obligations, the liability of the Obligor or
the rights of the Security Agent and the Finance Parties in respect of the
Collateral.


 


(3)           Except as otherwise
provided by law or this Agreement, the Security Agent and the Finance Parties
are not (i) liable or accountable for any failure to collect, realize or obtain
payment in respect of the Collateral, (ii) bound to institute proceedings for
the purpose of collecting, enforcing, realizing or obtaining payment of the
Collateral or for the purpose of preserving any rights of any Persons in
respect of the Collateral, (iii) responsible for any loss occasioned by any
sale or other dealing with the Collateral or by the retention


 


15

















 


of or failure to sell or otherwise deal
with the Collateral, or (iv) bound to protect the Collateral from depreciating
in value or becoming worthless.


 


Section 3.8            Standards
of Sale.


 


Without prejudice to the ability of the
Security Agent to dispose of the Collateral in any manner which is commercially
reasonable, the Obligor acknowledges that:


 


(a)           the Collateral may be disposed of in whole or
in part;


 


(b)           the Collateral may be disposed of by public
auction, public tender or private contract, with or without advertising and
without any other formality;


 


(c)           any assignee of such Collateral may be the
Security Agent, a Finance Party or a customer of any such Person;


 


(d)           any sale conducted by the Security Agent will
be at such time and place, on such notice and in accordance with such
procedures as the Security Agent, in its sole discretion, may deem
advantageous;


 


(e)           the Collateral may be disposed of in any
manner and on any terms necessary to avoid violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that the prospective bidders and
purchasers have certain qualifications, and restrict the prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of the Collateral) or in order to obtain any required approval of the
disposition (or of the resulting purchase) by any governmental or regulatory
authority or official;


 


(f)            a disposition of the Collateral may be on
such terms and conditions as to credit or otherwise as the Security Agent, in
its sole discretion, may deem advantageous; and


 


(g)           the Security Agent may establish an upset or
reserve bid or price in respect of the Collateral.


 


Section 3.9            Dealings
by Third Parties.


 


(1)           No Person dealing with the
Security Agent, any of the Finance Parties or an agent or receiver is required
to determine (i) whether the Security Interest has become enforceable, (ii)
whether the powers which such Person is purporting to exercise have become
exercisable, (iii) whether any money remains due to


 


16

















 


the Security Agent or the Finance Parties
by the Obligor, (iv) the necessity or expediency of the stipulations and
conditions subject to which any sale or lease is made, (v) the propriety or
regularity of any sale or other dealing by the Security Agent or any Finance
Party with the Collateral, or (vi) how any money paid to the Security Agent or
the Finance Parties has been applied.


 


(2)           Any bona fide purchaser of
all or any part of the Collateral from the Security Agent or any receiver or
agent will hold the Collateral absolutely, free from any claim or right of
whatever kind, including any equity of redemption, of the Obligor, which it
specifically waives (to the fullest extent permitted by law) as against any
such purchaser together with all rights of redemption, stay or appraisal which
the Obligor has or may have under any rule of law or statute now existing or
hereafter adopted.


 


Section 3.10         Registration
Rights.


 


If the Security Agent determines to
exercise its right to sell any or all of the Securities that are Collateral,
and if in the opinion of the Security Agent it is necessary or advisable to
have any such Securities:


 


(a)           qualified for distribution by prospectus
pursuant to the applicable securities legislation in any or all provinces and
territories of Canada, the Obligor will cause the issuer thereof to (i) use its
best efforts to file, and obtain a receipt from the applicable securities
regulatory authorities, for a preliminary and final prospectus offering for
sale such number of Securities as the Security Agent directs; and (ii) execute
and deliver, and cause the directors and officers of such issuer to execute and
deliver, all such certificates, instruments and documents, and do or cause to
be done all such other acts as may be, in the opinion of the Security Agent,
necessary or advisable to qualify such Securities for distribution by
prospectus pursuant to the applicable securities legislation in any or all
provinces of Canada; or


 


(b)           sold or registered under the provisions of
the U.S. Securities Act of 1933,
as amended, the Obligor will cause the issuer thereof to (i) execute and
deliver, and cause the directors and officers of such issuer to execute and
deliver, all such instruments and documents, and do or cause to be done all
such other acts as may be, in the opinion of the Security Agent, necessary or
advisable to register the Securities pledged hereunder, or that portion thereof
to be sold, under the provisions of the U.S.
Securities Act of 1933, as amended, (ii) use its best efforts to
cause the registration statement relating thereto to become effective and to
remain effective for a period of one year from the date of the first public
offering of the Securities pledged hereunder, or that


 


17

















 


portion thereof to be sold, and (iii) make all amendments thereto
and/or to the related prospectus which, in the opinion of the Security Agent,
are necessary or advisable, all in conformity with the requirements of the U.S. Securities Act of 1933, as amended,
and the rules and regulations applicable thereto.


 


The Obligor agrees to cause such issuer to comply with
the provisions of the securities legislation in effect in any or all of the
provinces of Canada, the U.S. Securities Act
of 1933, as amended, and the securities or “Blue Sky” laws of any
jurisdictions outside Canada, in each case, which the Security Agent
designates.


 


ARTICLE 4

REPRESENTATIONS, WARRANTIES AND COVENANTS


 


Section 4.1            General
Representations, Warranties and Covenants.


 


The Obligor represents and warrants and
covenants and agrees, acknowledging and confirming that the Security Agent and
each Finance Party is relying on such representations, warranties, covenants
and agreements, that:


 


(a)           Continuous Perfection.  Schedule
      
sets out the
Obligor’s place of business or, if more than one, the Obligor’s chief executive
office.  Such place of business or chief
executive office, as the case may be, has been located at such address for the
60 days immediately preceding the date of this Agreement.  Schedule        also sets out the address at
which the books and records of the Obligor are located, the address at which
senior management of the Obligor are located and conduct their deliberations
and make their decisions with respect to the business of the Obligor and the
address from which the invoices and accounts of the Obligor are issued.  The Obligor will not change the location of
any of these items, people or addresses without providing at least 30 days
prior written notice to the Security Agent. 
The Obligor will not change its name (including any French form of its
name) in any manner without providing at least 30 days prior written notice to
the Security Agent.


 


(b)           Securities and Instruments.


 


(i)            Schedule        lists all Securities and
Instruments owned or held by the Obligor on the date of this Agreement.


 


(ii)           Securities and Instruments that are
Collateral have been, where applicable, duly and validly issued and acquired
and are fully


 


18

















 


paid and non-assessable.  Schedule
       sets out, for each class of
Securities listed in the schedule, the percentage amount that such Securities
represent of all issued and outstanding Securities of that class.


 


(iii)          Except as described in Schedule       , no transfer restrictions apply
to the Securities and Instruments listed in Schedule        except for those described in Schedule
      . 
The Obligor has delivered to the Security Agent copies of all
shareholder, partnership or trust agreements applicable to each issuer of such
Securities and Instruments which are in the Obligor’s possession or control.


 


(iv)          No Person has or will have any written or oral
option, warrant, right, call, commitment, conversion right, right of exchange
or other agreement or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an option, warrant, right, call, commitment,
conversion right, right of exchange or other agreement to acquire any right or
interest in any of the Securities and Instruments that are Collateral.


 


(v)           The Securities and Instruments that are
Collateral constitute, where applicable, the legal, valid and binding obligation
of the obligor of such Securities and Instruments, enforceable in accordance
with their terms, subject only to any limitation under applicable laws relating
to (i) bankruptcy, insolvency, fraudulent conveyance, arrangement,
reorganization or creditors’ rights generally, and (ii) the discretion that a
court may exercise in the granting of equitable remedies.


 


(vi)          Such Securities and the proceeds from them
are not subject to any prior Encumbrance or any agreement purporting to grant
to any third party a Encumbrance on the property or assets of the Obligor which
would include the Securities other than Permitted Encumbrances.  The Security Agent is entitled to all the
rights, priorities and benefits afforded by the Personal Property Security Act (Ontario) or other relevant
personal property securities legislation as enacted in any relevant
jurisdiction to perfect security interests in respect of such Collateral.


 


(c)           Status of Accounts Collateral. 
The Obligor will maintain books and records pertaining to the Collateral
in such detail, form and scope as


 


19

















 


the Security Agent reasonably requires, and keep all originals of the
chattel paper which evidence accounts at locations specified on Schedule       . 
The Obligor will immediately notify the Security Agent if any account in
excess of $100,000 arises out of contracts with any Governmental Entity, and
execute any instruments and take any steps required by the Security Agent in
order that all moneys due or to become due under the contract are assigned to
the Security Agent and notice of such assignment is given to the Governmental
Entity.  The Obligor will also
immediately notify the Security Agent if any account is with an account debtor
located outside of Canada.


 


(d)           Additional Security Perfection and Protection of
Security Interest.  The Obligor will grant to the Security Agent,
for the benefit of the Finance Parties, security interests, assignments,
mortgages, charges, hypothecations and pledges in such property and undertaking
of the Obligor that is not subject to a valid and perfected first ranking
security interest (subject only to Permitted Encumbrances) constituted by the
Security Documents, in each relevant jurisdiction as determined by the Security
Agent.  The Obligor will perform all
acts, execute and deliver all agreements and documents and take such other
steps as are requested by the Security Agent at any time to register, file,
signify, publish, perfect, maintain, protect, and enforce the Security Interest
including: (i) executing, recording and filing of financing or other
statements, and paying all taxes, fees and other charges payable, (ii) placing
notations on its books of account to disclose the Security Interest, (iii)
delivering acknowledgements, confirmations and subordinations that may be
necessary to ensure that the Security Documents constitute a valid and
perfected first ranking security interest (subject only to Permitted
Encumbrances), and (iv) delivering opinions of counsel in respect of matters
contemplated by this paragraph.  The
documents and opinions contemplated by this paragraph must be in form and
substance satisfactory to the Security Agent.


 


(e)           Insurance.  The
Obligor shall use its reasonable best efforts to procure that the Security
Agent is named as an additional insured and first loss payee with respect to
each insurance policy maintained by the Obligor and by each of its affiliates.


 


20

















 


Section 4.2            Representations,
Warranties and Covenants Concerning Intellectual Property.


 


The Obligor represents and warrants and
covenants and agrees, acknowledging and confirming that the Security Agent and
each Finance Party is relying on such representations, warranties, covenants
and agreements, that:


 


(a)           Schedule        lists all Registrable
Intellectual Property that is owned by the Obligor on the date of this
Agreement.


 


(b)           All Registrable Intellectual Property of the
Obligor is valid, subsisting, unexpired and enforceable, has not been abandoned
and does not infringe the Intellectual Property rights of any other Person.


 


(c)           The Obligor will take all reasonable and
necessary steps, including in any proceeding before the Canadian Intellectual
Property Office or any similar Governmental Entity of any jurisdiction, to
maintain and pursue each application (and to obtain the relevant registration)
and to maintain each registration of the material Registrable Intellectual
Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.


 


(d)           In the event that any material Intellectual
Property of the Obligor is infringed, misappropriated or diluted by a third
party, the Obligor will (i) take such actions as the Obligor reasonably deems
appropriate under the circumstances to protect such Intellectual Property and
(ii) if such Intellectual Property is of material economic value, promptly
notify the Security Agent after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and
to recover any and all damages for such infringement, misappropriation or
dilution.


 


(e)           Immediately upon the request of the Security
Agent, the Obligor will furnish the Security Agent in writing the description
of all Registrable Intellectual Property or applications for Registrable
Intellectual Property of the Obligor. 
The Obligor will deliver to the Security Agent a copy of the certificate
of registration of, or application for, such Registrable Intellectual Property
with a Confirmation of Security Interest in the form of Schedule        in respect of such Registrable
Intellectual Property confirming the assignment for security of such
Registrable Intellectual Property to the Security Agent and immediately make
all such filings, registrations and recordings as are necessary or appropriate
to perfect the Security


 


21

















 


Interest granted to the Security Agent in the Registrable Intellectual
Property.


 


ARTICLE 5

GENERAL


 


Section 5.1            Notices.


 


Any notices, directions or other
communications provided for in this Agreement must be in writing and given in
accordance with the Facilities Agreement.


 


Section 5.2            Discharge.


 


(1)           The Security Interest shall
be discharged upon (i) the Secured Liabilities being discharged in full and
none of the Finance Parties being under any further actual or contingent
obligation to make Advances or provide other financial accommodations to the
Obligor or any other person under the Finance Documents, or (ii) the Obligor
ceasing to be both a Borrower and a Guarantor subject to, and in accordance
with, the Facilities Agreement; provided however, for greater certainty, that
if the Obligor has not become a Guarantor under the Facilities Agreement by the
time the Obligor ceases to be a Borrower under the Facilities Agreement,
assuming all other conditions to the discharge of the Security Interest have
been so satisfied, the Security Interest will be so discharged.  Upon discharge of the Security Interest and
at the request and expense of the Obligor, the Security Agent will execute and
deliver to the Obligor such financing statements and other documents or
instruments as the Obligor may reasonably require and the Security Agent will
redeliver to the Obligor, or as the Obligor may otherwise direct the Security
Agent, any Collateral in its possession.


 


(2)           In connection with (a) any Permitted Disposal of any Collateral, (b) any
sale or other disposition of any Collateral otherwise permitted by the
Facilities Agreement, (c) any sale or other disposition of any Collateral where
the Security Agent has consented to the disposal pursuant to the Facilities
Agreement, (d) any sale or any other disposition of any Collateral pursuant to
a merger, consolidation, reorganisation, winding-up, securitisation, Take-Out
Financing or sale and leaseback permitted by the Facilities Agreement to the
extent necessary to ensure such merger, consolidation, reorganisation,
winding-up, securitisation, Take-Out Financing or sale and leaseback take
place, or (e) the creation of any Encumbrance permitted by paragraph (w) of the
definition of Permitted Encumbrances in the Facilities Agreement, the Security
Agent shall, at the request and cost of the Obligor, release such Collateral,
provided that, (i) to the extent that the disposal of such Collateral is a
Permitted Disposal or a sale or disposition otherwise permitted by the


 


22

















 


Facilities
Agreement, such Collateral shall be declared to be automatically released from
the Security Interest hereof with effect from the day of such disposal and the
Security Agent shall do all such acts which are reasonably requested by the
Obligor in order to release such Collateral, and (ii) in the case of part
(e) of this Section 5.2(2), such release of such Collateral from the
Security Interest hereof shall not extend to any Collateral which forms part of
the A1 Borrowing Base, the A2 Borrowing Base or the C Borrowing Base.


 


(3)           In connection with security over Shareholder Subordinated Loans, in the
event that such a Shareholder Subordinated Loan is converted into share capital
or other equity interests of the Parent as permitted under the Facilities
Agreement, such Shareholder Subordinated Loan shall be declared to be
automatically released from the Security Interest hereof with effect from the
day of such conversion and the Security Agent shall do all such acts which are
reasonably requested by the Obligor in order to release such Shareholder Subordinated
Loan, provided that such release shall be contemporaneous with the granting of
a new Security Interest over such share capital or other equity interests of
the Parent in favour of the Security Agent (and the Finance Parties to the
extent required by applicable local law) on substantially the same terms as the
pledge of Securities herein.


 


Section 5.3            No
Merger, Survival of Representations and Warranties.


 


This Agreement does not operate by way of
merger of any of the Secured Obligations and no judgment recovered by the
Security Agent or any of the Finance Parties will operate by way of merger of,
or in any way affect, the Security Interest, which is in addition to, and not
in substitution for, any other security now or hereafter held by the Security Agent
and the Finance Parties in respect of the Secured Obligations.  The representations, warranties and covenants
of the Obligor in this Agreement survive the execution and delivery of this
Agreement and any advances under the Facilities Agreement.  Notwithstanding any investigation made by or
on behalf of the Security Agent or the Finance Parties the covenants,
representations and warranties continue in full force and effect.


 


Section 5.4            Further
Assurances.


 


The Obligor will do all acts and things and
execute and deliver, or cause to be executed and delivered, all documents and
instruments that the Security Agent may require and take all further steps
relating to the Collateral or any other property or assets of the Obligor that
the Security Agent may require for (i) protecting the Collateral, (ii)
perfecting the Security Interest, and (iii) exercising all powers, authorities
and discretions conferred upon the Security Agent.  After the Security Interest becomes
enforceable, the Obligor will do all acts and things and execute and deliver
all documents and instruments that the Security Agent may require for


 


23

















 


facilitating the sale or other disposition of the
Collateral in connection with its realization.


 


Section 5.5            Supplemental
Security.


 


This Agreement is in addition to, without
prejudice to and supplemental to all other security now held or which may
hereafter be held by the Security Agent or the Finance Parties.


 


Section 5.6            Successors
and Assigns.


 


This Agreement is binding on the Obligor,
its successors and assigns, and enures to the benefit of the Security Agent,
the Finance Parties and their respective successors and assigns.  This Agreement may be assigned by the
Security Agent without the consent of, or notice to, the Obligor, to such
Person as the Security Agent may determine and, in such event, such Person will
be entitled to all of the rights and remedies of the Security Agent as set
forth in this Agreement or otherwise.  In
any action brought by an assignee to enforce any such right or remedy, the
Obligor will not assert against the assignee any claim or defence which the
Obligor now has or may have against the Security Agent or any of the Finance
Parties.  The Obligor may not assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Security Agent which may be
unreasonably withheld.


 


Section 5.7            Amalgamation.


 


The Obligor acknowledges and agrees that in
the event it amalgamates with any other corporation or corporations, it is the
intention of the parties that the Security Interest (i) subject to
Section 2.4, extends to: (A) all of the property and undertaking that any
of the amalgamating corporations then owns, (B) all of the property and
undertaking that the amalgamated corporation thereafter acquires, (C) all of
the property and undertaking in which any of the amalgamating corporations then
has any interest and (D) all of the property and undertaking in which the
amalgamated corporation thereafter acquires any interest; and (ii) secures the
payment and performance of all debts, liabilities and obligations, present or
future, direct or indirect, absolute or contingent, matured or unmatured, at
any time or from time to time due or accruing due and owing by or otherwise
payable by each of the amalgamating corporations and the amalgamated
corporation to the Finance Parties in any currency, however or wherever
incurred, and whether incurred alone or jointly with another or others and whether
as principal, guarantor or surety and whether incurred prior to, at the time of
or subsequent to the amalgamation.  The
Security Interest attaches to the additional collateral at the time of
amalgamation and to any collateral thereafter owned or acquired by the
amalgamated corporation when such becomes owned or is acquired.  Upon any such amalgamation, the defined term “Obligor” means, collectively, each of the
amalgamating corporations and the amalgamated corporation, the defined term “Collateral” means all of the


 


24

















 


property and undertaking and interests described in
(i) above, and the defined term “Secured
Obligations” means the obligations described in (ii) above.


 


Section 5.8            Severability.


 


If any court of competent jurisdiction from
which no appeal exists or is taken, determines any provision of this Agreement
to be illegal, invalid or unenforceable, that provision will be severed from
this Agreement and the remaining provisions will remain in full force and
effect.


 


Section 5.9            Amendment.


 


This Agreement may only be amended,
supplemented or otherwise modified by written agreement executed by the
Security Agent (with the consent of the required Finance Parties as stipulated
by the Facilities Agreement) and the Obligor.


 


Section 5.10         Waivers,
etc.


 


(1)           No consent or waiver by the
Security Agent or the Finance Parties in respect of this Agreement is binding
unless made in writing and signed by an authorized officer of the Security
Agent (with the consent of the required Finance Parties as stipulated by the
Facilities Agreement).  Any consent or
waiver given under this Agreement is effective only in the specific instance
and for the specific purpose for which given. 
No waiver of any of the provisions of this Agreement constitutes a
waiver of any other provision.


 


(2)           A failure or delay on the
part of the Security Agent or the Finance Parties in exercising a right under
this Agreement does not operate as a waiver of, or impair, any right of the
Security Agent or the Finance Parties however arising.  A single or partial exercise of a right on
the part of the Security Agent or the Finance Parties does not preclude any
other or further exercise of that right or the exercise of any other right by
the Security Agent or the Finance Parties.


 


Section 5.11         Application
of Proceeds of Security.


 


All monies collected by the Security Agent
upon the enforcement of the Security Agent’s or the Finance Parties’ rights and
remedies under the Security Documents and the Encumbrances created by them
including any sale or other disposition of the Collateral, together with all
other monies received by the Security Agent and the Finance Parties under the
Security Documents, will be applied, following the application thereof to pay any
unsatisfied Euro MTN Obligations, as provided in the Intercreditor Deed.  To the extent any other Finance Document
requires proceeds of collateral under such Finance Document to be applied in
accordance with the provisions of this Agreement, the Security Agent or holder
under such other Finance Document shall apply such proceeds in accordance with
this Section.


 


25

















 


Section 5.12         Conflict.


 


In the event of any conflict between the provisions of
this Agreement and the provisions of the Facilities Agreement which cannot be
resolved by both provisions being complied with, the provisions contained in
the Facilities Agreement will prevail to the extent of such conflict.


 


Section 5.13         Governing
Law.


 


(1)           This Agreement will be
governed by, interpreted and enforced in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein.


 


(2)           The Obligor irrevocably
attorns and submits to the exclusive jurisdiction of any court of competent
jurisdiction of the Province of Ontario sitting in Toronto, Ontario in any
action or proceeding arising out of or relating to this Agreement.  The Obligor irrevocably waives objection to
the venue of any action or proceeding in such court or that such court provides
an inconvenient forum.  Nothing in this
Section limits the right of the Security Agent to bring proceedings against the
Obligor in the courts of any other jurisdiction.


 


(3)           The Obligor hereby
irrevocably consents to the service of any and all process in any such action
or proceeding by the delivery of copies of such process to the Obligor at 5403
Eglinton Avenue West, Etobicoke, Ontario, M9C 5K6.  Nothing in this Section affects the right of
the Security Agent to serve process in any manner permitted by law.


 


Section 5.14         Application
of Saskatchewan Law.


 


(1)           The Land Contracts (Actions) Act
(Saskatchewan) shall have no application to any action, as defined therein,
with respect to this Agreement.


 


(2)           The Limitation of Civil Rights Act (Saskatchewan)
shall have no application to (i) this Agreement, (ii) any mortgage, charge or
other security for the payment of money made, given or created by this
Agreement, (iii) any agreement or instrument renewing or extending or
collateral to this Agreement or any mortgage, charge or other security referred
to or mentioned in (ii) above, or (iv) the rights, powers or remedies of the
Security Agent under this Agreement or any mortgage, charge, other security,
agreement or instrument referred to or mentioned in (ii) or (iii) above.


 


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Section 5.15         English
Language.


 


The
parties to this Agreement have agreed that this Agreement as well as any
document or instrument relating to it be drawn up in English only but without
prejudice to any such document or instrument which may from time to time be
drawn up in French only or in both French and English.  Les parties aux présentes ont convenu que la
présente Convention ainsi que tous autres actes ou documents s’y rattachant
soient rédigés en anglais seulement mais sans préjudice à tous tels actes ou
documents qui pourraient à l’occasion être rédigés en français seulement ou à
la fois en anglais et en français.


 


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IN WITNESS WHEREOF the Obligor has executed
this Agreement.


 


 


	
   

  	
  HERTZ CANADA LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  



 


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