Exhibit 4.5.15


 


1677932 ONTARIO 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 1677932 Ontario
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
Hertz Canada Limited, as Canadian Borrower, on the terms and conditions
contained in the Facilities Agreement; and


 


(b)           It is
a condition precedent to the extension of credit to Hertz Canada Limited 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 1677932 Ontario 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 Hertz Canada
Limited 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            Expenses.


 


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


 


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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 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


 


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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 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;


 


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(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


 


(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.


 


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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.


 


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


 


14

















 


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 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;


 


15

















 


(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 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.


 


16

















 


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
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.


 


17

















 


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 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


 


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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 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.


 


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(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.


 


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


 


20

















 


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 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 under the
Finance Documents.  Upon discharge of the
Security Interest and at the request and expense of the 


 


21

















 


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 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.


 


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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 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.


 


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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 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.


 


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(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.


 


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


 


25

















 


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.


 


26

















 


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.


 


27

















 


IN WITNESS WHEREOF the Obligor has executed this Agreement.


 


 


	
   

  	
   

  	
  1677932 ONTARIO LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  /s/
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  



 


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