Exhibit 10.5


 


 


WILLIAMS SCOTSMAN OF CANADA, INC.


 


as Obligor


 


 


and


 


 


BANK OF
AMERICA, N.A.




as Collateral Agent


 


 


AMENDED AND RESTATED CANADIAN SECURITY AGREEMENT


 


June 28, 2005


 


 


DAVIES
WARD PHILLIPS & VINEBERG LLP


 





















 


TABLE OF
CONTENTS


 


	
   

  	
  ARTICLE 1

  INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Defined
  Terms

  	
   

  
	
  Section 1.2

  	
  Terms
  Incorporated by Reference

  	
   

  
	
  Section 1.3

  	
  Statutes

  	
   

  
	
  Section 1.4

  	
  Certain
  Phrases, etc.

  	
   

  
	
  Section 1.5

  	
  Gender and
  Number

  	
   

  
	
  Section 1.6

  	
  Headings,
  etc.

  	
   

  
	
  Section 1.7

  	
  Schedules

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 2

  SECURITY

  	
   

  
	
  Section 2.1

  	
  Grant of
  Security

  	
   

  
	
  Section 2.2

  	
  Obligations
  Secured

  	
   

  
	
  Section 2.3

  	
  Attachment

  	
   

  
	
  Section 2.4

  	
  Scope of
  Security Interest

  	
   

  
	
  Section 2.5

  	
  Grant of
  Licence to Use Intellectual Property

  	
   

  
	
  Section 2.6

  	
  Care and
  Custody of Collateral

  	
   

  
	
  Section 2.7

  	
  Rights of
  the Obligor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 3

  ENFORCEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Enforcement

  	
   

  
	
  Section 3.2

  	
  Remedies

  	
   

  
	
  Section 3.3

  	
  Additional
  Rights

  	
   

  
	
  Section 3.4

  	
  Receiver’s
  Powers

  	
   

  
	
  Section 3.5

  	
  Appointment
  of Attorney

  	
   

  
	
  Section 3.6

  	
  Dealing with
  the Collateral

  	
   

  
	
  Section 3.7

  	
  Standards of
  Sale

  	
   

  
	
  Section 3.8

  	
  Dealings by
  Third Parties

  	
   

  
	
  Section 3.9

  	
  Registration
  Rights

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 4

  REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  General
  Representations, Warranties and Covenants

  	
   

  
	
  Section 4.2

  	
  After
  Acquired Receivables

  	
   

  
	
  Section 4.3

  	
  Maintenance
  of Records for Receivables and Contracts

  	
   

  
	
  Section 4.4

  	
  Modification
  of Terms, etc.

  	
   

  
	
  Section 4.5

  	
  Collection

  	
   

  



 


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  Section 4.6

  	
  Obligor
  Remains Liable

  	
   

  
	
  Section 4.7

  	
  Collateral
  in the Possession of a Bailee

  	
   

  
	
  Section 4.8

  	
  Intellectual
  Property

  	
   

  
	
  Section 4.9

  	
  Representations
  and Warranties Concerning Trade-marks

  	
   

  
	
  Section 4.10

  	
  Trade-mark
  Licenses and Assignments

  	
   

  
	
  Section 4.11

  	
  Trade-mark
  Infringements

  	
   

  
	
  Section 4.12

  	
  Preservation
  of Trade-marks

  	
   

  
	
  Section 4.13

  	
  Maintenance
  of Trade-mark Registration

  	
   

  
	
  Section 4.14

  	
  Future
  Registered Trade-marks

  	
   

  
	
  Section 4.15

  	
  Representations
  and Warranties Concerning Patents, Copyrights and Designs

  	
   

  
	
  Section 4.16

  	
  Patent,
  Copyright and Design Licenses and Assignments

  	
   

  
	
  Section 4.17

  	
  Patent,
  Copyright and Design Infringements

  	
   

  
	
  Section 4.18

  	
  Maintenance
  of Patents, Copyrights and Designs

  	
   

  
	
  Section 4.19

  	
  Prosecution
  of Patent, Copyright and Design Applications

  	
   

  
	
  Section 4.20

  	
  Future
  Patents, Copyrights and Designs

  	
   

  
	
  Section 4.21

  	
  Remedies
  Concerning Intellectual Property

  	
   

  
	
  Section 4.22

  	
  Status of
  Accounts Collateral

  	
   

  
	
  Section 4.23

  	
  Business
  Outside Certain Jurisdictions

  	
   

  
	
  Section 4.24

  	
  Insurance

  	
   

  
	
  Section 4.25

  	
  Perfection
  and Protection of Security Interest

  	
   

  
	
  Section 4.26

  	
  Additional
  Security

  	
   

  
	
  Section 4.27

  	
  Financing
  Statements

  	
   

  
	
  Section 4.28

  	
  Deposit
  Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 5

  GENERAL

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Notices

  	
   

  
	
  Section 5.2

  	
  Discharge

  	
   

  
	
  Section 5.3

  	
  No Merger,
  Survival of Representations and Warranties

  	
   

  
	
  Section 5.4

  	
  Further
  Assurances

  	
   

  
	
  Section 5.5

  	
  Supplemental
  Security

  	
   

  
	
  Section 5.6

  	
  Successors
  and Assigns

  	
   

  
	
  Section 5.7

  	
  Severability

  	
   

  
	
  Section 5.8

  	
  Waivers, etc.

  	
   

  
	
  Section 5.9

  	
  Collateral
  Agent and/or Secured Creditors not a Partner or Limited Liability Company
  Member

  	
   

  
	
  Section 5.10

  	
  Application
  of Proceeds

  	
   

  
	
  Section 5.11

  	
  Indemnity

  	
   

  
	
  Section 5.12

  	
  Indemnity
  Obligations Secured by Collateral; Survival

  	
   

  
	
  Section 5.13

  	
  Collateral
  Agent

  	
   

  
	
  Section 5.14

  	
  Governing
  Law

  	
   

  
	
  Section 5.15

  	
  Conflicts

  	
   

  



 


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  Section 5.16

  	
  Acknowledgement
  and Confirmation

  	
   

  



 


ADDENDA


 


	
  SCHEDULE 2.1(1)(f)

  	
  SECURITIES AND
  INSTRUMENTS

  	
   

  
	
  SCHEDULE 2.1(1)(h)

  	
  INTELLECTUAL
  PROPERTY

  	
   

  
	
  SCHEDULE 4.1(a)

  	
  FORM OF
  CONFIRMATION OF SECURITY INTEREST IN INTELLECTUAL PROPERTY

  	
   

  
	
  EXHIBIT “A”
  TO CONFIRMATION TRADE-MARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS

  	
   

  
	
  SCHEDULE 4.1(c)

  	
  FINANCING
  STATEMENTS

  	
   

  
	
  SCHEDULE 4.1(d)

  	
  LOCATION OF
  CHIEF EXECUTIVE OFFICE AND CORPORATE MATTERS

  	
   

  
	
  SCHEDULE 4.1(e)

  	
  LOCATION OF INVENTORY AND EQUIPMENT

  	
   

  
	
  SCHEDULE 4.1(g)

  	
  TRADE NAMES

  	
   

  
	
  SCHEDULE 4.28

  	
  DEPOSIT
  ACCOUNTS

  	
   

  
	
  EXHIBIT “A”
  TO SCHEDULE 4.28 FORM OF CONTROL AGREEMENT REGARDING DEPOSIT
  ACCOUNTS

  	
   

  



 


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AMENDED
AND RESTATED CANADIAN SECURITY AGREEMENT


 


Amended and
restated security agreement dated as of March 26, 2002, amended and
restated as of August 18, 2003 and amended and restated as of June 28,
2005, made by Williams Scotsman of Canada, Inc.
(the “Obligor”), a corporation
incorporated and existing under the laws of the Province of Ontario, to and in
favour of Bank of America, N.A. (“BofA”),
as Collateral Agent for the benefit of the Secured Creditors (as defined
herein).


 


WHEREAS:


 


(a)           Williams
Scotsman International, Inc. (formerly known as Scotsman Holdings, Inc.)
(“Holdings”) and Williams Scotsman, Inc. (the “Borrower”), are parties to
a certain Credit Agreement, dated as of March 26, 2002, with the lenders
party thereto, Deutsche Bank Trust Company Americas (“DBTCA”), as
administrative agent, and certain other Persons, as amended by a First
Amendment, dated as of February 27, 2003, a Second Amendment, dated as of August 11,
2003, a Third Amendment, dated as of December 22, 2003, a Fourth
Amendment, dated as of September 24, 2004 and a Fifth Amendment, dated as
of April 15, 2005 (as so amended, the “Existing Credit Agreement”);


 


(b)           the
Borrower, Willscot Equipment, LLC, Space Master International, Inc., Truck &
Trailer Sales, Inc., Evergreen Mobile Company and the Senior Secured Notes
Trustee have entered into an Indenture, dated as of August 18, 2003 (as
amended, modified or supplemented from time to time, the “Senior Secured
Notes Indenture”), providing for (i) the issuance by the Borrower of
its 10% Senior Secured Notes due 2008 and all Senior Secured Notes issued upon
any exchange offer as contemplated in the Senior Secured Notes Indenture (the “Senior
Secured Notes”) to the holders thereof from time to time (the “Senior
Secured Noteholders” and, together with the Senior Secured Notes Trustee,
the “Second Lien Creditors” and, together with the First Lien Creditors,
the “Secured Creditors”) and (ii) the guaranty by the Guarantors
(as defined in the Senior Secured Notes Indenture) and the Subordinated
Guarantor (as defined in the Senior Secured Notes Indenture) of the Borrower’s
obligations under the Senior Secured Notes Indenture and the Senior Secured
Notes (each such guaranty, together with the Senior Secured Notes Indenture and
the Senior Secured Notes, are herein called the “Senior Secured Notes
Documents”);


 


(c)           pursuant
to the Canadian Subsidiaries Guaranty (as defined in the Existing Credit
Agreement), the Obligor has guaranteed to the First


 





















 


Lien Creditors the payment when due of all Guaranteed Obligations as
described therein;


 


(d)           the
Obligor and DBTCA, as the collateral agent entered into the Canadian Security
Agreement, dated as of March 26, 2002 and amended and restated as of August 18,
2003 (as amended, modified or supplemented through, but not including, the date
hereof, the “Original Canadian Security Agreement”), pursuant to which
the Obligor granted a security interest in the Collateral for the benefit of
the Secured Creditors under, and as defined in, the Original Canadian Security
Agreement;


 


(e)           it was
a condition precedent to the making of loans to, and the issuance of, and
participation in, letters of credit for the account of the Borrower under the
Existing Credit Agreement that the Obligor shall have executed and delivered to
the Collateral Agent (as defined therein) the Original Canadian Security
Agreement;


 


(f)            it
was a condition precedent to the issuance of the Senior Secured Notes by the
Borrower under the Senior Secured Notes Indenture that the Obligor shall have
executed and delivered the Original Canadian Security Agreement;


 


(g)           BofA
and DBTCA have purchased from the other lenders party to the Existing Credit
Agreement all of such lenders’ right, title and interest in and to the Existing
Credit Agreement and the documents and instruments executed and delivered in
connection therewith (with certain exceptions), all pursuant to a certain
Assignment and Assumption Agreement (the “Bank Assignment Agreement”),
dated as of the Effective Date, among BofA, DBTCA, the other lenders party to
the Existing Credit Agreement, the administrative agent and collateral agent
under the Existing Credit Agreement, the Borrower and Holdings, and which was
acknowledged and accepted therein, inter
alia, by the Obligor;


 


(h)           Holdings,
the Borrower, the financial institutions from time to time party thereto (the “Lenders”),
BofA, as Administrative Agent (together with any successor administrative
agent, the “Administrative Agent”), DBTCA, as Syndication Agent,
Citicorp USA, Inc., Wells Fargo Bank, N.A. and Lehman Commercial Paper
Inc., as Co-Documentation Agents, and Banc of America Securities LLC and
Deutsche Bank Securities Inc., as Co-Lead Arrangers and Joint Book Runners,
desire to amend and restate the Existing Credit Agreement in its entirety and
have entered into an Amended and Restated Credit Agreement, dated


 


2





















 


as of
the Effective Date, (as further amended, modified, extended, renewed, replaced,
restated or supplemented from time to time, and including any agreement or
agreements extending the maturity of, or refinancing or restructuring
(including, but not limited to, the inclusion of additional borrowers or
guarantors thereunder or any increase in the amount borrowed) all or any
portion of, the indebtedness under such agreement or any successor agreement or
agreements, whether or not with the same agent, trustee, representative,
lenders or holders, the “Amended and Restated  Credit Agreement”),
providing for the making of Loans and the issuance of, and participation in,
Letters of Credit for the account of the Borrower as contemplated therein (the
Lenders, each Issuing Lender, the Administrative Agent and its affiliates, the
Collateral Agent and each other Agent (as defined in the Amended and Restated
Credit Agreement) are herein called the “Bank Creditors”);


 


(i)            the
Borrower may from time to time be party to one or more interest rate agreements
(including, without limitation, interest rate swaps, caps, floors, collars, and
similar agreements) (collectively, the “Interest Rate Agreements”) with
BofA, any Lender, any affiliate thereof or a syndicate of financial
institutions organized by BofA or an affiliate of BofA (even if BofA or any
such Lender ceases to be a Lender under the Amended and Restated Credit Agreement
for any reason), and any institution that participates, and in each case their
subsequent assigns, in such Interest Rate Agreement (collectively, the “Interest
Rate Creditors”, and the Interest Rate Creditors together with the Bank
Creditors, collectively, the “First Lien Creditors”);


 


(j)            it is
a condition precedent to the amendment and restatement of the Existing Credit
Agreement as contemplated by the Amended and Restated Credit Agreement and to
the making of Loans to, and the issuance of, and participation in, Letters of
Credit for the account of the Borrower under the Amended and Restated Credit
Agreement, that the Original Canadian Security Agreement and the Canadian
Subsidiaries Guaranty be amended and restated in their entirety.


 


NOW, THEREFORE, in
consideration of the foregoing and the mutual agreements contained herein (the
receipt and adequacy of which are acknowledged), the parties hereto agree that
the Original Canadian Security Agreement be amended and restated in its
entirety as follows:


 


3





















 


ARTICLE 1

INTERPRETATION


 


Section 1.1            Defined Terms.


 


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


 


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


 


“Amended and
Restated Credit Agreement” has the meaning ascribed
thereto in the recitals of this security agreement.


 


“Applicable Value” means, with respect
to any Subsidiary of the Borrower, the aggregate amount, par value, book value
as carried by the Borrower or the market value, whichever is greater, of the
capital stock or other securities of such Subsidiary.


 


“Bank Assignment Agreement” has the meaning ascribed thereto
in the recitals of this security agreement.


 


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


 


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


 


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


 


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


 


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


 


4





















 


“Collateral” has the meaning ascribed thereto in Section 2.1(1).


 


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


 


“Confidential Information” means all trade secrets,
confidential information, proprietary information, and confidential know-how
including all unpatented inventions, all customer and supplier lists, all
unpublished studies and data, prototypes, drawings, design and construction
specifications and production, operating and quality control manuals, all
marketing strategies and business plans, all current or proposed business
opportunities, and all documents, material and media embodying other items of
Confidential Information.


 


“Contract Rights” means all rights of the Obligor (including
all Rentals and all other rights to payment) under each Contract.


 


“Contracts” means all contracts between the Obligor and one
or more additional parties (including any and all Interest Rate Agreements,
Leases, licensing agreements and any partnership agreements, joint venture
agreements and limited liability company agreements).


 


“Copyrights” means all copyrights, all registrations and
applications that have been or shall be made or filed in the Canadian
Intellectual Property Office - Copyrights or any similar office in any country
and all records thereof and all reissues, extensions or renewals thereof, and
all common law and other rights in the foregoing.


 


“Credit Document Obligations” has the meaning provided in the
definition of Obligations.


 


“Credit Documents” means the Amended and Restated Credit
Agreement and each other Credit Document under and as defined in the Amended
and Restated Credit Agreement.


 


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


 


“DBTCA” means Deutsche Bank Trust
Company Americas, formerly named Bankers Trust Company, and any successor
thereto and its permitted assigns.


 


“Default” means any event which, with notice or lapse of
time, or both, would constitute an Event of Default.


 


5





















 


“Designs” means all industrial designs and other designs and
all registrations and applications that have been or shall be made or filed in
the Canadian Intellectual Property Office – Designs or any similar office in
any country and all records thereof and all reissues, extensions or renewals thereof,
and all common law and other rights in the foregoing.


 


“Effective Date” means June 28, 2005.


 


“Event of Default” means any Event of Default (or similar
term) under, and as defined in, the Amended and Restated Credit Agreement or
any Interest Rate Agreement entered into with an Interest Rate Creditor and
shall in any event include (i) any payment default on any of the
Obligations (as defined in the respective agreements) under the Amended and
Restated Credit Agreement, any Interest Rate Agreement or any Senior Secured
Notes Document after the expiration of any applicable grace period and (ii) at
any time after the First Lien Obligations have been paid in full, all Letters
of Credit have been terminated or cash collateralized in a manner satisfactory
to the Administrative Agent and all Commitments have been terminated, any “Event
of Default” (or similar term) under, and as defined in, the Senior Secured
Notes Indenture.


 


“Existing Credit Agreement” has the meaning provided in the
recitals of this security agreement.


 


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


 


“First Lien Obligations” means all
Credit Document Obligations and all Interest Rate Obligations.


 


“Governmental Entity” means any (i) multinational,
federal, provincial, state, municipal, local or other government, governmental
or public department, central bank, court, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) any subdivision or authority of
any of the foregoing, or (iii) any quasi-governmental or private body
exercising any regulatory, expropriation or taxing authority under or for the
account of any of the above.


 


“Guarantee” means the guarantee dated March 26, 2002
made by the Obligor in favour of the First Lien Creditors and the Collateral
Agent, as amended and restated as of June 28, 2005 and as further amended,
modified, extended, restated or supplemented from time to time.


 


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


 


“Indemnitees” has the meaning ascribed thereto in Section 5.11(1).


 


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“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.


 


“Intellectual Property” has the meaning ascribed thereto in Section 2.1(1)(h).


 


“Intercreditor Agreement” means the
intercreditor agreement dated August 18, 2003 among the Collateral Agent,
the Administration Agent and the Senior Secured Notes Trustee as the same may
from time to time be amended, modified, restated or supplemented.


 


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


 


“Interest Rate Creditors” means, collectively, any Lender,
any affiliate thereof or a syndicate of financial institutions organized by
BofA or an affiliate of BofA (even if BofA or any such Lender subsequently
ceases to be a Lender under the Amended and Restated Credit Agreement for any
reason) and any institution that participates, and in each case their
subsequent assigns, in any Interest Rate Agreement with the Borrower.


 


“Interest Rate Obligations” has the meaning provided in the
definition of Obligations.


 


“Inventory” means (i) merchandise,
inventory and goods, and all additions, substitutions and replacements thereof
and all accessions thereto, wherever located, together with all goods,
supplies, incidentals, packaging materials, labels, materials and any other
items used or usable in manufacturing, processing, packaging or shipping same,
in all stages of production from raw materials through work in process to
finished goods, and all products and proceeds of whatever sort and wherever
located and any portion thereof which may be returned, rejected, reclaimed or
repossessed by the Collateral


 


7





















 


Agent from the
Obligor’s customers, and (ii) any and all other “inventory” as such term
is defined in the PPSA as in effect on the Effective Date.


 


“Leases” means any agreement between the Obligor and any
other Person for the lease or rental of Rental Equipment, Inventory or other
assets or property, whether (x) by the Obligor to such Person or
(y) by such Person to the Obligor.


 


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


 


“Licensed Trade-marks” has the meaning
ascribed thereto in Section 4.9.


 


“Lien” means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), security agreement
of any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the PPSA or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).


 


“Negotiable Collateral” has the meaning ascribed thereto in Section 2.3(3).


 


“Obligations” means:


 


(i)            the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including principal, premium, interest (including all interest
that accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency, reorganization or similar proceeding of
the Obligor at the rate provided for in the respective documentation, whether
or not a claim for post-petition interest is allowed in any such proceeding),
reimbursement obligations under Letters of Credit, fees, costs and indemnities)
of the Obligor owing to the Bank Creditors, now existing or hereafter incurred
under, arising out of or in connection with any Credit Document to which the
Obligor is a party (including all such obligations, liabilities and
indebtedness under the Guarantee) and the due performance and compliance by the
Obligor, with the terms, conditions and agreements of each such Credit Document
(all such obligations and liabilities under this paragraph (i), except to the
extent guaranteeing obligations of the Borrower under Interest Rate Agreements,


 


8





















 


being herein collectively called the “Credit Document Obligations”);


 


(ii)           the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including all interest that accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of the Obligor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) of the Obligor owing to the Interest Rate
Creditors, now existing or hereafter incurred under, arising out of or in
connection with any Interest Rate Agreement, whether such Interest Rate Agreement
is now in existence or hereafter arising, and the due performance and
compliance by the Obligor with all of the terms, conditions and agreements of
each Interest Rate Agreement including all obligations, liabilities and
indebtedness under the Guarantee (all such obligations and liabilities under
this paragraph (ii) being herein collectively called the “Interest Rate Obligations”);


 


(iii)          the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, indebtedness and
liabilities (including principal, premium and interest (including all interest
that accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency, reorganization or similar proceeding of
the Obligor at the rate provided for in the respective documentation, whether
or not a claim for post-petition interest is allowed in any such proceeding))
owing by the Obligor to the Second Lien Creditors, whether now existing or
hereafter incurred under, arising out of, or in connection with the Senior
Secured Notes and the other Senior Secured Notes Documents to which the Obligor
is a party (including all such obligations, indebtedness and liabilities of the
Obligor under any guaranty constituting a Senior Secured Notes Document) and
the due performance and compliance by the Obligor with all of the terms,
conditions and agreements contained in the Senior Secured Notes and in such
other Senior Secured Notes Documents (all such obligations, indebtedness and liabilities
under this clause (iii) being herein collectively called the “Second Lien Obligations”);


 


9





















 


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


 


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


 


(vi)          all amounts paid by an Indemnitee as to which such Indemnitee has
the right to reimbursement under Section 5.11 of this security agreement;
and


 


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


 


it being
acknowledged and agreed that the “Obligations”
shall include extensions of credit of the types described above,
whether outstanding on Effective Date or extended from time to time after the
Effective Date.


 


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


 


“Original Canadian Security Agreement” has the meaning provided in the recitals of this security agreement.


 


 “Owned Trade-marks” has the meaning ascribed thereto in Section 4.9.


 


“Patents” means all letters patent for an invention and all
registrations and applications that have been or shall be made or filed in the
Canadian Intellectual Property Office - Patents or any similar office in any
country and all records thereof and all renewals, reissues, extensions,
divisions, continuations and continuations-in-part thereof and any and all
resulting letters patent and all other rights in the foregoing.


 


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


 


“PPSA” has the meaning ascribed
thereto in Section 1.2.


 


10





















 


“Receivables” means, collectively:


 


(a)           any “account” as such term is defined in the Personal
Property  Security Act
(Ontario) as in effect on the Effective Date and any right to payment for goods
sold or leased or services performed whether now in existence or arising from
time to time hereafter, including any right evidenced by an account, note,
contract, security agreement, chattel paper or other evidence of indebtedness
or security; and


 


(b)           all (i) security pledged, assigned, hypothecated or granted to
or held by the Obligor to secure the accounts and rights described in paragraph
(a); (ii) right, title and interest in and to any goods, the sale of which
gave rise to the accounts and rights described in paragraph (a); (iii) guarantees,
endorsements and indemnifications on, or of, any of the accounts and rights
described in paragraph (a); (iv) powers of attorney for the execution of
any evidence of indebtedness or security or other writing in connection with
the accounts and rights described in paragraph (a); (v) books, records,
ledger cards, and invoices relating to the accounts and rights described in
paragraph (a); (vi) evidences of the filing of financing statements and
other statements and the registration of other instruments in connection with
the accounts and rights described in paragraph (a) and amendments to the
accounts and rights described in paragraph (a), notices to other creditors or
secured parties, and certificates from filing or other registration officers; (vii) credit
information, reports and memoranda relating to the accounts and rights
described in paragraph (a); and (viii) other writings related in any way
to the accounts and rights described in paragraph (a) and this paragraph
(b).


 


“Rental Equipment” means all Units which are sold or leased
or held for sale or lease, by the Obligor to one or more third persons.


 


“Rentals” means all rents payable under the Leases in respect
of the use of any Rental Equipment by account debtors as lessees of such Rental
Equipment to the Obligor as the lessor of such Rental Equipment.


 


“Representative” means, with respect
to the Interest Rate Creditors, the trustee, paying agent or other similar
representative for the Interest Rate Creditors.


 


“Required Second Lien Creditors” means
the holders of at least a majority of the then outstanding principal amount of
all Senior Secured Notes.


 


“Required Secured Creditors” shall
mean (i) at any time when any Credit Document Obligations are outstanding
or any Commitments or Letters of


 


11





















 


Credit under
the Amended and Restated Credit Agreement exist, the Required Lenders (or, to
the extent required by Section 11.10 of the Amended and Restated Credit
Agreement, each of the Lenders), (ii) at any time after all of the Credit
Document Obligations have been paid in full in cash in accordance with the
terms thereof and all Commitments and Letters of Credit under the Amended and
Restated Credit Agreement have been terminated, the holders of a majority of
the Interest Rate Obligations and (iii) at any time after all Credit
Document Obligations and Interest Rate Obligations have been paid in full in
cash in accordance with the terms thereof and all Commitments and Letters of
Credit under the Amended and Restated Credit Agreement have been terminated,
the Senior Secured Notes Trustee acting at the direction of the Required Second
Lien Creditors.


 


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


 


“Second Lien Creditors” means
collectively, the Senior Secured Noteholders and the Senior Secured Notes
Trustee.


 


“Second Lien Excluded Collateral” means
and includes (i) any property or assets owned by any Unrestricted
Subsidiary (as defined in the Senior Secured Notes Indenture), (ii) all
capital stock or other securities of the Borrower or any Unrestricted
Subsidiary, (iii) all capital stock or other securities of Restricted
Subsidiaries (as defined in the Senior Secured Notes Indenture) to the extent
the Applicable Value of such capital stock or other securities (on a Subsidiary
by Subsidiary basis) is equal to or greater than 20% of the then aggregate
principal amount of the Senior Secured Notes outstanding, and (iv) all
proceeds and products from any and all of the foregoing excluded Collateral
described in clauses (i) through (iii), unless such proceeds or products
would otherwise constitute Collateral without regard to preceding clauses (i) through
(iii); provided, however, in the event that Rule 3-10 or Rule 3-16 of
Regulation S-X under the Securities Act is amended, modified or interpreted by
the SEC to require (or is replaced with another rule or regulation, or any
other law, rule or regulation is adopted, which would require) the filing
with the SEC of separate financial statements of any Restricted Subsidiary of
the Borrower due to the fact that such Restricted Subsidiary’s capital stock or
other securities secure the Senior Secured Notes, then the capital stock or
other securities of such Restricted Subsidiary shall automatically be deemed
not to be part of the Collateral in which the Second Lien Creditors have a
security interest and shall automatically be deemed to be part of the Second
Lien Excluded Collateral, but only to the extent necessary to not be subject to
such requirement.  In such event, the
applicable Collateral Documents shall be deemed to be amended or modified
(without the consent of any Secured Creditor) to include as Second Lien
Excluded Collateral the shares of capital stock or other securities that are so
deemed to


 


12





















 


no longer
constitute part of the Collateral.  In
the event that Rule 3-10 or Rule 3-16 of Regulation S-X under the
Securities Act is amended, modified or interpreted by the SEC to permit (or is
replaced with another rule or regulation or any other law, rule or
regulation is adopted, which would permit) such Restricted Subsidiary’s capital
stock and other securities to secure the Senior Secured Notes in excess of the
amount or value then pledged pursuant to the Collateral Documents without the
filing with the SEC of separate financial statements of such Restricted
Subsidiary, then the capital stock and other securities of such Restricted
Subsidiary shall automatically be deemed to be a part of the Collateral, but
only to the greatest extent which would not cause the financial statements of
such Restricted Subsidiary to be subject to any such financial statement
requirement.


 


“Second Lien Obligations” has the
meaning provided in the definition of Obligations.


 


“Secured Creditors” means, collectively, the First Lien
Creditors and the Second Lien Creditors.


 


“Secured Debt Agreements” shall mean
and include this security agreement, the other Credit Documents, the Interest
Rate Agreements entered into with an Interest Rate Creditor and the Senior
Secured Notes Documents.


 


“Securities” means 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 investments, (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 an enterprise or is evidence of an obligation of the issuer,
and includes an uncertificated security.


 


“security agreement” means this
Amended and Restated Canadian Security Agreement as the same may modified,
supplemented or amended from time to time in accordance with its terms.


 


“Security Interest” has the meaning ascribed thereto in Section 2.2(1).


 


“Senior Secured Noteholders” means
collectively, the holders from time to time of the Senior Secured Notes.


 


“Senior Secured Notes Documents” means
collectively, the guarantee by the Obligor, inter
alia, of the Borrower’s obligations under the Senior Secured Notes,
the Senior Secured Notes Indenture and the Senior Secured Notes.


 


13





















 


“Senior Secured Notes Indenture” means
the indenture, dated August 18, 2003 among, the Senior Secured Notes
Trustee and the Obligor, inter alia,
as the same may from time to time be amended, modified or supplemented.


 


“Senior Secured Notes” means
collectively, the 10% senior secured notes of the Borrower due 2008 and all
Senior Secured Notes issued upon the exchange offer contemplated in the Senior
Secured Notes Indenture.


 


“Senior Secured Notes Trustee” means
U.S. Bank National Association and any successor trustee;


 


“Software” means all computer programs and databases and
portions thereof, in whatever form and on whatever medium those programs or
databases are expressed, fixed, embodied or stored from time to time, and the
copyright therein including, the object code and source code versions of each
such program and portions thereof and all corrections, updates, enhancements,
translations, modifications, adaptations and new versions thereof together with
both the media upon or in which such programs, databases and portions thereof
are expressed, fixed, embodied or stored (such as disks, diskettes, tapes and
semiconductor chips) and all flow charts, manuals, instructions, documentation
and other material relating thereto.


 


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


 


“Termination Date” means the date upon which
the Total Commitments under the Amended and Restated Credit Agreement have been
terminated and all Interest Rate Agreements entered into with any Interest Rate
Creditor have been terminated (or cash collateralized Collateral in a manner
reasonably satisfactory to the Administrative Agent), no Note under the Amended
and Restated Credit Agreement is outstanding and all Loans thereunder have been
repaid in full in cash in accordance with the terms thereof, all Letters of
Credit issued under the Amended and Restated Credit Agreement have been
terminated (or cash collateralized in a manner satisfactory to the
Administrative Agent), all Second Lien Obligations have been paid in full in
cash (or defeased or discharged) in accordance with the terms thereof and all other
Obligations then due and payable have been paid in full; provided, however, at
such time as (x) all First Lien Obligations have been paid in full in cash in
accordance with the terms thereof and all Commitments under the Amended and
Restated Credit Agreement have been terminated and all Letters of Credit have
been terminated or cash collateralized in a manner satisfactory to the
Administrative Agent or (y) the First Lien Creditors have


 


14





















 


released their
Liens on all of the Collateral then, in either case, this security agreement
and the security interests created hereby shall terminate (provided that all
indemnities set forth herein (including in Section 5.11 hereof) and in Section 6
of Annex N of the U.S. Security Agreement shall survive such termination)
unless, in the case of preceding clause (x), any Event of Default under the
Senior Secured Notes Indenture exists as of the date on which the First Lien
Obligations are repaid in full and terminated as described in such clause (x),
in which case the security interests created under this security agreement in
favour of the Second Lien Creditors will not be released except to the extent
the Collateral or any portion thereof was disposed of in order to repay the
First Lien Obligations (although the security interests created in favour of
the Second Lien Creditors will be released when such Event of Default and all
other Events of Default under the Senior Secured Notes Indenture cease to
exist).


 


“Trade-marks” means: (i) trade-marks, whether registered
or unregistered and whether in use or proposed; (ii) designs, logos,
indicia, trade names, corporate names, company names, business names, trade
styles and other source or business identifiers; (iii) fictitious characters
and names; (iv) prints and labels on which any of the foregoing have
appeared or appear or shall appear; (v) all registrations and applications
that have been or shall be made or filed in the Canadian Intellectual Property
Office - Trade-marks or any similar office in any country and all records
thereof and all reissues, extensions, or renewals thereof, and (vi) all
goodwill associated with or symbolized by any of the above and all common law
and other rights in the foregoing.


 


“Trade-mark License Agreement” means the trade-mark licence
agreement dated November 23, 1998 between the Obligor and the Borrower
pursuant to which the Borrower has licensed the Trade-marks to the Obligor.


 


“Units” means the mobile structures generally constructed of
steel or using a steel frame and undercarriage with an exterior of wood or
aluminium owned by the Obligor used to provide office, classroom, storage,
commercial or other space, whether in single units or physically attached to
such other units (and including in such form, storage containers, mobile
offices and modular structures and related equipment), which structures are
capable of being transported to and assembled on remote sites, and which may be
equipped with air conditioning and heating, electrical outlets, floors,
partitions, plumbing, carpeting, moldings, wall coverings, lighting and other
accessories.


 


“U.S. Security Agreement” has the meaning ascribed thereto in
Section 3.2(i).


 


15





















 


Section 1.2            Terms Incorporated by Reference.


 


(1)           Terms defined in the Personal Property Security
Act (Ontario) (as amended from time to time, the “PPSA”) and used but not otherwise defined in this security
agreement shall have the same meanings.


 


(2)           Except as otherwise defined herein, all capitalized terms used
herein and defined in the Amended and Restated Credit Agreement shall be used
herein as therein defined (or, at any time on or after the first date when all
Credit Document Obligations shall have been repaid in full and all Letters of
Credit have been terminated or cash collateralized in a manner satisfactory to
the Administrative Agent and the Total Commitments under the Amended and
Restated Credit Agreement have been terminated and thereafter for so long as no
Amended and Restated Credit Agreement is in effect, the Amended and Restated
Credit Agreement as in effect on such date immediately prior to such repayment
and termination, provided that all determinations required to be made to the
satisfaction of the Administrative Agent and all matters required to be
acceptable to the Administrative Agent in each case as provided in any such
definition shall, after such date, instead be required to be made to the
satisfaction of the Collateral Agent or be required to be acceptable to the
Collateral Agent, as the case may be).


 


Section 1.3            Statutes.


 


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


 


Section 1.4            Certain Phrases, etc.


 


In this
security agreement the words “including” and
“includes” mean “including
(or includes) without limitation”.


 


Section 1.5            Gender and Number.


 


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


 


Section 1.6            Headings, etc.


 


The division
of this security agreement into Articles and Sections and the insertion of
headings are for convenient reference only and are not to affect its
interpretation.  The expressions “Article”
and “Section” followed by a number mean and refer to the specified Articles or Section of
this security agreement.


 


Section 1.7            Schedules.


 


The Schedules
attached to this security agreement shall, for all purposes of this security
agreement, form an integral part of it.


 


16





















 


ARTICLE 2

SECURITY


 


Section 2.1            Grant of Security.


 


(1)           Subject to Section 2.4, the Obligor charges, assigns, hypothecates,
pledges and transfers to the Collateral Agent, and grants to the Collateral
Agent for the benefit of the Secured Creditors (and, to the extent the
following constitutes “Collateral” under, and as defined in, the Original
Canadian Security Agreement, does hereby reconfirm (without interruption) its
charge, assignment, hypothecation, pledge, transfer and grant to the Collateral
Agent under the Original Canadian Security Agreement of), a security interest
in all the Obligor’s right, title and interest in and to the personal property
and undertaking of the Obligor now owned or hereafter acquired (collectively,
the “Collateral”) including any and all of
the Obligor’s:


 


(a)           Inventory including 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;


 


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


 


(c)           Units;


 


(d)           Receivables and all agreements, books, accounts, invoices, letters,
documents and papers recording, evidencing or relating thereto;


 


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


 


(f)            Securities and Instruments, including the Securities listed in Schedule 2.1(1)(f);


 


(g)           intangibles including all security interests, goodwill, choses in
action, Contracts, Contract Rights, Software and other contractual benefits;


 


(h)           Copyrights, Designs, Patents, Confidential Information, Trade Secret
Rights and Trade-marks and other intellectual property (collectively, the “Intellectual Property”) including the Intellectual Property
described in Schedule 2.1(1)(h);


 


(i)            insurance policies;


 


17





















 


(j)            substitutions and replacements of and increases, additions and,
where applicable, accessions to the property described in Section 2.1(1)(a) through
Section 2.1(1)(i), inclusive; and


 


(k)           proceeds in any form derived directly or indirectly from any dealing
with all or any part of the property described in Section 2.1(1)(a),
through Section 2.1(1)(j), inclusive, or the proceeds of such proceeds.


 


(2)           The security interest of the Collateral Agent under this security
agreement extends to all Collateral of the kind which is the subject of this
security agreement which the Obligor may acquire at any time during the
continuation of this security agreement.


 


(3)           Notwithstanding anything to the contrary contained in this security
agreement, (x) the Second Lien Creditors shall not have a security
interest in, and the grant of security interests pursuant to this security
agreement for the benefit of the Second Lien Creditors shall not extend to, any
Second Lien Excluded Collateral, and with respect to the Second Lien Creditors
the term “Collateral” shall not include the Second Lien Excluded Collateral,
(y) to the extent that the granting or perfecting of any assets or
property of the Obligor acquired after the Effective Date requires the consent
of a third party that has not been obtained after the Obligor has used commercially
reasonable efforts to obtain such consent, the Second Lien Creditors shall not
have a security interest in, and the grant of security interest pursuant to the
security agreement for the benefit of the Second Lien Creditors shall not
extend to, any such property or assets and (z) to the extent that a
security interest in favour of the Second Lien Creditors cannot be granted or
perfected in certain assets or property of the Obligor under applicable law,
the Second Lien Creditors shall not have a security interest in, and the grant
of security interest pursuant to this security agreement for the benefit of the
Second Lien Creditors that not extend to, any such assets or property.


 


Section 2.2            Obligations Secured.


 


(1)           The security interest granted hereby (the “Security
Interest”) secures the payment and performance of all Obligations.


 


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 duplicate original copy of this security agreement.


 


(2)           If any Security or Instrument is now or at any time hereafter
becomes evidenced, in whole or in part, by uncertificated 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


 


18





















 


shall, at the request of the Collateral Agent, cause
the Security Interest to be entered in the records of the clearing agency or
custodian and provide evidence of such notation to the Collateral Agent.


 


(3)           The Obligor hereby deposits with the Collateral Agent any and all
certificates evidencing the Securities listed in Schedule 2.1(1)(f), duly
endorsed for transfer in blank.  If the
Obligor acquires any Instrument, Security or negotiable document of title
constituting Collateral (collectively, “Negotiable Collateral”),
the Obligor will, within 10 Business Days after receipt, notify the Collateral
Agent thereof, and upon request by the Collateral Agent will promptly deliver
to the Collateral Agent the Negotiable Collateral as security for the Obligations
and shall, at the request of the Collateral Agent (i) cause the transfer
of the Negotiable Collateral to the Collateral Agent to be registered wherever,
in the reasonable opinion of the Collateral Agent, such registration may be
required or advisable, (ii) duly endorse the same for transfer in blank or
as the Collateral Agent may reasonably direct, and (iii) upon request of
the Collateral Agent, use commercially reasonable efforts to deliver to the
Collateral Agent any and all consents or other documents which may be necessary
to effect the transfer of the Negotiable Collateral to the Collateral Agent or
any third party.


 


(4)           The Obligor will promptly inform the Collateral Agent in writing of
the acquisition by the Obligor of any personal property which is not adequately
described in Section 2.1(1), and the Obligor will execute and deliver, at
its own expense, from time to time, amendments to this security agreement and
its schedules or additional security agreements or schedules as may be
reasonably required by the Collateral Agent.


 


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 any agreement, license, permit or
quota of the Obligor (each, a “Restricted Asset”)
is prohibited by the terms thereof, the Security Interest created hereunder
will constitute a trust created in favour of the Collateral Agent and the
Secured Creditors pursuant to which the Obligor shall hold as trustee all
proceeds arising under or in connection with the Restricted Asset in trust for
the Collateral Agent on the following basis:


 


(a)           until the Security Interest has become enforceable, the Obligor
shall be entitled to receive all such proceeds; and


 


(b)           whenever the Security Interest has become enforceable, all rights of
the Obligor to receive such proceeds shall cease, the Obligor shall at the
request of the Collateral Agent take all such actions to collect and enforce
payment and other rights arising under the Restricted Asset in accordance with
the instructions of the Collateral Agent and all such proceeds arising under or
in connection with the Restricted Asset shall


 


19





















 


be immediately paid over to the Collateral Agent for
the benefit of the Secured Creditors.


 


The Obligor shall not exercise any rights of set off
with respect to amounts payable by it under or in connection with any
Restricted Asset and shall use commercially reasonable efforts to ensure that
no other party to the Restricted Asset shall exercise any rights of set off
against any such amounts.  The Obligor shall use commercially
reasonable efforts to obtain the consent of
each other party to the Restricted Asset to the assignment of the Restricted
Asset to the Collateral Agent in accordance with this security agreement and
shall use commercially reasonable efforts to ensure that all agreements entered
into on and after the Effective Date expressly permit assignments of the
benefits of such agreement as collateral security to the Collateral Agent in
accordance with the terms of this security agreement.


 


(2)           Until the Security Interest shall have become enforceable, the grant
of the Security Interest in the Intellectual Property shall 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.


 


(3)           The Security Interest shall not extend to consumer goods.


 


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


 


Section 2.5            Grant of Licence to Use Intellectual Property.


 


Solely for
purposes of enabling the Collateral Agent to exercise its rights and remedies
pursuant to Article 3 but subject to the next following sentence, and for
no other purpose, the Obligor grants to the Collateral Agent an irrevocable,
nonexclusive licence (exercisable without payment of royalty or other
compensation to the Obligor) to use, assign or sublicense, at any time after
the Security Interest shall have become enforceable, any of the Intellectual
Property owned or licensed by the Obligor 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 used for
compilation or print-out.  To the extent
that the grant of a license under this Section 2.5 would constitute a breach
or permit the acceleration or termination of any Intellectual Property licensed
by the Obligor, such Intellectual Property shall not be subject to the licence
in favour of the Collateral Agent but the Obligor shall, upon the reasonable
request therefor from the Collateral Agent, use commercially reasonable efforts
to obtain the consent of the third party to such Intellectual Property to the
grant of the licence to the Collateral Agent hereunder


 


20





















 


and,
upon obtaining such consent, the Obligor shall grant a license as set forth in
this Section 2.5 to the Collateral Agent.


 


Section 2.6            Care and Custody of Collateral.


 


(1)           The Collateral Agent and the Secured Creditors shall have no
obligation to keep fungible Collateral in their possession identifiable, but
shall be bound to exercise in the keeping of the Collateral the same degree of
care as it would exercise with respect to similar property owned by it.


 


(2)           The Collateral Agent may, after the Security Interest shall have
become enforceable, (i) notify any Person obligated on any Receivable or
on chattel paper or any obligor on an instrument or under any Contract to make
payments to the Collateral Agent, whether or not the Obligor was previously
making collections on such Receivables, chattel paper, instruments or
Contracts, (ii) assume control of any proceeds arising from the
Collateral, (iii) direct the Obligor to cause, and the Obligor shall
cause, all payments on account of the Receivables, chattel paper, instruments
and Contracts to be made directly to the Cash Collateral Account, and (iv) direct
the Obligor to promptly (and in any event within 10 days) deliver all of its
chattel paper to the Collateral Agent.


 


(3)           The Collateral Agent need not see to the collection of dividends on,
or exercise any option or right in connection with, the Securities and
Instruments that are Collateral hereunder and need not protect or preserve them
from depreciating in value or becoming worthless and is released from all
responsibility for any loss of value. 
The Collateral Agent shall be bound to exercise in the physical keeping
of such Collateral only the same degree of care as it would exercise with
respect to its own securities.


 


Section 2.7            Rights of the Obligor.


 


(1)           Until the Security Interest has become enforceable, the Obligor
shall be entitled to vote the Securities and to receive all cash
dividends.  In order to allow the Obligor
to vote the Securities, the Collateral Agent shall from time to time, at the
request and the expense of the Obligor, (i) execute valid proxies
appointing proxyholders to attend and act at meetings of shareholders, and (ii) execute
resolutions in writing, all pursuant to the relevant provisions of the Issuer’s
governing legislation.  Whenever the
Security Interest has become enforceable, all rights of the Obligor to vote
(under any proxy given by the Collateral Agent (or its nominee) in connection
herewith or otherwise) or to receive dividends shall cease and all such rights
shall become vested solely and absolutely in the Collateral Agent.


 


(2)           Any dividends received by the Obligor contrary to Section 2.7(1) or
any other moneys or property which may be received by the Obligor after the
Security Interest has become enforceable for, or in respect of, the Collateral
shall be


 


21





















 


received as trustee for the Collateral Agent and the
Lenders and shall be immediately paid over to the Collateral Agent.


 


ARTICLE 3

ENFORCEMENT


 


Section 3.1            Enforcement.


 


The Security
Interest shall be and become enforceable against the Obligor upon the
occurrence and during the continuance of an Event of Default.


 


Section 3.2            Remedies.


 


Whenever the
Security Interest has become enforceable, the Collateral Agent may realize upon
the Collateral and enforce the rights of the Collateral Agent and the Secured
Creditors 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 or lease of all or any part of the Collateral;


 


(d)           exercise and enforce all rights and remedies of a holder of the
Securities and Instruments as if the Collateral Agent were the absolute owner
thereof (including, if necessary, causing the Collateral to be registered in
the name of the Collateral Agent or its nominee if not already done);


 


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


 


(f)            collection, realization or sale of, or other dealing with, the
Receivables;


 


(g)           subject to the terms of any Intellectual Property licenses and
consents with respect thereto obtained pursuant to Section 2.5, license or
sublicense, whether on an exclusive or nonexclusive basis, any Intellectual
Property owned or licensed by the Obligor for such term and on such conditions
and in such manner as the Collateral Agent shall in its sole judgment determine
(taking into account such provisions as may be necessary to protect and
preserve such Intellectual Property);


 


(h)           instruction to all banks which have entered into a control agreement
with the Collateral Agent to transfer all moneys, securities and instruments
held by such depositary bank to an account maintained with or by the Collateral
Agent;


 


(i)            application of any moneys constituting Collateral or proceeds
thereof in accordance with Section 7.4 of the amended and restated
security agreement dated as of March 26, 2002, amended and restated as of
the


 


22





















 


August 18, 2003 date and amended and restated as
of the Effective Date (as such agreement may be amended, restated, modified
and/or supplemented from time the “U.S. Security Agreement”)
among Holdings, the Borrower, the other assignors party thereto and BofA, as
collateral agent for the secured creditors referred to therein.  Section 7.4 of the U.S. Security
Agreement is hereby incorporated herein by reference and all of the provisions
of such section shall apply hereto, mutatis
mutandis;


 


(j)            appointment by instrument in writing of a receiver (which term as
used in this security 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;


 


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


 


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


 


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


 


(n)           any other remedy or proceeding authorized or permitted under the
PPSA or otherwise by law or equity.


 


Such remedies 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 Collateral Agent and the Secured Creditors however created.  The Collateral Agent shall not be bound to
exercise any right or remedy, and the exercise of rights and remedies shall be
without prejudice to the rights of the Collateral Agent and the Secured
Creditors in respect of the Obligations including the right to claim for any
deficiency.  By accepting the benefits of
this security agreement and each other Collateral Document, the Secured
Creditors expressly acknowledge and agree that this security agreement and each
other Collateral Document may be enforced only by the action of the Collateral
Agent acting upon the instructions of the Required Lenders (or, if no Credit
Document Obligations remain outstanding, the holders of at least a majority of
the outstanding Interest Rate Obligations) and that no other Secured Creditor
shall have any right individually to seek to enforce this security agreement or
any other Collateral Document or to realize upon the security to be granted
hereby or thereby, it being understood and agreed that such rights and remedies
may be exercised by the Collateral Agent for the benefit of the Secured
Creditors upon the terms of this security agreement, the Intercreditor
Agreement and the other Collateral Documents.


 


23





















 


Section 3.3            Additional
Rights.


 


In addition to the remedies set forth in
Section 3.2, the Collateral Agent may, whenever the Security Interest has
become enforceable:


 


(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;


 


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


 


(c)           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;


 


(d)           carry on all or any part of the business of the Obligor and, to the
exclusion of all others including the Obligor (excluding any tenant leases or
other occupancy agreements entered into by the Obligor, to the extent permitted
by the Amended and Restated Credit Agreement, in accordance with the Amended
and Restated Credit Agreement), 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 Collateral Agent sees fit, free of charge, and, except as required by
applicable law, the Collateral Agent and the Secured Creditors shall not be
liable to the Obligor for any act, omission or negligence (other than wilful
misconduct and gross negligence (as determined by a court of competent
jurisdiction in a final and non-appealable decision) in so doing or for any
rent, charges, depreciation or damages incurred in connection with or resulting
from such action;


 


(e)           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; and


 


(f)            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.


 


24





















 


Section 3.4            Receiver’s
Powers.


 


(1)           Any receiver appointed by the Collateral Agent shall be vested with
the rights and remedies which could have been exercised by the Collateral 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 shall be within the sole
and unfettered discretion of the Collateral Agent.


 


(2)           Any receiver appointed by the Collateral Agent shall act as agent
for the Collateral Agent for the purposes of taking possession of the
Collateral, but otherwise and for all other purposes (except as provided
below), as agent for the Obligor.  The
receiver may sell, lease, or otherwise dispose of Collateral as agent for the
Obligor or as agent for the Collateral Agent as the Collateral Agent may
determine in a commercially reasonable manner. 
The Obligor agrees to indemnify the receiver in respect of all such
actions (except for actions constituting gross negligence and/or wilful
misconduct as determined in a final and unappealable decision by a court of
competent jurisdiction).


 


(3)           The Collateral Agent, in appointing or refraining from appointing
any receiver, shall not incur liability to the receiver, the Obligor or
otherwise and shall not, except as required by applicable law, be responsible
for any misconduct or negligence of such receiver.


 


Section 3.5            Appointment
of Attorney.


 


The Obligor hereby irrevocably appoints the
Collateral Agent (and any officer thereof) as attorney of the Obligor (with
full power of substitution) to exercise in the name of and on behalf of the
Obligor, after the Security Interest shall have become enforceable, any of the
Obligor’s right (including the right of disposal), title and interest in and to
the Collateral including the execution, endorsement, assignment, delivery and
transfer of the Collateral to the Collateral Agent, its nominees or
transferees, and the Collateral 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.  The attorney shall not be
liable for any act, failure to act or any other matter or thing, except for its
own gross negligence or wilful misconduct (as determined by a court of
competent jurisdiction in a final and non-appealable decision).  This appointment and power of substitution,
being coupled with an interest, are irrevocable and shall not terminate upon
the bankruptcy, dissolution, winding up or insolvency of the Obligor.


 


Section 3.6            Dealing
with the Collateral.


 


(1)           The Collateral Agent and the Secured Creditors shall not be obliged
to exhaust their recourse against the Obligor or any other Person or against
any other security they may hold in respect of the Obligations before realizing
upon or


 


25





















 


otherwise dealing with the Collateral in such manner
as the Collateral Agent may consider desirable.


 


(2)           The Collateral Agent and the Secured Creditors 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
Obligations, the liability of the Obligor or the rights of the Collateral Agent
and the Secured Creditors in respect of the Collateral.


 


(3)           Except as otherwise provided by law or this security agreement
(including Section 2.6(3), the Collateral Agent and the Secured Creditors
shall not be (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 3.7            Standards
of Sale.


 


Without prejudice to the ability of the
Collateral Agent to dispose of the Collateral in any manner which is
commercially reasonable, the Obligor acknowledges that, to the extent not
prohibited by law:


 


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


 


(b)           Collateral may be disposed of by public auction, public tender or
private contract;


 


(c)           any assignee of such Collateral may be the Collateral Agent, a
Secured Creditor or a customer of any such Person;


 


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


 


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


 


Section 3.8            Dealings
by Third Parties.


 


(1)           No Person dealing with the Collateral Agent, any of the Secured
Creditors or an agent or receiver shall be 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 Collateral
Agent or the Secured Creditors by the Obligor,


 


26





















 


(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
Collateral Agent or any Secured Creditor with the Collateral, or (vi) how
any money paid to the Collateral Agent or the Secured Creditors has been
applied.


 


(2)           Any bona fide purchaser of all or any
part of the Collateral from the Collateral Agent or any receiver or agent shall
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 3.9            Registration
Rights.


 


If the Administrative Agent shall determine
to exercise its right to sell any or all of the Securities pledged hereunder,
and if in the opinion of the Administrative 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 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 Administrative Agent shall direct; 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 Administrative 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 Administrative 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


 


27





















 


Administrative 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 Administrative Agent shall designate.


 


ARTICLE 4

REPRESENTATIONS, WARRANTIES AND COVENANTS


 


Section 4.1            General
Representations, Warranties and Covenants.


 


The Obligor hereby represents and warrants
and covenants and agrees that:


 


(a)           Necessary Filings. 
Except as
set out forth in Sections 11.19 (a) and (b) of the Amended and Restated Credit
Agreement, all
filings, registrations and recordings necessary or appropriate to create,
preserve and perfect the Security Interest granted hereby in respect of the
Collateral located in jurisdictions (save and except for any filings,
registrations or recordings: (A) in respect of fixtures in the appropriate land
registry office; and (B) in respect of any assignment of Crown debts (as that
term is defined in the Financial
Administration Act (Canada)) to which Part VII of the Financial Administration Act (Canada)
applies), which filings, registrations or recordings the Obligor is not required
to make) have been accomplished or will be accomplished within one Business Day
from the Effective Date and upon such filings, registrations or recordations,
the Security Interest granted hereby in and to the Collateral constitutes or
will constitute a perfected security interest therein prior to the rights of
all other Persons therein and subject to no other Liens (other than Permitted
Liens) and is entitled to all the rights, priorities and benefits afforded by
such relevant laws as enacted in any relevant jurisdiction to perfected
security interests, in each case to the extent that the Collateral consists of
the type of property in which a security interest may be created;


 


(b)           No Liens. The Obligor
is, and as to Collateral acquired by it from time to time after the Effective
Date the Obligor will be, the owner or licensee of all Collateral free from any
Lien, adverse claim or other right, title or interest of any other Person
(other than Permitted Liens and the Security Interest), and the Obligor shall
defend the Collateral to the extent of its rights therein against all claims
and demands of all Persons at any time claiming the same or any interest
therein adverse to the Collateral Agent;


 


28





















 


(c)           Other Financing Statements.  As of the Effective Date,
in the Qualified Canadian Jurisdictions, there is no financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in the
Collateral except as disclosed in Schedule 4.1(c), and the Obligor will not
execute or authorize to be filed in any public office any financing statement
(or similar statement or instrument of registration under the law of any jurisdiction)
or statements relating to the Collateral, except financing statements filed or
to be filed in respect of and covering the security interests granted hereby
and by the other Credit Documents to which the Obligor is a party or as
permitted by the Amended and Restated Credit Agreement or in connection with
Permitted Liens;


 


(d)           Chief Executive Office; Records.  The chief executive office
of the Obligor is located at the address indicated on Schedule 4.1(d).  The Obligor will not move its chief executive
office except to such new location as the Obligor may establish in accordance
with the last sentence of this Section 4.1(d).  The originals of all documents evidencing all
Receivables, Contract Rights and Trade Secret Rights of the Obligor and the
only original books of account and records of the Obligor relating thereto are,
and will continue to be, kept at such chief executive office, and/or one or
more of the other record locations set out on Schedule 4.1(d) or at such new
locations as the Obligor may establish in accordance with the last sentence of
this Section 4.1(d).  All
Receivables and Contract Rights and Trade Secret Rights of the Obligor are, and
will continue to be, maintained at, and controlled and directed (including for
general accounting purposes) from, the office locations described above or such
new location established in accordance with the last sentence of this
Section 4.1(d).  The Obligor shall
not establish new locations for such offices until (i) it shall have given
to the Collateral Agent not less than 15 days’ prior written notice (or such
lesser notice as shall be acceptable to the Collateral Agent in the case of a
new record location to be established in connection with newly acquired
Contracts) of its intention to do so, clearly describing such new location and
providing such other information in connection therewith as the Collateral
Agent may reasonably request; (ii) with respect to such new location, it
shall have taken all action, reasonably satisfactory to the Collateral Agent,
to maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force
and effect; and (iii) at the reasonable request of the Collateral Agent,
it shall have furnished an opinion of counsel or other evidence acceptable to
the Collateral Agent to the effect that all financing and continuation
statements and


 


29





















 


amendments or supplements thereto (and similar
documents and filings under the law of any relevant jurisdiction) have been
filed in the appropriate filing office or offices, and all other actions
(including the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to perfect (and
maintain the perfection of and priority of) the Security Interest granted
hereby (subject only to Permitted Liens) in respect of the types of Collateral
referred to in Section 2.1(1);


 


(e)           Location of Inventory and Equipment.  All Inventory and equipment
(including Units) held on the Effective Date by the Obligor (excluding Units at
such time leased to customers) are located at one of the locations shown on
Schedule 4.1(e).  All Units and other
Inventory (including Units at such time leased to customers) are located in one
of the jurisdictions listed on Schedule 4.1(e). 
The Obligor agrees that all Inventory and equipment (including Units)
now held or subsequently acquired by it (excluding Units at such time leased to
customers) shall be kept at (or shall be in transport to or from) any one of
the locations listed on Schedule 4.1(e), or such new location as the Obligor
may establish in accordance with the last sentence of this
Section 4.1(e).  The Obligor may
establish a new location for Inventory and equipment (including Units but
excluding Units leased to customers) if (i) it shall have given to the
Collateral Agent not less than 20 days prior written notice of its intention so
to do, clearly describing such new location and providing such other
information in connection therewith as the Collateral Agent may reasonably
request, (ii) with respect to such new location, it shall have taken all
action reasonably satisfactory to the Collateral Agent to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted
hereby at all times fully perfected and in full force and effect and
(iii) at the reasonable request of the Collateral Agent, it shall have
furnished an opinion of counsel or other evidence acceptable to the Collateral
Agent to the effect that all financing and continuation statements and
amendments or supplements thereto (and similar documents and filings under the
law of any relevant jurisdiction) have been filed in the appropriate filing
office or offices, and all other actions (including the payment of all filing
fees and taxes, if any, payable in connection with such filings) have been
taken, in order to perfect (and maintain the perfection and priority of) the
Security Interest granted hereby (subject only to Permitted Liens);


 


(f)            Recourse.  This security agreement is made with full
recourse to the Obligor and pursuant to and upon all the warranties,
representations, covenants and agreements on the part of the Obligor contained
herein,


 


30





















 


in the other Credit Documents to which the Obligor is
a party, in the Interest Rate Agreements, if any, to which the Obligor is a
party, and otherwise in writing in connection herewith or therewith;


 


(g)           Trade Names, Change of Name.  The Obligor has not and
does not operate in any jurisdiction under, or in the preceding twelve months
has not had and has not operated in any jurisdiction under, any trade names,
fictitious names or other names (including any names of divisions or
operations) except its legal name and such other trade, fictitious or other
names as are listed on Schedule 4.1(g) Schedule 4.1(g).  The Obligor has only operated under each name
set forth in Schedule 4.1(g) in the jurisdiction or jurisdictions set forth
opposite each such name on Schedule 4.1(g). 
The Obligor shall not change its legal name or assume or operate in any
jurisdiction under any trade, fictitious or other name except those names
listed on Schedule 4.1(g) in the jurisdictions listed with respect to such
names (including any names of divisions or operations) and new names and/or
jurisdictions established in accordance with the last sentence of this
Section 4.1(g).  The Obligor shall
not assume or operate in any jurisdiction under any new trade, fictitious or
other name or, to the extent such operation might impair the creation,
maintenance, perfection or priority of any Security Interest granted hereunder,
operate under any existing name in any additional jurisdiction until
(i) it shall have given to the Collateral Agent not less than 30 days’
prior written notice of its intention so to do, clearly describing such new
name and/or jurisdiction and, in the case of a new name, the jurisdictions in
which such new name shall be used and providing such other information in
connection therewith as the Collateral Agent may reasonably request; and
(ii) with respect to such new name and/or new jurisdiction, it shall have
taken all action to maintain the Security Interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and
in full force and effect and (iii) at the request of the Collateral Agent, it
shall have furnished an opinion of counsel or other evidence reasonably
acceptable to the Collateral Agent to the effect that all financing and
continuation statements and amendments or supplements thereto (and similar
documents and filings under the law of any relevant jurisdiction) have been
filed in the appropriate filing office or offices, and all other actions
(including the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to perfect (and
maintain the perfection and priority of) the security interest granted hereby
(subject only to Permitted Liens) in respect of the types of Collateral
referred to in Section 2.1(1).


 


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(h)           Units.  Subject to Section 11.19(a) of the Amended
and Restated Credit Agreement and Section 4.1(a), to the extent any Unit is, or
under applicable law is required to be, covered by any Unit Certificate and to
the extent that any action under any applicable law in lieu of or in addition
to the filing of financing statements under the PPSA or any other personal
property security legislation enacted in any relevant jurisdiction are required
to be taken so that the security interests in the respective Units created
pursuant to this security agreement are fully perfected under such law, all
such actions have been taken.  Subject to
Section 11.19(a) of the Amended and Restated Credit Agreement and Section
4.1(a), in the event any change in applicable law in any relevant jurisdiction
where any Unit is located, or a decision, opinion, ruling, regulation, decree
or order of a court, or administrative, regulatory or governmental authority,
of any relevant jurisdiction in which any Unit is located (whether involving
the Obligor or any unrelated third person) shall render any of the information
provided pursuant to the preceding sentence inaccurate in any respect, then the
Obligor shall inform (in writing) the Collateral Agent of the respective change
and shall promptly take such actions or cause such actions to be taken as the
Collateral Agent shall request in order to create, maintain, establish or
preserve the perfection of the security interest of the Collateral Agent in
such Unit.  Subject to Section 11.19(a)
of the Amended and Restated Credit Agreement and Section 4.1(a), as new
Units are acquired after the date of this security agreement, or to the extent
that Units are moved to different jurisdictions after the date of this security
agreement, the Obligor shall take all actions with respect thereto (including,
to the extent required under applicable law, causing a Unit Certificate to be
issued which contains a notation of the security interest of the Collateral
Agent thereon) as shall be required under applicable law to ensure that the
security interests of the Collateral Agent therein are perfected under relevant
law.  Immediately upon any request of the
Collateral Agent made for the purpose set forth in this sentence, the Obligor
shall provide the serial numbers or vehicle identification numbers, as
applicable, for each Unit and shall promptly take such actions or cause such
actions to be taken as the Collateral Agent shall request in order to create,
maintain, establish or preserve the perfection or priority of the Security
Interest over other creditors or buyers or lessees of the Units in accordance
with the PPSA or the personal property security legislation enacted in any
relevant jurisdiction.  As of the
Effective Date, none of the Units are self-propelled or constitute “motor
vehicles” within the meaning of the PPSA and the Obligor will immediately
notify the Collateral Agent if any Units become self-propelled or become “motor
vehicles” within the meaning of the PPSA.


 


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None of the Units are “equipment” (as that term is
defined in the PPSA) to the Obligor. 
None of the Contracts with account debtors (i) located in the
Province of Ontario for the purposes of the PPSA constitute “security
agreements” as defined therein; or (ii) located outside of the Province of
Ontario for the purposes of the personal property security legislation enacted
in such jurisdiction are subject to the perfection, registration and priority
provisions of such legislation.  Subject
to Section 11.19(a) of the Amended and Restated Credit Agreement and Section
4.1(a), the Obligor will take all such steps as may be necessary to perfect
under the PPSA or the personal property security legislation enacted in any
other relevant jurisdiction its interest in any Contracts which are subject to
the perfection, registration and priority provisions of such legislation.


 


(i)            Securities and Instruments.


 


(i)            The Obligor is the legal
and beneficial owner of, and it has good and marketable title to all Collateral
consisting of one or more Securities and it has sufficient interest in all
Collateral in which a security interest is purported to be created hereunder
for such security interest to attach (subject, in each case, to no Lien, option
or adverse claim whatsoever, except the Security Interest created by this
security agreement);


 


(ii)           No person, firm or
corporation 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
Collateral consisting of Securities or Instruments;.


 


(iii)          The Obligor has full power,
authority and legal right to pledge all the Collateral consisting of Securities
and Instruments pledged by it pursuant to this security agreement;


 


(iv)          All of the Collateral
consisting of Securities and Instruments has been duly and validly issued and
acquired, is fully paid and non-assessable and is subject to no options to
purchase or similar rights;


 


(v)           Each of the Instruments
pledged hereunder, constitutes, or when executed by the obligor thereof will to
the knowledge of the Obligor constitute, the legal, valid and binding
obligation of


 


33





















 


such obligor, enforceable in accordance
with its terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws generally affecting creditors’ rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law);


 


(vi)          the pledge, collateral
assignment and delivery to the Collateral Agent of the Collateral consisting of
certificated Securities pursuant to this security agreement creates a valid and
perfected first priority security interest in such certificated Securities, and
the proceeds thereof, subject to no prior Lien or to any agreement purporting
to grant to any third party a Lien on the property or assets of such the
Obligor which would include the Securities (other than Permitted Liens) and the
Collateral Agent is entitled to all the rights, priorities and benefits
afforded by the PPSA or other relevant personal property securities legislation
as enacted in any relevant jurisdiction to perfect security interests in
respect of such Collateral; and


 


(vii)         “possession”
(within the meaning of the PPSA) has been obtained by the Collateral Agent over
all Collateral consisting of Securities and Instruments.


 


(j)            Timber.  The Obligor does not own, or expect to
acquire, any property which constitutes, or would constitute, timber.  If at any time after the Effective Date, the
Obligor owns, acquires or obtains rights to any timber, the Obligor shall
furnish the Collateral Agent with prompt written notice thereof (which notice
shall describe in reasonable detail the timber and the locations thereof) and
shall take all actions as may be deemed reasonably necessary or desirable by
the Collateral Agent to perfect the security interest of the Collateral Agent
therein.


 


Section 4.2            After
Acquired Receivables.


 


As of the time when each of its Receivables
arises, the Obligor shall be deemed to have represented and warranted that each
such Receivable, and all records, papers and documents delivered to the
Collateral Agent relating thereto (if any) are genuine and in all respects what
they purport to be, and that all papers and documents (if any) relating thereto
(i) will, to the knowledge of the Obligor, represent the genuine, legal,
valid and binding obligation of the account debtor evidencing indebtedness
unpaid and owed by the respective account debtor arising out of the performance
of labour or services or the sale or lease and delivery of the merchandise
listed therein, or both, (ii) will, to the knowledge of the Obligor, be
the only original writings evidencing and embodying such obligation of the
account debtor named therein


 


34





















 


(other than
copies created for general accounting purposes), (iii) will, to the
knowledge of the Obligor, evidence true and valid obligations, enforceable in
accordance with their respective terms, subject to adjustments customary in the
business of the Obligor in accordance with past practice, and (iv) will be
in compliance and will conform with all applicable federal, state and local
laws and material applicable laws of any relevant foreign jurisdiction.


 


Section 4.3            Maintenance
of Records for Receivables and Contracts.


 


The Obligor will keep and maintain at its
own cost and expense accurate records of its Receivables and Contracts,
including the originals of all documentation (including each Contract) with
respect thereto, records of all payments received, all credits granted thereon,
all merchandise returned and all other dealings therewith, and the Obligor will
make the same available to the Collateral Agent for inspection on the Obligor’s
premises, at the Obligor’s own cost and expense, at any and all reasonable
times upon one Business Day’s prior notice. 
Upon the occurrence and during the continuance of an Event of Default,
at the request of the Collateral Agent, the Obligor shall, at its own cost and
expense, deliver all tangible evidence of its Receivables and Contract Rights
(including all documents evidencing its Receivables and all Contracts) and such
books and records to the Collateral Agent or to its representatives (copies of
which evidence and books and records may be retained by the Obligor).  Upon the occurrence and during the continuance
of an Event of Default, if the Collateral Agent so directs, the Obligor shall
legend, in form and manner reasonably satisfactory to the Collateral Agent, its
Receivables and the Contracts, as well as books, records and documents (if any)
of the Obligor evidencing or pertaining to such Receivables with an appropriate
reference to the fact that such Receivables and Contracts have been assigned to
the Collateral Agent and that the Collateral Agent has a security interest
therein.


 


Section 4.4            Modification
of Terms, etc.


 


The Obligor shall not rescind or cancel any
indebtedness evidenced by any Receivable or under any Contract, or modify any
term thereof or make any adjustment with respect thereto, or extend or renew
the same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or, except as permitted by the respective Secured
Debt Agreements, sell any Receivable or Contract, or interest therein, without
the prior written consent of the Collateral Agent except as permitted by
Section 4.5.  The Obligor will duly
fulfill all obligations on its part to be fulfilled under or in connection with
its Receivables and the Contracts and will do nothing to impair the rights of
the Collateral Agent in the Receivables or Contracts.


 


Section 4.5            Collection.


 


The Obligor shall, in accordance with its
ordinary business practices, endeavour to cause to be collected from the
account debtor named in each of its Receivables or obligor under any Contract,
as and when due (including amounts,


 


35





















 


services or
products which are delinquent, such amounts, services or products to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts, services or products owing under or on account of such
Receivable or Contract, and apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance of such Receivable or
under such Contract, except that, prior to occurrence and continuance of an
Event of Default, the Obligor may allow in the ordinary course of business as
adjustments to amounts, services and products owing under its Receivables and
Contracts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance, which the Obligor finds
appropriate in accordance with reasonable business judgment and (ii) a
refund or credit due as a result of returned or damaged merchandise or
improperly performed services or such other adjustments which the Obligor deems
appropriate in the exercise of its commercially reasonable business
judgment.  The costs and expenses
(including reasonable attorneys’ fees) of collection, whether incurred by the
Obligor or the Collateral Agent, shall be borne by the Obligor.


 


Section 4.6            Obligor
Remains Liable.


 


Anything herein to the contrary
notwithstanding, the Obligor shall remain liable to observe and perform all of
the conditions and obligations to be observed and performed under or with
respect to the Collateral.  Neither the
Collateral Agent nor any Secured Creditor shall have any obligation or
liability under or with respect to any Collateral by reason of or arising out
of this security agreement or the receipt by the Collateral Agent or any
Secured Creditor of any Collateral pursuant hereto, nor shall the Collateral
Agent or any Secured Creditor be obligated in any manner to perform any of the
obligations of the Obligor under or with respect to any Collateral.


 


Section 4.7            Collateral
in the Possession of a Bailee.


 


If any Inventory or other goods are at any
time in the possession of a bailee, the Obligor shall promptly notify the
Collateral Agent thereof and, if requested by the Collateral Agent, shall use
its reasonable best efforts to promptly obtain an acknowledgement from such
bailee, in form and substance reasonably satisfactory to the Collateral Agent,
that the bailee holds such Collateral for the benefit of the Collateral Agent
and shall act upon the instructions of the Collateral Agent, without the
further consent of the Obligor.  The
Collateral Agent agrees with the Obligor that the Collateral Agent shall not
give any such instructions unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by the Obligor
with respect to any such bailee.


 


Section 4.8            Intellectual
Property


 


As of the Effective Date, the Obligor
represents and warrants that, other than the rights to use certain Trade-marks
licensed to the Obligor, as more particularly described in Section 4.9,
there is no other Intellectual Property owned by or licensed


 


36





















 


to the Obligor
which is material to and used by the Obligor in the conduct of its business.


 


Section 4.9            Representations
and Warranties Concerning Trade-marks.


 


The Obligor represents and warrants that
(i) pursuant to the Trade-mark License Agreement, it is the authorized
licensee of the Trade-marks listed on Schedule 2.1(1)(h) (the “Licensed Trade-marks”), and the said
trade-mark license is valid, subsisting and has not been cancelled,
(ii) it is the true and lawful owner of the Trade-marks listed on Schedule
2.1(1)(h) (the “Owned Trade-Marks”),
and that such Licensed Trade-marks and Owned Trade-marks constitute all
trade-marks, registrations of trade-marks and applications for registrations of
trade-marks in the Canadian Intellectual Property Office - Trade-marks or the
equivalent thereof in any other country, that the Obligor owns or uses that are
material to its business as of the Effective Date and that said registrations
and applications are valid, subsisting and have not been cancelled.  The Obligor represents and warrants that it
owns, is licensed to use or otherwise has the right to use, all Trade-marks
that it uses.  The Obligor further
warrants that, it has no knowledge of any third party claim received by it,
that any aspect of the Obligor’s present or contemplated business operations
infringes or will infringe any trade-mark, service mark or trade name of any
other Person other than as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  The Obligor represents and warrants that the
Obligor is not aware of any third-party claim that any registration is invalid
or unenforceable, and is not aware that there is any reason that any
registration is invalid or unenforceable. 
The Obligor represents and warrants that upon the recordation of
Confirmation of a Security Interest in Intellectual Property in the form of
Schedule 4.1(a) in the Canadian Intellectual Property Office – Trade-marks,
together with filings of financial statements under the PPSA and pursuant to
the personal property security legislation enacted in Alberta, all filings,
registrations and recordings necessary or appropriate, to the extent permitted
by applicable law, to perfect any security interest granted to the Collateral
Agent in the Owned Trade-marks, if any, covered by this security agreement
under applicable federal and provincial law will have been accomplished.  The Obligor agrees, if and when it owns any
Trade-marks, to execute such Confirmation of Security Interest in Intellectual
Property covering all right, title and interest in any such Owned Trade-marks,
and the associated goodwill, of the Obligor, and to record the same in the
Canadian Intellectual Property Office – Trade-marks.


 


Section 4.10         Trade-mark
Licenses and Assignments.


 


Except as otherwise permitted by the
Amended and Restated Credit Agreement, the Obligor hereby agrees not to divest
itself of any right under any material Trade-mark, including the Licensed
Trade-marks, other than in the ordinary course of business in accordance with
its reasonable business judgment absent the prior written approval of the
Collateral Agent which shall not be unreasonably withheld or delayed.


 


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Section 4.11         Trade-mark
Infringements.


 


The Obligor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect
to, any party who the Obligor believes is infringing, diluting or otherwise
violating any of the Obligor’s rights in and to any material Trade-mark,
including the Licensed Trade-marks, in any manner that could reasonably be
expected to have a Material Adverse Effect, or with respect to any party
claiming that the Obligor’s use of any material Trade-mark, including the
Licensed Trade-marks, violates in any material respect any property right of
that party.  The Obligor further agrees
to prosecute in accordance with reasonable business practices any person
infringing any Trade-mark, including the Licensed Trade-marks, in any manner
that could reasonably be expected to have a Material Adverse Effect.


 


Section 4.12         Preservation
of Trade-marks.


 


The Obligor agrees to use its Trade-marks
in connection with its business sufficiently, and to take all other actions as
are reasonably necessary, to preserve such Trade-marks as trade-marks under the
laws of Canada and any relevant foreign jurisdiction (other than any such
Trade-marks which the Obligor determines, in its reasonable business judgement,
are no longer used or useful in its business or operations), provided that such
use with respect to the Licensed Trade-marks shall be subject to and in
accordance with the terms of the Trade-mark License Agreement.


 


Section 4.13         Maintenance
of Trade-mark Registration.


 


The Obligor shall, at its own expense,
diligently (i) do all things required by the Trade-mark License Agreement
to remain in good standing thereunder, and (ii) process all documents,
filings, applications, affidavits of use and applications for renewal required
by the Trade-marks Act (Canada), or any other
applicable law of Canada or any foreign equivalent thereof, to maintain
registrations in respect of its material registered Trade-marks, if any, and
shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all administrative and judicial remedies without
prior written consent of the Collateral Agent (other than with respect to
registrations and applications that the Obligor determines, in its reasonable
business judgement, are no longer useful or prudent to pursue).


 


Section 4.14         Future
Registered Trade-marks.


 


If registration for any Trade-mark which is
material and/or necessary to its business issues hereafter to the Obligor as a
result of any application now or hereafter pending before the Canadian
Intellectual Property Office – Trade-marks, or equivalent governmental agency
in any foreign jurisdiction, within 30 days of receipt of the certificate
evidencing such registration, the Obligor shall deliver to the Collateral Agent
a copy of such certificate, and a Confirmation of Security Interest in
Intellectual Property in the form of Schedule 4.1(a) in respect of such
Trade-mark, to


 


38





















 


the Collateral
Agent and at the expense of the Obligor, confirming the grant of a security
interest in such Trade-mark to the Collateral Agent hereunder.


 


Section 4.15             Representations and
Warranties Concerning Patents, Copyrights and Designs.


 


The Obligor represents and warrants that it
is the true and lawful owner of all rights in or otherwise has the right to use
(i) all trade secrets and proprietary information necessary to operate the
business of the Obligor (the “Trade Secret Rights”),
(ii) the Patents listed on Schedule 2.1(1)(h) and that such listed Patents
include all the patents and applications for patents that the Obligor owns as
of the Effective Date, (iii) the Copyrights listed in Schedule 2.1(1)(h)
and that such listed Copyrights constitute all registrations of copyrights and
applications for copyright registrations that the Obligor now owns, and
(iv) the Designs listed in Schedule 2.1(1)(h) and that such listed Designs
constitute all registrations of industrial designs and applications for
industrial design registrations that the Obligor now owns.  The Obligor further warrants that it has no
knowledge of any third party claim that any aspect of the Obligor’s present or
contemplated business operations infringes or will infringe any patent or any
copyright of any other Person or that the Obligor has misappropriated any trade
secret or proprietary information which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.  The Obligor represents and warrants that upon
the recordation of Confirmation of a Security Interest in Intellectual Property
in the form of Schedule 4.1(a) in the Canadian Intellectual Property Office -
Patents, together with filings of financial statements under the PPSA and
pursuant to the personal property security legislation enacted in Alberta, all
filings, registrations and recordings necessary or appropriate, to the extent
permitted by applicable law, to perfect the security interest granted to the
Collateral Agent in the Patents covered by this security agreement, if any,
under applicable federal and provincial law will have been accomplished.  The Obligor agrees, if and when it owns any
Patents, to execute such Confirmation of Security Interest in Intellectual
Property covering all right, title and interest in each such Patent, and the
associated goodwill, of the Obligor, and to record the same in the Canadian
Intellectual Property Office – Patents.


 


Section 4.16         Patent,
Copyright and Design Licenses and Assignments.


 


Except as otherwise permitted by the Secured
Debt Agreements, the Obligor hereby agrees not to divest itself of any right
under any material Patent or Copyright or Design other than in the ordinary
course of business, absent prior written approval of the Collateral Agent.


 


Section 4.17         Patent, Copyright
and Design Infringements.


 


The Obligor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to the Obligor with respect to any infringement,
contributory infringement or active inducement to infringe in any Patent,
Copyright or Design or with respect to any claim that the practice of any


 


39





















 


Patent, or the
use of any Copyright or Design violates any property right of any other Person
or with respect to any misappropriation of any Trade Secret Right or any claim
that practice of any Trade Secret Right violates any property rights of any
Person in each case, in any manner which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.  The Obligor further agrees, absent direction
of the Collateral Agent to the contrary, diligently to prosecute, in accordance
with its reasonable business judgment, any Person infringing or
misappropriating any Patent, Copyright, Design or Trade Secret Right, in each
case, to the extent that such infringement or misappropriation, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.


 


Section 4.18         Maintenance
of Patents, Copyrights and Designs.


 


At its own expense, the Obligor shall make
timely payment of all post-issuance or other fees and take all other actions
necessary to maintain in force its rights under each Patent, Copyright or
Design of the Obligor, if any, absent prior written approval of the Collateral
Agent (other than any such Patents, Copyrights or Designs which are no longer
used or useful in its business or operations).


 


Section 4.19         Prosecution
of Patent, Copyright and Design Applications.


 


At its own expense, the Obligor shall
diligently prosecute all material applications for Patents, Copyrights and
Designs listed in Schedule 2.1(1)(h), and shall not abandon any such
application prior to exhaustion of all administrative and judicial remedies, (other
than applications deemed by the Obligor to be no longer prudent to pursue)
absent written consent of the Collateral Agent.


 


Section 4.20         Future
Patents, Copyrights and Designs.


 


Within 30 days of the acquisition or
issuance of a Patent, a Copyright registration or Design, or of filing of an
application for a Patent, Copyright or Design, in each case, which is material
or necessary to its business, the Obligor shall deliver to the Collateral Agent
a copy of the certificate of registration of, or application for, such Patent,
Copyright or Design, with a Confirmation of Security Interest in the form of
Schedule 4.1(a) in respect of such Patent, Copyright or Design to the
Collateral Agent and at the expense of the Obligor, confirming the grant of a
security interest in such Patent, Copyright or Design to the Collateral Agent
hereunder.


 


Section 4.21         Remedies
Concerning Intellectual Property.


 


In addition to the remedies set forth in
Article 3, if the Security Interest becomes enforceable, the Collateral
Agent may by written notice to the Obligor, take any or all of the following
actions:


 


(a)           exercise, with respect to the Licensed Trade-marks, its rights
pursuant to Section 2.5;


 


(b)           declare the entire right, title and interest of the Obligor in and
to each of the Owned Trade-marks, if any, together with all trade-mark rights
and


 


40





















 


rights of protection to the same, vested in the
Collateral Agent for the benefit of the Secured Creditors, in which event such
rights, title and interest shall immediately vest in the Collateral Agent for
the benefit of the Secured Creditors, and the Collateral Agent shall be
entitled to exercise the power of attorney granted under Section 3.5 to
execute, cause to be acknowledged and notarized and record any document
required by the Canadian Trade-marks Office or any equivalent government agency
or office in any foreign jurisdiction in order to effect an absolute assignment
of all right, title and interest in any Owned Trade-mark to the Collateral
Agent and register the same with the applicable agency;


 


(c)           take and use or sell the Owned Trade-marks and the goodwill of the
Obligor’s business symbolized by the Owned Trade-marks and the right to carry
on the business and use the assets of the Obligor in connection with which the
Owned Trade-marks have been used;


 


(d)           in connection with the exercise of any of the other remedies
provided for in this security agreement or any other Credit Document, direct
the Obligor to refrain, in which event the Obligor shall refrain, from using
the Owned Trade-marks or the Licensed Trade-marks in any manner whatsoever,
directly or indirectly;


 


(e)           direct the Obligor to execute such other and further documents that
the Collateral Agent may reasonably request to further confirm the foregoing
and to transfer ownership of the Trade-marks and registrations and any pending
trade-mark application in the Canadian Intellectual Property Office -
Trade-marks or any equivalent government agency or office in any foreign
jurisdiction to the Collateral Agent;


 


(f)            declare the entire right, title, and interest of the Obligor in each
of the Patents, Copyrights and Designs, if any, vested in the Collateral Agent
for the benefit of the Secured Creditors, in which event such right, title, and
interest shall immediately vest in the Collateral Agent for the benefit of the
Secured Creditors, in which case the Collateral Agent shall be entitled to
exercise the power of attorney granted under Section 3.5 to execute, cause
to be acknowledged and notarized and record any document required by the
Canadian Intellectual Property Office – Patents, - Copyrights or - Industrial
Designs, as the case may be, or any equivalent government agency or office in
any foreign jurisdiction in order to effect an absolute assignment of all
right, title and interest in each Patent, each registered Copyright and each
registered Design, in each case if any, to the Collateral Agent and register
the same with the applicable agency;


 


41





















 


(g)           in connection with the exercise of any of the other remedies
provided for in this security agreement or any other Collateral Document, take
and practice or sell the Patents, Copyrights and Designs, if any;


 


(h)           in connection with the exercise of any of the other remedies
provided for in this security agreement or any other Collateral Document,
direct the Obligor to refrain, in which event the Obligor shall refrain, from
practising the Patents, the Copyrights and the Designs, if any, directly or
indirectly; and


 


(i)            the Obligor shall execute such other and further documents as the
Collateral Agent may reasonably request further to confirm the foregoing and to
transfer ownership of the Patents, Copyrights and Designs, if any, to the
Collateral Agent for the benefit of the Secured Creditors.


 


Section 4.22         Status of
Accounts Collateral.


 


The Obligor agrees that it shall, with
respect to the Collateral (i) maintain books and records pertaining to the
Collateral in such detail, form and scope as the Collateral Agent may
reasonably require, and (ii) if any amount payable under or in connection
with any account in excess of Cdn.$150,000 is evidenced by a promissory note,
letter of credit or other instrument, immediately pledge, endorse, assign and
deliver to the Collateral Agent the promissory note or instrument, as
additional Collateral.


 


Section 4.23         Business
Outside Certain Jurisdictions.


 


The Obligor agrees that it shall notify the
Collateral Agent in writing:


 


(a)           at least 10 Business Days prior to any of the following changes
becoming effective, of (i) any proposed change in the location of any
place of business of the Obligor or any of its Subsidiaries and
(ii) tangible property of the Obligor or any of its Subsidiaries being
stored in any place outside the Province(s) of Ontario, Quebec, Alberta,
British Columbia, Manitoba and Saskatchewan; and


 


(b)           of (i) any change, to the knowledge of the Obligor, in the
location of the chief executive office or head office of each account debtor of
the Obligor and each of its Subsidiaries to a jurisdiction other than any
province of Canada or state in the United States of America; or (ii) any
new account debtor with its chief executive office or head office in a
jurisdiction other than any province of Canada or state in the United States of
America; or (iii) any change, to the knowledge of the Obligor, in the
location of Units leased to customers of the Obligor and each of its
Subsidiaries to a jurisdiction other than the jurisdictions specified under the
heading “Leased Units” in Schedule 4.1(d).


 


42





















 


Section 4.24         Insurance.


 


Except as otherwise permitted by the Credit
Documents, the Obligor will do nothing to impair the rights of the Collateral
Agent in the Collateral.  The Obligor
will at all times keep its Inventory and equipment (including the Units)
insured in favour of the Collateral Agent, at the Obligor’s own expense to the
extent required by the Amended and Restated Credit Agreement against fire,
theft and all other risks to which such Collateral may be subject; all policies
or certificates with respect to such insurance shall be endorsed to the
Collateral Agent’s reasonable satisfaction for the benefit of the Collateral
Agent (including by naming the Collateral Agent as additional insured and loss
payee) and deposited with the Collateral Agent. 
If the Obligor shall fail to insure such Inventory and equipment
(including the Units) to the extent required by the Amended and Restated Credit
Agreement, or if the Obligor shall fail to so endorse and deposit all policies
or certificates with respect thereto, the Collateral Agent, shall have the
right (but shall be under no obligation), upon five Business Days’ prior
written notice to the Obligor, to procure such insurance and the Obligor agrees
to reimburse the Collateral Agent for all reasonable costs and expenses of
procuring such insurance.  Upon the
occurrence and during the continuance of an Event of Default (or a Default
under Section 9.1(e) of the Amended and Restated Credit Agreement), the
Collateral Agent may apply any proceeds of such insurance required to be
maintained pursuant to this Section 4.24 in accordance with
Section 5.10.  The Obligor assumes
all liability and responsibility in connection with the Collateral acquired by
it and the liability of the Obligor to pay the Obligations shall in no way be
affected or diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to the
Obligor.


 


Section 4.25         Perfection
and Protection of Security Interest.


 


The Obligor agrees that it shall perform,
execute and deliver, and cause its Subsidiaries to perform, execute and
deliver, all acts, agreements, and other documents as may be reasonably
requested by the Collateral Agent at any time to register, file, signify,
publish, perfect, maintain, protect, and enforce the Security Interest
including (i) executing, recording and filing of the Credit Documents and
financing or continuation statements in connection therewith, in form and
substance satisfactory to the Collateral Agent, acting reasonably, and pay all
taxes, fees and other charges payable in connection therewith,
(ii) delivering to the Collateral Agent the originals of all instruments,
documents and chattel paper and all other Collateral of which the Collateral
Agent reasonably determines it should have physical possession in order to
perfect and protect the Security Interest, duly endorsed or assigned to the
Collateral Agent, (iii) delivering to the Collateral Agent warehouse
receipts covering any portion of the Collateral located in warehouses and for
which warehouse receipts are listed, (iv) placing notations on its books
of account to disclose the Security Interest, (v) delivering to the
Collateral Agent all letters of credit on which the Obligor or any of its
Subsidiaries is named beneficiary, and (vi) taking


 


43





















 


such other
steps as are deemed necessary by the Collateral Agent, acting reasonably, to
maintain the Security Interest.


 


Section 4.26         Additional
Security.


 


The Obligor agrees that it shall grant, and
cause each of its Subsidiaries to grant, to the Collateral Agent, for the
benefit of the Secured Creditors, security interests and mortgages in such
assets and properties of the Obligor or such Subsidiary as are not covered by
the original Credit Documents or as may be reasonably requested from time to
time by the Collateral Agent pursuant to documentation reasonably satisfactory
in form and substance to the Collateral Agent constituting valid and
enforceable perfected security interests superior to and prior to the rights of
all third Persons and subject to no other Liens, except for Permitted Liens.


 


Section 4.27         Financing
Statements.


 


The Obligor agrees to execute and deliver
to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time request or as are necessary in the reasonable opinion of the Collateral
Agent to establish and maintain a valid, enforceable and first priority
(subject only to Permitted Liens) perfected security interest in the Collateral
as provided herein and in the other rights and security contemplated hereby all
in accordance with the PPSA or the personal property security legislation as
enacted in any and all relevant jurisdictions or any other relevant law.  The Obligor will pay any applicable filing
fees, recordation taxes and related expenses relating to its Collateral.  The Obligor hereby authorizes the Collateral
Agent to file any such financing statements without the signature of the
Obligor where permitted by law.


 


Section 4.28         Deposit Accounts.


 


(1)           The Obligor does not maintain, and shall not at any time after the
Effective Date establish or maintain, any demand, time, savings, passbook or
similar account, except for such accounts which are permitted pursuant to
Section 8.16 of the Amended and Restated Credit Agreement.  Schedule 4.28 accurately sets forth each
account maintained by the Obligor (including a description thereof and the
respective account number), the name of the respective bank with which such
account is maintained, and the branch of the bank at which such account is
maintained.  For each account, the
Obligor shall cause the bank with which the account is maintained to execute
and deliver to the Collateral Agent, within 30 days after the Collateral Agent’s
request therefor, a “control agreement” in the form of Exhibit “A” to
Schedule 4.28 (appropriately completed) with such changes thereto as may
be acceptable to the Collateral Agent. 
The Collateral Agent and the Obligor agree that: (i) the control
agreement regarding deposit accounts between the Obligor, The Bank of Nova
Scotia and Bankers Trust Company (now Deutsche Bank Trust


 


44





















 


Company Americas), a predecessor in interest of the
Collateral Agent, dated as of May 10, 2002 (the “Existing Control Agreement”), which control agreement has
been assigned by Deutsche Bank Trust Company Americas to the Collateral Agent
by an agreement of even date herewith, constitutes a control agreement for the
purposes of this Section 4.28; and (ii) the Existing Control Agreement is
confirmed in all respects and shall continue in full force and effect.  If any bank with which such account is
maintained refuses to, or does not, enter into such a control agreement, the
Obligor shall promptly (and in any event within 30 days of the date of the
respective request) close the respective account and transfer all balances
therein to another account meeting the requirements of this Section 4.28
(with respect to which a “control agreement” meeting the foregoing requirements
has been entered into and is in full force and effect).  If any bank with which an account is
maintained refuses to subordinate all of its claims with respect to such
account to the Collateral Agent’s security interest therein on terms
satisfactory to the Collateral Agent, then the Collateral Agent, at its option,
may (x) require that such account be terminated in accordance with the
immediately preceding sentence or (y) agree to a control agreement without such
subordination, provided that in such event the Collateral Agent may at any
time, at its option, subsequently require that such account be terminated
(within 30 days after notice from the Collateral Agent) in accordance with the
requirements of the immediately preceding sentence.


 


(2)           The Obligor shall not establish any new demand, time, savings, passbook
or similar accounts, except for accounts established and maintained with banks
and meeting the requirements of Section 4.28(1).  At the time such an account is established,
to the extent so requested by the Collateral Agent, the appropriate control agreement
shall be executed in accordance with the requirements of Section 4.28(1)
and the Obligor shall furnish to the Collateral Agent a supplement to Schedule
4.28 containing the relevant information with respect to the respective account
and the bank with which the same is established.


 


(3)           The Collateral Agent (x) shall not deliver a Notice of
Exclusive Control (as defined in the Form of Control Agreement attached hereto
as Exhibit “B”) pursuant to any “control agreement” (other than with respect to
any account maintained with the Collateral Agent) to any bank with which the
Obligor has established an account unless an Event of Default then exists and
is continuing, (y) shall not give instructions (as contemplated in the
first sentence of Section 2(1) of Exhibit “B”) as to the withdrawal or
disposition of funds in any account in any such “control agreement” (other than
with respect to any account maintained with the Collateral Agent) unless an
Event of Default then exists and is continuing, and (z) shall provide the
Borrower in accordance with the notice provisions in the Amended and Restated
Credit


 


45





















 


Agreement with a copy of any such Notice of Exclusive
Control delivered pursuant to any such “control agreement”.


 


ARTICLE 5

GENERAL


 


Section 5.1            Notices.


 


Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy,
cable or courier service and all such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be
effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Collateral Agent or
the Obligor shall not be effective until received by the Collateral Agent or
the Obligor, as the case may be.  All
notices and other communications shall be in writing and addressed as follows:


 


(a)           to the Obligor
at:


 


c/o
Williams Scotsman, Inc.

8211 Town Center Drive

Baltimore, Maryland 21236-5997


 


	
  Attention:

  	
  John B. Ross

  
	
   

  	
   

  
	
  Telephone:

  	
  (410)931-6000 ext.6105

  
	
  Facsimile:

  	
  (410)931-6117

  



 


With a copy
to:


 


Davies
Ward Phillips & Vineberg LLP

1 First Canadian Place

44th Floor

P.O. Box 63

Toronto, Ontario

M5X 1B1


 


	
  Attention:

  	
  Kent F.
  Beattie

  
	
   

  	
   

  
	
  Telephone:

  	
  (416) 367-6927

  
	
  Facsimile:

  	
  (416) 863-0871

  



 


46





















 


(b)           to the Collateral Agent
at:


 


Bank of America, N.A.

335 Madison Avenue

New York, New York 10017


 


	
  Attention:

  	
  Business
  Capital/URGENT

  
	
   

  	
   

  
	
  Telephone:

  	
  (212)
  503-7632

  
	
  Facsimile:

  	
  (212)
  503—7330

  



 


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


 


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


 


(e)           to the Senior Secured Notes Trustee or any other Second Lien
Creditor, at:


 


U.S. Bank, National Association

60 Livingston Avenue

EP-MN-WS3C

St. Paul, MN 55107-2292


 


	
  Attention:   Richard Prokosch

  
	
   

  	
   

  
	
  Telephone:  (651)
  495-3918

  
	
  Facsimile:  (651) 495-8097

  



 


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


 


Section 5.2            Discharge.


 


(1)           The Security Interest shall be discharged upon, but only upon the
Termination Date.  Upon discharge of the
Security Interest and at the request and expense of the Obligor, the Collateral
Agent shall execute and deliver to the Obligor such releases, discharges,
financing statements and other documents or instruments as the Obligor may
reasonably require and transfer and deliver to the Obligor the Collateral in
its possession.


 


(2)           So long as no payment default on any of the Obligations is in
existence or would exist after the application of proceeds as provided below,
the Collateral Agent shall, at the request of the Obligor, release any or all
of the Collateral, provided that (x) such release is permitted by the
terms of the Secured Debt Agreements or otherwise has been approved in writing
by the Required Lenders or, to the extent required, all of the Lenders and
(y) the proceeds of


 


47





















 


such Collateral are applied to the extent required
pursuant to the respective Secured Debt Agreements or any consent or waiver
with respect thereto.  Furthermore, upon
the release of the Obligor from the Guarantee in accordance with the provisions
thereof, the Obligor (and the Collateral at such time assigned by the Obligor
pursuant hereto) shall be released from this security agreement.


 


(3)           At any time that the Obligor desires that the Collateral Agent take
any action to give effect to any release of Collateral pursuant to the
foregoing Section 5.2(1) or Section 5.2(2), it shall deliver to the
Collateral Agent a certificate signed by an authorized officer stating that the
release of the respective Collateral is permitted pursuant to
Section 5.2(1) or Section 5.2(2); provided that, so long as no
Default or Event of Default has occurred and is continuing, in the event the Obligor
sells Units or other Inventory in the ordinary course as (and to the extent)
permitted elsewhere in the Credit Documents, the Obligor shall not be required
to deliver a certificate in connection therewith and the release of such Units
or other Inventory shall be effected as contemplated by the Bailee Agreement
and Custodian Agreement.  In the event
that any part of the Collateral is released as provided in Section 5.2(2),
the Collateral Agent, at the request and expense of the Obligor, will duly assign,
transfer and deliver to the Obligor or its designee (without recourse and
without any representation or warranty) such of the Collateral as is then being
(or has been) so sold and as may be in the possession of the Collateral Agent
and has not theretofore been released pursuant to this security agreement.  The Collateral Agent shall have no liability
whatsoever to any Secured Creditor as the result of any release of Collateral
by it as permitted by this Section 5.2. 
Upon any release of Collateral pursuant to Section 5.2(1) or
Section 5.2(2), none of the Secured Creditors shall have any continuing
right or interest in such Collateral, or the proceeds thereof.


 


(4)           To the extent not otherwise provided in preceding clauses, the
Collateral Agent shall without the consent of any Secured Creditor, release all
or any portion of the Collateral securing the Second Lien Obligations to the
extent provided in the Senior Secured Notes Indenture.


 


Section 5.3            No
Merger, Survival of Representations and Warranties.


 


This security agreement shall not operate
by way of merger of any of the Obligations and no judgment recovered by the
Collateral Agent or any of the Secured Creditors shall 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
Collateral Agent and the Secured Creditors in respect of the Obligations.  The representations and warranties herein set
forth or contained in any certificates or documents delivered to the Collateral
Agent or the Secured Creditors pursuant to this security agreement or the other
Credit Documents shall not merge in or be prejudiced by and shall survive any
accommodation under


 


48





















 


the Amended
and Restated Credit Agreement and shall continue in full force and effect until
the Security Interest has been discharged in accordance with Section 5.2.


 


Section 5.4            Further
Assurances.


 


The Obligor shall from time to time,
whether before or after the Security Interest shall have become enforceable, do
all acts and things and execute and deliver all transfers, assignments and
instruments as the Collateral Agent may reasonably require for
(i) protecting the Collateral, (ii) perfecting the Security Interest,
and (iii) exercising all powers, authorities and discretions conferred
upon the Collateral Agent pursuant to or in connection with this security
agreement, or the other Credit Documents. 
The Obligor shall, from time to time after the Security Interest has
become enforceable, do all acts and things and execute and deliver all
transfers, assignments and instruments as the Collateral Agent may reasonably
require for facilitating the sale or other disposition of the Collateral in
connection with its realization.


 


Section 5.5            Supplemental
Security.


 


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


 


Section 5.6            Successors
and Assigns.


 


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


 


Section 5.7            Severability.


 


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


 


Section 5.8            Waivers,
etc.


 


None of the terms and conditions of this
security agreement or any of the other Collateral Documents to which the
Obligor is a party may be changed, waived, modified or varied in any manner
except as provided in the U.S. Security Agreement, provided that for purposes of
this Section 5.8 the term “Assignor” as defined in the U.S. Security Agreement
means “Obligor” as defined herein. 
Nothing in this section shall be interpreted to derogate from the
provisions contained in Section 5.2 of this security agreement.


 


49





















 


Section 5.9            Collateral
Agent and/or Secured Creditors not a Partner or Limited Liability Company
Member


 


(1)           Nothing herein shall be construed to make the Collateral Agent or
any other Secured Creditor liable as a member of any limited liability company,
unlimited liability company or partnership and neither the Collateral Agent nor
any other Secured Creditor by virtue of this security agreement or otherwise
(except as referred to in the following sentence) shall have any of the duties,
obligations or liabilities of a member of any limited liability company,
unlimited liability company or partnership. 
The parties hereto expressly agree that, unless the Collateral Agent
shall become the absolute owner of Collateral consisting of the entire interest
owned by the Obligor in a limited liability company, unlimited liability
company or partnership pursuant hereto, this security agreement shall not be
construed as creating a partnership or joint venture among the Collateral
Agent, any other Secured Creditor and/or the Obligor.


 


(2)           Except as provided in the last sentence of Section 5.9(1), the
Collateral Agent, by accepting this security agreement, did not intend to
become a member of any limited liability company, unlimited liability company
or partnership or otherwise be deemed to be a co-venturer with respect to the
Obligor or any limited liability company, unlimited liability company or
partnership either before or after an Event of Default shall have occurred.  The Collateral Agent shall have only those
powers set forth herein and the Secured Creditors shall assume none of the
duties, obligations or liabilities of a member of any limited liability
company, unlimited liability company or partnership or the Obligor except as
provided in the last sentence of Section 5.9(1).


 


(3)           The Collateral Agent and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of the Obligor as a result of
the Security Interest hereby granted.


 


(4)           The acceptance by the Collateral Agent of this security agreement,
with all the rights, powers, privileges and authority so created, shall not at
any time or in any event obligate the Collateral Agent or any other Secured
Creditor to appear in or defend any action or proceeding relating to the
Collateral to which it is not a party, or to take any action hereunder or
thereunder, or to expend any money or incur any expenses or perform or
discharge any obligation, duty or liability under the Collateral.


 


Section 5.10         Application
of Proceeds.


 


(1)           All monies collected by the Collateral Agent upon any sale or other
disposition of the Collateral, together with all other monies received by the
Collateral Agent hereunder or under any other Collateral Document which
requires proceeds of Collateral to be applied in accordance with this security


 


50





















 


agreement, shall be applied and payments shall be made
in accordance with Section 7.4 of the U.S. Security Agreement.


 


(2)           It is understood that the Obligor shall remain liable to the extent
of any deficiency between (x) the amount of the proceeds of the Collateral
and (y) the aggregate outstanding amount of the Obligations.


 


Section 5.11         Indemnity.


 


(1)           The Obligor agrees to indemnify, reimburse and hold the Collateral
Agent, each other Secured Creditor that is an indemnitee under Section 6 of
Annex N to the U.S. Security Agreement and their respective successors,
permitted assigns, employees, affiliates and agents (referred to individually
as “Indemnitee”, and collectively as “Indemnitees”) harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs and expenses (including reasonable fees and
disbursements of counsel and other professionals) (for the purposes of this
Section 5.11 the foregoing are collectively called “expenses”)
of whatsoever kind and nature imposed on, asserted against or incurred by any
of the Indemnitees in any way relating to or arising out of this security
agreement, any other Secured Debt Agreement to which the Obligor is a party or
any other document executed in connection herewith or therewith to which the
Obligor is a party or in any other way connected with the administration of the
transactions contemplated hereby or thereby or the enforcement of any of the
terms of, or the preservation of any rights hereunder or thereunder, or in any
way relating to or arising out of the manufacture, ownership, ordering,
purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the
Collateral (including latent or other defects, whether or not discoverable),
the violation of laws any country, state, province or other Governmental
Entity, any tort (including claims arising or imposed under the doctrine of
strict liability, or for or on account of injury or death of any Person
(including any Indemnitee), or property damage), or contract claim; provided
that no Indemnitee shall be indemnified pursuant to this Section 5.11(1)
for losses, damages or liabilities to the extent caused by the gross negligence
or wilful misconduct of such Indemnitee (as determined by a court of competent
jurisdiction in a final and unappealable decision).  The Obligor agrees that upon written notice
by any Indemnitee of the assertion of such liability, obligation, damage,
injury, penalty, claim, demand, action, suit or judgement, the Obligor shall
assume full responsibility for the defence thereof.  Each Indemnitee agrees to use its best
efforts to promptly notify the Obligor of any such assertion of which such
Indemnitee has knowledge.


 


(2)           Without limiting the application of Section 5.11(1), the
Obligor agrees to pay, or reimburse the Collateral Agent for any and all
reasonable fees, costs and expenses of whatever kind or nature incurred in
connection with the creation,


 


51





















 


preservation or protection of the Collateral Agent’s
Liens on, and the Security Interest in, the Collateral, including all fees and
taxes in connection with the recording or filing of instruments and documents
in public offices, payment or discharge of any taxes or Liens upon or in
respect of the Collateral, premiums for insurance paid by the Collateral Agent
with respect to the Collateral and all other fees, costs and expenses in
connection with protecting, maintaining or preserving the Collateral and the
Collateral Agent’s interest therein, whether through judicial proceedings or otherwise,
or in defending or prosecuting any actions, suits or proceedings arising out of
or relating to the Collateral.


 


(3)           Without limiting the application of Section 5.11(1) or
Section 5.11(2), the Obligor agrees to pay, indemnify and hold each Indemnitee
harmless from and against any loss, costs, damages and expenses which such
Indemnitee may suffer, expend or incur in consequence of or growing out of any
misrepresentation by the Obligor in this security agreement, any other Secured
Debt Agreement to which the Obligor is a party or in any writing contemplated
by or made or delivered pursuant to or in connection with this security
agreement or any other Secured Debt Agreement to which the Obligor is a party.


 


(4)           If and to the extent that the obligations of the Obligor under this
Section 5.11 are unenforceable for any reason, the Obligor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.


 


Section 5.12         Indemnity
Obligations Secured by Collateral; Survival.


 


Any amounts paid by any Indemnitee as to
which such Indemnitee has the right to reimbursement shall constitute
Obligations secured by the Collateral. 
The indemnity obligations of the Obligor contained in Section 5.11
and Section 5.12 shall continue in full force and effect notwithstanding
the full payment of all of the other Obligations and notwithstanding the full
payment of all the Notes issued and Loans made, under the Amended and Restated
Credit Agreement, the termination of all Interest Rate Agreements entered into
with the Interest Rate Creditors, the full repayment of all the outstanding
Senior Secured Notes and the payment of all other Obligations and
notwithstanding the discharge thereof.


 


Section 5.13         Collateral
Agent.


 


By accepting the benefits of this security
agreement, each Secured Creditor acknowledges and agrees that the rights and
obligations of the Collateral Agent shall be as set forth in this security
agreement and in Annex N to the U.S. Security Agreement.  Notwithstanding anything to the contrary
contained in Section 5.8 of this security agreement or Section 11.10 of
the Amended and Restated Credit Agreement, this Section 5.13, and the
duties and obligations of the Collateral Agent


 


52





















 


set forth in
this Section 5.13, may not be amended or modified without the consent of
the Collateral Agent.


 


Section 5.14         Governing
Law.


 


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


 


Section 5.15         Conflicts.


 


Notwithstanding anything to the contrary
contained in this security agreement, in the event of any conflict between the
provisions of this security agreement, the Intercreditor Agreement or any other
Collateral Document and the provisions of the Senior Secured Notes Documents,
the terms of this security agreement, the Intercreditor Agreement and the other
Collateral Documents shall prevail.


 


Section 5.16         Acknowledgement
and Confirmation


 


The Obligor hereby acknowledges, confirms
and agrees to and with the Collateral Agent and each of the First Lien
Creditors that:


 


(1)           it has been provided with and has reviewed the terms and conditions
of the Amended and Restated Credit Agreement and hereby consents to the terms
and conditions of the Amended and Restated Credit Agreement;


 


(2)           it has been provided with and has reviewed the terms and conditions
of this security agreement and hereby consents to the terms and conditions of
this security agreement;


 


(3)           the Guarantee extends to, inter
alia, the obligations of the Borrower now or hereafter incurred
under, arising out of or in connection with the Amended and Restated Credit
Agreement, as the same may be from time to time further amended, modified,
extended, renewed, replaced, restated or supplemented and including any
agreement extending the maturity of (including the inclusion of additional
borrowers or guarantors thereunder or any increase in the amount borrowed) all
or any portion of the indebtedness under such agreement or any successor
agreement, whether or not with the same agent, trustee, representative, lenders
or holders; and


 


(4)           the Guarantee and this security agreement are amendments and
restatements of the Canadian Subsidiaries Guaranty and the Original Canadian
Security Agreement, respectively, and do not constitute novations thereof, and
the obligations thereunder are in full force and effect notwithstanding the
amendment and restatement of the Existing Credit Agreement pursuant to the
Amended and Restated Credit Agreement and the amendment and restatement of the
Original Canadian Security Agreement pursuant to this security agreement and
each Credit Document to which it is a party continues


 


53





















 


to be and constitutes a legal, valid and binding
obligation of the Obligor enforceable in accordance with its terms.


 


REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK


 


54





















 


IN WITNESS WHEREOF each of the Obligor and the Collateral Agent has caused this
security agreement to be executed by its duly authorized officer as of the date
first above written.


 


	
   

  	
  WILLIAMS
  SCOTSMAN OF

  CANADA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom Bruyea

  	
   

  
	
   

  	
   

  	
  Name: Tom Bruyea

  	
   

  
	
   

  	
   

  	
  Title: Authorized Signing Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as

  Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin W. Corcoran

  	
   

  
	
   

  	
   

  	
  Authorized Signing Officer

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  
					



 


55





















 


SCHEDULE
2.1(1)(f)

SECURITIES AND INSTRUMENTS


 


SECURITIES:


 


	
  Issuer

  	
   

  	
  Class of Securities

  	
   

  	
  Number of

  Securities

  	
   

  	
  Certificate

  Number

  	
   

  
	
   

  	
   

  	
  Nil.

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


INSTRUMENTS:


 


	
  Issuer

  	
   

  	
  Issue: Date and

  Type of Instrument

  	
   

  	
  Principal

  Amount of

  Instrument

  	
   

  	
  Certificate

  Number

  	
   

  
	
   

  	
   

  	
  Nil.

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


SCHEDULE
2.1(1)(h)

INTELLECTUAL PROPERTY


 


Patents,
Patent Applications and Patent Licenses


 


Patents


 


None.


 


Patent Applications


 


None.


 


Patent Licenses


 


None.


 


Trade-marks,
Trade Names, Predecessor Names and Trade-mark Licenses


 


 


Registered Trade-marks


 


None.


 


Other Trade-marks


 


None.


 


Trade-mark Licenses


 


The license to use the name of its parent, Williams
Scotsman, Inc. pursuant to a trade-mark license date November 23, 1998 between
Williams Scotsman, Inc. (as Licensor) and Williams Scotsman of Canada, Inc. (as
Licensee).


 


Copyrights
and Copyright Licenses


 


Copyrights


 


None.


 


Other
Copyrights


 


None.


 


Copyright
Licenses


 


None.


 





















 


Designs
and Design Licenses


 


Registered
Designs


 


None


 


Applications


 


None.


 


Design
Licenses


 


None.


 


2





















 


SCHEDULE
4.1(a)

FORM OF CONFIRMATION OF SECURITY INTEREST IN INTELLECTUAL

PROPERTY


 


WHEREAS:


 


A.                                    Williams
Scotsman of Canada, Inc. (the “Debtor”), a
corporation incorporated and existing under the laws of the Province of Ontario
with offices at [address], is the owner of the
trade-marks/patents/copyrights/industrial designs set forth in Exhibit A
hereto, the registrations and applications for the
trade-marks/patents/copyrights/industrial designs identified therein and the
underlying goodwill associated with such
trade-marks/patents/copyrights/industrial designs (collectively, the “Trade-Marks/ Patents/Copyrights/Industrial
Designs”); and


 


B.                                    Bank
of America, N.A., as agent for certain lenders (the “Collateral
Agent”), with offices at 335 Madison Avenue, New York, New York, has
entered into an agreement with the Debtor, as reflected by a separate document
entitled the “Amended and Restated Security Agreement”
dated as of March 26, 2002, amended and restated as of August 18, 2003 and
amended and restated as of June 28, 2005, by which the Debtor granted to the
Collateral Agent, a security interest in certain property, including the
Trade-Marks/Patents/Copyrights/Industrial Designs, in consideration of the
provision of certain credit facilities to the Debtor;


 


NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged and in accordance with the terms and
obligations set forth in the Amended and Restated Security Agreement, the
Debtor confirms the grant to the Collateral Agent of a security interest in and
to the Trade-Marks/Patents/Copyrights/Industrial Designs.


 


DATED at [l] on this [l] day of [l], [l].


 


	
   

  	
  WILLIAMS SCOTSMAN OF

  CANADA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Authorized
  Signing Officer

  



 


DATED at Toronto on this [l] day of [l], [l], before me appeared and the person who signed this instrument, who
acknowledged that [he/she] signed it as a free act on [his/her] behalf or on
behalf of the corporation identified and referred to herein as the Debtor.


 


	
   

  	
   

  	
   

  
	
   

  	
  Signature of
  Notary Public

  



 





















 


EXHIBIT “A” TO CONFIRMATION

TRADE-MARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS


 





















 


SCHEDULE
4.1(c)

FINANCING STATEMENTS


 


British
Columbia


 


	
  Registration No.

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Collateral

  
	
  214559B as
  amended by 431604C

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  All present
  and after-acquired personal property of the debtor, excluding consumer goods.

  
	
  294542A, as
  amended by 214462B and 431601C

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  All present
  and after-acquired personal property of the debtor, excluding consumer goods.

  
	
  431563C

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  All present
  and after-acquired personal property of the debtor, excluding consumer goods.

  



 


Alberta


 


	
  Registration No.

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Collateral

  
	
  01090516889

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Caterpillar
  Financial Services Limited

  	
   

  	
  1996
  Caterpillar R80 4WD and all proceeds therefrom

  
	
  01101223426

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Caterpillar
  Financial Services Limited

  	
   

  	
  2001 Cat
  Eagle Picher RT80-4WD and all proceeds therefrom

  
	
  02032214369,
  as amended by 03081428546, 05062410708 and 05062826143

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  All present
  and after-acquired personal property of the debtor. Proceeds: chattel paper,
  documents of title, goods, instruments, intangibles, money and securities.

  
	
  02032214443
  as amended by 03081428611, 05062410724 and 05062826176

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  Land charge

  
	
  03081428736
  as amended by 

  	
   

  	
  Williams
  Scotsman of 

  	
   

  	
  Bank of
  America, N.A., 

  	
   

  	
  All present
  and after-acquired personal property of the debtor 

  



 





















 


	
  05062410732
  and 05062826200

  	
   

  	
  Canada, Inc.

  	
   

  	
  as
  Collateral Agent

  	
   

  	
  Proceeds:
  goods, chattel paper, securities documents of title, instruments, money and
  intangibles.

  
	
  03081428801
  as amended by 05062410773

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  Land charge

  
	
  05062410641
  as amended by 05062826242

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  All present
  and after-acquired personal property of the debtor Proceeds: goods, chattel
  paper, securities documents of title, instruments, money and intangibles.

  
	
  05062803068 as amended by 05062826267

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  Land charge

  



 


Saskatchewan


 


	
  Registration No.

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Collateral

  
	
  117819526

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank
  of America, N.A., as Administrative Agent

  	
   

  	
  All present
  and after-acquired personal property of the debtor

  
	
  119826155

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank
  of America, N.A., as Administrative Agent

  	
   

  	
  All present
  and after-acquired personal property of the debtor

  
	
  122224184

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank
  of America, N.A., as Administrative Agent

  	
   

  	
  All present
  and after-acquired personal property of the debtor

  



 


Manitoba


 


	
  Registration No.

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Collateral

  
	
  200205924506 as amended by
  200317069714, 200511226111 and 200511232413

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  The security
  interest is taken in all of the debtor’s present and after-acquired personal
  property

  



 


2





















 


	
  200317212703,
  as amended by 200511225719 and 200511231719

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  The security
  interest is taken in all of the debtor’s present and after-acquired personal
  property

  
	
  200510460501, as amended by 200511226910 and 200511232812

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Collateral Agent

  	
   

  	
  The security
  interest is taken in all of the debtor’s present and after-acquired personal
  property

  



 


Quebec


 


	
  Registration No.

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Collateral

  
	
  03-0225668-0002

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Deutsche
  Bank Trust Company Americas to be assigned at closing to Bank of America,
  N.A., as Collateral Agent

  	
   

  	
  All present
  and future movable property of the grantor, tangible or intangible, wherever
  situate, including, without limitation, all of its claims, property in stock,
  equipment, present and future, intellectual property, present and future.

  
	
  05-0371075-001

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank
  of America, N.A., as Collateral Agent

  	
   

  	
  All present
  and future movable property of the grantor, tangible or intangible, wherever
  situate, including, without limitation, all of its claims, property in stock,
  equipment, present and future, intellectual property, present and future.

  



 


3





















 


Ontario


 


	
  File No.

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Collateral

  
	
  616311198

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Administrative Agent

  	
   

  	
  I, E, A, O,
  MVI

  
	
  087060177

  	
   

  	
  Williams
  Scotsman of Can Inc.

  	
   

  	
  Ottawa South
  Truck Centre Ltd.

  	
   

  	
  E, MVI, 1992
  Ford CTV

  
	
  897292953

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Administrative Agent

  	
   

  	
  I, E, A, O,
  MVI

  
	
  881598465

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Bank of
  America, N.A., as Administrative Agent

  	
   

  	
  I, E, A, O,
  MVI

  
	
  877035546

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Caterpillar
  Financial Services Ltd.

  	
   

  	
  E,O,MVI,
  2001 Caterpillar RT80-4WD VIN

  
	
  876224853

  	
   

  	
  Williams
  Scotsman of Canada, Inc.

  	
   

  	
  Caterpillar
  Financial Services Ltd.

  	
   

  	
  E,O,MVI,
  1996 Eagle Picher R80 4WD VIN

  



 


4





















 


SCHEDULE
4.1(d)

LOCATION OF CHIEF EXECUTIVE OFFICE AND CORPORATE MATTERS


 


Chief Executive Office:


 


12221
Barlow Trail NE

Calgary, AB T3J 4S1


 


Other Record Locations:


 


DAVIES WARD PHILLIPS & VINEBERG LLP

P.O. Box 6300

Suite 4400

1 First Canadian Place

Toronto, ON M5X 1B1


 


Trade Names:


 


None.


 


Jurisdictions of
Operation:


 


Ontario, Manitoba, Saskatchewan, Alberta, British Columbia and Quebec


 


Predecessor Names:


 


None.


 





















 


SCHEDULE
4.1(e)

LOCATION
OF INVENTORY AND EQUIPMENT


 


Locations of Inventory and
Equipment:


 


Eastern Offices


 


Williams
Scotsman of Canada, Inc.


13932 Woodbine
Avenue (PO Box 89)


Gormley, ON
L0H 1G0


Phone: (905)
726-3551


Fax: (905)
726-3543


 


Williams
Scotsman of Canada, Inc.


1271
Confederation Street


Sarnia, ON N7S
4M7


Phone: (519)
336-1010


Fax: (519)
336-5175


 


Williams
Scotsman of Canada, Inc.


3455 Hawthorne
Road


Ottawa, ON K1G
4G2


Phone: (613)
736-9390


Fax: (613)
736-0881


 


Williams
Scotsman of Canada, Inc.


715 - Dubois
St.  CP 555


St. Eustache,
Qc.  J7R 4Z1


Phone: (450)
473-4220


Fax: (450)
473-4290


 


Western Offices


 


Williams
Scotsman of Canada, Inc.


12221 Barlow
Trail NE


Calgary, AB T3J
4S1


Phone: (403)
241-5357


Fax: (403)
208-0405


 





















 


 


Williams
Scotsman of Canada, Inc.


11755 - 231
Street NW


Edmonton, AB
T5S 2C5


Phone: (780)
454-4551


Fax: (780)
454-4816


 


Williams
Scotsman of Canada, Inc.


Hwy 63 North
at Confederation Way


Mailing Address
Box 5762


Fort McMurray,
AB T6H 4V9


Phone:
780-743-4899


Fax:
780-743-4897


 


Williams
Scotsman of Canada, Inc.


19520
Telegraph Trail


Surrey, BC V4N
4H1


Phone: (604)
513-5097


Fax: (604)
513-5067


 


Leased Units:


 


Ontario, Manitoba, Saskatchewan, Alberta, British Columbia and Quebec


 


2





















 


SCHEDULE
4.1(g)

TRADE NAMES


 


None.


 





















 


SCHEDULE 4.28

DEPOSIT ACCOUNTS


 


Bank of Nova
Scotia

44 King Street West

Toronto, Ontario

Canada M5H 1H1


 


	
   

  	
  Disbursement

  
	
   

  	
   

  
	
   

  	
  Lockbox

  
	
   

  	
   

  
	
   

  	
  Payroll

  
	
   

  	
   

  
	
   

  	
  Concentration

  



 





















 


EXHIBIT “A” TO
SCHEDULE 4.28

FORM OF CONTROL AGREEMENT REGARDING DEPOSIT ACCOUNTS


 


Agreement (as amended, modified or supplemented from
time to time, this “Agreement”),
dated as of l,
among l
(the “Obligor”), Bank of America,
N.A., not in its individual capacity but solely as Collateral Agent (the “Collateral Agent”), and l (the “Deposit
Account Bank”), as the bank with which one or more accounts are
maintained by the Obligor (with all such accounts now or at any time in the future
maintained by the Obligor with the Deposit Account Bank being herein called the
“Deposit  Accounts”).


 


RECITALS:


 


(a)                                  the Obligor and the Collateral Agent have entered into an amended
and restated security agreement dated as of March 26, 2002, amended and
restated as of August 18, 2003 and amended and restated as of June 28, 2005,
(as the same may be further amended and restated, modified or supplemented from
time to time, the “Security Agreement”),
under which, among other things, in order to secure the payment of the
Obligations (as defined in the Security Agreement), the Obligor has granted a
security interest to the Collateral Agent for the benefit of the Secured
Creditors (as defined in the Security Agreement) in all of the right, title and
interest of the Obligor in and into, inter
alia, any and all accounts and in all moneys, securities,
instruments and other investments deposited therein from time to time
(collectively, herein called the “Collateral”);
and


 


(b)                                 the Obligor desires that the Deposit Account Bank enter into this
Agreement in order to provide for the rights of the parties under this
Agreement with respect to its Deposit Accounts;


 


In consideration of the premises and the mutual
promises and agreements contained herein, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:


 


Section 1                                             Obligor’s Dealings with Deposit Accounts; Notice of Exclusive
Control.


 


Until the Deposit Account Bank shall have received from the Collateral
Agent a Notice of Exclusive Control (as defined below), the Obligor shall be
entitled to present items drawn on and otherwise to withdraw or direct the
disposition of funds from the Deposit Accounts and give instructions in respect
of the Deposit Accounts; provided, however, that the Obligor may not, and the
Deposit Account


 





















 


Bank agrees that it shall not permit the Obligor to,
without the Collateral Agent’s prior written consent, close any Deposit
Account.  If the Collateral Agent shall
give to the Deposit Account Bank a notice of the Collateral Agent’s exclusive
control of the Deposit Accounts, which notice states that it is a “Notice of
Exclusive Control” (a “Notice of Exclusive
Control”), only the Collateral Agent shall be entitled to withdraw
funds from the Deposit Accounts, to give any instructions in respect of the
Deposit Accounts and any funds held therein or credited thereto or otherwise to
deal with the Deposit Accounts.


 


Section 2                                             Collateral Agent’s Right To Give Instructions As To Deposit
Accounts.


 


(1)                                  Notwithstanding the foregoing or any separate agreement that the
Obligor may have with the Deposit Account Bank, the Collateral Agent shall be
entitled, for purposes of this Agreement, at any time to give the Deposit Account
Bank instructions as to the withdrawal or disposition of any funds from time to
time credited to any Deposit Account, or as to any other matters relating to
any Deposit Account or any other Collateral, without further consent from the
Obligor.  The Obligor hereby irrevocably
authorizes and instructs the Deposit Account Bank, and the Deposit Account Bank
hereby agrees, to comply with any such instructions from the Collateral Agent
without any further consent from the Obligor. 
Such instructions may include the giving of stop payment orders for any
items being presented to any Deposit Account for payment.  The Deposit Account Bank shall be fully
entitled to rely on, and shall comply with, such instructions from the
Collateral Agent even if such instructions are contrary to any instructions or
demands that the Obligor may give to the Deposit Account Bank.  In case of any conflict between instructions
received by the Deposit Account Bank from the Collateral Agent and the Obligor,
the instructions from the Collateral Agent shall prevail.


 


(2)                                  It is understood and agreed that the Deposit Account Bank’s duty to
comply with instructions from the Collateral Agent regarding the Deposit
Accounts is absolute, and the Deposit Account Bank shall be under no duty or obligation,
nor shall it have the authority, to inquire or determine whether or not such
instructions are in accordance with the Security Agreement or any other Credit
Document (as defined in the Security Agreement), nor seek confirmation thereof
from the Obligor or any other Person (as defined in the Security Agreement).


 


Section 3                                             Obligor’s Exculpation And Indemnification Of Depository Bank.


 


2





















 


The Obligor hereby irrevocably authorizes and instructs the Deposit
Account Bank to follow instructions from the Collateral Agent regarding the
Deposit Accounts even if the result of following such instructions from the
Collateral Agent is that the Deposit Account Bank dishonours items presented
for payment from any Deposit Account. 
The Obligor further confirms that the Deposit Account Bank shall have no
liability to the Obligor for wrongful dishonour of such items in following such
instructions from the Collateral Agent. 
The Deposit Account Bank shall have no duty to inquire or determine
whether the Obligor’s obligations to the Collateral Agent are in default or
whether the Collateral Agent is entitled, under any separate agreement between
the Obligor and the Collateral Agent, to give any such instructions.  The Obligor further agrees to be responsible
for the Deposit Account Bank’s customary charges and to indemnify the Deposit
Account Bank from and to hold the Deposit Account Bank harmless against any
loss, cost or expense that the Deposit Account Bank may sustain or incur in
acting upon instructions which the Deposit Account Bank believes in good faith
to be instructions from the Collateral Agent.


 


Section 4                                             Subordination of Security Interests; Deposit Account Bank’s Recourse
to Deposit Accounts.


 


The Deposit Account Bank hereby subordinates any claims and security
interests it may have against, or with respect to, any Deposit Account at any
time established or maintained with it by the Obligor (including any amounts,
investments, instruments or other Collateral from time to time on deposit
therein) to the security interests of the Collateral Agent (for the benefit of
the Secured Creditors) therein, and agrees that no amounts shall be charged by
it to, or withheld or set-off or otherwise recouped by it from, any Deposit
Account of the Obligor or any amounts, investments, instruments or other
Collateral from time to time on deposit therein; provided that the Deposit
Account Bank may, however, from time to time debit the Deposit Accounts for any
of its customary charges in maintaining the Deposit Accounts or for
reimbursement for the reversal of any provisional credits granted by the
Deposit Account Bank to any Deposit Account, to the extent, in each case, that
the Obligor has not separately paid or reimbursed the Deposit Account Bank
therefor.(1)


 


Section 5               Representations, Warranties and Covenants of Deposit
Account Bank.


 










(1)           If
the respective Deposit Account Bank is unwilling to agree to this paragraph,
then the Collateral Agent may take the action described in Section 4.28 of the
Security Agreement.  


 


3





















 


The Deposit Account Bank represents and warrants to the Collateral
Agent that:


 


(a)                                  All account agreements in respect of each Deposit Account in
existence on the date hereof are listed on Annex A hereto and copies of all
such account agreements have been furnished to the Collateral Agent.  The Deposit Account Bank will promptly
furnish to the Collateral Agent a copy of the account agreement for each
Deposit Account hereafter established by the Deposit Account Bank for the
Obligor.


 


(b)                                 The Deposit Account Bank has not entered and will not enter, into
any agreement with any other Person by which the Deposit Account Bank is
obligated to comply with instructions from such other Person as to the
disposition of funds from any Deposit Account or other dealings with any
Deposit Account or other of the Collateral.


 


(c)                                  On the date hereof the Deposit Account Bank maintains no Deposit
Accounts for the Obligor other than the Deposit Accounts specifically
identified in Annex A hereto.


 


(d)                                 Any items or funds received by the Deposit Account Bank for the
Obligor’s account will be credited to said Deposit Accounts specified in
paragraph (c) above or to any other Deposit Accounts hereafter established by
the Deposit Account Bank for the Obligor in accordance with this Agreement.


 


(e)                                  The Deposit Account Bank will promptly notify the Collateral Agent
of each Deposit Account hereafter established by the Deposit Account Bank for
the Obligor (which notice shall specify the account number of such Deposit
Account and the location at which the Deposit Account is maintained), and each
such new Deposit Account shall be subject to the terms of this Agreement in all
respects.


 


Section 6                                             Deposit Account Statements and Information.


 


The Deposit Account Bank agrees, and is hereby authorized and
instructed by the Obligor, to furnish to the Collateral Agent at its address
indicated below copies of all account statements and other information relating
to each Deposit Account that the Deposit Account Bank sends to the Obligor and
to disclose to the Collateral Agent all information requested by the Collateral
Agent regarding any Deposit Account.


 


4





















 


Section 7                                             Conflicting Agreements.


 


This Agreement shall have control over any conflicting agreement
between the Deposit Account Bank and the Obligor.


 


Section 8               Merger or
Consolidation of Deposit Account Bank.


 


Without the execution or filing of any paper or any further act on the
part of any of the parties hereto, any bank into which the Deposit Account Bank
may be merged or with which it may be consolidated, or any bank resulting from
any merger to which the Deposit Account Bank shall be a party, shall be the
successor of the Deposit Account Bank hereunder and shall be bound by all
provisions hereof which are binding upon the Deposit Account Bank and shall be
deemed to affirm as to itself all representations and warranties of the Deposit
Account Bank contained herein.


 


Section 9               Notices.


 


(1)                                  All notices and other communications provided for in this Agreement
shall be in writing (including facsimile) and sent to the intended recipient at
its address or telex or facsimile number set forth below:


 


	
   

  	
  If to the Collateral Agent, at:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  	
   

  
	
   

  	
  335 Madison Avenue

  	
   

  
	
   

  	
  New York,
  New York 10017.

  	
   

  
	
   

  	
  Attention:

  	
  Business Capital/URGENT.

  
	
   

  	
  Telephone:

  	
  (212) 503-7632

  
	
   

  	
  Facsimile:

  	
  (212) 503-7330

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the Obligor, at:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  c/o
  Williams Scotsman, Inc.

  	
   

  
	
   

  	
  8211 Town
  Center Drive

  	
   

  
	
   

  	
  Baltimore,
  Maryland 21236-5997

  	
   

  
	
   

  	
  Attention:

  	
  John B. Ross

  
	
   

  	
  Telephone: 

  	
  (410)931-6000
  ext.6105

  
	
   

  	
  Facsimile:

  	
  (410)931-6117

  
				



 


5





















 


	
   

  	
  If to the Deposit Account Bank, at:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone:

  
	
   

  	
  Facsimile:

  



 


or, as to any party, to
such other address or telex or facsimile number as such party may designate
from time to time by notice to the other parties.


 


(2)                                  Except as otherwise provided herein, all notices and other
communications hereunder shall be delivered by hand or by commercial overnight
courier (delivery charges prepaid), or mailed, postage prepaid, or telexed or
faxed, addressed as aforesaid, and shall be effective (i) three business days
after being deposited in the mail (if mailed), (ii) when delivered (if
delivered by hand or courier) and (iii) or when transmitted with receipt
confirmed (if telexed or faxed); provided that notices to the Collateral Agent
shall not be effective until actually received by it.


 


Section 10             Amendment.


 


This Agreement may not be amended, modified or supplemented except in
writing executed and delivered by all the parties hereto.


 


Section 11             Binding
Agreement.


 


This Agreement shall bind the parties hereto and their successors and
assigns and shall inure to the benefit of the parties hereto and their
successors and assigns.  Without limiting
the provisions of the immediately preceding sentence, the Collateral Agent at
any time or from time to time may designate in writing to the Deposit Account Bank
a successor Collateral Agent (at such time, if any, as such entity becomes the
Collateral Agent under the Security Agreement, or at any time thereafter) who
shall thereafter succeed to the rights of the existing Collateral Agent
hereunder and shall be entitled to all of the rights and benefits provided
hereunder.


 


Section 12             Continuing
Obligations.


 


The rights and powers granted herein to the Collateral Agent will be
affected neither by any purported revocation by the Obligor of this Agreement
or the rights granted to the Collateral Agent hereunder, or by the bankruptcy,
insolvency, conservatorship or receivership of the Obligor or the Deposit
Account Bank, or by the lapse of time. 
The rights of the Collateral Agent hereunder and in respect of the Deposit
Accounts and the other Collateral, and the obligations of the Obligor and


 


6





















 


Deposit Account Bank hereunder, shall continue in
effect until the security interests of Collateral Agent in the Deposit Accounts
and such other Collateral have been terminated and the Collateral Agent has
notified the Deposit Account Bank of such termination in writing.


 


Section 13             Governing
Law.


 


This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario.


 


Section 14             Counterparts.


 


This Agreement may be executed in any number of counterparts, all of
which shall constitute one and the same instrument, and any party hereto may
execute this Agreement by signing and delivering one or more counterparts.


 


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


 


7





















 


IN WITNESS WHEREOF,
the parties hereto have duly executed and delivered this Agreement as of the
date first written above.


 


 


	
   

  	
  [OBLIGOR]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
    Name:
  l

  
	
   

  	
   

  	
    Title:
  l

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as

  Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
    Name:
  l

  
	
   

  	
   

  	
    Title:
  l

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [DEPOSIT ACCOUNT BANK]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
    Name:
  l

  
	
   

  	
   

  	
    Title:
  l

  



 


8