“Copyright License” means any written agreement, naming any Grantor aslicensor, granting any right under any Copyright.     “Copyrights” means (a) all copyrights registered in Canada or any othercountry in all works, now existing or hereafter created or acquired, all registrations andrecordings thereof, and all applications in connection therewith, including, withoutlimitation, registrations, recordings and applications in the Canadian IntellectualProperty Office or in any similar office or agency of Canada, any province or territorythereof, or any other country or political subdivision thereof, and (b) all renewalsthereof.     “Patent License” means any agreement, whether written or oral, providing forthe grant by or to a Grantor of any right to manufacture, use or sell any invention coveredby a Patent.     “Patents” means (a) all letters patent of Canada, or any other country orany political subdivision thereof, and all reissues and extensions thereof, and (b)all applications for letters patent of Canada and all divisions, continuations andcontinuations-in-part thereof.     “PPSA”has the meaning provided in Section 1 (b) hereof.     “Secured Obligations” means, without duplication, (i) all advances to, anddebts, liabilities, obligations, covenants and duties of, any Canadian Loan Party arisingunder any Canadian Loan Document or otherwise with respect to any Canadian Revolving Loan orCanadian Letter of Credit, whether direct or indirect (including those acquired byassumption), absolute or contingent, due or to become due, now existing or hereafter arisingand including interest and fees that accrue after the commencement by or against anyCanadian Loan Party of any proceeding under any Debtor Relief Laws naming such Person as thedebtor in such proceeding, regardless of whether such interest and fees are allowed claimsin such proceeding, (ii) all liabilities and obligations, whenever arising, owing from theCanadian Borrower or any Canadian Loan Party that is a Canadian Subsidiary to any CanadianLender or an Affiliate of any Canadian Lender arising under any Swap Contract between theCanadian Borrower or any Canadian Loan Party that is a Canadian Subsidiary and any CanadianLender or Affiliate of a Canadian Lender that is permitted to be incurred pursuant toSection 8.03(d) of the Credit Agreement, (iii) all liabilities and obligations,whenever arising, owing from the Canadian Borrower or any Canadian Loan Party that is aCanadian Subsidiary to any Canadian Lender or an Affiliate of any Canadian Lender arisingunder any Treasury Management Agreement between any the Canadian Borrower or any CanadianLoan Party that is a Canadian Subsidiary and any Canadian Lender or an Affiliate of anyCanadian Lender, in each case howsoever evidenced, created, incurred or acquired, whetherprimary, secondary, direct, contingent, or joint and several, and all obligations andliabilities incurred in connection with collecting and enforcing the foregoing and (iv) allcosts and expenses incurred in connection with enforcement and collection of the SecuredObligations described in the foregoing clauses (i), (ii) and (iii), including, withoutlimitation, reasonable legal fees and disbursements.     “Secured Parties” means, collectively, the Canadian Lenders and any otherholder of the Secured Obligations, and “Secured Party” means any one of them.     “STA” has the meaning provided in Section 1(c) hereof.     “Trademark License” means any agreement, written or oral, providing for thegrant by or to a Grantor of any right to use any Trademark.
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     “Trademarks” means (a) all trademarks, trade names, corporate names, companynames, business names, fictitious business names, trade styles, service marks, logos andother source or business identifiers, and the goodwill associated therewith, now existingor hereafter adopted or acquired, all registrations and recordings thereof, and allapplications in connection therewith, whether in the Canadian Intellectual Property Officeor in any similar office or agency of Canada, or any other country or political subdivisionthereof, or otherwise and (b) all renewals thereof.     2. Grant of Security Interest in the Collateral. To secure the prompt payment andperformance in full when due, whether by lapse of time, acceleration, mandatory prepayment orotherwise, of the Secured Obligations, each Grantor hereby assigns (other than Trademarks),pledges, mortgages (other than Trademarks) and charges as and by way of a fixed and specificmortgage and charge to the Canadian Administrative Agent, for the benefit of the Secured Parties, acontinuing security interest in, and a right to set off against, any and all right, title andinterest of such Grantor in and to all of the following, whether now owned or existing or owned,acquired, or arising hereafter, by way of amalgamation or otherwise (collectively, the“Collateral”):     (a) Receivables: all debts, Accounts, claims and choses in action for monetaryamounts which are now or which may hereafter become due, owing or accruing due to the Grantor;     (b) Inventory: all Inventory of whatever kind and wherever situated including, withoutlimiting the generality of the foregoing, all goods held for sale or lease or furnished or to befurnished under contracts for service or used or consumed in the business of the Grantor;     (c) Equipment: all machinery, equipment, fixtures, furniture, plant, vehicles andother tangible personal property which are not Inventory;     (d) Chattel Paper: all Chattel Paper;     (e) Documents of Title: all warehouse receipts, bills of lading and otherDocuments of Title,whether negotiable or not;     (f) Securities and Instruments: all shares, stock, warrants, bonds, debentures,debenture stock and other Securities and all Instruments;     (g) Investment Property: all Certificated Securities and Uncertificated Securities,Security Entitlements, Securities Accounts, Futures Contracts and Futures Accounts;     (h) Intangibles: all Intangibles not otherwise described in this Section2 including, without limiting the generality of the foregoing, all goodwill, Patents, PatentLicenses, Trademarks, Trademark Licenses, Copyrights, Copyright Licenses and other industrialproperty;     (i) Money: all coins or bills or other medium of exchange adopted for use as part ofthecurrency of Canada or of any foreign government;     (j) Goods: all tangible personal property other than Chattel Paper, Documents ofTitle,Instruments, Money and Investment Property;     (k) Books, Records. Etc.: all books, papers, Accounts, invoices, documents andother records in any form evidencing or relating to any of the property described in thisSection 2 and all contracts, Securities, Instruments and other rights and benefitsin respect thereof;
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     (l) Substitutions, Etc.: all replacements of, substitutions for and increases,additions andAccessions to any of the property described in this Section 2;     (m) Proceeds: all proceeds of any Collateral in any form derived directly orindirectly from any dealing with the Collateral or that indemnifies or compensates for the loss ofor damage to the Collateral; and     (n) to the extent not otherwise included, all Accessions of any and all of theforegoing.provided that the security interest granted hereby will not extend or apply to the last day of theterm of any lease or any agreement therefor now held or hereafter acquired by the Grantor, butshould the Secured Parties enforce the security interest granted hereby, the Grantor willthereafter stand possessed of such last day in trust to assign the same to any person acquiringsuch term in the course of the enforcement of the security interest granted hereby.     Each of the Grantors acknowledges that value has been given and agrees that the securityinterest granted hereby will attach when such Grantor signs this Canadian Security Agreement andsuch Grantor has any rights in the Collateral.     The Grantors and the Canadian Administrative Agent, on behalf of the Secured Parties, herebyacknowledge and agree that the security interest created hereby in the Collateral (i) constitutescontinuing collateral security for all of the Secured Obligations, whether now existing orhereafter arising and (ii) is not and shall not be construed as an assignment of any Copyrights,Copyright Licenses, Patents, Patent Licenses, Trademarks or Trademark Licenses.     Notwithstanding anything to the contrary contained herein, the security interests grantedunder this Canadian Security Agreement shall not extend to (and the following shall not be includedas Collateral) (i) Excluded Canadian Property, and (ii) any Intangible, permit, lease, license,contract or other Instrument of a Grantor if the grant of a security interest in such Intangible,permit, lease, license, contract or other Instrument in the manner contemplated by this CanadianSecurity Agreement, under the terms thereof or under applicable Law, is prohibited and would resultin the termination thereof or give the other parties thereto the right to terminate, accelerate orotherwise alter such Grantor’s rights, titles and interests thereunder (including upon the givingof notice or the lapse of time or both); provided that (a) any such limitation describedabove on the security interests granted hereunder shall only apply to the extent that any suchprohibition is not rendered ineffective pursuant to the PPSA, the STA or any other applicable Law(including Debtor Relief Laws) or principles of equity and (b) in the event of the termination orelimination of any such prohibition or the requirement for any consent contained in any applicableLaw, Intangible, permit, lease, license, contract or other Instrument, to the extent sufficient topermit any such item to become Collateral hereunder, or upon the granting of any such consent, orwaiving or terminating any requirement for such consent, a security interest in such Intangible,permit, lease, license, contract or other Instrument shall be automatically and simultaneouslygranted hereunder and shall be included as Collateral hereunder.     3. Provisions Relating to Accounts.     (a) Anything herein to the contrary notwithstanding, each of the Grantors shall remainliable under each of the Accounts to observe and perform all the conditions and obligations to beobserved and performed by it thereunder, all in accordance with the terms of any agreement givingrise to each such Account. Neither the Canadian Administrative Agent nor any Secured Party shallhave any obligation or liability under any Account (or any agreement giving rise thereto) by reasonof or arising out of this Canadian Security Agreement or the receipt by the Canadian AdministrativeAgent or any Secured Party
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of any payment relating to such Account pursuant hereto, nor shall the Canadian AdministrativeAgent or any Secured Party be obligated in any manner to perform any of the obligations of aGrantor under or pursuant to any Account (or any agreement giving rise thereto), to make anypayment, to make any inquiry as to the nature or the sufficiency of any payment received by it oras to the sufficiency of any performance by any party under any Account (or any agreement givingrise thereto), to present or file any claim, to take any action to enforce any performance or tocollect the payment of any amounts that may have been assigned to it or to which it may be entitledat any time or times.     (b) At any time after the occurrence and during the continuation of an Event ofDefault, (i) the Canadian Administrative Agent shall have the right, but not the obligation, tomake test verifications of the Accounts in any manner and through any medium that it reasonablyconsiders advisable, and the Grantors shall furnish all such assistance and information as theCanadian Administrative Agent may reasonably require in connection with such test verifications,(ii) upon the Canadian Administrative Agent’s request and at the expense of the Grantors, theGrantors shall cause independent public accountants or others satisfactory to the CanadianAdministrative Agent to furnish to the Canadian Administrative Agent reports showingreconciliations, aging and test verifications of, and trial balances for, the Accounts and (iii)the Canadian Administrative Agent in its own name or in the name of others may communicate withaccount debtors on the Accounts to verify with them to the Canadian Administrative Agent’ssatisfaction the existence, amount and terms of any Accounts.     4. Representations and Warranties. Each Grantor hereby represents and warrants totheCanadian Administrative Agent, for the benefit of the Secured Parties, that so long as any of theSecured Obligations remains outstanding and until all of the commitments relating thereto have beenterminated:     (a) Legal Name.     (i) Each Grantor’s exact legal name (and for the prior five years or sincethedate of its formation have been) are as set forth on Schedule 6.20(c)to the Credit Agreement.     (ii) Each Grantor’s jurisdiction of formation is (and for the prior fiveyears or since the date of its formation has been) as set forth on Schedule6.20(c) to the Credit Agreement.     (iii) Other than as set forth on Schedule 6.20(c) to the CreditAgreement, no Grantor has been party to an amalgamation or other change in structureor used any trade name in the prior five years.     (b) Ownership. Each Grantor is the legal and beneficial owner of its Collateralandhas the right to pledge, sell, assign or transfer the same.     (c) Security Interest/Priority. This Canadian Security Agreement creates a validsecurity interest in favour of the Canadian Administrative Agent, for the benefit ofthe Secured Parties, in the Collateral of such Grantor and, when properly perfected by filing,shall constitute a valid, perfected security interest in such Collateral, to the extent such securityinterest can be perfected by filing under the PPSA, free and clear of all Liens except for PermittedLiens.     (d) Types of Collateral. None of the Collateral consists of, or is theAccessions or the Proceeds of Consumer Goods.
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     (e) Accounts. With respect to the Accounts of the Grantors reflected asaccounts receivable on the consolidated balance sheet of EMS and its Subsidiaries mostrecently delivered to the Domestic Administrative Agent pursuant to the Credit Agreement,(i) each Account of the Grantors and the papers and documents relating thereto are genuineand in all material respects what they purport to be, (ii) each Account arises out of (A) abona fide sale of goods sold and delivered by such Grantor (or is in the process of beingdelivered) or (B) services theretofore actually rendered by such Grantor to the accountdebtor named therein, (iii) any Account of a Grantor evidenced by any Instrument or ChattelPaper has, to the extent requested by the Canadian Administrative Agent, been endorsed overand delivered to, or submitted to the control of, the Canadian Administrative Agent and(iv) no surety bond was required or given in connection with any Account of a Grantor orthe contracts or purchase orders out of which they arose.     (f) Inventory. No Inventory of a Grantor is held by any Person other than aGrantor pursuant to consignment, sale or return, sale on approval or similar arrangement.     (g) Copyrights, Patents and Trademarks.     (i) Schedule 6.17 to the Credit Agreement includes all Copyrights,Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark Licensesowned by any Grantor in its own name, or to which any Grantor is a party, as of thedate hereof (other than with respect to off-the-shelf software) and registered inthe name of such Grantor.     (ii) Each Copyright, Patent and Trademark is valid, subsisting,unexpired, enforceable and has not been abandoned as of the date hereof.     (iii) Except as set forth in Schedule 6.17 to the CreditAgreement, none of the Copyrights, Patents and Trademarks is the subject of anylicensing or franchise agreement as of the date hereof (other than with respect tooff-the-shelf software).     (iv) No holding, decision or judgment has been rendered by anyGovernmental Authority that would limit, cancel or question the validity ofany Copyright, Patent or Trademark.     (v) No action or proceeding is pending seeking to limit, cancel orquestion the validity of any Copyright, Patent or Trademark, or that, if adverselydetermined, could reasonably be expected to have a material adverse effect on thevalue of any Copyright, Patent or Trademark.     (vi) All applications pertaining to the Copyrights, Patents andTrademarks of each Grantor have been duly and properly filed, and all registrationsor letters pertaining to such Copyrights, Patents and Trademarks have been duly andproperly filed and issued, and all of such Copyrights, Patents and Trademarks arevalid and enforceable.     (vii) No Grantor has made any assignment or agreement in conflictwith the security interest in the Copyrights, Patents or Trademarks of anyGrantor hereunder.     5. Covenants. Each Grantor covenants that, so long as any of the Secured Obligationsremains outstanding and until all of the commitments relating thereto have been terminated, suchGrantor shall:
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     (a) Other Liens. Defend the Collateral against Liens therein other thanPermitted Liens.     (b) Instruments/Chattel Paper/Documents of Title. If any amount payable underor in connection with any of the Collateral shall be or become evidenced by any Instrumentor Chattel Paper, or if any property constituting Collateral shall be stored or shippedsubject to a Document of Title, (i) ensure that such Instrument, Chattel Paper or Documentof Title is either in the possession of such Grantor at all times or, if requested by theCanadian Administrative Agent, is immediately delivered to the Canadian AdministrativeAgent, duly endorsed in a manner satisfactory to the Canadian Administrative Agent and (ii)ensure that any Collateral consisting of Chattel Paper is marked with a legend acceptable tothe Canadian Administrative Agent indicating the Canadian Administrative Agent’s securityinterest in such Chattel Paper.     (c)Change in Name, Location, Structure or Type. Not, without providing tendays prior written notice to the Canadian Administrative Agent (i) change its name, theprovince in which the chief executive office is located or jurisdiction of formation, (ii)be party to a merger, amalgamation, consolidation or other change in structure except aspermitted by the Credit Agreement or (iii) use any trade name other than as set forth onSchedule 6.20(c) to the Credit Agreement.     (d) Perfection of Security Interest. Execute and deliver to the CanadianAdministrative Agent such agreements, assignments or instruments and do all such otherthings as the Canadian Administrative Agent may reasonably deem necessary, appropriate orconvenient (i) to assure to the Canadian Administrative Agent the effectiveness, perfectionand priority of its security interests in the Collateral hereunder, including (A) suchinstruments as the Canadian Administrative Agent may from time to time reasonably request inorder to perfect and maintain the security interests granted hereunder in accordance withthe PPSA, (B) with regard to Copyrights, a Notice of Grant of Security Interest inCopyrights for filing with the Canadian Intellectual Property Office in the form ofExhibit 5(d)(i) attached hereto, (C) with regard to Patents, a Notice of Grant ofSecurity Interest in Patents for filing with the Canadian Intellectual Property Office inthe form of Exhibit 5 (d)(ii) attached hereto and (D) with regard to Trademarksregistered with the Canadian Intellectual Property Office and all applications forTrademarks filed with the Canadian Intellectual Property Office, a Notice of Grant ofSecurity Interest in Trademarks for filing with the Canadian Intellectual Property Office inthe form of Exhibit 5(d)(iii) attached hereto, (ii) to consummate the transactionscontemplated hereby and (iii) to otherwise protect and assure the Canadian AdministrativeAgent of its rights and interests hereunder. To that end, each Grantor authorizes theCanadian Administrative Agent to file one or more financing statements (with collateraldescriptions broader, including without limitation “inventory”, “equipment”, “accounts”,“other” and/or “motor vehicle included” collateral descriptions) disclosing the CanadianAdministrative Agent’s security interest in any or all of the Collateral of such Grantorwithout such Grantor’s signature thereon. Each Grantor hereby agrees that a carbon,photographic or other reproduction of this Canadian Security Agreement or any such financingstatement is sufficient for filing as a financing statement by the Canadian AdministrativeAgent without notice thereof to such Grantor wherever the Canadian Administrative Agent mayin its sole discretion desire to file the same. In the event for any reason the law of anyjurisdiction other than Ontario becomes or is applicable to the Collateral of any Grantor orany part thereof, or to any of the Secured Obligations, such Grantor agrees to execute anddeliver all such instruments and to do all such other things as the Canadian AdministrativeAgent in its sole discretion reasonably deems necessary, appropriate or convenient topreserve, protect and enforce the security interests of the Canadian Administrative Agentunder the law of such other jurisdiction (and, if a Grantor shall fail to do so promptlyupon the request
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of the Canadian Administrative Agent, then the Canadian Administrative Agent may executeany and all such requested documents on behalf of such Grantor pursuant to the power ofattorney granted hereinabove). If any Collateral is in the possession or control of aGrantor’s agents and the Canadian Administrative Agent so requests, such Grantor agrees tonotify such agents in writing of the Canadian Administrative Agent’s security interesttherein and, upon the Canadian Administrative Agent’s request, instruct them to hold allsuch Collateral for the account of the Secured Parties, subject to the CanadianAdministrative Agent’s instructions. Each Grantor agrees to mark its books and records toreflect the security interest of the Canadian Administrative Agent in the Collateral.     (e) Control. Execute and deliver (and cause to be executed and delivered) allagreements, assignments, instruments or other documents as the Canadian AdministrativeAgent shall reasonably request for the purpose of obtaining and maintaining control withinthe meaning of the PPSA with respect to any Collateral consisting of Accounts andInvestment Property.     (f) Collateral held by Warehouseman, Bailee, etc. If any Collateral is at anytime in the possession or control of a warehouseman, bailee, agent or processor of suchGrantor and is expected to remain in possession and control of such third party, (i) notifythe Canadian Administrative Agent of such possession or control, (ii) notify such Person ofthe Canadian Administrative Agent’s security interest in such Collateral, (iii) instructsuch Person to hold all such Collateral for the Canadian Administrative Agent’s account andsubject to the Canadian Administrative Agent’s instructions and (iv) obtain anacknowledgment from such Person that it is holding such Collateral for the benefit of theCanadian Administrative Agent.     (g) Treatment of Accounts. Not grant or extend the time for payment of anyAccount, or compromise or settle any Account for less than the full amount thereof, orrelease any Person or property, in whole or in part, from payment thereof, or allow anycredit or discount thereon, in each case other than as normal and customary in the ordinarycourse of a Grantor’s business or as required by law.     (h) Covenants Relating to Copyrights.     (i) Not do any act or knowingly omit to do any act whereby any Copyrightowned by it may become invalidated and (A) not do any act, or knowingly omit to doany act, whereby any Copyright owned by it may become injected into the publicdomain; (B) notify the Canadian Administrative Agent immediately if it knows thatany Copyright owned by it may become injected into the public domain or of anyadverse determination or development (including, without limitation, the institutionof, or any such determination or development in, any court or tribunal in Canada orany other country) regarding a Grantor’s ownership of any such Copyright or itsvalidity; (C) take all necessary steps as it shall deem appropriate under thecircumstances, to maintain and pursue each application (and to obtain the relevantregistration) of each Copyright owned by a Grantor and to maintain each registrationof each Copyright owned by a Grantor including, without limitation, filing ofapplications for renewal where necessary; and (D) promptly notify the CanadianAdministrative Agent of any infringement of any Copyright of a Grantor of which itbecomes aware and take such actions as it shall reasonably deem appropriate underthe circumstances to protect such Copyright, including, where appropriate, thebringing of suit for infringement, seeking injunctive relief and seeking to recoverany and all damages for such infringement.
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     (ii) Not make any assignment or agreement in conflict with the securityinterest in the Copyrights of each Grantor hereunder (other than in connection witha Permitted Lien or as otherwise provided in the Credit Agreement).     (i) Covenants Relating to Patents and Trademarks.     (i) (A) Continue to use each Trademark on each and every trademark classof goods applicable to its current line as reflected in its current catalogs,brochures and price lists in order to maintain such Trademark in full force freefrom any claim of abandonment for non-use, (B) maintain as in the past the qualityof products and services offered under such Trademark, (C) employ such Trademarkwith the appropriate notice of registration, if applicable, (D) not adopt or use anymark that is confusingly similar or a colorable imitation of such Trademark unlessthe Canadian Administrative Agent, for the rateable benefit of the Secured Parties,shall obtain a perfected security interest in such Trademark pursuant to thisCanadian Security Agreement, and (E) not (and not permit any licensee or sublicenseethereof to) do any act or knowingly omit to do any act whereby any such Trademarkowned by a Grantor may become invalidated.     (ii) Not do any act, or omit to do any act, whereby any Patent owned bya Grantor may become abandoned or dedicated.     (iii) Notify the Canadian Administrative Agent and the Secured Partiespromptly if it knows that any application or registration relating to any Patent orTrademark owned by a Grantor may become abandoned or dedicated, or of any adversedetermination or development (including, without limitation, the institution of, orany such determination or development in, any proceeding in the CanadianIntellectual Property Office or any court or tribunal in any country) regarding aGrantor’s ownership of any Patent or Trademark or its right to register the same orto keep and maintain the same.     (iv) Whenever a Grantor, either by itself or through an agent, employee,licensee or designee, shall file an application for the registration of any Patentor Trademark with the Canadian Intellectual Property Office or any similar office oragency in any other country or any political subdivision thereof, such Grantor shallreport such filing to the Canadian Administrative Agent as required by the CreditAgreement. Upon request of the Canadian Administrative Agent, a Grantor shallexecute and deliver any and all agreements, instruments, documents and papers as theCanadian Administrative Agent may reasonably request to evidence the securityinterest of the Canadian Administrative Agent and the Secured Parties in any Patentor Trademark in the Collateral and the goodwill and intangibles of a Grantorrelating thereto or represented thereby.     (v) Take all reasonable and necessary steps, including, withoutlimitation, in any proceeding before the Canadian Intellectual Property Office, orany similar office or agency in any other country or any political subdivisionthereof, to maintain and pursue each application (and to obtain the relevantregistration) and to maintain each registration of each Patent and Trademark ownedby a Grantor, including, without limitation, filing of applications for renewal,affidavits of use and affidavits of incontestability.     (vi) Promptly notify the Canadian Administrative Agent after it learnsthat any Patent or Trademark included in the Collateral is infringed,misappropriated or
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diluted by a third party and take such actions as it shall reasonably deemappropriate under the circumstances to protect such Patent or Trademark.     (vii) Not make any assignment or agreement in conflict with the securityinterest in the Patents or Trademarks of each Grantor hereunder (other than inconnection with a Permitted Lien or as otherwise provided in the Credit Agreement).     (j) Insurance. Insure, repair and replace the Collateral of suchGrantor as set forth in the Credit Agreement. All insurance proceeds shall be subject tothe security interest of the Canadian Administrative Agent hereunder.     6. Advances by Canadian Administrative Agent. On failure of any Grantorto perform any of the covenants and agreements contained herein which constitutes an Event of Default and whilesuch Event of Default continues, the Canadian Administrative Agent may, at its sole option and inits sole discretion, perform the same and in so doing may expend such sums as the CanadianAdministrative Agent may reasonably deem advisable in the performance thereof, including, withoutlimitation, the payment of any insurance premiums, the payment of any taxes, a payment to obtain arelease of a Lien or potential Lien, expenditures made in defending against any adverse claim andall other expenditures that the Canadian Administrative Agent may make for the protection of thesecurity hereof or that may be compelled to make by operation of law. All such sums and amounts soexpended shall be repayable by the Grantors on a joint and several basis (subject to Section23 hereof) promptly upon timely notice thereof and demand therefor, shall constitute additionalSecured Obligations and shall bear interest from the date said amounts are expended at the DefaultRate. No such performance of any covenant or agreement by the Canadian Administrative Agent onbehalf of any Grantor, and no such advance or expenditure therefor, shall relieve the Grantors ofany default under the terms of this Canadian Security Agreement, the other Canadian Loan Documentsor any other documents relating to the Secured Obligations. The Canadian Administrative Agent maymake any payment hereby authorized in accordance with any bill, statement or estimate procured fromthe appropriate public office or holder of the claim to be discharged, without inquiry into theaccuracy of such bill, statement or estimate or into the validity of any tax assessment, sale,forfeiture, tax lien, title or claim except to the extent such payment is being contested in goodfaith by a Grantor in appropriate proceedings and against which adequate reserves are beingmaintained in accordance with GAAP.     7. Remedies.     (a) General Remedies. Upon the occurrence of an Event of Default and duringthe continuation thereof, the Canadian Administrative Agent shall have, in addition to the rightsand remedies provided herein, in the Canadian Loan Documents, in any other documents relating tothe Secured Obligations, or by law (including, without limitation, attachment and garnishment), therights and remedies of a secured party under the legislation relating to security of personalproperty of the jurisdiction applicable to the affected Collateral and, further, the CanadianAdministrative Agent may, with or without judicial process or the aid and assistance of others tothe extent permitted by applicable law, (i) enter on any premises on which any of the Collateralmay be located and, without resistance or interference by the Grantors, take possession of theCollateral, (ii) dispose of any Collateral on any such premises, (iii) require the Grantors toassemble and make available to the Canadian Administrative Agent at the expense of the Grantors anyCollateral at any place and time designated by the Canadian Administrative Agent that is reasonablyconvenient to both parties, (iv) remove any Collateral from any such premises for the purpose ofeffecting sale or other disposition thereof, and/or (v) without demand and without advertisement,notice, hearing or process of law, all of which each of the Grantors hereby waives to the fullestextent permitted by law, at any place and time or times, sell and deliver any or all Collateralheld by or for it at public or private sale, by one or more contracts, in one or more parcels, for
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cash, upon credit or otherwise, at such prices and upon such terms as the Canadian AdministrativeAgent deems advisable, in its sole discretion (subject to any and all mandatory legalrequirements). Each of the Grantors acknowledges that any private sale referenced above may be atprices and on terms less favourable to the seller than the prices and terms that might have beenobtained at a public sale. In addition to all other sums due to the Canadian Administrative Agentand the Secured Parties with respect to the Secured Obligations, the Grantors shall pay theCanadian Administrative Agent and each of the Secured Parties all reasonable documented costs andexpenses incurred by the Canadian Administrative Agent or any such Secured Party, in enforcing itsremedies hereunder including, but not limited to, legal fees and court costs, in obtaining orliquidating the Collateral, in enforcing payment of the Secured Obligations, or in the prosecutionor defense of any action or proceeding by or against the Canadian Administrative Agent or theSecured Parties or the Grantors concerning any matter arising out of or connected with thisCanadian Security Agreement, any Collateral or the Secured Obligations, including, withoutlimitation, any of the foregoing arising in, arising under or related to a case under the DebtorRelief Laws. To the extent the rights of notice cannot be legally waived hereunder, each Grantoragrees that any requirement of reasonable notice shall be met if such notice is personally servedon or mailed, postage prepaid, to the Canadian Borrower in accordance with the notice provisions ofSection 11.02 of the Credit Agreement at least ten Business Days before the time of sale orother event giving rise to the requirement of such notice. The Canadian Administrative Agent shallnot be obligated to make any sale or other disposition of the Collateral regardless of noticehaving been given. To the extent permitted by law, any Secured Party may be a purchaser at any suchsale. To the extent permitted by applicable law, each of the Grantors hereby waives all of itsrights of redemption with respect to any such sale. Subject to the provisions of applicable law,the Canadian Administrative Agent and the Secured Parties may postpone or cause the postponement ofthe sale of all or any portion of the Collateral by announcement at the time and place of suchsale, and such sale may, without further notice, to the extent permitted by law, be made at thetime and place to which the sale was postponed, or the Canadian Administrative Agent may furtherpostpone such sale by announcement made at such time and place.     (b) Receiver. The Canadian Administrative Agent may, by appointment in writing,appoint a receiver or receiver and manager (each herein referred to as the “Receiver”) of theCollateral (which term when used in this subsection 7(b) will include the whole or any part of theCollateral) and may remove or replace such Receiver from time to time or may institute proceedings in any court of competentjurisdiction for the appointment of a Receiver of the Collateral; and the term “CanadianAdministrative Agent” when used in this subsection 7(b) will include any Receiver so appointed andthe agents, officers and employees of such Receiver; and the Canadian Administrative Agent will not be in any wayresponsible for any misconduct or negligence of any such Receiver.     (c)  Remedies relating to Accounts. Upon the occurrence of an Event of Default and duringthe continuation thereof, whether or not the Canadian Administrative Agent has exercised anyor all of its rights and remedies hereunder, (i) each Grantor will promptly upon request of the CanadianAdministrative Agent instruct all account debtors to remit all payments in respect of Accountsto a mailing location selected by the Canadian Administrative Agent and (ii) the CanadianAdministrative Agent shall have the right to enforce any Grantor’s rights against its customers and accountdebtors, and the Canadian Administrative Agent or its designee may notify (or require any Grantor tonotify) any Grantor’s customers and account debtors that the Accounts of such Grantor have been assignedto the Canadian Administrative Agent or of the Canadian Administrative Agent’s security interesttherein, and may (either in its own name or in the name of a Grantor or both) demand, collect (includingwithout limitation by way of a lockbox arrangement), receive, take receipt for, sell, sue for,compound, settle, compromise and give acquittance for any and all amounts due or to become due on any Account,and, in the Canadian Administrative Agent’s discretion, file any claim or take any other action orproceeding to protect and realize upon the security interest of the Secured Parties in the Accounts. EachGrantor acknowledges and agrees that the Proceeds of its Accounts remitted to or on behalf of theCanadian
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Administrative Agent in accordance with the provisions hereof shall be solely for the CanadianAdministrative Agent’s own convenience. The Canadian Administrative Agent and the Secured Partiesshall have no liability or responsibility to any Grantor for acceptance of a check, draft or otherorder for payment of money bearing the legend “payment in full” or words of similar import or anyother restrictive legend or endorsement or be responsible for determining the correctness of anyremittance. Each Grantor hereby agrees to indemnify the Canadian Administrative Agent and theSecured Parties from and against all liabilities, damages, losses, actions, claims, judgments,costs, expenses, charges and legal fees suffered or incurred by the Canadian Administrative Agentor the Secured Parties (each, an “Indemnified Party”) because of the maintenance of theforegoing arrangements except as relating to or arising out of the gross negligence or willfulmisconduct of an Indemnified Party or its officers, directors, employees or agents. In the case ofany investigation, litigation or other proceeding, the foregoing indemnity shall be effectivewhether or not such investigation, litigation or proceeding is brought by a Grantor, its directors,shareholders or creditors or an Indemnified Party or any other Person or any other IndemnifiedParty is otherwise a party thereto.     (d) Access. In addition to the rights and remedies hereunder, upon the occurrenceof an Event of Default and during the continuation thereof, the Canadian Administrative Agent shallhave the right to enter and remain upon the various premises of the Grantors without cost or chargeto the Canadian Administrative Agent, and use the same, together with materials, supplies, booksand records of the Grantors for the purpose of collecting and liquidating the Collateral, or forpreparing for sale and conducting the sale of the Collateral, whether by foreclosure, auction orotherwise. In addition, the Canadian Administrative Agent may remove Collateral, or any partthereof, from such premises and/or any records with respect thereto, in order to effectivelycollect or liquidate such Collateral.     (e) Nonexclusive Nature of Remedies. Failure by the Canadian Administrative Agentor the Secured Parties to exercise any right, remedy or option under this Canadian SecurityAgreement, any other Canadian Loan Document, any other documents relating to the SecuredObligations, or as provided by law, or any delay by the Canadian Administrative Agent or theSecured Parties in exercising the same, shall not operate as a waiver of any such right, remedy oroption. No waiver hereunder shall be effective unless it is in writing, signed by the party againstwhom such waiver is sought to be enforced and then only to the extent specifically stated, which inthe case of the Canadian Administrative Agent or the Secured Parties shall only be granted asprovided herein. To the extent permitted by law, neither the Canadian Administrative Agent, theSecured Parties, nor any party acting as attorney for the Canadian Administrative Agent or theSecured Parties, shall be liable hereunder for any acts or omissions or for any error of judgmentor mistake of fact or law other than their gross negligence or willful misconduct hereunder. Therights and remedies of the Canadian Administrative Agent and the Secured Parties under thisCanadian Security Agreement shall be cumulative and not exclusive of any other right or remedy thatthe Canadian Administrative Agent or the Secured Parties may have.     (f) Retention of Collateral. To the extent permitted under applicable law, inaddition to the rights and remedies hereunder, upon the occurrence and during the continuance of anEvent of Default, the Canadian Administrative Agent may, after providing the notices required byPart V of the PPSA or otherwise complying with the requirements of applicable law of therelevant jurisdiction, accept or retain all or any portion of the Collateral in satisfaction of the Secured Obligations. Unless anduntil the Canadian Administrative Agent shall have provided such notices, however, the CanadianAdministrative Agent shall not be deemed to have accepted or retained any Collateral insatisfaction of any Secured Obligations for any reason.     (g) Deficiency. In the event that the proceeds of any sale, collection orrealization are insufficient to pay all amounts to which the Canadian Administrative Agent or theSecured Parties are legally entitled, the Grantors shall be jointly and severally liable for thedeficiency (subject to Section 23
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hereof), together with interest thereon at the Default Rate, together with the costs of collectionand legal fees. Any surplus remaining after the full payment and satisfaction of the SecuredObligations shall be returned to the Grantors or to whomsoever a court of competent jurisdictionshall determine to be entitled thereto.     8. Rights of the Canadian Administrative Agent.     (a) Power of Attorney. In addition to other powers of attorney contained herein,each Grantor hereby designates and appoints the Canadian Administrative Agent, on behalf of theSecured Parties, and each of its designees or agents, as attorney-in-fact of such Grantor,irrevocably and with power of substitution, with authority to take any or all of the followingactions upon the occurrence and during the continuation of an Event of Default:     (i) to demand, collect, settle, compromise and adjust, and give discharges and releases concerning the Collateral, all as the Canadian Administrative Agent may reasonably deemappropriate;     (ii) to commence and prosecute any actions at any court for the purposes of collecting anyof the Collateral and enforcing any other right in respect thereof;     (iii) to defend, settle or compromise any action, suit or proceeding brought and, inconnection therewith, give such discharge or release as the Canadian Administrative Agent mayreasonably deem appropriate;     (iv) to receive, open and dispose of mail addressed to a Grantor and endorse cheques, notes,drafts, acceptances, money orders, bills of lading, warehouse receipts or other instruments ordocuments evidencing payment, shipment or storage of the goods giving rise to the Collateral onbehalf of and in the name of such Grantor, or securing, or relating to such Collateral;     (v) to pay or discharge taxes, liens, security interests or other encumbrances levied orplaced on or threatened against the Collateral;     (vi) to direct any parties liable for any payment in connection with any of the Collateral tomake payment of any and all monies due and to become due thereunder directly to the CanadianAdministrative Agent or as the Canadian Administrative Agent shall direct;     (vii) to receive payment of and receipt for any and all monies, claims, and other amounts dueand to become due at any time in respect of or arising out of any Collateral;     (viii) to sell, assign, transfer, make any agreement in respect of, or otherwise deal with orexercise rights in respect of, any Collateral or the goods or services that have given risethereto, as fully and completely as though the Canadian Administrative Agent were the absoluteowner thereof for all purposes;     (ix) to adjust and settle claims under any insurance policy relating thereto;     (x) to execute and deliver all assignments, conveyances, statements, financing statements,renewal financing statements, security and pledge agreements, affidavits, notices and otheragreements, instruments and documents that the Canadian Administrative Agent may reasonably deemappropriate in order to perfect and maintain the security interests and liens
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granted in this Canadian Security Agreement and in order to fully consummate all of thetransactions contemplated therein;     (xi) to institute any foreclosure proceedings that the Canadian Administrative Agent mayreasonably deem appropriate; and     (xii) to do and perform all such other acts and things as the Canadian Administrative Agent mayreasonably deem appropriate or convenient in connection with the Collateral.     This power of attorney is a power coupled with an interest and shall be irrevocable for so long asany of the Secured Obligations shall remain outstanding and until all of the commitments relatingthereto shall have been terminated. The Canadian Administrative Agent shall be under no duty toexercise or withhold the exercise of any of the rights, powers, privileges and options expressly orimplicitly granted to the Canadian Administrative Agent in this Canadian Security Agreement, andshall not be liable for any failure to do so or any delay in doing so. The Canadian AdministrativeAgent shall not be liable for any act or omission or for any error of judgment or any mistake offact or law in its individual capacity or its capacity as attorney-in-fact except acts or omissionsresulting from its gross negligence or willful misconduct. This power of attorney is conferred onthe Canadian Administrative Agent solely to protect, preserve and realize upon its securityinterest in the Collateral.     (b) The Canadian Administrative Agent’s Duty of Care. Other than the exercise ofreasonable care to assure the safe custody of the Collateral while being held by the CanadianAdministrative Agent hereunder and to account for all proceeds thereof, the Canadian AdministrativeAgent shall have no duty or liability to preserve rights pertaining thereto, it being understoodand agreed that the Grantors shall be responsible for preservation of all rights in the Collateral,and the Canadian Administrative Agent shall be relieved of all responsibility for the Collateralupon surrendering it or tendering the surrender of it to the Grantors. The Canadian AdministrativeAgent shall be deemed to have exercised reasonable care in the custody and preservation of theCollateral in its possession if such Collateral is accorded treatment substantially equal to thatwhich the Canadian Administrative Agent accords its own property, which shall be no less than thetreatment employed by a reasonable and prudent agent in the industry, it being understood that theCanadian Administrative Agent shall not have responsibility for taking any necessary steps to preserve rights against any parties withrespect to any of the Collateral. In the event of a public or private sale of Collateral pursuantto Section 7 hereof, the Canadian Administrative Agent shall have no obligation to clean,repair or otherwise prepare the Collateral for sale.     9. Application of Proceeds. Upon the occurrence and during the continuation of anEvent of Default, any payments in respect of the Secured Obligations and any proceeds of theCollateral, when received by the Canadian Administrative Agent or any of the Secured Parties incash or its equivalent, will be applied in reduction of the Secured Obligations in the order setforth in Section 9.03 of the Credit Agreement, and each Grantor irrevocably waives theright to direct the application of such payments and proceeds and acknowledges and agrees that theCanadian Administrative Agent shall have the continuing and exclusive right to apply and reapplyany and all such payments and proceeds in the Canadian Administrative Agent’s sole discretion,notwithstanding any entry to the contrary upon any of its books and records.     10. Continuing Agreement.     (a) This Canadian Security Agreement shall be a continuing agreement in every respect andshall remain in full force and effect so long as any of the Secured Obligations remains outstandingand until all of the commitments relating thereto have been terminated. Upon payment or othersatisfaction of
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all Secured Obligations and termination of the commitments related thereto, this Canadian SecurityAgreement and the liens and security interests of the Canadian Administrative Agent hereunder shallbe automatically terminated and the Canadian Administrative Agent shall, upon the request and atthe expense of the Grantors, execute and deliver all PPSA and Canadian Intellectual Property Officetermination statements, discharges and/or other documents reasonably requested by the Grantorsevidencing such termination, discharges and return to Grantors all Collateral in its possession.Notwithstanding the foregoing, all releases and indemnities provided hereunder shall survivetermination of this Canadian Security Agreement.     (b) This Canadian Security Agreement shall continue to be effective or be automaticallyreinstated, as the case may be, if at any time payment, in whole or in part, of any of the SecuredObligations is rescinded or must otherwise be restored or returned by the Canadian AdministrativeAgent or any Secured Party as a preference, fraudulent conveyance or otherwise under anybankruptcy, insolvency or similar law, all as though such payment had not been made; provided thatin the event payment of all or any part of the Secured Obligations is rescinded or must be restoredor returned, all costs and expenses (including, without limitation, legal fees and disbursements)incurred by the Canadian Administrative Agent or any Secured Party in defending and enforcing suchreinstatement shall be deemed to be included as a part of the Secured Obligations.     11. Amendments and Waivers. This Canadian Security Agreement and the provisionshereof may not be amended, waived, modified, changed, discharged or terminated except as set forthin Section 11.01 of the Credit Agreement.     12. Successors in Interest. This Canadian Security Agreement shall create acontinuing security interest in the Collateral and shall be binding upon each Grantor, itssuccessors and assigns, and shall inure, together with the rights and remedies of the CanadianAdministrative Agent and the Secured Parties hereunder, to the benefit of the Canadian Administrative Agent and the Secured Parties andtheir successors and permitted assigns; provided, however, none of the Grantors mayassign its rights or delegate its duties hereunder without the prior written consent of therequisite Canadian Lenders under the Credit Agreement.     13. Notices. All notices required or permitted to be given under this CanadianSecurity Agreement shall be given as provided in Section 11.02 of the Credit Agreement.     14. Counterparts. This Canadian Security Agreement may be executed in any number ofcounterparts, each of which where so executed and delivered shall be an original, but all of whichshall constitute one and the same instrument. It shall not be necessary in making proof of thisCanadian Security Agreement to produce or account for more than one such counterpart.     15. Headings. The headings of the sections and subsections hereof are provided forconvenience only and shall not in any way affect the meaning or construction of any provision ofthis Canadian Security Agreement.     16. Governing Law; Submission to Jurisdiction; Venue.     (a) THIS CANADIAN SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCEWITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.     (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS CANADIAN SECURITY AGREEMENT OR ANYOTHER CANADIAN COLLATERAL DOCUMENT MAY BE
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BROUGHT IN THE COURTS OF THE PROVINCE OF ONTARIO OR OF CANADA, AND BY EXECUTION AND DELIVERY OFTHIS CANADIAN SECURITY AGREEMENT, EACH GRANTOR AND THE CANADIAN ADMINISTRATIVE AGENT, ON BEHALF OFITSELF AND EACH SECURED PARTY, CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THENON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GRANTOR AND THE CANADIAN ADMINISTRATIVE AGENT, ONBEHALF OF ITSELF AND EACH SECURED PARTY, IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTIONTO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF *FORUM NON CONVENIENS,*WHICH IT MAY NOW ORHEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THISCANADIAN SECURITY AGREEMENT OR ANY OTHER CANADIAN LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.EACH GRANTOR AND THE CANADIAN ADMINISTRATIVE AGENT, ON BEHALF OF ITSELF AND EACH SECURED PARTY,WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHERMEANS PERMITTED BY THE LAW OF SUCH JURISDICTION.     17. Waiver of Right to Trial by Jury.     EACH PARTY TO THIS CANADIAN SECURITY AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURYOF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS CANADIAN SECURITY AGREEMENT OR ANY OTHER CANADIAN LOAN DOCUMENTOR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANYOF THEM WITH RESPECT TO THIS CANADIAN SECURITY AGREEMENT OR ANY OTHER CANADIAN LOAN DOCUMENT, ORTHE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING,AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTSTHAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT AJURY, AND THAT ANY PARTY TO THIS CANADIAN SECURITY AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR ACOPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT.     18. Severability. If any provision of this Canadian Security Agreement isdetermined to be illegal, invalid or unenforceable, such provision shall be fully severable and theremaining provisions shall remain in full force and effect and shall be construed without givingeffect to the illegal, invalid or unenforceable provisions.     19. Entirety. This Canadian Security Agreement, the other Canadian Loan Documentsand the other documents relating to the Secured Obligations represent the entire agreement of theparties hereto and thereto, and supersede all prior agreements and understandings, oral or written,if any, including any commitment letters or correspondence relating to the Canadian Loan Documents,any other documents relating to the Secured Obligations, or the transactions contemplated hereinand therein.     20. Survival. All representations and warranties of the Grantors hereunder shallsurvive the execution and delivery of this Canadian Security Agreement, the other Canadian LoanDocuments and the other documents relating to the Secured Obligations, the delivery of the Notesand the extension of credit thereunder or in connection therewith.     21. Other Security. To the extent that any of the Secured Obligations are now orhereafter secured by property other than the Collateral (including, without limitation, realproperty and securities owned by a Grantor), or by a guarantee, endorsement or property of anyother Person, then to the extent
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permitted by applicable law, the Canadian Administrative Agent shall have the right to proceedagainst such other property, guarantee or endorsement upon the occurrence and during thecontinuation of any Event of Default, and the Canadian Administrative Agent shall have the right,in its sole discretion, to determine which rights, security, liens, security interests or remediesthe Canadian Administrative Agent shall at any time pursue, relinquish, subordinate, modify or takewith respect thereto, without in any way modifying or affecting any of them or the SecuredObligations or any of the rights of the Canadian Administrative Agent or the Secured Parties underthis Canadian Security Agreement, under any of the other Canadian Loan Documents or under any otherdocument relating to the Secured Obligations.     22. Joint and Several Obligations of Grantors.     (a) Subject to subsection (c) of this Section 23, each of the Grantors is acceptingjoint and several liability hereunder in consideration of the financial accommodation to be provided by theSecured Parties, for the mutual benefit, directly and indirectly, of each of the Grantors and inconsideration of the undertakings of each of the Grantors to accept joint and several liability forthe obligations of each of them.     (b) Subject to subsection (c) of this Section 23, each of the Grantors jointly andseverally hereby irrevocably and unconditionally accepts, not merely as a surety but also as aco-debtor, joint and several liability with the other Grantors with respect to the payment andperformance of all of the Secured Obligations arising under this Canadian Security Agreement, theother Canadian Loan Documents and any other documents relating to the Secured Obligations, it beingthe intention of the parties hereto that all the Secured Obligations shall be the joint and severalobligations of each of the Grantors without preferences or distinction among them.     (c) Notwithstanding any provision to the contrary contained herein, in any other of theCanadian Loan Documents or in any other documents relating to the Secured Obligations, theobligations of each Grantor under the Credit Agreement, the other Canadian Loan Documents and theother documents relating to the Secured Obligations shall be limited to an aggregate amount equalto the largest amount that would not render such obligations subject to avoidance under anyapplicable federal, provincial or territorial law.[Signature Pages Follow]
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     Each of the parties hereto has caused a counterpart of this Canadian Security Agreement to be dulyexecuted and delivered as of the date first above written.     GRANTORS:  EMS TECHNOLOGIES CANADA, LTD.