DEED OF HYPOTHEC



                           On the tenth  (10th) day of August,  Two Thousand and
                           Six  (2006)  in the  City of  Montreal,  Province  of
                           Quebec.

                           Before Mtre Diane Rimok,  the  undersigned  Notary of
                           the  Province  of  Quebec,  practising  at  Montreal,
                           Quebec.


APPEARED:                  BUSH ROSS,  P.A., a  corporation,,  having a place of
                           business at 220 S. Franklin Street,  Tampa, FL 33602,
                           herein acting and represented by Benjamin Gross,  its
                           attorney ad hoc,  hereunto  authorized  pursuant to a
                           power of attorney dated July 26, 2006 a copy of which
                           is annexed hereto after having been acknowledged true
                           and signed for the purpose of  identification  by the
                           said   representative   in   the   presence   of  the
                           undersigned Notary.


                                                         PARTY OF THE FIRST PART

AND:                       C-CHIPS  TECHNOLOGIES  CORPORATION (NORTH AMERICA), a
                           legal person being a  corporation  constituted  under
                           the Canada Business Corporations Act, having its head
                           office  at  740  Notre-Dame  Street  East,  Montreal,
                           Quebec, Canada, H3C 3X6 herein acting and represented
                           by Anna Pennino, its representative,  duly authorized
                           pursuant to a  resolution  of the board of  directors
                           dated July 25,  2006,  a  certified  copy of which is
                           annexed  hereto after having been  acknowledged  true
                           and signed for the purpose of  identification by said
                           representative  in the  presence  of the  undersigned
                           Notary.

                                                        PARTY OF THE SECOND PART

                    WHICH  PARTIES  AGREE WITH EACH OTHER AND  DECLARE  UNTO THE
                    UNDERSIGNED NOTARY AS FOLLOWS:


<PAGE>
                                      -2-


ARTICLE 1

                                                                  INTERPRETATION

1.1     Definitions. Capitalized terms used herein without definition shall have
        the respective  meanings  ascribed to them in the Purchase  Agreement or
        the Notes, as applicable (as these terms are defined below),  unless the
        context clearly requires  otherwise or unless otherwise  defined herein.
        The following  words and  expressions,  whenever used in this Deed or in
        any deed, document or agreement supplemental or ancillary hereto, unless
        there be something in the subject or the context inconsistent therewith,
        shall have the following meanings:

        1.1.1   "Accessories"  means any interest,  interest on interest,  legal
                fees,  charges,  costs  of  realization,   expenses,   insurance
                premiums,  taxes,  and other sums which may be  expended  by the
                Holder or any  Bondholders  to protect,  preserve or enforce its
                rights under this Deed of Hypothec;

        1.1.2   "Bond"  or  "Bonds"  means  any  bond  or all the  bonds  of the
                Grantor,  as the case may be, issued and certified hereunder and
                entitled to the benefit of the security  hereof and for the time
                being outstanding;

        1.1.3   "Bondholder",  "Bondholders",  "holder of the Bond", or "holders
                of the Bonds" means the Person or several persons holding at any
                time any one of the outstanding Bonds and mentioned as holder in
                the register maintained by the Holder;

        1.1.4   "Bondholders'  Instrument"  shall have the  meaning set forth in
                Article 21.2;

<PAGE>
                                      -3-


        1.1.5   "Collateral"  means all accounts  receivable  of the Grantor and
                moveable property of every kind and nature,  including,  without
                limitation, all furniture,  fixtures,  equipment, raw materials,
                inventory,  as extracted collateral,  or other goods,  accounts,
                contract  rights,  rights to the  payment  of  money,  insurance
                refund claims and all other insurance claims and proceeds,  tort
                claims, chattel paper,  documents,  instruments,  securities and
                other investment property,  deposit accounts, rights to proceeds
                of  letters  of credit and all  general  intangibles  including,
                without  limitation,   all  tax  refund  claims,  license  fees,
                patents,  patent  licenses,  patent  applications,   trademarks,
                trademark  licenses,   trademark   applications,   trade  names,
                copyrights,  copyright licenses, copyright applications,  rights
                to sue and recover for past infringement of patents,  trademarks
                and   copyrights,    computer   programs,   computer   software,
                engineering drawings,  service marks, customer lists,  goodwill,
                and all  licenses,  permits,  agreements  of any kind or  nature
                pursuant to which the Grantor  possesses,  uses or has authority
                to possess or use property  (whether  tangible or intangible) of
                others or others  possess,  use or have  authority to possess or
                use property  (whether  tangible or  intangible) of the Grantor,
                and all recorded  data of any kind or nature,  regardless of the
                medium of recording including, without limitation, all books and
                records,   software,   writings,   plans,   specifications   and
                schematics,  whether  now owned or  hereinafter  acquired by the
                Grantor; and all proceeds and products of each of the foregoing.
                Notwithstanding the foregoing,  without consent, the Grantor may
                hereinafter  acquire  assets,   properties,   leases  (including
                corporations,  partnerships,  and  other  entities  holding  the
                foregoing)  for  use  in  its  business,   directly  or  through
                subsidiaries,  which may be secured by the asset  acquired  (the
                "Senior Security  Interest") and financed using cash payments of
                the Grantor and up to  $2,000,000 of secured  non-equity  linked
                commercial debt. Said Senior Security Interest shall rank senior
                to the  Holder's'  Security  Interest  granted  pursuant to this
                Agreement.

        1.1.6   "Deed of Hypothec", "this Deed", "this Deed of Hypothec", "these
                presents",  "herein",  "hereby",  "hereunder"  and other similar
                expressions  refer  collectively  to this Deed of Hypothec,  the
                accompanying  schedules  as well as any and every  deed or other
                instrument  which is  supplementary  or  ancillary  hereto or in
                implementation  hereof,  the  whole  as  same  may  be  amended,
                supplemented or restated at any time and from time to time;

<PAGE>
                                      -4-


        1.1.7   "Directors"  means the board of directors of the Grantor for the
                time being,  and  reference,  without  more, to a decision of or
                action by the  Directors  shall mean a  decision  made or action
                taken by the Directors  acting as a board duly constituted or as
                members of a committee duly authorized by the board of directors
                and having the  authority  to make such a decision  or take such
                action;


        1.1.8   "Event of Default" means any of the events or circumstances  set
                out in ARTICLE 9 hereof;

        1.1.9   "Grantor"  means the party of the second part and  includes  any
                successor in title;

        1.1.10  "Holder"  means the party of the first part,  in its capacity as
                fonde de pouvoir for the Bondholders for all purposes of Article
                2692 of the Civil Code of Quebec and includes  any  successor or
                assign thereof in such capacity;

        1.1.11  "Holder's   Indemnification"  means  sufficient  funds,  in  the
                opinion of the Holder,  to commence,  continue and carry out any
                act, action or proceedings and an indemnity  satisfactory to the
                Holder  to  protect  and hold it  harmless  against  all  costs,
                charges,  expenses and liabilities to be incurred as a result of
                any such act,  action or proceedings  and any loss and damage it
                may sustain by reason thereof.

        1.1.12  "Law" means all applicable  provisions of statutes,  ordinances,
                decrees,  orders  in  council,  rules,  regulations,  orders  of
                governmental authorities, treaties and all applicable orders and
                decrees of courts and arbitrators;

        1.1.13  "Lien" means any mortgage,  hypothec,  title retention,  pledge,
                deed of trust, lien, right of set-off, charge, security interest
                or other encumbrance  whatsoever,  whether fixed or floating and
                howsoever created or arising.

        1.1.14  "Notes"  means the  Series B  Subordinated  Secured  Convertible
                Promissory Notes issued from time to time and purchased pursuant
                to the Purchase Agreement;


<PAGE>
                                      -5-


        1.1.15  "Parties" means the Grantor and the Holder;

        1.1.16  "Person"  or  "Persons"  means  any   individual,   partnership,
                corporation,  limited  liability  company,  association,  trust,
                unincorporated  organization,  or  a  government  or  agency  or
                political subdivision thereof;

        1.1.17  "Purchase   Agreement"  means  that  certain  Note  and  Warrant
                Purchase  Agreement  by and among  Manaris  Corporation  and the
                Purchasers named therein dated as of August 10, 2006;

        1.1.18  "Rate of  Interest"  means the rate of interest  of  twenty-five
                percent (25%) per annum;

        1.1.19  "Receiver" means any receiver,  manager,  agent,  mandatary,  or
                receiver-manager appointed by the Holder or a court of competent
                jurisdiction  to  possess  and  administer  all  or  any  of the
                Collateral after the security has become enforceable;

        1.1.20  "Secured  Obligations"  means the  payment,  in lawful  money of
                Canada, of all principal of and interest  (including interest on
                amounts in default) and  premiums if any, on the Bonds,  as well
                as the payment of all other sums,  if any, from time to time due
                under  this  Deed  to the  Bondholders  or the  Holder  and  the
                performance  by the  Grantor of all its  obligations  under this
                Deed;

        1.1.21  "Security  Documents"  has the meaning  ascribed  thereto in the
                Purchase Agreement;

1.2     Plural and  Masculine.  Unless  there be something in the subject or the
        context inconsistent therewith,  words importing the singular only shall
        include  the  plural and vice versa and words  importing  the  masculine
        gender  shall  include the  feminine  gender and vice versa,  and unless
        otherwise  stipulated,  any  reference  to dollars  shall mean  Canadian
        dollars, unless otherwise specifically mentioned herein.

1.3     Division in Articles. The division of this Deed into Articles, Sections,
        subsections   and  paragraphs  and  the  insertion  of  titles  are  for
        convenience  of  reference  only and do not  affect  the  meaning or the
        interpretation of the present Deed.


<PAGE>
                                      -6-


                                   ARTICLE 2

                       APPOINTMENT OF THE FONDE DE POUVOIR

1.1     Appointment  of the Fonde de  Pouvoir.  The Grantor  hereby  appoints by
        these presents the Holder to act as fonde de pouvoir of the bondholders,
        as  contemplated  by Article 2692 of the Civil Code of Quebec,  to take,
        receive,  and hold on behalf of,  and for the  benefit  of,  each of the
        Bondholders,  all rights ,  hypothecs  and  security  interests  created
        hereby as continuing  security for the payment of the Bonds from time to
        time  issued and  outstanding  hereunder,  and to  exercise  any and all
        powers and rights and to perform  any and all duties  conferred  upon it
        hereunder or by a Bondholders' Instrument.

2.1     Acceptance of Appointment.  Bush Ross, P.A. as Holder hereby accepts its
        appointment as fonde de pouvoir and agrees to take, receive and hold the
        rights,  hypothecs and security interests created hereby and to exercise
        any and  all  powers  and  rights  and to  perform  any  and all  duties
        conferred upon it hereunder or by a Bondholder's Instrument.

                                   ARTICLE 3

                             FORM AND ISSUE OF BONDS

3.1     Limitation of Issue. The aggregate outstanding principal amount of Bonds
        which may be issued  under and  secured  by this Deed is  limited to the
        aggregate   principal   amount   of  Nine   Million   Canadian   Dollars
        (Cdn$9,000,000.00)  and such Bonds shall be designated as 25% Collateral
        Mortgage Demand Bonds.

3.2     Form of Bonds.  The Bonds and the  Certificate  of the  Holder  shall be
        respectively substantially of the tenor and in the form set forth in the
        Second  Schedule  of this  Deed,  with such  omissions,  insertions  and
        variations as are in this Deed provided or permitted. The Bonds shall be
        issued as fully registered Bonds, may be issued in any denominations and
        shall bear the respective dates given to them by the Grantor.  The Bonds
        shall be  payable on demand  and shall  bear  interest  before and after
        default, with an interest rate of 25% per annum,  calculated half-yearly
        and not in advance,  with interest on all overdue interest calculated at
        the same rate and in the same manner as the principal thereof,  from the
        due date until the date of payment.


<PAGE>
                                      -7-


3.3     Exchange of Bonds.  Bonds of any  denomination  may be  exchanged by the
        holder thereof for an equal aggregate  principal  amount of Bonds of the
        same or any other  denomination  in the name of such holder  alone or in
        the name of such holder or such other Person or several  Persons as such
        holder  may  designate  and  bearing  such date as the  Grantor  and the
        Bondholder  requesting such exchange may agree to or, upon failure to so
        agree, bearing the same date as the Bonds which are to be exchanged. All
        Bonds  returned  to the  Grantor  to effect  such an  exchange  shall be
        returned  to the  Holder for  cancellation.  Any Bonds  surrendered  for
        cancellation  but not exchanged shall  thereafter be treated as unissued
        Bonds and additional Bonds may be issued, pledged, hypothecated, sold or
        otherwise  disposed of by the Grantor from time to time,  provided  that
        the aggregate principal amount of all Bonds outstanding hereunder at any
        particular  time does not  exceed  the limit  set forth in  Article  2.1
        hereof.

3.4     Payment in Legal Tender.  Until the security  hereby  constituted  shall
        have become  enforceable  and the Holder shall have determined or become
        bound to enforce the same,  the  principal  of and interest on the Bonds
        shall be  payable  in lawful  money of  Canada at par to the  registered
        holder of the Bonds at the address given to the Holder from time to time
        by the Bondholders.

3.5     Signature of Bonds.  All Bonds issued  hereunder shall be signed for and
        on behalf of and in the name of the Grantor by any of its  directors  or
        officers (or any other duly authorized representative) acting alone.

3.6     Type.  When any of the  Bonds are to be issued  hereunder,  the  Grantor
        shall,  within a reasonable  delay,  cause to be prepared,  executed and
        delivered to the Holder  definitive  Bonds which may be  typewritten  or
        otherwise mechanically reproduced.

3.7     Delivery.  All Bonds may from time to time after the  execution  of this
        Deed be issued by the  Grantor and be  certified  by or on behalf of the
        Holder  and shall be  delivered  by the Holder to or to the order of the
        Grantor  from time to time  upon  receipt  by the  Holder of an order or
        orders in writing  signed by the  Grantor  who shall have same signed by
        any  of  its  directors  or  officers  (or  any  other  duly  authorized
        representative) acting alone.


<PAGE>
                                      -8-


3.8     Certification.  No Bond  shall be issued,  or if issued,  shall bind the
        Grantor or shall  entitle the holder to the  benefit of the  security of
        these  presents  until  it has been  certified  by or on  behalf  of the
        Holder.  Such  certification  by the Holder upon any such Bonds shall be
        conclusive  evidence  that the Bonds so certified  have been duly issued
        hereunder and that the holder  thereof is entitled to the benefit of the
        security under these  presents.  The certificate of the Holder signed on
        the Bonds issued hereunder shall not be construed as a representation or
        warranty by the Holder as to the validity or security of this Deed or of
        the  said  Bonds,  and the  Holder  shall in no  respect  be  liable  or
        answerable  for  the use of said  Bonds  or any of them or the  proceeds
        thereof.

3.9     Consideration, Issue and Rank. The Bonds may be issued for such price or
        consideration  as shall  be  determined  by the  Directors,  or,  at the
        discretion of the Directors,  may be  hypothecated  from time to time by
        the  Grantor to provide  security  for the  payment of present or future
        indebtedness or other  obligations,  present or future,  of the Grantor,
        provided  however that any Bonds so hypothecated  shall not be deemed to
        be redeemed by reason of the account of the Grantor  having ceased to be
        indebted while the Bonds remain so  hypothecated.  If any Bond is issued
        to provide  security as aforesaid  and is  subsequently  returned to the
        Grantor after having served such purpose,  the Grantor shall be entitled
        to reissue in the place and stead of the Bonds so returned  other Bonds,
        the whole under reserve of the  provisions of this Deed dealing with the
        aggregate  outstanding  principal  amount  of Bonds  which may be issued
        under the terms  hereof.  Each Bond,  as soon as issued and certified as
        herein  provided,  shall,  subject to the terms  hereof,  be equally and
        rateably  secured  hereby  as if all of the Bonds  had been  issued  and
        certified simultaneously.

3.10    Registration  and  Transfer.  At all times while any of the Bonds issued
        hereunder are  outstanding,  the Holder shall keep, at its office in the
        City of  Montreal,  a register  in which  shall be entered the names and
        addresses  of the holder or  holders of Bonds,  as well as the names and
        addresses of the Person or Persons who have  obtained  from a registered
        holder an  undivided  interest in any such Bonds and of which the Holder
        shall have received  written notice from such registered  holder,  as of
        and from the date of such notice.  Failure of any  registered  holder to
        notify the Holder as aforesaid or failure of the Holder to inscribe such
        undivided  interest in the register shall not, under any  circumstances,
        deprive such  undivided  owner of any of this  rights.  No transfer of a
        Bond  shall be valid  unless  made on such  register  by the  registered
        holder or his executors, administrators, successors or assigns or his or
        their attorney duly  appointed by an instrument in writing,  in form and
        execution  satisfactory  to the Holder,  and upon  compliance  with such
        reasonable  requirements  as the Holder may prescribe.  The ownership of
        the Bonds  shall be proven by such  register.  The  Bondholders  and the
        Grantor may examine this register  during normal  business hours on such
        days as the Holder's office is required by Law to remain open.

<PAGE>
                                      -9-


3.11    Rights of Holders.  The registered holder of a Bond shall be entitled to
        receive the principal moneys, premium, if any, and interest evidenced by
        such Bond, free from all rights of set-off, compensation or counterclaim
        between the Grantor and his transferor or any previous holder thereof on
        its behalf  and on behalf of any Person or several  Persons to whom such
        registered holder has granted any undivided interest therein.

3.12    Replacement of Bond. If a Bond becomes mutilated, lost or destroyed, the
        Grantor,  in its discretion,  may issue,  and the Holder shall thereupon
        certify and  deliver,  a new Bond of like date and tenor in  replacement
        and upon  cancellation  of the one  mutilated,  lost or  destroyed.  The
        applicant for a new bond shall in case of loss or destruction furnish to
        the Holder such evidence of ownership and of such loss or destruction as
        shall be satisfactory to the Holder and to the Grantor and shall furnish
        the Holder's Indemnification.

                                   ARTICLE 4

                               CHARGING PROVISIONS

4.1     Hypothec.  As a general and continuing  collateral  security for the due
        and punctual  payment and  performance  of the Secured  Obligations  and
        Accessories,  the Grantor does hereby  hypothecate the Collateral to and
        in favour of the Holder, for the benefit of the Bondholders, for the sum
        of Nine Million dollars  ($9,000,000.00)  in lawful money of Canada with
        interest  thereon  at the  Rate  of  Interest,  calculated  and  payable
        monthly,  not in  advance,  from the date  hereof  and  before and after
        demand, default or judgment.

4.2     No Floating Hypothec. The hypothec granted hereunder does not constitute
        and shall not constitute nor be construed as a floating  hypothec within
        the meaning of Article 2715 of the C.C.Q.


<PAGE>
                                      -10-


4.3     Additional Hypothec.  As general and continuing  collateral security for
        the performance by the Grantor of the Secured  Obligations not otherwise
        secured  by the  hypothecs  created  under  the  terms of  Article  4.1,
        including, without limiting the generality of the foregoing, interest on
        all overdue interest,  as well as the costs and expenses incurred by the
        Holder or any  Bondholder in order to preserve or realize upon the Liens
        created and to be created  from time to time under the terms  hereof and
        all other costs and  expenses  related to the Secured  Obligations,  the
        Grantor  hereby  hypothecates  the  Collateral  to and in  favour of the
        Holder,  for  the  benefit  of  the  Bondholders,  to the  extent  of an
        additional sum of One Million Eight Hundred  Thousand  Canadian  Dollars
        (CDN$1,800,000.00)  in lawful money of Canada,  with interest thereon at
        the Rate of Interest.

4.4     Hypothec for Benefit of All Bondholders.  The Holder shall have and hold
        the hypothec created  hereunder and all rights hereby conferred unto the
        Holder for the equal benefit and security of all the Bondholders holding
        Bonds issued and to be issued under this Deed and purchased  without any
        preference or priority of any of said Bonds over any others thereof,  by
        reason  of  priority  at the time of issue or  negotiation  thereof,  or
        otherwise however, and subject to the conditions,  provisions, covenants
        and stipulations herein expressed.

4.5     Continuing Validity.  The full amount of the foregoing hypothec shall be
        and remain continuing  collateral  security in favour of the Holder, for
        the benefit of the  Bondholders,  for the full payment or  fulfilment of
        the Secured Obligations and Accessories,  and such hypothec shall be and
        remain in full  force  and  effect  notwithstanding  the  repayment  and
        reduction or fulfilment at any time and from time to time of the Secured
        Obligations  and Accessories or any part thereof or the fact that at any
        time and from  time to time  there  may be no  Secured  Obligations  and
        Accessories  owing to the  Holder by the  Grantor,  the whole  until all
        Secured  Obligations  and  Accessories at any time and from time to time
        existing shall have been entirely repaid, fulfilled and released (in the
        manner  provided  at Article  22.3  hereof) to the  satisfaction  of the
        Holder,  and such  hypothec  shall  not be  reduced  unless  and until a
        document  evidencing  the  discharge  is  executed  by the Holder and is
        delivered in which it shall be expressly stated that the amounts therein
        referred to are in reduction of the  hypothec  hereby  created and until
        the hypothec  herein  created is released and  discharged  to the extent
        therein stated.

4.6     No  Reduction.  No payment  made by the  Grantor or by any Person on its
        behalf to the Holder shall in any way operate to extinguish the hypothec
        created  herein or as a reduction of said hypothec  hereby  created,  or
        effect novation, save only as and when such payment is expressly applied
        by the Holder in reduction  of the said  hypothec by means of a document
        evidencing the discharge executed by the Holder, pursuant to Article 4.5
        hereof.

<PAGE>
                                      -11-


4.7     No Novation. Nothing herein shall affect, novate, terminate or supersede
        any  covenants  and   obligations  of  the  Grantor  under  any  of  the
        Transaction Documents.

4.8     Further  Assurances.  The Grantor  will at its own expense do,  execute,
        acknowledge and deliver or cause to be done, executed,  acknowledged and
        delivered  all such further  acts,  deeds,  assignments,  registrations,
        publications  and  assurances  (including  instruments  supplemental  or
        ancillary  thereto)  as the  Holder  may  from  time to time  reasonably
        request to better  assure and  perfect its  security  on the  Collateral
        including,  without limitation,  specifically hypothecating in favour of
        the Holder, the right, title and interest of the Grantor in all property
        and assets subject to, or intended to be subject to, the charges of this
        Deed which the Grantor will hereafter acquire.

                                   ARTICLE 5

                        PAST, PRESENT OR FUTURE ADVANCES

5.1     The security  hereby  constituted  shall have effect  whether or not the
        Secured  Obligations  thereby secured shall have been incurred before or
        after or upon the date of the execution of this Deed.

                                   ARTICLE 6

                              POSSESSION BY GRANTOR

6.1     Until the security  hereby  constituted  shall become  enforceable,  the
        Grantor shall,  subject always to the provisions of this Deed, peaceably
        and quietly have,  hold, use,  occupy,  possess and enjoy the Collateral
        and manage and operate the same for its own use and benefit.

                                   ARTICLE 7

                              COLLECTION OF CLAIMS

7.1     Authorization  to Collect.  The Holder hereby  authorizes the Grantor to
        collect  when due the capital  falling due of, and any  revenues of, any
        claims   until  the  Holder  shall  have  given  the  Grantor  a  notice
        withdrawing such  authorization,  whereupon the Holder shall immediately
        have the right to collect all of them.

<PAGE>
                                      -12-


        This  notice  of  withdrawal  may be  given  at any  time if an Event of
        Default has occurred and is continuing and may be so given in respect of
        all or any part or parts of the claims.

7.2     Collection  of claims.  Upon notice by the Holder to the Grantor,  which
        may be given at any time if an Event  of  Default  has  occurred  and is
        continuing,  the Holder may require the Grantor to immediately  remit to
        the Holder all or a  specified  part of capital  and  revenues of claims
        received by the Grantor or to deposit the same in one or more designated
        bank  accounts or otherwise  to hold,  deal with or deliver such capital
        and revenues, all on such terms and conditions as the Holder may specify
        in such notice.

7.3     Statements of Claims.  Should the Holder serve a notice  withdrawing the
        authorization  granted to the  Grantor to collect all claims as provided
        herein,  the Grantor hereby agrees that all  statements  provided by the
        Holder to the  Grantor  with  respect to the claims  received  and their
        application by the Holder,  shall be prima facie  conclusive and binding
        unless manifestly wrong or incorrect.

7.4     No  Requirement  to  Enforce.  The Holder  shall have no  obligation  to
        exercise any rights in respect of any claims nor to enforce or to see to
        payment of the same,  whether by legal action or  otherwise.  The Holder
        shall not be liable for any or all losses or damages  resulting from any
        decision on the part of the Holder not to exercise,  to exercise only in
        part or to delay or suspend the  exercise or any failure or delay by the
        Holder in exercising  any or all of its rights under this  Article,  any
        other articles of this Deed or under the Transaction Documents.

7.5     Dealings  by Holder.  The Holder may give  acquittances  for any sums it
        collects  and may,  but shall not be  obligated  to,  realize any of the
        claims, grant extensions, grant releases, accept compositions,  renounce
        and  generally  deal with the  claims  and any  guarantees  or  security
        therefor,  and take any  action to  preserve,  protect  or  secure  such
        claims,  at such times and in such manner as it deems  advisable  in its
        sole  discretion,  without notice to or the consent of the Grantor,  and
        without  incurring any liability  therefor and without any obligation to
        render any account in respect thereof or in respect of moneys collected.


<PAGE>
                                      -13-


7.6     Irregular  Payments.  The Holder shall have no  obligation to inform the
        Grantor of any irregularity in the payment of the claims.

                                   ARTICLE 8

                          NO ASSUMPTION OF OBLIGATIONS

8.1     The Holder does not, in exercising any of its rights and recourses under
        this Deed or at law, in any way personally assume any of the obligations
        of the  Grantor.  The  Grantor  will  remain  liable  under the  Secured
        Obligations to observe and perform all the conditions and obligations to
        be observed and performed by the Grantor thereunder.

                                   ARTICLE 9

            REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GRANTOR

The Grantor hereby  represents and warrants to and covenants and agrees with the
Holder, for the benefit of the Bondholders, that:

9.1     Declarations,  representations,  warranties and covenants in Transaction
        Documents  reiterated.  The Grantor  hereby makes and  reiterates all of
        declarations,  representations,  warranties and covenants of the Grantor
        or relating to the Grantor,  as set forth in the Transaction  Documents,
        mutatis mutandis.

9.2     Grantor. Furthermore, the Grantor hereby declares, represents,  warrants
        and  covenants  that as of the date of this Deed of Hypothec  and at all
        times during which this Deed of Hypothec is in effect:

        9.2.1   the Grantor will pay and perform the  obligations of the Grantor
                under  the  Transaction  Documents  and  hereunder  without  the
                necessity of demand as and when due and payable or on demand, if
                on a demand basis, at the office of the Holder  indicated below,
                or at such other place as may from time to time be designated in
                writing by the Holder;


<PAGE>
                                      -14-


        9.2.2   the Grantor will pay all reasonable  judicial and extra judicial
                fees,  costs and expenses  (whether legal,  notarial or those of
                any other  professional)  relating  to (i) the  preparation  and
                publication of this Deed and all amendments thereto and renewals
                and discharges thereof,  (ii) the preparation and publication of
                notices of address,  (iii) all appraisal of the Collateral after
                default,  (iv) the  enforcement  of any of the  Holder's  rights
                hereunder  or  under  the  Transaction  Documents  and  (v)  the
                recovery  or  conservation  of  the  Collateral  which  include,
                without limitation, the following:

          9.2.2.1   the  usual  charges  of all  independent  managers  for  the
                    maintenance,  operation, administration and/or collection of
                    the Collateral; and

          9.2.2.2   reasonable  compensation  for any  person  or firm  engaged,
                    employed or consulted by or on behalf of the Holder who acts
                    after the  occurrence  of an Event of Default in  connection
                    with    the    maintenance,    operation,    administration,
                    conservation and/or collection of any of the Collateral;

        9.2.3   it has the capacity and the powers  necessary to enter into this
                Deed  and to  bind  itself  as  herein  provided  and  that  the
                execution  of this  Deed,  compliance  with its  provisions  and
                performance  of its covenants  shall not entail or result in any
                violation or default of any other agreement or document to which
                the Grantor is a party or by which it is bound;

        9.2.4   this Deed has been duly authorized by resolution or by any other
                necessary  action under its  constating  documents,  by-laws and
                otherwise, in order to give full effect to this Deed; and

        9.2.5   this Deed has been executed by a duly authorized  representative
                of the Grantor.


<PAGE>
                                      -15-



                                   ARTICLE 10

                                EVENTS OF DEFAULT

The Grantor shall be in default in each and every one of the following events:

10.1    upon the occurrence of an "Event of Default" as defined in the Notes;

10.2    if the  Grantor  fails to pay,  when due,  any  amounts  owing under the
        Bonds; or

10.3    if any or all other obligations  secured under this Deed of Hypothec are
        not paid or performed when due.

                                   ARTICLE 11

                               EFFECTS OF DEFAULT

11.1    Rights Upon Default.  Upon the  occurrence  of an Event of Default,  the
        security hereby  constituted  shall become  enforceable,  and the Holder
        shall, in addition to any of its other rights  hereunder,  and under the
        Transaction Documents,  forthwith be entitled to exercise any and all of
        the  rights  provided  for in this Deed and in Chapter V of Title III of
        Book VI of the C.C.Q.  and in the Code of Civil Procedure of Quebec.  In
        exercising any of the rights and recourses  available  hereunder,  under
        the Transaction Documents,  or at law, the Holder may, at its option, in
        respect of all or any part of the  Collateral,  exercise such rights and
        recourses as are available hereunder,  under the Transaction  Documents,
        or at law, as it chooses to exercise,  without  prejudicing the Holder's
        other  rights and  recourses  available in respect of all or part of the
        other Collateral. Furthermore, the Holder may exercise any of its rights
        and  recourses  in  respect  of  all  or any  part  of  the  Collateral,
        simultaneously or successively.  The Holder shall be entitled to acquire
        all or any part of the Collateral, when permitted by law.

11.2    Performance. The Holder shall be entitled, in its discretion, to perform
        on behalf of the Grantor any of the Grantor's  obligations  hereunder or
        under the  Transaction  Documents,  should  there be an Event of Default
        with respect  thereto.  In addition,  the Holder shall be entitled to do
        such things and make such  expenditures  as it considers  appropriate to
        enforce,  preserve and protect its rights and  interests  hereunder  and
        under the Transaction  Documents and the security constituted hereby and
        thereby.

<PAGE>
                                      -16-


11.3    No Waiver.  Any action taken by or on behalf of the Holder to remedy any
        Event of Default shall not  constitute a waiver of such default,  nor be
        deemed to have relieved the Grantor therefrom.  Failure of the Holder to
        insist  upon strict  performance  of any  covenants  of this Deed or the
        Transaction  Documents or to exercise  any right or option  hereunder or
        under the  Transaction  Documents  shall not be construed as a waiver or
        relinquishment for the future of any such covenant, right or option.

11.4    Rights  Cumulative.  The acceptance by the Holder following any Event of
        Default  of any sum owing to it by the  Grantor or the  exercise  by the
        Holder  of any  right  or  recourse  hereunder,  under  the  Transaction
        Documents,  or under any other  agreement  between  the  Grantor and the
        Holder shall not preclude the Holder from  exercising any other right or
        recourse,  all rights and recourses of the Holder being  cumulative  and
        not alternative.

11.5    Surrender.  If the  Holder  gives  the  Grantor  a prior  notice  of its
        intention to exercise a hypothecary  right, the Grantor shall, and shall
        cause any other  Person in  possession  of  Collateral,  to  immediately
        voluntarily surrender same to the Holder.

                                   ARTICLE 12

                    POSSESSION FOR PURPOSES OF ADMINISTRATION

12.1    Holder's Rights. In addition to the rights available to the Holder under
        the  Transaction  Documents  and  the  rights  and  recourses  upon  the
        occurrence  of an  Event  of  Default,  in the  event  that  the  Holder
        exercises  the  hypothecary  right to take  possession  for  purposes of
        administration,  the Holder  shall  have,  in addition to the rights and
        powers   provided   by  law  as   administrator   entrusted   with  full
        administration  of  the  property  of  others,  the  rights  and  powers
        contained in this Article.


<PAGE>
                                      -17-


12.2    Administration.  The Holder shall have the right, after having fulfilled
        all formalities  provided for at law for the exercise of its hypothecary
        right of taking possession for purposes of administration, to enter into
        and take possession of, through its officers, representatives, Receivers
        or other lawful attorney,  all or any part of the Collateral,  with full
        power of a Person entrusted with full  administration of the property of
        others, including, but without limiting the generality of the foregoing,
        the full  power to  administer  all or any part of the  Collateral,  the
        power  to  purchase  on  credit,  advance  its own  moneys  at a rate of
        interest equal to the Prime Rate of Bank of Nova Scotia in effect at the
        time of such advances,  plus 2%, for the payment of all taxes, wages and
        other charges or hypothecs, costs or expenses ranking in priority to the
        Secured  Obligations or the security hereof and other current  operating
        expenses  incurred  before or after such  taking of  possession,  at the
        discretion  of the Holder;  the moneys so borrowed or advanced  shall be
        repaid by the Grantor on demand and until repaid, shall bear interest at
        said rate and be secured by the hypothecs constituted hereby. The Holder
        shall be entitled to receive  payment of any Claims and the Holder shall
        be entitled to become a party to any  contract of any nature  whatsoever
        with respect to all or any part of the Collateral or any or all of them,
        the Grantor hereby expressly authorizing the Holder to become a party to
        any such contracts for and on behalf of the Grantor.

12.3    Surrender.  If the  Holder  exercises  its  hypothecary  right of taking
        possession for the purpose of  administration,  the Grantor hereby binds
        and  obliges  itself  to  yield  up  possession  of  and  surrender  the
        Collateral  to the Holder on demand and agrees to put no  obstacles  and
        not to hinder the rights and recourses of the Holder,  but to facilitate
        by all legal  means,  the  actions  of the Holder  hereunder  and not to
        interfere with the powers hereby granted to the Holder  pursuant to this
        Deed and at law.

12.4    Documents.  The Grantor shall  forthwith by and through its officers and
        directors  execute such  documents  and transfers as may be necessary to
        place the Holder in legal  possession of any or all of the Collateral in
        order to transfer  the control of the  administration  to the Holder and
        thereupon all the powers,  functions,  rights and privileges of each and
        every of the  directors  and  officers  of the  Grantor  shall cease and
        determine with respect to such Collateral unless specifically  continued
        in writing by the Holder for specific purposes.

12.5    Application of Moneys. The moneys arising from the administration of the
        Holder shall be applied in  accordance  with the  provisions  of Article
        22.2 of this Deed.

12.6    Sale.  The Grantor agrees that with respect to any sale by the Holder of
        all or any part of the Collateral in the exercise of the Holder's rights
        hereunder, under the Transaction Documents or at law upon the occurrence
        of an Event of  Default  which is  continuing,  it will be  commercially
        reasonable to sell all or any part of the Collateral:


<PAGE>
                                      -18-


        12.6.1  together or separately;

        12.6.2  by auction or by call for  tenders by  advertising  such sale or
                call for tenders once in a local daily newspaper of the Holder's
                choice at least  seven  (7) days  prior to such sale or close of
                call for tenders;

        12.6.3  by sale by agreement  after receipt by the Holder of a bona fide
                offer of at least one prospective  purchaser,  who may include a
                Person related to or affiliated  with the Holder or customers of
                the Holder; and

        12.6.4  by any combination of the foregoing;

        and any such sale may be on such terms as to credit or otherwise  and as
        to  upset  price or  reserve  bid or  price  as the  Holder  in its sole
        discretion may deem advantageous,  and the Grantor agrees that the price
        received at any such sale shall  constitute  a  commercially  reasonable
        price.

12.7    Other Sales.  The foregoing  shall not preclude the Holder from agreeing
        to sell,  or making any sale in any other manner not  prohibited  by law
        nor shall it be  interpreted to mean that only a sale made in conformity
        with the  foregoing is  commercially  reasonable  or that only the price
        received  at  a  sale  made  in  conformity  with  the  foregoing  shall
        constitute a commercially reasonable price.

12.8    Timing of Sale. The Holder may at its entire  discretion,  determine the
        appropriate  moment  for  such  sale to be  conducted  and  the  Grantor
        acknowledges  and agrees that such  determination by the Holder will not
        constitute unnecessary delay.


                                   ARTICLE 13

                             APPLICATION NOT PAYMENT

Notwithstanding any law, agreement,  usage or custom to the contrary,  including
Article  2743 of the  C.C.Q.,  receipt by the Holder (or by the Grantor as agent
for the  Holder) of any  claims  shall not  operate  as  payment of any  Secured
Obligations  unless the Holder  expressly  applies  the  amounts so  received in
reduction of such Secured  Obligations  in accordance  with this Deed and to the
extent only of such application.


<PAGE>
                                      -19-


                                   ARTICLE 14

                                POWER OF ATTORNEY

The Grantor hereby  irrevocably  nominates,  constitutes and appoints the Holder
and any Person further designated by the Holder, upon the occurrence of an Event
of Default which is continuing,  to be the lawful attorney-in-fact and mandatary
of the  Grantor  for and in the name and on behalf of the Grantor to execute and
do  any  deeds,  documents,   transfers,  demands,   conveyances,   assignments,
assurances,  consents and things which the Grantor ought to sign,  execute or do
hereunder and to commence,  continue and defend any proceedings authorized to be
taken  hereunder and generally to use the name of the Grantor in the exercise of
all or any of the powers hereby  conferred on the Holder and any agent appointed
hereunder.

                                   ARTICLE 15

                               REMEDIES CUMULATIVE

No remedy,  right or recourse of the Holder  conferred or reserved  hereunder is
intended to be exclusive of any other remedy, right or recourse under this Deed,
under the  Transaction  Documents,  under any other security or at law, but each
and every such  remedy  shall be  cumulative,  and shall be in addition to every
other remedy,  right or recourse given hereunder or now existing or hereafter to
exist by contract, by law or by statute.

                                   ARTICLE 16

                       JUDGMENT FOR AMOUNTS REMAINING DUE

In the case of any judicial or other  proceedings to enforce the security hereby
constituted, and without limiting any right of the Holder to obtain judgment for
any greater  amount,  judgment may be rendered  against the Grantor in favour of
the  Holder for any  amount  which may  remain  due in  respect  of the  Secured
Obligations and Accessories  after the application to the payment thereof of the
proceeds of any sale of all or part of the  Collateral  or any or all of them or
any additional security therefor.

                                   ARTICLE 17

                            PAYMENTS TO THIRD PARTIES

If the  Holder  is at any time or from time to time  required  to make a payment
pursuant to this Deed any such payment or payments,  and all costs of the Holder
(including  legal costs and legal fees) shall be at once  payable by the Grantor
and shall bear  interest  at the Prime Rate of Bank of Nova  Scotia in effect at
the time of such payment, plus 2%, and the repayment thereof to the Holder shall
be secured hereby.

<PAGE>
                                      -20-


ARTICLE 18

                     OTHER PROVISIONS CONCERNING THE HOLDER

18.1    To the full extent  necessary or  desirable,  the Grantor and the Holder
        specifically  acknowledge  and agree  that the Holder is  executing  and
        delivering  this Deed,  and accepting the hypothecs,  rights,  remedies,
        powers and  benefits  conferred  upon the Holder  hereby,  as the person
        holding the power of attorney  ("fonde de pouvoir") of the  Bondholders,
        including  for all purposes of article  2962 of the C.C.Q.  Furthermore,
        notwithstanding  the  provisions of Section 32 of An Act  respecting the
        Special Powers of Legal Persons (Quebec),  the Holder may acquire and be
        the holder of any Bond issued hereunder.

18.2    By way of  supplement  to the  provisions  of any  applicable  laws  and
        without  limiting  any  provisions  of this Deed  dealing  with the same
        subject matters, the Grantor agrees that upon the occurrence of an Event
        of Default which is continuing:

        18.2.1  The Holder and any agent or  Receiver  appointed  by it shall as
                regards all the powers, authorities and discretions vested in it
                have  absolute and  uncontrolled  discretion  as to the exercise
                thereof, whether in relation to the manner or as to the mode and
                time for the exercise thereof;

        18.2.2  The Holder shall not, nor shall any agent or Receiver  appointed
                by it, be  responsible  or liable,  otherwise than for any debts
                contracted by them,  for damages to persons or property,  or for
                salaries  or  non-fulfilment  of  contracts  during  any  period
                wherein  the Holder or such agent or Receiver  shall  manage the
                Collateral  or any part  thereof  upon or after  entry as herein
                provided and, except as otherwise agreed in writing,  the Holder
                shall not be bound to do,  observe  or  perform or to see to the
                observance  or   performance  by  the  Grantor  of  any  of  the
                obligations  herein  imposed upon the Grantor,  nor in any other
                way to supervise  or  intervene in the conduct of the  Grantor's
                operation of any of the  Collateral  (or any portion  thereof or
                any asset or right comprised therein);


<PAGE>
                                      -21-


        18.2.3  In the event of any sale in  accordance  with the  provisions of
                this Deed or the Transaction  Documents,  whether by the Holder,
                by any agent or  Receiver  or under  judicial  proceedings,  the
                Grantor shall execute and deliver to the purchaser on demand any
                instrument or assurance  reasonably  necessary to confirm to the
                purchaser the title of the property so sold, and, in the case of
                any such sale,  the Holder is hereby  irrevocably  authorized by
                the  Grantor to  execute  on its  behalf  any such  confirmatory
                instrument or assurance;

        18.2.4  No Person  dealing with the Holder or its agents or any Receiver
                shall be  concerned  to inquire  whether  the  powers  which the
                Holder or such agents or  Receiver  are  purporting  to exercise
                have become exercisable, or whether any money remains due on the
                security of this Deed or under the Transaction Documents,  or as
                to  the  necessity  or  expediency  of  the   stipulations   and
                conditions subject to which any sale shall be made, or otherwise
                as to the  propriety or  regularity  of any sale or of any other
                dealing  by the  Holder  or such  agents  or  Receiver  with the
                Collateral or to see to the application of any money paid to the
                Holder or such  agents or  Receiver.  In the absence of fraud on
                the part of such Person, such dealings shall be deemed,  insofar
                as regards  the  safety and  protection  of such  Person,  to be
                within the powers hereby conferred and to be valid and effectual
                accordingly;

        18.2.5  Subject to  applicable  laws, no delay or omission of the Holder
                to exercise any right or power  accruing  upon any default shall
                impair such right or power, or shall be construed to be a waiver
                of any such default or an  acquiescence  therein and every power
                and remedy  given  hereby to the Holder may be  exercised  by it
                from time to time and as often as may be deemed expedient by it;

        18.2.6  The Holder may invest any Person  with the powers  vested in the
                Holder pursuant to this Deed or at law, or appoint any Person to
                perform  the powers  vested in the Holder  pursuant to this Deed
                and at law for and on behalf of the  Grantor,  in which case the
                following provisions shall apply:


<PAGE>
                                      -22-


          18.2.6.1  every such Person shall be the irrevocable  mandatary of the
                    Grantor  for  the  collection  of all  sums  falling  due in
                    respect of all or any part of each of the Collateral, or any
                    or all of them;

          18.2.6.2  every  such  Person  shall  have  the  power to carry on the
                    enterprise of the Grantor, in whole or in part, with respect
                    to all or any part of the  Collateral or any or all of them,
                    and may, in the discretion of the Holder, be vested with all
                    or any of the powers and discretion of the Holder hereunder;

          18.2.6.3  the Holder may from time to time  determine  the  reasonable
                    remuneration  of every such  Person who shall be entitled to
                    deduct  the  same out of the  receipts  from any part of the
                    Collateral or any or all of them or the proceeds therefrom;

          18.2.6.4  every such Person shall, as concerns the  responsibility for
                    his acts or  omissions,  be deemed the agent or attorney of,
                    or  employed  or engaged by the  Grantor  and in no event an
                    agent or employee of the Holder;

          18.2.6.5  the  engagement or  appointment  of every such Person by the
                    Holder  shall not  create any  liability  on the part of the
                    Holder to such Person in any  respect  and such  engagement,
                    appointment  or delegation or anything  which may be done by
                    any  such  Person  or  the  removal  of  any  Person  or the
                    termination of any such  appointment or engagement shall not
                    have the  effect of  creating  any  liability  of any nature
                    whatsoever of any such Person towards the Holder;

          18.2.6.6  every such Person  shall from time to time have the power to
                    operate, in accordance with normal practice, all or any part
                    of  the  Collateral  or  any or  all  of  them,  cancel  any
                    contracts  and  renew  from  time to time  any or all of the
                    contracts,  for such term and subject to such  provisions as
                    such  Person  may  deem  advisable  or  expedient  including
                    exercising all rights and recourses available to the Grantor
                    and in so doing every such Person  shall act as the attorney
                    or agent of the  Grantor  and shall  have the  authority  to
                    execute, whether or not under seal, any contract in the name
                    of and on behalf of the Grantor  and the Grantor  undertakes
                    to and does  hereby  ratify and  confirm  whatever  any such
                    Person may do; and


<PAGE>
                                      -23-


          18.2.6.7  every such Person shall have full power to manage,  operate,
                    repair, alter, complete, preserve, maintain or extend all or
                    any part of the Collateral or any or all of them in the name
                    of the Grantor  for the  purpose of securing  the payment of
                    the Secured  Obligations  including taking all such steps as
                    the Holder  may  consider  necessary  or  desirable  for the
                    purposes of completing  all or any part of the Collateral or
                    any or all of them, or any improvements or additions thereto
                    as the Holder may  determine  and for such purposes to enter
                    into all such  contracts and undertake all such  obligations
                    as the Holder may determine,  and obtain  security  therefor
                    upon the  Collateral;  provided that the Holder shall not be
                    under  any  obligation  to  complete  the  Buildings  or any
                    additions or improvements thereto.

                                   ARTICLE 19

                            POWER TO INSTITUTE SUITS

The Holder shall have power to institute and maintain such suits and proceedings
as it may be advised  shall be necessary or expedient to prevent any  impairment
of the security hereunder by any acts of the Grantor, or of others, in violation
of this Deed or unlawful,  or as the Holder may be advised shall be necessary or
expedient to preserve and to protect its interests in respect of all or any part
of the Collateral.

                                   ARTICLE 20

                            APPOINTMENT OF NEW HOLDER

The Holder may at any time  resign  from being the person  holding  the power of
attorney of the Bondholders and the holder of all security created in its favour
for the benefit of the  Bondholders  under this Deed and  thereby be  discharged
from all further duties and liabilities under this Deed by giving to the Grantor
and the  Bondholders  thirty (30) days' notice in writing or such shorter notice
as the Bondholders and the Grantor may be willing to accept, and the Bondholders
may, at any time by a Bondholders' Instrument, appoint a new Holder in the place
of any Holder so resigning;  and the Bondholders  shall also have the power by a
Bondholders'  Instrument  to remove  the Holder at any time and to appoint a new
Holder as the Person  holding the power of attorney for the  Bondholders  and as
the  holder  of all  security  created  in its  favour  for the  benefit  of the
Bondholders  under this Deed. Any such new Holder,  without  further  formality,
shall be vested  with and have all the  property,  right,  powers and  authority
granted to the Holder  hereunder  and be subject in all  respects  to the terms,
conditions and provisions of this Deed.

<PAGE>
                                      -24-


                                   ARTICLE 21

                              POWERS OF BONDHOLDERS

21.1    Powers of Bondholders.  The Bondholders  shall have the following powers
        exercisable from time to time by a Bondholders' Instrument:

        21.1.1  Modification of Rights of Bondholders or Holder.  Power to agree
                to  any  modification,  abrogation,  alteration,  compromise  or
                arrangement of the rights of the  Bondholders  and/or the Holder
                against  the Grantor or against its  undertaking,  property  and
                assets or any part thereof, whether such rights arise under this
                Deed or the Bonds or otherwise;

        21.1.2  To Direct  Holder.  Power to direct or  authorize  the Holder to
                exercise any power,  right,  remedy or authority  given to it by
                this  Deed  in  any  manner   specified  in  such   Bondholders'
                Instrument or to refrain from exercising any such power,  right,
                remedy or authority;

        21.1.3  Waiver of Default. Power to waive and direct the Holder to waive
                any  default on the part of the  Grantor in  complying  with any
                provision  of this Deed or the Bonds either  unconditionally  or
                upon any conditions  specified in such Bondholders'  Instrument,
                whether or not the  security  under this Deed shall have  become
                enforceable by reason of such default;


<PAGE>
                                      -25-


        21.1.4  Alienation  of Property.  Power to authorize the Grantor to sell
                or otherwise dispose of its undertakings,  property or assets or
                any part of parts  thereof and to instruct the Holder to release
                the same free from the Liens created  under this Deed,  all upon
                such  terms  and   conditions   as  may  be  specified  in  such
                Bondholders' Instrument.

21.2    Definition   of   Bondholders'   Instrument.   The  term   "Bondholders'
        Instrument"  means a document signed in one or more  counterparts by the
        holder or holders of not less than  sixty-six and two thirds percent (66
        2/3%) of the  principal  amount  of the Bonds  outstanding  at any time,
        setting out the exercise of any of the powers granted to the Bondholders
        by this  Article or  requesting  the  Holder to take or to refrain  from
        taking some act, action or proceeding  specified therein, or setting out
        any other  authorization or direction,  which by the terms hereof may be
        given by a Bondholders' Instrument.  Any Bondholder may execute any such
        instrument in person or by agent or attorney duly authorized in writing.

21.3    Binding  Effect of  Bondholders'  Instrument.  Any power  exercised by a
        Bondholders'  Instrument  as provided in this  Article  shall be binding
        upon the  Bondholders  and each of them, and the Holder  (subject to the
        provisions of its  indemnity  herein  contained)  shall be bound to give
        effect thereto accordingly.

                                   ARTICLE 22

                                  MISCELLANEOUS

22.1    Separate  Security.  The present Deed and the Liens created herein,  are
        and  shall be in  addition  to and not in  substitution  for,  any other
        security held by the Holder,  the Bondholders or any one thereof for the
        fulfilment  of the Secured  Obligations  and shall thus not operate as a
        novation of any of the Secured  Obligations  of the Grantor  towards the
        Holder, the Bondholders or any one thereof.

22.2    Application of Payments.  Any insurance indemnity,  as well as any other
        amount or other  property  received by the Holder in the exercise of the
        rights  conferred  upon it by this Deed or by Law or in any other manner
        with respect to any of the Collateral,  may be retained by the Holder as
        Collateral or applied to the payment of the Secured Obligations, whether
        or not they are due,  or to other debts of the  Grantor,  whether or not
        they are secured. Notwithstanding the provisions of Article 1572 and the
        second  paragraph  of Article 2743 of the Civil Code of Quebec and every
        other legal rule  concerning  the  imputation  of  payments,  any amount
        collected by the Holder, even on account of the voluntary performance of
        the Secured  Obligations,  shall be applied at the Holder's  discretion,
        and the Holder may vary such  application from time to time, in whole or
        in part, as it sees fit.


<PAGE>
                                      -26-


22.3       Discharge.  After the Secured  Obligations and the  Accessories  have
           been  paid in full,  the  Holder  shall at the  written  request  and
           expense of the Grantor  cancel and discharge the charges of this Deed
           relating  to the  Collateral,  and execute and deliver to the Grantor
           such deeds or other  instruments  as shall be requisite to effect the
           cancellation of the publication hereof.

                The  registrar  of  any  registration   division  in  which  any
                properties affected by this Deed are situate shall discharge and
                cancel the publication of any hypothec  constituted  hereby upon
                the  publication  of  any   acquittance,   discharge,   release,
                mainlevee  or  document  to that  effect  signed by the  Holder,
                without being obliged to see that any of the  conditions of this
                Deed or the Security Documents have been fulfilled.

22.4    Reinstatement.  Notwithstanding  the provisions of Article 21.1.3 to the
        contrary and  notwithstanding  anything  else to the contrary  contained
        herein,  this Deed shall continue to be effective or be  reinstated,  as
        the case may be, if at any time any amount received by the Holder or the
        Bondholders in respect of the  Collateral or the Secured  Obligations is
        rescinded,  or must  otherwise  be restored or returned by the Holder or
        the   Bondholders   upon  the   insolvency,   bankruptcy,   dissolution,
        liquidation or reorganization of the Grantor or any of its Affiliates or
        any guarantor of all or any part of the Secured Obligations, or upon the
        appointment of any intervenor, receiver or conservator of, or Holder, or
        agent or similar  official  for,  the Grantor or any such  Affiliate  or
        guarantor,  or any substantial  part of their  respective  properties or
        assets, or otherwise, all as though such payment had not been made.

22.5    Bankruptcy,  etc. To the extent permitted by law, the obligations of the
        Grantor  under this Deed shall  remain in full force and effect  without
        regard to, and shall not be impaired by (i) any bankruptcy,  insolvency,
        reorganization,  arrangement, readjustment,  composition, liquidation or
        the like of the Grantor,  or of any other  Person;  (ii) any exercise or
        nonexercise,  or any waiver,  by the Holder or the  Bondholders,  of any
        right,  remedy,  power or  privilege  under or in  respect of any of the
        Secured  Obligations  or any of the  Collateral  or any  other  security
        therefor;  (iii) any amendment to or modification of this Deed or any of
        the other Operative Documents; or (iv) the taking of additional security
        for or any guarantee of any of the Secured Obligations or the release or
        discharge or  termination  of any  security or guarantee  for any of the
        Secured Obligations; and whether or not the Grantor shall have notice or
        knowledge of any of the foregoing.


<PAGE>
                                      -27-


22.6    Consents,  Approvals,  etc.  Upon  the  exercise  by the  Holder  or the
        Bondholders of any power,  right,  privilege or remedy  pursuant to this
        Deed or any of the other Operative Documents which requires any consent,
        approval,   registration,   qualification   or   authorization   of,  or
        declaration  or filing  with,  or other  action  by,  any other  Person,
        including,   without   limitation,   any   governmental   authority   or
        instrumentality, the Grantor will execute and deliver, or will cause the
        execution and delivery of, all such agreements, documents, applications,
        certificates,  instruments and other documents and papers and will take,
        or will cause to be taken,  such other  action  that may be  required to
        obtain  such   consent,   approval,   registration,   qualification   or
        authorization of or other action by such other Person and/or that may be
        reasonably requested by the Holder in connection therewith.

22.7    Benefit  of Deed.  The rights  hereby  conferred  upon the Holder  shall
        benefit all of its respective successors, including any entity resulting
        from its amalgamation with any other Person or Persons.

22.8    Notice of Default.  The mere expiry of the time limit for performing any
        of the  Secured  Obligations  shall serve to put the Grantor in default,
        without any notice or demand being required for that purpose.

22.9    Waivers. The Grantor may not claim that an act or omission by the Holder
        constitutes  or  implies a waiver of their  right to invoke a default by
        the Grantor or to assert a right arising out of such default, unless the
        Holder has expressly so stated after the occurrence of the default.

22.10   Additional  Waivers.  No waiver by the  Holder of any  default  shall be
        effective  unless made in writing and no such waiver  shall extend to or
        affect  any  obligation  not  expressly   waived  or  impair  any  right
        consequent thereon.

22.11   Renunciation. To the fullest extent permitted by Law, the parties hereto
        agree that  Articles  1332 to 1338 of the Civil Code of Quebec  will not
        apply to this Deed nor to the exercise of the rights  conferred upon the
        Holder hereunder.


<PAGE>
                                      -28-


22.12   Waivers  Voluntary.  The  Grantor's  waivers set forth in this Deed have
        been made voluntarily, intelligently and knowingly and after the Grantor
        has been  apprised  and  counselled  by its  attorneys  as to the nature
        thereof and its possible alternative rights.

22.13   Communications.  All communications  provided for herein shall be mailed
        by certified mail (return receipt  requested) at the addresses  referred
        to and  shall be  effective  at the time  specified  in the  Transaction
        Documents  and,  in the case of the  Holder,  at the address of its head
        office.

22.14   Successors and Assigns. This Deed shall bind and inure to the benefit of
        and be  enforceable  by the Holder and the  Grantor,  successors  to the
        Grantor and the successors and assigns of the Holder,  and, in addition,
        shall  inure to the  benefit of and be  enforceable  by each holder from
        time to time of any of the Bonds who, upon acceptance of any such Bonds,
        shall, without further action, be entitled to enforce the provisions and
        enjoy  the  benefits  hereof  and  thereof,  whether  or not an  express
        assignment to such holder of rights  hereunder and  thereunder  has been
        made.

22.15   Severability.  Any  provision  of  this  Deed  which  is  prohibited  or
        unenforceable in any  jurisdiction  shall, as to such  jurisdiction,  be
        ineffective  to the  extent  of  such  prohibition  or  unenforceability
        without   invalidating   the   remaining   provisions   hereof  in  that
        jurisdiction  or  affecting  the  validity  or  enforceability  of  such
        provision in any other jurisdiction.

22.16   Amendments.  All  amendments  of this Deed and all waivers of compliance
        herewith  shall be in writing and shall be effected in  compliance  with
        the provisions of the Transaction Documents.

22.17   Governing Law;  Jurisdiction.  This Deed,  including the validity hereof
        and  the  rights  and  obligations  of the  parties  hereunder,  and all
        amendments  and   supplements   hereof  and  all  waivers  and  consents
        hereunder,  shall be  construed in  accordance  with and governed by the
        domestic  substantive  laws of the  Province  of Quebec  without  giving
        effect to any choice of law or conflicts  of law  provision or rule that
        would cause the  application  of the  domestic  substantive  laws of any
        other  jurisdiction.  The Grantor, to the extent that it may lawfully do
        so,  hereby  consents  to service  of  process,  and to be sued,  in the
        Province of Quebec and consents to the jurisdiction of the courts of the
        Province  of  Quebec,  as well as to the  jurisdiction  of all courts to
        which an appeal may be taken from such  courts,  for the  purpose of any
        suit,  action or other proceeding  arising out of any of its obligations
        hereunder  and  under  the  other  Documents  or  with  respect  to  the
        transactions  contemplated  hereby or thereby,  and expressly waives any
        and all  objections it may have as to venue in any such courts.  Subject
        to  applicable  Law,  the  Grantor  further  agrees  that a summons  and
        complaint commencing an action or proceeding in any of such courts shall
        be properly  served and shall  confer  personal  jurisdiction  if served
        personally or by certified  mail to it in accordance  with Article 22.13
        hereof  or as  otherwise  provided  under  the laws of the  Province  of
        Quebec.  Notwithstanding the foregoing,  the Grantor agrees that nothing
        contained in this Article 22.17 shall  preclude the  institution  of any
        such suit, action or other proceeding in any jurisdiction other than the
        Province of Quebec.

<PAGE>
                                      -29-


22.18   Formal Date. For the purposes of convenience,  this Deed may be referred
        to as bearing formal date of August 10, 2006  irrespective of the actual
        date of its execution.

                                   ARTICLE 23

                                    LANGUAGE

23.1    English  Language.  The parties hereto have expressly  required that the
        present Deed and all deeds,  documents and notices  relating  thereto be
        drafted in the English language.

23.2    Langue Anglaise. Les parties aux presentes ont expressement exige que le
        present  acte et tous  autres  contrats,  documents  et avis  qui y sont
        afferents soient rediges en langue anglaise.



                                    SCHEDULE

The following is the First Schedule of this Deed herein referred to:


<PAGE>
                                      -30-


                                 FIRST SCHEDULE




                                  FORM OF BOND

C-CHIPS TECHNOLOGIES  CORPORATION (NORTH AMERICA) (incorporated under the Canada
Business Act)

25% Collateral Mortgage Demand Bond

NO.      $


C-CHIPS  TECHNOLOGIES   CORPORATION  (NORTH  AMERICA)  (hereinafter  called  the
"Corporation"),  for value received,  promises to pay upon  presentation of this
Bond   to    _______________________________    or   registered    assigns,   at
___________________________________   or  at  any  other  branch  in  Canada  of
___________________________     on    demand     the     principal     sum    of
___________________________ Dollars ($_______________) in lawful money of Canada
and to pay  interest  thereon on demand from the date of this Bond,  both before
and after default,  in like money, at the rate of twenty-five  percent (25%) per
annum,  calculated  half-yearly and not in advance, with interest on all overdue
interest,  calculated  at the same rate and in the same manner as the  principal
thereof,  from the date that the  interest  becomes  due to the  actual  date of
payment.

This Bond is issued under and secured by a deed of hypothec  bearing formal date
of August __, 2006  executed by the  Corporation  in favour of __, as the Person
holding  the power of attorney of the  Bondholders  for all  purposes of Article
2692  of  the  Civil  Code  of  Quebec,  as  same  may  be  amended,   restated,
supplemented,  replaced or otherwise  modified form time to time (herein  called
the "Deed of Hypothec")  to which Deed of Hypothec  reference is hereby made for
the terms and conditions  upon and subject to which this Bond is issued and held
and the nature and extent of the security therefore.

As of the dated thereof,  the aggregate  principal  amount of Bonds which may be
issued under and secured by the Deed of Hypothec from time to time is limited to
___ Canadian  Dollars  (Cdn$___).  All bonds at any time  outstanding  rank pari
passu and are equally and rateably secured by the Deed of Hypothec.

This Bond is subject to the terms and conditions of the Deed of Hypothec, to all
of which the holder of this Bond by his acceptance hereof assents.


<PAGE>
                                      -31-


This Bond is fully  registered  and may only be transferred by the holder hereof
upon compliance with the provisions of the Deed of Hypothec in that respect.

This Bond shall not become  obligatory until it shall have been certified by the
Holder under the Deed of Hypothec.

All capitalized  terms and expressions used herein,  unless  otherwise  defined,
shall have the same meaning as that ascribed to them in the Deed of Hypothec.

The  Corporation  by its  signature  on the  one  hand  and the  holder  and any
transferee  of this Bond by their  acceptance  of this  Bond on the  other  hand
acknowledge  that they have expressly  required it to be drawn up in the English
language.

La  compagnie,   par  sa  signature,   d'une  part,  et  le  detenteur  et  tous
cessionnaires de cette obligation par leur acceptation,  d'autre part, declarent
qu'ils ont expressement exige qu'elle soit redigee en langue anglaise.


IN WITNESS WHEREOF, C-Chips Technologies Corporation (North America). has caused
this Bond to be signed by Anna  Pennino its  representative  and to be dated the
10th day of August, Two Thousand and Six (2006).


         C-CHIPS TECHNOLOGIES CORPORATION (NORTH AMERICA)


By:  _________________________
         Anna Pennino

WHEREOF ACTE:


DONE AND  PASSED at the City of  Montreal,  Province  of  Quebec,  on this tenth
(10th) day of August, Two Thousand and Six (2006) and of record in the office of
the undersigned Notary under the number

(              ) of her notarial minutes.

<PAGE>
                                      -32-


And the  parties,  after  having  declared  to have  taken  cognizance  of these
presents  and having  exempted the said Notary from reading them or causing them
to be read,  signed these  presents,  all in the presence of the said Notary who
also signed.



                  BUSH ROSS, P.A.


        -----------------------------------
         Benjamin Gross, attorney ad hoc



                                            OF THE FIRST PART



                  C-CHIPS TECHNOLOGIES CORPORATION (NORTH AMERICA)


        -----------------------------------
         Anna Pennino, representative



                                    OF THE SECOND PART



         Diane Rimok, Notary


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