insertion of headings are for convenient reference only and are not to affect
its interpretation.
The expressions "Article" and "Section" followed by a
number mean and refer to the specified Articles or Section of this security
agreement.
SECTION 1.7
SCHEDULES.
The Schedules attached to this security agreement shall, for all purposes of
this security agreement, form an integral part of it.
ARTICLE 2
SECURITY
SECTION 2.1
GRANT OF SECURITY.
(1)
SUBJECT TO SECTION 2.4, THE OBLIGOR
CHARGES, ASSIGNS, HYPOTHECATES, PLEDGES AND TRANSFERS TO THE COLLATERAL AGENT,
AND GRANTS TO THE COLLATERAL AGENT FOR THE BENEFIT OF THE SECURED CREDITORS
(AND, TO THE EXTENT THE FOLLOWING CONSTITUTES "COLLATERAL" UNDER, AND AS DEFINED
IN, THE ORIGINAL CANADIAN SECURITY AGREEMENT, DOES HEREBY RECONFIRM (WITHOUT
INTERRUPTION) ITS CHARGE,
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ASSIGNMENT, HYPOTHECATION, PLEDGE, TRANSFER AND GRANT TO THE COLLATERAL AGENT
UNDER THE ORIGINAL CANADIAN SECURITY AGREEMENT OF), A SECURITY INTEREST IN ALL
THE OBLIGOR'S RIGHT, TITLE AND INTEREST IN AND TO THE PERSONAL PROPERTY AND
UNDERTAKING OF THE OBLIGOR NOW OWNED OR HEREAFTER ACQUIRED (COLLECTIVELY, THE
"COLLATERAL") INCLUDING ANY AND ALL OF THE OBLIGOR'S:
(A)
INVENTORY INCLUDING GOODS HELD FOR SALE,
LEASE OR RESALE, GOODS FURNISHED OR TO BE FURNISHED TO THIRD PARTIES UNDER
CONTRACTS OF LEASE, CONSIGNMENT OR SERVICE, GOODS WHICH ARE RAW MATERIALS OR
WORK IN PROCESS, GOODS USED IN OR PROCURED FOR PACKING AND MATERIALS USED OR
CONSUMED IN THE BUSINESS OF THE OBLIGOR;
(B)
EQUIPMENT, MACHINERY, FURNITURE, FIXTURES,
PLANT, VEHICLES AND OTHER GOODS OF EVERY KIND AND DESCRIPTION AND ALL LICENCES
AND OTHER RIGHTS AND ALL RECORDS, FILES, CHARTS, PLANS, DRAWINGS,
SPECIFICATIONS, MANUALS AND DOCUMENTS RELATING THERETO;
(C)
UNITS;
(D)
RECEIVABLES AND ALL AGREEMENTS, BOOKS,
ACCOUNTS, INVOICES, LETTERS, DOCUMENTS AND PAPERS RECORDING, EVIDENCING OR
RELATING THERETO;
(E)
MONEY, DOCUMENTS OF TITLE AND CHATTEL
PAPER;
(F)
SECURITIES AND INSTRUMENTS, INCLUDING THE
SECURITIES LISTED IN SCHEDULE 2.1(1)(F);
(G)
INTANGIBLES INCLUDING ALL SECURITY
INTERESTS, GOODWILL, CHOSES IN ACTION, CONTRACTS, CONTRACT RIGHTS, SOFTWARE AND
OTHER CONTRACTUAL BENEFITS;
(H)
COPYRIGHTS, DESIGNS, PATENTS, CONFIDENTIAL
INFORMATION, TRADE SECRET RIGHTS AND TRADE-MARKS AND OTHER INTELLECTUAL PROPERTY
(COLLECTIVELY, THE "INTELLECTUAL PROPERTY") INCLUDING THE INTELLECTUAL PROPERTY
DESCRIBED IN SCHEDULE 2.1(1)(H);
(I)
INSURANCE POLICIES;
(J)
SUBSTITUTIONS AND REPLACEMENTS OF AND
INCREASES, ADDITIONS AND, WHERE APPLICABLE, ACCESSIONS TO THE PROPERTY DESCRIBED
IN SECTION 2.1(1)(A) THROUGH SECTION 2.1(1)(I), INCLUSIVE; AND
(K)
PROCEEDS IN ANY FORM DERIVED DIRECTLY OR
INDIRECTLY FROM ANY DEALING WITH ALL OR ANY PART OF THE PROPERTY DESCRIBED IN
SECTION 2.1(1)(A), THROUGH SECTION 2.1(1)(J), INCLUSIVE, OR THE PROCEEDS OF SUCH
PROCEEDS.
(2)
THE SECURITY INTEREST OF THE COLLATERAL
AGENT UNDER THIS SECURITY AGREEMENT EXTENDS TO ALL COLLATERAL OF THE KIND WHICH
IS THE SUBJECT OF THIS SECURITY AGREEMENT WHICH THE OBLIGOR MAY ACQUIRE AT ANY
TIME DURING THE CONTINUATION OF THIS SECURITY AGREEMENT.
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(3)
NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS SECURITY AGREEMENT, (X) THE SECOND LIEN CREDITORS SHALL NOT
HAVE A SECURITY INTEREST IN, AND THE GRANT OF SECURITY INTERESTS PURSUANT TO
THIS SECURITY AGREEMENT FOR THE BENEFIT OF THE SECOND LIEN CREDITORS SHALL NOT
EXTEND