Document:

Exhibit
      10.4

     

    GENERAL
      SECURITY AGREEMENT

    

    Dated
      as of June [     ], 2007

     

    
      	
              TO:

            	
              Name:
                CIT
                FINANCIAL LTD.

              
                Address:
                  207
                  Queen’s Quay West, Toronto, Ontario M5J 1A7

                Attention:
                  Legal
                  Department

                Facsimile:
                  416-507-5223

              

            

    

     

    RECITALS:

     

    A. INTERNATIONAL
      CONDUITS LTD. (the
      “Debtor”)
      is, or
      may become, indebted or liable to CIT
      FINANCIAL LTD.
      (the
“Creditor”)
      pursuant to the terms of a credit agreement dated as of the date hereof (as
      amended, supplemented, restated or replaced from time to time, the “Credit
      Agreement”).

     

    B. To
      secure
      the payment and performance of the Obligations, the Debtor has agreed to grant
      to the Creditor the Security Interests in respect of the Collateral in
      accordance with the terms of this Agreement.

     

    For
      good
      and valuable consideration, the receipt and adequacy of which are acknowledged
      by the Debtor, the Debtor agrees with and in favour of the Creditor as
      follows:

     

    1. Definitions.
      In this
      Agreement capitalized terms used but not otherwise defined herein shall have
      the
      meanings given to them in the Credit Agreement. The rules of construction
      specified in Section
      1.2
      of the
      Credit Agreement shall also apply to this Agreement. Unless otherwise defined
      herein or in the Credit Agreement, all terms that are defined in the PPSA shall
      have the same meanings herein as given to them in the PPSA. As used in this
      Agreement, the following terms have the following meanings:

     

    “Accessions”,
      “Account”,
      “Chattel
      Paper”,
      “Certificated
      Security”,
      “Consumer
      Goods”,
      “Document
      of Title”,
      “Equipment”,
      “Futures
      Account”,
      “Futures
      Contract”,
      “Futures
      Intermediary”,
      “Goods”,
      “Instrument”,
      “Intangible”,
      “Inventory”,
      “Investment
      Property”,
      “Money”,
      “Proceeds”,
      “Securities
      Account”,
      “Securities
      Intermediary”,
      “Security”,
      “Security
      Certificate”,
      “Security
      Entitlement”,
      and
“Uncertificated
      Security”
      have the
      meanings given to them in the PPSA.

     

    “Agreement”
      means
      this agreement, including the schedules and recitals to this agreement, as
      it or
      they may be amended, supplemented, restated or replaced from time to time,
      and
      the expressions “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar
      expressions refer to this Agreement and not to any particular section or other
      portion of this Agreement.

     

    “Books
      and Records”
      means
      all books, records, files, papers, disks, documents and other repositories
      of
      data recording in any form or medium, evidencing or relating to the Personal
      Property of the Debtor which are at any time owned by the Debtor or to which
      the
      Debtor (or any Person on the Debtor’s behalf) has access.

     

    “Business
      Day”
means
      any day other than a Saturday, Sunday or statutory holiday in the Province
      of
      Ontario.

     

    “Collateral”
      means
      all of the present and after-acquired:

     

    
      	 	
              (i)

            	
              undertaking;

            

    

     

    
      	 	
              (ii)

            	
              Personal
                Property (including, without limitation, all Books and Records, Permits
                and any Personal Property that may be described in any schedule to
                this
                Agreement or any schedules, documents or listings that the Debtor
                may from
                time to time provide to the Creditor in connection with this Agreement),
                except for any Securities held by the Debtor in any of its Subsidiaries;
                and

            

    

     

    
      	 	
              (iii)

            	
              real
                property (including any real property that may be described in any
                schedule to this Agreement or any schedules, documents or listings
                that
                the Debtor may from time to time provide to the Creditor in connection
                with this Agreement and including all Fixtures (together with accessions
                thereto and replacement parts therefor), improvements, buildings
                and other
                structures placed, installed or erected from time to time on any
                such real
                property), of
                the Debtor, including all such property in which the Debtor now or
                in the
                future has any right, title or interest whatsoever, whether owned,
                leased,
                licensed, possessed or otherwise held by the Debtor, and all Proceeds
                thereof (including, without limitation, all insurance and claims
                for
                insurance effected or held for the benefit of the Debtor in respect
                thereof), wherever located.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Contracts”
      means
      all contracts, licences and agreements to which the Debtor is at any time a
      party or pursuant to which the Debtor has at any time acquired rights, and
      includes (i) all rights of the Debtor to receive money due and to become due
      to
      it in connection with a contract, licence or agreement, (ii) all rights of
      the
      Debtor to damages arising out of, or for breach or default in respect of, a
      contract, licence or agreement, and (iii) all rights of the Debtor to perform
      and exercise all remedies in connection with a contract, licence or
      agreement.

     

    “Copyrights”
means
      all of the following now owned or hereafter acquired by a Debtor: (a) all
      copyright rights in any work subject to the copyright laws of Canada or any
      other country, whether as author, assignee, transferee or otherwise, and (b)
      all
      registrations and applications for registration of any such copyright in Canada
      or any other country, including registrations, recordings, supplemental
      registrations and pending applications for registration in the Canadian
      Intellectual Property Office or any similar office or agency in any other
      country or any political subdivision thereof, including those listed on
Schedule
      A
      hereto.

     

    “Credit
      Agreement”
      has the
      meaning set out in the recitals hereto.

     

    “Creditor”
      has the
      meaning set out in the recitals hereto.

     

    “Debtor”
      has the
      meaning set out in the recitals hereto.

     

    “Fixtures”
means,
      with respect to the Debtor, all “fixtures” (as defined in the PPSA), including,
      without limitation, all trade fixtures, facilities and equipment, however
      affixed or attached to real property or buildings or other structures on real
      property, now owned or hereafter acquired by the Debtor.

    

    “Governmental
      Authority”
      means
      the Government of Canada, any other nation or any political subdivision thereof,
      whether provincial, state, territorial or local, and any agency, authority,
      instrumentality, regulatory body, court, central bank, fiscal or monetary
      authority or other authority regulating financial institutions, and any other
      entity exercising executive, legislative, judicial, taxing, regulatory or
      administrative powers or functions of or pertaining to government, including
      the
      Bank Committee on Banking Regulation and Supervisory Practices of the Bank
      of
      International Settlements.

     

    “Industrial
      Design”
means
      a
      design for a finished article which has been registered under the Industrial
      Design Act
      (Canada).

     

    “Intellectual
      Property Rights”
      means
      all industrial and intellectual and similar property rights of the Debtor of
      every kind and nature or in which the Debtor has any right, title or interest,
      including Copyrights, Patents, unpatented inventions, Trade marks, Industrial
      Designs, confidential or proprietary technical and business information,
      integrated circuit topographies, know-how, show-how and trade secrets, all
      Contracts related to any such industrial and intellectual property rights,
      software and databases and all embodiments or fixations thereof and related
      documentation, registrations and franchises, and all additions, improvements
      and
      accessions to, and books and records describing or used in connection with,
      any
      of the foregoing.

     

    “Issuer”
      has
      the
      meaning given to that term in the STA.

     

    “Lien”
      means,
      (a) with respect to any asset, any mortgage, deed of trust, lien, pledge,
      hypothec (whether movable or immovable), hypothecation, encumbrance, charge,
      security interest, royalty interest, adverse claim, defect to title or right
      of
      set off in, on or of such asset, (b) the interest of a vendor or a lessor under
      any conditional sale agreement, capital lease, title retention agreement or
      consignment agreement (or any financing lease having substantially the same
      economic effect as any of the foregoing) relating to any asset, (c) any purchase
      option, call or similar right of a third party with respect to such asset,
      (d)
      any netting arrangement, defeasance arrangement or reciprocal fee arrangement,
      and (e) any other arrangement having the effect of providing
      security.

     

    “Obligations”
      means
      all present and future indebtedness, liabilities and obligations of any and
      every kind, nature and description (whether direct or indirect, joint or
      several, absolute or contingent, matured or unmatured) of the Debtor to the
      Creditor under, in connection with or with respect to the Loan Documents, and
      any unpaid balance thereof.

     

    “Organizational
      Documents”
      means,
      with respect to any Person, such Person’s articles or other charter documents,
      by-laws, unanimous shareholder agreement, partnership agreement or trust
      agreement, as applicable, and any and all other similar agreements, documents
      and instruments relative to such Person.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    “Patents”
means
      all of the following now owned or hereafter acquired by the Debtor: (a) all
      letters patent of Canada or any other country, including registrations
      recordings and pending application in Canadian Intellectual Property Office
      or
      any similar offices in any other country, including those listed on Schedule
      A
      hereto,
      and (b) all reissues, continuations, divisions, continuations-in-part, renewals
      or extension thereof, and the inventions disclosed or claimed therein, including
      the right to make, use and/or sell the inventions disclosed or claimed
      therein.

     

    “Permits”
      means
      all permits, licences, waivers, exemptions, consents, certificates,
      authorizations, approvals, franchises, rights-of-way, easements and entitlements
      that the Debtor has, requires or is required to have, to own, possess or operate
      any of its property or to operate and carry on any part of its
      business.

     

    “Permitted
      Liens”
      means
      the Security Interests and all other Liens permitted in writing by the Creditor
      in the Credit Agreement.

     

    “Person”
      includes
      any natural person, corporation, company, limited liability company, unlimited
      liability company, trust, joint venture, association, incorporated organization,
      partnership, Governmental Authority or other entity.

     

    “Personal
      Property”
      means
      personal property and includes Accounts, Chattel Paper, Contracts Documents
      of
      Title, Equipment, Goods, Instruments, Intangibles, Intellectual Property Rights,
      Inventory, Investment Property, Money, and Securities.

     

    “Pledged
      Certificated Securities”
      means
      any
      and all Collateral that is a Certificated Security.

     

    “Pledged
      Futures Contracts”
      means
      any
      and all Collateral that is a Futures Contract.

     

    “Pledged
      Futures Accounts”
      means
      any
      and all Collateral that is a Futures Account.

     

    “Pledged
      Futures Intermediary”
      means,
      at
      any time, any Person which is at such time is a Futures Intermediary at which
      a
      Pledged Futures Account is maintained.

     

    “Pledged
      Futures Intermediary’s Jurisdiction”
      means,
      with respect to any Pledged Futures Intermediary, its jurisdiction as determined
      under section 7.1(4) of the PPSA.

     

    “Pledged
      Issuer”
      means,
      at any time, any Person which is at such time an Issuer with respect to any
      Pledged Securities or Pledged Security Entitlements.

     

    “Pledged
      Issuer’s Jurisdiction”
      means,
      with respect to any Pledged Issuer, its jurisdiction as determined under section
      44 of the STA.

     

    “Pledged
      Security Certificates”
      means
      any and all Security Certificates representing the Pledged Certificated
      Securities.

     

    “Pledged
      Securities”
      means
      any
      and all Collateral that is a Security.

     

    “Pledged
      Securities Accounts”
      means
      any
      and all Collateral that is a Securities Account.

     

    “Pledged
      Securities Intermediary”
      means,
      at
      any time, any Person which is at such time is a Securities Intermediary at
      which
      a Pledged Securities Account is maintained.

     

    “Pledged
      Securities Intermediary’s Jurisdiction”
      means,
      with respect to any Securities Intermediary, its jurisdiction as determined
      under section 45(2) of the STA.

     

    “Pledged
      Security Entitlements”
      means
      any
      and all Collateral that is a Security Entitlement.

     

    “Pledged
      Uncertificated Securities”
      means
      any
      and all Collateral that is an Uncertificated Security.

     

    “PPSA”
      means
      the Personal
      Property Security Act as
      in
      effect from time to time in the Province of Ontario including all regulations
      from time to time made under such legislation; provided that, if validity,
      perfection or the effect of perfection or non-perfection or the priority of
      the
      Security Interest granted hereunder in any Collateral or the rights and remedies
      of the Creditor are governed by the PPSA or other similar legislation as in
      effect in a jurisdiction other than Ontario, then "PPSA"
      shall
      mean the Personal Property Security Act or other similar legislation, including
      all regulations from time to time made under such legislation, as in effect
      from
      time to time in such other jurisdiction for purposes of the provisions hereof
      relating to such validity, perfection, effect of perfection or non-perfection,
      to priority or to such rights and remedies.

     

    “Prime
      Rate”
      means
      the
      rate announced by the Creditor from time to time as its prime rate for Canadian
      Dollar commercial loans made in Canada.

     

    “Proceeds”
means
      all “proceeds” (as defined in the PPSA), including without limitation (i) any
      and all proceeds of any insurance, indemnity, warranty or guarantee payable
      to
      the Creditor or to the Debtor from time to time with respect to any of the
      Collateral, (ii) any and all payments (in any form whatsoever) made or due
      and
      payable to the Debtor from time to time in connection with the requisition,
      confiscation, condemnation, seizure or forfeiture of all or any part of the
      Collateral by any governmental authority (or any person acting under colour
      of
      governmental authority), (iii) any and all profits, rentals or receipts, in
      whatever form, arising from the collection, sale, lease, exchange, assignment,
      licensing or other disposition of, or realization upon, any Collateral and
      (iv)
      any and all other amounts from time to time paid or payable under or in
      connection with any of the Collateral.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    “Receiver”
      means a
      receiver, a manager or a receiver and manager.

     

    “Release
      Date”
      means
      the date on which all the Obligations have been indefeasibly paid and discharged
      in full and the Creditor has no further obligations to the Debtor under the
      Loan
      Documents pursuant to which further Obligations might arise.

     

    “Security
      Interests”
      means
      the Liens created by the Debtor in favour of the Creditor under this
      Agreement.

     

    “STA”
      means
      the Securities
      Transfer Act
      of the
      Province of Ontario, as such legislation may be amended, renamed or replaced
      from time to time, and includes all regulations from time to time made under
      such legislation.

     

    “Subsidiary”
      means,
      with respect to any Person (the “parent”)
      at any
      date, any other Person (a) of which securities or other ownership interests
      representing more than 50% of the equity or more than 50% of the ordinary voting
      power or, in the case of a partnership, more than 50% of the general partnership
      interests are, as of such date, owned, controlled or held, or (b) that is,
      as of
      such date, otherwise Controlled, by the parent or one or more Subsidiaries
      of
      the parent or by the parent and one or more Subsidiaries of the
      parent.

     

    “Trademarks”
means
      all of the following now owned or hereafter acquired by the debtor: (a) all
      trademarks, service marks, trade names, corporate names, company names, business
      names, fictitious business names, trade styles, trade dress, logos, other source
      or business identifiers, designs and general intangibles of like nature, now
      existing or hereafter adopted or acquired, all registrations and recordings
      thereof, and all registration and recording applications filed in connection
      therewith, including registrations and registration applications in the Canadian
      Intellectual Property Office or any similar offices in any other country or
      any
      political subdivision thereof, and all extensions or renewals thereof, including
      those listed on Schedule
      A
      hereto,
      (b) all goodwill associated therewith or symbolized thereby and (c) all other
      assets, rights and interest that uniquely reflect or embody such
      goodwill.

    “ULC”
      means an
      Issuer that is an unlimited company or unlimited liability company.

     

    “ULC
      Laws”
      means
      the Companies
      Act
      (Nova
      Scotia), the Business
      Corporations Act
      (Alberta), and any future laws governing ULCs.

     

    “ULC
      Shares”
      means
      shares or other equity interests in the capital stock of a ULC.

     

    2. Grant
      of Security Interests.
      As
      general and continuing collateral security for the prompt and complete payment
      and performance when due of all of the Obligations, the Debtor pledges,
      hypothecates, mortgages, charges, transfers and assigns (by way of security)
      to
      the Creditor, and grants to the Creditor a security interest in, the
      Collateral.

     

    3. Limitations
      on Grant of Security Interests.
      If the
      grant of any Security Interest in respect of any Contract, Intellectual Property
      Right or Permit under Section 2 would result in the termination or breach of
      such Contract, Intellectual Property Right or Permit, then such Contract,
      Intellectual Property Right or Permit will not be subject to any Security
      Interest under Section 2 but will be held in trust by the Debtor for the benefit
      of the Creditor and, on the exercise by the Creditor of any of its rights or
      remedies under this Agreement following an Event of Default will be assigned
      by
      the Debtor as directed by the Creditor, provided
      that
      the
      Security Interests shall attach to such Contract, Intellectual Property Right
      or
      Permit, or applicable portion thereof, immediately at such time as the condition
      causing such termination or breach is remedied. In addition, the Security
      Interests do not attach to Consumer Goods or extend to the last day of the
      term
      of any lease or agreement for lease of real property. Such last day will be
      held
      by the Debtor in trust for the Creditor and, on the exercise by the Creditor
      of
      any of its rights or remedies under this Agreement following an Event of
      Default, will be assigned by the Debtor as directed by the Creditor. For greater
      certainty, no Intellectual Property Right shall be transferred to the Creditor
      by sole virtue of the grant of the Security Interests contained in Section
      2.

     

    4. Attachment;
      No Obligation to Advance.
      The
      Debtor confirms that value has been given by the Creditor to the Debtor, that
      the Debtor has rights in the Collateral existing at the date of this Agreement
      and that the Debtor and the Creditor have not agreed to postpone the time for
      attachment of any of the Security Interests to any of the Collateral. The
      Security Interests will have effect and be deemed to be effective whether or
      not
      the Obligations or any part thereof are owing or in existence before or after
      or
      upon the date of this Agreement. Neither the execution and delivery of this
      Agreement nor the provision of any financial accommodation by the Creditor
      shall
      oblige the Creditor to make any financial accommodation or further financial
      accommodation available to the Debtor or any other Person.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    5. Representations
      and Warranties.
      The
      Debtor represents and warrants to the Creditor that, as of the date of this
      Agreement:

     

    
      	 	
              (i)

            	
              Debtor
                Information.
                All of the information set out in Schedule A is accurate and
                complete.

            

    

     

    
      	 	
              (ii)

            	
              Title;
                No Other Security Interests.
                Except for Permitted Liens, the Debtor owns (or, with respect to
                any
                leased or licensed property forming part of the Collateral, holds
                a valid
                leasehold or licensed interest in) the Collateral free and clear
                of any
                Liens. The Debtor is the record and beneficial owner of all Collateral
                that is Investment Property. No security agreement, financing statement
                or
                other notice with respect to any or all of the Collateral is on file
                or on
                record in any public office, except for filings with respect to Permitted
                Liens.

            

    

     

    
      	 	
              (iii)

            	
              Amount
                of Accounts.
                The amount represented by the Debtor to the Creditor from time to
                time as
                owing by each account debtor or by all account debtors in respect
                of the
                Accounts will at such time be the correct amount so owing by such
                account
                debtor or debtors and, unless disclosed in writing by the Debtor
                to the
                Creditor at that time, will be owed free of any dispute, set-off
                or
                counterclaim. Except as disclosed in writing by the Debtor to the
                Creditor, neither the Debtor nor (to the best of the Debtor’s knowledge)
                any other party to any Account or Contract is in default or is likely
                to
                become in default in the performance or observance of any of the
                terms of
                such Account or Contract where such default is or could reasonably
                be
                expected to be materially adverse to the Debtor or the
                Creditor.

            

    

     

    
      	 	
              (iv)

            	
              Consent
                to Transfer.
                For the purposes of complying with any transfer restrictions contained
                in
                the Organizational Documents of any Pledged Issuer, the Debtor hereby
                irrevocably consents to any transfer of the Pledged Securities of
                such
                Pledged Issuer.

            

    

     

    
      	 	
              (v)

            	
              Intellectual
                Property Rights.
                All Intellectual Property Rights, the nature of the Debtors right,
                title
                or interest therein, and all registrations and applications for
                registrations pertaining thereto, are described in Schedule A to
                this
                Agreement. Each Intellectual Property Right is valid, subsisting,
                unexpired, enforceable, and has not been abandoned. In the case of
                copyright works, the Debtor has obtained full and irrevocable waivers
                of
                all moral rights or similar rights pertaining to such works. Except
                as set
                out in Schedule A to this Agreement, none of the Intellectual Property
                Rights have been licensed or franchised by the Debtor to any Person
                or, to
                the best of the Debtor’s knowledge, infringed or otherwise misused by any
                Person. Except as set out in Schedule A to this Agreement, the exercise
                of
                any Intellectual Property Right, or any licensee or franchisee thereof,
                has not infringed or otherwise misused any intellectual property
                right of
                any other Person, and the Debtor has not received and is not aware
                of any
                claim of such infringement or other
                misuse.

            

    

     

    
      	 	
              (vi)

            	
              Due
                Authorization.
                The Pledged Securities have been duly authorized and validly issued
                and
                are fully paid and non-assessable.

            

    

     

    
      	 	
              (vii)

            	
              Warrants,
                Options, etc.
                There are no outstanding warrants, options or other rights to purchase,
                or
                other agreements outstanding with respect to, or property that is
                now or
                hereafter convertible into, or that requires the issuance or sale
                of, any
                Pledged Securities.

            

    

     

    
      	 	
              (viii)

            	
              No
                Required Disposition.
                There is no existing agreement, option, right or privilege capable
                of
                becoming an agreement or option pursuant to which the Debtor would
                be
                required to sell or otherwise dispose of any Pledged Securities or
                under
                which any Pledged Issuer thereof has any obligation to issue any
                Securities of such Pledged Issuer to any
                Person.

            

    

     

    6. Survival
      of Representations and Warranties.
      All
      representations and warranties made by the Debtor in this Agreement (a) are
      material, (b) will be considered to have been relied on by the Creditor, and
      (c)
      will survive the execution and delivery of this Agreement or any investigation
      made at any time by or on behalf of the Creditor and any disposition or payment
      of the Obligations until the Release Date.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    7. Covenants.
      The
      Debtor covenants and agrees with the Creditor that:

     

    
      	 	
              (i)

            	
              Further
                Documentation.
                The Debtor will from time to time, at the expense of the Debtor,
                promptly
                and duly authorize, execute and deliver such further instruments
                and
                documents, and take such further action, as the Creditor may request
                for
                the purpose of obtaining or preserving the full benefits of, and
                the
                rights and powers granted by, this Agreement (including the filing
                of any
                financing statements or financing change statements under any applicable
                legislation with respect to the Security Interests). The Debtor
                acknowledges that this Agreement has been prepared based on the existing
                laws in the Province referred to in the “Governing Law” section of this
                Agreement and that a change in such laws, or the laws of other
                jurisdictions, may require the execution and delivery of different
                forms
                of security documentation. Accordingly, the Debtor agrees that the
                Creditor will have the right to require that this Agreement be amended,
                supplemented, restated or replaced, and that the Debtor will immediately
                on request by the Creditor authorize, execute and deliver any such
                amendment, supplement, restatement or replacement (i) to reflect
                any
                changes in such laws, whether arising as a result of statutory amendments,
                court decisions or otherwise, (ii) to facilitate the creation and
                registration of appropriate security in all appropriate jurisdictions,
                or
                (iii) if the Debtor merges or amalgamates with any other Person or
                enters
                into any corporate reorganization, in each case in order to confer
                on the
                Creditor Liens similar to, and having the same effect as, the Security
                Interests.

            

    

     

    
      	 	
              (ii)

            	
              Maintenance
                of Records.
                The Debtor will keep and maintain accurate and complete records of
                the
                Collateral, including a record of all payments received and all credits
                granted with respect to the Accounts and Contracts. At the written
                request
                of the Creditor, the Debtor will mark any Collateral specified by
                the
                Creditor to evidence the existence of the Security
                Interests.

            

    

     

    
      	 	
              (iii)

            	
              Right
                of Inspection.
                The Creditor may, at all times during normal business hours, without
                charge, examine and make copies of all Books and Records, and may
                discuss
                the affairs, finances and accounts of the Debtor with its officers
                and
                accountants. The Creditor may also, without charge, enter the premises
                of
                the Debtor where any of the Collateral is located for the purpose
                of
                inspecting the Collateral, observing its use or otherwise protecting
                its
                interests in the Collateral. The Debtor, at its expense, will provide
                the
                Creditor with such clerical and other assistance as may be reasonably
                requested by the Creditor to exercise any of its rights under this
                paragraph.

            

    

     

    
      	 	
              (iv)

            	
              Limitations
                on Other Liens.
                The Debtor will not create, incur or permit to exist, and will defend
                the
                Collateral against, and will take such other action as is necessary
                to
                remove, any and all Liens in and other claims affecting the Collateral,
                other than the Permitted Liens, and the Debtor will defend the right,
                title and interest of the Creditor in and to the Collateral against
                the
                claims and demands of all Persons.

            

    

     

    
      	 	
              (v)

            	
              Limitations
                on Dispositions of Collateral.
                The Debtor will not, without the Creditor’s prior written consent, sell,
                lease or otherwise dispose of any of the Collateral, except that
                Inventory
                may be sold, leased or otherwise disposed of and, subject to the
                terms of
                this Agreement, Accounts may be collected, in the ordinary course
                of the
                Debtor’s business. Following an Event of Default, all Proceeds of the
                Collateral (including all amounts received in respect of Accounts)
                received by or on behalf of the Debtor, whether or not arising in
                the
                ordinary course of the Debtor’s business, will be received by the Debtor
                as trustee for the Creditor and will be immediately paid to the
                Creditor.

            

    

     

    
      	 	
              (vi)

            	
              Limitations
                on Modifications, Waivers, Extensions.
                Other than as permitted by paragraph (g) below, the Debtor will not
                (i)
                amend, modify, terminate or waive any provision of any Permit, Contract
                or
                any document giving rise to an Account in any manner which is or
                could
                reasonably be expected to be materially adverse to the Debtor or
                the
                Creditor, or (ii) fail to exercise promptly and diligently its rights
                under each Contract and each document giving rise to an Account if
                such
                failure is or could reasonably be expected to be materially adverse
                to the
                Debtor or the Creditor.

            

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (vii)

            	
              Maintenance
                of Collateral.
                The Debtor will maintain all tangible Collateral in good operating
                condition, ordinary wear and tear excepted, and the Debtor will provide
                all maintenance, service and repairs necessary for such purpose.
                The
                Debtor shall maintain in good standing all registrations and applications
                with respect to the Intellectual Property Rights except to the extent
                that
                any failure to do so could not reasonably be expected to be materially
                adverse to the Debtor or the
                Creditor.

            

    

     

    
      	 	
              (viii)

            	
              Further
                Identification of Collateral.
                The Debtor will promptly furnish to the Creditor such statements
                and
                schedules further identifying and describing the Collateral, and
                such
                other reports in connection with the Collateral, as the Creditor
                may from
                time to time reasonably request, including an updated list of any
                motor
                vehicles or other “serial number” goods owned by the Debtor and classified
                as Equipment, including vehicle identification
                numbers.

            

    

     

    
      	 	
              (ix)

            	
              Merger
                or Consolidation.
                The Debtor will not permit any Pledged Issuer to merge or consolidate
                unless all of the outstanding capital stock of the surviving or resulting
                corporation is, upon such merger or consolidation, pledged hereunder
                and
                no cash, securities or other property is distributed in respect of
                the
                outstanding shares of any other constituent
                corporation.

            

    

     

    
      	 	
              (x)

            	
              Agreements
                re Intellectual Property Rights.
                Promptly upon request from time to time by the Creditor, the Debtor
                will
                authorize, execute and deliver any and all agreements, instruments,
                documents and papers that the Creditor may request to evidence the
                Security Interests in any Intellectual Property Rights and, where
                applicable, the goodwill of the business of the Debtor connected
                with the
                use of, and symbolized by, any such Intellectual Property
                Rights.

            

    

     

    
      	 	
              (xi)

            	
              Instruments;
                Documents of Title; Chattel Paper.
                Promptly upon request from time to time by the Creditor, the Debtor
                will
                deliver to the Creditor, endorsed and/or accompanied by such instruments
                of assignment and transfer in such form and substance as the Creditor
                may
                reasonably request, any and all Instruments, Documents of Title and
                Chattel Paper included in or relating to the Collateral as the Creditor
                may specify in its request.

            

    

     

    
      	 	
              (xii)

            	
              Pledged
                Certificated Securities.
                The Debtor will deliver to the Creditor any and all Pledged Security
                Certificates and other materials as may be required from time to
                time to
                provide the Creditor with control over all Pledged Certificated Securities
                in the manner provided under section 23 of the STA. At the request
                of the
                Creditor, the Debtor will cause all Pledged Security Certificates
                to be
                registered in the name of the Creditor or its
                nominee.

            

    

     

    
      	 	
              (xiii)

            	
              Pledged
                Uncertificated Securities.
                The Debtor will deliver to the Creditor any and all such documents,
                agreements and other materials as may be required from time to time
                to
                provide the Creditor with control over all Pledged Uncertificated
                Securities in the manner provided under section 24 of the
                STA.

            

    

     

    
      	 	
              (xiv)

            	
              Pledged
                Security Entitlements.
                The Debtor will deliver to the Creditor any and all such documents,
                agreements and other materials as may be required from time to time
                to
                provide the Creditor with control over all Pledged Security Entitlements
                in the manner provided under section 25 or 26 of the
                STA.

            

    

     

    
      	 	
              (xv)

            	
              Pledged
                Futures Contracts.
                The Debtor will deliver to the Creditor any and all such documents,
                agreements and other materials as may be required from time to time
                to
                provide the Creditor with control over all Pledged Futures Contracts
                in
                the manner provided under subsection 1(2) of the
                PPSA.

            

    

     

    
      	 	
              (xvi)

            	
              Partnerships,
                Limited Liability Companies.
                The Debtor will ensure that the terms of any interest in a partnership
                or
                limited liability company that is Collateral will expressly provide
                that
                such interest is a “security” for the purposes of the
                STA.

            

    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (xvii)

            	
              Transfer
                Restrictions.
                If the constating documents of any Pledged Issuer restrict the transfer
                of
                the Securities of such Pledged Issuer, then the Debtor will deliver
                to the
                Creditor a certified copy of a resolution of the directors, shareholders,
                unitholders or partners of such Pledged Issuer, as applicable, consenting
                to the transfer(s) contemplated by this Agreement, including any
                prospective transfer of the Collateral by the Creditor upon a realization
                on the Security Interests.

            

    

     

    
      	 	
              (xviii)

            	
              Notices.
                The Debtor will advise the Creditor promptly, in reasonable detail,
                of:

            

    

     

    
      	 	
              (A)

            	
              any
                change to a Pledged Securities Intermediary’s Jurisdiction, Pledged
                Issuer’s Jurisdiction, or Pledged Future Intermediary’s
                Jurisdiction;

            

    

     

    
      	 	
              (B)

            	
              any
                change in the location of the jurisdiction of incorporation or
                amalgamation, chief executive office, or domicile of the
                Debtor;

            

    

     

    
      	 	
              (C)

            	
              any
                change in the name of the Debtor;

            

    

     

    
      	 	
              (D)

            	
              any
                merger or amalgamation of the Debtor with any other
                Person;

            

    

     

    
      	 	
              (E)

            	
              any
                additional jurisdiction in which the Debtor carries on business or
                has
                tangible Personal Property;

            

    

     

    
      	 	
              (F)

            	
              any
                additional jurisdiction in which material account debtors of the
                Debtor
                are located;

            

    

     

    
      	 	
              (G)

            	
              any
                acquisition of any right, title or interest in real property by the
                Debtor;

            

    

     

    
      	 	
              (H)

            	
              the
                creation or acquisition of any Subsidiary of the
                Debtor;

            

    

     

    
      	 	
              (I)

            	
              any
                Lien (other than Permitted Liens) on, or claim asserted against,
                any of
                the Collateral; or

            

    

     

    
      	 	
              (J)

            	
              the
                occurrence of any event, claim or occurrence that could reasonably
                be
                expected to have a material adverse effect on the value of the Collateral
                or on the Security Interests.

            

    

     

    The
      Debtor will not effect or permit any of the changes referred to in clauses
      (ii)
      through (viii) above unless all filings have been made and all other actions
      taken that are required in order for the Creditor to continue at all times
      following such change to have a valid and perfected first priority Security
      Interest in respect of all of the Collateral.

     

    8. Voting
      Rights.
      Unless
      an Event of Default has occurred and is continuing, the Debtor will be entitled
      to exercise all voting power from time to time exercisable in respect of the
      Pledged Securities and Pledged Security Entitlements and give consents, waivers
      and ratifications in respect thereof; provided, however, that no vote will
      be
      cast or consent, waiver or ratification given or action taken which would be,
      or
      would have a reasonably likelihood of being, prejudicial to the interests of
      the
      Creditor or which would have the effect of reducing the value of the Collateral
      as security for the Obligations or imposing any restriction on the
      transferability of any of the Collateral. Unless an Event of Default has
      occurred and is continuing the Creditor shall, from time to time at the request
      and expense of the Debtor, execute or cause to be executed, in respect of all
      Pledged Securities that are registered in the name of the Creditor or its
      nominee, valid proxies appointing the Debtor as its (or its nominee’s) proxy to
      attend, vote and act for and on behalf of the Creditor or such nominee, as
      the
      case may be, at any and all meetings of the applicable Pledged Issuer’s
      shareholders or debt holders, all Pledged Securities that are registered in
      the
      name of the Creditor or such nominee, as the case may be, and to execute and
      deliver, consent to or approve or disapprove of or withhold consent to any
      resolutions in writing of shareholders or debt holders of the applicable Pledged
      Issuer for and on behalf of the Creditor or such nominee, as the case may be.
      Immediately upon the occurrence and during the continuance of any Event of
      Default, all such rights of the Debtor to vote and give consents, waivers and
      ratifications will cease and the Creditor or its nominee will be entitled to
      exercise all such voting rights and to give all such consents, waivers and
      ratifications.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    9. Dividends;
      Interest.
      Unless
      an Event of Default has occurred and is continuing, the Debtor will be entitled
      to receive any and all cash dividends, interest, principal payments and other
      forms of cash distribution on the Pledged Securities or Pledge Security
      Entitlements which it is otherwise entitled to receive, but any and all stock
      and/or liquidating dividends, distributions of property, returns of capital
      or
      other distributions made on or in respect of the Pledged Securities or Pledged
      Security Entitlements, whether resulting from a subdivision, combination or
      reclassification of the outstanding capital stock of any Pledged Issuer or
      received in exchange for the Pledged Securities, Pledged Security Entitlements
      or any part thereof or as a result of any amalgamation, merger, consolidation,
      acquisition or other exchange of property to which any Pledged Issuer may be
      a
      party or otherwise, and any and all cash and other property received in exchange
      for any Pledged Securities or Pledged Security Entitlements will be and become
      part of the Collateral subject to the Security Interest and, if received by
      the
      Debtor, will forthwith be delivered to the Creditor or its nominee (accompanied,
      if appropriate, by proper instruments of assignment and/or stock powers of
      attorney executed by the Debtor in accordance with the Creditor’s instructions)
      to be held subject to the terms of this Agreement; and if any of the Pledged
      Security Certificates have been registered in the name of the Creditor or its
      nominee, the Creditor will execute and deliver (or cause to be executed and
      delivered) to the Debtor all such dividend orders and other instruments as
      the
      Debtor may request for the purpose of enabling the Debtor to receive the
      dividends or other payments which the Debtor is authorized to receive and retain
      pursuant to this Section. If an Event of Default has occurred and is continuing,
      all rights of the Debtor pursuant to this Section will cease and the
      Creditor will have the sole and exclusive right and authority to receive and
      retain the cash dividends, interest, principal payments and other forms of
      cash
      distribution which the Debtor would otherwise be authorized to retain pursuant
      to this Section. Any money and other property paid over to or received by the
      Creditor pursuant to the provisions of this Section will be retained by the
      Creditor as additional Collateral hereunder and be applied in accordance with
      the provisions of this Agreement.

     

    10. Rights
      on Event of Default.
      If an
      Event of Default has occurred and is continuing, then and in every such case
      all
      of the Obligations shall, at the option of the Creditor, become immediately
      due
      and payable and the Security Interests shall become enforceable and the
      Creditor, in addition to any rights now or hereafter existing under applicable
      law may, personally or by agent, at such time or times as the Creditor in its
      discretion may determine, do any one or more of the following:

     

    
      	 	
              (i)

            	
              Rights
                under PPSA, etc.
                Exercise all of the rights and remedies granted to secured parties
                under
                the PPSA and any other applicable statute, or otherwise available
                to the
                Creditor by contract, at law or in
                equity.

            

    

     

    
      	 	
              (ii)

            	
              Demand
                Possession.
                Demand possession of any or all of the Collateral, in which event
                the
                Debtor will, at the expense of the Debtor, immediately cause the
                Collateral designated by the Creditor to be assembled and made available
                and/or delivered to the Creditor at any place designated by the
                Creditor.

            

    

     

    
      	 	
              (iii)

            	
              Take
                Possession.
                Enter on any premises where any Collateral is located and take possession
                of, disable or remove such
                Collateral.

            

    

     

    
      	 	
              (iv)

            	
              Deal
                with Collateral.
                Hold, store and keep idle, or operate, lease or otherwise use or
                permit
                the use of, any or all of the Collateral for such time and on such
                terms
                as the Creditor may determine, and demand, collect and retain all
                earnings
                and other sums due or to become due from any Person in respect of
                any of
                the Collateral.

            

    

     

    
      	 	
              (v)

            	
              Carry
                on Business.
                Carry on, or concur in the carrying on of, any or all of the business
                or
                undertaking of the Debtor and enter on, occupy and use (without charge
                by
                the Debtor) any of the premises, buildings, plant and undertaking
                of, or
                occupied or used by, the Debtor.

            

    

     

    
      	 	
              (vi)

            	
              Enforce
                Collateral.
                Seize, collect, receive, enforce or otherwise deal with any Collateral
                in
                such manner, on such terms and conditions and at such times as the
                Creditor deems advisable.

            

    

     

    
      	 	
              (vii)

            	
              Dispose
                of Collateral.
                Realize on any or all of the Collateral and sell, lease, assign,
                give
                options to purchase, or otherwise dispose of and deliver any or all
                of the
                Collateral (or contract to do any of the above), in one or more parcels
                at
                any public or private sale, at any exchange, broker’s board or office of
                the Creditor or elsewhere, with or without advertising or other formality,
                except as required by applicable law, on such terms and conditions
                as the
                Creditor may deem advisable and at such prices as it may deem best,
                for
                cash or on credit or for future
                delivery.

            

    

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (viii)

            	
              Court-Approved
                Disposition of Collateral.
                Obtain from any court of competent jurisdiction an order for the
                sale or
                foreclosure of any or all of the
                Collateral.

            

    

     

    
      	 	
              (ix)

            	
              Purchase
                by Creditor.
                At any public sale, and to the extent permitted by law on any private
                sale, bid for and purchase any or all of the Collateral offered for
                sale
                and, upon compliance with the terms of such sale, hold, retain, sell
                or
                otherwise dispose of such Collateral without any further accountability
                to
                the Debtor or any other Person with respect to such holding, retention,
                sale or other disposition, except as required by law. In any such
                sale to
                the Creditor, the Creditor may, for the purpose of making payment
                for all
                or any part of the Collateral so purchased, use any claim for any
                or all
                of the Obligations then due and payable to it as a credit against
                the
                purchase price.

            

    

     

    
      	 	
              (x)

            	
              Collect
                Accounts.
                Notify the account debtors under any Accounts of the Debtor of the
                assignment of such Accounts to the Creditor and direct such account
                debtors to make payment of all amounts due or to become due to the
                Debtor
                in respect of such Accounts directly to the Creditor and, upon such
                notification and at the expense of the Debtor, enforce collection
                of any
                such Accounts, and adjust, settle or compromise the amount or payment
                of
                such Accounts, in such manner and to such extent as the Creditor
                deems
                appropriate in the circumstances.

            

    

     

    
      	 	
              (xi)

            	
              Transfer
                of Collateral.
                Transfer any Collateral that is Investment Property into the name
                of the
                Creditor or its nominee.

            

    

     

    
      	 	
              (xii)

            	
              Voting.
                Vote any or all of the Pledged Securities (whether or not transferred
                to
                the Creditor or its nominee) and Pledged Security Entitlements and
                give or
                withhold all consents, waivers and ratifications in respect thereof
                and
                otherwise act with respect thereto as though it were the outright
                owner
                thereof.

            

    

     

    
      	 	
              (xiii)

            	
              Exercise
                Other Rights.
                Exercise any and all rights, privileges, entitlements and options
                pertaining to any Collateral that is Investment Property as if the
                Creditor were the absolute owner of such Investment
                Property.

            

    

     

    
      	 	
              (xiv)

            	
              Dealing
                with Contracts and Permits.
                Deal with any and all Contracts and Permits to the same extent as
                the
                Debtor might (including the enforcement, realization, sale, assignment
                ,
                transfer, and requirement for continued performance), all on such
                terms
                and conditions and at such time or times as may seem advisable to
                the
                Creditor.

            

    

     

    
      	 	
              (xv)

            	
              Payment
                of Obligations.
                Pay any liability secured by any Lien against any Collateral. The
                Debtor
                will immediately on demand reimburse the Creditor for all such payments
                and, until paid, any such reimbursement obligation shall form part
                of the
                Obligations and shall be secured by the Security
                Interests.

            

    

     

    
      	 	
              (xvi)

            	
              Borrow
                and Grant Security Interests.
                Borrow money for the maintenance, preservation or protection of any
                Collateral or for carrying on any of the business or undertaking
                of the
                Debtor and grant Liens on any Collateral (in priority to the Security
                Interests or otherwise) as security for the money so borrowed. The
                Debtor
                will immediately on demand reimburse the Creditor for all such borrowings
                and, until paid, any such reimbursement obligations shall form part
                of the
                Obligations and shall be secured by the Security
                Interests.

            

    

     

    
      	 	
              (xvii)

            	
              Appoint
                Receiver.
                Appoint by instrument in writing one or more Receivers of the Debtor
                or
                any or all of the Collateral with such rights, powers and authority
                (including any or all of the rights, powers and authority of the
                Creditor
                under this Agreement) as may be provided for in the instrument of
                appointment or any supplemental instrument, and remove and replace
                any
                such Receiver from time to time. To the extent permitted by applicable
                law, any Receiver appointed by the Creditor will (for purposes relating
                to
                responsibility for the Receiver’s acts or omissions) be considered to be
                the agent of the Debtor and not of the
                Creditor.

            

    

     

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    
      	 	
              (xviii)

            	
              Court-Appointed
                Receiver.
                Obtain from any court of competent jurisdiction an order for the
                appointment of a Receiver of the Debtor or of any or all of the
                Collateral.

            

    

     

    
      	 	
              (xix)

            	
              Consultants.
                Require the Debtor to engage a consultant of the Creditor’s choice, or
                engage a consultant on its own behalf, such consultant to receive
                the full
                cooperation and support of the Debtor and its agents and employees,
                including unrestricted access to the premises of the Debtor and the
                Books
                and Records; all reasonable fees and expenses of such consultant
                shall be
                for the account of the Debtor and the Debtor hereby authorizes any
                such
                consultant to report directly to the Creditor and to disclose to
                the
                Creditor any and all information obtained in the course of such
                consultant’s employment.

            

    

     

    The
      Creditor may exercise any or all of the foregoing rights and remedies without
      demand of performance or other demand, presentment, protest, advertisement
      or
      notice of any kind (except as required by applicable law) to or on the Debtor
      or
      any other Person, and the Debtor hereby waives each such demand, presentment,
      protest, advertisement and notice to the extent permitted by applicable law.
      None of the above rights or remedies will be exclusive of or dependent on or
      merge in any other right or remedy, and one or more of such rights and remedies
      may be exercised independently or in combination from time to time. The Debtor
      acknowledges and agrees that any action taken by the Creditor hereunder
      following the occurrence and during the continuance of an Event of Default
      shall
      not be rendered invalid or ineffective as a result of the curing of the Event
      of
      Default on which such action was based.

     

    11. Realization
      Standards.
      To the
      extent that applicable law imposes duties on the Creditor to exercise remedies
      in a commercially reasonable manner and without prejudice to the ability of
      the
      Creditor to dispose of the Collateral in any such manner, the Debtor
      acknowledges and agrees that it is not commercially unreasonable for the
      Creditor (a) to incur expenses reasonably deemed significant by the Creditor
      to
      prepare the Collateral for disposition or otherwise to complete raw material
      or
      work in process into finished goods or other finished products for disposition,
      (b) to fail to obtain third party consents for access to the Collateral to
      be
      disposed of, (c) to fail to exercise collection remedies against account debtors
      or other Persons obligated on the Collateral or to remove Liens against the
      Collateral, (d) to exercise collection remedies against account debtors and
      other Persons obligated on the Collateral directly or through the use of
      collection agencies and other collection specialists, (e) to dispose of
      Collateral by way of public auction, public tender or private contract, with
      or
      without advertising and without any other formality, (f) to contact other
      Persons, whether or not in the same business of the Debtor, for expressions
      of
      interest in acquiring all or any portion of the Collateral, (g) to hire one
      or
      more professional auctioneers to assist in the disposition of the Collateral,
      whether or not the Collateral is of a specialized nature or an upset or reserve
      bid or price is established, (h) to dispose of the Collateral by utilizing
      internet sites that provide for the auction of assets of the types included
      in
      the Collateral or that have the reasonable capacity of doing so, or that match
      buyers and sellers of assets, (i) to dispose of assets in wholesale rather
      than
      retail markets, (j) to disclaim disposition warranties, such as title,
      possession or quiet enjoyment, (k) to purchase insurance or credit enhancements
      to insure the Creditor against risks of loss, collection or disposition of
      the
      Collateral or to provide to the Creditor a guaranteed return from the collection
      or disposition of the Collateral, (l) to the extent deemed appropriate by the
      Creditor, to obtain the services of other brokers, investment bankers,
      consultants and other professionals to assist the Creditor in the collection
      or
      disposition of any of the Collateral, (m) to dispose of Collateral in whole
      or
      in part, and (n) to dispose of Collateral to a customer of the Creditor, and
      (o)
      to establish an upset or reserve bid price in respect of
      Collateral.

     

    12. Grant
      of Licence.
      For the
      purpose of enabling the Creditor to exercise its rights and remedies under
      this
      Agreement when the Creditor is entitled to exercise such rights and remedies,
      and for no other purpose, the Debtor grants to the Creditor an irrevocable,
      non-exclusive licence (exercisable without payment of royalty or other
      compensation to the Debtor) to use, assign or sublicense any or all of the
      Intellectual Property Rights, including in such licence reasonable access to
      all
      media in which any of the licensed items may be recorded or stored and to all
      computer programs used for the compilation or printout of the same. For any
      trademarks, service marks and other business indicia, such licence includes
      an
      obligation on the part of the Creditor to maintain the standards of quality
      maintained by the Debtor or, in the case of trademarks, service marks or other
      business indicia licensed to the Debtor, the standards of quality imposed upon
      the Debtor by the relevant licence. For copyright works, such licence shall
      include the benefit of any waivers of moral rights and similar
      rights.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    13. Securities
      Laws.
      The
      Creditor is authorized, in connection with any offer or sale of any Pledged
      Securities or Pledged Security Entitlements, to comply with any limitation
      or
      restriction as it may be advised by counsel is necessary to comply with
      applicable law, including compliance with procedures that may restrict the
      number of prospective bidders and purchasers, requiring that prospective bidders
      and purchasers have certain qualifications, and restricting prospective bidders
      and purchasers to Persons who will represent and agree that they are purchasing
      for their own account or investment and not with a view to the distribution
      or
      resale of such Securities. The Debtor further agrees that compliance with any
      such limitation or restriction will not result in a sale being considered or
      deemed not to have been made in a commercially reasonable manner, and the
      Creditor will not be liable or accountable to the Debtor for any discount
      allowed by reason of the fact that such Pledged Securities or Pledged Security
      Entitlements are sold in compliance with any such limitation or restriction.
      If
      the Creditor chooses to exercise its right to sell any or all Pledged Securities
      or Pledged Security Entitlements, upon written request, the Debtor will cause
      each applicable Pledged Issuer to furnish to the Creditor all such information
      as the Creditor may request in order to determine the number of shares and
      other
      instruments included in the Collateral which may be sold by the Creditor in
      exempt transactions under any laws governing securities, and the rules and
      regulations of any applicable securities regulatory thereunder, as the same
      are
      from time to time in effect.

     

    14. ULC
      Shares.
      The
      Debtor acknowledges that certain of the Collateral may now or in the future
      consist of ULC Shares, and that it is the intention of Creditor and the Debtor
      that the Creditor should not under any circumstances prior to realization be
      held to be a “member” or a “shareholder”, as applicable, of a ULC for the
      purposes of any ULC Laws. Therefore, notwithstanding any provisions to the
      contrary contained in this Agreement, the Credit Agreement or any other Loan
      Document, where the Debtor is the registered and beneficial owner of ULC Shares
      which are Collateral, the Debtor will remain the sole registered and beneficial
      owner of such ULC Shares until such time as such ULC Shares are effectively
      transferred into the name of the Creditor or any other Person on the books
      and
      records of the applicable ULC. Accordingly, the Debtor shall be entitled to
      receive and retain for its own account any dividend on or other distribution,
      if
      any, in respect of such ULC Shares (except for any dividend or distribution
      comprised of Pledged Security Certificates, which shall be delivered to the
      Creditor to hold hereunder) and shall have the right to vote such ULC Shares
      and
      to control the direction, management and policies of the applicable ULC to
      the
      same extent as the Debtor would if such ULC Shares were not pledged to the
      Creditor pursuant hereto. Nothing in this Agreement, the Credit Agreement or
      any
      other Loan Document is intended to, and nothing in this Agreement, the Credit
      Agreement or any other Loan Document shall, constitute the Creditor or any
      Person other than the Debtor, a member or shareholder of a ULC for the purposes
      of any ULC Laws (whether listed or unlisted, registered or beneficial), until
      such time as notice is given to the Debtor and further steps are taken pursuant
      hereto or thereto so as to register the Creditor or such other Person, as
      specified in such notice, as the holder of the ULC Shares. To the extent any
      provision hereof would have the effect
      of
      constituting the Creditor as a member or a shareholder, as applicable, of any
      ULC prior to such time, such provision shall be severed herefrom and shall
      be
      ineffective with respect to ULC Shares which are Collateral without otherwise
      invalidating or rendering unenforceable this Agreement or invalidating or
      rendering unenforceable such provision insofar as it relates to Collateral
      which
      is not ULC Shares.
      Except
      upon the exercise of rights of the Creditor to sell, transfer or
      otherwise dispose of ULC Shares  in accordance with
      this Agreement, the Debtor shall not cause or permit, or enable a Pledged
      Issuer that is a ULC to cause or permit, the Creditor to: (a) be
      registered as a shareholder or member of such Pledged Issuer; (b) have any
      notation entered in their favour in the share register of such Pledged Issuer;
      (c) be held out as shareholders or members of such Pledged Issuer; (d) receive,
      directly or indirectly, any dividends, property or other distributions from
      such
      Pledged Issuer by reason of the Creditor holding the Security Interests over
      the
      ULC Shares; or (e) act as a shareholder of such Pledged Issuer, or exercise
      any
      rights of a shareholder including the right to attend a meeting of shareholders
      of such Pledged Issuer or to vote its ULC  Shares.

     

    15. Application
      of Proceeds.
      All
      Proceeds of Collateral received by the Creditor or a Receiver may be applied
      to
      discharge or satisfy any expenses (including the Receiver’s remuneration and
      other expenses of enforcing the Creditor’s rights under this Agreement), Liens
      on the Collateral in favour of Persons other than the Creditor, borrowings,
      taxes and other outgoings affecting the Collateral or which are considered
      advisable by the Creditor or the Receiver to protect, preserve, repair, process,
      maintain or enhance the Collateral or prepare it for sale, lease or other
      disposition, or to keep in good standing any Liens on the Collateral ranking
      in
      priority to any of the Security Interests, or to sell, lease or otherwise
      dispose of the Collateral. The balance of such Proceeds may, at the sole
      discretion of the Creditor, be held as collateral security for the Obligations
      or be applied to such of the Obligations (whether or not the same are due and
      payable) in such manner and at such times as the Creditor considers appropriate
      and thereafter will be accounted for as required by law.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    16. Continuing
      Liability of Debtor.
      The
      Debtor will remain liable for any Obligations that are outstanding following
      realization of all or any part of the Collateral and the application of the
      Proceeds thereof. 

     

    17. Creditor’s
      Appointment as Attorney-in-Fact.
      Upon
      the occurrence and during the continuance of an Event of Default, the Debtor
      constitutes and appoints the Creditor and any officer or agent of the Creditor,
      with full power of substitution, as the Debtor’s true and lawful
      attorney-in-fact with full power and authority in the place of the Debtor and
      in
      the name of the Debtor or in its own name, from time to time in the Creditor’s
      discretion to take any and all appropriate action and to execute any and all
      documents and instruments as, in the opinion of such attorney acting reasonably,
      may be necessary or desirable to accomplish the purposes of this Agreement.
      Without limiting the effect of this Section, the Debtor grants the Creditor
      an
      irrevocable proxy to vote the Pledged Securities and Pledged Security
      Entitlements and to exercise all other rights, powers, privileges and remedies
      to which a holder thereof would be entitled (including giving or withholding
      written consents of shareholders, calling special meetings of shareholders
      and
      voting at such meetings), which proxy shall be effective, automatically and
      without the necessity of any action (including any transfer of any Pledged
      Securities or Pledged Security Entitlements on the books and records of a
      Pledged Issuer or Pledged Securities Intermediary, as applicable, upon the
      occurrence of an Event of Default. These powers are coupled with an interest
      and
      are irrevocable until the Release Date. Nothing in this Section affects the
      right of the Creditor as secured party or any other Person on the Creditor’s
      behalf, to sign and file or deliver (as applicable) all such financing
      statements, financing change statements, notices, verification agreements and
      other documents relating to the Collateral and this Agreement as the Creditor
      or
      such other Person considers appropriate. The Debtor hereby ratifies and
      confirms, and agrees to ratify and confirm, whatever lawful acts the Creditor
      or
      any of the Creditor’s sub-agents, nominees or attorneys do or purport to do in
      exercise of the power of attorney granted to the Creditor pursuant to this
      Section.

     

    18. Performance
      by Creditor of Debtor’s Obligations.
      If the
      Debtor fails to perform or comply with any of the obligations of the Debtor
      under this Agreement, the Creditor may, but need not, perform or otherwise
      cause
      the performance or compliance of such obligation, provided that such performance
      or compliance will not constitute a waiver, remedy or satisfaction of such
      failure. The expenses of the Creditor incurred in connection with any such
      performance or compliance will be payable by the Debtor to the Creditor
      immediately on demand, and until paid, any such expenses will form part of
      the
      Obligations and will be secured by the Security Interests.

     

    19. Interest.
      If any
      amount payable by the Debtor to the Creditor under this Agreement is not paid
      when due, the Debtor will pay to the Creditor, immediately on demand, interest
      on such amount from the date due until paid, at the rate of interest applicable
      at such time pursuant to the Credit Agreement. All amounts payable by the Debtor
      to the Creditor under this Agreement, and all interest on all such amounts,
      compounded monthly on the last Business Day of each month, will form part of
      the
      Obligations and will be secured by the Security Interests.

     

    20. Severability.
      Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction will, as to that jurisdiction, be ineffective to the extent of
      such
      prohibition or unenforceability and will be severed from the balance of this
      Agreement, all without affecting the remaining provisions of this Agreement
      or
      affecting the validity or enforceability of such provision in any other
      jurisdiction.

     

    21. Rights
      of Creditor; Limitations on Creditor’s Obligations.

     

    
      	 	
              (i)

            	
              Limitations
                on Creditor’s Liability.
                The Creditor will not be liable to the Debtor or any other Person
                for any
                failure or delay in exercising any of the rights of the Debtor under
                this
                Agreement (including any failure to take possession of, collect,
                sell,
                lease or otherwise dispose of any Collateral, or to preserve rights
                against prior parties). Neither the Creditor, a Receiver nor any
                agent of
                the Creditor (including, in Alberta or British Columbia, any
                sheriff) is required to take, or will have any liability for any
                failure to take or delay in taking, any steps necessary or advisable
                to
                preserve rights against other Persons under any Collateral in its
                possession. Neither the Creditor, any Receiver nor any agent of the
                Creditor will be liable for any, and the Debtor will bear the full
                risk of
                all, loss or damage to any and all of the Collateral (including any
                Collateral in the possession of the Creditor, any Receiver or any
                agent of
                the Creditor) caused for any reason other than the gross negligence
                or
                wilful misconduct of the Creditor, such Receiver or such agent of
                the
                Creditor.

            

    

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              Debtor
                Remains Liable under Accounts and Contracts.
                Notwithstanding any provision of this Agreement, the Debtor will
                remain
                liable under each of the documents giving rise to the Accounts of
                the
                Debtor and under each of the Contracts to observe and perform all
                the
                conditions and obligations to be observed and performed by the Debtor
                thereunder, all in accordance with the terms of each such document
                and
                Contract. The Creditor will have no obligation or liability under
                any
                Account of the Debtor (or any document giving rise thereto) or Contract
                by
                reason of or arising out of this Agreement or the receipt by the
                Creditor
                of any payment relating to such Account or Contract pursuant hereto,
                and
                in particular (but without limitation), the Creditor will not be
                obligated
                in any manner to perform any of the obligations of the Debtor under
                or
                pursuant to any Account (or any document giving rise thereto) or
                under or
                pursuant to any Contract to make any payment, to make any inquiry
                as to
                the nature or the sufficiency of any payment received by it or as
                to the
                sufficiency of any performance by any party under any Account (or
                any
                document giving rise thereto) or under any Contract, to present or
                file
                any claim, to take any action to enforce any performance or to collect
                the
                payment of any amounts which may have been assigned to it or to which
                it
                may be entitled at any time.

            

    

     

    
      	 	
              (iii)

            	
              Collections
                on Accounts and Contracts.
                The Creditor hereby authorizes the Debtor to collect its Accounts
                and
                payments under the Contracts in the normal course of the business
                of the
                Debtor and for the purpose of carrying on the same. If required by
                the
                Creditor at any time, any payments of Accounts or under Contracts,
                when
                collected by the Debtor, will be forthwith (and, in any event, within
                two
                Business Days) deposited by the Debtor in the exact form received,
                duly
                endorsed by the Debtor to the Creditor if required, in a special
                collateral account maintained by the Creditor, and until so deposited,
                will be held by the Debtor in trust for the Creditor, segregated
                from the
                other funds of the Debtor. All such amounts while held by the Creditor
                (or
                by the Debtor in trust for the Creditor) and all income in respect
                thereof
                will continue to be collateral security for the Obligations and will
                not
                constitute payment thereof until applied as hereinafter provided.
                If an
                Event of Default has occurred and is continuing, the Creditor may
                apply
                all or any part of the amounts on deposit in such special collateral
                account on account of the Obligations in such order as the Creditor
                may
                elect. 
                At
                the Creditor’s request, the Debtor will deliver to the Creditor any
                documents evidencing and relating to the agreements and transactions
                which
                gave rise to its Accounts and the Contracts, including all original
                orders, invoices and shipping
                receipts.

            

    

     

    
      	 	
              (iv)

            	
              Analysis
                of Accounts.
                At any time and from time to time, the Creditor will have the right
                to
                analyze and verify the Accounts of the Debtor in any manner and through
                any medium that it reasonably considers advisable, and the Debtor
                will
                furnish all such assistance and information as the Creditor may require
                in
                connection therewith. If an Event of Default has occurred and is
                continuing, the Creditor may in its own name or in the name of others
                (including the Debtor) communicate with account debtors on the Accounts
                of
                the Debtor and parties to the Contracts to verify with them to its
                satisfaction the existence, status, amount and terms of any Account
                or any
                Contract. At any time and from time to time, upon the Creditor’s
                reasonable request and at the expense of the Debtor, the Debtor will
                furnish to the Creditor reports showing reconciliations, aging and
                test
                verifications of, and trial balances for, its
                Accounts.

            

    

     

    
      	 	
              (v)

            	
              Use
                of Agents.
                The Creditor may perform any of its rights or duties under this Agreement
                by or through agents and is entitled to retain counsel and to act
                in
                reliance on the advice of such counsel concerning all matters pertaining
                to its rights and duties under this
                Agreement.

            

    

     

    22. Dealings
      by Creditor.
      The
      Creditor will not be obliged to exhaust its recourse against the Debtor or
      any
      other Person or against any other security it may hold in respect of the
      Obligations before realizing upon or otherwise dealing with the Collateral
      in
      such manner as the Creditor may consider desirable. The Creditor may grant
      extensions of time and other indulgences, take and give up security, accept
      compositions, grant releases and discharges and otherwise deal with the Debtor
      and any other Person, and with any or all of the Collateral, and with other
      security and sureties, as the Creditor may see fit, all without prejudice to
      the
      Obligations or to the rights and remedies of the Creditor under this Agreement.
      The powers conferred on the Creditor under this Agreement are solely to protect
      the interests of the Creditor in the Collateral and will not impose any duty
      upon the Creditor to exercise any such powers.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    23. Communication.
      Any
      notice or other communication required or permitted to be given under this
      Agreement will be in writing and will be effectively given if (i) delivered
      personally, (ii) sent by prepaid courier service or mail, or (iii) sent prepaid
      by facsimile transmission or other similar means of electronic communication,
      in
      each case to the address or facsimile number of the Debtor or Creditor set
      out
      in this Agreement. Any communication so given will be deemed to have been given
      and to have been received on the day of delivery if so delivered, or on the
      day
      of facsimile transmission or sending by other means of recorded electronic
      communication provided that such day is a Business Day and the communication
      is
      so delivered or sent prior to 4:30 p.m. (local time at the place of receipt).
      Otherwise, such communication will be deemed to have been given and to have
      been
      received on the following Business Day. Any communication sent by mail will
      be
      deemed to have been given and to have been received on the fifth Business Day
      following mailing, provided that no disruption of postal service is in effect.
      The Debtor and the Creditor may from time to time change their respective
      addresses or facsimile numbers for notice by giving notice to the other in
      accordance with the provisions of this Section.

     

    24. Release
      of Information.
      The
      Debtor authorizes the Creditor to provide a copy of this Agreement and such
      other information as may be requested of the Creditor to the extent necessary
      to
      enforce the Creditor’s rights, remedies and entitlements under this
      Agreement.

     

    25. Release
      of Debtor.
      Neither
      the taking of any judgment nor the exercise of any power of seizure or sale
      shall extinguish the liability of the Debtor to pay the Obligations, nor shall
      the same operate as a merger of any covenant contained in this Agreement or
      of
      any other liability, nor shall the acceptance of any payment or other security
      constitute or create any novation. Upon the written request of the Debtor given
      at any time on or after the Release Date, the Creditor shall release the Debtor
      and the Collateral from the Security Interests and such release shall serve
      to
      terminate any licence granted in this Agreement. Upon such release, and at
      the
      request and expense of the Debtor, the Creditor shall execute and deliver to
      the
      Debtor such releases and discharges as the Debtor may reasonably
      request.

     

    26. Additional
      Security.
      This
      Agreement is in addition to, and not in substitution of, any and all other
      security previously or concurrently delivered by the Debtor or any other Person
      to the Creditor, all of which other security shall remain in full force and
      effect.

     

    27. Alteration
      or Waiver.
      None of
      the terms or provisions of this Agreement may be waived, amended, supplemented
      or otherwise modified except by a written instrument executed by the Creditor.
      The Creditor will not, by any act or delay, be deemed to have waived any right
      or remedy hereunder or to have acquiesced in any Event of Default or in any
      breach of any of the terms and conditions hereof. No failure to exercise, nor
      any delay in exercising, on the part of the Creditor, any right, power or
      privilege hereunder shall operate as a waiver thereof. No single or partial
      exercise of any right, power or privilege hereunder will preclude any other
      or
      further exercise thereof or the exercise of any other right, power or privilege.
      A waiver by the Creditor of any right or remedy hereunder on any one occasion
      will not be construed as a bar to any right or remedy which the Creditor would
      otherwise have on any future occasion. Neither the taking of any judgement
      nor
      the exercise of any power of seizure or sale will extinguish the liability
      of
      the Debtor to pay the Obligations, nor will the same operate as a merger of
      any
      covenant contained in this Agreement or of any other liability, nor will the
      acceptance of any payment or other security constitute or create any
      novation.

     

    28. Amalgamation.
      If the
      Debtor is a corporation, the Debtor acknowledges that if it amalgamates with
      any
      other corporation or corporations, then (i) the Collateral and the Security
      Interests will extend to and include all the property and assets of the
      amalgamated corporation and to any property or assets of the amalgamated
      corporation thereafter owned or acquired, (ii) the term “Debtor”, where used in
      this Agreement, will extend to and include the amalgamated corporation, and
      (iii) the term “Obligations”, where used in this Agreement, will extend to and
      include the Obligations of the amalgamated corporation.

     

    29. Governing
      Law; Attornment.
      This
      Agreement will be governed by and construed in accordance with the laws of
      the
      Province of Ontario. Without prejudice to the ability of the Creditor to enforce
      this Agreement in any other proper jurisdiction, the Debtor irrevocably submits
      and attorns to the non-exclusive jurisdiction of the courts of such province.
      To
      the extent permitted by applicable law, the Debtor irrevocably waives any
      objection (including any claim of inconvenient forum) that it may now or
      hereafter have to the venue of any legal proceeding arising out of or relating
      to this Agreement in the courts of such province.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    30. Interpretation.
      Unless
      otherwise expressly provided in this Agreement, if any matter in this Agreement
      is subject to the consent or approval of the Creditor or is to be acceptable
      to
      the Creditor, such consent, approval or determination of acceptability will
      be
      in the sole discretion of the Creditor. If any provision in this Agreement
      refers to any action taken or to be taken by the Debtor, or which the Debtor
      is
      prohibited from taking, such provision will be interpreted to include any and
      all means, direct or indirect, of taking, or not taking, such action. The
      division of this Agreement into sections and paragraphs, and the insertion
      of
      headings, is for convenience of reference only and will not affect the
      construction or interpretation of this Agreement. Unless the context otherwise
      requires, words importing the singular include the plural and vice versa, and
      words importing gender include all genders. When used in this Agreement, the
      word “including”
(or
      “includes”)
      means
      including (or includes) without limitation. Any reference in this Agreement
      to a
“Section” means the relevant Section of this Agreement. If more than one Debtor
      executes this Agreement, their obligations under this Agreement are joint and
      several. A reference in this agreement to another agreement refers to that
      other
      agreement as it may be amended, modified, supplemented, restated or replaced
      from time to time. A reference in this agreement to a statute refers to that
      statute as it may be amended and to any restated or successor legislation of
      comparable effect.

     

    31. Successors
      and Assigns.
      This
      Agreement will enure to the benefit of, and be binding on, the Debtor and its
      successors and permitted assigns, and will enure to the benefit of, and be
      binding on, the Creditor and its successors and assigns. The Debtor may not
      assign this Agreement, or any of its rights or obligations under this Agreement.
      If the Debtor or the Creditor is an individual, then the term “Debtor” or
“Creditor”, as applicable, will also include his or her heirs, administrators
      and executors.

     

    32. Acknowledgment
      of Receipt/Waiver.
      The
      Debtor acknowledges receipt of an executed copy of this Agreement and, to the
      extent permitted by applicable law, waives the right to receive a copy of any
      financing statement or financing change statement registered in connection
      with
      this Agreement or any verification statement issued in respect of any such
      financing statement or financing change statement.

     

    33. Electronic
      Signature.
      Delivery of an executed signature page to this Agreement by the Debtor by
      facsimile or other electronic form of transmission shall be as effective as
      delivery by the Debtor of a manually executed copy of this Agreement by the
      Debtor.

     

    [signatures
      on the next following page]

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    Dated:
      as
      of the date first set out above

     

    
      	 	
              INTERNATIONAL
                CONDUITS LTD.

               

            
	
              Address:

            	
              209
                Brunel Road

            	 	
              By:

            	 
	 	
              Mississauga,
                Ontario

            	 	
              Name:

            
	 	
              L4Z
                1X3

            	 	
              Title:

            
	 	 	 	 
	
              Attention:

            	
              Steven
                G. Kempf, President

            	 	 
	
              Facsimile:

            	
              905-501-9904

            	 	 

    

    

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    DEBTOR
      INFORMATION

     

    Full
      legal name:

     

    Jurisdiction
      of incorporation or organization:

     

    Address
      of chief executive office:

     

    Addresses
      of all places where business is carried on or tangible Personal Property is
      kept:

     

    Jurisdictions
      in which all material account debtors are located:

     

    Addresses
      of all owned real property:

     

    Addresses
      of all leased real property:

     

    Subsidiaries
      of the Debtor:

     

    Instruments,
      Documents of Title and Chattel Paper of the Debtor:

     

    Pledged
      Certificated Securities:

     

    
      	
              Pledged
                Issuer

            	 	
              Securities
                Owned

            	
               

            	
              %
                of issued and outstanding Securities of Pledged
                Issuer

            	
               

            	
              Security
                Certificate Numbers

            	
              Security
                Certificate Location

            
	 	 	 	 	 	 	 	 
	
            	 	
            	 	
            	 	
            	
            

    

     

    Pledged
      Securities Accounts:

     

    
      	
              Pledged
                Securities Intermediary

            	
               

            	
              Securities
                Account Number

            	
               

            	
              Pledged
                Securities Intermediary’s Jurisdiction

            	
               

            	
              Pledged
                Security Entitlements

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

    

     

    Pledged
      Uncertificated Securities:

     

    
      	
              Pledged
                Issuer

            	 	
              Pledged
                Issuer’s Jurisdiction

            	 	
              Securities
                Owned

            	 	
              %
                of issued and outstanding Securities of Pledged
                Issuer

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

    

     

    
      Pledged
        Futures Accounts:

       

      
        	
                Pledged
                  Futures Intermediary

              	 	
                Futures
                  Account Number

              	 	
                Pledged
                  Futures Intermediary’s Jurisdiction

              	 	
                Pledged
                  Futures Contracts

              
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

      

       

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

       

          Registered
        trademarks and applications for trademark registrations:

       

      
        	
                Country

              	 	
                Trade-mark

              	 	
                Application
                  No.

              	 	
                Application
                  Date

              	 	
                Registration
                  No.

              	 	
                Registration
                  Date

              	 	
                Licenced
                  to or by Debtor

              
	 	 	 	 	 	 	 	 	 	 	 	 	
                (Y/N)

              
	 	 	 	 	 	 	 	 	 	 	 	 	 

      

       

          Patents
        and
        patent applications:

       

      
        	
                Country

              	 	
                Title

              	 	
                Patent
                  No.

              	 	
                Application
                  Date

              	 	
                Date
                  of Grant

              	 	
                Licenced
                  to or by Debtor

              
	 	 	 	 	 	 	 	 	 	 	
                (Y/N)37

              
	 	 	 	 	 	 	 	 	 	 	 

      

       

          Copyright
        registrations and applications for copyright
        registrations:

       

      
        	
                Country

              	 	
                Work

              	 	
                Application
                  No.

              	 	
                Application
                  Date

              	 	
                Registration
                  No.

              	 	
                Licenced
                  to or by Debtor

              
	 	 	 	 	 	 	 	 	 	 	
                (Y/N)
                  37

              
	 	 	 	 	 	 	 	 	 	 	 

      

       

          Industrial
        designs/registered designs and applications for registered
        designs:

       

      
        	
                Country

              	 	
                Design

              	 	
                Application
                  No.

              	 	
                Application
                  Date

              	 	
                Registration
                  No.

              	 	
                Issue
                  Date

              	 	
                Licenced
                  to or by Debtor

              
	 	 	 	 	 	 	 	 	 	 	 	 	
                (Y/N) 

              
	 	 	 	 	 	 	 	 	 	 	 	 	 

      

      

      
        
          
          

        

        
          -19-Exhibit
      10.5

    

    June
      22,
      2007

     

    CIT
      FINANCIAL LTD.

    207
      Queen’s Quay West

    Toronto,
      Ontario M5J 1A7

     

    GUARANTY

    

    Re: INTERNATIONAL
      CONDUITS LTD
      (the
      "Client")

     

    Reference
      is made to the Credit Agreement, dated as of June 22, 2007 among the Client,
      as
      borrower, the undersigned, as guarantors, and CIT Financial Ltd, as lender
      (“CIT”), and to the other documents or agreements entered into in connection
      with the Credit Agreement (herein collectively the "Agreements") between CIT
      and
      the Client. Each of the undersigned hereby unconditionally guarantees and agrees
      to be liable for the full and indefeasible payment and performance when due
      of
      all now existing and future indebtedness, obligations or liabilities of the
      Client to CIT, howsoever arising, whether direct or indirect, absolute or
      contingent, secured or unsecured, arising under any of the Agreements as now
      written or as amended or supplemented hereafter. Further, each of the
      undersigned agree to pay to CIT on demand the amount of all expenses (including
      reasonable attorney's fees) incurred by CIT in collecting or attempting to
      collect any of the Client's obligations to CIT, whether from the Client, or
      from
      any other obligor, or from the undersigned, or in realizing upon any collateral;
      and agrees to pay any interest at the highest lawful rate on all amounts payable
      to CIT hereunder, even if such amount cannot be collected from the Client.
       (All
      of
      the aforementioned obligations, liabilities, expenses and interest are
      hereinafter collectively called the "Obligations"). To the extent CIT receives
      payment on account of the Obligations guaranteed hereby, which payment is
      thereafter set aside or required to be repaid by CIT in whole or in part, then,
      to the extent of any sum not finally retained by CIT (regardless of whether
      such
      sum is recovered from CIT by the Client, its trustee, or any other party acting
      for, on behalf of or through the Client or its representative), each of the
      undersigned's obligation to CIT under this Guaranty, as amended, modified or
      supplemented, shall remain in full force and effect (or be reinstated) until
      the
      undersigned has made payment to CIT therefor, which payment shall be due upon
      demand.

    

    This
      Guaranty is executed as an inducement to CIT to make loans or advances to the
      Client or otherwise to extend credit or financial accommodations to the Client,
      or to enter into or continue a factoring or financing arrangement with the
      Client, and is executed in consideration of CIT’s doing or having done any of
      the foregoing. Each of the undersigned agrees that any of the foregoing shall
      be
      done or extended by CIT in CIT’s sole discretion, and shall be deemed to have
      been done or extended by CIT in consideration of and in reliance upon the
      execution of this Guaranty, but that nothing herein shall obligate CIT to do
      any
      of the foregoing.

    

    Notice
      of
      acceptance of this Guaranty, the making of loans or advances, or the extension
      of credit to the Client, the purchase or acquisition of receivables from the
      Client, the amendment, execution or termination of any of the Agreements or
      any
      other agreements between CIT and the Client, and presentment, demand, protest,
      notice of protest, notice of non-payment and all other notices to which the
      Client or any of the undersigned may be entitled, and CIT’s reliance on this
      Guaranty are hereby waived. Each of the undersigned also waive notice of changes
      in terms or extensions of time of payment, the taking and releasing of
      collateral or guarantees (including the release of any of undersigned) and
      the
      settlement, compromise or release of any Obligations, and agrees that, as to
      the
      undersigned, the amount of the Obligations shall not be diminished by any of
      the
      foregoing. Each of the undersigned also agree that CIT need not attempt to
      collect any Obligations from the Client or other obligors or to realize upon
      any
      collateral, but may require the undersigned to make immediate payment of
      Obligations to CIT when due or at any time thereafter. CIT shall not be liable
      for failure to collect Obligations or to realize upon any collateral or security
      therefor, or any part thereof, or for any delay in so doing, nor shall CIT
      be
      under any obligation to take any action whatsoever with regard
      thereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     This
      Guaranty is absolute, unconditional and continuing, regardless of the validity,
      regularity or enforceability of any of the Obligations or the fact that a
      security interest or lien in any collateral or security therefor may not be
      enforceable by CIT or may otherwise be subject to equities or defenses or prior
      claims in favor of others or may be invalid or defective in any way and for
      any
      reason, including any action, or failure to act, on CIT’s part. Payment by the
      undersigned shall be made to CIT at CIT’s office from time to time on demand as
      Obligations become due, and one or more successive or concurrent actions may
      be
      brought hereon against any of the undersigned either in the same action in
      which
      the Client is sued or in separate actions. In the event any claim or action,
      or
      action on any judgment, based on this Guaranty, is made or brought against
      any
      of the undersigned, each of the undersigned agrees not to assert against CIT
      any
      setoff or counterclaim which the Client may have, and further each of the
      undersigned agrees not to deduct, setoff, or seek to counterclaim for or recoup,
      any amounts which are or may be owed by CIT to the undersigned, or for any
      loss
      of contribution from any other guarantor. Furthermore, in any litigation based
      on this Guaranty in which any of the undersigned shall be adverse parties,
      each
      of the undersigned hereby waives the right to interpose any defense based upon
      any statute of limitations or any claim of laches and waives the performance
      of
      each and every condition precedent to which the undersigned might otherwise
      be
      entitled by law. Each of the undersigned hereby consents to the in personam
      jurisdiction of the courts of New York. In the event that CIT brings any action
      or suit in any court of record of the state of New York or the Federal
      Government to enforce any or all liabilities of any of the undersigned
      hereunder, service of process may be made on the undersigned by mailing a copy
      of the summons to any of the undersigned at the addresses below set
      forth.

    

    All
      sums
      at any time attributable to the credit of the undersigned and any property
      of
      any of the undersigned on which CIT, or CIT’s affiliate, The CIT
      Group/Commercial Services, Inc., a New York corporation, (“CIT/CMS) at any time
      has a lien or security interest, or of which CIT or CIT/CMS at any time has
      possession, shall secure payment and performance of all Obligations and any
      and
      all other obligations of any of the undersigned to CIT or CIT/CMS however
      arising. Neither of the undersigned shall have any right of subrogation,
      indemnification or recourse to any Obligations or collateral or guarantees
      therefor, or to any assets of the Client.

    

    In
      the
      event of any breach of, default under or termination of any of the Agreements
      between CIT and the Client, or in the event that any of the undersigned shall
      fail to observe or perform any agreements, warranties, or covenants contained
      herein, or should any of the undersigned dissolve or cease its business, call
      a
      meeting of its creditors, fail to meet its debts as they mature, commit an
      act
      of bankruptcy, have commenced by or against any of the undersigned any
      bankruptcy, insolvency, arrangement, reorganization, receivership or similar
      proceeding under any federal or state law, then the liability of both of the
      undersigned for the entire Obligations shall mature even if the liability of
      the
      Client therefor does not.

    

    This
      Guaranty may be terminated as to either of the undersigned only upon actual
      receipt by one of CIT’s officers of at least ninety (90) days prior written
      notice of termination sent by registered or certified mail; provided however,
      that the undersigned so terminating this Guaranty shall remain bound hereunder,
      and this Guaranty shall continue in full force and effect, with respect to
      any
      and all Obligations created or arising prior to the effective date of such
      termination and with respect to any and all extensions, renewals or
      modifications of said pre-existing Obligations. Termination by either of the
      undersigned shall not affect the obligations of the undersigned with respect
      to
      liability for any post termination collection expenses or interest. This is
      a
      continuing Guaranty and written notice as above provided shall be the only
      means
      of termination, notwithstanding the fact that for certain periods of time there
      may be no Obligations owing to CIT by the Client.

     

    CIT’s
      books and records showing the account between CIT and the Client shall be
      admissible in evidence in any action or proceeding as prima facie proof of
      the
      items therein set forth. CIT’s monthly statements rendered to the Client shall
      be binding upon both of the undersigned (whether or not the undersigned received
      copies thereof) and, shall constitute an account stated between CIT and the
      Client, unless CIT shall have received a written statement of the Client's
      exceptions within thirty (30) days after the statement was mailed to the
      Client.

    

    This
      Guaranty embodies the whole agreement of the parties and may not be modified
      except in writing, and no course of dealing between CIT and either or both
      of
      the undersigned shall be effective to change or modify this Guaranty. CIT’s
      failure to exercise any right hereunder shall not be construed as a waiver
      of
      the right to exercise the same or any other right at any other time and from
      time to time thereafter, and such rights shall be considered as cumulative
      rather than alternative. No knowledge of any breach or other nonobservance
      by
      the undersigned of the terms and provisions of this Guaranty shall constitute
      a
      waiver thereof, nor a waiver of any obligations to be performed by the any
      of
      undersigned hereunder.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    

    This
      Guaranty is executed and given in addition to, and not in substitution,
      reduction, replacement or satisfaction of any other endorsements or guarantees
      of the Obligations, now existing or hereafter executed, by either of the
      undersigned, or others in CIT’s favor.

    

    When
      used
      in this Guaranty all pronouns shall, wherever applicable, be deemed to include
      the plural as well as the singular. This Guaranty shall inure to the benefit
      of
      CIT, CIT/CMS and its successors and assigns and any parent, subsidiary or
      affiliate of CIT or CIT/CMS as well as to any concern which CIT may now or
      hereafter factor or finance; shall be binding jointly and severally upon the
      undersigned and upon the respective heirs, executors, administrators, successors
      and assigns of each of the undersigned; and shall pertain to the Client and
      its
      successors and assigns. This Guaranty may be executed in any number of
      counterparts, each of which when so executed shall be deemed an original and
      such counterparts shall, together, constitute but one and the same
      document.

    

    TO
      THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE UNDERSIGNED HEREBY WAIVES
      ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING DIRECTLY OR
      INDIRECTLY OUT OF THIS GUARANTY OR ANY OTHER AGREEMENT OR TRANSACTION BETWEEN
      CIT, CIT/CMS OR TO WHICH ANY OF US ARE PARTIES.

    

    This
      Guaranty shall be governed by and construed in accordance with the laws of
      the
      State of New York.

    

    IN
      WITNESS WHEREOF, each of the undersigned has executed and delivered this
      Guaranty effective as of the date above set forth.

    

      
        	 	
                UNIVERSAL
                  SECURITY INSTRUMENTS, INC

              
	 	 	 
	 	
                By:
                  

              	
                /s/

              

      

    

    
      
        	 	
                Name:

              	 

      

      
        
          	 	
                  Title:

                	 

        

      

      
      

       

      
        	 	Address:	
                7
                  Gwynns Mill Court

                Owings Mills, MD
                  21117

              

      

       

      
        	 	
                
                  USI
                    ELECTRIC INC.

                

              
	 	 	 
	 	
                By:
                  

              	
                /s/

              

      

      
        
          	 	
                  Name:

                	 

        

        
          
            	 	
                    Title:

                  	 

          

        

        
        

         

        
          	 	Address:	
                  7
                    Gwynns Mill Court

                  Owings Mills, MD
                    21117

                

        

      

    

     

    
      
        
        

      

      
        -3-

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