Document:

Unassociated Document

Exhibit 10.3

 

 

 

GENERAL  SECURITY  AGREEMENT   This  General  Security  Agreement  is  made  as  of  September  26,  2017.  TO:    BROOKFIELD  BRP  HOLDINGS  (CANADA)  INC.,  as  Secured  Party RECITALS:  A.  Powin  Energy  Ontario  Storage  II,  LP,  as  borrower  (the  "Debtor")  and  Brookfield  BRP Holdings  (Canada)  Inc.,  as  lender,  are  party  to  a  term  loan  agreement  dated  as  of  the  date  hereof (as  may  be  amended,  supplemented,  restated  or  replaced  from  time  to  time,  the  "Loan Agreement").   B. Powin  Energy  Storage  2,  Inc.is  the  general  partner  of  the  Borrower. C.  Pursuant  to  the  Loan  Agreement,  the  Debtor  is  required  to  secure  the  payment  and performance  of  the  Secured  Liabilities  and,  accordingly,  the  Debtor  has  agreed  to  grant  to  the Secured  Party  the  Security  Interests  with  respect  to  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  Secured  Party  as follows:  1.         Definitions.  In  this  Agreement  capitalized  terms  used  but  not  otherwise  defined  in  this Agreement  shall  have  the  meanings  given  to  them  in  the  Loan  Agreement,  and  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.   "Collateral"  means  all  of  the  present  and  future:        500713845  v2

 

 

 

 

 

-2   (a) undertaking; (b)  Personal  Property  (including  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  Secured  Party  in  connection  with this  Agreement);  and   (c)  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  Secured  Party  in  connection  with  this  Agreement and  including  all  fixtures,  improvements,  buildings  and  other  structures  placed, installed  or  erected  from  time  to  time  on  any  such  real  property),  of  the  Debtor,  including  Books  and  Records,  Contracts,  Intellectual  Property  Rights  and  permits, and  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  of  any  of  the  foregoing,  wherever  located.  "Contracts"  means  all  contracts  and  agreements  to  which  the  Debtor  is  at  any  time  a  party  or pursuant  to  which  the  Debtor  has  at  any  time  acquired  rights  (including,  for  greater  certainty,  any Material  Agreement  to  which  the  Debtor  is  a  party),  and  includes  (i)  all  rights  of  the  Debtor  to receive  money  due  and  to  become  due  to  it  in  connection  with  a  contract  or  agreement,  (ii)  all rights  of  the  Debtor  to  damages  arising  out  of,  or  for  breach  or  default  with  respect  to,  a  contract or  agreement,  and  (iii)  all  rights  of  the  Debtor  to  perform  and  exercise  all  remedies  in  connection with  a  contract  or  agreement.  "Control"  means,  with  respect  to  a  particular  Person,  the  possession,  directly  or  indirectly,  of  the power  to  direct  or  cause  the  direction  of  the  management  or  policies  of  such  Person,  whether through  the  ability  to  exercise  voting  power,  by  contract  or  otherwise.   "Controlled"  has  the corresponding  meaning.   "Debtor"  has  the  meaning  set  out  in  the  recitals  hereto.  "Event  of  Acceleration"  has  the  meaning  set  out  in  Section  3  hereof  "Intellectual  Property  Rights"  means  all  industrial  and  intellectual  property  rights  of  the Debtor  or  in  which  the  Debtor  has  any  right,  title  or  interest,  including  copyrights,  patents, inventions  (whether  or  not  patented),  trade-marks,  get-up  and  trade  dress,  industrial  designs, integrated  circuit  topographies,  plant  breeders'  rights,  know  how  and  trade  secrets,  registrations and  applications  for  registration  for  any  such  industrial  and  intellectual  property  rights,  and  all Contracts  related  to  any  such  industrial  and  intellectual  property  rights.   "Issuer"  has  the  meaning  given  to  that  term  in  the  STA.   "Loan  Agreement"  has  the  meaning  set  out  in  the  recitals  hereto.   "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      500713845  v2

 

 

 

 

 

-3   agreement,  as  applicable,  and  any  and  all  other  similar  agreements,  documents  and  instruments relative  to  such  Person.  "Personal   Property"   means   personal   property   and   includes   Accounts,   Chattel   Paper, Documents  of  Title,  Equipment,  Goods,  Instruments,  Intangibles,  Inventory,  Investment  Property and  Money.   "Pledged  Certificated  Securities"  means  any  and  all  Collateral  that  is  a  Certificated  Security.   "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  an  Issuer  of,  or  with  respect  to,  any Pledged  Shares  at  such  time.  "Pledged  Issuer's  Jurisdiction"  means,  with  respect  to  any  Pledged  Issuer,  its  jurisdiction  as determined  under  section  44  of  the  STA.   "Pledged  Securities"  means  any  and  all  Collateral  that  is  a  Security.  "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  Certificates"  means  any  and  all  Security  Certificates  representing  the Pledged  Certificated  Securities.  "Pledged  Security  Entitlements"  means  any  and  all  Collateral  that  is  a  Security  Entitlement. "Pledged  Shares"  means  all  Pledged  Securities  and  Pledged  Security  Entitlements.  "PPSA"  means  the  Personal  Property  Security  Act  of  the  Province  referred  to  in  the  "Governing Law"  section  of  this  Agreement,  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.  "Receiver"  means  a  receiver,  a  manager  or  a  receiver  and  manager  appointed  in  accordance  with Section  11(q).  "Release  Date"  means  the  date  on  which  all  the  Secured  Liabilities  have  been  indefeasibly  paid and  discharged  in  full  and  the  Secured  Party  has  no  further  obligations  to  the  Debtor  under  any Loan  Document  pursuant  to  which  further  Secured  Liabilities  might  arise.  "Secured  Liabilities"  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  Secured  Party  under,  in  connection with  or  with  respect  to  the  Loan  Agreement  or  any  other  Loan  Document,  and  any  unpaid balance  thereof.          500713845  v2

 

 

 

 

 

-4   "Secured  Party"  means  Brookfield  BRP  Holdings  (Canada)  Inc.,  or  any  permitted  successors  or assigns.  "Security  Interests"  means  the  Liens  created  by  the  Debtor  in  favour  of  the  Secured  Party  under this  Agreement.  "STA"  means  the  Securities  Transfer  Act  of  the  Province  referred  to  in  the  "Governing  Law" section  of  this  Agreement,  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.  2.  Grant  of  Security  Interests.   As  general  and  continuing  collateral  security  for  the  due payment  and  performance  of  the  Secured  Liabilities,  the  Debtor  pledges,  mortgages,  charges  and assigns  (by  way  of  security)  to  the  Secured  Party,  and  grants  to  the  Secured  Party  a  security interest  in,  the  Collateral.  3.  Limitations  on  Grant  of  Security  Interests.  If  the  grant  of  the  Security  Interests  with respect  to  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  or  is  otherwise prohibited  or  ineffective  (whether  by  the  terms  thereof  or  under  Requirements  of  Law),  then  such Contract,  Intellectual  Property  Right  or  permit  shall  not  be  subject  to  the  Security  Interests  but shall  be  held  in  trust  by  the  Debtor  for  the  benefit  of  the  Secured  Party  and,  on  the  exercise  by the  Secured  Party  of  any  of  its  rights  or  remedies  under  this  Agreement  following  an  Event  of Default  and  acceleration  of  the  Secured  Liabilities  pursuant  to  and  as  permitted  by  Section  7.2  of the  Loan  Agreement,  (collectively,  an  "Event  of  Acceleration")  shall  be  assigned  by  the  Debtor as  directed  by  the  Secured  Party;  provided  that:  (a)  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,  and  (b)  if  a  term  in  a Contract  that  prohibits  or  restricts  the  grant  of  the  Security  Interests  in  the  whole  of  an  Account or  Chattel  Paper  forming  part  of  the  Collateral  is  unenforceable  against  the  Secured  Party  under Requirements  of  Law,  then  the  exclusion  from  the  Security  Interests  set  out  above  shall  not  apply to  such  Account  or  Chattel  Paper.  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  shall  be  held  by  the  Debtor  in  trust  for  the  Secured  Party  and,  on  the  exercise  by the  Secured  Party  of  any  of  its  rights  or  remedies  under  this  Agreement  following  an  Event  of Acceleration,  shall  be  assigned  by  the  Debtor  as  directed  by  the  Secured  Party.   For  greater certainty,  no  Intellectual  Property  Right  in  any  trade-mark,  get-up  or  trade  dress  is  presently assigned  to  the  Secured  Party  by  sole  virtue  of  the  grant  of  the  Security  Interests  contained  in Section  2.  4.  Security  Interests  Absolute.  The  Security  Interests  granted  hereby  and  all  rights  of  the Secured  Party  hereunder  and  all  obligations  of  the  Debtor  hereunder  are  unconditional  and absolute  and  independent  and  separate  from  any  other  security  for  the  Secured  Liabilities, whether  executed  by  the  Debtor  or  any  other  Person.  5.  Attachment;  No  Obligation  to  Advance.   The  Debtor  confirms  that  value  has  been given  by  the  Secured  Party  to  the  Debtor,  that  the  Debtor  has  rights  in  the  Collateral  existing  at the  date  of  this  Agreement  and  that  the  Debtor  and  the  Secured  Party  have  not  agreed  to      500713845  v2

 

 

 

 

 

 

-5   postpone  the  time  for  attachment  of  the  Security  Interests  to  any  of  the  Collateral.  The  Security Interests  shall  have  effect  and  be  deemed  to  be  effective  whether  or  not  the  Secured  Liabilities  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  Secured  Party  shall  oblige  the  Secured  Party  to  make  any  financial accommodation  or  further  financial  accommodation  available  to  the  Debtor  or  any  other  Person.  6.  Representations  and  Warranties.   The  Debtor  represents  and  warrants  to  the  Secured Party  that:   (a)  as  of  the  date  hereof,  all  of  the  information  set  out  in  Schedule  A  is  accurate  and  complete;   (b)  this  Agreement  constitutes  a  legal,  valid  and  binding  obligation  of  the  Debtor,  enforceable  against  it  in  accordance  with  its  terms  (except  as  such  enforceability may  be  limited  by  applicable  bankruptcy,  insolvency,  reorganization  or  similar laws  affecting  creditors'  rights  generally  and  by  principles  of  equity);  (c)  the  entering  into  of  this  Agreement  and  the  performance  by  the  Debtor  of  its  obligations  hereunder  does  not  and  will  not  contravene,  breach  or  result  in  any default  under  the  Organizational  Documents  of  the  Debtor  or  any  requirement  of Requirements  of  Law  or  result  in  the  creation  of  any  Lien  (other  than  the  Security Interests  granted  herein);   (d)  no  authorization,  consent  or  approval  of,  or  filing  with  or  notice  to,  any  Person  or  Governmental  Authority  is  required  in  connection  with  the  execution  and  delivery of  this  Agreement  by  the  Debtor  or  the  performance  of  this  Agreement  by  the Debtor;   (e)  there  is  no  court,  administrative,  regulatory  or  similar  action  (whether  civil,  quasi- criminal,   or   criminal),   arbitration   or   other   dispute   settlement   procedure, investigation  or  enquiry  by  any  Governmental  Authority,  or  any  similar  matter  or action  against  or  involving  the  Debtor,  whether  in  progress  or  threatened,  which, if  determined  adversely  to  the  Debtor,  would  have  a  Material  Adverse  Effect;  (f)  the  Debtor  does  not  have  or  use  a  French  form  of  name  or  a  combined  English  and  French  form  of  name;  (g)  the  Pledged  Securities  have  been  duly  authorized  and  validly  issued  and  are  fully  paid  and  non-assessable;   (h)  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  Shares;  the  Debtor  is  the  registered  and  beneficial  owner  of  the  Pledged  Securities;

 

 

 

 

 -6  (j) there  are  no  restrictions  on  the  voting  rights  associated  with,  or  upon  the  transfer of,  any  of  the  Pledged  Securities  other  than  as  set  out  in  the  Organizational Documents  or  required  by  Requirements  of  Law;  (k)  all  necessary  approvals  and  consents  have  been  obtained  in  order  to  permit  the  Debtor  to  subject  the  interest  of  the  Debtor  in  the  Collateral  to  the  Security Interest  created  by  this  Agreement  and  to  permit  the  transfer  of  the  Pledged Securities  and  any  other  property  forming  part  of  the  Collateral  from  time  to  time to  the  Secured  Party  or  its  nominee  or  any  other  Person  in  the  event  of  realization in  accordance  with  the  provisions  of  Section  11  hereof;   (1)  the  Pledged  Securities  are  the  sole  property  of  the  Debtor  free  from  any  liens,  charges,  security  interests,  encumbrances  or  any  rights  of  others  other  than Permitted  Liens;   (m)  all  of  the  Pledged  Securities  are  Certificated  Securities  and  are  "securities"  for  the  purposes  of  the  STA;   (n)  this  Agreement  creates  a  valid  first  perfected  security  interest  in  the  Pledged  Securities  subject  to  any  Permitted  Liens;   (o)  the  Debtor  does  not  own  or  have  any  interest  in  any  Securities  Accounts,  Security  Entitlements,  Futures  Contracts  or  Uncertificated  Securities;  and   (p)  there  is  no  existing  agreement,  option,  right  or  privilege  capable  of  becoming  an  agreement  or  option  pursuant  to  which  the  Debtor  could  be  required  to  sell  or otherwise  dispose  of  any  of  the  Pledged  Shares  other  than  as  set  out  in  the  Loan Agreement.  7.  Survival  of  Representations  and  Warranties.  All  representations  and  warranties  made by  the  Debtor  in  this  Agreement  (a)  are  material,  (b)  shall  be  considered  to  have  been  relied  on by  the  Secured  Party,  and  (c)  shall  survive  the  execution  and  delivery  of  this  Agreement  or  any investigation  made  at  any  time  by  or  on  behalf  of  the  Secured  Party  and  any  disposition  or payment  of  the  Secured  Liabilities  until  the  Release  Date.   8. Covenants.  The  Debtor  covenants  and  agrees  with  the  Secured  Party  that: (a)  Marking  of  Collateral.  The  Debtor  shall  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  Secured  Party,  the  Debtor  shall  mark  any  Collateral  specified  by  the Secured  Party  to  evidence  the  existence  of  the  Security  Interests.   (b)  Maintenance  of  Registrations.   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 result  in  a  Material  Adverse  Effect.       500713845  v2

 

 

 

-7   (c)  Further  Identification  of  Collateral.   The  Debtor  shall  promptly  furnish  to  the  Secured  Party  such  statements  and  schedules  further  identifying  and  describing the  Collateral,  and  such  other  reports  in  connection  with  the  Collateral,  as  the Secured  Party  may  from  time  to  time  reasonably  request,  including  an  updated  list of  "serial  number"  goods  owned  by  the  Debtor  and  classified  as  Equipment.  (d)  Agreements  re  Intellectual  Property  Rights.  Promptly  upon  request  from  time  to  time  by  the  Secured  Party,  the  Debtor  shall  authorize,  execute  and  deliver  any  and all  agreements,  instruments,  documents  and  papers  that  the  Secured  Party  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.  (e)  Instruments;  Documents  of  Title;  Chattel  Paper.   Promptly  upon  request  from  time  to  time  by  the  Secured  Party,  the  Debtor  shall  deliver  to  the  Secured  Party, endorsed  and/or  accompanied  by  such  instruments  of  assignment  and  transfer  in such  form  and  substance  as  the  Secured  Party  may  reasonably  request,  any  and  all Instruments,  Documents  of  Title  and  Chattel  Paper  included  in  or  relating  to  the Collateral  as  the  Secured  Party  may  specify  in  its  request.  Pledged  Certificated  Securities.  The  Debtor  shall  deliver  to  the  Secured  Party  any and  all  Pledged  Security  Certificates  and  other  materials  as  may  be  required  from time  to  time  to  provide  the  Secured  Party  with  control  over  all  Pledged Certificated  Securities  in  the  manner  provided  under  section  23  of  the  STA.  At the  request  of  the  Secured  Party,  the  Debtor  shall  cause  all  Pledged  Security Certificates  to  be  registered  in  the  name  of  the  Secured  Party  or  its  nominee  (g)  Partnerships,  Limited  Liability  Companies.    The  Debtor  shall  ensure  that  the  terms  of  any  interest  in  a  partnership  or  limited  liability  company  that  is  Collateral shall  expressly  provide  that  such  interest  is  a  "security"  for  the  purposes  of  the STA.  (h)  Transfer  Restrictions.   If  the  Organizational  Documents  of  any  Pledged  Issuer  restrict  the  transfer  of  the  Securities  of  such  Pledged  Issuer,  then  the  Debtor  shall deliver  to  the  Secured  Party  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  Secured  Party  upon  a  realization  on the  Security  Interests.  (i)  Liens.  The  Debtor  shall  preserve,  protect  and  defend  in  all  material  respects  the  Collateral,  including,  if  appropriate  (in  the  reasonable  judgement  of  the  Debtor), prosecution  of  suits  to  enforce  any  right  of  the  Debtor  and  enforcement  of  any claims  with  respect  thereto  and,  except  as  otherwise  provided  herein,  keep  the Collateral  free  and  clear  of  all  Liens  other  than  as  specifically  permitted  by  the Loan  Agreement  and  any  other  Loan  Document.        500713845  v2

 

 

 

 

 

-8   (j) Disposition;  Transfer.  The  Debtor  shall  not  sell  or  dispose  of,  transfer,  relinquish, or  agree  to  pledge,  encumber,  mortgage,  charge  or  otherwise  deal  with  any  of  its interest  in  the  Collateral  other  than  as  specifically  permitted  by  the  Loan Agreement  or  any  other  Loan  Document.  (k)  Certificated  Securities.   The  Debtor  shall  not  permit  any  issuance  of  additional  Securities  in  the  capital  of  the  Pledged  Issuers  unless  all  such  additional  Securities are  Certificated  Securities,  are  permitted  by  the  Loan  Agreement  and  are forthwith  delivered  to  the  Secured  Party.   (1)  Notices.    The  Debtor  shall  advise  the  Secured  Party  promptly,  in  reasonable  detail,  of  any:  (i)  change  to  a  Pledged  Securities  Intermediary's  Jurisdiction,  Pledged  Issuer's  Jurisdiction  or  Pledged  Future  Intermediary's  Jurisdiction;   (ii)  change   in   the   location   of   the   jurisdiction   of   incorporation   or  amalgamation,  chief  executive  office,  or  domicile  of  the  Debtor;   (iii) change  in  the  name  of  the  Debtor;  (iv)  merger,  consolidation  or  amalgamation  of  the  Debtor  with  any  other  Person;  (v)  additional  jurisdiction  in  which  the  Debtor  carries  on  business  or  has  tangible  Personal  Property;   (vi)  additional  jurisdiction  in  which  material  account  debtors  of  the  Debtor  are  located;   (vii) acquisition  of  any  right,  title  or  interest  in  real  property  by  the  Debtor; (viii)  acquisition  of  any  Intellectual  Property  Rights  which  are  the  subject  of  a  registration  or  application  with  any  governmental  intellectual  property  or other  governing  body  or  registry,  or  which  are  material  to  the  Debtor's business;   (ix) acquisition  of  any  Instrument,  Document  of  Title  or  Chattel  Paper;  (x) creation  or  acquisition  of  any  subsidiary  of  the  Debtor;  or (xi)  Lien  (other  than  Permitted  Liens)  on,  or  claim  asserted  against,  any  of  the  Collateral.  The  Debtor  shall  not  effect  or  permit  any  of  the  changes  referred  to  in  this  section above  unless  all  filings  have  been  made  and  all  other  actions  taken   (to  the  extent, for  greater  certainty,  such  filings  and  actions  may  be  taken  prior  to  such  changes) that  are  required  in  order  for  the  Secured  Party  to  continue  at  all  times  following      500713845  v2

 

 

-9   such  change  to  have  a  valid  and  perfected  first  priority  Security  Interest  with respect  to  all  of  the  Collateral.  (m)  Certificated  Securities.  The  Debtor  shall  not  acquire  any  Securities  unless  all  such  additional  Securities  are  Certificated  Securities  and  are  forthwith  delivered  to  the Secured  Party,  together  with  all  other  materials  as  may  be  required  from  time  to time  to  provide  the  Secured  Party  with  control  over  all  Pledged  Certificated Securities  in  the  manner  provided  under  section  23  of  the  STA.  (n)  Security  Entitlements,   Securities  Accounts,  Future  Contracts,  Uncertificated  Securities.  The  Debtor  shall  not  acquire  any  Security  Entitlement,  Securities Account,  Futures  Contract  or   Uncertificated  Security  without,  prior  to  acquiring such  property,  delivering  to  the  Secured  Party  all  agreements,  instruments, documents  and  other  material  required,  and  doing  all  acts  necessary,  to  ensure  that the  Secured  Party  has  and  will  continue  to  have  a  valid  and  perfected  first  priority Security  Interest  on  such  property.  9.  Voting  Rights.   Unless  an  Event  of  Acceleration  has  occurred  and  is  continuing,  the Debtor  shall  be  entitled  to  exercise  all  voting  power  from  time  to  time  exercisable  with  respect  to the  Pledged  Shares  and  give  consents,  waivers  and  ratifications  with  respect  thereto;  provided, however,  that  no  vote  shall  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 Secured  Party  or  imposing  any  restriction  on  the  transferability  of  any  of  the  Collateral.  Unless an  Event  of  Acceleration  has  occurred  and  is  continuing,  the  Secured  Party  shall,  from  time  to time  at  the  request  and  expense  of  the  Debtor,  execute  or  cause  to  be  executed,  with  respect  to  all Pledged  Securities  that  are  registered  in  the  name  of  the  Secured  Party  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  Secured  Party  or  such  nominee,  as  the  case  may  be,  at  any  and  all  meetings  of  the applicable  Pledged  Issuer's  shareholders,  unitholders  or  debt  holders,  all  Pledged  Securities  that are  registered  in  the  name  of  the  Secured  Party  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,  unitholders  or  debt  holders  of  the  applicable  Pledged Issuer  for  and  on  behalf  of  the  Secured  Party  or  such  nominee,  as  the  case  may  be.  Immediately upon  the  occurrence  and  during  the  continuance  of  any  Event  of  Acceleration,  all  such  rights  of the  Debtor  to  vote  and  give  consents,  waivers  and  ratifications  shall  cease  and  the  Secured  Party or  its  nominee  shall  be  entitled  to  exercise  all  such  voting  rights  and  to  give  all  such  consents, waivers  and  ratifications.  10.  Dividends;  Interest.   Unless  an  Event  of  Acceleration  has  occurred  and  is  continuing, the  Debtor  shall  be  entitled  to  receive  any  and  all  cash  dividends,  interest,  principal  payments and  other  forms  of  cash  distribution  on  the  Pledged  Shares  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  with  respect  to  the  Pledged  Shares,  whether  resulting from  a  subdivision,  combination  or  reclassification  of  the  outstanding  capital  stock  of  any Pledged  Issuer  or  received  in  exchange  for  the  Pledged  Shares  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      500713845  v2

 

 

 

-  10  -  in  exchange  for  any  Pledged  Shares  shall  be  and  become  part  of  the  Collateral  subject  to  the Security  Interests  and,  if  received  by  the  Debtor,  shall  forthwith  be  delivered  to  the  Secured Party  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  Secured  Party'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  Secured  Party  or  its  nominee,  the   Secured Party  shall  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,  distributions  or  other  payments  which  the  Debtor  is  authorized to  receive  and  retain  pursuant  to  this  Section.   If  an  Event  of  Acceleration  has  occurred  and  is continuing,  all  rights  of  the  Debtor  pursuant  to  this  Section  shall  cease  and  the  Secured  Party shall  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  Secured  Party  pursuant  to  the  provisions  of  this  Section  shall  be retained  by  the  Secured  Party  as  additional  Collateral  hereunder  and  be  applied  in  accordance with  the  provisions  of  this  Agreement.  11.  Rights  on  Event  of  Acceleration.   If  an  Event  of  Acceleration  has  occurred  and  is continuing,  then  and  in  every  such  case  all  of  the  Secured  Liabilities  shall,  at  the  option  of  the Secured  Party,  become  immediately  due  and  payable  and  the  Security  Interests  shall  become enforceable  and  the  Secured  Party,  in  addition  to  any  rights  now  or  hereafter  existing  under Requirements  of  Law  may,  personally  or  by  agent,  at  such  time  or  times  as  the  Secured  Party  in its  discretion  may  determine,  do  any  one  or  more  of  the  following:   (a)  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  Secured  Party  by  contract,  at  law  or  in  equity.   (b)  Demand  Possession.  Demand  possession  of  any  or  all  of  the  Collateral,  in  which  event  the  Debtor  shall,  at  the  expense  of  the  Debtor,  immediately  cause  the Collateral  designated  by  the  Secured  Party  to  be  assembled  and  made  available and/or  delivered  to  the  Secured  Party  at  any  place  designated  by  the  Secured Party.  (c)  Take  Possession.  Enter  on  any  premises  where  any  Collateral  is  located  and  take  possession  of,  disable  or  remove  such  Collateral.   (d)  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  Secured  Party  may  determine,  and  demand,  collect  and  retain  all  earnings  and other  sums  due  or  to  become  due  from  any  Person  with  respect  to  any  of  the Collateral.   (e)  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        500713845  v2

 

 

 

 

 

-  11  -charge  by  the  Debtor)  any  of  the  premises,  buildings,  plant  and  undertaking  of,  or occupied  or  used  by,  the  Debtor.   (f)  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 Secured  Party  deems  advisable.  (g)  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  Secured Party  or  elsewhere,  with  or  without  advertising  or  other  formality,  except  as required  by  Requirements  of  Law,  on  such  terms   and  conditions  as  the  Secured Party  may  deem  advisable  and  at  such  prices  as  it  may  deem  best,  for  cash  or  on credit  or  for  future  delivery  to  the  extent  permitted  by  Requirements  of  Law.   (h)  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.   (i)  Purchase  by  Secured  Party.   At  any  public  sale,  and  to  the  extent  permitted  by  Requirements  of  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  Requirements  of  Law. In  any  such  sale  to  the  Secured  Party,  the  Secured  Party  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  Secured  Liabilities  then  due  and  payable  to  it  as  a  credit against  the  purchase  price.  (j)  Collect  Accounts.  Notify  (whether  in  its  own  name  or  in  the  name  of  the  Debtor)  the  account  debtors  under  any  Accounts  of  the  Debtor  of  the  assignment  of  such Accounts  to  the  Secured  Party  and  direct  such  account  debtors  to  make  payment of  all  amounts  due  or  to  become  due  to  the  Debtor  with  respect  to  such  Accounts directly  to  the  Secured  Party  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  Secured  Party  deems  appropriate  in  the  circumstances.   (k)  Transfer  of  Collateral.   Transfer  any  Collateral  that  is  Pledged  Shares  into  the  name  of  the  Secured  Party  or  its  nominee.   (1)  Voting.  Vote  any  or  all  of  the  Pledged  Shares  (whether  or  not  transferred  to  the  Secured  Party  or  its  nominee)  and  give  or  withhold  all  consents,  waivers  and ratifications  with  respect  thereto  and  otherwise  act  with  respect  thereto  as  though it  were  the  outright  owner  thereof.        500713845  v2

 

 

 

 

-  12  -  (m)  Exercise  Other  Rights.   Exercise  any  and  all  rights,  privileges,  entitlements  and  options  pertaining  to  any  Collateral  that  is  Pledged  Shares  as  if  the  Secured  Party were  the  absolute  owner  of  such  Pledged  Shares.  (n)  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 Secured  Party.   (o)  Payment  of  Liabilities.    Pay  any  liability  secured  by  any  Lien  against  any  Collateral.  The  Debtor  shall  immediately  on  demand  reimburse  the  Secured  Party for  all  such  payments  and,  until  paid,  any  such  reimbursement  obligation  shall form  part  of  the  Secured  Liabilities  and  shall  be  secured  by  the  Security  Interests.   (P)  Borrow  and  Grant  Liens.   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  shall immediately  on  demand  reimburse  the  Secured  Party  for  all  such  borrowings  and, until  paid,  any  such  reimbursement  obligations  shall  form  part  of  the  Secured Liabilities  and  shall  be  secured  by  the  Security  Interests.  (q)  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  Secured  Party 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  Requirements  of  Law,  any  Receiver appointed  by  the  Secured  Party  shall  be  considered  to  be  the  agent  of  the  Debtor and  not  of  the  Secured  Party.  (r)  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.   (s)  Consultants.   Require  the  Debtor  to  engage  a  consultant  of  the  Secured  Party'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  Secured  Party  and  to  disclose  to  the  Secured  Party  any  and all  information  obtained  in  the  course  of  such  consultant's  employment.  Where  no  rights  shall  be  exercised  other  than  following  the  giving  of  notice  by  the  Secured  Party to  the  Debtor,  which  notice  has  not  been  rescinded,  the  Secured  Party  may  exercise  any  or  all  of      500713845  v2

 

 

 

-  13  -  the  foregoing  rights  and  remedies  without  demand  of  performance  or  other  demand,  presentment, protest,  advertisement  or  notice  of  any  kind  (except  as  required  by  Requirements  of  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  Requirements  of  Law. None  of  the  above  rights  or  remedies  shall  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  Secured  Party  hereunder  following  the  occurrence  and  during  the  continuance  of  an   Event  of Acceleration  shall  not  be  rendered  invalid  or  ineffective  as  a  result  of  the  curing  of  the  Event  of Default  on  which  such  action  was  based.  12.  Realization  Standards.  To  the  extent  that  Requirements  of  Law  imposes  duties  on  the Secured  Party  to  exercise  remedies  in  a  commercially  reasonable  manner  and  without  prejudice to  the  ability  of  the  Secured  Party  to  dispose  of  the  Collateral  in  any  such  manner,  the  Debtor acknowledges  and  agrees  that  it  is  not  commercially  unreasonable  for  the  Secured  Party  to  (or not  to) (a)  incur  expenses  reasonably  deemed  necessary  by  the  Secured  Party  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)  fail  to  obtain  third  party  consents  for  access to  the  Collateral  to  be  disposed  of,  (c)  fail  to  exercise  collection  remedies  against  account  debtors or  other  Persons  obligated  on  the  Collateral  or  to  remove  Liens  against  the  Collateral, (d) 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) dispose  of  Collateral  by  way  of  public  auction,  public  tender  or  private  contract,  with  or  without advertising  and  without  any  other  formality,  (f)  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)  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)  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)  dispose  of  assets  in  wholesale  rather  than retail  markets,  (j)  disclaim  disposition  warranties,  such  as  title,  possession  or  quiet  enjoyment,  (k)  purchase  insurance  or  credit  enhancements  to  insure  the  Secured  Party  against  risks  of  loss, collection  or  disposition  of  the  Collateral  or  to  provide  to  the  Secured  Party  a  guaranteed  return from  the  collection  or  disposition  of  the  Collateral,  (1)  to  the  extent  deemed  necessary  by  the Secured  Party,  obtain  the  services  of  other  brokers,  investment  bankers,  consultants  and  other professionals  to  assist  the  Secured  Party  in  the  collection  or  disposition  of  any  of  the  Collateral,  (m)  dispose  of  Collateral  in  whole  or  in  part,  (n)  dispose  of  Collateral  to  a  customer  of  the Secured  Party,  and  (o)  establish  an  upset  or  reserve  bid  price  with  respect  to  Collateral.  13.  Grant  of  Licence.   For  the  purpose  of  enabling  the  Secured  Party  to  exercise  its  rights and  remedies  under  this  Agreement  when  the  Secured  Party  is  entitled  to  exercise  such  rights  and remedies,  and  for  no  other  purpose,  the  Debtor  grants  to  the  Secured  Party  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 trade-marks,  get-up  and  trade  dress  and  other  business  indicia,  such  licence  includes  an     500713845  v2

 

 

 

-  14  -  obligation  on  the  part  of  the  Secured  Party  to  maintain  the  standards  of  quality  maintained  by  the Debtor  or,  in  the  case  of  trade-marks,  get-up  and  trade  dress  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.  The  licence  granted  under  this  Section  shall  expire  on  the  Release  Date.  14.  Securities  Laws.   The  Secured  Party  is  authorized,  in  connection  with  any  offer  or  sale of  any  Pledged  Shares,  to  comply  with  any  limitation  or  restriction  as  it  may  be  advised  by counsel  is  necessary  to  comply  with  Requirements  of  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.  In addition  to  and   without  limiting  Section  12,  the  Debtor  further  agrees  that  compliance  with  any such  limitation  or  restriction  shall  not  result  in  a  sale  being  considered  or  deemed  not  to  have been  made  in  a  commercially  reasonable  manner,  and  the  Secured  Party  shall  not  be  liable  or accountable  to  the  Debtor  for  any  discount  allowed  by  reason  of  the  fact  that  such  Pledged Shares  are  sold  in  compliance  with  any  such  limitation  or  restriction.   If  the  Secured  Party chooses  to  exercise  its  right  to  sell  any  or  all  Pledged  Shares,  upon  written  request,  the  Debtor shall  cause  each  applicable  Pledged  Issuer  to  furnish  to  the  Secured  Party  all  such  information  as the  Secured  Party  may  request  in  order  to  determine   the  number  of  shares  and  other  instruments included  in  the  Collateral  which  may  be  sold  by  the  Secured  Party  in  exempt  transactions  under any  Requirements  of  Laws  governing  securities,  and  the  rules  and  regulations  of  any  applicable securities  regulatory  body  thereunder,  as  the  same  are  from  time  to  time  in  effect.  15.  Application  of  Proceeds.  All  Proceeds  of  Collateral  received  by  the  Secured  Party  or  a Receiver  may  be  applied  to  discharge  or  satisfy  any  expenses (including  the  Receiver's remuneration  and  other  expenses  of  enforcing  the  Secured  Party's  rights  under  this  Agreement), Liens  on  the  Collateral  in  favour  of  Persons  other  than  the  Secured  Party,  borrowings,  taxes  and other  outgoings  affecting  the  Collateral  or  which  are  considered  advisable  by  the  Secured  Party 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  Secured  Party,  be held  as  collateral  security  for  the  Secured  Liabilities  or  be  applied  to  such  of  the  Secured Liabilities  (whether  or  not  the  same  are  due  and  payable)  in  such  manner  and  at  such  times  as  the Secured  Party  considers  appropriate  and  thereafter  shall  be  accounted  for  as  required  by Requirements  of  Law.  16.  Continuing  Liability  of  Debtor.    The  Debtor  shall  remain  liable  for  any  Secured Liabilities  that  are  outstanding  following  realization  of  all  or  any  part  of  the  Collateral  and  the application  of  the  Proceeds  thereof  17.  Secured  Party's  Appointment  as  Attorney-in-Fact.  Effective  upon  the  occurrence  and during  the  continuance  of  an  Event  of  Acceleration,  the  Debtor  constitutes  and  appoints  the Secured  Party  and  any  officer  or  agent  of  the  Secured  Party,  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      500713845  v2

 

 

 

-  15  -  Debtor  and  in  the  name  of  the  Debtor  or,  in  its  own  name,  from  time  to  time  in  the  Secured Party'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,  may  be  necessary  or  desirable  to  accomplish the  purposes  of  this  Agreement.  Without  limiting  the  effect  of  this  Section,  the  Debtor  grants  the Secured  Party  an  irrevocable  proxy  to  vote  the  Pledged  Shares  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  Shares  on  the  books  and  records  of  a  Pledged Issuer  or  Pledged  Securities  Intermediary,  as  applicable),  upon  the  occurrence  of  an  Event  of Acceleration.   These  powers  are  coupled  with  an  interest  and  are  irrevocable  until  the  Release Date.  Nothing  in  this  Section  affects  the  right  of  the  Secured  Party  as  secured  party  or  any  other Person  on  the  Secured  Party's   behalf,  to  sign  and  file  or  deliver  (as  applicable)  all  such  financing statements,  financing  change  statements,  notices,  verification  statements  and  other  documents relating  to  the  Collateral  and  this  Agreement  as  the  Secured  Party  or  such  other  Person  considers appropriate.  The  Debtor  hereby  ratifies  and  confirms,  and  agrees  to  ratify  and  confirm,  whatever lawful  acts  the  Secured  Party  or  any  of  the  Secured  Party's  sub-agents,  nominees  or  attorneys  do or  purport  to  do  in  exercise  of  the  power  of  attorney  granted  to  the  Secured  Party  pursuant  to  this Section.  18.  Performance  by  Secured  Party  of  Debtor's  Obligations.  If  the  Debtor  fails  to  perform or  comply  with  any  of  the  obligations  of  the  Debtor  under  this  Agreement,  the  Secured  Party may,  but  need  not,  perform  or  otherwise  cause  the  performance  or  compliance  of  such obligation,  provided  that  such  performance  or  compliance  shall  not  constitute  a  waiver,  remedy or  satisfaction  of  such  failure.   The  expenses  of  the  Secured  Party  incurred  in  connection  with any  such  performance  or  compliance  shall  be  payable  by  the  Debtor  to  the  Secured  Party immediately  on  demand,  and  until  paid,  any  such  expenses  shall  form  part  of  the  Secured Liabilities  and  shall  be  secured  by  the  Security  Interests.  19.  Interest.    If  any  amount  payable  by  the  Debtor  to  the  Secured  Party  under  this Agreement  is  not  paid  when  due,  the  Debtor  shall  pay  to  the  Secured  Party,  immediately  on demand,  interest  on  such  amount  from  the  date  due  until  paid  in  accordance  with  Section  2.3(b) of  the  Loan  Agreement.   All  amounts  payable  by  the  Debtor  to  the  Secured  Party  under  this Agreement,  and  all  interest  on  all  such  amounts  shall  form  part  of  the  Secured  Liabilities  and shall  be  secured  by  the  Security  Interests.  20.  Severability.  Any  provision  of  this  Agreement  that  is  prohibited  or  unenforceable  in  any jurisdiction  shall,  as  to  that  jurisdiction,  be  ineffective  to  the  extent  of  such  prohibition  or unenforceability  and  shall  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  Secured  Party;  Limitations  on  Secured  Party's  Obligations.  (a)  Limitations  on  Liability  of  Secured  Party.  The  Secured  Party  shall  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      500713845  v2

 

 

-  16  -  possession  of,  collect,  sell,  lease  or  otherwise  dispose  of  any  Collateral,  or  to preserve  rights  against  prior  parties).  Neither  the  Secured  Party,  a  Receiver  nor any  agent  thereof  is  required  to  take,  or  shall  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  Secured  Party, any  Receiver  nor  any  agent  thereof  shall  be  liable  for  any,  and  the  Debtor  shall bear  the  full  risk  of  all,  loss  or  damage  to  any  and  all  of  the  Collateral  (including any  Collateral  in  the  possession  of  the  Secured  Party,  any  Receiver,  or  any  agent thereof)  caused  for  any  reason  other  than  the  gross  negligence  or  wilful misconduct  of  the  Secured  Party,  such  Receiver  or  such  agent  thereof.   (b)  Debtor  Remains  Liable  under  Accounts  and  Contracts.    Notwithstanding  any  provision  of  this  Agreement,  the  Debtor  shall  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  Secured  Party  shall  not  have  any  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 Secured  Party  of  any  payment  relating  to  such  Account  or  Contract  pursuant hereto,  and  in  particular  (but  without  limitation),  the  Secured  party  shall  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.  (c)  Collections  on  Accounts  and  Contracts.  The  Debtor  shall  be  authorized  to,  at  any  time  that  an  Event  of  Acceleration  is  not  continuing,  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  Secured  Party  at any  time,  any  payments  of  Accounts  or  under  Contracts,  when  collected  by  the Debtor,  shall  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  Secured  Party  if  required,  in  a  special  collateral  account  maintained  by  the Secured  Party,   and  until  so  deposited,  shall  be  held  by  the  Debtor  in  trust  for  the Secured  Party,  segregated  from  the  other  funds  of  the  Debtor.  All  such  amounts while  held  by  the  Secured  Party  (or  by  the  Debtor  in  trust  for  the  Secured  Party) and  all  income  with  respect  thereto  shall  continue  to  be  collateral  security  for  the Secured  Liabilities  and  shall  not  constitute  payment  thereof  until  applied  as hereinafter  provided.  If  an  Event  of  Acceleration  has  occurred  and  is  continuing, the  Secured  Party  may  apply  all  or  any  part  of  the  amounts  on  deposit  in  such special  collateral  account  on  account  of  the  Secured  Liabilities  in  such  order  as the  Secured  Party  may  elect.   At  the  Secured  Party's  request,  the  Debtor  shall     500713845  v2

 

 

-  17  -  deliver  to  the  Secured  Party  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.   (d)  Analysis  of  Accounts.  At  any  time  and  from  time  to  time,  the  Secured  Party  shall  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  shall furnish  all  such  assistance  and  information  as  the  Secured  Party  may  require  in connection  therewith.  At  any  time  and  from  time  to  time,  the  Secured  Party  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  Secured Party's  reasonable  request  and  at  the  expense  of  the  Debtor,  the  Debtor  shall furnish  to  the  Secured  Party  reports  showing  reconciliations,  aging  and  test verifications  of,  and  trial  balances  for,  its  Accounts.   (e)  Use  of  Agents.  The  Secured  Party  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  Secured  Party.   The  Secured  Party  shall  not  be  obliged  to  exhaust  its recourse  against  the  Debtor  or  any  other  Person  or  against  any  other  security  it  may  hold  with respect  to  the  Secured  Liabilities  or  any  part  thereof  before  realizing  upon  or  otherwise  dealing with  the  Collateral  in  such  manner  as  the  Secured  Party  may  consider  desirable.   The  Secured Party  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  they  may  see fit,  all  without  prejudice  to  the  Secured  Liabilities  or  to  the  rights  and  remedies  of  the  Secured Party  under  this  Agreement.  The  powers  conferred  on  the  Secured  Party  under  this  Agreement are  solely  to  protect  the  interests  of  the  Secured  Party  in  the  Collateral  and  shall  not  impose  any duty  upon  the  Secured  Party  to  exercise  any  such  powers.  23.  Communication.  Any  notice  or  other  communication  required  or  permitted  to  be  given under  this  Agreement  will  be  given  in  accordance  with  the  terms  of  the  Loan  Agreement.  24.  Release  of  Information.  The  Debtor  authorizes  each  Secured  Party  to  provide  a  copy  of this  Agreement  and  such  other  information  as  may  be  requested  of  such  Secured  Party  (i)  to  the extent  necessary  to  enforce  the  Secured  Party's  rights,  remedies  and  entitlements  under  this Agreement, (ii)  to  any  assignee  or  prospective  assignee  of  all  or  any  part  of  the  Secured Liabilities,  and  (iii)  as  required  by  Requirements  of  Law.   25. Expenses;  Indemnity;  Waiver. (a)  The  Debtor  shall  pay  (i)  all  reasonable  out-of-pocket  expenses  incurred  by  the  Secured  Party,  including  the  reasonable  fees,  charges  and  disbursements  of      500713845  v2

 

 

 

 

-  18  -  counsel  for  the  Secured  Party  and  all  applicable  taxes,  in  connection  with  the preparation  and  administration  of  this  Agreement,  (ii)  all  reasonable  out-of-pocket expenses  incurred  by  the  Secured  Party,  including  the  reasonable  fees,  charges and  disbursements  of  counsel  for  the  Secured  Party  and  applicable  taxes,  in connection  with  any  amendments,  modifications  or  waivers  of  the  provisions hereof,  and (iii)  all  out-of-pocket  expenses  incurred  by  the  Secured  Party, including  the  fees,  charges  and  disbursements  of  any  counsel  for  the  Secured Party  and  all  applicable  taxes,  in  connection  with  the  assessment,  enforcement  or protection  of  their  rights  in  connection  with  this  Agreement,  including  its  rights under  this  Section,  including  all  such  out-of-pocket  expenses  incurred  during  any workout,  restructuring  or  negotiations  with  respect  to  the  Secured  Liabilities.  (b)  The  Debtor  hereby  agrees  to  indemnify  the  Secured  Party  (to  the  extent  not  reimbursed  by  the  Borrower),  from  and  against  any  and  all  liabilities,  obligations, damages,  penalties,  actions,  judgments,  suits,  costs,  expenses  or  disbursements  of any  kind  or  nature  whatsoever  which  may  be  imposed  on,  incurred  by,  or  asserted against  the  Secured  Party  in  any  way  relating  to  or  arising  out  of  this  Agreement or  any  other  Loan  Document  or  any  action  taken  or  admitted  by  the  Secured  Party under  or  in  respect  of  this  Agreement;  provided  that  the  Debtor  shall  not  be  liable for  any  portion  of  such  liabilities,  obligations,  damages,  penalties,  actions, judgments,  suits,  costs,  expenses  or  disbursements  resulting  from  the  Secured Party's  gross  negligence  or  wilful  misconduct.  Without  limiting  the  generality  of the  foregoing,  the  Debtor  agrees  to  reimburse  the  Secured  Party  promptly  upon demand  in  the  proportion  specified  in  the  Loan  Agreement  in  respect  of  any  out  of pocket  expenses (including  counsel  fees)  incurred  by  the  Secured  Party  in connection  with  the  preservation  of  any  rights  of  the  Secured  Party  or  the  Debtor under,  or  the  enforcement  of,  or  legal  advice  in  respect  of  the  rights  or responsibilities  under,  this  Agreement  or  any  other  Loan  Document,  to  the  extent that  the  Secured  Party  is  not  reimbursed  for  such  expenses  by  the  Borrower.   (c)  The  Debtor  shall  not  assert,  and  hereby  waives  (to  the  fullest  extent  permitted  by  Requirements  of  Law),  (i)  any  claim  against  the  Secured  Party  (or  any  director, officer  or  employee  thereof),  on  any  theory  of  liability,  for  special,  indirect, consequential  or  punitive  damages (as  opposed  to  direct  or  actual  damages) arising  out  of,  in  connection  with,  or  as  a  result  of,  this  Agreement,  and  (ii)  all  of the  rights,  benefits  and  protections  given  by  any  present  or  future  statute  that imposes  limitations  on  the  rights,  powers  or  remedies  of  a  secured  party  or  on  the methods  of,  or  procedures  for,  realization   of  security,  including  any  "seize  or  sue" or  "anti-deficiency"  statute  or  any  similar  provision  of  any  other  statute.   (d)  All  amounts  due  under  this  Section  shall  be  payable  to  the  Secured  Party  for  the  benefit  of  the  Secured  Party  not  later  than  three  Business  Days  after  written demand  therefor.   (e)  The  indemnifications  set  out  in  this  Section  shall  survive  the  Release  Date  and  the  release  or  extinguishment  of  the  Security  Interests.        500713845  v2

 

 

 

-  19  -  (f)  Notwithstanding  anything  to  the  contrary  herein  or  in  any  of  the  other  Loan  Documents,  in  no  event  shall  any  of  Debtor's  partners,  direct  or  indirect  members, shareholders  or  owners,  or  any  officer,  director,  employee  or  agent  of  the foregoing (collectively,   "Exculpated  Parties"),  have  any  personal  liability whatsoever  relating  to  the  Loan  Documents  (other  than  those  Loan  Documents  to which  any  such  Exculpated  Party  is  a  party)  or  the  loan  evidenced  thereby; provided,  however,  that  the  foregoing  shall  not   prohibit  the  Secured  Party  from pursuing  claims  as  permitted  under  applicable  law  with  respect  to  fraud  or  to distributions  or  payments  actually  received  by  any  Exculpated  Party  in  violation of  the  terms  of  any  of  the  Loan  Documents  or  following  the  occurrence  and during  the  continuance  of  an  Event  of  Default  under  the  Loan  Documents.  26.  Release  of  Debtor.  Upon  the  written  request  of  the  Debtor  given  at  any  time  on  or  after the   Release  Date,  the  Secured  Party  shall,  at  the  expense  of  the  Debtor,  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 Secured  Party  shall  execute  and  deliver  to  the  Debtor  such  releases  and  discharges  as  the  Debtor may  reasonably  request  and  return  all  Pledged  Securities  delivered  to  the  Secured  Party  pursuant to  this  Agreement.  27.  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  Secured  Party,  all  of  which  other  security  shall  remain  in  full  force  and  effect.  28.  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  Debtor  and  the  Secured  Party.   The  Secured  Party  shall  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  Secured  Party,  any  right,  power  or  privilege  hereunder shall  operate  as  a  waiver  thereof.  No  single  or  partial  exercise  of  any  right,  power  or  privilege hereunder  shall  preclude  any  other  or  further  exercise  thereof  or  the  exercise  of  any  other  right, power  or  privilege.  A  waiver  by  the  Secured  Party  of  any  right  or  remedy  hereunder  on  any  one occasion  shall  not  be  construed  as  a  bar  to  any  right  or  remedy  which  the  Secured  Party  would otherwise  have  on  any  future  occasion.  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  Secured Liabilities,  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.  29.  Amalgamation.   If  the  Debtor  is  a  corporation  or  other  body  corporate,  the  Debtor acknowledges  that  if  it  amalgamates  or  merges  with  any  other  corporation  or  corporations,  or other  bodies  corporate,  then  (i)  the  Collateral  and  the  Security  Interests  shall  extend  to  and include  all  the  property  and  assets  of  the  amalgamated  corporation  or  other  body  corporate  and  to any  property  or  assets  of  the  amalgamated  corporation  or  other  body  corporate  thereafter  owned or  acquired,  (ii)  the  term  "Debtor",  where  used  in  this  Agreement,  shall  extend  to  and  include  the amalgamated  corporation  or  other  body  corporate,  and  (iii)  the  term  "Secured  Liabilities",  where      500713845  v2

 

 

 

 

-  20  -  used  in  this  Agreement,  shall  extend  to  and  include  the  Secured  Liabilities  of  the  amalgamated corporation  or  other  body  corporate.  30.  Governing  Law;  Attornment.   This  Agreement  shall  be  governed  by  and  construed  in accordance  with  the  Laws  of  the  Province  of  Ontario  and  the  federal  Laws  of  Canada  applicable therein.  Without  prejudice  to  the  ability  of  the  Secured  Party  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  Requirements  of  Law,  the Debtor  irrevocably  waives  any  objection  (including  any  claim  of  forum  non  conveniens)  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.  31.  Interpretation.   The  definitions  of  terms  herein  shall  apply  equally  to  the  singular  and plural  forms  of  the  terms  defined.  Whenever  the  context  may  require,  any  pronoun  shall  include the  corresponding  masculine,  feminine  and  neuter  forms.  The  words  "include",  "includes"  and "including"  shall  be  deemed  to  be  followed  by  the  phrase  "without  limitation".  The  word  "or"  is disjunctive;  the  word  "and"  is  conjunctive.   The  word  "shall"  is  mandatory;  the  word  "may"  is permissive.   Unless  the  context  requires  otherwise  (a)  any  definition  of  or  reference  to  any agreement,  instrument  or  other  document  herein  shall  be  construed  as  referring  to  such agreement,  instrument  or  other  document  as  from  time  to  time  amended,  supplemented  or otherwise   modified (subject   to   any   restrictions   on   such   amendments,   supplements   or modifications  set  out  herein),  (b)  any  reference  herein  to  any  statute  or  any  section  thereof  shall, unless  otherwise  expressly  stated,  be  deemed  to  be  a  reference  to  such  statute  or  section  as amended,  restated  or  re-enacted  from  time  to  time,  (c)  any  reference  herein  to  any  Person  shall be  construed  to  include  such  Person's  successors  and  permitted  assigns,  (d)  the  words  "herein", "hereof'  and  "hereunder",  and  words  of  similar  import,  shall  be  construed  to  refer  to  this Agreement  in  its  entirety  and  not  to  any  particular  provision  hereof,  and  (e)  all  references  herein to  Sections  and  Schedules  shall  be  construed  to  refer  to  Sections  and  Schedules  to,  this Agreement,  Section  headings  are  for  convenience  of  reference  only,  are  not  part  of  this Agreement  and  shall  not  affect  the  construction  of,  or  be  taken  into  consideration  in  interpreting, this  Agreement.    Any  reference  in  this  Agreement  to  a  Permitted  Lien  is  not  intended  to subordinate  or  postpone,  and  shall  not  be   interpreted  as  subordinating  or  postponing,  or  as  any agreement  to  subordinate  or  postpone,  any  Security  Interest  to  any  Permitted  Lien.  32.  Paramountcy.   In  the  event  of  any  conflict  or  inconsistency  between  the  provisions  of this  Agreement  and  the  provisions  of  the  Loan  Agreement  then,  notwithstanding  anything contained  in  this  Agreement,  the  provisions  contained  in  the  Loan  Agreement  shall  prevail  to  the extent  of  such  conflict  or  inconsistency  and  the  provisions  of  this  Agreement  shall  be  deemed  to be  amended  to  the  extent  necessary  to  eliminate  such  conflict  or  inconsistency,  it  being understood  that  the  purpose  of  this  Agreement  is  to  add  to,  and  not  detract  from,  the  rights granted  to  the  Secured  Party  under  the  Loan  Agreement.  If  any  act  or  omission  of  the  Debtor  is expressly  permitted  under  the  Loan  Agreement  but  is  expressly  prohibited  under  this  Agreement, such  act  or  omission  shall  be  permitted.  If  any  act  or  omission  is  expressly  prohibited  under  this Agreement,  but  the  Loan  Agreement  does  not  expressly  permit  such  act  or  omission,  or  if  any  act is  expressly  required  to  be  performed  under  this  Agreement  but  the  Loan  Agreement  does  not expressly  relieve  the  Debtor  from  such  performance,  such  circumstance  shall  not  constitute  a       500713845  v2

 

 

 

-  21  -  conflict  between  the  applicable  provisions  of  this  Agreement  and  the  provisions  of  the  Loan Agreement.  33.  Successors  and  Assigns.   This  Agreement  shall  enure  to  the  benefit  of,  and  be  binding on,  the  Debtor  and  its  successors  and  permitted  assigns,  and  shall  enure  to  the  benefit  of,  and  be binding  on,  the  Secured  Party  and  its  successors  and  assigns.   The  Debtor  may  not  assign  this Agreement,  or  any  of  its  rights  or  obligations  under  this  Agreement.   The  Secured  Party  may assign  this  Agreement  and  any  of  its  rights  and  obligations  hereunder  to  any  Person  that  replaces it  in  its  capacity  as  such.   If  the  Debtor  or  the  Secured  Party  is  an  individual,  then  the  term "Debtor"  or  "Secured  Party",  as  applicable,  shall  also  include  his  or  her  heirs,  administrators  and executors.  34.  Acknowledgment  of  Rec  t/Waiver.  The  Debtor  acknowledges  receipt  of  an  executed copy  of  this  Agreement  and,  to  the  extent  permitted  by  Requirements  of  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  with  respect  to  any  such  financing statement  or  financing  change  statement.  35.  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.  36.  Counterparts.  This  Agreement  may  be  executed  and  delivered  in  any  number  of counterparts,  each  of  which  when  so  executed  and  delivered  shall  constitute  an  original,  but  all of  which  when  taken  together  shall  constitute  one  and  the  same  document.  37.  Financing  Statements.  Debtor  hereby  authorizes  Secured  Party  to  file  any  and  all  financing  statements,  registrations  or  similar  filings  necessary,  in  Secured  Party's  discretion,  to perfect  any  security  interest  granted  hereunder.  Any  such  financing  statement  or  registration may  describe  the  collateral  as  "all  assets"  of  Debtor.   [signature  page  follows]                                500713845  v2

 

 

 

 

S-1  IN  WITNESS  WHEREOF  the  undersigned  has  caused  this  Agreement  to  be  duly  executed  as of  the  date  first  written  above.  POWIN  ENERGY  ONTARIO  STORAGE  II,  LP by    its       general       partner,    POWIN    ENERGY STORAGE  2,  INC.  By:/s/ Goff Brown Name: Goff Brown Title: Director                                                         Pow  in  —  Signature  Page  to  General  Security  Agreement  (Borrower)

 

 

 

SCHEDULE  A   DEBTOR  INFORMATION    Full  legal  name:   Powin  Energy  Ontario  Storage  II,  LP   Prior  names:   Hecate  Energy  Ontario  Storage  II,  LP   Predecessor  companies:   None   Jurisdiction  of  incorporation  or  organization:   Ontario   Address  of  chief  executive  office:   20550  SW  115th  Avenue,  Tualatin,  Oregon  97062   Addresses  of  all  places  where  business  is  carried  on  or  tangible  Personal  Property  is  kept:   465  Wright  Blvd,  Stratford,  Ontario   Jurisdictions  in  which  all  material  account  debtors  are  located:   Ontario   Addresses  of  all  owned  real  property:   465  Wright  Blvd,  Stratford,  Ontario   Instruments,  Documents  of  Title  and  Chattel  Paper  of  the  Debtor:   June  27,  2017  Lease  between  Festival  Hydro,  Inc  and  Powin  Energy  Ontario  Storage  II,  LP   Pledged  Certificated  Securities:      Pledged  Issuer   Securities Owned %  of  issued  and outstanding Securities  of Pledged  Issuer  Security Certificate Numbers  Security Certificate Location None None None None None   500713845  v2

 

 

 

 

 

 

-2  Registered  trade-marks  and  applications  for  trademark  registrations: None  Patents  and  patent  applications: None  Copyright  registrations  and  applications  for  copyright  registrations: None  Industrial  designs/registered  designs  and  applications  for  registered  designs: None   500713845  v2Exhibit 10.4

 

GUARANTY  AGREEMENT

 

THIS  GUARANTY  AGREEMENT  (this  "Guaranty")  is  made  as  of  September  26, 2017,  by  POWIN  CANADA  B.C.  LTD,  a  corporation  incorporated  under  the  laws  of  the province  of  British  Columbia  ("Guarantor"),  in  favor  of  BROOKFIELD  BRP  HOLDINGS (CANADA)  INC.,  a  corporation  formed  under  the  laws  of  Ontario  (together  with  its  successors and  assigns,  "Lender").

 

RECITALS

 

A.          Lender  is  making  a  loan  in  the  principal  sum  of  Cdn$5,500,000.00  (the  "Loan")  to Powin  Energy  Ontario  Storage  II,  LP,  a  limited  partnership  formed  under  the  laws  of  the province  Ontario  ("Borrower"),  on  or  about  the  date  of  this  Guaranty.

 

B.           Guarantor  is  the  sole  limited  partner  of  Borrower  and  the  sole  shareholder  in Powin  Energy  Storage  2,  Inc.,  a  corporation  incorporated  under  the  laws  of  the  province  of British  Columbia,  the  general  partner  of  Borrower.    As  such,  Guarantor  has  a  significant financial  interest  in  Lender's  making  of  the  Loan  to  Borrower,  and  will  realize  significant financial  benefit  from  the  Loan.

 

C.          The  Loan  is  evidenced  by  a  Term  Loan  Agreement  of  even  date  herewith  (the "Loan  Agreement")  between  Borrower  and  Lender  and  a  Promissory  Note  of  even  date  herewith (the  "Note")  in  the  principal  amount  of  the  Loan  from  Borrower  to  Lender,  and  is  secured  in  part by  a  Leasehold  Debenture  of  even  date  herewith  (the  "Mortgage")  granted  by  Borrower  to Lender  and  encumbering  Borrower's  interest  in  certain  property  located  in  the  province  of Ontario  as  more  fully  described  therein  (the  real  estate,  together  with  all  improvements  thereon and  personal  property  associated  therewith,  is  hereinafter  collectively  called  the  "Mortgaged Property"),  and  a  General  Security  Agreement  of  even  date  herewith  (the  "Security  Agreement") made  by  Guarantor  for  the  benefit  of  Lender.   The  Loan  Agreement,  Note,  Mortgage,  Security Agreement,  and  all  other  documents  and  instruments  existing  now  or  after  the  date  hereof  that evidence,  secure  or  otherwise  relate  to  the  Loan,  including  this  Guaranty,  any  assignments  of leases  and  rents,  other  assignments,  security  agreements,  financing  statements,  other  guaranties, indemnity  agreements (including  environmental  indemnity  agreements),  letters  of  credit,  or escrow/holdback  or  similar  agreements  or  arrangements,  together  with  all  amendments, modifications,  substitutions  or  replacements  thereof,  are  sometimes  herein  collectively  referred to  as  the  "Loan  Documents."

 

D.          It  is  a  condition  precedent  to  the  obligation  of  Lender  to  advance  the  proceeds  of the  Loan  that  Guarantor  execute  and  deliver  to  Lender  this  Guaranty  of  the  payment  and performance  of  Borrower's  obligations  under  the  Loan  Documents,  on  the  terms  and  subject  to the  limitations  and  conditions  set  forth  herein.

 

AGREEMENT

 

In  consideration  of  Lender's  agreement  to  make  the  Loan  to  Borrower  and  other  good and  valuable  consideration,  the  receipt  and  legal  sufficiency  of  which  is  hereby  acknowledged, Guarantor  hereby  states  and  agrees  as  follows:

 

 

 

1.        Guaranty  of  Obligations.

 

a.           Guarantor  hereby  absolutely  and  unconditionally  guarantees  full  and punctual  payment  and  performance  when  due  of  each  and  every  one  of  Borrower's  obligations under  the  Loan  Documents,  including,  without  limitation,  payment  of  interest  thereon  at  the Interest  Rate  or  the  Default  Rate,  as  applicable,  and  payment  of  all  expenses,  including attorneys'  fees,  incurred  by  Lender  in  connection  with  the  enforcement  of  any  of  Lender's  rights under  this  Guaranty  and  the  other  Loan  Documents  (collectively,  the  "Guaranteed  Obligations").

 

b.          Upon  the  request  of  Lender,  Guarantor  shall  immediately  pay  or  perform the  Guaranteed  Obligations  when  they  or  any  of  them  become  due  or  are  to  be  paid  or  performed under  the  term  of  any  of  the  Loan  Documents.   Any  amounts  received  by  Lender  from  any sources  and  applied  by  Lender  towards  the  payment  of  the  Guaranteed  Obligations  shall  be applied  in  such  order  of  application  as  Lender  may  from  time  to  time  elect.   All  Guaranteed Obligations  shall  conclusively  be  presumed  to  have  been  created,  extended,  contracted,  or incurred  by  Lender  in  reliance  upon  this  Guaranty  and  all  dealings  between  Borrower  and  Lender shall  likewise  be  presumed  to  be  in  reliance  upon  this  Guaranty.

 

2.        Additional  Advances,  Renewals,  Extensions  and  Releases.  Guarantor hereby agrees  and  consents  that,  without  notice  to  or  further  consent  by Guarantor,  Lender  may  make additional  advances  with  respect  to  the  Loan,  the  Project,  the  Mortgaged  Property  or  the  other Collateral,  and  the  obligations  of  Borrower  or  any  other  party  in  connection  with  the  Loan  may be  renewed,  extended,  modified,  accelerated  or  released  by  Lender  as  Lender  may  deem advisable,  and  any  collateral  the  Lender  may  hold  or  in  which  the  Lender  may  have  an  interest may  be  exchanged,  sold,  released  or  surrendered  by  it,  as  it  may  deem  advisable,  without impairing  or  affecting  the  obligations  of  Guarantor  hereunder  in  any  way  whatsoever.

 

3.        Waivers.

 

a.          Guarantor  hereby  waives  each  of  the  following: (i)  any  and  all  notice  of the  acceptance  of  this  Guaranty  or  of  the  creation,  renewal  or  accrual  of  any  Guaranteed Obligations  or  the  Debt,  present  or  future  (including  any  additional  advances  made  by  Lender under  the  Loan  Documents);  (ii)  the  reliance  of  Lender  upon  this  Guaranty;  (iii)  notice  of  the existence  or  creation  of  any  Loan  Document  or  of  any  of  the  Guaranteed  Obligations; (iv)  protest,  presentment,  demand  for  payment,  notice  of  default  or  nonpayment,  notice  of dishonor  to  or  upon  Guarantor,  Borrower  or  any  other  party  liable  for  any  of  the  Guaranteed Obligations;  (v)  any  and  all  other  notices  or  formalities  to  which  Guarantor  may  otherwise  be entitled,  including  notice  of  Lender's  granting  the  Borrower  any  indulgences  or  extensions  of time  on  the  payment  of  any  Guaranteed  Obligations;  and  (vi)  promptness  in  making  any  claim  or demand  hereunder.

 

b.          No  delay  or  failure  on  the  part  of  Lender  in  the  exercise  of  any  right  or remedy  against  either  Borrower  or  Guarantor  shall  operate  as  a  waiver  thereof,  and  no  single  or partial  exercise  by  Lender  of  any  right  or  remedy  herein  shall  preclude  other  or  further  exercise thereof  or  of  any  other  right  or  remedy  whether  contained  herein  or  in  the  Note  or  any  of  the other  Loan  Documents.   No  action  of  Lender  permitted  hereunder  shall  in  any  way  impair  or affect  this  Guaranty.

 

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c.          Guarantor  acknowledges  and  agrees  that  Guarantor  shall  be  and  remain absolutely  and  unconditionally  liable  for  the  full  amount  of  all  Guaranteed  Obligations notwithstanding  any  of  the  following,  and  Guarantor  waives  any  defense  or  counterclaims  to which  Guarantor  may  be  entitled,  based  upon  any  of  the  following,  in  any  proceeding  (without prejudice  to  assert  the  same  in  a  separate  cause  of  action  at  a  later  time):

 

(i)          Any  or  all  of  the  Guaranteed  Obligations  being  or  hereafter becoming  invalid  or  otherwise  unenforceable  for  any  reason  whatsoever  or  being  or hereafter  becoming  released  or  discharged,  in   whole  or  in  part,  whether  pursuant  to  a proceeding  under  any  bankruptcy  or  insolvency  laws  or  otherwise;  or

 

(ii)          Lender  failing  or  delaying  to  properly  perfect  or  continue  the perfection  of  any  security  interest  or  lien  on  any  property  which  secures  any  of  the Guaranteed  Obligations,  or  to  protect  the  property  covered  by  such  security  interest  or enforce  its  rights  respecting  such  property  or  security  interest;  or

 

(iii)          Lender  failing  to  give  notice  of  any  disposition  of  any  property serving  as  collateral  for  any  Guaranteed  Obligations  or  failing  to  dispose  of  such collateral  in  a  commercially  reasonable  manner;  or

 

(iv)          Any  other  circumstance  that  might  otherwise  constitute  a  defense other  than  payment  in  full  of  the  Guaranteed  Obligations.

 

d.          So  long  as  any  portion  of  the  Guaranteed  Obligations  or  Indebtedness evidenced  by  the  Loan  Documents  remains  unpaid  or  any  portion  of  the  Guaranteed  Obligations or  such  Indebtedness  (or  any  security  therefor)  that  has  been  paid  to  Lender  remains  subject  to invalidation,  reversal  or  avoidance  as  a  preference,  fraudulent  transfer  or  for  any  other  reason whatsoever  (whether  under  bankruptcy  or  non-bankruptcy  law)  to  being  set  aside  or  required  to be  repaid  to  Borrower  as  a  debtor  in  possession  or  to  any  trustee  in  bankruptcy,  Guarantor irrevocably  waives:

 

(i)          any  rights which it may acquire against Borrower by way of subrogation under this Guaranty or by virtue of any payment made hereunder (whether contractual,  or  under  any  applicable  state, provincial or federal statute, under common law, or otherwise);  and

 

(ii)          all contractual, common law, statutory or other rights of reimbursement, contribution, exoneration  or indemnity (or any similar  right) from or against Borrower that may have arisen in connection with  this Guaranty; and

 

(iii)          any right to participate in any way in the Loan Documents or in the right,  title and  interest  in  any  collateral  securing  the payment  of Borrower's  obligations  to Lender;  and

 

(iv)          all  rights,  remedies  and  claims  relating  to  any  of  the  foregoing.

 

If  any  amount is paid  to Guarantor on  account of subrogation  rights  or  otherwise, such  amount shall be held  in  trust for its benefit  nd  shall forthwith  be paid to Lender to be applied  to  the  Guaranteed  Obligations,  whether  matured  or  unmatured,  in  such  order  as  Lender shall  determine.

 

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4.          Guaranty  of  Payment.   Guarantor  agrees  that  Guarantor's  liability  hereunder  is primary,  absolute  and  unconditional  without  regard  to  the  liability  of  any  other  party.   This Guaranty  shall  be  construed  as  an  absolute,  irrevocable  and   unconditional  guaranty  of  payment and  performance  of  the  Guaranteed  Obligations  (and  not  a  guaranty  of  collection),  without regard  to  the  validity,  regularity  or  enforceability  of  any  of  the  Guaranteed  Obligations.

 

5.          Guaranty  Effective  Regardless  of  Collateral.   This  Guaranty  is  made  and  shall continue  as  to  any  and  all  Guaranteed  Obligations  without  regard  to  any  liens  or  security interests  in  any  collateral,  the  validity,  effectiveness  or  enforceability  of  such  liens  or  security interests,  or  the  existence  or  validity  of  any  other  guaranties  or  rights  of  Lender  against  any  other obligors.   Any  and  all  such  collateral,  security,  guaranties  and  rights  against  other  obligors,  if any,  may  from  time  to  time  without  notice  to  or  consent  of  Guarantor,  be  granted,  sold,  released, surrendered,  exchanged,  settled,  compromised,  waived,  subordinated  or  modified,  with  or without  consideration,  on  such  terms  or  conditions  as  may  be  acceptable  to  Lender,  without   in any  manner  affecting  or  impairing  the   liabilities  of  Guarantor.  Without  limiting  the  generality  of the  foregoing,  it  is  acknowledged  that  Guarantor's  liability  hereunder  shall  survive  any foreclosure  proceeding,  any  foreclosure  sale,  any  delivery  of  a  deed  in  lieu  of  foreclosure,  and any  release  of  record  of  the  Mortgage;  provided,  however,  that  Guarantor's  liability  hereunder shall  not  apply  to  the  extent  that  Guarantor  can  prove  that  such  liability  arose  solely  from circumstances  that:  (a)  first  came  into  existence  subsequent  to  the  date  that  Lender,  its  nominee or  any  party  claiming  title  to  the  Mortgaged  Property  through  Lender,  acquired  title  to  the Mortgaged  Property,  whether  by  foreclosure,  exercise  of  power  of  sale,  consent  to  sale  or otherwise  and  (b)  were  not  the  result  of  any  act  or  negligence  of  Borrower,  Guarantor  or  any  of their  respective  Affiliates,  agents  or  contractors.

 

6.          Additional  Credit.    Credit  or  financial  accommodation  may  be  granted  or continued  from  time  to  time  by  Lender  to  Borrower  regardless  of  Borrower's  financial  or  other condition  at  the  time  of  any  such  grant  or  continuation,  without  notice  to  or  the  consent  of Guarantor  and  without  affecting  Guarantor's  obligations  hereunder.    Lender  shall  have  no obligation  to  disclose  or  discuss  with  Guarantor  its  assessment  of  the  financial  condition  of Borrower.

 

7.          Rescission  of  Payments.    If  at  any  time  payment  of  any  of  the  Guaranteed Obligations  or  any  part  thereof  is  rescinded  or  must  otherwise  be  restored  or  returned  by  Lender upon  the  insolvency,  bankruptcy  or  reorganization  of  Borrower  or  under  any  other  circumstances whatsoever,  this  Guaranty  shall,  upon  such  rescission,  restoration  or  return,  continue  to  be effective  or  shall  (if  previously  terminated)  be  reinstated,  as  the  case  may  be,  as  if  such  payment had  not  been  made.

 

8.          Independent  Obligations.   The  obligations  of  Guarantor  are  independent  of  the obligations  of  Borrower,  and  a  separate  action  or  actions  for  payment,  damages  or  performance may  be  brought  and  prosecuted  against  Guarantor,  whether  or  not  an  action  is  brought  against Borrower  or  the  security  for  Borrower's  obligations,  and  whether  or  not  Borrower  is  joined  in any  such  action  or  actions.   Guarantor  expressly  waives  any  requirement  that  Lender  institute suit  against  Borrower  or  any  other  persons,  or  exercise  or  exhaust  its  remedies  or  rights  against Borrower  or  against  any  other  person,  other  guarantor,  or  other  collateral  securing  all  or  any  part of  the  Guaranteed  Obligations,  prior  to  enforcing  any  rights  Lender  has  under  this  Guaranty  or otherwise.  Lender  may  pursue  all  or  any  such  remedies  at  one  or  more  different  times  without  in any  way  impairing  its  rights  or  remedies  hereunder.  Guarantor  hereby  further  waives  the  benefit of  any  statute  of  limitations  affecting  its  liability  hereunder  or  the  enforcement  hereof.  If  there shall  be  more  than  one  guarantor  with  respect  to  any  of  the  Guaranteed  Obligations,  then  the obligations  of  each  such  guarantor  shall  be  joint  and  several.

 

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9.          Subordination  of  Indebtedness  of  Borrower  to  Guarantor.   Any  Indebtedness  of Borrower  to  Guarantor  now  or  hereafter  existing  is  hereby  subordinated  to  the  prior  payment  in full  of  the  Guaranteed  Obligations.   Guarantor  agrees  that  following  the  occurrence  and  during the  continuance  of  an  Event  of  Default,  until  the  Guaranteed  Obligations  and  Indebtedness evidenced  by  the  Loan  Documents  have  been  paid  in  full,  Guarantor  will  not  seek,  accept  or retain  for  Guarantor's  own  account,  any  payment  (whether  for  principal,  interest,  or  otherwise) from  Borrower  for  or  on  account  of  such  subordinated  debt.   Following  the  occurrence  and during  the  continuance  of   an  Event  of  Default,  any  payments  to  Guarantor  on  account  of  such subordinated  debt  shall  be  collected  and  received  by  Guarantor  in  trust  for  Lender  and  shall  be paid  over  to  Lender  on  account  of  the  Guaranteed  Obligations,  as  Lender  determines  in  its discretion,  without  impairing  or  releasing  the  obligations  of  Guarantor  hereunder.   Guarantor hereby  unconditionally  and  irrevocably  agrees  that  (a)  Guarantor  will  not  at  any  time  while  the Guaranteed  Obligations  remain  unpaid,  assert  against  Borrower  (or  Borrower's  estate  in  the event  that  Borrower  becomes  the  subject  of  any  case  or  proceeding  under  any  federal,  state  or provincial  bankruptcy  or  insolvency  laws)  any  right  or  claim  to  indemnification,  reimbursement, contribution  or  payment  for  or  with  respect  to  any  and  all  amounts  Guarantor  may  pay  or  be obligated  to  pay  Lender,  including  the  Guaranteed  Obligations,  and  any  and  all  obligations which  Guarantor  may  perform,  satisfy  or  discharge,  under  or  with  respect  to  the  Guaranty,  and (b)  Guarantor  subordinates  to  the  Indebtedness  evidenced  by  the  Loan  Documents  all  such  rights and  claims  to  indemnification,  reimbursement,  contribution  or  payment  that  Guarantor  may  have now  or  at  any  time  against  Borrower  (or  Borrower's  estate  in  the  event  that  Borrower  becomes the  subject  of  any  case  or  proceeding  under  any  federal,  state  or  provincial  bankruptcy  or insolvency  laws).

 

10.          Claims  in  Bankruptcy.   Guarantor  shall  file  all  claims  against  Borrower  in  any bankruptcy  or  other  proceeding  in  which  the  filing  of  claims  is  required  by  law  upon  any Indebtedness  of  Borrower  to  Guarantor  and  will  assign  to  Lender  all  rights  of  Guarantor thereunder. Guarantor   hereby   irrevocably   appoints   Lender   its   attorney-in-fact,   which appointment  is  coupled  with  an  interest,  to  file  any  such  claim  that  Guarantor  may  fail  to  file,  in the  name  of  Guarantor  or,  in  Lender's  discretion,  to  assign  the  claim  and  to  cause  proof  of  claim to  be  filed  in  the  name  of  Lender's  nominee.   In  all  such  cases,  whether  in  administration, bankruptcy  or  otherwise,  the  person  or  persons  authorized  to  pay  such  claim  shall  pay  to  Lender the  full  amount  thereof  and,  to  the  full  extent  necessary  for  that  purpose,  Guarantor  hereby assigns  to  Lender  all  of  Guarantor's  rights  to  any  such  payments  or  distributions  to  which Guarantor  would  otherwise  be  entitled.

 

11.          Guarantor's  Representations  and  Warranties.  Guarantor  represents,  warrants  and covenants  to  and  with  Lender  that:

 

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a.          There  is  no  action  or  proceeding  pending  or,  to  the  knowledge  of Guarantor,  threatened  against  Guarantor  before  any  court  or  administrative  agency  which  might result  in  any  material  adverse  change  in  the  business  or  financial  condition  of  Guarantor  or  in  the property  of  Guarantor;

 

b.          Guarantor  has  filed  all  federal  and  provincial  income  tax  returns  which Guarantor  has  been  required  to  file  (or  valid  extensions  of  the  same),  and  has  paid  all  taxes  as shown  on  said  returns  and  on  all  assessments  received  by  Guarantor  to  the  extent  that  such  taxes have  become  due;

 

c.         Neither  the  execution  nor  delivery  of  this  Guaranty  nor  fulfillment  of  nor compliance  with  the  terms  and  provisions  hereof  will  conflict  with,  or  result  in  a  breach  of  the terms,  conditions  or  provisions  of,  or  constitute  a  default  under,  or  result  in  the  creation  of  any lien,  charge  or  encumbrance  upon  any  property  or  assets  of  Guarantor  under  any  agreement  or instrument  to  which  Guarantor  is  now  a  party  or  by  which  Guarantor  may  be  bound;

 

d.          This  Guaranty  is  a  valid  and  legally  binding  agreement  of  Guarantor  and  is enforceable  against  Guarantor  in  accordance  with  its  terms;

 

e.          Guarantor  has  examined  the  Loan  Documents;  and

 

f.          Guarantor  has  the  full  power,  authority,  and  legal  right  to  execute  and deliver  this  Guaranty.  Guarantor  is  duly  organized,  validly  existing  and  in  good  standing  under the  laws  of  the  province  of  its  formation,  and  the  execution,  delivery  and  performance  of  this Guaranty  by  Guarantor  has  been  duly  and  validly  authorized  and  the  person(s)  signing  this Guaranty  on  Guarantor's  behalf  has  been  validly  authorized  and  directed  to  sign  this  Guaranty.

 

12.          Notice  of  Litigation.  Guarantor  shall  promptly  give  Lender  notice  of  all  litigation or  proceedings  before  any  court  or  Governmental  Authority  affecting  Guarantor  or  its  property, except  litigation  or  proceedings  which,  if  adversely  determined,  would  not  have  a  material adverse  effect  on  the  financial  condition  or  operations  of  Guarantor  or  its  ability  to  perform  any of  its  obligations  hereunder.

 

13.          Access  to  Records.  Guarantor  shall  give  Lender  and  its  representatives  access  to, and  permit  Lender  and  such  representatives  to  examine,  copy  or  make  extracts  from,  any  and   all books,  records  and  documents  in  the  possession  of  Guarantor  relating  to  the  performance  of Guarantor's  obligations  hereunder  and  under  any  of  the  Loan  Documents,  all  at  such  times  and as  often  as  Lender  may  reasonably  request.   If  Guarantor  is  not  an  individual,  Guarantor  shall continuously  maintain  its  existence  and  shall  not  dissolve  or  permit  its  dissolution.

 

14.          Assignment  by  Lender.  In  connection  with  any  sale,  assignment  or  transfer  of  the Loan,  Lender  may  sell,  assign  or  transfer  this  Guaranty  and  all  or  any  of  its  rights,  privileges, interests  and  remedies  hereunder  to  any  other   person  or  entity  whatsoever  without  notice  to  or consent  by  Guarantor,  and  in  such  event  the  assignee  shall  be  entitled  to  the  benefits  of  this Guaranty  and  to  exercise  all  rights,  interests  and  remedies  as  fully  as  Lender.

 

15.          Termination.    Except  as  otherwise  provided  for  in  the  Loan  Documents,  this Guaranty  shall  terminate  only  when  all  of  the  Guaranteed  Obligations  have  been  indefeasibly paid  in  full,  including  all  interest  thereon,  late  charges  and  other  charges  and  fees  included  within the  Guaranteed  Obligations.  When  the  conditions  described  above  have  been  fully  met,  Lender will,  upon  request,  furnish  to  Guarantor  a  written  cancellation  of  this  Guaranty.

 

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16.          Notices.  All  notices,  requests  and  communications  hereunder  shall  be  in  writing (including  by  electronic  mail).   Unless  otherwise  expressly  provided  herein,  any  such  notice, request,  demand  or  other   communication  shall  be  deemed  to  have  been  duly  given  or  made  when delivered  personally,  or,  in  the  case  of  delivery  by  mail,  when  deposited  in  the  mail,  certified mail  with  return  receipt  requested,  postage  prepaid  or,  in  the  case  of  electronic  mail,  when  sent and  no  undeliverable  notification  is  received,  addressed  as  follows:

 

	
Lender:

	 
	 	
Brookfield  BRP  Holdings  (Canada)  Inc. 

181  Bay  Street,  Suite  300

	 	
Toronto,  Ontario  M5J  2T3 

Attention:  Sean  Robertson

	 	
E-mail:  sean.robertson@brookfield.com

	 
	
With  copies  of  legal  notices  to:

	 
	 	
Brookfield  BRP  Holdings  (Canada)  Inc. 

181  Bay  Street,  Suite  300

	 	
Toronto,  Ontario  M5J  2T3 

Attention:  General  Counsel

	 	
E-mail:  jennifer.mazin@brookfield.com

	 
	
With  a  copy  to:

	 	 
	 	
K&L  Gates  LLP

	 	
925  Fourth  Avenue,  Suite  2900 Seattle,  

Washington  98104 

Attention:  Rhys  Hefta

	 	
E-mail:  rhys.hefta@klgates.com

	 	 
	
Guarantor:

	 	 
	 	
Powin  Canada  B.C.  Ltd.

	 	
c/o  Powin  Energy  Corporation 

20550  SW  115th  Avenue

Tualatin,  Oregon  97062

 Attention:  Michael  Wietecki 

E-mail:  mikew@powin.com

 

Any  party  may,  by  proper  written  notice  hereunder  to  the  others,  change  the  individuals or  addresses  to  which  such  notices  to  it  shall  thereafter  be  sent.

  

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17.          Waiver  of  Jury  Trial.   TO  THE  FULLEST  EXTENT  NOW  OR  HEREAFTER PERMITTED  BY  APPLICABLE  LAW,  EACH  OF  GUARANTOR  AND  LENDER  HEREBY AGREE  NOT  TO  ELECT  A  TRIAL  BY  JURY  OF  ANY  ISSUE  TRIABLE  OF  RIGHT  BY JURY,  AND  WAIVES  ANY  RIGHT  TO  TRIAL  BY  JURY  FULLY  TO  THE  EXTENT  THAT ANY  SUCH  RIGHT  SHALL  NOW  OR  HEREAFTER  EXIST  WITH  REGARD  TO  THIS GUARANTY,  THE  NOTE,  THE  MORTGAGE,  THE  SECURITY  AGREEMENT  OR  THE OTHER  LOAN  DOCUMENTS,  OR  ANY  CLAIM,  COUNTERCLAIM  OR  OTHER  ACTION ARISING  IN  CONNECTION  THEREWITH.    THIS  WAIVER  OF  RIGHT  TO  TRIAL  BY JURY  IS  GIVEN  KNOWINGLY  AND  VOLUNTARILY  BY  GUARANTOR  AND  LENDER, AND  IS  INTENDED  TO  ENCOMPASS  INDIVIDUALLY  EACH  INSTANCE  AND  EACH ISSUE  AS  TO  WHICH  RIGHT  TO  TRIAL  BY  JURY  WOULD  OTHERWISE  ACCRUE. EACH  OF  GUARANTOR  AND  LENDER  IS  HEREBY  AUTHORIZED  TO  FILE  A  COPY  OF THIS  SECTION  IN  ANY  PROCEEDING  AS  CONCLUSIVE  EVIDENCE  OF  THIS  WAIVER.

 

18.          Miscellaneous.   This  Guaranty  shall  be  a  continuing  guaranty.   This  Guaranty shall  bind  the  heirs  (but  only  to  the  extent  of  their  interest  on  the  estate  of  Guarantor),  successors and  assigns  of  Guarantor  (except  that  Guarantor  may  not  assign  his,  her,  or  its  liabilities  under this  Guaranty  without  the  prior  written  consent  of  Lender,  which  consent  Lender  may  in  its discretion  withhold),  and  shall  inure  to  the  benefit  of  Lender,  its  successors,  transferees  and assigns.   Each  provision  of  this   Guaranty  shall  be  interpreted  in  such  manner  as  to  be  effective and  valid  under  applicable  law.  Neither  this  Guaranty  nor  any  of  the  terms  hereof,  including  the provisions  of  this  Section,  may  be  terminated,  amended,  supplemented,  waived  or  modified orally,  but  only  by  an  instrument  in  writing  executed  by  the  party  against  which  enforcement  of the  termination,  amendment,  supplement,  waiver  or  modification  is  sought,  and  the  parties hereby: (a)  expressly  agree  that  it  shall  not  be  reasonable  for  any  of  them  to  rely  on  any  alleged, non-written  amendment  to  this  Guaranty;  (b)  irrevocably  waive  any  and  all  right  to  enforce  any alleged,  non-written  amendment  to  this  Guaranty;  and  (c)  expressly  agree  that  it  shall  be  beyond the  scope  of  authority  (apparent  or  otherwise)  for  any  of  their  respective  agents  to  agree  to  any non-written  modification   of  this   Guaranty.   This   Guaranty  may  be   executed  in   several counterparts,  each  of  which  counterpart  shall  be  deemed  an  original  instrument  and  all  of  which together  shall  constitute  a  single  Guaranty.    The  failure  of  any  party  hereto  to  execute  this Guaranty,  or  any  counterpart  hereof,  shall  not  relieve  the  other  signatories  from  their  obligations hereunder.  As  used  in  this  Guaranty,  (i)  the  terms  "include,"  "including"  and  similar  terms  shall be  construed  as  if  followed  by  the  phrase  "without  being  limited  to,"  (ii)  any  pronoun  used herein  shall  be  deemed  to  cover  all  genders,  and  words  importing  the   singular  number  shall  mean and  include  the  plural  number,  and  vice  versa,  (iii)  all  captions  to  the  Sections  hereof  are  used  for convenience  and  reference  only  and  in  no  way  define,  limit  or  describe  the  scope  or  intent  of,  or in  any  way  affect,  this  Guaranty,  (iv)  no  inference  in  favor  of,  or  against,  Lender  or  Guarantor shall  be  drawn  from  the  fact  that  such  party  has  drafted  any  portion  hereof  or  any  other  Loan Document, (v)  the  term  "Borrower"  shall  mean  individually  and  collectively,  jointly  and severally,  each  Borrower  (if  more  than  one)  and  shall  include  the  successors  (including  any subsequent  owner  or  owners  of  the  Mortgaged  Property  or  any  part  thereof  or  any  interest  therein and  Borrower  in  its  capacity  as  debtor-in-possession  after  the  commencement  of  any  bankruptcy proceeding),  assigns,  heirs,  personal  representatives,  executors  and  administrators  of  Borrower, (vi)  the  term  "or"  has,  except  where  otherwise  indicated,  the  inclusive  meaning  represented  by the  phrase  "and/or,"  (vii)  the  words  "hereof,"  "herein,"  "hereby,"  "hereunder,"  and  similar  terms in  this  Guaranty  refer  to  this  Guaranty  as  a  whole  and  not  to  any  particular  provision  or  section of  this  Guaranty,  and  (viii)  an  Event  of  Default  shall  "continue"  or  be  "continuing"  until  such Event  of  Default  has  been  waived  in  writing  by  Lender  or  Lender  has  agreed,  in  its  sole  and absolute  discretion,  to  accept  a  cure  of  such  Event  of  Default.   Wherever  Lender's  judgment, consent,  approval  or  discretion  is  required  under  this  Guaranty  or  Lender  shall  have  an  option, election,  or  right  of  determination  or  any  other  power  to  decide  any  matter  relating  to  the  terms of  this  Guaranty,  including  any  right  to  determine  that  something  is  satisfactory  or  not,  such determination  shall  be  made  in  the  sole  and  absolute  discretion  of  Lender  except  as  may  be otherwise  expressly  and  specifically  provided  herein.   If  any  provision  of  this  Guaranty  is  held invalid  or  unenforceable  by  final  and  unappealable  judgment  of  the  court  having  jurisdiction over  the  matter  and  persons,  such  provisions  shall  be  ineffective  only  to  the  extent  of  such prohibition  or  invalidity,  without  invalidating  the  remainder  of  such  provision,  its  application  in other  circumstances,  or  the  remaining  provisions  of  this  Guaranty.  Any  capitalized  terms  used  in this  Guaranty  and  not  otherwise  defined  herein  shall  have  the  meaning  set  forth  in  the  Loan Agreement.

  

8

 

19.          Applicable  Law;  Jurisdiction  and  Venue.

 

a.          LENDER  HAS  OFFICES  IN  THE  STATE  OF  NEW  YORK  AND  THE PROCEEDS  OF  THE  LOAN  DELIVERED  PURSUANT  HERETO  WERE  DISBURSED FROM  THE  STATE  OF  NEW  YORK,  WHICH  STATE  THE  PARTIES  AGREE  HAS  A SUBSTANTIAL   RELATIONSHIP   TO   THE   PARTIES   AND   TO   THE  UNDERLYING TRANSACTION   EMBODIED   HEREBY,   AND   IN   ALL   RESPECTS,   INCLUDING, WITHOUT   LIMITING   THE   GENERALITY   OF   THE   FOREGOING,   MATTERS   OF CONSTRUCTION,  VALIDITY  AND  PERFORMANCE,  THIS  GUARANTY  AND  THE OBLIGATIONS  ARISING  HEREUNDER  AND  THEREUNDER  SHALL  BE  GOVERNED BY,  AND  CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAWS  OF  THE  STATE  OF  NEW YORK  APPLICABLE  TO  CONTRACTS  MADE  AND  PERFORMED  IN  SUCH  STATE (WITHOUT   REGARD   TO   PRINCIPLES   OF   CONFLICTS   OF   LAWS)   AND   ANY APPLICABLE  LAW  OF  THE  UNITED  STATES  OF  AMERICA.    TO  THE  FULLEST EXTENT  PERMITTED  BY  LAW,  GUARANTOR  HEREBY  UNCONDITIONALLY  AND IRREVOCABLY  WAIVES  ANY  CLAIM  TO  ASSERT  THAT  THE  LAW  OF  ANY  OTHER JURISDICTION  GOVERNS  THIS  GUARANTY,  WHICH  SHALL  BE  GOVERNED  BY  AND CONSTRUED  IN  ACCORDANCE  WITH  THE  LAWS  OF  THE  STATE  OF  NEW  YORK PURSUANT  TO  SECTION  5-1401  OF  THE  NEW  YORK  GENERAL  OBLIGATIONS  LAW.

 

b.          ANY  LEGAL  SUIT,  ACTION  OR  PROCEEDING  AGAINST  LENDER OR  GUARANTOR  ARISING  OUT  OF  OR  RELATING  TO  THIS  GUARANTY  ("ACTION") MAY   AT   LENDER'S   OPTION   BE   INSTITUTED   IN (AND   IF   ANY   ACTION   IS ORIGINALLY  BROUGHT   IN  ANOTHER  VENUE,   THE  ACTION   SHALL  AT   THE ELECTION  OF  LENDER  BE  TRANSFERRED  TO)  ANY  FEDERAL  OR  STATE  COURT  IN THE  CITY  OF  NEW  YORK,  COUNTY  OF  NEW  YORK,  PURSUANT  TO  SECTION  5-1402 OF  THE  NEW  YORK  GENERAL  OBLIGATIONS  LAW  AND  GUARANTOR  WAIVES  ANY OBJECTIONS  WHICH  IT  MAY  NOW  OR  HEREAFTER  HAVE  BASED  ON  VENUE  OR FORUM  NON  CONVENIENS  OF  ANY  SUCH  ACTION,  AND   GUARANTOR  HEREBY IRREVOCABLY  SUBMITS  TO  THE  JURISDICTION  OF  ANY  SUCH  COURT  IN  ANY ACTION.  GUARANTOR  DOES  HEREBY  DESIGNATE  AND  APPOINT:

 

9

 

National  Registered  Agents,  Inc. 

111  Eighth  Avenue

New  York,  NY  10011

 

AS  ITS  AUTHORIZED  AGENT  TO  ACCEPT  AND  ACKNOWLEDGE  ON  ITS  BEHALF SERVICE  OF  ANY  AND  ALL  PROCESS  WHICH  MAY  BE  SERVED  IN  ANY  SUCH ACTION  IN  ANY  FEDERAL  OR  STATE  COURT  IN  NEW  YORK,  NEW  YORK,  AND AGREES  THAT  SERVICE  OF  PROCESS  UPON  SAID  AGENT  AT  SAID  ADDRESS  AND WRITTEN  NOTICE  OF  SAID  SERVICE  MAILED  OR  DELIVERED  TO  GUARANTOR  IN THE   MANNER   PROVIDED   HEREIN   SHALL   BE   DEEMED   IN   EVERY   RESPECT EFFECTIVE  SERVICE  OF  PROCESS  UPON  GUARANTOR  IN  ANY  SUCH  ACTION  IN THE  STATE  OF  NEW  YORK.    GUARANTOR  (I)  SHALL  GIVE  PROMPT  NOTICE  TO LENDER  OF  ANY  CHANGED  ADDRESS  OF  ITS  AUTHORIZED  AGENT  HEREUNDER, (II)  MAY  AT  ANY  TIME  AND  FROM  TIME  TO  TIME  DESIGNATE  A  SUBSTITUTE AUTHORIZED  AGENT  WITH  AN  OFFICE  IN  NEW  YORK,  NEW  YORK  (WHICH SUBSTITUTE  AGENT  AND  OFFICE  SHALL  BE  DESIGNATED  AS  THE  PERSON  AND ADDRESS  FOR  SERVICE  OF  PROCESS),  AND  (III)  SHALL  PROMPTLY  DESIGNATE SUCH  A  SUBSTITUTE  IF  ITS  AUTHORIZED  AGENT  CEASES  TO  HAVE  AN  OFFICE  IN NEW  YORK,  NEW  YORK  OR  IS  DISSOLVED  WITHOUT  LEAVING  A  SUCCESSOR.

 

20.          OFAC.   Guarantor  hereby  represents,  warrants  and  covenants  that  Guarantor  is not  (nor  will  be)  a  person  with  whom  Lender  is  restricted  from  doing  business  under  regulations of  the  Office  of  Foreign  Asset  Control  ("OFAC")  of  the  Department  of  the  Treasury  of  the United  States  of  America  (including,  those  Persons  named  on  OFAC's  Specially  Designated  and Blocked  Persons  list)  or  under  any  statute,  executive  order  (including,  the  September  24,  2001 Executive  Order  Blocking  Property  and  Prohibiting  Transactions  With  Persons  Who  Commit, Threaten  to  Commit,  or  Support  Terrorism),  or  other  governmental  action  and  is  not  and  shall not  engage  in  any  dealings  or  transactions  or  otherwise  be  associated  with  such  persons.   In addition,  Guarantor  hereby  covenants  to  provide  Lender  with  any  additional  information  that Lender  deems  necessary  from  time  to  time  in  order  to  ensure  compliance  with  all  applicable  laws concerning  money  laundering  and  similar  activities.

 

21.          Limited  Recourse.  Lender's  recourse  under  this  Guaranty  shall  be  limited  to  and satisfied  from  the  Collateral  pledged  to  Lender  pursuant  to  the  Security  Agreement  and  any  other collateral  pledged  by  Guarantor  to  Lender  as  security  for  its  obligations  under  this  Guaranty, including  all  proceeds  thereof;  provided,  however  nothing  herein  shall,  under  any  circumstances, (a)  impair  the  right  of  Lender  to  name  Guarantor  in  any  proceeding,  action  or  suit  for foreclosure,  sale  or  other  Collateral  realization  under  the  Security  Agreement  or  any  other  Loan Document,  or  (b)  impair  the  specific  enforcement  of  Guarantor's  obligations  under  any  of  the Loan  Documents.  Furthermore,  notwithstanding  the  foregoing,  Lender  shall  have  recourse  against Guarantor  with  respect  to,  and  Guarantor  shall  be  fully  and  personally  liable  for,  payment  of  all expenses,  including  attorneys'  fees,  incurred  by  Lender  in  connection  with  the  enforcement  of  any  of Lender's  rights  under  this  Guaranty  and  the  other  Loan  Documents.

 

10

 

22.          Exculpation.   Notwithstanding  anything  to  the  contrary  herein  or  in  any  of  the other  Loan  Documents,  in  no  event  shall  any  of  Guarantor's  partners,  direct  or  indirect  members, shareholders  or  owners,  or  any  officer,  director,  employee  or  agent  of  the  foregoing  (collectively, "Exculpated  Parties"),  have  any  personal  liability  whatsoever  relating  to  the  Loan  Documents (other  than  those  Loan  Documents  to  which  any  such  Exculpated  Party  is  a  party)  or  the  loan evidenced  thereby;  provided,  however,  that  the  foregoing  shall  not  prohibit  Lender  from pursuing  claims  as  permitted  under  applicable  law  with  respect  to  fraud  or  to  distributions  or payments  actually  received  by  any  Exculpated  Party  in  violation  of  the  terms  of  any  of  the  Loan Documents  or  following  the  occurrence  and  during  the  continuance  of  an  Event  of  Default  under the  Loan  Documents.

 

Signatures  Appear  on  Following  Page

  

11

 

IN  WITNESS  WHEREOF,  Guarantor  has  executed  or  caused  this  Guaranty  to  be executed  as  of  the  day  and  year  first  above  written.

 

	
GUARANTOR:

 

POWIN  CANADA  B.C.  LTD.,  a  corporation 

incorporated  under the laws of the province of 

British  Colum  is

	 	 
	
By:

	
/s/ Geoff Brown

	
Name:

	
Geoff Brown

	
Title:

	
Direct

 

 

(Signature  Page  to  Guaranty  Agreement)

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}]]