Document:

Exhibit 10.22  

DEED OF HYPOTHEC  

ON THIS TWENTY-SECOND DAY OF AUGUST TWO THOUSAND AND FIVE.  

BEFORE Mtre Robert Alain, the undersigned Notary for the Province of Quebec, practicing in the City and District of Montreal. 

APPEARED:  

SR TELECOM INC. (the "Grantor"), a legal person and a corporation duly incorporated under the Canada Business
Corporations Act, having its registered office and a place of business at 8150 Trans-Canada Highway, City of Montreal (Saint-Laurent), Province of Quebec,
H4S 1M5, herein acting and represented by David L. Adams, its Senior Vice-President, Finance, Chief Financial Officer and Secretary, duly authorized for all purposes hereof pursuant
to a Resolution of its Board of Directors enacted on July 19, 2005, a certified extract of which remains annexed hereto as Annex "A" hereto after having been signed for identification by said
representative with and in the presence of the undersigned Notary. 

AND:  

EXPORT DEVELOPMENT CANADA/EXPORTATION ET DEVELOPPEMENT CANADA ("EDC"), a corporation established by the  Export Development
Act, Canada, having its principal establishment at 151 O'Connor Street, in the City of Ottawa, Province of Ontario, Canada,
postal code K1A 1K3, herein acting and represented by Keyvan Nassiry, its duly authorized representative for all purposes hereof pursuant to a Power of Attorney dated August 18, 2005, an
original of which remains annexed hereto as Annex "B" hereto after having been signed for identification by said representative with and in the presence of the undersigned notary. 

AND:  

INTER-AMERICAN DEVELOPMENT BANK ("IADB"), a public international organization established pursuant to
the "Agreement Establishing the Inter-American Development Bank" dated April 8, 1959, having its principal establishment at 1300 New York Avenue, NW, in the City of Washington,
District of Columbia, USA, zip code 20577, herein acting and represented by Keyvan Nassiry, its duly authorized representative for all purposes hereof pursuant to a Power of Attorney dated
August 18, 2005, an original of which remains annexed hereto as Annex "C" hereto after having been signed for identification by said representative with and in the presence of the undersigned
notary. 

        WHEREAS pursuant to the CTR Guarantee, the Grantor has guaranteed the Guaranteed Obligations to and in favour of the CTR Lenders; and, 

        WHEREAS the Grantor is desirous of hypothecating the Charged Property to and in favour of the CTR Lenders as continuing and collateral
security for the Guaranteed Obligations, in accordance with the terms, conditions and provisions hereof. 

WHEREFORE, THE PARTIES HAVE AGREED WITH EACH OTHER AND HAVE DECLARED UNTO THE UNDERSIGNED NOTARY AS FOLLOWS:

1.    PREAMBLE  

1.1    The preamble forms part hereof as if recited at length herein. 

2.    DEFINITIONS AND INTERPRETATION  

2.1    Unless otherwise defined herein or unless there is something in the subject or the context hereof inconsistent therewith, each capitalized term used in this
Deed has the meaning ascribed thereto in the CTR Guarantee. 

2.2    Unless
the context otherwise requires, the following expressions will have the respective meanings hereinafter set forth: 

2.2.1    "Administrator" has the meaning ascribed to it in Clause 8.2 hereof; 

 

2.2.2    "Charged Property" has the meaning ascribed to it in Clause 3.1 hereof and includes, for greater certainty, all of the
property and rights described in Clauses 3.1.1 (including all paragraphs thereof), 3.1.2, 21.1 (including all paragraphs thereof) and 21.2 (including all paragraphs thereof) hereof; 

2.2.3    "Civil Code" means the Civil Code of the Province of Quebec; 

2.2.4    "Claims" means, collectively: 

a)    all
"accounts," as such term is defined in the PPSA, now owned or hereafter acquired by the Grantor and, in any event, including: 

i)    all
accounts receivable, other receivables, book debts and other forms of obligations (other than forms of obligations evidenced by chattel paper, securities or instruments) now owned
or hereafter received or acquired by or belonging or owing to the Grantor, whether arising out of goods sold or services rendered by it or from any other transaction (including any such obligations
which may be characterized as an account or contract right under the PPSA); 

ii)    all
of the Grantor's rights in, to and under all purchase orders or receipts now owned or hereafter acquired by it for goods or services; 

iii)    all
of the Grantor's rights to any goods represented by any of the foregoing (including unpaid sellers' rights of rescission, replevin, reclamation and stoppage in transit and rights
to returned, reclaimed or repossessed goods); 

iv)    all
monies due or to become due to the Grantor under all purchase orders and contracts for the sale of goods or the performance of services or both by the Grantor or in connection
with any other transaction (whether or not yet earned by performance on the part of the Grantor) now or hereafter in existence, including the right to receive the proceeds of said purchase orders and
contracts; and, 

v)    all
collateral security and guarantees of any kind, now or hereafter in existence, given by any Person with respect to any of the foregoing; and, 

b)    all
accounts receivable, book accounts, book debts, debts, claims, monies, rentals, revenues, incomes, loans receivable, demands, rebates, refunds, amounts owing by or claimable from
the crown, state or government or any departments, agents or agencies thereof and choses in action which now are or which may at any time hereafter be due or owing to or owned by the Grantor or in
which the Grantor now or hereafter has any other interest and all security interests, hypothecs, assignments, guarantees, bills of exchange, notes, chattel paper, negotiable instruments, contracts,
invoices, books of account, letters of credit and other documents and rights now held or owned or which may be hereafter held or owned by the Grantor or any third party on behalf of the Grantor in
respect of any of the foregoing and all rights of an unpaid vendor, including rights to merchandise returned, repossessed or recovered; 

2.2.5    "Copyright Licence" means any and all rights now owned or hereafter acquired by the Grantor under any written agreement granting any
right to use any Copyright or Copyright registration; 

2.2.6    "Copyrights" means all of the following now owned or hereafter acquired by the Grantor: 

a)    all
copyrights and general intangibles of like nature (whether registered or unregistered), now owned or existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, including all registrations, recordings and applications in the Canadian Copyright Office or in any similar office or agency in any other country
or any political subdivision thereof; and, 

b)    all
reissues, extensions or renewals thereof; 

2.2.7    "Costs" means: 

a)    all
costs and expenses which may hereafter be incurred, in any manner and under any circumstances, by and/or on behalf of the CTR Lenders in and/or relating to (A) the
enforcement of 

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the
Hypothec, (B) the sale and/or disposal of any of the Charged Property forming the object of the Hypothec, and/or (C) dealing with the Charged Property forming the object of the
Hypothec; 

b)    any
and all fees, disbursements and applicable sales taxes incurred by any professionals (including, without limitation, any attorneys, receivers, trustees, monitors and/or
consultants) which may hereafter be engaged by and/or on behalf of the CTR Lenders or for which the CTR Lenders may hereafter become obliged for and/or pertaining to (A) the enforcement of the
Hypothec, (B) the sale and/or disposal of any of the Charged Property forming the object of the Hypothec, and/or (C) dealing with the Charged Property forming the object of the Hypothec;
and, 

c)    any
and all other costs and expenses, of any nature or form whatsoever, which may hereafter be incurred by and/or on behalf of the CTR Lenders or for which the CTR Lenders may
hereafter become obliged, under any circumstances whatsoever, for and/or pertaining to (A) the enforcement of the Hypothec, (B) the sale and/or disposal of any of the Charged Property
forming the object of the Hypothec, and/or (C) dealing with the Charged Property forming the object of the Hypothec, 

to
the extent that same are not secured by the Hypothec; 

2.2.8    "CTR" means Communicaciôn y Telefonia, Rural S.A., a sociedad anônoima duly organized and
validly existing under the laws of Chile; 

2.2.9    "CTR Guarantee" means the "Guarantee Agreement" dated as of May 19, 2005 between the Grantor and the CTR Lenders with respect
to the Guaranteed Obligations, as the same may be hereafter amended, supplemented, revised, replaced or restated from time to time; 

2.2.10    "CTR Lenders" means EDC and IADB and their permitted assigns; 

2.2.11    "Deed" means the present "Deed of Hypothec" as well as all future amendments and supplements hereto and renewals and replacements
hereof; 

2.2.12    "Documents of Title" means, collectively: 

a)    any
"chattel paper," as such term is defined in the PPSA, now owned or hereafter acquired by the Grantor, wherever located; and, 

b)    all
documents of title, whether negotiable or non-negotiable including, without limitation, all warehouse receipts and bills of lading in which the Grantor now or hereafter
has an interest; 

2.2.13    "Equipment" means, collectively: 

a)    all
"equipment", as such term is defined in the PPSA, now owned or hereafter acquired by the Grantor, wherever located and, in any event, including all of the Grantor's machinery and
equipment, including processing equipment, conveyors, machine tools, data processing and computer equipment with software and peripheral equipment (other than software constituting part of the
Claims), and all engineering, processing and manufacturing equipment, office machinery, furniture, materials handling equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other equipment of every kind and nature, trade fixtures and fixtures not forming a part of real property, all whether now
owned or hereafter acquired, and wherever situated, together with all additions and accessions thereto, replacements therefor, all parts therefor, all substitutes for any of the foregoing, fuel
therefor, and all manuals, drawings, instructions, warranties and rights with respect thereto, and all products and proceeds thereof and condemnation awards and insurance proceeds with respect
thereto; and, 

b)    all
machinery, equipment, furniture, fixtures, materials, supplies, appliances, dyes, molds, tanks, vehicles, furnaces, boilers, motors, engines, accessories and tools now owned or
hereafter acquired by the Grantor, whether or not the same be affixed to any immovable property or used upon or in connection therewith, together with all present and future improvements,
appurtenances and accessories thereto; 

2.2.14    "Event of Default" means each of the events and/or circumstances referred to in Clause 7.1 hereof; 

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2.2.15    "Guaranteed Obligations" means the "Guaranteed Obligations" under and as defined in the CTR Guarantee, up to the "CTR Guarantee
Maximum" under and defined in the CTR Guarantee; 

2.2.16    "Governmental Authority" means any nation or government, any state or other political subdivision thereof, and any agency, court,
department or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government; 

2.2.17    "Hypothec" means collectively the hypothecation and the additional hypothecation of the Charged Property by the Grantor in favour of
the CTR Lenders created pursuant to Clauses 3.1 and 3.2 hereof; 

2.2.18    "Hypothec Amount" means the sum of Twenty-Five Million Dollars ($25,000,000.00); 

2.2.19    "Insurance" means, collectively, all insurance policies relating directly or indirectly to any of the Charged Property or any part
thereof and all rights and claims under all policies of insurance of whatever nature including, without limitation, under insurance against loss or damage; 

2.2.20    "Intangible Property" means, collectively: 

a)    any
and all Copyright Licence, Patent Licence, Trademark Licence or other licence of rights or interests now held or hereafter acquired by the Grantor, Patents, Copyrights, Trademarks,
trade secrets and customer lists; and, 

b)    all
incorporeal property now owned or hereafter acquired by the Grantor or its interest therein including, without limitation, the Scheduled Intangible Property, and all patents and
patents pending, registered and unregistered trade marks, trade or brand names, service marks, copyrights, industrial designs, formulae, processes, trade secrets, goodwill, contractual rights,
licences and permits; 

2.2.21    "Intercreditor Agreement" means the "Inter-Creditor Agreement" dated as of August 22nd, 2005 between the
Grantor, BNY Trust Company of Canada, Computershare Trust Company of Canada, the CTR Lenders, CTR, et al, as the same may be hereafter amended, supplemented, revised, replaced or restated from
time to time; 

2.2.22    "Interest Rate" means twenty-five percent (25%) per annum; 

2.2.23    "Inventory" means, collectively: 

a)    any
"inventory", as such term is defined in the PPSA, now or hereafter owned or acquired by the Grantor, wherever located, and in any event including inventory, merchandise, goods and
other personal property which are held by or on behalf of the Grantor for sale or lease or are furnished or are to be furnished under a contract of service, or which constitute raw materials, work in
process or materials used or consumed or to be used or consumed in the Grantor's business or in the processing, production, packaging, promotion, delivery or shipping of the same, including other
supplies; and, 

b)    all
goods, wares, merchandise, property in stock and inventory now owned and hereafter acquired by the Grantor including, without limitation, all raw materials, goods in process,
finished goods, goods in transit and all packaging and shipping materials and all materials and merchandise procured for the manufacture or
production thereof and all goods, wares and merchandise held for sale, lease or resale or furnished or to be furnished under contracts for service or used or consumed in the business of the Grantor; 

2.2.24    "Monies" means, collectively, all monies, cash, foreign currencies and credits in which the Grantor now or hereafter has an
interest; 

2.2.25    "Patents" means all of the following in which the Grantor now holds or hereafter acquires any interest: 

a)    all
letters patent of invention and all applications for letters patent, all industrial designs, design patents and all registrations and recordings thereof, including registrations,
recordings and applications in the Canadian Patent and Trademark Office, Canadian Designs Office or in any similar office or agency in any country or political subdivision thereof; and, 

b)    all
reissues, continuations, continuations-in-part or extensions thereof; 

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2.2.26    "Patent Licence" means rights under any written agreement now owned or hereafter acquired by the Grantor granting any right with
respect to any invention on which a Patent is in existence; 

2.2.27    "Person" means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation, other entity or government (whether federal, provincial, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof); 

2.2.28    "PPSA" means the Personal Property Security Act (Ontario); 

2.2.29    "Proceeds" means, collectively: 

a)    "proceeds,"
as such term is defined in the PPSA and, in any event, shall include: 

i)    any
and all proceeds of any insurance, indemnity, warranty or guarantee payable to the Grantor from time to time with respect to any of the Charged Property; 

ii)    any
and all payments (in any form whatsoever) made or due and payable to the Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Charged Property by any Governmental Authority (or any Person acting under colour of any Governmental Authority); 

iii)    any
claim of the Grantor against third parties: 

A)    for
past, present or future infringement of any Patent or Patent Licence; or, 

B)    for
past, present or future infringement or dilution of any Copyright, Copyright Licence, Trademark or Trademark Licence, or for injury to the goodwill associated with any Trademark or
Trademark Licence; 

iv)    any
recoveries by the Grantor against third parties with respect to any litigation or dispute concerning any of the Charged Property; and, 

v)    any
and all other amounts from time to time paid or payable under or in connection with any of the Charged Property, upon disposition or otherwise; and, 

b)    all
property in any form derived directly or indirectly from any dealings with any of the Charged Property including: 

i)    identifiable
or traceable personal or movable property that is derived directly or indirectly from any dealing with the Charged Property or proceeds of the Charged Property and in
which the Grantor acquires an interest; 

ii)    any
insurance or other payment that represents indemnity or compensation for loss of or damage to the Charged Property or proceeds of the Charged Property or a right to such a
payment; and 

iii)    any
payment made in total or partial discharge or redemption of chattel paper, a security, an instrument, an intangible or incorporeal property; 

2.2.30    "Records" means, collectively, all computer programs, firmware and software and all computer and other records and data, whether in
hard copy or otherwise, pertaining to any of the Charged Property and the equipment containing same and owned by the Grantor; 

2.2.31    "Scheduled Intangible Property" means any property described in Clause 21.1 hereof under the heading "Scheduled Intangible
Property"; 

2.2.32    "Scheduled Securities" means any Securities described in Clause 21.2 hereof under the heading "Scheduled Securities"; 

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2.2.33    "Securities" means, collectively: 

a)    all
shares, options, warrants, general or limited partnership interests or other equivalents (regardless of how designated) of or in a corporation, partnership or equivalent entity
whether voting or nonvoting, including common shares, preferred shares or any other "equity security"; and, 

b)    all
shares, stocks, warrants, bonds, debentures, debenture stock, and other securities, now or hereafter owned and/or held by the Grantor, in which the Grantor now or hereafter has an
interest including, without limitation, the Scheduled Securities; 

2.2.34    "Security Agreement" means the "Security Agreement" dated as of August 22, 2005 between the Grantor and the CTR Lenders, as
the same may be hereafter amended, supplemented, revised, replaced or restated from time to time; 

2.2.35    "Separate Hypothec" means the further and separate hypothecation of the Charged Property by the Grantor in favour of the CTR Lenders
created pursuant to Clause 3.4 hereof; 

2.2.36    "Subsidiaries" means each of the following Persons, namely: 

a)    SR (BV) Holdings Limited (British Virgin Islands); 

b)    CTR Holdings Limited (British Virgin Islands); 

c)    Servicios Rurals de Telecomunicaciones S.A. (Chile); 

d)    Communicaciôn y Telefonia, Rural S.A. (Chile); 

e)    Pacific Maple, Inc. (Delaware, USA); 

f)    Mistral (Chile); 

g)    SRT Telecommunications Ltd. (Florida, USA); 

h)    SR Telecom International Inc. (Canada); 

i)    Pacifican Telecom International Inc. (Canada); 

j)    SRT do Brasil Ltd. (Brasil); 

k)    Telecommunicaciones Montreal, S.A. de C.V. (Mexico); 

l)    SR Telecom USA, Inc. (Delaware, USA); 

m)    Netro SARL (France); 

n)    Netro GmbH (Germany); 

o)    A.A.S. Inc. (Delaware, USA); 

p)    SR International Inc. (Barbados); 

q)    SR Telecom Technology Inc. (Barbados); 

r)    SR Telecom SAS (France); 

s)    SRC South Africa Pty Ltd. (South Africa); 

t)    TDMA Services Co. Ltd. (Thailand); 

u)    SR Telecom Philippines Inc. (Philippines); 

v)    SR Telecom Clark Inc. (Philippines); and, 

w)    SR Telecom Pty Ltd. (Australia); 

2.2.37    "Trademark Licence" means rights under any written agreement now owned or hereafter acquired by the Grantor granting any right to
use any Trademark; and, 

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2.2.38    "Trademarks" means all of the following now owned or hereafter acquired by the Grantor: 

a)    all
trademarks, trade names, corporate names, business names, trade styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether registered or unregistered), all registrations and recordings thereof, and all applications in connection therewith,
including registrations, recordings and applications in the Canadian Trade-marks Office or in any similar office in any country or any political subdivision thereof; 

b)    all
reissues, extensions or renewals thereof; and, 

c)    all
goodwill associated with or symbolized by any of the foregoing. 

3.    HYPOTHEC, ADDITIONAL HYPOTHEC AND SEPARATE HYPOTHEC  

3.1    As continuing and collateral security for the payment of the Guaranteed Obligations by the Grantor to the CTR Lenders under the CTR Guarantee and the
fulfillment of all other obligations of the Grantor hereunder, the Grantor hereby hypothecates to and in favour of the CTR Lenders, for and in the Hypothec Amount with interest thereon at the Interest
Rate (both before and after maturity, demand, default and judgment) all of (i) the following property now or hereafter owned by the Grantor,  (ii) all
rights, titles and interest now or hereafter held by the Grantor in all of the following property to the extent of such rights, titles and
interest, and (iii) all present and future renewals, accretions, replacements and substitutions of and to the following property as well as everything
now or hereafter united to the following property by accession (collectively the "Charged Property"), namely: 

3.1.1    the
universality of all of the Grantor's present and future moveable property, corporeal and incorporeal, of whatever nature and wherever situated (whether in the possession of the
Grantor, in the possession of any other Person, in transit or otherwise) including, without limitation: 

	a)
	as
a universality, the Claims;

	b)
	as
a universality, the Documents of Title;

	c)
	as
a universality, the Proceeds;

	d)
	as
a universality, the Records;

	e)
	as
a universality, the Monies;

	f)
	as
a universality, the Securities;

	g)
	as
a universality, the Insurance;

	h)
	as
a universality, the Intangible Property;

	i)
	as
a universality, the Inventory;

	j)
	as
a universality, the Equipment; and

	k)
	as
a universality, all other corporeal and incorporeal moveable property, assets, rights and undertakings of any nature and kind, now owned or hereafter acquired by the Grantor; and 

3.1.2    the
following immovable property, namely: 

Lot
numbers 1 164 151, 1 164 163 and 1 164 199 of the Cadastre du Quebec, Registration Division of Montreal, with
building(s) thereon situated bearing civic numbers 8150-8212 Trans-Canada Highway and 1415-1475 Montée de Liesse in the City of
Montreal (St-Laurent). 

3.2    To
further secure the payment of the Guaranteed Obligations by the Grantor to the CTR Lenders under the CTR Guarantee and the performance and the observance of the Grantor's
obligations hereunder, the Grantor hereby further hypothecates the Charged Property to and in favour of the CTR Lenders for and in a further amount equal to twenty percent (20%) of the Hypothec
Amount. 

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3.3    In
addition to its obligation to pay and/or reimburse the CTR Lenders all costs and expenses referred to herein and referred to in the CTR Guarantee, the Grantor hereby agrees and
undertakes to pay and/or reimburse to the CTR Lenders the full amount of Costs upon the CTR Lenders' simple demand therefor. 

3.4    As
continuing and collateral security for all of the Costs and the obligation of the Grantor to pay and/or reimburse the CTR Lenders all of the Costs, the Grantor hereby further
hypothecates all of the Charged Property to and in the favour of the CTR Lenders for and in a further amount equal to twenty percent (20%) of the Hypothec Amount
(the "Separate Hypothec"). The Separate Hypothec shall subsist and operate completely separately from and independently of the hypothec and the
additional hypothec set forth in Clauses 3.1 and 3.2 hereof. 

3.5    Should
any of the Securities consist of any shares, bonds, debentures, warrants or any other securities or instruments entitling the Grantor to exercise any voting rights, redemption
rights, conversion rights or any other rights or privileges whatsoever, the CTR Lenders shall at all times, following occurrence and continuation of an Event of Default, be entitled (but not
obliged) to become the registered or named holder or beneficiary thereof as well as to fully exercise all of such rights or privileges on behalf of the Grantor and in such manner and at such times as
the CTR Lenders deem appropriate. The CTR Lenders' becoming the registered or named holder or beneficiary of any Securities or the CTR Lenders' exercise of any of such rights or privileges shall
neither necessitate nor constitute the exercise by the CTR Lenders of any of their rights hereunder. The CTR Lenders shall not, in any manner whatsoever, be responsible or liable to the Grantor or any
other person(s) resulting from either the failure by the CTR Lenders to exercise any of the foregoing rights or privileges or the manner or timing of the CTR Lenders' exercise of any of the
foregoing rights or privileges. 

4.    COLLECTION OF CLAIMS

4.1    Notwithstanding
the hypothecation of the Claims created hereby in favour of the CTR Lenders (as well as all publications, registrations and/or significations perfecting same),
the CTR Lenders, subject to the provisions hereof, hereby authorize the Grantor to collect all Claims as they fall due. Upon the occurrence of an Event of Default and as long as same may exist, the
CTR Lenders may withdraw authority of the
Grantor to collect Claims. In the event of such withdrawal of authority, the CTR Lenders alone, to the exclusion of the Grantor, shall be entitled to collect Claims and any such Claims so collected by
the CTR Lenders shall be dealt with in accordance with the provisions of the CTR Guarantee. In such event, the Claims shall be paid by the debtors thereof to the CTR Lenders, being the sole Person
entitled to receive same and grant discharge thereof and all amounts collected or received by the Grantor in respect of the Claims will be deemed to have been collected or received by the Grantor as
mandatary of and in trust for the CTR Lenders and will be remitted immediately to the CTR Lenders in identical form as received, duly endorsed in blank, or deposited into such bank accounts as are
acceptable from time to time to the CTR Lenders and shall be dealt with in accordance with the provisions of the CTR Guarantee. 

4.2    In
the event that the CTR Lenders withdraw the Grantor's authority to collect Claims as provided for in Clause 4.1 hereof: 

4.2.1    the
CTR Lenders shall be entitled to give good and sufficient discharge for all Claims collected by it, but the CTR Lenders shall not be liable for any loss or damage resulting from
non-collection thereof, any irregularity in the payment thereof or any failure to inform the Grantor of such non-collection or irregularity; 

4.2.2    the
CTR Lenders shall hold any proceeds received by the CTR Lenders, in a separate account to be applied and dealt with by the CTR Lenders in accordance with the provisions of the
CTR Guarantee. 

4.3    Neither
the receipt nor the application of any Claims by the CTR Lenders shall reduce, novate or otherwise affect the hypothecs, security and rights hereby created in favour of the
CTR Lenders, all of which shall remain in full force and effect for the full amount thereof unless reduced or discharged in writing by the CTR Lenders. 

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4.4    In
the event that the CTR Lenders withdraw the Grantor's authority to collect Claims as provided for in Clause 4.1 hereof, the following shall prevail, namely: 

4.4.1    the
CTR Lenders will be the only party authorized and entitled to collect, dispose of and deal with the Claims; 

4.4.2    the
CTR Lenders will have the right to collect, dispose of and deal with the Claims as they may deem expedient including, without limiting the generality of the foregoing, to
demand, sue for, enforce, recover and receive payment of the Claims and to compound, compromise, grant extensions, take and give up securities, accept compositions and grant releases and discharges
with respect thereto, the whole without notice to the Grantor and without any liability for any loss resulting therefrom; 

4.4.3    actions
to enforce rights with respect to the Claims may be instituted by the CTR Lenders, at their discretion, in their own names, in the name of the Grantor, or in the name of the
CTR Lenders and the Grantor jointly; 

4.4.4    the
CTR Lenders will not be obliged to inform the Grantor of any irregularity in the payment of any of the Claims; and, 

4.4.5    any
such Claims shall be dealt with in accordance with the provisions of the CTR Guarantee. 

5.    INSURANCE

5.1    The
Grantor shall, at its sole cost and expense, maintain the policies of insurance currently in force in respect of the Grantor's assets or otherwise as is customary and prudent in
the industry of the Grantor. If the Grantor at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required above or to pay all premiums relating thereto, the
CTR Lenders may, at any time or times thereafter, obtain and maintain such policies of insurance and pay such premiums and take such other action with respect thereto as it deems advisable. The CTR
Lenders shall have no obligation to obtain insurance for the Grantor or pay any premiums therefor. By doing so, the CTR Lenders shall not be deemed to have waived any Event of Default arising from the
Grantor's failure to maintain such insurance and pay any premiums therefor. All sums so disbursed, including legal fees, court costs and other charges related thereto, shall be payable on demand by
the Grantor to the CTR Lenders and shall be additional obligations secured by the Hypothec. The Grantor shall deliver to the CTR Lenders, in form and substance satisfactory to the CTR Lenders,
endorsements to: 

5.1.1    all
"All Risk" and business interruption insurance of the Grantor naming the CTR Lenders as loss payee and containing the standard mortgage clause provided by the  Insurance Bureau of Canada; and,

5.1.2    all
general liability and other liability policies naming the CTR Lenders as additional insureds thereunder. 

5.2    The
CTR Lenders reserve the right, at any time, upon any change in Grantor's risk profile (including any change in the product mix maintained by the Grantor or any laws affecting the
potential liability of Grantor) to require additional forms and limits of insurance to, in the reasonable opinion of the CTR Lenders, adequately protect the CTR Lenders' interests, in all or any
portion of the Charged Property and to ensure that the Grantor is protected by insurance in amounts and with coverage customary for its industry. If requested by the CTR Lenders, the Grantor shall
deliver to the CTR Lenders, from time to time, a report of a reputable insurance broker, satisfactory to the CTR Lenders, with respect to its insurance policies. 

5.3    The
Grantor irrevocably makes, constitutes and appoints the CTR Lenders, so long as any Event of Default shall have occurred and be continuing or the anticipated insurance proceeds
exceed Cdn$500,000.00, as the Grantor's true and lawful agent and attorney-in-fact for the purpose of making, settling and adjusting claims under such "All Risk" policies of
insurance, endorsing the name of the Grantor on any cheque or any other item of payment for the proceeds of such "All Risk" policies of insurance and for making all determinations and decisions with
respect to such "All Risk" policies of insurance. The CTR Lenders shall have no duty to exercise any rights or powers granted to them pursuant to the foregoing
power-of-attorney. The Grantor shall promptly notify the CTR Lenders of any loss, damage, or destruction to the Charged Property in the amount of Cdn$100,000.00 or more,
whether or not covered by insurance. After deducting from such proceeds the expenses, if any, incurred by the CTR Lenders in the collection or handling thereof, the CTR Lenders shall 

9

 

remit
the balance to the Grantor which shall use such money, or any part thereof, to replace, repair, restore or rebuild the Charged Property in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss, damage or destruction. 

6.    COVENANTS, REPRESENTATIONS AND WARRANTIES

6.1    The
Grantor covenants, represents and warrants as follows: 

6.1.1    the
Grantor will pay the Guaranteed Obligations as and when same become due and payable in accordance with the terms, conditions and provisions of the CTR Guarantee; 

6.1.2    the
Grantor will perform, observe and comply with all obligations, terms, conditions and covenants provided under the CTR Guarantee; and, 

6.1.3    the
Grantor shall fulfill and respect all of its obligations, covenants, representations and warranties set forth in the Security Agreement, mutatis
mutandis, to the extent applicable under the laws of the Province of Quebec (and the laws of Canada in force therein) and to the extent not inconsistent with the terms,
conditions and provisions hereof. 

7.    EVENTS OF DEFAULT

7.1    Each
of the following events constitutes an "Event of Default" hereunder: 

7.1.1    the
failure by the Grantor to pay the Guaranteed Obligations to the CTR Lenders as and when same become due by the Grantor and exigible by the CTR Lenders in accordance with the
terms, conditions and provisions of the CTR Guarantee; or, 

7.1.2    the
failure by the Grantor to comply with any of the provisions of this Deed within fifteen (15) days after notice to the Grantor specifying the nature of such failure. 

8.    REMEDIES IN CASE OF DEFAULT

8.1    Upon
the occurrence of any Event of Default, the Hypothec, Separate Hypothec, security interests and rights granted hereunder in favour of the CTR Lenders shall immediately become
enforceable without further demand or other notice of any kind (other than as may be strictly required by law) and the CTR Lenders shall be entitled to exercise all hypothecary rights, other rights,
remedies and recourses available under law. In addition to the foregoing: 

8.1.1    the
CTR Lenders may immediately take proceedings for the recovery of all or any portion of the Guaranteed Obligations; and 

8.1.2    upon
demand by the CTR Lenders, the Grantor will surrender and abandon the Charged Property, or the part thereof specified by the CTR Lenders, to the CTR Lenders or such Person as
may be designated by the CTR Lenders, or will consent in writing to turn such property over to the CTR Lenders or such Person as may be designated by the CTR Lenders at the time and place specified by
the CTR Lenders. 

8.2    In
the event that the CTR Lenders obtain the surrender of the whole or any portion of the Charged Property and until such time as such Charged Property is restored to the Grantor or,
as regards any portion thereof, the CTR Lenders have concluded a recourse by way of taking in payment, sale by the creditor, sale under judicial authority or otherwise, or in the event that the CTR
Lenders collect any Claims, then, notwithstanding any provision of law to the contrary which may apply as a result of the CTR Lenders having acquired or being deemed to have acquired simple, full or
any other administration of the whole or any portion of the Charged Property: 

8.2.1    the
CTR Lenders will be entitled to generally delegate the whole or any part of the administration of any Charged Property (including without limitation, the exercise of all
discretionary powers) to such Person(s) as the CTR Lenders may designate or re-designate in the CTR Lenders' sole discretion (any such Person being herein referred to as an
"Administrator"); 

10

 

8.2.2    the
CTR Lenders and any Administrator will be entitled to reimbursement of all reasonable costs and expenses (including, without limitation, all reasonable costs, expenses and fees
incurred by any attorneys or other Persons engaged by the CTR Lenders or the Administrator acting reasonably in order to assist in such administration, or any matter pertaining thereto), as well as
all reasonable fees of the CTR Lenders and the Administrator incurred in such administration, all of which may be charged by the CTR Lenders against any fruits, revenues or proceeds of alienation of
the whole or any portion of the Charged Property; 

8.2.3    the
CTR Lenders or the Administrator shall be entitled, under any circumstances and in such manner as the CTR Lenders or the Administrator deem, in their respective discretions,
appropriate, to alienate such Charged Property by onerous title; 

8.2.4    the
CTR Lenders will be entitled to acquire the whole or any portion of any Charged Property alienated by onerous title in the course of any administration thereof; 

8.2.5    in
the event that the CTR Lenders or the Administrator acquire full administration of any Charged Property, neither the CTR Lenders nor the Administrator will be under any
obligation whatsoever to make such Charged Property productive, increase such Charged Property or the value thereof or appropriate such Charged Property to any purpose other than payment of the
Guaranteed Obligations; 

8.2.6    the
CTR Lenders and the Administrator will be entitled to use for their own benefits any information which either of them may obtain by reason of their administration of the whole
or any portion of the Charged Property provided such information is not used in a manner which causes a prejudice or damage to the Grantor; 

8.2.7    the
CTR Lenders and the Administrator will be entitled, whether or not for value, to renounce to any right affecting, benefiting, pertaining to and/or forming part of any Charged
Property administered by either of them; 

8.2.8    neither
the CTR Lenders nor the Administrator will be obliged, in any manner whatsoever, to prepare any inventory of any Charged Property, insure any Charged Property or give any
security for any Charged Property or their administration thereof. Should the CTR Lenders or the Administrator, in their discretions, insure the whole or any portion of any Charged Property, the
reasonable costs and expenses of any insurance shall form part of the costs and expenses referred to in paragraph (b) hereof; 

8.2.9    the
CTR Lenders and the Administrator may change the destination of the whole or any portion of any Charged Property under their administration and will not be bound to continue the
use or operation of any Charged Property under their administration which produces fruits or revenues unless required by law to do so; and/or 

8.2.10    notwithstanding
any provisions of law to the contrary, the CTR Lenders and the Administrator will only be obliged to render an account to the Grantor upon the written request of
the Grantor and once the CTR Lenders or Administrator have determined, to their satisfaction, the details of such account. 

8.3    In
the event that the CTR Lenders exercise their right to become the absolute owner of the Charged Property or any part thereof, the Grantor, concurrently with surrender or at any
time thereafter at the request of the CTR Lenders, will sign a voluntary Deed providing for the CTR Lenders (or any Person directed in writing by the CTR Lenders) to take in payment the Charged
Property or any part thereof. In the event that the Grantor requires the CTR Lenders to sell any such Charged Property, the Grantor acknowledges that the CTR Lenders will not be required to abandon
their recourse of taking in payment unless, before the expiration of the delay to surrender, the CTR Lenders: (i) shall have been furnished with security guaranteeing that the Charged Property
in question will be sold at a sufficiently high price for the CTR Lenders to be paid the amounts secured hereunder in full; (ii) shall have been reimbursed the costs which it has incurred; and
(iii) shall have been advanced all amounts necessary for the sale of the Charged Property in question. 

All
expenditures and improvements made by any holder of the Charged Property and all payments made on account of the Guaranteed Obligations and the accessories thereof will belong to the CTR Lenders
without return or compensation. The CTR Lenders will not be obliged to compensate or indemnify the Grantor or any other Person for any cause whatsoever. 

11

 

8.4    In
the event that the CTR Lenders exercise their right to sell the whole or any portion of the Charged Property by judicial authority or pursuant to a sale by the creditors, the
following will apply: 

8.4.1    such
Charged Property may be sold subject to and upon such terms and conditions (including, without limitation, terms extending credit) by way of one (1) or more sales by
private agreement, call for tenders or public auction or combinations thereof as the CTR Lenders or the Administrator see fit and the CTR Lenders or the Administrator may, at any time, change or
substitute any method of sale for any other method of sale of such Charged Property; and, 

8.4.2    notwithstanding
any provision of law to the contrary, in any call for tenders, the CTR Lenders or Administrator will not be obliged to accept the highest offer or any offer and, in
the event that no offer is accepted, may proceed to sell such Charged Property by any other method. 

9.    REMEDIES CUMULATIVE

9.1    The
different recourses of the CTR Lenders hereunder are cumulative and not alternative. The rights and remedies of the CTR Lenders hereunder are in addition to every other right and
remedy now or hereafter existing in favour of the CTR Lenders, whether by law or otherwise. 

10.    WAIVERS  

10.1    No delay or failure on the part of the CTR Lenders in exercising any right or remedy hereunder shall affect such right or remedy, nor shall any single or
partial exercise hereof preclude any further exercise thereof or the exercise of any other right or remedy. Any waiver by the CTR Lenders of any of their rights or remedies hereunder will be valid
only if express and in writing. No waiver shall be deemed to be or constitute a waiver of any other rights or remedies of the CTR Lenders. In no event will the CTR Lenders' acceptance, after the
Guaranteed Obligations may have become due and payable, of any partial payment, be deemed to alter or affect the CTR Lenders' rights with respect to any subsequent payment or default thereon.
Moreover, should the CTR Lenders grant or tolerate any extension or delay for payment or performance of any obligations of the Grantor, such extension, delay, indulgence or tolerance will not be
deemed an acquiescence by the CTR Lenders in such default or waiver of any of the CTR Lenders' rights and remedies hereunder or in respect of any future default. 

10.2    To
the extent necessary or useful, the parties hereto expressly waive the application of section 32 of the Act Respecting the Special Powers of Legal
Persons (RSQ, c.P.16) and of articles 1310 and 2147 of the Civil Code. 

11.    NATURE OF INDEBTEDNESS AND SECURITY  

11.1    Nothing contained in this Deed will be deemed to derogate from or alter the terms and conditions of any of the Guaranteed Obligations. 

11.2    The
security hereby granted secures and will continue to secure the Guaranteed Obligations a continuing and fluctuating basis and is and will be valid notwithstanding that the whole
or any portion of the prestations in consideration of which the Grantor has undertaken its obligations towards the CTR Lenders have not yet been received and notwithstanding that the whole or any
portion of the Guaranteed Obligations may not yet exist. With respect to any future obligation secured hereby, the Grantor shall be deemed to have obligated itself again as contemplated by
article 2797 of the Civil Code. 

11.3    The
security hereby granted will remain in full force and effect for the full Hypothec Amount and amounts of the additional hypothec and the Separate Hypothec until such time as an
express written discharge is executed by the CTR Lenders and delivered to the Grantor. The hypothecs, security and rights hereby created in favour of the CTR Lenders will not be extinguished, reduced,
novated or otherwise affected by any payments made to or amounts received by the CTR Lenders, directly or indirectly, from the Grantor or any other party or as a result of any insurance indemnities
arising from loss or damage to any of the Charged Property or by reason of the collection of any Claims. 

12

   12.    NATURE OF OBLIGATIONS  

12.1    Every obligation of the Grantor hereunder is and will remain indivisible and the performance thereof in its entirety may be claimed from any and each of the
successors of the Grantor. 

13.    OTHER SECURITY  

13.1    The security created hereunder is in addition to and not in substitution for nor deemed to be substituted by any other security now or hereafter held by or
for the benefit of the CTR Lenders and shall not be diminished or novated or otherwise affected by any other security or any promissory note or other evidence of indebtedness which the CTR Lenders or
any party for the benefit of the CTR Lenders may have or obtain from the Grantor or any other Person, nor shall any other security or note or evidence of indebtedness be diminished or novated or
otherwise affected hereby. 

14.    NOTICE  

14.1    Any notice, request or other communication hereunder to any party hereto in connection with this Deed shall be in writing and given in accordance with the
provisions of the CTR Guarantee at the address of the Grantor set forth in the appearances herein. 

        If
the CTR Lenders are unable to locate the Grantor at the address set forth in the appearances herein, then any such notice or demand may be served upon the Grantor at the Office of the
Clerk of the Superior Court, District of Montreal at which office in such event the Grantor elects domicile for the purpose of this Deed. 

15.    GOVERNING LAW & JURISDICTION  

15.1    This Deed shall be governed by and interpreted in accordance with the laws of the Province of Quebec. The Grantor expressly submits and consents to the
non-exclusive jurisdiction of the Superior
Court, District of Montreal, with respect to any controversy arising out of or relating to this Deed or any supplement hereto or to any transaction in connection therewith. To the extent, however,
that the laws of any other jurisdiction in which the Charged Property is situated govern the validity, perfection or enforcement of the security constituted hereunder, the local laws of such
jurisdiction shall govern those issues. 

16.    INTERPRETATION  

16.1    Any word herein contained in the singular number will include the plural; any word importing any gender will include the masculine, feminine and neuter
genders; any word importing a person will include a corporation, a partnership and any other entity and vice versa. The headings of this Deed are for
convenience of reference only and shall not affect in any manner any of the terms and conditions hereof or the construction or interpretation of this Deed. 

17.    OTHER DOCUMENTS  

17.1    The Grantor undertakes to perform all acts and enter into all documentation which may be useful or necessary or required by the CTR Lenders for purposes of
giving full force and effect to the provisions hereof or to perfect the rights of the CTR Lenders hereunder including, without limitation, the right to recover and collect the Claims and to exercise
its hypothecary remedies with respect thereto. 

18.    SEVERABILITY  

18.1    This Deed shall not be considered as an indivisible whole and every provision of this Deed is and shall be independent of the other and in the event that any
part of this Deed is declared invalid, illegal or unenforceable, then the remaining terms, clauses and provisions of this Deed shall not be affected by such declaration and all of the remaining
clauses of this Deed shall remain valid, binding and enforceable. 

13

 

19.    PRECEDENCE  

19.1    In the event that any provisions of this Deed contradict or are otherwise incapable of being construed in conjunction with the
provisions of the CTR Guarantee, the following will apply:  

19.1.1    the
provisions of the CTR Guarantee shall take precedence over those contained in this Deed; and, 

19.1.2    if
any act of the Grantor is expressly permitted under the CTR Guarantee but is prohibited under this Deed, any such act shall be permitted under the CTR Guarantee and shall be
deemed to be permitted under this Deed; the whole unless as a result thereof the security created hereby or any of the hypothecary remedies of the CTR Lenders hereunder would be in any way diminished
or invalidated, in which case the provisions of this Deed will govern. 

20.    FORMAL DATE  

20.1    This Deed may be referred to as bearing formal date August 22nd, 2005 notwithstanding the actual date of its execution. 

21.    ADDITIONAL DESCRIPTIONS OF PROPERTY  

21.1    Scheduled Intangible Property: 

	(a)
	The
following Patents: 

A.    METHOD AND SYSTEM FOR PROTOCOLS FOR PROVIDING VOICE, DATA AND MULTIMEDIA SERVICES IN A WIRELESS LOCAL LOOP
SYSTEM, REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number

	United States	 	09/085,264	 	6,115,370
	United States	 	09/451,936	 	6,512,751

B.    METHOD AND SYSTEM FOR AN AIR INTERFACE FOR PROVIDING VOICE, DATA AND MULTIMEDIA SERVICES IN A WIRELESS LOCAL LOOP
SYSTEM, REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number

	United States	 	09/451,935	 	6,434,129
	United States	 	09/479,663	 	6,351,456

C.    SYSTEM FOR A BASE STATION FOR PROVIDING VOICE, DATA, AND MULTIMEDIA SERVICES IN A WIRELESS LOCAL LOOP SYSTEM,
REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number

	Taiwan	 	88121360	 	150823

D.    METHOD AND SYSTEM FOR A MICRO-CHANNEL BANK FOR PROVIDING VOICE, DATA AND MULTIMEDIA SERVICES IN A WIRELESS LOCAL LOOP
SYSTEM, REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number

	United States	 	09/085,262	 	6,131,012
	United States	 	09/520,156	 	6,668,174

14

 

E.    RELIABLE ATM MICROWAVE LINK AND NETWORK, REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number
	 	Status

	United States	 	08/388,110	 	US 5,648,969	 	Issued
	Canada	 	2,212,799	 	2,212,799	 	Issued
	Europe	 	96908457.3	 	 	 	Pending
	Israel	 	117,118	 	117,118	 	Issued
	Korea	 	705742/1997	 	405576	 	Issued

F.    BURST-ERROR RESISTANT ATM MICROWAVE LINK AND NETWORK, REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number

	United States	 	08/538,327	 	5,710,756
	Canada	 	2,206,677	 	2,206,677
	Europe	 	96933905.0	 	795212

G.    WIRELESS ATM METROPOLITAN AREA NETWORK, REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number
	 	Status

	United States	 	08/708,593	 	5,936,949	 	Issued
	Canada	 	2,264,808	 	2,264,808	 	Issued
	China	 	97198854.4	 	ZL97198854.4	 	Issued
	Europe	 	97939607.4	 	 	 	Pending
	Israel	 	128810	 	128810	 	Issued
	Japan	 	1997/512743 and 1997/277129	 	 	 	Pending

H.    WIRELESS ATM NETWORK WITH HIGH QUALITY OF SERVICES SCHEDULING, REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number
	 	Status

	United States	 	08/956,256	 	6,157,614	 	Issued
	Europe	 	98955015.7	 	 	 	Published
	Hong Kong	 	01101400.1	 	 	 	Published
	United States	 	09/638,525	 	6,760,305	 	Issued
	United States	 	09/637,822	 	6,654,377	 	Issued
	United States	 	09/637,136	 	6,658,007	 	Issued
	United States	 	09/637,734	 	6,407,992	 	Issued

I.    HIGHLY INTEGRATED PLANAR STACKED MILLIMETER WAVE TRANSCEIVER, REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number
	 	Status

	United States	 	09/908,451	 	 	 	Published

US2003/0027530
	Australia	 	2002300124	 	 	 	Pending
	Canada	 	2,393,890	 	 	 	Pending
	Japan	 	2002/208196	 	 	 	Published

15

 

J.    DIRECTIONAL INDICATOR FOR ANTENNAS, REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number
	 	Status

	United States	 	10/612,758	 	 	 	Published

US2005/0003873

K.    METHOD OF SUPPORTING VOICE-BAND MODEM-TO-MODEM CALLS IN A WIRELESS COMMUNICATION
SYSTEM, REGISTERED AS FOLLOWS:

	Country 
	 	Serial Number
	 	Patent Number
	 	Status

	United States	 	10/620,912	 	 	 	Published

US2005/0014532

16

  

	(b)
	The
following Trademarks, registered as follows: 

	 
	 	 
	 	APPLICATION
	 	REGISTRATION

	TRADEMARK 
	 	Country
	 	No.
	 	Date
	 	No.
	 	Date

	METROFLEX	 	Mexico	 	514,851	 	Nov. 1, 2001	 	753,566	 	June 28, 2002
	SRT & DESIGN	 	Mexico	 	—	 	Jan. 15, 1991	 	395,305	 	—
	SR TELECOM & DESIGN	 	Mexico	 	546,803	 	May 13, 2002	 	754,903	 	July 22, 2002
	SR TELECOM & DESIGN	 	Mexico	 	—	 	May 13, 2002	 	798,821	 	—

	 

	 
	 	 
	 	APPLICATION
	 	REGISTRATION

	TRADEMARK 
	 	Country
	 	Classes
	 	Date
	 	No.
	 	Date

	TRT DESIGN	 	BRAZIL	 	09.20 - 35 - 55	 	April 25, 1976	 	6317626	 	April 25, 1976
	T R T	 	BRAZIL	 	09.20 - 35 - 55	 	April 25, 1976	 	6317618	 	April 25, 1976
	IRT 1500 DESIGN	 	BRAZIL	 	09.35 - 80	 	August 26, 1986	 	511995518	 	August 26, 1986
	IRT 1500 DESIGN	 	BRAZIL	 	38.10	 	May 21, 1985	 	811995500	 	August 26, 1986
	IRT 1500 & DESIGN	 	BRAZIL	 	38.10	 	May 21, 1985	 	811995488	 	August 26, 1986
	IRT 1500 & DESIGN	 	FRANCE	 	9 - 38	 	Dec.14, 1984	 	1292562	 	Dec. 14, 1984
	IRT 1500 & DESIGN	 	FRANCE	 	9 - 38	 	Nov. 23, 1984	 	1290545	 	Nov. 23, 1984
	SWING	 	FRANCE	 	9	 	Oct. 25, 1994	 	94 541 898	 	Oct. 25, 1994
	TRT	 	FRANCE	 	9	 	May 6, 1987	 	1 409 210	 	May 6, 1987
	TRT DESIGN	 	FRANCE	 	9	 	Jan. 15, 1985	 	1 295 892	 	Jan. 15, 1985
	TRT DESIGN	 	CANADA	 	—	 	Feb. 1, 1979	 	253,410	 	Dec. 5, 1980
	TRT DESIGN	 	DENMARK	 	9	 	February 1, 1960	 	VR 1960 01136	 	May 14, 1960
	SWING	 	DENMARK	 	9	 	October 27, 1994	 	VR 04.436 1997	 	October 24, 1997
	IRT 1500 & DESIGN	 	ARGENTINA	 	38	 	March 5, 1986	 	1,196,943	 	March 5, 1986
	TRT DESIGN	 	ARGENTINA	 	6	 	February 15, 1989	 	1 338 962	 	March 28, 1989
	TRT DESIGN	 	ARGENTINA	 	7	 	February 15, 1989	 	1 338 963	 	March 28, 1989
	TRT DESIGN	 	ARGENTINA	 	9	 	February 15, 1989	 	1 338 964	 	March 28, 1989
	TRT DESIGN	 	ARGENTINA	 	11	 	February 15, 1989	 	1 338 965	 	March 28, 1989
	TRT DESIGN	 	ARGENTINA	 	12	 	February 15, 1989	 	1 338 966	 	March 28, 1989
	TRT DESIGN	 	ARGENTINA	 	17	 	February 15, 1989	 	1 338 967	 	March 28, 1989
	IRT 1500	 	ARGENTINA	 	38	 	 	 	1 618 708	 	October 16, 1996
	IRT 1500	 	ARGENTINA	 	38	 	 	 	1 618 707	 	October 16, 1996
	TRT	 	ARGENTINA	 	6	 	 	 	1 741 143	 	June 23, 1999
	TRT	 	ARGENTINA	 	7	 	 	 	1 741 144	 	June 23, 1999
	TRT	 	ARGENTINA	 	9	 	 	 	1 741 145	 	June 23, 1999
	TRT	 	ARGENTINA	 	11	 	 	 	1 741 146	 	June 23, 1999
	TRT	 	ARGENTINA	 	12	 	 	 	1 741 147	 	June 23, 1999
	TRT	 	ARGENTINA	 	17	 	 	 	1 741 148	 	June 23, 1999
	TRT DESIGN	 	VENEZUELA	 	21	 	March 29, 1960	 	40270-F	 	Sept. 5, 1961
	TRT DESIGN	 	UNITED KINGDOM	 	9	 	June 25, 1974	 	1,031,520	 	June 25, 1974
	IRT 1500 & DESIGN	 	UNITED KINGDOM	 	9	 	Dec. 14, 1984	 	1,239,604	 	Dec. 14, 1984
	SWING	 	UNITED KINGDOM	 	9	 	January 20, 1995	 	2,008,331	 	January 20, 1995
	TRT DESIGN	 	UKRAINE	 	9	 	June 18, 1993	 	4923	 	May 16, 1994
	TRT DESIGN	 	SWEDEN	 	9	 	June 2, 1966	 	118,463	 	Dec. 30, 1966
	IRT 1500 & DESIGN	 	SWEDEN	 	9 - 38	 	April 16, 1985	 	204579	 	February 20, 1987
	TRT DESIGN	 	SPAIN	 	64	 	Jan. 24, 1966	 	492,410	 	Nov. 24, 1967
	 	 	 	 	 	 	 	 	 	 	 

17

 

	TRT DESIGN	 	SPAIN	 	63	 	Nov. 24, 1967	 	492,409	 	Nov. 24, 1967
	TRT DESIGN	 	SAUDI ARABIA	 	9	 	Nov. 21, 1978	 	81/75	 	March 10, 1981
	TRT DESIGN	 	RUSSIAN FEDERATION	 	9	 	May 11, 1976	 	57432	 	May 11, 1976
	TRT DESIGN	 	POLAND	 	9	 	May 21, 1966	 	46015	 	Nov. 14, 1966
	TRT DESIGN	 	PHILIPPINES	 	9	 	March 5, 1991	 	59084	 	August 11, 1994
	TRT	 	MADAGASCAR	 	9 - 11 - 17	 	June 23, 1972	 	11978	 	June 23, 1972
	TRT DESIGN	 	NORWAY	 	9	 	June 13, 1966	 	71613	 	March 31, 1967
	TRT DESIGN	 	NEW ZEALAND	 	9	 	May 4, 1976	 	B115505	 	July 12, 1978
	TRT DESIGN	 	MALAYSIA	 	9	 	Nov. 22, 1984	 	84/05474	 	Nov. 22, 1984
	TRT DESIGN	 	LEBANON	 	9	 	July 30, 1977	 	34126	 	July 30, 1977
	TRT DESIGN	 	IRELAND	 	9	 	Dec. 27, 1962	 	66702	 	Dec. 26, 1962
	TRT DESIGN	 	IRAN	 	9	 	April 23, 1960	 	20474	 	April 23, 1960
	TRT DESIGN	 	INDIA	 	9	 	Dec. 6, 1978	 	343461B	 	Dec. 6, 1978
	TRT DESIGN	 	GREECE	 	9	 	August 2, 1966	 	35981	 	August 2, 1966
	IRT 1500 & DESIGN	 	CHINA	 	9	 	—	 	260731	 	August 30, 1986
	IRT 1500 & DESIGN	 	THAILAND	 	9	 	August 19, 1985	 	TM38567	 	August 19, 1985
	IRT 1500 & DESIGN	 	THAILAND	 	9	 	August 19, 1985	 	TM38566	 	August 19, 1985
	IRT 1500 & DESIGN	 	TURKEY	 	9	 	June 4, 1985	 	87062	 	June 4, 1985
	IRT 1500 & DESIGN	 	TURKEY	 	9	 	May 6, 1985	 	85906	 	May 6, 1985
	IRT 1500 & DESIGN	 	KOREA	 	39	 	May 9, 1985	 	126,124	 	May 30, 1986
	IRT 1500 & DESIGN	 	KOREA	 	106	 	May 9, 1985	 	6,079	 	March 21, 1986
	IRT 1500 & DESIGN	 	AUSTRALIA	 	9	 	May 2, 1985	 	426,261	 	May 2, 1985
	IRT 1500 & DESIGN	 	AUSTRALIA	 	37	 	May 2, 1985	 	426,260	 	May 2, 1985
	IRT 1500 & DESIGN	 	AUSTRALIA	 	37	 	May 2, 1985	 	426,259	 	May 2, 1985
	IRT 1500 & DESIGN	 	AUSTRALIA	 	9	 	May 2, 1985	 	426,258	 	May 2, 1985
	TRT DESIGN	 	AUSTRALIA	 	9	 	May 4, 1976	 	296,526	 	May 4, 1976
	IRT 1500 & DESIGN	 	INTERNATIONAL REGISTER	 	9 - 38	 	May 10, 1985	 	492,873	 	May 10, 1985
	SWING	 	INTERNATIONAL REGISTER	 	9	 	—	 	633327	 	March 20, 1995
	T.R.T.	 	BULGARIA	 	9	 	May 4, 1976	 	10663	 	May 4, 1976
	TRT DESIGN	 	CHILE	 	9	 	Feb. 12, 1996	 	462,152	 	June 5, 1996
	TRT DESIGN	 	ESTONIA	 	9	 	Nov. 2, 1993	 	11418	 	June 6, 1994
	TRT DESIGN	 	FINLAND	 	9	 	May 31, 1966	 	50142	 	May 5, 1967

21.2    Scheduled Securities: 

21.2.1    All
of the issued and outstanding shares or other Securities (of all classes and categories) held and/or owned by the Grantor in the capital stocks of each of the
Subsidiaries. 

22.    INTERCREDITOR AGREEMENT  

22.1    The Hypothec and the Separate Hypothec created herein shall rank: 

22.1.1    after
the "Hypothec" and the "Separate Hypothec" in favour of BNY Trust Company of Canada/Compagnie Trust BNY Canada, as defined in and created by that ceratin "Deed of Hypothec to 

18

 

Secure
Bonds" executed before the undersigned Notary under his Minute number 7693 and published by registration of notices thereof in the Register of Personal and Movable Real Rights of
the Province of Quebec under numbers 05-0277642-0001 and 05-0277642-0002 and registration at length in the Land Register for
the registration division of Montreal under number 12302109; and, 

22.1.2    pari passu with the "Hypothec" and the "Separate Hypothec" in favour of Computershare Trust Company of
Canada/Société de Fiducie Computershare du Canada as "Fondé de Pouvoir" of the "Debentureholders", all as defined in and created by that certain "Deed of
Hypothec to Secure Debentures" executed or to be executed forthwith before the undersigned Notary, to be published forthwith, 

all
in accordance with the terms, conditions and provisions of the Intercreditor Agreement, which Intercreditor Agreement shall be deemed to form part of the present Deed. 

22.2    To
the extent that the Intercreditor Agreement is and remains in force in accordance with its terms, conditions and provisions, the Hypothec, Separate Hypothec, security interests
and rights herein created in favour of the CTR Lenders and their enforcement shall be subject to and governed by the terms, conditions and provisions of the Intercreditor Agreement. 

23.    FORMAL DATE  

23.1    Notwithstanding the date of execution hereof, this Deed may be referred to as bearing formal date August 22nd, 2005. 

24.    LANGUAGE  

24.1    The parties hereby confirm their express wish that this Deed and all related documents be drawn up in English, but without prejudice to any such documents
which may from time to time be drawn up in French only, or in both English and French. 

        Les
parties confirment leur volonté expresse que le présent acte et tous les documents connexes soient rédigés en anglais,
mais sans préjudice cependant à tous tels documents qui pourront à l'occasion être rédigés en
français seulement, ou à la fois en anglais et en français. 

WHEREOF ACTE:  

DONE AND PASSED at the City of Montreal, Province of Quebec on the day, month and year hereinabove first mentioned and of record
under the number of the original Minutes of the undersigned Notary. 

19

 

AND AFTER DUE READING HEREOF, the parties have signed with and in the presence of the undersigned Notary. 

	 	 	SR TELECOM INC.
	

 	
 	
Per:	

/s/  DAVID L. ADAMS      
 Name:    David L. Adams

Title:      Senior Vice-President, Finance, Chief Financial Officer and Secretary
	

 	
 	
EXPORT DEVELOPMENT CANADA/

EXPORTATION ET DEVELOPPEMENT CANADA
	

 	
 	
Per:	

/s/  KEYVAN NASSIRY      
 Name:    Keyvan Nassiry

Title:      duly authorized representative
	

 	
 	
INTER-AMERICAN DEVELOPMENT BANK
	

 	
 	
Per:	

/s/  KEYVAN NASSIRY      
 Name:    Keyvan Nassiry

Title:      duly authorized representative
	

 	
 	

Per:	

/s/  ROBERT ALAIN      
 Name:    Robert Alain

Title:      Notary

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Exhibit 10.23  

 
 

SECURITY AGREEMENT

Dated
as of August 22, 2005 

Between

SR TELECOM INC.

and

EXPORT DEVELOPMENT CANADA

and 

INTER-AMERICAN DEVELOPMENT BANK

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	 SECTION 1 — DEFINED TERMS	 	1
	 	
 1.1	
 	

Terms Defined in PPSA	
 	

1
	 	1.2	 	Other Defined Terms	 	1
	
 SECTION 2 — SECURITY INTEREST	
 	

3
	 	2.1	 	Grant of Security Interest	 	3
	 	2.2	 	Set-Off	 	4
	 	2.3	 	Exception to Last Day and Contractual Rights	 	4
	 	2.4	 	Liability for Deficiency	 	4
	
 SECTION 3 — THE CTR LENDERS' RIGHTS; LIMITATIONS ON THE CTR LENDERS' OBLIGATIONS	
 	

4
	 	3.1	 	Continued Liability of the Company under Licences, etc	 	4
	 	3.2	 	Notice to Account Debtors	 	4
	 	3.3	 	Verification of Accounts/Inventory	 	5
	
 SECTION 4 — REPRESENTATIONS AND WARRANTIES OF THE COMPANY	
 	

5
	 	4.1	 	Representations and Warranties	 	5
	
 SECTION 5 — COVENANTS OF THE COMPANY	
 	

7
	 	5.1	 	Covenants	 	7
	
 SECTION 6 — THE CTR LENDERS' APPOINTMENT AS ATTORNEY-IN-FACT	
 	

8
	
 SECTION 7 — REMEDIES	
 	

9
	 	7.1	 	Appointment of Receiver	 	9
	 	7.2	 	Exercise of Rights by the CTR Lenders	 	9
	 	7.3	 	Taking Possession of Collateral	 	9
	 	7.4	 	Rights and Remedies under PPSA	 	9
	 	7.5	 	Cooperation of the Company with respect to Taking Possession	 	10
	 	7.6	 	Costs	 	10
	 	7.7	 	Notice of Sale	 	10
	 	7.8	 	Intellectual Property Licence	 	10
	 	7.9	 	Inter-Creditor Agreement	 	10
	
 SECTION 8 — REINSTATEMENT	
 	

10

 
TABLE OF CONTENTS (cont'd)  

	 
	 	 
	 	Page

	 SECTION 9 — MISCELLANEOUS	 	10
	 	
 9.1	
 	

Performance by the CTR Lenders	
 	

10
	 	9.2	 	Extensions, etc	 	10
	 	9.3	 	No Waiver	 	11
	 	9.4	 	Waiver of Protest	 	11
	 	9.5	 	Assignment and Enurement	 	11
	 	9.6	 	Amendment	 	11
	 	9.7	 	Notices	 	11
	 	9.8	 	Remedies Cumulative	 	11
	 	9.9	 	Headings	 	11
	 	9.10	 	Number and Gender	 	11
	 	9.11	 	Severability	 	11
	 	9.12	 	Extensions	 	12
	 	9.13	 	Attachment	 	12
	 	9.14	 	Amalgamation	 	12
	 	9.15	 	Governing Law; Consent to Jurisdiction	 	12
	 	9.16	 	Judgment Currency	 	12
	 	9.17	 	Counterparts	 	13
	 	9.18	 	No Strict Construction	 	13
	 	9.19	 	Advice of Counsel	 	13
	 	9.20	 	Limitation on the CTR Lenders' Duty in Respect of Collateral	 	13
	 	9.21	 	Paramountcy	 	13
	 	9.22	 	Termination	 	13
	 	9.23	 	Copy	 	13

SCHEDULES  

Schedule 4.1(5) — Offices
and Locations of Collateral and Records Concerning Collateral 

Schedule 4.1(8) — Intellectual
Property 

EXHIBITS  

Exhibit A — Power
of Attorney 

2

 
 

SECURITY AGREEMENT    
    

        This Security Agreement is dated as of August 22, 2005, between 

SR TELECOM INC., a Canadian corporation (the "Company") 

and

EXPORT DEVELOPMENT CANADA, a corporation established by the Export Development Act
("EDC") 

and 

INTER-AMERICAN DEVELOPMENT BANK, an international organization established by the Articles of Agreement among its member countries
("IADB") 

RECITALS  

A.    Pursuant
to the CTR Guarantee, the Company has obligations to and in favour of the CTR Lenders which obligations are defined therein as the "Guaranteed Obligations"; and 

B.    The
Company desires to enter into this Security Agreement as security for the Guaranteed Obligations to the extent of the maximum amount defined in the CTR Guarantee as the "CTR
Guarantee Maximum". 

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: 

SECTION 1 — DEFINED TERMS  

        1.1    Terms Defined in PPSA.    The terms
"Accounts", "Goods", "Chattel Paper",
"Document of Title", "Equipment", "Instrument",
"Intangible", "Inventory", "Security",
"Proceeds", "Accession", "Money",
"financing statement" and "financing change statement" whenever used herein shall be interpreted in
accordance with their respective meanings when used in the Personal Property Security Act (Ontario), as amended from time to time, which Act, including
amendments thereto and any Act substituted therefor and amendments thereto is herein referred to as the "PPSA". The term
"Goods" when used herein shall not include "consumer goods" of the Company as that term is defined in
the PPSA. Any reference herein to "Collateral" shall, unless the context otherwise requires, be deemed a reference to
"Collateral or any part thereof". The term "Proceeds" whenever used herein and interpreted as above
shall by way of example include trade-ins, Equipment, cash, bank accounts, notes, Chattel Paper, Goods, Contract rights, Accounts and any other personal property or obligation received
when Collateral or Proceeds are sold, exchanged, collected or otherwise disposed of. 

        1.2    Other Defined Terms.    Subject to
Section 1.1, all capitalized terms used but not otherwise defined herein have the meanings given to them in the CTR Guarantee except that: 

	(1)
	"Account Debtor" means any Person who may become obligated to the Company under, with respect to, or on account of, an Account;

	(2)
	"Contracts" means all material agreements or contracts of the Company entered into from time to time;

	(3)
	Copyright License" means any and all rights now owned or hereafter acquired by the Company under any written agreement granting any
right to use any Copyright or Copyright registration;

	(4)
	"Copyrights" means all of the following now owned or hereafter acquired by the Company: (a) all copyrights and general
intangibles of like nature (whether registered or unregistered), now owned or existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the Canadian Copyright Office or in any similar office or agency in any other country or any political subdivision thereof, and
(b) all reissues, extensions or renewals thereof;

	(5)
	"Credit Agreement" means the credit agreement dated as of May 19, 2005 between the Company, BNY Trust Company of Canada, as
administrative agent and collateral agent, and the lenders named therein from time to time;

	(6)
	"CTR" means Communicación y Telefonía Rural, S.A., a sociedad anônoima duly
organized and validly existing under the laws of Chile; 

 
	(7)
	"CTR Guarantee" means the guarantee dated as of May 19, 2005 given by the Company in favour of the CTR Lenders with respect to
the Guaranteed Obligations, as the same may be hereafter amended, supplemented, revised, replaced or restated from time to time;

	(8)
	"CTR Lenders" means collectively, EDC and IADB;

	(9)
	"Default" means any event, which with the passage of time or notice or both, would become an Event of Default;

	(10)
	"Event of Default" means each of the following events: (i) the failure by the Company to pay the Guaranteed Obligations to the
CTR Lenders as and when same become due by the Company and exigible by the CTR Lenders in accordance with the terms, conditions and provisions of the CTR Guarantee; or (ii) the failure by the
Company to comply with any provisions of this Security Agreement within fifteen (15) days after notice to the Company specifying the nature of such failure;

	(11)
	"Guaranteed Obligations" has the meaning ascribed thereto in the CTR Guarantee, up to the "CTR Guarantee Maximum" as defined in the
CTR Guarantee;

	(12)
	"Intellectual Property" means collectively: (i) any and all Copyright Licence, Patent Licence, Trademark Licence or other
licence of rights or interests now held or hereafter acquired by the Company, Patents, Copyrights, Trademarks, trade secrets and customer lists; and (ii) all incorporeal property now owned or
hereafter acquired by the Company or its interest therein including, without limitation, the Scheduled Intellectual Property, and all patents and patents pending, registered and unregistered trade
marks, trade or brand names, service marks, copyrights, industrial designs, formulae, processes, trade secrets, goodwill, contractual rights, licences and permits;

	(13)
	"Inter-Creditor Agreement" means the inter-creditor agreement dated as of August 22, 2005 between the Company, BNY Trust
Company of Canada, as agent for certain lenders under the Credit Agreement, Computershare Trust Company of Canada, as trustee for the holders of convertible secured debentures issued by the Company,
and the CTR Lenders;

	(14)
	"Lien" means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, trust (actual or deemed), easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or
title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a
security interest under the PPSA, any publication effecting any hypothec, security interest or right under the Civil Code or comparable law of any
jurisdiction);

	(15)
	"Licenses" means any Copyright Licence, Patent Licence, Trademark Licence or other licence of rights or interests now held or
hereafter acquired by the Company;

	(16)
	"Patent License" means rights under any written agreement now owned or hereafter acquired by the Company granting any right with
respect to any invention on which a Patent is in existence;

	(17)
	"Patents" means all of the following in which the Company now holds or hereafter acquires any interest: (a) all letters patent
of invention and all applications for letters patent, all industrial designs, design patents and all registrations and recordings thereof, including registrations, recordings and applications in the
Canadian Patent and Trademark Office, Canadian Designs Office or in any similar office or agency in any country or political subdivision thereof, and (b) all reissues, continuations,
continuations-in-part or extensions thereof;

	(18)
	"Permitted Liens" means all existing security interests created pursuant to or permitted under the Credit Agreement, the Trust
Indenture or the Subordination Pledge (as defined in the Inter-Creditor Agreement) and instruments related thereto;

	(19)
	"Scheduled Intellectual Property" means any property listed in Schedule 4.1(8) hereto;

	(20)
	"Security Agreement" means this security agreement and all schedules and exhibits attached hereto, as the same may be amended,
restated, modified or supplemented from time to time; 

2

 
	(21)
	"Trademark License" means rights under any written agreement now owned or hereafter acquired by the Company granting any right to use
any Trademark;

	(22)
	"Trademarks" means all of the following now owned or hereafter acquired by the Company (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general
intangibles of like nature (whether registered or unregistered), all registrations and recordings thereof, and all applications in connection therewith, including registrations, recordings and
applications in the Canadian Trade-marks Office or in any similar office in any country or any political subdivision thereof; (b) all reissues, extensions or renewals thereof; and
(c) all goodwill associated with or symbolized by any of the foregoing; and

	(23)
	"Trust Indenture" means the trust indenture dated as of August 22, 2005 between the Company and Computershare Trust Company of
Canada for the benefit of debentureholders named therein. 

All
uses of the words "hereto", "herein", "hereof, "hereby" and "hereunder" and similar expressions refer to this Security Agreement and not to any particular section or portion of it. All references
to Persons herein shall include their respective successors and assigns. 

SECTION 2 — SECURITY INTEREST  

        2.1    Grant of Security Interest.    As continuing collateral
security for the due payment and performance by the Company of all of the Guaranteed Obligations, the Company hereby grants to the CTR Lenders, a continuing security interest in, a lien upon, and a
right of set-off against, and hereby assigns, conveys, mortgages, pledges and transfers to the CTR Lenders, as security (collectively, the "Security
Interest") the undertaking of the Company and all of the Company's present and after acquired real and personal property and assets of whatever kind and wherever situated
including, without limitation, in all Goods (including all parts, accessories, attachments, special tools, additions, substitutions, replacements for and accessions thereto), Chattel Paper, Documents
of Title (whether negotiable or not), Instruments, Intangibles, Money and Securities now owned or hereafter owned or acquired by or on behalf of the Company (including such as may be returned to or
repossessed by the Company and including under any trade names, styles or derivations thereof) and in all Proceeds and renewals thereof, accretions thereto and substitutions therefor, and including,
without limitation, all of the following now or hereafter owned or consigned by or to, or leased from or to, or otherwise acquired by or on behalf of the Company: 

	(1)
	all
Inventory of whatever kind and wherever situated;

	(2)
	all
Equipment (other than Inventory) of whatever kind and wherever situated, including, without limitation, all machinery, tools, apparatus, plant, furniture, fixtures and vehicles of
whatsoever nature or kind;

	(3)
	all
Accounts, including book debts and generally all debts, dues, claims, choses in action and demands of every nature and kind howsoever arising or secured including letters of
credit and advances of credit, which are now due, owing or accruing or growing due to or owned by or which may hereafter become due, owing or accruing or growing due to or owned by the Company
("Debts");

	(4)
	all
deeds, documents, writings, papers, books of account and other books and records relating to or being records of Debts, Chattel Paper or Documents of Title or by which such are or
may hereafter be secured, evidenced, acknowledged or made payable;

	(5)
	all
Money, cash or cash equivalents;

	(6)
	all
contractual rights and insurance claims and Contracts;

	(7)
	all
deposit and other bank accounts and all deposits therein;

	(8)
	all
Intellectual Property (provided that, notwithstanding any provision to the contrary herein, the grant of security hereunder on all Trademarks of the Company shall be only the
grant of a security interest therein and shall not be an assignment, conveyance, mortgage, pledge or transfer thereof); and

	(9)
	all
Proceeds of any of the foregoing. 

3

 

The
foregoing undertaking and property, other than the property excluded under Section 2.3 are collectively referred to as the "Collateral". 

        2.2    Set-Off.    In addition, to secure the prompt and
complete payment, performance and observance of the Guaranteed Obligations, the Company hereby grants to the CTR Lenders, a right of set-off against the property and assets of the Company
held by the CTR Lenders, consisting of property and assets described above in Section 2.1 now or hereafter in the possession or custody of or in transit to the CTR Lenders, for any purpose,
including safekeeping, collection or pledge, for the account of the Company, or as to which the Company may have any right or power. 

        2.3    Exception to Last Day and Contractual Rights.    The Security
Interest granted hereby shall not extend or apply to, and Collateral shall not include, the last day of the term of any lease of real property or agreement therefor but upon the enforcement of the
Security Interest the Company shall stand possessed of such last day in trust to assign the same to any Person acquiring such term. The Security Interest granted hereby does not, and shall not extend
to, and Collateral shall not include, any agreement, right, franchise, license or permit to which the Company is a party or of which the Company has the benefit
(the "contractual rights"), to the extent that the creation of the Security Interest therein would constitute a breach of the terms of or permit
any Person to terminate the contractual rights or otherwise would be in contravention of applicable laws and regulations, but shall (unless and to the extent such contractual rights contain an
enforceable prohibition against the creation of a security interest in Accounts or the creation of a security interest in Accounts is otherwise prohibited by applicable law and regulations), include
all Accounts arising thereunder or related thereto and shall, in any event, extend to the proceeds thereof. To the extent that the Security Interest does not extend to any contractual rights or any
Account arising thereunder or related thereto, the Company shall hold its interest therein in trust for the benefit of, and shall assign such contractual rights to the CTR Lenders forthwith upon
obtaining the consent (using its commercially reasonable efforts) of the other party thereto. 

        2.4    Liability for Deficiency.    If the Collateral is realized upon
and the Security Interest in the Collateral is not sufficient to satisfy all Guaranteed Obligations, the Company acknowledges and agrees that, subject to the provisions of the PPSA, the Company shall
continue to be liable for any Guaranteed Obligations remaining outstanding under the CTR Guarantee and the CTR Lenders shall be entitled to pursue full payment thereof in satisfaction of the CTR
Guarantee. 

SECTION 3 — THE CTR LENDERS' RIGHTS; LIMITATIONS ON THE CTR LENDERS' OBLIGATIONS  

        3.1    Continued Liability of the Company under Licences, etc.    It
is expressly agreed by the Company that, anything herein to the contrary notwithstanding, the Company shall remain liable under each of its Contracts and each of its Licences to observe and perform
all the conditions and obligations to be observed and performed by it thereunder. The CTR Lenders shall not have any obligation or liability under any Contract or Licence by reason of or arising out
of this Security Agreement or the granting herein of a Security Interest therein or the receipt by the CTR Lenders of any payment relating to any Contract or Licence pursuant hereto. The CTR Lenders
shall not be required or obligated in any manner to perform or fulfill any of the obligations of the Company under or pursuant to any Contract or Licence, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by them or the sufficiency of any performance by any party under any Contract or Licence, or to present or file any claims, or to
take any action to collect or enforce any performance or the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times. 

        3.2    Notice to Account Debtors.    If a Default or an Event of
Default shall have occurred and be continuing, the CTR Lenders may, in their discretion, at any time without prior notice to the Company, notify any Account Debtors (including, without limitation, the
Company's subsidiaries) obligated under any Account of the Company, parties to any Contracts of the Company and obligors in respect of Instruments and Chattel Paper, that such Accounts and the right,
title and interest of the Company in and under such Contracts, Instruments and Chattel Paper have been assigned to the CTR Lenders, and notify any such Account Debtors, such parties to any Contracts
of the Company and such obligors that payments shall be made directly to the CTR Lenders. Upon such notification, the Company shall cause each such Person notified to agree that it shall immediately
make all payments with respect to such Accounts or obligations directly to the CTR Lenders. If a Default or an Event of Default shall have occurred and be continuing, upon the request of the CTR
Lenders (in their 

4

 

discretion),
the Company shall so notify such Account Debtors, parties to Contracts and obligors in respect of Instruments and Chattel Paper. The Company acknowledges that any payments on or other
proceeds of Collateral received by the Company from such Account Debtors, parties to Contracts or obligors, whether before or after notification of the Security Interest to such Account Debtors,
parties to Contracts or obligors and whether before or after a Default or an Event of Default, shall be received and held by the Company in trust for the CTR Lenders and shall be deposited into a bank
account pursuant to the terms of the Inter-Creditor Agreement or as otherwise agreed to in writing by the CTR Lenders. 

        3.3    Verification of Accounts/Inventory.    After the occurrence of
an Event of Default and at any time while it is continuing, the CTR Lenders may, in their own name or in the name of the Company communicate with Account Debtors, parties to Contracts, obligors in
respect of Instruments and obligors in respect of Chattel Paper to verify with such Persons, to their satisfaction, the existence, amount and terms of any such Accounts, Contracts, Instruments or
Chattel Paper. If an Event of Default shall have occurred and be continuing, the Company, at its own expense, shall cause the independent chartered accountants then
engaged by the Company to prepare and deliver to the CTR Lenders at any time and from time to time promptly upon their request in their own discretion the following reports with respect to the
Company: (1) a reconciliation of all Accounts of the Company and its subsidiaries; (2) an aging of all Accounts of the Company and its subsidiaries; (3) trial balances; and
(4) a test verification of such Accounts as the CTR Lenders may request in their own discretion. The Company, at its own expense, shall deliver to the CTR Lenders the results of each physical
verification, if any, which the Company may in its discretion have made, or caused any other Person to have made on its behalf, of all or any portion of its Inventory. 

SECTION 4 — REPRESENTATIONS AND WARRANTIES OF THE COMPANY  

        4.1    Representations and Warranties.    The Company represents and
warrants to the CTR Lenders that: 

	(1)
	the
Company is the sole beneficial or leasehold owner of each item of Collateral owned or leased by it in which it purports to grant the Security Interest hereunder, and has good and
marketable title thereto free and clear of any and all Liens other than Permitted Liens;

	(2)
	no
effective security agreement, financing statement, financing change statement, equivalent security or Lien instrument covering all or any part of the Collateral is on file or of
record in any public office, except such as may have been filed (a) in favour of the CTR Lenders pursuant to this Security Agreement and (b) in connection with any other Permitted Liens;

	(3)
	this
Security Agreement is effective to create a valid and continuing Security Interest in, and upon the filing of the appropriate financing statements, a perfected Security Interest
in favour of the CTR Lenders, in the Collateral. Such Security Interest is prior to all other Liens except Permitted Liens, and is enforceable as such as against any and all creditors of and
purchasers from the Company (other than purchasers of Goods in the ordinary course of business). All action by the Company necessary or desirable to protect and perfect the Security Interest on each
item of the Collateral has been duly taken;

	(4)
	all
Collateral consisting of Intellectual Property applications and registrations is valid and in good standing and the Company is the owner or the authorized licencee, as the case
may be, of the applications and registrations;

	(5)
	Schedule 4.1(5) hereto sets
out the Company's chief executive office, principal place of business, domicile (for purposes of
the Quebec Civil Code), corporate offices, all warehouses and premises where Collateral is stored or located (excluding Collateral in transit, with repairers or with customers), and the locations of
all of its books and records concerning the Collateral;

	(6)
	with
respect to the Accounts, except as specifically disclosed to the CTR Lenders (a) they represent bona fide sales of Goods or
rendering of services to Account Debtors in the ordinary course of the Company's business and are not evidenced by a judgment, Instrument or Chattel Paper; (b) there are no
set-offs, claims or disputes existing or asserted with respect thereto, other than those which have been provided for in the Company's reports delivered to the CTR Lenders or which arise
in the ordinary course of its business, and the Company has not made any agreement with any Account Debtor for any extension of time for the payment thereof, any compromise or settlement for less than
the full amount thereof, any release of any 

5

 

Account
Debtor from liability therefor, or any deduction therefrom except a discount or allowance allowed by the Company in the ordinary course of its business for prompt payment and disclosed to the
CTR Lenders; (c) to the Company's knowledge, there are no facts, events or occurrences which in any way impair the validity or enforceability thereof or could reasonably be expected to reduce
the amount payable thereunder as shown on the Company's books and records and any invoices, statements and reports delivered to the CTR Lenders with respect thereto, other than matters disclosed to
the CTR Lenders which are customary allowances for doubtful accounts; (d) the Company has not received any notice of proceedings or actions which are threatened or pending against any Account
Debtor which might result in any adverse change in such Account Debtor's financial condition; (e) the Company does not have Accounts or other amounts owing to it exceeding $100,000 in aggregate
from Account Debtors located in any jurisdiction other than Quebec, except as may be disclosed in writing by the Company to the CTR Lenders after the date of this Agreement (and the Company
shall promptly provide such written disclosure to the CTR Lenders); and (f) the Company has no knowledge that any Account Debtor owing more than $100,000 in the aggregate to the Company is
unable generally to pay its debts as they become due, except as disclosed to the CTR Lenders. Further, with respect to the Accounts (i) the amounts shown on such records and all invoices,
statements and reports which may be delivered to the CTR Lenders with respect thereto are actually and absolutely owing to the Company as indicated thereon and are not in any way contingent;
(ii) no payments have been or shall be made thereon except payments immediately delivered to the bank accounts as required pursuant to the terms of the Inter-Creditor Agreement or as otherwise
agreed to in writing by the CTR Lenders; and (iii) to the Company's knowledge, all Account Debtors have the capacity to contract; 

	(7)
	with
respect to any Inventory scheduled or listed on the most recent reports delivered to the CTR Lenders, if any, (a) such Inventory (excluding Inventory in transit, with
repairers or with customers) is located at one of the Company's locations set forth on Schedule 4.1(5) hereto, (b) no Inventory having a value in
excess of $100,000 in the aggregate is now, or shall at any time or times hereafter be stored at any other location without the CTR Lenders' prior consent, and if the CTR Lenders give such consent
(in their discretion), the Company will concurrently therewith obtain, bailee, landlord and mortgagee agreements with respect to such locations, (c) the Company has good, indefeasible
and marketable title to such Inventory and such Inventory is not subject to any security interest or other Lien whatsoever except for the Security Interest granted to the CTR Lenders, and except for
Permitted Liens, (d) except as specifically disclosed in the most recent reports delivered to the CTR Lenders, such Inventory is of good and merchantable quality, free from all defects and is
not excess, obsolete, unsaleable, shopworn, seconds, damaged or unfit for sale; (e) such property and all other Collateral are not subject to any licensing, patent, royalty, trademark, trade
name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Collateral, except as disclosed to the CTR Lenders and, then, in
respect of which the Company has delivered to the CTR Lenders consents in form and substance satisfactory to the CTR Lenders duly executed by such third parties, or the payment of any monies to any
third party as a precondition of such sale or other disposition, except as disclosed to the CTR Lenders in writing and, then, in respect of which the Company has delivered to the CTR Lenders waivers
in form and substance satisfactory to the CTR Lenders duly executed by such third parties, and (f) the completion of manufacture, sale or other disposition of such property by the CTR Lenders
following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any Contract to which such property is subject; and

	(8)
	the
Company does not have any interest in, or title to, any Intellectual Property except as set forth in Schedule 4.1(8) hereto. To the
extent permitted by applicable law, this Security Agreement is effective to create a valid and continuing security interest and, upon filing of this Security Agreement with the appropriate
governmental offices, perfected security interests in favour of the CTR Lenders, in the Company's Intellectual Property and such perfected security interests are enforceable as such as against any and
all creditors of and purchasers from the Company. Upon filing of this Security Agreement with the appropriate governmental offices and the filing of appropriate financing statements, all action
necessary or desirable to protect and perfect the CTR Lenders' security interest in the Company's Intellectual Property shall have been duly taken. 

6

 

SECTION 5 — COVENANTS OF THE COMPANY  

        5.1    Covenants.    The Company covenants and agrees with the CTR
Lenders that from and after the date of this Security Agreement and until the CTR Guarantee has been released by the CTR Lenders: 

	(1)
	Further Assurances; Pledge of Instruments.    At any time and from time to time, upon the written request of the CTR Lenders
(in their discretion) and at the sole expense of the Company, the Company shall promptly and duly execute and deliver any and all such further instruments and documents and take such further
actions as the CTR Lenders may deem desirable to obtain the full benefits of this Security Agreement and of the rights and powers herein granted, including, but subject to the prior rights of holders
of Permitted Liens and to the extent not inconsistent with those rights: (a) delivering copies of all statements of accounts, bills, invoices and books of account relating to Accounts and all
records, ledgers, reports, correspondence, schedules, documents, statements, lists and other writings relating to the Collateral for the purpose of inspecting, auditing or copying the same;
(b) using commercially reasonable efforts to secure all consents and approvals necessary or appropriate for the assignment to or for the benefit of the CTR Lenders, of any Licence or Contract
held by the Company or in which the Company has any rights not heretofore assigned; (c) filing any financing statements and financing change statements under the PPSA (or other
applicable personal property security laws) with respect to the Security Interest granted hereunder or under any other document or agreement executed and delivered in connection with the CTR
Guarantee; (d) transferring Collateral to the CTR Lenders' possession if such Collateral consists of Chattel Paper, Instruments or Securities in any case having a value in excess of $50,000 or
if a Security Interest in such Collateral can be perfected only by possession, or if requested by the CTR Lenders (in their discretion); and (e) obtaining, or using commercially
reasonable efforts to obtain, waivers of Liens, if any exist, from landlords, warehousemen and mortgagees. The Company also hereby authorizes the CTR Lenders to file any such financing or financing
change statements without the signature of the Company to the extent permitted by applicable law. If any amount payable under or in connection with any of the Collateral is or shall become evidenced
by any Instrument, at the request of the CTR Lenders (in their discretion), but subject to the prior rights of holders of Permitted Liens and to the extent not inconsistent with those rights,
such Instrument, other than cheques and notes received in the ordinary course of business, shall be duly endorsed in a manner satisfactory to the CTR Lenders immediately upon the Company's receipt
thereof.

	(2)
	Maintenance of Records.    The Company shall keep and maintain, at its own cost and expense, satisfactory and complete
records of the Collateral, including a record of any and all payments received and any and all credits granted with respect to the Collateral and all other dealings with the Collateral. All Chattel
Paper shall be marked with the following legend: "This writing and the obligations evidenced or secured hereby are subject to the security interest of Export Development Canada and Inter-American
Development Bank."

	(3)
	Covenants Regarding Patent, Trademark and Copyright Collateral.

	(a)
	The
Company shall notify the CTR Lenders immediately if it knows or has reason to know that any application or registration relating to any Intellectual Property (now or
hereafter existing) material to the operation of its business or to the CTR Lenders exercising any of their rights and remedies in respect of the Collateral may become abandoned, or of any adverse
determination or development regarding the Company's ownership of any Intellectual Property, its right to register the same, or to keep and maintain the same to the extent same is material to the
Company's business or to the CTR Lenders exercising any of their rights and remedies in respect of the Collateral.

	(b)
	In
no event shall the Company, either directly or through any agent, employee, licencee or designee, file an application for the registration of any Intellectual Property in respect
of the operation of its business with any office or agency without giving the CTR Lenders prior written notice thereof, and, upon request of the CTR Lenders, the Company shall execute and deliver any
and all security agreements, as the CTR Lenders may request (in their discretion) to evidence the CTR Lenders' security interest in such Intellectual Property, and the Intangibles of the
Company relating thereto or represented thereby.

	(c)
	The
Company shall take all actions necessary or requested by the CTR Lenders (in their discretion) to maintain and pursue each application, to obtain the relevant registration
and to maintain the 

7

 

registration
of Intellectual Property (now or hereafter existing) which are material to the operation of its business or to the CTR Lenders exercising any of their rights and remedies in
respect of the Collateral, including all filings. 

	(d)
	In
the event that any of the Intellectual Property, which is material to the operation of the Company's business or to the CTR Lenders exercising any of their rights and remedies in
respect of the Collateral is infringed upon, or misappropriated or diluted by a third party, the Company shall notify the CTR Lenders promptly after the Company learns thereof. The Company shall,
unless it shall reasonably determine that such Intellectual Property is in no way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and
to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the CTR Lenders request (in their discretion) to protect such
Intellectual Property.

	(4)
	Indemnification.    In any suit, proceeding or action brought by the CTR Lenders (in their discretion) relating to any
Account, Chattel Paper, Contract, Document of Title, Intangible or Instrument for any sum owing thereunder or to enforce any provision of any Account, Chattel Paper, Contract, Document of Title,
Intangible or Instrument, the Company will save, indemnify and keep the CTR Lenders harmless from and against all expense (including reasonable legal fees and other legal expenses), loss or damage
suffered by reason of any defense, set-off, counterclaim, recoupment or reduction of liability whatsoever of the obligor thereunder, arising out of a breach by the Company of any
obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to, or in favour of, such obligor or its successors from the Company, except in the case of the
CTR Lenders, to the extent such expense, loss, or damage is attributable solely to the gross negligence or willful misconduct of the CTR Lenders as finally determined by a court of competent
jurisdiction. All such obligations of the Company shall be and remain enforceable against and only against the Company and shall not be enforceable against the CTR Lenders.

	(5)
	Compliance with Terms of Accounts, etc.    In all material respects, the Company will perform and comply with all obligations
in respect of its Accounts, Chattel Paper, Contracts and Licences and all other agreements to which it is a party or by which it is bound relating to the Collateral.

	(6)
	Limitation on Liens on Collateral.    Except as permitted by the provisions of the Trust Indenture as of the date hereof, the
Company will not create, permit or suffer to exist, and the Company will defend the Collateral against, and take such other action as is necessary to remove, any Lien on the Collateral except
Permitted Liens, and will defend the right, title and interest of the CTR Lenders, in and to any of the Company's rights under the Collateral against the claims and demands of all Persons whomsoever.

	(7)
	Limitations on Disposition.    The Company will not sell, lease, transfer or otherwise dispose of any of the Collateral, or
attempt to contract to do so except as permitted by the provisions of the Trust Indenture as of the date hereof, or consented to in writing by the CTR Lenders.

	(8)
	Further Identification of Collateral.    The Company will, if so requested by the CTR Lenders (in their discretion),
furnish to the CTR Lenders, as often as the CTR Lenders request, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as
the CTR Lenders may reasonably request (in their discretion), all in such detail as the CTR Lenders may specify. 

SECTION 6 — THE CTR LENDERS' APPOINTMENT AS ATTORNEY-IN-FACT  

        On the date of execution of this Security Agreement, the Company shall execute and deliver to the CTR Lenders a power of attorney
(the "Power of Attorney") substantially in the form attached hereto as Exhibit A. The power of attorney
granted pursuant to the Power of Attorney is a power coupled with an interest and shall be irrevocable until the CTR Guarantee has been released by the CTR Lenders. The powers conferred on the CTR
Lenders under the Power of Attorney are solely to protect the CTR Lenders' interests in the Collateral and shall not impose any duty upon the CTR Lenders to exercise any such powers. the CTR Lenders
agree that (a) they shall not exercise, any power or authority granted under the Power of Attorney unless an Event of Default has occurred and is continuing, and (b) the CTR Lenders
shall account for any money received by them in respect of any foreclosure on or disposition of Collateral pursuant to the Power of Attorney provided that the CTR Lenders shall not have any duty as to
any Collateral, and the CTR Lenders shall be accountable only for 

8

 

amounts
that they actually receive as a result of the exercise of such powers. NEITHER THE CTR LENDERS NOR ANY OF THEIR RESPECTIVE AFFILIATES SHALL BE RESPONSIBLE TO THE COMPANY FOR ANY ACT OR FAILURE
TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES. 

SECTION 7 — REMEDIES  

        7.1    Appointment of Receiver.    In addition to all other rights and
remedies granted to it under this Security Agreement, the CTR Guarantee and under any other instrument or agreement securing, evidencing or relating to any of the Guaranteed Obligations, if any Event
of Default shall have occurred and be continuing, the CTR Lenders may appoint or reappoint by instrument in writing, any Person or Persons, whether an officer or officers or an employee or employees
of the CTR Lenders or not, to be a receiver or receivers (hereinafter called a "Receiver", which term when used herein shall include a receiver and
manager) of Collateral (including any interest, income or profits therefrom) and may remove any Receiver so appointed and appoint another in its stead. Any such Receiver shall, so far as concerns
responsibility for its acts, be deemed the agent of the Company and not of the CTR Lenders, and the CTR Lenders shall not be in any way responsible for any misconduct, negligence or
non-feasance on the part of any such Receiver, its servants, agents or employees. Subject to the provisions of the instrument appointing it, any such Receiver shall have power to take
possession of Collateral, to preserve Collateral or its value, to carry on or concur in carrying on all or any part of the business of the Company and to sell, lease, license or otherwise dispose of
or concur in selling, leasing, licensing or otherwise disposing of Collateral. To facilitate the foregoing powers, any such Receiver may, to the exclusion of all others, including the Company, enter
upon, use and occupy all premises owned or occupied by the Company wherein Collateral may be situated, maintain Collateral upon such premises, borrow money on a secured or unsecured basis and use
Collateral directly in carrying on the Company's business or as security for loans or advances to enable the Receiver to carry on the Company's business or otherwise, as such Receiver shall, in its
discretion, determine. Except as may be otherwise directed by the CTR Lenders (in their discretion), all Money received from time to time by such Receiver in carrying out its appointment shall
be received in trust for and paid over to the CTR Lenders. Every such Receiver may, in the discretion of the CTR Lenders, be vested with all or any of the rights and powers of the CTR Lenders. 

        7.2    Exercise of Rights by the CTR Lenders.    Upon and during the
continuance of an Event of Default, the CTR Lenders may, either directly or through their respective agents or nominees, exercise any or all of the powers and rights given to a Receiver by virtue of
Section 7.1. 

        7.3    Taking Possession of Collateral.    Upon and during the
continuance of an Event of Default, the CTR Lenders may take possession of, collect, demand, sue on, enforce, recover and receive Collateral and give valid and binding receipts and discharges therefor
and in respect thereof and the CTR Lenders may sell, licence, lease or otherwise dispose of Collateral in such manner, at such time or times and place or places, for such consideration and upon such
terms and conditions as to the CTR Lenders may seem reasonable (in their discretion). The CTR Lenders shall use reasonable care with respect to the Collateral in their possession or under their
control. The CTR Lenders shall not have any other duty as to any Collateral in their possession or control or in the possession or control of any agent or nominee of the CTR Lenders, or any income
thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto except solely to the extent the CTR Lenders has thereto agreed under
Section 9.20. 

        7.4    Rights and Remedies under PPSA.    In addition to those rights
granted herein and in any other agreement now or hereafter in effect between the Company and the CTR Lenders and in addition to any other rights the CTR Lenders may have at law or in equity, the CTR
Lenders shall have, both before and after an Event
of Default, all rights and remedies of a secured party under the PPSA. However, the CTR Lenders shall not be liable or accountable for any failure to exercise their remedies, take possession of,
collect, enforce, realize, sell, lease, licence or otherwise dispose of Collateral or to institute any proceedings for such purposes. Furthermore, the CTR Lenders shall have no obligation to take any
steps to preserve rights against prior parties to any Instrument or Chattel Paper whether Collateral or Proceeds and whether or not in the CTR Lenders' possession and shall not be liable or
accountable for failure to do so. 

9

   7.5    Cooperation of the Company with respect to Taking Possession.    After and during continuance of an Event of Default, the
Company acknowledges that the CTR Lenders or any Receiver appointed by them may take possession of Collateral wherever it may be located and by any method permitted by law and the Company agrees upon
request from the CTR Lenders (acting in their own discretion) or any such Receiver (acting on the instructions of the CTR Lenders) to assemble and deliver possession of Collateral at such place or
places as directed. 

7.6    Costs.    The Company agrees to be liable for and to pay all costs, charges and expenses incurred by the CTR Lenders or any
Receiver appointed by them, whether directly or for services rendered (including reasonable legal and auditors' costs and other legal expenses and Receiver remuneration), in operating the Company's
accounts, in preparing or enforcing this Security Agreement, taking and maintaining custody of, preserving, repairing, processing, preparing for disposition and disposing of Collateral and in
enforcing or collecting indebtedness and all such costs, charges and expenses, together with any amounts owing as a result of any borrowing by the CTR Lenders or any Receiver appointed by them, as
permitted hereby, shall be a first priority security interest on the proceeds of realization, collection or disposition of Collateral and shall be secured hereby. 

7.7    Notice of Sale.    The CTR Lenders will give the Company such notice, if any, of the date, time and place of any public sale
or of the date after which any private disposition of Collateral is to be made as may be required by the PPSA. 

7.8    Intellectual Property Licence.    For the purpose of enabling the CTR Lenders to exercise rights and remedies under
Section 7 hereof, the Company hereby grants to the CTR Lenders an irrevocable, non-exclusive licence (exercisable without payment of royalty or other
compensation to the Company) to use, license or sublicense any Intellectual Property now owned or hereafter acquired by the Company, and wherever the same may be located, and including in such licence
access to all media in which any of the licenced items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. 

7.9    Inter-Creditor Agreement.    The rights and obligations of the parties hereunder with respect to payment collection and
priority of security, enforcement notice, standstill of creditors' rights and other matters between the CTR Lenders and other creditors of the Company are subject to the terms of the Inter-Creditor
Agreement. 

SECTION 8 — REINSTATEMENT  

        This Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation
or reorganization, should the Company become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part
of the Company's property or assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Guaranteed Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Guaranteed Obligations, whether as a "voidable preference", "fraudulent
conveyance," or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Guaranteed
Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. 

SECTION 9 — MISCELLANEOUS  

9.1    Performance by the CTR Lenders.    Upon the Company's failure to perform any of its duties hereunder, the CTR Lenders may,
but shall not be obligated to, perform any or all of such duties. 

9.2    Extensions, etc.    The CTR Lenders may (in their discretion) grant extensions of time and other indulgences, take and
give up security, accept compositions, compound, compromise, settle, grant releases and discharges and otherwise deal with the Company, debtors of the Company (subject to
Sections 3.2 and 3.3) and with Collateral and other security as the CTR Lenders may see fit without prejudice to the liability
of the Company or the CTR Lenders' right to hold and realize the Security Interest. Furthermore, the CTR Lenders may (in their discretion), upon the occurrence of an Event of Default and for so
long as it is continuing, demand, collect and sue on Collateral in the Company's name and may endorse the Company's name on any and 

10

 

all cheques,
commercial paper, and any other Instruments and any Securities pertaining to or constituting Collateral. 

9.3    No Waiver.    No delay or omission by the CTR Lenders in exercising any right or remedy hereunder or with respect to any of
the Guaranteed Obligations shall operate as a waiver thereof or of any other right or remedy, and no single or partial exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right or remedy. Furthermore, the CTR Lenders may (in their discretion) remedy any default by the Company hereunder or with respect to any Guaranteed Obligations in any
manner without waiving the default remedied and without waiving any other prior or subsequent default by the Company. All
rights and remedies of the CTR Lenders granted or recognized herein are cumulative and may be exercised at any time and from time to time independently or in combination. 

9.4    Waiver of Protest.    The Company waives protest of any Instrument constituting Collateral at any time held by the CTR
Lenders on which the Company is in any way liable and, subject to Section 7.7 hereof, notice of any other action taken by the CTR Lenders. 

9.5    Assignment and Enurement.    This Security Agreement shall enure to the benefit of and be binding upon the parties hereto and
their respective successors and assigns. In any action brought by an assignee of this Security Agreement and the Security Interest or any part thereof to enforce any rights hereunder, the Company
shall not assert against the assignee any claim or defence which the Company now has or hereafter may have against the CTR Lenders. No sales of participations, other sales, assignments, transfers or
other dispositions of any agreement governing or instrument evidencing the Guaranteed Obligations or any portion thereof or interest therein shall in any manner affect the Security Interest granted to
the CTR Lenders, hereunder. The Company may not assign, sell, hypothecate or otherwise transfer any interest in or obligation under this Security Agreement. 

9.6    Amendment.    No modification, variation or amendment of any provision of this Security Agreement shall be made except by a
written agreement, executed by the parties hereto and no waiver of any provision hereof shall be effective unless in writing. 

9.7    Notices.    Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served upon any of the parties by any other party, or whenever any of the parties desires to give and serve upon any other
party any communication with respect to this Security Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be given in the
manner, and deemed received, as provided for in the CTR Guarantee. 

9.8    Remedies Cumulative.    This Security Agreement and the security afforded hereby is in addition to and not in substitution
for any other security now or hereafter held by the CTR Lenders and is intended to be a continuing security agreement and shall remain in full force and effect until all Guaranteed Obligations and any
extensions or renewals thereof together with interest accruing thereon shall be paid in full. No single or partial exercise by the CTR Lenders of any right or remedy precludes or otherwise affects the
exercise of any other right or remedy to which they may be entitled. 

9.9    Headings.    The headings used in this Security Agreement are for convenience only and are not to be considered a part of
this Security Agreement and do not in any way limit or amplify the terms and provisions of this Security Agreement. 

9.10    Number and Gender.    When the context so requires, the singular number shall be read as if the plural were expressed and
the provisions hereof shall be read with all grammatical changes necessary dependent upon the person referred to being a male, female, firm or corporation. 

9.11    Severability.    Wherever possible, each provision of this Security Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Security Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Security Agreement. This Security Agreement is to be read, construed and applied
together with the CTR Guarantee, 

11

 

taken
together, set forth the complete understanding and agreement of the Company and the CTR Lenders with respect to the matters referred to herein and therein. 

9.12    Extensions.    Nothing herein contained shall in any way obligate the CTR Lenders to grant, continue, renew, extend time for
payment of or accept anything which constitutes or would constitute Guaranteed Obligations. 

9.13    Attachment.    The Security Interest created hereby is intended to attach when this Security Agreement is signed by the
Company and delivered to the CTR Lenders. 

9.14    Amalgamation.    The Company acknowledges and agrees that in the event it amalgamates with any other corporation or
corporations it is the intention of the parties hereto that the term "the Company" when used herein shall apply to the amalgamated corporation, such that the Security Interest granted hereby: 

	(1)
	shall
extend to "Collateral" (as that term is herein defined) owned by each of the amalgamating corporations and the amalgamated corporation at the time of amalgamation and to
any "Collateral" thereafter owned or acquired by the amalgamated corporation, and

	(2)
	shall
secure the Guaranteed Obligations of each of the amalgamating corporations and the amalgamated corporation to the CTR Lenders, at the time of amalgamation and all Guaranteed
Obligations of the amalgamated corporation to the CTR Lenders, thereafter arising. The Security Interest shall attach to "Collateral" owned by each corporation amalgamating with the Company, and by
the amalgamated corporation, at the time of the amalgamation, and shall attach to any "Collateral" thereafter owned or acquired by the amalgamated corporation when such becomes owned or is acquired. 

9.15    Governing Law; Consent to Jurisdiction.    IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT PROVINCE AND ANY
LAWS APPLICABLE THEREIN. THE COMPANY HEREBY
CONSENTS AND AGREES THAT THE COURTS OF THE PROVINCE OF ONTARIO SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY AND THE CTR LENDERS
PERTAINING TO THIS SECURITY AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT. NOTHING IN THIS SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE CTR LENDERS
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO ENFORCE THE CTR GUARANTEE OR TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE GUARANTEED OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER. THE COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY HEREBY WAIVES ANY
OBJECTION WHICH THE COMPANY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE COMPANY AT ITS ADDRESS SET FORTH IN THE CTR GUARANTEE AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT WITH CANADA POST, PROPER POSTAGE PREPAID. 

9.16    Judgment Currency. 

	(1)
	If,
for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction, it becomes necessary to convert into any other currency (such other
currency being hereinafter in this Section 9.16 referred to as the "Judgment Currency") an amount due in Canadian
Dollars, the conversion shall be made at the rate of exchange specified by the CTR Lenders as being the rate available to the CTR 

12

 

Lenders
in Toronto, Ontario on the Business Day immediately preceding (a) the date of actual payment of the amount due, in the case of any proceeding in the courts of the Province of Ontario or
in the courts of any other jurisdiction that will give effect to such conversion being made on such date, or (b) the date on which the judgment is given, in the case of any proceeding in the
courts of any other jurisdiction (the applicable date as of which such conversion is made pursuant to this Section 9.16(1) being hereinafter in this
Section 9.16 referred to as the "Judgment Conversion Date"). 

	(2)
	If,
in the case of any proceeding in the court of any jurisdiction referred to in Section 9.16(1), there is a change in the rate of exchange
available to the CTR Lenders between the Judgment Conversion Date and the date of actual receipt for value of the amount due, the Company shall pay such additional amount (if any, but in any
event not a lesser amount) as may be necessary to ensure that the amount actually received for value in the Judgment Currency, when converted at the rate of exchange specified by the CTR Lenders as
being the rate available to the CTR Lenders on the date of payment, will produce the amount of Canadian Dollars which could have been purchased with the amount of the Judgment Currency stipulated in
the judgment or judicial order at the rate of exchange on the Judgment Conversion Date. 

9.17    Counterparts.    This Security Agreement may be executed in any number of separate original or facsimile counterparts each
of which shall collectively and separately constitute one and the same agreement. 

9.18    No Strict Construction.    The parties hereto have participated jointly in the negotiation and drafting of this Security
Agreement. In the event an ambiguity or question of intent or interpretation arises, this Security Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden
of proof shall arise favouring or disfavouring any party by virtue of the authorship of any provisions of this Security Agreement. 

9.19    Advice of Counsel.    Each of the parties represents to each other party hereto that it has discussed this Security
Agreement and, specifically, the provisions of Section 9.15, with its counsel. 

9.20    Limitation on the CTR Lenders' Duty in Respect of Collateral.    The CTR Lenders shall use reasonable care with respect to
the Collateral in their possession or under their control. The CTR Lenders shall not have any other duty as to any Collateral in their possession or control or in the possession or control of any
agent or nominee of the CTR Lenders, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. 

9.21    Paramountcy.    This Security Agreement is subject to the terms of the CTR Guarantee. In the event that any provisions of
this Security Agreement contradict or are otherwise incapable of being construed in conjunction with the provisions of the CTR Guarantee, the following will apply: 

	(a)
	the
provisions of the CTR Guarantee shall take precedence over those contained in this Security Agreement; and

	(b)
	if
any act of the Company is expressly permitted under the CTR Guarantee but is prohibited under this Security Agreement, any such act shall be permitted under the CTR Guarantee and
shall be deemed to be permitted hereunder. 

9.22    Termination.    This Security Agreement shall terminate upon release by the CTR Lenders of the CTR Guarantee. 

9.23    Copy.    The Company hereby acknowledges receipt of a copy of this Security Agreement. 

13

 

        The
parties have duly executed this Security Agreement as of the date first written above. 

	 	 	SR TELECOM INC.
	

 	
 	

By:	

/s/  WILLIAM E. AZIZ      
 Name: William E. Aziz

Title: Acting CEO
	

 	
 	

By:	

/s/  DAVID L. ADAMS      
 Name: David L. Adams

Title: Sr.VP, Finance and CFO
	

 	
 	
EXPORT DEVELOPMENT CANADA
	

 	
 	

By:	

/s/  SEAN MITCHELL      
 Name: Sean Mitchell

Title: Manager, Special Risks
	

 	
 	

By:	

/s/  ROBERT HODGES      
 Name: Robert Hodges

Title: Special Risks
	

 	
 	
INTER-AMERICAN DEVELOPMENT BANK
	

 	
 	

By:	

/s/  HIROSHI TOYODA      
 Name: Hiroshi Toyoda

Title: Manager, Private Sector Development
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

14

 
 

Schedule 4.1(5) — Offices and Locations of Collateral
  and Records Concerning Collateral    
    

	1.
	Chief
Executive Office: 

8150 Trans
Canada Highway

Montreal, Quebec

H4S 1M5 Canada 

	2.
	Locations
of Collateral: 

8150 Trans
Canada Highway

Montreal, Quebec

H4S 1M5 Canada 

6900 Trans
Canada Highway

Pointe-Claire, Quebec

H9R 5C7 Canada 

 
 

Schedule 4.1(8) — Intellectual Property    
    

	(A)
	PATENTS

See
Attached. 

	(B)
	TRADEMARKS  

See
Attached. 

	(C)
	COPYRIGHTS

Nil

	(D)
	LICENSES

The
following lists the agreements in which Licenses were assigned to or obtained by the Company or its material subsidiaries, which, if the Company or its material subsidiaries were not the owners
thereof or had no rights to use same, could reasonably be expected to have a material adverse effect: 

 Product Line — swing  

	•
	Asset
Purchase Agreement between Lucent Technologies France S.A. and SR Telecom S.A.S. dated September 21, 2001

	•
	Intellectual
Property Agreement between Lucent Technologies France S.A. and Lucent technologies GRL Corporation and SR Telecom S.A.S. dated
September 21, 2001 

 Product Line — stride2400  

	•
	Intellectual
Property Assignment Agreement between Nera Wireless Broadband Access A.S. and SR Telecom Inc. dated March 27, 2002

	•
	Contribution
Agreement between Nera Telecom and SRT Acquisition dated March 22, 2002 

 Product Lines — airstar and angel  

	•
	Intellectual
Property Agreement between SR Telecom USA, Inc. and SR Telecom Inc. dated as of November 30, 2003

	•
	Agreement
and Plan of Merger between Netro Corporation, SR Telecom Inc. and Norway Acquisition Corporation dated as of March 27, 2003

	•
	Intellectual
Property Agreement between AT&T Wireless Services, Inc. ("AWS") and Netro Corporation dated
February 12, 2002

	•
	Software
Licence Agreement between Aztek Engineering, Inc. and AWS dated July 30, 2001

	•
	Products
Licence Agreement, as amended by Amendment One dated May 11, 2001, Between Rational Software Corporation and AWS

	•
	Chronology
End-User License Agreement (Rev. September 1998)

	•
	Product
Software Source/Object Code Licence Agreement between HotHaus Technologies, Inc. n/k/a Broadcom Corporation and AWS dated July 31, 1998, as amended by
the Amendment to Services Agreement dated July 1, 1999

	•
	Services
Agreement between HotHaus Technologies, Inc. n/k/a Broadcom Corporation and AWS dated July 31, 1998, as amended by the Amendment to Services Agreement
dated June 1, 1999, and as last amended by a letter agreement dated June 6, 2001, and accepted and agreed to June 19, 2001, extending the termination date thereof

	•
	Software
Licence Agreement No. 7224-1 between Integrated Systems, Inc. n/k/a WindRiver Systems, Inc. and AWS dated as of
November 29, 1995

	•
	Software
Licence Agreement No. 7224-2 between Integrated Systems, Inc. n/k/a WindRiver Systems, Inc. and AWS dated as of
November 29, 1995, as last amended by Amendement No.2 thereto dated November 29, 1999 

 
 

EXHIBIT A
  
    POWER OF ATTORNEY    
    

        This Power of Attorney is executed and delivered by SR Telecom Inc., a Canadian corporation
(the "Company"), to each of Export Development Canada and Inter-American Development Bank (hereinafter collectively referred to as
"Attorney") in connection with the CTR Guarantee dated as of May 19, 2005, a security agreement dated as of August 22, 2005
(the "Security Agreement") and other related documents (as the same may be further amended, restated, modified or supplemented from time
to time, collectively the "Loan Documents"). No person to whom this Power of Attorney is presented, as authority for Attorney to take any action or
actions contemplated hereby, shall be required to inquire into or seek confirmation from the Company as to the authority of Attorney to take any action described below, or as to the existence of or
fulfilment of any condition to this Power of Attorney, which is intended to grant to Attorney unconditionally the authority to take and perform the actions contemplated herein, and the Company
irrevocably waives any right to commence any suit or action, in law or equity, against any person or entity which acts in reliance upon or acknowledges the authority granted under this Power of
Attorney. The power of attorney granted hereby is coupled with an interest, and may not be revoked or cancelled by the Company without Attorney's written consent. 

        The
Company hereby irrevocably constitutes and appoints Attorney (and all officers, employees or agents designated by Attorney), with full power of substitution, as the Company's
true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Company and in the name of the Company or in its own name, from time to
time in Attorney's discretion, to take any and all appropriate action and to execute and deliver any and all documents and instruments which may be necessary or desirable to accomplish the purposes of
the Loan Documents and, without limiting the generality of the foregoing, the Company hereby grants to Attorney the power and right, on behalf of the Company, without notice to or assent by the
Company, and at any time, to do the following: (a) change the mailing address of the Company, open a post office box on behalf of the Company, open mail for the Company, and ask, demand,
collect, give acquittances and receipts for, take possession of, endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, and notices in connection with any property of the Company; (b) effect any repairs to any asset of the Company, or continue or obtain any insurance and pay all or any part of the
premiums therefrom and costs thereof, and make, settle and adjust all claims under such policies of insurance, and make all determinations and decisions with respect to such policies; (c) pay
or discharge any taxes, liens, security interests, or other encumbrances levied or placed on or threatened against the Company or its property; (d) defend any suit, action or proceeding brought
against the Company if the Company does not defend such suit, action or proceeding or if Attorney believes that the Company is not pursuing such defense in a manner that will maximize the recovery to
Attorney, and settle, compromise or adjust any suit, action, or proceeding described above and, in connection therewith, give such discharges or releases as Attorney may deem appropriate;
(e) file or prosecute any claim, litigation, suit or proceeding in any court of competent jurisdiction or before any arbitrator, or take any other action otherwise deemed appropriate by
Attorney for the purpose of collecting any and all such money due to the Company wherever payable and to enforce any other right in respect of the Company's property; (f) cause the chartered
public accountants then engaged by the Company to prepare and deliver to Attorney at any time and from time to time, promptly
upon Attorney's request, the following reports: (1) a reconciliation of all accounts, (2) an aging of all accounts, (3) trial balances, (4) test verifications of such
accounts as Attorney may request, and (5) the results of each physical verification of inventory; (g) communicate in its own name with any party to any Contract or Account with regard to
the assignment of the right, title and interest of the Company in and under the Contract or Account and other matters relating thereto; and (h) execute, in connection with any sale provided for
in any Loan Document, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral and to otherwise direct such sale or resale, all as though Attorney
were the absolute owner of the property of the Company for all purposes, and to do, at Attorney's option and the Company's expense, at any time or from time to time, all acts and other things that
Attorney reasonably deems necessary to perfect, preserve, or realize upon the Company's property or assets and Attorney's Liens thereon, all as fully and effectively as the Company might do. The
Company hereby ratifies, to the extent permitted by law, all that said Attorney shall lawfully do or cause to be done by virtue hereof. 

        All
capitalized terms used but not otherwise defined herein have the meanings given to such terms in the Security Agreement noted above. 

 

        IN
WITNESS WHEREOF, this Power of Attorney is executed by the Company as of this 22nd day of August, 2005. 

	 	 	SR TELECOM INC.
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:

2

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SECURITY AGREEMENT

TABLE OF CONTENTS

SECURITY AGREEMENT

Schedule 4.1(5) — Offices and Locations of Collateral and Records Concerning Collateral

Schedule 4.1(8) — Intellectual Property

EXHIBIT A POWER OF ATTORNEY

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