Document:

ex105usguarantyagreement

EXECUTION VERSION   918283.07-CHISR01A - MSW      U.S. GUARANTY   (FOREIGN ABL)      dated as of      June 4, 2015         among   AVAYA INC.,          CERTAIN U.S. SUBSIDIARIES OF AVAYA INC.   FROM TIME TO TIME PARTY HERETO,      and      CITIBANK, N.A.,   as Administrative Agent         Exhibit 10.5    

 

   i   918283.07-CHISR01A - MSW   TABLE OF CONTENTS   Page   ARTICLE I      DEFINITIONS   SECTION 1.01. Credit Agreement .......................................................................................... 1   SECTION 1.02. Other Defined Terms ..................................................................................... 1   ARTICLE II      GUARANTY   SECTION 2.01. Guaranty ........................................................................................................ 2   SECTION 2.02. Guaranty of Payment ..................................................................................... 2   SECTION 2.03. No Limitations ............................................................................................... 2   SECTION 2.04. Reinstatement ................................................................................................ 3   SECTION 2.05. Agreement To Pay; Subrogation ................................................................... 3   SECTION 2.06. Information .................................................................................................... 4   ARTICLE III      INDEMNITY, SUBROGATION AND SUBORDINATION   SECTION 3.01. Indemnity and Subrogation ........................................................................... 4   SECTION 3.02. Contribution and Indemnification ................................................................. 4   SECTION 3.03. Subordination ................................................................................................ 4   ARTICLE IV      MISCELLANEOUS   SECTION 4.01. Notices ........................................................................................................... 5   SECTION 4.02. Waivers; Amendment .................................................................................... 5   SECTION 4.03. Administrative Agent’s Fees and Expenses, Indemnification ....................... 5   SECTION 4.04. Survival of Representations and Warranties ................................................. 6   SECTION 4.05. Counterparts; Effectiveness; Successors and Assigns; Several   Agreement ................................................................................................. 6   SECTION 4.06. Severability .................................................................................................... 6   SECTION 4.07. [Reserved] .................................................... Error! Bookmark not defined.   SECTION 4.08. Governing Law; Jurisdiction; Venue; Waiver of Jury Trial; Consent   to Service of Process ................................................................................. 7   SECTION 4.09. Headings ........................................................................................................ 7     

 

TABLE OF CONTENTS   (continued)   Page   ii   918283.07-CHISR01A - MSW   SECTION 4.10. Guaranty Absolute ......................................................................................... 7   SECTION 4.11. Termination or Release ................................................................................. 7   SECTION 4.12. Additional Guarantors ................................................................................... 8   SECTION 4.13. Limitation on Guaranteed Obligations .......................................................... 8   SECTION 4.14. Instrument for the Payment of Money .......................................................... 8   SECTION 4.15. Continuing Guaranty ..................................................................................... 9   SECTION 4.16. Consent to Certain Provisions ....................................................................... 9        

 

   918283.07-CHISR01A - MSW   U.S. GUARANTY dated as of June 4, 2015, among AVAYA INC., a Delaware   corporation (“Avaya”), the Subsidiaries of Avaya signatory hereto (collectively, the “Subsidiary   Guarantors”), certain other Subsidiaries of Avaya from time to time after the Closing Date par-   ty hereto and CITIBANK, N.A., as Administrative Agent (as defined below).   Reference is made to the Credit Agreement dated of even date herewith (as   amended, restated, supplemented or otherwise modified from time to time, the “Credit Agree-   ment”), among Avaya Canada Corp. (the “Canadian Borrower”), Avaya Deutschland GmbH   and Avaya GmbH & Co. KG (collectively, the “German Borrowers”), Avaya International   Sales Limited (the “Irish Borrower”) and Avaya UK (the “UK Borrower”; and, together with   the Canadian Borrower, the German Borrowers and the Irish Borrower, collectively, the “Bor-   rowers”), Citibank, N.A., as Administrative Agent and L/C Issuer, Citibank, N.A., Canadian   Branch, as Canadian Swing Line Lender, Citibank, N.A., London Branch, as European Swing   Line Lender, and each lender from time to time party thereto (collectively, the “Lenders” and,   each, individually, a “Lender”).  The Lenders have agreed to extend credit to the Borrowers sub-   ject to the terms and conditions set forth in the Credit Agreement.  The obligations of the Lend-   ers to extend such credit are conditioned upon, among other things, the execution and delivery of   this Agreement.  Avaya and the Subsidiaries that are or may become party hereto are affiliates of   the Borrowers, will derive substantial benefits from the extension of credit to the Borrowers pur-   suant to the Credit Agreement and are willing to execute and deliver this Agreement in order to   induce the Lenders to extend such credit.  Accordingly, the parties hereto make the following   representations and warranties to the Administrative Agent for the benefit of the Secured Parties   and hereby covenant and agree as follows:   ARTICLE I      DEFINITIONS   SECTION 1.01. Credit Agreement.   (a) Capitalized terms used in this Agreement and not otherwise defined herein   have the meanings specified in the Credit Agreement.   (b) The rules of construction specified in Article I of the Credit Agreement al-   so apply to this Agreement.   SECTION 1.02. Other Defined Terms.  As used in this Agreement, the following   terms have the meanings specified below:   “Administrative Agent” means Citibank, N.A., in its capacity as administrative   agent under any of the Loan Documents, or any successor administrative agent.   “Agreement” means this U.S. Guaranty.   “Bankruptcy Code” means Title 11 of the United States Code entitled “Bank-   ruptcy,” as now or hereafter in effect, or any successor thereto.     

 

   2   918283.07-CHISR01A - MSW   “Guarantor” means Avaya, in its capacity as a guarantor under this Agreement,   the Subsidiary Guarantors and each other Person that becomes a party to this Agreement after the   Closing Date.   “Guaranty Parties” means, collectively, the Borrowers and each Guarantor and   “Guaranty Party” means any one of them.   “Guaranty Supplement” means an instrument in the form of Exhibit I hereto.   ARTICLE II      GUARANTY   SECTION 2.01. Guaranty.  Each Guarantor irrevocably, absolutely and uncondi-   tionally guaranties, jointly with the other Guarantors, and severally, the due and punctual pay-   ment of the Obligations, in each case, whether such Obligations are now existing or hereafter   incurred under, arising out of any Loan Document whether at stated maturity or earlier, by rea-   son of acceleration, mandatory prepayment or otherwise in accordance herewith or with any oth-   er Loan Documents.  Each of the Guarantors further agrees that the Obligations may be extended,   increased or renewed, in whole or in part, without notice to or further assent from it, and that it   will remain bound upon its guaranty notwithstanding any extension, increase or renewal, in   whole or in part, of any Obligation.  To the extent permitted by applicable law, each of the Guar-   antors waives presentment to, demand of payment from and protest to any Guaranty Party of any   of the Obligations, and also waives notice of acceptance of its guaranty and notice of protest for   nonpayment.   SECTION 2.02. Guaranty of Payment.  Each of the Guarantors further agrees   that its guaranty hereunder constitutes a guaranty of payment when due and not of collection, and,   to the extent permitted by applicable law, waives any right to require that any resort be had by   the Administrative Agent or any other Secured Party to any security held for the payment of the   Obligations, or to any balance of any deposit account or credit on the books of the Administra-   tive Agent or any other Secured Party in favor of the Borrowers or any other Person.   SECTION 2.03. No Limitations.   (a) To the extent required by applicable law, except for termination of a   Guarantor’s obligations hereunder as expressly provided in Section 4.11, the obligations of each   Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination   for any reason, including any claim of waiver, release, surrender, alteration or compromise, and   shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatso-   ever by reason of the invalidity, illegality or unenforceability of the Obligations, or otherwise.    Without limiting the generality of the foregoing, to the extent permitted by applicable law, the   obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affect-   ed by (i) the failure of the Administrative Agent or any other Secured Party to assert any claim or     

 

   3   918283.07-CHISR01A - MSW   demand or to enforce any right or remedy under the provisions of any Loan Document or other-   wise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the   terms or provisions of, any Loan Document or any other agreement, including with respect to   any other Guarantor under this Agreement; (iii) the release of any security held by the Adminis-   trative Agent or any other Secured Party for the Obligations; (iv) any default, failure or delay,   willful or otherwise, in the performance of the Obligations; or (v) any other act or omission that   may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate   as a discharge of any Guarantor as a matter of law or equity (other than the payment in full in   cash of all the Obligations).  Each Guarantor expressly authorizes the Secured Parties to take and   hold security from the Foreign Loan Parties for the Obligations, to exchange, waive or release   any or all such security (with or without consideration), to enforce or apply such security and   direct the order and manner of any sale thereof in their sole discretion or to release or substitute   any one or more other guarantors or obligors upon or in respect of the Obligations, all in accord-   ance with the Loan Documents and all without affecting the obligations of any Guarantor here-   under.   (b) To the fullest extent permitted by applicable law, each Guarantor waives   any defense based on or arising out of any defense of any Guaranty Party or the unenforceability   of the Obligations, or any part thereof from any cause, or the cessation from any cause of the lia-   bility of any Guaranty Party, other than the payment in full in cash of all the Obligations.  The   Administrative Agent and the other Secured Parties, in accordance with the Loan Documents,   may compromise or adjust any part of the Obligations, make any other accommodation with any   Guaranty Party or exercise any other right or remedy available to them against any Guaranty Par-   ty, without affecting or impairing in any way the liability of any Guarantor hereunder except to   the extent the Obligations have been paid in full in cash.  To the fullest extent permitted by ap-   plicable law, each Guarantor waives any defense arising out of any such election even though   such election operates, pursuant to applicable law, to impair or to extinguish any right of reim-   bursement or subrogation or other right or remedy of such Guarantor against any Guaranty Party,   as the case may be.   SECTION 2.04. Reinstatement.  Each of the Guarantors agrees that its guaranty   hereunder shall continue to be effective or be reinstated, as the case may be, if at any time pay-   ment, or any part thereof, of any Obligation, is rescinded, invalidated or must otherwise be re-   stored by the Administrative Agent or any other Secured Party upon the bankruptcy or reorgani-   zation of any Guaranty Party or otherwise.   SECTION 2.05. Agreement To Pay; Subrogation.  In furtherance of the forego-   ing and not in limitation of any other right that the Administrative Agent or any other Secured   Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of any   Guaranty Party to pay any Obligation when and as the same shall become due, whether at ma-   turity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises   to and will forthwith pay, or cause to be paid, to the Administrative Agent for distribution to the   Secured Parties in cash the amount of such unpaid Obligation.  Upon payment by any Guarantor   of any sums to the Administrative Agent as provided above, all rights of such Guarantor against     

 

   4   918283.07-CHISR01A - MSW   any Guaranty Party arising as a result thereof by way of right of subrogation, contribution, reim-   bursement, indemnity or otherwise shall in all respects be subject to Article III herein.   SECTION 2.06. Information.  Each Guarantor assumes all responsibility for be-   ing and keeping itself informed of each Guaranty Party’s financial condition and assets, and of   all other circumstances bearing upon the risk of nonpayment of the Obligations, and the nature,   scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that   none of the Administrative Agent or the other Secured Parties will have any duty to advise such   Guarantor of information known to it or any of them regarding such circumstances or risks.   ARTICLE III      INDEMNITY, SUBROGATION AND SUBORDINATION   SECTION 3.01. Indemnity and Subrogation.  In addition to all such rights of in-   demnity and subrogation as the Guarantors may have under applicable law (but subject to Sec-   tion 3.03), each of the Borrowers agree that in the event a payment of an obligation shall be   made by any Guarantor under this Agreement, the Borrowers, jointly and severally, shall indem-   nify such Guarantor for the full amount of such payment and such Guarantor shall be subrogated   to the rights of the Person to whom such payment shall have been made to the extent of such   payment.   SECTION 3.02. Contribution and Indemnification.  To the extent that any Guar-   antor shall, under this Agreement as a joint and several obligor, repay any of the Obligations (an   “Accommodation Payment”), then the Guarantor making such Accommodation Payment shall   be entitled to contribution and indemnification from, and be reimbursed by, each of the other   Guarantors in an amount equal to a fraction of such Accommodation Payment, the numerator of   which fraction is such other Guarantor’s Allocable Amount and the denominator of which is the   sum of the Allocable Amounts of all of the Guarantors. As of any date of determination, the “Al-   locable Amount” of each Guarantor shall be equal to the maximum amount of liability for Ac-   commodation Payments which could be asserted against such Guarantor hereunder without (a)   rendering such Guarantor “insolvent” within the meaning of Section 101(31) of the Bankruptcy   Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform   Fraudulent Conveyance Act (“UFCA”), (b) leaving such Guarantor with unreasonably small   capital or assets, within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the   UFTA, or Section 5 of the UFCA, or (c) leaving such Guarantor unable to pay its debts as they   become due within the meaning of Section 548 of the Bankruptcy Code or Section 4 of the   UFTA, or Section 5 of the UFCA.   SECTION 3.03. Subordination.   (a) Notwithstanding any provision of this Agreement to the contrary, all rights   of the Guarantors under Section 3.01 of this Agreement and all other rights of indemnity, contri-   bution or subrogation under applicable law or otherwise shall be fully subordinated to the pay-    

 

   5   918283.07-CHISR01A - MSW   ment in full in cash of the Obligations; provided that if any amount shall be paid to such Guaran-   tor on account of such subrogation rights at any time prior to the payment in full of the Obliga-   tions, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith   be paid to the Administrative Agent to be credited and applied against the Obligations, whether   matured or unmatured, in accordance with Section 8.03 of the Credit Agreement.  No failure on   the part of any Borrower or any Guarantor to make the payments required by Section 3.01 (or   any other payments required under applicable law or otherwise) shall in any respect limit the ob-   ligations and liabilities of any Guarantor with respect to its obligations hereunder, and each   Guarantor shall remain liable for the full amount of the obligations of such Guarantor hereunder.   ARTICLE IV      MISCELLANEOUS   SECTION 4.01. Notices.  All communications and notices hereunder shall (ex-   cept as otherwise expressly permitted herein) be in writing and given as provided in Section   10.02 of the Credit Agreement.  All communications and notices hereunder to any Guarantor   shall be given to it in care of the Administrative Borrower as provided in Section 10.02 of the   Credit Agreement.   SECTION 4.02. Waivers; Amendment.   (a) No failure or delay by the Administrative Agent, any L/C Issuer or any   other Secured Party in exercising any right or power hereunder or under any other Loan Docu-   ment shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or   power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude   any other or further exercise thereof or the exercise of any other right or power.  The rights and   remedies of the Administrative Agent, the L/C Issuers and the other Secured Parties hereunder   and under the other Loan Documents are cumulative and are not exclusive of any rights or reme-   dies that they would otherwise have.  No waiver of any provision of this Agreement or consent to   any departure by any Guaranty Party therefrom shall in any event be effective unless the same   shall be permitted by paragraph (b) of this Section 4.02, and then such waiver or consent shall be   effective only in the specific instance and for the purpose for which given.  Without limiting the   generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be   construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lend-   er or any L/C Issuer may have had notice or knowledge of such Default at the time.  No notice or   demand on any Guaranty Party in any case shall entitle any Guaranty Party to any other or fur-   ther notice or demand in similar or other circumstances.   (b) Neither this Agreement nor any provision hereof may be waived, amended   or modified except pursuant to an agreement or agreements in writing entered into by the Ad-   ministrative Agent and the Guaranty Party or Guaranty Parties with respect to which such waiver,   amendment or modification is to apply, subject to any consent required in accordance with Sec-   tion 10.01 of the Credit Agreement.     

 

   6   918283.07-CHISR01A - MSW   SECTION 4.03. Administrative Agent’s Fees and Expenses, Indemnification.   (a) The parties hereto agree that the Administrative Agent shall be entitled to   reimbursement of its expenses incurred hereunder and indemnity related hereto as provided in   Sections 10.04 and 10.05 of the Credit Agreement.   (b) Any such amounts payable as provided hereunder shall be additional Ob-   ligations guaranteed hereby.  The provisions of this Section 4.03 shall remain operative and in   full force and effect regardless of the termination of this Agreement or any other Loan Document,   the consummation of the transactions contemplated hereby, the repayment of any of the Obliga-   tions, the invalidity or unenforceability of any term or provision of this Agreement or any other   Loan Document, or any investigation made by or on behalf of the Administrative Agent or any   other Secured Party.  All amounts due under this Section 4.03 shall be payable within 10 Busi-   ness Days of written demand therefor.   SECTION 4.04. Survival of Representations and Warranties.  All representations   and warranties made hereunder and in any other Loan Document or other document delivered   pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and   delivery hereof and thereof.  Such representations and warranties have been or will be relied up-   on by the Administrative Agent and each Lender, regardless of any investigation made by the   Administrative Agent or any Lender or on their behalf and notwithstanding that the Administra-   tive Agent or any Lender may have had notice or knowledge of any Default at the time of any   Credit Extension and shall continue in full force and effect as long as any Loan or any other Ob-   ligation shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding, other   than any Letter of Credit that has been Cash Collateralized or, if satisfactory to the L/C Issuer in   its sole discretion, for which a backstop Letter of Credit is in place.   SECTION 4.05. Counterparts; Effectiveness; Successors and Assigns; Several   Agreement.  This Agreement may be executed in one or more counterparts, each of which shall   be deemed an original, but all of which together shall constitute one and the same instrument.    Delivery by facsimile or electronic transmission of an executed counterpart of a signature page to   this Agreement shall be effective as delivery of an original executed counterpart of this Agree-   ment.  The Administrative Agent may also require that any such documents and signatures deliv-   ered by facsimile or electronic transmission be confirmed by a manually signed original thereof;   provided that the failure to request or deliver the same shall not limit the effectiveness of any   document or signature delivered by facsimile or electronic transmission.  This Agreement shall   become effective as to any Guaranty Party when a counterpart hereof executed on behalf of such   Guaranty Party shall have been delivered to the Administrative Agent and a counterpart hereof   shall have been executed on behalf of the Administrative Agent, and thereafter shall be binding   upon such Guaranty Party and the Administrative Agent and their respective successors and as-   signs permitted thereby, and shall inure to the benefit of such Guaranty Party, the Administrative   Agent and the other Secured Parties and their respective successors and assigns permitted there-   by, except that no Guaranty Party shall have the right to assign or transfer its rights or obligations   hereunder or any interest herein (and any such assignment or transfer shall be void) except as   expressly contemplated by this Agreement or any other Loan Document.  This Agreement shall     

 

   7   918283.07-CHISR01A - MSW   be construed as a separate agreement with respect to each Guaranty Party and may be amended,   modified, supplemented, waived or released with respect to any Guaranty Party without the ap-   proval of any other Guaranty Party and without affecting the obligations of any other Guaranty   Party hereunder.   SECTION 4.06. Severability.  If any provision of this Agreement or the other   Loan Documents is held to be illegal, invalid or unenforceable, the legality, validity and enforce-   ability of the remaining provisions of this Agreement and the other Loan Documents shall not be   affected or impaired thereby and the intent of such illegal, invalid or unenforceable provision   shall be followed as closely as legally possible.  The invalidity of a provision in a particular ju-   risdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.   .  [Reserved]   SECTION 4.08. Governing Law; Jurisdiction; Venue; Waiver of Jury Trial;   Consent to Service of Process.   (a) The terms of Sections 10.16 and 10.17 of the Credit Agreement with re-   spect to governing law, submission of jurisdiction, venue and waive of trial are incorporated   herein by reference, mutatis mutandis, and the parties hereto agree to such terms.   (b) Each party to this Agreement irrevocably consents to service of process in   the manner provided for notices given by mail in Section 4.01.  Nothing in this Agreement will   affect the right of any party to this Agreement to serve process in any other manner permitted by   law.   SECTION 4.09. Headings.  Article and Section headings and the Table of Con-   tents used herein are for convenience of reference only, are not part of this Agreement and are   not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.   SECTION 4.10. Guaranty Absolute.  To the fullest extent permitted by applica-   ble law, all rights of the Administrative Agent hereunder and all obligations of each Guarantor   hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforcea-   bility of the Credit Agreement, any other Loan Document, any agreement with respect to any of   the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any   change in the time, manner or place of payment of, or in any other term of, all or any of the Ob-   ligations, or any other amendment or waiver of or any consent to any departure from the Credit   Agreement, any other  Loan Document, or any other agreement or instrument, (c) any exchange,   release or non-perfection of any Lien on other collateral, or any release or amendment or waiver   of or consent under or departure from any guaranty securing or guaranteeing all or any of the   Obligations (d), any law or regulation of any jurisdiction or any other event affecting any term of   an Obligation, or (e) any other circumstance that might otherwise constitute a defense available   to, or a discharge of, any Guarantor in respect of the Obligations or this Agreement (other than   payment in full in cash of all of the Obligations).     

 

   8   918283.07-CHISR01A - MSW   SECTION 4.11. Termination or Release.   (a) This Agreement and the Guaranties made herein shall terminate with re-   spect to all Obligations when all the outstanding Obligations (other than contingent indemnifica-   tion obligations not yet accrued and payable) have been paid in full and the Lenders have no fur-   ther commitment to lend under the Credit Agreement, the Outstanding Amount of L/C Obliga-   tions has been reduced to zero (other than any Letter of Credit that has been Cash Collateralized   or, if satisfactory to the L/C Issuer in its sole discretion, for which a backstop Letter of Credit is   in place) and the L/C Issuers have no further obligations to issue Letters of Credit under the   Credit Agreement.   (b) A Guarantor shall automatically be released from its obligations hereunder   as provided in Section 9.12 of the Credit Agreement.   (c) In connection with any termination or release pursuant to paragraph (a) or   (b) of this Section 4.11, the Administrative Agent shall execute and deliver to any Guarantor, at   such Guarantor’s expense, all documents that such Guarantor shall reasonably request to evi-   dence such termination or release, in each case in accordance with the terms of Section 9.12 of   the Credit Agreement.  Any execution and delivery of documents pursuant to this Section 4.11   shall be without recourse to or warranty by the Administrative Agent.   (d) At any time that the Administrative Borrower desires that the Administra-   tive Agent take any of the actions described in immediately preceding paragraph (c), it shall, up-   on request of the Administrative Agent, deliver to the Administrative Agent an officer’s certifi-   cate certifying that the release of the respective Guarantor is permitted pursuant to paragraph (a)   or (b).  The Administrative Agent shall have no liability whatsoever to any Guarantor as a result   of any release of any Guarantor by it as permitted (or which the Administrative Agent in good   faith believes to be permitted) by this Section 4.11.   SECTION 4.12. Additional Guarantors.  Each Material Domestic Subsidiary of   Avaya that enters into this Agreement as a Guarantor pursuant to Section 6.11 of the Credit   Agreement shall execute and deliver a Guaranty Supplement and thereupon such Material Do-   mestic Subsidiary shall become a Guarantor hereunder with the same force and effect as if origi-   nally named as a Guarantor herein.  The execution and delivery of any such instrument shall not   require the consent of any other Guaranty Party hereunder.  The rights and obligations of each   Guaranty Party hereunder shall remain in full force and effect notwithstanding the addition of   any new Guaranty Party as a party to this Agreement.   SECTION 4.13. Limitation on Guaranteed Obligations.  Each Guarantor and   each Secured Party (by its acceptance of the benefits of this Agreement) hereby confirms that it   is its intention that this Agreement not constitute a fraudulent transfer or conveyance for purpos-   es of any Debtor Relief Laws (including the Bankruptcy Code, the Uniform Fraudulent Convey-   ance Act or any similar Federal or state law).  To effectuate the foregoing intention, each Guar-   antor and each Secured Party (by its acceptance of the benefits of this Agreement) hereby irrevo-   cably agrees that the Obligations owing by such Guarantor under this Agreement shall be limited   to such amount as will, after giving effect to such maximum amount and all other (contingent or     

 

   9   918283.07-CHISR01A - MSW   otherwise) liabilities of such Guarantor that are relevant under such Debtor Relief Laws and after   giving effect to any rights to contribution and/or subrogation pursuant to any agreement provid-   ing for an equitable contribution and/or subrogation among such Guarantor and the other Guar-   antors and Borrowers, result in the Obligations of such Guarantor in respect of such maximum   amount not constituting a fraudulent transfer or conveyance.    SECTION 4.14. Instrument for the Payment of Money.  Each Guarantor hereby   acknowledges that this guarantee constitutes an instrument for the payment of money, and con-   sents and agrees that any Lender or the Administrative Agent, at its sole option, in the event of a   dispute by such Guarantor in the payment of any moneys due hereunder, shall have the right to   bring a motion-action under New York CPLR Section 3213.   SECTION 4.15. Continuing Guaranty.  This guaranty is a continuing guaranty of   payment, and shall apply to all Obligations whenever arising.   SECTION 4.16. Consent to Certain Provisions.  Each Guarantor has read and   agreed to Section 10.22 of the Credit Agreement as if a signatory thereto. Each Guarantor will   comply with all covenants in the Loan Documents applicable to it (including as a Restricted Sub-   sidiary, U.S. Guarantor or Loan Party) even if it is not a signatory to the applicable Loan Docu-   ment.   [Signatures on following page]     

 

    

 

    

 

   EXHIBIT I-1   918283.07-CHISR01A - MSW   EXHIBIT I   SUPPLEMENT NO.________ dated as of [   ], to the U.S. Guaranty dated as of    June 4, 2015 among AVAYA INC., a Delaware corporation (“Avaya”), the Subsidiaries of   Avaya signatory thereto (collectively, the “Subsidiary Guarantors”), certain other Subsidiaries   of Avaya from time to time party thereto and CITIBANK, N.A., as Administrative Agent.   A. Reference is made to the Credit Agreement dated as of June 4, 2015 (as   amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),   among Avaya Canada Corp. (the “Canadian Borrower”), Avaya Deutschland GmbH and   Avaya GmbH & Co. KG (collectively, the “German Borrowers”), Avaya International Sales   Limited (the “Irish Borrower”) and Avaya UK (the “UK Borrower”; and, together with the   Canadian Borrower, the German Borrowers and the Irish Borrower, collectively, the “Borrow-   ers”), Citibank, N.A., as Administrative Agent and L/C Issuer, Citibank, N.A., Canadian Branch,   as Canadian Swing Line Lender, Citibank, N.A., London Branch, as European Swing Line   Lender, and each lender from time to time party thereto (collectively, the “Lenders” and indi-   vidually, a “Lender”).   B. Capitalized terms used herein and not otherwise defined herein shall have   the meanings assigned to such terms in the Credit Agreement.   C. The Guarantors have entered into the Guaranty in order to induce the   Lenders to make Loans and the L/C Issuers to issue Letters of Credit.  Section 4.12 of the Guar-   anty provides that additional Material Domestic Subsidiaries of Avaya may become Guarantors   under the Guaranty by execution and delivery of an instrument in the form of this Supplement.    The undersigned Material Domestic Subsidiary (the “New Subsidiary”) is executing this Sup-   plement in accordance with the requirements of the Credit Agreement to become a Guarantor   under the Guaranty in order to induce the Lenders to make additional Loans and the L/C Issuers   to issue additional Letters of Credit and as consideration for Loans previously made and Letters   of Credit previously issued.   Accordingly, the Administrative Agent and the New Subsidiary agree as follows:   SECTION 1.  In accordance with Section 4.12 of the Guaranty, the New Subsidi-   ary by its signature below becomes a Guarantor under the Guaranty with the same force and ef-   fect as if originally named therein as a Guarantor and the New Subsidiary hereby (a) agrees to all   the terms and provisions of the Guaranty applicable to it as a Guarantor and Guarantor thereun-   der and (b) represents and warrants that the representations and warranties made by it as a Guar-   antor thereunder are true and correct on and as of the date hereof.  In furtherance of the foregoing,   the New Subsidiary, as security for the payment and performance in full of the Obligations does   hereby, for the benefit of the Secured Parties, their successors and assigns, irrevocably, absolute-   ly and unconditionally guaranty, jointly with the other Guarantors and severally, the due and   punctual payment and performance of the Obligations.  Each reference to a “Guarantor” in the   Guaranty shall be deemed to include the New Subsidiary.  The Guaranty is hereby incorporated   herein by reference.     

 

   EXHIBIT I-2   918283.07-CHISR01A - MSW   SECTION 2.  The New Subsidiary represents and warrants to the Administrative   Agent and the Secured Parties that this Supplement has been duly authorized, executed and de-   livered by it and constitutes its legal, valid and binding obligation, enforceable against it in ac-   cordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and   by general principles of equity.   SECTION 3.  This Supplement may be executed in counterparts (and by different   parties hereto on different counterparts), each of which shall constitute an original, but all of   which when taken together shall constitute a single contract.  This Supplement shall become ef-   fective when the Administrative Agent shall have received a counterpart of this Supplement that   bears the signature of the New Subsidiary, and the Administrative Agent has executed a counter-   part hereof.  Delivery of an executed signature page to this Supplement by facsimile transmission   or other electronic communication shall be as effective as delivery of a manually signed counter-   part of this Supplement.   SECTION 4.  Except as expressly supplemented hereby, the Guaranty shall re-   main in full force and effect.   SECTION 5.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND   CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW   YORK.   SECTION 6.  If any provision contained in this Supplement is held to be invalid,   illegal or unenforceable, the legality, validity, and enforceability of the remaining provisions   contained herein and in the Guaranty shall not be affected or impaired thereby and the intent of   such illegal, invalid or unenforceable provision shall be followed as closely as legally possible.    The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforcea-   ble such provision in any other jurisdiction.   SECTION 7.  All communications and notices hereunder shall be in writing and   given as provided in Section 4.01 of the Guaranty.   SECTION 8.  The New Subsidiary agrees to reimburse the Administrative Agent   for its reasonable out-of-pocket expenses in connection with the execution and delivery of this   Supplement, including the reasonable fees, other charges and disbursements of counsel for the   Administrative Agent to the extent required by Section 4.03 of the Guaranty.     

 

   EXHIBIT I-3   918283.07-CHISR01A - MSW   IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent   have duly executed this Supplement to the Guaranty as of the day and year first above written.   [NAME OF NEW SUBSIDIARY],   By:     Name:    Title:    Jurisdiction of Formation:   Address Of Chief Executive Office:   CITIBANK, N.A.,   as Administrative Agent   By:     Name:    Title:ex106canadianpledgeandse

EXECUTION COPY   CANADIAN PLEDGE AND SECURITY AGREEMENT   dated as of   June 4, 2015   among   AVAYA CANADA CORP.   as Canadian Borrower   and   CITIBANK, N.A.,   as Administrative Agent   LEGAL_23770880.12 CANADIAN PLEDGE AND SECURITY AGREEMENT   Exhibit 10.6    

 

TABLE OF CONTENTS   Page   SECTION 1.01.   SECTION 1.02.   ARTICLE I   DEFINITIONS   CREDIT AGREEMENT   OTHER DEFINED TERMS.   SECTION 2.01.   SECTION 2.02.   SECTION 2.03.   SECTION 2.04.   SECTION 2.05.   SECTION 2.06.   SECTION 2.07.   ARTICLE II   PLEDGE OF SECURITIES   PLEDGE    8   DELIVERY OF THE PLEDGED COLLATERAL""."!."!"."!"!."!!." 9   REPRESENTATIONS, WARRANTIES AND COVENANTS 9   CERTIFICATION OF LIMITED LIABILITY COMPANY AND LIMITED   PARTNERSHIP INTERESTS 1 ]   UNLIMITED LIABILITY COMPANIES !.!!!!!!!!!!!!!!! 11   REGISTRATION IN NOMINEE NAME; DENOMINATIONS... 11   VOTING RIGHTS; DIVIDENDS AND INTEREST 12   SECTION 3.01.   SECTION 3.02.   SECTION 3.03.   SECTION 3.04.   ARTICLE III   SECURITY INTERESTS IN PERSONAL PROPERTY   SECURITY INTEREST    ] 3   REPRESENTATIONS AND WARRANTIES 16   COVENANTS    1 6   OTHER ACTIONS    1 8   ARTICLE IV   REMEDIES   SECTION 4.01. REMEDIES UPON DEFAULT    ] 8   SECTION 4.02. APPLICATION OF PROCEEDS 20   SECTION 4.03. GRANT OF LICENCE TO USE INTELLECTUAL PROPERTY; POWER   OF ATTORNEY 21   SECTION 4.04. CERTAIN MATTERS RELATING TO ACCOUNTS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 21   ARTICLE V   INDEMNITY, SUBROGATION AND SUBORDINATION   SECTION 5.01. CONTRIBUTION AND INDEMNIFICATION 22   -i-   LEGAL 23770880.12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

Page   SECTION 5.02. SUBORDINATION.   ,22   ARTICLE VI   SECTION 6.01.   SECTION 6.02.   SECTION 6.03.   SECTION 6.04.   SECTION 6.05.   SECTION 6.06.   SECTION 6.07.   SECTION 6.08.   SECTION 6.09.   SECTION 6.10.   SECTION6.il.   SECTION 6.12.   SECTION 6.13.   SECTION 6.14.   SECTION 6.15.   SECTION 6.16.   SECTION 6.17.   SECTION 6.18.   SECTION 6.19.   Schedules   MISCELLANEOUS   NOTICES 22   W A I V E R S ; A M E N D M E N T !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 22   ADMINISTRATIVE AGENT'S FEES AND EXPENSES 23   SUCCESSORS AND ASSIGNS "    23   SURVIVAL OF AGREEMENT 23   COUNTERPARTS; EFFECTIVENESS; SUCCESSORS ANDASSIGNS-   SEVERAL AGREEMENT 23   SEVERABILITY    2 4   R I G H T O F S E T - O F F !!!!!!!!!!!!!!! 24   GOVERNING LAW; JURISDICTION; VENUE; WAIVER OF JURY   TRIAL; CONSENT TO SERVICE OF PROCESS 24   HEADINGS 25   SECURITY INTEREST ABSOLUTE '"'."."..    25   TERMINATION OR RELEASE 25   ADDITIONAL GRANTORS !!!""    26   ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT 26   GENERAL AUTHORITY OF THE ADMINISTRATIVE AGENT 27   REASONABLE CARE 27   REINSTATEMENT 27   M I S C E L L A N E O U S !!!!!!!!!!!!! 27   ENGLISH AGREEMENT ."    28   SCHEDULE I Pledged Equity; Pledged Debt   Exhibits   EXHIBIT I Form of Security Agreement Supplement   EXHIBIT II Form of Perfection Certificate   -11-   LEGAL_23770880.12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   CANADIAN PLEDGE AND SECURITY AGREEMENT dated as of June 4 2015   among AVAYA CANADA CORP., a Nova Scotia Unlimited Liability Company (the "Canadian   Borrower"), each other Person that executes a supplement attached hereto following the Closing Date   and becomes a Grantor hereunder (collectively, the "Grantors" and each a "Grantor") and CITIBANK,   N.A., as administrative agent for the Secured Parties (as defined below).   Reference is made to the Credit Agreement dated as of even date herewith (as amended,   amended and restated, supplemented or otherwise modified from time to time, the "Credit Agreement"),   among, inter alia, the Canadian Borrower, Avaya Deutschland GmbH and Avaya GmbH & Co. KG   (collectively, the "German Borrowers"), Avaya International Sales Limited (the "Irish Borrower") and   Avaya UK (the "UK Borrower"); and, together with the Canadian Borrower, the German Borrowers and   the Irish Borrower, collectively, the "Borrowers"), Citibank, N.A., as Administrative Agent and L/C   Issuer, Citibank, N.A., Canadian Branch, as Canadian Swing Line Lender, Citibank, N.A., London   Branch, as European Swing Line Lender and each lender from time to time party thereto (collectively, the   "Lenders" and, each, individually, a "Lender"). Reference is also made to the Guarantee dated as of   June 4, 2015 among, inter alia, the Canadian Borrower, as guarantor, and CITIBANK, N.A. as   Administrative Agent. The Lenders have agreed to extend credit to the Borrowers subject to the terms and   conditions set forth in the Credit Agreement. The obligations of the Lenders to extend such credit are   conditioned upon, among other things, the execution and delivery of this Agreement. Each Grantor party   hereto from time to time will derive substantial benefits from the extension of credit to the Borrowers   pursuant to the Credit Agreement and is willing to execute and deliver this Agreement in order to induce   the Lenders to extend such credit. Accordingly, the parties hereto agree as follows:   ARTICLE I   Definitions   Section 1.01. Credit Agreement.   (a) Capitalized terms used in this Agreement and not otherwise defined herein have   the meanings specified in the Credit Agreement. All terms defined in the PPSA (as defined herein) or the   STA (as defined herein) and not defined in this Agreement have the meanings specified therein, as   applicable.   (b) The rules of construction specified in Article I of the Credit Agreement also   apply to this Agreement.   Section 1.02. Other Defined Terms. As used in this Agreement, the following terms   have the meanings specified below:   "Account Debtor" means any Person who is or who may become obligated to any   Grantor under, with respect to or on account of an Account.   "Accounts" means all "accounts," as such term is defined in the PPSA, now owned or   hereafter acquired by any Grantor and, in any event, includes all accounts due or accruing due and all   agreements, books, accounts receivable, other receivables, book debts, claims and demand of every nature   and kind and other forms of monetary obligations (other than forms of monetary obligations evidenced by   Chattel Paper, Securities or Instruments) now owned or hereafter received or acquired by or belonging or   A-3   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   owing to the Grantors, whether or not yet earned by performance on the part of any Grantor and all   invoices, letters, documents and papers recording, evidencing or relating thereto.   "Administrative Agent" means Citibank, N.A., as Administrative Agent under the   Credit Agreement, or any successor Administrative Agent thereunder.   "Agreement" means this Canadian Pledge and Security Agreement.   "Chattel Paper" (i) means all "chattel paper" as defined in the PPSA and (ii) includes all   chattel paper in which any Grantor now or hereafter has an interest, and any part of such interest.   "CIPO" means the Canadian Intellectual Property Office;   "Collateral" means General Collateral and the Pledged Collateral.   "Control" means, with respect to a specified form of Pledged Collateral or Investment   Property, "control" as defined in sections 23 through 26 of the STA as applicable to such form of Pledged   Collateral or Investment Property;   "Copyrights" means all of the following now owned or hereafter acquired by any   Grantor: (a) all copyright rights in any work subject to the copyright laws of Canada, whether as author,   assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such   copyright in Canada, including registrations, recordings, supplemental registrations and pending   applications for registration in CIPO.   "Copyright Licence" means any written agreement, now or hereafter in effect, granting   any right to any third party under any Copyright now or hereafter owned by any Grantor or that such   Grantor otherwise has the right to licence, or granting any right to any Grantor under any Copyright now   or hereafter owned by any third party, and all rights of such Grantor under any such agreement.   "Deposit Accounts" means any demand, time, savings, passbook or like account   maintained with a depository institution.   "Designs" means, with respect to any Person, all of such Person's right, title and interest   in and to the following: (a) all industrial designs and intangibles of like nature (whether registered or   unregistered), all registrations and recordings thereof, and all applications in connection therewith,   including all registrations, recordings and applications in the Canadian Industrial Design 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.   "Excluded Assets" means:   (a) assets owned by any Grantor on the date hereof or hereafter acquired that are   subject to a Lien of the type described in Section 7.0 l(i) of the Credit Agreement that is permitted   to be incurred pursuant to the provisions of the Credit Agreement if and to the extent that the   contract or other agreement pursuant to which such Lien is granted (or the documentation relating   thereto) validly prohibits the creation of any other Lien on such asset;   (b) any assets or properties that are acquired pursuant to a Permitted Acquisition (or   that are owned by a Subsidiary acquired pursuant to a Permitted Acquisition), so long as such   -4-   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   assets or properties are subject to a Lien permitted by Section 7.01(p) of the Credit Agreement   and solely to the extent that the terms of the agreements relating to such Lien prohibit the security   interest under this Agreement from attaching to such assets or properties, which secured   Indebtedness is incurred or assumed in connection with such Permitted Acquisition;   (c) any Intellectual Property;   (d) any rights of a Grantor arising under any contract, lease, instrument, licence or   other document or any Intellectual Property subject thereto to the extent that and only for so long   as the grant of a security interest therein would (x) constitute a violation of a valid and   enforceable restriction in respect of, or result in the abandonment, invalidation or unenforceability   of any right, title and interest of such Grantor therein, such rights in favour of a third party or   under any law, regulation, permit, order or decree of any Governmental Authority (for the   avoidance of doubt, the restrictions described herein shall not include negative pledges or similar   undertakings in favour of a lender or other financial counterparty), or (y) result in a breach,   termination, or default under any such contract, lease, instrument, licence or other document, or   expressly give any other party in respect of any such contract, lease, instrument, licence or other   document or any Intellectual Property subject thereto, the right to terminate its obligations   thereunder, provided, however, that the limitation set forth in this clause (d) shall not affect, limit,   restrict or impair the grant by a Grantor of a security interest pursuant to this Agreement in any   such Collateral to the extent that an otherwise applicable prohibition or restriction on such grant   is rendered ineffective pursuant to the PPSA of any relevant jurisdiction or any other applicable   law or principles of equity and provided, further, that, at such time as the condition causing the   conditions in subclauses (x) and (y) of this clause (e) shall be remedied, whether by contract,   change of law or otherwise, the contract, lease, instrument, licence or other documents shall   immediately cease to be an Excluded Asset, and any security interest that would otherwise be   granted herein shall attach immediately to such contract, lease, instrument, licence or other   document or any Intellectual Property subject thereto, or to the extent severable, to any portion   thereof that does not result in any of the conditions in subclauses (x) or (y) above;   (e) any motor vehicle;   (f) the last day of the term of any lease or agreement therefor but upon the   enforcement of the security interest granted hereby in the Collateral, a Grantor shall stand   possessed of such last day in trust to assign the same to any person acquiring such term,   (g) "consumer goods" of a Grantor as that term is defined in the PPSA;   (h) any assets to the extent and for so long as the pledge of such assets is prohibited   by law and such prohibition is not overridden by the PPSA or other applicable law; and   (i) any asset with respect to which the Administrative Agent and the Administrative   Borrower have reasonably determined in writing that the costs of providing a security interest in   such asset is excessive in relation to the practical benefits to be obtained by the Lenders.   "Excluded Security" means   (a) any Equity Interests of (x) any Unrestricted Subsidiary (until such time as any   Unrestricted Subsidiary becomes a Restricted Subsidiary in accordance with the Credit Agreement) or (y)   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   any Person that is not a wholly-owned Material Foreign Subsidiary of a Grantor incorporated in any of   Germany, the United Kingdom, Ireland or Canada;   (b) any Equity Interests of any Subsidiary that is not directly held by a Loan Party;   (c) any Equity Interests of any Person that is not a Subsidiary of a Loan Party (other   than any such Equity Interests held in a securities account);   (d) any interest in a joint venture or non-wholly owned Restricted Subsidiary to the   extent and for so long as the attachment of the security interest created hereby therein would violate any   joint venture agreement, organization or constitutive document, shareholders agreement or equivalent   agreement relating to such joint venture or non-wholly owned Restricted Subsidiary that was entered into   for legitimate and customary business reasons;   (e) any Equity Interests of any Subsidiary acquired pursuant to a Permitted   Acquisition that are subject to a Lien permitted by Section 7.0 l(v) of the Credit Agreement and solely to   the extent that the terms of the agreements relating to such Lien prohibit the security interest under this   Agreement from attaching to such Equity Interests, which secured Indebtedness is incurred or assumed in   connection with such Permitted Acquisition;   (f) any shares of stock or debt to the extent and for so long as the pledge of such   shares of stock or debt is prohibited by law and such prohibition is not overridden by applicable law; and   g) any Equity Interests of any Subsidiary with respect to which the Administrative   Agent and the Grantors have reasonably determined in writing that the costs of providing a pledge of   such Equity Interests is excessive in view of the practical benefits to be obtained by the Lenders.   "Intangibles" means all "intangibles" as defined in the PPSA and includes for the   avoidance of doubt corporate or other business records, indemnification claims, contract rights (including   rights under leases, whether entered into as a lessor or lessee, Swap Contracts and other agreements), all   licences, permits, concessions and authorizations, goodwill, registrations, franchises, tax refund claims   and any letter of credit, guarantee, claim, security interest or other security held by or granted to any   Grantor, as the case may be, to secure payment by an Account Debtor of any of the Accounts (in each   case, regardless of whether characterized as intangibles under the PPSA).   "Intellectual Property" means all intellectual and similar property of every kind and   nature now owned or hereafter acquired by any Grantor, including inventions, Designs, Patents,   Copyrights, Licences, Trademarks, trade secrets, confidential or proprietary technical and business   information, know-how, show-how or other data or information, the intellectual property rights in   software and databases and related documentation and all additions, improvements and accessions to, and   books and records describing any of the foregoing.   "Investment Property" has the meaning specified in the PPSA, but shall not include any   Pledged Collateral.   "Licence" means any Patent Licence, Trademark Licence, Copyright Licence or other   Intellectual Property licence or sublicence agreement to which any Grantor is a party, together with any   and all (i) renewals, extensions, supplements and continuations thereof, (ii) income, fees, royalties,   damages, claims and payments now and hereafter due and/or payable thereunder or with respect thereto   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   including damages and payments for past, present or future infringements or violations thereof, and (iii)   rights to sue for past, present and future violations thereof.   "Patents" means all of the following now owned or hereafter acquired by any Grantor:   (a) all letters Patent of Canada in or to which any Grantor now or hereafter has any right, title or interest   therein, all registrations and recordings thereof, and all applications for letters Patent of Canada, including   registrations, recordings and pending applications in CIPO, and (b) all reissues, continuations, divisions,   continuations-in-part, renewals, improvements or extensions thereof, and the inventions disclosed or   claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.   "Patent Licence" means any written agreement, now or hereafter in effect, granting to   any third party any right to make, use or sell any invention on which a Patent, now or hereafter owned by   any Grantor or that any Grantor otherwise has the right to licence, is in existence, or granting to any   Grantor any right to make, use or sell any invention on which a Patent, now or hereafter owned by any   third party, is in existence, and all rights of any Grantor under any such agreement.   "Perfection Certificate" means a certificate substantially in the form of Exhibit II,   completed and supplemented with the schedules and attachments contemplated thereby, and as amended,   updated, modified or supplemented from time to time, and duly executed by a Responsible Officer of   each Grantor.   "Pledged Collateral" has the meaning assigned to such term in Section 2.01.   "Pledged Debt" has the meaning assigned to such term in Section 2.01.   "Pledged Equity" has the meaning assigned to such term in Section 2.01.   "Pledged Securities" means any promissory notes, stock certificates or other securities   now or hereafter included in the Pledged Collateral, including all certificates, instruments or other   documents representing or evidencing any Pledged Collateral.   "PPSA" means the Personal Property Security Act (Ontario), including the regulations   thereunder, provided that, if perfection or the effect of perfection or non-perfection or the priority of any   Lien created hereunder on the Collateral is governed by the personal property security legislation or other   applicable legislation with respect to personal property security as in effect in a jurisdiction other than   Ontario, "PPSA" means the Personal Property Security Act or such other applicable legislation as in   effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such   perfection, effect of perfection or non-perfection or priority.   "Secured Parties" means, collectively, the Administrative Agent, the Lenders, the   Supplemental Administrative Agent, each Receiver and Delegate and each co-agent or sub-agent   appointed by the Administrative Agent from time to time pursuant to Section 9.01(c) of the Credit   Agreement.   "Securities" means (i) "securities" as defined in the STA, or if no STA is in force in the   applicable jurisdiction, the PPSA of such jurisdiction; (ii) Equity Interests or any other stock, shares,   partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing   agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of   indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments   commonly known as "securities" or any certificates of interest, shares or participations in temporary or   -7-   , „ . , ^ O V , A O O „ , 0 CANADIAN PLEDGE AND SECURITY AGREEMENT   LhuAL 2 o / / UooU.12     

 

EXECUTION COPY   interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any   of the foregoing; and (iii) any Security Entitlements to any of the foregoing.   "Security Agreement Supplement" means an instrument in the form of Exhibit I hereto.   "Security Interest" has the meaning assigned to such term in Section 3.01(a).   "STA" means the Securities Transfer Act, 2006 (Ontario), including the regulations   thereunder, provided that, to the extent that perfection or the effect of perfection or non-perfection or the   priority of any Lien created hereunder on Collateral that is Investment Property is governed by the laws in   effect in any province or territory of Canada other than Ontario in which there is in force legislation   substantially the same as the Securities Transfer Act, 2006 (Ontario) (an "Other STA Province"), then   "STA" shall mean such other legislation as in effect from time to time in such Other STA Province for   purposes of the provisions hereof referring to or incorporating by reference provisions of the STA; and to   the extent that such perfection or the effect of perfection or non-perfection or the priority of any Lien   created hereunder on the Collateral is governed by the laws of a jurisdiction other than Ontario or an   Other STA Province, then references herein to the STA shall be disregarded except for the terms   "Certificated Security" and "Uncertificated Security", which shall have the meanings herein as defined in   the Securities Transfer Act, 2006 (Ontario) regardless of whether the STA is in force in the applicable   jurisdiction.   "Trademarks" means all of the following now owned or hereafter acquired by any   Grantor: (a) all trademarks, service marks, trade names, corporate names, trade dress, logos, designs,   fictitious business names other source or business identifiers, now existing or hereafter adopted or   acquired, all registrations and recordings thereof, and all registration and recording applications filed in   connection therewith, including registrations and registration applications in CIPO, and all extensions or   renewals thereof, as well as any unregistered trademarks and service marks used by a Grantor and (b) all   goodwill connected with the use of and symbolized thereby.   "Trademark Licence" means any written agreement, now or hereafter in effect, granting   to any third party any right to use any trademark now or hereafter owned by any Grantor or that any   Grantor otherwise has the right to licence, or granting to any Grantor any right to use any trademark now   or hereafter owned by any third party, and all rights of any Grantor under any such agreement.   ARTICLE II   Pledge of Securities   Section 2.01. Pledge. As security for the payment or performance, as the case may be,   in full of the Obligations, including each Guaranty, each Grantor hereby pledges to the Administrative   Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the   Administrative Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest   in all of such Grantor's right, title and interest in, to and under (i) all Equity Interests held by it and listed   on Schedule I and any other Equity Interests obtained in the future by such Grantor and, to the extent   certificated, the certificates representing all such Equity Interests (the "Pledged Equity"); provided that   the Pledged Equity shall not include any Excluded Security; (ii) the debt securities owned by it and listed   opposite the name of such Grantor on Schedule I, any debt securities obtained in the future by such   Grantor and the promissoiy notes and any other instruments evidencing any debt (the "Pledged Debt");   provided that the Pledged Debt shall not include any Excluded Security; (iii) subject to Section 2.07, all   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   payments of principal or interest, dividends, cash, instruments and other property from time to time   received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and   all other Proceeds received in respect of, the Pledged Equity and Pledged Debt; (iv) subject to   Section 2.07, all rights and privileges of such Grantor with respect to the securities and other property   referred to in clauses (i), (ii), and (iii) above; and (v) all Proceeds of any of the foregoing (the items   referred to in clauses (i) through (v) above being collectively referred to as the "Pledged Collateral").   TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest,   powers, privileges and preferences pertaining or incidental thereto, unto the Administrative Agent, its   successors and assigns, for the benefit of the Secured Parties, forever, subject, however, to the terms,   covenants and conditions hereinafter set forth.   Section 2.02. Delivery of the Pledged Collateral.   (a) Subject to Section 6.13(b) of the Credit Agreement, each Grantor agrees to   deliver on the Closing Date all Pledged Securities owned by it on the Closing Date to the Administrative   Agent and with respect to any Pledged Securities issued or acquired after the Closing Date, it agrees to   deliver or cause to be delivered as promptly as practicable (and in any event, within 45 days after the date   of acquisition thereof or such longer period as to which the Administrative Agent may agree in its   reasonable discretion) to the Administrative Agent, for the benefit of the Secured Parties, any and all such   Pledged Securities (other than any uncertificated securities, but only for so long as such securities remain   uncertificated) to the extent such Pledged Securities, in the case of promissory notes or other instruments   evidencing Indebtedness, are required to be delivered pursuant to paragraph (b) of this Section 2.02.   (b) The Grantors will cause any Indebtedness for borrowed money owed to any   Grantor by such Person (other than intercompany Indebtedness (i) between Loan Parties or (ii) between   Subsidiaries that are not Loan Parties) having a principal amount in excess of the Dollar Amount of   (i) $10,000,000 individually or (ii) when aggregated with all other such Indebtedness for which this   clause has not been satisfied, $50,000,000 in the aggregate, to be evidenced by a duly executed   promissory note that is pledged and delivered to the Administrative Agent, for the benefit of the Secured   Parties, pursuant to the terms hereof.   (c) Upon delivery to the Administrative Agent, (i) any Pledged Securities shall be   accompanied by stock or security powers duly executed in blank by the applicable Grantor or other   instruments of transfer reasonably satisfactory to the Administrative Agent and by such other instruments   and documents as the Administrative Agent may reasonably request and (ii) all other property comprising   part of the Pledged Collateral shall be accompanied by proper instruments of assignment or transfer duly   executed by the applicable Grantor and such other instruments or documents as the Administrative Agent   may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule   describing the securities, which schedule shall be attached hereto as Schedule I and made a part hereof;   provided that failure to attach any such schedule hereto shall not affect the validity of such pledge of such   Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.   Section 2.03. Representations. Warranties and Covenants. Each Grantor jointly and   severally represents, warrants and covenants, as to itself and the other Grantors, to and with the   Administrative Agent, for the benefit of the Secured Parties, that:   (a) Schedule I correctly sets forth as of the Closing Date the percentage of the issued   and outstanding units of each class of the Equity Interests of the issuer thereof represented by the   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   Pledged Equity and includes all Equity Interests, debt securities and promissory notes required to   be pledged in order to satisfy the Collateral and Guarantee Requirement;   (b) the Pledged Equity and Pledged Debt (solely with respect to Pledged Debt issued   by a Person other than a Grantor or a Subsidiary of any Grantor, to such Grantor's knowledge)   have been duly and validly authorized and issued by the issuers thereof and (i) in the case of   Pledged Equity, are fully paid and nonassessable and (ii) in the case of Pledged Debt (solely with   respect to Pledged Debt issued by a Person other than a Grantor or a Subsidiary of any Grantor, to   such Grantor's knowledge), are legal, valid and binding obligations of the issuers thereof;   (c) except for the security interests granted hereunder, each of the Grantors (i) is and,   subject to any transfers made in compliance with the Credit Agreement, will continue to be the   direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule I as   owned by such Grantors, (ii) holds the same free and clear of all Liens, other than (A) Liens   created by the Collateral Documents and (B) Liens expressly permitted pursuant to Section 7.01   of the Credit Agreement, (iii) will make no assignment, pledge, hypothecation or transfer of, or   create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other   than (A) Liens created by the Collateral Documents and (B) Liens expressly permitted pursuant to   Section 7.01 of the Credit Agreement, and (iv) if requested by the Administrative Agent, will   defend its title or interest thereto or therein against any and all Liens (other than the Liens   permitted pursuant to this Section 2.03(c)), however arising, of all Persons whomsoever;   (d) except for restrictions and limitations imposed by the Loan Documents or   applicable laws generally and except as described in the Perfection Certificate, the Pledged   Collateral is and will continue to be freely transferable and assignable, and none of the Pledged   Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter   or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or   otherwise affect in any manner material and adverse to the Secured Parties the pledge of such   Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the   Administrative Agent of rights and remedies hereunder;   (e) each of the Grantors has the power and authority to pledge the Pledged Collateral   pledged by it hereunder in the manner hereby done or contemplated;   (f) no consent or approval of any Governmental Authority, any securities exchange   or any other Person was or is necessary to the validity of the pledge effected hereby (other than   such as have been obtained and are in full force and effect);   (g) by virtue of the execution and delivery by the Grantors of this Agreement, when   any Pledged Securities are delivered to the Administrative Agent in accordance with this   Agreement, the Administrative Agent for the benefit of the Secured Parties will obtain a legal,   valid and perfected lien upon and security interest in such Pledged Securities as security for the   payment and performance of the Obligations, subject only to Liens permitted by Section 7.01 of   the Credit Agreement, to the extent such perfection is governed by the PPSA; and   (h) the pledge effected hereby is effective to vest in the Administrative Agent, for the   benefit of the Secured Parties, the rights of the Administrative Agent in the Pledged Collateral as   set forth herein.   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   Each Grantor hereby agrees that upon the occurrence and during the continuance of an   Event of Default, it will comply with instructions of the Administrative Agent with respect to the Equity   Interests in such Grantor that constitute Pledged Equity hereunder that are not certificated without further   consent by the applicable owner or holder of such Equity Interests.   Section 2.04. Certification of Limited Liability Company and Limited Partnership   Interests. Any limited liability company and any limited partnership controlled by any Grantor shall either   (a) not include in its operative documents any provision that any Equity Interests in such limited liability   company or such limited partnership be a "security" as defined under the STA or (b) certificate any   Equity Interests in any such limited liability company or such limited partnership. To the extent an   interest in any limited liability company or limited partnership controlled by any Grantor and pledged   under Section 2.01 is certificated or becomes certificated, (i) each such certificate shall be delivered to the   Administrative Agent, pursuant to Section 2.02(a) and (ii) such Grantor shall fulfill all other requirements   under Section 2.02 applicable in respect thereof. Each Grantor hereby agrees that if any of the Pledged   Collateral are at any time not evidenced by certificates of ownership, then each applicable Grantor shall,   to the extent permitted by applicable law, (i) if necessary or desirable to perfect a security interest in such   Pledged Collateral, cause such pledge to be recorded on the equityholder register or the books of the   issuer, execute any customary pledge forms or other documents necessary or appropriate to complete the   pledge and give the Administrative Agent the right to transfer such Pledged Collateral under the terms   hereof, and (ii) after the occurrence and during the continuance of any Event of Default, upon request by   the Administrative Agent, (A) cause the Organization Documents of each such issuer that is a Subsidiary   of any Grantor to be amended to provide that such Pledged Collateral shall be treated as "securities" for   purposes of the STA and (B) cause such Pledged Collateral to become certificated and delivered to the   Administrative Agent.   Section 2.05. Unlimited Liability Companies. Any Grantor that controls any interest   (for the purposes of this Section, "ULC Interests") in any unlimited liability company (for the purposes   of this Section, a "ULC") pledged hereunder shall remain registered as the sole registered and beneficial   owner of the ULC Interests and will remain as registered and beneficial owner until such time as the ULC   Interests are effectively transferred into the name of the Administrative Agent or any other person on the   books and records of the ULC. Nothing in this Agreement is intended to or shall constitute the   Administrative Agent or any person other than the ULC a shareholder or member of such ULC until such   time as notice is given to the ULC and further steps are taken thereunder so as to register the   Administrative Agent or any other person as the holder of such ULC Interests. To the extent any   provision hereof would have the effect of constituting the Administrative Agent or any other person as a   shareholder or member of an unlimited liability company prior to such time, such provision shall be   severed therefrom and ineffective with respect to the ULC Interests without otherwise invalidating or   rendering unenforceable this Agreement or invalidating or rendering unenforceable such provision insofar   as it relates to Pledged Collateral which are not ULC Interests. Except upon the exercise of rights to sell   or otherwise dispose of ULC Interests following the occurrence and during the continuance of an Event of   Default hereunder, each Grantor shall not cause or permit, or enable any ULC in which it holds ULC   Interests to cause or permit, the Administrative Agent to: (a) be registered as shareholders or members of   such ULC; (b) have any notation entered in their favour in the share register of such ULC; (c) be held out   as shareholders or members of such ULC; (d) receive, directly or indirectly, any dividends, property or   other distributions from such ULC by reason of the Administrative Agent holding a security interest in   such ULC; or (e) to act as a shareholder or member of such ULC, or exercise any rights of a shareholder   or member including the right to attend a meeting of, or to vote the shares of, such ULC.   Section 2.06. Registration in Nominee Name: Denominations. If an Event of Default   shall occur and be continuing, (a) the Administrative Agent, on behalf of the Secured Parties, shall have   -11-   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee,   the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or   assigned in blank or in favour of the Administrative Agent, and each Grantor will promptly give to the   Administrative Agent copies of any notices or other communications received by it with respect to   Pledged Securities registered in the name of such Grantor, and (b) the Administrative Agent shall have   the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger   denominations for any purpose consistent with this Agreement; provided, that the Administrative Agent   shall give the Grantors prior notice of its intent to exercise such rights.   Section 2.07. Voting Rights; Dividends and Interest.   (a) Unless and until an Event of Default shall have occurred and be continuing and   the Administrative Agent shall have notified each Grantor that the rights of the Grantors under this   Section 2.07 are being suspended:   (i) Each Grantor shall be entitled to exercise any and all voting and/or other   consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for   any purpose consistent with the terms of this Agreement, the Credit Agreement and the other   Loan Documents; provided that such rights and powers shall not be exercised in any manner,   except as may be permitted under this Agreement, the Credit Agreement or the other Loan   Documents, that would materially and adversely affect the rights and remedies of any of the   Administrative Agent or the other Secured Parties under this Agreement, the Credit Agreement or   any other Loan Document or the ability of the Secured Parties to exercise the same.   (ii) The Administrative Agent shall execute and deliver to each Grantor, or cause to   be executed and delivered to each Grantor, all such proxies, powers of attorney and other   instruments as each Grantor may reasonably request for the purpose of enabling such Grantor to   exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to   subparagraph (i) above.   (iii) Each Grantor shall be entitled to receive and retain any and all dividends,   interest, principal and other distributions paid on or distributed in respect of the Pledged   Securities to the extent and only to the extent that such dividends, interest, principal and other   distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and   conditions of the Credit Agreement, the other Loan Documents and applicable Laws; provided   that any noncash dividends, interest, principal or other distributions that would constitute Pledged   Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification of   the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange   for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger,   consolidation, acquisition, amalgamation or other exchange of assets to which such issuer may be   a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any   Grantor, shall not be commingled by such Grantor with any of its other funds or property but   shall be held separate and apart therefrom, shall be held in trust for the benefit of the   Administrative Agent and the Secured Parties and shall be promptly (and in any event within 10   Business Days) delivered to the Administrative Agent in the same form as so received (with any   necessary endorsement reasonably requested by the Administrative Agent).   (b) Upon the occurrence and during the continuance of an Event of Default, after the   Administrative Agent shall have notified each Grantor of the suspension of the rights of the Grantors   under paragraph (a)(iii) of this Section 2.07, then all rights of any Grantor to dividends, interest, principal   -12-   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   or other distributions that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of this   Section 2.07 shall cease, and all such rights shall thereupon become vested in the Administrative Agent,   which shall have the sole and exclusive right and authority to receive and retain such dividends, interest,   principal or other distributions. All dividends, interest, principal or other distributions received by any   Grantor contrary to the provisions of this Section 2.07 shall be held in trust for the benefit of the   Administrative Agent, shall be segregated from other property or funds of such Grantor and shall be   promptly (and in any event within 5 Business Days) delivered to the Administrative Agent upon demand   in the same form as so received (with any necessary endorsement reasonably requested by the   Administrative Agent). Any and all money and other property paid over to or received by the   Administrative Agent pursuant to the provisions of this paragraph (b) shall be retained by the   Administrative Agent in an account to be established by the Administrative Agent upon receipt of such   money or other property and shall be applied in accordance with the provisions of Section 4.02 hereof.   After all Events of Default have been cured or waived, the Administrative Agent shall promptly repay to   each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor   would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.07 that   remain in such account.   (c) Upon the occurrence and during the continuance of an Event of Default, after the   Administrative Agent shall have provided each Grantor with 10 days notice of the suspension of the   rights of the Grantors under paragraph (a)(i) of this Section 2.07, then all rights of any Grantor to exercise   the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this   Section 2.07, and the obligations of the Administrative Agent under paragraph (a)(ii) of this Section 2.07,   shall cease, and all such rights shall thereupon become vested in the Administrative Agent, which shall   have the sole and exclusive right and authority to exercise such voting and consensual rights and powers;   provided that, unless otherwise directed by the Required Lenders, the Administrative Agent shall have the   right from time to time following and during the continuance of an Event of Default to permit the   Grantors to exercise such rights at the discretion of the Administrative Agent. After all Events of Default   have been cured or waived, each Grantor shall have the exclusive right to exercise the voting and/or   consensual rights and powers that such Grantor would otherwise be entitled to exercise pursuant to the   terms of paragraph (a)(i) of this Section 2.07.   (d) Any notice given by the Administrative Agent to each Grantor suspending the   rights of the Grantors under paragraph (a) of this Section 2.07(i) shall be given in writing, (ii) may be   given with respect to one or more of the Grantors at the same or different times and (iii) may suspend the   rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) of this Section 2.07 in part without   suspending all such rights (as specified by the Administrative Agent in its sole and absolute discretion)   and without waiving or otherwise affecting the Administrative Agent's rights to give additional notices   from time to time suspending other rights so long as an Event of Default has occurred and is continuing.   ARTICLE III   Security Interests in Personal Property   Section 3.01. Security Interest.   (a) As security for the payment or performance, as the case may be, in full of the   Obligations, including each Guaranty, each Grantor hereby assigns and pledges to the Administrative   Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the   Administrative Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   (the "Security Interest") in all right, title or interest in or to any and all of the following assets and   properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now   has or at any time in the future may acquire any right, title or interest (collectively, the "General   Collateral"):   (i) all Accounts;   (ii) all Chattel Paper;   (iii) all Deposit Accounts;   (iv) all Documents of Title;   (v) all Equipment of whatever kind and wherever situate, including, without   limitation, all machinery, tools, apparatus, plant, furniture, and other vehicles of whatsoever   nature or kind;   (vi) all fixtures;   (vii) all Goods;   (viii) all Intangibles;   (ix) all Instruments;   (x) all Inventory;   (xi) all Investment Property;   (xii) all letters of credit;   (xiii) all Pledged Securities;   (xiv) all books and records pertaining to the General Collateral;   (xv) all Money;   (xvi) all Securities;   (xvii) all Securities Accounts; and   (xviii) to the extent not otherwise included, all Proceeds and products of any and all of   the foregoing and all accessions to, substitutions for and replacements and insurance proceeds and   products of any or all of the foregoing, collateral security and guarantees given by any Person   with respect to any of the foregoing;   provided that notwithstanding anything to the contrary in this Agreement, this Agreement shall not   constitute a grant of a security interest in any Excluded Asset or any Excluded Security.   LEGAL 23770880.12   -14-   CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   (b) Each Grantor and the Administrative Agent hereby acknowledge that (i) value   has been given; (ii) the Grantors have rights in the Collateral in which it has granted a security interest;   (iii) this Agreement constitutes a security agreement as that term is defined in the PPSA; and (iv) the   security interest attaches upon the execution of this Agreement (or in the case of any after-acquired   property, at the time of acquisition thereof).   (c) Each Grantor hereby irrevocably authorizes the Administrative Agent or its   designee for the benefit of the Secured Parties at any time and from time to time to file in any relevant   jurisdiction any Financing Statements (including fixture filings), Financing Change Statements, with   respect to the General Collateral or any part thereof and amendments thereto that (i) indicate the   Collateral as all assets of such Grantor or words of similar effect as being of an equal or lesser scope or   with greater detail, and (ii) contain the information required by any legislation of each applicable   jurisdiction for the filing of any Financing Statement, or Financing Change Statement, including (A)   whether such Grantor is an organization, the type of organization and, if required, any organizational   identification number issued to such Grantor and (B) in the case of a Financing Statement filed as a   fixture filing, a sufficient description of the real property to which such General Collateral relates. Each   Grantor agrees to provide such information to the Administrative Agent promptly upon any reasonable   request.   (d) The Security Interest is granted as security only and shall not subject the   Administrative Agent or any other Secured Party to, or in any way alter or modify, any obligation or   liability of any Grantor with respect to or arising out of the General Collateral.   (e) With respect to any Deposit Accounts that are Blocked Accounts pursuant to   Section 6.15(b) of the Credit Agreement, each Grantor that is an account party for a Blocked Account   shall comply with the provisions of Section 6.15 of the Credit Agreement. The Agent hereby agrees that it   shall not deliver any instructions to any account bank under any Blocked Account Agreement until such   time as (x) in the case of any Blocked Account that is a cash pooling account, a Specified Event of   Default has occurred and is continuing or (y) in the case of all other Blocked Accounts, a Cash Dominion   Event has occurred and is continuing.   (f) Notwithstanding anything to the contrary in the Loan Documents, but at all times   subject to the terms of each other Collateral Document that any Grantor is a party to, none of the Grantors   shall be required (i) to perfect the Security Interests granted by this Agreement (including Security   Interests in Investment Property and fixtures) by any means other than by (A) filings pursuant to the   PPSA or the equivalent legislation in the relevant provinces and territories (excluding fixture filings), (B)   delivery to the Administrative Agent to be held in its possession of all Collateral consisting of   Instruments or Pledged Securities as expressly required elsewhere herein, (C) other methods expressly   provided herein or (D) with respect to Pledged Securities of Material Foreign Subsidiaries, pledge   agreements under applicable local law if requested by the Administrative Agent, (ii) to enter into any   deposit account control agreement or securities account control agreement with respect to any deposit   account or securities account, except for such Deposit Accounts for which Grantors have entered into an   account control agreement pursuant to the Credit Agreement, (iii) to take any action (other than the   actions listed in clause (i)(A), (B) and (D) above, or pursuant to the terms of each other Collateral   Document that any Grantor is party to) with respect to any assets located outside of Canada, (iv) to   perfect in any assets subject to a certificate of title statute, or (v) to deliver any Pledged Securities, other   than the Pledged Securities of any Material Foreign Subsidiary representing Equity Interests pledged   hereunder.   -15-   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   Section 3.02. Representations and Warranties. Each Grantor jointly and severally   represents and warrants, as to itself and the other Grantors, to the Administrative Agent and the Secured   Parties that:   (a) Subject to Liens permitted by Section 7.01 of the Credit Agreement, each   Grantor has good and valid rights in and title to the General Collateral with respect to which it has   purported to grant a Security Interest hereunder and has full power and authority to grant to the   Administrative Agent the Security Interest in such General Collateral pursuant hereto and to   execute, deliver and perform its obligations in accordance with the terms of this Agreement,   without the consent or approval of any other Person other than any consent or approval that has   been obtained.   (b) The Financing Statements, Filing Change Statements or other appropriate filings,   recordings or registrations prepared by the Administrative Agent based upon the information   provided to the Administrative Agent in the Perfection Certificate for filing in each governmental,   municipal or other office specified in Schedule 5 to the Perfection Certificate (or specified by   notice from the a Grantor to the Administrative Agent after the Closing Date in the case of filings,   recordings or registrations required by Section 6.11 of the Credit Agreement), are all the filings,   recordings and registrations that are necessary to establish a legal, valid and perfected security   interest in favour of the Administrative Agent (for the benefit of the Secured Parties) in respect of   all General Collateral in which the Security Interest may be perfected by filing, recording or   registration in Ontario or any other relevant Canadian jurisdiction and no further or subsequent   filing, refiling, recording, rerecording, registration or reregistration is necessary in any such   jurisdiction, except as provided under applicable law with respect to the filing of continuation   statements.   (c) The Security Interest constitutes (i) a legal and valid security interest in all the   General Collateral securing the payment and performance of the Obligations; and (ii) subject to   the filings described in Section 3.02(b), a perfected security interest in all General Collateral in   which a security interest may be perfected by filing, recording or registering a Financing   Statement or analogous document in Ontario, or any other relevant Canadian jurisdiction,   pursuant to the PPSA or its equivalent in the relevant jurisdiction. The Security Interest is and   shall be prior to any other Lien on any of the General Collateral, other than (1) any nonconsensual   Lien that is expressly permitted pursuant to Section 7.01 of the Credit Agreement and has priority   as a matter of law and (2) Liens expressly permitted pursuant to Section 7.01 of the Credit   Agreement.   (d) The General Collateral is owned by the Grantors free and clear of any Lien,   except for Liens expressly permitted pursuant to Section 7.01 of the Credit Agreement. None of   the Grantors has filed or consented to the filing of (i) any Financing Statement or analogous   document under the PPSA or any other applicable provincial or territorial laws covering any   General Collateral, or (ii) any assignment in which any Grantor assigns any General Collateral or   any security agreement or similar instrument covering any General Collateral with any foreign   governmental, municipal or other office, which financing statement or analogous document,   assignment, security agreement or similar instrument is still in effect, except, in each case, for   Liens expressly permitted pursuant to Section 7.01 of the Credit Agreement.   Section 3.03. Covenants.   -16-   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   (a) Each Grantor agrees promptly (and in any event within 60 days of such change)   to notify the Administrative Agent in writing of any change in (i) legal name of any Grantor, (ii) the type   of organization of any Grantor, (iii) the jurisdiction of organization or amalgamation of any Grantor, or   (iv) the chief executive office (and principal place of business or domicile for the purposes of the Quebec   Civil Code) of any Grantor.   (b) Each of the Grantors agree, on its own behalf and on behalf of each other Grantor   at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further   instruments and documents and take all such actions as the Administrative Agent may from time to time   reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and   remedies created hereby, including the payment of any fees and taxes required in connection with the   execution and delivery of this Agreement, the granting of the Security Interest and the filing of any   Financing Statements, Financing Change Statements or other documents in connection herewith or   therewith.   (c) At its option, the Administrative Agent may discharge past due taxes,   assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on   the General Collateral and not permitted pursuant to Section 7.01of the Credit Agreement, and may pay   for the maintenance and preservation of the General Collateral to the extent any Grantor fails to do so as   required by the Credit Agreement or this Agreement and within a reasonable period of time after the   Administrative Agent has requested that it do so, and each Grantor jointly and severally agrees to   reimburse the Administrative Agent within 10 Business Days after demand for any payment made or any   reasonable expense incurred by the Administrative Agent pursuant to the foregoing authorization.   Nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or   imposing any obligation on the Administrative Agent or any Secured Party to cure or perform, any   covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens,   security interests or other encumbrances and maintenance as set forth herein or in the other Loan   Documents.   (d) If at any time the Grantors shall take a security interest in any property of any   Account Debtor or any other Person, the value of which is in excess of (i) $10,000,000 individually or (ii)   when aggregated with all other such properly for which this clause has not been satisfied, $50,000,000 in   the aggregate, to secure payment and performance of an Account, such Grantor shall promptly assign   such security interest to the Administrative Agent for the benefit of the Secured Parties. Such assignment   need not be filed of public record unless necessary to continue the perfected status of the security interest   against creditors of and transferees from the Account Debtor or other Person granting the security interest.   (e) Each Grantor shall, upon request of the Administrative Agent, at its own   expense, take any and all commercially reasonable actions necessary to defend (i) title to the General   Collateral against all Persons and (ii) the Security Interest of the Administrative Agent in the General   Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 7.01 of the   Credit Agreement. Each Grantor (rather than the Administrative Agent or any Secured Party) shall   remain liable (as between itself and any relevant counterparty) to observe and perform all the conditions   and obligations to be observed and performed by it under each contract, agreement or instrument relating   to the General Collateral, all in accordance with the terms and conditions thereof, and each Grantor jointly   and severally agrees to indemnify and hold harmless the Administrative Agent and the Secured Parties   from and against any and all liability for such performance.   (f) With respect to the Inventory, (i) each of the Grantors shall at all times maintain   inventory records reasonably satisfactory to Administrative Agent, keeping correct and accurate records   -17-   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   itemizing and describing the kind, type, quality and quantity of Inventory, such Grantor's cost thereof and   daily withdrawals therefrom and additions thereto to the extent consistent with past practice; and (ii) each   of the Grantors shall conduct a physical count of the Inventory at least once each year and any time or   times as Administrative Agent may reasonably request following the occurrence and during the   continuation of an Event of Default, and promptly following such physical inventory shall supply   Administrative Agent with a report in the form and with such specificity as may be reasonably   satisfactory to Administrative Agent concerning such physical count.   Section 3.04. Other Actions. In order to further insure the attachment, perfection and   priority of, and the ability of the Administrative Agent to enforce, the Security Interest, each Grantor   agrees, in each case at such Grantor's own expense, to take the following actions with respect to the   following General Collateral:   (a) Instruments. If the Grantors shall at any time hold or acquire any Instruments   constituting General Collateral (excluding cheques), and evidencing an amount in excess of (i)   $10,000,000 individually or (ii) when aggregated with all other such Instruments for which this   clause has not been satisfied, $50,000,000 in the aggregate, such Grantor shall promptly endorse,   assign and deliver the same to the Administrative Agent for the benefit of the Secured Parties,   accompanied by such instruments of transfer or assignment duly executed in blank as the   Administrative Agent may from time to time reasonably request;   ARTICLE IV   Remedies   Section 4.01. Remedies upon Default. Upon the occurrence and during the   continuance of an Event of Default, it is agreed that the Administrative Agent shall have the right to   exercise any and all rights afforded to a secured party with respect to the Obligations under PPSA or other   applicable law and also may (i) require each Grantor to, and each Grantor agrees that it will at its expense   and upon request of the Administrative Agent promptly, assemble all or part of the Collateral as directed   by the Administrative Agent and make it available to the Administrative Agent at a place and time to be   designated by the Administrative Agent that is reasonably convenient to both parties; (ii) occupy any   premises owned or, to the extent lawful and permitted, leased by any of the Grantors where the Collateral   or any part thereof is assembled or located for a reasonable period in order to effectuate its rights and   remedies hereunder or under law, without obligation to such Grantor in respect of such occupation;   provided that the Administrative Agent shall provide the applicable Grantor with notice thereof prior to   such occupancy; (iii); exercise any and all rights and remedies of any of the Grantors under or in   connection with the Collateral, or otherwise in respect of the Collateral; provided that the Administrative   Agent shall provide the applicable Grantor with notice thereof prior to such exercise; and (iv) subject to   the mandatory requirements of applicable law and the notice requirements described below, sell or   otherwise dispose of all or any part of the Collateral securing the Obligations at a public or private sale or   at any broker's board or on any securities exchange, for cash, upon credit or for future delivery as the   Administrative Agent shall deem appropriate. The Administrative Agent shall be authorized at any such   sale of securities (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to   Persons who will represent and agree that they are purchasing the Collateral for their own account for   investment and not with a view to the distribution or sale thereof, and upon consummation of any such   sale the Administrative Agent shall have the right to assign, transfer and deliver to the purchaser or   purchasers thereof the Collateral so sold. Each such purchaser at any sale of Collateral shall hold the   property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   waives (to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor   now has or may at any time in the future have under any rule of law or statute now existing or hereafter   enacted.   The Administrative Agent shall give the applicable Grantors 15 days' written notice   (which each Grantor agrees is reasonable notice) of the Administrative Agent's intention to make any sale   of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in   the case of a sale at a broker's board or on a securities exchange, shall state the board or exchange at   which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered   for sale at such board or exchange. Any such public sale shall be held at such time or times within   ordinary business hours and at such place or places as the Administrative Agent may fix and state in the   notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in   one lot as an entirety or in separate parcels, as the Administrative Agent may (in its sole and absolute   discretion) determine. The Administrative Agent shall not be obligated to make any sale of any Collateral   if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have   been given. The Administrative Agent may, without notice or publication, adjourn any public or private   sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for   sale, and such sale may, without further notice, be made at the time and place to which the same was so   adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the   Collateral so sold may be retained by the Administrative Agent until the sale price is paid by the   purchaser or purchasers thereof, but the Administrative Agent shall not incur any liability in case any   such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any   such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted   by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free   (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of   any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the   Collateral or any part thereof offered for sale and may make payment on account thereof by using any   claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price,   and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such   property without further accountability to any Grantor therefor. For purposes hereof, a written agreement   to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Administrative   Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to   the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the   Administrative Agent shall have entered into such an agreement all Events of Default shall have been   remedied and the Obligations paid in full.   As an alternative to exercising the power of sale herein conferred upon it, the   Administrative Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to   sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having   competent jurisdiction or pursuant to a proceeding by a court appointed interim receiver, receiver and   manager or receiver. Any sale pursuant to the provisions of this Section 4.01 shall be deemed to be   commercially reasonable under the PPSA or equivalent legislation in any other Canadian jurisdiction. The   Administrative Agent may appoint, remove or reappoint by instrument in writing, any Person or Persons,   whether an officer or officers or an employee or employees of any Grantor or not, to be an interim   receiver, receiver or receivers (hereafter called a "Receiver", which term when used herein shall include a   receiver and manager) of the Collateral (including any interest, income or profits therefrom). Any such   Receiver shall, to the extent permitted by applicable law, be deemed the agent of such Grantor and not of   the Administrative Agent, and the Administrative Agent shall not be in any way responsible for any   misconduct, negligence or non-feasance on the part of any such Receiver or its servants, agents or   -19-   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   employees. Subject to the provisions of the instrument appointing it, any such Receiver shall (i) have   such powers as have been granted to the Administrative Agent under this Section and the Credit   Agreement and (ii) shall be entitled to exercise such powers at any time that such powers would otherwise   be exercisable by the Administrative Agent under this Section. To facilitate the foregoing powers, any   such Receiver may, to the exclusion of all others, including the Grantors, enter upon, use and occupy all   premises owned or occupied by such Grantor wherein the Collateral may be situate, maintain the   Collateral upon such premises, borrow money on a secured or unsecured basis and use the Collateral   directly in carrying on the applicable Grantor's business or as security for loans or advances to enable the   Receiver to carry on such Grantor's business or otherwise, as such Receiver shall, in its reasonable   discretion determine. Except as may be otherwise directed by the Administrative Agent, all money   received from time to time by such Receiver in carrying out his/her/its appointment shall be received in   trust for and be paid over to the Administrative Agent and any surplus shall be applied in accordance with   applicable law. Every such Receiver may, in the discretion of the Administrative Agent, be vested with,   in addition to the rights set out herein, all or any of the rights and powers of the Administrative Agent   described in the Credit Agreement, the PPSA, the Companies Creditors Arrangement Act (Canada), the   Winding-up and Restructuring Act (Canada) or the Bankruptcy and Insolvency Act (Canada). The   Grantors shall pay all costs, charges and expenses incurred by Administrative Agent or any Receiver or   any nominee or agent of Administrative Agent, whether directly or for services rendered (including,   without limitation, solicitor's costs on a solicitor and his own client basis, auditor's costs, other legal   expenses and Receiver remuneration) in enforcing this Agreement or any other Loan Document and in   enforcing the Obligations and all such expenses together with any money owing as a result of any   borrowing permitted hereby or pursuant to any applicable law shall be a charge on the proceeds of   realization and shall be secured hereby.   Section 4.02. Application of Proceeds.   (a) The Administrative Agent shall apply the proceeds of any collection or sale of   Collateral, including any Collateral consisting of cash, in accordance with Section 8.03 of the Credit   Agreement.   (b) The Administrative Agent shall have absolute discretion as to the time of   application of any such proceeds, monies or balances in accordance with this Agreement and the Credit   Agreement. Upon any sale of Collateral by the Administrative Agent (including pursuant to a power of   sale granted by statute or under a judicial proceeding), the receipt of the Administrative Agent or of the   officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so   sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the   purchase money paid over to the Administrative Agent or such officer or be answerable in any way for   the misapplication thereof.   (c) In making the determinations and allocations required by this Section 4.02, the   Administrative Agent may conclusively rely upon information supplied to or by the Administrative Agent   as to the amounts of unpaid principal and interest and other amounts outstanding with respect to the   Obligations, and the Administrative Agent shall have no liability to any of the Secured Parties for actions   taken in reliance on such information, provided that nothing in this sentence shall prevent any Grantor   from contesting any amounts claimed by any Secured Party in any information so supplied. All   distributions made by the Administrative Agent pursuant to this Section 4.02 shall be (subject to any   decree of any court of competent jurisdiction) final (absent manifest error), and the Administrative Agent   shall have no duty to inquire as to the application by the Administrative Agent of any amounts distributed   to it.   -20-   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   Section 4.03. Grant of Licence to Use Intellectual Property: Power of Attorney.   For the exclusive purpose of enabling the Administrative Agent to exercise rights and   remedies under this Agreement at such time as the Administrative Agent shall be lawfully entitled to   exercise such rights and remedies at any time after and during the continuance of an Event of Default,   each Grantor hereby grants to the Administrative Agent a non exclusive, royalty free, limited licence   (until the termination or cure of the Event of Default) for cash, upon credit or for future delivery as the   Administrative Agent shall deem appropriate to use, licence or sublicence any of the Intellectual Property   now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including   in such licence reasonable 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; provided,   however, that all of the foregoing rights of the Administrative Agent to use such licences, sublicences and   other rights, and (to the extent permitted by the terms of such licences and sublicences) all licences and   sublicences granted thereunder, shall expire immediately upon the termination or cure of all Events of   Default and shall be exercised by the Administrative Agent solely during the continuance of an Event of   Default and upon 10 Business Days' prior written notice to each Grantor, and nothing in this Section 4.03   shall require Grantors to grant any licence that is prohibited by any rule of law, statute or regulation, or is   prohibited by, or constitutes a breach or default under or results in the termination of any contract,   licence, agreement, instrument or other document evidencing, giving rise to or theretofore granted, to the   extent permitted by the Credit Agreement, with respect to such property or otherwise unreasonably   prejudices the value thereof to the relevant Grantor; provided, further, that such licences granted   hereunder with respect to Trademarks shall be subject to the maintenance of quality standards with   respect to the goods and services on which such Trademarks are used sufficient to preserve the validity of   such Trademarks. For the avoidance of doubt, the use of such licence by the Administrative Agent may be   exercised, at the option of the Administrative Agent, only during the continuation of an Event of Default.   Section 4.04. Certain Matters Relating to Accounts.   (a) At any time after the occurrence and during the continuance of an Event of   Default and after giving notice to each Grantor, the Administrative Agent shall have the right, but not the   obligation, to make test verifications of the Accounts in any manner and through any medium that the   Administrative Agent reasonably considers advisable, and each Grantor shall furnish such assistance and   information as the Administrative Agent may reasonably require in connection with such test   verifications. The Administrative Agent shall have the absolute right to share any information it gains   from such inspection or verification with any Secured Party.   (b) At the Administrative Agent's request at any time after the occurrence and during   the continuance of an Event of Default, each Grantor shall deliver to the Administrative Agent all original   and other documents evidencing, and relating to, the agreements and transactions which gave rise to the   Accounts, including all original invoices.   (c) Upon the occurrence and during the continuance of an Event of Default, a   Grantor shall not, without prior consent from the Administrative Agent, grant any extension of the time of   payment of any of the Accounts; compromise, compound or settle the same for less than the full amount   thereof; release, wholly or partly, any Person liable for the payment thereof; or allow any credit or   discount whatsoever thereon if the Administrative Agent shall have instructed the Grantors not to grant or   make any such extension, credit, discount, compromise or settlement under any circumstances during the   continuance of such Event of Default.   -21-   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   (d) Each Grantor shall, at the request of the Administrative Agent following the   occurrence and during the continuance of an Event of Default, legend the Accounts and the other books,   records and documents of such Grantor evidencing or pertaining to Accounts with an appropriate   reference to the fact that the Accounts have been assigned to the Administrative Agent for the benefit of   the Secured Parties and that the Administrative Agent has a security interest therein.   ARTICLE V   Indemnity, Subrogation and Subordination   Section 5.01. Contribution and Indemnification.   The parties hereto agree that each Grantor shall have the rights and obligations provided   in Section 10.25 of the Credit Agreement and Section 10.25 of the Credit Agreement shall be deemed   incorporated by reference herein.   Section 5.02. Subordination.   Notwithstanding any provision of this Agreement to the contrary, all rights of the   Grantors under Section 5.01 and all other rights of indemnity, contribution or subrogation under   applicable law or otherwise shall be fully subordinated to the payment in full in cash of the Obligations.   No failure on the part of any of the Grantors to make the payments required by Sections 5.01 (or any   other payments required under applicable law or otherwise) shall in any respect limit the obligations and   liabilities of any Grantor with respect to its obligations hereunder, and each Grantor shall remain liable   for the full amount of the obligations of such Grantor hereunder.   ARTICLE VI   Miscellaneous   Section 6.01. Notices. All communications and notices hereunder shall (except as   otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit   Agreement. All communications and notices hereunder to any Grantor shall be given to it in care of the   Grantors as provided in Section 10.02 of the Credit Agreement.   Section 6.02. Waivers: Amendment.   (a) No failure or delay by the Administrative Agent, any L/C Issuer or any Lender in   exercising any right or power hereunder or under any other Loan Document shall operate as a waiver   thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or   discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or   the exercise of any other right or power. The rights and remedies of the Administrative Agent, the L/C   Issuers and the Lenders hereunder and under the other Loan Documents are cumulative and are not   exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this   Agreement or consent to any departure by any Grantor therefrom shall in any event be effective unless the   same shall be permitted by paragraph (b) of this Section 6.02, and then such waiver or consent shall be   -22-   CANADIAN PLEDGE AND SECURITY AGREEMENT   LEGAL 23770880.12     

 

EXECUTION COPY   effective only in the specific instance and for the purpose for which given. Without limiting the   generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed   as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any L/C Issuer   may have had notice or knowledge of such Default at the time. No notice or demand on any Grantor in   any case shall entitle any Grantor to any other or further notice or demand in similar or other   circumstances.   (b) Neither this Agreement nor any provision hereof may be waived, amended or   modified except pursuant to an agreement or agreements in writing entered into by the Administrative   Agent and the Grantor or Grantors with respect to which such waiver, amendment or modification is to   apply, subject to any consent required in accordance with Section 10.01 of the Credit Agreement.   Section 6.03. Administrative Agent's Fees and Expenses.   (a) The parties hereto agree that the Administrative Agent shall be entitled to   reimbursement of its expenses incurred hereunder and indemnity for its actions in connection herewith as   provided in Sections 10.04 and 10.05 of the Credit Agreement.   (b) Any such amounts payable as provided hereunder shall be additional Obligations   secured hereby and by the other Collateral Documents. The provisions of this Section 6.03 shall remain   operative and in full force and effect regardless of the termination of this Agreement or any other Loan   Document, the consummation of the transactions contemplated hereby, the repayment of any of the   Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other   Loan Document, or any investigation made by or on behalf of the Administrative Agent or any other   Secured Party. All amounts due under this Section 6.03 shall be payable within 10 days of written   demand therefor.   Section 6.04. Successors and Assigns. Whenever in this Agreement any of the parties   hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of   such party; and all covenants, promises and agreements by or on behalf of any Grantor or the   Administrative Agent that are contained in this Agreement shall bind and enure to the benefit of their   respective successors and assigns, to the extent permitted under Section 10.07 of the Credit Agreement.   Section 6.05. Survival of Agreement. All covenants, agreements, representations and   warranties made by the Grantors in the Loan Documents and in the certificates or other instruments   prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall   be considered to have been relied upon by the Lenders and shall survive the execution and delivery of the   Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any   investigation made by any Lender or on its behalf and notwithstanding that the Administrative Agent, any   other Agent, any L/C Issuer or any Lender may have had notice or knowledge of any Default or incorrect   representation or warranty at the time any credit is extended under the Credit Agreement, and shall   continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee   or any other amount payable under any Loan Document is outstanding and unpaid or any Letter of Credit   is outstanding (other than any Letter of Credit in which the Outstanding Amount of the L/C Obligations   related thereto have been Cash Collateralized or back-stopped by a letter of credit in form and substance   satisfactory to the Administrative Agent in its sole discretion) or any Commitment is outstanding.   Section 6.06. Counterparts: Effectiveness: Successors and Assigns: Several   Agreement. This Agreement and each other Loan Document may be executed in one or more   counterparts, each of which shall be deemed an original, but all of which together shall constitute one and   -23-   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   the same instrument. Delivery by facsimile or other electronic communication of an executed counterpart   of a signature page to this Agreement and each other Loan Document shall be effective as delivery of an   original executed counterpart of this Agreement and such other Loan Document. The Administrative   Agent may also require that any such documents and signatures delivered by facsimile or other electronic   communication be confirmed by a manually signed original thereof; provided that the failure to request or   deliver the same shall not limit the effectiveness of any document or signature delivered by facsimile or   other electronic communication. This Agreement shall become effective as to any Grantor when a   counterpart hereof executed on behalf of such Grantor shall have been delivered to the Administrative   Agent and a counterpart hereof shall have been executed on behalf of the Administrative Agent, and   thereafter shall be binding upon such Grantor and the Administrative Agent and their respective   successors and assigns permitted thereby, and shall enure to the benefit of such Grantor, the   Administrative Agent and the other Secured Parties and their respective successors and assigns permitted   thereby, except that no Grantor shall have the right to assign or transfer its rights or obligations hereunder   or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as   expressly contemplated by this Agreement or the other Loan Documents. This Agreement shall be   construed as a separate agreement with respect to each Grantor and may be amended, modified,   supplemented, waived or released with respect to any Grantor without the approval of any other Grantor   and without affecting the obligations of any other Grantor hereunder.   Section 6.07. Severability. If any provision of this Agreement or the other Loan   Documents is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the   remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired   thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render   unenforceable such provision in any other jurisdiction. The parties shall endeavor in good faith   negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic   effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.   Section 6.08. Right of Set-Off. In addition to any rights and remedies of the Lenders   provided by Law, upon the occurrence and during the continuance of any Event of Default, each Lender   and its Affiliates and each L/C Issuer and its Affiliates shall have the rights specified in Section 10.10 of   the Credit Agreement.   Section 6.09. Governing Law: Jurisdiction: Venue: Waiver of Jury Trial: Consent to   Service of Process.   (a) THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR   CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON   ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS   CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN   ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL   LAWS OF CANADA APPLICABLE THEREIN.   (b) EACH PARTY HERETO HEREBY IRREVOCABLY AND   UNCONDITIONALLY SUBMITS FOR ITSELF AND ITS PROPERTY TO THE NON EXCLUSIVE   JURISDICTION OF ANY COURT OF THE PROVINCE OF ONTARIO IN ANY ACTION OR   PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR FOR   RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT AND EACH GRANTOR HEREBY   IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF   SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT   AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO   -24-   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT   OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT   THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS   AGAINST A GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.   (c) WAIVER OF RIGHT TO TRIAL BY JURY. TO THE EXTENT PERMITTED   BY APPLICABLE LAW, EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES   ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION   ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR   INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH   RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH   CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN   CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND   CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE   DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS   AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH   ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO   THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.   (d) Each party to this Agreement irrevocably consents to service of process in the   manner provided for notices in Section 6.01. Nothing in this Agreement will affect the right of any party   to this Agreement to serve process in any other manner permitted by law.   Section 6.10. Headings. Article and Section headings and the Table of Contents used   herein are for convenience of reference only, are not part of this Agreement and are not to affect the   construction of, or to be taken into consideration in interpreting, this Agreement.   Section 6.11. Security Interest Absolute. To the extent permitted by applicable law, all   rights of the Administrative Agent hereunder, the Security Interest, the grant of a security interest in the   Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional   irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan   Document, any agreement with respect to any of the Obligations or any other agreement or instrument   relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any   other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any   departure from the Credit Agreement, any other Loan Document or any other agreement or instrument,   (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment   or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the   Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a   discharge of, any Grantor in respect of the Obligations or this Agreement.   Section 6.12. Termination or Release.   (a) This Agreement, the Security Interest and all other security interests granted   hereby shall terminate with respect to all Obligations and any Liens arising therefrom shall be   automatically released when all the outstanding Obligations (in each case other than contingent   indemnification obligations not yet accrued and payable) have been paid in full and the Lenders have no   further commitment to lend under the Credit Agreement, the Outstanding Amount of L/C Obligations   have been either reduced to zero, back-stopped by a letter of credit in form and substance satisfactory to   the Administrative Agent in its sole discretion or Cash Collateralized and the L/C Issuers have no further   obligations to issue Letters of Credit under the Credit Agreement.   -25-   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   (b) A Grantor shall automatically be released from its obligations hereunder as   provided in Section 9.12 of the Credit Agreement; provided that the Lenders shall have consented to such   transaction (to the extent required by the Credit Agreement) and the terms of such consent did not provide   otherwise.   (c) Upon any sale or other transfer by any Grantor of any Collateral that is permitted   under the Credit Agreement (other than a sale to another Grantor), or upon the effectiveness of any   written consent to the release of the security interest granted hereby in any Collateral pursuant to Section   9.12 or 10.01 of the Credit Agreement, the security interest of such Grantor in such Collateral shall be   automatically released.   (d) In connection with any termination or release pursuant to paragraph (a), (b) or (c)   of this Section 6.12, the Administrative Agent shall execute and deliver to any Grantor, at such Grantor's   expense, all documents that such Grantor shall reasonably request to evidence such termination or release,   in each case in accordance with the terms of Section 9.12 of the Credit Agreement. Any execution and   delivery of documents pursuant to this Section 6.12 shall be without recourse to or warranty by the   Administrative Agent.   Section 6.13. Additional Grantors. Pursuant to Section 6.11 of the Cred it Agreement,   certain Persons that were not in existence or were not Grantors on the date of the Credit Agreement are   required to or may enter into this Agreement as Grantors by execution and delivery of a Security   Agreement Supplement in the Form of Exhibit I hereto by the Administrative Agent and such Grantor.   Upon such execution and delivery, such Person shall become a Grantor hereunder with the same force   and effect as if originally named as a Grantor herein. The execution and delivery of any such instrument   shall not require the consent of any other Grantor hereunder. The rights and obligations of each Grantor   hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party   to this Agreement.   Section 6.14. Administrative Agent Appointed Attorney-in-Fact. Each Grantor hereby   appoints the Administrative Agent the attorney-in-fact of such Grantor for the purpose of carrying out the   provisions of this Agreement and taking any action and executing any instrument that the Administrative   Agent may deem necessary or advisable to accomplish the purposes hereof at any time after and during   the continuance of an Event of Default, which appointment is irrevocable and coupled with an interest.   Without limiting the generality of the foregoing, the Administrative Agent shall have the right, upon the   occurrence and during the continuance of an Event of Default and notice by the Administrative Agent to   each Grantor of its intent to exercise such rights, with full power of substitution either in the   Administrative Agent's name or in the name of such Grantor (a) to receive, endorse, assign and/or deliver   any and all notes, acceptances, cheques, drafts, money orders or other evidences of payment relating to   the Collateral or any part thereof; (b) to demand, collect, receive payment of, give receipt for and give   discharges and releases of all or any of the Collateral; (c) to sign the name of any Grantor on any invoice   or bill of lading relating to any of the Collateral; (d) to send verifications of Accounts to any Account   Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any   court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce   any rights in respect of any Collateral; (f) to settle, compromise, compound, adjust or defend any actions,   suits or proceedings relating to all or any of the Collateral; (g) to notify, or to require any Grantor to   notify, Account Debtors to make payment directly to the Administrative Agent; (h) to make, settle and   adjust claims in respect of General Collateral under policies of insurance, including endorsing the name of   any Grantor on any cheque, draft, instrument or other item of payment for the proceeds of such policies of   insurance, making all determinations and decisions with respect thereto and obtaining or maintaining the   policies of insurance required by Section 6.07 of the Credit Agreement or paying any premium in whole   -26-   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   or in part relating thereto; and (i) to use, sell, assign, transfer, pledge, make any agreement with respect to   or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry   out the purposes of this Agreement, as fully and completely as though the Administrative Agent were the   absolute owner of the Collateral for all purposes; provided that nothing herein contained shall be   construed as requiring or obligating the Administrative Agent to make any commitment or to make any   inquiry as to the nature or sufficiency of any payment received by the Administrative Agent, or to present   or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the   moneys due or to become due in respect thereof or any property covered thereby. The Administrative   Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of   the exercise of the powers granted to them herein. No Agent-Related Person shall be liable in the absence   of its own gross negligence or willful misconduct, as determined by a final judgment of a court of   competent jurisdiction. All sums disbursed by the Administrative Agent in connection with this   paragraph, including reasonable legal fees, court costs, expenses and other charges relating thereto, shall   be payable, within 10 days of demand, by the Grantors to the Administrative Agent and shall be   additional Obligations secured hereby.   Section 6.15. General Authority of the Administrative Agent. By acceptance of the   benefits of this Agreement and any other Collateral Documents, each Secured Party (whether or not a   signatory hereto) shall be deemed irrevocably (a) to consent to the appointment of the Administrative   Agent as its agent hereunder and under such other Collateral Documents, (b) to confirm that the   Administrative Agent shall have the authority to act as the exclusive agent of such Secured Party for the   enforcement of any provisions of this Agreement and such other Collateral Documents against any   Grantor, the exercise of remedies hereunder or thereunder and the giving or withholding of any consent or   approval hereunder or thereunder relating to any Collateral or any Grantor's obligations with respect   thereto, (c) to agree that it shall not take any action to enforce any provisions of this Agreement or any   other Collateral Document against any Grantor, to exercise any remedy hereunder or thereunder or to give   any consents or approvals hereunder or thereunder except as expressly provided in this Agreement or any   other Collateral Document and (d) to agree to be bound by the terms of this Agreement and any other   Collateral Documents.   Section 6.16. Reasonable Care. The Administrative Agent is required to exercise   reasonable care in the custody and preservation of any of the Collateral in its possession; provided that the   Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation   of any of the Collateral, if such Collateral is accorded treatment substantially similar to that which the   Administrative Agent accords its own property.   Section 6.17. Reinstatement. This Agreement shall continue to be effective, or be   reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is   rescinded or must otherwise be restored or returned by the Administrative Agent or any other Secured   Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of a Grantor or any other   Loan Party, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee   or similar officer for, a Grantor or any other Loan Party or any substantial part of its property, or   otherwise, all as though such payments had not been made.   Section 6.18. Miscellaneous.   (a) The Administrative Agent may execute any of the powers granted under this   Agreement and perform any duty hereunder either directly or by or through agents or attorneys-in-fact.   -27-   LEGAL 23770880 12 CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   (b) The Administrative Agent shall not be deemed to have actual, constructive, direct   or indirect notice or knowledge of the occurrence of any Event of Default unless and until the   Administrative Agent shall have received a notice of Event of Default or a notice from the Grantors or the   Secured Parties to the Administrative Agent in its capacity as Administrative Agent indicating that an   Event of Default has occurred. The Administrative Agent shall have no obligation either prior to or after   receiving such notice to inquire whether an Event of Default has, in fact, occurred and shall be entitled to   rely conclusively, and shall be fully protected in so relying, on any notice so furnished to it.   (c) Each Grantor hereby acknowledges receipt of a signed copy of this Agreement   and hereby waives, to the extent permitted by applicable law, the requirement to be provided with a copy,   of any verification statement issued in respect of a financing statement or financing change statement   filed under the PPSA in connection with this Agreement to perfect the Security Interest created herein.   Section 6.19. English Agreement   (a) The parties hereto confirm that it is their wish that this Agreement, as well as any   other documents relating to this Agreement, including notices, schedules and authorizations, have been   and shall be drawn up in the English language only. Les parties aux presentes confirment leur volonte   que la presente convention, de meme que tous les documents s'y rattachant, y compris tout avis, annexe et   automation, soient rediges en anglais seulement.   [Signatures on following page]   LEGAL 23770880.12   -28-   CANADIAN PLEDGE AND SECURITY AGREEMENT     

 

EXECUTION COPY   IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of   the dav and year first above written.   AVAYA CANADA CORP.. as Grantor   Bv:   / /   l t e 7 \JI»ce/"Pres\^£*i,4"-" ^ M J "1 f-e&.Si«tr   v..-   CANADIAN M.RIJGE ANDSECURiTY AGREEMENT     

 

EXECUTION COPY   CITIBANK.N.A., as Administrative Agent   ,, / , J*   Name: /   Title: ,f repaan Mackay   president and Directo   CANADIAN PLEDGE AND SECURITY AGREEMENT

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