GENERAL SECURITY AGREEMENT Dated as of June [ ], 2007
Exhibit
10.4
Dated
as of June [ ], 2007
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TO:
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Name:
CIT
FINANCIAL LTD.
Address:
207
Queen’s Quay West, Toronto, Ontario M5J 1A7
Attention:
Legal
Department
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
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RECITALS:
A. INTERNATIONAL
CONDUITS LTD. (the
“Debtor”)
is, or
may become, indebted or liable to CIT
FINANCIAL LTD.
(the
“Creditor”)
pursuant to the terms of a credit agreement dated as of the date hereof (as
amended, supplemented, restated or replaced from time to time, the “Credit
Agreement”).
B. To
secure
the payment and performance of the Obligations, the Debtor has agreed to grant
to the Creditor the Security Interests in respect of the Collateral in
accordance with the terms of this Agreement.
For
good
and valuable consideration, the receipt and adequacy of which are acknowledged
by the Debtor, the Debtor agrees with and in favour of the Creditor as
follows:
1. Definitions.
In this
Agreement capitalized terms used but not otherwise defined herein shall have
the
meanings given to them in the Credit Agreement. The rules of construction
specified in Section
1.2
of the
Credit Agreement shall also apply to this Agreement. Unless otherwise defined
herein or in the Credit Agreement, all terms that are defined in the PPSA shall
have the same meanings herein as given to them in the PPSA. As used in this
Agreement, the following terms have the following meanings:
“Accessions”,
“Account”,
“Chattel
Paper”,
“Certificated
Security”,
“Consumer
Goods”,
“Document
of Title”,
“Equipment”,
“Futures
Account”,
“Futures
Contract”,
“Futures
Intermediary”,
“Goods”,
“Instrument”,
“Intangible”,
“Inventory”,
“Investment
Property”,
“Money”,
“Proceeds”,
“Securities
Account”,
“Securities
Intermediary”,
“Security”,
“Security
Certificate”,
“Security
Entitlement”,
and
“Uncertificated
Security”
have the
meanings given to them in the PPSA.
“Agreement”
means
this agreement, including the schedules and recitals to this agreement, as
it or
they may be amended, supplemented, restated or replaced from time to time,
and
the expressions “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar
expressions refer to this Agreement and not to any particular section or other
portion of this Agreement.
“Books
and Records”
means
all books, records, files, papers, disks, documents and other repositories
of
data recording in any form or medium, evidencing or relating to the Personal
Property of the Debtor which are at any time owned by the Debtor or to which
the
Debtor (or any Person on the Debtor’s behalf) has access.
“Business
Day”
means
any day other than a Saturday, Sunday or statutory holiday in the Province
of
Ontario.
“Collateral”
means
all of the present and after-acquired:
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(i)
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undertaking;
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(ii)
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Personal
Property (including, without limitation, all Books and Records, Permits
and any Personal Property that may be described in any schedule to
this
Agreement or any schedules, documents or listings that the Debtor
may from
time to time provide to the Creditor in connection with this Agreement),
except for any Securities held by the Debtor in any of its Subsidiaries;
and
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(iii)
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real
property (including any real property that may be described in any
schedule to this Agreement or any schedules, documents or listings
that
the Debtor may from time to time provide to the Creditor in connection
with this Agreement and including all Fixtures (together with accessions
thereto and replacement parts therefor), improvements, buildings
and other
structures placed, installed or erected from time to time on any
such real
property), of
the Debtor, including all such property in which the Debtor now or
in the
future has any right, title or interest whatsoever, whether owned,
leased,
licensed, possessed or otherwise held by the Debtor, and all Proceeds
thereof (including, without limitation, all insurance and claims
for
insurance effected or held for the benefit of the Debtor in respect
thereof), wherever located.
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“Contracts”
means
all contracts, licences and agreements to which the Debtor is at any time a
party or pursuant to which the Debtor has at any time acquired rights, and
includes (i) all rights of the Debtor to receive money due and to become due
to
it in connection with a contract, licence or agreement, (ii) all rights of
the
Debtor to damages arising out of, or for breach or default in respect of, a
contract, licence or agreement, and (iii) all rights of the Debtor to perform
and exercise all remedies in connection with a contract, licence or
agreement.
“Copyrights”
means
all of the following now owned or hereafter acquired by a Debtor: (a) all
copyright rights in any work subject to the copyright laws of Canada or any
other country, whether as author, assignee, transferee or otherwise, and (b)
all
registrations and applications for registration of any such copyright in Canada
or any other country, including registrations, recordings, supplemental
registrations and pending applications for registration in the Canadian
Intellectual Property Office or any similar office or agency in any other
country or any political subdivision thereof, including those listed on
Schedule
A
hereto.
“Credit
Agreement”
has the
meaning set out in the recitals hereto.
“Creditor”
has the
meaning set out in the recitals hereto.
“Debtor”
has the
meaning set out in the recitals hereto.
“Fixtures”
means,
with respect to the Debtor, all “fixtures” (as defined in the PPSA), including,
without limitation, all trade fixtures, facilities and equipment, however
affixed or attached to real property or buildings or other structures on real
property, now owned or hereafter acquired by the Debtor.
“Governmental
Authority”
means
the Government of Canada, any other nation or any political subdivision thereof,
whether provincial, state, territorial or local, and any agency, authority,
instrumentality, regulatory body, court, central bank, fiscal or monetary
authority or other authority regulating financial institutions, and any other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, including
the
Bank Committee on Banking Regulation and Supervisory Practices of the Bank
of
International Settlements.
“Industrial
Design”
means
a
design for a finished article which has been registered under the Industrial
Design Act
(Canada).
“Intellectual
Property Rights”
means
all industrial and intellectual and similar property rights of the Debtor of
every kind and nature or in which the Debtor has any right, title or interest,
including Copyrights, Patents, unpatented inventions, Trade marks, Industrial
Designs, confidential or proprietary technical and business information,
integrated circuit topographies, know-how, show-how and trade secrets, all
Contracts related to any such industrial and intellectual property rights,
software and databases and all embodiments or fixations thereof and related
documentation, registrations and franchises, and all additions, improvements
and
accessions to, and books and records describing or used in connection with,
any
of the foregoing.
“Issuer”
has
the
meaning given to that term in the STA.
“Lien”
means,
(a) with respect to any asset, any mortgage, deed of trust, lien, pledge,
hypothec (whether movable or immovable), hypothecation, encumbrance, charge,
security interest, royalty interest, adverse claim, defect to title or right
of
set off in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease, title retention agreement or
consignment agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to any asset, (c) any purchase
option, call or similar right of a third party with respect to such asset,
(d)
any netting arrangement, defeasance arrangement or reciprocal fee arrangement,
and (e) any other arrangement having the effect of providing
security.
“Obligations”
means
all present and future indebtedness, liabilities and obligations of any and
every kind, nature and description (whether direct or indirect, joint or
several, absolute or contingent, matured or unmatured) of the Debtor to the
Creditor under, in connection with or with respect to the Loan Documents, and
any unpaid balance thereof.
“Organizational
Documents”
means,
with respect to any Person, such Person’s articles or other charter documents,
by-laws, unanimous shareholder agreement, partnership agreement or trust
agreement, as applicable, and any and all other similar agreements, documents
and instruments relative to such Person.
-2-
“Patents”
means
all of the following now owned or hereafter acquired by the Debtor: (a) all
letters patent of Canada or any other country, including registrations
recordings and pending application in Canadian Intellectual Property Office
or
any similar offices in any other country, including those listed on Schedule
A
hereto,
and (b) all reissues, continuations, divisions, continuations-in-part, renewals
or extension thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed
therein.
“Permits”
means
all permits, licences, waivers, exemptions, consents, certificates,
authorizations, approvals, franchises, rights-of-way, easements and entitlements
that the Debtor has, requires or is required to have, to own, possess or operate
any of its property or to operate and carry on any part of its
business.
“Permitted
Liens”
means
the Security Interests and all other Liens permitted in writing by the Creditor
in the Credit Agreement.
“Person”
includes
any natural person, corporation, company, limited liability company, unlimited
liability company, trust, joint venture, association, incorporated organization,
partnership, Governmental Authority or other entity.
“Personal
Property”
means
personal property and includes Accounts, Chattel Paper, Contracts Documents
of
Title, Equipment, Goods, Instruments, Intangibles, Intellectual Property Rights,
Inventory, Investment Property, Money, and Securities.
“Pledged
Certificated Securities”
means
any
and all Collateral that is a Certificated Security.
“Pledged
Futures Contracts”
means
any
and all Collateral that is a Futures Contract.
“Pledged
Futures Accounts”
means
any
and all Collateral that is a Futures Account.
“Pledged
Futures Intermediary”
means,
at
any time, any Person which is at such time is a Futures Intermediary at which
a
Pledged Futures Account is maintained.
“Pledged
Futures Intermediary’s Jurisdiction”
means,
with respect to any Pledged Futures Intermediary, its jurisdiction as determined
under section 7.1(4) of the PPSA.
“Pledged
Issuer”
means,
at any time, any Person which is at such time an Issuer with respect to any
Pledged Securities or Pledged Security Entitlements.
“Pledged
Issuer’s Jurisdiction”
means,
with respect to any Pledged Issuer, its jurisdiction as determined under section
44 of the STA.
“Pledged
Security Certificates”
means
any and all Security Certificates representing the Pledged Certificated
Securities.
“Pledged
Securities”
means
any
and all Collateral that is a Security.
“Pledged
Securities Accounts”
means
any
and all Collateral that is a Securities Account.
“Pledged
Securities Intermediary”
means,
at
any time, any Person which is at such time is a Securities Intermediary at
which
a Pledged Securities Account is maintained.
“Pledged
Securities Intermediary’s Jurisdiction”
means,
with respect to any Securities Intermediary, its jurisdiction as determined
under section 45(2) of the STA.
“Pledged
Security Entitlements”
means
any
and all Collateral that is a Security Entitlement.
“Pledged
Uncertificated Securities”
means
any
and all Collateral that is an Uncertificated Security.
“PPSA”
means
the Personal
Property Security Act as
in
effect from time to time in the Province of Ontario including all regulations
from time to time made under such legislation; provided that, if validity,
perfection or the effect of perfection or non-perfection or the priority of
the
Security Interest granted hereunder in any Collateral or the rights and remedies
of the Creditor are governed by the PPSA or other similar legislation as in
effect in a jurisdiction other than Ontario, then "PPSA"
shall
mean the Personal Property Security Act or other similar legislation, including
all regulations from time to time made under such legislation, as in effect
from
time to time in such other jurisdiction for purposes of the provisions hereof
relating to such validity, perfection, effect of perfection or non-perfection,
to priority or to such rights and remedies.
“Prime
Rate”
means
the
rate announced by the Creditor from time to time as its prime rate for Canadian
Dollar commercial loans made in Canada.
“Proceeds”
means
all “proceeds” (as defined in the PPSA), including without limitation (i) any
and all proceeds of any insurance, indemnity, warranty or guarantee payable
to
the Creditor or to the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due
and
payable to the Debtor from time to time in connection with the requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under colour
of
governmental authority), (iii) any and all profits, rentals or receipts, in
whatever form, arising from the collection, sale, lease, exchange, assignment,
licensing or other disposition of, or realization upon, any Collateral and
(iv)
any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
-3-
“Receiver”
means a
receiver, a manager or a receiver and manager.
“Release
Date”
means
the date on which all the Obligations have been indefeasibly paid and discharged
in full and the Creditor has no further obligations to the Debtor under the
Loan
Documents pursuant to which further Obligations might arise.
“Security
Interests”
means
the Liens created by the Debtor in favour of the Creditor under this
Agreement.
“STA”
means
the Securities
Transfer Act
of the
Province of Ontario, as such legislation may be amended, renamed or replaced
from time to time, and includes all regulations from time to time made under
such legislation.
“Subsidiary”
means,
with respect to any Person (the “parent”)
at any
date, any other Person (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is,
as of
such date, otherwise Controlled, by the parent or one or more Subsidiaries
of
the parent or by the parent and one or more Subsidiaries of the
parent.
“Trademarks”
means
all of the following now owned or hereafter acquired by the debtor: (a) all
trademarks, service marks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, trade dress, logos, other source
or business identifiers, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all registration and recording applications filed in connection
therewith, including registrations and registration applications in the Canadian
Intellectual Property Office or any similar offices in any other country or
any
political subdivision thereof, and all extensions or renewals thereof, including
those listed on Schedule
A
hereto,
(b) all goodwill associated therewith or symbolized thereby and (c) all other
assets, rights and interest that uniquely reflect or embody such
goodwill.
“ULC”
means an
Issuer that is an unlimited company or unlimited liability company.
“ULC
Laws”
means
the Companies
Act
(Nova
Scotia), the Business
Corporations Act
(Alberta), and any future laws governing ULCs.
“ULC
Shares”
means
shares or other equity interests in the capital stock of a ULC.
2. Grant
of Security Interests.
As
general and continuing collateral security for the prompt and complete payment
and performance when due of all of the Obligations, the Debtor pledges,
hypothecates, mortgages, charges, transfers and assigns (by way of security)
to
the Creditor, and grants to the Creditor a security interest in, the
Collateral.
3. Limitations
on Grant of Security Interests.
If the
grant of any Security Interest in respect of any Contract, Intellectual Property
Right or Permit under Section 2 would result in the termination or breach of
such Contract, Intellectual Property Right or Permit, then such Contract,
Intellectual Property Right or Permit will not be subject to any Security
Interest under Section 2 but will be held in trust by the Debtor for the benefit
of the Creditor and, on the exercise by the Creditor of any of its rights or
remedies under this Agreement following an Event of Default will be assigned
by
the Debtor as directed by the Creditor, provided
that
the
Security Interests shall attach to such Contract, Intellectual Property Right
or
Permit, or applicable portion thereof, immediately at such time as the condition
causing such termination or breach is remedied. In addition, the Security
Interests do not attach to Consumer Goods or extend to the last day of the
term
of any lease or agreement for lease of real property. Such last day will be
held
by the Debtor in trust for the Creditor and, on the exercise by the Creditor
of
any of its rights or remedies under this Agreement following an Event of
Default, will be assigned by the Debtor as directed by the Creditor. For greater
certainty, no Intellectual Property Right shall be transferred to the Creditor
by sole virtue of the grant of the Security Interests contained in Section
2.
4. Attachment;
No Obligation to Advance.
The
Debtor confirms that value has been given by the Creditor to the Debtor, that
the Debtor has rights in the Collateral existing at the date of this Agreement
and that the Debtor and the Creditor have not agreed to postpone the time for
attachment of any of the Security Interests to any of the Collateral. The
Security Interests will have effect and be deemed to be effective whether or
not
the Obligations or any part thereof are owing or in existence before or after
or
upon the date of this Agreement. Neither the execution and delivery of this
Agreement nor the provision of any financial accommodation by the Creditor
shall
oblige the Creditor to make any financial accommodation or further financial
accommodation available to the Debtor or any other Person.
-4-
5. Representations
and Warranties.
The
Debtor represents and warrants to the Creditor that, as of the date of this
Agreement:
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(i)
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Debtor
Information.
All of the information set out in Schedule A is accurate and
complete.
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(ii)
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Title;
No Other Security Interests.
Except for Permitted Liens, the Debtor owns (or, with respect to
any
leased or licensed property forming part of the Collateral, holds
a valid
leasehold or licensed interest in) the Collateral free and clear
of any
Liens. The Debtor is the record and beneficial owner of all Collateral
that is Investment Property. No security agreement, financing statement
or
other notice with respect to any or all of the Collateral is on file
or on
record in any public office, except for filings with respect to Permitted
Liens.
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(iii)
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Amount
of Accounts.
The amount represented by the Debtor to the Creditor from time to
time as
owing by each account debtor or by all account debtors in respect
of the
Accounts will at such time be the correct amount so owing by such
account
debtor or debtors and, unless disclosed in writing by the Debtor
to the
Creditor at that time, will be owed free of any dispute, set-off
or
counterclaim. Except as disclosed in writing by the Debtor to the
Creditor, neither the Debtor nor (to the best of the Debtor’s knowledge)
any other party to any Account or Contract is in default or is likely
to
become in default in the performance or observance of any of the
terms of
such Account or Contract where such default is or could reasonably
be
expected to be materially adverse to the Debtor or the
Creditor.
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(iv)
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Consent
to Transfer.
For the purposes of complying with any transfer restrictions contained
in
the Organizational Documents of any Pledged Issuer, the Debtor hereby
irrevocably consents to any transfer of the Pledged Securities of
such
Pledged Issuer.
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(v)
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Intellectual
Property Rights.
All Intellectual Property Rights, the nature of the Debtors right,
title
or interest therein, and all registrations and applications for
registrations pertaining thereto, are described in Schedule A to
this
Agreement. Each Intellectual Property Right is valid, subsisting,
unexpired, enforceable, and has not been abandoned. In the case of
copyright works, the Debtor has obtained full and irrevocable waivers
of
all moral rights or similar rights pertaining to such works. Except
as set
out in Schedule A to this Agreement, none of the Intellectual Property
Rights have been licensed or franchised by the Debtor to any Person
or, to
the best of the Debtor’s knowledge, infringed or otherwise misused by any
Person. Except as set out in Schedule A to this Agreement, the exercise
of
any Intellectual Property Right, or any licensee or franchisee thereof,
has not infringed or otherwise misused any intellectual property
right of
any other Person, and the Debtor has not received and is not aware
of any
claim of such infringement or other
misuse.
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(vi)
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Due
Authorization.
The Pledged Securities have been duly authorized and validly issued
and
are fully paid and non-assessable.
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(vii)
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Warrants,
Options, etc.
There are no outstanding warrants, options or other rights to purchase,
or
other agreements outstanding with respect to, or property that is
now or
hereafter convertible into, or that requires the issuance or sale
of, any
Pledged Securities.
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(viii)
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No
Required Disposition.
There is no existing agreement, option, right or privilege capable
of
becoming an agreement or option pursuant to which the Debtor would
be
required to sell or otherwise dispose of any Pledged Securities or
under
which any Pledged Issuer thereof has any obligation to issue any
Securities of such Pledged Issuer to any
Person.
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6. Survival
of Representations and Warranties.
All
representations and warranties made by the Debtor in this Agreement (a) are
material, (b) will be considered to have been relied on by the Creditor, and
(c)
will survive the execution and delivery of this Agreement or any investigation
made at any time by or on behalf of the Creditor and any disposition or payment
of the Obligations until the Release Date.
-5-
7. Covenants.
The
Debtor covenants and agrees with the Creditor that:
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(i)
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Further
Documentation.
The Debtor will from time to time, at the expense of the Debtor,
promptly
and duly authorize, execute and deliver such further instruments
and
documents, and take such further action, as the Creditor may request
for
the purpose of obtaining or preserving the full benefits of, and
the
rights and powers granted by, this Agreement (including the filing
of any
financing statements or financing change statements under any applicable
legislation with respect to the Security Interests). The Debtor
acknowledges that this Agreement has been prepared based on the existing
laws in the Province referred to in the “Governing Law” section of this
Agreement and that a change in such laws, or the laws of other
jurisdictions, may require the execution and delivery of different
forms
of security documentation. Accordingly, the Debtor agrees that the
Creditor will have the right to require that this Agreement be amended,
supplemented, restated or replaced, and that the Debtor will immediately
on request by the Creditor authorize, execute and deliver any such
amendment, supplement, restatement or replacement (i) to reflect
any
changes in such laws, whether arising as a result of statutory amendments,
court decisions or otherwise, (ii) to facilitate the creation and
registration of appropriate security in all appropriate jurisdictions,
or
(iii) if the Debtor merges or amalgamates with any other Person or
enters
into any corporate reorganization, in each case in order to confer
on the
Creditor Liens similar to, and having the same effect as, the Security
Interests.
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(ii)
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Maintenance
of Records.
The Debtor will keep and maintain accurate and complete records of
the
Collateral, including a record of all payments received and all credits
granted with respect to the Accounts and Contracts. At the written
request
of the Creditor, the Debtor will ▇▇▇▇ any Collateral specified by
the
Creditor to evidence the existence of the Security
Interests.
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(iii)
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Right
of Inspection.
The Creditor may, at all times during normal business hours, without
charge, examine and make copies of all Books and Records, and may
discuss
the affairs, finances and accounts of the Debtor with its officers
and
accountants. The Creditor may also, without charge, enter the premises
of
the Debtor where any of the Collateral is located for the purpose
of
inspecting the Collateral, observing its use or otherwise protecting
its
interests in the Collateral. The Debtor, at its expense, will provide
the
Creditor with such clerical and other assistance as may be reasonably
requested by the Creditor to exercise any of its rights under this
paragraph.
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(iv)
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Limitations
on Other Liens.
The Debtor will not create, incur or permit to exist, and will defend
the
Collateral against, and will take such other action as is necessary
to
remove, any and all Liens in and other claims affecting the Collateral,
other than the Permitted Liens, and the Debtor will defend the right,
title and interest of the Creditor in and to the Collateral against
the
claims and demands of all Persons.
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(v)
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Limitations
on Dispositions of Collateral.
The Debtor will not, without the Creditor’s prior written consent, sell,
lease or otherwise dispose of any of the Collateral, except that
Inventory
may be sold, leased or otherwise disposed of and, subject to the
terms of
this Agreement, Accounts may be collected, in the ordinary course
of the
Debtor’s business. Following an Event of Default, all Proceeds of the
Collateral (including all amounts received in respect of Accounts)
received by or on behalf of the Debtor, whether or not arising in
the
ordinary course of the Debtor’s business, will be received by the Debtor
as trustee for the Creditor and will be immediately paid to the
Creditor.
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(vi)
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Limitations
on Modifications, Waivers, Extensions.
Other than as permitted by paragraph (g) below, the Debtor will not
(i)
amend, modify, terminate or waive any provision of any Permit, Contract
or
any document giving rise to an Account in any manner which is or
could
reasonably be expected to be materially adverse to the Debtor or
the
Creditor, or (ii) fail to exercise promptly and diligently its rights
under each Contract and each document giving rise to an Account if
such
failure is or could reasonably be expected to be materially adverse
to the
Debtor or the Creditor.
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-6-
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(vii)
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Maintenance
of Collateral.
The Debtor will maintain all tangible Collateral in good operating
condition, ordinary wear and tear excepted, and the Debtor will provide
all maintenance, service and repairs necessary for such purpose.
The
Debtor shall maintain in good standing all registrations and applications
with respect to the Intellectual Property Rights except to the extent
that
any failure to do so could not reasonably be expected to be materially
adverse to the Debtor or the
Creditor.
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(viii)
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Further
Identification of Collateral.
The Debtor will promptly furnish to the Creditor such statements
and
schedules further identifying and describing the Collateral, and
such
other reports in connection with the Collateral, as the Creditor
may from
time to time reasonably request, including an updated list of any
motor
vehicles or other “serial number” goods owned by the Debtor and classified
as Equipment, including vehicle identification
numbers.
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(ix)
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Merger
or Consolidation.
The Debtor will not permit any Pledged Issuer to merge or consolidate
unless all of the outstanding capital stock of the surviving or resulting
corporation is, upon such merger or consolidation, pledged hereunder
and
no cash, securities or other property is distributed in respect of
the
outstanding shares of any other constituent
corporation.
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(x)
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Agreements
re Intellectual Property Rights.
Promptly upon request from time to time by the Creditor, the Debtor
will
authorize, execute and deliver any and all agreements, instruments,
documents and papers that the Creditor may request to evidence the
Security Interests in any Intellectual Property Rights and, where
applicable, the goodwill of the business of the Debtor connected
with the
use of, and symbolized by, any such Intellectual Property
Rights.
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(xi)
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Instruments;
Documents of Title; Chattel Paper.
Promptly upon request from time to time by the Creditor, the Debtor
will
deliver to the Creditor, endorsed and/or accompanied by such instruments
of assignment and transfer in such form and substance as the Creditor
may
reasonably request, any and all Instruments, Documents of Title and
Chattel Paper included in or relating to the Collateral as the Creditor
may specify in its request.
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|
(xii)
|
Pledged
Certificated Securities.
The Debtor will deliver to the Creditor any and all Pledged Security
Certificates and other materials as may be required from time to
time to
provide the Creditor with control over all Pledged Certificated Securities
in the manner provided under section 23 of the STA. At the request
of the
Creditor, the Debtor will cause all Pledged Security Certificates
to be
registered in the name of the Creditor or its
nominee.
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|
(xiii)
|
Pledged
Uncertificated Securities.
The Debtor will deliver to the Creditor any and all such documents,
agreements and other materials as may be required from time to time
to
provide the Creditor with control over all Pledged Uncertificated
Securities in the manner provided under section 24 of the
STA.
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|
(xiv)
|
Pledged
Security Entitlements.
The Debtor will deliver to the Creditor any and all such documents,
agreements and other materials as may be required from time to time
to
provide the Creditor with control over all Pledged Security Entitlements
in the manner provided under section 25 or 26 of the
STA.
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|
(xv)
|
Pledged
Futures Contracts.
The Debtor will deliver to the Creditor any and all such documents,
agreements and other materials as may be required from time to time
to
provide the Creditor with control over all Pledged Futures Contracts
in
the manner provided under subsection 1(2) of the
PPSA.
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|
(xvi)
|
Partnerships,
Limited Liability Companies.
The Debtor will ensure that the terms of any interest in a partnership
or
limited liability company that is Collateral will expressly provide
that
such interest is a “security” for the purposes of the
STA.
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-7-
|
(xvii)
|
Transfer
Restrictions.
If the constating documents of any Pledged Issuer restrict the transfer
of
the Securities of such Pledged Issuer, then the Debtor will deliver
to the
Creditor a certified copy of a resolution of the directors, shareholders,
unitholders or partners of such Pledged Issuer, as applicable, consenting
to the transfer(s) contemplated by this Agreement, including any
prospective transfer of the Collateral by the Creditor upon a realization
on the Security Interests.
|
|
(xviii)
|
Notices.
The Debtor will advise the Creditor promptly, in reasonable detail,
of:
|
|
(A)
|
any
change to a Pledged Securities Intermediary’s Jurisdiction, Pledged
Issuer’s Jurisdiction, or Pledged Future Intermediary’s
Jurisdiction;
|
|
(B)
|
any
change in the location of the jurisdiction of incorporation or
amalgamation, chief executive office, or domicile of the
Debtor;
|
|
(C)
|
any
change in the name of the Debtor;
|
|
(D)
|
any
merger or amalgamation of the Debtor with any other
Person;
|
|
(E)
|
any
additional jurisdiction in which the Debtor carries on business or
has
tangible Personal Property;
|
|
(F)
|
any
additional jurisdiction in which material account debtors of the
Debtor
are located;
|
|
(G)
|
any
acquisition of any right, title or interest in real property by the
Debtor;
|
|
(H)
|
the
creation or acquisition of any Subsidiary of the
Debtor;
|
|
(I)
|
any
Lien (other than Permitted Liens) on, or claim asserted against,
any of
the Collateral; or
|
|
(J)
|
the
occurrence of any event, claim or occurrence that could reasonably
be
expected to have a material adverse effect on the value of the Collateral
or on the Security Interests.
|
The
Debtor will not effect or permit any of the changes referred to in clauses
(ii)
through (viii) above unless all filings have been made and all other actions
taken that are required in order for the Creditor to continue at all times
following such change to have a valid and perfected first priority Security
Interest in respect of all of the Collateral.
8. Voting
Rights.
Unless
an Event of Default has occurred and is continuing, the Debtor will be entitled
to exercise all voting power from time to time exercisable in respect of the
Pledged Securities and Pledged Security Entitlements and give consents, waivers
and ratifications in respect thereof; provided, however, that no vote will
be
cast or consent, waiver or ratification given or action taken which would be,
or
would have a reasonably likelihood of being, prejudicial to the interests of
the
Creditor or which would have the effect of reducing the value of the Collateral
as security for the Obligations or imposing any restriction on the
transferability of any of the Collateral. Unless an Event of Default has
occurred and is continuing the Creditor shall, from time to time at the request
and expense of the Debtor, execute or cause to be executed, in respect of all
Pledged Securities that are registered in the name of the Creditor or its
nominee, valid proxies appointing the Debtor as its (or its nominee’s) proxy to
attend, vote and act for and on behalf of the Creditor or such nominee, as
the
case may be, at any and all meetings of the applicable Pledged Issuer’s
shareholders or debt holders, all Pledged Securities that are registered in
the
name of the Creditor or such nominee, as the case may be, and to execute and
deliver, consent to or approve or disapprove of or withhold consent to any
resolutions in writing of shareholders or debt holders of the applicable Pledged
Issuer for and on behalf of the Creditor or such nominee, as the case may be.
Immediately upon the occurrence and during the continuance of any Event of
Default, all such rights of the Debtor to vote and give consents, waivers and
ratifications will cease and the Creditor or its nominee will be entitled to
exercise all such voting rights and to give all such consents, waivers and
ratifications.
-8-
9. Dividends;
Interest.
Unless
an Event of Default has occurred and is continuing, the Debtor will be entitled
to receive any and all cash dividends, interest, principal payments and other
forms of cash distribution on the Pledged Securities or Pledge Security
Entitlements which it is otherwise entitled to receive, but any and all stock
and/or liquidating dividends, distributions of property, returns of capital
or
other distributions made on or in respect of the Pledged Securities or Pledged
Security Entitlements, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of any Pledged Issuer or
received in exchange for the Pledged Securities, Pledged Security Entitlements
or any part thereof or as a result of any amalgamation, merger, consolidation,
acquisition or other exchange of property to which any Pledged Issuer may be
a
party or otherwise, and any and all cash and other property received in exchange
for any Pledged Securities or Pledged Security Entitlements will be and become
part of the Collateral subject to the Security Interest and, if received by
the
Debtor, will forthwith be delivered to the Creditor or its nominee (accompanied,
if appropriate, by proper instruments of assignment and/or stock powers of
attorney executed by the Debtor in accordance with the Creditor’s instructions)
to be held subject to the terms of this Agreement; and if any of the Pledged
Security Certificates have been registered in the name of the Creditor or its
nominee, the Creditor will execute and deliver (or cause to be executed and
delivered) to the Debtor all such dividend orders and other instruments as
the
Debtor may request for the purpose of enabling the Debtor to receive the
dividends or other payments which the Debtor is authorized to receive and retain
pursuant to this Section. If an Event of Default has occurred and is continuing,
all rights of the Debtor pursuant to this Section will cease and the
Creditor will have the sole and exclusive right and authority to receive and
retain the cash dividends, interest, principal payments and other forms of
cash
distribution which the Debtor would otherwise be authorized to retain pursuant
to this Section. Any money and other property paid over to or received by the
Creditor pursuant to the provisions of this Section will be retained by the
Creditor as additional Collateral hereunder and be applied in accordance with
the provisions of this Agreement.
10. Rights
on Event of Default.
If an
Event of Default has occurred and is continuing, then and in every such case
all
of the Obligations shall, at the option of the Creditor, become immediately
due
and payable and the Security Interests shall become enforceable and the
Creditor, in addition to any rights now or hereafter existing under applicable
law may, personally or by agent, at such time or times as the Creditor in its
discretion may determine, do any one or more of the following:
|
(i)
|
Rights
under PPSA, etc.
Exercise all of the rights and remedies granted to secured parties
under
the PPSA and any other applicable statute, or otherwise available
to the
Creditor by contract, at law or in
equity.
|
|
(ii)
|
Demand
Possession.
Demand possession of any or all of the Collateral, in which event
the
Debtor will, at the expense of the Debtor, immediately cause the
Collateral designated by the Creditor to be assembled and made available
and/or delivered to the Creditor at any place designated by the
Creditor.
|
|
(iii)
|
Take
Possession.
Enter on any premises where any Collateral is located and take possession
of, disable or remove such
Collateral.
|
|
(iv)
|
Deal
with Collateral.
Hold, store and keep idle, or operate, lease or otherwise use or
permit
the use of, any or all of the Collateral for such time and on such
terms
as the Creditor may determine, and demand, collect and retain all
earnings
and other sums due or to become due from any Person in respect of
any of
the Collateral.
|
|
(v)
|
Carry
on Business.
Carry on, or concur in the carrying on of, any or all of the business
or
undertaking of the Debtor and enter on, occupy and use (without charge
by
the Debtor) any of the premises, buildings, plant and undertaking
of, or
occupied or used by, the Debtor.
|
|
(vi)
|
Enforce
Collateral.
Seize, collect, receive, enforce or otherwise deal with any Collateral
in
such manner, on such terms and conditions and at such times as the
Creditor deems advisable.
|
|
(vii)
|
Dispose
of Collateral.
Realize on any or all of the Collateral and sell, lease, assign,
give
options to purchase, or otherwise dispose of and deliver any or all
of the
Collateral (or contract to do any of the above), in one or more parcels
at
any public or private sale, at any exchange, broker’s board or office of
the Creditor or elsewhere, with or without advertising or other formality,
except as required by applicable law, on such terms and conditions
as the
Creditor may deem advisable and at such prices as it may deem best,
for
cash or on credit or for future
delivery.
|
-9-
|
(viii)
|
Court-Approved
Disposition of Collateral.
Obtain from any court of competent jurisdiction an order for the
sale or
foreclosure of any or all of the
Collateral.
|
|
(ix)
|
Purchase
by Creditor.
At any public sale, and to the extent permitted by law on any private
sale, bid for and purchase any or all of the Collateral offered for
sale
and, upon compliance with the terms of such sale, hold, retain, sell
or
otherwise dispose of such Collateral without any further accountability
to
the Debtor or any other Person with respect to such holding, retention,
sale or other disposition, except as required by law. In any such
sale to
the Creditor, the Creditor may, for the purpose of making payment
for all
or any part of the Collateral so purchased, use any claim for any
or all
of the Obligations then due and payable to it as a credit against
the
purchase price.
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|
(x)
|
Collect
Accounts.
Notify the account debtors under any Accounts of the Debtor of the
assignment of such Accounts to the Creditor and direct such account
debtors to make payment of all amounts due or to become due to the
Debtor
in respect of such Accounts directly to the Creditor and, upon such
notification and at the expense of the Debtor, enforce collection
of any
such Accounts, and adjust, settle or compromise the amount or payment
of
such Accounts, in such manner and to such extent as the Creditor
deems
appropriate in the circumstances.
|
|
(xi)
|
Transfer
of Collateral.
Transfer any Collateral that is Investment Property into the name
of the
Creditor or its nominee.
|
|
(xii)
|
Voting.
Vote any or all of the Pledged Securities (whether or not transferred
to
the Creditor or its nominee) and Pledged Security Entitlements and
give or
withhold all consents, waivers and ratifications in respect thereof
and
otherwise act with respect thereto as though it were the outright
owner
thereof.
|
|
(xiii)
|
Exercise
Other Rights.
Exercise any and all rights, privileges, entitlements and options
pertaining to any Collateral that is Investment Property as if the
Creditor were the absolute owner of such Investment
Property.
|
|
(xiv)
|
Dealing
with Contracts and Permits.
Deal with any and all Contracts and Permits to the same extent as
the
Debtor might (including the enforcement, realization, sale, assignment
,
transfer, and requirement for continued performance), all on such
terms
and conditions and at such time or times as may seem advisable to
the
Creditor.
|
|
(xv)
|
Payment
of Obligations.
Pay any liability secured by any Lien against any Collateral. The
Debtor
will immediately on demand reimburse the Creditor for all such payments
and, until paid, any such reimbursement obligation shall form part
of the
Obligations and shall be secured by the Security
Interests.
|
|
(xvi)
|
Borrow
and Grant Security Interests.
Borrow money for the maintenance, preservation or protection of any
Collateral or for carrying on any of the business or undertaking
of the
Debtor and grant Liens on any Collateral (in priority to the Security
Interests or otherwise) as security for the money so borrowed. The
Debtor
will immediately on demand reimburse the Creditor for all such borrowings
and, until paid, any such reimbursement obligations shall form part
of the
Obligations and shall be secured by the Security
Interests.
|
|
(xvii)
|
Appoint
Receiver.
Appoint by instrument in writing one or more Receivers of the Debtor
or
any or all of the Collateral with such rights, powers and authority
(including any or all of the rights, powers and authority of the
Creditor
under this Agreement) as may be provided for in the instrument of
appointment or any supplemental instrument, and remove and replace
any
such Receiver from time to time. To the extent permitted by applicable
law, any Receiver appointed by the Creditor will (for purposes relating
to
responsibility for the Receiver’s acts or omissions) be considered to be
the agent of the Debtor and not of the
Creditor.
|
-10-
|
(xviii)
|
Court-Appointed
Receiver.
Obtain from any court of competent jurisdiction an order for the
appointment of a Receiver of the Debtor or of any or all of the
Collateral.
|
|
(xix)
|
Consultants.
Require the Debtor to engage a consultant of the Creditor’s choice, or
engage a consultant on its own behalf, such consultant to receive
the full
cooperation and support of the Debtor and its agents and employees,
including unrestricted access to the premises of the Debtor and the
Books
and Records; all reasonable fees and expenses of such consultant
shall be
for the account of the Debtor and the Debtor hereby authorizes any
such
consultant to report directly to the Creditor and to disclose to
the
Creditor any and all information obtained in the course of such
consultant’s employment.
|
The
Creditor may exercise any or all of the foregoing rights and remedies without
demand of performance or other demand, presentment, protest, advertisement
or
notice of any kind (except as required by applicable law) to or on the Debtor
or
any other Person, and the Debtor hereby waives each such demand, presentment,
protest, advertisement and notice to the extent permitted by applicable law.
None of the above rights or remedies will be exclusive of or dependent on or
merge in any other right or remedy, and one or more of such rights and remedies
may be exercised independently or in combination from time to time. The Debtor
acknowledges and agrees that any action taken by the Creditor hereunder
following the occurrence and during the continuance of an Event of Default
shall
not be rendered invalid or ineffective as a result of the curing of the Event
of
Default on which such action was based.
11. Realization
Standards.
To the
extent that applicable law imposes duties on the Creditor to exercise remedies
in a commercially reasonable manner and without prejudice to the ability of
the
Creditor to dispose of the Collateral in any such manner, the Debtor
acknowledges and agrees that it is not commercially unreasonable for the
Creditor (a) to incur expenses reasonably deemed significant by the Creditor
to
prepare the Collateral for disposition or otherwise to complete raw material
or
work in process into finished goods or other finished products for disposition,
(b) to fail to obtain third party consents for access to the Collateral to
be
disposed of, (c) to fail to exercise collection remedies against account debtors
or other Persons obligated on the Collateral or to remove Liens against the
Collateral, (d) to exercise collection remedies against account debtors and
other Persons obligated on the Collateral directly or through the use of
collection agencies and other collection specialists, (e) to dispose of
Collateral by way of public auction, public tender or private contract, with
or
without advertising and without any other formality, (f) to contact other
Persons, whether or not in the same business of the Debtor, for expressions
of
interest in acquiring all or any portion of the Collateral, (g) to hire one
or
more professional auctioneers to assist in the disposition of the Collateral,
whether or not the Collateral is of a specialized nature or an upset or reserve
bid or price is established, (h) to dispose of the Collateral by utilizing
internet sites that provide for the auction of assets of the types included
in
the Collateral or that have the reasonable capacity of doing so, or that match
buyers and sellers of assets, (i) to dispose of assets in wholesale rather
than
retail markets, (j) to disclaim disposition warranties, such as title,
possession or quiet enjoyment, (k) to purchase insurance or credit enhancements
to insure the Creditor against risks of loss, collection or disposition of
the
Collateral or to provide to the Creditor a guaranteed return from the collection
or disposition of the Collateral, (l) to the extent deemed appropriate by the
Creditor, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist the Creditor in the collection
or
disposition of any of the Collateral, (m) to dispose of Collateral in whole
or
in part, and (n) to dispose of Collateral to a customer of the Creditor, and
(o)
to establish an upset or reserve bid price in respect of
Collateral.
12. Grant
of Licence.
For the
purpose of enabling the Creditor to exercise its rights and remedies under
this
Agreement when the Creditor is entitled to exercise such rights and remedies,
and for no other purpose, the Debtor grants to the Creditor an irrevocable,
non-exclusive licence (exercisable without payment of royalty or other
compensation to the Debtor) to use, assign or sublicense any or all of the
Intellectual Property Rights, including in such licence reasonable access to
all
media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout of the same. For any
trademarks, service marks and other business indicia, such licence includes
an
obligation on the part of the Creditor to maintain the standards of quality
maintained by the Debtor or, in the case of trademarks, service marks or other
business indicia licensed to the Debtor, the standards of quality imposed upon
the Debtor by the relevant licence. For copyright works, such licence shall
include the benefit of any waivers of moral rights and similar
rights.
-11-
13. Securities
Laws.
The
Creditor is authorized, in connection with any offer or sale of any Pledged
Securities or Pledged Security Entitlements, to comply with any limitation
or
restriction as it may be advised by counsel is necessary to comply with
applicable law, including compliance with procedures that may restrict the
number of prospective bidders and purchasers, requiring that prospective bidders
and purchasers have certain qualifications, and restricting prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account or investment and not with a view to the distribution
or
resale of such Securities. The Debtor further agrees that compliance with any
such limitation or restriction will not result in a sale being considered or
deemed not to have been made in a commercially reasonable manner, and the
Creditor will not be liable or accountable to the Debtor for any discount
allowed by reason of the fact that such Pledged Securities or Pledged Security
Entitlements are sold in compliance with any such limitation or restriction.
If
the Creditor chooses to exercise its right to sell any or all Pledged Securities
or Pledged Security Entitlements, upon written request, the Debtor will cause
each applicable Pledged Issuer to furnish to the Creditor all such information
as the Creditor may request in order to determine the number of shares and
other
instruments included in the Collateral which may be sold by the Creditor in
exempt transactions under any laws governing securities, and the rules and
regulations of any applicable securities regulatory thereunder, as the same
are
from time to time in effect.
14. ULC
Shares.
The
Debtor acknowledges that certain of the Collateral may now or in the future
consist of ULC Shares, and that it is the intention of Creditor and the Debtor
that the Creditor should not under any circumstances prior to realization be
held to be a “member” or a “shareholder”, as applicable, of a ULC for the
purposes of any ULC Laws. Therefore, notwithstanding any provisions to the
contrary contained in this Agreement, the Credit Agreement or any other Loan
Document, where the Debtor is the registered and beneficial owner of ULC Shares
which are Collateral, the Debtor will remain the sole registered and beneficial
owner of such ULC Shares until such time as such ULC Shares are effectively
transferred into the name of the Creditor or any other Person on the books
and
records of the applicable ULC. Accordingly, the Debtor shall be entitled to
receive and retain for its own account any dividend on or other distribution,
if
any, in respect of such ULC Shares (except for any dividend or distribution
comprised of Pledged Security Certificates, which shall be delivered to the
Creditor to hold hereunder) and shall have the right to vote such ULC Shares
and
to control the direction, management and policies of the applicable ULC to
the
same extent as the Debtor would if such ULC Shares were not pledged to the
Creditor pursuant hereto. Nothing in this Agreement, the Credit Agreement or
any
other Loan Document is intended to, and nothing in this Agreement, the Credit
Agreement or any other Loan Document shall, constitute the Creditor or any
Person other than the Debtor, a member or shareholder of a ULC for the purposes
of any ULC Laws (whether listed or unlisted, registered or beneficial), until
such time as notice is given to the Debtor and further steps are taken pursuant
hereto or thereto so as to register the Creditor or such other Person, as
specified in such notice, as the holder of the ULC Shares. To the extent any
provision hereof would have the effect
of
constituting the Creditor as a member or a shareholder, as applicable, of any
ULC prior to such time, such provision shall be severed herefrom and shall
be
ineffective with respect to ULC Shares which are Collateral without otherwise
invalidating or rendering unenforceable this Agreement or invalidating or
rendering unenforceable such provision insofar as it relates to Collateral
which
is not ULC Shares.
Except
upon the exercise of rights of the Creditor to sell, transfer or
otherwise dispose of ULC Shares in accordance with
this Agreement, the Debtor shall not cause or permit, or enable a Pledged
Issuer that is a ULC to cause or permit, the Creditor to: (a) be
registered as a shareholder or member of such Pledged Issuer; (b) have any
notation entered in their favour in the share register of such Pledged Issuer;
(c) be held out as shareholders or members of such Pledged Issuer; (d) receive,
directly or indirectly, any dividends, property or other distributions from
such
Pledged Issuer by reason of the Creditor holding the Security Interests over
the
ULC Shares; or (e) act as a shareholder of such Pledged Issuer, or exercise
any
rights of a shareholder including the right to attend a meeting of shareholders
of such Pledged Issuer or to vote its ULC Shares.
15. Application
of Proceeds.
All
Proceeds of Collateral received by the Creditor or a Receiver may be applied
to
discharge or satisfy any expenses (including the Receiver’s remuneration and
other expenses of enforcing the Creditor’s rights under this Agreement), Liens
on the Collateral in favour of Persons other than the Creditor, borrowings,
taxes and other outgoings affecting the Collateral or which are considered
advisable by the Creditor or the Receiver to protect, preserve, repair, process,
maintain or enhance the Collateral or prepare it for sale, lease or other
disposition, or to keep in good standing any Liens on the Collateral ranking
in
priority to any of the Security Interests, or to sell, lease or otherwise
dispose of the Collateral. The balance of such Proceeds may, at the sole
discretion of the Creditor, be held as collateral security for the Obligations
or be applied to such of the Obligations (whether or not the same are due and
payable) in such manner and at such times as the Creditor considers appropriate
and thereafter will be accounted for as required by law.
-12-
16. Continuing
Liability of Debtor.
The
Debtor will remain liable for any Obligations that are outstanding following
realization of all or any part of the Collateral and the application of the
Proceeds thereof.
17. Creditor’s
Appointment as Attorney-in-Fact.
Upon
the occurrence and during the continuance of an Event of Default, the Debtor
constitutes and appoints the Creditor and any officer or agent of the Creditor,
with full power of substitution, as the Debtor’s true and lawful
attorney-in-fact with full power and authority in the place of the Debtor and
in
the name of the Debtor or in its own name, from time to time in the Creditor’s
discretion to take any and all appropriate action and to execute any and all
documents and instruments as, in the opinion of such attorney acting reasonably,
may be necessary or desirable to accomplish the purposes of this Agreement.
Without limiting the effect of this Section, the Debtor grants the Creditor
an
irrevocable proxy to vote the Pledged Securities and Pledged Security
Entitlements and to exercise all other rights, powers, privileges and remedies
to which a holder thereof would be entitled (including giving or withholding
written consents of shareholders, calling special meetings of shareholders
and
voting at such meetings), which proxy shall be effective, automatically and
without the necessity of any action (including any transfer of any Pledged
Securities or Pledged Security Entitlements on the books and records of a
Pledged Issuer or Pledged Securities Intermediary, as applicable, upon the
occurrence of an Event of Default. These powers are coupled with an interest
and
are irrevocable until the Release Date. Nothing in this Section affects the
right of the Creditor as secured party or any other Person on the Creditor’s
behalf, to sign and file or deliver (as applicable) all such financing
statements, financing change statements, notices, verification agreements and
other documents relating to the Collateral and this Agreement as the Creditor
or
such other Person considers appropriate. The Debtor hereby ratifies and
confirms, and agrees to ratify and confirm, whatever lawful acts the Creditor
or
any of the Creditor’s sub-agents, nominees or attorneys do or purport to do in
exercise of the power of attorney granted to the Creditor pursuant to this
Section.
18. Performance
by Creditor of Debtor’s Obligations.
If the
Debtor fails to perform or comply with any of the obligations of the Debtor
under this Agreement, the Creditor may, but need not, perform or otherwise
cause
the performance or compliance of such obligation, provided that such performance
or compliance will not constitute a waiver, remedy or satisfaction of such
failure. The expenses of the Creditor incurred in connection with any such
performance or compliance will be payable by the Debtor to the Creditor
immediately on demand, and until paid, any such expenses will form part of
the
Obligations and will be secured by the Security Interests.
19. Interest.
If any
amount payable by the Debtor to the Creditor under this Agreement is not paid
when due, the Debtor will pay to the Creditor, immediately on demand, interest
on such amount from the date due until paid, at the rate of interest applicable
at such time pursuant to the Credit Agreement. All amounts payable by the Debtor
to the Creditor under this Agreement, and all interest on all such amounts,
compounded monthly on the last Business Day of each month, will form part of
the
Obligations and will be secured by the Security Interests.
20. Severability.
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction will, as to that jurisdiction, be ineffective to the extent of
such
prohibition or unenforceability and will be severed from the balance of this
Agreement, all without affecting the remaining provisions of this Agreement
or
affecting the validity or enforceability of such provision in any other
jurisdiction.
21. Rights
of Creditor; Limitations on Creditor’s Obligations.
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(i)
|
Limitations
on Creditor’s Liability.
The Creditor will not be liable to the Debtor or any other Person
for any
failure or delay in exercising any of the rights of the Debtor under
this
Agreement (including any failure to take possession of, collect,
sell,
lease or otherwise dispose of any Collateral, or to preserve rights
against prior parties). Neither the Creditor, a Receiver nor any
agent of
the Creditor (including, in Alberta or British Columbia, any
sheriff) is required to take, or will have any liability for any
failure to take or delay in taking, any steps necessary or advisable
to
preserve rights against other Persons under any Collateral in its
possession. Neither the Creditor, any Receiver nor any agent of the
Creditor will be liable for any, and the Debtor will bear the full
risk of
all, loss or damage to any and all of the Collateral (including any
Collateral in the possession of the Creditor, any Receiver or any
agent of
the Creditor) caused for any reason other than the gross negligence
or
wilful misconduct of the Creditor, such Receiver or such agent of
the
Creditor.
|
-13-
|
(ii)
|
Debtor
Remains Liable under Accounts and Contracts.
Notwithstanding any provision of this Agreement, the Debtor will
remain
liable under each of the documents giving rise to the Accounts of
the
Debtor and under each of the Contracts to observe and perform all
the
conditions and obligations to be observed and performed by the Debtor
thereunder, all in accordance with the terms of each such document
and
Contract. The Creditor will have no obligation or liability under
any
Account of the Debtor (or any document giving rise thereto) or Contract
by
reason of or arising out of this Agreement or the receipt by the
Creditor
of any payment relating to such Account or Contract pursuant hereto,
and
in particular (but without limitation), the Creditor will not be
obligated
in any manner to perform any of the obligations of the Debtor under
or
pursuant to any Account (or any document giving rise thereto) or
under or
pursuant to any Contract to make any payment, to make any inquiry
as to
the nature or the sufficiency of any payment received by it or as
to the
sufficiency of any performance by any party under any Account (or
any
document giving rise thereto) or under any Contract, to present or
file
any claim, to take any action to enforce any performance or to collect
the
payment of any amounts which may have been assigned to it or to which
it
may be entitled at any time.
|
|
(iii)
|
Collections
on Accounts and Contracts.
The Creditor hereby authorizes the Debtor to collect its Accounts
and
payments under the Contracts in the normal course of the business
of the
Debtor and for the purpose of carrying on the same. If required by
the
Creditor at any time, any payments of Accounts or under Contracts,
when
collected by the Debtor, will be forthwith (and, in any event, within
two
Business Days) deposited by the Debtor in the exact form received,
duly
endorsed by the Debtor to the Creditor if required, in a special
collateral account maintained by the Creditor, and until so deposited,
will be held by the Debtor in trust for the Creditor, segregated
from the
other funds of the Debtor. All such amounts while held by the Creditor
(or
by the Debtor in trust for the Creditor) and all income in respect
thereof
will continue to be collateral security for the Obligations and will
not
constitute payment thereof until applied as hereinafter provided.
If an
Event of Default has occurred and is continuing, the Creditor may
apply
all or any part of the amounts on deposit in such special collateral
account on account of the Obligations in such order as the Creditor
may
elect.
At
the Creditor’s request, the Debtor will deliver to the Creditor any
documents evidencing and relating to the agreements and transactions
which
gave rise to its Accounts and the Contracts, including all original
orders, invoices and shipping
receipts.
|
|
(iv)
|
Analysis
of Accounts.
At any time and from time to time, the Creditor will have the right
to
analyze and verify the Accounts of the Debtor in any manner and through
any medium that it reasonably considers advisable, and the Debtor
will
furnish all such assistance and information as the Creditor may require
in
connection therewith. If an Event of Default has occurred and is
continuing, the Creditor may in its own name or in the name of others
(including the Debtor) communicate with account debtors on the Accounts
of
the Debtor and parties to the Contracts to verify with them to its
satisfaction the existence, status, amount and terms of any Account
or any
Contract. At any time and from time to time, upon the Creditor’s
reasonable request and at the expense of the Debtor, the Debtor will
furnish to the Creditor reports showing reconciliations, aging and
test
verifications of, and trial balances for, its
Accounts.
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|
(v)
|
Use
of Agents.
The Creditor may perform any of its rights or duties under this Agreement
by or through agents and is entitled to retain counsel and to act
in
reliance on the advice of such counsel concerning all matters pertaining
to its rights and duties under this
Agreement.
|
22. Dealings
by Creditor.
The
Creditor will not be obliged to exhaust its recourse against the Debtor or
any
other Person or against any other security it may hold in respect of the
Obligations before realizing upon or otherwise dealing with the Collateral
in
such manner as the Creditor may consider desirable. The Creditor may grant
extensions of time and other indulgences, take and give up security, accept
compositions, grant releases and discharges and otherwise deal with the Debtor
and any other Person, and with any or all of the Collateral, and with other
security and sureties, as the Creditor may see fit, all without prejudice to
the
Obligations or to the rights and remedies of the Creditor under this Agreement.
The powers conferred on the Creditor under this Agreement are solely to protect
the interests of the Creditor in the Collateral and will not impose any duty
upon the Creditor to exercise any such powers.
-14-
23. Communication.
Any
notice or other communication required or permitted to be given under this
Agreement will be in writing and will be effectively given if (i) delivered
personally, (ii) sent by prepaid courier service or mail, or (iii) sent prepaid
by facsimile transmission or other similar means of electronic communication,
in
each case to the address or facsimile number of the Debtor or Creditor set
out
in this Agreement. Any communication so given will be deemed to have been given
and to have been received on the day of delivery if so delivered, or on the
day
of facsimile transmission or sending by other means of recorded electronic
communication provided that such day is a Business Day and the communication
is
so delivered or sent prior to 4:30 p.m. (local time at the place of receipt).
Otherwise, such communication will be deemed to have been given and to have
been
received on the following Business Day. Any communication sent by mail will
be
deemed to have been given and to have been received on the fifth Business Day
following mailing, provided that no disruption of postal service is in effect.
The Debtor and the Creditor may from time to time change their respective
addresses or facsimile numbers for notice by giving notice to the other in
accordance with the provisions of this Section.
24. Release
of Information.
The
Debtor authorizes the Creditor to provide a copy of this Agreement and such
other information as may be requested of the Creditor to the extent necessary
to
enforce the Creditor’s rights, remedies and entitlements under this
Agreement.
25. Release
of Debtor.
Neither
the taking of any judgment nor the exercise of any power of seizure or sale
shall extinguish the liability of the Debtor to pay the Obligations, nor shall
the same operate as a merger of any covenant contained in this Agreement or
of
any other liability, nor shall the acceptance of any payment or other security
constitute or create any novation. Upon the written request of the Debtor given
at any time on or after the Release Date, the Creditor shall release the Debtor
and the Collateral from the Security Interests and such release shall serve
to
terminate any licence granted in this Agreement. Upon such release, and at
the
request and expense of the Debtor, the Creditor shall execute and deliver to
the
Debtor such releases and discharges as the Debtor may reasonably
request.
26. Additional
Security.
This
Agreement is in addition to, and not in substitution of, any and all other
security previously or concurrently delivered by the Debtor or any other Person
to the Creditor, all of which other security shall remain in full force and
effect.
27. Alteration
or Waiver.
None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Creditor.
The Creditor will not, by any act or delay, be deemed to have waived any right
or remedy hereunder or to have acquiesced in any Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Creditor, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder will preclude any other
or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Creditor of any right or remedy hereunder on any one occasion
will not be construed as a bar to any right or remedy which the Creditor would
otherwise have on any future occasion. Neither the taking of any judgement
nor
the exercise of any power of seizure or sale will extinguish the liability
of
the Debtor to pay the Obligations, nor will the same operate as a merger of
any
covenant contained in this Agreement or of any other liability, nor will the
acceptance of any payment or other security constitute or create any
novation.
28. Amalgamation.
If the
Debtor is a corporation, the Debtor acknowledges that if it amalgamates with
any
other corporation or corporations, then (i) the Collateral and the Security
Interests will extend to and include all the property and assets of the
amalgamated corporation and to any property or assets of the amalgamated
corporation thereafter owned or acquired, (ii) the term “Debtor”, where used in
this Agreement, will extend to and include the amalgamated corporation, and
(iii) the term “Obligations”, where used in this Agreement, will extend to and
include the Obligations of the amalgamated corporation.
29. Governing
Law; Attornment.
This
Agreement will be governed by and construed in accordance with the laws of
the
Province of Ontario. Without prejudice to the ability of the Creditor to enforce
this Agreement in any other proper jurisdiction, the Debtor irrevocably submits
and attorns to the non-exclusive jurisdiction of the courts of such province.
To
the extent permitted by applicable law, the Debtor irrevocably waives any
objection (including any claim of inconvenient forum) that it may now or
hereafter have to the venue of any legal proceeding arising out of or relating
to this Agreement in the courts of such province.
-15-
30. Interpretation.
Unless
otherwise expressly provided in this Agreement, if any matter in this Agreement
is subject to the consent or approval of the Creditor or is to be acceptable
to
the Creditor, such consent, approval or determination of acceptability will
be
in the sole discretion of the Creditor. If any provision in this Agreement
refers to any action taken or to be taken by the Debtor, or which the Debtor
is
prohibited from taking, such provision will be interpreted to include any and
all means, direct or indirect, of taking, or not taking, such action. The
division of this Agreement into sections and paragraphs, and the insertion
of
headings, is for convenience of reference only and will not affect the
construction or interpretation of this Agreement. Unless the context otherwise
requires, words importing the singular include the plural and vice versa, and
words importing gender include all genders. When used in this Agreement, the
word “including”
(or
“includes”)
means
including (or includes) without limitation. Any reference in this Agreement
to a
“Section” means the relevant Section of this Agreement. If more than one Debtor
executes this Agreement, their obligations under this Agreement are joint and
several. A reference in this agreement to another agreement refers to that
other
agreement as it may be amended, modified, supplemented, restated or replaced
from time to time. A reference in this agreement to a statute refers to that
statute as it may be amended and to any restated or successor legislation of
comparable effect.
31. Successors
and Assigns.
This
Agreement will enure to the benefit of, and be binding on, the Debtor and its
successors and permitted assigns, and will enure to the benefit of, and be
binding on, the Creditor and its successors and assigns. The Debtor may not
assign this Agreement, or any of its rights or obligations under this Agreement.
If the Debtor or the Creditor is an individual, then the term “Debtor” or
“Creditor”, as applicable, will also include his or her heirs, administrators
and executors.
32. Acknowledgment
of Receipt/Waiver.
The
Debtor acknowledges receipt of an executed copy of this Agreement and, to the
extent permitted by applicable law, waives the right to receive a copy of any
financing statement or financing change statement registered in connection
with
this Agreement or any verification statement issued in respect of any such
financing statement or financing change statement.
33. Electronic
Signature.
Delivery of an executed signature page to this Agreement by the Debtor by
facsimile or other electronic form of transmission shall be as effective as
delivery by the Debtor of a manually executed copy of this Agreement by the
Debtor.
[signatures
on the next following page]
-16-
Dated:
as
of the date first set out above
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INTERNATIONAL
CONDUITS LTD.
|
||||
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Address:
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▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
|
By:
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|
Mississauga,
Ontario
|
Name:
|
|||
|
L4Z
1X3
|
Title:
|
|||
|
Attention:
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇, President
|
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|
Facsimile:
|
▇▇▇-▇▇▇-▇▇▇▇
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-17-
SCHEDULE
A
DEBTOR
INFORMATION
Full
legal name:
Jurisdiction
of incorporation or organization:
Address
of chief executive office:
Addresses
of all places where business is carried on or tangible Personal Property is
kept:
Jurisdictions
in which all material account debtors are located:
Addresses
of all owned real property:
Addresses
of all leased real property:
Subsidiaries
of the Debtor:
Instruments,
Documents of Title and Chattel Paper of the Debtor:
Pledged
Certificated Securities:
|
Pledged
Issuer
|
Securities
Owned
|
|
%
of issued and outstanding Securities of Pledged
Issuer
|
|
Security
Certificate Numbers
|
Security
Certificate Location
|
|
Pledged
Securities Accounts:
|
Pledged
Securities Intermediary
|
|
Securities
Account Number
|
|
Pledged
Securities Intermediary’s Jurisdiction
|
|
Pledged
Security Entitlements
|
Pledged
Uncertificated Securities:
|
Pledged
Issuer
|
Pledged
Issuer’s Jurisdiction
|
Securities
Owned
|
%
of issued and outstanding Securities of Pledged
Issuer
|
|||
Pledged
Futures Accounts:
|
Pledged
Futures Intermediary
|
Futures
Account Number
|
Pledged
Futures Intermediary’s Jurisdiction
|
Pledged
Futures Contracts
|
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-18-
Registered
trademarks and applications for trademark registrations:
|
Country
|
Trade-▇▇▇▇
|
Application
No.
|
Application
Date
|
Registration
No.
|
Registration
Date
|
Licenced
to or by Debtor
|
||||||
|
(Y/N)
|
||||||||||||
Patents
and
patent applications:
|
Country
|
Title
|
Patent
No.
|
Application
Date
|
Date
of Grant
|
Licenced
to or by Debtor
|
|||||
|
(Y/N)37
|
||||||||||
Copyright
registrations and applications for copyright
registrations:
|
Country
|
Work
|
Application
No.
|
Application
Date
|
Registration
No.
|
Licenced
to or by Debtor
|
|||||
|
(Y/N)
37
|
||||||||||
Industrial
designs/registered designs and applications for registered
designs:
|
Country
|
Design
|
Application
No.
|
Application
Date
|
Registration
No.
|
Issue
Date
|
Licenced
to or by Debtor
|
||||||
|
(Y/N)
|
||||||||||||
-19-