Exhibit 4.6
EXECUTION VERSION
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CANADIAN SECURITY AGREEMENT
made by
RENTAL SERVICE CORPORATION OF CANADA LTD.
in favour of
DEUTSCHE BANK AG, CANADA BRANCH,
as Canadian Collateral Agent
Dated as of November 27, 2006
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CANADIAN SECURITY AGREEMENT
TABLE OF CONTENTS
Page
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SECTION 1 DEFINED TERMS.................................................. 2
1.1 Definitions...................................................... 2
1.2 Other Definitional Provisions.................................... 8
SECTION 2 GRANT OF SECURITY INTEREST..................................... 9
2.1 Grant............................................................ 9
2.2 Certain Limited Exceptions....................................... 10
2.3 Attachment....................................................... 12
2.4 Deficiency....................................................... 12
SECTION 3 REPRESENTATIONS AND WARRANTIES................................. 12
3.1 Title; No Other Liens............................................ 12
3.2 Perfected First Priority Liens................................... 12
3.3 Jurisdiction of Organization and Locations of Collateral......... 14
3.4 Accounts Receivable.............................................. 14
3.5 Patents, Trade-marks, Copyrights and Industrial Designs.......... 14
3.6 All Shares Pledged............................................... 15
3.7 Shares Duly and Validly Issued................................... 15
3.8 Grantor Beneficial Owner......................................... 15
3.9 Valid Interest................................................... 15
SECTION 4 COVENANTS...................................................... 16
4.1 Delivery of Instruments and Chattel Paper........................ 16
4.2 Maintenance of Insurance......................................... 16
4.3 Payment of Obligations........................................... 17
4.4 Maintenance of Perfected Security Interest; Further
Documentation.................................................... 17
4.5 Changes in Name, Jurisdiction of Organization, etc............... 17
4.6 Notices.......................................................... 18
4.7 Pledged Stock.................................................... 18
4.8 Accounts Receivable.............................................. 18
4.9 Maintenance of Records........................................... 18
4.10 Acquisition of Intellectual Property............................. 19
4.11 Protection of Trade Secrets...................................... 19
4.12 Grant of License to Use Intellectual Property.................... 19
4.13 Deposit Accounts; Etc............................................ 19
4.14 Protection of Trade-marks........................................ 20
4.15 Protection of Intellectual Property.............................. 20
4.16 Assignment of Letter of Credit Rights............................ 20
4.17 Additional Shares................................................ 20
4.18 Maintenance of Pledged Stock..................................... 21
4.19 Pledged Notes.................................................... 21
4.20 Maintenance of Security Interest................................. 21
SECTION 5 REMEDIAL PROVISIONS............................................ 22
(i)
5.1 Certain Matters Relating to Accounts............................. 22
5.2 Communications with Obligors; Grantors Remain Liable............. 23
5.3 Pledged Stock.................................................... 24
5.4 Proceeds to be Turned Over To Canadian Collateral Agent.......... 25
5.5 Application of Proceeds.......................................... 25
5.6 PPSA and Other Remedies.......................................... 27
5.7 Registration Rights.............................................. 29
5.8 Waiver; Deficiency............................................... 30
SECTION 6 THE CANADIAN COLLATERAL AGENT.................................. 30
6.1 Canadian Collateral Agent's Appointment as Attorney-in-Fact,
etc.............................................................. 30
6.2 Duty of Canadian Collateral Agent................................ 32
6.3 Financing Statements............................................. 32
6.4 Authority of Canadian Collateral Agent........................... 33
6.5 Right of Inspection.............................................. 33
SECTION 7 NON-LENDER SECURED PARTIES..................................... 33
7.1 Rights to Collateral............................................. 33
7.2 Appointment of Agent............................................. 34
7.3 Waiver of Claims................................................. 35
SECTION 8 MISCELLANEOUS.................................................. 35
8.1 Amendments in Writing............................................ 35
8.2 Notices.......................................................... 35
8.3 No Waiver by Course of Conduct; Cumulative Remedies.............. 36
8.4 Further Assurances............................................... 36
8.5 Enforcement Expenses............................................. 36
8.6 Successors and Assigns........................................... 37
8.7 Counterparts..................................................... 37
8.8 Severability..................................................... 37
8.9 Section Headings................................................. 37
8.10 Integration...................................................... 38
8.11 Governing Law.................................................... 38
8.12 Submission To Jurisdiction; Waivers.............................. 38
8.13 Waiver Of Jury Trial............................................. 38
8.14 Releases......................................................... 39
8.15 Judgment Currency................................................ 39
8.16 Attachment of Security Interest.................................. 40
8.17 Copy of Agreement; Verification Statement........................ 40
8.18 Amalgamation..................................................... 40
8.19 Language......................................................... 41
(ii)
SCHEDULE 1 - NOTICE ADDRESSES OF GRANTOR
SCHEDULE 2 - PLEDGED SECURITIES
SCHEDULE 3 - PERFECTION MATTERS
SCHEDULE 4 - LOCATIONS
SCHEDULE 5 - INTELLECTUAL PROPERTY
SCHEDULE 6 - CONTRACTS
Annex 1 CONFIRMATION OF SECURITY INTEREST IN INTELLECTUAL PROPERTY
(iii)
CANADIAN SECURITY AGREEMENT
CANADIAN SECURITY AGREEMENT, dated as of November 27, 2006, made by
Rental Service Corporation of Canada Ltd., a corporation incorporated and
existing under the laws of the Province of Alberta (together with its successors
and assigns, the "Grantor") in favour of Deutsche Bank AG, Canada Branch
("DBCB"), as Canadian collateral agent (in such capacity, the "Canadian
Collateral Agent") for the benefit of the banks and other financial institutions
(collectively, the "Lenders"; individually, a "Lender") from time to time
parties to the Credit Agreement described below and the other Secured Parties
(as defined below).
WITNESSETH:
WHEREAS, pursuant to that certain Credit Agreement, dated as of the
date hereof (as amended, amended and restated, waived, supplemented or otherwise
modified from time to time, together with any agreement extending the maturity
of, or restructuring, refunding, refinancing or increasing the Indebtedness
under such agreement or successor agreements, the "Credit Agreement"), among RSC
Holdings II, LLC ("Holdings"), RSC Holdings III, LLC (the "Parent Borrower") and
Rental Service Corporation (together with the Parent Borrower, and as further
defined in the Credit Agreement, the "U.S. Borrowers"), the Grantor (together
with any other entity that becomes a borrower pursuant to subsection 7.9(c) of
the Credit Agreement, the "Canadian Borrowers"), Deutsche Bank AG, New York
Branch, as administrative agent (in such capacity, the "U.S. Administrative
Agent") and as collateral agent (the "U.S. Collateral Agent"), DBCB as the
Canadian administrative agent for the lenders (the "Canadian Administrative
Agent"), the Canadian Collateral Agent, the Lenders and the other parties
thereto, the Lenders have severally agreed to make extensions of credit to the
Borrowers upon the terms and subject to the conditions set forth therein (the
Lenders, each Issuing Lender, the Administrative Agents, the Collateral Agents
and each other Agent are herein collectively referred to as the "Lender
Creditors");
WHEREAS, each Canadian Borrower and/or one or more of their respective
Subsidiaries or Affiliates may at any time and from time to time enter into one
or more Interest Rate Protection Agreements or Permitted Hedging Arrangements
with one or more Lenders or any affiliate thereof (each such Lender or
affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, if any, collectively, the "Other Creditors"
and, together with the Lender Creditors, the "Secured Parties");
WHEREAS, it is a condition to the obligation of the Lenders to make
their respective extensions of credit to the Canadian Borrowers under the Credit
Agreement that the Grantor shall execute and deliver this Agreement to the
Canadian Collateral Agent for the benefit of the Secured Parties (as defined
below);
NOW, THEREFORE, in consideration of the premises and to induce the
Canadian Administrative Agent and the Lenders to enter into the Credit Agreement
and to induce the Lenders to make their respective extensions of credit to the
Canadian Borrowers thereunder,
the Grantor hereby agrees with the Canadian Collateral Agent, for the rateable
benefit of the Secured Parties, as follows:
SECTION 1 DEFINED TERMS
1.1 Definitions.
(a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement, and the following terms that are defined in the PPSA (as in effect on
the date hereof) are used herein as so defined: Accounts, Chattel Paper,
Documents of Title, Equipment, Fixtures, Goods, Instruments, Intangibles,
Inventory, Money and Securities;
(b) The following terms shall have the following meanings:
"Accounts": all accounts (as defined in the PPSA) of the Grantor,
including, without limitation, all Accounts (as defined in the Credit Agreement)
and Accounts Receivable of the Grantor, but in any event excluding all Accounts
that have been sold or otherwise transferred (and not transferred back to the
Grantor) in connection with a Special Purpose Financing.
"Accounts Receivable": any right to payment for goods sold or leased or for
services rendered, which is not evidenced by an Instrument or Chattel Paper.
"Agreement": this Canadian Security Agreement, as the same may be amended,
restated, supplemented, waived or otherwise modified from time to time.
"Bankruptcy Case": (i) Holdings or any of its Subsidiaries commencing any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, arrangement, conservatorship or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, receiver-manager,
interim receiver, trustee, monitor, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or Holdings or
any of its Subsidiaries making a general assignment for the benefit of its
creditors; or (ii) there being commenced against Holdings or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days.
"Borrowers": the U.S. Borrowers, the Canadian Borrowers and, from and after
the date on which it executes and delivers to the U.S. Administrative Agent, a
Borrower Joinder Agreement, Canadian ▇▇▇▇▇ or any other entity that becomes a
Borrower pursuant to subsection 7.9(c) of the Credit Agreement.
"Canadian Administrative Agent": as defined in the recitals hereto.
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"Canadian Borrowers": as defined in the recitals hereto.
"Canadian Collateral Account Bank": DBCB, an Affiliate thereof or another
bank which at all times is a Lender as selected by the Grantor and consented to
in writing by the Canadian Collateral Agent (such consent not to be unreasonably
withheld or delayed).
"Canadian Collateral Agent": as defined in the Preamble hereto.
"Canadian Collateral Proceeds Account": shall mean a non-interest bearing
cash collateral account established and maintained by the Grantor at an office
of the Canadian Collateral Account Bank in the name, and in the sole dominion
and control of, the Canadian Collateral Agent for the benefit of the Secured
Parties.
"Collateral": as defined in Section 2; provided that, for purposes of
subsection 5.5.7 and Section 7, "Collateral" shall have the meaning assigned to
such term in the Credit Agreement.
"Commitments": the collective reference to (i) the Term Loan Commitments,
(ii) the RCF Commitments and (iii) the obligation of the Issuing Lenders to
issue Letters of Credit to the Borrowers pursuant to subsection 3.1 of the
Credit Agreement.
"Contracts": all contracts, agreements, instruments and indentures in any
form and portions thereof (except for contracts listed on Schedule 6 hereto), to
which the Grantor is a party or under which the Grantor or any property of the
Grantor is subject, as the same may from time to time be amended, supplemented,
waived or otherwise modified, including, without limitation, (i) all rights of
the Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of the Grantor to damages arising
thereunder and (iii) all rights of the Grantor to perform and to exercise all
remedies thereunder.
"Copyright Licenses": all written license agreements of the Grantor
providing for the grant by or to the Grantor of any right under any copyright of
the Grantor, other than agreements with any Person who is an Affiliate or a
Subsidiary of the Parent Borrower or the Grantor, including, without limitation,
any material license agreements listed on Schedule 5 hereto, subject, in each
case, to the terms of such license agreements, and the right to prepare for
sale, sell and advertise for sale, all Inventory now or hereafter covered by
such licenses.
"Copyrights": all of the Grantor's right, title and interest in and to all
Canadian and foreign copyrights, whether or not the underlying works of
authorship have been published or registered, all Canadian and foreign copyright
registrations and copyright applications, including, without limitation, any
copyright registrations and copyright applications listed on Schedule 5 hereto,
and (i) all renewals thereof, (ii) all income, royalties, damages and payments
now and hereafter due and/or payable with respect thereto, including, without
limitation, payments under all licenses entered into in connection therewith,
and damages and payments for past or future infringements thereof and (iii) the
right to ▇▇▇ or otherwise recover for past, present and future infringements and
misappropriations thereof.
"Credit Agreement": has the meaning provided in the recitals hereto.
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"Excluded Assets": as defined in Section 2.2.
"General Fund Account": the general fund account of the Grantor established
at the same office of the Canadian Collateral Account Bank as the Canadian
Collateral Proceeds Account.
"Grantor": as defined in the Preamble hereto.
"Holdings" has the meaning provided in the recitals hereto.
"Industrial Design License": all written agreements, now or hereafter in
effect, granting to any third party that is not an Affiliate or a Subsidiary of
the Parent Borrower any right to make, use or sell any Industrial Design, now or
hereafter owned by the Grantor or that the Grantor otherwise has the right to
license, is in existence, or granting to the Grantor any right to make, use or
sell any Industrial Design, now or hereafter owned by any third party, is in
existence, and all rights of the Grantor under any such agreement including,
without limitation, the license agreements listed on Schedule 5 hereto, subject,
in each case, to the terms of such license agreements, and the right to prepare
for sale, sell and advertise for sale, all Inventory now or hereafter covered by
such licenses.
"Industrial Designs": all of the following, now owned or hereafter acquired
by the Grantor: (a) all industrial designs, design patents and other designs
that the Grantor now or hereafter owns or uses, including but not limited to all
industrial designs, design patents and other designs listed on Schedule 5 hereto
and all renewals and extensions thereof, (b) all registrations and recordings
thereof and all applications that have been or shall be made or filed Canada or
any other country or political subdivision thereof and all records thereof and
all reissues, extensions or renewals thereof, and (c) all common law and other
rights in the above.
"Instruments": has the meaning specified in the PPSA, but excluding the
Pledged Securities.
"Intellectual Property": the collective reference to the Grantor's (i)
Copyrights; (ii) Copyright Licenses; (iii) Patents; (iv) Patent Licenses; (v)
Trade Secrets; (vi) Trade-marks; (vii) Trade-▇▇▇▇ Licenses; (viii) Industrial
Designs; (ix) Industrial Design Licenses; (x) computer software and programs
(both source code and object code form), all proprietary rights in the computer
software and programs and all documentation and other materials related to the
computer software and programs; (xi) mask works, mask work registrations and
applications for mask work registrations; (xii) trade names, business names,
corporate names, domain names, website names and world wide web addresses,
common law trade-marks, trade-▇▇▇▇ registrations, trade ▇▇▇▇ applications, trade
dress and logos, and the goodwill associated with any of the foregoing; and
(xiii) any other intellectual property and industrial property.
"Intercompany Note": any promissory note in a principal amount in excess of
$3,500,000 evidencing loans made by the Grantor to Holdings or any of its
Subsidiaries.
"Inventory": all inventory (as defined in the PPSA) of the Grantor,
including, without limitation, all Inventory (as defined in the Credit
Agreement) of the Grantor.
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"Investment Property": the collective reference to (i) all "investment
property" as such term is defined in Section 9-102(a)(49) of the Uniform
Commercial Code in effect in the State of New York on the date hereof and (ii)
whether or not constituting "investment property" as so defined, all Pledged
Securities.
"Issuers": the collective reference to the Persons identified on Schedule 2
as the issuers of Pledged Stock, together with any successors to such companies
(including, without limitation, any successors contemplated by subsection 8.5 of
the Credit Agreement).
"Lender Creditors": as defined in the recitals hereto.
"Lenders": as defined in the Preamble hereto.
"Non-Lender Secured Parties": any person who, at the time of entering into
any Interest Rate Protection Agreement or Permitted Hedging Arrangement or Bank
Products Agreement or Management Loan secured hereby, was a Lender or an
affiliate of any Lender and their respective successors and assigns.
"Obligations": the collective reference to all obligations and liabilities
of the Grantor in respect of (i) the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans, the Reimbursement Obligations, and all other obligations and
liabilities of such Canadian Borrower to the Secured Parties, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, the Loans, the Letters of Credit, the other Loan Documents
(including without limitation all obligations, indebtedness and liabilities of
the Grantor under any Canadian Guarantee Agreement) (all such obligations,
liabilities and indebtedness under this clause (i), except to the extent
consisting of obligations and indebtedness with respect to Interest Rate
Protection Agreements or Permitted Hedging Arrangements, being herein
collectively referred to as "Loan Document Obligations"); (ii) any Interest Rate
Protection Agreement or Permitted Hedging Arrangement entered into with any
Person who was at the time of entry into of such agreement a Lender or an
affiliate of any Lender (all such obligations, liabilities and indebtedness
under this clause (ii) being herein collectively called the "Other
Obligations"), in each case whether on account of principal, interest,
reimbursement obligations, amounts payable in connection with the provision of
such cash management services or a termination of any transaction entered into
pursuant to any such Interest Rate Protection Agreement or Permitted Hedging
Arrangement, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all reasonable fees, expenses and disbursements of counsel to the
Canadian Administrative Agent or any other Secured Party that are required to be
paid by such Borrower pursuant to the terms of the Credit Agreement or any other
Loan Document).
"Other Creditors": as defined in the recitals hereto.
"Parent Borrower": as defined in the recitals hereto.
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"Patent Licenses": all written license agreements of the Grantor providing
for the grant by or to the Grantor of any right under any patent, patent
applicable or patentable invention other than agreements with any Person who is
an Affiliate or a Subsidiary of the Parent Borrower or the Grantor, including,
without limitation, the material license agreements listed on Schedule 5 hereto,
subject, in each case, to the terms of such license agreements, and the right to
prepare for sale, sell and advertise for sale, all Inventory now or hereafter
covered by such licenses.
"Patents": all of the Grantor's right, title and interest in and to all
Canadian and foreign patents, patent applications and patentable inventions and
all reissues and extensions thereof, including, without limitation, all patents
and patent applications identified in Schedule 5 hereto, and including, without
limitation, (i) all inventions and improvements described and claimed therein,
(ii) the right to ▇▇▇ or otherwise recover for any and all past, present and
future infringements and misappropriations thereof, (iii) all income, royalties,
damages and other payments now and hereafter due and/or payable with respect
thereto (including, without limitation, payments under all licenses entered into
in connection therewith, and damages and payments for past, present or future
infringements thereof), and (iv) all other rights corresponding thereto and all
reissues, divisions, continuations, continuations-in-part, substitutes,
renewals, and extensions thereof, all improvements thereon, and all other rights
of any kind whatsoever of the Grantor accruing thereunder or pertaining thereto.
"Permitted Hedging Arrangement": as defined in subsection 8.17 of the
Credit Agreement.
"Pledged Collateral": the Pledged Securities now owned or at any time
hereafter acquired by the Grantor, and any Proceeds thereof.
"Pledged Notes": all promissory notes issued to or held by the Grantor in a
principal amount in excess of $3,500,000 (other than promissory notes issued in
connection with an extension of trade credit by the Grantor in the ordinary
course of business) and all Intercompany Notes at any time issued to, or held or
owned by, the Grantor.
"Pledged Securities": the collective reference to the Pledged Notes and the
Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on Schedule 2 as held
by the Grantor, together with any other shares of Capital Stock required to be
pledged by the Grantor pursuant to subsection 6.1(k) of the Credit Agreement, as
well as any other shares, stock certificates, options or rights of any nature
whatsoever in respect of the Capital Stock of any Person that may be issued or
granted to, or held by, the Grantor while this Agreement is in effect.
"PPSA": the Personal Property Security Act (Alberta), including the
regulations thereto, 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.
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"Primary Obligations": as defined in subsection 5.5.2.
"Pro Rata Share": as defined in subsection 5.5.2.
"Proceeds": all "proceeds" as such term is defined in the PPSA and, in any
event, Proceeds of Pledged Securities shall include, without limitation, all
dividends or other income from the Pledged Securities, collections thereon or
distributions or payments with respect thereto.
"Restrictive Agreements": as defined in subsection 2.2(a).
"Secondary Obligations": as defined in subsection 5.5.2.
"Secured Parties": as defined in the recitals hereto.
"Security Interest": as defined in Section 2.2.
"Specified Asset": as defined in subsection 3.2 hereof.
"Trade Secret Licenses": all written license agreements of the Grantor
providing for the grant by or to the Grantor of any right under any trade
secrets, including, without limitation, know how, processes, formulae,
compositions, designs, and confidential business and technical information, and
all rights of any kind whatsoever accruing thereunder or pertaining thereto,
other than agreements with any Person who is an Affiliate or a Subsidiary of the
Parent Borrower or the Grantor, subject, in each case, to the terms of such
license agreements, and the right to prepare for sale, sell and advertise for
sale, all Inventory now or hereafter covered by such licenses.
"Trade Secrets": all of the Grantor's right, title and interest in and to
all Canadian trade secrets, including, without limitation, know-how, processes,
formulae, compositions, designs, and confidential business and technical
information, and all rights of any kind whatsoever accruing thereunder or
pertaining thereto, including, without limitation, (i) all income, royalties,
damages and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, payments under all licenses, non-disclosure
agreements and memoranda of understanding entered into in connection therewith,
and damages and payments for past or future misappropriations thereof, and (ii)
the right to ▇▇▇ or otherwise recover for past, present or future
misappropriations thereof.
"Trade-▇▇▇▇ Licenses": all written license agreements of the Grantor
providing for the grant by or to the Grantor of any right under any trade-marks,
service marks, trade names, trade dress or other indicia of trade origin or
business identifiers, and all rights of any kind whatsoever accruing thereunder
or pertaining thereto, other than agreements with any Person who is an Affiliate
or a Subsidiary of the Parent Borrower or the Grantor, including, without
limitation, the material license agreements listed on Schedule 5 hereto,
subject, in each case, to the terms of such license agreements, and the right to
prepare for sale, sell and advertise for sale, all Inventory now or hereafter
covered by such licenses.
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"Trade-marks": all of the Grantor's right, title and interest in and to all
Canadian and foreign Trade-marks, service marks, trade names, trade dress or
other indicia of trade origin or business identifiers, Trade-▇▇▇▇ and service
▇▇▇▇ registrations, and applications for Trade-▇▇▇▇ or service ▇▇▇▇
registrations (except for "intent to use" applications for Trade-▇▇▇▇ or service
▇▇▇▇ registrations filed) and any renewals thereof, including, without
limitation, each registration and application identified in Schedule 5 hereto,
and including, without limitation, (i) the right to ▇▇▇ or otherwise recover for
any and all past, present and future infringements or dilutions thereof, (ii)
all income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for past
or future infringements thereof), and (iii) all other rights corresponding
thereto and all other rights of any kind whatsoever of the Grantor accruing
thereunder or pertaining thereto in Canada, together in each case with the
goodwill of the business connected with the use of, and symbolized by, each such
Trade-▇▇▇▇, service ▇▇▇▇, trade name, trade dress or other indicia of trade
origin or business identifiers.
"ULC Shares": shares in any unlimited company at any time owned or
otherwise held by the Grantor.
"U.S. Administrative Agent": as defined in the recitals hereto.
"U.S. Collateral Agent": as defined in the recitals hereto.
1.2 Other Definitional Provisions.
(a) The words "hereof", "herein", "hereto" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Annex references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
Pledged Collateral, or any part thereof, when used in relation to the Grantor
shall refer to the Collateral or Pledged Collateral or the relevant part
thereof.
(d) All references in this Agreement to any of the property described
in the definition of the term "Collateral" or "Pledged Collateral", or to any
Proceeds thereof, shall be deemed to be references thereto only to the extent
the same constitute Collateral or Pledged Collateral, respectively.
(e) Any reference in any Loan Document to Liens permitted by the
Credit Agreement and any right of the Grantor to create or suffer to exist Liens
permitted by the Credit Agreement are not intended to and do not and will not
subordinate the Security Interest granted hereunder to any such Lien or give
priority to any Person over the Secured Parties.
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SECTION 2 GRANT OF SECURITY INTEREST
2.1 Grant.
The Grantor hereby grants to the Canadian Collateral Agent for the
rateable benefit of the Secured Parties a first priority security interest in,
and mortgages, charges, assigns, hypothecates and pledges to the Canadian
Collateral Agent for the rateable benefit of the Secured Parties, in each case,
subject to existing licenses to use the Copyrights, Patents, Trade-marks,
Industrial Designs and Trade Secrets granted by the Grantor in the ordinary
course of business, all of the Collateral of the Grantor, as collateral security
for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations of the
Grantor, except as provided in subsection 2.2. The term "Collateral" means the
following property (wherever located) now owned or at any time hereafter
acquired by the Grantor or in which the Grantor now has or at any time in the
future may acquire any right, title or interest, except as provided in
subsection 2.2:
(a) all present and after-acquired personal property;
(b) all Accounts;
(c) all Accounts Receivable;
(d) all Money (including all cash);
(e) all Cash Equivalents;
(f) all Chattel Paper;
(g) all Contracts;
(h) all demand, time, savings, passbook or similar account maintained
with a bank (collectively, the "Deposit Accounts") (including DDAs);
(i) all Documents of Title;
(j) all Equipment;
(k) all intangibles including all security interests, goodwill, choses
in action, contracts, contract rights, licenses and other contractual benefits;
(l) all Instruments;
(m) all insurance proceeds;
(n) all Intellectual Property;
(o) all Inventory;
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(p) all Investment Property;
(q) all Letter of Credit Rights;
(r) all Securities;
(s) all Rental Fleet;
(t) all Pledged Collateral;
(u) all Vehicles (other than Rental Fleet);
(v) all Fixtures;
(w) all books and records pertaining to any of the foregoing;
(x) the Collateral Proceeds Account;
(y) all substitutions and replacements of and increases, additions
and, where applicable, accessions to the property described in (a) through (x)
inclusive; and
(z) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing and all collateral security and guarantees given by
any Person with respect to any of the foregoing.
2.2 Certain Limited Exceptions.
No security interest, mortgage, charge, assignment, hypothecation or
pledge (collectively, "Security Interest") is or will be granted pursuant hereto
in any right, title or interest of the Grantor under or in (collectively, the
"Excluded Assets"):
(a) any Instruments, Contracts, Chattel Paper, Intangibles, Copyright
Licenses, Patent Licenses, Trade-▇▇▇▇ Licenses, Trade Secret Licenses,
Industrial Design Licenses or other contracts or agreements with or issued by
Persons other than Holdings, a Subsidiary of Holdings or an Affiliate thereof,
(collectively, "Restrictive Agreements") that would otherwise be included in the
Collateral (and such Restrictive Agreements shall not be deemed to constitute a
part of the Collateral) for so long as, and to the extent that, the granting of
such a security interest pursuant hereto would result in a breach, default or
termination of such Restrictive Agreements (in each case, except to the extent
that, pursuant to the PPSA or other applicable law, the granting of security
interests therein can be made without resulting in a breach, default or
termination of such Restrictive Agreements). The security interest with respect
to each Restrictive Agreement will constitute a trust in favour of the Canadian
Collateral Agent, for the benefit of the Secured Parties, pursuant to which the
Grantor holds as trustee all Proceeds arising under or in connection with the
Restrictive Agreement in trust for the Canadian Collateral Agent, for the
benefit of the Secured Parties, on the following basis: (i) subject to the
Credit Agreement, until the security interest is enforceable, the Grantor is
entitled to receive all such Proceeds; and (ii) whenever the security interest
is enforceable, (A) all rights of the Grantor to receive such Proceeds cease and
all such Proceeds will be immediately paid over to the Canadian Collateral
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Agent for the benefit of the Secured Parties, and (B) the Grantor will take all
actions requested by the Canadian Collateral Agent to collect and enforce
payment and other rights arising under the Restrictive Agreement;
(b) any Equipment that would otherwise be included in the Collateral
(and such Equipment shall not be deemed to constitute a part of the Collateral)
if such Equipment is subject to a Lien permitted by subsection 8.3(h) of the
Credit Agreement (but only for so long as such Liens are in place);
(c) any property that would otherwise be included in the Collateral
(and such property shall not be deemed to constitute a part of the Collateral)
if such property has been sold or otherwise transferred in connection with a
Sale and Leaseback Transaction permitted under subsection 8.11 of the Credit
Agreement, or is subject to any Liens permitted under subsection 8.3(n) of the
Credit Agreement. Notwithstanding the foregoing, the security interest of the
Collateral Agent shall attach to any money, securities or other consideration
received by the Grantor as consideration for the sale or other disposition of
such property;
(d) any Money, cash, cheques, other negotiable instrument, funds and
other evidence of payment held in any Deposit Account of the Parent Borrower or
any of its Subsidiaries (i) for the benefit of customers of the Grantor or any
of its Subsidiaries in the ordinary course of business and (ii) in the nature of
security deposit with respect to obligations for the benefit of the Parent
Borrower or any of its Subsidiaries, which must be held for or returned to the
applicable counterparty under applicable law or pursuant to Contractual
Obligations;
(e) any ULC Shares. If the Grantor acquires any ULC Shares, it shall
immediately notify the Canadian Collateral Agent. Upon the request of the
Canadian Collateral Agent, the Grantor shall execute and deliver all such
agreements and deliver all such other documents, opinions and certificates
(including without limitation share certificates evidencing such ULC Shares) as
the Canadian Collateral Agent may reasonably require to receive a perfected,
first ranking priority Security Interest in the ULC Shares, in each case, in
form and substance reasonably acceptable to the Canadian Collateral Agent.
(f) the Collateral shall not include 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, the Grantor shall stand possessed of such last
day in trust to assign the same to any person acquiring such term;
(g) the term "Goods" when used in this Agreement shall not include
"consumer goods" of the Grantor as that term is defined in the PPSA;
(h) notwithstanding Section 2.1, the Grantor's grant of security in
Trade-marks (as defined in the Trade-marks Act (Canada)) under this Agreement
shall be limited to a grant by the Grantor of a security interest in all of the
Grantor's right, title and interest in such Trade-marks;
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2.3 Attachment.
The Grantor and the Canadian Collateral Agent hereby acknowledge that
(a) value has been given in respect of the security interests granted herein;
(b) the Grantor has rights in the Collateral in which it has granted a security
interest; and (c) this Agreement constitutes a security agreement as that term
is defined in the PPSA.
2.4 Deficiency.
If the Collateral is realized upon and the security interest in the
Collateral is not sufficient to satisfy all of the Obligations, the Grantor
acknowledges and agrees that, subject to the provisions of the PPSA, the Grantor
shall continue to be liable for any Obligations remaining outstanding and the
Canadian Collateral Agent shall be entitled to pursue full payment thereof.
SECTION 3 REPRESENTATIONS AND WARRANTIES
To induce the Canadian Collateral Agent and the Lenders to enter into
the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Canadian Borrowers thereunder, the Grantor hereby
represents and warrants to the Canadian Collateral Agent and each other Secured
Party that, in each case after giving effect to the Transaction:
3.1 Title; No Other Liens.
Except for the security interests granted to the Canadian Collateral
Agent for the rateable benefit of the Secured Parties pursuant to this Agreement
and the other Liens permitted to exist on the Collateral by the Credit Agreement
(including, without limitation, subsection 8.3 thereof), the Grantor owns each
item of the Collateral free and clear of any and all Liens. Except as set forth
on Schedule 3, no currently effective financing statement or other similar
public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favour of the
Canadian Collateral Agent for the rateable benefit of the Secured Parties
pursuant to this Agreement or as are permitted by the Credit Agreement
(including without limitation subsection 8.3 thereof) or any other Loan Document
or for which financing change statements or discharges will be delivered on the
Closing Date.
3.2 Perfected First Priority Liens.
(a) This Agreement is effective to create, as collateral security for
the Obligations of the Grantor, valid and enforceable Liens on the Grantor's
Collateral in favour of the Canadian Collateral Agent for the benefit of the
Secured Parties, except (i) with respect to all Intellectual Property that is an
Excluded Asset, or (ii) as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditor's rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(b) Except with regard to (i) Liens (if any) on Specified Assets and
(ii) any first ranking priority liens or deemed trusts created in favour of the
Canadian federal, provincial or
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territorial government as required by law (if any), upon the completion of the
Filings and, with respect to Instruments, Chattel Paper, Pledged Securities and
Documents of Title upon the earlier of such Filing or the delivery to and
continuing possession by the Canadian Collateral Agent of all Instruments,
Chattel Paper, Pledged Securities and Documents of Title, a security interest in
which is perfected by possession, the Liens created pursuant to this Agreement
will constitute valid Liens on and (to the extent provided herein) perfected
security interests in the Grantor's Collateral in favour of the Canadian
Collateral Agent for the benefit of the Secured Parties, and will be prior to
all other Liens of all other Persons other than Permitted Liens, and enforceable
as such as against all other Persons other than Ordinary Course Transferees,
except to the extent that the recording of an assignment or other transfer of
title to the Canadian Collateral Agent or the recording of other applicable
documents, in each case, in the Canadian Intellectual Property Office may be
necessary for perfection or enforceability, and except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law) or by an implied covenant of good faith and fair dealing. As
used in this subsection 3.2(b), the following terms shall have the following
meanings:
"Filings": the filing, registration or recording of (i) the Financing
Statements as set forth in Schedule 3, (ii) this Agreement or a notice
thereof with respect to Intellectual Property as set forth in Schedule 3,
and (iii) any filings after the Closing Date in any other jurisdiction as
may be necessary under any Requirement of Law.
"Financing Statements": the financing statements delivered to the
Canadian Collateral Agent by the Grantor on the Closing Date for filing in
the jurisdictions listed in Schedule 3.
"Ordinary Course Transferees": (i) with respect to goods only, buyers
in the ordinary course of business and lessees in the ordinary course of
business, (ii) with respect to intangibles only, licensees in the ordinary
course of business, and (iii) any other Person who is entitled to take free
of the Lien.
"Permitted Liens": Liens permitted pursuant to the Credit Documents,
including without limitation those permitted to exist pursuant to
subsection 8.3 of the Credit Agreement.
"Specified Assets": the following property and assets of the Grantor:
(1) Patents, Patent Licenses, Trade-marks, Trade-▇▇▇▇ Licenses, Industrial
Designs and Industrial Design Licenses to the extent that (a) Liens
thereon cannot be perfected by the filing of financing statements
under the PPSA or by the filing and acceptance thereof in the Canadian
Intellectual Property Office (including Liens on such Patents, Patent
Licenses, Trade-marks, Trade-▇▇▇▇ Licenses, Industrial Designs and
Industrial Design Licenses that are non-Canadian Patents, Patent
Licenses, Trade-marks, Trade-▇▇▇▇ Licenses, Industrial Designs or
Industrial Design Licenses) or (b) such Patents, Patent Licenses,
Trade-marks, Trade-▇▇▇▇ Licenses, Industrial Designs and Industrial
Design Licenses are not, individually
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or in the aggregate, material to the business of any Canadian Borrower
and its Subsidiaries taken as a whole;
(2) Copyrights and Copyright Licenses with respect thereto and Accounts or
receivables arising therefrom to the extent that the PPSA is not
applicable to the creation or perfection of Liens thereon;
(3) Collateral for which the perfection of Liens thereon requires filings
in or other actions under the laws of jurisdictions outside of Canada,
any province or territory;
(4) goods included in Collateral received by any Person from the Grantor
for "sale or return" to the extent of claims of creditors of such
Person;
(5) Equipment constituting fixtures (other than any such Equipment subject
to a Mortgage);
(6) Proceeds of Accounts or Inventory which do not themselves constitute
Collateral or which have not yet been transferred to or deposited in
the Collateral Proceeds Account (if any) or to a Blocked Account; and
(7) uncertificated securities to the extent a security interest is not
perfected by the filing of a financing statement.
3.3 Jurisdiction of Organization and Locations of Collateral.
On the date hereof, the Grantor's jurisdiction of incorporation or
amalgamation, chief executive office, and the locations of its Collateral, are
as specified on Schedule 4.
3.4 Accounts Receivable.
The amounts represented by the Grantor to the Canadian Administrative
Agent or the other Secured Parties from time to time as owing by each account
debtor or by all account debtors in respect of the Grantor's Accounts Receivable
constituting Collateral will at such time be the correct amount, in all material
respects, actually owing by such account debtor or debtors thereunder, except to
the extent that appropriate reserves therefor have been established on the books
of the Grantor in accordance with GAAP. Unless otherwise indicated in writing to
the Canadian Administrative Agent, each Account Receivable of the Grantor arises
out of a bona fide sale and delivery of goods or rendition of services by the
Grantor. The Grantor has not given any account debtor any deduction in respect
of the amount due under any such Account, except in the ordinary course of
business or as the Grantor may otherwise advise the Canadian Administrative
Agent in writing.
3.5 Patents, Trade-marks, Copyrights and Industrial Designs.
Schedule 5 lists all material Trade-marks, material Copyrights,
material Patents and material Industrial Designs, in each case registered in the
Canadian Intellectual Property Office and owned by the Grantor in its own name
as of the date hereof, and all material Trade-
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▇▇▇▇ Licenses, all material Copyright Licenses, all material Patent Licenses and
material Industrial Designs (including, without limitation, material Trade-▇▇▇▇
Licenses for registered Trade-marks, all material Copyright Licenses for
registered Copyrights, material Patent Licenses for registered Patents and
material Industrial Design Licenses for registered Industrial Designs) owned by
the Grantor in its own name as of the date hereof.
3.6 All Shares Pledged.
Except as provided in subsection 2.2, the shares of Pledged Stock
pledged by the Grantor hereunder constitute in the case of shares of a
Subsidiary, all the issued and outstanding shares of all classes of the Capital
Stock of such Subsidiary owned by the Grantor as is specified on Schedule 2.
3.7 Shares Duly and Validly Issued.
All the shares of the Pledged Stock pledged by the Grantor hereunder
have been duly and validly issued and are fully paid and non-assessable (or the
equivalent, if any, under applicable foreign law).
3.8 Grantor Beneficial Owner.
The Grantor is the record and beneficial owner of, and has good title
to, the Pledged Securities pledged by it hereunder, free of any and all Liens or
options in favour of, or claims of, any other Person, except the security
interest created by this Agreement and Liens arising by operation of law or
expressly permitted by the Credit Agreement.
3.9 Valid Interest.
Upon the delivery to the Canadian Collateral Agent of the certificates
evidencing the Pledged Securities held by the Grantor together with executed
undated stock powers or other instruments of transfer, the security interest
created in such Pledged Securities constituting certificated securities by this
Agreement, assuming the continuing possession of such Pledged Securities by the
Canadian Collateral Agent will constitute a valid, perfected first priority
security interest in such Pledged Securities to the extent provided in and
governed by the PPSA, enforceable in accordance with its terms against all
creditors of the Grantor and any Persons purporting to purchase such Pledged
Securities from the Grantor, except as enforceability may be affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
Upon the earlier of (x) (to the extent a security in uncertificated
securities may be perfected by the filing of a financing statement) the filing
of the financing statements listed on Schedule 3 hereto and (y) the obtaining
and maintenance of control by the Canadian Collateral Agent (or its agents
appointed for the purposes of perfection) of all Pledged Securities that
constitute uncertificated securities, the security interest created by this
Agreement in such Pledged Securities that constitute uncertificated securities,
will constitute a valid, perfected first
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priority security interest in such Pledged Securities constituting
uncertificated securities, enforceable in accordance with its terms against all
creditors of the Grantor and any persons purporting to purchase such Pledged
Securities from the Grantor, except as enforceability may be affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
SECTION 4 COVENANTS
The Grantor covenants and agrees with the Canadian Collateral Agent
and the other Secured Parties that, from and after the date of this Agreement
until the earlier to occur of (i) the date upon which the Loans (including the
face amount of all outstanding Bankers' Acceptance Loans), any Reimbursement
Obligations and all other Obligations then due and owing shall have been paid in
full in cash, no Letter of Credit shall be outstanding (except for Letters of
Credit that have been cash collateralized in a manner satisfactory to the
Issuing Lender) and the Commitments shall have terminated or (ii) the date upon
which all the Capital Stock of the Grantor shall have been sold or otherwise
disposed of (to a Person other than Holdings, the Parent Borrower or a
Subsidiary of either) as permitted under the terms of the Credit Agreement:
4.1 Delivery of Instruments and Chattel Paper.
If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument or Chattel Paper, the
Grantor shall (except as provided in the following sentence) be entitled to
retain possession of all Collateral of the Grantor evidenced by any Instrument
or Chattel Paper, and shall hold all such Collateral in trust for the Canadian
Collateral Agent, for the rateable benefit of the Secured Parties. In the event
that an Event of Default shall have occurred and be continuing, upon the request
of the Canadian Collateral Agent, such Instrument or Chattel Paper (other than
ordinary course rental contracts for Rental Fleet Vehicles) shall be promptly
delivered to the Canadian Collateral Agent duly endorsed in a manner
satisfactory to the Canadian Collateral Agent to be held as Collateral pursuant
to this Agreement. The Grantor shall not permit any other Person to possess any
such Collateral at any time other than in connection with any sale or other
disposition of such Collateral in a transaction permitted by the Credit
Agreement.
4.2 Maintenance of Insurance.
The Grantor will maintain with financially sound and reputable
insurance companies insurance on all property material to the business of the
Parent Borrower and its Subsidiaries, taken as a whole, in at least such amounts
and against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies of similar size engaged in the same or a
similar business; furnish to the Canadian Collateral Agent, upon written
request, information in reasonable detail as to the insurance carried; and
ensure that at all times the Canadian Collateral Agent and the other Secured
Parties, shall be named as additional insureds with respect to
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liability policies and the Canadian Collateral Agent shall be names as loss
payee with respect to the casualty insurance maintained by the Grantor with
respect to the Collateral.
4.3 Payment of Obligations.
The Grantor will pay and discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all material
taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of income or profits therefrom, as well as all material
claims of any kind (including, without limitation, material claims for labour,
materials and supplies) against or with respect to the Collateral, except that
no such tax, assessment, charge or levy need be paid or satisfied if the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Grantor.
4.4 Maintenance of Perfected Security Interest; Further Documentation.
(a) The Grantor shall maintain the security interest created by this
Agreement in the Collateral as a perfected security interest having at least the
priority described in subsection 3.2 and shall defend such security interest
against the claims and demands of all Persons whomsoever.
(b) The Grantor will furnish to the Canadian Collateral Agent from
time to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Canadian Collateral Agent may reasonably request in writing, all in reasonable
detail.
(c) At any time and from time to time, upon the written request of the
Canadian Collateral Agent, and at the sole expense of the Grantor, the Grantor
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Canadian Collateral Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted by the Grantor,
including, without limitation, the filing of any financing or financing change
statements under the PPSA with respect to the security interests created hereby.
4.5 Changes in Name, Jurisdiction of Organization, etc.
The Grantor will not, except upon not less than 30 days' prior written
notice to the Canadian Collateral Agent, change its name or jurisdiction of
organization (whether by amalgamation or otherwise) or chief executive office or
move any of its Collateral to a new jurisdiction other than disclosed in
Schedule 4; provided that, promptly after receiving a written request therefor
from the Canadian Collateral Agent, the Grantor shall deliver to the Canadian
Collateral Agent all additional financing statements or financing change
statement and other documents reasonably requested by the Canadian Collateral
Agent to maintain the validity, perfection and priority of the security
interests as and to the extent provided for herein.
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4.6 Notices.
The Grantor will advise the Canadian Administrative Agent promptly, in
reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
expressly permitted under the Credit Agreement) on any of the Collateral which
would materially adversely affect the ability of the Canadian Collateral Agent
to exercise any of its remedies hereunder; and
(b) the occurrence of any other event which would reasonably be
expected to have a material adverse effect on the security interests created
hereby.
4.7 Pledged Stock.
In the event the Grantor is an Issuer within the meaning of any
Canadian Security Agreement, the Grantor agrees that (i) it will be bound by the
terms of this Agreement (or such other Canadian Security Agreement, as
applicable) relating to the Pledged Stock issued by it and will comply with such
terms insofar as such terms are applicable to it, (ii) it will notify the
Canadian Collateral Agent promptly in writing of the occurrence of any of the
events described in subsection 4.17 with respect to the Pledged Stock issued by
it and (iii) the terms of subsections 5.3(c) and 5.7 shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it pursuant to
subsection 5.3(c) or 5.7 with respect to the Pledged Stock issued by it.
4.8 Accounts Receivable.
(a) With respect to the Accounts Receivable constituting Collateral,
other than in the ordinary course of business or as permitted by the Loan
Documents, the Grantor will not (i) grant any extension of the time of payment
of any of the Grantor's Accounts Receivable, (ii) compromise or settle any such
Account Receivable for less than the full amount thereof, (iii) release, wholly
or partially, any Person liable for the payment of any Account Receivable, (iv)
allow any credit or discount whatsoever on any such Account Receivable or (v)
amend, supplement or modify any Account Receivable unless such extensions,
compromises, settlements, releases, credits or discounts would not reasonably be
expected to materially adversely affect the value of the Accounts Receivable
constituting Collateral taken as a whole.
(b) The Grantor will deliver to the Canadian Collateral Agent a copy
of each material demand, notice or document received by it that questions or
calls into doubt the validity or enforceability of more than 10% of the
aggregate amount of the then outstanding Accounts Receivable.
4.9 Maintenance of Records.
The Grantor will keep and maintain at its own cost and expense
reasonably satisfactory and complete records of its Collateral, including,
without limitation, a record of all payments received and all credits granted
with respect to such Collateral, and shall ▇▇▇▇ such
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records to evidence this Agreement and the Liens and the security interests
created hereby.
4.10 Acquisition of Intellectual Property.
Within 90 days after the end of each calendar year, the Grantor will
notify the Canadian Collateral Agent of any acquisition of (i) any registration
of any material Copyright, Patent, Trade-▇▇▇▇ or Industrial Design or (ii) any
exclusive rights under a material Copyright License, Patent License, Trade-▇▇▇▇
License or Industrial Design License constituting Collateral, and, except with
respect to Intellectual Property that is an Excluded Asset, shall take such
actions as may be reasonably requested by the Canadian Collateral Agent (but
only to the extent such actions are within the Grantor's control) to perfect the
security interest granted to the Canadian Collateral Agent and the other Secured
Parties therein, to the extent provided herein in respect of any Copyright,
Patent, Trade-▇▇▇▇ or Industrial Design constituting Collateral on the date
hereof, by (x) the execution and delivery of a Confirmation of Security Interest
in Intellectual Property in the form of Annex 1 hereto and the recordation
thereof in the Canadian Intellectual Property Office and (y) the making of
appropriate registrations of financing statements under the PPSA.
4.11 Protection of Trade Secrets.
The Grantor shall take all steps which it deems commercially
reasonable to preserve and protect the secrecy of all material Trade Secrets of
the Grantor.
4.12 Grant of License to Use Intellectual Property.
For the purpose of enabling the Canadian Collateral Agent to exercise
rights and remedies under this Agreement at such time as the Canadian Collateral
Agent shall be lawfully entitled to exercise such rights and remedies, the
Grantor hereby grants to the Canadian Collateral Agent an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to the Grantor) to use, license or sublicense any of the Collateral
consisting of Intellectual Property now owned or hereafter acquired by the
Grantor, and wherever the same may be located, and including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Canadian
Collateral Agent may be exercised, at the option of the Canadian Collateral
Agent, upon the occurrence and during the continuation of an Event of Default,
provided that any license, sublicense or other transaction entered into by the
Canadian Collateral Agent in accordance herewith shall be binding upon the
Grantor notwithstanding any subsequent cure of an Event of Default.
4.13 Deposit Accounts; Etc.
The Grantor shall take, or refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case maybe, so
that no breach of subsection 4.16 of the Credit Agreement is caused by the
failure to take such action or to refrain from taking such action by the Grantor
or any of its Subsidiaries.
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4.14 Protection of Trade-marks.
The Grantor shall not, with respect to any Trade-marks that are
material to the business of the Grantor, cease the use of any of such
Trade-marks or fail to maintain the level of the quality of products sold and
services rendered under any of such Trade-▇▇▇▇ at a level at least substantially
consistent with the quality of such products and services as of the date hereof,
and the Grantor shall take all steps reasonably necessary to insure that
licensees of such Trade-marks use such consistent standards of quality.
4.15 Protection of Intellectual Property.
Subject to the Credit Agreement, the Grantor shall not do any act or
omit to do any act whereby any of the Intellectual Property which is material to
the business of the Grantor may lapse, expire, or become abandoned, or
unenforceable.
4.16 Assignment of Letter of Credit Rights.
In the case of any Letter-of-Credit Rights of the Grantor in any
letter of credit exceeding $5,000,000 in value acquired following the Closing
Date, the Grantor shall use its commercially reasonable efforts to promptly
obtain the consent of the issuer thereof and any nominated person thereon to the
assignment of the proceeds of the related letter of credit, pursuant to an
agreement in form and substance reasonably satisfactory to the Canadian
Administrative Agent.
4.17 Additional Shares.
If the Grantor shall, as a result of its ownership of its Pledged
Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any stock certificate representing a stock or
share dividend or a distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued in connection with
any reorganization), stock option or similar rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, the Grantor shall accept the same as the agent of the Canadian
Collateral Agent and the other Secured Parties, hold the same in trust for the
Canadian Collateral Agent and the other Secured Parties and deliver the same
forthwith to the Canadian Collateral Agent (who will hold the same on behalf of
the Secured Parties) in the exact form received, duly endorsed by the Grantor to
the Canadian Collateral Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by the Grantor, to be held by
the Canadian Collateral Agent, subject to the terms hereof, as additional
collateral security for the Obligations (subject to subsection 2.2). Any sums
paid upon or in respect of the Pledged Stock upon the liquidation or dissolution
of any Issuer (except any liquidation or dissolution of any Subsidiary of the
Parent Borrower in accordance with the Credit Agreement) shall be paid over to
the Canadian Collateral Agent to be held by it hereunder as additional
collateral security for the Obligations, and in case any distribution of capital
shall be made on or in respect of the Pledged Stock or any property shall be
distributed upon or with respect to the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless
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otherwise subject to a perfected security interest in favour of the Canadian
Collateral Agent, be delivered to the Canadian Collateral Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Pledged Stock shall
be received by the Grantor, the Grantor shall, until such money or property is
paid or delivered to the Canadian Collateral Agent, hold such money or property
in trust for the Secured Parties, segregated from other funds of the Grantor, as
additional collateral security for the Obligations.
4.18 Maintenance of Pledged Stock.
Without the prior written consent of the Canadian Collateral Agent,
the Grantor will not (except as permitted by the Credit Agreement) (i) vote to
enable, or take any other action to permit, any Issuer to issue any stock or
other equity securities of any nature or to issue any other securities
convertible into, or granting the right to purchase or exchange for, any stock
or other equity securities of any nature of any Issuer, (ii) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Pledged Securities or Proceeds thereof, (iii) create, incur or permit to
exist any Lien or option in favour of, or any material adverse claim of any
Person with respect to, any of the Pledged Securities or Proceeds thereof, or
any interest therein, except for the security interests created by this
Agreement or Liens arising by operation of law or (iv) enter into any agreement
or undertaking restricting the right or ability of the Grantor or the Canadian
Collateral Agent to sell, assign or transfer any of the Pledged Securities or
Proceeds thereof.
4.19 Pledged Notes.
The Grantor shall, on the date of this Agreement, deliver to the
Canadian Collateral Agent all Pledged Notes then held by the Grantor (excluding
any Pledged Note the principal amount of which does not exceed $3,500,000),
endorsed in blank or, at the request of the Canadian Collateral Agent, endorsed
to the Canadian Collateral Agent. Furthermore, within ten Business Days after
any Grantor obtains a Pledged Note with a principal amount in excess of
$5,000,000, the Grantor shall cause such Pledged Note to be delivered to the
Canadian Collateral Agent, endorsed in blank or, at the request of the Canadian
Collateral Agent, endorsed to the Canadian Collateral Agent.
4.20 Maintenance of Security Interest.
The Grantor shall maintain the security interest created by this
Agreement in the Grantor's Pledged Collateral as a perfected security interest
having at least the priority described in subsection 3.2 and shall defend such
security interest against the claims and demands of all Persons whomsoever. At
any time and from time to time, upon the written request of the Canadian
Collateral Agent and at the sole expense of the Grantor, the Grantor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Canadian Collateral Agent may reasonably
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted by the Grantor.
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SECTION 5 REMEDIAL PROVISIONS
5.1 Certain Matters Relating to Accounts.
(a) At any time and from time to time after the occurrence and during
the continuance of an Event of Default, the Canadian Collateral Agent shall have
the right to make test verifications of the Accounts Receivable constituting
Collateral in any reasonable manner and through any reasonable medium that it
reasonably considers advisable, and the Grantor shall furnish all such
assistance and information as the Canadian Collateral Agent may reasonably
require in connection with such test verifications. At any time and from time to
time after the occurrence and during the continuance of an Event of Default,
upon the Canadian Collateral Agent's reasonable request and at the expense of
the Grantor, the Grantor shall cause independent public or chartered accountants
or others reasonably satisfactory to the Canadian Collateral Agent to furnish to
the Canadian Collateral Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts Receivable constituting
Collateral.
(b) The Canadian Collateral Agent hereby authorizes the Grantor to
collect the Grantor's Accounts Receivable constituting Collateral and the
Canadian Collateral Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of Default specified
in subsection 9(a) of the Credit Agreement. If required by the Canadian
Collateral Agent at any time after the occurrence and during the continuance of
an Event of Default specified in subsection 9(a) of the Credit Agreement, any
Proceeds constituting payments or other cash proceeds of Accounts Receivables
constituting Collateral, when collected by the Grantor, (i) shall be forthwith
(and, in any event, within two Business Days of receipt by the Grantor)
deposited in, or otherwise transferred by the Grantor to the Collateral Proceeds
Account, subject to withdrawal by the Canadian Collateral Agent for the account
of the Secured Parties only as provided in subsection 5.5, and (ii) until so
turned over, shall be held by the Grantor in trust for the Canadian Collateral
Agent and the other Secured Parties, segregated from other funds of the Grantor.
All Proceeds constituting collections or other cash proceeds of Accounts
Receivable constituting Collateral while held by the Canadian Collateral Account
Bank (or by the Grantor in trust for the benefit of the Canadian Collateral
Agent and the other Secured Parties) shall continue to be collateral security
for all of the Obligations and shall not constitute payment thereof until
applied as hereinafter provided. At any time when an Event of Default specified
in subsection 9(a) of the Credit Agreement has occurred and is continuing, at
the Canadian Collateral Agent's election, each of the Canadian Administrative
Agent and the Canadian Collateral Agent may apply all or any part of the funds
on deposit in the Canadian Collateral Proceeds Account established by the
Grantor to the payment of the Obligations of the Grantor then due and owing,
such application to be made as set forth in subsection 5.5 hereof. So long as no
Event of Default has occurred and is continuing, the funds on deposit in the
Canadian Collateral Proceeds Account shall be remitted as provided in subsection
5.1(d) hereof.
(c) At any time and from time to time after the occurrence and during
the continuance of an Event of Default specified in subsection 9(a) of the
Credit Agreement, at the Canadian Collateral Agent's request, the Grantor shall
deliver to the Canadian Collateral Agent copies or, if required by the Canadian
Administrative Agent for the enforcement thereof or
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foreclosure thereon, originals of all documents held by the Grantor evidencing,
and relating to, the agreements and transactions which gave rise to the
Grantor's Accounts Receivable constituting Collateral, including, without
limitation, all statements relating to the Grantor's Accounts Receivable
constituting Collateral and all orders, invoices and shipping receipts.
(d) So long as no Event of Default has occurred and is continuing, the
Canadian Collateral Agent shall instruct the Canadian Collateral Account Bank to
promptly remit any funds on deposit in the Grantor's Canadian Collateral
Proceeds Account to the Grantor's General Fund Account. In the event that an
Event of Default has occurred and is continuing, the Canadian Collateral Agent
and the Grantors agree that the Canadian Collateral Agent, at its option, may
require that each Collateral Proceeds Account and the General Fund Account of
the Grantor be established at the Canadian Collateral Agent. The Grantor shall
have the right, at any time and from time to time, to withdraw such of its funds
from its General Fund Account, and to maintain such balances in its General Fund
Account, as it shall deem to be necessary or desirable.
5.2 Communications with Obligors; Grantors Remain Liable.
(a) The Canadian Collateral Agent, in its own name or in the name of
others, may at any time and from time to time after the occurrence and during
the continuance of an Event of Default specified in subsection 9(a) of the
Credit Agreement, communicate with obligors under the Accounts Receivable
constituting Collateral and parties to the Contracts (in each case, to the
extent constituting Collateral) to verify with them to the Canadian Collateral
Agent's satisfaction the existence, amount and terms of any Accounts Receivable
constituting Collateral or Contracts.
(b) Upon the request of the Canadian Collateral Agent at any time
after the occurrence and during the continuance of an Event of Default specified
in subsection 9(a) of the Credit Agreement, the Grantor shall notify obligors on
the Grantor's Accounts Receivable and parties to the Grantor's Contracts (in
each case, to the extent constituting Collateral) that such Accounts Receivable
and such Contracts have been assigned to the Canadian Collateral Agent, for the
rateable benefit of the Secured Parties, and that payments in respect thereof
shall be made directly to the Canadian Collateral Agent.
(c) Anything herein to the contrary notwithstanding, the Grantor shall
remain liable under each of its Accounts Receivable to observe and perform all
the conditions and obligations to be observed and performed by it thereunder,
all in accordance with the terms of any agreement giving rise thereto. None of
the Canadian Collateral Agent, the Canadian Administrative Agent or any other
Secured Party shall have any obligation or liability under any Account
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Canadian Collateral Agent or any other
Secured Party of any payment relating thereto, nor shall the Canadian Collateral
Agent or any other Secured Party be obligated in any manner to perform any of
the obligations of the Grantor under or pursuant to any Account Receivable (or
any agreement giving rise thereto) 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 thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts that may have been assigned to it or to which it may be entitled
at any time or times.
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5.3 Pledged Stock.
(a) Unless an Event of Default shall have occurred and be continuing
and the Canadian Collateral Agent shall have given notice to the Grantor of the
Canadian Collateral Agent's intent to exercise its corresponding rights pursuant
to subsection 5.3(b), the Grantor shall be permitted to receive all cash
dividends and distributions paid in respect of the Pledged Stock (subject to the
last two sentences of subsection 4.17 of this Agreement) and all payments made
in respect of the Pledged Notes, to the extent permitted in the Credit
Agreement, and to exercise all voting and corporate rights with respect to the
Pledged Stock; provided, however, that no vote shall be cast or corporate right
exercised or such other action taken (other than in connection with a
transaction expressly permitted by the Credit Agreement) which, in the Canadian
Collateral Agent's reasonable judgment, would materially impair the Pledged
Stock or the related rights or remedies of the Secured Parties or which would be
inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Canadian Collateral Agent shall give notice of its intent to exercise such
rights to the Grantor, (i) the Canadian Collateral Agent shall have the right to
receive any and all cash dividends, payments or other Proceeds paid in respect
of the Pledged Stock and make application thereof to the Obligations of the
Grantor in such order as is provided in subsection 5.5, and (ii) any or all of
the Pledged Stock shall be registered in the name of the Canadian Collateral
Agent or its nominee, and the Canadian Collateral Agent or its nominee may
thereafter exercise (x) all voting, corporate and other rights pertaining to
such Pledged Stock at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange,
subscription and any other rights, privileges or options pertaining to such
Pledged Stock as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Stock upon the merger, consolidation, reorganization, recapitalization or other
fundamental change in the corporate structure of any Issuer, or upon the
exercise by the Grantor or the Canadian Collateral Agent of any right, privilege
or option pertaining to such Pledged Stock, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Stock with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Canadian Collateral Agent may reasonably
determine), all without liability (other than for its gross negligence or wilful
misconduct) except to account for property actually received by it, but the
Canadian Collateral Agent shall have no duty to the Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing, provided that the Canadian Collateral Agent shall not
exercise any voting or other consensual rights pertaining to the Pledged Stock
in any way that would constitute an exercise of the remedies described in
subsection 5.6 other than in accordance with subsection 5.6.
(c) The Grantor hereby authorizes and instructs each Issuer or maker
of any Pledged Securities pledged by the Grantor hereunder to (i) comply with
any instruction received by it from the Canadian Collateral Agent in writing
that (x) states that an Event of Default has occurred and is continuing and (y)
is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from the Grantor, and the Grantor agrees that each
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Issuer or maker shall be fully protected in so complying, and (ii) unless
otherwise expressly permitted hereby, pay any dividends or other payments with
respect to the Pledged Securities directly to the Canadian Collateral Agent.
5.4 Proceeds to be Turned Over To Canadian Collateral Agent.
In addition to the rights of the Canadian Collateral Agent and the
other Secured Parties specified in subsection 5.1 with respect to payments of
Accounts Receivable constituting Collateral, if an Event of Default shall occur
and be continuing, and the Canadian Collateral Agent shall have instructed the
Grantor to do so, all Proceeds received by the Grantor consisting of cash,
cheques and other Cash Equivalent items shall be held by the Grantor in trust
for the Canadian Collateral Agent and the other Secured Parties hereto, or as
applicable, segregated from other funds of the Grantor, and shall, forthwith
upon receipt by the Grantor, be turned over to the Canadian Collateral Agent (or
its agents appointed for purposes of perfection) in the exact form received by
the Grantor (duly endorsed by the Grantor to the Canadian Collateral Agent if
required). All Proceeds received by the Canadian Collateral Agent hereunder
shall be held by the Canadian Collateral Agent in the relevant Canadian
Collateral Proceeds Account maintained under its sole dominion and control. All
Proceeds while held by the Canadian Collateral Agent in such Canadian Collateral
Proceeds Account (or by the Grantor in trust for the Canadian Collateral Agent
and the other Secured Parties) shall continue to be held as collateral security
for all the Obligations of the Grantor and shall not constitute payment thereof
until applied as provided in subsection 5.5.
5.5 Application of Proceeds.
5.5.1 It is agreed that if an Event of Default shall occur and be
continuing, any and all Proceeds of the Collateral received by the Canadian
Collateral Agent (whether from the Grantor or otherwise) shall be held by the
Canadian Collateral Agent for the benefit of the Secured Parties as collateral
security for the Obligations of the Grantor (whether matured or unmatured),
and/or then or at any time thereafter may, in the sole discretion of the
Canadian Collateral Agent, be applied by the Canadian Collateral Agent against
the Obligations of the Grantor then due and owing as follows:
(a) first, to the payment of all amounts owing the Canadian Collateral
Agent for (i) any amounts advanced by the Canadian Collateral Agent in order to
preserve the Collateral or preserve its security interest in the Collateral,
(ii) in the event of the enforcement of any indebtedness, obligations, or
liabilities of the Grantor, after an Event of Default shall have occurred and be
continuing, the reasonable expenses of retaking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral, or of
any exercise by the Canadian Collateral Agent of its rights hereunder, together
with reasonable attorneys' fees and court costs and (iii) all amounts paid to
which the Canadian Collateral Agent has the right to reimbursement under
subsection 8.5;
(b) second, to the extent proceeds remain after the application
pursuant to the preceding clause (a), to the payment of all amounts owing to any
Agent pursuant to any of the Loan Documents in its capacity as such;
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(c) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (a) and (b), an amount equal to the
outstanding Primary Obligations shall be paid to the Secured Parties as provided
in subsection 5.5.2 hereof, with each Secured Party receiving an amount equal to
its outstanding Primary Obligations or, if the proceeds are insufficient to pay
in full all such Primary Obligations, its Pro Rata Share of the amount remaining
to be distributed;
(d) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (a) through (c), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured Parties as
provided in subsection 5.5.2 hereof, with each Secured Party receiving an amount
equal to its outstanding Secondary Obligations or, if the proceeds are
insufficient to pay in full all such Secondary Obligations, its Pro Rata Share
of the amount remaining to be distributed;
(e) fifth, to the extent proceeds remain after the application
pursuant to preceding clauses (a) through (d), inclusive, ratably to any then
remaining unpaid Obligations; and
(f) sixth, to the extent proceeds remain after the application
pursuant to the preceding clauses (a) through (e), inclusive, and following the
termination of this Agreement, to the Grantor or to whomever may be lawfully
entitled to receive such surplus.
5.5.2 For purposes of this Agreement, (i) "Pro Rata Share" shall mean,
when calculating a Secured Party's portion of any distribution or amount, that
amount (expressed as a percentage) equal to a fraction the numerator of which is
the then unpaid amount of such Secured Party's Primary Obligations or Secondary
Obligations, as the case may be, and the denominator of which is the then
outstanding amount of all Primary Obligations or Secondary Obligations, as the
case may be, (ii) "Primary Obligations" shall mean (x) in the case of the Loan
Document Obligations, all unpaid principal (or, face amount or Stated Amount, as
applicable) of, premium, if any, fees and interest on, all Loans, all
Reimbursement Obligations, the Letters of Credit and all fees and expenses due
and owing pursuant to the Credit Agreement and (y) in the case of the Other
Obligations, all amounts due under each Interest Rate Protection Agreement or
Permitted Hedging Arrangement with an Other Creditor (other than indemnities,
fees (including, without limitation, attorneys' fees) and similar obligations
and liabilities), and (iii) "Secondary Obligations" shall mean all Obligations
other than Primary Obligations.
5.5.3 Each of the Secured Parties, by their acceptance of the benefits
hereof and of the other Security Documents, agrees and acknowledges that if the
Lender Creditors receive a distribution on account of undrawn amounts with
respect to Letters of Credit issued under the Credit Agreement (which shall only
occur after all Loans and Reimbursement Obligations constituting Primary
Obligations have been paid in full), such amounts shall be paid to the Canadian
Administrative Agent under the Credit Agreement and held by it, for the equal
and ratable benefit of the respective Lender Creditors, as cash security for the
repayment of Obligations owing to the Lender Creditors as such. If any amounts
are held as cash security pursuant to the immediately preceding sentence, then
upon the termination of all outstanding Letters of Credit under the Credit
Agreement constituting Primary Obligations and after the application of all such
cash security to the repayment of all Obligations owing to the respective Lender
Creditors after giving effect to the termination of all such Letters of Credit,
if there
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remains any excess cash, such excess cash shall be returned by the Canadian
Administrative Agent to the Canadian Collateral Agent for distribution in
accordance with subsection 5.5.1 hereof.
5.5.4 All payments required to be made hereunder shall be made (x) if
to the Lender Creditors, to the Canadian Administrative Agent for the account of
the Lender Creditors and (y) if to the Other Creditors, to the trustee, paying
agent or other similar representative (each, a "Representative") for the Other
Creditors or, in the absence of such a Representative, directly to the Other
Creditors.
5.5.5 For purposes of applying payments received in accordance with
this subsection 5.5.5, the Canadian Collateral Agent shall be entitled to rely
upon (i) the Administrative Agents and (ii) the Representative or, in the
absence of such a Representative, upon the Other Creditors for a determination
(which the Administrative Agents, each Representative and the Other Creditors
agree (or shall agree) to provide upon request of the Canadian Collateral Agent)
of the outstanding Primary Obligations and Secondary Obligations owed to the
Lender Creditors or the Other Creditors, as the case may be. Unless it has
received written notice from a Lender Creditor or an Other Creditor to the
contrary, the Administrative Agents and each Representative, in furnishing
information pursuant to the preceding sentence, and the Canadian Collateral
Agent, in acting hereunder, shall be entitled to assume that no Secondary
Obligations are outstanding. Unless it has written notice from an Other Creditor
to the contrary, the Canadian Collateral Agent, in acting hereunder, shall be
entitled to assume that no Interest Rate Protection Agreements or Permitted
Hedging Arrangements with an Other Creditor are in existence.
5.5.6 The Grantor shall remain liable to the extent of any deficiency
between the amount of the proceeds of the Collateral and the aggregate amount of
the Obligations.
5.5.7 To the extent any other Loan Document requires Proceeds of
Collateral under such Loan Document to be applied in accordance with the
provisions of this Agreement, the Canadian Collateral Agent or holder under such
other Loan Document shall apply such Proceeds in accordance with this Section.
5.6 PPSA and Other Remedies.
(a) If an Event of Default shall occur and be continuing, the Canadian
Collateral Agent, on behalf of the Secured Parties, may exercise, in addition to
all other rights and remedies granted to them in this Agreement, the Credit
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations to the extent permitted by applicable law, all
rights and remedies of a secured party under the PPSA, any other applicable law
and in equity. Without limiting the generality of the foregoing, and except to
the extent restricted by applicable law, the Canadian Collateral Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances, enter
onto any premises where Collateral consisting of tangible personal property may
be located, forthwith collect, receive, appropriate and realize upon the
Collateral, or any part
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thereof; and/or may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of the Canadian
Collateral Agent or any other Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Canadian Collateral Agent or any other Secured Party shall have the right,
except to the extent restricted by applicable law, upon any such sale or sales,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption in the Grantor, which right or equity is hereby waived
and released. The Grantor further agrees, at the Canadian Collateral Agent's
request, to assemble the Collateral and make it available to the Canadian
Collateral Agent at places which the Canadian Collateral Agent shall reasonably
select, whether at the Grantor's premises or elsewhere. The Canadian Collateral
Agent shall apply the net proceeds of any action taken by it pursuant to this
subsection 5.6, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Canadian Collateral Agent and the other Secured Parties hereunder, including,
without limitation, reasonable legal fees and disbursements, to the payment in
whole or in part of the Obligations of the Grantor then due and owing, in the
order of priority specified in subsection 5.5 above, and only after such
application and after the payment by the Canadian Collateral Agent of any other
amount required by any provision of law, need the Canadian Collateral Agent
account for the surplus, if any, to the Grantor. To the extent permitted by
applicable law, (i) the Grantor waives all claims, damages and demands it may
acquire against the Canadian Collateral Agent or any other Secured Party arising
out of the repossession, retention or sale of the Collateral, other than any
such claims, damages and demands that may arise from the gross negligence or
wilful misconduct of any of the Canadian Collateral Agent or such other Secured
Party, and (ii) if any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
(b) The Canadian Collateral 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 the Grantor or not, to be an interim receiver,
receiver or receivers (hereinafter called a "Receiver", which term when used
herein shall include a receiver and manager) of such Collateral (including any
interest, income or profits therefrom). Any such Receiver shall act as agent for
the Canadian Collateral Agent for the purposes of taking possession of the
Collateral but otherwise and for all other purpose, be deemed the agent of the
Grantor and not of the Canadian Collateral Agent. The Canadian Collateral 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
employees. The identity of the receiver, its replacement and its remuneration
are within the sole and unfettered discretion of the Canadian Collateral Agent.
Subject to the provisions of the instrument appointing it, any such Receiver
shall (i) have such powers as have been granted to the Canadian Collateral Agent
under this Section 5 and (ii) shall be entitled to exercise such powers at any
time that such powers would otherwise be exercisable by the Canadian Collateral
Agent under this Section 5, which powers shall include, but are not limited to,
the power to take possession of the Collateral, to preserve the Collateral or
its value, to carry on or concur in carrying on all or any part of the business
of the Grantor and to sell, lease, license
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or otherwise dispose of or concur in selling, leasing, licensing or otherwise
disposing of the Collateral. To facilitate the foregoing powers, any such
Receiver may, to the exclusion of all others, including the Grantor, enter upon,
use and occupy all premises owned or occupied by the 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 Grantor's business or as security for loans or advances to
enable the Receiver to carry on the Grantor's business or otherwise, as such
Receiver shall, in its reasonable discretion, determine. Except as may be
otherwise directed by the Canadian Collateral 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 Canadian Collateral Agent and any
surplus shall be applied in accordance with applicable law. Every such Receiver
may, in the discretion of the Canadian Collateral Agent, be vested with, in
addition to the rights set out herein, all or any of the rights and powers of
the Canadian Administrative Agent, the Canadian Collateral Agent described in
the Credit Agreement, the PPSA, and any other applicable laws.
5.7 Registration Rights.
(a) If the Canadian Collateral Agent shall determine to exercise its
right to sell any or all of the Pledged Stock pursuant to subsection 5.6, and if
in the reasonable opinion of the Canadian Collateral Agent it is necessary or
reasonably advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of applicable securities legislation, the
Grantor will use its reasonable best efforts to cause the Issuer thereof to (i)
execute and deliver, and use its best efforts to cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
reasonable opinion of the Canadian Collateral Agent necessary or advisable to
register such Pledged Stock, or that portion thereof to be sold, under the
provisions of the applicable securities legislation, (ii) use its reasonable
best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of not more than one year from
the date of the first public offering of such Pledged Stock, or that portion
thereof to be sold, and (iii) make all amendments thereto and/or to the related
prospectus which, in the reasonable opinion of the Canadian Collateral Agent are
necessary or advisable, all in conformity with the requirements of applicable
securities legislation and the rules and regulations of any applicable
securities commission or regulation applicable thereto. The Grantor agrees to
use its reasonable best efforts to cause such Issuer to comply with the
provisions of the securities laws of any and all provinces and territories that
the Canadian Collateral Agent shall reasonably designate and to make available
to its security holders, as soon as practicable, any statements (which need not
be audited) that will satisfy the provisions of applicable securities
legislation.
(b) The Grantor recognizes that the Canadian Collateral Agent may be
unable to effect a public sale of any or all such Pledged Stock, by reason of
certain prohibitions contained in applicable securities legislation or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Grantor acknowledges and
agrees that any such private sale may result in prices and other terms less
favourable than if such sale were a public sale and,
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notwithstanding such circumstances, to the extent permitted by applicable law,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Canadian Collateral Agent shall not be under
any obligation to delay a sale of any of the Pledged Stock for the period of
time necessary to permit the Issuer thereof to register such securities for
public sale under applicable securities legislation, even if such Issuer would
agree to do so.
(c) The Grantor agrees to use its reasonable best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of such Pledged Stock pursuant to this subsection
5.7 valid and binding and in compliance with any and all other applicable
Requirements of Law. The Grantor further agrees that a breach of any of the
covenants contained in this subsection 5.7 will cause irreparable injury to the
Canadian Collateral Agent and the Lenders, that the Canadian Collateral Agent
and the Lenders have no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this subsection 5.7
shall be specifically enforceable against the Grantor, and to the extent
permitted by applicable law, the Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred or is continuing under the
Credit Agreement.
5.8 Waiver; Deficiency.
The Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay in full,
the Loans, Reimbursement Obligations constituting Obligations of the Grantor
and, to the extent then due and owing, all other Obligations of the Grantor and
the reasonable fees and disbursements of any legal counsel employed by the
Canadian Collateral Agent or any other Secured Party to collect such deficiency.
SECTION 6 THE CANADIAN COLLATERAL AGENT
6.1 Canadian Collateral Agent's Appointment as Attorney-in-Fact, etc.
(a) The Grantor hereby irrevocably constitutes and appoints the
Canadian Collateral Agent or any authorized officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Grantor and in the
name of the Grantor or in its own name, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments that may be reasonably necessary or
desirable to accomplish the purposes of this Agreement to the extent permitted
by applicable law, provided that the Canadian Collateral Agent agree not to
exercise such power except upon the occurrence and during the continuance of any
Event of Default. Without limiting the generality of the foregoing, at any time
when an Event of Default has occurred and is continuing (in each case to the
extent permitted by applicable law), (x) the Grantor hereby gives the Canadian
Collateral Agent the power and right, on behalf of the Grantor, without notice
or assent by the Grantor, to execute, in connection with any sale provided for
in subsection 5.6 or 5.7, any endorsements, assessments or other instruments of
conveyance or transfer with respect to the Grantor's Pledged Collateral, and (y)
the Grantor hereby gives the Canadian Collateral Agent the power and right, on
behalf of the Grantor, without notice to or assent by the Grantor, to do any or
all of the following:
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(i) in the name of the Grantor or its own name, or otherwise, take
possession of and endorse and collect any cheques, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Account Receivable of the Grantor that constitutes Collateral or with
respect to any other Collateral of the Grantor and file any claim or take
any other action or institute any proceeding in any court of law or equity
or otherwise deemed appropriate by the Canadian Collateral Agent for the
purpose of collecting any and all such moneys due under any Account
Receivable of the Grantor that constitutes Collateral or with respect to
any other Collateral of the Grantor whenever payable;
(ii) in the case of any Copyright, Patent, Trade-▇▇▇▇, or Industrial
Design constituting Collateral of the Grantor, execute and deliver any and
all agreements, instruments, documents and papers as the Canadian
Collateral Agent may reasonably request to the Grantor to evidence the
Canadian Collateral Agent's and the Lenders' security interest in such
Copyright, Patent, Trade-▇▇▇▇ or Industrial Design and the goodwill and
intangibles of the Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens, other than Liens permitted
under this Agreement or the other Loan Documents, levied or placed on the
Collateral of the Grantor, effect any repairs or any insurance called for
by the terms of this Agreement and pay all or any part of the premiums
therefor and the costs thereof; and
(iv) (A) direct any party liable for any payment under any of the
Collateral of the Grantor to make payment of any and all moneys due or to
become due thereunder directly to the Canadian Collateral Agent or as the
Canadian Collateral Agent shall direct; (B) ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of
any Collateral of the Grantor; (C) sign and endorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral of the Grantor; (D) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral of the Grantor or
any portion thereof and to enforce any other right in respect of any
Collateral of the Grantor; (E) defend any suit, action or proceeding
brought against the Grantor with respect to any Collateral of the Grantor;
(F) settle, compromise or adjust any such suit, action or proceeding
described in clause (E) above and, in connection therewith, to give such
discharges or releases as the Canadian Collateral Agent may deem
appropriate; (G) subject to any existing reserved rights or licenses,
license or sublicense, any Copyright, Patent, Trade-▇▇▇▇ or Industrial
Design constituting Collateral of the Grantor (along with the goodwill of
the business to which any such Copyright, Patent, Trade-▇▇▇▇ or Industrial
Design pertains), for such term or terms, on such conditions, and in such
manner, as the Canadian Administrative Agent shall in its sole discretion
determine; and (H) generally, sell, transfer, pledge and make any agreement
with respect to or otherwise deal with any of the Collateral of the Grantor
as fully and completely as though the Canadian Collateral Agent were the
absolute owner thereof for all purposes, and do, at the Canadian Collateral
Agent's option and the Grantor's expense, at any time, or from
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time to time, all acts and things which the Canadian Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral of the
Grantor and the Canadian Collateral Agent's and the other Secured Parties'
security interests therein and to effect the intent of this Agreement, all
as fully and effectively as the Grantor might do.
(b) The reasonable expenses of the Canadian Collateral Agent incurred
in connection with actions undertaken as provided in this subsection 6.1,
together with interest thereon at a rate per annum equal to the rate per annum
at which interest would then be payable on past due Loans that are RCF Loans
under the Credit Agreement, from the date of payment by the Canadian Collateral
Agent to the date reimbursed by the Grantor, shall be payable by the Grantor to
the Canadian Collateral Agent on demand.
(c) The Grantor hereby ratifies all that said attorney shall lawfully
do or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable as
to the Grantor until this Agreement is terminated, and the security interests in
the Collateral of the Grantor created hereby are released.
6.2 Duty of Canadian Collateral Agent.
The Canadian Collateral Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, shall
be to deal with it in the same manner as the Canadian Collateral Agent deals
with similar property for its own account. None of the Canadian Collateral Agent
or any other Secured Party nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Grantor or any other Person or, except as otherwise provided herein, to take
any other action whatsoever with regard to the Collateral or any part thereof.
The powers conferred on the Canadian Collateral Agent and the other Secured
Parties hereunder are solely to protect the Canadian Collateral Agent's and the
other Secured Parties' interests in the Collateral and shall not impose any duty
upon the Canadian Collateral Agent or any other Secured Party to exercise any
such powers. The Canadian Collateral Agent and the other Secured Parties shall
be accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to the Grantor for any act or failure
to act hereunder, except as otherwise provided herein or for their own gross
negligence or wilful misconduct.
6.3 Financing Statements.
Pursuant to any applicable law, the Grantor authorizes the Canadian
Collateral Agent to file or record financing statements, financing change
statements and other filing or recording documents or instruments with respect
to the Grantor's Collateral without the signature of the Grantor in such form
and in such offices as the Canadian Collateral Agent reasonably determine
appropriate to perfect the security interests of the Canadian Collateral Agent
under this Agreement. The Grantor authorizes the Canadian Collateral Agent to
use any collateral description determined by the Canadian Collateral Agent,
including, without limitation, the
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collateral description "all personal property" or "all assets" in any such
financing statements or financing change statements.
6.4 Authority of Canadian Collateral Agent.
The Grantor acknowledges that the rights and responsibilities of the
Canadian Collateral Agent under this Agreement with respect to any action taken
by the Canadian Collateral Agent or the exercise or non-exercise by the Canadian
Collateral Agent of any option, voting right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Agreement or
any amendment, supplement or other modification of this Agreement shall, as
between the Canadian Collateral Agent and the Secured Parties, be governed by
the Credit Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Canadian Collateral
Agent and the Grantor, the Canadian Collateral Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and the Grantor shall not be under
any obligation, or entitlement, to make any inquiry respecting such authority.
6.5 Right of Inspection.
Upon reasonable written advance notice to the Grantor and as often as
may reasonably be desired, or at any time and from time to time after the
occurrence and during the continuation of an Event of Default, the Canadian
Collateral Agent shall have reasonable access during normal business hours to
all the books, correspondence and records of the Grantor, and the Canadian
Collateral Agent and their respective representatives may examine the same, and
to the extent reasonable take extracts therefrom and make photocopies thereof,
and the Grantor agrees to render to the Canadian Collateral Agent at the
Grantor's reasonable cost and expense, such clerical and other assistance as may
be reasonably requested with regard thereto. The Canadian Collateral Agent and
their respective representatives shall also have the right, upon reasonable
advance written notice to the Grantor subject to any lease restrictions, to
enter during normal business hours into and upon any premises owned, leased or
operated by the Grantor where any of the Grantor's Inventory or Equipment is
located for the purpose of inspecting the same, observing its use or otherwise
protecting its interests therein.
SECTION 7 NON-LENDER SECURED PARTIES
7.1 Rights to Collateral.
(a) The Non-Lender Secured Parties shall not have any right whatsoever
to do any of the following: (i) exercise any rights or remedies with respect to
the Collateral (such term, as used in this Section 7, having the meaning
assigned to it in the Credit Agreement), including, without limitation, the
right to (A) enforce any Liens or sell or otherwise foreclose on any portion of
the Collateral, (B) request any action, institute any proceedings, exercise any
voting rights, give any instructions, make any election, notify account debtors
or make collections with respect to all or any portion of the Collateral or (C)
release the Grantor under this Agreement or release any Collateral from the
Liens of any Security Document or consent to or otherwise approve any such
release; (ii) demand, accept or obtain any Lien on any Collateral (except for
Liens arising under, and subject to the terms of, this Agreement); (iii) vote in
any
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Bankruptcy Case or similar proceeding in respect of Holdings or any of its
Subsidiaries (any such proceeding, for purposes of this clause (a), a
"Bankruptcy") with respect to, or take any other actions concerning the
Collateral; (iv) receive any proceeds from any sale, transfer or other
disposition of any of the Collateral (except in accordance with this Agreement);
(v) oppose any sale, transfer or other disposition of the Collateral; (vi)
object to any debtor-in-possession financing in any Bankruptcy Case which is
provided by one or more Lenders among others; (vii) object to the use of cash
collateral in respect of the Collateral in any Bankruptcy; or (viii) seek, or
object to the Lenders seeking on an equal and rateable basis, any adequate
protection or relief from the automatic stay with respect to the Collateral in
any Bankruptcy.
(b) Each Non-Lender Secured Party, by its acceptance of the benefits
of this Agreement and the other Security Documents, agrees that in exercising
rights and remedies with respect to the Collateral, the Canadian Collateral
Agent and the Lenders, with the consent of the Canadian Collateral Agent, may
enforce the provisions of the Security Documents and exercise remedies
thereunder and under any other Loan Documents (or refrain from enforcing rights
and exercising remedies), all in such order and in such manner as they may
determine in the exercise of their sole business judgment. Such exercise and
enforcement shall include, without limitation, the rights to collect, sell,
dispose of or otherwise realize upon all or any part of the Collateral, to incur
expenses in connection with such collection, sale, disposition or other
realization and to exercise all the rights and remedies of a secured lender
under the PPSA of any applicable jurisdiction. The Non-Lender Secured Parties
hereby agree by their acceptance of the benefits of this Agreement and the other
Security Documents not to contest or otherwise challenge any such collection,
sale, disposition or other realization of or upon all or any of the Collateral.
Whether or not a Bankruptcy Case has been commenced, the Non-Lender Secured
Parties shall be deemed to have consented to any sale or other disposition of
any property, business or assets of Holdings or any of its Subsidiaries and the
release of any or all of the Collateral from the Liens of any Security Document
in connection therewith.
(c) Notwithstanding any provision of this subsection 7.1, the
Non-Lender Secured Parties shall be entitled to file any necessary responsive or
defensive pleadings in opposition to any motion, claim, adversary proceeding or
other pleadings (A) in order to prevent any Person from seeking to foreclose on
the Collateral or supersede the Non-Lender Secured Parties' claim thereto or (B)
in opposition to any motion, claim, adversary proceeding or other pleading made
by any Person objecting to or otherwise seeking the disallowance of the claims
of the Non-Lender Secured Parties.
(d) Each Non-Lender Secured Party, by its acceptance of the benefit of
this Agreement, agrees that the Canadian Collateral Agent and the Lenders may
deal with the Collateral, including any exchange, taking or release of
Collateral, may change or increase the amount of the Obligations, and may
release the Grantor from its Obligations hereunder, all without any liability or
obligation (except as may be otherwise expressly provided herein) to the
Non-Lender Secured Parties.
7.2 Appointment of Agent.
Each Non-Lender Secured Party, by its acceptance of the benefits of
this Agreement and the other Security Documents, shall be deemed irrevocably to
make, constitute
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and appoint the Canadian Collateral Agent as agent under the Credit Agreement
(and all officers, employees or agents designated by the Canadian Collateral
Agent) as such Person's true and lawful agent and attorney-in-fact, and in such
capacity, the Canadian Collateral Agent shall have the right, with power of
substitution for the Non-Lender Secured Parties and in each such Person's name
or otherwise, to effectuate any sale, transfer or other disposition of the
Collateral. It is understood and agreed that the appointment of the Canadian
Collateral Agent as the agent and attorney-in-fact of the Non-Lender Secured
Parties for the purposes set forth herein is coupled with an interest and is
irrevocable. It is understood and agreed that the Canadian Collateral Agent has
appointed the Canadian Administrative Agent as its agent for purposes of
perfecting certain of the security interests created hereunder and for otherwise
carrying out certain of its obligations hereunder.
7.3 Waiver of Claims.
To the maximum extent permitted by law, each Non-Lender Secured Party
waives any claim it might have against the Canadian Collateral Agent or the
Lenders with respect to, or arising out of, any action or failure to act or any
error of judgment, negligence, or mistake or oversight whatsoever on the part of
the Canadian Collateral Agent or the Lenders or their respective directors,
officers, employees or agents with respect to any exercise of rights or remedies
under the Loan Documents or any transaction relating to the Collateral
(including, without limitation, any such exercise described in subsection 7.1(b)
above), except for any such action or failure to act which constitutes wilful
misconduct or gross negligence of such Person. None of the Canadian Collateral
Agent or any Lender or any of their respective directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of Holdings, any
Subsidiary of Holdings, any Non-Lender Secured Party or any other Person or to
take any other action or forbear from doing so whatsoever with regard to the
Collateral or any part thereof, except for any such action or failure to act
which constitutes wilful misconduct or gross negligence of such Person.
SECTION 8 MISCELLANEOUS
8.1 Amendments in Writing.
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 Grantor and the Canadian Collateral Agent, provided that (a) any
provision of this Agreement imposing obligations on the Grantor may be waived by
the Canadian Collateral Agent in a written instrument executed by the Canadian
Collateral Agent and (b) notwithstanding anything to the contrary in subsection
11.1 of the Credit Agreement, no such waiver and no such amendment or
modification shall amend, modify or waive the definition of "Secured Party" or
subsection 5.5 if such waiver, amendment, or modification would adversely affect
a Secured Party without the written consent of each such affected Secured Party.
8.2 Notices.
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All notices, requests and demands to or upon the Canadian Collateral
Agent or the Grantor hereunder shall be effected in the manner provided for in
subsection 11.2 of the Credit Agreement; provided that any such notice, request
or demand to or upon the Grantor shall be addressed to the Grantor at its notice
address set forth on Schedule 1, unless and until the Grantor shall change such
address by notice to the Canadian Collateral Agent and the Canadian
Administrative Agent given in accordance with subsection 11.2 of the Credit
Agreement.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
None of the Canadian Collateral Agent or any other Secured Party shall
by any act (except by a written instrument pursuant to subsection 8.1), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No failure
to exercise, nor any delay in exercising, on the part of the Canadian Collateral
Agent or any other Secured Party, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Canadian
Collateral Agent or any other Secured Party of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Canadian Collateral Agent or such other Secured Party would otherwise have
on any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
8.4 Further Assurances.
The Grantor will do all acts and things and execute and deliver, or
cause to be executed and delivered, all agreements, documents and instruments
that the Collateral Agent may require, including as a result of the coming into
force of proposed legislation currently known as the Securities Transfer Act
(Ontario) (and similar legislation in the Provinces of Alberta and British
Columbia and other applicable jurisdictions), and take all further steps
relating to the Collateral or any other property or assets of the Grantor that
the Collateral Agent may require for (i) protecting the Collateral, (ii)
perfecting the security interest, and (iii) exercising all powers, authorities
and discretions conferred upon the Canadian Collateral Agent. After the security
interest becomes enforceable, the Grantor will do all acts and things and
execute and deliver all documents and instruments that the Collateral Agent may
require for facilitating the sale or other disposition of the Collateral in
connection with its realization.
8.5 Enforcement Expenses.
(a) The Grantor agrees to pay, and to save the Canadian Collateral
Agent, the Canadian Administrative Agent and the other Secured Parties harmless
from, (x) any and all liabilities, costs, losses and expenses of whatever kind
with respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other similar taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement and (y) any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and
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administration of this Agreement (collectively, the "indemnified liabilities"),
in each case to the extent the Parent Borrower would be required to do so
pursuant to subsection 11.5 of the Credit Agreement, and in any event excluding
any taxes or other indemnified liabilities arising from gross negligence or
wilful misconduct of the Canadian Collateral Agent or any other Secured Party.
(b) The agreements in this subsection 8.5 shall survive repayment of
the Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.6 Successors and Assigns.
This Agreement shall be binding upon and shall enure to the benefit of
the Grantor, the Canadian Collateral Agent and the Secured Parties and their
respective successors and assigns; provided that the Grantor may not assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Canadian Collateral Agent.
8.7 Counterparts.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
8.8 Severability.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction; provided that, with respect to any Pledged Stock issued by a
Subsidiary, all rights, powers and remedies provided in this Agreement may be
exercised only to the extent that they do not violate any provision of any law,
rule or regulation of any Governmental Authority applicable to any such Pledged
Stock or affecting the legality, validity or enforceability of any of the
provisions of this Agreement against the Grantor (such laws, rules or
regulations, "Applicable Law") and are intended to be limited to the extent
necessary so that they will not render this Agreement invalid, unenforceable or
not entitled to be recorded, registered or filed under the provisions of any
Applicable Law.
8.9 Section Headings.
The Section headings used in this Agreement are for convenience of
reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
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8.10 Integration.
This Agreement and the other Loan Documents represent the entire
agreement of the Grantor, the Canadian Collateral Agent and the other Secured
Parties with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Grantor, the Canadian
Collateral Agent or any other Secured Party relative to subject matter hereof
not expressly set forth or referred to herein or in the other Loan Documents.
8.11 Governing Law.
This agreement and the rights and obligations of the parties under
this agreement shall be governed by, and construed and interpreted in accordance
with, the law of the Province of Ontario and the federal laws of Canada
applicable therein.
8.12 Submission To Jurisdiction; Waivers.
Each party hereto hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the Province
of Ontario;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such party at its
address referred to in subsection 8.2 or at such other address of which the
Canadian Collateral Agent and the Canadian Administrative Agent (in the case of
any other party hereto) or the Parent Borrower (in the case of the Canadian
Collateral Agent and the Canadian Administrative Agent) shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any consequential or punitive damages.
8.13 Waiver Of Jury Trial.
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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8.14 Releases.
(a) At such time as the Loans (including the face amount of all
outstanding Bankers' Acceptance Loans), the Reimbursement Obligations and the
other Obligations (other than any Obligations owing to a Non-Lender Secured
Party in respect of the provision of cash management services) then due and
owing, in each case, shall have been paid in full, the Commitments have been
terminated and no Letters of Credit shall be outstanding, all Collateral shall
be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Canadian Collateral Agent and the Grantor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and
all rights to the Collateral shall revert to the Grantor. At the request and
sole expense of the Grantor following any such termination, the Canadian
Collateral Agent shall deliver to the Grantor any Collateral held by the
Canadian Collateral Agent hereunder, and execute and deliver to the Grantor such
documents (including without limitation, PPSA financing change statements and
discharges) as the Grantor shall reasonably request to evidence such
termination.
(b) In connection with any sale or other disposition of Collateral
permitted by the Credit Agreement (other than any sale or disposition to another
Grantor), the Lien pursuant to this Agreement on such sold or disposed of
Collateral shall be automatically released. In connection with the sale or other
disposition of all of the Capital Stock of the Grantor (other than to Holdings,
the Parent Borrower or a Subsidiary of either) or the sale or other disposition
of Collateral (other than a sale or disposition to another Grantor) permitted
under the Credit Agreement, the Canadian Collateral Agent shall, upon receipt
from the Parent Borrower of a written request for the release of the Grantor
from its Guarantee, if applicable, or the release of the Collateral subject to
such sale or other disposition, identifying the Grantor or the relevant
Collateral and the terms of the sale or other disposition in reasonable detail,
including the price thereof and any expenses in connection therewith, together
with a certification by the Parent Borrower stating that such transaction is in
compliance with the Credit Agreement and the other Loan Documents, execute and
deliver to the Grantor (at the sole cost and expense of the Grantor and without
representation or warranty of any kind) all releases or other documents
(including without limitation, PPSA financing change statements or discharges)
necessary or reasonably desirable for the release of such Guarantee or the Liens
created hereby on such Collateral, as applicable, as the Grantor may reasonably
request.
8.15 Judgment Currency.
(a) The obligations of the Grantor hereunder and under the other Loan
Documents to make payments in Dollars or in Canadian Dollars, as the case may be
(for the purposes of this Section 8.15, the "Obligation Currency"), shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by the Canadian Collateral Agent or a Lender of the full amount of the
Obligation Currency expressed to be payable to the Canadian Collateral Agent or
a Lender under this Agreement or the other Loan Documents. If, for the purpose
of obtaining or enforcing judgment against the Grantor or any other Loan Party
in any court or in any jurisdiction, it
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becomes necessary to convert into or from any currency other than the Obligation
Currency (for the purposes of this Section 8.15, such other currency being
hereinafter referred to as the "Judgment Currency") an amount due in the
Obligation Currency, the conversion shall be made, at the rate of exchange
prevailing, in each case, as of the date immediately preceding the day on which
the judgment is given (for the purposes of this Section 8.15, such Business Day
being hereinafter referred to as the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the Grantor covenants and agrees to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the prevailing rate of exchange, such
amounts shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
8.16 Attachment of Security Interest.
The security interest created hereby is intended to attach, in respect
of Collateral in which the Grantor has rights at the time this Agreement is
signed by the Grantor and delivered to the Canadian Collateral Agent and, in
respect of Collateral in which the Grantor subsequently acquires rights, at the
time the Grantor subsequently acquires such rights. The Grantor acknowledges and
confirms that the Canadian Collateral Agent and the Lenders have given value to
the Grantors.
8.17 Copy of Agreement; Verification Statement.
The Grantor hereby acknowledges receipt of a signed copy of this
Agreement and hereby waives 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.
8.18 Amalgamation.
The Grantor acknowledges and agrees that, in the event it amalgamates
with any other company or companies, it is the intention of the parties hereto
that the term "Grantor" when used herein, shall apply to each of the
amalgamating corporations and to the amalgamated corporation, such that the lien
granted hereby:
(a) shall extend to Collateral owned by each of the amalgamating
corporations and the amalgamated corporations at the time of amalgamation and to
any Collateral thereafter owned or acquired by the amalgamated corporation, and
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(b) shall secure all Obligations of each of the amalgamating
corporations and the amalgamated corporations to the Canadian Collateral Agent
and the Secured Parties at the time of amalgamation and all Obligations of the
amalgamated corporation to the Canadian Collateral Agent and the Secured Parties
thereafter arising. The Lien shall attach to all Collateral owned by each
corporation amalgamating with the Grantor, and by the amalgamated corporation,
at the time of the amalgamation, and shall attach to all Collateral thereafter
owned or acquired by the amalgamated corporation when such becomes owned or is
acquired.
8.19 Language.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 signataires conferment leur volonte que la
presente convention, de meme que tous les documents s'y rattachant, y compris
tout avis, annexe et autorisation, soient rediges en anglais seulement.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY; SIGNATURE PAGE TO FOLLOW.]
-41-
IN WITNESS WHEREOF, the undersigned has caused this Security Agreement to be
duly executed and delivered as of the date first above written.
RENTAL SERVICE CORPORATION OF CANADA
LTD.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Title: President, Vice Chairman and
Chief Operating Officer
---------------------------------
-42-
Acknowledged and Agreed to as
of the date hereof by:
DEUTSCHE BANK AG, CANADA BRANCH,
as Canadian Collateral Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Title: Assistant Vice President
------------------------------
-43-
SCHEDULE 1
NOTICE ADDRESSES OF GRANTOR
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ #▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
With a copy to each of:
RENTAL SERVICE CORPORATION
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President and Treasurer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Ripplewood Holdings, L.L.C.
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Oak Hill Capital Management, LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Debevoise & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 2
PLEDGED SECURITIES
Pledged Stock:
Nil.
Pledged Notes:
Nil.
SCHEDULE 3
PERFECTION MATTERS
Existing Security Interests
Rental Service Corporation of Canada Ltd.:
FILE NO. AND
REGISTRATION NO./
JURISDICTION SECURED PARTY DATE OF REGISTRATION COLLATERAL DESCRIPTION
------------ ------------------------ ---------------------- --------------------------------------
Saskatchewan Dynaventure Corp. Registration Date: 30 1-ISDN BRI Line Cartridge (NT7B87GA93)
Apr. 2004 1 - ISDN Clockcartridge (NNTM8456DL9M)
1-MICS 6.1 Software Upgrade 1-Call
Registration #: Pilot 100 Voice Mail System (NTAB9916)
120723394
Saskatchewan Telecom Leasing Canada Registration Date: 07 Telecommunications Equipment Lease
(TLC) Limited Dec. 2000 #8000203 Proceeds: Goods, Securities,
Instruments, Documents of Title,
Registration #: Chattel Paper, Intangibles and Money
115841226
Alberta Ikon Office Solutions, Registration #: MRU05068 IR201OF Canon Digital Copier
Inc. 04060935246
Registration Date: 09
June 2004
Alberta Ikon Office Solutions, Registration #: MRU05067 IR201OF Canon Digital Copier
Inc. 04060935261
Registration Date: 09
June 2004
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Financial Registration Number: Commission - Residualized,
Services Canada (CAD) 06071810532 Telecom
Registration Date: 18
July 2006
Alberta IOS Financial Services Registration #: All goods which are photocopiers,
06101900998 photocopying machines and duplication
devices, together with all
Registration Date: 19 replacements and substitutions thereof
Oct. 2006 and all parts, accessories, accessions
and attachments thereto and all
proceeds which are accounts, goods,
FILE NO. AND
REGISTRATION NO./
JURISDICTION SECURED PARTY DATE OF REGISTRATION COLLATERAL DESCRIPTION
------------ ------------------------ ---------------------- --------------------------------------
chattel paper, securities, documents
of title, instruments, money,
intangibles, crops or insurance
proceeds (Reference Lease No.
4312113015).
Alberta Bobcat of Edmonton Registration # Bobcat 863 2003 (Motor Vehicle
06112315764 515452274) for $25,132.39.
Registration Date:
November 23, 2006
Alberta Bobcat of Edmonton Registration # Bobcat S220 (Motor Vehicle 530712436)
06112315228 for $2,612.59.
Registration Date:
November 23, 2006
PPSA Filings
GRANTOR PROVINCE REGISTRATION NO. DATE OF REGISTRATION
----------------------------------------- ---------------- ------------------- --------------------
Rental Service Corporation of Canada Ltd. British Columbia Base Reg. #: November 23, 2006
366806D
Control #: B7699936
Rental Service Corporation of Canada Ltd. Alberta Registration #: November 23, 2006
06112323065
Rental Service Corporation of Canada Ltd. Saskatchewan Registration #: November 23, 2006
300107772
Rental Service Corporation of Canada Ltd. Ontario REGISTRATION NO. November 23, 2006
20061123 1450 1590
5778
FILE NO. 630840933
Intellectual Property Filings
SCHEDULE 4
LOCATIONS
Location of
Granting Party Organization Chief Executive Office
-------------- ------------ ----------------------
Rental Service Corporation of Alberta 244, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Locations of Collateral
ADDRESS CITY STATE ZIP CODE
------------------------- ------------- ----- --------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇-▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇-▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇-▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
244, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇-▇▇▇
▇▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇-▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇-▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇-▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇
SCHEDULE 5
INTELLECTUAL PROPERTY
TRADEMARK APP. NO. APP. DATE REG. NO. REG. DATE STATUS
------------------------------- -------- ----------- --------- ----------------- -----------------------------
BRAND ON COMMAND 1300003 May 2, 2006 Pending-Formalized on May 03,
2006
RENTALEX 0412451 7/7/1977 TMA230212 September 8, 1978 Registered-Change of Title on
4/17/2001
RENTEX 0638662 8/29/1989 TMA395438 March 13, 1992 Registered-Change of Title on
4/17/2001
RSC 1283822 12/20/2005 Formalized 12/21/05
RSC AND DESIGN 11043072 1/18/2000 TMA549606 8/9/2001 Renewal Due 8/9/16
RSC AND DESIGN 11043071 1/18/2000 TMA559835 4/3/2002 Renewal Due 4/3/17
RSC EQUIPMENT RENTAL 1238456 11/24/2004 Allowed 12/21/05
RSC RENTAL SERVICE 104306 1/18/2000 TMA558532 2/26/2002 Renewal Due 2/26/17
RSC RENTAL SERVICE CORPOR-ATION 1043069 1/18/2000 TMA560422 4/19/2002 Renewal Due 4/19/17
RSC'S BRAND ON COMMAND 1300011 May 2, 2006 Pending-Formalized on May 03,
2006
SCHEDULE 6
CONTRACTS
Nil.
ANNEX 1
to
Canadian Security Agreement
FORM OF CONFIRMATION OF SECURITY INTEREST
IN INTELLECTUAL PROPERTY
WHEREAS:
Rental Service Corporation of Canada Ltd. (the "DEBTOR"), a corporation
incorporated and existing under the laws of Alberta with offices at [ADDRESS],
is the owner of the [TRADE-MARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS] set
forth in Exhibit A hereto, the registrations and applications for the
[TRADE-MARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS] identified therein and the
underlying goodwill associated with such
[TRADE-MARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS] (collectively, the
"[TRADE-MARKS/ PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS]"); and
Deutsche Bank AG, Canada Branch, as agent for certain lenders (the "CANADIAN
COLLATERAL AGENT"), with offices at [ADDRESS], has entered into an agreement
with the Debtor, as reflected by a separate document entitled the "SECURITY
AGREEMENT" dated as of the [__] day of November, 2006 by which the Debtor
granted to the Canadian Collateral Agent, a security interest in certain
property, including the [TRADE-MARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS], in
consideration of the provision of certain credit facilities to certain companies
which are the wholly-owned subsidiaries of the Debtor;
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are acknowledged and in accordance with the terms and obligations set
forth in the Security Agreement, the Debtor confirms the grant to the Canadian
Collateral Agent of a security interest in and to the
[TRADE-MARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS].
DATED on this [__________] day of [__], [____].
RENTAL SERVICE CORPORATION OF CANADA
LTD.
Per:
-----------------------------------
Authorized Signing Officer
DATED on this [__________] day of [__], [____], before me appeared and the
person who signed this instrument, who acknowledged that [HE/SHE] signed it as a
free act on [HIS/HER] behalf or on behalf of the corporation identified and
referred to herein as the Debtor.
-------------------------------------
[SIGNATURE OF NOTARY PUBLIC/WITNESS]
EXHIBIT A
TRADE-MARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS
CANADIAN SECURITY AGREEMENT
