Possession and Care of Object of Pledge Art. 2104.

The creditor cannot use the thing pledged,

without the authority of the owner, and if he should do so,
or should misuse the thing in any other way, the owner may
ask that it be judicially or extrajudicially deposited. When the
Art. 2110. If the thing pledged is returned by the pledgee to preservation of the thing pledged requires its use, it must be
the pledgor or owner, the pledge is extinguished. Any used by the creditor but only for that purpose.
stipulation to the contrary shall be void.
Art. 2105. The debtor cannot ask for the return of the thing
If subsequent to the perfection of the pledge, the thing is in pledged against the will of the creditor, unless and until he
the possession of the pledgor or owner, there is a prima facie has paid the debt and its interest, with expenses in a proper
presumption that the same has been returned by the case
pledgee. This same presumption exists if the thing pledged is
in the possession of a third person who has received it from Art. 2107. If there are reasonable grounds to fear the
the pledgor or owner after the constitution of the pledge. destruction or impairment of the thing pledged, without the
fault of the pledgee, the pledgor may demand the return of
Art. 2098. The contract of pledge gives a right to the creditor the thing, upon offering another thing in pledge, provided
to retain the thing in his possession or in that of a third the latter is of the same kind as the former and not of inferior
person to whom it has been delivered, until the debt is paid. quality, and without prejudice to the right of the pledgee
under the provisions of the following article.
Art. 2109. If the creditor is deceived on the substance or
quality of the thing pledged, he may either claim another The pledgee is bound to advise the pledgor, without delay,
thing in its stead, or demand immediate payment of the of any danger to the thing pledged. (n)
principal obligation. (n)
Art. 2108. If, without the fault of the pledgee, there is danger
Art. 2100. The pledgee cannot deposit the thing pledged with of destruction, impairment, or diminution in value of the
a third person, unless there is a stipulation authorizing him thing pledged, he may cause the same to be sold at a public
to do so. sale. The proceeds of the auction shall be a security for the
principal obligation in the same manner as the thing
The pledgee is responsible for the acts of his agents or originally pledged. (n)
employees with respect to the thing pledged. (n)
Art. 2109. If the creditor is deceived on the substance or (3) Forces of nature which are brought under control by
quality of the thing pledged, he may either claim another science; and
thing in its stead, or demand immediate payment of the
principal obligation. (n) (4) In general, all things which can be transported from place
to place without impairment of the real property to which
Art. 2110. If the thing pledged is returned by the pledgee to they are fixed. (335a)
the pledgor or owner, the pledge is extinguished. Any
stipulation to the contrary shall be void. Art. 417. The following are also considered as personal
property:
If subsequent to the perfection of the pledge, the thing is in (1) Obligations and actions which have for their object
the possession of the pledgor or owner, there is a prima facie movables or demandable sums; and
presumption that the same has been returned by the
pledgee. This same presumption exists if the thing pledged is (2) Shares of stock of agricultural, commercial and industrial
in the possession of a third person who has received it from entities, although they may have real estate. (336a)
the pledgor or owner after the constitution of the pledge.
Art. 418. Movable property is either consumable or
nonconsumable. To the first class belong those movables
which cannot be used in a manner appropriate to their
nature without their being consumed; to the second class
CHAPTER 2 belong all the others. (337)
MOVABLE PROPERTY
Art. 2125. In addition to the requisites stated in Article 2085,
Art. 416. The following things are deemed to be personal it is indispensable, in order that a mortgage may be validly
property: constituted, that the document in which it appears be
(1) Those movables susceptible of appropriation which are recorded in the Registry of Property. If the instrument is not
not included in the preceding article; recorded, the mortgage is nevertheless binding between the
parties.
(2) Real property which by any special provision of law is
considered as personal property; The persons in whose favor the law establishes a mortgage
have no other right than to demand the execution and the
recording of the document in which the mortgage is
formalized.

Art. 2126. The mortgage directly and immediately subjects

the property upon which it is imposed, whoever the
possessor may be, to the fulfillment of the obligation for
whose security it was constituted. (1876)

PPSA
Art. 2140. By a chattel mortgage, personal property is
recorded in the Chattel Mortgage Register as a security for
the performance of an obligation. If the movable, instead of
being recorded, is delivered to the creditor or a third person,
the contract is a pledge and not a chattel mortgage.
Personal Property Security Agreement b. Limited to amount
A. Introduction and General Concepts Civil Code Art. 2140 c. If balance is less – limited to lowest
amount of commingled funds…
Republic Act No. 11057,
Sec. 2. – declaration of policy; promote econ activity; Sec. 3 (f) - defn: proceeds – from collateral
access to least cost credit Civil Code, Art. 2126
Sec. 66, - repeal sec 1-15 of CM law; NCC prov; others
Sec. 60-62, Congressional oversight; Interpretation; 1. Creation
IRR R.A. No. 11057, Sec. 5 – Creation of a security interest: a. by
Sec. 67, - effectivity security agreement, b. in future properties
Sec. 68, - implementation conditioned on
establishment of registry a. Object
Sec. 65. – separability clause Sec. 4 – scope: movable collateral
Sec. 5 – includes future prop

Civil Code,
B. Scope of the PPSA Art. 416, Art. 417 – immovable prop
Sec. 4. – scope; obligation; security using movable
collateral; exceptions; CASES:
Makati Leasing & Finance Corporation v. Wearever
C. Security Interest Textile Mills, Inc. & Court of Appeals, G.R. No. L-58469,
Sec. 3. (j) - defn: security interest May 16, 1983, 122 SCRA 296.
Sec. 3 (c)- defn: grantor – 4 instances
Sec. 3 (i) - defn: secured creditor Manila Banking Corporation v. Teodoro, Jr. and
Sec. 9 – continuity of security interest – except: Teodoro, G.R. No. 53955, January 13, 1989, 169 SCRA
sec21(transfree in GF) or agreement 95.
Sec. 8 – right to proceeds; commigled funds
1. Security interest extends to
traceable/identifiable proceeds Yau Chu v. Court of Appeals et al., G.R. No. L-78519,
2. Money commingled September 26, 1989, 177
a. Extend to funds SCRA 793.
b. Form
Sec. 6 – written contract signed by parties; maybe 1 or R.A. No. 11057, Sec. 13 – Perfection by control:
more writings; language -any a. deposit account/investment property – 3
instances
Sec. 3 (k) – denf – “writing” includes electronic records Sec. 3. (b) – control agreement
Sec. 7 – Description of collateral – reasonably
identifies
a. Disposition of Perfected Security Interest
Sec. 9 – continuity of SI
c. Asset-Specific Rules - Accounts Receivable Sec. 21 – GF transferee exception
Sec. 10 – Contractual Limitation on creation of a Sec. 14 – Perfection in Proceeds of a collateral;
security interest; right of a grantor to create security interest Different means -> a. in money; b. not in money
Sec. 3 (f) – defn: proceeds
d. Disclosure of Information by Secured Creditor
Sec. 37 – Disclosure of information; creditor to supply
information; creditor may require payment of fee for b. Assignment of Security Interest
information Sec. 16. – Assignment of Security Interest: an
amendment notice may be registered

2. Perfection
Sec. 11 – perfection of a security interest: refers to D. The Registry
sec12; perfection -> effective against 3rd persons Sec. 26 – Est. Electronic Registry- by LRA
Sec. 25 – Fixtures, accessions, commingled goods – Sec. 64 – Funds: from funds collected by LRA
security continues if it can be reasonably traced Sec. 38 – Fees
Sec. 12 – means of perfection – registration, Sec. 27 – Public Record: info in registered notice
possession of collateral or control of property Sec. 35 – Duties of Registry; admin in nature
Sec. 15 - Change in means of perfection – remains Sec. 28-31 – Notice; *read more
perfected Sec. 44 – civil and criminal penalties-malicious
Civil Code, Art. 2125. - recording registration/search
Sec. 36.
Sec. 32-34
Sec. 39- 43

E. Priority of Security Interest

Sec. 17-22
Sec. 3 (g), Sec. 23
PCI Leasing & Finance, Inc. v. Trojan Metal Industries Inc., et
al., G.R. No. 176381, December 15, 2010, 638 SCRA 615.
Sec. 24
Markets[show]
F. Enforcement of Security Interest Sec. 47, Sec. 63
Sec. 46, Sec. 48
Instruments[show]
Citibank, N.A. & Investors Finance Corporation v. Sabeniano,
G.R. No. 156132, October 12, 2006, 504 SCRA 378.
Sec. 49-51 Corporate[show]

Sec. 45
Paray & Espeleta v. Rodriguez, et al., G.R. No. 132287, Personal[show]

January 24, 2006, 479 SCRA 571.

Sec. 52-54 Public[show]
G. Transitional Provisions Sec. 55-59
Banking[show]

Regulation · Financial law[show]

Security interest Economic history[show]

From Wikipedia, the free encyclopedia
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 v
Finance
 t
 e

A security interest is a legal right granted by a debtor to a creditor over

the debtor's property (usually referred to as the collateral[1]) which enables
the creditor to have recourse to the property if the debtor defaults in Jump to navigationJump to search
making payment or otherwise performing the secured obligations.[2] One
The Personal Property Security Act ("PPSA") is the name given to
of the most common examples of a security interest is a mortgage: When
each of the statutes passed by all common law provinces, as well as the
person, by the action of an expressed conveyance, pledges by a promise
territories, of Canada. They regulate the creation and registration
to pay a certain sum of money, with certain conditions, on a said date or
of security interests in all personal property within their respective
dates for a said period, that action on the page with wet ink applied on
jurisdictions.
the part of the one wishing the exchange creates the original funds and
negotiable Instrument. That action of pledging conveys a promise binding It is similar in structure to Article 9 of the Uniform Commercial Code in the
upon the mortgagee which creates a face value upon the Instrument of United States, but there are important differences.[1]
the amount of currency being asked for in exchange. It is therein in good
faith offered to the Bank in exchange for local currency from the Bank to Contents
buy a house. The particular country's Bank Acts usually requires the
Banks to deliver such fund bearing negotiable instruments to the  1PPSA regime
Countries Main Bank such as is the case in Canada. This creates a o 1.1Personal property subject to the Act
security interest in the land the house sits on for the Bank and they file a o 1.2Creation of security interests
caveat at land titles on the house as evidence of that security interest. If o 1.3Purchase money security interests (PMSIs)
the mortgagee[clarification needed]fails to pay defaulting in his promise to repay o 1.4Creation of "super-priorities"
the exchange, the bank then applies to the court to for-close on your o 1.5The PPSA and land
property to eventually sell the house and apply the proceeds to the o 1.6Priorities of security interests
outstanding exchange.[3]
 2Regime under Québec legislation
Although most security interests are created by agreement between the  3Security interests created under Federal legislation
parties, it is also possible for a security interest to arise by operation of  4Conflicts between provincial PPSAs and federal legislation
law.[4] For example, in many jurisdictions a mechanic who repairs a car  5Resources by province
benefits from a lien over the car for the cost of repairs. This lien arises by
 6Notable cases
operation of law in the absence of any agreement between the parties.
 7Documents
Most security interests are granted by the person who owns the property  8References
to secure their own indebtedness. But it is also possible for a person to
grant security over their property as collateral for the debts of another
person (often called third party security).[5] So a parent might grant a PPSA regime[edit]
security interest over their home to support a business loan being made The legislation that implemented the PPSA scheme was first introduced
to their child. Similarly, most security interests operate to secure debts or in Ontario, followed by the remaining provinces and territories (which
other direct financial obligations. But sometimes a security is granted to followed a newer uniform model with notable differences). The Atlantic
secure a non-financial obligation. For example in construction provinces, together with the Northwest Territories and Nunavut, have fully
a performance bond may secure the satisfactory performance of non- computerized registries, while the others have varying degrees of
financial obligations. electronic and paper registration. The following is a brief outline of how
The different types of security interest which can arise and the rights the regime generally works.
which they confer will vary from country to country.[6] Personal property subject to the Act[edit]
Personal Property Security Act The scope of the Act is extremely broad, as it is concerned with every
transaction which in substance creates a security interest, without regard
(Canada) to its form and without regard to the person who has title to the collateral.
There are small differences between the provinces as to how far this
From Wikipedia, the free encyclopedia
extends, but the concept is basically the same. That said, however, there
are some items that are specifically excluded: Type of interest Collateral

 liens
 interests in annuities and insurance policies
Loan to purchase goods The goods
 interests in land (other than interests arising under a license),
including leases
 assignments for the general benefit of creditors
 interests in any compensation for labour or personal services Sale of goods The goods

Personal property is classified into the following categories:

Leases (terms > 1 year) The leased asset
 goods (further classified into consumer goods, equipment
and inventory)
 instruments
 documents of title Consignment of goods The goods
 chattel paper (including leases and conditional sales
contracts) Creation of "super-priorities"[edit]
 securities
 money In specified circumstances, PPSA registrants can obtain
 intangibles (licenses and any other matter not included "super-priority" status over other secured parties, when the
above) following steps are taken:

Creation of security interests[edit]

Collateral Steps to take
Security interests are created through attachment, which can be
followed on by perfection.
Attachment occurs when Inventory Perfection at the time of possession,
provided that notice has been given to
 value is given, other secured parties before registration
 the debtor has rights in the collateral, and (and possession by the debtor)
 it is enforceable against third parties.
Perfection can occur by possession of the collateral, or by
registration. In certain circumstances, possession can be Intangibles Perfection no later than the specified
considered to be the superior form of perfection. number of days after attachment
Purchase money security interests (PMSIs)[edit]
A PMSI is a special type of security interest taken in
Other than the Perfection no later than the specified
collateral by a party who gives value for the purpose of
enabling the debtor to acquire rights in the collateral. Some above number of days after possession by the
examples are: debtor
The PPSA and land[edit]
PPSA security interests can have priority over real property Competing interests First interest to attach
security interests against fixtures, when the secured party are both unperfected
registers notice against the land at the local registry or land
titles office. Where attachment occurs before the affixation to
the land, the interest will have priority, However, where One interest is Perfected interest
attachment occurs after affixation, the interest is subordinate perfected, and the
unless where the debtor otherwise consents. other is unperfected
Other intersections can also occur with interests in land. For
example, a lender that grants a mortgage over a rental
property will also register a PPSA security interest against
the rents being generated, in order to attorn the rents in the
Regime under Québec
event the mortgage goes into default. legislation[edit]
Priorities of security interests[edit] For moveable property in Québec, secured creditors create
their security interests by way of hypothec through
In the absence of any other special priority rules, the general
the Registre des droits personnels et réels
order of priority is as follows:
mobiliers(RDPRM).[2][3]

Event Priority given Security interests created under

Federal legislation[edit]
Competing interests First interest to register Federal legislation has also created certain security interests
are perfected by that may take precedence over provincial legislation.[4] They
registration notably include:

 Bank Act security for loans granted by banks

 interests in patents, copyrights and trademarks
Competing interests First interest to perfect
 interests in railway and rolling stock
are perfected other
 federal property
than by registration
 matters relating to Indians and Indian lands
 deemed trusts under taxation laws
 priorities of claims under bankruptcy and insolvency laws
One interest is Registered interest takes priority if
perfected by registered and perfected before the
registration, and the other is perfected. Interest perfected Conflicts between provincial
other interest other other than by registration takes PPSAs and federal
than by registration priority if it is perfected prior to the
registration of the other interest.
legislation[edit]
S. 89(1) of the Indian Act governs the application of
security interests on reserves:
 “ 89. (1) Subject to this Act, the real and
personal property of an Indian or a band
situated on a reserve is not subject to charge,
Ontario RSO 1990,
c. P.10
Service Ontario

pledge, mortgage, attachment, levy, seizure,

distress or execution in favour or at the
New Brunswick SNB 1993, ACOL (electronic
instance of any person other than an Indian or
a band.[5] ” c. P-7.1 service only)

Recent jurisprudence[6] has tended to restrict how this

provision should be applied.[7] Nova Scotia SNS 1995- ACOL (electronic
96, c. 13 service only)
There can also be complex interplay with security
interests under admiralty law.[8]

SPEI 1997, ACOL (electronic

Resources by province[edit] Prince Edward
Island c.33, also service only)
referred
PPSA Provincial registry or to as c. P-
Province 3.1
Citation agent

British Columbia RSBC BC Registry Services Newfoundland SNL 1998, ACOL (electronic
1996, c. and Labrador c. P-7.1 service only)
359

Yukon RSY 2002, ACOL (electronic

Alberta RSA 2000, Service Alberta c. 169 service only) as of
c. P-7 Registries June 27, 2016.
Online (registration
through agents only)
Northwest SNWT ACOL (electronic
Territories 1998, c.8 service only)
Saskatchewan SS 1993, c. Information Services
P-6.2 Corporation
Nunavut As NWT ACOL (electronic
service only)
Manitoba CCSM c. The Property Registry
P35 of Manitoba
Notable cases[edit] 3. as Grantor
4. - and -
 Bank of Montreal v. Innovation Credit Union 5. BANK OF AMERICA, N.A. (acting through its Canada branch)
6. as Canadian Agent
Documents[edit] 7.
8.
 John R. Sandrelli, Christopher J. Ramsay and Anjili 9. GENERAL SECURITY AGREEMENT
I. Bahadoorsingh,Remedies under Security Interests 10.
in Canada: An Overview (2002-09-18) 11.
 Roderick J.Wood,The Concept of a Security Interest: 12. Dated as of October 19, 2007
The Canadian Experience (2011-08-18)
13.
14. Execution Copy
References[edit] 15. GENERAL SECURITY AGREEMENT
16. General security agreement dated as of October 19, 2007 between Ryerson
1. ^ Daryl E. Clark (2003). "Revised Article 9 and the Canada, Inc. (the “Grantor”) and Bank of America, NA. (acting through its
PPSA - A comparison of the American and Canadian
Canada branch), in its capacity as Canadian Agent for the benefit of the
secured property legal regimes". The Secured
Canadian Secured Parties (in such capacity together with any successor in
Lender (as reprinted at the CBS Interactive Business
Network Resource Library). Retrieved 2011-09-29.
such capacity, the “Canadian Agent”).
2. ^ Kiriakoula Hatzikiriako (Summer 2010). "An attempt 17. WHEREAS the Lenders have agreed to make certain Loans available to the
to "demystify" Québec secured transactions law (Part Grantor upon the terms and conditions contained in a credit agreement
I)" (PDF). ABA Commercial Law Newsletter as among, inter alia, the Grantor, as Canadian Borrower, Rhombus Merger
reprinted by McMillan LLP. Retrieved 2011-09-13. Corporation (to be merged with and into Ryerson Inc.) and Joseph T.
3. ^ "Registre des droits personnels et réels mobiliers". Ryerson & Son, Inc., as U.S. Borrowers, the financial institutions party
Archived from the originalon 2011-10-29. thereto, as Lenders, Bank of America, NA., as Administrative Agent and the
Retrieved 2011-09-13. Canadian Agent dated as of the date hereof (such credit agreement as it may
4. ^ "Federal Security Interests: Contract #99-08- at any time or from time to time, be amended, supplemented, restated or
2" (PDF). Fraser Milner Casgrainunder contract to the replaced, the “Credit Agreement”);
Law Commission of Canada. June 2000. 18. AND WHEREAS the Grantor has agreed to execute and deliver this
Retrieved 2011-09-14. security agreement to and in favour of the Canadian Agent as security for
5. ^ "Indian Act (R.S.C., 1985, c. I-5), s. 89". the payment and performance of the Grantor’s obligations to the Canadian
6. ^ McDiarmid Lumber Ltd. v. God's Lake First Agent and the other Canadian Secured Parties under or in connection with
Nation 2006 SCC 58, [2006] 2 SCR 846 (15 the Credit Agreement and the other Credit Documents to which the Grantor
December 2006) is a party;
7. ^ Anita G. Wandzura (2007). "The Enforcement of
Security Interests Against the Personal Property of 19. NOW THEREFORE, in consideration of the foregoing premises and for
First Nations Persons on a Reserve". Ottawa Law other good and valuable consideration, the receipt and sufficiency of which
Review. University of Ottawa. 39 (1). Archived are acknowledged by the parties, the parties agree as follows:
from the original on 2013-12-02. 20. ARTICLE 1
8. ^ Christopher J. Giaschi. "Summary of Canadian Law 21. SECURITY
of Priorities". Archived from the original on 2002-06-
16. Retrieved 2011-09-30. 22. Section 1.01 Terms Incorporated by Reference.
23. In this security agreement, “PPSA” shall mean the Personal Property
2. RYERSON CANADA, INC. Security Act as in effect from time to time in the Province of Ontario;
 provided that, if validity, perfection or the effect of perfection or non- (i) through (iv) above, commercial tort claims (including commercial tort
perfection or the priority of the security interest granted by the Grantor in claims described on Schedule 12 of the Perfection Certificate) or other claims
any collateral and the rights and remedies of the Canadian Agent are and causes of action, in each case, pertaining to the items referred to in clauses
governed by the PPSA or other similar legislation as in effect in a (i) through (iv) above;
35.
jurisdiction other than Ontario, then “PPSA” shall mean the Personal
(vi)all books and records relating to the Collateral referred to in clauses
Property Security Act or other similar legislation as in effect from time to
(i) through (v) above; and
time in such other jurisdiction for purposes of the provisions hereof relating 36.

to such validity, perfection, effect of perfection or non-perfection or priority (vii)substitutions, replacements, accessions, products and proceeds (including,
and to such rights and remedies. As used herein the following term shall without limitation, insurance proceeds, licenses, royalties, income, payments,
have the meaning specified in the section of the PPSA set forth in the claims, damages and proceeds of suit) of any or all of the foregoing, only to
column beside it below: the extent any of the foregoing would constitute property of the type
24. described in clauses (i) through (vi) above.

Term PPSA
Control 1(2) 37. Section 1.03 Obligations Secured.
25.
38. (1) The security interest granted hereby (the “Security Interest”) secures
the payment and performance of all of the Canadian Obligations (as such
26. Other terms defined in the PPSA and used in this security agreement shall, term is defined in the Credit Agreement) of the Grantor (collectively, the
unless otherwise defined herein, have the same meaning as ascribed to such “Obligations”).
terms in the PPSA.
39.
27. The Canadian Agent and each Canadian Secured Party agree that the
Perfection Certificate and all descriptions of Collateral, schedules, 40. - 2 -
amendments and supplements thereto are and shall at all times remain a part 41.
of this security agreement. For the purposes hereof; “Perfection 42. Section 1.04 Attachment.
Certificate” shall mean that certain perfection certificate dated on or about
the date hereof executed and delivered by the Grantor in favour of the
43. (1) The Grantor acknowledges that (i) value has been given, (ii) it has rights
in the Collateral (other than after-acquired Collateral) or the power to
Canadian Agent for the benefit of the Canadian Secured Parties.
transfer rights in the Collateral (other than after-acquired Collateral) to the
28. Section 1.02 Grant of Security. Canadian Agent, (iii) it has not agreed to postpone the time of attachment of
29. Subject to Section 1.05, as collateral security for the payment and the Security Interest, and (iv) it has received a duplicate original copy of
performance in full of its Obligations (as hereinafter defined), the Grantor this security agreement.
hereby pledges and grants to the Canadian Agent for the benefit of the 44. Section 1.05 Scope of Security Interest.
Canadian Secured Parties, a lien on and security interest in all of its right,
title and interest in, to and under the following property, wherever located,
45. (1) Notwithstanding anything to the contrary contained in Section 1.02, the
Security Interest created hereunder shall not extend to, and the term
and whether now existing or hereafter arising or acquired from time to time
“Collateral” shall not include, the following assets (collectively, the
(collectively, the “Collateral”):
30. “Excluded Assets” and each, an “Excluded Asset”):
(1) (a) all accounts and (b) other rights to payment for inventory or related 46. (a) any permit, license, contract or other asset issued by a Governmental
services to the extent evidenced by chattel paper or instruments; Authority to the Grantor or any contract or other agreement to which the
31.

(ii) all inventory or documents of title for any inventory; Grantor is a party, in each case, only to the extent and for so long as the
32.
terms of such permit, license, contract or other asset issued by a
(iii)all money and all deposit accounts; Governmental Authority to the Grantor of such contract or other agreement
33.

(iv)all intangibles pertaining to the items referred to in clauses (i) through or any provision of law applicable thereto, validly prohibit the creation by
(iii) above, including, without limitation, all contingent rights with respect to the Grantor of a security interest in such permit, license or agreement in
warranties on inventory or accounts; favour of the Canadian Agent (after giving effect to the PPSA, any other
34.
applicable law (including the Bankruptcy and Insolvency Act (Canada)) or
(v) all records, supporting obligations and related Letters of Credit and rights
principles of equity); and
under Letters of Credit, pertaining to the items referred to in clauses
47. (b) all accounts resulting from the sale or disposition of all property of the to the contrary, perfection of the Canadian Agent’s security interest in
Grantor other than the Collateral and all supporting obligations and books money shall not be required other than to the extent it is (1) perfected as
and records relating thereto, proceeds of collateral or (ii) deposited in a deposit account subject to a
Control of the Canadian Agent.
48. provided, however, that Excluded Assets shall not include any proceeds,
substitutions or replacements of any Excluded Assets referred to in clauses 59. (2) Other Actions. In order to further ensure the attachment, perfection and
(a) and (b) (unless such proceeds, substitutions or replacements would priority of, and the ability of the Canadian Agent to enforce, the Canadian
constitute an Excluded Asset referred to in clauses (a) and (b). Agent’s Security Interest in the Collateral, the Grantor represents and
warrants as follows and agrees, at the Grantor’s own expense, to take the
49. (2) The Security Interest shall not extend to consumer goods. following actions with respect to the following Collateral:
50. (3) The Security Interest shall not extend or apply to the last day of the term 60.

of any lease or sublease or any agreement for a lease or sublease, now held (a) Instruments and Tangible Chattel Paper. As of the date hereof, no
or hereafter acquired by the Grantor in respect of real property, but the amounts payable under or in connection with any of the Collateral are
Grantor shall stand possessed of any such last day upon trust to assign and evidenced by any instrument or tangible chattel paper other than such
dispose of it as the Canadian Agent may direct. instruments and tangible chattel paper listed in Schedule 10 to the
Perfection Certificate. Each instrument and each item of tangible chattel
51. Section 1.06 Care and Custody of Collateral. paper evidencing any of the Collateral listed in Schedule 10 to the
52. (1) The Canadian Agent shall be deemed to have exercised reasonable care Perfection Certificate has been properly endorsed, assigned and delivered
in the custody and preservation of the Collateral in its possession if such to the Canadian Agent, accompanied by instruments of transfer or
Collateral is treated substantially equivalent to that which the Canadian assignment duly executed in blank. If any amount then payable under or
Agent, its individual capacity, accords its own property consisting of similar in connection with any of the Collateral shall be evidenced by any
instruments, it being understood that neither the Canadian Agent nor any of instrument or tangible chattel paper, and such amount, together with all
the Canadian Secured Parties shall have responsibility for taking any amounts payable evidenced by any instrument or tangible chattel paper
necessary steps to preserve rights against any person with respect to any evidencing any of the Collateral not previously delivered to the Canadian
Collateral. Agent exceeds $5,000,000 individually or $10,000,000 in the aggregate
53. for the Grantor and all Canadian Subsidiary Guarantors, the Grantor
acquiring such instrument or tangible chattel paper shall on or before the
54. - 3 - first date of delivery of quarterly financial statements pursuant to
55. Section 10.1.3(iii) of the Credit Agreement (the “Quarterly Update
56. (2) The Canadian Agent may, after the Security Interest shall have become Date”) following the receipt thereof by the Grantor endorse, assign and
enforceable, (i) notify any person obligated on an account or on chattel deliver the same to the Canadian Agent, accompanied by such
paper or any obligor on an instrument to make payments to the Canadian instruments of transfer or assignment duly executed in blank as the
Agent whether or not the Grantor was previously making collections on Canadian Agent may from time to time specify.
such accounts, chattel paper or instruments, and (ii) assume control of any 61.
proceeds arising from the Collateral.
62. - 4 -
57. Section 1.07 Perfection; Other Actions
63.
58. (1) Financing Statements and Other Filings: Maintenance of Perfected (b) Deposit Accounts. As of the date hereof, the Grantor does not have any
Security Interest. The Grantor represents and warrants that all financing deposit accounts other than the accounts listed in Schedule 13 to the
statements, agreements, instruments and other documents necessary to Perfection Certificate. The Canadian Agent has a first priority security
perfect the Security Interest granted by it to the Canadian Agent in respect interest in each such deposit account subject as to priority only to
of the Collateral have been delivered to the Canadian Agent in completed Permitted Liens. The Grantor shall not hereafter establish and maintain
and, to the extent necessary or appropriate, duly executed form for filing in any deposit account unless (1) it shall give the Canadian Agent prompt
each governmental, municipal or other office specified in Schedule 6 to the written notice that such new deposit account has been established with a
Perfection Certificate. The Grantor agrees that at the sole cost and expense bank and (2) such bank, the Grantor and the Canadian Agent shall within
of the Grantor, the Grantor will maintain the Security Interest created thirty (30) days of the date of acquisition of such deposit account have
hereunder in the Collateral as a perfected first priority security interest duly executed and delivered to the Canadian Agent a deposit account
subject only to Permitted Liens. Notwithstanding anything contained herein control agreement or a blocked account agreement with respect to such
 deposit account, such time to be extended in the Canadian Agent’s
reasonable sole discretion. The Canadian Agent agrees with the Grantor
67.
(d) Letter-of-Credit Rights. If the Grantor is at any time a beneficiary under a
that the Canadian Agent shall not give any instructions directing the letter of credit relating to the Collateral now or hereafter issued, the
disposition of finds from time to time credited to any deposit account or Grantor shall on or before the first Quarterly Update Date following the
withhold any withdrawal rights from the Grantor with respect to funds receipt thereof by the Grantor notify the Canadian Agent thereof and the
from time to time credited to any deposit account unless a Cash Dominion Grantor shall, at the request of the Canadian Agent, pursuant to an
Event or an Event of Default has occurred and is continuing. The agreement in form and substance reasonably satisfactory to the Canadian
provisions of this Section 1.07(2)(b) shall not apply to deposit accounts Agent, either (i) arrange for the issuer and any confirmer of such letter of
(i) for which the Canadian Agent is the bank, (ii) for which all of the credit to consent to an assignment to the Canadian Agent of the proceeds
funds on deposit are used for funding (w) payroll, (x) retirement plans and of any drawing under the letter of credit relating to the Collateral or
employee benefits, including rabbi trusts for deferred compensation, (ii) arrange for the Canadian Agent to become the transferee beneficiary
(y) health care benefits and (z) escrow arrangements (e.g., environmental of such letter of credit, with the Canadian Agent agreeing, in each case,
indemnity accounts), (iii) (not already subject to the provisions of this that the proceeds of any drawing under the letter of credit are to be
paragraph) with an aggregate avenge daily balance of all funds in all such applied as provided in the Credit Agreement. The actions in the preceding
other deposit accounts for the Grantor and all Canadian Subsidiary sentence shall not be required to the extent that the amount of any such
Guarantors not in excess of $10,000,000 at any time and (iv) located letter of credit, together with the aggregate amount of all other letters of
outside of Canada. The Grantor shall not grant Control of any deposit credit relating to the Collateral for which the actions described above in
account to any person other than the Canadian Agent. clause (i) and (ii) have not been taken, does not exceed $5,000,000
64.

(c) Electronic Chattel Paper and Transferable Records. As of the date hereof, individually or $10,000,000 in the aggregate for the Grantor and all
no amount under or in connection with any of the Collateral is evidenced Canadian Subsidiary Guarantors.
68.
by any electronic chattel paper other than such electronic chattel paper (e) Commercial Tort Claims. As of the date hereof, the Grantor hereby
and transferable records listed in Schedule 10 to the Perfection represents and warrants that it holds no commercial tort claims other than
Certificate. If any amount payable under or in connection with any of the those listed in Schedule 12 to the Perfection Certificate. If the Grantor
Collateral shall be evidenced by any electronic chattel paper or shall at any time hold or acquire a commercial tort claim relating to the
transferable record, the Grantor shall on or before the first Quarterly Collateral, the Grantor shall immediately notify the Canadian Agent in
Update Date following the receipt thereof by the Grantor notify the writing signed by the Grantor of the brief details thereof and grant to the
Canadian Agent thereof and shall take such action as the Canadian Agent Canadian Agent in such writing a security interest therein and in the
may reasonably request to vest in the Canadian Agent Control of such proceeds thereof, all upon the terms of this security agreement, with such
electronic chattel paper or transferable record under the PPSA. The writing to be in form and substance reasonably satisfactory to the
requirement in the preceding sentence shall not apply to the extent that Canadian Agent The requirement in the preceding sentence shall not
such amount, together with all amounts payable evidenced by electronic apply to the extent that the amount of such commercial tort claim,
chattel paper or transferable record in which the Canadian Agent has not together with the amount of all other commercial tort claims relating to
been vested Control within the meaning of the PPSA, does not exceed the Collateral held by the Grantor and the Canadian Subsidiary
$5,000,000 individually or $10,000,000 in the aggregate for the Grantor Guarantors in which the Canadian Agent does not have a security interest,
and all Canadian Subsidiary Guarantors. The Canadian Agent agrees with does not exceed $10,000,000 in the aggregate for the Grantor and all
the Grantor that the Canadian Agent will arrange, pursuant to procedures Canadian Subsidiary Guarantors.
satisfactory to the Canadian Agent and so long as such procedures will
not result in the Canadian Agent’s loss of Control, for the Grantor to
make alterations to the electronic chattel paper or transferable record 69. Section 1.08 Representations and Covenants.
permitted under the PPSA for a party in control to allow without loss of 70. The Grantor represents and warrants to the Canadian Agent, acknowledging
control, unless an Event of Default has occurred and is continuing or and confirming that the Canadian Agent is relying thereon without
would occur after taking into account any action by the Grantor with independent inquiry, that:
respect to such electronic chattel paper or transferable record. 71. (1) Title. Except for the security interest granted to the Canadian Agent for
65. the benefit of the Canadian Secured Parties pursuant to this security
66. - 5 - agreement and Permitted Liens, the Grantor owns and has rights and, as to
Collateral acquired by it from time to time after the date hereof, will own
 and have rights in each item of Collateral pledged by it hereunder, free and except financing statements and other statements and instruments filed or to
clear of any and all Liens or claims of others. be filed in respect of and covering the security interests granted by the
72. (2) Validity of Security Interest. The Security Interest in and Lien on the Grantor to the Canadian Agent and the holders of the Permitted Liens.
Collateral granted to the Canadian Agent for the benefit of the Canadian 79. (5) Location of Inventory. In no event shall any inventory of the Grantor be
Secured Parties moved to any location except in accordance with the Credit Agreement and
73. in particular, Section 8.1.1 thereof.
74. - 6 - 80. (6) Consents. In the event that the Canadian Agent desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth in
75. this security agreement and determines it necessary to obtain any approvals
76. hereunder constitutes (a) a legal and valid security interest in all the or consents of any Governmental Authority or any other person therefor,
Collateral securing the payment and performance of the Obligations, and then, upon the reasonable request of the Canadian Agent, the Grantor agrees
(b) subject to the filings and other actions described in Schedule 6 to the to use its best efforts to assist and aid the Canadian Agent to obtain as soon
Perfection Certificate (to the extent required to be listed on the schedules to as practicable any necessary approvals or consents for the exercise of any
the Perfection Certificate as of the date this representation is made or such remedies, rights and powers.
deemed made) being duly made, a perfected security interest in all the
Collateral, except as otherwise provided herein. The Security Interest and
81.
Lien granted to the Canadian Agent for the benefit of the Canadian Secured 82. - 7 -
Parties pursuant to this security agreement in and on the Collateral will at 83.
all times constitute a perfected, continuing security interest therein, prior to 84. (7) Collateral. All information set forth herein, including the schedules
all other Liens on the Collateral except for Permitted Liens. hereto, and all information contained in any documents, schedules and lists
77. (3) Defense of Claims: Transferability of Collateral. The Grantor shall, at its heretofore delivered to any Canadian Secured Party, including the
own cost and expense, defend title to the Collateral pledged by it hereunder Perfection Certificate and the schedules thereto, in connection with this
and the security interest therein and Lien thereon granted to the Canadian security agreement, in each case, relating to the Collateral, is accurate and
Agent and the priority thereof against all material claims and demands of all complete in all material respects.
persons, at its own cost and expense, at any time claiming any interest 85. (8) Insurance. In the event that the proceeds of any insurance claim with
therein adverse to the Canadian Agent or any other Canadian Secured Party respect to any of the Collateral are paid to the Grantor after the Canadian
other than Permitted Liens. There is no agreement, order, judgment or Agent has exercised its right to foreclose after an Event of Default, such net
decree, and the Grantor shall not enter into any agreement or take any other cash proceeds shall be held in trust for the benefit of the Canadian Agent
action, that would restrict the transferability of any of the Collateral or and immediately after receipt thereof shall be paid to the Canadian Agent in
otherwise impair or conflict with the Grantor’s obligations or the rights of the amount and for application in accordance with the Credit Agreement.
the Canadian Agent hereunder to the extent reasonably likely to have a
Material Adverse Effect and after giving effect to the PPSA, any other 86. (9) Chief Executive Office; Change of Name; Jurisdiction of Organization.
applicable law (including the Bankruptcy and Insolvency Act (Canada)) or The Grantor will not effect any change (i) to its legal name, (ii) in its
principles of equity. identity or organizational structure, (iii) in its organizational identification
number, if any, or (iv) in its jurisdiction of organization (in each case,
78. (4) Other Financing Statements. The Grantor has not filed, nor authorized including by merging with or into any other entity, reorganizing, dissolving,
any third party to file (nor will there be), any valid or effective financing liquidating, reorganizing or organizing in any other jurisdiction), unless
statement (or similar statement, instrument of registration or public notice (A) it shall have given the Canadian Agent promptly but in any event within
under the law of any jurisdiction) covering or purporting to cover any 30 days after such change, written notice clearly describing such change and
interest of any kind in the Collateral, except such as have been filed in providing such other information in connection therewith as the Canadian
favour of the Canadian Agent pursuant to this security agreement or in Agent may reasonably request and (B) it shall have taken or will promptly
favour of any holder of a Permitted Lien with respect to such Permitted Lien take all action necessary to maintain the perfection and priority of the
or financing statements or public notices relating to the termination Security Interest of the Canadian Agent for the benefit of the Canadian
statements listed on Schedule 8 to the Perfection Certificate. The Grantor Secured Parties in the Collateral. The Canadian Agent shall have no duty to
shall not execute, authorize or permit to be filed in any public office any inquire about any of the changes described in clauses (i) through
financing statement (or similar statement, instrument of registration or
public notice under the law of any jurisdiction) relating to any Collateral,
 (iv) inclusively, the parties acknowledging and agreeing that the Grantor is rights of the Canadian Agent however created. The Canadian Agent shall
solely responsible to take all action described in Section 1.08(9)(B) above. not be bound to exercise any right or remedy, and the exercise of rights and
87. (10) Transfer of Collateral. The Grantor shall not sell, convey, assign or remedies shall be without prejudice to any other rights of the Canadian
otherwise dispose of, or grant any option with respect to, any of the Agent in respect of the Obligations including the right to claim for any
Collateral pledged or charged by it hereunder except as permitted by the deficiency. The taking of any action or proceeding or refraining from doing
Credit Agreement. so, or any other dealings with any other security for the Obligations secured
by this security agreement shall not release or affect the Collateral or the
88. ARTICLE 2 Security Interest.
89. ENFORCEMENT 107. Section 2.03 Additional Rights.
90. Section 2.01 Enforcement. 108. In addition to the remedies set forth in Section 2.02, the Canadian
91. (1) The Security Interest shall be and become enforceable against the Agent, for the benefit of the Canadian Secured Parties, may, whenever the
Grantor upon the occurrence and during the continuance of an Event of Security Interest has become enforceable:
109.
Default.
(a) require the Grantor, at the Grantor’s expense, to assemble the Collateral at a
92. Section 2.02 Remedies. place or places designated by notice in writing and the Grantor agrees to so
93. Whenever the Security Interest has become enforceable, the Canadian assemble the Collateral;
110.
Agent, for the benefit of the Canadian Secured Parties, may realize upon the
(b) require the Grantor, by notice in writing, to disclose to the Canadian Agent the
Collateral and enforce the rights of the Canadian Agent by:
94. location or locations of the Collateral and the Grantor agrees to make such
(a) entry onto any premises where the Collateral consisting of tangible personal disclosure when so required;
111.
property may be located;
95. (c) repair, process, modify, complete or otherwise deal with the Collateral and
(b) entry into possession of the Collateral by any method permitted by law; prepare for the disposition of the Collateral, whether on the premises of the
96. Grantor or otherwise;
97. - 8 - 112.
98. 113. -9-
(c) sale or lease of all or any part of the Collateral; 114.
99.

(d) collection of any proceeds arising in respect of the Collateral; (d) carry on all or any part of the business of the Grantor and, to the exclusion of
100. all others including the Grantor, enter upon, occupy and use all or any of the
(e) collection, realization or sale of; or other dealing with, the accounts; premises, buildings, and other property of or used by the Grantor for such
101.

(f) appointment by instrument in writing of a receiver (which term as used in this time as the Canadian Agent sees fit, free of charge, and the Canadian Agent
security agreement includes a receiver and manager) or agent of all or any part shall not be liable to the Grantor for any act, omission or negligence in so
of the Collateral and removal or replacement from time to time of any receiver doing or for any rent charges, depreciation or damages incurred in connection
or agent; with or resulting from such action;
115.
102.

(g) institution of proceedings in any court of competent jurisdiction for the (e) borrow for the purpose of carrying on the business of the Grantor or for the
appointment of a receiver of all or any part of the Collateral; maintenance, preservation or protection of the Collateral and mortgage, grant
103. or charge a security interest in the Collateral, whether or not in priority to the
(h) institution of proceedings in any court of competent jurisdiction for sale or Security interest, to secure repayment; and
foreclosure of all or any part of the Collateral; 116.
104. (f) commence, continue or defend any judicial or administrative proceedings for
(i) filing of proofs of claim and other documents to establish claims to the the purpose of protecting, seizing, collecting, realizing or obtaining possession
Collateral in any proceeding relating to the Grantor; and or payment of the Collateral, and give good and valid receipts and discharges
105.

(j) any other remedy or proceeding authorized or permitted under the PPSA or in respect of the Collateral and compromise or give time for the payment or
otherwise by law or equity. performance of all or any part of the accounts or any other obligation of any
third party to the Grantor.
106. Such remedies may be exercised from time to time separately or in
combination and are in addition to, and not in substitution for, any other
117. Section 2.04 Concerning the Receiver. 128. (1) The Canadian Agent shall not be obliged to exhaust its recourse
118. (1) Any receiver appointed by the Canadian Agent shall be vested against the Grantor or any other Person or against any other security it may
with the rights and remedies which could have been exercised by the hold in respect of the Obligations before realizing upon or otherwise dealing
Canadian Agent in respect of the Grantor or the Collateral and such other with the Collateral in such manner as the Canadian Agent may consider
powers and discretions as are granted in the instrument of appointment and desirable.
any supplemental instruments. The identity of the receiver, its replacement 129. (2) The Canadian Agent may grant extensions or other
and its remuneration shall be within the sole and unfettered discretion of the indulgences, take and give up securities, accept compositions, grant releases
Canadian Agent. and discharges and otherwise deal with the Grantor and with other Persons,
119. (2) Any receiver appointed by the Canadian Agent shall act as sureties or securities as it may see fit without prejudice to the Obligations,
agent for the Canadian Agent for the purposes of taking possession of the the liability of the Grantor or the rights of the Canadian Agent in respect of
Collateral, but otherwise and for all other purposes (except as provided the Collateral.
below), as agent for the Grantor. The receiver may sell, lease, or otherwise 130. (3) The Canadian Agent shall not be (i) liable or accountable for
dispose of Collateral as agent for the Grantor or as agent for the Canadian any failure to collect realize or obtain payment in respect of the Collateral,
Agent as the Canadian Agent may determine in its discretion. The Grantor (ii) bound to institute proceedings for the purpose of collecting, enforcing,
agrees to ratify and confirm all actions of the receiver acting as agent for realizing or obtaining payment of the Collateral or for the purpose of
the. Grantor, and to release and indemnify the receiver in respect of all such preserving any rights of any Persons in respect of the Collateral,
actions. (iii) responsible for any loss occasioned by any sale or other dealing with
120. (3) The Canadian Agent, in appointing or refraining from the Collateral or by the retention of or failure to sell or otherwise deal with
appointing any receiver, shall not incur liability to the receiver, the Grantor the Collateral, or (iv) bound to protect the Collateral from depreciating in
or otherwise and shall not be responsible for any misconduct or negligence value or becoming worthless.
of such receiver. 131. Section 2.07 Standards of Sale.
121. Section 2.05 Appointment of Attorney. 132. Without prejudice to the ability of the Canadian Agent to dispose
122. The Grantor irrevocably appoints the Canadian Agent (and any of of the Collateral in any manner which is commercially reasonable, the
its officers) as attorney of the Grantor (with full power of substitution), Grantor acknowledges that a disposition of Collateral by the Canadian
whenever the Security Interest has become enforceable, to do, make and Agent which takes place substantially in accordance with the following
execute, in the name of and on behalf of the Grantor, all such further acts, provisions shall be deemed to be commercially reasonable:
133.
documents, matters and things which the Canadian Agent may deem (a) the Collateral may be disposed of in whole or in part;
134.
necessary or advisable to accomplish the purposes of this security
agreement including the execution, endorsement and delivery of documents (b) the Collateral may be disposed of by public auction, public tender or private
and any notices, receipts, assignments or verifications of contract, with or without advertising and without any other formality;
135.

123. (c) any assignee of such Collateral may be the Canadian Agent or a customer of
the Canadian Agent;
124. - 10 - 136.

(d) any sale conducted by the Canadian Agent shall be at such time and place, on
125. such notice and in accordance with such procedures as the Canadian Agent, in
126. the accounts and the delivery and transfer of any Collateral to the its sole discretion, may deem advantageous;
Canadian Agent to its nominees or transferees. The powers of attorney
herein granted is in addition to, and not in substitution for any transfer 137.
power of attorney delivered by the Grantor and such power of attorney may 138. - 11 -
be relied upon by the Canadian Agent severally or in combination. All acts
139.
of the attorney are ratified and approved, and the attorney shall not be liable (e) a disposition of Collateral may be on such terms and conditions as to credit or
for any act, failure to act or any other matter or thing, except for its own otherwise as the Canadian Agent in its sole discretion, may deem
gross negligence or wilful misconduct. advantageous; and
127. Section 2.06 Dealing with the Collateral.
140.

(f) the Canadian Agent may establish an upset or reserve bid or price in respect of
any Collateral.
141. Section 2.08 Application of Proceeds. 155.
142. The proceeds received by the Canadian Agent in respect of any 156. Agent and as shall not have been sold or otherwise applied
sale of, collection from or other realization upon all or any part of the pursuant to the terms hereof, and, with respect to any other Collateral proper
Collateral pursuant to the exercise by the Canadian Agent of its remedies documents and instruments (including termination financing statements or
shall be applied, together with any other sums then held by the Canadian releases, terminations of deposit account control agreements acknowledging
Agent pursuant to this security agreement, in accordance with the Credit the termination hereof or the release of such Collateral as the case may be).
Agreement. 157. Section 3.04 No Merger.
143. Section 2.09 Dealings by Third Parties. 158. This security agreement shall not operate by way of merger of any
144. (1) No Person dealing with the Canadian Agent or an agent or of the Obligations and no judgment recovered by the Canadian Agent shall
receiver shall be required to determine (i) whether the Security Interest has operate by way of merger of, or in any way affect, the Security Interest,
become enforceable, (ii) whether the powers which such Person is which is in addition to, and not in substitution for, any other security now or
purporting to exercise have become exercisable, (iii) whether any money hereafter held by the Canadian Agent in respect of the Obligations.
remains due to the Canadian Agent by the Grantor, (iv) the necessity or 159. Section 3.05 Further Assurances.
expediency of the stipulations and conditions subject to which any sale or
lease is made, (v) the propriety or regularity of any sale or other dealing by 160. The Grantor shall take such further actions, and execute and/or
deliver to the Canadian Agent such additional financing statements,
the Canadian Agent with the Collateral, or (vi) how any money paid to the
amendments, assignments, agreements, supplements, powers and
Canadian Agent has been applied.
instruments, as the Canadian Agent may in its reasonable judgment deem
145. ARTICLE 3 necessary or appropriate in order to create, perfect, preserve and protect the
146. GENERAL Security Interest in the Collateral as provided herein and the rights and
147. Section 3.01 Notices, etc. interests granted to the Canadian Agent hereunder, to carry into effect the
purposes hereof or better to assure and confirm the validity, enforceability
148. Any notice, direction, demand or other communication required or and priority of the Canadian Agent’s Security Interest in the Collateral or
permitted to be given under this security agreement shall be given in the permit the Canadian Agent to exercise and enforce its rights, powers and
same manner as provided in the Credit Agreement. remedies hereunder with respect to any Collateral, including the filing of
149. Section 3.02 Defined Terms. financing statements, continuation statements and other documents
150. Capitalized terms used in this security agreement and not otherwise (including this security agreement) under the Personal Property Security
defined shall have the respective meanings attributed to them in the Credit Act (Ontario) or other similar laws in effect in any jurisdiction with respect
Agreement. to the Security Interest created hereby and the execution and delivery of
deposit account control agreements, all in form reasonably satisfactory to
151. Section 3.03 Discharge.
the Canadian Agent and in such offices wherever required by law to perfect,
152. When all the Obligations have been paid in full and no continue and maintain the validity, enforceability and priority of the security
commitments remain under the Credit Agreement, this security agreement interest in the Collateral as provided herein and to preserve the other rights
shall terminate. Upon termination of this security agreement the Collateral and interests granted to the Canadian Agent hereunder, as against third
shall be released from the Lien of this security agreement. In addition, the parties, with respect to the Collateral. Without limiting the generality of the
Collateral or any portion thereof shall be released from the Lien of this foregoing, the Grantor shall make, execute, endorse, acknowledge, file or
security agreement pursuant to the Credit Agreement. Upon such release, refile and/or deliver to the Canadian Agent from time to time upon
the Canadian Agent shall, upon the request and at the sole cost and expense reasonable request by the Canadian Agent such lists, schedules, descriptions
of the Grantor, assign, transfer and deliver to the Grantor, against receipt and designations of the Collateral, copies of warehouse receipts, receipts in
and without recourse to or warranty by the Canadian Agent except as to the the nature of warehouse receipts, bills of lading, documents of title,
fact that the Canadian Agent has not encumbered the released assets, such vouchers, invoices, schedules, confirmatory assignments, supplements,
of the Collateral or any part thereof to be released (in the case of a release) additional security agreements, conveyances, financing statements, transfer
as may be in possession of the Canadian endorsements, powers of attorney, certificates, reports and other assurances
153. or instruments as the Canadian Agent shall reasonably request. If an Event
154. - 12 - of Default has occurred and is continuing, the Canadian Agent may institute
and maintain, in its own name or in the name of the Grantor, such suits and
 proceedings as the Canadian Agent may be advised by counsel shall be or proceeding brought in such a court has been brought in an inconvenient
necessary or expedient to prevent any impairment of the Security Interest in forum. The Grantor agrees that a final judgment in any such action or
or the perfection thereof in the Collateral, All of the foregoing shall be at the proceeding shall be conclusive and may be enforced in any other manner
sole cost and expense of the Grantor. provided by law. Nothing in this section shall affect the right of the
161. Section 3.06 Supplemental Security. Canadian Agent to serve process in any manner permitted by law or limit
the rights of the Canadian Agent to bring proceedings against the Grantor in
162. This security agreement is in addition to and without prejudice to the courts of any other jurisdiction.
all other security now held or which may hereafter be held by the Canadian
Agent. 177. (3) The Grantor hereby consents generally in respect of any legal
action or proceedings arising out of or in connection with this security
163. agreement to the giving of any relief or the issue of any process in
164. - 13 - connection with such action or proceedings, including, without limitation,
165. the making, enforcement or execution against the Grantor of any order or
166. Section 3.07 Successors and Assigns. judgment which may be made or given in such action or proceedings.
167. This security agreement shall be binding upon the Grantor, its 178.
successors and assigns, and shall enure to the benefit of the Canadian Agent 179. - 14 -
and its successors and assigns. All rights of the Canadian Agent shall be 180.
assignable and in any action brought by an assignee to enforce any of those
rights.
181. (4) To the extent that the Grantor has or hereafter may acquire any
immunity from the jurisdiction of any court or from any legal process
168. Section 3.08 Headings, etc. (whether service of notice, attachment prior to judgment, attachment in the
169. The division of this security agreement into articles, sections and aid of execution, execution or otherwise) with respect to itself or its assets,
subsections and the insertion of headings are for convenience of reference the Grantor hereby irrevocably waives, to the fullest extent permitted by
only and shall not affect the meaning or construction of this security law, such immunity in respect of its obligations under this security
agreement. agreement.
170. Section 3.09 Gender and Number. 182. Section 3.12 Counterparts.
171. Any reference in this security agreement to gender shall include all 183. This security agreement may be executed in counterparts
genders and words importing the singular number only shall include the (including by way of facsimile) and all such counterparts taken together
plural and vice versa. shall be deemed to constitute one and the same instrument.
172. Section 3.10 Severability. 184. (The remainder of this page is intentionally left blank]
173. If any provision of this security agreement shall be deemed by any 185.
court of competent jurisdiction to be invalid or void, the remaining
provisions shall remain in full force and effect.
174. Section 3.11 Governing Law.
175. (1) This security agreement shall be governed by and interpreted
and enforced in accordance with the laws of the Province of Ontario and the
laws of Canada applicable therein.
176. (2) The Grantor hereby (i) irrevocably submits to the non-exclusive
jurisdiction of any court sitting in the Province of Ontario over any suit,
action or proceeding arising out of or relating to this security agreement;
(ii) irrevocably agrees that all claims in respect of any suit, action or
proceeding may be heard and determined in such court; and (iii) irrevocably
waives, to the fullest extent permitted by law, any objection which it may
have or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that any such suit, action