Exhibit 10.6

EXECUTION COPY
CANADIAN PLEDGE AGREEMENT
CANADIAN PLEDGE AGREEMENT, dated as of October 13, 2010 (this “Agreement”), by
ASSOCIATED MATERIALS CANADA LIMITED (“Associated”), an Ontario Corporation,
GENTEK CANADA HOLDINGS LIMITED (“Gentek”), an Ontario Corporation and GENTEK
BUILDING PRODUCTS LIMITED PARTNERSHIP, an Ontario limited partnership, by its
general partner, Gentek (“LP”), each of the subsidiaries listed on Schedule 1
hereto (each such subsidiary, individually, a “Canadian Subsidiary Pledgor” and,
collectively, the “Canadian Subsidiary Pledgors”; and, together with Associated,
Gentek and LP, the “Canadian Pledgors”), and UBS AG CANADA BRANCH, as Canadian
Collateral Agent for the Secured Parties (as defined below) (in such capacity,
together with its successors in such capacity, the “Canadian Collateral Agent”).
W I T N E S S E T H:
WHEREAS, (1) CAREY INTERMEDIATE HOLDINGS CORP., a Delaware corporation
(“Holdings”), the US Borrowers and the Canadian Borrowers (collectively, the
“Borrowers”) have entered into a Revolving Credit Agreement, dated as of
October 13, 2010 (the “Credit Agreement”), with the banks, financial
institutions and other institutional lenders and investors from time to time
parties thereto (each individually a “Lender” and collectively, the “Lenders”),
UBS AG, STAMFORD BRANCH, as US Administrative Agent, US Collateral Agent, and a
US Letter of Credit Issuer and a Canadian Letter of Credit Issuer, UBS AG CANADA
BRANCH, as Canadian Administrative Agent and Canadian Collateral Agent, WELLS
FARGO CAPITAL FINANCE, LLC, as Co-Collateral Agent, DEUTSCHE BANK AG NEW YORK
BRANCH, as a US Letter of Credit Issuer, DEUTSCHE BANK AG CANADA BRANCH, as a
Canadian Letter of Credit Issuer, WELLS FARGO BANK, NATIONAL ASSOCIATION as a US
Letter of Credit Issuer and a Canadian Letter of Credit Issuer and UBS LOAN
FINANCE LLC, as Swingline Lender, pursuant to which the Canadian Lenders have
severally agreed to make loans to the Borrowers and the Letter of Credit Issuers
have agreed to issue letters of credit for the account of the Borrowers upon the
terms and subject to the conditions set forth therein, (2) one or more Cash
Management Banks may from time to time provide Cash Management Services pursuant
to Secured Cash Management Agreements to any Credit Party and (3) one or more
Hedge Banks may from time to time enter into Secured Hedging Agreements with any
Credit Party (clauses (1), (2) and (3) collectively, the “Extensions of
Credit”);
WHEREAS, pursuant to the Canadian Guarantee, dated as of October 13, 2010 (the
“Canadian Guarantee”), each of the Canadian Pledgors (other than in respect of
their own obligations) and their subsidiaries party thereto have agreed to
guarantee to the Canadian Collateral Agent, for the benefit of the Secured
Parties, the prompt and complete payment and performance when due (whether at
the stated maturity, by acceleration or otherwise) of the Canadian Obligations;
WHEREAS, each Canadian Pledgor acknowledges that it will derive substantial
direct and indirect benefit from the making of the Extensions of Credit and have
agreed to secure their obligations with respect thereto pursuant to this
Agreement;

 

 

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WHEREAS, it is a condition precedent to the obligations of the Canadian Lenders
and Canadian the Letter of Credit Issuers to make their respective Extensions of
Credit to the Canadian Borrowers under the Credit Agreement that the Canadian
Pledgors shall have executed and delivered this Agreement to the Canadian
Collateral Agent for the benefit of the Secured Parties; and
WHEREAS, (1) the Canadian Pledgors are the legal and beneficial owners of the
Capital Stock described in Schedule 2 and issued by the entities named therein
(such Capital Stock, together with all other Capital Stock required to be
pledged pursuant to Section 9.11 of the Credit Agreement (the “After-acquired
Shares”), are referred to collectively herein as the “Pledged Shares”), and
(2) each of the Canadian Pledgors is the legal and beneficial owner of the
promissory notes, chattel paper and instruments evidencing Indebtedness owed to
it described in Schedule 2 and issued by the entities named therein (such notes
and instruments, together with any other Indebtedness owed to any Canadian
Pledgor hereafter and required to be pledged pursuant to Section 9.11(a) of the
Credit Agreement (the “After-acquired Debt”), are referred to collectively
herein as the “Pledged Debt”), in each case as such schedule may be amended
pursuant to Section 9.11(a) of the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and to
induce the Agents and the Canadian Lenders and the Canadian Letter of Credit
Issuers to enter into the Credit Agreement and to induce the Canadian Lenders
and the Canadian Letter of Credit Issuers to make their respective Extensions of
Credit to the Canadian Borrowers under the Credit Agreement, to induce one or
more Cash Management Banks to provide Cash Management Services pursuant to
Secured Cash Management Agreements to any Credit Party and to induce one or more
Hedge Banks to enter into Secured Hedging Agreements with each Credit Party, the
Canadian Pledgors hereby agree with the Canadian Collateral Agent, for the
benefit of the Secured Parties, as follows:
1. Defined Terms.
(a) Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein (including terms used in the preamble and the recitals) shall have
the meanings given to them in the Credit Agreement and all terms defined in the
PPSA from time to time in effect or in the Securities Transfer Act (Ontario)
from time to time in effect (together with any regulations thereunder, the
“STA”) and not defined herein or in the Credit Agreement shall have the meanings
specified therein. References to sections of the PPSA or the STA shall be
construed to also refer to any successor sections.
(b) The rules of construction and other interpretive provisions specified in
Sections 1.2, 1.5, 1.6 and 1.7 of the Credit Agreement shall apply to this
Agreement, including terms defined in the preamble and recitals hereto.
(c) The following terms shall have the following meanings:
“After-acquired Debt” shall have the meaning assigned to such term in the
recitals hereto.

 

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“After-acquired Shares” shall have the meaning assigned to such term in the
recitals hereto.
“Agreement” shall have the meaning assigned to such term in the preamble hereto.
“Canadian Borrowers” shall have the meaning assigned to the term “Canadian
Borrowers” in the Credit Agreement.
“Canadian Collateral Agent” shall have the meaning assigned to such term in the
preamble hereto.
“Canadian Guarantee” shall have the meaning assigned to such term in the
recitals hereto.
“Canadian Obligations” shall have the meaning assigned to the term “Canadian
Obligations” in the Credit Agreement.
“Canadian Pledgors” shall have the meaning assigned to such term in the preamble
hereto.
“Canadian Subsidiary Pledgors” shall have the meaning assigned to such term in
the preamble hereto.
“Company” shall have the meaning assigned to such term in the preamble hereto.
“Credit Agreement” shall have the meaning assigned to such term in the recitals
hereto.
“Extensions of Credit” shall have the meaning assigned to such term in the
recitals hereto.
“Lenders” shall have the meaning assigned to such term in the recitals hereto.
“Permitted Liens” shall mean any Lien on the Collateral expressly permitted to
be granted pursuant to the Credit Agreement.
“Pledged Debt” shall have the meaning assigned to such term in the recitals
hereto.
“Pledged Shares” shall have the meaning assigned to such term in the recitals
hereto.
“PPSA” shall mean the Personal Property Security Act (Ontario), the Civil Code
of Québec or any other applicable Canadian federal, provincial or territorial
statute pertaining to the granting, perfecting, priority or ranking of security
interests, liens, hypothecs on personal property, and any successor statutes,
together with any regulations thereunder, in each case as in effect from time to
time. References to sections of the PPSA shall be construed to also refer to any
successor sections.

 

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“Secured Debt Documents” shall mean, collectively, the Credit Documents, each
Secured Cash Management Agreement entered into with a Cash Management Bank and
each Secured Hedging Agreement entered into with a Hedge Bank.
“Securities Act” shall have the meaning assigned to such term in Section 12(e).
“Termination Date” shall mean the date on which all Canadian Obligations are
paid in full in cash (other than Cash Management Obligations under Secured Cash
Management Agreements, Hedging Obligations under Secured Hedging Agreements or
contingent indemnification obligations not then due and payable) and the Total
Revolving Credit Commitments and all Letters of Credit are terminated (other
than Letters of Credit that have been Cash Collateralized in the manner set
forth in Section 3.7 of the Credit Agreement following the termination of the
Total Revolving Credit Commitments).
(d) Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Canadian Pledgor, shall refer to such
Canadian Pledgor’s Collateral or the relevant part thereof.
2. Grant of Security. As security for the prompt and complete payment when due
(whether at the stated maturity, by acceleration or otherwise) of the Canadian
Obligations, each Canadian Pledgor hereby transfers, assigns and pledges to the
Canadian Collateral Agent, for the benefit of the Secured Parties, and hereby
grants to the Canadian Collateral Agent, for the benefit of the Secured Parties,
a security interest in and continuing lien on all of such Canadian Pledgor’s
right, title and interest in and to all of the following, whether now owned or
anytime hereafter acquired or existing (collectively, the “Collateral”):
(a) the Pledged Shares held by such Canadian Pledgor and the certificates, if
any, representing such Pledged Shares and any interest of such Canadian Pledgor,
including all interests documented in the entries on the books of the issuer of
the Pledged Shares or any financial intermediary pertaining to the Pledged
Shares and all dividends, cash, warrants, rights, instruments and other property
or proceeds from time to time received, receivable or otherwise distributed in
respect of, or in exchange for, any or all of the Pledged Shares; provided that
the Pledged Shares under this Agreement shall not include any Excluded Capital
Stock;
(b) the Pledged Debt and the instruments evidencing the Pledged Debt owed to
such Canadian Pledgor, and all payments of principal or interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Pledged Debt;
(c) all other property that may be delivered to and held by the Canadian
Collateral Agent pursuant to the terms of this Section 2;

 

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(d) subject to Section 8, all rights and privileges of such Canadian Pledgor
with respect to the securities and other property referred to in clauses (a),
(b) and (c) above; and
(e) to the extent not covered by clauses (a), (b), (c) and (d) above,
respectively, all proceeds of any or all of the foregoing Collateral. For
purposes of this Agreement, the term “proceeds” includes whatever is receivable
or received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary, and
includes proceeds of any indemnity or guarantee payable to any Canadian Pledgor
or the Canadian Collateral Agent from time to time with respect to any of the
Collateral.
TO HAVE AND TO HOLD the Collateral, together with all right, title, interest,
powers, privileges and preferences pertaining or incidental thereto, unto the
Canadian Collateral Agent, for the benefit of the Secured Parties, forever;
subject, however, to the terms, covenants and conditions hereinafter set forth.
3. Security for the Canadian Obligations. This Agreement secures the full and
prompt payment when due (whether at stated maturity, by acceleration or
otherwise) of, and the performance of, all the Canadian Obligations. Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts that constitute part of the Canadian Obligations and would be owed
to the Canadian Collateral Agent or the Secured Parties under the Secured Debt
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, insolvency, reorganization or similar proceeding
involving any Canadian Pledgor.
4. Delivery of the Collateral and Filing.
(a) Each Canadian Pledgor represents and warrants that all certificates or
instruments, if any, representing or evidencing the Collateral in existence on
the date hereof have been delivered to the Canadian Collateral Agent (or its
non-fiduciary agent or designee) in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in blank;
provided that in no event shall any certificates, instruments or transfer of
stock powers be required with respect to the pledge of any Capital Stock of any
Foreign Subsidiary other than a Canadian Subsidiary. All certificates or
instruments, if any, representing or evidencing the Collateral acquired or
created after the date hereof shall be promptly (but in any event within thirty
days after acquisition or creation thereof) delivered to and held by or on
behalf of the Canadian Collateral Agent (or its non fiduciary agent or designee)
pursuant hereto and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed instruments of transfer or assignment in blank.
The Canadian Collateral Agent shall have the right, at any time after the
occurrence and during the continuation of an Event of Default and without notice
to any Canadian Pledgor (except as otherwise expressly provided herein), to
transfer to or to register in the name of the Canadian Collateral Agent or any
of its nominees any or all of the Pledged Shares. After the occurrence and
during the continuance of an Event of Default, each Canadian Pledgor will
promptly give to the Canadian Collateral Agent copies of any notices or other
communications received by it with respect to Pledged Shares registered in the
name of such Canadian Pledgor. After the occurrence and during the continuance
of an Event of Default, the Canadian Collateral Agent shall have the right to
exchange the certificates representing Pledged Shares for certificates of
smaller or larger denominations for any purpose consistent with this Agreement.
Each delivery of Collateral (including any After-acquired Shares and
After-acquired Debt) shall be accompanied by a schedule describing the
securities theretofore and then being pledged hereunder, which shall be attached
hereto as part of Schedule 2 and made a part hereof; provided that the failure
to attach any such schedule hereto shall not affect the validity of such pledge
of such securities. Each schedule so delivered shall supersede any prior
schedules so delivered.

 

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(b) Each Canadian Pledgor hereby irrevocably authorizes the Canadian Collateral
Agent at any time and from time to time to file in any relevant jurisdiction any
initial financing statements with respect to the Collateral or any part thereof
and amendments thereto and renewals thereof that contain the information
required by the PPSA for the filing of any financing statement or amendment or
renewal. Such financing statements may describe the Collateral in the same
manner as described herein or may contain an indication or description of
collateral that describes such property in any other manner such as “all assets”
or “all personal property, whether now owned or hereafter acquired” of such
Canadian Pledgor or words of similar effect as being of an equal or lesser scope
or with greater detail. Each Canadian Pledgor agrees to provide such information
to the Canadian Collateral Agent promptly after any such request. Each Canadian
Pledgor agrees to furnish the Canadian Collateral Agent with written notice as
required by Section 4.2 of the Canadian Security Agreement.
5. Representations and Warranties. Each Canadian Pledgor represents and warrants
to the Canadian Collateral Agent and each other Canadian Secured Party that:
(a) Schedule 2 hereto (i) correctly represents as of the date hereof (A) the
issuer, the issuer’s jurisdiction of formation, the certificate number, if any,
the Canadian Pledgor and the record and beneficial owner, the number and class
and the percentage of the issued and outstanding Capital Stock of such class of
all Pledged Shares and (B) the issuer, the issuer’s jurisdiction, the initial
principal amount, the Canadian Pledgor and holder, date of issuance and maturity
date of all Pledged Debt and (ii) together with the comparable schedule to each
supplement hereto, includes, all Capital Stock, debt securities and promissory
notes required to be pledged pursuant to Section 9.11 of the Credit Agreement
and Section 9(b) hereof. Except as set forth on Schedule 2 and except for
Excluded Capital Stock, the Pledged Shares represent all of the issued and
outstanding Capital Stock of each class of Capital Stock in the issuer on the
date hereof.
(b) Such Canadian Pledgor is the legal and beneficial owner of the Collateral
pledged or assigned by such Canadian Pledgor hereunder free and clear of any
Lien, except for the Liens created by this Agreement and the Credit Documents.
(c) As of the date of this Agreement, the Pledged Shares pledged by such
Canadian Pledgor hereunder have been duly authorized and validly issued and, in
the case of Pledged Shares issued by a corporation, are fully paid and
non-assessable.

 

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(d) Except for restrictions and limitations imposed by the Credit Documents or
securities laws generally and except as described in the Perfection Certificate,
the Collateral is freely transferable and assignable, and none of the Collateral
is subject to any option, right of first refusal, shareholders agreement,
charter or by-law provisions or contractual restriction of any nature that might
prohibit, impair, delay or otherwise affect the pledge of such Collateral
hereunder, the sale or disposition thereof pursuant hereto or the exercise by
the Canadian Collateral Agent of rights and remedies hereunder.
(e) No consent or approval of any Governmental Authority, any securities
exchange or any other Person was or is necessary to the validity of the pledge
effected hereby (other than such as have been obtained and are in full force and
effect).
(f) The execution and delivery by such Canadian Pledgor of this Agreement and
the pledge of the Collateral pledged by such Canadian Pledgor hereunder pursuant
hereto create a valid and enforceable security interest in such Collateral and
(i) in the case of certificates or instruments representing or evidencing the
Collateral, upon the earlier of (x) delivery of such Collateral and any
necessary endorsements to the extent necessary to the Canadian Collateral Agent
(or its non fiduciary agent or designee) in accordance with this Agreement and
(y) the filing of financing statements naming each Canadian Pledgor as ‘debtor”
and the Canadian Collateral Agent as “secured party” (in the applicable filing
offices, and (ii) in the case of all other Collateral which is capable of being
perfected by the filing of financing statements upon the filing of financing
statements naming each Canadian Pledgor as “debtor” and the Canadian Collateral
Agent as “secured party” and describing the Collateral in the applicable filing
offices, shall create a perfected first priority security interest in such
Collateral, securing the payment of the Canadian Obligations, in favor of the
Canadian Collateral Agent, for the benefit of the Secured Parties, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and
other similar laws relating to or affecting creditors’ rights generally and
general principles of equity (whether considered in a proceeding in equity or
law).
(g) The pledge effected hereby is effective to vest in the Canadian Collateral
Agent, for the benefit of the Secured Parties, the rights of the Canadian
Collateral Agent in the Collateral as set forth herein.
(h) Such Canadian Pledgor has full power, authority and legal right to pledge
all the Collateral pledged by such Canadian Pledgor pursuant to this Agreement
and this Agreement constitutes a legal, valid and binding obligation of such
Canadian Pledgor (in the case of the Capital Stock of Foreign Subsidiaries, to
the extent the creation of such security interest in the Capital Stock of
Foreign Subsidiaries other than a Subsidiary that is organized under the
Applicable Laws of a jurisdiction in Canada is governed by the PPSA),
enforceable in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization and other similar laws
relating to or affecting creditors’ rights generally and general principles of
equity (whether considered in a proceeding in equity or law).
(i) None of the Canadian Pledgors have any Subsidiaries as of the Closing Date
and the only partnership interests of any Canadian Pledgor as of the Closing
Date are listed on Schedule 2.

 

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(j) The Pledged Debt constitutes all of the outstanding Indebtedness for money
borrowed owed to such Canadian Pledgor as of the Closing Date and required to be
pledged hereunder or pursuant to Sections 6.2 and 9.11(a) of the Credit
Agreement. Such Pledged Debt that constitutes intercompany Indebtedness has been
duly authorized, authenticated or issued and delivered, is the legal, valid and
binding obligation of the issuers thereof, is evidenced by a Canadian
Intercompany Note (which note has been delivered to the Canadian Collateral
Agent (or is non fiduciary agent or designee)) and, as of the date of this
Agreement, is not in default.
6. Certification of Limited Partnership Interests and Pledged Debt.
(a) Unless otherwise consented to by the Canadian Collateral Agent, Capital
Stock required to be pledged hereunder in any Subsidiary that is organized as a
limited partnership and pledged hereunder shall either (i) be represented by a
certificate, and in the Organizational Documents of such Subsidiary the
applicable Canadian Pledgor shall cause the issuer of such interests to elect to
treat such interests as a “security” within the meaning of the STA of its
jurisdiction of organization or formation, as applicable, by including in its
organizational documents language substantially similar to the following and,
accordingly, such interests shall be governed by the STA:
“The [limited partnership] hereby irrevocably elects that all [limited
partnership] interests in the [limited partnership] shall be securities governed
by the STA of [jurisdiction of organization or formation, as applicable]. Each
certificate evidencing [limited partnership] interests in the [limited
partnership] shall be deemed to bear the following legend: “This certificate
evidences an interest in [name of [limited partnership]] and shall be a security
for purposes of the STA.” No change to this provision shall be effective until
all outstanding certificates have been surrendered for cancellation and any new
certificates thereafter issued shall not bear the foregoing legend.”
or (ii) not have elected to be treated as a “security” within the meaning of the
STA and shall not be represented by a certificate.
(b) Subject to the limitations set forth herein and in Section 9.11 of the
Credit Agreement, each Canadian Pledgor will cause any Indebtedness (i) for
borrowed money (other than intercompany Indebtedness) having an aggregate
principal amount in excess of $5,000,000 (individually) owed to it and required
to be pledged and delivered pursuant to the terms hereof and the Credit
Agreement to be evidenced by a duly executed promissory note, which shall be
accompanied by instruments of transfer with respect thereto endorsed in blank,
that is pledged and delivered to the Canadian Collateral Agent (or its non
fiduciary agent or designee) pursuant to the terms hereof and (ii) of each
Borrower and each of its Restricted Subsidiaries that is owing to any Canadian
Pledgor to be evidenced by the Canadian Intercompany Note, which shall be
accompanied by instruments of transfer with respect thereto endorsed in blank,
that is pledged and delivered to the Canadian Collateral Agent (or its
non-fiduciary agent or designee) pursuant to the terms hereof.

 

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7. Further Assurances. Subject to any limitations set forth in the Credit
Documents, each Canadian Pledgor agrees that at any time and from time to time,
at the expense of such Canadian Pledgor, it will execute or otherwise authorize
the filing of any and all further documents, financing statements, agreements
and instruments, and take all such further actions (including the filing and
recording of financing statements deeds of trust and other documents), which may
be required under any Applicable Law, or which the Canadian Collateral Agent may
reasonably request, in order (x) to perfect and protect any pledge, assignment
or security interest granted or purported to be granted hereby (including the
priority thereof) or (y) to enable the Canadian Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
8. Voting Rights; Dividends and Distributions; Etc.
(a) So long as no Event of Default shall have occurred and be continuing:
(i) Each Canadian Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Collateral or any part thereof for any
purpose not prohibited by the terms of this Agreement or the other Secured Debt
Documents; provided that such voting and other rights shall not be exercised in
any manner that could materially and adversely affect the rights inuring to a
holder of any Pledged Shares or the rights and remedies of any of the Canadian
Collateral Agent or the other Secured Parties under this Agreement, the Credit
Agreement or any other Credit Document or the ability of the Secured Parties to
exercise the same.
(ii) The Canadian Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to each Canadian Pledgor all such proxies and other
instruments as such Canadian Pledgor may reasonably request for the purpose of
enabling such Canadian Pledgor to exercise the voting and other rights that it
is entitled to exercise pursuant to paragraph (i) above.
(b) Subject to paragraph (c) below, each Canadian Pledgor shall be entitled to
receive and retain and use, free and clear of the Lien of this Agreement, any
and all dividends, distributions, redemptions, principal and interest made or
paid in respect of the Collateral to the extent not prohibited by any Secured
Debt Document; provided, however, that any and all noncash dividends, interest,
principal or other distributions that would constitute Pledged Shares or Pledged
Debt, whether resulting from a subdivision, combination or reclassification of
the outstanding Capital Stock of the issuer of any Pledged Shares or received in
exchange for Pledged Shares or Pledged Debt or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation, amalgamation,
acquisition or other exchange of assets to which such issuer may be a party or
otherwise, shall be, and shall be forthwith delivered to the Canadian Collateral
Agent to hold as, Collateral and shall, if received by such Canadian Pledgor, be
received in trust for the benefit of the Canadian Collateral Agent, be
segregated from the other property or funds of such Canadian Pledgor and be
forthwith delivered to the Canadian Collateral Agent as Collateral in the same
form as so received (with any necessary endorsement).

 

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(c) Upon written notice to the Canadian Pledgors by the Canadian Collateral
Agent following the occurrence and during the continuation of an Event of
Default:
(i) all rights of such Canadian Pledgor to exercise or refrain from exercising
the voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 8(a)(i) shall cease, and all such rights shall
thereupon become vested in the Canadian Collateral Agent, which shall thereupon
have the sole right to exercise or refrain from exercising such voting and other
consensual rights during the continuation of such Event of Default; provided
that, unless otherwise directed by the Required Lenders, the Canadian Collateral
Agent shall have the right from time to time following the occurrence and during
the continuation of an Event of Default to permit the Canadian Pledgors to
exercise such rights. After all Events of Default have been cured or waived or
otherwise cease to be continuing and the Company has delivered to the Canadian
Collateral Agent a certificate to that effect, each Canadian Pledgor will have
the right to exercise the voting and consensual rights that such Canadian
Pledgor would otherwise be entitled to exercise pursuant to the terms of
Section 8(a)(i) (and the obligations of the Canadian Collateral Agent under
Section 8(a)(ii) shall be reinstated);
(ii) all rights of such Canadian Pledgor to receive the dividends, distributions
and principal and interest payments that such Canadian Pledgor would otherwise
be authorized to receive and retain pursuant to Section 8(b) shall cease, and
all such rights shall thereupon become vested in the Canadian Collateral Agent,
which shall thereupon have the sole right to receive and hold as Collateral such
dividends, distributions and principal and interest payments during the
continuation of such Event of Default. After all Events of Default have been
cured or waived or otherwise cease to be continuing and the Company has
delivered to the Canadian Collateral Agent a certificate to that effect, the
Canadian Collateral Agent shall repay to each Canadian Pledgor (without
interest) and each Canadian Pledgor shall be entitled to receive, retain and use
all dividends, distributions and principal and interest payments that such
Canadian Pledgor would otherwise be permitted to receive, retain and use
pursuant to the terms of Section 8(b);
(iii) all dividends, distributions and principal and interest payments that are
received by such Canadian Pledgor contrary to the provisions of Section 8(b)
shall be received in trust for the benefit of the Canadian Collateral Agent,
shall be segregated from other property or funds of such Canadian Pledgor and
shall forthwith be delivered to the Canadian Collateral Agent as Collateral in
the same form as so received (with any necessary endorsements); and
(iv) in order to permit the Canadian Collateral Agent to receive all dividends,
distributions and principal and interest payments to which it may be entitled
under Section 8(b) above, to exercise the voting and other consensual rights
that it may be entitled to exercise pursuant to Section 8(c)(i), and to receive
all dividends, distributions and principal and interest payments that it may be
entitled to under Sections 8(c)(ii) and (c)(iii), such Canadian Pledgor shall
from time to time execute and deliver to the Canadian Collateral Agent,
appropriate proxies, dividend payment orders and other instruments as the
Canadian Collateral Agent may reasonably request.

 

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(d) Any notice given by the Canadian Collateral Agent to the Canadian Pledgors
suspending their rights under paragraph (c) of this Section 8 (i) may be given
by telephone if promptly confirmed in writing, (ii) may be given to one or more
of the Canadian Pledgors at the same or different times and (iii) may suspend
the rights of the Canadian Pledgors under paragraph (a)(i) or paragraph (b) of
this Section 9 in part without suspending all such rights (as specified by the
Canadian Collateral Agent in its sole and absolute discretion) and without
waiving or otherwise affecting the Canadian Collateral Agent’s rights to give
additional notices from time to time suspending other rights so long as an Event
of Default has occurred and is continuing.
9. Transfers and Other Liens; Additional Collateral; Etc. Each Canadian Pledgor
shall:
(a) not (i) except as expressly permitted by the Credit Agreement (including
pursuant to waivers and consents thereunder), sell or otherwise Dispose of, or
grant any option or warrant with respect to, any of the Collateral or
(ii) create or suffer to exist any consensual Lien upon or with respect to any
of the Collateral, except for the Lien created by this Agreement and the other
Security Documents; provided that in the event such Canadian Pledgor sells or
otherwise disposes of assets as permitted by the Credit Agreement (including
pursuant to waivers and consents thereunder) and such assets are or include any
of the Collateral, the Canadian Collateral Agent shall release such Collateral
to such Canadian Pledgor free and clear of the Lien created by this Agreement
concurrently with the consummation of such sale in accordance with Section 13.17
of the Credit Agreement and with Section 14 hereof;
(b) pledge and, if applicable, cause each Domestic Subsidiary required to become
a party hereto to pledge, to the Canadian Collateral Agent for the benefit of
the Secured Parties, immediately upon acquisition thereof, all After-acquired
Shares and After-acquired Debt required to be pledged pursuant to
Section 9.11(a) of the Credit Agreement, in each case pursuant to a supplement
to this Agreement substantially in the form of Annex A hereto or such other form
reasonably satisfactory to the Canadian Collateral Agent (it being understood
that the execution and delivery of such a supplement shall not require the
consent of any Canadian Pledgor hereunder and that the rights and obligations of
each Canadian Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Canadian Subsidiary Pledgor as a party
to this Agreement); and
(c) defend its and the Canadian Collateral Agent’s title or interest in and to
all the Collateral (and in the Proceeds thereof) against any and all Liens
(other than the Lien created by this Agreement), however arising, and any and
all Persons whomsoever and, subject to Section 13.17 of the Credit Agreement and
Section 14 hereof, to maintain and preserve the Lien and security interest
created by this Agreement until the Termination Date.
10. Canadian Collateral Agent Appointed Attorney-in-Fact. Each Canadian Pledgor
hereby appoints, which appointment is irrevocable and coupled with an interest,
the Canadian Collateral Agent as such Canadian Pledgor’s attorney-in-fact, with
full authority in the place and stead of such Canadian Pledgor and in the name
of such Canadian Pledgor or otherwise, to take any action and to execute any
instrument, in each case after the occurrence and during the continuation of an
Event of Default, that the Canadian Collateral Agent may deem reasonably
necessary or advisable to accomplish the purposes of this Agreement, including
to receive, endorse and collect all instruments made payable to such Canadian
Pledgor representing any dividend, distribution or principal or interest payment
in respect of the Collateral or any part thereof and to give full discharge for
the same.

 

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11. The Canadian Collateral Agent’s Duties. The powers conferred on the Canadian
Collateral Agent hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the safe custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Canadian Collateral Agent shall
have no duty as to any Collateral, as to ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Shares, whether or not the Canadian Collateral Agent or
any other Canadian Secured Party has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral. The Canadian
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which the Canadian Collateral
Agent accords its own property.
12. Remedies. If any Event of Default shall have occurred and be continuing:
(a) The Canadian Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
PPSA, any other statute or otherwise at law or in equity and also may without
notice, except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange broker’s board or
at any of the Canadian Collateral Agent’s offices or elsewhere, for cash, on
credit or for future delivery, at such price or prices and upon such other terms
as the Canadian Collateral Agent may deem commercially reasonable irrespective
of the impact of any such sales on the market price of the Collateral. The
Canadian Collateral Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers of
Collateral to Persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and, upon consummation of any such sale, the
Canadian Collateral Agent shall have the right to assign, transfer and deliver
to the purchaser or purchasers thereof the Collateral so sold. Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Canadian Pledgor, and each Canadian Pledgor hereby
waives (to the extent permitted by Applicable Law) all rights of redemption,
stay and/or appraisal that it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. The Canadian
Collateral Agent or any other Canadian Secured Party shall have the right upon
any such public sale, and, to the extent permitted by Applicable Law, upon any
such private sale, to purchase all or any part of the Collateral so sold, and
the Canadian Collateral Agent or such other Canadian Secured Party may, subject
to (x) the satisfaction in full of all payments due pursuant to Section 12(b)(i)
and (y) the ratable satisfaction of the Canadian Obligations in accordance

 

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with Section 12(b), pay the purchase price by crediting the amount thereof
against the Canadian Obligations. Each Canadian Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten days’ notice to
such Canadian Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
The Canadian Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Canadian
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. To
the extent permitted by Applicable Law, each Canadian Pledgor hereby waives any
claim against the Canadian Collateral Agent arising by reason of the fact that
the price at which any Collateral may have been sold at such a private sale was
less than the price that might have been obtained at a public sale, even if the
Canadian Collateral Agent accepts the first offer received and does not offer
such Collateral to more than one offeree. As an alternative to exercising the
power of sale herein conferred upon it, the Canadian Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver.
(b) The Canadian Collateral Agent shall apply the proceeds of any collection or
sale of the Collateral at any time after receipt in accordance with the priority
set forth in Section 5.4 of the Canadian Security Agreement;
Upon any sale of the Collateral by the Canadian Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Canadian Collateral Agent or of the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Collateral
so sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Canadian
Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
(c) The Canadian Collateral Agent may exercise any and all rights and remedies
of each Canadian Pledgor in respect of the Collateral.
(d) All payments received by any Canadian Pledgor after the occurrence and
during the continuation of an Event of Default in respect of the Collateral
shall be received in trust for the benefit of the Canadian Collateral Agent,
shall be segregated from other property or funds of such Canadian Pledgor and
shall be forthwith delivered to the Canadian Collateral Agent (or its non
fiduciary agent or designee) as Collateral in the same form as so received (with
any necessary endorsement).
(e) If the Canadian Collateral Agent shall determine to exercise its right to
sell all or any of the Pledged Shares pursuant to this Section 12, each Canadian
Pledgor recognizes that the Canadian Collateral Agent may be unable to effect a
public sale of any or all of the Pledged Shares, by reason of certain
prohibitions contained in the Securities Act of any applicable Canadian
jurisdiction, as from time to time amended (a “Securities Act”) or otherwise,
and may be compelled to resort to one or more

 

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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. Each
Canadian Pledgor acknowledges and agrees that any such private sale may result
in prices and other terms less favorable than if such sale were a public sale
and, notwithstanding such circumstances, agrees that any such private sale shall
be deemed to have been made in a commercially reasonable manner. The Canadian
Collateral Agent shall be under no obligation to delay a sale of any of the
Pledged Shares for the period of time necessary to permit the issuer thereof to
register such securities for public sale under any such Securities Act, or under
other applicable laws, even if such issuer would agree to do so.
(f) If the Canadian Collateral Agent determines to exercise its right to sell
any or all of the Collateral, upon written request, each Canadian Pledgor shall,
from time to time, furnish to the Canadian Collateral Agent all such information
as the Canadian Collateral Agent may request in order to determine the number of
shares and other instruments included in the Collateral which may be sold by the
Canadian Collateral Agent as exempt transactions under a Securities Act, as the
same are from time to time in effect.
(g) The Canadian Collateral Agent may seek the appointment of a receiver,
receiver-manager or keeper (a “Receiver”) under the laws of Canada or any
Province thereof to take possession of all or any portion of the Collateral of
the Canadian Pledgor or to operate same and, to the maximum extent permitted by
law, may seek the appointment of such a receiver without the requirement of
prior notice or a hearing. Any such Receiver shall, so far as concerns
responsibility for his/her acts, be deemed agent of the Canadian Pledgor and not
the Canadian Collateral Agent and the Secured Parties, and the Canadian
Collateral Agent and the Secured Parties shall not be in any way responsible for
any misconduct, negligence or non-feasance on the part of any such Receiver,
his/her servants or employees other than for gross negligence or wilful
misconduct. Subject to the provisions of the instrument appointing him/her, any
such Receiver shall have power to take possession of Collateral of the Canadian
Pledgor, to preserve Collateral of the Canadian Pledgor or its value, to carry
on or concur in carrying on all or any part of the business of the Canadian
Pledgor and to sell, lease, license or otherwise dispose of or concur in
selling, leasing, licensing or otherwise disposing of Collateral of the Canadian
Pledgor. To facilitate the forgoing powers, any such Receiver may, to the
exclusion of all others, including the Canadian Pledgor, enter upon, use and
occupy all premises owned or occupied by the Canadian Pledgor wherein Collateral
of the Canadian Pledgor may be situated, maintain Collateral of the Canadian
Pledgor upon such premises, borrow money on its own behalf or on behalf of the
Secured Parties on a secured or unsecured basis and use Collateral of the
Canadian Pledgor directly in carrying on the Canadian Pledgor’s business or as
security for loans or advances to enable the Receiver to carry on the Canadian
Pledgor’s business or otherwise, as such Receiver shall, in its discretion,
determine. Except as may be otherwise directed by Agent, all money received from
time to time by such Receiver in carrying out his/her appointment shall be
received in trust for and paid over to Agent. Every such Receiver may, in the
discretion of the Canadian Collateral Agent, be vested with all or any of the
rights and powers of the Canadian Collateral Agent and the Secured Parties. The
Canadian Collateral Agent may, either directly or through its nominees, exercise
any or all powers and rights given to a receiver by virtue of the foregoing
provisions of this paragraph.

 

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13. Amendments, etc. with Respect to the Canadian Obligations; Waiver of Rights.
Except for the termination of a Canadian Pledgor’s Canadian Obligations
hereunder as expressly provided in Section 14, each Canadian Pledgor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against any Canadian Pledgor and without notice to or further assent by
any Canadian Pledgor, (a) any demand for payment of any of the Canadian
Obligations made by the Canadian Collateral Agent or any other Canadian Secured
Party may be rescinded by such party and any of the Canadian Obligations
continued, (b) the Canadian Obligations, or the liability of any other party
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Canadian Collateral Agent or any other Canadian
Secured Party, (c) the Secured Debt Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, in accordance with the terms of the applicable
Secured Debt Document, and (d) any collateral security, guarantee or right of
offset at any time held by the Canadian Collateral Agent or any other Canadian
Secured Party for the payment of the Canadian Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Canadian Collateral
Agent nor any other Canadian Secured Party shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Canadian Obligations or for this Agreement or any property subject thereto. When
making any demand hereunder against any Canadian Pledgor, the Canadian
Collateral Agent or any other Canadian Secured Party may, but shall be under no
obligation to, make a similar demand on the Canadian Borrowers (to the extent
such demand is in respect of any Canadian Obligations owing by the Canadian
Borrowers) or any other Canadian Pledgor or pledgor, and any failure by the
Canadian Collateral Agent or any other Canadian Secured Party to make any such
demand or to collect any payments from the Canadian Borrowers or any other
Canadian Pledgor or pledgor or any release of the Canadian Borrowers or any
other Canadian Pledgor or pledgor shall not relieve any Canadian Pledgor in
respect of which a demand or collection is not made or any Canadian Pledgor not
so released of its several obligations or liabilities hereunder, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of
law, of the Canadian Collateral Agent or any other Canadian Secured Party
against any Canadian Pledgor. For the purposes hereof “demand” shall include the
commencement and continuation of any legal proceedings.
14. Continuing Security Interest; Assignments Under the Secured Debt Documents;
Release.
(a) This Agreement and the security interest granted hereunder shall remain in
full force and effect and be binding in accordance with and to the extent of its
terms upon each Canadian Pledgor and the successors and assigns thereof, and
shall inure to the benefit of the Canadian Collateral Agent and the other
Secured Parties and their respective successors, indorsees, transferees and
assigns, until the Termination Date, notwithstanding that from time to time
prior to the Termination Date the Canadian Pledgors may be free from any
Canadian Obligations.

 

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(b) A Canadian Subsidiary Pledgor shall automatically be released from its
obligations hereunder and the pledge of such Canadian Subsidiary Pledgor shall
be automatically released upon the consummation of any transaction permitted by
the Credit Agreement as a result of which such Canadian Subsidiary Pledgor
ceases to be a Restricted Foreign Subsidiary of the Canadian Borrowers or
otherwise becomes an Excluded Subsidiary; provided that the Required Lenders
shall have consented to such transaction (to the extent such consent is required
by the Credit Agreement) and the terms of such consent did not provide
otherwise.
(c) The obligations created hereby of any Canadian Pledgor with respect to the
Collateral shall be automatically released and such Collateral sold free and
clear of the Lien and security interests created hereby upon any Disposition by
such Canadian Pledgor of any Collateral that is (i) permitted under the Credit
Agreement (other than to the Company or any Canadian Subsidiary Pledgor) or,
(ii) upon the effectiveness of any written consent to the release of the
security interests granted hereby in any Collateral pursuant to Section 13.1 of
the Credit Agreement.
(d) In connection with any termination or release pursuant to paragraph (a),
(b) or (c), the Canadian Collateral Agent shall execute and deliver to any
Canadian Pledgor or authorize the filing of, at such Canadian Pledgor’s expense,
all documents that such Canadian Pledgor shall reasonably request to evidence
such termination or release provided, however, that with respect to the release
of any item of Collateral pursuant to Section 14(c)(i) in connection with any
request of evidence of termination or release made of the Canadian Collateral
Agent, the Canadian Collateral Agent may request that Canadian US Pledgor
deliver a certificate of an Authorized Officer to the effect that the sale or
transfer transaction is in compliance with the Credit Documents. Any execution
and delivery of documents pursuant to this Section 14 shall be without recourse
to or warranty by the Canadian Collateral Agent.
15. Reinstatement. This Agreement shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Canadian Obligations is rescinded or must otherwise be restored or
returned by the Canadian Collateral Agent or any other Canadian Secured Party
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
either Canadian Borrower or any other Canadian Pledgor, or upon or as a result
of the appointment of a receiver, intervenor receiver and manager, or
conservator of, or trustee or similar officer for, the Canadian Borrowers or any
other Canadian Pledgor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
16. Notices. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 13.2 of the Credit Agreement. All communications and
notices hereunder to any Canadian Subsidiary Pledgor shall be given to it in
care of the Company at the Company’s address set forth in Section 13.2 of the
Credit Agreement.
17. Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile
or other electronic transmission (i.e., a “pdf” or “tif” file)), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Canadian Collateral Agent and the Company.

 

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18. Severability. Any provision of this Agreement that 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. The parties hereto shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
19. Integration. This Agreement represents the agreement of each of the Canadian
Pledgors with respect to the subject matter hereof and there are no promises,
undertakings, representations or warranties by the Canadian Collateral Agent or
any other Canadian Secured Party relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Secured Debt
Documents.
20. Amendments in Writing; No Waiver; Cumulative Remedies.
(a) 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 affected Canadian Pledgor(s) and the Canadian Collateral Agent in accordance
with Section 13.1 of the Credit Agreement.
(b) Neither the Canadian Collateral Agent nor any other Canadian Secured Party
shall by any act (except by a written instrument pursuant to Section 20(a)
hereof), 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 or in any breach of any of the terms and conditions hereof. No failure
to exercise, nor any delay in exercising, on the part of the Canadian Collateral
Agent or any other Canadian 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 Canadian Secured Party of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy that the Canadian Collateral Agent or such other
Canadian Secured Party would otherwise have on any future occasion.
(c) The rights, remedies, powers and privileges herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
21. 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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22. Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that no Canadian Pledgor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Canadian Collateral Agent, except pursuant to a
transaction expressly permitted by the Credit Agreement.
23. 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, ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
24. Submission to Jurisdiction; Waivers. Each of the Canadian Pledgors hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement, and the other Credit Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive jurisdiction of a court of competent jurisdiction in 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 Canadian Pledgor
at its address referred to in Section 16 or at such other address of which the
Canadian Collateral Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right of the Canadian Collateral
Agent or any other Canadian Secured Party to effect service of process in any
other manner permitted by law or shall limit the right of the Canadian
Collateral Agent or any other Canadian Secured Party to sue 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 24 any special, exemplary, punitive or consequential damages.
25. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA
APPLICABLE THEREIN.
[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written.

            ASSOCIATED MATERIALS CANADA
LIMITED, as a Canadian Pledgor
      By:   /s/ David S. Brown         Name:   David S. Brown        Title:  
President, Secretary        GENTEK CANADA HOLDINGS LIMITED, as
a Canadian Pledgor
      By:           Name:           Title:      

[Canadian Pledge Agreement]

 

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written.

            ASSOCIATED MATERIALS CANADA
LIMITED, as a Canadian Pledgor
      By:           Name:           Title:           GENTEK CANADA HOLDINGS
LIMITED, as
a Canadian Pledgor
      By:   /s/ Vicki Hardman         Name:   VICKI HARDMAN        Title:   VICE
PRESIDENT   

[Canadian Pledge Agreement]

 

 

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            GENTEK BUILDING PRODUCTS LIMITED
PARTNERSHIP, by its general partner
GENTEK CANADA HOLDINGS LIMITED, as a
Canadian Pledgor
      By:   /s/ Vicki Hardman         Name:   VICKI HARDMAN        Title:   VICE
PRESIDENT   

[Canadian Pledge Agreement]

 

 

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            UBS AG CANADA BRANCH,
as Canadian Collateral Agent
      By:   /s/ Mary E. Evans         Name:   Mary E. Evans        Title:  
Associate Director Banking Products Services. US        By:   /s/ Irja R. Otsa  
      Name:   Irja R. Otsa        Title:   Associate Director Banking Products
Services. US   

[Canadian Pledge Agreement]

 

 

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SCHEDULE 1
TO THE CANADIAN
PLEDGE AGREEMENT
CANADIAN SUBSIDIARY PLEDGORS

 

 

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SCHEDULE 2
TO THE CANADIAN
PLEDGE AGREEMENT
PLEDGED SHARES AND PLEDGED DEBT
Pledged Shares1

                                              Issuer’s   Class of   Certificate
            Percentage of           jurisdiction   Equity   No(s), if     Number
of     Issued and   Pledgor   Issuer   of formation   Interest   any     Units  
  Outstanding Units  
Gentek Canada
Holdings Limited
  Gentek Building
Products Limited
Partnership   Ontario   Partnership Unit     1       1       0.1 %
Associated
Materials Canada
Limited
  Gentek Building
Products Limited
Partnership   Ontario   Partnership Unit     2       1       0.1 %
Associated
Materials Canada
Limited
  Gentek Building
Products Limited
Partnership   Ontario   Partnership Unit     3       998       99.8 %

Pledged Debt

                                  Issuer’s   Initial                  
jurisdiction   Principle     Date of   Maturity Pledgor   Issuer   of formation
  Amount     Issuance   Date
Gentek Building
Products Limited
Partnership
  Gentek Building Products, Inc.   Delaware   $ 44,500,000     October 13, 2010
  Termination Date

 

      1  
The Pledged Shares of the Canadian Pledgors included in this Schedule 2
represent unit certificates outstanding as of the date hereof. However,
immediately after the Closing (as defined in the Credit Agreement) these
outstanding unit certificates will be cancelled (on account of being lost) and
subsequently reissued with replacement share certificates within the time period
required by Schedule 9.17 to the Credit Agreement.

 

 

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ANNEX A
TO THE
CANADIAN PLEDGE AGREEMENT
SUPPLEMENT NO. [_____], dated as of [                                        ]
(this “Supplement), to the Canadian Pledge Agreement dated as of October 13,
2010 (the “Canadian Pledge Agreement”), by ASSOCIATED MATERIALS CANADA LIMITED
(“Associated”), an Ontario Corporation, GENTEK CANADA HOLDINGS LIMITED
(“Gentek”), an Ontario Corporation and GENTEK BUILDING PRODUCTS LIMITED
PARTNERSHIP, an Ontario limited partnership, by its general partner, Gentek
(“LP”), each of the subsidiaries listed on Schedule 1 thereto (each such
subsidiary, individually, a “Canadian Subsidiary Pledgor” and, collectively the
“Canadian Subsidiary Pledgors”; and, together with Associated, Gentek and LP,
the “Canadian Pledgors”), and UBS AG CANADA BRANCH, as Canadian Collateral Agent
for the Secured Parties (as defined below) (in such capacity, together with its
successors in such capacity, the “Canadian Collateral Agent”).
A. Reference is made to (a) Revolving Credit Agreement, dated as of October 13,
2010 (the “Credit Agreement”), among CAREY INTERMEDIATE HOLDINGS CORP., a
Delaware corporation, the US Borrowers, the Canadian Borrowers, the bank,
financial institutions and other institutional lenders and investors (each
individually a “Lender” and, collectively, the “Lenders”), UBS AG, STAMFORD
BRANCH, as US Administrative Agent, US Collateral Agent, and a US Letter of
Credit Issuer and a Canadian Letter of Credit Issuer, UBS AG CANADA BRANCH, as
Canadian Administrative Agent and Canadian Collateral Agent, WELLS FARGO CAPITAL
FINANCE, LLC, as Co-Collateral Agent, DEUTSCHE BANK AG NEW YORK BRANCH, as a US
Letter of Credit Issuer, DEUTSCHE BANK AG CANADA BRANCH, as a Canadian Letter of
Credit Issuer, WELLS FARGO BANK, NATIONAL ASSOCIATION as a US Letter of Credit
Issuer and a Canadian Letter of Credit Issuer and UBS LOAN FINANCE LLC, as
Swingline Lender, and (b) the Canadian Guarantee, dated as of October 13, 2010
(the “Canadian Guarantee”), among the Canadian guarantors party thereto and the
Canadian Collateral Agent.
B. Capitalized terms used herein and not otherwise defined herein (including in
the preamble and the recitals hereto) shall have the meanings assigned to such
terms in the Canadian Pledge Agreement. The rules of construction and the
interpretive provisions specified in Section 1(b) of the Canadian Pledge
Agreement shall apply to this Supplement, including terms defined in the
preamble and recitals hereto.
C. The Canadian Pledgors have entered into the Canadian Pledge Agreement in
order to induce the Agents and the Canadian Lenders and the Canadian Letter of
Credit Issuers to enter into the Credit Agreement and to (a) induce the Canadian
Lenders and the Canadian Letter of Credit Issuers to make their respective
Extensions of Credit to the Canadian Borrowers under the Credit Agreement,
(b) induce one or more Cash Management Banks to provide Cash Management Services
pursuant to Secured Cash Management Agreements to any Credit Party or a
Restricted Subsidiary and (c) to induce one or more Hedge Banks to enter into
Secured Hedging Agreements with each Credit Party or a Restricted Subsidiary.

 

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D. The undersigned Canadian Pledgor (each, an “Additional Canadian Pledgor”) is
(a) the legal and beneficial owner of the Capital Stock described under
Schedule 1 hereto and issued by the entities named therein (such pledged Capital
Stock, together with all other Capital Stock required to be pledged under the
Pledge Agreement (the “After-acquired Additional Pledged Shares”), referred to
collectively herein as the “Additional Pledged Shares”) and (b) the legal and
beneficial owner of the promissory notes and instruments evidencing Indebtedness
owed to it (the “Additional Pledged Debt”) described under Schedule 1 hereto.
E. Section 9.11(a) of the Credit Agreement and Section 9(b) of the Canadian
Pledge Agreement provides that additional Subsidiaries of the [Company] Canadian
Borrower may become Canadian Subsidiary Pledgors under the Canadian Pledge
Agreement by execution and delivery of an instrument in the form of this
Supplement. Each undersigned Additional Canadian Pledgor is executing this
Supplement in accordance with the requirements of Section 9(b) of the Canadian
Pledge Agreement to pledge to the Canadian Collateral Agent, for the benefit of
the Secured Parties, the Additional Pledged Shares and the Additional Pledged
Debt [and to become a Canadian Subsidiary Pledgor under the Canadian Pledge
Agreement] in order to induce the Canadian Lenders and the [Canadian] Letter of
Credit Issuers to make additional extensions of credit to the Borrowers under
the Credit Agreement, to induce one or more Cash Management Banks to provide
Cash Management Services pursuant to Secured Cash Management Agreements to any
Credit Party and to induce one or more Hedge Banks to enter into Secured Hedging
Agreements with any Credit Party and as consideration for extensions of credit
previously made, Cash Management Services previously provided, and Secured
Hedging Agreements previously entered into.
Accordingly, the Canadian Collateral Agent and each undersigned Additional
Canadian Pledgor agree as follows:
SECTION 1. In accordance with Section 9(b) of the Canadian Pledge Agreement,
each Additional Canadian Pledgor by its signature below hereby transfers,
assigns and pledges to the Canadian Collateral Agent, for the benefit of the
Secured Parties, and hereby grants to the Canadian Collateral Agent, for the
benefit of the Secured Parties, a security interest in and to all of such
Additional Canadian Pledgor’s right, title and interest in the following,
whether now owned or anytime hereafter acquired or existing (collectively, the
“Additional Collateral”):
(a) the Additional Pledged Shares held by such Additional Canadian Pledgor and
the certificates, if any, representing such Additional Pledged Shares and any
interest of such Additional Canadian Pledgor, including all interests documented
in the entries on the books of the issuer of the Additional Pledged Shares or
any financial intermediary pertaining to the Additional Pledged Shares and all
dividends, cash, warrants, rights, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Additional Pledged Shares; provided that the
Additional Pledged Shares under this Supplement shall not include any Excluded
Capital Stock;
(b) the Additional Pledged Debt and the instruments evidencing the Additional
Pledged Debt owed to such Additional Canadian Pledgor, and all payments of
principal or interest, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Additional Pledged Debt;

 

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(c) all other property that may be delivered to and held by the Canadian
Collateral Agent pursuant to the terms of this Section 1;
(d) subject to Section 8 of the Canadian Pledge Agreement, all rights and
privileges of such Canadian Pledgor with respect to the securities and other
property referred to in clauses (a), (b) and (c) above; and
(e) to the extent not covered by clauses (a), (b), (c) and (d) above,
respectively, all proceeds of any or all of the foregoing Additional Collateral.
For purposes of this Supplement, the term “proceeds” includes whatever is
receivable or received when Additional Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes proceeds of any indemnity or guarantee
payable to any Additional Canadian Pledgor or the Canadian Collateral Agent from
time to time with respect to any of the Additional Collateral.
TO HAVE AND TO HOLD the Additional Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Canadian Collateral Agent, for the benefit of the Secured Parties,
forever; subject, however, to the terms, covenants and conditions hereinafter
set forth.
For purposes of the Canadian Pledge Agreement, (x) the Collateral shall be
deemed to include the Additional Collateral and (y) the After-acquired Pledged
Shares shall be deemed to include the Additional After-acquired Pledge Shares.
[SECTION 2. Each Additional Canadian Pledgor by its signature below becomes a
Canadian Pledgor under the Canadian Pledge Agreement with the same force and
effect as if originally named therein as a Canadian Pledgor and each Additional
Canadian Pledgor hereby agrees to all the terms and provisions of the Canadian
Pledge Agreement applicable to it as a Canadian Pledgor thereunder. Each
reference to a “Canadian Subsidiary Pledgor” or a “Canadian Pledgor” in the
Canadian Pledge Agreement shall be deemed to include each Additional Canadian
Pledgor. The Canadian Pledge Agreement is hereby incorporated herein by
reference.] 2
SECTION [2][3]. Each Additional Canadian Pledgor represents and warrants as
follows:
(a) Schedule 1 hereto (i) correctly represents as of the date hereof (A) the
issuer, the certificate number, if any, the Additional Canadian Pledgor and the
record and beneficial owner, the number and class and the percentage of the
issued and outstanding Capital Stock of such class of all Additional Pledged
Shares and (B) the issuer, the initial principal amount, the Additional Canadian
Pledgor and holder, date of issuance and maturity date of all Additional Pledged
Debt and (ii) together with Schedule 2 to the Canadian Pledge Agreement and the
comparable schedules to each other Supplement to the Canadian Pledge Agreement,
includes all Capital Stock, debt securities and promissory notes required to be
pledged pursuant to Section 9.11 of the Credit Agreement and Section 9(b) of the
Canadian Pledge Agreement. Except as set forth on Schedule 1 and except for
Excluded Capital Stock, the Additional Pledged Shares represent all of the
issued and outstanding Capital Stock of each class of Capital Stock in the
issuer on the date hereof.
 

      2  
Include only for Additional Pledgors that are not already signatories to the
Canadian Pledge Agreement.

 

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(b) Such Additional Canadian Pledgor is the legal and beneficial owner of the
Additional Collateral pledged or assigned by such Additional Canadian Pledgor
hereunder free and clear of any Lien, except for the Liens created by this
Supplement to the Canadian Pledge Agreement and Liens created by the Canadian
Pledge Agreement.
(c) As of the date of this Supplement, the Additional Pledged Shares pledged by
such Additional Canadian Pledgor hereunder have been duly authorized and validly
issued and, in the case of Additional Pledged Shares issued by a corporation,
are fully paid and non-assessable.
(d) Except for restrictions and limitations imposed by the Credit Documents or
securities laws generally, and except as disclosed on Schedule 1, the Additional
Collateral is freely transferable and assignable, and none of the Additional
Collateral is subject to any option, right of first refusal, shareholders
agreement, charter or by-law provisions or contractual restriction of any nature
that might prohibit, impair, delay or otherwise affect the pledge of such
Additional Collateral hereunder, the sale or disposition thereof pursuant hereto
or the exercise by the Canadian Collateral Agent of rights and remedies
hereunder.
(e) No consent or approval of any Governmental Authority, any securities
exchange or any other Person was or is necessary to the validity of the pledge
effected hereby (other than such as have been obtained and are in full force and
effect).
(f) The execution and delivery by such Additional Canadian Pledgor of this
Supplement and the pledge of the Additional Collateral pledged by such
Additional Canadian Pledgor hereunder pursuant hereto create a valid and
enforceable security interest in such Collateral (in the case of the Capital
Stock of Foreign Subsidiaries other than a Subsidiary that is organized under
the Applicable Laws of a jurisdiction in Canada, to the extent the creation of
such security interest in the Capital Stock of Foreign Subsidiaries is governed
by the PPSA) and (i) in the case of certificates or instruments representing or
evidencing the Additional Collateral, upon the earlier of (x) delivery of such
Additional Collateral and any necessary endorsements to the extent necessary to
the Canadian Collateral Agent (or its non-fiduciary agent or designee) in
accordance with this Supplement and the Canadian Pledge Agreement and (y) the
filing of financing statements naming each Additional US Pledgor as “debtor” and
the Canadian Collateral Agent as “secured party” and describing the Additional
Collateral in the applicable filing offices, and (ii) in the case of all other
Additional Collateral which is capable of being perfected by the filing of
financing statements, upon the

 

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filing of financing statements naming each Canadian Pledgor as “debtor” and the
Canadian Collateral Agent as “secured party” and describing the Additional
Collateral in the applicable filing offices, shall create a perfected security
interest in such Additional Collateral (in the case of the Capital Stock of
Foreign Subsidiaries other than a Subsidiary that is organized under the
Applicable Laws of a jurisdiction in Canada is governed by the PPSA, to the
extent the creation of such security interest in the Capital Stock of Foreign
Subsidiaries other than a Subsidiary that is organized under the Applicable Laws
of a jurisdiction in Canada is governed by the PPSA), securing the payment of
the Canadian Obligations, in favor of the Canadian Collateral Agent, for the
benefit of the Secured Parties, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization and other similar laws
relating to or affecting creditors rights generally and general principles of
equity (whether considered in a proceeding in equity or law).
(g) The pledge effected hereby is effective to vest in the Canadian Collateral
Agent, for the benefit of the Secured Parties, the rights of the Canadian
Collateral Agent in the Additional Collateral as set forth herein.
(h) Such Additional Canadian Pledgor has full power, authority and legal right
to pledge all the Additional Collateral pledged by such Additional Canadian
Pledgor pursuant to this Supplement and this Supplement constitutes a legal,
valid and binding obligation of each Additional Canadian Pledgor (in the case of
the Capital Stock of Foreign Subsidiaries other than a Subsidiary that is
organized under the Applicable Laws of a jurisdiction in Canada, to the extent
the creation of such security interest in the Capital Stock of Foreign
Subsidiaries is governed by the PPSA or STA), enforceable in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting creditors rights
generally and general principles of equity (whether considered in a proceeding
in equity or law).
SECTION [3][4]. This Supplement may be executed by one or more of the parties to
this Supplement on any number of separate counterparts (including by facsimile
or other electronic transmission (i.e., a “pdf” or “tif”)), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Supplement signed by all the parties
shall be lodged with the Canadian Collateral Agent and the Company. This
Supplement shall become effective as to each Additional Canadian Pledgor when
the Canadian Collateral Agent shall have received counterparts of this
Supplement that, when taken together, bear the signatures of such Additional
Canadian Pledgor and the Canadian Collateral Agent.
SECTION [4][5]. Except as expressly supplemented hereby, the Canadian Pledge
Agreement shall remain in full force and effect.
SECTION [5][6]. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA
APPLICABLE THEREIN.

 

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SECTION [6][7]. Any provision of this Supplement that 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 in the Canadian Pledge Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION [7][8]. All notices, requests and demands pursuant hereto shall be made
in accordance with Section 16 of the Canadian Pledge Agreement. All
communications and notices hereunder to each Additional Canadian Pledgor shall
be given to it in care of the Company at the Company’s address set forth in
Section 13.2 of the Credit Agreement.
SECTION [8][9]. Subject to Section 13.5 of the Credit Agreement, each Additional
Canadian Pledgor agrees to reimburse the Canadian Collateral Agent for its
reasonable and documented out-of-pocket expenses in connection with this
Supplement, including the reasonable and documented fees, other charges and
disbursements of counsel for the Canadian Collateral Agent.

 

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IN WITNESS WHEREOF, each Additional Pledgor and the Canadian Collateral Agent
have duly executed this Supplement to the Canadian Pledge Agreement as of the
day and year first above written.

            [NAME OF ADDITIONAL CANADIAN PLEDGOR(S)],
      By:           Name:           Title:           UBS AG CANADIAN BRANCH,
as Canadian Collateral Agent,
      By:           Name:           Title:      

 

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SCHEDULE 1
TO SUPPLEMENT NO. [__]
TO THE
CANADIAN PLEDGE AGREEMENT
PLEDGED SHARES AND PLEDGED DEBT
Pledged Shares

                                  Issuer’s               Percentage of        
jurisdiction               Issued and         of   Class of Equity   Certificate
  Number of   Outstanding Pledgor   Issuer   formation   Interest   No(s), if
any   Units   Units
 
                       

Pledged Debt

                              Issuer’s                     jurisdiction of  
Initial         Pledgor   Issuer   formation   Principal Amount   Date of
Issuance   Maturity Date