Exhibit 10.71

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   Security Agreement

 

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As of May 19, 2006, for value received, TECSTAR MANUFACTURING CANADA LIMITED, a
Nova Scotia limited company (“Company”) grants to COMERICA BANK, a Michigan
banking corporation and an authorized foreign bank under the Bank Act (Canada),
as Agent for the Banks (as defined below) (in such capacity the “Agent”), by way
of mortgage, charge and transfer, a continuing security interest in all present
and after acquired personal property and undertaking of Company including,
without limitation, the Collateral (as defined below) on the terms set out in
this Security Agreement (as amended, restated, supplemented or otherwise
modified from time to time, this “Agreement”) to secure payment when due,
whether by stated maturity, demand, acceleration or otherwise, of all existing
and future indebtedness of Company to the Agent and the Banks (“Indebtedness”).
“Banks” shall mean the lenders from time to time party to the Second Amended and
Restated Credit Agreement dated as of May 19, 2006 by and among Tecstar
Automotive Group, Inc. (“Borrower”), the Agent and such lenders (as amended,
modified or amended and restated from time to time). Indebtedness includes,
without limitation, any and all obligations and liabilities of Company to the
Agent and the Banks, whether absolute or contingent, direct or indirect,
voluntary or involuntary, liquidated or unliquidated, joint or several, known or
unknown, as principal or surety; any and all obligations or liabilities for
which Company would otherwise be liable to the Agent and the Banks were it not
for the invalidity or unenforceability of them by reason of any bankruptcy,
insolvency or other law, or for any other reason; any and all amendments,
modifications, renewals and/or extensions of any of the above; all costs and
expenses incurred by Agent and the Banks in establishing, determining,
continuing, or defending the validity or priority of its security interest, or
in pursuing its rights and remedies under this Agreement or under any other
agreement between Agent and the Banks and Company or made of by Company in
favour of Bank or in connection with any proceeding involving the Agent and the
Banks as a result of any financial accommodation to Company; and all other costs
and expenses of collecting Indebtedness including, without limitation, legal
fees. Company agrees to pay Agent all such costs and expenses incurred by Agent
and the Banks, immediately upon demand and, until paid, all costs and expenses
shall bear interest at the highest per annum rate applicable to any of the
Indebtedness, but not in excess of the maximum rate permitted by law. Any
reference in this Agreement to legal fees shall be deemed a reference to
solicitor and client costs, fees, costs and expenses of both in-house and
outside counsel and paralegals, whether or not a suit or action is instituted,
and to court costs if a suit or action is instituted, and whether legal fees or
court costs are incurred at the trial court level, on appeal, in a bankruptcy,
administrative or probate proceeding or otherwise.

 

SECTION 1. COLLATERAL

 

1.1

Collateral shall include all of the present and after acquired personal property
and undertaking of Company, wherever located, including without limitation all
Goods (including all parts, accessories, attachments, special tools, additions
and Accessions thereto), Chattel Paper, Money, Documents of Title (whether
negotiable or not), Instruments, Intangibles and Securities now owned or
hereafter owned or acquired by or on behalf of Company (including such as may be
returned to or repossessed by Company) and in all Proceeds and renewals thereof,
accretions thereto and substitutions

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therefor including, without limitation, all of the following now owned or
hereafter owned or acquired by or on behalf of Company:

 

  (1) all Inventory of whatever kind and wherever situate,

 

  (2) all Equipment of whatever kind and wherever situate including, without
limitation, all machinery, tools, apparatus, plant, furniture, fixtures and
vehicles of whatsoever nature or kind,

 

  (3) all claims, book accounts and book debts and generally all accounts,
debts, dues, claims, choses in action and demands of every nature and kind
howsoever arising or secured including letters of credit and advices of credit
which are now due, owing or accruing or growing due to or owned by or which may
hereafter become due, owing or accruing or growing due to or owned by Company
(“Debts”),

 

  (4) all deeds, documents, writings, papers, ledgers, books of account,
records, computer printouts, microfilm, microfiche and other computer prepared
information and other books relating to or being evidence or records of Debts,
Chattel Paper or Documents of Title or by which such are or may hereafter be
secured, evidenced, acknowledged or made payable,

 

  (5) all contractual rights and insurance claims and all goodwill;

 

  (6) all patents, industrial designs, trade-marks, trade secrets and know-how
including without limitation environmental technology and biotechnology,
confidential information, trade-names, goodwill, copyrights, personality rights,
plant breeders’ rights, integrated circuit topographies, software and all other
forms of intellectual and industrial property, and any registrations and
applications for registration of any of the foregoing (collectively
“Intellectual Property”); and

 

  (7) specific items listed below and/or on attached Schedule “A”, if any,
is/are also included in Collateral:

 

 

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(as used in this Agreement, all of the foregoing, the “Collateral”)

 

1.2 The security interest granted hereby shall not extend or apply to, and
Collateral shall not include, the last day of the term of any lease or agreement
therefor but upon the enforcement of the security interest Company shall stand
possessed of such last day in trust and assign the same to any person acquiring
such term.

 

1.3

The terms “Goods”, “Chattel Paper”, “Money”, “Document of Title”, “Equipment”,
“Consumer Goods”, “Instrument”, “Intangible”, “Security”, “Proceeds”,
“Inventory”, and

 

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“Accessions” whenever used herein shall be interpreted pursuant to their
respective meanings ascribed to them in the Personal Property Security Act
(Ontario), as amended from time to time, which Act, including amendments thereto
and any Act substituted therefor and amendments thereto is herein referred to as
the “PPSA.” Provided always that the term “Goods” when used herein shall not
include Consumer Goods of Company. Any reference herein to “Collateral” shall,
unless the context otherwise requires, be deemed a reference to “Collateral or
any part thereof’. The term “Proceeds” whenever used herein and interpreted as
above shall by way of example include trade-ins, Equipment, cash, bank accounts,
notes, Chattel Paper, Goods, contract rights, accounts and any other personal
property or obligation received when such Collateral or Proceeds are sold,
exchanged, collected or otherwise disposed of.

 

SECTION 2. WARRANTIES, COVENANTS AND AGREEMENTS

 

2.1 Company shall furnish to Agent, in form and at intervals as Agent may
request, any information Agent may reasonably request and allow Agent to
examine, inspect, and copy any of Company’s books and records. Company shall, at
the request of Agent, mark its records and the Collateral to clearly indicate
the security interest of Agent under this Agreement.

 

2.2 At the time any Collateral becomes, or is represented to be, subject to a
security interest in favour of Agent, Company shall be deemed to have warranted
that (a) Company is the lawful owner of the Collateral and has the right and
authority to subject it to a security interest granted to Bank; (b) none of the
Collateral is subject to any security interest other than that in favour of
Bank, and encumbrances listed on Schedule “B” (the “Encumbrances”) and there are
no financing statements on file, other than those in favour of Agent, and those
filed with respect to the Encumbrances; (c) no person, other than Bank, has
possession or control of any Collateral of such nature that perfection of a
security interest may be accomplished by possession; and (d) Company acquired
its rights in the Collateral in the ordinary course of its business.

 

2.3 All Intellectual Property applications and registrations are valid and in
good standing and Company is the owner of the applications and registrations.

 

2.4 Company will keep the Collateral free at all times from all claims, liens,
security interests and encumbrances other than those in favour of Agent and the
Encumbrances. Except as expressly permitted under the Loan Agreement dated
April 30, 2003 between Company and Comerica Bank (as amended, modified or
amended and restated from time to time, the “Loan Agreement”), Company will not,
without the prior written consent of Agent, sell, transfer or lease, or permit
to be sold, transferred or leased, any or all of the Collateral, except for
Inventory in the ordinary course of its business and will not return any
Inventory to its supplier. Agent and its representatives may at all reasonable
times inspect the Collateral and may enter upon all premises where the
Collateral is kept or might be located.

 

2.5

Company will do all acts and will execute or cause to be executed all writings
requested by Agent to establish, maintain and continue a perfected and security
interest of first

 

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priority of Agent in the Collateral. Company agrees that Agent has no obligation
to acquire or perfect any lien on or security interest in any asset(s), whether
realty or personalty, to secure payment of the Indebtedness, and Company is not
relying upon assets in which Agent may have a lien or security interest for
payment of the Indebtedness.

 

2.6 Company shall obtain the written consent of Agent prior to Company changing
the location of its chief executive office, its principal place of business, its
domicile (within the meaning of the Civil Code of Quebec) or its books and
records, acquiring any new such locations, or keeping, maintaining or storing
any Collateral at any location other than the locations identified in
Section 5.18 below. Upon obtaining the written consent of Agent and before
changing any such location or acquiring another such location (whether by
purchase, lease or otherwise), Company shall provide Agent with such financing
statements, charges, assignments, hypothecs, security interests, security
agreements, landlord agreements, warehouseman/bailee agreements and other
agreements and legal opinions as Bank may reasonably require in order to assure
and maintain the Agent’s first priority, perfected security interest on the
Collateral.

 

2.7 Company will deliver to Agent from time to time promptly upon request any
Documents of Title, Instruments, Securities and Chattel Paper constituting,
representing or relating to Collateral for the purpose of protecting the
security interest or the priority of such security of Agent in any such
Documents of Title, Instruments, Securities or Chattel Paper.

 

2.8 Company will pay within the time that they are to be paid without interest
or penalty all taxes, assessments and similar charges which at any time are or
may become a lien, charge, or encumbrance upon any Collateral, except to the
extent contested in good faith and, if required by Agent, bonded in a manner
satisfactory to Agent. If Company fails to pay any of these taxes, assessments,
or other charges in the time provided above, Bank has the option (but not the
obligation) to do so and Company agrees to repay all amounts so expended by
Agent immediately upon demand therefor, together with interest thereon at the
highest per annum rate applicable to any of the Indebtedness, but not in excess
of the maximum rate permitted by law.

 

2.9

Company will keep the Collateral in good condition and will protect it from
loss, damage, and deterioration from any cause. Company has and will maintain at
all times (a) with respect to the Collateral, insurance under an “all risk”
policy against fire and other risks customarily insured against, and (b) public
liability insurance and other insurance as may be required by law or reasonably
required by Agent, all of which insurance shall be in amount, form and content,
and written by companies as may be satisfactory to Bank, containing a lender’s
loss payable endorsement acceptable to Agent, showing Bank as additional insured
and specifying that the insurer must give at least twenty (20) days notice to
Agent before changing or cancelling it policy for any reason. Company will
deliver to Agent immediately upon demand evidence satisfactory to Agent that the
required insurance has been procured. If Company fails to maintain satisfactory
insurance, Agent has the option (but not the obligation) to do so and Company
agrees to repay all amounts so expended by Agent immediately upon demand,
together with

 

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interest at the highest lawful default rate which could be charged by the Agent
on any Indebtedness.

 

2.10 On each occasion on which Company evidences to Agent the account balances
on and the nature and extent of the Accounts Receivable (“Accounts Receivable”
consists of all accounts, intangibles, chattel paper, contract rights, deposit
accounts, documents and instruments), Company shall be deemed to have warranted
that except as otherwise indicated by Company (a) each of those Accounts
Receivable is valid and enforceable without performance by Company of any other
act; (b) each of those account balances are in fact owing, (c) there are no
set-offs, recoupments, credits, contra accounts, counterclaims or defences
against any of those Accounts Receivable, (d) as to any Accounts Receivable
represented by a note, trade acceptance, draft or other instrument or by any
Chattel Paper or document, the same have been endorsed and/or delivered by
Company to Agent, (e) Company has not received with respect to any Account
Receivable, any notice of the death of the related account debtor, nor of the
dissolution, liquidation, termination of existence, insolvency, business
failure, appointment of a receiver for, assignment for the benefit of creditors
by, or filing of a petition in bankruptcy by or against, the account debtor, and
(f) as to each Account Receivable, the account debtor is not an affiliate of
Company, any department, agency or instrumentality of the government of Canada
or any of its provinces, territories or municipalities, or a citizen or resident
of any jurisdiction outside of Canada or the United States of America. Company
will do all acts and will execute all writings reasonably requested by Agent to
perform, enforce performance of, and collect all Accounts Receivable. Except in
the ordinary course of business and in a manner consistent with past practice,
Company shall neither make nor permit any modification, compromise or
substitution for any Account Receivable without the prior written consent of
Agent. Company shall, at Agent’s request, arrange for verification of Accounts
Receivable directly with account debtors or by other methods reasonably
acceptable to Agent.

 

2.11 Company at all times shall comply in all material respects with all
applicable laws including, without limitation, any laws, ordinances, directives,
orders, statutes, or regulations an object of which is to regulate or improve
health, safety, or the environment (“Environmental Laws”).

 

2.12

If Agent, in its discretion, redelivers Collateral to Company or Company’s
designee for the purpose of (a) the ultimate sale or exchange thereof;
(b) presentation, collection, renewal, or registration or transfer thereof; or
(c) loading, unloading, storing, shipping, transshipping, manufacturing,
processing or otherwise dealing with it preliminary to sale or exchange, such
redelivery shall be in trust for the benefit of Agent and shall not constitute a
release of Agent’s security interest in it or in the proceeds or products of it
unless Agent specifically so agrees in writing. If Company requests any such
redelivery, Company will deliver with such request a duly executed financing
statement in form and substance satisfactory to Agent. Any proceeds of
Collateral coming into Company’s possession as a result of any such redelivery
shall be held in trust for Agent and immediately delivered to Agent for
application on the Indebtedness. Agent may (in its sole discretion) deliver any
or all of the Collateral to Company, and such delivery by Agent shall discharge
Agent from all liability or responsibility for such Collateral. Agent,

 

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at its option, may require delivery of any Collateral to Agent at any time with
such endorsements or assignments of the Collateral as Agent may request.

 

2.13 At any time following the occurrence of an Event of Default (or at any time
with respect to subclause (d) below) and without notice, Agent may (a) cause any
or all of the Collateral to be transferred to its name or to the name of its
nominees; (b) receive or collect by legal proceedings or otherwise all
dividends, interest, principal payments and other sums and all other
distributions at any time payable or receivable on account of the Collateral,
and hold the same as Collateral, or apply the same to the Indebtedness, the
manner and distribution of the application to be in the sole discretion of
Agent; (c) enter into any extension, subordination, reorganization, deposit,
merger or consolidation agreement or any other agreement relating to or
affecting the Collateral, and deposit or surrender control of the Collateral,
and accept other property in exchange for the Collateral and hold or apply the
property or money so received pursuant to this Agreement; and (d) take such
actions in its own name on the Company’s name as Agent, in its sole discretion,
deems necessary or appropriate to establish exclusive possession over any of the
Collateral of such nature that perfection of Agent’s security interest may be
accomplished by possession.

 

2.14 Agent and the Banks may assign any of the Indebtedness and deliver any or
all of the Collateral or its interest therein to its assignee, who then shall
have with respect to such Indebtedness, Collateral or interest so delivered all
the rights and powers of Agent under this Agreement. Following any such
assignment, the Agent shall be fully discharged from all liability and
responsibility with respect to Collateral so delivered.

 

2.15 Company shall defend, indemnify and hold harmless Agent and the Banks,
their employees, agents, shareholders, affiliates, officers, and directors from
and against any and all claims, damages, fines, expenses, liabilities or causes
of action of whatever kind, including without limit consultant fees, legal
expenses, and attorney fees, suffered by any of them as a direct or indirect
result of any actual or asserted violation by Company of any law, including,
without limit, Environmental Laws, or of any remediation relating to any
property (to the extent remediation is the responsibility of Company) required
by any law, including without limit Environmental Laws.

 

SECTION 3. COLLECTION OF PROCEEDS

 

3.1

Company agrees to collect and enforce payment of all Collateral until Agent
shall direct Company to the contrary. Immediately upon notice to Company by
Agent and at all times after that, Company agrees to fully and promptly
cooperate and assist Agent in the collection and enforcement of all Collateral
and to hold in trust for Agent all payments received in connection with
Collateral and from the sale, lease or other disposition of any Collateral, all
rights by way of suretyship or guaranty and all rights in the nature of a lien
or security interest which Company now or later has regarding the Collateral.
Immediately upon and after such notice, Company agrees to (a) endorse to Agent
and immediately deliver to Agent all payments received on Collateral or from the
sale, lease or other disposition of any Collateral or arising from any other
rights or interests of Company in the Collateral, in the form received by
Company without commingling with

 

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any other funds, and (b) immediately deliver to Bank all property in Company’s
possession or later coming into Company’s possession through enforcement of
Company’s rights or interests in the Collateral. Company irrevocably authorizes
Agent and/or its employees or agents to endorse the name of Company upon any
cheques or other items which are received in payment for any Collateral, and to
do any and all things necessary in order to reduce these items to Money. Agent
shall not have any duty as to the collection or protection of Collateral or the
Proceeds of it, nor as to the preservation of any related rights, beyond the use
of reasonable care in the custody and preservation of Collateral in the
possession of Agent. Company agrees to take all steps necessary to preserve
rights against prior parties with respect to the Collateral. Nothing in this
Section 3.1 shall be deemed to be a consent by Agent to any sale, lease or other
disposition of any Collateral.

 

3.2 All items or amounts which are delivered by or for the benefit of Company to
Agent on account of partial or full payment of, or with respect to, any
Collateral shall be applied to the payment of the Indebtedness, whether then due
or not, in such order or at such time of application as Agent and the Banks may
determine in its sole discretion. Company agrees that Agent shall not be liable
for any loss or damage which Company may suffer as a result of Agent’s
processing of items or its exercise of any other rights or remedies under this
Agreement, including without limitation indirect, special or consequential
damages, loss of revenues or profits, or any claim, demand or action by any
third party arising out of or in connection with the processing of items or the
exercise of any other rights or remedies under this Agreement. Company agrees to
indemnify and hold Agent harmless from and against all such third party claims,
demands or actions, and all related expenses or liabilities, including, without
limitation, legal fees, except for claims arising from the gross negligence or
willful misconduct of Agent.

 

3.3 Company agrees that immediately upon Agent’s request (whether or not an
Event of Default exists), Company shall establish the cash management
arrangements required by this Section 3.3, and thereafter, the following
provisions of this Section 3.3 shall be in full force and effect.

 

  (1)

Company shall at its sole expense establish and maintain, from the date of such
request until the end of the term of this Agreement (or until Agent acting in
its sole discretion shall notify Company that the Indebtedness is no longer
required to be on a remittance basis) a Canadian post office lockbox, (the “Lock
Box”) to which Agent shall have exclusive access and control. Company expressly
authorizes Agent, from time to time, to remove all contents from the Lock Box,
for disposition in accordance with this Agreement. Company agrees to notify all
account debtors and other parties obligated to it that all payments made on any
account, invoice or other collateral (other than payments by electronic funds)
shall be remitted, for the credit of Company, to the Lock Box, and Company shall
include a like statement on all invoices. Payments made by electronic funds
transfer shall be made directly to a non-interest bearing deposit account (the
“Cash Collateral Account”) to which Agent shall have exclusive access and
control, and Company shall so instruct its account debtors and other parties
obligated to it. Company shall execute all documents, authorizations and other

 

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agreements necessary to establish and maintain the Lock Box and the Cash
Collateral Account.

 

  (2) Whether or not Company is required by Agent to maintain the Lock Box under
this paragraph, from the date of such request until the end of the term of this
Agreement, any and all cash, checks, drafts and other instruments for the
payment of money received by Company at any time, in full or partial payment of
any of the Collateral shall forthwith, upon receipt, be transmitted and
delivered to Agent (properly endorsed, where required, so that such items may be
collected by Agent). Any such items received by Company shall not be commingled
with any other of Company’s funds or property, but will be held separate and
apart from Company’s own funds or property, and upon express trust for the
benefit of Agent until delivery is made to Agent.

 

  (3) All items or amounts which are remitted to the Lock Box, to the Cash
Collateral Account, or otherwise delivered by or for the benefit of Company to
Agent on account of partial or full payment of, or any other amount payable with
respect to, any of the Collateral shall, at Agent’s option (i) be applied to the
payment of the Indebtedness, whether then due or not, in such order of
application as Agent may determine in its sole discretion, or, (ii) shall be
deposited to the credit of the Cash Collateral Account. Company shall have no
right whatsoever to withdraw any funds so deposited. Company further grants to
Agent for the benefit of the Banks, a first security interest in and lien on all
funds on deposit in such accounts. To the extent collected funds remain at any
time on deposit in the Cash Collateral Account after payment and discharge in
full of the Indebtedness (provided there is then no Event of Default hereunder),
Agent shall release such surplus collected funds to Company. Company hereby
irrevocably authorizes and directs Agent to endorse all items received for
deposit to the Cash Collateral Account, notwithstanding the inclusion on any
such item of a restrictive notation, e.g., “paid in full”, “balance of account”,
or other restriction.

 

  (4) Company agrees that Agent and the Banks shall not be liable for any loss
or damage which Company suffers or may suffer as a result of Agent’s processing
of items or its exercise of any other rights or remedies under this Agreement,
including without limitation indirect, special or consequential damages, loss of
revenues or profits, or any claim, demand or action by any third party arising
out of or in connection with the processing of items or the exercise of any
other rights or remedies hereunder; provided, however, this exculpation shall
not apply to direct damages arising as a result of Agent’s and the Bank’s gross
negligence or willful misconduct. Company further agrees to indemnify and hold
Agent and the Banks harmless from and against all such third party claims,
demands or actions, including without limitation litigation costs and attorney
fees.

 

SECTION 4. DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS

 

4.1 Upon the occurrence of any of the following events (each an “Event of
Default”), Company shall be in default under this Agreement:

 

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  (1) Any failure to pay the Indebtedness or any other indebtedness when due, or
such portion of it as may be due, by acceleration or otherwise and continuation
beyond any applicable period of cure; or

 

  (2) Any failure or neglect to comply with, or breach of or default under, any
term of this Agreement which, except in the case of Section 2.4 or 2.9,
continues for fifteen (15) days after notice by Agent to Company, or any other
agreement or commitment between Company, or any guarantor of any of the
Indebtedness (“Guarantor”) and Bank and continuation beyond any applicable
period of cure; or

 

  (3) Any warranty, representation, financial statement, or other information
made, given or furnished to Agent or any Bank by or on behalf of Company, or any
Guarantor shall be, or shall prove to have been, false or materially misleading
when made, given, or furnished; or

 

  (4) Any loss, theft, substantial damage or destruction to or of any
Collateral, or the issuance or filing of any attachment, levy, garnishment or
the commencement of any proceeding in connection with any Collateral or of any
other judicial process of, upon or in respect of Company, any Guarantor, or any
Collateral; or

 

  (5) Sale or other disposition by Company, or any Guarantor of any substantial
portion of its assets or property or voluntary suspension of the transaction of
business by Company, or any Guarantor, or death, dissolution, termination of
existence, merger, consolidation, insolvency, business failure, or assignment
for the benefit of creditors of or by Company, or any Guarantor; or commencement
of any proceedings under any provincial, state or Canadian or U.S. federal
bankruptcy or insolvency laws or laws for the relief of debtors by or against
Company, or any Guarantor; or the appointment of a receiver, interim receiver,
receiver-manager, trustee, court appointee, sequestrator or otherwise, for all
or any part of the property of Company, or any Guarantor; or

 

  (6) Agent or the Banks deem the margin of Collateral insufficient or
themselves insecure, in good faith believing that the prospect of payment of the
Indebtedness or performance of this Agreement is impaired or shall fear
deterioration, removal, or waste of Collateral; or

 

  (7) A default shall occur under any instrument, agreement or other document
evidencing, securing or otherwise relating to any of the Indebtedness.

 

4.2 Upon the occurrence of any Event of Default, Agent and the Banks may at
their discretion and without prior notice to Company declare any or all of the
Indebtedness to be immediately due and payable, and shall have and may exercise
any one or more of the following rights and remedies:

 

  (1) Exercise all the rights and remedies available to secured parties under
the provisions of the PPSA and other applicable law or in equity;

 

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  (2) Institute legal proceedings to enforce the lien and security interest
granted by this Agreement, to recover judgment for all amounts then due and
owing as Indebtedness, and to collect the same out of any Collateral or the
proceeds of any sale of it;

 

  (3) Institute legal proceedings for the sale, under the judgment or decree of
any court of competent jurisdiction, of any or all Collateral; and/or

 

  (4) Personally or by their agents, attorneys, or appointment of an interim
receiver, receiver or receiver manager, enter upon any premises where Collateral
may then be located, and take possession of all or any of it and/or render it
unusable; and without being responsible for loss or damage to such Collateral,
hold, operate, sell, lease, or dispose of all or any Collateral at one or more
public or private sales, leasings or other disposition, at places and times and
on terms and conditions as Agent may deem fit, without any previous demand or
advertisement; and except as provided in this Agreement, all notice of sale,
lease or other disposition, and advertisement, and other notice or demand, any
right or equity of redemption, and any obligation of a prospective purchaser or
lessee to inquire as to the power and authority of Agent to sell, lease, or
otherwise dispose of the Collateral or as to the application by Agent of the
proceeds of sale or otherwise, which would otherwise be required by, or
available to Company under applicable law are expressly waived by Company to the
fullest extent permitted.

 

At any sale pursuant to this Section 4.2, whether under the power of sale, by
virtue of judicial proceedings or otherwise, it shall not be necessary for Agent
or a public officer under order of a court to have present physical or
constructive possession of Collateral to be sold. The recitals contained in any
conveyances and receipts made and given by Agent or the public officer to any
purchaser at any sale made pursuant to this Agreement shall, to the extent
permitted by applicable law, conclusively establish the truth and accuracy of
the matters stated (including, without limitation, as to the amounts of the
principal of and interest on the Indebtedness, the accrual and nonpayment of it
and advertisement and conduct of the sale); and all prerequisites to the sale
shall be presumed to have been satisfied and performed. Upon any sale of any
Collateral, the receipt of the officer making the sale under judicial
proceedings or of Agent shall be sufficient discharge to the purchaser for the
purchase money, and the purchaser shall not be obligated to see to the
application of the money. Any sale of any Collateral under this Agreement shall
be a perpetual bar against Company with respect to that Collateral.

 

4.3 An appointed interim receiver, receiver or receiver manager, as applicable,
shall, so far as concerns responsibility for his acts, be deemed the agent of
Company and not of Agent, and Agent and the Banks shall not be in any way
responsible for any misconduct, negligence, or non-feasance on the part of any
such receiver, his servants, agents or employees. Except as may be otherwise
directed by Agent, all money received from time to time by such interim
receiver, receiver or receiver manager, as applicable, in carrying out his
appointment shall be received in trust for and paid over to Agent. Every such
interim receiver, receiver or receiver manager, as applicable, may, in the
discretion of Bank, be vested with all or any of the rights and powers of Agent.

 

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4.4 Agent and the Banks shall not be liable or accountable for any failure to
exercise any of its rights or remedies, take possession of, collect, enforce,
realize, sell, lease or otherwise dispose of Collateral or to institute any
proceedings for such purposes. Furthermore, Agent and the Banks shall not have
any obligation to take any steps to preserve rights against prior parties to any
Instrument or Chattel Paper whether Collateral or Proceeds and whether or not in
Agent’s possession and neither Agent nor any Bank shall not be liable or
accountable for failure to do so.

 

4.5 Upon the occurrence of an Event of Default, Company shall, at the request of
Agent, notify the account debtors or obligors of Agent’s security interest in
the Collateral and direct payment of it to Agent. Agent may, itself, upon the
occurrence of any Event of Default, so notify and direct any account debtor or
obligor to make payment to Agent. At the request of Agent, whether or not an
Event of Default shall have occurred, Debtor shall immediately take such actions
as Agent shall request to establish exclusive possession by Agent over any
Collateral which is of such nature that perfection of such interest may be
established by possession.

 

4.6 The proceeds of any sale or other disposition of Collateral authorized by
this Agreement shall be applied by Agent and the Banks first upon all expenses
and all reasonable attorney fees and legal expenses incurred by Agent or any
Bank; the balance of the proceeds of the sale or other disposition shall be
applied in the payment of the Indebtedness, first to interest, then to
principal, then to remaining Indebtedness and the surplus, if any, shall be paid
over to Company or to such other person(s) as may be entitled to it under
applicable law. Company shall remain liable for any deficiency, which it shall
pay to Agent immediately upon demand. Company agrees that Agent shall be under
no obligation to accept any noncash proceeds in connection with any sale or
disposition of Collateral unless failure to do so would be commercially
unreasonable. If Agent agrees in its sole discretion to accept noncash proceeds
(unless the failure to do so would be commercially unreasonable), Agent may
ascribe any commercially reasonable value to such proceeds. Without limiting the
foregoing, Agent may apply any discount factor in determining the present value
of proceeds to be received in the future or may elect to apply proceeds to be
received in the future only as and when such proceeds are actually received in
cash by Agent.

 

4.7 Nothing in this Agreement is intended, nor shall it be construed, to
preclude Agent from pursuing any other remedy provided by law for the collection
of the Indebtedness or for the recovery of any other sum to which Agent may be
entitled for the breach of this Agreement by Company. Nothing in this Agreement
shall reduce or release in any way any rights or security interests of Agent or
any Bank contained in any existing agreement between Company or any Guarantor
and Agent or any Bank.

 

4.8 No waiver of default or consent to any act by Company shall be effective
unless in writing and signed by an authorized officer of Agent. No waiver of any
default or forbearance on the part of Agent in enforcing any of its rights under
this Agreement shall operate as a waiver of any other default or of the same
default on a future occasion or of any rights.

 

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4.9 Company (a) irrevocably appoints Agent or any agent of Agent (which
appointment is coupled with an interest and which except as to subclause
(2) below, may only be exercised following the occurrence of an Event of
Default) the true and lawful attorney of Company (with full power of
substitution) in the name, place and stead of, and at the expense of, Company
and (b) authorizes Agent or any agent of Agent, in its own name, at Company’s
expense, to do any of the following, as Agent, in its sole discretion, deems
appropriate:

 

  (1) to demand, receive, sue for, and give receipts or acquittances for any
money due or to become due on any Collateral and to endorse any item
representing any payment on or proceeds of the Collateral;

 

  (2) to execute and file in the name of and on behalf of Company all financing
statements or other filings deemed necessary or advisable by Agent to evidence
perfect, or continue the security interests granted in this Agreement; and

 

  (3) to do and perform any act on behalf of Company permitted or required under
this Agreement.

 

4.10 Upon request by Agent to Company, which may only be made following the
occurrence of an Event of Default, Company also agrees to assemble the
Collateral and make it available to Agent at any place designated by Agent which
is reasonably convenient to Agent and Company.

 

SECTION 5. MISCELLANEOUS

 

5.1 Until Agent is advised in writing by Company to the contrary, all notices,
requests and demands required under this Agreement or by law shall be given to,
or made upon, Company at the first address indicated in Section 5.18 below.

 

5.2 Agent and the Banks assume no duty of performance or other responsibility
under any contracts contained within the Collateral.

 

5.3 Agent and the Banks have the right to sell, assign, transfer, negotiate or
grant participations or any interest in, any or all of the Indebtedness and any
related obligations, including without limitation, this Agreement. In connection
with the above, but without limiting their ability to make other disclosures to
the full extent allowable, Agent and the Banks may disclose all documents and
information which Agent and the Banks now or later have relating to Company, the
Indebtedness or this Agreement, however obtained. Company further agrees that
Agent and the Banks may provide information relating to this Agreement or
relating to Company to their respective parent, affiliates, subsidiaries, and
service providers.

 

5.4 In addition to Agent’s and the Bank’s other rights, any indebtedness owing
from a Bank to Company can be set off and applied by such Bank on any
Indebtedness at any time(s) either before or after maturity or demand without
notice to anyone. Any such action shall not constitute an acceptance of
collateral in discharge of the Indebtedness.

 

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5.5 Company waives, to the extent permitted by law, any right to require Agent
or any Bank to: (a) proceed against any person or property; (b) give notice of
the terms, time and place of any public or private sale of personal property
security held from Company or any other person, or otherwise comply with the
provisions of Part 5 of the PPSA; or (c) pursue any other remedy in Agent’s or
any Bank’s power. Company waives notice of acceptance of this Agreement and
presentment, demand, protest, notice of protest, dishonour, notice of dishonour,
notice of default, notice of intent to accelerate or demand payment of any
Indebtedness, any and all other notices to which the undersigned might otherwise
be entitled, and diligence in collecting any Indebtedness, and agree(s) that
Agent and the Banks may, once or any number of times, modify the terms of any
Indebtedness, compromise, extend, increase, accelerate, renew or forbear to
enforce payment of any or all Indebtedness, or permit Company to incur
additional Indebtedness, all without notice to Company and without affecting in
any manner the unconditional obligation of Company under this Agreement. Company
unconditionally and irrevocably waives each and every defence and set-off of any
nature which, under principles of guaranty or otherwise, would operate to impair
or diminish in any way the obligation of Company under this Agreement, and
acknowledges that such waiver is by this reference incorporated into each
security agreement, collateral assignment, pledge and/or other document from
Company now or later securing the Indebtedness, and acknowledges that as of the
date of this Agreement no such defence or set-off exists.

 

5.6 In the event that applicable law, this Agreement or the Credit Agreement
shall obligate Agent to give prior notice to Company of any action to be taken
under this Agreement, Company agrees that a written notice given to Company at
least fifteen days before the date of the action shall be reasonable notice of
the action and, specifically, reasonable notification of the time and place of
any public sale or of the time after which any private sale, lease, or other
disposition is to be made, unless a shorter notice period is reasonable under
the circumstances or otherwise permitted by law. A notice shall be deemed to be
given under this Agreement when given as provided in the Loan Agreement.

 

5.7 Notwithstanding any prior revocation, termination, surrender, or discharge
of this Agreement in whole or in part, the effectiveness of this Agreement shall
automatically continue or be reinstated in the event that any payment received
or credit given by Agent or any Bank in respect of the Indebtedness is returned,
disgorged, or rescinded under any applicable law, including, without limitation,
bankruptcy or insolvency laws, in which case this Agreement, shall be
enforceable against Company as if the returned, disgorged, or rescinded payment
or credit had not been received or given by Agent or such Bank, as applicable,
and whether or not Agent or such Bank relied upon this payment or credit or
changed its position as a consequence of it. In the event of continuation or
reinstatement of this Agreement, Company agrees upon demand by Agent to execute
and deliver to Agent those documents which Agent reasonably determines are
appropriate to further evidence (in the public records or otherwise) this
continuation or reinstatement, although the failure of Company to do so shall
not affect in any way the reinstatement or continuation.

 

5.8

This Agreement and the security afforded hereby is in addition to and not in
substitution for any other security now or hereafter held by Agent or any Bank
and is, and is intended

 

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to be, a continuing Agreement and shall remain in full force and effect until
all Indebtedness contracted for or created, and any extensions or renewals
thereof together with interest accruing thereon and fees due in connection
therewith, shall be paid, satisfied and terminated in full.

 

5.9 The headings used in this Agreement are for convenience only and are not to
be considered a part of this Agreement and do not in any way limit or amplify
the terms and provisions of this Agreement.

 

5.10 When the context so requires, the singular number shall be read as if the
plural were expressed and the provisions hereof shall be read with all
grammatical changes necessary dependent upon the person referred to being a
male, female, firm or corporation.

 

5.11 Nothing herein contained shall in any way obligate Agent or any Bank to
grant, continue, renew, extend time for payment of or accept anything which
constitutes or would constitute Indebtedness.

 

5.12 This Agreement and the transactions evidenced hereby shall be governed by
and construed in accordance with the laws of the Province of Ontario and the
laws of Canada applicable therein, as the same may from time to time be in
effect including, where applicable, the PPSA.

 

5.13 The security interest created hereby is intended to attach when this
Agreement is signed by Company and delivered to Agent.

 

5.14 This Agreement and all the rights and remedies of Agent and the Banks under
this Agreement shall inure to the benefit of Agent’s and the Banks’ successors
and assigns and to any other holder who derives from Agent or any Bank title to
or an interest in the Indebtedness or any portion of it, and shall bind Company
and the successors and assigns of Company. Nothing in this Section 5.14 is
deemed to be a consent by Agent to any assignment by Company.

 

5.15 If there is more than one Company, all undertakings, warranties and
covenants made by Company and all rights, powers and authorities given to or
conferred upon Agent and the Banks are made or given jointly and severally.

 

5.16 No single or partial exercise, or delay in the exercise, of any right or
power under this Agreement, shall preclude other or further exercise of the
rights and powers under this Agreement. The unenforceability of any provision of
this Agreement shall not affect the enforceability of the remainder of this
Agreement. No amendment or modification of this Agreement shall be effective
unless the same shall be in writing and signed by Company and an authorized
officer of Agent.

 

5.17 To the extent that any of the Indebtedness is payable upon demand, nothing
, contained in this Agreement shall modify the terms and conditions of that
Indebtedness nor shall anything contained in this Agreement prevent the Banks
from making demand, without notice and with or without reason, for immediate
payment of any or all of that Indebtedness at any time(s), whether or not an
Event of Default has occurred.

 

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5.18 Company’s chief executive office, principal place of business and domicile
(within the meaning of the Civil Code of Quebec) is located and shall be
maintained at:

 

 

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If Collateral is located at other than the chief executive office and principal
place of business, such Collateral is located and shall be maintained at:

 

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Collateral shall be maintained only at the locations identified in this
Section 5.18.

 

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5.19 The Indebtedness shall be on a remittance basis and the provisions of
Section 3.3 shall apply.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered by its proper and duly authorized officers.

 

TECSTAR MANUFACTURING CANADA LIMITED By:    

Name:

Title:

 

I/We have the authority to bind the Company.

 

COMERICA BANK, as Agent

By:    

Name: Paul DeBono

Title: Vice President

 

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SCHEDULE A

 

ADDITIONAL COLLATERAL

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SCHEDULE D

 

ENCUMBRANCES

 

“Permitted Encumbrances” as that terms is defined in the Loan Agreement dated
April 30, 2003, between the Company and Comerica Bank, as amended, restated,
supplemented or otherwise modified from time to time.