Exhibit 10.5
EXECUTION COPY
CANADIAN SECURITY AGREEMENT
CANADIAN SECURITY AGREEMENT, dated as of October 13, 2010 (this “Agreement”),
among ASSOCIATED MATERIALS CANADA LIMITED, an Ontario corporation
(“Associated”), GENTEK CANADA HOLDINGS LIMITED, an Ontario corporation
(“Gentek”), and GENTEK BUILDING PRODUCTS LIMITED PARTNERSHIP, an Ontario limited
partnership, by its general partner, Gentek (“LP”), each of the subsidiaries
listed of the Canadian Borrowers on Annex A hereto (each such subsidiary,
individually, a “Canadian Subsidiary Grantor” and, collectively, the “Canadian
Subsidiary Grantors”; and, together with the Associated, Gentek and LP,
collectively, the “Canadian Grantors”), and UBS AG CANADA BRANCH, as Canadian
collateral agent for the Secured Parties (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 Lenders have severally
agreed to make loans to the Borrowers and the Canadian 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 Grantors (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;

 

 

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WHEREAS, it is a condition precedent to the obligations of the Canadian Lenders
and the Letter of Credit Issuers to make their respective Extensions of Credit
to the Canadian Borrowers under the Credit Agreement that the Canadian Grantors
shall have executed and delivered this Agreement to the Canadian Collateral
Agent, for the benefit of the Secured Parties; and
WHEREAS, the Canadian Grantors acknowledge that they will derive substantial
direct and indirect benefit from the Extensions of Credit and have agreed to
secure their obligations with respect thereto pursuant to this Agreement on a
first priority basis (subject to Permitted Liens).
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, 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 Grantors hereby agree with the Canadian Collateral Agent, for the
benefit of the Secured Parties, as follows:
1. Defined Terms.
(a) Unless otherwise defined herein, (i) 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 (ii) 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:
“Accounts” shall mean all “accounts,” as such term is defined in the PPSA.
“After-Acquired Intellectual Property Collateral” shall have the meaning
assigned to such term in Section 4.1(c).
“Agreement” shall have the meaning assigned to such term in the preamble hereto.
“Canadian Borrower” shall have the meaning assigned to such term in the preamble
hereto.

 

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“Canadian Collateral Agent” shall have the meaning assigned to such term in the
preamble hereto.
“Canadian Grantor” 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.
“Secured Parties” shall have the meaning assigned to the term “Secured Parties”
in the Credit Agreement.
“Canadian Subsidiary Grantor” shall have the meaning assigned to such term in
the preamble hereto.
“Certificated Security” has the meaning given to it in the STA.
“Chattel Paper” shall mean all “chattel paper” as such term is defined in the
PPSA.
“Collateral” shall have the meaning assigned to such term in Section 2.
“Collateral Account” shall mean any collateral account established by the
Canadian Collateral Agent as provided in Section 5.1.
“Company” shall have the meaning assigned to such term in the preamble hereto.
“Copyrights” shall mean all (a) registered copyright rights in Canada, including
copyrights in computer software and the content thereof, and internet web sites,
(b) registrations, recordings and applications for registration of any such
copyright in Canada, including registrations, recordings, supplemental
registrations and pending applications for registration in the Canadian
Intellectual Property Office, and (c) rights to obtain all renewals thereof.
“Credit Agreement” shall have the meaning assigned to such term in the recitals
hereto.
“Credit Documents” shall mean the “Credit Documents” as defined in the Credit
Agreement.
“Deposit Account Control Agreement” shall mean an agreement among the Canadian
Collateral Agent, any Canadian Grantor and the relevant depository bank, in form
and substance reasonably satisfactory to the Canadian Collateral Agent.
“Document of Title” shall mean all “document of title,” as such term is defined
in the PPSA.

 

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“Equipment” shall mean all “equipment,” as such term is defined in the PPSA, now
or hereafter owned by any Canadian Grantor or to which any Canadian Grantor has
rights and, in any event, shall include all machinery, equipment, furnishings,
movable trade fixtures and vehicles now or hereafter owned by any Canadian
Grantor or to which any Canadian Grantor has rights and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
“Excluded Accounts” shall mean any accounts specified in Section 9.16(b)(iv) of
the Credit Agreement.
“Excluded Assets” shall mean (a) any property or asset to the extent that the
grant of a security interest in such property or asset is prohibited by any
Applicable Law or requires consent not obtained of any Governmental Authority
pursuant to Applicable Law, (b) any Subject Property, (c) any Excluded Capital
Stock, (d) any assets or property that is subject to a Lien permitted pursuant
to Section 10.2(c) of the Credit Agreement to the extent the documents relating
to such Lien would not permit such assets or property to be subject to the Liens
created by this Agreement and the other Credit Documents; provided that
immediately upon the ineffectiveness, lapse or termination of any such
restriction, such assets or property shall cease to be an Excluded Asset,
(e) any Vehicles the perfection of a security interest in which is excluded from
the PPSA, (f) any intellectual property, including Canadian intent to use
trademark applications, to the extent that and for so long as the creation of a
security interest therein would invalidate or impair the enforceability of the
Canadian Grantor’s right, title or interest therein, (h) Excluded Accounts,
(i) any property or assets owned by any Unrestricted Subsidiary (j) any property
included in the definition of “Collateral” in the Canadian Pledge Agreement and
(k) proceeds and products from any and all of the of the foregoing Excluded
Assets described in clause (a) through (j), unless such proceeds would otherwise
constitute Collateral; provided, however, that Excluded Assets will not include
any Proceeds, substitutions or replacements of any Excluded Assets referred to
in clause (a) (unless such Proceeds, substitutions or replacements would
otherwise constitute Excluded Assets).
“Exclusive IP Agreements” shall have the meaning assigned to such term in
Section 3.2(a).
“Extensions of Credit” shall have the meaning assigned to such term in the
recitals hereto.
“Intangibles” shall mean all “intangibles” as such term is defined in the PPSA
and, in any event, including with respect to any Canadian Grantor, all
contracts, agreements, instruments and indentures in any form, and portions
thereof, to which such Canadian Grantor is a party or under which such Canadian
Grantor has any right, title or interest or to which such Canadian Grantor or
any property of such Canadian Grantor is subject, as the same may from time to
time be amended, supplemented or otherwise modified, including (a) all rights of
such Canadian Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (b) all rights of such Canadian Grantor to receive
proceeds of any insurance, indemnity, warranty or guarantee with respect
thereto, (c) all claims of such Canadian Grantor for damages arising out of any
breach of or default thereunder and (d) all rights of such Canadian Grantor to
terminate, amend, supplement, modify or exercise rights or options thereunder,
to perform thereunder and to compel performance and otherwise exercise all
remedies thereunder.

 

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“Intellectual Property” shall mean any and all intellectual property, including
Trade Secrets, Copyrights, Patents, Trademarks and the IP Agreements, all rights
therein, and all rights to sue at law or in equity for any past, present, or
future infringement, misappropriation, violation, misuse or other impairment
thereof, including the right to receive injunctive relief and all Proceeds and
damages therefrom.
“Intellectual Property Collateral” shall mean the Collateral constituting
Intellectual Property, including the Intellectual Property set forth in
Schedules 1 and 2 hereto.
“Intellectual Property Security Agreement” shall have the meaning assigned to
such term in Section 4.4(e).
“Instruments” shall mean all “instruments,” as such term is defined in the PPSA.
“Inventory” shall mean all “inventory,” as such term is defined in the PPSA.
“Investment Property” shall mean all “investment property,” as such term is
defined in the PPSA.
“IP Agreements” shall mean any and all agreements, permits, consents, orders and
franchises, now or hereafter in effect, relating to the license, development,
use, manufacture, distribution, sale or disclosure of any Copyrights, Patents or
Trademarks, to which any Canadian Grantor, now or hereafter, is a party.
“Lenders” shall have the meaning assigned to such term in the recitals hereto.
“Money” shall mean all “money,” as such term is defined in the PPSA.
“Patents” shall mean (a) patent registrations, statutory invention
registrations, utility models, recordings and pending applications in the
Canadian Intellectual Property Office, and (b) all reissues, continuations,
divisions, continuations-in-part, renewals or extensions thereof, and in the
case of (a) and (b), all the inventions disclosed or claimed therein and all
improvements thereto, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
“Permitted Lien” shall mean any Lien on the Collateral expressly permitted to be
granted pursuant to the Credit Agreement, including, without exception, pursuant
to the definition of “Permitted Liens” therein and Section 10.2 thereof.
“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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“Proceeds” shall mean all “proceeds” as such term is defined in the PPSA and, in
any event, shall include with respect to any Canadian Grantor, any consideration
received from the sale, exchange, license, lease or other Disposition of any
asset or property that constitutes Collateral, any value received as a
consequence of the possession of any Collateral and any payment received from
any insurer or other person or entity as a result of the destruction, loss,
theft, damage or other involuntary conversion of whatever nature of any asset or
property that constitutes Collateral, and shall include (a) all cash and
negotiable instruments received by or held on behalf of the Canadian Collateral
Agent, (b) any claim of any Canadian Grantor against any third party for (and
the right to sue and recover for and the rights to damages or profits due or
accrued arising out of or in connection with) (i) past, present or future
infringement or dilution, where applicable, of any Patent, Trademark, Copyright
or Trade Secret, now or hereafter owned by any Canadian Grantor, or licensed
under an IP Agreement or injury to the goodwill associated with or symbolized by
any Trademark now or hereafter owned by any Canadian Grantor, and (ii) past,
present or future breach of any IP Agreement and (c) any and all other amounts
from time to time paid or payable under or in connection with any of the
Collateral.
“Registered Intellectual Property” shall have the meaning set forth in
Section 3.2.
“Canadian Pledge Agreement” shall have the meaning assigned to the term
“Canadian Pledge Agreement” in the Credit Agreement.
“Secured Debt Documents” shall mean, collectively, the Credit Documents, each
Secured Cash Management Agreement entered into with a Cash Management Bank and
each Hedging Agreement entered into with a Hedge Bank.
“Security Interest” shall have the meaning assigned to such term in
Section 2(a).
“Securities Account” shall mean all “securities account,” as such term is
defined in the STA.
“Securities Account Control Agreement” shall mean an agreement among the
Canadian Collateral Agent, any Canadian Grantor and the relevant securities
intermediary, in form and substance reasonably satisfactory to the Canadian
Collateral Agent, granting control of such Canadian Grantor’s Securities
Accounts maintained with such securities intermediary.
“Subject Property” shall mean any contract, license, lease, agreement,
instrument or other document to the extent that such grant of a security
interest therein is (1) prohibited by, or constitutes a breach or default under,
or results in the termination of, or requires any consent not obtained under,
such contract, license, lease, agreement, instrument or other document, or, in
the case of any Investment Property or other securities, any applicable
shareholder or similar agreement or (2) otherwise constitutes or results in the
abandonment, invalidation or unenforceability of any right, title or interest of
any Canadian Grantor under such contract, license, lease, agreement, instrument
or other document, except, in each case, to the extent that Applicable Law or
the term in such contract, license, lease, agreement, instrument or other
document or shareholder or similar agreement providing for such prohibition,
breach, default or termination or requiring such consent is ineffective under
Applicable Law or purports to prohibit the granting of a security interest over
all or a material portion of assets of any Grantor; provided, however, that the
foregoing exclusions shall not apply to the extent that any such prohibition,
default or other term would be rendered ineffective pursuant to the PPSA or any
other Applicable Law or principles of equity; provided, further, that the
Security Interest shall attach immediately to any portion of such Subject
Property that does not result in any of the consequences specified above
including, without limitation, any Proceeds of such Subject Property.

 

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“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 on terms set forth in
Section 3.7 of the Credit Agreement following the termination of the Total
Revolving Credit Commitments).
“Trademarks” shall mean (a) all Canadian registered trademarks, service marks,
domain names, trade names, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, slogans, other
source or business identifiers, now existing or hereafter adopted or acquired,
and all recordings and applications for registration filed in connection with
the foregoing, including registrations, recordings and applications for
registration in the Canadian Intellectual Property Office, and all common-law
rights related thereto, (b) all goodwill associated therewith or symbolized
thereby and (c) all extensions or renewals thereof.
“Trade Secrets” shall mean all confidential and proprietary information,
including know-how, trade secrets, manufacturing and production processes and
techniques, inventions, research and development information, databases and
data, including, without limitation, technical data, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information.
“Vehicles” shall mean all cars, trucks, trailers, and other vehicles and all
tires and other appurtenances to any of the foregoing.
(d) Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Canadian Grantor, shall refer to such
Canadian Grantor’s Collateral or the relevant part thereof.
2. Grant of Security Interest.
(a) 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 Grantor hereby transfers, assigns, pledges, mortgages and hypothecates
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 (the “Security Interest”)
all of such Canadian Grantor’s right, title and interest in (subject only to
Permitted Liens) and to all of the following whether now owned or anytime
hereafter acquired or existing (collectively, the “Collateral”):
(i) all Accounts;
(ii) all cash;
(iii) all Chattel Paper;
(iv) all deposit accounts;

 

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(v) all Documents of Title;
(vi) all Equipment;
(vii) all fixtures;
(viii) all Goods;
(ix) all Instruments;
(x) all Patents, Trademarks, Copyrights and Trade Secrets;
(xi) all Intangibles;
(xii) all Intellectual Property;
(xiii) all Inventory;
(xiv) all Investment Property;
(xv) all letters of credit and rights thereto;
(xvi) all Money;
(xvii) all Securities Accounts;
(xviii) all books and records pertaining to the Collateral; and
(xix) to the extent not otherwise included, all Proceeds and products of any and
all of the foregoing and all collateral security and guarantees given by any
Person with respect to the foregoing;
provided, however, that notwithstanding any other provision of this Agreement
the Collateral shall not include any Excluded Assets.
(b) Each Canadian Grantor hereby irrevocably authorizes the Canadian Collateral
Agent at any time and from time to time to file in any relevant jurisdiction any
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 of each applicable jurisdiction 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 Grantor or words of similar effect as being of an
equal or lesser scope or with greater detail and in the case of a financing
statement covering the Collateral constituting minerals or the like to be
extracted or timber to be cut, a sufficient description of the real property to
which such Collateral relates. Each Canadian Grantor agrees to provide such
information to the Canadian Collateral Agent promptly upon request.

 

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Each Canadian Grantor also ratifies any authorization previously given in
writing to the Canadian Collateral Agent to file in any relevant jurisdiction
any financing statements or amendments thereto or renewals thereof if filed
prior to the date hereof.
The Canadian Collateral Agent is further authorized to file with the Canadian
Intellectual Property Office (or any successor office) such documents as may be
necessary or advisable for the purpose of perfecting, confirming, continuing,
enforcing, protecting or providing notice of the Security Interests granted by
each Canadian Grantor hereunder, and naming any Canadian Grantor or the Canadian
Grantors as debtors and the Canadian Collateral Agent as secured party.
This Agreement secures the payment 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 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 Grantor.
The Security Interests created hereby are granted as security only and shall not
subject the Canadian Collateral Agent or any other Canadian Secured Party to, or
in any way alter or modify, any obligation or liability of any Canadian Grantor
with respect to or arising out of the Collateral.
The Security Interests created hereby will not (a) extend or apply to the last
day of the term of any lease or any agreement to lease now held or hereafter
acquired by the Canadian Grantors, but should the Canadian Collateral Agent
enforce this assignment and mortgage and charge, the applicable Canadian Grantor
will thereafter stand possessed of such last day and must hold it in trust to
assign it to the Canadian Collateral Agent or to any Person acquiring such term
in the course of the enforcement of this assignment and mortgage and charge, or
(b) render the Canadian Collateral Agent liable to observe or perform any term,
covenant or condition of any agreement, document or instrument to which such
Canadian Grantor is a party or by which it is bound.

 

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3. Representations And Warranties.
Each Canadian Grantor hereby represents and warrants to the Canadian Collateral
Agent and each Secured Party that:
3.1. Title; No Other Liens. Except for (a) the Security Interest granted to the
Canadian Collateral Agent, for the benefit of the Secured Parties, pursuant to
this Agreement, (b) the Notes Liens, and (c) other Permitted Liens, such
Canadian Grantor owns each item of the Collateral free and clear of any and all
Liens or claims of others. To the knowledge of such Canadian Grantor, no action
or proceeding seeking to limit, cancel or question the validity of such Canadian
Grantor’s ownership interest in the Collateral, that could reasonably be
expected to result in a Material Adverse Effect, is pending or threatened. None
of the Canadian Grantors has filed or consented to the filing of any (x)
(A)security agreement, or (B) except in connection with an anticipated
refinancing, any financing statement or analogous document under the PPSA of any
jurisdiction or any other Applicable Laws covering any Collateral,
(y) assignment for security in which any Canadian Grantor assigns any Collateral
or any security agreement or similar instrument covering any Collateral with the
Canadian Intellectual Property Office, which security agreement, financing
statement or similar instrument or assignment is still in effect or
(z) assignment for security in which any Canadian Grantor assigns any Collateral
or any security agreement or similar instrument covering any Collateral with any
Governmental Authority, which financing statement or analogous document,
assignment, security agreement or similar instrument is still in effect, except
in the case of each of clauses (x), (y) and (z) above, such as have been filed
in favour of the Canadian Collateral Agent pursuant to this Agreement, the other
Credit Documents or are filed in respect of Permitted Liens.
3.2. Intellectual Property. (a) The Intellectual Property Collateral set forth
on (i) Schedule 1 hereto is a true and correct list of all patents, pending
patent applications, trademark registrations, pending trademark applications and
copyright registrations (collectively, the “Registered Intellectual Property”),
in each case, owned by a Canadian Grantor in its name as of the date hereof, and
indicating for each such item, as applicable, the application and/or
registration number, date and jurisdiction of filing and/or issuance, the
identity of the current applicant or registered owner, and (ii) Schedule 2
hereto is a true and correct list of all IP Agreements which accounted for
aggregate revenue to the Company or any of its Subsidiaries of more than
$5,000,000 during the Company’s 2009 fiscal year (other than non-exclusive
license agreements or licenses of commercially available off-the-shelf
software), in which a Canadian Grantor is, as of the date hereof, the exclusive
licensee of any Canadian patent, patent application, trademark registration or
application for registration, copyright registration or application for
registration (collectively, the “Exclusive IP Agreements”).
(b) Except as would not reasonably be expected to result in a Material Adverse
Effect, the Intellectual Property Collateral is subsisting and has not been
adjudged invalid or unenforceable in whole or in part.
(c) Except as would not reasonably be expected to result in a Material Adverse
Effect, to such Canadian Grantor’s knowledge, no Person is engaging in any
activity that infringes, misappropriates or otherwise violates the Intellectual
Property Collateral or the Canadian Grantor’s rights in or use thereof.
(d) Except as would not reasonably be expected to result in a Material Adverse
Effect, to such Canadian Grantor’s knowledge, no breach or default of any IP
Agreement shall be caused by any of the following, and none of the following
shall limit or impair the ownership, use, validity or enforceability of, or any
rights of such Canadian Grantor in, any Intellectual Property Collateral:
(i) the consummation of the transactions contemplated by any Credit Document or
(ii) any holding, decision, judgment or order rendered by any Governmental
Authority.

 

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3.3. Perfected Security Interests. (a) Subject to the limitations set forth in
clause (b) of this Section 3.3, the Security Interests granted pursuant to this
Agreement (i) will constitute valid perfected security interests in the
Collateral in favour of the Canadian Collateral Agent, for the benefit of the
Secured Parties, as collateral security for the Canadian Obligations, upon
(A) in the case of Collateral in which a security interest may be perfected by
filing a financing statement under the PPSA, the filing of financing statements
naming each Canadian Grantor as “debtor” and the Canadian Collateral Agent as
“secured party” and describing the Collateral in the applicable filing offices,
(B) in the case of Instruments, Chattel Paper and Certificated Securities, the
earlier of the delivery thereof to the Canadian Collateral Agent and the filing
of the financing statements referred to in clause (A), (C) in the case of
Securities Accounts, the execution of Securities Account Control Agreements,
and/or (D) in the case of Intellectual Property Collateral, the completion of
the filing, registration and recording of fully executed agreements in the form
of the Intellectual Property Security Agreement set forth in Exhibit 3 hereto in
the Canadian Intellectual Property Office, and (ii) are prior to all other Liens
on the Collateral other than Permitted Liens having priority over the Canadian
Collateral Agent’s Lien by operation of law or otherwise as permitted under the
Credit Agreement.
(b) Notwithstanding anything to the contrary herein, no Canadian Grantor shall
be required to perfect the Security Interests created hereby by any means other
than (i) filings pursuant to the PPSA of any applicable jurisdiction,
(ii) filings with the Canadian Intellectual Property Office with respect to
Registered Intellectual Property, (iii) in the case of Collateral that
constitutes Deposit Accounts and Securities Accounts for which a Control
Agreement is required pursuant to Section 9.16 of the Credit Agreement, execute
Deposit Account Control Agreements and Securities Account Control Agreements, as
applicable, (iv) in the case of Collateral that constitutes Chattel Paper,
Instruments, Certificated Securities or negotiable documents, in each case, to
the extent included in the Collateral and if the value of any such Chattel
Paper, Instruments, Certificated Securities or negotiable documents exceeds
$5,000,000 (individually), delivery to the Canadian Collateral Agent (or its
non-fiduciary agent or designee) to be held in its possession in Canada, (v) in
the case of Collateral that consists of Letter of Credit Rights, taking the
actions specified in Section 4.5. No Canadian Grantor shall be required to
(x) enter into any security agreements governed under foreign law or (y) take
any other actions in any foreign jurisdiction (other than the United States) or
required by foreign law (other than the laws of the United States) to create any
Security Interest in Collateral located or titled outside Canada or to perfect
or make enforceable any Security Interest.
(c) It is understood and agreed that the Security Interests created hereby shall
not prevent the Canadian Grantors from using the Collateral in the ordinary
course of their respective businesses or as otherwise permitted by the Credit
Agreement.
(d) The Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein (including (i) the exact legal name of
each Canadian Grantor and (ii) the jurisdiction of organization of each Canadian
Grantor) is correct and complete as of the Closing Date.

 

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3.4. Accounts. No amount payable in excess of $5,000,000 to such Canadian
Grantor under or in connection with any Account is evidenced by any Instrument
or Chattel Paper that has not been delivered to the Canadian Collateral Agent,
properly endorsed for transfer, to the extent delivery is required by the
Canadian Pledge Agreement.
4. Covenants.
Each Canadian Grantor hereby covenants and agrees with the Canadian Collateral
Agent and the Secured Parties that, from and after the date of this Agreement
until the Termination Date:
4.1. Maintenance of Perfected Security Interest; Further Documentation. (a) Such
Canadian Grantor shall maintain the Security Interests created hereby as
perfected security interests (subject to any Permitted Lien) and shall defend
the Security Interests created hereby and the priority thereof against the
claims and demands not expressly permitted by the Credit Agreement of all
Persons whomsoever.
(b) Such Canadian Grantor will furnish to the Canadian Collateral Agent from
time to time statements and schedules further identifying and describing the
assets and property of such Canadian Grantor and such other reports in
connection therewith as the Canadian Collateral Agent may reasonably request.
(c) Each Canadian Grantor agrees that should it, after the date hereof, obtain
an ownership interest in any Registered Intellectual Property that would, had it
been owned on the date hereof, be considered a part of the Intellectual Property
Collateral or should it become a party to any IP Agreement which accounted for
aggregate revenue to the Company or any of its Subsidiaries of more than
$5,000,000 during the Company’s 2009 fiscal year, or any other subsequent fiscal
year, that would, had such Canadian Grantor been a party to it on the date
hereof, be considered an Exclusive IP Agreement (“After-Acquired Intellectual
Property Collateral”), such After-Acquired Intellectual Property Collateral
shall automatically become part of the Intellectual Property Collateral, subject
to the terms and conditions of this Agreement with respect thereto. In addition,
such Canadian Grantor shall, on each date that the Borrowers are required to
deliver a certificate of an Authorized Officer to the Canadian Administrative
Agent pursuant to Section 9.1(e) of the Credit Agreement execute and deliver to
the Canadian Collateral Agent agreements substantially in the form of Exhibits 2
and 3 hereto covering such After-Acquired Intellectual Property Collateral, with
the agreement substantially in the form of Exhibit 3 hereto to be recorded with
the Canadian Intellectual Property Office and any other Governmental Authority
located in Canada necessary to perfect the Security Interest hereunder in any
such After-Acquired Intellectual Property Collateral which is Canadian
Registered Intellectual Property.
(d) Subject to clause (e) below and Section 3.3(b), each Canadian Grantor agrees
that at any time and from time to time, at the expense of such Canadian Grantor,
it will execute any and all further documents, financing statements, agreements
and instruments, and take all such further actions (including the filing and
recording of financing statements and other documents), which may be required
under any Applicable Law, or which the Canadian Collateral Agent or the Required
Lenders may reasonably request, in order (x) to grant, preserve, protect and
perfect the validity and priority of the Security Interests created or intended
to be created hereby or (y) to enable the Canadian Collateral Agent to exercise
and enforce its rights and remedies hereunder with respect to any Collateral,
including the filing of any financing or continuation statements under the PPSA
in effect in any jurisdiction with respect to the Security Interests created
hereby, all at the expense of such Canadian Grantor. Without limiting the
generality of the foregoing, such Canadian Grantor shall comply with
Section 9.14 of the Credit Agreement.

 

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(e) Notwithstanding anything in this Section 4.1 to the contrary, (i) with
respect to any assets acquired by such Canadian Grantor after the date hereof
that are required by the Credit Agreement to be subject to the Lien created
hereby or (ii) with respect to any Person that, subsequent to the date hereof,
becomes a Subsidiary of the Canadian Borrowers that is required by the Credit
Agreement to become a party hereto, the relevant Canadian Grantor after the
acquisition or creation thereof shall promptly take all actions required by the
Credit Agreement or this Section 4.1.
4.2. Changes in Locations, Name, etc. Each Canadian Grantor will furnish to the
Canadian Collateral Agent prompt written notice of any change in its
(i) organizational name, (ii) jurisdiction of incorporation or organization or
formation, (iii) identity or organizational structure, (iv) business number or
corporate or other identification number or (v) chief executive office or any
locations in which it has Collateral. Each Canadian Grantor agrees to make all
filings under the PPSA or otherwise that are required by Applicable Law in order
for the Canadian Collateral Agent to continue at all times following such change
to have a valid, legal and perfected Security Interest in all of the Collateral
(subject to Permitted Liens).
4.3. Notices. (a) Each Canadian Grantor will advise the Canadian Collateral
Agent in reasonable detail, of any Lien of which it has knowledge (other than
the Security Interests created hereby and other Permitted Liens) on any of the
Collateral which would adversely affect, in any material respect, the ability of
the Canadian Collateral Agent to exercise any of its remedies hereunder.
(b) Upon the occurrence and during the continuation of any Event of Default, and
after written notice is delivered to the applicable Canadian Grantor, all
insurance payments in respect of any Equipment shall be paid to and applied by
the Canadian Collateral Agent as specified in Section 5.4.
4.4. Intellectual Property. (a) With respect to each item of Intellectual
Property Collateral owned by each Canadian Grantor, each Canadian Grantor agrees
to take, at its expense, all commercially reasonable steps, including, as
applicable, in the Canadian Intellectual Property Office and any other
Governmental Authority located in Canada, to (i) maintain the validity and
enforceability of such Intellectual Property Collateral and maintain such
Intellectual Property Collateral in full force and effect, and (ii) pursue the
registration and maintenance of each Patent, Trademark, or Copyright
registration or application for registration, now or hereafter included in such
Intellectual Property Collateral of such in each case, except to the extent such
Canadian Grantor determines in its reasonable business judgment that the pursuit
or maintenance of such Intellectual Property Collateral is no longer desirable
in the conduct of such Canadian Grantor’s business.

 

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(b) Such Canadian Grantor shall (and shall cause all its licensees to), in such
Grantor’s reasonable business judgment (i) (1) continue to use each Trademark
included in the Intellectual Property Collateral in order to maintain such
Trademark in full force and effect with respect to each class of goods for which
such Trademark is currently used, free from any claim of abandonment for
non-use, (2) maintain at least the same standards of quality of products and
services offered under such Trademark as are currently maintained, (3) use such
Trademark with the appropriate notice of registration and all other notices and
legends to the extent required by Applicable Law, (4) not adopt or use any other
Trademark that is confusingly similar or a colorable imitation of such Trademark
unless the Canadian Collateral Agent shall obtain a perfected Security Interest
in such other Trademark pursuant to this Agreement and (ii) not do any act or
omit to do any act whereby (w) such Trademark (or any goodwill associated
therewith) may become destroyed, invalidated, impaired or harmed in any way,
(x) any Patent included in the Intellectual Property Collateral may become
forfeited, misused, unenforceable, abandoned or dedicated to the public or
(y) any portion of the Copyrights included in the Intellectual Property
Collateral may become invalidated, otherwise impaired or fall into the public
domain, except in each case to the extent failure to do any of the foregoing
would not reasonably be expected to result in a Material Adverse Effect.
(c) No Canadian Grantor shall discontinue use of or otherwise abandon any owned
Intellectual Property Collateral unless such Canadian Grantor shall have
previously determined that such use or the pursuit or maintenance of such
Intellectual Property Collateral is no longer desirable in the conduct of such
Canadian Grantor’s business except to the extent failure to do so would not
reasonably be expected to result in a Material Adverse Effect.
(d) In the event that any Canadian Grantor becomes aware after the date hereof
that any item of its material Intellectual Property Collateral is being
infringed or misappropriated by a third party in any way that would reasonably
be expected to have a Material Adverse Effect, such Canadian Grantor shall
promptly notify the Canadian Collateral Agent and take such actions, at its
expense, as such Canadian Grantor deems reasonable and appropriate under the
circumstances to protect or enforce such Intellectual Property Collateral,
including, if such Canadian Grantor deems it necessary, suing for infringement
or misappropriation and for an injunction against such infringement or
misappropriation.
(e) With respect to its Canadian Registered Intellectual Property owned by such
Canadian Grantor in its own name on the date hereof, each Canadian Grantor
agrees to execute or otherwise authenticate an agreement, in substantially the
form set forth in Exhibit 3 hereto (an “Intellectual Property Security
Agreement”), for recording the Security Interest granted hereunder to the
Canadian Collateral Agent in such Canadian Registered Intellectual Property with
the Canadian Intellectual Property Office and any other Governmental Authority
located in Canada necessary to perfect the Security Interest hereunder in such
Registered Intellectual Property except to the extent failure to do so would not
reasonably be expected to result in a Material Adverse Effect.

 

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4.5. Letter-of-Credit Rights. If any Canadian Grantor is or becomes the
beneficiary of a letter of credit having a face amount in excess of $5,000,000,
which Letter of Credit Rights with respect to any Collateral in which the
Security Interest is perfected, such Canadian Grantor shall promptly notify the
Canadian Collateral Agent thereof and such Canadian Grantor shall, at the
request of the Canadian Collateral Agent, pursuant to an agreement in form and
substance reasonably satisfactory to the Canadian Collateral Agent, use
commercially reasonable efforts to cause the issuer and/or confirmation bank to
either (i) consent to the assignment of any Letter of Credit Rights to the
Canadian Collateral Agent or (ii) agree to direct all payments thereunder
following the occurrence and during the continuance of an Event of Default to an
account as directed by the Canadian Collateral Agent for application to the
Obligations, in accordance with the provisions of the Credit Agreement.
4.6. [Intentionally deleted.]
5. Remedial Provisions.
5.1. Certain Matters Relating to Accounts. (a) At any time after the occurrence
and during the continuation of an Event of Default after written notice is
delivered to the Canadian Grantor, the Canadian Collateral Agent shall have the
right to make test verifications of the Accounts in any manner and through any
medium that it reasonably considers advisable, and each Canadian Grantor shall
furnish all such assistance and information as the Canadian Collateral Agent may
reasonably require in connection with such test verifications. The Canadian
Collateral Agent shall have the absolute right to share any information it gains
from such inspection or verification with any Secured Party.
(b) The Canadian Collateral Agent hereby authorizes each Canadian Grantor to
collect such Canadian Grantor’s Accounts and the Canadian Collateral Agent may
curtail or terminate said authority at any time upon notice after the occurrence
and during the continuation of an Event of Default. If required in writing by
the Canadian Collateral Agent at any time after the occurrence and during the
continuation of an Event of Default, any payments of Accounts, when collected by
any Canadian Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Canadian Grantor in the exact form received,
duly endorsed by such Canadian Grantor to the Canadian Collateral Agent if
required, in a Collateral Account maintained under the sole dominion and control
of and on terms and conditions reasonably satisfactory to the Canadian
Collateral Agent, subject to withdrawal by the Canadian Collateral Agent for the
account of the Secured Parties only as provided in Section 5.4, and (ii) until
so turned over, shall be held by such Canadian Grantor in trust for the Canadian
Collateral Agent and the other Secured Parties, segregated from other funds of
such Canadian Grantor. Each such deposit of Proceeds of Accounts shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.
(c) At the Canadian Collateral Agent’s written request at any time after the
occurrence and during the continuation of an Event of Default, each Canadian
Grantor shall deliver to the Canadian Collateral Agent all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the Accounts, including all original orders, invoices and shipping
receipts.
(d) Upon the occurrence and during the continuation of an Event of Default, a
Canadian Grantor shall not grant any extension of the time of payment of any of
the Accounts, compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partly, any person liable for the payment
thereof, or allow any credit or discount whatsoever thereon if the Canadian
Collateral Agent shall have instructed the Canadian Grantors in writing not to
grant or make any such extension, credit, discount, compromise, or settlement
under any circumstances during the continuation of such Event of Default.

 

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5.2. Communications with Obligors; Canadian Grantors Remain Liable. (a) The
Canadian Collateral Agent in its own name or in the name of others may at any
time after the occurrence and during the continuation of an Event of Default,
after giving reasonable written notice to the relevant Canadian Grantor of its
intent to do so, communicate with obligors under the Accounts to verify with
them to the Canadian Collateral Agent’s satisfaction the existence, amount and
terms of any Accounts. The Canadian Collateral Agent shall have the absolute
right to share any information it gains from such inspection or verification
with any Canadian Secured Party; provided, that the provisions of Section 13.16
of the Credit Agreement shall apply to such information.
(b) Upon the written request of the Canadian Collateral Agent at any time after
the occurrence and during the continuation of an Event of Default, each Canadian
Grantor shall notify obligors on the Accounts that the Accounts have been
assigned to the Canadian Collateral Agent, for the benefit of the Secured
Parties, and that payments in respect thereof shall be made directly to the
Canadian Collateral Agent and may enforce such Canadian Grantor’s rights against
such obligors.
(c) Anything herein to the contrary notwithstanding, each Canadian Grantor shall
remain liable under each of the Accounts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Canadian Collateral Agent nor any Canadian Secured Party shall have any
obligation or liability under any Account (or any agreement giving rise thereto)
by reason of or arising out of this Agreement or the receipt by the Canadian
Collateral Agent or any Canadian Secured Party of any payment relating thereto,
nor shall the Canadian Collateral Agent or any Canadian Secured Party be
obligated in any manner to perform any of the obligations of any Canadian
Grantor under or pursuant to any Account (or any agreement giving rise thereto),
to make any payment, to make any inquiry as to the nature or the sufficiency of
any payment received by it or as to the sufficiency of any performance by any
party thereunder, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
5.3. Proceeds to be Turned Over To Canadian Collateral Agent. In addition to the
rights of the Canadian Collateral Agent and the other Secured Parties specified
in Section 5.1 with respect to payments of Accounts, if an Event of Default
shall occur and be continuing and the Canadian Collateral Agent so requires by
notice in writing to the relevant Canadian Grantor (it being understood that the
exercise of remedies by the Secured Parties in connection with an Event of
Default under Section 11.5 of the Credit Agreement shall be deemed to constitute
a request by the Canadian Collateral Agent for the purposes of this sentence and
in such circumstances, no such written notice shall be required), all Proceeds
received by any Canadian Grantor consisting of cash, cheques and other near-cash
items shall be held by such Canadian Grantor in trust for the Canadian
Collateral Agent and the other Secured Parties, segregated from other funds of
such Canadian Grantor, and shall, forthwith upon receipt by such Canadian
Grantor, be turned over to the Canadian Collateral Agent in the exact form
received by such Canadian Grantor (duly endorsed by such Grantor to the Canadian
Collateral Agent, if required). All Proceeds received by the Canadian Collateral
Agent hereunder shall be held by the Canadian Collateral Agent in a Collateral
Account maintained under its sole dominion and control and on terms and
conditions reasonably satisfactory to the Canadian Collateral Agent. All
Proceeds while held by the Canadian Collateral Agent in a Collateral Account (or
by such Canadian Grantor in trust for the Canadian Collateral Agent and the
other Secured Parties) shall continue to be held as collateral security for all
the Canadian Obligations and shall not constitute payment thereof until applied
as provided in Section 5.4.

 

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5.4. Application of Proceeds. (a) Except as expressly provided elsewhere in this
Agreement or any other Credit Document, all proceeds received by the Canadian
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral shall be applied as follows:
(i) FIRST, to the payment of all reasonable and documented out-of-pocket costs
and expenses incurred by the Canadian Collateral Agent and Canadian
Administrative Agent in connection with such sale, collection or realization or
otherwise in connection with this Agreement, the other Canadian Security
Documents or any of the Canadian Obligations, including all court costs and the
reasonable and documented fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Canadian Collateral Agent hereunder or
under any other Canadian Security Document on behalf of any Canadian Grantor and
any other reasonable and documented out-of-pocket costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under any other
Canadian Security Document;
(ii) SECOND, to the Secured Parties, an amount equal to all Canadian Obligations
(other than Cash Management Obligations of a Canadian Grantor under a Secured
Cash Management Agreement and all Hedging Obligations of a Canadian Grantor
under each Secured Hedging Agreement) owing to them on the date of any such
distribution, and, if such moneys shall be insufficient to pay such amounts in
full, then ratably (without priority of any one over any other) to such Secured
Parties in proportion to the unpaid amounts thereof;
(iii) THIRD, to the Secured Parties, an amount equal to all Cash Management
Obligations of a Canadian Grantor under each Secured Cash Management Agreement
and all Hedging Obligations of a Canadian Grantor under each Secured Hedging
Agreement owing to them on the date of any such distribution, and, if such money
shall be insufficient to pay such amounts in full, then ratably (without
priority of any one over any other) to such Secured Parties in proportion to the
unpaid amounts thereof; and
(iv) FOURTH, any surplus then remaining shall be paid to the Canadian Grantors
or their successors or assigns or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.

 

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(b) 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.
5.5. PPSA and Other Remedies. If an Event of Default shall occur and be
continuing, the Canadian Collateral Agent may exercise in respect of the
Collateral, in addition to all 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 or any other Applicable Law or in equity and also may
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind 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 are 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 Grantor, and each Canadian Grantor 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 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 the whole or any part of the Collateral so sold, and
the Canadian Collateral Agent or such Secured Party may subject to (x) the
satisfaction in full in cash of all payments due pursuant to Section 5.4(a)(i)
hereof and (y) the satisfaction of the Canadian Obligations in accordance with
the priorities set forth in Section 5.4(a) hereof, pay the purchase price by
crediting the amount thereof against the Canadian Obligations. Each Canadian
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days’ notice to such Canadian Grantor 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 Grantor
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. Each Canadian Grantor
further agrees, at the Canadian Collateral Agent’s request, to assemble the
Collateral and make it available to the Canadian Collateral Agent at places
which the Canadian Collateral Agent shall reasonably select, whether at such
Canadian Grantor’s premises or elsewhere. The Canadian Collateral Agent shall
apply the net proceeds of any action taken by it pursuant to this Section 5.5 in
accordance with the provisions of Section 5.4 hereof. 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.

 

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5.6. Deficiency. Each Canadian Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay the Canadian Obligations and the fees and disbursements of any attorneys
employed by the Canadian Collateral Agent or any Secured Party to collect such
deficiency.
5.7. Amendments, etc. with Respect to the Canadian Obligations; Waiver of
Rights. Each Canadian Grantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Canadian Grantor and without
notice to or further assent by any Canadian Grantor, (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, 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
Grantor, 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 or any other Canadian Grantor, 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
Grantor or any release of the Canadian Borrowers or any other Canadian Grantor
shall not relieve any Canadian Grantor in respect of which a demand or
collection is not made or any Canadian Grantor 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
Grantor. For the purpose hereof “demand” shall include the commencement and
continuance of any legal proceedings.
5.8. Conflict with Credit Agreement. In the event of any conflict between the
terms of this Section 5 and the Credit Agreement, the Credit Agreement shall
prevail. Notwithstanding the foregoing, and for greater certainty, in no event
shall the proceeds of any Collateral pledged by any Canadian Grantor be used to
satisfy any US Obligations.

 

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6. The Canadian Collateral Agent.
6.1. Canadian Collateral Agent’s Appointment as Attorney-in-Fact, etc. (a) Each
Canadian Grantor hereby appoints, which appointment is irrevocable and coupled
with an interest, effective upon the occurrence and during the continuation of
an Event of Default, the Canadian Collateral Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Canadian Grantor and in the name of such Canadian Grantor or
otherwise, for the purpose of carrying out the terms of this Agreement and the
other Credit Documents, to take any and all appropriate action and to execute
any and all documents and instruments which the Canadian Collateral Agent may
deem necessary or desirable to accomplish the purposes of this Agreement and the
other Credit Documents, and, without limiting the generality of the foregoing,
each Canadian Grantor hereby gives the Canadian Collateral Agent the power and
right, on behalf of such Canadian Grantor, either in the Canadian Collateral
Agent’s name or in the name of such Canadian Grantor or otherwise, without
assent by such Canadian Grantor, to do any or all of the following at the same
time or at different times, in each case after the occurrence and during the
continuation of an Event of Default and after written notice by the Canadian
Collateral Agent of its intent to do so:
(i) take possession of and endorse and collect any cheques, drafts, notes,
acceptances or other instruments for the payment of moneys due under any Account
or with respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Canadian Collateral Agent for the purpose of collecting any
and all such moneys due under any Account or with respect to any other
Collateral whenever payable;
(ii) in the case of any Patents, Trademarks or Copyrights, execute and deliver,
and have recorded, any and all agreements, instruments, documents and papers as
the Canadian Collateral Agent may reasonably request to evidence the Canadian
Collateral Agent’s and the Secured Parties’ Security Interest in such Patents,
Trademarks or Copyrights and the goodwill and general intangibles of such
Canadian Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or threatened against
any Collateral;
(iv) execute, in connection with any sale provided for in Section 5.5, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral;
(v) obtain, pay and adjust insurance required to be maintained by such Canadian
Grantor or paid to the Canadian Collateral Agent pursuant to the Credit
Agreement;

 

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(vi) send verifications of Accounts to any Person who is or who may become
obligated to any Canadian Grantor under, with respect to or on account of an
Account;
(vii) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Canadian Collateral Agent or as the Canadian Collateral Agent shall direct;
(viii) ask or demand for, collect and receive payment of and receipt for, any
and all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral;
(ix) sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral;
(x) commence and prosecute any suits, actions or proceedings at law or in equity
in any court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral;
(xi) defend any suit, action or proceeding brought against such Canadian Grantor
with respect to any Collateral (with such Canadian Grantor’s consent (not to be
unreasonably withheld or delayed) to the extent such action or its resolution
could materially affect such Canadian Grantor or any of its Affiliates in any
manner other than with respect to its continuing rights in such Collateral;
provided that such consent right shall not limit any other rights or remedies
available to the Canadian Collateral Agent at law);
(xii) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Canadian
Collateral Agent may deem appropriate (with such Canadian Grantor’s consent (not
to be unreasonably withheld or delayed) to the extent such action or its
resolution could materially affect such Canadian Grantor or any of its
Affiliates in any manner other than with respect to its continuing rights in
such Collateral; provided that such consent right shall not limit any other
rights or remedies available to the Canadian Collateral Agent at law);
(xiii) assign any Intellectual Property Collateral throughout the world for such
term or terms, on such conditions, and in such manner, as the Canadian
Collateral Agent shall in its reasonable business discretion determine; and
(xiv) generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Canadian Collateral Agent were the absolute owner thereof for all purposes,
and do, at the Canadian Collateral Agent’s option and such Canadian Grantor’s
expense, at any time, or from time to time, all acts and things that the
Canadian Collateral Agent deems necessary to protect, preserve or realize upon
the Collateral and the Canadian Collateral Agent’s and the Secured Parties’
Security Interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Canadian Grantor might do.

 

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Anything in this Section 6.l(a) to the contrary notwithstanding, the Canadian
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 6.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Canadian Grantor fails to perform or comply with any of its
agreements contained herein, the Canadian Collateral Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Canadian Collateral Agent incurred in connection with
actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due Canadian Base Rate
Loans under the Credit Agreement, from the date of payment by the Canadian
Collateral Agent to the date reimbursed by the relevant Canadian Grantor, shall
be payable by such Canadian Grantor to the Canadian Collateral Agent on demand.
(d) Each Canadian Grantor hereby ratifies all that said attorney shall lawfully
do or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the Security Interests created hereby are
released.
6.2. Duty of Canadian Collateral Agent. The Canadian Collateral Agent’s sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under PPSA or otherwise, shall be to deal with it
in the same manner as the Canadian Collateral Agent deals with similar property
for its own account. 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. Neither the
Canadian Collateral Agent, any other Canadian Secured Party nor any of their
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Canadian Grantor or any other Person or to
take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Canadian Collateral Agent and the other
Secured Parties hereunder are solely to protect the Canadian Collateral Agent’s
and the other Secured Parties’ interests in the Collateral and shall not impose
any duty upon the Canadian Collateral Agent or any other Canadian Secured Party
to exercise any such powers. The Canadian Collateral Agent and the other Secured
Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Canadian
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.

 

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6.3. Authority of Canadian Collateral Agent. Each Canadian Grantor acknowledges
that the rights and responsibilities of the Canadian Collateral Agent under this
Agreement with respect to any action taken by the Canadian Collateral Agent or
the exercise or non-exercise by the Canadian Collateral Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Canadian
Collateral Agent and the other Secured Parties, be governed by this Agreement
and by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Canadian Collateral Agent and the Canadian
Grantors, the Canadian Collateral Agent shall be conclusively presumed to be
acting as agent for the Secured Parties with full and valid authority so to act
or refrain from acting, and no Canadian Grantor shall be under any obligation,
or entitlement, to make any inquiry respecting such authority.
6.4. Security Interest Absolute. All rights of the Canadian Collateral Agent
hereunder, the Security Interests created hereby and all obligations of the
Canadian Grantors hereunder shall be absolute and unconditional irrespective of
(a) any lack of validity or enforceability of the Credit Agreement, any other
Credit Document, any agreement with respect to any of the Canadian Obligations
or any other agreement or instrument relating to any of the foregoing, (b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Canadian Obligations, or any other amendment or waiver of or any
consent to any departure from the Credit Agreement, any other Credit Document or
any other agreement or instrument, (c) any exchange, release or non-perfection
of any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or
any of the Canadian Obligations, or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Canadian
Grantor in respect of the Canadian Obligations or this Agreement.
6.5. Continuing Security Interest; Assignments Under the Secured Debt Documents;
Release. (a) This Agreement shall remain in full force and effect and be binding
in accordance with and to the extent of its terms upon each Canadian Grantor 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, endorsees, transferees and assigns until the Termination Date.
(b) A Canadian Subsidiary Grantor shall automatically be released from its
obligations hereunder and the Security Interests in the Collateral of such
Canadian Subsidiary Grantor created hereby shall be automatically released upon
the consummation of any transaction permitted by the Credit Agreement, as a
result of which such Canadian Subsidiary Grantor ceases to be a Restricted
Subsidiary of the Company 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 Security Interests in Collateral created hereby shall be automatically
released and such Collateral sold free and clear of the Lien and Security
Interests created hereby (i) upon any Disposition by any Canadian Grantor of any
Collateral that is permitted under the Credit Agreement (other than to the
Company or any Canadian Subsidiary Grantor), (ii) to the extent such Collateral
is comprised of property leased to a Credit Party, upon termination or
expiration of such lease, (iii) if the release of such Lien is approved,
authorized or ratified in writing by the Required Lenders (or such other
percentage of the Lenders whose consent may be required in accordance with
Section 13.1), and (iv) as required by the Canadian Collateral Agent to effect
any Disposition of Collateral in connection with any exercise of remedies of the
Canadian Collateral Agent pursuant to this Agreement or any of the other
Security Documents.

 

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(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 Grantor, at such Canadian Grantor’s expense, all documents that such
Canadian Grantor 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 6.5(c) in connection with any request of evidence
of termination or release made of the Canadian Collateral Agent, the Canadian
Collateral Agent may request that the Canadian Grantor deliver a certificate of
an Authorized Officer to the effect that the sale or transfer transaction is in
compliance with the Credit Documents and as to such other matters as the
Canadian Collateral Agent may request. Any execution and delivery of documents
pursuant to this Section 6.5 shall be without recourse to or warranty by the
Canadian Collateral Agent.
6.6. 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
any of the Canadian Borrowers or any other Canadian Grantor, or upon or as a
result of the appointment of a receiver, receiver-manager, intervenor or
conservator of, or trustee or similar officer for, any of the Canadian Borrowers
or any other Canadian Grantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
6.7. Appointment of a Receiver. 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 Grantor 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
Grantor 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 Grantor, to preserve Collateral of the Canadian Grantor or its
value, to carry on or concur in carrying on all or any part of the business of
the Canadian Grantor and to sell, lease, license or otherwise dispose of or
concur in selling, leasing, licensing or otherwise disposing of Collateral of
the Canadian Grantor. To facilitate the forgoing powers, any such Receiver may,
to the exclusion of all others, including the Canadian Grantor, enter upon, use
and occupy all premises owned or occupied by the Canadian Grantor wherein
Collateral of the Canadian Grantor may be situated, maintain Collateral of the
Canadian Grantor 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 Grantor directly in carrying on the Canadian Grantor’s business or as
security for loans or advances to enable the Receiver to carry on the Canadian
Grantor’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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7. Miscellaneous.
7.1. Amendments in Writing. None of the terms or provisions of this Agreement
may be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the affected Canadian Grantor and the Canadian Collateral
Agent in accordance with Section 13.1 of the Credit Agreement; provided,
however, that this Agreement may be supplemented (but no existing provisions may
be modified and no Collateral may be released) through agreements substantially
in the form of Exhibit 1 and Exhibit 2, respectively, in each case duly executed
by each Canadian Grantor directly affected thereby.
7.2. 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 Grantor shall be given to it in
care of the Company at the Company’s addresses set forth in Section 13.2 of the
Credit Agreement.
7.3. No Waiver by Course of Conduct; Cumulative Remedies. Neither the Canadian
Collateral Agent nor any other Canadian Secured Party shall by any act (except
by a written instrument pursuant to Section 7.1 hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Event of Default or in any breach of any of the terms
and conditions hereof or of any other applicable Secured Debt Document. 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 other occasion. 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.
7.4. Enforcement Expenses; Indemnification. (a) Each Canadian Grantor agrees to
pay any and all reasonable and documented expenses (including all reasonable
fees and disbursements of counsel) that may be paid or incurred by any Canadian
Secured Party in enforcing, or obtaining advice of counsel in respect of, any
rights with respect to, or collecting, any or all of the Canadian Obligations
and/or enforcing any rights with respect to, or collecting against, such
Canadian Grantor under this Agreement to the extent any of the Canadian Grantors
would be required to do so pursuant to Section 13.5 of the Credit Agreement.

 

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(b) Each Canadian Grantor agrees to pay, and to save the Canadian Collateral
Agent and the other Secured Parties harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement to the extent any of the Borrowers would be
required to do so pursuant to Section 13.5 of the Credit Agreement.
(c) Without limitation of its indemnification obligations under the other Credit
Documents, each Canadian Grantor agrees to pay, and to hold the Canadian
Collateral Agent and the other Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent any of the Canadian Borrowers would be required to do so
pursuant to Section 13.5 of the Credit Agreement.
(d) Any such amounts payable as provided hereunder shall be additional Canadian
Obligations secured hereby and by the other Security Documents. The agreements
in this Section 7.4 shall survive termination of this Agreement or any other
Credit Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Canadian Obligations, the invalidity or unenforceability
of any term or provision of this Agreement or any other Credit Document or any
investigation made by or on behalf of the Canadian Collateral Agent or any other
Canadian Secured Party. All amounts due under this Section 7.4 shall be payable
on written demand therefor.
7.5. 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 permitted hereby, except that no Canadian Grantor 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.
7.6. 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’)), 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 Canadian Borrowers.
7.7. 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.

 

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--------------------------------------------------------------------------------

 

7.8. 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.
7.9. Integration. This Agreement represents the agreement of each of the
Canadian Grantors 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.
7.10. 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.
7.11. Submission To Jurisdiction Waivers. Each Canadian Grantor 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 general jurisdiction of a court of competent jurisdiction in
the Province of Ontario;
(b) consents that any such action or proceeding shall 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 Grantor
at its address referred to in Section 7.2 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 Applicable 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 7.11 any special, exemplary, punitive or consequential damages.

 

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--------------------------------------------------------------------------------

 

7.12. Acknowledgments. Each Canadian Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Credit Documents to which it is a party;
(b) neither the Canadian Collateral Agent nor any other Canadian Secured Party
has any fiduciary relationship with or duty to any Canadian Grantor arising out
of or in connection with this Agreement or any of the other Credit Documents,
and the relationship between the Canadian Grantors, on the one hand, and the
Canadian Collateral Agent and the other Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
(c) no joint venture is created hereby or by the other Credit Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Canadian Grantors and the Secured Parties; and
(d) upon any Event of Default, the Canadian Collateral Agent may proceed without
notice, against any Canadian Grantor and any Collateral to collect and recover
the full amount of any Obligation then due, without first proceeding against any
other Canadian Grantor, any other Canadian Credit Party or any other Collateral
and without first joining any other Canadian Grantor or any other Canadian
Credit Party in any proceeding.
7.13. Additional Canadian Grantors. Each Subsidiary of the Canadian Borrowers
that is required to become a party to this Agreement pursuant to Section 9.10 of
the Credit Agreement and the terms hereof shall become a Canadian Grantor, with
the same force and effect as if originally named as a Canadian Grantor herein,
for all purposes of this Agreement upon execution and delivery by such
Subsidiary of a Supplement substantially in the form of Exhibit 1 hereto. The
execution and delivery of any instrument adding an additional Canadian Grantor
as a party to this Agreement shall not require the consent of any other Canadian
Grantor hereunder. The rights and obligations of each Canadian Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Canadian Grantor as a party to this Agreement.
7.14. 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.
[Signature Pages Follow]

 

-28-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly
executed and delivered as of the date first above written.

            ASSOCIATED MATERIALS CANADA LIMITED, as a Canadian Grantor
      By:   /s/ David S. Brown         Name:   David S. Brown        Title:  
President Secretary        GENTEK CANADA HOLDINGS LIMITED, as a Canadian Grantor
      By:           Name:           Title:           GENTEK BUILDING PRODUCTS
LIMITED PARTNERSHIP, by its general partner GENTEK CANADA HOLDINGS LIMITED, as a
Canadian Grantor
      By:           Name:           Title:      

[Canadian Security Agreement]

 

--------------------------------------------------------------------------------

 

            ASSOCIATED MATERIALS CANADA LIMITED, as a Canadian Grantor
      By:           Name:   David S. Brown        Title:   President Secretary 
      GENTEK CANADA HOLDINGS LIMITED, as a Canadian Grantor
      By:   /s/ Vicki L. Hardman         Name:   VICKI L. HARDMAN       
Title:   VICE PRESIDENT        GENTEK BUILDING PRODUCTS LIMITED PARTNERSHIP, by
its general partner GENTEK CANADA HOLDINGS LIMITED, as a Canadian Grantor
      By:   /s/ Vicki L. Hardman         Name:   VICKI L. HARDMAN       
Title:   VICE PRESIDENT   

[Canadian Security Agreement]

 

--------------------------------------------------------------------------------

 

            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 Security Agreement]

 

 

--------------------------------------------------------------------------------

 

ANNEX A TO THE
CANADIAN SECURITY AGREEMENT
CANADIAN SUBSIDIARY GRANTORS
Canadian Subsidiary Grantors
•
Notice Address for All Canadian Grantors
Phone:
Facsimile:
Attention:

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 1 TO THE
CANADIAN SECURITY AGREEMENT
REGISTERED INTELLECTUAL PROPERTY
A. COPYRIGHTS AND COPYRIGHT APPLICATIONS
None.
B. PATENTS AND PATENT APPLICATIONS
Domestic Patent and Patent Applications
None.
Foreign Patent and Patent Applications
None.
C. TRADEMARKS AND TRADEMARK APPLICATIONS
Domestic Trademarks and Trademark Applications

                          Application #     Mark   Current Owner   Registration
#   Status
ADVANTAGE
  Gentek Building Products Limited Partnership   815751
TMA514167   Registered
AIR MASTER & Design
(LOGO) [c10708c1070812.gif]
  Gentek Building Products Limited Partnership   519428
TMA299268   Registered
ALURITE
  Gentek Building Products Limited Partnership   635859
TMA371,081   Registered
ASTERIX & Design
(LOGO) [c10708c1070813.gif]
  Gentek Building Products Limited Partnership   361353
TMA199543   Registered

 

 

--------------------------------------------------------------------------------

 

                          Application #     Mark   Current Owner   Registration
#   Status
BARRICADE
  Gentek Building Products Limited Partnership   1,301,163
TMA699317   Registered
CEDARWOOD
  Gentek Building Products Limited Partnership   585514
TMA350880   Registered
CENTENNIAL
  Gentek Building Products Limited Partnership   838079
TMA497777   Registered
CHECKMARK DESIGN
(LOGO) [c10708c1070809.gif]
  Gentek Building Products Limited Partnership   785524
TMA496559   Registered
CLASSIC DOUBLE 5
  Gentek Building Products Limited Partnership   434652
TMA240570   Registered
CLIMATIC
  Gentek Building Products Limited Partnership   387603
TMA216353   Registered
COLOR CLEAR THROUGH
  Gentek Building Products Limited Partnership   1019839
TMA 596853   Registered
CONCORD
  Gentek Building Products Limited Partnership   791676
TMA468462   Registered
DEALERS OF DISTINCTION
  Gentek Building Products Limited Partnership   1321510
TMA756459   Registered
ENERGY PLUS
  Gentek Building Products Limited Partnership   712607
TMA424287   Registered
ESTATE CLASSIC
  Gentek Building Products Limited Partnership   640260
TMA 379690   Registered
FAIRHAVEN SOUND
  Gentek Building Products Limited Partnership   1390446
TMA745480   Registered
FAIRWEATHER
  Gentek Building Products Limited Partnership   865176
TMA520,608   Registered
FENETRES NORD-AMERICAINES
  Gentek Building Products Limited Partnership   842497
TMA499744   Registered
FIRST IMPRESSIONS BY GENTEK
  Gentek Building Products Limited Partnership   1336830
TMA708,617   Registered
GENGLASS
  Gentek Building Products Limited Partnership   1348714
TMA718594   Registered
GENTEK
  Gentek Building Products Limited Partnership   785526
TMA496558   Registered
GENTEK & Design
(LOGO) [c10708c1070814.gif]
  Gentek Building Products Limited Partnership   785523
TMA496561   Registered

 

 

--------------------------------------------------------------------------------

 

                          Application #     Mark   Current Owner   Registration
#   Status
GENTEK BUILDER SERIES
  Gentek Building Products Limited Partnership   1228241
TMA691130   Registered
GENTEK My Design Home Studio & Logo
(LOGO) [c10708c1070815.gif]
  Gentek Building Products Limited Partnership   1424466     Allowed
HALLMARK
  Gentek Building Products Limited Partnership   452397
TMA250784   Registered
HARMONIE DE COULEURS
  Gentek Building Products Limited Partnership   1356862
TMA728,948   Registered
HYGENICIEL
  Gentek Building Products Limited Partnership   373822
TMA205383   Registered
LE RENOVATEUR DE PREMIER CHOIX & Design
(LOGO) [c10708c1070816.gif]
  Gentek Building Products Limited Partnership   842492
TMA537478   Registered
LE RENOVATEUR DE PREMIER CHOIX & Design
(LOGO) [c10708c1070817.gif]
  Gentek Building Products Limited Partnership   715937
TMA520412   Registered
MOULURESESSENTIALS DE GENTEK
  Gentek Building Products Limited Partnership   1356861
TMA728,949   Registered
NAW & Design
(LOGO) [c10708c1070818.gif]
  Gentek Building Products Limited Partnership   842498
TMA491771   Registered

 

 

--------------------------------------------------------------------------------

 

                          Application #     Mark   Current Owner   Registration
#   Status
NORTH AMERICAN WINDOWS
  Gentek Building Products Limited Partnership   842499
TMA499860   Registered
NORTHERN FOREST
  Gentek Building Products Limited Partnership   721694
TMA454110   Registered
OXFORD
  Gentek Building Products Limited Partnership   865179
TMA525528   Registered
PREMIUM RENOVATOR & Design
(LOGO) [c10708c1070819.gif]
  Gentek Building Products Limited Partnership   715936
TMA520438   Registered
PREMIUM RENOVATOR & Design
(LOGO) [c10708c1070820.gif]
  Gentek Building Products Limited Partnership   842491
TMA537507   Registered
PREMIUM RENOVATOR & Design Opposition
  Gentek Building Products Limited Partnership            
RAINAWAY
  Gentek Building Products Limited Partnership   675372
TMA398777   Registered
REGENCY
  Gentek Building Products Limited Partnership   452398
TMA250,785   Registered
REVERE My Design Home Studio & Logo
(LOGO) [c10708c1070821.gif]
  Gentek Building Products Limited Partnership   1424474     Allowed

 

 

--------------------------------------------------------------------------------

 

                          Application #     Mark   Current Owner   Registration
#   Status
ROUGHWOOD
  Gentek Building Products Limited Partnership   374971
TMA209,437   Registered
SEQUOIA
  Gentek Building Products Limited Partnership   1272906
TMA676191   Registered
SEQUOIA
  Gentek Building Products Limited Partnership   1228310
TMA690353   Registered
SEQUOIA SELECT & Design
(LOGO) [c10708c1070822.gif]
  Gentek Building Products Limited Partnership   1438095
TMA778773   Registered
SIERRA
  Gentek Building Products Limited Partnership   1212719
TMA641140   Registered
SIERRA
  Gentek Building Products Limited Partnership   470529
TMA265537   Registered
SIGNATURE
  Gentek Building Products Limited Partnership   1228722     Allowed
STEELSIDE
  Gentek Building Products Limited Partnership   1375565
TMA748073   Registered
THERMALOK
  Gentek Building Products Limited Partnership   635942
TMA371910   Registered
THERMALSLIDE
  Gentek Building Products Limited Partnership   449650
TMA253359   Registered
THERMAR
  Gentek Building Products Limited Partnership   454719
TMA258939   Registered
TRIMESSENTIALS BY GENTEK
  Gentek Building Products Limited Partnership   1228339
TMA694723   Registered
VYCAN
  Gentek Building Products Limited Partnership   531926
TMA310516   Registered

Foreign Trademarks and Trademark Applications
None.
D. DOMAIN NAMES
None.

 

 

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SCHEDULE 2 TO THE
REVOLVING CANADIAN SECURITY AGREEMENT
EXCLUSIVE IP AGREEMENTS
None.

 

 

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EXHIBIT 1 TO THE
CANADIAN SECURITY AGREEMENT
SUPPLEMENT NO. [_____], dated as of [                    ] (this “Supplement”),
to the Canadian Security Agreement dated as of October 13, 2010 (this
“Agreement”), among ASSOCIATED MATERIALS CANADA LIMITED, an Ontario corporation
(“Associated”), GENTEK CANADA HOLDINGS LIMITED, an Ontario corporation
(“Gentek”), and GENTEK BUILDING PRODUCTS LIMITED PARTNERSHIP, an Ontario limited
partnership by its general partner, Gentek (“LP”), each of the subsidiaries
listed of the Canadian Borrowers on Annex A hereto (each such subsidiary,
individually, a “Canadian Subsidiary Grantor” and, collectively, the “Canadian
Subsidiary Grantors”; and, together with the Associated, Gentek and LP,
collectively, the “Canadian Grantors”), and UBS AG CANADA BRANCH, as Canadian
collateral agent for the Secured Parties (in such capacity, together with its
successors in such capacity, the “Canadian Collateral Agent”).
A. Capitalized terms used herein and not otherwise defined herein (including
terms used in the preamble and the recitals) shall have the meanings assigned to
such terms in the Canadian Security Agreement.
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
Supplement, including terms defined in the preamble and recitals hereto.
C. Section 7.13 of the Canadian Security Agreement provides that each Restricted
Subsidiary of the Canadian Borrowers that is required to become a party to the
Canadian Security Agreement pursuant to Section 9.10 of the Credit Agreement and
the terms hereof shall become a Canadian Grantor, with the same force and effect
as if originally named as a Canadian Grantor therein, for all purposes of the
Canadian Security Agreement upon execution and delivery by such Subsidiary of an
instrument in the form of this Supplement. Each undersigned Guarantor (each, a
“New Canadian Grantor”) is executing this Supplement in accordance with the
requirements of the Canadian Security Agreement to become a Canadian Grantor
under the Canadian Security Agreement as consideration for the Canadian
Obligations.
Accordingly, the Canadian Collateral Agent and the New Canadian Grantors agree
as follows:
SECTION 1. In accordance with Section 7.13 of the Canadian Security Agreement,
each New Canadian Grantor by its signature below becomes a Canadian Grantor
under the Canadian Security Agreement with the same force and effect as if
originally named therein as a Canadian Grantor and each New Canadian Grantor
hereby (a) agrees to all the terms and provisions of the Canadian Security
Agreement applicable to it as a Canadian Grantor thereunder and (b) represents
and warrants that the representations and warranties made by it as a Canadian
Grantor thereunder are true and correct on and as of the date hereof (except

 

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where such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall have been true and
correct as of such earlier date). In furtherance of the foregoing, each New
Canadian Grantor, as security for the payment and performance in full of the
Canadian Obligations, does hereby assign, pledge, mortgage and hypothecate 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 all of the Collateral of such New Canadian
Grantor, in each case whether now or hereafter existing or in which now has or
hereafter acquires an interest. Each reference to a “Canadian Grantor” in the
Canadian Security Agreement shall be deemed to include each New Canadian
Grantor. The Canadian Security Agreement is hereby incorporated herein by
reference.
SECTION 2. Each New Canadian Grantor represents and warrants to the Canadian
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws affecting creditors’ rights generally and
subject to general principles of equity (whether considered in a proceeding in
equity or law).
SECTION 3. 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 Canadian Borrowers.
This Supplement shall become effective as to each New Canadian Grantor when the
Canadian Collateral Agent shall have received counterparts of this Supplement
that, when taken together, bear the signatures of such New Canadian Grantor and
the Canadian Collateral Agent.
SECTION 4. Such New Canadian Grantor hereby represents and warrants that (a) set
forth on Schedule A attached hereto is (i) the legal name of such New Canadian
Grantor, (ii) the jurisdiction of incorporation or organization of such New
Canadian Grantor, (iii) the identity or type of organization or corporate
structure of such New Canadian Grantor and (iv) the business number and
corporate or other identification number of such New Canadian Grantor (b) as of
the date hereof (i) Schedule B hereto sets forth all of the Registered
Intellectual Property owned by such New Grantor in its name, and indicates for
each such item, as applicable, the application and/or registration number, date
and jurisdiction of filing and/or issuance, and the identity of the current
applicant or registered owner, and (ii) Schedule C hereto sets forth all
Exclusive IP Agreements.
SECTION 5. Except as expressly supplemented hereby, the Canadian Security
Agreement shall remain in full force and effect.
SECTION 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 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 Security 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 8. 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 each New Canadian Grantor shall be given to it in care of
Associated Materials, LLC, a Delaware limited liability company (the “Company”),
at the Company’s address set forth in Section 13.2 of the Credit Agreement.
SECTION 9. Each New Canadian Grantor 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 New Canadian Grantor and the Canadian Collateral Agent
have duly executed this Supplement to the Canadian Security Agreement as of the
day and year first above written.

            [NEW CANADIAN GRANTOR(S)],
      By:           Name:           Title:           UBS AG CANADA BRANCH,
as Canadian Collateral Agent
      By:           Name:           Title:      

 

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SCHEDULE A
TO SUPPLEMENT NO. __ TO THE
CANADIAN SECURITY AGREEMENT
CORPORATE INFORMATION

                                              Federal Taxpayer      
Jurisdiction of             Identification Number       Incorporation or    
Type of Organization or     and Organizational   Legal Name   Organization    
Corporate Structure     Identification Number  
 
                       

SCHEDULE B
TO SUPPLEMENT NO. ___ TO THE
CANADIAN SECURITY AGREEMENT
REGISTERED INTELLECTUAL PROPERTY
A. COPYRIGHTS AND COPYRIGHT APPLICATIONS

          Registered Owner/Grantor   Title   Registration Number
 
       

B. PATENTS AND PATENT APPLICATIONS
Domestic Patent and Patent Applications

              Registered       Registration   Application Owner/Grantor   Patent
  No.   No.
 
           

Foreign Patent and Patent Applications

              Registered       Registration   Application Owner/Grantor   Patent
  No.   No.
 
           

C. TRADEMARKS AND TRADEMARK APPLICATIONS
Domestic Trademarks and Trademark Applications

              Registered       Registration   Application Owner/Grantor  
Trademark   No.   No.
 
           

 

 

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Foreign Trademarks and Trademark Applications

              Registered       Registration   Application Owner/Grantor  
Trademark   No.   No.
 
           

D. DOMAIN NAMES

 

 

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SCHEDULE C
TO SUPPLEMENT NO. ___ TO THE
CANADIAN SECURITY AGREEMENT
EXCLUSIVE IP AGREEMENTS

 

 

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EXHIBIT 2 TO THE
CANADIAN SECURITY AGREEMENT
SUPPLEMENT NO. [_____], dated as of [                    ] (this “Supplement”),
to the Canadian Security Agreement dated as of October 13, 2010 (this
“Agreement”), among ASSOCIATED MATERIALS CANADA LIMITED, an Ontario corporation
(“Associated”), GENTEK CANADA HOLDINGS LIMITED, an Ontario corporation
(“Gentek”), and GENTEK BUILDING PRODUCTS LIMITED PARTNERSHIP, an Ontario limited
partnership by its general partner, Gentek (“LP”), each of the subsidiaries
listed of the Canadian Borrowers on Annex A hereto (each such subsidiary,
individually, a “Canadian Subsidiary Grantor” and, collectively, the “Canadian
Subsidiary Grantors”; and, together with the Associated, Gentek and LP,
collectively, the “Canadian Grantors”), and UBS AG CANADA BRANCH, as Canadian
collateral agent for the Secured Parties (in such capacity, together with its
successors in such capacity, the “Canadian Collateral Agent”).
A. Capitalized terms used herein and not otherwise defined herein (including
terms used in the preamble and the recitals) shall have the meanings assigned to
such terms in the Canadian Security Agreement.
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
Supplement, including terms defined in the preamble and recitals hereto.
C. Pursuant to Section 5.1(c) of the Canadian Security Agreement, each Canadian
Grantor has agreed to deliver to the Canadian Collateral Agent a written
supplement substantially in the form of Exhibit 2 thereto with respect to any
After-Acquired Intellectual Property Collateral. The Canadian Grantors have
identified the additional After-Acquired Intellectual Property Collateral
acquired by such Grantors after the date of the Canadian Security Agreement set
forth on Schedules I and II hereto (collectively, the “Additional Collateral”).
Accordingly, the Canadian Collateral Agent and the Canadian Grantors agree as
follows:
SECTION 1. Schedules 1 and 2 of the Canadian Security Agreement are hereby
supplemented, as applicable, by the information set forth in Schedules I and II
hereto.
SECTION 2. 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 Canadian Grantor when the Canadian
Collateral Agent shall have received counterparts of this Supplement that, when
taken together, bear the signatures of such Canadian Grantor and the Canadian
Collateral Agent.
SECTION 3. Except as expressly supplemented hereby, the Canadian Security
Agreement shall remain in full force and effect.

 

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SECTION 4. 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.
SECTION 5. 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 Security 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 6. 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 each Canadian Grantor shall be given to it in care of
Associated Materials, LLC, a Delaware limited liability company (the “Company”),
at the Company’s address set forth in Section 13.2 of the Credit Agreement.
SECTION 7. Each Canadian Grantor 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 Canadian Grantor and the Canadian Collateral Agent have
duly executed this Supplement to the Canadian Security Agreement as of the day
and year first above written.

            [GRANTORS],
      By:           Name:           Title:           UBS AG CANADA BRANCH,
as Canadian Collateral Agent
      By:           Name:           Title:      

 

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SCHEDULE I
TO SUPPLEMENT NO. ___ TO THE
CANADIAN SECURITY AGREEMENT
REGISTERED INTELLECTUAL PROPERTY
A. COPYRIGHTS AND COPYRIGHT APPLICATIONS

          Registered Owner/Grantor   Title   Registration Number
 
       

B. PATENTS AND PATENT APPLICATIONS
C. TRADEMARKS AND TRADEMARK APPLICATIONS
Domestic Trademarks and Trademark Applications

              Registered       Registration   Application Owner/Grantor  
Trademark   No.   No.
 
           

Foreign Trademarks and Trademark Applications

              Registered       Registration   Application Owner/Grantor  
Trademark   No.   No.
 
           

D. DOMAIN NAMES

 

 

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SCHEDULE II
TO SUPPLEMENT NO. ___ TO THE
CANADIAN SECURITY AGREEMENT
EXCLUSIVE IP AGREEMENTS

 

 

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EXHIBIT 3 TO THE
CANADIAN SECURITY AGREEMENT
FORM OF CANADIAN INTELLECTUAL PROPERTY SECURITY AGREEMENT
This CANADIAN INTELLECTUAL PROPERTY SECURITY AGREEMENT (the “IP Security
Agreement”), dated as of [                    ], 200[_], among the Person listed
on the signature pages hereof (the “Canadian Grantor”), and UBS AG CANADA
BRANCH, as Canadian collateral agent for the Secured Parties (in such capacity,
together with its successors in such capacity, the “Canadian Collateral Agent”).
A. Capitalized terms used herein and not otherwise defined herein (including
terms used in the preamble and the recitals) shall have the meanings assigned to
such terms in the Canadian Security Agreement, dated as of October 13, 2010 (the
“Canadian Security Agreement”), among ASSOCIATED MATERIALS CANADA LIMITED, an
Ontario corporation (“Associated”), GENTEK CANADA HOLDINGS LIMITED, an Ontario
corporation (“Gentek”), and GENTEK BUILDING PRODUCTS LIMITED PARTNERSHIP, an
Ontario limited partnership by its general partner, Gentek (“LP”), each of the
subsidiaries listed of the Canadian Borrowers on Annex A hereto (each such
subsidiary, individually, a “Canadian Subsidiary Grantor” and, collectively, the
“Canadian Subsidiary Grantors”; and, together with the Associated, Gentek and
LP, collectively, the “Canadian Grantors”), and UBS AG CANADA BRANCH, as
Canadian collateral agent for the Secured Parties (in such capacity, together
with its successors in such capacity, the “Canadian Collateral Agent”).
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
Supplement, including terms defined in the preamble and recitals hereto.
C. Pursuant to Section 5.4(e) of the Canadian Security Agreement, Canadian
Grantor has agreed to execute or otherwise authenticate this IP Security
Agreement for recording the Security Interest granted under the Canadian
Security Agreement to the Canadian Collateral Agent in such Canadian Grantor’s
Canadian Registered Intellectual Property with the Canadian Intellectual
Property Office and any other Governmental Authority located in Canada necessary
to perfect the Security Interest hereunder in such Registered Intellectual
Property.
Accordingly, the Canadian Collateral Agent and Canadian Grantor agree as
follows:
SECTION 1. Grant of Security.1 The Canadian Grantor hereby grants to the
Canadian Collateral Agent for the benefit of the Secured Parties a security
interest in all of such Canadian Grantor’s right, title and interest in and to
the [Canadian Trademark registrations and applications] [Canadian Patent
registrations and applications] [Canadian Copyright registrations and
applications] set forth in Schedule A hereto (collectively, the “Collateral”).
 

      1   Separate agreements should be entered in respect of patents,
trademarks, and copyrights.

 

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SECTION 2. Security for Canadian Obligations. The grant of a Security Interest
in the Collateral by Canadian Grantor under this IP Security Agreement secures
the payment of all of 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 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 Grantor.
SECTION 3. Recordation. Canadian Grantor authorizes and requests that an
authorized officer of the Canadian Intellectual Property Office and any other
applicable governmental officer located in Canada record this IP Security
Agreement.
SECTION 4. Grants, Rights and Remedies. This IP Security Agreement has been
entered into in conjunction with the provisions of the Canadian Security
Agreement. Canadian Grantor does hereby acknowledge and confirm that the grant
of the security interest hereunder to, and the rights and remedies of, the
Canadian Collateral Agent with respect to the Collateral are more fully set
forth in the Canadian Security Agreement, the terms and provisions of which are
incorporated herein by reference as if fully set forth herein. In the event of
any conflict between the terms of this IP Security Agreement and the terms of
the Canadian Security Agreement, the terms of the Canadian Security Agreement
shall govern.
SECTION 5. Counterparts. This IP Security Agreement may be executed by one or
more of the parties to this IP Security Agreement 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.
SECTION 6. GOVERNING LAW. THIS IP SECURITY 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.
SECTION 7. Severability. Any provision of this IP Security 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 in the Canadian Security
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.

 

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SECTION 8. 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 Canadian Grantor shall be given to it in care of
Associated Materials, LLC, a Delaware limited liability company (the “Company”),
at the Company’s address set forth in Section 13.2 of the Credit Agreement.
SECTION 9. Expenses. Canadian Grantor agrees to reimburse the Canadian
Collateral Agent for its reasonable and documented out-of-pocket expenses in
connection with this IP Security Agreement, including the reasonable and
documented fees, other charges and disbursements of counsel for the Canadian
Collateral Agent.

 

3-3

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IN WITNESS WHEREOF, Canadian Grantor and the Canadian Collateral Agent have duly
executed this IP Security Agreement as of the day and year first above written.

            [NAME OF CANADIAN GRANTOR],
      By:           Name:           Title:           UBS AG CANADA BRANCH
as Canadian Collateral Agent
      By:           Name:           Title:      

 

3-4

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SCHEDULE A TO THE
CANADIAN INTELLECTUAL PROPERTY
SECURITY AGREEMENT
CANADIAN TRADEMARKS/CANADIAN PATENTS/
CANADIAN COPYRIGHTS]