Exhibit 10.40  EXECUTION VERSION  SECURITY AGREEMENT  Dated February 22, 2007  From  The Grantors referred to herein  as Grantors  to  Deutsche Bank AG New York Branch  as Collateral Agent


TA  B  L  E  O  F  C  O  N  T  E
  N  T  S  Section
  
  PageSection 1. Grant of Security
  
  2Section 2. Security for Obligations
  
  3Section 3. Grantors Remain Liable
  
  3Section 4. Maintaining the Account Collateral
  
  3Section 5. Representations and Warranties
  
  5Section 6. Further Assurances
  
  6Section 7. As to Inventory
  
  6Section 8. Insurance
  
  7Section 9. Post-Closing Changes; Collections on Receivables and
  Related Contracts
  
  7Section 10. Transfers and Other Liens
  
  8Section 11. Collateral Agent Appointed Attorney in Fact
  
  8Section 12. Collateral Agent May Perform
  
  9Section 13. The Collateral Agents Duties
  
  9Section 14. Remedies
  
  10Section 15. Indemnity and Expenses
  
  11Section 16. Amendments; Waivers; Additional Grantors; Etc.
  
  11Section 17. Notices, Etc.
  
  12Section 18. Continuing Security Interest; Assignments under the
  Credit Agreement
  
  12Section 19. Release; Termination
  
  13Section 20. Intercreditor
  
  13Section 21. Execution in Counterparts
  
  13Section 22. Governing Law
  
  14Section 23. Jurisdiction, Etc
  
  14Section 24. Waiver of Jury Trial
  
  14  Schedules  i


Schedule I
  -
  Pledged Deposit
  AccountsSchedule II
  -
  Location, Chief
  Executive Office, Type of Organization, Jurisdiction of Organization and
  Organizational Identification NumberSchedule III
  -
  Locations of
  InventoryExhibitsExhibit A
  -
  Form of
  Security Agreement Supplement  ii


SECURITY AGREEMENT  SECURITY AGREEMENT
dated February 22, 2007 made by BUILDING MATERIALS CORPORATION OF AMERICA,
a Delaware corporation (the Company), and the other Persons listed on the signature
pages hereof (the Company and the Persons so listed being, collectively,
the Grantors)
to DEUTSCHE BANK AG NEW YORK BRANCH (DBNY), as
Collateral Monitoring Agent (as defined in the Credit Agreement referred to
below) and DBNY in such capacity together with any successor collateral
monitoring agent appointed pursuant to Article VII of the Credit Agreement
(the Collateral Agent).  PRELIMINARY
STATEMENTS.  (1) The Company along with certain of its Subsidiaries has entered
into a Revolving Credit Agreement dated as of February 22, 2007 (said
Agreement, as it may hereafter be amended, restated, supplemented or otherwise
modified, refinanced or replaced from time to time, being the Credit Agreement)
with the Lender Parties and the Agents (each as defined therein).  (2) Each Grantor is the owner of the deposit accounts (the Pledged Deposit Accounts)
set forth opposite such Grantors name on Schedule I hereto.  (3) It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
that the Grantors shall have granted the security interest contemplated by this
Agreement.  Each Grantor will derive
substantial direct and indirect benefit from the transactions contemplated by
the Loan Documents.  (4) Terms defined in the Credit Agreement and not otherwise
defined in this Agreement are used in this Agreement as defined in the Credit
Agreement.  Further, unless otherwise
defined in this Agreement or in the Credit Agreement, terms defined in Article 8
or 9 of the UCC (as defined below) are used in this Agreement as such terms are
defined in such Article 8 or 9.  UCC means the
Uniform Commercial Code as in effect from time to time in the State of New
York; provided that, if
perfection or the effect of perfection or non perfection or the priority of the
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, UCC means the
Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions hereof relating to such perfection,
effect of perfection or non perfection or priority.  NOW, THEREFORE, in
consideration of the premises and in order to induce the Lender Parties to make
Advances and issue Letters of Credit under the Credit Agreement, to induce the
Hedge Banks to enter into Secured Hedge Agreements and to induce the Lender
Parties and Affiliates of the Lender Parties to enter into Cash Management
Services from time to time, each Grantor hereby agrees with the Collateral Agent
for the ratable benefit of the Secured Parties as follows:  1


Section 1. Grant
of Security.  Each Grantor hereby
grants to the Collateral Agent, for the ratable benefit of the Secured Parties,
a security interest in such Grantors right, title and interest in and to the
following, in each case, as to each type of property described below, whether
now owned or hereafter acquired by such Grantor, wherever located, and whether
now or hereafter existing or arising (collectively, the Collateral):  (a) all
inventory in all of its forms, including, without limitation, (i) all raw
materials, work in process, finished goods and materials used or consumed in
the manufacture, production, preparation or shipping thereof, (ii) goods
in which such Grantor has an interest in mass or a joint or other interest or
right of any kind (including, without limitation, goods in which such Grantor
has an interest or right as consignee) and (iii) goods that are returned
to or repossessed or stopped in transit by such Grantor), and all accessions
thereto and products thereof and documents of title therefor, including,
without limitation, computer programs and supporting information that
constitute inventory within the meaning of the UCC (any and all such property
being the Inventory);  (b) all
accounts, chattel paper (including, without limitation, tangible chattel paper
and electronic chattel paper), instruments (including, without limitation,
promissory notes), deposit accounts, letter-of-credit rights, general
intangibles (including, without limitation, payment intangibles) and other
obligations of any kind, whether or not arising out of or in connection with
the sale or lease of goods or the rendering of services and whether or not
earned by performance, and all rights now or hereafter existing in and to all
supporting obligations and in and to all security agreements, mortgages, Liens,
leases, letters of credit and other contracts securing or otherwise relating to
the foregoing property (any and all of such accounts, chattel paper,
instruments, deposit accounts, letter-of-credit rights, general intangibles and
other obligations, to the extent not referred to in clause (c), below, being
the Receivables, and any and all such supporting obligations, security
agreements, mortgages, Liens, leases, letters of credit and other contracts
being the Related
Contracts);  (c) the
following (collectively, the Account Collateral):  (i)            the Pledged Deposit Accounts and all
funds and financial assets from time to time credited thereto (including,
without limitation, all Cash Equivalents), and all certificates and
instruments, if any, from time to time representing or evidencing the Pledged
Deposit Accounts;  (ii)           all promissory notes, certificates of
deposit, checks and other instruments from time to time delivered to or
otherwise possessed by the Collateral Agent for or on behalf of such Grantor in
substitution for or in addition to any or all of the then existing Account
Collateral;  2


(iii)          all interest, dividends,
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the then existing Account Collateral; and  (d)       all precious metals, including without
limitation, platinum and rhodium, used in the production of Inventory (any and
all such property being the Precious Metals);
and  (e)       all proceeds of, collateral for, income,
royalties and other payments now or hereafter due and payable with respect to,
and supporting obligations relating to, any and all of the Collateral
(including, without limitation, proceeds, collateral and supporting obligations
that constitute property of the types described in clauses (a) through (d) of
this Section 1) and, to the extent not otherwise included, all (A) payments
under insurance (whether or not the Collateral Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral, and (B) cash
(any and all such property being, the Proceeds).  Section 2. Security
for Obligations.  This Agreement
secures, in the case of each Grantor, the payment of all Obligations of such
Grantor now or hereafter existing under the Loan Documents, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, fees, premiums, penalties, indemnifications, contract
causes of action, costs, expenses or otherwise (all such Obligations being the Secured Obligations).  Without limiting the generality of the
foregoing, this Agreement secures, as to each Grantor, the payment of all
amounts that constitute part of the Secured Obligations and would be owed by
such Grantor to any Secured Party under the Loan Documents but for the fact
that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving a Loan Party.  Section 3. Grantors
Remain Liable.  Anything herein to
the contrary notwithstanding, (a) each Grantor shall remain liable under
the contracts and agreements included in such Grantors Collateral to the
extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b) the
exercise by the Collateral Agent of any of the rights hereunder shall not
release any Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral and (c) no Secured Party shall
have any obligation or liability under the contracts and agreements included in
the Collateral by reason of this Agreement or any other Loan Document, nor
shall any Secured Party be obligated to perform any of the obligations or
duties of any Grantor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.  Section 4. Maintaining
the Account Collateral.  So long as
any Advance or any other Obligation (other than contingent obligations) of any
Loan Party under any Loan Document shall remain unpaid or any Letter of Credit
shall be outstanding unless cash collateralized or otherwise supported in a
manner reasonably acceptable to the Collateral Agent or any Lender Party shall
have any Commitment:  3


(a) Each
Grantor will maintain deposit accounts only with the financial institution
acting as Collateral Agent hereunder or with banks (Pledged Account Banks) that have agreed with such Grantor and the Collateral
Agent to comply with instructions originated by the Collateral Agent directing
the disposition of funds in such deposit account without the further consent of
such Grantor, such agreement to be in form and substance satisfactory to the
Collateral Agent (a Deposit
Account Control Agreement);provided,however, this Section 4(a) shall not apply to deposit
accounts (i) in which all funds therein are swept on a daily basis and
only to another deposit account over which there is in effect a Deposit Account
Control Agreement or (ii) operated solely as a payroll account, provided, that no funds or investments in
excess of $10,000,000 shall at any time be on deposit in the payroll accounts
in the aggregate; provided, further however, the Company shall have
forty-five (45) days (unless otherwise agreed by the Administrative Agent) from
the Closing Date to comply with the requirements of this Section 4.  (b) Subject
to Section 4(a), each Grantor shall instruct all of its account debtors to
remit all payments to (i) the applicable P.O. Boxes or Lockbox
Addresses of the applicable Pledged Account Banks with respect to all accounts
of such account debtor, which remittances shall be collected by the applicable
Pledged Account Banks and deposited into the applicable Pledged Deposit Account
or (ii) any other deposits accounts in which all funds therein are swept
on a daily basis and only to another deposit account over which there is in
effect a Deposit Account Control Agreement.  (c) During
the continuance of a Dominion Event, upon notice from the Administrative Agent
or the Required Lenders to the Company, upon the terms and subject to the
conditions set forth in the Deposit Account Control Agreement, all amounts held
in all of the Pledged Deposit Accounts by the Grantors shall be wired by the
close of business on each Business Day into an account with the Collateral
Agent (the Concentration
Account) and all collected amounts held in the Concentration
Account shall be applied as provided in Section 14.  For purposes hereof a Dominion Event shall
mean any period (i) commencing on the date on which either (x) an
Event of Default has occurred and is continuing or (y) the Specified
Liquidity Amount (based on the Borrowing Base Certificate last delivered) is
less than the greater of (x) $60,000,000 and (y) 10% of the aggregate
Revolving Credit Commitments and (ii) ending on the first date thereafter
on which (x) no Event of Default exists and (y) the Specified
Liquidity Amount (based on the Borrowing Base Certificate last delivered) has
been equal to or greater than the greater of (m) $60,000,000 and (n) 10%
of the aggregate Revolving Credit Commitments for 30 consecutive days (the Liquidity Cure);
provided, however, that a Liquidity Cure may be used as the basis for the
termination of a Dominion Event no more than two times in any Fiscal Year;
provided further, however, that no Dominion Event shall be deemed to have
occurred for the period from the Closing Date to the date which is 30 days
after the Closing Date.  4


Section 5. Representations
and Warranties.  Each Grantor
represents and warrants as follows:  (a) Such
Grantors exact legal name, location, chief executive office, type of
organization, jurisdiction of organization and organizational identification
number is set forth in Schedule II hereto.  (b) Such
Grantor is the legal and beneficial owner of the Collateral granted or
purported to be granted by it free and clear of any Lien, claim, option or
right of others, except for the security interest created under this Agreement
or permitted under the Credit Agreement. 
No effective financing statement or other instrument similar in effect
covering all or any part of such Collateral or listing such Grantor or any
trade name of such Grantor as debtor is on file in any recording office, except
such as may have been filed in favor of the Collateral Agent relating to the
Loan Documents or as otherwise permitted under the Credit Agreement.  (c) All
of the Inventory of such Grantor are located at the places specified therefor
in Schedule III hereto.  (d) None
of the Receivables is evidenced by a promissory note or other instrument that
has not been delivered to the Collateral Agent.  (e) Such
Grantor has no deposit accounts, other than the Pledged Deposit Accounts listed
on Schedule I hereto.  (f) This
Agreement creates in favor of the Collateral Agent for the benefit of the
Secured Parties a valid security interest in the Collateral granted by such
Grantor, securing the payment of the Secured Obligations; upon the filing of
financing statements, all filings and other actions necessary to perfect the
security interest in the Collateral granted by such Grantor will have been duly
made or taken and are in full force and effect; and such security interest is
first priority.  (g) No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is
required for (i) the grant by such Grantor of the security interest
granted hereunder or for the execution, delivery or performance of this
Agreement by such Grantor, (ii) the perfection or maintenance of the
security interest created hereunder (including the first priority nature of
such security interest), except for the filing of financing and continuation
statements under the UCC, the actions necessary for the Collateral Agent to
obtain control of Collateral as provided in Sections 9-104, 9-106 and 9-107 of
the UCC and actions necessary to perfect the Collateral Agents security
interest with respect to Collateral evidenced by a certificate of title or (iii) the
exercise by the Collateral Agent of its voting or other rights provided for in
this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement.  5


(h) The Inventory that has been
produced or distributed by such Grantor has been produced in compliance with
all requirements of applicable law, including, without limitation, the Fair
Labor Standards Act.  Section 6. Further Assurances.  (a)  Each Grantor agrees that from time
to time, at the expense of such Grantor, such Grantor will promptly execute and
deliver, or otherwise authenticate, all further instruments and documents, and
take all further action that may be necessary or desirable, or that the Collateral
Agent may request, in order to perfect and protect any pledge or security
interest granted or purported to be granted by such Grantor hereunder or to
enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral of such Grantor.  Without limiting the generality of the
foregoing, each Grantor will promptly with respect to Collateral of such
Grantor at the reasonable request of the Collateral Agent:  (i) mark conspicuously each document
included in Inventory, each chattel paper included in Receivables, and, at the
request of the Collateral Agent, each of its records pertaining to such
Collateral with a legend, in form and substance satisfactory to the Collateral
Agent, indicating that such document, chattel paper, or Collateral is subject
to the security interest granted hereby; (ii) if any such Collateral shall
be evidenced by a promissory note or other instrument, deliver and pledge to
the Collateral Agent hereunder such note or instrument duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Collateral Agent; (iii) file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the security
interest granted or purported to be granted by such Grantor hereunder; and (iv) deliver
to the Collateral Agent evidence that all other actions that the Collateral
Agent may deem reasonably necessary or desirable in order to perfect and
protect the security interest granted or purported to be granted by such
Grantor under this Agreement has been taken.  (b) Each Grantor hereby authorizes the
Collateral Agent to file one or more financing or continuation statements, and
amendments thereto, including, without limitation, one or more financing
statements indicating that such financing statements cover all Inventory,
Receivables, Precious Metals and Proceeds (or words of similar effect) of such
Grantor, regardless of whether any particular asset described in such financing
statements falls within the scope of the UCC or the granting clause of this
Agreement.  A photocopy or other
reproduction of this Agreement shall be sufficient as a financing statement
where permitted by law.  Each Grantor
ratifies its authorization for the Collateral Agent to have filed such
financing statements, continuation statements or amendments filed prior to the
date hereof.  (c) Each Grantor will furnish to the
Collateral Agent from time to time statements and schedules further identifying
and describing the Collateral of such Grantor and such other reports in
connection with such Collateral as the Collateral Agent may reasonably request,
all in reasonable detail.  Section 7. As to Inventory. 
(a)  Each Grantor will pay promptly when due all property and
other taxes, assessments and governmental charges or levies imposed upon, and
all claims (including, without limitation, claims for labor, materials and
supplies) against, its Inventory, except to the extent payment thereof is not
required by Section 5.01(b) of the Credit  6


Agreement.  In
producing its Inventory, each Grantor will comply with all requirements of
applicable law, including, without limitation, the Fair Labor Standards Act.  (b) Each Grantor hereby grants to the
Collateral Agent, for use upon the occurrence and during the continuance of an Event
of Default, the irrevocable, non-exclusive right and license to use all present
and future trademarks, trade names, copyrights, patents or technical processes
owned or used by such Grantor that relate to the Collateral and any other
Collateral granted by such Grantor as security for the Secured Obligations,
together with any goodwill associated therewith, all to the extent necessary to
enable the Collateral Agent to realize on, and exercise all rights of the
Collateral Agent and the Secured Parties in relation to, the Collateral in
accordance with this Agreement.  This
right shall inure to the benefit of all successors, assigns and transferees of
the Collateral Agent.  Such right and
license shall be granted free of charge, without requirement that any monetary
payment whatsoever be made to such Grantor.  Section 8. Insurance. 
(a)  Each Grantor will, at its own expense, maintain insurance with
respect to its Inventory in such amounts, against such risks, in such form and
with such insurers consistent with industry standards.  Each policy of each Grantor for liability
insurance shall provide for all losses to be paid on behalf of the Collateral
Agent and such Grantor as their interests may appear.  Each such policy shall in addition (i) name
such Grantor and the Collateral Agent as insured parties thereunder (without
any representation or warranty by or obligation upon the Collateral Agent) as
their interests may appear, (ii) contain the agreement by the insurer that
any loss thereunder shall be payable to the Collateral Agent notwithstanding
any action, inaction or breach of representation or warranty by such Grantor, (iii) provide
that there shall be no recourse against the Collateral Agent for payment of
premiums or other amounts with respect thereto and (iv) provide that at
least 10 days prior written notice of cancellation or of lapse shall be given
to the Collateral Agent by the insurer.  (b) Reimbursement under any liability
insurance maintained by any Grantor pursuant to this Section 8 may be paid
directly to the Person who shall have incurred liability covered by such
insurance.  In case of any loss involving
damage to Inventory when subsection (c) of this Section 8 is not
applicable, the applicable Grantor will make or cause to be made the necessary
repairs to or replacements of such Inventory, and any proceeds of insurance
properly received by or released to such Grantor shall be used by such Grantor,
except as otherwise permitted by the Credit Agreement, to pay or as
reimbursement for the costs of such repairs or replacements.  (c) So long as no Event of Default shall
have occurred and be continuing, all insurance payments received by the
Collateral Agent in connection with any loss, damage or destruction of any
Inventory will be released by the Collateral Agent to the applicable Grantor.  Section 9. Post-Closing Changes; Collections on Receivables and
Related Contracts.  (a)  No
Grantor will change its name, type of organization, jurisdiction of
organization or organizational identification number from those set forth in Section 5(a) of
this Agreement without first giving at least 15 days prior written notice to
the Collateral Agent and taking all action required by the Collateral Agent for
the purpose of perfecting or protecting the security interest granted by this
Agreement.  Each Grantor will hold and
preserve its records  7


relating to the Collateral, including, without
limitation, the Related Contracts, and will permit representatives of the Collateral
Agent at any time during normal business hours to inspect and make abstracts
from such records and other documents as the Collateral Agent may reasonably
request.  If any Grantor does not have an
organizational identification number and later obtains one, it will forthwith
notify the Collateral Agent of such organizational identification number.  (b) Except as otherwise provided in this
subsection (b), each Grantor will continue to collect, at its own expense, all
amounts due or to become due such Grantor under the Receivables.  In connection with such collections, such
Grantor may take (and, at the Collateral Agents direction during the
continuance of an Event of Default, will take) such action as such Grantor or
the Collateral Agent may deem necessary or advisable to enforce collection of
the Receivables; provided, however, that the Collateral Agent shall
have the right at any time, upon the occurrence and during the continuance of
an Event of Default and upon written notice to such Grantor of its intention to
do so, to notify the Obligors under any Receivables of the assignment of such
Receivables to the Collateral Agent and to direct such Obligors to make payment
of all amounts due or to become due to such Grantor thereunder directly to the
Collateral Agent and, upon such notification and at the expense of such
Grantor, to enforce collection of any such Receivables, to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done, and to otherwise exercise all rights
with respect to such Receivables, including, without limitation, those set
forth set forth in Section 9-607 of the UCC.  After receipt by any Grantor of the notice
from the Collateral Agent referred to in the proviso to the preceding sentence,
(i) all amounts and proceeds (including, without limitation, instruments)
received by such Grantor in respect of the Receivables of such Grantor shall be
received in trust for the benefit of the Collateral Agent hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Collateral Agent in the same form as so received (with any necessary
indorsement) to be deposited in the Concentration Account and either (A) released
to such Grantor so long as no Event of Default shall have occurred and be
continuing or (B) if any Event of Default shall have occurred and be
continuing, applied as provided in Section 14(b) and (ii) such
Grantor will not adjust, settle or compromise the amount or payment of any
Receivable, release wholly or partly any Obligor thereof or allow any credit or
discount thereon.  No Grantor will permit
or consent to the subordination of its right to payment under any of the
Receivables to any other indebtedness or obligations of the Obligor thereof.  Section 10. Transfers and Other Liens.  Each Grantor agrees that it will not (i) sell,
assign or otherwise dispose of, or grant any option with respect to, any of the
Collateral, other than sales, assignments and other dispositions of Collateral,
and options relating to Collateral, permitted under the terms of the Credit
Agreement, or (ii) create or suffer to exist any Lien upon or with respect
to any of the Collateral of such Grantor except for the pledge, assignment and
security interest created under this Agreement and Liens permitted under the
Credit Agreement.  Section 11. Collateral Agent Appointed Attorney in Fact.  Each Grantor hereby irrevocably appoints the
Collateral Agent such Grantors attorney in fact, with full authority in the
place and stead of such Grantor and in the name of such Grantor or otherwise,
from time to time, upon the occurrence and during the continuance of an Event
of Default, in the Collateral Agents discretion, to take any action and to
execute any instrument that the Collateral Agent  8


may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:  (a) to obtain and adjust insurance
required to be paid to the Collateral Agent pursuant to Section 8,  (b) to ask for, demand, collect,
sue for, recover, compromise, receive and give acquittance and receipts for
moneys due and to become due under or in respect of any of the Collateral,  (c) to receive, indorse and
collect any drafts or other instruments, documents and chattel paper, in
connection with clause (a) or (b) above, and  (d) to file any claims or take any
action or institute any proceedings that the Collateral Agent may reasonably
deem necessary or desirable for the collection of any of the Collateral or
otherwise to enforce the rights of the Collateral Agent with respect to any of
the Collateral.  Section 12. Collateral Agent May Perform.  If any Grantor during the continuance of an
Event of Default fails to perform any agreement contained herein, the
Collateral Agent may, but without any obligation to do so and without notice,
itself perform, or cause performance of, such agreement, and the expenses of
the Collateral Agent incurred in connection therewith shall be payable by such
Grantor under Section 15.  Section 13. The Collateral Agents Duties.  (a)  The powers conferred on the
Collateral Agent hereunder are solely to protect the Secured Parties interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers.  Except for the safe custody of
any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Collateral Agent shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not any Secured Party has or is deemed to have knowledge
of such matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Collateral.  The 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 it accords its own property.  (b) Anything contained herein to the
contrary notwithstanding, the Collateral Agent may from time to time, when the
Collateral Agent deems it to be necessary, appoint one or more subagents (each
a Subagent) for the Collateral Agent
hereunder with respect to all or any part of the Collateral.  In the event that the Collateral Agent so
appoints any Subagent with respect to any Collateral, (i) the assignment
and pledge of such Collateral and the security interest granted in such
Collateral by each Grantor hereunder shall be deemed for purposes of this
Security Agreement to have been made to such Subagent, in addition to the
Collateral Agent, for the ratable benefit of the Secured Parties, as security
for the Secured Obligations of such Grantor, (ii) such Subagent shall
automatically be vested, in addition to the Collateral Agent, with all rights,
powers, privileges, interests and remedies of the Collateral Agent hereunder
with respect to such Collateral, and (iii) the term Collateral Agent,
when used herein in relation to  9


any rights, powers, privileges, interests and remedies of the
Collateral Agent with respect to such Collateral, shall include such Subagent; provided, however,
that no such Subagent shall be authorized to take any action with respect to
any such Collateral unless and except to the extent expressly authorized in
writing by the Collateral Agent.  Section 14. Remedies.  If any Event of Default shall have occurred
and be continuing:  (a) The Collateral Agent may
exercise in respect of the Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies
of a secured party upon default under the UCC (whether or not the UCC applies
to the affected Collateral) and also may: 
(i) require each Grantor to, and each Grantor hereby agrees that it
will at its expense and upon request of the Collateral Agent forthwith,
assemble all or part of the Collateral as directed by the Collateral Agent and
make it available to the Collateral Agent at a place and time to be designated
by the Collateral Agent that is reasonably convenient to both parties; (ii) without
notice except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of the Collateral Agents
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Collateral Agent may deem commercially reasonable; (iii) occupy
any premises owned or leased by any of the Grantors where the Collateral or any
part thereof is assembled or located for a reasonable period in order to
effectuate its rights and remedies hereunder or under law, without obligation
to such Grantor in respect of such occupation; and (iv) exercise any and
all rights and remedies of any of the Grantors under or in connection with the
Collateral, or otherwise in respect of the Collateral, including, without limitation,
(A) any and all rights of such Grantor to demand or otherwise require
payment of any amount under, or performance of any provision of, the
Receivables and the other Collateral, (B) withdraw, or cause or direct the
withdrawal, of all funds with respect to the Account Collateral and (C) exercise
all other rights and remedies with respect to the Receivables and the other
Collateral, including, without limitation, those set forth in Section 9-607
of the UCC.  Each Grantor agrees that, to
the extent notice of sale shall be required by law, at least ten days notice
to such 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 Collateral Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given.  The 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.  (b) Any cash held by or on behalf
of the Collateral Agent and all cash proceeds received by or on behalf of the
Collateral Agent in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion of the Collateral
Agent, be held by the Collateral Agent as collateral for, and/or then or at any
time thereafter applied (after payment of any  10


amounts
payable to the Collateral Agent pursuant to Section 15) in whole or in
part by the Collateral Agent for the ratable benefit of the Secured Parties
against, all or any part of the Secured Obligations, by payment thereof to the
Administrative Agent for payment in accordance with Section 2.11(f) of
the Credit Agreement and any surplus of such cash or cash proceeds held by or
on the behalf of the Collateral Agent and remaining after payment in full of
all the Secured Obligations shall be paid over to the applicable Grantor or to
whomsoever may be lawfully entitled to receive such surplus.  (c) All payments received by any
Grantor in respect of the Collateral shall be received in trust for the benefit
of the Collateral Agent, shall be segregated from other funds of such Grantor
and shall be forthwith paid over to the Collateral Agent in the same form as so
received (with any necessary indorsement).  (d) The Collateral Agent may,
without notice to any Grantor except as required by law and at any time or from
time to time, charge, set off and otherwise apply all or any part of the
Secured Obligations against any funds held with respect to the Account
Collateral or in any other deposit account.  (e) The Collateral Agent may send
to each bank, securities intermediary or issuer party to any Deposit Account
Control Agreement, a Notice of Exclusive Control as defined in and under such
Agreement.  Section 15. Indemnity and Expenses.  (a)  Each Grantor agrees to indemnify,
defend and save and hold harmless each Secured Party and each of their
Affiliates and their respective officers, directors, employees, agents and
advisors (each, an Indemnified
Party) from and against, and shall pay on demand, any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Partys gross
negligence or willful misconduct.  (b) Each Grantor will upon demand pay to
the Collateral Agent the amount of any and all reasonable expenses, including,
without limitation, the reasonable fees and expenses of its counsel and of any
experts and agents, that the Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from or other realization upon, any of
the Collateral of such Grantor, (iii) the exercise or enforcement of any
of the rights of the Collateral Agent or the other Secured Parties hereunder or
(iv) the failure by such Grantor to perform or observe any of the
provisions hereof.  Section 16. Amendments; Waivers; Additional Grantors; Etc.  (a)  No amendment or waiver of any
provision of this Agreement, and no consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance  11


and for the specific purpose for which given.  No failure on the part of the Collateral
Agent or any other Secured Party to exercise, and no delay in exercising any
right hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.  (b) Upon the execution and delivery by
any Person of a security agreement supplement in substantially the form of Exhibit A
hereto (each a Security Agreement
Supplement) or such other form as may be reasonably
acceptable to the Administrative Agent, such Person shall be referred to as an Additional Grantor and shall be and become a
Grantor hereunder, and each reference in this Agreement and the other Loan
Documents to Grantor shall also mean and be a reference to such Additional
Grantor, each reference in this Agreement and the other Loan Documents to the Collateral
shall also mean and be a reference to the Collateral granted by such Additional
Grantor and each reference in this Agreement to a Schedule shall also mean and
be a reference to the schedules attached to such Security Agreement Supplement.  Section 17. Notices, Etc. 
All notices and other communications provided for hereunder shall be
either (i) in writing (including telecopier communication) and mailed,
telecopied or otherwise delivered or (ii) by electronic mail (if
electronic mail addresses are designated as provided below) confirmed
immediately in writing, in the case of the Company or the Collateral Agent,
addressed to it at its address specified in the Credit Agreement and, in the
case of each Grantor other than the Company, addressed to it at its address set
forth opposite such Grantors name on the signature pages hereto or on the
signature page to the Security Agreement Supplement pursuant to which it
became a party hereto; or, as to any party, at such other address as shall be
designated by such party in a written notice to the other parties.  All such notices and other communications
shall, when mailed, telecopied, sent by electronic mail or otherwise, be
effective when deposited in the mails, telecopied, sent by electronic mail and
confirmed in writing, or otherwise delivered (or confirmed by a signed
receipt), respectively, addressed as aforesaid; except that notices and other
communications to the Collateral Agent shall not be effective until received by
the Collateral Agent.  Delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or of any Security Agreement Supplement or Schedule
hereto shall be effective as delivery of an original executed counterpart
thereof.  Section 18. Continuing Security Interest; Assignments under the
Credit Agreement.  This Agreement
shall create a continuing security interest in the Collateral and shall (a) remain
in full force and effect until the later of (i) the payment in full in
cash of the Secured Obligations under the Credit Agreement (other than
contingent obligations) and the termination of all letters of credit (or cash
collateralization or otherwise supported in a manner satisfactory to the
Collateral Agent), or (ii) the Termination Date, (b) be binding upon
each Grantor, its successors and assigns and (c) inure, together with the
rights and remedies of the Collateral Agent hereunder, to the benefit of the
Secured Parties and their respective successors, transferees and assigns.  Without limiting the generality of the
foregoing clause (c), any Lender Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitment, the
Advances owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person  12


shall thereupon become vested with all the benefits in
respect thereof granted to such Lender Party herein or otherwise, in each case
as provided in Section 8.07 of the Credit Agreement.  Section 19. Release; Termination.  (a)  Upon any sale, lease, transfer or
other disposition of any item of Collateral of any Grantor in accordance with
the terms of the Loan Documents (other than sales of Inventory in the ordinary
course of business), the security interest in such Collateral shall
automatically terminate and, as promptly as practicable, the Collateral Agent
will, at such Grantors expense, execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted
hereby; provided, however, that (i) at the time of such
request and such release no Default shall have occurred and be continuing, (ii) such
Grantor shall have delivered to the Collateral Agent, at least five Business
Days prior to the date of the proposed release, a written request for release
describing the item of Collateral, together with a form of release for
execution by the Collateral Agent and a certificate of such Grantor to the
effect that the transaction is in compliance with the Loan Documents and as to
such other matters as the Collateral Agent may reasonably request.  (b) Upon the latest of (i) the
payment in full in cash of the Secured Obligations under the Credit Agreement
(other than contingent obligations), (ii) the Termination Date and (iii) the
termination, expiration, cash collateralization or provision of other credit support
satisfactory to the Issuing Bank of all Letters of Credit, the pledge and
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Grantor.  Upon any such termination, the Collateral
Agent will, at the applicable Grantors expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence
such termination.  Section 20. Intercreditor. 
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIENS AND SECURITY
INTERESTS GRANTED TO THE COLLATERAL AGENT PURSUANT TO THIS AGREEMENT IN ANY
COLLATERAL AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT WITH
RESPECT TO ANY COLLATERAL HEREUNDER ARE SUBJECT TO THE LIMITATION AND
PROVISIONS OF THE REVOLVER INTERCREDITOR AGREEMENT, DATED AS OF FEBRUARY 22,
2007 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO
TIME, THE INTERCREDITOR AGREEMENT,
AMONG THE COMPANY, EACH OTHER LOAN PARTY PARTY THERETO, THE COLLATERAL AGENT,
DEUTSCHE BANK TRUST COMPANY AMERICAS, AS SECOND LIEN COLLATERAL AGENT (AS
DEFINED THEREIN) AND DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, AS THIRD LIEN
COLLATERAL AGENT (AS DEFINED THEREIN), AND CERTAIN OTHER PERSONS THAT MAY BECOME
PARTY THERETO FROM TIME TO TIME AND CONSENTED TO BY BUILDING MATERIALS
CORPORATION OF AMERICA AND THE GRANTORS IDENTIFIED THEREIN.  IN THE EVENT OF ANY CONFLICT BETWEEN THE
TERMS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE TERMS OF THE
INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.  Section 21. Execution in Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and  13


all of which taken together shall constitute one and
the same agreement.  Delivery of an
executed counterpart of a signature page to this Agreement by telecopier
shall be effective as delivery of an original executed counterpart of this
Agreement.  Section 22. Governing Law. 
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.  Section 23. Jurisdiction, Etc.  (a)  Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement to which it is a party, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the fullest extent
permitted by law, in such Federal court. 
Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement in the courts of any jurisdiction.  (b) Each of the parties hereto
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement to which it is a party in any New York State or Federal
court.  Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.  Section 24. Waiver of Jury Trial.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT.  14


IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.   Address for Notices:
  c/o Building Materials Corp of America
  1361 Alps Road, Wayne, NJ 07470
  
  BUILDING MATERIALS CORPORATION OF AMERICA 
  BMCA ACQUISITION INC. 
  BMCA ACQUISITION SUB INC. 
  BMCA FRESNO LLC 
  BMCA FRESNO II LLC 
  BMCA GAINESVILLE LLC 
  BMCA INSULATION PRODUCTS INC. 
  BMCA QUAKERTOWN INC. 
  BUILDING MATERIALS INVESTMENT CORPORATION 
  BUILDING MATERIALS MANUFACTURING CORPORATION 
  DUCTWORK MANUFACTURING CORPORATION 
  GAF LEATHERBACK CORP. 
  GAF MATERIALS CORPORATION (CANADA) 
  GAF PREMIUM PRODUCTS INC. 
  GAF REAL PROPERTIES, INC. 
  GAFTECH CORPORATION 
  HBP ACQUISITION LLC 
  LL BUILDING PRODUCTS INC. 
  PEQUANNOCK VALLEY CLAIM SERVICE COMPANY, INC. 
  SOUTH PONCA REALTY CORP. 
  WIND GAP REAL PROPERTY ACQUISITION CORP.By
  /John M. Maitner/Name: John M. MaitnerTitle: Vice President and Treasurer


ACKNOWLEDGED & AGREEDDEUTSCHE BANK AG NEW YORK BRANCH, as Collateral
  AgentBy
  /Marguerite Sutton/Name: Marguerite SuttonTitle: DirectorBy
  /Enrique Landaeta/Name: Enrique LandaetaTitle: Vice President